/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200506.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 6, 2020, Vol. 24, No. 126 Headlines GOLD'S GYM: Expects to File Largely Consensual Plan 3301 HO: Seeks to Hire Eric A. Liepins as Legal Counsel AEGIS 42: District Court Has Jurisdiction on Stephen Park Suit ALIGHT SOLUTIONS: S&P Alters Outlook to Negative, Affirms 'B' ICR ALTA MESA: Unsecured & Senior Note Claimants to Share $5M in Plan AMAGAZI LLC: May 22 Plan & Disclosure Hearing Set ARCHDIOCESE OF NEW ORLEANS: Fitch Cuts LT IDR to 'D' on Bankruptcy ARCHDIOCESE OF NEW ORLEANS: Heller Draper Represents Apostolates ARCTIC GLACIER: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. ASTERIA EDUCATION: Sues SBA for Rejecting Coronavirus Relief Loan ASTRIA HEALTH: Cancels Sale of Hospitals AVIS BUDGET: Moody's Rates $400MM Senior Secured Notes 'Ba2' BIOSTAGE INC: Secures $404,221 PPP Loan from Bank of America BLACKRIDGE TECHNOLOGY HOLDINGS: U.S. Trustee Appoints Committee BLACKRIDGE TECHNOLOGY INT'L: U.S. Trustee Appoints Committee BLUESTEM BRANDS: Creditors' Committee Members Disclose Claims BOY SCOUTS: Deadline to Respond to G.M. Suit Extended to August 17 BOY SCOUTS: Has Until August 17 to Respond to SHC Complaint BREDA LLC: To Seek Confirmation of Reorgnization Plan on May 28 BRIGHT MOUNTAIN: CEO Agrees to Suspend Salary Hike Amid Pandemic BSI LLC: Case Summary & Unsecured Creditor CAESARS ENTERTAINMENT: S&P Lowers ICR to 'B' on Elevated Leverage CALAIS REGIONAL: Lawmakers Push to Make PPP Relief Available CAREMORE MANAGERS: Voluntary Chapter 11 Case Summary CC HOLDINGS: District Court Rejects Bid to Dismiss Appeal CINEMEX HOLDINGS: Seeks to Hire Bast Amron as Co-Counsel CINEMEX HOLDINGS: Seeks to Hire Quinn Emanuel as Legal Counsel CLYDE J. SUTTON, JR: Proposes Sale of Shelbyville Property COMPASSIONATE HOMECARE: Voluntary Chapter 11 Case Summary CONSERVICE GROUP: S&P Assigns 'B-' ICR; Outlook Stable CREATIVE ARTISTS: Moody's Cuts CFR to B3 & Rates New Term Loan B3 CROWN HOLDINGS: S&P Alters Outlook to Negative, Affirms 'BB+' ICR DAIRY FARMERS: Moody's Alters Outlook to Stable on Acquisition DALTON LOGISTICS: U.S. Trustee Unable to Appoint Committee DECLARATION BREWING: Faces Eviction From Landlord DEL MONTE FOODS: S&P Assigns Prelim CCC+ Rating to Secured Bonds DETROIT, MI: S&P Alters GO Debt Rating Outlook to Negative ECHO ENERGY: June 15 Auction of Substantially All Assets Set ELDORADO RESORTS: S&P Lowers ICR to 'B' on Uncertain Recovery EVERMILK LOGISTICS: Unsec. Creditors to Get Full Payment in Plan EVOQUA WATER: S&P Alters Outlook to Stable, Affirms 'B' ICR FABRICMASTER LLC: U.S. Trustee Unable to Appoint Committee FARMERS GRAIN: Trial Required in Case Trustee Dispute v CFL et al. FCPR ACQUISITION: Trustee's $30K Sale of Trucks to DC Foam Approved FERRO CORP: S&P Lowers ICR to 'B+' Amid Macroeconomic Uncertainty FREEDOM MORTGAGE: Fitch Keeps 'BB-' LT IDR on Watch Negative G I REAL ESTATE: Voluntary Chapter 11 Case Summary GC EOS BUYER: S&P Downgrades ICR to 'CCC+' on Elevated Leverage GENWORTH LIFE: Fitch Cuts IFS Rating to CCC on Coronavirus Risk GOLD'S GYM: Case Summary & Largest Unsecured Creditors GOLD'S GYM: Says Bankruptcy Won't Impact Locations GRAY TELEVISION: Moody's Alters Outlook on B1 CFR to Stable HANESBRANDS INC: S&P Rates $500MM Senior Unsecured Notes 'BB' HAWAIIAN AIRLINES 2013-1: Fitch Cuts Sr. Secured Rating to 'BB+' HOOD LANDSCAPE: Time to Object to Auction of Assets Shortened ICE HOUSE: Seeks to Hire Magee Goldstein as Legal Counsel IGLESIA TABERNACULO: Case Summary & 2 Unsecured Creditors ISE PROFESSIONAL: Voluntary Chapter 11 Case Summary JJE INC: Plan & Disclosures Hearing Reset to July 22 JONES LEASE: Plan & Disclosure Statement Set for June 2 Hearing JOSH CREWS: Case Summary & 20 Largest Unsecured Creditors KEYSTONE PIZZA: Voluntary Chapter 11 Case Summary KIM DOLLEH CENTER: Case Summary & 3 Unsecured Creditors LEE HI ASSOCIATES: Seeks to Hire Magee Goldstein as Legal Counsel LONE STAR: Voluntary Chapter 11 Case Summary MACHINERY TRANSPORT: R&D Recusal Bid vs Judge Volk Has No Basis MICHIGAN FINANCE AUTHORITY: S&P Alters Bonds Rating Outlook to Neg. MITCHELL TOPCO: S&P Affirms 'B-' ICR; Outlook Stable MONTICELLO PIZZA: May 27 Plan & Disclosures Hearing Set MUSEUM OF AMERICAN JEWISH: Furloughs Employees Amid Pandemic NATIONAL MARINA: Case Summary & 8 Unsecured Creditors NFP CORP: Moody's Rates $300MM Senior Secured Notes 'B2' NORTH TEXAS MARINA: Case Summary & 17 Unsecured Creditors NUSTAR ENERGY: S&P Alters Outlook to Stable, Affirms 'BB-' ICR OMG MH HOLDINGS: Taps Brennan Manna as Legal Counsel PARCELS B AND C: U.S. Trustee Unable to Appoint Committee PENOBSCOT VALLEY: Lawmakers Push to Make PPP Relief Available PIERLESS FISH: $450K Sale of Assets to Baldor Specialty Approved PIXIUS COMMUNICATIONS: $4.1MM Sale to LTD Broadband Okayed POLYONE CORP: S&P Alters Outlook to Negative, Rates New Debt 'BB-' QUORUM HEALTH: Mudrick Seeks Appointment of Equity Committee QUORUM HEALTH: Richards, Milbank Represent Term Lender Group RADIOLOGY PARTNERS: S&P Downgrades ICR to 'B-'; Outlook Stable RAI CONCRETE: Voluntary Chapter 11 Case Summary RE/MAX LLC: S&P Alters Outlook to Negative, Affirms 'BB' ICR RRNB 1290: Voluntary Chapter 11 Case Summary RRNB 8400: Voluntary Chapter 11 Case Summary RUBIE’S COSTUME: Seeks Chapter 11 as Facilities Non-Essential RUSTY GOLD: U.S. Trustee Appoints Creditors' Committee SAMSONITE INTERNATIONAL: S&P Cuts Rating on Credit Facilities to BB SFKR LLC: May 26 Disclosure Statement Hearing Set SILVER CREEK: June 4 Plan Confirmation Hearing Set SISTERS HOME: $1.2M Sale of Tuckerton Property to Downing Approved SIWF HOLDINGS: Moody's Lowers CFR to B3, Outlook Negative SKLAR EXPLORATION: Holland, Balch Updates on Pruet Oil, 2 Others SOS TOWING: $190K Sale of 5 Vehicles to Speed Approved SPANISH BROADCASTING: Receives $6.5 Million PPP Unsecured Loan STAR PETROLEUM: May 26 Disclosure Statement Hearing Set STRUCTURED CABLING: U.S. Trustee Unable to Appoint Committee TOPGOLF INT'L: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. TPRO ACQUISITION: S&P Alters Outlook to Negative, Affirms B- ICR TWIN RIVER: Moody's Rates $275MM Term Loan Add-On 'Ba2' ULTIMATE SOFTWARE: S&P Affirms 'B-' ICR on Merger With Kronos Inc. VAIL RESORTS: S&P Assigns 'BB' ICR; Outlook Negative VERMONT COUNCIL OF DEVELOPMENT: S&P Alters Outlook to Stable VERRA MOBILITY: S&P Alters Outlook to Negative, Affirms 'B+' ICR WELBILT INC: S&P Downgrades ICR to 'CCC+'; Outlook Negative YUMA ENERGY: May 29 Auction of All Assets Set YUMA ENERGY: U.S. Trustee Appoints Creditors' Committee ********* GOLD'S GYM: Expects to File Largely Consensual Plan ---------------------------------------------------- Privately-held Gold's Gym sought bankruptcy protection, hoping to file a consensual Chapter 11 plan that will allow it to exit bankruptcy in August and reopen majority of stores shuttered by the Covid-19 pandemic as soon as the lockdowns are lifted. Founded in 1965 by Joe Gold in Venice Beach, California, the Gold's Gym and its affiliates presently boast one of the largest networks of company-owned and franchised fitness centers in the world. The business began its franchise operations in the early 1980s and has grown into a global icon with nearly 700 locations serving approximately 3 million people across six continents each day. Today, the Debtors own and operate approximately 95 gyms domestically, and hold franchise agreements for more than 600 gyms domestically and internationally. Before the temporary closures caused by the COVID-19 pandemic, the Debtors employed over 4,600 employees at the corporate offices and company-owned gyms. As of the Petition Date, the Debtors employ approximately 111 active employees, of whom approximately 107 are full-time salaried and hourly employees and approximately 4 are part-time employees, and 4,597 furloughed employees, of whom approximately 1,090 are full-time salaried and hourly employees and approximately 3,507 are part-time employees. The Debtors' majority owner -- TRT Holdings, Inc. -- acquired the business in 2004. Events Leading Up to the Bankruptcy Filing CEO Adam Zeitsiff explains that while many factors led to the need for bankruptcy relief, no single factor caused more harm to the Debtors' business than the current COVID-19 pandemic, emergency declarations and corresponding guidelines, shelter-in-place or stay-at-home orders from local, state, federal and, in some cases, international or foreign authorities. In mid-March, in response to the growing COVID-19 pandemic, the Debtors were forced to temporarily close all company-owned gyms, and, on information and belief, all or substantially all of the franchisees around the U.S. followed suit within days or weeks. As of the Petition Date, all company-owned gyms remain closed. As a result, the Debtors have been unable to collect membership dues and have no other revenues being derived from their gym operations. Additionally, because a majority of the Debtors' franchise locations remain closed during the pandemic, the Debtors are not receiving ordinary franchising fees. In light of the sudden and widespread closures brought on by the pandemic, the Debtors began contacting their landlords in late March and early April to advise that they were unable to make ordinary rental payments in April and to request rent abatements or concessions during the temporary closures. As of the filing, the Debtors have continued discussions with the majority of their landlords and believe they will be able to cure and assume (with modifications) the majority of the leases for their company-owned gyms. Unfortunately, the Debtors anticipated that they would not be able to reach agreements with all of their landlords. Before the filing of these Cases, the Debtors determined that approximately 32 of their company-owned gyms could not be renegotiated to a level that would allow the gyms to be maintained to the high "Gold's Gym" standard. For that reason, the Debtors decided to close those gyms and reject those 32 leases as part of this bankruptcy filing. The Debtors have already notified their pre-petition lenders about this decision and believe that it is in the best interest of the bankruptcy estates to abandon any remaining assets in those locations. While most of the equipment in these 32 locations was removed before the commencement of these Cases, the Company believes that the residual value of any equipment remaining in those locations is of inconsequential value to the estates and should be abandoned in conjunction with the lease rejections. Goal of the Bankruptcy Case The goal of the bankruptcy is to ensure the strength and continuity of the Debtors' business so that there is no disruption to members, franchisees or licensees once the Debtors and their franchisees are able to reopen their respective gyms around the nation and the world. Before the commencement of these Cases, the Debtors negotiated with TRT Holdings or its affiliate, the majority owner of GGI Holdings, LLC, and its senior secured lenders regarding terms of a consensual plan. While the terms are still being finalized, we expect to file a largely consensual plan within the first week of the Bankruptcy Cases, and that plan will effectuate a sale or similar restructuring transaction to TRT Holdings or its affiliate. The Debtors believe the terms of this transaction will be fair and reasonable given current state of the Debtors' business and the surrounding circumstances, because the consideration will be sufficient to: (i) satisfy obligations to the Debtors' senior secured lenders,(ii) satisfy any post-petition financing obligations incurred during these Bankruptcy Cases, (iii) cure monetary defaults with landlords in gyms that will be maintained, (iv) pay all operating expenses during the course of the Bankruptcy Cases; and (v) establish a settlement fund from general unsecured creditors may receive meaningful distributions on their claims. Once filed, the Debtors will seek approval of the disclosure statement as soon as practicable, preferably in mid-June, with the goal of having the plan confirmed by the end of July so that the business can emerge as the country begins to recover from the COVID-19 pandemic. Meanwhile, during the course of these Bankruptcy Cases, the Debtors intend reopen their locations as soon as state, local and federal authorities will allow, and soon as the Debtors' own reopening safety standards are met, so that the business can reemerge as the world begins to recover from the COVID-19 pandemic. $9 Million Financing Accordingly, the Debtors requested a debtor-in-possession loan from its majority owner TRT Holdings (or, in its capacity as debtor-in-possession financing lender, the "DIP Lender"). The Debtors intend to borrow enough funds to operate in the ordinary course of business during these bankruptcy Cases. The Debtors anticipate needing approximately $3.5million in new financing during the first 14 days of these Cases, $9 million in the first 30 days, and up to $20million over the course of the 13-week budget period. The DIP Credit Agreement will include specific milestones for the conclusion of these Cases, including the filing of a plan by May 15, 2020, approval of a disclosure statement by June 15, 2020, and confirmation of a plan by August 1, 2020. Based on the pre-petition negotiations among the parties, the Debtors fully anticipates to beat these milestones to emerge quickly under a confirmed chapter 11 plan About Gold's Gym Founded in 1965, Gold's Gym operates a network of company-owned and franchised fitness centers. It owns and operates approximately 95 gyms domestically, and holds franchise agreements for more than 600 gyms domestically and internationally. Its majority owner -- TRT Holdings, Inc. -- acquired the business in 2004. GGI Holdings, LLC, Gold's Gym International, Inc. and other related entities sought Chapter 11 protection (Bankr. 20-31318) on May 4, 2020. GGI Holdings was estimated to have assets and debt of $50 million to $100 million The Hon. Harlin Dewayne Hale is the case judge. The Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC Group Inc. is the claims agent. 3301 HO: Seeks to Hire Eric A. Liepins as Legal Counsel ------------------------------------------------------- 3301 HO, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Eric A. Liepins, P.C. as its legal counsel. The firm will advise Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm will be paid at these rates: Eric Liepins, Esq. $275 per hour Paralegals/Legal Assistants $30 to $50 per hour Liepins received a retainer of $5,000, plus the filing fee. Eric Liepins, Esq., disclosed in court filings that his firm does not represent any interest adverse to Debtor's bankruptcy estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Telefax: (972) 991-5788 E-mail: eric@ealpc.com About 3301 HO LLC 3301 HO, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-41586) on April 30, 2020. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $50,001 and $100,000. Eric A. Liepins, P.C., is the Debtor's legal counsel. AEGIS 42: District Court Has Jurisdiction on Stephen Park Suit -------------------------------------------------------------- District Judge Brian M. Cogan denied the Plaintiffs' motion for reconsideration in the case captioned STEPHEN PARK et al., Plaintiffs, v. EDWARD SONG et al., Defendants, No. 20-cv-77 (BMC) (E.D.N.Y.). Upon filing a bankruptcy petition in the United States Bankruptcy Court for the Eastern District of New York, defendant and debtor Aegis 42, LLC removed this case from state court to the New York District Court. Under 28 U.S.C. Section 1334(b), "the district courts shall have original but not exclusive jurisdiction of all civil proceedings. . . related to cases under Title 11." The present case being "related to" the newly-filed bankruptcy case under title 11, the District Court has jurisdiction over the removed proceedings under section 1334. Upon removal, Judge Cogan referred the case to the Bankruptcy Court pursuant to the standing orders of referral in this district, rejecting plaintiffs' argument, among other things, for mandatory abstention in favor of the state court. Judge Cogan held that mandatory abstention did not apply because the case included claims under the Lanham Act against non-debtors. Under 28 U.S.C. section 1334(c)(2), if a "related-to" state court action is otherwise removable without regard to bankruptcy jurisdiction, i.e., it could have been "commenced in a court of the United States absent [bankruptcy] jurisdiction under this section," then mandatory abstention does not apply. Plaintiffs have moved for reconsideration on the ground that mandatory abstention does apply because the Lanham Act claims are against non-debtors. Under the language of the statute, that does not matter. It was plaintiffs' choice to assert both Lanham Act claims against some parties and state law claims against all parties in the same state court action. That made the case removable under the Lanham Act without regard to bankruptcy jurisdiction, as the state law claims arose out of the same transactions as the Lanham Act claims. In other words, even if Aegis 42 had not filed under Chapter 11, the state court case would still have been removable. It does not become less removable, i.e., subject to mandatory abstention, just because Aegis 42 filed a bankruptcy petition. Plaintiffs' motion for reconsideration is therefore denied. A copy of the Court's Memorandum Decision and Order dated March 9, 2020 is available at https://bit.ly/3b3ckZO from Leagle.com. Stephen Park, Thomas Yang, Paul Lee, Andrew Chang, all individually and on behalf of Korilla BBQ, LLC & Eric Yu, Plaintiffs, represented by Meyer Y. Silber , The Silber Law Firm, LLC & Samuel Goldman , Samuel Goldman & Associates. Aegis 42, LLC, Defendant, represented by Lawrence F. Morrison -- marcoscb@m-t-law.com -- Morrison Tenenbaum PLLC. Aegis 42, LLC filed for chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 19-47698) on Dec. 23, 2019, and is represented by Lawrence F. Morrison, Esq. of Morrison Tenenbaum, LLC. ALIGHT SOLUTIONS: S&P Alters Outlook to Negative, Affirms 'B' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Lincolnshire, Ill.-based human capital management (HCM) solutions provider Alight to negative from stable and affirmed its 'B' issuer rating on the company. S&P also affirmed its existing issue-level ratings and assigned its 'B' issue-level rating and '3' recovery rating to the proposed $250 million senior secured notes. A challenging macroeconomic backdrop will soften demand in 2020. "We expect a difficult operating environment for Alight will weaken demand for its cloud-based HCM solutions in 2020, pressuring EBITDA and raising leverage from 7.4x at year-end 2019. Our economists now forecast negative U.S. and global GDP growth for 2020, with a spike in unemployment, and while the extent and duration of the recession on Alight's creditworthiness is unknown, we believe the company's leverage will increase and exceed our 8x downgrade threshold in 2020, and the timeline for recovery is profoundly uncertain. Organic revenues will likely decline in the mid- to high-single-digit percent area in 2020 as customers defer new installations of cloud-based HCM solutions and reduce volumes through headcount reductions. We anticipate client requests for price discounts and flexible payment terms could increase industry wide," S&P said. The negative outlook reflects the risk of a prolonged period of business disruption resulting from the COVID-19 pandemic and global recession, which continues to weaken credit measures. S&P expects mid- to high-single-digit percent area organic revenue declines and gross adjusted leverage to temporarily exceed 8x in 2020. "We could lower our rating on Alight over the next 12 months if operating performance falls short of our expectations due to a prolonged global recession leading us to expect adjusted leverage will remain over 7.5x. This could also occur if the company engages in shareholder-friendly financial policies, such as debt-funded dividends or acquisitions," S&P said. "We could revise our outlook to stable if the company can preserve its credit measures through the current global recession such that we forecast adjusted leverage will remain below 7.5x," S&P said. ALTA MESA: Unsecured & Senior Note Claimants to Share $5M in Plan ----------------------------------------------------------------- Alta Mesa Resources, Inc. and Its AMH and SRII debtor affiliates filed a Joint Plan of Liquidation and a Disclosure Statement on April 17, 2020. The AMR/AMH Debtors are commencing this solicitation to implement the Plan, pursuant to which the AMR/AMH Debtors will distribute the estates’ remaining assets to Holders of Claims and Interests and proceed with the orderly wind down of the AMR/AMH Debtors' estates. The Plan embodies the terms of the Global Settlement. The Global Settlement represents a good faith compromise of all Claims, controversies and causes of action among the AMH Debtors, the AMR Debtors and SRII Debtors, the KFM Debtors, the Prepetition AMH RBL Agent, the Committee, the Ad Hoc Noteholder Group, BCE, and the KFM Agent. The terms of the Global Settlement are embodied in the Plan (and in the KFM Debtors' plan), and include the following: * Holders of Class 5 AMH General Unsecured Claims and Class 4 Prepetition Senior Notes Claims will receive Cash in the aggregate amount of $5 million, shared evenly between such Classes. $250,000 of such amount was paid to the Holders of Class 4 Prepetition Senior Notes by Purchaser on April 9, 2020 (at closing of the Sale), and the Purchaser and Ad Hoc Noteholder Group exchanged mutual releases set forth in the Supplemental Sale Order. * Holders of Class 2 Prepetition AMH RBL Claims will receive all of the AMH Debtors' other Cash and assets, except for the causes of action to be contributed to the AMH Litigation Trust and proceeds thereof. * The Committee and Ad Hoc Noteholder Group agreed not to pursue their potential objections to the Sale and the $99 million Interim Distribution to the Prepetition AMH RBL Agent. * The parties agreed that all claims of the AMH Debtors not released under the Plan would vest in the AMH Litigation Trust, of which the Holders of Prepetition Senior Notes Claims and the Prepetition AMH RBL Deficiency Claim would be beneficiaries. On April 9, 2020, the Debtors consummated the Sale pursuant to the terms and conditions of the Purchase Agreement. Upon consummation of the Sale, the Net Sale Proceeds of the Sale were used to fund the Interim Distribution and placed into accounts established and maintained by the Debtors in accordance with and to the extent required under the Sale Order. The Net Sale Proceeds constitute AMH Distributable Cash. On the Effective Date, the Debtors will fund (a) from the AMR Distributable Cash (b) from the AMH Distributable Cash, and (c) from the SRII Distributable Cash. A full-text copy of the Disclosure Statement dated April 17, 2020, is available at https://tinyurl.com/y6wvwjqb from PacerMonitor at no charge. Counsel to AMR/AMH Debtors: LATHAM & WATKINS LLP George A. Davis Annemarie V. Reilly Brett M. Neve 885 Third Avenue New York, NY 10022 Telephone: (212) 906-1200 Facsimile: (212) 751-4864 – and – Caroline Reckler 330 North Wabash Avenue, Suite 2800 Chicago, IL 60611 Telephone: (312) 876-7700 Facsimile: (312) 993-9667 – and – Andrew Sorkin 555 Eleventh Street, Suite 1000 Washington, D.C. 20004 Telephone: (202) 637-2200 Facsimile: (202) 637-2201 – and – PORTER HEDGES LLP John F. Higgins Eric M. English Aaron J. Power M. Shane Johnson 1000 Main Street, 36th Floor Houston, Texas 77002 Telephone: (713) 226-6000 Fax: (713) 226-6248 About Alta Mesa Resources Alta Mesa Resources, Inc., is an independent energy company focused on the development and acquisition of unconventional oil and natural gas reserves in the Anadarko Basin in Oklahoma, and through Kingfisher Midstream, LLC, provides best-in-class midstream energy services, including crude oil and gas gathering, processing and marketing and produced water disposal to producers in the STACK play. Alta Mesa reported $1.4 billion in assets and $864 million in liabilities as of Dec. 31, 2018. Alta Mesa and six affiliates sought Chapter 11 protection(Bankr.S.D. Tex. Case No. 19-35133) on Sept. 11, 2019. The Hon. Marvin Isgur is the case judge. The Debtors tapped Porter Hedges LLP and Latham & Watkins LLP as attorneys; and Perella Weinberg Partners LP and its affiliate Tudor Pickering Holt & Co Advisors LP as investment banker. Prime Clerk LLC is the claims agent. AMAGAZI LLC: May 22 Plan & Disclosure Hearing Set ------------------------------------------------- On April 15, 2020, Debtor Amagazi, LLC filed with the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, a Disclosure Statement with respect to a Plan. On April 16, 2020, Judge Jeffrey P. Norman conditionally approved the Disclosure Statement and established the following dates and deadlines: * May 18, 2020, is fixed as the last day for filing written acceptances or rejections of the plan. * May 22, 2020, at 9:30 a.m. in Courtroom 403, 515 Rusk Street, Houston, Texas, is fixed for the hearing on final approval of the disclosure statement and for the hearing on confirmation of the plan. * May 18, 2020, is fixed as the last day for filing and serving written objections to the disclosure statement and confirmation of the plan. A copy of the order dated April 16, 2020, is available at https://tinyurl.com/y87y2qhw from PacerMonitor at no charge. About Amagazi LLC Amagazi LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-35476) on Sept. 30, 2019. At the time of the filing, the Debtor disclosed assets of between $100,001 and $500,000 and liabilities of the same range. The case is assigned to Judge Jeffrey P. Norman. The Debtor tapped the Law Office of Margaret M. McClure as its legal counsel. No official committee of unsecured creditors has been appointed in the Debtor's case. ARCHDIOCESE OF NEW ORLEANS: Fitch Cuts LT IDR to 'D' on Bankruptcy ------------------------------------------------------------------ Fitch Ratings has downgraded the Long-Term Issuer Default Rating of the Archdiocese of New Orleans to 'D' from 'A', and the rating on approximately $40.1 million in outstanding series 2017 fixed rate revenue bonds issued by the Louisiana Public Facilities Authority on behalf of the Archdiocese to 'CC' from 'A'. SECURITY The 2017 bonds are secured by payments made by the Authority and the source of these payments is solely a general unsecured obligation of the Archdiocese. There is a springing DSRF should the liquidity ratio fall below 1.0x. KEY RATING DRIVERS Analytical Conclusion The Issuer downgrade of the Issuer Default rating to 'D' reflects the announcement that the Archdiocese has filed for Chapter 11 bankruptcy, effective May 1, 2020. The downgrade of the revenue bond rating to 'CC' indicates that default on the bonds is probable. While the Archdiocese has made clear its intent to continue honoring its financial obligations, Fitch believes the Archdiocese's capacity for meeting its obligations may become impaired in the face of material obligations related to outstanding litigation regarding claims of sexual abuse, as well as its operating and financial vulnerability to prolonged impact from the coronavirus pandemic. Some limited safety may remain given the Archdioceses liquidity position, with approximately $140 million in unrestricted cash as of Dec. 31, 2019, against approximately $40 million in 2017 bonds, $44 million in unfunded pension obligation, and another $47 million in guaranteed debt on behalf of Saint Anthony's Gardens. Per its reported covenant calculations, the Archdiocese generated 3.45x coverage on the 2017 bonds debt service, and 1.55x coverage inclusive of 100% of the SAG guaranteed debt service. As of Dec. 31 2019 and per its liquidity covenant, the Archdiocese reported 3.64x unrestricted cash against its 2017 bonds, and 1.62x liquidity ratio inclusive of the bonds and 100% of the SAG debt. The Archdiocese cited coronavirus-related challenges in addition to liabilities related to sexual abuse claims in its bankruptcy petition. The recent outbreak of the coronavirus and related mitigation measures create an uncertain environment for U.S. nonprofits. Fitch's forward-looking analysis is informed by Fitch's common set of baseline and downside macroeconomic scenarios, and will evolve as needed during this dynamic period. Since March, the Archdiocese has moved in-person events online where possible and affiliated schools have been closed. Key Rating Drivers BANKRUPTCY FILING: The downgrade of the IDR to 'D' reflects the Archdioceses filing of a petition to commence proceedings under Chapter 11 of the United States Bankruptcy Code on May 1, 2020 in the United States Bankruptcy Court of Eastern Louisiana. The petition noted an intention to minimize disruption of operations, as well as intent to continue to meet most financial obligations, including those on the revenue bonds. DOWNGRADE OF SECURITY RATING: The downgrade of the series 2017 bonds to 'CC' indicates that default appears probable in the face of unknown and possibly significant financial and operating impacts from both unresolved abuse claims and the coronavirus pandemic. It also reflects the lack of debt service reserve and the unsecured security position of the 2017 bonds. POSSIBILITY OF MEETING FINANCIAL OBLIGATIONS: The voluntary petition included the Archdiocese's estimation that funds would be available for distribution to unsecured creditors, which include the series 2017 bondholders as well as individuals whose claims against the Archdiocese are premised on allegations of abuse. As of Dec. 31, 2019, the Archdiocese reported a favorable net asset position of $81.8 million, with nearly $160 million in 'readily marketable securities'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/upgrade: -- Indication that payment default or significant impairment of rated debt obligations appears imminent or has occurred. Factors that could, individually or collectively, lead to positive rating action/downgrade: -- Emergence from bankruptcy with sufficient liquidity intact, and in maintenance of full debt service payments. 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 The Roman Catholic Church of the Archdiocese of New Orleans has a long operating history. It was first established as a diocese in 1793, became an archdiocese in 1850, and is the second oldest archdiocese in the United States. The Archdiocese operates in eight civil parishes in metropolitan New Orleans, and encompasses 4,208 square miles and 112 church parishes. In addition to the parishes, it also supports and administers 79 schools, with an estimated enrollment of 34,182 (2019-2020 school year). Nursing homes and other community service facilities are also sponsored by the Archdiocese. The primary activities of the Archdiocese's Administrative Offices include the maintenance of the Deposit and Loan Fund, the administration of a centralized property and casualty insurance program, the investment of endowment funds, and the administration and funding of healthcare, auto insurance and retirement costs for priests of the Archdiocese. The 2017 bonds are the sole obligation of the Archdiocese corporate entity. Individual parishes, elementary and high schools, nursing homes, affordable senior living facilities, and other church-related agencies and institutions within the corporation's geographical boundaries are not consolidated within the reported Archdiocese corporate entity. Also not included are the fair market values of the churches, nursing homes, affordable senior living facilities, other properties in the parishes, rectories, schools belonging to the corporation, or The Archdiocese of New Orleans Indemnity, Inc. The Archdiocese does provide a guarantee on debt service related to approximately $47 million in debt related to the financing of the St. Anthony's Garden project. 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 Archdiocese of New Orleans has an Exposure to Social Impacts ESG score of 5 due to the rating impact from multiple public legal abuse claims underway, which is exacerbated by broader trends of declining religious support and church attendance in the U.S. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). ARCHDIOCESE OF NEW ORLEANS: Heller Draper Represents Apostolates ---------------------------------------------------------------- In the Chapter 11 cases of The Roman Catholic Church of the Archdiocese of New Orleans, the law firm of Heller, Draper, Patrick, Horn, & Manthey LLC submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the Apostolates. The Apostolates consist of 151 church parishes, schools, nursing homes, senior living facilities, and other community, service agencies and facilities listed on the attached Exhibit A. Academy of Our Lady All Saints Church Annunciation Church Annunciation Inn Apartments (Christopher Homes) Ascension of Our Lord Church Assumption of Mary Church Blessed Francis Xavier Seelos Church Blessed Sacrament-St. Joan of Arc Church Blessed Trinity Church Catholic Charities Archdiocese of New Orleans Catholic Foundation of the Archdiocese of New Orleans, Inc. Center of Jesus the Lord at Our Lady of Good Counsel Christ the King Church Christopher Homes, Inc. Christopher Inn (Christopher Homes) Clarion Herald Publishing Co., Inc. Corpus Christi-Epiphany Church Delille (Christopher Homes) Discalced Carmelite Nuns Divine Mercy Church Good Shepherd Parish St Stephen Church Hanmaum Korean Catholic Chapel Holy Family Church (Franklinton) Holy Family Church (Luling) Holy Name of Jesus Church The Apostolates are incorporated legal entities that possess their own employees, articles of incorporation, EIN numbers, and bank accounts separate from the Archdiocese. Directly or indirectly the Archdiocese or the Archbishop is the sole shareholder, member or partner of each Apostolate. An Ad Hoc Committee of the Apostolates was formed to address the concerns of the Apostolates, to advance the positions of the Apostolates as a group, and as necessary to defend the legal interests of the Apostolates in the Debtor's chapter 11 case. The Ad Hoc Committee agreed that it is in the best interest of the Apostolates to retain Heller Draper on behalf of all the Apostolates which would save costs and resources and further their interests to participate in this case as a group. Heller Draper is empowered to act on behalf of all Apostolates in the Debtor's bankruptcy case. As of May 1, 2020, the Apostolates, in their capacity as a collective group being represented by Heller Draper, did not own any equity securities of the Debtor. Counsel for the Apostolates can be reached at: Douglas S. Draper, Esq. William H. Patrick, III, Esq. Leslie A. Collins, Esq. Heller, Draper, Patrick, Horn, & Manthey LLC 650 Poydras Street, Suite 2500 New Orleans, LA 70130-6103 Tel: (504) 299-3300 Fax: (504) 299-3399 Email: ddraper@hellerdraper.com wpatrick@hellerdraper.com lcollins@hellerdraper.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/6gYMYD About the Archdiocese of New Orleans 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. The Roman Catholic Church for the Archdiocese of New Orleans sought Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1, 2020. The Archdiocese was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Meredith S. Grabill is the case judge. Jones Walker LLP, led by Mark A. Mintz, R. Patrick Vance, Elizabeth J. Futrell, and Laura F. Ashley, serves as counsel to the Debtor. Donlin, Recano & Company, Inc., is the claims agent. ARCTIC GLACIER: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded Arctic Glacier U.S.A., Inc.'s Corporate Family Rating to Caa1 from B3, its Probability of Default Rating to Caa1-PD from B3-PD, and the ratings on the company's senior secured first lien credit facilities to Caa1 from B3, consisting of a $60 million senior secured first lien revolver due 2022 and a $412.5 million senior secured first lien term loan due 2024. The outlook was changed to negative from stable. Its ratings downgrades and negative outlook reflect Arctic Glacier's high financial leverage with debt/EBITDA at around 7.0x for the fiscal year end period December 31, 2019, and Moody's expectation that headwinds stemming from the coronavirus outbreak will pressure earnings and cash flow generation in fiscal 2020. While the company's distribution channels, which are mainly grocery, mass merchants, and convenience stores, remain open during the coronavirus pandemic, Moody's expects stay-at-home orders and social distancing measures prohibiting group gatherings will negatively affect demand for the company's ice-related products. Given the anticipated decline in earnings, debt/EBITDA is expected to increase above 8.0x in fiscal 2020. The company's approaching maturity of its $60 million revolver facility in March 2022 presents refinancing risks, given its elevated financial leverage. Downgrades: Issuer: Arctic Glacier U.S.A., Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Arctic Glacier U.S.A., Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Arctic Glacier's Caa1 CFR reflects its small relative scale with annual revenue of $276 million, and its high financial leverage with debt/EBITDA expected to increase to over 8.0x in fiscal 2020 because of weaker ice demand related to the coronavirus outbreak. The company has narrow product focus with the vast majority of revenue related to the sale of ice-related products. Moody's expects efforts to contain the coronavirus outbreak such as stay-at-home orders and consumers need to maintain social distancing will negatively affect demand for the company's products at least through the current outbreak. Arctic Glacier has high exposure to weather and very high seasonality, generating most of its revenue and earnings during the summer months. Governance factors primarily relate to the company's aggressive financial policies under private equity ownership. The company's weak liquidity reflects its cash balance of around $29 million as of December 31, 2019, and expected weak cushion under the financial maintenance covenant effectively limiting the availability under its $60 million revolver facility due March 2022, which provide limited financial flexibility to fund seasonal negative cash flows outside peak ice consumption months. The rating also reflects Arctic Glacier's position as the second largest manufacturer and distributor of ice in the US and leading position in the smaller Canadian market. The company also has a relatively diverse customer base and generates EBITDA margins of around 25%. The company should benefit from increased demand as stay-at-home orders are lifted, however there is uncertainty around the timing and consumer's propensity to resume group gatherings until a vaccine or other measures are effective at combating the coronavirus. Ice usage will increase when warmer weather arrives but Moody's estimates peak seasonal demand will be lower in 2020 and create a smaller cash and liquidity cushion entering the 2020-2021 offseason. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The consumer-packaged goods sector has been one of the sectors affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Arctic Glacier's credit profile, including its exposure to group gatherings, 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 Arctic Glacier of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects Moody's expectation that headwinds related to the coronavirus outbreak will pressure Arctic Glacier's profitability and cash flows, the uncertainty around the duration of social distancing measures and limited group gatherings, as well as the pace of the rebound once the pandemic begins to subside. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if leverage materially declines driven by improved operating results and positive free cash flow generation resulting in debt/EBITDA sustained below 7.0x. The company would also need to maintain at least adequate liquidity. The ratings could be downgraded if social distancing measures persists longer than Moody's assumption, operating performance remains weak, if debt/EBITDA leverage remains elevated, or if there is a deterioration in liquidity for any reason. Ratings could also be downgraded if the company fails to address the upcoming maturity of its revolver facility in advance of it becoming current, or if the risk of a debt restructuring or event of default increase for any reason. Arctic Glacier U.S.A., Inc., a subsidiary of holding company Chill Parent, Inc., is a manufacturer, marketer, and distributor of packaged ice products in the US and Canada. The company sells to more than 75,000 retail locations including mass merchants, national and regional grocery chains, convenience stores, and gas stations among others. Arctic Glacier's infrastructure includes 99 production and distribution facilities and over 52,000 stand-alone merchandising freezer units. Arctic Glacier was sold to The Carlyle Group in March 2017 for approximately $723 million. The company is private and does not publicly disclose financial information. Arctic Glacier generated approximately $276 million of revenue for the fiscal year end period ended December 31, 2019. ASTERIA EDUCATION: Sues SBA for Rejecting Coronavirus Relief Loan ----------------------------------------------------------------- Patrick Danner of Express News reports that Asteria Education Inc. had sues the Small Business Administration in U.S. Bankruptcy Court in San Antonio over its refusal, twice, to grant the Bulverde, Texas-based education software developer a $700,000 coronavirus stimulus loan. According to the report, the SBA is overstepping its authority in blocking businesses in Chapter 11 from participating in the Paycheck Protection Program. Asteria noted in its complaint that nothing in the CARES Act, that authorized $349 billion for small businesses in the PPP's first round, prevents a company in bankruptcy from receiving a loan. The spread of COVID-19 has led to school closures in Texas for the rest of the school year, harming Asteria's operating income. It expects difficulty in collecting on existing accounts and generating new accounts. About Asteria Education Inc. Founded in 1982 in San Antonio, Texas, Asteria Education, Inc., also known as ECS Learning Systems, Test Smart, LLC and Prepworks -- https://www.staarmaster.ecslearn.com/ -- is an integrated standards prep company and developer of STAAR MASTER. Through its brands, Staar Master, Testsmart, and Prepworks, Asteria Education offers a diverse portfolio of supplementary educational products. Asteria Education filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50169) on Jan. 26, 2020. The petition was signed by David Cumberbatch, president and chief executive officer. At the time of the filing, the Debtor disclosed between $1 million and $10 million in both assets and liabilities. Judge Craig A. Gargotta oversees the case. Rochelle Mccullough, LLP, is the Debtor's legal counsel. ASTRIA HEALTH: Cancels Sale of Hospitals ---------------------------------------- Alison Ellison, writing for Beckers Hospital Review, reports that Astria Health has taken its hospitals off the market. Ayla Ellison, writing for VMG Health, reports that Astria Health, through its lawyers, filed a notice in the bankruptcy court to cancel all bidding deadlines for its assets. Astria is working with Lapis Advisers on a joint reorganization plan, according to Yakima Herald. Yakima, Wash.-based Astria closed one hospital in January 2020, and operates the two others. "Based on the impact of the COVID-19 pandemic on the capital markets ...the debtors, in consultation with representatives of Lapis Advisers ... have concluded that a sale process is not a viable exit strategy for the debtors at this time," wrote Astria's attorneys in the notice filed April 24. The joint reorganization plan is expected to be ready by June 1 and the company is aiming to exit bankruptcy by July, a spokesperson told KIMA. 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. Judge 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, appointed a committee of unsecured creditors on May 24, 2019. 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. AVIS BUDGET: Moody's Rates $400MM Senior Secured Notes 'Ba2' ------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Avis Budget Car Rental, LLC's planned $400 million of senior secured notes. Existing ratings remain unchanged and include: Avis: corporate family rating at B2; secured credit facility at Ba2; and senior unsecured at B3; and; Avis Budget Finance PLC: senior unsecured at B3. The speculative grade liquidity rating is SGL-4. The ratings remain under review for downgrade. The following rating action was taken: Assignments: Issuer: Avis Budget Car Rental, LLC Gtd Senior Secured Regular Bond/Debenture, Assigned Ba2 (LGD2); Placed on Review for Downgrade RATINGS RATIONALE The Ba2 rating of Avis' secured notes reflect their: 1) secured position in substantially all of Avis' assets; and, 2) pari passu ranking with Avis' other secured credit facility. This rating, as well as Avis' B2 CFR and other ratings, also reflect the considerable weakening of the company's liquidity position and credit metrics that will occur due to the coronavirus' impact on air-travel, car rental usage rates, and the used car market. Avis business is built around renting its cars, on-airport and off-airport, and being able to efficiently dispose of the rental fleet. Air travel, which has a very strong relationship to rental car utilization rates, has fallen by over 90% and Moody's anticipates travel will remain weak through 2020. At the same time the usually stable market for used cars has contracted at an unprecedented pace. Used car sales are a fraction of typical levels, and Moody's believes realized prices are down by almost 12% during early April. As a result of this stress, Avis' revenues and earnings will decline materially, and the company's cash flow will become significantly negative during the second quarter. Avis' March 31, 2020 liquidity position of $1.6 billion (consisting of $1.4 billion in cash and $225 million available under committed credit facilities) is adequate to fund the cash outflow that will occur until the used car market becomes more accessible. Demand and pricing in the 40 million-unit US used car market should begin to recover sometime during the third quarter which should enable Avis to sell its fleet at levels needed to ease some stress on liquidity. Proceeds from the secured note offering will provide a more comfortable liquidity cushion against the near-term stress in the company's rental and fleet disposition operations. The review of Avis' ratings is focusing on the company's ability to maintain adequate liquidity until the used car market reopens to operate efficiently, and thereby accommodate a defleeting of the company's vehicle portfolio. The review is also considering the prospects for Avis to restore an adequate financial and operating profile following the rental market decline, the vehicle defleeting, and the erosion in credit metrics that will occur during 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Avis' ratings could be downgraded if: 1) the pace of cash consumption commencing during the second quarter materially exceeds its expectations; 2) the used car market remains depressed through the third quarter; or, 3) the company's liquidity sources are on a trajectory to fall below expected requirements. The car rental sector has been one of the sectors most significantly affected by the credit shock given its heavy dependence on air travel and on the sale of used vehicles. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial credit implications of public health and safety. Avis has minimal environmental risk associated with the ownership and operation of its vehicle fleet. The company also maintains adequate relationships with its employees, regulatory bodies and the communities in which it operates. Avis Budget Group, Inc. is one of the world's leading car rental companies through its Avis and Budget brands. The company's Zipcar brand, is the world's leading car sharing network. The company's 2019 revenues were $9.2 billion. BIOSTAGE INC: Secures $404,221 PPP Loan from Bank of America ------------------------------------------------------------ Biostage, Inc. entered into a promissory note with Bank of America, NA (Bank), which provides for a loan in the amount of $404,221 (PPP Loan) pursuant to the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) administered by the U.S. Small Business Administration (SBA). The PPP Loan matures on May 4, 2022, being two years from the funding date of the PPP Loan, and bears interest at a rate of 1.00% per annum. The PPP Loan is unsecured by the Company and is guaranteed by the SBA. All or a portion of the PPP Loan may be forgiven by the SBA upon application by the Company accompanied by documentation of expenditures in accordance with SBA requirements under the PPP, which includes employees being kept on the payroll for eight weeks after the date of the PPP Loan and the proceeds of such PPP Loan being used for payroll, rent, mortgage interest or utilities. Forgiveness is also based on maintaining or rehiring employees and maintaining salary levels. In the event all or any portion of the PPP Loan is forgiven, the amount forgiven is applied to outstanding principal. In the event that any portion of the PPP Loan is not forgiven in accordance with the PPP, following a six month deferred period that ends Nov. 4, 2020, the Company will be required to pay the Bank monthly payments of principal and interest to repay the PPP Loan in full on or before the maturity date. The monthly repayment amounts will be determined by the Bank following the determination of how much of the PPP Loan is not forgiven. The PPP Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The promissory note contains various certifications and agreements related to the PPP, as well as customary default and other provisions. About Biostage Inc. Headquartered in Holliston, Massachusetts, Biostage -- http://www.biostage.com/-- is a bioengineering company that is developing next-generation esophageal implants. The Company's Cellspan technology combines a proprietary, biocompatible scaffold with a patient's own cells to create an esophageal implant that could potentially be used to treat pediatric esophageal atresia and other conditions that affect the esophagus. The Company's esophageal implant leverages the body's inherent capacity to heal itself as it is a "living tube" that facilitates regeneration of esophageal tissue and triggers a positive host response resulting in a tissue-engineered neo-conduit that restores continuity of the esophagus. These implants have the potential to dramatically improve the quality of life for children and adults. Biostage reported a net loss of $8.33 million for the year ended Dec. 31, 2019, compared to a net loss of $7.53 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.99 million in total assets, $903,000 in total liabilities, and $1.09 million in total stockholders' equity. RSM US LLP, in Boston, Massachusetts, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations, has an accumulated deficit, uses cash flows in operations, and will require additional financing to continue to fund operations. This raises substantial doubt about the Company's ability to continue as a going concern. BLACKRIDGE TECHNOLOGY HOLDINGS: U.S. Trustee Appoints Committee --------------------------------------------------------------- The U.S. Trustee for Region 17 appointed a committee to represent unsecured creditors in the Chapter 11 case of Blackridge Technology Holdings, Inc. The committee members are: 1. Chowdary Yalamanchili Attn: John P. Melko, Esq. 1000 Louisiana St., Ste. 2000 Houston, TX 77002 2. Krishna Adusumilli Attn: John P. Melko, Esq. 1000 Louisiana St., Ste. 2000 Houston, TX 77002 3. Softgate International Attn: David Foy 2394 Mariner Square Drive, #A1 Alameda, CA 94501 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Blackridge Technology Holdings Blackridge Technology Holdings, Inc., a company that develops and markets next generation cyber defense solutions, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-50394) on April 2, 2020. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Bruce T. Beesley oversees the case. Stephen R. Harris, Esq., at Harris Law Practice, LLC, is the Debtor's legal counsel. BLACKRIDGE TECHNOLOGY INT'L: U.S. Trustee Appoints Committee ------------------------------------------------------------ The Office of the U.S. Trustee for Region 17 appointed a committee to represent unsecured creditors in the Chapter 11 case of Blackridge Technology International, Inc. The committee members are: 1. Chowdary Yalamanchili Attn: John P. Melko, Esq. 1000 Louisiana St., Ste. 2000 Houston, TX 77002 2. Krishna Adusumilli Attn: John P. Melko, Esq. 1000 Louisiana St., Ste. 2000 Houston, TX 77002 3. Softgate International Attn: David Foy 2394 Mariner Square Drive, #A1 Alameda, CA 94501 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Blackridge Technology International Blackridge Technology International develops, markets, and supports a family of products that provide a next generation cyber security solution for protecting enterprise networks and cloud services. Blackridge Technology International filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 20-50314) on March 13, 2020. In the petition signed by Robert J. Graham, president, the Debtor estimated $10 million to $50 million in both assets and liabilities. Judge Bruce T. Beesley oversees the case. Stephen R. Harris, Esq., at Harris Law Practice LLC is the Debtor's legal counsel. BLUESTEM BRANDS: Creditors' Committee Members Disclose Claims ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Morris James LLP and Kilpatrick Townsend & Stockton LLP submitted a verified statement that they are representing the Official Committee of Unsecured Creditors in the Chapter 11 cases of Bluestem Brands, Inc., et al. On March 21, 2020, pursuant to Section 1102 of Title 11 of the United States Code, the United States Trustee appointed the Committee. The Committee consists of the following seven members: (a) CNA International Inc. dba MC Appliance Corp.; (b) Credit Karma; (c) First Contact LLC; (d) The Flower Club (aka Teleflora); (e) Quad/Graphics, Inc.; (f) United Parcel Service, Inc.; and (g) Fujifilm North America Corp. On March 24, 2020, the Committee selected Kilpatrick Townsend & Stockton LLP and Morris James LLP to serve as its proposed counsel in connection with the Debtors' chapter 11 cases. As of May 4, 2020, the Committee members and their disclosable economic interests are: CNA INTERNATIONAL INC. DBA MC APPLIANCE CORP. 940 N. Central Avenue Wood Dale, IL 60191 * Unsecured claim of not less than approximately $1,288,839.40 arising from its position as a trade creditor/service provider. CREDIT KARMA 760 Market Street, 2nd Floor San Francisco, CA 94102 * Unsecured claim of not less than approximately $1,849,504.11 arising from its position as a trade creditor/service provider. FIRST CONTACT LLC 200 Central Avenue, Suite 700 St. Petersburg, FL 33701 * Unsecured claim of not less than approximately $865,967.01 arising from its position as a trade creditor/service provider. THE FLOWER CLUB (AKA TELEFLORA) 3737 NW 34th Street Oklahoma City, OK 73112 * Unsecured claim of not less than approximately $1,387,633.32 arising from its position as a trade creditor/service provider. FUJIFILM NORTH AMERICA CORP. 200 Summit Lake Drive Valhalla, NY 10545 * Unsecured claim of not less than approximately $554,056.17 arising from its position as a trade creditor/service provider. QUAD/GRAPHICS, INC. N61 W23044 Harry's Way Sussex, WI 53089-3995 * Unsecured claim of not less than approximately $5,200,000 arising from its position as a trade creditor/service provider. UNITED PARCEL SERVICE, INC. 55 Glenlake Parkway NE Atlanta, GA 30328 * Unsecured claim of not less than approximately $3,500,000 arising from its position as a trade creditor/service provider. Counsel to the Official Committee of Unsecured Creditors of Bluestem Brands, Inc., et al. can be reached at: MORRIS JAMES LLP Eric J. Monzo, Esq. Brya M. Keilson, Esq. 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 Telephone: (302) 888-6800 Facsimile: (302) 571-1750 E-mail: emonzo@morrisjames.com bkeilson@morrisjames.com - and – KILPATRICK TOWNSEND & STOCKTON LLP David M. Posner, Esq. Gianfranco Finizio, Esq. Kelly E. Moynihan, Esq. 1114 Avenue of the Americas New York, NY 10036 Telephone: (212) 775-8700 Facsimile: (212) 775-8800 E-mail: dposner@kilpatricktownsend.com gfinizio@kilpatricktownsend.com kmoynihan@kilpatricktownsend.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/KbyEx3 and https://is.gd/VAn9qz About Bluestem Brands Bluestem Brands, Inc. and its affiliates are a direct-to-consumer retailer that offers fashion, home, and entertainment merchandise through internet, direct mail, and telephonic channels under the Orchard and Northstar brand portfolios. Headquartered in Eden Prairie, Minnesota, the Debtors employ approximately 2,200 individuals and own and/or lease warehouses, distribution centers, and call centers in 10 other states, including New Jersey, Massachusetts, Georgia, and California. The Debtors' supply chain consists of name-brand vendors -- e.g., Michael Kors, Samsung, Keurig, Dyson -- as well as private label and non-branded sources based in the United States and abroad. For more information, visit https://www.bluestem.com/ Bluestem Brands, Inc., based in Eden Prairie, MN, and its debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10566) on March 9, 2020. In its petition, Bluestem Brands was estimated to have $500 million to $1 billion in both assets and liabilities. The petition was signed by Neil P. Ayotte, executive vice president, general counsel and secretary. The Hon. Mary F. Walrath oversees the case. YOUNG CONAWAY STARGATT & TAYLOR, LLP, and KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsels; FTI CONSULTING, INC., as financial advisor; RAYMOND JAMES & ASSOCIATES, INC., as investment banker; IMPERIAL CAPITAL LLC, as restructuring advisor; and PRIME CLERK LLC as claims and noticing agent. BOY SCOUTS: Deadline to Respond to G.M. Suit Extended to August 17 ------------------------------------------------------------------ In the case captioned G.M., Plaintiff, v. BOY SCOUTS OF AMERICA; TWIN RIVER COUNCIL, INC., BOY SCOUTS OF AMERICA; and GOVERNOR CLINTON COUNCIL, INC., BOY SCOUTS OF AMERICA, Defendants., No. 20-CV-174 (N.D.N.Y.), Chief District Judge Glenn T. Suddaby granted the Non-Debtor Defendants' motion for an extension of time to file an answer or other responsive pleading to Plaintiff's complaint. The Non-Debtor Defendants' time to submit an answer or other responsive pleading to the Complaint pending in the Court is extended for a period of seven days following the hearing on the PI Motion (currently scheduled for March 24, 2020) and entry of an order by the Delaware Bankruptcy Court with respect to the PI Motion ("Del. Bankr. Ct. PI Order"). Upon entry of the Del. Bankr. Ct. PI Order, the Non-Debtor Defendants' deadline to answer or otherwise respond to the Complaint in the New York Court will be extended until August 17, 2020 (180 days from the commencement of the BSA's chapter 11 case), or such date as may be otherwise ordered or extended by order of the Delaware Bankruptcy Court. The Non-Debtor Defendants must promptly notify this Court of the entry of the Del. Bankr. Ct. PI Order and any modification or extension thereof. A copy of the Court's Order dated March 9, 2020 is available at https://bit.ly/3a3PVtS from Leagle.com. G. M., Plaintiff, represented by Joshua R. Friedman -- jfriedman@dblawny.com -- Dreyer Boyajian LLP. Boy Scouts of America, Twin Rivers Council, Inc., Boy Scouts of America & Governor Clinton Council, Inc., Boy Scouts of America, Defendants, represented by Mathew William Beckwith -- mbeckwith@melicklaw.com -- Melick & Porter LLP & Phyliss A. Hafner -- pah@bhhattorneys.com -- Burden, Hafner & Hansen, LLC. 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. BOY SCOUTS: Has Until August 17 to Respond to SHC Complaint ----------------------------------------------------------- In the case captioned SHC-MG-4 DOE, Plaintiff, v. DAVID A. DECLUE, a/k/a DAVID DECLUE; SUSQUENANGO COUNCIL, BOY SCOUTS OF AMERICA, INC.; BADEN-POWELL COUNCIL, INC., BOY SCOUTS OF AMERICA; and BOY SCOUTS OF AMERICA, a/k/a NATIONAL BOY SCOUTS OF AMERICA FOUNDATION, a/k/a BOY SCOUTS OF AMERICA, CORP., Defendants, No. 20-cv-192(GTS)(TWD) (N.D.N.Y.), Chief District Judge Glenn T. Suddaby granted the Non-Debtor Defendants' motion for an extension of time to file an answer or other responsive pleading to Plaintiff's complaint. The Non-Debtor Defendants' time to submit an answer or other responsive pleading to the Complaint pending in the Court is extended for a period of seven days following the hearing on the PI Motion (currently scheduled for March 24, 2020) and entry of an order by the Delaware Bankruptcy Court with respect to the PI Motion ("Del. Bankr. Ct. PI Order"). Upon entry of the Del. Bankr. Ct. PI Order, the Non-Debtor Defendants' deadline to answer or otherwise respond to the Complaint in the New York Court will be extended until August 17, 2020 (180 days from the commencement of the BSA's chapter 11 case), or such date as may be otherwise ordered or extended by order of the Delaware Bankruptcy Court. The Non-Debtor Defendants must promptly notify this Court of the entry of the Del. Bankr. Ct. PI Order and any modification or extension thereof. A copy of the Court's Order dated March 9, 2020 is available at https://bit.ly/3a6oekj from Leagle.com. SHC-MG-4 Doe, Plaintiff, represented by Mitchell M. Breit -- mbreit@simmonsfirm.com -- Simmons Hanly Conroy LLC. Susquenango Council, Boy Scouts of America, Inc., Baden-Powell Council, Inc., Boy Scouts of America & Boy Scouts of America, also known as National Boy Scouts of America Foundation also known as Boy Scouts of America, Corp., Defendants, represented by Mathew William Beckwith -- mbeckwith@melicklaw.com -- Melick & Porter LLP & Phyliss A. Hafner -- pah@bhhattorneys.com -- Burden, Hafner & Hansen, LLC. 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. BREDA LLC: To Seek Confirmation of Reorgnization Plan on May 28 --------------------------------------------------------------- On March 5, 2020, debtor Breda, a Limited Liability Company, filed with the U.S. Bankruptcy Court for the District of Maine a Second Amended Disclosure Statement with respect to its Second Amended Plan of Reorganization. On April 16, 2020, Judge Michael A. Fagone ordered that: * May 28, 2020, at 2:00 p.m. is the hearing on confirmation of the Plan. * May 21, 2020, is the deadline for filing and serving written objections to confirmation of the Plan. * May 21, 2020, is the deadline for ballots for accepting or rejecting the Plan. * May 21, 2020, is the deadline for filing and serving any motion seeking temporary allowance of a claim for the purpose of accepting or rejecting the Plan. A full-text copy of the order dated April 16, 2020, is available at https://tinyurl.com/y9xs2gmg from PacerMonitor at no charge. Counsel for the Debtor: Sam Anderson, Esq. Bernstein, Shur, Sawyer & Nelson 100 Middle Street, P.O. Box 9729 Portland, Maine 04104-5029 E-mail: sanderson@bernsteinshur.com About Breda and Tempo Dulu Breda, a Limited Liability Company, and Tempo Dulu, LLC, own the Camden Harbour Inn and the Danforth Inn located in Camden and Portland, Maine, respectively. Breda and Tempo Dulu sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 18-20157) on March 28, 2018. In the petitions signed by Raymond Brunyanszki, member, the Debtors each estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Michael A. Fagone oversees the case. The Debtors tapped Bernstein, Shur, Sawyer& Nelson, P.A., as their legal counsel. BRIGHT MOUNTAIN: CEO Agrees to Suspend Salary Hike Amid Pandemic ---------------------------------------------------------------- Kip W. Speyer, the chairman and chief executive officer of Bright Mountain Media, Inc., voluntarily agreed to suspend his recently announced compensation increase to enhance the liquidity profile of the Company given the difficult operating environment resulting from the coronavirus (COVID-19) pandemic. Mr. Speyer will evaluate the duration of this measure in light of future financial and market conditions again after June 30, 2020. The terms of the Company's recently announced employment agreement with Greg Peters, the Company's president and chief operating officer, which, among other things, provides for an annual base salary of $325,000 remains unchanged. About Bright Mountain Based in Boca Raton, Fla., Bright Mountain Media, Inc. -- http://www.brightmountainmedia.com/-- is a digital media holding company whose primary focus is connecting brands with consumers as a full advertising services platform. Bright Mountain Media's assets include an ad network, an ad exchange platform and 24 websites which are customized to provide its niche users, including active, reserve and retired military, law enforcement, first responders and other public safety employees with products, information and news that the Company believes may be of interest to them. Bright Mountain reported a net loss attributable to common shareholders of $5.33 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common shareholders of $3.01 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, Bright Mountain had $28.36 million in total assets, $7.23 million in total liabilities, and $21.13 million in total shareholders' equity. EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 12, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has experienced recurring net losses, cash outflows from operating activities, and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. BSI LLC: Case Summary & Unsecured Creditor ------------------------------------------ Debtor: BSI, LLC - 33 Smiley Ingram 33 Smiley Ingram Road Cartersville, GA 30121 Business Description: BSI, LLC - 33 Smiley Ingram is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 20-40882 Debtor's Counsel: Paul Reece Marr, Esq. PAUL REECE MARR, P.C. Suite 960 300 Galleria Parkway, N.W. Atlanta, GA 30339 Tel: (770) 984-2255 E-mail: paul.marr@marrlegal.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Brian Alan Stewar, manager. The Debtor listed Chase located at P.O. Box 15583 Wilmington, DE 19896, as its sole unsecured creditor holding a claim of $15,597. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/fjPYK1 CAESARS ENTERTAINMENT: S&P Lowers ICR to 'B' on Elevated Leverage ----------------------------------------------------------------- S&P Global Ratings lowered all of its ratings on U.S. gaming operator Caesars Entertainment Corp. by one notch, including its issuer-credit rating to 'B' from 'B+'. The ratings remain on CreditWatch, where S&P placed them with negative implications on June 24, 2019. "Under our assumed second-half containment and recovery scenario, we believe the combined company's pro forma adjusted leverage will improve after rising significantly in 2020 but remains above 8x in 2021, which we view as high for the prior 'B+' rating even after accounting for its improved business position," S&P said. "Our forecast for combined adjusted leverage of more than 8x in 2021 is higher than our prior forecast for leverage in the low- to high-7x area due to the significant expected loss of revenue and cash flow in 2020 stemming from the temporary closure of operations and our assumption for a slow recovery once casinos reopen. Even though we view the merger with Caesars favorably because it will add scale and diversity to Eldorado's operations and provide it with access to Caesar's player loyalty database and portfolio of destination properties in Las Vegas, we believe the combined company's adjusted leverage above 8x is high at the prior 'B+' rating. This is because a large portion of the combined asset base will be subject to high lease payments, which can lead to greater EBITDA volatility and materially lower cash flow during periods of declining revenue," S&P said. The ratings remain on CreditWatch with negative implications to signal the potential for a further downgrade if the effects of the pandemic are more severe than S&P currently anticipates and Caesars' casinos do not reopen in the third quarter, straining Caesars' liquidity position. S&P would likely lower its ratings on Caesars if the rating agency believes it is unlikely that the merger with Eldorado will be completed. The CreditWatch listing also reflects the very high degree of uncertainty around Caesars' ability to recover next year and begin reducing its leverage after a significant spike in 2020. "In resolving the CreditWatch listing, we plan to monitor Caesars' prospects for reopening its casinos, assess its customer demand after it reopens and how consumers respond to the social distancing measures and other operational changes put in place to enhance health and safety, and how plausible our assumed recovery path is in light of that demand. We will also assess the likelihood that it will reduce its leverage later this year and into 2021," S&P said. CALAIS REGIONAL: Lawmakers Push to Make PPP Relief Available ------------------------------------------------------------ Calais Regional Hospital and Penobscot Valley Hospital previously sought Chapter 11 protection but continue to provide care to patients. WABI5 reports that some Maine lawmakers are pushing the U.S. Small Business Administration to amend a ruling stating that no "bankrupt entities" will be eligible for the Paycheck Protection Program. Senators Susan Collins and Angus King, together with Congressman Jared Golden, say that Penobscot Valley Hospital and Calais Regional Hospital should be eligible to the program as they are still providing care to patients. About Calais Regional Hospital Based in Calais, Maine, Calais Regional Hospital -- https://www.calaishospital.org/ -- operates as a non-profit organization offering cardiac rehabilitation, emergency, food and nutrition, home health, inpatient care unit, laboratory, nursing, radiology, respiratory care and stress testing, surgery, and social services. Calais Regional Hospital filed a Chapter 11 petition (Bankr. D. Maine Case No. 19-10486) on Sept. 17, 2019. At the time of filing, the Debtor had estimated assets and liabilities of $10 million to $50 million. Judge Michael A. Fagone oversees the case. The Debtor is represented by Murray Plumb & Murray. About Penobscot Valley Hospital Penobscot Valley Hospital -- http://www.pvhme.org/-- operates a general medical and surgical facility in Lincoln, Maine. It has been serving the community for over 40 years with a wide variety of services and treatment options. Penobscot Valley Hospital sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 19-10034) on Jan. 29, 2019. At the time of the filing, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of $1 million to $10 million. The case is assigned to Judge Michael A. Fagone. The Debtor tapped Murray Plumb & Murray as its legal counsel. CAREMORE MANAGERS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Caremore Managers Inc. d/b/a Comfort Suites 5100 7th Street Bay City, TX 77414 Case No.: 20-32451 Business Description: Caremore Managers Inc. is a privately held company in the traveler accommodation industry. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Southern District of Texas Judge: Hon. Jeffrey P. Norman Debtor's Counsel: Joyce Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Tel: (972) 503-4033 E-mail: joyce@joycelindauer.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Kulwant Kaur Sandhu, shareholder. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/dYK4jf CC HOLDINGS: District Court Rejects Bid to Dismiss Appeal --------------------------------------------------------- District Judge Janet Bond Arterton denied D. Washburn Investments, LLC's motion to dismiss the appellate case captioned CC HOLDINGS 2000 LLC, Appellant, v. D. WASHBURN INVESTMENTS, LLC, Appellee, Civil No. 3:18cv2139 (JBA) (D. Conn.). CC Holdings 2000 LLC appealed from the ruling of the Bankruptcy Court granting D. Washburn Investments' motion to compel the Trustee to abandon certain real property of the bankruptcy estate. Appellee moved to dismiss the appeal because Appellant's counsel, James T. Early, III, "has not been authorized by the United States Bankruptcy Court for the District of Connecticut for matters pending in that court or any related [] matters in other jurisdictions," which violates the "fundamental concept of bankruptcy law that counsel for a debtor must be retained and authorized to represent the debtor by an order of the United States Bankruptcy Court where the case is pending." Because Mr. Early has secured no such order, Appellee argued, "this appeal was not properly filed and accordingly, should be dismissed by this court without any need for further adjudication." Appellee also argued that Mr. Early is not entitled to file this appeal on behalf of Appellant by virtue of his "alleged[]" status as "a principal of the debtor entity CC Holdings 2000 LLC" because "the debtor is an entity and not Mr. Early in his individual capacity." Mr. Early moved for an extension of time to respond to the motion to dismiss until April 8, 2020 "for health reasons." In support of its motion to dismiss, Appellee cites District of Connecticut Local Rule of Bankruptcy 1002-1, which prohibits entities from appearing in the Bankruptcy Court without an attorney, and Local Rule 2014-1, which sets forth the requirements for filing the statement which must accompany applications for employment, as required by Federal Rule of Bankruptcy Procedure 2016(b). Federal Rule of Bankruptcy Procedure 2016(b) requires "[e]very attorney for a debtor, whether or not the attorney applies for compensation," to "file and transmit to the United States Trustee within 14 days after the order for relief, or at another time as the court may direct, the statement required by section 329 of the Code," which describes the compensation paid or promised to the attorney for the debtor. Local Rule 2014-1(a) requires that the "statement required by FRBP 2016(b) . . . be filed with any application for employment of counsel for the Debtor," and provides that the "failure to fully complete and file" such statement "with any application or motion seeking employment [of counsel] . . . may result in denial of the application." Because Appellant has not submitted any such statement or application for employment regarding Mr. Early, Appellee argued that the appeal must be dismissed. Although approval by the Bankruptcy Court of counsel for the debtor in a Chapter 11 bankruptcy is required, such approval of debtor's counsel in a Chapter 7 bankruptcy is generally not required. Thus, the Bankruptcy Court's approval of Mr. Early as counsel for the debtor was not required after the conversion of this matter from a proceeding under Chapter 11 to a proceeding under Chapter 7, which occurred on October 19, 2017. The order from which Appellant appeals was issued on Dec. 10, 2018, and his appeal was filed on Dec. 23, 2018, after the conversion of this matter to a Chapter 7 bankruptcy. Moreover, even if Mr. Early were required to seek authorization to represent the debtor as Appellee suggests, Appellee has cited no authority which indicates that the proper response to the failure to seek such authorization would be the complete dismissal of Appellant's appeal. Nor has the Court found any such authority. Rather, Local Rule 2014-1 states simply that the failure to file the "statement required by FRBP 2016(b) . . . may result in denial of the application" for employment of counsel. That rule does not suggest that the proper response to the failure to submit such a statement, even where required, would be dismissal of the debtor's appeal. Thus, Appellee has demonstrated neither that Appellant was required to seek authorization to employ Mr. Early as counsel following the conversion of this matter to a Chapter 7 proceeding, nor that the proper remedy for failure to do so, even if required, would be dismissal of the pending appeal. A copy of the Court's Ruling dated March 9, 2020 is available at https://bit.ly/39Yafgk from Leagle.com. CC Holdings 2000 LLC, Appellant, represented by John T. Early, John T. Early Attorney at Law. D. Washburn Investments LLC, Appellee, represented by Charles J. Filardi, Jr., Reid & Riege, P.C. About CC Holdings 2000 LLC Based in New Haven, Connecticut, CC Holdings 2000 LLC filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on August 16, 2017. The case was converted to a Chapter 11 on September 7, 2017 by motion of the debtor (Bankr. D. Conn. Case No. 17-31253). Joseph J. D'Agostino, Jr., Esq. represents the Debtor as counsel. At the time of filing, the Debtor estimates $1,000,001 to $10 million in assets and $500,001 to $1 million in liabilities. CINEMEX HOLDINGS: Seeks to Hire Bast Amron as Co-Counsel -------------------------------------------------------- Cinemex USA Real Estate Holdings, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Miami-based law firm Bast Amron LLP. Bast Amron will serve as co-counsel with Quinn Emanuel Urquhart & Sullivan, LLP, the firm tapped by Cinemex and its affiliates to represent them in their Chapter 11 cases. Jeffrey Bast, Esq., and Brett Amron, Esq., the firm's attorneys charge an hourly fee of $595. Bast Amron received a retainer of $50,000 from Quinn Emanuel, which was funded to that firm by Grupo Cinemex, S.A. de C.V., the majority shareholder of Cinemex Holdings USA, Inc. Mr. Bast disclosed in court filings that he and his firm are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey Bast, Esq. Bast Amron LLP One Southeast Third Avenue, Suite 1400 Miami, FL 33131 Tel: 305.379.7904 E-mail: jbast@bastamron.com About Cinemex Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP serve as Debtors' bankruptcy counsel. CINEMEX HOLDINGS: Seeks to Hire Quinn Emanuel as Legal Counsel -------------------------------------------------------------- Cinemex USA Real Estate Holdings, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Quinn Emanuel Urquhart & Sullivan, LLP as its legal counsel. Quinn Emanuel will provide these services to Cinemex and its affiliates in connection with their Chapter 11 cases: a. advise Debtors of their responsibilities in complying with the United States Trustee's Guidelines and Reporting Requirements and with the rules of the court; b. prepare legal papers necessary in the administration of Debtors' bankruptcy cases; c. protect the interests of Debtors in all matters pending before the court; and d. represent Debtors in negotiations with their creditors and in the preparation and confirmation of a bankruptcy plan. The 2020 hourly rates for the firm's attorneys range from $625 to $1,595. Quinn Emanuel received a retainer of $800,000 from Grupo Cinemex, S.A. de C.V., the majority shareholder of Cinemex Holdings USA, Inc., which was applied to the firm's pre-bankruptcy fees. As of the petition date, the firm holds a retainer in the amount of $8,432.97. Patricia Tomasco, Esq., a partner at Quinn Emanuel, disclosed in court filings that her firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Ms. Tomasco made the following disclosures: 1. Quinn Emanuel and Debtors have not agreed to any variations from, or alternatives to, the firm's standard billing arrangements. The rate structure provided by the firm is appropriate and is non-significantly different from the rates that it charges for other non-bankruptcy representatives, or the rates of other comparably skilled professionals. 2. The hourly rates used by Quinn Emanuel in representing Debtors are consistent with the rates that the firm charges other comparable Chapter 11 clients regardless of the location of the case. 3. Quinn Emanuel was first retained by Debtors on April 5. Its fees are determined on the basis of time billed at hourly rates. The firm's hourly rates vary with the experience and seniority of its attorneys and paralegals, and are adjusted on January 1 of each year. The 2020 hourly rates for Quinn Emanuel's attorneys range from $625 to $1,595. 4. Debtors have not approved a budget and staffing plan for the firm. Quinn Emanuel can be reached through: Patricia B. Tomasco, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 711 Louisiana Street, Suite 500 Houston, Texas 77002 Telephone: 713-221-7000 Facsimile: 713-221-7100 Email: pattytomasco@quinnemanuel.com - and - Eric Winston, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 865 S. Figueroa Street, 10th Floor Los Angeles, California 90017 Telephone: 213-443-3000 Facsimile: 213-443-3100 Email: ericwinston@quinnemanuel.com - and - Juan P. Morillo, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 1300 I Street, NW, Suite 900 Washington, D.C. 20005 Telephone: 202-538-8000 Facsimile: 202-538-8100 E-mail: juanmorillo@quinnemanuel.com About Cinemex Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, the Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP serve as Debtors' bankruptcy counsel. CLYDE J. SUTTON, JR: Proposes Sale of Shelbyville Property ---------------------------------------------------------- Judge Shelley Rucker of the U.S. Bankruptcy Court for the Eastern District of Tennessee will convene a hearing to consider the sale by Clyde James Sutton, Jr. and Alice Carolyn Sutton to sell their real property located at 935 W. Lane Street, Shelbyville, Tennessee. The hearing on the Motion is scheduled for April 30, 2020 at 11:00 a.m. in the Courtroom located at 31 E. 11th Street, Historic Courthouse, Chattanooga, Tennessee. Clyde James Sutton, Jr. and Alice Carolyn Sutton sought Chapter 11 protection (Bankr. E.D. Tenn. Case No. 20-10332) on Jan. 28, 2020. The Debtors tapped Paul Jennings, Esq., as counsel. COMPASSIONATE HOMECARE: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Compassionate Homecare, Inc. 51 Union Street Suite 202 Worcester County Worcester, MA 01608 Business Description: Compassionate Homecare, Inc. is a provider of home health care services. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court District of Massachusetts Case No.: 20-40527 Debtor's Counsel: S. James Boumil, Esq. BOUMIL LAW OFFICES 120 Firmount Street Lowell, MA 01852 Tel: 978-458-0507 Email: sjboumil@boumil-law.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Wilberto Rodriguez, chief operating officer. The Debtor failed to include a list of its 20 largest unsecured creditors at the time of the filing. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/nLrOcU CONSERVICE GROUP: S&P Assigns 'B-' ICR; Outlook Stable ------------------------------------------------------ S&P Global Ratings assigned a 'B-' issuer credit rating to Utah-based Conservice Group Holdings, LLC, and a 'B' issue-level and '2' recovery rating to the proposed first-lien credit facilities. The second-lien term loan is unrated. S&P's rating on Conservice reflects its high debt leverage, relatively small scale, and narrow business focus of providing billing and bill-related services such as review, audit, payment processing, and analytics to property managers in the U.S. Key risks include limited barriers to entry and switching costs, high percentage of annual contract renewals, and some customer concentration. The key risks are partially offset by favorable client retention rates and growth dynamics due to a substantial addressable market with only about 30% penetrated, even in the most mature multifamily space, attractive investment returns for property managers due to tenants shouldering the service fee costs, and its healthy margin and free operating cash flow (FOCF) generation profiles. The stable outlook reflects S&P's expectation for Conservice to continue to exhibit strong top-line growth in the high-single-digits to low-double-digits and its stable margin profile due to its leading market position and strong returns for property managers, resulting in leverage declining to the mid-9x area in 2020 and mid-8x area in 2021. S&P could lower its ratings if deteriorating operating performance resulted in: -- FOCF deficits, or -- EBITDA to cash-interest coverage declining toward the low-1x area. In this scenario, increased competition from superior products or service providers, or unexpected regulatory changes, would result in reduced demand for Conservice's solutions. Such a scenario would also likely exert meaningful pressure on the company's margins because it would be forced to invest heavily in improving its service offering or reduce its fee levels. Alternatively, financial policy decisions consisting of debt-funded dividends or acquisitions could result in a downgrade. "Although highly unlikely over the next year, we could raise our ratings if the company were to apply excess cash flow toward debt reduction such that adjusted leverage declined to and remained below 7x. An upgrade would also be contingent on our belief that the financial sponsor would maintain a conservative financial policy, allowing the company to maintain leverage at these levels with minimal risk of releveraging. We could also raise our ratings if the company were to build scale and improve diversity and barriers to entry to an extent material enough to result in a better business risk profile," S&P said. CREATIVE ARTISTS: Moody's Cuts CFR to B3 & Rates New Term Loan B3 ----------------------------------------------------------------- Moody's Investors Service downgraded Creative Artists Agency, LLC's Corporate Family Rating to B3 from B2, Probability of Default Rating to B3-PD from B2-PD, the existing first lien credit facility (including an $1.15 billion term loan and $125 million revolving credit facility) to B3 from B2. Moody's also assigned a B3 rating to the proposed $75 million first lien term loan. The outlook remains stable. The downgrade of CAA's CFR to B3 reflects the impact of the coronavirus outbreak, which has limited the ability to hold live events and complete media production as anticipated, and additional debt issuance. While some events will be rescheduled to future quarters, others will be cancelled due to the pandemic. As a result, CAA's leverage levels will increase for as long as media production and live events continue to be impacted by the coronavirus. However, contractual revenue streams and strong demand for media content are projected to provide some stability to performance. The net proceeds of the new term loan will be used for general corporate purposes and will support CAA's existing liquidity position. Interest expense will increase modestly, while leverage will rise to slightly over 8x (pro forma for the debt issuance as of December 2019 and excluding Moody's standard lease adjustment). Downgrades: Issuer: Creative Artists Agency, LLC Corporate Family Rating, downgraded to B3 from B2 Probability of Default Rating, downgraded to B3-PD from B2-PD $1,150 million Senior Secured Term Loan due 2026, downgraded to B3 (LGD3) from B2 (LGD3) $125 million Senior Secured Revolving Credit Facility due 2024, downgraded to B3 (LGD3) from B2 (LGD3) Assignments: Issuer: Creative Artists Agency, LLC Proposed Senior Secured First Lien Term Loan due 2026, assigned B3 (LGD3) Outlook Actions: Issuer: Creative Artists Agency, LLC Outlook, Remains Stable RATINGS RATIONALE CAA's B3 CFR reflects the impact of the coronavirus outbreak on the ability to hold live events and complete media production as scheduled, as well as the overall economy which will lead to lower discretionary consumer spending. While many events may be rescheduled later in the year depending on the duration of the outbreak, others may be held without fans in attendance or cancelled. Concerts will likely be the most impacted due to its reliance on fans in attendance, but CAA's music division represents a modest portion of total revenue. With the decrease of near-term profitability, CAA's already high leverage level of slightly over 8x as of December 31, 2019 will increase further in the near term. CAA benefits from its size and diversified operations in client representation with leading positions in motion pictures, television, music, and sports and includes television packaging rights, commercial endorsements, and other business services. The majority of CAA's costs are variable and Moody's projects CAA will reduce costs substantially to offset a significant portion of near-term revenue declines. While film production has been delayed, Moody's expects production will be one of the earlier business segments to resume operations as the impact of the coronavirus abates which will provide stability to performance. CAA will benefit from the increasing value of original content worldwide after the coronavirus outbreak subsides. Contractual revenue streams are also projected to be a continuing source of revenue and cash flow despite the disruption caused by the 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 live entertainment industry 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 CAA's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and CAA 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 CAA of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. A governance consideration that Moody's considers in CAA's credit profile is the company's aggressive financial policy. CAA has issued additional debt on several occasions during the past few years including almost $400 million of additional debt to buy back employee equity in November 2019. CAA is a privately owned company. Moody's expects liquidity will be adequate due to CAA's pro forma cash balance of over $150 million and access to a $125 million revolver due 2024, with $80 million drawn and $12 million of L/Cs outstanding as of March 31, 2020. Moody's anticipates that the cash balance will be impacted by both the seasonality of the business and challenging economic conditions, but free cash flow should be supported by contractual revenue streams and efforts to preserve liquidity, including substantial expense and capex reductions. The first lien term loan is covenant lite. The revolver is subject to a springing senior secured first lien net leverage covenant of 7.5x when greater than 35% of the revolver is drawn. In the event the pandemic continues for a prolonged period of time, an amendment to CAA's financial covenant for the revolver may be needed. Moody's expects the company will be able to obtain an amendment if needed. The stable outlook reflects Moody's expectation of revenue and EBITDA declines in the near term, but liquidity should remain adequate and Moody's projects performance to improve as the coronavirus outbreak abates given the substantial demand for media content and CAA's strong position in the client representation industry. However, negative rating activity would occur if entertainment production and events continue to be disrupted by the pandemic for an extended period of time as leverage would increase and liquidity deteriorate substantially. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the uncertainty about when CAA is able to operate as scheduled due to the pandemic, an upgrade is unlikely over the near term. Moody's would consider an upgrade if leverage declines below 6.5x on a sustained basis and free cash flow as a percentage of debt is maintained in the mid-single digit percent. Positive organic growth and confidence that the private equity sponsor would pursue a financial policy in line with a higher rating would also be required. CAA's ratings could be downgraded if there was ongoing cash usage or poor operating performance that led to an elevated risk of default or an expectation of a distressed debt exchange. Leverage sustained above 8.5x, an EBITDA minus capex to interest ratio below 1x, or concern that CAA may not be able to obtain an amendment if needed may also lead to a downgrade. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Creative Artists Agency, LLC (CAA) is a global talent representation agency with leading positions in motion pictures, television, music, and sports and includes television packaging rights, commercial endorsements, and other business services. TPG Capital Partners has a significant ownership position in the company. CROWN HOLDINGS: S&P Alters Outlook to Negative, Affirms 'BB+' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Philadelphia-based metal can and transit packaging manufacturer Crown Holdings Inc. to negative from stable and are affirmed its 'BB+' issuer credit rating. S&P's issue-level and recovery ratings on the company's debt remain unchanged. There has been a notable slowdown in some of Crown's end markets as the coronavirus pandemic takes hold. The decline in the on-premise consumption of Crown's products will significantly reduce its volumes for the remainder of the year given that most restaurants, bars, and similar establishments remain closed, according to S&P. "In addition, as the level of disposable income shrinks due to large-scale unemployment, we expect consumers will begin to shift their spending away from discretionary products, such as beer and alcoholic beverages, and toward necessary staples. Crown expects to see significant volume declines in its Latin American and Southeast Asian markets, including a particularly acute decline in Brazil and other areas with higher levels of poverty," the rating agency said. Additionally, hard-hit areas in Europe, such as Italy and the U.K., will see lower levels of demand this year. However, S&P continues to believe that the demand for Crown's products, while lower, will remain somewhat resilient because people need access to food and beverages as they shelter in place. "The company projects that U.S. demand will remain strong and expects its cans to sell out such that it will need to provide additional volume from its manufacturing facilities in Mexico. Still, given the uncertain global demand projections and the company's current high S&P-adjusted debt balance, we project that its adjusted debt to EBITDA could rise above 5x and remain there for some time. The negative outlook reflects that we will lower our rating if we no longer believe the company can sustain leverage of less than 5x," S&P said. The negative outlook reflects the growing uncertainty around the coronavirus pandemic and how significantly the high unemployment and reduced discretionary income will effect the demand for some of Crown's products. Under S&P's base-case forecast, it expects the company's leverage to increase above 5x this year before improving below 5x in 2021. "We could lower our rating on Crown if we expect the company to be unable to sustain leverage of less than 5x, which could occur if the pandemic lasts longer than we expect or has a greater-than-anticipated pressure effect on Crown's end markets," S&P said. "We could revise our outlook on Crown to stable if we believe the company will be able to maintain adjusted leverage of less than 5x, which could occur if the company is able to control its costs and preserve its net debt position and its end market volatility abates," the rating agency said. DAIRY FARMERS: Moody's Alters Outlook to Stable on Acquisition -------------------------------------------------------------- Moody's Investors Service affirmed all ratings for Dairy Farmers of America, Inc. and changed its rating outlook to stable from negative. This change follows the closing of DFA's purchase of 44 facilities from Dean Foods Company for $433 million financed by a new $450 million delayed draw term loan (not rated by Moody's). Three of these facilities will be held separate and divested at a later date as agreed upon with the Department of Justice. The rating affirmations and change to a stable outlook reflect that DFA's purchase of various plants from bankrupt Dean provides clarity on the outlet for DFA members' milk though it also increases business risk and leverage. The purchase of Dean's facilities is only modestly leveraging to DFA allowing it flexibility to improve the profitability of the acquired assets over time. The acquisition will increase business risk for DFA as the company looks to integrate operations subject to meaningful competition and with significant exposure to declining fluid milk consumption that has been challenged for several years. Dean's business has also suffered a series of operational missteps, such as poor management of regional brands and poor execution of plant closings, that contributed to a material loss in customer contracts and declining earnings and significant cash consumption. DFA's ability to turn around Dean's business will be dependent on successfully gaining back customers, improving customer relationships and restoring profitability at underperforming plants. DFA will be taking over the Dean operations at a time when the fluid milk industry is under pressure from declining consumption volume and disruptions from the coronavirus outbreak. Although DFA has experience in the fluid milk business, the purchase of Dean's facilities will add a low margin business that is approximately five times larger than that of DFA's existing fluid milk business. DFA has identified approximately $100 million in synergies at Dean that it believes can be achieved over an 18-month horizon. Moody's expects that these synergies are somewhat achievable though realizing these synergies and translating them into sustainably higher earnings will be challenging because of the industry pressure and competition. Realizing the cost savings may also take longer to achieve and be costlier to implement. These risks are in addition to other risks associated with DFA including earnings volatility in the value-add businesses, the low margin commodity nature of fluid milk, and recent aggressive pace of acquisitions that has led to higher financial leverage. Notwithstanding these challenges, Moody's believes that the purchase of Dean has strategic merits because DFA sells approximately 16% of its milk volume to Dean, thus ensuring a continued and undisrupted outlet for its members' milk. Dean's large size and national presence makes it a critical outlet for DFA farmers. Additionally, most of the plants DFA acquired are profitable or are important to its member farmers with a path to turning profitable. As a result of this acquisition, Moody's estimates that debt to EBITDA will increase to 3.5x (versus 3.1x as of December 2019) and will decline to around 3.3x by December 2021, which is within Moody's leverage expectations for the ratings given the company's operating profile. Moody's took the following rating actions on Dairy Farmers of America, Inc: Ratigs Affirmed: Senior Unsecured Notes at Baa2 Preferred Stock at Ba1 Commercial Paper at Prime-2 The outlook was changed to stable from negative RATINGS RATIONALE DFA's Baa2 rating is supported by its position as the largest farmer-owned dairy marketing cooperative in the United States. DFA and its members benefit from the cooperative's significant network of owned and affiliated processors and food & beverage manufacturers that provide stable outlets for members' milk. DFA's cooperative structure provides important financial flexibility that in a stress scenario and on an infrequent basis would allow the cooperative to quickly improve cash flow through adjustments in milk payments to member farmers. Recent positive changes to the company's equity capital plan has enhanced its liquidity position as the company retains more payments from member farmers. Notwithstanding this flexibility, the company must maintain a relatively conservative financial profile in order to successfully manage the earnings volatility that is inherent in its value-added and affiliate businesses due to fluctuations in milk input costs. DFA's credit profile also is constrained by the underlying low-margin and commodity nature of the core fluid milk business that represents approximately 66% of sales and 26% of EBITDA. The stable outlook reflects Moody's expectation that DFA will successfully execute the integration of Dean's assets and related cost savings such that these assets will become meaningfully profitable in 2021 and contribute modestly to DFA's overall profitability. The $433 million purchase provides DFA some cushion within the leverage expectations for the rating category should operational improvements or cost savings be less than expected or take longer to materialize. Moody's also assumes that milk processing volumes will decline because of lower demand related to the coronavirus, primarily in foodservice channels, but that DFA will reduce debt or take other measures to maintain debt-to-EBITDA at 3.5x. ESG considerations include high social risks associated with the coronavirus outbreak given the substantial implications for public health and safety. The rapid and widening spread of the coronavirus outbreak, lingering state closures, deteriorating economic outlook, and falling oil prices are creating a severe and extensive credit shock across many sectors. The combined credit effects of these developments are unprecedented. The protein and agriculture sector has been somewhat affected by the shock given its sensitivity to consumer demand and sentiment including a negative effect on milk prices. More specifically, there could be shifts in market sentiment during these unprecedented operating conditions and DFA remains vulnerable to potential outbreaks at its plants, though no material outbreaks have been noted to date. The company's financial policy reflects increasing governance risks. In recent years, DFA completed several acquisitions that expanded its production capacity in value-added products such as cheese, cream, butter, seasoning, and premium dairy- and non-dairy-based beverages. These investments provide additional outlets for DFA's members' milk and improve the company's product mix toward higher margin business, but the acquired assets are in competitive markets with more business risk since they do not have the built-in flexibility of the cooperative structure. The Dean acquisition will significantly increase DFA's scale in the fluid milk business by roughly five-fold, but will add a lower margin business that contributed to Dean's 2019 bankruptcy filing. The pace of acquisitions and financial strategy related to this activity has increased DFA's debt and financial leverage, which Moody's sees as a corporate governance negative and over time has weakened the company's overall credit profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if there is significant earnings deterioration in the company's businesses, a shift in industry fundamentals weakens the company's core business model, the integration of Dean and related synergies do not go as planned, or if the company makes additional debt-financed acquisitions that cause financial leverage to rise materially. Quantitatively, if debt to EBITDA is sustained above 3.5x, or retained cash flow to net debt falls below 20%, a downgrade could occur. Ratings could be upgraded if DFA sustains stable operating performance, moderates its pace of debt-financed capital investments, and successfully integrate Dean and other recent acquisitions to increase the earnings base. Quantitatively, ratings could be upgraded if debt to EBITDA is sustained below 2.5x, and retained cash flow to net debt is sustained above 25%. Dairy Farmers of America, Inc., headquartered in Kansas City, Kansas, is the leading US national milk marketing cooperative. It is owned by and serves more than 13,000 dairy farmer members representing more than 7,500 dairy farms in 48 states. DFA reported revenue of approximately $16 billion for the twelve months ended December 31, 2019 and annual revenue pro forma for the Dean acquisition is approximately $20 billion. The cooperative markets about 30% of the total milk volume in the United States. DALTON LOGISTICS: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Dalton Logistics, Inc. About Dalton Logistics Dalton Logistics, Inc. is a privately held company in the general freight trucking industry. Dalton Logistics, Inc., based in Kingwood, TX, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-30902) on Feb. 3, 2020. In the petition signed by Richard Meredith, president, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Hon. David R. Jones oversees the case. Melissa A. Haselden, Esq., at HooverSlovacek LLP, serves as bankruptcy counsel to the Debtor. DECLARATION BREWING: Faces Eviction From Landlord ------------------------------------------------- Aaron Kremer, writing for BusinessDen, reports that BaseCamp, the landlord who owns an Overland brewery building, wants to evict tenant Declaration Brewing from the space it rented. According to court filings, Declaration Brewing missed its rent worth $14,500 for April 2020. Declaration sold its facility at 2030 S. Cherokee St. to BaseCamp for $2.5 million in 2018 and rented it back. BaseCamp is asking the Court to let it take the property back and keep all the equipment inside. Early this year, Basecamp sued Declaration over back rent just before the company filed for bankruptcy. BaseCamp is represented by Donald Farlow and Robert Cosgrove from the firm Burns, Wall and Mueller. About Declaration Brewing Co. Declaration Brewing Company, Inc., is a restaurant and brewery with significant local distribution and following. Declaration Brewing is situated in Denver, Colorado. It produces more than 70 unique beers, like sours, barrel-aged, lagers, and ales. Its brewhouse is equipped with 20 barrel brew system, advanced canning line, proprietary yeast program, and quality assurance laboratory. Declaration Brewing Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-10221) on Jan. 13, 2020, listing under $1 million in both assets and liabilities. The Debtor tapped Devon Barclay, PC as its legal counsel, and Dennis & Company, P.C. as its accountant. DEL MONTE FOODS: S&P Assigns Prelim CCC+ Rating to Secured Bonds ---------------------------------------------------------------- S&P Global Ratings assigned a preliminary 'CCC+' issue-level and '3' recovery rating to U.S.–based Del Monte Foods Inc.'s proposed senior secured notes and placed its issuer credit rating on the company on CreditWatch with positive implications. DMFI is launching a $500 million senior secured bond offering and is seeking a new $450 million ABL facility (unrated) to refinance its existing capital structure that are current obligations. S&P said the rating actions reflect uncertainty around successful completion of the proposed transaction at reasonable terms. "The CreditWatch placement reflects our view that if the proposed transaction is completed with reasonable terms, we would likely raise our issuer credit rating by one notch to 'CCC+' from 'CCC'. We believe that the probability of the transaction being completed has increased from March, when market conditions were less favorable. DMFI's operating performance has been positively affected by the COVID-19 pandemic as consumers pantry-load and increase their at-home food consumption," S&P said. "We plan to resolve the CreditWatch when the proposed refinancing is completed and maturities at the group level are refinanced. Once we resolve the CreditWatch placement, which could occur in the coming weeks, we may raise or affirm our rating on the company. Specifically, we could affirm our rating on DMFI if we believe that it or the group will not be able to refinance in a timely manner with reasonable terms. Alternatively, we could affirm the rating if it completes the refinancing but we believe the terms are so onerous that it couldn't sustain its capital structure over the long term. On the other hand, we could raise our rating on DMFI if it launches a refinancing and we believe it will complete the process in a timely manner and at reasonable terms," S&P said. DETROIT, MI: S&P Alters GO Debt Rating Outlook to Negative ---------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable on its 'BB-' issuer credit rating (ICR) on Detroit and its 'BB-' long-term rating on the city's series 2018 unlimited-tax general obligation (GO) bonds. "The outlook revision reflects our view that Detroit is facing significant fiscal and economic pressure stemming from the COVID-19 pandemic and ensuing recession," said S&P Global Ratings credit analyst John Sauter. In S&P's view, the health and safety aspects of the pandemic and resulting shelter-in-place order directly affects revenue-generating capacity and will weaken all aspects of the budget and financial profile, and is reflected as a social factor in the rating agency's analysis of environmental, social, and governance (ESG) related risks. The negative outlook reflects S&P's view of at least a one-in-three likelihood it could take a negative rating action over the short term (generally up to one year for speculative-grade credits). The series 2018 bonds are secured by Detroit's full faith and credit unlimited-tax GO pledge. "In our view, Detroit is adequately situated to absorb the pressures over the coming months given its proactive management that has acted quickly and its very strong reserve and liquidity position," said Mr. Sauter, "but a delayed return to pre-pandemic revenue stability or much steeper decline in revenues than projected, would prove very challenging for the city." In that scenario, Detroit would likely be operating with much lower reserves and liquidity, an already thinned out workforce with increasing fixed costs looming, and still-pressured revenues. The city was already planning for ramped-up pension contributions (through deposits to the Retiree Protection Fund [RPF]), but there is now increased risk of these costs escalating due to investment returns not meeting targets. These factors could also potentially, in S&P's view, lead to continued deferral of planned capital spending and blight removal that are important in the revitalization of Detroit's neighborhoods and economy. "Therefore, over the next year, if the city's reserves are depleted more than projected or it is facing an operating deficit that we anticipate will lead to either further cost deferrals or continued large use of reserves, we could lower the rating," said Mr. Sauter, "though likely further out on the time horizon, we could also do so if we feel the city does not remain adequately positioned to absorb future fixed-cost increases while remaining operationally balanced." Factoring in the unprecedented depth and speed of the national economic decline, combined with Detroit's heavy reliance on economically sensitive revenues from an already vulnerable tax base, S&P feels this pressured revenue scenario is possible. The latest revisions to S&P Global Economics' U.S. forecast indicates a much steeper economic drop and a longer recovery than originally anticipated (see: "An Already Historic U.S. Downturn Now Looks Even Worse," published April 16, 2020, on RatingsDirect), and the rating agency expects pressure to be particularly acute in Detroit and southeast Michigan. Both the city and state were slow to recover from the last recession (when city unemployment peaked above 26%), and Detroit is beginning this one with already high unemployment of 8.7%, prior to any increases resulting from COVID-19 unemployment claims. In S&P's report titled "Credit Conditions North America: Pressures Persist, Risks Resound" (published April 23, 2020), the rating agency identified trade disputes and characterized auto and gaming, leisure, and lodging sectors as high risk, and note that Detroit has increased exposure to these sectors, which could weaken revenues and limit revenue-raising abilities during the recession. Ratings in the 'BB' category are differentiated from those in the 'B' category, based on S&P's view that exposure to adverse business, financial, or economic conditions could impair an obligor's ability to meet financial commitments, but is not likely to. S&P generally expects this will hold true for Detroit over the next year as the city is starting from its strongest financial position in years, allowing it to lean heavily on built-up reserves to continue funding relief efforts, daily operations, and debt service without interruption. However, as the depth and length of the recession plays out, Detroit will likely emerge with a much more narrow reserve position and tighter budget. Should the city's spending cuts and revenue forecasts hold true, and S&P feels it is adequately positioned in the near term to continue reducing operating costs to absorb rising fixed costs without further depleting reserves by large amounts, the rating agency could revise the outlook to stable. As noted, the city currently has very strong reserves and liquidity, and it acted fast to put a plan in place to address its revenue shortfalls. To date, management has remained on track with or ahead of the objectives defined in the Plan of Adjustment (POA) and subsequent planning documents, and it remains fully committed to continuing this. ECHO ENERGY: June 15 Auction of Substantially All Assets Set ------------------------------------------------------------ Judge David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas authorized Echo Energy Partners I, LLC's bidding procedures in connection with the auction sale of all of its oil and gas assets, including but not limited to, interests in oil and gas leases, related inventory and equipment, and various personal property. The salient terms of the Bidding Procedures are: a. Bid Deadline: June 11, 2020 at 4:00 p.m. (CT) b. Initial Bid: Each bid must identify the cash consideration to be paid for relevant Assets or the amount of any credit bid as allowed thereunder. c. Deposit: Each bid must be accompanied by a purchase deposit equal to or greater than 10% of the total Purchase Price. d. Auction: In the event that the Debtor timely receives one or more Qualifying Bids, the Debtor will conduct the Auction starting at 10:00 a.m. (CT) on June 15, 2020 at the law offices of Bracewell LLP, 711 Louisiana Street, Suite 2300, Houston, Texas 77002. e. Bid Increments: $100,000 f. Sale Hearing: June 17, 2020 at 2:30 p.m. (CT) g. Sale Objection Deadline: June 11, 2020 at 4:00 p.m. (CT) h. The rights of all parties in interest, including the Agent and the Debtor's operators, to submit a credit bid in accordance with Section 363(k) of the Bankruptcy Code are reserved. The Agent (or its designee), on behalf of the Pre-Petition Lenders or Post-Petition Lenders, as applicable, will be permitted to submit a credit bid at the Auction, and the Agent will notify the Debtor of its intention to potentially credit bid no later than the Bid Deadline. The Assets sold pursuant to the Bidding Procedures will be sold free and clear of all liens claims and encumbrances in their then-present condition, "as is, where is, with all faults, and without any warranty whatsoever, express or implied." Not later than five business days after the entry of the Order, the Debtor will cause the Sale Notice to be published once in a national edition of a United States newspaper. The assumption and assignment procedures set forth in the Sale Motion are approved and made part of the Order as if fully set forth therein. The Debtor will cause the Cure Notice to be provided to any counterparties to any Assigned Contract by May 12, 2020. The Cure Notice Objection Deadline is June 11, 2020 at 4:00 p.m. (CT). All time periods set forth in the Order will be calculated in accordance with Bankruptcy Rule 9006(a). If an official committee of unsecured creditors is appointed, the Committee may file a motion to seek relief from the Order. Any such motion will be filed no later than 15 days after the Committee's appointment (or otherwise be time barred), and all parties-in-interests (including the Debtor) reserve the right to object to and oppose any such motion filed by the Committee. A copy of the Bidding Procedures is available at https://tinyurl.com/yc99oepx from PacerMonitor.com free of charge. About Echo Energy Partners I Echo Energy Partners I, LLC -- https://www.echoenergy.com/ -- is an upstream oil and gas firm that partners with financial institutions, pension funds, family offices, and high net worth individuals. It currently manages assets in the SCOOP, STACK, Midland, and Delaware basins in Oklahoma and Texas. Echo Energy Partners I sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31920) on March 24, 2020. At the time of the filing, the Debtor was estimated to have assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. Judge David R. Jones oversees the case. The Debtor tapped BRACEWELL LLP as legal counsel; Stretto as claims agent and administrative advisor; and Opportune LLP as restructuring advisor. Gregg Laswell a director at Opportune's subsidiary, Dacarba LLC, is the Debtor's chief restructuring officer. ELDORADO RESORTS: S&P Lowers ICR to 'B' on Uncertain Recovery ------------------------------------------------------------- S&P Global Ratings lowered all ratings on U.S. gaming operator Eldorado Resorts Inc. one notch, including its issuer credit rating, to 'B' from 'B+'. "We believe combined pro forma adjusted leverage will improve after a significant spike in 2020, but still be above the threshold for the prior rating despite the combined company's improved business position. Our forecast for combined adjusted leverage in 2021 of above 8x is higher than our prior forecast for leverage in the low- to high-7x area due to the significant expected loss of revenue and cash flow in 2020 from the temporary closure of operations, and our assumption for a slow ramp-up once casinos open," S&P said. "Even though we view the merger with Caesars favorably because it adds scale and diversity to Eldorado's operations and gives it access to Caesars' player loyalty database and portfolio of destination properties in Las Vegas, we believe adjusted leverage above 8x is high for the combined entity at the prior 'B+' rating. This is because much of the combined asset base will be subject to high lease payments, which can drive greater EBITDA volatility and significantly lower cash flow when revenues decline," the rating agency said. The ratings remain on CreditWatch with negative implications, reflecting a very high degree of uncertainty as to the ability to recover next year and begin reducing leverage after a significant spike in 2020. "In resolving the CreditWatch placements, we plan to monitor Eldorado's and Caesars' prospects for beginning to reopen their casinos, assess customer demand upon reopening and how they respond to likely social distancing measures and other operational changes to enhance health and safety, and how plausible our assumed recovery path is in light of that demand. We will assess the final capital structure of the combined entity, the potential for additional revenue and cost synergies over the next year, and the likelihood that Eldorado can start to significantly reduce leverage later this year and into next," S&P said. EVERMILK LOGISTICS: Unsec. Creditors to Get Full Payment in Plan ---------------------------------------------------------------- Debtor Evermilk Logistics, LLC, filed with the U.S. Bankruptcy Court for the Nothern District of Indiana, Fort Wayne Division, a Disclosure Statement for Plan of Reorganization dated April 16, 2020. The Debtor's primary source of income is from hauling milk for Dairy Farmers of America, Inc., from regional dairies. The Debtor also derives income from consulting services to commercial dairies. Evermilk Logistics, LLC has, since the filing of the Petition, continued in its operation. The Debtor has ongoing business and lease payment obligations to the referenced deposit holders and, in a hypothetical liquidation, the Debtor sets forth and anticipates that such deposit creditors would set-off against the deposits for outstanding, post-petition unpaid balances incurred in the ongoing operation of the Debtor such that, in a liquidation, there would be no proceeds available from the deposits for distribution to unsecured creditors. The Debtor scheduled assets based upon Debtor’s opinion of value in consideration of the cost, years in service, and condition of the equipment and referenced assets. In a hypothetical liquidation, given the items’ age, potential use, and condition, as well as costs associated with sale, the Debtor estimates that a hypothetical liquidation would likely result in proceeds of approximately 30% to 40% of the scheduled values, or approximately $9,000.00. This amount would be available for distribution to the secured claims of the IRS and/or IDR such that in a hypothetical liquidation there would be proceeds available for distribution to unsecured creditors. Class 8 will consist of Unsecured Claims, including all claims not included in Classes 1-7. The Allowed Claims of this Class shall be paid in full. The holders of an Allowed Claim in this Class shall retain all their prepetition rights appertaining thereto. This Class is not impaired. Class 9 shall consist of the Interest Holder. The prepetition equity security interest (i.e., membership interest) shall be retained by the holder, subject to the provisions set forth in the Plan. This Class is not impaired. On the effective date, all property comprising the estate of the Debtor shall revest in reorganized Debtor and shall become property of the reorganized Debtor free and clear of all claims, liens, charges, encumbrances and interests of creditors and equity security holders. A full-text copy of the disclosure statement dated April 16, 2020, is available at https://tinyurl.com/ycm8lugg from PacerMonitor at no charge. About Evermilk Logistics Evermilk Logistics LLC -- http://www.evermilklogistics.net/-- is a member-managed Indiana limited liability company wholly owned by Teunis Jan Willemsen. It operates a commercial milk hauling trucking business. Its principal place of business is at 6615 W. 500 N., Frankton, Indiana 46044. Evermilk hauls milk for local dairy farms that sell milk to Dairy Farmers of America. Evermilk has been taking milk to the Eastern and Central United States, and currently is picking up 20-25 tanker loads of milk each day. It currently employs more than 60 driver and administrative or maintenance personnel. Evermilk Logistics LLC filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 17-03613), on May 15, 2017. In the petition signed by Teunis Jan Willemsen, member, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Jeffrey J. Graham. The Debtor is represented by Terry E. Hall, Esq., at Faegre Baker Daniels LLP. No trustee or examiner has been appointed, and no committee has yet been appointed or designated. EVOQUA WATER: S&P Alters Outlook to Stable, Affirms 'B' ICR ----------------------------------------------------------- S&P Global Ratings revised the outlook on U.S.