/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200504.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, May 4, 2020, Vol. 24, No. 124 Headlines AERO-MARINE: Unsec. Creditors to Get Share of Cash Flow AKOUSTIS TECHNOLOGIES: Incurs $7.8-Mil. Net Loss in 3rd Quarter ALCOA CORP: Fitch Affirms BB+ Issuer Default Rating, Outlook Stable ALORICA INC: Moody's Cuts CFR to Caa3 & Alters Outlook to Negative AMERICAN STEEL: Closing for Good; Unsecureds Get 0% APELLIS PHARMACEUTICALS: Reports 1st Quarter Net Loss of $168.8M APEX ENERGY: Unsecured Creditors to Get 15% Under Plan APPLE LAND: Unsecureds to Get Remaining Proceeds in Assets Sales APPLOVIN CORP: S&P Affirms 'B+' ICR; Outlook Stable AQUABOUNTY TECHNOLOGIES: Stockholders Elect Eight Directors ARAL RESTAURANT: Access to Cash Collateral Continued Until May 26 ARCHDIOCESE OF NEW ORLEANS: Case Summary & 20 Unsecured Creditors ARCONIC CORP: Moody's Cuts CFR to Ba3 & Rates Sr. Sec. Notes Ba1 ARCONIC CORP: S&P Rates $1BB Revolving Credit Facility 'BB+' ASTRIA HEALTH: Gets Final Nod on DIP Financing, Cash Collateral Use AVADEL SPECIALTY: MCA's Karrilyn Thomas Is Plan Administrator AVINGER INC: Closes $3.15 Million Equity Offering BELOIT COLLEGE: Moody's Lowers Rating on $23MM Debt to Ba2 BLACKRIDGE RESEARCH: Case Summary & 2 Unsecured Creditors BLACKROCK TCP: S&P Cuts ICR to 'BB+'; Ratings Withdrawn BOSS OYSTER: Unsecureds Payouts Depend on Auction, Insurance Claims BOULDER DENTISTRY: Cash Collateral Use Until October 2020 Approved BOY SCOUTS: Suit vs Hartford Stays in Federal Court BRAND INDUSTRIAL: S&P Alters Outlook to Negative, Affirms 'B-' ICR BUZZARDS BENCH: Case Summary & 20 Largest Unsecured Creditors CALERES INC: S&P Downgrades ICR to 'B+'; Outlook Negative CANAM CONSTRUCTION: Moody's Withdraws B2 CFR on Debt Repayment CANNABICS PHARMA: Weinstein Int'l Raises Going Concern Doubt CARDINAL HOMES: Committee Seeks to Hire Williams Mullen as Counsel CELLA III: Girod Says Amended Disclosures Still Inadequate CENTURY ALUMINUM: Incurs $2.7 Million Net Loss in First Quarter CHICAGO, IL: Fitch Cuts Series 2013 Bonds to BB+ on State Downgrade CONCRETE PUMPING: S&P Alters Outlook to Negative, Affirms 'B' ICR CONSERVICE MIDCO: Moody's Assigns B3 CFR, Outlook Stable COSMOS HOLDINGS: Lowers Net Loss to $3.3M in 2019 DATA STORAGE: Has $29K Net Income for Year Ended Dec. 31, 2019 DIAMOND OFFSHORE: S&P Cuts ICR to 'D' on Weak Market Conditions DIAMOND RESORTS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. DIAMONDBACK INDUSTRIES: May 4 Telephonic Meeting Set to Form Panel DIJ CORP: Has Approval on Interim Cash Collateral Use Until May 12 DOUCE FRANCE: Seeks to Hire Lucove, Say & Co as Accountant EDISON PRICE: Voluntary Chapter 11 Case Summary EIGHTY-EIGHT HOMES: Case Summary & 5 Unsecured Creditors EKSO BIONICS: Lowers Net Loss to $2.5 Million in First Quarter ENC HOLDING: S&P Alters Outlook to Negative, Affirms 'B' ICR ENSONO LP: S&P Alters Outlook to Stable, Affirms 'B-' ICR FANNIE MAE: Lowers Net Income to $461 Million in 1st Quarter FAT BRANDS: DBRS Puts B Rating on Class B-2 Notes Under Review FIRST QUANTUM: Fitch Lowers LongTerm IDR to B-, Outlook Stable FOODFIRST GLOBAL: To Cut Footprint Amid Closures Due to Pandemic FORESIGHT ENERGY: Fitch Withdraws 'D' LongTerm IDR on Bankruptcy FREDDIE MAC: Reports First Quarter Net Income of $173 Million FTS INTERNATIONAL: Incurs $11.7 Million Net Loss in First Quarter GEMINI HDPE: Moody's Cuts $368MM Senior Secured Term Loan to Ba3 GENOCEA BIOSCIENCES: Incurs $12.9 Million Net Loss in 1st Quarter GETTY IMAGES: Moody's Alters Outlook on B3 CFR to Negative GLENN POOL: Moody's Lowers Rating on Senior Secured Notes to Caa1 GOBP HOLDINGS: Moody's Hikes CFR to B1 & Alters Outlook to Stable GRAHAM HOLDINGS: S&P Downgrades ICR to 'BB'; Outlook Negative HANESBRANDS INC: Moody's Cuts Prob. of Default Rating to Ba2-PD HEARTS AND HANDS: Lawyer Not Entitled to Payment of Fees & Costs HEATING & PLUMBING: June 18 Plan Confirmation Hearing Set HENRY HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR HERTZ GLOBAL: S&P Cuts ICR to 'CCC-' on Restructuring Concerns HUMMEL STATION: S&P Cuts Senior Secured Term Loan B Rating to CCC+ IAA INC: S&P Places 'BB-' ICR on Watch Neg. Due to COVID-19 Risks ICONIC BRANDS: Has $3.95M Net Loss for the Yearend Dec. 31, 2019 INNOVATIVE DESIGNS: Incurs $69K Net Loss in First Quarter INTERNATIONAL FOOD: Seeks Court Approval to Hire Accountant INTERNATIONAL FOOD: Seeks Court Approval to Hire Consultants INTERNATIONAL FOOD: Seeks Court Approval to Hire Skyway Consultant INTERNATIONAL FOOD: Seeks to Hire Eleventh Hour as Consultant INTERNATIONAL FOOD: Seeks to Hire Nan-Mar LLC as Consultant ISRAEL BAPTIST: Seeks to Hire Abrams Foster Nole as Accountant J. HILBURN INC: Case Summary & 20 Largest Unsecured Creditors JACKSON COLLEGE: Moody's Rates $10.3 Million 2015 Bonds 'B2' JELD-WEN INC: S&P Rates New Senior Secured Notes 'BB+' JSL LAND COMPANY: Seeks to Hire David Johnston as Legal Counsel KAISER ALUMINUM: Moody's Rates New $300MM Sr. Unsecured Notes 'B1' KLAUSNER LUMBER: Case Summary & 20 Largest Unsecured Creditors KRONOS WORLDWIDE: Fitch Alters Outlook on 'B+' LT IDR to Negative L BRANDS: Moody's Cuts CFR to B1, On Review for Downgrade LAKEWAY PUBLISHERS: May 26 Plan Confirmation Hearing Set LANDAU BKN HOLDINGS: Case Summary & 12 Unsecured Creditors LANDS' END: S&P Downgrades ICR to 'B-' on COVID-19 Impact LESBRAN GROUP: Seeks to Hire Thomas E. Crowe as Legal Counsel LINDBLAD EXPEDITIONS: S&P Cuts ICR to B; Ratings on Watch Negative LOGIX HOLDING: Moody's Cuts CFR to Caa1 on Very Weak Liquidity LONESTAR RESOURCES: BDO USA LLP Raises Going Concern Doubt LORD & TAYLOR: Reportedly Exploring Filing for Bankruptcy LOVE FREIGHTWAYS: Allowed to Use Cash Collateral on Interim Basis MACY'S INC: S&P Lowers ICR to 'B+'; Outlook Negative MATRIX INDUSTRIES: Court Approves Disclosure Statement MCIG INC: Accumulated Deficit Casts Going Concern Doubt MIAMI AIR INTERNATIONAL: Hires Cassel Salpeter as Investment Banker MIAMI AIR: Aviation Accident Litigation Firm Woos Claimants MICROCURRENT RESEARCH: Hires Buddy D. Ford as Legal Counsel MILLS ELDER: Seeks to Hire Brian K. McMahon as Counsel MR. CAMPER: Court Approves Disclosure Statement MR. CAMPER: Unsecured Creditors to Get Full Payment Over 6 Years MYSTIC TRANSPORTATION: Seeks to Hire Coan Lewendon as Counsel NATES AUTO REPAIR: May Interimly Use Cash Collateral Through May 7 NAVIENT CORP: Fitch Lowers LT IDR & Sr. Unsec. Debt Rating to BB- NAVISTAR INT'L: Fitch Lowers Senior Unsecured Notes to 'CCC/RR6' NORTHERN INYO HEALTHCARE DISTRICT: S&P Cuts GO Bond Rating to B+ OLB GROUP: Incurs $1.34 Million Net Loss in 2019 OTERO COUNTY: Bankruptcy Court Declines to Hear Fee Dispute OWENS PRECISION: Walter & Rita Owens Object to Plan Confirmation PCT LTD: Needs More Working Capital to Remain as a Going Concern PELICAN PRODUCTS: Moody's Alters Outlook on B3 CFR to Negative PG&E CORP: 3 Current Directors to Remain on Reorganized Company PG&E CORP: CEO Johnson to Retire Upon Exit From Chapter 11 PG&E CORP: Reports $371MM Profit; On Track for June 30 Exit PIERCE WILLIAMS: Hearing on Cash Collateral Use Continued to May 20 PJZ TRANSPORT: May 19 Hearing on Disclosure Statement POLYONE CORP: Moody's Rates New $650MM Sr. Unsecured Notes 'Ba3' PRIMESOURCE BUILDING: S&P Alters Outlook to Neg., Affirms 'B' ICR PROLINE CONCRETE: May 21 Disclosure Statement Hearing Set PROLINE CONCRETE: Unsec. Creditors to Get 10% Dividend in 5 Years QUESOS DEL PAIS: Creditor's Counsel Awarded $167.50 in Expenses QUORUM HEALTH: Interim DIP Financing, Cash Collateral Use Approved QUORUM HEALTH: Vista Health Not Impacted by Quorum Restructuring REAGOR-DYKES MOTORS: Taps Stricklin Law Firm as Special Counsel REALOGY GROUP: Moody's Cuts CFR to B2 & Sr. Unsec. Rating to Caa1 REVERE POWER: Moody's Cuts Sr. Secured Rating to B1, Outlook Neg. ROCHESTER DRUG: Hires Huron Consulting as Financial Advisor ROCHESTER DRUG: Hires Kurzman Eisenberg as Special Counsel ROCHESTER DRUG: Seeks to Hire Bond Schoeneck as Counsel RUBIE'S COSTUME: Case Summary & 30 Largest Unsecured Creditors SAEXPLORATION: Pannell Kerr Forster Raises Going Concern Doubt SAMANTHA SANSON: Payouts to Unsecureds to Rely on Asset Sales SCOOBEEZ INC: Unsec. Creditors to Get 20% of Shares, Cash in Plan SEQUA CORP: Moody's Lowers CFR to Caa3, Outlook Negative SHIFT4 PAYMENTS: Moody's Lowers CFR to B3, Outlook Stable SIMKAR LLC: Trustee's Liquidating Plan Confirmed by Judge SKIP LLC: June 3 Hearing on Disclosure Statement SLM CORP: Fitch Alters Outlook on 'BB+' LT IDR to Negative SM ENERGY: Fitch Lowers IDR to 'C' on Debt Exchange Announcement SONADOR CAPITAL: Case Summary & 2 Unsecured Creditors SOUTHERN PRODUCE: Growers' Bid for Jury Trial Junked SPERLING RADIOLOGY: Taps Mauro Lilling Naparty as Special Counsel SPI ENERGY: Delays Filing of Annual Report Over COVID-19 SRQ TAXI MANAGEMENT: Airport Authority Breached Deal, Court Says SUMMITSOFT CORPORATION: Hires O'Donnell Ficenec as Accountant SUNCOAST ARCADE: Court Approves Disclosure Statement SUNCREST STONE: Plan Confirmation Hearing Rescheduled to May 14 SYNIVERSE HOLDINGS: S&P Downgrades ICR to 'CCC+' on High Leverage TALBOTS INC: Moody's Cuts CFR & Sr. Secured Loan Rating to 'B3' TEMPO ACQUISITION: Moody's Alters Outlook on B2 CFR to Negative TENNECO INC: Fitch Lowers LT IDR to 'B+', Outlook Negative THIRD COAST: S&P Puts 'B' ICR on Watch Neg. on Revolver Expiry TOWN SPORTS: Receives Noncompliance Notices from Nasdaq TOWN SPORTS: TSI Obtains $2.7 Million PPP Loan from BankUnited TRANSALTA CORP: Fitch Withdraws BB+ Issuer Default Rating TRANSOCEAN LTD: Incurs $391 Million Net Loss in First Quarter TRI POINTE: S&P Alters Outlook to Negative, Affirms 'BB-' ICR U.S.A. PARTS: Seeks to Hire Campbell Flannery as Legal Counsel ULTRA PETROLEUM: Delays Filing of Amended 2019 Form 10-K ULTRA PETROLEUM: Posts $108 Million Net Income in 2019 US ANTIMONY: DeCoria, Maichel & Teague Raises Going Concern Doubt US FOODS: Moody's Cuts CFR to B2 & Alters Outlook to Negative US FOODS: S&P Rates New $700MM Sr. Secured Term Loan Due 2027 'BB' VAIL RESORTS: Moody's Rates New $500MM Sr. Unsec. Notes 'B2' VCHP NEPTUNE BEACH: Hires Agentis PLLC as Bankruptcy Counsel WALDEN PALMS: June 22 Disclosure Statement Hearing Set WAND NEWCO 3: Moody's Alters Outlook on B2 CFR to Negative WESTINGHOUSE ELECTRIC: Santee Cooper Wins Default Judgment WILLIAM LYON: S&P Raises ICR to 'BB'; Rating Withdrawn WOODCREST ACE: May Continue Using Cash Collateral Until May 12 ZDN INC: Seeks to Hire Cohen & Cohen as Bankruptcy Counsel [^] BOND PRICING: For the Week from April 27 to May 1, 2020 ********* AERO-MARINE: Unsec. Creditors to Get Share of Cash Flow ------------------------------------------------------- Debtors Aero-Marine Technologies, Inc., and Joseph N. Vaughn and Theresa L. Vaughn filed an Amended Joint Plan of Reorganization and a corresponding Disclosure Statement on April 14, 2020. The Plan provides for the sale of real property owned directly or indirectly by the Debtors with the exception of the Vaughns homestead, for the sale of excess equipment, and for the continued operations of the repair facility by Aero-Marine. The Vaughns' obligations under the Plan will be funded by their employment income from Aero-Marine based on their current salary levels. The Plan provides for unsecured creditors holding Allowed Claims to receive their pro rata share of the Debtors' respective net cash flow or net disposable income over 20 quarters. The Debtors believe that the Plan provides the greatest possible recovery to the Debtors' creditors. The Debtors believe that acceptance of the Plan is in the best interest of each and every Class of Claims and recommends that the Voting Classes vote to accept the Plan. Class 7 consists of all Allowed Unsecured Claims of creditors of Aero-Marine Technologies, Inc. Aero-Marine shall pay to Holder of a Class 7 Allowed Unsecured Claim the Net Cash Flow over 5 years. Aero Marine will distribute a pro rata share of the Net Cash Flow to the Holders of a Claim of the Unsecured Class of Aero Marine Technologies, Inc. Class 8 is comprised of all allowed unsecured claims of creditors of Joseph and Theresa Vaughn. The Vaughns will pay to each Holder of a Class 8 Allowed Unsecured Claim a pro rata share of the Vaughns' monthly projected disposable income for five years. Class 9 consists of all equity interests in Aero-Marine. The Vaughns will retain their equity interest in Aero-Marine in consideration of new value provided by the Vaughns from their exempt assets for the purchase of Essential Equipment in Class 3. The Plan provides for the continued operation of the Debtor as the Reorganized Debtor. Claims will be satisfied by (a) transfers of collateral, (b) from the proceeds of sales of real and personal property, or (c) from monthly, quarterly, or annual payments from the revenue obtained by the Debtors or the Reorganized Debtor. At the present time, the Debtors believe that the Reorganized Debtor will have sufficient funds, as of the Effective Date, to meet its obligations under the Plan. At the present time, the Debtors' projected disposable income is $970 per month. A full-text copy of the Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/y73raz3p from PacerMonitor at no charge. The Debtors are represented by: Stichter, Riedel, Blain & Postler, P.A. Daniel R. Fogarty Mark F. Robens 110 East Madison Street, Suite 200 Tampa, Florida 33602 Telephone: (813) 229-0144 Facsimile: (813) 229-1811 E-mail: dfogarty@srbp.com mrobens@srbp.com About Aero-Marine Technologies Aero-Marine Technologies, Inc. --https://www.aero-marinetechnologies.com/ -- provides total support for waste and water system components found on Boeing, Airbus and Embraer aircraft. Aero-Marine Technologies is a full-service Maintenance, repair and overhaul (MRO) with a worldwide customer base. Aero-Marine Technologies sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-07547) on Aug. 9, 2019. The Debtor's case is jointly administered to that of Joseph N. Vaughn and Theresa L. Vaughn. In the petition signed by Joseph N. Vaughn, president, Aero-Marine's assets are estimated at $500,000 to $1 million, and its liabilities at $1 million to $10 million. The Hon. Caryl E. Delano is the case judge. Stitchler, Riedel, Blain & Postler, P.A., is the Debtor's legal counsel. AKOUSTIS TECHNOLOGIES: Incurs $7.8-Mil. Net Loss in 3rd Quarter --------------------------------------------------------------- Akoustis Technologies, Inc., reported a net loss of $7.77 million on $363,000 of total revenue for the three months ended March 31, 2020, compared to a net loss of $9.43 million on $237,000 of total revenue for the three months ended March 31, 2019. For the nine months ended March 31, 2020, the Company reported a net loss of $26.06 million on $1.42 million of total revenue compared to a net loss of $23.48 million on $873,000 of total revenue for the nine months ended March 31, 2019. As of March 31, 2020, the Company had $62.91 million in total assets, $24.42 million in total liabilities, and $38.49 million in total stockholders' equity. At March 31, 2020, the Company had cash and cash equivalents of $39.6 million and working capital of $37.5 million. The Company has historically incurred recurring operating losses and has experienced net cash used in operating activities of $16.4 million for the nine months ended March 31, 2020 which, the Company said, raises substantial doubt its ability to continue as a going concern within one year after the issuance date. As of April 24, 2020, the Company had $38.4 million of cash and cash equivalents, which the Company expects to be sufficient to fund its operations beyond the next twelve months from the date of filing of this Form 10-Q. These funds will be used to fund the Company's operations, including capital expenditures, R&D, commercialization of its technology, development of its patent strategy and expansion of its patent portfolio, as well as to provide working capital and funds for other general corporate purposes. 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. The Company said that if it is unable to obtain additional financing in a timely fashion and on acceptable terms, its financial condition and results of operations may be materially adversely affected and it may not be able to continue operations or execute its stated commercialization plan. A full-text copy of the Quarterly Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/he1dso About Akoustis Technologies Headquartered in Huntersville, NC, Akoustis is focused on developing, designing, and manufacturing innovative RF filter products for the mobile wireless device industry, including for products such as smartphones and tablets, cellular infrastructure equipment, and WiFi premise equipment. Akoustis reported a net loss of $29.25 million for the year ended June 30, 2019, compared to a net loss of $21.74 million for the year ended June 30, 2018. ALCOA CORP: Fitch Affirms BB+ Issuer Default Rating, Outlook Stable ------------------------------------------------------------------- Fitch Ratings affirmed Alcoa Corporation's Issuer Default Rating at 'BB+'. The Rating Outlook is Stable. The ratings of subsidiary Alcoa Nederland Holding B.V. benefit from an Alcoa Corporation guarantee and reflect Alcoa's modest leverage; leading positions in bauxite, alumina and aluminum; strong control over costs and spending; and flexibility afforded by the scope of its operations. The Stable Outlook reflects Fitch's view that operations will continue not to be materially impacted by the coronavirus and that cost and capex reductions will limit FCF burn over 2020 and 2021 to below $100 million in aggregate after minimum pension contributions. KEY RATING DRIVERS Low-Cost Upstream Position: Alcoa's bauxite costs are in the low second quartile; alumina costs are in the first quartile and aluminum costs are in the high second quartile of global production costs. Alcoa's alumina facilities are located next to its bauxite mines, cutting transportation costs and allowing consistent feed and quality. Aluminum assets benefit from prior optimization and smelters co-located with cast houses to provide value-added products, including slab, billet and alloys. Modest Debt Levels: At Dec. 31, 2019, total debt of $1.8 billion was 1.5x operating EBITDA after dividends from associates and distributions to minority interests. Fitch expects average annual operating EBITDA of at least $900 million in 2020 and total debt-to-EBITDA to remain under 2.5x over the rating horizon assuming average London Metal Exchange aluminum prices at $1,560/tonne (t) in 2020 and $1,600/t in 2021. FFO-leverage is expected to be high for the rating in 2020 given that 2020 tax will be paid on the 2019's earnings but remain under 3.0x, in 2021 and thereafter. Sensitivity to Aluminum Prices: While bauxite and alumina are priced relative to the market fundamentals in those markets and those activities account for the bulk of Alcoa's earnings, over the long run, these product prices are sensitive to aluminum prices. The company estimates that a $100/t change in the LME price of aluminum affects EBITDA by $219 million. Alcoa has some value-added, energy and conversion income, and some power costs are LME-linked but the company will remain exposed to the fortunes of the aluminum market. Aluminum Prices Pressured: Fitch cut its aluminum price assumptions three times since March 26, 2019, most recently on April 6, 2020, first on weakening auto demand and rising production in China and more recently to account for the recessionary impacts of the coronavirus and efforts to restrict its spread. Aerospace, auto and eventually construction demand are expected to be significantly down. Fitch's price assumptions for London Metal Exchange spot prices are $1,560/t for 2020, $1,600/t for 2020 and $1,800/t for 2021 and $1,900/t longer term. Supply rationalization improved the average LME aluminum cash price from about $1,660/t in 2015 and $1,620/t in 2016 to about $1,969/t in 2017. The LME aluminum price averaged about $2,110/t in 2018 on dislocation from sanctions on RUSAL, and $1,791/t in 2019 as trade tensions bit into demand growth while supply rebounded. Current spot price is below $1,500/t compared with the average in 1Q 2020 of $1,690/t. The company reported that 20% of China's production was cash negative exceeding $100/t and a further 40% was cash negative up to $100/t at prevailing prices. Fitch notes that the company's capital structure was set in a $1,600/t aluminum price environment and the sole debt issue since, $500 million in 2018, was used to fund contributions to pension plans which provide flexibility in making required contributions going forward. AWAC Considerations: The company's alumina and bauxite operations are owned through Alcoa World Alumina and Chemicals, an unincorporated joint venture 60% owned by Alcoa and 40% owned by Alumina Ltd. In 2019, AWAC generated $1.6 billion in adjusted EBITDA and paid $1.0 billion in dividends, net of capital contributions. AWAC's dividend policy is generally to distribute at least 50% of the prior calendar quarter's net income of each AWAC company and certain companies will also be required to distribute excess cash. Alcoa consolidates AWAC's results and Fitch expects minority distributions net of contributions to range from about $100 million to $150 million per year under its price assumptions. AWAC currently has scant debt, and incurrence would fall under the subsidiary debt basket in the Alcoa's revolver, equal to the greater of $150 million and 1% of Alcoa's consolidated tangible assets thereby limiting the risk of structural subordination. Pension Underfunding: At Dec. 31, 2019, minimum required pension funding through 2024 was estimated at $1.2 billion and the funded status of direct benefit plans was a $1.5 billion shortfall. The discretionary contributions made in 2018 result in flexibility regarding future mandatory minimum payments. In addition, the company reported that the coronavirus stimulus legislation allows 2020 pension funding of about $220 million to be deferred to Jan. 1, 2021. Fitch expects Alcoa to manage its contributions through cash generation and cash on hand, making voluntary contributions consistent with its capital allocation policies when generating excess cash flow and using flexibility to defer to shore up liquidity when cash balances are expected to be below $1 billion. Alcoa intends to freeze the defined pension plans for U.S. and Canadian salaried employees and eliminate retiree medical subsidies, effective Jan. 1, 2021. DERIVATION SUMMARY Alcoa's low debt levels position it well against 'BB+' metals peers. While pension obligations are high and required contributions are expected to be manageable, the company is taking further action to reduce obligations, which is expected to be FCF neutral to positive on average. Fitch expects EBITDA margins to average around 11% based on its price assumptions over the next 24 months. Comparable Fitch-rated peers include United Company RUSAL Plc ('BB-'/Negative), China Hongqiao Group Limited ('BB-'/Stable), and Aluminum Corporation of China Ltd. (Chalco; 'A-'/Stable). Rusal benefits from substantial size (it is the largest aluminum company outside of China) and its stake in PJSC MMC Norilsk Nickel. Fitch expected EBITDA margins to range between 10% and 12% prior to the pandemic. Prior to the pandemic, Fitch expected FFO-adjusted leverage to decline from 4.7x at YE 2019 to 3.5x and below in 2021. Rusal's rating also captures the higher-than-average systemic risks associated with the Russian business and jurisdictional environment. Hongqiao benefits from greater size, higher vertical integration and EBITDA margins above 20%. Before the pandemic, Fitch expected Hongqiao to continue to report positive FCF in the near term and FFO net leverage to remain at 2.4x-2.7x. The company's ratings are constrained by weak internal controls and uncertainties regarding the policy implications of unpaid power tariffs and potential surcharges on power costs, which could significantly increase production costs. Chalco is rated on a top-down approach based on the credit profile of parent Chinalco, which owns 33% of the company. Fitch's internal assessment of Chinalco's credit profile is based on its Government-Related Entities Rating Criteria and is derived from China's ('A+'/Stable) rating, reflecting its strategic importance. Chalco's stand-alone credit profile stands at 'B+', due to high financial leverage and EBITDA margins in the 8%-9% range. KEY ASSUMPTIONS Fitch's Key Assumptions Within Fitch's Rating Case for the Issuer Include: - Fitch commodity price assumptions for aluminum (LME spot) of $1,560/t in 2020, $1,600/t in 2021 and $1,800/t in 2022; - Estimated shipments at guidance; - Capex at guidance; - Pension contributions deferred while cash on the balance sheet is less than $1 billion and capacity exists; - No change in capital allocation framework. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDAR margins expected to be sustained above 15%; - FFO leverage expected to be sustained below 2.5x; - Meaningful and sustainable reduction in unfunded pension status Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDAR margins sustained below 10%; - FFO leverage expected to be sustained above 3.0x; - Total debt/EBITDA expected to be sustained above 2.5x; - LME aluminum prices expected to be sustained below $1,600/t. BEST/WORST CASE RATING SCENARIO International scale credit 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: Cash on hand was $829 million at March 31, 2020. In addition, the company has an undrawn, $1.5 billion senior secured revolver due to mature on Nov. 21, 2023. The company amended the revolver on April 21, 2020 to increase the maximum leverage ratio (substantially total debt/EBITDA) from April 1, 2020 to April 1, 2021 to 3.0x from 2.5x. Fitch expects the company to have an FCF drain of less than $150 million in 2020 but generate FCF thereafter before voluntary pension contributions. Scheduled maturities are modest through 2023. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. 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 Alcoa Corporation: 4; Labor Relations & Practices: 4 ALORICA INC: Moody's Cuts CFR to Caa3 & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service downgraded its ratings for Alorica Inc., including the company's Corporate Family Rating to Caa3 from Caa2, Probability of Default Rating to Caa3-PD from Caa2-PD, and the first lien senior secured credit facility rating, including revolving credit facility, term loan A and term loan B to Caa3 from Caa2. The outlook was changed to negative from rating under review. This action concludes the review for downgrade initiated on February 12, 2020. The downgrade to Caa3 CFR and negative outlook reflects the heightened risk that Alorica may not be able to address its upcoming debt maturities in a timely manner and on commercially viable terms. The company faces an increased default risk, which is compounded by the company's highly leveraged capital structure, weak operating trends and capital markets disruption caused by COVID-19 pandemic. Moody's recognizes that Alorica has secured short-term financing with the current lenders to provide the company with additional liquidity to operate in the challenging environment in 2020. The company also obtained financial covenant waivers for its existing term loans through September 30, 2020 and successfully agreed to another extension (through July 10, 2020) for the upcoming $100 million principal payment under the term loans. However, the company's capital structure remains unsustainable, refinancing risk is high and it faces turbulent times as it steers through the COVID-19 pandemic. 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 call-center industry has been one of the sectors significantly affected due to a disruption of supply chain for its customers, temporary closure of facilities and shift to remote work capabilities. More specifically, the weaknesses in Alorica's credit profile, including the refinancing risk, elevated leverage and cash flow challenges 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 reflects the impact on Alorica of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Downgrades: Issuer: Alorica Inc. Corporate Family Rating, Downgraded to Caa3 from Caa2 Probability of Default Rating, Downgraded to Caa3-PD from Caa2-PD Senior Secured Bank Credit Facility, Downgraded to Caa3 (LGD4) from Caa2 (LGD3) Outlook Actions: Issuer: Alorica Inc. Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE Alorica's Caa3 CFR reflects the company's fast-approaching debt maturities, elevated risk of a potential default and operating headwinds. The company continues to secure various amendments for credit extensions, covenant waivers and has remained current on its principal and interest debt payments. Due to the ongoing COVID-19 pandemic, Alorica has not been operating at optimum levels of capacity, especially in the Philippines market. The company continues to increase focus on moving its agents to work at home while managing on-site delivery. However, in certain global regions the limitation of internet access and IT security, as well as various restrictions posed by governments creates significant challenges. As result, Moody's projects Alorica's debt-to-EBITDA (Moody's adjusted) to remain elevated, at above 7.0x over the next 12-15 months and the company to generate largely negative free cash flow. Alorica operates in a highly competitive business process outsourcing industry with low barriers to entry, relatively weak operating margins compared to technology peers in many other service sectors and has some customer concentration risk (top 10 clients comprise over 50% of revenues). Conversely, the credit profile benefits from Alorica's position as a top three global customer care BPO services outsourcing provider based on revenue, diversified customer base by end-market verticals, fairly predictable revenues from long term contracts, and favorable demand prospects in the customer care services industry due to the ongoing increase in outsourcing. The negative outlook reflects Moody's expectation of weakened credit metrics and liquidity, compounded by the uncertainty of the time and trajectory of the recovery. A debt restructuring or an event of default is very likely if the company does not proactively address its capital structure needs or shore-up its near-term liquidity. Moody's expects Alorica's liquidity to remain weak over the next 12 months, given the heightened refinancing risk and expectation for negative free cash flow. On April 21, 2020, Alorica's existing lenders agreed to provide a new $85 million priming delayed draw term loan due October 2020 (not rated by Moody's), allowing the company up to six monthly draw-downs post-closing. The company must meet certain thresholds in order to continue to borrow under the priming delayed draw term loan. In addition, the lenders who agreed to provide additional liquidity will be able to roll-over their existing exposure from term loan A and term loan B into a new $83 million priming roll-up term loan facility, due October 2020 (not rated by Moody's). Both new term loans can be extended through June 30, 2021, upon consent of the required lenders and satisfaction of certain conditions. At close, Moody's expects Alorica to use $25 million of proceeds from the priming delayed draw term loan to reduce borrowings under the existing revolving credit facility, which has been downsized from $187.6 million to $158.2 million. Moody's estimates that the company will have $68 million of availability under the revolving credit facility and an additional $58.4 million capacity under the delayed draw term loan as of April 22, 2020 (if it meets the borrowing conditions). Alorica will rely heavily on the revolving credit facility and the delayed draw term loan for liquidity needs through the end of 2020. The Caa3 rating on Alorica's first lien credit facility (revolver, term loan A and term loan B) is in line with the CFR since it represents a significant portion of debt in Alorica's capital structure. The existing credit facility will rank junior in right of payment to the new super-priority priming term loans. The existing first lien credit facility is supported by a first priority security interest in substantially all the tangible and intangible assets of the borrowers and guarantors. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if continued deterioration in liquidity, including sustained negative free cash flow and inability to secure additional extension for the upcoming $100 million term loan payment. The ratings could also be downgraded if the company is unable to address its debt maturities on commercially viable terms or executes a distressed exchange. Moody's would consider an upgrade if the company puts in place a more tenable capital structure, demonstrates sustained organic growth in revenue and earnings, sustainably decreases in debt-to-EBITDA (Moody's adjusted), improves free cash flow meaningfully and maintains at least adequate liquidity. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Alorica, Inc., headquartered in Irvine, CA, is the third largest US based customer BPO services provider with estimated revenue of approximately $1.9 billion at December 31, 2019. The company offers customer service, technical support, customer acquisition and retention back office support services. The company has approximately 100,000 employees in 105 locations across 14 countries globally, serving many Fortune 500 companies. Alorica is majority owned by the founder and CEO, Andy Lee, with a minority stake held by several funds affiliated with JP Morgan. AMERICAN STEEL: Closing for Good; Unsecureds Get 0% --------------------------------------------------- Debtor American Steel Processing Company filed on April 1, 2020, Second Amended Disclosure Statement describing a Plan that says unsecured creditors will have a 0 percent recovery. The Debtor's Plan provides for a total liquidation and closing of the company. The Plan provides for the sale of certain designated assets to US Ironworks Company. Over the course of this bankruptcy, the Debtors contributed substantially more to creditors than they would have received in a standard liquidation. Unfortunately, due to no fault of the Debtor, they must now face liquidation. During the case, the Debtor experienced unexpected issues with Covanta which was the Debtor's main source of income. Covanta's business interruption due to equipment repairs, market price fluctuations and depreciation and repairs to its own equipment caused defaults. The final unexpected blow to the Debtor was a sudden termination of Covanta's business relationship with the Debtor which resulted in the Debtor being forced to liquidate under the Plan. Unsecured creditors in Class 26 will receive a distribution of 0.00% of their allowed claims. The Debtor is being liquidated and there will be no assets nor revenues with which to pay nor to continue to litigate with unsecured creditors and their claims shall remain outstanding. The Debtor intends to liquidate the equipment and collateral by conveying same to US Iron as the Debtor has discontinued to operate and is otherwise unable to generate the funds necessary to fund a Plan of reorganization. A full-text copy of the Second Amended Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/y8m3v5ow from PacerMonitor.com at no charge. Attorney for the Debtor: Charles M. Wynn, Esq. CHARLES M. WYNN LAW OFFICES, PA P.O. Box 146 Marianna, FL 32447 Tel: 850-526-3520 E-mail: court@wynnlaw-fl.com About American Steel Processing Company American Steel Processing Company is a steel fabricator in Panama City, Florida, founded in July 1998. American Steel Processing filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 18-50060) on Feb. 26, 2018. In the petition signed by Thomas J. Fanell, president and CEO, the Debtor was estimated to have assets and liabilities at $1 million to $10 million. The case is assigned to Judge Karen K. Specie. The Charles Wynn Law Offices, P.A., is the Debtor's counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. APELLIS PHARMACEUTICALS: Reports 1st Quarter Net Loss of $168.8M ---------------------------------------------------------------- Apellis Pharmaceuticals, Inc., reported a net loss of $168.82 million for the three months ended March 31, 2020, compared to a net loss of $50.57 million for the three months ended March 31, 2019. As of March 31, 2020, the Company had $688.94 million in total assets, $429.94 million in total liabilities, and $258.99 million in total stockholders' equity. As of April 29, 2020, the date of issuance of these unaudited condensed consolidated financial statements, the Company believes that its cash and cash equivalents of $417.9 million and marketable securities of $228.8 million as of March 31, 2020 will be sufficient to fund its operations and capital expenditure requirements for at least the next twelve months from the date of issuance of the unaudited interim consolidated financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations. A full-text copy of the Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/7E17g9 About Apellis Headquartered in Crestwood, Kentucky, Apellis Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds for the treatment of a broad range of life-threatening or debilitating autoimmune diseases based upon complement immunotherapy through the inhibition of the complement system at the level of C3. By pioneering targeted C3 therapies, the Company aims to develop best-in-class and first-in-class therapies for a broad range of debilitating diseases that are driven by uncontrolled or excessive activation of the complement cascade, including those within hematology, ophthalmology, and nephrology. Apellis incurred net losses of $304.71 million in 2019, $127.50 million in 2018, and $51 million in 2017. As of Dec. 31, 2019, the Company had $389.24 million in total assets, $355.01 million in total liabilities, and $34.23 million in total stockholders' equity. APEX ENERGY: Unsecured Creditors to Get 15% Under Plan ------------------------------------------------------ Apex Energy, LLC, has proposed a reorganization plan that provides that payments and distributions under the Plan will be funded from the net profits received from the production and sale of crude oil. General unsecured creditors classified in Classes 4 and 5, and will receive a distribution of 15% of their allowed claims, to be distributed as follows: Class 4, general unsecured claims of $2,500 or more will receive distributions totaling 15% of the allowed claims with interest at the Federal Judgment Rate generally paid each month for which the posted West Texas Intermediate price is more than $50.00 per barrel, defined in the Plan as the "Minimum Price Achievement"; the Class 5 general unsecured creditors hold claims less than $2,500 and are paid 15% of the allowed claims on the Effective Date of the Plan. Class 2 Secured claim of Margaret Sannes is impaired with a total claim of $780,145. Payments will begin on the Confirmation Date and will end when $300,000, with interest at the Federal Judgment Rate on the Confirmation Date, is paid. The interest rate 4.5%. The Class 2 creditor shall be paid 10% of the Net Profits Income received by the Debtor as provided by the pre-bankruptcy Assignment of Net Profits Interest. Class 3 Secured claims of Name Interface Treating Solutions, LLC and Nortana Grain Co are impaired with a total claim of $65,145 and bearing an interest rate of 10%. The secured claims of Interface Treating Solutions, LLC and Nortana Grain Co. will be paid through 24 pro rata monthly distributions of 10% of the Net Profits Income commencing the first day of the second month following the date the Minimum Price Achievement occurs and continuing each month thereafter as long as the Minimum Price Achievement continues to be met. Class 4 General unsecured non-priority claims of $2,500 or more are impaired. The Class 4 Non-Priority Class Creditors will each receive a distribution of 8% of its allowed claim through monthly payments, without interest, commencing on the first day of the second month following the date the Minimum Price Achievement occurs, and continuing each month thereafter for which the Minimum Price Achievement is realized through payments of 10% of the Net Profits Income received by the Debtor during such month. Class 5 [1122(b) Convenience Class] -– non-priority claims of less than $2500 -- are impaired. The Class 5 Non-Priority Convenience Class Creditors will each receive a distribution of 15% of its allowed claim, through a single payment on the Effective Date. A full-text copy of the Disclosure Statement dated April 13, 2020, is available at https://tinyurl.com/yckfwnj4 from PacerMonitor.com at no charge. About Apex Energy The Apex Energy, LLC is a Montana limited liability company, organized in 2017 when it purchased oil producing properties from Ronald and Margaret Sannes. Since February 23, 2017, it has been in the business of producing and selling crude oil from properties in Richland and Dawson Counties, Montana. In July,2019, Regency Energy Services, the work-over company engaged by the Debtor, and which claimed a debt of approximately $350,000, filed an involuntary bankruptcy against the Debtor. In September, 2019, the Debtor consented to the relief sought by Regency and converted the case to one under chapter 11 The Chapter 11 case is In re Apex Energy, LLC (Bankr. D. Mont. Case No. 19-60676). The Debtor is represented by counsel, JA Patten. APPLE LAND: Unsecureds to Get Remaining Proceeds in Assets Sales ---------------------------------------------------------------- Debtor Apple Land Sports Supply, Inc., filed an Amended Disclosure Statement for its Liquidation Plan. Apple Land provides a Liquidation Plan as a means for a prompt distribution of feasible payments to creditors and a resolution of claims filed and pending against Apple Land. The Debtor's primary assets were sold through online sales with the rest to be sold at auction and the Debtor is no longer operating its business. The proposed Liquidation Plan will disburse the funds from the auction, as well as funds received from other residual sources, and the Plan will govern the treatment and rights of creditors and other interest holders with their respect to their claims or equity interests in the debtor's estate. The Debtor's proposed Liquidation Plan calls for the liquidation of all remaining assets and the distribution of proceeds to holders of allowed claims in the order of priority mandated by the Bankruptcy Code. The Plan provides for the payment of all allowed administrative expense claims in full, in cash, within thirty days of confirmation. The Plan provides for the disbursement of funds in cash to resolve certain disputed secured claims in full and complete settlement of those claims. The Plan provides that each holder of an allowed general unsecured claim will receive a pro rata share of the remaining proceeds after payment of administrative expenses and previously approved secured claim payments. As the Plan provides for the liquidation or sale of all property rights of the debtor and the distribution of the resulting proceess to creditors in accordance with the provisions of the Plan, after the effective date of the Plan the debtor will be dissolved by the Plan Administrator without further corporate action but subject to appropriate governmental filings. The Plan anticipates all property remains property of the estate subsequent to disbursements under the Plan. Class 3 consists of all allowed general unsecured claims against the debtor. Each holder of an allowed general unsecured claim will receive its pro rata share of the remaining proceeds of liquidation of the debtor's assets, claims, and interests. This pro rata distribution will take occur after liquidation of all remaining assets. A full-text copy of the Amended Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/y9qxecgg from PacerMonitor at no charge. The Debtor is represented by: PITTMAN & PITTMAN LAW OFFICES, LLC Greg P. Pittman 712 Main Street La Crosse, WI 54601 Tel: (608) 784-0841 About Apple Land Sports Supply Apple Land Sports Supply Inc., a wholesaler of sporting goods, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 19-12609) on Aug. 1, 2019. At the time of the filing, Apple Land Sports Supply disclosed assets of between $1 million and $10 million and liabilities of the same range. The case has been assigned to Judge Catherine J. Furay. Apple Land Sports Supply is represented by Pittman & Pittman Law Offices, LLC. APPLOVIN CORP: S&P Affirms 'B+' ICR; Outlook Stable --------------------------------------------------- S&P Global Ratings affirmed the 'B+' issuer credit rating on AppLovin Corp. and its 'B+' issue-level rating on the company's upsized first-lien credit facility. AppLovin, a developer of mobile games and provider of performance-based targeted marketing for mobile app developers, is raising $250 million incremental first-lien debt, most of which will be used to fund acquisitions of mobile gaming studios. The company is planning to acquire two gaming studios: Redemption Games and another studio -- code named "Project Billions". "We believe management's increasing risk tolerance for debt to support its acquisition strategy will limit deleveraging. Given Applovin's increasing acquisition spending exceeding its current annual free cash flow generation, we believe the company may continue relying on the debt markets to fund its larger acquisitions, thus limiting long-term improvement of credit metrics. Pro forma S&P Global Ratings-adjusted leverage for its initial 2018 debt deal, its April 2019 add-on debt deal, and the current deal have resulted in leverage remaining the high-4x to low-5x area. While market conditions might slow merger and acquisition (M&A) activity, the company spent about $400 million on acquisitions in 2019 and invested slightly more than half of that amount through the first four months of 2020. Most of the funding for these acquisitions has come from the debt capital markets as AppLovin's annual free cash flow is about $200 million. As the industry continues to grow, we believe there is a risk that value for gaming studios increases, which could translate to more leveraging transactions for AppLovin in the future," S&P said. The stable outlook reflects S&P's view that AppLovin will continue growing its revenue and earnings over the next 12 months as it expands its mobile gaming business and its customer base while maintaining leverage below 5x. S&P also expects user acquisition costs to remain manageable and that the company will have steady EBITDA margins in the high-20% range going forward. "We could lower our rating on AppLovin over the next 12 months if it experiences competitive or market pressures such that leverage exceeds 5x on a sustained basis. We could also downgrade the company if a large debt-funded acquisition or dividend raises its leverage above the same level. In addition, sharp revenue and earnings declines that indicate a weaker business position could lead us to lower our rating," S&P said. "We could raise our rating if leverage remains under 3.5x. Over the longer term, we would also consider raising our rating with a demonstrated track record of consistent organic revenue growth while maintaining leverage below 4x, even when accounting for acquisitions and shareholder returns," the rating agency said. AQUABOUNTY TECHNOLOGIES: Stockholders Elect Eight Directors ----------------------------------------------------------- AquaBounty Technologies, Inc., held its annual meeting of stockholders on April 28, 2020, at which the stockholders: (i) elected each of Richard J. Clothier, Alana D. Czypinski, Theodore J. Fisher, Richard L. Huber, Christine St.Clare, Rick Sterling, James C. Turk, Jr., and Sylvia Wulf as a director for a one-year term; (ii) ratified the appointment of Wolf & Company, P.C. as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2020; and (iii) approved the 2016 Plan, as amended by the Plan Amendment, to increase the number of authorized shares of the Company' Common Stock, $0.001 Par Value Per Share, issuable under the 2016 Equity Incentive Plan from 900,000 to 1,900,000. On March 3, 2020, the Board of Directors of the Company unanimously approved an amendment to the Company's 2016 Equity Incentive Plan, as previously amended, to increase the number of shares of common stock authorized for issuance under the 2016 Plan from 900,000 shares to 1,900,000 shares. No other changes were made by the Plan Amendment, and the Plan Amendment does not modify the number of shares held by, or the rights of, existing stockholders or participants in the 2016 Plan. About AcquaBounty Headquartered in Maynard, Massachusetts, AquaBounty Technologies, Inc., is a publicly traded aquaculture company focused on improving productivity and sustainability in commercial aquaculture. The Company's objective is the application of biotechnology to ensure the availability of seafood to meet global consumer demand-addressing critical production constraints in the most popular farmed species, including salmon, trout, and tilapia. AquaBounty recorded a net loss of $13.23 million for the year ended Dec. 31, 2019, compared to a net loss of $10.38 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $30.23 million in total assets, $6.47 million in total liabilities, and $23.76 million in total stockholders' equity. The Company has incurred losses from operations since its inception in 1991, and, as of Dec. 31, 2019, the Company had an accumulated deficit of $132 million. ARAL RESTAURANT: Access to Cash Collateral Continued Until May 26 ----------------------------------------------------------------- Judge Frank Bailey of the U.S. Bankruptcy Court for the District of Massachusetts authorized Aral Restaurant Group of Fall River, Inc. and its affiliates to use the cash collateral of Northern Bank and Trust Company through May 26, pursuant to the terms and conditions set forth in the Fifth Interim Order. A further hearing on the Cash Collateral Motion will be conducted on May 26, 2020 at 11:15 a.m. Objections must be filed no later than 4:30 p.m. on May 19. The Debtors may use Northern Bank & Trust Company's cash collateral solely to pay its ordinary and necessary expenses set forth on the Budget. The actual disbursements of the Debtors must not exceed by more than 10% of the disbursements set forth in the budget, whether by line item, category, or in the aggregate. Northern Bank is granted replacement liens on the same types of post-petition property of the estates against which the Bank held liens as of the Petition Date. The Replacement Liens will maintain the same priority, validity and enforceability as Northern Bank's prepetition liens. The Replacement Liens should only be recognized to the extent of the diminution in value of the Bank's prepetition collateral after the Petition Date resulting from the Debtors' use of the cash collateral. The Debtors will maintain all necessary insurance, including, without limitation, fire, hazard, comprehensive, public liability, and workmen's compensation, and obtain such additional insurance in an amount as appropriate for the business in which the Debtors are engaged, naming Northern Bank as loss payee, additional insured and mortgagee with respect thereto. The Debtors are required to pay any and all taxes, municipal charges, or other amounts accruing upon or with respect to the collateral from and after the Petition Date is such amounts, if unpaid, would have priority over Northern Bank's security interest in the collateral under applicable law. The Junior Lenders are also granted replacement liens on the same types of post-petition property of the estates against which the Junior Lenders held liens as of the Petition Date. The Replacement Liens will maintain the same priority, validity and enforceability as the Junior Lenders' prepetition liens. The Junior Replacement Liens should only be recognized to the extent of the diminution in value of the Junior Lenders' prepetition collateral after the Petition Date resulting from the Debtors' use of the cash collateral. A copy of the Fifth Interim Order is available for free at https://is.gd/ZPwYVa from Pacermonitor.com About Aral Restaurant Group Aral Restaurant Group operates franchise of Friendly's Franchising, LLC, at different locations in Massachusetts -- in Fall River, Hyannis, Pembroke, Plymouth, and South Weymouth. On Sept. 26, 2019, each of these branches sought Chapter 11 protection in Boston, Massachusetts, with Aral Restaurant Group of Fall River, Inc. (Bankr. D. Mass. Case No. 13256) as the lead case. In the petition signed by Robert Arruda, president, Aral Restaurant Group of Fall River was estimated to have assets of not more than $50,000 and liabilities between $1 million and $10 million. Judge Frank J. Bailey oversees the Debtors' cases. NICHOLSON P.C. is the Debtors' counsel. ARCHDIOCESE OF NEW ORLEANS: Case Summary & 20 Unsecured Creditors ----------------------------------------------------------------- Debtor: The Roman Catholic Church for the Archdiocese of New Orleans 7887 Walmsley Ave. New Orleans, LA 70125 Business Description: The Roman Catholic Church of the Archdiocese of New Orleans -- https://www.nolacatholic.org -- is a non- profit religious corporation incorporated under the laws of the State of Louisiana. Created as a diocese in 1793, and established as an archdiocese in 1850, the Archdiocese of New Orleans has educated hundreds of thousands in its schools, provided religious services to its churches and provided charitable assistance to individuals in need, including those affected by hurricanes, floods, natural disasters, war, civil unrest, plagues, epidemics, and illness. Currently, the Archdiocese's geographic footprint occupies over 4,200 square miles in southeast Louisiana and includes eight civil parishes - ̶ Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, St. Tammany, and Washington. Chapter 11 Petition Date: May 1, 2020 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 20-10846 Judge: Hon. Meredith S. Grabill Debtor's Counsel: Mark A. Mintz, Esq. R. Patrick Vance, Esq. Elizabeth J. Futrell, Esq. Laura F. Ashley, Esq. JONES WALKER LLP 201 St. Charles Avenue, Suite 5100 New Orleans, LA 70170 Tel: 504-582-8368 Fax: (504) 589-8260 E-mail: mmintz@joneswalker.com pvance@joneswalker.com efutrell@joneswalker.com lashley@joneswalker.com Debtor's Notice, Claims & Solicitation Agent: DONLIN, RECANO & COMPANY, INC. https://www.donlinrecano.com/Clients/rcano/Index Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petition was signed by Most Reverend Gregory M. Aymond, DD, Archbishop of New Orleans and Very Reverend Patrick R. Carr, vicar of finance. A full-text copy of the petition is available for free at PacerMonitor.com at: https://is.gd/i1cbTb List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Hancock Whitney Bank Bonds-2017 $38,590,000 Indenture Trustee Louisiana Public 5328 Government St Facilities Authority Baton Rouge LA 70806 Stephen Edwards Tel: 225-248-7464 Email: stephen.edwards@hancockwhitney.com 2. Gallagher Benefit Services Inc Tpa Services $417,662 2850 West Golf Rd 5th Floor Rolling Meadows IL 60008 3. Children's Hospital Employee $234,517 200 Henry Clay Avenue Health Claims New Orleans LA 70118 4. Optumrx For Rx Claims Employee $179,243 2300 Main Street Health Claims Irvine CA 9261 5. Name and Address Insurance Claim $130,000 Intentionally Omitted 6. Ochsner Health System Employee $117,922 1514 Jefferson Highway Health Claims New Orleans LA 7012 Stephanie Wells Email: swells@ochsner.org 7. Advanced Reconstructive Care Employee $64,095 3900 Veterans Memorial Blvd. Health Claims Suite 200 Metairie LA 70002 8. Meitler Consultants, Inc. Consulting $60,300 39 Beechwood Road Services Summit NJ 07901 9. Amerigroup LA Employee $33,794 5353 Essen Lane Health Claims Baton Rouge LA 70809 10. LUBA Casualty Insurance Claim $30,000 Insurance Company 2351 Energy Drive Suite 2000 Baton Rouge LA 70808 11. White Oak Consulting Consulting $27,012 88 Melrose Drive Services Destrehan LA 70047-2008 12. East Jefferson Employee $25,574 General Hospital Health Claims 4200 Houma Blvd Metairie LA 70006 13. Badia Moro Hewett Professional $24,000 Architects LLC Services 2014 Jena Street New Orleans LA 70115 14. Vintage Rock Club Professional $22,208 1007 Poydras Street Services New Orleans LA 70112 15. Corass Electrical Service Trade Debts $19,646 1411 27th Street Kenner LA 70062 16. Touro Infirmary Hospital Employee $18,350 1401 Foucher Street Health Claims New Orleans LA 70115 17. St Tammany Parish Hospital Employee $18,211 1202 S Tyler St Health Claims Covington LA 70433 18. West Jefferson Medical Center Employee $18,123 1101 Medical Center Blvd Health Claims Marrero LA 70072 19. Denechaud & Denechaud Professional $17,969 1010 Common Street Services Suite 3010 New Orleans LA 70112 Todd Gennardo Tel: 504-522-4756 Email: tgennardo@denechaudlaw.com 20. Entergy Trade Debts $15,337 639 Loyola Ave Ste 300 New Orleans LA 70113 ARCONIC CORP: Moody's Cuts CFR to Ba3 & Rates Sr. Sec. Notes Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Arconic Corporation's 1st lien senior secured notes and downgraded the Corporate Family Rating to Ba3 from Ba2 and the Probability of Default Rating to Ba3-PD from Ba2-PD. The Ba3 2nd lien senior secured notes rating was affirmed. The SGL-1 speculative liquidity grade rating is unchanged. The outlook was changed to stable from negative. Proceeds from the 1st lien senior secured notes will be used to repay the $600 million secured term loan B under the secured revolving credit facility and for general corporate purposes. The $1 billion secured revolving credit portion of the facility will be replaced by a $750 million asset-backed lending facility. The ratings on the secured credit facility will be withdrawn upon closing of the new financings. "The downgrade to the Ba3 CFR reflects the challenging conditions facing Arconic's end markets, particularly ground transportation and aerospace but industrial and construction as well given the significant deterioration in global economic conditions and reduced manufacturing activity as a result of the coronavirus. Arconic's diversity of end markets served, global footprint, liquidity position and absence of near term debt maturities however provide support to the Ba3 CFR." said Carol Cowan Moody's Senior Vice President and lead analyst for Arconic. Arconic Corporation is the spin off from its parent, Arconic Inc (effective April 1, 2020) of the Global Rolled Products, Extrusions, Building and Construction businesses. At the time of separation, Arconic Corporation paid a $700 million distribution to Arconic Inc. Upon completion of the spin Arconic Inc. was renamed Howmet Aerospace Inc. Downgrades: Issuer: Arconic Corporation Corporate Family Rating, Downgraded to Ba3 from Ba2 Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Affirmations: Issuer: Arconic Corporation Senior Secured Regular Bond/Debenture, Affirmed Ba3 (LGD3 from LGD4) Assignments: Issuer: Arconic Corporation Senior Secured Regular Bond/Debenture, Assigned Ba1 (LGD2) Outlook Actions: Issuer: Arconic Corporation Outlook, Changed To Stable From 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 aluminum sector is a sector that will be affected by the shock given the sensitivity of its customers to market demand, such as automotive, aerospace, construction, general manufacturing and market sentiment as to global economic contraction expectations. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The Ba3 CFR considers Arconic's strong and leading position in the mid-stream aluminum industry with a broad operating footprint and diversified end market exposure that provides market and geographic diversity. Arconic will be a midstream aluminum producer providing aluminum sheet, plate and other products to a diversity of end markets. The company operates through 3 operating segments: Global Rolled Products, Building and Construction Systems and Extrusions and serves 5 principal market segments. The key end markets accounted for revenues in 2019 as follows: Ground Transportation (35%), Aerospace (18%), Building and Construction (18%), Industrial (16%) and Packaging (12%), all as of year-end December 31, 2019. Of the revenue dispersion, GRP (Global Rolled Products) is by far the largest contributor at roughly 77% and the largest generator of EBITDA. Revenues in 2019 were $7.3 billion. Preliminary information indicates first quarter 2020 revenue of $1.6 billion, roughly 12 below the comparable 2019 period on impacts from the coronavirus and the 737 Max somewhat mitigated by better performance in the industrial segment. Improved cost position and lower aluminum prices are indicated to have contributed to an advance in operating income to approximately $170 million. Productivity and efficiency improvements together with enhance scrap material sourcing are expected to continue to favorably benefit performance. Despite the acceptable operating performance in the quarter ended March 31, 2020, performance in the second quarter is expected to fall sharply on curtailments of automotive production, which commenced in late March and reduction in aircraft build rates. In the company's packaging operations outside of North America where it does not currently participate, performance has held better. From a forward looking perspective, the automotive sector, a more material revenue driver, is expected to evidence a slowly improving performance earlier than any improvement expected in aerospace build rates; nonetheless, improvement is expected to be slow and protracted. Assuming a 30% - 40% decline in EBITDA ($785 million in 2019 including Moody's standard adjustments) in 2020 leverage is expected to range between 4.5x and 5.5x with breakeven to moderately negative free cash flow. However, Arconic's good liquidity position together with actions taken to cut costs, such as reduction in capital expenditures and postponement of the initiation of a dividend payment and improvement in variable cost position provide a degree of tolerance to leverage being outside levels appropriate for a Ba3 CFR. While the CFR reflects Arconic's good position in markets served and global footprint, the quantitative metrics are countered by several factors. These would include potential liabilities related to the Grenfell Tower litigation and related class action suits, although this has a long tail and is not quantifiable at this time, environmental remediation expenditure requirements that have passed to Arconic, and the fact that the new company does not have an established track record as to financial discipline, execution on strategic objectives or ability to achieve margin and earnings improvements anticipated prior to the coronavirus. The SGL-1 Speculative Grade Liquidity rating considers Arconic's anticipated $750 million ABL, expected potential for moderate negative free cash flow generation in 2020 and the absence of any debt maturities over the next several years. The stable outlook reflects the view that Arconic will maintain a good liquidity profile, and that gradual improvement in earnings performance will unfold over the next twelve to eighteen months, despite the weakness anticipated for the next several quarters given the uncertainty surrounding the duration of curtailments in automotive production and aircraft built rates slowing as a result of the deterioration in global economic growth expectations due to the impact of the coronavirus. However, the company is viewed as conservatively capitalized, and this together with its solid liquidity position allows for some cushion in weakening in performance and metrics in 2020. The Ba1 rating on the first lien senior secured notes reflects their superior position in the capital structure. The Ba3 rating on the senior secured 2nd lien bonds, at the same level as the CFR reflects their weaker position in the capital structure with limited loss absorption underneath their position, and mostly coming from the unfunded pension levels and remainder payables, although the level of secured debt in the capital structure supports the rating at the CFR level. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would consider an upgrade of Arconic's credit ratings if leverage (adjusted debt/EBITDA) improves to below 3.5x, interest coverage (adjusted EBIT/Interest) increases to above 3x and an adjusted EBIT margin to above 7% on a sustained basis. Expectations of sustainable positive Moody-s adjusted free cash generation is also a prerequisite the ratings upgrade. Arconic's ratings could be downgraded if liquidity, measured as cash plus revolver availability, evidences a material deterioration. Expectations of significantly prolonged production rate cuts by the company's customers or an extended slump in the automotive and aerospace markets could lead to negative pressure on the ratings. Quantitatively, ratings could be downgraded if the adjusted EBIT margin is expected to be sustained below 5% or (Cash flow from operations less dividends)/debt is sustained below 20%. The principal methodology used in these ratings was Steel Industry published in September 2017. Headquartered in Pittsburgh, PA, Arconic is a downstream aluminum producer active in a number of diverse end markets. Revenues in 2019 were $7.3 billion. ARCONIC CORP: S&P Rates $1BB Revolving Credit Facility 'BB+' ------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' issue-level rating and '2' recovery rating to Arconic Corp.'s $1 billion revolving credit facility, indicating its expectation of substantial (70%-90%; rounded estimate: 75%) recovery in case of default. All other ratings are unaffected, including its senior secured ratings on the $600 million term loan B and $600 million second-lien notes it rated in January 2020. ASTRIA HEALTH: Gets Final Nod on DIP Financing, Cash Collateral Use ------------------------------------------------------------------- Judge Whitman Holt of the U.S. Bankruptcy Court for the Eastern District of Washington authorized Astria Health and debtor-affiliates, jointly and severally, to obtain a senior secured post-petition replacement financing in an aggregate principal amount of up to $43,100,000 from Lapis Advisers, L.P., as agent for the lenders party thereto, pursuant to a final order. The final order ratifies the authority that was granted to the Debtors in the first, second and third interim orders that permitted the Debtors to borrow from the DIP lenders under the DIP facility, the amount sufficient to pay off and replace the existing DIP facility obtained from JMB Capital Partners Lending, LLC, plus $700,000 of committed advances to fund the Debtors' working capital needs, subject to the terms and conditions set forth in the DIP loan documents, the first interim order and the second interim order. Pursuant to the interim orders, the Debtors may use the proceeds of the DIP Facility Loans to (a) replace the existing JMB DIP Facility, (b) fund the post-petition working capital needs of the Debtors during the pendency of these Chapter 11 Cases, (c) pay fees, costs and expenses of the DIP Facility on the terms and conditions described in the DIP Loan Documents, and (d) pay the allowed administrative costs and expenses of the Chapter 11 Cases, in each case, solely in accordance with the DIP Loan Documents (including, but not limited to, the Budget), the interim orders and the Final Order. The Court also authorized the Debtors to use cash collateral until the earlier of (a) the maturity date, and (b) the date upon which the Debtors' right to use cash collateral is terminated as a result of an event of default (which remains continuing and has not been waived by the DIP lenders), subject to the terms and conditions of the first and second interim orders and the DIP loan documents. To secure the DIP Obligations, the DIP Lenders are granted on a final basis, continuing, valid, binding, enforceable, non-avoidable, and automatically and properly perfected DIP Liens in and on the DIP Collateral as follows, in each case subject and subordinate to the Carve-Out: (i) a valid, binding, continuing, enforceable, non-avoidable automatically and fully perfected first priority senior priming liens and security interests in all DIP Collateral, regardless of where located, which senior priming liens and security interests in favor of the DIP Lenders will be senior to all Prepetition Credit Liens other than the Lapis Senior Holdco Liens. (ii) a valid, binding, continuing, enforceable, non-avoidable automatically and fully perfected first priority liens on and security interests in all DIP Collateral that is not otherwise subject to any Permitted Prior Lien. The DIP Liens will have priority over all Prepetition Credit Liens other than the Lapis Senior Holdco Liens. (iii) a valid, enforceable, non-avoidable automatically and fully perfected junior liens on and security interests in all DIP Collateral (subordinate only to the Lapis Senior Holdco Liens, the Permitted Prior Liens and the Carve-Out. In addition, to adequately protect their interests in the prepetition collateral, the Lapis Secured Parties are granted the following in the amount of such diminution in value of their interests in the prepetition collateral: (a) The Bond Trustee, on behalf of itself and the Bondholders, is granted a valid, perfected replacement security interest in and lien upon any and all assets subject (i) to the Lapis 2017 SHC Holdco Liens, subordinate to the Carve-Out, and (ii) to the Lapis 2017 Sunnyside Liens and Lapis 2017 A/R Liens, subordinate to the DIP Liens and the Carve-Out. The 2017 Lapis Loan Replacement Liens will be senior to the 2019 Lapis Loan Replacement Liens, (b) The Bond Trustee is also granted an allowed superpriority administrative expense claim as provided in section 507(b) of the Bankruptcy Code in the amount of Lapis 2017 Loan Adequate Protection Claim with priority in payment over any and all administrative expenses of the kind specified or ordered pursuant to any provision of the Bankruptcy Code. The Lapis 2017 Loan 507(b) Claims will be subject and subordinate only to the Carve-Out and the DIP Superpriority Claims. (c) The Lapis Prepetition Agent, on behalf of itself and the Lapis 2019 Loan Lenders, is granted a valid, perfected replacement security interest in and lien upon any and all assets subject (i) to the Lapis 2019 SHC Holdco Liens, subordinate to the Carve-Out, and (ii) to the Lapis 2019 Sunnyside Liens and Lapis 2019 A/R Liens, subordinate to the DIP Liens and the Carve-Out. (d) The Lapis Agent is also granted an allowed superpriority administrative expense claim as provided in section 507(b) of the Bankruptcy Code in the amount of Lapis 2019 Loan Adequate Protection Claim with priority in payment over any and all administrative expenses of the kind specified or ordered pursuant to any provision of the Bankruptcy Code. The Lapis 2019 Loan 507(b) Claims will be subject and subordinate only to the Carve-Out, the DIP Superpriority Claims and the Lapis 2017 Loan 507(b) Claims. (e) The Debtors will contemporaneously provide the Lapis Secured Parties with any reporting provided to the DIP Lenders under the DIP Loan Agreement. The Lapis Secured Parties and the Committee will each be deemed to be an additional notice party for purposes of the DIP Facility and all parties thereto will provide the Lapis Secured Parties and the Committee contemporaneous copies of all notices pursuant thereto. The Debtors will additionally provide the Lapis Secured Parties and the Committee any reports and information as the Lapis Secured Parties and the Committee may reasonably request from time to time. A copy of the Final DIP Order is available for free at http://bankrupt.com/misc/waeb19-01189-1181.pdf About Astria Health Astria Health and its subsidiaries -- https://www.astria.health/ -- are a nonprofit health care system providing medical services to patients who generally reside in Yakima County and Benton County, Wash., through the operation of Sunnyside, Yakima, and Toppenish hospitals, as well as several health clinics, home health services, and other healthcare services. Collectively, they have 315 licensed beds, three active emergency rooms, and a host of medical specialties. The Debtors have 1,547 regular employees. Astria Health and 12 of its subsidiaries filed for bankruptcy protection (Bankr. E.D.Wash, Lead Case No. 19-01189) on May 6, 2019. In the petitions signed by John Gallagher, president and CEO, the Debtors were each estimated to have assets and liabilities of $100 million to $500 million. The Hon. Frank L. Kurtz oversees the cases. Bush Kornfeld LLP and Dentons US LLP serve as the Debtors' counsel. Kurtzman Carson Consultants, LLC is the claims and noticing agent. Gregory Garvin, acting U.S. trustee for Region 18, on May 24, 2019, appointed seven creditors to serve on an official committee of unsecured creditors. The Committee retained Sills Cummis & Gross P.C. as its legal counsel; Polsinelli PC, as co-counsel; and Berkeley Research Group, LLC as financial advisor. AVADEL SPECIALTY: MCA's Karrilyn Thomas Is Plan Administrator ------------------------------------------------------------- Avadel Specialty Pharmaceuticals, LLC submitted a plan supplement in support of, and in accordance with, Debtor's First Amended Proposed Combined Disclosure Statement and Chapter 11 Plan of Liquidation. This Plan Supplement provides for the Designation and Compensation of Plan Administrator. Avadel Specialty designates Karrilyn Thomas of MCA Financial Group, Ltd., the Debtor's court-approved financial advisor, to serve as the Plan Administrator. In accordance with section 8.5 of the Plan, Karrilyn Thomas, in her capacity as the Plan Administrator, will act as may be necessary or appropriate to (i) liquidate the Estate's Assets in accordance with the Plan, (ii) reconcile and object to certain claims asserted in the Chapter 11 case, (iii) make distributions on allowed claims in accordance with the Plan, and (iv) otherwise fulfill the Plan Administrator's obligations as set forth in the Plan. The Plan Administrator will be compensated based on the standard hourly rate established by MCA Financial Group, Ltd. In accordance with section 8.5.2 of the Plan, all actual and necessary fees, costs, expenses and obligations incurred by or otherwise owed to the Plan Administrator are considered Plan Expenses. Counsel to the Debtor: Dennis A. Meloro GREENBERG TRAURIG, LLP 1007 North Orange Street, Suite 1200 Wilmington, Delaware 19801 Telephone: 302-661-7000 Facsimile: 302-661-7360 E-mail: melorod@gtlaw.com - and - Sara A. Hoffman (admitted pro hac vice) Greenberg Traurig, LLP The MetLife Building 200 Park Avenue New York, New York 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 E-mail: hoffmans@gtlaw.com - and - Proposed Co-Counsel for the Debtor: Paul J. Keenan Jr. John R. Dodd BAKER & MCKENZIE LLP 1111 Brickell Avenue, Suite 1700 Miami, Florida 33131 Telephone: (305) 789-8900 Facsimile: (305) 789-8953 Email: paul.keenan@bakermckenzie.com john.dodd@bakermckenzie.com About Avadel Specialty Avadel Specialty Pharmaceuticals, LLC, is a pharmaceutical company whose sole commercial product is the FDA-approved NOCTIVA(TM). NOCTIVA(TM) is a prescription medicine nasal (nose) spray used in adults who wake up two or more times during the night to urinate due to a condition called nocturnal polyuria. The company is a special purpose entity and wholly owned subsidiary of Dublin, Ireland-based Avadel Pharmaceuticals plc (Nasdaq: AVDL). Avadel Specialty Pharmaceuticals sought Chapter 11 relief (Bankr. D. Del. Case No. 19-10248) on Feb. 6, 2019. The Debtor disclosed total assets of $79.67 million and liabilities of $167.39 million as of Dec. 31, 2018. The Hon. Christopher S. Sontchi is the case judge. The Debtor tapped Greenberg Traurig, LLP as counsel; MCA Financial Group, Ltd., as investment banker; and Epiq Corporate Restructuring, LLC, as claims and noticing agent. AVINGER INC: Closes $3.15 Million Equity Offering ------------------------------------------------- Avinger, Inc., has closed an underwritten public offering of 12,600,000 shares of its common stock at a price of $0.25 per share, for total gross proceeds of approximately $3.15 million, before deducting underwriting discounts, commissions and other offering expenses payable by the Company. Additionally, the Company has granted the underwriters a 45-day option to purchase up to 15% additional shares of common stock to cover over-allotments, if any. The shares were offered pursuant to a registration statement on Form S-1 previously filed with and declared effective by the Securities and Exchange Commission (SEC). A final prospectus relating to the offering was filed with the SEC and is available on the SEC's website at www.sec.gov. Aegis Capital Corp. is acting as sole bookrunner for the offering. About Avinger Headquartered in Redwood City, California, Avinger -- http://www.avinger.com/-- is a commercial-stage medical device company that designs and develops image-guided, catheter-based system for the diagnosis and treatment of patients with Peripheral Artery Disease (PAD). Avinger reported a net loss applicable to common stockholders of $23.03 million for the year ended Dec. 31, 2019, compared to a net loss applicable to common stockholders of $35.69 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $23.82 million in total assets, $16.93 million in total liabilities, and $6.89 million in total stockholders' equity. Moss Adams LLP, in San Francisco, California, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 5, 2020, citing that the Company's recurring losses from operations and its need for additional capital raise substantial doubt about its ability to continue as a going concern. BELOIT COLLEGE: Moody's Lowers Rating on $23MM Debt to Ba2 ---------------------------------------------------------- Moody's Investors Service has downgraded Beloit College's rating to Ba2 from Ba1 on approximately $23 million of outstanding debt issued through the Wisconsin Health and Educational Facilities Authority. The outlook remains negative. RATINGS RATIONALE The downgrade to Ba2 reflects the college's significant market challenges, evidenced by declining enrollment and net tuition revenue. Those declines translate into very weak operating performance. In fiscal 2019, net tuition revenue fell almost 16% from the previous year as the college weathered declines in both the number of students and the average price. Despite expense reductions as part of a budget reduction plan, the college's business model remains highly challenged with deficit operations expected to continue in the near term. The Ba2 rating incorporates Beloit's wealth and reserves, which provides some flexibility to continue to adjust to its challenging market position and weak operating performance. However, the college has utilized over $40 million in reserves and liquidity over the last two years to notably alter its debt structure, including the purchase of the majority of the publicly issued Series 2016 bonds (leaving only $1.4 million held by external bondholders), retirement of the college's privately placed Series 2014 bonds and termination of the associated swap. These actions have notably reduced some potential acceleration risk that existed within the college's debt structure, although the college's financial reserves will retain exposure to the college's weak operating performance. Moody's regards the coronavirus outbreak as a social risk under its ESG framework. Social distancing measures and other restrictions designed to curb the spread of the virus are exacting tremendous economic costs. The prospects and path of economic recovery for the second half of the year and beyond will depend on factors including when and at what pace lockdown measures will ease and to what extent fiscal and monetary policy measures are available to assist businesses and organizations. The combined credit effects of these developments are unprecedented. Its action also reflects Beloit's potential difficulties to adjust to these credit shocks due to its already vulnerable market profile and weak financial performance. Beloit will receive some near-term federal aid, through both a CARES Act disbursement and Paycheck Protection Program loan. RATING OUTLOOK The negative outlook reflects Beloit's vulnerabilities to deteriorating credit conditions due to its already weak financial performance and reduced liquidity. Beloit has been challenged by significant enrollment declines and rising tuition discounting over the last two years, and these trends are likely to be exacerbated with the fall 2020 class. The rating incorporates its base case assumption that classes will resume on campus this fall. The college is likely to face heightened enrollment pressure if the social distancing measures were to be extended into fall 2020 or if a recessionary environment prompted a growing share of students in its traditional market to pursue lower cost alternatives. However, the college has announced a revised academic calendar with the semesters broken down into modules, allowing modules to be offered online until it is deemed safe to reopen the campus. Additionally, continued financial market volatility could negatively impact philanthropy. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Sustained improvement in operating performance, eliminating the need to use reserves to cover deficits - Material strengthening of student demand, including stabilized or growing enrollment and increasing net tuition revenue - Significant growth in total wealth and liquidity FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Significant operational and financial disruption due to the coronavirus outbreak - Declines in fall 2020 enrollment or net tuition revenue, further pressuring operating performance - Disruption in fundraising or receipt of tax credits to repay bridge loans associated with the construction of the Powerhouse campus project LEGAL SECURITY The Series 2016 bonds are secured by a pledge of revenues including student fees and tuition as well as a mortgage on campus property and facilities (excluding the Powerhouse facility). The bridge financing loans to support the construction of the Powerhouse facility are the obligation of Beloit Powerhouse, LLC. These bridge loans are secured by a mortgage on the Powerhouse facility and land. Beloit College serves as the guarantor for the organization and the loans are considered to be subordinate to the college's senior debt obligation. PROFILE Beloit College is a small liberal arts college in Beloit, Wisconsin, approximately one hour south of Madison. The college generated approximately $45 million in revenues in fiscal 2019 and enrolled 1,088 students in the fall 2019 semester. BLACKRIDGE RESEARCH: Case Summary & 2 Unsecured Creditors --------------------------------------------------------- Debtor: Blackridge Research Inc. 200 S. Virginia Street Ste 240 Reno, NV 89501 Business Description: Blackridge Research Inc. is a subsidiary of BlackRidge Technology, which develops, markets, and supports a family of products that provide cybersecurity solutions for protecting enterprise networks and cloud services. Chapter 11 Petition Date: April 30, 2020 Court: United States Bankruptcy Court District of Nevada Case No.: 20-50465 Judge: Hon. Bruce T. Beesley Debtor's Counsel: Stephen R. Harris, Esq. HARRIS LAW PRACTICE LLC 6151 Lakeside Drive Suite 2100 Reno, NV 89511 Tel: 775-786-7600 E-mail: steve@harrislawreno.