/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200702.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 2, 2020, Vol. 24, No. 183 Headlines 24 HOUR FITNESS: U.S. Trustee Appoints Creditors' Committee 33 VALLEY: Seeks to Hire Keller Williams as Real Estate Broker 33 VALLEY: Seeks to Hire Raymond H. Aver as Bankruptcy Counsel 39-45 7TH AVENUE: Hires Stuart D. Gavzy as Counsel 7701 SW 120TH: Seeks to Hire Van Horn Law as Counsel ABA THERAPY: Wants to Maintain Plan Exclusivity Until Sept. 5 ACADEMY LTD: Moody's Hikes CFR to B3 & Alters Outlook to Stable ADVANCED GREEN: Unsecured Creditors to Get 9.0743% of Shares AEPC GROUP: Seeks to Hire Jeffrey S. Shinbrot as Legal Counsel ALDRICH PUMP: Hires Kurtzman as Claims and Noticing Agent ALL CARE NOW: Cash Collateral Use Continued Through July 31 ALPHA KING: Case Summary & 5 Unsecured Creditors AMERICAN DENTAL: Moody's Alters Outlook on B3 CFR to Negative ANDES INDUSTRIES: Hires Beus Gilbert as Special Counsel ANDREW CULLEN: Seeks to Hire Goering & Goering as Legal Counsel ASCENA RETAIL: Katie Bayne Quits as Director AVAYA INC: Fitch Affirms 'B' LongTerm IDR, Outlook Stable BAILEY RIDGE: Plan Admin's Sale of Iowa Properties Approved BAY CIRCLE: Court Trims Nilhan Financial Claims BAY CLUB OF NAPLES: Case Summary & 20 Largest Unsecured Creditors BLACK BOTTLE: Case Summary & 20 Largest Unsecured Creditors BOMBARDIER INC: To Reduce 11 Percent of Workforce BOOZ ALLEN: Moody's Raises CFR to Ba1, Outlook Positive BOSS OYSTER: Hearing on Apalachicola Properties Sale Continued BUZZARDS BENCH: Sept. 8 Auction of Substantially All Assets Set CAPITAL ASSET: Voluntary Chapter 11 Case Summary CAREMORE MANAGERS: Allowed to Use Cash Collateral on Final Basis CDS US INTERMEDIATE: Moody's Cuts PDR to D-PD Amid CCAA Filing CHARLES K. BRELAND: Trustee's Amended Compromise Junked CHESAPEAKE ENERGY: Moody's Lowers Prob. of Default Rating to D-PD CHESAPEAKE ENERGY: S&P Keeps 'D' ICR Unchanged on Chapter 11 Filing CIRQUE DU SOLEIL: Obtains $1.2-Bil. Buyout Offer from Creditors COBAL FOOD: Seeks Approval to Hire Brown Law Firm as Legal Counsel COBAL FOOD: Seeks Approval to Hire George W. Stone as Accountant COMARK HOLDINGS: Plans to Restructure Under CCAA CORECIVIC INC: Fitch Affirms BB- LongTerm IDR, Outlook Negative COVIA HOLDINGS: Case Summary & 50 Largest Unsecured Creditors CRUZ TRUCKING: Allowed to Use Cash Collateral Until July 22 DAH-ON INC: Seeks Approval to Hire Kevin Lim CPA as Accountant DELIVER BUYER: Moody's Affirms B3 CFR & Alters Outlook to Stable DIOCESE OF ST. CLOUD: Appoints Tort Claimants' Representative EAST CAROLINA COMMERCIAL: Case Summary & Top Unsecured Creditors EMIRATES & ETIHAD AIRWAYS: Extends Temporary Pay Cuts to September EXELA TECHNOLOGIES: Incurs $12.7-Mil. Net Loss in First Quarter EXTRACTECH LLC: Seeks to Hire Alan R. Smith as Attorney FCPR ACQ: Trustee's $305K Sale of Trucking Assets Finally Approved FCPR ACQUISITION: Trustee's Sale of All Assets Finally Approved FCPR ACQUISITION: Trustee's Sale of All Plastics Assets Withdrawn FIBERCORR MILLS: Hires Phillips Organization as Financial Advisor FORTERRA FINANCE: Moody's Rates $400MM Senior Secured Notes 'B3' FURIE OPERATING: Can’t Ignore $7M Jones Act Fees, Feds Say GAP INC: Plans to Shutter Hill City Brand GORDMANS STORES: Reopens as It Begins to Liquidate Properties GREEN PHARMACEUTICALS: Seeks Cash Collateral Access Until Dec. 31 GRUDEN ACQUISITION: Moody's Alters Outlook on B3 CFR to Negative GRUPO AEROMEXICO: Case Summary & 30 Largest Unsecured Creditors GULFSLOPE ENERGY: Posts $635K Net Loss in Second Quarter HARRIS DAVIS WELCH: $40K Sale of Sardinia Property to McEleveen OKd HIKMA FINANCE: Moody's Rates Proposed New Sr. Unsecured Notes Ba1 HOLOGENIX INC: Seeks to Hire Troutman Sanders as Special Counsel HUDSON TECHNOLOGIES: Registers 3M Shares Under Incentive Plan II-VI INC: Fitch Alters Outlook on 'BB' LongTerm IDR to Stable ILPEA PARENT: Moody's Alters Outlook on B2 CFR to Negative INTELSAT S.A.: Reports $218.8 Million Net Loss in First Quarter J.C. PENNEY: Closing Sales for 154 Stores to End in 4 Months J.C. PENNEY: Seeks Court Approval to Hire Quinn Emanuel J.T. SHANNON: Auction Sale of Surplus Equipment Approved JACOBS ENTERTAINMENT: Moody's Confirms B3 CFR, Outlook Negative KOHO SOFTWARE: Seeks to Hire Buddy D. Ford as Counsel L BRANDS: UK Filing to Have Implications on Lingerie Business LA MERCED: July 10 Auction of Mortgage Property Set LAUREATE EDUCATION: Moody's Affirms B1 CFR & Alters Outlook to Neg. LOOT CRATE: Seeks to Extend Exclusivity Period Through Sept. 8 MACY'S INC: Two Stores Reopen at Wyoming Valley Mall MAGNOLIA LANE: Bankruptcy Attorney to Provide Additional Services MARY'S WOODS: Fitch Affirms BB Rating on Series 2018 Bonds MERITAGE COMPANIES: Case Summary & 16 Unsecured Creditors MIA & ASSOCIATES: Seeks to Hire Fuqua & Associates as Legal Counsel MILLMAC CORPORATION: Exclusivity Period Extended Until Aug. 14 MODELL'S SPORTING: Hires Janover LLC as Tax Service Provider MTE HOLDINGS: Hires Greenhill & Co as Investment Banker NATIONAL MEDICAL: Seeks to Hire Karalis as Special Counsel NEW CITY WASTE: Taps Davidoff Hutcher as New Legal Counsel NEW EMERALD: Allowed to Use Cash Collateral on Final Basis NEW ENTERPRISE: Moody's Rates $200MM Senior Unsecured Notes 'Caa1' NINE WEST: Trust Wants to Recover Over $1.5B from Past Workers NORTH TAMPA ANESTHESIA: Wants to Move Exclusivity Until July 20 NPC INTERNATIONAL: Case Summary & 30 Largest Unsecured Creditors PARK TRANSPORTATION: Cash Collateral Use Continued Until July 17 PG&E CORPORATION: Gets Approval of License Agreement With McKinsey POET TECHNOLOGIES: Sign LOI to Form $50 Million Joint Venture POWER SOLUTIONS: Incurs $712K Net Loss in First Quarter PPV INC: Wants to Move Exclusive Plan Filing Period to August 7 PRESTIGE HEATING: Plan Confirmation Hearing Continued to July 14 PUERTO RICO HOSPITAL: Court Says J&J Proceeds Not Bank Collateral QUALITY REIMBURSEMENT: Wants to Maintain Exclusivity Until Sept. 25 QUEST GROUP: Association Objects to Plan Disclosures QUEST GROUP: US Trustee Objects to Disclosure Statement RAYNOR SHINE: Wants to Move Exclusivity Period Through Aug. 31 RED ROSE INC: U.S. Trustee Appoints Creditors' Committee RED VENTURES: Moody's Alters Outlook on B1 CFR to Stable RGIS SERVICES: Moody's Withdraws 'Ca' CFR on Debt Restructuring RGV SMILES: Voluntary Chapter 11 Case Summary ROLETTE COUNTY: Moody's Reviews Ba1 Issuer Rating for Downgrade ROMANS HOUSE: Court Approves Disclosure Statement ROOFTOP GROUP: Debtors Will Either Restructure or Liquidate in Plan RQW - REAL ESTATE: Unsecureds to Recover 100% in Plan RSB INVESTMENTS: Seeks to Hire Briones Business as Legal Counsel RUM RUNNERS: Needs More Time to Formulate Chapter 11 Plan SALGUERO'S INC:Taps Molinari Oswald as Accountant SFP FRANCHISE: Unsecureds to Recover 0.52% to 3.15% in Plan SHAKER RD LLC: Seeks to Hire Hendel Collins as Counsel SIGNATURE INSURANCE: Hires Latham Luna as Counsel SLANDY INC: Court Conditionally Approves Disclosure Statement SLM CORP: Fitch Corrects March 13 Ratings Release SOUTHEASTERN METAL: $1.76M Sale of Personal Property to CIA Okayed SOUTHWEST AIRLINES: Offers Generous Buyout Deals to Trim Workforce STAGE STORES: Hires A&G Realty as Real Estate Consultant STONE TRUCKING: Shuts Operations, Lays Off 51 Workers SVENHARD'S SWEDISH: Court Denies Bid for Exclusivity Extension TECHNIPLAS LLC: Committee Hires Akin Gump as Counsel TECHNIPLAS LLC: Committee Hires Potter Anderson as Counsel TEMPLAR ENERGY: Tapstone Named Stalking Horse Bidder for Assets THOR INDUSTRIES: Moody's Alters Outlook on B1 CFR to Stable TOTAL OILFIELD: Seeks to Hire Giddens & Gatton as Legal Counsel TRENT RIVER: Court Conditionally Approves Disclosure Statement TRI-POINT OIL: Point-of-Sale Location in Colorado Hit by Filing USA GYMNASTICS: Survivors Object to Disclosure Statement WALKER INVESTMENT: July 15 Deadline to File Disclosures and Plan WESTERN MIDSTREAM: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable WESTERN MIDSTREAM: Moody's Cuts CFR to Ba2, Outlook Negative WEX INC: Moody's Affirms Ba2 CFR, Outlook Remains Negative WINNEBAGO INDUSTRIES: Moody's Alters Outlook on B2 CFR to Stable WOK HOLDINGS: Fitch Assigns CCC+ IDR & Rates Secured Loans CCC+ WYOMING INVESTMENT: Permanently Closes Fitness Center [*] Airbus Plans to Sue Airlines for Undelivered Jets [*] PPP Amendments Provide Flexibility to Borrowers [*] Use of Cash Collateral Not Prohibited by Jevic [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 24 HOUR FITNESS: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 on June 25, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of 24 Hour Fitness Worldwide, Inc. and its affiliates. The committee members are: 1. Kellermeyer Bergensons Services, LLC Attn: Van Andres, Esq., Associate Counsel 1575 Henthorne Dr. Maumee, Ohio 43537 Phone: (419) 861-5231 Email: vandres@kbsservices.com 2. Precor, Incorporated Attn: Shawna Arneson, Senior Global Credit Manager 20031 142nd Avenue NE Woodinville, WA 98072 Phone: (360) 620-3306) Email: shawna.arneson@precor.com 3. Wells Fargo, N.A. Attn: Thomas Korsman CTS Special Accounts Consultant 600 S. 4th Street, MAC N9300-061 Minneapolis, MN 55479 Phone: (612) 850-1194 Email: Thomas.m.korsman@wellsfargo.com 4. Geneva Crossing Carol Stream IL LLC Attn: Kumar Bhavanasi, President/CEO 1551 S. Washington Ave., Ste. 402A Piscataway, NJ 08854 Phone: (732) 745-0786 Email: kumar.bhavanasi@first-tek.com 5. SMA Architects, PC Steven Meier, President 115 W. Main St. Allen, TX 75013 Phone: (972) 359-8788, ext. 104 Email: smeier@smaarchitects.com 6. A.T. Kearney Inc. Attn: William Guthrie, Assistant General Counsel 227 West Monroe Street Chicago, IL 60606 Phone: (312) 223-6742 Email: Will.Guthrie@kearney.com 7. Brookfield Properties Retail, Inc. Attn: Julie Minnick Bowden National Bankruptcy Director 350 N. Orleans St., Suite 300 Chicago, IL 60654-1607 Phone: (312)960-2707 Email: julie.bowden@brookfieldpropertiesretail.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 24 Hour Fitness Worldwide 24 Hour Fitness Worldwide, Inc. owns and operates fitness centers in the United States. As of March 31, 2017, the company operated 426 clubs serving approximately 3.6 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. For the 12 months ended March 31, 2017, the company generated total revenue of about $1.4 billion. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 24 Hour Fitness Worldwide and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11558) on June 15, 2020. 24 Hour Fitness was estimated to have $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. The Hon. Karen B. Owens is the case judge. Debtors have tapped Weil, Gotshal & Manges, LLP as lead bankruptcy counsel; Pachulski Stang Ziehl & Jones, LLP as local counsel; FTI Consulting, Inc. as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk, LLC as claims agent. 33 VALLEY: Seeks to Hire Keller Williams as Real Estate Broker -------------------------------------------------------------- 33 Valley, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Keller Williams Realty/The Chernov Team as real estate broker. Keller Williams will assist in the sale of Debtor's residential real property located at 14533 Valley Vista Blvd., Sherman Oaks, Calif. The proposed listing price is $3.5 million. The firm will get a 4.5 percent commission on the sales price. Dennis Chernov, a realtor at Keller Williams, 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: Dennis Chernov Williams Realty/The Chernov Team 4061 Laurel Canyon Boulevard Studio City, CA 91604 Telephone: (818) 432-1524 Email: Dennis@chernovteam.com About 33 Valley 33 Valley, LLC is a privately held company whose principal assets are located at 14533 Valley Vista Blvd., Sherman Oaks, Calif. 33 Valley sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 20-10969) on May 26, 2020. At the time of the filing, Debtor disclosed assets of $1 million to $10 million and liabilities of the same range. Judge Deborah J. Saltzman oversees the case. Debtor has tapped the Law Offices of Raymond H. Aver as its legal counsel. 33 VALLEY: Seeks to Hire Raymond H. Aver as Bankruptcy Counsel -------------------------------------------------------------- 33 Valley, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ the Law Offices of Raymond H. Aver, A Professional Corporation as its legal counsel. The firm's services will include: (a) representing Debtor at its initial interview; (b) representing Debtor at the meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code; (c) representing Debtor at court hearings; (d) preparing legal papers; (e) advising Debtor regarding matters of bankruptcy law, including its rights and remedies with respect to its assets and the claims of its creditors; (f) representing Debtor in all contested matters; (g) assisting Debtor in the preparation of a disclosure statement and the negotiation, preparation and implementation of a plan of reorganization; (h) analyzing claims that have been filed in Debtor's bankruptcy case; (i) negotiating with creditors regarding the amount and payment of their claims; and (j) objecting to claims if appropriate. The hourly rates for the firm's attorney and paraprofessional who will be primarily responsible for representing Debtor are as follows: Raymond H. Aver, Shareholder $525 Ani Minasyan, Paraprofessional $150 The retainer fee is $20,000, exclusive of the $1,717 filing fee. Raymond Aver, Esq., disclosed in court filings that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Raymond H. Aver, Esq. Law Offices of Raymond H. Aver A Professional Corporation 10801 National Boulevard, Suite 100 Los Angeles, CA 90064 Telephone: (310) 571-3511 Email: ray@averlaw.com About 33 Valley 33 Valley, LLC is a privately held company whose principal assets are located at 14533 Valley Vista Blvd., Sherman Oaks, Calif. 33 Valley sought Chapter 11 protection (Bankr. C.D. Calif. Case No. 20-10969) on May 26, 2020. At the time of the filing, Debtor disclosed assets of $1 million to $10 million and liabilities of the same range. Judge Deborah J. Saltzman oversees the case. Debtor has tapped the Law Offices of Raymond H. Aver as its legal counsel. 39-45 7TH AVENUE: Hires Stuart D. Gavzy as Counsel -------------------------------------------------- 39-45 7th Avenue Realty, LLC, seek authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Stuart D. Gavzy, Esq., as counsel to the Debtor. 39-45 7th Avenue requires Stuart D. Gavzy to: a. give advice to the Debtor with respect to its powers and duties as Debtor in Possession in the continued management of its business and in the management of its property; b. negotiate with creditors of the Debtor-in-Possession in working out issues and doing what is necessary to confirm said case; c. prepare all necessary applications, answers, orders, reports and all legal papers; and d. attend the meetings and all court hearings. Stuart D. Gavzy will be paid at the hourly rate of $400. Stuart D. Gavzy will be paid a retainer in the amount of $10,000. Stuart D. Gavzy will also be reimbursed for reasonable out-of-pocket expenses incurred. Stuart D. Gavzy, 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. Stuart D. Gavzy can be reached at: Stuart D. Gavzy, Esq. 8171 E. Del Barquero Drive Scottsdale, AZ 85258 Tel: (973) 256-6080 Fax: (480) 452-1665 About 39-45 7th Avenue Realty, LLC 39-45 7th Avenue Realty, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 20-13567) on March 2, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by STUART D. GAVZY, ESQUIRE. 7701 SW 120TH: Seeks to Hire Van Horn Law as Counsel ---------------------------------------------------- 7701 SW 120th Street, LLC, seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Van Horn Law Group, P.A., as counsel to the Debtor. Michael's Gourmet requires Van Horn Law to: a. give advice to the Debtor with respect to its powers and duties as a debtor in possession and the continued management of its business operations; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of court; c. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; d. protect the interest of the debtor in all matters pending before the court; and e. represent the Debtor in negotiation with its creditors in the preparation of a plan. Van Horn Law will be paid at these hourly rates: Chad Van Horn, Esq. $450 Associates $350 Jay Molluso $250 Law Clerks $175 Paralegals $175 Van Horn Law will be paid a retainer in the amount of $6,717. Van Horn Law will also be reimbursed for reasonable out-of-pocket expenses incurred. Chad T. Van Horn, the firm's founding partner, 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. Van Horn Law can be reached at: Chad T. Van Horn, Esq. VAN HORN LAW GROUP, INC. 330 N. Andrews Ave., Suite 450 Fort Lauderdale, FL 33301 Tel: (954) 765-3166 E-mail: Chad@cvhlawgroup.com About 7701 SW 120th Street, LLC 7701 SW 120th Street, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 20-16512) on June 15, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by VAN HORN LAW GROUP, P.A. ABA THERAPY: Wants to Maintain Plan Exclusivity Until Sept. 5 ------------------------------------------------------------- ABA Therapy Solutions, LLC asked the U.S. Bankruptcy Court for the Southern District of Florida to extend the periods during which only the company can file and solicit acceptances for their Chapter 11 plan to Sept. 5 and Nov. 4, respectively. The company is requesting an extension to allow it time to review the claims and determine plan treatment. In addition, it is unclear at this time what, if any, the effects of the COVID19 virus may have on the company. About ABA Therapy Solutions Founded in 2012 by Linda Peirce, ABA Therapy Solutions provides in-home and clinic services covering language, behavioral, self-help skills and social skills for individuals with autism spectrum disorders, down syndrome and other developmental disabilities. ABA Therapy Solutions filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Lead Case No. 20-10208) on Jan. 7, 2020. In the petition signed by Linda Peirce, managing member, the Debtor disclosed $157,637 in assets and $1,342,155 in liabilities. Judge Erik P. Kimball oversees the case. The Debtor tapped Kelley Fulton & Kaplan, P.L. as its legal counsel, and Jessica J. Sumner, EA, LLC as its accountant. ACADEMY LTD: Moody's Hikes CFR to B3 & Alters Outlook to Stable --------------------------------------------------------------- Moody's Investors Service upgraded Academy, Ltd.'s corporate family rating to B3 from Caa2, probability of default rating to B3-PD from Caa3-PD, and senior secured term loan rating to Caa1 from Caa2. The ratings outlook was changed to stable from negative. The upgrades reflect Academy's Q1 2020 comparable sales, earnings and cash flow performance, which exceeded both Moody's expectations and the overall specialty retail sector during the coronavirus pandemic. The upgrades also reflect Moody's view that the solid operating performance trends are likely to continue over the near term, which will significantly reduce risks associated with the company's ability to refinance its $1.4 billion term loan due July 2022 in a timely and economical manner. The change in outlook to stable from negative reflects expectations for good liquidity and modestly higher earnings over the next 12-18 months. Moody's took the following rating actions for Academy, Ltd.: Corporate family rating, upgraded to B3 from Caa2 Probability of default rating, upgraded to B3-PD from Caa3-PD Senior secured bank credit facility, upgraded to Caa1 (LGD4) from Caa2 (LGD3) Outlook, changed to stable from negative RATINGS RATIONALE The B3 CFR is constrained by the company's high leverage, with debt/EBITDA of 6.4 times (including revolver borrowings to bolster liquidity), and only recent improvement in operating performance driven by turnaround efforts. Further, the credit profile incorporates the highly competitive nature of sporting goods retail, including the increased focus of major apparel and footwear brands on direct-to-consumer distribution and the shift to online shopping. The rating also considers Academy's aggressive financial strategies, including previously executed debt-financed dividend distributions and discounted debt repurchases, although the company has not undertaken aggressive actions over the past year. In addition, as a retailer, Academy needs to make ongoing investments in its brand and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy and data protection. Academy's ongoing offering of firearms and ammunition at a time when several large retailers have pulled back also represents a social consideration. At the same time, Academy's ratings benefit from the company's good liquidity and Moody's projections for a decline in debt/EBITDA to 5 times from 6.4 times as of May 2, 2020, driven by revolver repayment and better earnings. Moody's expects revenue and EBITDA to increase modestly through the balance of fiscal year 2020, driven by the company's value price points and diversified product assortment, which result in resilient performance in weak economic conditions. Academy is also benefiting from initiatives in merchandising, private label credit card and digital investment, as well as new customer acquisition during the coronavirus-driven store closures of other retailers that were considered non-essential. In addition, the rating positively considers the company's scale and solid market position in its regions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if recent positive operating performance trends reverse or liquidity deteriorates. The ratings could also be downgraded if the company undertakes aggressive financial strategy actions including material discounted debt repurchases, or fails to refinance its debt in a timely and economic manner. Quantitatively, the ratings could be downgraded should Moody's-adjusted EBIT/interest expense approach 1.0 time. The ratings could be upgraded if the company demonstrates sustained positive operating performance trends and maintains good liquidity, including solid positive free cash flow and ample revolver availability. Quantitatively, the ratings could be upgraded with expectations for Moody's-adjusted debt/EBITDA to be maintained below 5 times and EBIT/interest expense above 1.5 times. Academy, Ltd. is a US sports, outdoor and lifestyle retailer with a broad assortment of hunting, fishing and camping equipment, along with footwear, apparel, and sports and leisure products. The company operates 259 stores under the Academy Sports + Outdoors banner, which are primarily located in Texas and the southeastern United States, and its website. Academy generated approximately $4.9 billion of revenue for the twelve months ended May 2, 2020. The company has been controlled by an affiliate of Kohlberg Kravis Roberts & Co L.P. since 2011. The principal methodology used in these ratings was Retail Industry published in May 2018. ADVANCED GREEN: Unsecured Creditors to Get 9.0743% of Shares ------------------------------------------------------------ Advanced Green Innovations, LLC, and its wholly owned subsidiaries ZHRO Solutions, LLC, and ZHRO Power, LLC, submitted a First Amended Disclosure Statement. One objection was filed to the Disclosure Statement. The objection was filed by Cochise Investments, LLC, an entity owned and controlled by Kenneth Losch. The Cochise Objection contains several allegations, including allegations concerning the competitiveness of the CMT Technology, allegations of alleged avoidable transfers and resulting conflicts of interest for individuals serving as initial directors of the Reorganized AGI and an allegation that the Debtors lacked authority to initiate these bankruptcy proceedings. Separately, counsel for Mr. Losch and Cochise sent a letter to counsel for the Plan Proponents reciting many of the same allegations in the Cochise Objection (the "Losch Letter"). The allegations contained in the Cochise Objection and the Losch Letter are disclosed herein as part of this Disclosure Statement. Debtors' Assets and Liabilities The Plan Proponents estimate that valid proofs of claims filed in these cases may total as much as $230,000,000, which does not include amounts owed to the DIP Lender. The Plan Proponents estimate that of that $230,000,000.00, as much as $226,522,900 of those liabilities will convert to equity under the Plan. The Debtors' only assets of significant value are its patents, patent rights, intellectual property licenses and related early stage technology. The Debtors' patents and intellectual property licenses are disclosed on Appendix 7 of this Disclosure Statement. The Debtors' projected Effective Date balance sheet, listing the assets and liabilities of the of the Reorganized Debtors is attached to this Disclosure Statement as Appendix 3. A discussion of the liquidation value of the Debtors' assets in set forth in Section 8(c)(2) of the Disclosure Statement and a liquidation analysis prepared with respect to the liquidation value of the Debtors' assets is attached as Appendix 4 to this Disclosure Statement. Class 5 General Unsecured Claims are impaired. Holders of Class 5 Claims will agree to subordinate their claims, on a consensual basis, to the holders of Allowed Class 6 Claims. The Class 5 Claims will be satisfied by the issuance to holders of such Allowed Claims of Common Units equal to such holder's pro rata percentage share of the 9.0743% of the issued and outstanding Common Units of Reorganized AGI as of the Effective Date allocated to all unsecured creditors which convert in Classes 5, 7, 8, 9B, and 11, in full satisfaction of such Allowed Claim. In addition, holders of Allowed Class 5 Claims will receive that number of New Warrants that is equal to the number of Common Units issued to such holder on account of its Allowed Class 5 Claim. Class 7 Operating Unsecured Loan Claims are impaired. The Class 7 Claims will be satisfied by the issuance to holders of such Allowed Claims of Common Units equal to such holder's pro rata percentage share of the 9.0743% of the issued and outstanding Common Units of Reorganized AGI as of the Effective Date allocated to all unsecured creditors which convert in Classes 5, 7, 8, 9B, and 11, in full satisfaction of such Allowed Claim. In addition, holders of Allowed Class 7 Claims will receive that number of new warrants that is equal to the number of Common Units issued to such holder on account of its Allowed Class 7 Claim. Class 8 DA Claims are impaired. The Class 8 Claims will be satisfied by the issuance to holders of such Allowed Claims of Common Units equal to such holder's pro rata percentage share of the 9.0743% of the issued and outstanding Common Units of Reorganized AGI as of the Effective Date allocated to all unsecured creditors which convert in Classes 5, 7, 8, 9B, and 11, in full satisfaction of such Allowed Claim. The Debtors will release their rights to any DA Equity to the distributor which issued it and release any right, title and interest, including the right to receive profits in such distributor and any rights or protections under the distributor's organizational documents. In addition, holders of Allowed Class 8 Claims will receive that number of New Warrants that is equal to the number of Common Units issued to such holder on account of its Allowed Class 8 Claim. Class 9A Fraud Claims are impaired. The holders of the Class 9A Fraud Claims will be satisfied by the issuance to holders of such Allowed Claims of a pro rata portion of Common Units totaling 0.7174% of the issued and outstanding Common Units of Reorganized AGI as of the Effective Date in full satisfaction of such Allowed Claim. In addition, holders of Allowed Class 9A Claims will receive that number of New Warrants that is equal to the number of Common Units issued to such holder on account of its Allowed Class 9A Claim. Class 9B Securities Fraud/Damage Rescission Claims are impaired. The Class 9B Claims will be satisfied by the issuance to holders of such Allowed Claims of Common Units equal to such holder's pro rata percentage share of the 9.0743% of the issued and outstanding Common Units of Reorganized AGI as of the Effective Date allocated to all unsecured creditors which convert in Classes 5, 7, 8, 9B, and 11, in full satisfaction of such Allowed Claim. The Debtors will release any DA Equity to the distributor which issued it and release any right, title and interest, including the right to receive profits in such distributor and any rights or protections under the distributor's organizational documents. In addition, holders of Allowed Class 9B Claims will receive that number of New Warrants that is equal to the number of Common Units issued to such holder on account of its Allowed Class 9B Claim. Significant Recent Events Leading up to the Hearing to Approve the Disclosure Statement On May 20, 2020, counsel for the Debtors and counsel for the AHC received a letter (the "Losch Letter") from Mr. Philip J. Giles acting as counsel for each of Kenneth and Lori Losch, Dual Fuel, LLC and Cochise Investments, LLC (collectively, identified therein as the "Defendants"). Through the Losch Letter, the Defendants asserted various statements and allegations, including assertions that the Disclosure Statement omitted alleged material statements as identified in the Losch Letter. Counsel for the Debtors and Counsel for co-proponents AHC and CH4 each separately responded to the Losch Letter (the "Responses"). As further articulated in the Responses, the Plan Proponents dispute the false statements and accusations set forth in the Losch Letter. Although the Plan Proponents vehemently disagree with the allegations made by Losch in the Losch Letter, in the interest of full disclosure, the Plan Proponents attach the Losch Letter and Responses to this Discloser Statement as Appendix 9. Leading up to the hearing to consider the adequacy of the Disclosure Statement, the Plan Proponents continued to negotiate with the Committee concerning elements of the Plan. The Committee negotiations resulted in the Committee successfully negotiating additional warrants for their constituency, related reporting requirements and certain tag-along rights for Common Unit holders as more specifically set forth in the form of reorganized Debtors' operating agreement as attached to the Plan Supplement. Specifically, holders of Allowed Claims in Classes 5, 7, 8, 9A and 9B will receive one New Warrant for each Common Unit issued to such holder on the Effective Date. Each New Warrant is exercisable for one Common Unit at a purchase price of $0.05 per Common Unit. The New Warrants are non-transferable and must be exercised within 30 days following the Reorganized AGI's enhanced reporting at the end of the first and second full Calendar Quarters following the Effective Date. In addition, in response to the Committee's efforts, the reorganized Debtors have agreed to provide all Common Unit holders with enhanced reporting for the first two full Calendar Quarters during the New Warrant exercise period. The enhanced reporting will be made available to Common Unit holders within 30 days following the end of each of the first two full Calendar Quarters following the Effective Date and shall consist of the following: a. Financials prepared by the Reorganized AGI for each such Calendar Quarter including: i. P&L; ii. Statement of Cash Flow; and iii. Balance Sheet b. An executive summary of the status of business operations including: i. A factual summary of the performance of the company during the Calendar Quarter ended, including a description of contracts secured, expired, and cancelled; and ii. A projection of anticipated cash flow for the next Calendar Quarter. sharing. June 5, 2020 Disclosure Statement Hearing The Bankruptcy Court held a hearing to determine the adequacy of the Disclosure Statement on, June 5, 2020. Only one objection was filed to the Disclosure Statement. The objection was filed by Cochise Investments, LLC ("Cochise"), an entity owned and controlled by Kenneth Losch (the "Cochise Objection"). The Cochise Objection repeated many of the allegations contain in the Losch Letter and argued against approval of this Disclosure Statement. As with the Losch Letter, the Plan Proponents view the allegations made by Losch through the Cochise Objection, as a futile attempt to maintain control. The Cochise Objection advanced the following four allegations as to why the Disclosure Statement should not be approved: (1) the Disclosure Statement fails to address alleged avoidance claims against Comanche Gas Solutions, LLC, Tom Niccoli and Mike Brown, two directors from Debtors' initial Board of Directors; (2) the Disclosure Statement fails to address the risk that the Debtors' bankruptcy petitions filed by Terry Kennon, (the Debtors' President), were filed without proper authority; (3) the Disclosure Statement fails to address existing turbine technology that threatens the viability of the CMT System; and (4) the Disclosure Statement fails to provide a description of the funding required for the adversary litigation against Cochise, Dual Fuel, LLC, and Mr. Losch. The Plan Proponents briefly address each of the allegations below, but you are encouraged to review all of Appendix 9 and Appendix 10 for a more robust discussion of the allegations and responses thereto. Response to Allegation Comanche Gas, Tom Niccoli and Mike Brown. Losch established Virtual Gas, LLC ("VG") a company owned by Cochise, with the intention of delivering natural gas to oil and gas operations. To start the business, Losch borrowed $2 million (the "VG Loan") from MMSGAJ Family, LLC ("MMSGAJ"). Michael Brown is the managing member of MMSGAJ. MMSGAJ is an unsecured creditor to Power and AGI. VG defaulted on the loan. Comanche Gas Solutions, LLC ("CSG") is a company formed by MMSGAJ to foreclose on collateral which secured the VG Loan. Thomas Niccoli filed the organizational documents for CSG with the Delaware Secretary of State and set up the operating bank account for CSG, but has no ownership or management authority in CSG. Further, in July of 2019, CGS received the right to distribute American Power Group, Inc. ("APG"), dual fuel kits. According to Mr. Brown, the initial sale of these kits required the investment of substantial time and resources as further set forth in the letter from Alisa Lacey to Losch's counsel contained in Appendix 9. Losch and Cochise allege that CGS's right to distribute the dual fuel kits was an avoidable transfer from Debtor ZHRO Power, LLC. Losch and Cochise further allege that such alleged avoidable transfer creates a conflict of interest for Mr. Brown and Mr. Niccoli who are designated to serve as two of the initial directors of the Reorganized Debtors. Debtor's counsel, Michael Carmel, intends to fully investigate all credible allegations of Avoidance Actions and such claims are specifically preserved under Section 7.01 of the Plan. A more comprehensive discussion of this allegation and response are contained in Appendix 9 and Appendix 10 and you are encouraged to review all of Appendix 9 and Appendix 10 in their entirety. Response to Allegation (2): the Debtors' bankruptcy petitions filed by Terry Kennon, (the Debtors' President), were filed without proper authority. In the Arizona State Court proceeding CV2016-003940, Ken Losch was facing a motion for the immediate appointment of a receiver over his entity Advanced Green Technologies, LLC (AGT) and the Debtors. The Department of Justice was further seeking to end Mr. Losch's control of the Debtors. In order to avoid the appointment of a receiver over the Debtors and AGT, Mr. Losch, through his attorney, Henry Stein, executed the Stipulation Regarding Business Controls entered in case CV2016-003940. The Stipulation clearly and unequivocally gave Terry Kennon "control of AGI and its subsidiaries [to] act independently in his control of AGI and its subsidiaries, and not pursuant to the direction of Kenneth Losch." Mr. Losch's assertion that he maintained control of the Debtors and sole authority to place the Debtors in bankruptcy, cannot be reconciled with the stipulation entered in Arizona State Court CV2016-003940 which granted Mr. Kennon independent control of the Debtors and specifically not pursuant to the direction of Kenneth Losch. Further, Mr. Losch has participated, with counsel, during the 10-month history of these cases. In the extremely unlikely event the stipulation of the State Court were to be deemed not to be dispositive of this matter, the Plan Proponents believe that Mr. Losch's argument that the cases were not duly filed is barred by judicial and equitable estopple. Response to Allegation Existing Turbine Technology While the Plan Proponents acknowledge that turbines and many other competing technologies will continue to be a competitive threat to the prospects of the Reorganized Debtors, the Plan Proponents simple disagree with Mr. Losch's assessment that turbine technology threatens the viability of the CMT System. The Plan Proponents believe that the CMT9000 is best suited for "stranded gas" applications where power generation is required and an upsized version of the CMT core technology may be suitable for use with turbine engines, as well as other midstream applications. However, there are several other risk factors set forth in this Disclosure Statement concerning the CMT9000 technology which the reader should review. These include, without limitation, the specified risk factors under the headings: New Technology; The CMT9000 may not perform as expected; Competition for the CMT Unit; The Reorganized AGI may face significant competition; The Reorganized AGI must anticipate and respond to rapid technological changes; and There is no assurance that the Reorganized AGI's products and services will be accepted in the marketplace. Response to Allegation (4): the Disclosure Statement fails to provide a description of the funding required for the adversary litigation against Cochise, Dual Fuel, LLC, and Mr. Losch. The Plan Proponents believe that the Debtors' cost for prosecution of adversary proceeding 2:20-ap-00068-MCW against Defendants Dual Fuel, LLC, Kenneth and Lori Losch, and Cochise Investments, LLC, will be between $50,000 and $200,000. The Plan Proponents have briefly described the allegations raised by Mr. Losch and Cochise in Appendixes 9 and 10. To have fuller understanding of the allegation and the responses from the Plan Proponents, the reader is again encouraged to review all of Appendix 9 and Appendix 10 for a more robust discussion of these issues. A full-text copy of the First Amended Disclosure Statement dated June 8, 2020, is available at https://tinyurl.com/y9ygqxue from PacerMonitor.com at no charge. Attorneys for CH4 Power, LLC and Ad Hoc Committee of Creditors: Thomas J. Salerno Alisa C. Lacey Christopher C. Simpson (018626) STINSON LLP 1850 N. Central Avenue, Suite 2100 Phoenix, Arizona 85004-4584 Tel: (602) 279-1600 Fax: (602) 240-6925 E-mail: thomas.salerno@stinson.com alisa.lacey@stinson.com christopher.simpson@stinson.com Attorney for Debtors: Law Offices of MICHAEL W. CARMEL, LTD. 80 East Columbus Avenue Phoenix, Arizona 85012-2334 Telephone: (602) 264-4965 Arizona State Bar No. 007356 Facsimile: (602) 277-0144 E-mail: Michael@mcarmellaw.com About Advanced Green Innovations Advanced Green Innovations LLC and its subsidiaries are clean energy companies developing and commercializing an array of green technologies. Advanced Green Innovations, LLC, ZHRO Power, LLC, and ZHRO Solutions, LLC sought Chapter 11 protection (Bankr. D. Ariz. Case No. 19-11766, 19-11768, and 19-11771) on Sept. 16, 2019. In the petitions signed by Terry Kennon, president, Advanced Green and ZHRO Solutions were each estimated to have up to $50,000 in assets and $1 million to $10 million in liabilities. ZHRO Power was estimated to have up to $50,000 in assets and $10 million to $50 million in liabilities. The Debtors tapped Michael W. Carmel, Ltd. as their bankruptcy counsel; and Jaburg & Wilk, P.C. as their special counsel. CH4 Power, LLC, the DIP Lender, and the ad hoc committee of creditors are represented by Stinson LLP. The Office of the U.S. Trustee appointed creditors to serve on the official committee of unsecured creditors on Oct. 28, 2019. AEPC GROUP: Seeks to Hire Jeffrey S. Shinbrot as Legal Counsel -------------------------------------------------------------- AEPC Group, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Jeffrey S. Shinbrot, APLC as its legal counsel. The firm's services will include: (a) legal advice with respect to the powers, duties, rights and obligations of Debtor under the Bankruptcy Code; (b) the preparation of a Chapter 11 plan of reorganization and disclosure statement; and (c) the preparation of legal documents. The firm's attorney and paralegals will be paid at hourly rates as follows: Jeffrey S. Shinbrot $625 Paralegals $150 Shinbrot received pre-bankruptcy retainers in the total amount of $50,000. Jeffrey Shinbrot, Esq., disclosed in court filings that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey S. Shinbrot, Esq. Jeffrey S. Shinbrot, APLC 15260 Ventura Blvd., Suite 1200 Sherman Oaks, CA 91403 Telephone: (310)659-5444 Facsimile: (310)878-8304 Email: jeffrey@shinbrotfirm.com About AEPC Group AEPC Group, LLC is an Irvine, Calif.