/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200612.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 12, 2020, Vol. 24, No. 163 Headlines 1501 MEDICAL: Unsecured Will Recover 10% of Its Claim ACADEMY OF CHARTER SCHOOLS: Fitch Withdraws B Issuer Default Rating ACADIA HEALTHCARE: Moody's Rates New Unsec. Notes 'Caa1' ADVANTAGE HOLDCO: U.S. Trustee Appoints Creditors' Committee AEMETIS INC: Nullifies Option Grant to Comply with Nasdaq Rule AKORN INC: Seeks to Hire Kirkland & Ellis as Counsel AKORN INC: Seeks to Hire Richards Layton as Co-Counsel AKORN INC: U.S. Trustee Appoints Creditors' Committee ALASKA AIR: S&P Cuts ICR to BB- on Steep Decline in Travel Demand AMERICAN AXLE: S&P Rates New $400MM Senior Unsecured Notes 'B-' AMERICAN EQUITY: Fitch Rates $300MM Series B Preferred Stock 'BB' APC AUTOMOTIVE: Hires Stretto as Claims and Noticing Agent APEX TOOL: Moody's Lowers CFR to Caa1, Outlook Stable API AMERICAS: Court Approves Disclosures and Plan on Interim Basis ASTRIA HEALTH: Closes 4 Washington Clinics to Cut Costs BLUESTEM BRANDS: June 26 Auction of All Assets Set BRADLEY INVESTMENTS: Unsecureds Owed $1.7M to Get $168K in Plan BWX TECHNOLOGIES: S&P Rates New $400MM Senior Unsecured Notes 'BB' BYRDLAND PROPERTIES: U.S. Trustee Unable to Appoint Committee CAMPBELL & SON: Gets Court Approval to Hire Mediator CANWEL BUILDING: DBRS Cuts Issuer Rating to B, Alters Trend to Neg. CENTRAL PALM BEACH SURGERY: U.S. Trustee Appoints Committee CFRA HOLDINGS: Sets Bidding Procedures for All Assets COMCAR INDUSTRIES: Adams & Service Buying All CTL Assets for $9M COMCAR INDUSTRIES: CTT Buying All CT Assets for $6.8 Million COMCAR INDUSTRIES: White Willow Buying All MCT Assets for $2.3M COMMUNITY PROVIDER: Sets Procedures for Sale of De Minimis Assets CORAL POINTE: Court Approves Disclosure Statement CRUZ TRUCKING: Seeks to Hire Herron Hill as Attorney DANCEL LLC: Franchisor Objects to Disclosure Statement DASEKE COMPANIES: Moody's Confirms B3 CFR, Outlook Stable DELTA AIR: Fitch Assigns BB+/RR4 Rating on New Unsecured Notes DENNIS HELLYER: Oak Grove Buying Hancock County Property for $15K DIAMONDBACK INDUSTRIES: Seeks to Hire Foley & Lardner as Counsel DIAMONDBACK INDUSTRIES: Seeks to Hire Stretto as Solicitation Agent DN ENTERPRISES: Selling Eight Omaha Investment Properties for $368K DRIVETIME AUTOMOTIVE: S&P Affirms 'CCC+' ICR; Outlook Negative DYNAMIC PRECISION: S&P Cuts ICR to 'CCC'; Outlook Developing ECO-STIM ENERGY: Panel Taps Dundon Advisers as Financial Advisers EXIDE HOLDINGS: Noteholders Buying All Assets for $430 Million EXTRACTECH LLC: U.S. Trustee Appoints Creditors' Committee FARM STATION: Proposes Auction Sale of Vint Hill Assets FIRST FLORIDA: Kunzes Object to Disclosure Statement FOODFIRST GLOBAL: GPEE Buying 45 Resto Locations for $45 Million FORESIGHT ENERGY: Court Approves Disclosure Statement FRANK INVESTMENTS: Keystone Buying Hammonton Property for $150K FRASER'S BOILER: 2 Creditors Removed as Committee Members FREEMAN MOBILE: Hires Aligner Guru as Support Provider FREEMAN MOBILE: Hires Aligner Olinville as Support Provider FREEMAN MOBILE: Hires Galvan Messick as Special Counsel FREEMAN MOBILE: Hires Next Chapter as Service Provider FREEMAN MOBILE: Hires Oneiric Intelligent as Service Provider FRICTIONLESS WORLD: Agtec Appointed as New Committee Member GALILEO LEARNING: Hires Stretto as Administrative Advisor GEORGIA DIRECT: Employee Buying 2013 GMC Sierra Truck for $5K GGI HOLDINGS: Franchisees Can File Panel Application Until June 15 GGI HOLDINGS: Gold's Gym Woodbridge Appointed as Committee Member GRANITE TACTICAL: Court Confirms Reorganization Plan GREEN WORLD: Voluntary Chapter 11 Case Summary GREG HOMESLEY: Court Approves Disclosure Statement GREGORY A. HALL: $170K Sale of Savannah Property to Whitefield OK'd GRIFFON CORP: Fitch Rates $150MM Unsec. Notes 'B+', Outlook Neg. H.R.P. II: July 8 Hearing on Disclosure Statement HARTSHORNE HOLDINGS: Committee Taps B. Riley as Financial Advisor HEARTS AND HANDS: June 30 Hearing on Disclosure Statement HILLENBRAND INC: Fitch Rates $300MM Unsecured Notes 'BB+/RR4' HILLENBRAND INC: S&P Rates New $300MM Senior Unsecured Notes 'BB+' HORIZON THERAPEUTICS: Moody's Hikes CFR to Ba2, Outlook Stable HORNBECK OFFSHORE: June 19 Hearing on Plan & Disclosures HOWARD JOHNSON: Jezierski Buying 2007 Dodge Sprinter Van for $10K IFS SECURITIES: U.S. Trustee Unable to Appoint Committee IGLESIA ROCA: Asks July 3 Extension to File Disclosures and Plan ILLUMINATE BUYER: Moody's Assigns B2 CFR, Outlook Stable INTERNATIONAL GAME: S&P Rates Senior Secured Notes 'BB' IQVIA HOLDINGS: S&P Affirms 'BB+' ICR Amid Delays to Deleveraging IQVIA INC: Moody's Rates New Senior Unsecured Notes 'Ba3' JAN THOMAS: Hearing on $450K Dewey Beach Property Sale Abated JASON INC: S&P Downgrades ICR to 'D' on Bankruptcy Proceedings JOSEPH MARTIN THOMAS: Charltons Buying Erie Property for $287K JUST FOR YOU: Unsecureds Will be Paid in Full Under Plan KEYSTONE PIZZA: U.S. Trustee Unable to Appoint Committee KIM DOLLEH: U.S. Trustee Unable to Appoint Committee KLAUSNER LUMBER TWO: Case Summary & 29 Largest Unsecured Creditors KMCO LLC: Court Approves Sale to Altivia KRISJENN RANCH: U.S. Trustee Unable to Appoint Committee LATAM AIRLINES: U.S. Trustee Appoints Creditors' Committee LEVEL 3 FINANCING: Fitch Rates $1BB Unsec. Notes Due 2028 'BB/RR2' LEVEL 3 FINANCING: Moody's Rates New $1BB Sr. Unsec. Notes 'Ba3' LOOKOUT RIDGE: To Satisfy All Claims From Sale of Texas Property LVI INTERMEDIATE: Hires Donlin Recano as Administrative Advisor MERIDIAN MARINA: Unsecureds to Get Lump Sum Payment of $299K METRO CHRISTIAN: U.S. Trustee Unable to Appoint Committee MH SUB I: Moody's Rates New $500MM Incremental 1st Lien Loan 'B2' MILLS FORESTRY: U.S. Trustee Unable to Appoint Committee NASCAR HOLDINGS: Moody's Cuts CFR to Ba3 & Alters Outlook to Neg. NATEL ENGINEERING: Moody's Confirms B3 CFR & Alters Outlook to Neg NEIMAN MARCUS: Hires Jackson Walker as Co-Counsel NEIMAN MARCUS: Hires Mr. Weinsten of Berkeley as CRO NEIMAN MARCUS: Seeks to Hire Kirkland & Ellis as Counsel NEW EMERALD: Gets Court Approval to Hire RSG, Appoint CRO NEW GOLD: Moody's Rates New $400MM Unsec. Notes Due 2027 'Caa1' NEW YORK HELICOPTER: Sets Bid Procedures for All Assets NORTH TAMPA: Hires Jennis Law as Special Counsel OLEUM EXPLORATION: Taps Chamberlin Law as Special Counsel OMNITRACS HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR P & E HARMONY: Oct. 1 Requested Date to File Plan and Disclosures P&L DEVELOPMENT: Fitch Alters Outlook on 'B-' IDR to Positive PHOENIX SERVICES: S&P Alters Outlook to Negative, Affirms 'B' ICR PRESTIGE-PLUS HEALTH: Court Approves Disclosure Statement QAMM PROPERTIES: Case Summary & 6 Unsecured Creditors RGIS SERVICES: Moody's Lowers CFR to Ca, Outlook Negative RIO HONDO ISD: Moody's Cuts GO Rating to Ba1, Outlook Negative ROLLING MEADOWS: Fitch Affirms BB+ Rating on $16MM 2012 Bonds RRNB 8400 LLC: Seeks to Hire Villa & White as Counsel S.MYERS FARMS: Hires Carmody MacDonald as Counsel SAGICOR FINANCIAL: Fitch Affirms 'BB' IDR & 'BB-' Sr. Debt Rating SAINT JAMES APARTMENT: Einung Buying Remaining Assets for $3.2M SHANNON STALEY: Dollar Bank Questions Enterprise Exit Financing SHEET METAL: Court Conditionally Approves Disclosure Statement SIRIUS XM: S&P Rates New $1BB Senior Unsecured Notes 'BB' SKLAR EXPLORATION: Taps CR3 Partners as CRO SPECIALTY’S CAFE: Files for Chapter 7 Bankruptcy SPEEDWAY MOTORSPORTS: Moody's Cuts CFR to B1, Outlook Negative STAGE STORES: Hires Berkeley Research Group as Financial Advisor STAGE STORES: Seeks Approval to Hire Kirkland & Ellis as Counsel STEVEN BOYUM: Samuelson Buying Eau Claire County Property for $1.3M STREBOR SPECIALTIES: Vapco Buying Equipment for $142K SUNGARD AS: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative TELEPHONE & DATA: Fitch Affirms BB+ LongTerm IDRs, Outlook Stable TOOJAY'S MANAGEMENT: U.S. Trustee Unable to Appoint Committee TRAVEL LEADERS: Moody's Lowers CFR to Caa3, Outlook Negative TUESDAY MORNING: U.S. Trustee Appoints Creditors' Committee TWIFORD ENTERPRISES: Plan Admin Taps SLBiggs as Accountant UFC HOLDINGS: Moody's Assigns B2 Rating on New $150MM Term Loan UNIVISION COMMUNICATIONS: S&P Rates $2BB First-Lien Term Loan 'B' VOYAGER AVIATION: DBRS Lowers LongTerm Issuer Rating to BB(low) WATCO COMPANIES: Moody's Confirms B2 CFR, Outlook Stable WATKINS NURSERIES: Tidewater Buying Compost Turner for $10.5K WAYNE HEALTHCARE: Fitch Affirms BB+ IDR, Outlook Stable WESTWIND MANOR: K.L. McKelvey Buying Heddles Hideaway for $500K WESTWIND MANOR: Sets Bidding Procedures for Baneberry Golf Club WESTWIND MANOR: TRG 208 Buying Lakota Golf Club for $1.5 Million WHITING PETROLEUM: Hires Deloitte & Touche as Independent Auditor WILLOUGHBY ESTATES: Unsecureds Will Recover Full Amount of Claim YANNI PIZZA: U.S. Trustee Unable to Appoint Committee [*] Holland & Knight: Impact of Commercial Bankruptcy on Landlords [*] Non-Bankruptcy Filing Options Available for Cannabis Companies [^] BOOK REVIEW: THE SUCCESSFUL PRACTICE OF LAW ********* 1501 MEDICAL: Unsecured Will Recover 10% of Its Claim ----------------------------------------------------- 1501 Medical, P.C., submitted a Chapter 11 Plan and a Disclosure Statement. The Plan will be funded from the continuous income stream of the active medical practice and billing of 1501 Medical P.C., outstanding receivables, as well as funds accumulated on the Debtor’s DIP account. Class I - Unsecured claims of Navitas Credit Corp with a total claim of $157,241. The Debtor proposes to pay 10% dividend of their allowed claims in 24 equal monthly installments upon the Effective Date of this Plan. This class is impaired. Class II – Unsecured Disputed Claims of JP Morgan Chase Bank with a total claim of $94,000. Up to the date of the filing of this Disclosure Statement, JP Morgan Chase Bank, has not filed claim in the Debtor's case. The bar date to file a claim, expired on May 8, 2020. It is the Debtor's position that JP Morgan Chase Bank is now barred from filing in the Debtor’s case and are thus not afforded treatment thereunder. A full-text copy of the Disclosure Statement dated May 20, 2020, is available at https://tinyurl.com/ya6bkt4g from PacerMonitor.com at no charge. Attorney for debtor 1501 Medical, P.C.: ALLA KACHAN, ESQ 3099 Coney Island Ave, 3rd Floor Brooklyn, NY 112335 Tel: (718) 513-3145 Fax: (347) 342-315 E-mail: alla@kachanlaw.com About 1501 Medical, P.C. 1501 Medical, P.C., sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-40972) on Feb. 18, 2020, listing less than $1 million in both assets and liabilities. Alla Kachan, Esq., at LAW OFFICES OF ALLA KACHAN, P.C., is the Debtor's counsel. E-mail: alla@kachanlaw.com ACADEMY OF CHARTER SCHOOLS: Fitch Withdraws B Issuer Default Rating ------------------------------------------------------------------- Fitch Ratings has withdrawn the following Issuer Default Rating: -- Academy of Charter Schools (CO) IDR; Previous Rating: 'B'/Outlook Stable. Additionally, Fitch has withdrawn its ratings for the following bonds due to pre-refunding activity: -- Colorado Educational & Cultural Facilities Authority (CO) (The Academy Project) charter school revenue bonds series 2010A (pre-refunded maturities only - 19645RMP3) previous rating: 'AA-'/Outlook Stable; -- Colorado Educational & Cultural Facilities Authority (CO) (The Academy Project) charter school revenue bonds series 2010B (pre-refunded maturities only - 19645RMR9, 19645RMS7) previous rating: 'B'/Outlook Stable. The ratings were withdrawn because the bonds were pre-refunded and the IDR is no longer considered by Fitch to be relevant to the agency's coverage. ACADIA HEALTHCARE: Moody's Rates New Unsec. Notes 'Caa1' -------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Acadia Healthcare Company, Inc.'s new senior unsecured notes. There is no change to Acadia's existing ratings, including the B2 Corporate Family Rating (CFR), B2-PD Probability of Default Rating, Ba3 senior secured ratings and Caa1 unsecured ratings. There is also no change to the Speculative Grade Liquidity Rating of SGL-3 or the stable outlook. Proceeds from the new senior unsecured notes will be used to refinance upcoming bond maturities that come due in March 2021 and July 2022, respectively. Moody's views the proposed transaction as being modestly credit positive, as it will reduce refinancing risk in a leverage-neutral manner. Acadia's adjusted debt/EBITDA approximated 5.9 times as of March 31, 2020. This benefit will be partly mitigated by Moody's expectation for higher interest expense post-transaction close. While Moody's believes that the coronavirus impact on Acadia will be moderate relative to other healthcare providers, the pandemic will nonetheless be a headwind, constraining the company's ability to materially grow earnings. Further, Moody's believes the company will continue to deploy a significant portion of its cash flow towards growth cap-ex in lieu of debt repayment. While the potential sale of the underperforming UK business offers an opportunity for deleveraging, the timing of such an event is uncertain, in light of global disruption caused by the pandemic. Acadia Healthcare Company, Inc. Ratings assigned: New senior unsecured notes due 2028 at Caa1 (LGD5) RATINGS RATIONALE The B2 CFR is constrained by Acadia's high financial leverage as well as its reliance on government reimbursement, both in the United States (Medicare and Medicaid) and in the United Kingdom (National Health Service). Acadia also has exposure to fluctuations in the British pound and changes in economic conditions in the UK. There are also risks associated with the rapid pace of growth through acquisitions, opening of new facilities and the addition of new beds in existing facilities. Further, the continuing spread of the coronavirus will temporarily reduce patient volumes at Acadia's behavioral health facilities. The B2 rating is supported by the company's large scale and good business and geographic diversity within the behavioral health care industry. It is also supported by attractive industry fundamentals, including growing demand for services and increasing willingness of payors, including governments, to pay for behavioral health and addiction treatment services. The B2 rating is also supported by the company's strong operating cash flow and adequate liquidity. The stable outlook reflects the non-elective nature of Acadia's services, good scale and diversity by geography and behavioral service line. These factors will help to partially mitigate the company's high financial leverage, which is unlikely to decline in the near-term due to the impact of the coronavirus on patient volumes and costs. As an operator of inpatient behavioral health hospitals, Acadia faces high social risk. Any incident, such as a patient fatality or a patient not receiving appropriate care at one of Acadia's facilities, can result in increased regulatory burdens, government investigations, and negative publicity. Acadia also has environmental risk associated with inclement weather and natural disasters. For example, Hurricane Dorian weakened patient volumes in some of the company's North Carolina and Florida facilities in September 2019, while wildfires in California in October 2019 necessitated the evacuation of three of the company's facilities and dampened the patient volumes of others. From a governance perspective, the significant amount of capital that Acadia has allocated to acquisitions and new bed additions has not yet demonstrated adequate returns, given that Acadia's LTM EBITDA as of March 31, 2020 is below where it was in 2016. The Speculative Grade Liquidity Rating of SGL-3 rating incorporates upcoming debt maturities and rising refinancing risk. The company has a $500 million senior secured revolving credit facility and $340 million of term loan debt that mature in November 2021. That said, Moody's expects that Acadia will maintain adequate liquidity over the next 12-18 months. Liquidity is supported by strong cash flow after maintenance capex (before growth capex) and significant availability on the revolving credit facility. The company has three financial maintenance covenants, the tightest of which is the total net leverage covenant which has step-downs beginning at the end of 2020. Moody's expects the cushion under this covenant will decline meaningfully in 2021. That said, Moody's recognizes that the company has flexibility to sell assets or reduce growth capex in order to reduce debt and improve covenant cushion and liquidity. Liquidity will also benefit from the CARES Act and other government programs, which will provide both grant funding and advanced Medicare payments to Acadia. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if debt to EBITDA is expected to be sustained above 6.5 times. Adverse reimbursement developments could also result in a rating downgrade. Moody's could also downgrade the ratings if Acadia's financial policy becomes more aggressive, with respect to the use of leverage for acquisitions or shareholder returns. Finally, a downgrade could occur if liquidity weakens. The ratings could be upgraded if the company reduces and sustains debt/EBITDA below 5.5 times and balances expansion opportunities and acquisitions with debt reduction. Reduced reliance on Medicaid and the UK's National Health Service (NHS) would also support an upgrade. Acadia is a provider of behavioral health care services. Acadia provides psychiatric and chemical dependency services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs. Acadia operates behavioral health facilities spanning across the US, Puerto Rico, England, Wales, and Scotland. As of March 31, 2020, Acadia generated LTM revenue of approximately $3.1 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. ADVANTAGE HOLDCO: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------ The U.S. Trustee for Regions 3 and 9 on June 9, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Advantage Holdco, Inc. and its affiliates. The committee members are: 1. Safelite Group Attn: Kathy Paskvan 7400 Safelite Way Columbus, OH 43235 Phone: (614) 210-9544 Email: kathy.paskvan@safelite.com 2. EDS Service Solutions, LLC Attn: Sonya Locke 400 Galleria Parkway, Suite 1820 Atlanta, GA 30339 Phone: (404) 445-8255 Fax: 404-445-8342 Email: slocke@edsservicesolutions.com 3. Exultancy, Inc. Attn: Swati Diwan 5 Independence Way, Suite 300 Princeton, NJ 08540 Phone: (609) 514-5111 Email: swati@exultancy.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 Advantage Holdco Advantage Holdco, Inc., doing business as Advantage Rent a Car, is a car rental company with 50 locations in the U.S. and 130 international affiliate locations. The parent entity, Advantage Holdco, is owned by Toronto-based Catalyst Capital Group. Advantage -- http://www.advantage.com/-- has locations in 27 markets, including New York, Los Angeles, Orlando, Las Vegas and Hawaii, according to its website. Advantage Holdco and six related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11259) on May 26, 2020. As of the bankruptcy filing, Advantage Holdco was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. The Hon. John T. Dorsey is the case judge. Debtors tapped Cole Schotz P.C. as their legal counsel, and Mackinac Partners, LLC as their restructuring advisor. AEMETIS INC: Nullifies Option Grant to Comply with Nasdaq Rule -------------------------------------------------------------- Aemetis, Inc. received a letter from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC on June 5, 2020, regarding the Company's violation of Nasdaq Listing Rule 5635(c) in connection with the Company's granting of an option to purchase an aggregate of 25,000 shares of its common stock from a non-shareholder approved inducement plan. The Rule generally requires shareholder approval prior to an issuance of securities in connection with any equity compensation arrangement. The Staff determined that shareholder approval was required for the Option Grant, and because such shareholder approval was not received, the Company violated the Rule. To remediate this non-compliance, the Company promptly nullified the Option Grant and restored the plan to its full number of shares available for issuance. Accordingly, the Staff determined in the Letter that the Company has regained compliance with the Rule, subject to this disclosure. About Aemetis Headquartered in Cupertino, California, Aemetis -- http://www.aemetis.com/-- is an advanced renewable fuels and biochemicals company focused on the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products by the conversion of ethanol and biodiesel plants into advanced biorefineries. Founded in 2006, Aemetis owns and operates a 60 million gallon-per-year ethanol production facility in the California Central Valley near Modesto. Aemetis also owns and operates a 50 million gallon per year renewable chemical and advanced fuel production facility on the East Coast of India producing high quality distilled biodiesel and refined glycerin for customers in India and Europe. Aemetis is building a biogas digester, pipeline and gas cleanup project to convert dairy waste gas into renewable natural gas, and is developing a plant to convert waste orchard wood into cellulosic ethanol. Aemetis holds a portfolio of patents and related technology licenses for the production of renewable fuels and biochemicals. Aemetis recorded a net loss of $39.48 million for the year ended Dec. 31, 2019, compared to a net loss of $36.29 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $103.81 million in total assets, $60.95 million in total current liabilities, $209.55 million in total long term liabilities, and a total stockholders' deficit of $166.69 million. AKORN INC: Seeks to Hire Kirkland & Ellis as Counsel ---------------------------------------------------- Akorn, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP and Kirkland & Ellis International LLP, as bankruptcy counsel to the Debtors. Akorn, Inc. requires Kirkland & Ellis to: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b. advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; c. attend meetings and negotiating with representatives of creditors and other parties in interest; d. take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; e. prepare pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f. represent the Debtors in connection with obtaining authority to continue using cash collateral and postpetition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the Court and any appellate courts to represent the interests of the Debtors' estates; i. advise the Debtors regarding tax matters; j. take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and k. perform all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases, including: (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. Kirkland & Ellis will be paid at these hourly rates: Partners $1,075 to $1,845 Of Counsel $625 to $1,845 Associates $610 to $1,165 Paraprofessionals $245 to $460 On June 11, 2019, the Debtors paid $50,000. During the 90-day period before the Petition Date, the Debtors paid Kirkland & Ellis an advance payment retainer in the amount of $7,641,923.57. Kirkland & Ellis will also be reimbursed for reasonable out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the following is provided in response to the request for additional information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Kirkland represented the Debtors during the twelve- month period before the Petition Date, using the hourly rates listed below: Partners $1,075 to $1,845 Of Counsel $625 to $1,845 Associates $610 to $1,165 Paraprofessionals $245 to $460 Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Yes, for the period from May 20, 2020 through September 30, 2020. Patrick J. Nash, Jr., partner of Kirkland & Ellis LLP and Kirkland & Ellis International LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Kirkland & Ellis can be reached at: Patrick J. Nash, Jr., Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, IL 60654 Tel: (312) 862-2000 Fax: (312) 862-2200 E-mail: patrick.nash@kirkland.com About Akorn, Inc. Akorn, Inc. -- http://www.akorn.com/-- is a specialty pharmaceutical company that develops, manufactures, and markets generic and branded prescription pharmaceuticals, branded as well as private-label over-the-counter consumer health products, and animal health pharmaceuticals. Akorn is headquartered in Lake Forest, Illinois, and maintains a global manufacturing presence, with pharmaceutical manufacturing facilities located in Illinois, New Jersey, New York, Switzerland, and India. Akorn, Inc., based in Lake Forest, Illinois, filed a Chapter 11 petition (Bankr. D. Del. Lead Case No. 20-11177) on May 20, 2020. In the petition signed by Joseph Bonaccorsi, authorized signatory, the Debtor disclosed $1,032,275,000 in assets and $1,051,769,000 in liabilities. The Hon. John T. Dorsey oversees the case. KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsel; RICHARDS, LAYTON & FINGER, P.A. as local counsel; ALIXPARTNERS, LLP as restructuring advisor; PJT PARTNERS LP as investment banker; GRANT THORNTON LLP as tax advisor; KURTZMAN CARSON CONSULTANTS LLC as claims and noticing agent. AKORN INC: Seeks to Hire Richards Layton as Co-Counsel ------------------------------------------------------ Akorn, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Richards Layton & Finger, P.A., as bankruptcy co-counsel to the Debtors. Akorn, Inc. requires Richards Layton to: a) assist in preparing all petitions, motions, applications, orders, reports, and papers necessary or desirable to commence one or more cases under the Bankruptcy Code; b) advise the Debtor of its rights, powers, and duties as a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code; c) assist in preparing on behalf of the Debtors all motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtors' estate; d) take all necessary actions to protect and preserve the Debtor's estate, including the prosecution of claims and causes actions on the Debtor's behalf, the defense of actions commenced against the Debtor in the Chapter 11 Case, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the Debtor; e) assist in preparing on behalf of the Debtor all motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtor's estate; f) assist in preparing a disclosure statement and any related documents and pleadings necessary to solicit votes on any plan of reorganization proposed by the Debtor; g) assist in preparing any plan of reorganization; h) prosecute on behalf of the Debtor any proposed plan and seeking approval of all transactions contemplated therein and in any amendments thereto; and i) perform all other necessary legal services in connection with the prosecution of this Chapter 11 Case. Richards Layton will be paid at these hourly rates: Directors $725 to $1,200 Counsels $650 to $700 Associates $400 to $665 Paraprofessionals $295 Richards Layton will also be reimbursed for reasonable out-of-pocket expenses incurred. Daniel J. DeFranceschi, a partner of Richards Layton & Finger, P.A., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Richards Layton can be reached at: Paul N. Heath, Esq. Amanda R. Steele, Esq. Zachary I. Shapiro, Esq. Brett M. Haywood, Esq. RICHARDS LAYTON & FINGER, P.A. One Rodney Square, 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 E-mail: heath@rlf.com steele@rlf.com shapiro@rlf.com haywood@rlf.com About Akorn, Inc. Akorn, Inc. -- http://www.akorn.com/-- is a specialty pharmaceutical company that develops, manufactures, and markets generic and branded prescription pharmaceuticals, branded as well as private-label over-the-counter consumer health products, and animal health pharmaceuticals. Akorn is headquartered in Lake Forest, Illinois, and maintains a global manufacturing presence, with pharmaceutical manufacturing facilities located in Illinois, New Jersey, New York, Switzerland, and India. Akorn, Inc., based in Lake Forest, Illinois, filed a Chapter 11 petition (Bankr. D. Del. Lead Case No. 20-11177) on May 20, 2020. In the petition signed by Joseph Bonaccorsi, authorized signatory, the Debtor disclosed $1,032,275,000 in assets and $1,051,769,000 in liabilities. The Hon. John T. Dorsey oversees the case. KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsel; RICHARDS, LAYTON & FINGER, P.A. as local counsel; ALIXPARTNERS, LLP as restructuring advisor; PJT PARTNERS LP as investment banker; GRANT THORNTON LLP as tax advisor; KURTZMAN CARSON CONSULTANTS LLC as claims and noticing agent. AKORN INC: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------- The U.S. Trustee for Region 3 appointed a committee to represent unsecured creditors in the Chapter 11 cases of Akorn Inc. and its affiliates. The committee members are: 1. McKesson Corporation Attn: Ben Carlsen, Esq. 1564 Northeast Expressway Atlanta, GA 30329 Phone: 404-461-4232 ben.carlsen@mckesson.com 2. Douglas Pharmaceuticals America Ltd. Attn: Kent Durbin Te Pai Place Henderson, New Zealand Phone +6421445256 kentd@douglas.co.nz 3. Walgreen Co. Attn: Darin Osmond, Esq. 104 Wilmot Rd, 4th Floor MS 144P Deerfield, IL 60015 Phone: 847-315-4692 darin.osmond@walgreens.com 4. Rising Pharma Holdings, Inc. Attn: Dipesh Patel, Esq. 2 Tower Center Blvd., Suite 1401 East Brunswick, NJ 08816 Phone: 908-296-0998 dpatel@risingpharma.com 5. Gabelli Funds, LLC Attn: David M. Goldman, Esq. One Corporate Center Rye, NY 10580 Phone: 914-921-5100 dgoldman@gabelli.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 Akorn Inc. Akorn, Inc. (Nasdaq: AKRX) -- http://www.akorn.com/-- is a specialty pharmaceutical company that develops, manufactures, and markets generic and branded prescription pharmaceuticals, branded as well as private-label over-the-counter consumer health products, and animal health pharmaceuticals. Akorn is headquartered in Lake Forest, Ill., and maintains a global manufacturing presence, with pharmaceutical manufacturing facilities located in Illinois, New Jersey, New York, Switzerland, and India. Akorn, Inc., and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11178) on May 20, 2020. As of March 31, 2020, Debtors disclosed total assets of $1,032,275,000 and total liabilities of $1,051,769,000. Judge John T. Dorsey oversees the cases. Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their general bankruptcy counsel. Richards, Layton & Finger, P.A., is Debtors' local counsel. AlixPartners, LLP, serves as the Debtors' restructuring advisor while PJT Partners LP is the financial advisor and investment banker. Kurtzman Carson Consultants, LLC, is the notice and claims agent. ALASKA AIR: S&P Cuts ICR to BB- on Steep Decline in Travel Demand ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Alaska Air Group Inc. and Alaska Airlines Inc. to 'BB-' from 'BB' and removed all of its ratings on the companies from CreditWatch, where S&P placed them with negative implications on March 17, 2020. "We expect Alaska Air to generate negative cash flow in 2020 due to the effects of the coronavirus before returning to positive cash flow generation in 2021. While the company is reducing its capacity and some associated costs and is benefitting from the steep decline in oil prices, we expect its much weaker traffic to continue to more than offset these factors. We expect passenger traffic to begin to recover later this year and continue expanding into 2021. Specifically, we expect that Alaska's revenue will decline by about 50% in 2020 before increasing by about 45% in 2021 (albeit on a lower base). In addition, we estimate that the company's funds from operation (FFO) to debt will decline to the low-single-digit percent area in 2020, from over 60% in 2019, before improving to about 20% in 2021," S&P said. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety S&P expects Alaska Air's 2020 operating performance to be negatively affected by the continued steep decline in airline passenger traffic because of COVID-19, though the rating agency expects the company to report some recovery in 2021. "We would lower our ratings on Alaska over the next year if we believe its recovery will be more prolonged or weaker than we expect such that its FFO-to-debt ratio remains below 12% into 2021. We could also lower our rating if we foresee elevated liquidity concerns due to prolonged operational weakness or an inability to raise additional funds to meet future requirements," S&P said. "We could revise our outlook on Alaska to stable if the recovery in airline passenger traffic is stronger than we expect by the end of 2020 such that we forecast an FFO-to-debt ratio in the mid-teens percent area in 2020 and expect further improvement in 2021. We would also need to continue to assess the company's liquidity as at least adequate before raising our rating," the rating agency said. AMERICAN AXLE: S&P Rates New $400MM Senior Unsecured Notes 'B-' --------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level and '6' recovery rating to American Axle & Manufacturing Inc.'s proposed $400 million senior unsecured notes. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%; rounded estimate: 5%) recovery in the event of a payment default. American Axle intends to use the net proceeds to redeem 100% of its remaining $350 million principal outstanding under its 6.625% senior unsecured notes, including accrued interest. S&P expects the transaction to be leverage-neutral. The notes rank pari passu with American Axle's senior debt of the issuer and guarantors. American Axle & Manufacturing Holdings Inc., Metaldyne Performance Group Inc., and the subsidiary guarantors will, jointly and severally, fully and unconditionally guarantee on an unsecured basis the issuer's obligations under the notes and the indenture. "Our 'B+/Watch Neg' rating on American Axle reflects its position as a major tier one supplier of drivetrains and metal forming products to the cyclical and competitive light-vehicle industry, moderately high leverage, and consistent free operating cash flow generation. Our 'B-' issue-level rating on the proposed notes is based on preliminary terms and subject to review upon receipt of final documentation," S&P said. Ratings List American Axle & Manufacturing Inc. Issuer Credit Rating B+/Watch Neg/-- New Rating American Axle & Manufacturing Inc. Senior Unsecured US$400 mil sr nts B- /Watch Neg Recovery Rating 6(5%) AMERICAN EQUITY: Fitch Rates $300MM Series B Preferred Stock 'BB' ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to American Equity Investment Life Holding Company's (AEL) issuance of $300 million of 6.625% fixed-rate reset series B perpetual preferred stock. The ratings assigned to AEL and its operating subsidiaries are unaffected by the action. KEY RATING DRIVERS The preferred stock is notched down by three from AEL's Long-Term Issuer Default Rating (IDR), with two notches for "poor" recovery expectations consistent with standard criteria assumptions for subordinated holding company securities in a ring-fenced regulatory environment, and one notch for "minimal" non-performance risk. In line with Fitch's Insurance Rating Criteria, 100% equity credit has been assigned to the preferred stock for purposes of calculating financial leverage ratios. The series B preferred stock has no maturity, dividends are noncumulative, and the company has the option to defer them at their discretion. The series B securities rank equally with the company's outstanding preferred stock, above AEL's common stock, but are subordinated to the company's outstanding senior unsecured notes. Due to the lack of mandatory deferral features, Fitch views the securities as having "minimal" non-performance risk as defined in Fitch's criteria. The proceeds of the preferred issuance will be used for general corporate purposes, which may include capital contributions to AEL's operating subsidiaries and working capital. RATING SENSITIVITIES The ratings remain sensitive to any material change in Fitch's Rating Case assumptions with respect to the coronavirus pandemic. Periodic updates to its assumptions are possible given the rapid pace of changes in government actions in response to the pandemic, and the pace with which new information is available on the medical aspects of the outbreak. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A material adverse change in Fitch's Ratings Assumptions with respect to the coronavirus impact; -- A reduction in capitalization that results in a Prism score in the low range of 'Adequate' and an RBC ratio below 325%; -- Financial leverage above 25%; -- Sustained deterioration in operating results such that interest coverage is below 5x; -- A significant increase in lapse/surrender rates. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action is prefaced by Fitch's ability to reliably forecast the impact of the coronavirus pandemic on the financial profile of both the U.S. life insurance industry and AEL. -- AEL's ability to achieve a higher IFS rating is constrained by the company's limited diversity of earnings and cash flow given a heavy focus on fixed indexed annuities. This constraint could be overcome by exceeding Fitch's other positive rating action sensitivities. -- Continued improvement in capitalization as evidenced by a Prism score well into the 'Strong' category on a sustained basis; -- Financial leverage below 15%; -- Improved operating results and stable investment quality. APC AUTOMOTIVE: Hires Stretto as Claims and Noticing Agent ---------------------------------------------------------- APC Automotive Technologies Intermediate Holdings, LLC, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Stretto, as claims and noticing agent to the Debtors. APC Automotive requires Stretto to: (a) assist the Debtor with the preparation and distribution of all required notices and documents in accordance with the Bankruptcy Code and the Bankruptcy Rules in the form and manner directed by the Debtor and/or the Court, including: (i) notice of any claims bar date, (ii) notice of any proposed sale of the Debtor's assets, (iii) notices of objections to claims and objections to transfers of claims, (iv) notices of any hearings on a disclosure statement and confirmation of any plan of reorganization, including under Bankruptcy Rule 3017(d), (v) notice of the effective date of any plan, and (vi) all other notices, orders, pleadings, publications and other documents as the Debtor, Court, or Clerk may deem necessary or appropriate for an orderly administration of this chapter 11 case; (b) maintain an official copy of the Debtor's schedules of assets and liabilities and statements of financial affairs (collectively, the "Schedules"), listing the Debtor's known creditors and the amounts owed thereto; (c) maintain (i) a list of all potential creditors, equity holders and other parties-in-interest and (ii) a "core" mailing list consisting of all parties described in Bankruptcy Rule 2002(i), (j) and (k) and those parties that have filed a notice of appearance pursuant to Bankruptcy Rule 9010; update and make said lists available upon request by a party-in-interest or the Clerk; (d) furnish a notice to all potential creditors of the last date for filing proofs of claim and a form for filing a proof of claim, after such notice and form are approved by the Court, and notify said potential creditors of the existence, amount and classification of their respective claims as set forth in the Schedules, which may be effected by inclusion of such information (or the lack thereof, in cases where the Schedules indicate no debt due to the subject party) on a customized proof of claim form provided to potential creditors; (e) maintain a post office box or address for receiving claims and returned mail, and process all mail received; (f) maintain an electronic platform for purposes of filing proofs of claim; (g) for all notices, motions, orders or other pleadings or documents served, prepare and file or cause to be filed with the Clerk an affidavit or certificate of service within seven days of service which includes (i) either a copy of the notice served or the docket number(s) and title(s) of the pleading(s) served, (ii) a list of persons to whom it was mailed (in alphabetical order) with their addresses, (iii) the manner of service, and (iv) the date served; (h) process all proofs of claim received, including those received by the Clerk, check said processing for accuracy, and maintain the original proofs of claim in a secure area; (i) maintain the official claims register (the "Claims Register") on behalf of the Clerk; upon the Clerk's request, provide the Clerk with a certified, duplicate unofficial Claims Register; and specify in the Claims Register the following information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, (iv) the address for payment, if different from the notice address; (v) the amount asserted, (vi) the asserted classification(s) of the claim (e.g., secured, unsecured, priority, etc.), and (vii) any disposition of the claim; (j) provide public access to the Claims Registers, including complete proofs of claim with attachments, if any, without charge; (k) implement necessary security measures to ensure the completeness and integrity of the Claims Register and the safekeeping of the original claims; (l) record all transfers of claims and provide any notices of such transfers as required by Bankruptcy Rule 3001(e); (m) relocate, by messenger or overnight delivery, all of the court-filed proofs of claim to the offices of Stretto, not less than weekly; (n) upon completion of the docketing process for all claims received to date for each case, turn over to the Clerk copies of the Claims Registers for the Clerk's review (upon the Clerk's request); (o) monitor the Court's docket for all notices of appearance, address changes, and claims-related pleadings and orders filed and make necessary notations on and/or changes to the claims register and any service or mailing lists, including to identify and eliminate duplicative names and addresses from such lists; (p) identify and correct any incomplete or incorrect addresses in any mailing or service lists; (q) assist in the dissemination of information to the public and respond to requests for administrative information regarding this chapter 11 case as directed by the Debtor or the Court, including through the use of a case website and/or call center; (r) if this chapter 11 case is converted to a case under chapter 7 of the Bankruptcy Code, contact the Clerk's office within three (3) days of notice to Stretto of entry of the order converting the case; (s) 30 days prior to the close of this chapter 11 case, to the extent practicable, request that the Debtor submit to the Court a proposed order dismissing Stretto as claims, noticing, and solicitation agent and terminating its services in such capacity upon completion of its duties and responsibilities and upon the closing of this chapter 11 case; (t) within seven (7) days of notice to Stretto of entry of an order closing this chapter 11 case, provide to the Court the final version of the Claims Register as of the date immediately before the close of the case; and (u) at the close of these chapter 11 cases, (i) box and transport all original documents, in proper format, as provided by the Clerk's office, to (A) the Philadelphia Federal Records Center, 14700 Townsend Road, Philadelphia, PA 19154-1096 or (B) any other location requested by the Clerk's office, and (ii) docket a completed SF-135 Form indicating the accession and location numbers of the archived claims. Stretto will be paid at these hourly rates: Director of Solicitation $210 Solicitation Associate $190 COO and Executive VP No charge Director $175-$210 Associate/Senior Associate $65-$165 Analyst $30-$50 Prior to the Petition Date, the Debtors provided Stretto an advance in the amount of $75,000. Stretto will also be reimbursed for reasonable out-of-pocket expenses incurred. Sheryl Betance, managing director of corporate restructuring of Stretto, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Stretto can be reached at: Sheryl Betance STRETTO 410 Exchange, Ste. 100 Irvine, CA 92602 Tel: (714) 716-1872 E-mail: sheryl.betance@stretto.com About APC Automotive Technologies Intermediate Holdings, LLC APC Automotive Technologies Intermediate Holdings, LLC 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. APC Automotive Technologies Intermediate Holdings, LLC and its thirteen affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11466) on June 3, 2020. Templar Energy was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. Jonathan S. Henes, P.C. of Kirkland & Ellis LLP and Kirkland & Ellis International LLP serves as the Debtors' general bankruptcy counsel; Domenic E. Pacitti, Esq., Morton R. Branzburg, Esq., and Michael W. Yurkewicz, Esq. of Klehr Harrison Harvey Branzburg LLP serve as the local bankruptcy counsel. Jefferies Group LLC acts as the Company's financial advisor and Weinsweigadvisors LLC as restructuring advisor. Ernst & Young LLP is acting as the Company's tax advisor; and Bankruptcy Management Solutions, INC. serves as the Company's Notice, Claims, & Balloting Agent and Administrative Advisor. APEX TOOL: Moody's Lowers CFR to Caa1, Outlook Stable ----------------------------------------------------- Moody's Investors Service downgraded Apex Tool Group, LLC's (Apex) Corporate Family Rating (CFR) to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded the rating on the company's senior secured bank credit facility to B3 from B2 and senior unsecured notes to Caa3 from Caa1. The outlook remains stable. The downgrade reflects Moody's expectation of weak sales within the company's assembly power tools division coupled with a broader reduction in product demand following the COVID-19 outbreak. These factors will lead to a meaningful contraction in Apex's already weak operating performance and a deterioration in credit metrics relative to Moody's prior expectations. Downgrades: Issuer: Apex Tool Group, LLC. 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 B3 (LGD3) from B2 (LGD3) Senior Unsecured Notes, Downgraded to Caa3 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: Apex Tool Group, LLC. Outlook, Remains Stable RATINGS RATIONALE Apex's Caa1 CFR reflects high debt leverage, which will remain at or above 8.5x over the next 12-18 months, challenges in generating meaningful amounts of free cash flow, a highly competitive industry and exposure to cyclical end markets. The global recession will lower automotive and airline production, which will directly impact Apex's assembly power tools division. The rating incorporates Moody's consideration of Apex's solid market position within its hand and power tool business segments, broad range of product offerings and strong brands, its global operational footprint and distribution channels, and diversity of customers and industries served. 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 weaknesses in Apex's credit profile, including its exposure to the automotive and aerospace end markets have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Apex 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. Moody's expects Apex to maintain adequate liquidity over the next 12-18 months. Moody's expects that cash flow and the available cash balance will be sufficient for daily operations, given the company's drawing of the remaining balance on its revolver in Q1, cost savings initiatives and a reduction in capital expenditures. The stable outlook reflects Moody's expectations of improvement in EBITDA and free cash flow in the second half of 2020 following a weak second quarter. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's indicated that a rating upgrade would be predicated upon adjusted debt leverage approaching 6.25x and EBITA-to-interest coverage above 1.5x, both on a sustainable basis. In addition, an upgrade would require improvement in liquidity and sustainable positive free cash flow. A downgrade could result if the company's EBITA-to-interest coverage falls below 1.0x on a sustained basis or if liquidity weakens or should the company's leverage increase further from expected levels. Furthermore, a downgrade would result if the likelihood of a restructuring resulting in a reduction in recovery prospects for creditors increases. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Apex, headquartered in Sparks, MD, is a global manufacturer and supplier of hand and power tools for industrial, commercial, and do-it-yourself customers. The company operates two business segments: Hand Tools and Power Tools. The company serves customers in automotive, aerospace, electronics, hardware, energy, and consumer retail industries. Apex has operations in North America, Europe, Asia, Australia and Latin America. For the twelve months ended March 31, 2020, the company generated about $1.3 billion in revenue. API AMERICAS: Court Approves Disclosures and Plan on Interim Basis ------------------------------------------------------------------ Judge Christopher S. Sonchi has ordered that the Combined Disclosure Statement and Plan filed by Api Americas Inc., et al., is approved on an interim basis. The hearing to consider confirmation of the Plan is scheduled for July 15, 2020 at __:__ a.m./p.m. (ET). In order to be counted as votes to accept or reject the Combined Disclosure Statement and Plan, Ballots must be properly executed, completed and delivered, so that the Ballots are actually received no later than 5:00 p.m. (ET) on July 7, 2020. On or before July 10, 2020, the Balloting Agent will file a signed declaration setting forth the final voting results and methodology used to tabulate the votes. Upon completion of the balloting, the Balloting Agent shall certify the amount and number of allowed claims included in the Voting Classes accepting or rejecting the Combined Disclosure Statement and Plan. The Debtors shall cause such certification to be filed with the Court on or before July 10, 2020. The deadline for filing and serving written objections, including any supporting memoranda, shall be July 7, 2020 at 4:00 PM (EST). Consistent with the foregoing, the following milestone dates are approved: * The deadline to publish the confirmation hearing notice will be on or before June 8, 2020. * The deadline to file a plan supplement will be on June 25, 2020. * The voting deadline for the Combined Disclosure Statement and Plan will be on July 7, 2020 at 5:00 p.m. (ET). * The objection Deadline for Combined Disclosure Statement and Plan will be on July 7, 2020 at 4:00 p.m. (ET). * The deadline to file Rule 3018 motions will be on June 18, 2020. * The deadline to file voting declarations will be on July 10, 2020. * The deadline to file a confirmation brief and reply to objections will be on July 10, 2020. About API Americas API Americas Inc. -- http://www.apigroup.com/-- is a manufacturer of foils, laminates, and holographic materials. Among other customers, API Americas provides packaging to companies in the premium drinks, confectionery, tobacco, perfume, personal care, cosmetics, and healthcare sectors. API Americas was originally founded as Dry Print in New Jersey. Re-branded in 1998, API Americas is currently headquartered in Lawrence, Kansas inside a 56,000 square foot facility with manufacturing capabilities. API Americas Inc., and holding company API (USA) Holdings Limited, filed Chapter 11 petitions (Bankr. N.D. Del. Lead Case No. 20-10239) on Feb. 2, 2020. The petitions were signed by Douglas Woodworth, director. As of Dec. 31, 2019, API Americas Inc., had $37.3 million in total assets, $5.8 million in current liabilities and $47.3 million in long-term liabilities. API (USA) Holdings Limited had $51.6 million in total assets and $2.9 million in total liabilities. Saul Ewing Arnstein & Lehr LLP and Eversheds Sutherland (US) LLP represent the Debtors as general bankruptcy counsel. Ernst & Young LLP is the Debtors' financial advisor. Bankruptcy Management Solutions, Inc., d/b/a Stretto serves as the Debtors' claims and noticing agent. ASTRIA HEALTH: Closes 4 Washington Clinics to Cut Costs ------------------------------------------------------- The Yakima Herald reports that four clinics owned by Yakima, Wash.-based Astria Health Centers closed as the health system consolidates services in an attempt to cut costs. Yakima-based centers Astria Health Center-Family Medicine and Astria Health Center Terrace Heights, as well as Astria Health Center-Selah (Wash.) and Astria Health Center-Summitview (Wash.) Multi-Specialty and Diagnostics all closed May 29, 2020. Clinicians from the clinics will move to Astria Health Centers locations in Union Gap, Zillah and Toppenish, Wash. Astria Health filed for Chapter 11 bankruptcy in May 2019 and closed Astria Regional Medical Center as well as several clinics on its campus in January 2020. About Astria Health Center Astria Health and its subsidiaries -- https://www.astria.health/ -- are a non-profit health care system providing medical services to patients who generally reside in Yakima County and Benton County, Wash., through the operation of Sunnyside, Yakima, and Toppenish hospitals, as well as several health clinics, home health services, and other healthcare services. Collectively, they have 315 licensed beds, three active emergency rooms, and a host of medical specialties. They have 1,547 regular employees. Astria Health and 12 of its subsidiaries filed for bankruptcy protection (Bankr. E.D.Wash, Lead Case No. 19-01189) on May 6, 2019. In the petitions signed by John Gallagher, president and CEO, the Debtors were each estimated to have assets and liabilities of $100 million to $500 million. Judge Frank L. Kurtz oversees the cases. Bush Kornfeld LLP and Dentons US LLP serve as the Debtors' counsel. Kurtzman Carson Consultants, LLC is the claims and noticing agent. Gregory Garvin, acting U.S. trustee for Region 18, appointed a committee of unsecured creditors on May 24, 2019. The committee retained Sills Cummis & Gross P.C. as its legal counsel; Polsinelli PC, as co-counsel; and Berkeley Research Group, LLC as financial advisor. BLUESTEM BRANDS: June 26 Auction of All Assets Set -------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized the bidding procedures of Bluestem Brands, Inc. and affiliates in connection with the sale of substantially all their assets to BLST Acquisition Co., LLC for a consideration composed of (i) a credit bid in an amount equal to $200 million, (ii) the assumption of the Assumed Liabilities (including all Determined Cure Costs with respect to any Assigned Contract), (iii) repayment in full of all of the outstanding obligations under the DIP Credit Agreement, and (iv) cash and cash equivalents in an amount sufficient, together with cash and cash equivalents that are Excluded Assets, to fund the Wind-Down Budget, subject to overbid. The salient terms of the Bidding Procedures are: a. Bid Deadline: June 22, 2020, at 5:00 p.m. (ET) b. Initial Bid: The Bid Value proposed by each Bid (or sum of Bids for different assets) must be equal to, or exceed, the sum of (i) $200 million; plus (ii) the DIP Repayment Amount; plus (iii) cash consideration in an amount sufficient, together with cash and cash equivalents that are Excluded Assets, to fund the Wind-Down Budget; plus (iv) cash or assumption of those Assumed Liabilities in the Stalking Horse Purchase Agreement that the Stalking Horse Bidder has agreed to pay or assume (including all Cure Costs with respect to any Assigned Contract; and plus (v) the minimum overbid amount of $250,000. c. Deposit: 5% of the aggregate cash portion of the purchase price of the Bid d. Auction: If the Debtors receive one or more Qualified Bids in addition to the Stalking Horse Purchase Agreement, the Debtors will conduct an auction on June 26, 2020 at 10:00 a.m. (ET), or on such other date as determined by the Debtors. e. Bid Increments: $250,000 f. Sale Hearing: July 6, 2020, at 10:30 a.m. (ET) g. Sale Objection Deadline: July 2, 2020 at 5:00 p.m. (ET) Pursuant to the DIP Order, the Stalking Horse Bidder will be entitled to credit bid claims to the extent permitted by section 363(k) of the Bankruptcy Code. The noticing procedures as set forth in the Order and the Motion are hereby approved. Within five business days after entry of the Order, or as soon as reasonably practicable thereafter, the Debtors will serve the Hearing Notice upon the parties that received notice of the Motion. No later than June 5, 2020, the Debtors will file the Cure Notice and service such notice upon all Notice Parties. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of the Order are immediately effective and enforceable upon its entry. A copy of the Bidding Procedures is available at https://tinyurl.com/y9uc5edd from PacerMonitor.com free of charge. About Bluestem Brands Bluestem Brands, Inc. and its affiliates are a direct-to-consumer retailer that offers fashion, home, and entertainment merchandise through internet, direct mail, and telephonic channels under the Orchard and Northstar brand portfolios. Headquartered in Eden Prairie, Minnesota, the Debtors employ approximately 2,200 individuals and own and/or lease warehouses, distribution centers, and call centers in 10 other states, including New Jersey, Massachusetts, Georgia, and California. The Debtors' supply chain consists of name-brand vendors -- e.g., Michael Kors, Samsung, Keurig, Dyson -- as well as private label and non-branded sources based in the United States and abroad. For more information, visit https://www.bluestem.com/ Bluestem Brands, Inc., based in Eden Prairie, MN, and its debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10566) on March 9, 2020. In its petition, Bluestem Brands was estimated to have $500 million to $1 billion in both assets and liabilities. The petition was signed by Neil P. Ayotte, executive vice president, general counsel and secretary. The Hon. Mary F. Walrath oversees the case. YOUNG CONAWAY STARGATT & TAYLOR, LLP, and KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsels; FTI CONSULTING, INC., as financial advisor; RAYMOND JAMES & ASSOCIATES, INC., as investment banker; IMPERIAL CAPITAL LLC, as restructuring advisor; and PRIME CLERK LLC as claims and noticing agent. BRADLEY INVESTMENTS: Unsecureds Owed $1.7M to Get $168K in Plan --------------------------------------------------------------- Bradley Investments, Inc, submitted a Reorganization Plan and a Disclosure Statement. Payments under the Plan will be made from the Debtor's future income derived from the continued operation of its business, from the sale of stock in the Reorganized Debtor, from a PPP loan (if approved) and its forgiveness, from the sale of certain items of Debtor's equipment. The Plan proposes to treat claims as follows: * Class 1 Secured McCormick 109, LLC with an amount of claim of $2,027,861. The Equipment Collateral will be paid $75,000 in the form of payments of $931 per month for 60 months. For Mortgage Collateral, the total amount to be paid is $950,000, which will be paid $5,626 per month for June to July; $2,838 per month for December to February and $8,514 per month for March to May for a total of 264 months. * Class 2 John Deere Fin. with an amount of claim of $40,393. The total amount to be paid is $26,000. The claim will be paid $484 per month for 60 months. * Class 3 John Deere Fin. with an amount of claim of $29,672. The total amount to be paid is $20,000. The claim will be paid $365 per month for 60 months. * Class 4 John Deere Fin. with an amount of claim of $11,223. The total amount to be paid is $4,000. The claim will be paid $$64 per month for 60 months. * Class 5 John Deere Fin. with an amount of claim of $3,353.89. The claim will be paid $64 per month for 60 months. * Class 6 John Deere Fin. with an amount of claim of $48,056.32. The claim will be paid $27,000: $504 per month for 60 months. * Class 7 First Home Bank with an amount of claim $303,485. The total amount to be paid is $25,000 -- to be paid $466 per month for 60 months. * Class 8 BB&T with an amount of claim $11,661. The total amount to be paid is $4,000 -- to be paid $75 per month for 60 months. * Class 11 Yamaha Motor Finance Corp. with an amount of claim $9,444 -- to be paid $250 per month for 11 months. * Class 12 Yamaha Motor Finance Corp. with an amount of claim $65,896. The claimant will receive a $14,000 credit plus and $750 per month for 11 months. * Class 13 unsecured claims totaling $1,700,549. The claims will be paid $2,000 per month for 84 months. A full-text copy of the Disclosure Statement dated May 18, 2020, is available at https://tinyurl.com/yaz2harc from PacerMonitor.com at no charge. Attorney for the Debtor: Irvin Grodsky Post Office Box 3123 Mobile, Alabama 36652 Tel: (251) 433-3657 About Bradley Investments Bradley Investments, Inc., which conducts business under the name Timbercreek Golf Club, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 19-12908) on Aug. 22, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The case has been assigned to Judge Henry A. Callaway. The Debtor is represented by Irvin Grodsky, Esq., at Grodsky and Owens. On Sept. 19, 2019, the U.S. Bankruptcy Court for the Southern District of Alabama appointed an Official Committee of Unsecured Creditors. The Committee retained Blakeley LLP as counsel. BWX TECHNOLOGIES: S&P Rates New $400MM Senior Unsecured Notes 'BB' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB' issue-level rating to BWX Technologies Inc.'s proposed $400 million senior unsecured notes due 2028. The recovery rating is '4', indicating expectations for an average (30%-50%; round estimate: 35%) recovery in a payment default. At the same time, S&P placed its 'BB-' issue-level rating on the company's existing $400 million senior unsecured notes due 2026 on CreditWatch with positive implications. Once the transaction closes, S&P would raise the issue-level rating to 'BB' and revise the recovery rating to '4'. "We expect the company to use the proceeds to repay the existing senior secured term loan (unrated; $254 million currently outstanding) and a portion of outstanding borrowings on the revolving credit facility. Total debt will remain essentially the same, so we do not expect any changes to our projected credit metrics for the company from the proposed transaction," S&P said. ISSUE RATINGS-RECOVERY ANALYSIS Key analytical factors: -- The company's capital structure pro forma for the transaction consists of a $750 million secured revolver due 2025 (unrated), $400 million unsecured notes due 2026, and $400 million unsecured notes due 2028. -- Key default assumptions include LIBOR of 2.5% and the revolver is 85% drawn. Simulated default and valuation assumptions: -- Simulated year of default: 2025 -- EBITDA at emergence: $191 million -- EBITDA multiple: 5x Simplified waterfall: -- Net enterprise value (after 5% administrative costs): $908 million -- Obligor/nonobligor split: 82%/18% -- Collateral value available to first-lien creditors: $850 million -- Total first-lien debt: $593 million -- Collateral value available to unsecured creditors: $315 million -- Total unsecured debt: $820 million -- Recovery expectations: 30%-50%; rounded estimate: 35% BYRDLAND PROPERTIES: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The Office of the U.S. Trustee on June 8, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Byrdland Properties, LLC. About Byrdland Properties Byrdland Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-40571) on March 12, 2020. At the time of the filing, Debtor was estimated to have assets of less than $50,000 and liabilities of less than $50,000. Judge Brian T. Fenimore oversees the case. Mann Conroy, LLC is the Debtor's legal counsel. CAMPBELL & SON: Gets Court Approval to Hire Mediator ---------------------------------------------------- Campbell & Son, LLC received approval from the U.S. Bankruptcy Court for the District of Montana to employ Malcolm Goodrich, Esq., at Goodrich & Reely, PLLC, to serve as mediator. The company needs the services of a mediator to address issues with its creditor, National Loan Acquisitions Company, including the treatment of its claim under the company's proposed Chapter 11 plan of liquidation. Mr. Goodrich will be paid at the rate of $270 per hour and will be reimbursed for work-related costs incurred. National Loan will pay one half of the mediation costs and fees while the other half will be paid by Campbell & Son. Mr. Goodrich disclosed in court filings that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Malcolm H. Goodrich, Esq. Goodrich & Reely, PLLC 2812 First Avenue North, Suite 301 Billings, MT 59101 Telephone: (406) 256-3663 Email: malcolm@goodrichreely.com About Campbell & Son Based in Conrad, Mont., Campbell & Son, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mont. Case No. 19-61222) on Dec. 11, 2019, listing under $1 million in both assets and liabilities. Judge Benjamin P. Hursh oversees the case. Gary S. Deschenes, Esq., at Deschenes & Associates, is Debtor's legal counsel. Debtor filed its proposed Chapter 11 plan of liquidation and disclosure statement on April 9, 2020. CANWEL BUILDING: DBRS Cuts Issuer Rating to B, Alters Trend to Neg. ------------------------------------------------------------------- DBRS Limited downgraded CanWel Building Materials Group Ltd.'s (CanWel or the Company) Issuer Rating and Senior Unsecured Notes (the Notes) rating to B from B (high) and changed the trend to Negative. DBRS Morningstar also confirmed the Recovery Rating for the Notes at RR4. The ratings have been removed from Under Review with Negative Implications, where they were placed on April 13, 2020. The rating actions reflect DBRS Morningstar's view that the Coronavirus Disease (COVID-19) pandemic and the macroeconomic aftereffects will have a material negative impact on CanWel's earnings profile and will likely cause key credit metrics to deteriorate beyond a level that is considered acceptable for the current rating for an extended period. On April 13, 2020, DBRS Morningstar placed CanWel's ratings Under Review with Negative Implications, reflecting DBRS Morningstar's view that CanWel's revenues and operating income would experience lower volumes as a result of curtailed construction spending and government-mandated business closures for at least the near term. DBRS Morningstar also noted that a larger concern for the rating is the potentially longer-lasting effects that the coronavirus outbreak will have on the economy, as CanWel's products are used primarily in home construction, renovation, and remodelling. Since then, CanWel reported its results for the first quarter ended March 31, 2020 (Q1 F2020). Net sales increased 7.9% to $1.38 billion in the last 12 months ended Q1 2020 (LTM ended Q1 2020) versus $1.28 billion in the LTM ended Q1 2019, primarily because of the contribution from Lignum Forest Products LLP (Lignum), which was acquired in April 2019. EBITDA margins increased to 6.4% for the LTM ended Q1 2020 versus 5.1% for the LTM ended Q1 2019, primarily because the adoption of IFRS 16 standards partially offset a decrease in pricing levels and contribution from lower-margin Lignum business. The Company used cash flow from operations of $61.0 million during the LTM ended Q1 2020 primarily for dividend payments of $44 million and capital expenditures (capex) of $6 million. The Lignum acquisition and other investment activities resulted in additional cash outflow of $16 million during the LTM ended Q1 2020. Total balance sheet debt at the end of Q1 F2020 increased to $534 million from $511 million in Q1 F2019, and as such, the key credit metric of lease-adjusted debt-to-EBITDAR increased to 6.09 times (x) at the end of the LTM ended Q1 2020 versus 5.75x for the LTM ended Q1 2019. DBRS Morningstar notes that CanWel has initiated certain liquidity-based measures, including reduction in working capital levels that would help in lowering revolving credit utilization, cost optimization initiatives, deferring or reducing debt/lease payments, and reducing capex. Additionally, the Company is evaluating government financial support programs in order to offset some of the potential impact of the pandemic on the Company's operations. Looking ahead, DBRS Morningstar believes that the coronavirus pandemic and the related macroeconomic aftereffects will result in meaningful headwinds for the remainder of F2020 and well into 2021. A number of factors, including gross domestic product and unemployment, affect CanWel's sales because customers use CanWel's products primarily for home construction, renovation, and remodelling. DBRS Morningstar expects Canada’s and the U.S.' GDP to contract at least by 6% and 5% in 2020, respectively, and predicts unemployment to be approximately 11% and 10%, respectively. As such, DBRS Morningstar expects CanWel's revenues to decline by around 10% for the full-year F2020 and EBITDA to decline by around 20% to approximately $70 million. DBRS Morningstar expects this earnings pressure will persist well into F2021, considering a recessionary backdrop. The decline in earnings will in turn weaken CanWel's financial profile based on a corresponding contraction in cash flows, causing key credit metrics to deteriorate to a level beyond what is considered acceptable for the current rating (i.e., lease-adjusted debt-to-EBITDAR of around 6.0x) for the remainder of 2020 and through 2021. DBRS Morningstar believes cash flow from operations should track the operating income and fall in the $45 million to $50 million range in 2020 and 2021. Capex is expected to decrease in 2020 to approximately $2 million and increase only modestly in 2021. Should the Company maintain dividend outflows at existing levels of around $44 million, the Company's free cash flow (after dividends and capex but before changes in working capital) will remain in a deficit position and materially weaken CanWel's overall financial risk profile. The Negative trend reflects DBRS Morningstar's concern that the Company may not take appropriate capital conserving measures with respect to the Company's dividend policy and to a lesser degree the risk of the Company's earnings profile further weakening in F2021. Should EBITDA remain at levels above $70 million, DBRS Morningstar believes that the Company will have the ability to defend the B rating category when combined with an appropriate reduction in dividend outlay such that key credit metrics do not deteriorate beyond a range acceptable for the new rating (i.e., lease-adjusted debt-to-EBITDAR of not above 7.0x for a sustained period), adjusted for seasonal debt balance fluctuations. Conversely, should CanWel's credit profile weaken further as a result of weaker-than-expected operating performance and/or aggressive financial management, a further negative rating action could result. Notes: All figures are in Canadian dollars unless otherwise noted. CENTRAL PALM BEACH SURGERY: U.S. Trustee Appoints Committee ----------------------------------------------------------- The U.S. Trustee for Region 21 appointed a committee to represent unsecured creditors in the Chapter 11 case of Central Palm Beach Surgery Center, Ltd. The committee members are: 1. Byron D. Giddens, President Black Diamond Medical, Inc. 650 N. Wymore Rd., Unit #102 Winter Park, FL 32789 Phone: 407-960-1885 Fax: 407-960-1887 Email: ByronGiddens@gmail.com 2. Randy Gatzke, CFO Clarus Medical, LLC 13355 – 10th Ave., N Plymouth, MN 55441 Phone: 763-525-8406 Fax: 763-525-8656 Email: RGatzke@clarus-medical.com 3. Zach Noling, CFO S1 Spine, LLC 501 Allendale Rd. King of Prussia, PA 19406 Phone: 906-281-0021 Email: Zach@cambermedtech.