/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200604.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 4, 2020, Vol. 24, No. 155 Headlines 1765 NE 58: Seeks Court Approval to Hire Bankruptcy Attorney ALPINE 4: Lowers Net Loss to $3.13 Million in 2019 ALTA MESA: Obtains Court Approval for Chapter 11 Liquidation Plan AMERICAN AIRLINES: Not Considering Bankruptcy, Says CEO AMERICAN STEEL: BancorpSouth Objects to Second Amended Disclosure AMPLE HILLS: Committee Taps Porzio Bromberg as Legal Counsel APC AUTOMOTIVE: Case Summary & 50 Largest Unsecured Creditors APELLIS PHARMACEUTICALS: All 3 Proposals Passed at Annual Meeting ARDENT CYBER: Case Summary & 11 Unsecured Creditors ART VAN: Robert Levin Wins Approval to Revive Levin Brand AYTU BIOSCIENCE: Retires $15 Million Debt Owed to Deerfield BARFLY VENTURES: Case Summary & 20 Largest Unsecured Creditors BCH ENTERPRISES: Gets Court Approval to Hire Real Estate Agent BILTMORE 24: U.S. Trustee Unable to Appoint Committee BIOPLAN USA: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative BMC ACQUISITION: S&P Upgrades ICR to 'B-' on Improved Liquidity BOEING CO: Cuts Jobs, Undertakes Corporate Restructuring BRIGGS & STRATTON: S&P Lowers ICR to 'CCC-'; Outlook Negative BRUIN E&P: S&P Lowers Senior Unsecured Notes Rating to 'C' BRUNO ONE: Bid to Stay Bankruptcy Proceedings Amid Appeal Junked C21 INVESTMENTS: Supplements Notice on Temporary Filing Relief CAMBER ENERGY: Signs Amended Merger Agreement with Viking Energy CHEFS' WAREHOUSE: S&P Affirms 'B-' ICR; Rating Off Watch Negative CHELAN COUNTY PHD 2: Moody's Confirms GOLT Bonds at Ba1 CITGO PETROLEUM: Fitch Rates Senior Secured 2025 Notes 'BB/RR1' CITGO PETROLEUM: Moody's Rates $750MM Secured Notes Due 2025 'B3' CSC HOLDINGS: Moody's Rates $1.1-Bil. Senior Unsecured Notes 'Ba3' CSI COMPRESSCO: Holders of 57.9% of Unsecured Notes Accept Offer DIAMONDBACK INDUSTRIES: Seeks to Hire CR3 Partners, Appoint CRO DM DUKES: Voluntary Chapter 11 Case Summary DM WORLD: U.S. Trustee Appoints Creditors' Committee DOMINION DIAMOND: Fitch Withdraws 'D' LT IDR on Bankruptcy DYNASTY ACQUISITION: Moody's Cuts CFR to Caa1, Outlook Negative E.E. HOOD: U.S. Trustee Unable to Appoint Committee ENALASYS CORPORATION: Has Until Aug. 31 to File Plan & Disclosure ENDEAVOR ENERGY: Fitch Rates New Sr. Unsecured Notes 'BB+/RR2' ENDEAVOR ENERGY: Moody's Rates New $500MM Unsecured Notes 'B1' FARR BUILDERS: Unsec to be Paid by Property Sale,Insurance Proceeds FATSPI & SON: Unsecureds Owed Less than $10K to Recover 2% in Plan FLOYD'S INSURANCE: Seeks to Hire Hendren Redwine as Legal Counsel FOXWOOD HILLS: Taps American Legal as Claims Agent FOXWOOD HILLS: Taps Nexsen Pruet as Legal Counsel FREEDOM OIL: Seeks to Hire Okin Adams as Legal Counsel FRONTIER COMMUNICATIONS: $37.7M Bonuses for Execs Okayed by Judge GAINESVILLE ROAD: Seeks to Hire Dion R. Hancock as Legal Counsel H-FOOD HOLDINGS: Moody's Rates New $100MM 1st Lien Term Loan 'B2' HUGO BOSS: CEO Expects Very Difficult Second Quarter INMARKETING GROUP: June 23 Plan Confirmation Hearing Set J.B. POINDEXTER: Moody's Alters Outlook on B1 CFR to Negative JONATHAN R. SORELLE: MIHI Taps Earnhart & Associates as Consultant KING FARM: Fitch Cuts $48.9MM Series 2017A-1 Bonds to 'B-' KOREAN WESTERN: Trustee Taps Danning Gill as Legal Counsel LANDAU BKN HOLDINGS: U.S. Trustee Unable to Appoint Committee LEVERAGED LLC: Voluntary Chapter 11 Case Summary MAJESTIC HILLS: Seeks Calaiaro Valencik as Legal Counsel MILLS FORESTRY: U.S. Trustee Unable to Appoint Committee NANO MAGIC: Awaiting SEC Decision on Trading Suspension Order NCR AUTO CORES: Taps Barton Brimm as Special Counsel NEW EMERALD: Seeks to Hire Dykema Gossett as Legal Counsel NORTHERN OIL: To Swap Notes for $3.6 Million Worth of Common Stock ONE AVIATION: Citiking Opposes Committee Bid for Liquidation OPTISCAN BIOMEDICAL: Case Summary & 20 Largest Unsecured Creditors PARTY CITY: Launches Tender Offer for $850-Mil. Senior Notes PARTY CITY: Stockholders' Annual Meeting Adjourned to July 2 PASHA GROUP: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative PG&E CORP: Fire Victim Objects to Reorganization Plan PIMA COUNTY IDA: Moody's Cuts Rating on Education Bonds to B1 QUANTUM CORP: Lenders Further Extend Term Loan Amendment Deadline QUANTUM TRANSPORTATION: Trustee Gets Approval to Hire Accountant QUORUM HEALTH: Kairos Supports Appointment of Equity Committee RAVN AIR GROUP: Wins Approval to Sell Assets SHEET METAL WORKS: RT Montrone to Contribute $10,000 to Fund Plan SM ENERGY: Revises Exchange Offer Terms, Wins Noteholder Support SOUTH BEACH STREET: U.S. Trustee Unable to Appoint Committee STAR PETROLEUM: Disclosure Statement Hearing Continued to July 15 TENET HEALTHCARE: Fitch Rates Secured First Lien Notes 'B+/RR3' TENET HEALTHCARE: Moody's Rates Sec. 1st Lien Notes Due 2028 'B1' TUESDAY MORNING: Files Chapter 11 to Pursue Restructuring UMATRIN HOLDING: Posts $95K Net Income in 2019 UNITED AIRLINES: Needs Only 12% of Flight Attendants in June US GC INVESTMENT: Has Until Dec. 1 to File Plan & Disclosure VANTAGE SPECIALTY: Moody's Cuts CFR to Caa1, Outlook Negative VETERINARY CARE: Unsecureds to Get Full Payment in Sale-Based Plan WEINSTEIN CO: Y Movie et al. Can't Enforce Deal, Dist. Court Says YOUNG MEN'S: Seeks to Hire Hinkle Law Firm as Legal Counsel [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 1765 NE 58: Seeks Court Approval to Hire Bankruptcy Attorney ------------------------------------------------------------ 1765 NE 58 Street Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Susan Lasky, Esq., as its bankruptcy attorney. The services to be provided by the attorney will include legal advice regarding Debtor's powers and duties under the Bankruptcy Code, negotiation with its creditors, and the preparation of a bankruptcy plan. Ms. Lasky will handle Debtor's Chapter 11 case at the reduced rate of $400 per hour for attorney fees and $200 per hour for paralegal services. Prior to the filing of the case, Debtor's principal agreed to pay the attorney the sum of $5,000, plus $1,717 for the filing fee. Ms. Lasky disclosed in court filings that she does not represent any interest adverse to Debtor and its bankruptcy estate. Ms. Lasky holds office at: Susan D. Lasky, Esq. 320 S.E. 18th St Ft. Lauderdale, FL 33316 Phone: 954-400-7474 Fax: 954-206-0628 Email: Sue@SueLasky.com About 1765 NE 58 Street 1765 NE 58 Street Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-15232) on May 12, 2020. At the time of the filing, Debtor had estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. Judge Paul G. Hyman Jr. oversees the case. Susan D. Lasky, Esq., is Debtor's bankruptcy attorney. ALPINE 4: Lowers Net Loss to $3.13 Million in 2019 -------------------------------------------------- Alpine 4 Technologies Ltd. reported a net loss of $3.13 million on $28.15 million of revenue for the year ended Dec. 31, 2019, compared to a net loss of $7.91 million on $14.26 million of revenue for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $35.80 million in total assets, $47.77 million in total liabilities, and a total stockholders' deficit of $11.97 million. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated June 1, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Alpine 4 stated, "We have financed our operations since inception from the sale of common stock, capital contributions from stockholders and from the issuance of notes payable and convertible notes payable. We expect to continue to finance our operations from our current operating cash flow and by the selling shares of our common stock and or debt instruments. "Management expects to have sufficient working capital for continuing operations from either the sale of its products or through the raising of additional capital through private offerings of our securities. Additionally, the Company is monitoring additional businesses to acquire which management hopes will provide additional operating revenues to the Company. There can be no guarantee that the planned acquisitions will close or that they will produce the anticipated revenues on the schedule anticipated by management. "The Company also may elect to seek bank financing or to engage in debt financing through a placement agent. If the Company is unable to raise sufficient capital from operations or through sales of its securities or other means, we may need to delay implementation of our business plans." A full-text copy of the Annual Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/QgmlBh CEO's Letter to Shareholders Dear Shareholders, 2019 was a year of tremendous growth! Building a business is never easy, nor is it for the faint of heart. But the payoff can be large for those who are patient and willing to do what it takes to succeed. Alpine 4 is no different. For the past 6 years, we have been in "build mode" and building a company like Alpine 4 takes lots of energy, vision, and capital. Alpine 4 invested heavily in its DSF acquisition strategy in 2019 and we grew at a rate of 97.4% over 2018. The investment into the right businesses has allowed Alpine 4 to grow beyond a start-up and we now have the substance to really become what we were designed to be. At times, GAAP reporting does not really tell the picture of what has been accomplished and can be too black and white. Further to that point, SOX compliance and other reporting requirements such as Derivative Liabilities, give a snapshot of what could happen, but really don't give fairness to the larger picture. The hard changes we made in 2019 with restructuring our VCD (Variable Convertible Debt) that we took out to mitigate the theft event at our former subsidiary Venture West Energy Services, and transferring it into FPCD (Fix Price Convertible Debt), will play a large roll in obtaining profitability in 2020. The Interest and Discounts we paid in 2019 of $5,237,205 was mostly made up of the VCD debt, and with that now out of the way, Alpine 4 can begin to effectuate normalized debt service. Further, we also took the opportunity to restructure a larger capital lease for our subsidiary Quality Circuit Assembly, Inc that will free $69K per month in debt service. While COVID-19 had no bearing on our 2019 financials, it will play a role in how 2020 and beyond shape up. But, even when faced with a ton of adversity, the strong will persevere and figure a way forward. At Alpine 4, we are figuring out how to move forward. The constraints of labor have forced us to look at more efficient means to produce our products and services, and we answered that call and are starting to do more with less. I hope you see what we see in Alpine 4. We believe firmly that our best days are yet to come and look forward to building on the progress of 2019. Best regards Kent Wilson CEO / President About Alpine Alpine 4 Technologies Ltd. is a publicly traded enterprise with business related endeavors in, software, automotive technologies, electronics manufacturing, and energy services & fabrication technologies. As of April 22, 2019, the Company was a holding company that owned five operating subsidiaries: ALTIA, LLC; Quality Circuit Assembly, Inc.; American Precision Fabricators, Inc.; Morris Sheet Metal, Corp; and JTD Spiral, Inc. ALTA MESA: Obtains Court Approval for Chapter 11 Liquidation Plan ----------------------------------------------------------------- Law360 reports that Alta Mesa Resources Inc. and its affiliates obtained the approval of the bankruptcy court to pursue its Chapter 11 liquidation plans. On May 27, 2020, U.S. Bankruptcy Court Judge Marvin Isgur approved the two Chapter 11 plans of the Debtors during the teleconference hearing in which he mentioned that the proposals obtained "overwhelming" support from involved creditors. "It's been a long, hard-fought case, and the plan is the best of all possible deals under the circumstances," said Steven Levin, who represents the unsecured creditors. A copy of the full-report is available at https://www.law360.com/energy/articles/1277244/oil-driller-alta-mesa-wins-ok-for-ch-11-liquidation-plan. 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. AMERICAN AIRLINES: Not Considering Bankruptcy, Says CEO ------------------------------------------------------- Reuters reports that American Airlines Group Inc. is not considering Chapter 11 bankruptcy despite the the coronavirus pandemic putting a halt to travel worldwide, CEO Doug Parker said at at conference at the end of May 2020. He also shot down speculation that a major U.S. carrier could disappear due to the coronavirus pandemic. "Bankruptcy is failure. We're not going to do that," Mr. Parker said, adding, "I don't think you'll see any airline go by the wayside as a result of this crisis." However, the U.S. airline industry is expected to be 10% to 20% smaller in the summer of 2021, Mr. Parker said, and its recovery would depend on how passenger demand and revenues evolve. Earlier this month, Boeing Co Chief Executive Dave Calhoun told NBC he thought that a major U.S. carrier could go out of business in the fall, when government payroll aid for airlines will expire. Global airlines are suffering an unprecedented downturn as the coronavirus pandemic has brought air travel to a near standstill. American's revenues are still down by about 90 percent due to the outbreak, but demand is improving and its net receipts have been in positive territory for the past 2.5 weeks after a period when airlines were receiving more cancellations than new bookings. "Passengers are feeling more and more comfortable flying," Parker said. American's planes were about 56per cent full over the long U.S. Memorial Day weekend, albeit in drastically reduced capacity, he said. American is flying about 20per cent of its normal schedule. About American Airlines American Airlines Group Incorporated is an American publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed on December 9, 2013, in the merger of AMR Corporation, the parent company of American Airlines, and US Airways Group, the parent company of US Airways. Before the Coronavirus pandemic, American Airlines offered customers 6,800 daily flights to more than 365 destinations in 61 countries from its hubs in Charlotte, Chicago, Dallas-Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. As of Dec. 31, 2018, the company operated a mainline fleet of 956 aircraft. The aviation industry has been severely affected by the economic shutdowns and travel restrictions brought by the Coronavirus pandemic. * * * Fitch downgraded American Airlines by one notch to 'B' on April 10; the ratings are on Rating Watch Negative. This follows Fitch's downgrade of American to 'B+' from 'BB-' on March 20, 2020. Fitch expects that the company will have sufficient liquidity and access to capital to manage through the year. However, significant additional borrowing and the likelihood of a slow recovery make it likely that the company's credit metrics will remain well outside of its prior expectations at least through 2021 or 2022. The company also has material debt payments this year and next, making continued access to capital markets essential. AMERICAN STEEL: BancorpSouth Objects to Second Amended Disclosure ----------------------------------------------------------------- Creditor BancorpSouth Bank, successor by merger to Summit Bank, N.A., objects to the Second Amended Disclosure Statement of Debtor American Steel Processing Company. BancorpSouth notes that the Debtor has proposed, by way of the Amended Disclosure Statement that some of its obligations will be assumed by US Ironworks and the Bank will forbear from collection against Thomas J. Fanell and Ironworks. BancorpSouth notes in its objection points out that: * Through the Amended Disclosure Statement, the Debtor purports to obligate Ironworks to do all these things; however, there is no indication that Ironworks has agreed to any of these things, and Ironworks is an unsecured creditor as set forth in the Debtor's Schedule E/F. * There is no information about corporate structure of Ironworks. The Bank does not agree to forbear from collection of the debts owed to it by Thomas J. Fanell and Ironworks. * The Debtor also suggests that it will surrender collateral to the Bank; however, the principal of the Debtor and the Debtor have admitted on many occasions that equipment has been scrapped that parts and pieces of equipment have been cannibalized to repair other equipment, and that equipment is scattered across several states. * The Amended Disclosure Statement fails to provide information about Ironworks and about the Debtor's equipment that would enable a hypothetical reasonable investor to make an informed decision about the Debtor's Amended Plan of Reorganization For Liquidation. * The Bank is not able to make an informed decision about the Plan because no information, much less adequate information, has been provided with respect to Ironworks or with respect to why the Debtor’s treatment of Ironworks is superior to its treatment of other unsecured creditors. A full-text copy of the BancorpSouth's objection dated May 14, 2020, is available at https://tinyurl.com/y8zo9wcp from PacerMonitor at no charge. Attorneys for BancorpSouthBank: Sarah S. Walton Philip A. Bates PHILIP A. BATES, P.A. P.O. Box 1390 Pensacola, FL 32591-1390 Telephone: (850) 470-0091 Facsimile: (850) 470-0441 E-mail: pbates@philipbates.net swalton@philipbates.net About American Steel Processing Company American Steel Processing Company is a steel fabricator in Panama City, Florida, founded in July 1998. American Steel Processing filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 18-50060) on Feb. 26, 2018. In the petition signed by Thomas J. Fanell, president and CEO, the Debtor estimated assets and liabilities at $1 million to $10 million. The case is assigned to Judge Karen K. Specie. The Charles Wynn Law Offices, P.A., is the Debtor's counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. AMPLE HILLS: Committee Taps Porzio Bromberg as Legal Counsel ------------------------------------------------------------ The official committee of unsecured creditors of Ample Hills Holdings, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Porzio, Bromberg & Newman, P.C. as its legal counsel. Porzio Bromberg's services will include: (a) advising the committee of its power and duties under Section 1103 of the Bankruptcy Code; (b) assisting the committee in its investigation of the acts, conduct, assets, liabilities and financial condition of Debtors; (c) assisting the committee in connection with Debtors' proposed sale of their assets; (d) assisting the committee in connection with any proposed Chapter 11 plan; (e) analyzing claims of creditors and Debtors' capital structure, and negotiating with holders of claims; (f) representing the committee in matters generally arising in Debtors' bankruptcy cases; (g) reviewing and preparing court papers; (h) representing the committee at hearings held before the court and communicating with the committee regarding the issues raised as well as the decisions of the court. The firm's attorneys and paralegals will be paid at hourly rates as follows: Robert M. Schechter, Principal $685 Rachel A. Parisi, Counsel $550 David E. Sklar, Associate $475 Christopher P. Mazza, Associate $420 Kwame O. K Akuffo, Associate $375 Maria P. Dermatis, Paralegal $260 Neidy V. Fuentes, Paralegal $235 Porzio Bromberg is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Robert M. Schechter, Esq. Rachel A. Parisi, Esq. Porzio, Bromberg & Newman, P.C. 100 Southgate Parkway P.O. Box 1997 Morristown, NJ 07962 Phone: (973) 538-4006 Fax: (973) 538-5146 Email: rmschechter@pbnlaw.com raparisi@pbnlaw.com About Ample Hills Holdings Ample Hills Holdings, Inc. -- https://www.amplehills.com/ -- is a Brooklyn-based producer, distributor, and retailer of ice cream and related merchandise. It currently operates 10 retail stores and kiosks, which are primarily located in the metropolitan New York area, and a factory in the Red Hook neighborhood of Brooklyn. On March 15, 2020, Ample Hills Holdings and its affiliates sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-41559). In the petition signed by Phillip Brian David Smith, CEO, Ample Hills Holdings was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Nancy Hershey Lord is the case judge. Debtors tapped Herrick Feinstein, LLP as legal counsel, and SSG Capital Advisors, LLC as investment banker. Bankruptcy Management Solutions, Inc., doing business as Stretto, is the claims agent. The U.S. Trustee for Region 2 appointed a committee of unsecured creditors on April 16, 2020. The committee is represented by Porzio, Bromberg & Newman, P.C. APC AUTOMOTIVE: Case Summary & 50 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: APC Automotive Technologies Intermediate Holdings, LLC 300 Dixie Trail Goldsboro, NC 27530 Thirteen affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- APC Automotive Technologies Intermediate Holdings, LLC 20-11466 300 Dixie Trail Goldsboro, NC 27530 AirTek, LLC 20-11467 AP Emissions Technologies, LLC 20-11468 AP Exhaust Product DISC, Inc. 20-11469 APC Automotive Technologies, LLC 20-11470 Aristo, LLC 20-11471 CWD Acquisition, LLC 20-11472 CWD Holding Corp. 20-11473 CWD Intermediate Holding Corp. 20-11474 CWD, LLC 20-11475 Eastern Manufacturing, LLC 20-11476 Qualis Automotive, L.L.C. 20-11477 Qualis Enterprises, Inc. 20-11478 Business Description: The Debtors are aftermarket suppliers of brake, chassis, exhaust, and emissions parts for passenger vehicles, trucks, and commercial vehicles. The Debtors were formed through the merger of two companies in 2017, AP Exhaust and Centric. The Debtors are headquartered in Littleton, Colorado and operate across North America with distribution centers in North Carolina, Indiana, and California, manufacturing and research and development centers in Pennsylvania, Indiana, North Carolina, and California, and a sales office in Tennessee. Visit https://www.apcautotech.com for more information. Chapter 11 Petition Date: June 3, 2020 Court: United States Bankruptcy Court District of Delaware Judge: Hon. Christopher S. Sontchi Debtors' General Bankruptcy Counsel: Jonathan S. Henes, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Ave New York, New York 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 Email: jonathan.henes@kirkland.com Debtors' Local Bankruptcy Counsel: Domenic E. Pacitti, Esq. Michael W. Yurkewicz, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 North Market Street, Suite 1000 Wilmington, Delaware 19801 Tel: (302) 426-1189 Fax: (302) 426-9193 Email: dpacitti@klehr.com myurkewicz@klehr.com - and - Morton R. Branzburg, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 1835 Market Street, 14th Floor Philadelphia, PA 19103 Tel: (215) 569-2700 Fax: (215) 568-6603 Email: mbranzburg@klehr.com Debtors' Financial Advisor: JEFFERIES GROUP LLC Debtors' Restructuring Advisor: WEINSWEIGADVISORS LLC Debtors' Tax Advisor: ERNST & YOUNG LLP Debtors' Notice, Claims, & Balloting Agent and Administrative Advisor: BANKRUPTCY MANAGEMENT SOLUTIONS, INC. STRETTO https://cases.stretto.com/APC Estimated Assets (on a consolidated basis): $100 million to $500 million Estimated Liabilities (on a consolidated basis): $500 million to $1 billion The petitions were signed by Patricia Warfield, authorized signatory. A copy of APC Automotive Technologies' petition is available for free at PacerMonitor.com at: https://is.gd/LNVwaU Consolidated List of Debtors' 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Longkou Qizheng Auto Parts Co. Trade Vendor $4,199,563 East Of Longkou Development Zo Longkou City, 265703 China Sanny Kim Tel: 0086-35388607 2. Posam (Posco America) Trade Vendor $2,723,043 Po Box 1625 Hwy 401 Bypass Laurinburg, NC 28353 Cris Alarcon Tel: 336-883-7146: Ext 3356 Fax: 770-814-4802 Email: ryan.s@poscoamerica.com 3. Qingdao Gihon Auto Parts Trade Vendor $2,137,703 98 Chongqing S Rd Si Fang Qu Qingdao Shandong, China Zhou Laichun Tel: 86-53285657735 Fax: 0532-83191021; 0532-83191510 Email: info@gihonbrakes.com 4. Laizhou Sanli Auto Trade Vendor $1,637,752 Zhuqiao Town Laizhou Laizhou Shandong, 261419 China Yang Liya Tel: 86-535-3455-896; 86-5353455870 Fax: 0535-3455886 Email: info@sanliauto.com; liyan@sanliauto.com 5. Zhejiang Lizhong Ind. Co., Ltd Trade Vendor $1,548,258 Bb & T Factors Corporation PO Box 890011 Charlotte, NC 05445 Bill Cline Tel: 647-282-0617 Email: nancy.miao@zjlizhong.com 6. American Express Trade Vendor $1,287,945 1560 East Adam Drive Depere, WI 54115 Attn: Director or Officer Tel: 920-339-9345 Fax: 212-619-9743 7. Borui Brake Systems N.A. Trade Vendor $1,120,885 26741 Portola Pkwy Suite 1E401 Foothill Ranch, CA 92610 Bill Jiang Tel: 714-357-9412 Fax: 86-546-8955198 Email: info@boruiauto.com; b.griffin@discbrakepts.com 8. Shandong Xinchang Environ Trade Vendor $935,755 Xizhangjiagou Village Donglai District Longkou City Shandong, China Jian Feng Tel: 86-15192369002 Email: tina9112@126.com 9. Eastern-Dorman, LLC Trade Vendor $895,739 7870 12 Ave South Bloomington, MN 55425 Attn: Director or Officer 10. Longkou Qizheng Auto Part Trade Vendor $849,978 Longkou Economic Development Zone Longkou, 265703 China Attn Director or Officer Tel: 0086-53588607 11. Xianghe Xumingyuan Auto Trade Vendor $844,205 South Xiushui Street Shuyang Ind Park Xianghe Langfang, 65400 China Attn: Director or Officer Tel: 86-316-8580-802 Fax: 86-316-8589376 Email: harvey.wang@zichen-casting.com; adela.qian@zichen-casting.com 12. Automotive Parts Service Trade Vendor $813,107 1637 Kingsview Drive Lebanon, OH 45036 Kevin Sullivan Tel: 866-529-0412 13. Yusin Brake Corp. Trade Vendor $765,804 5th Floor No. 381 Wufeng North Road Taiwan Branch Chiayi City, 600 Taiwan Yao-Jen Hsu Tel: 561-697-4502 Fax: 866-5-2789-699 Email: GDM@bourneusa.com 14. Centric Parts Trade Vendor $706,993 21046 S. Figueroa St. Unit B Carson, CA 23830 Nathan Keller Tel: 310-218-1082 Fax: 626-961-5877 Email: tech@centricparts.com 15. Logical Clean Air Trade Vendor $668,537 Solutions 2945 Townsgate Rd Westlake Village, CA 91359 Hector Verdugo Ramos Tel: 888-310-4192 Email: hamid@logicalcleanairsolutions.com 16. Kwongkee Auto Exh Sys Ltd Trade Vendor $507,189 Bldg 2 5500 Shenzhuan Road Dongjin Town Songjian District, SH 201619 China Attn: Director or Officer Tel: 86-21-31273333 Fax: 86-763-868868 Email: info@auto-muffler.com; sam@automuffler.com 17. US CBP Trade Vendor $487,839 Contact A Specific Cbp Office 1300 Pennsylvania Ave. NW Washington, DC 20229 Michael Wick Tel: 877-227-5511 18. Yantai Hosino Co., Ltd. Trade Vendor $485,142 No.1 Muhuang Rd Economic Development Zone Longkou City Shandong, China Jing Jiang Fax: 86-0535-8889639 Email: sales@hosinoparts.com; cindy.hosinoparts.com 19. Longkou Jinzheng Machiner Trade Vendor $471,876 Haoyuan Industrial Park Xufu Town Longkou, 265713 China Attn: Director or Officer Tel: 86-535-3456-888 Fax: 86-535-3451999 Email: webmaster@brakemotor.cc; sales01@brakerotor.cc 20. Kwong Kee Trade Vendor $470,850 39625 Lewis Drive Suite 500 Novi, MI 48374 Attn: Duncan Huang Tel: 248-489-7190 Email: angel@auto-muffler.com 21. Ngk Automotive Ceramics Trade Vendor $464,828 39625 Lewis Drive Suite 500 Novi, MI 48374 Duncan Huang Tel: 248-489-7190 Fax: 248-489-8055 Email: info@ngk-detroit.com; billspiller@ngk-detroit.com 22. Longkou Rongdi Mechanic Trade Vendor $449,934 Pioneer Park Langao Town Longkou, China Sha Shengxing P: 0535-31228616 Email: qiyidan66@163.com; kokoliu2015@yahoo.com 23. MK Kashiyama Corp. Trade Vendor $432,114 1119 Otai Saku City Nagano, 3850009 Japan Tsuyoshi Kashiyama Tel: 81-(0)267-67-1161; 81-(0)267-66-1755 Fax: 81-(0)267-66-1751 Email: mizusawa@mkg.co.jp 24. Yuhuan Jianghong Machiner Trade Vendor $422,469 Yucheng Sub District Yuhuan County Zhejiang, 317600 China Zhang Yuliang Tel: 86-57689916662 Fax: 86-576-89916298 Email: sales@allbrakecalipers.com; helen.shen@allbrakecalipers.com 25. Neo Chemicals And Oxides Trade Vendor $407,960 PO Box 912632 Denver, CO 12421 Rahim Suleman Tel: 416-367-8588 Email: f.ng@neomaterials.com 26. Fmp Asia-Thailand Limited Trade Vendor $350,850 Pluak Daeng, Pluak Daeng District Rayong, 21140 China Attn: Director or Officer Tel: 66-38-954-515 Email: BMNA@msn.com 27. Stag Industrial Holdings, LLC Trade Vendor $345,794 Langh1 C/O Stag Langhorne LLC 1 One Federal Street - 23rd Floor Boston, MA 02108 Federico Falcone Tel: 617-226-4963 Email: inverstorrelations@stagindustrial.com; dshriber@stagindustrial.com 28. Bluecross Blueshield Trade Vendor $268,350 PO Box 580017 Charlotte, NC 05445 Customer Service Tel: 888-630-2583 29. Lynnco Supply Chain Trade Vendor $263,792 Iron & Steel Product Div 200 East Randolph Drive Suite 5200 Chicago, IL 60601 Louis Huang Tel: 917-992-6968:EXT ROSS Email: information@lynnco-scs.com; hildreth@aktube.com 30. Shandong Gold Phoenix Co. Trade Vendor $259,843 999 Fule Road Leling, 253600 China Attn: Director or Officer Tel: 86-531-8117-3975 Email: xuyuan@chinabrake.com 31. Friction One Brake Techno Trade Vendor $259,740 No. 10 Mianzhou Blvd Industrial Park Xiantao City, Hubei China Attn: Director or Officer Tel: 0728-3251640 Email: gary.li@friction1.com; jenny.xie@friction1.com; elina.zhou@friction1.com 32. JM Johnson Matthey Trade Vendor $253,450 456 Devon Park Drive Wayne, PA 04284 Emily Tel: 610-971 3063 Email: bankstl@jmusa.com 33. Hangzhou Zhengqiang Corp., Ltd Trade Vendor $249,500 Zhangpanqiao Village (Litoujin) Shushan Street Xiaoshan, Hangzhou, ZJ China Jenssie Yin Tel: 086 571-57573069 Fax: 0086-571-82367420 Email: xuzq@zhengqiang.com; fuyun@zhengqian.com; fuyun@xs.hz.zj.cn; luciayu@zhengqiang.com 34. International Brake Indus Trade Vendor $246,832 1840 Mccullough Lima, Ohio 45801 Paul Johnson Tel: 800-537-2838 Fax: 888-424-1061 Email: larry@aup1.com 35. D-Terra Solutions, LLC Trade Vendor $234,988 Lawn Service PO Box 846 Dudley, NC 28333 Mike Minichello Tel: 919-735-0145 36. Laizhou Sanli Auto Trade Vendor $232,794 Replacement Parts Co., Ltd Zhuqiao Town Laizhou City, SD China Sally Arms Tel: 86 535 2391155 Fax: 0535-3455886 Email: info@sanliauto.com; sonnyqi@sanliauto.com 37. QI Automotive Co., Ltd Trade Vendor $228,081 No 1 Luanhe Road Jiaozhou Shandong, 266300 China Emily S Tel: 86-53286628131 Email: bhan@qi-auto.com 38. High Hope Zhongtian Corpo Trade Vendor $217,370 15 Hubu Street Nanjing, China Attn: Director or Officer Tel: 00-86-025-86895000 39. Taiwan Brake Technology C Trade Vendor $206,293 No. 123-6 Zhonglun Anding Dist Tainan, Taiwan Attn: Director or Officer Fax: 06-5933528 Email: tbt@taiwanbrake.com; tbt261@taiwanbrake.com 40. Emsa Mufflers Trade Vendor $197,538 1111 South George Steet Goldsboro, NC 27530 Zoila Tel: 919-735-3172 Fax: 519-448-1212 Email: jgarza@emsamufflers.ca; scontreras@emsamofles.com 41. IPFS Corporation Trade Vendor $197,186 10 Winslow Rd. Weston, CT 06883-1934 Attn: Director or Officer 42. Parts Authority, Inc. Trade Vendor $193,700 3 Dakota Drive Suite 110 New Hyde Park, NY 11042 Randy Buller Tel: 883-380-8511 Email: contactus@partsauthority.com 43. Heraeus Metals New York Trade Vendor $183,750 540 Madison Avenue Business Unit Trading New York, NY 10001 Attn Director or Officer Tel: 212-752-2180 Fax: 212-752-2180 Email: tradingny@heraeus.com 44. Dorman Products Trade Vendor $182,731 P.O. Box 8500 (S-4565) Philadelphia, PA 13673 Jorge Rustrian Tel: 215-712-5182 Email: generalinquiries@dormanproduct s.com; CRDorman@dormanproducts.com 45. Yantai March International Trade Vendor $172,715 No 12 Baoyuan Road Yantai City, Shandong China Attn: Director or Officer Tel: 0086-5356910801 Fax: 0086-5356910800 Email: gh32@yietcc.com; yietcc@public.ytptt.sd.cn; jumperdk@163.com 46. AK Tube LLC Trade Vendor $170,832 15317 Collections Center Dr. Chicago, IL 60290 Ed Urbaniak Tel: 419-661-4150 Fax: 419-661-4380 Email: bryant@aktube.com; hildreth@aktube.com 47. Heidrick & Struggles, Inc Trade Vendor $159,402 Softball Leagues Hobart, IN Aaron Slusher Tel: 202-331-4900 48. Hypercat ACP Trade Vendor $136,945 1122 West Bethel Rd., 400 Coppell, TX 75019 Attn: Keith Thompson Tel: 972-393-6888 Email: kthompson@metalsubstrate.com 49. Integrated Maquila Soluti Trade Vendor $134,906 2000 Wyoming Ave Ste A El Paso, TX 79903 Gabriela Moreno Tel: 915-534-4252 50. Wenzhou Libang Hexin Auto Trade Vendor $101,403 Industrial Zone Tangxia Town Ruian Wenzhour Zheijang, China Attn Director or Officer Tel: 86-135-0657-8682 Email: shally@chinalbn.com APELLIS PHARMACEUTICALS: All 3 Proposals Passed at Annual Meeting ----------------------------------------------------------------- Apellis Pharmaceuticals, Inc., held its Annual Meeting of Stockholders on June 1, 2020, at which the stockholders: (a) elected Gerald Chan and Cedric Francois as class III directors, each for a three-year term ending at the annual meeting of stockholders to be held in 2023; (b) ratified the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2020; and (c) approved the advisory vote on the compensation of the Company's named executive officers. About Apellis Headquartered in Crestwood, Kentucky, Apellis Pharmaceuticals, Inc., is a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds for the treatment of a broad range of life-threatening or debilitating autoimmune diseases based upon complement immunotherapy through the inhibition of the complement system at the level of C3. By pioneering targeted C3 therapies, the Company aims to develop best-in-class and first-in-class therapies for a broad range of debilitating diseases that are driven by uncontrolled or excessive activation of the complement cascade, including those within hematology, ophthalmology, and nephrology. Apellis incurred net losses of $304.7 million in 2019, $127.5 million in 2018, and $51 million in 2017. As of March 31, 2020, the Company had $688.9 million in total assets, $429.9 million in total liabilities, and $259.0 million in total stockholders' equity. ARDENT CYBER: Case Summary & 11 Unsecured Creditors --------------------------------------------------- Debtor: Ardent Cyber Solutions, LLC f/k/a Aventador Utility Solutions LLC 9393 North 90th Street Suite 102 #65 Scottsdale, AZ 85258 Business Description: Ardent Cyber Solutions, LLC is a cyber security firm based in Scottsdale, Arizona. Chapter 11 Petition Date: June 3, 2020 Court: United States Bankruptcy Court District of Arizona Case No.: 20-06722 Judge: Hon. Paul Sala Debtor's Counsel: Allan D. NewDelman, Esq. ALLAN D. NEWDELMAN, P.C. 80 East Columbus Avenue Phoenix, AZ 85012 Tel: 602-264-4550 E-mail: anewdelman@adnlaw.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Paul O. Paradis, managing member. A copy of the petition containing, among other items, a list of the Debtor's 11 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/0CXmmX ART VAN: Robert Levin Wins Approval to Revive Levin Brand --------------------------------------------------------- Deb Erdley, writing for Trib Live, reports that the bankruptcy court gave green light to 63-year-old Mt. Pleasant native Robert Levin to revive the century-old family furniture chain Levin brand. On May 27, 2020, Federal Judge Christoper Sontchi signed bid of Levin to buy back the Levin brand, which he sold in 2017, together with unencumbered contents of the 32 Levin and Wolf furniture stores in Pennsylvania and Ohio. In 2017, Levin sold the chain, the region's largest furniture retailer, to Art Van Furniture, a Michigan-based furniture chain that was previously acquired by Thomas H. Lee Partners, a Boston-based private equity firm. Although the combined chains posted revenues of $850 million in 2018, it declined by early 2020 and filed for bankruptcy in March 2020, opting first for protection and reorganization under Chapter 11 of the bankruptcy code and later transitioning to Chapter 7 liquidation. May 27, 2020's order marked the culmination of Robert Levin's second bid to buy back his family's former chain. A prior deal, inked days before Art Van filed for bankruptcy, collapsed in mid-March when Art Van moved into liquidation. The $25.7 million bid Judge Sontchi approved includes a $10 million fund that will be set aside to compensate more than 1,000 customers in Ohio and Pennsylvania who paid for or made deposits on furniture that Art Van’s owners never delivered. Mr. Levin, who has partnered in this deal with John and Matt Schultz, owners of several Ashley Furniture franchises, said they hope to resume business at select Levin furniture and Levin Mattress stores this summer. About Art Van Furniture Art Van is a brick-and-mortar furniture and mattress retailer headquartered in Warren, Michigan. The Company operates 169 locations, including 92 furniture and mattress showrooms and 77 freestanding mattress and specialty locations. The Company does business under brand names, including Art Van Furniture, Pure Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress, and Wolf Furniture. The Company was founded in 1959 and was owned by its founder, Art Van Elslander, until it was sold to funds affiliated with Thomas H. Lee Partners, L.P. in March 2017. As part of this transaction, THL acquired the operating assets of the Company and certain real estate investment trusts, who closed the transaction alongside THL, acquired the owned real estate portfolio of the Company, and entered into long-term leases with Art Van. The proceeds from the sale-leaseback transaction were used to fund the purchase price paid to the selling shareholders. Art Van Furniture, LLC, and 12 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8, 2020. Art Van was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as counsel. Kurtzman Carson Consultants LLC is the claims agent. AYTU BIOSCIENCE: Retires $15 Million Debt Owed to Deerfield ----------------------------------------------------------- Aytu BioScience, Inc., reported that the Company has retired $15 million in a payment obligation owed to Deerfield CSF, LLC and affiliated parties. This early payment has satisfied the previously described $15 million Balloon Payment Obligation that was assumed through the Company's purchase of the former Cerecor prescription product portfolio announced on Nov. 4, 2019. Josh Disbrow, chief executive officer of Aytu BioScience, commented, "We are pleased to have retired the $15 million obligation that represents the bulk of the overall fixed amounts payable to Deerfield following our assumption of this responsibility that came as part of the acquisition of the Cerecor commercial portfolio last fall. By making this early payment, the Company has removed a large debt overhang, leaving only the $86,840 fixed monthly payments owed to Deerfield through the end of January 2021. Following the removal of this obligation, and with the large cash infusion we've had over the preceding two months, the Company's cash balance remains strong and the Company's debt load is reduced to approximately $1 million." About Aytu BioScience Englewood, Colorado-based Aytu BioScience, Inc. (OTCMKTS:AYTU) -- http://www.aytubio.com/-- is a commercial-stage specialty pharmaceutical company focused on commercializing novel products that address significant patient needs. The company currently markets a portfolio of prescription products addressing large primary care and pediatric markets. The primary care portfolio includes (i) Natesto, an FDA-approved nasal formulation of testosterone for men with hypogonadism, (ii) ZolpiMist, an FDA-approved oral spray prescription sleep aid, and (iii) Tuzistra XR, an FDA-approved 12-hour codeine-based antitussive syrup. Aytu Bioscience reported a net loss of $27.13 million for the year ended June 30, 2019, compared to a net loss of $10.18 million for the year ended June 30, 2018. As of March 31, 2020, the Company had $158.95 million in total assets, $73.25 million in total liabilities, and $85.70 million in total stockholders' equity. Plante & Moran, PLLC, in Denver, CO, the Company's auditor since 2015, issued a "going concern" qualification in its report dated Sept. 26, 2019, on the Company's consolidated financial statements for the year ended June 30, 2019, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. BARFLY VENTURES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Barfly Ventures, LLC 35 Oakes Street SW #400 Grand Rapids, MI 49530 Business Description: BarFly Ventures LLC is the parent company of HopCat, Stella's Lounge, and Grand Rapids Brewing Co. Founded in 2008, BarFly operates a chain of restaurants. Chapter 11 Petition Date: June 3, 2020 Court: United States Bankruptcy Court Western District of Michigan Twenty-four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Barfly Ventures, LLC 20-01947 Barfly Management, LLC 20-01948 9 Volt, LLC 20-01949 50 Amp Fuse, LLC 20-01950 EL Brewpub, LLC 20-01951 GRBC Holdings, LLC 20-01952 Luck of the Irish, LLC 20-01953 HopCat-Ann Arbor, LLC 20-01954 HopCat-Chicago, LLC 20-01955 HopCat-Concessions, LLC 20-01956 HopCat-Detroit, LLC 20-01957 HopCat-GR Beltline, LLC 20-01958 HopCat-Holland, LLC 20-01959 HopCat-Indianapolis, LLC 20-01960 HopCat-Kalamazoo, LLC 20-01961 HopCat-Kansas City, LLC 20-01962 HopCat-Lexington, LLC 20-01963 HopCat-Lincoln, LLC 20-01964 HopCat-Louisville, LLC 20-01965 HopCat-Madison, LLC 20-01966 HopCat-Minneapolis, LLC 20-01969 HopCat-Port St. Lucie, LLC 20-01970 HopCat-Royal Oak, LLC 20-01972 HopCat-St. Louis, LLC 20-01973 Judge: Hon. James W. Boyd Debtors' Counsel: Rozanne M. Giunta, Esq. WARNER NORCROSS & JUDD, LLP 715 E. Main Street Suite 110 Midland, MI 48640-5382 Tel: 989-698-3758 Email: rgiunta@wnj.com - and - PACHULSKI STANG ZIEHL & JONES LLP Debtors' Financial Advisor: ROCK CREEK ADVISORS LLC Debtors' Investment Banker: MASTODON VENTURES, INC. Barfly Ventures' Estimated Assets: $1 million to $10 million Barfly Ventures' Estimated Liabilities: $10 million to $50 million The petition was signed by Mark A. Sellers, III, founder and chairman of the Board. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/ldUaLp https://is.gd/h8fZjq https://is.gd/lBkovH https://is.gd/xUxfu8 https://is.gd/chuWdC https://is.gd/YaYJGl https://is.gd/RYabHo https://is.gd/gBjFZn https://is.gd/zzU93d https://is.gd/7tAO2M https://is.gd/PYdNTO https://is.gd/xBS3fe https://is.gd/nKFCWp https://is.gd/x3dQyL https://is.gd/02bDvn https://is.gd/G45g5a https://is.gd/lSRC8x https://is.gd/MhiSJA https://is.gd/qyzc2c https://is.gd/NYKmJi https://is.gd/BL3335 https://is.gd/W14ISq https://is.gd/QSBQaj List of Barfly Ventures' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. First Savings Bank PPP Loan during $6,602,400 Small Business Lending COVID-19 702 N. Shore Drive Suite 300 Jeffersonville, IN 47130 2. Gordon Food Service $1,728,525 Dept CH 10490 Palatine, IL 60055 3. Innovo Development Group - RO $79,517 1321 S Westnedge Ave Kalamazoo, MI 49008 4. Consumers Energy $35,400 PO Box 740309 Cincinnati, OH 45274 5. Corrigan Logistics $28,900 23923 Research Drive Farmington, MI 48335 6. HNI Risk Advisors $27,489 PO Box 510187 New Berlin, WI 53151 7. Plante & Moran PLLC $19,660 166 Collections Center Drive Chicago, IL 60693 8. Perkins Coie LLP $17,283 PO Box 24643 Seattle, WA 98124 9. Rock Creek Advisors LLC $15,000 555 Fifth Avenue, 14th Floor New York, NY 10017 10. Envoy Facilities $15,000 Maintenance 8014 Cumming Hwy, Ste 403-306 Canton, GA 30115 11. Happy PR $14,000 1059 Wealthy St SE #202 Grand Rapids, MI 49506 12. Paytronix Systems Inc. $13,327 80 Bridge St Newton, MA 02458 13. iHeartMedia $12,037 3964 Collection Center Drive Chicago, IL 60693-0039 14. NuArx Inc. $10,947 P.O. Box 771994 Detroit, MI 48277-1994 15. QSR Automations Inc. $8,480 2301 Stanley Gault Parkway Louisville, KY 40223 16. HotSchedules.com, Inc. $8,046 P.O. Box 848472 Dallas, TX 75284-847 17. Hyatt Place Royal Oak $7,819 422 N Main St Royal Oak, MI 48067 18. Schiff Hardin LLP $7,125 233 South Wacker Drive Suite 7100 Chicago, IL 60606 19. HR Collaborative LLC $6,366 678 Front Ave NWS te 265 Grand Rapids, MI 49504 20. Wisely Inc. $5,880 205 E. Washington Street Suite 2A Ann Arbor, MI 48104 BCH ENTERPRISES: Gets Court Approval to Hire Real Estate Agent -------------------------------------------------------------- BCH Enterprises LLC received approval from the U.S. Bankruptcy Court for the Central District of California to employ real estate firm Compass California, Inc. The firm will assist in the sale of Debtor's real properties located at: 1. 1820 Tamarack St., Westlake Village, Calif.; 2. 3901 Freshwind Circle, Westlake Village, Calif.; and 3. 3754 Whitespeak Drive, Sherman Oaks, Calif. Compass California will receive a 3 percent commission on the sales price of each property. Devon Rice, the firm's real estate agent who will be providing the services, disclosed in court filings that he and his firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Devon Rice Compass California, Inc. 2945 Townsgate Rd, Ste 300 Westlake Village, CA 91361 Phone: 805-617-0645 About BCH Enterprises BCH Enterprises LLC, a company based in Westlake Village, Calif., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-10157) on Jan. 31, 2020. In the petition signed by Brett Harrison, LLC, member and manager, Debtor was estimated to have $10 million to $50 million in both assets and liabilities. Randall V. Sutter, Esq., at Rounds & Sutter, LLP, is Debtor's bankruptcy counsel. BILTMORE 24: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The Office of the U.S. Trustee on June 2, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Biltmore 24 Investors SPE, LLC. About Biltmore 24 Investors Biltmore 24 Investors SPE LLC and its affiliates, Gray Blue Sky Scottsdale Residential Phase I LLC, Gray Guarantors I LLC, Gray Guarantors II LLC, and Gray Guarantors III LLC, listed their businesses as single asset real estate (as defined in 11 U.S.C. Section 101(51B) and were formed for the purpose of real estate acquisition and ownership. On April 21, 2020, Biltmore 24 and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Lead Case No. 20-04130). The petitions were signed by Bruce Gray, manager. At the time of the filing, the Debtors had estimated assets of between $10 million and $100 million and liabilities of between $50 million and $500 million. Judge Brenda K. Martin oversee the cases. The Debtors tapped Michael Carmel, Esq., at Michael W. Carmel, Ltd. as their legal counsel. BIOPLAN USA: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service has downgraded Bioplan USA, Inc.'s Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD, first-lien senior secured bank credit facilities ratings to Caa1 from B2 and second-lien senior secured term loan to Caa3 from Caa2. The outlook was revised to negative from stable. Following is a summary of its rating actions: Ratings Downgraded: Issuer: Bioplan USA, Inc. (Co-Borrower: Tripolis US LLC) Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD $246.9 Million outstanding (originally $375 Million) First-Lien Senior Secured Term Loan due 2021, Downgraded to Caa1 (LGD3) from B2 (LGD3) $102.5 Million outstanding (originally $145 Million) Second-Lien Senior Secured Term Loan due 2022, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: Bioplan USA, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE The two-notch downgrade action reflects the significant impact that the novel coronavirus pandemic will have on Bioplan's operating and financial performance in 2020 and 2021 and the refinancing risk associated with the first-lien term loan which matures in September 2021. The closure of retail establishments and beauty salons during the recent lockdowns across North America and Europe, where the company distributes much of its sampling products, will lead to a substantial, albeit temporary, deterioration in Bioplan's profitability and a spike in financial leverage to around 11x (Moody's adjusted) from 8.8x at December 31, 2019 as well as negative free cash flow generation. While many regions in North America and Europe are now gradually reopening their economies, Moody's expects in-store retail and salon customer traffic to remain well below historical levels due to rising joblessness, reduced occupancy guidelines, permanent closure of some establishments and patrons opting for online shopping, home delivery and DIY at-home beauty and skin-care to avoid public gatherings and the potential for continuing circulation of the virus in the population. Moody's projects Bioplan's profitability will remain depressed arising from reduced marketing spend and product sampling volumes from clients who, in turn, are experiencing decreased demand for beauty and fragrance products from consumers who are spending more time indoors even as stay-at-home restrictions are slowly being relaxed. Quarantine and high unemployment levels have caused consumers to reduce normal makeup, hair-care, beauty and skin-care regimens. As the virus threat is eventually neutralized and consumer spending gradually rebounds in 2021, Moody's projects leverage will improve to the 9x-9.5x area by the end of next year. However, Moody's does not expect leverage to return to pre-COVID-19 levels over the rating horizon given the expectation that some medium-to-large sized apparel/specialty retailers may close permanently or file for bankruptcy protection. Moody's expects the pandemic and current economic recession to accelerate a downward trend in North American demand for makeup and fragrance products, which has been evident since 2017. Consistent with this industry trend, Bioplan's EBITDA has declined each year since its 2016 post-restructuring peak. The negative outlook reflects governance risks, specifically the likelihood that leverage will remain elevated above 9x (Moody's adjusted) over the next two years given Bioplan's current operational challenges and dependence on consumer discretionary spending, which Moody's expects will remain depressed for several quarters due to the economic recession. The negative outlook also embeds the numerous uncertainties related to the social considerations and economic impact from COVID-19 on the company's cash flows, leverage and liquidity. The magnitude of the impact will depend on the depth and duration of the pandemic, the impact that government restrictions to curb the virus will have on consumer behavior, the duration of lockdowns in geographies that Bioplan operates as well as the timeline for fully reopening those economies. Bioplan's Caa2 CFR is constrained by the company's high financial leverage compared to its small revenue base. Moody's forecasts Bioplan will continue to experience volatile and cyclical revenue due to reduced volumes arising from customer consolidation and the economic downturn. Cyclical increases in raw material prices, changes in customer product sales and marketing plans, shifts in product mix as well as aggressive competitor pricing behavior may also contribute to volatility and operating margin compression. Moody's projects the company will generate negative free cash flow and weak EBITDA in 2020 due to reduced product sampling demand, particularly from North American fragrance clients. The rating also considers the secular industry pressures arising from the ongoing shift to internet, social media and e-commerce platforms for the consumption of beauty products. In addition, Bioplan faces the possibility of refinancing risk associated with the first-lien term loan maturing September 2021; accordingly, Moody's will monitor closely the company's refinancing progress over the next several quarters. The Caa2 rating is supported by Bioplan's position as the leading global provider of sampling and packaging services for the fragrance, beauty and personal care industries around the globe. The company enjoys a reputation for new product innovation and patented and proprietary technologies through its effective R&D investment, allowing the company to offer an extensive, one-stop shopping product portfolio, which has also led to long-standing customer relationships. Bioplan benefits from clients' increasing emphasis on the importance of product sampling as part of their marketing plans to attract customers. Though still a small part of its business, the company has experienced steady growth in its e-commerce distribution channel and digital/mobile contactless sampling solutions for its beauty, cosmetics and personal care clients. Moody's also recognizes the growth in Bioplan's independent brands, facilitated by the rise of social media influencers that trial and test products, and increasingly impact consumer purchasing decisions. Moody's expects Bioplan to experience weak liquidity over the coming 12-15 months. The business model has been profitable from an EBITDA standpoint, requires minimal capex and has the propensity to generate positive free cash flow. However, Moody's expects free cash flow generation to be negative this year due to significant volume and revenue declines leading to EBITDA shortfalls. Over the next twelve months, Moody's projects negative free cash flow in the range of -$10 million to -$20 million (or $-5 million to -$10 million, including proceeds from the sale of beneficial interests in securitized trade receivables). Cash balances were $31.1 million at March 31, 2020, which include $19.8 million in borrowings drawn under the $20 million unsecured revolving credit facility maturing January 2021 (unrated). Bioplan also maintains access to a EUR49 million accounts receivable factoring program (i.e., Europe: EUR25 million; North America: EUR24 million) maturing March 2022, of which $38.9 million was outstanding at March 31, 2020. The first-lien term loan has a mandatory 1% annual amortization (approximately $2.6 million annually or $0.65 million quarterly), which the company is exempt from paying in 2020 due to prior years' excess cash flow payments, which qualify as a prepayment under the first-lien credit agreement. 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 packaging and interactive product sampling sectors have been some of the sectors most significantly affected by the shock given their sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Bioplan's credit profile, including its exposures to US, European and Asian economies, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Bioplan remains vulnerable to the outbreak's continuing spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Bioplan of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Bioplan faces certain risks associated with social trends that include consumers' increasing focus on sampling beauty and skin care products and less on sampling fragrances chiefly due to the secular decline in magazine sales and associated decrease in magazine fragrance inserts. Also, the shift of beauty product sales direct-to-consumer via the internet is being facilitated by social influencers that trial and test products, which increasingly impacts purchasing behavior by Millennials, an increasingly large demographic. Moody's applied a -1-notch override on the rating for the senior secured first-lien term loan in its Loss Given Default (LGD) model to reflect the instrument's diminished expected recovery prospects arising from the numerous challenges facing the company. The Caa1 rating on the first-lien term loan reflects the instrument's first-out payment position versus the second-lien term loan and is driven by its senior position in Bioplan's debt capital structure. The first-lien term loan is secured by a first-priority lien on substantially all tangible as well as intangible assets and derives support from the second-lien term loan. The Caa3 rating on the second-lien term loan reflects the instrument's subordinated position relative to the first-lien term loan and low anticipated recovery prospects as a result of its very junior position. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating outlook could be revised to stable if Bioplan experienced organic revenue growth in the low-single digit percentage range with 14%-16% adjusted EBITDA margins, financial leverage in the 8x-9x band (Moody's adjusted) and positive free cash flow to debt in the 0.5% to 2% range (Moody's adjusted). A ratings upgrade is unlikely over the near-term, especially if the coronavirus outbreak and economic recession accelerate the secular decline in magazine sales, direct-to-consumer purchases of beauty products online and permanent closure of retail store locations. Over time, an upgrade could occur if EBITDA margins remain stable (at a minimum) amid an expanding revenue base resulting in sustained reduction in total debt to EBITDA below 8x (Moody's adjusted), free cash flow to adjusted debt of at least 2% and adjusted EBITDA interest coverage at or above 1.5x. The company would also need to maintain a good liquidity position and exhibit prudent financial policies. Ratings could experience downward pressure if financial leverage, as measured by total debt to EBITDA, were sustained above 9x (Moody's adjusted), EBITDA interest coverage declines to below 1x or liquidity experiences further deterioration such that free cash flow generation becomes meaningfully negative. Downward pressure could also occur if the operating and competitive environments were to weaken as evidenced by erosion in market share, product prices and/or operating margins. Ratings could also be downgraded if Bioplan is unable to make timely progress in refinancing the first-lien term loan due September 2021. Headquartered in New York, NY, privately-owned Bioplan USA, Inc., through its direct parent, Tripolis Holdings Sàrl ("Tripolis Holdings"), is a leading global provider of marketing, packaging and interactive sampling products to the fragrance, beauty, cosmetic and personal care industries. Tripolis Holdings is a Luxembourg private limited liability company that was created to merge the sampling and packaging operations of two carve outs, New York-based Arcade Marketing and Paris-based Bioplan in September 2014. Arcade Marketing was carved out of Visant Corporation, a marketing and publishing services enterprise owned by DLJ Merchant Banking Partners and Kohlberg Kravis and Roberts. Bioplan was carved out of Ileos Group, a provider of luxury, cosmetics and pharmaceutical packaging owned by Oaktree Capital Management, L.P. ("Oaktree"). Oaktree currently owns 100% of Bioplan USA. Net revenue totaled approximately $344 million for the twelve months ended March 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. BMC ACQUISITION: S&P Upgrades ICR to 'B-' on Improved Liquidity --------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating and senior secured credit facility ratings on BMC Acquisition Inc. to 'B-' from 'CCC+'. The upgrade reflects BMC's improved liquidity and good market position as a national outsourced provider of employee benefits and services. The company has executed its strategic transformation initiative, and S&P now expects it will maintain adequate liquidity over the next 12 months. Currently, S&P Global economists forecast an unemployment rate of 8.8% (over 40 million unemployment claims as of May 28, 2020) and a GDP contraction of 5.6% for 2020, which S&P believes will have a significant effect on the financial health of small businesses. Indeed, a survey conducted by the U.S Chamber of Commerce/MetLife in April 2020 concluded that one in four businesses could only operate for two months or less under current conditions. However, while uncertainty regarding the magnitude and duration of the outbreak remains, some businesses have benefited from the $376 billion of relief for American workers and small businesses, which was signed into law under the CARES Act on March 27, 2020. Some have also borrowed from the Central Bank's $600 billion Main Street Lending Program. Furthermore, S&P believes the company's national scale, focus on customer service, and regulatory expertise can help support its operating performance through the cycle. In addition, given the company's variable cost structure (its commission-based sales force accounts for most of its operating expenses), S&P expects the company to be well positioned to improve its credit measures as the economic recovery takes shape into 2021. S&P acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. "Some government authorities estimate the pandemic will peak about midyear, and we are using this assumption in assessing the economic and credit implications. We believe the measures adopted to contain COVID-19 have pushed the global economy into recession. As the situation evolves, we will update our assumptions and estimates accordingly," S&P said. The negative outlook reflects the company's relatively high adjusted leverage as well as the inherent uncertainty of the impact of the COVID-19 pandemic and the economic recession on the company's credit measures. S&P could lower the rating if it: -- Anticipate ongoing free operating cash flow deficits stemming from weaker-than-expected operating performance; -- Expect increased financial stress resulting from a meaningful erosion in the firm's liquidity cushion; or -- Expect aggressive shareholder friendly or investment policies that result in leverage sustained above S&P's expectations. Under any of these scenarios, a confluence of factors--such as large shareholder dividends, debt-financed acquisitions, or weaker demand resulting from the pandemic and U.S. recession--could result in S&P's expectation of a near-term payment default or a reassessment of the longer-term sustainability of the company's capital structure. S&P could revise the outlook to stable if BMC is able to demonstrate good operating performance while improving its credit measures, such as sustaining its FOCF to debt at 2%-4% and adjusted leverage below 8x. BOEING CO: Cuts Jobs, Undertakes Corporate Restructuring -------------------------------------------------------- Reuters reports that planemaker Boeing Co. said it is eliminating 12,000 U.S. jobs, including 6,770 involuntary layoffs, as part of its restructuring in the face of the coronavirus pandemic. Boeing also disclosed it plans "several thousand remaining layoffs" in the next few months but did not say where those would take place. The company announced in April 2020 that it would cut 10% of its worldwide workforce of 160,000 by the end of 2020. Boeing said at the end of May it had approved 5,520 U.S. employees to take voluntary layoffs, and also disclosed it was notifying 6,770 workers of involuntary layoffs. Boeing is moving to cut costs as it faces a drop in airplane demand from the coronavirus pandemic. Boeing Chief Executive Dave Calhoun told employees in an email that the "pandemic's devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices. ... I wish there were some other way." In April 2020, Boeing recorded zero orders for the second time this year and customers canceled another 108 orders for its grounded 737 MAX plane, compounding its worst start to a year since 1962. About Boeing Co. Chicago-based The Boeing Company (NYSE: BA) is the world's largest aerospace company and leading provider of commercial airplanes, defense, space and security systems, and global services. As a top U.S. exporter, the company supports commercial and government customers in more than 150 countries. Boeing employs more than 160,000 people worldwide and leverages the talents of a global supplier base. Building on a legacy of aerospace leadership, Boeing continues to lead in technology and nnovation, deliver for its customers and invest in its people and future growth. * * * The aviation industry has been severely affected by the economic shutdowns and travel restrictions brought by the Coronavirus pandemic. Even before the outbreak, Boeing has been burning a lot of cash by continuing to pay its suppliers and employees without much revenue as its 737 Max is still grounded. The 737 Max grounding followed two fatal crashes for that new model last year. Now with the pandemic, airlines are now deferring orders since the virus has brought global travel to a near standstill. Boeing in April raised US$25 billion in a bond offering that allowed the company avoid taking government aid. BRIGGS & STRATTON: S&P Lowers ICR to 'CCC-'; Outlook Negative ------------------------------------------------------------- S&P Global Ratings lowered its rating on Wisconsin-based small engine manufacturer Briggs & Stratton Corp. (BGG) to 'CCC-' from 'CCC'. In addition, S&P lowered its rating on the company's unsecured notes to 'CC' from 'CCC-'. Its '5' recovery rating (rounded estimate: 10%) on the notes is unchanged. BGG's asset-based lending (ABL) facility, which had $402 million drawn at March 29, 2020, will mature on Sept. 15, 2020, if the company does not repay its $195 million of outstanding unsecured notes by this date or maintain the applicable ABL availability level required by the credit agreement. A combination of very high leverage and operating challenges appear likely to cause a default or distressed restructuring before the Sept. 15, 2020, springing ABL maturity. BGG's operating performance, which was soft during fiscal year 2019 due to unfavorable weather and the Sears bankruptcy, has faced much stronger headwinds in fiscal year 2020 (FY20) due to the economic impact of the coronavirus pandemic. "We believe BGG's very high debt load will remain unsustainable, reducing the likelihood of the company refinancing the $195 million of unsecured notes at par. Although the operating environment may not be as challenging in FY21 as it was in FY20, we forecast sales will continue to decrease next year as the company and its channel partners continue to deal with weaker demand due to the coronavirus and resulting economic slowdown. Profitability will likely improve only modestly on cost-cuts and operating efficiencies. As a result, we expect leverage will remain well above 10x throughout FY21," S&P said. Internal liquidity may be insufficient to repay the $195 million of unsecured notes. BGG had only $44 million of cash and $74 million of ABL availability at March 29, 2020. Although these amounts may improve throughout the summer as BGG reduces inventory, the company may not have sufficient liquidity to fully repay its unsecured notes by Sept. 15 and therefore eliminate the springing ABL maturity. Furthermore, repayment of the notes would deplete the liquidity BGG needs to fund capital expenditures as well as working capital accumulation in the first half of the year prior to its 2021 peak selling season. Despite management's efforts to reduce peak inventory needs, S&P expects intrayear working capital needs will remain a significant use of liquidity. "Considering BGG's challenged capital structure and our expectation for weak operating performance, we would likely view a restructuring of the unsecured notes as distressed and thus akin to a default. The unsecured noteholders could enter formal negotiations that could result in extension of the debt maturities or in debtholders receiving less than par. Although this could benefit BGG's capital structure, we believe creditors would likely receive less than the original promise if the company were to restructure its debt, which we would consider a default," S&P said. The negative outlook reflects the heightened risk that the company could default on its debt obligations or pursue a distressed debt restructuring within the next six months. S&P could lower its rating on Briggs & Stratton if the company: -- Enters into or plans to announce a distressed restructuring or bankruptcy filing. -- Misses either the upcoming interest payment due June 15, 2020, or does not repay the unsecured notes at maturity. Although highly unlikely given S&P's expectations for challenging operating performance and capital market conditions over the next 12 months, it could raise its ratings on BGG if it expects it will refinance its upcoming unsecured notes maturities at par. BRUIN E&P: S&P Lowers Senior Unsecured Notes Rating to 'C' ---------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Oil and gas exploration and production company Bruin E&P Partners LLC to 'CC' from 'CCC-'. S&P also lowered its issue-level rating on the company's senior unsecured notes due 2023 to 'C' from 'CC'. The recovery rating on remains '5', indicating its expectation of modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. The downgrade follows the company's disclosure that it extended its forbearance agreement with lenders to June 17 after failing to comply with financial covenants for first-quarter 2020 and missing its first borrowing base deficiency payment, which was due in May. Lenders under Bruin's credit facility had previously reduced its borrowing base in April to $400 million from $725 million, resulting in a deficiency of $170 million to be repaid over six months. The company noted it is exploring strategic alternatives as it continues to struggle with liquidity constraints and weak commodity prices. The negative outlook reflects a high likelihood Bruin will undergo a debt restructuring. S&P would lower the rating if the company files for bankruptcy or otherwise completes a debt restructuring. S&P could raise its ratings on Bruin if it no longer expects default to be a virtual certainty. BRUNO ONE: Bid to Stay Bankruptcy Proceedings Amid Appeal Junked ---------------------------------------------------------------- In the case captioned In re: BRUNO ONE, INC., Debtor. BRUNO ONE, INC., Appellant, v. UNITED STATES TRUSTEE, Appellee, Civil Case No. 8:19-cv-3006-T-24 (M.D. Fla.), District Judge Susan C. Bucklew denied Appellant's motion for stay during pendency of appeal. Debtor-Appellant Bruno One, Inc. owns and leases residential real estate. Appellant filed for bankruptcy under Chapter 11 on August 22, 2019. On August 23, 2019, the bankruptcy court issued an order directing the Debtor to (1) maintain insurance customary and appropriate to the Debtor's business; and (2) file monthly operating reports. The order warned the Debtor that failure to comply would constitute cause for dismissal or conversion of the case. On Sept. 12, 2019, the United States Trustee filed a motion to dismiss or convert the Debtor's bankruptcy case to one under Chapter 7, pursuant to 11 U.S.C. section 1112(b)(1). The Trustee argued that Debtor had failed to file documents required by the Bankruptcy Code and to comply with the bankruptcy court's notice of deficiencies. On Oct. 10, 2019, the bankruptcy court held a hearing on the Trustee's motion. At the hearing, the Trustee explained to the bankruptcy court that the Debtor did not obtain proper insurance for its real properties that would protect the bankruptcy estate, and the Debtor's counsel acknowledged that fact. The Trustee also stated that the Debtor did not timely provide him with the required financial statements or an operating report for August, and the Debtor's counsel acknowledged that he did not timely submit the documents. At the hearing, the bankruptcy court stated that (1) the Debtor had not complied with the rules of Chapter 11; (2) the Debtor filed its bankruptcy petition without the necessary information to prepare the required schedules; (3) the Debtor disregarded the bankruptcy court's order to obtain sufficient insurance; and (4) the Debtor did not have sufficient cash flow for a Chapter 11 case. As a result, the bankruptcy court granted the Trustee's motion, finding that it was in the best interest of the creditors and bankruptcy estate to convert the case to one under Chapter 7. The Debtor moved for reconsideration. The bankruptcy court held a hearing on the Debtor's motion on Nov. 19, 2019. At the hearing, the bankruptcy court found, among other things, that the Debtor still had not obtained sufficient insurance on its real properties, which was necessary to protect the bankruptcy estate. At the end of the hearing, the bankruptcy court stated that the failure to obtain sufficient insurance, alone, precluded the court from granting the motion for reconsideration and converting the case back to one under Chapter 11. As a result, the bankruptcy court denied the Debtor's motion. The Debtor appealed the bankruptcy court's conversion order, as well as the order denying the Debtor's motion for reconsideration. The Debtor then filed a motion with the bankruptcy court to stay the bankruptcy proceedings pending the appeal in the District Court. The bankruptcy court held a hearing on that motion on Jan. 9, 2020 and denied the motion. Now, District Court Judge Bucklew explains that to obtain a stay pending appeal under Fed.R.Bankr.P. Rule 8007, the movant must establish the following four factors: 1) that the movant is likely to prevail on the merits on appeal; 2) that absent a stay the movant will suffer irreparable damage; 3) that the adverse party will suffer no substantial harm from the issuance of the stay; and 4) that the public interest will be served by issuing the stay. The party requesting the stay must show satisfactory evidence on all four criteria. Ordinarily, the first factor is the most important, and requires a showing that success on the merits is likely or probable. Nevertheless, a stay may be issued where the appellant demonstrates that his or her chances of success are merely substantial so long as a strong showing weighing heavily in the appellant's favor is made on the latter three elements. After considering the motion in connection with the standard mention, Judge Bucklew finds that a stay is not warranted because the Debtor's chances of success in this appeal are not substantial. Pursuant to 11 U.S.C. section 1112(b)(1), the bankruptcy court could covert the case to one under Chapter 7 due to the Debtor's failure to maintain sufficient insurance on its real properties and failure to comply with the bankruptcy court's orders directing the Debtor to do so. The Debtor does not dispute that it failed to maintain sufficient insurance. Therefore, the Debtor is not entitled to a stay of the bankruptcy case. A copy of the Court's Order dated April 2, 2020 is available at https://bit.ly/2LoYlSO from Leagle.com. About Bruno One Based in Clearwater, Florida, Bruno One Inc. is a privately held company engaged in activities related to real estate. The company filed for chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 19-07927) on August 22, 2019, with estimated assets and estimated liabilities of 1 million to 10 million respectively. The petition was signed by Caruso Bruno Ivan, president. The case was converted to chapter 7 on Oct. 10, 2019. C21 INVESTMENTS: Supplements Notice on Temporary Filing Relief -------------------------------------------------------------- C21 Investments Inc. supplemented its news release from May 28, 2020, regarding its reliance on temporary regulatory filing relief, pursuant to the British Columbia Securities Commission's blanket order, BC Instrument 51-515 Temporary Exemption from Certain Corporate Finance Requirements, and comparable exemptions in other Canadian provincial jurisdictions. As a result of logistical delays caused by the COVID-19 pandemic, the Company is relying on the Exemption to postpone the release of its Jan. 31, 2019 audited annual financial statements, and management's discussion and analysis. The Company is otherwise required to release its Annual Filings on or before June 1, 2020 pursuant to National Instrument 51-102 Continuous Disclosure Obligations, which is now estimated to be filed on or before July 14, 2020 in reliance of the Exemption. The Company has imposed an insider trading blackout pending the release of its Annual Filings. Members of management, directors and other insiders will comply with the Company's insider trading policy and the guidelines described in section 9 of National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions, until the Annual Filings have been released. About C21 Investments Headquartered in Vancouver, Canada, C21 Investments -- http://www.cxxi.ca-- is a vertically integrated cannabis company that cultivates, processes, and distributes cannabis and hemp-derived consumer products in the United States. The Company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing, and distribution assets in strategic markets, leveraging industry-leading retail revenues with high-growth potential multi-market branded consumer packaged goods. The Company owns Silver State Relief and Silver State Cultivation in Nevada, and Phantom Farms, Swell Companies, Eco Firma Farms, and Pure Green in Oregon. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, pre-rolls, cannabis oil, vaporizer cartridges and edibles. C21 Investments reported a net loss of US$23.60 million for the year ended Jan. 31, 2019, compared to a net loss of US$599,471 for the year ended Jan. 31, 2018. As of July 31, 2019, the Company had US$94.83 million in total assets, US$59.25 million in total liabilities, and US$35.57 million in total shareholder's equity. Davidson & Company LLP, the Company's independent auditor, issued a "going concern" qualification in its report on the Company's consolidated financial statements for the year ended Jan. 31, 2019, citing that the Company incurred a net loss during the year ended Jan. 31, 2019 and, as of that date, the Company's current liabilities exceeded its current assets by $13,316,122. These events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. CAMBER ENERGY: Signs Amended Merger Agreement with Viking Energy ---------------------------------------------------------------- Camber Energy, Inc. and Viking Energy Group, Inc. have entered into an amendment to the definitive Agreement and Plan of Merger signed by the parties on Feb. 3, 2020. Details regarding the Merger, along with a copy of the Merger Agreement, were included in Viking's and Camber's Current Reports on Form 8-K filed on Feb. 5, 2020, with the Securities and Exchange Commission, and are available under "Investors" at http://www.vikingenergygroup.com/ and http://www.camber.energy/ The amendment (i) modified and clarified the mechanisms pursuant to which Camber's and Viking's post-combination percentage of Camber would be determined (without affecting any changes to the originally contemplated 80/20 percentage split between Viking and Camber, based on the fully-diluted post-merger capitalization of Camber, without taking into account Camber's outstanding Series C Preferred Stock (Camber's 80% split being defined as the "Camber Percentage")); (ii) placed a cap of 5% (up or down) on the adjustment mechanism; (iii) corrected a prior error in the Merger Agreement relating to such calculation; and (iv) included a prohibition on either party raising capital from the other party's existing shareholders without prior written consent. As disclosed previously, the planned merger contemplates Camber issuing newly-issued shares of common stock to the equity holders of Viking in exchange for 100% of the outstanding equity securities of Viking by means of a reverse triangular merger in which a newly formed wholly-owned subsidiary of Camber will merge with and into Viking, with Viking continuing as the surviving corporation and as a wholly-owned subsidiary of Camber after the Merger. If the closing of the Merger occurs, the Viking equity holders prior to the Merger will own approximately 80% of Camber's issued and outstanding common stock immediately after the Merger (the "Camber Percentage"), and the Camber equity holders prior to the Merger shall own approximately 20% of Camber's issued and outstanding common stock immediately after the Merger, subject to adjustment mechanisms set out in the Merger Agreement, and in each case on a fully-diluted, as-converted basis as of immediately prior to the Closing (including options, warrants and other rights to acquire equity securities of Viking or Camber), but without taking into account any shares of common stock issuable to the holder of Camber's Series C Preferred Stock upon conversion of the Series C Preferred Stock. Completion of the Merger is subject to a number of closing conditions, as set out in the Merger Agreement. Specifically, the Merger Agreement, as amended, provides that the Camber Percentage is to be adjusted as follows: (i) for each (A) $500,000 in Camber unencumbered cash (without any associated debt) available for use by the combined company after the effective time of the Merger, which comes from equity sold by Camber for cash from Feb. 3, 2020, through the Effective Time, which is not contingent or conditional upon the closing of the Merger, or (B) $500,000 in other unencumbered assets acquired by Camber prior to closing without increasing Camber's liabilities, the Camber Percentage will increase by an incremental 0.5%; and (ii) for each additional $500,000 in Viking unencumbered cash (without any associated debt) for use by the Combined Company after the Effective Time which is not contingent or conditional upon the closing of the Merger, in excess of $500,000, which comes from equity sold by Viking for cash from Feb. 3, 2020 through the Effective Time, the Camber Percentage will decrease by an incremental 0.5%. The aggregate Camber Percentage Increase or Camber Percentage Decrease shall not exceed 5%. Camber and Viking are also updating their previously planned next steps in the merger process and the anticipated timing associated with each item, as disclosed below: Event Projected Timeline* ----- ------------------- Viking to file its Annual Report on Completed Form 10-K for Viking's December 31, 2019 fiscal year end Viking to file Current Report on Completed Form 8-K/A including financial statements related to its February 3, 2020 acquisition Camber to file Registration Statement Early June 2020 on Form S-4 with preliminary joint proxy statement with the Securities and Exchange Commission Camber and Viking to receive Fairness Camber: Received Opinions regarding the planned Merger in April 2020 Viking: Pending Camber to file its Annual Report on Form 10-K for Camber's March 31, 2020 fiscal year end June 2020 Camber and Viking to receive Shareholder Approval Summer 2020 Camber to receive Stock Exchange Approval for the Merger Summer 2020 Closing of the Merger Summer 2020 *Estimate only. There is no guarantee items will be completed by such date, or at all. Such timeline may also need to be extended in connection with delays caused by the Covid-19 pandemic and governmental responses to such pandemic. James Doris, president & CEO of Viking, stated, "We continue to be excited by the enhanced capabilities for greater liquidity and access to capital markets which will available as a result of the combination of Viking and Camber and are pleased with the progress each party has made towards closing the Merger to date." Louis G. Schott, interim CEO of Camber, stated, "Camber is in the process of finalizing the initial draft Form S-4 Registration Statement for the Merger which we plan to file in the next week or so, and we look forward to closing the transaction this Summer." About Viking Viking is an independent exploration and production company focused on the acquisition and development of oil and natural gas properties in the Gulf Coast and Mid-Continent region. The company owns oil and gas leases in Texas, Louisiana, Mississippi and Kansas. Viking targets undervalued assets with realistic appreciation potential. About Camber Energy Based in Houston, Texas, Camber Energy -- http://www.camber.energy -- is primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including from the Hunton formation in Lincoln, Logan, Payne and Okfuskee Counties, in central Oklahoma; the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas, in connection with its Panhandle acquisition which closed in March 2018. As of Dec. 31, 2019, Camber Energy had $5.10 million in total assets, $2.02 million in total liabilities, and $3.08 million in total stockholders' equity. For the nine months ended Dec. 31, 2019, the Company reported a net loss of $3.40 million. At Dec. 31, 2019, the Company's total current assets of $2.4 million exceeded its total current liabilities of approximately $2.0 million, resulting in working capital of $0.4 million, while at March 31, 2019, the Company's total current assets of $8.2 million exceeded its total current liabilities of approximately $2.1 million, resulting in working capital of $6.1 million. The reduction from $6.1 million to $0.4 million is due to losses from continuing operations and costs incurred with the merger and ultimate divestiture of Lineal, including funds loaned to Lineal in connection with such divestiture. The Company said the factors above raise substantial doubt about its ability to continue to operate as a going concern for the twelve months following the issuance of these financial statements. The Company believes that it will not have sufficient liquidity to meet its operating costs unless it can raise new funding, which may be through the sale of debt or equity or unless it closes the Viking Merger, which is scheduled to be closed by June 30, 2020, extendable up to Dec. 31, 2020 under certain circumstances, the completion of which is the Company's current plan. There is no guarantee though that the Viking merger will be completed or other sources of funding be available. CHEFS' WAREHOUSE: S&P Affirms 'B-' ICR; Rating Off Watch Negative ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on U.S.