-based water product, solution, and service provider Evoqua Water Technologies Corp. and its subsidiary EWT Holdings III Corp. to stable from positive and affirmed all ratings, including the 'B' issuer credit ratings on the companies. The recovery ratings are unchanged. S&P forecasts weaker demand could reduce volumes and profitability in 2020, increasing the likelihood that leverage will be above 5x over the next 12 months. Following a $100 million debt repayment during the second quarter of the company's fiscal 2020, S&P views Evoqua's adjusted leverage as about 4.5x as of Dec. 31, 2019, pro forma for this payment. However, S&P believes Evoqua's hydrocarbon, chemical, and marine end markets, which the rating agency estimates represent a mid-teens percent share of the company's revenue, have weakened significantly. "Although its demand from remaining end markets has been resilient, we see increased risk that customers exposed to industrial production and consumer spending could reduce or delay demand for Evoqua's offerings. The company's third and fourth quarters, ending in June and September, respectively, are generally the most significant from a revenue, EBITDA, and cash flow perspective. Therefore, demand and operating challenges over the summer could hurt Evoqua's fiscal 2020 financial metrics," S&P said. The stable outlook on Evoqua Water Technologies Corp. reflects S&P's expectation that the company will maintain S&P adjusted leverage in the 5x-6x range over the next 12 months, incorporating the rating agency's expectation for softer earnings from decreased sales and operating challenges caused by the coronavirus and macroeconomic decline. "We could raise our ratings on Evoqua over the next 12 months if it maintains leverage below 5x through the downturn, causing us to view the business as stronger and more resilient. In this scenario, we would expect Evoqua's acquisition strategy to accommodate sustained leverage below 5x. In order to raise the rating, we would also need to view the macroeconomic environment as more stable than it currently is," S&P said. "We could lower our ratings on Evoqua if the conditions in the company's end markets deteriorate more than we expect and significantly reduce its revenue, if its operating costs are higher than we anticipate, or if it completes significant acquisitions that we forecast will cause leverage to exceed 6.5x on a sustained basis," S&P said. FABRICMASTER LLC: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Fabricmaster, LLC, according to court dockets. About Fabricmaster LLC Fabricmaster, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-13097) on March 5, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. Judge A. Jay Cristol oversees the case. Kenneth S. Abrams, P.A., is the Debtor's legal counsel. FARMERS GRAIN: Trial Required in Case Trustee Dispute v CFL et al. ------------------------------------------------------------------ Bankruptcy Judge Terry L. Myers denied both the Trustee's and the Defendant's motion for summary judgment in the cases captioned NOAH G. HILLEN, Trustee, Plaintiff, v. CLARICH FARMS, LLC, Defendant. v. DESERET FARMS, INC., Defendant. v. FRAHM FARM, LLC, Defendant. v. GW FARMS, LLC, Defendant. v. PETERSON FARMS OF NYSSA, INC., Defendant, Adv. No. 19-06009-TLM., 19-06010-TLM, 19-06011-TLM, 19-06013-TLM, 19-06015-TLM (Bankr. D. Idaho.). Farmers Grain, LLC filed a petition for relief under chapter 11 on April 18, 2017. The case was converted to a liquidation under Chapter 7 on August 15, 2017. A chapter 7 trustee, Noah Hillen was appointed. In the process of administering the case, the Trustee determined that causes of action to recover alleged preferential transfers should be pursued. At issue are the Trustee's complaints commencing adversary proceedings against Clarich Farms, LLC; Deseret Farms, Inc.; Frahm Farm, LLC; GW Farms, LLC; and Peterson Farms of Nyssa, Inc. In each such action, the Trustee alleges Defendants' receipt of certain funds from Debtor constitute preferential transfers under 11 U.S.C. section 547(b). The five Defendants -- who are represented by the same law firm -- each dispute the Trustee's basic allegations and contend there was no preference under 11 U.S.C. Sec. 547(b)(1)-(5) and, if there was a preference, defenses exist under section 547(c). On Jan. 7, 2020, each Defendant filed a motion for summary judgment under Fed.R.Bankr.P. 7056 and Local Bankr. Rule 7056.1. On Jan. 15, 2020, the Trustee filed his own motion seeking summary judgment in each case. Each Defendant filed its motion on Jan. 7, 2020. In support of the motion, each Defendant also filed on the same date a brief, several declarations, and a Statement of Disputed/Undisputed Facts ("Statement"). Then, on Jan. 15, the Trustee filed his own motion, a brief in support of the motion, a Statement, a declaration of Trustee, and another declaration of Chester Millsap as a Farmers Grain employee. Thereafter, on Jan. 29, Trustee filed a brief opposing Defendant's motion, and a "Response" to Defendant's Statement challenging its assertion of "undisputed" facts. Later that same day, Defendant filed a brief opposing Trustee's motion and a document similarly disputing Trustee's Statement. Finally, on Feb. 5, both parties filed reply briefing. Similar filings were made in the other four adversary proceedings. The Court has reviewed them all. The Court has also evaluated the dockets in the other four cases, and found that the timing and nature of the submissions are almost identical, including virtually verbatim assertions in the declarations. While there are some differences because there are separate Defendant entities, wheat was delivered on separate dates, wheat was paid for on separate dates, and the "Defendant's declaration" came from different individuals who describe their own relationship with Farmers Grain, there was much repetition and such differences do not impact the Court's analysis of the motions for purposes of this Decision. The Trustee's complaints concern soft white wheat grown by Defendants. The parties agree that SWW is harvested in July of each year. At issue is the SWW harvested by Defendants in the summer of 2016 and delivered at that time to Farmers Grain. The Trustee seeks to avoid certain payments thereafter made to Defendants in 2017 prior to the April 18, 2017 petition date. The Trustee contends Farmers Grain operated a grain elevator business through which it bought, and thereafter sold, grain including SWW. The Trustee contends Defendants' delivery of the grain at issue in these cases in the summer of 2016 was not a warehousing or bailment. Rather, the Trustee argues there was a sale of the grain to Farmers Grain at the time of delivery by Defendants and similarly situated farms. The Trustee argues Defendants were creditors as a result of such sales, and the specific payments for the grain at issue occurred within 90 days of Farmers Grain's chapter 11 filing constituting preferential transfers. The primary contention of each Defendant is that it was not a "creditor" of the Debtor because the SWW was not "sold" to the Debtor and, thus, it did not receive a transfer, as a creditor, on account of an antecedent debt, as required under section 547(b)(1) and (2). Instead, Defendants posit that Farmers Grain was a "grain storage facility" and would, under a "statutory bailment relationship," store the grain delivered by each Defendant until such time as that Defendant (which regularly monitored the market price for the commodity) directed that it be sold. Defendant then would receive the value of the grain, priced as of such date, less a calculated "storage fee." Defendants also assert several defenses in the event the Court were to determine they were creditors and the section 547(b) requirements were met. They argue (a) they had a statutory lien under applicable state law and thus were not unsecured creditors, (b) the storage and sale was consistent with the parties' ordinary course of business; and/or (c) the sale of the grain and payment to Defendants constituted a contemporaneous exchange. Consistent with LBR 7056.1, the parties provided Statements setting forth alleged undisputed facts in support of their respective motions. They also filed responses to the other's Statements, contending that certain allegedly undisputed facts were in fact disputed. Having reviewed the Statements at length, the Court is confident that only a small subset of factual assertions in the Statements could be legitimately claimed to be "undisputed" by both parties. According to Judge Myers, the Court should not be expected to mine submissions to determine on its own the absence of genuine issue of material fact. The burden, as noted, rests on the movant to establish there is no genuine issue of disputed fact. While Defendants and the Trustee filed Statements alleging undisputed facts supporting their motions, the responses to those Statements manifest significant material dispute. Moreover, the Millsap Declarations create their own factual questions, which are not resolved by the other declarations, nor assuaged by counsels' competing arguments. The Court finds and concludes both motions will be denied. While it has outlined several of the disputes, of fact and law, that appear to be implicated by the motions and their supporting and opposing submissions, the Court has reached no conclusions and has not reached or made any factual findings. A copy of the Court's Memorandum Decision dated March 9, 2020 is available at https://bit.ly/3bb3LfC from Leagle.com. Noah G. Hillen, Plaintiff, represented by Jed W. Manwaring, Evans Keane LLP. Clarich Farms, LLC, Defendant, represented by Melodie Annalise McQuade -- melodiemcquade@givenspursley.com -- Givens Pursley LLP & Randall A. Peterman -- rap@givenspursley.com -- Givens Pursley LLP. About Farmers Grain LLC Based in Nyssa, Oregon, Farmers Grain LLC buys and sells grain, dry, soya, and inedible beans. Farmers Grain holds a fee simple interest in a real property located at 110, 114, & 255 King Ave. in Nyssa, including all structures and other fixtures valued at $4.13 million. Farmers Grain sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No. 17-00450) on April 18, 2017. The petition was signed by Galen Jantz, manager. At the time of the filing, the Debtor disclosed $14.10 million in assets and $15.55 million in liabilities. On August 15, 2017, the case was converted to a liquidation under Chapter 7. The case is assigned to Judge Terry L. Myers. Angstman Johnson is serving as counsel to the Debtor, with the engagement led by Matthew T. Christensen. FCPR ACQUISITION: Trustee's $30K Sale of Trucks to DC Foam Approved ------------------------------------------------------------------- Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida authorized Alex Moglia, the chapter 11 Trustee for FCPR Acquisition, LLC, Cedar Plastics, LLC, and Cedar Trucking, LLC, to sell FCPR's trucks to DC Foam Recycle, Inc. for $30,000. A hearing on the Motion was held on April 2, 2020 at 1:00 p.m. The Trucking Sale is on an "As-Is, Where-Is" basis but free and clear of all claims, liens, interest and encumbrances with any liens to attach to the Sale Proceeds. The purchase price to be paid under the Trucking Offer less an amount equal to 17.5% of the Sale Process to pay (a) the fees payable to the United States Treasury, (b) then to the allowed administrative expenses for compensation and reimbursement for the Trustee, the Jennis Law Firm (as the counsel to the Debtors and special counsel to the Trustee) and the counsel to the Committee of Unsecured Creditors. In consideration of the Carve Out, the Trustee waives any right to surcharge with respect to any of the Sale Assets under Section 506. The Purchaser purchased the assets identified on the Appraisal. The Sale Assets do not include the (1) 2019 Dell'Orco & Villani Carpet U Puller that was the subject of the NMCT Objection. The U-Puller is not authorized to be sold pursuant to the Order. A party asserting a competing claim to the Sale Proceeds or claiming a lien, security interest, or other interest in the Sale Proceeds, must file a claim notice with the Court on May 18, 2020, including all supporting documentation for attachment and the basis of perfection of such interest. Any claims to the Sale Proceeds will be considered at a preliminary hearing on May 29, 2020, at 2:00 p.m. On Friday of each week beginning on April 24, 2020, the Trustee will report a summary of his activity related to the Sale Order. The Purchaser will promptly remove any Sale Assets purchased at its sole expense. ARA Properties No. 3, LTD may file an application for the allowance of an administrative expense and include any costs incurred in connection with the removal of the Sale Assets. ARA will provide reasonable access to its property to facilitate the removal of the Sale Assets. The purchaser(s) of any Sale Assets as approved by the Order is entitled to immediate and exclusive possession of the Sale Assets wherever and however the purchaser may locate the Sale Assets. Based on the circumstances of these cases, the Court finds it is appropriate to establish an expedited procedure for additional sales of property to the extent identified and located by the Trustee or his agents. Any motion seeking approval of Additional Sales will be considered on an expedited basis with any claims to any sale proceeds for Additional Sales as provided in the Order. All motions for Additional Sales may be heard on May 11, 2020 at 2:30 p.m., May 29, 2020 at 2:00 p.m., or specially set. Effective, March 16, 2020, and continuing until further notice, the Judges in all Divisions will conduct all preliminary and non-evidentiary hearings by telephone. For Judge Delano, parties should arrange a telephone appearance through Court Call (866-582-6878). About FCPR Acquisition FCPR Acquisition, LLC, provides carpet recycling services. The company is doing business as Florida Carpet & Pad Recycling. FCPR sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-08611) on Sept. 11, 2019. Its affiliates, Cedar Plastics, LLC (Bankr. M.D. Fla. Case No.19-09429) and Cedar Trucking, LLC (Bankr. M.D. Fla. Case No.19-09430) filed Chapter 11 petitions on Oct. 3, 2019. The cases are jointly administered under Case No. 19-08611. At the time of the filing, FCPR and Cedar Plastics were estimated to have assets of less than $50,000 and debts of less than $10 million. Cedar Trucking had estimated assets of less than $50,000 and liabilities of less than $1 million. The cases have been assigned to Judge Caryl E. Delano. The Debtors are represented by Daniel E. Etlinger, Esq., at Jennis Law Firm. The U.S. Trustee for Region 21 on Nov. 15, 2019, appointed three creditors to serve on the official committee of unsecured creditors. The Committee retained Buss Ross, P.A., as counsel. FERRO CORP: S&P Lowers ICR to 'B+' Amid Macroeconomic Uncertainty ----------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on U.S.-based Ferro Corp. to 'B+' from 'BB-'. At the same time, S&P lowered the issue-level rating on the company's first-lien term loan facility to 'B+' from 'BB-'. The recovery rating remains '3'. S&P believes a global recession will depress Ferro's EBITDA and weaken credit metrics in 2020. "We expect Ferro to face challenging macroeconomic conditions over the next 12 months after an already-weak 2019. Customers had been maintaining conservative inventory balances and reducing purchases in 2019 due to the weak economic environment. In 2020, we believe the coronavirus pandemic will further reduce demand for its products, as consumer spending plunges and business investments decline, particularly in segments related to autos, construction, and electronics," S&P said. "We expect credit positives on account of lower raw material costs, cost cutting actions and working capital cash relief. However, the magnitude of the demand drop more than offsets these positives. We now expect S&P Global Ratings-adjusted funds from operations (FFO) to debt will be below 12% in 2020, though above 12% on a forward-looking, weighted-average basis. We expect a slight rebound in 2021 as macroeconomic pressures subside," the rating agency said. The negative outlook on Ferro reflects the potential for weaker earnings and credit measures than what S&P considered in its base case. S&P's base case assumes a contraction in the U.S. and European economies, which hurts demand for the company's products. If the downturn is more severe or longer-lasting than S&P's base case, this weakness could prevent the company from reducing debt as quickly as the rating agency expects in its base-case scenario. S&P's base case assumes Ferro continues to maintain status quo operations, including its tile coatings business. The rating agency will review the company's business and capital structure near the close of the divestiture. It expects weighted average FFO to debt to be in the 12%-20% range. "We could lower the rating on Ferro over the next 12 months if we expect weighted average FFO to debt to drop below 12%, with no prospects for improvement. We could downgrade the company if macroeconomic weakness from the coronavirus pandemic proves to be more severe or longer-lasting that our base case, leading to prolonged weakness in demand in the company's end markets. We could also lower the rating if, combined with earnings pressure, the company undertook more aggressive financial policies, such as using sale proceeds from the tile coatings business to make an acquisition or pursue shareholder rewards, instead of reducing debt," S&P said. "We could revise the outlook to stable within the next 12 months if the macroeconomic environment recovers quickly from the coronavirus pandemic with limited signs of permanent demand destruction, causing us to believe the ratio of FFO to total debt would remain comfortably above 12% with no prospects for weakening. We would also consider a positive rating action if the company closes its divestiture and uses the proceeds to pay down debt," the rating agency said. FREEDOM MORTGAGE: Fitch Keeps 'BB-' LT IDR on Watch Negative ------------------------------------------------------------ Fitch Ratings has maintained the Rating Watch Negative on Freedom Mortgage Corporation's 'BB-' Long-Term Issuer Default Rating and 'B+' senior unsecured debt rating. This rating action was taken in connection with a peer review of eight non-bank mortgage companies. KEY RATING DRIVERS The maintenance of the Negative Watch reflects Fitch's expectation that Freedom could experience meaningful demand on its liquidity as a result of the widespread economic impact of COVID-19. Under the current servicing framework, the company is obligated to advance principal, interest, taxes and insurance for mortgages it services, which is likely to increase meaningfully in the coming months as consumers take advantage of the mortgage forbearance programs enacted by the federal government and several states. Additionally, mortgage servicing right valuations, which were already declining prior to the emergence of COVID-19, will continue to exhibit volatility and have the potential to increase leverage for Freedom, as would higher origination volume. Over the past several weeks, the U.S. Treasury, Federal Agencies, and the Federal Reserve have taken unprecedented actions to mitigate the economic damage stemming from COVID-19 and provide liquidity to key markets in order to keep them functioning given the high degree of economic uncertainty caused by the pandemic. Although extended forbearance programs for mortgage borrowers will create near-term cash flow challenges for mortgage servicers, the government agencies have responded by announcing varying degrees of support for mortgage servicers to help ease the strain of substantially higher servicing advance requirements. On March 27, Ginnie Mae announced the Pass-Through Assistance Program through which issuers with a principal and interest shortfall may request that Ginnie advance the difference between available funds and the scheduled payment to investors, although Ginnie stated that this program should be used by GNMA servicers as a last resort. As of Dec. 31, 2019, about 66% of Freedom's MSR portfolio was comprised of Ginnie loans. On April 21, 2020, the Federal Housing Finance Agency, which is the regulator of Fannie Mae and Freddie Mac, announced that GSE mortgage servicers will not have to advance P&I for more than four months of missed payments for borrowers in forbearance. This timeframe is consistent with the policy before COVID-19, when the GSEs generally purchased delinquent loans out of MBS pools after being delinquent for four months. Fitch views this development positively as it limits the potential liquidity strain on Freedom from the Fannie and Freddie portions of the MSR portfolio, which comprised approximately 34% of the MSR portfolio at Dec. 31, 2019. Additionally, Freedom's corporate credit facilities that are associated with Fannie Mae and Freddie Mac loans do have capacity to fund servicing advances in addition to MSRs. Fitch believes servicing advance requirements for Ginnie could be material depending on the peak levels and duration of forbearance programs and COVID-19 related delinquencies. The mechanics of servicing Ginnie loans provide some liquidity support as they allow servicers to utilize funds received for prepayments to temporarily cover the prior month's advance requirements. Prepayments are elevated at present, which should allow Freedom to cover advances in the near term, but a slowing of prepayment activity could reduce available liquidity and require Freedom to fund the shortfall from the balance sheet, which would strain liquidity and lead to higher leverage. Fitch does not expect Freedom to take advantage of the Ginnie PTAP given guidance from the agency that it should only be used as a last resort. However, Freedom is actively working to establish new funding capabilities for Ginnie servicing advances, which Fitch believes could support resolution of the Negative Rating Watch. As of Dec. 31, 2019, Freedom's liquidity consisted of cash on hand, available borrowing capacity on credit facilities secured by Fannie and Freddie MSRs and servicing advances, and available borrowing capacity on a facility secured by Ginnie MSRs. Since year-end, Freedom has increased cash balances to build liquidity and has, to date, been able to meet all margin calls on derivative positions and borrowing facilities. As of the Feb. 29, 2020, Freedom had available capacity of approximately $6.9 billion on committed and uncommitted warehouse facilities to fund new originations. Fitch evaluates leverage for mortgage lenders and servicers on the basis of gross debt to tangible equity. Freedom's leverage was 4.7x as of Dec. 31, 2019, slightly below Fitch's negative rating sensitivity of 5.0x. Should leverage be sustained above 5.0x over several consecutive quarters, Freedom's ratings could be downgraded. The fair value of Freedom's MSR portfolio accounted for a material amount of tangible equity at Dec. 31, 2019. MSR valuation is expected to decline significantly near-term given the reduction in interest rates coupled with a material increase in mortgage delinquencies given higher unemployment. Leverage will likely increase as MSR valuation adjustments reduce earnings and equity capital. Increased mortgage originations, which typically occur when there is a decline in interest rates, may also yield higher leverage, as originations would be funded with borrowings on warehouse facilities. The near-term impact of COVID-19 on mortgage originations remains to be seen, as historically low interest rates may continue to support refinancings and some purchase originations, but the social distancing, economic distress and technical challenges to physical mortgage closings wrought by COVID-19 may put a damper on home purchase activity in the near term. Freedom is not subject to material asset quality risks because mortgage loans are generally sold to investors within 90 days of origination. However, Freedom has exposure to potential losses within the servicing portfolio due to repurchase or indemnification claims from investors under certain warranty provisions. Freedom expects to continue to build reserves for new loan production to account for this risk, which Fitch believes is prudent. The asset quality performance of Freedom's servicing portfolio has been good in recent years, as delinquencies have been relatively stable. However, Fitch expects asset quality performance to weaken in the coming months as rising unemployment will lead to increased delinquencies within the servicing portfolio. The wide-ranging debt relief programs, in response to COVID-19, are expected to span multiple months although the number of consumers that will be granted forbearance is unknown. Once forbearance programs cease, Fitch expects that the macroeconomic effects of COVID-19 will continue to pressure asset quality metrics, leading to delinquencies remaining above historic averages for some period of time. The company's pre-tax returns on average assets (ROAA) and margins have declined modestly in recent years, given the issuance of more expensive unsecured debt. Still, between 2016 and 2019, Freedom generated an average pre-tax ROAA of 3.4%, which compares favorably to most peers. Lower interest rates are expected to drive higher levels of refinancing, which should benefit Freedom on the origination front, although lower rates will yield valuation write-downs on MSRs and servicing costs could increase with higher forbearance and delinquencies. As a result, Fitch expects Freedom's profitability metrics will moderate in the near term. Consistent with other mortgage companies, Freedom is reliant on the wholesale debt markets to fund operations. Secured debt, which was 82% of total debt at Dec. 31, 2019, is comprised of warehouse facilities and bank lines of credit used to fund the origination and servicing business. Unsecured debt represented 18% of Freedom's total debt, which is consistent with Fitch's 'bb' category benchmark range of 10%- 40% for balance sheet-intensive finance and leasing companies with an 'a' operating environment score. Fitch views the utilization of unsecured debt favorably, as it enhances the firm's funding flexibility in times of stress. Freedom's current ratings reflect its solid franchise and historical track record in the U.S. nonbank residential mortgage space, experienced senior management team with extensive industry background, a sufficiently robust and integrated technology platform, good historical asset quality performance in its prime servicing portfolio, adequate reserves to absorb a reasonable level of repurchase or indemnification demands, and appropriate earnings coverage of interest expenses. Fitch believes Freedom's multi-channel origination approach is well positioned relative to most peers, as it can provide more sustainable earnings through various interest rate and economic cycles. Freedom's retained-servicing business model serves also as a natural hedge, although not a full offset, to the cyclicality of the mortgage origination business. Fitch believes the highly cyclical nature of the mortgage origination business and the capital intensity and valuation volatility of MSRs of the mortgage servicing business represent primary rating constraints for nonbank mortgage companies, including Freedom. Furthermore, the mortgage business is subject to intense legislative and regulatory scrutiny, which further increases business risk, and the imperfect nature of interest rate hedging can introduce liquidity risks related to margin calls and/or earnings volatility. These industry constraints typically limit ratings assigned to nonbank mortgage companies to below investment grade levels. Rating constraints specific to Freedom include the company's continued reliance on secured, wholesale funding facilities and elevated key person risk related to its founder and Chief Executive Officer, Stanley Middleman, who sets the tone, vision and strategy for the company. The senior unsecured debt rating is one-notch below Freedom's Long-Term IDR, given the subordination to secured debt in the capital structure and, therefore, weaker relative recovery prospects in a stressed scenario. 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. Freedom has an ESG Relevance Score of 4 for Governance Structure due to elevated key person risk related to its founder and Chief Executive Officer, Stanley Middleman, who sets the tone, vision and strategy for the company. An ESG Relevance Score of 4 means Governance Structure is relevant to Freedom's rating but not a key rating driver. However, it does have an impact to the rating in combination with other factors. RATING SENSITIVITIES IDR AND SENIOR DEBT Factors that could, individually or collectively, lead to negative rating action/downgrade include an inability to maintain sufficient liquidity to effectively manage elevated servicer advance levels stemming from the increased use of forbearance by borrowers and the potential for higher delinquencies following the lapse of forbearance programs. Additionally, if Freedom's leverage were to remain above 5.0x over several consecutive quarters it would likely result in a ratings downgrade. Factors that could, individually or collectively, lead to positive rating action, including resolution of the Rating Watch, include Freedom's ability to maintain adequate liquidity to meet increased servicing advance requirements and execute on plans to expand funding sources. If the Rating Watch is resolved, Fitch believes Freedom's ratings and/or Outlook could still be modestly pressured, reflecting expectations for increased delinquencies, MSR valuation volatility, and growth in origination volume, all of which would likely cause leverage to periodically increase above Fitch's leverage sensitivity of 5.0x over the medium term. Fitch believes servicing costs could also increase to the extent delinquencies rise meaningfully, which could pressure earnings and interest coverage ratios. A return to a Stable Rating Outlook will depend on a clearer understanding of potential peak delinquency rates, MSR valuation marks, funding sufficiency for increased origination volume, near-term earnings performance, and confidence in the firm's ability to manage leverage at 5.0x or below. The senior unsecured debt is primarily sensitive to any changes to Freedom's Long-Term IDR and would be expected to move in tandem. Founded in 1990 and based in Mount Laurel, NJ, Freedom is a leading, private, full-service, nonbank mortgage company engaged in originating, servicing, selling and securitizing residential mortgage loans. In 2019, the company was the twelfth largest residential mortgage lender in the United States by closed loan volume, according to Inside Mortgage Finance. As of Dec. 31, 2019, Freedom had total assets of approximately $9.9 billion. 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. G I REAL ESTATE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: G I Real Estate, LLC 210 Adriatic Pkwy McKinney, TX 75072 Case No.: 20-41106 Business Description: G I Real Estate, LLC is engaged in renting and leasing real estate properties. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Eastern District of Texas Judge: Hon. Brenda T. Rhoades Debtor's Counsel: Richard W. Ward, Esq. 6860 N. Dallas, Pkwy. Ste. 200 Plano, TX 75024 Tel: 214-769-8639 E-mail: rwward@airmail.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ahmad Fawad Ghafoori, sole member of G Imperium, LLC, the sole member of the Debtor. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/kCTYMk GC EOS BUYER: S&P Downgrades ICR to 'CCC+' on Elevated Leverage --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on aftermarket auto supplier GC EOS Buyer Inc. (BBB Industries) to 'CCC+' from 'B-'. At the same time, S&P lowered its issue-level rating on the company's first-lien term loan to 'CCC+' from 'B-' and its issue-level rating on its second-lien term loan to 'CCC-' from 'CCC'. "The downgrade reflects our view that BBB Industries' operating prospects have substantially worsened due to the coronavirus pandemic, which follows a weak 2019. While revenues increased significantly and margins were better than 2018, the company still had highly negative free cash flow. Specifically, BBB's still high operational costs, higher working capital investment, and additional expenses to acquire new customers and their cores led it to generate substantial negative free cash flow in 2019. "While the company stabilized its cash flows toward the end of the year, we believe the demand for its products has fallen significantly due to the virus outbreak as consumers shelter in place and avoid unnecessary trips, which has significantly reduced the number of vehicle miles traveled. Beyond the next few months, we expect that auto repair levels will likely increase, though consumers that lost their jobs amid the pandemic may delay maintenance. The magnitude and timing of the recovery in the number of miles traveled also remain unclear," S&P said. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook on BBB Industries reflects the increased risk that its cash flows are more negative than S&P currently forecasts due to the coronavirus pandemic. "We could lower our rating on BBB Industries if we expect its free operating cash flow (FOCF) to remain negative for multiple quarters such that it experiences a near-term liquidity crisis, violates its financial covenants, or we believe it will likely engage in a refinancing or restructuring transaction that we would consider distressed (if existing debtholders receive less than par). This could occur if the coronavirus pandemic continues to negatively affect the company's volumes and the recovery is insufficient due to its highly leveraged capital structure," S&P said. "We could revise our outlook on BBB Industries to stable if we believe its FOCF to debt will likely improve to at least break-even on a sustained basis. This could occur if the effects of the coronavirus are quickly reversed and the number of vehicle miles traveled in the U.S. and Europe return to normal levels. We would also expect the company to maintain a comfortable level of liquidity," S&P said. GENWORTH LIFE: Fitch Cuts IFS Rating to CCC on Coronavirus Risk --------------------------------------------------------------- Fitch Ratings has downgraded the Insurer Financial Strength ratings of Genworth Life Insurance Company and Genworth Life Insurance Company of New York to 'CCC' from 'CCC+'. Simultaneously, Fitch also affirmed the 'B' IFS rating of Genworth Life and Annuity Insurance Company. The Rating Outlook for all ratings is Evolving. KEY RATING DRIVERS Fitch's current assessment of the impact of the coronavirus pandemic, including its economic impact, is based on a set of ratings assumptions described below. These assumptions were used by Fitch to develop pro-forma financial metrics for the Genworth Life companies that Fitch compared to both ratings guidelines defined in its criteria, and relative to previously established Rating Sensitivities for the Genworth Life companies. The downgrades reflect Fitch's concern regarding the impact of the economic fallout on the Genworth Life companies' already weak balance sheet fundamentals and financial performance over the next one or two years. Its's rating action also reflects increased concern over the adequacy of GLIC and GLICNY's long-term care reserves due to the decline in interest rates. The affirmation of GLAIC considers both its lower risk life and annuity product exposure and its higher standalone capital level. The Evolving Outlook reflects the pending acquisition of the Genworth life companies' parent, Genworth Financial, Inc., by China Oceanwide Holdings Group Co. Ltd. Its's rating actions follows Fitch's recent action to revise the rating outlook on the U.S. life insurance industry to negative. Fitch's primary concerns over the near term include the decline in interest rates, equity market declines, increased credit losses, rating migration and elevated mortality. Longer term concerns include the potential for a prolonged, steep macroeconomic downturn, changes in policyholder behavior and low interest rates that persist for multiple years. Based on its rating case stress, Fitch expects moderate losses in the Genworth life companies' invested asset portfolios. However, Fitch expects the potential asset losses to be more material to GLIC, further weakening its already weak capital position. Fitch does not expect GLAIC's asset loss to materially affect GLAIC's capital adequacy. Genworth ended 2019 with $1.5 billion of cash following the sale of its majority interest in Genworth MI Canada, Inc. to Brookfield Investment Partners for CAD$2.4 billion. Genworth redeemed its 7.7% senior notes due June 2020 for approximately $400 million and made a $134 million payment under an adverse court ruling. Additionally, Genworth also redeemed a $200 million note due to GLIC on March 31, 2020. The company has FHLB membership, but no credit facilities. Genworth has indicated it may need to sell additional strategic assets to meet upcoming obligations, absent the closing of the acquisition by Oceanside. The ratings assigned to the Genworth Life companies continue to reflect the relatively weak statutory capitalization and ongoing concern over long-term care (LTC) reserve adequacy, particularly in light of the decline in interest rates, which could result in additional statutory reserve charges and further deterioration in statutory capital. Fitch estimates GLIC and GLICNY's exposure to LTC reserves as a percent of statutory capital is materially higher than most other U.S. insurers with exposure to LTC. Thus, even small increases to recorded reserves could have a significant negative effect on statutory capital. Further, the adequacy of LTC reserves is highly sensitive to assumptions about interest rates and future rate increases, though Fitch notes that GLIC has made meaningful progress in obtaining those rate increases. GLAIC's ratings reflect GLIC's ownership of GLAIC constrains GLIC's ratings. Fitch views GLAIC's life insurance and annuity business as relatively more stable and less risky than GLIC's LTC business, though GLAIC also has a history of strained profitability and exposure to interest rates. Additionally, GLAIC is better capitalized than GLIC. Fitch notes that GLIC, GLICNY and GLAIC are domiciled in separate states - Delaware, New York and Virginia, respectively. Fitch believes the separation of regulatory supervision and the segregation of most of the LTC reserves into GLIC and GLICNY indicates the standalone profile of GLAIC is stronger than GLIC and GLICNY. However, GLAIC's rating is negatively affected by its status as a wholly owned subsidiary of GLIC. Currently, the life and annuity reserves of the Genworth life insurers are concentrated in GLAIC, while the LTC reserves are recorded in GLIC and GLICNY. While GLIC and GLICNY wrote most of the LTC business and GLAIC wrote much of the life and annuity business, some reserves were moved through a series of reinsurance transactions in anticipation of a previously-proposed unstacking transaction. Some of those reinsurance transactions may be unwound now that the unstacking will not occur. Nonetheless, Fitch believes GLIC and GLICNY would still contain most of the LTC exposure even if the reinsurance was unwound. GLIC, GLICNY and GLAIC represent the primary U.S. life insurance subsidiaries of Genworth. In 2016, Genworth announced a transaction whereby Genworth would be acquired by Oceanwide. The deadline for the proposed acquisition has been extended multiple times due to a lengthy regulatory review and approval process. Genworth has committed to contribute $175 million, through an intermediate holding company, to GLIC. Genworth has also agreed to contribute $100 million to GLICNY. The contributions would be made post-closing, provided the merger with Oceanwide closes. Fitch believes the Genworth life insurers' access to the capital markets for future funding needs and overall financial flexibility is extremely limited. Genworth has indicated its unwillingness to support the life insurers beyond the current capital contribution commitments if the merger is approved. As such, Fitch rates GLIC, GLICNY and GLAIC on a stand-alone basis. Assumptions for Coronavirus Impact (Ratings Case): Fitch used the following key assumptions, which are designed to identify areas of vulnerability, in support of the pro forma ratings analysis cited above: -- Decline in key stock market indices by 35% relative to Jan. 1, 2020. -- Increase in two-year cumulative high yield bond default rate to 16%, applied to current non-investment-grade assets, as well as, 12% of 'BBB' assets. -- Capital market access is limited for issuer at senior debt levels of 'BBB' and below. RATING SENSITIVITIES The ratings remain sensitive to any material change in Fitch's Rating Case assumptions with respect the coronavirus pandemic. Periodic updates to its assumptions are possible given the rapid pace of changes in government actions in response to the pandemic, and the pace with which new information is available on the medical aspects of the outbreak. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A material adverse change in Fitch's Ratings Assumptions with respect Coronavirus impact. -- Significant additional charges related to long-term care or run-off business that lead to a material decline in statutory capital (GLIC and GLICNY). -- GLAIC would likely be downgraded if GLIC is downgraded. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A material positive change Fitch's Rating Assumptions with respect to coronavirus impact. -- A positive rating action is prefaced by Fitch's ability to reliably forecast the impact of the coronavirus pandemic on the financial profile of both the U.S. life insurance industry and the Genworth life companies. -- A material improvement in statutory capital (GLIC and GLICNY). -- GLAIC could be upgraded if GLIC was upgraded. If Genworth and Oceanwide, should the acquisition close, demonstrate a willingness and ability to support the life insurers, the ratings could be re-evaluated. If Fitch has insufficient information to evaluate the effect of Oceanwide's ownership on the rated entities, Fitch may have to withdraw the ratings for lack of information. Stress Case Sensitivity Analysis -- Fitch's more severe Stress Case assumes a 60% stock market decline, two-year cumulative high yield bond default rate of 22%, more prolonged declines in government rates, heightened pressure on capital markets access and a coronavirus infection rate of 15% and mortality rate of 0.75%. -- The implied rating impact under the Stress Case would be a possible downgrade of one to two notches. 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. 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). GOLD'S GYM: Case Summary & Largest Unsecured Creditors ------------------------------------------------------ Lead Debtor: GGI Holdings, LLC 4001 Maple Avenue Suite 200 Dallas, TX 75219 Business Description: Founded in 1965, the Debtors operate a network of company-owned and franchised fitness centers. The Debtors own and operate approximately 95 gyms domestically, and hold franchise agreements for more than 600 gyms domestically and internationally. The Debtors' majority owner -- TRT Holdings, Inc. -- acquired the business in 2004. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Northern District of Texas Fifteen affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- GGI Holdings, LLC (Lead Case) 20-31318 Gold's Gym International, Inc. 20-31319 Golds Holding Corp 20-31320 Gold's Alabama, LLC 20-31321 Gold's Gym Franchising, LLC 20-31322 Gold's Gym Licensing, LLC 20-31323 Gold's Gym Merchandising, LLC 20-31324 Gold's Gym Rockies, LLC 20-31325 Gold's Louisiana, LLC 20-31326 Gold's North Carolina, LLC 20-31328 Gold's Ohio, LLC 20-31329 Gold's Oklahoma, LLC 20-31330 Gold's Southeast, LLC 20-31332 Gold's St. Louis, LLC 20-31333 Gold's Texas Holdings Group, Inc. 20-31337 Judge: Hon. Harlin Dewayne Hale Debtors' Bankruptcy Counsel: Aaron M. Kaufman, Esq. Ariel J. Snyder, Esq. DYKEMA GOSSETT PLLC 1717 Main Street, Suite 4200 Dallas, Texas 75201 Tel: (214) 462-6400 Fax: (214) 462-6401 Email: akaufman@dykema.com asnyder@dykema.com - and - Danielle N. Rushing, Esq. DYKEMA GOSSETT PLLC 112 East Pecan Street, Suite 1800 San Antonio, Texas 78205 Tel: (210) 554-5500 Fax: (210) 226-8395 Email: drushing@dykema.com Debtors' Claims, Noticing, Solicitation & Administrative Agent: BMC GROUP, INC. https://is.gd/lPGaNW GGI Holdings' Estimated Assets: $50 million to $100 million GGI Holdings' Estimated Liabilities: $50 million to $100 million The petition was signed by Paul Early, chief administration officer. A copy of GGI Holdings' petition is available for free at PacerMonitor.com at: https://is.gd/hNEsMf List of GGI Holdings' Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. 1431 SC, Ltd. Lease Unknown 500 West 5th Street Suite 700 Austin, TX 78701 2. Desert Home Communities Lease Unknown of Oklahoma, LLC 4045 NW 64th Street, Suite 340 Oklahoma City, OK 73116 3. Fairfax Station Square LP Lease Unknown 3201 Jermantown Road Suite 700 Fairfax, VA 22030-2879 4. Jeffrey R. Melichar Lease Unknown 11712 Moonpark Street Suite 201B Studio City, CA 91604 5. The Harry Himelfarb Trust Lease Unknown and The Amelia Himelfarb Trust 1201 F Street, NW, Suite 500 Washington, DC 20004 6. Universal Music Corp Royalty Unknown dba Universal Music Publishing Dispute c/o Eric Carvajal Kuhn Law Group PLLC 3 Columbus Circle Floor 15 New York, NY 10019 GOLD'S GYM: Says Bankruptcy Won't Impact Locations -------------------------------------------------- Fitness company Gold's Gym sought Chapter 11 protection as the COVID-19 pandemic caused havoc on the company. Nathan Bomey, writing for USA Today, reports Gold's said it was forced to seek relief from creditors as majority of fitness centers in the country were shuttered because of the pandemic. Gold's Gym said its 700 gyms worldwide will stay open as it looks to restructure during the coronavirus pandemic that has virtually shutdown the entire U.S. economy. Last Month, Gold's Gym permanently closed 30 during the outbreak. The company said that the bankruptcy filing will not have further impact on current operations. "We're not going anywhere. Unfortunately our industry has been hit hard like many others, but we don't have takeout service or curbside pickup, so it's hard for us to keep revenue going during this," CEO Adam Zeitsiff said in an interview. Fox Business reports that Gold's Gym's bankruptcy filing follows a slew of retailers that have filed for bankruptcy in recent weeks as big-box gyms struggle to stay afloat. In April, the owner of the New York Sports Club weighed a Chapter 11 bankruptcy filing as 95 percent of the company's gyms across the country closed to curb the spread of coronavirus, according to a report by Bloomberg Law. About Gold's Gym Founded in 1965, Gold's Gym operates a network of company-owned and franchised fitness centers. It owns and operates approximately 95 gyms domestically, and holds franchise agreements for more than 600 gyms domestically and internationally. Its majority owner -- TRT Holdings, Inc. -- acquired the business in 2004. GGI Holdings, LLC, Gold's Gym International, Inc. and other related entities sought Chapter 11 protection (Bankr. 20-31318) on May 4, 2020. GGI Holdings was estimated to have assets and debt of $50 million to $100 million The Hon. Harlin Dewayne Hale is the case judge. The Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC Group Inc. is the claims agent. GRAY TELEVISION: Moody's Alters Outlook on B1 CFR to Stable ----------------------------------------------------------- Moody's Investors Service affirmed Gray Television, Inc.'s B1 corporate family rating, B1-PD probability of default rating, the Ba2 rating on the company's senior secured bank credit facility and the B3 rating on the senior unsecured debt. Concurrently, Moody's maintained the company's speculative grade liquidity at SGL-1. The outlook was changed to stable from positive. Affirmations: Issuer: Gray Television, Inc. Probability of Default Rating, Affirmed B1-PD Corporate Family Rating, Affirmed B1 Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD2) Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Outlook Actions: Issuer: Gray Television, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE The change of outlook to stable from positive reflects Moody's expectations that, absent any extraordinary debt reduction, the company's leverage (Moody's adjusted on a two year basis) will remain higher than anticipated, at around 5x in the coming 12-18 months as the COVID-19 pandemic will have a material impact on advertising revenue in the second and potentially third quarters of 2020. Moody's now expects Gray's key credit metrics to remain consistent with the B1 category through 2020. Moody's regards the current pandemic as a social risk under its ESG framework, given the substantial implications for health and safety. Gray's B1 rating reflects the company's exposure to the inherently volatile TV advertising market with around 50% of the company's revenues coming from core (excl. political) TV advertising which is expected to decline materially in 2020 as a result of the impact from the COVID-19 pandemic on the economy. The rating also reflects Moody's expectations that Gray's debt to EBITDA (Moody's adjusted) will remain at or above 5x in the coming 12-18 months -- and that excess cash flow will be prioritized for shareholder returns. The ratings also incorporate Moody's expectations that the company might engage in further debt funded M&A in the coming year, which would temporarily lead to leverage increasing above Moody's 5.5x rating guidance. Gray's B1 rating reflects the company's scale as reflected in a quasi-national footprint of its network of broadcast stations as well as the strong market position of these stations in their designated market areas. Gray's 157 big-four affiliates in 93 DMAs reach around 24% of US households (17% if Moody's includes the UHF discount). Around 65% of Gray's stations are #1 in their market and 93% rank in the top 2. Gray's rating is also supported by the company's strong cash flow generation with $239 million generated in 2019 and expectations of solidly positive free cash flow in 2020 despite the COVID-19 disruption. The response to the COVID-19 outbreak with stay at home orders, rapid unemployment increases and a potential looming recession in 2020 will lead to advertising demand -- which is correlated to the economic cycle and consumer confidence -- declining materially in 2020. Its current view on core local TV advertising is that demand will decline severely in Q2 2020 and remain materially lower in Q3 2020 compared to 2019. Moody's currently expects Q4 to show some stabilization and core TV ad demand in 2021 to return to pre-COVID-19 trends of a structural mid-single digit percentage decline. As is typical for broadcasters, the majority of Gray's costs are fixed and there are few cost saving measures to mitigate the impact of a drop in ad revenue on the company's EBITDA. More positively, the COVID-19 pandemic has led to a very strong increase in viewership of local TV as the concerned audiences have sought clear, relevant and trustworthy news from their local broadcasters. While the figures vary by market, Moody's estimates that Gray's channels will have experienced at least a 30% increase in viewership during their news programs in April. Gray has a very good liquidity profile as reflected in the SGL-1 rating of the company. Moody's expects that the company's liquidity will remain strong despite the COVID-19 disruption, supported by around $212 million of cash on hand at year end 2019 as well as a fully undrawn $200 million revolving credit facility. The company is expected to remain free cash flow positive, even under assumptions of a severe downturn in advertising demand in 2020. Gray also has the option to pay in kind the dividend on its $650 million preferred shares (8% cash rate, 8.5% PIK) to conserve cash. If it were to draw on its revolver, the company would have to comply with a first lien senior secured net leverage ratio covenant of 4.5x. At the last testing date (December 2019), the company reported that ratio at 1.93x and Moody's expects Gray to maintain ample headroom under the covenant in the coming quarters. The stable outlook reflects Moody's expectations that despite the disruption caused by the COVID-19, Gray will retain metrics in line with a B1 rating through 2020, in particular a leverage (Moody's adjusted on a two year basis) between 4.5x and 5.5x. The stable outlook also reflects Moody's expectations that the company will maintain a very good liquidity profile in 2020 and beyond. The Ba2 (LGD2) rating on the company's senior secured facilities reflects their priority ranking ahead of the B3 (LGD5) rated unsecured notes. The instrument ratings reflect the probability of default of the company, as reflected in the B1-PD PDR, an average family recovery rate of 50% at default given the mix of secured and unsecured debt in the capital structure, and the particular instruments' rankings in the capital structure. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the ongoing disruption caused by the COVID-19 pandemic, upwards movement on the rating is currently limited until visibility over the recovery of the TV advertising market is established. Upwards pressure would also require the company to maintain leverage (Moody's adjusted on a two-year basis) below 4.5x on a sustained basis while also maintaining its strong free cash flow generation. Downward pressure on the ratings could ensue should Gray's leverage trends above 5.5x on a sustained basis as a result of weak performance or should liquidity or covenant compliance weaken. Headquartered in Atlanta, GA, Gray Television, Inc. is a television broadcast company that owns and operates television stations across 93 markets, broadcasting over 400 separate program streams including 157 Big 4 affiliates and reaching 24% of US households (17% including the UHF Discount). Gray operates the number 1 or 2 ranked stations in about 95% of its markets. Gray is publicly traded with the family and affiliates of the late J. Mack Robinson collectively owning approximately 11% of combined classes of common stock. The dual class equity structure provides these affiliated entities with roughly 40% of voting share. In 2019, Gray reported revenue of about $2.1 billion. The principal methodology used in these ratings was Media Industry published in June 2017. HANESBRANDS INC: S&P Rates $500MM Senior Unsecured Notes 'BB' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '4' recovery rating to Hanesbrands Inc.'s proposed $500 million senior unsecured notes due 2025. The '4' recovery rating indicates its expectation for average (30%-50%; rounded estimate: 35%) recovery in the event of a payment default. S&P expects the company to use the proceeds from these notes to repay a portion of the outstanding borrowings under its revolving credit facility and for general corporate purposes. At the same time, S&P raised its issue-level rating on Hanesbrands' two tranches ($900 million each) of senior unsecured notes due in 2024 and 2026, respectively, to 'BB' from 'BB-' and revised its recovery rating to '4' from '5'. S&P's higher recovery expectation for these notes reflects the lower amount of term loans outstanding in the company's capital structure due to its material repayment. "Our ratings on Hanesbrands reflect our expectation that the company's sales and profitability will decline significantly in the upcoming quarters due to store closures and a drop in consumer spending on nonessential items because of the coronavirus pandemic and the related economic recession. It also reflects our belief that the company's recovery will be faster than that of its fashion-oriented peers because the majority of its products are basic apparel, which are more replenishable in nature. We forecast that the company's leverage will temporarily exceed 4x in 2020," S&P said. HAWAIIAN AIRLINES 2013-1: Fitch Cuts Sr. Secured Rating to 'BB+' ---------------------------------------------------------------- Fitch Ratings has taken various rating actions on aircraft backed EETCs issued by Hawaiian, JetBlue, and Spirit. The rating actions are primarily driven by Fitch's April 10 downgrade of these U.S.-based carriers and by weakening levels of overcollateralization for some transactions. KEY RATING DRIVERS Hawaiian: Fitch has downgraded Hawaiian's 2013-1 class A certificates to 'BBB-' from 'A-'. A sharp decline in appraised values for the A330-200 over the past year has caused the transaction to fail to pass Fitch's 'A' or 'BBB' level stress test. Updated appraisals evaluated by Fitch indicate that 2013-2014 vintage A330-200s base values have declined by nearly 20% in the past year reflecting general softness around the aircraft type. In such cases, Fitch's EETC criteria state that the rating achieved through the bottom-up approach (i.e. the approach typically applied to subordinated tranches) will act as a ratings floor. The 'BBB-' rating represents a four notch uplift, driven by a moderate-to-high affirmation factor (+2 notches), presence of a liquidity facility (+1) and solid recovery prospects (+1). Fitch has also downgraded Hawaiian's 2013-1 class B certificates to 'BB+' from 'BBB-'. The downgrade follows Fitch's April 10 downgrade of Hawaiian's Long-Term Issuer Default Rating to 'B+' from 'BB-'. The 'BB+' rating reflects a three notch uplift, driven by the affirmation factor and the presence of a liquidity facility. Fitch considers the Affirmation Factor for this pool of aircraft to be moderate/high as the A330s in this transaction represent a significant portion of Hawaiian's relatively small fleet, as well as being key to its Asian operations. Hawaiian retired the last of its 767s in the first quarter of 2019 meaning that the A330 will be the only aircraft in its fleet that can serve Asia and Australia. JetBlue: Fitch placed JetBlue's 2019-1 class AA certificates on Rating Watch Negative and affirmed the class A certificates at 'A'. The rating watch on the class AA certificates reflects general uncertainty around asset values and airlines during the coronavirus downturn and acknowledges that risks are elevated for ratings in the 'AA' category. Ratings for the class AA and class A certificates are primarily based on a top-down analysis based on the value of the collateral. Both classes of certificates continue to pass Fitch's stress tests with maximum stress scenario loan-to-values in the low-to-mid 90% range. A negative rating action could be driven by an unexpected decline in collateral values. Per Fitch's model, a decline in collateral values of around 14% in the next year (9% above Fitch's standard depreciation assumption) would cause the class AA and A certificates to no longer pass their relevant stress tests. Fitch has also affirmed JetBlue's 2013-1 class A certificates at 'A+'. The 2013-1 transaction has amortized over time and remains highly overcollateralized, supporting the 'A+' rating. The collateral for the JetBlue transactions consists of A320-200s and A321-200s which are likely to fair relatively well compared to less popular aircraft types during the downturn. Spirit Airlines: Fitch has placed Spirit's 2017-1 class AA certificates on Rating Watch Negative and affirmed the 2017-1 and 2015-1 class A certificates at 'A'. The rating watch on the class AA certificates reflects general uncertainty around asset values and airlines during the coronavirus downturn and acknowledges that risks are elevated for ratings in the 'AA' category. The 'AA' and 'A' certificate ratings are based on Fitch's top down methodology. The ratings reflect levels of overcollateralization that allow the transactions to continue to pass its 'AA' or 'A' level stress tests. Maximum stress scenario LTVs are in the low 90% range for the 2017-1 class AA certificates and in the mid-to-upper 80% range for the 2017 and 2015 class A certificates. The collateral for the Spirit transactions consists of A320-200s and A321-200s, which are likely to fair relatively well compared to less popular aircraft types during the downturn. Fitch has downgraded Spirit's 2017-1 and 2015-1 class B certificates to 'BBB' from 'BBB+'. The one-notch downgrade reflects Fitch's April 10 downgrade of Spirit's IDR to 'BB-' from 'BB'. The 'BBB' ratings are derived through a two-notch uplift for a high affirmation factor, one notch for the presence of a liquidity facility and an additional notch for good recovery prospects. Fitch considers the affirmation factor for both Spirit transactions to be 'high' supported by the relatively high percentage of Spirit's owned aircraft represented by each transaction. KEY ASSUMPTIONS Key assumptions within the rating case for the issuer include a harsh downside scenario in which the airline declares bankruptcy, chooses to reject the collateral aircraft, and where the aircraft are remarketed in the midst of a severe slump in aircraft values. Fitch's models also incorporate a full draw on liquidity facilities and include assumptions for repossession and remarketing costs. Value stresses applied to key aircraft types in Fitch's models include: A320-200 - 25% 'A' level, 45% 'AA' level A321-200 - 20% 'A' level, 40% 'AA' level A330-200 - 30% A level RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Positive rating actions are not expected for these transactions in the near term due to coronavirus-related pressures on aircraft and the airline industry in general. Factors that could, individually or collectively, lead to negative rating action/downgrade: Hawaiian: Both the class A and B certificates are directly linked to Hawaiian's corporate rating. Should Hawaiian be downgraded, the certificates would be downgraded in kind. Negative actions could also be driven by further deteriorations in aircraft values. JetBlue: Class AA and A certificates are supported by levels of overcollateralization. Negative rating actions could be driven by asset value declines that are outside of Fitch's expectations. Spirit: Class AA and A certificates are supported by levels of overcollateralization. Negative rating actions could be driven by asset value declines that are outside of Fitch's expectations. Class B certificates are linked to Spirit's corporate rating. However, Fitch's criteria allows for wider affirmation factor notching when the underlying airline is rated in the 'B' category. Therefore, if Spirit were downgraded to 'B+' the class B certificates could be affirmed at their current levels. Class B certificates are also sensitive to aircraft values. Negative actions could be driven by lower recovery prospects driven by weaker aircraft values. 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 Hawaiian's class A and B certificates feature an 18 month liquidity facility provided by Natixis (A+/F1/RWN). JetBlue 2019-1 class AA and A certificates feature an 18 month liquidity facility provided by Credit Agricole. JetBlue's 2013-1 class A certificates feature an 18 month liquidity facility provided by KfW Ipex-Bank GmbH. Spirit's 2017-1 class AA, A, and B certificates feature 18 month liquidity facilities provided by Commonwealth Bank of Australia (A+/F1/Negative). Spirit's 2015-1 class A and B certificates feature 18 month liquidity facilities provided by Natixis (A+/F1+/RWN). ESG CONSIDERATIONS ESG considerations relate to the underlying Airlines. 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. 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. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Subordinate tranche EETC ratings are tied to the underlying issuer IDR. Hawaiian Airlines 2013-1 Pass Through Trust - Senior secured; LT BBB-; Downgrade - Senior secured; LT BB+; Downgrade JetBlue Airways Pass Through Trust Series 2019-1 - Senior secured; LT AA-; Rating Watch On - Senior secured; LT A; Affirmed JetBlue Airways Pass Through Trust Series 2013-1 - Senior secured; LT A+; Affirmed Spirit Airlines Pass Through Trust Certificates Series 2017-1 - Senior secured; LT AA; Rating Watch On - Senior secured; LT A; Affirmed - Senior secured; LT BBB; Downgrade Spirit Airlines Pass Through Trust Certificates Series 2015-1 - Senior secured; LT A; Affirmed - Senior secured; LT BBB; Downgrade HOOD LANDSCAPE: Time to Object to Auction of Assets Shortened ------------------------------------------------------------- Judge John T. Laney III of the U.S. Bankruptcy Court for the Middle District of Georgia reduced the time to file objections to Hood Landscape & Garden Products, Inc.'s auction sale of its real estate, machinery and equipment located at 4236 Hickory Grove Road, Valdosta, Lowndes County, Georgia, subject to liens and other claims, from 21 days to seven days as authorized under Bankruptcy Rule 9006(c). Any party receiving notice of the motion by mail will have an additional three days to file an objection as provided by Bankruptcy Rule 9006(f). A copy of the Sale Motion is available at https://tinyurl.com/y9m9u68 from PacerMonitor.com free of charge. About Hood Landscape Hood Landscape & Garden Products, Inc. owns and operates a landscaping equipment and supply store. Hood Landscape & Garden Products, Inc. sought Chapter 11 protection (Bankr. M.D. Ga. Case No. 19-71344) and its affiliate Hood Farms, Inc. (Bankr. M.D. Ga. Case No. 19-71345), on Nov. 4, 2019. The Cases are assigned to Judge John T. Laney III. In the petitions signed by Leon Hood, CEO, Hood Landscape was estimated to have assets and liabilities in the range of $1 million to $10 million, and Hood Farms was estimated to have assets in the range of $500,000 to $1 million and $1 million to $10 million in debt. The Debtors tapped Thomas D. Lovett, Esq., at Kelley, Lovett, Blakey & Sanders, P.C., as counsel. ICE HOUSE: Seeks to Hire Magee Goldstein as Legal Counsel --------------------------------------------------------- Ice House Properties, LLC, seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to hire Magee Goldstein Lasky & Sayers, PC as its legal counsel. Magee Goldstein will provide services in connection with Debtor's Chapter 11 case, which include negotiating with its creditors; advising Debtor in connection with any potential sale of its assets; and assisting Debtor in the preparation of a bankruptcy plan. The firm will be paid at these rates: Attorneys $250 - $375 per hour Paralegals/Paraprofessionals $115 per hour The firm agreed to accept $9,217 from Debtor. Andrew Goldstein, Esq., at Magee Goldstein, disclosed in court filings that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Magee Goldstein can be reached through: Andrew S. Goldstein, Esq. Magee Goldstein Lasky & Sayers, PC P.O. Box 404 Roanoke, VA 24003-0404 Tel: (540) 343-9800 Email: agoldstein@mglspc.com About Ice House Properties Ice House Properties, LLC, a company engaged in renting and leasing real estate properties, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 20-70468) on April 30, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Magee Goldstein Lasky & Sayers, PC is Debtor's legal counsel. IGLESIA TABERNACULO: Case Summary & 2 Unsecured Creditors --------------------------------------------------------- Debtor: Iglesia Tabernaculo De Adoracion Y Alabanza, Inc. PR Road 132, Km. 22.9 Canas Ward Ponce, PR 00730 Business Description: The Debtor is a nonprofit religious organization that operates an evangilical church. The Company owns in fee simple a real property, where the church is located, at PR Road 132, Km. 22.6, Canas Ward, Ponce, PR, having an appraised value of $915,000. Chapter 11 Petition Date: May 5, 2020 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 20-01752 Debtor's Counsel: Noemi Landrau Rivera, Esq. LANDRAU RIVERA & ASSOCIATES PO Box 270219 San Juan, PR 00927 Tel: 787-774-0224 E-mail: nlandrau@landraulaw.com Total Assets: $938,025 Total Liabilities: $1,274,467 The petition was signed by Jesus F. Perez Gutierrez, 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/H8daLg ISE PROFESSIONAL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: ISE Professional Testing & Consulting, Inc. 2785 S. Bay Street, Suite G Eustis, FL 32726 Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-02538 Debtor's Counsel: Kathleen L. DiSanto, Esq. BUSS ROSS, P.A. PO Box 3913 Tampa, FL 33601-3913 Tel: 813-224-9255 E-mail: kdisanto@bushross.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ryanne Early, chief executive officer and president. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/CIcUU7 JJE INC: Plan & Disclosures Hearing Reset to July 22 ---------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico granted the motion of Debtor JJE Inc. requesting continuance of hearing and rescheduled the hearing on final approval of the disclosure statement and confirmation of the plan for April 29, 2020, at 9:00 AM, to July 22, 2020, at 9:00 a.m., at the United States Bankruptcy Court, Jose V. Toledo Federal Building and US Courthouse, 300 Recinto Sur Street, Courtroom 3, Third Floor, San Juan, Puerto Rico. A full-text copy of the order dated April 16, 2020, is available at https://tinyurl.com/yahdmeuj from PacerMonitor at no charge. About JJE Inc. JJE, Inc., is a home health care services provider based in Manati, Puerto Rico. JJE, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No.19-02034) on April 12, 2019, and is represented by Victor Gratacos Diaz, Esq., in Caguas, Puerto Rico. In the petition signed by Jenny Olivo, president, the Debtor disclosed $295,244 in total assets and $1,953,718 in total liabilities. JONES LEASE: Plan & Disclosure Statement Set for June 2 Hearing --------------------------------------------------------------- Debtor Jones Lease Properties, LLC, filed with the U.S. Bankruptcy Court for the Central District of Illinois a First Amended Plan of Reorganization, a First Amended Disclosure Statement and a motion to combine hearings on approval of the Disclosure Statement and confirmation of the Plan. On April 14, 2020, Judge Thomas L. Perkins granted the Motion and ordered that: * May 18, 2020 is fixed as the last day for creditors to return a ballot accepting or rejecting the Plan. * May 25, 2020, is the deadline for the Debtor's counsel to file a reporting on the voting by class and indicating whether there is an impaired accepting Class of creditors. * May 25, 2020, is fixed as the last day for filing written objections to the First Amended Disclosure Statement and/or First Amended Plan of Reorganization. * June 2, 2020 at 2:00 p.m., is scheduled for the combined hearing to approve the First Amended Disclosure Statement and to confirm the First Amended Plan of Reorganization. A full-text copy of the order dated April 14, 2020, is available at https://tinyurl.com/y9asqndg from PacerMonitor at no charge. About Jones Lease Properties JP Rentals, LLC and Jones Lease Properties, LLC are a locally owned and operated rental property companies serving the Quad Cities and surrounding areas. As the source for rental living, they offer a wide variety of rental properties including apartment complexes, single family homes, townhomes, and duplexes. J.P. Apartments Cooperative, Jones Lease Properties, and J.P. Rentals, LLC filed their voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Iowa Case Nos. 18-02566, 18-02568, and 18-02569, respectively) on Nov. 26, 2018. In January 2019, the cases were transferred to the U.S. Bankruptcy Court for the Central District of Illinois and were assigned new case numbers (Case No. 19-80013 for J.P. Apartments; Case No. 19-80014 for Jones Lease; and Case No. 19-80015 for J.P. Rentals). In the petitions signed by Erik R. Jones, director, J.P. Apartments disclosed $4,765,888 in total assets and $4,689,693 in liabilities. The Debtors tapped Bradshaw, Fowler, Proctor & Fairgrave PC as their legal counsel; GlassRatner Advisory & Capital Group, LLC, as their financial advisor and investment banker; and The Skutch Arlow Group, LLC, as financial advisor. JOSH CREWS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Josh Crews Forest Products, LLC 22 Ray Road Lawrenceburg, TN 38464 Chapter 11 Petition Date: May 2, 2020 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 20-02398 Judge: Hon. Charles M. Walker Debtor's Counsel: Gray Waldron, Esq. DUNHAM HILDEBRAND, PLLC 2416 21st Ave S, Ste 303 Nashville, TN 37212 Tel: 629-777-6519 E-mail: gray@dhnashville.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Josh Crews, president. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/ntBPHK KEYSTONE PIZZA: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Keystone Pizza Partners, LLC 7904 W 142nd Street Overland Park, KS 66223 Business Description: Keystone Pizza Partners, LLC is a pizza franchisee in Overland Park, Kansas. Chapter 11 Petition Date: May 3, 2020 Court: United States Bankruptcy Court District of Kansas Case No.: 20-20709 Judge: Hon. Robert D. Berger Debtor's Counsel: Scott J. Goldstein, Esq. SPENCER FANE LLP 1000 Walnut St. Suite 1400 Kansas City, MO 64106-2140 Tel: 616-474-8100 Email: sgoldstein@spencerfane.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bryan C. Neuendorf, president, TNT Pizza Partners, Inc., a Kansas Corp., manager of Keystone Pizza Partners, LLC. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/kRCG9l KIM DOLLEH CENTER: Case Summary & 3 Unsecured Creditors ------------------------------------------------------- Debtor: Kim Dolleh Center LLC 160 North Main Street Alpharetta, GA 30009 Business Description: Kim Dolleh Center LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 20-66085 Debtor's Counsel: Ian M. Falcone, Esq. THE FALCONE LAW FIRM, P.C. 363 Lawrence Street Marietta, GA 30060 Tel: (770) 426-9359 E-mail: attorneys@falconefirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kim Summers-Dolleh, managing member. A copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/iSm9L6 LEE HI ASSOCIATES: Seeks to Hire Magee Goldstein as Legal Counsel ----------------------------------------------------------------- Lee Hi Associates, LLC, seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to hire Magee Goldstein Lasky & Sayers, PC as its legal counsel. Magee Goldstein will provide services in connection with Debtor's Chapter 11 case, which include negotiating with its creditors; advising Debtor in connection with any potential sale of its assets; and assisting Debtor in the preparation of a bankruptcy plan. The firm will be paid at these rates: Attorneys $250 to $375 per hour Paralegals/Paraprofessionals $115 per hour The firm agreed to accept $9,217 from Debtor. Andrew Goldstein, Esq., at Magee Goldstein, disclosed in court filings that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Magee Goldstein can be reached through: Andrew S. Goldstein, Esq. Magee Goldstein Lasky & Sayers, PC P.O. Box 404 Roanoke, VA 24003-0404 Tel: (540) 343-9800 E-mail: agoldstein@mglspc.com About Lee Hi Associates Lee Hi Associates, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 20-70467) on April 30, 2020. At the time of the filing, Debtor disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. Magee Goldstein Lasky & Sayers, PC is Debtor's legal counsel. LONE STAR: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Lone Star Hotels LLC d/b/a Comfort Suites 5100 7th Street Bay City, TX 77414 Business Description: Lone Star Hotels LLC is a privately held company in the traveler accommodation industry. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Southern District of Texas Case No.: 20-32450 Judge: Hon. Jeffrey P. Norman Debtor's Counsel: Joyce Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Tel: (972) 503-4033 E-mail: joyce@joycelindauer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kulwant Kaur Sandhu, managing member. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/zq4SRU MACHINERY TRANSPORT: R&D Recusal Bid vs Judge Volk Has No Basis --------------------------------------------------------------- District Judge Frank W. Volk denies the request of R & D Towing, Inc. to disqualify the judge from presiding over the case captioned ROBERT L. JOHNS, Trustee, Plaintiff, v. R & D TOWING, INC., Defendant, Civil Action No. 5:18-cv-01394 (S.D. W.Va.). This matter arises out of a Chapter 11 bankruptcy case filed by debtor Machinery Transport, Inc. The case was subsequently converted to a Chapter 7 liquidation case. Judge Volk presided over the bankruptcy matter prior to his appointment to the United States District Court for the Southern District of West Virginia. Mr. Johns initiated an adversary proceeding on behalf of MTI against R & D. On July 30, 2018, R & D filed a Motion to Dismiss or In the Alternative Motion to Withdraw Reference and Request for a Jury Trial. Subsequently, both parties agreed to withdraw and/or transfer the matter to the United States District Court for the Southern District of West Virginia. On Oct. 31, 2018, the Honorable Irene C. Berger, United States District Judge, granted the Joint Motion to Withdraw the Reference and assumed jurisdiction over the proceeding for all purposes. On Oct. 29, 2019, the matter was reassigned from the docket of the Honorable Irene C. Berger to the docket of Judge Volk following his appointment as United States District Judge for the Southern District of West Virginia. On Jan. 7, 2020, R & D filed its Motion to Disqualify Judge Volk from presiding over the matter. R & D asserts that recusal is appropriate inasmuch as Mr. Johns served as the bankruptcy trustee to represent MTI's estates in its bankruptcy proceeding before the undersigned and has served in such a capacity in "countless other bankruptcies pending before him in his prior role as a bankruptcy judge." R & D contends that Mr. Johns' "elevated position" as a regularly appointed trustee comes with great trust and faith, if not deference, from the undersigned. As such, R & D asserts that an "objective lay observer who is aware of these facts could not but harbor substantial doubt about the impartiality of this Honorable Judge . . . in this litigation." Mr. Johns responds that R & D's position is without merit given that its motion is premised on the Judge Volk's judicial conduct, as opposed to his personal conduct. Additionally, Mr. Johns asserts that the timing of R & D's recusal motion is suspect given that it waited over two months to file the same and only did so after the Court denied summary judgment to both parties. Accordingly, Mr. Johns contends that recusal is inappropriate and R & D's motion should be denied. In its reply, R & D reasserts that a reasonable person could rationally doubt Judge Volk's impartiality inasmuch as on numerous occasions, Mr. Johns has served in a position as trustee where his personal judgment and representations have been afforded great trust and deference. Further, R & D contends that its motion is timely given that the motion was made only ten weeks from Judge Volk’s assignment to the case. Judge Volk states that while it is true that some deference is due a trustee in the exercise of his or her business judgment, that corollary does not arise from bankruptcy judges generally reposing trust in the statutory fiduciary. It is instead designed to provide the trustee greater flexibility, without unwarranted second-guessing from the bankruptcy court. From a real-world perspective, bankruptcy judges at times agrees with the trustee's recommendation and, at other times, disagrees therewith. Second, while the Court understands and appreciates the movant's concerns, there is presently no factual basis for a reasonable, well-informed observer who assesses all the facts and circumstances of this matter to reasonably question Judge Volk’s impartiality. R & D's alleged bias of Judge Volk is not predicated on any nonjudical source that would raise the appearance of impropriety. To the contrary, R & D contends that the appearance of impartiality arises from Judge Volk's judicial conduct during his time as bankruptcy judge inasmuch as he has afforded Mr. Johns, acting in his position as bankruptcy trustee, the statutory deference Congress and precedent requires. At no point has R & D alleged any personal conduct of Judge Volk that would leave a reasonable observer to conclude that he is biased in favor of Mr. Johns. If such conduct exists, the Court invites the movant to supplement the Motion to Disqualify so the matter might be addressed with specificity. Inasmuch as the suggested bias is unsupported, however, recusal is unwarranted. Furthermore, given that no basis for recusal exists, the timing of R & D's motion is immaterial. A copy of the Court's Memorandum Opinion and Order dated March 10, 2020 is available at https://bit.ly/3b6q0D8 from Leagle.com. Robert L. Johns, Trustee, Plaintiff, represented by Brian R. Blickenstaff , TURNER & JOHNS, H.F. Salsbery , BAILEY & WYANT, Josef A. Horter -- jhorter@baileywyant.com -- BAILEY & WYANT & Michael W. Taylor -- mtaylor@baileywyant.com -- BAILEY & WYANT. R & D Towing, Inc., Defendant, represented by Trevor K. Taylor , TAYLOR LAW OFFICE. Based in White Sulfur Spring, WV, Machinery Transport Inc. filed for chapter 11 bankruptcy protection (Bankr. S.D. W.Va. Case No. 15-50210) on Sept. 23, 2015 with estimated assets of $0 to $50,000 and estimated liabilities of $1 million to $10 million. The petition was signed by Ronald K. Cook, president. The case was later converted to a chapter 7 case. MICHIGAN FINANCE AUTHORITY: S&P Alters Bonds Rating Outlook to Neg. ------------------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable on its 'BB+' long-term rating on the Michigan Finance Authority's Local Government Loan Program bonds (City of Detroit financial recovery income tax revenue and refunding local project bonds), series 2014F-1 and F-2. The bonds were issued on behalf of the city of Detroit and are secured by a first lien on its municipal income taxes. S&P also revised the outlook to negative from stable on the 'BB+' long-term rating on the authority's Local Government Loan Program bonds (Public Lighting Authority [PLA] local project bonds), series 2014B. The bonds were issued for the Detroit PLA and are secured by the city's utility users tax (UUT). "The outlook revisions correspond to our outlook revision on the ICR and GO debt rating on the city," said S&P Global Ratings credit analyst John Sauter, "and reflects our view of at least a one-in-three likelihood we could take a negative rating action over the short term (generally up to one year for speculative-grade credits)." In S&P's view, the health and safety aspects of the pandemic and resulting shelter-in-place order directly affects revenue generating capacity and will weaken all aspects of Detroit's budget and financial profile, and is reflected as a social factor in its analysis of environmental, social, and governance (ESG) related risks. The 'BB+' ratings reflect the application of S&P's "Priority-Lien" criteria (published Oct. 22, 2018), which factors in both the strength and stability of the pledged revenues, as well as the general credit quality of the municipality where taxes are distributed and/or collected (the obligor's creditworthiness [OC]). The priority-lien rating on both pledges is limited by S&P's view of Detroit's creditworthiness (BB-/Negative). Therefore, the negative outlook on the ICR and GO rating on Detroit results in the same outlook revision on these income- and UUT-tax-secured obligations. S&P could lower the rating on both pledges if there were a negative rating action on its ICR and GO rating on Detroit. Additionally, if either pledged revenues declined significantly beyond management's current forecasts or experienced large short-term collection disruptions, to the extent that S&P's view of monthly or annual coverage is at a significantly higher risk, S&P could also lower the rating. S&P could revise the outlooks back to stable if it revises the outlook on Detroit's ICR and GO debt back to stable, and if pledge revenues remain strong enough to provide very strong coverage. MITCHELL TOPCO: S&P Affirms 'B-' ICR; Outlook Stable ---------------------------------------------------- S&P Global Ratings affirmed all its ratings on U.S.