-based full-service, multi-discipline architectural, engineering and construction services firm with professional, technical and support personnel. AEPC Group sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 20-11611) on June 4, 2020. The petition was signed by AEPC Group President Ed Ghalib. At the time of the filing, Debtor disclosed total assets of $953,625 and total liabilities of $1,327,056. Hon. Theodor Albert oversees the case. Debtor is represented by Jeffrey S. Shinbrot, APLC. ALDRICH PUMP: Hires Kurtzman as Claims and Noticing Agent --------------------------------------------------------- Aldrich Pump LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Western District of North Carolina to employ Kurtzman Carson Consultants LLC, as claims, noticing and ballot agent to the Debtors. Aldrich Pump requires Kurtzman to: a. prepare and serve required notices and documents in the bankruptcy case in accordance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure in the form and manner directed by the Debtor and the Court, including (i) notice of the commencement of the case and the initial meeting of creditors under the Bankruptcy Code, (ii) notice of any claims bar date, (iii) notice of transfer of claims, (iv) notices of objections to claims and objections to transfers of claims, (v) notices of any hearings on a disclosure statement and confirmation of the Debtor's plan or plans of reorganization, including under Bankruptcy Rule 3017(d), (vi) notice of the effective date of any plan and (vii) all other notices, orders, pleadings, publications and other documents as the Debtor or Court may deem necessary or appropriate for an orderly administration of the case; b. maintain an official copy of the Debtor's schedules of assets and liabilities and statement of financial affairs, 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 sections 2002(i), (j) and (k) and those parties that have filed a notice of appearance pursuant to Bankruptcy Rule 9010; updated said lists 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 the filing of proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by the bankruptcy 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 on a customized proof of claim form provided to potential creditors; e. maintain a post office box or address for the purpose of receiving claims and returned mail, and process all mail received; f. for all notices, motions, orders or other pleadings or documents served, prepare and file or caused to be filed with the Clerk an affidavit or certificate of service within seven (7) business days of service which includes (i) either a copy of the notice served or the docket number and title of the pleading 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; g. process all proofs of claim received, including those received by the Clerk's Office, and check said processing for accuracy, and maintain the original proofs of claim in a secure area; h. maintain the official claims register for the Debtor on behalf of the Clerk; upon the Clerk's request, provide the Clerk with certified, duplicate unofficial Claims Register; and specify in the Claims Registers 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 amount asserted, (v) the asserted classifications of the claim, (vi) the applicable Debtor, and (vii) any disposition of the claim; i. provide public access to the Claims Register, including complete proofs of claim with attachments, if any, without charge; j. implement necessary security measures to ensure the completeness and integrity of the Claims Registers and the safekeeping of the original claims; k. record all transfers of claims and provide any notices of such transfers as required by Bankruptcy Rule 3001(e); l. relocate, by messenger or overnight delivery, all of the court-filed proofs of claim to the offices of Kurtzman, not less than weekly; m. upon completion of the docketing process for all claims received to date for each case, turn over to the Clerk copies of the claims register for the Clerk's review; n. 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 changes to the claims register; o. identify and correct any incomplete or incorrect addresses in any mailing or service lists; p. assist in the dissemination of information to the public and respond to requests for administrative information regarding the case as directed by the Debtor or the Court, including through the use of a case website and call center; q. if the case is converted to Chapter 7, contact the Clerk's Office within three (3) days of the notice to Kurtzman of entry of the order converting the case; r. thirty (30) days prior to the close of the bankruptcy case, request the Debtor submits to the Court a proposed Order dismissing Kurtzman and terminating the services of such agent upon completion of its duties and responsibilities and upon the closing of the bankruptcy case; s. within seven (7) days of notice to Kurtzman of entry of an order closing the Chapter 11 case, provide to the bankruptcy Court the final version of the claims register as of the date immediately before the close of the case; and t. 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. Kurtzman will be paid at these hourly rates: Securities Director/Solicitation Lead $215 Solicitation Consultant $205 Consultant/Senior Consultant $65-$210 Technology Consultant $35-$95 Analyst $30-$50 Prior to the Petition Date, on or about April 7, 2020, Aldrich's predecessor, the former Trane Technologies Company LLC, successor by merger to Ingersoll-Rand Company, paid Kurtzman a retainer totaling $60,000. The Debtors paid Kurtzman with an additional payment of $35,000 to replenish the Retainer to its original amount prior to the Petition Date. Kurtzman will also be reimbursed for reasonable out-of-pocket expenses incurred. Robert Jordan, partner of Kurtzman Carson Consultants 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. Kurtzman can be reached at: Robert Jordan Kurtzman Carson Consultants LLC 222 N. Pacific Coast Highway, 3rd Floor El Segundo, CA 90245 Tel: (310) 823-9000 Fax: (310) 823-9133 About Aldrich Pump LLC Aldrich Pump LLC and Murray Boiler LLC are subsidiaries of Trane Technologies, a publicly traded company. Trane Technologies is a global climate innovator that brings efficient and sustainable climate solutions to buildings, homes, and transportation. The North American headquarters of Trane Technologies, as well as the Debtors, are located in Davidson, North Carolina. Aldrich Pump and Murray Boiler sought Chapter 11 protection (Bankr. W.D.N.C. Lead Case No. 20-30608) on June 18, 2020. The Hon. Craig J. Whitley oversees the case. In the petition signed by Allan Tananbaum, chief legal officer, the Debtor was estimated to have $100 million to $500 million in both assets and liabilities. The Debtors tapped RAYBURN COOPER & DURHAM, P.A., JONES DAY, as attorneys; BATES WHITE, LLC, EVERT WEATHERSBY HOUFF, and K&L GATES LLP, as special counsels; ALIXPARTNERS, LLP, as financial advisor; and KURTZMAN CARSON CONSULTANTS LLC, as claims and noticing agent. ALL CARE NOW: Cash Collateral Use Continued Through July 31 ----------------------------------------------------------- Judge Deborah L. Thorne of the U.S. Bankruptcy Court for the Northern District of Illinois signed a sixth interim order authorizing All Care Now, LLC and Home Health and Infusion Options, Inc. to use cash collateral to pay post-petition expenses to third parties during the period through July 31. In return for the Debtors' continued interim use of cash collateral, Bank of America, N.A. is granted adequate protection for its asserted secured interests in Debtors' assets, which includes: (a) The Debtors will permit the Bank to inspect, upon reasonable notice, within reasonable business hours, the Debtors' books and records. (b) The Debtors must maintain and pay premiums for insurance to cover any insurable collateral from fire, theft and water damage. (c) Upon reasonable request, the Debtors must make available to the Bank evidence of that which constitutes its collateral or proceeds thereof. (d) Bank of America is granted replacement liens in assets that the Debtors acquire after the Petition Date, but only to the extent of the diminution in value of the assets in which it had pre-petition liens. A final hearing on the Cash Collateral Motion is scheduled to take place on July 30, 2020 at 9:30 a.m. About All Care Now LLC and HHIO All Care Now, LLC ("ACN") is a health care provider in Chicago, Illinois. ACN is in the business of coordinating necessary clinical care and healthcare services between providers and patients including administrative functions, insurance authorizations, pharmaceutical services, and nursing and physical therapy management. ACN's primary customers are home-health agencies. It does not contract directly with hospitals or doctors. Home Health and Infusion Options, Inc. also known as HHIO -- https://www.hhio.net/ -- provides management services to ACN, including the services of Christopher Kujawski and Devin Barrett as managers, use of facilities and equipment, marketing support, and the use of numerous software licenses used in the operation of ACN's business. ACN and HHIO sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Lead Case No. 19-33490) on Nov. 25, 2019. The petition was signed by Christopher Kujawski, manager/chief financial officer. At the time of the filing, ACN was estimated to have $1 million to $10 million in both assets and liabilities, while HHIO was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in debt. The Hon. Deborah L. Thorne is the case judge. HHIO is represented by FREEBORN & PETERS LLP. ALPHA KING: Case Summary & 5 Unsecured Creditors ------------------------------------------------ Debtor: Alpha King Electric LLC 6611 Hall of Fame Blvd Midland, TX 79706 Business Description: Alpha King Electric LLC -- https://www.alphakingelectric.net -- produces comprehensive oilfield electrical solutions designed for harsh midstream operations. Its technicians are equipped to upgrade, repair, program and manage electrical systems. Chapter 11 Petition Date: June 30, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-70080 Debtor's Counsel: B. Blaze Taylor, Esq. THE MOSTER LAW FIRM 4920 S. Loop 289 Ste. 101 Lubbock, TX 79414 Tel: 806-778-6486 E-mail: btaylor@themosterlawfirm.com Total Assets: $961,330 Total Liabilities: $1,421,436 The petition was signed by Eder Soto, president. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/mpgiOm AMERICAN DENTAL: Moody's Alters Outlook on B3 CFR to Negative ------------------------------------------------------------- Moody's Investors Service confirmed American Dental Partners, Inc.'s ratings including the Corporate Family Rating at B3, the Probability of Default Rating at B3-PD, and the first lien senior secured debt rating at B2. At the same time, Moody's changed the outlook to negative from rating under review. This concludes the rating review that was initiated on March 27, 2020. The confirmation of the B3 CFR reflects Moody's view that American Dental has adequate liquidity and can reduce variable costs and growth capital expenditures to manage through the public health emergency. While Moody's expects that there will be significant erosion of operating performance in the second quarter and third quarters, and perhaps beyond, depending on the duration of the coronavirus crisis, Moody's believes that American Dental will be able to restore its credit metrics by the end of 2021, including reducing debt/EBITDA to below 6.0x. The change of outlook to negative reflects the downside risks of a more severe or prolonged virus impact than Moody's currently forecasts. Further, the negative outlook reflects modest liquidity cushion should operating results deviate negatively from Moody's current forecasts. Confirmations: Issuer: American Dental Partners, Inc. Probability of Default Rating, Confirmed at B3-PD Corporate Family Rating, Confirmed at B3 Senior Secured Bank Credit Facility, Confirmed at B2 (LGD3) Outlook Actions: Issuer: American Dental Partners, Inc. Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE American Dental's B3 Corporate Family Rating reflects its high leverage, moderate free cash flow, and an aggressive growth strategy. Despite elevated spending to open new dental offices and acquire practices in recent years, revenues and earnings have remained relatively flat. The credit profile is also constrained by weaker operational performance resulting from volume declines experienced amidst the coronavirus pandemic. The rating benefits from American Dental's solid market presence within the growing dental service organization industry. American Dental has an adequate liquidity profile with $29 million of cash and a fully drawn $36 million revolving credit facility expiring March 2023. Moody's expects American Dental to generate negative free cash flow in 2020 due to the weakness related to the coronavirus pandemic. Further, there is a rising likelihood of a covenant breach over the next several quarters. However, Moody's expects that the company will conserve liquidity by reducing new office openings and growth capital expenditures. Moody's considers coronavirus to be a social risk given the risk to human health and safety. Aside from coronavirus, American Dental faces other social risks such as the rising concerns around the access and affordability of healthcare services. However, Moody's does not consider the DSOs to face the same level of social risk as many other healthcare providers. From a governance perspective, Moody's views American Dental's growth strategy to be aggressive given its history of acquisitions and high leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if credit metrics fail to improve once the pandemic ebbs, financial policies become more aggressive, or if there is any weakening of liquidity. Sustained negative free cash flow and weak interest coverage could also negatively affect the ratings. The ratings could be upgraded if the company significantly increases its revenue and diversity, and leverage approaches 5.0 times. Further, an upgrade would require meaningful improvement in free cash flow and liquidity. American Dental Partners, Inc. provides management services to affiliate dental centers, which are primarily focused on general dentistry and hygiene, with a growing focus on aesthetic segments (orthodontics, endodontics, periodontics). American Dental Partners, Inc. currently operates approximately 304 offices across 21 states. American Dental is majority-owned by JLL Partners, Inc. The company generated about $290 million in net patient service revenue as of March 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. ANDES INDUSTRIES: Hires Beus Gilbert as Special Counsel ------------------------------------------------------- Andes Industries, Inc., and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Arizona to employ Beus Gilbert McGroder PLLC, as special counsel to the Debtors. Andes Industries requires Beus Gilbert to provide the Debtors with legal services in connection with certain claims against Robins Kaplan LLP and Coppersmith Brockelman PLLC, including legal malpractice claims. Beus Gilbert will be paid on a rolling contingency fee basis, starting at 25% up to a maximum of 50% of recovery depending on the level of litigation. Leo Beus, partner of Beus Gilbert McGroder 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. Beus Gilbert can be reached at: Leo Beus, Esq. BEUS GILBERT MCGRODER PLLC 701 North 44th Street Phoenix, AZ 85008-6504 Tel: (480) 429-3001 Fax: (480) 429-3111 About Andes Industries Creditors EZconn Corporation, Crestwood Capital Corporation, and Devon Investment Inc. filed involuntary bankruptcy petitions against Andes Industries, Inc. and PCT International, Inc. under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Arizona. On Dec. 4, 2019, the Chapter 7 cases were converted to cases under Chapter 11 (Bankr. D. Ariz. Lead Case No. 19-14585). Judge Paul Sala oversees the cases. Sacks Tierney P.A. is the Debtors' legal counsel. Beus Gilbert McGroder PLLC, as special counsel. ANDREW CULLEN: Seeks to Hire Goering & Goering as Legal Counsel --------------------------------------------------------------- Andrew Cullen, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Goering & Goering, LLC as its legal counsel. The firm will assist Debtor in the preparation of a plan of reorganization and will provide other legal services in connection with its Chapter 11 case. The hourly rates for the firm's attorneys who will be primarily responsible for representing Debtor are as follows: Eric Goering $400 Robert Alfred Goering $400 Robert Goering $425 Goering received $13,760 for pre-bankruptcy work, $1,717 for the filing fee and $9,523 as retainer. Eric Goering, Esq., at Goering, disclosed in court filings that his firm does not have any connection with Debtor, creditors or any "party-in-interest." The firm can be reached through: Eric W. Goering, Esq. Robert Alfred Goering, Esq. Robert A. Goering, Esq. T. Martin Jennings, Esq. Goering & Goering, LLC 220 West Third Street Cincinnati, OH 45202 Telephone: (513) 621-0912 About Andrew Cullen Andrew Cullen, LLC offers residential customers electrical contracting services. It conducts business under the name Cullen Electric. Visit https://www.cullenelectriccincinnati.com for more information. Andrew Cullen sought Chapter 11 protection (Bankr. S.D. Ohio. Case No. 20-11715) on June 15, 2020. At the time of the filing, Debtor disclosed total assets of $155,629 and total liabilities of $1,056,076. Judge Jeffery P. Hopkins oversees the case. Debtor is represented by Goering & Goering, LLC. ASCENA RETAIL: Katie Bayne Quits as Director -------------------------------------------- Katie J. Bayne, a member of the Board of Directors of Ascena Retail Group, Inc., notified the Company of her decision to resign from the Board effective June 26, 2020. Ms. Bayne is a member of the class of directors whose terms of office expire at the Company's 2022 Annual Meeting of Stockholders. Ms. Bayne advised the Company that she has no disagreement with the Company on any matter relating to the Company's operations, policies or practices and the decision was based solely on personal reasons. Effective immediately, the Board has approved a reduction in the size of the Board from 11 to 10 directors. About Ascena Retail Ascena Retail Group, Inc. (Nasdaq: ASNA) -- http://www.ascenaretail.com-- is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. As of Feb. 1, 2020, the Company had $3.07 billion in total assets, $2.99 billion in total liabilities, and $76.6 million in total equity. * * * As reported by the TCR on March 20, 2020, S&P Global Ratings raised its issuer rating on Ascena Retail Group Inc. to 'CCC-' from 'SD' and maintained the 'D' rating on the term loan due August 2022. "The rating action reflects our view of the likelihood of a conventional default or a broad-based restructuring of Ascena's capital structure in the next six months. Our opinion considers the company's unsustainable capital structure, its still significant debt burden following the repurchases, and our expectation for weak performance amid a highly challenging operating environment. The rating also reflects our view that the recent coronavirus outbreak in the U.S. will further pressure store traffic and limit conventional refinancing prospects," S&P said. As reported by the TCR on April 16, 2020, Moody's Investors Service downgraded Ascena Retail Group, Inc.'s corporate family rating to Caa3 from Caa2. Ascena's Caa3 CFR is constrained by Moody's view that default risk is elevated as a result of the company's high leverage, 2022 debt maturities, and expectations for declining earnings over the next 12-18 months. AVAYA INC: Fitch Affirms 'B' LongTerm IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed Avaya Inc.'s Long-Term Issuer Default Rating at 'B'. Fitch has also affirmed the company's senior secured first-lien term loan ($2.6 billion outstanding) at 'BB-'/'RR2'. While operating performance is modestly weaker than Fitch's previous expectations, the company's credit-protection metrics remained solidly positioned within Fitch's rating sensitivities, aided by a $250 million prepayment on its term loan in November 2019. The Rating Outlook is Stable. KEY RATING DRIVERS RingCentral Strategic Partnership: On Oct. 31, 2019, Avaya closed on a strategic partnership with RingCentral Inc., a provider of global enterprise cloud communications, collaboration and contact center solutions. Avaya's transition to the cloud will be accelerated by the strategic partnership. The partnership is in the form of a commercial arrangement and not a joint venture. Through the partnership, on March 31, Avaya introduced Avaya Cloud Office by RingCentral, a unified communication as a service solution. For Avaya, this offering fills a gap in their offerings, as it completes a suite of unified communications, CC, UCaaS, contact center as a service and communications platform as a service solution on a global basis. As a part of the agreement, RingCentral paid Avaya $375 million, mostly for future fees, and for certain licensing rights. The payment consisted of $361 million in RingCentral common stock valued as of Oct. 31, 2019, and $14 million in cash. Avaya and RingCentral entered into an investment agreement whereby RingCentral also purchased 125 million shares of Avaya's 3% Series A convertible preferred stock for a total of $125 million. Avaya sold a significant portion of the RingCentral shares on Nov. 12, 2019 in an underwritten offering, realizing gains of $11 million. Using the proceeds from the commons stock and preferred sales, Avaya prepaid $250 million of its term loan in November, and over its first two fiscal quarters ending March 31, 2020, repurchased $330 million of common stock, or 26% of the shares outstanding relative to November 2019. Effect of Coronavirus Pandemic: Fitch believes Avaya operates in a low-risk sector, given its offerings of communications products, solutions and services. The company enabled its workforce to work remotely to a significant extent, and has been able to support its customers by providing services remotely instead of on-site. The company also implemented cost-saving and cash-management plans to reduce the impact of the coronavirus on its business and liquidity position. As one step to maintain its liquidity, the company suspended share repurchases, even though it has not used its full authorization. The company also borrowed $50 million under its asset-based loan as a precautionary measure. The shift to remote working could provide a benefit to future demand for the company's products and services. The company provided over 2 million temporary software licenses free of charge to companies globally in 2Q20 to enable their employees to work remotely. This initiative could lead to future revenue opportunities. Market Position Evolving: Fitch's existing IDR reflects the company's historically strong market position as a top-three provider in target markets, and an improved credit profile with significantly reduced interest expense and pension obligations upon emergence from Chapter 11 in late 2017. The ratings are limited by the competitiveness of the UC and CC businesses, including cloud-based solutions. The development and expansion of cloud-based offerings are crucial to the company's growth, including ACO. The partnership with RingCentral enables the company to focus its investments on CCaaS, CPaaS, collaboration and private cloud. Leverage Higher than Expected: Gross leverage at the parent was approximately 4.7x for the LTM ending March 31, 2020, and net leverage was 3.8x. Fitch estimates gross leverage and net leverage will be 4.9x and 3.7x, respectively, at the end of fiscal 2020, in a range appropriate for the current rating. Fitch assumes Avaya may carry more cash than normal (well into fiscal 2021) due to the uncertainty of the coronavirus pandemic. FCF Generation: Fitch estimates FCF could range from $150 million to $200 million over fiscal 2020-2022. Avaya's FCF metrics are affected by the accounting for the consideration advance, or prepayment, received from RingCentral in the form of RingCentral's common stock. At the close of the transaction, Avaya recorded $375 million in contract liabilities. Over time, the company will recognize revenues and reduce contract liabilities as seats are sold under the agreement and Avaya performs support services. The prepayment and subsequent recording of revenue by a reduction in contract liabilities will have a negative effect on working capital. Through fiscal 2Q20, Avaya received $294 million in cash, recorded in investing activities, due to the sale of stock received as a prepayment. Revenue from Software and Services: Software and services accounted for approximately 88% of revenue in fiscal 2Q20. Relatively stable software sales mitigate the effects of the legacy revenue declines within the UC segment. Avaya generated approximately 64% of total revenues from recurring contracts in fiscal 2Q20, up from 58% in fiscal 2019. Recurring support services contracts generally have contract tenures of one to five years; private cloud and managed services contract terms range from one to seven years. Broad Distribution Network: Avaya's indirect channel, with more than 4,000 active channel partners at the end of fiscal 2019, extends the company's sales reach to about 175 countries worldwide. Product revenue from indirect sales was 70% of total Products & Solutions segment revenue for fiscal 2018. Diversified Revenue Base: Avaya's revenue base is diversified from a customer, geographic and industry perspective. Avaya had more than 100,000 customers at the end of fiscal 2019, including 90% of the Fortune 100 companies. Approximately 46% of total revenue is generated outside the U.S. DERIVATION SUMMARY The global UC industry historically exhibited moderate concentration with the top three vendors -- Cisco Systems, Inc.; Avaya; and Microsoft Corporation (AA+/Stable) -- likely having more than a 50% combined market share, while additional competitors including Alcatel-Lucent Enterprise (ALE, subsidiary of China Huaxin Post and Telecom Technologies Co., Limited) and Mitel Networks Corp. maintain smaller shares. Recent trends, such as the entry of cloud-based competitors and hardware product commoditization, presented significant challenges to these legacy UC vendors. ALE's parent China Huaxin put limited resources into ALE since acquiring the business in 2014, making the long-term future uncertain. Microsoft is largely insulated from these pressures, having pursued a differentiated approach that centers on integration of third-party UC hardware into the company's enterprise software offerings. The CC market is similarly dominated by the leading vendors, including Avaya, Cisco and Genesys Telecommunications Laboratories Inc., which maintained a combined market share of more than 50%. Mitel is a notable smaller vendor. The CC market was also disrupted by emerging trends, including closer integration of contact center functionality with CRM functions and the entry of cloud-based competitors. In contrast to the UC market, legacy CC vendors have thus far been able to avoid revenue pressure, as enterprise customers continue to prefer traditional on-premise solutions. However, cloud-based offerings generated strong growth in SME and midmarket segments, and are gradually beginning to penetrate enterprise clients. The leading vendors made acquisitions in the cloud CC space, including Avaya's acquisition of Spoken Communications Inc., Cisco (Broadsoft, Inc.), Genesys (Interactive Intelligence Group Inc.) and Mitel's acquisition of ShoreTel, Inc. Avaya's primarily on-premise offerings allowed the company to maintain a relatively strong position among large enterprises. The company's cloud offering is in the early stages of growth. However, the company's results could be pressured if more seasoned cloud providers successfully penetrate enterprise segments. The company is addressing its cloud product portfolio through organic investment and the acquisition of Spoken in March 2018. Avaya's ratings reflect the company's historically strong market position as a top-three provider in target markets in addition to an improved credit profile with significantly reduced interest expense and pension obligations upon emergence from Chapter 11. The ratings are limited by secular challenges, near-flat revenues (albeit relatively stable after previously more rapid revenue declines) and market share loss in the UC segment, and uncertainties in the CC segment growth given its developing cloud strategy. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer Include: -- Revenue declines by 3.8% in fiscal 2020, and returns to modest 1%-2% growth in fiscal 2021 as the Avaya Cloud Office offering gains momentum. Growth approximates 3% annually thereafter. -- EBITDA margin range of 23%-24%; with margins higher in the out years due to the improved profitability of ACO relative to premise seat revenue. -- Capital intensity of 3%-4% due to investment in infrastructure for private cloud offerings. -- Fitch forecasts future debt repayments, beginning in fiscal 2021, to manage leverage toward the company's 2.5x net leverage target. Recovery Rating Assumptions: The recovery analysis assumes Avaya's enterprise value is maximized in a going-concern scenario versus liquidation. Fitch contemplates a scenario in which default may be caused by disappointing sales of the company's on-premise CC offering, along with continued secular pressure in UC. Additionally, while the strategic partnership with RingCentral is successful, ACO sales are lower than expected, and the company overall realizes lower revenue than expected in the transitions to subscription software sales and EBITDA margin pressure. Under this scenario, Fitch estimates a going-concern EBITDA of $535 million, which is approximately 30% below Fitch-calculated EBITDA for fiscal 2017, which was just prior to its exit from bankruptcy in December 2017. Fitch assumes Avaya will receive a going-concern recovery multiple of 5.5x EBITDA under this scenario. The 5.5x multiple compares with the bankruptcy exit multiple for Avaya of 8.1x, and the median multiple of 8.4x for recent transactions for low- to moderate-growth enterprise communications companies in the 8x-9x range, including ShoreTel, West Corp. (now Intrado Corporation), Polycom, Inc. and ALE's enterprise business, among others. The multiple is also modestly higher than the 5.0x Fitch used in previous analyses, given ACO's potential to improve Avaya's results. Fitch assumes the $300 million secured ABL is to be fully drawn at the time of default and a 10% administrative claim through a restructuring. Fitch-forecast going-concern EBITDA of $535 million and recovery multiple of 5.5x results in a post-reorganization enterprise value of $2.65 billion after the deduction of expected administrative claims and the assumed ABL drawn amount, resulting in 89% recovery for the $2.62 billion first-lien senior secured term loan, which allows for notching of +2 from the IDR of 'B' to 'RR2'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Improvement in the outlook for company revenues, including positive revenue growth, expansion of margins due to continued cost-reduction efforts and success in newer market areas, including cloud services; -- Strong FCF with FCF margins in the low double digits; -- Gross debt leverage sustainable below 4.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continued deterioration in revenue expectations beyond the forecast horizon, combined with margin pressure; -- Gross debt leverage sustained above 5.5x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch believes Avaya has solid liquidity based on the $553 million cash balance as of March 31, 2020 ($191 million was held outside the U.S.). Avaya indicates the amounts in excess of in-country needs that could be subject to restrictions were not material. Liquidity is also supported by an undrawn $300 million ABL facility. Avaya had $97 million of availability on the facility, as determined by the borrowing base, less $39 million of outstanding LOCs and guarantees. Fitch estimates FCF will range from $150 million to $200 million in fiscals 2020-2022. The debt structure, in addition to the ABL facility, includes a $2.624 billion first-lien term loan ($2.925 original amount) that matures in December 2024. Owing to a $250 million prepayment in November 2019 due to the sale of RingCentral common stock, Fitch believes there will be no further amortization payments on the term loan prior to maturity under the credit agreement. The parent also has outstanding $350 million in 2.25% senior unsecured convertible notes due in June 2023. Avaya sold a significant portion of the RingCentral shares in an underwritten offering on Nov. 12, 2019, realizing gains of $11 million. Using the proceeds from the common stock and preferred sales, Avaya prepaid $250 million of its term loan in November, and over its first two fiscal quarters ending March 31, 2020, repurchased $330 million of common stock, or 26% of the shares outstanding relative to November 2019, under a $500 million share-repurchase program initiated in conjunction with the strategic partnership with RingCentral. This fell within their 4Q19 guidance of 25%-28% of outstanding common shares. The company stated for now it will retain cash due to the coronavirus pandemic. The current market value of the remaining RingCentral shares held by Avaya as of March 31, 2020 approximates $120 million. 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). BAILEY RIDGE: Plan Admin's Sale of Iowa Properties Approved ----------------------------------------------------------- Judge Thad Collins of the U.S. Bankruptcy Court for the Southern District of Iowa authorized Bailey Ridge Partners LLC's Plan Administrator to sell the real properties and made a part thereof described in Exhibit A as (i) Grand Meadow Pork - 6195 A. Ave. Pearson, Iowa; (ii) Cycle - 2666 130th Street, Husker - 2620 130th Street, Woodbine, Iowa; (iii) Maas - 23713 Hwy 140, Remsen, Iowa; (iv) Hawkeye - 43641 240 St., Remsen, Iowa; (v) Galles - 45587 260th Street, Remsen, Iowa; (vi) Nilles - 44517 240th St., Remsen, Iowa; (vii) Ohlendorf - 21135 Tamarack Ave., Remsen, Iowa; and (viii) Kingsley - 30646 Hwy 140, Remsen, Iowa. The sale will be free and clear of liens. The Plan Administrator is authorized to engage Growthland Ag Realty, Inc. to assist the Plan Administrator in marketing and selling the Facilities. Without limiting the generality of the Motion, the Plan Administrator is authorized to enter into the Auction Agreement and the Auction Agreement may be reasonably revised by written agreement of the Plan Administrator and Growthland except that the compensation to Growthland may not be increased without further order of the Court. The breakup fees are limited as provided in the Order. The sale process will not commence until the written direction from the Plan Administrator to Growthland to commence the sale process provided, however, that the sale process may not be commenced prior to June 12, 2020. No breakup fees will be incurred until formal commencement of the sale process. The Debtor and its members, employees, advisors and consultants (including Jack Grubb) will cooperate fully with and refrain from interfering with the Plan Administrator or Growthland in the marketing and sale ofthe Facilities. Dubuque Bank and Trust Co. consents to the Motion and the sale of the Facilities. The Bank waives the right to credit bid except that the Bank may credit bid upon the prior written agreement of the Plan Administrator and the Official Committee of Unsecured Creditors. All bids must be approved by the Plan Administrator and the Bank. The Plan Administrator will cancel any sale of all or part of the Facilities if the Bank requests cancellation in writing prior to the acceptance of a bid or bids by the Plan Administrator and the Bank. The Plan Administrator may cancel the sale of all or part of the Facilities up to the time of a written acceptance of a bid or bids by the Plan Administrator and the Bank. The Plan Administrator and the Bank are not obligated to accept any bid or bids. A copy of the Exhibit A and the Agreement is available at https://tinyurl.com/yd5k55jt from PacerMonitor.com free of charge. About Bailey Ridge Partners Bailey Ridge Partners LLC, based in Kingsley, Iowa, filed a Chapter 11 petition (Bankr. N.D. Iowa Case No. 17-00033) on Jan. 11, 2017. In the petition signed by Floyd Davis, managing member, the Debtor estimated assets of less than $50,000 and liabilities of $10 million to $50 million. The Debtor is represented by Donald H. Molstad, Esq., at Molstad Law Firm. On March 2, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee retained Goldstein & McClintock LLLP as lead counsel; Dickinson Mackaman Tyler & Hagen, P.C., as Iowa counsel; and Houlihan & Associates, P.C., as accountant. The court confirmed the Debtor's Chapter 11 plan on June 11, 2018. Jeffrey R. Mohrauser was appointed as plan administrator. BAY CIRCLE: Court Trims Nilhan Financial Claims ----------------------------------------------- Bankruptcy Judge Wendy L. Hagenau issued an amended and restated order on the objection to the scheduled claims that Nilhan Financial, LLC filed in the Nilhan Developers, LLC and NRCT, LLC chapter 11 cases. Judge Hagenau rules that Nilhan Financial holds a claim in the case of Nilhan Developers in the amount of $15,434.07, plus $83,672, plus $2,300,000, based on the undisputed amount paid by the Debtor to Wells Fargo from the sale of the property. Judge Hagenau further orders that Nilhan Financial holds a claim in the case of NRCT in the amount of $91,524. On Dec. 6, 2019, Norcross Hospitality, LLC and Rohan and Niloy Thakkar filed an Objection to Scheduled Claims of Nilhan Financial, LLC in each of the Nilhan Developers, LLC and NRCT, LLC Chapter 11 Cases or in the Alternative, Amended Motion for Order: 1) Amending Schedules; or 2) In the Alternative, Requiring the Trustee to Amend Schedules as Necessary to Reflect Status of Certain Scheduled Claims as Disputed and Subject to Offset. In the Objection, Norcross et al. sought to disallow or reduce the scheduled claims of Nilhan Financial in the cases of NRCT, LLC and Nilhan Developers, LLC or alternatively to require or permit the schedules of Nilhan Developers and NRCT to be amended to show the Nilhan Financial claims as disputed. Norcross et al. objected to the $9,500,000 Nilhan Financial claim scheduled in the Nilhan Developers case in its entirety on several bases. First, they contend that the $9,500,000 claim listed on the Schedules was just an allocation of the Wells Fargo debt actually owed by Nilhan Financial to Wells Fargo and not debt owed by Nilhan Developers to Nilhan Financial. Norcross et al. contend further that, since all of Wells Fargo's claim has been satisfied in these bankruptcy cases, no further sums are due to Nilhan Financial. Secondly, Norcross et al. contend that the money Nilhan Developers received indirectly from the Wells Fargo loan did not come through Nilhan Financial, but instead came through Niloy, Inc. As such, they contend there is no consideration for an obligation by Nilhan Developers to Nilhan Financial. Finally, Movants contend that any claim of Nilhan Financial is subject to reduction through set-off or recoupment or counterclaim, particularly for the amount Nilhan Developers paid on the Wells Fargo debt owed by Nilhan Financial. Norcross et al. objected to the $13,953,776 scheduled claim of Nilhan Financial in the NRCT case in its entirety on the basis that there was no evidence in NRCT's books and records that NRCT ever received any proceeds of the Wells Fargo loan from Nilhan Financial. They contend, therefore, there was no consideration for any obligation to Nilhan Financial. Moreover, to the extent the number reflected on the NRCT Schedules was an allocation of the Wells Fargo debt, the Wells Fargo debt was satisfied. Norcross et al. contend therefore that NRCT would have no further obligation to Nilhan Financial. Responses to the Claim Objection were filed by the Chapter 11 Trustee for the Debtors; Douglas N. Menchise, the Chapter 7 Trustee for Nilhan Financial; and SEG Gateway, LLC and Good Gateway, LLC. The Respondents all oppose the Objection on the same basic grounds. First, they contend the Debtors, and specifically Chuck Thakkar, are estopped from objecting to the scheduled claims because the Schedules were filed under oath. The estoppel argument is also based on the statements in Nilhan Financials' Schedules, tax returns, and financial statements, and the 341 testimony of Chuck Thakkar in the Nilhan Financial case. The Respondents also contend that the obligations from NRCT and Nilhan Developers are independent obligations to Nilhan Financial and not merely an "allocation" of the Wells Fargo debt. They contend that any claim of set-off, recoupment or contribution requires evidence that has not been presented or that Movants do not have standing to assert the claim for recoupment or contribution or that the claim is time barred in the Nilhan Financial case. Judge Hagenau states that under Georgia law, a guarantor who pays the debt owed by its principal obligor has two separate and distinct remedies against the principal obligor: recoupment and subrogation. O.C.G.A. section 10-7-41 provides that "[p]ayment by a surety or endorser of a debt past due shall entitle him to proceed immediately against his principal for the sum paid, with interest thereon, and all legal costs to which he may have been subjected by the default of his principal." A guarantor's right to recoupment under O.C.G.A. section 10-7-41 is limited to the amounts paid on behalf of the primary obligor. The guarantor's payment of the debt of the principal obligor triggers the guarantor's right to "proceed immediately against the principal for the sum paid, with interest thereon, and all legal costs" incurred. If the primary obligor does not voluntarily reimburse the guarantor for amounts paid upon default, O.C.G.A. section 10-7-41 provides the guarantor a cause of action. According to the Bankruptcy Court, whether called setoff or recoupment, it is undisputed that Nilhan Developers paid $7,200,000 to Wells Fargo to satisfy Nilhan Financial's primary obligation to Wells Fargo. Movants contend the amount paid on the Wells Fargo debt was $7,364,958.19, which includes $7,300,000 paid for the property plus certain adequate protection payments made by Nilhan Developers. As the Chapter 7 Trustee observes, however, while it appears the purchase price for the Nilhan Developers property was $7,300,000, Mr. Thakkar contributed $100,000 of that at the closing. It is not disputed that Nilhan Developers received only $7,200,000 for the property from a party not already obligated on the Wells Fargo debt. The Court says it is also undisputed that the $9,500,000 obligation of Nilhan Developers to Nilhan Financial arose when Nilhan Developers borrowed money which originated from Wells Fargo. No one challenged Chuck Thakkar's testimony that the original source of the money was Wells Fargo. No one disputes that Nilhan Developers paid Bay Point Capital Partners, L.P., as assignee of Wells Fargo, $7,200,000 and that this payment occurred post-petition. It is not unusual that a creditor's prepetition claim would be satisfied or reduced by post-petition liquidation of assets -- that is the purpose of bankruptcy. So under any theory, Nilhan Developers should get the benefit of the $7,200,000 it paid on the Wells Fargo debt reducing the claim of Nilhan Financial accordingly. The Court allows Nilhan Financial a claim in this case in the amount of $9,500,000 less the $7,200,000 paid on the Wells Fargo debt on account of the sale of its property. The claims