-based The Chefs' Warehouse Inc. and removed it from CreditWatch, where the rating agency placed it with negative implications on March 20, 2020. S&P assigned its 'B' issue-level rating to the company's extended term loan. The recovery rating is '2'. "We are also raising our issue-level rating on the company's existing first-lien term loan to 'B' from 'B-', and removing it from CreditWatch. We will withdraw our rating on this facility if all lenders participate in the extended term loan. Our rating actions assume the transaction closes on the terms provided to us," S&P said. The ratings affirmation and removal from CreditWatch reflects Chefs' strengthened liquidity position and proposed debt maturity extension. Pro forma for the transaction, which will include a prepayment of a portion of the outstanding term loan balance, S&P expects the company will still have over $200 million cash. While it expects Chefs' will need to repay some of its outstanding asset-based lending (ABL) revolver balance ($80 million outstanding) as its borrowing base declines due to lower receivables, S&P forecasts cash on hand will be sufficient to weather unprecedented industry headwinds through 2021. The term loan extension also pushes out debt maturities, even if not all lenders participate. Nevertheless, the negative outlook reflects continued uncertainty around the severity and duration of the coronavirus pandemic's impact on the food service industry. "We believe food service distributor sales have declined 50%-60% year over year since the start of the pandemic. While we expect trends will improve in coming months as restaurants reopen, it is difficult to say when or if conditions will return to pre-COVID levels. We believe restaurant capacity restrictions across most states and hesitancy from a large group of consumers to resume food away from home consumption will prohibit the restaurant industry from returning to prior levels anytime soon. Further, spikes in infection rates would likely discourage consumers from eating out and cause additional government lockdowns, likely leading to more severe and sustained industry declines than reflected in our base-case forecast," S&P said. Chefs' revenues declines have been more pronounced than those of broad line food service distributors and the company will likely face a longer path to recovery. S&P believes the company's declines are more significant (likely above 80% year over year in late March, improving to the 50%-60% area in May) than broad line food service distributors such as Sysco Corp. and US Foods Inc. because of its greater exposure to menu-driven independent restaurants and fine dining establishments that rely heavily on on-premise dining. With on-premise dining banned across most of the country since the outbreak of the coronavirus, most independent restaurants have been limited to takeout/delivery services or closed entirely. But even as states reopen, restaurants will likely face capacity limitations in the coming months, meaning Chefs' core customer base will likely face a longer road to recovery than quick service and fast casual dining. Running at 25% or 50% capacity may not be sustainable for many independent restaurants, which could force many owners to close permanently. Chefs' is also highly indexed to major metropolitan areas such as New York, Boston, San Francisco, and Chicago. Its key territories may be slower to recover than more sparsely populated areas in the country and could be more exposed to future outbreaks and quarantines. These factors create a high degree of uncertainty around S&P's forecast for Chefs'. The negative outlook reflects the potential for a lower rating if the pandemic causes more severe and prolonged stress to Chefs' cash flows than S&P forecasts, resulting in an unsustainable capital structure and eventual liquidity crisis. "We could lower the rating if we believe fiscal 2021 leverage will be sustained around 10x, EBITDA interest coverage will remain below 1.5x, or free operating cash flow (FOCF) will be negative. This could occur if restrictions on restaurant capacity or consumer hesitancy to resume food away from home consumption materially lowers sales, including because of widespread permanent restaurant closures. This could also occur if infection rates spike and lead to additional lockdowns; a protracted recession and high unemployment rates dramatically reduce consumer discretionary spending on food away from home; or the company struggles to manage food cost volatility," S&P said. "We could revise the outlook to stable if infection rates subside and food away from home consumption expands at a strong and steady pace as states and municipalities reopen, giving us confidence that Chefs' will restore and sustain leverage below 7.5x, while maintaining positive FOCF and adequate liquidity," the rating agency said. Chefs' is a specialty food service distributor focused on serving the specific needs of chefs at menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, and specialty food retailers. The company offers a wide portfolio of specialty food products, including center-of-plate proteins, unique oils and vinegars, charcuterie, specialty cheeses, truffles, and chocolate. CHELAN COUNTY PHD 2: Moody's Confirms GOLT Bonds at Ba1 ------------------------------------------------------- Moody's Investors Service has downgraded Chelan County Public Hospital District 2 (PHD 2), Washington's general obligation unlimited tax bonds to Baa3 from Baa2. At the same time, Moody's confirmed the Ba1 ratings on the district's general obligation limited tax bonds. Concurrently, Moody's revised the outlook to negative, resolving the ratings under review status. The district's general obligation bond rating was placed under review for possible downgrade on March 31, 2020 due to the anticipated negative impacts of the coronavirus and the potential disruption to cash flow stemming from preparations and response to the pandemic. This action concludes that review. RATINGS RATIONALE The downgrade to Baa3 on the district's GOULT bonds reflects chronically low liquidity despite recent federal funding. At the end of fiscal 2019 the district's liquidity had fallen to an estimated 18 days cash on hand, which is exceptionally low for a hospital enterprise. Positively, the hospital received both grants and loans to help manage through the coronavirus outbreak, and as of April 30, days cash improved to a still quite narrow 38 days. However, during the first four months of the year, the hospital continued to present a substantial net loss due to the loss of revenue-producing services because of the coronavirus outbreak. Moody's expects this loss to continue through the end of the year though the net loss should narrow some as the hospital's services resume. Supporting the Baa3 rating is the large tax base, though the economy's reliance on tourism and second home owners will likely lead to larger property value declines here than the average Washington tax base. Debt is manageable and positively the district has delayed its new hospital construction project while it addresses the weak financial picture and declines in revenue that predate the coronavirus outbreak. The district participates in a defined benefit pension plan for its EMS employees; but positively, the plan has no unfunded liabilities as of fiscal 2018. Favorably, proceeds from the district's GOULT bonds remain largely unspent and are held with the county. Additionally, the county collects and remits the dedicated and unlimited property tax levy for GOULT debt service, providing modest additional bondholder security, though this is not statutorily required. The confirmation of the Ba1 on the district's GOLT bonds reflects the change in expectations for future debt issuance on par with the existing outstanding 2013 LTGO bonds. Without the issuance of the additional USDA LTGO bonds or other hospital revenue bonds, the operating levy is expected to be sufficient to meet debt service requirements for the GOLT bonds, leading to a one-notch rating distinction between the GOULT and GOLT ratings. The GOLT rating considers the general credit characteristics of the district as well as the full faith and credit and all-available revenue pledge of the hospital. Despite the limitations of the operating levy, Moody's views the pledge as stronger than a general hospital revenue pledge. Specifically, in the event of a dissolution of any special district in the state, the superior court of the county has the authority to order the board of commissioners to levy assessments in the manner provided by law against property in the district in the amounts sufficient to retire outstanding debt. 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 of the crisis so far on Chelan PHD 2, WA. Moody's will continue to monitor the hospital's ability to manage liquidity and operations through the ongoing crisis and will update the rating and/or outlook if Moody's sees sustained deterioration in the district's finances. RATING OUTLOOK The negative outlook reflects the continued deterioration of district finances and ongoing net loss due to the coronavirus outbreak. While grants and loans have reduced the near-term risk, the hospital continues to see higher expense than revenue and is restricted from making substantial staffing changes if it wishes to receive loan forgiveness under the SBA's PPP program. Continued declines in liquidity and suppression of revenue-generating activity will quickly require the hospital to seek other forms of liquidity or make more drastic service cuts. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Sustained stronger financial performance, demonstrated by strengthened liquidity and stronger operating margin - Reduced future leverage due to major revisions of the hospital's new construction plans FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Further declines in liquidity driven by an inability to reduce expense to meet ongoing revenue - Increased leverage for capital projects, especially if net revenue has not improved substantially and sustainably - Additional debt issuance that depends on the operating levy or hospital revenue for support LEGAL SECURITY The GOULT bonds are secured by a separate and dedicated property tax pledge, not subject to limitation as to rate or amount. The GOLT bonds are secured by the full faith, credit and resources of the district, subject to the constitutional and statutory limitations provided by law without a vote of the electors of the district. PROFILE Chelan County Public Hospital District 2, Washington operates as the Lake Chelan Community Hospital in the city of Chelan, Washington, which is a scenic resort community of approximately 4,000 residents at the edge of Lake Chelan in North Central Washington. The hospital district encompasses the City of Chelan and unincorporated portions of Chelan County, and serves an estimated population of 12,000 (as of 2018 state estimates). METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in September 2019. CITGO PETROLEUM: Fitch Rates Senior Secured 2025 Notes 'BB/RR1' --------------------------------------------------------------- Fitch Ratings has assigned a 'BB'/RR1 to CITGO Petroleum Corporation's senior secured 2025 notes. Proceeds from the notes will be used to repay the $614 million outstanding on Opco's 2021 Term Loan B, as well as offering fees and expenses, and for general corporate purposes. The new notes will rank pari passu with other Opco debt and are secured by a first priority lien on CITGO's three refineries (Lake Charles, Lemont, and Corpus Christi), inventories, accounts receivables, and capital stock. Covenants are substantially similar to the company's existing 2022 notes. CITGO's ratings are supported by its high-quality refining assets, significant feedstock flexibility, modest capex requirements, and the favorable impact of revised (double trigger) change in control language, which also applies to the new notes. Rating concerns are material and include market access issues linked to Petroleos de Venezuela's (PDVSA) legacy ownership of CITGO; hurricane risks for the company's gulf coast assets; and the dramatic deterioration in refining conditions stemming from the coronavirus pandemic, which has led to unprecedented declines in refined product demand. KEY RATING DRIVERS Negative Coronavirus Impacts: The economic shutdowns associated with the coronavirus have resulted in significant declines in utilization rates and crack spreads for refiners, which Fitch expects will lead to trough conditions in 2020. While EIA weekly data indicate the market has retraced some of its losses as lockdowns have eased -- gasoline is now down 23% y-o-y versus earlier levels as low as 45%-50% --refinery utilization remains low at around 71%. CITGO anticipates utilization in the 60%-70% range on average in 2Q and has scheduled extensive maintenance activity during this period including turnarounds at Lemont and a larger turnaround at Lake Charles. A key concern is the duration of current shutdowns as well as their potential re-emergence in late fall or winter, given the industry's high fixed costs. Improved Governance: In line with U.S. sanctions, CITGO has severed all relationships with its PDVSA-appointed board and a new board has been installed by the Guaido-led faction of Venezuela. Operationally, CITGO has ceased all financial and operational interactions with PDVSA. Despite these improvements, challenges remain, including ongoing attempts by Venezuela to regain control of CITGO, although Fitch would note recent court rulings in favor of the Guaido-appointed board. Access to Capital: The legacy impacts of PDVSA ownership remain a key overhang on the credit in terms of capital market access. For example, CITGO had to replace revolver liquidity with a drawn term loan in 2019, given bank concerns about Office of Foreign Assets Control sanctions against Venezuelan entities. Fitch believes CITGO has access to a capital pool that is deep, but narrow. To its credit, CITGO has demonstrated market access when markets have remained closed to other HY energy names, particularly E&Ps; however, concerns remain about the company's ability to tap the market if the current downturn is prolonged. Lower Change of Control Risks: Refinancing has allowed CITGO to lower the risk of financial contagion from ultimate parent PDVSA risk through less restrictive change in control language in its indentures. Existing indenture clauses could force the company to repurchase its debt at 101 in the event PDVSA is no longer its majority owner, the company's ratings are subsequently not affirmed, and CITGO is unable to obtain sufficient consents from lenders. The financial weakness of parent PDVSA means that there are several paths that could trigger change of control. However, CITGO has replaced earlier language with a more benign, two trigger tests: less than majority ownership by PDVSA and a related failure by rating agencies to affirm the ratings within 90 days. Fitch believes there is a lower probability this test is triggered for several reasons: the 90-day period gives more time and transparency around any refinancing process, easing bondholder concerns about completion; and CITGO's credit profile should improve under nearly any owner besides PDVSA, which limits bondholder incentives to tender. All of CITGO's debt (including the new 2025 notes issuance) contains this double trigger language, and as a result, the company's auditors removed previous "going concern" language contained in its 2019 financial statements. Reasonable Financial Results: CITGO Petroleum's financial results were reasonable despite some coronavirus-linked declines. As calculated by Fitch, LTM EBITDA as of March 31, 2020 declined to $723 million versus $1.05 billion as of 2019, with the reductions driven primarily by weaker crack spreads (primarily in Chicago). As a result, Opco's LTM debt/EBITDA rose to 3.5x versus 2.4x at YE 2019. Fitch anticipates leverage will spike materially higher as the year progresses. Downturn Playbook: In the event of a prolonged downturn, Fitch believes CITGO could cut capex moderately but notes growth capex spending is already limited. Management of working capital (inventories) for cash is also likely, similar to what was seen during the financial crisis, and distributions would also be curbed automatically through the mechanics of Opco's restricted payments basket, which requires the company to earn its way back from any losses prior to distributing money. At the Holdco level, restricted cash of $179 million is held in a debt service reserve account, which acts as a buffer for debt repayment in the event distributions from Opco are set back. Parent-Subsidiary Linkage: Fitch rates the IDR of Holdco two notches below that of its stronger subsidiary, Opco. The notching differential stems from the significant legal and structural separations between the two, primarily the strong covenant protections for Opco's debt, which limits the ability of its direct parent to dilute its credit quality. Key covenants include limitations on guarantees to affiliates, restrictions on dividends, asset sales, and restrictions on the incurrence of additional indebtedness. Opco debt has no guarantees or cross-default provisions related to Holdco debt. CITGO Holding: Ratings for CITGO Holding reflect its structural subordination to Opco and its reliance on Opco to provide dividends to cover its significant debt service requirements. Dividends from Opco provide the majority of debt service capacity at Holdco and are driven by refining economics and the restricted payments basket. CITGO Holding's pledged security includes approximately $40 million-$60 million in EBITDA from midstream assets that are available for interest payments. These logistics assets are pledged as collateral under the CITGO Holding debt package. ESG Influence: CITGO has an ESG Relevance Score of '4' under Environmental Factors for 'Exposure to Environmental Impacts', which reflects the material exposure that Gulf Coast refiners have to extreme weather events (hurricanes), which periodically lead to extended shutdowns. Two of three of CITGO's refineries are located on the Gulf Coast, including the largest, Lake Charles (425,000 bpd). This factor is a negative consideration on the rating. CITGO also has an ESG Relevance Score of '4' under Governance Factors for 'Complexity, Transparency and Related-Party Transactions'. The '4' in this case is related to the impact that the legacy PDVSA ownership issues still have on the credit despite the transition CITGO has made to being run by a U.S.-approved board and centers around contagion risk through change of control clauses associated with a PDVSA default, as well as the overhang that legacy ownership creates in terms of capital markets access. Both factors have negative impacts on the credit profile and are relevant to the rating in conjunction with other factors. DERIVATION SUMMARY At 769,000 bbl/d day of crude refining capacity, CITGO is smaller than investment-grade refiners such as Marathon Petroleum Corporation (3.0 million bbl/d), Valero (2.6 million bbl/d), and Phillips 66 (1.9 million bbl/d) but is larger than Hollyfrontier (457,000 bpd). CITGO lacks the earnings diversification from ancillary businesses seen at a number of its peers in areas such as logistics MLPs, chemicals, renewables and retail. However, CITGO's core refining asset profile is strong, given the high complexity of its refineries, which allows it to process a large amount of discounted heavy crudes and shale crudes, both of which boost profitability. Legacy PDVSA ownership issues still remain an overhang on the credit through change of control contagion as well as market access issues. KEY ASSUMPTIONS - WTI oil prices of $32/bbl in 2020, $42/bbl in 2021, $50/bbl in 2022 and $52/bbl in 2023. - Crack spreads and refinery utilization drop sharply in 2020 and recover over the remainder of the forecast. - Capex of $270 million in 2020, which rises slowly across the forecast in line with recovering fundamentals. - Corporate SG&A expenses held relatively flat across the forecast on a $/bbl basis. - Company experiences negative FCF over the first two years of the forecast before flipping to FCF positive in 2022 given recovering refined product fundamentals. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that CITGO Corporation would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach The GC EBITDA of $1.21 billion estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. This value reflects the potential for narrower crude spreads on a mid-cycle basis due to structural changes in the market. An EV multiple of 5.0x was applied to the GC EBITDA to calculate a post-reorganization EV of $6.07 billion. This multiple is below the median 6.1x exit multiple for energy in Fitch's "Energy, Power and Commodities Bankruptcy Enterprise Value and Creditor Recoveries (Fitch Case Studies - April 2019)" but is also above the multiple for the only refining-related bankruptcy contained in that study, Philadelphia Energy Solutions. Fitch believes the CITGO refining assets are superior to those of Philadelphia Energy Solutions. Fitch also notes that, while CITGO's assets have been run to maximize FCF over the last several years, there is likely to be relatively strong buyer interest, regardless of any incremental capex needs. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. For liquidation value, Fitch used an 80% advance rate for the company's inventories since crude and refined products are standardized and easily re-sellable in a liquid market to peer refiners, traders or wholesalers. Fitch also assigned relatively light discounts to CITGO's net PP&E, based on historical refining transactions, and A/R. These items summed to a total liquidation value of $3.87 billion. The maximum of these two approaches was the going concern approach of $6.07 billion. A standard waterfall approach was then applied. Subtracting 10% for administrative claims resulted in an adjusted EV of $5.46 billion, which resulted in a three-notch recovery (RR1) for all of CITGO Petroleum's secured instruments (including the new notes), which are pari passu. A residual value of approximately $2.88 billion remained after this exercise. This was applied in a second waterfall at CITGO Holdco, whose debt is subordinated to that of Opco. The $2.88 billion was added to approximately $400 million in going concern value associated with the Midstream assets ($50 million in assumed run-rate midstream using an 8x multiple), as well as $179 million in restricted cash, which was escrowed in a debt service reserve account for the benefit of secured Holdco debt, along with A/R. This resulted in total initial value at Holdco of approximately $3.46 billion. No administrative claims were deducted in the second waterfall. Holdco secured debt also recovered at the 'RR1' level. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: CITGO Petroleum: - Sustained improvement in refined product market, marked by recovering utilization and crack spreads. - Improved market access. - Mid-cycle lease-adjusted FFO gross leverage below approximately 4.3x. - Mid-cycle debt/EBITDA below 3.0x. CITGO Holding: - Sustained improvement in refined product market, marked by recovering utilization and crack spreads. - Improved market access. - Mid-cycle lease-adjusted FFO gross leverage below approximately 6.0x. - Mid-cycle debt/EBITDA below 4.8x. Factors that could, individually or collectively, lead to negative rating action/downgrade: CITGO Petroleum: - Prolonged dislocation in refined product market, leading to sustained weakness in metrics and impaired liquidity. - Deterioration in market access. - Mid-cycle lease-adjusted FFO gross leverage above approximately 5.5x. - Mid-cycle debt/EBITDA above 4.1x. - Weakening or elimination of key covenant protections in the CITGO senior secured debt documents. CITGO Holding: - Deterioration in market access. - Mid-cycle lease-adjusted FFO gross leverage approaching 7.5x. - Mid-cycle debt/EBITDA approaching 6.5x. - Weakening or elimination of key covenant protections in CITGO Holding senior secured debt documents. 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 CITGO Petroleum: At 3/31/2020, CITGO Petroleum's liquidity comprised approximately $1.42 billion in cash, which excludes $19 million of restricted cash related to the company's insurance obligations and environmental escrows. The majority of Opco's cash is from proceeds from Opco's $1.2 billion term loan, which was issued in 2019 as replacement liquidity for the company's $900 million senior secured revolver and $320 million A/R securitization facilities. The company has maintained this liquidity on the balance sheet to handle working capital swings and other cyclical needs. CITGO also has $290 million in industrial revenues bonds in treasury that could be remarketed; however, this is less likely in the current environment given market volatility. Following the expected repayment of the 2021 term loan, the next maturity due is the company's $650 million 6.25% 2022 bonds. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed in the company's public filings. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. CITGO PETROLEUM: Moody's Rates $750MM Secured Notes Due 2025 'B3' ----------------------------------------------------------------- Moody's Investors Service assigned a B3 (LGD3) rating to CITGO Petroleum Corporation proposed $750 million in senior secured notes due 2025. Proceeds from the transactions will be used to repay $614 million outstanding under the company's term loan B due 2021 and other general corporate purposes. The outlook is stable. RATINGS RATIONALE CITGO Petroleum's B3 ratings and stable outlook primarily reflect the company's solid credit metrics for its rating category, the location of its assets in the United States (Government of United States of America, Aaa stable), and certain protections to lenders provided by credit agreements. These protections are in place to ring-fence the company from its ultimate owner, Petroleos de Venezuela, S.A., with clauses for limitations on increase in debt leverage, dividends, minimum cash, new business associations, change of control and proceeds from asset sales. In addition, and despite the current conditions, the company's refineries continue to generate reasonable financial results, fund capital spending internally, maintain a solid liquidity profile and access to capital markets. However, Moody's notes that CITGO Petroleum remains vulnerable to US actions against Venezuela and the political situation in that country, which could affect the company's operating and financial activities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING CITGO Petroleum's ratings could be upgraded if the risk arising from PDVSA's ownership, mostly related to legal procedures that could derive in change of control, asset sales or asset declines. CITGO Petroleum's ratings could be downgraded if (1) the company lacks access to capital markets for refinancing debt, (2) its margins decline because of its lack of access to an optimum mix of crudes or operating inefficiencies, or (3) PDVSA exerts negative influence on management's decisions, increasing CITGO Petroleum's credit risk, although it should be noted that the current sanctions have resulted in a severing of financial and operational ties. The principal methodology used in these ratings was Refining and Marketing Industry published in November 2016. CITGO Petroleum, headquartered In Houston, Texas, is an independent refining company with a capacity of 769,000 barrels per day (bpd) across three large refineries that have good logistical and market positions in the US Gulf Coast and Upper Midwest markets. The company is a wholesale refiner that sells a large portion of its refined products under the CITGO brand through around 4,600 independently owned and operated service stations. CITGO Petroleum is a wholly owned subsidiary of PDVSA, the state oil company of Venezuela. As of March 31, 2020 CITGO, Petroleum reported assets and last-twelve-month adjusted EBITDA of $8.4 billion and $1.1 billion, respectively. CSC HOLDINGS: Moody's Rates $1.1-Bil. Senior Unsecured Notes 'Ba3' ------------------------------------------------------------------ Moody's Investors Service assigns a Ba3 rating to CSC Holdings, LLC's $1.1 billion senior unsecured guaranteed notes due 2030 and a B3 to $625 million unsecured notes due 2030. CSC Holdings' B1 corporate family rating, B1-PD probability of default rating, and all instrument ratings are unaffected by the proposed transaction. Liquidity remains very good. The outlook is stable. The guarantors of the new senior guaranteed notes (that also guarantee the Existing Senior Guaranteed Notes and the Credit Facilities), contributed: (i) approximately 82% of the total assets of the Restricted Group as of March 31, 2020, (ii) approximately 89% of the net revenues and approximately 97% of the Adjusted EBITDA of the Restricted Group for the three months ended March 31, 2020 and (iii) approximately 89% of the net revenues and approximately 96% of the Adjusted EBITDA of the Restricted Group for the year ended December 31, 2019. Moody's expects the transactions to be leverage neutral, with $1.7631 billion in total proceeds from the offerings, used to repay maturities totaling $1.716 billion (5.375% guaranteed notes due July 2023 and 7.75% unsecured notes due 2025, specifically). Combined with cash on hand, debt proceeds will also be used to pay redemption premiums, interest, and transaction fees and expenses. Moody's believes the net effect of the transaction will not materially change the proportional mix of secured and unsecured debt, or the resultant creditor claim priorities in the capital structure. Assignments: Issuer: CSC Holdings, LLC Gtd Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5) RATINGS RATIONALE CSC Holdings' B1 CFR is supported by its large size (approximately $10 billion in revenue in 2019) and somewhat diversified footprint with a strong market position in its Optimum footprint which has very favorable market dynamics. This strength is reflected in very high, industry leading operating metrics including investment grade like EBITDA per homes passed and the Triple Play Equivalent ratio. The company has an upgraded network that produces superior network speeds that helps it compete with in-market peers and attract and retain residential and commercial customers, particularly broadband which helps to offset weakness in video and telephony. Residential broadband's strong revenue growth and profitability supports high margins in the broader business, and is a significant contributor to the company's free cash flow. Moody's expects this strength to continue, supported by network investments. The company also has very good liquidity. CSC Holdings' B1 CFR is constrained by a less than conservative financial policy that tolerates high leverage (near 5.6x, Moody's adjusted as of March 31, 2020) and substantial stock buybacks funded principally with most available free cash flow. Additionally, CSC Holdings' video and voice businesses are weakening, evidenced by a decline in the subscriber bases and the company's market share (the Triple Play Equivalent ratio). Moody's rates CSC Holdings' senior secured bank debt facilities Ba3 (LGD3), one notch above the B1 CFR. The secured debt has a stock pledge and is guaranteed by the operating subsidiaries of the Company. Bank lenders benefit from junior capital provided by the senior unsecured bonds at CSC Holdings (which have no guarantee). Moody's rates the senior unsecured guaranteed notes at CSC Holdings Ba3 (LGD3), pari-passu with the senior secured creditors with the benefit of the same guarantee from the restricted subsidiaries (as the credit facility creditors) and its view that the stock pledge for secured lenders provides no additional lift/benefit as the equity collateral would likely be worthless in bankruptcy. Also, Moody's rates CSC Holdings' senior unsecured (non-guaranteed) notes B3 (LGD5), two notches below the B1 CFR given the subordination in the company's capital structure. The instrument ratings reflect the probability of default of the company, as reflected in the B1-PD Probability of Default Rating, an average expected family recovery rate of 50% at default given the mix of secured and unsecured debt in the capital structure, and the particular instruments' ranking in the capital structure. CSC Holdings has very good liquidity, reflected in its SGL-1 liquidity rating. Liquidity is supported by strong operating cash flow, full availability under a $2.475 billion revolving credit facility ($2.297 available net of letters of credit), and covenant-lite loans. The company also benefits from a favorable maturity profile with no maturities in 2020 and limited maturities in 2021, with only $1 billion coming due, or less than 4% of its obligations. The stable outlook reflects its expectation that the company will generate $10.3-$10.8 billion in revenues over the next 12-18 months, about $4.4-$4.6 billion in EBITDA on margins in the low to mid 40% range. Moody's expects free cash flows of least $1.4 billion, after capital expenditures of near $1.3 billion (12%-13% of revenue). Moody's projects leverage (total debt/EBITDA) to improve over the next 12-18 months, but remain high with free cash flows used to repurchase stock rather than voluntarily repay debt. FCF/debt will rise to 6%-7%, and interest coverage (EBITDA-CAPEX/ interest) will rise to 2.3-2.4x. (Note: values and ratios above are Moody's adjusted). Its projections also assume the company's market share will fall to approximately 35%, measured using its Triple-Play-Equivalent ratio, and EBITDA per homes passed will be above $500. Key assumptions include a rise in broadband subscribers of at least low single digit percent, and video subscribers' losses of at least low single-digit percent. Its outlook assumes the company maintains its very good liquidity profile. CSC Holdings' governance presents a moderate risk to the credit profile. In particular, financial policy is less than conservative, tolerating moderately high leverage of 5.6x, Moody's adjusted, at the end of the last quarter ended March 31, 2020, and higher in past years). Management's calculation of leverage as of the same date is 5.3x, above its target ratio of between 4.5x-5.0x (calculated based on 3/31/20 L2QA EBITDA and net debt which includes total indebtedness (excluding finance leases , and other obligations, and issued but undrawn letters of credit under the revolving credit facility) minus cash and cash equivalents). The company also plans substantial share repurchases that will absorb all free cash flow. As of March 31, 2020, Altice USA had approximately $4.1 billion of availability remaining under the incremental share repurchase program and expects to complete $1.7 billion in share repurchases in 2020. Ownership and voting control is also concentrated in Next Alt, a personal holding company of Patrick Drahi, who is the controlling shareholder of Altice USA, owning approximately 40% of the shares and 90.6% of voting stock. This level of control creates governance risk, with Next Alt in control of all matters submitted to stockholders for approval. Mr. Drahi, through Next Alt is able to significantly influence the composition of the Board of Directors and thereby influence policies and operations, including the appointment of management, future issuances of Altice USA common stock or other securities, the payment of dividends, the incurrence or modification of debt, amendments to the certificate of incorporation and bylaws, and entering into extraordinary transactions including acquisitions or the sale of the company (e.g. a change in control). Additionally, as a controlled company, there is no requirement, and the company does not have, a majority of independent directors on its Board of Directors or a nominating and governance committee. Moody's also notes Next Alt holds 49.3% of the share capital and 78% of the voting rights of Altice Europe. Its view of the credit risk, and governance structure would turn negative should the controlling shareholder of these formally combined companies use its common ownership to execute (or even contemplate) a related party transaction, beyond normal operating activities (e.g. corporate transactions such as direct or indirect investments or loans, or similar cash or non-cash support regardless of the form or structure) that is unfavorable to CSC Holdings. The rapid and widening spread of coronavirus, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive shock that is unprecedented in many sectors, regions, and markets. The combined credit effects of these developments are unprecedented. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Moody's believes the cable sector has less exposure than many others, with the expectation that the demand for voice, video and data are unlikely to fall. In fact, Moody's expects greater demand across residential, commercial, governmental, and mobile carriers. Video viewership and engagement is rising sharply, with subscribers spending extraordinary time watching TV for news and entertainment comfort. Moody's also believes cable will see a significant rise in viewership for entertainment programming, and movies with a complete shut-down of US cinemas. Broadband demand is accelerating with increased, more evenly distributed usage driven by remote workers, and a dramatic shift to online commerce and communications. Moody's also expects lower capital spending and some costs with a higher rate of self-installs. Any negative implications — disruptions to direct selling, slower pace of construction, loss of certain programming (sports and new production / content), weakness in small and medium-sized business, lower advertising sales, higher bad debt expense, and disruptions to operations (component supply chains, construction / network upgrades) will be only a partial offset. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Moody's would consider an upgrade if: - Debt/EBITDA (Moody's adjusted) was sustained below 5.0x, and - Free cash flow to debt (Moody's adjusted) was sustained above 5.0% An upgrade would also be considered or contingent on a stable subscriber base, or more conservative financial policy. Moody's would consider a downgrade if: - Debt/EBITDA (Moody's adjusted) is sustained above 6.25x, or - Free cash flow to debt (Moody's adjusted) is sustained below 3% A downgrade could also be considered if the scale of the company declined, liquidity deteriorated, there was a material and unfavorable change in operating performance, or the company adopted a more aggressive financial policy. Headquartered in Long Island City, New York, CSC Holdings, LLC passes 8.8 million homes in 21 states, serving approximately 5 million residential and business customers and 9.7 million primary service units. The company is wholly owned by Altice USA, a public company majority owned and controlled by Patrick Drahi. Revenue for the last twelve months ended March 31, 2020 was approximately $9.8 billion. The principal methodology used in this rating was Pay TV published in December 2018. CSI COMPRESSCO: Holders of 57.9% of Unsecured Notes Accept Offer ---------------------------------------------------------------- CSI Compressco LP and the Partnership's wholly owned subsidiary, CSI Compressco Finance Inc. said Tuesday that, in connection with their previously announced Exchange Offer for the Issuers' 7.250% Senior Unsecured Notes due 2022, at least 57.9% of the Unsecured Notes are expected to be accepted for exchange. The Company has extended the Tender Offer a handful of times -- the latest by 11:59 p.m., New York City time, on June 10, 2020. Eligible Holders that validly tender their Unsecured Notes prior to the deadline will be eligible to receive for each $1,000 principal amount of Unsecured Notes: -- $900 principal amount of new 7.500% Senior Secured First Lien Notes due 2025; or -- as applicable and subject to proration as described in the Offering Memorandum, $975 principal amount of new 7.250% Senior Secured Second Lien Notes due 2027. The Company has entered into a support agreement with certain Eligible Holders representing approximately $147.4 million aggregate principal amount of Unsecured Notes, or 49.8%, pursuant to which the Supporting Holders have agreed to tender all of the Unsecured Notes held by them in the Exchange Offer and not withdraw such Unsecured Notes, subject to certain conditions. Based on the Unsecured Notes tendered to date and the Supporting Holders' commitment to tender their Unsecured Notes, approximately 57.9% of the Unsecured Notes would be tendered and accepted for exchange, comprising sufficient consents to eliminate substantially all restrictive covenants and certain of the default provisions in the indenture governing the Unsecured Notes and resulting in the issuance of $50.0 million of New First Lien Notes and approximately $113.0 million of New Second Lien Notes in the Exchange Offer. As of May 5, 2020, $295.9 million in aggregate principal amount of the Company's 7.25% Senior Notes are outstanding. The 7.25% Senior Notes accrue interest at a rate of 7.25% per annum and are scheduled to mature on August 15, 2022. The New Notes will not be registered under the Securities Act, or any other applicable securities laws and, unless so registered, the New Notes may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof. Accordingly, the New Notes are being offered and issued only (i) to persons reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (ii) to non-"U.S. persons" who are outside the United States (as defined in Regulation S under the Securities Act). About CSI Compressco LP Based in The Woodlands, Texas, CSI Compressco LP (NASDAQ: CCLP) is a provider of compression services and equipment for natural gas and oil production, gathering, artificial lift, transmission, processing, and storage. CSI Compressco's customers comprise a broad base of natural gas and oil exploration and production, midstream, transmission, and storage companies operating throughout many of the onshore producing regions of the United States, as well as in a number of foreign countries, including Mexico, Canada and Argentina. CSI Compressco is managed by CSI Compressco GP Inc., which is an indirect, wholly owned subsidiary of TETRA Technologies, Inc. (NYSE: TTI). At March 31, 2020, the Company had $834 million in total assets and $799 million in total liabilities. DIAMONDBACK INDUSTRIES: Seeks to Hire CR3 Partners, Appoint CRO --------------------------------------------------------------- Diamondback Industries, Inc. and its affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Texas to hire CR3 Partners, LLC and appoint its director, Cade Kennedy, as chief restructuring officer. Mr. Kennedy and his firm will provide these services: a. assist with Debtors' restructuring efforts and completion of bankruptcy-related reporting requirements; b. establish a communication protocol with stakeholders; c. assist in the preparation and review of financial projections and cash flow budgets; d. assist in the preparation and review of reports or filings required by the bankruptcy court or the Office of the United States Trustee, including schedules of assets and liabilities, statements of financial affairs and monthly operating reports; f. assist in the preparation of a plan of reorganization and related documents; g. help Debtors prepare for hearings, testimony, creditor meetings, and create supporting exhibits and motions; h. assist Debtors in developing litigation strategy and related analysis; i. identify liquidity needs, including determining potential debtor-in-possession funding requirements; and j. evaluate executory agreements. The firm will be paid at hourly rates as follows: Partner $695 - $795 Director $450 - $625 Manager & Associates $375 - $450 Mr. Kennedy's hourly rate is $525. Greg Baracato, a partner at CR3 Partners, assured the court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Cade Kennedy CR3 Partners, LLC 13355 Noel Road, Suite 310 Dallas, TX 75240 Phone: (281) 224-9637 Email: cade.kennedy@cr3partners.com About Diamondback Industries Diamondback Industries, Inc. is an ISO 9001 registered company that manufactures tools and ballistics equipment, including eliminators, igniters and power charges. For more information, visit https://diamondbackindustries.com/ On April 21, 2020, Diamondback Industries and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504). Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. Judge Edward L. Morris presides over the cases. Debtors tapped CR3 Partners, LLC as their financial advisor and Stretto as their claims agent. Haynes and Boone, LLP initially handled Debtors' bankruptcy cases. The firm withdrew as counsel on May 22, 2020. DM DUKES: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: DM Dukes & Associates, Inc. 3218 E MLK Austin, TX 78721 Business Description: DM Dukes & Associates is a consulting firm in Austin, Texas. Chapter 11 Petition Date: June 2, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-10658 Judge: Hon. Tony M. Davis Debtor's Counsel: Frank B. Lyon, Esq. FRANK B LYON 3508 Far West Blvd, Ste 170 Austin, TX 78731-3041 Tel: (512) 345-8964 E-mail: chris@franklyon.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Dawnna Dukes, president. The Debtor did not file a list of its 20 largest unsecured creditors together with the petition. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/nwU7gd DM WORLD: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------- The U.S. Trustee for Region 21 on June 2, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 case of DM World Transportation LLC. The committee members are: 1. Premier Trailer Leasing, Inc. Jeff Paschal, Director of Credit 5201 Tennyson Pkwy, Suite 250 Plano, TX 75024 Tel: 817-310-2210 Email: jpaschal@premier-us.net 2. Star Leasing Co. Rob Swan, Controller 4080 Business Park Drive Columbus, OH 43204 Tel: 614-274-1946 Email: rob.swan@starleasing.com 3. Ryder Truck Rental, Inc. Mike S. Mandell, Corporate Collection Manager 11690 NW 105th Street Miami, FL 33178 Tel: 305-500-4417 Email: mike_mandell@ryder.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 DM World Transportation DM World Transportation, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02684) on May 12, 2020. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Debtor is represented by the Law Firm of Shuker & Dorris, P.A. DOMINION DIAMOND: Fitch Withdraws 'D' LT IDR on Bankruptcy ---------------------------------------------------------- Fitch has withdrawn the following Dominion Diamond Holdings LLC and Washington Diamond Investments LLC ratings: Dominion Diamond Holding LLC's 'D' Long-term Issuer Default Rating, Washington Diamond Investments LLC's 'D' Long-term Issuer Default Rating, the 'CCC'/'RR1' rating on Dominion Diamond Holdings LLC's first-lien senior secured facility and the 'C'/'RR4' rating on Dominion Diamond Holdings LLC's second-lien notes. The ratings were withdrawn with the following reason: Bankruptcy Of The Rated Entity, Debt Restructuring or Issue/Tranche Default. KEY RATING DRIVERS Fitch Ratings has withdrawn the Ratings as the entities have filed for insolvency protection under the Companies' Creditors Arrangement Act. Accordingly, Fitch Ratings will no longer provide Ratings or analytical coverage for Dominion Diamond Holdings LLC and Washington Diamond Investments LLC. RATING SENSITIVITIES Rating sensitivities do not apply given the company's filing for solvency protection. 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. 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). Washington Diamond Investments LLC - IDR WD; Withdrawn Dominion Diamond Holdings LLC - LT IDR WD; Withdrawn - Senior secured; LT WD; Withdrawn - Senior secured; LT WD; Withdrawn DYNASTY ACQUISITION: Moody's Cuts CFR to Caa1, Outlook Negative --------------------------------------------------------------- Moody's Investors Service has downgraded ratings of Dynasty Acquisition Co., Inc. and its subsidiary, 1199169 B.C. Unlimited Liability Company, including the corporate family rating to Caa1 from B3 and the first lien credit facility ratings to Caa1 from B2. The ratings outlook is negative. This concludes the review for downgrade that began on April 8, 2020. The downgrades reflect weaker credit metrics than Moody's had previously expected due to the adverse impact on aircraft engine maintenance/repair/overhaul demand in the aftermath of the coronavirus pandemic. Depressed passenger aircraft flight activity of late will persist over the coming year and in turn reduce MRO demand covering about one-third of the company's revenue base, and leverage will subsequently rise instead of materially declining as had been anticipated. According to Moody's lead analyst, Bruce Herskovics, "The coronavirus' impact on passenger aircraft MRO demand will take StandardAero's leverage above 8x in 2020, and the degree of deleveraging possible in 2021 will be limited in its estimation." Herskovics continued, "That said, a very well timed $200 million term debt issuance in early-2020 gave the company much needed liquidity that should enable it to manage through 2021, and potentially beyond, without needing additional capital or covenant amendments -- although room for error will be minimal." The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, low and volatile oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The aerospace and defense sector has been adversely affected by the shock given its indirect exposure to the severely pressured airline industry and its sensitivity to consumer demand and sentiment. StandardAero's weakening credit profile and exposure to passenger airlines has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on StandardAero of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. RATINGS RATIONALE The Caa1 CFR reflects leverage in the low-8x range with only breakeven free cash flow as projected for 2020, against the leading scale, service and platform diversity of StandardAero's engine MRO network, and operational progress achieved in recent quarters resulting in higher quality earnings. Most of the company's revenues stem from military, cargo and other aircraft where the coronavirus' effect on demand has been and should remain modest. StandardAero secured exclusive MRO licenses on several additional engine programs over the past two years and has already covered the initial investment requirements associated with those programs. Notwithstanding high leverage, the rating considers the longer-term revenue visibility that exists in the aircraft engine MRO segment. When passenger aircraft flight activity levels ultimately begin to rise back to somewhat normal course levels, so too should StandardAero's profitability. The rating also benefits from an adequate liquidity profile, recognition that a single MRO facility (Winnipeg) covers the exposed engine programs which could lessen the complexity of undertaking more permanent cost reductions in response to low demand, and the management team's past success with managing rapid business change. With breakeven free cash flow in 2020 and a scheduled term loan amortization requirement of only $24 million annually, cash on-hand and revolver borrowing availability should be enough to support interim operational needs. StandardAero has two revolving credit lines with combined liquidity of about $335 million as of March 31st. Maintenance covenants only apply when borrowing availability thresholds under the revolvers are crossed and the company should be able to circumvent those triggers. The negative ratings outlook reflects that the company's substantial debt load was sized in anticipation of a $4.2 billion revenue base by 2021, and without healthier passenger aircraft MRO demand, revenues will probably remain below $3.8 billion, with deleveraging gradual at best. The risk of a distressed exchange will likely grow as leverage lingers above 8x. The company's historically dramatic working capital swings also add an element of complexity to the forecast. Working capital should decline over the second half of 2020 and thereby help StandardAero achieve breakeven free cash flows this year. But the company has not generated free cash flow since 2016 with non-recurring costs and new contract driven working capital growth. Expecting free cash flow soon may be overly optimistic. The Caa1 rating on the first lien credit facility is on par with the CFR, reflecting the presence of the effectively senior asset-based revolving credit line and the effectively junior unsecured notes. Previously the facility was rated one notch higher than the CFR, but the up-notch has been eliminated based on greater expected loss for the debt class. In Moody's view, should a default occur, the first lien claim would likely recover at the family-wide rate of about 50%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward rating momentum would depend on leverage below 7x, with free cash flow in excess of $100 million and an adequate liquidity profile. Downward rating pressure would mount with a free cash deficit exceeding $50 million, leverage continuing above 8x by the end of 2021, a weaker liquidity profile, or if the potential for a distressed exchange were to rise. The following rating actions were taken: Downgrades: Issuer: Dynasty Acquisition Co., Inc. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa1 (LGD3) from B2 (LGD3) Issuer: 1199169 B.C. Unlimited Liability Company Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa1 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: Dynasty Acquisition Co., Inc. Outlook, Changed To Negative From Rating Under Review The principal methodology used in these ratings was Aerospace and Defense Industry published in March 2018. Dynasty Acquisition Co., Inc. is the acquisition vehicle through which entities of The Carlyle Group acquired StandardAero Aviation Holdings, Inc. in 2019. StandardAero, headquartered in Scottsdale, Arizona, is a leading provider of aircraft engine MRO and aircraft completion and modification services to the commercial, business, military and general aviation industries. Revenues in 2019 were up 24% to $3.7 billion. E.E. HOOD: U.S. Trustee Unable to Appoint Committee --------------------------------------------------- The Office of the U.S. Trustee on June 1 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of E.E. Hood & Sons, Inc. About E.E. Hood & Sons E.E. Hood & Sons, Inc., is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)) based in Von Ormy, Texas. On April 26, 2020, E.E. Hood & Sons filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50804). At the time of the filing, Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Ronald B. King oversees the case. Debtor is represented by the Law Office of H. Anthony Hervol. ENALASYS CORPORATION: Has Until Aug. 31 to File Plan & Disclosure ----------------------------------------------------------------- Judge Mark S. Wallace has entered an order within which debtor Enalasys Corporation will file a Chapter 11 Plan and Disclosure Statement on or before Aug. 31, 2020, and will have a Chapter 11 Plan confirmed before October 31, 2020. The status conference is continued to Sept. 16, 2020, at 9:00 a.m. A copy of the order dated May 14, 2020, is available at https://tinyurl.com/ybrwnv4w from PacerMonitor.com free of charge. About Enalasys Corporation Enalasys Corporation develops, markets and sells heating and air conditioning-related products and services especially those related to environmental matters. Enalasys filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.19-11987) on May 23, 2019, listing under $1 million in both assets and liabilities. The Debtor is represented by Michael Jones, Esq., at M Jones & Associates, PC. ENDEAVOR ENERGY: Fitch Rates New Sr. Unsecured Notes 'BB+/RR2' -------------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR2' rating to Endeavor Energy Resources, L.P.'s proposed senior unsecured note issuance. Proceeds from the transaction will be used to repay revolver borrowings of $175 million and add cash to the balance sheet, improving the liquidity position by approximately $500 million, pro forma for 1Q20. Endeavor's ratings reflect its oil-oriented Permian basin production and proved reserve base and competitive full-cycle, break-even oil price. The high-quality asset base supports FCF neutrality and flat production growth in the low-to-mid $30/bbl range. The rating also reflects the company's credit-conscious financial policy with Fitch forecasted base case leverage metrics below 1.5x, on average, adequate liquidity position and extended maturity profile. Endeavor's deep inventory provides a path to sustainable production growth longer term, as well as a potential contingent liquidity option in a prolonged downturn. Offsetting factors include navigating a challenging oil and gas price environment with minimal hedges, compared to Permian peers, in place to protect development funding and other credit risks related to corporate governance. KEY RATING DRIVERS Large, Quality Permian Footprint: Endeavor's sizeable acreage position, consisting of 376,000 net acres, much of it contiguous, is located in the core of the Midland basin, primarily split between Martin, Midland, and Reagan counties. 1Q20 daily production averaged 174.1 mboed (68% oil and 17% NGLs). The company's liquids-weighted leasehold contains 6,400 gross horizontal drilling locations that support 2+ mile laterals at $40/bbl oil price and a sizeable inventory (over 40 years). The company's inventory of gross drilling locations has additional upside associated with improved oil prices. Ninety-five percent of total gross acreage is held by production, which adds capital flexibility in the current commodity price environment. Drilling Efficiencies Lead to Above Average Netbacks: Recent drilling activity has been concentrated in Martin and Midland counties, with both counties seeing excellent well performance as measured by production volumes and drilling and completion costs. Well costs were down to $725/ft in 1Q20. Drilling efficiencies attributable to integrated multi-well pad design, paired rig strategy and closely-managed pump uptimes manifested in an 18% yoy decrease in average feet drilled per day and a 6% YoY increase in average completed stages per day. Fitch estimates that well-level lease operating expenses decreased from roughly $11.10/boe in Dec. 31, 2018 to $7.15/boe in March 31, 2020. Fitch observed similar improvements in E&P selling, general and administrative and gross interest expense, demonstrating the achievement of cost efficiencies related to operational scale. Because these improvements to margins are derived from identifiable, intentional and sustainable changes to operations, Fitch believes the reported low-cost profile in March 31, 2020 will persist throughout the forecasted rating horizon and support strong unit-economics. Muted Production Growth, FCF Neutrality: Endeavor lowered its capital and production guidance in order to preserve liquidity in the lower commodity price environment. The company guided to production of 135 mboe/d -145 mboe/d, inclusive of price-linked production curtailments and drilling, completion and exploration capital of $660 million (midpoint). Fitch believes the updated drilling program, which assumes one drilling rig for the remainder of the year, should support positive FCF in 2H2020. The company's low-cost structure and higher-quality acreage should help the company regain operational momentum, namely production growth and moderately positive FCF, in an improved oil price environment. Minimal Hedging Policy: In response to lower commodity prices, Endeavor added fixed-price swaps for approximately 28 mbopd at a weighted average price of $32.40/bbl for the remainder of the year. Historically, Endeavor uses hedges minimally outside of oil basis swaps in a limited volume, and does not plan to materially alter or increase its hedge position/strategy. Endeavor's minimal use of hedges introduces additional cash flow volatility relative to peers, the company's strong unit-economics, capital flexibility, and conservative capital structure help offset near-term cash flow and price risks. Conservative Leverage Metrics: Fitch forecasts year end 2020 debt/EBITDA will be 2.4x, under base case assumptions, before price-linked improvements thereafter. Fitch believes the leverage profile will be below 1.5x, on average for the forecast period. Leverage declines may accelerate as price improvements should support moderate production growth given the company's higher quality acreage and competitive cost structure. Fitch believes the leverage profile will drop below 1.0x in the outer years of the forecast. Corporate Governance-Related Risks: Fitch views Endeavor's lack of an independent board and ownership concentration as presenting material risks to the company's credit profile. The company's founder owns Endeavor's GP and the majority of its LP units. Endeavor also engages in related-party transactions with companies owned by the founder. However, the terms of the credit agreement partially mitigate these risks, and Endeavor has moved towards professional management, including making outside hires for key management positions in 2016-17. The credit agreement limits distributions to Mr. Stephens to $60,000 per month plus $4.8 million per year for his life insurance policy plus an amount necessary to cover his taxes. Additional cash distributions may be made if there is no event of default, at least 25% availability on the revolver, net funded debt to EBITDA is below 3.0x, and the aggregate amount of all distributions does not exceed the lesser of $100 million or 10% of the borrowing base. Additionally, all transactions with affiliates must be done on fair and reasonable terms as would be accepted in a comparable arm's length transaction. DERIVATION SUMMARY At roughly 174 mboed as of March 31, 2020, Endeavor is considerably smaller than investment-grade, Permian peers Parsley Energy, Inc. (PE; BBB-/Stable; 197 mboed), WPX Energy, Inc. (WPX, BBB-/Stable, 197 mboed), Diamondback Energy, Inc. (FANG, BBB/Stable, 321 mboed), Concho Resources Inc. (CXO, BBB/Stable, 326 mboed), and Pioneer Natural Resources Co. (PXD, BBB/Stable, 375 mboed). WPX's production profile includes partial Felix impact given the timing of the acquisition close (March 2020). Although 1Q20 production approached investment-grade thresholds, the company guided towards 140 mboepd (midpoint) for the full year 2020 given the material reduced capital program in response to lower commodity prices. Endeavor's Fitch-calculated unhedged netback of$24.2/boe (68% margin) is in line with Permian peers, benefitting from a higher liquids content of Endeavor (85%) and competitive cost structure, despite its smaller size (production expenses of $9.9/boe and interest cost of $1.6/boe). Endeavor has over 40 years of inventory (assuming 8,900 drilling locations and 215 wells spud per year on average) in some of the core areas of the Midland basin. Aside from a few of the largest peers, this stands out against Permian operators which have required or will likely require sizeable (and potentially levering) M&A transactions to maintain operational momentum and long-term production growth. Additionally, the inventory depth provides a path to sustainable growth and a source of contingent liquidity in the current challenging price environment. In terms of leverage, Fitch forecasts Endeavor's YE2020 debt/EBITDA to be approximately 2.4x and debt/flowing bbl to be approximately $14,500/bbl. This is slightly higher than peers Diamondback (debt/EBITDA of 1.9x; debt/flowing bbl of $14,000/bbl), Pioneer (debt/EBITDA of 1.7x; debt/flowing bbl of approximately $11,500/bbl), Parsley (debt/EBITDA of 2.2x; debt/flowing bbl of approximately $12,500/bbl), and Concho (debt/EBITDA of 1.5x; debt/flowing bbl of approximately $13,000/bbl). Fitch forecasts the Permian peer group as a whole to exhibit heightened leverage profiles in 2020 before moderate leverage declines as oil prices recover in line with base case expectations. Although Endeavor compares competitively with other investment-grade rated Permian peers, the company has a minimal hedging policy which exposes the company to significant cash flow variability. Fitch estimates the rest of the peer group to have 2020 oil production hedged around 50%-90%, which will lead to less near-term variability in the current low commodity price environment. Fitch also views Endeavor's private ownership as having a negative impact on the issuer's credit profile, given potential risks related to governance structure. KEY ASSUMPTIONS -- WTI oil price of $32.00/bbl in 2020, $42.00/bbl in 2021, $50.00/bbl in 2022 and $52.00/bbl in 2023. -- Henry Hub natural gas price of $1.85/mcf in 2020, $2.10/mcf in 2021, $2.25/mcf in 2022 and $2.50/mcf in 2023. -- 2020 capital expenditures and production in line with company guidance, price-linked improvements thereafter; -- Modest cash cost improvement in 2020; -- Service company EBITDA of $15 million per year and cash flow from royalty interests of $20 million per year; -- Distributions of $5.5 million per year. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Production approaching 175 mboe/d or higher; -- Maintenance of mid-cycle Total Debt with Equity Credit/Operating EBITDA below 2.0x and/or FFO-adjusted leverage under 2.3x on a sustained basis; -- Steps taken to further moderate corporate governance-related risks. Fitch notes that positive rating actions are possible in a more supportive oil & gas price environment if the company demonstrates an ability to execute its operational plans, while maintaining financial flexibility. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Material deviation from management's target leverage ratio resulting in a mid-cycle Total Debt with Equity; -- Credit/Operating EBITDA of over 3.0x and/or FFO-adjusted leverage greater than 3.3x on a sustained basis; -- Pursuit of a growth-oriented capital deployment strategy in a way that results in a substantially weaker liquidity position and/or leverage exceeding the threshold stated above; -- Evidence of heighted governance risk that could negatively impact the credit profile. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Cash and cash equivalents were $64 million as of March 31, 2020. Endeavor's primary source of liquidity is the reserve-based revolving credit facility. As of March 31, 2020, the company has $175 million outstanding under the RBL and an elected commitment of $1.5 billion. Redeterminations are semi-annual. Pro-forma for the bond issuance, Endeavor will have approximately $380 million of cash and no borrowings on the RBL, subject to market conditions. Cash on hand will continue to fund FCF deficits in 2Q20. Extended Maturity Profile: The maturity profile is clear until Endeavor's $500 million senior unsecured notes mature in 2025. The company has another $500 million due in 2026 and $1.0 billion due in 2028. 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. Endeavor has an ESG Relevance Score of 4 for Governance Structure as the founder of the company, Mr. Autry Stephens, owns entirely the general partner (Endeavor Petroleum, LLC) as well as the majority of the limited partner units of Endeavor. Additionally, the company does not have an independent board of directors and Mr. Stephens has the power to select all six members of the board. Fitch views issues related to Governance Structure to have a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. 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. ENDEAVOR ENERGY: Moody's Rates New $500MM Unsecured Notes 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Endeavor Energy Resources, L.P.'s proposed $500 million senior unsecured notes issue due 2025. Proceeds from the offering will be used to repay borrowings under the company's revolving credit facility and for general corporate purposes. None of Endeavor's other ratings are affected by the note's issuance. The outlook is stable. Assignments: Issuer: Endeavor Energy Resources, L.P. Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD4) LGD Adjustment: Issuer: Endeavor Energy Resources, L.P. Senior Unsecured Regular Bond/Debenture, Adjusted to LGD4 from LGD5 RATINGS RATIONALE Endeavor's senior unsecured notes, including the proposed issue, are rated B1, one notch below the CFR. The rating on the notes reflects their subordinated position to Endeavor's $1.5 billion elected committed senior secured revolving credit facility. Endeavor's Ba3 CFR reflects the company's large inventory of acreage in highly productive areas of the Midland Basin and relatively strong financial leverage and cash flow metrics. While the company has sharply reduced its drilling program in 2020 due to low oil prices, average production for the year should still increase by 10%-15% over 2019 levels. Endeavor's large acreage position in the core of the basin is considerably bigger than most of its similarly rated peers. The company is likely to modestly outspend cash flow in 2020, a significant improvement over the large cash flow deficits in recent years driven by aggressive spending. Endeavor's high margin oil-weighted production mix has allowed the company to maintain low leverage, despite the outspending. Endeavor is limited by its single-basin concentration in the Permian's Midland Basin and its history of habitually outspending cash flow. The company has hedged a modest amount of 2020 oil production, but a large majority of its production will be fully exposed to low oil prices that are likely to persist into 2021. Moody's expects Endeavor to maintain good liquidity through mid-2021. At March 31, 2020 and pro forma for the notes issue, the company essentially had full availability under its revolving credit facility. The revolver has a $1.7 billion borrowing base, although the company has elected a commitment level of $1.5 billion. After fully paying down the revolver with proceeds from the proposed notes, Endeavor will have more than $350 million of cash on its balance sheet. Based on its substantially reduced capital spending program and the benefit of new production brought on in the first quarter, Endeavor will generate free cash flow in the second half of 2020. The financial covenants under Endeavor's revolving credit agreement include a minimum current ratio of 1.0x and a maximum net funded debt/EBITDA ratio of 4.0x, which Moody's expects Endeavor will remain in compliance through early 2021. Endeavor's revolver expires in 2023 and the company faces no debt maturities until the proposed notes mature in 2025. The stable outlook reflects Endeavor's comparatively high cash margins and low leverage which should allow the company to navigate the current environment of very low commodity prices without a significant leverage increase. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Endeavor's ratings may be upgraded if the company's retained cash flow to debt ratio reaches 50% while delivering solid capital returns, with a leveraged full-cycle ratio (LFCR) above 1.5x. The company must also reduce cash flow outspending below pre-2020 levels in a normalized price environment and maintain good liquidity. The ratings may be downgraded if Endeavor's RCF to debt ratio approaches 30%, liquidity weakens or its LFCR approaches 1x. Midland, Texas-based Endeavor is an independent exploration and production (E&P) company with assets concentrated in the Permian Basin. The company holds a core net acreage position of approximately 376,000 acres in the Midland Basin. At year-end 2019 Endeavor had 656 million boe of proved reserves of which 361 million boe was proved developed. Founded in 2000, Endeavor is privately-held and wholly owned by Autry Stephens and family. The principal methodology used in this rating these ratings was Independent Exploration and Production Industry published in May 2017. FARR BUILDERS: Unsec to be Paid by Property Sale,Insurance Proceeds ------------------------------------------------------------------- Farr Builders, LLC, filed with the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, a Disclosure Statement for Plan of Reorganization dated May 15, 2020. Adrian Garcia and Jackie Garcia were operating the business before the case was filed, throughout the case, and will operate it after filing. Since filing the case they have been under tight financial reporting controls by the bonding companies who hold bonds for most of the projects that were ongoing since filing. All postpetition sub-contractors have been paid and funds allocated for specific jobs have been used to complete the jobs. Going forward the Debtor has been selected as a level 5 contractor for the government and will have a simplified bidding process. Farr is also working with its bonding agent to revive the bond rating in order to qualify for a project in El Paso that will last 5 years. Class I General Unsecured Claims will be paid a pro rata share from the sale of 3 real properties located at 2243 SE Loop 410; 939 Steves; and 319 Probandt. Class II General Unsecured Claims will be paid exclusively from insurance proceeds. Class III General Unsecured Claims will be paid from receivables earned prepetition or postpetition from work guaranteed by bonding companies. Source of payments will be future bonded contracts with the government and non-bonded construction contracts. The Debtor owns 6 pieces of real property. One is secured by a lien in favor of Frost Bank. Two have underlying liens and three are free and clear. The one secured by Frost Bank will not be sold. One is a small strip of land that is not saleable and will not be sold. All others will be sold. The Plan proponent’s financial projections show that the Debtor will have an aggregate annual average cash flow after paying operating expenses and post-confirmation taxes, of $688,884. The final Plan payment on the unsecured class is expected to be paid within 6 months due to the sale of real property. A full-text copy of the Disclosure Statement dated May 15, 2020, is available at https://tinyurl.com/ycuke8ft from PacerMonitor at no charge. The Debtor is represented by Heidi McLeod. About Farr Builders Farr Builders, LLC, a general contractor based in San Antonio, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50324) on Feb. 7, 2020. At the time of the filing, the Debtor disclosed $3,792,881 in assets and $2,345,269 in liabilities. Judge Ronald B. King oversees the case. Heidi McLeod Law Office is the Debtor's bankruptcy counsel. FATSPI & SON: Unsecureds Owed Less than $10K to Recover 2% in Plan ------------------------------------------------------------------ Fatspi & Son, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Plan of Reorganization and a Disclosure Statement on May 15, 2020. Class 5 Allowed Administrative Convenience Class of General Unsecured Claims are impaired and entitled to vote. This class consists of general unsecured creditors with claims less than $10,000 or to any claimant who agrees to reduce its claim to less than $10,000. Such claimant shall be entitled to 2% of its claim. Such payment shall be made on or before the 30th day after the effective date. Class 6 Allowed General Unsecured Claims are impaired and entitled to vote. Each holder of an Allowed General Unsecured Claim in this Class shall receive, in full and final satisfaction, settlement, release, extinguishment and discharge of its respective as follows(i) 1% of its allowed claim amount to be paid over four years in equal monthly installments (ii) payments shall be made monthly (iii) no interest on its claim; and (iv) no prepayment penalty. The Class 7 equity interest holder holder, Jean Dubuque and Elotte Michele, will retain their equity interest in the Debtor. On the effective date, each holder of an Allowed Equity Interest in the Debtor shall retain their Equity Interest in the Debtor and will receive no Distribution under the Plan on account of such Equity Interests prior to all payments being made under the Plan. Payments and distributions under the Plan will be funded by the continued operation of the Debtor, rental of the units, with the Debtor collecting rental income. A full-text copy of the Disclosure Statement dated May 15, 2020, is available at https://tinyurl.com/ybhveoq5 from PacerMonitor at no charge. The Debtor is represented by: Nadine V. White-Boyd, Esq. White-Boyd Law, P.A. 1818 S. Australian Avenue, Suite 406 West Palm Beach, FL 33409 Tel: 561-508-3042 E-mail: nvwboyd@aol.com E-mail: Nadine@wblawpa.com About Fatspi & Son Fatspi & Son Inc. filed a voluntary Chapter 7 petition (Bankr. S.D. Fla. Case No. 19-26913) on Dec. 19, 2019. On March 6, 2020, the case was converted to one under Chapter 11. Judge Mindy A. Mora oversees the case. White-Boyd Law, PA is Debtor's bankruptcy Counsel. FLOYD'S INSURANCE: Seeks to Hire Hendren Redwine as Legal Counsel ----------------------------------------------------------------- Floyd's Insurance Agency Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to hire Hendren, Redwine & Malone, PLLC as its legal counsel. The firm's services will include legal advice regarding Debtor's powers and duties under the Bankruptcy Code, analysis of Debtor's affairs, negotiations with creditors, and the preparation of a reorganization plan. Hendren received from Debtor the sum of $20,000. Hendren does not represent any interest materially adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached through: Jason L. Hendren, Esq. Hendren, Redwine & Malone, PLLC 4600 Marriott Drive, Suite 150 Raleigh, NC 27612 Tel: (919) 420-7867 Email: jhendren@hendrenmalone.com About Floyd's Insurance Agency Whiteville, N.C.-based Floyd's Insurance Agency Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 20-01982) on May 20, 2020. At the time of the filing, the Debtor was estimated to have assets between $1 million and $10 million and liabilities between $10 million and $50 million. Judge Joseph N. Callaway oversees the case. Hendren, Redwine & Malone, PLLC is the Debtor's legal counsel. FOXWOOD HILLS: Taps American Legal as Claims Agent -------------------------------------------------- Foxwood Hills Property Owners Association, Inc. received approval from the U.S. Bankruptcy Court for the District of South Carolina to hire American Legal Claim Services, LLC as its claims and noticing agent. The firm will oversee the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in Debtor's Chapter 11 case. It will also provide balloting services in connection with the solicitation process for Debtor's bankruptcy plan. American Legal received an advance retainer in the amount of $7,500. Jeffrey Pirrung, managing director of American Legal, disclosed in court filings that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey Pirrung American Legal Claims Services, LLC 8021 Philips Highway, STE 1 Jacksonville, FL 32265 About Foxwood Hills Property Owners Association Foxwood Hills Property Owners Association, Inc. is an organization of owners of Foxwood Hills -- a lake front community of primary and vacation homes nestled in the northwest corner of Oconee County, S.C. Foxwood Hills Property Owners Association filed its voluntary petition under CHapter 11 of the Bankruptcy Code (Bankr. D.S.C. CAse No. 20-02092) on May 8, 2020. In the petition signed by Gregory B. Sheperd, president, Debtor disclosed $4,253,427 in assets and $219,780 in liabilities. Judge Helen E. Burris oversees the case. Julio E. Mendoza, Jr., Esq. at Nexsen Pruet, LLC, is Debtor's legal counsel. FOXWOOD HILLS: Taps Nexsen Pruet as Legal Counsel ------------------------------------------------- Foxwood Hills Property Owners Association, Inc. received approval from the U.S. Bankruptcy Court for the District of South Carolina to hire Nexsen Pruet, LLC as its legal counsel. The firm's services will include: a. advising Debtor of its rights, powers and duties; b. attending meetings with Debtor's representatives and hearings before the court; c. assisting other bankruptcy professionals in the investigation of the acts, conduct, assets, liabilities and financial condition of Debtor and any other matters relevant to the case or to the formulation of a Chapter 11 plan; d. reviewing and investigating the validity, extent and priority of any secured claims against Debtor's estate, and reviewing and investigating the acts and conduct of such secured creditors and other parties to determine whether any causes of action may exist; e. preparing court documents and reviewing all financial reports to be filed; and f. representing Debtor in adversary proceedings. The firm's attorneys and paralegals will be paid at hourly rates as follows: Julio E. Mendoza, Jr. $515 Edward G. Menzie $420 Kyle A. Brannon $325 Janette P. Carter (Paralegal) $220 Julio Mendoza Jr., Esq., a partner at Nexsen Pruet, assured the court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Nexsen Pruet can be reached at: Julio E. Mendoza, Jr., Esq. Nexsen Pruet, LLC 1230 Main Street, Suite 700 (29201) Post Office Drawer 2426 Columbia, SC 29202 Telephone: 803-540-2026 Email: rmendoza@nexsenpruet.com About Foxwood Hills Property Owners Association Foxwood Hills Property Owners Association, Inc. is an organization of owners of Foxwood Hills -- a lake front community of primary and vacation homes nestled in the northwest corner of Oconee County, S.C. Foxwood Hills Property Owners Association filed its voluntary petition under CHapter 11 of the Bankruptcy Code (Bankr. D.S.C. CAse No. 20-02092) on May 8, 2020. In the petition signed by Gregory B. Sheperd, president, Debtor disclosed $4,253,427 in assets and $219,780 in liabilities. Judge Helen E. Burris oversees the case. Julio E. Mendoza, Jr., Esq. at Nexsen Pruet, LLC, is Debtor's legal counsel. FREEDOM OIL: Seeks to Hire Okin Adams as Legal Counsel ------------------------------------------------------ Freedom Oil & Gas, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Okin Adams LLP as its legal counsel. The firm's services will include: (a) advising Freedom Oil and its affiliated debtors regarding their rights, duties and powers under the Bankruptcy Code; (b) assisting Debtors in their consultations relative to the administration of their Chapter 11 cases; (c) analyzing claims and negotiating with creditors; (d) assisting Debtors in the analysis of and negotiations with any third-party concerning matters relating to, among other things, a sale of Debtors' assets and the terms of a plan of reorganization; (e) representing Debtors at hearings and other proceedings; (f) reviewing and analyzing applications, orders, statements of operations and schedules filed with the court; and (g) assisting Debtors in preparing pleadings and applications as may be necessary in furtherance of Debtors' interests and objectives. The firm's attorneys charge between $250 and $575 per hour for their services. The rates for paralegals and other support staff range from $110 to $150 per hour. Okin Adams received the sum of $100,000 as retainer. Okin Adams is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Matthew S. Okin, Esq. Ryan A. O'Connor, Esq. Okin Adams LLP 1113 Vine St., Suite 240 Houston, Texas 77002 Tel: 713.228.4100 Fax: 888.865.2118 Email: mokin@okinadams.com Email: roconnor@okinadams.com About Freedom Oil & Gas Freedom Oil & Gas, Inc. operates as an oil and gas exploration and production company. Based in Houston, Texas, Freedom Oil has established an acreage position in the oil-rich portion of the Eagle Ford shale in Dimmitt County. On May 11, 2020, Freedom Oil & Gas and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32582). At the time of the filing, Freedom Oil & Gas, Freedom Oil & Gas USA, Inc., Freedom Eagle Ford, Inc. and Freedom Production, Inc. each had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Maverick Drilling Company, Inc. and Maverick Production Company, Inc. had estimated assets and liabilities of less than $50,000 at the time of the filing. Judge David R. Jones oversees the cases. Okin Adams LLP is Debtors' bankruptcy counsel. FRONTIER COMMUNICATIONS: $37.7M Bonuses for Execs Okayed by Judge ----------------------------------------------------------------- Mike Robuck, writing for Fierce Telecom, reports that U.S. Bankruptcy Judge Robert Drain approved bonuses for executives of Frontier Communications as part of its Chapter 11 bankruptcy filing. On May 22, 2020, Judge Drain signed off a $37.7 million in bonuses for Frontier Communications' executives as the telco works its way through Chapter 11 bankruptcy. According to a story by Law360, Judge Drain approved the bonuses because they appeared to be in line with industry standards, and were not targeted towards company insiders. The employee bonus plan includes paying up to $14.7 million in retention bonuses, up to $21 million in incentive bonuses based on the company's fiscal performance, and a $2 million reserve that would be set aside for newly hired employees or employees not currently covered. Law360 said that Frontier's bonus program would also pay middle management employees that the company considers vital to its operations between $30,000 and $233,000 each. Frontier's counsel, Stephen Hessler, said the bankruptcy filing and the coronavirus pandemic made the bonuses even more important as Frontier seeks to retain key employees. During a telephone hearing, Judge Drain approved the proposed bonus plan over an initial objection from the U.S. Trustee's Office after hearing two creditor groups had dropped their objections once Frontier agreed to adjust the payment schedule, according to Law360. About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020, to seek approval of a plan that would cut debt by $10 billion. Frontier announced it had entered into a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of its $11 billion outstanding unsecured bonds. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. GAINESVILLE ROAD: Seeks to Hire Dion R. Hancock as Legal Counsel ---------------------------------------------------------------- Gainesville Road Community Trust seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Dion R. Hancock, P.A., as its legal counsel. The firm's services will include advising Debtor of its powers and duties under the Bankruptcy Code and negotiating with its creditors in the preparation of a Chapter 11 plan. The firm will be paid at hourly rates as follows: Dion Hancock, Esq. $350 Paralegal $150 Dion R. Hancock does not represent any interest adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached through: Dion Hancock, Esq. Dion R. Hancock, P.A. 405 6th Street South, 2nd Floor St. Petersburg, FL 33701 Phone: (727) 821-1386 About Gainesville Road Community Trust Gainesville Road Community Trust sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03888) on May 19, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Dion R. Hancock, P.A., is the Debtor's legal counsel. H-FOOD HOLDINGS: Moody's Rates New $100MM 1st Lien Term Loan 'B2' ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to H-Food Holdings, LLC's proposed $100 million senior secured first lien term loan due 2025. Concurrently, Moody's affirmed the company's B3 Corporate Family Rating and B3-PD Probability of Default Rating. In addition, Moody's also affirmed the B2 (LGD3) ratings for the company's $225 million first lien secured revolving credit facility and $1.6 billion senior secured first lien term loan. Lastly, Moody's also affirmed the Caa2 (LGD6) rating for the company's $350 million senior unsecured global notes. The rating outlook is stable. Hearthside is seeking a new senior secured first lien term loan of $100 million that is pari passu with existing senior secured first lien debt. Proceeds from the new term loan will be used to repay approximately $97 million of outstanding borrowings under the company's $225 million first lien secured revolving credit facility and for general corporate purposes. Hearthside used the revolver borrowings to help fund a $130 million growth capital expenditures program that will expand its facilities and allow Hearthside to accommodate newly awarded contracts from its customers. The borrowings increase Hearthside's already high leverage and cash interest. The rating affirmations with a stable outlook reflects Moody's expectations that Hearthside will reduce leveraging through anticipated incremental EBITDA growth in 2021, mainly attributable to its $130 million growth capital expenditure program. Moody's also expects Hearthside to maintain good liquidity from roughly $94 million of cash and an undrawn revolver, and that the company will generate positive free cash flow in 2021 once the significant growth spending subsides and realization of earnings from the investments. Moody's took the following rating actions on H-Food Holdings, LLC: - Corporate Family Rating, affirmed at B3; - Probability of Default Rating, affirmed at B3-PD; - Proposed $100 million senior secured first lien term loan maturing 2025, assigned a B2 (LGD3) - First lien senior secured revolving credit facility expiring 2023, affirmed at B2 (LGD3); - Senior secured first lien term loan maturing 2025, affirmed at B2 (LGD3) - Senior unsecured global notes maturing 2026, affirmed at Caa2 (LGD6) Outlook Actions: - Outlook remains stable RATINGS RATIONALE Hearthside's B3 Corporate Family Rating reflects its high financial leverage at over 8x, the risk in achieving targeted profitability from its capital expansion program during a time of low visibility due to the coronavirus pandemic, and modest customer concentration. Moody's expects leverage to fall below 7x within 18-24 months, mainly as a result of incremental EBITDA growth from the company's $130 million growth capital investments. The rating also reflects event risk, such as additional leveraged acquisitions and aggressive shareholder distributions, given the company's financial sponsor ownership. At the same time, the rating incorporates the company's good position as a contract manufacturer and packager of food products. The company has longstanding relationships with leading US food companies and limited commodity exposure due to pass-through cost arrangements. This helps limit cash flow and earnings volatility. The company has good liquidity. Hearthside's revenue declined in the first quarter despite strong demand experienced by the company's packaged food customers because of pantry loading and greater at-home food consumption related to the coronavirus. Management attributed the weakness to a decline in fresh sandwich sales as well as a decline in functional bar sales, which are sold at airports and other on-the-go locations, and were thus impacted by reduced travel and commuting due to the coronavirus pandemic. In Fiscal 2020, Moody's expects Hearthside's revenues to be relatively flat year over year, as weakness in fresh sandwiches and functionals bars is offset by strength in Hearthside's other packaged food categories. 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 store 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 consumer-packaged food sector has been somewhat affected by the shock given its sensitivity to consumer demand and sentiment including a change in consumer purchasing habits and volatility in price. More specifically, there could be shifts in market sentiment during these unprecedented operating conditions. Other EGS considerations include corporate governance risk associated with an aggressive financial policy evidenced by high financial leverage. The stable rating outlook reflects Moody's expectation that Hearthside's financial leverage will remain high with incremental debt to fund a sizable capital program in 2020. The stable outlook also reflects Moody's view that the company will maintain good liquidity, generate relatively stable revenue in 2020, and that the new investments will lead to incremental earnings, lower leverage and positive free cash flow in 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company maintains stable operating performance, and reduces financial leverage such that debt to EBITDA approaches 6x. Ratings could be downgraded if operating performance weakens, financial policy turns more aggressive or liquidity deteriorates. Ratings could also be downgraded if interest coverage measured as EBITA to interest approaches 1.0x, or the company does not generate positive free cash flow. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. Hearthside is a contract manufacturer and packager of packaged food products in North America and to a lesser extent Europe. The company supplies companies such as General Mills, Kellogg's, Kraft Heinz, PepsiCo, and Mondelez. Revenue is approximately $3.1 billion. Hearthside is owned by an investment group led by Charlesbank Capital Partners and Partners Group following an April 2018 leveraged buyout. HUGO BOSS: CEO Expects Very Difficult Second Quarter ---------------------------------------------------- Reuters report that retailer Hugo Boss anticipates recovery in business in the third quarter of 2020, the earliest, due to consumer caution and store closures during the COVID-10 pandemic, as confirmed by their CEO on May 27, 2020. "We must prepare for a very difficult second quarter," Mark Langer told the company's annual general meeting held online. Langer said conditions were particularly tough in Europe and America which account for about 85 per cent of sales and which are still hit by store closures and restrained consumption patterns. "We only expect a noticeable but gradual improvement in the market environment from the third quarter at the earliest," he said. Hugo Boss warned earlier in May 2020 to expect second quarter sales to fall by at least 50% even though all its stores have reopened in China and are gradually reopening elsewhere. About Hugo Boss Hugo Boss AG, often styled as BOSS, is a German luxury fashion house headquartered in Metzingen, Baden-Württemberg. Hugo Boss AG, together with its subsidiaries, develops, markets, and distributes fashion and accessories for men and women worldwide. Founded in 1924, Hugo Boss is one of the biggest German clothing companies, with global sales of EUR2.9 billion in 2019. HUGO (ETR:BOSS) is traded on XETRA Stock Exchange. It employs 14,000 people. INMARKETING GROUP: June 23 Plan Confirmation Hearing Set -------------------------------------------------------- Inmarketing Group, Inc., d/b/a IN Marketing Group, filed with the U.S. Bankruptcy Court for the District of New Jersey a motion for entry of an order approving the Disclosure Statement for the Plan of Reorganization. On May 14, 2020, Judge Stacey L. Meisel granted the motion and ordered that: * The Disclosure Statement is approved as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. * June 23, 2020, at 11:00 a.m. before the Honorable Stacey L. Meisel, in Courtroom 3A of the United States Bankruptcy Court for the District of New Jersey, 50 Walnut Street, 3rd Floor, Newark, New Jersey 07102 is the confirmation hearing. * June 16, 2020, at 12:00 p.m. is fixed as the last day to file all objections to confirmation of the Plan. * June 19, 2020, at 12:00 p.m. is fixed as the last day for the Debtor to file a consolidated reply to any timely-filed Plan Objections. * The Debtor is authorized to prepare and distribute other or modified forms substantially conforming with the Ballot as the Debtor deems necessary due to further refinement of the balloting process and/or modifications to the Plan. * The Debtor is authorized to solicit, receive, and tabulate votes to accept the Plan in accordance with the instructions, rules, and procedures set forth in the Disclosure Statement, which are hereby approved in their entirety. A copy of the order dated May 14, 2020, is available at https://tinyurl.com/y9gcbex2 from PacerMonitor.com free of charge. Counsel for Debtor: WILK AUSLANDER LLP 1515 Broadway, 43rd Floor New York, New York 10036 Telephone: (212) 981-2300 Eric J. Snyder, Esq. Eloy A. Peral, Esq. E-mail: esnyder@wilkauslander.com eperal@wilkauslander.com - and - SHAPIRO, CROLAND, REISER, APFEL & DI IORIO LLP 411 Hackensack Avenue Hackensack, New Jersey 07601 Telephone: (201) 897-2411 John P. Di Iorio, Esq. E-mail: jdiiorio@shapiro-croland.com About IN Marketing Group IN Marketing Group -- http://www.inmarketinggroup.com/-- is an advertising agency that helps companies grow by providing corporate gifts and customized incentive programs to their clients. It helps businesses penetrate new markets, reward their loyal customers and upsell to existing clients while retaining their top sales performers. IN Marketing Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 19-25754) on Aug. 14, 2019. In the petition signed by Alan Traiger, president, the Debtor disclosed $2,206,521 in assets and $4,513,541 in liabilities. The case is assigned to Judge Stacey L. Meisel. The Debtor is represented by Shapiro Croland Reiser Apfel & Di Iorio, LLP and Wilk Auslander LLP. The Office of the U.S. Trustee appointed a committee of unsecured creditors in the Debtor's bankruptcy case. J.B. POINDEXTER: Moody's Alters Outlook on B1 CFR to Negative ------------------------------------------------------------- Moody's Investors Service confirmed the ratings of J.B. Poindexter & Co., Inc., including the corporate family rating at B1, the Probability of Default Rating at B1-PD and the senior unsecured rating at B2. The outlook is negative. This action concludes the review for downgrade initiated on March 26, 2020. The rating confirmations reflect Moody's view that J.B. Poindexter's sizable cash balance and particularly strong orderbook for step-vans in its Morgan Olson division position the company to weather recessionary conditions through 2020, as well as fund necessary investments to support expected growth at Morgan Olson. Moody's expects deterioration in the company's credit metrics in 2020, including debt/EBITDA above 5x and moderately negative free cash flow, before improving in 2021 with leverage returning to the mid-3x range and positive free cash flow generation. The following rating actions were taken: Confirmations: Issuer: J.B. Poindexter & Co., Inc. Corporate Family Rating, Confirmed at B1 Probability of Default Rating, Confirmed at B1-PD Senior Unsecured Regular Bond/Debenture, Confirmed at B2 (LGD4) Outlook Actions: Issuer: J.B. Poindexter & Co., Inc. Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE J.B. Poindexter's ratings, including the B1 CFR, reflect the moderate scale of the company's various businesses, large customer concentrations with high variability around annual fleet truck orders and exposure to cyclical end-markets. The company has a strong market share in the majority of its business lines, a national footprint, and long-standing relationships with its key customers. Moody's expects J.B. Poindexter's credit metrics to weaken considerably in 2020 following a strong 2019 as the expected downturn in the truck cycle combined with recessionary conditions will lead to a revenue decline near 20%. Revenue in the company's largest division, Morgan, will be down substantially as its primary customers drastically cut fleet investment purchases during the year. However, Moody's expects revenues at the company's next largest division, Morgan Olson, to increase significantly due to strong demand for its step-van vehicles used by last-mile delivery companies. Materially weighing on margins will be supply constraints of medium-duty chassis in both divisions, as well as other areas of J.B. Poindexter. Moody's expects the company's EBITA margin to fall below 5% in 2020 (from 8.5% in 2019) before returning to near 6% in 2021. Moody's expects J.B. Poindexter to maintain adequate liquidity into 2021. The company's liquidity position is primarily supported by $164 million in cash at end of March 2020 (although Moody's expects a sizeable cash burn during Q2 2020) and full availability of its $100 million asset-based lending facility due 2022. Free cash flow is expected to be negative in 2020 with a cash burn of approximately $20 million upon lower earnings and capital investments required to begin manufacturing at its new Morgan Olson facility to meet high demand levels for that business. Moody's expects the company to generate moderately positive free cash flow in 2021 assuming growth returns in the company's Morgan division. J.B. Poindexter is historically a good free cash flow generator. The negative outlook reflects Moody's view that the expected return to growth in 2021 for many of J.B. Poindexter's businesses may not materialize, thus leading to a prolonged downturn that could pressure earnings and strain the company's liquidity position greater than currently anticipated. ESG CONSIDERATIONS As a niche supplier, Moody's views environmental risk, specifically carbon transition risk which is high for the broader sector, to be manageable for J.B. Poindexter given its product focus primarily on truck bodies. In terms of corporate governance, Moody's views the full equity ownership by CEO John Poindexter to be a risk. Mr. Poindexter has been instrumental in developing the company's businesses and customer relationships over many decades, and thus, a high level of key man risk exists. As well, uncertainty over any succession transition remains. Further, sole ownership creates relative uncertainty regarding company financial policy. J.B. Poindexter has been acquisitive at times to expand its businesses and geographic reach, and Moody's expects this approach to continue in the near term. The company, though, operates on a decentralized basis with individual division presidents, which helps diversify certain decision-making at the operating level. J.B. Poindexter itself is a collection of individual businesses. FACTORS THAT COULD LEAD TO A DOWNGRADE OR UPGRADE OF THE RATINGS The ratings could be downgraded if Moody's expects that debt/EBITDA leverage will be sustained above 4.5x, EBITA/interest expense below 2x or if liquidity deteriorates through a material reduction in cash or expectations of cash flow that is weaker than expected from expansionary capital spending or higher than anticipated warranty outlays. An adoption of more aggressive financial policies, including owner distributions, could pressure the ratings. An upgrade of the ratings is unlikely in the near-term. Over time, the ratings could be upgraded should J.B. Poindexter maintain debt/EBITDA below 3x and EBITA/interest above 3x on a sustained basis through cyclical periods in its end markets. J.B. Poindexter would also need to maintain a good liquidity profile and consistently address its debt maturities well in advance of due dates. The principal methodology used in these ratings was Automotive Supplier Methodology published in January 2020.6.3 J.B. Poindexter & Co., Inc. manufactures commercial truck bodies for medium-duty trucks, pickup truck caps and tonneau covers, truck bodies for walk-in step vans, service utility trucks, commercial vehicle shelving and storage systems, funeral coaches and limousines, and provides contract manufacturing services for precision metal parts and machining and casting services. Headquartered in Houston, Texas, the privately held company generated approximately $1.6 billion in revenue for the twelve-month period ending March 31, 2020. JONATHAN R. SORELLE: MIHI Taps Earnhart & Associates as Consultant ------------------------------------------------------------------ The Minimally Invasive Hand Institute, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Earnhart & Associates as its healthcare licensing consultant. Earnhart & Associates' services will include assisting MIHI in obtaining the healthcare licenses necessary to operate its new ambulatory surgery center, including state licensure and Medicare certifications. The firm will receive the sum of $150,000 from MIHI, a Las Vegas-based company whose Chapter 11 case is jointly administered with that of Jonathan R. Sorelle, M.D., PLLC. Stephen Earnhart, chief executive officer of Earnhart & Associates, disclosed in court filings that he and other members of his firm neither hold nor represent any interest adverse to MIHI and its bankruptcy estate. The firm can be reached through: Stephen W. Earnhart Earnhart & Associates 5114 Balcones Woods Drive St. 307-203 Austin, TX 78759 Phone: (512) 320-8580 Email: info@earnhart.com About Jonathan R. Sorelle M.D. Jonathan R. Sorelle, M.D., PLLC, The Minimally Invasive Hand Institute, LLC and Jonathan R. Sorelle, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case Nos. 19-17870, 19-17871 and 19-17872, respectively) on Dec. 12, 2019. The Debtors each listed less than $1 million in both assets and liabilities. The Debtors tapped Brownstein Hyatt Farber Schreck, LLP as their legal counsel, and Inouye CPA LLC as their accountant. KING FARM: Fitch Cuts $48.9MM Series 2017A-1 Bonds to 'B-' ---------------------------------------------------------- Fitch Ratings has downgraded the ratings on the following bonds issued by the Mayor and Council of Rockville, MD to 'B-' from 'BB-' on behalf of King Farm Presbyterian Retirement Community, Inc. dba Ingleside at King Farm: -- $48.9 million economic development refunding revenue bonds, series 2017A-1; -- $23.8 million economic development refunding revenue bonds, series 2017A-2; -- $84.8 million economic development revenue bonds, series 2017B; -- $14.8 million tax-exempt mandatory paydown securities, series 2017C-1 (TEMPS-85); -- $24.5 million tax-exempt mandatory paydown securities, series 2017C-2 (TEMPS-70); -- $43.5 million tax-exempt mandatory paydown securities, series 2017C-3 (TEMPS-45). Fitch removes the Rating Watch Negative on the rating. The Rating Outlook is Negative. SECURITY The bonds are secured by a pledge of and lien on the obligated group's gross revenues, a mortgage lien on the community, and a debt service reserve. KEY RATING DRIVERS Further Drop in Unrestricted Liquidity: The downgrade to 'B-' reflects a very thin $6.6 million in unrestricted cash and investments as of April 30, 2020, which equated to 77 days cash on hand and 3.8% cash to debt (this figure includes approximately $42 million in short-term debt). The $6.6 million represents a 40% drop in unrestricted liquidity since YE 2019, when IKF had $11 million in unrestricted cash and investments. The main stressor on liquidity remains entrance fee refunds to the estates of skilled nursing residents who have aged through the continuum. For many of these residents, IKF had resold their independent living (IL) apartments when they transitioned into skilled nursing. As a result, these refunds are being paid from the balance sheet without an associated apartment resale to offset the outflow of cash. Additional Liquidity Pressure Expected: IKF's unrestricted liquidity is expected to drop into the $2 million-$3 million range (this includes $1.6 million of federal PPP funds that have been received but not yet booked) over the next two to four months due to an additional $3.5 million of these refunds that are expected to be paid out. Further pressure is coming from the 'stay at home' coronavirus order in Montgomery County, which has essentially shut down IKF's apartment sales, even as the demand and interest in units have remained stable. IKF is in negotiations to secure a $5 million line of credit, which would help ease the liquidity strain, until IKF can resume apartment closings. Gardenside Filling Up: By the middle of March, IKF had filled 70 Gardenside IL apartments (approximately 57% occupancy) and was on pace to fill enough of the 123 apartments to pay down the $82 million of short-term debt by the middle of the summer. The paydown of the short-term debt would allow for the release of contingency funds, which would add approximately $2.5 million to the balance sheet, and would also enable additional Gardenside sales to accrete to the balance sheet. The 70 sales enabled IKF to pay down approximately $50 million of the short-term debt in April, reducing the outstanding short-term debt to $32 million. IKF reports have approximately 37 depositors on its Gardenside waitlist. High Debt Position: IKF's permanent debt will remain high, at approximately $140 million, after paying off short-term debt. Debt metrics are expected to remain stressed and below investment grade over the next few years. Capitalized interest available through the November 2020 bond payment should support sufficient debt service coverage as the project ramps up, with 2023 as the expected stabilization year, when IKF will be tested on the higher maximum annual debt service (MADS) of $9.3 million. No Asymmetric Risk Factors: No asymmetric risk factors affected this rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Unrestricted liquidity that includes additional financing facilities or release of currently restricted liquidity that remains below $3 million beyond the end of summer and that is caused by an inability to resume sales and closings for Gardenside units or other unexpected outflow of cash. -- An inability to pay down the short-term debt by YE 2020, most likely caused by slower than expected velocity of sales on Gardenside apartments once the sales and closings resume. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Rating outlook could be updated to Stable if sales and closings are resumed and unrestricted liquidity rebounds, in a sustainable manner, close to $10 million. -- Continued growth to $15 million in unrestricted liquidity would likely indicate a rating upgrade. 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 IKF is a type-C continuing care retirement community located in Rockville, MD about 15 miles outside of Washington, DC that opened in 2009 and achieved stabilized occupancy in 2012. It currently offers 365 ILUs, 32 assisted living units, 32 memory care/AL beds and 45 skilled nursing facility beds. Total operating revenues were $24.1 million in fiscal 2019 (Dec. 31 YE). IKF is the only member of the OG. IKF's parent company and sole corporate member is Westminster Ingleside King Farm Presbyterian Retirement Communities, Inc., dba Ingleside. Ingleside is also the sole member of two other CCRCs, Ingleside at Rock Creek in Washington, DC and Westminster at Lake Ridge (BBB/Stable) in Lake Ridge, VA, as well as a non-profit supporting foundation, a for-profit development arm and non-profit home care service provider. The outbreak of the coronavirus pandemic and rise in related government containment measures worldwide have created an uncertain environment for the entire health care system in the near term. While IKF's financial performance through the most recently available data has indicated some impairment as a direct result of the pandemic, material changes in revenue and cost profiles will continue to occur across the sector. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in the sector as a result of the virus outbreak as it relates to severity and duration, and incorporate revised expectations for future performance and assessment of key risks. Highly Stressed Financial Profile The 'B-' rating indicates that material default risk is present, but a limited margin of safety remains. IKF is meeting its financial commitments; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment. IKF's unrestricted liquidity is expected to fall into the $2 million-$3 million range as additional refunds due to the estates of skilled nursing residents who have aged through the continuum of care are paid out over the next few months. Furthermore, in the long term liability section on its balance sheet, IKF has approximately $9.9 million of additional refunds that will become payable at some point in the future. This liability reflects residents who are currently in a higher level of care, who will be due a refund after aging through the continuum, and whose units have already been sold. The drop in liquidity and the deterioration in the financial profile have been driven by a variety of factors, including the entrance fee refund issue, a drop in skilled nursing occupancy, and a $3.5 million loan in 2018 to Rock Creek. Those funds were expected to be paid back with two years but it is unlikely that the funds will be paid back in 2020. The largest current concerns are the balance sheet and the need to pay down the short-term debt and realize additional balance sheet funds. IKF has filled 70 Gardenside IL apartments (approximately 57% occupancy) before sales were stopped. The 70 sales enabled IKF to pay down approximately $50 million of the short term debt in April, reducing the outstanding short-term debt to $32 million. Of the 70 sales, approximately 76% were for refundable contracts. The original feasibility study has approximately 80% of contracts as refundable. The refundable contracts have higher entrance fees and create a larger entrance fee pool, from which to pay down the short-term debt. IKF has 37 additional depositors, which would bring the total sales up to 107 once closings can resume. Based on the first 70 sales, Fitch estimates that IKF would need to reach approximately 113 total apartment sales, from the current 70 sales, to be able pay down the remaining $30 million. In Maryland a depositor does not have to decide on the final contract type until the sale is ready to be completed. Once the short-term debt is paid down, IKF would be able to release contingency funds, which would add approximately $2.5 million to the balance sheet, and any additional Gardenside sales would to accrete to the balance sheet. The timing of when IKF will be able to resume sales is uncertain and the ability to market the new apartments is challenging as well given the campus lockdown. Furthermore, IKF's ability to resume sales at the level prior to the coronavirus will depend on a number of factors, including the real estate market at that time and other potential macro-economic forces. Gardenside Update Construction on the campus repositioning that included the Gardenside project was completed on time and on budget. The cost of the project was approximately $185 million. The repositioning project began in late 2017 and added 121 ILUs in a new seven-story building (plus two additional IL units created in an existing building), 32 memory care ALUs in a new three-story building, and a new center for healthy living and included renovation of the existing health center and other common spaces. The new memory care unit opened in July 2019. IL fill-up for the Gardenside apartments began in November 2019. IKF management has indicated that there should be leftover projects funds that IKF can bring onto its balance. The accounting of leftover project funds will not happen until after the $82 million in short-term debt is paid down. Before the coronavirus, IKF had been projecting to pay down the short-term debt well ahead of the original 2022 target date. Strong Demographics/Market Position IKF continues to have good demand with IL occupancy in its legacy units remaining above 90% and its Gardenside waitlist remaining largely stable. IKF is in a desirable location in an affluent service area. The attractive and well-maintained campus was opened in 2009 and is integrated into a master-planned residential and commercial community. DEBT PROFILE IKF had total debt of approximately $177.7 million at April 30, 2020, including $142 million of fixed-rate series 2017A-1, series 2017A-2, and 2017B bonds, which make up IKFs permanent debt. In addition, IKF has approximately $32 million of remaining temporary debt that will be redeemed quarterly with initial entrance fee proceeds from the expansion units as collected. Approximately $50 million on the short-term bonds were paid down in April. Maximum annual debt service, which excludes temporary debt, will be $9.3 million in 2023, the first full year of expected stabilized occupancy. Testing against the 1.2x rate covenant will occur at the earlier of the next full fiscal year after stabilized occupancy (85% and all TEMPS paid off) or fiscal 2023. Fitch estimates IKF could generate 1.0x revenue-only coverage MADS by 2022 and could generate total coverage of 1.5x or better upon reaching stabilized occupancy by 2023. IKF had a debt-service coverage violation in 2018 due to negative net entrance fees receipts, but was able to make the covenant in 2019, despite very thin net entrances fee receipts. IKF opened in 2009 and the first-generation residents are beginning to age through the continuum. Most of the first-generation residents have 100% refundable contracts, and as these units have turned over, IKF has been refilling many of these with fully amortizing contracts, which are priced below the refunds. This issue has also affected unrestricted liquidity. IKF has made changes to address this issue, including limiting the number of fully amortizing contract that it offers. However, through April 2020, net entrance fee receipts are negative, and IKF could be at risk for violating the covenant depending on when sale closings can resume. 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). KOREAN WESTERN: Trustee Taps Danning Gill as Legal Counsel ---------------------------------------------------------- Jason Rund, the Chapter 11 trustee for the estate of Korean Western Presbyterian Church of Los Angeles, seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Danning, Gill, Israel & Krasnoff, LLP as his legal counsel. The firm will provide these services in connection with Debtor's Chapter 11 case: 1. aid the trustee in investigating Debtor's financial affairs and transactions; 2. advise the trustee about issues arising under Chapter 11, including operating issues, compliance, plan proposals and other reorganization issues; 3. assist the trustee in the preparation of reports, accounts, and pleadings related to Debtor's case; 4. investigate Debtor's conduct; 5. advise the trustee concerning the requirements of the bankruptcy court, the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules; 6. file legal papers to effectuate a reorganization or liquidation of the bankruptcy estate's assets; 7. investigate the nature, extent and valuation of property of the estate; 8. assist the trustee with employing other professionals, if and when the need arises; 9. advise the trustee with respect to the cases entitled Lee, et al. v. Yun, et al., filed against Debtor before the Superior Court; Korean Western Presbyterian Church of Los Angeles v. Choi, et al., and Korean Western Presbyterian Church of Los Angeles v. L.A. Open Door Presbyterian Church; 10. represent the trustee in contested matters and adversary proceedings and at hearings before the bankruptcy court; 11. assist the trustee in identifying, analyzing and obtaining possession of property of the estate; 12. assist the trustee with the use, sale, lease, abandonment, or other disposition of property of the estate; 13. investigate and pursue avoidable transfers, if appropriate; 14. assist with the collection of accounts receivables, if any, and other claims of the estate; 15. assist the trustee in post-petition borrowing, if appropriate; 16. assist the trustee in preparing motions and other pleadings concerning the use of cash collateral; 17. assist the trustee with the settlement and compromise of claims by or against the estate, or pertaining to matters relating to the case; 18. advise the trustee so that he may properly comply with the Bankruptcy Code,the Bankruptcy Rules, the Local Bankruptcy Rules, and the U.S. Trustee Guidelines; 19. respond to or oppose motions for relief from stay where appropriate; and 20. prosecute claims objections if appropriate to the extent that funds are generated for the estate. The hourly rates charged by the firm's attorneys range from $375 to $695. Paralegals, legal assistants and trustee administrators will be paid at hourly rates ranging from $210 to $280. Danning Gill and its attorneys are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Brad D. Krasnoff, Esq. John N. Tedford, IV, Esq. Aaron E. de Leest, Esq. Danning, Gill, Israel & Krasnoff, LLP 1901 Avenue of the Stars, Suite 450 Los Angeles, California 90067-6006 Telephone: (310) 277-0077 Facsimile: (310) 277-5735 Email: bkrasnoff@DanningGill.com jtedford@DanningGill.com adeleest@DanningGill.com About Korean Western Presbyterian Church of Los Angeles Korean Western Presbyterian Church of Los Angeles, a nonprofit religious corporation, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11675) on Feb. 14, 2020. The petition was signed by Joo Mo Ko, Debtor's chief executive officer. At the time of filing, the Debtor was estimated to have $10 million to $50 million in assets and $500,000 to $1 million in liabilities. Debtor tapped SulmeyerKupetz, A Professional Corporation, and Gensburg Calandriello & Kanter, P.C. as its legal counsel; and Broadway Advisors, LLC, as its financial advisor. Jason Rund was appointed as Debtor's Chapter 11 trustee. The trustee is represented by Danning, Gill, Israel & Krasnoff, LLP. LANDAU BKN HOLDINGS: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The Office of the U.S. Trustee on June 2, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Landau BKN Holdings, LLC. About Landau BKN Holdings Landau BKN Holdings, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-04622) on May 1, 2020. At the time of the filing, Debtor disclosed $2,643,172 in assets and $4,905,531 in liabilities. Judge Daniel P. Collins oversees the case. Keery McCue, PLLC is Debtor's legal counsel. LEVERAGED LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Leveraged, LLC 6276 Letson Farms Drive Bessemer, AL 35022 Business Description: Leveraged, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: June 2, 2020 Court: United States Bankruptcy Court Northern District of Alabama Case No.: 20-01946 Judge: Sims D. Crawford Debtor's Counsel: Taylor C. Crockett, Esq. C. TAYLOR CROCKETT, P.C. 2067 Columbiana Road Birmingham, AL 35216 Tel: 205-978-3550 E-mail: taylor@taylorcrockett.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bradley Lewis, managing member. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/OUGKe8 MAJESTIC HILLS: Seeks Calaiaro Valencik as Legal Counsel -------------------------------------------------------- Majestic Hills, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Calaiaro Valencik as its legal counsel. The firm's services will include: (a) preparation of schedules of assets and liabilities, statement of financial affairs and related documents; (b) attendance at the first meeting of creditors and initial debtor interview with the Office of the U.S. Trustee; (c) representing Debtor generally during its Chapter 11 proceeding; (d) representation of Debtor in relation to acceptance or rejection of executory contracts; (e) advising Debtor of its rights and obligations; (f) advising Debtor regarding possible preference actions; (g) representation of Debtor in relation to any motions to convert or dismiss its case; (h) representation of Debtor in relation to any motions for relief from stay filed by creditors; (i) preparation of the plan of reorganization and disclosure statement; (j) negotiating with any other parties who want to participate in the preparation of a plan; (k) negotiating acceptances for the plan; (l) removing litigation from The Court of Common Pleas of Washington County and U.S. District Court; and (m) preparation of objections to claims. The firm's attorneys and paralegals will be paid at hourly rates as follows: Donald Calaiaro, Esq. $395 David Valencik, Esq. $350 Mark Peduto, Esq. $300 Staff Attorney $300 Paralegal $100 Calaiaro Valencik received payment for its pre-bankruptcy services in the amount of $55,000, including a retainer of $5,000. Calaiaro Valencik does not represent any interest adverse to Debtor's bankruptcy estate, according to court filings. The firm can be reached through: Donald R. Calaiaro, Esq. Calaiaro Valencik 938 Penn Avenue, 5th Fl., Suite 501 Pittsburgh, PA 15222 Tel: 412-232-0930 Email: dcalaiaro@c-vlaw.com About Majestic Hills Majestic Hills, LLC, a privately held company based in Bridgeville, Pa., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 20-21595) on May 21, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Gregory L. Taddonio oversees the case. The Debtor is represented by Calaiaro Valencik. MILLS FORESTRY: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee on June 2, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Mills Forestry Service, LLC. About Mills Forestry Service Mills Forestry Service, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 20-60110) on March 7, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Edward J. Coleman III oversees the case. The Debtor tapped Stone & Baxter, LLP as its legal counsel. NANO MAGIC: Awaiting SEC Decision on Trading Suspension Order ------------------------------------------------------------- As previously disclosed, on April 30, 2020, the U.S. Securities and Exchange Commission issued an Order of Suspension of Trading with respect to Nano Magic Inc.'s Class A Common Stock. The trading suspension associated with the Order expired at 11:59 p.m. on Thursday, May 14, 2020. The Company timely filed with the SEC, while the suspension was in effect, a petition challenging the trading suspension. As a result of the Company's filing the petition, the SEC issued an Order Requesting Additional Submissions that included a briefing schedule for consideration of its petition. The SEC wrote in the Scheduling Order that it has the authority to "vacate an expired trading-suspension order in appropriate circumstances." On May 28, 2020, the Company filed, through its counsel, a Closing Submission in Support of Termination of Trading Suspension Issued Pursuant to Section 12(k)(1)(A) of the Securities Exchange Act of 1934 and Order for Relief with the SEC. Based on the Scheduling Order, the Company's Closing Submission is the final submission prior to the SEC issuing its decision on the Petition. All filings related to the Company's challenge, including the filings referenced in this disclosure, are available in the public record and can be found at https://www.sec.gov/litigation/apdocuments/ap-3-19787.xml. The Company is currently awaiting a decision by the SEC as to whether it will vacate the expired trading suspension and what other relief, if any, it may provide. About Nano Magic Inc. Nano Magic Inc. (OTCMKT: NMGX) -- http://www.nanomagic.com/-- specializes in liquid products to apply to surfaces such as glass, porcelain, and ceramic. Consumer products include lens care, electronic device hygiene and protection, anti-fog solutions (sport and safety), as well as household and auto cleaning and protection. Other applications include touch screens, glass displays and screens, windshields, solar panels, glass countertops and display cases, china, tableware, toilets, sinks, shower doors and more. Nano Magic's Innovation and Technology Center in Austin, TX engages in contract research and development work for government and private customers and it also develops and sells printable inks and pastes, and graphene foils. PEN Inc.'s Board adopted an amendment to its Certificate of Incorporation, and the filing was made in Delaware on March 2, 2020 to change its name to "Nano Magic Inc." Management requested the change to better convey its business and products to investors and customers. Nano Magic recorded a net loss of $964,987 for the year ended Dec. 31, 2019, compared to net income of $22,072 for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.32 million in total assets, $1.76 million in total liabilities, and a total stockholders' deficit of $446,856. Tama, Budaj & Raab, P.C., in Farmington Hills, Michigan, the Company's auditor from December 2018 through January 2020, issued a "going concern" qualification in its report dated Nov. 13, 2020, citing that the Company has suffered recurring losses, has a stockholders' deficit and has a working capital deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. NCR AUTO CORES: Taps Barton Brimm as Special Counsel ---------------------------------------------------- NCR Auto Cores & Security, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Barton Brimm Law Firm as its special counsel. Barton Brimm will represent Debtor in connection with the disallowance of its claim against Mairec Precious Metals U.S., Inc. The firm will charge $350 per hour for the services of its attorneys and $125 per hour for paralegal services. Christine Brimm, Esq., a senior attorney at Barton Brimm, disclosed in court filings that his firm does not represent any interest adverse to the interest of Debtor and its bankruptcy estate. The firm can be reached through: Christine Brimm, Esq. Barton Brimm Law Firm 3955 US-17 Murrells Inlet, SC 29576 Phone: +1 803-256-6582 About NCR Auto Cores & Security NCR Auto Cores & Security Inc. is a privately held company whose principal assets are located at 222 City Island Ave., Bronx, N.Y. NCR Auto Cores & Security filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 19-23869) on Oct. 22, 2019. In the petition signed by NCR Auto Cores CEO Joseph Forti, Debtor was estimated to have $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Judge Robert D. Drain oversees the case. Debtor tapped Bronson Law Offices, P.C. as its bankruptcy counsel, and Jones LLP as its special counsel. NEW EMERALD: Seeks to Hire Dykema Gossett as Legal Counsel ---------------------------------------------------------- New Emerald Energy, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Dykema Gossett, PLLC as its legal counsel. The firm will advise Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm's attorneys who will be handling the case will be paid at hourly rates as follows: Mark Andrews, Esq. $600 Patrick Huffstickler, Esq. $585 Ariel Snyder, Esq. $375 Danielle Rushing, Esq. $330 Dykema received a total of $37,648.50 in fees and expenses from Debtor for the preparation and filing of the bankruptcy petition. The firm holds a retainer in the amount of $85,634.50. Mark Andrews, Esq., at Dykema, 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: Mark E. Andrews, Esq. Ariel J. Snyder, Esq. Dykema Gossett PLLC 1717 Main Street, Suite 4200 Dallas, TX 75201 Phone: (214) 462-6400 Fax: (214) 462-6401 Email: mandrews@dykema.com asnyder@dykema.com -- and -- Patrick L. Huffstickler, Esq. Danielle N. Rushing, Esq. Dykema Gossett PLLC 112 East Pecan Street, Suite 1800 San Antonio, Texas 78205 Telephone: (210) 554-5500 Facsimile: (210) 226-8395 Email: phuffstickler@dykema.com drushing@dykema.com About New Emerald Energy New Emerald Energy, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-41754) on May 14, 2020. At the time of the filing, the Debtor was estimated to have assets of between $10 million and $50 million and liabilities of the same range. Judge Edward L. Morris oversees the case. The Debtor is represented by Dykema Gossett, PLLC. NORTHERN OIL: To Swap Notes for $3.6 Million Worth of Common Stock ------------------------------------------------------------------ Northern Oil and Gas, Inc., entered into an exchange agreement with holders of the Company's 8.5% senior secured notes due 2023, pursuant to which the Company agreed to issue $3.6 million in agreed upon value of the Company's common stock, par value $0.001 per share in exchange for $4.0 million aggregate principal amount of the Notes and accrued interest thereon. The number of shares of Common Stock to be issued in this exchange will be based on a forward volume-weighted average price ("VWAP") mechanism. This transaction is expected to close and the shares of Common Stock are expected to be issued on or about June 16, 2020. The Company expects to have $297.3 million remaining principal amount of Notes outstanding after the closing of both this transaction and another recently announced exchange transaction, which the Company disclosed in a Form 8-K filed with the SEC on May 21, 2020. The issuance of the shares of Common Stock in exchange for the Notes is being made in reliance on the exemption from registration provided in Section 3(a)(9) of the Securities Act of 1933, as amended. About Northern Oil Northern Oil and Gas, Inc. -- http://www.northernoil.com-- is an exploration and production company with a core area of focus in the Williston Basin Bakken and Three Forks play in North Dakota and Montana. Northern Oil recorded a net loss of $76.32 million for the year ended Dec. 31, 2019. As of March 31, 2020, the Company had $2.23 billion in total assets, $1.22 billion in total liabilities, and $1.01 billion in total stockholders' equity. * * * As reported by the TCR on April 14, 2020, S&P Global Ratings lowered its issuer credit rating on Northern Oil and Gas Resources to 'CCC+' from 'B-'. The outlook is negative. "Our downgrade reflects the company's tight liquidity and history of distressed exchanges. The recent collapse in oil prices increases the risk that the company's reserve-based lending (RBL) facility size could be reduced at its next bank redetermination, which could further strain its limited capacity," S&P said. ONE AVIATION: Citiking Opposes Committee Bid for Liquidation ------------------------------------------------------------ AIN Online reports that Citiking International US LCC, citing the ongoing effects from the Covid-19 pandemic, filed its opposition to an attempt by the unsecured creditors committee (UCC) in the Chapter 11 bankruptcy case of One Aviation to force the Albuquerque, New Mexico-based aircraft manufacturer into liquidation. The UCC asserted Citiking's "failure to consummate the plan in a timely manner and pay all administrative expense claims when due" in its motion filed May 8, with a June 4 hearing on the matter scheduled before the U.S. Bankruptcy Court. In its May 22 filing, Citiking maintained it has worked diligently through the bankruptcy process despite "a series of obstacles, "including resolving previous objections raised by the UCC and attaining approval from the Committee on Foreign Investment in the United States (CFIUS) for the sale of the company to the Chinese-backed investment group. The last major stumbling block appears to be negotiating a new asset-based loan (ABL) with One Aviation's primary debtors. "However, those discussions...were complicated by another major obstacle: the outbreak of the Covid-19 pandemic," reads the May 22 filing. "The [UCC] completely ignores that economic reality." Citiking further asserted it remains committed to One Aviation's emergence from Chapter 11 but is working to ensure "that the debtors are not back in bankruptcy court as a result of structuring the facility in a manner that does not make sense due to the rapid economic changes caused by the pandemic." Citiking International US LCC is a Chinese-controlled investment fund. About One Aviation Headquartered in Albuquerque, New Mexico, ONE Aviation Corporation --http://www.oneaviation.aero-- and its subsidiaries are original equipment manufacturers of twin-engine light jet aircraft. Eclipse Aviation and Kestrel Aircraft merged in 2015 to form One Aviation. Primarily serving the owner/operator, corporate, and aircraft charter markets, ONE Aviation is on the forefront of private aviation technology. They provide maintenance and upgrade services for their existing fleet of aircraft through two Company-owned Platinum Service Centers in Albuquerque, New Mexico and Aurora,Illinois, five licensed, global Gold Service Centers in locations including San Diego, California, Boca Raton, lorida,Friedrichshafen, Germany, Eelde, Netherlands, and Istanbul, Turkey,as well as a research and development center located in Superior, Wisconsin. They currently employ 64 individuals. ONE Aviation and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case. Nos. 18-12309 to 18-12320) on Oct. 9, 2018. In the petition signed by Alan Klapmeier, CEO, the Debtor estimated its assets at $10 million to $50 million and liabilities at $100 million to $500 million. Counsel for the Debtors are Robert S. Brady, Esq., M. Blake Cleary, Esq., Sean M. Beach, Esq., Jaime Luton Chapman, Esq., and Jordan E. Sazant, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware; Chris L. Dickerson, Esq., Brendan M. Gage, Esq., and Nathan S. Gimpel, Esq., at Paul Hastings LLP, in Chicago, Illinois; and Todd M. Schwartz, Esq., at Paul Hastings LLP, in Palo Alto, California. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Oct. 22, 2018. The committee tapped Lowenstein Sandler LLP as its legal counsel; Landis Rath & Cobb LLP as the firm's co-counsel; and Conway MacKenzie, Inc. as financial advisor. OPTISCAN BIOMEDICAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: OptiScan Biomedical Corporation 24590 Clawiter Road Hayward, CA 94545 Business Description: OptiScan Biomedical Corporation -- http://optiscancorp.com-- has developed an innovative monitoring platform for use in hospital intensive care units (ICUs) to support clinicians in detecting changes more rapidly in critically ill patients, enabling more timely intervention. The OptiScanner platform is presently focused on delivering automated bedside glucose monitoring to inform clinicians' decision-making and maintain a user-defined target glucose range. Chapter 11 Petition Date: June 2, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-11465 Judge: Hon. Karen B. Owens Debtor's Counsel: David P. Primack, Esq. MCELROY DEUTSCH MULVANEY & CARPENTER, LLP 300 Delaware Avenue, Suite 770 Wilmington, DE 19801 Tel: 302-300-4515 E-mail: dprimack@mdmc-law.com Debtor's Claims/ Noticing Agent: EPIQ CORPORATE RESTRUCTURING, LLC Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Patrick Nugent, chief financial officer. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/xP7MGQ List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Altman Consulting LLC $39,068 3 Acacia Lane Redwood City, CA 94062 2. Baker Botts LLP $63,590 P.O. Box 301251 Dallas, TX 75303-1252 3. BioBrit LLC $27,045 2223 Avenida de la Playa #108 La Jolla, CA 92037 4. BMV Direct II LP $270,466 17190 Bernardo Center Drive San Diego, CA 92128-7030 5. Cello Health Insight, Inc. $91,935 264 West 40th Street 16th Floor New York, NY 10018 6. Chartline Capital $189,868 Navigator Fund, L.P. c/o Phillip B. Stern, Managing Director 1105 N. Market Street, Ste. 1800 Wilmington, DE 19801 7. CVF, LLC $370,342 222 N. LaSalle Street Ste. 2000 Chicago, IL 60601 8. Gilroy Plastics, Inc. $30,068 P.O. Box 1602 Gilroy, CA 95021 9. Hercules Capital, Inc. $407,787 400 Hamilton Ave. Suite 310 Palo Alto, CA 94301 10. Hyman, Phelps & McNamara $29,690 700 Thirteenth St., NW Washington, DC 20005 11. KMOB $58,199 2040 Main Street Fourteenth Floor Irvine, CA 92614 12. MIF Sucro Ltd $463,936 c/o Xeraya Capital Sdn. Bhd. Lot 26.03-26.08 Level 26, Gtower No. 199 Jalan Tun Razak 50400 Kuala Lumpur, Malaysia 13. Nelson Laboratories $33,188 29471 Network Place Chicago, IL 60673-1294 14. NGN OptiScan Fund Ill LP $426,563 60 Long Ridge Road Ste 402 Stamford, CT 06902 15. Omnify Software, Inc. $52,084 Dept. 0542 PO Box 120542 Dallas, TX 75312-0542 16. Outcome Capital, LLC $30,545 11921 Freedom Dr. Reston, VA 20190 17. PMVL Sucro Ltd $463,935 c/o Xeraya Capital Sdn. Bhd. Lot 26.03-26.08 Level 26, Gtower No. 199, Jalan Tun Razak 50400 Kuala Lumpur, Malaysia 18. Washington University $38,241 School of Medicine 660 S. Euclid Ave. Campus Box 8009 Saint Louis, MO 63110-1010 19. Wexford Partners $1,253,742 Investment Co. LLC 411 West Putnam Ave. Ste. 125 Greenwich, CT 06830 20. Wexford Spectrum Trading Limited $1,107,795 411 West Putnam Avenue, Ste. 125 Greenwich, CT 06830 PARTY CITY: Launches Tender Offer for $850-Mil. Senior Notes ------------------------------------------------------------ Party City Holdco Inc. and certain of its direct or indirect subsidiaries, including Party City Corporation, Party City Holdings Inc., and an ad hoc committee of holders of at least 52% of the aggregate principal amount of the 6.125% Senior Notes due 2023 and the 6.625% Senior Notes due 2026, each issued by Holdings, entered into an agreement on May 28, 2020, whereby the Consenting Noteholders have agreed to support a set of transactions to be commenced by the Company. Under the Transaction Support Agreement, each of the Credit Parties and the Consenting Noteholders have undertaken customary commitments to one another. The Credit Parties have agreed, among other things, to solicit approval of the Transactions by the holders of the Existing Notes through an exchange offer and to negotiate in good faith the definitive documents which will govern the Transactions. The Consenting Noteholders have agreed, among other things, to timely vote, exchange, and tender their Existing Notes in connection with the Transactions, to use commercially reasonable efforts to support approval and implementation of the Transactions, and to negotiate in good faith the definitive documents that will govern the Transactions. The Company and the Senior Notes Indenture Trustees are parties to the Senior Notes Indentures, under which (i) the 2023 Notes were issued in the original aggregate principal amount of $350,000,000 and (ii) the 2026 Notes were issued in the original aggregate principal amount of $500,000,000, such that the Senior Notes were issued in the original aggregate principal amount of $850,000,000. The current principal amount outstanding of the 2023 Notes is $350,000,000 and the current principal amount outstanding of the 2026 Notes is $500,000,000, such that the current principal amount outstanding of the Senior Notes is $850,000,000. The contemplated transactions are expected to deleverage the Company's balance sheet by approximately $450 million and the Company intends to raise $100.0 million in new capital to increase its financial strength and support PCHI's global operations and ongoing transformation initiatives. Brad Weston, CEO, stated, "The agreement announced today demonstrates the confidence of certain of our bondholders in our strategy and leadership team, and we appreciate their support for our long-term success. The transactions set out in this agreement deliver value to our stockholders and provide Party City a path to a significantly strengthened financial foundation as we continue to navigate the current macroeconomic challenges and implement our ongoing transformation initiatives." The Transaction Support Agreement contains deadlines relating to the Transactions, which include deadlines for the commencement of the Exchange Offer and for the consummation of the Transactions. The Transaction Support Agreement also contains termination rights for the benefit of the Credit Parties and the Consenting Noteholders, subject, in certain cases, to cure rights. The Company may terminate the Transaction Support Agreement upon, among other circumstances, certain material breaches of the Transaction Support Agreement by a Consenting Noteholder or the board of directors of a Credit Party reasonably determining, after considering the advice of counsel, that taking certain actions, or refraining to take certain actions, is reasonably required for such board of directors to comply with its fiduciary duties. The Consenting Noteholders have termination rights that may, as a general matter, be exercised by the Consenting Noteholders holding at least 50.00% of the outstanding Existing Notes held by the Consenting Noteholders upon, among other circumstances, material breaches of the Transaction Support Agreement by the Company or the failure of the Company to meet any Milestone (subject to the terms of the Transaction Support Agreement). The Transactions consist of the Exchange Offer, the Consent Solicitation and the Rights Offering. Exchange Offer Under the Transaction Support Agreement, the Company will conduct an exchange offer in respect of the Existing Notes in which the Company will offer to exchange any and all Existing Notes, including accrued and unpaid interest on account of such notes to, but not including, the settlement date of the Exchange Offer, (in each case assuming all Existing Notes are validly tendered and not validly withdrawn in the Exchange Offer) for: * shares of common stock of Holdco, par value $0.01 per share, representing 19.90% of such common stock outstanding on the Settlement Date prior to the settlement of the Exchange Offer (the "Shares"); * $100.0 million aggregate principal amount of 10.00% senior secured notes due 2026 to be issued by a newly formed limited liability company, a direct wholly owned subsidiary of Holdings, and Anagram International, Inc. (together, the "Issuer"). The Second Lien Issuer Exchange Notes will be secured by second-priority liens on all assets of the Issuer and its subsidiaries guaranteeing such notes and all of the Issuer's capital stock, subject to certain agreed upon exceptions; and * $185.0 million aggregate principal amount of variable rate senior secured notes due 2025 to be issued by Holdings and secured by first-priority liens on all assets of Holdings and its subsidiaries that currently secure the Company's existing senior credit facilities. The Transaction Support Agreement requires the valid tender, without valid withdrawal, of a minimum of 98.00%, or $833 million, of the outstanding aggregate principal amount of Existing Notes by Eligible Holders as of the expiration date of the Exchange Offer. This threshold may be lowered by the Company with consent of the Consenting Noteholders. The Company said that if it is unable to complete the Transactions or any other alternative transaction, on favorable terms or at all, due to market conditions or otherwise, its financial condition could be materially adversely affected. Consent Solicitation The Company will seek, and holders of Existing Notes who tender pursuant to the Exchange Offer will be required to deliver, consents to certain amendments to each of the indentures governing the Existing Notes. The Proposed Amendments will: * allow for the issuance of the New Money First Lien Issuer Notes, the Second Lien Issuer Exchange Notes and the First Lien Party City Exchange Notes; * allow for the issuance of the Shares; * eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing Indentures; * waive any related cross-defaults under the Existing Indentures; * release any guarantees provided by guarantors (or groups of guarantors) under the Existing Indentures that do not constitute Significant Subsidiaries (as defined in the Existing Indentures); * prohibit the designation of any future guarantors under the Existing Indentures; and * waive any requirement to use excess proceeds from any previous asset sales to make an offer to repurchase the Existing Notes under the provisions of the asset sales covenant in the Existing Indentures. Rights Offering Simultaneously with the launch of the Exchange Offer and the Consent Solicitation, the Company will initiate a rights offering whereby holders of the Existing Notes eligible to participate in the Exchange Offer who validly tender (and do not validly withdraw) their Existing Notes for exchange in the Exchange Offer will be provided the right to purchase a pro rata portion of $50.0 million of 15.00% senior secured notes due 2025 -- New Money First Lien Issuer Notes -- to be issued by the Issuer and secured by first-priority liens on all assets of the Issuer and its subsidiaries guaranteeing such notes and all of the Issuer's capital stock, subject to certain agreed upon exceptions. Certain of the Consenting Noteholders have agreed in the Transaction Support Agreement to, and will, enter into a backstop and private placement agreement with the Company prior to launch of the Transactions, to purchase $41.5 million of New Money First Lien Issuer Notes. The Company, the Issuer, and the Consenting Noteholders shall work together in good faith to identify and sign up additional Backstop Parties to increase such commitment to $50.0 million of New Money First Lien Issuer Notes prior to the launch of the Transactions. If so increased, the Backstop and Private Placement Agreement will include a $50.0 million commitment by the Backstop Parties to purchase the amount of New Money First Lien Issuer Notes which may be issued in the Rights Offering, representing the aggregate amount the Backstop Parties may purchase in the Rights Offering plus an additional amount of New Money First Lien Issuer Notes which are otherwise available to be purchased in the Rights Offering but for which applicable Rights have not been exercised by other Eligible Holders. As consideration for entering into the Backstop and Private Placement Agreement and providing their respective commitments in the aggregate amount of $50.0 million, the Company has agreed to pay to each of the Backstop Parties (i) its pro rata portion of an aggregate premium of $5.0 million in the form of New Money First Lien Issuer Notes plus (ii) its pro rata portion of an aggregate premium of $5.0 million in the form of First Lien Party City Exchange Notes. Private Placement Commitment Agreement On May 28, 2020, the Credit Parties and Barings LLC, including certain funds or advisory accounts managed, advised or sub-advised by it, entered into a private placement commitment agreement. The Private Placement Commitment Agreement includes a commitment by the Private Placement Party to purchase $40.0 million of New Money First Lien Issuer Notes in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. The Company, the Issuer, the Consenting Noteholders and the Private Placement Party shall work together in good faith to identify and sign up additional Private Placement Parties to increase the commitments to $50.0 million of New Money First Lien Issuer Notes, prior to the launch of the Transactions. As consideration for entering into the Backstop and Private Placement Agreement (and, initially, the Private Placement Commitment Agreement, if applicable) and providing commitments in the aggregate amount of $50.0 million, the Company will pay to the Private Placement Party and each other party participating in the Private Placement its pro rata portion of an aggregate premium of $5.0 million in the form of New Money First Lien Issuer Notes. The commitment of the Private Placement Party is subject to certain customary and usual conditions. Milestones The Private Placement Party may terminate the Private Placement Commitment Agreement upon the occurrence of any material modification or amendment of the Transaction Support Agreement to which the Private Placement Party has not consented. The Private Placement Commitment Agreement will automatically terminate (i) upon the termination of the Transaction Support Agreement, (ii) if the Exchange Offer and Consent Solicitation have not been commenced on or before June 29, 2020, unless extended, (iii) upon the consummation of the Transactions and (iv) if the Transactions have not been consummated on or before August 3, 2020, unless extended. The Definitive Documents (other than the Exchange Offer and Consent Solicitation Materials) shall be agreed to in form and substance between and among the Company and the Required Consenting Noteholders on or before July 28, 2020. On or before July 31, 2020, the Settlement Date shall have occurred. Each of the Pre-Closing Steps shall have occurred by no later than the Settlement Date. Parties' Advisors Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel and Moelis & Company LLC is serving as financial advisor to Party City. Milbank LLP is serving as legal counsel and Houlihan Lokey Capital, Inc. is serving as financial advisor to the Consenting Noteholders. Skadden may be reached at: James Eric Ivester, Esq. Shana Elberg, Esq. Sarah Ward, Esq. Andrea Nicolas, Esq. Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, NY 10001 E-mail: Eric.Ivester@Skadden.com Shana.Elberg@Skadden.com Sarah.Ward@Skadden.com Andrea.Nicolas@Skadden.com Barings may be reached at: Bryan High Jon Bock Jonathan Landsberg Steve Johnson c/o Barings LLC 300 South Tryon Street, Suite 2500 Charlotte, NC 28202 E-mail: bryan.high@barings.com jon.bock@barings.com jonathan.landsberg@barings.com steve.johnson@barings.com Milbank LLP may be reached at: Abhilash M. Raval, Esq. Paul Denaro, Esq. Eric Stodola, Esq. Milbank LLP 55 Hudson Yards New York, NY 10001 E-mail: ARaval@Milbank.com PDenaro@Milbank.com EStodola@Milbank.com About Party City Elmsford, N.Y.-based Party City Holdco Inc. (NYSE: PRTY) is a popular one-stop shopping destination for party supplies, balloons, and costumes. Party City Holdco designs, manufactures, sources and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery throughout the world. Its retail operations include approximately 875 specialty retail party supply stores (including franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com. At Dec. 31, 2019, the Company had $3.6 billion in total assets and $3.1 billion in total liabilities. PARTY CITY: Stockholders' Annual Meeting Adjourned to July 2 ------------------------------------------------------------ Party City Holdco Inc. said last week the 2020 Annual Meeting of Stockholders will be convened as scheduled on June 11, 2020, at 8:30 a.m. eastern daylight time and will be immediately adjourned without conducting any other business. The Annual Meeting will be reconvened and held virtually at www.virtualshareholdermeeting.com/PRTY2020 on Thursday, July 2, 2020, at 8:30 a.m. eastern daylight time. By holding the Annual Meeting on July 2, 2020, within the maximum time prescribed by Delaware law, stockholders will have an opportunity to receive additional information which may develop regarding a restructuring transaction recently initiated by the Company. The record date of the Annual Meeting, April 14, 2020, remains unchanged. During the pendency of the adjourned meeting, stockholders holding shares as of the record date of April 14, 2020, who have not yet voted, are encouraged to vote by 11:59 p.m. eastern daylight time on July 1, 2020. Stockholders will also be able to vote their shares electronically during the Annual Meeting. Stockholders who have previously cast their votes do not need to vote again. The reconvened Annual Meeting will begin at approximately 8:30 a.m. eastern daylight time, at www.virtualshareholdermeeting.com/PRTY2020, with online check-in beginning at 8:20 a.m. on July 2, 2020. Ample time should be allowed for the check-in procedures. In the event of difficulties during the check-in time or during the reconvened Annual Meeting, technical support at the number posted on the Annual Meeting log-in page should be consulted. As reported in the Troubled Company Reporter, Party City and certain of its direct or indirect subsidiaries, including Party City Corporation, Party City Holdings Inc., and an ad hoc committee of holders of at least 52% of the aggregate principal amount of the 6.125% Senior Notes due 2023 and the 6.625% Senior Notes due 2026, each issued by Holdings, entered into an agreement on May 28, 2020, whereby the Consenting Noteholders have agreed to support a set of transactions to be commenced by the Company. The contemplated transactions are expected to deleverage the Company's balance sheet by approximately $450 million and the Company intends to raise $100.0 million in new capital to increase its financial strength and support PCHI's global operations and ongoing transformation initiatives. About Party City Elmsford, N.Y.-based Party City Holdco Inc. (NYSE: PRTY) is a popular one-stop shopping destination for party supplies, balloons, and costumes. Party City Holdco designs, manufactures, sources and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery throughout the world. Its retail operations include approximately 875 specialty retail party supply stores (including franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com. At Dec. 31, 2019, the Company had $3.6 billion in total assets and $3.1 billion in total liabilities. PASHA GROUP: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of The Pasha Group, including the Corporate Family Rating to Caa1 from B3, the Probability of Default Rating to Caa1-PD from B3-PD and the senior secured first lien debt to Caa1 from B2. The outlook is negative. This action concludes the review for downgrade that was initiated on April 1, 2020. RATINGS RATIONALE The ratings, including the Caa1 CFR, reflect Moody's expectation for liquidity and credit metrics to weaken in the face of substantial earnings pressure amid recessionary conditions affecting Pasha's cyclical markets, accelerated by the coronavirus pandemic. Weak fundamentals in the company's automotive and transportation markets, as well as Hawaii's economy, which heavily relies on tourism and affects Pasha's US west coast-Hawaii trade, are likely to negatively impact credit metrics into 2021. Moody's anticipates debt/EBITDA (after its standard adjustments) will approach 6x in 2020, from the high 4x range, before gradually recovering in 2021. The company also faces meaningful competition in its markets and has sizeable fixed costs partly due to an old maritime fleet that is more likely to have mechanical disruptions, exposing free cash flow to fluctuations. This will be tempered by the scheduled deliveries of two new LNG-powered ships in late 2020 and early 2021, which will replace some of Pasha's older vessels and should improve fuel efficiency and reduce maintenance costs. Pasha has a good market position, benefiting from a long history in logistics and automotive port processing on the US west coast, where it has long term contracts to operate select marine port terminals, as well as an established presence on the Hawaii-US west coast trade lane. These factors support its longstanding relationships with blue-chip customers. The company has also undertaken cost reduction measures to minimize the coronavirus impacts and end market pressures, including the renegotiation of a union contract that is expected to provide approximately $10 million in annual labor savings. Moody's views Pasha's liquidity as weak, based on limited covenant headroom that likely will tighten amid significant earnings headwinds, particularly over the near term, and free cash flow that will be constrained by higher than normal capital spending this year and weaker earnings into 2021. As well, cash balances and $21 million of ABL revolver availability are modest relative to sizable annual mandatory debt payments approximating $35 million in 2020 and 2021, and given working capital swings that require tapping of the revolver. The negative outlook reflects Moody's expectation of weak liquidity amid meaningful downwards pressure on revenue and earnings likely over the next year. As well, the duration and extent of the effects of the coronavirus on the company's business and end markets remain uncertain. In terms of corporate governance, Pasha is exposed to high key-man risk as a family-owned and controlled company. It shareholders include preferred equity holders whose funds are used for investments in the business in addition to debt. Although the preferred stock dividend accrues, minimizing cash outflows, the company has previously used some incremental debt for payouts to preferred shareholders. The Caa1 rating on the senior secured first lien debt, at the same level as the CFR, reflects Moody's expectation of recovery in a default scenario. The instrument rating incorporates a one-notch override under Moody's Loss Given Default analysis, given the presence of a large underfunded pension balance which may not provide the modeled rating lift to the senior secured debt in the event of a default. Moody's took the following actions on Pasha Group (The): Corporate Family Rating, downgraded to Caa1 from B3 Probability of Default Rating, downgraded to Caa1-PD from B3-PD Senior Secured Bank Credit Facility, downgraded to Caa1 (LGD3) from B2 (LGD3) Outlook, changed to Negative from Ratings Under Review FACTORS THAT COULD LEAD TO A DOWNGRADE OR UPGRADE OF THE RATINGS: The ratings could be downgraded with expectations deteriorating liquidity, including negative free cash flow or a higher reliance on revolver borrowings, or with weakening credit metrics, including EBIT/interest expected to remain below 1x. Aggressive financial policies that increase leverage or weaken the metrics would also drive downwards rating pressure. Upward ratings pressure is unlikely in the near term, at least until business conditions improve along with the broader industrial and macroeconomic environment. Over time, the ratings could be upgraded with sustained revenue and earnings growth that results in stronger credit metrics, including debt/EBITDA expected to remain comfortably below 6x. This would be accompanied by strong liquidity, including expectations of consistent positive free cash flow generation, with amounts applied to debt reduction beyond required amortization (noting also there is an excess cash flow sweep provision in the credit agreement), and greater revolver availability. The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. The Pasha Group, based in San Rafael, California, is a provider of transportation and logistics services, including ocean-based shipping, automotive port processing and distribution, and relocation services. The company is privately-held, primarily by the Pasha family. Revenues approximated $917 million for the last twelve months ended March 31, 2020. PG&E CORP: Fire Victim Objects to Reorganization Plan ----------------------------------------------------- Patricia Garrison, a Fire Victim claimant, objects to the Joint Chapter 11 Plan of Reorganization of PG&E Corporation, and its debtor-affiliates, and Shareholder Proponents. She asserts that: * A reorganization plan must place substantially similar claims in the same class absent a legitimate business or economic reason. Yet the Proposed Plan creates six separate classes for these claims, with three claims - the Public Entities Wildfire Claims, the Subrogation Wildfire Claims, and Fire Victims Claims - that are substantially similar. * The Fire Victims get far less favorable treatment both in terms of proportion of cash and times of payment. The stock is problematical, because after transfer to the Fire Victims Trust it will be subject to devaluation by market conditions, early sale of stock by existing investors, and the prospect of another catastrophic PG&E fire in the coming fire season. * The separate classification of Subrogation and Fire Victims makes no sense given that subrogation claims are derivative of and subordinate to the claims of their insureds as a matter of law. Ms. Garrison proposes that the reorganization plan comply with the good faith requirement by allocating cash and stock equally in proportion relative to the total amounts allowed the Public Entities, Subrogation Wildfire, and Fire Victims respectively, so the benefits of receiving cash and the risks in receiving proceeds from the sale of stock are shared mutually. A copy of Garrison's objection to plan of reorganization dated May 14, 2020, is available at https://tinyurl.com/ycarxfez from PacerMonitor.com free of charge. Attorneys for Patricia Garrison: Thomas Tosdal Tosdal Law Firm APC 777 S. Highway 101, Ste. 215 Solana Beach, CA 92075 Tel: (858) 704-4709 E-mail: tom@tosdallaw.com Fax: (888) 740-3859 - and - Michael S. Feinberg SBN 81867 41911 Fifth Street, Ste. 300 Temecula, CA 92590 Tel: (951) 698-9900 E-mail: feinberg@feinbergfitchlaw.com Fax: (951) 698-9909 Angela Jae Chun SBN 248571 Law Office of Angela Jae Chun 777 S. Highway 101, Ste. 215 Solana Beach, CA 92075 Tel: (619) 719-5757 E-mail: ajc@chun.law David S. Casey, Jr. James Davis Casey Gerry Schenk Francavilla Blatt & Penfield, LLP 110 Laurel St. San Diego, CA 92101 Tel: (619) 238-1811 Fax: (619) 544-9232 E-mail: dcasey@cglaw.com E-mail: jdavis@cglaw.com About PG&E Corporation PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, as special regulatory counsel. Munger Tolles & Olson LLP, as special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PIMA COUNTY IDA: Moody's Cuts Rating on Education Bonds to B1 ------------------------------------------------------------- Moody's Investors Service has downgraded to B1 from Ba2 the rating on Pima County Industrial Development Authority (IDA), AZ's Education Revenue Bonds (Arizona Charter Schools Refunding Project). There are approximately $33.9 million in outstanding revenue bonds of the Pima County Industrial Development Authority. Of these, Moody's rates $22.2 million in Series 2013Q and $11.5 million in Series 2016R. The outlook has been revised to stable from ratings under review. The rating action resolves the placement of the ratings on review for possible downgrade concurrent with publication of Moody's new Public Sector Pool Programs and Financings Methodology published on April 13, 2020. RATINGS RATIONALE The downgrade to B1 reflects Moody's revised pool methodology. Under the methodology, the weighted average credit quality of the 9 pool participants determines the highest possible rating since there are no step-up provisions, and Pima Pool participants are not responsible for debt service payments in the event of another member's default. The rating also takes into account the credit quality of the lowest rated Pima Pool participant and the availability of a pooled debt service reserve account. There is substantial risk of default for the lowest rated Pima Pool participant. However, the ability of pooled reserves to cover this default, along with at least partial expected recovery from the liquidation of pledged collateral, serves to somewhat mitigate this risk. The participants are small charter schools with slim debt service coverage, weak liquidity, and narrow operating margins. The weakest participants, like Academy with Community Partners (ACP), Paramount, and New School for the Arts, are especially stressed and have experienced enrollment declines. Financial performance at ACP is particularly weak with 21 days' cash exclusive of government receivables and prepaid expenses. The pool benefits from security features that ensure that debt service is paid from the first available allocations of state aid. The State Treasurer sends state aid directly to the Trustee for payment of debt service before funds are released to the schools. The pool holds close to $4.9 million in liquid reserves that are cross-collateralized across the three outstanding series and among all 9 pool participants. Pooled reserves are sufficient to cover the loss or complete default of any one participant. They could also cover debt service for all of the weakest participants for a multi-year period, potentially allowing the schools to adjust their operations and attract additional students. As an additional test of the reserves' strength, the pool could withstand the immediate default of the weakest participant and still cover annual debt service payments of the next two weakest participants for a multi-year period. The schools also maintain credit reserves equal to their maximum annual debt service. While the reserves provide some insulation, the pool's weighted average credit quality increases the likelihood that they will be called upon in the future. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The coronavirus crisis is not a key driver for this rating action. Although reductions in Arizona school funding are expected, Moody's does not see any material immediate credit risks for the Pima County Industrial Development Authority's Education Revenue Bonds. However, the situation surrounding coronavirus is rapidly evolving, and the longer-term impact will depend on both the severity and duration of the crisis. If its view of the credit quality of the revenue bonds changes, Moody's will update the rating and/or outlook at that time. RATING OUTLOOK The stable outlook reflects its expectation that the pool's excess liquidity will mitigate the low weighted average credit quality of the pool. Modest additions to the liquid reserve account will sustain the pool's default tolerance. State funding is likely to be cut, but the outlook reflects its expectation that the schools will make operating adjustments to accommodate reduced state aid. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Improvement in the weighted average credit quality of pool participants FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Decline in the weighted average credit quality of pool participants LEGAL SECURITY The primary source of payment for the bonds are State Per Pupil Operating Revenues from each school provided by the direct transfer of these funds to the Trustee to fund debt service payments. Available cross-collateralized debt service reserves now equal $4.86 million, enhancing each school's individual credit reserve, and strengthening default tolerance. Bonds are additionally secured by a mortgage on participants' facilities. Covenants include a 1.2 times additional bonds test, and a 1.1 times debt service coverage and 30 days' cash requirement. PROFILE The Pima County IDA revenues bonds are secured by a pool of nine charter schools including: (1) Academy with Community Partners (ACP), located in Mesa, which serves 133 students in grades 9-12; (2) Benchmark Charter School serving 410 students in grades K-6; (3) Dobson Ball Academy located in Chandler and serving 468 K-8 students; (4) Dobson Hearn Academy, located in Phoenix, serving 640 students in grades K-8; (5) Kingman Academy, which is located in west central Arizona, about 35 miles from the Arizona/California border, and serves just over 1,300 students in grades K-12; (6) New School for the Arts in Tempe, which serves around 250 students in grades 6-12; (7) Paramount Academy, located in Peoria, serves 236 students in grades K-8; (8) Reid Valley Academy, located in northern Phoenix, serving 692 students; and (9) Young Scholars Academy, which serves 387 students in grades K-8. METHODOLOGY The principal methodology used in these ratings was Public Sector Pool Programs and Financings Methodology published in April 2020. QUANTUM CORP: Lenders Further Extend Term Loan Amendment Deadline ----------------------------------------------------------------- Quantum Corporation previously entered into Amendment No. 2 to the Term Loan Credit and Security Agreement, dated as of Dec. 27, 2018, among the Company, Quantum LTO Holdings, LLC, the lenders from time to time party thereto, and U.S. Bank National Association, as disbursing and collateral agent for such lenders. The Term Loan Amendment requires that the Company enter into a further amendment to the Term Loan Credit Agreement by May 15, 2020, providing for, among other things, a re-set of the financial covenants set forth in the Term Loan Credit Agreement. On May 12, 2020, the lenders under the Term Loan Credit Agreement agreed to extend the Term Loan Amendment Deadline to May 31, 2020. On May 26, the lenders under the Term Loan Credit Agreement agreed to further extend the Term Loan Amendment Deadline to June 19, 2020. About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- provides technology and services that stores and manages video and video-like data delivering the industry's top streaming performance for video and rich media applications, along with low cost, high density massive-scale data protection and archive systems. The Company helps customers capture, create and share digital data and preserve and protect it for decades. Quantum reported a net loss of $42.80 million for the year ended March 31, 2019, a net loss of $43.35 million for the year ended March 31, 2018, and a net loss of $2.41 million for the year ended March 31, 2017. As of Dec. 31, 2019, the Company had $165.30 million in total assets, $360.8 million in total liabilities, and a total stockholders' deficit of $195.5 million. QUANTUM TRANSPORTATION: Trustee Gets Approval to Hire Accountant ---------------------------------------------------------------- Leon Haller, the Chapter 11 trustee for Quantum Transportation, LLC, received approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to hire Roger Kent Jr., CPA, as his accountant. The accountant will assist the trustee in the preparation and filing of Debtor's 2019 tax returns. He will be paid a flat fee of $5,000. Mr. Kent disclosed in court filings that he has no connection with any party with actual or potential interest in Debtor's Chapter 11 case. Mr. Kent holds office at: Roger L. Kent, Jr., CPA 114 Hollie Drive Triadelphia, WV 26059 Phone: (304) 547-4273 About Quantum Transportation Quantum Transportation, LLC is a transportation provider for dry bulk commodities, liquid chemicals, dump transportation and truckload deliveries. Quantum Transportation and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Lead Case No. 19-02063) on May 13, 2019. At the time of the filing, Quantum Transportation had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Henry W. Van Eck oversees the case. Debtors are represented by Cunningham, Chernicoff & Warshawsky, P.C. QUORUM HEALTH: Kairos Supports Appointment of Equity Committee -------------------------------------------------------------- Kairos Capital Management LP has expressed support to the proposed appointment of a committee to represent equity holders in Quorum Health Corporation's Chapter 11 case. In court filings, Kairos said it supports Mudrick Capital Management, L.P.'s request to appoint an equity committee and its objection to confirmation of Quorum Health's proposed Chapter 11 plan. The plan, if confirmed by the bankruptcy court, would wipe out existing equity and give ownership of the reorganized company to certain creditors, according to Kairos. Kairos owns approximately 709,000 shares in Quorum Health. 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. Debtors hired McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz as legal counsel, MTS Health Partners, L.P. as financial advisor, and Alvarez & Marsal North America, LLC. as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent, maintaining the Web site https://dm.epiq11.com/Quorum RAVN AIR GROUP: Wins Approval to Sell Assets -------------------------------------------- Megan Mazurek, writing for KTVA, reports that a bankruptcy court has given Ravn Air Group the green light to move forward with selling all or a large part of its assets. Bids to buy the air group are due June 17, 2020. "This Court decision helps clear the path for Ravn to find new ownership that will allow us to resume operations later this summer," said Dave Pflieger, Ravn's President and CEO, said in a May 27, 2020 statement. The U.S. Treasury has conditionally authorized the air group to seek grants under the CARES Act. In April 2020, it stopped its flight operations and filed Chapter 11 protection, citing a 90% decline in revenue and bookings due to the pandemic. As a result, Ravn parked all aircraft, ceased all ground operations and laid off all staff in the company. "This is great news for our creditors, our employees who have been temporarily laid off, our customers, our important fishing industry, and the 115 rural and urban communities we serve throughout the state who are currently suffering from a lack of service since we parked our seventy-two aircraft," said Mr. Pflieger. The grounding of Ravn's aircraft has been difficult to work around for the fishing industry, said UniSea, Inc. president Tom Enlow. "Ravn has been a great partner of the fishing industry for many years in Alaska, and we are very hopeful for their return," Mr. Enlow said. About Ravn Air Ravn Air Group, Inc. -- https://www.flyravn.com/ -- was formed through the combination of five Alaskan air transportation businesses in 2009, creating the largest regional air carrier and network in the state. Ravn owns and, until the COVID-19-related disruptions, operated 72 aircraft at 21 hub airports and 73 facilities, serving 115 destinations in Alaska with up to 400 daily flights. Until the COVID-19-related disruptions, Ravn Air Group and its affiliates had over 1,300 employees (non-union), and it carried over 740,000 passengers on an annual basis. Ravn Air Group provides air transportation and logistics services to the passenger, mail, charter, and freight markets in Alaska,pursuant to U.S. Department of Transportation approval as three separate certificated air carriers. Two of the carriers (RavnAir ALASKA and PenAir) operate under Federal Aviation Administration Part 121 certificates and the other (RavnAir CONNECT) operates under an FAA Part 135 certificate. In addition to carrying passengers, many of whom fly on Medicaid-subsidized tickets, other key customers include companies in the oil and gas industry, the seafood industry, the mining industry, and the travel and tourism industries. Ravn Air Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10755)on April 5, 2020. At the time of the filing, Debtors was estimated to have assets of between and $100 million to $500 million and liabilities of the same range. Judge Brendan Linehan Shannon oversees the cases. The Debtors tapped Keller Benvenutti Kim LLP as bankruptcy counsel; Blank Rome LLP as special corporate and local bankruptcy counsel;Conway Mackenzie, LLC as financial advisor; and Stretto as claims and noticing agent. SHEET METAL WORKS: RT Montrone to Contribute $10,000 to Fund Plan ----------------------------------------------------------------- Sheet Metal Works, Inc., filed with the U.S. Bankruptcy Court for the District of Utah, Central Division, a Chapter 11 Plan and a Disclosure Statement on May 15, 2020. RC Montrone is the sole stockholder of the Debtor. Under the Plan, RC Montrone's stock in the Debtor will be cancelled. The new sole stockholder of the Debtor will be RC Montrone's father, Ralph T. Montrone (RT Montrone), who, under the Plan, has agreed to contribute $10,000 to the Debtor in exchange for such interest. Since its filing, the Debtor has been managed solely by RC Montrone. Despite the change post-confirmation change in ownership, RC Montrone will continue to manage the Debtor. RC Montrone's compensation to be paid by the Debtor (at least until December 31, 2020) will be $1,050 per week. The most significant litigation in this case has centered around the Debtor's efforts to obtain orders authorizing its use of cash collateral belonging to Bank of the West. Although Bank of the West consented to the Debtor's use of cash collateral, Thermal West Industries, Inc., objected, alleging suspicions that the Debtor was unlawfully or unfairly diverting cash collateral to Iron Mechanical, Inc. Class U1 consists of allowed unsecured claims that have prepetition, joint check agreements with the Debtor's customers. The Plan provides for holders of Class U1 claims to be paid according to the terms of their prepetition, joint check agreements, which is anticipated by the Debtor to result in 100% payment of such claims. Class U2 consists of consists of allowed unsecured claims that do not have prepetition, joint check agreements with the Debtor's customers but that have perfected their right to assert a construction lien against property of the Debtor's customer by filing a notice of preliminary lien under Utah Code Ann. Sec. 38-1a-101 et seq. Under the Plan all Class U2 claims will be paid in full upon the payment by the customer to the Debtor. Class U3 consists of allowed unsecured claims that do not quality as Class U1 or U2 claims. Under the Plan, the Debtor shall pay a pro-rated portion of an unsecured creditor dividend ($10,000) to the holders of such claims no later than the one-year anniversary of the effective date of the Plan. RC Montrone is the sole stockholder and, thus, the sole holder of equity interests. Under the Plan, RC Montrone's equity interests will be cancelled. The Plan will be funded by post-confirmation earnings of the Debtor, the capital contribution of RT Montrone of $10,000, recoveries from avoidance actions, and PPP funds. The Plan contains the cash projections of the Debtor through November 2020. These projections are based upon existing contracts and the expectation of obtaining additional contracts to generate income and profit. Under the Plan, the Debtor, after the effective date, will be owned by RT Montrone. RC Montrone will, however, continue as the general manager of the Debtor. RT Montrone will not be compensated. A full-text copy of the Disclosure Statement dated May 15, 2020, is available at https://tinyurl.com/y8pz3lg5 from PacerMonitor at no charge. Attorneys for Sheet Metal: Adam S. Affleck RICHARDS BRANDT MILLER NELSON 111 East Broadway, Suite 400 Salt Lake City, UT 84111 Telephone: 801-531-2000 Facsimile: 801-532-5506 E-mail: adam-affleck@rbmn.com About Sheet Metal Works Inc. Sheet Metal Works Inc., a ventilating contractor in Salt Lake City, Utah, filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case No. 19-28320) on Nov. 8, 2019. In the petition signed by Ralph C. Montrone, president, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Joel T. Marker oversees the case. The Debtor is represented by Adam S. Affleck, Esq., and John E. Keiter, Esq., at Richards Brandt Miller Nelson. SM ENERGY: Revises Exchange Offer Terms, Wins Noteholder Support ---------------------------------------------------------------- SM Energy Company has amended its pending offers to exchange its outstanding notes for newly issued 10.00% senior secured notes due 2025 after reaching an agreement with certain holders of the Old Notes. The terms and conditions of the Exchange Offers, as amended, are set forth in a supplement to the confidential offering memorandum and consent solicitation statement, dated April 29, 2020. The new terms to be offered to eligible holders of the Old Notes in the Exchange Offers, as amended, are: Principal Amount of New Notes per $1,000 Principal Outstanding Acceptance Amount of Principal Priority Old Notes Old Notes Amount Level Tendered --------- ------------ ---------- --------- 6.125% Senior Notes due November 15, 2022 $436,047,000 1 $700 5.000% Senior Notes due January 15, 2024 $500,000,000 2 $600 5.625% Senior Notes due June 1, 2025 $500,000,000 3 $600 6.750% Senior Notes due Sept. 15, 2026 $500,000,000 4 $580 6.625% Senior Notes due Jan. 15, 2027 $500,000,000 5 $550 The Company previously offered this consideration for the Old Notes: Principal Amount of New Notes per $1,000 Principal Amount of Old Notes Old Notes Tendered --------- --------- 6.125% Senior Notes due November 15, 2022 $650 5.000% Senior Notes due January 15, 2024 $500 5.625% Senior Notes due June 1, 2025 $500 6.750% Senior Notes due Sept. 15, 2026 $500 6.625% Senior Notes due Jan. 15, 2027 $500 The maximum principal amount of New Notes to be issued in the Exchange Offers is $532.9 million, which, together with the New Notes to be issued in the private exchanges with certain holders of Old Notes, would amount to a maximum of $800 million principal amount of New Notes. The New Notes will be secured by second priority security interests in the collateral that secures SM Energy's senior secured credit facility. The New Notes will be SM Energy's secured second lien obligations and will be effectively junior to the Company's current and future secured first lien indebtedness, including its senior secured credit facility, to the extent of the value of the collateral securing such indebtedness, effectively senior to all of the Company's existing and future unsecured indebtedness, including any Old Notes that remain outstanding following the completion of the Exchange Offers, to the extent of the value of the collateral, and senior to any future subordinated indebtedness. Interest on the New Notes will accrue from the date of issuance of the New Notes. The Exchange Offers will expire at 11:59 p.m., New York City time, on June 12, 2020. The deadline has been extended a few times already. Aside from receiving a principal amount of New Notes, participating holders will also receive, in cash, accrued and unpaid interest, if any, on their accepted Old Notes up to, but not including the settlement date for the Exchange Offers, which is expected to be on June 17, 2020. Investors who have already tendered their Old Notes do not need re-tender their Old Notes or take any other action in order to participate in the Exchange Offers as amended and will receive the benefit of the amended terms without taking any further action. Tenders of Old Notes may be withdrawn and Consents may be revoked at any time at or prior to 11:59 p.m., New York City time, on June 12, 2020 (the "Withdrawal Deadline"). Subject to proration, the amount of each series of Old Notes that is accepted for exchange will be determined in accordance with the acceptance priority levels set forth, with Acceptance Priority Level 1 being the highest Acceptance Priority Level and Acceptance Priority Level 5 being the lowest Acceptance Priority Level. The "Maximum Exchange Amount" of New Notes that the Company will issue in the Exchange Offers equals $532.9 million aggregate principal amount of New Notes. If there is a sufficient amount of Old Notes available to exchange some, but not all, Old Notes of the series with the lowest Acceptance Priority Level that is accepted, then tenders of Old Notes of that particular series will be accepted on a pro rata basis. The Exchange Offers are not conditioned upon any minimum amount of Old Notes being tendered. Backstop Deal SM Energy has agreed with certain holders of Old Notes -- the Backstop Group -- to privately issue $213.5 million aggregate principal amount of New Notes in exchange for $316.4 million aggregate principal amount of Old Notes, consisting of $96.7 million principal amount of 6.125% Senior Notes due 2022, $74.6 million principal amount of 5.00% Senior Notes due 2024, $46.3 million principal amount of 5.625% Senior Notes due 2025, $37.7 million principal amount of 6.75% Senior Notes due 2026 and $61.2 million principal amount of 6.625% Senior Notes due 2027. Holders of those Old Notes have also agreed to provide consents to certain proposed amendments to each indenture governing the Old Notes. In addition, the Backstop Group expects to tender $42.5 million aggregate principal amount of Old Notes in the Exchange Offers and the Company has agreed to issue to the Backstop Group warrants to acquire up to 5% of the outstanding common stock of the Company (subject to certain conditions). The Company has also agreed to acquire $107.0 million principal amount of 1.50% Senior Convertible Notes due 2021 from the Backstop Group for consideration including $53.5 million principal amount of New Notes and $53.5 million in cash. In addition, $65.5 million in principal amount of Old Convertible Notes that remain outstanding will be secured pursuant to their terms on a pari passu basis with the New Notes (and any refinancing of such amount of Old Convertible Notes will be permitted to also be secured on a pari passu basis with the New Notes). The total principal amount of New Notes that would be issued pursuant to these privately negotiated transactions and pursuant to the Exchange Offers based on the participation in the Exchange Offers to date, the additional tender of the Backstop Support Notes and the amended terms of the Exchange Offers is $452.8 million principal amount of New Notes. The closing of the privately negotiated transactions is expected to occur contemporaneously with the consummation of the Exchange Offers but is not conditioned on the consummation of the Exchange Offers. The New Notes issued in the privately negotiated transactions will be fungible with, and comprise one series with, the New Notes issued in the Exchange Offers. In conjunction with the Exchange Offers, SM Energy is soliciting consents from holders of each series of Old Notes to certain proposed amendments to each indenture governing the Old Notes to eliminate substantially all of the restrictive covenants and certain of the default provisions contained therein. The Exchange Offers are not conditioned upon receiving requisite consents from holders any series of the Old Notes. Holders of Old Notes may not tender Old Notes without delivering the related Consents, and holders of Old Notes may not deliver Consents without tendering the related Old Notes. To adopt the Proposed Amendments related to a series of Old Notes, SM Energy must receive Consents from holders representing a majority of the outstanding principal amount of such series Old Notes. If the Requisite Consents are delivered with respect to any series of Old Notes, a supplemental indenture to each Old Notes Indenture will be executed promptly following the Expiration Time to give effect to the Proposed Amendments. The Proposed Amendments will become operative, with respect to Old Notes for which Requisite Consents have been delivered and not validly withdrawn, immediately prior to the acceptance of such Old Notes pursuant to the applicable Exchange Offer. In the event that the Requisite Consents for a series of Old Notes are received and not validly revoked but the Old Notes of such series tendered in the applicable Exchange Offer are subject to proration, the Proposed Amendments with respect to such series of Old Notes will not become operative despite the Company accepting the Old Notes of such series in the applicable Exchange Offer. Old Notes may not be withdrawn from the Exchange Offers and the related Consents may not be revoked from the Consent Solicitations after the Withdrawal Deadline, unless otherwise required by applicable law. Credit Agreement Revised On May 5, 2020, SM Energy entered into the Fourth Amendment to the Sixth Amended and Restated Credit Agreement by and among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the institutions named therein as Lenders that are party thereto. The Fourth Amendment modifies the Credit Agreement to reduce the amount of secured second lien debt that the Company may incur in connection with the Exchange Offer or any similar exchange from $900.0 million to $827.5 million. In addition, the Fourth Amendment permits the Company to grant a second-priority security interest to the holders of the Company's outstanding 1.500% Senior Convertible Notes due 2021 to secure the Company's obligations under the 2021 Notes. As a result, the Company may grant second lien security interests on debt incurred in the Exchange Offer plus the existing 2021 Notes in an aggregate amount up to $1.0 billion. The members of the lending consortium are: * WELLS FARGO BANK, NATIONAL ASSOCIATION, Individually and as Administrative Agent, Swingline Lender and Issuing Bank * BANK OF AMERICA, NATIONAL ASSOCIATION, Individually and as Co-Syndication Agent * JPMORGAN CHASE BANK, N.A., Individually and as Co-Syndication Agent * BBVA USA, (f/k/a COMPASS BANK), Individually and as Co-Documentation Agent * COAMERICA BANK * ROYAL BANK OF CANADA * BOKF, NA DBA BANK OF OKLAHOMA * GOLDMAN SACHS BANK USA * KEYBANK NATIONAL ASSOCIATION * THE BANK OF NOVA SCOTIA, HOUSTON BRANCH * BMO HARRIS BANK N.A. The Exchange Offers are being made, and the New Notes are being offered and issued, only (a) in the United States to holders of Old Notes who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (b) outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Old Notes who have certified to the Company that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders who have completed and returned an eligibility letter, available from the information agent, may receive and review the Offering Memorandum or participate in the Exchange Offers. Eligible Holders of the Old Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., Inc., at (866) 620-2536 (toll-free) or (212) 269-5550 (for banks and brokers), email sm@dfking.com or online at www.dfking.com/smenergy. The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. About SM Energy Denver, Colo.-based SM Energy Company (NYSE: SM) -- https://www.sm-energy.com -- is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. At March 31, 2020, the Company had $5.6 billion in total assets and $3.2 billion in total liabilities. SOUTH BEACH STREET: 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 South Beach Street Development, Ltd., according to court dockets. About South Beach Street Development South Beach Street Development, Ltd. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02337) on April 23, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Lori V. Vaughan oversees the case. Zimmerman, Kiser & Sutcliffe, P.A. is Debtor's legal counsel. STAR PETROLEUM: Disclosure Statement Hearing Continued to July 15 ----------------------------------------------------------------- Judge Enrique S. Lamoutte has ordered that the hearing scheduled for May 26, 2020, to consider the adequacy of the disclosure statement of Debtor Star Petroleum, Corp. and the adequate protection payments to secured creditor Bautista Cayman Asset Company, is continued to July 15, 2020, at 9:30 A.M. A copy of the order dated May 14, 2020, is available at https://tinyurl.com/y8ppaywr from PacerMonitor.com free of 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. TENET HEALTHCARE: Fitch Rates Secured First Lien Notes 'B+/RR3' --------------------------------------------------------------- Fitch has assigned a 'B+'/'RR3' to Tenet Healthcare Corp.'s senior secured first lien notes. The company plans to use the proceeds of this borrowing for general corporate purposes, including repaying existing debt. The ratings apply to approximately $15.1 billion of debt as of March 31, 2020. The Rating Outlook is Stable. KEY RATING DRIVERS Coronavirus Pandemic Affecting Operations: Fitch believes that U.S. Healthcare & Pharmaceutical companies, including providers of healthcare services, should be less affected by the coronavirus pandemic and its influence on U.S. consumers' behavior than on other corporate sectors, as demand is less economically sensitive and oftentimes not discretionary. However, Fitch notes that while the influence on healthcare service providers, including Tenet, is expected to be relatively muted compared with more discretionary sectors, depressed volumes of elective patient procedures will meaningfully weigh on revenue and operating margins in 2020. Healthcare providers cancelled elective procedures in both inpatient and outpatient settings to increase capacity for COVID-19 patients and in response to government orders. Fitch believes Tenet has sufficient headroom in the 'B' rating to absorb these effects, which is predicated on an assumption that the healthcare services sector will experience a strong recovery in elective patient volumes beginning in the second half of 2020 and into 2021. There could be downward pressure on the rating if the business disruption is longer lasting and depresses cash flow in 2020 more than Fitch currently anticipates. This could be as a result of a patient preference to continue to defer care or because the healthcare services segment proves to be more economically sensitive than during past U.S. economic recessions, leading to a slower recovery in elective patient volumes and pricing in 2021-2022. Adequate Liquidity during Pandemic: Fitch expects Tenet to maintain an adequate liquidity cushion throughout the pandemic related business disruption. Tenet's sources of committed external liquidity include a $1.9 billion ABL facility. Tenet used the proceeds of $700 million of notes issued in April 2020 to repay amounts outstanding under the ABL and it is currently undrawn. Liquidity will also be supported by funding provided to healthcare providers through fiscal stimulus, including the Coronavirus Aid, Relief and Economic Security Act. Tenet received $345 million in grant funding from the first round of CARES Act grant funding distributed to healthcare providers in early April and about $1.5 billion in accelerated Medicare payments. Some of the liquidity enhancements provided through the CARES Act are temporary measures that are required to be repaid starting with the Medicare advances beginning four months after receipt. Fitch does not expect the unwinding of these temporary government funded liquidity bolsters to strain Tenet's financial profile. Expected Temporary Leverage Increase in 2020: Because of a reduction in EBITDA during the course of the coronavirus pandemic, Fitch expects Tenet's total debt/EBITDA to increase to 8.7x at YE 2020, compared with YE 2019 Fitch calculated leverage of 6.3x. This assumes the proceeds of the note issuance are used to refinance outstanding debt during 2020. Fitch currently anticipates leverage to drop fairly rapidly back to a level considered consistent with Tenet's 'B' rating, declining to 6.8x at YE 2021 due to recovery of EBITDA and debt repayment. Post-Pandemic Margin Headwinds: Fitch expects that healthcare providers, including Tenet, will adapt operations to manage the business disruption effects of coronavirus through initiatives like telehealth. This will help minimize the effects of localized outbreaks of the virus on patient volumes before a vaccine or highly effective treatments are available. The longer-term effect of the economic disruption caused by the pandemic on healthcare consumers is less certain. The sector has historically been fairly resilient but not immune to the effects of economic recessions. Healthcare providers typically experience lower operating margins during and immediately following recessions due to treating greater numbers of uninsured patients and patients with relatively less profitable government sponsored health insurance. Measured by revenues, Tenet is the second-largest operator of for-profit acute care hospitals and related care delivery settings in the country. The scale of the operation will help the company defend profitability in the face of weak organic operating trends but probably not enough to entirely overcome the effects of coronavirus-related unemployment on patient mix. Fitch expects operating margins for healthcare providers to rebound sharply in 2021 following a 2020 trough that reflects the peak pandemic business disruption, but to remain below the 2019 level. Fitch does not expect a full recovery of 2019 EBITDA levels until 2022 for most issuers in the sector, including Tenet. DERIVATION SUMMARY Tenet's 'B' Long-Term IDR reflects the company's highly leveraged balance sheet, largely as a result of debt funded acquisitions. Tenet's leverage is higher than that of the closest hospital industry peers: HCA Healthcare Inc. (HCA; 'BB'/Stable) and Universal Health Services Inc. (UHS; 'BB+'/Stable). Tenet's operating and FCF margins also lag these industry peers; however, Tenet has recently made progress in closing the gap through cost-cutting measures and the divestiture of lower margin hospitals. Tenet has a stronger operating profile than lower-rated peer Community Health Systems (CHS; CCC). Similar to HCA and UHS, Tenet's operations are primarily located in urban or large suburban markets that have relatively favorable organic growth prospects. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer Include: - Fitch currently anticipates a 20% drop in Tenet's 2020 EBITDA compared with 2019 due to the operational effects of the coronavirus pandemic. - 2021 EBITDA is expected to be 24% higher than the 2020 level. These estimates are highly sensitive to the depth and duration of the coronavirus pandemic in Tenet's markets. - The 2020 EBITDA estimate assumes an 8% drop in revenue and the 2020 operating EBITDA margin compresses 200bp to a Fitch-calculated 11.4% from the 2019 level of 13.4%. - Leverage rises to 8.7x at YE 2020 before dropping below 7.0x during 2021. - Fitch's revenue and EBITDA forecast for Tenet do not include CARES Act or other fiscal stimulus grant funding. - Fitch expects the company will produce FCF of about $450 million in 2020, inclusive of CARES Act liquidity measures that will be repaid starting later in 2020 and through 2022. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - An expectation of debt/EBITDA after associate and minority dividends sustained below 5.5x; - An expectation for FCF margin sustained above 2%. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Debt/EBITDA after associate and minority dividends sustained above 7.0x at YE 2021; - An expectation for consistently break-even to negative FCF margin; The negative rating sensitives could be tripped if the coronavirus pandemic has a greater impact on cash flow than Fitch currently anticipates or Tenet recovers lost revenue and EBITDA more slowly than expected beginning in later 2020 and into 2021. There is still a high degree of uncertainty about the pace of acceleration of coronavirus cases, along with the ultimate level of coronavirus patient volumes in Tenet's markets, and these factors will be important to the trajectory of 2020 revenue and EBITDA. 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 Pre-Coronavirus Outbreak Liquidity Profile Solid: Tenet's sources of liquidity include $613 million of cash at March 31, 2020. The company has access to an undrawn $1.9 billion ABL facility that matures in September 2024. Tenet's debt agreements do not include financial maintenance covenants aside from a 1.5x fixed-charge coverage ratio test in the bank agreement that is only in effect during a liquidity event, defined as whenever available ABL capacity is less than $100 million. LTM March 31, 2020 EBITDA/interest paid equaled 2.4x. The next significant debt maturities are $2.8 billion of unsecured notes maturing in April 2022 and $1.9 billion of unsecured notes maturing in June 2023. The company produced $171 million of FCF during 2019, before the coronavirus pandemic was affecting operations. Fitch expects the company will produce FCF of about $450 million in 2020, inclusive of CARES Act funding that will be repaid starting later in 2020 and through 2022. Debt Notching Considerations: The 'BB'/'RR1' and 'B+'/'RR3' ratings for Tenet's ABL facility and the senior secured first-lien notes reflect Fitch's expectation of recovery for the ABL facility in the 91% to 100% range and recovery for the first lien secured notes in the 51%-70% range under a bankruptcy scenario. The 'B'/'RR4' rating on the senior secured second-lien notes and senior unsecured notes reflect Fitch's expectations of recovery of outstanding principal in the 31%-50% range. Fitch estimates an enterprise value on a going-concern basis of $9 billion for Tenet, after a deduction of 10% for administrative claims. The EV assumption is based on post-reorganization EBITDA after dividends to associates and minorities of $1.4 billion and a 7.0x multiple. Fitch does not believe that the coronavirus pandemic has changed the longer-term valuation prospects for the hospital industry and Tenet's post-reorganization EBITDA and multiple assumptions are unchanged from the last ratings review. The post-reorganization EBITDA estimate is approximately 28% lower than Fitch's 2020 forecast EBITDA for Tenet and considers the attributes of the acute care hospital sector and includes the following: a high proportion of revenue (30%-40%) generated by government payors, exposing hospital companies to unforeseen regulatory changes; the legal obligation of hospital providers to treat uninsured patients, resulting in a high financial burden for uncompensated care, and the highly regulated nature of the hospital industry. The 7.0x multiple employed for Tenet reflects a history of acquisition multiples for large acute care hospital companies with similar business profiles as Tenet in the range of 7.0x-10.0x since 2006 and trading multiples (EV/EBITDA) of Tenet's peer group (HCA, UHS and CHS), which have fluctuated between approximately 6.5x and 9.5x since 2011. Based on the definitions of Tenet's secured debt agreements, Fitch believes that the group of hospital operating subsidiaries that guarantee the secured debt excludes any non-wholly owned and non-domestic subsidiaries, and therefore, does not encompass part of the value of the Conifer and ambulatory care segments. The hospital operations segment contributes about 55% of consolidated EBITDA, and Fitch uses this value as a proxy to determine the rough value of the secured debt collateral of $4.8 billion. Fitch assumes this amount is completely consumed by the ABL facility and the first-lien lenders, leaving $4.2 billion of residual value to be distributed on a pro rata basis to the remaining $2.8 billion of first-lien claims and the second-lien secured and unsecured claims. The ABL facility is assumed to be fully recovered before the other secured debt in the capital structure. The ABL facility is secured by a first-priority lien on the patient accounts receivable of all of the borrower's wholly owned hospital subsidiaries, while the first- and second-lien secured notes are secured by the capital stock of the operating subsidiaries, making the notes structurally subordinate to the ABL facility with respect to the accounts receivable collateral. Fitch assumes that Tenet would draw the full amount available on the ABL facility in a bankruptcy scenario, and includes that amount in the claim's waterfall. 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. TENET HEALTHCARE: Moody's Rates Sec. 1st Lien Notes Due 2028 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Tenet Healthcare Corporation's new senior secured first lien notes due 2028. There is no change to the B2 Corporate Family Rating, B2-PD Probability of Default Rating, B1 senior secured first lien ratings, B1 senior secured second lien ratings, and Caa1 senior unsecured ratings for Tenet. There is also no change to the Speculative Grade Liquidity Rating of SGL-2. The outlook is stable. Moody's expects that Tenet will use proceeds from the new senior secured first lien notes for general corporate purposes, including the repayment of existing indebtedness. Tenet's most near-term bond maturities include $2.8 billion of unsecured bonds that come due in April 2022 and $1.9 billion of unsecured bonds scheduled to mature in June 2023. With hospital volumes now recovering but still below levels prior to the onset of the ongoing coronavirus outbreak, Tenet continues to maintain good liquidity. The company entered June with approximately $2.4 billion of cash and its $1.9 billion asset-based revolver being untapped. The company received $1.5 billion of accelerated Medicare payments in April from the Coronavirus Aid, Relief and Economic Security Act; these funds will need to be repaid during the August 2020 -- March 2021 timeframe. Through May 2020, Tenet has also received a total of $517 million in grant funds from the CARES Act. Moody's expects the company to receive additional financial relief from the CARES Act and related legislation. Following is a summary of Moody's rating actions: Ratings assigned: Tenet Healthcare Corporation New senior secured first lien notes due 2028 at B1 (LGD3) The rating outlook is stable. RATINGS RATIONALE Tenet's B2 Corporate Family Rating is primarily constrained by the company's high financial leverage, with debt/EBITDA of approximately 6.6 times at March 31, 2020. Moreover, Tenet's free cash flow after minority interest payments is modest relative to debt. The rating is also constrained by several industry-wide headwinds, the most significant of which is the ongoing spread of the coronavirus across the US. Moody's expects the coronavirus to materially pressure Tenet's earnings as its hospitals and ambulatory surgery centers forgo lucrative elective procedures with the current public health crisis ongoing. The rating is supported by Tenet's significant scale and good diversity. The company is well diversified by state and payor. During more benign periods, Tenet's ambulatory surgery and revenue cycle management businesses add business diversity and will benefit from longer-term trends that favor services being done on an outpatient basis. Tenet's revenue cycle management business, Conifer, is expected to be spun-off in 2021, which will provide an opportunity for deleveraging, depending on the final allocation of debt to Conifer. The stable outlook reflects Moody's view that Tenet's liquidity will be strong enough to mitigate near-term headwinds. It also reflects Moody's view that demand for Tenet's services will rebound fairly quickly once isolation measures are lifted. With respect to governance, Tenet has generally exhibited aggressive financial policies, marked by persistently high financial leverage. As a for-profit hospital operator, Tenet also faces high social risk. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. To prepare for a surge of coronavirus patients, acute care hospitals postponed or canceled non-essential elective surgical procedures. Further, alternative care settings for such elective procedures, such as ambulatory surgery centers, did the same in an effort to conserve valuable surgical supplies (e.g., personal protective equipment). Losing these procedures, which tend to be more profitable than treating sick patients, will result in significant headwinds to hospital companies' earnings until volumes return to pre-COVID-19 levels. Beyond coronavirus, the affordability of hospitals, the lack of price transparency, and the practice of balance billing have garnered substantial social and political attention. Additionally, hospitals rely on Medicare and Medicaid for a substantial portion of reimbursement. Any changes to reimbursement to Medicare or Medicaid directly impacts hospital revenue and profitability. In addition, the social and political push for a single payor system would drastically change the operating environment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Tenet's ratings could be downgraded if the company faces operational challenges or fails to achieve its planned cost savings. Further, the divestiture of Conifer without debt repayment, or the pursuit of share repurchases or shareholder distributions could result in a downgrade. More specifically, the ratings could be downgraded if debt/EBITDA is expected to be sustained above 6.5 times. Finally, the ratings could also be downgraded if the company's liquidity weakens. The ratings could be upgraded if Tenet can realize the benefits from its recent cost and operating initiatives, including increased profit margins. Further, the ratings could be upgraded if the company realizes improved cash flow and interest coverage metrics. If Moody's expects debt/EBITDA to be sustained below 5.5 times, the ratings could be upgraded. Tenet, headquartered in Dallas, Texas, is one of the largest healthcare providers by revenue in the US. The company operates 65 hospitals, 24 surgical specialty hospitals and approximately 470 outpatient surgical centers in the US. Tenet also owns a revenue-cycle management business, called Conifer. Revenues for the last twelve months ended March 31, 2020 were in excess of $18 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. TUESDAY MORNING: Files Chapter 11 to Pursue Restructuring --------------------------------------------------------- Discount retailer Tuesday Morning Corp. announced that it filed voluntary petition under the Chapter 11 of the Bankruptcy Code of the Bankruptcy Court for the Northern District of Texas Dallas Division process to provide the company with the opportunity to continue navigating the COVID-19 pandemic and emerge as a stronger company by early fall 2020. Tuesday Morning announced its plan of pursuing operational and financial reorganization to reduce corporate outstanding liabilities and to strengthen its financial position. The filing is its response to the tremendous impact of the pandemic and store closures on the business. Ultimately, to enable the Company to continue operations during the reorganization process, it has obtained a commitment from its existing lender group to provide $100 million of debtor-in-possession (DIP) financing. As required by the DIP agreement, the Company is required to obtain a commitment for up to $25 million of additional financing, which the Company is negotiating. Following the closure of the entire store portfolio as a result of COVID-19, it has re-opened over 80% of its existing store footprint to date and expects to continue store re-openings and bringing associates back to work over the coming weeks. Steve Becker, Chief Executive Officer, stated, "The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business. Prior to the pandemic, we were gaining momentum in our merchant organization, growing our vendor base and improving brands, assortment and value for our customers, while investing in our technology and corporate leadership team. However, the complete halt of store operations for two months put the Company in a financial position that can be effectively addressed only through a reorganization in Chapter 11." "We plan to emerge from Chapter 11 in a stronger position as a leading home goods off-price retailer, providing unmatched value to our customers. The commitment from our lenders to provide access to significant capital demonstrates faith in our value-driven business model and iconic brand. Looking ahead, we've been encouraged by very positive performance of the business as we continue to re-open our doors and welcome back our dedicated customers," Becker added. About Tuesday Morning Tuesday Morning Corporation -- http://www.tuesdaymorning.com/, together with its subsidiaries, is a closeout retailer of upscale home furnishings,housewares, gifts, and related items. It operates under the trade name "Tuesday Morning" and are one of the original "off-price" retailers specializing in providing unique home and lifestyle goods at bargain values. Based in Dallas, Texas, Tuesday Morning operated 705 stores in 40 states as of Jan. 1, 2020. Tuesday Morning Corporation and 6 affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-31476) on May 27, 2020. Tuesday Morning disclosed total assets of $92,000,000 and total liabilities of $88,350,000 as of April 30, 2020. The Hon. Harlin Dewayne Hale is the case judge. The Debtors tapped HAYNES AND BOONE, LLP, as general bankruptcy counsel; ALIXPARTNERS LLP as financial advisor; and STIFEL, NICOLAUS & CO., INC. as investment banker. A&G REALTY PARTNERS, LLC, is the real estate consultant. GREAT AMERICAN GROUP, LLC, is the liquidation consultant. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims and noticing agent. UMATRIN HOLDING: Posts $95K Net Income in 2019 ---------------------------------------------- Umatrin Holding Limited reported net profit of $95,138 on $1.20 million of sales for the year ended Dec. 31, 2019, compared to a net loss of $453,120 on $410,823 of sales for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.53 million in total assets, $1.94 million in total liabilities, and a total deficit of $409,949. JLKZ CPA LLP, in Flushing, New York, the Company's auditor since 2019, issued a "going concern" qualification in its report dated May 29, 2020 citing that the Company had incurred substantial losses with working capital deficits, which raises substantial doubt about its ability to continue as a going concern. The Company had cash and cash equivalent of $171,678 and $36,431 as of Dec. 31, 2019 and Dec. 31, 2018, respectively. Umatrin said, "Our company's operations have been funded through an equity financing and a series of debt transactions, primarily with shareholders, directors, and officers of our company and affiliated entities. These related party debt transactions such as advances have operated as informal lines of credit since the inception of our company, and related parties have extended credit as needed which our company has repaid at its convenience. We anticipate that we will incur operating losses in the foreseeable future and we believe we will need additional cash to support our daily operations while we are attempting to execute our business plan and produce revenues. If our related parties are unable or unwilling to provide additional capital, we would likely require financing from third parties. There can be no assurance that any additional financing will be available to us, on terms we believe to be favorable or at all. The inability to obtain additional capital would have a material adverse effect on our operations and financial condition and could force us to curtail or discontinue operations entirely and/or file for protection under bankruptcy laws." A full-text copy of the Annual Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/1jC3vf About Umatrin Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) was incorporated in the state of Delaware on Feb. 2, 2005. The Company was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company. On Jan. 6, 2016, the Company acquired 80% of the equity interests of U Matrin Worldwide SDN BHD in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato' Sri Eu Hin Chai and Dato' Liew. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL. The UMHL operation office remained in Malaysia and the business market will remain focus in Asia. Umatrin provides technology and services to enable consumers, merchants and other participants to conduct business in its cloud-based trading system. UNITED AIRLINES: Needs Only 12% of Flight Attendants in June ------------------------------------------------------------ Reuters, citing sources, reports that United Airlines Holdings Inc. told staff that it only has work for about 3,000 of its about 25,000 flight attendants in June 2020. It warned of job losses if demand does not recover by the time government payroll aid expires in the fall. United is paying flight attendants until Sept. 30, 2020 thanks largely to US$5 billion the airline is receiving in government payroll aid under the CARES Act, which prohibits any job or pay cuts for employees before October 2020. United's flying schedule is down by about 90 percent. United and other U.S. airlines have slashed the number of flights and are scrambling to reduce a collective US$10 billion monthly cash burn. "If you just look at a way in which our network is flying we'd need about 3,000 flight attendants to fly our schedule for June," United's managing director of inflight crew resourcing, Michael Sasse told staff, according to people who listened to an employee briefing call. United President Scott Kirby told investors this month he intends to keep the flying schedule at around 10 percent of normal until demand recovers. "But if demand remains significantly diminished on October 1,2020, we simply won't be able to endure this crisis ... without implementing some of the more difficult and painful actions," said Kirby, who takes over as CEO next week. United is burning around US$40 million in cash daily. If revenues do not recover, the company must take drastic measures to halve that burn rate in the fourth quarter, he said. It already warned that its management and administrative ranks would be around 30 percent smaller starting in October 2020. About United Airlines Headquartered in the Willis Tower in Chicago, United Airlines Holdings, Inc. (NASDAQ:UAL) owns and operates United Airlines, Inc. Before the Coronavirus pandemic, United Airlines and subsidiary United Express -- http://www.united.com/-- operated 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 million customers. United has the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operated 791 mainline aircraft and the airline's United Express partners operated 581 regional aircraft. United is a founding member of Star Alliance. US GC INVESTMENT: Has Until Dec. 1 to File Plan & Disclosure ------------------------------------------------------------ On May 14, 2020, US GC Investment, L.P., a CA Limited Partnership, filed with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, a Motion to Continue Deadline For Filing Its Disclosure Statement And Chapter 11 Plan of Reorganization, and Continue The Hearing on The Adequacy of Debtor’s Disclosure Statement. On May 15, 2020, Judge Vincent P. Zurzolo granted the motion and ordered that: * The deadline for Debtor to file its Disclosure Statement and Plan of Reorganization is continued from June 1, 2020 to December 1, 2020. * The hearing on the adequacy of Debtor's Disclosure Statement and Plan is continued from July 23, 2020 at 11:00 a.m. to Jan. 21, 2021 at 11:00 a.m. A copy of the order dated May 15, 2020, is available at https://tinyurl.com/y9yefkw5 from PacerMonitor at no charge. About US GC Investment US GC Investment, L.P., owns a building which it constructed for the operation of Golden Corral Restaurant. The 11,548-square-foot building is located on the land owned by the landlord, Fu & Sons Investment LLC. The property has a liquidation value of $1.8 million. US GC Investment sought for protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-23436) on Nov. 15, 2018. At the time of the filing, the Debtor disclosed $1,880,390 in assets and $3,964,666 in liabilities. The case has been assigned to Judge Vincent P. Zurzolo. The Debtor is represented by the Law Offices of Michael Jay Berger. VANTAGE SPECIALTY: Moody's Cuts CFR to Caa1, Outlook Negative ------------------------------------------------------------- Moody's Investors Service has downgraded Vantage Specialty Chemicals, Inc.'s Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded Vantage's first lien senior secured credit facility to Caa1 from B3 and second lien senior secured term loan to Caa3 from Caa2. The outlook is revised to negative. "The downgrade and negative outlook reflect Vantage's sustained elevated leverage, lack of free cash flow generation, and weak prospects for growth in certain end markets and debt reduction over the next 12-18 months. " said Domenick R. Fumai, Moody's Vice President and lead analyst for Vantage Specialty Chemicals, Inc. Downgrades: Issuer: Vantage Specialty Chemicals, Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Gtd Senior Secured Revolving Credit Facility, Downgraded to Caa1 (LGD3) from B3 (LGD3) Gtd Senior Secured 1st Lien Term Loan, Downgraded to Caa1 (LGD3) from B3 (LGD3) Gtd Senior Secured 2nd Lien Term Loan, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: Vantage Specialty Chemicals, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Several of Vantage's end markets remain vulnerable to shifts in market sentiment in these unprecedented operating conditions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Vantage of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered The Caa1 CFR reflects Vantage's elevated leverage with Moody's adjusted Debt/EBITDA of 9.1x and 8.7x Net Debt/EBITDA as of March 31, 2020, and with the expectation leverage will increase modestly in 2020 approaching 9.4x and 8.8x on a net debt basis. The Caa1 rating also reflects a substantial increase in debt on the balance sheet due to a series of debt-financed acquisitions over the last several years combined with a lack of consistent EBITDA growth and weak cash flow generation, further reducing the opportunities for debt paydown. In 2019, Vantage experienced increased operational challenges including higher fixed cost absorption due to lower volumes, weak glycerine pricing and less favorable product mix, which has resulted in financial performance below Moody's previous expectations for the B3 rating. Vantage's credit profile is supported by the company's established market positions in oleochemicals and their expanded specialty derivatives portfolio, which have a wide range of applications, including personal care, food, consumer products and industrial specialties. Adjusted EBITDA margins remain in the mid-teens thanks to the increasing contributions from specialty derivatives, which have higher margins than basic oleochemicals such as fatty acids and glycerine. An additional benefit incorporated in Vantage's credit profile is the company's large, diversified customer base and exposure to products used in food processing and applications for pharmaceutical and personal care products, which are relatively non-cyclical and more stable end markets. The negative outlook reflects Moody's expectations that despite some modest improvements in 1Q20 results, Vantage will continue to face weakness in several industrial end markets including autos, oil and gas and lubricants and that glyercine prices will remain depressed in 2020 as economic growth falters due to the coronavirus pandemic. Positively, several of Vantage's other end markets such as food, personal care and household industrial and institutional are experiencing relatively resilient demand. Moody's forecasts that sales and earnings will decline and leverage will increase approaching 9.4x on a gross basis and 8.8x on a net debt basis in 2020. Moody's expects that Vantage's actions to lower capital expenditures, cost reduction initiatives and improved working capital management will produce modest free cash flow of approximately $15 million in 2020, but will not have a material impact on debt reduction or future leverage. Financial performance in 2021 is expected to gradually improve as global economic conditions recover. Nonetheless, the lack of material free cash flow generation is expected to once again limit financial flexibility and debt reduction. Moreover, expectations for growth in sales and earnings between 2018 and 2021 to remain below prior years, leverage to remain elevated and limited free cash flow generation will increase refinancing risk, especially as the first lien term loan approaches maturity in 2024. Moody's does not believe that extending the revolver when it matures in 2022 will be a significant issue as the company is expected to remain modestly free cash flow positive. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would likely consider a downgrade if there is a further significant deterioration in EBITDA compared to its base case scenario, free cash flow becomes meaningfully negative on a sustained basis, if liquidity falls below $50 million or if the company makes a debt-financed acquisition or distribution to its sponsor. Although not likely over the next 12 months, Moody's would consider an upgrade if financial leverage, including Moody's standard adjustments, is sustained below 7.5x, balance sheet debt is materially reduced, the company experiences substantial revenue growth and free cash flow generation, and the private equity sponsor demonstrates a commitment to more conservative financial policies. ESG CONSIDERATIONS Moody's also evaluates environmental, social and governance factors in the rating consideration. As a specialty chemicals company, Moody's views Vantage as having moderate environmental risk related to its manufacturing sites, though it is noted that the company does not currently have any significant environmental litigation or claims. Vantage holds a number of sustainable certifications that reflect management's commitment to health, safety and the environment. Social risk is characterized as somewhat below-average as a number of raw materials used are derived from natural products such as almond, jojoba, palm oil and animal fats, which are natural and renewable. Vantage is committed to efficient use of water in irrigation, and farming practices that avoid land erosion. Governance risks are elevated due to private equity ownership by H.I.G. Capital, which includes a board of directors with majority representation by members affiliated with the sponsor and reduced financial disclosure requirements as a private company. Vantage also has high financial leverage compared to most public companies. Moody's expects Vantage to have adequate liquidity over the next 12 months with available cash on the balance sheet, minimal free cash flow generation and access to the revolving credit facility. As of March 31, 2020, the company had roughly $89 million of cash and its revolving credit facility was fully drawn as a precaution during the pandemic. Vantage's debt capital is comprised of a rated $633 million first lien term loan due in 2024 ($620 million outstanding as of March 31, 2020) and a rated $150 million second lien term loan due 2025. The company also maintains a rated $75 million first lien revolving credit facility due 2022. The Caa1 rating on the first lien credit facilities benefits from the security of substantially all assets of the company on a first priority basis. The revolving credit facility contains a springing first lien net leverage covenant, which is set at 7.5x once utilization exceeds 35%. The company is in compliance with the covenant as of March 31, 2020, and Moody's does not anticipate that Vantage will breach the covenant over the next 12 months. The $150 million second lien term loan, rated Caa3, reflects its effective subordination to first lien debt in the capital structure. The principal methodology used in these ratings was Chemical Industry published in March 2019. Vantage Specialty Chemicals, Inc. based in Chicago, Illinois, is a privately-held company that focuses on natural ingredient products including those derived from animal fat and vegetable oil. The company operates through two main complementary business segments, Oleochemicals and Specialty Derivatives, and produces more than 2,000 products for over 3,500 customers in over 50 countries. In October 2017, H.I.G Capital acquired the majority equity stake in Vantage from its previous owner, The Jordan Company. Vantage reported revenue of $679 million for the last twelve months ended March 31, 2020. VETERINARY CARE: Unsecureds to Get Full Payment in Sale-Based Plan ------------------------------------------------------------------ Veterinary Care, Inc. d/b/a VitalPet and Tvet Management, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, a Joint Combined Chapter 11 Plan and Disclosure Statement dated May 15, 2020. The Debtor sold substantially all of its assets during the Bankruptcy Cases– generating sufficient proceeds to pay all expected Creditors’ Claims, but not sufficient to satisfy certain preferential distributions rights to Interest Holders. This Plan proposes to distribute available proceeds of this settlement to pay administrative expense Claimants, secured Creditors, to the extent not already paid, priority unsecured Creditors, unsecured Creditors, subordinated Creditors, and finally, to make distributions to Interests Holders in accordance with the provisions of any applicable shareholder or other agreements regarding priority of distributions. Having secured financing to stabilize the company, the Debtors then turned their attention to monetizing the estate's assets. Ultimately, the Debtors entered into the Destination Pet APA, in which Destination Pet agreed to buy substantially all of the Debtors' assets free and clear of all pledges, liens, security interests, encumbrances, claims charges, options, and interests therein or thereon to the maximum extent permitted under the Bankruptcy Code. The purchase price, as initially defined in the Destination Pet APA, was to be $45,000,000. On Feb. 21, 2020, the Debtors filed a motion to approve the Destination Pet APA and establish bidding procedures, which the Court approved on Feb. 27, 2020. The Debtors received no qualified bids other than the Destination Pet APA and a hearing was held on March 11, 2020 to approve the Destination Pet Sale. On March 14, 2020, the Court entered the Sale Order. Following the entry of the Sale Order, the circumstances surrounding the transaction changed dramatically, and the parties sought emergency approval of and amendment to the Destination Pet APA and a related Transition Services Agreement, which, among other terms, reduced the sale price by $750,000.00 and permitted Destination Pet to use certain Transition Services until June 30, 2020, in exchange for an earlier closing date. The Destination Pet APA initially provided an outside closing date of April 30, 2020, whereas, upon entry into the amendment, Destination Pet agreed to close the transaction no later than March 31, 2020. Immediately following approval by the Bankruptcy Court of the amendment, the Destination Pet Sale closed on Friday, March 27, 2020. Class 5 will consist of all Allowed General Unsecured Claims against the Debtors. On the Effective Date, and except to the extent that a Holder of an Allowed General Unsecured Claim agrees to a less favorable treatment, Holders of Allowed Class 5 Claims will receive, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Class 5 Claim, payment in Cash in the Allowed amount of such Claim as of the TVET Petition Date. Upon the Effective Date, all equity interests in the Debtors shall be cancelled and Holders of Equity Interests in the Debtors shall receive Liquidating Trust Beneficial Interests redeemable. On the Effective Date the Liquidating Trust shall be deemed duly formed and the Debtors shall be deemed to have irrevocably transferred and assigned to the Liquidating Trust, the Liquidating Trust Assets, to hold in trust for the benefit of all Holders of Allowed Claims with respect to the Debtor pursuant to the terms of this Plan and the Liquidating Trust Agreement. Upon the Effective Date, title to the Liquidating Trust Assets shall pass to the Liquidating Trust free and clear of all Claims and Interests. The Liquidating Trust, through the Liquidating Trustee, shall be responsible for distributing Liquidating Trust Assets, or the proceeds thereof, on account of the following Claims or Interests (in the order of priority shown): (i) to satisfy outstanding, Allowed Priority Non-Tax Claim, if any; then (ii) to satisfy outstanding Other Secured Claims, if any; then (iii) to satisfy outstanding Allowed Seller Note Claims, if any; then (iv) to satisfy outstanding Allowed General Unsecured Claims, if any; then (v) subject to Article VII section F of the Plan of the Plan, to satisfy outstanding Allowed Reimbursement/Indemnification Claims, if any; and then (vi) to Allowed Equity Interests in accordance with such preferences or priorities established pursuant to the Shareholder Agreements. A full-text copy of the combined plan and disclosure statement dated May 15, 2020, is available at https://tinyurl.com/y8tlvlqo from PacerMonitor at no charge. Attorneys for the Debtors: Matthew S. Okin James W. Bartlett, Jr. David L. Curry, Jr. Johnie A. Maraist OKIN ADAMS LLP 1113 Vine St., Suite 240 Houston, Texas 77002 Tel: 713.228.4100 Fax: 888.865.2118 E-mail: mokin@okinadams.com jbartlett@okinadams.com dcurry@okinadams.com jmaraist@okinadams.com About Veterinary Care Veterinary Care Inc., d/b/a Vitalpet, offers pet care services. Petitioning creditors Dr. Warren Resell, Dr. James H. Kelly, Dr. Larry D. Wood, filed an involuntary Chapter 11 petition (Bankr. S.D. Tex. Case No. 19-35736) against Veterinary Care, Inc. on Oct. 10, 2019. The petitioners are represented by Richard L. Fuqua, Esq., at Fuqua & Associates, P.C., in Houston. TVET Management LLC filed a voluntary Chapter 11 petition (Bankr. S.D. Tex. Case No. 19-36430) on Nov. 18, 2019. On Nov. 19, 2019, the court ordered the joint administration of Veterinary Care's and TVET's bankruptcy cases. The cases are jointly administered under Case No. 19-35736. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Okin Adams LLP as their legal counsel, and The Claro Group, LLC as their financial advisor. Douglas Brickley, managing director of Claro Group, is the CRO. WEINSTEIN CO: Y Movie et al. Can't Enforce Deal, Dist. Court Says ----------------------------------------------------------------- District Judge Mary Ellen Noreika affirmed the Bankruptcy Court's order against appellants in the case captioned Y MOVIE, LLC, Y THEATRICAL, LLC., YFE HOLDINGS, INC., OA3, LLC, and RMF LLC, Appellants, v. SPYGLASS MEDIA GROUP, LLC (f/k/a LANTERN ENTERTAINMENT LLC), Appellee, Civ. No. 19-675-MN (D. Del.). Y Movie, LLC, Y Theatrical, LLC, YFE Holdings, Inc., OA3, LLC, and RMF, LLC appealed from the Bankruptcy Court's order dated April 4, 2019 entered in the Chapter 11 cases of The Weinstein Company Holdings, LLC and certain affiliates, which memorialized the Bankruptcy Court's April 2, 2019 bench ruling. The appeal arises from the sale of substantially all of the Debtors' assets to appellee Spyglass Media Group, LLC. Prior to filing their bankruptcy cases, the Debtors received financing from Y Movie et al. through "Investment Agreements," pursuant to which Appellants loaned money to the Debtors in exchange for, among other things, a security interest in the Debtors' rights in certain films. The Debtors agreed to repay these "financings" through revenues generated by the films based on a "waterfall" in the governing documents. Following the sale, Appellants filed a Motion seeking to (a) enforce the Bankruptcy Court's May 9, 2018 Sale Order, (b) confirm that Spyglass assumed the liabilities under the Investment Agreements through the asset sale, and (c) compel Spyglass to perform under the APA -- i.e., to repay the prepetition loans made to the Debtors under the Investment Agreements. The Court denied the Motion to Enforce for the reasons set forth in the Bench Ruling, including the Bankruptcy Court's determination that the Investment Agreements were non-executory contracts that are not capable of being assumed under section 365 of the Bankruptcy Code, and that the Investment Agreements were "Excluded Liabilities" under the APA that were not purchased by Spyglass. The Debtors filed voluntary petitions under Chapter 11 on March 19, 2018 in order to facilitate a sale of substantially all of their assets under section 363 of the Bankruptcy Code. The Debtors also filed a bid procedures and sale motion on the Petition Date, with Spyglass serving as the stalking horse bidder. On March 20, 2018, the Debtors sought approval of a sale of substantially all of the Debtors' assets to Spyglass, pursuant to terms negotiated prior to the Petition Date. Attached to the Sale Motion was an asset purchase agreement providing that Spyglass will acquire certain "Purchased Assets" in connection with the sale. Spyglass's offer remained the highest and best offer received by the Debtors for their assets even after the post-petition sale process. The Bankruptcy Court approved the sale of substantially all of the Debtors' assets to Spyglass for $287 million. The sale closed on July 13, 2018. The District Court finds no error in the Bankruptcy Court's determination that the Investment Agreements are not Purchased Assets under the plain language of the APA. Appellants argue that the Investment Agreements constitute Purchased Assets under the APA because they are Assumed Contracts. The APA defines "Purchased Assets" as all "rights, Claims and assets (other than Excluded Assets) of every kind and description" of the Debtors, including the assets listed on Schedule 2.1 to the APA. Schedule 2.1(e) of the APA provides that all "Assumed Contracts" are Purchased Assets. The Assumed Contracts are described as those contracts designated by Spyglass "prior to the Closing Date" that Spyglass "wishes to 'assume.'" Spyglass selected the contracts from "Section 2.8(a) of the Disclosure Schedule," which is a contracts schedule that the Debtors prepared in connection with the APA. Section 2.8(a) of the Disclosure Schedule included both "executory" and "non-executory" contracts. The Debtors and Spyglass listed each Investment Agreement on the Assumed Contracts Schedule (defined below) filed prior to the Closing Date. On July 11, 2018, prior to the Closing Date, the Bankruptcy Court entered an order approving the Second Amendment, which specified that Spyglass would be permitted to remove executory contracts from the Assumed Contracts Schedule as Purchased Assets after the Closing Date. Appellants argue that, based on the addition of the word "executory," however, the Second Amendment did not alter the requirement that Spyglass must remove non-executory contracts prior to the Closing Date. Specifically, the Second Amendment made one primary revision to Section 2.8(a) of the APA, inserting the word "executory" into Section 2.8(a) and in Schedule 2.2(h). The Debtors and Spyglass subsequently removed all but one of the Investment Agreements from the Contract Notices. Appellants argue on appeal that the addition of the word executory in the Second Amendment changed and limited the types of contracts that could be deemed Excluded Contracts post-closing such that only executory contracts could be deemed Excluded Contracts after the Closing Date. According to Appellants, there is no provision in the APA that allows Spyglass to designate a non-executory Assumed Contract as an Excluded Contract after the Closing Date. Appellants contend that the Assumed Contracts Schedule was essentially "fixed" for non-executory contracts as of the Closing Date (other than Disputed Contracts),9 and that only executory contracts and Disputed Contracts could be removed from the Assumed Contracts Schedule post-closing.10 As all of the Investment Agreements listed on the post-Closing Date notices are non-executory contracts, and because Spyglass lacked the power to remove any non-executory contracts from the Assumed Contracts Schedule after the Closing Date, Appellants argue that they now constitute Assumed Contracts; the listing of any Investment Agreements on any post-Closing notice, according to Appellants, "constituted a null and void unauthorized attempt to circumvent the terms of the APA." The Bankruptcy Court rejected this reading of the APA. And so does this Court. The Appellants' argument fails for several reasons, including that the Investment Agreements are not executory and cannot be assumed under section 365(a) of the Bankruptcy Code as a matter of law. Even if Spyglass wanted to assume the Investment Agreements under the Sale, it could not as a matter of law, notwithstanding the appearance of any Investment Agreement on any Contract Notice. The District Court finds no error in the Bankruptcy Court's ruling that the Investment Agreements are "Excluded Liabilities" under the APA based on the plain language of the APA. The assumption of liabilities under an asset purchase agreement is factored into the purchase price and the overall benefit of the bargain being negotiated between the buyer and seller; in the same vein, the exclusion of liabilities is clearly set forth in an asset purchase agreement. Here, section 2.4(c) of the APA specifically and expressly listed debt instruments and financial accommodations like the Investment Agreements as Excluded Liabilities. The Court agrees that Appellants cannot argue that Spyglass assumed its Liabilities through the sale by cobbling together a series of defined terms in the APA or by relying on Contract Notices that contained numerous disclaimers contrary to Appellants' position. Under the circumstances, the Bankruptcy Court was correct in ruling that Spyglass did not impliedly assume those liabilities. For Spyglass to have assumed them, the APA would have to have been clear and unequivocal on this point. The Bankruptcy Court correctly held that the Investment Agreements are not Purchased Assets under the APA. A copy of the Court's Memorandum Opinion dated April 2, 2020 is available at https://bit.ly/3cucmdQ from Leagle.com. Michael R. Nestor -- mnestor@ycst.com -- Andrew L. Magaziner -- amagaziner@ycst.com -- YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, DE; Robert A. Klyman -- rklyman@gibsondunn.com -- Matthew G. Bouslog -- mbouslog@gibsondunn.com -- Eric T. Haitz -- eric.haitz@katten.com -- GIBSON, DUNN, & CRUTCHER LLP, Los Angeles, CA — Attorneys for Appellants Y Movie, LLC, Y Theatrical, LLC, YFE Holdings, Inc., OA3, LLC, and RMF, LLC. R. Craig Martin, Maris J. Kandestin , DLA PIPER LLP (US), Wilmington, DE; Thomas R. Califano, Rachel Ehrlich Albanese -- rachel.albanese@dlapiper.com -- DLA PIPER LLP (US), New York, NY — Attorneys for Appellee Spyglass Media Group, LLC (f/k/a Lantern Entertainment LLC) About The Weinstein Company Holdings The Weinstein Company was an American independent film studio founded by Bob and Harvey Weinstein in 2005. The Weinstein Company Holdings LLC and 54 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-10601) on March 19, 2018 after reaching a deal to sell all assets to Lantern Asset Management as stalking horse bidder. The Weinstein Company Holdings estimated $500 million to $1 billion in assets and $500 million to $1 billion in liabilities. Lantern ultimately emerged as successful bidder following an auction. The Court approved the sale for $287 million. The Hon. Mary F. Walrath is the case judge. Cravath, Swaine & Moore LLP is the Debtors' bankruptcy counsel, with the engagement led by Paul H. Zumbro, George E. Zobitz, and Karin A. DeMasi, in New York. Richards, Layton & Finger, P.A., is the local counsel, with the engagement headed by Mark D. Collins, Paul N. Heath, Zachary I. Shapiro, Brett M. Haywood, and David T. Queroli, in Wilmington, Delaware. Bernstein Litowitz Berger & Grossmann, LLP, as special litigation counsel. The Debtors also tapped FTI Consulting, Inc., as restructuring advisor; Moelis & Company LLC as investment banker; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The Office of the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on March 28, 2018. The committee retained Pachulski Stang Ziehl & Jones, LLP as its legal counsel, and Berkeley Research Group, LLC as its financial advisor. YOUNG MEN'S: Seeks to Hire Hinkle Law Firm as Legal Counsel ----------------------------------------------------------- The Young Men's Christian Association of Topeka, Kansas seeks approval from the U.S. Bankruptcy Court for the District of Kansas to hire Hinkle Law Firm, LLC as its legal counsel. The firm's services will include legal advice concerning Debtor's powers and duties under the Bankruptcy Code, negotiation of financing agreements, and the preparation of a Chapter 11 plan. The firm's attorneys will be paid at hourly rates as follows: Edward Nazar, Esq. $300 Martin Ufford, Esq. $285 W. Thomas Gilman, Esq. $285 Nicholas Grillot, Esq. $260 Edward Nazar, Esq., at Hinkle Law Firm, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Edward J. Nazar, Esq. Hinkle Law Firm, LLC 1617 N. Waterfront Parkway, Suite 400 Wichita, KS 67206 Tel: 316-267-2000 Email: enazar@hinklaw.com About Young Men's Christian Association The Young Men's Christian Association of Topeka, Kansas -- https://www.ymcatopeka.org/ -- is a tax-exempt organization that is focused on youth development, healthy living and social responsibility. For more information, visit https://www.ymcatopeka.org/. Young Men's Christian Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 20-20786) on May 21, 2020. At the time of the filing, the Debtor disclosed $4,850,289 in assets and $5,490,339 in liabilities. Judge Dale L. Somers oversees the case. The Debtor is represented by Hinkle Law Firm, LLC. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Asset Enchancement, Inc. Bankr. S.D. Fla. Case No. 20-15782 Chapter 11 Petition filed May 27, 2020 See https://is.gd/L53yIH represented by: Gary M. Murphree, Esq. A.M. LAW, LLC E-mail: pleadings@amlaw-miami.com In re Schreiner's Fine Sausages, Inc. Bankr. C.D. Cal. Case No. 20-14808 Chapter 11 Petition filed May 26, 2020 See https://is.gd/E4bFlm represented by: Robert B. Rosenstein, Esq. ROSENSTEIN & ASSOCIATES E-mail: robert@thetemeculalawfirm.com In re Royal Transport Express, LLC Bankr. E.D. Tex. Case No. 20-41227 Chapter 11 Petition filed May 26, 2020 See https://is.gd/t7LCAE represented by: Eric A. Liepins, Esq. ERIC A. LIEPINS Email: eric@ealpc.com In re JM Brown Properties, LLC Bankr. M.D.N.C. Case No. 20-10475 Chapter 11 Petition filed May 26, 2020 See https://is.gd/lulKjD represented by: Samantha K. Brumbaugh, Esq. IVEY, MCCLELLAN, GATTON & SIEGMUND, LLP E-mail: skb@iveymcclellan.com In re Boneyard Archery, Inc. Bankr. M.D.N.C. Case No. 20-10476 Chapter 11 Petition filed May 26, 2020 See https://is.gd/tsrkMW represented by: Samantha K. Brumbaugh, Esq. IVEY, MCCLELLAN, GATTON & SIEGMUND, LLP E-mail: skb@iveymcclellan.com In re Sweet Moo's Rolled Ice Cream LLC Bankr. M.D. Tenn. Case No. 20-02678 Chapter 11 Petition filed May 26, 2020 See https://is.gd/WxIOxT represented by: Steven L. Lefkovitz, Esq. LEFKOVITZ & LEFKOVITZ E-mail: slefkovitz@lefkovitz.com In re N/F/N N/M/N Desmond Bankr. D. Kan. Case No. 20-20805 Chapter 11 Petition filed May 27, 2020 See https://is.gd/cO6yrR represented by: Colin Gotham, Esq. EVANS & MULLINIX, P.A. E-mail: cgotham@emlawkc.com In re David W. Sorenson and Sandra L. Espe Sorenson Bankr. D. Minn. Case No. 20-31456 Chapter 11 Petition filed May 27, 2020 represented by: Joseph Dicker, Esq. In re Michele DiBassie Bankr. S.D. Tex. Case No. 20-32778 Chapter 11 Petition filed May 27, 2020 represented by: Reese Baker, Esq. BAKER & ASSOCIATES E-mail: courtdocs@bakerassociates.net In re Nancy I Marty-Howe (Madison) Bankr. W.D. Wisc. Case No. 20-11410 Chapter 11 Petition filed May 28, 2020 represented by: John P. Driscoll, Esq. KREKELER STROTHER S.C. In re Christopher Wayne Holt Bankr. S.D. Tex. Case No. 20-20207 Chapter 11 Petition filed May 28, 2020 In re Kristen Adams Bankr. M.D. Fla. Case No. 20-01690 Chapter 11 Petition filed May 28, 2020 In re Kristine Wallerius Chung Bankr. D. Hawaii Case No. 20-00614 Chapter 11 Petition filed May 28, 2020 In re Stattus Technology Inc. Bankr. S.D. Fla. Case No. 20-15929 Chapter 11 Petition filed May 29, 2020 See https://is.gd/Mwc5he represented by: Alan R. Crane, Esq. FURRCOHEN P.A. E-mail: acrane@furrcohen.com In re John D. Koziarski Bankr. S.D. Fla. Case No. 20-16014 Chapter 11 Petition filed May 29, 2020 represented by: Jason Rigoli, Esq. In re Triangle Flowers of Distinction, Inc. Bankr. E.D.N.C. Case No. 20-02098 Chapter 11 Petition filed May 29, 2020 See https://is.gd/q3g9hl represented by: James C. White, Esq. J.C. WHITE LAW GROUP, PLLC E-mail: jwhite@jcwhitelaw.com In re Grumpy's Grading, LLC Bankr. M.D. Tenn. Case No. 20-02747 Chapter 11 Petition filed May 29, 2020 See https://is.gd/LQcMWg represented by: Gray Waldron, Esq. DUNHAM HILDEBRAND, PLLC E-mail: gray@dhnashville.com In re Stonewall Motors Incorporated Bankr. M.D.N.C. Case No. 20-10497 Chapter 11 Petition filed June 1, 2020 See https://is.gd/yxnj8K represented by: Dirk W. Siegmund, Esq. IVEY, MCCLELLAN, GATTON & SIEGMUND In re Denney Enterprises LLC Bankr. D. Nev. Case No. 20-50549 Chapter 11 Petition filed June 1, 2020 See https://is.gd/BnYJur represented by: Kevin A. Darby, Esq. DARBY LAW PRACTICE E-mail: kevin@darbylawpractice.com In re Waterside Construction Services, LLC Bankr. M.D. Fla. Case No. 20-04260 Chapter 11 Petition filed June 1, 2020 See https://is.gd/SW5M0Q represented by: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. E-mail: All@tampaesq.com In re NKS Holdings, Inc. Bankr. E.D. Tex. Case No. 20-10244 Chapter 11 Petition filed June 1, 2020 See https://is.gd/aIqB5G represented by: Frank J. Maida, Esq. MAIDA CLARK LAW FIRM, P. C. E-mail: fjmaida@aol.com In re Rocky Mountain Trails, LLC Bankr. E.D. Tex. Case No. 20-60306 Chapter 11 Petition filed June 1, 2020 See https://is.gd/T2bmj0 represented by: Gordon Mosley, Esq. GORDON MOSLEY E-mail: gmosley@suddenlinkmail.com In re The Rochester Holding Company of Georgia, LLC Bankr. N.D. Ga. Case No. 20-66816 Chapter 11 Petition filed May 31, 2020 See https://is.gd/A8l4sH represented by: Richard K. Valldejuli, Jr., Esq. VALLDEJULI & ASSOCIATES, LLC E-mail: ecf@valldejuliandassociates.com In re El Paso Counseling Center of Expressive Arts, P.C. Bankr. W.D. Tex. Case No. 20-30669 Chapter 11 Petition filed June 1, 2020 See https://is.gd/uLeltT represented by: Carlos Miranda, Esq. MIRANDA & MALDONADO, PC E-mail: cmiranda@eptxlawyers.com In re Tiawana Jacqueline Ford Bankr. N.D. Ga. Case No. 20-66832 Chapter 11 Petition filed June 1, 2020 represented by: William A. Rountree, Esq. ROUNTREE LEITMAN & KLEIN, LLC In re Clifford Francom Bankr. D. Utah Case No. 20-23299 Chapter 11 Petition filed June 1, 2020 represented by: Chris Andrus, Esq. In re Claude John Thompson Bankr. W.D. Tex. Case No. 20-51048 Chapter 11 Petition filed June 1, 2020 represented by: Ronald Smeberg, Esq. In re Priscilla Jean Motte Bankr. S.D. Tex. Case No. 20-32884 Chapter 11 Petition filed June 1, 2020 represented by: Nelson Jones, Esq. In re LA Property Investments LLC Bankr. N.D. Ga. Case No. 20-66891 Chapter 11 Petition filed June 2, 2020 In re Eyesight Capital, LLC Bankr. N.D. Ga. Case No. 20-66880 Chapter 11 Petition filed June 2, 2020 See https://is.gd/x4F8ZX represented by: Richard K. Valldejuli, Jr., Esq. VALLDEJULI & ASSOCIATES, LLC E-mail: ecf@valldejuliandassociates.com In re Alani Property Source Co., Inc Bankr. N.D. Ga. Case No. 20-66885 Chapter 11 Petition filed June 2, 2020 In re Gracie Clark King Bankr. M.D. Ga. Case No. 20-10493 Chapter 11 Petition filed June 2, 2020 In re Donald Dale Burkett and Kathleen Therese Burkett Bankr. D. Colo. Case No. 20-13789 Chapter 11 Petition filed June 2, 2020 represented by: Lance Goff, Esq. In re Kristin M. Jackson Bankr. M.D. Fla. Case No. 20-03131 Chapter 11 Petition filed June 2, 2020 represented by: Kenneth Herron, Esq. In re Phillip A. Minga and Konie D. Minga Bankr. N.D. Miss. Case No. 20-11955 Chapter 11 Petition filed June 2, 2020 ********* 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. 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