-based software and services provider Mitchell Topco Holdings Inc., including the 'B-' issuer credit rating. The weaker global growth and disruption stemming from the COVID-19 pandemic will affect Mitchell's performance in 2020. "We estimate that 40% of Mitchell's annual revenue is tied to variable transaction volumes, and that 35% is tied to transaction volumes which, historically, have been easy to predict. We expect that the 40% of revenues tied to pure transactions are subject to downside risk in the current environment. The company's transaction volumes are related to items such as auto casualty claims, auto physical damage claims, workers compensation-bill review, managed care, independent medical exams, and pharmacy," S&P said. "We think that the company still has a good existing pipeline of work as many claims-related services Mitchell provides currently pre-date the coronavirus outbreak. While these claims are likely to resume and generate revenue for Mitchell, we believe that revenue recognition may be delayed until patients feel safe to resume their treatments of care, including visiting doctors proceeding with medical procedures and attending physical therapy sessions--thus generating activity from which Mitchell collects service revenues," the rating agency said. The stable outlook reflects S&P's expectation that the company's leverage will rise to the high-8x area in 2020, but that business prospects should improve once the coronavirus threat eases. S&P expects Mitchell's liquidity to remain sufficient, and for cash flow after debt service to remain modestly positive in 2020. "We could lower the rating if leverage exceeds and is sustained above 10x, with EBITDA interest coverage declining to the mid-1x range. Mounting liquidity pressures, such as covenants limiting full revolver access or sustained free cash flow declines, could also lead to a downgrade," S&P said. "An upgrade is unlikely over the next 12 months due to Mitchell's elevated leverage profile. Longer term, we could raise the rating if the company reduces its adjusted leverage to under 7.5x on a sustained basis and its free operating cash flow to debt ratio reaches the mid-single-digit percent area. This would likely happen if the company gains share across its clinical, casualty, and auto service offerings as evidenced by above-market average growth and improved profitability," the rating agency said. MONTICELLO PIZZA: May 27 Plan & Disclosures Hearing Set ------------------------------------------------------- On April 16, 2020, Judge Kathleen H. Sanberg conditionally approved the Disclosure Statement regarding the Plan filed by debtor Monticello Pizza, LLC and ordered that: * May 27, 2020, at 1:30 p.m., in courtroom no. 8 West, United States Courthouse, 300 South Fourth Street, Minneapolis, Minnesota is the hearing to consider final approval of the disclosure statement and confirmation of the plan. * Seven days prior to the hearing is the last day to timely deliver an objection, and ten days prior to the hearing is the last day to timely mail an objection. * May 27, 2020, is fixed as the last day to file a complaint objecting to the Debtor's discharge. * Five days prior to the hearing is fixed as the last day to timely file the ballots to accept or reject the plan. A copy of the order dated April 16, 2020, is available at https://tinyurl.com/y8jvbdrg from PacerMonitor at no charge. About Monticello Pizza Monticello Pizza Co., LLC, which conducts business under the name Little Caesars, sought Chapter 11 protection (Bankr. D. Minn. Case No. 19-43750) on Dec. 16, 2019. At the time of the filing, the Debtor disclosed assets of between $500,001 and $1 million and liabilities of the same range. Judge Kathleen H. Sanberg oversees the case. Steven B. Nosek, P.A., is the Debtor's legal counsel. MUSEUM OF AMERICAN JEWISH: Furloughs Employees Amid Pandemic ------------------------------------------------------------ Peter Crimmins, reporting for whyy.org, reports that the Philadelphia-based National Museum of American Jewish History is furloughing employees, sending about two-thirds of staff on temporary, unpaid leave. According to the report, NMAJH Interim CEO Misha Galperin planned to keep the facility's doors open while it's in bankruptcy court. But on March 13, the museum closed its doors due to the coronavirus, along with every other museum. The Jewish museum quickly initiated salary cuts. But unlike others, the NMAJH's bankruptcy proceeding makes it ineligible for emergency federal aid, such as the Paycheck Protection Program (PPP). "It's a big deal," said Galperin. "It could have provided 2 and a half months of operating expenses. Without it, we have to cut back, furlough staff, and hopefully weather the rest of the pandemic and bankruptcy." He expects NMAJH to emerge from bankruptcy in six months. About Museum of American Jewish History The Museum of American Jewish History -- https://www.nmajh.org -- is a Pennsylvania non-profit organization which operates the National Museum of American Jewish History, the only museum in the nation dedicated exclusively to exploring and interpreting the American Jewish experience. The museum presents educational and public programs that preserve, explore and celebrate the history of Jews in America. The museum was established in 1976 and is housed in Philadelphia's Independence Mall. On March 1, 2020, Museum of American Jewish History sought Chapter 11 protection (Bankr. E.D. Pa. Case No. 20-11285). The Debtor was estimated to have $10 million to $50 million in assets and liabilities. Judge Magdeline D. Coleman oversees the case. The Debtor tapped Dilworth Paxson, LLP, as its legal counsel and Donlin, Recano & Company, Inc. as its claims agent. NATIONAL MARINA: Case Summary & 8 Unsecured Creditors ----------------------------------------------------- Debtor: National Marina Recovery, LLC 112 County Road 1710 Cabin 10 Clifton, TX 76634-3921 Business Description: National Marina Recovery, LLC is a shell company as defined in the Securities Exchange Act of 1934 Rule 12b-2. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-60320 Judge: Hon. Ronald B. King Debtor's Counsel: Jason Gallini, Esq. THE GALLINI FIRM, PLLC PO Box 1283 Round Rock, TX 78680-1283 Tel: (512) 238-8883 E-mail: jasongallini@gallinifirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Richard Lance Deal, manager-president. A copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/UMapfI NFP CORP: Moody's Rates $300MM Senior Secured Notes 'B2' -------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to $300 million of five-year senior secured notes being issued by NFP Corp. (NFP, corporate family rating B3). The notes are being offered to qualified institutional investors under Rule 144A of the Securities Act of 1933. They are secured on a pari passu basis with first priority senior secured debt and credit facilities. NFP will use net proceeds from the offering for general corporate purposes. The rating outlook for NFP is unchanged at stable. RATINGS RATIONALE For insurance brokers, including NFP, the coronavirus and related economic downturn will negatively impact revenues, earnings and cash flows depending on the duration and severity of the downturn. Insurance premium volumes will be hurt by declining insured exposures and return premium provisions in various commercial lines, all of which will put downward pressure on brokers' commissions and fees. However, brokers will benefit from the mandatory nature of many insurance products (to meet insured parties' regulatory and financing requirements) and by the brokers' largely variable cost structure. NFP maintains a $400 million revolving credit facility, and this debt issuance adds cash to its balance sheet to provide additional liquidity to operate in the current environment. Moody's expects that NFP will limit discretionary spending, including acquisitions, in the months ahead to maintain its credit profile. NFP's ratings reflect its expertise and solid market position in insurance brokerage, particularly providing employee benefits and property & casualty products and services to mid-sized firms. The company also offers insurance and wealth management services to high net worth individuals. The business is well diversified across products, clients and regions primarily in the US. The company has been expanding its P&C operations, primarily through acquisitions, and the P&C business represented about 30% of consolidated revenues for 2019. Offsetting these strengths are NFP's persistently high financial leverage and limited interest coverage, leaving the company little room for error in managing its existing and acquired operations. NFP also has contingent earnout liabilities that consume a significant portion of its free cash flow. Moody's expects the company to preserve liquidity and to limit debt-funded acquisitions during the economic downturn. Giving effect to the proposed financing, NFP will have pro forma debt-to-EBITDA around 7.5x, (EBITDA - capex) interest coverage in the range of 1.3x-1.6x, and free-cash-flow-to-debt in the low single digits, according to Moody's estimates. The rating agency expects NFP to maintain financial leverage at or below 7.5x. These pro forma metrics reflect Moody's adjustments for operating leases, contingent earnout obligations, certain non-recurring items and run-rate EBITDA from acquisitions. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade of NFP's ratings include: (i) debt-to-EBITDA ratio below 6x, (ii) (EBITDA- capex) coverage of interest exceeding 2x, (iii) free-cash-flow-to-debt ratio exceeding 5%, and (iv) successful integration of acquisitions. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio above 7.5x, (ii) (EBITDA - capex) coverage of interest below 1.2x, (iii) free-cash-flow-to-debt ratio below 2%, or (iv) a significant loss of revenue and decline in EBITDA resulting from the economic downturn. Moody's has assigned the following rating (and loss given default (LGD) assessment): $300 million five-year senior secured notes at B2 (LGD3). The following NFP ratings remain unchanged: Corporate family rating at B3; Probability of default rating at B3-PD; $400 million senior secured revolving credit facility maturing in February 2025 at B2 (LGD3); $1,850 million senior secured term loan maturing in February 2027 at B2 (LGD3); $305 million senior secured notes maturing in February 2027, at B2 (LGD3); $650 million senior unsecured notes maturing in July 2025, at Caa2 (LGD5); $250 million senior unsecured notes maturing in July 2025, at Caa2 (LGD5). The rating outlook for NFP is unchanged at stable. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Based in New York City, NFP provides a range of brokerage, consulting and advisory services, including corporate benefits, retirement, property & casualty, individual insurance and wealth management solutions largely in the US. The company generated revenue of $1.5 billion in 2019. NORTH TEXAS MARINA: Case Summary & 17 Unsecured Creditors --------------------------------------------------------- Debtor: North Texas Marina Investments, LLC Uncle Gus Marina DBA Uncle Gus Marina & Resort DBA Uncle Gus' Marina - RV Park & Cabins DBA Uncle Gus' Marina and Resort 112 County Road 1710 Cabin 10 Clifton, TX 76634-3921 Business Description: North Texas Marina Investments, LLC dba Uncle Gus Marina and Resort (https://unclegusmarina.com) is a family owned facility located in Texas. It is a full service marina with cabins, RV sites, a grill, and boat service and rentals. Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-60321 Judge: Hon. Ronald B. King Debtor's Counsel: Jason Gallini, Esq. THE GALLINI FIRM, PLLC PO Box 1283 Round Rock, TX 78680-1283 Tel: (512) 238-8883 Email: jasongallini@gallinifirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Richard Lance Deal, president. A copy of the petition containing, among other items, a list of the Debtor's 17 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/WRXkv4 NUSTAR ENERGY: S&P Alters Outlook to Stable, Affirms 'BB-' ICR -------------------------------------------------------------- S&P Global Ratings affirmed the 'BB-' issuer credit rating and all issue ratings on Nustar Energy L.P. S&P revised the outlook to stable from negative, which captures its view that leverage will remain around 6x over the next two years and the company is exposed to volumetric risk in both its storage and pipeline segments. Nustar's $750 million unsecured term loan significantly mitigates refinancing risk in advance of upcoming maturities over the next 12 months. The unsecured term loan can be used to repay upcoming maturities and revolver borrowings, which effectively mitigates short-term refinancing risk. S&P now thinks liquidity will remain adequate to repay the upcoming $450 million maturity in September 2020 and the $300 million maturity in 2021. The next significant maturity is for $250 million in 2022. This action supports its view that the capital structure is sustainable and the balance sheet is in line with the 'BB-' rating. The stable outlook reflects S&P's view that NuStar will continue to operate its assets efficiently and focus on retaining cash and maintaining adequate liquidity. S&P expects volume growth to remain under pressure in its forecast over the next 18–24 months. The rating agency expects adjusted leverage to average about 6x for the next few years. "We could consider a negative rating action if NuStar's leverage rises above 6.5x on an adjusted basis or if liquidity deteriorates. This could occur due to underperformance in one of its business segments, especially if volumes decline materially below our base-case expectation," S&P said. "While unlikely at this time, we could revise our outlook to positive if NuStar maintains debt to EBITDA below 5.5x. This could occur if NuStar realizes higher volumes than we forecast, resulting in stronger cash flows, while liquidity remains at least adequate," S&P said. OMG MH HOLDINGS: Taps Brennan Manna as Legal Counsel ---------------------------------------------------- OMG MH Holdings, LLC, received approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Brennan, Manna & Diamond, LLC as its legal counsel. Brennan will provide services in connection with Debtor's Chapter 11 case, which include legal advice regarding its powers and duties under the Bankruptcy Code; negotiation with its creditors; and the preparation of a plan of reorganization. Michael Steel, Esq., the firm's attorney who will be handling the case, charges an hourly fee of $350. Paralegals charge $85 per hour. The firm received a retainer in the amount of $20,000. Mr. Steel disclosed in court filings that he does not represent any interest adverse to Debtor and its bankruptcy estate. Brennan can be reached through: Michael A. Steel, Esq. Brennan, Manna & Diamond, LLC 800 West Monroe St. Jacksonville, FL 32202 Tel: (330) 374-7471 Email: masteel@bmdllc.com About OMG MH Holdings OMG MH Holdings, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). OMG MH Holdings sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-00478) on Feb. 12, 2020. At the time of the filing, Debtor disclosed zero assets and total liabilities of $4,291,161. Judge Cynthia C. Jackson oversees the case. Brennan, Manna & Diamond is Debtor's legal counsel. PARCELS B AND C: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Parcels B and C, LLC, according to court dockets. About Parcels B and C Parcels B and C, LLC, based in Key West, FL, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-12423) on Feb. 24, 2020. In the petition signed by Walter Galnovatch, authorized member, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Judge Laurel M. Isicoff oversees the case. Brian S. Behar, Esq., at Behar Gutt & Glazer, P.A., is the Debtor's bankruptcy counsel. PENOBSCOT VALLEY: Lawmakers Push to Make PPP Relief Available ------------------------------------------------------------- Calais Regional Hospital and Penobscot Valley Hospital previously sought Chapter 11 protection but continue to provide care to patients. WABI5 reports that some Maine lawmakers are pushing the U.S. Small Business Administration to amend a ruling stating that no "bankrupt entities" will be eligible for the Paycheck Protection Program. Senators Susan Collins and Angus King, together with Congressman Jared Golden, say that Penobscot Valley Hospital and Calais Regional Hospital should be eligible to the program as they are still providing care to patients. About Calais Regional Hospital Based in Calais, Maine, Calais Regional Hospital -- https://www.calaishospital.org/ -- operates as a non-profit organization offering cardiac rehabilitation, emergency, food and nutrition, home health, inpatient care unit, laboratory, nursing, radiology, respiratory care and stress testing, surgery, and social services. Calais Regional Hospital filed a Chapter 11 petition (Bankr. D. Maine Case No. 19-10486) on Sept. 17, 2019. At the time of filing, the Debtor had estimated assets and liabilities of $10 million to $50 million. Judge Michael A. Fagone oversees the case. The Debtor is represented by Murray Plumb & Murray. About Penobscot Valley Hospital Penobscot Valley Hospital -- http://www.pvhme.org/-- operates a general medical and surgical facility in Lincoln, Maine. It has been serving the community for over 40 years with a wide variety of services and treatment options. Penobscot Valley Hospital sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 19-10034) on Jan. 29, 2019. At the time of the filing, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of $1 million to $10 million. The case is assigned to Judge Michael A. Fagone. The Debtor tapped Murray Plumb & Murray as its legal counsel. PIERLESS FISH: $450K Sale of Assets to Baldor Specialty Approved ---------------------------------------------------------------- Judge Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York authorized Pierless Fish Corp.'s sale of the assets to Baldor Specialty Foods, Inc. or its assignee for $450,000. The Court conducted an auction of the Assets and the Sale Hearing on April 22, 2020. The Acquired Assets do not include any inventory located at Lineage Logistics PFS LLC in Kearny and Jersey City, New Jersey. The sale is free and clear of all Interests or Claims, with all such Interests or Claims to attach to the cash proceeds. Pursuant to sections 365(b)(1)(A) and (B) of the Bankruptcy Code, the Debtor will pay $324,499 within two business days from the Closing Date or as otherwise agreed between the parties as a condition to assuming and assigning each Assumed Lease. Because time is of the essence, the Sale Order will be effective and enforceable immediately upon entry and its provisions will be self-executing, and the stay of (i) orders authorizing the sale, use, or lease of property of the estate, as set forth in Bankruptcy Rule 6004(h), (ii) orders authorizing the assignment of an executory contract or unexpired lease, as set forth in Bankruptcy Rule 6006(d), and (iii) proceedings to enforce a judgment, as set forth in Bankruptcy Rule 7062, or otherwise will not apply to the Sale Order. The Debtor's equity interest holder Robert Demasco will utilize all commercially reasonable efforts to assist in the collection of the Debtor's accounts receivable which are Excluded Assets under the APA and will also cooperate in all respects with respect to the collection of the Debtor's accounts receivable. The Debtor will promptly file a motion with the Bankruptcy Court to amend the caption to delete the Pierless Fish Corp. name and substitute a liquidating corporation in its place. About Pierless Fish Corp. Pierless Fish Corp. supplies fish and shellfish to chefs and restaurants in Brooklyn, N.Y. Pierless Fish filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 19-47655) on Dec. 23, 2019. In the petition signed by Robert DeMasco, president and chief executive officer, the Debtor was estimated to have between $1 million and $10 million in both assets and liabilities. Judge Carla E. Craig oversees the case. The Debtor tapped Tarter Krinsky & Drogin LLP as its legal counsel, and Imspiegel, LLC as its accountant. The U.S. Trustee for Region 2 appointed a committee of unsecured creditors on Jan. 24, 2020. The committee is represented by Cohen Tauber Spievack & Wagner P.C. PIXIUS COMMUNICATIONS: $4.1MM Sale to LTD Broadband Okayed ---------------------------------------------------------- Pixius Communications, LLC's sale of non-real estate assets to LTD Broadband, LLC, for $4.1 million has obtained court approval. LTD Broadband won an auction for the assets held in February. In a March 19 order, the Court held that LTD is purchasing the assets in good faith within the meaning of 11 U.S.C. Sec. 363(m). In a March 10 order, Judge Nugent directed the Debtor to close the sale of assets to LTD. In this case, detailed bid procedures were negotiated among the debtor-in-possession, the unsecured creditors' committee, and a secured creditor and were approved by the Court. An auction based on those instructions ensued. Two bids were obtained and the auction closed. Thereafter, a rump group of three of the members of the debtor LLC, who are also secured creditors, asked the debtor to "reject" the current bids so that they can make a partial credit bid under 11 U.S.C. section 363(k) and a partial cash bid in an effort to outbid the actual participants in the auction. At a hearing held on March 6, the Court directed that the Members' Bid be put in writing, along with an executed proposed Asset Purchase Agreement, and filed not later than the close of business on March 9, 2020. Those documents were timely filed. Bid Procedures were approved in this case on Dec. 4, 2019 for sale of substantially all of debtor's assets. The current matter relates only to the sale and bids for debtor's personal property -- primarily equipment, eight owned towers, customer contracts, and FCC licenses, with executory contracts and unexpired leases to be assumed and assigned. They provided for an orderly process that required potential bidders to submit their Potential Bid Documents by Dec. 23, 2019 to gain access to the Data Room, and their bids to be submitted by January 6, 2020. If an auction became necessary, it was to be conducted Jan. 13, 2020. The bid submission deadline and auction date were extended one week to Jan. 13 and Jan. 20, respectively. The auction date was further extended to and conducted on Feb. 7. Several bidders qualified and bid by the initial deadline, but only two participated in the auction: LTD Broadband, LLC and JMZ Corporation. There is no contention that any secured creditor sought to qualify as a potential or actual bidder. Nor did any secured creditor participate in the auction itself. Both the court's order and the procedures it approved provided that cause existed to limit certain credit bids under section 363(k), stating that creditors holding claims secured by equipment did not yet hold "allowed secured claims" because their collateral had not yet been valued and because piece meal credit bidding would chill the bidding process. The debtor is a Kansas limited liability company with numerous members. Four of those members serve on the "board of members" and the company's business is managed by a non-member manager as Kansas law allows. The fifth member, Jay Maxwell, is no longer on the board and there is a contentious dispute between him and the other four members. Before this case was filed, all five members acquired the company's secured debt to CrossFirst Bank. Each member claims to be owed some portion of that debt, which is secured by all of the assets of the debtor, and which totals approximately $4,338,984.50. According to the schedules, the assigned CrossFirst debt is secured by all of the debtor's assets. Three of the four remaining board members, Robert G. Hanson, Lies Investments, LP, and James R. Vosburgh, have joined to formulate the Members' Bid, that was proffered orally to the court at the March 6 hearing and documented in the March 9 submission. The Court approved Bid Procedures after several hearings. The board of members, Maxwell, and the committee negotiated the terms of the procedures. Paragraph 3(a) of the Bid Procedures required that if two or more bids were received, the Seller, defined as the debtor and the Committee, would conduct an auction. Only bidders who had supplied the Required Bid Documents would be permitted to attend the auction. Bidding would begin with the Starting Bid being the highest or otherwise best offer, followed by rounds of subsequent bidding with the high bid in each round being announced by the Seller. No secured creditor with a lien on equipment was permitted to credit bid. Each bidder had the opportunity to submit a bid "with full knowledge and confirmation of the Leading Bids." The Seller was to maintain a transcript of the auction. None has been provided to the Court. At the close of the bidding, the Seller could review and evaluate each bid on the basis of financial and contractual terms and other relevant factors. Prior to adjourning the auction, the Seller was to identify the Successful Bid and next highest bid, called the Alternate Bid. The Seller was to then file a motion within five business days of the auction for the Court's approval of the Successful Bid. The Seller failed to follow these last two steps of the auction procedures. At a hearing on Feb. 26, 2020, the debtor announced that the auction had been conducted on Feb. 7 and that two bids had been received, one from LTD and the other from JMZ. LTD's bid was for $4.1 million and JMZ's for $4.075 million. LTD agreed to acquire only some of the debtor's lease obligations while JMZ offered to acquire all of them. At the February 26 hearing, debtor's counsel made no recommendation concerning which was the Successful Bid, noting that the assumption of various leases had economic implications for the estate that made it difficult to weigh the two bids side by side. Because some members of the Committee are lessors under leases that might be rejected to their detriment, the Committee essentially "recused" on the issue of which was the better bid, and simply urged the court to make a prompt decision. All parties agree that the estate is insolvent, and the unsecured creditors are out of the money, at least from the proceeds of this sale. Based upon the Court's review and comparison of bids provided by the debtor's Further Submissions, Judge Nugent finds that LTD's offer yields the most net cash to the estate. LTD offers $4,100,000 from which the cost of curing, assuming and assigning 17 leases, some property tax, and equipment financiers' secured claims will be deducted, leaving $3,669,716 through March 31, 2020. By comparison, JMZ offers $4,075,000, $25,000 less than LTD, but requires the curing, assumption, and assignment of all 81 tower and ground leases, ATC's equipment leases, payment of property tax, and payment of equipment secured claims, leaving net proceeds of $2,861,826 through March 31, 2020. The debtor's Further Submission posits that post-petition administrative rents payable to the lessors of rejected leases should be deducted from these net amounts and paid from the sale proceeds. But as Mr. Maxwell, another member and assignee of CrossFirst Bank noted, there is no legal basis to deduct these administrative expenses from secured creditors' proceeds. They may constitute priority claims as administrative rent payable under section 503(b) that would be accorded priority under section 507(a)(2), but they are still unsecured claims. It is important to distinguish between amounts necessary to cure and assume the leases to be transferred and administrative rents owing to rejected lessors, which are debts that may have priority. The former are permissible surcharges against the secured creditors under Sec. 506(c) while the latter are unsecured claims not entitled to payment from the proceeds of secured property. Likewise, potential rejection damage claims associated with rejected leases are unsecured claims that are not entitled to payment ahead of secured claims and should not be deducted from the net proceeds. Both LTD and JMZ rejected the "Cox" executory contract. JMZ indicated its intent to negotiate post-closing a new agreement with Cox. Nothing precludes LTD from doing the same. The services provided under the Cox contract have been described as "critical to the operation of the debtor's business." One other major difference between LTD's and JMZ's bid, is that JMZ assumed the ATC equipment leases, while LTD rejected them, resulting in an additional cure amount of $170,064 to be paid from the JMZ proceeds. According to the Court, LTD's bid provides the highest amount of consideration considering the relationships it agrees to assume resulting in the highest net benefit to the estate. In sum, the Members' Bid cannot be considered without disregarding the Bid Procedures, which are part of a final order of this Court. LTD's bid yields the most net cash to the estate before application to the secured creditors' claims, and is therefore declared the Higher and Best Bid. A copy of the Court's Order dated March 10, 2020 is available at https://bit.ly/34E32B6 from Leagle.com. Pixius Communications LLC, Debtor, represented by Eric W. Lomas -- elomas@klendalaw.com -- Klenda Austerman LLC, Christopher A. McElgunn -- cmcelgunn@klendalaw.com -- & J. Michael Morris, Klenda Austerman LLC. U.S. Trustee, U.S. Trustee, represented by Christopher T. Borniger, Office of the United States Trustee. Official Committee of Unsecured Creditors, Creditor Committee, represented by Andrea M. Chase -- achase@spencerfane.com -- Spencer Fane LLP & Eric L. Johnson . About Pixius Communications Pixius Communications LLC -- https://www.pixius.com/ -- is an internet service provider in Wichita, Kansas. It offers comprehensive solutions to its customers to meet their internet and technology needs, where traditional services fail or do not reach. Pixius Communications sought Chapter 11 protection (Bankr. D. Kan. Case No. 19-11749) on Sept. 13, 2019. The Debtor was estimated to have assets between $1 million and $10 million, and liabilities between $10 million to $50 million. The petition was signed by Michael Langer, manager. Hon. Robert E. Nugent is the case judge. Klenda Austerman LLC is the Debtor's counsel. POLYONE CORP: S&P Alters Outlook to Negative, Rates New Debt 'BB-' ------------------------------------------------------------------ S&P Global Ratings assigned a 'BB-' issue-level rating to PolyOne Corp.'s $650 million in senior unsecured notes with a '5' recovery rating, indicating its expectation for modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. S&P affirmed the existing unsecured debt issue-level ratings at 'BB-'. The recovery rating remains '5'. S&P is affirming the issue-level ratings on the existing senior secured debt at 'BB+'. The recovery rating on the secured debt remains '2', indicating S&P's expectation for substantial (70%-90%; rounded estimate 85%) recovery in the event of a payment default. At the same time, S&P is revising the outlook to negative from stable, and affirming the 'BB' issuer credit rating. The outlook revision follows a significant downward revision in S&P's macroeconomic expectations for 2020 because of the coronavirus pandemic. S&P now expects U.S. and Eurozone 2020 GDP to decline by 5.2% and 7.3%, respectively, and Asia-Pacific (APAC) GDP to increase by a mere 0.3%. If the virus is not contained, the macroeconomic impact could be much more severe than the rating agency is factoring in its 2020 assumptions. S&P expects the automotive market (transportation accounts for roughly 13% of PolyOne's pro forma revenues) will be particularly hard hit, and project global sales will decline by about 15% in 2020 to less than 80 million units. Additionally, the company is increasing its debt balances with the new issuance to partially fund the acquisition of the Clariant masterbatch business. "We believe that the acquisition poses moderate integration risk, particularly as it is the largest the company has done in its history. We believe the company's financial policies support the current ratings, as evidenced by issuing nearly $500 million of equity in the first quarter and using cash on hand to fund roughly 60% of the $1.45 billion purchase price for the acquisition," S&P said. The negative outlook reflects the potential for weakening pro forma EBITDA and credit measures in excess of what S&P has modeled into its base case. S&P's base case factors in a global recession in 2020, which should particularly affect the company's transportation, building and construction, and industrial end markets. However, S&P notes that the acquisition of Clariant's masterbatch business significantly increases the percentage of revenues from more recession resistant end markets, such as health care, consumer, and packaging. These end markets comprise about 50% of the company's revenues, which is roughly double what they were heading into the 2008-2009 recession. S&P believes the company's financial policies will continue to support the ratings, as evidenced by funding around 60% of the purchase price with cash on hand and a first-quarter 2020 equity issuance. S&P expects the company to sustain weighted average FFO to debt (pro-forma for acquisitions and divestitures) in the 20%-30% range. "We could lower the ratings over the next 12 months if the coronavirus pandemic has a significantly more material effect on the company's EBITDA prospects and credit measures. In such a downside scenario, we would expect PolyOne's moderately weaker pro forma revenues and EBITDA margins to decline by around 100 basis points (bps), causing pro forma FFO to debt to drop below 20% without near-term prospects for improvement. We could also lower our rating if the company encounters challenges integrating the transformational acquisition, such that the company is unable to achieve the $60 million in synergies that it has targeted over the next few years," S&P said. "We could revise the outlook to stable within the next 12 months if the macroeconomic environment recovers quickly from the coronavirus pandemic with limited signs of permanent demand destruction. We could also consider revising the outlook if the company's more recession-resilient businesses are able to offset the expected weakness in the more cyclical segments, such that the company's weighted average pro forma FFO to adjusted debt to improve remain more solidly in the 20%-30% range, on a sustainable basis. This could occur if the company's EBITDA margins improve by over 100 bps and its revenue growth is moderately stronger than we expect. Before considering an outlook revision, we would also need to believe that the integration of the Clariant business is proceeding on schedule," S&P said. QUORUM HEALTH: Mudrick Seeks Appointment of Equity Committee ------------------------------------------------------------ Mudrick Capital Management, L.P., has filed a motion to appoint an official committee of equity holders in the Chapter 11 cases of Quorum Health Corporation and its affiliates. The company's attorney, David Rosner, Esq., at Morris, Nichols, Arsht & Tunnell, LLP, said there is no estate fiduciary to represent shareholder interests as QHC's Board of Directors and management "have abandoned those interests in favor of those of QHC's noteholders." "Despite the Board owing fiduciary duties to the equity holders, Mudrick is not aware of any effort by the Board to protect value for equity," Mr. Rosner said in court filings. "In particular, even though members of the Board were all interested parties in the RSA negotiations given the plan releases, and no special committee or other independent party was established to evaluate whether the plan was in the best interests of the debtors' equity holders," Mr. Rosner said, referring to QHC's restructuring support agreement (RSA) with certain lenders, including the senior noteholders who would become the owners of the reorganized company upon confirmation of QHC's pre-packaged Chapter 11 plan. As a result, certain protections for equity are "entirely absent" from the plan, according to the attorney. Mudrick Capital is a beneficial owner of approximately 15 percent of the equity securities of Quorum, according to court filings. Mudrick Capital is represented by: Robert J. Dehney, Esq. Joseph C. Barsalona II, Esq. Morris, Nichols, Arsht & Tunnell, LLP 1201 North Market Street, 16th Floor P.O. Box 1347 Wilmington, Delaware 19899-1347 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 E-mail: rdehney@mnat.com jbarsalona@mnat.com - and - David S. Rosner, Esq. Howard W. Schub, Esq. Matthew B. Stein, Esq. Shai Schmidt, Esq. Kasowitz Benson Torres LLP 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700 Facsimile: (212) 506-1800 E-mail: drosner@kasowitz.com hschub@kasowitz.com mstein@kasowitz.com sschmidt@kasowitz.com 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: Richards, Milbank Represent Term Lender Group ------------------------------------------------------------ In the Chapter 11 cases of Quorum Health Corporation, et al., the law firms of Milbank LLP and Richards, Layton & Finger, P.A. submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that they are representing the Ad Hoc Group of Term Lenders. In January 2020, the Ad Hoc Group of Term Lenders retained Milbank as counsel with respect to the First Lien Loans. From time to time thereafter, certain holders of First Lien Loans have joined the Ad Hoc Group of Term Lenders. In April 2020, the Ad Hoc Group of Term Lenders retained Richards Layton to act as Delaware counsel. Counsel represents the Ad Hoc Group of Term Lenders and does not represent or purport to represent any entities other than the Ad Hoc Group of Term Lenders in connection with the Debtors' cases. In addition, neither the Ad Hoc Group of Term Lenders nor any member of the Ad Hoc Group of Term Lenders represents or purports to represent any other entities in connection with these cases. As of April 27, 2020, members of the Ad Hoc Group of Term Lenders and their disclosable economic interests are: First Lien Loans ---------------- BlackRock Financial Management, Inc. $44,752,445.34 40 E 52nd Street New York, NY 10022 Caspian Capital LP $94,531,336.00 10 E. 53rd Street, 35th Floor New York, NY 10022 HPS Investment Partners, LLC $78,950,176.55 40 W. 57th Street, 33rd Floor New York, NY 10019 Knighthead Capital Management, LLC $33,554,895.02 1140 Avenue of the Americas, 12th Floor New York, NY 10026 Redwood Capital Management, LLC $53,127,326.06 910 Sylvan Avenue Englewood Cliffs, NJ 07632 Counsel to the Ad Hoc Group of Term Lenders can be reached at: RICHARDS, LAYTON & FINGER, P.A. Mark D. Collins, Esq. Russell C. Silberglied, Esq. Sarah E. Silveira, Esq. One Rodney Square 920 North King Street Wilmington, DE 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 Email: collins@rlf.com silberglied@rlf.com silveira@rlf.com - and - MILBANK LLP Dennis F. Dunne, Esq. Tyson M. Lomazow, Esq. 55 Hudson Yards New York, NY 10001-2163 Telephone: (212) 530-5000 Facsimile: (212) 530-5219 Email: ddunne@milbank.com tlomazow@milbank.