of Nilhan Financial in the amount of $83,672 and $15,434.07, to which no objections were made, are also allowed in the case of Nilhan Developers. With respect to NRCT, the Court finds no basis for allowing a claim to Nilhan Financial in the amount of $13,953,776. To the extent the Respondents are attempting to preclude a finding NRCT does not owe Nilhan Financial through judicial estoppel, the doctrine does not apply here as there has been no prior proceeding, judgment, or decision rendered on this matter. The Court will deem the Objection an amendment of the Schedules by NRCT and treat the statements in the Schedules as evidentiary admissions. The NRCT Schedules did list a claim in the amount of $13,953,776 to Nilhan Financial, but no other evidence supports that liability. According to the Court, there is simply no evidence of an actual transfer of funds from Nilhan Financial to NRCT to support the claimed amount. No note was alleged or established between NRCT and Nilhan Financial. Nilhan Financial never reflected an obligation in this amount in any tax returns or financial statements and did not show an obligation in any amount from NRCT on its tax return or financial statements after 2009. In fact, on the Nilhan Financial general ledger as of Dec. 31, 2011, NRCT is listed as owing Nilhan Financial zero dollars. Similarly, there is nothing in the Nilhan Financial case to demonstrate NRCT actually owed Nilhan Financial anything in the realm of $13 million. The Chapter 7 Trustee acknowledged at the hearing that NRCT was referenced nowhere in the Nilhan Financial Schedules and was never mentioned at the 341 meeting. Further, the Court appointed an examiner with respect to the Jointly Administered Debtors, and the subsequent analysis by the Examiner shows something different than the amounts reflected in the NRCT schedules. The Examiner's two reports both observe the intercompany accounting for NRCT was slightly different than the other Jointly Administered Debtors: while the books of the Jointly Administered Debtors other than NRCT showed specific amounts owed to Nilhan Financial related to the Well Fargo debt (and a corresponding entry by Nilhan Financial) and a separate "due to/from affiliates" account, NRCT in "prior years" consolidated its liability on the guaranties of the Wells Fargo debt with "Due to/from Owner." The "owner" of NRCT is not Nilhan Financial, but Rohan and Niloy Thakkar. This book entry, therefore, does not support a conclusion that the "Due to/from Owner" account is owed to Nilhan Financial. Further, no evidence has been presented as to how much of this entry is related to the Wells Fargo debt that under the Chapter 7 Trustee's theory may be owed to Nilhan Financial. The Court also notes that, in addition to the "Due to/from Owner" account, the NRCT books show a specific amount owed to Nilhan Financial. The Examiner's Report on Debtors' Intercompany Reconciliation shows the amount owed by NRCT to Nilhan Financial as of Dec. 31, 2014 was $85,517.17, while the amount owed to Nilhan Financial as of August 31, 2015 is reflected as $25,390.61. The detailed entries of transactions between Nilhan Financial and NRCT from January 1, 2014-August 31, 2015 are included in the report. This same report shows $14,538,049.89 was "Due to owner/member." Frankly, none of the numbers determined by the Examiner are exactly what is listed in the NRCT Schedules. But, nothing in the Examiner's reports, indicates or supports that NRCT actually owed $13,953,776 to Nilhan Financial. Since the Examiner's review and reports were performed after the Schedules were filed, and at the behest of the Court, the Court finds it more appropriate to rely on those reports. This is particularly true where no other evidence in these cases, or the Nilhan Financial cases supports a conclusion that NRCT owes Nilhan Financial the amount claimed. The Chapter 7 Trustee has provided no evidence NRCT owes Nilhan Financial the claim of $13,953,776. Accordingly, the Nilhan Financial claim of $13,953,776 in the NRCT case is disallowed. No objection was stated to the claim of $91,524, and that claim of Nilhan Financial is allowed. The bankruptcy case is in re: BAY CIRCLE PROPERTIES, LLC et al., Chapter 11, Debtors, Case No. 15-58440-WLH, (Jointly Administered) (Bankr. N.D. Ga.). A copy of the Court's Amended Order dated April 3, 2020 is available at https://bit.ly/36qNeSU from Leagle.com. About Bay Circle Properties, et al. Bay Circle Properties, LLC, DCT Systems Group, LLC, Sugarloaf Centre, LLC, Nilhan Developers, LLC, and NRCT, LLC, own 16 different real properties including significant undeveloped acreage. The properties also include office and warehouse buildings, retail shopping centers and free standing single tenant buildings. Bay Circle Properties, et al., filed Chapter 11 bankruptcy petitions (Bankr. N.D. Ga. Case Nos. 15-58440 to 15-58444) on May 4, 2015. The Chapter 11 cases are jointly administered. In the petition signed by Chuck Thakkar, manager, Bay Circle estimated $1 million to $10 million in assets and liabilities. The Debtors tapped John A. Christy, Esq., J. Carole Thompson Hord,Esq., and Jonathan A. Akins, Esq., at Schreeder, Wheeler & Flint, LLP, as bankruptcy attorneys. The Debtors engaged RG Real Estate, Inc., as real estate broker. Ronald L. Glass was appointed as Chapter 11 trustee for the Debtors. The trustee tapped Morris, Manning & Martin, LLP as his bankruptcy counsel; GlassRatner Advisory & Capital Group, LLC as his financial advisor; and Nelson Mullins Riley & Scarborough LLP as special counsel. BAY CLUB OF NAPLES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- The Bay Club of Naples, LLC (Lead Debtor) 20-05008 1001 Tenth Avenue South, #2 Naples, FL 34102 The Bay Club of Naples II, LLC 20-05009 1001 10th Avenue South, #102 Naples, FL 34102 Business Description: The Bay Club of Naples is a Florida limited liability company based in Naples engaged in the business of real estate development. Chapter 11 Petition Date: June 29, 2020 Court: United States Bankruptcy Court Middle District of Florida Debtors' Counsel: Scott Underwood, Esq. Megan W. Murray, Esq. Adam M. Gilbert, Esq. UNDERWOOD MURRAY, P.A. 100 North Tampa St 2325 Tampa, FL 33602 Tel: 813-540-8402 E-mail: sunderwood@underwoodmurray.com mmurray@underwoodmurray.com agilbert@underwoodmurray.com The Bay Club of Naples' Estimated Assets: $10 million to $50 million The Bay Club of Naples' Estimated Liabilities: $10 million to $50 million The Bay Club of Naples II's Estimated Assets: $10 million to $50 million The Bay Club of Naples II's Estimated Liabilities: $10 million to $50 million The petitions were signed by Harry M. Zea, manager. Copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/FW16um https://is.gd/YzjirB A. List of The Bay Club of Naples' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Louro Capital Lending/ $4,100,000 Steve Louro 2 Hunters Way Saint James, NY, 11780 2. Gulfshore Management Services, Inc. $1,400,000 /FM2631 Palmer Court Naples, FL, 34113 3. Genovese Joblove & Battista, P.A. $86,410 100 Southeast Second Street 44th Floor Miami, FL, 33131 4. Kapila Mukamal $59,482 1000 South Federal Highway Suite 200 Fort Lauderdale, FL, 333 Soneet Kapila Email: skapila@kapilamukamal.com 5. Shumaker, Loop & Kendrick, LLP/ $50,478 Mark Hildreth 240 South Pineapple Ave. 10th Floor Sarasota, FL, 34230-6948 6. Gray Robinson $47,977 PO Box 3068 Orlando, FL, 32802 7. Dow Jones/Wall St. Journal $32,294 PO Box 4137 New York, NV, 10261-4137 8. Robb Report $24,500 PO Box 376 Newburyport, MA, 01950 9. Solimini Enterprise, Inc. $14,400 153 Dwelley Street Pembroke, MA, 02359 10. Bogza Inc. $12,500 4145 SW Watson Ave. #460 Beaverton, OR, 97005 11. Johnson, Pope, Bokor, $6,961 Ruppel & Burns, LLP 911 Chestnut St. Clearwater, FL, 33756 12. Stoft Cooney Architects $6,498 633 9th Street North Suite 300 Naples, FL, 34102 13. Williams Scotsman $4,323 901 S. Bond St. Suite 600 Baltimore, MD, 21231-3357 14. City of Naples-Utility Billing Div. $2,148 735 8th Street South Naples, FL, 3410 15. Coleman, Yonanovinch & Koester, P.A. $2,139 4001 Tamiami Trail North Suite 400 Naples, FL, 34103-355 16. JW Craft, Inc. $1,039 329 Enterprise Ave. Naples, FL, 34104-4797 17. JF Holes CPA, Inc. $900 2500 Tamiami Trail North Suite 214 Naples, FL, 34103 18. U.S. Department of the Treasury $845 Bureau of the Fiscal Service PO Box 979101 St. Louis, MO, 63197-9000 19. Comcast Business $583 141 NW 16th Street Pompano Beach, FL, 33060-5250 20. RGA Design Forensics $525 600 South Magnolia Ave. Suite 375 Tampa, FL, 33606 B. List of The Bay Club of Naples II's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Louro Capital Lending/ $4,100,000 Steve Louro 2 Hunters Way Saint James, NY, 11780 2. Gulfshore Management Services, Inc. $1,400,000 /FM2631 Palmer Court Naples, FL, 34113 3. Genovese Joblove & Battista, P.A. $86,410 100 Southeast Second Street 44th Floor Miami, FL, 33131 4. Kapila Mukamal $59,482 1000 South Federal Highway Suite 200 Fort Lauderdale, FL, 333 Email: skapila@kapilamukamal.com 5. Shumaker, Loop & Kendrick, LLP $50,478 240 South Pineapple Ave. 10th Floor Sarasota, FL, 34230-6948 Email: mhildreth@shumaker.com 6. Gray Robinson $47,977 PO Box 3068 Orlando, FL, 32802 7. Dow Jones/Wall St. Journal $32,294 PO Box 4137 New York, NV, 10261-4137 8. Robb Report $24,500 PO Box 376 Newburyport, MA, 01950 9. Solimini Enterprise, Inc. $14,400 153 Dwelley Street Pembroke, MA, 02359 10. Bogza Inc. $12,500 4145 SW Watson Ave. #460 Beaverton, OR, 97005 11. Johnson, Pope, Bokor, $6,961 Ruppel & Burns, LLP 911 Chestnut St. Clearwater, FL, 33756 12. Stoft Cooney Architects $6,498 633 9th Street North Suite 300 Naples, FL, 34102 13. Williams Scotsman $4,323 901 S. Bond St. Suite 600 Baltimore, MD, 21231-3357 14. City of Naples-Utility Billing Div. $2,148 735 8th Street South Naples, FL, 3410 15. Coleman, Yonanovinch & Koester, P.A. $2,139 4001 Tamiami Trail North Suite 400 Naples, FL, 34103-355 16. Ardent Insurance $1,349 1004 Collier Center Way Suite 203 Naples, FL, 34110 17. JW Craft, Inc. $1,039 329 Enterprise Ave. Naples, FL, 34104-4797 18. JF Holes CPA, Inc. $900 2500 Tamiami Trail North Suite 214 Naples, FL, 34103 19. U.S. Department of the Treasury $845 Bureau of the Fiscal Service PO Box 979101 St. Louis, MO, 63197-9000 20. Comcast Business $583 141 NW 16th Street Pompano Beach, FL, 33060-5250 BLACK BOTTLE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Black Bottle Brewery, LLC 1611 S. College Ave. Suite 1609 Fort Collins, CO 80525 Business Description: Black Bottle Brewery is a privately held company in the beer making and restaurant business. Chapter 11 Petition Date: June 30, 2020 Court: United States Bankruptcy Court District of Colorado Case No.: 20-14472 Judge: Hon. Kimberley H. Tyson Debtor's Counsel: Gregory S. Bell, Esq. BELL, GOULD, LINDER & SCOTT P.C. 318 East Oak Street Fort Collins, CO 80524 Tel: 970-493-8999 Email: lfirnett@bell-law.com Debtor's Accountant: UNIFY CPAs P.C. Total Assets: $291,577 Total Liabilities: $1,611,278 The petition was signed by Sean Nook, manager. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/QA2W9m BOMBARDIER INC: To Reduce 11 Percent of Workforce ------------------------------------------------- Simple Flying reports that Bombardier said it would be reducing its workforce by approximately 2,500 employees, mostly in Canada. Altogether, that equates to around 11% of the workforce in its aviation sector. Ultimately, the cuts are in response to the extraordinary challenges and interruptions within the industry caused by the COVID-19 crisis. After suspending its manufacturing processes in response to the pandemic outbreak, the Canadian plane maker resumed operations over the last month. But, with deliveries of business jets expected to be down by around 30% year-over-year, the company is adjusting its workforce and operations to ensure its survival. Accordingly, Bombardier Aviation has made the difficult decision to reduce its workforce by approximately 2,500 employees. The majority of these reductions will impact manufacturing operations in Canada and will be carried out progressively throughout 2020. Bombardier will record a special charge of around $40 million for the workforce adjustment. The plane maker's global customer service operations have been mostly unaffected by the pandemic. Union says job cuts could be avoided In a report by Reuters, the International Association of Machinists and Aerospace Workers (IAM) said that the layoffs could be avoided. The union said that, "The layoffs would affect 717 of its members in Montreal who are now benefiting from an emergency wage subsidy program implemented by the Canadian government to counter the fallout from the outbreak of COVID-19. Bombardier had the means to avoid the layoffs today if it extended the program, which runs through the end of August 2020." However, a spokesperson for Bombardier Aviation said that to give the required notice of the job cuts, the company needed to act immediately. Plane makers hit hard by the pandemic. The global drop in the demand for air travel has seen airlines deferring and canceling orders for new aircraft. Boeing had orders dropped for 110 planes in April 2020. Moreover, Airbus reported that it had no new orders for May 2020. But, in a more positive light, the company had not had any orders canceled in April 2020 or May 2020. About Bombardier Inc. Headquartered in Montreal, Quebec, Canada, Bombardier Inc. is a global diversified manufacturer of business jets and rail transportation equipment. Revenues were $15.8 billion in 2019. BOOZ ALLEN: Moody's Raises CFR to Ba1, Outlook Positive ------------------------------------------------------- Moody's Investors Service upgraded its ratings for Booz Allen Hamilton Inc., including the company's corporate family rating (to Ba1 from Ba2) and probability of default rating (to Ba1-PD from Ba2-PD), and the senior secured bank facility ratings (to Baa3 from Ba1) and senior unsecured bond ratings (to Ba2 from B1). The speculative grade liquidity rating has also been upgraded (to SGL-1 from SGL-2), and the ratings outlook remains positive. According to lead analyst Bruce Herskovics, "The upgrade of the corporate family rating to Ba1, with a continuing positive rating outlook, reflects discernible progress from Booz Allen Hamilton's business strategy in recent years, with outsized organic growth via market share gains and sustainment of competitive scale within a consolidating defense services market." Herskovics continued, "While some questions exist around the federal budget for FY2021 and Booz Allen Hamilton's still unresolved DoJ investigation, we nonetheless see the company's market standing as a federal contractor growing solidly, with strong credit metrics and financial policies supportive of continuing positive ratings momentum." The rapid spread of the coronavirus outbreak, a deteriorating global economic outlook, low oil prices and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The actions reflect the impact on BAH of the deterioration in credit quality it has triggered, given its exposure to defense services contracting, which while less affected the most other sectors has not been immune to the adverse impact of the pandemic, and leaves the company vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. The following rating actions were taken: Upgrades: Issuer: Booz Allen Hamilton Inc. Corporate Family Rating, Upgraded to Ba1 from Ba2 Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Senior Secured 1st Lien Bank Credit Facility, Upgraded to Baa3 (LGD3) from Ba1 (LGD3) Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2 (LGD5) from B1 (LGD5) Outlook Actions: Issuer: Booz Allen Hamilton Inc. Outlook, Remains Positive RATINGS RATIONALE The Ba1 CFR broadly reflects BAH's size and backlog growth, a long-held position within defense/intelligence services contracting with good diversity of programs, relatively strong key credit metrics and generally measured and supportive financial policies. Across the past two-year period, BAH's annual revenue growth averaged 10% and EBITDA margins improved by 50bps to 11.2%, notwithstanding higher indirect costs and lower fixed price contracts. The margin growth reflects progress stemming from BAH's strategic shift in recent years to better fulfill the government's modernization initiatives. After supplementing its long-held consulting and program management heritage with greater technical capability and labor specialization, the company has over the past three years grown faster organically than any other major defense services contractor. Moody's expects that the company's revenues will exceed $8 billion in FY2021, and that leverage will approximate 3x and funds from operation-to-debt will fall into a range between 25% and 30%. Despite solid growth, BAH is still primarily a US defense/intelligence community contractor (about 70% of revenues), with the company's efforts to expand its commercial and foreign government business lines still a work in progress. The concentration on US defense/intelligence agencies increases vulnerability to a shift in federal spending priorities. The Ba1 rating also factors in recently increased risk associated with US defense budget uncertainty, as stimulus spending in response to the coronavirus crisis could threaten spending growth. The government's FY2021 will almost surely be partially funded under continuing resolution budget authority which, if prolonged, could reduce marketing opportunities and disrupt operational continuity. Governance related considerations are somewhat elevated for BAH, as well. Lack of clarity persists toward resolution of the US Department of Justice's civil and criminal investigation regarding the company's indirect cost charging practices with the US government, which commenced three years ago. Moody's continues to view the investigation as primarily one focused on possible violations related to the False Claims Act. Based on the size of BAH's contracts and the range of past penalties/settlements by defense contractors under similar investigations, Moody's believes the matter will unlikely culminate in a substantial charge, if indeed the investigation results in any material findings. BAH also suffered negative publicity related to former rogue employees who stole national security related data from classified programs. Notwithstanding the good backlog trend, good controls will be important to maintaining reputational strength and strong bidding qualifications. The speculative grade liquidity rating of SGL-1 reflects a very good liquidity profile stemming from high cash balances, a sufficiently sized backstop revolving credit facility, and a good level of covenant headroom under the company' bank credit facility financial maintenance covenants. Moody's expects that BAH will generate free cash flow approaching $300 million this year. BAH is in the third year of its plan to deploy $1.4 billion toward M&A, stock repurchases and/or dividends, and the company should be able to meet the target without cash balances declining meaningfully from current levels. The first lien bank facility rating is Baa3, one notch above the CFR, reflecting the presence of effectively junior unsecured notes that would be loss-absorbing in a stress scenario and thereby benefit first lien creditor recovery prospects. The Ba2 rating on the senior unsecured notes is one notch below the CFR, reflecting the potential for significant loss absorption for this creditor class in a default given the sizeable amount of secured and other priority claims in the company's consolidated capitalization. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward ratings momentum would depend on an expectation of leverage generally remaining at or below 3x and free cash flow of $300 million or more, with a healthy backlog and cash maintained at $350 million or higher. While BAH has not been acquisitive, it could be in the future, and credit metrics could in turn weaken from current levels. Confidence that risk appetite will remain within acceptable bounds for a prospectively higher rating will be a key ratings factor. Downward ratings pressure would mount with negative contract developments, an unexpectedly negative outcome from the US Department of Justice investigation, leverage exceeding 4x, and/or a significantly diminished liquidity profile. Booz Allen Hamilton Inc. is a publicly traded (NYSE: BAH) provider of management and technology consulting and engineering services to governments in the defense, intelligence and civil markets, global corporations and not-for-profit organizations. Booz Allen Hamilton is headquartered in McLean, VA, and reported revenues of approximately $7.5 billion for fiscal year ended March 31, 2020. The principal methodology used in these ratings was Aerospace and Defense Industry published in March 2018. BOSS OYSTER: Hearing on Apalachicola Properties Sale Continued -------------------------------------------------------------- Judge Karen K. Specie of the U.S. Bankruptcy Court for the Northern District of Florida continued the hearing on the proposed auction sale by Boss Oyster, Inc., and Seagrape Enterprises Apalachicola, Inc. of (i) Boss' real property located at 125 Water Street Apalachicola, Florida, and (ii) Seagrape's real property next door to Boss, located at 123 Water Street, Apalachicola, Florida, using the services of Weeks Auction Group. The Debtors proposed to sell the real properties free and clear of all liens, claims, encumbrances and interests. The hearing currently scheduled for June 25, 2020 is cancelled. The hearing will be rescheduled by the Court to take place in approximately 30 days. About Boss Oyster Inc. Boss Oyster Inc. owns and operates an oyster bar restaurant in Apalachicola, Fla. Boss Oyster and its affiliate Seagrape Enterprises of Apalachicola, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Lead Case No. 19-40357) on July 12, 2019. At the time of the filing, Boss Oyster was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The cases have been assigned to Judge Karen K. Specie. Bruner Wright, P.A., is the Debtors' bankruptcy counsel. BUZZARDS BENCH: Sept. 8 Auction of Substantially All Assets Set --------------------------------------------------------------- Judge David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas authorized the bidding procedures of Buzzards Bench, LLC and Buzzards Bench Holdings, LLC in connection with the auction sale of substantially all their assets. Within three business days after entry of the Order, the Debtors will serve copies of the Motion and the Order upon the Bid Notice Parties. On Aug. 11, 2020, the Debtors will file with the Court an initial schedule of executory contracts and unexpired leases that may be assumed and assigned as part of the Proposed Sale. Concurrently therewith, the Debtors will serve the Cure Notice upon each counterparty to the Potential Assumed Contracts. Prior to the commencement of the Sale Hearing and no later than 12:00 p.m. (CT) on Sept. 10, 2020, the Debtors will file with the Court the Assumed Contract Schedule. The counterparty to any Potential Assumed Contract that is added or removed from the Assumed Contract Schedule will be notified of such change no later than two business days from such determination. The Cure Amount Objection Deadline is 4:00 p.m. (CT) on Aug. 31, 2020. Any other objections to the Cure Notice or proposed assumption and assignment of Potential Assumed Contract will be filed no later than 4:00 p.m. (CT) on Sept. 9, 2020. The salient terms of the Bidding Procedures are: a. Bid Deadline: Aug. 31, 2020 at 4:00 p.m. (CT) b. Initial Bid: To the extent a Stalking Horse Bidder has been named, the initial overbid must exceed the Baseline Bid by the amount of the Break-Up Fee plus an additional $100,000. c. Deposit: 10% of the total purchase price d. Auction: An Auction is scheduled to take place on Sept. 8, 2020 commencing at 10:00 a.m. (CT) at the offices of Gray Reed & McGraw LLP, 1300 Post Oak Blvd., Suite 2000, Houston, TX 77056. Immediately following the conclusion of the Auction (if any), the Debtors will file with the Court a notice setting forth the results of the Auction. e. Bid Increments: $100,000 f. Sale Hearing: Sept. 10, 2020 at 3:30 p.m. (CT) g. Sale Objection Deadline/Deadline to object to assumption and assignment of the Assumed Contracts: Sept. 9, 2020 at 4:00 p.m. (CT) h. Any creditor that has a valid, perfected, unavoidable, and enforceable security interest in the Debtors' assets may make one or more credit bids for all or any portion of the secured claim(s) held by such Secured Party at the Auction, subject to the requirements of section 363(k) of the Bankruptcy Code. The Break-Up Fee to be paid to a Stalking Horse Bidder is approved pursuant to the terms and conditions set forth in the Motion and Bidding Procedures, and will be paid pursuant to the terms of an order approving a Proposed Sale, or a confirmation order approving an Alternative Transaction, as applicable. All time periods set forth in the Order or the Bid Procedures will be calculated in accordance with Bankruptcy Rule 9006(a). A copy of the Bidding Procedures and PSA is available at https://tinyurl.com/ya7m38pl from PacerMonitor.com free of charge. About Buzzards Bench Buzzards Bench -- https://www.buzzardsbench.com/ -- owns and operates natural gas production and processing assets located in Carbon and Emery Counties in Utah. Buzzards Bench was established in 2018 initially to acquire properties located in the Buzzards Bench field in the State of Utah. These properties were previously owned and operated by XTO Energy Inc., a subsidiary of ExxonMobil Corporation. Buzzards Bench, LLC, based in Houston, TX, and its debtor affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32391) on April 30, 2020. In its petition, the Debtor was estimated to have $10 million to $50 million in both assets and liabilities. The petition was signed by Jeffrey Clarke, chief executive officer and manager. The Hon. David R. Jones oversees the case. GRAY REED & MCGRAW LLP, serves as bankruptcy counsel. CAPITAL ASSET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Capital Asset Management, LLC P.O. Box 521 Armory, MS 38821 Business Description: Capital Asset Management, LLC is a is a full service financial services firm. Chapter 11 Petition Date: June 29, 2020 Court: United States Bankruptcy Court Northern District of Mississippi Case No.: 20-12204 Debtor's Counsel: J. Walter Newman IV, Esq. NEWMAN & NEWMAN 587 Highland Colony Parkway Ridgeland, MS 39157 Tel: 601-948-0586 E-mail: wnewman95@msn.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $50 million to $100 million The petition was signed by Konie D. Minga, manager. 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/MzMHRW CAREMORE MANAGERS: Allowed to Use Cash Collateral on Final Basis ---------------------------------------------------------------- Judge Jeffrey Norman of the U.S. Bankruptcy Court for the Southern District of Texas authorized Caremore Managers Inc. to use cash collateral subject to the terms described in the Agreed Final Order, until the earlier of (a) appointment of a Chapter 11 trustee, (b) conversion of this case to a chapter 7 case, (c) lifting of the automatic stay to allow Pacific Premier Bank or any other secured creditor to foreclose its liens on any of the Collateral or (d) confirmation of a plan. Pacific Premier Bank asserts a claim that substantially all of the Debtor's assets. The Bank is granted valid, binding, enforceable, and perfected replacement liens in the same validity and priority as existed on the Petition Date, in all currently owned or hereafter acquired property and assets of the Debtor's estate. In addition, the Debtor is directed to pay $4,500 to Pacific Premier Bank on or before each of the 15th and the 30th days of each month during the pendency of the case. About Caremore Managers Caremore Managers, Inc. is a privately held company in the traveler accommodation industry based in Bay City, Texas. It conducts business under the name Comfort Suites. Caremore Managers sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-32451) on May 4, 2020. The petition was signed by Kulwant Kaur Sandhu, Debtor's shareholder. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Jeffrey P. Norman oversees the case. Joyce W. Lindauer Attorney, PLLC, is the Debtor's legal counsel. CDS US INTERMEDIATE: Moody's Cuts PDR to D-PD Amid CCAA Filing -------------------------------------------------------------- Moody's Investors Service downgraded CDS U.S. Intermediate Holdings, Inc.'s probability of default rating to D-PD from Ca-PD/LD, corporate family rating to C from Ca, and senior secured first lien rating to C from Caa3. Moody's affirmed the company's C second lien secured term loan rating. The outlook was changed to stable from negative. The rating action follows the company's June 29, 2020 CCAA (Companies' Creditors Arrangement Act) filing. Downgrades: Issuer: CDS U.S. Intermediate Holdings, Inc. Corporate Family Rating, Downgraded to C from Ca Probability of Default Rating, Downgraded to D-PD from Ca-PD /LD Senior Secured First Lien Term Loan, Downgraded to C (LGD5) from Caa3 (LGD3) Senior Secured First Lien Revolving Credit Facility, Downgraded to C (LGD5) from Caa3 (LGD3) Affirmations: Issuer: CDS U.S. Intermediate Holdings, Inc. Senior Secured Second Lien Term Loan, Affirmed C to (LGD6) from (LGD5) Outlook Actions: Issuer: CDS U.S. Intermediate Holdings, Inc. Outlook, Changed to Stable from Negative RATINGS RATIONALE Cirque du Soleil's CCAA filing resulted in the downgrade of its PDR to D-PD. Subsequent to the rating action, Moody's will withdraw all the ratings. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Cirque du Soleil is a provider of live acrobatic theatrical performances. During the twelve months ended September 2019, the company generated about $950 million in revenues. CHARLES K. BRELAND: Trustee's Amended Compromise Junked ------------------------------------------------------- Bankruptcy Judge Jerry C. Oldshue, Jr. denied, without prejudice, the Joint Amended Motion of A. Richard Maples as Trustee, Osprey Utah, LLC and Levada EF Five, LLC to Approve Compromise. Debtor Charles K. Breland Jr. objected to the Motion. The Court finds that the Amended Compromise Motion is due to be denied without prejudice based upon the Trustee's failure to carry his burden of proof that the settlement meets the minimum standards of reasonableness. Hearing on the matter commenced Oct. 7, 2019, resumed Jan. 16, 2020 and concluded Jan. 17, 2020. Previously the Trustee, Osprey Utah, Levada and the Donados filed a Motion to Approve Compromise on August 4, 2017. The Prior Motion proposed a settlement which included: (1) transfer of Osprey Utah's property interests in Carbon and Emery Counties, Utah, which the Debtor holds jointly with creditor Levada EF Five, LLC to Levada; (2) dismissal of two appeals pending before the Eleventh Circuit; (3) dismissal of the Breland v. Levada adversary proceeding, alleging fraud by Levada; (4) transfer of the Breland Estate's interest in Patmos Energy to Levada; (5) termination of the Amended and Restated Agreement between Osprey and Levada; (6) dismissal of the Osprey Chapter 11; (7) assignment of a judgment held by the Donados against Osprey to Levada and (8) execution of broad releases in exchange for a reduction of Levada's proof of claim to an unsecured claim amount of $1,847,695.94 and Levada paying up to $250,000.00 on the Donados' claim. The Court conducted an evidentiary hearing on the Prior Motion and entered an Order denying the deal without prejudice on Feb. 14, 2018. The Court noted in its Denial Order that the ARA is complex and less than artfully drafted; there is a discrepancy between the ARA and the deeds as to whether Osprey's interest is one third or one-half of the remaining property; the ARA places multiple obligations on Osprey and Levada which upon default shifts ownership interest; the parties remain bound by the ARA and there is significant value in terminating the ARA. The Court determined that the Prior Motion fell below the lowest point in the range of reasonableness. Such finding was based upon numerous considerations including: Trustee's failure to market the Property; Trustee's failure to obtain an independent appraisal; concerns regarding the Levada appraisal methodology; failure to value the benefit to Levada of obtaining outright ownership of the Property; lack of evidence as to the significant value assigned to the transfer of rights under the ARA and lack of evidence as to the value of the proposed releases. In sum, the Court held that the Trustee failed to submit sufficient evidence to meet his burden of the reasonableness of the settlement. The settlement terms now proposed in the Amended Compromise Motion are as follows: (1) transfer of Osprey's property interests in Carbon and Emery Counties, Utah, to co-owner, Levada; (2) dismissal of one remaining appeal pending before the Eleventh Circuit; (3) dismissal of the Maples v. Levada preference action filed against Levada; (4) dismissal of the Breland v. Levada adversary proceeding alleging fraud upon the court by Levada; (5) transfer of the Breland Estate's interest in Patmos Energy to Levada; (6) termination of the ARA between Osprey and Levada; (7) dismissal of the Osprey Chapter 11; and (8) broad releases in favor of Levada, its principal, Adrian Zajac, Argos Investment Partners, LLC and their principals, agents, owners, members, attorneys, employees, affiliates and affiliated and related persons and entities in exchange for a reduction of Levada's claim to $1,700,000 bifurcated into an $850,000 secured claim and an $850,000 unsecured claim. The Donados are no longer involved as the Trustee acquired their interests by payment of $200,000, which will inure to the benefit of Levada under the terms of the Amended Compromise Motion. Judge Oldshue rules that the Trustee has failed to meet his burden to establish that the terms of the Amended Compromise Motion are fair, equitable and in the best interests of the Estate. The evidence presented on the Amended Compromise Motion did not satisfactorily address the Court's concerns previously articulated in the Denial Order, including: lack of an unbiased appraisal; flaws with the Trustee's Appraiser's methodology; failure to value the significant transfer of rights under the ARA; inequitable proposed releases and the absence of genuine effort by the Trustee to fully evaluate the potential for a section 363 sale. Further, the hearing on the Amended Compromise Motion brought to light additional matters weighing against approval of the settlement. It is apparent to the Court that the Trustee neglected to garner sufficient information to make a well-informed analysis and effectively negotiate tenable settlement terms to ensure fair value to the Estate. Further, the Trustee's apparent lack of concern for Breland's interest, despite the likely surplus nature of the case, is extremely disconcerting to the Court. The findings, in the view of this Court, constitute sufficient basis for denial of the Amended Compromise Motion. Collectively such deficiencies clearly evidence that the Trustee has not met his burden to establish that the settlement did not fall below the lowest standard of reasonableness. The Court also finds it noteworthy that on cross examination the Trustee unequivocally stated that the terms of the Amended Compromise Motion are worse than the Prior Motion. Linda Donado and her son, William Donado, were real estate agents who worked regularly for Charles Breland. A copy of the Court's Memorandum Opinion and Order dated April 3, 2020 is available at https://bit.ly/3bX3PPr from Leagle.com. About Charles Breland Jr. Charles K. Breland, Jr., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ala. Case No. 16-02272) on July 8, 2016, and is represented by Eric Slocum Sparks, Esq. of Eric Slocum Sparks PC. A. Richard Maples, Jr., was appointed as Chapter 11 trustee for the Debtor. Debtor Osprey Utah, LLC, owns real property. It is owned and controlled by Charles K. Breland, Jr. CHESAPEAKE ENERGY: Moody's Lowers Prob. of Default Rating to D-PD ----------------------------------------------------------------- Moody's Investors Service downgraded Chesapeake Energy Corporation's Probability of Default Rating (PDR) to D-PD from Ca-PD. Chesapeake's other ratings were affirmed, including its Ca Corporate Family Rating (CFR), Caa1 rating on its first lien term loan, Ca rating on its second lien notes and C rating on its senior unsecured notes. The outlook remains negative. These actions follow Chesapeake's June 28, 2020 voluntary filing of petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. Downgrades: Issuer: Chesapeake Energy Corporation Probability of Default Rating, Downgraded to D-PD from Ca-PD Affirmations: Issuer: Chesapeake Energy Corporation Corporate Family Rating, Affirmed Ca Senior Unsecured Shelf, Affirmed (P)C Senior Secured Term Loan, Affirmed Caa1 (LGD2) Senior Secured Notes, Affirmed Ca (LGD4) Senior Unsecured Notes, Affirmed C (LGD5) Outlook Actions: Issuer: Chesapeake Energy Corporation Outlook, Remains Negative RATINGS RATIONALE The Chapter 11 bankruptcy filing has resulted in a downgrade of Chesapeake's PDR to D-PD, reflecting the company's default on its debt agreements. The affirmation of the Ca CFR and other debt instrument ratings reflects Moody's view on expected recoveries. Shortly following this rating action, Moody's will withdraw all of Chesapeake's ratings. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Oklahoma City, OK-based Chesapeake Energy Corporation is a large independent exploration and production (E&P) company operating in several onshore US basins. The company's daily production averaged 473 mboe/d in the quarter ended March 31, of which 67% was natural gas. CHESAPEAKE ENERGY: S&P Keeps 'D' ICR Unchanged on Chapter 11 Filing ------------------------------------------------------------------- On June 28, 2020, oil and gas exploration and production company Chesapeake Energy Corp. voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. S&P's issuer credit rating and all issue-level ratings are unchanged at 'D'. However, based on the updated (lower) valuation of proved reserves provided in the filing, S&P is revising its recovery rating on Chesapeake's second-lien notes due 2025 to '2', indicating its expectation of substantial (70%-90%; rounded estimate: 85%) recovery to creditors in the event of default, from '1' (95%). S&P is also revising its recovery ratings on Chesapeake's unsecured notes to '6', indicating the rating agency's expectation of negligible (0%-10%; rounded estimate: 0%) recovery to creditors in the event of a default, from '5' (15%). Its '1' recovery rating on Chesapeake's first-lien last-out term loan due 2024 is unchanged, indicating S&P's expectation of very high (90%-100%; rounded estimate: 95%) recovery to creditors in the event of a default. Chesapeake has entered into a restructuring support agreement (RSA) with 100% of the lenders under its revolving credit facility, 87% of the holders of its first-lien last-out term loan due 2024, about 60% of the holders of its senior secured second-lien notes due 2025, and about 27% of the holders of its senior unsecured notes. The RSA includes a $925 million debtor-in-possession facility provided by certain of its bank lenders to fund operations during the bankruptcy process, as well as up to $2.5 billion in exit financing and $600 million in new equity. The company expects to emerge from bankruptcy in six to nine months. At emergence, assuming the RSA is executed as planned, the company expects to have about $2.0 billion in outstanding debt, down from nearly $9.2 billion. Issue Ratings--Recovery Analysis Key analytical factors -- Chesapeake is currently in default, having filed for Chapter 11 protection on June 28, 2020. -- S&P bases its valuation of Chesapeake's reserves on current commodity prices – Henry Hub natural gas of around $2.00/mmBtu and WTI crude oil prices of around $40/bbl, given the company's bankruptcy and potential emergence over the next six to nine months. -- S&P's analysis incorporates the $2 billion drawn on its credit facility ($2.3 billion borrowing base). Simulated default assumptions -- Default year: 2020 -- Jurisdiction/jurisdiction ranking assessment: U.S./Group A Simplified waterfall -- Chesapeake net estimated consolidated enterprise value (after 7% administrative costs): $5.8 billion -- First-lien debt claims: $2.1 billion -- Recovery expectations: Not applicable -- Total value available to first-lien last-out claims: $3.7 billion -- First-lien last-out debt claims: $1.6 billion -- Recovery expectations: 90%-100% (rounded estimate: 95%) -- Total value available to second-lien claims: $2.1 billion -- Second-lien secured debt claims: $2.5 billion -- Recovery expectations: 70%-90% (rounded estimate: 85%) -- Total value available to unsecured claims: $0 -- Senior unsecured debt claims (including deficiency claims): $3.8 billion -- Recovery expectations: 0%-10% (rounded estimate: 0%) All debt amounts include six months of prepetition interest. CIRQUE DU SOLEIL: Obtains $1.2-Bil. Buyout Offer from Creditors --------------------------------------------------------------- Josh Kosman, writing for New York Post, reports that a group of lenders offer to buy Cirque Du Soleil for $1.2 billion. A group of financial lenders is angling to acquire Cirque du Soleil in a possible bankruptcy reorganization — and they may partner with its charismatic co-founder, The Post has learned. The cash-strapped circus -- which was forced in March 2020 by the coronavirus pandemic to shutter dozens of shows in cities worldwide — on Monday, June 8, 2020, got a proposal from creditors to inject $300 million into Cirque du Soleil under a bankruptcy restructuring that also would convert the company's $900 million in debt into a 100-percent ownership stake, according to sources close to the situation. Under the terms of the proposal, the lenders will rehire nearly 4,700 circus workers -- or 95 percent of the company's payroll -- who were summarily fired in March, and will maintain the company's headquarters in Montreal, sources said. Angling to restart productions in the coming months, the creditors believe they can restore operations to breakeven profitability by the end of next year, partly by broadcasting its spectacular acts on TV and online, sources said. The creditor group has meanwhile been in talks with Guy Laliberte, the former fire eater who, with a ragtag group of street performers, co-founded Cirque du Soleil in the early 1980s. Laliberte became a billionaire when he sold the company to a group led by private-equity firm TPG in 2015 -- a debt-fueled deal that left Cirque du Soleil vulnerable to the coronavirus crisis, according to critics. Now, one source close to the talks said Laliberte remains a "free agent" and hasn't yet committed to a partnership with the creditor group. Nevertheless, late last month the 60-year-old clown said in an interview that after "careful consideration" he was looking to revive the circus "with a great team." "Its revival will have to be done at the right price. And not at all costs," Laliberte said. Buyout Giant Hoping to Profit The bidding group, which is being advised by Houlihan Lokey, hopes to get court approval to buy Cirque du Soleil out of bankruptcy by the end of August 2020. The creditors include Canada-based Catalyst Capital, as well as US investment firms Shenkman Capital, Providence Equity's Benefit Street Partners and CBAM. The latter is controlled by former Guggenheim Partners President Todd Boehly's Eldridge Industries, which owns more than 20 percent of the Los Angeles Dodgers, as well as Dick Clark Productions, The Hollywood Reporter, and film distributor A24. The offer came in response to a Monday, June 8, 2020, deadline for bids set by the Montreal-based circus, whose animal-free productions ditch lions, tigers and bears in favor of cutting-edge acrobatics, lively musical soundtracks and a storytelling approach. Other possible bidders include buyout firm TPG. Quebec's government, loosely partnered with the Texas-based buyout firm, said last week it would invest $200 million to keep Cirque operating and in the city under certain conditions. Nevertheless, insiders note the creditors have an advantage in the process, as Cirque du Soleil defaulted on a March 31, 2020 interest payment and is now in a forbearance period. Accordingly, any deal must be approved by creditors, who have the power to put the company into bankruptcy. "They can't get rid of us without paying us," a source in the lending group said. The creditors are making their move in part to stop TPG -- which last month threw J. Crew into Chapter 11 after saddling it with debt -- from reasserting itself and profiting from the bankruptcy, sources said. In March, Cirque du Soleil placed several of its worldwide trademarks into a different subsidiary. Last month, TPG lent $50 million against those trademarks to give it a bigger say in a restructuring process. The creditor group on Friday issued an emergency loan to Cirque du Soleil replacing the $50 million in TPG funding, sources said. About Cirque du Soleil Cirque du Soleil is a provider of unique live acrobatic theatrical performances. The company currently has 8 resident shows (7 in Las Vegas, 1 in Orlando, New York's Paramour closed on April 2017), and 9 touring shows. For last 12 months ending April 2, 2017, the company's revenue was $791 million. The company's founder, Guy Laliberte, retains a 10% minority interest after a leveraged buyout in July of 2015. TPG Capital Group (55% share), Fosun Capital Group (25% share) and Caisse de depot et placement du Quebec (10% share)purchased 90% the company using the proceeds of the credit facilities plus approximately $630 million of cash equity contribution. COBAL FOOD: Seeks Approval to Hire Brown Law Firm as Legal Counsel ------------------------------------------------------------------ Cobal Food Services, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ The Brown Law Firm as its bankruptcy counsel. The firm's services will include: (a) assisting Debtor in the preparation of its bankruptcy schedules, statement of financial affairs and other documents required by the court; (b) advising Debtor regarding matters of bankruptcy law; (c) representing Debtor in proceedings or hearings in the bankruptcy court and in any action in other courts where its rights may be litigated or affected; (d) conducting examination of witnesses, claimants or adverse parties and assisting Debtor in the preparation of reports, accounts and pleadings; and (e) assisting Debtor in the negotiation, formulation, confirmation and implementation of a plan of reorganization. The firm will be paid at hourly rates as follows: Attorneys $350 Legal Assistants/Paralegals $125 Brown Law Firm received a retainer of $10,000, of which $1,717 was used to pay the filing fee. Jerome Brown, Esq., the firm's attorney who will be handling the case, disclosed in court filings that he and his firm do not have any connection with Debtor, creditors or any other "party-in-interest." Brown Law Firm can be reached at: Jerome A. Brown, Esq. The Brown Law Firm 13900 Sawyer Ranch Road Dripping Springs, TX 78620 Telephone: (512) 306-0092 Facsimile: (512) 521-0711 Email: jerome@brownbankruptcy.com About Cobal Food Service Cobal Food Service, LLC is a food wholesaler, with multiple locations across Texas. Its Grab & Go division specializes in food programs that include a variety of craft homemade sandwiches, salads and snack platters. Visit www.cobalfood.com for more information. Cobal Food Service sought Chapter 11 protection (Bankr. W.D. Tex. Case No. 20-10590) on May 15, 2020. The petition was signed by Cobal Food President Ricky Collier. Debtor disclosed total assets of $495,876 and total liabilities of $1,720,793 as of March 31, 2020. Judge Tony M. Davis oversees the case. Debtor has tapped The Brown Law Firm as its bankruptcy counsel. COBAL FOOD: Seeks Approval to Hire George W. Stone as Accountant ---------------------------------------------------------------- Cobal Food Services, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ George W. Stone P.C. as its accountant. The firm will provide the following services: (a) work with Debtor's managing member and staff and its legal counsel, The Brown Law Firm, to provide accounting and financial support services; (b) prepare tax returns, operating reports and any other financial reports required in Debtor's Chapter 11 case; (c) obtain IRS account transcripts and prepare summary of Debtor's pre-filing IRS liability and filing compliance; and (d) review with Debtor's managing member and legal counsel. The firm will charge an hourly fee of $200. It received a retainer of $5,000 from Debtor. George Stone, a certified public accountant, disclosed in court filings that he and his firm do not have any connection with Debtor, creditors and any other "party-in-interest." The firm can be reached at: George W. Stone, CPA George W. Stone, P.C. 101 College Street Dripping Springs, TX 78620 Telephone: (512) 829-5288 Facsimile: (512) 829-5131 Email: gstone@stonetaxadvisors.com About Cobal Food Service Cobal Food Service, LLC is a food wholesaler, with multiple locations across Texas. Its Grab & Go division specializes in food programs that include a variety of craft homemade sandwiches, salads and snack platters. Visit www.cobalfood.com for more information. Cobal Food Service sought Chapter 11 protection (Bankr. W.D. Tex. Case No. 20-10590) on May 15, 2020. The petition was signed by Cobal Food President Ricky Collier. Debtor disclosed total assets of $495,876 and total liabilities of $1,720,793 as of March 31, 2020. Judge Tony M. Davis oversees the case. Debtor has tapped The Brown Law Firm as its bankruptcy counsel. COMARK HOLDINGS: Plans to Restructure Under CCAA ------------------------------------------------ Aditi Sebastian, writing for Reuters, reports that Comark Holdings Inc. announces its intent to restructure the company due to the fallout brought by the coronavirus pandemic. On June 3, 2020, Comark announced the plan to restructure the company under the Companies' Creditors Arrangement Act (CCAA) as the fallout from the COVID-19 pandemic hit the Canadian apparel retailer's business. Apparel retailers have been facing mounting debt and bankruptcies as the economic damage brought on by the pandemic has forced store closures and pressured discretionary spending. The fashion retailer's Ricki's, Cleo and Bootlegger websites will remain operational, Comark said, adding it would optimize its store footprint during the restructuring. Canada's Aldo Group had also said it would restructure under the CCAA last month, as virus-led lockdowns weighed on the footwear retailer's business. The CCAA is a Canadian Federal Act that allows large corporations to restructure their finances and avoid bankruptcy, while allowing creditors to receive some form of payment for amounts owed to them. The company, which was bought by private equity firm Stern Partners in 2015, said it expects its principal shareholder to participate in the restructuring process and to submit a transaction proposal that would allow it to emerge from CCAA protection. About Comark Holdings Inc. Comark holdings Inc. is a leading Canadian fashion retailer founded in 1976. It serves customers through three affiliated companies: Cleo, Ricki's and Bootlegger. CORECIVIC INC: Fitch Affirms BB- LongTerm IDR, Outlook Negative --------------------------------------------------------------- Fitch Ratings has affirmed CoreCivic, Inc.'s (NYSE: CXW) Long-Term Issuer Default Rating (IDR) at 'BB-' and senior unsecured notes ratings at 'BB-'/'RR4'. In addition, Fitch has affirmed CXW's secured term loans and revolving credit facility at 'BB+'/'RR1', two notches above the IDR due to the seniority of these instruments and higher expected recovery under a default scenario. The Rating Outlook is Negative. The ratings affirmation balances potential improvements in CXW's free cash flow from pursuing strategic alternatives with the ongoing capital access challenges of the private prison sector. Fitch believes CXW could unselect REIT status as a result of its strategic review, which should add $150 million to $200 million of retain cash flow for debt reduction and investments. However, the company's access to attractively priced public equity and debt capital remains weak relative to 'BB' category industrial corporates, largely due to heightened scrutiny and evolving environmental, social and governance (ESG) policies and practices of key institutional lenders and investors. Positive rating momentum is unlikely absent sustainable improvements in bank and capital markets access and/or a material change in financial policy and leverage levels. Fitch will assess the company's ability to replace existing bank syndicate members and access new and existing capital sources during the one-to-two-year Outlook horizon, including public and private bonds and equity. Fitch would view positively the issuer's willingness and ability to prepay or timely refinance its 2022 and 2023 debt maturities. KEY RATING DRIVERS Inconsistent Access to Capital: Fitch believes CXW's limited access to traditional capital sources is a primary driver in its decision to consider conversion to a non-REIT corporate structure as institutional capital providers incorporate ESG considerations into their investment strategies. Four of the lead lenders in CXW's $1.0 billion secured credit facility announced in 2019 that they would stop lending and providing financial services to the private prison industry, and other banks have publicly announced plans to stop lending to private prison operators. CXW's outstanding bonds trade at yields that are consistent with 'B' category ratings. Fitch views market pricing as a secondary rating consideration that can inform capital access and refinancing risk. The ability to retain capital in a non-REIT corporate structure will likely decrease the need for external financing, and the issuance of a senior secured term loan B in late 2019 is a positive signal that prison REITs will retain access to the secured loan markets, albeit at a higher price (L+450). However, Fitch will assess the ability of the issuer to prove access to the debt and equity capital markets comparable to 'BB' category rated peers over the one-to-two-year Outlook horizon. Possible De-REITing a Credit Positive: Fitch views CXW's intention to convert to a non-REIT corporate structure a credit positive. De-REITing would permit the issuer to retain significant FCF before dividends, creating capacity to deleverage and reducing the issuer's reliance on capital markets. Before the coronavirus pandemic, the issuer's guidance indicated leverage would sustain above 4.0x through 2020 and net debt to recurring operating EBITDA was 4.3x for the TTM ended March 31, 2020. Fitch's forecast does not assume any future dividend payments and expects the issuer to use disposition proceeds and retained cashflow to deleverage. Given the negative impacts from the coronavirus, Fitch forecast net debt to recurring operating EBITDA to remain elevated in the mid-4x range in 2020, before declining to the low- to mid-3x range by year-end 2021. Fitch estimates that the three quarters of suspended dividend payments should lower net debt to recurring operating EBITDA by around 0.4x in fiscal 2020 compared to Fitch's previous forecast. The issuer has publicly disclosed that the suspension of dividends starting in 2Q20 would not impair its REIT status for the 2020 tax year due to provisions under the CARES Act. The issuer has also announced the possibility of recycling capital invested in its leased assets portfolio, which Fitch estimates would generate around $206 million in net proceeds ($428 million aggregate purchase price of government-leased office assets, net of $223 million in mortgage debt outstanding at March 31, 2020). Coronavirus to Pressure Occupancy and Expenses: Fitch expects U.S. prison REITs will see lower revenues, EBITDA and FCF as the coronavirus pandemic reduces occupancy rates. Fitch expects prison occupancy rates to decline amid early releases related to the coronavirus outbreak, declining overall crime rates and lower detention rates by U.S. Immigration and Customs Enforcement, CXW's largest customer at 28% of revenue at March 31, 2020. Fitch's CXW rating case provides for a 210bps occupancy decline and increased operating expenses associated with higher labor and personal protective equipment (PPE) costs. Fitch estimates that roughly 74% of CXW's operating expenses are fixed, which exacerbates the impact of occupancy loss on cash flows. Fitch's rating case assumes half of the occupancy loss reverts in each of 2021 and 2022 and operating expenses normalize in 2021. Other Rating Drivers Unchanged: CXW retains a strong competitive position in the private prison industry as one of the two largest providers. The 'BB-' ratings are offset by high tenant and asset concentrations, as well as the limited contingent liquidity of CXW's correctional assets. Prisons have limited to no alternative uses, and the properties are often in rural areas. The company has never obtained a mortgage on any of its owned prison properties, exhibiting a lack of contingent liquidity, and there is not a deep property transaction market for this property type. Fitch would view increased institutional interest in secured lending for owned prisons throughout business cycles as a positive credit characteristic. Secured Notching: Fitch rates the secured term loans and revolving credit facility 'BB+'/'RR1', two notches above the IDR, as they are effectively senior to the unsecured bonds. Fitch would expect superior recovery under a default scenario. ESG - Exposure to Social Impacts: CXW has an ESG Relevance Score of '5' for Exposure to Social Impacts due to the pullback of U.S. and international banks, which has a negative impact on the credit profile, and is highly relevant to the rating. DERIVATION SUMMARY CXW's ratings consider the contractual nature of the company's cash flows, balanced by the limited alternative uses and secured mortgage debt availability for CXW's corrections assets, as well as the cash retention constraints stemming from the REIT tax election. As a result, Fitch analyzes the company more like a traditional cash flow-generating corporate entity as opposed to an asset-rich equity REIT. Despite being strong by U.S. equity REIT standards, CXW's leverage in the 4x range and fixed-charge coverage of 3.0x-4.0x are insufficient for investment-grade ratings, given less robust institutional investor and lender demand for the company's assets. 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 -- CPI-based annual increases in revenue per compensated man-day through 2023; -- Fitch has included a coronavirus reserve within operating EBITDA that reduces occupancy by 210bps along with a 250bps increase in fixed operating expenses associated with higher labor and PPE costs; -- Fitch assumes half of the occupancy loss reverts in each of 2021 and 2022 and operating expenses revert to normalized levels in 2021; -- CXW starts paying U.S. corporate tax rate of 21% on pre-tax income starting fiscal 2021; -- Dividend remains suspended after 1Q20; -- Capital deployment limited to acquisitions or dispositions closed or under contract and development expenditures delayed into 2021; -- The company sells its government-leased office properties in 2021-2022; -- Credit facility and term loans refinanced at higher rates and revolving credit facility drawn for financing needs on the margins; -- Repayment of $250 million of bonds due 2022 and $350 million of bonds due 2023 using retained cash flows. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Improvements in capital lending from financial institutions, including the issuer's ability to replace syndicate members and access to alternative sources of capital (e.g. private placement debt, joint ventures (JVs), or mortgage lending activity in the private prison sector); -- Prepay or timely refinance the 2022 and 2023 debt maturities; -- Fitch's expectation of net debt to recurring operating EBITDA sustaining below 4.0x in combination with higher retained cash flow after dividends. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Deterioration in the capital-raising environment indicating reduced financial flexibility and/or a weakened liquidity profile; -- Fitch's expectation of net debt to recurring operating EBITDA sustaining above 5.0x; -- Fitch's expectation of REIT fixed-charge coverage (recurring operating EBITDA adjusted for straight line rents and maintenance capex relative to interest and preferred dividends) sustaining below 3.0x; -- Decreasing market share, increased pressure on per diem rates from customers and/or profitable contract losses; -- Material political decisions negatively affecting the long-term dynamics of the private correctional facilities industry. LIQUIDITY AND DEBT STRUCTURE Improved Liquidity: CXW decision to suspend its dividend starting in 2Q20 and intention to convert to a non-REIT corporate structure supports the liquidity profile. Excess cash flows usually support maintenance capex, prison construction, debt reduction and other general corporate activities. Fitch estimates CXW's sources of liquidity (unrestricted cash, availability under its $800 million secured revolver and estimated retained operating cash flows) cover its uses (debt maturities, estimated recurring maintenance capex, and committed development expenditures) by around 5x through Dec. 31, 2021. Fitch estimates that CXW has adequate liquidity from retained FCF and under its $800 million revolver to address its debt maturities through 2022. However, the company will need to replace at least four lead lenders that have publicly announced plans to stop lending to private prison operators at, or before its revolver matures in April 2023. CXW has $350 million of unsecured bonds maturing on May 1, 2023. ESG CONSIDERATIONS CXW has an ESG Relevance Score of '5' for Exposure to Social Impacts category due to the pullback of U.S. and international banks, which has a negative impact on the credit profile and is highly relevant to the rating. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). COVIA HOLDINGS: Case Summary & 50 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Covia Holdings Corporation 3 Summit Park Drive Suite 700 Independence, Ohio 44131 Business Description: The Debtors provide diversified mineral-based and material solutions for the energy and industrial markets. The Debtors produce a specialized range of industrial materials for use in the glass, ceramics, coatings, foundry, polymers, construction, water filtration, sports and recreation, and oil and gas markets. Visit www.coviacorp.com for more information. Chapter 11 Petition Date: June 29, 2020 Court: United States Bankruptcy Court Southern District of Texas Twenty-eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Covia Holdings Corporation (Lead Debtor) 20-33295 Covia Specialty Minerals Inc. 20-33299 Covia Finance Company LLC 20-33302 Alpha Resins, LLC 20-33318 Best Sand Corporation 20-33300 Best Sand of Pennsylvania, Inc. 20-33297 Bison Merger Sub I, LLC 20-33296 Black Lab LLC 20-33301 Cheyenne Sand Corp. 20-33305 Construction Aggregates Corporation of Michigan, Inc. 20-33303 Fairmount Logistics, LLC 20-33293 Fairmount Minerals, LLC 20-33310 Fairmount Santrol Inc. 20-33313 FML Resin, LLC 20-33298 FML Sand, LLC 20-33304 FML Terminal Logistics, LLC 20-33307 FMSA, Inc. 20-33315 Mineral Visions, Inc. 20-33316 Self-Suspending Proppant LLC 20-33306 Shakopee Sand LLC 20-33309 Specialty Sands, Inc. 20-33311 Standard Sand Corporation 20-33319 TechniSand, Inc. 20-33320 Wedron Silica Company 20-33308 West Texas Housing LLC 20-33312 Wexford Sand Co. 20-33314 Wisconsin Industrial Sand Company L.L.C. 20-33317 Wisconsin Specialty Sands, Inc. 20-33294 Judge: Hon. Marvin Isgur Debtors' Counsel: Jonathan S. Henes, P.C. Joshua A. Sussberg, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 Email: jonathan.henes@kirkland.com joshua.sussberg@kirkland.com - and - Benjamin M. Rhode, Esq. Scott J. Vail, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Tel: (312) 862-2000 Fax: (312) 862-2200 Email: benjamin.rhode@kirkland.com scott.vail@kirkland.com Debtors' Co-Bankruptcy Counsel: Matthew D. Cavenaugh, Esq. Vienna F. Anaya, Esq. Genevieve Graham, Esq. Victoria Argeroplos, Esq. JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Tel: (713) 752-4200 Fax: (713) 752-4221 Email: mcavenaugh@jw.com vanaya@jw.com ggraham@jw.com vargeroplos@jw.com Debtors' Investment Banker: PJT PARTNERS LP Debtors' Financial Advisor: ALIXPARTNERS, LLP Debtors' Notice, Claims, & Solicitation Agent and Administrative Advisor: PRIME CLERK LLC https://cases.primeclerk.com/Covia Total Assets as of April 30, 2020: $2,504,740,814 Total Debts as of April 30, 2020: $1,903,952,839 The petitions were signed by Andrew D. Eich, executive vice president, chief financial officer, and treasurer. A copy of Covia Holdings' petition is available for free at PacerMonitor.com at: https://is.gd/7Xr0m3 List of Debtors' 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Wells Fargo Vendor Trade Debt $3,160,244 Financial Services, LLC Attn: Keith Anderson, SVP Sales 6250 N River Rd Rosemont, IL 60018 Tel: 866-726-4714 Email: Keith.W.Andersen@wellsfargo.com 2. Trinity Industries Leasing Company Trade Debt $2,898,857 Attn: Jim White, VP Structured Finance 2525 N. Stemmons Fwy. Dallas, TX 75207 Tel: 214-475-2604 Fax: 214-589-2515 Email: jim.white@trin.net 3. Citizens Asset Finance, Inc. Trade Debt $1,995,892 Attn: Jay Frazier, SVP Rail Finance 71 S. Wacker Dr. 29th Floor Chicago, IL 60606 Tel: 863-319-7317 Fax: 312-777-4003 Email: verlin.frazier@citizensbank.com 4. Banc of America Leasing & Trade Debt $1,482,453 Capital LLC Attn: James V. Morris Senior VP Commercial Equipment Finance 135 S. Lasalle St. Chicago, IL 60603 Tel: 201-787-8326 Email: james.v.morris@baml.com 5. Truist Bank Trade Debt $1,407,011 Attn: John Saylor Midtown Plaza 305 Church at North Hills St. 10th Floor Raleigh, NC 27609 Tel: 919-326-3121 Email: John.Saylor@suntrust.com 6. Rango, Inc. Trade Debt $1,132,642 Attn: Curt Waisath 4215 E McDowell Rd Mesa, AZ 85215 Tel: 480-729-6537 Fax: 866-726-0481 Email: cwaisath@rangoinc.com 7. SMBC Rail Investment LLC Trade Debt $1,008,829 Attn: Mike McCarthy, SVP Leasing 300 S Riverside Plaza Suite 1925 Chicago, IL 60606 Tel: 312-259-4803 Fax: 312-559-4829 Email: Mike.McCarthy@smbcrail.com 8. Greenbrier Leasing Company LLC Trade Debt $953,280 Attn: Brian Comstock, CCO 1 Centerpointe Dr. Suite 200 Lake Oswego, OR 97035 Tel: 503-670-3121 Fax: 503-684-7553 Email: brian.comstock@gbrx.com 9. Illinois Power Marketing Trade Debt $933,827 d/b/a Homefield Energy Attn: President & General Counsel 1500 Eastport Plaza Collinsville, IL 62234 Tel: 866-694-1262 Fax: 888-354-9837 Email: ContractLegal12@visraenergy.com 10. Constellation New Energy, Inc. Trade Debt $889,015 Attn: President & General Counsel 9960 Corporate Campus Drive Louisville, KY 40223 Tel: 410-244-7294 11. GATX Corporation Trade Debt $812,126 Attn: Paul Titterton, SVP & COO, Rail NA 233 S. Wacker Drive Chicago, IL 60606 Tel: 312-621-6489 Fax: 312-499-7149 Email: Paul.Titterton@gatx.com 12. Midwest Railcar Corporation Trade Debt $801,338 Attn: Rich Murphy, President & CEO 855 S. Arbor Vitae Edwardsville, IL 62025 Tel: 618-288-2233 Fax: 618-692-5578 Email: rmurphy@midwestrailcar.com 13. Motion Industries, Inc. Trade Debt $720,867 Attn: Mark Bakke 1605 Alton Road Birmingham, AL 35210 Tel: 815-936-1012 Fax: 205-951-1172 Email: Mark.Bakke@motion-ind.com 14. The CIT Group/Equipment Trade Debt $684,095 Financing, Inc. Attn: John Glynn, SVP Rail 1211 Avenue of the Americas New York, NY 10036 Tel: 518-482-3620 Email: john.glynn@cit.com 15. Transload Solutions, LLC Trade Debt $568,221 Attn: Pat McConnell 630 Commercial Avenue Green Lake, WI 54941 Tel: 920-294-0430 Email: pat@flashtrucking.com 16. Mitsui Rail Capital LLC Trade Debt $541,390 Attn: Dan Penovich, President 1 S. Wacker Dr. Suite 3110 Chicago, IL 60606 Tel: 312-803-8860 Fax: 312-803-8890 Email: dpenovich@mrc-rail.com 17. Alban Tractor Co., Inc. Trade Debt $515,412 Attn: Jennifer Horn 8531 Pulaski Highway Baltimore, MD 21237 Tel: 410-686-7777 Fax: 410-780-3481 Email: Jennifer.Horn@altorfer.com 18. CSX Transportation, Inc. Trade Debt $498,267 Attn: James Heltzell 500 Water St - J865 Jacksonville, FL 32202 Tel: 412-922-0521 Email: james_heltzell@csx.com 19. A.J. McDirtt, Inc. Trade Debt $493,102 Attn: John Lawrence President 1925 Maples Rd Sterling, IL 61081 Tel: 815-441-5495 Fax: 208-567-2706 Email: john@ajmcdirtt.com 20. Rotex Global LLC Trade Debt $484,595 Attn: Robert Dieckman, President 1230 Knowlton St. Cincinnati, OH 45223 Tel: 513-541-1236 Fax: 513-541-4888 Email: aburke@rotex.com 21. Twin Eagle Sand Logistics, LLC Trade Debt $433,632 Attn: Lance Reed 8847 W. Sam Houston Parkway N Houston, TX 77040 Tel: 713-341-7300 Fax: 713-341-7324 Email: lance.reed@twineagle.com 22. Infinity Transportation 2016-1 LLC Trade Debt $415,030 Attn: Lee Martini 1355 Peachtree St. NE Suite 750 South Tower Atlanta, GA 30309 Tel: 678-904-6315 Fax: 678-904-6311 Email: lee.martini@gafg.com 23. Orica, Inc. Trade Debt $406,878 Attn: President & General Counsel 33101 East Quincy Avenue Watkins, CO 80137 Tel: 303-268-5000 Fax: 303-268-5250 Email: namerica@orica.com 24. Pacific Western Bank Trade Debt $335,227 Attn: Keri Alberts, VP Corporate Asset Finance 10 South Wacker Dr. Suite 3400 Chicago, IL 60606 Tel: 312-706-2117 Fax: 310-862-4536 Email: kalberts@pacwest.com 25. Plastics Engineering Trade Debt $311,645 Company Attn: Vince Karls 3518 Lakeshore Road Sheboygan, WI 53083 Tel: 920-458-2121 Fax: 920-458-1923 Email: vkarls@plenco.com 26. The Railroad Associates Trade Debt $305,126 Corporation Attn: Dave Goretski, CFO 4444 Carlisle Pike Suite A Camp Hill, PA 17011 Tel: 603-860-8698 Fax: 717-920-6605 Email: dgoretski@railroadtrac.com 27. American Commercial Barge Trade Debt $291,266 Line LLC Attn: Ben Broyles 1701 East Market St. Jeffersonville, IN 47130 Tel: 504-919-1432 Email: ben.broyles@bargeacbl.com 28. Woods Dirt Contractors, Inc. Trade Debt $290,461 Attn: David Browning 2200 N Broadway Ave Ada, OK 74820 Tel: 580-436-0666 Fax: 580-332-7554 Email: david.browning@woodplc.com 29. Duke Energy Progress Inc. Trade Debt $289,174 Attn: Wade Jackson 526 N Church St. Charlotte, NC 28202 Tel: 910-944-5360 Email: wade.jackson@duke-energy.com 30. Arr-Maz Custom Chemical Trade Debt $252,592 Attn: Dave Keselica Chief Executive Officer 4800 State Road 60 East Mulberry, FL 33860 Tel: 863-578-1206 Fax: 863-425-5389 Email: thewett@am-cc.com 31. Buckley Powder Co. Trade Debt $250,515 Attn: Steve Buckley President 42 Inverness Drive East Englewood, CO 80112 Tel: 303-350-5125 Fax: 303-790-7033 Email: ar@buckleypowder.com 32. C & H Electric Construction, Inc. Trade Debt $247,494 Attn: President & General Counsel 104 1st Street Tonica, IL 61370 Tel: 815-488-9023 Fax: 815-442-3513 Email: brian_chec@hotmail.com 33. K-M Machine Co., Inc. Trade Debt $233,056 Attn: Kelly Kellam 275 Sedberry Rd Biscoe, NC 27209 Tel: 910-428-2368 Fax: 910-428-9186 Email: kkellam@kmmachineco.com 34. LaSalle County Transfer LLC Trade Debt $222,918 Attn: Josh Voss 400 Old North Road Spring Valley, IL 61362 Tel: 815-712-6550 Email: lctllc14@gmail.com 35. Gerke Excavating Inc Trade Debt $198,090 Attn: Kurt Thornton 15341 State hwy 131 Tomah, WI 54660 Tel: 608-372-420 Email: klt@gerkeexcavating.com 36. Norfolk Southern Railway Trade Debt $195,007 Company Attn: Tim Butt, Director of Sales Three Commercial Place Norfolk, VA 23510 Tel: 757-373-0685 Fax: 404-877-0345 Email: tim.butt@nscorp.com 37. Prairie Transportation Inc. Trade Debt $187,817 Attn: Sean Smith 110 E Main St. Suite 320 Ottawa, IL 61350 Tel: 815-640-9029 Email: sean.smith@prairietrans.com 38. Mansfield Oil Company Trade Debt $187,038 Attn: Shea Keegan 1025 Airport Parkway, S.W. Gainesville, GA 30501 Tel: 678-207-2571 Fax: 678-207-3047 Email: skeegan@mansfieldoil.com 39. Marquette Transportation Finance Trade Debt $150,982 Attn: Randy Plotner, VP of Business Development 1995 Ranger Hwy Weatherford, TX 76088 Tel: 651-353-2653 Email: Randy.Plotner@1845.com 40. Union Industrial Trade Debt $150,000 Contractors, Inc. Attn: Ryan Cochran 1800 E. 21st Ashtabula, OH 44004 Tel: 440-998-7871 Fax: 440-998-0026 Email: ryancochran@uicconstruction.com 41. Biourja New Town Terminal, LLC Trade Debt $148,964 Attn: Casey Carmody 1080 Eldridge Parkway Suite 1175 Houston, TX 770077 Tel: 832-775-9062 Email: casey.carmidy@biourja.com 42. Progress Rail Leasing Trade Debt $143,198 Corporation Attn: Michael McMahon 522 W. Foxdale LN Arlington Heights, IL 60004 Tel: 847-814-1588 Email: mmacmahon@progressrail.com 43. Palmetto Mining Inc Trade Debt $142,825 Attn: Angel Loucks PO Box 6550 North Augusta, SC 29861 Tel: 903-714-0185 Email: aloucks@palmettomining.com 44. Inman Electric Company, Inc. Trade Debt $138,055 Attn: Jim Bolelli 314 Civic Road La Salle, IL 61301 Tel: 815-223-2288 Fax: 815-223-7108 Email: jimbolelli@comcast.net 45. Cerco, Inc. Trade Debt $136,785 Attn: President & General Counsel 453 W McConkey St Shreve, OH 44676 Tel: 330-567-2145 Fax: 330-915-4925 Email: englishs@cercollc.com 46. Commercial Packaging Trade Debt $130,802 Attn: Scott Brekken 2047 Ireland Grove Road Bloomington, IL 61701 Tel: 952-473-1582 Email: sbrekken@commercialpackaging.com 47. Lambert & Co Drilling Trade Debt $130,339 Attn: Bruce Lambert PO Box 2007 Mt. Morris, IL 61054-2007 Tel: 815-626-7645 Fax: 815-284-8909 Email: lambdrill6@aol.com 48. Caterpillar Financial Trade Debt $128,025 Services Corporation Attn: David Ferro 2120 West End Ave. Nashville, TN 37203 Tel: 615-341-1047 Fax: 615-321-8486 Email: David.Ferro@cat.com 49. Pine Knoll Construction Trade Debt $127,049 Company Attn: Amber Jenkins 115 Jeffs Way Clear Brook, VA 22624 Tel: 540-667-3092 Email: Amber@pineknollconstruction.com 50. United Rental, Inc. Trade Debt $126,902 Attn: Brian James 100 First Stamford Place Suite 700 Stamford, CT 6902 Tel: 203-622-3131 Fax: 203-622-6080 Email: bjames.@ur.com CRUZ TRUCKING: Allowed to Use Cash Collateral Until July 22 ----------------------------------------------------------- Judge Karen Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida authorized Cruz Trucking, LLC to use cash collateral to pay current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item. The Debtor's authorization will continue until July 22, 2020 at 2:00 p.m. at which time the Court has scheduled a continued hearing to further consider the use of cash collateral. The Debtor is directed to pay $1,000 per month to its attorney's trust account commencing on July 1, and continuing on the 1st day of each month thereafter. The funds are intended as a payment against the administrative claim of the Subchapter V trustee and will be held in trust by Debtor's counsel until further order of the Court. Secured Creditor will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as its prepetition liens, without the need to file or execute any documents as may otherwise be required under applicable non-bankruptcy law. The Debtor is also required to maintain insurance coverage for its property 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. DAH-ON INC: Seeks Approval to Hire Kevin Lim CPA as Accountant -------------------------------------------------------------- Dah-On, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Kevin Lim CPA P.C. as its accountant. The firm will assist in the administration of Debtor's payroll, prepare and file its 2019 tax return, and perform various other accounting-related tasks. The firm will be paid a monthly fee of $400 for its accounting services and an additional fee of $3,100 for the preparation of its tax returns. Kevin Lim is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Kevin Lim Kevin Lim CPA P.C. 2639 Walnut Hill Lane, Suite 225, Dallas, TX 75229 Telephone: (214) 257-0508 About Dah-On Inc. Dah-On, Inc. operates S&K Beverages, a liquor store in Plano, Texas. On Jan. 10, 2020, Dah-On filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-40116). At the time of the filing, Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Judge Brenda T. Rhoades oversees the case. Debtor has tapped Hayward & Associates PLLC as its legal counsel, and Kevin Lim CPA P.C. as its accountant. DELIVER BUYER: Moody's Affirms B3 CFR & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed Deliver Buyer, Inc.'s B3 corporate family rating and B3-PD probability of default rating. Concurrently, Moody's affirmed the B3 rating on the company's senior secured credit facility, which is in the process of being upsized by a $125 million add-on to the existing term loan. Proceeds from the add-on term loan will be used to pay down borrowings under the revolver. The ratings outlook has been changed to stable from negative. RATINGS RATIONALE The B3 corporate family rating reflects MHS's relatively modest scale, tolerance for high financial risk, pronounced customer concentration and elevated execution risk. These considerations are tempered by the company's good competitive standing within automated parcel sortation systems, which is expected to support solid topline and earnings growth over the intermediate period. Moody's believes MHS's dependence on several key customers (the top two account for about 60% of sales) leaves the company susceptible to heightened pricing pressure. The concentration also makes MHS vulnerable to changes in customer capital expenditure budgets, a risk that Moody's views as more pronounced over the near term given the likelihood that businesses may curtail (or will at least review) capital spending in the face of meaningful operational disruptions from the COVID-19 pandemic. The company's heavy reliance on a small customer base heightens the need for strong execution, while the relatively lumpy large-sized and fixed-price nature of customer contracts heightens the need for consistent operational performance. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The actions reflect the impact on Deliver Buyer, Inc. of the deterioration in credit quality it has triggered, given its exposure to business and consumer demand, which has left it vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. The stable ratings outlook reflects an improved liquidity profile proforma for the assumed successful completion of the pending term loan add-on, which will result in near-full availability under the revolving credit facility after subsequent pay-down of outstandings thereunder with proceeds from the new loan. This will be augmented by sizable cash balances and Moody's expectation that earnings growth in 2021 will result in an improving set of credit metrics. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Moody's-adjusted debt-to-EBITDA is expected to remain at or below 5.5x. A track record of strong operational execution and maintenance of a good liquidity profile with expectations of consistently positive free cash generation and significant availability under the company's revolver would be prerequisites to any upgrade. Given the company's small scale and pronounced customer concentration, Moody's would expect MHS to maintain credit metrics that are stronger than levels typically associated with larger and/or more diverse companies at the equivalent rating level. The ratings could be downgraded if Moody's-adjusted debt-to-EBITDA is expected to remain above 7x. A weakening of MHS's liquidity including expectations of negative free cash flow during 2021, large-sized borrowings under the revolver that reduce financial flexibility, or an anticipated breach of financial covenants could also pressure the ratings downward. Execution missteps that result in weakened operational performance such that EBITDA margins decline to around 10% could also result in a downgrade. The loss of customers and/or business due to COVID-19 which results in a meaningful weakening of the company's credit profile could also cause downward ratings pressure. The following is a summary of the rating actions: Issuer: Deliver Buyer, Inc. Corporate Family Rating, affirmed B3 Probability of Default Rating, affirmed B3-PD Senior Secured Bank Credit Facility, affirmed B3 (LGD3) Outlook, Changed to Stable from Negative MHS Holdings Inc., headquartered in Louisville, Kentucky, the parent company for Material Handling Systems Inc. and Santa Rosa Systems LLC, designs, engineers, builds and installs conveyors and automated sortation systems, primarily for the parcel industry. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. DIOCESE OF ST. CLOUD: Appoints Tort Claimants' Representative ------------------------------------------------------------- The Diocese of St. Cloud received approval from the U.S. Bankruptcy Court for the District of Minnesota to appoint Michael Hogan, a retired judge and principal of Hogan Mediation, to represent tort claimants. Mr. Hogan will represent individuals who may have claims against Debtor stemming from sexual abuse experienced as minors but were not able to file a proof of claim on time. He will be paid at the rate of $550 per hour (with fees to be capped at $50,000 for the case) and will receive reimbursement for work-related expenses incurred. In court papers, Mr. Hogan disclosed that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Hogan holds office at: Michael R. Hogan Hogan Mediation P.O. Box 1375 Eugene, OR 97440 Email: josh@hoganmediation.net About The Diocese of St. Cloud The Diocese of St. Cloud is a tax-exempt religious organization. The Roman Catholic Diocese of Saint Cloud encompasses 12,251 square miles in 16 central Minnesota counties, with an estimated total population of 555,400. The diocese stretches more than 175 miles from east to west, including some of Minnesota's most rural areas along the North and South Dakota borders. It also includes one of the nation's fastest-growing suburban corridors extending from Minneapolis northwest to St. Cloud. The diocese currently includes 131 parishes with a combined Catholic population of over 133,000. Visit http://stcdio.orgfor more information. The Diocese of St. Cloud filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Minn. Case No. 20-60337) on June 15, 2020. At the time of the filing, Debtor disclosed assets of $10 million to $50 million and liabilities of $1 million to $10 million. Debtor has tapped Quarles & Brady, LLP as its legal counsel. The U.S. Trustee for Region 12 appointed a committee of unsecured creditors on June 16, 2020. The committee is represented by Stinson, LLP. EAST CAROLINA COMMERCIAL: Case Summary & Top Unsecured Creditors ---------------------------------------------------------------- Debtor: East Carolina Commercial Services, LLC 3315 Airport Blvd. NW Suite B Wilson, NC 27896 Business Description: East Carolina Commercial Services, LLC is a commercial solar installation company specializing in module installation and racking installation. Chapter 11 Petition Date: June 27, 2020 Court: United States Bankruptcy Court Eastern District of North Carolina Case No.: 20-02361 Judge: Hon. Joseph N. Callaway Debtor's Counsel: Travis Sasser, Esq. SASSER LAW FIRM 2000 Regency Parkway, Suite 230 Cary, NC 27518 Tel: 919-319-7400 E-mail: travis@sasserbankruptcy.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Caesar Mendoza, manager member. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/qlyyhq EMIRATES & ETIHAD AIRWAYS: Extends Temporary Pay Cuts to September ------------------------------------------------------------------ Reuters reports that the state airline companies Etihad Airways and Emirates Airways extended the period in reducing the salaries of employees until September 2020 in an effort to preserve its cash during the COVID-19 pandemic. The aviation industry has been among the worst hit by the outbreak, which has dented travel demand and forced major airlines to lay off staff and seek government bailouts. State airlines Emirates and Etihad have operated limited, mostly outbound services from the United Arab Emirates since grounding passenger flights in March 2020. They are due to restart some connecting flights this month after the UAE last week lifted a suspension on services where passengers stop off in the country to change planes, or for refuelling. Dubai's Emirates told employees on Sunday (Jun 7) it would extend a three month wage cut due to end this month until September 30, 2020, according to an internal email seen by Reuters. In some cases, pay cuts will also be deepened, with some basic salaries reduced by 50 per cent, the email to Emirates Group employees said. The decision was made after reviewing all possible options to preserve its cash position, it said. State-owned Emirates Group, which employed 105,000 as of March and includes the airline among its assets, did not immediately respond to an emailed request for comment. Emirates had previously reduced basic wages reduced by 25 per cent to 50 per cent for three months from April 2020, with junior employees exempted. Abu Dhabi's Etihad Airways has extended its salary cuts of between 25% to 50% to September 2020, a spokeswoman said, as it considers all options to protect jobs and preserve cash. The airline originally reduced salaries for the month of April 2020. Etihad last week laid off some cabin crew and its not planning any further crew redundancies, according to emails seen by Reuters. The spokeswoman said there have been redundancies across several areas of the airline, and in May 2020 sources told Reuters Etihad was planning to lay off 1,200 employees. Like other airlines, Emirates and Etihad have laid off staff due to the impact of its business. Fellow Gulf carrier Qatar Airways has said it could lay off up to 20 per cent of its employees. About Etihad Airways Etihad Airways is the flag carrier of the United Arab Emirates and the second-largest airline in the country that commenced operations in November 2003. About Emirates Airlines Emirates Airlines is the national carrier of Dubai, United Arab Emirates that was established in October 1985. It is the world's largest airline and deemed as one of the fastest growing carriers around that world. It offers freight and passenger transportation, in-flight entertainment, reservations, bookings, first-class lunges, and air catering to customers across the globe. EXELA TECHNOLOGIES: Incurs $12.7-Mil. Net Loss in First Quarter --------------------------------------------------------------- Exela Technologies, Inc., reported a net loss of $12.67 million on $365.45 million of revenue for the three months ended March 31, 2020, compared to a net loss of $32.17 million on $404.36 million of revenue for the three months ended March 31, 2019. As of March 31, 2020, the Company had $1.33 billion in total assets, $2.08 billion in total liabilities, and a total stockholders' deficit of $753.43 million. At March 31, 2020, cash and cash equivalents totaled $122.6 million and the Company had availability of less than $0.1 million under its senior secured revolving credit facility. The Company is pursuing a debt reduction and liquidity improvement initiative that contemplates the pursuit of the sale of certain non-core businesses that are not central to the Company's long-term strategic vision. The disposition of those businesses would reduce indebtedness and enhance the Company's ability to focus on its core businesses. The Company has retained financial advisors to assist with the sale of select assets. As part of the initiative, the Company has taken steps to increase its liquidity and its overall financial flexibility. The Company expects to use the net proceeds from the initiative for the repayment of debt, with a target reduction of $150.0 to $200.0 million. The Company has set a two-year timetable for completion of the initiative. There can be no assurance that the initiative or any particular element of the initiative will be consummated or will achieve its desired result. Exela stated, "The Company has a history of negative trends in its financial condition and operating results as well as recent noncompliance with covenants with its respective lenders. However, despite these conditions, the Company believes management's plans, as described fully above, will provide sufficient liquidity to meet its financial obligations and further, maintain levels of liquidity as specifically required under the Credit Agreement and the A/R Facility. Therefore, management concluded these plans alleviate the substantial doubt that was raised about our ability to continue as a going concern for at least twelve months from the date that the financial statements were issued." A full-text copy of the Quarterly Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/RzaRQ9 About Exela Exela Technologies, Inc. is a business process automation (BPA) company, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of expertise operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune 100. With foundational technologies spanning information management, workflow automation, and integrated communications, Exela's software and services include multi-industry department solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and public sectors. Through cloud-enabled platforms, built on a configurable stack of automation modules, and over 22,000 employees operating in 23 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner. Exela Technologies reported a net loss of $509.12 million for the year ended Dec. 31, 2019, compared to a net loss of $169.81 million for the year ended Dec. 31, 2018. * * * As reported by the TCR on Nov. 29, 2019, S&P Global Ratings lowered its issuer credit rating on Irving, Texas-based Exela Technologies Inc. to 'CCC-' from 'CCC+' with negative outlook. "We could lower our ratings on Exela if the company defaults, announces a distressed exchange or restructuring, or misses its interest payment," S&P said. EXTRACTECH LLC: Seeks to Hire Alan R. Smith as Attorney ------------------------------------------------------- Extractech, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Nevada to employ the Law Offices of Alan R. Smith, as attorney to the Debtor. Extractech, LLC requires Alan R. Smith to: a. render legal advice with respect to the powers and duties of the Debtor who continue to operate its business and manage its properties as debtor-in-possession; b. negotiate, prepare and file a plan or plans of reorganization and disclosure statements in connection with such plans, and otherwise promote the financial rehabilitation of the Debtor; c. take all necessary action to protect and preserve the Debtor's bankruptcy estate, including the prosecution of actions filed in connection with the bankruptcy case on the Debtor's behalf, the defense of any actions commenced against the Debtor in conjunction with the bankruptcy case, negotiations concerning all litigation in which the Debtor is or will become involved in conjunction with the bankruptcy case, and the evaluation and objection to claims filed against the bankruptcy estate; d. prepare, on behalf of the Debtor, all necessary applications, motions, answers, orders, reports and papers in connection with the administration of the Debtor's bankruptcy estate, and appear on behalf of the Debtor at all Bankruptcy Court proceedings in connection with the Debtor's bankruptcy case; e. render legal advice and perform general legal services in connection with the foregoing bankruptcy case; and f. perform all other necessary legal services in connection with this Chapter 11 case. Alan R. Smith will be paid at these hourly rates: Alan R. Smith, Esq. $550 Paraprofessionals $250 to $150 On May, 2020, the Debtor paid Alan R. Smith an advance retainer of $13,615.00. Alan R. Smith will also be reimbursed for reasonable out-of-pocket expenses incurred. Alan R. Smith, partner of the Law Offices of Alan R. Smith, 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. Alan R. Smith can be reached at: Alan R. Smith, Esq. LAW OFFICES OF ALAN R. SMITH 505 Ridge Street Reno, NV 89501 Tel: (775) 786-4579 Fax: (775) 786-3066 E-mail: mail@asmithlaw.com About Extractech 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. The Debtor is represented by the Law Offices of Alan R. Smith. FCPR ACQ: Trustee's $305K Sale of Trucking Assets Finally Approved ------------------------------------------------------------------ Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida has entered a final order authorizing Alex Moglia, the chapter 11 Trustee for FCPR Acquisition, LLC, Cedar Plastics, LLC, and Cedar Trucking, LLC, to sell substantially all of Trucking's assets to Phillip W. Teague and Michael C. Givorns for $305,000. The preliminary hearing on the Motion was held on May 11, 2020 at 2:30 p.m. and then the final hearing on May 29, 2020 at 2:00 p.m. The Trustee will distribute the Sale Proceeds as follows: A. The first $10,000, attributable to the 2013 Peterbilt 579 Tractor VIN . . . 2281 will be paid as follows (i) $600 to the Trustee for reimbursement to Crockett’s Towing, (ii) $250 to the Trustee for reimbursement for May storage, (iii) $1,000 in professional fees to the Trustee and Jennis Law, as may be allowed pursuant to Sections 326, 330 and 331 of the Bankruptcy Code and (iv) $8,150 to Quality Leasing. B. The second $12,250 to pay (i) the fees payable to the United States Treasury pursuant to 28 U.S.C. Section 1930, (ii) $338 to payoff toll violations, (iii) then the allowed administrative expenses for compensation and reimbursement for the Trustee and the Jennis Law Firm, as may be allowed pursuant to Sections 326, 330 and 331 of the Bankruptcy Code, and (iv) to the extent of any remainder thereafter, all other allowed administrative expense claims, priority claims and unsecured claims. C. The third $57,750 to CenterState. The Trustee is relieved of the reporting requirement in the Preliminary Order. Attorney David S. Jennis is directed to serve a copy of the Order on interested parties who do not receive notice via CM/ECF and file a proof of service within three days of entry of the Order. About FCPR Acquisition FCPR Acquisition, LLC, provides carpet recycling services. The company is doing business as Florida Carpet & Pad Recycling. FCPR sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-08611) on Sept. 11, 2019. Its affiliates, Cedar Plastics, LLC (Bankr. M.D. Fla. Case No.19-09429) and Cedar Trucking, LLC (Bankr. M.D. Fla. Case No.19-09430) filed Chapter 11 petitions on Oct. 3, 2019. The cases are jointly administered under Case No. 19-08611. At the time of the filing, FCPR and Cedar Plastics were estimated to have assets of less than $50,000 and debts of less than $10 million. Cedar Trucking had estimated assets of less than $50,000 and liabilities of less than $1 million. The cases have been assigned to Judge Caryl E. Delano. The Debtors are represented by Daniel E. Etlinger, Esq., at Jennis Law Firm. The U.S. Trustee for Region 21 on Nov. 15, 2019, appointed three creditors to serve on the official committee of unsecured creditors. The Committee retained Buss Ross, P.A., as counsel. FCPR ACQUISITION: Trustee's Sale of All Assets Finally Approved --------------------------------------------------------------- Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida has entered a final order authorizing Alex Moglia, the chapter 11 Trustee for FCPR Acquisition, LLC, Cedar Plastics, LLC, and Cedar Trucking, LLC, to sell substantially all of the Debtors' assets, free and clear of all liens, claims, and interests. The preliminary hearing on the Motion was held on May 11, 2020 at 2:30 p.m. and then the final hearing on May 29, 2020 at 2:00 p.m. As proffered on the record, without objection, the value of the Sale Assets is $29,400. The Trustee will distribute the Sale Proceeds as follows: A. The first $1,726 to the HCTC. The $1,726 is comprised of (i) $680 for 2018 tangible property taxes, (ii) $445 for 2019 tangible property taxes and (iii) $563 for estimated 2020 tangible property taxes. Should there be a shortfall for actual 2020 tangible property taxes HCTC will look to the purchaser for any deficiency. B. The second $4,843 to pay (i) the fees payable to the United States Treasury pursuant to 28 U.S.C. Section 1930, (ii) then the allowed administrative expenses for compensation and reimbursement for the Trustee and the Jennis Law Firm (as former counsel to the Debtors and special counsel to the Trustee), as may be allowed pursuant to Sections 326, 330 and 331 of the Bankruptcy Code, and (iii) to the extent of any remainder thereafter after paying the Administrative Carveout in full, to ARA. C. The third $22,831 to CenterState. The Trustee is relieved of the reporting requirement in the Preliminary Order. Attorney David S. Jennis is directed to serve a copy of the order on interested parties who do not receive notice via CM/ECF and file a proof of service within three days of entry of the Order. About FCPR Acquisition FCPR Acquisition, LLC, provides carpet recycling services. The company is doing business as Florida Carpet & Pad Recycling. FCPR sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-08611) on Sept. 11, 2019. Its affiliates, Cedar Plastics, LLC (Bankr. M.D. Fla. Case No. 19-09429) and Cedar Trucking, LLC (Bankr. M.D. Fla. Case No.19-09430) filed Chapter 11 petitions on Oct. 3, 2019. The cases are jointly administered under Case No. 19-08611. At the time of the filing, FCPR and Cedar Plastics were estimated to have assets of less than $50,000 and debts of less than $10 million. Cedar Trucking had estimated assets of less than $50,000 and liabilities of less than $1 million. The cases have been assigned to Judge Caryl E. Delano. The Debtors are represented by Daniel E. Etlinger, Esq., at Jennis Law Firm. The U.S. Trustee for Region 21 on Nov. 15, 2019, appointed three creditors to serve on the official committee of unsecured creditors. The Committee retained Buss Ross, P.A., as counsel. FCPR ACQUISITION: Trustee's Sale of All Plastics Assets Withdrawn ----------------------------------------------------------------- Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida has entered a final order withdrawing the sale by Alex Moglia, the chapter 11 Trustee for FCPR Acquisition, LLC, Cedar Plastics, LLC, and Cedar Trucking, LLC, of all of Cedar Plastics' assets. The preliminary hearing on the Motion was held on May 11, 2020 at 2:30 p.m. and then the final hearing on May 29, 2020 at 2:00 p.m. The Order is without prejudice to any causes of action or rights the Trustee may have against Winchester Carpets Inc., Jerry Thomas or any other participant of the potential buyer for withdrawing its offer. The Order is without prejudice to the Trustee filing a new motion to sell Cedar Plastics' assets. Should the Trustee file a new motion to sell Cedar Plastics' assets the Court will set a new bar date for filing claims to proceeds. Any party who has already filed a claim may stand on their existing one, or, may file a modified or supplemental claim. The Trustee is relieved of the reporting requirement in the Preliminary Order. Attorney David S. Jennis is directed to serve a copy of the Order on interested parties who do not receive notice via CM/ECF and file a proof of service within three days of entry of the Order. About FCPR Acquisition FCPR Acquisition, LLC, provides carpet recycling services. The company is doing business as Florida Carpet & Pad Recycling. FCPR sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-08611) on Sept. 11, 2019. Its affiliates, Cedar Plastics, LLC (Bankr. M.D. Fla. Case No.19-09429) and Cedar Trucking, LLC (Bankr. M.D. Fla. Case No.19-09430) filed Chapter 11 petitions on Oct. 3, 2019. The cases are jointly administered under Case No. 19-08611. At the time of the filing, FCPR and Cedar Plastics were estimated to have assets of less than $50,000 and debts of less than $10 million. Cedar Trucking had estimated assets of less than $50,000 and liabilities of less than $1 million. The cases have been assigned to Judge Caryl E. Delano. The Debtors are represented by Daniel E. Etlinger, Esq., at Jennis Law Firm. The U.S. Trustee for Region 21 on Nov. 15, 2019, appointed three creditors to serve on the official committee of unsecured creditors. The Committee hires Buss Ross, P.A., as counsel. FIBERCORR MILLS: Hires Phillips Organization as Financial Advisor ----------------------------------------------------------------- Fibercorr Mills, LLC, and its debtor-affiliates, seeks authority from the U.S. Bankruptcy Court for the Northern District of Ohio to employ The Phillips Organization, as accountant and financial advisor to the Debtors. Fibercorr Mills requires Phillips Organization to: a. assist the Debtors in fulfilling their duties as debtors- in-possession; b. provide general accounting services to the Debtors; c. assist the Debtors by providing financial analyses necessary for the Debtors' plan of reorganization, disclosure statement, sale of any assets, or other transaction related to the Debtors' reorganization. Phillips Organization will be paid at these hourly rates: Russell Phillips, Jr., Principal $230 Partners $200 Staff Services $130 Clerical Services $50 The Debtors paid Phillips Organization the amount of $10,000 in the one year before the petition date. After deducting fees and expenses, the remaining balance of $8,923.60 was held in the Firm's trust account. Phillips Organization will also be reimbursed for reasonable out-of-pocket expenses incurred. Russell Phillips, Jr., partner of The Phillips Organization, 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. Phillips Organization can be reached at: Russell Phillips, Jr. THE PHILLIPS ORGANIZATION 3924 Cleveland Avenue Canton, OH 44708 Tel: (330) 493-3928 About Fibercorr Mills, LLC FiberCorr Mills is a Massillon-based manufacturer of corrugated cardboard products. The Shew family bought the FiberCorr business from Georgia-Pacific in February of 2000. Cherry Springs of Massillon II is the owner of real property consisting of FiberCorr's business premises. Shew Industries, LLC is the parent company of the other Debtors. Web site: http://www.fibercorr.com/ Fibercorr Mills LLC, based in Massillon, OH, filed a Chapter 11 petition (Bankr. N.D. Ohio Lead Case No. 20-61029) on June 17, 2020. The Hon. Russ Kendig presides over the case. ANTHONY J. DEGIROLAMO, ATTORNEY AT LAW, serves as bankruptcy counsel. THE PHILLIPS ORGANIZATION, as financial advisor. Fibercorr Mills LLC estimated assets of $1 million to $10 million , and estimated liabilities of $10 million to $50 million; Cherry Springs of Massillon II, LLC estimated assets of $1 million to $10 million, and estimated liabilities of $1 million to $10 million; Shew Industries' LLC estimated assets of $0 to $50,000, and estimated liabilities of $1 million to $10 million. The petition was signed by David Shew, president. FORTERRA FINANCE: Moody's Rates $400MM Senior Secured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Forterra Finance, LLC's proposed $400 million senior secured notes due 2025. All other ratings for the company remain unchanged. The outlook is stable. The proceeds from the new notes will be used to partially prepay outstanding borrowings under the company's $1.2 billion senior secured 1st lien term loan maturing October 2023. The transaction will be leverage neutral while improving the company's debt maturity profile. Pro forma for the proposed offering, Moody's projects Forterra's debt-to-EBITDA (inclusive of Moody's adjustments) will be 6.3x at year end 2020. "With the proposed $400 million offering Forterra will enhance its financial flexibility by extending its debt maturity profile," said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Assignments: Issuer: Forterra Finance, LLC Senior Secured Notes, Assigned B3 (LGD4) RATINGS RATIONALE Forterra's B3 corporate family rating reflects the company's high debt leverage, limited history in generating free cash flow and the cyclicality of its end markets. At the same time, Moody's credit rating takes into consideration the company's strong market position as a leading manufacturer of water and drainage infrastructure pipe and products in the United States and Eastern Canada, attractive industry fundamentals and improving operating trends. Governance characteristics considered for Forterra, include willingness to reduce leverage to a modest range of 3.0x to 3.5x over the next few years. The stable outlook reflects Moody's expectation that during this uncertain economic environment Forterra will steadily grow its revenues organically, improve its profitability and generate cash that can be used to de-lever its balance sheet. Forterra's SGL-3 Speculative Grade Liquidity rating reflects Moody's expectation of an adequate liquidity profile over the next 12 to 18 months. Forterra expects to end the second quarter of 2020 with a cash balance in the range of $40 million to $45, and $270 million in availability under its undrawn ABL revolving credit facility that expires in June 2025. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: The ratings could be upgraded if: - The company improves its free cash flow and maintains its liquidity profile - Debt-to-EBITDA is below 5.5x for a sustained period of time - EBITA-to-Interest expense is above 1.5x for a sustained period of time - Retained cash flow to net debt is above 10% for a sustained period of time The ratings could be downgraded if: - Debt-to-EBITDA is above 8.0x for a sustained period of time - EBITA-to-Interest expense is below 1.0x for a sustained period of time - EBITA margin falls below 3% - The company's liquidity deteriorates The principal methodology used in these ratings was Manufacturing Methodology published in March 2020.7. Headquartered in Irving, Texas, Forterra Inc. (the parent) is a leading manufacturer of water and drainage infrastructure pipe and products in the United States and Eastern Canada. The company reports its operating results in two segments: 1) Drainage Pipe & Products and 2) Water Pipe & Products. Forterra, Inc. is a publicly traded company on the NASDAQ under the ticker symbol FRTA. FURIE OPERATING: Can’t Ignore $7M Jones Act Fees, Feds Say ------------------------------------------------------------ Law360 reports that the U.S. Customs and Border Protection asked the Delaware bankruptcy court to deny the third try of Furie Operating Alaska LLC at Chapter 11 sale alleging that the company tries to duck out on the $7 million it owes for the Jones Act settlement. In an objection filed June 5, 2020, the agency urged the court to reject the company's proposed Chapter 11 plan -- which includes a $5 million sale to Hex LLC -- because it would allow the company to terminate a 2017 agreement under which Furie agreed to pay $10 million to satisfy a civil penalty originally assessed against it by U.S. Customs and Border Protection ("CBP") for violating the Jones Act. Furie was penalized when it transported the Spartan 151 jack-up drill rig from the Gulf of Mexico to Alaska in 2011 using a foreign flagged vessel without acquiring a waiver of the Jones Act from the Secretary of Homeland Security. This resolves a civil lawsuit filed by Furie in 2012 challenging the assessment of the civil penalty. A copy of the full-report is available at https://www.law360.com/energy/articles/1280753/feds-say-oil-biz-can-t-ditch-7m-jones-act-fees-in-ch-11 About Furie Operating Alaska Headquartered in Anchorage Alaska, Furie Operating Alaska LLC and its affiliates operate as independent energy companies primarily focused on the acquisition, exploration, production, and development of offshore oil and gas properties in the State of Alaska's Cook Inlet region. They hold a majority working interest in 35 competitive oil and gas leases in the Cook Inlet. Additionally, they wholly own and operate an offshore production platform in the middle of the Cook Inlet to extract natural gas under the oil and gas leases. Furie Operating Alaska and its affiliates, Cornucopia Oil & Gas Company LLC, and Corsair Oil & Gas LLC, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 19-11781 to 19-11783) on Aug. 9, 2019. In the petitions signed by Scott M. Pinsonnault, interim COO, the Debtors were estimated to have $10 million to $50 million in assets and $100 million to $500 million in liabilities. The Debtors tapped Womble Bond Dickinson (US) LLP and McDermott Will & Emery LLP as legal counsel; Seaport Global Securities LLC as investment banker; and Ankura Consulting Group as financial advisor. Prime Clerk LLC is the claims and noticing agent, and administrative advisor. GAP INC: Plans to Shutter Hill City Brand ----------------------------------------- SGB Media reports that Gap Inc. announced plans to close its Hill City men's performance brand. Hill City, launched in 2018, was meant to serve as a men's oriented alternative to the company's women's athleisure brand Athleta. In its launch announcement, the brand touted its certification as a B-Corp. through the use of sustainable materials. The move comes as the company is making an expansive effort to cut expenses amid the pandemic and struggles at its core GAP banner. In a statement, Gap Inc. said it will apply learnings and talent from Hill City across its portfolio. For example, as the athleisure category continues to grow for men, the company said it can leverage Hill City styles, fit and innovation into future men's lines at its other brands, starting with the Banana Republic. "We are living in unprecedented times with unprecedented consequences. I am so proud of the Hill City team and what we accomplished in such a short time," said Noah Palmer, head of Hill City. "From all of us at Hill City, and from the deepest parts of our hearts, thank you for being a loyal customer, supporter, and friend, and helping us build our dream product and brand." Hill City will ramp down and will continue to take customer returns in the months ahead. In a notice posted on the Hill City website, the company said it would wind down operations while selling the remainder of its inventory online in the following months. About GAP Inc. Gap Inc. -- http://www.gapinc.com/-- is a leading global retailer, founded in 1969 by Donald Fisher and Doris F. Fisher, offering clothing, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix, Janie and Jack, and Hill City brands. Fiscal year 2019 net sales were $16.4 billion. Gap Inc. products are available for purchase in more than 90 countries worldwide through company-operated stores, franchise stores, and e-commerce sites. GORDMANS STORES: Reopens as It Begins to Liquidate Properties ------------------------------------------------------------- David Hurst, writing for Tribune Democrat, reports that department store chain Gordmans reopened in Erie, New Castle, Mount Pleasant, and other locations in June. Though, the department store reopened, it will not be long unless its operation locates a buyer. The phase of Pennsylvania openings was the latest of several aimed at bringing back hundreds of Gordmans stores to begin clearing out merchandise following a nearly three-month closure. Battered by the fallout from the COVID-19 pandemic and other economic "challenges," Houston-based Stage Stores filed for Chapter 11 bankruptcy in May and announced immediate plans to begin liquidating its stores’ inventory in the weeks ahead. The retailer has said it will seek out potential buyers while it navigates the bankruptcy process. Somerset's store opened in February 2020 -- just a month before COVID-19 closures started. About Gordmans Founded in 1915, Gordmans Stores, Inc. -- http://www.gordmans.com/ -- is a retail company engaged in the sale of apparel, home goods, and other merchandise. Then with 106 stores in 22 states, Gordmans Stores and five affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Lead Case No. 17-80304) on March 13, 2017, disclosing $274 million in assets and $131 million in liabilities. The cases are assigned to Judge Thomas L. Saladino. The Debtors engaged Patrick J. Nash, Jr., Esq., Brad Weiland, Esq., and Jamie R. Netznik, Esq., of Kirkland & Ellis LLP, as bankruptcy counsel. The Debtors also hired Joyce A. Dixon, Esq. at Kutak Rock LLP as local counsel; Duff & Phelps as financial advisor; Clear Thinking Group LLC as restructuring advisor; and Epiq Bankruptcy Solutions LLC, as claims and noticing agent. On March 15, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC, as counsel, Brian J. Koenig, Esq. at Koley Jessen, P.C., L.L.O., as local counsel; and Province Inc., as financial advisor. * * * Houston, Texas-based Stage Stores and a joint venture of liquidators Tiger Capital Group and Great American Group were declared winning bidders for Gordmans' assets at an auction in March 2017. Stage Stores said at that time it plans to operate at least 50 of Gordmans' 105 locations and keep the warehouse in Omaha as a going concern. Stage operates about 800 locations nationwide under the Peebles, Bealls and Goody's brands, among others. The winning bid amounted to $75.6 million. The Debtor changed its name to G-Estate Liquidation Stores, Inc., following the asset sale. GREEN PHARMACEUTICALS: Seeks Cash Collateral Access Until Dec. 31 ----------------------------------------------------------------- Green Pharmaceuticals, Inc., seeks authorization from the U.S. Bankruptcy Court for the Central District of California to use cash collateral in accordance with its cash projections for the period June 30 through Dec. 31, 2020. FC Marketplace, LLC, asserts that it holds a valid and properly perfected security interest in the Debtor's monies. Millennium Funding also asserts that it holds a valid and properly perfected security interest in the Debtor's monies. Instead The Debtor is not offering to make any adequate protection payments because the Debtor believes that the Secured Creditors' interests are adequately protected for at least the following reasons: (a) The value of the Debtor's assets. (b) The Debtor will continue to operate the business and maintain and service the assets. (c) Operating the business creates additional revenues. (d) All assets are adequately insured. (e) The Debtor will be providing replacement lien to the entities claiming security in monies and receivables to the extent their prepetition liens attached to property of the Debtor prepetition and with the same validity, priority, and description of collateral. (f) FC Marketplace is receiving monthly payments of $1,736.36 from the Debtor's principal, Dominique De Rivel, pursuant to a state court stipulation between the Lender and Ms. De Rivel. (g) The value of the Debtor's assets is not projected to decline during the usage period. About Green Pharmaceuticals Green Pharmaceuticals, Inc. -- https://www.snorestop.com/ -- is a privately held company in Camarillo, California offering its flagship brand SnoreStop, an easy-to-use sprays and tablets that help people to experience a good night's sleep. SnoreStop the only medically proven over-the-counter natural solution to snoring that is not a device. Green Pharmaceuticals, based in Camarillo, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-12087) on Dec. 19, 2018. In the petition signed by Dominique De Rivel, president and CEO, the Debtor disclosed $380,735 in assets and $3,951,007 in liabilities. The Hon. Deborah J. Saltzman oversees the case. Steven R. Fox, Esq., at The Fox Law Corporation, Inc., serves as bankruptcy counsel. GRUDEN ACQUISITION: Moody's Alters Outlook on B3 CFR to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed all ratings for Gruden Acquisition, Inc., including the senior secured first lien and second lien debt ratings at B3 and Caa2, respectively, and the B3 corporate family rating and B3-PD probability of default rating. Moody's also changed the outlook to negative. RATINGS RATIONALE The ratings, including the B3 CFR, reflect QDI's exposure to cyclical end markets within the broader chemical sector, which is volatile and facing significant pressure from weakening macroeconomic conditions, heightened by the coronavirus crisis. These conditions will weigh on earnings and negatively impact credit metrics over the next year, with debt/EBITDA likely to approach 9x in 2020 (all ratios after Moody's standard adjustments) before moderating in 2021 with a gradual economic recovery. However, there is uncertainty around demand given limited visibility as to the duration and magnitude of the effects of the coronavirus on QDI's business and markets. The company also has relatively high principal debt payment in 2020 and 2021. Given these factors and the competitive nature of QDI's markets that exerts margin pressures, the leverage profile is elevated and limits the company's flexibility to contend with further business challenges. Quality Distribution is competitively well-positioned as the largest bulk chemicals carrier in North America. The company's affiliate-based operating model in its Chemicals segment (about 70% of revenue) and use of owner operators in its higher margin Intermodal segment provide some flexibility around costs for downside protection. But the company also has limited control of the assets as the equipment is not owned. As well, QDI is susceptible to possible financial weakening of affiliate partners, for which it has previously provided financial support. The company has undertaken cost measures to help offset significant revenue declines, including headcount reductions expected to provide $6-$7 million in annualized savings. Barriers to entry are relatively high considering the significant cost and difficulty of replicating the company's extensive infrastructure, which supports its competitiveness and helps to protect its market share. Liquidity is adequate over the near term, based on unrestricted cash of about $42 million ($27 million in the U.S.) and $63 million of ABL revolver availability as of May 2020. Moody's also expects very modest positive (albeit moderating) free cash flow for this year, which will remain constrained by principal debt payments of about $34 million in 2020 and $27 million in 2021. The cash balance, up from about $7 million at December 31, 2019, and cash flow profile benefit from QDI's actions to help offset the coronavirus impacts in recent months. These include working capital management and substantially reducing capital expenditures as afforded by QDI relatively young fleet, in addition to cost cutting measures and incremental $25 million drawn on the $150 million ABL revolver. Nonetheless, Moody's also expects cash to be consumed by working capital requirements and a ramp up in capex as business activity picks up. The negative outlook reflects Moody's expectation of end market headwinds amid recessionary conditions to weigh meaningfully on QDI's revenue and earnings likely into 2021, sustaining its high financial leverage and leading to potentially weaker than expected liquidity in an uncertain environment. In terms of corporate governance, financial policy remains a rating constraint. The company's high leverage reflects in part its private equity ownership. Quality Distribution has a history of aggressive financial policies, with acquisitive growth funded primarily with incremental debt that has slowed the de-leveraging prospects. Given the fragmented nature of the industry, further bolt-on acquisitions are likely and could increase leverage, if also funded with debt, or weaken liquidity and pose integration risks. Moody's took the following actions on Gruden Acquisition, Inc. Affirmations: Issuer: Gruden Acquisition, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured 1st Lien Bank Credit Facility, Affirmed B3 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: Gruden Acquisition, Inc. Outlook, Changed to Negative from Stable FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded with expectations of deteriorating liquidity, including sustained negative free cash flow, a material decline in the cash balance or diminished revolver availability. Ratings could also be downgraded with expectations of further weakening in operating performance. This includes deteriorating interest coverage and/or a lack of progress with meaningfully reducing debt/EBITDA towards 7x. Acquisitions or shareholder distributions that increase leverage or weaken liquidity would also drive downwards rating pressure. A ratings upgrade is unlikely in the near term and at least until business conditions and demand/shipment volumes improve along with the general economic environment. Over time, the ratings could be upgraded with expectations of a positive trend in EBITDA growth such that debt/EBITDA is sustained below 5.5x and EBITA/interest above 1.5x. This would be accompanied by stronger liquidity, including expectations of consistently positive free cash flow generation and greater revolver availability. The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. Gruden Acquisition, Inc. was formed to effect the acquisition of Quality Distribution, Inc., the parent company of Quality Distribution, LLC, by Apax Partners in August 2015. Quality Distribution, Inc., based in Tampa, Florida, is the largest North American transporter of bulk liquid and dry bulk chemicals. The company is also a provider of intermodal tank container and depot services primarily through its wholly-owned subsidiary, Boasso America Corporation. Revenue for the twelve months ended March 31, 2020 approximated $1.1 billion. GRUPO AEROMEXICO: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Grupo Aeromexico, S.A.B. de C.V. 243 Paseo de la Reforma Piso 25 Mexico City, Mexico 06500 Business Description: Grupo Aeromexico, S.A.B. de C.V. -- https://www.aeromexico.com -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Chapter 11 Petition Date: June 30, 2020 Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Grupo Aeromexico, S.A.B. de C.V. 20-11563 Aerolitoral, S.A. 20-11565 Aerovias de Mexico, S.A. de C.V. 20-11561 Aerovias Empresa de Cargo, S.A. de. C.V. - Court: United States Bankruptcy Court Southern District of Mexico Debtors' Counsel: Timothy Graulich, Esq. DAVIS POLK AND WARDWELL LLP 450 Lexington Avenue New York, NY 10017 Tel: 212-450-4639 Email: timothy.graulich@davispolk.com Estimated Assets (on a consolidated basis): $1 billion to $10 billion Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petition was signed by Ricardo Javier Sanchez Baker, chief financial officer. Copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/PM7ctA https://is.gd/CZjIAB https://is.gd/chDPXw Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. The Bank of New York Mellon International $411,355,556 Attn: Corporate TR Admin Issuance 2020 240 Greenwich Street Floor 7 East New York, NY 10286 Tel: 212-815-8273 Fax: 212-815-5875 Email: miguel.barrios@bnymellon.com julie.hoffman-ramos@bnymellon.com peter.baumgaertner@hklaw.com 2. Aeropuerto Internacional de Trade Payable $61,950,676 La Ciudad De Mexico SA de CV Av Capitan Carlos Leon SN Penon De Los Banos Venustiano Carranza CDMX 15620 Mexico Contact: Francisco Pardo Tel: 52(55) 2482-2424 Email: fpardo@aicm.com.mx 3. Banco Bilbao Vizcaya Guarantee $25,719,330 Argentaria, S.A. Hermes Av Paseo De La Reforma 243 Colonia Cuauhtemoc Delegacion Cuauhtemoc Distrito Federal 06500 Mexico Attn: General Counsel Tel: 34 537 79 54 Email: maria.zotes@bbva.com; eca.structuring@bbva.com 4. HSBC Mexico SA Guarantee $17,035,285 Paseo De La Reforma 347, 18th FL Exim Bank Co. Cuahtemoc Mexico City 06500 Mexico Contact: General Counsel Tel: 52(55) 5721-5978 Email: cecilia.steta@hsbc.com.mx 5. Aeropuertos y Trade Payable $16,184,197 Servicios Auxiliares AV 602 No 161 San Juan De Aragon Venustiano Carranza CDMX 15620 Mexico Contact: Rosa Maria Davila Morales Tel: 52(55) 5133 1000 Email: mam.comercial@asa.gob.mx 6. Tesoreria De La Federacion Taxes $14,882,399 Domicilio Conocido Distrito Federal CDMX Mexico, Mexico Contact: Jorge Armendariz Jimenez Tel: 618-118-7017 Email: jarmend@imt.mx 7. World Fuel Services Trade Payable $10,344,391 Avenida Libertad 1405 of 1302 Vina Del Mar 1111111 Brasil Contact: Juan Pinto Tel: 569322689200 Email: jpinto@wfscorp.com 8. General Electric Trade Payable $9,189,203 3135 Easton Turnpike Fairfield, CT 06828 Contact: Alan Fretwell Tel: 513-479-9428 Email: alan.fretwell.ge.com 9. Panasonic Avionics Trade Payable $8,324,902 Corporation 3303 Monte Villa Parkway Bothell, WA 98021 Contact: Jose Martinez Tel: 949-462-1943 Email: joser.martinez@panasonic.aero 10. Banco Bilbao Vizcaya Short Term Loan $7,943,114 Argentaria, S.A. Niederlassung Deutschland Neue Mainzer Strasse 28 60311 Frankfurt Am Main Germany Contact: General Counsel Email: maria.zotes@bbva.com; eca.structuring@bbva.com 11. Credit Agricole Corporate and Trade Payable $6,404,527 Investment Bank Tokyo Branch 1 9 2 Higashi Shimbashi Tokyo Minato KU 1050021 Japan Contact: Thomas Jean Tel: 12 122617067 Email: thomas.jean@ca-cib.com 12. Boeing Trade Payable $5,684,079 100 N Riverside Plaza MC 5003-4549 Chicago, IL 60606 Contact: Erika Zavala Tel: 52 8125595386 Email: sales.mexico@boeingdistribution.com 13. Aeropuerto De Guadalajara Trade Payable $5,211,109 SA De CV AV Solidaridad Iberoamerican KM 17 12 Tlajomulco De Zuniga Jalisco Tlajomulco De Zuniga 45659 Mexico Contact: Daniel Osvaldo Arellano Tel: 33366714582 Email: darellanos@aeropuertosgap.com.mx 14. Nordic Aviation Capital Trade Payable $5,160,868 Attn: Chief Contract Officer Stratusvej 12 Billund 7190 Denmark Contact: Mike Fitzgerald Tel: 45 7651 1200 Email: nac@nac.dk 15. Aeropuerto De Monterrey SA De CV Trade Payable $5,058,384 Dom Conocido Carr Miguel Aleman SN Centro De Apodaca Nuevo Leon Mexico Nuevo Leon Monterrey 66600 Mexico Contact: Abigail Campos Medina Tel: 52 81 8625 4300 Email: acampos@oma.aero 16. HSBC Bank USA, N.A. Guarantee Exim $5,045,129 Attn: Daniela Alvarado Bank Aileen Chua 452 Fifth Avenue New York, NY 20018 Contact: Daniela Alvarado Tel: 212-252-2482 Email: daniela.alvarado@us.hsbc.com; aileen.l.chua@us.hsbc.com; carla.g.campo@us.hsbc.com 17. Citibank, NA Guarantee Exim $4,829,251 Attn: Paul Joseph Bank 3800 Citigroup Center Drive Tampa, FL 33610 Tel: 813-604-4724 Email: paul.o.joseph@citi.com 18. SMBC Aviation Capital Limited Trade Payable $4,468,777 IFSC House IFSC Diblin 1 Ireland Dublin Irlanda, Ireland Contact: Federico Pascual Tel: 353 1 859 9000 Email: federico.pascual@smbc.aero 19. IBM Capital Mexico Long Term Loan $4,367,664 1 S De RL De CV Attn: Jose Ramon Garcia Alfonso Napoles Gandara 3111 Pena Blanca Santa Fe Ciudad De Mexico 01210 Mexico Contact: Jose Ramon Garcia Tel: 5270 3095 Email: rastudil@mx1.ibm.com 20. Celestial Aviation Trading Trade Payable $4,334,100 Aviation House Shanon Shannon Ireland, Ireland Contact: Fiona Connolly Tel: 353 61706684 Email: fiona.connolly@gecas.com 21. Asociacion Sindical De Pilotos Union $3,375,738 Aviadores Palomas 110 1ER Piso Reforma Social CDMX, Miguel Hidalgo, 11650 Mexico Contact: Arturo Maliachi Email: arturo.maliachi@aspa.org.mx 22. Air Lease Corporation Trade Payable $3,228,871 2000 Avenue of the Stars 1000N California Los Angeles, CA 90067 Contact: Chief Financial Officer Tel: 310-553-0555 Email: info@airleasecorp.com 23. Grupo Televista SA DE CV Trade Payable $2,409,986 BLV Agua Calente 11606 Aviacion Tijuana Baja California Tijuana 22420, Mexico Contact: Karen Arriaga Tel: 5130 0600 Email: karen_arriaga@telvista.com 24. Sabre Group Inc. Trade Payable $2,400,000 3150 Sabre Drive Mail Drop 8510 SouthL Chicago, IL 60693 Contact: Chris Powers Tel: 817-584-0887 Email: chris.powers@sabre.com 25. MTU Maintenance Trade Payable $2,309,021 Strawinwinshylaan 1639 1077XX Amsterdam, Netherlands Contact: Marek Friedrich Tel: 31(0) 207052592 Email: marek.friedrich@mtu-lease-services.com 26. Wilmington Trust Company Trade Payable $2,161,899 345 Main St. One M&T Plaza 7th Floor Buffalo, NY 14203 Contact: Chief Financial Officer Tel: 302-651-1000 Email: rritrovato@wilmingtontrust.com 27. Aeropuerto De Cancun Sa De CV Trade Payable $2,076,290 KM 22 Carr Cancunchetumal Municipio Benito Juarez Quintana ROO Cancun 77500 Mexico Contact: Alicia Isabel Guzman Cortes Tel: 52-99-8848-7200 Email: aguzman@asur.com.mx 28. Oracle De Mexico Sa De CV Trade Payable $1,813,758 Montes Urales 470 PB Lomas De Chapultepec Miguel Hidalgo CDMX 11710 Mexico Contact: Yuglal Kumar Tel: 553 300 6913 Email: yuglal.kumar@oracle.com 29. Entserv Enterprise Services Trade Payable $1,680,744 Mexico S De Rl De CV Av Prolongacion Paseo De la Reforma 700 Lomas De Santa Fe, Alvaro Obregon CDMX 1210 Mexico Contact: Elizabeth Moreno Tel: 703-245-9700 Email: elizabeth.moreno@dxc.com 30. US Department of Trade Payable $1,616,478 Transportation FAA 6500 S MacArthur Boulevard Oklahoma, OK 73169 Contact: Michelle Leissner Tel: 405-954-9559 Fax: 202-267-3227 Email: 9-AMC-AMZ-Overflight-fees@faa.gov GULFSLOPE ENERGY: Posts $635K Net Loss in Second Quarter -------------------------------------------------------- Gulfslope Energy, Inc., reported a net loss of $634,880 on $0 of revenues for the three months ended March 31, 2020, compared to a net loss of $5.31 million on $0 of revenues for the three months ended March 31, 2019. For the six months ended March 31, 2020, the Company reported a net loss of $788,024 on $0 of revenues compared to a net loss of $5.65 million on $0 of revenues for the six months ended March 31, 2019. There was no revenue during the six months ended March 31, 2020 and March 31, 2019. General and administrative expenses were approximately $0.9 million for the six months ended March 31, 2020, compared to approximately $0.5 million for the six months ended March 31, 2019. Interest expense was approximately $15,000 for the six months ended March 31, 2020, with interest expense of approximately $1.162 million net of interest income of approximately $21,000 and capitalized interest of approximately $1.125 million compared to approximately $21,000 for the six months ended March 31, 2019 with interest expense of approximately $0.252 million net of interest income of approximately $48,000 and capitalized interest of approximately $0.183 million. Loss on debt extinguishment was approximately $1.6 million for the six months ended March 31, 2020 and $5.1 million for the six months ended March 31, 2019. This decrease is due to a loan and subsequent warrant exercise resulting in loan extinguishment. Gain on derivative financial instrument was $1.7 million for the six months ended March 31, 2020 and a loss of approximately $17,000 for the six months ended March 31, 2019. As of March 31, 2020, the Company had $27.16 million in total assets, $24.31 million in total liabilities, and $2.85 million in total stockholders' equity. Gulfslope Energy stated, "The Company has incurred accumulated losses as of March 31, 2020 of $56.4 million, has negative working capital of $18.6 million and for the six months ended March 31, 2020 generated losses of $0.8 million. Further losses are anticipated in developing our business. As a result, there exists substantial doubt about our ability to continue as a going concern. As of March 31, 2020, we had $2.8 million of unrestricted cash on hand; $0.8 million of this amount is for the payment of joint payables from drilling operations. The Company estimates that it will need to raise a minimum of $10.0 million to meet its obligations and planned expenditures through June 2021. The $10.0 million is comprised primarily of capital project expenditures as well as general and administrative expenses. It does not include any amounts due under outstanding debt obligations, which amounted to $15.0 million of current principal and interest as of March 31, 2020. The Company plans to finance operations and planned expenditures through equity and/or debt financings and/or farm-out agreements. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company's accrued liabilities. There are no assurances that financing will be available with acceptable terms, if at all or that obligations can be extended. If the Company is not successful in obtaining financing or extending obligations, operations would need to be curtailed or ceased, or the Company would need to sell assets or consider alternative plans up to and including restructuring." A full-text copy of the Quarterly Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/WyIyop About GulfSlope Headquartered in Houston, Texas, GulfSlope Energy, Inc. -- http://www.gulfslope.com-- is an independent crude oil and natural gas exploration and production company whose interests are concentrated in the United States Gulf of Mexico federal waters. GulfSlope Energy commenced commercial operations in March 2013. GulfSlope Energy was originally organized as a Utah corporation in 2004 and became a Delaware corporation in 2012. Pannell Kerr Forster of Texas, P.C., in Houston, Texas, the Company's auditor since November 2019, issued a "going concern" qualification in its report dated Dec. 30, 2019 on the consolidated financial statements for the year ended Sept. 30, 2018, citing that the Company has a net capital deficiency, and further losses are anticipated in developing the Company's business, which raise substantial doubt about its ability to continue as a going concern. GulfSlope reported a net loss of $13.72 million for the year ended Sept. 30, 2019, compared to a net loss of $2.64 million for the year ended Sept. 30, 2018. HARRIS DAVIS WELCH: $40K Sale of Sardinia Property to McEleveen OKd ------------------------------------------------------------------- Judge John E. Waites of the U.S. Bankruptcy Court for the District of South Carolina authorized Harris Davis Welch's private sale of the 19.5 acres, more or less, more particularly described as all of that certain tract of land, with improvements thereon, lying, being and situate a short distance Northwest of US Highway 301 approximately 2 miles Northeast of the village of Sardinia in School District Number 3 of the County of Clarendon, State of South Carolina, containing 27.95 acres according to a division plat made by James B. Floyd Surveyor revised and traced Feb. 3, 1961, recorded in the Office of the Clerk of Court for Clarendon County in Plat Book 16 at Page 177 and identified thereon as the Virgil Parker tract and bounded thereon, TMS No. 281-00-01-008, to Tim McEleveen for $40,000. The sale is free and clear of all the liens claimed by The Citizens Bank, with all such liens to attach to the proceeds of sale of said property. Harris Davis Welch sought Chapter 11 protection (Bankr. D.S.C. Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith, Esq., at Bird and Smith, PA. HIKMA FINANCE: Moody's Rates Proposed New Sr. Unsecured Notes Ba1 ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Hikma Finance USA LLC's proposed new senior unsecured notes, whose ultimate parent is London-listed generic drug company Hikma Pharmaceuticals PLC ('Hikma', Ba1 stable). The proceeds from the notes will be used for general corporate purposes. The outlook is stable. Concurrently, Moody's has affirmed Hikma's Ba1 corporate family rating (CFR) and Ba1-PD probability of default rating. The outlook remains stable. RATINGS RATIONALE The affirmation of the Ba1 CFR is supported by the company's good performance in 2018-19 against price pressures, particular in the US non-injectable market, its good product pipeline across business segments and geographies, and strong credit metrics as a result of a conservative balance sheet structure. However, those factors are balanced by (1) the company's relatively small scale of $2.2 billion as measured by revenues and somewhat lower margins compared to generics peers, which reflects a degree of commoditization in the portfolio, (2) the high business risks in the generics industry, characterised by social considerations such as constant downward pricing pressure in the retail generic market in the US, product safety and compliance risks stemming from manufacturing complexity, especially in Injectables, and the risk of political instability in the Middle East and North Africa region, which could adversely impact the stock levels and sales Governance considerations relevant to Hikma's credit profile are supportive. The company has been operating below its maximum leverage policy of 3.0x net debt/EBITDA for over a decade. Having said that, Moody's considers that this level would not be commensurate with an investment grade credit rating in light of the current business profile. Hikma has demonstrated prudent acquisition strategies and funding, particularly for its latest and largest (Roxane in 2016), which was financed with cash and equity issued to seller Boehringer Ingelheim ('BI'). On 25 June 2020, Hikma completed the buy-back of around 5% of its ordinary share capital held by BI, for a consideration of around GBP295 million (approximately $363 million). This transaction was concurrent with BI's placement of the rest of its shares in Hikma with institutional investors. Moody's therefore believes that Hikma's share buy-back was a one-off event which does not indicate a permanent shift toward more shareholder-friendly financial policies. In addition, the shares are held in treasury as opposed to being cancelled and could support liquidity. Lastly, Moody's views the dividend payout ratio of 20% to 30% as relatively conservative. Since 2017, Hikma has recorded continued underlying volume growth driven by a degree in differentiation in its product portfolio as well as the benefits from certain drug shortages in the US injectables market in particular (the Injectables segment represents 29% of Hikma's revenue), together with new product launches and capacity expansion. Despite sustained, albeit reducing, price erosion in the mid-single-digit range in percentage terms, Hikma's revenue grew 6-7% organically year-on-year. EBITDA improved at the same time and margins grew on the back of the increasing scale and production efficiencies, as well as a gradual product mix shift toward more complex therapies and chronic diseases. Solid operating performance was the primary driver behind Hikma's deleveraging, characterised by the reduction in Moody's-adjusted gross debt/EBITDA to 1.3x in 2019 from 2.3x in 2016, which represented a trough in market conditions. The group has also consistently generated free cash flow (FCF) averaging around $150 million in the past five years, except in 2016. Moody's forecasts some increase in Hikma's debt in 2020 to fund future growth and the group will also be holding more cash in the short-term. The rating agency expects that earnings growth will support some deleveraging toward 1.5x in the next 18-24 months. Moody's expects the company's organic growth to be in the low-to-mid single digits in percentage terms, backed by continued product pipeline execution, more than offsetting price erosion. Hikma's pipeline includes some larger opportunities such as the generic versions of respiratory drug Advair® (not FDA-approved yet) and cardiovascular drug Vascepa®, which has been approved by the FDA but has an appeal decision pending on the patent challenge. While added launch costs may result in some margin pressure, the rating agency forecasts that Hikma's margins will be broadly stable. The proposed notes are senior unsecured obligations of the issuer Hikma Finance USA LLC, and guaranteed by Hikma, as well as various holding and operating companies representing at least 70% of the consolidated EBITDA of the group. As a result, the proposed new notes are rated in line with the Ba1 CFR. LIQUIDITY Hikma's liquidity is good. At the end of 2019, the company had $442 million of cash on balance sheet. Liquidity is further supported by its expectations that Hikma will (i) generate positive free cash flow of over $100 million per annum and (ii) restore full availability under its $1 billion revolving credit facility (RCF), maturing in December 2021, following the proposed bond placement. Moody's also expects that Hikma will maintain ample headroom under its financial covenants (principally on the RCF and IFC loans). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company was able to improve its scale, market positions and diversity across its business segments. An upgrade would also require Hikma to maintain Moody's-adjusted (gross) debt/EBITDA below 2.0x on a sustained basis and increase Moody's-adjusted EBITDA margin sustainably to the high 20s in percentage terms. Hikma's ratings could be downgraded if Moody's-adjusted debt-to-EBITDA was maintained above 3.0x, or if the group's free cash flow generation turned negative on a sustained basis, leading to a deterioration in its liquidity profile. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Pharmaceutical Industry published in June 2017. HOLOGENIX INC: Seeks to Hire Troutman Sanders as Special Counsel ---------------------------------------------------------------- Hologenix, LLC seeks authority from the U.S. Bankruptcy Court for the Central District of California to hire Troutman Sanders, LLP as its special counsel. Troutman Sanders will handle foreign and domestic trademark clearance, prosecution and enforcement matters. The firm may also provide assistance with respect to intellectual property-related agreements if requested by Debtor. The firm's services will be provided mainly by Susan Stabe, Esq., and Courtney Thornton, Esq., who will charge $745 per hour and $505 per hour, respectively. The rates for the other attorneys at Troutman Sanders range from $500 to $750 per hour. Troutman Sanders has requested a retainer in the amount of $9,000. Ms. Stabe disclosed in court filings that the firm does not represent any interest adverse to Debtor and its bankruptcy estate. Troutman may be reached at: Susan Stabe, Esq. Courtney Thornton, Esq. Troutman Sanders LLP Three Embarcadero Center, Suite 800 San Francisco, CA 94111 Phone: 415-477-5700 About Hologenix LLC Hologenix, LLC is the inventor of Celliant technology (https://celliant.com), a patented, clinically-tested textile technology that harnesses and recycles the body's natural energy. Based in Pacific Palisades, Calif., Hologenix filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-13849) on April 22, 2020. In the petition signed by Seth Casden, chief executive officer, Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Barry Russell oversees the case. Levene, Neale, Bender, Yoo & Brill L.L.P. represents Debtor as legal counsel. HUDSON TECHNOLOGIES: Registers 3M Shares Under Incentive Plan ------------------------------------------------------------- Hudson Technologies, Inc., filed a Form S-8 registration statement with the Securities and Exchange Commission to register 3,000,000 shares of common stock that are issuable under the Company's 2020 Stock Incentive Plan. A full-text copy of the regulatory filing is available for free at https://is.gd/oiWY7B About Hudson Technologies Headquartered in Pearl River, New York, Hudson Technologies, Inc. -- http://www.hudsontech.com/-- is a refrigerant services company providing innovative solutions to recurring problems within the refrigeration industry. The Company's products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide Services performed at a customer's site, consisting of system decontamination to remove moisture, oils and other contaminants. Hudson Technologies reported a net loss of $25.94 million for the year ended Dec. 31, 2019, compared to a net loss of $55.66 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $187.7 million in total assets, $145.4 million in total liabilities, and $42.35 million in total stockholders' equity. Hudson Technologies received on April 17, 2020, a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that, due to recent market turmoil, Nasdaq has filed a rule change tolling the compliance period for bid price requirements through June 30, 2020. As a result, the requirement of the Company to regain compliance with a minimum bid price of at least $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2), has been extended from July 27, 2020 to Oct. 12, 2020. II-VI INC: Fitch Alters Outlook on 'BB' LongTerm IDR to Stable -------------------------------------------------------------- Fitch Ratings has affirmed II-VI Inc.'s LT 'BB' Issuer Default Rating. Fitch has also affirmed II-VI's senior secured debt ratings at 'BB+'/'RR1' and affirmed the senior unsecured convertible rating at 'BB'/'RR4' The Rating Outlook has been revised to Stable from Negative. The ratings and revised Outlook reflect II-VI announcing an equity offering of $750 million, comprising $400 million mandatory convertible preferred stock and $350 million common stock. The use of proceeds will be to repay term debt. Leverage (total debt with equity credit to operating EBITDA, as calculated by Fitch) at fiscal YE 2020 will now be 3.5x, materially improved from its expectation of 5.3x in April when Fitch revised the Outlook to Negative. The rating action is further supported by better than expected 3Q20 results and lower than anticipated coronavirus impact. Fitch now sees about $50 million of impact in fiscal 2020 versus the $175 million expected as of its last update. Additionally, Fitch expects fiscal 2021 growth to be about 1 percentage point higher owing to stronger end-market demand. This view is also supported by II-VI's announced strategic agreement with General Electric Company to license GE's technology to manufacture silicon carbide devices and modules for power electronics. Fitch believes II-VI will have increased financial flexibility to invest in capabilities, pursue M&A and manage cyclical downturns. If II-VI operating performance evolves as Fitch expects while the company maintains its pro forma capital structure, positive rating action could be warranted. KEY RATING DRIVERS Leverage Trajectory: II-VI's gross leverage attainment of 3.5x or below is no longer expected to be delayed by 6-12 months. This is attributable to not only to its announced equity raise, but also firming in II-VI's underlying markets and reduced impact of the coronavirus. This will occur despite the timing of the Finisar Corporation transaction closing only one quarter before the coronavirus started to seriously affect China, in addition to prior weakness owing to trade tensions. Fitch now believes II-VI's gross leverage will be 3.5x at the end of the current fiscal year, pro forma for the use of proceeds of the equity raise to be used for debt reduction, as expected. Headroom to its 3.5x negative sensitivity is now roughly in line with its previous expectations at the time of the initial rating. Substantially improved headroom and reduced uncertainty surrounding the resolution of the coronavirus pandemic support a Stable Outlook. Coronavirus Impact: Fitch now estimates only about $50 million of revenue impact to fiscal 2020 from the coronavirus pandemic, with the expectation that operations will be directly affected through the June quarter. While overall economic growth will not likely recover until calendar 2021, Fitch anticipates II-VI's end markets will recover fully in fiscal 2021 (spanning calendars 2020 and 2021) due to pent up demand, albeit at a level still about $450 million (improved from a difference of $650 million in April) below its fiscal 2021 revenue target one year ago. Fitch still expects II-VI to achieve its targeted $150 million run-rate synergies within three years of closing, at the very end of the September quarter. While Fitch conservatively forecasts resultant operating margin expansion of 2pp-3pp, it sees upside if the company's revenue profile and product mix is stronger than expected. Firming of Growth and Core Markets: Fitch now sees fiscal 2020 pro forma revenue as $450 million weaker (excluding coronavirus impact) than its expectation at the time of its initial rating in April 2019, which improved from $750 million in April 2020. While the company announced qualification of its Sherman, TX, facility in May, 3D sensing's slower deployment still accounts for a meaningful portion of the difference between its current forecast and the one made at the time of its initial rating in 2019. Additionally, SiC power applications have been modestly weaker than expected. However, SiC end-market growth and II-VI's ability to serve it should be enhanced by the strategic partnership announced by II-VI. Furthermore, II-VI continue to focus on scaling its SiC capacity to meet anticipated demand over the medium-term. Financial Flexibility: Its announcement to issue equity and repay debt provides significantly added flexibility. II-VI's headroom to its gross leverage sensitivity is now expected to be materially improved. Fitch believes the company can generate modestly positive FCF in fiscal 2020 while maintaining significant liquidity. Fitch continues to see II-VI moderating its capex in fiscal 2020 while maintaining a cash balance near the upper end of its $300 million-$400 million minimum operating liquidity range. The company remains cautious about share repurchases, preferring to preserve liquidity, and continues to target a net leverage ratio of 2.0x-3.0x, in line with Fitch's gross sensitivities. Beyond fiscal 2020, Fitch expects II-VI's FCF generation as a percent of revenue to approach the low to midsingle digits, providing increased capacity for debt repayment, investment or capability enhancement. DERIVATION SUMMARY II-VI combined with Finisar is one of the largest global photonics and compound semiconductor companies with the scale, market position and technology to address product needs arising from major secular trends. Expected revenue growth and associated margin expansion as a result of enhanced gross margin and increased operating leverage, in addition to the execution of cost synergies, are now delayed. However, they should still result in a profitability profile materially higher than the median 'BB' rated technology peers. This is offset by a financial structure that is at present weaker relative to similarly rated peers given materially higher capital intensity. However, Fitch expects II-VI's financial structure to improve, driven in large part by the company's decision to issue equity and repay acquisition-related term debt. Fitch assigns 0% equity credit to the company's convertible notes. Fitch assigns 100% equity credit to mandatorily convertible preferred stock. No parent-subsidiary linkage or operating environment factor was in effect for these ratings. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer Include: -- Low- to mid-teens revenue decline in fiscal 2020 on a pro forma combined basis, inclusive of approximately $50 million of coronavirus impacts, approximately 20% revenue growth in fiscal 2021, and higher single-digit to low double-digit growth in fiscals 2022 and 2023; -- Approximately 20% operating EBITDA margin in fiscal 2020, expanding about 3pp-4pp over the forecast horizon; -- Capex of $140 million in fiscal 2020, and low teens as a percent of revenue thereafter; -- Maintenance of approximately $300 million-$400 million of readily available cash; -- No M&A or share repurchases (beyond dilution offset). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Total debt with equity credit to operating EBITDA sustained below 2.5x; -- FCF margin sustained above 5%; -- Demonstrated traction in key growth businesses; -- Commitment to a more conservative financial policy. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total debt with equity credit to operating EBITDA sustained above 3.5x; -- FCF margin approaching neutral; -- Near-term growth market challenges; -- Shift to a more aggressive financial policy. 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 II-VI had $388 million of cash at March 31, 2020. The company continues to expect to operate with approximately $300 million-$400 million in cash in the normal course of business. Liquidity is supported by the $450 million senior secured revolving credit facility, $90 million of which was drawn at March 31, 2020. Fitch expects II-VI will generate modestly positive FCF in fiscal 2020, increasing to about $120 million by fiscal 2022. The Term Loan A and Term Loan B mature in September 2024 and September 2026, respectively. Pro forma to the announced transaction, II-VI's Term Loan B will be repaid in full. The term loans have springing maturities to 120 days and 91 days, respectively, inside II-VI's $345 million convertible maturing Sept. 1, 2022, if available liquidity (defined as unrestricted cash on hand plus borrowing availability under the revolver) is less than the remaining principal. Fitch expects II-VI's projected liquidity profile will satisfy the available liquidity requirement. 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. ILPEA PARENT: Moody's Alters Outlook on B2 CFR to Negative ---------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family rating and the B2-PD probability of default rating of ILPEA Parent, Inc. Concurrently Moody's affirmed the B2 ratings on the company's senior secured term loan B due 2023 and on its $25 million senior secured revolving credit facility due 2022. The outlook on all ratings has been changed to negative from stable. RATINGS RATIONALE The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. 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 ILPEA of deterioration in credit quality it has triggered, given its 36% exposure to the automotive industry which has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions. The rating action was triggered by Moody's expectation that ILPEA -- given its weak positioning in the B2 category as of April 2020 -- might be challenged to improve credit metrics back to the requirements for the B2 rating category. Over the next 12-18 months Moody's will closely monitor the further development in particular with regard to order intake and potential cancellations of orders, potential restructuring needs, the ability to generate positive free cash flows, preserve a sufficient liquidity position and the company's ability to reduce leverage. ILPEA's B2 corporate family rating is supported by (1) its leading position in the niche market of gaskets for the refrigeration industry, supported by its long-term customer relationships; (2) high barriers to entry, primarily because of its extensive network of production facilities situated close to major customers and fully integrated value chain; (3) good revenue visibility, driven by a high share of sales generated from replacement cycles and medium-term customer agreements; and (4) good profitability and its expectation of continued stable performance. ILPEA's rating is constrained by its (1) modest scale and moderate product diversification, partly offset by some geographical diversification; (2) high customer concentration, partly mitigated by its market leadership and long-term, established relationships with many of its customers; (3) low free cash flow generation; and (4) relatively aggressive liquidity, with some reliance on drawings under short-term credit lines. LIQUIDITY Backed by additional credit facilities signed to protect ILPEA's liquidity position during the coronavirus driven lockdown ILPEA's liquidity position is adequate. The cash on balance sheet of EUR18 million as of April 2020, EUR14 million availability under the company's $25 million committed RCF and funds from operations expected to exceed EUR22 million are sufficient to cover the expected company's working capital needs, working cash, capital spending and debt repayments for the next 12 months. The credit agreement contains two financial covenants in the RCF to be tested quarterly, defined as the minimum interest coverage ratio and maximum net leverage. The senior secured term loan B is subject to a net leverage covenant. For the twelve months ending 30 April 2020, ILPEA had a leverage ratio of 3.92x compared to the threshold requirement of 4.5x, indicating a 13% headroom. The company expects to have sufficient capacity under the net leverage covenant in the next quarters of fiscal 2020, albeit the headroom is expected to be narrow according to more conservative Moody's forecasts. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Downgrade pressure could be exerted on the rating in the event of continued weak operating performance leading to Moody's-adjusted EBITA margin remaining below 8% on a sustained basis, debt/EBITDA remaining above 6x for an extended period of time or negative free cash flow generation. Likewise, a negative rating action would be considered in case the liquidity position erodes. Albeit currently unlikely, an upgrade would require a solid liquidity position, financial leverage, as measured by Moody's-adjusted debt/EBITDA, sustainably moving towards 5.0x, interest cover exceeding 2.0x EBITA / interest expense on a sustained basis and Moody's-adjusted free cash flow/debt improving sustainably above 5%. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. COMPANY PROFILE ILPEA Parent, Inc., located in Delaware / USA, is the parent company of the ILPEA group, a vertically integrated manufacturer of magnetic gaskets and extruded rubber, plastic and other products for the consumer appliance, automotive and building industries. ILPEA group has a network of 34 plants located across 16 countries, with around 4,000 employees worldwide and primary operations in the US and Europe. In the fiscal year ended October 31, 2019 (fiscal 2019), ILPEA generated revenue of EUR378 million. The revenue from its appliance business accounted for 58% of the total revenue in fiscal 2019, while the same from its automotive and building products segment accounted for 37% and 5% of group revenue, respectively. ILPEA's core business is the production of magnetic gaskets for refrigerators, in which it claims to be a worldwide leader, serving all major appliance producers, with market shares in excess of 80% in the US and Europe. INTELSAT S.A.: Reports $218.8 Million Net Loss in First Quarter --------------------------------------------------------------- Intelsat S.A. has announced financial results for the three months ending March 31, 2020. Intelsat reported total revenue of $458.8 million and net loss attributable to Intelsat S.A. of $218.8 million for Q1. The satellite operator reported EBITDA, or earnings before net interest, taxes and depreciation and amortisation, of $263.3m and Adjusted EBITDA of $294.0 million, or 64% of revenue, for the said period. Total Off-Network and Other Revenues decreased by $2.5m, or 4%, to $54.8m, as compared to the three months ended March 31, 2019. Selling, general and administrative expenses increased by $29.3 million, or 57%, to $81.0 million for the three months ended March 31, 2020, as compared to the same period last year. The increase was primarily due to a $19.5m increase in bad debt expense, largely as a result of a customer that filed for Chapter 11 bankruptcy protection. Commenting on the report, Intelsat's Chief Executive Officer, Stephen Spengler, said: "Like many companies, we were not immune to the effects of COVID-19, which created challenges for our underlying business. Our first quarter results reflect the decline in sea and air travel which negatively impacted our network services business. The media business also experienced disruptions primarily related to the decline in "occasional use" services for sporting events and concerts which were cancelled to comply with the broad stay-at-home orders issued during the period. We were pleased with the resilience of the government services business which delivered stable results in a challenging environment while generating renewals and new business contracts." Spengler concluded: "Last week we announced our decision to opt into the FCC Accelerated C-band Clearing Plan. We are already working closely with our customers and vendors to ensure we achieve the agreed upon milestones. Intelsat is committed to helping the US maintain its leadership in developing advanced telecommunications technologies. Our role in clearing the C-band will help create a winning formula for America in the race to deploy 5G networks." About Intelsat SA Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held operator of satellite services businesses, which provides a diverse array of communications services to a wide variety of clients, including media companies, telecommunication operators, internet service providers, and data networking service providers. The Company is also a provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The Company's administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat S.A. and its debtor affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The petitions were signed by David Tolley, executive vice president, chief financial officer, and co-chief restructuring officer. At the time of the filing, the Debtors disclosed total assets of $11,651,558,000 and total liabilities of $16,805,844,000 as of April 1, 2020. Judge Keith L. Phillips oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; PJT Partners LP as financial advisor & investment banker; Deloitte LLP as tax advisor; and Stretto as claims and noticing agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 27, 2020. J.C. PENNEY: Closing Sales for 154 Stores to End in 4 Months ------------------------------------------------------------ J.C. Penney Company, Inc., announced on June 4, 2020 that it has taken the first step in implementing its store optimization strategy. Following a comprehensive evaluation of its retail footprint and a careful analysis of store performance and future strategic fit for the Company, J.C. Penney identified the first phase of 154 store closures. Following entry of an order at the June 11, 2020, hearing with the U.S. Bankruptcy Court for the Southern District of Texas, in Corpus Christi, Texas, store closing sales will begin at 154 locations. The Company expects additional phases of store closing sales will begin in the coming weeks. As the Company remains focused on its Plan for Renewal and driving sustainable, profitable growth, it intends to reduce its store footprint and focus resources on its strongest stores and powerful eCommerce flagship store, jcp.com. Store closing sales for the first round of store closures are expected to take 10-16 weeks to complete. "While closing stores is always an extremely difficult decision, our store optimization strategy is vital to ensuring we emerge from both Chapter 11 and the COVID-19 pandemic as a stronger retailer with greater financial flexibility to allow us to continue serving our loyal customers for decades to come," said Jill Soltau, chief executive officer of JCPenney. "I am incredibly grateful to our talented associates for their ongoing dedication and their passion for meeting and exceeding our customers’ expectations during this difficult and uncertain time. All impacted associates will be treated with the utmost consideration and respect." Ms. Soltau continued, "We will remain one of the nation’s largest apparel and home retailers as we continue to operate a majority of our stores and our flagship store, jcp.com, to ensure our valued customers continue to have access to the products and brands they need and want. As of June 4, 2020, we have reopened nearly 500 stores since government officials have eased COVID-19 restrictions and we look forward to opening more. We are excited to welcome back our customers and associates at these locations, and we will continue to take actions to be best positioned to build on our over 100-year history." The list of 154 stores that will begin closing sales can be found on the JCPenney Blog. JCPenney continues to monitor CDC guidelines, as well as state and local mandates, to inform its practices, taking extra precautions and going above and beyond those recommendations to ensure the safety of its associates and customers. As previously announced on May 15, 2020, JCPenney entered into a restructuring support agreement with lenders holding approximately 70 percent of JCPenney's first lien debt to reduce the Company’s outstanding indebtedness and strengthen its financial position. To implement the financial restructuring plan, the Company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Kirkland & Ellis LLP is serving as legal adviser, Lazard is serving as financial adviser, and AlixPartners LLP is serving as restructuring adviser to the Company. About J.C. Penney J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors have tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney A committee of unsecured creditors has been appointed in Debtors' Chapter 11 cases. The committee is represented by Cole Schotz, P.C., and Cooley, LLP. J.C. PENNEY: Seeks Court Approval to Hire Quinn Emanuel ------------------------------------------------------- JCP Real Estate Holdings, LLC and two other subsidiaries of J.C. Penney Company, Inc. seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Quinn Emanuel Urquhart & Sullivan, LLP. The firm will assist the special committees formed by each of the boards of directors for JCP Real Estate, J.C. Penney Purchasing Corp., and J.C. Penney Properties, LLC. It will provide independent services at the sole direction of Heather Summerfield and William Transier, members of the special committees. Quinn Emanuel will be paid at hourly rates as follows: Partners $745 - $1,595 Associates/Counsel/Other attorneys $625 - $1,270 Law Clerks/Legal Assistants $355 - $525 The firm received a retainer in the amount of $200,000. Quinn Emanuel made the following disclosures in response to the request for additional information set forth in Paragraph D.1 of the U.S. Trustee Fee Guidelines: 1. The firm did not agree to a variation of its standard billing arrangements. 2. No professional at the firm varied his rate based on the geographic location of the bankruptcy cases filed by the J.C. Penney subsidiaries. 3. The J.C. Penney subsidiaries have not yet approved a budget and staffing plan for the firm. James Tecce, Esq., a partner at Quinn Emanuel, disclosed in court filings that the firm does not have an interest materially adverse to the bankruptcy estates of J.C. Penney's subsidiaries and to their creditors and equity security holders. The firm can be reached through: James C. Tecce, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 51 Madison Avenue, 22nd Floor New York, NY 10010 Telephone: (212) 849-7000 Facsimile: (212) 849-7100 E-mail: jamestecce@quinnemanuel.com About J.C. Penney Company J.C. Penney Company, Inc., one of U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico, and its debtor affiliates filed their voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-20182) on May 15, 2020. Judge David R. Jones oversees the cases. Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their counsel, Jackson Walker LLP as their local and conflicts counsel, and KPMG LLP as tax consultant. Okin Adams, LLP is legal counsel for the ad hoc committee representing equity interest holders in Debtors' bankruptcy cases. J.T. SHANNON: Auction Sale of Surplus Equipment Approved -------------------------------------------------------- Judge Jason D. Woodard of the U.S. Bankruptcy Court for the Northern District of Mississippi authorized J.T. Shannon Lumber Co., Inc.'s auction sale of the following surplus equipment: a. One 5,500 lb. Nissan Forklift Serial number VF05-300957 (2011 Model); b. One 9,000 lb. Nissan Forklift Serial number AN19C50339 (2013 Model); c. One DML Lumber Stacker; d. One 2006 Toyota 4 Runner (black) JTEZU14R460083592; e. One 1977 Ford F-70 Dump -Parts Only- VIN W90AVY12361; f. One 1981 International Dump Truck – Parts Only – 1HTDF227YBGB24718; g. One 1998 Kenworth TK – VIN 1XKDDB9X3WR774799; h. One 1999 Kenworth TK – Parts only- VIN 1XKDDB9X1XR799881; i. One 2006 Freightliner TK – VIN 1FUJA6CV96LW25699; j. One 1997 Peerless trailer – VIN 1PLE04228VPB22974; k. One 1998 Daco trailer – VIN 1DOA48A29W1004367; l. One 1998 Transcraft Trailer – VIN 1TTF4820XW2002429; and m. One 2000 Utility Trailer – VIN 1UYFS2488YA194218. Triumph Bank holds a perfected first priority security interest on the following equipment to be sold: (i) one 15,500 Lb Nissan Forklift Serial number VF05-300957 (2011 Model); (ii) one 9,000 LB Nissan Forklift Serial number AN19C50339 (2013 Model); and (iii) one DML Lumber Stacker. Upon sale, the Debtor will cause the auctioneer to remit directly to Triumph Bank counsel, Robert F. Miller, a sum equal to the gross proceeds of sale of the Triumph Collateral (exclusive of buyer's commission paid by buyer to auctioneer) less the auctioneer's commission of 10% within a period of 10 business days following the close of auction. The Debtor will comply with Fed. R. Bankr. P. Rule 6004(f) and file a report of sale itemizing the property sold, the name of purchase and the price received upon the completion of sale. The net proceeds of sale (excluding the Triumph Collateral) after deduction of auctioneer's commission and expenses will be placed in the DIP bank account and reported in the Debtor's monthly operating reports. About J.T. Shannon Lumber Memphis, Tenn.