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 Central Palm Beach Surgery Center Ltd. Central Palm Beach Surgery Center Ltd. and CPBS Management LLC, owners of an ambulatory surgery center in West Palm Beach, Fla., filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 20-11127) on Jan. 28, 2020. The petitions were signed by Jonathan Cutler, authorized member. At the time of the filing, Central Palm disclosed $7,115,518 in assets and $12,270,801 in liabilities. Judge Mindy A. Mora oversees the cases. Debtors tapped Robert C. Furr, Esq., at Furr & Cohen, P.A., as legal counsel; Julie B. Hershman, CPA, PA as accountant; and GlassRatner Advisory & Capital Group, LLC as financial advisor. CFRA HOLDINGS: Sets Bidding Procedures for All Assets ----------------------------------------------------- CFRA Holdings, LLC and its affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to authorize the bidding procedures in connection with the auction sale of substantially all assets. The Debtors' goal is to obtain maximum exposure of their Assets to potential buyers as quickly as possible under the circumstances, and they will consider any transaction that will result in obtaining the highest and best value for their Assets. By keeping multiple transactional avenues open, the Debtors and their stakeholders can use all of the tools available under the Bankruptcy Code to maximize value for all the Debtors' stakeholders. The Debtors' prepetition secured lenders, Valley National Bank and Raymond James Bank, N.A. have conditioned the consensual use of Lenders' cash collateral and the provision of post-petition DIP financing on the implementation of the procedures proposed related to the sale of the Debtors' Assets. Based on the experience of the Debtors' restructuring professionals, the Debtors believe it would further the goal of maximizing the value of the Assets to designate one or more parties to serve as a stalking horse purchaser for the Sale of the Assets. As is customary, the Debtors would likely grant a Stalking Horse Purchaser one or more of a limited break-up fee, expense reimbursement, or other limited bid protections. Accordingly, the Debtors are reserving the right to request that the Court approve their selection of a Stalking Horse Purchaser and will provide the Court with appropriate notice thereof. The Debtors intend to solicit bids for all of the Assets in accordance with the proposed Bidding Procedures. The salient terms of the Bidding Procedures are: a. Bid Deadline: June 22, 2020 at 2:00 p.m. (ET) b. Initial Bid: In the event that there is a Stalking Horse Purchaser, and the Qualifying Bidder wishes to bid on the same Assets that are included in the Stalking Horse Agreement, the aggregate consideration proposed by the Qualifying Bidder must equal or exceed the sum of the amount of (A) the purchase price under the Stalking Horse Agreement, plus (B) any break-up fee, expense reimbursement, or other bid protection provided under the Stalking Horse Agreement, plus (C) a minimum overbid amount, determined by the Debtors in consultation with the Consultation Parties. c. Deposit: 10% of the total consideration provided under the proposed Transaction Agreement d. Auction: The Auction will be held on June 24, 2020. In light of the current Covid-19 pandemic, the auction will be conducted virtually as determined by the Gordon Brothers and the Debtors, in consultation with the Consultation Parties. e. Bid Increments: TBD f. Sale Hearing: June 26, 2020 g. Sale Objection Deadline: h. The sale will be free and clear of liens, claims, interests and encumbrances. The Debtors also request approval of the Sale Notice. Within three business day of the entry of the Bidding Procedures Order, the Debtors will serve the Sale Notice on all Sale Notice Parties. The Debtors will also post the Sale Notice and the Bidding Procedures Order on the website of any claims and/or noticing agent employed in the Chapter 11 Cases. To facilitate the Sale, the Debtors ask authority to potentially assume and assign to any acquirer in a Sale the Assumed Contracts in accordance with the Assumption and Assignment Procedures. As set forth throughout the Motion, any delay in the Debtors' ability to consummate the Sale(s) would be detrimental to the Debtors, their creditors and estates, and would impair the Debtors' ability to take advantage of the substantial cost-savings that can be achieved by an expeditious closing of the Sale. For this reason, the Debtors submit that ample cause exists to justify a waiver of the 14-day stay imposed by Bankruptcy Rule 6004(h) and 6006(d), to the extent applicable. A copy of the Bidding Procedures is available at https://tinyurl.com/y7xmda48 from PacerMonitor.com free of charge. About CFRA Holdings CFRA Holdings, LLC, formerly known as CFRA Restaurant Holdings Inc., and its debtor affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-03608) on May 6, 2020. The petitions were signed by Tim J. Pruban, the Debtors' chief restructuring officer. At the time of the filing, the Debtors disclosed estimated assets of $10 million to $50 million and estimated liabilities of the same range. The Debtors tapped Saul Ewing Arnstein & Lehr LLP as their counsel. COMCAR INDUSTRIES: Adams & Service Buying All CTL Assets for $9M ---------------------------------------------------------------- Comcar Industries, Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to authorize them to enter into and consummate the Asset Purchase Agreement by and between the Debtors and certain of their subsidiaries and affiliates, and Adams Resources & Energy, Inc. and Service Transport Co., for the private going concern sale of substantially all of the assets of CTL Transportation, LLC for $9 million. Prior to the Petition Date, the Debtors began to explore strategic transaction to recapitalize or restructure the business. To that end, in March 2020, the Debtors engaged Bluejay Advisors, LLC as investment banker to advise the Debtors with respect to strategic alternatives. As part of that process, Bluejay prepared confidential information memoranda for each of the Debtors' business segments and conducted a marketing process. Despite their efforts in the marketing process, the Debtors only received an indication of interest and offer of value from the Purchaser Parent. Accordingly, in April 2020, the Debtors engaged in negotiations and a diligence process with the Purchaser for the purchase of the Acquired Assets. As a result of substantial arms'-length, good faith negotiations between the Purchaser and the Debtors, the Purchaser agreed to purchase the Acquired Assets and assume the Assumed Contracts for $9 million subject to the terms and conditions set forth in the Purchase Agreement. Additionally, as part of the negotiations, the Sellers agreed to short-term leases of the Nonresidential Real Property to the Purchaser at each properties' market rental rate, which will enhance the value of the Nonresidential Real Property that will be marketed as part of the Chapter 11 Cases. Finally, the negotiations also resulted in a transaction structure that could close promptly on terms favorable to the Debtors. While the Acquired Assets could be put up for auction, the terms offered by the Purchaser are materially superior to the net terms that the Debtors could hope to achieve at an auction. The Debtors believe that the costs of continuing to run the CTL business postpetition, including retaining all of the employees, during the extended period that a two-step marketing and sale process likely will entail will be detrimental to the going concern enterprise value of the CTL business and, therefore, seek to pursue Court approval of the transaction as a private transaction, not subject to postpetition marketing and auction, but subject to a fiduciary out should another party submit a higher or otherwise better offer. Given that (a) the Purchaser can consummate the private sale transaction sooner than if the Debtors subjected the Acquired Assets to an auction, (b) thus far, there have been no other acceptable offers for the Acquired Assets, and (c) nothing in the Purchase Agreement prohibits the Debtors from consummating any alternative transaction that, in the Debtors' business judgement will maximize the value of their estates, subject to the Break-Up Fee, the Debtors in their business judgment have determined that it is unlikely an auction will lead to a higher or otherwise better bid for the Acquired Assets. Accordingly, the Debtors ask to sell the Acquired Assets and assign the Assumed Contracts to the Purchaser, pursuant to a private sale, free and clear of all liens, claims, encumbrances and other interests. In accordance with Local Rule 6004-1, the Purchase Agreement, in summary, provides as follows: a. The Debtors are asking approval for the sale of the Acquired Assets to the Purchaser by private sale for the purchase price of $9 million, and upon the terms and conditions set forth in the Purchase Agreement. Upon execution of the Purchase Agreement, the Purchaser will make an initial deposit of $900,000 into an escrow account designated by the parties. Upon the closing of the sale of the Acquired Assets, the Deposit will continue to be held in the escrow account for a period of up to 90 days. During the Holdback Period, the Purchaser will make commercially reasonable efforts to locate all vehicles and equipment owned by the Debtors, and will provide the Debtors with biweekly status reports of such efforts. Simultaneously, the Debtors will make good faith efforts to deliver any remaining certificates of title and lien releases to the Purchaser. Further, during the Holdback Period, the Purchaser will pay all cure costs for contracts designated for assumption by the Purchaser, and all accrued but unpaid benefits to employees that accept employment with the Purchaser promptly upon determination of such amounts. b. Provided that the Deposit has not been fully distributed, within five days after the end of the Holdback Period, an amount equal to the sum of (i) the Agreed Value of each missing owned vehicle and piece of equipment, (ii) the Agreed Value of each owned vehicle for which its certificate of title remains missing, (iii) the amount of Execution Cure Costs paid by the Purchaser, (iv) the amount of Unpaid Benefits paid or to be paid by the Purchaser, and (iv) all reasonable licensing costs/fees (not to exceed $66,000 in total) incurred by the Purchaser to replace the transportation software licenses for the Acquired Assets that were not transferrable will be released to the Purchaser from the Deposit. c. The sale will be free and clear of all claims, liens, encumbrances and interests with all such liens to attach to the net cash proceeds of the sale of the Acquired Assets in the order of their priority and to the extent and validity as of immediately prior to such sale. d. The Acquired Assets include substantially all assets of CTL. e. Concurrently with the Closing, the Parties will enter into short-term leases for the Nonresidential Real Property located in (a) St. Gabriel, Louisiana, (b) Mobile, Alabama, (c) Jacksonville, Florida, and (d) Tampa, Florida. Concurrently with the Closing, Buyer will enter into an agreement for the rental of parking spaces at a drop yard in Atlanta, Georgia. Concurrently with the Closing, the Parties shall, to the extent permitted by the master lease, enter into a sublease for the leased facility located in Angleton, Texas, for 30 days and containing customary terms. The Parties will negotiate the definitive documents for the foregoing leases in good faith. f. The Purchaser will pay any cure costs, if applicable, associated with any Service Contracts that the Purchaser designates to be Assumed Contracts. g. The Debtors are seeking approval for a proposed sale of the Acquired Assets to the Purchaser by private sale free and clear of all liens, claims, encumbrances and other interests, and upon the terms and conditions set forth in the Purchase Agreement, subject to a fiduciary out in favor of the Debtors. While the Purchase Agreement provides for and allows the consummation of an alternative transaction, if the Sellers terminate the Purchase Agreement in favor of a sale to a third party, the Purchaser is entitled to receive $300,000 from the proceeds of the alternate transaction. h. The closing date of the private sale will take place on or before the second Business Day after the satisfaction of all conditions precedent set forth in the Purchase Agreement. i. The Purchase Agreement requires the Purchaser to fund in good faith, a deposit of $900,000. j. The Purchase Agreement does not address the use of proceeds generated by the sale. All Liens will attach to the proceeds, which will be distributed pursuant to the Sale Order or further order of the Court. k. The Debtors are asking to sell the Acquired Assets free and clear of successor liability claims. l. The Debtors are asking relief from the 14-day stay imposed by Bankruptcy Rule 6004(h) for the private sale. While the Debtors believe the Purchase Agreement is in final, agreed form, the Debtors ask authorization to accept such modifications and edits to the Purchase Agreement that are not materially burdensome or harmful to the estates as may be submitted by and agreed upon between the Purchaser and the Debtors in their discretion and the Debtors' business judgment without further order of the Court. The Debtors do not have the liquidity to continue to operate the CTL business beyond the period contemplated by the DIP Approved Budget. They delegated approval of sale transactions to the Restructuring Committee comprising an independent director. The Restructuring Committee approved and authorized the sale transaction and to proceed to seek approval as a private sale with the embedded fiduciary out. Therefore, the Debtors, in their business judgment, and in consultation with Bluejay and their other advisors, believe that the sale of the Acquired Assets to the Purchaser under the process proposed represents the fair market value for the Acquired Assets under the Purchase Agreement and under the circumstances of these Chapter 11 Cases. Pursuant to the Purchase Agreement, the Sellers are required to assume the Assumed Contracts and the obligations thereunder, and to subsequently assign the Assumed Contracts to the Purchaser. In addition, the Purchaser is responsible for any and all cure amounts associated with assuming the Assumed Contracts. Accordingly, the Debtors believe that assuming the Assumed Contracts is in the best interests of the Debtors, the Debtors' estates, their creditors, and all other parties in interest. In connection with the assumption and assignment of the Assumed Contracts, the Debtors propose the Assumption Procedures. No later than three business days after service of the Motion, the Debtors will the Notice of Potential Assumption on all parties to the Assumed Contracts. The Assumption Objection Deadline is no later than 14 days before the hearing on the Motion as noted in each Notice of Potential Assumption. No later than five calendar days prior to the hearing on the Motion, the Debtors will serve the Notice of Assumption and Assignment. The Debtors respectfully ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). Timely consummation of the proposed sale is of critical importance to both the Debtors and the Purchaser, and is vital to the Debtors' efforts to maximize the value of the Debtors’ estates. Accordingly, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/y9tdns7j from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries -- https://www.comcar.com/ -- is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC, as investment banker. Donlin Recano & Company, Inc., is the claims agent. COMCAR INDUSTRIES: CTT Buying All CT Assets for $6.8 Million ------------------------------------------------------------ Comcar Industries, Inc., and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to authorize them to enter into and consummate the Asset Purchase Agreement by and between the Debtors and certain of their subsidiaries and affiliates, and P&S Acquisition, LLC ("Purchaser Parent") and CTT Acquisition, LLC ("Purchaser") for the private going concern sale of substantially all of the assets of CT Transportation, LLC for the aggregate consideration: (i) $6,811,250; plus (ii) the Driver Premium payable in accordance with Section 3.6 of the Purchase Agreement; plus (iii) the Sellers' Proration Amount in accordance with the Purchase Agreement, if any; minus (iv) the Buyer Proration Amount in accordance with the Purchase Agreement, if any; minus (v) the market value of any abandoned Vehicles; and minus (vi) any Cure Costs in connection with any Contract with National Gypsum Co., not to exceed $95,000. Prior to the Petition Date, the Debtors began to explore strategic transaction to recapitalize or restructure the business. To that end, in March 2020, the Debtors engaged Bluejay Advisors, LLC as investment banker to advise the Debtors with respect to strategic alternatives. As part of that process, Bluejay prepared confidential information memoranda for each of the Debtors' business segments and conducted a marketing process. Despite their efforts in the marketing process, the Debtors only received an indication of interest and offer of value from the Purchaser Parent. Accordingly, in April 2020, the Debtors engaged in negotiations and a diligence process with the Purchaser Parent for the purchase of the Acquired Assets. As a result of substantial arms’ length, good faith negotiations between the Purchaser Parent, the Purchaser, and the Debtors, the Purchaser agreed to purchase the Acquired Assets and assume the Assumed Contracts for the Purchase Price having an aggregate value to the Debtors' estates of in excess of $8 million, assuming the Debtors receive the holdbacks provided for under the Purchase Agreement. Additionally, as part of the negotiations, the Sellers agreed to lease the Nonresidential Real Property to the Purchaser for a three year term at each properties' market rental rate, which will enhance the value of the Nonresidential Real Property that will be marketed as part of the Chapter 11 Cases. Finally, the negotiations also resulted in a transaction structure that could close promptly on terms favorable to the Debtors. While the Acquired Assets could be put up for auction, the terms offered by the Purchaser are materially superior to the net terms that the Debtors could hope to achieve at an auction. The Debtors believe that the costs of continuing to run the CT business postpetition, including retaining all of the employees, during the extended period that a two-step marketing and sale process likely will entail will be detrimental to the going concern enterprise value of the CT business and, therefore, seek to pursue Court approval of the transaction as a private transaction, not subject to postpetition marketing and auction, but subject to a fiduciary out should another party submit a higher or otherwise better offer. Given that (a) the Purchaser can consummate the private sale transaction sooner than if the Debtors subjected the Acquired Assets to an auction, (b) thus far, there have been no other acceptable offers for the Acquired Assets, and (c) nothing in the Purchase Agreement prohibits the Debtors from consummating any alternative transaction that, in the Debtors' business judgement will maximize the value of their estates, subject to the Break-Up Fee, the Debtors in their business judgment have determined that it is unlikely an auction will lead to a higher or otherwise better bid for the Acquired Assets. Accordingly, the Debtors ask to sell the Acquired Assets and assign the Assumed Contracts to the Purchaser, pursuant to a private sale, free and clear of all liens, claims, encumbrances and other interests. In accordance with Local Rule 6004-1, the Purchase Agreement, in summary, provides as follows: a. The Debtors are asking approval for the sale of the Acquired Assets to the Purchaser (or a subsidiary entity designated by the Purchaser) by private sale for the following aggregate consideration: (i) $6,811,250; plus (ii) the Driver Premium payable in accordance with Section 3.6 of the Purchase Agreement; plus (iii) the Sellers' Proration Amount in accordance with the Purchase Agreement, if any; minus (iv) the Buyer Proration Amount in accordance with the Purchase Agreement, if any; minus (v) the market value of any abandoned Vehicles; and minus (vi) any Cure Costs in connection with any Contract with National Gypsum Co., not to exceed $95,000. b. The sale will be free and clear of all claims, liens, encumbrances and interests, except the ROFO, with all such liens to attach to the net cash proceeds of the sale of the Acquired Assets in the order of their priority and to the extent and validity as of immediately prior to such sale. c. The Acquired Assets include substantially all assets of CT. d. Concurrently with the Closing, the Parties will enter into leases for the Nonresidential Real Property located in Bridgeport, Alabama (3-year term), Savannah, Georgia (1-year term), Mocksville, North Carolina (3-year term), Baltimore, Maryland (3-year term), and a use arrangement for a mobile home and trailer in Apollo Beach, Florida. e. The Purchaser will pay any cure costs, if applicable, associated with any Service Contracts that the Purchaser designates to be Assumed Contracts. f. The Debtors are seeking approval for a proposed sale of the Acquired Assets to the Purchaser by private sale free and clear of all liens, claims, encumbrances and other interests, and upon the terms and conditions set forth in the Purchase Agreement, subject to a fiduciary out in favor of the Debtors. While the Purchase Agreement provides for and allows the consummation of an alternative transaction, if the Sellers terminate the Purchase Agreement in favor of a sale to a third party, the Purchaser is entitled to receive $300,000 from the proceeds of the alternate transaction. g. The closing date of the private sale will take place on or before the second Business Day after the satisfaction of all conditions precedent set forth in the Purchase Agreement. h. The Purchase Agreement requires the Purchaser to fund in good faith, a deposit of $500,000. i. The Purchase Agreement does not address the use of proceeds generated by the sale. All Liens will attach to the proceeds, which will be distributed pursuant to the Sale Order or further order of the Court. j. The Debtors are asking to sell the Acquired Assets free and clear of successor liability claims. k. The Debtors are asking relief from the 14-day stay imposed by Bankruptcy Rule 6004(h) for the private sale. While the Debtors believe the Purchase Agreement is in final, agreed form, the Debtors ask authorization to accept such modifications and edits to the Purchase Agreement that are not materially burdensome or harmful to the estates as may be submitted by and agreed upon between the Purchaser and the Debtors in their discretion and the Debtors' business judgment without further order of the Court. The Debtors do not have the liquidity to continue to operate the CT business beyond the period contemplated by the DIP Approved Budget. They delegated approval of sale transactions to the Restructuring Committee comprising an independent director. The Restructuring Committee approved and authorized the sale transaction and to proceed to seek approval as a private sale with the embedded fiduciary out. Therefore, the Debtors, in their business judgment, and in consultation with Bluejay and their other advisors, believe that the sale of the Acquired Assets to the Purchaser under the process proposed represents the fair market value for the Acquired Assets under the Purchase Agreement and under the circumstances of these Chapter 11 Cases. Pursuant to the Purchase Agreement, the Sellers are required to assume the Assumed Contracts and the obligations thereunder, and to subsequently assign the Assumed Contracts to the Purchaser. In addition, the Purchaser is responsible for any and all cure amounts associated with assuming the Assumed Contracts. Accordingly, the Debtors believe that assuming the Assumed Contracts is in the best interests of the Debtors, the Debtors' estates, their creditors, and all other parties in interest. In connection with the assumption and assignment of the Assumed Contracts, the Debtors propose the Assumption Procedures. No later than three business days after service of the Motion, the Debtors will the Notice of Potential Assumption on all parties to the Assumed Contracts. The Assumption Objection Deadline is no later than 14 days before the hearing on the Motion as noted in each Notice of Potential Assumption. No later than five calendar days prior to the hearing on the Motion, the Debtors will serve the Notice of Assumption and Assignment. The Debtors respectfully ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). Timely consummation of the proposed sale is of critical importance to both the Debtors and the Purchaser, and is vital to the Debtors' efforts to maximize the value of the Debtors’ estates. Accordingly, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/yat9o3wl from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries -- https://www.comcar.com/ -- is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc. as financial advisor; and Bluejay Advisors, LLC, as investment banker. Donlin Recano & Company, Inc., is the claims agent. COMCAR INDUSTRIES: White Willow Buying All MCT Assets for $2.3M --------------------------------------------------------------- Comcar Industries, Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to authorize them to enter into and consummate the Asset Purchase Agreement by and between the Debtors and certain of their subsidiaries and affiliates, and White Willow Holdings, LLC and its designee, for the private going concern sale of substantially all of the assets of MCT Transportation, LLC for $2,254,500 million. Prior to the Petition Date, the Debtors began to explore strategic transaction to recapitalize or restructure the business. To that end, in March 2020, the Debtors engaged Bluejay Advisors, LLC as investment banker to advise the Debtors with respect to strategic alternatives. As part of that process, Bluejay prepared confidential information memoranda for each of the Debtors' business segments and conducted a marketing process. Despite their efforts in the marketing process, the Debtors only received an indication of interest and offer of value from the Purchaser Parent. Accordingly, in April 2020, the Debtors engaged in negotiations and a diligence process with the Purchaser for the purchase of the Acquired Assets. As a result of substantial arms'-length, good faith negotiations between the Purchaser and the Debtors, the Purchaser agreed to purchase the Acquired Assets and assume the Assumed Contracts for $9 million subject to the terms and conditions set forth in the Purchase Agreement. Additionally, as part of the negotiations, the Sellers agreed to short-term leases of the Nonresidential Real Property to the Purchaser at each properties' market rental rate, which will enhance the value of the Nonresidential Real Property that will be marketed as part of the Chapter 11 Cases. Finally, the negotiations also resulted in a transaction structure that could close promptly on terms favorable to the Debtors. While the Acquired Assets could be put up for auction, the terms offered by the Purchaser are materially superior to the net terms that the Debtors could hope to achieve at an auction. The Debtors believe that the costs of continuing to run the MCT business postpetition, including retaining all of the employees, during the extended period that a two-step marketing and sale process likely will entail will be detrimental to the going concern enterprise value of the MCT business and, therefore, seek to pursue Court approval of the transaction as a private transaction, not subject to postpetition marketing and auction, but subject to a fiduciary out should another party submit a higher or otherwise better offer. Given that (a) the Purchaser can consummate the private sale transaction sooner than if the Debtors subjected the Acquired Assets to an auction, (b) thus far, there have been no other acceptable offers for the Acquired Assets, and (c) nothing in the Purchase Agreement prohibits the Debtors from consummating any alternative transaction that, in the Debtors' business judgement will maximize the value of their estates, subject to the Break-Up Fee, the Debtors in their business judgment have determined that it is unlikely an auction will lead to a higher or otherwise better bid for the Acquired Assets. Accordingly, the Debtors ask to sell the Acquired Assets and assign the Assumed Contracts to the Purchaser, pursuant to a private sale, free and clear of all liens, claims, encumbrances and other interests. In accordance with Local Rule 6004-1, the Purchase Agreement, in summary, provides as follows: a. The Debtors are asking approval for the sale of the Acquired Assets to the Purchaser by private sale for the purchase price of $2,254,500 million, and upon the terms and conditions set forth in the Purchase Agreement. Upon execution of the Purchase Agreement, the Purchaser will make an initial deposit of $250,000 into an escrow account designated by the parties. Upon the closing of the sale of the Acquired Assets, the Deposit will continue to be held in the escrow account for a period of 14 days. The Deposit will be released in the following manner at the end of the Holdback Period. b. During the Holdback Period, Purchaser will make commercially reasonable efforts to locate certain vehicles and equipment, and Seller will be permitted to make efforts to locate such Holdback Equipment as well. Further, Sellers will make good faith efforts to have all Holdback Equipment not delivered to Purchaser at Closing delivered to the Purchaser. The Parties have agreed on the value of each item of the Holdback Equipment. c. The sale will be free and clear of all claims, liens, encumbrances and interests with all such liens to attach to the net cash proceeds of the sale of the Acquired Assets in the order of their priority and to the extent and validity as of immediately prior to such sale. d. The Acquired Assets include substantially all assets of MCT e. Concurrently with the Closing, the Parties will enter into short-term leases for the Nonresidential Real Property located in (a) St. Gabriel, Louisiana, (b) Mobile, Alabama, (c) Jacksonville, Florida, and (d) Tampa, Florida. Concurrently with the Closing, Buyer will enter into an agreement for the rental of parking spaces at a drop yard in Atlanta, Georgia. Concurrently with the Closing, the Parties shall, to the extent permitted by the master lease, enter into a sublease for the leased facility located in Angleton, Texas, for 30 days and containing customary terms. The Parties will negotiate the definitive documents for the foregoing leases in good faith. f. The Purchaser will pay any cure costs, if applicable, associated with any Service Contracts that the Purchaser designates to be Assumed Contracts. g. The Debtors are asking approval for a proposed sale of the Acquired Assets to the Purchaser by private sale free and clear of all liens, claims, encumbrances and other interests, and upon the terms and conditions set forth in the Purchase Agreement, subject to a fiduciary out in favor of the Debtors. While the Purchase Agreement provides for and allows the consummation of an alternative transaction, if the Sellers terminate the Purchase Agreement in favor of a sale to a third party, the Purchaser is entitled to receive $67,635 plus the documented actual reasonable out-of-pocket costs and expenses incurred by the Purchaser with respect to the transaction contemplated by the Purchase agreement, not to exceed $65,000. h. The closing date of the private sale will take place on or before the second Business Day after the satisfaction of all conditions precedent set forth in the Purchase Agreement. i. The Purchase Agreement requires the Purchaser to fund in good faith, a deposit of $250,000. j. The Purchase Agreement does not address the use of proceeds generated by the sale. All Liens will attach to the proceeds, which will be distributed pursuant to the Sale Order or further order of the Court. k. The Debtors are asking to sell the Acquired Assets free and clear of successor liability claims. l. The Debtors are asking relief from the 14-day stay imposed by Bankruptcy Rule 6004(h) for the private sale. While the Debtors believe the Purchase Agreement is in final, agreed form, the Debtors ask authorization to accept such modifications and edits to the Purchase Agreement that are not materially burdensome or harmful to the estates as may be submitted by and agreed upon between the Purchaser and the Debtors in their discretion and the Debtors' business judgment without further order of the Court. The Debtors do not have the liquidity to continue to operate the MC business beyond the period contemplated by the DIP Approved Budget. They delegated approval of sale transactions to the Restructuring Committee comprising an independent director. The Restructuring Committee approved and authorized the sale transaction and to proceed to seek approval as a private sale with the embedded fiduciary out. Therefore, the Debtors, in their business judgment, and in consultation with Bluejay and their other advisors, believe that the sale of the Acquired Assets to the Purchaser under the process proposed represents the fair market value for the Acquired Assets under the Purchase Agreement and under the circumstances of these Chapter 11 Cases. Pursuant to the Purchase Agreement, the Sellers are required to assume the Assumed Contracts and the obligations thereunder, and to subsequently assign the Assumed Contracts to the Purchaser. In addition, the Purchaser is responsible for any and all cure amounts associated with assuming the Assumed Contracts. Accordingly, the Debtors believe that assuming the Assumed Contracts is in the best interests of the Debtors, the Debtors' estates, their creditors, and all other parties in interest. In connection with the assumption and assignment of the Assumed Contracts, the Debtors propose the Assumption Procedures. No later than three business days after service of the Motion, the Debtors will the Notice of Potential Assumption on all parties to the Assumed Contracts. The Assumption Objection Deadline is no later than 14 days before the hearing on the Motion as noted in each Notice of Potential Assumption. No later than five calendar days prior to the hearing on the Motion, the Debtors will serve the Notice of Assumption and Assignment. The Debtors respectfully ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). Timely consummation of the proposed sale is of critical importance to both the Debtors and the Purchaser, and is vital to the Debtors' efforts to maximize the value of the Debtors’ estates. Accordingly, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/yaclwdpf from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries -- https://www.comcar.com/ -- is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC, as investment banker. Donlin Recano & Company, Inc., is the claims agent. COMMUNITY PROVIDER: Sets Procedures for Sale of De Minimis Assets ----------------------------------------------------------------- Community Provider of Enrichment Services, Inc. and Novelles Developmental Services, Inc. ask the U.S. Bankruptcy Court for the Central District of California to authorize them to implement expedited procedures to sell or transfer of assets that are obsolete, burdensome, or of little or no usable value to the Debtors' estates, including, among other things, office furniture, fixtures, equipment, vehicles, thrift store merchandise, personal property, and other miscellaneous assets of de minimis value in one or more related transactions (a) to a single buyer or group of buyers with a total transaction value that is equal to or less than $25,000 without the need for further Court approval or (b) to a single buyer or group of related buyers with a total transaction value that is greater than $25,000 but less than or equal to $100,000, subject to the additional notice procedures set forth below, in each case as negotiated within the Debtors' reasonable discretion, free and clear of all Liens, and with any applicable Liens attaching to the proceeds of such sale or transfer. Objections, if any, must be filed 14 days before the hearing. The financial and operational issues facing the Debtors were born out of a confluence of historical challenges and the recent state-wide shutdowns related to Covid-19. Among other factors, operating losses have plagued the Debtors for some time due to, among other things, challenging cost structure, low reimbursement rates, and the changing healthcare landscape. Prior to the Petition Date, the Debtors operated numerous day treatment centers and programs in California and Arizona. All of these programs were closed prior to the Petition Date due to governmental mandates arising out of the COVID-19 situation currently facing California, Arizona, and the rest of the United States. In addition, CPES AZ historically operated three thrift stores in Arizona as part of a vocational training program, which stores were also closed prepetition as a result of the Covid-19 mandates. On May 8, 2020, CPES AZ ceased its behavioral health operations in Arizona and the Debtors have filed a motion to reject many of the office and facility leases associated with these operations. CPES AZ currently provides residences and services to developmentally disabled individuals in Arizona through its 64 group homes (all at leased facilities), and Novelles operates 11 similar facilities in California. The Debtors also provide supportive living services where support is provided by employees of the Debtors in the homes of the individual clients/patients. CPES AZ has been working closely with the State of Arizona and the Division of Developmental Disabilities to enter into and implement a comprehensive plan to transition its remaining programs and services to new operators. By the Motion, the Debtors ask the entry of an order approving and authorizing the Debtors to implement expedited procedures: (i) to sell or transfer De Minimis Assets in one or more De Minimis Asset Sales (a) to a single buyer or group of buyers with a total transaction value that is equal to or less than $25,000 without the need for further Court approval or (b) to a single buyer or group of related buyers with a total transaction value that is greater than $25,000 but less than or equal to $100,000 subject to the additional notice procedures set forth below, in each case as negotiated within the Debtors' reasonable discretion, free and clear of all Liens and with any applicable Liens attaching to the proceeds of such sale or transfer with the same validity, extent, and priority that existed immediately prior to the sale or transfer; (ii) to pay all necessary fees and expenses incurred by the Debtors in connection with the De Minimis Asset Sales; and (iii) to abandon a De Minimis Asset when a sale of such asset cannot be consummated at a value greater than the associated liquidation costs. In connection with the Debtors' business, the Debtors anticipate entering into various agreements or transactions to sell, transfer, or abandon De Minimis Assets. These De Minimis Assets have proven to be burdensome to retain and maintain, and are unnecessary during these Chapter 11 Cases and for the Debtors’ reorganized business operations. In an effort to avoid the prohibitive costs and delays associated with securing Court approval for each and every proposed sale or abandonment of a De Minimis Asset, the Debtors propose to sell or transfer each De Minimis Asset on the best available terms, subject to the then existing circumstances, under the following De Minimis Asset Sale Procedures: a. With regard to an individual transaction or series of related transactions to a single buyer or group of related buyers with a total transaction value that is less than or equal to $25,000 ("Non-Noticed De Minimis Asset Sale"): i. The Debtors are authorized to consummate Non-Noticed De Minimis Asset Sales if the Debtors determine in their reasonable exercise of business judgment that such sales are in the best interest of the estates, without further Court approval, subject only to the United States Trustee receiving notice of the transactions; ii. The Debtors are further authorized to pay any necessary fees and expenses incurred in connection therewith, including paying all reasonable commissions and fees to third-party sale agents, or auctioneers in connection with the Non-Noticed De Minimis Asset Sale; iii. Any such sales will be, without the need for any action by any party, final and fully authorized by the Court free and clear of all Liens, with such Liens attaching only to the net proceeds of such transactions with the same validity, extent, and priority that existed immediately prior to the transaction; and iv. Good faith purchasers of the De Minimis Assets will be entitled to the protections of section 363(m) of the Bankruptcy Code. b. With regard to an individual transaction or series of related transactions to a single buyer or group of related buyers with a total transaction value that is greater than $25,000 but less than or equal to $100,000 ("Noticed De Minimis Asset Sale"): i. The Debtors are authorized to consummate Noticed De Minimis Asset Sales, and pay any reasonable and necessary fees and expenses incurred in connection therewith, if the Debtors determine in their reasonable exercise of business judgment that the Noticed De Minimis Asset Sales are in the best interest of the estates, without further Court approval, subject only to the noticing procedures set forth; ii. Prior to closing the transaction, the Debtors will give Sale Notice to the Notice Parties; iii. The Notice Parties will have seven calendar days from the date on which the Sale Notice is received to object to the transaction. iv. If the terms of the proposed transaction are materially amended after the transmittal of the Sale Notice but prior to the Sale Objection Deadline, the Debtors will send a revised Sale Notice to the Notice Parties, after which the Notice Parties will have an additional three calendar days to object to the transaction. v. If no Objection is timely filed and served by the applicable objection deadline, then the Debtors will be authorized to immediately consummate the Noticed De Minimis Asset Sale. If an objection is timely filed and served by the applicable objection deadline, then the Debtors will schedule a hearing with the Court, on shortened notice, if necessary, to ask Court approval of the transaction, subject to the Courts availability. In that event, the De Minimis Asset will only be sold upon withdrawal of the timely filed written objection or further order of the Court. vi. Any such Noticed De Minimis Asset Sales will be, without the need for any action by any party, final and fully authorized by the Court and free and clear of all Liens, with such Liens attaching only to the net proceeds of such Noticed De Minimis Asset Sales with the same validity, extent, and priority that existed immediately prior to the transaction. vii. Good faith purchasers of the De Minimis Assets will be entitled to the protections of section 363(m) of the Bankruptcy Code. c. With regard to those De Minimis Assets that cannot be sold at a price greater than the cost of liquidating such assets, the Debtors seek authority to abandon the De Minimis Assets in accordance with the following procedures ("De Minimis Asset Abandonment Procedures"): i. Prior to abandoning the De Minimis Asset, the Debtors will give written notice of the proposed abandonment (the “Abandonment Notice”) to the Notice Parties; ii. The contents of the Abandonment Notice shall: (a) describe the De Minimis Asset to be abandoned in reasonable detail, including the projected book value of the De Minimis Asset to be abandoned, as reflected in the Debtors’ books and records; (b) identify the Debtor(s) that own the De Minimis Asset; (c) identify any known parties holding or asserting a lien over the De Minimis Asset; and (d) the Debtors’ reasons for the proposed abandonment; iii. The Notice Parties will have seven calendar days from the date on which the Abandonment Notice is received to object to the transaction. Any objection must be filed with the Court, with a copy of the objection immediately served upon counsel to the Debtors. iv. If no written objection is timely filed by the Abandonment Objection Deadline, then the Debtors will be authorized to immediately proceed with the proposed abandonment. If an objection is timely filed by the Abandonment Objection Deadline, then the Debtors will schedule a hearing with the Court, on shortened notice, if necessary, to seek Court approval of the proposed abandonment, subject to the Court’s availability. In that event, the De Minimis Asset will only be abandoned upon withdrawal of the timely filed written objection or further order of the Court. Nothing in the Procedures will prevent the Debtors, in their discretion, from asking the Court's approval of any proposed transaction independent of the Procedures. Separate Court approval will be requested for any single sale with a total transaction value that exceeds $100,000. The Debtors submit that the De Minimis Asset Sale Procedures reflect a reasonable exercise of their business judgment. In particular, the De Minimis Asset Sale Procedures will help preserve existing value and generate new value for the benefit of the Debtors' estates and all parties-in-interest. They will also promote an efficient administration of these Chapter 11 Cases, make De Minimis Asset Sales cost effective, and expedite the sale or transfer of more valuable assets in a manner that should provide the most benefit to the Debtors' estates and creditors. About Community Provider of Enrichment Services Community Provider of Enrichment Services, Inc., which conducts business under the name CPES, is a community human services and healthcare organization based in Tucson, Ariz. It offers a full range of community-based behavioral health services, substance abuse treatment, foster care, and intellectual and developmental disability supports with locations throughout Arizona and California. For more information, visit https://www.cpes.com/ CPES and its affiliate, Novelles Developmental Services, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Lead Case No. 20-10554) on April 24, 2020. The petitions were signed by Mark G. Monson, CPES' president and chief executive officer. At the time of the filing, CPES disclosed estimated assets of $1 million to $10 million and estimated liabilities of the same range while Novelles Developmental Services disclosed $100,000 to $500,000 in both assets and liabilities. Judge Deborah J. Saltzman oversees the cases. The Debtors tapped Faegre Drinker Biddle & Reath LLP as their legal counsel. CORAL POINTE: Court Approves Disclosure Statement ------------------------------------------------- Judge Laurel M. Isicoff has ordered that the Disclosure Statement filed by Coral Pointe 604 LLC, is approved. The confirmation hearing and hearing on fee applications will be on July 14, 2020 at 1:30 p.m. in United States Bankruptcy Court 301 N Miami Ave., Courtroom 8 Miami, FL 33128. Proponent's deadline for serving this order, disclosure statement, plan, and ballot and objections to claims will be on June 4, 2020. Deadline for objections to confirmation and for filing ballots accepting or rejecting plan will be on June 30, 2020. About Coral Pointe 604 Coral Pointe 604, LLC, owns a condo unit at Coral Pointe, at 1690 SW 27 Ae. Unit 604, Miami, Florida, rented for $1,600 per month and valued at $175,000. Based in Miami Beach, Florida, Coral Pointe 604, LLC, filed a voluntary petition under Chapter 11 of the US Bankruptcy Code (S.D. Fla. Case No. 18-23013) on Oct. 19, 2018, estimating less than $1 million in assets and liabilities. Joel M. Aresty, Esq., serves as counsel to the Debtor. No official committee of unsecured creditors has been appointed in the Debtor's case. CRUZ TRUCKING: Seeks to Hire Herron Hill as Attorney ---------------------------------------------------- Cruz Trucking, LLC, seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Herron Hill Law Group, PLLC, as attorney to the Debtor. Cruz Trucking requires Herron Hill to: a. advise and counsel the Debtor in possession concerning the operation of its business in compliance with the Chapter 11 and orders of the Bankruptcy Court; b. defend any causes of action on behalf of the debtor-in- possession; c. prepare all necessary applications, motions, reports, and other legal papers in the Chapter 11 case; d. assist in the formulation of a plan of reorganization and preparation of a disclosure statement; and e. provide all services of a legal nature in the field of bankruptcy law. Herron Hill will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Kenneth D. Herron, Jr., partner of Herron Hill Law Group, PLLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Herron Hill can be reached at: Kenneth D. Herron, Jr., Esq. HERRON HILL LAW GROUP, PLLC 135 W Central Blvd, Suite 650 Orlando, FL 32801 Tel: (407) 648-0058 About Cruz Trucking Cruz Trucking, LLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla., Case No. 6:20-02871) on May 22, 2020. The Debtor hired Herron Hill Law Group, PLLC, as counsel. DANCEL LLC: Franchisor Objects to Disclosure Statement ------------------------------------------------------ Franchisor Different Rules, LLC, formerly Jack in the Box Inc., submitted its objection to the First Amended Disclosure Statement filed by debtor Dancel, L.L.C. Franchisor points out that the Amended Disclosure statement fails to set forth adequate information regarding certain critical plan components. Franchisor objects to the Amended Disclosure Statement because it does not provide sufficient information relating to the Debtor's intention to sell its assets. Franchisor complains that the Amended Disclosure Statement does not address whether or not the Debtor will cure its defaults under the Franchise Agreements that are the subject of the Assumption Motion as required under 11 U.S.C. Sec. 365(b)(1). Attorneys for Franchisor Different Rules: Kami M. Hoskins GORDON REES SCULLY MANSUKHANI, LLP Two North Central Avenue, Ste. 2200 Phoenix, AZ 85004 Telephone: (602) 794-2468 Facsimile: (602) 265-4716 E-mail: khoskins@grsm.com About Dancel L.L.C. Dancel, L.L.C., owns and operates restaurants with multiple locations in Bernalillo County, N.M. Dancel filed a voluntary Chapter 11 petition (Bankr. D. Ariz. Case No. 19-10446) on Aug. 20, 2019. In the petition signed by Laura Olguin, manager, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Scott H. Gan. Charles R. Hyde, Esq., at The Law Offices of C.R. Hyde, PLC, serves as the Debtor's counsel. DASEKE COMPANIES: Moody's Confirms B3 CFR, Outlook Stable --------------------------------------------------------- Moody's Investors Service confirmed the ratings of flatbed transportation and logistics provider Daseke Companies, Inc., including the B3 corporate family rating, the B3-PD probability of default rating and the B3 rating of the $500 million senior secured term loan due 2024. The Speculative Grade Liquidity rating remains SGL-3. The ratings outlook is stable. This completes the review for downgrade that was initiated on March 30, 2020. RATINGS RATIONALE The ratings consider the company's position as a leading provider of open deck transportation and logistics services and the generally well-established operational track record of Daseke's individual group companies. The ratings also take into account Daseke's initiatives to improve the efficiency of its operations and to strengthen its corporate structure to manage its operations more effectively, including through the appointment of a new management team. As a result, the company has become better equipped to contend with the current weak conditions in the industrial and construction sectors in North America. Nonetheless, Moody's expects that the company's already thin EBITA margin of 2.4% will likely remain pressured in 2020, before improving in 2021. The expected decrease in earnings this year could cause debt/EBITDA to increase to more than 5.5 times, calculated on a Moody's adjusted basis, from a more moderate 4.3 times as of March 31, 2020. Liquidity is adequate (SGL-3). The company's cash balance exceeded $100 million as of March 31, 2020, while the availability under Daseke's $100 million revolving credit facility is approximately $85 million. Although sufficient as of March 31, 2020, covenant headroom could diminish materially given the pressure on earnings and the step down in the maximum leverage ratio on March 31, 2021. Moody's expects free cash flow to be moderately negative in 2020, about $20 million, in part due to sustained investments in tractors and trailers. Free cash flow is calculated including fleet investments funded through equipment loans but excluding proceeds from the sale of used vehicles. Proceeds from the planned disposition of oil rig moving company Aveda would help to sustain Daseke's cash balance, although current economic conditions could make it more challenging to complete the sale of Aveda assets. The $500 million senior secured term loan due 2024 is rated B3, the same level as the CFR. This reflects the very high proportion of secured debt in the company's capital structure, comprising the asset-based revolving credit facility, the senior secured term loan and the equipment loans that are secured by newly purchased tractors. Considering the respective collateral of the secured debt, the recovery rate of the revolving credit facility would be highest, but there is no material differentiation in recovery rate at this point between the term loan and equipment loans. As an operator of heavy-duty trucks with diesel engines, Daseke is also exposed to the environmental risk that emission regulations will become more stringent, which could result in higher engine costs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Daseke is able to sustain EBITA margins of at least 4% while generating consistently positive free cash flows, taking into account fleet investments funded through equipment loans. Other considerations for an upgrade of the ratings include debt/EBITDA of less than 4.5 times and (FFO+interest)/interest of at least 3 times. The ratings could be downgraded if Moody's expects that liquidity deteriorates, including as a result of negative free cash flow, diminishing headroom under financial covenants, a material decrease in the company's cash balance or availability under its revolving credit facility. The ratings could also be downgraded if debt/EBITDA exceeds 6 times or if (FFO+interest)/interest decreases to less than 2 times. Confirmations: Issuer: Daseke Companies, Inc. LT Corporate Family Rating, Confirmed at B3 Probability of Default Rating, Confirmed at B3-PD Senior Secured Bank Credit Facility, Confirmed at B3(LGD4) Outlook Actions: Issuer: Daseke Companies, Inc. Outlook, Changed To Stable From Rating Under Review The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. Daseke Companies, Inc., headquartered in Addison, TX, is a leading provider of open deck transportation and logistics services and a direct subsidiary of Daseke, Inc., a company listed on NASDAQ Capital under the ticker "DSKE". Revenues for the last 12 months ended March 31, 2020 were $1.7 billion. DELTA AIR: Fitch Assigns BB+/RR4 Rating on New Unsecured Notes -------------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR4' rating to Delta Air Line's proposed unsecured notes. Fitch currently rates Delta at 'BB+'/Negative Outlook. Delta is planning to raise approximately $1 billion in unsecured notes with the proceeds used to bolster liquidity. KEY RATING DRIVERS Delta's Corporate Rating: Fitch downgraded Delta's Long-Term Issuer Default Rating (IDR) to 'BB+' from 'BBB-' on April 10. The Rating Outlook is Negative. Although Delta remains a stronger credit than its network peers, debt raised to sustain liquidity through the pandemic will drive credit metrics outside of a range supportive of investment-grade ratings at least through 2021 and likely into 2022. Rising Debt Balances: Delta has raised a material amount of debt, including the proposed issuance, which will weigh on its balance sheet, and prolong the time necessary to delever coming out of the coronavirus crisis. Debt raised to date, including the company's $5 billion secured transactions issued in April, the debt component of the PSP program within the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the proposed unsecured issuance, are materially above the amounts incorporated into Fitch's April 2020 forecast. Fitch expects that Delta's total debt balance at YE 2020 may be roughly double the balance at YE 2019. The increase in debt is partly offset by higher expected liquidity balances. Fitch expects the company to end the year with a substantial amount of liquidity, even in a harsh stress scenario where demand remains depressed through the end of the year. Delta also has certain debt maturities in late 2020 and early 2021, and shoring up liquidity to manage maturities would be credit neutral. Given Delta's rising debt balance, Fitch views the company's headroom within the 'BB+' rating as diminished, and future ratings downgrades are possible should recovery prove slower than Fitch's expectations. While Delta has limited remaining cushion at the 'BB+' rating level, the company still retains more financial flexibility than some peers. The company's pension plan has no required funding through 2024, and it has announced that it will defer a previously planned $500 million pension payment this year. Delta has also deferred more than $3 billion in planned capex. The company also ceased share repurchases and dividends, which accounted for more than $3 billion in cash outflow in 2019. DERIVATION SUMMARY Delta's 'BB+' rating is three notches below Southwest Airlines (BBB+) and is above its network competitors United Airlines and American Airlines. The ratings differential between Delta and Southwest reflects Southwest's longer track record of sustained profitability and FCF generation, lower cost structure and lack of pension obligations. The two-notch differential between Delta and United is driven by Delta's more conservative financial policies, better leverage metrics and operating margins, and its successful operational track record since its merger with Northwest Airlines. Delta is also rated in line with Alaska Air (BB+). Compared with Delta, Alaska suffers from a degree of geographic concentration, with its primary focus being on the West Coast of the U.S. These weaknesses are offset by Alaska's lower cost structure and FCF generation. KEY ASSUMPTIONS Key Assumptions in Fitch's rating case include a steep drop in demand through 2020, with full recovery only occurring by 2023. During 2020, Fitch's base case includes revenues down roughly 90% in the second quarter of the year, down as much as 60%-65% in the third quarter, and down around 50% in the fourth quarter. Fitch's base case reflects traffic only slowly recovering toward 2019 levels by the end of 2021, with a full rebound to 2019 levels only occurring by 2022 or 2023. Jet fuel prices for the year are assumed at around $1.50/gallon, and rise to about $1.65/gallon in 2021. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- FCF margins moving back to the low single digits; -- EBIT margins in the midteens; -- Sustained commitment to conservative financial policies; -- Adjusted debt/EBITDAR sustained around or below 2.5x. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- An extended drop in travel due to the coronavirus pandemic; -- Sustained adjusted debt/EBITDAR above 3.3x; -- FCF margins declining to neutral on a sustained basis; -- FFO fixed-charge coverage falling below 3.5x on a sustained basis; -- Change in management strategy that favors shareholder returns at the expense of a healthy balance sheet. LIQUIDITY AND DEBT STRUCTURE Fitch evaluated monthly cash burn as a key component of its recent airline portfolio review and believes that Delta has sufficient cash when paired with government grants, funds raised year-to-date, and the new proposed debt, to manage through a harsh downturn with assumptions. Delta ended the first quarter of 2020 with $6 billion in cash and marketable securities. The company drew on all existing revolvers to support current liquidity. ESG Considerations ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). DENNIS HELLYER: Oak Grove Buying Hancock County Property for $15K ----------------------------------------------------------------- Dennis G. Hellyer asks the U.S. Bankruptcy Court for the Central District of Illinois to authorize the sale of 7.2 acres located in the East half of the Southeast Quarter of Section 36, Township 4 North, Range 6 West of the Fourth Principal Meridian, and the West half of the Southwest Quarter of Section 31, Township 4 North, Range 5 West of the Fourth Principal Meridian in Hancock County, Illinois to Oak Grove, LLC for $15,000. On March 24, 2020, the Debtor entered into a real estate contract to sell the property. Pursuant to the Contract, the Debtor has received an offer from Oak Grove, 103W, Railroad, PO. Box 68, Oakville, IA 52646, to purchase said property for the amount of $15,000. The sale will not be free and clear of liens and encumbrances, which will be handled through the ordinary closing process. After payment of costs, including but not limited to the mortgage lien, other liens of record, real estate taxes, closing costs and real estate sales commissions, the Debtor does not expect to receive any proceeds from the sale because his payoff balance on the multiple cross-collateralized loans mortgages is in excess of the sale price. The Debtor is of the opinion that such an offer is fair and reasonable, and it is in the best interests of the estate, and asks that the Court approves said sale. A copy of the Contract is available at https://tinyurl.com/y9tg534u from PacerMonitor.com free of charge. Dennis G. Hellyer and Candy L. Hellyer sought Chapter 11 protection (Bankr. C.D. Ill. Case No. 19-80323) on March 19, 2019. The Debtors tapped B. Kip Shelby, Esq., as counsel. DIAMONDBACK INDUSTRIES: Seeks to Hire Foley & Lardner as Counsel ---------------------------------------------------------------- Diamondback Industries, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Foley & Lardner LLP as their legal counsel. The firm will provide these services in connection with Debtors' Chapter 11 cases: (a) advise Debtors of their rights, obligations and powers; (b) attend meetings and negotiate with representatives of creditors and other parties; (c) prepare legal papers; (d) assist Debtors in obtaining court approval to use cash collateral or debtor-in-possession financing; (e) take legal actions to preserve and protect Debtors' assets and interests including representing Debtors in negotiations concerning all litigation in which they are involved; (f) advise Debtors in connection with any potential sale or disposition of the bankruptcy estates' assets; (g) assist Debtors in the formulation of a disclosure statement and in the formulation, confirmation and consummation of a plan of liquidation or reorganization; (h) appear before the bankruptcy court, any appellate courts and the United States Trustee; and (i) consult with Debtors regarding tax matters. The hourly rates charged by Foley & Lardner are as follows: Partners $550 - $980 Associates/Special Counsel $370 - $675 Paralegals $230 - $290 The attorneys who will be handling the cases will be paid at hourly rates as follows: Marcus A. Helt $710 C. Ashley Ellis $525 Emily F. Shanks $370 Paul V. Storm $810 J. Michael Thomas $530 Abigail K. Drake $400 As of the petition date, the firm holds a pre-bankruptcy retainer in the amount of $10,000. Marcus Helt, Esq., at Foley & Lardner, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Marcus A. Helt, Esq. Paul V. Storm, Esq. C. Ashley Ellis, Esq. Emily F. Shanks, Esq. Foley & Lardner LLP 2021 McKinney Avenue, Suite 1600 Dallas, TX 75201 Telephone: (214) 999-3000 Facsimile: (214) 999-4667 About Diamondback Industries Diamondback Industries 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). Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. Debtors tapped Haynes and Boone, LLP as counsel and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ DIAMONDBACK INDUSTRIES: Seeks to Hire Stretto as Solicitation Agent ------------------------------------------------------------------- Diamondback Industries, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Stretto as their solicitation agent. Stretto will provide services in connection with Debtors' Chapter 11 cases, which include the preparation and distribution of notices and other documents. Prior to the petition date, Stretto received advance payment in the amount of $10,000. Sheryl Betance, managing director at Stretto, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Sheryl Betance Stretto 410 Exchange, Suite 100 Irvine, CA 92602 Telephone: (714) 716-1872 Email: sheryl.betance@stretto.com About Diamondback Industries Diamondback Industries 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). Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. Debtors tapped Haynes and Boone, LLP as counsel and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ DN ENTERPRISES: Selling Eight Omaha Investment Properties for $368K ------------------------------------------------------------------- DN Enterprises, Inc., asks the U.S. Bankruptcy Court for the District of Nebraska to authorize the sale of the following investment properties located at: (i) 1723 South 19th St, Omaha, NE 68108; (ii)1726 South 18th St, Omaha, NE 68108; (iii) 1725 and 1725 1/2 South 19th St Omaha, NE 681081; (iv) 1731 S. 19th Street, Omaha, NE 68108; (v) 3042 S. 19th St., Omaha, NE 68108; (vi) 3046 S. 19th St, Omaha, NE 68108; and (vii) 2135 Monroe Street, Omaha, NE 68107; and (viii) 1608 Z. Street, Omaha, NE 68107, to Gilbatrar, LLC or its successors or assigns for $367,500, in the aggregate, The terms of the sale are incorporated into the Purchase Agreement. The Buyer has agreed to pay Debtor the sum of $367,500, in the aggregate, for the Properties on an "as-is" basis without property inspections for the Properties, without contingencies. The Debtor can project that there will be closing costs, real estate commissions, and other administrative expense claims associated with the Sale of the Properties and the Debtor's bankruptcy case. At this time, and by this Motion, the Debtor asks approval and authority to deduct from the gross proceeds received by the estate at closing: (i) the Debtor's share of necessary closing costs; (ii) the Real Estate Broker's commission and fees pursuant to the Debtor's listing agreement; and (iii) the sum of $10,000 for administrative expenses incurred or to be incurred by the estate. The balance of the proceeds received by the Debtor will be paid to the holders of Interests in the Properties in accordance with the Bankruptcy Code. At this time, the Debtor cannot reasonably determine the amount of taxable income it may realize from the Sale. However, it is possible that it will incur taxable income as a result of the Sale. The Debtor submits the Proposed sale does not constitute a sale of all or substantially all of the Debtor's assets as the described asset pool constitutes eight of its 30 remaining investment properties. The Debtor obtained limited title reports on the Properties from DRI Title. The Debtor has sound business justification for the proposed Sale. First, it submits that, as a result of its ongoing marketing efforts, the Purchase Agreement represents the highest or otherwise best offers for the Properties that maximize the value thereof to Debtor and its estate under the current circumstances. Second, the Sale of the Properties is in line with Debtor’s overall plan to liquidate a portion of its holdings in order to pay off First State Bank and emerge from bankruptcy debt free. Third, the sale price is at fair market value and reached after good faith negotiations with the Buyer through third party real estate agents. Fourth, the liquidation of the Properties will eliminate the Debtor's responsibility to maintain the Properties while simultaneously resulting in a substantial reduction in the Debtor's secured debts. Having exercised sound business judgment, the Debtor has determined and submits to the Court that the Sale of the Properties free and clear of all Interests is in the best interests of the Debtor, the estate, and the creditors thereof. As such, the Sale should be approved free and clear of all Interests. Rule 6004(h) provides an order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the Order, unless the court orders otherwise. In order to permit the Sale to proceed as expeditiously as possible and to avoid further degradation or loss of value to the Properties, good cause exists to waive the 14-day stay provided in Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/y93bnue6 from PacerMonitor.com free of charge. About DN Enterprises DN Enterprises, Inc., owns and operates approximately 35 residential properties as rental investments. DN Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No. 18-81526) on Oct. 20, 2018. At the time of the filing, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of $1 million to $10 million. The case is assigned to Judge Thomas L. Saladino. Dvorak Law Group, LLC, is the Debtor's counsel. DRIVETIME AUTOMOTIVE: S&P Affirms 'CCC+' ICR; Outlook Negative -------------------------------------------------------------- S&P Global Ratings affirmed its 'CCC+' issuer credit and secured debt ratings on DriveTime Automotive Group Inc. The outlook remains negative. The rating affirmation reflects the reduced risk that DriveTime will breach covenants in the near term, and S&P's view that the up to $50 million tender offer for its senior secured notes due 2021 is opportunistic treasury management and not tantamount to a default. In late April, DriveTime amended covenants on its warehouse facilities to permit additional extensions in April and May related to the COVID-19 pandemic. Although these amendments are temporary, they reduce the risk of delinquency covenant breaches in the near term. The ratings continue to reflect S&P's expectation that delinquencies and charge-offs will rise due to the COVID-19 pandemic, which, if significant, could result in covenant breaches in the next 12 months. "We view the tender offer for up to $50 million of its $400 million of 8.0% senior secured notes due June 2021 as opportunistic treasury management and not tantamount to a default, notwithstanding the 'CCC+' ratings. We believe DriveTime has sufficient liquidity, and the company reported over $650 million of liquidity during its earnings call on April 3, of which about 15% was cash on hand and the remainder was availability on its secured credit facilities. In addition, DriveTime priced a $360 million asset-backed security (ABS) transaction last week, which will further bolster liquidity," S&P said. "In addition, before the tender offer announcement, the notes were trading at about 93% of par, a level that we do not view as distressed under current market conditions. The tender offer consideration for each $1,000 principal amount of notes is $940, including an early tender amount of $30, for notes tendered until June 12. After June 12, consideration will be $910," the rating agency said. The negative outlook on DriveTime reflects S&P's expectation that delinquencies and charge-offs are highly likely to increase given the current economic environment. S&P believes this is likely to erode much of the current cushion to the company's delinquency covenants on its warehouse lines. Additionally, the rating agency expects earnings and originations to deteriorate over the next 12 months. "We could lower the rating on DriveTime over the next 12 months if credit quality deteriorates such that the company is likely to breach its level 3 delinquency covenant triggers or its leverage covenant. Also, we could lower the ratings if we see a deterioration in liquidity or repayment risk related to its secured notes due June 2021," S&P said. "We could revise our outlook on DriveTime to stable over the next 12 months if macroeconomic conditions improve and the company is not at risk of breaching level 3 covenant triggers, in our view," the rating agency said. DYNAMIC PRECISION: S&P Cuts ICR to 'CCC'; Outlook Developing ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Dynamic Precision Group Inc. (DPG) to 'CCC' from 'CCC+'. At the same time, S&P lowered its issue-level rating on the company's revolver and term loan to 'CCC' from 'CCC+'. S&P's '3' recovery rating on the facilities remains unchanged. S&P continues to believe there is a risk that DPG (operating as Paradigm Precision) will be unable to refinance or extend the maturity of its credit facility given the current market uncertainty and the weakness in the commercial aerospace market due to the coronavirus. The company now has about six months until its $70 million revolver and term loan, which has about $245 million currently outstanding, both mature in December 2020. DPG has not been able to refinance or extend the maturities due to the weak conditions in the credit markets since early March because of the uncertainty surrounding the coronavirus pandemic's effects on the global economy. Although S&P expects the company to maintain enough liquidity to weather the lower production levels of the 737 MAX and the effects of the coronavirus on the demand for other aircraft, it does not have enough cash to cover the facilities maturing in December. DPG drew on its revolver to add cash to its balance sheet in March and currently has about $50 million of cash on hand with no additional availability. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety S&P's developing outlook on DPG reflects the uncertainty around its ability to refinance or extend its revolver and term loan, both of which mature in December 2020, because of the market volatility stemming from the coronavirus. However, it also reflects that the company's credit metrics will likely be strong for the rating level, with expected debt to EBITDA of about 5x in 2020 including the effects of its reduced production on the LEAP-1B engine for the 737 MAX and the lower demand for other aircraft due to the coronavirus. "We could lower our rating on DPG over the next six months if we believe it will be unable to refinance its debt or it appears likely the company will enter into a transaction that we would consider a distressed exchange. This could occur due to continued volatility in the credit markets or lower-than-expected demand for the company's engine parts given the reduction in air traffic stemming from the coronavirus pandemic," S&P said. "We could raise our ratings on DPG over the next six months if the company successfully refinances or extends the maturities of its revolver and term loan," the rating agency said. ECO-STIM ENERGY: Panel Taps Dundon Advisers as Financial Advisers ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Eco-Stim Energy Solutions, and its debtor-affiliates, seeks authorization from the U.S. Bankruptcy Court for the Southern District of Texas to retain Dundon Advisers LLC, as financial advisers. Eco-Stim Energy requires Dundon Advisers to: a. assist in the analysis, review and monitoring of the liquidation process, including, but not limited to an assessment of potential recoveries for general unsecured creditors; b. assist in the assessment and monitoring of any past, present and future asset sales and collection processes conducted on behalf of the Debtors and analysis of the proposed consideration; c. assist in the review of financial information prepared by the Debtors, and the economic analysis of proposed transactions for which Court approval is sought; d. assist in the review of the Debtors' prepetition financing transactions, dividends, distributions, and debt retirements, and associated events, including but not limited to, evaluating the Debtors' capital structure, financing agreements, defaults under any financing agreement and forbearances; e. attend at meetings and assistance in discussions with the Debtors, potential investors, banks, other secured lenders, the Committee and any other official committees organized in the Cases, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; f. assist in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; g. assist with the review of the affirmation or rejection of various executor contracts and leases; h. assist in the evaluation, analysis and forensic investigation of avoidance actions, including fraudulent conveyances and preferential transfers and certain transactions between the Debtors and affiliated entities; i. assist in the prosecution of the Committee's responses/objections to the Debtors' motions, including attendance at depositions and provision of expert reports/testimony on case issues as required by the Committee; j. render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisers and not duplicative of services provided by other professionals in the Cases; k. assist and support in the evaluation of restructuring, sale and liquidation alternatives; and l. provide reports, exhibits, and testimony in connection with any of the foregoing as requested. Dundon Advisers will be paid at these hourly rates: Alex Mazier $675 Colin Breeze $630 Demetri Xistris $525 Eric Reubel $550 Harry Tucker $475 John Roussey $550 Jonathan Feldman $675 Laurence Pelosi $675 Matthew Dundon $700 Peter Hurwitz $675 Phillip Preis $625 Robert Goch $550 Dundon Advisers will also be reimbursed for reasonable out-of-pocket expenses incurred. Matthew J. Dundon, partner of Dundon Advisers LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and (a) is not creditors, equity security holders or insiders of the Debtors; (b) has not been, within two years before the date of the filing of the Debtors' chapter 11 petition, directors, officers or employees of the Debtors; and (c) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. Dundon Advisers can be reached at: Dundon Advisers LLC 440 Mamaroneck Avenue, Fifth Floor Harrison, NY 10528 Tel: (914) 341-1188 Fax: (212) 202-4437 About Eco-Stim Energy Solutions Eco-Stim Energy Solutions, Inc., is an oilfield service and technology company offering pressure pumping and well completion services and field management technologies to oil and gas producers drilling in the U.S. and international unconventional shale markets. In addition to conventional pumping equipment, EcoStim offers its clients completion techniques that can dramatically reduce horsepower requirements, emissions and surfacefootprint. Eco-Stim filed a Chapter 11 petition (Bankr. S.D. Tex. Case Nos. 20-32167 & 20-32169) on April 16, 2020. Judge David R. Jones oversees the case. The Debtors are represented by Brian A. Kilmer, Esq., of KILMER CROSBY & QUADROS PLLC. EXIDE HOLDINGS: Noteholders Buying All Assets for $430 Million -------------------------------------------------------------- Exide Holdings, Inc. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize the bidding procedures in connection with the sale of substantially all assets to a new entity formed by the Requisite Exchange Priority Noteholders for the purpose of effecting the Credit Bid Transaction for $430 million, subject to overbid. The consummation of sale transactions that will maximize value for the Debtors' estates and preserve as many jobs for their employees as possible is the cornerstone of their chapter 11 strategy. The Debtors are asking to sell all of their assets, in whole or in part, including the following assets or businesses: (a)(i) the Industrial Energy Americas business segment, (ii) the Transportation Americas business segment, (iii) the Recycling Americas business segment, (iv) any operating facilities located in any of the foregoing business segments, or (v) any combination thereof ("Americas Asset"); and (b)(i) the Transportation EMEA/ROW business segment, (ii) the Industrial EMEA/ROW business segment, (iii) the Recycling EMEA/ROW segment and (iv) any combination thereof ("Europe/ROW Assets"). To that end, the Debtors have secured a stalking horse credit bid for their equity interests in the entities owning Europe/ROW Assets and certain of the Americas Assets. Exhibit A is the term sheet reflecting the Europe ROW Stalking Horse Credit Bid. The Europe/ROW Stalking Horse Credit Bid Term Sheet is the product of the extensive prepetition marketing efforts undertaken by the Debtors and their advisors. Given the exigencies of their financial condition, the timely sale of substantially all of the Debtors' Assets, in accordance with the milestones set forth in their DIP Financing and the conditions contemplated by the Europe/ROW Stalking Horse Credit Bid Term Sheet, is the best way to avoid a fire-sale liquidation of the Debtors' estates. Liquidation would be a worst-case scenario for all of the Debtors' economic stakeholders. Accordingly, the Debtors have developed bidding and auction procedures to govern the sale of the Assets. The Bidding Procedures (a) allow interested parties to submit bids for all or any part of (i) the Americas Assets, (ii) the Europe/ROW Assets, or (iii) the Americas Assets and the Europe/ROW Assets together, and (b) allow for the appointment of Additional Stalking Horse Bidders, subject to the terms and provisions of the Bidding Procedures. After the extensive marketing process and arm's-length negotiations overseen and directed by the Special Committee, the Debtors entered into the RSA with the Ad Hoc Group, which includes a binding stalking horse bid for the Europe/ROW Stalking Horse Package, subject to better or otherwise higher offers being obtained at the Auction. As a new entity formed by the Ad Hoc Group, the Europe/ROW Stalking Horse Credit Bidder is affiliated with entities that hold substantial equity interests in the Debtors. The Europe/ROW Stalking Horse Credit Bid Term Sheet represents a binding bid for (i) the Debtors' equity interests in Exide International Holdings LP, Exide International Holdings GP LLC, Exide Holding Europe SAS, and Exide Technologies (Shanghai) Company Limited, which together are the non-Debtor entities that own and operate the Europe/ROW Assets, (ii) the obligations due and owing to the Debtors under that certain Intercompany Note, dated as of July 1, 2015, and certain other assets of the Debtors to be mutually agreed. In exchange, the Europe/ROW Stalking Horse Credit Bid Term Sheet provides for consideration of $430 million plus assumed non-debt liabilities comprised of (i) discharge and release of claims under the Exchange Priority and First Lien Notes Indenture on account of the Exchange Priority Notes in the amount of $70 million; (ii) the assumption of existing indebtedness totaling approximately $360 million including (a) all claims outstanding under the Interim Financing in estimated to be $25 million (with the potential to be increased to $75 million through $50 million of additional debt that can be provided at the lenders' discretion), (b) all claims outstanding under the Superpriority Senior Secured Notes Indenture estimated to be $161 million, and (c) all claims outstanding related to local European financing facilities estimated to be $174 million; and (iii) the assumption of non-debt liabilities (including, but not limited to, pension-related liabilities). The Debtors request authority to provide the Europe/ROW Stalking Horse Credit Bidder with minimal stalking horse bid protections, as provided in the Europe/ROW Stalking Horse Credit Bid Term Sheet. Specifically, they have agreed that in the event that the Debtors consummate a sale of the Europe/ROW Stalking Horse Package to a Qualified Bidder other than to the Europe/ROW Stalking Horse Credit Bidde or the Debtors terminate the Europe/ROW Stalking Horse Purchase Agreement pursuant to the Fiduciary Out, the Debtors will pay in cash all reasonable and documented expenses of the Europe/ROW Stalking Horse Credit Bidder in connection with the Europe/ROW Stalking Horse Credit Bid, including legal and other professional fees. In the event it is not the Successful Bidder at the Auction, the Europe/ROW Stalking Horse Credit Bidder has agreed to act as a Back-up Bidder and, as such, hold open its binding offer to purchase the Europe/ROW Assets until an Alternative Europe/ROW Transaction is consummated. The Debtors will file an executed agreement reflecting the terms of the Europe/ROW Stalking Horse Credit Bid no later than five calendar days prior to the hearing approving these Bidding Procedures. The Europe/ROW Stalking Horse Agreement will include various customary representations, warranties, and covenants by and from the Debtors and the Europe/ROW Stalking Horse Credit Bidder, as well as certain conditions to closing the contemplated Sale Transaction and termination rights. The terms of the Europe/ROW Stalking Horse Agreement are subject to entry of the Bidding Procedures Order and, if the Europe/ROW Stalking Horse Credit Bid is the Successful Bidder, to the Sale Order. As set forth in further detail in the Bidding Procedures, the Debtors ask authority to enter into asset purchase agreements with one or more stalking horse bidders for assets other that the Europe/ROW Stalking Horse Package, pursuant to which the Debtors would provide Additional Stalking Horse Bidders with Additional Stalking Horse Bid Protections where the Debtors determine, in the exercise of their reasonable business judgment and with the consent of the DIP Agent and the Ad Hoc Group, that setting a floor for certain Assets is in the best interests of their estates and their creditors. The Bid Protection Objection Deadline is within seven calendar days after service of the Notice of Additional Stalking Horse Bidder. The salient terms of the Bidding Procedures are: a. Bid Deadline: July 1, 2020 at 4:00 p.m. (ET) b. Initial Bid: The Minimum Overbid Amount with respect to the Europe/ROW Stalking Horse Bid will be at least $1 million plus the Expense Reimbursement. c. Deposit: 10% of the Purchase Price d. Auction: If the Debtors receive more than one Qualified Bid for any Asset (including a Stalking Horse Bid), the Debtors will conduct the Auction on July 7, 2020 beginning at 10:00 a.m. (ET) at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 (or virtually pursuant to procedures to be filed by the Debtors on the Bankruptcy Court's docket prior to the Auction), or such other date as may be determined by the Debtors. e. Bid Increments: TBD f. Sale Hearing: July 20, 2020 at 10:00 a.m. (ET) g. Sale Objection Deadline: July 13, 2020 at 4:00 p.m (ET) h. Closing: (i) Aug. 27, 2020 for Americas Sale Transaction, (ii) Sept. 16, 2020 for Europe/ROW Sale Transaction i. Pursuant to section 363(k) of the Bankruptcy Code, persons or entities holding a perfected security interest in any Assets may, seek to submit a "credit bid" for such Assets, to the extent permitted by applicable law, any Bankruptcy Court orders, and the documentation governing the Debtors' prepetition or postpetition secured credit facilities, and subject to any applicable limitations set forth in the Prepetition Intercreditor Agreement dated as of June 17, 2019. j. The sale will be free and clear of any and all liens, claims, interests, and other encumbrances, with any such liens, claims, interests, and encumbrances to attach to the proceeds of the applicable sale. The Debtors will file with the Bankruptcy Court, serve on the Sale Notice Parties, and cause to be published on the Prime Clerk Website the Sale Notice. In connection with a Sale Transaction, the Debtors may ask to assume and assign any known executory Contracts and Leases that are designated by a Successful Bidder (or its designated assignee(s)). The Assumption and Assignment Procedures set forth in the Bidding Procedures Order are designed to, among other things, govern the Debtors' provision of Adequate Assurance Information and provide notice of Cure Costs to relevant Counterparties. The Debtors will serve the Assumption and Assignment Notice on all Counterparties regarding the proposed assumption and assignment of Proposed Assumed Contracts. The Assumption and Assignment Notice will identify the Debtors' calculation of any Cure Costs payable if the Debtors ultimately assume and assign such Contract and Lease. Each Counterparty will have ample time to object to the Debtors' calculation of such Cure Costs. In light of the current circumstances and financial condition of the Debtors, they believe that the sale of the Assets pursuant to a Sale Transaction must be consummated as soon as practicable to maximize value and preserve jobs. Accordingly, they ask that each of the Bidding Procedures Order and the Sale Order be effective immediately upon its entry and that the 14-day stay periods under Bankruptcy Rules 6004(h) and 6006(d) be waived. A copy of the Agreement and the Bidding Procedures is available at https://tinyurl.com/y9d3mex3 from PacerMonitor.com free of charge. About Exide Holdings Founded in 1888 and headquartered in Milton, Ga., Exide Holdings, Inc. -- https://www.exide.com/ -- is a stored electrical energy solutions company and a producer and recycler of lead-acid batteries. Across the globe, Exide batteries power cars, boats, heavy duty vehicles, golf carts, powersports, and lawn and garden applications. Its network power solutions deliver energy to vast telecommunication networks in need of uninterrupted power supply. Exide Technologies first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002, and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013 and emerged from bankruptcy in 2015. In the 2013 case, Exide tapped Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant. The official creditors committee retained Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co-counsel, and Zolfo Cooper, LLC served as its bankruptcy consultants and financial advisors. Exide Holdings and its affiliates, including Exide Technologies LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11157) on May 19, 2020. Exide Holdings was estimated to have $500 million to $1 billion in assets and $1 billion to $10 billion in liabilities. In the newest Chapter 11 case, Weil, Gotshal & Manges LLP is serving as legal counsel to Exide, Houlihan Lokey is serving as investment banker, and Ankura is serving as financial advisor. Richards, Layton & Finger, P.A., is the local counsel. Prime Clerk LLC is the claims agent, maintaining the page https://cases.primeclerk.com/Exide2020/ EXTRACTECH LLC: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 17 appointed a committee to represent unsecured creditors in the Chapter 11 case of Extractech, LLC. The committee members are: 1. Hernandez Electric, LLC Attn: Rutilo Lara 340 Freeport Blvd., Suite #1 Sparks, NV 89431 Phone: (775) 433-3763 Email: hernandezelectric@yahoo.com Counsel: William D. Cope Law Offices of William D. Cope 505 Ridge Street Reno, NV 89501 Phone: (775) 333-0838 Email: william@copebklaw.com 2. Robert A. Garrett P.O. Box 1335 Yerington, NV 89447 Phone: (209) 482-4941 Email: bobgsminc@gmail.com 3. Ace Hardware Attn: Cheryl Giomi 119 W. Bridge Street Yerington, NV 89447 Phone: (775) 463-4427 Email: giomi@aceretailer.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 Extractech LLC Extractech, LLC, a biotechnology company in Yerington, Nev., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-50496) on May 12, 2020. At the time of the filing, the Debtor had estimated assets of between $10 million and $50 million and liabilities of $1 million and $10 million. Debtor is represented by the Law Offices of Alan R. Smith. FARM STATION: Proposes Auction Sale of Vint Hill Assets ------------------------------------------------------- Farm Station Cafe, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Virginia to authorize the sale of tangible assets, to include furniture, fixtures, equipment, supplies, and inventory located at 7146 Farm Station Road, Vint Hill, Virginia where it operated its catering business. Incident to the operation of its catering business, the Debtor owned and used the Proposed Assets. Incident to the Companion Case, Blue Sky Events, LLC has also filed a motion to sell its assets. The motion to sell assets in the Companion case will be presented to the Court at the same time the Motion is presented. Based upon the existing environmental conditions, to include the impact and effects of the Covid-19 pandemic, the Debtor is not able to conduct is ordinary business affairs and the only means to obtain funds to satisfy the claims of creditors in the matter is thee sale as proposed in the Motion. If the Motion and the motion in the Companion Case are granted, the Debtor anticipates that the proceeds may be used to pay priority claims in the matter; however, neither the Debtor (in the case) nor Blue Sky Events, LLC intends to address the use or treatment of any proceeds of any sale within the Motion (or the motion in the Companion Case) other than to request that if the Court determines that there are any liens against the Proposed Assets, that any such liens be removed from the Proposed Assets and that such liens attach to the proceeds of the sale of the Proposed Assets. The Proposed Assets may be subject to pre-petition liens or claims by the Virginia Department of Taxation and any liens or claims from Building 2400, LLC (whether as the landlord for the Blue Sky Events or otherwise). The proposed sale would also be free and clear of any liens, claims, or interests emanating from post-petition Judgement No. 2020-00000272 in favor of the Virginia Department of Taxation which appears to be a Memorandum of Lien dated March 9, 2020 and recorded March 20, 2020. The Debtor asks to obtain the greatest value for the Proposed Assets. It believes that an auction, given the circumstances and exigencies of the case, is a reasonable procedure and expects that the market will provide a reasonable offer. Accordingly, the Debtor asserts that good cause exists to expose the Proposed Assets to sale at a public auction which is proposed to be held by the Court incident to any hearing upon the Motion. It proposes that, at the conclusion of any Auction, that the prevailing bidder will pay the amount of the prevailing bid, either by certified funds, cashier's check, or other medium approved by the Court to either the Debtor or the Debtor's counsel, and that the Debtor be execute and deliver an appropriate bill of sale conveying the Debtor's and the Estate's interest in the Proposed Assets. The Debtor believes that the proposed Procedures carefully balance the Debtor's interests in: (i) preserving the opportunity to attract good offers for the valuable lease; and (ii) expediting the sale process. Pursuant to Fed. R. Bankr. P. 6004(h), incident to the request, the Debtor asks that the Court dispenses with any stay of any order authorizing the sale of the Proposed Assets. About Farm Station Cafe Farm Station Cafe LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 20-10684) on March 3, 2020, listing under $1 million in both assets and liabilities. John P. Forest, II, Esq. is the Debtor's legal counsel. FIRST FLORIDA: Kunzes Object to Disclosure Statement ---------------------------------------------------- Creditors Melvin R. Kunz and Marian Kunz respectfully object to the First Florida Living Options, LLC's Disclosure Statement for Plan of Reorganization Dated March 2, 2020. The Kunzes point out that the Debtor makes no disclosure about avoidance claims against insiders. The Kunzes further point out that the Debtor has failed to adequately disclose or otherwise explain payments made in full or in part by, through or on behalf of the Debtor to the following entities as revealed in the consolidated 2016 and 2017 tax returns produced by the Debtor to the Kunzes. The Kunzes complain that the Debtor has failed to adequately disclosed payments made to the insider landlord, Ocala 33rd Avenue, LLC. According to the Kunzes, the Debtor has failed to adequately disclose payments made by the Debtor to insiders. The Kunzes point out The Debtor has failed to disclose a process by which any avoidance actions will be investigated by the Debtor. The Kunzes assert that pending discovery essential to compel adequate disclosures by the Debtor. Attorneys for creditors Melvin R. Kunz and Marian Kunz: Camille J. Iurillo, Esquire IURILLO LAW GROUP, P.A. Fla. Bar No. 902225 5628 Central Avenue St. Petersburg, FL 33707 Tel: (727) 895-8050 Fax: (727) 895-8057 E-mail: ciurillo@iurillolaw.com About First Florida Living Options First Florida Living Options LLC, formerly known as Surrey Place of Ocala, conducts its business under the names Hawthorne Health and Rehab of Ocala, Hawthorne Village of Ocala and Hawthorne Inn of Ocala. The company is based in Ocala, Fla. First Florida Living Options filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 19-02764) on July 22, 2019. The petition was signed by John M. Crock, vice president of Florida Living Options. The Debtor was estimated to have $1 million to $10 million in both assets and liabilities as of the bankruptcy filing. Judge Jerry A. Funk oversees the case. Johnson Pope Bokor Ruppel & Burns, LLP is the Debtor's bankruptcy counsel. FOODFIRST GLOBAL: GPEE Buying 45 Resto Locations for $45 Million ---------------------------------------------------------------- Foodfirst Global Restaurants, Inc., and its debtor-affiliates, ask the U.S. Bankruptcy Court for the Middle District of Florida to authorize the private sale of at least 45 of their restaurant locations, the associated assets, and the assumption and assignment of certain contracts and leases, to GPEE Lender, LLC for a credit bid of up to $40 million, pursuant to their Asset Purchase Agreement. As of Petition Date, FoodFirst owned nearly one hundred restaurants nationwide. FoodFirst acquired Brio Tuscan Grille, which was renamed Brio Italian Mediterranean, and Bravo Cucina Italiana, renamed BRAVO Fresh Italian, in a $100 million transaction that closed May 24, 2018. Brio was positioned within the upscale casual dining market, while Bravo was marketed toward the core casual dining market. When acquired, Brio and Bravo operated 110 locations in 32 states across the country reporting annual sales of more than $400 million for 2017 with nearly 10,000 employees. The Debtors were in a period of contraction and consolidation as the current international health crisis created massive restaurant closings and job losses throughout the country via state ordered shelter-in-place or stay-at-home directives. Shutting down dine-in service options further exacerbated the operational difficulties effecting the Restaurants. As of Petition Date, the Debtors were operating at 21 locations. Subsequent to filing, the Debtors have rejected 48 of Restaurant locations and reopened at another seven locations. They have a total of 53, non-rejected leases subject to potential assumption and assignment pursuant to the sale. By the Motion, the Debtors ask (a) entry of an order authorizing (i) the Sale of the assets to the Purchaser, pursuant to the terms and conditions set forth in the Purchase Agreement, free and clear of all liens, claims and encumbrances, and other interests, except as provided in the Purchase Agreement, with all liens, claims, and encumbrances, and other interests to attach to the sale proceeds; (ii) the assumption and assignment to the Purchaser of the executory contracts and unexpired leases; and (iii) the Debtors to consummate the Purchase Agreement and all documents, agreements, and contracts executed in conjunction therewith. The Debtors began an informal sale process shortly before Petition Date by reaching out to potential strategic partners to gage interest in sale or merger opportunities. However, due to the Pandemic and shut down of almost all businesses nationwide, there was little interest in acquisition of a restaurant business. Shortly prior to Petition Date, the Debtors started negotiations with various entities generally referred to as Earl Enterprises ("EE") which, through separate entities, own and operate over 200 restaurant locations under brands including Planet Hollywood, Bucca di Beppo, Bertuccis, and Earl of Sandwich. The Debtors and EE negotiated preliminary terms of a management agreement and DIP Loan based upon the assumption that any sale transaction would need to run through a chapter 11 process. After Petition Date, the Debtors sought approval to enter the management agreement and obtain the DIP Loan and, while askng Court approval, they considered offers from at least two other parties in respect of both management and the DIP Loan. Ultimately, the Debtors received Court approval to enter the management agreement and obtain the DIP Loan from entities affiliated with EE. The DIP Loan was extended the Purchaser. The Purchaser is managed by individuals associated with EE. The Purchaser's ownership also includes certain companies and individuals related to GP Investments, Ltd., which is the ultimate owner of each of the Debtors. Subsequent to Petition Date, another entity jointly owned by GP and EE, PHL Holdings, LLC purchased the approximately $30,000,000 in senior secured prepetition loans held by Garrison Loan Agency Service and City National Bank. Pursuant to the order approving the DIP Loan, the Purchaser has the ability to credit bid up to $40 million in respect of any asset purchase. The Debtors originally contemplated seeking approval of bid procedures and conducting a formal auction. However, after consultation with the Committee, and in the exercise of business judgment, Debtors believe the cost and time related to a formal auction is highly unlikely to produce a bidder willing to extend funds beyond the Credit Bid and the most efficient and effective path is to pursue a private sale (still subject to a higher and better offer) to the Purchaser. The material terms of the proposed Purchase Agreement are: a. Purchase Price: $25 million Credit Bid, $50,000 in cash, plus the assumption of the Assumed Liabilities in the approximate aggregate amount of $4.5 million, which include: (a) cure claims of executory contracts and unexpired leases, (b) postpetition accounts payable, (c) unpaid payroll that comes due and payable after theclosing (even if it relates to the pre-closing period), (d) accrued but unused paid time off for restaurant employees, (e) certain accrued taxes, (f) customer program liabilities (i.e., gift cards and Loyalty program), (g) real estate restructuring fees, and (h) transfer taxes. b. Purchaser: GPEE Lender, LLC or its affiliate or assign c. Purchased Assets: The Debtors' right, title and interest in substantially all of the assets. d. Assumed Liabilities: Liabilities and cure costs under assumed contracts and various other specified obligations as further set forth in Section of the Purchase Agreement. e. Closing Deadline: Closing will be held upon the third business day following satisfaction of the conditions set forth in Sections 9 and 10 of the Purchase Agreement, and in any event no later than June 30, 2020. f. Representations and Warranties: Customary for transactions of this kind. Except as specifically set forth in the Purchase Agreement, the Purchaser will accept the Property at the Closing "as is, where is," and "with all faults." The Debtors respectfully submit that sound business reasons support their decision to enter into the Purchase Agreement. The sale of the Assets to the Purchaser is in the best interests of its estate and that the proposed transaction should be approved by the Court pursuant to section 363(b) of the Bankruptcy Code. The Debtors submit that the proposed private sale of the Assets to the Purchaser in accordance with the Purchase Agreement is appropriate in light of the facts and circumstances of these Chapter 11 cases. Specifically, given the proposed purchase price for the Assets, the low probability that a competing offer will actually emerge with an offer higher or better than the offer of the Purchaser does not justify the costs and risks associated with delay. As part of the Purchase Agreement, the Debtors are asking authorization to assume and assign the executory contracts and unexpired leases to the Purchaser. The Purchaser is still examining the various unexpired leases it will ask to assume and assign; however, it has committed to assume at least 45 of the existing nonresidential real property leases. The Debtors will file the Assumption Notice at least three business days prior to the sale hearing. To implement the foregoing successfully, the Debtors ask a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the 14-day stay of an order authorizing the use, sale, or lease of property under Bankruptcy Rule 6004(h), to the extent these rules are applicable. A copy of the Agreement is available at https://tinyurl.com/ybxlc7kp from PacerMonitor.com free of charge. About Foodfirst Global Restaurants FoodFirst Global Restaurants, Inc. is the parent company of two of America's Italian restaurant brands: BRIO Tuscan Grille and BRAVO Cucina Italiana. It was formed in 2018 by investment firm GP Investments, Ltd. and a group of entrepreneurial investors. Visit https://www.foodfirst.com/index.html for more information. FoodFirst Global Restaurants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-02159) on April 10, 2020. At the time of the filing, the Debtors disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Karen Jennemann oversees the cases. Shuker & Dorris, P.A. is Debtors' legal counsel. The U.S. Trustee for Region 21 appointed a committee to represent unsecured creditors in Debtors' cases. The committee is represented by Pachulski Stang Ziehl & Jones LLP. FORESIGHT ENERGY: Court Approves Disclosure Statement ----------------------------------------------------- Judge Kathy A. Surratt-States has ordered that the Disclosure Statement filed by Foresight Energy LP, et al., is approved. The following dates and deadlines are hereby established: * Voting Resolution Event Deadline June 10, 2020 * Voting Deadline June 16, 2020, at 4:00 p.m. (prevailing Central Time) * Objection Deadline June 19, 2020, at 4:00 p.m. (prevailing Central Time) * Reply Deadline June 22, 2020, at 12:00 p.m. (prevailing Central Time) * Confirmation Hearing June 23, 2020, at 10:00 a.m. (prevailing Central Time) A full-text copy of the Disclosure Statement dated May 20, 2020, is available at https://tinyurl.com/ybkhgg6a from PacerMonitor.com at no charge. About Foresight Energy Foresight Energy and its subsidiaries -- http://www.foresight.com/ -- are producers of thermal coal, with four mining complexes and nearly 2.1 billion tons of proven and probably coal reserves strategically located near multiple rail and river transportation access points in the Illinois Basin. The Debtors also own a barge-loading river terminal on the Ohio River. From this strategic position, the Debtors sell their coal primarily to electric utility and industrial companies located in the eastern half of the United States and across the international market. Foresight Energy LP and its affiliates sought Chapter 11 protection (Bankr. E.D. Mo. Lead Case No. 20-41308) on March 10, 2020. The Hon. Kathy A. Surratt-States is the case judge. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to Foresight Energy; Jefferies Group is acting as investment banker; and FTI Consulting, Inc. is acting as financial advisor. Prime Clerk LLC is the claims agent at https://cases.primeclerk.com/ForesightEnergy Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel and Lazard Freres & Co. LLC is acting as investment banker to the Ad Hoc Lender Group representing lenders under the first lien credit agreement. Milbank LLP is acting as legal counsel and Perella Weinberg Partners LP is acting as investment banker to the Ad Hoc Lender Group representing crossover lenders under each of the second lien indenture and first lien credit agreement. The Debtors were estimated to have $1 billion to $10 billion in assets and liabilities. FRANK INVESTMENTS: Keystone Buying Hammonton Property for $150K --------------------------------------------------------------- Frank Investments, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida to authorize the sale of the real property with a street address of 3320 South White Horse Pike, Hammonton, Atlantic County, New Jersey, to Keystone Mountain Lakes Regional Councils of Carpenters Building Corporation NJ for $150,000, subject to overbid. The Debtor is part of a group of companies that owned and operated movie theatres, restaurants and similar businesses in Florida, New Jersey and other states prepetition. It owns the Real Property. The Debtor estimates the value of the Real Property to be approximately $150,000. The Debtor believes that the estate lacks equity in the Property. In particular, the Property is encumbered by a cross-collateralized mortgage lien in favor of The Bancorp Bank in the aggregate amount of approximately $17.2 million as of the petition date. The proof of claim of Bancorp is on file with the Court at Proof of Claim No. 25. On April 26, 2019, the Debtor filed an application to employ the Broker in connection with the sale of various pieces of property, including the Real Property. The Court entered an order granting the application on May 14, 2019. After diligent marketing efforts the Broker has procured a purchase offer of $150,000 for the Property from a third-party, the Buyer. The parties have executed their proposed sale contract. Among other terms, the APA: (a) conditions its effectiveness on the approval of the Court, (b) permits higher and better offers to be made for the Property until bankruptcy court approval is obtained and (c) conveys the Property subject to a cell phone tower access and utility easement agreement. Any liens, claims and interests in the Real Property, including the Bancorp Lien, will attach to the proceeds of the Real Property sale; provided, however, that upon the agreement of the Debtor and Bancorp such proceeds will be utilized at closing: (a) to satisfy any liens senior to the Bancorp Lien, including any ad valorem tax liens encumbering the Property, (b) to pay customary closing costs and typical closing adjustments, including the Broker's commissions and expenses. Through the Motion, the Debtor respectfully asks that the Court: (a) approves the APA, and authorize the transfer of the Real Property to the Buyer free and clear of all liens, claims and encumbrances, with any such liens, claims and encumbrances to attach to the proceeds of the sale; (b) finds that the sale is fully exempt from the payment of any realty transfer taxes, and (c) authorizes the Debtor to pay the Broker its commission at the closing of the sale of the Property. The Debtor also asks a finding that the Sale is fully exempt from the payment of any realty transfer taxes pursuant to N.J.S.A.46:15-10(g) and Section 1146(a) of the Bankruptcy Code, including any fee imposed upon Grantees of a Deed for transfer of real property for consideration in excess of $1 million pursuant to N.J.S.A. 46:15-7.2. Service of the Motion is being provided to the Clerk of Atlantic County, New Jersey, which is the location of the Property, and the New Jersey Division of Taxation. The Court again entered an order approving the employment of the Broker on May 14, 2019. Under the terms of its listing agreement the Broker is entitled to a fee of 4% of the sale price, i.e. $6,000, plus reimbursement of marketing expenses of up to $12,000. $6,000 of the marketing expenses were paid at the closing of a prior real property sale, which leaves a $6,000 balance. Through the Motion, the Debtor respectfully asks authority to pay the Firm $12,000, i.e. its $6,000 commission plus the remaining $6,000 in marketing expense reimbursements, at the closing of the Sale. The amount will be paid from the proceeds of the Sale to which the lien of senior secured creditor, Bancorp, attaches. As such, neither the estate nor its creditors will be prejudiced by the payment. The Debtor avers that the Bancorp consents to said relief. Section 3 of the APA directs the closing of the Property sale to occur on June 15, 2020. In light of this dynamic, the Debtor respectfully asks that the Court waives the requirement that any order approving the sale be stayed for 14 days as required by Federal Rule of Bankruptcy Procedure 6004(h), and direct the closing to occur no later than June 15, 2020. It asks the Court to consider the motion on an expedited basis, on June 11, 2020. A copy of the APA is available at https://tinyurl.com/yao6mxek from PacerMonitor.com free of charge. About Frank Investments Frank Investments Inc., Frank Theatres Management LLC and Frank Entertainment Companies, LLC are affiliates of Rio Mall, LLC, which sought bankruptcy protection (Bankr. S.D. Fla. Case No. 18-17840) on June 28, 2018. Rio Mall, LLC, owns and operates commercial real property that comprises the shopping center known as Rio Mall located at 3801 Route 9 South, Rio Grande, N.J. Frank Investments and its debtor-affiliates sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 18-20019) on Aug. 17, 2018. At the time of the filing, Frank Investments and Frank Entertainment had estimated assets of between $10 million and $50 million and liabilities of the same range. Frank Theaters had estimated assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. Bradley S. Shraiberg, Esq., at Shraiberg Landau & Page, P.A., is the Debtors' bankruptcy counsel. No official committee of unsecured creditors has been appointed. FRASER'S BOILER: 2 Creditors Removed as Committee Members --------------------------------------------------------- Gregory Garvin, acting U.S. trustee for Region 18, on June 8 announced that Roy and Ruby Dennis have been removed as members of the official committee of unsecured creditors in the Chapter 11 case of Fraser's Boiler Service, Inc. The remaining members of the committee are: (1) Todd Faulkner 1345 NW Huckle Drive Bremerton, WA 98311 Phone: 360-340-2105 Email: TFaulkner413@gmail.com (2) Diane Readwin 1326 SW Station Circle Port Orchard, WA 98367 Phone: 360-271-6289 Email: readwin@wavecable.com (3) Charisse Dahlke 10271 Sunset Bend Drive Boca Raton, FL 33428 Phone: 760-851-4352 Email: charissed@gmail.com (4) William G. Jellyman 1143 46th Street San Diego, CA 92102 Phone: 619-262-5483 (5) Ronald D. Brown (Deceased) c/o Dorenne Brown 217 Country Club Drive South San Francisco, CA 94080 Phone: 650-583-3386 (6) Vernon J. Marion (Deceased) c/o Matt Marion 2877 Ridgeway Drive National City, CA 91950 Phone: 619-267-7726 (7) Barbara Ann Tucker P.O. Box 2434 La Pine, OR 97739 Phone: 541-536-5332 About Fraser's Boiler Service Headquartered in Olympia, Wash., Fraser's Boiler Service, Inc. is a boiler, tank and shipping container manufacturer. Fraser's Boiler Service sought chapter 11 protection (Bankr. W.D. Wash. Case No. 18-41245) on April 9, 2018, listing estimated assets at $10 million to $50 million and estimated liabilities at $50 million to $100 million. The petition was signed by David J. Gordon, president. Judge Brian D. Lynch oversees the case. Debtor tapped Darren R Krattli, Esq., of Eisenhower Carlson PLLC, as its legal counsel. On April 20, 2018, the Debtor filed a disclosure statement, which explains its proposed Chapter 11 plan. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 18, 2018. The committee is represented by Mark D. Waldron, Esq. FREEMAN MOBILE: Hires Aligner Guru as Support Provider ------------------------------------------------------ Freeman Mobile Orthodontics PLLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Aligner Guru, S.A., as clinical support provider to the Debtors. Freeman Mobile requires Aligner Guru to provide aligner design and clinical support for orthodontics patients. Aligner Guru will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Adrian Mata, partner of Aligner Guru, S.A., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. About Freeman Mobile Orthodontics Freeman Orthodontics is a Fort Lauderdale, Florida-based orthodontics specialist that provides cutting-edge, high quality and friendly orthodontic care to patients in different communities in Florida. It takes price in providing patients with specialized and personalized service because it recognizes the different needs of patients. It features the newest technological advances in dental industry like brackets, braces, clear aligners, accelerated orthodontics, and many more. Freeman Mobile Orthodontics PLLC and affiliate Freeman Orthodontics, P.A., sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 20-15408) on May 17, 2020. Affiliates Interstellar Disruption LLC, Freeman Holdings LLC, Freeman Holdings II LLC and FWP Realty Holdings also sought bankruptcy protection. On May 17, 2020, Christoper Scott Freeman, the lead orthodontics at the practice, also filed a personal Chapter 11 case. He disclosed $13 million in liabilities, including four bank loans worth $12.6 million. The Hon. Scott M. Grossman is the case judge. The Debtors hired Wernick Law, PLLC, as counsel. FREEMAN MOBILE: Hires Aligner Olinville as Support Provider ----------------------------------------------------------- Freeman Mobile Orthodontics PLLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Olinville Enterprise, LLC, as bookkeeper to the Debtors. Freeman Mobile requires Olinville to provide overall financial accounting services including bookkeeping, payroll services, treasury management, financial analysis, budget and financial statement preparation. Olinville will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Sherry Tomas, partner of Olinville Enterprise, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Olinville can be reached at: Sherry Tomas Olinville Enterprise, LLC 1575 50th Street Brooklyn, NY 11219 About Freeman Mobile Orthodontics Freeman Orthodontics is a Fort Lauderdale, Florida-based orthodontics specialist that provides cutting-edge, high quality and friendly orthodontic care to patients in different communities in Florida. It takes price in providing patients with specialized and personalized service because it recognizes the different needs of patients. It features the newest technological advances in dental industry like brackets, braces, clear aligners, accelerated orthodontics, and many more. Freeman Mobile Orthodontics PLLC and affiliate Freeman Orthodontics, P.A., sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 20-15408) on May 17, 2020. Affiliates Interstellar Disruption LLC, Freeman Holdings LLC, Freeman Holdings II LLC and FWP Realty Holdings also sought bankruptcy protection. On May 17, 2020, Christoper Scott Freeman, the lead orthodontics at the practice, also filed a personal Chapter 11 case. He $13 million in liabilities, including four bank loans worth $12.6 million. The Hon. Scott M. Grossman is the case judge. The Debtors hires Wernick Law, PLLC, as counsel. FREEMAN MOBILE: Hires Galvan Messick as Special Counsel ------------------------------------------------------- Freeman Mobile Orthodontics PLLC, and its debtor-affiliates, seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Galvan Messick, PLLC, as special counsel to the Debtors. Freeman Mobile requires Galvan Messick to advise the Debtor as to regulatory issues with regard to healthcare, and specifically, dental services. Galvan Messick will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Jeffrey Galvan, partner of Galvan Messick, PLLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Galvan Messick can be reached at: Jeffrey Galvan, Esq. GALVAN MESSICK, PLLC 951 Yamato Rd, Suite 250 Boca Raton, FL 33431 Tel: (561) 994-5956 About Freeman Mobile Orthodontics Freeman Orthodontics is a Fort Lauderdale-based orthodontics specialist that provides cutting-edge, high quality and friendly orthodontic care to patients in different communities in Florida. It takes price in providing patients with specialized and personalized service because it recognizes the different needs of patients. It features the newest technological advances in dental industry like brackets, braces, clear aligners, accelerated orthodontics, and many more. Freeman Mobile Orthodontics PLLC and affiliate Freeman Orthodontics, P.A., sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 20-15408) on May 17, 2020. Affiliates Interstellar Disruption LLC, Freeman Holdings LLC, Freeman Holdings II LLC and FWP Realty Holdings also sought bankruptcy protection. On May 17, 2020, Christoper Scott Freeman, the lead orthodontics at the practice, also filed a personal Chapter 11 case. He $13 million in liabilities, including four bank loans worth $12.6 million. The Hon. Scott M. Grossman is the case judge. The Debtors hires Wernick Law, PLLC, as counsel. FREEMAN MOBILE: Hires Next Chapter as Service Provider ------------------------------------------------------ Freeman Mobile Orthodontics PLLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Next Chapter, LLC, as business managerial service provider to the Debtors. Freeman Mobile requires Next Chapter to: -- advise on the downsizing of unnecessary, underutilized, and expensive staff located in Arkansas; -- oversee and manage relocation to Florida; -- hire less expensive, local staff to work from the Florida office where they could be supervised; -- maximize the efficiency and use of that staff's time to keep HR costs down while allowing the Debtor to perform all the patient care needed. Next Chapter will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Matt Pisoni, and Serena Dyer Pisoni, partners of Next Chapter, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Next Chapter can be reached at: Matt Pisoni Serena Dyer Pisoni NEXT CHAPTER, LLC 123 College Place, Suite 1011 Norfolk, VA 23510 Tel: (716) 803-3340 About Freeman Mobile Orthodontics Freeman Orthodontics is a Fort Lauderdale-based orthodontics specialist that provides cutting-edge, high quality and friendly orthodontic care to patients in different communities in Florida. It takes price in providing patients with specialized and personalized service because it recognizes the different needs of patients. It features the newest technological advances in dental industry like brackets, braces, clear aligners, accelerated orthodontics, and many more. Freeman Mobile Orthodontics PLLC and affiliate Freeman Orthodontics, P.A., sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 20-15408) on May 17, 2020. Affiliates Interstellar Disruption LLC, Freeman Holdings LLC, Freeman Holdings II LLC and FWP Realty Holdings also sought bankruptcy protection. On May 17, 2020, Christoper Scott Freeman, the lead orthodontics at the practice, also filed a personal Chapter 11 case. He $13 million in liabilities, including four bank loans worth $12.6 million. The Hon. Scott M. Grossman is the case judge. The Debtors hired Wernick Law, PLLC, as counsel. FREEMAN MOBILE: Hires Oneiric Intelligent as Service Provider ------------------------------------------------------------- Freeman Mobile Orthodontics PLLC, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Oneiric Intelligent Systems, LLC dba MH Solutions, as technology support service provider to the Debtors. Freeman Mobile requires Oneiric Intelligent to: a. assist in the creation and monitoring of new campaigns to increase patient engagement; b. automate processes including financial and operational tasks; c. recruit new team members to grow the customer experience and billing team; d. provide financial analysis for daily transactions and forecasts to set quarterly goals; e. implement strategies and creating a work dynamic that allows the company to use each team member's time in the most optimal way; f. maintain the merchant processing account in good standing by rebottling disputes and making sure all transactions are accurate; and g. design and implement systems to improve internal and external communications. Oneiric Intelligent will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Marvin Rua, partner of Oneiric Intelligent Systems, LLC dba MH Solutions, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Oneiric Intelligent can be reached at: Marvin Rua Oneiric Intelligent Systems, LLC dba MH Solutions 31711 Sherman Ave. Madison Heights, MI 48071 Tel: (248) 554-3090 About Freeman Mobile Orthodontics Freeman Orthodontics is a Fort Lauderdale, Florida-based orthodontics specialist that provides cutting-edge, high quality and friendly orthodontic care to patients in different communities in Florida. It takes price in providing patients with specialized and personalized service because it recognizes the different needs of patients. It features the newest technological advances in dental industry like brackets, braces, clear aligners, accelerated orthodontics, and many more. Freeman Mobile Orthodontics PLLC and affiliate Freeman Orthodontics, P.A., sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 20-15408) on May 17, 2020. Affiliates Interstellar Disruption LLC, Freeman Holdings LLC, Freeman Holdings II LLC and FWP Realty Holdings also sought bankruptcy protection. On May 17, 2020, Christoper Scott Freeman, the lead orthodontics at the practice, also filed a personal Chapter 11 case. He disclosed $13 million in liabilities, including four bank loans worth $12.6 million. The Hon. Scott M. Grossman is the case judge. The Debtors hired Wernick Law, PLLC, as counsel. FRICTIONLESS WORLD: Agtec Appointed as New Committee Member ----------------------------------------------------------- The Office of the U.S. Trustee on June 9, 2020 appointed Agtec Industries Pvt. Ltd. as new member of the official committee of unsecured creditors in the Chapter 11 case of Frictionless World, LLC. Kenneth Wilmes, who was appointed on Nov. 20, 2019, had been removed from the committee. Frictionless World can be reached through: Agtec Industries Pvt. Ltd. Attn: Kulbhushan Singh Chadha 38-B Udyog Vihar, Ecotech-2 Greater Noida – 201306 (U.P.) India Tel: +91-9811026706 Email: ksc@agtec.co.in About Frictionless World Frictionless World, LLC provides professional grade outdoor power equipment, replacement parts for tractors, hitches and agricultural implements, gate and fence equipment, lithium ion powered tools, and ice fishing equipment. It offers brands such as Dirty Hand Tools, RanchEx, Redback, Trophy Strike and Vinsetta Tools. For more information, visit https://www.frictionlessworld.com/ Frictionless World sought Chapter 11 protection (Banks. D. Colo. Case No. 19-18459) on Sept. 30, 2019. The Hon. Michael E. Romero is the case judge. In the petition signed by CEO Daniel Banjo, the Debtor disclosed total assets of $14,600,503 and total liabilities of $17,364,542. The Debtor tapped Wadsworth Garber Warner Conrardy P.C. as bankruptcy counsel; Thomas P. Howard, LLC as special counsel; r2 Advisors, LLC as financial advisor; and Three Twenty-One Capital Partners, LLC as investment banker. The Office of the U.S. Trustee appointed creditors to serve on the official committee of unsecured creditors on Nov. 20, 2019. The committee hired Archer & Greiner, P.C. as general bankruptcy counsel; Holland & Hart LLP as local counsel; and JW Infinity Consulting LLC as financial advisor. GALILEO LEARNING: Hires Stretto as Administrative Advisor --------------------------------------------------------- Galileo Learning, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of California to employ Stretto, as administrative advisor to the Debtors. Galileo Learning requires Stretto to: a. prepare the Debtors' summary of assets and liabilities; b. prepare the Debtors' schedules of assets, liabilities, and executory contracts and unexpired leases; c. prepare the Debtors' statement of financial affairs; d. prepare the Debtors' monthly operating reports; e. solicit any plan(s) of reorganization for the Debtors; f. prepare, serve, and tabulate ballots for any plan(s) of reorganization for the Debtors; g. create and maintain confidential online workspaces or data rooms (to the extent any are needed); and h. perform any other services agreed upon by Stretto and the Debtors or otherwise required by applicable law, governmental regulations or court rules or orders. Stretto will be paid at these hourly rates: Director of Securities $209 Solicitation Associate $190 COO and Executive VP No charge Director/Managing Director $192 to $230 Associate/Senior Associate $65 to $182 Analyst $30 to $60 Stretto will be paid a retainer in the amount of $30,000. Stretto will also be reimbursed for reasonable out-of-pocket expenses incurred. Sheryl Betance, a managing director of Stretto, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Stretto can be reached at: Sheryl Betance STRETTO 7 Times Square, 16th Floor New York, NY 10036 Tel: (714) 716-1872 E-mail: sheryl.betance@stretto.com About Galileo Learning Galileo Learning, LLC, operates innovative and educational summer camps for pre-kindergarteners through tenth graders. In its 18 years of operation, Galileo Learning has invested more than $10 million in the development of more than 2,500 hours of unique curriculum offerings. Galileo Learning Franchising LLC is a "wholly-owned subsidiary" of Galileo. Galileo Learning and Galilo Learning Franchising sought Chapter 11 protection (Bankr. N.D. Cal. Lead Case No. 20-40857) on May 6, 2020. The petitions were signed by Glen Tripp, chief executive officer of Galileo Learning and sole member of Galileo Learning Franchising. Galileo Learning was estimated to have assets and liabilities of $10 million to $50 million while Galileo Learning Franchising was estimated to have assets of $1 million to $10 million and estimated liabilities of less than $50,000. The Hon. William J Lafferty oversees the case. Hanson Bridgett LLP serves as bankruptcy counsel to Debtors. Stretto is the claims and noticing agent. GEORGIA DIRECT: Employee Buying 2013 GMC Sierra Truck for $5K ------------------------------------------------------------- Georgia Direct Carpet, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Sothern District of Indiana to authorize the private sale of a 2013 GMC Sierra Truck to Bob Fisher for $5,000. Georgia Direct Carpet currently owns the Truck that was financed by West End Bank, S.B. The Bank has a lien on the Truck. Since Oct. 23, 2013, an employee of Georgia Direct, Mr. Fisher has paid Georgia Direct $50 per week for a total of $18,100. Mr. Fisher has agreed to purchase the Truck for one additional payment of $5,000. In light of the Bank's lien on the Truck, the Payment will be made by Mr. Fisher directly to the Bank. Although the Truck has not been marketed, the Debtor's counsel has determined that similar trucks sell in secondary markets for between $4,068 and $5,943, with $5,006 being the average. In order to market and sell the Truck in a public auction, Georgia Direct would incur attorney fees and costs of sale including marketing costs and a 10% to 15% auctioneer fee. Accordingly, if sold in a public auction the Truck would likely net less than $5,000. Thus, Georgia Direct Carpet asks authority to sell the Truck to Mr. Fisher for the total sum of $5,000. The only material contingency of the potential sale is approval from the Court. The sale does involve the sale of any personally identifiable information. The Truck would be sold free and clear of all known liens. Georgia Direct submits that the sale of the Truck through the means of a private sale is an exercise of their sound business judgment. It also submits that proceeding with the purchase of the Truck through a private sale would be in the best interest of the estate. About Georgia Direct Carpet Georgia Direct Carpet, Inc., also known as Georgia Carpet Direct, owns and operates a carpet and flooring store in Richmond, Ind. It offers carpets, hardwoods, laminate flooring and ceramic tile floor products. Georgia Direct Carpet and its affiliates sought Chapter 11 protection (Bankr. S.D. Ind. Lead Case No. 19-06316) on Aug. 26, 2019. In the petition signed by Anthony Bledsoe, president, Georgia Direct Carpet estimated assets and liabilities at $1 million to $10 million. The Hon. Robyn L. Moberly is the case judge. The Debtors tapped Mattingly Burke Cohen & Biederman LLP as their legal counsel; Mattingly Burke Cohen & Biederman LLP, as special counsel; and Barron Business Consulting, Inc. as their financial advisor. The Office of the U.S. Trustee appointed creditors to serve on the official committee of unsecured creditors on Oct. 9, 2019. The committee is represented by Mercho Caughey. GGI HOLDINGS: Franchisees Can File Panel Application Until June 15 ------------------------------------------------------------------ The United States Trustee appointed an Official Committee of Unsecured Creditors pursuant to section 1102(b) of the Bankruptcy Code in the bankruptcy cases of GGI Holdings, LLC, et al. (Gold's Gym). The U.S. Trustee is now soliciting a Gold's Gym franchisee for appointment to the Committee. If one is a Gold's Gym franchisee and wish to be considered for membership on the Committee, one must complete the required Questionnaire Form and return it to the Office of the United States Trustee no later than 4:00 p.m.(Central Standard Time), on Monday, June 15, 2020 by email to Erin.Schmidt2@usdoj.gov and Elizabeth.A.Young@usdoj.gov, attention Erin Schmidt and Elizabeth Young. After receipt of a completed questionnaire, the U.S. Trustee's Office will contact you to set up a telephonic interview. Franchisees who are interested in serving on a committee are encouraged to send their completed questionnaires before the June 15, 2020 deadline. About GGI Holdings Founded in 1965, Gold's Gym operates a network of company-owned and franchised fitness centers. It owns and operates approximately 95 gyms domestically, and holds franchise agreements for more than 600 gyms domestically and internationally. Its majority owner is TRT Holdings, Inc. -- acquired the business in 2004. GGI Holdings, LLC, Gold's Gym International, Inc. and other related entities sought Chapter 11 protection (Bankr. 20-31318) on May 4, 2020. GGI Holdings was estimated to have assets and debt of $50 million to $100 million. The Hon. Harlin Dewayne Hale is the case judge. The Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC Group Inc. is the claims agent. GGI HOLDINGS: Gold's Gym Woodbridge Appointed as Committee Member ----------------------------------------------------------------- The Office of the U.S. Trustee on June 8, 2020, appointed Gold's Gym Woodbridge, VA, as new member of the official committee of unsecured creditors in the Chapter 11 cases of GGI Holdings, LLC and its affiliates. The bankruptcy watchdog had earlier appointed Encino Pinnacle Owner II LP, Les Mills United States Trading and JVRC Associates, LLP, court filings show. Gold's Gym can be reached through: Joseph Harrison Gold's Gym Woodbridge, VA1 3403 Kemper Road Arlington, VA 22206 (540) 287-0995 goldsgymva@yahoo.com About GGI Holdings Founded in 1965, GGI Holdings, LLC and its affiliates, including Gold's Gym International, Inc. and Golds Holding Corp, operate a network of company-owned and franchised fitness centers. They own and operate approximately 95 gyms domestically, and hold franchise agreements for more than 600 gyms domestically and internationally. The majority owner -- TRT Holdings, Inc. -- acquired the business in 2004. GGI Holdings and affiliates sought Chapter 11 protection (Bankr. N.D. Texas Lead Case No. 20-31318) on May 4, 2020. GGI Holdings was estimated to have assets and debt of $50 million to $100 million The Hon. Harlin Dewayne Hale is the case judge. Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC Group Inc. is the claims agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' bankruptcy cases. The committee is represented by Kilpatrick Townsend & Stockton, LLP. GRANITE TACTICAL: Court Confirms Reorganization Plan ---------------------------------------------------- On May 20, 2020, the United States Bankruptcy Court entered an order confirming Granite Tactical Vehicles, Inc's Plan of Reorganization filed on March 26, 2020. The order of confirmation discharges the debtor from all debts dischargeable. About Granite Tactical Vehicles Granite Tactical Vehicles, Inc., filed a voluntary Chapter 11 petition (Bankr. M.D.N.C. Case No. 19-50775) on July 30, 2019. At the time of filing, the Debtor had estimated assets of $1 million to $10 million and estimated liabilities of $100,001 to $500,000. The Debtor is represented by Dirk W. Siegmund, Esq., at Ivey, McClellan, Gatton & Siegmund, in Greensboro, N.C. The case is assigned to Hon. Benjamin A. Kahn. GREEN WORLD: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Green World Council Bluffs LLC 350 W. Venice Ave. #101 Venice, FL 34285 Business Description: Green World Council Bluffs LLC is engaged in activities related to real estate. Chapter 11 Petition Date: June 10, 2020 Court: United States Bankruptcy Court Western District of Washington Case No.: 20-11621 Debtor's Counsel: Frank S. Homsher, Esq. LAW OFFICE OF FRANK S. HOMSHER 510 Bell St. Edmonds, WA 98020 Tel: 425-320-9628 Email: Homsherf7@aol.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Kim, managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/YpEEWz GREG HOMESLEY: Court Approves Disclosure Statement -------------------------------------------------- Judge Jerry A. Funk has ordered that the Disclosure Statement filed by Greg Homesley, CPA, P.C., Inc. is approved. The Court finds the Disclosure Statement contains adequate information as defined by 11 U.S.C. Sec. 1125. About Greg Homesley CPA Greg Homesley, CPA, P.C. -- http://www.greghomesley.com/-- provides comprehensive tax, accounting and financial services for professionals, executives, small business owners and retirees. Greg Homesley sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03370) on Aug. 31, 2019. At the time of the filing, the Debtor disclosed $283,495 in assets and $1,081,430 in liabilities. The Law Offices of Mickler & Mickler is the Debtor's counsel. GREGORY A. HALL: $170K Sale of Savannah Property to Whitefield OK'd ------------------------------------------------------------------- Judge Edward J. Coleman, III, of the U.S. Bankruptcy Court for the Southern District of Georgia authorized Gregory A. Hall's sale of the property located at 8510 Whitefield Avenue, Savannah, Georgia to Whitefield Oaks, LLC for $170,000. The sale is "where is, as is," free and clear of all liens. All proceeds will be payable to Wells Fargo Bank, N.A. The sale is contingent upon Wells Fargo receiving sum of $170,000 at closing, for a complete release of its lien. In the event that the sale does not conclude, Wells Fargo will retain its lien as fully secured. Except as otherwise specified, the liens of the Internal Revenue Service and the Georgia Department of Revenue will survive the sale as to the Debtor; the liens will attach to the Debtor's real and personal property until such liens are paid with the same validity and priority and to the same extent as they existed at the time the Debtor's bankruptcy petition was filed. Gregory A. Hall sought Chapter 11 protection (Bankr. S.D. Ga. Case No. 19-41638) on Nov. 15, 2019. The Debtor tapped J. Michael Hall, Esq., at Hall & Navarro, LLC, as counsel. GRIFFON CORP: Fitch Rates $150MM Unsec. Notes 'B+', Outlook Neg. ---------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B+'/'RR4' to Griffon Corporation's planned issuance of $150 million of senior unsecured notes, the proceeds of which will be used to repay a like amount of the company's existing senior unsecured notes. Fitch has also affirmed Griffon Corporation's Long-Term Issuer Default Rating at 'B+', senior secured credit facility at 'BB+'/'RR1' and senior unsecured notes at 'B+'/'RR4'. The Rating Outlook has been revised to Negative from Stable. KEY RATING DRIVERS Negative Outlook: The rating and Negative Outlook reflect Fitch's expectation for weaker results and credit metrics over the near term as a result of the coronavirus-related economic downturn. The Negative Outlook further considers the risk that the current downturn could be deeper or more protracted than what is assumed in Fitch's base case, and that financial leverage could remain above the rating sensitivity beyond fiscal 2021. Near-Term Sales Pressure: Fitch expects sales declines the consumer and professional products and home and building products segments in the second half of fiscal 2020 (ending in September), with a recovery beginning in fiscal 2021. The defense electronics business is expected to be relatively unaffected by the current downturn. Overall, Fitch expects Griffon's sales to be flat in fiscal 2020 before returning to a low single digit growth rate in fiscal 2021. Margin Compression: Griffon generates below-average margins relative to other diversified industrials and building products companies, reflecting competitive conditions within its markets and its significant exposure to the big box retail channel. Fitch expects EBITDA margins will narrow by around 140bps in fiscal 2020 from 9.5% in fiscal 2019, and recover over the course of 2021 and 2022. Fitch believes there is some additional upside to the company's margins over the next few years from savings related to the integration of recent acquisitions. Higher Financial Leverage: Financial leverage will increase over the medium term compared with Fitch's prior expectation, with debt/EBITDA projected to increase to around 6.0x at the end of fiscal 2020 from 5.3x at the end of fiscal 2019. Fitch expects debt/EBITDA to gradually improve to the mid-5.0x range in fiscal 2021 and to around 5.0x in fiscal 2022 driven by EBITDA margin growth and modest debt repayment from FCF. Acquisition activity is expected to be limited over the near term as the company integrates its recent acquisitions, with cash flow focused primarily on debt reduction. Limited FCF: Below average margins have resulted in limited FCF after dividends in recent years. Fitch estimates that elevated capex and growth in working capital will result in FCF of 0%-2% of revenues over the next two years. The bulk of this cash flow is expected to be used for debt repayment and occasional bolt-on acquisitions. Consumer and Building Products Focus: The ratings reflect Griffon's solid position within consumer and professional products (45% of fiscal 2019 sales) and home and building products (40% of sales), and niche position in advanced radar and communication systems (15% of sales). The company benefits from the diversity associated with selling into the residential and commercial construction and defense markets, though its results are most closely tied to the residential repair and remodeling market. Strengths and Concerns: Rating strengths include end-market diversity, strong positions in niche building products and defense markets, and moderate long-term growth potential. Rating concerns include limited pricing power, customer concentrations, weak free cash flow, elevated leverage and potential challenges in integrating recent acquisitions. DERIVATION SUMMARY With $2.2 billion in revenue, Griffon is smaller than other diversified building products companies such as Fortune Brands Home and Security (Long-Term IDR: BBB/Negative), Masco Corporation (BBB-/Positive) and USG Corporation (NR). However, Griffon has a solid market presence in its end markets of tools, outdoor décor, garage doors and defense electronics. The company's EBITDA margin of 9.5% in fiscal 2019 is well below its larger industry peers, reflecting competitive market conditions and its significant customer concentrations with big box retailers. The company also has higher financial leverage than these peers. No country-ceiling, parent/subsidiary or operating environment aspects affect the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer -- Sales are forecast to be flat in fiscal 2020, and grow at a 3%-4% rate in fiscal 2021 and 2022; -- EBITDA margins are expected to contract by 140bps to 8.1% in fiscal 2020 and recover in fiscal 2021 and 2022; -- Capex as a percent of revenues are assumed to range from 2% to3% annually; -- FCF tracks at 0%-2% of revenues, and is directed to debt repayment over the medium term; -- Debt/EBITDA increases from 5.3x at the end of fiscal 2019 to around 6.0x in fiscal 2020 before improving to the mid-5.0x range in fiscal 2021 and around 5.0x in fiscal 2022. Recovery Assumptions The recovery analysis assumes that Griffon would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. Griffon's going-concern EBITDA estimate of $168 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the valuation of the company. The going-concern EBITDA reflects a potential weakening of housing market as well as the potential for the loss of a significant customer, given that Griffon has large customer concentrations. An EV multiple of 6x is used to calculate a post-reorganization valuation and reflects a mid-cycle multiple. Transactions involving building products companies include a 10.3 multiple on the 2015 buyout of Lafarge and an 8.0x multiple on the 2015 buyout of Woodcraft Industries. In addition, Griffon is estimated to have paid around 7.4x EBITDA for ClosetMaid and 10x EBITDA for CornellCookson. The secured revolving credit facility is assumed to be fully drawn upon default. The credit facility and other secured loans are senior to the senior unsecured notes in the waterfall. The analysis results in 'RR1' for the secured revolver (fully drawn at $400 million), representing outstanding recovery prospects (91%-100%). The waterfall also indicates a 'RR4' for the senior unsecured notes, corresponding to average recovery prospects (31%-50%). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Maintenance of a more conservative financial posture leading to a reduction in debt/EBITDA to below the mid-4x range and FFO-adjusted leverage to below the mid-5x range on a sustained basis; -- An improvement in FCF margins to above 4%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A continued aggressive financial posture, with share repurchases in excess of FCF; -- Debt/EBITDA is sustained above the mid-5x range and FFO-adjusted leverage above the mid-6x range on a sustained basis; -- A FCF margin consistently below 2%. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Liquidity: As of March 31, 2020, Griffon had total liquidity of $264 million, consisting of $69 million of cash and $195 million in availability under its senior secured revolver, net of outstanding borrowings and letters of credit. As of Jan. 30, 2020, Griffon upsized its revolver to $400 million from $350 million and extended its maturity to March 22, 2025. Griffon's nearest maturity is $150 million of senior unsecured notes that mature in March 2022 and the revolver maturing in March 2025. The maturity of the revolver moves to Dec. 1, 2021 if the senior notes have not been fully repaid prior to that date with new debt maturing on or after June 23, 2025. Capital Structure: As of March 31, 2020, the company total debt was $1.2 billion, and was composed of $1 billion of senior unsecured notes, $184 million drawn under the company's senior secured revolver, and approximately $59 million of other secured debt (foreign term loans and capital leases). 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). Griffon Corporation - LT IDR B+; Affirmed - Senior unsecured; LT B+; New Rating - Senior unsecured; LT B+; Affirmed - Senior secured; LT BB+; Affirmed H.R.P. II: July 8 Hearing on Disclosure Statement ------------------------------------------------- James R. Ahler has ordered that the hearing to consider the approval of the Disclosure Statement filed by H.R.P. II LLC shall be held on the 8th day of July, 2020 at 1:30 P.M. The 24th day of June, 2020 is fixed as the last day for filing and serving written objections to the Disclosure Statement. About H.R.P. II LLC H.R.P. II LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ind. Case No. 17-21695) on June 15, 2017. At the time of the filing, the Debtor was estimated to have assets of less than $1 million and liabilities of less than $500,000. Judge James R. Ahler oversees the case. Fox Rothschild LLP is the Debtor's bankruptcy counsel. HARTSHORNE HOLDINGS: Committee Taps B. Riley as Financial Advisor ----------------------------------------------------------------- Hartshorne Holdings, LLC's official committee of unsecured creditors seeks approval from the U.S. Bankruptcy Court for the Western District of Kentucky to employ B. Riley FBR, Inc. as its financial advisor. The firm's services will include: (a) advising the committee on any potential or actual transaction in which a significant portion of the equity securities of Hartshorne Holdings and its affiliates or a significant portion of their businesses and assets are transferred to, disposed of, or combined with one or more corporations, partnerships or any other entity; (b) assisting the committee in analyzing any potential or proposed restructuring, reorganization, rescheduling, recapitalization, reduction, cancellation, elimination, retirement, refinancing, purchase, repurchase or a material modification or amendment of all or any material portion of Debtors' debt, preferred and common stock or hybrid securities; (c) evaluating and analyzing any debtor-in-possession or exit financing for Debtors as well as other potential financing alternatives; (d) advising the committee on any capital structure, debt capacity and feasibility issues in connection with any transaction; (e) analyzing transactions in connection with any fraudulent transfer analyses performed by the committee; (f) negotiating any restructuring proposals and alternatives and evaluating the impact on unsecured recoveries; (g) evaluating historical and projected financial information; (h) advising the committee on the current state of the restructuring and capital markets; and (i) providing valuation analyses and testimony. B. Riley will be compensated a monthly fee of $25,000. Adam Rosen, managing director at B. Riley, disclosed in court filings that he and his firm do not have connections with Debtors, creditors and other "parties in interest." The firm can be reached through: Adam M. Rosen B. Riley FBR, Inc. 11100 Santa Monica Blvd., Ste. 800 Los Angeles, CA 90025 Telephone: (310) 966-1444 Facsimile: (310) 966-1448 Email: arosen@brileyfbr.com About Hartshorne Holdings Hartshorne Holdings, LLC and affiliates are engaged in the production and sale of thermal coal through the operation of the Poplar Grove Mine, which is part of the Buck Creek Complex, located in the Illinois Coal Basin in Western Kentucky. The Buck Creek Complex includes two mines: (i) the operating Poplar Grove Mine, and (ii) the permitted, but not constructed, Cypress Mine. On Feb. 20, 2020, Hartshorne Holdings, LLC and three affiliates sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Lead Case No. 20-40133). Hartshorne Holdings was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Thomas H. Fulton is the case judge. Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Frost Brown Todd LLC as local counsel; FTI Consulting, Inc., as financial advisor; and Perella Weinberg Partners LP as investment banker. Stretto is the claims agent, maintaining the page https://cases.stretto.com/hartshorne The Office of the U.S. Trustee appointed a committee of unsecured creditors on March 10, 2020. The committee is represented by Dentons Bingham Greenebaum LLP and Whiteford Taylor Preston, LLP. B. Riley FBR, Inc. is the committee's financial advisor. HEARTS AND HANDS: June 30 Hearing on Disclosure Statement --------------------------------------------------------- A hearing on Disclosure Statement, Plan, Employment Application filed by Hearts and Hands of Care, Inc., will be on Tuesday, June 30, 2020 at 9:30 A.M. Alaska Standard Time. Response shall be made on Tuesday, June 23, 2020 and ballot deadline will be on Tuesday, June 23, 2020. The location of the hearing is in Herbert A. Ross Historic Courtroom, Old Federal Building, 605 w. 4th Avenue, Anchorage, Alaska. Terms of Plan Hearts and Hands of Care, Inc., submitted a First Amended Disclosure Statement explaining its Chapter 11 Plan. PPP Loan Proceeds. On May 18, 2020, the Debtor received approximately $1,233,755 in the form of a loan from the Small Business Administration’s Payroll Protection Program. The Debtor will file a motion and request that the Court retroactively approve this borrowing under Section 364. If the Court approves the borrowing and the loan is forgiven by the Small Business Administration, the effect of these loan proceeds would likely improve the Debtor’s financial performance to the benefit of creditors. Any improved performance would inure to the benefit of creditors under the Excess Cash payments provided for in Paragraph IV(C)(11)(B) of this Disclosure Statement. Class 3: Municipality of Anchorage Allowed Secured Claim. This class is impaired. Savion is a co-debtor to the Municipality of Anchorage for the amounts that give rise to any Class 3 Claim. The Municipality of Anchorage shall be enjoined from commencing or continuing any legal action or other proceeding against Savion unless and until the Bankruptcy Court finds and declares the Debtor to be in default with the terms of the Plan with respect to the treatment of the Class 3 Claim. Class 7: ACH Capital Allowed Secured Claim. Class 7 consists of the Allowed Secured Claim of ACH Capital. Given the senior priority of the West Town Bank Security Interest in the Debtor's personal property and the fact that the asserted West Town Bank Secured Claim, the amount of which the Debtor does not dispute, far exceeds the value of the Debtor's personal property, the Debtor proposes to allow the Class 7 Claim in the amount of $0 and the Holder of the Class 7 Claim will receive no distributions thereon. The Allowed Claim of ACH Capital, if any, will be included in Class 11, treated as a Class 11 Claim, and paid in full. Savion is a co-debtor to ACH Capital for the amounts that give rise to any Class 7 Claim. ACH Capital shall be enjoined from commencing or continuing any legal action or other proceeding against Savion unless and until the Bankruptcy Court finds and declares the Debtor to be in default with the terms of the Plan with respect to the treatment of the Class 7 Claim. Class 11: Allowed General Unsecured Claims. Each Holder of a Class 11 Claim shall be paid, in cash, in full, plus interest calculated at the Federal Judgment Rate in effect as of the Effective Date, in the following manner: a. Commencing on July 31, 2020, the Debtor will distribute $50,000 on a semi-annual basis to Holders of Class 11 Claims, on a Pro Rata basis until the earlier of 10 equal semi-annual principal payments of $50,000, commencing on July 31, 2020, and continuing semi-annually thereafter until the earlier of (i) January 31, 2026 and (ii) the date upon which all Class 11 Claims have been fully satisfied. b. In addition, beginning on Jan. 31, 2021, and continuing semi-annually on July 31 and Jan. 31 of each year thereafter (each, an "Excess Cash Distribution Date") until Holders of Class 11 claims are paid in full, the Debtor shall distribute its Excess Cash on a pro rata basis to the Holders of Class 11 Claim. For purposes of this section, "Excess Cash" will mean the Debtor's cash in excess of $300,000 on the last day of the month immediately preceding the Excess Cash Distribution Date (i.e., June 30th and December 31st). Equity interests in Class 12 will be retained by the holders. A full-text copy of the First Amended Disclosure Statement dated May 20, 2020, is available at https://tinyurl.com/yap3e9x3 from PacerMonitor.com at no charge. Attorneys for the Debtor: Thomas A. Buford Christine M. Tobin-Presser BUSH KORNFELD LLP 601 Union St., Suite 5000 Seattle, Washington 98101-2373 Tel: (206) 202-2100 Fax: (206) 202-2104 About Hearts and Hands of Care Hearts and Hands of Care, Inc., is a home and community-based waiver services agency which is certified for and provides waiver-funded services. HHOC provides both habilitative and non-habilitative services to support individuals with a variety of disabilities, as well as their families. The agency provides services to approximately 212 recipients. Hearts and Hands of Care sought Chapter 11 protection (Bankr. D. Alaska Case No. 19-00230) on July 22, 2019. In the petition signed by CEO Kisha Smaw, the Debtor was estimated to have assets of at least $50,000 and liabilities at $1 million to $10 million. Judge Gary Spraker oversees the case. HILLENBRAND INC: Fitch Rates $300MM Unsecured Notes 'BB+/RR4' ------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB+'/'RR4' to Hillenbrand, Inc.'s planned $300 million issue of senior unsecured notes, the proceeds from which will be used to repay existing debt. Fitch currently rates HI's Issuer Default Rating 'BB+', and senior unsecured notes, revolver and term loans at 'BB+'/'RR4'. The Rating Outlook is Negative. HI had $1.9 billion of debt outstanding as of March 31, 2020. KEY RATING DRIVERS Near-Term Weakness: The ratings take into account Fitch's expectation that HI's credit profile will improve to a level consistent with the 'BB+' rating by fiscal 2022, though the company's results over the near term will be weaker than previously expected. Organic sales and margins contracted in the second fiscal quarter below Fitch's expectations, and the effect of coronavirus is expected to be felt through the remainder of the year followed by a sales and margin recovery beginning in fiscal 2021. HI's leverage increased following the company's November 2019 acquisition of Milacron and has been exacerbated by the economic slowdown caused by the coronavirus pandemic. Negative Outlook: The Negative Outlook reflects heightened risk levels over this period, the potential for challenges in integrating Milacron given its size and recently weak operating results, and the risk of an extended downturn in plastic equipment markets. The ratings could be downgraded if financial results or leverage are slower to improve than anticipated. The Outlook could be revised to Stable if HI integrates Milacron effectively and the business enjoys a sustained recovery over 2021-2022. Higher Financial Leverage: HI's financial leverage is elevated, and Fitch projects gross debt/EBITDA in the high-4.0x range at fiscal YE 2020 compared with Fitch's prior expectation that leverage in the high-3.0x range. Fitch expects leverage to improve to the high-3.0x range in fiscal 2021 and to the high-2.0x range in fiscal 2022, assuming end markets begin to recover in fiscal 2021, the company captures synergies from the integration, and it dedicates FCF after dividends of $100 million-$200 million to debt reduction. HI has a track record of reducing leverage relatively quickly following acquisitions, and Fitch believes the company will refrain from additional acquisitions and share repurchases over the medium term. Stronger Presence in Plastics: HI acquired Milacron for $1.9 billion including assumed debt, financing the acquisition with a combination of debt and HI shares. The acquisition of Milacron will significantly enhance HI's presence in the plastics forming equipment sector given its strong position in downstream melt delivery and control systems, and injection molding and extrusion equipment, that complement HI's presence in compounding and extruding machines and material handling equipment. The transaction should be modestly accretive to margins, and HI expects to generate cost synergies of $50 million over three years. Higher Cyclicality: The acquisition increases HI's exposure to the cyclical plastics industry, which Fitch estimates will represent 63% of HI's sales pro forma for the acquisition, up from 42%, while reducing the proportion of its sales of caskets, which are noncyclical but in a gradual secular decline, to 20% from 31%. Integrating an acquisition of this size could present challenges, while a downturn in plastic equipment markets could slow the pace of deleveraging. Strengths and Concerns: The ratings incorporate HI's positive FCF, relatively conservative financial strategy, notwithstanding the recent acquisition, and broad customer and geographic base. Rating concerns include the company's modest scale in certain sectors, cyclical end markets, operating risks associated with diversifying into adjacent product markets and geographies, and declining industry trends at Batesville. Growth Potential at PEG: The ratings take into account the cyclicality and long-term growth potential within the Process Equipment Group. The segment serves a variety of end markets and has significant and growing exposure to the plastics segment. This segment has generated healthy growth since 2017, though Fitch assumes sales growth will turn negative in fiscal 2020. Declining Trends at Batesville: The Batesville segment serves the death-care industry and is contending with a long-term secular decline in the number of burials. The segment is addressing this market decline by restructuring its business, supporting EBITDA margins at or near 20% even as revenues decline at a gradual rate. Margins have been pressured by high fixed costs and customer incentives, though the segment generates strong FCF that has helped finance the growth of the PEG. DERIVATION SUMMARY HI is a diversified manufacturer that participates in a variety of end markets, each of which has a different set of competitors. The Timken Company (BBB-/Negative) and Kennametal Inc. (BBB/Negative) are other diversified manufacturers. Timken is moderately larger than HI, pro forma for the acquisition of Milacron, while Kennametal is smaller, and both generate EBITDA margins that are broadly in line with HI's industrial operations. HI's financial leverage is higher than that of Kennametal and Timken, which is also in a deleveraging mode following acquisitions. HI's Batesville segment serves the niche death-care market and is in a long-term secular decline, though it provides an element of stability to the company's results and a boost to its consolidated margins. No Country Ceiling, parent-subsidiary or operating environment aspects impact the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer -- The acquisition of Milacron and the sale of Cimcool are assumed to have taken place as of the beginning of the fiscal year; -- The effect of coronavirus is expected to be felt in the final three quarters of fiscal 2020, when organic sales and margins are expected to contract materially, followed by a sales and margin recovery in fiscal 2021; -- HI's revenues increase by 37% in fiscal 2020 due to the acquisition of Milacron, offsetting organic sales declines in all three segments; -- Sales grow by 2% in fiscal 2021 due to a recovery at Milacron, and low single-digit declines at the PEG and Batesville; -- The EBITDA margin narrows by around 200bps in fiscal 2020 and recovers by 150bps in fiscal 2021, with further improvement beyond 2021 due to expected synergies and operating leverage; -- FCF after dividends of $100 million-$200 million annually in fiscal 2020-2021, used primarily for debt reduction; -- Debt/EBITDA increases to the high-4.0x range at YE 2020, and then improves to the high-3.0x in fiscal 2021 and the high-2.0x range in fiscal 2022. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- HI achieves more scale and diversity within its industrial business offsetting ongoing declines at Batesville; -- Gross debt/EBITDA and FFO leverage improve to below 2.25x and 3.25x, respectively. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Gross debt/EBITDA and FFO leverage remaining above 2.75x and 3.75x, respectively; -- FCF margin below 4%-6%; -- A sustained decline in the EBITDA margin to below 15%; -- Deterioration in Batesville's revenue and cash flow. 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: Liquidity was adequate at March 31, 2020 and included $374 million of cash plus $160 million in borrowing capacity under HI's $900 million revolving credit facility maturing in August 2024. Liquidity is further supported by projected FCF after dividends of $100 million-$200 million annually. The nearest maturity is the $150 million of 5.5% notes due July 2020, which could be repaid with cash and revolver borrowings. The company had $1.9 billion of debt outstanding as of March 31, 2020, composed of $538 million drawn on the revolver, $620 million of senior unsecured notes, $222 million outstanding on a term due in 2022 and $492 million outstanding on a term loan due in 2024. All of the debt is senior unsecured and benefits from upstream guarantees by material domestic subsidiaries. HILLENBRAND INC: S&P Rates New $300MM Senior Unsecured Notes 'BB+' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' issue-level rating to U.S.-based industrial manufacturer Hillenbrand Inc.'s proposed $300 million senior unsecured notes due 2025. The '3' recovery rating on the proposed notes indicates S&P's expectations for meaningful (50%-70%, rounded estimate: 55%) recovery in the event of a payment default. Hillenbrand will issue the notes, and they will rank equally in right of payment with all of the company's existing unsecured debt. The subsidiaries that guarantee the obligations under the company's credit agreement will also guarantee the proposed notes. "We believe Hillenbrand will use the net proceeds from the issuance to repay the entire $150 million principal amount of its 5.5% senior notes due July 2020 and use the remaining proceeds to repay a portion of the outstanding borrowings under its revolving credit facility. We view the transaction as leverage neutral," S&P said. Pro forma for the proposed transaction, S&P's rounded recovery estimate on the company's existing senior unsecured debt declines to 55% from 60% in its prior analysis. The proposed notes issuance, combined with S&P's typical assumption of an 85% revolver drawdown at the point of hypothetical default, modestly reduces recovery prospects for unsecured debtholders. "All of our existing ratings on Hillenbrand and its debt, including our 'BB+' issuer credit rating, are unchanged. The negative outlook reflects the potential that we could lower our rating if Hillenbrand's end-market demand, particularly in the plastics market, deteriorates by more than we currently expect, pressuring its earnings and cash flow. Specifically, we could lower our rating on Hillenbrand if we expect its S&P Global Ratings-adjusted debt to EBITDA to remain above 4x over the next 12 months," the rating agency said. "We expect a moderate slowdown in order activity over the next several quarters, though we do not project a steep drop-off in demand. Under our base-case scenario, we forecast the effects of the recession will keep the company's S&P Global Ratings-adjusted leverage at 4x or more through the end of fiscal year 2020 (ending Sept. 30, 2020, pro forma for 12 months of Milacron Holdings Corp.'s EBITDA and adjusted for one-time transaction expenses) before it improves to the 3x-4x range in fiscal 2021. Hillenbrand recently amended its credit facilities to, among other items, temporarily increase its maximum net leverage ratio covenant, which should provide the company additional borrowing capacity under its revolving credit facility and support continued adequate liquidity," S&P said. HORIZON THERAPEUTICS: Moody's Hikes CFR to Ba2, Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded certain ratings of Horizon Therapeutics USA, Inc., a subsidiary of Horizon Therapeutics plc. Moody's upgraded Horizon's Corporate Family Rating to Ba2 from Ba3, the Probability of Default Rating to Ba2-PD from Ba3-PD, and the senior unsecured rating to Ba3 from B1. Moody's affirmed Horizon's Ba1 senior secured rating. In tandem with the upgrades, Moody's revised Horizon's outlook to stable from positive. There is no change to Horizon's SGL-1 Speculative Grade Liquidity Rating. The upgrade reflects improvement in Horizon's credit profile resulting from debt reduction and good uptake in Tepezza, the company's recently approved drug for thyroid eye disease. Horizon recently announced the redemption of $400 million of exchangeable notes, which are significantly in the money and likely to fully convert to equity. The conversion reduces pro forma gross debt/EBITDA to 2.8x from 3.9x for the 12 months ended March 31, 2020 using Moody's calculations. Ratings upgraded: Issuer: Horizon Therapeutics USA, Inc. Corporate Family Rating, to Ba2 from Ba3 Probability of Default Rating, to Ba2-PD from Ba3-PD Senior unsecured notes, to Ba3 (LGD5) from B1 (LGD4) Ratings affirmed: Issuer: Horizon Therapeutics USA, Inc. Senior secured bank credit facilities, at Ba1 (LGD2) Outlook actions: Issuer: Horizon Therapeutics USA, Inc. Revised to Stable from Positive RATINGS RATIONALE Horizon's Ba2 Corporate Family Rating reflects its niche position in the global pharmaceutical industry with annual revenue approaching $1.5 billion. Horizon's efficient operating structure and high profit margins will drive solid cash flow. Horizon's drugs for rare diseases have high price points, good growth opportunities, and generally high barriers to entry. Thyroid eye disease treatment Tepezza has high sales potential based on significant unmet medical need. Risk factors include declining trends in the inflammation segment, commercial execution risk for Tepezza, and unresolved legal exposures. Product concentration is somewhat high, with the top three drugs generating over half of sales. Financial leverage is modest, with pro forma debt/EBITDA of 2.8x using Moody's calculations, with significant cash on hand. Absent debt-financed acquisitions, solid growth in earnings driven largely by Tepezza and Krystexxa will drive further deleveraging. Social and governance considerations are material to the rating. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. 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. Beyond the coronavirus outbreak, Horizon faces exposure to regulatory and legislative efforts aimed at reducing drug prices. These are fueled in part by demographic and societal trends that are pressuring government budgets because of rising healthcare spending. Due to a niche focus in rare diseases, Horizon's products tend to carry very high gross prices. That being said, orphan drugs are somewhat less likely to be affected by drug pricing reform than traditional and specialty oral products that have very high spending within the Medicare Part D population. Among governance considerations, Horizon underwent substantial deleveraging transactions in 2019, repaying a material amount of debt with public equity offering proceeds and balance sheet cash, in order to align its financial leverage with companies in its defined biopharmaceutical peer group. Moody's viewed this favorably, but notes that the company's M&A strategy will still result in moderate financial leverage over time. Horizon's liquidity will remain strong, reflected in the SGL-1 Speculative Grade Liquidity Rating. This is due to high cash on hand, positive free cash flow, no financial maintenance covenants in the term loan and minimal debt amortization requirements. The Ba1 ratings on the senior secured term loan and revolver is one-notch lower than the rating output from Moody's Loss Given Default Methodology. This reflects Moody's view that Horizon's capital structure is subject to change based on a high likelihood of acquisitions. The rating outlook is stable, reflecting Moody's expectation for good uptake in Tepezza combined with adherence to the company's stated debt/EBITDA targets. These include gross debt/EBITDA of roughly 2.0x (on the company's basis), or 3.0x for an opportunistic acquisition, to be followed by deleveraging. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include: significant expansion in scale, improving product diversity, and resolution of the outstanding Department of Justice subpoena into marketing and commercialization practices. Specifically, debt/EBITDA sustained below 3.0x using Moody's definitions could support an upgrade. Factors that could lead to a downgrade include erosion in cash flow that may arise from declining volumes, significant pricing pressure, or generic competition for key products. Debt-financed acquisitions, or an escalation of legal risks could also pressure the ratings. Specifically, debt/EBITDA sustained above 4.0x using Moody's definitions could lead to a downgrade. Headquartered in Lake Forest, Illinois, Horizon Therapeutics USA, Inc., is an indirect wholly-owned subsidiary of Dublin, Ireland-based Horizon Therapeutics plc (collectively "Horizon"). Horizon is a publicly-traded pharmaceutical company focused on developing and commercializing innovative medicines that address unmet treatment needs for rare and rheumatic diseases. Annual net sales are approaching $1.5 billion. The principal methodology used in these ratings was Pharmaceutical Industry published in June 2017. HORNBECK OFFSHORE: June 19 Hearing on Plan & Disclosures -------------------------------------------------------- Judge David R. Jones has ordered that the combined hearing to consider, among other things, the adequacy of the Disclosure Statement and confirmation of the Plan filed by Hornbeck Offshore Services, Inc., et al., shall be held on June 19, 2020, at 11:30 a.m., prevailing Central Time. Any objections to adequacy of the Disclosure Statement and confirmation of the Plan shall be filed on or before June 10, 2020, at 4:00 p.m., prevailing Central Time. Any brief in support of confirmation of the Plan and reply to any objections shall be filed on or before June 17, 2020, at 4:00 p.m., prevailing Central Time. Ballots must be completed, executed, and returned to the Solicitation Agent on or before June 10, 2020. About Hornbeck Offshore Services Hornbeck Offshore Services, Inc., provides marine transportation services to exploration and production, oilfield service, offshore construction, and U.S. military customers. Hornbeck and its affiliates were incorporated in 1997 and are headquartered in Covington, Louisiana. On May 19, 2020, Hornbeck Offshore Services and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32679). The Hon. David R. Jones is the case judge. Hornbeck Offshore disclosed total assets of $2,691,806,000 and total liabilities of $1,493,912,000 as of Sept. 30, 2019. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; WINSTEAD PC as co-counsel; GUGGENHEIM SECURITIES, LLC as financial advisor; and PORTAGE POINT PARTNERS, LLC as restructuring advisor. STRETTO is the claims agent. HOWARD JOHNSON: Jezierski Buying 2007 Dodge Sprinter Van for $10K ----------------------------------------------------------------- Howard Johnson and American Berber, Inc., ask the U.S. Bankruptcy Court for the Northern District of Georgia to authorize the sale of Mr. Johnson's 2007 Dodge Sprinter Van with 95,000 miles, VIN VDOPE84587516855, to Sadie Jezierski for $10,000. Mr. Johnson is an individual who owns the Vehicle. The Buyer has made an offer to purchase the Vehicle. The Buyer is prepared to close by May 27, 2020. Mr. Johnson has spent considerable time and effort marketing the Vehicle to various potential buyers within its field. He believes that the transaction represents the highest and best offer available and that the Purchase Price represents the true value of the Vehicle. There are no security interests, liens, claims, encumbrances, or other interests in the Vehicle. Mr. Johnson desires to use the Sales Proceeds to make a capital contribution to Debtor American Berber. Mr. Johnson's use of the Sales Proceeds as a capital contribution to American Berber will sustain the value of both bankruptcy estates as Mr. Johnson's primary asset is majority, if not 100%, ownership of American Berber. The infusion of cash will ensure that Debtor American Berber is able to survive the impact of Covid-19. The Debtor asks authority to sell the Vehicle for the Purchase Price and disburse the Sales Proceeds. He asks that: (a) the Court waives any stay pursuant to Bankruptcy Rule 6004 or otherwise; and (b) any order approving the sale of the Vehicle and capital contribution be effective immediately upon entry of any order approving the sale of the Vehicle. Mr. Johnson asks the Court to waive the stay of the Order pursuant to Bankruptcy Rule 6004(h) or any rule of similar import and making the Order effective upon its entry. Howard Johnson sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 19-41149) on May 15, 2019. The Debtor tapped Cameron M. McCord, Esq., at Jones & Walden, LLC as counsel. IFS SECURITIES: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of IFS Securities, Inc. About IFS Securities IFS Securities, Inc., an Atlanta-based broker and dealer, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 20-65841) on April 24, 2020. At the time of filing, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. John D. Elrod, Esq., at Greenberg Traurig, LLP, is the Debtor's legal counsel. IGLESIA ROCA: Asks July 3 Extension to File Disclosures and Plan ---------------------------------------------------------------- Iglesia Roca de Sion, Inc., seeks an extension of 45 days, until July 3, 2020, of the deadline to file the disclosure statement and reorganization plan. On the last three months, the Debtor has been closed without bringing services to the parishioner due to the lockdown declared by the Government. For the said reason, it has been impossible to meet with the Officials of the corporation. Counsel for the Debtor: GERARDO L. SANTIAGO PUIG Doral Bank Plaza, Suite 801 33 RESOLUCIÓN ST. SAN JUAN, PR 00920 Tel: 787-777-8000 Fax: 787-767-7107 E-mail: gsantiagopuig@gmail.com About Iglesia Roca de Sion Iglesia Roca de Sion, Inc., filed a voluntary Chapter 11 petition (Bankr. D.P.R. Case No. 19-05990) on Oct. 29, 2019, listing under $1 million in both assets and liabilities, and is represented by Gerardo L. Santiago Puig, Esq., at Gerardo L. Santiago Puig Law Office. ILLUMINATE BUYER: Moody's Assigns B2 CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service has assigned first-time ratings to Illuminate Buyer, LLC (dba Lummus Technology), including a B2 Corporate Family Rating and a B2-PD Probability of Default Rating. Moody's has also assigned a B1 rating to the proposed $1.05 billion first lien senior secured term loan, $175 million senior secured revolving credit facility and Caa1 rating to the proposed $460 million senior unsecured notes. The proceeds from the term loan and notes in conjunction with $1.258 billion of equity will be used to fund the $2.725 billion purchase of Lummus Technology from McDermott International, Inc. to a joint partnership between The Chatterjee Group and Rhone Capital as well as transaction fees and expenses. The outlook is stable. The assigned ratings are subject to the transaction closing as proposed and receipt and review of the final documentation. "The assigned B2 rating reflects Lummus Technology's strong technology platform and business model with a healthy backlog offset by high initial leverage and the currently challenging economic environment for its two major end markets," said Domenick R. Fumai, Moody's Vice President and lead analyst for Illuminate Buyer, LLC. Assignments: Issuer: Illuminate Buyer, LLC Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Gtd. Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3) Gtd. Senior Secured 1st Lien Revolving Credit Facility, Assigned B1 (LGD3) Senior Unsecured Regular Bond/Debenture, Assigned Caa1(LGD5) (Co-issuer: Illuminate Holdings IV, Inc.) Outlook Actions: Issuer: Illuminate Buyer, LLC Outlook, Assigned Stable RATINGS RATIONALE The B2 CFR reflects Lummus Technology's strong technology platform that includes licensing and its position as a supplier of catalysts and equipment for the refining and petrochemical industries. Lummus Technology's rating also incorporates a robust contract backlog consisting of long-term relationships with a number of highly rated customers, which provides an extremely visible revenue stream and reduces EBITDA volatility during downturns. The rating also factors the company's strong market shares across all segments, high EBITDA margins compared to many comparably rated chemical companies and significant free cash flow generation due to the asset-light business model and value-added services it provides to customers. Moreover, the rating also considers a healthy product and geographic revenue mix with increasing exposure to faster growing regions. The B2 rating is tempered by Lummus Technology's high initial leverage, including standard adjustments, which Moody's estimates to be 6.7x (Debt/EBITDA) in FY 2020. The rating also factors the company's relatively small scale and lack of track record as a standalone entity, though this concern is partially offset by a strong management team with many members having extensive experience working at the company. Furthermore, notwithstanding the benefits of the long-term contracts, Lummus Technology faces a challenging economic environment for its two major end markets -- petrochemicals and refining -- in which it has already witnessed a significant drop in new contract awards as well as several contract deferrals in 2020 compared to historical performance. In addition, a significant portion of contract revenue is derived from long-term fixed-price contracts, which could be subject to future cost overruns. Moody's forecasts Debt/EBITDA of 6.7x in FY 2020, but that leverage will decline to 5.8x in FY 2021 as macroeconomic conditions improve and Lummus Technology is expected to apply a significant portion of free cash flow towards debt reduction beginning next year. Moody's expects Lummus Technology to generate at least $140 million in free cash flow in FY 2020 and approximately $130 million in FY 2021. Interest coverage (EBITDA/Interest Expense) is estimated to be 2.2x in FY 2020 and improve to 2.6x in FY 2022. The stable outlook reflects Moody's expectations that despite some weakness in FY 2020 due to the challenging environment in the refining and petrochemical industries as a result of the coronavirus pandemic, Lummus Technology's financial and operating performance will meet expectations and improve in 2021 as new contract awards and deferrals are realized in future years. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would likely consider a downgrade if leverage is sustained above 7.0x, the company faces operational challenges as an independent entity, or if the backlog experiences a high level of cancellations. Moody's could upgrade the ratings if financial leverage, including standard adjustments, is sustained below 5.5x, free cash flow-to-debt (FCF/Debt) is sustained above 15% and the company demonstrates a successful transition to a standalone entity. ESG CONSIDERATIONS Moody's also evaluates environmental, social and governance factors in the rating consideration. As a specialty chemicals company, environmental risks are characterized as moderate. Lummus Technology has not incurred any environmental reserves as of December 31, 2019. The company does not presently believe that environmental matters will have a material adverse effect on future results of operations, financial position, or cash flow and that they are in compliance with environmental laws and regulations. Governance risks are above-average due to the risks associated with private equity ownership, which include a limited number of independent directors on the board, reduced financial disclosure requirements as a private company and higher leverage compared to most public companies. However, Moody's believes that audited carve-out historical financials provide more detailed disclosure compared to other private companies. Moody's expects Lummus Technology to maintain good liquidity over the next 12 months with available cash on the balance sheet, strong free cash flow generation and access to the $175 million revolving credit facility which is anticipated to be undrawn at close. Lummus Technology's debt capital is comprised of a $1.05 billion first lien term loan due in 2027 and $460 million senior unsecured notes due 2028. The first lien term loan does not contain financial covenants. The company also maintains a $175 million first lien revolving credit facility due 2025. The Caa1 rating on the senior unsecured notes reflects the preponderance of first lien debt in the capital structure. The principal methodology used in these ratings was Chemical Industry published in March 2019. Illuminate Buyer, LLC Inc. (dba Lummus Technology) based in Houston, TX is a leading technology licensing, catalyst and equipment supplier for the refining and petrochemical industries. Lummus Technology has over 130 technologies and 3,400 patents with long-term customer relationships among the major global petrochemical and refining companies. Through the Chevron Lummus Global joint venture, the company has significant expertise in hydroprocessing technology. Lummus Technology also has strong market positions in the petrochemical and ethylene markets as well as in polypropylene licensing technology. In January 2020, a joint partnership between The Chatterjee Group and Rhone Capital signed a definitive agreement to acquire Lummus Technology, formerly of McDermott International, Inc., for $2.725 billion. Lummus Technology reported revenue of $594 million for the fiscal year ended December 31, 2019. INTERNATIONAL GAME: S&P Rates Senior Secured Notes 'BB' ------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to global lottery operator and gaming technology provider International Game Technology PLC's (IGT) announced senior secured notes and placed the issue-level rating on CreditWatch with negative implications. The company plans to use the proceeds from these notes for general corporate purposes, including paying down its revolver borrowings, funding the purchase of up to an aggregate of $300 million of the principal amount of its 6.25% senior secured notes due 2022, and providing incremental liquidity. All of S&P's ratings on IGT remain on CreditWatch, where it placed them with negative implications on March 17, 2020. Despite its forecast for a significant spike in IGT's leverage in 2020 because of the coronavirus pandemic, S&P left its issuer credit rating unchanged because it believes the company could improve its leverage below 5.5x in 2021. Under its revised base-case assumptions, S&P assumes IGT's leverage will spike in 2020 because its revenue and EBITDA will decline by roughly one-third. The enactment of nationwide emergency measures in Italy in March 2020, which curtailed nonessential commercial activity, imposed stay-at-home orders, and temporarily closed casinos, will impair IGT's operating performance in the second quarter, leading the company to burn cash. Nevertheless, IGT's leading positions in the lottery business in the U.S. and Italy will provide it with some level of revenue and cash flow generation in the second quarter. IGT is the largest lottery operating company globally and has leading market positions in Italy (more than 90% market share in terms of wagers) and the U.S. (more than 75% market share in terms of wagers). Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety IQVIA HOLDINGS: S&P Affirms 'BB+' ICR Amid Delays to Deleveraging ----------------------------------------------------------------- S&P Global Ratings affirmed its ratings on IQVIA Holdings Inc., including the 'BB+' issuer credit rating. The ratings affirmation on IQVIA reflects S&P's view of IQVIA's business as particularly strong relative to similarly rated peers. The business benefits from good scale (2019 revenues of $11.1 billion), good diversification between clinical trial support services (which benefit from a very strong backlog and strong market position), information services (which benefit from a high degree of recurring revenues and a dominant market position), and other offerings. The growing demand for the company's services support predictable and sustainable revenue growth. These strengths offset leverage levels that remain somewhat weak for the rating. The rating is also supported by relatively strong free cash flow generation and a ratio of free cash flow to debt above 7%, which is comfortably within the range for the rating. Finally, S&P continues to expect deleveraging to below 5x in 2021, despite leverage remaining marginally above 5x for the past few years, as the financial sponsor TPG's stake in the business continues to shrink to negligible levels. S&P sees limited cushion in the rating for further erosion of credit measures or financial policy. S&P expects a material but temporary delay in deleveraging stemming from the COVID-19 pandemic. IQVIA is experiencing a significant business disruption from social distancing measures and healthcare providers' focus on treating COVID-19 patients. About 80% of IQVIA's global clinical trial sites are inaccessible, leading to delays in the start of many clinical trial although most trials already underway are still ongoing with remote monitoring. S&P is revising its 2020 adjusted-EBITDA expectation lower to $2 billion-$2.1 billion and its 2020 debt-to-EBITDA expectation to about 5.5x. S&P views this weakness as temporary and believes there is significant pent-up demand for clinical trial services (the company's Research & Development Solutions segment has a $20 billion backlog and does not expect COVID-related cancellations). The rating agency is still expecting adjusted debt to EBITDA of below 5x in 2021 and adjusted funds from operations (FFO) to debt of 12%-15% in both 2020 and 2021. IQVIA is maintaining staffing levels and will therefore have an adequate level of fully trained staff to meet the high demand expected in 2021. The company's suspension of share repurchases during this period of operational uncertainty is supportive of S&P's assessment of the company's financial policy. The company benefits from steady demand for pharmaceutical prescribing data and clinical trial services. S&P thinks the technology and analytics (T&A) solutions (about 40% of 2019 revenue) market is growing at a steady low-single-digit-percent rate based on the high reliance on this data by pharmaceutical manufacturers to manage their product portfolios and measure their salesforces. S&P believes the research and development solutions (about 52% of 2019 revenue) market is growing faster, in the high-single-digit percents, supporting a mid-single-digit-percent organic revenue growth overall for IQVIA in a normal operating environment. The competitive contract research organization (CRO) environment and low growth of technology and analytic solutions has led to increased investment. IQVIA's R&D segment has grown at a 6.5% compound annual growth rate (CAGR) over the past two years, roughly in line with the overall CRO industry growth. The company is investing heavily in its "next-gen core-powered clinical trial" offering, to accelerate growth, and as a result EBITDA margins were flat in 2019. In addition, the company made $300 million and $500 million of acquisitions in 2018 and 2019, respectively, primarily to supplement its T&A solutions products. Share repurchases and acquisitions have delayed deleveraging. IQVIA has cited a 4x-4.5x adjusted leverage target (which translates to S&P adjusted leverage of 4.5x-5x), but has executed over $5.3 billion of share repurchases, made $1.8 billion of acquisitions, and issued about $5.2 billion of incremental debt since 2017. As a result, adjusted leverage has remained higher than expected, but is slowly declining helped by EBITDA growth. S&P believes IQVIA's pace of share repurchases should moderate below free cash flow in 2021 because its former financial sponsors have nearly exited their ownership position (the company has made large repurchases in concert with secondary offerings from the former financial sponsors). Leverage is high but free cash flow to debt is supportive of the rating. S&P believes IQVIA's aggressive growth strategy and shareholder-friendly financial policy will result in debt leverage generally remaining in the high-4x to low-5x range, and the ratio of free cash flow to debt in 2021 and 2022 will be in the 8% area supported by roughly $1 billion of annual free cash flow expected in 2019 and 2020. The stable outlook on IQVIA Holdings Inc. reflects S&P's expectations for adjusted debt leverage to generally remain about 5x or lower and for the ratio of free cash flow to debt to remain above 8%. S&P expects IQVIA to maintain its leadership positions in both its analytics and R&D segments and volatile results from its integrated engagement services. The outlook reflects slightly improving margins from ongoing synergies and operating leverage as the business grows, once the business returns to a normal operating environment in 2021. "We believe IQVIA is closer to a lower rating than a higher rating, as leverage metrics, above 5x, have been weak for the rating for an extended period of time. This is partially offset by free cash flow measures that are consistent with the rating. We could lower our rating on IQVIA if we believe leverage will remain materially above 5x, or if the ratio of free cash flow to debt declines below 7%. Alternatively, we could lower the rating if we view a further erosion in the company's financial policy, including increased spending on share repurchases or M&A," S&P said. "We could raise the rating if IQVIA lowers its long-term leverage target range, and we are confident that adjusted leverage will generally remain in the 3x-4x range over the long term. We believe this is unlikely in the next year," the rating agency said. IQVIA INC: Moody's Rates New Senior Unsecured Notes 'Ba3' --------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed senior unsecured notes of IQVIA Inc. There are no changes to IQVIA's existing ratings, including the Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, and SGL-1 Speculative Grade Liquidity Rating. The outlook is stable. Use of proceeds from the notes offering will include refinancing existing unsecured notes and a partial repayment of revolver borrowings. Rating assigned: IQVIA Inc. Senior unsecured notes due 2028 at Ba3 (LGD5) RATINGS RATIONALE IQVIA's Ba2 Corporate Family Rating reflects the company's considerable size, scale, and strong market positions as both a pharmaceutical contract research organization and healthcare data and analytics provider. The ratings are constrained by Moody's view that financial leverage will remain high over the next year. Debt/EBITDA was approximately 5.4x as of March 31, 2020. Moody's expects debt/EBITDA to remain high throughout 2020 due to trial delays and disruptions driven by the coronavirus pandemic. Moody's believes credit metrics will begin to improve late in 2020 and that EBITDA will return to growth due to strong underlying demand in IQVIA's CRO and technology & analytics business. The ratings are also supported by the company's good operating cash flow and very good liquidity. ESG considerations are material to the rating. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. 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. IQVIA will be negatively affected by delays and disruptions in certain clinical trials due to the effects of the coronavirus outbreak. Beyond the outbreak, ESG considerations include IQVIA's aggressive financial policy, a key governance risk. IQVIA has maintained high financial leverage, primarily through debt-funding share repurchases. Moody's anticipates that the pace of share repurchases and acquisitions will moderate compared to prior years, and that leverage will decline modestly over the next few years. The stable outlook reflects Moody's expectation that over the next 12-18 months, IQVIA's EBITDA growth will be hampered by the coronavirus pandemic. It also assumes that IQVIA will refrain from aggressive capital uses such as share repurchases and M&A until its leverage improves. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade IQVIA's ratings if it believes debt/EBITDA will be sustained above 5.0x. Significant debt-funded share repurchases or acquisitions could also result in a downgrade. Moody's could upgrade the ratings if the rating agency expects the company to maintain debt to EBITDA below 4.0x, while demonstrating consistent revenue growth and favorable profit margins. IQVIA is a leading global provider of outsourced contract research and contract sales services to pharmaceutical, biotechnology and medical device companies. The company is also a leading provider of sales and other market intelligence primarily to the pharmaceutical and biotech industries. Reported revenue for the twelve months ended March 31, 2020 were $11.2 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. JAN THOMAS: Hearing on $450K Dewey Beach Property Sale Abated ------------------------------------------------------------- Judge Cynthia C. Jackson of the U.S. Bankruptcy Court for the Middle District of Florida abated the consideration of Jan Thomas' emergency sale of the real property located at 202 Jersey Street, Dewey Beach, Delaware to Marcia Schieck for $450,000, free and clear of liens. The Court determined that a specific description of the property encumbered by the lien, including legal description of real property or VIN of vehicle, is not included. Consideration of the motion is abated until the deficiency is corrected. The Clerk's Office is directed to serve a copy of the Order on interested parties. Jan Thomas sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 20-00136) on Jan. 16, 2020. The Debtor tapped Undine George, Esq., as counsel. JASON INC: S&P Downgrades ICR to 'D' on Bankruptcy Proceedings -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based industrial products manufacturer Jason Inc. to 'D' from 'SD' (selective default). The downgrade follows Jason's announcement that it has entered into a restructuring support agreement with a group of lenders holding more than 75% of its outstanding first-lien debt. The company intends to file voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Under the restructuring plan, Jason expects to eliminate around $250 million of debt by exchanging its senior secured first-lien debt for a pro rata share of a new $75 million first-lien credit facility, a $50 million junior convertible term loan, and 90% of the new equity (subject to dilution by the new warrants, the management incentive plan, and the junior convertible term loan). If its second-lien lenders accept the plan, it will also exchange the second-lien loan for a pro rata share of 10% of the new equity (subject to dilution by the new warrants, the management incentive plan, and the junior convertible term loan) and new warrants for 10% of the new equity (subject to dilution by the management incentive plan and the junior convertible term loan). S&P expects the company to continue to operate during the restructuring process and the proposed plan does not consider an impairment of general unsecured trade creditors. Following consummation of the reorganization transaction, it will evaluate Jason's new capital structure. JOSEPH MARTIN THOMAS: Charltons Buying Erie Property for $287K -------------------------------------------------------------- Joseph Martin Thomas asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to authorize the sale of the real estate located at 9830 Wattsburg Road, Erie, Pennsylvania, situate in the Township of Greene, County of Erie, and Commonwealth of Pennsylvania, to Thomas Charlton and Samantha Charlton for $287,000. The Debtor, is an individual with a place of business located at Tri-State Pain Institute, 2374 Village Common Drive, Erie, Pennsylvania. These named Respondents either appear to have liens on the real property which is the subject of the sale, or alternatively, are named as the Respondents for the purpose of notifying them that a sale of the subject property, to which they may have some claim, is being proposed: (a) Tax Collector, Township of Greene, is a taxing authority with a mailing address of 8628 Wattsburg Road, Erie, Pennsylvania 16509. The Tax Collector is being named as a Respondent in regard to the real estate taxes that will be due on the subject property in regard to the year 2020. (b) Charles R. Burger and Margaret J. Burger, husband and wife, are adult individuals residing at 9890 Wattsburg Road, Erie, Pennsylvania 16509. They are being named as the Respondents because they are the holders of a Mortgage on the subject property dated March 21, 1994 and recorded on March 22, 1994 in Erie County Record Book 324, Page 2382 in the face amount of $28,997. It is believed that the Mortgage has been paid in full; however, the satisfaction piece filed in the records of the Office of the Recorder of Deeds for Erie County, Pennsylvania references Joseph R. Thomas, rather than Joseph M. Thomas. (c) PNC Bank, National Association is a banking institution with a place of business located at 2730 Liberty Avenue, Pittsburgh, Pennsylvania 15222. It is being named as a Respondent because it is the holder of a Mortgage on the subject property dated Jan. 13, 2009 and recorded on January 26, 2009 in Erie County Record Book 1540, Page 1771 in the face amount of $75,000. It is believed that the payoff on the Mortgage is approximately $65,219. (d) Northwest Savings Bank, now Northwest Bank is a banking institution with a place of business located at 100 Liberty Street, Drawer 128, Warren, Pennsylvania 16365-0128. It is being named as a Respondent because it is the holder of a Mortgage on the subject property dated Feb. 23, 2012 and recorded on Feb. 24, 2012 at Erie County Instrument No. 2012-004769 in the face amount of $2.2 million. It is believed that the Mortgage has been paid in full; however, it appears to remain unsatisfied in the records of the Office of the Recorder of Deeds for Erie County, Pennsylvania, and based upon information and belief satisfaction pieces will be forthcoming. (e) The Respondent, Wells Fargo Bank, National Association, is a banking institution with a place of business located at 4101 Wiseman Blvd., Building 307, San Antonio, Texas 78251. It is being named as a Respondent because it is the holder of a Mortgage on the subject property dated Dec. 22, 2016 and recorded on Dec.22, 2016 at Erie County Instrument No. 2016-027941 in the face amount of $1,208,000. Wells Fargo Bank, National Association, is also a party to an Assignment of Rents dated Dec. 22, 2016 and recorded on Dec. 22, 2016 at Erie County Instrument No. 2016-027944. It is believed that the payoff on the Mortgage is approximately $569,602. Wells Fargo Bank, National Association is represented by Salene Mazure Kraemer, Esquire, Bernstein-Burkley PC, 707 Grant Street, Suite 2200, Gulf Tower, Pittsburgh, Pennsylvania 15219. (f) The United States of America, Internal Revenue Service is an agency of the United States Government. It is being named as a Respondent as it is the following Federal Tax Liens have been entered in the Court of Common Pleas of Erie County, Pennsylvania: (i) Federal Tax Lien entered on June 15, 2018 at Case No. 30954-2018 in the amount of $255,140; and (ii) Federal Tax Lien entered on July 9, 2018 at Case No. 31126-2018 in the amount of $187,571. The Debtor has been making payments on the tax obligations that are included in the referenced tax liens and it is believed that the current balance due on these tax liens is approximately $460,560. (g) The Respondent, Commonwealth of Pennsylvania, Dept. of Revenue, is a governmental agency. It is being named as a Respondent because the following liens have been entered in the Court of Common Pleas of Erie County, Pennsylvania: (i) Tax Lien entered on Dec. 10, 2018 at Case No. 32118-2018 in the amount of $38,194; and (ii) Tax Lien entered on Feb. 4, 2019 at Case No. 30321-2019 in the amount of $20,512. (h) The Respondents, Thomas Charlton and Samantha Charlton, have a mailing address of 2936 West 15th Street, Erie, Pennsylvania 16505 and are being named as a Respondents because they are the prospective purchaser of the subject property. The Debtor holds such title to the Estate as the Bankruptcy Code confers upon him. The Estate consists, in part, of the following: The real estate located at 9830 Wattsburg Road, Erie, Pennsylvania 16509 situate in the Township of Greene, County of Erie, and Commonwealth of Pennsylvania, acquired by Deed James G. Kuhn, widower and un-remarried, dated Aug. 7, 1992 and recorded on Aug. 10, 1992 in Erie County Record Book 225, Page 1237, as well as a Deed from Charles R. Burger and Margaret J. Burger, husband and wife, dated March 18, 1994 and recorded March 22, 1994 in Erie County Record Book 324, Page 2379. An additional Deed dated March 21, 1994 was recorded on April 5, 1994 in Erie County Record Book 327, Page 1765 to confirm the prior transfers and create one parcel of real estate. Based upon market comparables, and consistent with the listing price for the property, it is believed and therefore averred that the fair market value of the property is approximately $299,900. The Debtor has secured an offer for the subject property from the Buyers in the amount of $287,000. The parties have executed their Agreement for the Sale of Real Estate. The real property proposed to be sold either appears to be validly encumbered by the liens identified at Exhibit K, or alternatively, the Respondents identified at Exhibit K are being notified of the proposed sale in order to divest and transfer any potential lien or claim they may have to the subject property. The Debtor believes that the offer of $287,000 for the real property is fair and should be accepted. He proposes that the encumbrances and other claims identified at Exhibit K, to the extent that they validly encumber the subject property, be divested and transferred to the proceeds of sale. The Debtor also proposes that the funds created by the sale be subject to the prior payment of all administrative costs and expenses allowed by the Court, including, but not limited to the filing fee for the Motion to Sell Property of the Estate Free and Clear of Liens in the amount of $181, as well as the actual out-of-pocket costs for advertising in both the Erie Times News and the Erie County Legal Journal. The Debtor also proposes payment of all usual and ordinary costs of sale, including, but not limited to: a) Payment of no more than $1,500 in fees to be paid to the closing agent who represents the Debtor at the time of the real estate closing; b) Any and all municipal fees, as well as any and all water and sewer charges, if applicable; c) Payment of any and all delinquent real estate taxes; d) Current real estate taxes, pro-rated to the date of closing; e) Transfer Taxes will be paid in accordance with the terms of the Agreement for Sale attached to the Motion for Private Sale of Real Property Free and Divested of Liens. The Debtor is to pay one-half of the transfer taxes due and owing, which equals 1% of the purchase price or $2,870. f) Payment of the Court approved realtor commission of 6% in the amount of $17,220; g) In accordance with the terms of the Agreement for Sale, the Debtor is responsible for the provision of a Coldwell Banker Home Warranty at a cost of $495; h) In accordance with the terms of the Agreement for Sale, on May 31, 2020, the Debtor was responsible for payment of all costs associated with hooking up to the public sewer system, estimated to be approximately $10,000; and i) Payment in full of the first mortgage lien on the real estate located at 9830 Wattsburg Road, Erie, Pennsylvania 16509 in favor of PNC Bank, National Association, in the approximate principal amount of $65,219, plus interest and satisfaction costs. The net proceeds from the sale, after payment of the first Mortgage, broker's commission, attorneys' fees, and the usual and ordinary costs of sale outlined will be paid as follows: a) The sum of $17,220 (6% of the sale price) from the net proceeds will be paid to the Debtor's counsel, Michael P. Kruszewski, Esquire and the Quinn Law Firm on account of anticipated, necessary costs and expenses of the administration of the Bankruptcy Estate, subject to approval by further Order of the Court. Said sum will be held by the Debtor's counsel in trust until such costs and expenses are approved by the Court. b) The remaining net proceeds will be payable towards the second mortgage lien on the real estate located at 9830 Wattsburg Road, Erie, Pennsylvania in favor of Wells Fargo Bank, National Association, with an approximate principal balance due of $569,603, plus interest and satisfaction costs. A copy of the Agreement is available at https://tinyurl.com/yanvhs9a from PacerMonitor.com free of charge. A hearing on the Motion is set for June 18, 2020 at 11:30 a.m. The objection deadline is June 5, 2020. Joseph Martin Thomas sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 20-10334) on May 6, 2020. The Debtor tapped Michael P. Kruszewski, Esq., at The Quinn Law Firm, as counsel. JUST FOR YOU: Unsecureds Will be Paid in Full Under Plan -------------------------------------------------------- Just For You Coach, Inc., submitted a Fourth Amended Chapter 11 Plan of Reorganization that proposes to treat claims and interests as follows: * Class 1 Secured Claims: -- Class 1(a) shall consist of the Allowed Secured Claim No. 3 of Bank Independent, in the amount of $64,031.34. The Debtor seeks to reduce the interest rate on this claim from 5.99% to 5.25%, per annum. Class 1(a) shall be amortized over 60 months and shall accrue interest at 5.25%. Class 1(a) shall be paid per month in equal monthly installments commencing 60 days after the Effective Date of the Plan. Such payments shall be $1,215.70, per month until paid. -- Class 1(b) will consist of the Allowed Secured Claim No. 4 of Bank Independent, in the amount of $28,529. The Debtor seeks to reduce the interest rate on this claim from 7.50% to 5.25%, per annum. Class 1(b) shall be amortized over 60 months and shall accrue interest at 5.25%. Class 1(b) shall be paid in equal monthly installments commencing 60 days after the Effective Date of the Plan. Such payments will be $541.65, per month until paid. -- Class 1(c) will consist of the Allowed Secured Claim No. 5 of Bank Independent, in the amount of $11,803. The Debtor seeks to reduce the interest rate on this claim from 7.50% to 5.25%, per annum. Class 1(c) shall be amortized over 60 months and will accrue interest at 5.25%. Class 1(c) will be paid in equal monthly installments commencing sixty (60) days after the Effective Date of the Plan. Such payments will be $224.10, per month until paid. * Class 2 Allowed Unsecured Claims. The Allowed Unsecured Claims of the unsecured creditors will be paid from 50 percent of the Net Plan Profits of the Debtor for three years or until paid in full. However, if unsecured debts are not paid in full by the end of year three, any remaining balance will balloon at the end of year four and be due and payable by the Debtor on or before March 30. 2023. Based upon this treatment, allowed unsecured claims will be paid in full under the Plan. * Class 3 Equity Interest Holders. Class 3 will consist of the equity position of Dwight Conway in the Debtor. Mr. Conway, or his assigns, will receive no equity distribution (other than salary) unless and until Class 2 is paid in full. A full-text copy of the Fourth Amended Chapter 11 Plan of Reorganization dated May 20, 2020, is available at https://tinyurl.com/yctwtwec from PacerMonitor.com at no charge. Attorney for the Debtor: Stuart M. Maples MAPLES LAW FIRM, PC 200 Clinton Avenue West, Suite 1000 Huntsville, Alabama 35801 Tel: (256) 489-9779 Fax: (256) 489-9720 E-mail: smaples@mapleslawfirmpc.com About Just For You Coach Just For You Coach, Inc., operates a commercial charter bus company. The company is owned by Dwight Conway. Just For You Coach sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No. 19-81116) on April 11, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $500,000 and liabilities of less than $1 million. The case is assigned to Judge Clifton R. Jessup Jr. Maples Law Firm, PC, is the Debtor's counsel. KEYSTONE PIZZA: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee on June 9, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Keystone Pizza Partners, LLC. About Keystone Pizza Partners Keystone Pizza Partners, LLC, a pizza franchisee in Overland Park, Kansas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 20-20709) on May 3, 2020. At the time of the filing, Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Robert D. Berger oversees the case. The Debtor is represented by Spencer Fane, LLP. KIM DOLLEH: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Kim Dolleh Center LLC. About Kim Dolleh Center Kim Dolleh Center LLC, a company based in Alpharetta, Ga., filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 20-66085) on May 4, 2020. In the petition signed by Kim Summers-Dolleh, managing member, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Ian Falcone, Esq., of Falcone Law Firm, is Debtor's bankruptcy counsel. KLAUSNER LUMBER TWO: Case Summary & 29 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Klausner Lumber Two LLC 260 Piper Lane Enfield, NC 27823 Business Description: Klausner Lumber Two LLC is a sawmill company in Enfield, North Carolina. Chapter 11 Petition Date: June 10, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-11518 Debtor's General Bankruptcy Counsel: WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP Debtor's Local Bankruptcy Counsel: Daniel B. Butz, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 N. Market Street, #1600 Wilmington, DE 19801 Tel: 302-351-9348 Email: DButz@MNAT.com Debtor's Restructuring Advisor: ASGAARD CAPITAL LLC Debtor's Investment Banker: CYPRESS HOLDINGS LLC Estimated Assets: $10 million to $50 million Estimated Liabilities: $100 million to $500 million The petition was signed by Robert Prusak, chief restructuring officer. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/DRhDok List of Debtor's 29 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Piedmont Natural Gas Trade Debt $3,616,234 PO Box 660920 Dallas, TX 75266-0920 Thomas E. Skains, CEO Tel: 800-752-7504 Email: gasservices@piedmontng.com 2. KHT Klausner Holz Trade Debt $1,883,495 Thuringen GmbHAm Neugrund 39 Kiefersfelden DE 83088 Michael Almberger, Geschaftsfuhrung Tel: +43-5352-602-0 Email: michael.almberger@klausner-group.com 3. Klausner Trading Trade Debt $1,120,560 International GmbH Bahnhofstraße 13 Oberndorf in Tirol T AT 6372 Michael Almberger Geschaftsfuhrung Tel: +43-5352-602-0 Email: michael.almberger@klausner-group.com 4. MAHILD Drying Trade Debt $887,159 Technologies GmbH Meisenweg 1 Nurtingen DE 72622 Tel: 49-7022-66926 Email: info@mahild.com 5. Greenline CDF Trade Debt $392,718 Subfund XXXIV LLC 1324 15th Street Denver, CO 80202 Patrick Vahey, President Tel: (303) 586-8000 Email: patrick.vahey@greenlineventures.com 6. VSC Fire & Security Inc. Trade Debt $313,038 10343-B Kings Acres Road Ashland, VA 23005 Tel: 804-459-2200 Email: contact@fireprotectionrichmond.com 7. Elektro Fisher USA, LP Trade Debt $285,573 1900 International Park Drive Birmingham, AL 35243 Tel: 713-325-9117 281-753-6072 Company file number in AL: 1620330 8. Wells Fargo Equipment Trade Debt $160,531 Finance, Inc. 733 Marquette Avenue Suite 700 Minneapolis, MN 55402 Patrick Vahey, President Jim Heron SVP, Head of Wells Fargo Middle Market Vendor Financial Tel: 303-586-8000 800-869-3557 Email: patrick.vahey@greenlineventures.com jim.heron@wellsfargo.com 9. K&L Gates, LLP Legal $122,058 200 South Biscayne Boulevard Services Suite 3900 Miami, FL 33131 James Segerhahl Managing Partner Tel: 305-539-3300 Email: james-r-segerdahl@klgates.com 10. Kuehne & Nagel Trade Debt $113,736 PO Box 7247, Lockbox 7992 Philadelphia, PA 19170 Markus Blanka-Graff, CFO Tel: 610-616-4831 11. Klausner Holz Trade Debt $108,720 Sachsen GmbH Am Neugrund 39 Kiefersfelden DE 83088 Michael Almberger, Geschaftsfuhrung Tel: +43 5352 602 0 Email: michael.almberger@klausner-group.com 12. Harry House Trade Debt $106,580 Security Services PO Box 1269 Roanoke Rapids, NC 27870 Harry Allen House III Tel: 252-535-2403 13. Halifax Electric Trade Debt $103,464 Membership Corp. c/o H. Lawrence Armstrong, Jr. Armstrong Law, PLLC 119 Whitfield Street P.O. Box 187 Enfield, NC 27823 Lawrence Armstrong Jr. Esq. Tel: 252-445-5656 Email: dla@hlalaw.net 14. Gregory Poole Trade Debt $98,352 Equipment Company 4807 Beryl Road Charlotte, NC 27606 Kathy Morris, CFO Tel: 919-890-4393 919-828-0641 Email: Kmorris@gregorypoole.com 15. Greenline CDF Trade Debt $98,179 Subfund XXIX LLC 1324 15th Street Denver, CO 80202 Patrick Vahey, President Tel: (303) 586-8000 Email: patrick.vahey@greenlineventures.com 16. UHC Premium Trade Debt $90,080 Billing United Healthcare PO Box 94017 Palatine, IL 60094-4017 Tom Roos, Chief Accounting Officer Tel: 952-992-7777 Email: Tom_Roos@unitedhealthgroup.com 17. LSAB Produktion AB Trade Debt $69,774 Repslagaregatan 21 Lahom SE 312 32 Asa Wall, CFO Hans Ekholm, CEO Tel: 0225-713028 Email: asa.wall@lsab.se hans.ekholm@lsab.se 18. 360 Forest Products Inc. Trade Debt $68,618 PO Box 157 Wallace, NC 28466 Larry C Batchelor, buyer Tel: 910-285-5838 Email: lbatchelor@360forestproducts.com webuytimber@360forestproducts.com 19. R & R Beth GmBH Trade Debt $67,450 Gewerbegebiet Unterlemitz 7 Bad Lobenstein DE 07356 Tel: 49-36651-3950-0 Tel: US 770-274-2415 Email: info@rr-beth.com officeusa@rr-beth.com 20. D & T Process Optmization Trade Debt $66,465 2987 Stallings Road Valdosta, GA 31605 Tel: 229-251-8140 https://dtoptimization.com 21. Rayen Intec GmBH Trade Debt $47,934 Am Hohen Ufer 4 Saalfed DE 07318 Tel: 49-3671-5365-0 Email: info@rayen-intec.de 22. Southeast Industrial Trade Debt $45,933 Equipment Inc. 12200 Steele Creek Road Charlotte, NC 28273 Robert Dunlap, CFO Tel: 704-399-9700 Email: robert.dunlap@sielift 23. Sunbelt Rentals, Inc. Trade Debt $37,613 2341 Deerfield Drive Fort Mill, SC 29715 Rod Samples, CFO Tel: 803-228-6464 Email: rsamples@sunbeltrentals.com 24. TKM GmBH Trade Debt $32,654 In der Fleute 18 Remscheid DE 42897 Tel: 49-2191-969-318 Email: info@tkmgrou 25. HReady Trade Debt $29,614 c/o Natine Rasteli, CEO 9871 SW 66th Street Miami, FL 33173 Nadine Rasteli, CEO Email: nadine@hreadynow.com 26. AA Electric S.E. Inc. Trade Debt $28,282 2011 S Combee Road Lakeland, FL 33801-0000 Greg Peterson, VP Operations Tel: 800-237-8274 863-665-6941 Email: greg.peterson@a-aelectric.com 27. Ohana Tree Holdings Trade Debt $28,049 5702 Plank Road Dillwyn, Virginia 23936 Tel: 434-391-4955 Email: Jlynch-va@yahoo.com 28. REA Elektronik Inc. Trade Debt $22,044 7307 Young Drive, Suite B Bedford OH 44146-0000 Ray Turchi, President Tel: 440-323-0555 Email: ray_turchi@rea-jet.com 29. MSC Industrial Supply Trade Debt $21,216 525 Harbour Place Drive Davidson, NC 28036 Erik Gershwind, President and CEO Tel: 800-645-7270 Email: gershwinde@mscdirect.com KMCO LLC: Court Approves Sale to Altivia ---------------------------------------- Erin Douglas of the Houston Chronicles reports that chemical plant owner KMCO LLC was acquired by Altivia Petrochemicals in a bankruptcy sale. ALTIVIA Petrochemicals acquired KMCO's assets for $25,000, plus an additional $623,000 in property taxes and assumption of millions of dollars in liabilities to KMCO's creditors, according to court filings. The sale was approved by the bankruptcy court. About KMCO LLC KMCO LLC manufactures toll chemical processors and specialty chemicals. It offers variety of products and services like cement grinding aids, oil-field chemicals, anti custom chemical manufacturing, antifreeze, oil-field chemicals, brake fluids, and cement grinding aids. KMCO serves customers in the United States. KRISJENN RANCH: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee on June 8, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Krisjenn Ranch, LLC. About KrisJenn Ranch KrisJenn Ranch, LLC, KrisJenn Ranch, LLC Series Uvalde Ranch, and KrisJenn Ranch, LLC Series Pipeline Row, a privately held company in the livestock farming industry, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50805) on April 27, 2020. The petition was signed by Larry Wright, the Debtor's manager. At the time of the filing, Debtor disclosed total assets of $16,246,409 and total liabilities of $6,548,315. Judge Ronald B. King oversees the case. Muller Smeberg PLLC is Debtor's legal counsel. LATAM AIRLINES: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in the Chapter 11 cases of LATAM Airlines S.A. and its affiliates. The committee members are: 1. Bank of New York Mellon Indenture Trustee for the 7.00% Senior Notes Due 2026 240 Greenwich Street New York, New York 10286 Attention: Gary S. Bush, Vice President Telephone: (212) 815-2747 2. Campania de Seguros de Vida Consorcio Nacional de Seguros S.A. Av. El Bosque Sur 180 Piso 13 Los Condes, Metropolitana Santiago, Chile Attention: Renato Sepulveda, CFO Telephone: +562 2230 4010 3. AerCap Holdings N.V. AerCap House, 65 St. Stephens’s Green Dublin DO2 YX20 Ireland Attention: Scot Kennedy, Vice President Telephone: +353 1 819 2010 4. Aircastle Limited 201 Tresser Blvd – Suite 400 Stamford, Connecticut 06901 Attention: Guy Bacigalupi Telephone: (203) 504-1020 5. Sindicato De Empresa de Pilotos De Latam Airlines Group S.A. Cruz del Sur 133 Office 302 Las Condes, Santiago, Chile Attention: Daniel Javier Bontempi Fernandez, President Telephone: +562 2723 5095 6. Lufthansa Technik Aktiengesellschaft Weg beimJäger 193 22335Hamburg,Fed.Rep.ofGermany Attention: Jens Fischer, Senior Manager Telephone: +49-40-5070-2709 7. Repsol, S.A. Av. Victor Andrés Belaunde 147 – Torre 5 Piso 3 San Isidro, Lima, Peru Attention: Eliana Flores Rios Head of Aviation America Telephone: +51 996413784 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 LATAM Airlines LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. LATAM Airlines Group S.A. is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general bankruptcy counsel; FTI Consulting as restructuring advisor; and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. Prime Clerk LLC is the claims agent. LEVEL 3 FINANCING: Fitch Rates $1BB Unsec. Notes Due 2028 'BB/RR2' ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB'/'RR2' rating to Level 3 Financing, Inc.'s offering of $1 billion of senior unsecured notes due 2028. Level 3 Financing is an indirect wholly owned subsidiary of CenturyLink, Inc. Net proceeds from the offering, together with cash on hand, are expected to be used for general corporate purposes, including the redemption of all $840 million of Level 3 Financing 5.375% senior unsecured notes due 2022 and $160 million of the 5.625% senior unsecured notes due 2023, both at par. KEY RATING DRIVERS Managing Effects of Coronavirus Pandemic: With respect to the macroeconomic effects of the coronavirus pandemic, Fitch believes the telecom sector, including CenturyLink, will be more resilient to a downturn than other sectors, with the potential for modest declines in revenue. Fitch expects CenturyLink to continue to benefit from cost-reduction programs initiated in 2019 following the early achievement of synergies from the Level 3 merger. Fitch does not expect material reductions in capital spending, although there is likely to be a reduction in success-based capex spending as demand weakens. Fitch believes the company is likely to prioritize spending and to continue to invest in areas that will enhance its competitive position. Prioritization of Debt Reduction: CenturyLink reduced its common dividend in February 2019, cutting the annual dividend payments to approximately $1.08 billion from $2.30 billion. The resulting additional annual FCF of more than $1.2 billion stemming from the reduction is being directed to a faster pace of debt repayment over a three-year period. The company also announced a commitment to a lower and narrower net target leverage range. Over the next few years, the company is targeting a net debt/adjusted EBITDA leverage range of 2.75x-3.25x, down from a previous target range of 3.0x-4.0x. Fitch is encouraged by the revised capital-allocation policies and believes this will better position the company in the long term. The company reduced net debt by approximately $2 billion in 2019, which was on track relative to the company's original guidance for 2019-2021. However, the coronavirus pandemic is leading to a downturn of unknown depth and duration, and the company's operations are likely to begin to be affected in 2Q20. The initial responses to the pandemic with respect to shelter-in-place policies brought about a sharp increase in demand for connectivity for work-at-home, remote learning and home entertainment, as well as increases on the part of enterprises for business continuity. Over time, the positive effects are likely to be offset by economic weakness given the rise in unemployment that has been pronounced in a number of sectors. Cost Reductions: Operational initiatives were set in motion in early 2019, targeting an annualized $800 million-$1 billion of additional EBITDA-improving initiatives in a three-year period at a cost of $450 million-$650 million. CenturyLink says it achieved a run rate of $510 million in annualized cost savings in the first quarter of 2020, after exiting 2019 at a run rate of $430 million. CenturyLink indicated these initiatives, combined with the faster pace of debt reduction, will enable the company to get within its target range within three years. Execution Risk: Fitch believes the dividend-reduction and EBITDA-improvement initiatives signal support for the credit profile, although the EBITDA initiatives are not without execution risk. Fitch believes significant debt reductions are achievable, but there is some execution risk in reaching the full amount targeted by CenturyLink, as part of the sustained FCF will depend on successful execution of EBITDA-improvement initiatives. Alternatives for Consumer Business: CenturyLink disclosed in May 2019 it had hired an advisor to consider strategic alternatives for its consumer segment. The company indicated on its 4Q19 call its review was completed, and while the next step has not been disclosed, the company continues to invest in fiber to enhance the consumer experience. The consumer segment produces approximately one-quarter of the company's revenue. Key Competitor in Business Services: In an industry where scale is a key factor, CenturyLink is a large competitor and the second-largest operator serving business customers after AT&T Inc. (A-/Stable) and modestly larger than the business customer operations of Verizon Communications Inc. (A-/Stable). CenturyLink's network capabilities, in particular a strong metropolitan network, and a broad product and service portfolio emphasizing IP-based infrastructure and managed services, provide the company with a solid base to grow enterprise segment revenue. Secular Challenges Facing Telecoms: In Fitch's view, CenturyLink continues to face secular challenges similar to other wireline operators in the residential portion of its business. Following the acquisition of Level 3, the consumer business became a much smaller part of the overall business and accounts for approximately one-quarter of revenue, down from 35% in 2016. Fitch expects this percentage to continue to decline over time, given legacy revenue trends and a more targeted investment strategy in the segment. Parent-Subsidiary Relationship: Fitch linked the ratings of CenturyLink and Level 3 Parent based on strong operational and strategic ties. DERIVATION SUMMARY CenturyLink has a relatively strong competitive position based on the scale and size of its operations in the enterprise/business services market. In this market, CenturyLink has a moderately smaller position in terms of revenue relative to AT&T and is slightly larger than Verizon. All three companies have an advantage with national or multinational companies, given extensive footprints in the U.S. and abroad. CenturyLink also has a larger enterprise business that notably differentiates it from other wireline operators, such as Windstream Services, LLC and Frontier Communications Corporation. AT&T and Verizon maintain lower financial leverage, generate higher EBITDA margins and FCF, and have wireless offerings providing more service diversification compared with CenturyLink. FCF improved at CenturyLink due to the dividend reduction and cost synergies. CenturyLink has lower exposure to the secularly challenged residential market compared with wireline operators, Frontier and Windstream. Within the residential market, incumbent wireline operators face wireless substitution and competition from cable operators with facilities-based triple-play offerings, including Comcast Corp. (A-/Stable) and Charter Communications Inc. Fitch rates Charter's indirect subsidiary, CCO Holdings, LLC 'BB+'/Stable. Cheaper alternative offerings, such as voice over internet protocol and over-the-top video services, provide additional challenges. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include: -- Fitch assumes revenues will decline in the midsingle digits in 2020 owing to the effect of the coronavirus pandemic in 2Q20 and continuing into 3Q20 for most revenue segments, with small and medium businesses the slowest to recover over the forecast horizon. -- EBITDA margins are expected to be around 41% in 2020. Cost transformation improved the EBITDA margin in 2019 by 160bps; the improvement in 2020 is expected to be just over half that amount. EBITDA margins reach approximately 42% in 2021 and remain flat thereafter. Fitch's assumptions regarding additional cost savings approximate the midpoint of the $800 million-$1 billion range targeted by the company over 2019-2021, higher than Fitch's prior expectations given the $430 million annualized run-rate CenturyLink achieved exiting 2019. -- Fitch expects capex to be in line with the company's capex guidance of approximately $3.7 billion for 2020 and 2021, toward the lower end of company guidance of $3.6 billion-$3.9 billion. Fitch assumes some lower success-based capex owing to the expectations for the macroeconomic environment. -- FCF directed to delevering over the forecast horizon. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch expects gross leverage (total debt with equity credit/operating EBITDA) to remain at or below 3.0x (FFO leverage of 3.0x), while consistently generating positive FCF in the midsingle digits; -- Additionally, the company will need to demonstrate consistent EBITDA and FCF growth. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A weakening of CenturyLink's operating results, including deteriorating margins and consistent midsingle-digit or greater revenue erosion brought on by difficult economic conditions or competitive pressure the company is unable to offset through cost reductions; -- Discretionary management decisions, including but not limited to execution of M&A activity that increases gross leverage beyond 4.5x (FFO leverage of 4.5x) in the absence of a credible deleveraging plan. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: CenturyLink's total debt as of March 31, 2020, pro forma for the repayment of debt subsequent to the end of the quarter, was $33.7 billion (before finance leases, unamortized discounts, debt issuance costs and other). On the same basis, actual quarter-end debt was $34.7 billion and readily available cash totaled approximately $1.6 billion. As described, the credit agreement was amended and restated in January 2020. The $2.2 billion senior secured revolving credit facility had $1.375 billion drawn on the facility as of March 31, 2020, with the amount temporarily high due to borrowing to repay at maturity on April 1, 2020, $973 million of outstanding CenturyLink notes. CenturyLink made solid progress on its debt-reduction plans in 2019, reducing net debt by approximately $2 billion. CenturyLink's secured credit facility is expected to benefit from secured guarantees by Qwest Communications International, Inc. (QCII); Qwest Services Corporation; CenturyTel Investments of Texas, Inc.; and CenturyTel Holdings, Inc. A stock pledge is provided by Wildcat HoldCo, LLC, the parent of Level 3 Parent, LLC to the CenturyLink CTL credit facility. The credit facility is guaranteed on an unsecured basis by Embarq Corporation and Qwest Capital Funding, Inc. The largest regulated subsidiary, Qwest Corporation, does not guarantee CenturyLink's secured facility, nor does Level 3 Parent. The CenturyLink senior secured notes will be guaranteed by the same subsidiaries that guarantee the senior secured credit facilities and will be secured by the same collateral. CenturyLink Communications, LLC was released as a guarantor of the senior secured credit facility, which makes the notes pari passu with the credit facility. The secured RCF and Term Loan A limit CenturyLink's gross debt/EBITDA to no more than 4.75x. The current credit agreement requires cash interest coverage to be no less than 2.0x. In terms of repayment, the company is subject to an excess cash flow sweep of 50%, with step downs to 25% and 0%, at total leverage of 3.5x and 3.0x, respectively. The excess cash flow calculation provides credit for voluntary prepayments and certain other investments. Fitch estimates 2020 FCF, or cash flow from operations less capex and dividends, will be in the $1.8 billion-$2.0 billion range. Fitch's assumptions are modestly lower than CenturyLink's original 2020 post-dividend guidance of approximately $2.0 billion-$2.3 billion. The company indicated capex could range from $3.6 billion to $3.9 billion in 2020, with the low end of the range similar to the $3.63 billion spent in 2019. Remaining maturities in 2020, following the repayment of $973 million of CenturyLink notes are nominal and consist of debt amortization payments. Maturities in 2021 approximately $2.4 billion. LEVEL 3 FINANCING: Moody's Rates New $1BB Sr. Unsec. Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 to CenturyLink, Inc.'s proposed $1 billion senior unsecured notes due 2028 (Unsecured Notes) which will be issued by Level 3 Financing, Inc. (LFI). The net proceeds from the sale of the Unsecured Notes, together with cash on hand, will be used to pay down the 5.375% senior notes due 2022 and for general corporate purposes. All other ratings including the company's Ba3 corporate family rating (CFR) and stable outlook are unchanged. Assignments: Issuer: Level 3 Financing, Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD4) RATINGS RATIONALE CenturyLink's Ba3 CFR reflects its predictable and further enhanced cash flow from its 2019 dividend reduction, its broad base of operations and strong market position. The companies publicly stated financial policy focuses on the longer-term achievement of a company-calculated net debt to adjusted EBITDA range of 2.75x to 3.25x, with steady debt reductions over at least the next two years funded with discretionary free cash flow. In addition, CenturyLink's continuing record of consistent network investment at a level generally above its peer group average demonstrates its commitment to its long-term competitive position. These positives are offset by still high but declining leverage and revenue weakness across its business units, exacerbated by secular industry challenges and a highly competitive operating environment. Revenue declined 3.7% year over year in the first quarter of 2020, but these revenue declines have steadily shrunk for the last four quarters. CenturyLink has demonstrated strong cost cutting success at a faster than planned pace from initial synergy targets following its November 2017 acquisition of Level 3, significantly offsetting the impact of revenue weakness on operating margins. CenturyLink's company-calculated adjusted EBITDA for first quarter of 2020 decreased slightly compared to the same period a year ago. However, company-calculated adjusted EBITDA margins have increased steadily since the close of the Level 3 transaction to 42.9% for the first quarter of 2020, up almost 750 basis points from a pre-close third quarter 2017 level of 35.5%. With Moody's expectation for EBITDA margins to continue increasing along with increased free cash flow from the 2019 dividend cut, CenturyLink is now well-positioned to pay down about $2 billion of debt each year over an expected three-year period ending in 2022. As of March 31, 2020, CenturyLink's leverage (Moody's adjusted) was 4.1x. Moody's expects CenturyLink to have a good liquidity profile over the next 12 months, reflected by its SGL-2 speculative grade liquidity rating and supported by $1.6 billion cash on hand as of March 31, 2020, and its expectation of at least $2.1 billion of after dividend free cash flow for full year 2020. The company has approximately $1.1 billion of near-term debt maturities. CenturyLink also has $0.825 billion of availability under its $2.2 billion senior secured revolving credit facility that expires in January 2025. With respect to the term loan A facilities and the revolver, the credit agreement requires CenturyLink to maintain a total leverage ratio of not more than 4.75x and a minimum consolidated interest coverage ratio of at least 2x. The term loan B facility is not subject to the leverage or interest coverage covenants. Moody's estimates CenturyLink will remain comfortably in compliance with the total leverage ratio and interest coverage ratio for the next 12 to 18 months. The ratings for the debt instruments comprise both the overall probability of default rating of CenturyLink, to which Moody's maintains a PDR of Ba3-PD, an average family loss given default (LGD) assessment and the composition of the debt instruments in the capital structure. CenturyLink's corporate structure includes two layers of debt (secured/unsecured) at the holding company (CenturyLink, Inc.) level and three main operating company credit pools (Qwest Corporation, Embarq Corporation and Level 3 Parent, LLC) with multiple classes of debt within each. At the holding company level, Moody's rates the company's secured credit facility Ba3 and unsecured notes B2. CenturyLink's senior secured credit facilities, including its revolver and term loans, are rated Ba3, reflecting their senior position ahead of CenturyLink's unsecured debt. The senior secured credit facilities are guaranteed by Wildcat Holdco LLC (Parent of Level 3 Parent, LLC), Qwest Communications International Inc. (QCII), Qwest Services Corp. (QSC), Qwest Capital Funding, Inc. (QCF) and Embarq Corporation (Embarq). The credit facility also benefits from a pledge of stock of Wildcat Holdco LLC, QCF and QSC. The B2 senior unsecured rating of CenturyLink Inc. reflects its junior position in the capital structure and the significant amount of senior debt, including as of March 31, 2020 $9.1 billion of debt at CenturyLink, $10.1 billion of debt at Level 3, $4.9 billion of debt at Qwest Corporation (QC), $0.4 billion of debt at QCF, and $1.6 billion of debt at Embarq and its subsidiaries. The senior unsecured debt of QC is rated Ba2 based on its structural seniority and relatively low leverage of 1.4x (Moody's adjusted) as of March 31, 2020. The senior unsecured notes of Level 3 Financing, Inc. (LFI) are rated Ba3, reflecting their structural seniority to Level 3 Parent, LLC, and junior position relative to LFI's senior secured bank credit facility and senior secured notes which are rated Ba1. Leverage within the Level 3 credit pool was 3.4x (Moody's adjusted) as of March 31, 2020. The senior unsecured debt of Embarq Corporation (Embarq) is rated Ba2, reflecting a structurally senior (relative to CenturyLink) claim on the assets of Embarq, which had leverage of 1.0x (Moody's adjusted) as of December 31, 2019. The senior secured debt of Embarq's operating subsidiary, Embarq Florida, Inc., is rated Baa3. The stable outlook reflects CenturyLink's sustainable deleveraging trajectory following an early 2019 dividend reduction, continued strong execution on cost synergies since the Level 3 acquisition in November 2017 and solid opportunities for continuing transformational synergies over the next several years. Moody's expects that CenturyLink's leverage (Moody's adjusted) will steadily fall below 4.0x by year-end 2020, supported by solid operational execution and continued margin expansion despite continued secular pressures on top line growth, with excess cash flow dedicated to debt reduction. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Moody's could downgrade CenturyLink's CFR to B1 if leverage (Moody's adjusted) increases above 4.25x or free cash flow turns negative, both on a sustained basis, or if capital investment is reduced to levels that could weaken the company's competitive position. Moody's could upgrade CenturyLink's CFR to Ba2 if both revenue and EBITDA were stabilized, leverage (Moody's adjusted) was sustained below 3.75x and free cash flow to debt was in the high single digit percentage range. The principal methodology used in this rating was Telecommunications Service Providers published in January 2017. CenturyLink, Inc., headquartered in Monroe, Louisiana, is an integrated communications company that provides an array of communications services to residential, business, governmental and wholesale customers. In October of 2017, CenturyLink acquired Level 3 Parent, LLC, (f/k/a Level 3 Communications, Inc.) an international communications company with one of the world's largest long-haul communications and optical internet backbones. The company generated approximately $22.2 billion in revenue over the last 12 months ended March 31, 2020. LOOKOUT RIDGE: To Satisfy All Claims From Sale of Texas Property ---------------------------------------------------------------- Lookout Ridge, LLC, submitted a Second Amended Disclosure Statement explaining its Chapter 11 Plan. The Debtor's property consists of approximately 107.11 acres in Georgetown, Williamson County, Texas. The Property lies between the highly successful Teravista residential development along the southern border and commercial property to the north. The Debtor plans to satisfy all creditors from the sale or disposition of the Property. The Debtor plans to sell a substantial portion of the Property at a price sufficient to pay all secured claims in full. If necessary, the Debtor will pay the sole unsecured creditor (Romspen) upon the sale of the property. If the Debtor is unable to close sufficient sales of its property within 18 months of the Effective Date of the Plan to pay the Allowed Claims of the Secured Creditors in full, the Secured Creditors can elect to take title to so much of the property to pay their Allowed Claims in full, at a value to be determined by the Bankruptcy Court, if the parties cannot agree. Class 4 Allowed Secured Claim of Agrow Credit Corporation and Class 5 - Allowed Secured Claim of Equity Secured Investments, Inc. Agrow and ESI each will retain its liens on all collateral to secure its Allowed Claim and will be paid in full under the Plan. The Allowed Claim shall accrue interest from the Effective Date of the Plan at the pre-default contract rate or at such lower rate as allowed by the Court to satisfy Sec. 1129(b)(2)(A)(i)(II) of the Code. The Allowed Claims will be paid in full at Closing of the sale of the Property. Class 5 Allowed Claim of Romspen Mortgage Limited Partnership. Romspen has an unsecured claim against Debtor in the amount of $25,256,071, subject to the release provisions of Section 12.31 of the Loan Agreement dated June 30, 2017 by and between Romspen, as Lender, and Longhorn Junction Land and Cattle Company, LLC, SC Williams, LLC and Debtor, as co-borrowers. On or about March 25, 2020, after the initiation of this case, Romspen received $3,470,928 from Longhorn Junction from the sale of a tract of its property. If Romspen obtains a judgment lien on the Debtor's Property, the Debtor will pay the balance of the Allowed Claim of Romspen upon the sale of any of Debtor's property, subject to the release provisions of Section 12.31 of the Loan Agreement, after payment of administrative claims and the claims of holders of claims in Classes 1 through 4 and net of 8% in closing costs. Class 7 Allowed Equity Interests in the Debtor. The equity interest holder, Gregory Hall, will retain his Interest. A full-text copy of the Second Amended Disclosure Statement dated May 20, 2020, is available at https://tinyurl.com/y8dcewkt from PacerMonitor.com at no charge. Attorneys for Lookout Ridge, LLC: Herbert C. Shelton HAJJAR PETERS LLP 3144 Bee Caves Rd Austin, Texas 78746 Tel: (512) 637-4956 Fax: (512) 637-4958 E-mail: cshelton@legalstrategy.com About Lookout Ridge Lookout Ridge, LLC, is primarily engaged in renting and leasing real estate properties. Lookout Ridge filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-10039) on Jan. 7, 2020. In the petition signed by Drew Hall, company representative, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. Ron Satija, Esq., at Hajjar Peters LLP, is the Debtor's legal counsel. LVI INTERMEDIATE: Hires Donlin Recano as Administrative Advisor --------------------------------------------------------------- LVI Intermediate Holdings, Inc., and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Donlin Recano & Company, Inc., as administrative advisor to the Debtors. LVI Intermediate requires Donlin Recano to: a. assist with, among other things, any required solicitation, balloting, and tabulation and calculation of votes, as well as preparing any appropriate reports, as required in furtherance of confirmation of plan(s) of reorganization (the "Balloting Services"); b. generate an official ballot certification and testifying, if necessary, in support of the ballot tabulation results; c. in connection with the Balloting Services, handling requests for documents from parties in interest, including, if applicable, brokerage firms and bank back-offices and institutional holders; d. gather data in conjunction with the preparation, and assist with the preparation, of the Debtor's schedules of assets and liabilities and statements of financial affairs; e. provide a confidential data room, if requested; f. manage and coordinate any distributions pursuant to a confirmed chapter 11 plan; and g. provide such other claims processing, noticing, solicitation, balloting, and administrative services described in the Services Agreement, but not included in the Section 156(c) Application, as may be requested by the Debtor from time to time. Donlin Recano will be paid at these hourly rates: Executive Management No charge Senior Bankruptcy Consultant $140-$170 Case Manager $70-$150 Technology/Programming Consultant $80-$140 Consultant/Analyst $70-$90 Clerical $25-$40 Donlin Recano will also be reimbursed for reasonable out-of-pocket expenses incurred. Nellwyn Voorhies, executive director of Donlin Recano & Company, Inc., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Donlin Recano can be reached at: Nellwyn Voorhies DONLIN RECANO & COMPANY, INC. 6201 15th Avenue Brooklyn, NY 11219 Toll Free Tel: (800) 591-8236 About LVI Intermediate Holdings Headquartered in West Palm Beach, Florida, LVI Intermediate Holdings d/b/a Vision Group Holdings develops and manages, through its various subsidiaries, among other businesses, two of the leading LASIK surgery brands in the nation: The LASIK Vision Institute and TLC Laser Eye Centers. The Company also owns and manages certain select general ophthalmology practices and QuaslightLasik, a licensed Preferred Provider Organization for LASIK surgery providers. LVI Intermediate Holdings, Inc., based in West Palm Beach, FL, filed a Chapter 11 petition (Bankr. D. Del. Lead Case No. 20-11413) on May 29, 2020. The Hon. Karen B. Owens oversees the case. In the petition signed by Lisa Melamed, interim CEO, the Debtor was estimated to have $1 million to $10 million in assets and $100 million to $500 million in liabilities. The Debtor tapped COLE SCHOTZ P.C. as counsel; ALVAREZ & MARSAL CAPITAL as financial advisor; RAYMOND JAMES & ASSOCIATES, INC. as investment banker; DONLIN RECANO & COMPANY, INC. as claims and noticing agent. MERIDIAN MARINA: Unsecureds to Get Lump Sum Payment of $299K ------------------------------------------------------------ Meridian Marina & Yacht Club of Palm City, LLC, submitted an Amended Plan of Reorganization. Class Seven (General Unsecured Creditors) will receive a lump sum payment pro rata distribution of $298,783 which will be paid on the Effective Date from sale proceeds set aside and escrowed pursuant to the Sale Order. Class Eight (Equity) will retain any net sale proceeds after payment of all claims in full (Allowed Secured Claims and Allowed Priority and General Unsecured Claims) upon closing of the transaction. Logically, the principal, Timothy Mullen, will receive a distribution after all claims are paid in full. This claim is impaired. The creditors will be paid from the sale of the assets pursuant to the Purchase and Sale Agreement. A full-text copy of the Amended Plan of Reorganization dated May 20, 2020, is available at https://tinyurl.com/y7wo2bpr from PacerMonitor.com at no charge. Attorneys for the Debtor: Craig I. Kelley, Esquire KELLEY, FULTON & KAPLAN, P.L. 1665 Palm Beach Lakes Blvd. The Forum - Suite 1000 West Palm Beach, Florida 33401 Telephone: (561) 491-1200 Facsimile: (561) 684-3773 About Meridian Marina Meridian Marina & Yacht Club of Palm City, LLC, based in Palm City, FL, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.19-18585) on June 27, 2019. In the petition signed by Timothy Mullen, member and manager, the Debtor disclosed $8,528,155 in assets and $5,790,533 in liabilities. The Hon. Erik P. Kimball oversees the case. Craig I. Kelley, Esq. at Kelley Fulton & Kaplan, P.L., serves as bankruptcy counsel to the Debtor. No official committee of unsecured creditors has been appointed in the Chapter 11 case. METRO CHRISTIAN: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The Office of the U.S. Trustee on June 9 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Metro Christian Fellowship, Inc. About Metro Christian Fellowship Metro Christian Fellowship, Inc., of Kansas City sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-40917) on May 6, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. Judge Dennis R. Dow oversees the case. Mann Conroy, LLC is the Debtor's legal counsel. MH SUB I: Moody's Rates New $500MM Incremental 1st Lien Loan 'B2' ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to MH Sub I, LLC's proposed $500 million incremental first-lien term loan. Concurrently, Moody's assigned a B2 rating to the new $214 million first-lien revolver, which was extended to a 2024 maturity. The stable outlook remains unchanged. Proceeds from the incremental term loan will be used to fully repay $185 million of outstanding revolver borrowings and increase cash balances, which will fund several medium and small-sized acquisitions over the coming year. Internet Brands drew under the revolver in Q1 2020 to acquire Staywell's patient and clinical education and health and wellness businesses. The term loan add-on and new revolver will be pari passu with the existing first-lien term loan and executed via a joinder agreement with respect to the existing first-lien credit agreement. Assignments: Issuer: MH Sub I, LLC (Co-Borrower: WebMD Health Corp.) - $500 Million Incremental Senior Secured First-Lien Term Loan due September 2024, Assigned B2 (LGD3) - $214 Million Senior Secured First-Lien Revolving Credit Facility due March 2024, Assigned B2 (LGD3) The assigned ratings are subject to review of final documentation and no material change in the size, terms and conditions of the transaction as advised to Moody's. Upon transaction close, Moody's will withdraw the ratings on the existing revolving credit facility maturing 2022. RATINGS RATIONALE Internet Brands' B3 Corporate Family Rating (CFR) reflects its solid debt protection measures for the rating category, high EBITDA margins in the 35%-40% range (Moody's adjusted) and 40% free cash flow (FCF) conversion. As a result of the incremental debt, Moody's estimates restricted group pro forma leverage, as measured by total debt to EBITDA, will increase modestly to 6.7x (Moody's adjusted, including its estimates for pro forma LTM EBITDA from acquisitions and cost synergies achievable this year) from 6.6x at 31 March 2020. Annual interest expense will increase approximately $25 million to $240 million resulting in roughly 2.3x pro forma EBITDA to interest coverage (Moody's adjusted). The rating is further supported by Internet Brands' resilient business model characterized by its: (i) sizable healthcare business, a sector of the economy that has fared better than other industries in withstanding the economic impact from the novel coronavirus (a.k.a. COVID-19) pandemic and ensuing recession given its non-discretionary and essential nature, especially during the recent health crisis; and (ii) subscription-based Software-as-a-Service (SaaS) business. The healthcare segment accounts for just over 75% of Internet Brands' total revenue driven by its Medscape brand, which is the leading digital resource for physicians and other healthcare professionals globally; and WebMD, the leading destination for consumer health information. While the healthcare business is chiefly an advertising-based revenue model (with a small subscription component), it has a highly visible revenue stream of which approximately 85%-90% is fully contracted for 2020, fueled by strong pharmaceutical advertising and sponsorship revenue across both Medscape's professional practice and WebMD's consumer platform. Though Moody's expects global ad spending to decline this year, Moody's expects ad spending in the healthcare, pharmaceutical and online sectors to hold up fairly well. In Q1 2020, WebMD's advertising and sponsorship revenue surged 30%, which led to a 26% increase in WebMD's segment GAAP revenue and 14% increase in Internet Brands' consolidated GAAP revenue in the March quarter. The company's as-reported EBITDA rose 13% in Q1 2020 (up 18% after adjusting for one-time costs and unusual items). Internet Brands also benefits from its non-advertising subscription-based SaaS business, which accounts for approximately 20% of total revenue and has 1-3-year contracts with professional small-to-medium sized businesses (SMBs) and enterprise customers. Though SMBs are more susceptible to spending reductions in the current economic recession, the company's SaaS customers are expected to be less impacted given that most are professional service firms, such as healthcare providers and law firms, that Moody's expects will experience steady demand from their clients. This business is high margin, supported by a relatively stable revenue stream in which approximately 90+% of SaaS/Software sales are recurring (or reoccurring), relatively high customer (revenue) retention rates in the 85% range and solid demand from professional SMBs as they seek to automate key functions by outsourcing IT requirements to providers that can offer a broad offering of integrated SaaS-based workflow tools. Despite these positive attributes, Moody's expects subscription revenue growth will experience modest pressure this year as renewal rates soften due to the economic downturn. Moody's expects Internet Brands' online service offerings to benefit from good organic traffic as consumers spend more time indoors and businesses increasingly allow employees to work-from-home during the COVID-19 outbreak, which will prompt an acceleration of media content and advertising spend to migrate to digital and mobile platforms. The rating also benefits from a low-cost traffic acquisition model and relatively low operating expense structure combined with modest working capital and capex that facilitate positive free cash flow generation. To preserve margins in the current environment, the company has taken certain cost actions. This includes a ~3% staff reduction, operational expense reductions (travel & entertainment, marketing, recruitment, etc.), pausing merit increases and halting new hires. Owing to the pandemic, Internet Brands has experienced some weakness in small parts of its business. The medical education live events segment experienced a revenue pullback due to social distancing measures. In response, the company shifted most of its live events online, which has generated better margins due to the reduction in staffing and marketing costs. Other challenged areas include the Henry Schein One JV (Dental) and auto segments in Q2 2020. According to the company, dental practices were down materially in April-May but have rebounded in June and continue to demonstrate improvement each week as stay-at-home measures are gradually relaxed and states reopen. Auto dealerships were also impacted in April, but have shown continuing improvement since the nadir due to a faster rebound in used vehicle sales compared to new vehicle sales as the US economy began to reopen in May. Weekly used car sales are now back to pre-COVID-19 levels kindled by the federal government's stimulus checks and consumers shift to less expensive used vehicles in the weak economic environment. Moody's estimates these businesses collectively represent less than 10% of Internet Brands' revenue and will continue to improve in Q3 2020 and Q4 2020. Weighing on the rating is Internet Brands' serial acquisition growth strategy, which has led to volatile credit metrics and could lead to integration challenges. Though the company is highly acquisitive, acquiring around 5-10 companies annually, it has a strong track record for successfully integrating acquisitions on or ahead of schedule, delivering planned cost synergies, expanding their margins in the process and achieving better-than-expected operating performance, particularly with the $2.8 billion WebMD acquisition in 2017, its largest purchase to date. Financial leverage will typically decline to a low level for the rating category after acquisitions are fully integrated, synergies realized and EBITDA rises. The rating is constrained by heightened governance risk from the company's majority ownership by private equity sponsor, KKR. Management's financial strategy, capital allocation and track record are solely influenced by the equity sponsor's demonstrated desire to welcome EBITDA growth as a means to build capacity for sizable debt-financed acquisitions and/or shareholder distributions, which increases the probability of future leveraging events following periods of deleveraging. There is also the potential for website traffic declines due to rapidly changing technology and industry standards as well as low entry barriers that could possibly increase competitive threats. Moody's also believes there is limited ability for Internet Brands to negotiate attractive pricing in certain ad revenue sharing agreements given that a growing and more concentrated share of digital ad revenue is derived from Alphabet's and Facebook's owned and operated websites. The stable outlook reflects Moody's view that Internet Brands' business model and operating profitability will remain fairly resilient during the ensuing economic recession similar to the resilience demonstrated during the 2008-09 global financial crisis, experience low-to-mid-single digit revenue and EBITDA growth and generate robust free cash flow this year. Moody's expects Internet Brands will maintain very good liquidity, even during the remainder of the economic recession. Potentially higher leverage rising to the 7x-7.5x area (Moody's adjusted) if EBITDA moderates this year from a prolonged pandemic or worse-than-expected economic recession is also factored in the stable outlook. Moody's projects a decline in economic activity in the wake of the coronavirus outbreak, with US GDP growth contracting 5.7% in 2020, followed by a 4.5% rebound next year. Over the coming twelve months, Moody's expects Internet Brands will maintain very good liquidity, supported by positive free cash flow generation in the $150 million to $200 million range (free cash flow totaled $220 million at LTM 31 March 2020). Liquidity is further enhanced by cash balances of at least $100 million (cash balances totaled $271 million at 31 March 2020) plus full access to the proposed $214 million revolving credit facility (RCF). The RCF is subject to a springing First-Lien Secured Debt to Consolidated EBITDA maintenance covenant (currently set at 7x, as defined in the first-lien credit agreement) that becomes operative only when more than 30% of the facility is drawn in the quarter. At 31 March 2020, the company's First-Lien Leverage ratio was 4.25x. Following the planned repayment of RCF borrowings with proceeds from the proposed incremental first-lien term loan, Moody's does not expect Internet Brands to draw on the RCF over the next 12-15 months. ESG CONSIDERATIONS The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The internet media sector has been one of the sectors affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Internet Brands' credit profile, including its exposure to the US economy, have left it moderately vulnerable to shifts in market sentiment in these unprecedented operating conditions and Internet Brands remains somewhat 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. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely over the near-term, however over time, an upgrade could occur if management were to refrain from aggressive debt-financed acquisitions that result in a highly leveraged capital structure and lower restricted group financial leverage well below 6.5x total debt to GAAP EBITDA (Moody's adjusted). Upward ratings pressure could also transpire if Internet Brands were to maintain its leading market positions, demonstrate solid organic revenue/earnings growth and continue to successfully integrate acquisitions. The company would also need to expand its subscription-based services to at least 50% of total revenue, improve end market and international diversification and maintain at least a good liquidity position. The ratings could be downgraded if Internet Brands experienced: (i) a weakened competitive position (as measured by market share), recurring/reoccurring and performance--based ad revenue decline from current levels, acquisitions exhibit underperformance or marketing and development costs increase (as measured by operating margin performance); (ii) debt-funded acquisitions or shareholder distributions that resulted in restricted group total debt to GAAP EBITDA sustained above 8x (Moody's adjusted); or (iii) negative free cash flow and/or weakened liquidity on a sustained basis. Headquartered in Los Angeles, CA, Internet Brands is the trade name for MH Sub I, LLC, an internet media company that owns more than 260 branded websites across four verticals (Health, Legal, Automotive and Other (includes Home and Travel)). Revenue totaled approximately $1.4 billion for the twelve months ended 31 March 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. MILLS FORESTRY: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee on June 9, 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 was estimated to have 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. NASCAR HOLDINGS: Moody's Cuts CFR to Ba3 & Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded NASCAR Holdings, LLC's Corporate Family Rating to Ba3 from Ba2, Probability of Default Rating to Ba3-PD from Ba2-PD, the senior secured facility (including a $150 million revolver and term loan B) to Ba3 from Ba2. The outlook was changed to negative from ratings under review. These actions conclude the review for downgrade that was initiated on March 16, 2020. The downgrade of NASCAR's ratings reflects the impact of the coronavirus outbreak which has limited the ability to hold live events with spectators in attendance. While several races were postponed at the beginning of the pandemic, the races have been rescheduled although without fans or with limited fans in attendance for the near term. Moody's projects revenue, EBITDA and cash flow to decline substantially in the near term with leverage rising as a result of lost attendance related revenue. Issuer: NASCAR Holdings, LLC Corporate Family Rating, downgraded to Ba3 from Ba2 Probability of Default Rating, downgraded to Ba3-PD from Ba2-PD Senior Secured Revolver due 2024, downgraded to Ba3 (LGD3) from Ba2 (LGD3) Senior Secured Term Loan B due 2026, downgraded to Ba3 (LGD3) from Ba2 (LGD3) Outlook Actions: Issuer: NASCAR Holdings, LLC Outlook, Changed To Negative from Rating Under Review RATINGS RATIONALE NASCAR's Ba3 CFR reflects Moody's expectation that leverage (4.2x as of Q4 2019) will increase in the near term and free cash flow will decline as a result of the coronavirus outbreak that has disrupted the ability to hold live events with fans in attendance. Several events were postponed and rescheduled later in the season, but NASCAR racing resumed on May 17th, 2020. In the near term, races will be held without fans or with limited fans in attendance which has resulted in the loss of attendance and related revenue (food, beverage, and merchandise). The lack of spectators will lead to a substantial decline in EBITDA and cash flow. Additional races may be held with limited amounts of fans in attendance going forward if the impact of the pandemic subsides over the course of the season, but NASCAR remains vulnerable to a prolonged outbreak which could lead to another suspension of NASCAR events. NASCAR has also faced multiyear declines in attendance due to reduced fan interest in NASCAR racing. Several changes to the sport have been made to increase fan interest and attract different demographic groups, but reduced spectator interest will continue to be a challenge for the company. While the TV broadcast agreement has offset declines in revenue from other race related segments, the agreements expire at the end of 2024 while the term loan matures in 2026. NASCAR benefits from its significant size and ownership of the NASCAR sanctioning body as well as its position as the largest track owner of NASCAR and other race events with 12 racetracks, 3 road courses, and 1 dragstrip. The TV broadcast agreements with contracted increases through 2024, support performance if events continue to be held and contribute to EBITDA at a high margin level during normal operating conditions. NASCAR has a joint venture in a casino at the company's Kansas Speedway which has also been impacted by the pandemic, but recently resumed operations. Historically, there have been high levels of capital spending on renovations to existing tracks and developments on its properties, but capex will likely be reduced significantly in the near term to support liquidity. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The motor sport sector has been one of the sectors significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in NASCAR's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and NASCAR 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 credit implications of public health and safety. The action reflects the impact on NASCAR of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. A governance consideration that Moody's considers in NASCAR's credit profile is the projected conservative financial policy. While leverage levels increased following the merger with International Speedway Corporation in 2019, Moody's projects a portion of free cash flow will be used to repay debt after the impact of the pandemic begins to abate. NASCAR is a privately owned company by members of the France family. NASCAR's liquidity position is expected to be adequate due to $222 million in cash and access to an undrawn $150 million revolver due 2024 as of Q4 2019. Capex was projected to be approximately $100 million in 2020, but will be significantly reduced to manage liquidity during the pandemic. Cash flow from operations will be substantially impacted by the number of events held, future attendance levels, and cost saving measures taken in the near term. If events continue to be held for the remainder of 2020 season, Moody's projects a portion of available cash on the balance sheet will be used for debt reduction. The term loan is covenant lite with the revolver subject to a springing first lien net leverage ratio of 6.25x (as defined in the credit agreement) when more than 35% of the revolver is drawn. There is a significant cushion of compliance currently, but the level of compliance will decline over the next several quarters due to the impact of the pandemic. The negative outlook reflects its expectation that revenue, profitability, and cash flow from operations will decline in 2020 due to the coronavirus outbreak's impact on the ability to hold NASCAR events with spectators in attendance. NASCAR will be reliant largely on broadcast revenue as long as events are held without fans and would be substantially impacted by a prolonged pandemic that led to a cancellation of future races. Spectators may be allowed to attend additional events on a limited basis if the coronavirus subsides, but attendance related revenue will likely be below normal levels due to requirements to maintain social distancing. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is not likely in the near term given the impact of the pandemic on the ability to operate NASCAR events with spectators in attendance as well as Moody's expectation of an increase in leverage in the near term. However, an upgrade could occur if Debt-to-EBITDA was projected to decrease below 4x and attendance levels returned to normal levels. A good liquidity position with a free cash flow to debt ratio in the high single percentages would also be required as well as confidence that the financial policy of the firm would be consistent with a higher rating. A stabilization of fan interest in NASCAR racing would also be required as reflected by attendance revenue growth and positive broadcast viewership trends. The ratings could be downgraded if Debt-to-EBITDA leverage was sustained above 5x due to major development projects or a sustained decline in profitability due to a deterioration in spectator interest in NASCAR. A weak liquidity position including a free cash flow to debt percentage in the low single percentages or an inability to obtain an amendment to its financial covenants if needed could also lead to a downgrade. NASCAR Holdings, LLC, headquartered in Daytona Beach, Florida is the sanctioning body of NASCAR and other race series. The company also owns and/or operates sixteen (16) race tracks within the territory of the United States, which includes ovals, road courses and a drag strip. In Q3 2019, NASCAR acquired International Speedway Corporation, which was previously a publicly traded company (ISCA). Members of the France family own 100% of NASCAR. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. NATEL ENGINEERING: Moody's Confirms B3 CFR & Alters Outlook to Neg ------------------------------------------------------------------ Moody's Investors Service concluded its review of Natel Engineering Company, Inc. (New)'s ratings initiated on March 20, 2020 and confirmed the issuer's B3 corporate family rating, its B3-PD probability of default rating, and its B3 first lien term loan rating. The ratings outlook was revised to negative given Moody's anticipation of ongoing challenges in the company's operating environment that will continue to weigh on the issuer's near-term financial performance, liquidity and credit protection measures. Moody's confirmed the following ratings: Corporate Family Rating --B3 Probability of Default Rating --B3-PD Senior Secured First Lien Term Loan due 2026 --B3 (LGD4) Outlook revised from Rating Under Review to Negative RATINGS RATIONALE Natel's B3 CFR is constrained by the company's high LTM debt leverage of over 5.5x (Moody's adjusted for operating leases), corporate governance concerns related to the company's concentrated equity ownership by Natel's founder, as well as limited customer diversity and a narrow business focus in the aerospace and defense, industrial, and medical vertical markets. The risks associated with Natel's customer diversity, which are common in the Electronics Manufacturing Services ("EMS") sector, have exposed the company to periods of considerable sales volatility which has resumed in recent quarters due to fluctuations in production capacity, the timing of customer orders, shifts in budget appropriations, and overall macroeconomic cyclicality, exacerbated by the recent economic downturn. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and asset price volatility are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The EMS sector has been significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Natel's credit profile, including the potential for production disruptions and the company's exposure to macroeconomic cyclicality in its end markets, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company's business remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The action reflects the impact on Natel of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The ratings are supported by the specialty nature of Natel's high-mix, low-to mid-volume assembly services, which feature EBITDA margins that are well above industry averages, as well as the company's long-term, strategic relationships with core customers. The B3 ratings for Natel's first lien term loan reflect the borrower's B3-PD PDR and a Loss Given Default ("LGD") assessment of LGD4. The first lien term loan ratings are consistent with the CFR as this instrument comprises the majority of company's debt structure, but features a second lien claim ranking below the $75 million ABL revolver's (unrated) claim on the company's cash and cash equivalents, inventory, receivables, and other liquid assets. Natel's adequate liquidity is principally supported by approximately $25 million of cash currently on the company's balance sheet as well as Moody's expectation of free cash flow generation (after dividends) in excess of $15 million over the next 12 months. Natel's term loan is subject to a financial covenant based on a maximum net leverage ratio of 5.25x in April 2020), leaving the company with very limited covenant headroom and minimal incremental borrowing capacity under its $75 million ABL revolving credit facility ($15 million drawn as of April 30, 2020) at present debt leverage levels. The negative outlook reflects Moody's expectation that Natel will experience mid-single digit organic revenue contraction over the next 12 months. Cost savings initiatives should fuel modest improvement in profitability metrics during this period, but overall debt leverage is expected to modestly increase in FY21. (January 2021). The outlook could be revised to stable if Natel's operating trends are indicative of a sustained recovery in operating performance and an improved liquidity position. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although unlikely in the near term, the ratings could be upgraded if Natel realizes meaningful revenue growth, increases customer diversity, and expands EBITDA, resulting in adjusted debt leverage sustained at around 4.5x and free cash flow (after dividends)/debt exceeding 5%. The ratings could be downgraded if Natel's revenue contracts and profitability erode materially, resulting in sustained liquidity pressure and an increase in debt leverage, or if the company adopts more aggressive financial policies. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Natel, headquartered in Chatsworth, California, is a specialty EMS provider with manufacturing and engineering locations across the United States, Mexico and China, serving customers in the aerospace and defense, industrial, and medical industries. Moody's projects that the company will generate revenue of approximately $785 million in FY21. NEIMAN MARCUS: Hires Jackson Walker as Co-Counsel ------------------------------------------------- Neiman Marcus Group LTD LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Jackson Walker LLP, as co-counsel to the Debtors. Neiman Marcus requires Jackson Walker to: a. provide legal advice and services regarding local rules, practices, and procedures, including Fifth Circuit law; b. provide certain services in connection with administration of the chapter 11 cases, including, without limitation, preparing agendas, hearing notices, witness and exhibit lists, and hearing binders of documents and pleadings; c. review and comment on proposed drafts of pleadings to be filed with the Court; d. at the request of the Debtors, appear in Court and at any meeting with the U.S. Trustee, and any meeting of creditors at any given time on behalf of the Debtors as their local and conflicts bankruptcy co-counsel; e. perform all other services assigned by the Debtors to the Firm as local and conflicts bankruptcy co-counsel; and f. provide legal advice and services on any matter on which Kirkland & Ellis LLP and Kirkland & Ellis International LLP may have a conflict or as needed based on specialization. Jackson Walker will be paid at these hourly rates: Attorneys $385 to $895 Paraprofessionals $175 to $185 Jackson Walker received from the Debtors a retainer of $300,000. On April 27, 2020, the Firm received a payment of $93,098 for prepetition services and reimbursement of expenses incurred for filing fees. On May 1, 2020, the Firm received an additional payment of $34,493.50 for prepetition services. Lastly, on May 6, 2020, the Firm received a payment in the amount of $10,970 for prepetition fees. The Firm continues to hold $161,438.50 in trust. Jackson Walker will also be reimbursed for reasonable out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the following is provided in response to the request for additional information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: The rates of other restructuring attorneys in the Firm range from $385 to $895 an hour and the paraprofessional rates range from $175-$185 per hour. The Firm represented the Debtors during the weeks immediately before the Petition Date, using the foregoing hourly rates. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The Firm has not prepared a budget and staffing plan. Matthew D. Cavenaugh, partner of Jackson Walker LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Jackson Walker can be reached at: Matthew D. Cavenaugh, Esq. Jennifer F. Wertz, Esq. Kristhy M. Peguero, Esq. Veronica A. Polnick, Esq. JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, TX 77010 Tel: (713) 752-4200 Fax: (713) 752-4221 E-mail: mcavenaugh@jw.com jwertz@jw.com kpeguero@jw.com vpolnick@jw.com About Neiman Marcus Group Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is a luxury omni-channel retailer conducting store and online operations principally under the Neiman Marcus, Bergdorf Goodman, and Last Call brand names. It also operates the Horchow e-commerce website offering luxury home furnishings and accessories. Since opening in 1907 with just one store in Dallas, Neiman Marcus and its affiliates have strategically grown to 67 stores across the United States. Neiman Marcus Group LTD and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32519) on May 7, 2020. At the time of the filing, the Debtors were each estimated to have assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankruptcy counsel; Jackson Walker, LLP as local counsel; Berkeley Research Group, LLC as restructuring advisor; Lazard Freres & Co. LLC as investment banker; and Stretto as claims, noticing and solicitation agent. NEIMAN MARCUS: Hires Mr. Weinsten of Berkeley as CRO ---------------------------------------------------- Neiman Marcus Group LTD LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Mr. Mark Weinsten of Berkeley Research Group, LLC, as chief restructuring officer to the Debtors. Neiman Marcus requires Berkeley to: (a) in conjunction with management of the Debtors and legal counsel and subject to the approval of the Board of Directors of the Debtors, develop and implement a chosen course of action to preserve asset value and maximize recoveries to stakeholders; (b) assist in overseeing the restructuring related activities of the Debtors in consultation with other advisors and the management team to effectuate the selected course of action; (c) assist the Debtors and their management in developing cash flow projections and related methodologies and assist with planning for alternatives as requested by the Debtors; (d) assist the Debtors in preparing for and operating in a Chapter 11 bankruptcy proceeding, including negotiations with stakeholders, and the formulation of a reorganization strategy and plan of reorganization directed to preserve and maximize value; (e) assist as requested by management in connection with the Debtors' development of their business plan, and such other related forecasts as may be required by creditor constituencies in connection with negotiations; (f) provide information deemed by the CRO to be reasonable and relevant to stakeholders and consult with key constituents as necessary; (g) to the extent reasonably requested by the Debtors, offer testimony before the Bankruptcy Court with respect to the services provided by the CRO and the Berkeley Personnel, and participate in depositions, including by providing deposition testimony, related thereto; (h) such other services as mutually agreed upon by the Firm, and the Debtors. The Debtors will pay Berkeley in the amount of $125,000 per month. In the event a going concern restructuring or sale transaction is consummated, the Debtors will pay Berkeley a $750,000 as Success Fee. Berkeley will be paid at these hourly rates: Managing Director $825 to $1,095 Director $625 to $835 Professional Staff $295 to $740 Support Staff $135 to $260 Berkeley received unapplied advance payments from the Debtors in the amount of $692,516.48. In the 90 day period prior to the Petition Date, the Debtors paid Berkeley $3,386,440.13. Berkeley will also be reimbursed for reasonable out-of-pocket expenses incurred. Mark Weinsten, managing director of Berkeley Research Group, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Berkeley can be reached at: Mark Weinsten BERKELEY RESEARCH GROUP, LLC 70 W. Madison Street, Suite 5000 Chicago, IL 60602 Tel: (312) 429-7900 About Neiman Marcus Group Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is a luxury omni-channel retailer conducting store and online operations principally under the Neiman Marcus, Bergdorf Goodman, and Last Call brand names. It also operates the Horchow e-commerce website offering luxury home furnishings and accessories. Since opening in 1907 with just one store in Dallas, Neiman Marcus and its affiliates have strategically grown to 67 stores across the United States. Neiman Marcus Group LTD and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32519) on May 7, 2020. At the time of the filing, the Debtors were each estimated to have assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankruptcy counsel; Jackson Walker, LLP as local counsel; Berkeley Research Group, LLC as restructuring advisor; Lazard Freres & Co. LLC as investment banker; and Stretto as claims, noticing and solicitation agent. NEIMAN MARCUS: Seeks to Hire Kirkland & Ellis as Counsel -------------------------------------------------------- Neiman Marcus Group LTD LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Kirkland & Ellis LLP and Kirkland & Ellis International LLP, as attorney to the Debtors. Neiman Marcus requires Kirkland & Ellis to: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b. advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; c. attend meetings and negotiating with representatives of creditors and other parties in interest; d. take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; e. prepare pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f. represent the Debtors in connection with obtaining authority to continue using cash collateral and postpetition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the Court and any appellate courts to represent the interests of the Debtors' estates; i. advise the Debtors regarding tax matters; j. take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and k. perform all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases, including: (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. Kirkland & Ellis will be paid at these hourly rates: Partners $1,075 to $1,845 Of Counsel $625 to $1,845 Associates $610 to $1,165 Paraprofessionals $245 to $460 On March 23, 2020, the Debtors paid Kirkland & Ellis the amount of $1,750,000 as advance retainer. Subsequently, the Debtors paid to Kirkland & Ellis additional advance retainer totaling $12,274,019.46. Kirkland & Ellis will also be reimbursed for reasonable out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the following is provided in response to the request for additional information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Kirkland represented the Debtors during the twelve- month period before the Petition Date, using the hourly rates listed below: Partners $1,025-$1,795 Of Counsel $595-$1,705 Associates $595-$1,125 Paraprofessionals $235-$460 Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Yes, for the period from May 7, 2020 through July 31, 2020. Anup Sathy, president of Anup Sathy, P.C., a partner of the law firm of Kirkland & Ellis LLP, and Kirkland & Ellis International, LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Kirkland & Ellis can be reached at: Anup Sathy, Esq. KIRKLAND & ELLIS LLP, AND KIRKLAND & ELLIS INTERNATIONAL, LLP 601 Lexington Avenue New York, NY 10022 Tel: (212) 446-4829 About Neiman Marcus Group LTD LLC Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is a luxury omni-channel retailer conducting store and online operations principally under the Neiman Marcus, Bergdorf Goodman, and Last Call brand names. It also operates the Horchow e-commerce website offering luxury home furnishings and accessories. Since opening in 1907 with just one store in Dallas, Neiman Marcus and its affiliates have strategically grown to 67 stores across the United States. Neiman Marcus Group LTD and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32519) on May 7, 2020. At the time of the filing, the Debtors were each estimated to have assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankruptcy counsel; Jackson Walker, LLP as local counsel; Berkeley Research Group, LLC as restructuring advisor; Lazard Freres & Co. LLC as investment banker; and Stretto as claims, noticing and solicitation agent. NEW EMERALD: Gets Court Approval to Hire RSG, Appoint CRO --------------------------------------------------------- New Emerald Energy, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ RSG Restructuring Advisors, LLC and appoint Brad Walker, the firm's managing director, as its chief restructuring officer. The firm's services will include: (a) assessing Debtor's business operations, properties, financial condition, current liquidity and forecasts; (b) assessing near-term cash flow and opportunities for improvement; (c) assessing restructuring options or strategic alternatives, and present findings to Debtor's board of directors and key stakeholders; (d) overseeing the restructuring or reorganization of Debtor and its debt structure; and (e) reporting weekly to Debtor's board and to secured creditors that request an update. The firm will be paid at hourly rates as follows: Brad Walker $425 Managing Directors $375 Directors $250 The retainer fee is $20,000. Mr. Walker disclosed in court filings that RSG is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Bradford C. Walker RSG Restructuring Advisors, LLC 12400 Coit Road, Suite 900 Dallas, TX 75201 Telephone: (214) 616-6256 Email: bwalker@riverbendssg.com About New Emerald Energy New Emerald Energy LLC, a Fort Worth, Texas-based company engaged in drilling oil and gas wells, 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, Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Edward L. Morris oversees the case. Dykema Gossett, PLLC is Debtor's legal counsel. NEW GOLD: Moody's Rates New $400MM Unsec. Notes Due 2027 'Caa1' --------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to New Gold Inc.'s new $400 million senior unsecured notes due 2027. Proceeds will be used to redeem its outstanding $400 million senior unsecured notes due 2022. The company's B3 Corporate Family Rating, B3-PD Probability of Default Rating and SGL-2 Speculative Grade Rating remain unchanged. The ratings outlook is stable. Assignments: Issuer: New Gold Inc. Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD4) RATINGS RATIONALE New Gold Inc. (B3 CFR) is constrained by its 1) small scale (454 thousand GEOs in 2019), 2) mine concentration (just two mines) 3) its expectation of negative free cash flow in the next 12-18 months, driven by material capital expenditures at both the Rainy River and New Afton mines, and 4) sensitivity to volatile gold and copper prices. The company benefits from 1) operations being located in a favorable mining jurisdiction (Canada), 2) long mine lives of over 10 years at both operating mines; and 3) good liquidity (SGL-2). New Gold's two recent sales have meaningfully improved the company's liquidity position. On March 31, 2020, New Gold closed its strategic partnership with Ontario Teachers' Pension Plan ("Ontario Teachers'") to sell a 46.0% free cash flow interest in the New Afton mine with an option to convert the interest into a 46.0% joint venture interest in four years, or have their interest remain as a free cash flow interest at a reduced rate of 42.5%, for upfront cash proceeds of $300 million. As well, on June 9, 2020, New Gold entered into a definitive agreement with Artemis Gold Inc. (unrated) to divest its Blackwater gold development project in British Columbia, whereby its will receive CAD140 million on closing and CAD50 million payable twelve months following closing, in addition to other considerations including a Blackwater gold stream and shares in Artemis. The Blackwater transaction is expected to close in the third quarter of 2020. New Gold is exposed to environmental risks typical for a company in the mining industry. This includes, but is not limited to wastewater discharges, site remediation and mine closure, waste rock and tailings management, and air emissions. The company is subject to environmental laws and regulations in the areas in which it operates. New Gold's Rainy River operations were shut down for two weeks in late March to adhere to provincial and federal COVID-19 guidelines. Following the resumption of mine operations in early April, New Gold has put safety protocols in place at all its sites to reduce the risk of the Covid-19 infection. This includes restricted access to sites; travel restrictions; enhanced sanitization practices; optimized plans for transport and employee accommodation; and work from home options. New Gold's management is committed to reducing debt over the near term. New Gold has good liquidity (SGL-2). Sources of $550 million compare to uses of about $400 million through December, 2021. Sources consist of $400 million of cash at Q1/20 and $150 million (CAD 190 million) expected from the sale of the Blackwater project. Uses include about $200 million of expected negative free cash flow, driven by a large capital spending program, and $200 million outstanding on its $400 million revolver authorization which expires in August, 2021. The company has no mandatory debt repayment repayments through 2021. Moody's expects New Gold will remain comfortably in compliance with its bank facility covenant. The stable outlook reflects its expectation that New Gold will maintain gold equivalent production above 400,000oz/year and that the company will continue to have at least an adequate liquidity position while funding its capital expenditures at both its Rainy River and New Afton mines. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if New Gold is able to generate sustainable positive free cash flow, adjusted debt to EBITDA is maintained below 3.5x (4.0x at Q1/20) and the company sustains a positive EBIT margin of at least 6% (-6% at Q1/20). A downgrade to Caa1 could occur if leverage is sustained above 4.5x (4.0x at Q1/20), EBIT margins are maintained below negative 5% (-6% at Q1/20) and cash flow from operations minus dividends falls to and remains below 10% of outstanding debt (24% at Q1/20). A significant reduction in liquidity could also result in a downgrade. The principal methodology used in these ratings was Mining published in September 2018 and available. New Gold Inc. is a gold producer headquartered in Toronto, Ontario with two operating mines: New Afton, British Columbia, Canada (69 thousand gold ozs and 79 million lbs copper produced in 2019), and Rainy River, Ontario, Canada (254 thousand gold ozs produced in 2019). The company also owns the Blackwater gold development project in British Columbia, which is being sold. Revenue for the twelve months ended December 31, 2019 was $631 million. NEW YORK HELICOPTER: Sets Bid Procedures for All Assets ------------------------------------------------------- New York Helicopter Charter, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to authorize the bidding procedures in connection with the auction sale of substantially all of its assets and certain assets of its affiliate, Miami Helicopter Inc. ("MHI"). The extreme disruptive effects of the global Coronavirus pandemic have unfortunately and suddenly placed the Debtor's business in limbo. Like so many businesses worldwide, the Debtor has been adversely affected by the pandemic. Accordingly, it currently has no current ability to generate income. The ripple effects of the Coronavirus pandemic have extended to the lending markets as well. In that regard, on the eve of its anticipated filing of a motion to approve $1.5 million of DIP financing, the Debtor was informed that Reich Bros. Business Solutions would not be funding the DIP due to concerns regarding its ability to service the debt in this environment and because it was otherwise pulling back on making new loans for the time being. As a consequence, it became necessary to rethink its strategy and the Debtor will be selling its assets, in whole or in part, in order to maximize value for the bankruptcy estate. Reich Bros. has advised the Debtor that it remains open to funding the DIP, external circumstances allowing. In addition, the Debtor is in discussions with potential alternative DIP lenders and strategic investors for purposes of determining whether the Debtor may reorganize as a going concern, albeit without helicopter assets, such assets to be sold as described. To the extent either of these potential funding sources materialize, or should the situation allow for flights to occur and tourists to return to New York, the Debtor may amend its plan to allow for the Debtor to continue as a going concern. In the interim, however, the Debtor intends to proceed with a liquidating Chapter 11 plan. Based upon discussions with 1st Source Bank, the Debtor proposes to sell its helicopter fleet, as well as the helicopter fleet of MHI, either separately or as a package to the highest and best bidder(s). At the same time, its business will also be offered for sale as a going concern, either with or without its helicopter assets. In an effort to ensure that these assets are sold for the highest and best price, each of these assets, individually and as a group, will be marketed for sale based on market conditions at an undisclosed strike price to be determined by the Debtor and MHS, in consultation with 1st Source Bank. Pursuant to agreement with 1st Source Bank, the Debtor will have until Aug. 15, 2020 to close on a sale of (a) the business; and/or (b) the sale of the following assets: (i) all of the Debtor's and MHI's assets that serve as 1st Source Bank's collateral; and (ii) each asset of the Debtor and MHI with a value of $5,000 or more that does not serve as 1st Source Bank’s collateral, provided that the Debtor's Part 135/136 License and their intellectually property are excluded from the definition of Sale Assets (or, alternatively, sale of the business). In the event that any of the Sale Assets that serve as 1st Source Bank's collateral is not sold by the Sale Deadline, 1st Source Bank will have the right to repossess its collateral. In the event the Debtor realizes $450,000 or more in sale proceeds from this process (and the sale proceeds has been paid to 1st Source Bank in accordance with the proceeds waterfall set forth), the Sale Deadline with respect to the Sale Assets (other than the business as a going concern) will be extended by one month. Following the Sale Deadline, as may be extended by the parties, the Debtor will turnover the 1st Source collateral to 1st Source. The proceeds of sale are to be distributed as follows: a. First, to pay the costs of sale, including broker commissions; b. Second, the next $25,000 to WW on account of its Carveout, subject to approval of the applicable fee application and then distributed to WW; c. Third, the next $300,000 to 1st Source Bank in repayment of allowed pre-petition debt; d. Fourth, the next $25,000 to WW on account of its Carveout, subject to approval of an applicable fee application and then distributed to WW; e. Fifth, the next $300,000 to 1st Source Bank in repayment of allowed pre-petition debt; f. Sixth, the next $25,000 to WW on account of its Carveout, subject to approval of an applicable fee application and then distributed to WW; g. Seventh, to 1st Source Bank, in repayment of allowed pre-petition deb until paid in full with interests and fees; and h. Eighth, to the extent 1st Source Bank's allowed claim is paid in full, with interest and fees, to the estate. The term "Carve-Out" will mean the payment of all allowed accrued and unpaid fees, disbursements, costs and expenses of White & Wolnerman, PLLC ("WW"), up to $75,000, incurred in the Chapter 11 Case by WW in connection with the sale of the Debtor's assets. In the event an asset that is part of 1st Source Bank's collateral is sold to a party other than by way of credit bid, the Carve-Out will be paid from the applicable sale proceeds and released to WW upon the closing of the sale of the applicable asset(s) of the Debtor and/or MHI or the Debtor's business. In the event an asset is acquired by 1st Source Bank pursuant to credit bid, 1st Source Bank will be responsible for the payment of HMS’s commission (to the extent the credit bid exceeds the strike price(s)) and the applicable portion of the Carveout), provided, however, that no amount of the Carve-Out payable by 1st Source Bank will be due to WW until the earlier of (i) the Sale Deadline, as same may be extended as set forth herein or by agreement of the parties or (ii) the sale of all Sale Assets. To the extent that the estate realizes sale proceeds from the sale of both encumbered and unencumbered assets, the Carve-Out will first be payable from the proceeds of sale of unencumbered assets, then cash proceeds of Sale Assets, and then, only to the extent any Carve-Out is still due and owing to WW in accordance with the Distribution Waterfall, from 1st Source Bank on account of its credit bid. To the extent that the credit bid is less than the strike price(s) HMS will be reimbursed by 1st Source Bank for HMS' out of pocket costs of sale but will not be paid a commission. Any amounts recovered by the estate or MHI on account of any unencumbered asset, including but not limited to the Sale Assets, License, and any causes of action, which are distributed to WW under the Bankruptcy Code on account of WW's post-petition fee claims will reduce the Carve-Out dollar for dollar. For avoidance of doubt, any amounts paid to WW from the Carve-Out in excess of the Reduced Carve-Out will be immediately paid and reimbursed to 1st Source Bank. As adequate protection for any payments made by 1st Source Bank on account of the Carve-Out, 1st Source Bank will receive a first priority lien on all unencumbered assets and a super-priority administrative expense claim, superior to all other administrative expenses. The salient terms of the Bidding Procedures are: a. Bid Deadline: Aug. 6, 2020 at 9:00 a.m. (EST) b. Initial Bid: The Debtor will determine which bids are deemed to be "Qualified Bids" and which Acceptable Bidders are "Qualified Bidders" and will notify the Acceptable Bidders whether any bids submitted constitute Qualified Bids so as to enable Qualified Bidders to bid at the Auction. By participating at the Auction, each bidder agrees to the terms of these Bidding Procedures, including without limitation the requirement to be a Back-Up Bidder. c. Deposit: 10% of the proposed purchase price d. Auction: To maximize the sale value MHI's helicopter assets and the Debtor's helicopter assets or, alternatively, the Debtor as a going concern, the Debtor, with the assistance of HMS, will be conducting an Auction on Aug. 10, 2020 at 10:00 a.m. at White & Wolnerman, PLLC, 950 Third Avenue, 11th Floor, New York, New York 10022, or such later time or other place as determined by the Debtor in consultation with 1st Source Bank. e. Bid Increments: Subsequent bids at the Auction, including any bids by credit-bids by 1st Source Bank, will be made as follows: (i) in respect of Helicopter Assets, in minimum increments of $5,000; and (ii) in respect of the Company as a going concern, in minimum increments of $50,000. f. Sale Hearing: Aug. 12, 2020 at 10:00 a.m. (EST) g. Sale Objection Deadline: No later than seven days prior to the Sale Hearing h. 1st Source Bank will be deemed a Qualified Bidder for purposes of participating in the Auction by way of credit bid. The Auction will be governed by such other Auction Procedures as may be announced by the Debtor, after consultation with its advisors and 1st Source Bank, from time to time on the record at the Auction; provided, that any such other Auction Procedures will not be inconsistent with any order of the Court in the Debtor's Chapter 11 Case. The Debtor asks that the Court authorizes the sale of property free and clear of all Liens. Within three business days after entry of the Bidding Procedures Order, the Debtor, will serve copies of the Sale Notice upon all the Notice Parties. The Debtor's proposed sale is within its sound business judgment and warrants approval by the Court. To preserve the value of the Debtor's estate and limit the costs of administering the estate, it is critical that the Debtor close the sale of the Properties as soon as possible after all closing conditions have been met or waived. Accordingly, the Debtor asks that the Court waives the 10-day stay period under Bankruptcy Rules 6004(h), or in the alternative, if an objection to the sale is filed, reduce the stay period to the minimum amount of time reasonably required by the objecting party to file its appeal. In connection with the modification of HMS' retention, HMS has agreed to amend its compensation structure, as follows: a. In the event of a sale of individual helicopters, HMS to receive a commission based on the helicopter sold, as follows: (i) Miami 1980 and Miami 1981 - $5,000, per helicopter; (ii) NYH 1978 – the greater of 3% and $15,000; (iii) NYH 68 – the greater of 3% and $25,000; and (iv) NYH 91 – the greater of 3% and $20,000; b. In the event of a sale of all helicopters as a package, the greater of 3% and $50,000; c. In the event of a sale of the business without the helicopters, the greater of 3% and $50,000; and d. In the event of a sale of the business together with the helicopters, the greater of 3% and $100,000. A copy of the Bidding Procedures is available at https://tinyurl.com/ycb2k4hu from PacerMonitor.com free of charge. A hearing on the Motion is set for June 23, 2020 at 10:00 a.m. (EST). The objection deadline is June 16, 2020 at 5:00 p.m. (EST). About New York Helicopter Charter New York Helicopter Charter Inc., a provider of helicopter tours and charters, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Case No. 19-13238) on Oct. 11, 2019. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The case is assigned to Judge Sean H. Lane. The Debtor tapped White & Wolnerman, PLLC as its legal counsel; Bauman Law Group P.C. as litigation counsel; Pulvers Pulvers & Thompson, LLP, as special counsel; and Nussbaum Yates Berg Klein & Wolpow, LLP, as its accountant. NORTH TAMPA: Hires Jennis Law as Special Counsel ------------------------------------------------ North Tampa Anesthesida Consultants, P.A., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Jennis Law Firm, as special counsel to the Debtors. North Tampa requires Jennis Law to represent and provide legal services in the following cases: -- Babcock, et al. v. North Tampa Anesthesia Consultants, et al., Case No. 13-CA-011371, pending before the Thirteenth Judicial Circuit in and for Hillsborough County, Florida and any litigation related thereto; -- any claims asserted by Fifth Third Bank National Association ("5/3"), including the actions styled North Tampa Anesthesia Consultants, P.A., et al. v. Fifth Third Bank, Adv. No. 8:20-ap-291-CPM, pending before the United States Bankruptcy Court for the Middle District of Florida, Tampa Division and Fifth Third Bank, National Association v. HLPG Newaco, LLC, North Tampa Anesthesia Consultants, P.A., Christopher J. Lombardi, and Gabriel Perez, Case No. 2020-CA-362, pending before the Ninth Judicial Circuit in and for Orange County, Florida. Jennis Law will be paid at these hourly rates: Attorneys $250 to $475 Paralegals $120 to $160 Jennis Law will be paid a retainer in the amount of $5,000. Jennis Law will also be reimbursed for reasonable out-of-pocket expenses incurred. David Jennis, partner of Jennis Law Firm, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Jennis Law can be reached at: David S. Jennis, Esq. JENNIS LAW FIRM Address: 606 East Madison Street Tampa, FL 33602 Fax: (813) 405-4046 Tel: (813) 229-2800 E-mail: detlinger@jennislaw.com ecf@jennislaw.com About North Tampa Anesthesida North Tampa Anesthesida Consultants, PA, based in Tampa, FL, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-02101) on March 10, 2020. In the petition signed by Gabriel Perez, director/practice administrator, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Angelina E. Lim, Esq., at Johnson Pope Bokor Ruppel & Burns, LLP, serves as bankruptcy counsel to the Debtor. Jennis Law Firm, is special counsel. OLEUM EXPLORATION: Taps Chamberlin Law as Special Counsel --------------------------------------------------------- Oleum Exploration, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ Chamberlin Law & Mediation as special counsel. The firm's services will include legal advice on transactional and corporate matters arising under Texas law in connection with the implementation and consummation of Debtor's Chapter 11 plan. The firm's professionals will be paid at hourly rates as follows: Larry Chamberlin $450 Paralegals $200 Clerical Personnel $150 Larry Chamberlin, Esq., at Chamberlin Law, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Larry Chamberlin, Esq. Chamberlin Law & Mediation 3724 Cypress Creek Pkwy #222 Houston, TX 77068 Telephone: (713) 580-2222 About Oleum Exploration Oleum Exploration, LLC, a production and exploration company operating in Gulf Coast Basin, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 19-00664) on Feb. 16, 2019. At the time of the filing, Debtor disclosed $2,164,154 in assets and $10,400,625 in liabilities. Judge Robert N. Opel II oversees the case. Debtor tapped Kurtzman Stead, LLC as bankruptcy counsel, and Gray Reed & McGraw LLP and Chamberlin Law & Mediation as special counsel. On April 15, 2020, Debtor filed its Chapter 11 plan of reorganization and disclosure statement. OMNITRACS HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR ------------------------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based provider of fleet management solutions to the trucking industry Omnitracs Holdings LLC to negative from stable and affirmed its 'B' issuer credit rating. S&P also affirmed its 'B' issue-level ratings on the company's senior secured term loan and revolving credit facility. The U.S. economic downturn is expected to hurt fiscal 2020 credit metrics. The U.S. economic downturn caused by the COVID-19 pandemic has affected the trucking industry, with lower business and consumer confidence resulting in generally lower freight volumes and more underutilized fleet capacity. This has reduced hardware shipments and software bookings for Omnitracs, with some of its customers being more capital-constrained to make significant investments. Furthermore, Omnitracs has established a relief program for its most-affected customers that temporarily downsizes fleet coverage in exchange for term extensions. S&P expects these factors to contribute to a mid-single-digit revenue decline and significantly weaker credit metrics in fiscal 2020. It now expects leverage to increase to about 9x from 6.8x in fiscal 2019 and free operating cash flow (FOCF)-to-debt to reduce to 3%-4% from 8.4%. Product development costs and restructuring activities will also weaken EBITDA margins in fiscal 2020. The expected leverage increase is also driven by EBITDA margins temporarily contracting by up to four percentage points to about 19% in fiscal 2020. The aforementioned revenue decline and COVID-19 relief program account for some of this margin reduction. S&P also expects margins to be affected by elevated spending on strategic product development projects, including the Omnitracs One platform and a next-generation hardware device. These include higher capitalized software development costs, expensed in S&P's adjusted EBITDA figures, up to nearly $15 million from about $13 million in fiscal 2019. There are also implementation costs in fiscal 2020 related to cost-saving activities in light of the weaker demand environment and the buildout of the company's Mexico development and operations center. Fiscal 2020 also includes some one-time costs including about $4 million of customer credits related to outages on legacy products in November 2019. Cost savings and reduced investments should result in deleveraging in fiscal 2021, assuming macroeconomic trends stabilize. S&P expects EBITDA margins to recover to just below 25% in fiscal 2021 as Omnitracs starts to benefit from cost savings, lower product development spending, and an assumed discontinuation of the COVID-19 customer relief program. This is in addition to a potential return to modest revenue growth from upselling activities on the cloud-based and unified product platform, Omnitracs One, which has seen some recent customer wins and should see increasing adoption within the company's customer base following platform updates. S&P expects this to contribute to leverage reducing back below 7x in fiscal 2021 and FOCF to debt improving to 8%-9%. Credit metrics could remain weak if investments are unsuccessful or a trucking industry recovery is slower than expected in light of the uncertain environment. While customer churn has not been materially affected by the downturn so far due to Omnitracs' focus on the more stable enterprise fleet-size market and its multiyear subscription contracts (representing nearly 80% of total revenues), the operating environment is highly uncertain. S&P's forecast credit metrics are thus susceptible to the uncertainties around the duration and extent of the economic downturn, which could prolong weak trends in the trucking industry and ultimately result in significantly lower revenue retention rates or greater-than-expected use of the customer relief program. S&P also believes that the product investments and completion of the Mexico development and operations center carries some execution risk. There is sufficient liquidity to withstand weak fiscal 2020 performance, helped by continued positive FOCF generation. Omnitracs should maintain sufficient liquidity over the next 12 months supported by its $114 million cash balance, fully available $50 million revolving facility due in March 2023 and positive FOCF generation. Adjusted FOCF is expected to remain positive in fiscal 2020 at $23 million-$28 million, helped by a lower cash interest burden. This is still a significant FOCF reduction from about $58.5 million in fiscal 2019 due to the expected EBITDA decline and a peak in net working capital outflows as inventory builds from reduced hardware shipments and upcoming customer migrations to newer hardware given U.S. wireless carriers' planned shutdown of 3G networks. Capital expenditure (capex) should also remain elevated--albeit at lower levels than initially planned--in order to support the product development, Mexico buildout, and IT infrastructure modernization activities. Omnitracs is also aiming to improve cash collection and extend payment terms with its vendors in order to improve its near-term cash generation. "Our adjusted debt, operating cash flow, and EBITDA include our standard adjustments for operating leases, capitalized software development costs, and share-based compensation. We do not net accessible cash from our debt figures, based on our view that it could be used for shareholder returns, acquisitions, or other purposes, given the company's financial sponsor ownership," S&P said. The negative outlook reflects S&P's expectation that Omnitracs will face significant near-term pressure on revenues and EBITDA margins due to a weaker demand environment and ongoing growth investments. This should result in elevated leverage at around 9x in fiscal 2020, while FOCF is further affected by net working capital outflows due to an inventory buildup. While S&P expects significant deleveraging in fiscal 2021, a longer-than-anticipated global recession could continue to weigh on revenues and EBITDA in fiscal 2021. "We could lower the rating if we expect continued revenue declines in fiscal 2021 due to persistent unfavorable macro trends in the trucking industry and reduced revenue retention rates, or we expect EBITDA margins to remain well below 25% due to execution issues related to product investments and restructuring activities. This would lead to expectations of leverage remaining above 7x well beyond fiscal 2020 or FOCF to debt staying in the low-single-digit percent area," S&P said. "We could revise the outlook to stable if Omnitracs can return to revenue growth, aided by the continued rollout of the Omnitracs One platform and improve EBITDA margins towards the 25% area through cost savings and a moderation in restructuring and growth investments. This would support our expectation of leverage returning below 7x and FOCF to debt remaining in the mid-single-digit percent area or greater. This could also be the result of Omnitracs reducing its gross debt balance while maintaining sufficient liquidity," the rating agency said. P & E HARMONY: Oct. 1 Requested Date to File Plan and Disclosures ----------------------------------------------------------------- P & E Harmony LLC, filed a motion to extend its time to file a Chapter 11 Plan and a Disclosure Statement. P & E Harmony LLC, filed for protection under Chapter 11 of the Bankruptcy Code on December 17, 2019. Pursuant to scheduling guidelines, the Debtor in-Possession is required to file its Chapter 11 Plan and Disclosure by June 1, 2020. Proofs of claims are still being filed which may require objections if the parties are unable to reach an amicable resolution as to the amount to be repaid, and the government claims bar date has not yet passed. Additionally, the recent guidelines imposed because of the COVID-19 pandemic have increased the difficulty of dealing with creditors since many are working remotely and do not have access to a complete file for reference, as well as the Debtor-in-Possession being forced to close and, thus, unable to transact business. An additional one hundred twenty (120) days from and after June 1, 2020, is needed within which to allow the Debtor-in-Possession sufficient time to reopen and re-establish itself as an viable business. Therefore, Debtor-in-Possession respectfully requests that this Court extend the time in which to file its Disclosure Statement and Plan of Reorganization for one hundred twenty (120) days after June 1, 2020, to October 1, 2020. Debtor's counsel: Jeffrey A. Levingston, MSB #1219 Norquist & Levingston PLLC PO Box 1327 Cleveland, MS 38732 Tel: 662-843-2791 E-mail: jleving@bellsouth.net P&L DEVELOPMENT: Fitch Alters Outlook on 'B-' IDR to Positive ------------------------------------------------------------- Fitch Ratings has affirmed P&L Development Holdings, LLC and P&L Development, LLC's 'B-' Issuer Default Ratings and revised the Rating Outlooks to Positive from Stable. The Positive Rating Outlook reflects PLDH's improving operating profile due to the contribution from Teva's over-the-counter business, strong customer retention profile, relatively reliable demand for the company's products, and strong value proposition for retailers and consumers. The improved operating profile supports prospects for deleveraging during 2020. PLDH had approximately $419 million of debt outstanding, which includes $87 million of preferred equity at Dec. 31, 2019. KEY RATING DRIVERS Coronavirus Tailwinds: The coronavirus pandemic has created demand for PLDH's products, including rubbing alcohol, analgesics, and cough and cold products. The higher cost of goods associated with supply chain shortages, which would normally weigh on operating margins, has generally been passed through to customers. As one example of this increased demand, PLDH will fill and package 52 million bottles of Purell for Gojo industries over the next 12 months at competitive margins relative to the existing profitability profile. Teva Fully Integrated: PLDH has fully integrated the Teva product portfolio following a mid-2019 acquisition, and Fitch expects meaningful growth contributions from nicotine replacement therapy (NRT) products and the continued growth of the docosanol abbreviated new drug application. The company has attracted Walgreens, CVS, Walmart and Rite Aid and others as customers. Several other ANDAs acquired from Teva, including Advil Mini Liquidgel and Differin Gel, should also support near- and intermediate-term growth. Deleveraging through EBITDA Growth: Fitch assumes that the company will deleverage primarily through EBITDA growth, given a modest term loan amortization schedule. Use of excess cash flow provisions in the bank agreement could increase debt reduction, but Fitch does not include this in the ratings case forecast for the issuer. Recent business wins for the Teva business and the Gojo partnerships will help support profitable growth as well as continued solid execution in the legacy business. Cost Control: PLDH is working toward improving operating efficiency through headcount reductions, less costly employee health insurance programs, improved sourcing, SKU rationalization and other operating initiatives. These cost-saving efforts should more than offset the negative impact from increased wages and costs related to a developing infrastructure project. The addition of the Teva portfolio, Abbott's Pedialyte, Purell packaging, advancing sales of OTC liquids and ANDA guaifenesin also helps to support intermediate growth, despite the moderately negative effect on sales from SKU rationalization. Revenue Concentration: PLDH has significant customer revenue concentration with the company's top two customers accounting for roughly 36% of total firm sales. Product revenue concentration is less concerning, as the company's top 20 products account for roughly 21% of total sales. The acquisition of Teva OTC did not materially change the company's customer concentration but did modestly reduce product concentration. Dependable Demand, Manageable Pricing Environment: Consumer healthcare products benefit from relatively reliable demand. Sales tend to be recession-resistant as people prioritize healthcare needs. They can be purchased without a physician's prescription and offer relief for some non-critical medical issues. In addition, private-label brands offer less costly alternatives to brand-name products, attracting cost-conscious consumers, while at the same time offering higher margins to retailers. In contrast to generic prescription drug manufacturers, consumer OTC product makers do not face pricing pressure from large third-party payers. Overall, pricing trends in the segment appear rational, given the overwhelming dominance of the largest player, Perrigo, and the much smaller second largest player, PLDH. Expect Consistently Positive FCF: Fitch forecasts that PLDH will generate meaningfully positive annual FCF in the ratings case forecast for the issuer. PLDH experienced weak FCF in 2019 due to delayed FDA ANDA approvals, customer pushback of key product launches and customer transition of certain TEVA items. Fitch believes these issues are largely resolved. Although building inventory levels will weigh on FCF in 2020, a combination of revenue growth, stable operating margins due to successful operating cost control and reduced capex requirements will lead to positive FCF generation. DERIVATION SUMMARY PLDH's rating of 'B-'/Outlook Positive reflects its significantly smaller scale and that it operates with much lower margins relative to peers - Mallinckrodt 'ccc-*', Endo 'c*' and Bausch Health 'B'/Stable. The company is particularly smaller (by a factor greater than 10x) than its nearest competitor, Perrigo (not rated by Fitch). However, the pricing environment for PLDH is much less onerous than that of prescription drug manufacturers (Mallinckrodt, Endo and Bausch Health) and PLDH's contingent liability profile is more benign than that of Mallinckrodt and Endo. KEY ASSUMPTIONS -- Mid-single-digit organic revenue growth during the forecast period. -- Margins improving to a favorable sales mix shift driven by the Teva OTC business and cost reduction. -- Annual FCF to remain significantly positive (relative to PLD's scale) during the forecast period. -- Leverage (total debt/EBITDA) declining to 5.0x by 2022, primarily due to EBITDA growth. -- Modest reductions in debt through annual term loan amortization. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Solid execution within PLDH's legacy business and continued advancement of the Teva portfolio, accompanied by positive FCF generation. -- Gross leverage (total debt/EBITDA) expected to remain durably at or below 6.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Persistently negative operating trend that results in the company burning cash. -- Leverage (total debt/EBITDA) expected to remain durably above 7.0x. 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 Sufficient Liquidity, Light Maturities: Negative FCF of $35.2 million in 2019 was the result of delayed FDA ANDA approvals, customer pushback of key product launches and customer transition of certain TEVA items. Fitch anticipates a return to positive cash generation in 2020, owing primarily to contributions from the Teva OTC acquisition, the normalized lower capital spending and the lack of select products caused by the Bionpharma issue. Debt maturities are light, with no significant maturities until 2024. On April 30, 2020, PLDH amended its ABL facility, increasing capacity on the line of credit to $60 million from $40 million. The facility increases liquidity to provide a buffer for COVID-19 response, strategic investments and capital allocation. As of March 31, 2020, the issuer had $25.4 million outstanding on the revolver. In accordance with Fitch's Recovery Rating methodology, issue ratings are derived from the IDR and the relevant RR, Fitch's recovery analysis assumes a going-concern enterprise value for a reorganized firm of approximately $302.4 million. The analysis employs a restructured EBITDA of $50.6 million, representing a reorganization scenario incorporating the performance of the Teva OTC acquisition. Fitch assumes the scenario would include a reduction in the ongoing cost structure and select but not significant asset sales. The company would likely exit or shutter small unprofitable business lines. An EBITDA multiple of 6.0x is used to calculate the enterprise value. This is at the lower end of the 6.0x‒7.0x range Fitch types uses for smaller, high-yield rated pharmaceutical firms. This may be slightly conservative, given the relatively less-scrutinized pricing environment and benign litigation profile compared to prescription drug manufacturers. However, PLDH is significantly smaller in scale than its largest peer, Perrigo. Acquisition multiples in the sector range from mid-single digits to mid-teens, depending on the attractiveness of the asset in terms of the exclusivity, diversity and growth potential of the target's product portfolio. However, PLDH acquired the Teva OTC business for roughly 3.0x EBITDA. This is likely due to Teva viewing this business as non-core and focusing on its other segments. The secured first lien T/L has strong recovery prospects in the range of 71% to 90% in a reorganization scenario, which maps to a 'B+'/'RR2' rating, two notches above the IDR. SUMMARY OF FINANCIAL ADJUSTMENTS The secured first lien T/L has strong recovery prospects in a reorganization scenario, which maps to a 'B+'/'RR2' rating, two notches above the IDR. ESG Considerations P&L Development Holdings, LLC has an ESG Relevance Score of 4 for Governance Structure and Financial Transparency due to its private ownership and private financial data, which have a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PHOENIX SERVICES: S&P Alters Outlook to Negative, Affirms 'B' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Radnor, Pa.-based steel mill services provider Phoenix Services International LLC to negative from stable and affirmed its 'B' issuer credit rating and its 'B' issue-level rating on the company's senior secured notes. S&P's '3' recovery rating on the notes remains unchanged. S&P projects that Phoenix Services' credit metrics will weaken and lead S&P adjusted debt leverage to increase to 7x. The rating agency believes it is unlikely that the company will improve its leverage or profitability metrics until 2021. Phoenix's S&P-adjusted gross and EBITDA margins were about 33% and 21%, respectively, on a rolling-12-month (RTM) basis as of March 31, 2020, which compares with its three-year highs of 39% and 31% over the same period in 2017. Furthermore, the company's leverage increased to 6.2x on a RTM basis as of March 31, 2020, from 5.0x over the same period last year. If the company's profitability continues to decline at its current pace, it will likely sustain S&P-adjusted leverage of 7x or above in 2020. This is primarily due to the increase in its cost of sales, which has grown by more than double the improvement in its revenue, due to lower production volumes in global steel, and a lag in Phoenix scaling down its costs. Phoenix is most profitable during periods of high steel production given its volumes-based contracts. Further compounding these issues, S&P projects that the company's revenue and EBITDA will decline by 15%-20% in 2020 because of the COVID-19 pandemic. The company's recent cost restructuring and new long-term contracts may aid in reversing its margin dilution. Phoenix's new operations at three sites in the U.S., Europe, and the United Arab Emirates (UAE) will help increase its profitability. However, S&P does not expect the new projects in Europe and the UAE to ramp up until year-end 2020, thus any positive effects from these facilities during the year will likely be more than offset by the headwinds from the COVID-19 pandemic. The company will likely soon realize an improvement in its EBITDA stemming from its cost-restructuring plan "Phoenix 2.0", which involves personnel reductions, maintenance process improvements, and enhanced production planning. Phoenix has already realized approximately $1.7 million of costs saving as of March 31, 2020. Furthermore, S&P believes the company's business could potentially withstand further margin decline given that its contracts are structured as long-term agreements (eight years in length, on average) and include base fixed fees and price escalators (primarily for labor and fuel costs). Such agreements are typically associated with high switching costs, which support solid retention rates. This has allowed to Phoenix to continue to generate revenue from its customers that have had to curtail a significant portion of their steel production. The negative outlook reflects that Phoenix may be unable to reverse the ongoing decline in its profitability due to stalled demand and rising costs, causing it to sustain adjusted leverage of more than 7x. S&P could lower its rating on Phoenix Services over the next 12 months if: -- The slow but steady decline in its profitability proves to be a permanent, rather than a temporary, change in its business; and -- Leverage rises to the 7x range or higher through 2020 and into 2021. S&P could revise its outlook on Phoenix Services to stable over the next 12 months if: The company's end markets are more resilient than S&P expects and lead to a smaller decline in its business activity and volumes or it sees sufficient incremental EBITDA from its cost restructuring and new contracts such that its gross and EBITDA margins return to their previous levels and cause it to sustain debt leverage of less than 6x. PRESTIGE-PLUS HEALTH: Court Approves Disclosure Statement --------------------------------------------------------- Judge Brenda T. Rhoades has ordered that the Disclosure Statement filed by Prestige Plus Health Services, Inc., is finally approved, and its Plan of Reorganization is confirmed. Prestige-Plus Heath's Plan provides that Class 4 Claimants (Allowed Unsecured Claims) are impaired and will be satisfied as follows: the Debtor will pay monthly payments to the Unsecured Creditor's Pool in the amount of $1,000 for a period of 60 months commencing on the Effective Date. The Debtor will distribute the funds in the Unsecured Creditor's Pool on a quarterly basis commencing 90 days after the Effective Date. The distributions to the Allowed Unsecured Creditor will be pro rata. The Debtor's obligations under the Plan will be satisfied out of the ongoing operations of the Reorganized Debtor. A full-text copy of the Plan of Reorganization dated May 20, 2020, is available at https://tinyurl.com/yazuvdqx from PacerMonitor.com at no charge. Counsel for the Debtor: ERIC LIEPINS ERIC LIEPINS, P.C. 12770 Coit Road, Suite 1100 Dallas, Texas 75251 Tel: (972) 991-5591 Fax: (972) 991-5788 About Prestige-plus Health Services Prestige-Plus Health Services Inc. is a home health agency in Allen, Texas. Prestige-Plus Health Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 19-42366) on Aug. 30, 2019. Eric A. Liepins, P.C., represents the Debtor. QAMM PROPERTIES: Case Summary & 6 Unsecured Creditors ----------------------------------------------------- Debtor: Qamm Properties Inc. PO Box 15526 Clearwater, FL 33766 Business Description: Qamm Properties Inc. is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101 (51B)). The company is the fee simple owner of a building located at 2930 Gulf to Bay Blvd, Clearwater, FL 33759, having an appraised value of $2 million. Chapter 11 Petition Date: June 11, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-04514 Debtor's Counsel: Michael P. Brundage, Esq. BRUNDAGE LAW, P.A. 100 Main Street, Suite 204 Safety Harbor, FL 34695 Tel: (727) 250-2488 Email: mpbrundagelaw@gmail.com Total Assets: $2,219,201 Total Liabilities: $1,383,433 The petition was signed by Vincent Addonisio, president. A copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/UDuNzm RGIS SERVICES: Moody's Lowers CFR to Ca, Outlook Negative --------------------------------------------------------- Moody's Investors Service considers RGIS Services, LLC's missed April 30, 2020 interest payment on its term loan to be a limited default. The company signed an amendment to its credit agreement that extends the grace period for the April missed interest payment and waives the Q1 2020 financial maintenance covenant. RGIS continues to pay interest on its first-lien revolver. Moody's downgraded RGIS' corporate family rating and senior secured credit facilities ratings to Ca from Caa3, and the company's probability of default rating to Ca-PD/LD from Caa3-PD reflecting expectations for a debt restructuring. The outlook remains negative. Moody's took the following rating actions for RGIS Services, LLC: Corporate family rating, downgraded to Ca from Caa3 Probability of default rating, downgraded to Ca-PD/LD from Caa3-PD Senior secured revolving credit facility expiring 2022, downgraded to Ca (LGD4) from Caa3 (LGD4) Senior secured term loan due 2023, downgraded to Ca (LGD4) from Caa3 (LGD4) Outlook, remains negative RATINGS RATIONALE The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The non-food retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in RGIS' credit profile, including its exposure to widespread store closures by its customers have left it vulnerable to these unprecedented operating conditions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on RGIS of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. RGIS' Ca CFR and negative outlook reflect the high likelihood of a debt restructuring as a result of COVID-19-related near-term EBITDA losses and cash burn, approaching debt maturities, and a significant debt burden. While the company had $60 million in unrestricted cash as of March 31, 2020, in Moody's view the company needs additional liquidity to ramp up operations and rapidly re-hire and redeploy employees. RGIS' enterprise value reflects the company's long-standing relationships with its largest customers, leading market share, national footprint in the U.S., and meaningful international diversification. Physical inventory verification is a recurring activity necessary to comply with accounting standards for retailers, which have largely outsourced the service for store counts to third party providers such as RGIS. Nevertheless, Moody's expects a material loss relative to par for the term loan in an eventual restructuring. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Moody's estimates of recovery in an event of potential default deteriorate. The ratings could be upgraded if the company reduced its debt level and addresses its near-term debt maturities. RGIS Services, LLC, a wholly-owned subsidiary of RGIS Holdings, LLC, provides inventory counting services primarily to retailers throughout North America, South America, Asia, Australia, and Europe. Revenues for the twelve months ended March 31, 2020 were approximately $611 million. The company has been majority-owned by the Blackstone Group since 2007. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. RIO HONDO ISD: Moody's Cuts GO Rating to Ba1, Outlook Negative -------------------------------------------------------------- Moody's Investors Service has downgraded Rio Hondo Independent School District's (ISD) GO rating to Ba1 from Baa2. At the same time, Moody's assigns a negative outlook. RATINGS RATIONALE The downgrade to Ba1 reflects the district's significantly constrained operating flexibility, resulting in a material decline in operating reserves after poor enrollment projections and the lack of expenditure controls. The rating also incorporates the district's current reliance on short term cash borrowing for operations, as well as an elevated debt burden. Ongoing student enrollment declines will continue to limit the district's ability to effectively budget for future fiscal years, given that state funding is correlated with enrollment. The rating further reflects the district's small and rural tax base and below-average wealth levels. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The coronavirus crisis is not a key driver for this rating action. Moody's does not see any material immediate credit risks for Rio Hondo ISD caused by the pandemic. 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 district changes, Moody's will update the rating and/or outlook at that time. RATING OUTLOOK The negative outlook reflects the uncertainty regarding the district's ability to balance operations given the lack of prudent expenditure management and the need for cash flow borrowing. The outlook also reflects the expectation that reserves will remain narrow reserves over the medium term. The ability to demonstrate a trend of structural balance and build operating reserves will be key to future rating reviews. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Sustained trend of operating surpluses strengthening reserve and liquidity levels - Significant economic expansion, coupled with reduction in debt burden FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Further deterioration of liquidity requiring Increased reliance on short-term borrowing for cash flow - Inability to maintain balanced operations and grow reserves - Significant increase in the district's debt burden LEGAL SECURITY The bonds are secured by an annual ad valorem tax, levied against all taxable property in the district without legal limitation as to rate or amount. PROFILE Rio Hondo Independent School District is located in Cameron County (Aa3), the southernmost county in Texas (Aaa stable), approximately 23 miles north of Brownsville (Aa3) and the national boundary with Mexico (Government of, Baa1 negative). Serving a population of approximately 10,100, Rio Hondo educates 1,671 students from pre-kindergarten through twelfth grade. METHODOLOGY The principal methodology used in this rating was US Local Government General Obligation Debt published in September 2019. ROLLING MEADOWS: Fitch Affirms BB+ Rating on $16MM 2012 Bonds ------------------------------------------------------------- Fitch Rating has affirmed the 'BB+' rating on the following bonds issued on behalf of Wichita Falls Retirement Foundation Project, d/b/a Rolling Meadows (RM): -- $16.08 million Red River Health Facilities Development Corporation, TX first mortgage revenue bonds (Wichita Falls Retirement Foundation Project), series 2012. The Rating Outlook is Stable. SECURITY The bonds are secured by a gross revenue pledge, a mortgage and a debt service reserve fund. KEY RATING DRIVERS Sound Financial Profile: Adept cost management has allowed Rolling Meadows to maintain sound profitability despite the stagnant independent living census. Due to its relatively small revenue base, Rolling Meadows is sensitive to fluctuations in occupancy. Consistent profitability and ample liquidity represent key credit strengths, providing flexibility for rental agreement facilities like Rolling Meadows. Challenging Operating Environment: Fitch attributes Rolling Meadows' stagnant independent living unit (ILU) occupancy over the past several years to low service area population growth, moderate competition, and the trend of seniors aging in place within their residences. Rolling Meadows' strong payor mix and its ability to increase fees provide some level of mitigation to its census decline. Long-Term Liabilities Improve: For fiscal 2019, Rolling Meadows' leverage (7.6x debt/net available) and debt burden (1.6x maximum annual debt service [MADS] coverage) are trending towards 'BBB' category medians of 7.1x and 1.9x. Fitch expects these capital metrics to continue to improve based on the lack of new debt issuance plans and assuming Rolling Meadows is able to maintain profitability consistent with recent history. However, Rolling Meadows' 24 years average age of plant could call for sizeable debt issuance that would negatively affect long-term liabilities. Asymmetric Risk Factors: There are no asymmetric risk factors affecting this rating determination. RATING SENSITIVITIES The Stable Outlook reflects Fitch's expectation that Rolling Meadows will successfully navigate the current operating environment and return to levels near those of fiscal 2019. Fitch anticipates that margins will decrease in the second quarter of fiscal 2020, if not further due to the disruption from the coronavirus outbreak, and financial market uncertainty may change the liquidity profile. However, given its strong financial profile, Rolling Meadows has a high degree of headroom at the 'BB+' rating. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained liquidity such that days cash on hand remains greater than 550 days. -- MADS coverage sustained at greater than 2.0x. -- Improved ILU occupancy that supports further operational growth. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Liquidity that is sustained at less than 400 days cash on hand. -- Addition of future debt that impacts leverage metrics. -- Should economic conditions decline further than expected from Fitch's current expectations for economic contraction or a second wave of infections and longer lockdown periods across the parts of the country occur, Fitch would expect to see an even larger GDP decline in 2020 and a weaker recovery in 2021. This could add rating pressure for Rolling Meadows, given its already weaker occupancy levels. CREDIT PROFILE Rolling Meadows is a type D (rental) continuing care retirement community located in Wichita Falls, TX (2018 population 104,576), approximately 130 miles northwest of the Dallas-Fort Worth (DFW) metroplex. Wichita Falls is the primary population center between DFW and Oklahoma City (OK) and is home to the Sheppard Air Force Base. The Rolling Meadows 25.2-acre gated community includes 167 ILUs (ILUs, cottages and apartments), 86 skilled nursing facility (SNF) beds and 22 memory care units. Rolling Meadows provides home health agency services for its residents on a fee for service basis. The recent outbreak of coronavirus and related government containment measures worldwide has created an uncertain environment for the entire healthcare system in the near term. While Rolling Meadows' financial performance through the most recently available data has not indicated any impairment, material changes in revenue and cost profiles will 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. SERVICE AREA REMAINS CHALLENGING AND COMPETITIVE ILU occupancy has remained stagnant in the high 70% range since 2017 and equaled 79% the first quarter of 2020 (ending March) The soft occupancy for ILU's was driven by additional competition that opened in the market in 2017. Rolling Meadows continues to market to improve occupancy and leadership has continued to keep the facility operating positively despite weak occupancy. Assisted living unit (memory care) has improved since the opening of the Pines in 2017. Occupancy was 91% for the first quarter of 2020. Rolling Meadows has seen an impact on SNF occupancy, which dipped to 66%, primarily driven by the impacts of coronavirus. Rolling Meadows operates with a moderate amount of competition in its 50-mile service area, and has strong hospital affiliations and a five-star CMS rating. Fitch expects the competitive market conditions to endure. PROFITABILITY SUPPORTS AMPLE LIQUIDITY Rolling Meadows continued its history of strong operating performance in fiscal 2019 and the first quarter of fiscal 2020 (ended March) as reflected in a net operating margin of 24.2 and 23.0, respectively and operating ratio of 86.1% and 84.7%, respectively, continuing to outpace the BIG medians of 3.8% and 100.7%. Since opening in 2017, ALU service fees have grown to become the highest contributor to the community's net operating revenues with SNF contributing the second largest portion. Rolling Meadows has maintained ample liquidity over a number of years. For fiscal 2019 and the first quarter of fiscal 2020, Rolling Meadows' liquidity measured a healthy 672 days cash on hand (DCOH) and 585 DCOH, respectively. Liquidity remains as a credit strength for Rolling Meadows as the BIG median equates to 312 days. The decline in liquidity in the first quarter of fiscal 2020 is due to the investment markets being affected. Cash/debt of 75.1% at March 31, 2020 is similarly strong in relation to the 33.0% BIG median. HIGH AVERAGE AGE OF PLANT LIMITS LONG-TERM LIABILITY PROFILE Rolling Meadows debt consists of $16.08 million in outstanding fixed-rate debt and the recently acquired fixed-rate bank debt ($2.3 million outstanding). There is no exposure to swap or derivative instruments. Rolling Meadow's debt profile has remained in line with BIG category medians. Debt/net available at March 31, 2020 of 7.3x compared with the 10.3 BIG median. Cash funding of future renovations or expansions may support further improvement in leverage over the medium term as existing debt is amortized. Rolling Meadows MADS represents14.3% of fiscal YTD March 31, 2020 revenue and is adequate in relation to the 16.7% BIG category median. Total average age of plant as of March 31, 2020 of 24 years is high in relation to the 11.9 year BIG median. Average age of plant has averaged 23.6 years over the last five years. Rolling Meadows has continued to invest in the facilities and expects capital spending at a level approximating depreciation. 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). RRNB 8400 LLC: Seeks to Hire Villa & White as Counsel ----------------------------------------------------- RRNB 8400 LLC seeks authority from the U.S. Bankruptcy Court for the Western District of Texas to employ Villa & White LLP, as counsel to the Debtor. RRNB 8400 LLC requires Villa & White to: (a) assist and advise the Debtor relative to its operations as a debtor-in-possession, and relative to the overall administration of this Chapter 11 case; (b) represent the Debtor at hearings to be held before this Court and communicate with its creditors regarding the matters heard and the issues raised, as well as the decisions and considerations of this Court; (c) prepare, review, and analyze pleadings, orders, operating reports, schedules, statements of affairs, and other documents filed and to be filed with this Court by the Debtor or other interested parties in this Chapter 11 case; advise the Debtor as to the necessity, propriety and impact of the foregoing upon this Chapter 11 case; and consent or object to pleadings or orders on behalf of the Debtor; (d) assist the Debtor in preparing such applications, motions, memoranda, adversary proceedings, proposed orders and other pleadings as may be required in support of positions taken by the Debtor, as well as preparing witnesses and reviewing documents relevant thereto; (e) coordinate the receipt and dissemination of in formation prepared by and received from the Debtor and the Debtor's accountants, and other retained professionals, as well as such information as may be received from accountants or other professionals engaged by any official committee; (f) confer with the professionals as may be selected and employed by any official committee; (g) assist and counsel the Debtor in its negotiations with creditors, or Court-appointed representatives or interested third parties concerning the terms, conditions, and import of a plan of reorganization and disclosure statement to be proposed and filed by the Debtor; (h) assist the Debtor with such services as may contribute or are related to the confirmation of a plan of reorganization in this Chapter 11 case; (i) assist and advise the Debtor in its discussions and negotiations with others regarding the terms, conditions, and security for credit, if any, during this Chapter 11 case; (j) conduct such examination of witnesses as may be necessary in order to analyze and determine, among other things, the Debtor's assets and financial condition, whether the Debtor has made any avoidable transfers of its property, and whether causes of action exist on behalf of the Debtor's estate; and (k) assist the Debtor generally in performing such other services as may be desirable or required pursuant to the Bankruptcy Code. Villa & White will be paid at the hourly rate of $250. Vi On May 3, 2020, Villa & White was paid $25,000 by RRED Corporation. Both the Debtor and RRED Corporation are wholly owned by Mr. Robert Kane. Of the $25,000, a total of $12,500 was applied to the outstanding fees owed to Villa & White for services performed on the Debtor's behalf in the first bankruptcy case. The other $12,500 was applied to fees outstanding in a separate but related bankruptcy case. The remaining $5,000 owed to Villa & White has been waived. RRED Corporation also paid the Firm an additional $1,717 to the Firm which was used to pay the filing fee. Villa & White will also be reimbursed for reasonable out-of-pocket expenses incurred. Morris E. "Trey" White III, partner of Villa & White LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Villa & White can be reached at: Morris E. "Trey" White III, ESq. 1100 NW Loop 410, Suite 802 San Antonio, TX 78213 Tel: (210) 225-4500 Fax: (210) 212-4649 E-mail: treywhite@villawhite.com About RRNB 8400 LLC RRNB 8400 LLC is a privately held company based in New Braunfels, Texas. The Company previously sought bankruptcy protection on Dec. 2, 2019 (Bankr. W.D. Tex. Case No. 19-52855). RRNB 8400 LLC, based in New Braunfels, TX, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50884) on May 4, 2020. In the petition signed by Robert Kane, managing member, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Morris E. "Trey" White III, Esq., at Villa & White LLP,, serves as bankruptcy counsel to the Debtor. S.MYERS FARMS: Hires Carmody MacDonald as Counsel ------------------------------------------------- S.Myers Farms, LLC, seeks authority from the U.S. Bankruptcy Court for the Southern District of Illinois to employ Carmody MacDonald P.C., as counsel to the Debtor. S.Myers Farms requires Carmody MacDonald to: a. advise the Debtor with respect to its rights, power and duties in this case; b. assist and advise the Debtor in its consultations with any appointed committee relative to the administration of this case; c. assist the Debtor in analyzing the claims of creditors and negotiating with such creditors; d. assist the Debtor with investigation of the assets, liabilities and financial condition of Debtor and reorganizing the Debtor's business in order to maximize the value of the Debtor's assets for the benefit of all creditors; e. advise the Debtor in connection with the sale of assets or business; f. assist the Debtor in its analysis of and negotiation with any appointed committee or any third party concerning matters related to, among other things, the terms of a plan of reorganization; g. assist and advise the Debtor with respect to any communications with the general creditor body regarding significant matters in this case; h. commence and prosecute necessary and appropriate actions and/or proceedings on behalf of Debtor; i. review, analyze or prepare, on behalf of Debtor, all necessary applications, motions, answers, orders, reports, schedules, pleadings and other documents; j. represent the Debtor at all hearings and other proceedings; k. confer with other professional advisors retained by Debtor in providing advice to Debtor; l. perform all other necessary legal services in this case as may be requested by Debtor in this Chapter 11 proceeding; and m. assist and advise the Debtor regarding pending arbitration and litigation matters in which the Debtor may be involved, including continued prosecution or defense of actions and/or negotiations on Debtor's behalf. Carmody MacDonald will be paid at these hourly rates: Partners $305 to $410 Associates $200 to $275 Paralegals/Law Clerks $150 to $175 As of the Petition Date, the Debtor paid Carmody MacDonald the amount of $5,625.46 for services performed prior to the Petition Date. Carmody MacDonald is currently holding the sum of $3,874.54 as a retainer. Carmody MacDonald will also be reimbursed for reasonable out-of-pocket expenses incurred. Thomas H. Riske, partner of Carmody MacDonald P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their/its estates. Carmody MacDonald can be reached at: Thomas H. Riske, Esq. Robert E. Eggmann, Esq. CARMODY MACDONALD P.C. 120 S. Central Avenue, Suite 1800 St. Louis, MO 63105 Tel: (314) 854-8600 Fax: (314) 854-8660 E-mail: ree@carmodymacdonald.com thr@carmodymacdonald.com About S.Myers Farms S. Myers Farms, LLC, based in Edwardsville, IL, filed a Chapter 11 petition (Bankr. S.D. Ill. Case No. 20-30570) on June 3, 2020. The Hon. Laura K. Grandy oversees the case. Carmody MacDonald P.C., serves as bankruptcy counsel to the Debtor. The petition was signed by Richard Scott Myers, authorized representative. In its petition, the Debtor disclosed $564,150 in assets and $1,334,837 in liabilities. SAGICOR FINANCIAL: Fitch Affirms 'BB' IDR & 'BB-' Sr. Debt Rating ----------------------------------------------------------------- Fitch Ratings has affirmed Sagicor Financial Company Limited's Long-Term Issuer Default Rating at 'BB' and SFCL's senior debt ratings at 'BB-'. The Rating Outlook is Stable. KEY RATING DRIVERS Fitch's current assessment of the impact of the coronavirus pandemic, including its economic impact, is based on a set of ratings assumptions. These assumptions were used by Fitch to develop pro forma financial metrics for SFCL that Fitch compared to both ratings guidelines defined in its criteria and relative to previously established Rating Sensitivities for SFCL. The ratings affirmation with a Stable Outlook for SFCL reflects Fitch's pro forma analysis and expectation that SFCL will continue to perform in line with rating expectations. Its rating actions follows Fitch's recent action to revise the rating outlook on the U.S. life insurance industry to negative. Fitch's primary concerns over the near term include the decline in interest rates, equity market declines, increases in credit losses, and rating migration. Longer term, SFCL's credit profile remains vulnerable to a prolonged, steep macroeconomic downturn and sustained low interest rates. Fitch expects deterioration in SFCL's capital metrics and financial performance from the coronavirus, including increased credit defaults and ratings migration on the investment portfolio over the near term. Fitch's pro forma analysis for SFCL shows the impact of the asset stresses does not result in a breach of key rating downgrade sensitivities. Fitch's current expectation is that the impact of coronavirus, while material, is manageable for SFCL due largely to the company's strong capital position and improved liquidity resulting from the Alignvest Acquisition II transaction. Longer term, concerns around a potentially lower for longer interest rate scenario will negatively affect SFCL and peers in terms of pressure on capital and earnings. Fitch considers SFCL's holding company liquidity, which includes cash and cash equivalents of $405 million as of March 31, 2020, to be ample relative to annual financial debt interest expense of approximately $38 million and debt maturities of approximately $93 million in 2020. SFCL has the next debt maturity of $320 million occurring in 2022. SFCL's ratings continue to consider the company's improved business profile, which has been supported by steady growth in earnings and assets in investment grade jurisdictions, particularly the company's U.S. operations over the last few years. Fitch's view on business profile also considers the operating and economic environments of two of its main insurance subsidiaries in Jamaica and Barbados, both of which have below-investment grade sovereign ratings. SFCL has very high capital exposure and concentrations in below-investment-grade sovereign debt, which are primarily used to meet local regulatory requirements and match local liabilities. The ratings also consider SFCL's strong and stable profitability, and macroeconomic challenges associated with low interest rates. KEY ASSUMPTIONS Fitch used the following key assumptions, which are designed to identify areas of vulnerability, in support of the pro-forma ratings analysis discussed above: -- Decline in key stock market indices by 35% relative to Jan. 1, 2020. -- Increase in two-year cumulative high yield bond default rate to 16%, applied to current non-investment grade assets, as well as 12% of 'BBB' assets. -- Both upward and downward pressure on interest rates, with spreads widening (including high yield by 400 basis points) coupled with notable declines in government rates. -- Capital markets access is limited for issuers at senior debt levels of BBB and below. -- A COVID-19 infection rate of 5% and a mortality rate (as a percent of infected) of 1%. RATING SENSITIVITIES The ratings remain sensitive to any material change in Fitch's Rating Case assumptions with respect the coronavirus pandemic. Periodic updates to its assumptions are possible given the rapid pace of changes in government actions in response to the pandemic, and the pace with which new information is available on the medical aspects of the outbreak. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A material adverse change in Fitch's Ratings Assumptions with respect to the coronavirus impact. -- Significant deterioration in the economic and operating environments and sovereigns of Jamaica, Trinidad, and Barbados, which would lead to a material decline in operating performance and/or credit profile of SFCL's investment portfolio. -- Deterioration in key financial metrics, including consolidated MCCSR falling below 180% and financial leverage exceeding 50% and ROE below 5% on a sustained basis. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A material positive change in Fitch's Ratings Assumptions with respect to the coronavirus impact. -- A positive rating action is prefaced by Fitch's ability to reliably forecast the impact of the coronavirus pandemic on the financial profile of both the U.S. life insurance industry and SFCL. -- No material deterioration in economic and operating environments and sovereigns of Jamaica, Trinidad, and Barbados resulting from the coronavirus situation. -- Deployment of capital proceeds from the AQY transaction to grow operations in investment grade jurisdictions. -- Decline in financial leverage ratio below 25% (adjusted to exclude non-controlling interests from capital). Stress Case Sensitivity Analysis -- Fitch's more severe Stress Case assumes a 60.0% stock market decline, two-year cumulative high yield bond default rate of 22.0%, high yield bond spreads widening by 600 basis points and more prolonged declines in government rates, heightened pressure on capital markets access, a COVID-19 infection rate of 15.0% and mortality rate of 0.75%. -- The implied rating impact under the Stress Case would be a downgrade by no more than one notch. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. SAINT JAMES APARTMENT: Einung Buying Remaining Assets for $3.2M --------------------------------------------------------------- Saint James Apartment Partners, LLC, asks the U.S. Bankruptcy Court for the District of Nebraska to authorize the sale of some of its remaining assets to John D. Einung for $3.2 million. After evaluating various strategic alternatives with its counsel and advisors, the Debtor concluded that the best mechanism for maximizing the value of its assets for the benefit of the bankruptcy estate is liquidation of its assets. The Debtor seeks authority in the Motion to sell the Assets. It believes that it is in the Estate's best interest to sell the Assets. The Debtor, through its Real Estate Broker, has been Marketing the Assets. In addition, independent of contacts through the Broker, the Debtor has been separately approached by numerous potential bidders interested in the Debtor's assets and has provided information with respect to such assets to the same. The Buyer has offered to pay the Debtor a total of $3.2 million to purchase, free and clear of all liens, claims, encumbrances and interests, the following Assets, pursuant to the Sale Contract: St. James Manor, Lot 1, block 0 Irreg. 3.44 Acres. The Debtor believes that continued marketing of the Assets for a further extended period would yield little additional return and the Debtor would like to finalize the disposition of the Assets expeditiously in order that anticipated distributions to its creditors may be made in a prompt manner. Finaly, the Debtor respectfully asks that the Court orders that its order approving the Motion be effective immediately upon entry and that no automatic stay of execution, pursuant to Rule 62 of the Federal Rules of Civil Procedure, or Rules 6004(h) or 6006(d) of the Federal Rules of Bankruptcy Procedure, applies with respect to such order. A copy of the Contract is available at https://tinyurl.com/y9qbltu2 from PacerMonitor.com free of charge. About Saint James Apartment Partners Saint James Apartment Partners LLC, a company engaged in renting and leasing real estate properties, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No. 19-80878) on June 7, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The case is assigned to Judge Thomas L. Saladino. Robert Vaughan Ginn, Esq., is the Debtor's counsel. SHANNON STALEY: Dollar Bank Questions Enterprise Exit Financing --------------------------------------------------------------- Dollar Bank, Federal Savings Bank filed an objection to Shannon Staley & Sons LLC's Disclosure Statement. Dollar Bank points out that as the Debtor acknowledges, the anticipated exit financing from Enterprise Bank is the linchpin of its Plan. Dollar Bank further points out that the Disclosure Statement does not include any commitment letter or other indicia from Enterprise Bank that it has approved the Debtor for a loan in any amount. The Disclosure Statement, according to Dollar Bank, does not set forth the amount of the loan to be made by Enterprise Bank. The Disclosure Statement does not set forth when closing will occur on the loan to be made by Enterprise Bank. Counsel for Dollar Bank: John R. O'Keefe, Jr., Esquire Roger P. Poorman, Esquire METZ LEWIS BRODMAN MUST O'KEEFE LLC 535 Smithfield Street, Suite 800 Pittsburgh, PA 15222 Telephone: (412) 918-1100 jokeefe@metzlewis.com rpoorman@metzlewis.com About Shannon Staley & Sons Shannon Staley & Sons LLC -- https://shannonstaleyandsons.com/ -- is a full-service construction services firm offering on demand construction services, turn key real estate, contract construction services, and property management services. Shannon Staley sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 19-23101) on Aug. 6, 2019, in Pittsburgh, Pa. As of the petition date, the Debtor was estimated to have total assets between $500,000 and $1 million, and liabilities of between $1 million and $10 million. The Hon. Carlota M. Bohm oversees the Debtor's case. Robert O. Lampl Law Office is the Debtor's counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. SHEET METAL: Court Conditionally Approves Disclosure Statement -------------------------------------------------------------- Judge Joel T. Marker has ordered that the Disclosure Statement filed by Sheet Metal Works, Inc., is conditionally approved. June 19, 2020, is fixed as the last day for filing written acceptances or rejections of the Plan and for filing and serving written objections to the Disclosure Statement and confirmation of the Plan. July 2, 2020, at 2:00 p.m. is fixed for the hearing on final approval of the Disclosure Statement (if a written objection has been timely filed) and for the hearing on confirmation of the Plan. Attorneys for Sheet Metal Works: 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 About Sheet Metal Works 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. SIRIUS XM: S&P Rates New $1BB Senior Unsecured Notes 'BB' --------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to New York-based satellite radio operator Sirius XM Radio Inc.'s proposed $1 billion senior unsecured notes due 2030. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 50%) recovery for lenders in the event of a payment default. Sirius XM plans to use the proceeds from the proposed notes to call and repay its 5.375% senior unsecured notes due 2025 ($1 billion outstanding). S&P's 'BB' issuer credit rating and stable outlook on Sirius XM are unchanged because the proposed transaction will not affect its net leverage. S&P expects the company's net leverage will remain in the mid-3x area over the next year, which is comfortably within the rating agency's previously established 3x-4x range for the current rating. The current U.S. recession will have a limited impact on Sirius XM's performance and the company will continue to generate more than $1.5 billion of free operating cash flow in 2020. Subscription revenue (78% of revenue) will be relatively flat over the next year and help to offset a material decline in its advertising revenue (18% of revenue). S&P continues to expect the majority of cash flow will be directed toward dividends and share repurchases in 2020, but the rating agency believes spending will be more modest than in recent years due to the recession. SKLAR EXPLORATION: Taps CR3 Partners as CRO ------------------------------------------- Sklar Exploration Company, LLC and Sklarco, LLC seek approval from the U.S. Bankruptcy Court for the District of Colorado to employ CR3 Partners, LLC as their chief restructuring officer. CR3 Partners will provide the following services: (a) operate Debtors during their Chapter 11 cases and act with authority with respect to all aspects of their day-to-day business activities and operations, including budgeting, cash management and financial management; (b) open and close bank accounts of Debtors; (c) negotiate with Debtors' creditors; (d) hire and terminate non-officer employees of Debtors; (e) review daily operating activity, including purchases and expenditures; (f) prepare budgets for submission to the bankruptcy court and creditors; (g) evaluate liquidity options including restructuring, refinancing, reorganizing or a sale of Debtors' assets; (h) cause Debtors to exercise their rights under any agreements; (i) attend hearings and provide testimony; (j) act as the authorized signor on relevant amendments to petitions and schedules; (k) develop and review monthly operating reports and ensure they are filed on a timely basis with the bankruptcy court; (l) evaluate and pursue any litigation and claims held by the bankruptcy estate; and (m) act as the party with ultimate authority for corporate decisions. The firm's hourly rates are as follows: Partner $625 - $795 Director $450 - $625 Manager $450 Associate $300 The firm's services will be provided mainly by James Katchadurian and Todd Bearup who will charge $725 per hour and $625 per hour, respectively. The retainer fee is $100,000. Mr. Katchadurian disclosed in court filings that CR3 Partners is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: James Katchadurian CR3 Partners, LLC 450 Lexington Avenue, 4th Floor New York, NY 10017 Telephone: (914) 646-9451 Email: james.katchadurian@cr3partners.com About Sklar Exploration Company Sklar Exploration Company, LLC is an independent exploration production company owned and managed by Howard F. Sklar. With offices in Boulder, Colo., Shreveport, La., and Brewton, Ala., Sklar owns interests in oil and gas wells located throughout the United States. Its exploration and production activities have historically focused on the hydrocarbon-rich Lower Gulf Coast basins and in the Interior Gulf Coast basins of East Texas, North Louisiana, South Mississippi, South Alabama, and the Florida Panhandle. Visit https://sklarexploration.com/ Sklar Exploration Company and Sklarco, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Lead Case No. 20-12377) on April 1, 2020. At the time of the filing, Sklar Exploration had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Sklarco disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Elizabeth E. Brown oversees the cases. Debtors are represented by Kutner Brinen, P.C. CR3 Partners, LLC is Debtors' chief restructuring officer. SPECIALTY’S CAFE: Files for Chapter 7 Bankruptcy -------------------------------------------------- San Francisco, California-based Specialty's Cafe and Bakery, Inc., filed a petition for a liquidation under Chapter 7 of the Bankruptcy Code . San Francisco Business Times reports that Specialty's Café and Bakery, known for baking fresh and hot cookies, closed down 55 locations permanently, after 33 years in business. According to bankruptcy filings, the company will sell all assets to pay off creditors. Specialty's Café and Bakery has decided to sell off what it can and close down for good. The company in May posted the following statement on its Web site: "Specialty's Café & Bakery is closing after 33 years of business. Current market conditions attributed to Covid-19 and shelter-in-place policies have decimated company revenues. Our last day of operations will be Tuesday, May 19th, 2020." About Specialty's Café & Bakery Specialty's Café & Bakery serves made-from-scratch and healthy breakfasts, lunches and baked goods and offers convenient, same-day online ordering, business catering, and lunch delivery. San Francisco, California-based Specialty's Cafe and Bakery filed a petition for a liquidation under Chapter 7 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-40954) on May 27, 2020. The Debtor was estimated to have less than $50,000 in assets and at least $1 million in liabilities. The Debtor is represented by: Eric A. Nyberg Kornfield Nyberg Bendes Kuhner & Little E-mail: e.nyberg@kornfieldlaw.com SPEEDWAY MOTORSPORTS: Moody's Cuts CFR to B1, Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded Speedway Motorsports, LLC's Corporate Family Rating to B1 from Ba3, Probability of Default Rating to B1-PD from Ba3-PD, and the senior unsecured notes rating to B2 from B1. The outlook was changed to negative from ratings under review. These actions conclude the review for downgrade that was initiated on March 16, 2020. The downgrade of Speedway's ratings reflects the impact of the coronavirus outbreak which has limited the ability to hold live events with spectators in attendance. While several races were postponed at the beginning of the pandemic, the races have been rescheduled although without fans in attendance for the near term. Moody's projects revenue, EBITDA and cash flow to decline substantially in the near term as a result of lost attendance related revenue. Issuer: Speedway Motorsports, LLC Corporate Family Rating, downgraded to B1 from Ba3 Probability of Default Rating, downgraded to B1-PD from Ba3-PD Senior Unsecured Notes due 2027, downgraded to B2 (LGD4) from B1 (LGD5) Outlook Actions: Issuer: Speedway Motorsports, LLC Outlook, Changed to Negative from Rating Under Review RATINGS RATIONALE Speedway's B1 CFR reflects Moody's expectation that leverage will increase materially in the near term (to over 8X by the end of 2020 from 5.2x as of Q1 2020) and free cash flow will decline as a result of the coronavirus outbreak that has disrupted the ability to hold live events with fans in attendance. Several events were postponed and rescheduled to later in the season, but NASCAR racing resumed on May 17th, 2020. In the near term, races have been held without fans in attendance which has resulted in the loss of attendance and related revenue (food, beverage, and merchandise) which will lead to a substantial decline in EBITDA and cash flow. Races may be held with limited amounts of fans in attendance if the impact of the pandemic subsides over the course of the season, but Speedway remains vulnerable to a prolonged outbreak which could lead to another suspension of NASCAR events. Speedway has also faced multiyear declines in attendance due to reduced fan interest in NASCAR racing. Several changes to the sport have been made to increase fan interest and attract different demographic groups, but reduced fan interest will remain a challenge for the company. While the TV broadcast agreement has offset declines in revenue from other race related segments, the agreements expire at the end of 2024 while the notes mature in 2027. NASCAR Holdings, Inc. acquired the company's larger competitor, International Speedway Corporation, in 2019 which could lead to additional changes in the motorsport industry and elevates uncertainty going forward. Speedway benefits from its market position within the motor sports industry supported by entitlements to 13 NASCAR Cup races and other motor sports events at 8 owned facilities, and broadcast rights under a 10-year NASCAR agreement lasting through 2024. The TV broadcast agreement provides higher broadcast revenue to the company which contributes to EBITDA at a high margin level during normal operating conditions and partly offsets persistent declines in admissions and food, beverage and merchandise revenue. Speedway has generated good free cash flow historically that has been directed in part toward debt reduction, which Moody's expects will continue after the impact from the pandemic begins to subside. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The motor sport sector has been one of the sectors significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Speedway's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Speedway 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 credit implications of public health and safety. The action reflects the impact on Speedway of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. A governance consideration that Moody's considers in Speedway's credit profile is the relatively conservative financial policy. Speedway has consistently used a portion of free cash flow to repay debt. While Speedway will be focused on preserving liquidity in the near term, Moody's expects excess cash on the balance sheet will be used for debt repayment once the pandemic begins to abate. Speedway was previously a public company, but become a private company in 2019. Speedway is owned by members for the Smith family. Speedway's liquidity position is adequate and supported by $95 million of cash on the balance sheet and a $100 million revolving credit facility maturing in 2024, with $50 million drawn as of Q1 2020. In April 2020, Speedway borrowed an additional $45 million against its revolver to increase the amount of cash on the balance sheet, which has left less than $5 million of availability on the revolver. Capital expenditures were projected to be $20 to $30 million in 2020, but will be reduced to preserve liquidity. Historically, Speedway used a portion of cash flow for dividends, but has not made a dividend payment since the company became a private company in September 2019. Cash flow from operations will be substantially impacted by the number of events held in 2020, spectator attendance, and cost saving measures taken as a result of the coronavirus outbreak. If events continue to be held for the remainder of 2020 season, Moody's projects a portion of cash on the balance sheet will be used for debt repayment. Speedway is subject to financial covenants on its credit facility including a total leverage ratio of 5x with additional step downs going forward and an interest coverage ratio of 3x for the life of the credit facility. Moody's expects the cushion of compliance to tighten and an amendment may be required in the near term as a result of the impact of the pandemic. The negative outlook reflects its expectation that revenue, profitability, and cash flow from operations will decline in 2020 due to the coronavirus outbreak's impact on the ability to hold NASCAR events with spectators in attendance. Speedway will be reliant on broadcast revenue as long as events are held without fans and would be materially impacted by a prolonged pandemic that leads to a cancellation of future races. Spectators may be allowed to attend on a limited basis if the coronavirus subsides, but attendance related revenue will likely be below normal levels due to requirements to maintain social distancing. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is not likely in the near term given the impact of the pandemic on the ability to operate NASCAR events with fan in attendance as well as Moody's expectation of a substantial increase in leverage in the near term. However, an upgrade could occur if Debt-to-EBITDA was projected to decrease below 4x. A good liquidity position with a free cash flow to debt ratio in the high single digit percentages would also be required, as well as confidence that the financial policy of the firm would be consistent with a higher rating. A stabilization of fan interest in NASCAR racing would also be required as reflected by attendance revenue growth and positive broadcast viewership trends. The ratings could be downgraded if Debt-to-EBITDA leverage was sustained above 5x due to major development projects or a sustained decline in profitability due to a deterioration in spectator interest in NASCAR. A weak liquidity position or an ability to obtain an amendment to its financial covenants could also lead to a downgrade. The $350 million senior notes are rated B2, one notch below the B1 CFR due to their subordination to the credit facility, which is not rated by Moody's. Speedway Motorsports, LLC, headquartered in Concord, NC, is the second largest promoter, marketer and sponsor of motor sports activities in the U.S. primarily through its ownership of eight major racetracks. NASCAR sanctioned events account for the vast majority of Speedway's revenue. Speedway became a private company in 2019 and is owned by members of the Smith family. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. STAGE STORES: Hires Berkeley Research Group as Financial Advisor ---------------------------------------------------------------- Stage Stores, Inc. and its debtor affiliate, Specialty Retailers, Inc., seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Berkeley Research Group, LLC as financial advisor, effective as of May 10, 2020. The professional services that Berkeley Research Group will render to the Debtors are as follows: (a) provide enhancements to projection model(s) utilized by the Debtors; (b) assist the Debtors with contingency planning and communications with lenders; and (c) provide other assistance as requested. The services provided by the firm will complement, and not duplicate, the services to be rendered by other professionals retained in these chapter 11 cases. The current standard hourly rates for 2020 of the firm's personnel who will work on this engagement are as follows: Managing Director $825 - $1,095 Director $625 - $835 Professional Staff $295 - $740 Support Staff $135 - $260 The firm will also seek reimbursement for reasonable and necessary expenses incurred in connection with these chapter 11 cases, including, but not limited to, reasonable travel expenses, costs of reproduction, research, communications, legal counsel, any applicable sales or excise taxes, and other direct expenses. The firm received unapplied advance payments from the Debtors in the amount of $461,618.50. According to the firm's books and records, during the 90 period prior to the petition date, the Debtors paid the firm $3,373,691.80 in aggregate for professional services performed and expenses incurred. As agreed to with the Debtors, the remainder of the amount will be held as a general retainer as security for post-petition services and expenses. Stephen Coulombe, a managing director of Berkeley Research Group, LLC, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Stephen Coulombe BERKELEY RESEARCH GROUP, LLC 2200 Powell St., Suite 1200 Emeryville, CA 94608 Telephone: (510) 285-3300 About Stage Stores Stage Stores, Inc. (SSI) and its affiliates -- http://www.stagestoresinc.com/-- are apparel, accessories, cosmetics, footwear, and home goods retailers that operate department stores under the Bealls, Goody's, Palais Royal, Peebles, and Stage brands and off-price stores under the Gordmans brand. Stage Stores operates approximately 700 stores across 42 states. Stage's department stores predominately serve small towns and rural communities, and its off-price stores are mostly located in mid-sized Midwest markets. Stage Stores, Inc. and affiliate Specialty Retailers, Inc., sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32564) on May 10, 2020. The petitions were signed by Michael L. Glazer, president and chief executive officer. The Company disclosed $1,713,713,000 of total assets and $1,010,210,000 of total debt as of Nov. 2, 2019. The Hon. David R. Jones is the case judge. The Debtors tapped Kirkland & Ellis LLP as bankruptcy counsel; Jackson Walker L.L.P. as local bankruptcy counsel; PJ Solomon, L.P., is investment banker; Berkeley Research Group, LLC as restructuring advisor; and A&G Realty as real estate consultant. Gordon Brothers Retail Partners, LLC, will manage the Company's inventory clearance sales. Kurtzman Carson Consultants LLC is the claims agent. STAGE STORES: Seeks Approval to Hire Kirkland & Ellis as Counsel ---------------------------------------------------------------- Stage Stores, Inc. and its debtor affiliate, Specialty Retailers, Inc., seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their attorneys. The legal services that Kirkland & Ellis will render to the Debtors are as follows: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; (b) advise and consult the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; (c) attend meetings and negotiate with representatives of creditors and other parties in interest; (d) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (e) prepare pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates; (i) advise the Debtors regarding tax matters; (j) take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; and (k) perform all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases, including: (i) analyze the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyze the validity of liens against the Debtors; and (iii) advise the Debtors on corporate and litigation matters. Kirkland's current hourly rates for matters related to these chapter 11 cases range as follows: Partners $1,075 - $1,845 Of Counsel $625 - $1,845 Associates $610 - $1,165 Paraprofessionals $245 - $460 Per the terms of the Engagement Letter, on January 21, 2020, the Debtors paid $250,000.00 to Kirkland, which, as stated in the Engagement Letter, constituted an advance payment retainer. Subsequently, the Debtors paid to Kirkland additional advance payment retainers totaling $2,400,694.21 in the aggregate. As stated in the Engagement Letter, any advance payment retainer is earned by Kirkland upon receipt; any advance payment retainer becomes the property of Kirkland upon receipt; the Debtors no longer have a property interest in any advance payment retainer upon Kirkland's receipt; any advance payment retainer will be placed in Kirkland's general account and will not be held in a client trust account; and the Debtors will not earn any interest on any advance payment retainer. As of the petition date, the Debtors did not owe Kirkland any amounts for legal services rendered before the petition date. The following is provided in response to the request for additional information set forth in Paragraph D.1. of Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. Sec. 330 by Attorneys in Larger Chapter 11 Cases (the Revised UST Guidelines): a. Question: Did Kirkland agree to any variations from, or alternatives to, Kirkland's standard billing arrangements for this engagement? Answer: No. Kirkland and the Debtors have not agreed to any variations from, or alternatives to, Kirkland's standard billing arrangements for this engagement. The rate structure provided by Kirkland is appropriate and is not significantly different from (a) the rates that Kirkland charges for other non-bankruptcy representations or (b) the rates of other comparably skilled professionals. b. Question: Do any of the Kirkland professionals in this engagement vary their rate based on the geographic location of the Debtors' chapter 11 cases? Answer: No. The hourly rates used by Kirkland in representing the Debtors are consistent with the rates that Kirkland charges other comparable chapter 11 clients, regardless of the location of the chapter 11 case. c. Question: If Kirkland has represented the Debtors in the 12 months prepetition, disclose Kirkland's billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If Kirkland's billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Answer: Kirkland's current hourly rates for services rendered on behalf of the Debtors range as follows: Billing Category U.S. Range Partners $1,075 - $1,845 Of Counsel $625 - $1,845 Associates $610 - $1,165 Paraprofessionals $245 - $460 Kirkland represented the Debtors from January 1, 2019 to December 31, 2019, using the hourly rates listed below. Billing Category U.S. Range Partners $1,025 - $1,795 Of Counsel $595 - $1,705 Associates $595 - $1,125 Paraprofessionals $235 - $460 d. Question: Have the Debtors approved Kirkland's budget and staffing plan, and, if so, for what budget period? Answer: Yes, for the period from May 10, 2020 through September 30, 2020. Joshua A. Sussberg, a partner of Kirkland & Ellis LLP and Kirkland & Ellis International, LLP, disclosed in court filings that the firms are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code, as required by section 327(a) of the Bankruptcy Code. The firms can be reached through: Joshua A. Sussberg, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 E-mail: joshua.sussberg@kirkland.com About Stage Stores Stage Stores, Inc. (SSI) and its affiliates -- http://www.stagestoresinc.com/-- are apparel, accessories, cosmetics, footwear, and home goods retailers that operate department stores under the Bealls, Goody's, Palais Royal, Peebles, and Stage brands and off-price stores under the Gordmans brand. Stage Stores operates approximately 700 stores across 42 states. Stage's department stores predominately serve small towns and rural communities, and its off-price stores are mostly located in mid-sized Midwest markets. Stage Stores, Inc. and affiliate Specialty Retailers, Inc., sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32564) on May 10, 2020. The petitions were signed by Michael L. Glazer, president and chief executive officer. The Company disclosed $1,713,713,000 of total assets and $1,010,210,000 of total debt as of Nov. 2, 2019. The Hon. David R. Jones is the case judge. The Debtors tapped Kirkland & Ellis LLP as bankruptcy counsel; Jackson Walker L.L.P. as local bankruptcy counsel; PJ Solomon, L.P., is investment banker; Berkeley Research Group, LLC as restructuring advisor; and A&G Realty as real estate consultant. Gordon Brothers Retail Partners, LLC, will manage the Company's inventory clearance sales. Kurtzman Carson Consultants LLC is the claims agent. STEVEN BOYUM: Samuelson Buying Eau Claire County Property for $1.3M ------------------------------------------------------------------- Steven A. Boyum and Tracy Boyum ask the U.S. Bankruptcy Court for the District of Minnesota to authorize the sale of their fee title interest in the real property located in Eau Claire County, Wisconsin, Tax Parcel Nos. 012-1055-06, 012-1057-060, 012-1055-04, 012-1 055-03-020, 012-1057-02, 012-1060-05, 012-1063-02, 012-1063-04, 012-1063-05, 012-1063-06, and 012-1066-0, to William Samuelson for $1,321,000. The Debtors executed and delivered to United Prairie Bank a Mortgage dated Sept. 21, 2015, covering property located in Eau Claire County, Wisconsin, securing all present or future obligations to United Prairie Bank, up to a maximum principal amount of $2,774,000. The Mortgage was recorded with the Office of the Eau Claire County Recorder on Sept. 21, 2015, as Document No. 1120828. The Debtors estimate that the value of the property is $1,625,000. They valued the property, together with other land, at $1,625,000 in the Schedules, and is aware that United Prairie Bank obtained an appraisal, which valued the property, together with other land. The parties agree that Bank must release its lien on the property for a sale at the price of $1,321,000. The offer to purchase is in excess of the Debtors' valuation and the Bank's appraisal. The sale of the Debtors' interest in the real property will be free and clear of all liens, claims and encumbrances, and all valid liens, claims and encumbrances, if any, will attach to the proceeds of sale of the subject property in order of priority. The Debtors intend to sell the property to the Buyer pursuant to their Purchase Agreement for $1,321,000. Subject to Court approval, the sale will be closed on May 1, 2020, or as specified in the Purchase Agreement. They believe the sale, as proposed, is in the best interest of all creditors of the estate and should be approved. A hearing on the Motion is set for June 19, 2020 at 10:00 a.m. The objection deadline is June 14, 2020. A copy of the Agreement is available at https://tinyurl.com/y9lenofm from PacerMonitor.com free of charge. Steven A. Boyum and Tracy Boyum sought Chapter 11 protection (Bankr. D. Minn. Case No. 18-32309) on July 23, 2018. The Debtor tapped David C. McLaughlin, Esq., at Fluegel Anderson McLaughlin & Brutlag, as counsel. STREBOR SPECIALTIES: Vapco Buying Equipment for $142K ----------------------------------------------------- Strebor Specialties, LLC, asks the U.S. Bankruptcy Court for the Southern District of Illinois to authorize the sale of the following equipment: (i) an equipment valued at $390,940, (ii) a Box Truck valued at $4,000; and (iii) two Sullivan Palatek 25D4 Compressors that were inadvertently omitted from the schedules but are valued by the Debtor at approximately $10,000, to Vapco Products, Inc. for $142,000, subject to higher and better offers. In its schedules filed with the Bankruptcy Court, the Debtor lists various assets including the Equipment. Due to the COVID-19 pandemic and market fluctuations, it has made the difficult decision to cease operations and liquidate its assets in an orderly fashion for the benefit of its creditors. After marketing its assets to various entities, the Debtor engaged in good-faith negotiations and have secured an offer from the Purchaser to purchase the Equipment for $142,000. By the Motion, the Debtor asks the Court to enter of an Order authorizing it to (i) sell to the Purchaser, or its assigns, pursuant to Sections 363(b) and (f) of the Bankruptcy Code free and clear of all liens, claims and encumbrances to the highest bidders at the Sale Hearing, if competing bids are received; and (ii) authorizing Debtor to execute and deliver any documents, agreements, bills of sale, deeds, certificates of title, affidavits, or other similar instruments to facilitate the Sale of the Equipment to the successful bidders at the Sale. The Debtor has determined that, in its business judgment, the sale of the Equipment to the Purchaser at the Sale is in the best interest of its Chapter 11 estate and its creditors. The proposed Sale of the Equipment will be for fair and reasonable consideration, and is in good faith in that the Sale will be an auction with the opportunity for competitive bidding if objections or competing bids are received. To facilitate a prompt closing of the Sale(s), the Debtor ask that the time period set forth in Bankruptcy Rule 6004(h) be waived and that the order approving the Sale hereunder be immediately final. About Strebor Specialties Strebor Specialties, LLC, is a Dupo, Illinois-based small to medium liquid filler with capabilities to do aerosol, liquid, and oil filling. Strebor Specialties sought bankruptcy protection (Bankr. S.D. Ill. Case No. 20-30262) on March 10, 2020. The petition was signed by its manager, Otto D. Roberts, Jr. At the time of the filing, the Debtor disclosed total assets of $1,031,229 and total liabilities of $6,285,898. The Debtor tapped Steven M. Wallace of Silver Lake Group, Ltd., as its attorney. SUNGARD AS: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Investors Service downgraded Sungard AS New Holdings III, LLC's corporate family rating to Caa2 from Caa1 and its probability of default rating to Caa2-PD from Caa1-PD. Moody's affirmed the B2 rating on Sungard AS's $50 million senior secured first lien term loan and $50 million senior secured first lien delayed draw term loan. Moody's downgraded Sungard AS's $305 million senior secured second lien term loan to Caa3 from Caa2. The company's $50 million asset-based revolver is unrated. The outlook change to negative from stable reflects Moody's view of Sungard AS's continuing execution risks associated with reversing continuing revenue and EBITDA declines and delivering sustainable future growth, driving debt leverage (Moody's adjusted) lower, and reducing rising cash flow deficits. Downgrades: Issuer: Sungard AS New Holdings III, LLC Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD Corporate Family Rating, Downgraded to Caa2 from Caa1 Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Caa3 (LGD4) from Caa2 (LGD4) Affirmations: Issuer: Sungard AS New Holdings III, LLC Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD2) Outlook Actions: Issuer: Sungard AS New Holdings III, LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE Sungard AS's Caa2 CFR reflects the continued execution difficulties associated with reversing declining revenue and EBITDA trends following the company's 2019 exit from bankruptcy, and the risk that elevated leverage and a constrained liquidity position will lead to distressed debt exchanges. While its 2019 Chapter 11 restructuring reduced balance sheet debt and cash interest expense, Moody's expects continued rising debt leverage (Moody's adjusted) in 2020 and elevated leverage in 2021. Constrained liquidity will reduce Sungard AS's flexibility to support a more protracted business improvement effort compared with Moody's initial expectations. Capital market access is critical before year-end 2020 if Sungard AS is to avoid a looming liquidity hurdle when $100 million expected to be outstanding under its combined first lien term loans becomes due February 2022. The company's $50 million revolver (unrated) matures in December 2021 if loan balances remain under Sungard AS's first lien term loans. The company's continuing weak operating trends are the result of a combination of factors, including historically poorly executed business evolution strategies by previous management teams in a rapidly changing and competitive industry, pricing pressures, underinvestment and weak sales force productivity. Sungard AS reduced its capital spending levels over the years as reflected in its steady mix shift to less capital-intensive service offerings in disaster recovery as a service, including in partnership with Amazon's AWS segment, as well as other asset-light, managed services and consulting offerings. However, the continued revenue declines are contributing to persistent cash flow deficits. The company's revenue base is supported by contractual relationships, a recognizable brand, solid market positioning in the recovery business, and relatively low customer concentration. Moody's expects debt/EBITDA (Moody's adjusted) to increase by year-end 2020 to around 5.5x, but turnaround uncertainties could drive this higher. Moody's also expects continued EBITDA margin pressures in 2020 due to difficulties associated with improving bookings and churn trends, offset partially by continued and aggressive headcount reductions and additional cost cutting actions. While the pace of turnaround efforts has fallen short of Moody's previous expectations, Sungard AS's new management team is updating and evolving its business strategy with a comprehensive focus on value creation over a longer time period. Moody's expects revenue to decline at a mid-teens rate in 2020, but the company notes that some of this top line decline is tied to low margin business. The company's pre-Chapter 11 revenue had been in steady decline for several years as well. At the time of its bankruptcy exit Moody's had expected flattening revenue in 2020 predicated on a faster and more successful execution of a multi-year turnaround plan that focused on churn reduction, bookings growth improvement and continuous cost cutting initiatives. Despite Sungard AS's efforts to date, Moody's expects negative free cash flow of around $60 million to $70 million in 2020. While this negative free cash flow reflects some non-recurring spending that will enable long term costs savings, visibility into improved free cash flow trends in 2021 is limited. As of March 31, 2020, Sungard AS had $39 million of cash on hand. While Moody's notes that the company's cash balances have typically averaged higher and nearer $70 million during most weeks in 2020 compared with the Q1 2020 ending level, projected cash on hand and available liquidity at year-end 2020 would be insufficient to address near term debt maturities. The accommodating payment-in-kind nature of some the company's post-Chapter 11 interest obligations have been supportive. Moody's projects the company to have negative free cash flow over the next 12 to 18 months and only adequate liquidity from the combination of its existing cash balances and the remainder of its undrawn delayed draw term loan. The company's $50 million first lien revolver (unrated) also aids external liquidity but has a springing maturity of 60 days prior to the maturity date of either the first lien loan or the second lien loan if there are outstanding balances remaining under those loans. Sungard AS is currently in compliance under the terms of its first lien term loan, which contains a total net leverage ratio and a minimum liquidity covenant. The instrument ratings reflect both the probability of default of Sungard AS, as reflected in the Caa2-PD probability of default rating, an average expected family recovery rate of 50% at default, and the loss given default assessment of the debt instruments in the capital structure based on a priority of claims. The senior secured first lien term loans are rated B2 and reflect first-priority claims on non-current assets. The senior secured second lien term loan is rated Caa3, one notch below the Caa2 CFR and reflects its subordination to the first lien term loan and asset-based revolver. The first lien term loan is rated one notch lower than its LGD model implied rating reflecting uncertainty related to the amount and treatment of unsecured non-debt obligations in a default scenario. The asset-based senior secured revolver (not rated) has a first-priority claim on US accounts receivable and unrestricted US cash balances. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The global communications infrastructure industry globally is expected to be more resilient than many sectors as the spread of the coronavirus outbreak widens and the global economic outlook deteriorates. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The negative outlook reflects the risk that Sungard AS may not be able to reverse declining revenue and EBITDA trends, improve bookings and churn trends, reduce cash flow deficits, or meet debt maturities well in advance of maturity dates. Sungard AS's credit metrics will remain under pressure over the next two years given rising debt leverage and constrained liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: Moody's could consider a rating upgrade if revenue growth turns positive, free cash flow approaches 5% of debt and leverage (Moody's adjusted) is below 4.75x (all on a sustained basis). The rating could be downgraded if the probability of default increases or expected recoveries in a default scenario decline due to further profitability or liquidity erosion. The principal methodology used in these ratings was Communications Infrastructure Industry published in September 2017. Sungard AS New Holdings III, LLC is a provider of disaster recovery services and managed IT services. TELEPHONE & DATA: Fitch Affirms BB+ LongTerm IDRs, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' Long-Term Issuer Default Ratings for Telephone and Data Systems, Inc. and its subsidiary United States Cellular Corp. In addition, Fitch has affirmed the 'BB+'/'RR4' senior unsecured debt ratings for both companies. USM's ratings consider the consolidated ratings at TDS. The Rating Outlook remains Stable. Fitch has also assigned a 'BB+' rating to TDS' new $200 million Co-bank term loan. TDS' ratings are driven by the company's conservative balance sheet and ample liquidity with significant cash balances and high availability under the revolving facilities. After adjusting for FS activity, the core telecom leverage as of March 31, 2020 is 1.5x, including distributions from non-controlling interests. The $2.5 billion of total debt has a substantial majority in bonds with far-dated maturities. Low leverage and high liquidity compensate for the company's weaker market position in wireless and negative FCF expected over the next few years on account of increased capital investments. KEY RATING DRIVERS Coronavirus Impact: Fitch believes telecom is a low risk sector relative to some other sectors, as there are recurring payments from subscription-based plans and wireless is generally a high priority consumer payment. While Fitch expects increased demand for internet connectivity will have a positive effect on TDS's revenues both on wireless and wireline sides, lower equipment and roaming revenue will drag wireless revenues down in 2020. The company's commitment to FCC's Keep Americans Connected Pledge, waiver of overage fees and providing free broadband services to certain customer segments are likely to impact EBITDA in the short term. Wireless Market Position: Fitch's ratings incorporate the smaller size of TDS' main operating unit, USM, in a market that is now dominated by three national wireless operators, after Sprint combined with T-Mobile on April 1, 2020. This concern is mitigated by TDS' financial flexibility, arising from its low leverage and healthy liquidity position. For the LTM period ending March 31, 2020, USM posted a net loss of 53,000 postpaid subscribers versus 10,000 net loss last year, largely due to lower gross adds and higher churn in the connected devices. As of March 31, 2020, the total postpaid subscriber base is approximately 4.44 million. Leverage Well within Fitch's Expectations: Fitch estimates TDS' gross leverage at 1.5x as of March 31, 2020, including a portion of partnership distributions received from non-controlling entities (1.8x without). In calculating gross leverage, Fitch has assumed deconsolidation of financial services activity related to USM's EIP receivables, making adjustments for FS assets and corresponding debt. Fitch assumes a capital structure for FS operations, which is strong enough to indicate that FS activities are unlikely to be a cash drain on industrial operations over the rating horizon. The FS entity's target capital structure takes into account the relative quality of EIP receivables and its funding and liquidity. Fitch believes TDS's low debt leverage provides the company with ample room within its current rating sensitivities to incur additional debt over the next few years required to fund the aggressive investment plan it has laid out. Fitch believes these investments are critical to maintain and enhance the network infrastructure, including investment in the 5G network, in order to remain competitive in the long run. Strong Liquidity Profile: The ratings of TDS and USM reflect the current strong liquidity position owing to substantial cash balances, a conservative balance sheet, undrawn revolving credit facilities and long-dated maturities. As of March 31, 2020, TDS has a cash balance of $421 million and a combined revolver availability of $700 million, excluding outstanding letters of credit. The strong liquidity position compensates for the negative FCFs that Fitch expects over the rating horizon due to increased capital spending and spectrum purchases. These expenditures are expected to be largely funded through debt. TDS borrowed $125 million on its securitization facility in April 2020 and $50 million on the new $200 million credit facility in March 2020 to fund spectrum spending and fiber investments on the TDS telecom side. Spectrum Acquisitions: USM continues to build on its millimeter Wave spectrum inventory as the company obtained spectrum licenses in 37, 39 and 47 GHz auctions concluded in March 2020. These are in addition to 2019 acquisitions of two-millimeter Wave auctions in 24 GHz and 28 GHz bands. Fitch believes USM will augment its spectrum portfolio through acquisitions of licenses in the mid-band category in the upcoming FCC auctions. These, along with the 600 MHz spectrum acquired in 2017, will form the basis for the company's 5G network and subsequent commercial launch. Cable Underpins Growth Strategy: Cable continues to register robust revenue growth as broadband connections grew 10% in first quarter 2020, including those acquired from the Continuum acquisition closed in December 2019. As of March 31, 2020, the broadband penetration is at 44%. The company is also making significant investments in fiber both in and out-of-territory. TDS entered the cable business with its acquisition of Baja Broadband in 2013, and subsequently acquired BendBroadband in 2014. Noncore Assets Provide Flexibility: While Fitch believes TDS considers USM's 5.5% stake in the Los Angeles partnership and its tower portfolio as core assets, Fitch also recognizes that these assets provide the company with financial flexibility should the need arise as it pursues growth in the cable industry. DERIVATION SUMMARY TDS's ratings reflect USM's weaker competitive position in the U.S. wireless industry that is dominated by three national players, viz. AT&T Inc. (A-/Stable), Verizon Communications Inc. (A-/Stable), and T-Mobile USA, Inc. (BB+/Stable), based on scale and the number of subscribers. However, this rating concern is largely compensated by TDS's strong liquidity profile and high financial flexibility supported by relatively high cash balances and $700 million in combined revolver availability, as of March 31, 2019, excluding nominal outstanding letters of credit as well as its generally longer dated maturity profile. Additionally, the EIP receivables securitizations provide an additional funding opportunity. Fitch expects FCF to be negative for the next several years due to the elevated capital investments, but the company has the ability to roll back capex if needed, a significant part of the capex is success-based. On the wireline side, TDS is comparable with rural focused incumbent wireline providers such as Windstream Services, LLC and Frontier Communications, Inc. However, compared with these companies, TDS has a conservative balance sheet with lower leverage profile, stronger liquidity position, long-dated maturities and greater financial flexibility. No country-ceiling, parent/subsidiary or operating environment aspects affect the rating KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Fitch expects 2020 revenue to decline in mid-to-high single digits largely driven by a decline in equipment revenue and roaming revenue. 2020 EBITDA is expected to be only moderately lower than 2019 levels since the equipment revenue does not generate operating profit. 2020 EBITDA will be negatively affected by an increase in bad debts during the year and decline in roaming revenue. For 2020, Fitch has assumed steady wireless service ARPU, lower gross additions and postpaid churn in the 1.0%-1.1% range. - Fitch expects a rebound in 2021 with revenue growing in mid-to-high single digit, followed by a revenue growth in low-to-mid single digits in subsequent years. Churn returns to historical levels as stores reopen. Wireline and Cable revenues are projected to grow in low-to-mid single digits. - Fitch expects the overall EBITDAR margins to average near 26% during the rating horizon. - Capex intensity in 2020 is assumed to be elevated near mid-20s as the company ups spending on modernization of networks, deployment of VoLTE and 5G and fiber expansion within and outside footprint. Additionally, Fitch has assumed spectrum acquisition spend of roughly $300 million, including acquisitions of 37, 39 and 47 GHz spectrum in auctions concluded in March 2020. - Share repurchases of $25 million each year are assumed over the forecast. - To determine core telecom leverage, Fitch has applied a 1:1 debt to equity ratio to the company's handset receivables. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Fitch believes that competitive factors and TDS's relative position in the wireless industry would not likely allow a positive rating action in the near term. Factors that could, individually or collectively, lead to negative rating action/downgrade: Longer term, Fitch believes TDS's and USM's ability to grow revenues and cash flows while competing effectively against much larger national operators is key to maintaining their 'BB+' IDRs. In addition, if core telecom leverage (total debt/EBITDA) calculated including credit for material wireless partnership distributions in EBITDA, approaches 3.5x, or FFO net leverage approaches 3x, a negative action could be contemplated. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity Profile: TDS has a cash balance of $421 million as of March 31, 2020. Of this, USM holds approximately $285 million. In addition, the company has a substantial combined availability of approximately $697 million, net of LCs, on the revolvers at TDS and USM. USM also has a $200 million EIP receivables securitization facility, which has $75 million of availability after the company drew $125 million in April 2020 to fund the spectrum payment. The ratings at TDS and USM reflect the current strong liquidity position and financial flexibility owing to substantial cash balances, availability under revolving credit facilities, and generally long-dated maturities, offsetting pressures from expected negative free cash flows over the forecast. Debt Structure Updates: In January 2020, TDS entered into a $200 million term loan credit facility with Co-bank and TDS. The company borrowed $50 million on the facility in March, and the remaining delayed draws are permitted through Jan. 6, 2021. The main financial covenants on the term loan facility require total consolidated interest coverage to be no less than 3.0x and the total consolidated leverage ratio to be no more than 3.25x. TDS also entered into new revolving facilities and terminated the previous revolving facilities at TDS and USM. The new revolvers retained the original commitments of $400 million and $300 million at TDS and USM, respectively and effectively extended maturities two years out from 2023 to 2025. As of March 31, 2020, TDS and USM had a borrowing capacity $399 million and $298 million under their respective revolving facilities. The main financial covenants in the TDS revolving facility and USM's revolving and term loan facilities require total consolidated interest coverage to be no less than 3.0x and the total consolidated leverage ratio to be no more than 3.25x. In October 2019, USM prepaid $100 million of principal payment on its 2022 Co-bank term loan. The remaining balance of approximately $81 million (outstanding balance as of March 31, 2020) is due in 2022. The earliest notes maturity at TDS is in 2045 ($116 million) and at USM is in 2033 ($544 million face value). SUMMARY OF FINANCIAL ADJUSTMENTS Adjustments for outstanding equipment installment plan receivables related to financial services operations (assessed using a debt-to-equity ratio of 1x) resulted in a reduction of the level of debt used in calculating Fitch's leverage metrics by approximately $500 million (year-end 2019). REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). TOOJAY'S MANAGEMENT: 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 TooJay's Management LLC, according to court dockets. About TooJay's Management TooJay's Management LLC is a South Florida-based deli, bakery and restaurant chain that serves guests in Palm Beach and Broward counties, the Treasure Coast, the West Coast of Florida, the Orlando area and The Villages. TooJay's offers homemade comfort foods, handcrafted sandwiches and made-from-scratch soups, salads, and baked goods. It operates 16 locations in different counties in Florida. TooJay's Management and 31 affiliates sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-14792) on April 29, 2020. TooJay's Management was estimated to have $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the bankruptcy filing. The Hon. Erik P. Kimball is the case judge. Akerman LLP, a law firm based in Fort Lauderdale, Fla., originally served as Debtors' legal counsel. Debtors later hired Berger Singerman LLP as counsel, replacing Akerman. Getzler Henrich & Associates, LLC is Debtor's financial advisor. TRAVEL LEADERS: Moody's Lowers CFR to Caa3, Outlook Negative ------------------------------------------------------------ Moody's Investors Service downgraded its ratings for Travel Leaders Group, LLC, including the company's Corporate Family Rating to Caa3 from Caa1, Probability of Default Rating to Caa3-PD from Caa1-PD, and the first lien senior secured credit facility rating, including revolving credit facility and term loan to Caa3 from Caa1. The outlook was changed to negative from rating under review. This action concludes the review for downgrade initiated on March 23, 2020. The downgrade to Caa3 CFR and negative outlook reflects extremely challenging conditions in the corporate and high-end leisure travel sectors due to the COVID-19 pandemic and resulting travel restrictions. Despite the company's actions to right-size the cost structure, the precipitous decline in revenue and earnings expected over the next several months will lead to a highly leveraged capital structure, which Moody's deems unsustainable in the near-term. The company's current monthly cash burn of around $20-25 million and the uncertainty around the rebound in travel, raises the company's default risk significantly. If the company is not successful in shoring up its near-term liquidity or if the demand for travel does not begin to come back in the coming months, TLG may face the risk of a default or debt restructuring by the end of 2020. Downgrades: Issuer: Travel Leaders Group, LLC Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Senior Secured Bank Credit Facility, Downgraded to Caa3 (LGD3) from Caa1 (LGD3) Outlook Actions: Issuer: Travel Leaders Group, LLC Outlook, Changed to Negative from Rating Under Review RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The global travel sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. Specifically, Travel Leaders is 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 Travel Leaders of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. TLG's Caa3 CFR reflects the company's highly leveraged capital structure, elevated risk of a potential default and severe operating headwinds due to drop off in travel volumes. The near-term recovery in travel volumes is highly uncertain as international borders remain largely closed and global demand for air travel will continue to be significantly curtailed. The risk of more challenging downside scenarios remains high, and the severity and duration of the pandemic and travel restrictions remain highly uncertain, particularly given the threat of an increase in the number of infections as social distancing practices across the US and other countries become less stringent in upcoming weeks and beyond. Over the last several months the company has taken significant cost actions while also processing large number of customer refunds. Moody's expects revenue to be down by more than 90% in the second quarter of 2020 and the company will burn an additional $40 million of cash. As a result, Moody's believes that the company will face heightened risk of near-term default if liquidity is not proactively addressed. The negative outlook reflects Moody's expectation of weakened credit metrics and liquidity, compounded by the uncertainty of the time and trajectory of the recovery. A debt restructuring or an event of default is very likely if the company does not proactively address its capital structure or shore-up its near-term liquidity. Moody's expects TLG to have very weak liquidity over the next 12-15 months. Sources of liquidity consist of approximately $90-95 in unrestricted balance sheet cash as of May 30, 2020 and its expectation for cash flow deficit of $20-25 million per month. The company's $50 million revolving credit facility has been fully drawn, net of $10 million of letters of credit outstanding. The company has also significantly curtailed its capital spending plan and will manage its working capital needs, assuming no meaningful customer refund activity in the coming months. TLG's bank agreement contains a leverage ratio financial covenant which is applicable to the revolver only if it is drawn more than 35%. The agreement also permits temporary suspension of this covenant if a "Travel MAC," as defined in credit agreement occurs. The Travel MAC was in effect as of the end of Q1 2020 and will likely be in effect in Q2 2020. Furthermore, the company has the ability to incur additional debt, up to approximately $22 million under its existing credit agreement, which could be utilized for additional liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if continued deterioration in liquidity, including sustained negative free cash flow and inability to secure additional financing leads to a default or formal debt restructuring. The ratings could also be downgraded if Moody's recovery expectations on the company's debt instruments were to weaken. Moody's could consider an upgrade if the company demonstrates improvement in operating results, reduces its indebtedness to a more sustainable level and maintains at least adequate liquidity. TLG, headquartered in New York, NY manages corporate, leisure, franchise, and consortia travel operations under its network of diversified divisions and brands. Brands include Tzell Travel Group, Protravel International, Nexion, Vacation.com, Travel Leaders, Cruise Holidays, Cruise Specialists, and Altour. Certares is the largest shareholder of TLG. The company generated revenues of approximately $876 million for the last twelve months ended March 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. TUESDAY MORNING: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------------- The Office of the U.S. Trustee on June 9, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Tuesday Morning Corp. and its affiliates. The committee members are: 1. Nourison Industries, Inc. c/o Jonathan Stern, CFO 5 Sampson Street Saddle Brook, NJ 07663 201-368-6900 ext. 2246 – office phone 917-359-1448 – mobile Jonathan.stern@nourison.com 2. Three Hands Corp. c/o Shant Anan, President 13259 Ralston Avenue Sylmar, CA 91342 818-833-1200 818-833-1212 – fax shanta@threehands.com 3. The CIT Group/Commercial Services, Inc. c/o Joseph Lux, Director 201 South Tryon Street, 3rd Floor Charlotte, NC 28202 704-339-3085 704-339-2864 – fax Joe.lux@cit.com 4. Peacock Alley, Inc. c/o Shane Jorgenson, COO 2050 Postal Way Dallas, TX 75212 214-689-3775 sjorgenson@peacockalley.com 5. Popular Bath c/o Bill Hall, CFO Vice President 808 Georgia Avenue Brooklyn, NY 11207 718-484-4469 718-927-1463 – fax Bill.hall@popularbath.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 Tuesday Morning Corp. Tuesday Morning Corporation -- http://www.tuesdaymorning.com/-- is a closeout retailer of upscale home furnishings,housewares, gifts and related items. It operates under the trade name "Tuesday Morning" and is 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 six 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; Stifel, Nicolaus & Co., Inc. as investment banker; A&G Realty Partners, LLC as real estate consultant; and Great American Group, LLC as liquidation consultant. Epiq Corporate Restructuring, LLC is the claims and noticing agent. TWIFORD ENTERPRISES: Plan Admin Taps SLBiggs as Accountant ---------------------------------------------------------- Randy L. Royal, the Plan Administrator of Twiford Enterprises, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Wyoming to employ SLBiggs, a division of SingerLewak LLP, as accountant to the Plan Administrator. Twiford Enterprises requires SLBiggs to: (a) assist in preparing and filing tax returns and reports with the Internal Revenue Service, as appropriate, and consistent with the confirmed Plan; (b) assist the Plan Administrator in preparing and filing reports as required by the confirmed Plan; and (3) attend to those matters requiring accounting services, including records of income and expense as necessitated by the confirmed Plan. SLBiggs will be paid at these hourly rates: Mark Dennis $175 to $300 David Dennis $175 to $300 Associates $100 SLBiggs will also be reimbursed for reasonable out-of-pocket expenses incurred. Mark Dennis partner of SLBiggs, a division of SingerLewak LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. SLBiggs can be reached at: Mark Dennis SLBIGGS, A DIVISION OF SINGERLEWAK 2000 S. Colorado Blvd., Tower II, Suite 200 Denver, CO 80222 Tel: (303) 694-6700 About Twiford Enterprises Twiford Enterprises, Inc., is a privately held company in Glendo, Wyoming in the crop farming industry. The Company owns in fee simple 2870 acres of land and buildings located at 642 Horseshoe Creek Road Glendo, Wyoming having an appraised value of $4.65 million. Its gross revenue amounted to $2.23 million in 2017 and $2.38 million in 2016. Twiford Enterprises filed a Chapter 11 bankruptcy petition (Bankr. D. Wyo. Case No. 18-20120) on March 9, 2018. In its petition signed by its secretary, Jack Twiford, the Debtor disclosed total assets of approximately $7.68 million and $6.49 million in total debt. The Hon. Cathleen D. Parker is the case judge. The Debtor hired Stephen R. Winship, Esq., at Winship & Winship, P.C., as counsel. UFC HOLDINGS: Moody's Assigns B2 Rating on New $150MM Term Loan --------------------------------------------------------------- Moody's Investors Service assigned UFC Holdings, LLC's (UFC) proposed $150 million add on term loan a B2 rating. All other ratings including the B2 corporate family rating (CFR), the B2 rating for the existing senior secured credit facility, and stable outlook remain unchanged. The net proceeds of the add on term loan and cash from the balance sheet will be used to repay the $150 million revolver balance outstanding. Pro forma leverage will remain unchanged at 6.4x (including Moody's standard adjustments) as of Q1 2020. UFC also announced the upsize of the revolver to $212.75 million from $162.75 million. Cash on the balance sheet will be approximately $205 million pro forma for the transaction as of May 31, 2020. The following is a summary of the actions: Issuer: UFC Holdings, LLC $150 million Senior Secured 1st lien Term Loan due 2026, assigned a B2 (LGD4) RATINGS RATIONALE UFC's B2 CFR reflects already high leverage levels which Moody's expects will increase to over 8x by the end of 2020. In addition, cash flow from operations will decrease as long as the pandemic impacts the ability to hold live events with spectators in attendance. UFC resumed MMA events in May 2020 with additional fights scheduled in the near term. Attendance revenue will be impacted if events continue to be held without fans, but the revenue from this segment represents a modest portion of UFC's total revenue. UFC benefits from its long-term media and pay per view (PPV) rights agreement with ESPN which provides for a substantial portion of total revenue and EBITDA. This contractual arrangement will limit the impact of the pandemic as long as events can be held, even if there are no fans in attendance. The US media agreement with ESPN, which lasts until the end of 2025, led to a material increase in revenue and EBITDA in 2019 with modest contractual increases going forward. UFC also entered into an agreement with ESPN for the domestic residential PPV rights until the end of 2025. While the media rights deal led to a significant increase in profitability, the PPV agreement has dramatically reduced the volatility of the business which had been impacted by last minute changes to the fight card historically. UFC also benefits from its position as the largest mixed martial arts promotion company, although Moody's expects competition in the industry will continue to increase. The limited required space and number of fighters for MMA events allow events to be rescheduled easier than other major sporting events. 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. Live sports have been one of the sectors significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in UFC's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and UFC 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 credit implications of public health and safety. A governance consideration that Moody's considers in UFC's credit profile is the company's highly aggressive financial policy. UFC has maintained very high leverage levels and issued additional debt, including $465 million of additional term loans, to help take out preferred equity in September 2019. UFC has also directed free cash flow to dividends and has authorized additional dividends going forward. Moody's expects UFC will maintain a good liquidity profile over the next twelve months with a pro forma cash balance of $205 million as of May 31, 2020 and full access to a recently upsized $212.75 million revolving credit facility that matures in April 2024. UFC is projected to generate positive free cash flow if events are able to be held as expected (even without fans in attendance), but liquidity would deteriorate if UFC is unable to hold events due to the pandemic. Moody's expects excess cash flow will likely be used for dividends or future acquisitions. In January 2020, the board of directors authorized up to $300 million in distributions to equity holders with $196 million paid out in Q1 2020. The term loan is covenant lite and the revolver contains a 6.5x maximum first lien leverage ratio when more than 35% of the revolver is drawn. Moody's anticipates that the cushion of covenant compliance will remain adequate in the near term. The stable outlook reflects Moody's expectation for declines in revenue and EBITDA in the near term and elevated leverage levels as a result of the pandemic. However, Moody's expects free cash flow to remain positive if events continue to be held as a result of long-term media agreements which provides material support to performance, even without spectators in attendance. Leverage will likely decline below 7x in 2021 from contractual media increases and a gradual recovery in attendance revenue. However, a prolonged suspension of future events due to the coronavirus outbreak could lead to a negative rating action as leverage and liquidity would be substantially impacted. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade is unlikely as long as the coronavirus impacts the ability to hold live events with fans in attendance. However, an upgrade could occur if leverage declined below 5x (including Moody's adjustments) with continued positive revenue and EBITDA growth as well as a good liquidity profile. Confidence would also be needed that the financial policy of the company would be consistent with a higher rating. Moody's could downgrade UFC's ratings if leverage was expected to be sustained above 7x (including Moody's adjustments) in 2021 due to the coronavirus or equity friendly transactions. Additional leveraging debt increases prior to a recovery from the pandemic would also likely result in negative rating activity, as would a weak liquidity position or elevated concern about UFC's ability to remain in compliance with its financial covenants. UFC Holdings, LLC is the world's leading promoter of mixed martial arts (MMA) sports competition events. MMA is an individual combat sport with international appeal, which combines techniques from various combat sports and martial arts, including boxing, karate, judo, jiu-jitsu, kickboxing, and wrestling and is governed by the "Unified Rules of MMA". Endeavor Operating Company, LLC is the majority shareholder. Revenues for 2019 were well over $800 million. The principal methodology used in this rating was Business and Consumer Service Industry published in October 2016. UNIVISION COMMUNICATIONS: S&P Rates $2BB First-Lien Term Loan 'B' ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '3' recovery rating to Univision Communications Inc.'s proposed up to $2 billion first-lien term loan due 2026 and up to $610 million first-lien revolving credit facility due 2025. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for lenders in the event of a payment default. The company plans to use the proceeds from the term loan to repay a portion of its existing term loan. S&P's 'B' issuer credit rating and stable outlook on Univision remain unchanged because the proposed transaction will not affect its net leverage. VOYAGER AVIATION: DBRS Lowers LongTerm Issuer Rating to BB(low) --------------------------------------------------------------- DBRS, Inc. has downgraded the Long-Term Issuer Rating of Voyager Aviation Holdings, LLC (Voyager or the Company) to BB (low) from BB, while also downgrading the Company's Long-Term Senior Debt rating to B (high) from BB (low). Concurrently, DBRS Morningstar also downgraded the Long-Term Issuer Rating of the Company's wholly owned subsidiary, Voyager Finance Co. (VFC), to BB (low) from BB and its Long-Term Senior Debt rating to B (high) from BB (low). The trend on all ratings is Negative. DBRS Morningstar has removed the ratings from Under Review with Negative Implications where they were placed on March 31, 2020. The one-notch differential between the Long-Term Issuer Ratings and the Long-Term Senior Debt ratings reflects the substantial encumbrance of the Company's aircraft portfolio as collateral for secured funding. The Intrinsic Assessment (IA) for the Company is BB (low), while its Support Assessment is SA3. The Support Assessment for VFC is SA1. KEY RATING CONSIDERATIONS The rating actions consider DBRS Morningstar's expectation that the global economic downturn brought on by the Coronavirus Disease (COVID-19) and the dramatic adverse effect on the global aviation industry will pressure Voyager's ability to rebuild its earnings generation ability in 2020. Voyager's customer base is primarily comprised of large, national flag carriers, which is considered a credit positive in the current environment. To date, Voyager's customers have remained current on their lease payments. However, given customer concentrations in the modestly sized aircraft portfolio, should a material portion of the customer base request rent deferrals, cash flows could be meaningfully impacted and credit costs rise should airline customers not resume paying. Although we see Voyager as having the necessary asset management capabilities to manage lease transitions, we expect that the transitioning of repossessed aircraft will be more lengthy and costly than in the pre-coronavirus market. Moreover, we expect that higher impairments on the value of current technology aircraft, especially widebody aircraft, have increased, creating a further potential headwind to earnings. The ratings also consider Voyager's improved leverage as the Company utilized proceeds from its fleet positioning to deleverage the balance sheet, as well as its predominately secured funding profile which is aligned with the remaining lease term of the aircraft portfolio. The Negative trend considers DBRS Morningstar's expectation that the recovery in global passenger volumes will be gradual and lengthy, likely leading to a sustained period of airline bankruptcies and subdued demand for aircraft, which will create meaningful headwinds for aircraft lessors, including Voyager. RATING DRIVERS The Negative trend on the ratings is likely to remain in place during the duration of the coronavirus disease related downturn. Voyager's ratings would be downgraded should the challenging operating environment created by the coronavirus pandemic lead to a reduction in demand for air travel resulting in notable rent deferrals, customer defaults or early lease terminations that pressure revenue and cash flow generation. A sustained increase in leverage would also result in a ratings downgrade. The trend on the ratings would return to Stable should Voyager generate solid operating performance while airline passenger travel volumes start tracking towards pre-pandemic levels reducing the likelihood of rent deferrals or early lease terminations. RATING RATIONALE DBRS Morningstar considers the strategic partnership agreement entered into in 2018 between Voyager and Amedeo as fortifying and enhancing Voyager's franchise. Under the agreement, Amedeo provides management, aircraft support and asset selection for Voyager in return for a management fee. In DBRS Morningstar's view, Voyager benefits from the broader aircraft transaction sourcing capabilities through the Amedeo platform and potentially better disposition results. The management team is comprised of well-seasoned industry participants and has been stable over the last number of years. Importantly, DBRS Morningstar sees Amedeo as having solid technical and asset management capabilities in widebody aircraft across both Airbus and Boeing models. Established in 2013, Amedeo is a global leader in investing and managing widebody aircraft with approximately $7.0 billion of assets under management. Beginning in 2018, Voyager undertook a strategic initiative to reposition its aircraft portfolio to reduce concentrations to certain customers, regions and aircraft type. While executing on this initiative, the Company did not alter its core focus on holding a portfolio of mostly young, technologically advanced, in-demand widebody aircraft with well-developed operator bases. Following the disposition of 12 aircraft during this period, the repositioning initiative is complete, and the Company expects to begin deploying the harvested capital into new aircraft acquisitions sourced through the strategic partnership with Amedeo. Given the impact of the repositioning on the recent financial performance of Voyager, DBRS Morningstar sees growth in the aircraft portfolio that anchors an improving trajectory in earnings as important evidence that the expected benefits of the Amedeo partnership are being captured. While the repositioning has been a positive for Voyager's risk profile, the Company's earnings have been adversely impacted. While DBRS Morningstar has considered this to be temporary and expected earnings generation to be restored to a positive trajectory as Voyager deployed capital to purchase additional aircraft, the severe downtown in the global aviation industry brought on by the coronavirus disease is creating a substantial headwind that will likely delay the restoration of earnings. For 2019, the Company's net loss of $67.0 million compared to net income of $1.4 million in 2018, reflects lower rental revenue due to the smaller aircraft portfolio, losses on the sale of aircraft and losses on derivatives. Subsequently the Company reported a $13.4 million loss in 1Q20 driven by losses on derivatives. Voyager's aircraft portfolio is modest in size and comprised of young widebody aircraft with long attached leases (no lease expirations until 2022) to flag or sovereign-backed carriers, which in the current challenging environment is a positive for the risk profile. Importantly, Voyager has no orders for new aircraft with either of the original equipment manufacturers. The absence of a new aircraft order book, as well as minimal aircraft placement risk over the near term also are considered favorable for Voyager's risk profile. However, the portfolio remains concentrated by customer, geography and aircraft type than many of its industry peers, which exposes Voyager to potential losses should an airline customer default or rent deferrals be requested from a material portion of the customer base. To date, the rental deferrals granted by Voyager are expected to be neutral to the Company's expected earnings and cash flows for 2020. Moreover, DBRS Morningstar notes that any potential losses on the rent deferrals are partially mitigated by security deposits in the form of cash or letters of credit, as well as maintenance reserves held by Voyager. Voyager's balance sheet fundamentals continue to be acceptable with funding reasonably diversified and capitalization appropriately managed. During 1Q20, the Company refinanced its only secured term loan maturing in 2020, with no senior corporate debt maturities until mid-2021 when $415 million of senior debt matures. However, the reliance on secured forms of funding, which limits financial flexibility, is a constraint on the ratings. At March 31, 2020, outstanding debt totaled $1.5 billion, of which 72% was comprised of secured financing, which per DBRS Morningstar methodology is consistent with the current rating. At March 31, 2020, the Company's tangible common equity (TCE) ratio was 19.7%. Over the last five years the Company's average TCE ratio was 18.6%, which is considered "Moderate" per DBRS Morningstar's rating methodology and supportive of the rating. Notes: All figures are in U.S. dollars unless otherwise noted. WATCO COMPANIES: Moody's Confirms B2 CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service confirmed the ratings of transportation and logistics provider Watco Companies, L.L.C., including the corporate family rating at B2, the probability of default rating at B2-PD, and the rating of the $400 million senior unsecured notes due 2023 at Caa1. The ratings outlook is stable. This completes the review for downgrade that was initiated on March 27, 2020. RATINGS RATIONALE The ratings of Watco consider the company's diversified revenue base comprising rail transportation services, port and terminal operations, railcar maintenance and repair services and a growing logistics business. Watco is the second largest short line railroad operator in North America, with 41 railroads in the US and Australia that represent about 50% of Watco's total revenues. Together with the port and terminal operations, the rail transportation services account for the vast majority of Watco's earnings. Despite attractive profits from its rail and terminal operations, consolidated operating margins remain thin. Watco's operating margin weakened to less than 7% in 2019, from around 9% in prior years. Still, management's heightened focus on operational improvements of Watco's existing businesses, including through providing a safer work environment, helps to mitigate the earnings pressure ensuing from a contraction in economic activity in 2020 and to improve operating margins in 2021. Watco's investments in expansion projects can result in significant funding needs, in excess of $100 million per annum historically, even excluding any acquisitions that Watco pursues. Although this caused financial leverage to be elevated at times, Watco demonstrated a willingness and ability to issue issued preferred shares to help fund its investments. Debt/EBITDA was 4.6 times as of December 31, 2019 or 4.2 times if calculated excluding the non-recourse debt that resides at Watco Greensport, L.L.C., a subsidiary of Watco's parent company. Liquidity is adequate. Free cash flows are typically negative although Moody's expects that discretionary capital expenditures will be curtailed in 2020 such that free cash flow could approach breakeven. Net cash flows excluding discretionary capital expenditures are typically positive, however. The availability under Watco's $830 million revolving credit facility is more than $400 million and the headroom under applicable financial covenants will likely remain sufficient. Although Moody's considers the environmental risks of the surface transportation sector to be 'emerging', Watco is somewhat less exposed to environmental risks because revenues from coal shipments and the handling of coal at terminals are fairly moderate. The $400 million senior unsecured notes due 2023 are rated Caa1, two notches below the B2 corporate family rating. This reflects the higher ranking in Moody's Loss Given Default analysis of the $830 million revolving credit facility that is secured by substantially all of the company's assets. The stable ratings outlook is predicated on Moody's expectation that Watco's initiatives to improve the performance of its existing operations will ease the pressure on operating margins in 2020 and will help to increase operating margins over time. In addition, the outlook considers that Watco will continue to pursue a balanced approach to fund its sizeable discretionary investments. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Moody's expects operating margins to be sustained above 8%, Funds from operations/debt to be comfortably above 12.5%, while debt/EBITDA is maintained below 5 times. The ratings could be downgraded if Moody's expects that elevated capital expenditures or a weakening of business conditions cause debt/EBITDA to exceed 6 times, operating margins to be less than 5% or Funds from operations/debt to be less than 10%. The ratings could also be downgraded if availability under the revolving credit facility becomes constrained, including if less than $100 million is available at a time when free cash flow remains negative or if covenant headroom diminishes. The following rating actions were taken: Confirmations: Issuer: Watco Companies, L.L.C. Corporate Family Rating, Confirmed at B2 Probability of Default Rating, Confirmed at B2-PD Senior Unsecured Regular Bond/Debenture, Confirmed at Caa1 (LGD5) Outlook Actions: Issuer: Watco Companies, L.L.C. Outlook, Changed to Stable from Rating Under Review The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. Watco Companies, L.L.C. is the second largest short line railroad operator in the U.S. In addition to rail transportation services, the company provides terminal and port services, supply chain services, as well as rail car maintenance and repair services. Revenues in 2019 were nearly $1.2 billion. Watco Companies, L.L.C. is a privately held company. WATKINS NURSERIES: Tidewater Buying Compost Turner for $10.5K ------------------------------------------------------------- Watkins Nurseries, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Virginia to authorize the sale of any interest held by its estate in a compost turner to Tidewater Mulch and Materials, Inc. for $10,500. The Debtor currently possesses the Compost Turner, a piece of equipment that has not been fully utilized in more than a decade and was no longer maintained on the books and records of Debtor WNI given that it was deemed to have no further use other than scrap metal. To its surprise, the Debtor was contacted by Tidewater Mulch in April of 2020 concerning the possible sale of the Compost Turner. Tidewater Mulch has offered the Debtor $10,500 for the Compost Turner and tendered a check for said amount to the Debtor. The Debtor desires to negotiate the Check and complete the transfer of the Compost Turner free and clear of any valid liens, claims, encumbrances, and interests, with any such valid liens, claims, encumbrances, and interests attaching to the sale proceeds. Such Proceeds will be utilized in the ongoing business operations in accordance with the Court approved budgets. And the transfer would be "as is, where is" with no warranties of any kind. The Debtor submits that sound business reasons justify approval of the proposed sale of the Compost Turner to Tidewater Mulch. As indicated previously, the Compost Turner is not necessary for an effective reorganization, being previously viewed by it as having inconsequential value to its operations. Indeed, the Debtors had ascribed little to any value to the Compost Turner. Therefore, the sale of the Compost Turner for the Offer Price is in the best interest of the Debtor, its Estate, and its creditors. The Debtor asks the Court to waive the 14-day waiting period imposed by Federal Rule of Bankruptcy Procedure 6004(h) to allow it to proceed with the negotiation of the Check immediately upon entry of the Order. About Watkins Nurseries Watkins Nurseries, Inc. -- http://www.watkinsnurseries.com/-- is a wholesale and retail tree nursery, plant center, and landscape design firm established in 1876. It specializes in field-grown trees and shrubs that it produces on over 500 acres of farmland. Virginias Resources Recycled, LLC -- http://www.vrrllc.com/-- is a commercial and residential land clearing, grinding, grubbing and logging company located in Central, Virginia. Watkins-Amelia, LLC is engaged in activities related to real estate. Watkins Nurseries, Virginias Resources and Watkins-Amelia sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-30890) on Feb. 19, 2020. At the time of the filing, each Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Paula S. Beran, Esq., at Tavenner & Beran, PLC, is the Debtor's legal counsel. WAYNE HEALTHCARE: Fitch Affirms BB+ IDR, Outlook Stable ------------------------------------------------------- Fitch Ratings has affirmed Wayne HealthCare's 'BB+' Issuer Default Rating and the 'BB+' long-term rating assigned to series 2019A hospital revenue bonds issued by Darke County on behalf of WH. The Rating Outlook is Stable. The ratings have been removed from Rating Watch Negative. SECURITY The bonds are secured by a pledge of security interest on the gross receipts of the obligated group, a mortgage lien on the hospital, and a debt service reserve fund. ANALYTICAL CONCLUSION The removal from Rating Watch Negative and the affirmation of the 'BB+' rating reflect WH's strong balance sheet, which will help the hospital absorb the near-term operating and portfolio losses stemming from the coronavirus pandemic while maintaining an adequate financial cushion for the rating level. Although there was a significant deterioration in operating performance through the first two quarters of fiscal 2020, operations are expected to rebound relatively quickly given an agreement to transfer all COVID-19 patients to a Premier Health (IDR: A) hospital, which has been set aside for the exclusive treatment of COVID-19 patients. This agreement will allow WH to operate as a 'COVID-19 free' hospital, which should contribute to a robust volume rebound and higher patient volumes going forward. While the 'bbb' financial profile assessment would suggest a higher long-term rating, the 'BB+' rating reflects WH's weak revenue defensibility and midrange operating risk profile assessments. The organization's payor mix is weak, and WH operates in a relatively competitive small and rural service area. The 'BB+' rating also incorporates the risk of the ongoing construction project and WH's dependence on a limited number of physicians for admissions and revenue, which can result in operational volatility. The Stable Outlook reflects Fitch's expectation that WH will maintain adequate leverage and liquidity metrics while it navigates near-term operating disruptions from both the coronavirus pandemic and the construction of the new patient tower. The coronavirus outbreak and related government containment measures worldwide has created an uncertain environment for the entire healthcare system in the near term. While WH's financial position through the most recent available data -- unaudited first quarter data through March 31, 2020 -- has only shown the initial impairment of the pandemic, material changes in revenue and cost profiles are expected in the subsequent months. As the state is reopening to elective procedures, WH's management expects revenues to rebound. 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. KEY RATING DRIVERS Revenue Defensibility: 'bb' Weak Payor Mix in a Competitive Market WH has weak revenue defensibility due to a relatively competitive market and a weak payor mix. Despite a leading PSA market position of over 26% in 2018, WH faces competition from several hospitals in its broader service area, with four similarly sized hospitals and two larger hospitals operating within 40 miles. WH also has a weak payor mix, with a high concentration of government payors and Medicaid and self-pay totaling a high 33% of 2019 gross revenues. Operating Risk: 'bbb' Robust Operating Profile Despite Near-Term Compression WH's operating risk assessment is midrange. WH has seen some volatility in operating performance over the last five years, experiencing significant compression as recently as fiscal 2017, but margins have stabilized over the last two years. Operations are expected to be severely stressed over the near term as WH manages the financial disruptions from the coronavirus pandemic. Nevertheless, operating margins are expected to recover, over the long term. Strategic capital spending plans will remain high over the next two years as WH continues construction on a new patient tower, but other capital needs remain manageable. Financial Profile: 'bbb' Solid Financial Profile throughout the Cycle WH's is expected to maintain solid balance sheet metrics throughout Fitch's forward-looking analysis despite expectations for near-term margin compression and market volatility due to the coronavirus pandemic. As expected, WH's financial position weakened following the increase in debt and the equity contribution related to the new patient tower but remains in line with the 'bbb' financial profile assessment. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS There are no asymmetric risk considerations affecting the rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The successful completion and integration of the construction project; -- Maintenance of operating EBITDA margins at or above 8% that demonstrates a reduction in operating performance volatility; -- A continued strengthening in balance sheet metrics to well above 120% cash-to-adjusted debt; Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A significant decline in liquidity due to either an increase in incremental debt or high capital spending without commensurate growth in cash flow that leads to cash-to-adjusted debt that is sustained below 100%; -- A sustained weakening in operating EBITDA margins to below 7%. -- Should economic conditions decline further from Fitch's current expectations for an economic contraction, or if there is a second wave of infections with longer periods of constrained revenue, Fitch would expect to see an even larger decline in 2020 and a weaker recovery in 2021, resulting in pressure on WH's existing rating. 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 Wayne Hospital d/b/a as Wayne Healthcare is a 104 licensed bed (64 staffed) acute care hospital located in Greenville, OH, which is approximately 50 miles northwest of Dayton, OH. In fiscal 2019, WH had total operating revenues of approximately $67 million. The obligated group consists WH and a professional services group, Wayne Hospital Company Professional Services LLC. Non-obligated affiliates are included within WH and are not material. As of April 2017, WH and Premier Health signed an affiliation agreement for the purposes of collaboration between the two entities. The intent of the collaboration is to enhance development of resources for new facilities and programs, maintain, and provide medical services for the underserved, and to further collaboration and integration between WH and Premier Health. As part of the agreement, Premier Health purchased a 33.3% ownership position in WH for $13 million and has the right to appoint six of the 18 members on WH's board of directors. Premier Health does not collect yearly earnings from WH. The affiliation term runs through April 2024 and allows WH three options at the end of the term: become part of Premier Health; pursue another agreement with Premier Health; or terminate the affiliation, which includes a fair market value buyout price to Premier Health. Premier Health is not obligated on WH's debt and does not provide a guarantee of the debt. Fitch is cognizant that a termination by WH of its affiliation agreement with Premier Health at the end of the current agreement in 2024 would result in a repayment to Premier Health, but does not view it at this time as an asymmetric risk. If WH elects to end their affiliation with Premier Health, a buyout price will be negotiated based on a determined fair market value. REVENUE DEFENSIBILITY WH's payor mix is weak, with Medicaid accounting for an elevated 28.4% of the gross payor revenues and self-pay accounting for another 4.6% as of 2019. The payor mix is noted to have heightened exposure to governmental payors, with approximately 51% attributed to Medicare. Over the last five years, Medicaid and self-pay have combined to average 33% of gross revenues, and Fitch expects WH's combined Medicaid and self-pay payor mix to remain above 30% for the foreseeable future. WH participates in the Hospital Care Assurance Program (HCAP), which provides for additional payments to hospitals that administer a disproportionate share of uncompensated services to the indigent and uninsured. Under HCAP, all Ohio not-for-profit hospitals provide free care at or below the federal poverty guidelines. Net amounts recorded by WH from HCAP totaled approximately $750,000 in 2019. WH is the only acute care hospital within Darke County. WH has a leading primary service area market position of 26% as of 2018. The nearest competing inpatient acute care facility is Miami Valley Hospital, holding a 22% market share (MVH is the flagship hospital of Premier Health). The competitive pressure from Premier is mitigated by the degree of integration with WH. WH faces competition from several other hospitals beyond the county. There are four hospitals of similar size and two hospitals with larger bed counts within 40 miles, Upper Valley Medical Center (also a member of Premier Health) and Reid Health (rated A/Stable). In addition to Premier Health, the Dayton market also includes Kettering Health Network and Dayton Children's Hospital. Outmigration within the county occurs with patients seeking higher acuity services not provided by WH. WH has a high degree of physician concentration, with the top-10 physicians accounted for a high 78% of volume and 47% of revenue as of 2018. This increases revenue volatility due the high reliance on a small number of physicians for a substantial portion of revenues. In April 2017, WH and Premier Health signed an affiliation agreement for the purposes of collaboration between the two entities. As part of the affiliation, Premier Health maintains a 33.3% percent membership interest in WH. The affiliation allows WH numerous benefits including access to Premier Health's executive leadership, ability to participate in board meetings and operations meetings and access to its physician development program. More recently, the affiliation with Premier has benefited WH as Premier has agreed to take all of the hospital's COVID-19 positive patients, allowing WH to operate as "COVID-19 free" going forward. WH is also a member of the Ohio State Health Network, an alliance of 15 rural Ohio healthcare providers and the Ohio State Medical Center that works to improve the quality of care and enhance operational efficiency. WH's PSA characteristics are somewhat mixed although generally stable. Darke County is highlighted by stagnant population trends, an unemployment rate below the state average, and median household income levels in line with the state of Ohio. Agriculture and manufacturing are both major drivers of the regional economy. Manufacturing in particular has seen a sharp decline due to the effect of the coronavirus pandemic and the region's relatively high concentration of manufacturing jobs could lead to deterioration in the payor mix if economic conditions do not improve over the medium term. OPERATING RISK WH's operating cost flexibility is assessed as midrange. While operating EBITDA margins have averaged a good 9.5% over the last five fiscal years, there has been year-to-year volatility, highlighting WH's sensitivity to swings in volume and reimbursement programs. Operating EBITDA was stable in fiscal 2019 at 8.5%, despite a large increase in surgical volumes driven by the acquisition of a Mako robot. Fiscal 2019 revenues and expenses increased by 14.7% and 14.6%, respectively, with the number of orthopedic surgical procedures related to the Mako robot coming in at almost double initial expectations. The growth in surgical volumes in the Mako unit is expected to continue through 2020 despite the temporary pause in elective procedures, but the revenue growth is expected to continue to be offset by related expenses, which precludes the program from having a substantial positive impact on operating margins. The coronavirus pandemic has also greatly accelerated the hospital's expansion of telemedicine services, which will remain a key strategic priority for the hospital going forward. The coronavirus pandemic will significantly pressure WH's operations along with the broader economy. WH will almost certainly show a considerable softening of margins in fiscal 2020, primarily due to the cancelation of elective procedures starting on March 17th, although these losses will be partially offset by CARES Act and related stimulus funds. WH received around $1 million from the first distribution of HHS stimulus funds and opted not to take the Medicare Advance payments as the hospital's cash position remains solid. WH also reduced expenses and furloughed staff in response to the financial pressures and has right-sized their staffing models in order to maintain less staff going forward. Darke County did not see a high number of COVID-19 patients and the expected and prepared for surge did not end up materializing. WH is also benefitting from its affiliation with Premier Health. Beginning in May, all COVID-19 patients that come into WH are transferred to a Premier Health hospital that has been set up for the exclusive treatment of COVID-19 patients. This has enabled WH to close down the all of the specialized units it set up in expectation of a surge and operate as a "COVID-19 free" hospital going forward. This should help to attract patients reluctant to return to a hospital setting now that elective procedures have resumed. Fitch would likely view further integration with Premier Health as a credit positive for WH, due to increased access to the system's size/scale benefits. Patient volumes are expected to recover gradually to normal levels through the remainder of the year; however, Fitch expects that the cumulative losses in the first and second quarter will lead to deterioration in operating margins for fiscal 2020, a trend Fitch fully expects the vast majority of hospitals and health systems in the U.S. will mirror. Despite the expectation for near-term margin compression, Fitch expects WH's operating performance to rebound with operating EBITDA margins between 7%-9% through the cycle. WH's capital expenditure requirements are midrange. Capital spending has been minimal in past years but is expected to remain elevated over the next two years as WH constructs a new three-story patient tower on the existing campus. The capital project was funded by around $40 million in debt and $20 million in equity and will include several renovations to the current facility along with the new patient tower. Construction on the project, which began in 2019, was not materially affected or delayed by the coronavirus pandemic and is expected to be completed in June of 2021. Average age of plant is somewhat high, at 15.3 years at FYE 2019, but is should moderate significantly once the new patient tower is complete. FINANCIAL PROFILE WH's financial profile assessment is midrange. WH has consistently generated positive cash flows that have historically sustained strong balance sheet metrics, as evidenced by cash to adjusted debt averaging 316% from 2015-2018. Following last year's debt issuance and incorporating the first quarter of 2020's operating and portfolio losses stemming from the coronavirus pandemic, balance sheet metrics declined to a still solid 141% cash-to-adjusted debt as of March 31, 2020. Unrestricted cash declined with market volatility to $78 million as of March 31 from $90 million at FYE 2019, but still measured strong at 434 days cash on hand. Despite ongoing capital spending for the patient tower and hospital renovations, WH's balance sheet and leverage metrics remain solid through Fitch's new base case scenario that incorporates Fitch's current estimates of a sharp decline in investment portfolio holdings and financial stress from disrupted operations in 2020. Fitch's analytic expectations are based on the financial metrics after the expected recovery in 2021, which reflect balance sheet metrics that still provide an adequate cushion above the thresholds for the 'bbb' financial profile assessment for a hospital with weak revenue defensibility and a mid-range operating risk profile. The scenario incorporates the expectation that WH will draw down the remainder of the 2019B bonds to support the construction project but does not include any other additional debt. Fitch's forward-looking analysis reflects both an issuer-specific revenue stress and a portfolio sensitivity analysis based on WH's portfolio asset allocation for the current fiscal year and is consistent with Fitch's expectations for economic contraction. Fitch expects a deep economic contraction centered on 2Q20 with a considerable rise in unemployment. Fitch assumes containment measures will begin to be unwound in the second quarter of 2020, allowing for recovery, although with so much depending on the progress of the virus, there is a large degree of uncertainty around its forecasts. Its scenario anticipates that the U.S. GDP will contract sharply in 2020. In the event of the virus being contained during the second half of 2020, Fitch assumes that real GDP growth will bounce back strongly in 2021. Under these assumptions, WH's leverage metrics are expected to remain sufficient for the category assessment. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS There are no asymmetric risk considerations affecting the IDR and revenue bond rating determination. After the issuance of the series 2019A, B&C bonds, WH's total long-term bonded debt is approximately $53 million. Only $3 million of the maximum $15 million of the 2019B bonds has been drawn down to date. Following the full draw down of 2019B bonds, total debt will be approximately $62 million. WH has one swap in place, a fixed to floating rate, with the notional amount being modified to $15 million to hedge the variable rate bank portion of the debt issuance. Morgan Stanley is the counterparty and the swap has a negative termination value of $2.3 million to WH. WH's maximum annual debt service (MADS) is $3.7 million and the fiscal 2019 MADS coverage ratio was 3.2x. WH's financial covenants of 1.2X MADS coverage and 75 days DCOH are tested annually at year-end, it is uncertain at this time whether or not WH will breach its MADS coverage covenant in fiscal 2020. CRITERIA VARIATION N/A. 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). 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). WESTWIND MANOR: K.L. McKelvey Buying Heddles Hideaway for $500K --------------------------------------------------------------- Manor Resort Association, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas to authorize the bidding procedures in connection with the sale of Heddles Hideaway Golf Course to K.L. McKelvey, LLC for $500,000, subject to higher and better offers. The Debtors operate two distinct business segments. Warrior Custom Golf, Inc. focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions, LLC, however, manages affiliates that own golf courses. Warrior Acquisitions is the manager of six entities that own and operate 18 golf courses and parcels of land located throughout California, Florida, Colorado, Iowa, Alabama, North Carolina, South Carolina, Tennessee and Georgia. Warrior Acquisitions' golf courses (i.e. those under its indirect management) serve their local communities and are located in secondary and tertiary markets. Warrior Acquisitions' managed courses generated approximately 267,500 rounds of golf in 2018. Many of the golf courses have additional amenities including golf pro shops, driving ranges, clubhouses, restaurants, bars, swimming pools, private villas and banquet facilities. Warrior Acquisitions' managed courses generated approximately $13 million in annual revenue over the past few years but generated an operating loss of approximately $680,000 in 2018. Warrior Golf Management, LLC ("WGM") is the owner of the Heddles Hideaway Golf Corse and related amenities and parcels of real property located in Spartanburg, South Carolina. Heddles Hideaway consists of a nearly 6,200 yard, 18-hole golf course, maintenance and irrigation facilities, and a 6,500 square foot clubhouse that has facilities available for dining and catering, as well as event facilities capable of accommodating over 200 patrons. While Heddles Hideaway is not subject to any known pre-petition liens or encumbrances, it does serve as the collateral of Serene WG Loan Investors ("DIP Lender") under the Debtors' DIP financing. The sale of Heddles Hideaway remains subject to the terms of the court-approved Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement dated April 2, 2019, as amended, or as may be otherwise agreed by the Debtors and the DIP Lender. Since the commencement of the Chapter 11 Cases, the Debtors have explored numerous avenues for selling their golf courses. After the Petition Date, Chris Charnas, the Debtors golf course consultant, received expressions of interest from members of the local community and other interested parties regarding the sale of Heddles Hideaway. These expressions of interested culminated in an offer to purchase Heddles Hideaway. After fulsome arms'-length negotiations on price and other terms with the Stalking Horse Bidder, WGM entered into an agreement, subject to higher and better offers, to sell Heddles Hideaway to the Stalking Horse Bidder. WGM and the Stalking Horse Bidder have executed their Asset Purchase Agreement dated May 15, 2020. A summary of the principal terms of the Stalking Horse Agreement is as follows: a. Purchaser: K.L. McKelvey, LLC b. Purchase Price: $500,000, subject to higher and better offers c. Assets to be Sold: All of WGM's current right, title and interest in the Real Property, Personal Property, Assumed Contracts, permits, intangibles, entitlements, tradename and trademark, books and records and insurance claims or proceeds with respect to Heddles Hideaway. All other assets of WGM including all cash, accounts, receivable and bank deposits as well as all causes of action relating to Heddles Hideaway are not being transferred to the Stalking Horse Bidder. d. Conditions to Sale: The Stalking Horse Agreement is conditioned on: (i) clear title and (ii) Bankruptcy Court approval. e. Brokers: LCA will be paid a commission in an amount to be determined, not to exceed 5% f. Breakup Fee: Qualified Expense Reimbursement for reasonable out of pocket expenses in an amount not to exceed $25,000 g. Closing: The closing will take place no later than the later of (i) June 30, 2020 or (ii) 3 business days after the Sale Order becomes a Final Order h. Deposit: $50,000 While all interested bidders should read the Bidding Procedures in their entirety, the following describes the salient points of the Bidding Procedures: a. Bid Deadline: June 10, 2020 at 12:00 p.m. (CT) b. Initial Bid: A purchase price that exceeds the consideration of the Stalking Horse Agreement plus $50,000, c. Deposit: 10% of the bidder's proposed purchase price d. Auction: If two or more timely Qualified Bids are received by the Bid Deadline, an auction for Heddles Hideaway will be conducted on June 11, 2020 at 2:00 p.m. by video conference. e. Bid Increments: $50,000 cash f. Sale Hearing: June 15, 2020 at 2:00 p.m. (CT) Importantly, the Bidding Procedures recognize the Debtors' fiduciary obligations to seek the highest and/or best bid for Heddles Hideaway and, as such, do not impair their ability to consider all qualified bid proposals, and, as noted preserve the Debtors' right to modify the Bidding Procedures as necessary or appropriate to elicit the highest and/or best bid for their estates. The Debtors are required to notify the WGM's creditors of the proposed sale of Heddles Hideaway, including disclosure of the time and place of the Auction, the terms and conditions of the sale, and the deadline for filing any objections thereto. The Debtors accordingly request that the Court approves the form and content of the Sale Notice. The Debtors propose to serve the Bidding Procedures Order within two business days of its entry. As part of the Sale, the Debtors ask authority to assume and assign certain executory contracts and/or unexpired leases to the Stalking Horse Bidder. To the extent that the Stalking Horse Bidder or the Successful Purchaser asks to take an assignment of an executory contract and/or unexpired lease, no later than two days after the Bid Deadline, the Debtors will file with the Court and serve on each party to a Desired 365 Contract the Cure Notice. No later than two days prior to the Sale Hearing, any objection to (i) the Cure Amount, (ii) the ability of Stalking Horse Bidder to provide adequate assurance of future performance under the Desired 365 Contracts and/or (iii) the assumption and assignment of the Desired 365 Contract must be filed with the Court. In connection with approval of the Stalking Horse Agreement, the Debtors ask approval qualified expense reimbursement for the Stalking Horse Bidder for the out-of-pocket amounts actually incurred by the Stalking Horse Bidder in an amount not to exceed $25,000 under the Stalking Horse Agreement, which is a maximum 2% of the purchase price. Specifically, in the event that the Debtors consummate an alternative transaction, which would include a sale of Heddles Hideaway to any party other than the Stalking Horse Bidder, the Debtors will pay the Stalking Horse Bidder the Expense Reimbursement. By the Motion, the Debtors also ask that the Court approves the sale of the Heddles Hideaway to the Stalking Horse Bidder or the successful bidder pursuant to Sections 105, 363, and 365 of the Bankruptcy Code. They ask that the Court approves the sale free and clear of all liens, claim, and encumbrances. Finally, an expeditious closing of a sale is necessary and appropriate to maximize value for the estates and limit the accrual of continued administrative expenses to maintain the Heddles Hideaway. Accordingly, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rules 6004(h) and 6006(d). A copy of the Bidding Procedures and APA is available at https://tinyurl.com/y7q5s9ps from PacerMonitor.com free of charge. A hearing on the Motion was set for May 27, 2020, at 11:00 a.m. About Westwind Manor Resort Association Westwind Manor Resort Association, Inc., and its subsidiaries operate two distinct business segments. Warrior Custom Golf focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions manages affiliates, like Warrior Golf, LLC, which own and manage golf courses. Warrior Custom Golf was founded in 1998 by Brendan Flaherty. It develops, manufactures markets and sells affordable custom golf clubs and related equipment to golfers worldwide. Warrior Custom Golf's products are custom built to the specifications of each customer. Warrior Acquisitions is the manager of six entities that own and operate 18 golf courses and parcels of land located throughout the United States. Both segments of the business are headquartered in Irvine, California. Westwind Manor Resort Association and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 19-50026) on March 4, 2019. The Debtors estimated both assets and debt between $1 million and $10 million. The cases have been assigned to Judge David R. Jones. The Debtors tapped Cole Schotz P.C. as bankruptcy counsel; Sidley Austin LLP, as special counsel; Force Ten Partners LLC as financial advisor; and Donlin, Recano & Company, Inc. as claims and noticing agent. Henry Hobbs Jr., the acting U.S. trustee for Region 7, appointed an official committee of unsecured creditors on March 19, 2019. The committee is represented by Cozen O'Connor. WESTWIND MANOR: Sets Bidding Procedures for Baneberry Golf Club --------------------------------------------------------------- Manor Resort Association, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas to authorize the bidding procedures in connection with the auction sale of Baneberry Golf and Resort Club. The Debtors operate two distinct business segments. Warrior Custom Golf, Inc. focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions, LLC, however, manages affiliates that own golf courses. Warrior Acquisitions is the manager of six entities that own and operate 18 golf courses and parcels of land located throughout California, Florida, Colorado, Iowa, Alabama, North Carolina, South Carolina, Tennessee and Georgia. Warrior Acquisitions' golf courses (i.e. those under its indirect management) serve their local communities and are located in secondary and tertiary markets. Warrior Acquisitions' managed courses generated approximately 267,500 rounds of golf in 2018. Many of the golf courses have additional amenities including golf pro shops, driving ranges, clubhouses, restaurants, bars, swimming pools, private villas and banquet facilities. Warrior Acquisitions' managed courses generated approximately $13 million in annual revenue over the past few years but generated an operating loss of approximately $680,000 in 2018. Warrior Golf, LLC is the owner of the Baneberry Resort and Golf Club and related amenities located in Baneberry, Tennessee. The Baneberry Golf Club consists of a 6,700+ yard, 18-hole golf course, inn, private villas, pro shop, and restaurant facilities with a fully stocked bar within a 12,500 square foot clubhouse, all set in the historic Smokey Mountains. While the Baneberry Golf Club is not subject to any known pre-petition liens or encumbrances, it does serve as the collateral of Serene WG Loan Investors ("DIP Lender") under the Debtors’ debtor in possession financing. The sale of the Baneberry Golf Club is subject to the terms of the court-approved Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement dated April 2, 2019, as amended, or as may be otherwise agreed by the Debtors and the DIP Lender. Since the commencement of the Chapter 11 Cases, the Debtors have explored numerous avenues for selling their golf courses. After the Petition Date, Chris Charnas, the Debtors' golf course consultant, received numerous expressions of interest from members of the local community, but no interested party submitted an offer to be a "stalking horse." The Debtors prepared a form asset purchase agreement pursuant to which they propose to effectuate a sale of the Baneberry Golf Club. While all interested bidders should read the Bidding Procedures in their entirety, the following describes the salient points of the Bidding Procedures: a. Bid Deadline: June 9, 2020 at 12:00 p.m. (CT) b. Initial Bid: A purchase price that exceeds the consideration of the Stalking Horse Agreement plus $50,000, c. Deposit: 10% of the bidder's proposed purchase price d. Auction: If two or more timely Qualified Bids are received by the Bid Deadline, an auction for Heddles Hideaway will be conducted on June 11, 2020 at 2:00 p.m. by video conference. e. Bid Increments: $50,000 cash f. Sale Hearing: June 15, 2020 at 2:00 p.m. (CT) Under Bankruptcy Rule 2002(a) and (c), the Debtors are required to notify the Warrior Golf's creditors of the proposed sale of the Baneberry Golf Club, including disclosure of the time and place of the Auction, the terms and conditions of the sale, and the deadline for filing any objections thereto. The Debtors propose to serve the Bidding Procedures Order within two business days of its entry. As part of the Sale, the Debtors may ask authority to assume and assign certain executory contracts and/or unexpired leases to the Successful Bidder. To the extent that a potential purchaser seeks to take an assignment of an executory contract and/or unexpired lease, no later than 1 day after the Bid Deadline, the Debtors will file with the Court and serve on each party to a Desired 365 Contract the Cure Notice. No later than one day prior to the Sale Hearing, any objection to the Cure Amount must be filed with the Court. The Debtors respectfully ask authority to enter into a "stalking horse" agreement, which will be substantially similar to the APA, in advance of the Auction. They submit that a "stalking horse" offer could materialize if and only If the Debtors are authorized to agree to a "breakup fee." The Debtors propose that they be authorized to negotiate a breakup fee in an amount up to $25,000 in a "stalking horse" agreement. By the Motion, the Debtors also ask that the Court approves the sale of the Baneberry Golf Club free and clear of all liens, claim, and encumbrances. Finally, an expeditious closing of a sale is necessary and appropriate to maximize value for the estates and limit the accrual of continued administrative expenses to maintain the Heddles Hideaway. Accordingly, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rules 6004(h) and 6006(d). A copy of the Bidding Procedures and APA is available at https://tinyurl.com/y9zg9jfa from PacerMonitor.com free of charge. A hearing on the Motion was set for May 27, 2020, at 11:00 a.m. About Westwind Manor Resort Association Westwind Manor Resort Association, Inc., and its subsidiaries operate two distinct business segments. Warrior Custom Golf focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions manages affiliates, like Warrior Golf, LLC, which own and manage golf courses. Warrior Custom Golf was founded in 1998 by Brendan Flaherty. It develops, manufactures markets and sells affordable custom golf clubs and related equipment to golfers worldwide. Warrior Custom Golf's products are custom built to the specifications of each customer. Warrior Acquisitions is the manager of six entities that own and operate 18 golf courses and parcels of land located throughout the United States. Both segments of the business are headquartered in Irvine, California. Westwind Manor Resort Association and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 19-50026) on March 4, 2019. The Debtors were estimated to have assets and debt between $1 million and $10 million. The cases have been assigned to Judge David R. Jones. The Debtors tapped Cole Schotz P.C. as bankruptcy counsel; Sidley Austin LLP, as special counsel; Force Ten Partners LLC as financial advisor; and Donlin, Recano & Company, Inc. as claims and noticing agent. Henry Hobbs Jr., the acting U.S. trustee for Region 7, appointed an official committee of unsecured creditors on March 19, 2019. The committee is represented by Cozen O'Connor. WESTWIND MANOR: TRG 208 Buying Lakota Golf Club for $1.5 Million ---------------------------------------------------------------- Manor Resort Association, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas to authorize the bidding procedures in connection with the sale of Lakota Canyon Ranch and Golf Club to TRG 208 Midland, LLC for $1.5 million, subject to higher and better offers. The Debtors operate two distinct business segments. Warrior Custom Golf, Inc. focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions, LLC, however, manages affiliates that own golf courses. Warrior Acquisitions is the manager of six entities that own and operate 18 golf courses and parcels of land located throughout California, Florida, Colorado, Iowa, Alabama, North Carolina, South Carolina, Tennessee and Georgia. Warrior Acquisitions' golf courses (i.e. those under its indirect management) serve their local communities and are located in secondary and tertiary markets. Warrior Acquisitions' managed courses generated approximately 267,500 rounds of golf in 2018. Many of the golf courses have additional amenities including golf pro shops, driving ranges, clubhouses, restaurants, bars, swimming pools, private villas and banquet facilities. Warrior Acquisitions' managed courses generated approximately $13 million in annual revenue over the past few years but generated an operating loss of approximately $680,000 in 2018. Warrior Golf Assets, LLC ("WGA") is the owner of the Lakota Canyon Ranch and Club ("Lakota Golf Club") and related amenities and parcels of real property located in New Castle, Colorado. The Lakota Golf Club consists of a 7,111 yard, 18-hole championship golf course, golf cart barn and related maintenance and irrigation facilities, and a 3,000 square foot clubhouse that has facilities available for dining and catering, as well as breathtaking views of the surrounding mountains. The Lakota Golf Club also includes certain parcels of undeveloped real property abutting or otherwise near the golf course facilities. Further, it is nestled within a surrounding community of homes and is subject certain agreements with the attendant homeowner’s association. As part of the sale of the Lakota Golf Club, the Debtors propose assigning their rights to exiting agreements with the surrounding homeowner's association to the Stalking Horse Bidder or other successful bidder, as the case may be. The Lakota Golf Club is currently subject to a lien in favor of ANB Bank in the original principal amount of $1.5 million. On April 23, 2020, the Court entered an Order approving of the ANB Stipulation, setting forth that as of April 1, 2020, the Outstanding Loan Balance on the ANB Loan was $1,014,462. Furthermore, the ANB Stipulation addressed the application of certain net proceeds from a sale of certain residential lots associated with the Lakota Golf Club, which net proceeds are currently being applied to the Debtors' monthly obligations on the ANB Loan as more fully described in the terms of the ANB Stipulation. The ANB Stipulation also confirms the validity and priority of the liens associated with the ANB Loan. Further, the Lakota Golf Club serves as collateral of Serene WG Loan Investors ("DIP Lender") under the Debtors' DIP financing. The sale of the Lakota Golf Club remains subject to the terms of the court-approved Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement dated April 2, 2019, as amended, or as may be agreed by the Debtors and the DIP Lender. Since the commencement of the Chapter 11 Cases, the Debtors have explored numerous avenues for selling their golf courses. After the Petition Date, Chris Charnas, the Debtors' golf course consultant, received numerous expressions of interest from members of the local community and other interested parties regarding the sale of the Lakota Golf Club. These expressions of interested culminated in two offers to purchase the Lakota Golf Club. After fulsome arms'-length negotiations on price and other terms with the Stalking Horse Bidder, WGA entered into an agreement, subject to higher and better offers, to sell the Lakota Golf Club to the Stalking Horse Bidder. WGA and Warrior Acquisitions and the Stalking Horse Bidder have executed their Asset Purchase Agreement, dated May 7, 2020. A summary of the principal terms of the Stalking Horse Agreement is as follows: a. Purchaser: TRG 208 Midland, LLC b. Purchase Price: $1.5 million, subject to higher and better offers c. Assets to be Sold: All of WGA's and Warrior Acquisition's current right, title and interest in the Real Property, Personal Property, Assumed Contracts, permits, intangibles, entitlements, tradename and trademark, books and records and insurance claims or proceeds with respect to the Lakota Golf Club. All other assets of WGA including all cash, accounts, receivable and bank deposits as well as all causes of action relating to the Lakota Golf Club are not being transferred to the Stalking Horse Bidder. d. Conditions to Sale: The Stalking Horse will have the right until and through May 21, 2020 to make non-invasive test, investigations, surveys, and examinations of the Lakota Golf Club and related assets being sold. The sale of the Lakota Golf Club is further subject to (i) clean title and (ii) Bankruptcy Court approval. e. Brokers: LCA will be paid a commission in an amount to be determined, not to exceed 5% f. Breakup Fee: $30,000 g. Closing: The closing will take place within 15 days of entry of the Sale Order, or as otherwise agreed. h. Deposit: $75,000, plus and additional $75,000 to be paid at the expiration of the Diligence Period While all interested bidders should read the Bidding Procedures in their entirety, the following describes the salient points of the Bidding Procedures: a. Bid Deadline: June 8, 2020 at 12:00 p.m. (CT) b. Initial Bid: A purchase price that exceeds the consideration of the Stalking Horse Agreement, plus the Breakup Fee, plus $50,000 c. Deposit: 10% of the bidder's proposed purchase price d. Auction: If two or more timely Qualified Bids are received by the Bid Deadline, an auction for the Lakota Golf Club will be conducted on June 10, 2020 starting at 10:00 a.m. (CT) by video conference. e. Bid Increments: $50,000 cash f. Sale Hearing: June 15, 2020 at 2:00 p.m. (CT) The Debtors are required to notify the WGA's creditors of the proposed sale of the Lakota Golf Club, including disclosure of the time and place of the Auction, the terms and conditions of the sale, and the deadline for filing any objections thereto. The Debtors accordingly ask that the Court approves the form and content of the Sale Notice. The Debtors propose to serve the Bidding Procedures Order within two business days. As part of the Sale, the Debtors ask authority to assume and assign certain executory contracts and/or unexpired leases to the Stalking Horse Bidder. To the extent that the Stalking Horse Bidder or the Successful Purchaser asks to take an assignment of an executory contract and/or unexpired lease, no later than two days after the Bid Deadline, the Debtors will file with the Court and serve on each party to a Desired 365 Contract the Cure Notice. No later than two days prior to the Sale Hearing, any objection to (i) the Cure Amount, (ii) the ability of Stalking Horse Bidder to provide adequate assurance of future performance under the Desired 365 Contracts and/or (iii) the assumption and assignment of the Desired 365 Contract must be filed with the Court. By the Motion, the Debtors also ask that the Court approves the sale of the Lakota Golf Club to the Stalking Horse Bidder or the successful bidder pursuant to Sections 105, 363, and 365 of the Bankruptcy Code. They ask that the Court approves the sale of the Lakota Golf Club free and clear of all liens, claim, and encumbrances. Finally, an expeditious closing of a sale is necessary and appropriate to maximize value for the estates and limit the accrual of continued administrative expenses to maintain the Lakota Golf Club. Accordingly, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rules 6004(h) and 6006(d). A copy of the Bidding Procedures and APA is available at https://tinyurl.com/y93bzetc from PacerMonitor.com free of charge. A hearing on the Motion was set for May 27, 2020, at 11:00 a.m. About Westwind Manor Resort Association Westwind Manor Resort Association, Inc., and its subsidiaries operate two distinct business segments. Warrior Custom Golf focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions manages affiliates, like Warrior Golf, LLC, which own and manage golf courses. Warrior Custom Golf was founded in 1998 by Brendan Flaherty. It develops, manufactures markets and sells affordable custom golf clubs and related equipment to golfers worldwide. Warrior Custom Golf's products are custom built to the specifications of each customer. Warrior Acquisitions is the manager of six entities that own and operate 18 golf courses and parcels of land located throughout the United States. Both segments of the business are headquartered in Irvine, California. Westwind Manor Resort Association and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 19-50026) on March 4, 2019. The Debtors estimated both assets and debt between $1 million and $10 million. The cases have been assigned to Judge David R. Jones. The Debtors tapped Cole Schotz P.C. as bankruptcy counsel; Sidley Austin LLP, as special counsel; Force Ten Partners LLC as financial advisor; and Donlin, Recano & Company, Inc. as claims and noticing agent. Henry Hobbs Jr., the acting U.S. trustee for Region 7, appointed an official committee of unsecured creditors on March 19, 2019. The committee is represented by Cozen O'Connor. WHITING PETROLEUM: Hires Deloitte & Touche as Independent Auditor ----------------------------------------------------------------- Whiting Petroleum Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Deloitte & Touche LLP, as independent auditor to the Debtors. Whiting Petroleum requires Deloitte & Touche to: a) Base Audit Engagement Letter. Pursuant to the terms and conditions of the Base Audit Engagement Letter, Deloitte & Touche: (a) will perform an integrated audit in accordance with the standards of the Public Company Accounting Oversight Board ("PCAOB") (United States) (the "PCAOB Standards") to express opinions on (i) whether the Debtors' financial statements for the period ended December 31, 2020 are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America, and (ii) the effectiveness of the Debtors' internal control over financial reporting, as of December 31, 2020, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission; and (b) will review the Debtors' condensed consolidated interim financial information in accordance with the PCAOB Standards for each of the quarters in the year ending December 31, 2020, prepared for the submission to the Securities and Exchange Commission. b) 401(k) Plan Audit Engagement Letter. Pursuant to the terms and conditions of the 401(k) Plan Audit Engagement Letter, Deloitte & Touche will perform a limited-scope audit for the 401(k) Employee Savings Plan of Whiting Petroleum Corporation (the "Plan") in accordance with auditing standards generally accepted in the United States of America ("generally accepted auditing standards") and the method of compliance permitted by 29 CFR 2520.103-8 of the U.S. Department of Labor's ("DOL") Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 (ERISA) ("Limited-Scope Election"), and express an opinion on whether the form and content of the information included in the Plan's financial statements and supplemental schedules required by the DOL for the year ended December 31, 2019, other than that derived from the information certified by the trustee, are presented in compliance with the DOL's Rules and Regulations for Reporting and Disclosure under ERISA. Deloitte & Touche will be paid at these hourly rates: Partner/Principal/Managing Director $800 Senior Manager $695 Manager $610 Senior $510 Staff $405 Deloitte & Touche will also be reimbursed for reasonable out-of-pocket expenses incurred. Paul Horak, partner of Deloitte & Touche LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Deloitte & Touche can be reached at: Paul Horak DELOITTE & TOUCHE LLP 1111 Bagby Street, Suite 4500 Houston, TX 77002 Tel: (713) 982-2000 About Whiting Petroleum Corporation Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. WILLOUGHBY ESTATES: Unsecureds Will Recover Full Amount of Claim ---------------------------------------------------------------- Willoughby Estates LLC submitted a Revised Combined Disclosure Statement and First Amended Plan of Liquidation. Class 1 (Secured Claim of Mortgagee) in the amount of $2,183,543 is an allowed claim. On the Effective Date, the Debtor will deliver a quit-claim deed to the Property to the New Owner and an assignment of all tangible personal property physically located on the Property. Class 3 (Unsecured Claims That Are Not Commingling Claims) consists of a single claim asserted against the Debtor by Silvercup Scaffolding I LLC in the amount of $16,972. In full satisfaction of such Allowed General Unsecured Claim, the holder of such Allowed General Unsecured Claim will receive the full amount of its Allowed Claim in Cash or such other, lesser amount as may be agreed to in writing. As to Class 4 (Holders of Commingling Claims), the Debtor is making no projections of any payment to this Class of Claims because (i) the amount of Claims in this Class is unclear and (ii) any recovery against CSRE LLC or Strulovitch is speculative. Three days prior to any hearing set to consider confirmation of the Plan the CoManagers will have deposited $70,000 in Nutovic & Associates escrow account or such other amount as is necessary to make all payments due under this Plan on the Effective Date. A full-text copy of the Revised Combined Disclosure Statement and First Amended Plan of Liquidation dated May 20, 2020, is available at https://tinyurl.com/y7djbfal from PacerMonitor.com at no charge. Attorneys for the Debtor: Isaac Nutovic Nutovic &Associates 261 Madison Avenue, 26th Floor New York, N.Y. 10016 About Willoughby Estates Willoughby Estates LLC, a privately held company engaged in activities related to real estate, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-45886) on Sept. 26, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The case is assigned to Judge Carla E. Craig. Nutovic & Associates is the Debtor's counsel. YANNI PIZZA: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Yanni Pizza, LLC. About Yanni Pizza Yanni Pizza, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-62321) on Feb. 6, 2020. Judge Sage M. Sigler oversees the case. [*] Holland & Knight: Impact of Commercial Bankruptcy on Landlords ------------------------------------------------------------------ Amy Simon Klug and Meg Raker of Holland & Knight LLP wrote an article on JDSupra on the bankruptcy implications for commercial landlords with bankrupt or near-bankrupt tenants Highlights of the article include: * With tenant closures and lease defaults on the rise in the wake of the economic downturn caused by the COVID-19 pandemic, tenant bankruptcy filings are a major concern for landlords across the real estate industry. * As courts of equity, bankruptcy courts not only consider the specific facts and circumstances of each case but also, because of the overriding goal of reorganization in bankruptcy, may subordinate other legal rights and policies. Therefore, there is no one-size-fits-all answer to the challenges that commercial landlords are facing. * This Holland & Knight alert is intended as a guideline for commercial landlords in an evaluation of their leases and workout options – but it is not an exhaustive list of all of the intricacies and consequences that may follow a tenant bankruptcy. A full-text copy of the article is available at: https://www.jdsupra.com/legalnews/bankruptcy-implications-for-commercial-20184/ [*] Non-Bankruptcy Filing Options Available for Cannabis Companies ------------------------------------------------------------------ The firm Lowndes wrote in an article for JDSupra that the government's response to the COVID-19 pandemic has resulted in federal assistance to numerous industries and individual taxpayers, but notably has left the state legalized marijuana industry out in the cold. Business and individuals involved in the marijuana industry are likely ineligible for bankruptcy protection because marijuana remains illegal under federal law and the federal bankruptcy courts cannot be used to facilitate the possession or sale of illegal assets. Even now-legal hemp businesses have faced push-back on bankruptcy protections, as recently evidenced in the case of United Cannabis Corp., which drew a still-pending attempt to dismiss from the United States Trustee disputing that the company deals solely in hemp based on its own prior SEC filings. However, other options may be available for financially distressed marijuana businesses. Assignments for Benefit of Creditors A close alternative to a Chapter 7 bankruptcy, an assignment for benefit of creditors (often referred to as an "ABC"), allows a business to assign all of its assets to a third party (the assignee) who then can wind down the company's affairs in an orderly fashion. As ABCs are created under state law, an ABC may be a viable alternative for a business who is operating in a manner consistent with state law, even though still in violation of federal law and therefore ineligible for bankruptcy protection. Receiverships Another alternative may be the consensual appointment of a receiver over the company. When faced with litigation from a creditor, one remedy available to the creditor may be requesting the court to appoint a third party (the receiver) to run the company. While this process is often adversarial as the appointment of a receiver will divest control of the company from current management, if no better alternatives exist, the company may be able to negotiate for favorable provisions in the receivership order. Such favorable provisions could include permitting the receiver to sell the company's assets or the whole company as a going concern, potentially realizing proceeds over and above the debt owed. Workouts Finally, the best alternative may be to engage in workout negotiations with the company's creditors in advance of any litigation or ABC. Workouts are done outside the court system entirely and are dependent upon all parties reaching a mutually acceptable solution. This process could involve simple negotiations between the parties or potentially the mediation of multi-party disputes. While bankruptcy may not be an option, the way a creditor's claims would be treated in bankruptcy or in an ABC may be a useful starting point for these negotiations. [^] BOOK REVIEW: THE SUCCESSFUL PRACTICE OF LAW ----------------------------------------------- Author: John E. Tracy Publisher: Beard Books Soft cover: 470 pages List Price: $34.95 Order a copy today at https://is.gd/fSX7YQ Originally published in 1947, The Successful Practice of Law still ably serves as a point of reference for today's independent lawyer. Its contents are based on a series of non-credit lectures given at the University of Michigan Law School, where the author began teaching after 26 years of law practice. His wisdom and experience are manifest on every page, and will undoubtedly provide guidance for today's hard-pressed attorney. The Successful Practice of Law provides timeless fundamental guidelines for a successful practice. It is intended neither as a comprehensive reference work, nor as a digest of law. Rather, it is a down-to-earth guide designed to help lawyers solve everyday problems -- a ready-to-tap source of tested proven methods of building and maintaining a sound practice. Mr. Tracy talks at length about developing a client base. He contends that a firemen's ball can prove just as useful as an exclusive party at the country club in making contacts with future clients. He suggests seeking work from established firms as a way to get started before seeking collections work out of desperation. In his chapter on keeping clients, Mr. Tracy gives valuable lessons in people skills: "(I)f a client tells you he cannot sleep nights because of worry about his case, you will ease his mind very much by saying, 'Now go home and sleep. I am the one to do the worrying from now on.'" Rather than point out to a client that his legal predicament is partly his fault, "concentrate on trying to work out a program that will overcome his mistakes." He cautions against speculating aloud to clients on what they could have done differently to avoid current legal problems, lest they change their stories and suddenly claim, falsely, that they indeed had done that very thing. He also advises against deciding too quickly that a client has no case: "After you have been in practice for a few years you will be surprised to find how many seemingly desperate cases can be won." Mr. Tracy advises studying as the best use of downtime. He quotes Mr. Chauncey M. Depew: "The valedictorian of the college, the brilliant victors of the moot courts who failed to fulfill the promise of their youth have neglected to continue to study and have lost the enthusiasm to which they owed their triumphs on mimic battle fields." Mr. Tracy advises against playing golf with one's client every time he asks: "My advice would be to accept his invitation the first time, but not the second, possibly the third time but not the fourth." Other topics discussed by Mr. Tracy, with the same practical, sound advice, include fixing fees, drafting legal instruments, examining an abstract of title, keeping an office running smoothly, preparing a case for trial, and trying a jury case. But some of best counsel he offers is the following: You cannot afford to overlook the fact that you are in the practice of law for your lifetime; you owe a duty to your client to look after his interests as if they were your own and your professional future depends on your rendering honest, substantial services to your clients. Every sound lawyer will tell you that straightforward conduct is, in the end, the best policy. That kind of advice never ages. John E. Tracy was Professor Emeritus and Member of University of Michigan Law School Faculty from 1930 to 1969. Professor Tracy practiced law for more than a quarter century in Michigan, New York City, and Chicago before joining the Law School faculty in 1930. He retired in 1950. He was born in 1880. He died in December 1969. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***