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by John Hayes, president. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/Fz3xjQ BLACKROCK TCP: S&P Cuts ICR to 'BB+'; Ratings Withdrawn ------------------------------------------------------- S&P Global Ratings said it lowered the issuer credit and senior unsecured debt ratings on BlackRock TCP Capital Corp. (TCPC) to 'BB+' from 'BBB-'. At the same time, S&P removed the ratings from CreditWatch, where it had placed them with negative implications on March 24, 2020, and assigned a stable outlook. "Following our decision in March to place our ratings on TCPC on CreditWatch with negative implications, the issuer requested that the ratings be withdrawn. In accordance with our procedures, we waited 30 days to withdraw the ratings, and prior to withdrawing the ratings, we resolved the CreditWatch as outlined above," S&P said. "The downgrade reflects our expectation that TCPC would fail to meet some of our key earnings metrics for the previous ratings--in particular realized return on average investments--as a result of the economic impact from the coronavirus pandemic over the next 12 months. We expect leverage, measured as debt to adjusted total equity, to remain about 1.2x-1.3x," the rating agency said. At the time of withdrawal, TCPC's earnings metrics for 2019 were below S&P's key thresholds as follows: -- Realized return on average investments: 1.12% (5.0% threshold), primarily due to a realized loss on one investment. -- Non-deal-dependent coverage of interest expense: 2.78x (3.0x threshold) -- Non-deal-dependent coverage of interest and dividends: 0.98x (1.0x threshold) BOSS OYSTER: Unsecureds Payouts Depend on Auction, Insurance Claims ------------------------------------------------------------------- Debtors Boss Oyster, Inc., and Seagrape Enterprises of Apalachicola, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Florida, Tallahassee Division, a Plan of Liquidation and a Disclosure Statement on April 14, 2020. The Debtor is a corporation registered in the State of Florida that owns real estate on the Apalachicola River and formerly operated a restaurant in Apalachicola, Florida. Prior to filing the instant Chapter 11 case, the Debtor was forced to close due to the devastating effects of Hurricane Michael in October 2018. After the filing of the case, the Debtor has attempted to obtain additional insurance proceeds and reasonable estimates to rebuild and reopen. However, at this time neither have materialized and the Debtor believes the best course of action is to proceed with an auction of its waterfront real estate. Class 5 general unsecured claims will receive a pro-rata dividend if enough funds are generated from the auction sale and/or the insurance claims to pay a dividend. The onetime dividend payment will be paid within 90 days of the auction sale or of the effective date, whichever is later. In the event additional insurance proceeds are received, and an additional dividend can be made, the Debtor will notify the Court. Class 6 Equity interest holders Caroline and Larry Maddren. The equity security holders will not receive a dividend unless all other creditors and claims are paid. Payments and distributions under the Plan will be funded by the funds received from insurance proceeds, the Debtor's bank account, and the sale of the Debtor's real property. The Plan Proponent believes that the Debtor will have enough cash on hand on the effective date of the Plan to pay the priority tax claims, administrative expenses, United States Trustee Fees, and the first mortgage holder Centennial Bank. The Debtor believes at least a small dividend will be available to pay unsecured creditors after the auction of its real property. A full-text copy of the Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/y783gr6q from PacerMonitor at no charge. The Debtors are represented by: Bruner Wright, P.A. Robert C. Bruner Byron Wright III 2810 Remington Green Circle Tallahassee, FL 32308 Tel: (850) 385-0342 Fax: (850) 270-2441 E-mail: rbruner@brunerwright.com twright@brunerwright.com About Boss Oyster Inc. Boss Oyster Inc. owns and operates an oyster bar restaurant in Apalachicola, Fla. Boss Oyster and its affiliate Seagrape Enterprises of Apalachicola, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Lead Case No. 19-40357) on July 12, 2019. At the time of the filing, Boss Oyster was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The cases have been assigned to Judge Karen K. Specie. Bruner Wright, P.A. is the Debtors' bankruptcy counsel. BOULDER DENTISTRY: Cash Collateral Use Until October 2020 Approved ------------------------------------------------------------------ Judge Joseph Rosania Jr. of the U.S. Bankruptcy Court for the District of Colorado authorized Boulder Dentistry, P.C., to use cash collateral on a final basis, pursuant to a budget for the months of May through October 2020. As adequate protection for the Debtor's use of cash collateral: (a) The Debtor will provide any such party, which possesses a properly perfected security interest in the cash collateral with, a replacement lien on all postpetition accounts receivable to the extent that the use of cash collateral results in a decrease in the value of such party's interest in the cash collateral pursuant to 11 U.S.C. section 361(2); (b) The Debtor will maintain adequate insurance coverage on all personal property assets and adequately insure against any potential loss; (c) The Debtor will provide to such secured party all periodic reports and information filed with the Bankruptcy Court, including debtor-in-possession reports; (d) The Debtor shall only expend cash collateral pursuant to the Budget subject to reasonable fluctuation by no will than 15% for each expense line item per month, plus all fees owed to the U.S. Trustee; (e) The Debtor will pay all post-petition taxes; and (f) The Debtor will retain in good repair all collateral in which such party has an interest. About Boulder Dentistry Boulder Dentistry, P.C., is a Colorado professional corporation that owns and operates a dental practice located at 1651 28th Street, Boulder, Colorado 80301. Michael A. Bentz, DDS, has been practicing dentistry for over 25 years. It provides cosmetic dentistry, digital x-rays, laser cavity detection, porcelain implant crowns, and other dental related services. Boulder Dentistry filed a voluntary Chapter 11 petition (Bankr. D. Colo. Case No. 19-19126) on Oct.22, 2019, and is represented by Aaron A. Garber, Esq. at WADSWORTH GARBER WARNER CONRARDY, P.C. BOY SCOUTS: Suit vs Hartford Stays in Federal Court ---------------------------------------------------- The case captioned BOY SCOUTS OF AMERICA; CONNECTICUT YANKEE COUNCIL; SPIRIT OF ADVENTURE COUNCIL; ALOHA COUNCIL; and CASCADE PACIFIC COUNCIL, Plaintiffs, v. THE HARTFORD ACCIDENT & INDEMNITY COMPANY and FIRST STATE INSURANCE COMPANY, Defendants, Civil Action No. 3:19-CV-1318-B (N.D. Tex.) is an insurance coverage dispute that has been removed from a Texas state court. Boy Scouts of America and several of its local councils -- specifically, Connecticut Yankee Council, Spirit of Adventure Council, Aloha Council, and Cascade Pacific Council -- sued their insurer, Hartford. The coverage dispute arises out of sexual-abuse lawsuits filed against the Boy Scouts and these councils. The Plaintiffs filed a Motion to Remand. The issue the motion presents is whether the parties have complete diversity of citizenship. Currently, it appears as if there is not complete diversity -- Plaintiff Connecticut Yankee Council and both Defendants are citizens of Connecticut. However, Defendants removed the case to federal court on the ground that there is federal diversity jurisdiction because the Boy Scouts improperly joined Connecticut Yankee Council. Upon analysis, District Judge Jane J. Boyle denies Plaintiffs' motion to remand without prejudice. Boy Scouts of America is a well-known youth-development organization that operates across the country. The Boy Scouts works with local organizations to implement its scouting program. These organizations are supported by local councils. Boy Scouts of America and several of its local state councils filed this lawsuit in Texas state court against Defendants The Hartford Accident and Indemnity Company and First State Insurance Company for the improper denial of coverage under various general and excess liability policies issued by Hartford. The issue before the Court is whether one of the local councils, Connecticut Yankee Council was improperly joined in this insurance-coverage dispute in order to defeat diversity jurisdiction. The Boy Scouts maintains a "comprehensive, broad insurance program" for "its many activities and local councils throughout the country[.]" Relevant to this case, the Boy Scouts purchased several general liability, umbrella, and excess liability insurance policies from Hartford. Connecticut Council, among other local councils, is named as an insured in these policies. Under the policies, Hartford agreed to cover sums that the Boy Scouts would "be obligated to pay as damages because of personal injury. . . ." Hartford also agreed to defend and indemnify the insured in personal injury suits. Recently, the Boy Scouts and its local councils have been sued by various youth participants for sexual-abuse-related injuries suffered while participating in various scouting programs. These sexual-assault victims generally allege that the Boy Scouts and the respective local councils were negligent in failing to prevent the abuse. The Boy Scouts and the local councils allege that some of these underlying sexual-abuse lawsuits are covered by their insurance policies with Hartford. They further allege that they provided Hartford with notice of these lawsuits, but that Hartford has denied its coverage obligations under the policies, including coverage for defense costs and indemnity payments associated with these lawsuits. Connecticut Council is a defendant in one of the sexual-abuse lawsuits. Four individuals that were previously youth participants in the Boy Scouts brought claims against Connecticut Council and others, alleging that between 1974 and 1976, their scout leader physically, mentally, and sexually abused them. The case is currently pending in Connecticut state court. Plaintiffs assert that the injuries the John Does allege in the Connecticut state court case trigger the relevant 1974-76 Hartford primary and excess policies. Thus, Plaintiffs claim, Hartford is obligated to both defend and indemnify Connecticut Council against these claims. Plaintiffs allege that they have notified Hartford of this suit, yet Hartford continues to deny that it has any obligation to defend or indemnify Connecticut Council in the suit. On June 5, 2018, the Boy Scouts and local councils filed their Original Petition against Hartford in the District Court for the 95th Judicial District of Dallas County, Texas. Plaintiffs assert the following claims against Hartford: (1) declaratory judgment; (2) breach of contract; and (3) violations of Chapter 542 of the Texas Insurance Code. The case progressed in state court until May 31, 2019, when Hartford filed a notice of removal in the Federal District Court. In its notice of removal, Hartford argues that the Federal District Court may exercise subject matter jurisdiction over this case under 28 U.S.C. section 1332, because although Connecticut Council and Hartford are citizens of Connecticut, Connecticut Council was improperly joined and thus its citizenship should not be considered for the purpose of assessing the validity of diversity jurisdiction. Hartford alleges that, through initial discovery conducted in state court, it learned that Connecticut Council does not have a justiciable claim against Hartford in this action. On June 21, 2019, Plaintiffs filed a motion to remand the case to state court on the ground that Connecticut Council was properly joined and therefore diversity of citizenship does not exist. The motion is now ripe for review. However, a wrinkle emerged while the motion was pending—the Boy Scouts filed a Chapter 11 case in the United States Bankruptcy Court for the District of Delaware. It appears that this proceeding remains unaffected by the automatic stay in place for the Chapter 11 case. However, Defendants now assert that the Court has an independent basis for jurisdiction over this matter because it is "related to" to a Chapter 11 case. On Feb. 21, 2020, the Court issued an order that permitted the parties to file an advisory motion if they believed Boy Scouts of America's Chapter 11 proceeding prevented the Court from ruling on the pending motion to remand. On March 6, 2020, Hartford filed a response. In its response, Hartford agreed with the Court that the automatic stay does not apply to Plaintiffs' claims in this action. However, Hartford noted that it does believe that the bankruptcy proceeding is relevant to Plaintiffs' motion to remand; specifically, Hartford argues that the Court now has "related to" jurisdiction under 28 U.S.C. section 1334. Hartford contends that this is an independent reason to deny Plaintiffs' request to remand this case to state court. "Federal courts have 'related to' subject matter jurisdiction over litigation arising from a bankruptcy case if the 'proceeding could conceivably affect the estate being administered in bankruptcy.'" "'Related to' jurisdiction includes any litigation where the `outcome could alter, positively or negatively, the debtor's rights, liabilities, options, or freedom of action or could influence the administration of the bankrupt estate.'" Hartford argues the Court has "related to" jurisdiction "because the outcome of the Texas coverage action will undoubtedly have a substantial effect on [the Boy Scout]'s estate." Thus, Hartford now asserts 28 U.S.C. section 1452(a) as a basis for removal. Although the Court concludes that it does not have diversity jurisdiction over this case, the Court believes there is a plausible claim that "related to" jurisdiction now exists under section 1334(b) and that removal is supported under section 1452(a). Consequently, the Court will deny Plaintiffs' motion to remand. The Court does so, however, without prejudice to Plaintiffs refiling a second motion to remand based on: (1) the Court's "related to" jurisdiction (or lack thereof); or (2) any issues raised in the Defendants' Response to Inquiry Regarding Automatic Stay. A copy of the Court's Memorandum Opinion and Order dated March 10, 2020 is available at https://bit.ly/2y8bv30 from Leagle.com. Boy Scouts of America, Connecticut Yankee Council, Spirit of Adventure Council, Aloha Council & Cascade Pacific Council, Plaintiffs, represented by Ernest Martin, Jr. -- ernest.martin@haynesboone.com -- Haynes & Boone LLP & Carla Verena Green -- Carla.green@haynesboone.com -- Haynes and Boone, LLP. The Hartford Accident and Indemnity Company & First State Insurance Company, Defendants, represented by Todd M. Tippett , Zelle Hofmann Voelbel & Mason LLP, Abigail W. Williams -- awilliams@goodwin.com -- Shipman & Goodwin LLP, pro hac vice, James P. Ruggeri -- jruggeri@goodwin.com -- Shipman and Goodwin LLP, pro hac vice, Joseph C. Weinstein -- joe.weinstein@squirepb.com -- Squire Sanders & Dempsey LLP & Joshua Weinberg , Shipman & Goodwin LLP, pro hac vice. 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. BRAND INDUSTRIAL: S&P Alters Outlook to Negative, Affirms 'B-' ICR ------------------------------------------------------------------ S&P Global Ratings affirmed its 'B-' issuer credit rating on Brand Industrial Services Inc. and revised its outlook to negative from stable. In addition, S&P assigned a 'B-' issue-level and '3' recovery ratings to the company's extended $687.4 million revolving credit facility. S&P is also affirming its 'B-' rating on the company's credit facility and its 'CCC' rating on the unsecured notes. The recovery ratings remain '3' and '6', respectively. Delayed construction projects amid coronavirus shutdowns and less new project activity will likely result in lower-than-expected 2020 earnings. While projects could be delayed, construction work is often considered an essential business activity. "We believe any project work delays will be somewhat offset by the benefit of Brand's customers' ongoing maintenance, turnaround, and refurbishment activities. This work accounted for over 60% of 2019 revenues. We believe that increasingly stringent regulation across its end markets will continue to drive recurring demand for Brand's services. Many of Brand's customers face annual maintenance requirements, mandatory refurbishment and repair, regularly scheduled turnarounds and outages, and capital projects," S&P said. Additionally, many customers operate aging facilities, although S&P assumes high plant utilization has recently declined in the low oil price environment. Overall, as a result of low oil prices, COVID-19, and a recessionary environment, Brand's customer base could reduce their maintenance spending or capital investments in the upstream, midstream, refining, petrochemical, chemical, power generation, infrastructure, utilities, real estate, and construction end markets," the rating agency said. Environmental, social, and governance (ESG) factors relevant to the rating action: -- Health and safety The negative outlook on Brand reflects the uncertainty surrounding the length and severity of the impact on Brand's operating performance of COVID-19 and a recessionary environment in the U.S. Although much of Brand's project work has been able to continue in this environment, some of its projects may be delayed, which S&P believes could increase debt leverage. "We could lower the rating within the next 12 months if liquidity becomes strained. This could occur as a result of weaker-than-expected operating performance due to additional unexpected delays or additional project costs arising. Additionally, we could lower the rating if debt leverage increases further as a result of acquisition spending. Overall, we could lower the rating if we come to believe the company depends on favorable business, financial, and economic conditions to meet its financial commitments, or if we view the company's financial commitments as unsustainable in the long term," S&P said. "We could revise the outlook to stable over the next 12 months if the company's liquidity remains solid and it is on track to reduce debt leverage toward 6.5x and we expect it to remain there. This could occur if the company's operating environment stabilizes and Brand maintains EBITDA margins in the low-double-digit percent area while generating positive free cash flow, with a free operating cash flow (FOCF)-to-adjusted debt ratio in the low- to mid-single-digit percent area," the rating agency said. BUZZARDS BENCH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Buzzards Bench, LLC (Lead Case) 20-32391 2001 Holcombe Blvd., Suite 3903 Houston, TX 77030 Buzzards Bench Holdings, LLC 20-32392 3580 Orr Road Allen, TX 75002 Business Description: Buzzards Bench -- https://www.buzzardsbench.com -- owns and operates natural gas production and processing assets located in Carbon and Emery Counties in Utah. Buzzards Bench was established in 2018 initially to acquire properties located in the Buzzards Bench field in the State of Utah. These properties were previously owned and operated by XTO Energy Inc., a subsidiary of ExxonMobil Corporation. Chapter 11 Petition Date: April 30, 2020 Court: United States Bankruptcy Court Southern District of Texas Judge: Hon. David R. Jones Debtors' General Bankruptcy Counsel: Jason S. Brookner, Esq. Paul D. Moak, Esq. Lydia R. Webb, Esq. GRAY REED & MCGRAW LLP 1300 Post Oak Blvd., Suite 2000 Houston, TX 77056 Tel: 713-986-7000 Fax: 713-986-7100 E-mail: jbrookner@grayreed.com pmoak@grayreed.com lwebb@grayreed.com Estimated Assets: $10 million to $50 million Buzzards Bench's Estimated Liabilities: $10 million to $50 million The petitions were signed by Jeffrey Clarke, chief executive officer and manager. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/vFfdvn https://is.gd/LeRHik List of Buzzards Bench's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. XTO Energy Inc, W4.5A.474 Inventory $514,183 XTO Business Development Loc. 119 22777 Springwoods Village Parkway Spring, TX 77389-1425 2. PacifiCorp Electricity $313,947 PO Box 26000 Portland, OR 97256 Debra Dull Tel: (866) 870-3419 Email: Debra.Dull@rockymountainpower.net 3. Enterprise FM Trust Vehicle Leases $150,875 PO Box 800089 Kansas City, MO 64180-0089 Alex Westmoreland Tel: (214) 405-0745 Email: Alex.Westmoreland@efleets.com 4. JACAM Chemicals Oilfield $134,004 205 S. Broadway Chemicals Sterling KS 67579 Tel: (620) 278-3960 Email: carrie.ball@jacam.com 5. Ronald E Dunning Professional $129,060 Trinity Integration Services PO Box 788 Gunter, TX 75058-0788 Tel: (972) 896-1682 Email: Ron.Dunning@TrinityIntegration.com 6. Ryder Scott Company LP Professional $107,568 1100 Louisiana, Suite 4600 Services Houston TX 77002 Tel: (713) 651-9191 Email: Kim.mcglothlin@ryderscott.com 7. First Insurance Funding Finance $101,134 450 Skokie Blvd., Ste 1000 Insurance Northbrook IL 60062-791 Tel: 800-837-2511 Email: csr@firstinsurancefunding.com 8. Utah State Tax Commission Severance $98,792 210 N 1950 W Taxes Salt Lake City UT 84134-0700 Email: tax.utah.gov 9. State of Utah, SITLA State Royalties $65,721 675 E 500 S, Suite 500 Salt Lake City UT 84102-2818 Tel: (801) 538-5121 Email: tla-acct@utah.gov 10. J&A Services LLC Oilfield $45,819 3166 Pipe Court Services Grand Junction, CO 81504 11. Millers Welding Oilfield $33,966 PO Box 908 Services Huntington UT 84528 12. Lawn Tech Pest Control Oilfield $32,877 PO Box 99 Services Orangeville UT 84537 Phil Johnson 13. EIS Environmental Services Professional $25,038 31 N Main St. Services Helper UT 84526 Mel Coonrod Tel: (435)472-3814 Email: eisec@preciscom.net 14. C&J Well Services Oilfield $23,767 PO Box 975682 Services Dallas TX 75397-5682 15. Standard Automation & Control Software $21,975 600 Travis Street, Suite 5300 Maintenance Houston TX 77002 Email: AngelMattocks@Eaton.com 16. US Treasury, ONRR Federal $20,662 Email: latisha.williams@onrr.gov Royalties 17. WCR Oilfield $19,901 2377 Commerce Ctr Blvd., Ste B Services Fairborn, OH 45324 Tel: (602)753-0213 Ben Hughes 18. Martindale Consultants Inc. Professional $19,080 4242 N Meridian Ave Services Oklahoma City OK 73112 Tel: (405) 728-3003 Email: l.melman@marticons.com 19. Industrial Electrical Motor Oilfield $18,192 Service Inc. Services PO Box 485 Orangeville UT 84537 Tel: (435)748-2828 David Hinkins 20. Advanced Oilfield Services Inc. Oilfield $16,067 Raptor Industries Services PO Box 679390 Dallas TX 75267-9390 Tel: (970)625-9704 Email: mschmeckel@advancedoilfield.com CALERES INC: S&P Downgrades ICR to 'B+'; Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based footwear retailer and wholesaler Caleres Inc. to 'B+' from 'BB-'. At the same time, S&P lowered its rating on the company's senior unsecured notes to 'B' from 'BB-' and revised the recovery rating to '5' from '3' based on the company's recent asset-based revolving (ABL) revolver upsize and draw. "We expect severely pressured operating results will cause Caleres' credit metrics to deteriorate significantly this year, with lingering effects through 2021. As a result of the coronavirus outbreak, Caleres announced the temporary closure of all its Famous Footwear and Brand Portfolio stores across North America from mid-March through an unspecified date. We believe closures could continue for an extended period given government actions to quell the rapid rise in new COVID-19 cases. Caleres' online channel, which accounts for a significant (about 23%) proportion of total revenues, remains operational; this could offset some of the impact from the closed stores. Still, we believe consumer demand will be significantly depressed over the next few quarters as confidence rapidly declines due to the steep recession and elevated unemployment. In addition, the trajectory of consumer spending habits exiting the pandemic is unknown, but we expect there could be longer-term traffic declines for brick and mortar locations," S&P said. The negative outlook reflects the heightened uncertainty regarding the impact of the coronavirus pandemic and impending recession on Caleres' financial condition. Prolonged store closures, coupled with a slowdown in consumer spending, could affect the company's ability to recover operationally and maintain leverage below 4x in the next one to two years. "We could lower the rating if we expect Caleres' leverage will be sustained above 4.5x. This could occur if the impact of the coronavirus and subsequent recessionary macroeconomic environment are more severe and prolonged than we currently expect, delaying operating performance improvements in the second half of the year," S&P said. "We could revise the outlook to stable if we expect the company to maintain leverage of less than 4.5x. If the company is able to recover from the impact of the coronavirus and we are confident the company can maintain its appeal to consumers in the recessionary environment, we would expect sales and earnings to stabilize at the end of this year and further rebound in 2021. To consider a stable outlook, we would also have to believe that macroeconomic conditions are more stable and the threat of the coronavirus pandemic has subsided," S&P said. CANAM CONSTRUCTION: Moody's Withdraws B2 CFR on Debt Repayment -------------------------------------------------------------- Moody's Investors Service is withdrawing the credit ratings of Canam Construction Inc., including its B2 Corporate Family Rating, B2-PD probability of default rating and B3 senior secured bank credit facility rating following the repayment of all outstanding debt. The deal to sell Canam's Canadian operations and some US and overseas operations to Placements CMI (the Dutil family), Caisse de depot et placement du Quebec and Fonds de solidarite FTQ (the Quebec Partners) was completed in March 2020. The transaction was valued at approximately CAD$840 million and part of the proceeds were used to repay all of Canam's rated debt. Withdrawals: Issuer: Canam Construction Inc. Corporate Family Rating, Withdrawn, previously rated B2 Probability of Default Rating, Withdrawn, previously rated B2-PD Senior Secured Bank Credit Facility, Withdrawn, previously rated B3 (LGD4) Outlook Actions: Issuer: Canam Construction Inc. Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Canam Construction Inc., headquartered in Saint-Georges, Quebec, is a North American manufacturer of customized steel components primarily for the commercial, industrial, and institutional construction sectors. CANNABICS PHARMA: Weinstein Int'l Raises Going Concern Doubt ------------------------------------------------------------ Cannabics Pharmaceuticals Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $867,865 on $1,310 of net revenue for the year ended Feb. 29, 2020, compared to a net income of $3,729,666 on $2,320 of net revenue for the year ended in 2019. The audit report of Weinstein International, C.P.A., states that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Feb. 29, 2020, showed total assets of $3,571,133, total liabilities of $419,642, and a total stockholders' equity of $3,151,492. A copy of the Form 10-K is available at: https://is.gd/ux5bA5 Cannabics Pharmaceuticals Inc., a pharmaceutical company, develops advanced cannabis medicines and therapies for cancer. The Company is headquartered in Bethesda, Maryland. CARDINAL HOMES: Committee Seeks to Hire Williams Mullen as Counsel ------------------------------------------------------------------ The official committee of unsecured creditors of Cardinal Homes, LLC and Alouette Holdings, Inc. filed an amended application seeking authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to retain Williams Mullen as its legal counsel. Williams Mullen will: a. assist, advise and represent the committee in its consultations with the Debtors regarding the administration of the Chapter 11 cases; b. assist, advise and represent the committee in analyzing the Debtors' assets and liabilities, investigate the extent and validity of liens, and participate in and review any proposed asset sales, any asset dispositions, financing arrangement and cash collateral stipulations or proceedings; c. assist, advise and represent the committee in any manner relevant to reviewing and determining the Debtors' rights and obligations under leases and other executory contracts; d. assist, advise and represent the committee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtors' operations and the desirability of the continuance of any portion of those operations, and any other matters relevant to the case or to the formulation of a plan; e. assist, advise and represent the committee in its participation in the negotiation, formulation and drafting of a plan of liquidation or reorganization; f. assist, advise and represent the committee on the issues concerning the appointment of a trustee or examiner under Section 1104 of the Bankruptcy Code; g. assist, advise and represent the committee in the evaluation of claims and in any litigation matters, including avoidance actions; h. advise the committee of its powers and its duties under the Bankruptcy Code; and i. perform all other necessary legal services. Williams Mullen's hourly rates are: Michael Mueller $500 Augustus Epps, Jr. $500 Jennifer McLemore $400 Anna Birkenheier $325 Bennett Eastham $275 The firm can be reached through: Augustus C. Epps Jr., Esq. Williams Mullen 200 South 10th Street, Suite 1600 Richmond, VA 23219 Telephone: 804-420-6000/804-420-6543 Fax: 804-420-6507 Email: aepps@williamsmullen.com About Cardinal Homes Cardinal Homes, Inc. -- https://www.cardinalhomes.com -- manufactures made-to-order, modular building components for building contractors engaged in residential and light commercial construction projects. It was formed in 1970 and is a wholly-owned subsidiary of Alouette Holdings, Inc. Cardinal Homes filed for Chapter 11 bankruptcy protection (Bankr. E.D. Va. Case No. 19-36275) on Dec. 2, 2019. The case is jointly administered with the Chapter 11 case of Alouette Holdings (Bankr. E.D. Va. Case No. 19-36126) filed on Nov. 20, 2019. At the time of the filing, the Debtors each disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. Judge Kevin R. Huennekens oversees the cases. The Debtors tapped Whiteford Taylor & Preston, LLP as legal counsel; Protiviti Inc. as financial advisor; and SC&H Capital, a division of SC&H Group, Inc., as investment banker. The Office of the U.S. Trustee appointed a committee of unsecured creditors on Dec. 13, 2019. The committee is represented by Augustus C. Epps Jr., Esq. at Williams Mullen. CELLA III: Girod Says Amended Disclosures Still Inadequate ---------------------------------------------------------- Girod LoanCo, LLC, the largest creditor of the estate of Cella III, LLC, filed a continued objection to approval of the Amended Disclosure Statement for the Amended Chapter 11 Plan of Reorganization of debtor Cella III, LLC. Girod LoanCo claims that: * The latest disclosure statement still lacks adequate information to allow creditors to make an informed judgment about the plan in that it fails to provide any information regarding Girod’s secured claim against any payments made by East Jefferson General Hospital to terminate the lease early (upon belief well in excess of $1.2 million). * The latest round of amendments still fails to explain how Mr. Cella can retain his 100% equity interest plus a substantial salary going forward under the Plan which promises unsecured creditors payment only from the Debtor's hoped-for litigation success with EJGH but without regard for Girod's priming security interest in any of those litigation proceeds. * The Plan still inappropriately classifies Girod's deficiency claim separately from other unsecured creditors in order to gain an impaired class acceptance. * With virtually no other creditors of note, the Plan looks to be a source to maintain Mr. Cella's lifestyle while amortizing Girod's secured claim out over decades. As such, the Disclosure Statement remains wholly insufficient and the Plan is patently unconfirmable. A full-text copy of Girod's objection to the Amended Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/ybjtxeos from PacerMonitor at no charge. Attorneys for Girod LoanCo: TAYLOR, PORTER, BROOKS & PHILLIPS L.L.P. Brett P. Furr Michael A. Crawford John A. Milazzo, Jr. Post Office Box 2471 450 Laurel Street, 8th Floor Baton Rouge, Louisiana 70821-2471 Tel: (225) 387-3221 Fax: (225) 346-8049 Fax About Cella III LLC Cella III, LLC, a company based in Metairie, La., filed a Chapter 11 petition (Bankr. E.D. La. Case No. 19-11528) on June 5, 2019. In the petition signed by George A. Cella, III, member and manager, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. The Hon. Jerry A. Brown oversees the case. The Debtor tapped Congeni Law Firm, LLC as bankruptcy counsel; Sternberg, Naccari & White, LLC as special counsel; and Patrick J. Gros, CPA, APAC as accountant. CENTURY ALUMINUM: Incurs $2.7 Million Net Loss in First Quarter --------------------------------------------------------------- Century Aluminum Company announced its first quarter 2020 results. In the first quarter of 2020, shipments of primary aluminum were 202,905 tonnes compared with 202,870 tonnes shipped in the fourth quarter of 2019. Net sales for the first quarter of 2020 were $421.2 million compared with $435.5 million for the fourth quarter of 2019, reflecting a 3% decrease over prior quarter due to lower regional premiums. Century reported a net loss of $(2.7) million for the first quarter of 2020 and $1.0 million net income on an adjusted basis. First quarter results were negatively impacted by $3.7 million of non-cash exceptional items, including a $12.1 million lower of cost or net realizable value inventory adjustment (net of tax), offset by $8.3 million of unrealized gains on forward derivative contracts. This result compares to a net loss of $(4.8) million for the fourth quarter of 2019, or $(9.0) million on an adjusted basis. Adjusted EBITDA for the first quarter of 2020 was $28.1 million, an increase of $14.8 million sequentially driven by favorable raw material prices, partially offset by falling regional premiums. Century's cash position at quarter end was $147.6 million and revolver availability was $55.5 million. "It is with great sadness that we report the loss of a colleague in a workplace incident in the anode production facility at Sebree on April 8th," commented Michael Bless, president and CEO. "This loss of life has profoundly impacted our entire community, and has caused us to rededicate ourselves to our most critical responsibility to return each of our colleagues home safely at the end of his or her shift. Our late colleague's family remains firmly in our thoughts and prayers." Mr. Bless continued, "We have taken a number of actions to protect the health of our employees and sustain our operations in this unprecedented environment. Thus far we have recorded only one confirmed case of COVID-19, and have had a further handful of employees quarantined due to contact with infected persons. Our plants remain fully operational. We are grateful to our employees, who have displayed tremendous perseverance in the face of the hardships caused by the pandemic. In addition, we are appreciative of the continuing partnership of our customers and suppliers, with whom we are in constant touch." "Commodity prices have fallen at an unprecedented pace in reaction to the demand destruction caused by the health crisis," added Mr. Bless. "In addition, degradation in the order books of certain customers has caused us to move our product mix to a higher proportion of standard products, thus lowering somewhat the average premium we receive. That said, our plants have maintained their production rates, and we continue to sell all of our metal essentially as it is cast; we have not observed a build of finished goods inventory and do not anticipate such a scenario. In addition, we are seeing meaningful reductions in the price of key inputs, including alumina, and wholesale electric power." Mr. Bless concluded, "We have continued the successful implementation of our cost reduction and cash flow enhancement measures. We have an informed view of second quarter cash flow and possess ample liquidity for the foreseeable future, even if commodity prices were to remain at current levels. We are continually assessing the environment and have myriad options to improve cash flow were we to determine that current (or worse) conditions could persist for a protracted period of time. We intend to balance protection of the Company's near-term financial strength and flexibility with the preservation of our ability to participate fully in the recovery which will come." About Century Aluminum Company Century Aluminum Company -- http://www.centuryaluminum.com/-- is a global producer of primary aluminum and operates aluminum reduction facilities, or "smelters," in the United States and Iceland. The Company reported a net loss of $80.8 million for the year ended Dec. 31, 2019, compared to a net loss of $66.2 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.49 billion in total assets, $233.7 million in total current liabilities, $591 million in total noncurrent liabilities, and $675 million in total shareholders' equity. * * * As reported by the TCR on April 17, 2020, Moody's Investors Service downgraded the Corporate Family Rating of Century Aluminum Company to Caa1 from B3. "The ratings downgrade reflects Moody's expectations of further deterioration in Century's credit profile due to the impact of the coronavirus outbreak on the global aluminum demand, prices and regional premiums, which have declined materially since the beginning of 2020," said Botir Sharipov, vice president and lead analyst for Century Aluminum. Also in April 2020, S&P Global Ratings lowered its issuer credit rating on Chicago-based aluminum producer Century Aluminum Co. to 'CCC+' from 'B-' and its issue-level rating to 'B-'. "We believe the outbreak of COVID-19 is materially hindering capital market accessibility and the risk of weak aluminum prices persisting might make it more challenging for Century to refinance its debt. In the next six to 12 months as the bond maturity gets closer and Century's quarterly cash flow begins to reflect weaker aluminum prices, we expect it could experience a potential liquidity shortfall," S&P said. CHICAGO, IL: Fitch Cuts Series 2013 Bonds to BB+ on State Downgrade ------------------------------------------------------------------- Fitch Ratings has downgraded the rating on the following Chicago, IL bonds to 'BB+' from 'BBB-': -- $96,507,307 motor fuel tax revenue TIFIA bonds, series 2013; -- $82,595,000 motor fuel tax revenue refunding bonds, series 2013. The Rating Outlook is revised to Negative from Stable to match the Outlook on the state of Illinois' Issuer Default Rating (IDR), to which this rating is linked. SECURITY The motor fuel tax bonds have a first lien on all motor fuel taxes distributed to the city by the state, subject to annual appropriation by the state legislature. Additionally, various Riverwalk project-related revenues are pledged as long as the TIFIA bonds remain outstanding. KEY RATING DRIVERS Analytical Conclusion: The rating on Chicago's motor fuel tax bonds is capped at the 'BB+' appropriation rating of the state of Illinois, one notch below its 'BBB-' IDR. The rating action on the city's motor fuel tax bonds reflects Fitch's recent downgrade of Illinois' IDR and appropriation ratings by one notch and Outlook revision to Negative from Stable. The motor fuel tax bond structure continues to provide solid protection against potential revenue declines in Fitch's scenario analysis and would support a higher rating absent the rating cap. The structure's resilience assessment reflects a boost in revenues related to a change in the motor fuel tax rate, in addition to a reduction in leverage following the refunding of the motor fuel tax revenue bonds, series 2008A from proceeds of bonds recently issued by the Chicago Sales Tax Securitization Corporation. Growth Prospects for Revenues: Fitch expects fuel tax revenue growth to remain stagnant (absent policy action) following a significant bump in revenues in 2020 as a result of a doubling of the tax rate effective July 2019. Fitch's 'bbb' growth prospect assessment reflects the sensitivity of the revenue stream to fuel prices, economic cycles and increasing fuel efficiency of vehicles, improved by the new statutory indexing of the rate to the CPI. Strong Resilience: The motor fuel tax structure exhibits solid cushion against potential revenue declines, consistent with an 'a' resilience assessment, even when assuming full leverage to the 2.0x MADS ABT. Resilience could materially increase in the future if the city decides against fully leveraging the revenue stream. Fitch believes the fuel tax revenue bonds resilience assessment could support a higher rating on the bonds absent the state rating cap. State Appropriation Rating: The rating is capped at one notch below the state's IDR, as the city's receipt of motor fuel tax revenues is subject to appropriation by the state. Fitch recently downgraded Illinois' IDR to 'BBB-' from 'BBB' based on its anticipation of a fundamental weakening of the state's financial resilience given its already tenuous position entering the current severe downturn. While Illinois should avoid any immediate cash flow pressures, the state's lack of meaningful reserves and the limited nature of other fiscal-management tools at its disposal mean Illinois will be challenged to maintain its investment-grade IDR. The Outlook revision to Negative reflects the risk that the depth and duration of the downturn could lead Illinois to implement nonstructural budget-management measures the state finds difficult to quickly unwind once an economic recovery finally begins to take hold. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An upgrade of the state's IDR/appropriation ratings or Outlook revision would likely result in a change to the motor fuel tax rating. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A downgrade of the state's IDR/appropriation ratings or assignment of a Rating Watch Negative; -- Severe declines in motor fuel tax revenues that could result from a more pronounced and prolonged economic downturn associated with coronavirus containment measures. BEST/WORST CASE RATING SCENARIO International scale credit 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 Economic Resource Base Chicago acts as the economic engine for the Midwestern region of the United States and offers abundant and diverse employment opportunities. The city also benefits from an extensive infrastructure network, including a vast rail system, which supports continued economic growth. The employment base is represented by all major sectors, including wholesale trade, professional and business services and financial sectors, with no one sector dominating. Socioeconomic indicators are mixed as is typical for an urbanized area, with above-average per capita income and educational levels but also elevated individual poverty rates. The city's estimated population grew by a modest 0.4% since the 2010 Census, while the state's declined 0.7% and the U.S. grew by 6%. Motor Fuel Tax Rate Increase Provides One-time Revenue Boost The state recently amended the motor fuel tax statute resulting in an increase in the motor fuel tax rate to 38 cents per gallon from 19 cents effective July 2019. The rate will be adjusted annually to keep pace with the CPI. Fiscal 2019 (Dec. 31 year end) motor fuel tax revenues (preliminary - cash basis) increased to approximately $62 million compared to $51.6 million the year prior. Fiscal 2019 revenues are net of the statutory 25% set aside of fuel tax revenues that must be used to improve non-arterial streets and are thus not pledged to bondholders. This increase in revenues will be folded into the city's next capital improvement plan. Preliminarily, the city plans to allocate the additional revenues to ongoing department of transportation (CDOT) projects, providing some relief to the general fund, which currently provides funding. Fuel tax revenues are budgeted at $81.3 million (pledged portion) in fiscal 2020. The receipt of fuel tax revenues is generally subject to a lag, therefore its year-to-date motor fuel tax revenues do not reflect the impact of containment measures associated with the coronavirus outbreak. Motor fuel taxes are collected monthly by the state and, once appropriated, are allocated first to priority distributions (including those for the state boating act fund, grade crossing protection fund, and vehicle inspection fund, among others). The balance is then split between state (45.6%) and local governments (54.4%). The local portion is distributed to local governments, with municipalities garnering 49.1% of the local portion. The city of Chicago receives a share of the municipality portion, based upon its population relative to all incorporated municipalities within the state. Resilience Analysis Excludes Riverwalk Component Certain revenues associated with the city's Riverwalk venue (approximately $4 million in fiscal 2019) are also pledged to all series of motor fuel tax bonds, but only as long as the 2013 TIFIA bonds are outstanding (the TIFIA bonds have a scheduled final maturity of 2048 but are subject to earlier prepayment). Given the difficulty in predicting future Riverwalk receipts and the limited duration of the pledge, Fitch does not consider the additional revenues in its analysis, but they are included in the definition of revenues for the ABT. Slow Revenue Growth Anticipated Motor fuel tax revenues are likely to remain relatively stagnant, notwithstanding the bump expected due to the increase in the rate and the subsequent indexing of the rate to the CPI. This reflects Fitch's expectations of a long-term, national trend of stable to declining fuel consumption, and stagnant population growth. Motor Fuel Tax Resilience Remains Sound Fitch's analysis of the motor fuel tax structure's resilience in the current economic environment incorporates the potential for revenue loss that may exceed the historical experience that underpins the standard scenarios applied under Fitch Ratings' U.S. Public Finance Tax-Supported Rating Criteria for dedicated tax bonds. Fitch expects a recession of unprecedented depth since World War II and pressure on local government tax revenue from coronavirus containment measures that have severely restricted business activities and non-essential travel to slow the spread of the virus. Fitch's analysis of U.S. local government revenue bonds backed by motor fuel taxes incorporates a 34% revenue stress (annualized) based on expectations for significant traffic losses through 1H20 and moderate recovery through year end. This scenario is more significant than the largest cumulative decline in the city's motor fuel tax revenue history -- a 23.6% reduction between fiscal years 2006-2011. Fuel tax revenue performance is expected to vary across U.S. local governments based on both policy actions related to containment efforts and unique economic and demographic characteristics. However, issuer level distinctions are hard to predict at this time given the evolving and unparalleled nature of the crisis. Under Fitch's more severe scenario analysis the city's unaudited fiscal 2019 motor fuel tax revenues would continue to provide very healthy 2.8x coverage of MADS ($14.5 million in fiscal 2033). MADS was reduced from nearly $20 million following the refunding of the motor fuel tax revenue bonds, series 2008A, earlier this year. Fitch believes that motor fuel taxes are unlikely to be fully leveraged, given that the residual revenues are providing support to the general fund, which is the city's primary need right now. Potential leverage plans will be clearer after the city completes its next capital improvement plan. Assuming the revenue stream is leveraged to the maximum amount under the 2.0x ABT, pledged revenues could withstand a 50% decline before they were insufficient to fully cover debt service. Fitch believes the fuel tax revenue bonds resilience assessment could support a higher rating on the bonds absent the state rating cap. 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 The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). CONCRETE PUMPING: S&P Alters Outlook to Negative, Affirms 'B' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Concrete Pumping Holdings Inc. to negative from stable and affirmed its 'B' issuer credit rating. The negative outlook reflects S&P's view that Concrete Pumping Holdings end-markets will face challenging conditions, resulting in earnings volatility in 2020. The company provides concrete pumping services for the commercial (58% of fiscal-year 2019 revenue), residential (27%), and infrastructure (15%) construction end-markets. S&P believes the current recession stemming from the spread of the coronavirus will reduce the demand for the company's services in the commercial and residential end-markets and cause its revenue to decline in 2020. Even as the shelter-in-place mandates are lifted across the country, S&P believes the weak macroeconomic environment will lead to reduced or delayed construction activity throughout the year. Positively, the rating agency anticipates that the company's infrastructure projects may benefit from potential government stimulus and boost the company's earnings in that end-market. The negative outlook on Concrete Pumping Holdings reflects the increased risk that a prolonged economic downturn will cause earnings volatility and result in elevated leverage over the next 12 months. S&P believes there is also a risk that the company will be unable to reduce its variable expenses in line with its expectations, and that liquidity could come under pressure. "We could lower our rating on Concrete Pumping Holdings if the conditions in its construction end-markets deteriorate, causing its operating performance to decline by more than we anticipate, and increasing its leverage above 6x over the next 12 months. We could also downgrade the company if it is unable to generate positive free cash flow to adequately cover fixed charges, including amortization payments," S&P said. "We could revise our outlook on Concrete Pumping Holdings to stable if we expect the company to generate meaningfully positive free cash flow on a consistent basis and we believe leverage will be sustained under 6x. In this scenario, we would also expect a broad stabilization in the company's macroeconomic environment," S&P said. CONSERVICE MIDCO: Moody's Assigns B3 CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Conservice Midco, LLC with a Corporate Family Rating of B3 and a Probability of Default Rating of B3-PD. At the same time, Moody's assigned a B2 rating to the issuer's proposed senior secured first lien credit facility, comprised of a $475 million term loan and an undrawn $50 million revolver. The proceeds of the new debt financing, which also includes a proposed $190 million second lien term loan (unrated), will be used to fund the acquisition of Conservice by Advent International Corporation. The ratings outlook is stable. The following ratings were assigned: Issuer: Conservice Midco, LLC -- Corporate Family Rating at B3 -- Probability of Default Rating at B3-PD -- Gtd Senior Secured First Lien Revolving Credit Facility at B2 (LGD3) -- Gtd Senior Secured First Lien Term Loan at B2 (LGD3) Outlook Actions: Issuer: Conservice Midco, LLC -- Outlook assigned Stable RATINGS RATIONALE Conservice's B3 corporate family rating reflects the company's small size relative to similarly rated issuers, high leverage levels post-transaction, and concentrated market focus as a provider of utility management and billing software solutions to property owners and managers in the multifamily, single-family, student housing, and commercial real estate sectors. These challenges are partially offset by Conservice's solid margins and stable, recurring cash flows, driven by favorable industry fundamentals, historically strong customer retention rates, and a cyclical demand for utility services, which reduces the company's vulnerability to economic cycles. The ratings also reflect the company's leading presence as a provider of utility services within its target market, and a well-diversified unit portfolio across customers, geographies and property types. Conservice's liquidity position is considered good, supported by modest internal cash flows, approximately $5 million of pro forma cash on hand, and an undrawn $50 million revolving credit facility. Moody's expects ongoing cash flows to be used mainly to fund operations, long term growth initiatives as well as tax distributions and mandatory debt repayment. Conservice is privately held and post-transaction close to 90% of its shares will be held by private equity sponsors, which presents inherent corporate governance concerns, particularly with respect to the possible use of debt financing to fund equity distributions. Pro forma for the transaction, Advent and TA Associates will each own 45% of the company, with Conservice management retaining the remaining ~11% stake. The company's long-term financial policy is uncertain given its private equity ownership, but Moody's expects the issuer to deleverage over time through a combination of organic growth, excess cash flow, and term loan amortization. The B2 ratings for Conservice's proposed first lien bank debt reflect the borrower's B3-PD probability of default rating and a loss given default assessment of LGD3. The B2 first lien ratings are one notch higher than the corporate family rating and take into account the first lien bank debt's priority and senior ranking in the capital structure relative to the company's proposed second lien debt (unrated). The stable rating outlook reflects its view that the issuer will maintain its proposed capital structure and that its business model will continue to generate consistent, positive cash flows through economic cycles, while maintaining leverage and coverage metrics, at a minimum, at post-transaction levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Conservice sustains healthy operating performance while adhering to a conservative financial policy such that debt to EBITDA (Moody's adjusted) contracts to below 6.0x on a sustained basis and annual free cash flow approximates 5% of total debt. The ratings could be downgraded if Conservice were to experience a weakening competitive position, sustained free cash flow deficits, or the company maintains aggressive financial policies that prevent meaningful deleveraging. Conservice Midco, LLC is a privately held firm that provides utility management and billing software solutions to property owners and managers in the multifamily, single-family, student housing, and commercial real estate sectors. Moody's projects that the company will generate pro forma revenues of approximately $290 million in 2020. COSMOS HOLDINGS: Lowers Net Loss to $3.3M in 2019 ------------------------------------------------- Cosmos Holdings Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $3,298,965 on $39,676,385 of revenue for the year ended Dec. 31, 2019, compared to a net loss of $9,060,658 on $37,083,882 of revenue for the year ended in 2018. The audit report of Armanino LLP states that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $23,879,636, total liabilities of $30,340,465, and a total stockholders' deficit of $6,460,829. A copy of the Form 10-K is available at: https://is.gd/FPVH54 Cosmos Holdings Inc., through its subsidiaries, develops, imports, exports, markets, distributes, and sells pharmaceutical and wellness products for human use primarily in the European Union. It offers branded pharmaceutical products, over-the-counter medicines, and generic pharmaceutical products. The company provides its products to wholesale drug distributors, and wholesalers and retail healthcare providers. Cosmos Holdings Inc. is based in Chicago, Illinois. DATA STORAGE: Has $29K Net Income for Year Ended Dec. 31, 2019 -------------------------------------------------------------- Data Storage Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net income of $29,323 on $8,483,608 of sales for the year ended Dec. 31, 2019, compared to a net income of $236,671 on $8,887,402 of sales for the year ended in 2018. The Company had a net income (loss) available to shareholders of $(54,452) and $146,781 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, DSC had cash of $326,561 and a working capital deficiency of $2,571,583. As a result, these conditions raised substantial doubt regarding the Company's ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $7,342,890, total liabilities of $5,614,742, and a total stockholders' equity of $1,728,148. A copy of the Form 10-K is available at: https://is.gd/1bpJIo Data Storage Corporation provides disaster recovery, business continuity, cloud storage, and compliance solutions primarily in the United States. The company's solutions assist organizations in protecting their data, minimize downtime, and ensure regulatory compliance. Its solutions include infrastructure-as-a-service, data backup, recovery and restore, and data replication services; email archival and compliance; eDiscovery; continuous data protection; data de-duplication; and virtualized system recovery, as well as hybrid cloud services. The company offers its solutions and services to businesses in healthcare, banking and finance, distribution services, manufacturing, construction, education, and government sectors. Data Storage Corporation is headquartered in Melville, New York. DIAMOND OFFSHORE: S&P Cuts ICR to 'D' on Weak Market Conditions --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Houston-based Diamond Offshore Drilling Inc. to 'D' from 'CC'. S&P also lowered all issue-level ratings to 'D', reflecting cross defaults on the debt. The downgrade reflects S&P's belief that the continued weakening in market indicators, such as the recent plunge in crude oil prices and the weaker outlook on offshore drilling services following initial first-quarter industry reports, make it more likely that Diamond Offshore Drilling Inc. will not make the interest payment on its 2039 senior notes within its 30-day grace period. DIAMOND RESORTS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of Diamond Resorts International, Inc. including its Corporate Family Rating to Caa1 from B3, its Probability of Default rating to Caa1-PD from B3-PD, its senior secured rating to B3 from B2, and its senior unsecured rating to Caa3 from Caa2. The outlook has been revised to negative from stable. "The downgrade reflects Moody's expectation that Diamond Resorts' earnings will be pressured in 2020 and 2021 due to travel restrictions and macroeconomic weakness related to the spread of the coronavirus which will lead to debt/EBITDA remaining above 7.0x for the next two years," stated Pete Trombetta, Moody's lodging and cruise analyst. Moody's forecast assumes a majority of the company's resorts are closed for most of the second quarter of 2020, resulting in weak tour flow, rentals, and new timeshare sales, with sales recovering slowly into 2021. The company entered 2020 with weak debt/EBITDA of above 7.0x. Diamond Resorts' liquidity is adequate, with its estimate of cash balances above $300 million and no material debt maturities over the next two years. Vacation ownership interest sales make up almost half of total sales for Diamond Resorts and softness in that segment will make it difficult for the company to de-lever to levels appropriate for the B3 rating category (Moody's calculation of debt includes standard adjustments and 100% of securitized debt). Downgrades: Issuer: Diamond Resorts International, Inc. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Senior Secured Revolving Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured Term Loan, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured Global Notes, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Unsecured Global Notes, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: Diamond Resorts International, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The lodging 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 Diamond Resorts' credit profile, including its exposure to increased travel restrictions for US citizens which represents a majority of the company's revenue and earnings 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 reflects the impact on Diamond Resorts from the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Diamond Resorts' credit profile will be dominated by the length of time that the timeshare industry continues to be highly disrupted and the resulting impact on the company's cash consumption and its liquidity profile. The normal ongoing credit risks include the company's high leverage -- Moody's adjusted pro forma debt/EBITDA was almost 8.0x for fiscal year 2019, an improvement from 8.2x at the end of 2018. Diamond Resorts has modest scale and focuses on the higher risk timeshare segment of hospitality, relative to the franchise/management agreement approach of other lodging companies. Approximately 80% of Diamond Resorts' EBITDA is derived from vacation interest sales and its consumer financing segments. The company benefits from adequate liquidity including low capital requirements, favorable cash flow profile of its hospitality management business and lack of near-term debt maturities. The nearest maturity is the company's revolver which expires in September of 2021, followed by its term loan and senior secured notes in September 2023. The negative outlook reflects Moody's expectation that continued weakness caused by the disruption related to the spread of the coronavirus, and the resulting macroeconomic weakness, could pressure Diamond Resorts' earnings and liquidity over the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: The ratings could be downgraded further if the company's liquidity weakened in any way, if the probability fo default increases for any reason, or if the recovery is delayed beyond its base assumptions. The outlook could be revised to stable if the impacts from the spread of the coronavirus stabilizes, resorts open and vacation ownership interest sales increase, enabling the company to de-lever from current levels. Although not expected in the near term due to the company's high financial leverage, ratings could be upgraded should its earnings diversify away from the vacation interest sales and financing segments and if the company is able to maintain debt/EBITDA below 6.5x and EBITA/interest coverage of above 2.0x. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Diamond Resorts International, Inc. is a timeshare business that specializes in the sale of vacation ownership interests in the form of points. Members receive an annual allotment of points and through the membership club can use these points to stay at destinations within Diamond's global network of just over 430 destinations in 34 countries. Diamond Resorts operates two segments: hospitality and management services, where the company manages or operates resorts, resort amenities, homeowners' associations, and vacation interests, which includes sales and financing of timeshare vacation ownership and consumer financing related to the purchase of timeshares. Revenues are about $1.3 billion. Diamond is owned by Apollo Global Management LLC. DIAMONDBACK INDUSTRIES: May 4 Telephonic Meeting Set to Form Panel ------------------------------------------------------------------ The committee formation meeting in the bankruptcy cases of Diamondback Industries Inc., et al., will not be held in person. If a party wishes to be considered for membership on any official committee that is appointed in the Debtors' cases, it should complete a Questionnaire Form and return it to the Office of the United States Trustee no later than 4:00 p.m. (Central Standard Time), May 4, 2020 by email to erin.schmidt2@usdoj.gov and elizabeth.a.young@usdoj.gov. A representative from the U.S. Trustee's Office will contact creditors submitting a questionnaire to schedule telephonic interviews. Questions should be sent to Erin Schmidt or Elizabeth Young using the email addresses listed. About Diamondback Industries Diamondback Industries -- https://diamondbackindustries.com/ -- is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. On April 21, 2020, Diamondback Industries, Inc., and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 20-41504). The Hon. Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. The Debtors tapped Haynes and Boone, LLP as counsel; and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ DIJ CORP: Has Approval on Interim Cash Collateral Use Until May 12 ------------------------------------------------------------------ Judge Donald Cassling of the U.S. Bankruptcy Court for the Northern District of Illinois authorized DIJ Corp. to use cash collateral on an interim basis. The Debtor may use cash collateral until May 12, 2020 at 10:00 a.m. at which time a further hearing on the use of cash collateral will take place. Commercial Credit Group Inc. claims a valid lien upon the assets of the Debtor, and holds a security interest in all the assets of the Debtor by way of a lien duly filed of which the amount of $765,072.59 is still due and owing. As adequate protection, CCG is granted post-petition liens against the same types of property of the Debtor, to the same validity, extent and priority, as existed as of the Petition Date. In addition, the Debtor will remit monthly postpetition payments to CCG in the monthly amount of $31,564. Pearl Delta Funding, LLC and Funding Metrics LLC d/b/a Lendini also claim a valid lien upon the assets of the Debtor. They will be secured by a lien to the same extent, priority and validity as existed prior to the Petition date. Pearl Delta and Lendini will receive a security interest in and replacement lien upon all of the Debtor's now existing or hereafter acquired property, which replacement lien will be the same lien as existed prepetition. About DIJ Corp. DIJ Corp. is a privately held company in the trucking business. The company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 20-06393) on March 6, 2020. The Petition was signed by Justinas Slavinskas, president. The case is assigned to Judge Donald R. Cassling. The Debtor is represented by Saulius Modestas, Esq. at MODESTAS LAW OFFICES, P.C. At the time of filing, the Debtor was estimated to have $1 million to $10 million in assets and $1 million to $10 million in liabilities. DOUCE FRANCE: Seeks to Hire Lucove, Say & Co as Accountant ---------------------------------------------------------- Douce France seeks authority from the U.S. Bankruptcy Court for the Northern District of California to employ Lucove, Say & Co., as its accountant. The firm will assist Debtor in the preparation and filing of tax returns and reports, analyze financial statements, and review and supervise accounting records. The Debtor has agreed to pay Lucove a $2,000 post-petition retainer. The firm's hourly rates are as follows: Partner $300 Staff $150 Lucove represents no interest adverse to the Debtor or the estate in the matters upon which it is to be engaged, according to court filings. The accountant can be reached through: Richard Say, CPA Lucove Say & Co. 23901 Calabasas Rd # 2085 Calabasas, CA 91302 Phone: +1 818-224-4411 About Douce France Douce France sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30095) on Jan. 29, 2020, listing under $1 million on both assets and liabilities. Steven R. Fox, Esq. at The Fox Law Corporation, Inc. is Debtor's legal counsel. EDISON PRICE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Edison Price Lighting Inc. 214 Mamaroneck Ave White Plains, NY 10601-5307 Business Description: Located in Long Island City, NY, Edison Price Lighting Inc. -- https://www.epl.com/ -- designs and manufactures architectural lighting fixtures. The Company's 60,000-square-foot facility includes its office, full-scale factory, testing lab, and the Edison Price Lighting Gallery. Chapter 11 Petition Date: May 1, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-22614 Debtor's Counsel: H. Bruce Bronson, Esq. BRONSON LAW OFFICE, P.C. 480 Mamaroneck Ave Harrison, NY 10528-1621 Tel: (877) 385-7793 Email: hbbronson@bronsonlaw.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Emma Price, president. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/w7TWvL EIGHTY-EIGHT HOMES: Case Summary & 5 Unsecured Creditors -------------------------------------------------------- Debtor: Eighty-Eight Homes LLC 2186 Paseo del Oro San Jose, CA 95124-2046 Business Description: Eighty-Eight Homes LLC is engaged in activities related to real estate. The company owns in fee simple a property located at 808 S Main St Milpitas, CA 95035, having a current value of $8.5 million. Chapter 11 Petition Date: April 30, 2020 Court: United States Bankruptcy Court Northern District of California Case No.: 20-50712 Judge: Hon. Stephen L. Johnson Debtor's Counsel: Lars Fuller, Esq. THE FULLER LAW FIRM, PC 60 N Keeble Ave San Jose, CA 95126-2723 Tel: 408-295-5595 E-mail: lars.fullerlaw@gmail.com Total Assets: $8,645,000 Total Liabilities: $10,684,110 The petition was signed by Mary Ly, managing member. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/7fVWZy EKSO BIONICS: Lowers Net Loss to $2.5 Million in First Quarter -------------------------------------------------------------- Ekso Bionics Holdings, Inc. reported a net loss of $2.53 million on $1.47 million of revenue for the three months ended March 31, 2020, compared to a net loss of $6.55 million on $3.62 million of revenue for the three months ended March 31, 2019. Revenue in the first quarter of 2020 included approximately $1.2 million in EksoHealth revenue, compared to $2.8 million in the same period in 2019, and approximately $0.3 million in EksoWorks sales, compared to $0.8 million in the same period in 2019. The decline in revenue was due to a decrease in volume of medical device sales driven by the impact of COVID-19, as customers shifted their priorities to prepare for and manage their business during the pandemic. The pandemic has also caused many of Ekso's customers to delay orders, which are typically booked in the last few weeks of a quarter. Gross profit for the quarter ended March 31, 2020 was $0.6 million, compared to $1.6 million in the same period in 2019, representing a gross margin of approximately 43% in the first quarter of 2020, compared to a gross margin for the same period in 2019 of 44%. The decrease in gross profit is primarily attributed to lower volume of medical device sales. Sales and marketing expenses for the quarter ended March 31, 2020 were $2.5 million, a decrease of $0.3 million, or approximately 10%, compared to the same period in 2019. The decrease was primarily due to lower general marketing and trade show expenses and the absence of clinical trials expense due to the completion of our main clinical trial in 2019. Research and development expenses for the quarter ended March 31, 2020 were $0.7 million, compared to $1.4 million for the same period in 2019, a decrease of $0.7 million, or approximately 49%. The decrease was primarily due to lower patent and licensing costs. General and administrative expenses for the quarter ended March 31, 2020 were $2.2 million, compared to $2.3 million for the same period in 2019, a decrease of $0.1 million, or approximately 6%. Gain on warrant liabilities for the quarter ended March 31, 2020 was $2.5 million due to the revaluation of warrants issued in 2015 and 2019, compared to a $1.1 million loss associated with the revaluation of warrants issued in 2015 for the same period in 2019. As of March 31, 2020, the Company had $16.94 million in total assets, $11.72 million in total liabilities, and $5.23 in total stockholders' equity. Cash on hand at March 31, 2020 was $8.5 million, compared to $10.9 million at December 31, 2019. For the quarter ended March 31, 2020, the Company used $1.7 million of cash in operations, compared to $5.2 million for the same period in 2019. "The COVID-19 pandemic has affected inpatient rehabilitation facilities as they temporarily shifted priorities and responses to pandemic-related medical equipment. We are, however, encouraged that the majority of our customers have indicated that they still plan to place orders for our exoskeleton products in the future, which gives us optimism for our longer-term prospects. To align our expenses with the current business environment, we took measures to adjust our cost structure, which included furloughing a portion of our workforce. Despite these unprecedented challenges, we continue to regularly engage with our current and prospective customers through video conferencing, virtual training events and online education demos to offer our support and showcase the value of our Ekso devices. Although market uncertainties related to the pandemic make it difficult for us to project the full impact on our business and customers, we believe that we are well-positioned to serve our customers when business conditions begin to normalize," said Jack Peurach, president and chief executive officer of Ekso Bionics. As of March 31, 2020, the Company had an accumulated deficit of $185,812,000. Largely as a result of significant research and development activities related to the development of the Company's advanced technology and commercialization of such technology into its medical device business, the Company has incurred significant operating losses and negative cash flows from operations since inception. In the three months ended March 31, 2020, the Company used $1,722,000 of cash in its operations. Note payable, net, borrowings under the Company's term loan agreement have a requirement of minimum cash on hand equivalent to three months of cash burn. As of March 31, 2020, the most recent determination date of this restriction, $3,565,000 of cash must remain as restricted, with such amounts to be re-computed at each month end period. After considering cash restrictions, effective unrestricted cash as of March 31, 2020 is estimated to be $4,951,000. Subsequent to March 31, 2020, the Company entered into an amendment to its term loan agreement, which reduces the minimum liquidity covenant to the current outstanding principal balance. The Company said that based on the current forecast, its cash on hand will not be sufficient to satisfy the Company's operations for the next twelve months from the date of issuance of these condensed consolidated financial statements, which raises substantial doubt about the Company's ability to continue as a going concern. On Sept. 16, 2019, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC informing the Company that because the closing bid price for the Company's common stock listed on the Nasdaq Capital Market was below $1.00 per share for 30 consecutive business days, the Company does not meet the minimum closing bid price requirement for continued listing on the Nasdaq Capital Market. On March 24, 2020, the Company effected a 1-for-15 reverse stock split of the Company's common stock in order to raise the per share trading price of its common stock above $1.00 and regain compliance with Nasdaq's listing requirements. On April 7, 2020, the Company regained compliance with the minimum bid price requirement required by the Nasdaq listing rules. Ekso Bionics said, "Based upon the Company's current cash resources, the recent rate of using cash for operations and investment, and assuming modest increases in current revenue, the Company believes that it has sufficient resources to operate in compliance with its debt covenants until the end of the fourth quarter of 2020. While the Company will require significant additional financing, the Company's actual capital requirements may vary significantly and will depend on many factors. The Company plans to continue its investments in its (i) sales initiatives to accelerate adoption of the Ekso robotic exoskeleton in the rehabilitation market, (ii) research, development and commercialization activities with respect to exoskeletons for rehabilitation, and (iii) development and commercialization of able-bodied exoskeletons for industrial use. "The Company is actively pursuing opportunities to obtain additional financing through public or private equity and/or debt financings and corporate collaborations. Sales of additional equity securities by the Company could result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. In the event that the necessary additional financing is not obtained, the Company may be required to further reduce its discretionary overhead costs substantially, including research and development, general and administrative, and sales and marketing expenses or otherwise curtail operations." A full-text copy of the Quarterly Report on Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/BKbEFd About Ekso Bionics Ekso Bionics -- http://www.eksobionics.com/-- is a developer of exoskeleton solutions that amplify human potential by supporting or enhancing strength, endurance and mobility across medical and industrial applications. Founded in 2005, the Company continues to build upon its unparalleled expertise to design some of the most cutting-edge, innovative wearable robots available on the market. Ekso Bionics is the only exoskeleton company to offer technologies that range from helping those with paralysis to stand up and walk, to enhancing human capabilities on job sites across the globe. The Company is headquartered in the Bay Area and is listed on the Nasdaq Capital Market under the symbol EKSO. Ekso Bionics reported a net loss of $12.13 million for the year ended Dec. 31, 2019, compared to a net loss of $26.99 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $21.92 million in total assets, $15.12 million in total liabilities, and $6.80 million in total stockholders' equity. OUM & CO. LLP, in San Francisco, California, the Company's auditor since 2010, issued a "going concern" qualification in its report dated Feb. 27, 2020, citing that Company has incurred significant recurring losses and negative cash flows from operations since inception and an accumulated deficit. This raises substantial doubt about the Company's ability to continue as a going concern. ENC HOLDING: S&P Alters Outlook to Negative, Affirms 'B' ICR ------------------------------------------------------------ S&P Global Ratings affirmed its 'B' issuer credit rating on ENC Holding Corp. and revised its outlook to negative from stable. The issue-level rating on ENC's secured term loan remains 'B'. "We expect challenging macroeconomic conditions over the next year to have a significant impact on ENC's revenues and cash flows. The company mainly provides intermodal drayage and truckload brokerage services, competing with much larger participants in both segments. We expect intermodal volumes to reduce significantly in 2020 from coronavirus-related business and trade disruptions, increased competition from motor carriers because of lower fuel prices, and lower consumer demand in a recessionary economic environment. We also expect the company's truckload operations to be similarly affected by lower volumes and pricing through 2020 due to lower demand, and excess capacity," S&P said. Environmental, social, and governance (ESG) factors for this credit rating change: -- Health and safety factors S&P's outlook on ENC is negative. It expects the company's credit metrics will be significantly impacted by lower intermodal and truckload volumes in 2020. Although increased economic activity and imports should improve ENC's credit metrics in 2021, the timing and degree of recovery is uncertain. "We could lower ratings if we expect ENC's debt to EBITDA to remain above 6.5x on a sustained basis. This could be a result of continued decline in intermodal and trucking volumes," S&P said. "We would revise our outlook to stable if the impact of the current economic downturn on the company's performance is less severe than we foresee, such that debt to EBITDA improves to around 5x," S&P said. ENSONO LP: S&P Alters Outlook to Stable, Affirms 'B-' ICR --------------------------------------------------------- S&P Global Ratings revised its outlook to stable from positive and affirmed all of its ratings on IT services provider Ensono L.P., including the 'B-' issuer credit rating. Despite lower leverage than other 'B-' peers, Ensono's cash flow has not been robust due to its high cash requirements for growth. Ensono ended 2019 with S&P Global Ratings' adjusted leverage at 6.9x, which compares favorably to many 'B-' rated technology companies with leverage greater than 7.5x. Ensono's 2019 leverage has improved from its 2018 leverage of 7.5x after its acquisition of Wipro Ltd.'s hosted data center services business (DCS). "We expect leverage to continue improving to the high 5x in 2020 as the company implements contracts signed in 2019 and early 2020. However, we believe the earnings improvement will not materially improve cash flow prospects this year. Ensono has very high cash needs to support its business growth. These cash requirements include capital expenditures, capital lease payments, and software license liability payments. We estimate that Ensono's annual free cash flow has to improve to more than $60 million to offset its growth capex and other growth requirements. We believe the company will rely on its $60 million revolving credit facility in 2020 if it cannot refinance its capital leases," S&P said. The stable outlook reflects S&P's view that cash flow will remain relatively low over the next few years after capital expenditures, capital lease payments, and software license payments, but the rating agency expects the company to maintain sufficient liquidity over the next 12 months. S&P expects leverage to be in the high-5x by the end of 2020, from the mid-6x in 2019. S&P does not expect large revenue declines to occur because of the weakening macroeconomic forecast. Ensono's contracts are largely re-occurring and are important for clients to maintain their existing IT infrastructures. "We could lower the rating if the company's liquidity is not sufficient to meet debt service and other contractual commitments as demonstrated by FOCF remaining negative. Higher mandatory payments, inability to refinance large capital lease payments, or declining cash flow from operations could lead to a tighter liquidity position and lead us to believe the capital structure is unsustainable. A downgrade could also occur because elevated customer churn leads to sustained revenue declines, indicative of a weakening competitive position," S&P said. "We could raise the rating if Ensono reliably generates cash flow after debt service and other mandatory payments amounting to at least 5% of debt on a sustained basis, while leverage remains less than 6.5x. This could occur if the company continues to grow in the mid- to high-single-digit percentage range with margin expansion toward the mid-20% area," S&P said. FANNIE MAE: Lowers Net Income to $461 Million in 1st Quarter ------------------------------------------------------------ Federal National Mortgage Association (Fannie Mae) reported net income of $461 million on total interest income of $29.42 billion for the three months ended March 31, 2020, compared to net income of $2.40 billion on total net interest income of $30.64 billion for the three months ended March 31, 2019. As of March 31, 2020, the Company had $3.60 trillion in total assets, $3.58 trillion in total liabilities, and $13.94 billion in total stockholders' equity. On March 11, 2020, the World Health Organization characterized COVID-19, a new respiratory disease caused by a novel coronavirus, as a pandemic, and on March 13, 2020, the COVID-19 outbreak in the United States was declared a national emergency. The COVID-19 outbreak in the United States has expanded in recent weeks, and has resulted in stay-at-home orders, school closures, and widespread business shutdowns. The COVID-19 outbreak had a significant impact on Fannie Mae's business and financial results in the first quarter of 2020, and the company expects that it will continue to do so. Fannie Mae said it is providing substantial liquidity to lenders during the COVID-19 national emergency and fulfilling Fannie Mae's mission to stabilize the housing finance market and provide liquidity, support, and access to affordable mortgage financing in all U.S. markets in all economic cycles. Fannie Mae is also providing significant economic relief to borrowers impacted by COVID-19 through its forbearance program. The company increased its allowance for loan losses to reflect the losses it currently expects to incur, including $4.1 billion as a result of the economic disruption caused by the COVID-19 outbreak, which are reflected in its $2.7 billion of credit-related expenses for the quarter. Fannie Mae estimates that approximately 7% of loans in its single-family guaranty book of business were in a forbearance plan as of April 30, 2020. Fannie Mae's estimate is based on preliminary reporting by servicers. The company expects the number of loans in forbearance plans will continue to increase. Fannie Mae expects the impact of the COVID-19 national emergency to continue to negatively affect its financial results and contribute to lower net income in 2020 than in 2019. Due to disruptions in the market and economic uncertainty, the company does not anticipate engaging in back-end credit-risk transfer transactions in the near term. "Fannie Mae is committed to fulfilling its vital role in helping our customers, our servicers, and the market as a whole manage through this period of uncertainty. We recognize that more work lies ahead to help borrowers, renters, and the housing market recover. I want to give special thanks to the people of Fannie Mae, who have stepped up to their mission with characteristic grit and humility, and with their rock-solid commitment to provide a sound foundation for our country's housing market," Hugh R. Frater, chief executive officer, said. A full-text copy of the Quarterly Report on Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/rOItLY About Fannie Mae and Freddie Mac Federal National Mortgage Association (OTCQB: FNMA), commonly known as Fannie Mae -- http://www.FannieMae.com-- is a government-sponsored enterprise (GSE) that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. The Company partners with lenders to create housing opportunities for families across the country. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency ("FHFA") acting as conservator, since Sept. 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since provided for the exercise of certain authorities by the Company's Board of Directors. The Company's directors do not have any fiduciary duties to any person or entity except to the conservator and, accordingly, are not obligated to consider the interests of the company, the holders of the Company's equity or debt securities, or the holders of Fannie Mae MBS unless specifically directed to do so by the conservator. A brother organization of Fannie Mae is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac Freddie Mac (OTCBB: FMCC) -- http://www.FreddieMac.com-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. FAT BRANDS: DBRS Puts B Rating on Class B-2 Notes Under Review -------------------------------------------------------------- DBRS, Inc. placed the ratings of the following two classes of securities issued by FAT Brands Royalty I, LLC Under Review with Negative Implications: -- Series 2020-1, Class A-2 Notes rated BB (sf) -- Series 2020-1, Class B-2 Notes rated B (sf) Due to the widespread shutdown of economic activity throughout the U.S. due to the Coronavirus Disease (COVID-19) pandemic, significant stress on the whole-business sector is expected to continue during upcoming months. Consequently, DBRS Morningstar expects the performance of certain whole-business securitization transactions to be negatively affected. The ultimate severity and length of revenue decline is still uncertain at this point. FAT Brands Royalty I, LLC closed in March 2020 and no trustee reports on transaction performance have yet to be published. The rating actions by DBRS Morningstar are based on the following analytical considerations: (1) Restaurant businesses including that of FAT Brands, Inc. and their eight franchised chains are especially vulnerable to the impact from the coronavirus outbreak as a result of sharply lower or nonexistent consumer foot traffic, supply chain disruptions, and the possibility of employee absences. Stay-at-home measures and closures of nonessential businesses enacted by government authorities throughout the U.S. have either shutdown or drastically curtailed the operations of restaurants, which could affect FAT Brand's franchisees' financial condition and ability to make payment obligations to FAT Brands Royalty I, LLC. (2) The information about the extent of impact of coronavirus on FAT Brands, Inc.'s restaurants to date, which was shared with DBRS Morningstar by the company. (3) DBRS Morningstar's assessment as to how collateral performance could deteriorate due to macroeconomic stresses brought about by the coronavirus pandemic. This assessment was guided by DBRS Morningstar's set of macroeconomic scenarios for select economies related to the coronavirus pandemic that can be found in the publication titled "Global Macroeconomic Scenarios: Implications for Credit Ratings," published on April 16, 2020. (4) Transaction stresses were applied consistent with the Moderate Scenario for the United States whereby it is anticipated the coronavirus will begin to be contained during Q2 2020, resulting in a gradual relaxation of stay-at-home measures and nonessential business closures, allowing a gradual economic recovery to begin starting in Q3 2020. As a result, the applicable stresses to the FAT Brands Royalty I, LLC transaction include a sharp decline in revenues over the next six months, followed by a gradual but limited improvement in revenues over 12 months to simulate a significant decline in consumer demand and spike in unemployment in a short timeframe consistent with the gross domestic product and unemployment estimates in the Moderate Scenario. These stresses result in breakeven revenue decline thresholds the transaction can sustain for the remainder of the transaction's life that are marginally less than those at deal closing. At the same time, how quickly customers resume dining in these establishments remains uncertain, possibly even after the immediate period when state and local guidelines on quarantine and social distancing end. (5) A potential material impact of the U.S. government intervention on the ability of many small businesses to survive through the shutdown in the short term, until the economy starts to re-open. Signed into law on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act included a $349 billion appropriation for a significant expansion of guaranteed lending under Section 7(a) of the Small Business Act through a new Paycheck Protection Program (PPP). Eligible businesses began applying on April 3, 2020, and the entire amount has already been allocated by the lenders. While exact impact of these efforts by the Government remains uncertain, they are expected to benefit franchise businesses and soften the impact of the coronavirus by allowing companies to keep employees to be able to restart operations faster and more seamlessly and to use other available liquidity to support non-payroll business needs. The company's franchise brands are listed in the Small Business Administration's Franchise Directory which should support their eligibility for this government assistance. (6) Some possible mitigation to revenue decline as FAT Brands, Inc.'s various franchise restaurants offer and enhance their pick-up and delivery services given their relationships with several of the major delivery aggregators, including Grubhub, Uber Eats, and Postmates, among others. When a rating is placed Under Review with Negative Implications, DBRS Morningstar seeks to complete its assessment and remove the rating from this status as soon as appropriate. Upon the resolution of the Under Review status, DBRS Morningstar may confirm or downgrade the ratings on the affected classes. FIRST QUANTUM: Fitch Lowers LongTerm IDR to B-, Outlook Stable -------------------------------------------------------------- Fitch Ratings has downgraded Canada-based First Quantum Minerals Ltd.'s Long-Term Issuer Default Rating and senior unsecured rating to 'B-' from 'B'. The Outlook on Long-Term IDR is Stable. The downgrade reflects its expectation of a further delay in deleveraging with FQM's funds from operations gross leverage remaining above its previous negative guideline of 5x over the next two years. This is due to a drop in copper prices in 2020 driven by the coronavirus pandemic and despite a material reduction in capex following a prolonged period of large investments in Cobre Panama. While the full impact of coronavirus remains uncertain, Fitch assumes a limited impact on FQM's operations from the temporary suspension of operations in Panama (BBB/Negative) and forecast a gradual improvement in credit metrics from 2021. It will be driven by an expected gradual rebound of copper prices and moderate capex, which supports the Stable Outlook. The rating is underpinned by an enhanced business profile after FQM commissioned its transformative project in Panama, which will add over 50% to copper production in the medium-term, improve its cost position and reduce its exposure to the operating environment in Zambia (CC). KEY RATING DRIVERS Cobre Panama Ramping Up: The large greenfield project Cobre Panama (90% ownership), with a total capex of USD6.77 billion and an annual design throughput capacity of 85 million tonnes of ore per annum, expanding to 100 million tonnes throughput in 2023, commenced commissioning in February 2019 and reached commercial production in September 2019. Output was in line with guidance at 147,480 tonnes, including 79,776 tonnes commercial production. It generated about USD200 million EBITDA before capitalisation of pre-commercial revenue. The ramp-up is proceeding as planned with production guidance for 2020 at 285,000-310,000 tonnes, adding 50% to copper production at existing assets. Leverage above Negative Guideline: Fitch forecasts FFO gross leverage to remain high at over 6x in 2020 and over 5x in 2021, exceeding its previous negative guideline of 5x for the 'B' rating. Fitch expects 2020 EBITDA to increase to USD1.9 billion on a 30% rise in copper output as Cobre Panama ramps up and due to over a USD200 million gain from hedges. Fitch also expects capex to almost halve versus previous year as expansionary capex will be limited to core projects. This, with maintenance capex of around USD250 million, should result in marginally positive free cash flow in 2020. Debt Reduction Expected: In 2021-2022 Fitch expects that earnings will incrementally grow and FCF will increase to about USD300 million-USD550 million per annum on moderated capex and continuous rise in production in Panama. Fitch forecasts that FQM will be able to reduce gross debt by almost USD1 billion by end-2022 which will support deleveraging. Management's public commitment is a reduction in net debt/EBITDA towards 2x. Coronavirus Impacts Production: Since 7 April Cobre Panama was placed into care and maintenance due to quarantine conditions in the country, although port and power plant continue operations to supply electrical power in the grid. The timing of resumption of operations is uncertain and is being negotiated with the government. Temporary care and maintenance will cost USD4 million-USD6 million per week, and production guidance will be revised. Final output figures will depend on specific copper grades. Production at Las Cruces recently resumed after the lockdown. In its forecasts, Fitch assumed a limited impact on FQM's operations. Copper Shipping Redirected: Operations in Zambia are not disrupted because total lockdown measures were not implemented in the country. However, lockdown in neighboring states affects copper logistics, which were previously shipped through South African port Durban, are now being redirected through other countries. Copper under Pressure: Considerably lower economic activity due to lockdowns across the globe is reducing commodity consumption. Fitch expects global GDP to contract 3.9% in 2020 and global copper demand to fall 6% yoy. Although production disruptions in the main copper-producing regions will remove significant volumes from the market, Fitch still expects meaningful copper oversupply, which is reflected in lower copper prices than previously anticipated. Nevertheless, FQM has reported no slowdown in sales to China. Country Ceiling Revisited: After a successful start to Cobre Panama, earnings will be more evenly spread between geographies. FQM derived over 70% of earnings from its operations in Zambia. With Cobre Panama on-stream, contribution from Panama will rise towards 60% in 2023 when full capacity is reached, from 40% in 2020. Fitch therefore now applies a multiple-countries approach to determine the applicable Country Ceiling. EBITDA from Panama more than sufficiently covers FQM's cash interest expense of USD550 million-USD600million. As a result, the applicable Country Ceiling is Panama's 'A'. Challenging Environment in Zambia: In 2019 Zambia increased royalty rates for copper by 1.5% and introduced gold export levy, with a total effect on FQM's earnings of USD40 million. The government had also planned to replace VAT with a non-refundable sales tax, which was later abandoned, although most of the VAT, or over USD100 million for FQM has become non-deductible. These developments highlight the uncertainty facing companies in Zambia when committing long-term capital, and add to operational challenges, such as coordinating production schedules with downtime of power supply, or regular disputes with local partners and government bodies over contract terms or tax calculations. Mid-Point Cost Position: CRU estimates that FQM's mining operations are, on average, close to the mid-point of the global business cost curve. CRU expects that production at Cobre Panama will lower FQM's cost position over time. Even reasonable growth assumptions for electric vehicles are forecast to create an increase in demand for copper and a rise in prices (as indicated by its copper price assumptions). As a result, increasing production and improved cost position should support cash flow generation in the medium term. Medium-Term Horizon for Large Projects: FQM continues to undertake advanced-stage exploration for copper deposits at Haquira in Peru and Taca Taca in Argentina, both of which require substantial capex. However, environmental, social and feasibility studies will take time to complete and a final investment decision for both projects is still a few years away. Management has committed, upon completion of Cobre Panama, prioritizing deleveraging (with a target of net debt/EBITDA of 2x) over further expansion. Fitch does not factor the above projects into its rating case. DERIVATION SUMMARY FQM is focused on copper and ranks among the top 10 global producers. It is smaller and less diversified than its major peers, Freeport-McMoRan Inc. (BB+/Stable) and Southern Copper Corporation (SCC, BBB+/Stable). FQM has a global mid-ranking cost position for business costs in comparison to SCC's first quartile position. Over 70% of EBITDA came from Zambia in 2019, which Fitch views as a challenging operating environment for mining companies. However, its country exposure improves as production in Panama increases, with earnings contribution from Zambia declining towards 40% in 2020 and lower over the longer term. FQM's financial profile is weaker than that of peers. FFO adjusted gross leverage was 7.5x in 2019 due to high capex for Cobre Panama and the negative impact of fiscal tightening in Zambia. Fitch forecasts that gross leverage will remain elevated in 2020-2021. Comparing with Hudbay Minerals Inc (B+/Stable), FQM is larger in scale, but has higher cost position on the cost curve and weaker credit metrics. KEY ASSUMPTIONS - Fitch's Key Assumptions Within its Rating Case for the Issuer - Copper price (USD/tonne) at 5,300 in 2020, 5,800 in 2021, 6,200 in 2022, 6,400 in 2023 and 7,000 long-term; gold price (USD/oz) at 1,400 in 2020, 1,300 in 2021 and flat at 1,200 thereafter; - Production in 2020 slightly below management guidance due to care and maintenance measures at Cobre Panama (five weeks care and maintenance assumed); thereafter production in line with management guidance with output at Cobre Panama gradually ramping up to above 300kt as planned; - Capex reduction as non-core and expansion projects are put on hold, average annual capex in the next three years at USD700 million- USD750 million; - Increasing dividend pay-out from 2022 once FFO adjusted gross leverage has decreased to well below 5x; - No changes in the tax regime in Zambia from the current state KEY RECOVERY RATING ASSUMPTIONS - The recovery analysis assumes that FQM would be considered a going-concern in bankruptcy and that it would be reorganized rather than liquidated. - Fitch has applied a discount of about 20% to a forecast 2020 EBITDA of around USD1,863 million. - A 5.0x multiple was used to calculate the post-reorganization enterprise value (EV), which factors in peer comparison and FQM's exposure, albeit decreasing, to Zambia. - The senior secured revolving credit facility (RCF) is assumed to be fully drawn. - Secured debt reflected in the waterfall was USD2.7 billion of a combined RCF and term-loan bank facility, and USD1.3 billion of a streaming agreement with Franco-Nevada related to the Cobre Panama project. - Senior unsecured debt reflected in the waterfall was USD6.2 billion of bonds (including a USD450 million tap issue that was used to refinance RCF), a USD341 million Kalumbila facility and USD200 million of deferred acquisition consideration related to a 10% stake acquisition in Cobre Panama from LS-Nikko Copper Inc. - After deduction of 10% for administrative claims, its waterfall analysis generated a ranked recovery in the 'RR4' band, indicating a 'B-' instrument rating. The waterfall analysis output percentage on current metrics and assumptions was 43%. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful ramp-up of the Cobre Panama project and/or improvement in market conditions leading to FFO gross leverage below 5.0x on a sustained basis - Return to sustainable positive FCF generation together with reduction of gross debt Developments That May, Individually or Collectively, Lead to Negative Rating Action/Downgrade - FFO gross leverage sustained above 6.5x - Operational issues in Panama or Zambia further delaying the expected increase in cash flow generation and improvement in credit metrics - Measures taken by the governments of Zambia or Panama that adversely affect cash flow generation or the operating environment - Weakening of the liquidity profile BEST/WORST CASE RATING SCENARIO International scale credit 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: At December 31, 2019 FQM's unrestricted cash balances were USD523 million and the company had available USD250 million of committed undrawn revolving credit facilities. In January 2020 FQM issued USD500 million 2023 notes and USD250 million 2025 notes (both issued at a premium) to redeem its USD300 million 2021 notes and part of its RCF. As a result of refinancing, its available revolver increased to USD700 million and was fully drawn, and its maturity was extended into December 2021. This is against short-term debt of USD838 million. In combination with Fitch's forecast marginally positive FCF in 2020 FQM has sufficient liquidity for the year. Liquidity in 2021 will depend on FQM's ability to refinance its 2022 bonds, which will extend the maturity of its RCF and Kalumbila facility into December 2022. Fitch forecasts that positive FCF will be around USD300 million in 2021. SUMMARY OF FINANCIAL ADJUSTMENTS - A USD1.32 billion prepayment from Franco-Nevada was classified as debt and added to the total debt amount in 2018; - A USD1.24 billion interest-bearing shareholder loan from KPMC was excluded from debt; - A USD615 million bank overdraft was offset against USD1,138 million cash and cash equivalents, resulting in a net cash balance of USD523 million; - USD27 million of cash was restricted at December 2019 to secure the letters of credit issued on behalf of the company, reclassified from long-term assets to 'restricted cash' balance-sheet line; - A USD200 million deferred purchase price relating to the acquisition of a 50% interest in KPMC from LS-Nikko Copper was treated as debt by Fitch; total consideration was USD664 million, of which USD464 million was paid in 2017-2019. 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 The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). FOODFIRST GLOBAL: To Cut Footprint Amid Closures Due to Pandemic ---------------------------------------------------------------- WPXI.com News reports that FoodFirst Global Restaurants, the parent company of Bravo Fresh Italian and Brio Italian Mediterranean restaurants, filed Chapter 11 bankruptcy protection amid closures forced by the COVID-19 pandemic. FoodFirst Global took the company private in 2018 with the aim of rebuilding the company. In January 2020, it hired Steven Layt as FoodFirst's chief executive officer to help overturn its declining sales, WHIO said. "The improvement process was radically altered due to the current international health crisis...creating massive restaurant closings and employee losses throughout the country via state ordered shelter-in-place requirements, which exacerbates the need to reduce the Restaurants' footprint," court records read, according to WPXI. About FoodFirst Global Restaurants FoodFirst Global Restaurants, Inc., is the parent company for two of America's Italian restaurant brands: BRIO Tuscan Grille and BRAVO Cucina Italiana. It 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. FoodFirst Global Restaurants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-02159) on April 10, 2020. At the time of the filing, the Debtors disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Karen Jennemann oversees the case. Shuker & Dorris, P.A. is Debtors' legal counsel. FORESIGHT ENERGY: Fitch Withdraws 'D' LongTerm IDR on Bankruptcy ---------------------------------------------------------------- Fitch Ratings has withdrawn the following Foresight Energy LP and Foresight Energy LLC ratings: 'D' Long-Term Issuer Default Ratings, 'C'/'RR5' rating on Foresight Energy LLC's first lien senior secured facilities, and Foresight Energy LLC's 'C'/'RR6' rating on the second lien notes. The ratings were withdrawn with the following reason Bankruptcy Of The Rated Entity, Debt Restructuring or Issue/Tranche Default KEY RATING DRIVERS Fitch has withdrawn the ratings as the entities have entered into bankruptcy. Accordingly, Fitch will no longer provide ratings or analytical coverage for Foresight Energy LP and Foresight Energy LLC. RATING SENSITIVITIES Rating sensitivities do not apply as the ratings are being withdrawn. BEST/WORST CASE RATING SCENARIO International scale credit 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. FREDDIE MAC: Reports First Quarter Net Income of $173 Million ------------------------------------------------------------- Federal National Mortgage Association reported net income of $173 million on $2.42 billion of net revenues for the three months ended March 31, 2020, compared to net income of $1.41 billion on $2.91 billion of net revenues for the three months ended March 31, 2019. "Freddie Mac's first quarter was marked by unprecedented challenges to our country, our business and our markets - and I am very proud of how we have responded. We are offering relief to millions of homeowners and renters, supporting our customers in new and vital ways, and serving as a stabilizing force for the housing finance system. Through these efforts, we are continuing to fully serve our mission," said David M. Brickman, chief executive officer. As of March 31, 2020, the Company had $2.24 trillion in total assets, $2.23 trillion in total liabilities, and $9.50 billion in total equity. COVID-19 Pandemic Response Efforts * In March 2020, working with the Federal Housing Finance Agency (FHFA), the company took steps to provide relief to homeowners, renters, and multifamily property owners with Freddie Mac-backed loans, including mortgage forbearance and eviction protection. * Also working with FHFA, the company introduced temporary measures to provide sellers with clarity and flexibility to help them continue to support borrowers. Ensuring Business Continuity Freddie Mac said, "We have business continuity plans in place to ensure we are fulfilling our mission while protecting our staff and community. We have activated our Crisis Management Team (CMT), consisting of representatives from across the company. The CMT and senior leaders are meeting regularly, closely monitoring the situation, and providing frequent updates to our Board of Directors and staff. "We have taken several actions in line with guidance from national and state governments and public health authorities to ensure business continuity, including requiring more than 95% of our staff to work remotely and taking specific actions to protect and support essential staff working in our offices, such as social distancing, face coverings, and frequent deep cleanings. "In addition to these actions, we have been engaging with FHFA and third parties to ensure continuity of critical business activities that will allow us to serve our mission and support the U.S. housing finance system during this pandemic. "We have also taken actions to support our staff and community, including providing additional paid sick leave to our staff to care for themselves or family members due to COVID-19 related illness, partnering with our vendors to ensure workers dedicated to Freddie Mac continue to receive pay and benefits, and launching virtual volunteering opportunities for staff to support their communities. "We have taken actions to help make sure homeowners with Freddie Mac-owned mortgages who are directly or indirectly affected by COVID-19 are able to stay in their homes during this challenging time. In March 2020, FHFA directed Freddie Mac and Fannie Mae (the Enterprises) to suspend foreclosures and evictions for homeowners with an Enterprise-backed single-family mortgage for at least 60 days due to the COVID-19 pandemic. The suspension of foreclosures and evictions will remain in effect until May 17, 2020, and if necessary, at the direction of FHFA, may be extended beyond that date." A full-text copy of the Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission is available for free at: https://is.gd/vnkWte About Freddie Mac Federal National Mortgage Association (Freddie Mac) is a GSE chartered by Congress in 1970. The Company's public mission is to provide liquidity, stability, and affordability to the U.S. housing market. Freddie Mac does this primarily by purchasing residential mortgage loans originated by lenders. In most instances, it packages these loans into guaranteed mortgage-related securities, which are sold in the global capital markets and transfer interest-rate and liquidity risks to third-party investors. In addition, the Company transfers mortgage credit risk exposure to third-party investors through its credit risk transfer programs, which include securities- and insurance-based offerings. The Company also invests in mortgage loans and mortgage-related securities. The Company does not originate loans or lend money directly to mortgage borrowers. Freddie Mac conducts its business subject to the direction of Federal Housing Finance Agency (FHFA) as its conservator. The Conservator has provided authority to the Board of Directors to oversee management's conduct of the Company's business operations so it can operate in the ordinary course. The directors serve on behalf of, exercise authority as provided by, and owe their fiduciary duties of care and loyalty to the Conservator. The Conservator retains the authority to withdraw or revise the authority it has provided at any time. The Conservator also retains certain significant authorities for itself, and has not provided them to the Board. The Conservator continues to provide strategic direction for the company and directs the efforts of the Board and management to implement its strategy. Many management decisions are subject to review and/or approval by FHFA and management frequently receives direction from FHFA on various matters involving day-to-day operations. FTS INTERNATIONAL: Incurs $11.7 Million Net Loss in First Quarter ----------------------------------------------------------------- FTS International, Inc. reported a net loss of $11.7 million on $151.5 million of total revenue for the three months ended March 31, 2020, compared to a net loss of $55 million on $222.5 million of total revenue for the three months ended March 31, 2019. Michael Doss, chief executive officer, commented "We were pleased with our first quarter results despite a significant drop-off in activity that began in late March. Most of our customers have reduced or suspended completions as a result of the sharp fall in oil prices due to the economic effects of COVID-19. Accordingly, we have taken a series of aggressive measures to reduce costs and preserve liquidity. "The COVID-19 pandemic has drastically affected the global economy and oil demand, along with the OPEC related price war related to oil supply. The consequential plummet in global oil prices has resulted in U.S. exploration and production companies announcing significant cuts in their 2020 capital expenditures, decreasing our frac activity to historic lows. "In response, we have addressed all aspects of our cost structure to ensure that we are well positioned to supply the industry with hydraulic fracturing services, which are an integral part of U.S. oil production. These actions include: * Bolstering safety procedures and emergency plans at both our district offices and customer worksites; * Reducing crews that no longer have scheduled work and related support staff; * Reducing executive salaries by over 25%, on top of a 15% reduction at the beginning of the year; * Reducing wages and salaries across the entire company; * Rolling furloughs for certain SG&A and manufacturing staff; * Suspending bonuses to eligible SG&A staff under the company's short-term incentive plan, except for the safety component; * Reducing capital expenditures and repairs to the minimum level needed to operate the limited active fleets; and * Aggressively reducing all non-labor costs and re-negotiating contractual commitments where possible." As of March 31, 2020, the Company had $616 million in total assets, $587 million in total liabilities, and $29 million in total stockholders' equity. At March 31, 2020, the Company had $199.2 million of cash and cash equivalents and $56.3 million of availability under its revolving credit facility, which resulted in a total liquidity position of $255.5 million. The Company believes that its cash and cash equivalents, any cash provided by operations, and the availability under its revolving credit facility will be sufficient to fund its operations, capital expenditures, contractual obligations, and debt maturities for at least the next 12 months. The maximum availability of credit under the credit facility is limited at any time to the lesser of $250 million or the borrowing base. The borrowing base is based on percentages of eligible accounts receivable and eligible inventory and is subject to certain reserves. As of March 31, 2020, the Company's borrowing base was $60.6 million and therefore its maximum availability under the credit facility was $60.6 million. As of March 31, 2020, there were no borrowings outstanding under the credit facility, and letters of credit totaling $4.3 million were issued, resulting in $56.3 million of availability under the credit facility. FTS said, "We continually assess alternatives to our capital structure and evaluate strategic capital initiatives which may include, but are not limited to, equity and debt financings and the modification of existing debt, including the amount of debt outstanding, the types of debt issued and the maturity dates of the debt. These alternatives, if implemented, could materially affect our capitalization, debt ratios and cash balances." Operational Update Average active fleets during the first quarter of 2020 was 16.0, down from 16.5 in the fourth quarter of 2019. During the month of March, the Company stacked 9 fleets that were released by customers, exiting the quarter with 7 active fleets. The Company completed 6,888 stages during the first quarter of 2020, or 431 stages per active fleet. This compares to 6,346 stages in the fourth quarter of 2019, or 385 stages per active fleet. Since March, low oil prices due to the COVID-19 pandemic and the Saudi-Russia price war have caused the Company's customers to substantially reduce their hydraulic fracturing activities and the prices they are willing to pay for our services. While the Company's first quarter results reflect some reduction of this activity at the end of the quarter, the Company has limited visibility for future work and currently expects to only average three to four active fleets in the second quarter. Liquidity and Capital Resources Capital expenditures were $16.4 million in the first quarter, up from $14.9 million in the fourth quarter due largely to a front loaded purchasing schedule. In March, the Company began rationalizing all capital expenditures, which it now expects to be in the range of $30 - $35 million for 2020. The Company will continue to reassess its capital expenditures to ensure they are aligned with the market outlook. At March 31, 2020, the Company had $199.2 million of cash and $434.7 million of long-term debt. Net debt, excluding unamortized discount and debt issuance costs, was $238.1 million at March 31, 2020. Additionally, at quarter end, total liquidity was $255.5 million, including $56.3 million of availability under its revolving credit facility. During the first quarter of 2020, the Company had no borrowings outstanding under its revolving credit facility. A full-text copy of the Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission is available for free at: https://is.gd/1ouqmL About FTS International Headquartered in Fort Worth, Texas, FTS International -- http://www.FTSI.com/-- is an independent hydraulic fracturing service company. Its services enhances hydrocarbon flow from oil and natural gas wells drilled by E&P companies in shale and other unconventional resource formations. On April 15, 2020, FTS received written notice from the New York Stock Exchange notifying it that, over a period of 30 consecutive trading days, the average closing price of the Company's common stock was below the minimum $1.00 per share requirement for continued listing on the NYSE under Item 802.01C of the NYSE Listed Company Manual. * * * As reported by the TCR on Jan. 14, 2020, Moody's Investors Service downgraded FTS International, Inc.'s Corporate Family Rating to Caa1 from B3. The downgrade of FTSI's rating reflects continued challenges to the operating environment, increased debt refinancing risks and bonds meaningfully below par which elevates risk of a distressed debt exchange that could be deemed a default by Moody's. As reported by the TCR on April 28, 2020, S&P Global Ratings lowered its issuer credit rating on oilfield service provider FTS International Inc. (FTSI) to 'CCC-' from 'CCC+'. The outlook is negative. S&P said the recent decline in commodity prices is expected to coincide with a significant fall in U.S. E&P drilling activity. "Furthermore, we believe FTSI is consulting with financial advisers on default scenarios, a possible distressed debt exchange, or other forms of debt restructuring alternatives. In our view, these factors and current trading levels on FTSI's secured notes reflect high likelihood of restructuring in the next six months," S&P said. GEMINI HDPE: Moody's Cuts $368MM Senior Secured Term Loan to Ba3 ---------------------------------------------------------------- Moody's Investors Service downgraded the rating on Gemini HDPE, LLC's outstanding $368 million senior secured term loan to Ba3 from Ba2. The outlook was changed to negative from stable. RATINGS RATIONALE Gemini HDPE's rating downgrade to Ba3 reflects the credit deterioration of its joint venture owner/offtakers, including Sasol Financing (Pty)(NR), a direct subsidiary of Sasol Limited (Sasol, Ba2 RUR-Down) and INEOS Group Holdings S.A.'s (INEOS: Ba3 negative). Offtaker credit quality is a key driver of Gemini's credit assessment because INEOS and Sasol Financing wrap operational and market risk under its Tolling Agreements on a several but not joint basis. Additionally, INEOS is deeply involved in the project as operator, technology provider, and facility coordinator given Gemini's location within INEOS's manufacturing complex. Operational performance at the plant normalized at or above run-rate levels in 2019, a material improvement over ramp-up bumps experienced in 2018 following the initial startup in October 2017. The terms of the project's completion agreement were satisfied in August 2019, releasing INEOS and Sasol from debt guarantees during construction. Both parties continue to provide guarantees under long-term Tolling Agreements that provide a low but stable 1x debt service coverage ratio. The toll payment obligation is absolute, unconditional and not subject to abatement or set-off. Moody's expects the plant will continue to produce strong operational results in 2020 with production output above nameplate capacity. Other key credit considerations include Gemini's competitive cost position, some project finance protections, the lack of reserves including a debt service reserve, and refinancing risk with 70% of the debt expected to be outstanding at maturity. For the latter, refinancing risk is mitigated by the terms of the Tolling Agreements that extend past debt maturity and provide for sufficient payments to repay the expected refinancing amount by the maturity of the Toll Agreements in August 2029. There is minimal liquidity in the asset, which had $2 million in cash and equivalents as of March 31, 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 commodity chemical sector has been affected by the shock given its sensitivity to demand and raw materials costs. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety, as well as the associated economic impact. RATING OUTLOOK The negative outlook considers the potential for further deterioration of Gemini's offtaker/owner credit quality. It also incorporates the expectation that INEOS and Sasol Financing will abide by their contractual obligations and that the project will continue to meet budgeted production expectations. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS FACTORS THAT COULD LEAD TO AN UPGRADE Gemini HDPE's rating could be upgraded if there is an improvement in offtaker credit quality and the project maintains strong operational performance. FACTORS THAT COULD LEAD TO A DOWNGRADE Gemini HDPE's rating could be downgraded if there is additional deterioration of either Sasol or INEOS's credit quality, the key underlying contracts are challenged or violated or if the project encounters extensive operating problems. PROFILE Gemini HDPE LLC is a high-density polyethylene manufacturing plant within INEOS's Battleground Manufacturing Complex located in La Porte, Texas. The project is expected to produce approximately 1 billion pounds of HDPE per year using INEOS' licensed proprietary Innovene-S process. INEOS and Sasol each indirectly own 50% of Gemini. Until lender operating conditions are met, the project has Completion Agreements with INEOS and Sasol Financing (Pty.) Limited (Sasol Financing, not rated), an indirect subsidiary of Sasol, whereby INEOS and Sasol Financing guarantee the rated debt on a several but not on a joint basis. Separately, subsidiaries of INEOS and Sasol Financing each take 50% of the output under the Tolling Agreements, which are backed by INEOS and Sasol Financing on a several but not joint basis. GENOCEA BIOSCIENCES: Incurs $12.9 Million Net Loss in 1st Quarter ----------------------------------------------------------------- Genocea Biosciences, Inc., reported a net loss of $12.85 million for the three months ended March 31, 2020, compared to a net loss of $15.57 million for the three months ended March 31, 2019. As of March 31, 2020, the Company had $45.19 million in total assets, $32.18 million in total liabilities, and $13.01 million in total stockholders' equity. As of March 31, 2020, cash and cash equivalents were $26.5 million versus $40.1 million as of Dec. 31, 2019. Research and development expenses were $10.0 million for the quarter ended March 31, 2020, compared to $6.5 million for the same period in 2019. General and administrative were $3.4 million for the quarter ended March 31, 2020, compared to $3.0 million for the same period in 2019. Net cash used in operating activities increased $3.5 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The cash used in operations for the three months ended March 31, 2020 was primarily related to the development of the Company's preclinical and clinical candidates. Net cash used by investing activities was for the purchases of property and equipment in both periods ending March 31, 2020 and 2019, respectively. Net cash provided by financing activities decreased $12.8 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. In the three months ended March 31, 2020, the Company sold shares of common stock to LPC, for net proceeds of approximately $0.4 million. In the three months ended March 31, 2019, the Private Placement generated net proceeds of $13.8 million. Genocea said, "Our primary uses of capital are for compensation and related expenses, manufacturing costs for preclinical and clinical materials, third-party clinical trial services, laboratory and related supplies, legal and other regulatory expenses, and general overhead costs. We expect these costs will continue to be the primary operating capital requirements for the near future. "We expect that our existing cash and cash equivalents are sufficient to support our operations into the first quarter of 2021. As reflected in the consolidated financial statements, we had available cash and cash equivalents of $26.5 million at March 31, 2020. In addition, we had cash used in operating activities of $13.8 million for the three months ended March 31, 2020. These factors, combined with our forecast of cash required to fund operations for a period of at least one year from the date of issuance of these financial statements, raise substantial doubt about our ability to continue as a going concern. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products coupled with the global economic uncertainty that has arisen with the recent outbreak of the coronavirus, or referred to as COVID-19, we are unable to estimate the exact amount of our operating capital requirements. "We will need to obtain substantial additional funding in order to complete clinical trials and receive regulatory approval for GEN-009, GEN-011 and our other product candidates. To the extent that we raise additional capital through the sale of our common stock, convertible securities, or other equity securities, the ownership interests of our existing stockholders may be materially diluted and the terms of these securities could include liquidation or other preferences that could adversely affect the rights of our existing stockholders. In addition, debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, that could adversely affect our ability to conduct our business. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back, or discontinue the development of GEN-009, GEN-011 or our other product candidates, seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available, and relinquish or license, potentially on unfavorable terms, our rights to GEN-009, GEN-011 or our other product candidates that we otherwise would seek to develop or commercialize ourselves." A full-text copy of the Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/VqhVzg About Genocea Biosciences Headquartered in Cambridge, Massachusetts, Genocea -- http://www.genocea.com/-- is a biopharmaceutical company developing personalized cancer immunotherapies. The Company uses its proprietary discovery platform, ATLAS, to profile CD4+ and CD8+T cell (or cellular) immune responses to tumor antigens. Genocea reported a net loss of $38.95 million for the year ended Dec. 31, 2019, compared to a net loss of $27.81 million for the year ended Dec. 31, 2018. Ernst & Young LLP, in Boston, Massachusetts, the Company's auditor since 2009, issued a "going concern" qualification in its report dated Feb. 13, 2020 citing that the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. GETTY IMAGES: Moody's Alters Outlook on B3 CFR to Negative ---------------------------------------------------------- Moody's Investors Service has affirmed Getty Images, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating. Concurrently, Moody's affirmed the B2 ratings on the first-lien credit facilities (comprising the $80 million revolving credit facility, EUR450 million ($504.9 million US dollar equivalent) first-lien euro term loan and $1.03 billion first-lien term loan) and Caa2 rating on the $300 million senior unsecured notes. The outlook was revised to negative from positive. RATINGS RATIONALE The negative outlook reflects the significant impact that the novel coronavirus pandemic will have on Getty's operating and financial performance in 2020. The cancellation or postponement of major world events, including entertainment, live concerts and sports, combined with the expected reduction in global advertising spend and suspension of several film and video production projects will lead to a substantial, albeit temporary, deterioration in Getty's profitability and a spike in financial leverage to over 8.5x (Moody's adjusted). As the virus threat is neutralized, major events are rescheduled and advertising spend gradually rebounds at the end of 2020 and into 2021, Moody's projects leverage will decline to the 7.5x-8x area by the end of next year. The negative outlook also incorporates governance risk, specifically the likelihood that Getty's already high leverage (7.3x Moody's adjusted at December 31, 2019) will rise significantly over the next two years owing to a rapidly accreting payment-in-kind preferred equity instrument in Getty's capital structure. Moody's estimates the PIK will expand to roughly $700 million principal balance when the non-call period ends in early 2022, which if refinanced entirely with debt, could increase leverage by 2x-2.5x. The negative outlook embeds the numerous uncertainties related to the social considerations and economic impact from COVID-19 on Getty's cash flows, leverage and liquidity. The magnitude of the impact will depend on the depth and duration of the pandemic and the impact that government restrictions to curb the virus will have on consumer and corporate behavior. Getty's B3 CFR reflects the effect of COVID-19 on the company's financial performance due the inability to create a sizable volume of new imagery content since many live entertainment and sports events have been cancelled or postponed, coupled with Moody's expectation for reduced advertising and media spend from clients as projects are abandoned or rescheduled. Moody's expects the company will generate lower revenue and EBITDA this year resulting in higher financial leverage and weaker free cash flow generation. The rating also acknowledges Getty's global leadership position with one of the largest and broadest collection of visual imagery content; long-term relationships across a diversified customer base comprising news, entertainment, and sports publishing organizations; increasingly subscription-based revenue model; and highly variable cost structure that allows the company to reduce operating costs by up to 60% in the short-run. Getty's Editorial Stills segment (30.7% of 2019 revenue) creates, licenses and distributes news, entertainment and sports imagery content on an exclusive basis. Given that many live concerts, festivals and sports events have been cancelled for 2020 (e.g., Montreux Jazz Festival, iHeartRadio Music Awards, Wimbledon, NBA, NHL) or rescheduled to the second half of the year (e.g., Cannes Film Festival, Kentucky Derby, Boston Marathon) or postponed into next year (e.g., 2020 Tokyo Summer Olympics, Euro 2020 and 2020 FIFA Women's World Cup), Moody's expects this segment to exhibit significant revenue declines over the coming quarters. Notably, even after the coronavirus restrictions are lifted, the potential remains for the virus to remain active in the community until a vaccine is widely available, possibly forcing rescheduled events to be postponed a second time. Partially offsetting this is the increased news coverage and demand for content related to the pandemic, which client's source from Getty for use in broadcast and cable news, websites, digital media, online articles and other programming and media formats. This segment also retains a sizable archive of historic still images, which Getty's clients can access to meet their changing demands during the outbreak. The Creative Stills segment (53.6% of 2019 revenue) offers non-exclusive, low-priced stock imagery under several licensing models and various price points to suit every budget and end market use. Since global advertising spend is a key driver of stock imagery demand, Moody's expects this segment to decline in connection with its expectation for global ad spend contraction. While Moody's expects mid to high-single digit percentage global ad spend decline in 2020 offset by favorable, albeit subdued, digital advertising spend growth, Moody's expects a comparatively sharper decline in Creative Stills. This is due to its sizable exposure to small-to-medium sized businesses, which are more vulnerable in the current downturn and have largely stopped advertising given the closure of non-essential businesses and reduced consumption. Getty's budget-friendly iStock (Royalty Free) sub-segment serves mostly SMBs and will likely experience greater declines than the broader Creative Stills segment. Online ad campaigns, which SMBs are more inclined to use to promote products and services, are more susceptible to cancellation since they are easier to cut in the short-run. However, Moody's also expects SMB clients that previously did not have an online presence to establish new digital ad campaigns and utilize Getty's stock imagery content. Total annual subscription revenue (including Editorial subscriptions) accounts for nearly 50% of Getty's revenue, which Moody's believes will provide a cushion against client spending pullbacks. Nonetheless, Moody's expects renewal rates to fall over the coming year as clients in more challenged sectors such as SMBs and consumer discretionary businesses that are being hurt more due to the increased risk of infection (e.g., transportation, travel, hospitality and tourism) will reduce, cancel or delay their renewals. Clients with weak liquidity and based in countries or regions more severely impacted by the coronavirus will likely cancel their subscriptions. However, Getty's end market exposure to client sectors less affected by the virus will partially offset softness in more challenged sectors. They include food and beverage, telecom, healthcare, financial services, technology software, residential real estate services, insurance and in-home entertainment and media. To help offset the pullback from certain clients, Moody's expects Getty will continually update its deep stock imagery library to reflect content associated with the pandemic to meet evolving and shifting client demand. The Video segment (12.7% of 2019 revenue) maintains a library of editorial and creative as well as contemporary and archival video offerings with about 70% of the content exclusive to Getty. Video content is sourced from professional videographers, Image Partner collections and crowd-sourcing. Moody's expects this business to experience double-digit revenue declines over the next two quarters arising from the numerous production delays of theatrical films, television advertisements and programming, trade show and promotional videos, assignment shoots and other filmed entertainment content. Web-based advertisements will likely experience an increase in demand due to extended stay-at-home orders as consumers increasingly engage in online activities such as ad-supported video streaming, internet and mobile gaming, social media and e-commerce. Moody's estimates up to 60% of Getty's operating expenses are variable enabling the company to quickly reduce operating costs in the short-run as a result of natural expense reductions from decreased supplier volumes and event cancellations. Moody's fully expects the company to implement cost actions to offset revenue declines and minimize reduction in cash flows. Cost of goods sold is primarily royalties paid by Getty to its contracted photographers and suppliers. Royalties are typically 20% - 50% of the total license fee charged to customers. Getty benefits by having cost of goods as a variable expense and by keeping the cost of content creation with the third party supplier. Gross margins are relatively high, just above 70%, however margins fluctuate depending on product mix and shift towards a particular license model. SG&A costs consisting of staff costs, marketing expenses, professional fees and other operating expenses can also be curtailed with cuts in salaries and merit pay, furloughs, staff reductions, lower marketing spend, reduced digital investment and decreased Editorial Stills' expenses given the large number of event cancellations and postponements. With the global economy facing recession this year and the prospect of extended business closures, layoffs and high rates of unemployment, an erosion of consumer confidence will lead to a reduction in discretionary consumption. Given these economic realities, even if some events recommence and media spend rebounds later this year, Moody's expects demand will be weak. While Getty has relatively good geographic diversity, with roughly 55% of sales derived from North America, 33% from EMEA and 10% from Asia-Pacific (excludes indirect revenue), since the coronavirus pandemic is global, it will affect economic activity in nearly every region where the company operates. The impact to the company's financial performance will mirror the timing of the outbreak and economic shutdown in each region. Asia-Pacific and Europe will mostly impact Getty's performance in Q1 2020, while Europe and the US will chiefly impact Q2 2020, offset with Asia-Pacific returning to growth. Over the next 12-15 months, Moody's expects Getty to maintain adequate liquidity supported by weakened free cash flow generation, lower cash balances (unrestricted cash balances totaled $113 million at December 31, 2019) and access to its $80 million RCF (undrawn at December 31, 2019). Moody's projects the company will reduce capital expenditures from the historical range of $45-$50 million to around $40 million to preserve cash. Getty has $21.4 million of mandatory principal payments due in 2020, which the company should be able to fund from internal sources despite diminished free cash flow generation. Moody's will closely monitor the headroom under Getty's RCF, which contains a quarterly leverage maintenance covenant that enables access to the facility as long as the total first-lien debt to EBITDA (as defined in the bank credit agreement) does not exceed 6.5x (steps down to 6x on March 31, 2021). While the company was in compliance with a 24% cushion at December 31, 2019, headroom could decrease rapidly as a result of a substantial decline in EBITDA and/or if there is a future need to access liquidity via the insertion of incremental secured debt in the capital structure. Moody's expects the company will likely need to obtain waivers from its banks given that the covenant cushion could tighten materially over the coming quarters. Moody's estimates that the rapidly accreting payment-in-kind preferred equity instrument in Getty's capital structure will expand to roughly $700 million principal balance when the non-call period ends in early 2022. If the PIK instrument is refinanced entirely with debt, Moody's projects financial leverage could increase to the 9.5x-10.5x area. There is sufficient time over the coming two years for the company to decide whether to use equity, debt or a combination of equity and debt to refinance the PIK. However, higher-than-expected leverage and weaker cash flows this year will delay debt reduction, and a future debt refinancing of the PIK could likely lead to a ratings downgrade. ESG CONSIDERATIONS 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 stock imagery 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 Getty's credit profile, including its exposure to live events and media, publishing and broadcasting sectors, as well as to US and European economies, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Getty remains vulnerable to the outbreak's continuing 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 Getty 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 The rating outlook could be revised to stable if containment of the coronavirus results in resumption of major live events, clients' media spending improves and Moody's expects minimal impact to Getty's profitability and liquidity, with total debt to EBITDA reverting to under 7.5x (Moody's adjusted) and free cash flow to debt improving to 1.5% - 2.5% on a sustained basis. A ratings upgrade is unlikely over the near-term, especially if the coronavirus outbreak impacts the scheduling of major live events and reduces clients' consumption of Getty's visual imagery products. Over time, an upgrade could occur if the company demonstrates revenue stability in the Creative Stills unit, and exhibits continued mix shift to higher volume enterprise subscriptions and higher margin Royalty-Free products. Additionally, upward rating pressure could occur if free cash flow to debt (Moody's adjusted) improves to the low to mid-single-digit percentage range and total debt to EBITDA approaches 5.5x (Moody's adjusted). The ratings could be downgraded if operating performance tracks below Moody's expectations or if total debt to EBITDA is sustained above 7.5x (Moody's adjusted) after the coronavirus outbreak is neutralized and the global economy returns to growth. Ratings could also experience downward pressure if liquidity deteriorates such that free cash flow to debt is sustained below 1% (Moody's adjusted). SUMMARY OF ITS RATING ACTIONS Ratings Affirmed: Issuer: Getty Images, Inc. Corporate Family Rating, Affirmed at B3 Probability of Default Rating, Affirmed at B3-PD $300 Million Gtd Senior Unsecured Global Notes due 2027, Affirmed at Caa2 (LGD6) from (LGD5) Issuer: Getty Images, Inc. (Co-Borrower: Abe Investment Holdings, Inc.) $80 Million Senior Secured First-Lien Revolving Credit Facility due 2024, Affirmed at B2 (LGD3) EUR450 Million ($504.9 Million US dollar equivalent) Senior Secured First-Lien Euro Term Loan B due 2026, Affirmed at B2 (LGD3) $1,030 (outstanding amount) Million Senior Secured First-Lien Term Loan B due 2026, Affirmed at B2 (LGD3) Outlook Actions: Issuer: Getty Images, Inc. Outlook, Changed to Negative from Positive Headquartered in Seattle, WA, Getty Images, Inc. is a leading creator and distributor of still imagery, vector, video and multimedia products, as well as a recognized provider of other forms of premium digital content, including music. The company was founded in 1995 and provides stock images, music, video and other digital content through gettyimages.com and iStock.com. In September 2018, a trust representing certain Getty family members bought out The Carlyle Group's 51% majority equity stake for approximately $250 million at an enterprise value of just under $3 billion to regain 100% ownership of the company. Revenue totaled approximately $846 million for the fiscal year ended December 31, 2019. GLENN POOL: Moody's Lowers Rating on Senior Secured Notes to Caa1 ----------------------------------------------------------------- Moody's Investors Service has downgraded the senior secured notes issued by Glenn Pool Oil & Gas Trust II. The senior secured notes are backed by hydrocarbon deliveries under 10-year volumetric production payments between Chesapeake Exploration, L.L.C., a wholly-owned subsidiary of Chesapeake Energy Corporation (Chesapeake, Ca negative outlook) and Glenn Pool Oil & Gas Trust II. More than 3,000 oil and gas wells in northern Oklahoma are the subject wells to the VPP agreement. The complete rating action is as follows: Issuer: Glenn Pool Oil & Gas Trust II Senior Secured Notes, Downgraded to Caa1 (sf); previously on Dec 15, 2017 Upgraded to B2 (sf) RATING RATIONALE Its rating action is driven by deterioration in Chesapeake's overall credit profile, and the decline in production volume, number of economically producible wells and quantity and valuation of the proved reserves backing the VPP. Corporate Family Rating of Chesapeake was downgraded to Ca with negative outlook on April 24, 2020, which increases the risk that it could default on its various operating obligations under the VPP that could cause interruptions in production. Chesapeake guarantees the performance and payments by CELLC who is the main operator of the wells and obligated to purchase all the hydrocarbon deliveries under the VPP. The current CFR of Ca with negative outlook reflects Chesapeake's eroding liquidity, the prospect of significant production declines due to substantially reduced capital investment, a depressed commodity price environment, very limited access to capital, and the high likelihood of a restructuring in the near term. Given the current challenging environment for the oil and gas industry and marginal profitability of the VPP wells at current commodity prices, it may be difficult to find an alternative operator and purchaser if needed. The transaction does not prohibit CELLC from abandoning, shutting in or restricting the flow from uneconomical wells as long as CELLC operates in accordance with prudent industry standards. The number of economically producible wells under the VPP have declined and are likely to further decline given the low oil and gas prices. Glenn Pool Oil & Gas Trust II will continue to benefit from commodity swap payments. Low oil and gas prices result in higher swap payments to the trust, and the swap payments to the trust are currently sufficient to service monthly interest and part but not all of the principal payments to noteholders. Its analysis has considered the increased uncertainty relating to the effect of the coronavirus outbreak on the US economy as well as the effects that the announced government measures, put in place to contain the virus, will have on the performance of corporate assets. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. It is a global health shock, which makes it extremely difficult to provide an economic assessment. The degree of uncertainty around its forecasts is unusually high. PRINCIPAL METHODOLOGY The principal methodology used in this rating was "Operating Company Securitizations Methodology" published in April 2020. Factors that would lead to an upgrade or downgrade of the rating: The rating could be upgraded if Chesapeake's credit ratings were upgraded and the production coverage ratio is increased. The rating could be downgraded if the actual production falls below the scheduled VPP delivery requirements or if Chesapeake fails to perform on its obligations. GOBP HOLDINGS: Moody's Hikes CFR to B1 & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating and probability of default rating of GOBP Holdings, Inc. to B1 and B1-PD from B2 and B2-PD respectively. Moody's also upgraded the rating of the company's senior secured first lien term loan and senior secured revolving credit facility to B1 from B2. Additionally, Moody's changed the company's a Speculative Grade Liquidity rating to SGL-1 from SGL-2 indicating that the company's liquidity is very good. The outlook was changed to stable from positive. "All of the company's stores have been open through the coronavirus related disruptions as it has been deemed essential by the authorities and pantry loading has resulted in first quarter same store sales growing over 17%", Moody's Vice President Mickey Chadha stated. "We expect leverage to be around 4.5 times in the next 12-18 months with the company keeping a conservative capital structure with no intention to pursue leveraging transactions and the operating performance of the company will continues to be strong with further room for growth" Chadha further stated. Upgrades: Issuer: GOBP Holdings, Inc. Probability of Default Rating, Upgraded to B1-PD from B2-PD Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Corporate Family Rating, Upgraded to B1 from B2 Senior Secured Bank Credit Facility, Upgraded to B1 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: GOBP Holdings, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE Grocery Outlet's B1 Corporate Family Rating reflects its small scale in terms of revenue and EBITDA and low barriers to entry. The company lowered is leverage from a high of about 7.6 times to about 5.8 times in 2019 as it repaid a significant amount of debt through the proceeds on an IPO. Since then the company has improved metrics further through EBITDA growth and further debt reduction with debt/EBITDA at the end of fiscal year 2019 at 5.1 times. Moody's expects leverage to decline further to about 4.5 times over the next 12-18 months as management's focus on sharpening its customer value proposition and competitive price positioning accompanied by new store growth will result in consistent same store sales and EBITDA growth as has been the case in the last several years. Gross margins have been relatively stable despite competitive pressures as inventory management has been improving, sales of higher margin natural, organic and specialty products have increased and management continues to make opportunistic inventory purchases at attractive prices. Positive rating factors include Grocery Outlet's attractive market niche, a solid track record of organic and new store growth and a very good liquidity profile. The stable outlook reflects Moody's expectation that the company's operating performance and credit metrics will continue to improve due to increased profitability driven by organic and new store growth and liquidity will not deteriorate. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require stability in margins, consistent same store sales growth, and a material improvement in credit metrics while maintaining good liquidity. Quantitatively, ratings could be upgraded if EBIT/interest is sustained above 2.5x and debt/EBITDA is sustained around 4.25x. Ratings could be downgraded if same store sales and profitability demonstrate a declining trend, financial policies become aggressive or if liquidity materially deteriorates. Quantitatively ratings could be downgraded if EBIT/interest is sustained below 1.75 times or if debt/EBITDA is sustained above 5.0x. Grocery Outlet Inc. headquartered in Emeryville, CA is an extreme-value retailer of food, beverages, and consumer goods. The company operate 355 stores in five western states (CA, OR, WA, ID, and NV) as well as Pennsylvania. The company is publicly owned. Post the company's IPO and recent secondary offering private equity firm Hellman & Friedman LLC stake in the company has been reduced to about 13%. Revenues for the last twelve months ended December 28, 2019 were approximately $2.6 billion. GRAHAM HOLDINGS: S&P Downgrades ICR to 'BB'; Outlook Negative ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based conglomerate Graham Holdings Co. to 'BB' from 'BB+' because it expects the company's leverage to remain above its 2.5x downgrade threshold for the 'BB+' rating in 2020. "The downgrade reflects our expectation that Graham's leverage will remain elevated above 2.5x over the next two years due to the negative impact on consumer behavior from the recessionary economic environment that ensued from the coronavirus outbreak. We believe most of the company's key products and services will be hurt by factors such as travel restrictions, social distancing practices, lower expected advertising, and reduced demand for manufactured products. We do not believe the company will be able to fully offset these revenue declines by managing its cost base, and will therefore see materially lower EBITDA generation for at least the next 12 months," S&P said. The negative outlook reflects the risk that the economic downturn and change in consumer behavior due to the pandemic may be prolonged and result in revenue declines or lower-than-expected earnings in the company's business segments resulting in leverage being sustained above 3x over the next two years. "We could lower the rating if we expect the company's leverage to exceed 3x on a sustained basis due to operating challenges stemming from a prolonged economic downturn. Under this scenario we would expect EBITDA generation to remain challenged leading to sustained high leverage above 3x and depressed DCF/debt around 10%," S&P said. "We could raise the rating if we believe the company will be able to successfully manage its cost structure despite the challenges arising from an economic slowdown such that leverage declines below 2.5x and DCF/debt is maintained at greater than 15%. This scenario would likely require the company to successfully stabilize its revenue base, optimize its cost structure, and utilize excess cash flow to reduce its outstanding debt balance," S&P said. HANESBRANDS INC: Moody's Cuts Prob. of Default Rating to Ba2-PD --------------------------------------------------------------- Moody's Investors Service downgraded Hanesbrands, Inc.'s probability of default rating to Ba2-PD from Ba1-PD, and existing senior unsecured notes to Ba3 from Ba2. Moody's also downgraded Hanesbrands Finance Luxembourg S.C.A.'s senior unsecured notes to Ba2 from Ba1. At the same time, Moody's affirmed Hanesbrands' senior secured credit facilities at Baa3 and HBI Australia Acquisition Co. Pty Ltd's senior secured credit facility at Baa2. Hanesbrands' SGL-2 speculative grade liquidity rating is unchanged, and its rating outlook was changed to stable from negative. In addition, Moody's assigned a Ba3 rating to Hanesbrands, Inc.'s proposed senior unsecured notes offering. Proceeds will be used to repay outstanding borrowing under its revolving credit facility, to pay related fees and expenses, and for general corporate purposes. The downgrades reflect Moody's view that credit metrics will weaken significantly as a result of the severe COVID-19 related disruptions, including temporary store closures, reduced consumer spending, and deleveraging of manufacturing costs. Despite expectations for a gradual recovery beginning in the second half of 2020, metrics will remain weak over the next 12-18 months. Moody's-adjusted debt/EBITDA will likely exceed 6 times in 2020, up from around 3.6x at the end of 2019, with improvement towards 4.5 times in 2021 as performance gradually recovers and as the company permanently reduces debt. The affirmation of the senior secured credit facilities reflects the significant increase in more junior debt in the capital structure in the form of the new unsecured notes. The stable outlook reflects Moody's expectation that Hanesbrands performance will begin to improve in the second half of 2020, that its financial strategy will remain focused on reducing debt and leverage, and that liquidity will remain good, with improving free cash flow in the second half of 2020 and ample covenant cushion. Assignments: Issuer: Hanesbrands, Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD4) Downgrades: Issuer: Hanesbrands, Inc. Corporate Family Rating, Downgraded to Ba2 from Ba1 Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3 (LGD4) from Ba2 (LGD4) Issuer: Hanesbrands Finance Luxembourg S.C.A Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD4) from Ba1 (LGD4) Affirmations: Issuer: Hanesbrands, Inc. Senior Secured Bank Credit Facility, Affirmed Baa3 (LGD2) Issuer: HBI Australia Acquisition Co. Pty Ltd Senior Secured Bank Credit Facility, Affirmed Baa2 (LGD2) Outlook Actions: Issuer: Hanesbrands, Inc. Outlook, Changed to Stable from Negative Issuer: HBI Australia Acquisition Co. Pty Ltd Outlook, Changed to Stable from Negative Issuer: Hanesbrands Finance Luxembourg S.C.A Outlook, Changed to Stable from 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 apparel sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Hanesbrands' credit profile, including its exposure to widespread store closures and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Hanesbrands 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 Hanesbrands of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Hanesbrands' Ba2 corporate family rating reflects governance considerations including Moody's expectation that its financial strategy will remain conservative, with a focus on reducing debt and leverage over the next two years as operating performance recovers. The rating also reflects Hanesbrands' significant scale in the global apparel industry, its well-known brands, and leading share in the inner wear product category. Also considered are Hanesbrands' double-digit operating margins that are a result of product innovation, a low-cost supply chain, and the company's ability to successfully leverage its brands. Liquidity is good, supported by balance sheet cash and excess revolver availability, along with ample covenant cushion given the recent amendment to its secured credit facilities. Hanesbrands' ratings are constrained by high leverage as a result of earnings and cash flow deterioration in the face of the coronavirus pandemic. Also considered is its significant, but improving, customer concentration with two of its largest customers accounting for 25% of its 2019 total net sales, and its exposure to volatile input costs such as cotton, which can have a meaningful and unfavorable impact on earnings and cash flows. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if it appears that the company will be unable to improve 2021 EBITDA to a level within 30% below 2019. Ratings could also be downgraded if liquidity deteriorates for any reason, or financial strategy becomes more aggressive, including share repurchases before returning to more normalized operating performance and reducing debt and leverage. Quantitatively, the ratings could be downgraded if Moody's-adjusted debt/EBITDA were maintained above 4.75 times. A higher rating would require sustained improvement in operating performance and credit metrics while maintaining good liquidity. Quantitative metrics include maintaining Moody's-adjusted debt/EBITDA below 4.0 times. Headquartered in Winston-Salem, NC, Hanesbrands is a manufacturer and distributor of basic apparel products under brands that include: Hanes, Champion, DIM, Maidenform, Bali, Bonds and Playtex, among others. Annual revenue approaches $7 billion. HEARTS AND HANDS: Lawyer Not Entitled to Payment of Fees & Costs ---------------------------------------------------------------- In the bankruptcy case captioned In re HEARTS AND HANDS OF CARE, INC., Chapter 11, Debtor, Case No. 19-00230-GS (Bankr. D. Ala.), T. Edward Williams, Esq. of Williams, LLP seeks approval of attorney fees and expenses incurred both pre- and postpetition while representing the debtor Hearts and Hands of Care, Inc. The United States Trustee has opposed the application, and Hearts and Hands has joined in the opposition. Because Mr. Williams was never employed by the bankruptcy estate, Bankruptcy Judge Gary Spraker denies his application for approval of fees and expenses as administrative expenses. The facts relevant to Mr. Williams's current application begin with his filing of a chapter 11 petition for Rodriguez Investments, LLC on July 1, 2019. Both Rodriguez Investments and Hearts and Hands are owned by Kisha Smaw. On July 12, 2019, Mr. Williams filed his application to be employed as counsel for Rodriguez Investments. The application states that the debtor sought to employ Mr. Williams, in part, due to "his extensive background in bankruptcy matters. . . ." On July 22, 2019, Mr. Williams filed the chapter 11 petition for Hearts and Hands. That same day, he also filed a petition for a third related entity, Savion Investments, LLC. Mr. Williams moved for joint administration of all three bankruptcy cases. The U.S. Trustee objected to the motions for joint administration and Mr. Williams's employment in Rodriguez Investments. Mr. Williams failed to place either matter on for hearing. This led the court to include both matters for discussion at the initial status conference scheduled in Rodriguez Investments for August 14, 2019. That scheduling conference was continued to the next day to be heard together with the status conference in Hearts and Hands. As a result of the status conferences, the court entered an order in the Rodriguez Investments and Hearts and Hands bankruptcy cases requiring Mr. Williams to associate with local counsel. The court also set a hearing on the application in Rodriguez Investments for Sept. 11, 2019. On August 20, 2019, Thomas Buford entered his appearance on behalf of Hearts and Hands in its bankruptcy. Mr. Buford filed his application to be employed as counsel for the debtor-in-possession, and on October 16, 2019, the court entered its order approving Mr. Buford's employment. On Sept. 11, 2019, the court held its hearing on the application to employ Mr. Williams as counsel for Rodriguez Investments in its bankruptcy case. Ultimately, Mr. Williams withdrew his application for employment on the record. The court entered an order denying Mr. Williams's employment based upon the withdrawal of his application. As a result of these events, Mr. Williams has never noticed his motion for joint administration for hearing. Rodriguez Investments remains unrepresented in its bankruptcy. The U.S. Trustee has moved to compel Mr. Williams to disgorge the monies Mr. Williams received as a retainer in the Rodriguez Investments' bankruptcy. Meanwhile, Hearts and Hands has moved to dismiss the Rodriguez Investments bankruptcy. Within the Hearts and Hands's case, Mr. Williams was permitted to appear pro hac vice, but has never filed an employment application. Nonetheless, he now seeks approval of $49,601.75 in fees and $2,869.71 in expenses. The day before the hearing on his application, Mr. Williams filed an affidavit attaching his billing statement reflecting 117.90 hours of work for $51,157.75 and $1,747.50 in expenses. The billing statement includes 12 entries totaling 23.5 hours for $9,987.50 in attorney fees incurred prior to the petition date. The U.S. Trustee has opposed the fee application. As a preliminary matter, the U.S. Trustee argues that Mr. Williams is not entitled to any compensation because he was ever employed by the bankruptcy estate. The U.S. Trustee also argues that Mr. Williams has failed to establish the reasonableness of his fees. At oral argument, Mr. Williams cited the court to several cases not included in his opposition. Predominantly, the cases cited involved application of section 503(b)(1) in situations where the creditor seeking the administrative expense claim was not a professional of the bankruptcy estate subject to the provisions of sections 327 and 330. In In re Garcia, 2016 WL 7324153, the creditor seeking the administrative expense was identified as the plan proponent of the confirmed plan. The creditor argued that its attorney's services satisfied the substantial contribution required under section 503(b)(1)(A). Despite some question as to the relationship between the creditor and its counsel, the bankruptcy court was careful to distinguish a payment to the creditor for its contribution through the expense of its attorney under section 503(b)(4) from direct payment of the creditor's attorney fees to counsel who were not employed by the estate. Garcia provides no support for the proposition that a professional of the estate may be paid under section 503(b)(1)(A). Similarly, Mr. Williams's citation to In re Walker Land & Cattle, LLC, 535 B.R. 348 is unhelpful. There, the estate employed an accountant. The accountant hired an attorney to advise and represent her. The accountant sought to include her legal expenses as part of her administrative expense claim through application of section 330(a)(1)(B) rather than for substantial contribution under section 503(b)(1)(A). The bankruptcy court denied the accountant's application to recover her legal expenses because such expense was not necessary for the task for which she was employed. Mr. Williams also cited the court to In re Ginji, 117 B.R. 983, In re Bicoastal Corp., 117 B.R. 700, In re St. Pierre, 4 B.R. 184 and In re The Leonard Jed Co., 118 B.R. 339 though he acknowledged that the cases might not be on point. Each of these cases concerns approval of fees and expenses under section 330 for approved professionals of the estate rather than any attempt to recover compensation under section 503(b)(1)(A) by a professional that was not employed by the estate. According to Judge Spraker, the court in Bicoastal Corp., noted that it had denied the first fee application submitted by the accountants for the unsecured creditors' committee because the company had not been employed at the time it rendered the services. Mr. Williams's fee application must, therefore, be denied because he was not employed by the bankruptcy estate for Hearts and Hands. While Mr. Williams has never applied to be employed by this bankruptcy estate, it is worth noting that he could not be employed by the estate even if he had applied. Mr. Williams's billing statement submitted the day before the hearing on his fee application establishes that Hearts and Hands owed him $9,987.50 for pre-petition work as of the petition date. The debt precludes any claim of disinterestedness required for employment by the estate. A copy of the Court's Memorandum Opinion dated March 11, 2020 is available at https://bit.ly/3c5hrZz from Leagle.com. Hearts and Hands of Care, Inc., Debtor, represented by Thomas A. Buford, III -- tbuford@bskd.com -- Bush Kornfeld LLP, W. Sherman Ernouf, Law Firm of Ernouf & Coffey, PC, Carolyn Y. Heyman -- heyman@alaskalaw.pro -- Sedor Wendlandt Evans & Filippi, LLC, Richard Keeton -- rkeeton@bskd.com -- Bush Kornfeld LLP, Stephen D. Rose, Hall Render Killian Heath & Lyman PC, Christine M. Tobin-Presser, Bush Kornfeld LLP & T. Edward Williams, Williams LLP. Office of the U.S. Trustee, U.S. Trustee, represented by Kathryn Perkins , DOJ-Ust. About Hearts and Hands of Care Hearts and Hands of Care, Inc. is a home and community-based waiver services agency which is certified for and provides waiver-funded services. HHOC provides both habilitative and non-habilitative services to support individuals with a variety of disabilities, as well as their families. The agency provides services to approximately 212 recipients. Hearts and Hands of Care sought Chapter 11 protection (Bankr. D. Alaska Case No. 19-00230) on July 22, 2019. In the petition signed by CEO Kisha Smaw, the Debtor was estimated to have assets of at least $50,000 and liabilities at $1 million to $10 million. Judge Gary Spraker oversees the case. Peyrot and Associates P.C. is the Debtor's legal counsel. HEATING & PLUMBING: June 18 Plan Confirmation Hearing Set --------------------------------------------------------- On March 25, 2020, debtor Heating & Plumbing Engineers, Inc., filed with the U.S. Bankruptcy Court for the District of Colorado a Second Amended Disclosure Statement to Accompany Second Amended Chapter 11 Plan. On April 14, 2020, Judge Thomas B. McNamara approved the Disclosure Statement and established the following dates and deadlines: * June 4, 2020, is fixed as the last day to file any objection to confirmation of the Plan. * June 18, 2020, at 1:30 p.m. before the undersigned Judge in the United States Bankruptcy Court for the District of Colorado, Courtroom E, U.S. Custom House, 721 19th Street, Denver, Colorado is the hearing for consideration of confirmation of the Plan. * June 11, 2020, is fixed as the last day for parties to file and exchange witness and exhibit lists. A full-text copy of the order dated April 14, 2020, is available at https://tinyurl.com/yatomkaa from PacerMonitor at no charge. 