-headquartered J.T. Shannon Lumber Company, Inc. -- http://www.jtshannon.com/shannonlumber-- is a family-owned company in the hardwood lumber business. It specializes in rough and surfaced lumber, straight-line ripping, double-end trimming, width sorts, and special length pulls. J.T. Shannon Lumber Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Miss. Case No. 19-11428) on April 1, 2019. At the time of the filing, the Debtor disclosed $11,026,770 in assets and $14,721,825 in liabilities. The case is assigned to Judge Jason D. Woodard. Michael P. Coury, Esq., at Glankler Brown PLLC, is the Debtor's legal counsel. JACOBS ENTERTAINMENT: Moody's Confirms B3 CFR, Outlook Negative --------------------------------------------------------------- Moody's Investors Service confirmed all ratings on Jacobs Entertainment, Inc. including the company's B3 Corporate Family Rating, B3-PD Probability of Default Rating and B3 senior secured 2nd lien notes rating. These rating actions conclude the review for downgrade initiated on March 25, 2020. The outlook is negative. The confirmation reflects the re-opening of a majority of Jacobs' gaming properties along with a covenant waiver that provides the company temporary relief under the restricted financial maintenance leverage test until the September 2020 covenant period. Also considered is Moody's view that the company has sufficient liquidity to meet its basic cash needs over the next 12 to 18 months without the need for external financing. This is supported by Jacob's approximately $60 million current cash balance and lack of any near-term debt maturities until its $50 million revolver, which is fully drawn at this time, expires in February 2022. The company's $385 million of 7.875% bonds mature in February 2024. Despite the partial nature of the opening due to ongoing social distancing restrictions and requirements, Moody's expects initial results will be strong in terms of revenue, and given the company's substantially reduced expense base, the flow through to EBITDA will also be strong. This will take some pressure off Jacobs' need to use its current liquidity to support ongoing operations. The negative outlook considers the inherent uncertainty that Jacobs and other gaming companies still face regarding gaming demand, including future efforts to contain the coronavirus that could disrupt visitation along with the pace at which consumer and commercial spending at the company's properties will recover. While initial results from gaming operation re-openings suggest a significant amount of pent-up demand, and the possibility of longer-term benefits related to substantially reduced operating expenses, Jacobs remains vulnerable to the social and economic challenges created by the coronavirus, including efforts to contain the coronavirus along with the potential for a slow economic recovery. High unemployment is also likely to restrain discretionary consumer spending. As a result, the company's ability to reduce leverage within the next 12-18 months remains uncertain and the risk of a violation is elevated when the leverage covenant in September and beyond. Debt/EBITDA on a Moody's adjusted basis for the latest 12-month period ended March 31, 2020 was 7 times. Moody's took the following rating actions on Jacobs Entertainment, Inc.: Ratings confirmed: Corporate Family Rating, at B3 Probability of Default Rating, at B3-PD Senior Secured Second Lien Notes due 2024 at B3 (LGD4) Outlook Actions: Outlook, Changed to Negative from Rating Under Review RATINGS RATIONALE Jacobs' B3 Corporate Family Rating reflects its high leverage, the continued uncertainty created by the coronavirus, the company's relatively small scale in terms of revenue relative to peers, and high earnings concentration with over 80% of EBITDA coming from two markets, Colorado and Louisiana. The rating is supported by the good market position of Jacob's revenue generating assets within its operating regions, certain barriers to entry in the Louisiana market due to laws that limit the locations of new direct truck stop operators -- this provides Jacobs with a certain level of earnings stability -- and regional growth trends in the Reno, NV market where the company owns two land-based casinos. Jacobs has minimal near-term capital expenditure requirements as the company is coming off of a period of heavy investment activity over the past few years and does not have any significant projects currently planned. ESG CONSIDERATIONS The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and asset price volatility have created an unprecedented credit shock across many sectors and regions. The gaming sector is one of the sectors most significantly affected by the shock given the non-essential nature of casino gaming and the sector's historically high sensitivity to consumer demand and sentiment. More specifically, Jacobs' continued exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and makes it vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Financial policies are aggressive with a practice of maintaining high leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Moody's anticipates that Jacobs' earnings decline or liquidity deterioration will be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. The ratings could also be lowered if the company does not successfully address the covenants under its credit agreement after the termination of the covenant suspension period (beginning in September-2020), or it appears the company will need to obtain additional capital to manage through the crisis. A ratings upgrade is unlikely given the weak operating environment and expectation for leverage to remain high and covenant compliance to be uncertain in the near future. Over the longer-term, ratings could be upgraded if it appears that Jacobs can achieve and maintain debt/EBITDA below 5.0x, generate meaningfully positive free cash flow, and maintain good liquidity including comfortably meeting its financial covenant requirements. The principal methodology used in these ratings was Gaming Industry published in December 2017. Jacobs Entertainment, Inc. is a privately held company that does not disclose financial information publicly. The company owns and operates gaming facilities located in Colorado, Nevada and Louisiana. The company owns six land-based casinos: The Lodge Casino and the Gilpin Casino, both in Black Hawk, CO; the Sands Regency and the Gold Dust West Casino in Reno, NV; the Gold Dust West-Carson City in Carson City, NV and the Gold Dust West-Elko in Elko, NV. Jacobs also owns and operates 26 video poker truck stop facilities in Louisiana. Additionally, the company has operations in Cleveland, Ohio that include an aquarium, parking, a 5,000-seat covered outdoor amphitheater, and a dinner cruise and entertainment ship. The company is a wholly-owned subsidiary of Jacobs Investments, Inc. Jeffrey P. Jacobs, the Chief Executive Officer and his family trusts own 100% of JII's outstanding Class A and Class B shares. Revenue for the 12 months ended March 2020 was approximately $380 million. KOHO SOFTWARE: Seeks to Hire Buddy D. Ford as Counsel ----------------------------------------------------- Koho Software, Inc. d/b/a Quest Desk Solutions, seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Buddy D. Ford, P.A., as counsel to the Debtor. Koho Software requires Buddy D. Ford to: a. provide analysis of the financial situation and render advice and assistance to the Debtor in determining whether to file a petition under Title 11, United States Code; b. advise the Debtor with regard to the powers and duties of the Debtor in the continued operation of the business and management of the property of the estate; c. prepare and file the petition, schedules of assets and liabilities, statement of affairs, and other documents required by the Court; d. represent the Debtor at the Sec. 341 Creditor's meeting; e. give the Debtor legal advice with respect to its powers and duties as Debtor and as Debtor in Possession in the continued operation of its business and management of its property; f. advise the Debtor with respect to its responsibilities in complying with the United States Trustee's Guidelines and Reporting Requirements and with the rules of the Court; g. prepare, on behalf of the Debtor, necessary motions, pleadings, applications, answers, orders, complaints, and other legal papers and appear at hearings; h. protect the interest of the Debtor in all matters pending before the court; i. represent the Debtor in negotiation with its creditors in the preparation of the Chapter 11 Plan; and j. perform all other legal services for Debtor as Debtor-in- Possession which may be necessary. The firm's standard hourly rates are: Buddy D. Ford, Esq. $425 Sr. Associate Attorneys $375 Jr. Associate Attorneys $300 Paralegals $150 Jr. Paralegals $100 Prior to the commencement of the bankruptcy case, the Debtor paid Buddy D. Ford an advance fee of $6,717. Buddy D. Ford will also be reimbursed for reasonable out-of-pocket expenses incurred. Buddy D. Ford, partner of Buddy D. Ford, P.A., attests that his firm represents no interest adverse to Debtor or the estate in matters upon which it is to be engaged. The firm can be reached through: Buddy D. Ford, Esq. Jonathan A. Semach, Esq. Heather M. Reel, Esq. BUDDY D. FORD, P.A. 9301 West Hillsborough Avenue Tampa, FL 33615-3008 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@TampaEsq.com Jonathan@tampaesq.com Heather@tanoaesq.com About Koho Software, Inc. d/b/a Quest Desk Solutions Koho Software, Inc. d/b/a Quest Desk Solutions, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 20-04649) on June 17, 2020, disclosing under $1 million in both assets and liabilities. The Debtor hires Buddy D. Ford, P.A., as counsel. L BRANDS: UK Filing to Have Implications on Lingerie Business ------------------------------------------------------------- Samantha Conti and Kellie Ell of WWD reports that L Brands Inc., the parent company of Victoria Secret filed for credit protection in the United Kingdom, a move that will have implications on the lingerie business and the 25 stores in the country. L Brands made use of the U.K.'s "light touch administration" -- a tool similar to a Chapter 11 bankruptcy Stateside -- in early June as it considers options for its 25 U.K.-based stores. "We are taking a number of actions across Victoria's Secret and Victoria's Secret Pink to strengthen and position the business to succeed as a separate standalone company," Stuart Burgdoerfer, L Brands' chief financial officer and interim chief executive officer of Victoria's Secret, said in a statement. The light touch administration, founded in response to the coronavirus pandemic that forced nonessential businesses to temporarily shutter, provides businesses protection from creditors hoping to resolve unpaid debts, while the business continues operations as usual. The company employing the tool, then, has time to consider alternative financing options, including the possibility of a sale. Burgdoerfer said in his statement that the company is using the tool to address operating losses among the U.K. stores as it seeks to restructure lease terms and considers the option to sell that portion of the business. "This action has no impact on our stores in any other part of the world and our U.K. online activities will continue to operate as normal," Burgdoerfer said. "We continue to be energized and intensely focused on turning the Victoria's Secret business around." About L Brands Inc. Headquartered in Columbus, Ohio, L Brands, Inc. operates 2,920 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China, and its brands are also sold in 722 franchised locations worldwide as of February 1, 2020. Its brands include Victoria's Secret, Bath & Body Works, and PINK. L Brands, Inc. sells women's apparel and beauty products. The company offers various products including women's apparel, women's lingerie, beauty and personal care products, home fragrances, and other related products and accessories. L Brands serves customers in the United States, Canada, and the United Kingdom through specialty retail stores, websites, and catalogues. The company is based in Columbus, Ohio. LA MERCED: July 10 Auction of Mortgage Property Set --------------------------------------------------- Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the District of Puerto Rico authorized the procedures proposed by OSP Consortium, LLC, the assignee of Condado 5, LLC and a secured creditor of La Merced Limited Partnership SE, in connection with the sale of the Mortgage Property for $4,059,354, cash, subject to overbid, filed on June 4, 2020. The Mortgaged Property is described in the Registry of Property in the Spanish language as follows: --- URBANA: Predio de terreno radicado en la URBANIZACION ELEONOR ROOSEVELT, radicada en el Barrio Hato Rey del término municipal de Rio Piedras, hoy San Juan, Puerto Rico, con una cabida de TRES MIL TRESCIENTOS CATORCE PUNTO VEINTICINCO (3,314.25) metros cuadrados. En lindes por el NORTE, en ciento veintinueve (129) pies nueve (9) pulgadas con la Avenida A; por el SUR, en igual medida con terrenos de la Asociación de Miembros de la Policía Insular; por el ESTE, en doscientos setenta y cinco (275) pies ocho y tres cuartos (8 ¾) pulgadas, con la Calle "T"; y por el OESTE, en igual medida con la Calle "H". --- Enclava en dicho terreno un edificio todo de concreto, de dos (2) plantas, dedicado a una escuela privada. --- Finca número trece mil cuatrocientos cincuenta y tres (13,453), inscrita alfolio cuatro (4) del tomo mil cuatrocientos sesenta y seis (1466) de Rio Piedras Norte, en el Registro de la Propiedad de Puerto Rico, Segunda Sección de San Juan. The Bidding Procedures are fully incorporated into the Order, and the Debtor is authorized and directed to act in accordance therewith. Within five business days after entry of the Order, OSP will cause the Sale Notice upon all the Sale Notice Parties. To alert all parties who are not known to possess a claim against the Debtor, on or about the same date, OSP will publish notice of the Sale, in a form determined by OSP, in a newspaper of general circulation on two occasions. The Debtor is authorized and directed to enter into an asset purchase agreement, with the Proposed Buyer, for the sale, free and clear of all liens, claims, liabilities, and other interests in respect to the Asset for Sale once the successful bidder has been chosen at the Auction. The Bid Deadline is July 9, 2020, at 5:00 p.m. (ET). The Parties will conduct an auction to determine the highest and best offer for the Sale. The Auction will commence at the office of Fernández Chiqués LLC, 653 Ponce de León, Second Floor, San Juan, PR 00907, on July 10, 2020 at 10:00 a.m. (ET), or such later time on such day or such other place as the Debtor and OSP will notify all Qualified Bidders. The Auction will be conducted in accordance with the Bidding Procedures. The Sale Hearing is set for July 14, 2020 at 10:00 a.m. (AT). The Sale Objection Deadline is July 13, 2020, at 5:00 p.m. (AT). Notwithstanding Bankruptcy Rules 6004, 6006 or otherwise, the Order will be effective and enforceable immediately upon entry and its provisions will be self-executing. All time periods set forth in the Order will be calculated in accordance with Bankruptcy Rule 9006(a). The Debtor is ordered to strictly abide by the Bidding Instructions approved. About La Merced LP La Merced Limited Partnership, S.E., is a single asset real estate, as defined in 11 U.S.C. Section 101(51B)). Based in San Juan, Puerto Rico, La Merced LP filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-06858) on Nov. 27, 2018. In the petition signed by Luz Celenia Castellano, administrator, the Debtor disclosed $6,088,228 in liabilities. Judge Enrique S. Lamoutte Inclan is the case judge. Nelson Robles Diaz Law Offices, PSC, led by founding partner Nelson Robles Diaz, is the Debtor's counsel. LAUREATE EDUCATION: Moody's Affirms B1 CFR & Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Investors Service affirmed Laureate Education, Inc. Corporate Family Rating (CFR) at B1 and revised its outlook to negative following the expansion of the coronavirus outbreak in the markets where company has its educational institutions. Moody's also affirmed the company's Probability of Default Rating at B1-PD. The Senior Secured First Lien Revolving Credit Facility due 2024 rating was affirmed at Ba3, and the Senior Unsecured Bond due 2025 was affirmed at B3. The Speculative Grade Liquidity rating remains SGL-2. Affirmations: Issuer: Laureate Education, Inc. Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Secured 1st lien Revolving Credit Facility, Affirmed Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Unchanged: Speculative Grade Liquidity Rating, Unchanged SGL-2 Outlook Actions: Issuer: Laureate Education, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE Laureate's B1 CFR reflects the company's prominent market position in the international for-profit, post-secondary education space, large scale in multiple geographies and favorable industry fundamentals within its core markets. The company has historically demonstrated solid enrollment growth in its institutions, which has recently come under pressure due to coronavirus outbreak. In addition, as Laureate operates primarily outside of the US and because public funding represents 27% of total largely international tuition proceeds, it does not face the same regulatory pressures relating to Title IV funding that negatively affect many US-based for-profit education providers. Laureate's management states that it retains strong control over its educational curricula with the goal of ensuring that its graduates are successful in completing their education and attaining relevant employment, which supports its regulatory framework. Nevertheless, Laureate remains exposed to the US and international regulatory and compliance environment related to its higher education business. The company's international operating model results in high exposure to foreign currency volatility, creating increased uncertainty regarding meeting financial goals even if enrollment and operational targets are met. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. 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 Laureate of the deterioration in credit quality it has triggered, given its exposure to discretionary spending that is the funding vehicle for many developing economy higher education students, which has left Laureate vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Moody's assesses Laureate's liquidity as good with an SGL-2 speculative grade liquidity rating. The company carries substantial cash balances ($546 million as of March 31, 2020), although only $200 million is held in the US. Moody's notes that to some extent, the company can rely on the sale of unencumbered assets, such as real estate, as an alternative source of liquidity. Laureate's has reduced its operating expenses in response to anticipated reduction in enrollments due to coronavirus outbreak and has fully drawn on its revolving credit facility as a precautionary liquidity measure. Moody's anticipates that the company will continue generating $80-$100 in positive free cash flow annually even with reduced enrollment volumes. The for-profit education sector faces moderate to high exposure to governance risk. Reputation risk is highly relevant to the education sector, as an event that would undermine the educator's reputation as an institution would cause significant harm to the company's operating metrics. Additionally, legal and regulatory challenges, if not remedied, can present increased risk of operating performance deterioration, if specific institution licenses are withdrawn. Laureate's position as a for-profit education university increases reputational risk for the company. The company must balance its duties to shareholders and profits with its duties to students looking for a degree and future job placement. Moody's views Laureate's exposure to these legal and regulatory challenges as part of its ongoing operations in a highly complex industry across multiple jurisdictions. Laureate has begun to explore strategic alternatives for each of its businesses. The strategic review has proceeded at a slower pace due to coronavirus outbreak, increasing operational execution risk for the company. Laureate's financial strategy has largely focused on debt repayment, with estimated $1.7bn in debt repayment executed in 2018 and 2019 via use of proceeds from asset sales. The shareholder base remains concentrated with dual-class stock structure. Wengen Alberta (whose largest investor is KKR) owns 41% of the shares and has approximately 84% voting control. The negative outlook reflects anticipated deterioration in enrollments across Laureate's educational network and anticipation of revenue decline as coronavirus outbreak impacts individual country economies where Laureate operates and reduces ability of its current and prospective students to finance their higher education. Moody's expects the company's operations to remain exposed to foreign currency exchange risk, with a potential for negative impact on earnings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The outlook could be revised to stable upon meaningful reduction in coronavirus outbreak and demonstrated stabilization or growth in enrollments in the company's higher education institutions, leading to stabilization in revenue generation. Ratings could be upgraded if the company further sustains its de-levering trajectory, while clarifying further its broader strategy in its core markets. Laureate would need to maintain overall growth and positive cash-flow generation while remaining committed to its reduced debt capital structure and prudent financial policy. In addition, the company would need to maintain revolver availability while generating positive free cash flow (before consideration of proceeds from asset sales) that would demonstrate good liquidity. Credit metrics sustained at the following levels would support higher rating consideration: debt to EBITDA sustained below 2x times, EBITA to interest in excess of 2x, retained cash flow to debt sustained above 20% and positive free cash flow. The ratings could be downgraded if the company experiences a weakening in enrollments, or if the company cannot successfully improve its operating margins while continuing to manage foreign currency risk, possibly resulting in weaker liquidity or further increases in debt to support operations. A downgrade may also be warranted if the company's learning institutions become subject to a negative financial action due to regulatory concerns, such as reduced funding, or removal of license to operate. Specifically, a downgrade could be warranted if debt to EBITDA exceeds 3x times for a prolonged period, if EBITA to interest is sustained below 1.5x time, or if total unrestricted liquidity falls below $300 million. Laureate is based in Baltimore, Maryland, and operates a leading international network of accredited campus-based and online universities with over 25 institutions primarily focused in Latin America, offering academic programs to approximately 875,000 students at over 150 campuses and online delivery. Laureate reported revenues of approximately $3.2 billion for fiscal year 2019. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. LOOT CRATE: Seeks to Extend Exclusivity Period Through Sept. 8 -------------------------------------------------------------- Old LC, Inc., formerly known as Loot Crate Inc. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive periods for the companies to file a disclosure statement and plan by ninety days through Sept. 8 and to obtain acceptance of a plan through Nov. 9. The court previously extended the exclusive filing period and plan solicitation period through June 8, and August 10, respectively. Since the court's prior extension of the exclusive periods, the companies have accomplished the following: * Continued to resolve substantial tax claims, which are to be paid under the court-approved tax funding agreement, further resolving claims against the estates. In fact, the Debtors have now resolved tax claims for state sales tax obligations for at least thirteen out of twenty-eight of the states that may have potential claims against the estates. * The Debtors have fostered a negotiating dynamic between the pre-petition lender, and the Creditors' Committee. Discussions have started, and the Debtors expect they will be working on or negotiating a plan term sheet during this extended period, or some other resolution satisfactory for these cases -- or will be providing information and thoughts to allow such negotiation to take place among the pre-petition lender and the Creditors' Committee. * Continued investigating the actions by certain of the Debtors' former insiders and parties which may have exercised control or blocking positions with respect to the Debtors actions. About Loot Crate Inc. Founded in 2012, Loot Crate, Inc. is a worldwide leader in fan subscription boxes. It partners with industry leaders in entertainment, gaming, sports and pop culture to deliver monthly themed crates; produces interactive experiences and digital content; and films original video productions. Since 2012, the company has delivered more than 32 million crates to fans in 35 territories across the globe. Loot Crate and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11791) on Aug. 11, 2019. Loot Crate was estimated to have less than $50 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Debtors tapped Bryan Cave Leighton Paisner LLP as lead counsel; Robinson & Cole LLP as Delaware and conflicts counsel; FocalPoint Securities, LLC as investment banker; WithumSmith+Brown, PC as tax consultant; Sitrick Group, LLC as communications consultant; Mark Palmer of Theseus Strategy Group as chief transformation officer; and Portage Point Partners as financial advisor. Stuart Kaufman of Portage Point serves as the Debtors' chief restructuring officer. The Debtors also tapped Bankruptcy Management Solutions, Inc., which conducts business under the name Stretto, as claims agent. The firm maintains the site https://case.stretto.com/lootcrate. The U.S. trustee for Region 3 appointed a committee of unsecured creditors on Aug. 22, 2019. The committee retained Morris James LLP as counsel; Dundon Advisers LLC as financial advisor; and FocalPoint Securities, LLC as investment banker. MACY'S INC: Two Stores Reopen at Wyoming Valley Mall ---------------------------------------------------- Denise Allabaugh, writing for Citizens Voice, reports that two stores of Macy's reopened at Wyoming Valley Mall on June 8, 2020, while the rest of the mall remained closed because of COVID-19 pandemic. The anchor tenant's stores were permitted to reopen as Luzerne County remains in the yellow phase because they have their own entrances. JCPenney, another anchor tenant at the mall, has not reopened and spokeswoman Kristen Bennett could not say when it will reopen. "While we are planning to reopen another round of stores this Friday, June 12, 2020 the Wyoming Valley Mall store is not in that list and we don't have a reopening date to share on that location yet," Bennett said in an email. The remainder of the mall has been closed since March and can't open until the green phase, according to Gov. Tom Wolf's reopening plan. It's unclear when the green phase will be. Wolf's plan said the mall must cap occupancy at 50%. A sign outside the mall asks customers to check its website at http://www.shopwyomingvalleymall.com/for updates. A sign on its front door asks customers to follow health guidelines, including covering their mouth and nose with masks, keeping a distance of six feet from other customers, not shaking hands and staying home if you've had a cough or fever in the last 72 hours. Social distancing markers are in place inside the store. A sign at its makeup counter says that high touch services were suspended and cleaning procedures were increased. Employees are required to wear masks. Andrea Schwartz, senior director of media relations for Macy's, said the store implemented safety protocols such as more frequent and enhanced cleaning, hand sanitizer stations throughout the store and plexiglas shields at some registers. In addition, Macy's provides daily wellness checks for employees. Macy's also offers curbside pickup. Shopper Isaiah Francis of Wilkes-Barre said he was happy Macy's finally reopened. He arrived at the store shortly after it opened looking to buy clothes and shoes. "Thank God it's open again," Francis said. "I had a rough time being in the house all the time being quarantined. Some stores were open but it wasn't the stuff I like to buy." Macy's reopening at the Wyoming Valley Mall came after the retailer's stock dropped a massive 70% this year. Macy's recently announced it expects its losses during the coronavirus pandemic might amount to $1.1 billion in the first quarter as it had to furlough the majority of its workers and close stores. J.C. Penney recently revealed an initial list of 154 locations that will close permanently as it tries to stabilize its finances under Chapter 11 bankruptcy. The store at the Wyoming Valley Mall was not on the list but five other locations in Pennsylvania are slated to close. About Macy's Macy's, Inc., an omni-channel retail organization, operates stores, Websites, and mobile applications. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. Macy's Inc. was founded in 1830 and is based in Cincinnati, Ohio. MAGNOLIA LANE: Bankruptcy Attorney to Provide Additional Services ----------------------------------------------------------------- Magnolia Lane Condominium Association, Inc. filed an amended application with the U.S. Bankruptcy Court for the Southern District of Florida authorizing its attorney to assist the association in collecting assessment fees from condominium unit owners. The collection process will be as follows: John Paul Arcia, Esq., the attorney handing Magnolia Lane's Chapter 11 case, will receive funds into his trust account from delinquent unit owners, including his fees and the amount due to the association. Mr. Arcia will disburse a portion of the collections to the association within five days following receipt of the funds. The agreement between the attorney and the association does not require the latter to advance collection costs such as filing fees and other court costs as the attorney's retainer includes an advance for these out-of-pocket expenses. Mr. Arcia continues to have no connection with creditors and other parties involved in Magnolia Lane's bankruptcy case, according to court filings. Mr. Arcia holds office at: John Paul Arcia, Esq. John Paul Arcia, P.A. 175 SW 7th Street, Suite 2000 Miami, FL 33130 Telephone: (786) 429-0410 Facsimile: (786) 429-0411 Email: parcia@arcialaw.com About Magnolia Lane Condominium Association Based in Miami, Fla., Magnolia Lane Condominium Association, Inc. filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 19-24437) on Oct. 28, 2019. In the petition signed by Mercedes Rodriguez, vice president, Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Judge Laurel M. Isicoff oversees the case. Debtor has tapped John Paul Arcia, P.A. as its bankruptcy counsel; Florida Property Management Solutions, Inc. as its property manager; and Preferred Accounting Services and Kapila Mukamal, LLP as its accountants. MARY'S WOODS: Fitch Affirms BB Rating on Series 2018 Bonds ---------------------------------------------------------- Fitch Ratings has affirmed the 'BB' ratings on the following Hospital Facility Authority of Clackamas County, Oregon bonds, issued on behalf of Mary's Woods at Marylhurst: -- $16,700,000 senior living revenue bonds, series 2018A; -- $4,350,000 senior living revenue bonds, series 2018B-1; -- $6,250,000 senior living revenue bonds, series 2018B-2; -- $13,000,000 senior living revenue bonds, series 2018B-3. In addition, Fitch has affirmed the 'BB' rating on the following bonds issued by the Public Finance Authority on behalf of Mary's Woods: -- $114,815 000 senior living revenue and refunding bonds, series 2017A. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of obligated group (OG) gross revenues, a mortgage lien on certain property and a debt service reserve fund. KEY RATING DRIVERS Successful Project Completion Construction risk related to Mary's Woods' multi-stage expansion project (the Village) was eliminated with the project being completed on time and under budget. The project included expansion of Mary's Woods' total independent living units to 477 units from 283 units and total assisted living units to 155 units from 104 units. Stage I was completed and opened in January 2019 and Stage II was completed and opened in December 2019. Management expects to put $5.6 million of remaining bond funds towards pay down of the existing permanent debt (Series 2017A bonds). Although construction risk has been eliminated, fill-up risks with the Stage II ILUs still remain. High, But Improving Debt Position With the completion of the Village and successful fill-up of the new ILUs coupled with pay down of temporary debt over the past year, Mary's Woods' leverage position has significantly improved through fiscal 2019 (June 30 year-end) and through the first nine months of fiscal 2020. All series 2017 temporary debt has been paid off. This resulted in improved cash-to-debt metrics of 20% (based on Fitch's calculation, which includes temporary debt) as of fiscal 2019 and 25% as of March 31, 2020. These results are generally in line with Fitch's below-investment-grade medians of 33% cash-to-adjusted debt. As fill-ups continue, Fitch expects Mary's Woods will continue to pay down temporary debt with initial entrance fees resulting in moderate improvements in leverage metrics over the medium term. Strong Demand Indicators The primary service area boasts favorable income, growth and real estate trends, which have supported strong demand and high occupancy, mitigating competitive threats. This results in very strong and consistent occupancy across its campus. The demand was also reflective in the successfully sale and fill-up of the new ILUs. Mary's Woods' strong market position is further seen in the 233-member wait list for the new expansion units and 298-member waiting list for the existing campus as of March 31, 2020. Adequate Financial Position Mary's Woods net operating margin (NOM)-adjusted of 19% as of fiscal 2019 was consistent with Fitch's BIG category median at 19%. Nom-adjusted was weaker as of March 31, 2020 at 8.3% due to lighter entrance fees from turnover year-to-date. ILUs have been filling up, allowing some temporary debt to be paid down and unrestricted cash and investments to grow to $35 million as of March 31, 2020. Unrestricted cash and investments were strong at 352 days cash on hand (DCOH) as of the nine-month interim period. ASYMMETRIC RISK FACTORS: There are no asymmetric risk factors affecting the rating determination. RATING SENSITIVITIES The rating and Stable Outlook reflect Fitch's expectation that Mary's Woods' leverage position will continue to improve as the new ILUs and ALUs continue to fill up and as initial entrance fees are used to pay down temporary debt. Robust occupancy is expected through the medium term based on current demands. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Pay down of all temporary debt coupled with significant improvements in leverage metrics where cash-to-debt and debt-to-net available ratios improve to levels that are more in line with a higher rating. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Slower than expected fill-up of ILUs resulting in insufficient funds to pay off temporary debt when due; -- If unrestricted cash and investments weakens significantly to levels that no longer support the current rating; -- Should economic conditions decline further than expected from Fitch's current expectations for an economic contraction, or should 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, and there could be rating pressure on Mary's Woods' existing rating. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure 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 Mary's Woods is a Type B life plan community that opened in 2001 in Lake Oswego in Oregon's Willamette Valley, on land owned by the Sisters of the Holy Names of Jesus and Mary (SNJM, Sisters). Mary's Woods operates a life plan community consisting of 477 ILUs and 155 ALUs (includes new units from the recent expansion). As of this fiscal year, management has transitioned the remaining five skilled nursing beds into ALUs and no longer has exposure. Total operating revenues were $28.5 million in fiscal 2019. 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 Mary's Woods' 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. Contract Type The overwhelming majority of residents at Mary's Woods are in 80% refundable contracts with the remaining residents in non-refundable contracts. The 80% refundable contract amortizes 2% per month for five months from the date of occupancy plus an immediate 10% upon move in. The refund is payable on termination and re-occupancy of the unit. The non-refundable entrance fee contract (offered on a very limited basis on the existing campus) amortizes 2% per month for 45 months from the date of occupancy plus an immediate 10% upon move-in. Mary's Woods is also offering a 50% refundable contract (amortizes 2% per month for 20 months from the date of occupancy plus an immediate 10% upon move-in) to the Village expansion residents. As of March 31, 2020, 87% of the ILU expansion project residents selected the 80% contract, 9% selected the 50% refundable contract and 4% selected the non-refundable contracts. 