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/RnGIE6 and https://is.gd/fWf7bA 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 $203.4 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 RADIOLOGY PARTNERS: S&P Downgrades ICR to 'B-'; Outlook Stable -------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on California-based Radiology Partners Holdings LLC to 'B-' from 'B'. At the same time, S&P is lowering its issue-level ratings on the company's revolver and secured debt to 'B-'from 'B'. The recovery rating is '3' (50%-70%; rounded estimate: 60%). S&P is also lowering its rating on the company's unsecured notes to 'CCC' from 'CCC+'. The recovery rating is '6' (0%-10%; rounded estimate: 0%). "The downgrade reflects recent results that are below our expectations. Radiology Partners Holdings LLC's (RP) more aggressive than expected pace of debt-finance acquisitions led to lower free cash flow and significantly higher leverage following debt-financed acquisitions in 2019. Furthermore, we believe that volume decline in 2020 due to COVID-19 pandemic situation will further delay deleveraging and ability to generate positive free cash flow. Previously, we had expected some improvement in EBITDA margins in 2019 and 2020, debt reduction as RP integrated acquisitions, and slightly positive free cash flow generation. Now, due to pressured top line and profitability in 2020, we expect RP to generate significantly negative free cash flow in 2020," S&P said. "We also believe that the company will likely resume its aggressive pace of acquisitions in 2021. In our revised base case, we expect that once this activity restarts, leverage and cash flow expectations will be more commensurate with the revised rating," S&P said. The stable outlook reflects S&P's view that RP will enhance scale through its aggressive growth strategy of debt-financed acquisitions in 2021, after having paused that strategy in 2020 due to business-related disruptions caused by the pandemic. It also reflects the rating agency's view that RP has enough liquidity to weather the operational challenges created by to the pandemic. "We could lower our rating on RP if we think the company cannot generate positive free cash flows, even when excluding nonrecurring acquisition-related costs, and will consistently generate negative free cash flow. This could occur if margins decline by more than 200 basis points from our base case, resulting in unsustainably high leverage and negative free cash flow that impairs liquidity," S&P said. "We could raise our rating if RP improves its margins such that it consistently generates positive annual free cash flow, resulting in discretionary cash flow to debt of above 3%. To do so, RP would have to exceed our base-case margin assumption by about 500 bps or lower capital expenditures (capex) and working capital needs," the rating agency said. RAI CONCRETE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: RAI Concrete, Inc. 1827 Blackhawk Dr. West Chicago, IL 60185-1600 Business Description: RAI Concrete, Inc. is a concrete contractor based in West Chicago, Illinois. The Debtor previously sought bankruptcy protection on Dec. 12, 2012 (Bankr. N.D. Ill. Case No. 12- 48787). Chapter 11 Petition Date: May 5, 2020 Court: United States Bankruptcy Court Northern District of Illinois Case No.: 20-10474 Judge: Hon. Carol A. Doyle Debtor's Counsel: David Herzog, Esq. DAVID HERZOG 77 W Washington Suite 1400 Chicago, IL 60602 Tel: (312) 977-1600 E-mail: drhlaw@mindspring.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Carmela Raimondi, president. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/KZePEh RE/MAX LLC: S&P Alters Outlook to Negative, Affirms 'BB' ICR ------------------------------------------------------------ S&P Global Ratings revised its rating outlook on Denver-based residential real estate and mortgage franchisor RE/MAX LLC to negative from stable. At the same time, S&P affirmed all its ratings, including the 'BB' issuer credit rating on the company and the 'BB+' issue-level rating on its secured credit facilities. As the real estate market enters its peak season, recent trends in unemployment, mortgage purchase applications, and existing and new home listings indicate significant declines in existing home sales are likely. Despite RE/MAX LLC's franchise-fee model, which has previously better insulated revenue and profit volatility, S&P believes the weak selling environment will weigh heavily on agent and franchise retention rates in 2020. During the last recession in 2008, S&P estimated RE/MAX experienced agent and franchise declines of approximately 10%-20%. S&P's base case for 2020 calls for non-recurring (broker fees/franchise sales) and recurring revenues (franchise and agent fixed fees) to be down about 25%-30% and 10%-13%, respectively. Compared with the last recession, as social distancing measures are lifted and supportive fiscal and monetary economic policies are implemented, S&P believes the residential real estate market will be better positioned for a recovery. Lastly, the addition of the Motto Mortgage franchise has broadened the company's recurring revenue base relative to the last recession and should cushion expected declines. The negative outlook reflects the weak selling environment, uncertain timing of a recovery, and risk that the agent and franchise network could meaningfully erode, resulting in decreased recurring revenues. Over the next six to 12 months, S&P could lower the ratings if it projected adjusted leverage to be sustained above 3.5x due to the following catalysts: -- Economic conditions delay a real-estate recovery until early 2021. -- Worse-than-expected agent and franchise attrition. -- Increased financial support for franchises through extended deferrals or potentially waivers. -- Opportunistic debt-financed acquisitions of independent franchisors or the sale of co-founder David Linigar's minority ownership stake. S&P could revise the outlook to stable if it believed leverage would be sustained below 3x due to the following catalysts: -- Economic conditions support a real-estate recovery beginning in the second half of 2020. -- Stabilization of agent and franchise attrition. -- Prudent cost and cash flow management. -- Change in capital allocation policy prioritizing debt repayment over dividends. RRNB 1290: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: RRNB 1290 LLC 8511 River Road New Braunfels, TX 78132 Business Description: RRNB 1290 LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-50883 Debtor's Counsel: Morris E. "Trey" White III, Esq. VILLA & WHITE LLP 1100 N.W. Loop 410 Ste. 802 San Antonio, TX 78213 Tel: (210) 225-4500 E-mail: treywhite@villawhite.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert Kane, managing member. The Debtor stated it has no unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/PaJaan RRNB 8400: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: RRNB 8400 LLC 8511 River Road New Braunfels, TX 78132 Business Description: RRNB 8400 LLC is a privately held company based in New Braunfels, Texas. The Company previously sought bankruptcy protection on Dec. 2, 2019 (Bankr. W.D. Tex. Case No. 19- 52855). Chapter 11 Petition Date: May 4, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-50884 Debtor's Counsel: Morris E. "Trey" White III, Esq. VILLA & WHITE LLP 1100 N.W. Loop 410 Ste. 802 San Antonio, TX 78213 Tel: (210) 225-4500 E-mail: treywhite@villawhite.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert Kane, managing member. The Debtor stated it has no unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/wcpi1i RUBIE’S COSTUME: Seeks Chapter 11 as Facilities Non-Essential --------------------------------------------------------------- New York-based costume manufacturer, designer, and distributor Rubie's Costume Company Inc. and its affiliates sought Chapter 11 bankruptcy due to the coronavirus pandemic. James Zahn, writing for the toybook, notes that the uncertainty brought by COVID-19 era continues to cause havoc to companies of different sizes. "Given the highly seasonal nature of our business, our manufacturing relationships in China, the chilling impact of the COVID-19 pandemic on the U.S. and the global economy and potential liquidity pressures, the Board of Directors determined that the Chapter 11 filing is our best path forward as we carry out our restructuring efforts. We believe that this decision will best serve our customers, licensors, employees, and business partners," said Rubie's President Marc P. Beige, according to toybook. toybook recently reported that Rubie's slashed its workforce by 75% as its New York and California-based facilities were considered non-essential as of March 26, 2020. The company also shifted its manufacturing facilities to help in the production of personal protective equipment and hand sanitizer to aid in fighting against COVID-19. Rubie's said it "plans to use cash collateral and is engaged in the process to place a new financing facility, along with the continued support of the Beige family, that will provide for the continuation of its operations, including payments to vendors, employees, customers, and creditors." Rubie's filed the customary first-day motions at the Bankruptcy Court to support business operations during the court-supervised process, like motions to request authority to pay the prepetition wages and benefits of employees and to continue its licensor and customer programs. Prior to the onset of the pandemic, Rubie's was looking forward to have a big year filled with new product offerings and new licenses. Some upcoming lineup of items were also detrimentally affected by shifts in release dates due to production stoppage and theatre closures. About Rubie's Costume Rubie's is the world's biggest distributor, manufacturer and designer of costume and party-related accessories that serve over 2,000 retail accounts. It also maintains licensing partnerships with top studios, like Nickelodeon, Warner Bros, Lucasfilm, Marvel, and Disney for products inspired by WWE, Ghostbusters, Stranger Things, DC Comics, JoJo Siwa, Harry Potter, Star Wars and many more. Rubie's Costume Company, Inc. and its affiliates sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-71970) on April 30, 2020. The Hon. Alan S. Trust is the case judge. Rubie's Costume was estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the filing. The legal counsel of Rubie's include Meyer, Suozzi, English & Klein, P.C. and Togut, Segal & Segal LLP. BDO USA, LLP is the company's restructuring advisor and SSG Capital Advisors LLC is its investment banker. Kurtzman Carson Consultants is the claims agent. RUSTY GOLD: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------ The Office of the U.S. Trustee for Region 19 appointed a committee to represent unsecured creditors in the Chapter 11 case of Rusty Gold Hydro-Testers, Inc. The committee members are: 1. TEDA TPCO America Corporation (Representative: Blair Myers) c/o David Warner Wadsworth Garber Warner Conrardy, PC 2580 W. Main St., Ste.200 Littleton, CO 80120 Phone: (303) 296-3826 dwarner@wgwc-law.com 2. Hyundai Steel USA, Inc. (Representative: Kris Blackman) c/o J. Brian Fletcher Onsager | Fletcher | Johnson 1801 Broadway, Suite 900 Denver, CO 80202 Phone: (720) 457-7060 jbfletcher@ofjlaw.com 3. SeAH Steel America, Inc. (Representative: Kirk Murray) c/o Chad S. Caby Lewis Roca Rothgerber Christie LLP 1200 17th St. Suite 3000 Denver, CO 80202-5855 Phone: (303) 623-9000 ccaby@lrrc.com 4. SDB Trade International, LP (Representative: Wesley D. Sherer) 11200 Richmond Ave., Suite 180 Houston, TX 77082 Phone: (713) 475-0048 Fax: (713) 475-0083 wsherer@thesdbgroup.com 5. Pyramid Tubular Products, LLC (Representative: Ted Bigelow) 480 Wildwood Forest Drive #700 Spring, TX 77380 Phone: (281) 405-8090 Fax: (281) 405-8089 tbigelow@pyramidtubular.com 6. HUSTEEL USA, Inc. (Representative: David Piland) 2222 Greenhouse Rd., Suite 500 Houston, TX 77084 Phone: (817) 308-3787 Fax: (281) 497-6787 david@husteelusa.com 7. Karst Industries, Inc. (Representative: David Karst) P.O. Box 2200 Mills, WY 82644 Phone: (307) 577-6000 Fax: (307) 237-5240 david@karstind.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Rusty Gold Hydro-Testers Rusty Gold Hydro-Testers, Inc., d/b/a Catamount Oilfield Services, offers a full line of API tubing, casing, and line pipe to the oilfield industry, headquartered in Fort Morgan, Colorado, filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Col. Case No. 20-12629) on April 16, 2020. The petition was signed by Clinton Gould, its president. At the time of the filing, the Debtor disclosed total assets of $8,944,869 and total liabilities of $12,808,395. The Hon. Michael E. Romero oversees the case. The Debtor tapped Buechler Law Office, LLC as its legal counsel. SAMSONITE INTERNATIONAL: S&P Cuts Rating on Credit Facilities to BB ------------------------------------------------------------------- S&P Global Ratings lowered its issue-level rating on Samsonite International S.A.'s senior secured credit facilities to 'BB' from 'BB+' and revised its recovery rating to '2' from '1' following Samsonite IP Holdings S.a.r.l and co-borrower Tumi Inc.'s proposed incremental $500 million term loan B issuance. This reflects the increase in the company's senior secured debt following the proposed offering. The '2' recovery rating indicates S&P's expectation for substantial recovery (70%-90%; rounded estimate: 75%) in the event of a payment default. Samsonite IP Holdings S.a.rl. and Tumi Inc. are wholly owned subsidiaries of the group parent, Samsonite International S.A. The company intends to use the proceeds from these notes to add cash to its balance sheet and for general corporate purposes. S&P anticipates higher pricing on this add-on and the inclusion of a minimum liquidity covenant initially set at $200 million, stepping down to $100 million after the third quarter in 2021. All other terms including the security package and guarantor package are consistent with the existing term loan B. Ratings are based on preliminary terms and are subject to review upon receipt of final documentation. At the same time, S&P lowered its issue-level rating on the company's unsecured debt to 'B+' from 'BB-' and revised its recovery rating to '5' from '4'. The '5' recovery rating indicates S&P's expectation for modest recovery (10%-30%; rounded estimate: 25%) in the event of a payment default. The lower recovery expectation reflects the increase in Samsonite's senior secured debt. S&P's 'BB-' issuer credit rating remains unchanged. The rating agency expects the transaction to be leverage neutral provided the company maintains the cash on its balance sheet. The transaction will provide Samsonite with additional liquidity as its operating performance remains depressed due to the suspension of global travel and the substantial retail store closures related to the efforts to contain the spread of the coronavirus. Along with the transaction, the company received an amendment to its senior secured credit facilities. Under the amendment, Samsonite's net leverage and interest coverage covenants will be suspended until the third quarter in 2021. In exchange, the company must maintain minimum liquidity of at least $400 million (or following an incurrence of excess of $400 million of third party indebtedness, $500 million). "If the travel industry or macroeconomic conditions worsen such that we do not believe it will be able to restore its debt leverage to about 5x or below by the second half of 2021, we could lower our ratings," S&P said. ISSUE RATINGS--RECOVERY ANALYSIS The company's capital structure comprises: -- A $850 million revolver due in 2025; -- A $800 million term loan A due in 2025, ($797 million outstanding at the end of 2019); -- A $665 million term loan B due in 2025, ($555 million outstanding at the end of 2019); -- Incremental $500 million term loan B due in 2025; -- EUR350 million of 3.5% senior unsecured notes due in 2026. Jurisdiction insolvency regimes Samsonite International S.A. is a Luxembourg corporation. The company has assets in North America, Asia, Europe, and Latin America. S&P believes it would file for bankruptcy protection in the U.S. under the administration of the U.S. bankruptcy court system while entities abroad remain out of any insolvency proceedings with respect to local jurisdictions. Security and guarantee package The issuer and the guarantors combined represented about 36.5% of fiscal-year 2019 adjusted EBITDA. For the purposes of S&P's recovery analysis, it assumes about 50% of EBITDA on a run-rate basis assuming the restoration of operations. The borrowers of the revolver are Samsonite International S.A., Samsonite Europe N.V., Samsonite IP Holdings S.a.r.l, Samsonite LLC, Samsonite Co. Stores LLC, and Tumi Inc. The borrowers of the term loan A and B are Samsonite IP Holdings S.a.r.l and Tumi Inc. If the foreign entity were a subsidiary of the borrower or guarantor, there would be a stock pledge. Guarantors include all wholly owned domestic restricted direct and indirect subsidiaries. The first-lien facilities are secured by a first-priority lien on most of the borrower and guarantors' tangible and intangible assets, including 100% of the capital stock of the borrower and any subsidiary of the borrower or guarantors subject to customary exceptions (but limited to 66% of the voting equity interests of any such subsidiary that is a tax-excluded subsidiary or a foreign subsidiary). The issuer of the unsecured notes is Samsonite Finco S.a.r.l., a financing subsidiary of Samsonite International S.A. The entity has no operations and the debt is serviced by the cash flows from the company's European operations. The notes are senior unsecured obligations subordinated to the company's senior secured credit facilities and future senior secured facilities. The notes' guarantors include all wholly owned domestic restricted direct and indirect subsidiaries, though they are subordinate to the senior secured credit facilities. Key analytical factors -- S&P simulated default scenario assumes a payment default occurring in 2024 due to the loss of revenue and cash flow from a prolonged decline in global economic conditions that substantially reduces discretionary spending and travel. -- Subsequently, the company may have to fund its cash flow shortfalls with available cash and revolver borrowings. Eventually, its liquidity and capital resources would be strained to the point where it cannot continue to operate without an equity infusion or bankruptcy filing. -- Year of default: 2024 -- EBITDA at emergence: $358.4 million -- Implied enterprise value multiple: 6x The default EBITDA of $358.4 million roughly reflects fixed-charge requirements of about $195.7 million in interest cost, $46.5 million in term loan amortization, and $54.6 million in minimal capital expenditure (capex) assumed at default. S&P applies a 15% operational adjustment because it believes the fixed charges undervalue the company given its relatively lower leverage. S&P estimates a gross valuation of about $2.2 billion assuming a 6x EBITDA multiple, which is in line with the multiples it uses for some of the company's peers. Simulated default assumptions -- Simulated year of default: 2024 -- Implied enterprise value multiple: 6x -- EBITDA at emergence: $358.4 million -- Jurisdiction: U.S. -- Debt service assumption: $242.2 million (assumed default year interest plus amortization) -- Minimum capex assumption: $54.6 million -- Operational adjustment: 15% Simplified waterfall -- Gross recovery value: $2.2 billion -- Net recovery value for waterfall after administrative expenses (5%): $2 billion -- Obligor/nonobligor valuation split: 50%/50% -- Collateral value available to secured first-lien debt: $1.7 billion -- Estimated senior secured first-lien claims: $2.5 billion -- Recovery expectations for senior secured debt: 70%-90% (rounded estimate: 75%) -- Collateral value available to senior unsecured debt: $357.5 million -- Estimated senior unsecured claims: $1.3 billion -- Recovery expectations for senior unsecured debt: 10%-30% (rounded estimate: 25%) Note: All debt amounts include six months of prepetition interest. SFKR LLC: May 26 Disclosure Statement Hearing Set ------------------------------------------------- On April 15, 2020, Debtor SFKR, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Texas, Tyler Division, a Disclosure Statement and Plan. On April 17, 2020, Judge Bill Parker ordered that: * April 20, 2020, is fixed as the last day to distribute the Disclosure Statement and Plan only to those limited number of parties designated by Fed. R. Bankr. P. 3017(a). * May 19, 2020, is fixed as the last day for filing and serving written objections to the Disclosure Statement. * May 26, 2020, at 2:00 p.m. by telephonic means is the hearing to consider approval of the Disclosure Statement. A copy of the order dated April 16, 2020, is available at https://tinyurl.com/yb5udec8 from PacerMonitor at no charge. The Debtor is represented by: Eric A. Liepins, Attorney at Law 12770 Coit Road, Suite 1100 Dallas, TX 75251 E-mail: eric@ealpc.com Tel: (972) 991-5591 Fax: (972) 991-5788 About SFKR LLC SFKR, LLC, is a privately held company based in Tyler, Texas. Its business consists of the ownership of a number of pieces of commercial property. SFKR, LLC, sought Chapter 11 protection (Bankr. E.D. Tex. Case No.19-60674) on Oct. 1, 2019. In the petition signed by Shahzad Asghar, managing member, the Debtor was estimated to have assets in the range of $0 to $50,000 and $1 million to $10 million in debt. The case is assigned to Judge Bill Parker. The Debtor tapped Eric A. Liepins, Esq., at Eric A. Liepins, as counsel. SILVER CREEK: June 4 Plan Confirmation Hearing Set -------------------------------------------------- On March 9, 2020, debtor Silver Creek Services, Inc. filed with the U.S. Bankruptcy Court for the Western District of Pennsylvania a Disclosure Statement and a Plan of Reorganization. On April 16, 2020, Judge Thomas P. Agresti approved the Disclosure Statement and established the following dates and deadlines: * May 22, 2020, is the last day for filing written ballots by creditors, either accepting or rejecting the plan, filing claims not already barred by operation of law, and filing and serving written objections to confirmation of the plan. * June 4, 2020 is the last day for filing a complaint objecting to discharge. * June 4, 2020 at 10:00 a.m. in Courtroom "C", 54th Floor, U.S. Steel Tower, 600 Grant Street, Pittsburgh, PA 15219 is the plan confirmation hearing. A full-text copy of the order dated April 16, 2020, is available at https://tinyurl.com/y77ocdn7 from PacerMonitor at no charge. About Silver Creek Services Silver Creek Services Inc. provides oil and gas field services, including fracturing, flowback and production testing. Silver Creek Services filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Penn. Case No. 19-22775) on July 11, 2019. In the petition signed by CEO Michael Didier, the Debtor disclosed $6,385,000 in assets and $11,922,381 in liabilities. Robert O. Lampl, Esq., at Robert O. Lampl Law Office, is the Debtor's legal counsel. SISTERS HOME: $1.2M Sale of Tuckerton Property to Downing Approved ------------------------------------------------------------------ Judge Michael Kaplan of the U.S. Bankruptcy Court for the District of New Jersey authorized Sisters Home Center, LLC's sale of the real property located at 227 East Main Street, Tuckerton, New Jersey to Richard Downing as nominee for an entity to be form or his designated assignee for $1.2 million. The sale is free and clear of all liens, claims, interest and encumbrances of any kind or nature what so ever. BCB Bank will provide the Debtor with a payoff letter setting forth the total amount due and owing to satisfy the mortgage held by the bank on the real property. At the time of the closing of title, the Debtor will be authorized to pay any and all municipal charges and fees necessary to consummate the closing including redeeming any tax sale certificates or other municipal liens. The Seller will not be required to pay the realty transfer fee in connection with the closing as the sale is by a debtor in possession with the rights of a Trustee in bankruptcy. There was no real estate broker involved in the transaction and no brokers commission will be paid. The net proceeds of sale after payment of the municipal liens and BCB Bank mortgage will be deposited in the DIP's bank account and will be distributed through a Chapter 11 plan or will be held pending further order of the Court. The 14-day stay otherwise imposed by bankruptcy rule 6004(h) is waived and the Order will be effective immediately upon entry. About Sisters Home Center Sisters Home Center, LLC, owner of a hardware store in Tuckerton, N.J., previously sought bankruptcy protection (Bankr. D.N.J. Case No. 17-10509) on Jan. 10, 2017. Sisters Home Center again sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 19-17143) on April 8, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Michael B. Kaplan. SIWF HOLDINGS: Moody's Lowers CFR to B3, Outlook Negative --------------------------------------------------------- Moody's Investors Service downgraded SIWF Holdings, Inc.'s Corporate Family Rating to B3 from B2, its Probability of Default Rating to B3-PD from B2-PD, its senior secured first lien term loan due 2025 rating to B2 from B1, and the senior secured second lien term loan due 2026 rating to Caa2 from Caa1. The outlook is negative. Its downgrades and negative outlook reflect Moody's view that the high level of unemployment, weak economic outlook and lower consumer spending as a result of the coronavirus pandemic will materially affect demand for Springs' window covering products in 2020. Springs' products are discretionary and cyclical in nature, and customers pull back purchases during economic downturns. Given the anticipated decline in sales and earnings, debt/EBITDA is expected to significantly increase to around 8.0x and free cash flow expected to be modest in fiscal year 2020. Downgrades: Issuer: SIWF Holdings, Inc. Probability of Default Rating, Downgraded to B3-PD from B2-PD Corporate Family Rating, Downgraded to B3 from B2 Senior Secured 1st Lien Bank Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: SIWF Holdings, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE Springs' B3 CFR reflects its elevated financial leverage with debt/EBITDA at around 5.9x for the fiscal year period December 28, 2019. The company is exposed to cyclical headwinds due to the discretionary nature of its products, and Moody's expects the weak economic outlook and lower consumer spending as a result of the coronavirus pandemic will negatively impact new orders and the company's operating results. As a result, Moody's expects debt-to-EBITDA leverage will increase to around 8.0x in fiscal 2020 and free cash flow to be modest. Governance factors include aggressive financial policies under private equity ownership. The rating also reflects the company's strong position in the windows covering market, supported by a broad product portfolio and ability to execute quick order turnaround times. The company's adequate liquidity reflects its cash balance of $58 million plus the $113 million available on its $125 million revolving credit facility due 2023 at fiscal year-end December 28, 2019, and lack of near-term maturities until the revolver expires. The negative outlook reflects Moody's expectation that headwinds related to the coronavirus outbreak will pressure Springs' profitability and cash flows, and the downside pressure on the CFR given the uncertainty around the duration of the outbreak and weak economic conditions, as well as the pace of the rebound once the pandemic begins to subside. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The consumer durables 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 Springs' credit profile, including its exposure 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 Springs 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 ratings could be upgraded if operating results and free cash flow generation improve driven by sustained organic revenue growth, if debt/EBITDA is sustained below 6.0x, and the company maintains at least adequate liquidity. The ratings could be downgraded if Moody's expects weak economic conditions to persist longer or a weaker earnings recovery, resulting in debt/EBITDA sustained above 7.0x over the next 12-18 months. Ratings could also be downgraded if liquidity deteriorates for any reason including increasing revolver reliance. Headquartered in Middleton, Wisconsin, Springs Windows designs and manufactures window coverings. Annual revenue is around $1 billion. The company was acquired in June 2018 by AEA Investors and British Columbia Investment Management Corporation. SKLAR EXPLORATION: Holland, Balch Updates on Pruet Oil, 2 Others ---------------------------------------------------------------- In the Chapter 11 cases of Sklar Exploration Company, LLC and Sklarco, LLC, the law firms of Holland & Hart LLP and Balch & Bingham LLP submitted an amended and restated verified notice under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of clients that it is representing. The first client is RAPAD Well Service Co. Inc. whose address is 217 West Capitol Street, Suite 201, Jackson, Mississippi 39201. RAPAD provided pre-petition services to Debtor Sklar Exploration Company, LLC for which it holds a general unsecured claim in an amount no less than $374,069.26. The second client is Pruet Oil Company, LLC whose address is 217 West Capitol Street, Suite 201, Jackson, Mississippi 39201. Pruet Oil holds a non-operator interest in an oil and gas well in Conecuh County, Alabama operated by SEC and holds claims against SEC and/or funds held by SEC for a cash call advance made by Pruet Oil to SEC in the amount of $274,562.72 as well as claims arising out of SEC's breach of the underlying operating agreement. The third client is Pruet Production Co. whose address is 217 West Capitol Street, Suite 201, Jackson, Mississippi 39201. Counsel represents Pruet Production both in its individual capacity and as agent and attorney in fact for the working interest holders identified in Schedule A with respect to their interest in what commonly is referred to as the SW Brooklyn Oil Unit, the SE Brooklyn Oil Unit, and the Little Cedar Creek Unit II. Debtor Sklarco, LLC is a non-operating interest holder in properties operated by Pruet Production. SEC is an operator in properties in which Pruet Production and the Pruet Group non-working interest holders. Pruet Production both individually and as agent of the Pruet Group is owed revenues for production by SEC/ Pruet Production individually and as agent of the Pruet Group also has claims for cash call advances and breach of operating agreement. Pruet Production also is owed no less than $112,436.80 in unpaid JIB. Counsel filed its original Verified Rule 2019 Statement of Multiple Representation on April 23, 2020 [Doc. 162]. Counsel files this Amended & Restated Verified Rule 2019 Statement of Multiple Representation to reflect the addition of Petroleum Investments, Inc. as part of the Pruet Group as further reflected upon the amended Schedule A. Counsel for RAPAD Well Service Co. Inc., Pruet Oil Company, LLC, and Pruet Production Co. both in its individual capacity and as agent and attorney for the Pruet Group. can be reached at: Matthew J. Ochs, Esq. Holland & Hart LLP 555 17th Street, Suite 3200 Denver, CO 80202 Tel: (303) 295-8299 E-mail: MJOchs@hollandhart.com - and - Jeremy L. Retherford, Esq. Balch & Bingham LLP 1901 Sixth Avenue North, Suite 1500 Birmingham, AL 35203-4642 Tel: (205) 226-3479 E-mail: jretherford@balch.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/00xwW0 About Sklar Exploration Company Sklar Exploration Company, LLC -- https://sklarexploration.com/ -- is an independent exploration production company owned and managed by Howard F. Sklar. With offices in Boulder, Colo., Shreveport, La., and Brewton, Ala., Sklar owns interests in oil and gas wells located throughout the United States. Its exploration and production activities have historically focused on the hydrocarbon-rich Lower Gulf Coast basins and in the Interior Gulf Coast basins of East Texas, North Louisiana, South Mississippi, South Alabama, and the Florida Panhandle. Sklar Exploration Company and Sklarco, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Lead Case No. 20-12377) on April 1, 2020. At the time of the filing, Sklar Exploration had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Sklarco disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Elizabeth E. Brown oversees the cases. The Debtors are represented by Kutner Brinen, P.C. SOS TOWING: $190K Sale of 5 Vehicles to Speed Approved ------------------------------------------------------ Judge Brenda T. Rhoades of U.S. Bankruptcy Court for the Eastern District of Texas authorized SOS Towing, LLC's sale of the following five vehicles to Speed of Service Towing, LLC: (i) 2016 Freightliner M2 (VIN 1FVACWDT4GHHC6509) for $50,000; (ii) 2015 Dodge Ram 5500 (VIN 3C7WRNDL7FG594630) for $40,000; (iii) 2013 Dodge Ram 4500 (VIN 3C7WRLAL3DG532745) for $41,000; (iv) 2015 Dodge Ram 5500 (VIN 3C7WMDL0FG706601) for $42,000; and (v) 2017 Ford Transit Connect (VIN NM0LS7E74H1325663) for $17,000. The sale is free and clear of all liens, claims and encumbrances, and such liens, claims and encumbrances will attach to the sale proceeds in the order of priority and with the same validity as they attached to the Vehicles. The Secured Lenders will be paid in full from the sale proceeds within seven business days following closing of the sale. The Secured Lenders are not required to release their liens on the Certificates of Title until paid in full under non-contract law in good and sufficient funds. With the exception of the sales proceeds of $50,000 pertaining to the sale of the 2016 Freightliner M2, VIN # 1FVACWDT4GHHC6509, any excess sale proceeds will be paid to the Debtor. The Debtor will pay to Santander Bank, N.A. the amount of $50,000 realized from the sale of the Freightliner, whereby $38,055 will be applied to the payoff for the Freightliner and the remaining amount will be paid and applied to other secured debt owed by the Debtor to Santander Bank, N.A. based on the applicable loan documents, or as otherwise agreed to by the parties. There will be no 14-day delay in the effectiveness of the Order of Sale. About SOS Towing, LLC SOS Towing, LLC, a Texas-based company that offers automotive towing services, filed a voluntary petition under Chapter 11 Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-40496) on Feb. 18, 2020. The petition was signed by Anthony Trujillo, president. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Joyce Lindauer, Esq. at JOYCE W. LINDAUER ATTORNEY, PLLC, serves as the Debtor's counsel. SPANISH BROADCASTING: Receives $6.5 Million PPP Unsecured Loan -------------------------------------------------------------- Given the uncertainty in the duration of the COVID-19 pandemic, Spanish Broadcasting System, Inc. applied for and on April 15, 2020 received $6,478,800 in an unsecured loan funded under the PPP. The Company said the PPP Loan is necessary to support the Company's ongoing operations and enables the Company to avoid further employee furloughs or layoffs in the near term. The Company intends to apply for forgiveness of the PPP Loan after the 8-week period and will use these proceeds during the 8-week period to maintain employment and compensation levels and pay benefits, rent and utilities. Although, the Company intends to obtain forgiveness of the PPP Loan in whole or in part, there is no assurance that the Company will be successful. The Paycheck Protection Program ("PPP") was established as part of the Coronavirus Aid, Relief, and Economic Security Act, to provide unsecured loans as a direct incentive to qualifying small businesses to keep their U.S. workers on the payroll during the COVID-19 pandemic. These unsecured loans will be forgiven as long as: (1) the loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and (2) employee and compensation levels are maintained. Payroll costs are capped at $100,000 on an annualized basis for each employee. The COVID-19 pandemic has resulted in the temporary disruptions of many of the Company's advertisers' businesses thereby impacting the Company's core source of revenue, which has had a material impact on Company's operations and financial condition. In response to decreasing advertising revenue and cash flow, the Company has implemented certain measures to reduce costs, including furloughing some employees, and protect its long-term financial health to ensure its ability to continue serving its viewers, listeners and advertisers. If a portion of the PPP Loan is not forgiven, the remaining portion will be for a term of two years but can be prepaid at any time prior to maturity without any prepayment penalties. The annual interest rate on the PPP Loan is 1.0% and no payments of principal or interest are due during the six-month period beginning on the date of the PPP Loan. Delays Filing of Reports On March 4, 2020, in response to the potential effects of the COVID-19 pandemic, the Securities and Exchange Commission issued an order pursuant to its authority under Section 36 of the Securities Exchange Act of 1934, as amended (Release No. 34-88318) granting exemptions from certain provisions of that Act and the rules thereunder related to the reporting and proxy delivery requirements for certain public companies, subject to certain conditions. The Commission monitored the effects of the COVID-19 pandemic and on March 25, 2020 modified the exemptions in light of its current understanding of the circumstances. For this reason and the reasons stated in the Original Order, the Commission found that modifying the exemptions to cover filings due on or before July 1, 2020, pursuant to its authority under Section 36 the Exchange Act, is appropriate in the public interest and consistent with the protection of investors (Release No. 34-88465). Due to the impact of the COVID-19 pandemic on its business, the Company is relying on the Order issued by the Commission to extend the May 15, 2020 required filing date of its Form 10-Q. The Company will also extend the April 29, 2020 required the filing date of its Definitive Proxy Statement on Form DEF 14A, including 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 include in the Proxy Statement. Spanish Broadcasting said, "The effects of the COVID-19 pandemic have limited the ability of the Company's employees to conduct normal business activities, including the preparation and review of the Form 10-Q and Proxy Statement. The Company is following the recommendations of governmental health authorities to minimize exposure risk for its employees, including having most employees work remotely. As a result of the Company's reduced workforce due to furloughs, the limited size of the Company's accounting staff, limited access to the Company's facilities and certain technology systems that the Company's staff relies on to prepare its Form 10-Q and Proxy Statement, the Company has experienced difficulties in completing the normal closing processes and internal reviews that are required to timely file the Form 10-Q and Proxy Statement. The Company expects to file the Form 10-Q on or before June 29, 2020, which is 45 days from the Form 10-Q's original filing deadline of May 15, 2020. The Company expects to file the Proxy Statement, including the Part III Information, no later than June 13 (which is 45 days from the Proxy Statement's original filing deadline of April 29, 2020). If the Form 10-Q and Proxy Statement are filed by June 29, 2020 and June 13, 2020, respectively, they will be deemed filed timely by the Commission. "In light of the continuing developments related to the COVID-19 pandemic, the Company intends to include the following revised risk factor discussion in the Form 10-Q, as such discussion may be updated to reflect events subsequent to the date of this report. The Company originally included a version of this risk factor in its Annual Report on Form 10-K for the year ended Dec. 31, 2019 but is updating such risk factor to reflect new developments related to the ongoing impact of the COVID-19 pandemic on the Company's operations. "The COVID-19 pandemic has adversely affected and could continue to adversely affect our business, financial position, results of operations, liquidity and cash flows. "The COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations. It has also impacted many of our advertisers, which have temporarily suspended operations. Our advertising revenue, and in particular cash advertising sales, makes up the majority of our revenue, and, like other radio and TV broadcast companies and similar businesses that depend on advertising spend, we are experiencing a decline in this revenue stream due to the COVID-19 pandemic. In response to this current health crisis, governmental authorities have imposed certain restrictions, including travel bans and recommendations on the limitation of social gatherings, which have directly impacted our ability to continue producing concerts and special events while those restrictions remain in place. Following a series of orders issued in our markets, New York, Los Angeles, Puerto Rico, Miami, Chicago and San Francisco, we have had to cancel events until further notice, which has reduced revenue and had a negative impact given the importance of these events to our audience and advertisers. In addition, our radio and TV station operations have been affected. Although our physical locations remain open, there is limited access and our employees are working remotely. We have also had to implement certain measures to reduce costs, including furloughing some employees. The health dangers of the COVID-19 pandemic, the length of time it will last, the impact these things will continue to have on the general economy and in the markets in which we operate, are unknowns at this time, and may be unknown for some time to come. While we believe that our radio and TV businesses will prove ultimately resilient in the face of a possible recession, the factors mentioned in the last sentence make it difficult to predict with certainty or precision the continuing negative impact of the COVID-19 pandemic on our business, financial position, results of operations, liquidity and cash flows, and that impact could continue to be material." About Spanish Broadcasting Spanish Broadcasting System, Inc. (SBS) -- http://www.spanishbroadcasting.com/-- owns and operates radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and Urbano format genres. SBS also operates AIRE Radio Networks, a national radio platform of over 275 affiliated stations reaching 95% of the U.S. Hispanic audience. SBS also owns MegaTV, a network television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico, produces a nationwide roster of live concerts and events, and owns a stable of digital properties, including La Musica, a mobile app providing Latino-focused audio and video streaming content and HitzMaker, a new-talent destination for aspiring artists. Spanish Broadcasting recorded a net loss of $928,000 for the year ended Dec. 31, 2019, compared to net income of $16.49 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $469.04 million in total assets, $549.34 million in total liabilities, and a total stockholders' deficit of $80.30 million. Crowe LLP, in Fort Lauderdale, Florida, the Company's auditor since 2013, issued a "going concern" qualification in its report dated March 30, 2020, citing that the 12.5% Senior Secured Notes had a maturity date of April 15, 2017. Cash from operations or the sale of assets was not sufficient to repay the notes when they became due. In addition, at Dec. 31, 2019, the Company had a working capital deficiency. These factors raise substantial doubt about its ability to continue as a going concern. STAR PETROLEUM: May 26 Disclosure Statement Hearing Set ------------------------------------------------------- On March 18, 2020, debtor Star Petroleum, Corp. filed with the U.S. Bankruptcy Court for the District of Puerto Rico a disclosure statement and chapter 11 plan of reorganization. On April 16, 2020, Judge Enrique S. Lamoutte ordered that May 26, 2020, is the hearing on the approval of the disclosure statement, and the hearing on the motion for use of Bautista Cayman Asset Company’s collateral. A full-text copy of the order dated April 16, 2020, is available at https://tinyurl.com/ycba3pwx from PacerMonitor at no charge. About Star Petroleum Corp. Star Petroleum, Corp., based in Toa Alta, PR, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 20-00558) on Feb. 5, 2020. In the petition signed by Sami Abraham, president, the Debtor disclosed $6,782,500 in liabilities. CHARLES A. CUPRILL, PSC LAW OFFICES, serves as bankruptcy counsel to the Debtor. STRUCTURED CABLING: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Structured Cabling Solutions, Inc., according to court dockets. About Structured Cabling Solutions Structured Cabling Solutions, Inc., is a telecommunication contractor in Miami Gardens, Fla. Structured Cabling Solutions filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-12551) on Feb. 26, 2020. In the petition signed by Syed A. Shah, its president, the Debtor disclosed $944,176 in assets and $3,273,790 in liabilities. The case is assigned to Judge Robert A. Mark. The Debtor tapped Chad Van Horn, Esq., at Van Horn Law Group Inc. as its counsel, and Carlos de la Osa, C.P.A., P.A. as its accountant. TOPGOLF INT'L: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. ---------------------------------------------------------------- Moody's Investors Service downgraded Topgolf International, Inc.'s Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa3-PD from Caa1-PD, and the first lien credit facility ratings (including a senior secured revolver and term loan) to Caa2 from B3. The outlook was changed to negative from stable. The downgrade of Topgolf's ratings reflect the impact of the coronavirus outbreak which has disrupted the ability to operate the company's venues until the spread of the virus subsides. As a result, leverage levels will increase substantially and liquidity will deteriorate for as long as the locations remain closed. Even with the re-opening of the venues, operating performance may remain below normal levels due to lower consumer spending arising from weak economic conditions and ongoing social distancing behaviors. Moody's projects Topgolf will need additional sources of liquidity to avoid a default. Downgrades: Issuer: Topgolf International, Inc. Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: Topgolf International, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Topgolf's Caa2 CFR reflects its already very high leverage of 7.3x (as of Q4 2019, including Moody's standard lease adjustments), which will increase further while the company's liquidity deteriorates due to the impact of the coronavirus outbreak which has limited the ability to operate its facilities. In the event that the venues open for a material portion of the 2020 season, Topgolf's customer visits are projected to be below normal levels as consumers maintain a degree of social distancing and avoid large crowds, and spend less on discretionary services due to a challenging economic environment. 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 out of home entertainment 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 Topgolf's credit profile, including its exposure to discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Topgolf 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 Topgolf of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. A governance consideration that Moody's considers in Topgolf's credit profile is the company's very aggressive financial policy given the development strategy of building and opening several new facilities. This financial strategy would require additional sources of funding beyond what is available from the $350 million term loan and $175 million revolving credit facility. The loss of cash flow from existing centers due to the pandemic will accelerate the decline in liquidity and increase the need for additional sources of funding. Topgolf has historically been able to raise additional funding to support its development plan, but an inability to raise additional funding going forward could lead to a default. Topgolf's business is cyclical and will compete for discretionary consumer income with an increasing array of alternative entertainment options. The large number of pro forma add backs to EBITDA for one-time startup costs and run rate operating performance of new locations is also a negative. In addition, the terms of the preferred equity, which include a liquidity demand notice, elevates uncertainty in the future. Topgolf has expanded the number of locations across the country which increases the company's scale and geographic diversity. The venues are high quality and typically significant in size which provides a unique experience to its guests and materially differentiates it from basic driving ranges and golf courses. While revenue generated from Topgolf's venues account for most of its revenue, the company also has several other smaller divisions including Media, Swing Suite, Toptracer, and an international licensing division. The negative outlook incorporates Moody's expectation of significant operating losses and cash usage due to the coronavirus outbreak's impact on Topgolf's ability to operate its venues and lower discretionary consumer spending which elevates the risk of default for Topgolf. Prolonged venue closures will erode Topgolf's liquidity and increase leverage levels substantially. If the venues open in the near term, Moody's expects performance will be dampened by a weak economy and the potential for consumers to maintain social distancing. Topgolf's liquidity position is weak and projected to be significantly constrained in the near term due to the coronavirus outbreak. Topgolf has access to a $175 million revolving credit facility and had $37 million of cash on the balance sheet as of Q4 2019. The company raised $100 million in preferred equity in Q4 2019, but Moody's expects negative free cash flow to continue despite efforts to reduce capex and expenses due to the pandemic. As a result, Moody's projects Topgolf will need additional sources of liquidity to avoid a default. Both the revolver and term loan are subject to a financial maintenance covenant of 5.5x over the life of the deal, and Moody's expects the company may breach its covenant in the near term. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded further due to elevated concerns about the potential for default or a distressed exchange arising from a sustained closure of Topgolf's venues. A continuing deterioration of the company's liquidity position or inability to obtain an amendment to its financial covenants would also lead to a downgrade. An upgrade is unlikely as long as the coronavirus limits the ability to operate Topgolf's venues. The ratings could be upgraded if Topgolf is able to operate its venues and obtain additional sources of liquidity to manage through the impact of the pandemic. Leverage levels maintained below 7.5x and confidence that Topgolf would remain in compliance with its covenants would also be required. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Topgolf International, Inc. currently owns and operates 57 golfing centers (54 in the US and 3 in the UK) as of yearend 2019 with 10 additional facilities under construction in the US. There is also 1 international franchise venue in Australia. The company has a Swing Suites offering that provides a simulated golf experience, its Toptracer golf tracking technology for traditional driving ranges, courses and broadcasters as well as its Media division. The company is privately owned by a group of investors that include WestRiver Group, Providence Equity Partners, Dundon Capital Partners, Callaway Golf and Fidelity Research and Management. Reported revenue LTM as of Q4 2019 was over $1 billion. TPRO ACQUISITION: S&P Alters Outlook to Negative, Affirms B- ICR ---------------------------------------------------------------- S&P Global Ratings revised its outlook on Memphis, Tenn.-based distributor of aftermarket truck and trailer parts TPro Acquisition Corp. to negative from stable and affirmed its 'B-' issuer credit rating. At the same time, S&P is affirming its 'B-' issue-level rating on the company's senior secured notes. The '4' recovery rating remains unchanged, indicating S&P's expectation for average recovery (30%-50%; rounded estimate: 35%) in the event of a payment default. "We expect weaker-than-anticipated demand stemming from the U.S. recession and low oil prices in 2020 to weaken the company's credit metrics in the near term. We expect TPro's revenue and earnings to decline this year due to weaker demand in some of its end markets as a result of COVID-19. However, we assume these declines will be limited because demand for repair parts is largely nondiscretionary, particularly as fleet operator customers defer purchases of new trucks and repair spending on existing trucks increases. In our view, TPro's variable cost structure will somewhat offset the decline in its EBITDA margin this year," S&P said. The negative outlook on TPro reflects S&P's view that the company will experience lower-than-expected revenue and earnings this year due in part to weak demand from its customers in the oil and gas end markets and the recession in the U.S., resulting in debt to EBITDA well above 8x 2020. "We could lower the rating on TPro in the next 12 months if the company faces liquidity strain or if FOCF turns negative. This could occur if the company is unable to achieve working capital gains to partially offset declines in earnings, or if revenues and margins decline substantially beyond our expectations due to an extended period of demand decline. Alternatively, we could lower the rating if we come to believe that TPro depends on favorable business, financial, and economic conditions to meet its financial commitments or if we view its financial commitments as unsustainable in the long term. Such factors may be material considerations even if the company might not face a credit or payment crisis within 12 months," S&P said. "We could revise the outlook on TPro to stable if the company experiences better-than-expected revenue and EBITDA growth such that debt to EBITDA improves below 7x with positive FOCF and if we believe credit metrics would remain at these levels on a sustained basis," S&P said. TWIN RIVER: Moody's Rates $275MM Term Loan Add-On 'Ba2' ------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Twin River Worldwide Holdings, Inc.'s $275 million add-on to the company's existing $298 million outstanding term loan B due 2026. TRWH's B2 Corporate Family Rating, B2-PD Probability of Default Rating, and Ba3 senior secured bank loan rating were affirmed. The company's SGL-2 Speculative Grade Liquidity rating and negative outlook remain unchanged. TRWH will use the proceeds from the add-on to fund the recently announced acquisition of three casinos as well as provide for an additional $75 million of liquidity in the form of cash. TRWH also announced that it obtained substantial covenant relief from its lenders. In addition to the $75 million increase in unrestricted cash and the easing of covenants, the affirmation of TRWH's B2 Corporate Family Rating considers the attractive purchase multiples based on the acquired assets' longer-term earnings potential. The assignment of a Ba2 rating to TRWH's term loan B add-on considers that it ranks pari-passu to the company's existing term loan and is secured and guaranteed on a similar basis. The purchase price for two Eldorado properties on a combined basis represents an implied trailing twelve-month proforma EBITDA multiple of approximately 4.1x, excluding any potential impact from possible synergies. The Bally's purchase price represents an implied trailing twelve-month EBITDA multiple of approximately 2.1x, excluding any potential impact from possible synergies. Under normal operating conditions, these acquisitions would be immediately accretive to earnings and would have a modest deleveraging impact on the company. Pro forma net debt/EBITDA is 4.3x compared to 4.5x net debt/EBITDA for the latest 12-month period ended March 31, 2020. The acquisitions also further diversify the company's geographic diversification into three additional states. On April 24, TRWH announced that it entered into an agreement with Eldorado Resorts, Inc. to acquire Eldorado Shreveport Resort and Casino in Shreveport, Louisiana and the Mont Bleu Resort Casino & Spa in Lake Tahoe, Nevada for $155 million. TRWH also announced that it entered into an agreement with Caesars Entertainment Corporation and Vici Properties Inc. to acquire Bally's Atlantic City Hotel & Casino for $25 million in cash. The Shreveport and Mont Bleu transaction is expected to close in the first half of 2021 and is conditioned upon consummation of the merger of Eldorado and Caesars. The Bally's transaction is expected to close in late 2020 or early 2021. Until the period March 31, 2021, TRWH will not be required to comply with the maximum total net leverage ratio covenant applicable under the bank credit facility, but instead will be required to comply with a minimum liquidity covenant tested at the last day of each month during the leverage ratio covenant relief period. As part of the amendment, TRWH also agreed not to pay or declare dividends on its common stock or make other restricted payments, complete investments or acquisitions (other than those previously announced) during the leverage ratio covenant relief period. Assignments: Issuer: Twin River Worldwide Holdings, Inc. Senior Secured Bank Credit Facility, Assigned Ba2 (LGD3) Affirmations: Issuer: Twin River Worldwide Holdings, Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3 from LGD2) Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5) Outlook Actions: Issuer: Twin River Worldwide Holdings, Inc. Outlook, Remains Negative RATINGS RATIONALE TRWH's B2 Corporate Family Rating incorporates the company's positive free cash flow during periods of normal operation, and improved geographic diversification resulting from acquisitions during the past year along with pending acquisitions. Also supporting the rating is TRWH's significant cash balance and no meaningful maturities until 2024. However, Twin River remains a relatively small regional gaming company in terms of revenue and will still have heavy exposure to the heightened level of competition for its Rhode Island properties coming from the increased gaming supply in Massachusetts. Additionally, Moody's expects a meaningful decline in Twin River's earnings over the next few months from efforts to contain the coronavirus and the potential for a slow recovery once properties reopen. Given the closure of properties and operations, EBITDA and free cash flow will be negative for an uncertain period of time. Twin River's credit metrics and liquidity will be under pressure during this period and could deteriorate quickly if facility closures are extended. TRWH's ratings also incorporate the company's low governance risk. Governance risk is considered low given Twin River's public ownership, track record of maintaining relatively low leverage, and a modest dividend payout since becoming a public company. TRWH has also historically operated with debt/EBITDA below 4.0x, and following debt financed acquisitions where debt/EBITDA has risen above 4.0x, has demonstrated the ability and willingness to reduce leverage to a pre-acquisition level. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector will be one of the sectors most significantly affected by the shock given the non-essential nature of casino gaming and the sector's historically high sensitivity to consumer demand and sentiment. More specifically, TRWH's continued exposure to travel disruptions and discretionary consumer spending, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions makes it vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. TRWH's ratings reflect the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook acknowledges that the coronavirus situation continues to evolve, and a high degree of uncertainty remains regarding the timing of facility re-openings and the pace at which consumer spending at Twin River's casinos will recover. As a result, the company's liquidity and leverage could deteriorate quickly over the next few months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if Moody's anticipates that Twin River's earnings decline or liquidity deterioration will be deeper or more prolonged because of actions to contain the spread of the coronavirus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment and continuing uncertainty related to the coronavirus. An upgrade would require a high degree of confidence on Moody's part that the gaming sector has returned to a period of long-term stability, and that Twin River demonstrate the ability to generate positive free cash flow, maintain good liquidity, and operate at a debt/EBITDA level at 5.0x or lower. Twin River owns and operates four casinos and one racetrack in four states -- two casinos in Rhode Island, one casino in Mississippi, one casino in Delaware, and one racetrack in Colorado. On March 28th, 2019, Twin River completed its merger with Dover Downs Gaming & Entertainment and also became a widely held publicly traded gaming operator listed on the NYSE as TRWH. Additionally, late last year, the company acquired a subsidiary of Affinity Gaming that owns Golden Gates, Golden Gulch and Mardi Gras in Blackhawk, Colorado. The company also agreed to acquire three properties from Eldorado as well as Bally's Atlantic City Hotel & Casino. Consolidated net revenue for the fiscal year ended December 31, 2019 was $523 million. ULTIMATE SOFTWARE: S&P Affirms 'B-' ICR on Merger With Kronos Inc. ------------------------------------------------------------------ S&P Global Ratings affirmed its 'B-' issuer credit rating on human capital management solutions provider The Ultimate Software Group Inc. after the company merged with Kronos Inc. At the same time, S&P affirmed its 'B' issue-level rating on the first-lien term loan; the '2' recovery rating is unchanged. The existing privately placed second-lien term loan remains unrated. The affirmation reflects Ultimate's high leverage and stronger position within the fair business risk profile through increased scale and product offerings. The merger will effectively double the scale of The Ultimate Software Group Inc. (over 6,000 customers), with Kronos Inc. (over 40,000 customers) contributing $1.47 billion of revenue and $355 million of EBITDA to Ultimate's $1.35 billion of revenue and $243 million of EBITDA as of December 2019. Combined, recurring revenue represents 79% of the $2.8 billion total (62% software-as-a-service [SaaS], 17% maintenance). Whereas Ultimate has been SaaS-only (88% of revenue) since 2002, Kronos has been ramping its SaaS offering over the past five years, representing 39% of revenue. S&P expects Kronos' SaaS segment to grow over time as it converts existing license/maintenance users and adds new customers to the platform. S&P's stable outlook on Ultimate reflects its view of the company's highly recurring revenue resulting from its SaaS business model (pro forma with Kronos), and the rating agency's expectation that the company will continue to grow its revenue base while modestly improving its EBITDA margins over the next 12-24 months. S&P expects minimal integration risk as there are no material headcount reduction plans; risk is mainly isolated to integrating back-office systems (enterprise resource planning [ERP]). "While not expected over the next 12 months, we could lower the rating if increased competition from other HCM players contributes to pricing pressure and increased customer attrition, leading to sustained negative free operating cash flow and weakening liquidity, including revolver availability, where we consider there to be an unsustainable capital structure," S&P said. "Although unlikely over the next 12 months given the high leverage and negative total cash flow generation expected, we could raise the rating over the longer term if the company reduces leverage to below 8x on a sustained basis, in addition to maintaining DCF to debt between 3%-5%," S&P said. VAIL RESORTS: S&P Assigns 'BB' ICR; Outlook Negative ---------------------------------------------------- S&P Global Ratings assigned its 'BB' issuer credit rating to Vail Resorts Inc. S&P assigned its 'BB' issue-level rating and '4' recovery rating to the company's proposed $600 million senior unsecured notes due 2025. The COVID-19 pandemic and U.S. recession will likely reduce Vail's cash flow and elevate its leverage in fiscal 2020 and 2021 ending in July compared to prior years, although S&P's current expectation of a moderate recovery beginning sometime midyear could mitigate the impact to the 2020-2021 winter season. Depending on the depth and longevity of restrictions and closures of out-of-home consumer entertainment, and the global recession, the range of outcomes may vary widely for revenue, EBITDA, and leverage in the company's 2020 and 2021 fiscal years. S&P's assumption is that stay-at-home orders will be lifted before the company's 2020/2021 winter ski season. However, a potential second wave of infections in the later part of 2020 may result in partial or full closures of many of Vail's resorts. Additionally, depending on the nature of a recovery in the second half of 2020, consumers may remain averse to travel, which could weaken demand at Vail's destination resorts. This may be partially mitigated by the local drive-to resorts in Vail's portfolio, and the potential that consumers may view outdoor winter sports as compatible with social distancing. The negative rating outlook reflects leverage above 4x in fiscal 2020 due to property closures and S&P's expectation that Vail's operating performance may continue to be impacted in fiscal 2021 as a result of decreased destination travel and consumer spending. While leverage could decline modestly to the mid- to high-3x range in fiscal 2021, ratings could be pressured if ski visitation remains low or mountain closures extend or reoccur during the 2020-2021 winter season. "We could lower our rating if lease-adjusted debt to EBITDA is likely to remain elevated above 4.25x for a prolonged period. This could occur because of materially lower skier visitation in fiscal 2021 or an extension or resumption in resort closures in the latter half of calendar 2020 and early 2021," S&P said. "We could revise the outlook to stable if we have greater confidence that resorts will remain fully operational through the 2020-2021 winter season and that leverage can be sustained below 4.25x. While unlikely at this time, longer term we could consider an upgrade if we believe operating performance can sustain lease-adjusted debt to EBITDA below 3.25x," S&P said. VERMONT COUNCIL OF DEVELOPMENT: S&P Alters Outlook to Stable ------------------------------------------------------------ S&P Global Ratings revised its outlook to stable from positive and affirmed its 'B' underlying rating (SPUR) on Vermont Educational & Health Building Finance Agency's series 2006A hospital revenue bonds, issued for the Vermont Council of Developmental & Mental Health Services Acquisition. "The outlook revision reflects our view of the balance-sheet metrics for Health Care and Rehabilitation Services, particularly liquidity and financial flexibility, which are lighter than expected based on the fiscal 2019 audit, in parallel with weaker-than-expected operations resulting in maximum annual debt service falling below 2x and business challenges due to mounting financial and economic recessionary pressures," said S&P Global Ratings credit analyst Wendy Towber. The 2006A bond series is a pooled financing issue comprising Health Care and Rehabilitation Services (HCRS) and NFI Vermont Inc. Since each participant is only responsible for its respective portion of the bonds, S&P bases the rating on the weaker provider's financial strength. The rating reflects the credit profile of HCRS, as it is the weaker of the providers on the outstanding series 2006A debt. The COVID-19 pandemic continues to change rapidly, with the potential to disrupt the health care industry across the country. While the duration, timing, and severity of the impact are unclear, and may vary by type of human service provider and region, S&P believes the pandemic, and its associated economic and social challenges, will create unique operating pressures in the near term. S&P believes HCRS and NFI Vermont credit fundamentals, including enterprise profile strengths such as demand and essentiality of services, should help support the issuer over the medium term. However, a more prolonged or severe stress to operations or the balance sheet of either organization could cause the rating agency to revise that view. S&P analyzed HCRS' environmental, social, and governance factors relative to essentiality, management, and provider market position, as well as the corresponding effects on the financial profile, and the rating agency determined that all are in line with its view of sector peers; all of which face somewhat elevated social risks associated with the COVID-19 situation and economic recession. The stable one year outlook reflects S&P's expectation that HCRS will maintain positive operating results that supports MADS coverage above 2x coupled with a steady balance sheet. VERRA MOBILITY: S&P Alters Outlook to Negative, Affirms 'B+' ICR ---------------------------------------------------------------- S&P Global Ratings revised its outlook on traffic safety and tolling and rental car and fleet management services provider Verra Mobility Corp. (Verra) to negative from stable and affirmed its 'B+' issuer credit rating on the company. "The negative outlook reflects our view that greater–than-expected disruption stemming from the COVID-19 pandemic has increased the risk that Verra's credit metrics could deteriorate and remain pressured through most of 2021," S&P said. S&P's baseline economic forecast was revised recently downward, with GDP now expected to contract by as much as 5.2% in 2020 before improving to 6.2% in 2021. Driving the reduction in GDP is the contraction in consumer discretionary spending, which S&P expects to decline by 33.5% (quarter-over-quarter annualized) in April-June and could remain pressured until early 2021. This will impact Verra's commercial services segment (61% of 2019 revenues), because demand is driven by rental car usage from business- and consumer-related travel and thereby highly correlated with discretionary spending. Air travel and rental car demand have already suffered tremendously, with global air travel down by 96% according to CNN, and domestic car rentals have fallen between 50% and 80% month over month from February into March within the U.S. according to the American Car Rental Association. S&P Global's current view is that it could take two full years for global air traffic to recover to pre-coronavirus levels. The combined impact on S&P's base case expectation is that revenues for commercial services could decline by around 20% in 2020, causing adjusted leverage to increase above 5x and remain there throughout most of 2021. Verra's government solutions business (39% of 2019 revenues) should continue to benefit from the ongoing installation of New York City school zone speed cameras, though any interruption to their execution or an extended period of reduced cars on the road would weigh on revenues. S&P expects management to exercise prudence with respect to expense management, keeping adjusted margins relatively steady in 2020 and supporting the continued generation of solid free cash flow. The negative outlook reflects S&P's expectation that despite Verra's efforts to manage its costs, operations will remain challenged amid a slow pace of recovery in consumer spending that may keep leverage above 5.0x on a sustained basis. "We could revise the outlook to stable if the decline in consumer spending and travel-related activity was not as steep as expected or the recovery occurred at a quicker pace than expected, allowing debt to EBITDA to remain below 5.0x and free operating cash flow to debt to sustained at the mid- to high-single-digit percentage area or better," S&P said. "We could lower our ratings on Verra if consumer spending and travel-related activity were to continue to remain depressed such that earnings and free cash flow were to weaken leverage to remain above 5x or free operating cash flow to debt to remain in the mid-single-digit percentage area," the rating agency said. WELBILT INC: S&P Downgrades ICR to 'CCC+'; Outlook Negative ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Welbilt Inc. to 'CCC+' from 'B-'. At the same time, S&P lowered its issue-level rating on the company's senior secured credit facilities to 'CCC+' from 'B-' and its issue-level rating on its senior unsecured notes to 'CCC' from 'CCC+' and are removing all of its ratings on Welbilt from CreditWatch, where it placed them with negative implications on March 24, 2020. S&P's recovery ratings remain unchanged. "Although Welbilt amended its credit agreement to address the concern that it would breach its financial covenants in 2020, we see additional risk in 2021. The company reached an agreement to amend its revolver's credit agreement, which included the suspension of its financial covenants for four quarters and the initiation of minimum EBITDA and liquidity levels as well as maximum capital expenditure levels. While this amendment alleviates some of Welbilt's near-term covenant issues, we do not believe it will have enough of a cushion under the reinstated covenants in the second quarter of 2021 given its higher expected leverage over the next year. Based on our scenario forecasts, we anticipate that the company's revenue will decline by 25%-30% in 2020 and lift its adjusted leverage well above 10x," S&P said. "The negative outlook reflects the potential that we will lower our rating on Welbilt due to the potential liquidity risk arising from its financial covenants and negative free operating cash (FOCF) flow, which could lead to a default event. Absent a material recovery in the company's end markets and profitability, we believe its capital structure in unsustainable," S&P said. S&P could lower its rating on Welbilt if: -- S&P believes a default scenario is likely in the next 12 month; or -- A covenant breach becomes likely; or -- S&P believes the company will likely initiate a distressed exchange or restructuring that we would deem to be tantamount to a default. S&P could raise its rating on Welbilt if: -- The conditions in its end markets rebound materially and S&P expects the company to maintain positive FOCF and sufficient liquidity; and -- The likelihood of a covenant breach becomes remote; and -- Its leverage returns to levels we deem sustainable. YUMA ENERGY: May 29 Auction of All Assets Set --------------------------------------------- Judge Mark X. Mullin of the U.S. Bankruptcy Court for the Northern District of Texas authorized the bidding procedures of Yuma Energy, Inc. and its debtor affiliates in connection with the auction sale of substantially all assets, wherever located, relating to their business and operations in the State of Texas, Louisiana, Oklahoma and North Dakota. The salient terms of the Bidding Procedures are: a. Bid Deadline: May 22, 2020 at 5:00 p.m. (CT) b. Initial Bid: TBD c. Deposit: 10% of the cash purchase price d. Auction: The Auction, if held, is scheduled to commence at the offices of Seaport Gordian Energy LLC, 81115 Preston Road, Ste. 415, Dallas, TX 75225, at 10:00 a.m. (prevailing Central Time) on May 29, 2020 at 10:00 a.m. (CT), or such later time or other location as designated by the Debtors. e. Bid Increments: TBD f. Sale Hearing: June 8, 2020 at 1:30 p.m. g. The Prepetition Secured Lender will be deemed Qualified Bidders and will have the right to credit bid. h. Bid Protections: (a) payment of a break-up fee in an amount not to exceed 3% of the cash purchase price set forth in the Stalking Horse Bid, and (b) reimbursement of the reasonable and documented costs and expenses of the Stalking Horse Bidder in an amount not to exceed $150,000 i. The sale of the Assets will be on an "as is, where is" basis and without representations or warranties of any kind, nature or description. The form of Sale Notice is approved. The Debtors will serve within two business days the Sale Notice upon the Sale Notice Parties. The objection deadline is May 6, 2020 at 4:00 p.m. (CT). The form of notice of the Assignment Procedures is approved in all respects. The stays provided for in Bankruptcy Rules 6004(h) and 6006(d) are waived and the Bid Procedures Order will be effective immediately upon its entry. A copy of the Bidding Procedures is available at https://tinyurl.com/y8p9bh2l from PacerMonitor.com free of charge. About Yuma Energy Yuma Energy, Inc. -- http://www.yumaenergyinc.com/-- is an independent Houston-based exploration and production company. The Company is focused on the acquisition, development, and exploration for conventional and unconventional oil and natural gas resources, primarily in the U.S. Gulf Coast, the Permian Basin of West Texas and California. The Company has employed a 3-D seismic-based strategy to build a multi-year inventory of development and exploration prospects. Its current operations are focused on onshore properties located in southern Louisiana, southeastern Texas and recently, in the Permian basin of West Texas. In addition, the Company has non-operated positions in the East Texas Eagle Ford and Woodbine, and operated positions in Kern County in California. Yuma Energy Inc. and three of its affiliates filed for bankruptcy protection (Bankr. N. D. Texas, Lead Case No. 20-41455) on April 15, 2020. The petitions were signed by Anthony C. Schnur, chief restructuring officer. As of December 31, 2019, Yuma posted $32,290,329 in total assets and $28,270,794 in total liabilities. The Debtors have tapped Fisher Broyles LLP as their counsel; Seaport Gordian Energy LLC as their investment banker; Ankura Consulting Group LLC as their financial advisor; and Stretto as their administrative advisor. YUMA ENERGY: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------- The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in the Chapter 11 cases of Yuma Energy, Inc. and its affiliates. The committee members are: 1. Christopher J. Ryan Manager of Collections, Legal Department Baker Hughes Company 2001 Rankin Road Houston, Texas 77073 Telephone: 713-879-1063 Cell: 713-416-0149 Christopher.Ryan@bakerhughes.com 2. Kerri Ellis President, CEO Secure Networkers 25511 Budde Road, Ste. 901 The Woodlands, Texas 77380 Telephone: 281-651-2254 kerri.ellis@securenetworkers.com 3. Todd Kirkpatrick Director TK Towing, Inc. 7810 Hwy. 182 East Morgan City, Louisiana 70380 Telephone: 985-300-0020 todd@tktowing.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Yuma Energy Yuma Energy, Inc. -- http://www.yumaenergyinc.com/-- is an independent Houston-based exploration and production company. The Company is focused on the acquisition, development, and exploration for conventional and unconventional oil and natural gas resources, primarily in the U.S. Gulf Coast, the Permian Basin of West Texas and California. The Company has employed a 3-D seismic-based strategy to build a multi-year inventory of development and exploration prospects. Its current operations are focused on onshore properties located in southern Louisiana, southeastern Texas and recently, in the Permian basin of West Texas. In addition, the Company has non-operated positions in the East Texas Eagle Ford and Woodbine, and operated positions in Kern County in California. Yuma Energy Inc. and three of its affiliates filed for bankruptcy protection (Bankr. N.D. Tex. Lead Case No. 20-41455) on April 15, 2020. The petitions were signed by Anthony C. Schnur, chief restructuring officer. As of December 31, 2019, Yuma posted $32,290,329 in total assets and $28,270,794 in total liabilities. The Debtors have tapped Fisher Broyles LLP as their counsel; Seaport Gordian Energy LLC as their investment banker; Ankura Consulting Group LLC as their financial advisor; and Stretto as their administrative advisor. ********* 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. 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Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***