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. HENRY HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based roofing and building envelope solutions' manufacturer Henry Holdings Inc. to negative from stable and affirmed the 'B' issuer credit rating on the company. "We revised our outlook on Henry to negative based on our view that slower housing activity will harm the company's earnings in 2020. The company's performance in 2019 was in line with our previous expectations, with adjusted leverage of 6x and EBITDA interest coverage of 2.3x for the 12 months ended Dec. 31, 2019. However, we expect credit measures to somewhat weaken over the next 12 months based on depressed end markets' demand," S&P said. "The negative outlook reflects our belief that extended recessionary pressure could result in Henry's earnings and credit measures worsening more than we expect under our base case scenario," the rating agency said. S&P could lower the ratings over the next 12 months if: -- Henry's earnings deteriorated such that leverage rose to above 8x or EBITDA interest coverage fell below 1.5x with little prospect for a rapid recovery. S&P estimates an annual sales decline of 25% could drive credit measures to these levels; or -- Henry adopted a substantially more aggressive financial policy--for instance, dividend payouts or debt-financed acquisitions--causing leverage to rise above 8x. S&P could revise the outlook back to stable over the next 12 months if: -- Overall business conditions improved, and -- Henry maintained leverage at about 6x and EBITDA interest coverage above 2x. HERTZ GLOBAL: S&P Cuts ICR to 'CCC-' on Restructuring Concerns -------------------------------------------------------------- S&P Global Ratings lowered all ratings, including the issuer credit rating on Hertz Global Holdings Inc. and Hertz Corp. to 'CCC-' from 'B-'. All ratings remain on CreditWatch, where S&P placed them with negative implications on March 16, 2020. If the company proceeds with what S&P considers a distressed exchange or partial debt restructuring, the rating agency expects to lower the issuer credit rating to 'SD' or 'D', depending on the type and extent of the transaction. "We believe the likelihood has increased that Hertz will engage in a transaction we consider a distressed exchange or a partial debt restructuring. Hertz generates the majority of its revenues at airports globally and relies on airline passenger travel, which has declined sharply due to the impact of the COVID-19 pandemic. At the same time, it relies on proceeds from vehicle sales to service its asset-backed vehicle obligations. However, with the used car market also substantially weaker, Hertz's liquidity has become severely constrained. We believe it likely will not meet its upcoming financial obligations. We therefore believe the likelihood has increased it will engage in a transaction we consider a distressed exchange or partial debt restructuring," S&P said. "We expect to resolve the CreditWatch when we have further information regarding Hertz's financial plans. If the company proceeds with what we consider a distressed exchange or partial debt restructuring, we would lower the issuer credit rating to 'SD' or 'D', depending on the type and extent of the transaction," S&P said. HUMMEL STATION: S&P Cuts Senior Secured Term Loan B Rating to CCC+ ------------------------------------------------------------------ S&P Global Ratings lowered its issue-level rating on Hummel Station LLC's senior secured term loan B to 'CCC+' from 'B'. The '2' recovery rating is unchanged, indicating its expectation for substantial (70%-90%; rounded estimate: 75%) recovery. "The lower rating on Hummel Station LLC's $460 million term loan B reflects our view that the project's capital structure is unsustainable over the long term. Our forecast debt service coverage ratio (DSCR) of 1x-1.1x over the next 12 months is below the DSCR covenant of 1.15x. We anticipate that Hummel would likely exercise equity cures to remain compliant with the financial covenant. Weaker-than-expected credit metrics reflect the continued decline of wholesale on- and off-peak power prices, decreased load, and low natural gas prices in the Pennsylvania-New Jersey-Maryland (PJM) region, which we expect will prevail in 2020 and 2021. We now project spark spreads of $7-$10 per megawatt-hour (MWh) over the next two years. We expect reduced generation at Hummel until the transmission work is completed sometime in June 2020," S&P said. The CreditWatch placement with developing implications reflects the possibility of higher or lower rating on Hummel's senior secured term loan B in the short term, depending on the project's capital structure and credit metrics after the ownership change. "We could lower the rating if we expect Hummel to restructure its debt or miss an interest or amortization payment over the next 12 months. We could also lower the rating if the project breaches its 1.15x DSCR financial covenant and does not exercise the equity cure rights permitted under the existing credit agreement," S&P said. "We could raise the rating if Hummel generates cash flows that provide sufficient headroom over the 1.15x minimum DSCR during the life of the project. This could happen if market conditions in PJM improve significantly, but it would likely require changes to the existing capital structure," the rating agency said. IAA INC: S&P Places 'BB-' ICR on Watch Neg. Due to COVID-19 Risks ----------------------------------------------------------------- S&P Global Ratings placed all of its ratings on U.S. salvage auctioneer IAA Inc. on CreditWatch with negative implications, including the 'BB-' issuer credit rating. Governments have implemented unprecedented containment actions to slow the spread of the coronavirus, including shutting down many businesses and imposing social-distancing restrictions. S&P sees the COVID-19 pandemic interfering with the company's ability to conduct business activities at full capacity. If a substantial number of individuals stay off the roads, total miles driven would meaningfully decline. This would lead to fewer accidents and, as a consequence, would adversely affect IAA's sales, profitability and cash flow. The CreditWatch placement reflects that there is at least a 50% chance S&P will lower its ratings on IAA if its auction activity declines longer than it expects, causing its cash flow generation to turn negative, eroding its liquidity, and increasing its debt leverage with no signs of an imminent improvement. The length of the slowdown will depend on a number of factors, including how soon the pace of coronavirus infections flattens and governments relax their restrictions on business activity and social interaction. ICONIC BRANDS: Has $3.95M Net Loss for the Yearend Dec. 31, 2019 ---------------------------------------------------------------- Iconic Brands, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss attributable to Iconic Brands, Inc. of $3,953,911 on $1,210,242 of sales for the year ended Dec. 31, 2019, compared to a net loss attributable to Iconic Brands, Inc. of $4,157,254 on $566,136 of sales for the year ended in 2018. The audit report of BMKR, LLP, states that the Company incurred a net loss of $3,953,704 during the year ended December 31, 2019, and as of that date, had a deficit net worth of $22,925,748. The company is in arears with certain vendor creditors which, among other things, cause the balances to become due on demand. The Company is not aware of any alternate sources of capital to meet such demands, if made. The report also states that the Company's significant operating losses 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 $2,568,021, total liabilities of $2,077,823, and a total stockholders' equity of $490,198. A copy of the Form 10-K is available at: https://is.gd/KkmBgJ Iconic Brands, Inc., develops, markets, and distributes alcoholic beverages in the United States. It offers vodka, wine, and spirits, as well as liquor based products infused with hemp and CBD. The company markets its products under the Bivi and Bellissima brand names. Iconic Brands, Inc. was founded in 2005 and is headquartered in Amityville, New York. INNOVATIVE DESIGNS: Incurs $69K Net Loss in First Quarter --------------------------------------------------------- Innovative Designs, Inc., reported a net loss of $68,890 on $47,426 of net revenues for the three months ended Jan. 31, 2020, compared to a net loss of $250,368 on $109,344 of net revenues for the three months ended Jan. 31, 2019. As of Jan. 31, 2020, the Company had $1.56 million in total assets, $744,418 in total liabilities, and $818,855 in total stockholders' equity. During the period ended Jan. 31, 2020, the Company funded its operations from revenues from sales and sale of its common stock. During the three month period ended Jan. 31, 2020, the Company sold its common stock in private transactions and raised $49,000 from the sales. If the Company is not able to either increase its sales revenue or sell more of its common stock during the current quarter, it may not able to support its current cost structure. Innovative Designs said, "We will continue to fund our operations from sales and the sale of our securities. We continue to pay our creditors when payments are due. The Company reached an agreement with the manufacturer of the INSULTEX material to purchase a machine capable of producing the INSULTEX material. Also included in the proposed agreement will be the propriety formula that creates INSULTEX. The Company took delivery of the equipment in December 2015 It is the Company's current plan to sell the equipment. The Company has currently made deposits of $600,000 on the equipment. The Company has incurred $17,000 of additional expenses related to shipping and other purchase cost which was written off during 2019. "The Company will continue to fund its operations from revenues, borrowings from private parties and the possible sale of our securities. Should we not be able to rely on the private sources for borrowing and /or increased sales, our operations would be severely affected as we would not be able to fund our purchase orders to our suppliers for finished goods." A full-text copy of the Quarterly Report on Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/kvCUZx About Innovative Designs Headquartered in Pittsburgh, Pennsylvania, Innovative Designs, Inc. operates in two separate business segments: cold weather clothing and a house wrap for the building construction industry. Both of its segment lines use products made from INSULTEX, which is a low-density foamed polyethylene with buoyancy, scent block, and thermal resistant properties. The Company has a license agreement directly with the owner of the INSULTEX Technology. Innovative Designs recorded a net loss of $841,979 for the year ended Oct. 31, 2019, compared to a net loss of $582,882 for the year ended Oct. 31, 2018. As of Oct. 31, 2019, the Company had $1.57 million in total assets, $931,732 in total liabilities, and $636,778 in total stockholders' equity. Louis Plung & Company, LLP, in Pittsburgh, Pennsylvania, the Company's auditor since 2006, issued a "going concern" qualification in its report dated March 16, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The auditor further stated that, "In early 2020, an outbreak of a novel strain of coronavirus was identified and infections have been found in a number of countries around the world, including the United States. The coronavirus and its impact on trade including customer demand, travel, employee productivity, supply chain, and other economic activities has had, and may continue to have, a significant effect on financial markets and business activity. The extent of the impact of the coronavirus on our operational and financial performance is currently uncertain and cannot be predicted." INTERNATIONAL FOOD: Seeks Court Approval to Hire Accountant ----------------------------------------------------------- International Food Service Purchasing Group, Inc. seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ an accountant. The Debtor seeks to employ Billy Davis to provide accounting services, which include the preparation of periodic statements of its operations, tax returns and monthly operating reports; tax and management counseling; and representation in tax-related investigation. The accountant will be paid $1,442.31 per week for his services. Mr. Davis is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. Mr. Davis holds office at: Billy G. Davis, CPA 4608 Van Wrinkle Amarillo, TX 79119 Tel: 806-353-2616 806-679-3529 Email: billydaviscpa@gmail.com About International Food Service Purchasing Group, Inc. International Food Service Purchasing Group Inc. is a non-profit organization in San Juan, P.R., that provides supply chain analysis and management services for the restaurant industry. International Food Service filed a Chapter 11 petition (Bankr. D.P.R. Case No. 20-01458) on March 20, 2020. In the petition signed by Charles A. Maxwell, president, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Alexandra Bigas Valedon, Esq., at Modesto Bigas Law Office, is Debtor's bankruptcy counsel. INTERNATIONAL FOOD: Seeks Court Approval to Hire Consultants ------------------------------------------------------------ International Food Service Purchasing Group, Inc. seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to tap the services of consultants to assist in the operation of its business. The Debtor proposes to employ Gladys Canani, Evelyn Defendini and Nick Hoist and pay the consultants for their services as follows: Gladys Canani $52.28 per hour Evelyn Defendini $24.04 per hour Nick Hoist $1,346.15 per week All three consultants are disinterested within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. Ms. Canani holds office at: Gladys J. Canani 7431 E Diamond St. Scottsdale, AZ 85257 Tel: 480-284-1021 Email: gcanani@ifscg.us Ms. Defendini holds office at: Evelyn Defendini 158 Bo. Playa Hucares Naguabo, PR 00718 Tel: 787-599-3112 Email: edefendini@ifscg.us Mr. Hoist holds office at: Nick Hoist 2820 Laramie Rd. Riverside, CA 92506 Phone: 562-900-6966 Email: nholst@ifscg.us About International Food Service Purchasing Group, Inc. International Food Service Purchasing Group Inc. is a non-profit organization in San Juan, P.R., that provides supply chain analysis and management services for the restaurant industry. International Food Service filed a Chapter 11 petition (Bankr. D.P.R. Case No. 20-01458) on March 20, 2020. In the petition signed by Charles A. Maxwell, president, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Alexandra Bigas Valedon, Esq., at Modesto Bigas Law Office, is Debtor's bankruptcy counsel. INTERNATIONAL FOOD: Seeks Court Approval to Hire Skyway Consultant ------------------------------------------------------------------ International Food Service Purchasing Group, Inc. seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Skyway Consultants, LLC to provide consulting services. Skyway charges $26.42 per hour for its consulting services. The firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Glenda Camacho Skyway Consultants, LLC 3216 Zander Drive Apt. 204 Kissimmee, FL 34747 Tel: 787-231-9425 Email: gcamacho@ifscg.us About International Food Service Purchasing Group, Inc. International Food Service Purchasing Group Inc. is a non-profit organization in San Juan, P.R., that provides supply chain analysis and management services for the restaurant industry. International Food Service filed a Chapter 11 petition (Bankr. D.P.R. Case No. 20-01458) on March 20, 2020. In the petition signed by Charles A. Maxwell, president, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Alexandra Bigas Valedon, Esq., at Modesto Bigas Law Office, is Debtor's bankruptcy counsel. INTERNATIONAL FOOD: Seeks to Hire Eleventh Hour as Consultant ------------------------------------------------------------- International Food Service Purchasing Group, Inc. seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Eleventh Hour Consulting to provide consulting services. The firm will be paid $43 per hour for its services. Eleventh Hour is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Timothy Biddlecome Eleventh Hour Consulting 4117 W Whispering Wind Dr. Glenddale, AZ 85310 Tel: 951-833-7535 Email: tbiddlecome@ifscg.us About International Food Service Purchasing Group, Inc. International Food Service Purchasing Group Inc. is a non-profit organization in San Juan, P.R., that provides supply chain analysis and management services for the restaurant industry. International Food Service filed a Chapter 11 petition (Bankr. D.P.R. Case No. 20-01458) on March 20, 2020. In the petition signed by Charles A. Maxwell, president, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Alexandra Bigas Valedon, Esq., at Modesto Bigas Law Office, is Debtor's bankruptcy counsel. INTERNATIONAL FOOD: Seeks to Hire Nan-Mar LLC as Consultant ----------------------------------------------------------- International Food Service Purchasing Group, Inc. seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Nan-Mar LLC to provide consulting services. Nan-Mar charges $39.88 per hour for its consulting services. The firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. Nan-Mar can be reached through: Nancy Beatty Nan-Mar LLC 1047 Blankets Creek Dr. Canton, GA 30114 Tel: 770-213-4107 Email: nbeatty@ifscg.us About International Food Service Purchasing Group, Inc. International Food Service Purchasing Group Inc. is a non-profit organization in San Juan, P.R., that provides supply chain analysis and management services for the restaurant industry. International Food Service filed a Chapter 11 petition (Bankr. D.P.R. Case No. 20-01458) on March 20, 2020. In the petition signed by Charles A. Maxwell, president, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Alexandra Bigas Valedon, Esq., at Modesto Bigas Law Office, is Debtor's bankruptcy counsel. ISRAEL BAPTIST: Seeks to Hire Abrams Foster Nole as Accountant -------------------------------------------------------------- Israel Baptist Church of Baltimore City seeks authority from the United States Bankruptcy Court for the District of Maryland to employ Abrams, Foster, Nole & Williams, P.A. as its accountant. Abrams Foster will assist the Debtor in preparing a review financial statement, assist in conducting the monthly accounting completed in the ordinary course of its business, and to assist the Debtor in its refinancing and restructuring efforts. Abrams Foster's customary hourly rates range from $100 to $375. Abrams Foster represents no interest adverse to the Debtor and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code., according to court filings. The firm can be reached through: Arnold Williams, CPA Abrams, Foster, Nole & Williams, P.A. 2 Hamill Rd #241 Baltimore, MD 21210 Phone: +1 410-433-6830 About Israel Baptist Church of Baltimore City Israel Baptist Church of Baltimore City -- http://israelbaptist.org -- is a tax-exempt religious organization. The Church was founded and organized in 1891. Israel Baptist Church of Baltimore City filed a petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 20-13857) on March 26, 2020. In the petition signed by Ernest Ford, chair, Board of Trustees, the Debtor estimated $1 million to $10 million in both assets and liabilities. Alan M. Grochal, Esq., at Tydings & Rosenberg LLP, represents the Debtor as counsel. J. HILBURN INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: J. Hilburn, Inc. 12700 Park Central Drive, Suite 2000 Dallas, TX 75251 Business Description: J. Hilburn, Inc. -- https://www.jhilburn.com -- sells custom-made men's clothing. The Company offers shirts, suits, trousers, pants, sweaters, outerwears, and accessories. Chapter 11 Petition Date: April 30, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-31308 Debtor's Counsel: Patrick J. Neligan, Jr., Esq. NELIGAN LLP 325 N. St. Paul Suite 3600 Dallas, TX 75201 Tel: 214-840-5300 E-mail: pneligan@neliganlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by David DeFeo, chief executive officer. 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/95bJie JACKSON COLLEGE: Moody's Rates $10.3 Million 2015 Bonds 'B2' ------------------------------------------------------------ Moody's Investors Service has assigned an initial B2 rating to Jackson College Dormitories' approximately $10.3 million (currently $9.7 million outstanding) 2015 Limited Obligation College Housing Revenue Bonds. A negative outlook has been assigned. RATINGS RATIONALE The B2 rating reflects a trend of weak financial performance, and potentially significant near-term project stress for fiscal 2021 given the college's recent announcement that extends online-only instruction to fall 2020 due to continuing COVID-related concerns. The rating also incorporates a narrow market position given limited demand for campus residential life and annual declines in the full-time equivalent enrollment base. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Assignment of the below investment grade rating incorporates the impact on the project given the breadth and severity of the health crisis, and the deterioration in project fundamentals it has triggered. Pricing flexibility will remain highly constrained, further hindering future financial improvement and management's ability to reverse recent coverage covenant deficiencies. Offsetting these challenges are the project's strong operating alignment with the college, including governance and facility management, a fully-funded debt service reserve, and a first-fill requirement for new residents. RATING OUTLOOK The negative outlook reflects expectations that net project revenues will remain highly challenged and subject to greater volatility due to potentially significant occupancy shortfalls for fall 2020. Depending on the availability of external support, the magnitude of revenue reduction could drive additional rating pressure. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Steady increase in occupancy and residential demand that drives sustained operating margin growth and improved pricing flexibility - Contractual agreement that obligates Jackson College to cure annual debt service deficiencies FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Debt service reserve fund drawdown - Inability to return to pre-COVID occupancy levels with the reintroduction of a campus-based learning environment - Continued limited pricing power that constrains financial and coverage improvement - Inability to generate resources sufficient to replenish operating and maintenance reserves, leading to facility deterioration and competitive disadvantage LEGAL SECURITY The bonds are a limited obligation of the issuer secured by project revenues which constitute the primary source of revenue for project debt. The bond trustee will also have a security interest in various funds, such as the Bond Debt Service Account, Operating Reserve Fund, Repair and Replacement Fund and Debt Service Reserve Fund, as provided by the Trust Agreement. The debt service reserve is funded at the lesser of 10% of the principal amount of the bonds, MADS, or 125% of average annual debt service USE OF PROCEEDS Bond proceeds funded construction of the Campus View 3 residential hall on the campus of Jackson College consisting of a 204-bed dormitory facility (subsequently adjusted to 202 beds) on land leased to Jackson College Dormitories by the college. PROFILE Jackson College Dormitories is a Michigan non-profit corporation duly organized and existing under the laws of the State of Michigan for the benefit of Jackson College, a community college duly created and existing under the Constitution and laws of the State. The only assets of the issuer which are pledged to secure the 2015 bonds constitute a portion of the project. The members of the board of directors of the issuer appointed by the college. JELD-WEN INC: S&P Rates New Senior Secured Notes 'BB+' ------------------------------------------------------ S&P Global Ratings assigned issue-level ratings of 'BB+' to JELD-WEN Inc.'s new senior secured notes and recovery ratings of '1', indicating its expectation for substantial (90% to 100%; rounded estimate 95%) recovery in the event of a payment default. S&P affirmed its issue-level ratings on the term loan at JELD at 'BB+', with a '1' recovery rating indicating its expectation for substantial (90%-100%; rounded estimate 95%). The rating agency also affirmed the 'BB-' ratings on the unsecured debt and revised the recovery ratings to '4', indicating its expectation for average (30% to 50%; rounded estimate 30%) recovery in the event of a payment default, from '3'. There is no change to the 'BB-' issuer credit rating on the company. The affirmed secured issue-level rating reflects the projected recovery for secured lenders in the event of a default scenario. With the new $250 million secured notes, the collateral value of the business in a default scenario would be distributed among a larger pool of secured lenders than before the transaction. The recovery and issue-level ratings on the secured debt are unchanged. "The transaction results in lower recovery prospects for unsecured lenders, and as a result we are lowering the recovery rating to '4' from '3'. The issuer credit rating remains 'BB-'. The outlook remains negative. For the full issuer credit rating rationale, see our research update published April 1, 2020," S&P said. The negative outlook reflects the possibility that S&P could lower its rating on JELD if a material pull back in new housing construction in the U.S. occurred and decreased or weakened the company's profitability. This would cause the rating agency to believe JELD's S&P Global Ratings'-adjusted debt to EBITDA would remain above 4x over the next 12 to 24 months. "We could lower the rating on JELD if leverage increased and remained above 5x over the next 12 months. This could occur if activity meaningfully slowed or if the company faced increased competitive pressures that depressed margins further. In addition, we expect the appeal process regarding the federal court ruling requiring JELD to divest its Towanda, Pa. facility will take more than 12 months to resolve and the outcome is still uncertain. However, we could lower the rating if a forced divestiture of that plant (or monetary damages) occurred sooner than expected and resulted in materially lower profitability," S&P said. "We could revise the outlook to stable over the next 24 months if JELD reduced its debt to EBITDA near 4x and we expected it would be able to maintain leverage at this level. This could occur if construction activity resumed quickly and demand for JELD's products remained healthy," S&P said. JSL LAND COMPANY: Seeks to Hire David Johnston as Legal Counsel --------------------------------------------------------------- JSL Land Company, Inc., seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to hire David Johnston, Esq., to handle its Chapter 11 case. Mr. Johnston will provide these services: (a) advise Debtor about its rights, powers and obligations in the Chapter 11 case and in the management of the estate; (b) take necessary actions to enforce the automatic stay and to oppose motions for relief from the automatic stay; (c) take necessary actions to recover and avoid any preferential or fraudulent transfers; (d) appear at the meeting of creditors, initial interview with the U.S. Trustee, status conference and other hearings held before the bankruptcy court; (e) review and, if necessary, object to proofs of claim; (f) take steps to obtain court authority for the sale of Debtor's assets; and (g) prepare a plan of reorganization and take all steps necessary to bring the plan to confirmation. The hourly rate to be charged by the attorney is $360. Prior to Debtor's bankruptcy filing, Mr. Johnston received $5,000 for attorney's fees and $1,717 for the filing fee. Mr. Johnston is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. Mr. Johnston holds office at: David C. Johnston, Esq. 1600 G Street, Suite 102 Modesto, California 95354 Telephone: (209) 579-1150 Fax: (209) 579-9420 About JSL Land Company JSL Land Company, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Calif. Case No. 20-90205) on March 13, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Ronald H. Sargis oversees the case. David C. Johnston, Esq., is Debtor's legal counsel. KAISER ALUMINUM: Moody's Rates New $300MM Sr. Unsecured Notes 'B1' ------------------------------------------------------------------ Moody's Investors Service, assigned a B1 rating to Kaiser Aluminum Corporation's new $300 million senior unsecured notes due 2025. Moody's also downgraded Kaiser's corporate family rating to Ba3 from Ba2, probability of default rating to Ba3-PD from Ba2-PD and the rating of the existing senior unsecured notes due 2028 from Ba3 to B1. The proceeds from the proposed notes will be used for general corporate purposes. The Speculative Grade Liquidity rating remains SGL-1. "The ratings downgrade reflects Moody's expectations that the coronavirus-related disruptions will negatively impact the aerospace and automotive supply chains and will lead to meaningful deterioration in Kaiser's financial performance and overall credit profile over the next 12-18 months", said Botir Sharipov, Vice President and lead analyst for Kaiser. Assignments: Issuer: Kaiser Aluminum Corporation Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD4) Downgrades: Issuer: Kaiser Aluminum Corporation Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Corporate Family Rating, Downgraded to Ba3 from Ba2 Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD4) from Ba3 (LGD4) Outlook Actions: Issuer: Kaiser Aluminum Corporation Outlook, Changed To Stable From Positive 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 commercial aviation and automotive sectors are amongst sectors most significantly affected by the shock given the exposure to declining passenger traffic, travel restrictions and sensitivity to consumer demand and sentiment. More specifically, Kaiser's substantial exposure to the aerospace/HS products (60% of value-added revenues; commercial airspace: one-third of VAR) and automotive applications (11% of VAR) have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Kaiser Aluminum Corporation's Ba3 CFR reflects a robust market position of its semi-fabricated aluminum mill products in the commercial aerospace and automotive sectors and its long-standing customer relationships with tier one aerospace and automotive suppliers and metal service centers. The company's strong liquidity position is a key consideration supporting its rating. The company benefits from its pricing model that allows to pass through aluminum costs on a significant percentage of sales to its customers helping the company mitigate the volatility in aluminum prices. However, the credit profile is constrained by the company's modest size and significant customer concentration with The Boeing Company (Baa2 negative) and Reliance Steel & Aluminum Co (Baa3 stable) accounting, respectively, for 17% and 25% of 2019 sales. Despite weaker performance in the automotive and general engineering, Kaiser generated Moody's-adjusted EBITDA of $215 million and free cash flow of $132 million in 2019 and ended the year with a strong liquidity position and moderate leverage of 2.6x. However, the spread of coronavirus, that has already led to an unprecedented disruption in global economic activity, will have a pronounced negative impact on the commercial aerospace and automotive industries due to the substantial reduction in the passenger air travel, deferred aircraft orders, lower automotive production and sales, and as a result, significantly weaker demand for new aircrafts, light vehicles, parts and services in the near and, potentially, medium term. According to the International Air Transport Association (IATA), by early April, the number of flights globally was 80% lower than in 2019 mainly due to travel restrictions. The IATA estimates that global airline 2020 passenger revenues could fall by more than $300 billion, down 55% from 2019, driven by the anticipated 48% drop in global passenger traffic. Furthermore, most North American automotive plants have been closed since March and it is uncertain when the production will restart and what the path of recovery in auto sales will look like in 2020 and 2021. Moody's estimates that amid a sharply lower demand in the wake of the coronavirus outbreak, US light vehicle sales will decline by at least 15% in 2020 and recover only modestly in 2021. These factors, 737 MAX production disruption and overall weaker industrial demand will lead to lower shipments and sales across all of Kaiser's segments, lower value-added added revenues and a substantial reduction in earnings and cash flows. Moody's estimates that Kaiser's 2020 EBITDA could fall by 35-45% in 2020 and adjusted debt/EBITDA could reach 6-7x due to lower EBITDA and higher absolute debt levels. Although Moody's adjusted free cash flow (after dividend payments) is expected to be negative in 2020-2021, Kaiser's ample liquidity will able to absorb the projected cash burn without impacting its liquidity profile. The company has announced that it suspended its share repurchasing program and will reduce operating costs and capital expenditures. The stable outlook reflects Moody's expectations that Kaiser will carefully manage its liquidity through the anticipated economic downturn as revenues and earnings decline materially in the next 12-18 months. The stable outlook also assumes that credit metrics will return to levels appropriate for the Ba3 rating by 2022. Kaiser faces a number of ESG risks typical for a producer of flat-rolled and extrusion aluminum products with respect to air emissions, wastewater discharges, site remediation amongst others, and is subject to many environmental laws and regulations in the areas in which it operates. However, Kaiser is also a significant user of aluminum scrap with recycled aluminum and other metals accounting for more than 50% of all material used in its remelt and casting operations. Social risks are relatively acute with 62% of the company's workforce unionized. The governance risk is below average as the company has followed a balanced capital allocation policy, remaining disciplined with M&A and shareholder returns. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would consider an upgrade of Kaiser's credit ratings if leverage (adjusted debt/EBITDA) improves to below 3.5x, interest coverage (adjusted EBIT/Interest) increases to above 3x and an adjusted EBIT margin to above 7% on a sustained basis. Expectations of sustainable positive Moody-s adjusted free cash generation is also a prerequisite the ratings upgrade. Kaiser's ratings could be downgraded if liquidity, measured as cash plus revolver availability, evidences a material deterioration, if the company makes debt-financed acquisitions at aggressive multiples or resumes its share repurchasing program before the recovery in its key end-markets, return to Moody's adjusted free cash flow generation and improvement in debt protection metrics. Expectations of significantly prolonged production rate cuts by the company's customers or an extended slump in the commercial aerospace demand could lead to the negative pressure on the ratings. Quantitatively, ratings could be downgraded if the adjusted EBIT margin is expected to sustain below 5% after 2021. Kaiser's SGL-1 speculative grade liquidity rating reflects its very good liquidity profile supported by $307 million in cash as of March 31, 2020 ($600 million pro-forma the bonds issuance), $39 million in short-term investments and $342 million of borrowing availability under the $375 million asset-based revolver (ABL) maturing in October 2024. The B1 rating of the new senior unsecured notes reflects the notes' effective subordination to the secured debt (ABL). The notes will be guaranteed on a senior unsecured basis by each subsidiary guarantor of the asset-based revolver. Kaiser Aluminum Corporation, based in Foothill Ranch, California, currently operates 13 fabricating facilities throughout North America (12 in the US, and 1 in Canada). Kaiser produces value-added sheet, plate, extrusions, rod, bar, and tube primarily for aerospace, automotive, and general engineering market segments. The Company generated $1.51 billion in revenues in 2019. KLAUSNER LUMBER: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Klausner Lumber One LLC 17152 46th Trace Live Oak, FL 32060 Business Description: Klausner Lumber One LLC is a privately held company in the lumber & plywood products manufacturing industry. Klausner Lumber is 100% owned by non- debtor Klausner Holding USA, Inc. Chapter 11 Petition Date: April 30, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-11033 Debtor's General Bankruptcy Counsel: WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP Debtor's Local Bankruptcy Counsel: Daniel B. Butz, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 N. Market Street, #1600 Wilmington, DE 19801 Tel: 302-351-9348 Email: DButz@MNAT.com Debtor's Restructuring Advisor: ASGAARD CAPITAL LLC Debtor's Investment Banker: CYPRESS HOLDINGS LLC Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petition was signed by Leopold Stephan, president. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/Q1Ha5m List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. KHT Klausner Holz Trade/Loan $12,189,507 Thuringen GmbH Am Bahnhof 123 Saalburg-Ebersdorf 16 DE 07929 2. Klausner Holz Trade Debt $3,022,793 Sachsen GmbH Industriestrasse 1 Kodersdorf 14 14 DE 02923 3. Taylor Industrial Trade Debt $1,352,798 Construction, Inc. 1321 Shady Oak Lane Jasper, FL 32052 4. Klausner Trading Trade Debt $744,287 International GmbH BahnhofstraBe 13 Oberndorf in Tirol TAT 6372 5. Springer Maschinenfabrik AG Trade Debt $659,240 Hans-Springer-Strasse 2 Friesach / Karnten AT 9360 6. K&L Gates, LLP Legal Services $540,767 Attn: April Boyer 200 South Biscayne Boulevard Suite 3900 Miami, FL 33131 7. Four Rivers Land & Trade Debt $422,704 Timber Company 1700 Foley Lane Perry, FL 32347 8. KHN Klausner Holz Loan $400,000 Niedersachsen Am Bahnhof 123 Saalburg-Ebersdorf 16 DE 07929 9. Sunbelt Rentals, Inc. Trade Debt $324,991 2341 Deerfield Drive Fort Mill, SC 29715 10. M.A. Rigoni, Inc. Trade Debt $286,050 2365 North US 19 Perry, FL 32347 11. Dixie Industrial, Inc. Trade Debt $269,908 5349 Highway Avenue Jacksonville, FL 32254 12. Peninsula Pipeline Trade Debt $244,400 PO Box 960 Winter Haven, FL 33882 13. U.S. Lumber Coalition Trade Debt $175,185 1750 K Street, NW, Suite 800 Washington, DC20006 14. Alford Timber Inc. Trade Debt $148,777 3816 Reid Street Palatka, FL 32177 15. Cogburn Bros., Inc. Trade Debt $118,923 3300 Faye Road Jacksonville, FL 32226 16. MAHILD Drying Trade Debt $116,876 Technologies GmbH Meisenweg 1 Nurtingen DE 72622 17. W.W. Gay Fire Trade Debt $113,493 Systems, Inc. 522 Stockton Street Jacksonville, FL 32204 18. Big Bend Timber Trade Debt $112,150 Services, LLC 2182 S Jefferson Monticello, FL 32344 19. Pierce Timber Trade Debt $84,160 Company, Inc. 2943 Bob Bowen Road Blackshear, GA 31516 20. Valdosta #1, Inc. Trade Debt $82,175 178 Bonhomie Road Hattiesburg, MS 39401 KRONOS WORLDWIDE: Fitch Alters Outlook on 'B+' LT IDR to Negative ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of Kronos Worldwide Inc. and its wholly owned subsidiary, Kronos International, Inc. at 'B+'. The Rating Outlook has been revised to Negative from Stable. Kronos' ratings reflect its leverage to the TiO2 industry and Fitch's expectations for negative free cash flow generation and total debt/EBITDA above 4.0x in 2020 on weaker pricing in an uncertain demand environment. This is offset by the company's strong liquidity position, conservative financial strategy and low capex requirements. Fitch's base case projects Kronos will retain a net debt to EBITDA of around 1.0x throughout the forecast, which illustrates the company's strong liquidity and financial flexibility to endure extended periods of stress. Additionally, in the event of a volatile pricing environment, the company has the ability to cut its dividend, which it has done in prior periods. The Negative Outlook reflects the impact of lower TiO2 prices on the company's leverage metrics and the uncertainty surrounding the impact of coronavirus on demand and the timing of recovery. The Outlook could be stabilized on expectations for reduced TiO2 price volatility compared to prior periods of weaker demand. A downgrade could occur on expectations for a return to historical pricing volatility that results in Fitch's expectations for total debt/EBITDA to remain above 4.0x through 2021. KEY RATING DRIVERS Coronavirus Pressures Demand and Pricing: Demand for Kronos' products typically grows at global GDP levels given the broad range of applications across the housing, auto and general industrial end-markets. Prior to coronavirus, Fitch projected TiO2 demand growth in 2020 in the low-single digits and for modest price increases following two years of feedstock cost raises. Following the disruption related to coronavirus, Fitch anticipates a significant drop in demand for Kronos' products, remaining below pre-virus levels through the whole of 2021. Fitch expects TiO2 pricing declines to follow the significant drop in demand but that higher quality chloride and sulfate grade pricing will remain firmer compared to the lower quality sulfate TiO2 due to the contract structuring and supply stabilization efforts of the major western producers to reduce pricing volatility during periods of weaker demand. However, a prolonged period of weakened demand will likely continue to pressure prices throughout the TiO2 value chain. Stabilizing Feedstock Costs: Prices for both sulfate and chloride TiO2 feedstock increased in the back half of 2018 through 2019, and Fitch believes these have stabilized beginning in 2020. Fitch projects Kronos' EBITDA margins (11.1% at year-end 2019) will fall to around 8% in 2020 on weaker pricing and trend toward the low teens by the end of the forecast horizon due to an improved demand environment leading to modest TiO2 price increases and stable feedstock prices. The recent consolidation among TiO2 producers should strengthen their bargaining power in price negotiations with feedstock miners. Kronos purchases its chloride-grade feedstock on the open market but is able to offset some of its third-party exposure through its ilmenite mines in Norway, which supply nearly all of its European sulfate needs. Fitch estimates that Kronos is exposed to third-party feedstock suppliers for at least 75% of its feedstock requirements. Modest Debt Load: Fitch views Kronos' current debt load as modest when compared against Fitch's view of a normalized operating EBITDA for the company. Leverage is forecast to peak at 4.1x in 2020 on weak demand and pricing but improve to around 2.0x through the forecast period on a return to a more normalized operating environment. Additionally, the company's upcoming maturity payments are very light, averaging roughly $1 million per year until the notes come due in 2025. Fitch expects Kronos will be able to favorably refinance its secured notes prior to its maturity date in 2025. Lack of Diversification: Kronos is a pure play pigment producer that has no other business segments to act as a buffer in periods of volatility in the TiO2 industry. Fitch believes this exposure adds cash flow risk to the company's credit profile, as its financial results are highly dependent on the health of the pigment market. This concern is offset by Fitch's expectation that Kronos maintains robust liquidity throughout the forecast. Kronos believes it has leading market positions in both Europe and North America, but Fitch views the company as having limited ability to impact global market dynamics. Despite management's indication that it is the largest TiO2 producer in Europe, Fitch estimates the company's EBITDA generation at its European plants was severely limited during the previous downturn in TiO2 prices. DERIVATION SUMMARY Kronos' ratings reflect its relatively small size and lack of diversification compared to peers in the TiO2 space while acknowledging its low leverage and projected more stabilized cash flow profile stemming from the long-term expected pricing discipline within the TiO2 industry. Compared to industry leaders The Chemours Co. and Tronox Ltd. (pro forma the Critsal acquisition), Kronos has limited ability to influence TiO2 supply dynamics and, as a pure play pigment producer, has no other business segments to act as a buffer if periods of significant volatility in the TiO2 industry reappear. However, Kronos' debt load is modest, and Fitch calculated gross leverage for the company is generally at or below 2.0x, which has helped offset its lack of diversification. Fitch believes the company will maintain robust liquidity throughout the forecast and that leverage will peak in 2020 but trend back toward 2.0x thereafter. KEY ASSUMPTIONS -- Revenue decline of approximately 20% in 2020 and recovering toward 2019 revenue by 2022. Growth at GDP levels thereafter. -- EBITDA margins decline in 2020 to around 8% and trend toward the low double-digits thereafter. -- Capex at around 4% of sales annually. -- Dividends of $70 million to $75 million annually. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Kronos would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Fitch used a going concern EBITDA of $145 million to reflect what it would view as a mid-cycle amount in a post-bankruptcy scenario, which would likely be around 2014/2016 levels. The 5.0x multiple acknowledges the commoditized nature of Kronos' TiO2 products as well as its lack of diversification. While Fitch drew $215 million under Kronos' two revolvers, the $125 million North American facility is an ABL that would likely not have the full amount available in a distressed environment. The EUR90 million European revolver also has very restrictive financial covenants that have effectively prohibited the company from drawing on the revolver at all and would almost certainly limit availability in a distressed scenario. Under this scenario, Kronos' revolvers correspond to an 'RR1' recovery while its secured note has a recovery rating corresponding to 'RR2'. Fitch used $110 million and $490 million as the converted U.S. dollar amount of Kronos' EUR ABL and notes for these calculations. Fitch believes this amount generally represents the average amount outstanding when converted to U.S. dollars. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- Increase in size, scale or diversification and total debt to EBITDA sustained around 3.0x. -- Demonstrated commitment to maintenance of robust financial flexibility. Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- Structural deterioration in the TiO2 market leading to expectations of negative FCF generation, weakened EBITDA margins and reduced financial flexibility. -- Total debt to EBITDA sustained above 4.0x. -- Material debt-funded dividend payments or acquisition activity. BEST/WORST CASE RATING SCENARIO International scale credit 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 Robust Liquidity: As of Dec. 31, 2019, Kronos had $390.8 million of cash and cash equivalents on its balance sheet and $205.6 million of availability between its North American and European facilities. In an extended period of stress, the company has the ability to cut its dividend payment, and paired with modest capex requirements and a light maturity schedule, Fitch believes the company will maintain robust liquidity throughout the forecast period. 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 The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). L BRANDS: Moody's Cuts CFR to B1, On Review for Downgrade --------------------------------------------------------- Moody's Investors Service downgraded all ratings of L Brands, Inc. including its Corporate Family Rating to B1 from Ba3 and its Probability of Default Rating to B1-PD from Ba3-PD. The company's existing senior unsecured guaranteed notes were also downgraded to B1 from Ba3 and the senior unsecured unguaranteed notes were downgraded to B3 from B2. The Speculative Grade Liquidity Rating was lowered to SGL-3 for SGL-2. Ratings were placed on review for further downgrade. "The downgrade reflects that the completion of the spinoff of Victoria's Secret is at significant risk and is certainly delayed as Sycamore Partners delivered notice to terminate the sale of a 55% interest in Victoria's Secret", said Vice President Christina Boni. "The company's litigation of the termination notice may not be successful or may result in less favorable terms. Also, the delay in the potential closing will increase L Brands cash burn as its works on a turnaround at the Victoria Secret brand in the midst of the disruption posed by COVID-19" Boni added. Downgrades: Issuer: L Brands, Inc. Probability of Default Rating, Downgraded to B1-PD from Ba3-PD; Placed Under Review for further Downgrade Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Corporate Family Rating, Downgraded to B1 from Ba3; Placed Under Review for further Downgrade Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD6) from B2 (LGD6); Placed Under Review for further Downgrade Gtd Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD4) from Ba3 (LGD4); Placed Under Review for further Downgrade Outlook Actions: Issuer: L Brands, Inc. Outlook, Changed To Rating Under Review From Negative RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS 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 specialty 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 L Brands' credit profile, including its exposure to store closures, China and consumer demand, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and L Brands 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 L Brands of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. L Brands' B1 CFR rating is supported by governance considerations including the suspension of its dividend in response to the disruption posed by COVID-19. The risk of the recently announced spinoff of Victoria's Secret not being completed poses a further cash drain on the company. Termination of the transaction would leave the company with Victoria's Secret which was underperforming prior to COVID-19 and will be difficult to turnaround in the midst of the current environment. The rating is also supported by its strong Bath & Body Works operations. The company has adequate liquidity and currently moderate leverage with debt to EBITDA of about 3.6x at February 1, 2020. However, given the store closures and weakened consumer demand related to COVID-19, Moody's expects credit metrics to weaken during 2020. L Brands benefits from significant scale with revenues of about $12.9 billion, when including Victoria's Secret. Its merchandising strategy and supply chain have historically enabled the company to ensure product freshness and higher inventory turns relative to other specialty retail operators. The review for downgrade acknowledges L Brands' persistent declines in earnings at Victoria's Secret prior to COVID-19 and will assess the existing business and what operational strain that a termination of the spin-off would impose. The review will also assess the performance of the overall business in light of a COVID-19 and the ensuing decline in consumer demand. The ability and plan to repay or refinance upcoming maturities well in advance will also be considered. Any change in terms or a termination of the spin-off of Victoria's Secret could change its risk profile significantly. Any material reduction in its revolver size that reduces liquidity would also be viewed negatively. The review will also assess the company's financial strategy which is expected to remain conservative. An upgrade is currently unlikely given the review for downgrade. However, an upgrade would require consistency of performance, good liquidity and conservative financial policy. Quantitatively, debt to EBITDA would need to approach 4.0x and EBIT to interest expense above 2.5x for an upgrade. Ratings could be confirmed should it become likely that the Victoria's Secret's transaction will close on economic terms. A confirmation would also require an adequate liquidity profile including addressing its debt maturities in a timely manner and that the remaining company's earnings are on track to return to within 80% of fiscal 2019 EBITDA. Ratings could be downgraded should it be assessed that the Victoria's Secret transaction is unlikely to close on economic terms or debt maturities are not be addressed well in advance or liquidity deteriorates. Ratings could also be downgraded should it is determined that operations are not positioned to return to within 70% of fiscal 2019 EBITDA. Headquartered in Columbus, Ohio, L Brands, Inc. operates 2,920 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China, and its brands are also sold in 722 franchised locations worldwide as of February 1, 2020. Its brands include Victoria's Secret, Bath & Body Works, and PINK. LAKEWAY PUBLISHERS: May 26 Plan Confirmation Hearing Set -------------------------------------------------------- On April 14, 2020, the U.S. Bankruptcy Court for the Eastern District of Tennessee held a hearing to consider the amended disclosure statements filed by Debtors Lakeway Publishers, Inc., and Lakeway Publishers of Missouri, Inc. Judge Marcia Phillips Parsons approved the amended disclosure statements and established the following dates and deadlines: * May 19, 2020, is fixed as the last day for returning a ballot accepting or rejecting the plans. * May 19, 2020, is fixed as the last day for filing with the clerk of court objections to confirmation of the plans. * May 26, 2020, at 9:00 a.m., by telephone with Judge Parsons is the preliminary hearing on confirmation of the plans. A full-text copy of the order dated April 14, 2020, is available at https://tinyurl.com/yburcfr3 from PacerMonitor at no charge. About Lakeway Publishers Lakeway Publishers, Inc., is a multi-state publisher of newspapers, magazines and special publications. Lakeway owns and operates community newspapers and magazines in Tennessee, Missouri, Virginia, and Florida. Lakeway was incorporated in 1966 and is based in Morristown, Tenn. Lakeway Publishers, Inc., and affiliate Lakeway Publishers of Missouri, Inc. each filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Lead Case No. 19-51163) on May 31, 2019. In the petitions signed by Jack R. Fishman, president, Lakeway Publishers, Inc., disclosed $20,884,027 in assets and $9,245,645 in liabilities while Lakeway Publishers of Missouri listed $7,047,972 in assets and $9,206,193 in liabilities. The Debtors tapped Quist, Fitzpatrick & Jarrard, PLLC, led by Ryan E. Jarrard, as bankruptcy counsel; and Burnette Dobson & Pinchak, as special counsel. LANDAU BKN HOLDINGS: Case Summary & 12 Unsecured Creditors ---------------------------------------------------------- Debtor: Landau BKN Holdings, LLC 7175 E. Camelback Rd. #707 Scottsdale, AZ 85251 Chapter 11 Petition Date: May 1, 2020 Court: United States Bankruptcy Court District of Arizona Case No.: 20-04622 Debtor's Counsel: Patrick Keery, Esq. KEERY MCCUE, PLLC 6803 E. Main Street Suite 1116 Scottsdale, AZ 85251 Tel: (480) 478-0709 E-mail: pfk@keerymccue.com Total Assets: $2,643,172 Total Liabilities: $4,905,531 The petition was signed by Chad Landau, managing member. A copy of the petition containing, among other items, a list of the Debtor's 12 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/Szkklk LANDS' END: S&P Downgrades ICR to 'B-' on COVID-19 Impact --------------------------------------------------------- S&P Global Ratings lowered its ratings on Lands' End Inc., including the issuer credit rating, to 'B-' from 'B'. All ratings remain on CreditWatch with negative implications. "The downgrade reflects our expectation for performance pressures from the coronavirus pandemic leading to a near-term increase in leverage. We believe the company's liquidity is materially weakened as the term loan facility has come current. Refinancing is complicated by COVID-19 related market turmoil," S&P said. "We expect to resolve the CreditWatch when we have greater visibility into Lands' End's ability to address its term loan maturity, which we anticipate over the next several months. We could affirm the rating if the company addresses the maturity and we continue to expect depressed macroeconomic conditions to rebound. If we believe the prospects for refinancing have materially worsened and that the company is unlikely to address its maturity, we could lower the rating multiple notches," S&P said. LESBRAN GROUP: Seeks to Hire Thomas E. Crowe as Legal Counsel ------------------------------------------------------------- Lesbran Group, LLC, filed an amended application seeking approval from the U.S. Bankruptcy Court for the District of Nevada to hire Thomas E. Crowe Professional Law Corporation as its legal counsel. The firm will perform all services relating to the completion of the Chapter 11 proceedings, including 341 meeting, preparation of all appropriate orders, filing of all evidence of insurance, etc., filing of monthly operating reports, and all other necessary and essential items to the successful completion of the Chapter 11 proceeding. The firm will be paid at these rates: Attorney $425 Paralegal $175 The Debtor paid the firm a retainer of $3,283, plus $1,717 for the filing fee. Thomas Crowe, Esq., disclosed in court filings that his firm has no interest materially adverse to the interest of the Debtor's bankruptcy estate and creditors. The firm can be reached through: Thomas E. Crowe, Esq. Thomas E. Crowe Professional Law Corporation 2830 S. Jones Blvd. Las Vegas, Nevada 89146 Phone: (702) 794-0373 Email: tcrowe@thomascrowelaw.com About Lesbran Group Lesbran Group, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-11294) on March 5, 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 August B. Landis oversees the case. The Debtor tapped Thomas E. Crowe Professional Law Corporation as its legal counsel. LINDBLAD EXPEDITIONS: S&P Cuts ICR to B; Ratings on Watch Negative ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on expedition cruising and adventure travel experiences provider Lindblad Expeditions Holdings Inc. to 'B' from 'B+'. S&P also lowered all issue-level ratings on the company in line with the lowering of the issuer credit rating. All ratings remain on CreditWatch with negative implications. "The downgrade to 'B' reflects a significant spike in leverage in 2020 because of a temporary suspension of cruises into the third quarter and our view that leverage will likely remain elevated in the mid-6x area in 2021 even in our assumed recovery scenario. In our assumed containment scenario, we believe Lindblad can begin to recover starting at end of the third quarter of 2020 and into 2021. However, a global recession and lingering travel fears could prolong recovery and affect consumer discretionary spending. As a result, we believe Lindblad's adjusted leverage might remain high, in the mid-6x area, in 2021, even in our assumed recovery scenario. This follows a significant deterioration in credit measures and liquidity in 2020 because of a meaningful loss of revenue and cash flow from the COVID-19 pandemic and the suspension of cruising for at least several months," S&P said. In resolving the CreditWatch listing, S&P will monitor Lindblad's efforts to manage liquidity, including steps it might take to minimize the cash burn while operations are suspended, potential further reductions in capital spending, and potential additional financing transactions that might bolster liquidity. It will also monitor the pace of cash refunds and booking trends through 2021 and their impact on liquidity in 2020. S&P will also continue to monitor efforts to contain the virus and assess how the pandemic might alter or weaken travel and cruise demand over the longer term. "We could lower the ratings if we no longer believed that Lindblad's liquidity would be sufficient to cover our assumed cash burn this year. In addition, we could lower the ratings if the suspension of sailings extended beyond the third quarter or cruise recovery were longer or weaker than we currently assume. In the event we no longer believed that Lindblad had a plausible path to reduce S&P Global Ratings' adjusted leverage below 6.5x in 2021, incorporating the benefit of new ship deliveries that occur later in the year, we could also lower ratings," S&P said. LOGIX HOLDING: Moody's Cuts CFR to Caa1 on Very Weak Liquidity -------------------------------------------------------------- Moody's Investors Service downgraded Logix Holding Company, LLC's Corporate Family Rating to Caa1, from B3, Probability of Default Rating to Caa1-PD, from B3-PD, and senior secured bank credit facilities rating to B3, from B2. The outlook is negative. The rating action reflects a very weak liquidity profile, declining revenue, and high leverage. Downgrades: Issuer: Logix Holding Company, LLC Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Bank Credit Facilities, Downgraded to B3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: Logix Holding Company, LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE Logix's credit profile is constrained by its small scale, very weak liquidity profile, high leverage, and weak market position with declining revenues. Governance risk is moderate with private equity ownership, a capital-intensive growth strategy, and a financial policy which tolerates high leverage that will rise above 7x. The Company operates in Texas, a very large but very competitive market in which it appears to be losing market share evidenced by a falling revenue. Additionally, Moody's believes Logix has some exposure to small and medium-sized businesses which are likely to be most negatively impacted by the market disruption caused by the current pandemic. Combined with its small scale, burden of fixed costs, and a significant number of low-profit, off-net customers, the company generates limited free cash flow. With little cash and limited to no access to alternate sources, it has a very weak liquidity profile. Short of a material and favorable change in operating performance, Moody's believes the current capital structure is unsustainable without a significant injection of equity. Despite the weak credit profile, Moody's views positively the strong market demand for broadband / fiber services. The company also has large number of customers and subscription-based business model with contracted recurring revenues that provides a degree of visibility. The B3 rating on the senior secured bank credit facilities, secured on a first lien basis by substantially all assets, reflects the probability of default of the company as reflected in the Caa1-PD Probability of Default rating, 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' priority of claims/ranking in the capital structure. This includes the subordinated seller note which provides loss absorption, lifting the first lien instruments one notch above the CFR. Trade payables and lease rejection claims are unrated, and insignificant to rated instruments. The rapid and widening spread of coronavirus, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive shock that is unprecedented in 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 are most sensitive to consumer demand and sentiment, including global passenger airlines, lodging and cruise, autos, as well as those in the oil & gas sector most negatively affected by the oil price shock. Lower-rated issuers are most vulnerable to these unprecedented operating conditions and to shifts in market sentiment that curtail credit availability. Moody's will take rating actions as warranted to reflect the breadth and severity of the shock, and the broad deterioration in credit quality that it has triggered. The negative outlook reflects its belief that absent a turnaround in operating performance, the capital structure is currently unsustainable without a substantial injection of equity capital. Moody's projects leverage will rise above 7.0x, with limited to negative free cash flow available to repay debt even with management's aggressive effort to preserve cash. Moody's expects the Company to significantly reduce capital expenditures, spending only the minimum required to maintain the network (approximately 5% of revenue) over the next 12-18 months. Moody's expects this lack of investment will further weaken its already challenged competitive position, contributing to revenue declines in the high-single digit percent range, driven by subscriber losses. Moody's believes the company will have up to $40 million in total cash sources (cash and EBITDA) to cover debt service costs (mandatory amortization and interest) totaling close to $20 million over the next 12 months. That leaves very little cushion, without any other sources of readily available liquidity, to cover required maintenance capex and working capital needs. Moody's expects that LOGIX will have very weak liquidity over the next 12 months. Moody's expects negative operating cash flow in at least one quarter, minimal cash balances, and a fully drawn $20 million revolver. The revolver is subject to a senior secured leverage covenant. Moody's believes there will be modest to limited headroom under the covenant in certain quarters. The company owns fiber assets that Moody's believes are easily divisible, highly valuable, and readily saleable. However, these are fully encumbered by the bank facilities which require any sales proceeds to be applied toward debt repayment before general corporate purposes. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider a positive rating action if there was a significant equity infusion. A positive rating action could also be considered with an organically improved credit profile reflected in a stronger liquidity profile and positive revenue growth, considered in combination with an improved business model, with a larger mix of on-net customers that generate higher profits and cash flows. Moody's would expect this to translate into free cash flow before estimated non-maintenance capex / debt (Moody's adjusted) that is sustained above 5%, and leverage sustained below 6.0x. Moody's could consider a downgrade if Moody's believes the probability of default increases or estimate recovery at default decreases. Logix, with headquarters in Houston, TX, is a fiber-based network infrastructure operator. Logix provides fiber-based data and voice services as well as data center access to enterprise and carrier customers. Logix has more than 6,500 fiber route miles, serving more than 10,000 enterprise and carrier customers across Texas. Logix also connects to 100 data centers in Texas. Revenue for year ended December 31, 2019 was approximately $151 million. LONESTAR RESOURCES: BDO USA LLP Raises Going Concern Doubt ---------------------------------------------------------- Lonestar Resources US Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss (attributable to common stockholders) of $111,563,000 on $195,152,000 of total revenues for the year ended Dec. 31, 2019, compared to a net income (attributable to common stockholders) of $11,532,000 on $201,169,000 of total revenues for the year ended in 2018. The audit report of BDO USA, LLP states that the Company did not satisfy certain covenants under the Company's revolving credit facility as of December 31, 2019 and does not anticipate maintaining compliance with the consolidated current ratio covenant over the next twelve months, which could lead to acceleration of the Company's debt obligations. These matters 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 $720,779,000, total liabilities of $599,892,000, and a total stockholders' equity of $120,887,000. A copy of the Form 10-K is available at: https://is.gd/6JpicN Lonestar Resources US Inc., an independent oil and gas company, engages in the acquisition, development, and production of unconventional oil, natural gas liquids, and natural gas properties in the United States. It primarily focuses on Eagle Ford Shale properties that cover an area of 53,831 net acres in Texas counties. The company was incorporated in 2015 and is headquartered in Fort Worth, Texas. LORD & TAYLOR: Reportedly Exploring Filing for Bankruptcy --------------------------------------------------------- Lord & Taylor LLC is exploring filing for bankruptcy after it was forced to temporarily close all of its 38 U.S. department stores in the wave of the coronavirus pandemic, Reuters, reported, citing people familiar with the matter. The New York-based luxury retailer is considering several options, including trying to negotiate relief from creditors and finding additional financing, and hasn't made a final decision, Reuters' sources said. Fashion rental service start-up Le Tote bought Lord & Taylor in 2019 from Saks Fifth Avenue owner Hudson's Bay Company for C$100 million. Hudson's Bay kept ownership of some of Lord & Taylor's real estate and assumed responsibility for its rent payments, amounting to tens of millions of dollars a year. PYMNTS.com notes that Lord & Taylor now joins retailer Neiman Marcus, in considering a bankruptcy filing as the COVID-19 lockdown continues to decimate non-essential retail. About Lord & Taylor Privately-held Lord & Taylor LLC -- http://www.lordandtaylor.com/ -- is a New York-based luxury department store that offers luxury products or women such as belts, shoes, clothes, handbags as well as accessories. Founded in 1826, the oldest department store in the country grew to beyond 50 locations and 66,000 employees nationwide. The chain had 38 stores that were in operation before the Covid-19 outbreak. LOVE FREIGHTWAYS: Allowed to Use Cash Collateral on Interim Basis ----------------------------------------------------------------- Judge August Landis of the U.S. Bankruptcy Court for the District of Nevada authorized Love Freightways, Inc., to use cash collateral on an interim basis, through the final hearing which will be held on May 6, 2020 at 1:30 p.m. Judge Landis granted all Secured Creditors listed in the Debtor's Motion a valid, perfected, and enforceable new priority replacement lien upon all property of the Debtor and its bankruptcy estate, whether now existing or hereafter acquired or arising from any pre-petition collateral, and all proceeds, rents, products, or profits thereof. Such replacements liens are granted only to the extent of any decrease in the value of the collateral securing such Secured Creditor's alleged security interests (to the extent properly perfected) resulting from the use of cash collateral herein, and only if, to the extent that and with the same priority that such secured creditors held a valid and perfected security interest in such collateral pre-petition. About Love Freightways Love Freightways, Inc., operates a trucking carrier service that provides a wide range of services, including regional, long haul, dry-van, air-ride, and expedited services. The Debtor is owned and controlled by its principal, Nemanja Lovre. Love Freightways, Inc. filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-11469) on March 13, 2020, listing under $1 million in both assets and liabilities. Matthew C. Zirzow, Esq., at LARSON ZIRZOW KAPLAN & COTTNER, represents the Debtor. MACY'S INC: S&P Lowers ICR to 'B+'; Outlook Negative ---------------------------------------------------- S&P Global Ratings lowered all of its ratings on mall-based department store operator Macy's Inc., including the issuer credit rating to 'B+' from 'BB'. "The downgrade reflects greater anticipated stress on performance and our expectation that adjusted leverage will exceed 4x through 2021. Our economists' now forecast a severe contraction in the domestic economy, with real GDP contracting 5.2% in 2020, reflecting a longer and more intense economic impact from the coronavirus pandemic than previous. We expect recessionary conditions will depress consumer confidence and demand for Macy's discretionary merchandise mix. We assume a gradual re-opening of nonessential retail stores through the second quarter depending on federal and state government guidelines but for foot traffic to remain low and economic overhang to reduce demand. Based on our updated macroeconomic and revenue assumptions, we now anticipate leverage will be meaningfully above our prior downside threshold of 4x in 2021 even after further economic recovery as lingering impacts of the weak economy, ongoing secular pressure for department stores, and anticipated acceleration of Macy's banner closures reduce nominal EBITDA from historic levels. As a result we are revising our financial risk profile assessment to aggressive from significant," S&P said. The negative outlook reflects the possibility of a downgrade if performance or liquidity deteriorates further possibly due to further expansion of coronavirus shutdowns or if demand does not rebound meaningfully as stores do reopen. "We could lower the ratings on Macy's if sales and profits remain depressed from a prolonged pandemic or macroeconomic slump, or from a weakened competitive position such that we expect leverage to be sustained at more than 5x. We could also lower the rating if cash burn fails to recede such that we believe the company's existing cash balance is being depleted without offsetting measures to supplement liquidity sources or if we do not expect meaningfully positive free operating cash flow generation in 2021 and beyond. We could also lower the ratings if we believe the company would have difficulties securing a waiver or amendment to its credit agreement under adequate terms, or repaying or refinancing debt maturities in a timely manner," S&P said. "We could revise the outlook to stable if we expect Macy's to sustain leverage of less than 5x and generate meaningfully positive free operating cash flow through operations as opposed to asset sale proceeds. In this scenario, we would also expect the company to maintain sufficient liquidity to fund store re-openings and seasonal inventory purchases and to address debt maturities," the rating agency said. MATRIX INDUSTRIES: Court Approves Disclosure Statement ------------------------------------------------------ Matrix Industries, Inc., filed a motion for an entry of an order approving (I) Disclosure Statement, as Modified (Ii) Form and manner of notices, (Iii) Form of ballots and (IV) Solicitation materials and solicitation procedures. Judge Robert E. Grossman has ordered that the Motion is granted and the Disclosure Statement approved. A confirmation hearing will be held before The Honorable Robert E. Grossman, United States Bankruptcy Judge, at the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, Courtroom 501, New York, New York 10004, on May 19, 2020 at 10:00 a. m. (prevailing Eastern time), Any objections to the Plan must be filed and served no later than 4:00 p.m. (prevailing Eastern Time) (on May 12, 2020 at 4:00 p.m.) In lieu of a ballot, the Debtor will distribute by the Solicitation Date, a Notification of Non-Voting Status to holders of claims that are deemed to accept or deemed to reject the Plan. About Matrix Industries Based in Great Neck, N.Y., Matrix Industries Inc. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-13835) on Dec. 2, 2019, listing under $2 million on both assets and liabilities. Judge Robert E. Grossman oversees the case. Joel Shafferman, Esq., at Shafferman & Feldman LLP, is the Debtor's legal counsel. MCIG INC: Accumulated Deficit Casts Going Concern Doubt ------------------------------------------------------- mCig, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss (attributable to controlling interest) of $644,664 on $33,415 of sales for the three months ended Jan. 31, 2020, compared to a net loss (attributable to controlling interest) of $750,644 on $763,084 of sales for the same period in 2019. At Jan. 31, 2020, the Company had total assets of $6,079,346, total liabilities of $758,713, and $5,337,535 in total stockholders' equity. The Company stated that it has suffered losses from operations and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available at: https://is.gd/WbdLLy mCig, Inc., manufactures, markets, and distributes electronic cigarettes, vaporizers, and accessories under the mCig brand name in the United States. It offers electronic cigarettes and related products through its online store mcig.org, as well as through the company's wholesale, distributor, and retail programs. MIAMI AIR INTERNATIONAL: Hires Cassel Salpeter as Investment Banker ------------------------------------------------------------------- Miami Air International, Inc. seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Cassel Salpeter & Co., LLC as its investment banker. Miami Air requires Cassel Salpeter to provide these services: General Advisory Services (i) review and analyze the Debtor's business, operations and financial projections; (ii) assist in the determination of a range of values for the Debtor on a going concern basis; and (iii) provide testimony, as necessary, with respect to matters on which Cassel Salepter has been engaged to advise under its Engagement Letter in any proceeding before the Bankruptcy Court. Sale Transaction Services (i) assist the Debtor in identifying and evaluating candidates for any potential Sale Transaction; (ii) advise the Debtor in connection with negotiations, and aiding in the consummation of any such Sale Transaction; (iii) advise with regards to possible affiliations with strategic operators; and (iv) advise with regards to divestitures of non-strategic assets. Cassel Salpeter will be paid as follows: a) Initial Fee. A non-refundable, cash fee, payable by check or wire transfer in immediately available U.S. funds, of: (i) $50,000 upon entry of final order approving the Application, and (ii) $50,000 thirty days from the date of the Engagement Letter. b) Sale Transaction Fee. If the Debtor consummates a Sale Transaction, the Debtor shall pay to Cassel Salpeter a sale transaction fee (Sale Transaction Fee), payable by check or wire transfer in immediately available U.S. funds at the closing of the Sale Transaction, equal to $500,000 plus 2.0 percent of the Sale Consideration in excess of $10 million. Notwithstanding the foregoing, in the event any Sale Transaction(s) includes deferred and/or contingent payment(s), the Debtor shall pay to Cassel Salpeter the portion of any Sale Transaction Fee relating thereto, payable in cash by check or wire transfer in immediately available U.S. funds, if and when such deferred and/or contingent payment(s) is actually paid. c) Multiple Closings. If more than one Sale Transaction is consummated, Cassel Salpeter shall be compensated based on the aggregate Consideration of all Sale Transactions. d) Fee Obligation. Cassel Salpeter shall be entitled to the fees if any Sale Transaction is consummated during the Term, or within two (2) years after the date of any termination or expiration of the Engagement Letter (Tail Period), or the Debtor, or its security holders, enters into any definitive agreement regarding a Sale Transaction during the Term or the Tail Period that subsequently closes (whether during or after the Tail Period), regardless of whether Cassel Salpeter actually procured the agreement regarding the Sale Transaction. James Cassel, chairman of Cassel Salpeter, disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: James S. Cassel Cassel Salpeter & Co., LLC 801 Brickell Avenue, Suite 1900 Miami, FL 33131 Office: 305-438-7701 Fax: 305-438-7710 Email: jcassel@cs-ib.com About Miami Air International Miami Air International, Inc., based in Miami, FL, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-13924) on March 24, 2020. In the petition signed by Annette Eckerle, authorized officer, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Jay A. Cristol oversees the case. Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., serves as bankruptcy counsel. MIAMI AIR: Aviation Accident Litigation Firm Woos Claimants ----------------------------------------------------------- The law firm Sphorer Dodd notes that on March 26, 2020, Miami-based charter plane carrier Miami Air International filed for Chapter 11 Reorganization and bankruptcy protection due to coronavirus-related losses, prompting concerns from the Florida legal community that Miami Air will evade financial accountability for a major plane crash last year. In May 2019, Miami Air Flight 293 crashed into the St. Johns River with nearly 140 passengers on board, many of whom were veterans and active service members returning to Jacksonville from the U.S. Naval Base in Guantanamo Bay. Many passengers were severely injured in the crash, which has largely been attributed to pilot error, poor weather, and improper aircraft maintenance. When airlines fail to perform essential maintenance checks and meet basic safety standards, these companies can be held civilly liable for passenger losses in the event of a plane crash. Because Chapter 11 bankruptcy protection allows a company to re-organize its assets and operations, it is possible that Miami Air Flight 293 crash victims may see a shortened timeline for their injury claims. If the company is forced to shut down, victims may never receive compensation for their life-altering injuries. Nationally recognized for high-stakes aviation accident litigation, the attorneys at Spohrer Dodd are currently representing at least 20 plaintiffs involved in the Miami Air Flight 293 incident, and they are also accepting new cases related to this plane crash. At this time, Spohrer Dodd invites anyone with a claim to come forward and review their legal options, to ensure that victims can seek fair recovery. About Miami Air International Headquartered in Dade County, Miami, Florida, Miami Air International -– https://www.miamiair.com/ -- is an international and domestic charter provider owned by TSI Holding Co. that offers charter flights to different groups like professional sports teams, cruise operators, political candidates, entertainers, and U.S. military. Miami Air International filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-13924) on March 24, 2020. In the petition signed by Annette Eckerle, authorized officer, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Jay A. Cristol oversees the case. Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., serves as bankruptcy counsel to the Debtor. MICROCURRENT RESEARCH: Hires Buddy D. Ford as Legal Counsel ----------------------------------------------------------- Microcurrent Research and Education, LLC seeks authority from the US Bankruptcy Court for the Middle District of Florida to hire law firm of Buddy D. Ford, P.A., as its bankruptcy counsel. The professional services Buddy D. Ford, P.A. will render are: a. analyze the financial situation, and render advice and assistance to the Debtor in determining whether to file a petition under the Bankruptcy Code; b. advise the Debtor with regard to the powers and duties of the debtor and as Debtor-in-possession in the continued operation of the business and management of the property of the estate; c. prepare and file petitions, schedules of assets and liabilities, statement of affairs, and other documents required by the Court; d. represent the Debtor at the Section 341 Creditors' meeting; e. give the Debtor legal advice with respect to its powers and duties as Debtor and as Debtor-in-possession in the continued operation of its business and management of its property; if appropriate; f. advise the Debtor with respect to its responsibilities in complying with the United States Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; g. prepare, on the behalf of the Debtor, necessary motions, pleadings, applications, answers, orders, complaints, and other legal papers and appear at hearings thereon; h. protect the interest of the Debtor in all matters pending before the court; i. represent the Debtor in negotiation with its creditors in the preparation of the Chapter 11 Plan; and j. perform all other legal services for Debtor and as Debtor-in-possession which may be necessary, and it is necessary for Debtor and as Debtor-in-possession to employ this attorney for such professional services. Buddy D. Ford, P.A. will be paid an hourly basis, with Buddy D. Ford paid at $425 per hour, senior associate attorneys at $375 per hour, junior associate attorneys at $300 per hour, senior paralegal services at $150 per hour, and jJunior paralegal services at $100 per hour. Buddy D. Ford, Esq., attests that his firm has no connection with the Debtor, the creditors, or any other party in interest, or any party in interest, or their respective attorneys. The Debtor paid an advance fee of $17,000.00 as follows: * $2,000 pre-filing fee retainer * $13,000 post-filing fee/cost retainer * $1,717 filing fee. The firm can be reached at: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 9301 West Hillsborough Avenue Tampa, FL 33615-3008 Tel: (813) 877-4669 Email: All@tampaesq.com About Microcurrent Research and Education Microcurrent Research and Education, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03018) on April 10, 2020, listing under $1 million on both assets and liabilities. Buddy D. Ford, P.A. is the Debtor's legal counsel. MILLS ELDER: Seeks to Hire Brian K. McMahon as Counsel ------------------------------------------------------ Mills Elder Law LLC seeks authority from the US Bankruptcy Code for the Southern District of Florida to employ Brian K. McMahon, P.A. as its legal counsel. The attorney will render these professional services: (a) give advice to the Debtor with respect to its powers and duties as a debtor-in-possession; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; (d) protect the interest of the Debtor in all matters pending before the court; (e) represent the Debtor in negotiation with its creditors in the preparation of a bankruptcy-exit plan. Brian K. McMahon, Esq. disclosed in court filings that he and his firm do not represent any interest adverse to the Debtor and its bankruptcy estate. The firm can be reached through: Brian K. McMahon, Esq. Brian K. McMahon, P.A. 1401 Forum Way, 6th Floor West palm Beach, FL 33401 Phone: (561) 478-2500 E-mail: briankmcmahon@gmail.com About Mills Elder Law LLC Mills Elder Law LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-14280) on April 7, 2020, listing under $1 million in both assets and liabilities. Brian K. McMahon, Esq. serves as the Debtor's counsel. MR. CAMPER: Court Approves Disclosure Statement ----------------------------------------------- Judge Meredith S. Grabill has ordered that the Original Disclosure Statement of Mr. Camper, LLC, as immaterially modified by the First Immaterial Modification and Second Immaterial Modification, is approved. A hearing to consider confirmation of the Plan shall be held on Wednesday, May 27, 2020 at 3:00 p.m. Central Time at the United States Bankruptcy Court for the Eastern District of Louisiana, 500 Poydras Street, Courtroom B-709, New Orleans, LA 70130. The last day to submit a ballot is fixed as Wednesday, May 20, 2020 at 5:00 p.m. Central Time. The last day for filing and serving any written objections or responses to confirmation of the Plan is fixed as Wednesday, May 20, 2020 at 5:00 p.m. Central Time. About Mr. Camper Mr. Camper, LLC -- https://www.jellystonela.com/ -- owns and operates the Yogi Bear's Jellystone Camp Resort. The facility features more than 450 wooded campsites, 75 cabins, swimming pools, fishing ponds, game room, mini golf, canoe, kayak and paddle boat rentals, RV storage, playground, wet "spray" ground, basketball court, baseball field, laundry facilities, store, and propane filling station. Mr. Camper sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 19-11775) on July 1, 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 case is assigned to Judge Elizabeth W. Magner. Richmond Law Firm, LLC, is the Debtor's counsel. MR. CAMPER: Unsecured Creditors to Get Full Payment Over 6 Years ---------------------------------------------------------------- Debtor Mr. Camper, LLC d/b/a Yogi Bear's Jellystone Park Camp Resort filed with the U.S. Bankruptcy Court for the Eastern District of Louisiana a Plan of Reorganization and a Disclosure Statement. Mr. Camper believes that under the new debt structure as provided under the Plan, the operations of Mr. Camper are positioned for profitable growth in the future, and that the Plan provides for the greatest value for distributions to the broadest range of creditors available under the circumstances. Class 7 Allowed General Unsecured Claims total $243,756. Each holder of an Allowed General Unsecured Claim will receive an amount equal to the amount of such Allowed General Unsecured Claim. Each holder of an Allowed General Unsecured Claim will through equal monthly installment payments in cash, of a total value, as of the Effective Date, equal to the allowed amount of such general unsecured claim, over a period ending not later than six years after the Effective Date. Mr. Camper estimates that the aggregate amount of monthly payments to holders of Allowed General Unsecured Claim will be $4,069. Class 8 consists of the membership interests in Mr. Camper. Maurice and Myra LeBlanc are the current holders of Interests. Their interests are deemed allowed under the Plan. Each holder of an Allowed Interest shall retain their Interest in Mr. Camper. Mr. Camper may continue to compensate Maurice and Myra LeBlanc in accordance with the Plan. The Debtor intends to continue operating its resort-style campground for the foreseeable future. However, pursuant to the agreement with Apex Bank, the Debtor intends to refinance its Plan obligations or, in the alternative, sell its resort-style campground within the 12-month period following the Effective Date. Mr. Camper's preferred option is refinancing the Apex Large Note Secured Claim so that it may continue to operate its resort-style campground. Prior to the Confirmation Hearing, Mr. Camper will approach local and national lenders, as well as members of the Yogi Bear campground network, about obtaining the funds needed to refinance the Apex Large Note Secured Claim. Using a proforma income statement with a 5-year horizon, the Debtor believes that it will have sufficient cash flow from the operation of its resort-style campground and cash on hand to fund payments under the Plan. The Debtor believes that confirmation is not likely to be followed by liquidation or the need for further reorganization. A full-text copy of the Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/y8erfjkm from PacerMonitor at no charge. The Debtor is represented by: RICHMOND LAW FIRM, LLC Ryan J. Richmond (La. Bar No. 30688) 17732 Highland Road, Suite G-228 Baton Rouge, LA 70810 Tel: (225) 572-2819 Fax: (225) 286-3046 E-mail: ryan@rjrichmondlaw.com - and - GERDES LAW FIRM, LLC Markus E. Gerdes 106 North Cypress Street P.O. Box 2862 Hammond, LA 70404 Tel: (985) 345-9404 Fax: (985) 543-0434 E-mail: Markus@gerdeslaw.net About Mr. Camper Mr. Camper, LLC -- https://www.jellystonela.com/ -- owns and operates the Yogi Bear's Jellystone Camp Resort. The facility features more than 450 wooded campsites, 75 cabins, swimming pools, fishing ponds, game room, mini golf, canoe, kayak and paddle boat rentals, RV storage, playground, wet "spray" ground, basketball court, baseball field, laundry facilities, store, and propane filling station. Mr. Camper sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 19-11775) on July 1, 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 case is assigned to Judge Elizabeth W. Magner. Richmond Law Firm, LLC, is the Debtor's counsel. MYSTIC TRANSPORTATION: Seeks to Hire Coan Lewendon as Counsel ------------------------------------------------------------- Mystic Transportation, LTD seeks authority from the United States Bankruptcy Court for the District of Connecticut to employ Coan, Lewendon, Gulliver & Miltenberger, LLC as its legal counsel. Mystic Transportation requires Coan Lewendon to: a. give the Debtor as debtor-in-possession legal advice with respect to its business, operations, and the management of its property; b. negotiate arrangements with creditors respecting their claims and treatment of their claims in a Plan of Reorganization; c. institute and defend such litigation in the bankruptcy court and other courts as counsel and the Debtor as debtor-in-possession consider necessary and appropriate for the conduct of its reorganization; d. prepare on behalf of the Debtor as debtor-in-possession necessary petitions, motions, answers, orders, reports, disclosure statements, plans and other papers; and e. perform all other legal services for the Debtor as debtor-in-possession which may be necessary herein. Coan Lewendon will be paid at these hourly rates: Partners $430 Counsel $400 Associates $250 Paralegals $95-$110 Coan Lewendon will also be reimbursed for reasonable out-of-pocket expenses incurred. Timothy D. Miltenberger, member of Coan Lewendon Gulliver & Miltenberger, 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. Coan Lewendon can be reached at: Timothy D. Miltenberger, Esq. Coan, Lewendon, Gulliver & Miltenberger, LLC 495 Orange Street New Haven, CT 06511 Tel: (203) 624-4756 About Mystic Transportation, LTD Mystic Transportation, LTD -- http://www.mystictransportation.com -- offers air freight courier and trucking services. Mystic Transportation, LTD filed a voluntary petition under Chapter 11 of the Bankruptcy Code (D. Conn. Case No. 20-20531) on April 10, 2020. In the petition signed by Sandra G. Worth, president, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Timothy D. Miltenberger, Esq. at Coan, Lewendon, Gulliver & Miltenberger, LLC, represents the Debtor as counsel. NATES AUTO REPAIR: May Interimly Use Cash Collateral Through May 7 ------------------------------------------------------------------ Judge Erik Kimball of the U.S. Bankruptcy Court for the Southern District of Florida authorized Nates Auto Repair & Performance, Inc. to use cash collateral on an interim basis through May 7, 2020 in accordance with the budget. The Debtor may use cash collateral with an adequate protection payment for On Deck Capital in the agreed amount of $356; for Records Company LLC in the amount of $66.67; and for Commercial Credit Group in the agreed amount of $4,703. On Deck, Records Company and CCG are each granted replacement liens on all assets held by the Debtor to the extent of the validity and priority, and of the same kind and nature, that existed pre-petition. However, under no circumstance will the Secured Lenders have a lien on any causes of action or proceeds of such causes of action arising under 11 U.S.C. sections 541, 542, 544, 547, 548, 549, 550, 551 or 553 or any proceeds derived therefrom. A final telephonic hearing will be conducted on May 7, 2020 at 10:30 a.m. About Nates Auto Repair Nates Auto Repair & Performance, Inc. -- https://allhookeduptowing.co/ -- provides 24-hour car & heavy truck towing and roadside services in Jupiter, Port St. Lucie, Stuart, Ft Pierce, & I-95 Florida. Nates Auto Repair & Performance, Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-12446) on Feb. 25, 2020. In the petition signed by Nathan Miskulin, president, the Debtor was estimated to have under $50,000 in assets and $1 million to $10 million in liabilities. Judge Erik P. Kimball oversees the case. Chad Van Horn, Esq. at VAN HORN LAW GROUP, P.A. serves as the Debtor's counsel. NAVIENT CORP: Fitch Lowers LT IDR & Sr. Unsec. Debt Rating to BB- ----------------------------------------------------------------- Fitch Ratings has downgraded Navient Corporation's Long-Term Issuer Default Rating and senior unsecured debt ratings to 'BB-' from 'BB'. The Rating Outlook remains Negative. Its rating actions have been taken as part of a peer review of seven publicly rated U.S. consumer finance companies that reflects a significant revision of Fitch's economic assumptions stemming from the coronavirus pandemic. KEY RATING DRIVERS The downgrade of Navient's ratings reflect the increase in its leverage as measured by debt to tangible equity (excluding the FFELP portfolio and the debt associated with it) over the past year, and Fitch's expectation that leverage is likely to remain elevated for the foreseeable future as a result of the significant negative economic impact of the coronavirus pandemic. Navient's reported adjusted tangible equity ratio in 1Q20 was 3.2% at March 31, 2020, down sharply from 7.6% at Dec. 31, 2019, driven by three primary factors: (1) the implementation of the current expected credit loss (CECL) accounting standard which reduced equity by $620 million; (2) a negative mark-to-market loss of an additional $394 million on its floor income derivative position that was attributable to the sharp decline in interest rates that brought the total unrealized loss to $629 million; and (3) accelerated share repurchases completed with Canyon Capital of $335 million. Fitch believes the negative impacts from CECL and hedge accounting on capital are more mechanical than financial in nature. However, even when these components are excluded, Fitch estimates Navient's debt to tangible equity on its private education loan portfolio was 10.1x at 1Q20, which is well above Fitch's 'bb' category quantitative benchmark range for capitalization and leverage of 5.0x-7.5x for finance and leasing companies. Fitch believes Navient's leverage could increase further as payment rates on loans slow this year. Additionally, while management indicated it would significantly slow private education refi loans in the current environment, a resumption of the robust growth in this segment, which is levered more highly (19x) than the legacy private education loan portfolio would also cause leverage to increase further over time. The Negative Outlook reflects the emergence of significant downside risk to its financial profile metrics resulting from the actions taken by federal and state governments to limit the spread of the coronavirus pandemic, which have led to sharp declines in U.S. economic activity. While federal government programs, including loans/grants to small businesses, enhanced unemployment insurance payments, and one time payments to low and middle income households combined with the extension of borrower payment deferrals or forbearance should help mitigate the financial implications from the pandemic, the severe reduction in economic activity presents significant downside risks for lenders. Fitch's Global Economic Outlook currently projects a sharp increase in the U.S. unemployment rate to 14% in 2Q20 before moderating in subsequent months to still nearly twice pre-crisis levels in 2021. The surge in unemployment stemming from the pandemic yielded an increase in Navient's forbearance rate on its private education loan portfolio to 6.9% at March 31, 2020, from 2.7% at year end. While Fitch believes forbearance programs should help mitigate defaults for those borrowers that are temporarily displaced, it could also delay the losses for those that will remain unemployed for an extended period. As a result of the weaker economic backdrop as well as the effects of CECL, Navient increased its loss reserve coverage on its private education loan portfolio to 7.1% in 1Q20 from 4.4% at 4Q19. Fitch believes Navient's private education loan portfolio should outperform other unsecured consumer loans given its borrowers are further removed from graduation (more seasoned) and its refi loan portfolio is targeted toward higher income professionals with advanced degrees; a cohort that is expected to be relatively less affected by the government shutdowns than the broader population. Nonetheless, the magnitude of credit losses will depend on the duration of business shutdowns and the proportion of borrowers that are able to regain employment once the economy "re-opens." In addition to higher expected credit losses, Navient's earnings are also likely to be pressured by a decline in revenue as its business services unit experiences sharply lower volume in several segments, including debt collection activities, and private education refi loan volume slows dramatically in the near term. While there are puts and takes to Navient's net interest margin with respect to the impact of lower market interest rates, widening/contraction between various interest rate benchmarks, and wider credit spreads, the impact of lower interest rates will likely be less impactful for Navient's revenue than other lenders. Fitch believes the company's operating expense structure is more fixed in nature than other consumer lenders that allocate a greater proportion of expenses to marketing and account origination. Rather, Navient's servicing costs could increase in the current environment as more borrowers experience financial difficulty and seek forbearance or loan restructuring. Fitch views Navient's funding and liquidity as sufficient to weather the current environment. The company had $1.1 billion of cash and $600 million of unencumbered loans as of March 31, 2020 compared with $500 million of unsecured debt maturities for the remainder of 2020. The remaining capacity on Navient's FFELP and private student loan warehouse facilities were $768 million and $539 million, respectively, as of the end of 1Q. Navient's funding mix remains predominantly secured, with 89% of its funding coming from securitizations and secured credit facilities and roughly 11% from unsecured debt at March 31, 2020. While payment rates are likely to slow in coming months, the company's previous forecast of $1.4 billion of cash flows from private education loans and $1.2 billion of cash flows from FFELP loans in 2020, even when haircut to reflect higher levels of forbearance, should be sufficient to fund operating expenses and upcoming debt maturities. The meaningful slowdown in private education loan originations should also add to liquidity in the near-term, as will the absence of meaningful share repurchase activity for the remainder of the year. The senior unsecured debt rating is equalized with Navient's IDR. The equalization reflects average recovery prospects under a stress scenario given the availability of unencumbered assets. Navient has an ESG Relevance Score of 4 for Exposure to Social Impacts due to its exposure to shift in social or consumer preferences as a result of an institution's social positions, or social and/or political disapproval of core activities which, in combination with other factors, impacts the rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade include a meaningful decrease in Navient's adjusted tangible common equity ratio over the next several quarters and/or a sustained increase in secured funding as a percentage of Navient's overall funding mix, such that unsecured debt represents less than 10% of the company's funding. Negative rating momentum could also occur from sustained core operating losses, an increase in shareholder distributions above Navient's core earnings, an inability to access the capital markets on economic terms, significant deterioration in credit performance, and/or an adverse outcome in the pending CFPB/state attorneys general legal actions against the company that significantly impairs its market position, liquidity and/or future profitability. Factors that could, individually or collectively, lead to positive rating action, including a revision of the Outlook back to Stable, include improved visibility of the company's credit performance and profitability outlook such that there is an increased level of confidence that Navient's performance relative to Fitch's benchmark metrics will remain within cyclical norms over the Outlook horizon, and the ability to demonstrate capital resiliency through the current severely adverse economic environment. Longer-term, meaningful improvements in core fee-business growth and operating performance, a demonstrated ability to successfully grow new businesses that enhance Navient's earnings capacity and a moderation in shareholder distributions could support positive ratings momentum. The senior unsecured debt ratings are primarily sensitive to changes in the Long-Term IDR of Navient and the availability of unencumbered assets. NAVISTAR INT'L: Fitch Lowers Senior Unsecured Notes to 'CCC/RR6' ---------------------------------------------------------------- Fitch Ratings has downgraded NAV's senior unsecured notes to 'CCC'/'RR6' from 'CCC+'/'RR5'. The downgrade reflects a corrected recovery analysis for the unsecured notes in a stress scenario. The Rating Outlook is Negative. KEY RATING DRIVERS On April 21, 2020 Fitch assigned a rating of 'BB-/RR1' to Navistar International Corporation's planned private offering of $600 senior secured notes which were completed April 27, 2020. At the same time, Fitch downgraded NAV's senior unsecured notes to 'CCC+/RR5' from 'B/RR3'. The 'CCC+/RR5' rating was based on a recovery analysis which considered a $500 million private offering of senior secured notes, which was the initial size of the issue. The use of the corrected, upsized $600 million amount for the new notes results in a lower estimated recovery range of 0%-10% compared to the original estimated range of 11%-30%. As a consequence of the revised recovery rating, the rating for existing senior unsecured notes is 'CCC/RR6'. NAV's ratings reflect the negative impact of the coronavirus pandemic on the company's heavy-duty truck market, exacerbating an industry downturn that was already under way. As a result of deteriorating demand for heavy- and medium-duty trucks, Fitch believes NAV's earnings, FCF and liquidity will be constrained for at least two years and that leverage will be materially higher until a recovery takes hold. Negative Rating Outlook: The Negative Rating Outlook incorporates risks to NAV's financial performance if the economic impact of the pandemic prevents a recovery in NAV's heavy-duty truck market beginning in 2021. Fitch's rating case includes negative FCF in 2020 in excess of $300 million, excluding the full impact of possible restructuring and other cost actions, and improved but still negative FCF in 2021. The ratings could be downgraded if actions to reduce costs and proceeds from the $600 million of new notes are insufficient to maintain minimum operating cash balances. Fitch estimates NAV requires approximately $1 billion of cash at fiscal year-end, although the amount can vary, to fund seasonal working capital requirements and maintain flexibility for other uses. The Rating Outlook could be revised to Stable if demand for heavy-duty trucks recovers solidly in 2021 accompanied by a return to positive FCF and lower leverage. Fitch expects leverage will be elevated through 2021 with debt/EBITDA above 6.0x in Fitch's rating case, which incorporates the additional debt used by NAV to boost liquidity and offset negative FCF. Debt/EBITDA was 3.4x at the end of fiscal 2019. Captive Support: Under its criteria for rating non-financial corporates, Fitch calculates an appropriate debt/equity ratio of 3.0x at financial services based on asset quality as well as funding and liquidity. Actual debt/equity at financial services as measured by Fitch, excluding intangible assets, was 2.8x as of Jan. 31, 2020. As a result, Fitch calculates a pro forma equity injection is not required. Fitch assumes NAV would fund any required equity injection through the use of available cash or debt. DERIVATION SUMMARY NAV has a weaker financial profile, including lower margins, FCF and liquidity, than other global heavy-duty truck original equipment manufacturers. These factors are important with respect to investing in the business and managing the business through industry cycles. Several OEMs are larger than NAV or are affiliates of global vehicle manufacturing companies, giving them greater access to financial and operational resources and markets. Peers include Daimler Trucks North America LLC (DTNA), a subsidiary of Daimler AG (BBB+/Stable); AB Volvo (BBB+/Positive); PACCAR Inc. (NPR); and MAN SE and Scania AB, which are part of Volkswagen AG's (BBB+/Stable) Traton Group. NAV's alliance with Traton mitigates concerns about NAV's smaller scale and weaker financial position compared with its global peers. Eighty-nine percent of NAV's consolidated revenue was located in the U.S. and Canada in 2019, which makes it more sensitive to industry cycles compared to competing OEMs that have greater geographic diversification. KEY ASSUMPTIONS -- Significant downturn in NAV's heavy-duty truck markets contributes to Fitch's estimated revenue decline at NAV of 30% in 2020. -- EBITDA margins decline to approximately 5% in 2020 before beginning to recover in 2021. -- Debt/EBITDA is above 6.0x through 2021. Leverage improves after 2020 but remains elevated, compared with debt/EBITDA of 3.4x in 2019. -- NAV's market share increases further but remains below historical levels in the near term. -- FCF is negative in excess of $300 million in 2020, excluding the full impact of restructuring and other cost actions, followed by improved but still negative FCF in 2021. -- Fitch's base case for NAV assumes the current alliance with Traton is unchanged and that cost efficiencies and product development are executed as planned. Recovery Analysis: -- The recovery analysis for NAV reflects Fitch's expectation that the enterprise value of the company would be maximized as a going concern rather than through liquidation. Fitch has assumed a 10% administrative claim. -- A going concern EBITDA of $584 million represents Fitch's estimated post-emergence stabilized EBITDA following an industry downturn. -- An EBITDA multiple of 5.0x is used to calculate a post-reorganization valuation below the 6.7x median for the industrial and manufacturing sector. The multiple incorporates cyclicality in the heavy-duty truck market, the highly competitive nature of the heavy-duty truck market and NAV's smaller size compared to large global OEMs. -- Fitch assumes a fully used ABL facility, excluding a liquidity block, primarily for standby letters of credit that could be utilized during a distress scenario. -- The secured term loan is rated 'BB-/RR1', three levels above NAV's IDR, as Fitch expects the loan would see a full recovery in a distressed scenario based on a strong collateral position. Senior secured notes completed April 27, 2020 are rated 'BB-/RR1'. They have a first lien stock pledge on NIBV and junior lien positions behind the term loan and on certain assets behind the recovery zone bonds and would be expected to see a full recovery. The recovery zone bonds have junior lien positions behind the term loan but are rated 'BB-', as they would also be expected to see a full recovery. The 'RR6' for senior unsecured debt reflects poor recovery prospects in a distress scenario. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- FCF is positive in 2021. -- Debt/EBITDA is below 5.5x. -- EBITDA margins as calculated by Fitch are sustained above 7%. -- NAV's retail market share continues to improve. -- Litigation with the Department of Justice and other contingent liabilities are resolved with little financial impact on NAV. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- FCF is negative in 2021. -- Manufacturing EBITDA margins are below 5% in 2021. -- There is a material adverse outcome from litigation. -- The alliance with Traton is terminated. -- Material support is required for financial services. BEST/WORST CASE RATING SCENARIO International scale credit 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 Liquidity Sources - NAV's liquidity at the manufacturing business as of Jan. 31, 2020 included cash and marketable securities totaling $967 million, excluding restricted cash and cash at Blue Diamond Parts. Liquidity includes availability under a $125 million ABL facility. Borrowing capacity under the ABL is reduced by a $13 million liquidity block and letters of credit issued under the facility. Liquidity was offset by current maturities of manufacturing long-term debt of $31 million. There are no large debt maturities before November 2024. NAV had intercompany loans totaling $301 million from financial services, which are included by Fitch in manufacturing debt. The net pension obligation was $1.3 billion (60% funded) at Oct. 31, 2019. As of Jan. 31, 2020, debt at NAV's manufacturing business totaled approximately $3.3 billion, as calculated by Fitch, including intercompany debt, unamortized discount and debt issuance costs. Debt was $1.8 billion at the financial services segment, the majority of which is at NFC. Consolidated debt totaled $4.7 billion. NORTHERN INYO HEALTHCARE DISTRICT: S&P Cuts GO Bond Rating to B+ ---------------------------------------------------------------- S&P Global Ratings lowered its underlying rating (SPUR) on Northern Inyo County Local Hospital District (NIHD), Calif.'s general obligation (GO) bonds to 'B+' from 'BB-'. At the same time, S&P Global Ratings lowered its rating on NIHD's series 2010 and series 2013 revenue bonds to 'B+' from 'BB-'. The outlook is negative. "The lower rating reflects our expectation that NIHD will generate continued significant operating losses through the remainder of fiscal 2020 due to pressures related to the COVID-19 pandemic and the hospital's existing thin financial profile," said S&P Global Ratings credit analyst Chloe Pickett. The ratings reflect S&P's view of the hospital's: -- Thin unrestricted reserves, specifically low unrestricted reserves-to-long-term debt; -- Very weak maximum annual debt service coverage, inclusive of all debt (revenue bonds, GO bonds, and capital leases); -- Limited service area with modest growth projected; and -- Very high debt burden and significantly underfunded defined benefit pension liability. Partially offsetting these weaknesses, in S&P's view, are the hospital's: -- Leading market position, capturing the majority of its primary service area population in a remote service area; and -- Stability and durability of the largest taxpayer, which S&P expects will continue given its essential nature to the utility's water supplies. Incorporated into the downgrade is NIHD's elevated social risk, compared to that of industry peers, as it pertains to the impact of COVID-19 and the related health and safety issues, and to a lesser extent, economic fundamentals and payer mix. The core mission of health care facilities is to protect the health and safety of communities, which is further evidenced by responsibilities to serve the surge in patient demand with COVID-19. "We believe the pandemic exposes the sector to additional social risks that could present financial pressure in the short term, particularly should federal and state support be insufficient to cover the decreased revenue resulting from sharp admission and surgical volume declines required to preserve capacity, supplies, and equipment; and maintain appropriate levels of staffing. We view NIHD's exposure to these additional risks as greater than that of its peers, as COVID-driven operating losses could weaken NIHD's coverage such that the district violates its DSC covenant on the bonds outstanding. We also view social risks as being above those of industry peers due to weaker economic fundamentals, as NIHD's operations are situated in a modestly sized, limited service area in eastern California that remains challenged, with stagnant population growth. Furthermore, we note that NIHD's weak payer mix negatively affects the hospital's market position," S&P said. "We view NIHD's overall environmental risks as elevated relative to the sector as a whole, given its location in an area historically prone to earthquakes. That said, NIHD has partially mitigated environmental risks by investing in strategic capital projects to meet state-mandated seismic building codes, and by ensuring that the hospital is compliant with seismic standards through 2030. We view NIHD's governance risks as in line with those of industry peers. While the board of directors is appointed by the county and is not self-perpetuating, which we consider best practice, we note that this structure has not hampered NIHD's ability to execute on its strategies," the rating agency said. The negative outlook reflects S&P's anticipation that the hospital will continue to generate negative operating margins in the near-to-medium term. Furthermore, S&P does not expect already vulnerable balance sheet and coverage metrics will improve, as the projected operating losses will hamper the district's ability to increase unrestricted reserves during the outlook period. S&P also notes that there is very limited cushion under the debt service covenant and it will continue to monitor the district's compliance with this covenant. "We could lower the rating during the one-year outlook period if the COVID-19-related financial impact is beyond expectations and continues to materially stress operations through fiscal 2021. We would also lower the rating if NIHD increases its already heavy debt load, depletes unrestricted reserves, or violates its DSC covenant," S&P said. "We consider a higher rating unlikely during the outlook period. However, we could revise the outlook to stable if the district shows material financial improvement, including break-even operations over a sustained period, and has more cushion in its DSC covenant. We would also view positively growth in unrestricted reserves, further reduction in leverage, and steps to address the large pension liability," the rating agency said. OLB GROUP: Incurs $1.34 Million Net Loss in 2019 ------------------------------------------------ The OLB Group, Inc., reported a net loss of $1.34 million on $10.29 million of total revenue for the year ended Dec. 31, 2019, compared to a net loss of $1.39 million on $9.02 million of total revenue for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $11.87 million in total assets, $14.67 million in total liabilities, and a total stockholders' deficit of $2.80 million. The Company has limited cash resources and operating losses throughout its history. As of Dec. 31, 2019, the Company had a working capital deficiency of $1,382,325. The Company's cash flow provided by operating activities for the year through Dec. 31, 2019 was $244,868. Management has concluded that it has sufficient liquidity to continue operations for a period of at least twelve months from the date the Company's financial statements were prepared, this conclusion would not have been possible without the amendments to the Credit Agreement, cash on hand from the proceeds of a litigation settlement and close monitoring of the Company's projected cash flow and operating expenses. Further, in connection with the response to the COVID-19 pandemic in the United States, the Company has experienced certain disruptions to its business and has observed disruptions for the Company's customers and merchants which has resulted in a decline in transaction volume. While the volume of processing transactions by merchants in March was relatively in-line with the Company's expectations, it is expected that the number of transactions and resulting revenue could be as much as 40% lower than March during the month of April. The Company estimates that the number of transactions will continue to decline, along with revenues, until the response to the COVID-19 pandemic allows customers to make more point of purchase transactions for merchants and more merchants provide for additional contactless and online purchase options. Based on this, the Company expects an overall decrease in revenue and cash flows from operations during 2020 as compared to 2019. As a result of these factors, the Company determined it was necessary to do a reforecast of its cash flow for 2020 and an overall analysis of market trends to determine whether or not the Company has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date its financial statements were issued. In considering the anticipated impact of the COVID-19 pandemic response's impact on the Company's business, the Company believes it will be able fund future liquidity and capital requirements through cash flows generated from its operating activities for a period of at least twelve months from April 29, 2020, the date its financial statements are issued "If our projected results from operations for 2020 are adversely effected beyond what we anticipate, we may be required to obtain additional financing to fund operations. We may not be able to attract financing as needed, or if available, on reasonable terms as required and therefore may not be able to accomplish our business goals or repay certain of our debts. Further, the terms of any such financing may be dilutive to existing stockholders or otherwise on terms not favorable to us or existing stockholders. If we are unable to secure financing, as circumstances require, or do not succeed in meeting our sales objectives, we may be required to change, significantly reduce our operations or ultimately may not be able to continue our operations and there will be substantial doubt as to our ability to continue as a going concern." A full-text copy of the Form 10-K as filed with the Securities and Exchange Commission is available for free at: https://is.gd/fh2DGh About OLB Group Headquartered in New York, The OLB Group, Inc. -- http://www.olb.com/-- is a commerce service provider that delivers fully outsourced private label shopping solutions to highly trafficked websites and retail locations. The Company provides end-to-end e-commerce, mobile and retail solutions to customers. These services include electronic payment processing, cloud-based multi-channel commerce platform solutions for small to medium-sized businesses and crowdfunding services. The Company is focused on providing these integrated business solutions to merchants throughout the United States through three wholly-owned subsidiaries, eVance, Inc., Omnisoft.io, Inc., and CrowdPay.us, Inc. OTERO COUNTY: Bankruptcy Court Declines to Hear Fee Dispute ----------------------------------------------------------- The cases captioned, UNITED TORT CLAIMANTS, as Individuals, Plaintiffs, v. QUORUM HEALTH RESOURCES, LLC, Defendant, Adversary Nos.: 12-1204j through 12-1216j; 12-1218j through 12-1223j; 12-1235j, 12-1238j through 12-1249j; 12-1251j through 12-1261j; 12-1271j, 12-1276j and 12-1278j (Bankr. D.N.M.) was before the Bankruptcy Court on the Motion for Determination of Attorney's Fees and Costs and an Attorney Charging Lien filed by Felicia C. Weingartner and Felicia C. Weingartner P.C. The Motion concerns a dispute between the Weingartner Parties and Tim Chelpaty over entitlement to attorney's fees collected as a result of the settlement of the related adversary proceedings captioned under Miscellaneous Adversary Proceeding No. 13-00007 or the Fee Sharing Dispute. Even though the Court may have jurisdiction over the Fee Sharing Dispute under 11 U.S.C. section 105 and the Court's inherent authority to control the practice of attorneys who appear before the Court, Bankruptcy Judge Robert H. Jacobvitz permissively abstains from adjudicating the Motion in the interest of comity and respect for the state court. During the first half of 2011, the United Tort Claimants, as individuals commenced individual actions against Dr. Christian Schlicht, Dr. Frank Bryant, Otero County Hospital Association, Inc., d/b/a Gerald Champion Regional Medical Center, Quorum Health Resources, LLC, and other defendants in state court alleging medical malpractice and other acts of negligence relating to a surgical procedure members of the UTC underwent at the Hospital. Largely due to the lawsuits filed against the Hospital, the Hospital filed a voluntary petition under chapter 11 of the Bankruptcy Code on August 16, 2011. The United Tort Claimants commenced the adversary proceedings by removing 47 state court lawsuits to this Court. The Hospital, the United Tort Claimants, QHR, one of its insurers, and other parties reached a partial settlement as part of the Bankruptcy Case. The terms of the settlement were incorporated into the Hospital's confirmed chapter 11 plan of reorganization. After the partial settlement, QHR remained the sole remaining defendant in the adversary proceedings. The Court entered a Final Decree in the Bankruptcy Case on November 12, 2015, and the Bankruptcy Case was closed on the same date. The Court created a master docket, assigned Miscellaneous Adversary Proceeding No. 13-00007, for the adversary proceedings. The Weingartner Parties represented certain members of the United Tort Claimantsin the adversary proceedings, including: James and Cynthia Fender; Judy Ann and Otis Ferguson; Linda Hoefler and Victor Wilkerson; and Joel and Vivian Crossno. Ultimately, after several years of phased litigation in which the Court entered final judgments in favor of four members of the United Tort Claimants, the United Tort Claimants and QHR reached a settlement that resolved all remaining claims in the adversary proceedings. This Court approved the parties' Settlement Agreement on Sept. 21, 2018. The Settlement Agreement was filed under seal and remains confidential. In January 2019, Tim Chelpaty filed a Complaint for Breach of Contract, Conversion, and Violations of the Uniform Partnership Act in the Third Judicial District Court. The Complaint asserts that Mr. Chelpaty is entitled under an agreement with the Weingartner Parties to a 1/3 share of the fees earned from the recovery on Plaintiffs' claims against QHR. The Weingartner Parties sought to dismiss the State Court Action for lack of jurisdiction, but the state court determined that it had subject matter jurisdiction over the claims asserted in the State Court Action and denied the motion. The Weingartner Parties filed the Motion on Oct. 15, 2019. The Motion requests: 1) a determination that the Weingartner Parties are entitled to the disputed attorney's fees collected in Plaintiffs' cases; 2) a determination that Mr. Chelpaty is not entitled to payment of any fees from the amounts paid to Plaintiffs under the Settlement Agreement; 3) disgorgement of fees previously paid to Mr. Chelpaty from earlier settlements with other defendants; 4) a determination that Mr. Chelpaty is not entitled to payment of costs not recoverable from Plaintiffs, or which are offset by fees previously paid to Mr. Chelpaty; 5) an order authorizing Weingartner to deposit into this Court's registry fees representing a 1/3 share of the attorneys' fees relating to Plaintiffs' claims plus $15,000 representing disputed case costs; 6) a protective order for documents pertaining to the confidential settlements approved by this Court; and 7) an order requiring Mr. Chelpaty to obtain an order from this Court before he is permitted to access confidential documents. Mr. Chelpaty opposes the Motion, arguing that the Fee Sharing Dispute is not a core matter and that the Motion is an improper attempt to remove the State Court Action to this Court. The Weingartner Parties filed a reply. The Weingartner Parties also filed an Attorney Charging Lien. The Attorney Charging Lien asserts a claim for attorneys' fees collected with respect to the Plaintiffs as a result of the Settlement Agreement. The parties agreed that they did not need to present any additional evidence to the Court regarding jurisdiction. According to Judge Jacobvitz, permissive abstention may be warranted "in the interest of justice, or in the interest of comity with State courts or respect for State law," and can be raised by the bankruptcy court sua sponte. Factors relevant to permissive abstention include: (1) the effect that abstention would have on the efficient administration of bankruptcy estate; (2) the extent to which state law issues predominate; (3) the difficulty or unsettled nature of applicable state law; (4) the presence of a related proceeding commenced in state court or other nonbankruptcy court; (5) the federal jurisdictional basis of the proceeding; (6) the degree of relatedness of the proceeding to the main bankruptcy case; (7) the substance of asserted core proceeding; (8) the feasibility of severing the state law claims; (9) the burden the proceeding places on the bankruptcy court's docket; (10) the likelihood that commencement of the proceeding in bankruptcy court involves forum shopping by one of parties; (11) the existence of a right to jury trial; and (12) the presence of nondebtor parties in the proceeding. Judge Jacobvitz holds that several of these factors weigh in favor of abstention. The Hospital's bankruptcy estate was administered long ago. The issues raised in the Motion are purely state law issues. Mr. Chelpaty has already raised the Fee Sharing Dispute in the State Court Action and the state court has affirmatively stated that it has jurisdiction over the parties' dispute. The Weingartner Parties did not file the Motion until after they unsuccessfully sought a determination in the State Court Action that the state court lacked jurisdiction over the dispute. Both parties to the dispute are nondebtor parties and neither is a party to any of the adversary proceedings. Further, Mr. Chelpaty did not participate in the adversary proceedings in which counsel earned the fees in dispute. He never entered an appearance, appeared on any papers, or appeared before the Court in any hearings or other proceedings. His participation in the bankruptcy case was limited to filing proofs of claim with the claims agent. These facts also support permissive abstention. In addition, notwithstanding the Weingartner Parties' request for a protective order, permissive abstention will not jeopardize the continued confidentiality of the Settlement Agreement, Judge Jacobvitz says. Granted, this Court clearly has jurisdiction to enforce its own orders. But it is not necessary for the Court to issue another order to protect the confidentiality of the Settlement Agreement, Judge Jacobvitz explains. The Settlement Agreement was filed under seal and is subject to the Sealing Order requiring it to remain confidential. In the State Court Action, Mr. Chelpaty filed a Motion to Compel in which he represented that he approved a protective order prepared by the Weingartner Parties' counsel that would require him to keep confidential the contents of confidential documents produced through discovery. The Court need not exercise its jurisdiction to enforce the provisions of the Sealing Order. The parties, who are attorneys, can stipulate to a protective order to protect confidential documents, including the Settlement Agreement, as part of the discovery process in the State Court Action. Judge Jacobvitz says there is a strong public policy grounded in the interest of comity between federal and state courts and the notion of federalism, that federal courts should not unnecessarily interfere with state court proceedings. Mr. Chelpaty has initiated the State Court Action which puts the parties' dispute directly at issue. Resolution of the dispute will require the deciding court to consider the fee sharing agreement between the Weingartner Parties and Mr. Chelpaty as well as the attorney-client fee agreements between the attorneys and members of the Committee. Those agreements have never been approved by this Court, nor should they have been, since neither attorney will be compensated from bankruptcy estate property. This Court does not have special expertise with respect to the matters at issue, nor has presiding over the adversary proceedings given the Court any familiarity with the issues raised in the Motion. The parties' Fee Sharing Dispute has already been raised and should be decided in the pending State Court Action. Finally, the State Court Action was pending before the Weingartner Parties filed the Motion, and the state court is ready, willing and able to adjudicate the parties' Fee Sharing Dispute. Out of respect for the state court, the Bankruptcy Court declines to adjudicate the parties' dispute. A copy of the Court's Memorandum Opinion dated March 10, 2020 is available at https://bit.ly/34vaAG6 from Leagle.com. Gilbert C. Marquez et al., Plaintiffs, represented by Lisa K. Curtis , Curtis and Lucero, Bernard R. Given, II -- bgiven@loeb.com -- Loeb & Loeb LLP, Victor F. Poulos & Felicia C. Weingartner , Law Offices of Felicia C. Weingartner PC. James R Boren, Plaintiff, represented by John Robert Beauvais , J. Robert Beauvais, P.A., Lisa K. Curtis , Curtis and Lucero, Bernard R. Given, II , Loeb & Loeb LLP, Victor F. Poulos & Felicia C. Weingartner , Law Offices of Felicia C. Weingartner PC. Ann Berry, Plaintiff, represented by Lisa K. Curtis , Curtis and Lucero, Bernard R. Given, II , Loeb & Loeb LLP, Kinzer A. Jackson , Curtis and Lucero Law Firm, Victor F. Poulos & Felicia C. Weingartner , Law Offices of Felicia C. Weingartner PC. Christian R. Schlicht, D.O., Defendant, represented by Paul Bishop & Neil R. Blake -- nrblake@btblaw.com -- Butt, Thornton & Baehr, P.C. Otero County Hospital Association, Inc., dba, Defendant, represented by John A. Klecan -- jklecan@rcdmlaw.com -- Renaud Cook Drury Mesaros, P.A. Frank Bryant, M.D., Defendant, pro se. Quorum Health Resources, LLC, Defendant, represented by Adam Jason Bobkin, Mauro Lilling Naparty LLP, John Leslie Corbett, Barnes & Thornburg LLP, William W. Drury, Paul M. Fish, John A. Klecan , Renaud Cook Drury Mesaros, P.A., Joe L. McClaugherty, McClaugherty & Silver PC, Richard James Montes, Mauro Lilling Naparty LLP, Tamara Safarik & David E. Wood -- dwood@andersonkill.com -- Anderson Kill & Olick PC. About Otero County Hospital Otero County Hospital Association Inc. filed for Chapter 11 protection (Bankr. D. N.M. Case No. 11-13686) in Albuquerque, New Mexico, on Aug. 16, 2011. The Alamogordo, New Mexico-based nonprofit developed and operates the Gerald Champion Regional Medical Center. GCRMC serves a total population of approximately 70,000 people. Otero County Hospital Association also does business as Mountain View Catering. Judge Robert H. Jacobvitz presides over the case. Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case, LLP, in Los Angeles; and John D. Wheeler, Esq., at John D. Wheeler & Associates, PC, in Alamogordo, New Mexico, serve as bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims agent. The Debtor disclosed $124,186,104 in assets and $40,506,759 in liabilities as of the Chapter 11 filing. Alice Nystel Page, U.S. Trustee for Region 20, appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. Gardere Wynne Sewell LLP serves as the Committee's counsel. The Committee tapped James Morell of JCM Advisors, LLC, as healthcare management consultant. The U. S. Trustee appointed E. Marissa Lane PLLC as patient care ombudsman on Sept. 13, 2011. No trustee or examiner has been requested or appointed in the Chapter 11 Case. The Debtor's Third Amended Plan of Reorganization dated June 20, 2012, provides that the Plan will resolve the Trust Personal Injury Claims on a consensual basis; resolve all issues between the Debtor and Quorum Health Resources, LLC well as the Debtor and Nautilus Insurance Company on a consensual basis; satisfy the claims of Bank of America in full; provide for the payment of trade and other unsecured creditors in full; and allow the Debtor to emerge from chapter 11 in a strong position and with the ability to satisfy the medical needs of Otero County. The Plan contemplates that the Debtor will obtain exit financing to the extent necessary to satisfy the claims of its primary secured creditor, Bank of America, and provide the Debtor with sufficient capital to meet its other obligations under the Plan and continue its normal operations. On June 21, 2012, the Court entered an order approving the disclosure statement and establishing procedures relating to confirmation of the plan. Following a confirmation hearing held Aug. 3, 2012, the Court entered an order confirming a fourth amended plan, which contained non-material modifications to the third amended plan. OWENS PRECISION: Walter & Rita Owens Object to Plan Confirmation ---------------------------------------------------------------- Creditors Walter Owens and Rita Owens object to confirmation of debtor Owens Precision, Inc.'s Third Amended Chapter 11 Plan of Reorganization and Combined Disclosure Statement filed on March 11, 2020. The Owens claim that: * The sums due to Owens have been owing for months and/or years. At present, all payments are due and owing. It is literally impossible for such payments to be made on or before the date(s) on which they come due. The Plan treatment makes no sense, but whatever it is intended to mean, it does not provide for treatment satisfying either test of lack of impairment under Sec. 1124. * The Plan apparently provides that Disputed Claims will receive no distribution until the claims are allowed. There is at best a vague reference in Article VI of the Plan to the possibility of a reserve for the holders of Disputed Claims. This raises and increases the feasibility risk with respect to the holders of Disputed Claims. The proposed language of the Plan is vague, ambiguous and prejudicial to those creditors maintaining Disputed Claims. * The Debtor and James Mayfield failed to provide the required financial information to the Owens and intentionally created and manufactured unsupported reasons as to why payment was not due. The current Plan is further evidence of these misrepresentations wherein the Debtor alleges a sum owed of approximately $225,000 on an actual $2.6 Million Dollars obligation. * The Debtor makes assumptions with respect to the sums it will have on hand on the Effective Date, and the sums it will earn, that such amounts will be sufficient to make payments under the Plan. Owens does not believe that these unquantified assumptions are true or can be proven to be true, and thus, the Plan is not feasible. * The Debtor's Plan provides that the supposed equity lender retains its interest without making any new contribution, other than perhaps waiver of existing claims. Neither the waiver of claims nor sweat equity satisfies the new value exception, if there is one, to the Absolute Priority Rule. A full-text copy of Walter and Rita Owens' objection dated April 14, 2020, is available at https://tinyurl.com/y9oubd8u from PacerMonitor at no charge. Attorneys for Walter and Rita Owens: LEWIS ROCA ROTHGERBER CHRISTIE LLP Paul A. Matteoni Robert M. Charles, Jr. Ogonna M. Brown One East Liberty Street, Suite 300 Reno, NV 89501 Tel: 775.823.2900 Fax: 775.823.2929 E-mail: PMatteoni@lrrc.com RCharles@lrrc.com OBrown@lrrc.com About Owens Precision Owens Precision, Inc. -- http://owensprecision.com/-- is a Carson City, Nevada-based CNC machining shop that provides contract manufacturing services to the aerospace, defense, semiconductor, and process control industries. Owens Precision filed a Chapter 11 petition (Bankr. D. Nev. Case No. 19-51323) on Nov. 12, 2019 in Reno, Nevada. In the petition signed by James Mayfield, president and director of Owens Precision, Inc., the Debtor was estimated with assets $1 million to $10 million, and liabilities within the same range. Judge Bruce T. Beesley oversees the case. The Verstandig Law Firm, LLC, is the Debtor's counsel. PCT LTD: Needs More Working Capital to Remain as a Going Concern ---------------------------------------------------------------- PCT LTD filed its quarterly report on Form 10-Q, disclosing a net loss of $5,763,992 on $220,033 of total revenue for the three months ended Sept. 30, 2019, compared to a net loss of $940,095 on $41,124 of total revenue for the same period in 2018. At Sept. 30, 2019, the Company had total assets of $4,404,809, total liabilities of $9,097,175, and $4,907,764 in total stockholders' deficit. The Company has limited assets, has incurred losses since inception of $20,141,465 and has negative cash flows from operations. As of September 30, 2019, the Company had a working capital deficit of $8,934,741. The Company has relied on raising debt and equity capital in order to fund its ongoing day-to-day operations and its corporate overhead. The Company will require additional working capital from either cash flow from operations, from debt or equity financing, or from a combination of these sources. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. A copy of the Form 10-Q is available at: https://is.gd/vprrIu PCT LTD, through its subsidiary, Paradigm Convergence Technologies Corporation, develops, designs, manufactures, and licenses environmentally safe solutions worldwide. The company offers Hydrolyte, a sanitizer/disinfectant microbiocide for use in institutional facilities, including hospitals, nursing homes, hotels, correctional facilities, and schools; agriculture industry for pre- and post-harvest disinfection of crops, sanitization in food processing, and applications in animal husbandry; oil and gas industry to disinfect water and to kill sulfate reducing bacteria in oil and gas wells; and disinfecting and sanitizing water in public and private water systems and industrial waste-water systems. It also provides Catholyte, a non-toxic mild detergent, degreaser, and surfactant that is used for janitorial cleaning purposes. The company was formerly known as Bingham Canyon Corporation and changed its name to PCT LTD in February 2018. PCT Ltd was founded in 1986 and is headquartered in Little River, South Carolina. PELICAN PRODUCTS: Moody's Alters Outlook on B3 CFR to Negative -------------------------------------------------------------- Moody's Investors Service affirmed all ratings of Pelican Products, Inc., including the B3 corporate family rating, the B3-PD probability of default rating, and the B2 senior secured first lien and Caa2 second lien ratings. Moody's changed the outlook to negative. RATINGS RATIONALE The ratings reflect Pelican's exposure to cyclical industrial and consumer end markets, its modest scale in a fragmented and highly competitive landscape, and high financial leverage for its business risk. Moody's estimates debt/EBITDA in the high 6x range (after Moody's standard adjustments), pro forma for $20mm drawn on company's revolver in March 2020. Less than $10 million of the revolver remains available. The company is susceptible to commodity price volatility, including for resins, steel and aluminum, and exposed to potential supply chain disruptions as a result of the pandemic. This could lead to higher input costs. With about 40% of non-U.S. sales and U.S. dollar-based reporting and denominated debt, Pelican faces foreign exchange headwinds. Moody's expects these factors to weigh on the company's earnings through 2021, with adjusted EBITDA margins tightening towards the mid-teens range. Moody's notes that despite revenue growth in recent years, operating earnings have remained relatively flat in the face of competitive pricing pressure and ongoing investments to support growth. Pelican offers products with well-recognized brands for its quality protective cases, and has focused on product diversification and investments in innovation to enhance its competitiveness. The company should benefit from increased demand for biothermal products (25%-30% of revenue) to the healthcare industry, driven by the pandemic. This should provide some offset to the meaningful pressure on weakening industrial and consumer markets. Along with cost reduction measures, the favorable trend in biothermal products should ease some margin pressure. Liquidity is currently adequate, with unrestricted cash of about $42 million, less than $10 million of revolver availability and no meaningful debt maturities. Moody's expects modest positive free cash flow in the near term. The negative outlook reflects Moody's expectation of deteriorating end-market and macroeconomic conditions, heightened by the coronavirus pandemic, and limited availability on the revolver. This leaves little cushion to absorb unforeseen circumstances, given deepening recessionary conditions and continued uncertainty as to the timing and potential magnitude of the effect on the company's markets. In terms of corporate governance, event risk is increased with private equity ownership. Moody's took the following actions on Pelican Products, Inc.: Affirmations: Issuer: Pelican Products, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD6, from LGD5) Outlook Actions: Issuer: Pelican Products, Inc. Outlook, Changed To Negative From Stable FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely until operating conditions improve along with the broad macroeconomic environment. Over time, the ratings could be upgraded if the company were to grow its scale while improving margins meaningfully from current levels and apply free cash flow to debt reduction. This would result in debt-to-EBITDA in the low 5x range and free cash flow-to-debt sustained in the high-single digits, accompanied by the maintenance of a good liquidity profile, including a greater revolver size and availability. Ratings could be downgraded if Moody's expects material weakening in sales or margins, EBITA-to-interest below 1.5x or debt/EBITDA to be sustained above 6.25x. As well, a meaningful decline in the cash balance, diminishing revolver availability or weaker than expected free cash flow could also lead to a ratings downgrade, as could weakening of financial reporting. Debt financed acquisitions or shareholder returns that increase leverage would also drive downward ratings pressure. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Pelican designs, develops, manufactures and markets watertight protective containers and professional lighting equipment, for use in a variety of end markets including consumer, industrial, commercial, biopharma, and military markets and is a portfolio company of Behrman Capital. Pelican is based in Torrance, CA, and operates in 21 countries with 27 offices and 6 manufacturing facilities around the world. Net revenues were approximately $432 million as of the last twelve months ended September 30, 2019. PG&E CORP: 3 Current Directors to Remain on Reorganized Company --------------------------------------------------------------- In connection with the Chapter 11 proceedings and the CPUC's regulatory process, PG&E Corporation and the Pacific Gas & Electric Company committed to a substantial change in the makeup of the Boards of Director related to their emergence from Chapter 11. In its May 1, 2020 earnings release, PG&E Corporation said it has determined that three of its current Directors will continue to serve on the Boards after emerging from Chapter 11. They include: * Cheryl F. Campbell (60), who brings 35 years of energy experience in midstream, interstate pipelines and utilities. Campbell has served in a number of senior leadership roles overseeing operations and safety for energy companies including Xcel Energy, Inc., West Gas Interstate, and Coastal Corporation (El Paso Corporation). * William "Bill" L. Smith (62), who will serve as interim CEO, brings to his new role a career of significant operational and transformation experience in large and heavily regulated, consumer-facing organizations. He will take over the role after current President and CEO Bill Johnson retires on June 30, 2020. Smith is the retired President of AT&T Technology Operations at AT&T Services, Inc. and brings over 35 years of experience in the telecommunications industry including overseeing operations, planning, engineering, construction, maintenance and a field workforce of more than 100,000 employees. * John M. Woolard (54), the Chief Executive Officer of Meridian Energy, an energy consulting and asset acquisition company, and a Senior Operating Partner at San Francisco-based Activate Capital. Woolard brings more than 20 years of experience as an executive in the energy technology sector, including as the former President and Chief Executive Officer of BrightSource Energy and the Chief Executive Officer of Silicon Energy Corp. Additionally, Andrew M. Vesey will remain Utility CEO and a Director on the Utility Board. The remaining directors will step down from the Boards in connection with the emergence of PG&E Corporation and the Utility from Chapter 11. According to a SEC filing, on April 29, 2020, Jeffrey L. Bleich, a member of the Boards and chair of the Utility Board, notified PG&E Corporation and the Utility of his decision to resign from the Boards of PG&E Corporation and the Utility, effective as of May 1, 2020, to assume a position at another company. Mr. Bleich's resignation does not involve any disagreement on any matter relating to PG&E Corporation's or the Utility's operations, policies or practices. 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. The Office of the U.S. Trustee appointed an official committee of unsecured 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: CEO Johnson to Retire Upon Exit From Chapter 11 ---------------------------------------------------------- California-based power utility provider PG&E Corp. said that its CEO Bill Johnson plans to retire in June 2020 when the Company is expected to emerge from Chapter 11 bankruptcy. Johnson, 66, joined PG&E last May 2019, months after the company filed for bankruptcy facing an estimated $30 billion in liabilities from wildfires blamed on its equipment. Mark Chediak, reporting for Bloomberg, notes that the announcement of Johnson's departure comes after California regulators said that they'd approve the company's bankruptcy plan if it overhauled its board, submitted to increased state oversight and took other steps. PG&E said in a statement that it has named William "Bill" Smith as Interim CEO. Smith, who joined the PG&E Board of Directors in 2019, will serve in this role from the time of Johnson's departure through the appointment of a new CEO. Johnson and Smith will use May and June to transition. Johnson will remain on the board until June 30. Smith is the retired President of AT&T Technology Operations at AT&T Services, Inc., where he spent 37 years with the telecommunications service provider and its predecessor companies. He held a number of senior officer positions at AT&T, including President of Network Operations. In his last role, Smith oversaw data center and information technology operations, DIRECTV field operations, planning, engineering, construction, provisioning and maintenance for the company's wireless and wireline networks. Throughout his career, he managed organizations with more than 100,000 employees and led network and customer care efforts across a broad global footprint. The Company said in a regulatory filing that Mr. Johnson's resignation from such boards does not involve any disagreement on any matter relating to PG&E Corporation's or the Utility's operations, policies or practices. "I joined PG&E to help get the company out of bankruptcy and stabilize operations. By the end of June, I expect that both of these goals will have been met," said Johnson. "As we look to PG&E's next chapter, this great company should be led by someone who has the time and career trajectory ahead of them to ensure that it fulfills its promise to re-imagine itself as a new utility and deliver the safe and reliable service that its customers and communities expect and deserve. I want to thank the Board as well as all of the employees, who work so hard every day to address the challenges the company has faced--it has been a privilege to work with them." Andrew Vesey, current CEO and President of Pacific Gas and Electric Company, the utility subsidiary, will continue in his role overseeing the company's electric, gas, generation and customer operations. "We were fortunate to have Bill Johnson's experience and steady presence for the past year as he shepherded the company through multiple challenges," said Nora Mead Brownell, Chair of PG&E Corporation's Board of Directors. "We are equally fortunate now to have Bill Smith step up and provide strong, stable experienced leadership during this transitional period. With his knowledge of the company and his long-time operational and transformation experience in large and heavily regulated, consumer-facing organizations, he is well-positioned to help the company begin its next chapter." 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. The Office of the U.S. Trustee appointed an official committee of unsecured 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: Reports $371MM Profit; On Track for June 30 Exit ----------------------------------------------------------- PG&E Corporation (NYSE: PCG) said on May 1, 2020, it recorded first-quarter 2020 income available for common shareholders of $371 million, or $0.57 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with income available for common shareholders of $136 million, or $0.25 per share, for the first quarter of 2019. GAAP results include non-core items that management does not consider representative of ongoing earnings, which totaled $205 million after-tax, or $0.32 per share, for the quarter. This was primarily driven by costs related to PG&E Corporation's and Pacific Gas and Electric Company's (Utility) reorganization cases under Chapter 11 of the U.S. Bankruptcy Code (Chapter 11). PG&E continues to make substantial progress in those cases and remains on track for Bankruptcy Court confirmation of its Plan of Reorganization by June 30, 2020, allowing the company to participate in California's new go-forward wildfire fund. PG&E has previously reached settlements with all major groups of wildfire victims to be implemented pursuant to its Plan, valued at approximately $25.5 billion at plan value. Voting by eligible parties is now underway, and ballot counting is expected to be complete by the third week of May. "We have developed a Plan of Reorganization that has the support of a broad coalition of stakeholders, including the Governor's Office. Our Plan compensates wildfire victims fairly, resolves our liabilities, assumes the collective bargaining agreements with our labor unions and is energy-bill-neutral for our customers. It will protect our clean energy commitments and set us up to emerge from Chapter 11 as a stronger and more sustainable utility," said Bill Johnson, CEO and President of PG&E Corporation. Johnson previously announced his decision to retire from the company effective June 30, 2020. PG&E Corporation has named William "Bill" Smith as Interim CEO. Smith, who joined the Boards of Directors of PG&E Corporation and the Utility (the "Boards") in 2019, will serve in this role from the time of Johnson's departure through the appointment of a new CEO. "I am quite proud of what PG&E and our 23,000 employees have achieved in the past year," Johnson said. "We are close to emerging from bankruptcy. We've stabilized our operations, made significant structural and governance improvements across the business, and continued our work to reduce the risk of wildfire in our communities. I look forward to working with Bill Smith on an orderly transition in the near term. I have every confidence that PG&E will succeed and fulfill its mission to our customers for years to come." Chapter 11 Progress In March, PG&E agreed to a series of commitments recommended by Governor Newsom's office and California Public Utilities Commission (CPUC) President Batjer regarding its governance, operations, and financial structure -- all designed to further prioritize safety and expedite the company's successful emergence from Chapter 11. In other developments: * The Utility received a proposed decision from the CPUC in its Plan of Reorganization OII, which affirms that the company's Plan of Reorganization is compliant with Assembly Bill 1054, and supports a waiver of the regulatory capital structure. * PG&E Corporation and Pacific Gas and Electric Company have sent voting materials to approximately 250,000 parties entitled to vote on the Plan of Reorganization. Completed ballots must be received by May 15, 2020 to be counted. * The Utility resolved the criminal investigation in Butte County, by entering into a plea agreement, under which the Utility will plead guilty to 84 counts of involuntary manslaughter and one count of unlawfully starting a fire stemming from the 2018 Camp Fire, as well as pay $4 million in associated fines and expenses. COVID-19 Considerations PG&E is taking steps to protect the health and safety of its customers and employees in response to the COVID-19 pandemic. PG&E understands that many customers are facing severe economic challenges because of this crisis. In consideration, the company is offering flexible payment plans, waiving security deposits, and suspending service disconnections for non-payment. Under the California-wide shelter-at-home mandate, PG&E is continuing to focus on critical and essential work—including the elements of its Wildfire Mitigation Plan designed to reduce the risk of catastrophic wildfire and minimize Public Safety Power Shutoff impacts. PG&E does not anticipate disruption to power supply and delivery due to COVID-19. PG&E has filed a notice with the CPUC that it is recording costs associated with COVID-19 in a memorandum account and may seek recovery at a future date. Non-GAAP Core Earnings PG&E Corporation's non-GAAP core earnings, which exclude non-core items, were $576 million, or $0.89 per share, in the first quarter of 2020, compared with $546 million, or $1.04 per share, during the same period in 2019. The decrease in quarter-over-quarter non-GAAP core earnings per share was primarily driven by an increase in shares outstanding from the dilutive impact of the equity backstop agreement and interest on pre-petition payables and short-term debt, partially offset by the timing of nuclear refueling outages, growth in rate base earnings, and energy savings awards. Beginning with the quarter and full year periods ended December 31, 2019, PG&E Corporation and the Utility changed the name of their principal non-GAAP earnings metric from "non-GAAP earnings from operations" to "non-GAAP core earnings" in order to align more closely with the terminology used by their industry peers. As a result, PG&E Corporation and the Utility currently refer to adjustments as "non-core items" rather than "items impacting comparability." PG&E Corporation uses "non-GAAP core earnings," which is a non-GAAP financial measure, in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of non-core items. See the accompanying tables for a reconciliation of non-GAAP core earnings to consolidated earnings (loss) attributable to common shareholders. 2020 Guidance PG&E Corporation is not providing guidance for 2020 GAAP earnings or non-GAAP core earnings. However, the company is providing factors affecting 2020 non-GAAP core earnings and guidance for non-core items. These include a range of drivers causing a variance in earnings below authorized, including net below the line and spend above authorized of $150 million to $200 million after tax and unrecovered interest expense of $100 million to $150 million after tax. PG&E Corporation is providing 2020 non-core items guidance of approximately $2.1 billion to $2.3 billion after-tax for bankruptcy and legal costs, wildfire insurance fund contributions, investigation remedies and delayed cost recovery, and the 2011 GT&S capital audit. Both the drivers and non-core items guidance are based on various assumptions and forecasts related to future expenses and certain other factors. Supplemental Financial Information In addition to the financial information accompanying this release, presentation slides have been furnished to the Securities and Exchange Commission (SEC) and are available on PG&E Corporation's website at: http://investor.pgecorp.com/financials/quarterly-earnings-reports/default.aspx 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. The Office of the U.S. Trustee appointed an official committee of unsecured 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. PIERCE WILLIAMS: Hearing on Cash Collateral Use Continued to May 20 ------------------------------------------------------------------- Pierce Williams & Read, Inc., seeks authority from the U.S. Bankruptcy Court for the Western District of Kentucky to use cash collateral to defray its on-going operating and administrative expenses. However, the Debtor's primary secured lender is Truist Bank, formerly Branch Banking and Trust, has not consented to the Debtor's use of the cash collateral. Truist Bank asserts that the Debtor has not provided adequate protection of its security interest in the cash collateral. Truist Bank holds a validly perfected security interest on inventory, accounts receivable, cash, furniture and fixtures, and other intangibles. As of the Petition Date, Truist Bank is owed $430,679.78 collectively, on a promissory note. Truist Bank has asked the court to prohibit the Debtor from using cash collateral, or In the alternative, direct the Debtor to provide adequate protection of its interest in the cash collateral. Consequently, the court ordered to continue the hearing regarding Truist Bank's Motion to Prohibit and set the hearing on the Debtor's Motion to Use Cash Collateral for May 20, 2020 at 10:00 a.m., according to court filings. About Pierce Williams & Read Pierce Williams & Read, Inc., based in Hopkinsville, KY, filed a Chapter 11 petition (Bankr. W.D. Ky. Case No. 20-50128) on March 9, 2020. In the petition signed by Marcellus Thomas, owner, the Debtor disclosed $681,074 in assets and $2,460,395 in liabilities. Jason E. Holland, Esq., at Jason E. Holland, Attorney at Law, serves as bankruptcy counsel. PJZ TRANSPORT: May 19 Hearing on Disclosure Statement ----------------------------------------------------- A hearing on final approval of the Amended disclosure Statement and the hearing on confirmation of the Amended Plan of PJZ Transport Corp. will be held before Honorable Carl L. Bucki United States Bankruptcy Judge on May 19, 2020 at 3:30 p.m. in Robert H. Jackson U.S. Courthouse, 2 Niagara Square, 5th Floor, Orleans Courtroom, Buffalo, NY 14202. May 15, 2020 is fixed as the last day for filing and serving written objections to the Amended Disclosure Statement and confirmation of the Amended Plan. Ballots accepting or rejecting this plan may be filed at any time before the confirmation hearing or any continuation. About PJZ Transport Corp. PJZ Transport Corp. filed a Chapter 11 bankruptcy petition (Bankr. W.D.N.Y. Case No. 18-11355) on July 12, 2018. In the petition signed by Peter J. Zebrowski, president, the Debtor was estimated to have under $50,000 in assets and between $100,001 to $500,000 in liabilities. The Debtor hired Baumeister Denz LLP, as counsel. POLYONE CORP: Moody's Rates New $650MM Sr. Unsecured Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to PolyOne Corporation's proposed $650 million senior unsecured notes due 2025. The proceeds are expected to be applied towards financing the $1.45 billion net purchase price acquisition of the Clariant Color and Additive Masterbatch business. The new notes will contain a special mandatory redemption provision in the event that the Clariant acquisition does not occur. The outlook is stable. "The proposed note issuance, in addition to approximately $400 million of cash from the sale of PP&S and $500 million from the recent equity offering, would complete the permanent financing for the Clariant Masterbatch acquisition," said Domenick R. Fumai, Moody's Vice President and lead analyst for PolyOne Corporation. Assignments: Issuer: PolyOne Corporation Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5) RATINGS RATIONALE PolyOne's Ba2 CFR incorporates sound credit metrics, good liquidity and consistently solid free cash flow generation. Moody's estimates that pro forma financial leverage (Debt/EBITDA) for the Clariant Masterbatch acquisition, including standard adjustments, was approximately 4.0x as of December 31, 2019. PolyOne's rating considers its enhanced scale and geographic reach following the Clariant Masterbatch acquisition. The rating is also supported by the company's improved business profile following recent portfolio repositioning, which includes the divestiture of its Performance Products and Solutions segment and Clariant acquisition. As a result, PolyOne has significantly reduced exposure to highly cyclical end markets such as building and construction and substantially expanded its presence in higher growth, less economically sensitive markets such as packaging, healthcare and consumer with a significant portion of EBITDA generated from specialty solutions. PolyOne's rating is constrained by expectations that leverage may temporarily exceed Moody's threshold, particularly as a result of the economic weakness due to the coronavirus pandemic. However, management has publicly stated a net debt/EBITDA deleveraging target of 2.6x according to the company's calculation from 3.4x as of December 31, 2019, supporting its existing financial policy. The rating also contemplates PolyOne's acquisitive growth strategy, though Moody's would likely consider another sizable acquisition over the next 12-18 months to place downward pressure on the ratings. The rating is further limited by PolyOne's exposure to several end markets that are highly cyclical including transportation, of which autos is the largest concentration, industrial and electrical and electronics. Furthermore, despite a good track record of integrating prior acquisitions, the Clariant acquisition is much larger and more complex than past acquisitions, which introduces integration risk. The proceeds from the debt issue are expected to be applied towards financing the $1.45 billion net purchase price acquisition of the Clariant Color & Additive Masterbatch business. The new notes contains a special mandatory redemption provision that allows the notes to be redeemed in the event that the Clariant Masterbatch acquisition is not consummated on or prior to December 19, 2020 or, if prior to December 19, 2020, the agreement is terminated, other than in connection with the consummation of the Clariant Masterbatch acquisition, and is not otherwise amended or replaced. The SGL-2 rating reflects expectations that PolyOne will maintain good liquidity over the next 12 months. Cash on the balance sheet of $1.28 billion as of March 31, 2019, is temporarily elevated from the proceeds of the PP&S sale and equity issuance in February to fund the Clariant acquisition. Moody's expects PolyOne to maintain cash balances of around $400 million to offset the current weakness in the global macroeconomic environment. Liquidity is further boosted by roughly $297 million in revolving credit availability as of March 31, 2019. The stable outlook assumes adjusted financial leverage could potentially exceed 4.0x in 2020, but is expected to remain between 3.0-4.0x (Debt/EBITDA) thereafter. The stable outlook also assumes continued solid free cash flow generation and that the company maintains good liquidity to support operations. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although unlikely at this time, Moody's could upgrade the rating with expectations for retained cash flow-to-debt (RCF/Debt) sustained above 20% and adjusted financial leverage sustained below 3.0x. An upgrade would also require a commitment to more conservative financial policies. Moody's would likely downgrade the rating with expectations for retained cash flow to debt sustained below 15%, adjusted financial leverage sustained above 4.0x, or available liquidity below $150 million. ESG CONSIDERATIONS Moody's also considers environmental, social and governance considerations in PolyOne's rating. Although PolyOne is a specialty chemical company, environmental liabilities based on probable future expenditures are ample relative to the company's size and totaled $110 million as of March 31, 2020, though it does not view this as currently impacting the credit profile due to the long tail nature of these liabilities. Changes in regulation, estimates or new developments could result in future additional costs, which may adversely impact the credit profile. Social risks are below average due to the company's size and the footprint of its facilities. Also, the company has a much greater ability to moditfy its products and formulations to avoid compounds that may become a concern to activistist or regulators in the future. Governance risk is viewed as below average given the company's status as a publicly traded company, with an independent board of directors and SEC financial reporting requirements. PolyOne maintains a sound corporate sustainability program and many of its products have social and environmental benefits such as light-weighting, reducing packaging waste and improving recyclability. PolyOne Corporation, headquartered in Avon Lake, Ohio, is a global provider of customized polymers and services. PolyOne develops performance enhancing additives, as well as liquid, fluoropolymer, and silicone colorants. The company operates in three business segments: 1) Color Additives & Inks 2) Specialty Engineered Materials and 3) Distribution. PolyOne participates in a diverse number of end markets including transportation, industrial, healthcare, consumer and building & construction. PolyOne reported revenue of approximately $2.9 billion for the fiscal year ended December 31, 2019. PRIMESOURCE BUILDING: S&P Alters Outlook to Neg., Affirms 'B' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on PrimeSource Building Products Inc. to negative from stable and affirmed its 'B' issuer credit rating. "The negative outlook primarily reflects our view that the recessionary environment has significantly increased the probability PrimeSource's credit metrics will deteriorate. The company previously maintained leverage of more than 7x before deleveraging to 5.7x as of the end of December 2019 on improved EBITDA. However, we expect that it is highly unlikely that the company will maintain this level of leverage through 2020," S&P said. "COVID-19 will have a lasting effect on PrimeSource's revenue. The company caters primarily to the new construction and repair and remodeling markets, which we believe will be negatively affected by the implementation of social distancing measures, declining construction activity, and increased unemployment over the next 12-18 months. Our economists currently expect U.S. real GDP to contract by 5.2% in 2020 and estimate a mid- to high-single digit percent decline in construction investment and housing starts, which are the primary basis for our forecast of a steep revenue decline. Although we anticipate a U-shaped recovery occurring in 2021, the current economic conditions will have a negative effect on the company's earnings due to its lost revenue," S&P said. The negative outlook reflects the potential for a deep and prolonged downturn in construction activity in the U.S. S&P expects most of the negative effects from the pandemic to occur in second and third quarters of 2020 with a modest recovery beginning in early 2021. However, a longer downturn would likely cause PrimeSource's debt leverage to exceed 7x well into 2021. "We could lower our rating on PrimeSource if its liquidity position deteriorates and we believe it is no longer fiscally prudent enough to maintain the current rating. Such a scenario could occur if the company drew down the majority of its revolver or was unable to generate sufficient cash from its working capital. A steep and prolonged decline in construction activity would also lead to a downgrade. We could also lower the rating if the company's EBITDA interest coverage fell below 1.5x for a sustained period," S&P said. "We could revise our outlook on PrimeSource to stable in the next 12 months if it exceeds our operating expectations or maintains leverage of less than 7x. Such a scenario could occur if the company further optimizes its procurement and pricing or if the recovery in its macroeconomic conditions outpaces our expectations," the rating agency said. PROLINE CONCRETE: May 21 Disclosure Statement Hearing Set --------------------------------------------------------- On April 12, 2020, debtor Proline Concrete of WNY, Inc. filed with the U.S. Bankruptcy Court for the Western District of New York a Disclosure Statement describing its Plan of Reorganization. On April 14, 2020, Judge Carl L. Bucki ordered that: * May 21, 2020, at 10:00 a.m. in Robert H. Jackson U.S. Courthouse, 2 Niagara Square, 5th Floor, Orleans Courtroom, Buffalo, NY 14202 is the hearing to consider the approval of the Disclosure Statement. * May 18, 2020, is fixed as the last day for filing and serving written objections to the disclosure statement. * May 21, 2020, is fixed as the last day for filing proofs of claim. A full-text copy of the order dated April 14, 2020, is available at https://tinyurl.com/yajw5ldp from PacerMonitor at no charge. About Proline Concrete of WNY Proline Concrete of WNY, Inc. filed a chapter 11 petition (Bankr. W.D.N.Y. Case No. 16-11455) on July 25, 2016. The petition was signed by James R. Sickau, president. At the time of the filing, the Debtor was estimated to have assets and debts at $1 million to $10 million. The case is assigned to Judge Carl L. Bucki. The Debtor is represented by Arthur G. Baumeister, Jr., Esq., at Amigone, Sanchez & Mattrey LLP. PROLINE CONCRETE: Unsec. Creditors to Get 10% Dividend in 5 Years ----------------------------------------------------------------- Debtor Proline Concrete of WNY, Inc., filed with the U.S. Bankruptcy Court for the Western District of New York a Disclosure Statement describing its Plan of Reorganization dated April 12, 2020. The Debtor scheduled a total of $1,886,788 in unsecured claims as of the Petition Date. Most of those claims were scheduled as disputed. Although some claims are disputed in their entirety, the bulk of the disputed claims are disputed as to amount, not liability. It is estimated that the total amount of allowed unsecured claims will be approximately $1,700,000. Under the Plan, unsecured creditors will receive a 10 percent dividend on their allowed unsecured claims over a period of five years in 20 equal quarterly installments commencing in October 2021. It is estimated that the quarterly installment payments will be $8,500 ($2,833 monthly) distributed pro rata to the holders of allowed unsecured claims. The Plan provides for the full and complete retention of the interests of equity security interests during the consummation and upon completion of the Plan. Although the claims in the Crisalli action are contingent, the Debtor reasonably anticipates some recovery which will enable it, at a minimum, to facilitate the Debtor's ability to perform its obligations under the Plan. The Debtor's principal will infuse monies as needed to assist the Debtor in performing its obligations under the Plan. A full-text copy of the Disclosure Statement dated April 12, 2020, is available at https://tinyurl.com/vx622lw from PacerMonitor at no charge. The Debtor is represented by: BAUMEISTER DENZ LLP Arthur G. Baumeister, Jr. 174 Franklin Street, Suite 2 Buffalo, New York 14202 Tel: (716) 852-1300 Fax: (716) 852-1344 E-mail: abaumeister@bdlegal.net About Proline Concrete of WNY Proline Concrete of WNY, Inc., filed a chapter 11 petition (Bankr. W.D.N.Y. Case No. 16-11455) on July 25, 2016. The petition was signed by James R. Sickau, president. At the time of the filing, the Debtor was estimated to have assets and debts at $1 million to $10 million. The case is assigned to Judge Carl L. Bucki. The Debtor is represented by Arthur G. Baumeister, Jr., Esq., at Amigone, Sanchez & Mattrey LLP. QUESOS DEL PAIS: Creditor's Counsel Awarded $167.50 in Expenses --------------------------------------------------------------- In the bankruptcy case captioned IN RE: QUESOS DEL PAIS LA ESPERANZA, INC., Chapter 11, Debtor, Case No. 18-06529 (ESL) (Bankr. D.P.R.), creditor Francisco Roman Medina sought payment of counsel fees and costs in the amount of $15,977. Debtor Quesos del Pais La Esperanza opposed the motion. Upon review, Bankruptcy Judge Enrique S. Lamoutte allows costs only in the amount of $167.50. The Creditor seeks payment of attorney's fees and costs in the amount of $15,977 incurred in the litigation for the appointment of a trustee or examiner. The Creditor prevailed in the litigation as the court ordered the appointment of an examiner. An invoice detailing the request under the loadstar method was attached. The Debtor opposes the request for attorney's fees based on the "American Rule" general principle that each party bears the cost of their litigation, that Rule 54(d) does not create a substantive right to claim fees and costs, and the decision in In re Pineiro, 2019 WL 2486744, 2019 Bankr. The Debtor concedes to the allowance of costs in the amount of $167.50 under 28 U.S.C. section 1920. The Debtor opposes the award of expert witness costs as the court did not appoint the Creditor's expert witness and, thus, the Creditor may only claim $115 for mileage and $40 per diem, for a total of $155. The Debtor also objects to the award of translation costs as section 1920(6) does not apply to translators of written materials. The Debtor has no opposition to awarding costs in the amount of $12.50 for the photocopies. The Debtor has no objection to awarding a total of $167.50. The motion for fees and costs was timely made and complies with Civil Rule 54(d)(2)(B). The issue is whether the request for fees and costs should be granted on the basis that the requesting party prevailed in the contested matter before the court. Federal Rule of Civil Procedure 54(d) gives courts the discretion to award costs to prevailing parties, Judge Lamoutte says. He explains that the court's discretion in awarding fees and costs is guided by the "so-called American Rule" which provides that a party must bear its own costs of litigating a controversy and that the same should not be assessed against the loser. The basic premise is that each litigant pays its own Attorney's fees, win or lose, unless a statute or contract provides otherwise. Fed. R. Civ. P. 54 does not create a substantive right to attorney's fees and does not change the "American Rule" regarding payment of attorney's fees. Although the "American Rule" generally prohibits fee shifting, there are three accepted exceptions: the "common fund" exception allows a court to award fees to a party whose litigation efforts directly benefit others; the court may assess fees as a sanction for the willful violation of a court order; and the court may assess fees when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Therefore, this court agrees with the decision in In re Pineiro, supra, on the applicability of the "American Rule" and the exceptions to the same. A review of the application does not show that any of the exceptions to the "American Rule" are present in the contested matter, according to Judge Lamoutte. Thus, the award of attorney's fees is denied. The court also denies the request for reimbursement of expert witness expenses other than mileage and per diem as the expert witness used by the prevailing party was not a court appointed expert, as is required by 28 U.S.C. section 1920(6). Consequently, only the amount of $155 is allowed. In addition, the court denies the request for translation costs as the statute, 28 U.S.C. section 1920(6), only allows for reimbursement of interpreters and does not include the cost of document translation. Therefore, the court denies the request for awarding costs for document translation. The request for photocopies in the amount of $12.50 is reasonable and not contested by the Debtor. So, the amount for photocopies costs in the amount of $12.50 are allowed. In view of the foregoing, the court allows costs in the amount of $167.50. A copy of the Court's Opinion and Order dated March 11, 2020 is available at https://bit.ly/39TX6F5 from Leagle.com. QUESOS DEL PAIS LA ESPERANZA INC, Debtor, represented by EDUARDO J. CAPDEVILA DIAZ , GARCIA ARREGUI & FULLANA PSC & ISABEL M. FULLANA , GARCIA ARREGUI & FULLANA PSC. About Quesos Del Pais La Esperanza Quesos Del Pais La Esperanza Inc. filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 18-06529) on Nov. 6, 2018, disclosing under $1 million in assets and liabilities. The Debtor hired Garcia-Arregui & Fullana, as attorney. QUORUM HEALTH: Interim DIP Financing, Cash Collateral Use Approved ------------------------------------------------------------------ Judge Karen Owens of the U.S. Bankruptcy Court for the District of Delaware authorized Quorum Health Corporation and its affiliates to obtain postpetition financing in an aggregate principal amount of up to $30.0 million pursuant to the terms and conditions set forth in the Interim Order and that certain DIP Credit Agreement. The DIP Agents, for the benefit of the DIP Secured Parties, are granted valid, binding, enforceable, non-avoidable, and automatically and properly perfected liens and security interests in the DIP Collateral, as collateral security for the prompt and complete performance and payment when due of all DIP Obligations. In addition, the DIP Agents are granted an allowed superpriority administrative expense claim in each of the DIP Loan Parties' chapter 11 cases and any Successor Cases thereof on account of the DIP Obligations, with priority over any and all administrative expenses of the kind that are specified in or ordered pursuant to sections the Bankruptcy Code and any other claims against the DIP Loan Parties. The Debtors are also authorized to use cash collateral, as well as the proceeds of the DIP Financing, solely in compliance with the Approved Budget for the following purposes: (i) working capital and general corporate purposes of the DIP Loan Parties and their Subsidiaries, (ii) to pay obligations arising from or related to the Carve Out, (iii) to pay professional fees in connection with these chapter 11 cases, (iv) to make adequate protection payments expressly required hereunder, and (v) to pay fees and expenses incurred in connection with the transactions contemplated by the DIP Loan Documents. The final hearing to consider final approval of the DIP Facility is scheduled for May 6, 2020 at 10:00 a.m, About Quorum Health Corporation Headquartered in Brentwood, Tennessee, Quorum Health (NYSE: QHC) -- http://www.quorumhealth.com/-- is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 24 affiliated hospitals in rural and mid-sized markets located across 14 states with an aggregate of 1,995 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business. Quorum Health incurred net losses attributable to the Company of $200.25 million in 2018, $114.2 million in 2017, and $347.7 million in 2016. As of Sept. 30, 2019, Quorum Health had $1.52 billion in total assets, $1.72 billion in total liabilities, $2.27 million in redeemable non-controlling interest, and a total deficit of $203.36 million. On April 7, 2020, Quorum Health Corporation and 134 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10766) to seek confirmation of a pre-packaged plan. McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz are serving as the Company's legal counsel, MTS Health Partners, L.P. is serving as its financial advisor and Alvarez & Marsal North America, LLC. is serving as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent, maintaining the Web site https://dm.epiq11.com/Quorum QUORUM HEALTH: Vista Health Not Impacted by Quorum Restructuring ---------------------------------------------------------------- Emily K. Coleman, reporting for Lake County News-Sun, reports that Vista Health System's Vista Medical Center East in Waukegan, Illinois, will be business as usual despite Quorum Health's Chapter 11 bankruptcy filing. Vista Health System CEO Norman Stephens, said Quorum Health's restructuring is not expected to affect operations at Vista Health. The Vista Health System also includes its Lindenhurst campus, where another 24/7 emergency department is located, in addition to a surgery center and various doctors' offices. On April 7, 2020, Quorum Health announced its restructuring plan that will last for around two months. The move comes as part of the company’s response to to COVID-19, including halting elective surgeries, expanding the capacity of its intensive care unit, and donating its emergency field unit that is set up in its parking lot. "The restructuring does not impact local operations at Vista Health System," Vista CEO Norman Stephens said in a statement this week. "Physicians, nurses, clinical and administrative staff all remain committed to caring for our patients, families and community now and well into the future. The restructuring is good news for our hospital, as it adds local capital benefits for Vista to modernize the radiology department and continue to improve services." About Quorum Health Corporation Headquartered in Brentwood, Tennessee, Quorum Health (NYSE: QHC) -- http://www.quorumhealth.com/-- is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 24 affiliated hospitals in rural and mid-sized markets located across 14 states with an aggregate of 1,995 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business. Quorum Health incurred net losses attributable to the Company of $200.25 million in 2018, $114.2 million in 2017, and $347.7 million in 2016. As of Sept. 30, 2019, Quorum Health had $1.52 billion in total assets, $1.72 billion in total liabilities, $2.27 million in redeemable non-controlling interest, and a total deficit of $203.36 million. On April 7, 2020, Quorum Health Corporation and 134 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10766) to seek confirmation of a pre-packaged plan. McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz are serving as the Company's legal counsel, MTS Health Partners, L.P. is serving as its financial advisor and Alvarez & Marsal North America, LLC. is serving as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent, maintaining the Web site https://dm.epiq11.com/Quorum REAGOR-DYKES MOTORS: Taps Stricklin Law Firm as Special Counsel --------------------------------------------------------------- Reagor-Dykes Motors, LP, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Stricklin Law Firm, P.C. as special counsel. Stricklin Law Firm will assist the Debtor in pursuing claims and causes of actions it may hold against Ford Motor Credit Company, LLC. The firm will be compensated on a contingent fee basis and will receive reimbursement for work-related expenses incurred. For its litigation services, the firm will get a contingent fee of 40 percent of the "gross value recovered." Should the litigation proceed through trial on the merits and an appeal, the fee will be increased to 45 percent of the gross value recovered. Gross value recovered means the amount of cash, plus the fair market value of any other property recovered for the Debtor in connection with the litigation, including damages, interest and attorneys' fees, according to court filings. Samuel Stricklin, Esq., the firm's attorney who will be providing the services, 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: Samuel M. Stricklin, Esq. Stricklin Law Firm, P.C. 2435 North Central Expressway, Suite 1200 Richardson, TX 75080 Phone: (972) 238-8687 Email: sam.stricklin@stricklaw.pro About Reagor-Dykes Motors Dykes Auto Group is a dealer of automobiles headquartered in Lubbock, Texas. It offers new and used vehicles, automobile parts, and other related accessories as well as car financing, leasing, repair, and maintenance services. Some of its new vehicles include brands like Ford, Toyota, GMC, Cadillac, Chevrolet and Buick. Visit https://www.reagordykesautogroup.com/ Automobile dealer Reagor-Dykes Motors, LP and affiliates, Reagor-Dykes Imports LP, Reagor-Dykes Amarillo LP, Reagor-Dykes Auto Company LP, Reagor-Dykes Plainview LP and Reagor-Dykes Floydada LP, sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 18-50214) on Aug. 1, 2018. At the time of the filing, the Debtors estimated $10 million to $50 million in both assets and liabilities. On Nov. 2, 2018, five other affiliates, Reagor-Dykes II LLC, Reagor-Dykes III LLC, Reagor Auto Mall Ltd., Reagor Auto Mall I LLC, and Reagor-Dykes Snyder LP filed Chapter 11 petitions. The cases are jointly administered under Case No. 18-50214. Judge Robert L. Jones oversees the cases. David R. Langston, Esq., at Mullin Hoard & Brown, L.L.P., serves as the Debtors' bankruptcy counsel. BlackBriar Advisors LLC is the Debtors' chief restructuring officer. The Debtors filed their Chapter 11 plan on Jan. 7, 2019. REALOGY GROUP: Moody's Cuts CFR to B2 & Sr. Unsec. Rating to Caa1 ----------------------------------------------------------------- Moody's Investors Service downgraded Realogy Group LLC's corporate family rating to B2 from B1, probability of default rating to B2-PD from B1-PD, senior secured bank credit facility to Ba3 from Ba2 and senior unsecured notes to Caa1 from B3. The Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2. The ratings outlook remains negative. RATINGS RATIONALE "Large anticipated declines in US existing home sale transaction volume caused by the economic fallout from the coronavirus pandemic will likely have a pronounced and negative impact on Realogy's revenue, credit metrics and liquidity, driving the rating downgrades" said Edmond DeForest, Moody's Vice President and Senior Credit Officer. The B2 CFR reflects Moody's expectations for diminished revenue, profit margin declines and little to no free cash flow in 2020, but a substantial rebound in 2021 as coronavirus related impacts wane. Moody's expects the coronavirus will cause recessionary conditions and immense pressure to volumes in the existing home sale market throughout the US. Moody's anticipates debt to EBITDA could peak well above 8 times in 2020, but return to below 7 times in 2021. Other credit metrics, including EBITA to interest and free cash flow to debt, will likely decline in 2020, but should improve if the existing home sale market recovers in 2021. All financial metrics cited reflect Moody's standard adjustments. Moody's considers the residential real estate brokerage market volatile, cyclical and seasonal. Although commission costs are variable, Realogy's owned brokerages have a high degree of fixed operating costs. A high proportion of its profits reflect home sale market activity as opposed to less-transactional franchise fees. Moody's anticipates Realogy will maintain its leading position in the residential real estate brokerage market throughout the downturn as all competitors will be impacted, helping it drive rapid improvement in its financial results once existing home sale volume grows again. The impact of anticipated revenue declines and profit margin compression could be mitigated by Realogy's ongoing cost reduction programs and emphasis on new business initiatives. The rapid 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. Moody's expects that the residential real estate brokerage industry will be severely impacted by the shock. Realogy was already under competitive pressure over the last two years from other traditional brokers that have sought to recruit Realogy's best-performing sales people. Competition from non-traditional technology-enabled competitors including RedFin and Zillow, own-to-rent buyers and home flippers has grown. Additionally, Realogy's high operating and financial leverage could limit its flexibility if the negative impacts of the pandemic on the existing home sale market linger for an extended period. 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 Realogy of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. As a public company, Realogy provides transparency into its governance and financial results and goals. The 10-person board of directors is controlled by independent directors. Moody's expects Realogy to maintain conservative financial strategies including building liquidity and eschewing large debt-funded M&A or any share repurchase activity until its financial leverage is reduced. Additionally, Realogy does not exhibit material environmental risks. The Ba3 rating on the senior secured obligations reflects their priority position in the capital structure and a Loss Given Default assessment of LGD2. The debt is secured by a pledge of substantially all of the company's domestic assets (excluding accounts receivable pledged for the securitization facility) and 65% of the stock of foreign subsidiaries. The Ba3 rating, two notches above the CFR, benefits from loss absorption provided by the junior ranking debt and non-debt obligations. The Caa1 rating on the senior unsecured notes reflects the B2-PD PDR and an LGD assessment of LGD5. The LGD assessment reflects effective subordination to all the secured debt. The senior notes are guaranteed by substantially all of the domestic subsidiaries of the company (excluding the securitization subsidiaries). The SGL-3 liquidity rating reflects Realogy's adequate liquidity profile. As of March 23, 2020, Realogy had a cash balance of $487 million, including from revolver borrowings. Moody's anticipates free cash flow may be negative in 2020. The $1.425 billion senior secured revolving credit facility due 2023 may be used to support repayment of maturing debt and seasonal working capital needs; over $700 million of loans were available as of March 23, 2020. If the sale of certain parts of its Cartus relocation business for approximately $400 million and the assumption of its $250 million Apple Ridge Funding LLC securitization program is completed, the cash proceeds will further boost its cash balances and enable debt reduction. Realogy's cash flow is seasonal, with negative cash flow typically in the 1st fiscal quarter. Moody's expects some headroom under the maximum senior secured net debt to EBITDA (as defined in the facility agreement) financial maintenance covenant applicable to the secured debt over the next year. If financial results are worse than Moody's expects in 2020 or if financial results do not improve in 2021, the company may not comply with the financial covenant and could effectively lose access to some of its revolving credit facility. Realogy has only $44 million of required debt principal payments in 2020, but $612 million is due in 2021, including its $550 million 5.25% notes due December 1, 2021. Realogy terminated its cash dividend to shareholders in 2019. The negative outlook reflects Moody's concerns that if the existing home sale market remains depressed in 2021 or competitive pressures increase, Realogy's credit metrics could remain weak and its liquidity could deteriorate. The outlook could be stabilized if Moody's anticipates: 1) improved US existing home sale market conditions, 2) debt to EBITDA will be maintained below 6.5 times and 3) free cash flow to debt of about 2%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative ratings outlook, an upgrade is not anticipated in the near term. Over the longer term, the ratings could be upgraded if, through some combination of rising existing unit home sales and average prices or accelerated debt repayments, Moody's comes to expect: 1) debt to EBITDA will be sustained below 5.5 times and 2) free cash flow to debt will be sustained at or above 5%. Expectations for Realogy to maintain balanced financial strategies and good liquidity, including a longer debt maturity profile, are also important considerations for higher ratings. The ratings could be downgraded if Moody's anticipates: 1) existing home sale transaction volumes will remain depressed, 2) Realogy's brokerage brands and operations will lose their leading competitive positions, 3) debt to EBITDA will remain above 6.5 times or 4) weaker liquidity. An adoption of aggressive financial strategies, including large debt financed acquisitions or shareholder returns, would also weigh on the ratings. If Moody's becomes concerned that Realogy may have no clear path to repay or refinance its current maturing debt, the ratings could be lowered by one or more notches. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Issuer: Realogy Group LLC Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD2) from Ba2 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD5) from B3 (LGD5) Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook, Remains Negative Realogy is a global provider of real estate and relocation services. The company operates in four segments: franchise, brokerage, title and leads. The franchise brand portfolio includes Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby's International Realty and Better Homes and Gardens Real Estate. Moody's expects 2020 revenues of over $4 billion. REVERE POWER: Moody's Cuts Sr. Secured Rating to B1, Outlook Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded the rating assigned to Revere Power, LLC's senior secured credit facilities to B1 from Ba3 to reflect challenging power market conditions that have negatively impacted Revere's financial performance and its ability to achieve previously anticipated debt reduction targets. The credit facilities consist of a $445 million term loan B due 2026, a $70 million term loan C due 2026 and a $55 million revolving credit facility due 2024. The rating outlook is negative. RATINGS RATIONALE The one notch downgrade reflects challenging wholesale power market conditions driven by the combination of a mild winter in New England, low natural gas and electric prices and reduced electric demand across the region owing to regional lock-down measures taken to slow the spread of COVID-19. Revere is susceptible to weak power market fundamentals due in part to the lack of a multi-year hedging strategy. Moody's had anticipated Revere to achieve energy margins in excess of $60 million annually through 2022 that, combined with capacity revenue, would be used to achieve debt reduction under the term loan B. By comparison, the portfolio's energy margin since being acquired by an affiliate of The Carlyle Group in late March 2019 through December 31, 2019 totaled $20 million and the expectation for full-year 2020 has been revised downward to approximately $30 -$35 million owing principally to a mild winter. As such, debt reduction achieved to date have been minimal and any free cash flow generated in 2020 is expected to be used to reduce borrowings under the revolving credit facility (currently $17.4 million) rather than to reduce borrowings under the term loan B. Its current expectation for 2020 is for Revere's debt-to-EBITDA ratio to be slightly in excess of 8x, project cash from operations to adjusted debt of approximately 4% and a year-end term loan B debt balance of $437 million. By comparison, its previous expectation included debt-to-EBITDA of less than 5x, project cash from operations to adjusted debt of approximately 9% and a debt balance of $400 million. LIQUIDITY Revere's liquidity profile is adequate. Funds available under the term loan C were used to cash collateralize letters of credit issued by Revere in the normal course of business, including a 6-month debt service reserve requirement. The cash proceeds from the term loan C have been deposited into a trustee administered bank account and is reflected on Revere's balance sheet as restricted cash. Approximately $46 million was outstanding under the term loan C as of December 31, 2019. As of December 31, 2019, $17.4 million of working capital loans were outstanding and $2.2 million of letters of credit had been funded under the Revolving Credit Facility, resulting in $35.4 million of incremental revolver availability. Revere's debt service coverage ratio as of December 31, 2019 from a covenant compliance perspective was at approximately 1.9x compared to a 1.1x requirement. Moody's notes that expenditures relating to major maintenance and long-term maintenance agreements are excluded from the compliance calculation and its rating and outlook anticipate continued covenant compliance. RATING OUTLOOK The negative outlook reflects a high degree of uncertainty relating to electric demand that will impact peak energy power prices in New England over the near-term and the downward trend in auction determined capacity prices through mid-2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING FACTORS THAT COULD LEAD TO AN UPGRADE In light of the negative outlook and the near-term challenges in the wholesale power market, limited prospects exist for the rating to be upgraded. The outlook could stabilize if stronger wholesale power market dynamics emerge resulting in project cash flow-to-debt of at least 7% and debt-to-EBITDA that is 5x or less on a sustained basis. FACTORS THAT COULD LEAD TO A DOWNGRADE The rating could also be downgraded if Revere fails to achieve key financial metrics including project cash flow-to-debt of 4% and debt-to-EBITDA in excess of 8x on a sustained basis. Increased usage of its liquidity reserves would also likely trigger negative rating action. Moreover, subsequent capacity auction results that do not appreciably strengthen from the level recorded in the last two auctions will also weaken the long-term credit profile. PROFILE Revere owns three natural gas-fired power plants in New England: the 577 MW Bridgeport Energy located in Connecticut, 297 MW Tiverton Power located in Rhode Island and 269 MW Rumford Power located in Maine. Revere is wholly-owned by Carlyle Power Partners II, an affiliate of The Carlyle Group. ROCHESTER DRUG: Hires Huron Consulting as Financial Advisor ----------------------------------------------------------- Rochester Drug Co-Operative, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of New York to hire Huron Consulting Services LLC, as its financial advisor. Rochester Drug requires Huron to: a. review the Debtor's financial plans, strategic plans and business alternatives; b. prepare financial projections and cash flow statements, and other financial documents required in a Chapter 11 case; c. develop and maintain a 13-week cash flow budget and forecast; d. develop, implement and maintain near-term cash management, forecasting and reporting processes; e. prepare the Debtor to meet the requirements of filing for bankruptcy court protection; f. prepare the financial and operating information necessary to: i. draft and finalize bankruptcy petitions and related documents; ii. compile and analyze the information necessary for first day orders; iii. assist with financing and related issues, including but not limited to, budgeting, cash management and forecasting; iv. establish the necessary procedures and processes to allow for the timely satisfaction of court-mandated reporting requirements; g. assist the Debtor in meeting the requirements of operating under bankruptcy court protection: i. develop framework necessary to administer a Chapter 11 claims process; ii. statutory reporting requirements (e.g. Monthly Operating Reports, address UST requests, etc.) in conformance with the provisions of the Office of the United States Trustee iii. interact with professionals representing the debtor; iv. interact with professionals representing the Official Committee of Unsecured Creditors; v. file a plan of reorganization, disclosure statement and related supporting analysis; vi. claims reconciliation and avoidance action analysis; vii. negotiate with creditors and other case related constituents; viii. assume or reject executory contracts; ix. transition books and records and remaining estate affairs to a liquidating trust to be established upon plan confirmation or pursue a Chapter 7 proceeding, if applicable; h. assist the Debtors and restructuring counsel with preparation of schedules and statements of financial affairs for the Debtors and participate in subsequent meetings with the U.S. Trustee or creditor constituents along with the related reporting information (e.g. 341 meeting, etc.). Huron Consulting will be paid at these discounted hourly rates: Managing Director $660 – $956 Senior Director/Director $600 – $740 Director $368 – $596 Manager $340 – $464 Associate $336 – $368 Huron Consulting will also be reimbursed for reasonable out-of-pocket expenses incurred. Brian S. Buebel, managing director of Huron Consulting Services 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. Huron Consulting can be reached at: Brian S. Buebel HURON CONSULTING SERVICES LLC 550 W Van Buren Chicago, IL 60607 Tel: (312) 880-3003 E-mail: dwikel@huronconsultinggroup.com About Rochester Drug Co-Operative 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 and Epiq Corporate Restructuring, LLC as the claims and noticing agent. ROCHESTER DRUG: Hires Kurzman Eisenberg as Special Counsel ---------------------------------------------------------- Rochester Drug Co-Operative, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of New York to hire Kurzman Eisenberg Corbin & Lever, LLP, as its special counsel. Rochester Drug requires Kurzman to: a. render advice with respect to the collection of accounts receivable and legally obtaining payment from customers; b. continue to prosecute and resolve the pending collection actions; c. draft complaints and other documents related to the commencement of new collection actions against non-paying customers; d. examine and respond to customer requests concerning the amendment of security agreements and UCC-1 financing statements filed against them by the Debtor; e. examine and respond to requests by customers and their lenders for the execution of subordination agreements in connection with the Debtor's security interests in the customers' assets; f. prepare and file UCC-3 continuation and termination statements on behalf of the Debtor; g. prepare lien releases in connection with the sale of customer pharmacies and the satisfaction of outstanding account with the Debtor; and h. perform such other legal services as may be necessary and appropriate for the efficient and economical administration of this Chapter 11 Case. Kurzman customarily charges hourly rates ranging from $325 for junior associates' time to $550 for senior partners' time. Kurzman received a prepetition retainer in the amount of $30,000 to secure the payment of post-petition services. Bruce W. Bieber, Esq., partner of the firm Kurzman, 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: Bruce W. Bieber, Esq. Kurzman Eisenberg Corbin & Lever, LLP One North Broadway, 12th Floor White Plains, NY 10601 Phone: (914) 285-9800 Fax: (914) 285-9855 About Rochester Drug Co-Operative 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 and Epiq Corporate Restructuring, LLC as the claims and noticing agent. ROCHESTER DRUG: Seeks to Hire Bond Schoeneck as Counsel ------------------------------------------------------- Rochester Drug Co-Operative, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of New York to hire Bond, Schoeneck and King, PLLC, as its counsel. Rochester Drug requires require Bond Schoeneck to: a. advise the Debtor regarding its function and duties as a debtor in possession; b. assist in the preparation of the Debtor's schedules of assets and liabilities and statement of financial affairs; c. negotiate with all creditors, including secured lenders; d. examine liens against property of the estate; e. negotiate with taxing authorities, if necessary; f. represent the Debtor in proceedings and hearings in the United States District and Bankruptcy Courts for the Western District of New York; g. prepare and file on behalf of the Debtor, all necessary applications, motions, orders, reports, complaints, answers and other pleadings and documents in the administration of the estate; h. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, negotiations in connection with any litigation in which the Debtor is involved, and objections to claims filed against the Debtor’s estate; i. provide assistance, advice and representation concerning the confirmation of any proposed plan(s) and solicitation of any acceptances or responding to rejections of such plan(s); j. provide assistance, advice and representation concerning any investigation of the assets, liabilities and financial condition of the Debtor that may be required under local, state or federal law; k. provide counsel and representation with respect to assumption or rejection of executory contracts and leases, sales of assets and other bankruptcy-related matters arising from this Chapter 11 Case; l. advise the Debtor regarding all legal matters arising during the Chapter 11 Case, including, but not limited to, corporate, finance, intellectual property, tax, labor and commercial matters; and m. provide all other pertinent and required representation in connection with the provisions of the Bankruptcy Code. Bond Schoeneck will be paid at these hourly rates: Stephen A. Donato $480 Camille W. Hill $430 Kate Chmielowiec $240 Nathan D. Basalyga $220 Andrew S. Rivera $220 Kristin M. Doner $180 Camille W. Hill, Esq., a member of Bond, disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Camille W. Hill, Esq. BOND, SCHOENECK & KING, PLLC One Lincoln Center Syracuse, NY 13202-1355 Tel: (315) 218-8000 Fax: 315-218-8100 E-mail: chill@bsk.com About Rochester Drug Co-Operative, Inc. 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 and Epiq Corporate Restructuring, LLC as the claims and noticing agent. RUBIE'S COSTUME: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Rubie's Costume Company, Inc. 1770 Walt Whitman Road Melville, NY 11747 Business Description: Rubie's, a New York corporation, is a designer, manufacturer and distributor of costumes and related accessories with a wide ranging portfolio of non-exclusive licenses including, but not limited to: Marvel, Warner Brothers, Nickelodeon, Disney, and Lucasfilm. Chapter 11 Petition Date: April 30, 2020 Court: United States Bankruptcy Court Eastern District of New York Six affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Rubie's Costume Company, Inc. (Lead Case) 20-71970 Forum Novelties Inc. 20-71971 The Diamond Collection LLC 20-71972 Buyseasons Enterprises LLC 20-71973 Masquerade LLC 20-71974 Rubie's Masquerade Co. (USA) LLC 20-71975 Judge: Hon. Alan S. Trust Debtors' Bankruptcy Counsel: Edward J. LoBello, Esq. Howard B. Kleinberg, Esq. Jordan D. Weiss, Esq. MEYER, SUOZZI, ENGLISH & KLEIN, P.C. 990 Stewart Avenue, Suite 300 Garden City, New York 11530 Tel: (516) 741-6565 Email: elobello@msek.com hkleinberg@msek.com jweiss@msek.com - and - Frank Oswald, Esq. Brian Moore, Esq. TOGUT, SEGAL & SEGAL LLP One Penn Plaza, Suite 3335 New York, New York 10119 Tel: (212) 594-5000 Email: frankoswald@teamtogut.com bmoore@teamtogut.com Debtors' Financial Advisor: BDO USA, LLP Debtors' Investment Banker: SSG CAPITAL ADVISORS, LLC Debtors' Claims & Noticing Agent: KURTZMAN CARSON CONSULTANTS https://www.kccllc.net/rubies Rubie's Costume's Estimated Assets: $100 million to $500 million Rubie's Costume's Estimated Liabilities: $50 million to $100 million The petitions were signed by Marc P. Beige, president. A full-text copy of Rubie's Costume Company's petition is available for free at PacerMonitor.com at: https://is.gd/LSaSGM Consolidated List of Debtors' 30 Largest Unsecured Creditors (Exclusive of Insiders): Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Warner Bros. Licensing Fees $1,859,225 4000 Warner Boulevard Burbank, CA 91522 2. Wuyi Jingjie Clothing Co. Ltd. Foreign Vendor $1,114,567 No. 41 Kai Fa Avenue Bai Hua Shan Industrial Zone Zhejiang 321200, CN 3. Sun Wah Jian Xing Foreign Vendor $1,083,562 Plastic Manufactory No. 38 Sau Sun New Vilkge Industrial Area Shenzhen, CN 4. Mars Hill Foreign Vendor $1,073,248 International Limited 3rd Floor No. 10 Tangxiachong Industry Street Sonngang Town Guangdong, CN 5. FedEx Trade Debt $1,031,939 942 Shady Grove Road Memphis, TN 38120 6. Marvel Licensing Fees $880,608 500 S. Buena Vista Street Burbank, CA 91505 7. AMSCAN Trade Debt $574,324 80 Grasslands Road Elmsford, NY 10523 8. Changzhou Sunwood Foreign Vendor $545,132 International Trading Co. Ltd. Room #2101 Xinhui Building #301 Tongjiang Avenue Jiangsu, CN 9. Jinhuazhihou Garment Co., Ltd. Foreign Vendor $515,141 Small Commodities Industrial Park, Xiaoshun T Jindong District, Jinhua Zhejiang, CN 10. Adrenal LLC Third Party $453,874 415 9th Avenue N Sales Commission Seattle, WA 98109 11. Zhejiang Chinabase Foreign Vendor $433,705 Impex Co., Ltd. Unit C 12/F Ming Yang BL 18 Jiefang Road Shanghai, CN 12. Zhe Jiang Wellfull Foreign Vendor $431,128 Import and Export Co. Ltd. 2/F Yangbao Building Xing Yi Road Yu Hang District Hangzhou, CN 13. Shenzhen Xinhua Lite Foreign Vendor $404,805 Plastics Products Limited Company No. 37 Xia Po Village Long Tian, Kengzi, Pingshan Shenzhen Guangdong, CN 14. Hungshan Sea and Sand Co., Ltd. Foreign Vendor $391,842 22 Xin Hang Road Cheng Bei Industrial Zone An Hui Province, CN 15. Panan Rikang Costume Co., Ltd. Foreign Vendor $387,749 2321 Ogden Ave Downers Grove, IL 16. Zhejiang Panan Combaal Foreign Vendor $385,511 Clothing Co., Ltd. Fu Hua Yuan Xincheng District Zhejiang, CN 17. Active Marketing Group Inc. Third Party $369,865 4640 Gulfstarr Drive Sales Commission Destin, FL 32541 18. Google Trade Debt $254,493 1600 Amphitheatre Parkway Mountain View, CA 90453 19. Panan Luolan Arts and Foreign Vendor $241,075 Crafts Co. Ltd. No. 19 Shanghu Industrial Function Zone Panan County Zhejiang, CN 20. Sunrise Party Products Foreign Vendor $228,303 Company Limited RM B1 7/F Cheung Fat Building Kowloon, HK 21. Yiwu Partyland Costumes Co. Ltd. Foreign Vendor $216,648 6th Floor Area A No. 7 Building Nan Wu Road Zhejiang, 321035 CN 22. Dong Yang Xingbang Foreign Vendor $215,988 Cultural and Creative Co., Ltd. No. 38 Xinchao Road Garments Industrial Zone Economic Development Zone Zhejiang Province, 32200 CN 23. Unique Industries Inc. Trade Debt $212,069 4750 League Island Boulevard Philadelphia, PA 19112 24. Creative Converting Trade Debt $185,960 255 Spring Street Clintonville, WI 25. Zhenjiang Lian Yew Foreign Vendor $181,413 No. 12, Hengyuan Road Dantu Industrial Park Zhenjiang, Jiangsu, CN 26. Ningbo Eliter Import and Foreign Vendor $176,838 Export Co. Ltd. RM 906, No.311 Jiangnan Yipin Plaza Ningbo, CN 27. Anhui Dinghui Toys Foreign Vendor $159,305 288# Luchao Road Lujiang County Anhui, CN 28. Dongyang Tanke Foreign Vendor $158,018 100 Shimaodadao Dongyang Jinhua City 321000, CN 29. Erric Sorelle Studios Ltd. Trade Debt $154,592 215 W. Hoffman Avenue Lindenhurst, NY 11757 30. Dongyang Kexin Foreign Vendor $146,916 No. 278 Hanning Rd (W) Dongyang City, Zhejiang, CN SAEXPLORATION: Pannell Kerr Forster Raises Going Concern Doubt -------------------------------------------------------------- SAExploration Holdings, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $22,613,000 on $255,234,000 of revenue for the year ended Dec. 31, 2019, compared to a net loss of $59,560,000 on $98,670,000 of revenue for the year ended in 2018. The audit report of Pannell Kerr Forster of Texas, P.C. states that the Company has experienced recurring losses from operations and has been unable to renegotiate its expiring senior loan facility 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 $142,215,000, total liabilities of $178,028,000, and a total stockholders' deficit of $35,813,000. A copy of the Form 10-K is available at: https://is.gd/3UB0E0 SAExploration Holdings, Inc. provides seismic data acquisition, logistical support, and processing services to customers in the oil and natural gas industry in North America, South America, the Asia Pacific, and West Africa. The company's seismic data acquisition services include program design, planning and permitting, camp, survey and drilling, recording, reclamation, and in-field data processing. It acquires 2D, 3D, time-lapse 4D, and multi-component seismic data on land, in transition zones between land and water, and in offshore in depths reaching 3,000 meters. The company operates crews that are supported by approximately 160,000 owned land channels of seismic data acquisition equipment and other leased equipment. It serves integrated oil companies, national oil companies, and independent oil and natural gas exploration and production companies. The company was founded in 2011 and is headquartered in Houston, Texas. SAMANTHA SANSON: Payouts to Unsecureds to Rely on Asset Sales ------------------------------------------------------------- Samantha Sanson Consulting, Inc, submitted a First Amended Disclosure Statement. A Disclosure Statement Hearing will be held on May 12, 2020 at 10:00 am in Courtroom 1668, 255 E. Temple Street, Los Angeles, CA 90012. The Debtor has determined that it may have a preference claim pursuant to 11 U.S.C. Sec. 547 against Samantha Sanson arising out of a prepetition loan made by Ms. Sanson to the Debtor days before the filing of the case to cover payroll obligations to the Debtor's employees. The loan was partially paid back to Ms. Sanson two days after the Petition Date in the sum of $20,000. The Debtor has not pursued that claim at this time due to the lack of funds to prosecute adversary actions. Nonetheless, Ms. Sanson is aware of the claim and intends to resolve such claim at or prior to confirmation of the Debtor's Plan in this case. On March 15, 2020, the business operations of King Henry VIII were forced to cease due to the order from the California Governor relating to the closure of all non-essential businesses to deal with and prevent the spread of COVID-19. Unfortunately, this will severely impact the value of the assets of the Debtor. Nonetheless, once the assets are sold in the 11 U.S.C. Sec. 363 Sale, the Debtor will distribute whatever proceeds are remaining to allowed unsecured claims after payment of administrative and priority claims in this case. The current proposed distributions to unsecured creditors are as follows: * Class 1: Allowed General Unsecured Claim of Teela King. Class 1 Claim is impaired. The Allowed Unsecured Claims in Plan Class 1 will share pro rata in a one-time distribution in the amount of the proceeds received from a sale of the Debtor's assets up to payment in full; however, no interest will accrue or be paid. * Class 2: Allowed General Unsecured Claim of Dashawn Crosby. Class 2 Claim is impaired. The Allowed Unsecured Claims in Plan Class 2 will share pro rata in a onetime distribution in the amount of the proceeds received from a sale of the Debtor's assets up to payment in full; however, no interest will accrue or be paid. * Class 3: Allowed General Unsecured Claim of D'Antanec Jackson. Class 3 Claim is impaired. The Allowed Unsecured Claims in Plan Class 3 will share pro rata in a onetime distribution in the amount of the proceeds received from a sale of the Debtor's assets up to payment in full; however, no interest will accrue or be paid. The Interest Holders will retain their interest if the Plan is confirmed and will receive the net benefit, if any, after the payment of Class 1 and Class 2 Allowed Unsecured Claims. A full-text copy of the First Amended Disclosure Statement dated April 13, 2020, is available at https://tinyurl.com/ycoz8ohm from PacerMonitor.com at no charge. Attorneys for the Debtor: J. BENNETT FRIEDMAN, ESQ. FRIEDMAN LAW GROUP, P.C. 1901 Avenue of the Stars, Suite 1000 Los Angeles, California 90067 Telephone: (310) 552-8210 Facsimile: (310) 733-5442 E-mail: jfriedman@flg-law.com About Samantha Sanson Consulting Established in 1999, Samantha Sanson Consulting Inc. was created by Samantha Sanson to provide consulting and advisory services to the adult entertainment/performance industry. Samantha Sanson Consulting Inc. filed a voluntary Chapter 11 petition (Bankr. E.D. Cal. Case No. 19-24428) on Dec. 10, 2019, and is represented by J. Bennett Friedman, Esq., at Friedman Law Group, P.C. The Debtor estimated under $1 million in both assets and liabilities. SCOOBEEZ INC: Unsec. Creditors to Get 20% of Shares, Cash in Plan ----------------------------------------------------------------- Debtors Scoobeez, Scoobeez Global Inc. and Scoobur LLC, Hillair, and the Official Committee of Unsecured Creditors filed a First Amended Disclosure Statement in support of their First Amended Chapter 11 Joint Plan of Reorganization for the Debtors. The Plan provides a $1.5 million carve-out for the Debtors' estates, and a trust with litigation claims and potential excess from the carve-out, after payment of professional fees, in which Class 4 General Unsecured Creditors share if they vote in favor of the Plan. The Plan also reorganizes the Debtors as of the Effective Date, with Hillair receiving 80% of the equity in the Reorganized Debtors, and Class 4 General Unsecured Creditors receiving 20% of the equity in the Reorganized Debtors, if they vote in favor of the Plan. The Plan also provides for Hillair to receive the first $5,000,000 of proceeds of the Amazon Litigation, with the Creditor Trust to receive 25%, and Hillair to receive 75%, of remaining recoveries from the Amazon Litigation thereafter. Moreover, upon the Effective Date, Hillair's secured claim will be reduced from $11,108,500 to $3 million. The Debtors, Hillair and the Committee (the "Plan Proponents") believe that the Plan provides more value to the Estates and their constituents than would result from a chapter 7 conversion. The distribution of cash to creditors shall be in full and complete satisfaction of all claims against the Debtors' estates. To that end, the Plan provides for the treatment of Claims against the Debtors and Equity Interests in the Debtors. It is estimated that the Plan would enable greater distributions than would be available in a chapter 7 liquidation, and that holders of Allowed General Unsecured Claims will receive a recovery of approximately $529,000 if the Plan is confirmed, depending on the final amount of Allowed General Unsecured Claims. If the Plan is not confirmed, it is estimated that the holders of Allowed General Unsecured Claims would receive $0 in recovery under a Chapter 7 liquidation. A full-text copy of the First Amended Disclosure Statement dated April 14, 2020, is available at https://tinyurl.com/yadw59cc from PacerMonitor at no charge. Attorneys for the Creditors' Committee: David L. Neale John-Patrick M Fritz LEVENE NEALE BENDER YOO & BRILL, LLP 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Telephone: 310.229.1234 Facsimile: 310.229.1244 E-mail: dln@lnbyb.com E-mail: jpf@lnbyb.com Attorneys for Hillair Capital: Adam H. Friedman OLSHAN FROME WOLOSKY LLP 1325 Avenue of the Americas New York, NY 10019 Telephone: 212.451.2216 Facsimile: 212.451.2222 E-mail: afriedman@olshanlaw.com Attorneys for the Debtors: Ashley M. McDow John A. Simon Shane J. Moses FOLEY & LARDNER LLP 555 South Flower Street, Suite 3300 Los Angeles, CA 90071-2411 Telephone: 213.972.4500 Facsimile: 213.486.0065 E-mail: amcdow@foley.com - and - Anthony J Napolitano BUCHALTER, A PROFESSIONAL CORPORATION 1000 Wilshire Blvd., Suite1500 Los Angeles, CA 90017-2457 Telephone: 213.891.5109 Facsimile: 213.630.5834 E-mail: anapolitano@buchalter.com About Scoobeez Inc. Scoobeez Inc. -- https://www.scoobeez.com/ -- operates an on demand door-to-door logistics and real time delivery service company. It offers messaging, same day and preferred deliveries, and courier services. Scoobeez and its affiliates, Scoobeez Global Inc. and Scoobur LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 19-14989) on April 30, 2019. Judge Julia W. Brand oversees the cases. At the time of the filing, Scoobeez had estimated assets and liabilities of between $10 million and $50 million while Scoobur had estimated assets and liabilities of less than $50,000. Meanwhile, Scoobeez Global disclosed $6,274,654 in assets and $7,886,579 in liabilities. Foley & Lardner LLP is the Debtors' bankruptcy counsel. Conway Mackenzie, Inc., is the Debtors' financial advisor. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 20, 2019. The committee retained Levene, Neale, Bender, Yoo & Brill LLP as its counsel. SEQUA CORP: Moody's Lowers CFR to Caa3, Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded its ratings for Sequa Corporation, including the company's corporate family rating (CFR, to Caa3 from Caa1) and probability of default rating (to Caa3-PD from Caa1-PD), as well as the ratings for its first lien senior secured credit facilities (to Caa2 from B3) and second lien senior secured term loan (to Ca from Caa2) under Sequa Mezzanine Holdings L.L.C. The ratings outlook remains negative. RATINGS RATIONALE The downgrades reflect Moody's expectation of earnings headwinds for Sequa's Chromalloy and Precoat businesses that will result in increased leverage and an across-the-board weakening of the company's credit metrics. The downgrade also considers Sequa's weak liquidity profile which is characterized by a short-dated capital structure, a fully utilized revolving credit facility, and expectations of negative free cash flow during 2020. Moody's recognizes Sequa's topline growth and improved operating performance over the last 12 to 18 months that has resulted in a material improvement in earnings quality and better cash generation. Nevertheless, Moody's now expects Sequa to face a more challenging operating environment over the balance of 2020 and into 2021. Moody's views Sequa's Chromalloy segment as being highly vulnerable to coronavirus disruptions and has particular concerns around earnings pressures facing its high margin commercial aftermarket business. These business disruptions will create meaningful earnings and cash flow pressures and are against a backdrop of looming principal obligations that become due within the next year. The Caa3 corporate family rating considers Sequa's weak balance sheet and the cyclical nature of its aerospace and metal casting markets that are vulnerable to economic downturns. Sequa's poor track record of cash generation, elevated debt-to-EBITDA (estimated to be in excess of 6.5x as of March 2020) and short-dated capital structure figure prominently in the rating. Moody's expects a high interest burden combined with variable working capital needs and on-going business investments to continue to weigh on company cash flows. The rating also reflects the highly competitive nature of Sequa's Chromalloy segment (60% of sales) which faces OEM pricing pressure and comparatively low levels of profitability. 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, Sequa'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 Sequa of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook incorporates Moody's expectations of challenging operating environment and earnings and cash flow headwinds for at least the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include extending the maturities of Sequa's short-dated capital structure, an improving liquidity profile involving greater availability under the revolving credit facility or expectations of improved cash generation. The ratings could also be upgraded if strong operational performance is demonstrated over the next 12 months and if Sequa's earnings profile holds up better than expected during the coronavirus disruptions. Factors that could lead to a downgrade include an inability to extend the looming principal obligations in a timely manner, or if cash balances were expected to deteriorate meaningfully below current levels or if cash burn during 2020 was more anticipated to be more pronounced that currently contemplated. The following summarizes its rating actions: Issuer: Sequa Corporation Corporate Family Rating, downgraded to Caa3 from Caa1 Probability of Default Rating, downgraded to Caa3-PD from Caa1-PD Outlook: remains Negative Issuer: Sequa Mezzanine Holdings L.L.C. First lien senior secured credit facility, downgraded to Caa2 (LGD3) from B3 (LGD3) Second lien senior secured credit facility, downgraded to Ca (LGD5) from Caa2 (LGD5) Outlook: remains Negative Sequa Corporation, headquartered in Palm Beach Gardens, FL, is a diversified industrial company operating in two business segments: Aerospace, through Chromalloy Gas Turbine, and metal coating, through Precoat Metals. Sequa was purchased via a $2.8 billion LBO by affiliates of Carlyle Partners V, L.P. in December 2007. Revenues for the twelve months ended December 2019 were $1.5 billion. SHIFT4 PAYMENTS: Moody's Lowers CFR to B3, Outlook Stable --------------------------------------------------------- Moody's Investors Service downgraded Shift4 Payments, LLC's Corporate Family Rating to B3 from B2 and Probability of Default Rating to B3-PD from B2-PD. The company's first lien senior secured credit facility rating was downgraded to B2 from B1, and the second lien credit facility rating was downgraded to Caa2 from Caa1. The rating outlook remains stable. The downgrade of the CFR is driven by the negative impact of the coronavirus outbreak on the company's EBITDA and free cash flow generation. RATINGS RATIONALE Shift4's credit profile is substantially impacted by the unprecedented disruption of commerce during the coronavirus outbreak. Moody's regards the coronavirus outbreak as a social risk under the ESG framework. Shift4 is relatively more vulnerable than the merchant acquiring industry as a whole, due to its business mix highly weighted to SME merchants and restaurants as well as its relatively low card-not-present e-commerce exposure. While prior to the outbreak Shift4's integrated payments and proprietary POS software solutions were driving strong growth, Moody's believes Shift4 is likely to experience a net revenue decline of about 40% in Q2 2020. Moody's expects revenues to gradually recover in Q3 and Q4 to levels still below Q1, resulting in a full year 2020 decline of about 20%. Cost actions and Merchant Link synergies will support margins, but negative operating leverage will cause EBITDA to decline about 30% for the year. Shift4 drew its revolver in March 2020 and Moody's estimates that it ended Q1 with about $70 million of available cash. Moody's expects FCF in Q2 to be meaningfully negative, but expects a solid cash liquidity cushion to remain at the end of quarter. Moody's projects FCF to return to modestly positive levels in Q3 and Q4 as revenues gradually rebound and cost savings are achieved. Total leverage on LTM EBITDA basis will increase gradually from about 6x at the end of 2019 to over 9x by the end of 2020. Moody's expect Shift4's high proportion of integrated payments and subscription-based relationships to sustain its customer base through the trough and to support recovery in 2021. Integrated payment solutions and POS software are likely to become even more important as competitive factors after the outbreak. As revenues and FCF recover in 2021, leverage should decline meaningfully but is likely to remain elevated. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook is predicated upon an improvement in EBITDA and free cash flow generation in the second half of 2020 following the expected difficult second quarter, and maintenance of adequate liquidity. The ratings could be upgraded if revenues and EBITDA return to consistent growth and leverage declines below 6.5x. The ratings could be downgraded if an improvement in performance in the second half of 2020 does not materialize or if liquidity weakens. Shift4's adequate liquidity is supported by cash balances of about $70 million at the end March 2020. Free cash flow will be negative in Q2, partially depleting the cash balances. As discussed above, Moody's expects a sufficient cash liquidity cushion to remain at the end of Q2, and believes that the company should be able to return to modestly positive free cash flow generation in Q3 and Q4. Downgrades: Issuer: Shift4 Payments, LLC Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD First Lien Senior Secured Credit Facilities, Downgraded to B2 (LGD3) from B1 (LGD3) Second Lien Senior Secured Term Loan, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: Shift4 Payments, LLC Outlook, Remains Stable The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. With net revenues of about $338 million in 2019 pro forma for acquisitions, Shift4 is a merchant acquirer and POS software solutions provider. 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. 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 are most sensitive to consumer demand and sentiment, including global passenger airlines, lodging and cruise, autos, as well as those in the oil & gas sector most negatively affected by the oil price shock. 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. SIMKAR LLC: Trustee's Liquidating Plan Confirmed by Judge --------------------------------------------------------- Judge Robert D. Drain has entered findings of fact, conclusions of law and order confirming Disclosure Statement and Second Modified Plan of Liquidation proposed by Sandeep Gupta, the chapter 11 Trustee for Neo Lights Holding, Inc., a debtor affiliate of Simkar LLC. In determining that the Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the formulation of the Plan and the solicitation of votes to accept or reject the Plan. Furthermore, the Plan represents extensive arm’s length negotiations among the Trustee and other parties in interest, as well as their respective legal and financial advisors, and reflects the best interests of the Debtor’s Estate and holders of Claims and Interests. Holders of Claims in Classes 1, 2, 3 and 4 are unimpaired, and are conclusively presumed to have accepted the Plan. Holders of claims in Class 5 are impaired, and as demonstrated by the Voting Certification, Class 5 has accepted the Plan in accordance with section 1126(c) of the Bankruptcy Code. Classes 6, 7, and 8 are Impaired. Holders of Claims in Classes 6 and 7 and Interests in Class 8 are not entitled to receive or retain any property under the Plan and are thus deemed to have rejected the Plan. A full-text copy of the order dated April 14, 2020, is available at https://tinyurl.com/ycra2bn8 from PacerMonitor at no charge. About Simkar LLC Based in Tarrytown, New York, SIMKAR LLC -- http://www.simkar.com/ -- is an internationally known designer, developer, and manufacturer of lighting products. Since 1952, the Company has provided a diverse selection of high-quality LED lighting fixtures, along with other technologies to contractors, specifiers, and other strategic partners. The Company designs and manufactures lighting fixtures at its 283,500 square foot manufacturing facility in Philadelphia, PA. Neo Lights Holdings, Inc. -- http://neolightsholdings.com/-- is a renewable energy technology company and global developer and manufacturer of LED technologies, smart sensors and networking systems, with innovative approaches to off-grid and on grid emergency management networked solutions for commercial, domestic, international, and government markets. SIMKAR LLC filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 19-22576) on March 6, 2019. At the time of filing, the Debtor had estimated assets and estimated liabilities of $10 million to $50 million. Neo Lights sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.19-22589) on March 8, 2019, estimating $1 million to $10 million in assets and liabilities. The petitions were signed by Alfred Heyer, Neo Lights Holdings Inc., president of managing member. The Debtors' counsel is H. Bruce Bronson, Jr., Esq., in Harrison, New York. SKIP LLC: June 3 Hearing on Disclosure Statement ------------------------------------------------ Skip, LLC, will move the court for approval of its disclosure statement and authorization to file its proposed plan of reorganization on June 3, 2020 at 11:00 a.m. or as soon thereafter as the matter can be heard, in Courtroom 35 of the United States Bankruptcy Court, Eastern District of California, located at 501 I Street, 6th Floor, Sacramento, California. Written objection to the motion must be filed and served not less than 14 calendar days before the date set for hearing. Skip, LLC, on March 22, 2019 filed a Disclosure Statement that describes Plan that provides that general unsecured creditors will receive a distribution of 0% of their allowed claims. Class 1 Swift Financial is impaired with a total claim of $68,197. Creditor will be paid the value of the collateral, $20,000 upon confirmation of the plan. The unsecured portion of creditor's claim will be paid under class 2. Class 2 general unsecured creditors won't receive anything. The limited liability company will be sold to Prakash Chandra for $45,000. The consideration received will be distributed to creditors pursuant to the terms of the plan. A full-text copy of the Disclosure Statement dated April 13, 2020, is available at https://tinyurl.com/yamgujn5 from PacerMonitor.com at no charge. Attorney for Debtor: W. STEVEN SHUMWAY, ESQ. 3400 Douglas Blvd., Suite 250 Roseville, California 95661 Tel: (916) 789-8821 Fax: (916) 789-2083 E-mail: sshumway@shumwaylaw.com About Skip LLC Skip, LLC, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No. 19-26679) on Oct. 28, 2019, estimating under $1 million in both assets and liabilities. The Law Office of W. Steven Shumway is the Debtor's counsel. SLM CORP: Fitch Alters Outlook on 'BB+' LT IDR to Negative ---------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of SLM Corporation and Sallie Mae Bank at 'BB+'. The Rating Outlook has been revised to Negative from Stable. Its rating actions have been taken as part of a peer review of seven publicly rated U.S. consumer finance companies that reflects a significant revision of Fitch's economic assumptions stemming from the coronavirus pandemic. KEY RATING DRIVERS The revision of SLM's Rating Outlook to Negative reflects the emergence of significant downside risk to SLM's financial profile metrics, particularly asset quality and capitalization, resulting from the actions taken by federal and state governments to limit the spread of the coronavirus pandemic, which have led to sharp declines in U.S. economic activity. While federal government programs, including loans/grants to small businesses, enhanced unemployment insurance payments, and one-time payments to low- and middle-income households combined with SLM's extension of borrower payment deferrals or forbearance should help mitigate the financial implications from the pandemic, the severe reduction in economic activity presents significant downside risks for lenders. Fitch's Global Economic Outlook currently projects a sharp increase in the U.S. unemployment rate, to 14%, in 2Q20 before moderating in subsequent months to still nearly twice pre-crisis levels in 2021. The surge in unemployment stemming from the pandemic yielded an increase in SLM's forbearance rate on its private education loan portfolio to 6.2% at March 31, 2020, from 4.1% at year end, and further to 11.8% in the first few weeks of April. While Fitch believes forbearance programs should help mitigate defaults for those borrowers that are temporarily displaced, it could also delay the losses for those that will remain unemployed for an extended period. As a result of the weaker economic backdrop as well as the effects of the adoption of the current expected credit loss accounting standard, SLM increased its loss reserve coverage on its private education loan portfolio to 7.2% in 1Q20 from 1.8% at 4Q19. Although management believes charge-off rates could trend up into the low-to-mid 2% range under a severely adverse stress scenario, Fitch believes the wide-ranging impact of the pandemic-induced crisis could result in credit losses that exceed those experienced during the financial crisis in 2008 Fitch views SLM's "Smart Option" loan product as being of higher quality than legacy SLM's "Signature" loan product that was originated prior to the financial crisis, but believes the impact of the pandemic could prove to be longer lasting and damaging to the U.S. economy. Only 45% of SLM's private education loans were in full principal and interest repayment at March 31, 2020, which should provide more time for the effects of the pandemic to ease before those borrowers still attending college seek employment. However, to the extent students and their families experience financial hardship as a result of the pandemic and are forced to drop out because they can no longer afford the cost of higher education it would likely have a more meaningful effect on SLM's credit performance. Generally speaking, the employment of college graduates should be less directly impacted by the pandemic than the broader population, and thus Fitch expects credit performance on these loans to be better than other unsecured consumer loans such as credit cards. Nonetheless, the magnitude of credit losses will depend on the duration of business shutdowns and the proportion of borrowers that are able to regain employment upon the economy "re-opens". In addition to higher expected credit losses, SLM is expected to experience significant net interest margin compression this year as a result of the sharp decline in market interest rates which will have a negative impact on its cash and securities portfolio yield. SLM's NIM declined to 5.08% in 1Q20, down 68bp from 2019, and management guided to a 4.9% NIM for 2020. Management was able to execute on the sale of roughly $3 billion in private education loans in the first quarter for a gain of $239 million. The company used proceeds from the loan sales along with capital freed up from the loan sale to enter into a $525 million accelerated share repurchase agreement that is expected to be executed by the counterparty over the remainder of this year despite the impact to SLM's equity capital being immediate. Assuming market conditions are reasonable, management expects to continue this strategy of share repurchases connected to loan sales in subsequent years. If conditions for loans sales are unfavorable next year, the company would likely retain the loans for some period of time and curtail share repurchases. While loan sales will result in greater quarterly earnings volatility and result in less attractive long-term returns on the loans, an increase in share repurchases would likely only result in negative rating actions to the extent they had a meaningful negative impact on SLM's CET1 ratio. Management indicated that its peak season loan volume in the third quarter could potentially be negatively impacted should colleges and universities have difficulty in returning to normal operations in the fall. While student loan demand has historically increased when unemployment rises, the nature of this pandemic-induced downturn may result in a different outcome. A significant decline in loan volume would be viewed unfavorably to the extent it results in reduced near-term earnings generation for the company. SLM's loan portfolio may benefit from a slowdown in the student loan consolidation market caused by the significant widening of spreads in the ABS market that many consolidators use to fund their loans. While this may be a temporary phenomenon, an easing of volume in the refi market would be constructive to SLM's portfolio growth as consolidators have aggressively refinanced loans away from SLM over the past few years. SLM's bank common equity Tier 1 ratio increased to 12.4% in 1Q20 from 12.2% at year-end 2019 as a result of the loan sales, however the stated CET1 ratio excluded the effects of CECL as regulators have provided a two-year deferral (prior to a three-year phase in) in an attempt to ease the impact of the crisis. Including the effects of CECL, Fitch estimates SLM's CET1 ratio would have declined to 8.6% in 1Q20. Fitch believes SLM's earnings and capital ratios are likely to be pressured over the next several quarters as a result of the pandemic. Fitch believes SLM's liquidity is solid and sufficient to manage its financial needs in the current environment. SLM had a sizeable cash/liquid securities portfolio, representing 24% of total assets at March 31, 2020, of which $7.3 billion was held in cash. While this is expected to decline over the course of the year as the company funds loans in the peak enrollment season, it does not have any unsecured debt maturing until $200 million matures in April 2022. The company is over 80% deposit funded, with 56% of deposits being brokered. As a result, the company has a sizeable amount of unencumbered loans, including $700 million of government-guaranteed FFELP loans that could potentially be pledged to borrowing facilities or securitized. The company also has access to the Federal Reserve's discount window where it can pledge MBS and ABS securities as well as FFELP and private education loans if needed. The rating affirmations reflect SLM's leading market position in the U.S. private education loan industry, above average returns and operating performance relative to peer banks, solid credit track record, and sufficient levels of capital and liquidity. Rating constraints include SLM's monoline business model and heavy reliance on net interest income, heightened legislative/regulatory risk associate with the student lending/servicing business, the duration mismatch between demand deposits and longer-term student loans, and SLM's higher proportion of brokered deposits which are more sensitive to interest rates. SUPPORT RATING AND SUPPORT RATING FLOOR SLM has a Support Rating of '5' and Support Rating Floor of 'NF'. In Fitch's view, SLM is not systemically important, and therefore the probability of sovereign support is unlikely. SLM's IDRs and VRs do not incorporate any support. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Fitch's 'B+' rating on the series B preferred shares reflect their linkage to the VR. The notching reflects the subordinated payment priority and weaker recovery prospects for these instruments, in accordance with Fitch's "Global Bank Rating Criteria". The series B preferred shares are rated three notches below the VR, reflecting the instrument's non-performance and relative loss severity risk profile in addition to their non-cumulative nature. DEPOSIT RATINGS Sallie Mae Bank's uninsured long-term deposit ratings are rated one-notch higher than SLM's Long-Term IDR and senior unsecured debt because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. SLM's has an ESG Relevance Score of '4' for Exposure to Social Impacts due to its exposure to shift in social or consumer preferences as a result of an institution's social positions, or social and/or political disapproval of core activities which, in combination with other factors, impacts the rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: A significant erosion in SLM's CET1 ratio below 11% (excluding CECL-related effects), meaningful deterioration in portfolio credit quality, a greater emphasis on brokered deposits and secured funding, or legislative actions aimed at reducing demand for private education loans are among the factors that could lead to a negative rating action. Negative ratings momentum could also be driven by a meaningful reduction in the importance of the school financial aid office channel for student loan originations, or further increases in loans being refinanced from SLM that would result in meaningful margin pressure and/or weaker credit performance. Factors that could, individually or collectively, lead to positive rating action/upgrade: Factors that could lead to a revision of the Outlook back to Stable, include improved visibility of the company's credit performance and profitability outlook such that there is an increased level of confidence that SLM's performance relative to Fitch's benchmark metrics will remain within cyclical norms over the Outlook horizon, and the ability to demonstrate capital resiliency through the current severely adverse economic environment. Longer-term, positive rating momentum could develop from meaningful improvements in core fee-business growth and operating performance, a demonstrated ability to successfully grow new businesses that enhance SLM's earnings capacity and a moderation in shareholder distributions. SUPPORT RATING AND SUPPORT RATING FLOOR Since SLM's Support Rating and Support Rating Floor are '5' and 'NF', respectively, there is limited likelihood that these ratings will change over the foreseeable future. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES The preferred stock ratings are sensitive to any changes in SLM's VR and would be expected to move in tandem. DEPOSIT RATINGS The long- and short-term deposit ratings are sensitive to any change in SLM's Long- and Short-Term IDRs and would be expected to move in tandem. BEST/WORST CASE RATING SCENARIO Ratings of Financial Institutions 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. 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. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions 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. SM ENERGY: Fitch Lowers IDR to 'C' on Debt Exchange Announcement ---------------------------------------------------------------- Fitch Ratings has downgraded SM Energy Company's Issuer Default Rating to 'C' from 'B-' following the company's announcement of an offer to exchange a series of senior secured notes for new second lien notes. The downgrade results from Fitch viewing the transaction as a distressed debt exchange. Per Fitch's criteria, the IDR will be downgraded to Restricted Default upon the completion of the DDE. The IDR will subsequently be re-rated to reflect the post-DDE credit profile. Fitch has also downgraded the affected senior unsecured notes to 'C'/'RR4' from 'B-'/'RR4'. The ratings on SM's senior secured revolver are affirmed. The Rating Watch Negative has been removed. The transaction contemplates a tender offer to exchange any or all senior unsecured notes for up to $900 million aggregate principal amount of newly issued 10% senior secured notes maturing at various dates depending on the particular senior note that is being exchanged. The new notes will be secured by a second priority security interest in the collateral that secures SM's senior secured revolver. The maximum number of new notes that the company will issue in the exchange offer will not exceed $900 million provided SM will not except for exchange more than $1,350 million aggregate principal of old notes having an acceptance priority level equal or lower to priority level 3, as defined. Upon completion of the DDE, Fitch will assign ratings to the exchanged notes; it is not relevant to the ratings that the new securities will be the products of a DDE. KEY RATING DRIVERS Exchange Addresses Pending Maturities: The terms of the proposed transaction would address certain near-term debt maturities and provide SM with some runway in hopes of benefiting from an increase in oil prices from current historic lows. SM has structured the transaction to incentivize holders of notes with near term maturities to accept the exchange. Although the exchange buys time for the company given the lack of access to capital markets for most energy companies and reduces debt, it will not address the continued rolling debt maturity schedule, relatively high debt load, and exposure to volatile commodity prices. First Quarter Update: SM reported first quarter results with production coming in higher than expected. The company was able to generate approximately $80 million of FCF (before changes in working capital and capital expenditure accruals.). SM also applied FCF to make open market purchases of senior notes and reduce the senior secured revolver by a principal amount of $91 million. The 2020 capex budget was reduced by 20% from previous guidance and the borrowing base was redetermined at $1.1 billion from $1.6 billion and aggregate lender commitments were reduced to $1.1 billion from $1.2 billion. FCF Goal Challenged: SM was able to generate FCF (as defined by the company) during 1Q 2020, but the ability to generate FCF for the remainder of the year will be challenged based on current Fitch pricing assumptions. SM's has hedged approximately 53 mboed of oil production for the remainder of 2020 at approximately $55. Despite the further reduction of capex guidance, current price levels and the potential for reduced production will make it difficult to generate positive FCF. Midland Basin Development Execution: SM's Midland Basin assets continue to exhibit solid performance since the 2016 acquisition through strong well performance and increased capital efficiency. SM's latest 41 RockStar wells have achieved 30-day peak rates averaging approximately 1,395 boe/d at 87% oil. Since the acquisition, SM has materially increased drilling and completion times and lateral length driving well costs down to $600 per lateral foot. Netbacks Below Peers: Due to SM's large exposure to natural gas, its unhedged cash netback of $16.6/boe is well below Permian and other more oil-focused peers. Fitch anticipates the netback to improve over time as the high oil cut Permian assets are developed and recent cost reduction efforts are implemented. Nevertheless, Fitch expects netbacks to remain below SM's peers because of the weight of its natural gas production in its profile. DERIVATION SUMMARY SM's previous 'B-' IDR reflects the company's size, oil-focused Permian Basin position, strong well performance offset by its maturity wall and challenges of operating in a low commodity price environment. In terms of production, at 132,000boepd (62% liquids) as of Dec. 31, 2019, SM Energy is larger than similarly rated peers, Extraction Oil & Gas, Inc. (B-/RWN; 80,000 boepd [67% liquids]) and Baytex Energy Corp. (B+/Negative; 95,000boepd [82% liquids]). Additionally, SM is larger than Vermilion Energy Inc. (BB-/Negative; 97,000boepd [57% liquids]). SM Energy's proved reserve base (462 million barrels of oil equivalent [mmboe]) compares favorably to Extraction's 254 mmboe of proved reserves, Baytex's 233 mmboe of proved reserves and Vermilion's 298 mmboe of proved reserves, as of YE 2018. SM Energy's 3Q19 unhedged cash netbacks of $16.60/boe (50% margin) are slightly lower than Extraction ($19.50/boe [73% margin]), which Fitch believes is partially due to Extraction's higher liquids mix, Baytex ($21.60/boe [46% margin]) and Vermilion ($26.1/boe [61% margin]). SM's debt/flowing barrel of $20,900/bbl is in line with the peer group of $22,900/bbl for Extraction, $20,300/bbl for Baytex and $21,100/bbl for Vermilion, as of 3Q19. Additionally, SM's LTM total debt/EBITDA of 2.8x, as of 4Q19, is slightly better than Extraction at 3.1x, in line with Baytex at 2.3x, and slightly worse than Vermilion at 1.8x. KEY ASSUMPTIONS KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that SM Energy Corp. would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach SM's GC EBITDA assumption reflects Fitch's projections under a stressed case price deck, which assumes WTI oil prices of USD33.00 in 2020, USD37.00 in 2020, USD45.00 in 2021 and USD47.00 in 2022. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which the agency bases the enterprise valuation (EV). The GC EBITDA assumption uses 2023 EBITDA, which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. The model was adjusted for reduced production and varying differentials given the material decline in the prices from the previous price deck. An EV multiple of 4x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.6x and a median of 6.1x; Although the Permian basin assets are considered valuable, the Eagle Ford has less value given the gassier nature of those assets and weak performance of peers in that basin, which includes several bankrupt companies; Fitch uses a multiple of 4x, to estimate a value for SM Energy given the mix of the Eagle Ford basin. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch considers valuations such as SEC PV-10 and M&A transactions for each basin including multiples for production per flowing barrel, proved reserves valuation, value per acre, and value per drilling location. The revolver is assumed to be 80% drawn upon default with the expectation that commitments would be reduced during a redetermination. The revolver is senior to the senior unsecured bonds in the waterfall. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' recovery for the first lien revolver ($960 million) and a recovery corresponding to 'RR4' for the senior unsecured guaranteed notes $1.193 billion. Upon completion of the DDE, Fitch will assign debt issue ratings based upon a recovery analysis of the revised capital structure. In a simplistic scenario that assumes the entire of $900 million of new senior secured notes are issued and exchanged for senior unsecured notes, Fitch estimates recovery for the senior unsecured notes will drop to the 'RR5' range. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Per Fitch's criteria, SM's IDR will be downgraded to Restricted Default upon the completion of the debt exchange. The IDR will subsequently be re-rated to reflect the post-DDE credit profile. Fitch currently expects the re-rated post-exchange IDR to be no higher than 'B-' given SM's debt maturity profile and weak FCF generation. Relative to the prior 'B-' IDR, factors that would support a positive rating action: - Production increases driven by successful development of the RockStar acreage; - Debt/EBITDA is maintained in the low-3x range; - Maintenance of an adequate hedging program to facilitate drilling and completion activity; - Successful renegotiation of the revolving credit facility extending the maturity. Factors that could, individually or collectively, lead to negative rating action/downgrade: A post DDE IDR that is lower than the previous 'B-' would reflect an expectation that the company will struggle to refinance upcoming maturities, leading Fitch to expect either another DDE or a more comprehensive restructuring. BEST/WORST CASE RATING SCENARIO International scale credit 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 SM's senior secured credit agreement provides for a maximum loan amount of $2.5 billion. The borrowing base was reduced to $1.1 billion from $1.6 billion and aggregate lender commitments were reduced to $1.1 billion from $1.2 billion following the company's redetermination amended credit agreement in April 2020. The amendment also allows for up to $900 million of second lien debt provided the proceeds are used to redeem senior unsecured debt. Availability under the revolver was $1.1 billion as of April 29, 2020. The credit facility matures on Sept. 28, 2023. The maturity will spring to Aug. 16, 2022 if there is more than $100 million outstanding on the 2022 notes and there is more than $300 million of availability under the revolver combined with unrestricted cash and certain types of unrestricted investments. If the 2022 notes are redeemed from the proceeds of the second lien debt, the credit facility maturity will be revised to July 2, 2023. The facility has two financial maintenance covenants: A total funded debt to adjusted EBITDAX ratio that cannot be greater than 4.0x beginning March 31, 2020 and an adjusted current ratio that cannot be less than 1.0 to 1.0. The proposed debt exchanged is to address the looming maturity wall. SM has $172.5 million due on its senior convertible notes in 2021 and $477 million of senior notes due in 2022. The company also has $500 million of debt due each year from 2024 to 2027. 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 The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). SONADOR CAPITAL: Case Summary & 2 Unsecured Creditors ----------------------------------------------------- Debtor: Sonador Capital Partners, LLC 131 Alton Park Lane Franklin, TN 37069 Business Description: Sonador Capital Partners, LLC, is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). The Company is the fee simple owner of a property located at Newcomb-Elk Valley Pike and Highway 297, Newcomb, TN, having a comparable sale value of $5 million. Chapter 11 Petition Date: May 1, 2020 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 20-02391 Judge: Hon. Randal S. Mashburn Debtor's Counsel: Steven L. Lefkovitz, Esq. LEFKOVITZ & LEFKOVITZ 618 Church St., #410 Nashville, TN 37219 Tel: 615-256-8300 E-mail: slefkovitz@lefkovitz.com Total Assets: $5,001,501 Total Liabilities: $979,456 The petition was signed by Walter Ray Culp, III, chief manager. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/RIAy8S SOUTHERN PRODUCE: Growers' Bid for Jury Trial Junked ---------------------------------------------------- In the cases captioned SOUTHERN PRODUCE DISTRIBUTORS, INC., Plaintiff, v. BLAKE GARY ADAMS, WILLIAM GARY ADAMS, KEITH SMITH, STRICKLAND FARMING PARTNERSHIP, D&T FARMS, INC., and WARREN FARMING PARTNERSHIP, Defendants, Adversary Proceeding Nos. 19-00064-5-SWH, 19-00066-5-SWH, 19-00067-5-SWH, 19-00068-5-SWH, 19-00065-5-SWH, 19-00069-5-SWH (Bankr. E.D.N.C.), Bankruptcy Judge Stephani W. Humrickhouse ruled on: (1) debtor Southern Produce Distributors Inc.'s objections to claims of Blake Gary Adams, William Gary Adams, Keith Smith, Strickland Farming Partnership, D & T Farms, Inc., and Warren Farming Partnership; and (2) Defendants' demands for jury trials in the adversary proceedings. Specifically, Judge Humrickhouse holds in abeyance the debtor's objections to claims under 11 U.S.C. section 502(d) pending final adjudication of the adversary proceedings, and strikes Defendants' demands for jury trials on the adversary proceedings. Debtor Southern Produce Distributors, Inc. is a sweet potato grower, packer, and shipper based in Faison, North Carolina. As part of its business operation, the debtor regularly purchased sweet potatoes from local growers, packed the purchased potatoes, and sold and shipped them to wholesale and retail vendors. Pre-petition, Blake Gary Adams, William Gary Adams, Keith Smith, Strickland Farming Partnership, D&T Farms, Inc., and Warren Farming Partnership sold sweet potatoes to the debtor, which were utilized to fulfill contracts that the debtor had with buyers of sweet potatoes. On June 12, 2018, Warren Farming Partnership filed Proof of Claim No. 43 wherein it asserted an unsecured claim against the debtor in the amount of $437,404.84. On June 20, 2018, D&T Farms, Inc., filed Proof of Claim No. 45 wherein it asserted an unsecured claim against the debtor in the amount of $602,528.13. On July 27, 2018, Strickland Farming Partnership filed Proof of Claim No. 55 wherein it asserted an unsecured claim against the debtor in the amount of $168,000. The other three involved Growers, Blake Adams, William Adams, and Keith Smith -- Scheduled Claim Growers -- did not file Proofs of Claim. The debtor's Schedules list Blake Adams as having a pre-petition claim in the amount of $33,226.48, William Adams as having a pre-petition claim in the amount of $78,656.40, and Keith Smith as having a pre-petition claim in the amount of $256,707.40. On August 20, 2018, the debtor filed an Emergency Motion for Authority to Make Interim Payments on Critical Pre-Petition Grower Claims. That motion was met with opposition and was ultimately restructured to be a request to make certain pre-payments to the Growers for new post-petition sweet potato contracts. On Sept. 7, 2018, the court entered an Order Authorizing Debtor, In Its Discretion, to Enter into Certain Post-Petition Grower Transactions. In September 2018, the debtor entered into contracts with all six Growers, pursuant to the Order, who agreed to sell to the debtor new crops of sweet potatoes, in exchange for debtor's pre-payment to the Growers, with the remaining balance due within some period of time after the delivery of the potatoes. On May 1, 2019, the debtor initiated six adversary proceedings against the Growers, alleging that the Growers breached the post-petition contracts by failing to deliver some or all of the agreed upon new sweet potatoes, or in some cases requiring additional payments above that required by the Order to obtain the contractually agreed upon amount of new sweet potatoes. The debtor further alleges that the Growers wrongfully applied the pre-payments received for the post-petition contracts to the debtor's pre-petition debts, and that these actions violated not only the various contracts and the Order, but also the automatic stay. The original Complaints asserted these claims for relief: Breach of Contract; Unjust Enrichment; Violation of the Automatic Stay; and Motion for Civil Contempt of Court. In their respective Answers, the Growers admitted the existence of the contracts but denied any breach or liability to the debtor. Four of the Growers asserted Counterclaims in their Answers: Blake Adams, William Adams, Keith Smith, and Warren Farming Partnership. The Counterclaim Growers alleged that debtor breached the contracts by refusing to take delivery of the amount of sweet potatoes specified under the contracts and refusing to pay for all or some of the sweet potatoes that the debtor did accept. All Growers requested a jury trial on all issues so triable. The Bankruptcy Court notes that courts have held that section 502(d) is not applicable until there has been a judicial determination of liability on the part of the Growers. Section 502(d) cannot be invoked to ensure the Grower Defendants comply with a judicial order to turn over property to the bankruptcy estate when there has been no such order entered. The requisite judicial determination will come at the conclusion of the trials on the six adversary proceedings against the Growers. Because there has been no judicial determination of the Growers' liability, denying the Growers' claims against the debtor's estate is premature, the Bankruptcy Court says. Therefore, the debtor's objections to claims of Blake Gary Adams, William Gary Adams, Keith Smith, Strickland Farming Partnership, D & T Farms, Inc., and Warren Farming Partnership, under section 502(d) are held in abeyance pending the outcome of the six adversary proceedings trials. The right to a jury trial is provided by the Seventh Amendment of the United States Constitution: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved." The Bankruptcy Court explains that the Supreme Court has determined a two-prong test to decide if a litigant is entitled to a jury trial under the Seventh Amendment. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989). The first step, according to the Bankruptcy Court, is to compare the "action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity." The second step is to, "examine the remedy sought and determine whether it is legal or equitable in nature." Id. "The second stage of this analysis is more important than the first." Granfinanciera expressly restricted the right to a jury trial in a bankruptcy proceeding: "[B]y submitting a claim against the bankruptcy estate, creditors subject themselves to the court's equitable power to disallow those claims, even though . . . the Seventh Amendment would have entitled creditors to a jury trial had they not tendered claims against the estate." Accordingly, the Bankruptcy Court says Strickland Farming Partnership, D&T Farms, Inc., and Warren Farming Partnership are not entitled to a jury trial in the adversary proceedings brought by the debtor. The Court also says filing a counterclaim against the debtor in an adversary proceeding within the bankruptcy results in the loss of the Seventh Amendment right to a jury trial. Some courts have decided that only a defendant that files a permissive counterclaim in the bankruptcy will lose the Seventh Amendment right to a jury trial, by subjecting itself to the bankruptcy court's equitable jurisdiction, but a defendant that files a compulsory counterclaim will retain the right to a jury trial, the Bankruptcy Court opines. But "an overwhelming majority of courts have determined that parties who file counterclaims, whether permissive or compulsory, trigger the bankruptcy court's process of allowance and disallowance of claims, thereby subjecting themselves to the equitable power of a bankruptcy court, waiving their Seventh Amendment right to a jury trial." The Bankruptcy Court explains that the Counterclaim Growers' argument relies on cases that fall in the minority such as J.T. Moran Financial Corp., v. American Consolidated Financial Corp., which held that for a defendant to impliedly waive its right to a jury trial based on filing a compulsory counterclaim "would be to condone jurisdiction by ambush." Thus, the four Counterclaim Growers -- Blake Adams, William Adams, Keith Smith, and Warren Farming Partnership -- have no right to a jury trial in these adversary proceedings either. A copy of the Court's Order and Opinion dated March 11, 2020 is available at https://bit.ly/2Rhpryw from Leagle.com. Southern Produce Distributors, Inc., Debtor, represented by Gregory B. Crampton -- GCrampton@nichollscrampton.com -- Nicholls & Crampton, P.A., William P. Janvier , Janvier Law Firm, PLLC, Steven Craig Newton, II -- SNewton@nichollscrampton.com -- Nicholls & Crampton, P.A., Kathleen O'Malley , Janvier Law Firm & Kevin L. Sink , Nicholls & Crampton, P.A.. About Southern Produce Southern Produce Distributors, Inc. -- http://southern-produce.com/ -- is a provider of sweet potatoes and peppers to markets across the US, Canada, UK and Europe. Southern Produce was founded in 1942 and is based in Faison, North Carolina. Southern Produce Distributors filed for bankruptcy protection (Bankr. E.D.N.C. Case No. 18-02010) on April 20, 2018. In the petition signed by Randy W. Swartz, president and CEO, the Debtor disclosed total assets of $27.12 million and total liabilities of $19.96 million. Gregory B. Crampton, Esq., of Nichols & Crampton, P.A., serves as counsel to the Debtor. Janvier Law Firm, PLLC, serves as special counsel. SPERLING RADIOLOGY: Taps Mauro Lilling Naparty as Special Counsel ----------------------------------------------------------------- Sperling Radiology P.C., P.A. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Mauro Lilling Naparty LLP as its special appellate counsel. Prior to the Petition Date, the Debtors employed Mauro Lilling as state court appellate counsel in connection with a lawsuit filed in New York by Alan B. Rosenthal and Janet Rosenthal against the Debtors. On March 20, 2020, the Court entered the Order Granting Debtors' Motion to Modify the Automatic Stay to Prosecute State Court Appeals and Post-Trial Motions [ECF No. 164], granting the Debtors' request for limited stay relief in order to prosecute post-trial motions and appeals in the Lawsuit. Given the Mauro Lilling's familiarity with the Lawsuit and with the Debtors, and the fact that the Court is permitting the Debtors to seek post-trial relief in the Lawsuit, it is appropriate that counsel with such knowledge and experience continue to represent the Debtors in the Lawsuit. Mauro Lilling's hourly rates are Partners/of counsel $450 Associates $350 Paralegals $150 On Dec. 4, 2019, prior to the Petition Date, the Debtor provided Mauro Lilling with a security retainer in the amount of $50,000. Matthew W. Naparty, Esq., a partner at Mauro Lilling, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Matthew W. Naparty, Esq. Mauro Lilling Naparty LLP 100 Crossways Park Dr W #310 Woodbury, NY 11797 Phone: +1 516-487-5800 About Sperling Radiology Sperling Radiology P.C., P.A. is a privately held company in Delray Beach, Fla., that offers radiology services. Sperling Radiology filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-26480) on Dec. 10, 2019. In the petition signed by Sam Farbstein, chief operating officer, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Mindy A. Mora oversees the case. Philip J. Landau, Esq. at Shraiberg, Landau & Page, P.A., is the Debtor's counsel. SPI ENERGY: Delays Filing of Annual Report Over COVID-19 -------------------------------------------------------- SPI Energy Co., Ltd., filed a current report on Form 6-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. The Company is relying on order issued by the U.S. Securities and Exchange Commission dated on March 25, 2020 (Release No. 34-88465), providing conditional relief to public companies that are unable to timely comply with their filing obligations as a result of the outbreak of COVID-19, to extend the due date for the filing of the Annual report until June 14, 2020 (45 days after the original due date). The outbreak of COVID-19 has posed a significant impact on the Company's ability to file on a timely basis its Annual Report on Form 20-F for the year ended Dec. 31, 2019. SPI Energy said, "As a result of the global outbreak of the COVID-19, the Company is unable to meet the filing deadline of the Annual Report. The Company's business and facilities are located in Australia, Italy, US, Greece, Hong Kong and Japan. In order to avoid the risk of the virus spreading, the Company has been following the recommendations of local health authorities to minimize exposure risk for its employees, including the temporary closures of its corporate offices, having employees work remotely and travel restrictions or suspension. As such, the Annual Report will not be completed by the filing deadline, due to insufficient time to facilitate the internal and external review process." Risk Factor Related to COVID-19 "Our business and financial results may be materially adversely affected by the current COVID-19 pandemic outbreak. "The pandemic of a novel coronavirus (COVID-19) has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide. Government efforts to contain the spread of the coronavirus through lockdowns of cities, business closures, restrictions on travel and emergency quarantines, among others, and responses by businesses and individuals to reduce the risk of exposure to infection, including reduced travel, cancellation of meetings and events, and implementation of work-at-home policies, among others, have caused significant disruptions to the global economy and normal business operations across a growing list of sectors and countries. "Our operating results substantially depend on revenues derived from sales of PV project assets, provision of electricity and our Australian subsidiary's trading of PV components. As the COVID-19 spread continues, the measures implemented to curb the spread of the virus have resulted in supply chain disruptions, insufficient work force and suspended manufacturing and construction works for solar industry. One or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. These preventative measures have also impacted our daily operations. The efforts enacted to control COVID-19 have placed heavy pressure on our marketing and sales activities. Moreover, due to the decrease in prices of crude oil, the demand for solar energy can decrease in the near future. We continue to assess the related risks and impacts COVID-19 pandemic may have on our business and our financial performance. In light of the rapidly changing situation across different countries and regions, it remains difficult to estimate the duration and magnitude of COVID-19 impact. Until such time as the COVID-19 pandemic is contained or eradicated and global business return to more customary levels, our business and financial results may be materially adversely affected." About SPI Energy Co., Ltd. SPI Energy -- http://www.spigroups.com-- is a global provider of photovoltaic solutions for business, residential, government and utility customers, and investors. The Company develops solar PV projects that are either sold to third party operators or owned and operated by the Company for selling of electricity to the grid in multiple countries in Asia, North America and Europe. The Company's subsidiary in Australia primarily sells solar PV components to retail customers and solar project developers. The Company has its operating headquarter in Hong Kong and its U.S. office in Santa Clara, California. The Company maintains global operations in Asia, Europe, North America, and Australia. SPI Energy reported a net loss attributable to shareholders of the Company of $12.28 million for the year ended Dec. 31, 2018, compared to a net loss attributable to shareholders of the Company of $91.08 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, SPI Energy had $188.73 million in total assets, $188.7 million in total liabilities, and $70,000 in total equity. Marcum Bernstein & Pinchuk LLP, in Beijing, China, the Company's auditor since 2018, issued a "going concern" opinion in its report dated April 30, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SRQ TAXI MANAGEMENT: Airport Authority Breached Deal, Court Says ---------------------------------------------------------------- In the case captioned SRQ Taxi Management, LLC, Plaintiff, v. Sarasota Manatee Airport Authority, Defendant, Adv. No. 8:18-ap-00013-MGW (Bankr. M.D. Fla.), Bankruptcy Judge Michael G. Williamson finds that the Sarasota Manatee Airport Authority is liable to SRQ Taxi for breach of contract and breach of its implied covenant of good faith and fair dealing. In 2015, the Sarasota Manatee Airport Authority, which operates the Bradenton-Sarasota International Airport, was confronted with the inevitability of Transportation Network Companies (or TNCs) such as Uber and Lyft operating at the Airport. Passengers were demanding access to TNCs. But TNCs were causing problems for the Airport (and other airports around the country) by cutting into the Airport's parking and rental car concessions -- the two biggest drivers of non-aeronautical revenue for the Airport. So the Airport Authority found a way to mitigate those losses and maximize its revenues: It entered into operating agreements with Uber and Lyft that charged the TNCs $2.50 per pick-up; gave Uber and Lyft six reserved parking spots in the prime row in the Airport's short-term parking area, which sits roughly 150 steps in front of the Airport terminal; and installed signage (inside and outside the terminal) steering passengers to the Uber/Lyft reserved parking spots. Since then, Uber and Lyft have seen their share of the pick-ups at the Airport increase from roughly 25% to nearly 90%, generating anywhere from $10,000 to $20,000 per month in additional revenue to the Airport. SRQ Taxi, which has been the exclusive on-demand, for-hire ground transportation operator at the airport for more than three decades, has seen its share of pick-ups plummet from 75% to less than 10%. Worse, SRQ Taxi is contractually obligated to pay the Airport Authority for each deplaning passenger, regardless of whether it gets 75% of the pick-ups or less than 10% of the pick-ups. Accordingly, SRQ Taxi asks the Bankruptcy Court to determine that the Airport Authority's arrangement with Uber and Lyft -- which the Airport Authority has referred to as the "red carpet" treatment -- violates SRQ Taxi's rights under a Concession Agreement. The Concession Agreement grants SRQ Taxi the right to operate a taxi and limo service at the Airport. According to Judge Williamson, although Article 4.1 of the Concession Agreement refers to that right as non-exclusive, Article 4.3 goes on to limit the other ground transportation that may be permitted at the airport to either not-for-hire or prearranged transportation. Thus, reading the Concession Agreement as a whole, SRQ Taxi has the exclusive right to provide on-demand, for-hire transportation. By providing TNCs signage and six reserved parking spots in the short-term parking area, the Airport Authority has allowed to TNCs to function as on-demand, for-hire transportation -- violating SRQ Taxi's exclusive rights under the Concession Agreement and depriving SRQ Taxi of its reasonable contractual expectations. The Airport Authority is therefore liable to SRQ Taxi for breach of contract and breach of its implied covenant of good faith and fair dealing. A copy of the Court's Findings dated March 10, 2020 is available at https://bit.ly/34tdhba from Leagle.com. SRQ Taxi Management, LLC, Plaintiff, represented by Bart A. Houston, The Houston Firm, P.A. Sarasota Manatee Airport Authority, Defendant, represented by John D. Goldsmith --Jgoldsmith@trenam.com -- Trenam, Kemker, Scharf, et al, M. Lewis Hall, III -- lhall@williamsparker.com -- Williams Parker Harrison Dietz & Getzen, Charles Franklin Ketchey -- Cketchey@trenam.com -- Trenam Kemker & William A. McBride -- wmcbride@trenam.com -- Trenam Law. Movants, Intervenor-Plaintiff, represented by E. Dusty Aker, Aker Law Firm, P.A. About SRQ Taxi Management SRQ Taxi Management, LLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 17-07782) on Aug. 31, 2017. Cullan F. Meathe, manager, signed the petition. At the time of filing, the Debtor estimated $0 to $50,000 in assets and $100,000 to $500,000 in estimated liabilities. Judge Michael G. Williamson presides over the case. David S. Jennis, Esq., at Jennis Law Firm, is the Debtor's bankruptcy counsel. The Houston Firm, P.A. is the special counsel. SUMMITSOFT CORPORATION: Hires O'Donnell Ficenec as Accountant ------------------------------------------------------------- Summitsoft Corporation seeks authorization from the U.S. Bankruptcy Court for the District of Nebraska to employ O'Donnell, Ficenec, Wills and Ferdig, LLC, as its accountant to file tax returns. The accountant represents no interest or interests adverse to Debtor and its estate, according to court filings. The firm can be reached through: Catherine Kellogg O'Donnell, Ficenec, Wills and Ferdig LLC 4815 S 107th Ave Omaha, NE 68127 Phone: +1 402-592-3800 About Summitsoft Corp Summitsoft Corporation is a publisher of productivity software, including logo design software for PC and Mac computers, website creator software, creative fonts, graphic design software, clip art, graphics, photo editing software and more. Summitsoft sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No. 19-81638) on Nov. 5, 2019. The petition was signed by Bruce H. Lowry, president. At the time of the filing, the Debtor disclosed $1,973,279 in assets and $801,785 in debt. The Hon. Thomas L. Saladino is the case judge. The Debtor is represented by Trev Peterson, Esq. at KNUDSEN, BERKHEIMER, RICHARDSON & ENDACOTT, LLP. SUNCOAST ARCADE: Court Approves Disclosure Statement ---------------------------------------------------- Judge Micheal G. Williamson has ordered that the Disclosure Statement filed by Suncoast Arcade, Inc., is conditionally approved. The Court will conduct a hearing on confirmation of the Plan, including timely filed objections to confirmation, objections to the Disclosure Statement, motions for cramdown, applications for compensation, and motions for allowance of administrative claims on May 20, 2020 at 9:30 a.m. in Tampa, FL − Courtroom 8A, Sam M. Gibbons United States Courthouse, 801 N. Florida Avenue . Any written objections to the Disclosure Statement shall be filed and served no later than seven days prior to the date of the hearing on confirmation. Objections to confirmation shall be filed and served no later than seven days before the date of the Confirmation Hearing. The Plan Proponent shall file a ballot tabulation no later than 96 hours prior to the time set for the Confirmation Hearing. About Suncoast Arcade Suncoast Arcade, Inc., manufactures and sells arcade games and pinball machines via the internet through Amazon and other methods. The Company filed a petition under Chapter 11 (Bankr. M.D. Fla. Case No. 19-08674) on Sept. 13, 2019 in Tampa, Florida. JOHNSON POPE BOKOR RUPPEL & BURNS LLP represents the Debtor. SUNCREST STONE: Plan Confirmation Hearing Rescheduled to May 14 --------------------------------------------------------------- Due to the COVID-19 pandemic and the Court’s Administrative Order #126 (as amended), Judge Austin E. Carter has ordered and notice is given that the hearing to consider the confirmation of Third Amended Joint Plan of Reorganization of the Debtors Dated March 5, 2020 and of Amended Joint Plan of Reorganization of Suncrest Newstone Products, LLC Dated March 11, 2020, along with objections to confirmation of such plans, is rescheduled from its original date of April 16, 2020 and shall now be held at 9:30 a.m. EDT on Thursday, May 14, 2020, at the U.S. Bankruptcy Court, 433 Cherry Street, Macon, Georgia, continuing to May 15, 2020 as may be necessary. On or before May 12, 2020, counsel for Debtors and counsel for Suncrest Newstone Products, LLC, will each file a ballot report for their respective Plans in accordance with the Local Rules. About Suncrest Stone Products Suncrest Stone Products, LLC -- https://www.suncreststone.com/ -- is a stone supplier in Ashburn, Georgia. Its products include Ashlar, Country Ledge, Ledge, River Rock, Olde-Castle, Splitface, Stock, and Rubble. Suncrest Stone Products and 341 Stone Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Lead Case No. 18-10850) on July 13, 2018. In the petition signed by Max Suter, authorized officer, Suncrest was estimated to have assets of less than $1 million and liabilities of $1 million to $10 million. 341 Stone was estimated to have $1 million to $10 million in assets and liabilities. Judge Austin E. Carter is the presiding judge. Stone & Baxter, LLP, is the Debtors' counsel. McMurry Smith & Company is the accountant. Crumley and Associates Inc. d/b/a South Georgia Appraisal Company is appraiser to the Debtor. SYNIVERSE HOLDINGS: S&P Downgrades ICR to 'CCC+' on High Leverage ----------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Syniverse Holdings Inc. by one notch to 'CCC+' from 'B-'. S&P also lowered the issue-level ratings on Syniverse's senior secured first-lien debt to 'CCC+' from 'B-' and senior secured second-lien debt to 'CCC-' from 'CCC'. "The downgrade reflects our belief that the sustainability of Syniverse's capital structure is dependent on a near-term rebound in international travel and roaming volumes given existing secular pressures in its mobile transactions business and elevated leverage. As a result of bans and restrictions on travel across the world due to COVID-19, we have revised our base-case forecast for Syniverse's operating and financial performance in 2020. We now believe that international travel will remain weak for an extended period, dampening our expectations for the company's roaming revenue this year. We currently assume that the decline in mobile transactions revenue, which includes roaming, will accelerate in 2020. In addition, we expect adjusted EBITDA to rise above 8.5x this year and remain at that level through 2021 based on limited EBITDA growth and low free operating cash flow (FOCF) that limit the company's ability to organically reduce leverage over time," S&P said. The negative outlook reflects weak operating trends in the company's mobile transactions business and S&P's belief that liquidity could be pressured over the next 12 months if the company loses access to its revolving credit facility due to a breach of its first-lien net leverage covenant, if tested. S&P also believes the sustainability of the company's capital structure depends on favorable business, economic, and financial conditions, given secular pressures from technology shifts and lower roaming volume as a result of COVID-19. "We could lower the rating if we believe the company will face a near-term liquidity crisis or if it takes steps to initiate, or voices its intention to execute, a debt exchange that we view as distressed," S&P said. "We could revise the outlook to stable if global travel rebounds and Syniverse stabilizes revenue and EBITDA trends on a sustained basis. We could raise the rating longer term if the company replaces legacy roaming and messaging revenue with meaningful revenue contributions from strategic products, such as LTE-based solutions and application-to-person (A2P) messaging, which leads to consistent top-line growth. We believe these factors would improve its profitability and liquidity position, including greater covenant headroom. An upgrade would also be contingent on the company demonstrating the ability to reduce leverage to the 7x area with prospects for further improvement over time," S&P said. TALBOTS INC: Moody's Cuts CFR & Sr. Secured Loan Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded The Talbots, Inc's corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and senior secured term loan rating to B3 from B2. The outlook remains negative. The downgrades reflect the continuation of coronavirus-related temporary store closures beyond Moody's initial expectations, which will lead to an even more highly promotional environment in the apparel sector. Additionally, discretionary consumer spending will decline significantly in 2020 based on Moody's downwardly revised macroeconomic outlook. This environment will lead to a more significant deterioration in Talbots' earnings, liquidity and credit metrics relative to Moody's prior expectations. Moody's projects an over 60% EBITDA decline in 2020, with the company's online channel only partly mitigating the impact of temporary store closures, a slow return of store traffic and intense promotional pressure throughout 2020. While EBITDA will recover meaningfully in 2021, it will end the year 30-50% below 2019. Liquidity over the next 12 months should be adequate, and sufficient to support operations during the period of store closures and a gradual ramp-up in traffic when stores reopen. Moody's took the following rating actions for The Talbots, Inc.: Corporate family rating, downgraded to B3 from B2 Probability of default rating, downgraded to B3-PD from B2-PD $410 million ($360 million outstanding) senior secured first lien term loan, downgraded to B3 (LGD3) from B2 (LGD3) Outlook, remains negative RATINGS RATIONALE The rapid 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 Talbots' credit profile, including its exposure to discretionary consumer spending and widespread store closures have left it vulnerable to these unprecedented operating conditions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Talbots of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Talbots' B3 CFR reflects Moody's expectations for significant earnings declines and deterioration in credit metrics. Moody's projects debt/EBITDA to be near 5 times in 2021, up from 2.4 times (Moody's-adjusted, as of January 31, 2020), and EBIT/interest expense to be at 1.2 times, down from 3 times. Credit metrics will be significantly weaker than these levels in 2020, as a result of both steep earnings declines and high revolver borrowings. Talbots' credit profile is further constrained by its small size and operations in the women's apparel sector, which is characterized by fashion risk, intense competition and significant exposure to changes in discretionary consumer spending. The rating also reflects governance considerations, specifically the company's ownership by a private equity sponsor, which raises the risk of shareholder-friendly financial strategies. In addition, as a retailer, Talbots needs to make ongoing investments in its brand and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy and data protection. Talbots' rating benefits from Moody's expectations for adequate liquidity over the next 12 months. As of January 31, 2020, the company had $12 million of cash and an estimated $110 million excess availability after cash dominion limitations under its $185 million ABL revolver. In addition, the credit profile benefits from Talbots' established brand name with a history of over 70 years, and loyal customer base. With a history as a catalog company, Talbots derives about a third of its revenue from its direct-consumer business including e-commerce, and has low exposure to malls. The negative outlook reflects the risk that earnings and liquidity could decline more than anticipated, as a result of weak traffic or deep promotional activity. The negative outlook also incorporates risks related to the company's ability to position itself over the next 12-18 months for a timely and economic refinancing of its November 2022 term loan maturity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if liquidity deteriorates, or if there is no clear path to EBITDA recovery in 2021 to a level within 30-50% below 2019. The ratings could also be downgraded if financial strategies become more aggressive. The ratings could be upgraded if the company improves its liquidity position and maintains debt/EBITDA below 4.5 times, and EBIT/interest above 1.75 times. Headquartered in Hingham, Massachusetts, The Talbots, Inc. is a multi-channel retailer of women's apparel, focusing on the 45-65-year-old demographic. Talbots was acquired by Sycamore Partners in August 2012. Talbots operated about 544 stores and reported revenue of approximately $1.3 billion for the year ended January 31, 2020. TEMPO ACQUISITION: Moody's Alters Outlook on B2 CFR to Negative --------------------------------------------------------------- Moody's Investors Service affirmed Tempo Acquisition, LLC's ratings, including the B2 corporate family rating and B2-PD probability of default rating. Moody's affirmed the B1 instrument ratings on Tempo's first-lien senior secured debt, including a $250 million revolver and a $2.91 billion term loan, and assigned a B1 rating to a new, at least $250 million senior secured first-lien notes offering. Moody's also affirmed Tempo's Caa1 senior unsecured debt rating on its existing $960 million of unsecured notes. However, Moody's changed the company's outlook to negative, from stable. The actions stem from increased leverage resulting from the company's plan to raise at least $250 million in incremental debt in a challenging operating environment. Assignment: Issuer: Tempo Acquisition, LLC New, $250 million to $300 million senior secured notes issuance maturing 2025, assigned B1 (LGD3) Affirmations: Issuer: Tempo Acquisition, LLC Corporate family rating, affirmed B2 Probability of default rating, affirmed B2-PD $250 million senior secured first lien revolving credit facility due 2022, affirmed B1 (LGD3) $2,908 million senior secured first-lien term loan due 2024, affirmed B1 (LGD3) $960 million senior unsecured notes due 2025, affirmed Caa1 (LGD5) from (LGD6) The outlook has been changed to negative, from stable. RATINGS RATIONALE Pro-forma for the planned $300 million debt raises, which is to be used for supplemental liquidity, Tempo's Moody's-adjusted debt-to-EBITDA financial leverage stands at 6.6 times. Given Moody's expectations for flat revenue and weaker margins this year due to COVID-19-related disruptions to economic activity, Moody's expects the company's year-end leverage will be 7.4 times. (Moody's does not net out cash balances in its leverage calculation.) High visibility from Tempo's long-term-contract-driven revenue model supports the ratings, as does the strength and diversity of its customer base. Tempo's employee-benefits services constitute critical, embedded functions within its customers' operations. Leverage risks are mitigated by Tempo's $2.5 billion operating scale, leading market position in health plan administration services, historically strong revenue retention rates, and high proportion of revenues under contracts, which provide good visibility into cash generation. However, historic organic and acquisition-driven revenue growth will reverse this year, due to the coronavirus's impact on employment levels. 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. At this time, the sectors most exposed to the shock are those that 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. Moody's views Tempo's liquidity as very good. The company had built up cash to well over $200 million by year-end 2019, and its $250 million revolver remains undrawn. The proceeds from the proposed debt raise are to be held on the balance sheet as supplemental liquidity, providing what Moody's views as an ample bridge through an operating environment that may not stabilize until 2021. The company's scale and profitability will still allow for modestly positive free cash flow through 2020. Without acquisitions, year-end balance sheet cash may be very high. Borrowings under the revolver are subject to compliance with a net secured leverage ratio of 7.5 times if utilization exceeds 35%, but cash balances will likely preclude the revolver from being drawn down. The negative outlook is based on Moody's expectation that Tempo will generate flat to slightly weaker revenue in 2020, while free cash flow will be 2% to 3% of total debt, rather weak for the B2 rating category. Moody's expects leverage will rise to about 7.4 times this year, also weak. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade Tempo's ratings if Moody's expects revenue erosion will be more dramatic than anticipated in 2020. The ratings could also be downgraded if Moody's expects free cash flow to fall towards breakeven levels, or if Moody's expects total debt-to-EBITDA (Moody's adjusted) will remain above 6.5 times for an extended period. Given its expectations for escalating leverage and a deteriorating operating environment, a ratings upgrade is unlikely over the next 12 to 18 months. Moody's could upgrade Tempo's ratings if revenue returns to a growth mode, leverage moderates below 5.5 times on a sustained basis, and the company adheres to a conservative financial strategy. Attaining free cash flow as a percentage of debt in the upper-single digits would also be a factor for consideration for an upgrade. Tempo Acquisition, LLC (d/b/a Alight Solutions) is a leading provider of outsourced healthcare and retirement benefits administration services and human resources technology solutions. Affiliates of The Blackstone Group acquired Tempo from Aon PLC in 2017. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. TENNECO INC: Fitch Lowers LT IDR to 'B+', Outlook Negative ---------------------------------------------------------- Fitch Ratings downgraded the Long-Term Issuer Default Rating of Tenneco Inc. to 'B+' from 'BB-'. In addition, Fitch downgraded TEN's secured revolving credit facility, secured term loan and senior secured note ratings to 'BB'/'RR2' from 'BB+'/'RR1'. Fitch also downgraded TEN's senior unsecured note rating to 'B-'/'RR6' from 'BB-'/'RR4'. Fitch's ratings apply to a $1.5 billion secured revolving credit facility, $3.3 billion in secured term loans, $1.2 billion in senior secured notes and $725 million in senior unsecured notes. The Rating Outlook for TEN is Negative. KEY RATING DRIVERS Ratings Overview: The downgrade of TEN's Long-Term IDR to 'B+' from 'BB-' reflects Fitch's expectations that operational pressures and a much weaker macro environment resulting from the coronavirus pandemic will lead to weaker credit protection metrics for a longer period of time than Fitch had previously envisioned. TEN's leverage increased substantially following its 2018 acquisition of Federal-Mogul LLC, but Fitch had anticipated that the company would apply available FCF toward debt reduction over the following two years, which would bring leverage in line with the 'BB-' IDR by late 2020. However, unexpected operational challenges in various parts of the business over the course of 2019 slowed the company's pace of leverage reduction, and with the coronavirus crisis and expectations of a weak macroeconomic recovery in most global regions, Fitch now expects TEN's leverage to remain elevated through at least YE 2021. Fitch's ratings are based on TEN's consolidated credit profile and do not consider the planned split of the company into two separate businesses. The Negative Outlook reflects the high level of uncertainty with respect to the duration and depth of the global economic downturn, which heightens the risk that TEN's metrics could weaken further for a longer period. That said, Fitch could revise TEN's Outlook to Stable if a stronger-than-expected economic recovery in the North American or European markets leads a faster pace of improvement in TEN's credit profile than currently envisioned. Weaker Market Conditions Expected: The coronavirus pandemic is likely to result in a steep decline in TEN's global production volumes in 2020, with only a partial recovery in volumes in 2021. Fitch expects global new vehicle sales to decline at least 15% in 2020, including declines of at least 20% in both North America and Western Europe. In 2021, Fitch expects global vehicle sales to recover only about half of the lost volumes experienced in 2020. Although tightening emissions regulations in many global regions, especially for commercial vehicles and off-highway equipment, could lead to some secular volume and content-per-vehicle growth over the next couple years, Fitch expects TEN's revenue will decline significantly in the near term. About 18% of TEN's revenue is derived from the sale of aftermarket parts, and Fitch expects volumes in this business to be more stable in the near term than its sales to original equipment manufacturers. In the U.S., auto service and auto parts sales have been considered essential services in many states with shelter-in-place orders, leading to at least some continued demand for those products while much of the U.S. economy has been shut down. Over the intermediate term, aftermarket part demand could be supported by rising vehicle ages as macroeconomic conditions remain weak and light vehicle sales in North America are likely to run well below the typical replacement level in 2020. That said, Fitch expects overall demand for aftermarket parts to be down over the next couple of years, but to hold up better than Tier 1 sales to OEMs. Fitch expects lower production and demand to result in about a 20% decline in revenue in 2020. Improving conditions in 2021 are expected to drive higher revenue for the year, but Fitch expects ongoing weakness through next year to result in revenue remaining about 10% below the actual 2019 level, which was already under pressure from weakening conditions in several global markets, especially China. Planned Separation Delayed: A key piece of TEN's strategy following its acquisition of FM has been to split the combined company into two separate firms by spinning off its aftermarket and ride-performance businesses into a new company called DRiV. TEN originally targeted the spin to occur in late 2019 and later delayed the target to mid-2020. However, the company has noted that a prerequisite for completing the spinoff is to lower TEN's net leverage ratio to about 3.0x versus 3.5x at YE 2019, as calculated by the company. Most of the synergies targeted at the time of the acquisition appear to have been achieved, and Fitch believes the company is largely ready to separate operationally, but the elevated leverage and the coronavirus pandemic are likely to delay the separation indefinitely. With the timing of the separation increasingly unclear, TEN is also considering other options, including the potential sale of a portion of the business. Fitch expects a substantial portion of any proceeds from a sale would be used for debt reduction, which would help to strengthen the company's credit profile. However, the extent of any improvement in the metrics would also depend on the level of EBITDA and FCF divested. FCF Pressure: Fitch currently expects TEN's FCF to be negative in 2020 as working capital benefits from lower sales volumes are more than offset by a steep decline in FFO due to the production shutdown and weaker demand levels. Although the company's plan to cut capex to less than $400 million in 2020, down from an original plan of $610 million-$650 million, and its decision in 2019 end its common dividend will also support FCF in 2020, Fitch nonetheless expects the company's FCF margin will be around -2.0% in 2020. To further support near-term FCF, TEN has reduced its salary costs by at least 25% in the second quarter through the use of furloughs, pay cuts and temporary support programs in certain regions, and the company expects to reduce salary costs by at least 10% through the rest of 2020. In 2021, Fitch expects FCF to be break-even to slightly negative as higher FFO driven by improved demand levels is largely offset by negative working capital and more normalized capex. Beyond 2021, Fitch expects FCF to strengthen and demand for the company's products grows on higher levels of global vehicle production. Actual post-dividend FCF in 2019, according to Fitch's methodology, was ($390) million, equivalent to a -2.2% FCF margin. In addition to experiencing some operational challenges in 2019, FCF was weighed down by non-recurring costs related to the integration of FM and preparations for the spinoff, as well as somewhat elevated capex. Lower production volumes in China and the six-week strike at General Motors Company in September and October 2019 also likely contributed to the FCF pressure in the year. Fitch's FCF calculations are adjusted for changes in off-balance sheet factoring, which Fitch moves from operating cash flows to financing cash flows. Increased Leverage: Fitch expects TEN's leverage will rise significantly in 2020 as a result of lower EBITDA and FFO in the face of very weak market conditions. Fitch expects gross EBITDA leverage (debt, including off-balance sheet factoring/Fitch-calculated EBITDA) to rise considerably in 2020 before falling back toward the upper-5x range by YE 2021 and below 5x by YE 2022. Likewise, Fitch expects gross FFO leverage to rise to a very high level in 2020 before falling back toward the mid-6x range by YE 2021 and to around 6x by YE 2022. Debt at YE 2019, including off-balance sheet factoring that Fitch treats as debt, was $6.6 billion, up slightly from $6.5 billion at YE 2018. Fitch expects debt to be elevated, likely above $7.0 billion at YE 2020, but the exact level will depend on amount of revolver borrowings that the company may repay in the latter half of 2020. Fitch expects debt to trend back toward the 2019 level over the course of 2021 through 2023 as the company repays any remaining revolver borrowings and as it makes amortization payments on its term loans. Antitrust Investigations: In 2014 antitrust authorities in various jurisdictions began investigating possible violations of antitrust laws by multiple automotive parts suppliers, including TEN. However, the European Commission's (EC) closed the case without penalty in April 2017 and the U.S. Department of Justice (DOJ) has granted conditional leniency through the Antitrust Division's Corporate Leniency Policy. The DOJ's leniency policy limits TEN's exposure, and in exchange for the company's self-reporting and continuing cooperation with the DOJ's investigation, the DOJ will not bring any criminal antitrust prosecution nor seek any criminal fines or penalties against TEN. TEN and certain of its competitors are also currently defendants in civil putative class action litigation in the U.S. and Canada related to the antitrust investigations. However, because TEN received conditional leniency from the DOJ, its civil liability in the U.S. follow-on actions is limited to single damages, and it will not be jointly and severally liable with the other defendants. TEN established a $132 million reserve in 2017 for settlement costs to resolve its antitrust matters, which primarily involves the resolution of civil suits and related claims. Through Dec. 31, 2019, TEN had paid $79 million to resolve various claims related to the investigation, and it paid another $30 million in the first quarter of 2020. ESG Considerations: TEN has an ESG Relevance Score of '4' for GHG Emissions & Air Quality due to the company's positioning as a top supplier of products that reduce vehicle emissions from internal combustion engines, which has a positive impact on the credit profile, and is relevant to the ratings in conjunction with other factors. TEN has an ESG Relevance Score of '4' for Management Strategy due to the complexity of the company's strategy to merge with FM and then split into two companies, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. DERIVATION SUMMARY TEN has a relatively strong competitive position focusing on powertrain, clean air and ride control technologies for automotive, commercial vehicle and off-road machinery OEMs, as well as a large presence in branded automotive aftermarket parts and components. The company's Tier 1 technologies are likely to grow in demand over the intermediate term as OEMs increasingly focus on ways to improve powertrain fuel efficiency, reduce emissions and improve vehicle ride quality. At the same time, the company's aftermarket business insulates it somewhat from the heavier cyclicality of the Tier 1 business, while providing growth opportunities as the on-road vehicle fleet ages in both developed and developing markets. Although the company's clean air and powertrain businesses will likely be pressured over the longer term as the global auto industry increasingly focuses on electrification, in the intermediate term, tightening emissions regulations will likely drive increased demand for TEN's emission control products for internal combustion engines. At the same time, growing demand for increasingly sophisticated active suspension systems is likely to result in higher demand for the ride control business' more profitable active suspension systems. However, compared with auto suppliers that focus on high-technology vehicle safety and automation systems, such as Aptiv PLC (BBB/Stable) or Visteon Corporation, TEN's business remains primarily tied to traditional engine and suspension products that affect vehicle performance characteristics. In terms of size, TEN is among the largest U.S. auto suppliers, but it is smaller than the largest global auto suppliers, such as Continental AG (BBB/Stable), Magna International Inc. or Robert Bosch GmbH (F1+). Over the intermediate term, Fitch expects TEN's margins to be roughly consistent with issuers in the 'BB' range, although they are likely be under significant pressure in 2020 due to the coronavirus crisis. However, Fitch expects TEN's credit protection metrics, particularly leverage and coverage, will be more consistent with a 'B'-range IDR over an extended period, even after synergies resulting from the Federal-Mogul acquisition. TEN had planned to split into two separate companies by mid-2020: an aftermarket and ride performance business (New Tenneco) and a powertrain technologies business (DRiV). The timing of that separation is now unclear, and TEN has been looking at other options, such as potential asset sales, in addition to its original plans to split the company. Fitch's ratings on TEN are based on the company's current organizational structure and do not incorporate any potential separation of the business. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer: -- Global auto production declines by at least 15% in 2020, including declines of at least 20% in the U.S. and Europe, before rising about 8% in 2021; -- Global aftermarket part demand declines about 10% in 2020 before rising in 2021; -- Capex declines to around $400 million in 2020 and then runs at about 3.5%-4.0% of revenues in the following years; -- The company repays its revolver borrowings with available cash over the next several years; -- The FCF margin for full-year 2020 is about -2.0%, with an improvement toward breakeven FCF in 2021; -- The company maintains a solid liquidity position, including cash and credit facility availability over the next several years. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that TEN would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach TEN's recovery analysis reflects a severe downturn in vehicle demand and estimates the going concern EBITDA at $1.18 billion, which reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which the valuation of the company would be based. The going concern EBITDA considers TEN's customer supply agreements with most major global OEMs, with its products embedded in the powertrains and suspension systems of many global vehicles; the critical nature of its emission control technologies; and less-cyclical nature of its branded aftermarket products. The $1.18 billion ongoing EBITDA assumption is about 4% below TEN's actual EBITDA, as calculated by Fitch, of $1.22 billion in 2019. Fitch has used a 6x multiple to calculate a post-reorganization valuation. According to the "Automotive Bankruptcy Enterprise Values and Creditor Recoveries" report published by Fitch in October 2019, about 42% of auto-related bankruptcies had exit multiples above 5x, with about 26% in the 5x to 7x range. However, the median multiple observed across 19 issuers was only 4.9x. Within the report, Fitch observed that 93% of the bankruptcy cases analyzed were resolved as a going concern. Automotive issuers in bankruptcy were typically weighed down by capital structures that became untenable during a period of severe demand weakness, due either to economic cyclicality or the loss of a significant customer, or they were subject to significant operational issues. While TEN has a highly leveraged capital structure, Fitch believes the company's business profile is stronger than most of those included in the automotive bankruptcy observations. Fitch utilizes a 6x EV multiple based on TEN's strong global market position, including its position as a supplier to a number of top global vehicle platforms, and the non-discretionary nature of its aftermarket products. For comparison, Brookfield Business Partners' acquisition of Clarios Global LP in 2019 valued the company at an EV over 8x, while BorgWarner Inc.'s planned acquisition of Delphi Technologies PLC valued the company at 6.4x preliminary 2019 adjusted EBITDA (in both cases excluding expected post-acquisition cost savings). All of TEN's rated debt is guaranteed by certain, primarily domestic, subsidiaries. Consistent with Fitch's criteria, the recovery analysis assumes that an estimated $1.0 billion in off-balance-sheet factoring is replaced with a super-senior facility that has the highest priority in the distribution of value. Fitch also assumes a full draw on the company's $1.5 billion secured revolver. The revolver, secured term loans and secured notes receive second priority in the distribution of value after the factoring. As such, the first lien secured debt, excluding factoring, totals about $6.0 billion, which results in a Recovery Rating of 'RR2' with an expected recovery in the 71%-90% range. The $725 million of senior unsecured notes have the lowest priority in the distribution of value. This results in a Recovery Rating of 'RR6' with an expected recovery in the 0%-10% range, owing to the significant amount of secured debt positioned above it in the hierarchy. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A sustained value-added FCF margin of 1.0% on a consistent basis; -- Sustained decline in EBITDA leverage to 3.5x or lower; -- Sustained decline in FFO leverage to 4.0x or lower; -- Sustained increase in FFO interest coverage of 3.5x or higher. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A sustained value-added FCF margin of break-even or below; -- Sustained EBITDA leverage above 4.5x over the intermediate term; -- Sustained FFO leverage above 5.0x over the intermediate term; -- Sustained FFO interest coverage below 2.5x over the intermediate term; -- An adverse outcome from the ongoing antitrust investigation that leads to a significant decline in liquidity or an increase in leverage. BEST/WORST CASE RATING SCENARIO International scale credit 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: Fitch expects TEN's liquidity to remain sufficient for the company to withstand the operating pressures of the current downturn. The company ended 2019 with $564 million in unrestricted cash and cash equivalents (excluding Fitch's adjustments for not readily available cash) and $1.3 billion of availability on its revolving credit facility. The company has no significant debt maturities until 2022, when its EUR415 million of 4.875% senior secured notes come due. Similar to other Tier 1 auto suppliers, Fitch expect TEN's working capital position to generate cash on the decline in sales, although this effect is more likely to be seen in the second quarter of 2020, as the company generally experiences cash outflows in the first quarter due to seasonality. The cash generated from working capital could help to offset at least a portion of the likely losses associated with the sudden decline in demand. TEN also recently noted that as of March 31, 2020, it had about $700 million in cash and equivalents on hand, but it also had about $700 million in outstanding borrowings on its revolver, which was about $517 million higher than at YE 2019, when the company had $183 million outstanding on the facility. The company noted on March 31 that it planned to draw another $500 million on the revolver to bolster its cash position. This will help to provide additional liquidity when production eventually begins to ramp up, as Fitch expects the company will experience some working-capital related cash flow pressure once OEM production restarts. According to its criteria, Fitch treated $285 million of TEN's cash and cash equivalents as not readily available as of Dec. 31, 2019 for purposes of calculating net metrics. Starting in 2020, Fitch has treated $320 million of TEN's cash as not readily available, based on Fitch's updated estimate of the amount of cash the company needs to keep on hand to cover seasonality in its business. Debt Structure: TEN's debt structure primarily consists of borrowings on its secured credit facility (which includes a Term Loan A, Term Loan B and revolver), senior secured notes that were assumed as part of the FM acquisition, senior unsecured notes and off-balance sheet factoring that Fitch treats as debt. TEN's off-balance sheet factoring includes the effect of supply-chain financing programs that the company has with some of its aftermarket customers to whom the company has entered into extended payment terms. If the financial institutions involved in these programs were to curtail or end their participation, TEN might need to borrow from its revolver to offset the effect, but it could also mitigate at least a portion of the effect by exercising its contractual right to shorten the payment terms with these particular aftermarket customers. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has adjusted TEN's debt to include off-balance-sheet factored receivables. 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 Tenneco, Inc.: 4.2; Management Strategy: 4, GHG Emissions & Air Quality: 4 THIRD COAST: S&P Puts 'B' ICR on Watch Neg. on Revolver Expiry -------------------------------------------------------------- S&P Global Ratings placed its 'B' issuer credit and senior unsecured issue-level ratings on Third Coast Midstream LLC (Third Coast) on CreditWatch with negative implications. The recovery rating on the company's senior unsecured debt is unchanged at '3', indicating S&P's expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in default. "The rating action reflects our view of near-term refinancing risk and constrained liquidity in light of the approaching revolver expiry in December 2020. While we acknowledge the positive steps Third Coast has taken over the past six months to de-lever its balance sheet, in our opinion, the risks associated with revolver extension remain at play, especially in the context of materially lower energy commodity prices and the COVID-19 pandemic, which has significantly affected the capital markets," S&P said. The upcoming maturing $425 million senior unsecured notes (due Dec. 16, 2021) have shortened the tenor of Third Coast's capital structure, with weighted-average maturity of the company's debt now less than two years. All else being equal, S&P generally views a company with a shorter maturity schedule as having greater refinancing risk compared to a company with a longer one, since the latter has more time to manage business- or financial market-related setbacks. Even if the company's revolving credit facility is extended, the maturing unsecured notes weigh on the rating, because the company's current revolver does not have enough available capacity to refinance the notes. "The CreditWatch placement reflects our view of refinancing risk and constrained liquidity in light of the approaching revolver maturity in December 2020. We would lower the rating if Third Coast fails to extend the term of its credit facility in the next 90 days," S&P said. TOWN SPORTS: Receives Noncompliance Notices from Nasdaq ------------------------------------------------------- Town Sports International Holdings, Inc. received a notification letter from the Listing Qualifications department of Nasdaq Stock Market LLC on April 28, 2020, notifying the Company that, because the closing bid price for the Company's common stock listed on the Nasdaq Global Market was below $1.00 for 30 consecutive business days, the Company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Global Market under Nasdaq Marketplace Rule 5450(a)(1), requiring a minimum bid price of $1.00 per share. In addition, on April 28, 2020, the Company received a notification letter from the Listing Qualifications department of Nasdaq notifying the Company that the Market Value of Publicly Held Shares of its common stock had been below the minimum of $15,000,000 for the last 30 consecutive business days, and that consequently the Company no longer meets the continued listing requirement of the Nasdaq Global Market under Nasdaq Marketplace Rule 5450(b)(3)(C), requiring that the Company maintain a minimum MVPHS of $15,000,000. The notifications regarding the Listing Requirements have no immediate effect on the listing of the Company's common stock. In accordance with Nasdaq Marketplace Rules 5810(c)(3)(A) and 5810(c)(3)(D) and the rule change filed by Nasdaq with the Securities and Exchange Commission on April 16, 2020, the Company has a period of 180 calendar days from July 1, 2020 (or until Dec. 28, 2020) to regain compliance with the Listing Requirements. If at any time before Dec. 28, 2020 the bid price of the Company's common stock closes at or above $1.00 per share for at least ten consecutive business days, Nasdaq will provide written notification that the Company has regained compliance with the Minimum Bid Price Requirement and the matter will be deemed closed. If at any time before Dec. 28, 2020 the MVPHS of the Company's common stock closes at $15,000,000 or more for a minimum of ten consecutive business days, Nasdaq will provide written notification that the Company has regained compliance with the Market Value Requirement and the matter will be deemed closed. In the event that the Company does not regain compliance with the Minimum Bid Price Requirement by Dec. 28, 2020, the Company may be eligible for additional time. To qualify for additional time, the Company would be required to meet the Market Value Requirement and all other initial listing standards (with the exception of the Minimum Bid Price Requirement), and submit a transfer application with written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. Nasdaq staff would review the Company's application and make a determination of whether or not the Company will be able to cure the deficiency. Should Nasdaq staff conclude that the Company will not be able to cure the deficiency, or should the Company not submit a transfer application or make the required representation, Nasdaq will provide notice that the Company's common stock will be subject to delisting. In the event that the Company does not regain compliance with the Market Value Requirement by Dec. 28, 2020, it will receive notice that its common stock is subject to delisting. Alternatively, the Company may apply to transfer its common stock to the Nasdaq Capital Market, provided that the Company meets the Nasdaq Capital Market's continued listing requirements. If the Company receives a notice that its common stock is subject to delisting in respect of either of the Listing Requirements, the Company would be entitled to appeal the Nasdaq staff's determination to delist its common stock and request a hearing. The Company intends to monitor both the closing bid price and MVPHS of the Company's common stock and consider its available options to resolve its non-compliance with the Listing Requirements. No determination regarding the Company's response to either notification has been made at this time. There can be no assurance that the Company will be able to regain compliance with either of the Listing Requirements or that it will otherwise be in compliance with other Nasdaq listing criteria. Delays Filing of Periodic Reports The Company is relying on the SEC's Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions From The Reporting And Proxy Delivery Requirements For Public Companies dated March 25, 2020 (Release No. 34-88465) to delay the filing of both (i) the information omitted from the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2019 pursuant to General Instruction G(3) of the Form 10-K, which it expects to provide either in a Definitive Proxy Statement on Form DEF 14A or in an amendment to its Annual Report on Form 10-K/A, and (ii) its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, in each case due to the circumstances related to the COVID-19 pandemic. The Company said it requires additional time to finalize its Reports due to its previously announced reduction in staff, suspension of in-person operations at its corporate headquarters, and temporary closure of its locations for an indefinite period of time, as well as other financial and operational concerns associated with or caused by the COVID-19 pandemic. The Company has closed all its gym locations in accordance with such stay at home orders as are in place across the United States, and has directed all its employees to work from home in order to protect its employees and their families from potential virus transmission among co-workers. These conditions have caused significant disruptions to the Company's operations requiring key personnel to devote considerable time and resources to respond to the emerging impacts to its business, which limits their availability to complete the Reports and to thoroughly evaluate the subsequent events related to COVID-19. The Company is in the process of working on a remote basis to file the Reports as quickly as possible. Notwithstanding the foregoing, the Company expects to file (i) either a Proxy Statement or 10-K/A, including the Part III Information, no later than June 14, 2020 (which is 45 days from the original filing deadline for the Part III Information of April 29, 2020) and (ii) the 10-Q no later than June 29, 2020 (which is 45 days from the original filing deadline for the 10-Q of May 15, 2020). The Company previously disclosed the risks to its business posed by the COVID-19 pandemic in the risk factors of the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2019 and has decided not to supplement such disclosure at this time. About Town Sports Headquartered in Elmsford, New York, Town Sports International Holdings, Inc. -- https://www.townsportsinternational.com/ -- is a diversified holding company with subsidiaries engaged in a number of business and investment activities. The Company's largest operating subsidiary has been involved in the fitness industry since 1973 and has grown to become owner and operator of fitness clubs in the Northeast region of the United States. Town Sports recorded a net loss attributable to the company and subsidiaries of $18.56 million for the year ended Dec. 31, 2019, compared to net income attributable to the company and subsidiaries of $77,000 for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $794.28 million in total assets, $882.62 million in total liabilities, and $88.34 million in total stockholders' deficit. PricewaterhouseCoopers LLP, in New York, New York, the Company's auditor since at least 1996, issued a "going concern" qualification in its report dated March 20, 2020 citing that the Company has a term loan facility maturing in November 2020 and management has determined that it does not have sufficient sources of cash to satisfy this obligation. In addition, the COVID-19 pandemic has had a material adverse effect on the Company's results of operations, cash flows and liquidity. These conditions raise substantial doubt about the Company's ability to continue as a going concern. * * * As reported by the TCR on Nov. 21, 2019, S&P Global Ratings lowered its issuer credit rating on Town Sports International Holdings Inc. to 'CCC' from 'B-'. S&P lowered the rating to 'CCC' because Town Sports' term loan matures in November 2020 and it believes there is an increased risk of a default over the next 12 months. TOWN SPORTS: TSI Obtains $2.7 Million PPP Loan from BankUnited -------------------------------------------------------------- Town Sports International, LLC, a wholly-owned operating subsidiary of Town Sports International Holdings, Inc., received funding in connection with "Small Business Loans" under the federal Paycheck Protection Program provided in Section 7(a) of the Small Business Act of 1953, as amended by the Coronavirus Aid, Relief and Economic Security Act, as amended from time to time. Pursuant to the terms of the Business Loan Agreement and Promissory Note dated as of April 20, 2020, by TSI LLC in favor of BankUnited, N.A., a national banking association, TSI LLC borrowed $2,742,200 original principal amount, which was funded on April 24, 2020. The PPP Loan bears interest at 1% per annum and matures in two years from the date of disbursement of funds under the PPP Loan. Interest and principal payments under the PPP Loan will be deferred for a period of six months. Under certain circumstances, all or a portion of the PPP Loan may be forgiven, however, there can be no assurance that any portion of the PPP Loan will be forgiven and that TSI LLC would not be required to repay the PPP Loan in full. The PPP Loan contains certain covenants which, among other things, restrict the borrower's use of the proceeds of the PPP Loan to the payment of payroll costs, interest on mortgage obligations, rent obligations and utility expenses, require compliance with all other loans or other agreements with any creditor of the borrower, to the extent that a default under any loan or other agreement would materially affect the borrower's ability to repay the PPP Loan and limit the ability of the borrower to make certain changes to its ownership structure. If TSI LLC defaults on the PPP Loan (i) an event of default will occur under the Company's $370 million senior secured credit facility pursuant to a credit agreement among Town Sports International, LLC, TSI Holdings II, LLC, as a guarantor, the lenders party thereto, Deutsche Bank AG, as administrative agent, and Keybank National Association, as syndication agent and (ii) TSI LLC may be required to immediately repay the PPP Loan. About Town Sports Headquartered in Elmsford, New York, Town Sports International Holdings, Inc. -- https://www.townsportsinternational.com -- is a diversified holding company with subsidiaries engaged in a number of business and investment activities. The Company's largest operating subsidiary has been involved in the fitness industry since 1973 and has grown to become owner and operator of fitness clubs in the Northeast region of the United States. Town Sports recorded a net loss attributable to the company and subsidiaries of $18.56 million for the year ended Dec. 31, 2019, compared to net income attributable to the company and subsidiaries of $77,000 for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $794.28 million in total assets, $882.62 million in total liabilities, and $88.34 million in total stockholders' deficit. PricewaterhouseCoopers LLP, in New York, New York, the Company's auditor since at least 1996, issued a "going concern" qualification in its report dated March 20, 2020 citing that the Company has a term loan facility maturing in November 2020 and management has determined that it does not have sufficient sources of cash to satisfy this obligation. In addition, the COVID-19 pandemic has had a material adverse effect on the Company's results of operations, cash flows and liquidity. These conditions raise substantial doubt about the Company's ability to continue as a going concern. TRANSALTA CORP: Fitch Withdraws BB+ Issuer Default Rating --------------------------------------------------------- Fitch Ratings has affirmed and withdrawn the following ratings on TransAlta Corporation: -- Long-Term Issuer Default Rating at 'BB+'/Stable Rating Outlook; -- Senior unsecured debt at 'BB+'. The ratings were withdrawn for commercial purposes. KEY RATING DRIVERS Long-Term Merchant Risk Exposure: The primary concern for TransAlta is its exposure to power price volatility for its generation fleet. Fitch estimates that about 50% of EBITDA will come from uncontracted sources as the remaining Alberta coal and hydro power purchase agreements terminate in 2020 and 2021, respectively. Contracted cash flow was 82% in 2017. With the UCP's cancellation of a capacity market in Alberta that was to be implemented in 2022, TransAlta's generation fleet is subject to market price volatility in the Alberta energy-only market. The mothballing of its coal-fired generation assets and an uptick in the oil and gas dominated local economy has contributed to improved market power pricing in 2018-2019, but power forecasts point to weakness in 2020-2021 driven by new generation capacity, demonstrating the exposure to increasing amount of cash flow and earnings volatility. Market Construct in Alberta: Under the existing energy only construct, Fitch believes TransAlta's earnings profile and business risk faces uncertainty as its exposure to the merchant market grows. While the market is exhibiting a favorable demand-supply dynamic after depressed pricing from 2014-2017, the Alberta market lacks the additional revenue support and forward commitments that capacity markets provide in other markets, such as PJM Interconnection and New England. Power market pricing fluctuates in response to changes in supply, demand and company strategy and TransAlta's 12-18-month hedging program provides minimal protection against cash flow volatility and commodity price risk. As coal-fired plants are retired by 2030, hastened by the federal tax on carbon coal-fired generation, the expansion of carbon free generation in Alberta could improve TransAlta's long-term earnings. Fitch would expect TransAlta's portfolio of renewable capacity, especially the nearly 1 GW of hydro capacity, to be favorably positioned in the dispatch curve. Parent-Level Deleveraging: Fitch expects TransAlta's total debt with equity credit/operating EBITDA to increase to over 4.0x in 2020. Fitch partially deconsolidates its 61%-owned subsidiary TransAlta Renewables Inc. (RNW; CO: 'bb+*'/Stable) project-level debt given RNW's separate credit facility and access to the equity market. While management is committed to a debt reduction program, Fitch believes management has shifted strategy to boost shareholder returns using the proceeds from the Brookfield Renewable Partners (BRP) loan to fund a C$250 million stock repurchase program and a revised dividend policy, the first change since the dividend reduction in 2016. BRP's loan comes in the form of convertible debentures and preferred shares, instruments that Fitch considers shareholder loans as a majority stockowner with two Board seats, slowing deleveraging in the near term. Debt reduction of about C$1.6 billion through 2018 was funded from free cash flow, coal PPA termination payments, off-coal payment monetization, and proceeds from equity funded drop downs to RNW. With debt reduction of C$600 million through 2020, funded partially from the proceeds of the BRP preferred shares, Fitch expects total debt with equity credit/operating EBITDA to decline to around 3.6x-3.8x by 2021. Environmental Regulations Drive Elevated Capital Plans: Federal environmental regulations regarding the carbon tax, closure of all coal-fired plants by 2030 and the extended useful life (by 15 years) for converted coal to gas units appear supportive of TransAlta's capital investment strategy. TransAlta's coal-to-gas conversion for three generation units costing C$100 million-C$200 million in 2020-2021, presents modest financial and technological risk. The plants are currently co-firing natural gas from TransAlta's recently completed Tidewater gas pipelines (50% owner), lowering operating costs. It has 393 MW of wind projects and a battery project in the U.S. and Canada under construction, costing about 40% of the five-year C$2 billion plan, with peak spending in 2019-2020. In Fitch's opinion, the projects have low financial and construction risk. Conversion of TransAlta's two coal-fired plants to combined cycle gas fired facilities by 2023-2024 has a higher financial and operational risk, operating in a competitive market. Adequate Financial Flexibility: TransAlta has adequate liquidity to support some volatility in its operating cash flows and meet upcoming debt maturities. TransAlta has sufficient availability under its C$1.3 billion revolving credit facility and C$240 million of committed two-year bilateral credit facilities and is expected to remain FCF positive through 2021. The reduction of parent level debt maturities in 2019-2020 and proceeds from the BRP loan provided some near-term flexibility to accelerate TransAlta's capital investment in the clean coal to gas conversion strategy. Funding for development projects at RNW, its growth vehicle, include project level debt and tax equity for projects with long-term corporate PPAs, mitigating the investment requirements at TransAlta. DERIVATION SUMMARY The risk profile of TransAlta is in line with peers The AES Corporation ('BBB-'/Stable) and Vistra Energy Corp. ('BB'/Positive). TransAlta's asset base is smaller and less diverse in terms of size, scale and geographic and fuel diversity compared to Vistra, the largest independent power producer in the U.S. with approximately 41 GW of generation capacity, and AES, which owns and operates 20 GW of generation assets (AES' share) diversified globally. In comparison, TransAlta has a more concentrated generating fleet, owning 8.3 GW of capacity located in Canada, the U.S. and Australia, with the majority of cash flow generated in Alberta. Unlike its peers, TransAlta has a dominant position in its primary market. While the level of contracted cash flow is declining in 2021 to 50%, TransAlta's low cost hydro assets are well positioned in the market and provide ancillary services, mitigating market price volatility. The dividend from RNW is generated from long-term contracted asset. Vistra benefits from its ownership of large retail electricity businesses, which are typically countercyclical to wholesale generation given the length and stickiness of customer contracts. Vistra has a dominant position in the mass retail market in Texas, which has generated stable EBITDA over the last decade despite power price volatility. Favorably, about 25% of TransAlta's generation is from renewable sources, in line with AES at 29% while Vistra doesn't have significant renewable generation. Fitch expects TransAlta to achieve total debt with equity credit/operating EBITDA of less than 4.0x by 2021, above Vistra's total debt with equity credit/operating EBITDA projected at 2.7x by 2021, and lower than AES's recourse debt/APOCF (adjusted parent-only cash flow) projected at 4x. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Operate under Alberta PPAs for coal and hydro expiring in 2020. -- Power prices in Alberta increasing to greater than C$55/MWh in 2020 and thereafter (Fitch uses Wood Mackenzie as its third-party consultant). -- Capital spending ranging from C$75 million-C$250 million over 2020-2022 for gas conversion projects and C$275 million-C$375 million over 2020-2022 for the RNW projects. -- Stable ownership level (60.4%) of RNW. -- RNW project-level debt for construction funding of U.S. wind projects, either through project debt or tax equity. -- Debt issuance limited to refinancing, no equity issuance over the rating horizon. BEST/WORST CASE RATING SCENARIO International scale credit 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: TransAlta has adequate liquidity, with modestly positive FCF generation over the rating horizon. TransAlta has sufficient availability under its C$1.3 billion RCF and C$240 million of committed two-year bilateral credit facilities, and RNW has its own C$700 million RCF. The RCFs were recently amended and renewed until 2023. TransAlta and RNW have independent financing facilities but TransAlta provides financial support to RNW through currency hedges and PPAs with RNW's wind facilities in Alberta. TransAlta's next significant maturity is C$400 million due in 2020. TAC is in compliance with the terms of the credit facilities. Additionally, RNW has C$966 million project level debt with limitations on distributions to TAC based on project specific coverage tests. All of RNW's project have met their tests and will not limit distributions. SUMMARY OF FINANCIAL ADJUSTMENTS Financial statement adjustments that depart materially from those contained in the published financial statements of the relevant rated entity: -- Preferred stock is given 50% equity credit. 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 The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). TRANSOCEAN LTD: Incurs $391 Million Net Loss in First Quarter ------------------------------------------------------------- Transocean Ltd. reported a net loss of $391 million on $759 million of contract drilling revenues for the three months ended March 31, 2020, compared to a net loss of $171 million on $754 million of contract drilling revenues for the three months ended March 31, 2019. As of March 31, 2020, the Company had $23.45 billion in total assets, $1.59 billion in total current liabilities, $10.38 billion in total long-term liabilities, and $11.47 billion in total equity. At March 31, 2020, the Company had $1.5 billion in unrestricted cash and cash equivalents and $531 million in restricted cash and cash equivalents. In the three months ended March 31, 2020, the Company's primary source of cash was net cash proceeds from the issuance of debt. Contract drilling revenues for the three months ended March 31, 2020, decreased sequentially by $33 million, primarily due to reduced activity related to rigs that were idle and lower revenue efficiency. These decreases were partially offset by a full quarter of revenues from the recently reactivated ultra‑deepwater floaters Deepwater Mykonos and Deepwater Corcovado. First quarter 2020 results reflected a non-cash revenue reduction of $48 million, compared to $47 million in the prior quarter, from contract intangible amortization associated with the Songa and Ocean Rig acquisitions. Operating and maintenance expense was $540 million, compared with $575 million in the prior quarter. The sequential decrease was the result of lower in-service maintenance cost across the Company's fleet, activation costs in the prior quarter, and reduced activity due to lower utilization. This was partially offset by higher expense reimbursed by the Company's customers and higher severance cost. General and administrative expense was $43 million, as compared to $54 million in the fourth quarter of 2019. The decrease was primarily due to legal, professional and advisory fees incurred in the fourth quarter that were not repeated in the first quarter. Interest expense, net of amounts capitalized, was $160 million, in line with the fourth quarter. Interest income was $9 million, compared with $10 million in the previous quarter. The Effective Tax Rate was 1.1%, down from 30.3% in the prior quarter. The decrease was primarily due to various discrete period tax items, including the carryback of net operating losses in the U.S. as a result of the Coronavirus Aid, Relief and Economic Security Act, settlements and expirations of uncertain tax positions, gains and losses on currency exchange rates and changes in valuation allowance. The Effective Tax Rate excluding discrete items was (9.5)% compared to (47.2)% in previous quarter. Cash flows used in operating activities were $48 million, compared to cash provided by operating activities of $147 million in the prior quarter. The first quarter cash used in operating activities increased sequentially from operating cash generated in the fourth quarter, during which the Company experienced a high level of collections. This was primarily a result of more normalized collections on customer receivables combined with increased cash used in its operations including the timing of interest disbursements and payments as well as tax withholdings and tax payments in a number of non-U.S. jurisdictions. First quarter 2020 capital expenditures of $107 million decreased primarily due to reduced expenditures for the reactivation of two rigs and leasehold improvements, partially offset by increased expenditures for the Company's newbuild rigs under construction. This compares with $128 million in the previous quarter. "With the challenges we confronted related to COVID-19, I am very proud of the strong quarterly financial results we delivered," said Jeremy Thigpen, president and chief executive officer. "Through outstanding effort across our entire organization, we delivered revenue in line with our guidance, and at lower than projected costs; even with the additional hurdles we overcame crewing and equipping our rigs to meet their contractual requirements for our customers. Looking forward, we recognize the dramatic decline in oil prices, coupled with the continued uncertainties surrounding the containment of COVID-19, and the resumption of the global economy, will invariably delay the contracting activity that we expected in 2020. However, with our industry-leading backlog and proven track record for managing costs, we expect to continue to deliver industry-best margins. With continued strong operating performance, and the prudent management of our liquidity, Transocean is well-positioned to continue delivering the highest level of service while keeping our employees and our customers safe." A full-text copy of the Quarterly Report on Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/3mKiek About Transocean Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services. Transocean recorded a net loss of $1.25 billion for the year ended Dec. 31, 2019, compared to a net loss of $2 billion for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $24.10 billion in total assets, $1.72 billion in total current liabilities, $10.51 billion in total long-term liabilities, and $11.86 billion in total equity. * * * As reported by the TCR on April 29, 2020, S&P Global Ratings lowered its issuer credit rating on Transocean Ltd. to 'CCC' from 'CCC+'. "The collapse in oil prices has led to a sharp drop in demand for oilfield services, and we expect offshore activity to take a substantial hit. The recent material drop in oil prices --kicked off by the Saudi-Russian price war and worsened by the unprecedented drop in demand as a result of the coronavirus pandemic -- has led to sharp reductions in oil producers' capital spending plans for 2020. This will significantly reduce demand for the oilfield services sector. We expect offshore activity to be hit particularly hard, given the higher costs, higher operating risk, and longer payback periods for offshore projects relative to onshore plays," S&P said. TRI POINTE: S&P Alters Outlook to Negative, Affirms 'BB-' ICR ------------------------------------------------------------- S&P Global Ratings revised its outlook on Irvine, Calif.-based homebuilder TRI Pointe Group Inc. to negative from stable. At the same time, S&P affirmed its 'BB-' issuer credit rating and issue-level rating on its senior unsecured notes. Pressure on profitability stemming from weakening, key California markets last year has been compounded by the coronavirus outbreak in 2020 and has helped to bring on further demand diminution throughout the country this year. A broader geographic footprint will be slow to develop. In 2020, California should still account for more than one-third of unit closings and an even larger share of total revenue and profits. Softer home-buying demand throughout the golden state last year has yet to reverse. "In fact, we expect falling overall prices and weaker sales volumes will cause EBITDA margins to decline to just under 11.5% in 2020, from 15.3% in 2019. Moreover, we see no material uptick in overall contributions outside the company's home state of California until late 2021 or 2022," S&P said. S&P's negative outlook reflects its expectation that debt to EBITDA will finish 2020 at about 4.7x, from 3.3x in 2019, due to the negative impact on home-buying demand from COVID-19, resulting in a nearly 30% drop in EBITDA. However, with some offset from an anticipated pull-back in land spending, S&P forecasts this year's free operating cash flows will reach 36% of debt. "We could lower the rating if TRI Pointe's adjusted debt to EBITDA appeared likely to remain above 4x into 2021. This could occur if orders for new homes failed to recover this autumn or if forecast 2021 margins were 250 basis points less than our current base case assumptions. We might also lower the rating if its $300 million unsecured notes due July 2021 were to become current and liquidity appeared constrained at that time," S&P said. "We view an outlook revision to stable as unlikely within the next year. Given our expectation for management to be increasingly cautious regarding investment in inventory, we don't expect material diversification or overall growth, which could cause us to favorably reassess our view of business risk. Similarly, based on our expectation for firmly lower EBITDA in 2020, we don't envision adjusted debt to EBITDA to drop to less than the 3x threshold that could cause us to reassess our view of financial risk," the rating agency said. U.S.A. PARTS: Seeks to Hire Campbell Flannery as Legal Counsel -------------------------------------------------------------- U.S.A. Parts Supply, Cadillac U.S.A. and Oldsmobile U.S.A. LP seeks authority from the United States Bankruptcy Court for the Northern District of West Virginia to hire Campbell Flannery, P.C., as its legal counsel. The firm will provide services in connection with Debtor's Chapter 11 case, which include legal advice regarding their duties and responsibilities under the Bankruptcy Code and the preparation of a plan of reorganization. The firm's hourly rates are: James Campbell $500 Matthew Clark $350 Paralegal $175 Campbell Flannery received an initial retainer of $12,500. The firm is "disinterested" within the meaning of Section 327 of the Bankruptcy Code, according to court filings. Campbell Flannery can be reached through: James P. Campbell, Esq. Campbell Flannery, P.C. 1602 Village Market Boulevard #225 Leesburg, VA 20175 Phone: (703) 771-8344 Fax: (703) 777-1485 Email: jcampbell@campbellflannery.com About U.S.A. Parts Supply U.S.A. Parts Supply, Cadillac U.S.A. and Oldsmobile U.S.A. LP (formerly doing business as Cadillac U.S.A. Parts Supply LP) is an auto parts supplier in Kearneysville, W. Va. U.S.A. Parts Supply filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D.W.V. Case No. 20-00241) on March 22, 2020. The petition was signed by Michael Cannan, sole shareholder and officer of Gen Partner CUSAPS, Inc. At the time of filing, Debtor estimated $1 million to $10 million in both assets and liabilities. James P. Campbell, Esq. at Campbell Flannery, P.C., is Debtor's legal counsel. ULTRA PETROLEUM: Delays Filing of Amended 2019 Form 10-K -------------------------------------------------------- Ultra Petroleum Corp. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it is experiencing delays in the preparation of its financial statements and is availing itself of an extension to file the 10-K Part III Information on Form 10-K/A for the year ended Dec. 31, 2019 originally due April 29, 2020 (which the Company currently expects to file on or prior to June 15, 2020). The Company is relying on the order issued by the U.S. Securities and Exchange Commission on March 25, 2020 in SEC Release No. 34-88465 pursuant to the SEC's authority under Section 36 of the Securities Exchange Act of 1934 granting exemptions from certain provisions of the Exchange Act and the rules thereunder related to the reporting requirements for certain public companies, subject to certain conditions, to delay the filing of the information required by Part III of Form 10-K that is to be filed with the SEC as an amendment to the Annual Report on Form 10-K/A. The Company expects to file the Amended Annual Report no later than June 15, 2020 (45 days after the original due date of the 10-K Part III Information, or April 29, 2020). The Company said its operations and business have experienced disruptions due to the unprecedented conditions surrounding COVID-19 in the United States, resulting in the Company having to modify its business practices. Since early March, the Company has been following the recommendations of state and local health authorities to minimize the exposure risk for its employees, including restricting access to its physical offices. The Company's management has had to devote significant time and attention to assessing the potential impact of COVID-19 and related events on its operations and financial position and developing operational and financial plans to address those matters, which has diverted management resources from completing tasks necessary to file the Amended Annual Report with the 10-K Part III Information by the original due date of the 10-K Part III Information. The Company is supplementing the risk factors previously disclosed in the Company's Annual Report with the following risk factor: "We face business disruption and related risks resulting from the recent outbreak of the novel coronavirus 2019 ("COVID-19"), which could have a material adverse effect on our business and results of operations. "In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States and Canada, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. "Our Management believes it is important to keep our facilities operating to continue production but we have implemented additional social distancing measures for field employees and employees in our Denver and Pinedale offices are currently operating under a "work from home" protocol, each of which could have an adverse effect on our business and operations. "Significant uncertainty remains as to the potential impact of the COVID-19 pandemic on our operations, and on the global economy as a whole. Government-imposed restrictions on travel and other "social-distancing" measures such as restrictions on assembly of groups of persons, have the potential to disrupt supply chains for parts and sales channels for our products, and may result in labor or equipment shortages. "It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. We will continue to monitor the COVID-19 situation closely, and we intend to follow health and safety guidelines as they evolve. "We expect the ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial and operational results, will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration of the COVID-19 pandemic and the impact of governmental regulations that might be imposed in response. Our business could also be impacted should the disruptions from COVID-19 lead to changes in commercial behavior. The COVID-19 impact on the capital markets could impact our cost of borrowing. There are certain limitations on our ability to mitigate the adverse financial impact of these items, including the fixed costs of our operations. COVID-19 also makes it more challenging for management to estimate future performance of our businesses, particularly over the near to medium term." About Ultra Petroleum Headquartered in Englewood, Colorado, Ultra Petroleum Corp. -- http://www.ultrapetroleum.com-- is an independent energy company engaged in domestic natural gas and oil exploration, development and production. As of Dec. 31, 2019, the Company had $1.81 billion in total assets, $2.66 billion in total liabilities, and a total shareholders' deficit of $844.81 million. Ernst & Young LLP, in Denver, Colorado, the Company's auditor since 2006, issued a "going concern" qualification in its report dated April 14, 2020 citing that the Company has significant indebtedness, and extremely challenging current market conditions that have had an adverse impact on the Company's business and has stated that substantial doubt exists about the Company's ability to continue as a going concern. * * * As reported by the TCR on April 27, 2020, S&P Global Ratings lowered its issuer credit rating on U.S.-based oil and gas exploration and production (E&P) company Ultra Petroleum Corp. to 'D' from 'CCC-'. The downgrade reflects Ultra's decision to enter into a 30-day grace period after missing $13.2 million of interest payments due under its 2022 and 2025 unsecured notes on April 15, 2020. In December 2019, Fith Ratings affirmed the Long-Term Issuer Default Ratings on Ultra Petroleum Corp. and Ultra Resources at 'CCC'. Fitch's rating reflects the expected decline in production, high leverage metrics, and minimal asset coverage, which are partially offset by Ultra's low operating and drilling cost structure and expected ability to maintain neutral FCF in the near term. ULTRA PETROLEUM: Posts $108 Million Net Income in 2019 ------------------------------------------------------ Ultra Petroleum Corp. reported net income of $107.99 million on $742.03 million of total operating revenues for the year ended Dec. 31, 2019, compared to net income of $85.21 million on $892.50 million of total operating revenues for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.81 billion in total assets, $2.66 billion in total liabilities, and a total shareholders' deficit of $844.81 million. During the year ended Dec. 31, 2019, revenues from natural gas and oil sales, including processing credits, was $742.0 million as compared to $892.5 million in the year ended Dec. 31, 2018. During the year ended Dec. 31, 2019, production of natural gas and oil was 240.2 Bcfe, which was comprised of 230.1 Bcf of natural gas and 1.7 million barrels of oil. During the year ended Dec. 31, 2019, Ultra's average realized natural gas price was $2.50 per Mcf, including derivative settlements. Excluding the derivative settlements, the Company's average price for natural gas was $2.77 per Mcf for both 2019 and 2018, with volatility through each period. The net basis differential between NWROX and Henry Hub, using first of month pricing was negative $0.04 per MMBtu for the full year 2019 as compared to negative $0.46 in 2018. The Company's average realized oil price, including derivative settlements, was $59.97 per Bbl for the year ended Dec. 31, 2019, as compared to $59.44 per Bbl for the same period in 2018. For the full year 2019, total capital expenditures were $241.1 million. During this period, the Company participated in 94 gross (78.5 net) wells that were turned to sales, including operated and non-operated wells in the Pinedale field in Wyoming. Ernst & Young LLP, in Denver, Colorado, the Company's auditor since 2006, issued a "going concern" qualification in its report dated April 14, 2020 citing that the Company has significant indebtedness, and extremely challenging current market conditions that have had an adverse impact on the Company's business and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Fourth Quarter 2019 Financial Results Ultra's reported net loss for the quarter ended Dec. 31, 2019 was $1.3 million, or $0.01 per diluted share. The Company reported adjusted net income of $22.6 million, or $0.11 per diluted share, for the quarter ended Dec. 31, 2019. Net income was $39.7 million or $0.20 per diluted share in the quarter ended 2018, with adjusted net income for the same period at $27.4 million or $0.14 per diluted share. During the fourth quarter of 2019, total revenues excluding hedging settlements were $170.9 million as compared to $273.2 million during the fourth quarter of 2018. Derivative settlements during these periods were a loss of $2.2 million and of $82.4 million, respectively. The Company's production of natural gas and oil was 55.4 Bcfe, a decrease from 64.3 Bcfe in the same period of 2018. The decrease in production was based on the Company's decision to reduce and then suspend drilling in the third quarter of 2019 in response to weak commodity pricing. This decision allowed the Company to generate cash flow from operating activities of $19.8 million and free cash flow of $56.4 million in the fourth quarter of 2019. The Company reported Adjusted EBITDA of $100.6 million for the quarter ended Dec. 31, 2019 compared to $110.8 million for the fourth quarter of 2018. Ultra's fourth quarter production was comprised of 53.1 billion cubic feet ("Bcf") of natural gas and approximately 378,000 barrels ("Bbls") of oil. During the fourth quarter of 2019, Ultra's average realized natural gas price was $2.72 per thousand cubic feet ("Mcf"), which included derivative settlements, as compared to $2.58 per Mcf in the fourth quarter of 2018. Excluding the derivative settlements, the Company's average price for natural gas was $2.78 per Mcf in the fourth quarter of 2019, compared to $3.95 per Mcf for the fourth quarter of 2018. Rockies natural gas basis, measured by first-of month Inside FERC Northwest Rockies ("NWROX") compared to Henry Hub, was positive in the fourth quarter of 2019 by $0.27 per MMBtu. The Company's average realized oil price was $60.53 per Bbl, including derivative settlements, for the quarter ended December 31, 2019, as compared to $61.74 per Bbl for the same period in 2018. "We continue to execute on our plan of focusing on free cash flow generation and reducing our debt levels. Ultra's low-cost, low-decline and predictable operations resulted in free cash flow generation of approximately $56 million for the fourth quarter, allowing us to continue to reduce indebtedness on the trajectory we have forecast," said Brad Johnson, president and chief executive officer of Ultra. Liability Management Update In February and March 2020, the Company entered into confidentiality agreements and commenced discussions with certain holders of the Company's long-term debt and their legal and financial advisors. The Company previously engaged with certain debtholders regarding a potential out-of-court restructuring, but as previously disclosed on March 5, 2020, such negotiations are no longer occurring. Negotiations and discussions with certain other debtholders and their advisors are now ongoing regarding a potential in-court restructuring, although as of April 14, 2020, no definitive agreements have been reached regarding any amendments, restructurings or other transactions relating to the Company's indebtedness. The Company said, "There can be no assurance that our efforts will result in any agreement or what the terms of any agreement will be. If an agreement is reached and we pursue a restructuring, it may be necessary for us to file a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code or the Canadian Bankruptcy and Insolvency Act in order to implement the agreement through the confirmation and consummation of a plan of reorganization approved by the bankruptcy court in the bankruptcy proceedings. We also may conclude that it is necessary to initiate Chapter 11 proceedings to implement a restructuring of our obligations even if we are unable to reach an agreement with our creditors and other relevant parties regarding the terms of such a restructuring." A full-text copy of the Form 10-K as filed with the Securities and Exchange Commission is available for free at: https://is.gd/b1YecN About Ultra Petroleum Headquartered in Englewood, Colorado, Ultra Petroleum Corp. -- http://www.ultrapetroleum.com-- is an independent energy company engaged in domestic natural gas and oil exploration, development and production. * * * As reported by the TCR on April 27, 2020, S&P Global Ratings lowered its issuer credit rating on U.S.-based oil and gas exploration and production (E&P) company Ultra Petroleum Corp. to 'D' from 'CCC-'. The downgrade reflects Ultra's decision to enter into a 30-day grace period after missing $13.2 million of interest payments due under its 2022 and 2025 unsecured notes on April 15, 2020. In December 2019, Fith Ratings affirmed the Long-Term Issuer Default Ratings on Ultra Petroleum Corp. and Ultra Resources at 'CCC'. Fitch's rating reflects the expected decline in production, high leverage metrics, and minimal asset coverage, which are partially offset by Ultra's low operating and drilling cost structure and expected ability to maintain neutral FCF in the near term. US ANTIMONY: DeCoria, Maichel & Teague Raises Going Concern Doubt ----------------------------------------------------------------- United States Antimony Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $3,672,891 on $8,268,005 of revenues for the year ended Dec. 31, 2019, compared to a net income of $873,225 on $9,034,403 of revenues for the year ended in 2018. The audit report of DeCoria, Maichel & Teague, P.S., states that the Company has negative working capital and accumulated deficit. These factors 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 $13,693,975, total liabilities of $5,226,833, and a total stockholders' equity of $8,467,142. A copy of the Form 10-K is available at: https://is.gd/vdmf4n United States Antimony Corporation produces and sells antimony, silver, gold, and zeolite products in the United States and Canada. It was founded in 1968 and is headquartered in Thompson Falls, Montana. US FOODS: Moody's Cuts CFR to B2 & Alters Outlook to Negative ------------------------------------------------------------- Moody's Investors Service downgraded US Foods, Inc.'s corporate family rating to B2 from Ba3, probability of default rating to B2-PD from Ba3-PD, senior secured bank facility to B3 from Ba3 and senior unsecured notes rating to Caa1 from B2. Its speculative grade liquidity rating was downgraded to SGL-2 from SGL-1. The outlook was changed to negative. This completes the review for downgrade that was initiated on March 18, 2020. In addition, Moody's also assigned a B3 rating to its proposed senior secured notes due 2025 and a B3 rating to its new senior secured term loan. The use of net proceeds will be to fund the Smart Foodservice Warehouse acquisition, working capital and general corporate purposes. "The downgrade reflects the announced purchase of Smart Foodservice Warehouse Stores for $970 million in cash while managing the negative impact on customer demand from the disruption caused by COVID-19" said Vice President, Christina Boni. " Moody's forecasts that the incremental debt raises when combined with significantly reduced EBITDA will result in a sizable spike in leverage in 2020. However, assuming a slow and steady recovery in the restaurant industry, Moody's roughly estimates that debt/EBITDA should return to the around 6.0x range in 2021. The announced $500 million preferred stock equity raise to a private equity sponsor and US Foods continued pursuit of large debt financed acquisitions reflect a more aggressive financial policy. The lowering of its speculative grade liquidity rating to SGL-2 from SGL-1 reflects that although the company will have over $1 billion of cash post the transaction, liquidity has been reduced by the near term operating cash flow deficits and the expected termination of its $800 million ABS facility which reduces the amount of asset backed lines available. Its $1.6 billion revolver, is expected to have limited availability post its recent revolver draw of $1 billion. Downgrades: Issuer: US Foods, Inc. Probability of Default Rating, Downgraded to B2-PD from Ba3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Corporate Family Rating, Downgraded to B2 from Ba3 Senior Secured Bank Credit Facility, Downgraded to B3 (LGD4) from Ba3 (LGD4) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD6) from B2 (LGD6) Assignments: Issuer: US Foods, Inc. Senior Secured Bank Credit Facility, Assigned B3 (LGD4) Senior Secured Regular Bond/Debenture, Assigned B3 (LGD4) Outlook Actions: Issuer: US Foods, Inc. Outlook, Changed to Negative from Rating Under Review 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 food service, restaurant and hospitality sectors have been some of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in USF's credit profile, including its exposure to restaurant closures and weak hospitality demand have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and USF 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 USF of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The B2 corporate family rating reflects governance considerations including its aggressive acquisition strategy highlighted by its recent purchase of SGA's Food Group of Companies and its upcoming $970 million Smart Foodservice transaction. The company's plan to terminate its ABS facility leaves the company reliant on its $1.6 billion revolver credit facility. Although the company has raised $500 million of preferred equity, it comes with private equity taking a more meaningful role in the company with board representation. The company also will be adding approximately $1.1 billion of additional funded debt based on the proposed transaction, which when combined with weak near-term demand as a result of COVID-19, will significantly raise leverage in 2020. Moody's base case reflects a gradual but steady recovery in demand that will result in debt/EBITDA around 6.0x at the end of 2020. Although the contraction of demand related to Covid-19 should reverse, its exposure to independent restaurants and the hospitality sector which are currently facing widespread location closures are at risk of having a protracted period of reduced demand. The negative outlook reflects its view that the company's credit metrics will remain elevated as the company integrates both the proposed Smart Foodservice acquisition and the acquisition of SGA as it contends with the disruption posed by COVID-19. The outlook also reflects the risks compressed consumer demand or a change in associated with integrating these assets and it manages the disruption posed by COVID-19 and the ensuing pressure on consumer demand. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include a sustained improvement in earnings while maintaining a balanced financial strategy that results in debt to EBITDA of under 5.0 times and EBITA to interest above 2.5 times on a sustained basis. Factors that could lead to a downgrade include a continued deterioration in operating performance, a longer than anticipated timeframe for the integration of announced acquisitions or the adoption of a more aggressive financial strategy that does not prioritize near term debt reduction that results in debt to EBITDA sustained above 6.0 times or EBITA to interest falling below 1.75 times. A sustained deterioration in liquidity for any reason could also lead to a downgrade. US Foods, Inc. is a leading North American food service marketing and distribution company, with annual revenues of around $29 billion (pro forma for the acquisition of SGA and Smart Foodservice). The company operates as a national, broad-line distributor, providing a complete range of products - from fresh farm produce, frozen food, and specialty meat products to paper products, restaurant equipment, and machinery. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. US FOODS: S&P Rates New $700MM Sr. Secured Term Loan Due 2027 'BB' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to US Foods Inc.'s (USF) proposed $700 million senior secured term loan due 2027 and placed the issue-level rating on CreditWatch with negative implications. USF will use the proceeds from the term loan to fund a portion of its acquisition of Smart Foodservice. Subsequent to closing on the loan, S&P expects the company to use a portion of the net proceeds from its recent secured notes issuance to repay $400 million of the term loan. It will then convert the remaining $300 million term loan balance into a five-year facility. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. All of S&P's existing ratings on USF remain on CreditWatch with negative implications, reflecting continued uncertainty around the duration and severity of the COVID-19 pandemic's effects on the foodservice industry and the company's ability to restore its credit metrics in a reasonable timeframe. USF's organic revenue declined by about 50% year-over-year since late March when stay-at-home orders to limit the spread of the virus began to roll out nationally. "While we expect the rate of decline will soften as stay-at-home orders and other restrictions are relaxed in the coming months, its revenue will likely remain materially lower at least into early 2021. We believe a large proportion of consumers will be hesitant to return to establishments and venues that serve food away from home as fears of a second outbreak linger. The fallout from the virus outbreak, including the potential for a protracted recession and large-scale restaurant closures, could also pressure USF's sales and, in turn, our rating," S&P said. VAIL RESORTS: Moody's Rates New $500MM Sr. Unsec. Notes 'B2' ------------------------------------------------------------ Moody's Investors Service assigned ratings for Vail Resorts, Inc. including a Ba3 Corporate Family Rating, a Ba3-PD Probability of Default Rating, and a Speculative Grade Liquidity rating of SGL-1. Concurrently, Moody's assigned a B2 rating to the company's proposed $500 million senior unsecured notes due 2025. The outlook is stable. Proceeds from the $500 million senior unsecured notes will be used to increase cash on hand and for general corporate purposes. Assignments: Issuer: Vail Resorts, Inc. Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD5) Corporate Family Rating, Assigned Ba3 Reinstatements: Issuer: Vail Resorts, Inc. Probability of Default Rating, Reinstated to Ba3-PD Speculative Grade Liquidity Rating, Reinstated to SGL-1 Outlook Actions: Issuer: Vail Resorts, Inc. Outlook, Assigned Stable RATINGS RATIONALE Vail's Ba3 CFR reflects its high financial leverage with debt/EBITDA projected to increase to around 6.0x by fiscal year-end July 2020, from a moderate 3.3x as of the twelve months period ended January 31, 2020 (pro forma for the notes offering and incorporating Moody's adjustments). Vail has good liquidity to manage through the coronavirus-induced downturn and earnings will improve and leverage will decline once the economy emerges from recession. However, the rating also reflects the unprecedented nature of the downturn and that social distancing practices in areas such as lift lines, restaurants, and lodges will lead to less visitation and facility utilization until vaccines or other effective coronavirus countermeasures are in place, the timing of which is highly uncertain. Vail's operating results were negatively impacted by the early closure of its resorts in mid-March 2020, due to the coronavirus pandemic. Moody's expects efforts to contain the coronavirus will continue to significantly affect operating performance in fiscal 2021 mainly through reduced utilization. There is also potential that some resorts will remain closed by the start of the 2020-2021 ski season in November 2020. Moody's projects debt/EBITDA financial leverage will improve in fiscal 2021 to below 5.0x if resorts open for the majority of the 2020-2021 ski season. However, Moody's expect skier visits, effective ticket prices, and ancillary revenue to be below normal levels. In addition, consumers may need to maintain social distancing and avoid large crowds, which factors will negatively affect resort operations and efficiency. A weak economic environment will also pressure discretionary consumer spending. Vail's operating results are highly seasonal, and exposed to varying weather conditions and discretionary consumer spending. Governance factors primarily relate to the company's aggressive acquisition strategy with acquisitions funded mainly with incremental debt, and Vail has been a dividend payer since 2011. The company's recent decision to suspend its dividend and the proposed bond offering to boost cash will favorably preserve liquidity and enhance the company's financial flexibility to manage through the coronavirus pandemic. Environmental considerations in addition to exposure to adverse weather include the need to access large quantities of water, which may be challenging following periods of severe drought, and the vast amounts of forest land the company is responsible to properly operate and protect. The rating also reflects Vail's leading position in the North American ski resorts industry with a very strong portfolio of ski resorts, including some premier ski destinations that attract high income consumers and can command higher prices relative to peers. Vail benefits from its good geographic diversification and higher local skier customer mix following the Peak Resorts acquisition in September 2019. Vail's high and growing penetration of its Epic Pass provides a stable revenue stream that helps mitigate weather exposure. The North American ski industry has high barriers to entry and has exhibited resiliency even during weak economic periods, including the 2007-2009 recession. Vail's SGL-1 speculative-grade liquidity rating reflects the company's very good liquidity bolstered by the material $620 million cash balance as of January 31, 2020 pro forma for the offering, and over $700 million of combined unused capacity on its subsidiaries revolver credit facilities, comprised of a $500 million Vail Holdings, Inc. secured revolver due 2024 and a CAD$300 million Whistler Blackcomb secured revolver due 2024 (both unrated). The company's amendment to its VHI credit agreement eliminated financial maintenance covenants through January 31, 2022 and requires a $150 million minimum liquidity through the same period that Moody's expects the company to have strong cushion. These liquidity characteristics provide financial flexibility to fund operations through the temporary closure of its resorts in 2020 and its operating seasonality. The B2 rating on the proposed $500 million senior unsecured notes due 2028 is two notches below the Ba3 CFR, reflecting the notes' effective subordination relative to the significant amount of senior secured debt in the capital structure. 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 leisure travel sector including ski resorts 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 Vail's credit profile, including its exposure to mandated stay at home orders, increased social distancing measures and 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 reflects the impact on Vail of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The stable outlook reflects Moody's expectation that Vail's resorts will reopen by the start of the 2020-2021 ski season and remain in operation for most of the ski season, along with some economic recovery, resulting in improved operating results and credit metrics in fiscal 2021. The stable outlook also reflects Moody's expectation for positive free cash flows in fiscal 2021 driven by lower capital expenditures and dividend distributions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that would lead to an upgrade include operations resuming for the 2020-2021 ski season and signs of good visitation trends and stable effective ticket and ancillary activity prices, leading to an expectation that the company's operating profits return close to fiscal year 2019 levels and that debt/EBITA will approach 4.0x. Factors that would lead to a downgrade include operations being suspended longer than its assumption or expectations for weaker facility utilization and earnings recovery, resulting in debt/EBITDA remaining above 5.0x. A deterioration in liquidity could also lead to a downgrade. Vail Resorts, Inc. is a leading operator of mountain resorts and regional ski areas, operating 37 mountain resorts, with 33 in the US, 1 in Canada, and 3 in Australia. The company is publicly traded (NYSE: MTN) and reported revenue of approximately $2.4 billion for the twelve month period ending January 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. VCHP NEPTUNE BEACH: Hires Agentis PLLC as Bankruptcy Counsel ------------------------------------------------------------ VCHP Neptune Beach, LLC seeks authority from the US Bankruptcy Court for the Middle District of Florida to employ Agentis PLLC, as its legal counsel. The Debtor requires Agentis to: a. advise the Debtor with respect to their powers and duties as a Debtor in possession and the continued management of their respective business operations; b. advise the Debtor with respect to their responsibilities in complying with the U.S. Trustee’s Operating Guidelines and Reporting Requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; d. protect the interests of the Debtor and the Estate in all matters pending before the Court; e. represent the Debtor in negotiations with creditors in the preparation of a plan. Agentis PLLC will be paid at these hourly rates: Jacqueline Calderin $520 Attorneys $290 to $610 Paralegals $125 to $220 Agentis PLLC will also be reimbursed for reasonable out-of-pocket expenses incurred. Jacqueline Calderin, Esq., shareholder of Agentis PLLC, assured the cCourt 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. Agentis PLLC can be reached at: Jacqueline Calderin, Esq. AGENTIS PLLC 55 Alhambra Plaza, Suite 800 Coral Gables, FL 33134 Tel: (305) 722-2002 About VCHP Neptune Beach VCHP Neptune Beach, LLC, which conducts business under the name 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. WALDEN PALMS: June 22 Disclosure Statement Hearing Set ------------------------------------------------------ Debtor Walden Palms Condominium Association, Inc. filed with the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, a Disclosure Statement. On April 14, 2020, Judge Karen S. Jennemann ordered that: * June 22, 2020 at 10:00 a.m. in Courtroom 6A, 6th Floor, George C. Young Courthouse, 400 West Washington Street, Orlando, FL 32801, is the evidentiary hearing to consider and rule on the disclosure statement. * Objections to the proposed disclosure statement may be filed with the Court at any time before or at the hearing. * All creditors and parties in interest that assert a claim against the debtor which arose after the filing of this case must file applications for the allowance of such claims with the Court no later than 14 days after the Court enters an order approving the disclosure statement. A full-text copy of the order dated April 14, 2020, is available at https://tinyurl.com/ybt6vusm from PacerMonitor at no charge. About Walden Palms Condominium Association Walden Palms Condominium Association, Inc., is a nonprofit property management company in Orlando, Florida. Walden Palms Condominium Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-07945) on Dec. 24, 2018. At the time of the filing, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of $10 million to $50 million. The case is assigned to Judge Cynthia C. Jackson. The Debtor tapped Shapiro, Blasi, Wasserman & Hermann, P.A., as its bankruptcy counsel; Arias Bosinger PLLC as general association counsel; JD Law Firm; as collections & foreclosure counsel; and Winderweedle, Haines, Ward & Woodman, P.A., as land use counsel. WAND NEWCO 3: Moody's Alters Outlook on B2 CFR to Negative ---------------------------------------------------------- Moody's Investors Service changed the outlook of Wand NewCo 3, Inc. to negative from stable, and affirmed all ratings, including the B2 corporate family rating. "The outlook change to negative reflects the potential stress to Caliber's credit metrics as a result of the impact of the COVID-19 outbreak," stated Moody's Vice President Charlie O'Shea. "While Caliber has been deemed an essential business and all of its centers remain open, assignment volumes have declined as a result of lockdown orders in states that represent more than 90% of Caliber's center footprint, and this results in uncertainty with respect to the potential stress to credit metrics as a result, " continued O'Shea. "Moody's notes that with nearly $300 million in cash presently, liquidity is sufficient to handle any forseeable cash flow deficits." Affirmations: Issuer: Wand NewCo 3, Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured 1st Lien Bank Credit Facility, Affirmed B1 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa1 (LGD5) Outlook Actions: Issuer: Wand NewCo 3, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The 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 Caliber's credit profile, including its exposure to volume declines, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Caliber 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 Caliber of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Wand NewCo 3, Inc.'s B2 Corporate Family Rating reflects the company's leading market position -- with practically national coverage - in the highly fragmented collision repair sub-sector, and its strong relationships with national and major insurance carriers, which represent the vast majority of its revenues. Caliber's credit profile is constrained by the company's weak credit metrics, with debt/EBITDA of approximately 6.9 times and EBIT/interest of roughly 0.7 times in FY 2019, pro forma for recent acquisitions and greenfield/brownfield locations and expected synergies from the merger of Caliber and ABRA which closed in February 2019. Caliber benefits from strong industry fundamentals should continue to support stable and predictable demand for its services. Caliber's credit profile is constrained by the company's aggressive growth strategy and financial policies, as well as the integration risks associated with the merger with ABRA. Moody's views Caliber's liquidity as adequate as its cash flow will remain pressured over the near-term , with nearly $300 million of balance sheet cash providing support. The negative outlook reflects Moody's concerns regarding the effects of the coronavirus on the company's credit metrics. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if operating performance improves such that debt/EBITDA is maintained at around 5.5 times and EBITA/Interest is maintained around 2.0 times (metrics are proforma for acquisitions), with at least a good liquidity profile, improvement in free cash flow, and a financial strategy surrounding shareholder returns that indicates a commitment to this quantitative profile. Ratings could be downgraded if either due to weakened operating performance or aggressive financial strategy credit metrics (proforma for acquisitions) fail to demonstrate tangible, sequential improvement in earnings beginning in Q2 2020 and indicating a predictable path to achieving debt/EBITDA of around 6.5 times and EBITA/interest of at least 1.25 times in the 12-18 months from Q2 2020, or if liquidity deteriorates for any reason. Wand NewCo 3, Inc. is a leading collision repair provider with over 1,100 locations in the United States under the Caliber Collision banner, with combined FY 2019 revenues of over $3.8 billion. The company is majority owned by Hellman & Freidman LLC. WESTINGHOUSE ELECTRIC: Santee Cooper Wins Default Judgment ---------------------------------------------------------- In the case captioned South Carolina Public Service Authority, Plaintiff, v. Westinghouse Electric Company, LLC, as reorganized pursuant to Chapter 11 of the Bankruptcy Code; et al., Defendants, Civil Action No. 2:19-1432-RMG (D.S.C.), District Judge Richard Mark Gergel granted Plaintiff's motion for default judgment as to Defendants John Doe, Jane Doe, Richard Roe and Mary Roe. This is an action to quiet title and for declaratory judgment brought by Plaintiff South Carolina Public Service Authority aka Santee Cooper. Specifically, Santee Cooper seeks a declaration that it has sole title to certain property for the construction and operation of Units 2 and 3 of the V.C. Summer Nuclear Generating Station. The Unknown Defendants are fictitious names representing unknown persons or entities that may claim an interest in the equipment, nuclear components, and construction commodities that were to become a permanent part of the Units and for which Santee Cooper has paid, taken possession and control, or maintained since construction of the Units stopped. Former defendants Westinghouse Electric Company, LLC and Brookfield Business Partners LP were dismissed by stipulation without and with prejudice, respectively, and the Unknown Defendants are the sole remaining defendants. The Unknown Defendants were served with the complaint by publication in the Post & Courier and The State Newspaper in August 2019. They have not filed an answer or otherwise responded to the complaint, and the time to do so under the Federal Rules of Civil Procedure has expired. In January 2020 and on Santee Cooper's motion, the Clerk entered default as to the Unknown Defendants. Santee Cooper now moves to default judgment as to them. Rule 55 of the Federal Rules of Civil Procedure provides that a party must apply to the Court for a default judgment when the claim is not for a sum certain. The court may hold a hearing if it needs to conduct an accounting, determine the amount of damages, establish the truth of any allegation by evidence, or investigate any other matter. Id. Default judgment may only be entered after entry of default. By entry of default, the defendant is deemed to have "admitted the plaintiff's well-pleaded allegations of fact." The Court finds that Santee Cooper is entitled to default judgment as to the Unknown Defendants pursuant to Rule 55(b). Because default was properly entered against the Unknown Defendants, the Court "must accept all well-pleaded factual allegations in [the complaint] as true." This includes Santee Cooper's pleading that the equipment at issue was to become a permanent part of the Units and that Santee Cooper has full and sole title to the equipment. The Court does not find that a hearing is necessary in these circumstances. Therefore, the Court finds that default judgment is warranted. A copy of the Court's Order and Opinion dated March 11, 2020 is available at https://bit.ly/2USNIxi from Leagle.com. South Carolina Public Service Authority, Plaintiff, represented by Amy L.B. Hill -- ahill@gwblawfirm.com -- Gallivan White and Boyd, Gray Thomas Culbreath -- gculbreath@gwblawfirm.com -- Gallivan White and Boyd, John T. Lay -- jlay@gwblawfirm.com -- Gallivan White and Boyd, Jordan M. Crapps -- jcrapps@gwblawfirm.com -- Gallivan White and Boyd & Lindsay Anne Joyner -- ljoyner@gwblawfirm.com -- Gallivan White and Boyd. About Westinghouse Electric Westinghouse Electric Company LLC -- http://www.westinghousenuclear.com/-- is a U.S.-based nuclear power company founded in 1999 that provides design work and start-up help for new nuclear power plants and makes many of the components. Westinghouse manufactures and supplies the commercial fuel products needed to run the plants, and it offers training, engineering, maintenance, and quality management services. Almost 50% of nuclear power plants around the world and about 60% of U.S. plants are based on Westinghouse's technology. Westinghouse's world headquarters are located in the Pittsburgh suburb of Cranberry Township, Pennsylvania. On Oct. 16, 2006, Westinghouse Electric was sold for $5.4 billion to a group comprising of Toshiba (77% share), partners The Shaw Group (20% share), and Ishikawajima-Harima Heavy Industries Co. Ltd. (3% share). After purchasing part of Shaw's stake in 2013, Japan-based conglomerate Toshiba obtained ownership of 87% of Westinghouse. Amid cost overruns at U.S. nuclear reactors it was building, Westinghouse Electric Company LLC, along with 29 affiliates, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 17-10751) on March 29, 2017. The petitions were signed by AlixPartners' Lisa J. Donahue, the Debtors' chief transition and development officer. The Debtors disclosed total assets of $4.32 billion and total liabilities of $9.39 billion as of Feb. 28, 2017. The Hon. Michael E. Wiles presides over the cases. Weil, Gotshal & Manges LLP serves as counsel to the Debtors. The Debtors hired AlixPartners LLP as financial advisor; PJT Partners Inc. as investment banker; Kurtzman Carson Consultants LLC as claims and noticing agent; K&L Gates as special counsel; and KPMG LLP as tax consultant and accounting and financial reporting advisor. The Debtors retained PricewaterhouseCoopers LLP as independent auditor and tax services provider to perform audit services in connection with Toshiba Nuclear Energy Holdings (US) Inc. and Toshiba Nuclear Energy Holdings (UK) Ltd. Toshiba Nuclear Energy Holdings (UK) Ltd. is represented by Albert Togut, Esq., Brian F. Moore, Esq., and Kyle J. Ortiz, Esq., at Togut, Segal & Segal LLP. The Board of Directors of Westinghouse appointed a special panel called the U.S. AP1000 Committee to oversee the company's activities related to certain AP1000 nuclear plants located in Georgia and South Carolina. On April 7, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. Proskauer Rose LLP is the committee's bankruptcy counsel, and Houlihan Lokey Capital, Inc., serves as its investment banker. WILLIAM LYON: S&P Raises ICR to 'BB'; Rating Withdrawn ------------------------------------------------------ S&P Global Ratings raised its issue credit rating on William Lyon Homes Inc. to 'BB' from 'B' as the rating agency now views the U.S.-based homebuilder to be a core subsidiary of new parent Taylor Morrison Home Corp., and then removed the rating from CreditWatch, where it was placed with positive implications on Nov. 8, 2019. The outlook is negative. The issuer credit rating was subsequently withdrawn at the parent's request. WOODCREST ACE: May Continue Using Cash Collateral Until May 12 -------------------------------------------------------------- Judge Mark Houle of the U.S. Bankruptcy Court for the Central District of California authorized Woodcrest Ace Hardware, Inc. and its affiliates to use cash collateral through May 12, 2020, to pay their business expenses. The Debtors are also authorized to use cash collateral to pay National Cooperative Bank ("NCB") monthly adequate protection payments in the total aggregate amount of $5,748 and pay all quarterly fees due to the U.S. Trustee's Office. NCB, Zions Bancorporation, N.A. d/b/a California Bank & Trust, and all other parties asserting a lien against the cash collateral used by the Debtors are granted a replacement lien, to the same extent, validity, and priority existing on the date of the Debtors' bankruptcy petition date, against all post-petition property of the Debtors to the extent that the Debtors' cash collateral use results in a diminution of the value of such party's lien on the petition date. The hearing on the Affiliated Debtors' further use of cash collateral is continued to May 12, 2020 at 2:00 p.m. A copy of the Order is available for free at https://is.gd/1JbR7f from PacerMonitor.com. About Woodcrest Ace Hardware Based in Riverside, California, Woodcrest Ace Hardware Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-13127) on April 12, 2019. In the petition signed by Paul Douglas Shanabarger, president, the Debtor was estimated to have $1 million in both assets and liabilities. Rosenstein & Associates, led by Robert B. Rosenstein, is the Debtor's counsel. ZDN INC: Seeks to Hire Cohen & Cohen as Bankruptcy Counsel ---------------------------------------------------------- ZDN Inc. seeks authority from the U.S. Bankruptcy Court for the District of Colorado to employ Cohen & Cohen, P.C. as its bankruptcy counsel. ZDN requires Cohen to: a. provide legal advice to the Debtor with respect to its powers and duties as debtor-in-possession; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications, complaints, and other legal documents necessary in the administration of the case; d. protect the interests of the Debtor in all matters pending before the Court; and e. represent the Debtor in negotiating with its creditors to prepare a plan of reorganization or other exit plan. The current hourly rates for the counsel are: Roberston Cohen $350 Katharine S. Sender $275 Associates $275 Paralegal $100 The counsel is "disinterested" as such term is defined in 11 U.S.C. Sec 101(14) and has no connection with the Debtor, its creditors or any other party in interest, or their respective attorneys, and does not represent any interest adverse to the Debtor, according to court filings. The firm can be reached through: Robertson B. Cohen, Esq. Katharine S. Sender, Esq. Cohen & Cohen, P.C. 1720 S. Bellaire St; Ste 205 Denver, CO 80222 Phone: (303) 933-4529 Fax: (866) 230-8268 Email: rcohen@cohenlawyers.com ksender@cohenlawyers.com About ZDN Inc. ZDN Inc., which conducts business under the name BlackJack Pizza, owns and operates a pizza store in Firestone, Colo. ZDN filed a Chapter 11 petition (Bankr. D. Col. Case No. 20-10887) on Feb. 10, 2020. At the time of the filing, the Debtor disclosed assets of between $100,001 and $500,000and liabilities of the same range. Judge Elizabeth E. Brown oversees the case. Holland Law Office P.C. is the Debtor's legal counsel. No official committee of unsecured creditors has been appointed in the Debtor's case. [^] BOND PRICING: For the Week from April 27 to May 1, 2020 ----------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 24 Hour Fitness Worldwide HRFITW 8.000 3.968 6/1/2022 24 Hour Fitness Worldwide HRFITW 8.000 5.211 6/1/2022 AMC Entertainment Holdings AMC 5.750 23.518 6/15/2025 AMC Entertainment Holdings AMC 5.875 23.794 11/15/2026 Ally Financial Inc ALLY 3.900 91.225 7/15/2020 Ally Financial Inc ALLY 4.000 99.000 5/15/2020 Ally Financial Inc ALLY 3.000 93.325 6/15/2020 American Energy- Permian Basin LLC AMEPER 12.000 69.250 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 12.350 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 12.350 10/1/2024 Arbor Realty Trust Inc ABR 5.375 81.005 11/15/2020 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Basic Energy Services Inc BASX 10.750 42.085 10/15/2023 Basic Energy Services Inc BASX 10.750 42.085 10/15/2023 Beverages & More Inc BEVMO 11.500 55.115 6/15/2022 Beverages & More Inc BEVMO 11.500 52.244 6/15/2022 Bon-Ton Department Stores Inc/The BONT 8.000 9.368 6/15/2021 Briggs & Stratton Corp BGG 6.875 49.564 12/15/2020 Bristow Group Inc BRS 6.250 6.000 10/15/2022 Bristow Group Inc BRS 4.500 6.000 6/1/2023 Bruin E&P Partners LLC BRUINE 8.875 2.446 8/1/2023 Bruin E&P Partners LLC BRUINE 8.875 2.446 8/1/2023 Buffalo Thunder Development Authority BUFLO 11.000 50.125 12/9/2022 CBL & Associates LP CBL 5.250 27.530 12/1/2023 CBL & Associates LP CBL 4.600 27.974 10/15/2024 CEC Entertainment Inc CEC 8.000 7.010 2/15/2022 CSI Compressco LP / CSI Compressco Finance Inc CCLP 7.250 33.463 8/15/2022 CalAmp Corp CAMP 1.625 99.750 5/15/2020 Calfrac Holdings LP CFWCN 8.500 6.139 6/15/2026 Calfrac Holdings LP CFWCN 8.500 6.318 6/15/2026 California Resources Corp CRC 8.000 3.114 12/15/2022 California Resources Corp CRC 5.500 3.326 9/15/2021 California Resources Corp CRC 6.000 3.239 11/15/2024 California Resources Corp CRC 8.000 2.101 12/15/2022 California Resources Corp CRC 6.000 2.135 11/15/2024 Callon Petroleum Co CPE 6.250 20.363 4/15/2023 Callon Petroleum Co CPE 6.125 17.947 10/1/2024 Callon Petroleum Co CPE 6.375 16.625 7/1/2026 Callon Petroleum Co CPE 8.250 17.361 7/15/2025 Callon Petroleum Co CPE 6.125 16.948 10/1/2024 Callon Petroleum Co CPE 6.125 16.948 10/1/2024 Capital One Financial Corp COF 5.550 83.750 N/A Chaparral Energy Inc CHAP 8.750 2.174 7/15/2023 Chaparral Energy Inc CHAP 8.750 2.120 7/15/2023 Chesapeake Energy Corp CHK 11.500 3.035 1/1/2025 Chesapeake Energy Corp CHK 5.500 2.000 9/15/2026 Chesapeake Energy Corp CHK 4.875 2.792 4/15/2022 Chesapeake Energy Corp CHK 5.750 2.617 3/15/2023 Chesapeake Energy Corp CHK 11.500 3.228 1/1/2025 Chesapeake Energy Corp CHK 7.000 1.665 10/1/2024 Chesapeake Energy Corp CHK 8.000 3.412 6/15/2027 Chesapeake Energy Corp CHK 5.375 3.354 6/15/2021 Chesapeake Energy Corp CHK 8.000 1.825 1/15/2025 Chesapeake Energy Corp CHK 7.500 2.058 10/1/2026 Chesapeake Energy Corp CHK 8.000 2.000 3/15/2026 Chesapeake Energy Corp CHK 8.000 1.773 3/15/2026 Chesapeake Energy Corp CHK 8.000 2.664 6/15/2027 Chesapeake Energy Corp CHK 8.000 2.664 6/15/2027 Chesapeake Energy Corp CHK 8.000 2.192 1/15/2025 Chesapeake Energy Corp CHK 8.000 1.773 3/15/2026 Chesapeake Energy Corp CHK 8.000 2.192 1/15/2025 CorEnergy Infrastructure Trust Inc CORR 7.000 80.000 6/15/2020 DCP Midstream LP DCP 7.375 43.500 N/A DFC Finance Corp DLLR 10.500 67.125 6/15/2020 DFC Finance Corp DLLR 10.500 67.125 6/15/2020 DISH DBS Corp DISH 5.125 100.000 5/1/2020 Dean Foods Co DF 6.500 2.980 3/15/2023 Dean Foods Co DF 6.500 2.918 3/15/2023 Delta Air Lines 2012-1 Class A Pass Through Trust DAL 4.750 98.607 5/7/2020 Denbury Resources Inc DNR 9.000 19.033 5/15/2021 Denbury Resources Inc DNR 5.500 2.524 5/1/2022 Denbury Resources Inc DNR 9.250 18.438 3/31/2022 Denbury Resources Inc DNR 7.750 17.918 2/15/2024 Denbury Resources Inc DNR 4.625 5.214 7/15/2023 Denbury Resources Inc DNR 6.375 5.138 8/15/2021 Denbury Resources Inc DNR 9.000 18.951 5/15/2021 Denbury Resources Inc DNR 7.500 14.289 2/15/2024 Denbury Resources Inc DNR 9.250 18.272 3/31/2022 Denbury Resources Inc DNR 7.750 17.945 2/15/2024 Denbury Resources Inc DNR 7.500 14.289 2/15/2024 Diamond Offshore Drilling DOFSQ 5.700 9.183 10/15/2039 Diamond Offshore Drilling DOFSQ 3.450 10.625 11/1/2023 Diamond Offshore Drilling DOFSQ 7.875 11.313 8/15/2025 ENSCO International Inc VAL 7.200 8.890 11/15/2027 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 12.000 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 9.375 1.093 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 12.181 5/15/2026 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 1.250 11/29/2024 Echo Global Logistics Inc ECHO 2.500 99.750 5/1/2020 EnLink Midstream Partners LP ENLK 6.000 24.000 N/A Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 1.341 0.072 1/30/2037 Evergy Kansas Central Inc EVRG 5.100 99.995 7/15/2020 Exantas Capital Corp XAN 4.500 50.000 8/15/2022 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 17.765 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 19.331 7/15/2023 Extraction Oil & Gas Inc XOG 7.375 13.772 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 13.083 2/1/2026 Extraction Oil & Gas Inc XOG 7.375 13.942 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 13.089 2/1/2026 FTS International Inc FTSINT 6.250 24.429 5/1/2022 Federal Farm Credit Banks Funding Corp FFCB 2.020 99.426 11/4/2025 Federal Farm Credit Banks Funding Corp FFCB 1.630 99.463 8/5/2022 Federal Farm Credit Banks Funding Corp FFCB 1.850 99.472 2/4/2025 Federal Farm Credit Banks Funding Corp FFCB 1.600 99.457 2/4/2022 Federal Farm Credit Banks Funding Corp FFCB 2.440 99.501 8/6/2029 Federal National Mortgage Association FNMA 2.150 99.745 8/3/2026 Federal National Mortgage Association FNMA 1.560 99.663 8/4/2021 Fenix Marine Service Holdings Ltd NOLSP 8.000 40.788 1/15/2024 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 Corp FELP 11.500 2.646 4/1/2023 Forum Energy Technologies FET 6.250 32.540 10/1/2021 Frontier Communications Corp FTR 11.000 30.970 9/15/2025 Frontier Communications Corp FTR 10.500 30.500 9/15/2022 Frontier Communications Corp FTR 8.750 26.970 4/15/2022 Frontier Communications Corp FTR 7.125 26.970 1/15/2023 Frontier Communications Corp FTR 7.625 28.375 4/15/2024 Frontier Communications Corp FTR 6.250 27.250 9/15/2021 Frontier Communications Corp FTR 6.875 27.100 1/15/2025 Frontier Communications Corp FTR 7.000 27.500 11/1/2025 Frontier Communications Corp FTR 9.250 27.250 7/1/2021 Frontier Communications Corp FTR 8.875 28.500 9/15/2020 Frontier Communications Corp FTR 10.500 30.520 9/15/2022 Frontier Communications Corp FTR 11.000 29.500 9/15/2025 Frontier Communications Corp FTR 6.800 25.324 8/15/2026 Frontier Communications Corp FTR 11.000 31.179 9/15/2025 Frontier Communications Corp FTR 10.500 30.875 9/15/2022 GameStop Corp GME 6.750 77.116 3/15/2021 GameStop Corp GME 6.750 77.475 3/15/2021 Global Eagle Entertainment ENT 2.750 7.625 2/15/2035 Gogo Inc GOGO 6.000 74.554 5/15/2022 Goldman Sachs Group Inc/The GS 5.375 93.125 N/A Goodman Networks Inc GOODNT 8.000 40.081 5/11/2022 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 63.644 9/30/2021 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 66.449 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 Guitar Center Inc GTRC 13.000 40.001 4/15/2022 Hertz Corp/The HTZ 6.250 20.020 10/15/2022 Hertz Corp/The HTZ 7.625 37.784 6/1/2022 Hertz Corp/The HTZ 6.000 14.185 1/15/2028 Hertz Corp/The HTZ 5.500 15.654 10/15/2024 Hertz Corp/The HTZ 5.500 14.590 10/15/2024 Hertz Corp/The HTZ 7.625 37.335 6/1/2022 Hertz Corp/The HTZ 7.125 15.453 8/1/2026 Hertz Corp/The HTZ 7.125 16.613 8/1/2026 Hertz Corp/The HTZ 6.000 16.112 1/15/2028 Hi-Crush Inc HCR 9.500 6.372 8/1/2026 Hi-Crush Inc HCR 9.500 6.367 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 29.301 10/15/2022 HighPoint Operating Corp HPR 8.750 48.000 6/15/2025 International Wire Group Inc ITWG 10.750 75.288 8/1/2021 International Wire Group Inc ITWG 10.750 75.047 8/1/2021 JC Penney Corp Inc JCP 6.375 3.622 10/15/2036 JC Penney Corp Inc JCP 7.625 2.977 3/1/2097 JC Penney Corp Inc JCP 7.400 5.028 4/1/2037 JC Penney Corp Inc JCP 8.625 9.112 3/15/2025 JC Penney Corp Inc JCP 7.125 1.915 11/15/2023 JC Penney Corp Inc JCP 8.625 8.861 3/15/2025 JC Penney Corp Inc JCP 6.900 1.918 8/15/2026 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 2.000 10/15/2025 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 7.750 10/15/2025 KLX Energy Services Holdings Inc KLXE 11.500 37.625 11/1/2025 KLX Energy Services Holdings Inc KLXE 11.500 55.500 11/1/2025 KLX Energy Services Holdings Inc KLXE 11.500 37.219 11/1/2025 LSC Communications Inc LKSD 8.750 18.250 10/15/2023 LSC Communications Inc LKSD 8.750 5.453 10/15/2023 Liberty Media Corp LMCA 2.250 49.035 9/30/2046 LoanCore Capital Markets LLC / JLC Finance Corp JEFLCR 6.875 94.750 6/1/2020 Lonestar Resources America LONE 11.250 11.107 1/1/2023 Lonestar Resources America LONE 11.250 11.140 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 40.716 2/15/2021 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 40.056 2/15/2021 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 40.056 2/15/2021 Mashantucket Western Pequot Tribe MASHTU 7.350 14.275 7/1/2026 McClatchy Co/The MNIQQ 6.875 25.000 7/15/2031 McClatchy Co/The MNIQQ 6.875 2.000 3/15/2029 McClatchy Co/The MNIQQ 7.150 2.000 11/1/2027 McDermott Technology Americas Inc / McDermott Technology US Inc MDR 10.625 5.000 5/1/2024 McDermott Technology Americas Inc / McDermott Technology US Inc MDR 10.625 4.762 5/1/2024 Men's Wearhouse Inc/The TLRD 7.000 40.973 7/1/2022 Men's Wearhouse Inc/The TLRD 7.000 41.951 7/1/2022 MetLife Inc MET 5.250 89.500 N/A Morgan Stanley MS 5.550 90.737 N/A Murray Energy Corp MURREN 12.000 0.001 4/15/2024 Murray Energy Corp MURREN 12.000 0.593 4/15/2024 NWH Escrow Corp HARDWD 7.500 52.606 8/1/2021 NWH Escrow Corp HARDWD 7.500 52.606 8/1/2021 Nabors Industries Inc NBR 5.750 22.166 2/1/2025 Nabors Industries Inc NBR 4.625 63.021 9/15/2021 Nabors Industries Inc NBR 5.100 26.515 9/15/2023 Nabors Industries Inc NBR 5.500 30.434 1/15/2023 Nabors Industries Inc NBR 0.750 11.250 1/15/2024 Nabors Industries Inc NBR 5.750 22.315 2/1/2025 Nabors Industries Inc NBR 5.750 22.439 2/1/2025 Neiman Marcus Group LLC/The NMG 7.125 23.122 6/1/2028 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 8.197 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 26.000 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 8.076 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 8.298 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 25.476 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 7.893 10/25/2024 Neiman Marcus Group Ltd LLC NMG 8.000 54.000 10/15/2021 Neiman Marcus Group Ltd LLC NMG 8.000 53.875 10/15/2021 New Gulf Resources LLC/ NGR Finance Corp NGREFN 12.250 3.876 5/15/2019 Nine Energy Service Inc NINE 8.750 21.124 11/1/2023 Nine Energy Service Inc NINE 8.750 21.175 11/1/2023 Nine Energy Service Inc NINE 8.750 21.546 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 12.205 3/15/2022 Oasis Petroleum Inc OAS 6.250 13.003 5/1/2026 Oasis Petroleum Inc OAS 6.875 13.623 1/15/2023 Oasis Petroleum Inc OAS 2.625 10.125 9/15/2023 Oasis Petroleum Inc OAS 6.500 16.727 11/1/2021 Oasis Petroleum Inc OAS 6.250 12.880 5/1/2026 Omnimax International Inc EURAMX 12.000 74.442 8/15/2020 Omnimax International Inc EURAMX 12.000 74.405 8/15/2020 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 57.018 6/1/2021 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 57.018 6/1/2021 PDC Energy Inc PDCE 6.250 63.260 12/1/2025 PHH Corp PHH 6.375 61.005 8/15/2021 Party City Holdings Inc PRTY 6.625 8.309 8/1/2026 Party City Holdings Inc PRTY 6.125 9.619 8/15/2023 Party City Holdings Inc PRTY 6.625 8.937 8/1/2026 Party City Holdings Inc PRTY 6.125 10.774 8/15/2023 Pioneer Energy Services Corp PESX 6.125 1.000 3/15/2022 Pride International LLC VAL 7.875 7.823 8/15/2040 Principal Financial Group PFG 4.700 88.577 5/15/2055 Pyxus International Inc PYX 9.875 54.000 7/15/2021 Pyxus International Inc PYX 9.875 19.604 7/15/2021 Pyxus International Inc PYX 9.875 18.557 7/15/2021 QEP Resources Inc QEP 6.875 55.983 3/1/2021 QEP Resources Inc QEP 5.250 38.083 5/1/2023 QEP Resources Inc QEP 5.375 48.479 10/1/2022 Quorum Health Corp QHC 11.625 17.250 4/15/2023 RJ Reynolds Tobacco Co/NC BATSLN 6.875 99.766 5/1/2020 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products REV 5.750 46.659 2/15/2021 Revlon Consumer Products REV 6.250 21.614 8/1/2024 Rolta LLC RLTAIN 10.750 6.702 5/16/2018 SESI LLC SPN 7.125 27.324 12/15/2021 SESI LLC SPN 7.750 17.583 9/15/2024 SESI LLC SPN 7.125 50.021 12/15/2021 SM Energy Co SM 6.125 34.970 11/15/2022 SM Energy Co SM 1.500 46.800 7/1/2021 SM Energy Co SM 5.000 31.396 1/15/2024 Sable Permian Resources Land LLC / AEPB Finance AMEPER 7.375 0.932 11/1/2021 Sable Permian Resources Land LLC / AEPB Finance AMEPER 7.375 0.932 11/1/2021 SanDisk LLC SNDK 0.500 84.613 10/15/2020 Sanchez Energy Corp SNEC 7.250 1.040 2/15/2023 Sanchez Energy Corp SNEC 6.125 0.600 1/15/2023 Sanchez Energy Corp SNEC 7.250 0.986 2/15/2023 SandRidge Energy Inc SD 7.500 0.500 2/15/2023 Sears Holdings Corp SHLD 6.625 9.875 10/15/2018 Sears Holdings Corp SHLD 8.000 1.063 12/15/2019 Sears Holdings Corp SHLD 6.625 3.298 10/15/2018 Sears Roebuck Acceptance SHLD 7.500 1.000 10/15/2027 Sears Roebuck Acceptance SHLD 7.000 0.819 6/1/2032 Sears Roebuck Acceptance SHLD 6.500 1.000 12/1/2028 Sears Roebuck Acceptance SHLD 6.750 0.610 1/15/2028 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 20.006 4/15/2025 Summit Midstream Holdings LLC / Summit Midstream Finance Corp SUMMPL 5.500 24.309 8/15/2022 Summit Midstream Partners LP SMLP 9.500 10.075 N/A Talos Production LLC / Talos Production Finance Inc TAENLL 11.000 55.000 4/3/2022 Talos Production LLC / Talos Production Finance Inc TAENLL 11.000 60.036 4/3/2022 Talos Production LLC / Talos Production Finance Inc TAENLL 11.000 60.036 4/3/2022 Talos Production LLC / Talos Production Finance Inc TAENLL 11.000 60.036 4/3/2022 Teligent Inc/NJ TLGT 4.750 38.750 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 95.405 5/14/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 88.800 5/29/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 91.760 6/11/2020 Tesla Energy Operations Inc/DE TSLAEN 3.600 93.833 5/21/2020 Tilray Inc TLRY 5.000 33.500 10/1/2023 Transworld Systems Inc TSIACQ 9.500 24.250 8/15/2021 Transworld Systems Inc TSIACQ 9.500 24.250 8/15/2021 Tupperware Brands Corp TUP 4.750 40.096 6/1/2021 Tupperware Brands Corp TUP 4.750 41.453 6/1/2021 Tupperware Brands Corp TUP 4.750 41.453 6/1/2021 UCI International LLC UCII 8.625 4.780 2/15/2019 Ultra Resources Inc/US UPL 7.125 0.050 4/15/2025 Ultra Resources Inc/US UPL 7.125 1.273 4/15/2025 Unit Corp UNTUS 6.625 6.653 5/15/2021 ViacomCBS Inc VIAC 4.300 101.432 2/15/2021 W&T Offshore Inc WTI 9.750 32.558 11/1/2023 W&T Offshore Inc WTI 9.750 31.463 11/1/2023 Western Alliance Bank WAL 5.000 93.351 7/15/2025 Whiting Petroleum Corp WLL 6.625 10.125 1/15/2026 Whiting Petroleum Corp WLL 5.750 10.125 3/15/2021 Whiting Petroleum Corp WLL 6.250 10.200 4/1/2023 Whiting Petroleum Corp WLL 6.625 6.750 1/15/2026 Whiting Petroleum Corp WLL 6.625 9.963 1/15/2026 Windstream Services LLC / Windstream Finance Corp WIN 10.500 5.875 6/30/2024 Windstream Services LLC / Windstream Finance Corp WIN 9.000 5.250 6/30/2025 Windstream Services LLC / Windstream Finance Corp WIN 9.000 5.326 6/30/2025 Windstream Services LLC / Windstream Finance Corp WIN 10.500 3.000 6/30/2024 Windstream Services LLC / Windstream Finance Corp WIN 7.500 1.083 6/1/2022 Windstream Services LLC / Windstream Finance Corp WIN 6.375 2.500 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 6.375 1.074 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.750 5.047 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 8.750 5.047 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 7.750 1.539 10/1/2021 rue21 inc RUE 9.000 1.305 10/15/2021 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 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 ***