100% of the new ALU residents are on 80% refundable contracts. Successful Completion of Expansion Plan The Village expansion project added a combined 198 ILUs and 48 ALUs to its current 392-unit campus. Fitch views management's oversight of the project was favorable with the project completed on time and under budget. Presale activity was strong as the new ILU buildings experienced successful fill-up with 81% of the new units occupied as of March 31, 2020. Total ILU occupancy (including existing and new ILUs) was strong at 90% as of March 31, 2020. Stage II presale activity was also strong however fill-up has been slower year-to-date, partly due to the coronavirus pandemic. As of March 31, 2020, 24% of the ALUs were occupied with a total ALU (including existing and new ALUs) occupancy rate of 69%. Move-ins have been slower as a result of residents postponing scheduled move-in times. The community has only experienced one cancelation relating to the coronavirus pandemic and expects move-ins will continue and improve over the next few months. Fitch expects the community to be able to successfully fill the new units given the long waitlist for existing and new units. Improving Debt Position With the successful fill-up of the Stage I units, Mary's Woods has paid down all of the Series 2017 temporary debt with initial entrance fee deposits year-to-date. This significantly decreased total debt levels to $142 million as of March 31, 2020, down from a high of $217 million at the end of fiscal 2018. With construction successfully completed and fill-ups continuing, management expects to significantly pay down the remaining 2018 temporary debt over the medium-term. As of March 31, 2020, Mary's Woods' cash to debt improved to 25% compared to 20% at fiscal 2019. There is $11 million of the Series 2018 temporary debt still outstanding as of March 31, 2020. Fitch expects the community's leverage position to improve over the next fiscal year as the remaining units fill up and initial entrance fees are used to pay down the remaining temporary debt. Maximum annual debt service equals $8.8 million, which includes the series 2017A and 2018A bonds and the annual base rent on the ground lease, which is on parity with both series of bonds. The base rent, payable in semi-annual installments, is $75 thousand for the original ground lease, $75 thousand for Stage I and $25 thousand for Stage II. Stage I and Stage II base rent payments are due within 10 days after a certificate of occupancy is issued by the City of Lake Oswego for each respective stage. Additional rent, calculated based on all units for the original lease and Stage I and II ILUs and ALUs for the expansion lease, is subordinate to both debt service and base rent payments. The additional rent amount accrues separately for each stage based on when both 85% occupancy is achieved and all the temporary debt is paid in full. The debt burden improved through March 31, 2020 as a result of paying down temporary debt. The community's MADS as a percent of annualized nine-month revenues improved to 24% compared with 31% as of fiscal 2019. The organization generated very slim Fitch calculated MADS coverage of 0.4x through the interim period (though MTI calculated actual debt service coverage was robust at 2.09x as of March 31, 2020). The first year of full MADS covenant testing will occur on the earlier of one full fiscal year following stabilized occupancy (93%) or fiscal 2023. Mary's Woods' debt-to-net available also improved to 25x in fiscal 2019 and should improve over time as temporary debt is repaid and core operating revenue grows as a result of increased occupancy. SOLID OCCUPANCY AND DEMAND Overall economic indicators are strong within the primary service area, with favorable growth, income and real estate values driving strong demand for life plan communities. This has helped lead consistently strong occupancy levels in ILUs and ALUs, which accounted for approximately 98% of fiscal 2019 net revenues. In the current fiscal year and moving forward, 100% of revenues will be derived from ILU and ALUs as Mary's Woods have converted the remaining SNF beds to ALUs earlier this year. As of March 31, 2020, Mary's Woods had 90% occupancy in its ILUs and 69% occupancy in its ALUs (includes existing and new units). Strong demand is also seen in a robust wait list of 298 depositors for the main campus and 233 for the new village as of March 31, 2020. Management is on track to meet occupancy covenant requirements for its Stage II ILUs. Per Mary's Woods' MTI, the community is required to meet 40% occupancy of the Stage II ILUs as of June 30, 2020. As of March 31, 2020, Stage II ILU occupancy was favorably at 63%. Although the coronavirus pandemic somewhat delayed scheduled move-ins, residents continue to slowly move-in and will continue over the next few months. As of March 31, 2020, Mary's Woods had a total of 46 (of 54 new units) net reservations for its Stage II units. FINANCIAL PERFORMANCE AND POSITION Slower turnover for existing units due to the coronavirus pandemic resulted in lighter net entrance fees received year-to-date. Although the virus did not have much impact on the community, it did stretch the timeframe that it takes to turnover existing units and get them move-in ready. However, Mary's Woods generated very strong initial entrance fees from new units. In fiscal 2019, Mary's Woods collected $62 million of initial entrance fees from new units and $23 million as of March 31, 2020. This allowed Mary's Woods to pay down the Series 2017 temporary debt ahead of schedule. Even with the pay down in debt, unrestricted cash and investments levels increased to $35 million as of March 31, 2020. Future capex is expected to temper following a period of high capital spending related to the Village expansion project. Management projects capital spending to be at or below 50% of depreciation over the medium term. Mary's Woods' average age of plant improved to nine years as of fiscal 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). MERITAGE COMPANIES: Case Summary & 16 Unsecured Creditors --------------------------------------------------------- Debtor: Meritage Companies, LLC 1400 E. Patty Dr. Wasilla, AK 99654 Case No.: 20-07718 Business Description: Meritage Companies, LLC, is a land developer in Wasilla, AK. Chapter 11 Petition Date: June 30, 2020 Court: United States Bankruptcy Court District of Arizona Judge: Hon. Brenda K. Martin Debtor's Counsel: Lamar D. Hawkins, Esq. GUIDANT LAW, PLC 402 E. Southern Ave Tempe, AZ 85282 Tel: 602-888-9229 E-mail: cindy@guidant.law Estimated Assets: $0 to $50,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Jack A. Barrett, manager. A copy of the petition containing, among other items, a list of the Debtor's 16 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/TBOthf MIA & ASSOCIATES: Seeks to Hire Fuqua & Associates as Legal Counsel ------------------------------------------------------------------- Mia & Associates Realty Group, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Fuqua & Associates, P.C. as its legal counsel. The firm's services will include: (a) legal advice with respect to the powers and duties of Debtor in the continued management of its business and property. (b) preparation of pleadings; and (c) negotiation and preparation of a potential plan of arrangement. The firm will be paid at hourly rates as follows: Richard L. Fuqua, Attorney-in-Charge $600 Mary Ann Bartee, Associate $300 T.J. O'Dowd, Legal Assistant $105 Richard Fuqua, Esq., at Fuqua & Associates, 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: Richard L. Fuqua, Esq. Fuqua & Associates, P.C. 8558 Katy Freeway, Suite 119 Houston, TX 77024 Telephone: (713) 960-0277 Facsimile: (713) 960-1064 About Mia & Associates Realty Group MIA & Associates Realty Group, LLC is the fee simple owner of four real properties located in Texas having a total current value of $1.4 million. On May 20, 2020, MIA & Associates Realty Group filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-32708). At the time of the filing, Debtor was estimated to have $1,406,088 in total assets and $880,823 in total liabilities. Judge Jeffrey P. Norman oversees the case. Debtor has tapped Fuqua & Associates, P.C. as its legal counsel. MILLMAC CORPORATION: Exclusivity Period Extended Until Aug. 14 -------------------------------------------------------------- Judge Michael Williamson of the U.S. Bankruptcy Court for the Middle District of Florida extended through August 14 the deadline for Millmac Corporation to file a plan and disclosure statement, and the exclusivity period for filing a plan. The Debtor sought the extension to assess the long-term impact of the COVID-19 pandemic on its customers before it can file a plan. About Millmac Corporation Millmac Corporation is a provider of specialized marine labor, ship repair and dredging for industrial and residential uses. Based in Bartow, Fla., Millmac Corporation filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 19-11877) on Dec. 18, 2019. In the petition signed by Michael J. Miller, president, the Debtor disclosed $1,308,639 in assets and $1,619,039 in liabilities. Susan Heath Sharp, Esq., at Stichter, Riedel, Blain & Postler, P.A., is the Debtor's legal counsel. MODELL'S SPORTING: Hires Janover LLC as Tax Service Provider ------------------------------------------------------------ Modell's Sporting Goods, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Janover LLC, as tax service provider to the Debtor. Modell's Sporting requires Janover LLC to: a. recast work papers from a fiscal year to a calendar year; b. perform year-end tax closing and tax return preparation tasks; c. analyze of other income and overhead allocation; d. render intercompany account reconciliations between the Debtors and related companies; e. calculate and reconcile the Debtor's obligation to shareholders; f. prepare and file U.S. income tax return for an S corporation; g. prepare and file state tax returns for the qualified subsidiaries; and h. complete such other and further tasks necessary in the bankruptcy proceedings. Janover LLC will be paid at these hourly rates: Partners/Directors $460 to $570 Principals $395 to $415 Senior Managers $330 to $385 Managers $295 to $310 Supervisors $235 to $275 Senior Associates $225 to $235 Associates $175 to $180 Clerical Staffs $100 to $105 Janover LLC agreed to waive any prepetition claim against the Debtors in the amount of $25,500. Janover LLC will also be reimbursed for reasonable out-of-pocket expenses incurred. Samuel Greenberger, a partner of Janover 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. Janover LLC can be reached at: Samuel Greenberger JANOVER LLC 485 Madison Avenue, 9th Floor New York, NY 10022 Tel: (212) 792-6300 About Modell's Sporting Goods Modell's Sporting Goods -- https://www.modells.com/ -- is a family-owned and operated retailer of sporting goods, athletic footwear, active apparel, and fan gear. Modell's Sporting Goods operates stores throughout New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, New Hampshire, Delaware, Maryland, Virginia and the District of Columbia. Modell's Sporting Goods, Inc., and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 20-14179) on March 11, 2020. Modell's Sporting Goods was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Vincent F. Papalia is the case judge. The Debtors tapped Cole Schotz P.C. as counsel; Berkeley Research Group, LLC, as restructuring advisor; and Prime Clerk LLC as claims agent. On March 23, 2020, the Office of the United States Trustee appointed the Official Committee of Unsecured Creditors of Modell's Sporting Goods. The Committee retained Lowenstein Sandler LLP, as counsel. MTE HOLDINGS: Hires Greenhill & Co as Investment Banker ------------------------------------------------------- MTE Holdings LLC, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Greenhill & Co., LLC, as financial advisor and investment banker to the Debtors. MTE Holdings requires Greenhill & Co to: (a) review and analyze the Debtors' assets and the historical financial performance of the Debtors, including their liquidity; (b) analyze the Debtors' financial results and key operating performance indicators; (c) review and analyze the business plan and financial projections prepared by the Debtors, including, but not limited to, testing assumptions, and comparing those assumptions to historical Debtor and industry trends; (d) evaluate the Debtors' potential debt capacity in light of its projected cash flows; (e) assist in the determination of an appropriate capital structure for the Debtors; (f) assist in the determination of a range of values for the Debtor(s) as a going concern; (g) identify and initiate a potential Restructuring Transaction, M&A Transaction or New Capital Raise; (h) assist the Debtors in raising, structuring and effecting new debt, equity or other securities, including, but not limited to, bridge, debtor-in-possession or exit financing, evaluating proposals received and assisting in negotiating final commitment letters and definitive documentation for a New Capital Raise; (i) assist the Debtors in conducting a potential M&A Transaction, including assisting in structuring a Section 363 sale in a Chapter 11 bankruptcy ("Section 363 sale") or other sale process; (j) evaluate strategic alternatives of the Debtors, and develop Restructuring Transaction, M&A Transaction and New Capital Raise frameworks; (k) provide advice and coordinate with management and counsel to develop a strategy for Restructuring Transactions, M&A Transactions and New Capital Raises and other transactions, as applicable; (l) provide financial advice and assistance to the Debtors in structuring any new securities, other consideration or instruments to be offered and issued in connection with a Restructuring Transaction, M&A Transaction and a New Capital Raise; (m) assist the Debtors and their other professionals in reviewing the terms of any proposed Restructuring Transaction, M&A Transaction and a New Capital Raise, in responding thereto, and if directed, in evaluating alternative proposals for a Restructuring Transaction, M&A Transaction or a New Capital Raise; (n) advise the Debtors on the risks and benefits of considering a Restructuring Transaction, M&A Transaction or New Capital Raise with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors; (o) assist or participate in negotiations with the parties in interest, including, without limitation, any current or prospective creditors of the Debtors or their respective representatives in connection with a Restructuring Transaction, M&A Transaction or New Capital Raise; (p) advise the Debtors with respect to, and attend, meetings of the Debtors' senior management, board of directors, special committee of the board of directors, creditor groups and other interested parties, as necessary, with respect to matters on which Greenhill has been engaged to advise; (q) if requested by the Debtors, participate in hearings before the Court and provide relevant testimony with respect to the Firm's services and the matters described herein, as well as issues arising in connection with any proposed Plan in the Firm's area of expertise concerning a Restructuring Transaction, M&A Transaction or New Capital Raise; and (r) provide such other general advisory services and investment banking services as are customary for similar transactions and as may be mutually agreed upon by the Debtors and the Firm. Greenhill & Co will be paid as follows: a. Monthly Advisory Fee. Commencing as of the date of this Agreement, a non-refundable financial advisory fee of $175,000 per month (the "Monthly Advisory Fee"), $125,000 of which shall be earned and paid promptly by the Debtors on a monthly basis in advance and $50,000 of which shall be earned on a monthly basis in advance but accrue and be payable promptly upon payment of the Completion Fee, provided that the initial Monthly Advisory Fee will be pro- rated for any incomplete monthly period of service. b. Completion Fee. If at any time during the Fee Period (defined in the Engagement Letter as the period including (i) the term of the Engagement Letter and Greenhill's engagement thereunder, and (ii) the period beginning upon the termination of the Engagement Letter and the Firm's engagement thereunder and extending twelve (12) months thereafter) the Debtors consummate a Restructuring Transaction or M&A Transaction, or a definitive agreement with respect thereto is executed at any time prior to the expiration of the Fee Period (which definitive agreement subsequently results in the consummation of a Restructuring Transaction or an M&A Transaction), Greenhill shall be entitled to receive a fee (the "Completion Fee"), payable promptly at the closing thereof, equal to $5,000,000. c. New Capital Fee. If at any time during the Fee Period, the Debtors raise new capital, or a definitive agreement with respect thereto is executed at any time prior to the expiration of the Fee Period (which definitive agreement subsequently results in the consummation of a New Capital Raise, at any time), a new capital fee (the "New Capital Fee") equal to: (i) 1% of the face amount of any senior secured debt raised, including, without limitation, any debtor in possession financing raised; (ii) 2% of the face amount of any junior secured debt raised; (iii) 3% of the face amount of any unsecured or subordinated debt raised; (iv) 5% of any hybrid capital, equity capital, or capital convertible into equity raised, including, without limitation, equity underlying any warrants, purchase rights or similar contingent equity securities (each raise described in this sub-clause (iv) and the foregoing sub- clauses (i) – (iii), a "New Capital Raise"). d. Credit. The Firm shall credit against any Completion Fee (i) 50% of the Monthly Advisory Fees paid in cash in excess of $1,050,000, and (ii) 50% of any New Capital Fees paid, so long as such Completion Fee is paid in full and provided that the sum of the foregoing credits shall not exceed the Completion Fee. Greenhill & Co will also be reimbursed for reasonable out-of-pocket expenses incurred. Neil A. Augustine, Vice Chairman and Co-Head of Financing Advisory & Restructuring for North America at Greenhill & Co., 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. Greenhill & Co can be reached at: Neil A. Augustine GREENHILL & CO., LLC 300 Park Avenue New York, NY 10022 Tel: (212) 389-1539 Fax: (212) 389-1539 E-mail: Neil.Augustine@greenhill.com About MTE Holdings LLC MTE Holdings LLC is a privately held company in the oil and gas extraction business. MTE sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-12269) on Oct. 22, 2019. In the petition signed by its authorized representative, Mark A. Siffin, the Debtor disclosed assets of less than $50 billion and debts of $500 million. Judge Karen B. Owens has been assigned to the case. The Debtor tapped Kasowitz Benson Torres LLP as its bankruptcy counsel; Morris, Nichols, Arsht & Tunnell, LLP as its local counsel; Greenhill & Co., LLC, as financial advisor and investment banker; Ankura Consulting LLC, as chief restructuring officer; and Stretto as its claims and noticing agent. NATIONAL MEDICAL: Seeks to Hire Karalis as Special Counsel ---------------------------------------------------------- National Medical Imaging, LLC and National Medical Imaging Holding Company, LLC seek approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Karalis, PC as their special counsel. Karalis will represent Debtors in their case against U.S. Bank N.A. and several others in the U.S. District Court for the Eastern District of Pennsylvania. The firm's hourly rates are as follows: Shareholders $530 Associates $395 - $445 Paralegals $130 The firm's services will be provided mainly by Aris Karalis, Esq., and Robert Seitzer, Esq., who will charge $530 per hour and $395 per hour, respectively. Mr. Karalis disclosed in court filings that his firm does not represent interests adverse to Debtors and their bankruptcy estates. The firm can be reached through: Aris J. Karalis, Esq. Karalis, P.C. 1900 Spruce Street Philadelphia, PA 19103 Telephone: (215) 546-4500 Facsimile: (215) 985-4175 Email: akaralis@karalislaw.com About National Medical National Medical Imaging, LLC and National Medical Imaging Holding Company, LLC provide medical and diagnostic laboratory services with principal place of business located at 1425 Brickell Ave., Apt. 57E, Miami. On June 12, 2020, National Medical Imaging and National Medical Imaging Holding Company filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Penn. Lead Case No. 20-12618). At the time of the filings, each Debtor disclosed assets of $10 million to $50 million and liabilities of the same range. Debtors have tapped Dilworth Paxson LLP as their bankruptcy counsel and Kaufman, Coren & Ress, P.C. and Karalis P.C. as their special counsel. Prior to Debtors' voluntary Chapter 11 filing, DVI Receivables Trusts and other creditors filed involuntary Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 05-12714 and 05-12719) against Debtors on March 3, 2005. In 2014, National Medical Imaging hit U.S. Bank N.A. and eight others with a $50 million lawsuit in Pennsylvania federal court alleging the bank ruined its business by forcing it into involuntary bankruptcy proceedings just as it was beginning to implement a turnaround plan. National Medical Imaging claims that the involuntary bankruptcy petitions ultimately destroyed its business even though the cases were ultimately tossed. NEW CITY WASTE: Taps Davidoff Hutcher as New Legal Counsel ---------------------------------------------------------- The New City Waste Services, Inc. and City Waste Services of New York, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Davidoff Hutcher & Citron, LLP as their new legal counsel. Davidoff Hutcher will substitute for Kirby Aisner & Curley, LLP, the firm that initially handled Debtors' Chapter 11 cases. The firm will be paid at hourly rates as follows: Attorneys $350 - $650 Paraprofessionals $195 - $325 Davidoff Hutcher received a $10,000 retainer from Debtors. Davidoff Hutcher is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Robert L. Rattet, Esq. Davidoff Hutcher & Citron, LLP 605 Third Avenue New York, New York 10158 Phone: (212) 557-7200/ (646) 428-3123 Email: rlr@dhclegal.com About The New City Waste Services Headquartered in Yorktown Heights, N.Y., The New City Waste Services, Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-22578) on March 20, 2012, with estimated assets of less than $50,000 and estimated liabilities of $1 million to $10 million. New City's affiliate City Waste Services of New York also filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.12-22579) on March 19, 2012. The petitions were signed by James T. Tesi, secretary and treasurer. Judge Robert D. Drain oversees the cases. The Debtors have tapped Davidoff Hutcher & Citron, LLP as their legal counsel. On March 12, 2020, the court confirmed Debtors' Chapter 11 plan of reorganization. NEW EMERALD: Allowed to Use Cash Collateral on Final Basis ---------------------------------------------------------- Judge Edward Morris of the U.S. Bankruptcy Court for the Northern District of Texas authorized New Emerald Energy LLC, subject to the protections and consideration described in the Final Order, to use cash collateral through the earlier of a Termination Event or the date of consummation of a Restructuring Transaction. The Debtor's use of cash collateral will be limited solely to the following: (a) payments to royalty owners from the proceeds of any sale of oil or gas received from the Debtor's oil and gas leases; (b) payment to Operator by the Debtor (or by recoupment by Operator) for Operator's billed expenses in the ordinary course of business, including all of the Debtor's key contracts but not including the approximately $359,975 in prepetition amounts due and owing to Operator for (i) the management fee owed for April 2020 pursuant to the Petro-Hunt Dakota MSA ($208,000) and (ii) the suspense amount arising from Emerald Oil, Inc. -- as the Debtor's predecessor in interest ($151,975.43); and (c) subject to the Court's final approval, payments to the Debtor's professionals consistent with the Professional Fee Budget. The Debtor is indebted to East West Bank and Dakota Midstream, LLC pursuant to certain prepetition agreements. As of the Petition Date, the Debtor is liable to these Lenders in the amount of $38,942,590. The Debtor admits that, as security for repayment of the Prepetition Indebtedness, the Collateral Agent, on behalf of the Lenders, holds valid, first-priority, perfected, and enforceable liens and security interests in all of the collateral described in the various Loan Documents, which include substantially all of the Debtor's assets, including, without limitation, its accounts, its leasehold and mineral interests, and all cash, cash equivalents, and other proceeds of such collateral. Certain of the Debtor's mineral assets are owned by the Debtor in a non-operating capacity, and are operated under operating agreement with the Debtor by Petro-Hunt Dakota, L.L.C. PetroHunt claims lien rights, recoupment rights under its agreements with the Debtor, and all such rights are reserved, with respect to any prepetition or post-petition claims, rights, indebtedness or performance owed Petro-Hunt. The Lenders and Petro-Hunt are eash granted valid, perfected liens and enforceable post-petition replacement security interests in all property of the Debtor, whether acquired before or after the Petition Date, excluding avoidance action claims. The replacement liens will be granted only to the same extent and validity of, and have the same priority as, the liens and security interests of the Lenders and Petro-Hunt that existed prior to the Petition Date. As further adequate protection, the Lenders and Petro-Hunt are also granted pursuant to section 507(b) a superpriority claim in such amount, if and to the extent the replacement liens are insufficient to provide adequate protection against the diminution, if any, in value of the Lenders' and Petro-Hunt's interest in any cash collateral, subject only to the Carve Out. 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, the Debtor was estimated to have assets of between $10 million and $50 million and liabilities of the same range. Judge Edward L. Morris oversees the case. Dykema Gossett, PLLC is Debtor's legal counsel. NEW ENTERPRISE: Moody's Rates $200MM Senior Unsecured Notes 'Caa1' ------------------------------------------------------------------ Moody's Investors Service assigned a Caa1 rating to New Enterprise Stone & Lime Co., Inc.'s proposed $200 million senior unsecured notes due 2028. All other ratings for the company remain unchanged. The outlook is stable. The proceeds from the new notes will be used to fund the cash tender offer of the company's 10.125% senior unsecured notes due 2022. The transaction will be leverage neutral while improving the company's debt maturity profile. Pro forma for the proposed offering, Moody's projects NESL's debt-to-EBITDA (inclusive of Moody's adjustments) will be 5.8x at fiscal year-end 2021 (February 2021). "With the proposed $200 million offering NESL will enhance its financial flexibility and will have no significant debt maturities until March 2026," said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Assignments: Issuer: New Enterprise Stone & Lime Co., Inc. Senior Unsecured Notes, Assigned Caa1 (LGD5) RATINGS RATIONALE New Enterprise Stone & Lime Co., Inc.'s B2 corporate family rating reflects the company's strong position as a dominant local supplier of construction materials and a contractor of heavy/highway construction in the Commonwealth of Pennsylvania and Western New York. In addition, the credit rating is supported by the company's good liquidity profile, solid operating margins, and free cash flow generation. At the same time, Moody's rating takes into consideration the company's small scale, vulnerability to cyclical end markets and its customer concentration. A significant portion of NESL's revenue is generated from PennDOT, the Pennsylvania Turnpike Commission and other agencies, which temporarily postponed or idled daily construction activity during April and May as a result of the Coronavirus outbreak, impacting the company's short-term profitability. The stable outlook reflects Moody's expectation that NESL will restore its sales and profitability after an unusual temporary decline in economic activity during its first fiscal quarter ended May 31, 2020. Moody's outlook also considers a return to stable end-market demand in public and private infrastructure. Moody's expects NESL to have a good liquidity profile over the next 12 to 18 months. At May 31, 2020, the company had approximately $12 million in cash and $56 million in undrawn availability under its ABL facility that expires in July 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if: - The company improves its profitability and lessens its reliance on the Commonwealth of Pennsylvania - Debt-to-EBITDA is below 4.5x for a sustained period of time - EBIT-to-Interest expense approaches 3.0x for a sustained period of time The ratings could be downgraded if: - The company's operating margins decline below 8% - Debt-to-EBITDA is above 5.5x for a sustained period of time - EBITA-to-Interest expense is below 1.5x for a sustained period of time - The company's liquidity deteriorates The principal methodology used in these ratings was Building Materials published in May 2019. New Enterprise Stone & Lime, Co., Inc. is a privately held, vertically-integrated construction materials supplier and heavy/highway construction contractor. The company operates two segments: construction materials and heavy/highway construction. NESL operates, owns or leases 57 quarries and sand deposits (45 active), 31 hot mix asphalt plants, 19 fixed and portable ready mixed concrete plants, three lime distribution centers and one construction supply center. NESL's operations are primarily concentrated in Pennsylvania and Western New York, with reach into the adjacent states including Maryland, West Virginia, and Virginia. For the 12 months ended February 29, 2020, the company generated $631 million in revenue and $139 million in adjusted EBITDA. NINE WEST: Trust Wants to Recover Over $1.5B from Past Workers -------------------------------------------------------------- Law360 reports that litigation trustee Marc S. Kirschner and Wilmington Savings Fund Society filed a civil suit against Nine West Holdings Inc. to recover over $1.5 billion from previous directors, officers and shareholders of the company's previous parent company after several transactions in 2014 that allegedly caused the bankruptcy of the retailer. In the complaint filed on June 5, 2020 in the New York federal court, the litigation trustee accused the former directors of The Jones Group Inc. of authorizing the 2014 transactions that split off valuable assets for too little payment. A copy of the full-report is available at https://www.law360.com/retail/articles/1280465/nine-west-ch-11-trust-seeks-1-5b-from-former-insiders About Nine West Holdings Inc. Nine West Holdings Inc. is a footwear, accessories, women's apparel, and jeanswear company with a portfolio of brands that includes Nine West, Anne Klein, and Gloria Vanderbilt. The company is a wholesale partner to major U.S. retailers and has international licensing arrangements covering more than 1,200 points of sale around the world. In April 2014, Sycamore Partners Management, L.P., acquired The Jones Group Inc. for $2.2 billion via leveraged buyout. As part of the transaction, The Jones Group merged with several affiliates, and the newly merged company was renamed as Nine West Holdings. On April 6, 2018, Nine West Holdings, Inc., and 10 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-10947) to right size their balance sheet, sell the Nine West Group's assets, and execute on their turnaround strategy to concentrate exclusively on their One Jeanswear Group, Kasper Group, The Jewelry Group, and Anne Klein businesses. In addition to the chapter 11 cases, Jones Canada, Inc., and Nine West Canada LP commenced foreign insolvency proceeding under the Bankruptcy and Insolvency Act in Canada. The Hon. Shelley C. Chapman is the U.S. case judge. The Debtors tapped Kirkland & Ellis LLP as counsel; Lazard Freres & Co. as investment banker; Alvarez & Marsal North America LLC as interim management and financial advisory services provider; Consensus Advisory Services LLC and Consensus Securities LLC as investment banker in connection with the sale of intellectual property associated with the Nine West and Bandolino brands; Deloitte Tax LLP as tax services provider; and BDO USA, LLP, as auditor and accountant. Munger, Tolles & Olson LLP is serving as the company's independent counsel, rendering services at the direction of independent directors Alan Miller and Harvey Tepner. Berkeley Research Group is serving as independent financial advisor, rendering professional services at the direction of the Independent Directors. Prime Clerk LLC is the claims and noticing agent. The Ad Hoc Group of Secured Term Loan Lenders tapped Davis Polk & Wardwell LLP as counsel; and Ducera Partners LLC as financial advisor. The Ad Hoc Crossover Group of Secured and Unsecured Term Loan Lenders tapped King & Spalding LLP as counsel and Guggenheim Securities, LLC, as financial advisor. Brigade Capital Management, LP, a party to the RSA tapped Kramer Levin Naftalis & Frankel LLP as counsel. The Official Committee of Unsecured Creditors tapped Akin Gump Strauss Hauer & Feld LLP as counsel; Houlihan Lokey Capital, Inc., as investment banker; and Protiviti Inc. as financial advisor and forensic accountant. Sycamore Partners Management, L.P., owner of 90.2% of the equity interests in the debtors, tapped Proskauer Rose LLP as counsel. Authentic Brands, which bought Nine West's IP assets, tapped DLA Piper Global Law Firm as counsel. NORTH TAMPA ANESTHESIA: Wants to Move Exclusivity Until July 20 --------------------------------------------------------------- North Tampa Anesthesia Consultants P.A. and HLPG Newaco LLC request the U.S. Bankruptcy Court for the Middle District of Florida for an extension through July 20, of the period within which to file their Chapter 11 Plan and obtain confirmation of the same. The COVID-19 shutdown of elective surgeries has caused much financial turmoil for the Debtors. Due to the uncertainties of how long the prohibition of elective surgeries would be mandated in this state, the Debtors could not accurately forecast their proposed plan payments until the restrictions were lifted. Then NTAC had to wait to see how it was doing by way of the weekly account receivables summaries provided by NTAC's collections agent, Change Healthcare. 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. NPC INTERNATIONAL: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: NPC International, Inc. 4200 W. 115th Street Suite 200 Leawood, Kansas 66211 Business Description: NPC International, Inc., together with its direct and indirect subsidiaries and affiliates, is a franchisee company with over 1,600 franchised restaurants across two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states and the District of Columbia. Visit https://www.npcinternational.com for more information. Chapter 11 Petition Date: July 1, 2020 Court: United States Bankruptcy Court Southern District of Texas Eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- NPC International, Inc. (Lead Debtor) 20-33353 NPC Restaurant Holdings I LLC 20-33354 NPC Restaurant Holdings II LLC 20-33355 NPC Holdings, Inc. 20-33356 NPC International Holdings, LLC 20-33357 NPC Restaurant Holdings, LLC 20-33358 NPC Operating Company B, Inc. 20-33359 NPC Quality Burgers, Inc. 20-33360 Judge: Hon. David R. Jones Debtors' Counsel: Alfredo R. Perez, Esq. WEIL, GOTSHAL & MANGES LLP 700 Louisiana Street, Suite 1700 Houston, Texas 77002 Tel: (713) 546-5000 Fax: (713) 224-9511 Email: Alfredo.Perez@weil.com - and - Ray C. Schrock, P.C. Kevin Bostel, Esq. Natasha Hwangpo, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: Ray.Schrock@weil.com Kevin.Bostel@weil.com Natasha.Hwangpo@weil.com Debtors' Financial Advisor: ALIXPARTNERS, LLP 909 Third Avenue, 30th Floor New York, NY 10022 Debtors' Investment Banker: GREENHILL & CO., LLC 300 Park Avenue New York, NY 10022 Debtors' Claims, Noticing & Solicitation Agent and Administrative Advisor: EPIQ CORPORATE RESTRUCTURING, LLC 777 Third Avenue, 12th Floor New York, New York 10017 https://dm.epiq11.com/case/nrh/info Estimated Assets (on a consolidated basis): $1 billion to $10 billion Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petitions were signed by Eric Koza, chief restructuring officer. A full-text copy of NPC International's petition is available for free at PacerMonitor.com at: https://is.gd/kZk7Sx List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Pizza Hut Inc. Trade $17,681,748 7100 Corporate Dr. Plano, TX 75024 Attn: Kristin Mays Tel: 502-874-8300 Email: Kristin.Mays@yum.com 2. The Wendys Company Trade $8,977,106 1 Dave Thomas Blvd. Dublin, OH 43017 Attn: Erica Neal Tel: 614-764-3100 Fax: 614-764-3330 Email: erica.neal@wendys.com 3. Sygma Missouri Trade $7,403,178 PO Box 28523 Columbus, OH 43228 Attn: Laquada Johnson Tel: 877-441-1144 Fax: 614-734-2555 Email: LJohnson@SYGMAnetwork.com 4. I.P.H.F.H.A. Inc. Trade $3,801,353 7829 E. Rockhill St. Wichita, KS 67206 Attn: Kathy Alford Tel: 316-685-1208 Email: kalford@iphfha.com 5. McLane Trade $1,456,461 2085 Midway Rd. Carrollton, TX 75006 Attn: Kimberly Mrozinski Tel: 972-364-2112 Fax: 972-364-2093 Email: Kimberly.Mrozinski@McLaneFS.com 6. Sysco USA I Inc. Trade $1,086,349 PO Box 27633 Salt Lake City, UT 84127 Attn: Leslee Donio Tel: 801-972-5484 Fax: 801-563-6941 Email: Donio.leslee@int.sysco.com 7. PH Digico LLC Trade $864,841 7829 E. Rockhill Suite 201 Wichita, KS 67206 Attn: Debbie Jonas Tel: 316-685-1208 Email: djonas@ipfha.com 8. Jessica Padgett Litigation $654,197 (c/o Brett T. Burmeister) 1407 E. 42nd St. Independence, MO 64055 Tel: 816-373-5590 Fax: 816-373-2112 Email: brett@BGattorney.com 9. WHGRE LLC Trade $401,386 3211 Shannon Rd Suite 225 Durham, NC 27707 Attn: Nikki Marion Tel: 212-607-0546 Email: Nikki.marion@eldridge.com 10. R&W Pizza Hut's of NC Trade $324,036 PO Box 12100 Des Moines, IA 50312 Attn: Rusty Goode Tel: 407-876-7367 Email: rgoodecpa@gmail.com 11. Valenti Mid Atlantic Trade $310,405 Realty II PO Box 8618 Lancaster, PA 17604 Attn: Steve Nesbitt Tel: 717-560-3091 Email: steve@restmgt.com 12. Dominion Virginia Power Trade $253,102 PO Box 26543 Richmond, VA 23290 Attn: Thomas F. Farrell, II Tel: 888-667-3000 Fax: 804-819-2205 13. Tiffany Smith Litigation $202,638 (c/o Mark L. Rosenberg Esq.) 554 Lomax St Jacksonville, FL 32204 Attn: Mark Rosenberg Tel: 904-354-4680 Fax: 904-725-3783 14. American Realty Capital Trade $193,725 2325 East Camelback Road Suite 1100 Phoenix, AZ 85016 Attn: Debbie Hester Tel: 215-449-3687 15. Duke Energy Process Trade $176,129 PO Box 1003 Charlotte, NC 28201 Attn: Lynn Good Tel: 866-582-6345 Fax: 800-419-5473 Email: CCSTRALBuildersFaxes@duke- energy.com 16. Joanne Henshaw Litigation $168,750 (c/o James J. Amato, Esq.) No. 1 Mahantongo St. Pottsville PA 17901 Attn: James J. Amato, Esq. Tel: 570-622-2455 Fax: 570-622-5330 Email: jamato@feplawyers.com 17. Evergy Trade $149,827 PO Box 219330 Kansas City, MO 64121 Attn: Mark A. Ruelle Tel: 816-221-2323 Fax: 816-654-1479 18. Duke Energy Trade $149,636 PO Box 70516 Charlotte, NC 28272 Attn: Lynn Good Tel: 800-653-5307 Fax: 800-351-3853 Email: SEServiceInstallation@duke-energy.com 19. Alabama Power Company Trade $139,019 PO Box 242 Birmingham, AL 35292 Attn: Mark A. Crosswhite Tel: 888-430-5787 Email: support@alabamapower.com 20. Staples Business Advantage Trade $117,038 PO Box 660409 Dallas, TX 75266 Attn: Legal Services Tel: 888-753-4103 Email: support@staplesadvantage.com 21. Bottling Group LLC Trade $106,433 75 Remittance Dr. Chicago, IL 60675 Attn: Ashley Myers Tel: 800-789-2626 Fax: 847-843-6516 Email: ashley.myers.contractor@pepsico.com 22. BGE Trade $97,742 PO Box 13070 Philadelphia, PA 19101 Attn: Legal Notices Tel: 800-685-0123 Fax: 443-213-6017 23. Pizza Hut of America Inc. Trade $94,254 PO Box 955641 Saint Louis, MO 63195 Attn: Jay Alexander Tel: 972-338-7700 Email: jay.alexander@pizzahut.com 24. Johnson Diversey Inc. Trade $88,678 450 Ferguson Dr. Mountain View, CA 94043 Attn: Michael Macedo Tel: 501-835-4332 Fax: 262-631-4332 Email: mmacedo@autochlor.com 25. Liquid Environmental Solutions Trade $84,578 PO Box 733372 Dallas, TX 75373 Attn: Legal Notices Tel: 469-461-6065 Fax: 469-461-6065 Email: customer.request@liquidenviro.com 26. MBH Enterprises LLC Trade $82,681 12220 Chattanogga Plaza #289 Midlothian, VA 23112 Attn: Brandy Chormann Tel: 888-655-3678 27. Publix Super Market Inc. Trade $79,684 PO Box 32010 Lakeland, FL 33802 Attn: Allison Davis Tel: 863-688-7407 Email: allison.davis@publix.com 28. Restaurant Supply Chain Trade $78,527 Solutions PO Box 638655 Cincinnati, OH 45263 Attn: Rick Miles Tel: 800-444-4144 Fax: 502-721-5250 Email: rick.miles@rscs.com 29. Tornig Realty LLC Trade $76,639 720 East Palisade Avenue Suite 103 Englewood Cliffs, NJ 07632 Attn: Moses Kazanjian Tel: 201-408-5227 Email: mkazanjian@everestrealtyco.com 30. Georgia Air and Trade $76,267 Refrigeration Inc. 50 Grayson Industrial Parkway Grayson, GA 30017 Attn: Legal Notices Tel: (678) 707-3525 Email: service@gahvacr.com PARK TRANSPORTATION: Cash Collateral Use Continued Until July 17 ---------------------------------------------------------------- Judge Lashonda Hunt of the U.S. Bankruptcy Court for the Northern District of Illinois authorized Park Transportation, Inc. to continue to use cash collateral solely to pay expenses actually incurred in its usual business operations up to $248,029 as set forth on the budget for the period covering June 17 through July 17, 2020. A continued hearing on the use of cash collateral will be held on July 9, 2020 at 11:00 a.m. (CT) By virtue of the Prepetition Loan Documents, Royal Savings Bank asserts that it holds a perfected lien against substantially all of the prepetition assets of the Debtor. Royal Savings Bank is granted a replacement, automatically perfected security interest and lien, in an amount equal to the cash collateral used by the Debtor, in all of the Debtor's real and personal property. Said replacement liens will have the same validity, enforceability and priority as the pre-petition liens and security interests of the Bank. In addition, the Debtor will permit Royal Savings Bank, or its agents or employees, upon request at any time during normal business hours upon three business days' prior written notice: (a) To inspect, audit, or otherwise examine the books and records of Debtor and to make copies thereof or extracts therefrom; and (b) To permit Royal Savings Bank access to the Debtor's premises to appraise the equipment, the real estate and to audit the inventory. About Park Transportation Park Transportation, Inc. is a privately held company in the general freight trucking industry. Park Transportation, Inc., based in Bensenville, IL, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 20-12058) on June 7, 2020. In its petition, the Debtor disclosed $4,736,675 in assets and $2,382,041 in liabilities. The petition was signed by Eric Seongwoo Seo, president. The Hon. Lashonda A. Hunt oversees the case. Abraham Brustein, Esq., at DiMonte & Lizak, LLC, serves as bankruptcy counsel. PG&E CORPORATION: Gets Approval of License Agreement With McKinsey ------------------------------------------------------------------ PG&E Corporation and Pacific Gas and Electric Company obtained an order from the U.S. Bankruptcy Court for the Northern District of California approving a new license agreement with McKinsey & Company Inc. United States. The agreement will allow Debtors to continue to use one of McKinsey's proprietary program management tools. Debtors will also receive support services from the firm to assist them in utilizing the software. The agreement requires Debtors to make a one-time payment of $156,000 for a one-year extension of McKinsey's software. McKinsey can be reached through: Dmitry Krivin McKinsey & Company Inc. United States 3 World Trade Center 175 Greenwich Street New York, NY 10007 Telephone: (212) 446-7000 About PG&E Corporation PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, as special regulatory counsel. Munger Tolles & Olson LLP, as special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. POET TECHNOLOGIES: Sign LOI to Form $50 Million Joint Venture ------------------------------------------------------------- POET Technologies Inc. has signed a Letter of Intent to establish a joint venture with Xiamen Sanan Integrated Circuit Co. Ltd. to manufacture cost-effective, high-performance optical engines based on POET's proprietary CMOS compatible Optical Interposer platform technology. The proposed joint venture will be formed with contributions of US$50 million based on a combined commitment of cash and intellectual property from Sanan IC and intellectual property and know-how from POET. Sanan IC is a world-class wafer foundry service company with an advanced compound semiconductor technology platform, serving the optical, RF microelectronics and power electronics markets. Sanan IC is a wholly owned subsidiary of Sanan Optoelectronics Co., Ltd. (Shanghai Stock Exchange, SSE: 600703), the leading manufacturer of advanced ultra-high brightness LED epitaxial wafers and chips in the world. The JV is expected to design, develop, manufacture and sell 100G, 200G and 400G optical engines with customized lasers and photodiodes from Sanan IC combined with optical interposer platform technology from POET. Based on know-how from both companies, such optical engines are engineered for high yield and large-scale to meet the burgeoning market for high-speed data communications applications, including internet data centers and 5G carrier networks. The proposed joint venture will offer a new generation of cost-effective, high-performance optical engines based on POET's Optical Interposer to module manufacturers, systems suppliers, data center operators and network providers globally. "Combining the advanced wafer foundry manufacturing platform capabilities of Sanan IC with the true wafer-scale and hybrid integration approach of the POET Optical Interposer platform, we will be able to offer transceiver manufacturers the ability to span several generations of devices and unlimited scale for high-volume applications at a highly economical price," said Dr. Suresh Venkatesan, chairman and chief executive officer of POET Technologies, Inc. "Sanan IC is the world's preeminent manufacturer of compound semiconductors, and we are excited to partner with them in delivering our next generation solutions." "This joint venture has the potential to have a breakthrough on technological innovation as well as product competitiveness," said Raymond Cai, chief executive officer of Sanan IC. "We will employ Sanan IC's flexibility and experience in customized lasers and photo diodes with our advanced foundry manufacturing platform capability and extensive capacity with POET's Optical Interposer platform to enable our joint venture company to offer the market the highest performance optical engines at a competitive price. As a premiere foundry service provider for compound semiconductor wafers, we are pleased to partner with POET on a joint venture to deploy these technologies." The global market for optical transceivers is estimated to be US$5.7 billion in 2020 and projected to reach a value of US$9.2 billion by 2025, representing a CAGR of 10.0%, according to MarketsandMarkets Research Private Ltd. The non-binding Letter of Intent outlines the basic terms and conditions related to the business model and contributions of each of the Parties, and is subject to execution of definitive agreements. About POET Technologies POET Technologies -- http://www.poet-technologies.com/-- is a design and development company offering integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques and packaging methods. POET's Optical Interposer eliminates costly components and labor-intensive assembly, alignment, burn-in and testing methods employed in conventional photonics. The cost-efficient integration scheme and scalability of the POET Optical Interposer brings value to any device or system that integrates electronics and photonics, including some of the highest growth areas of computing, such as Artificial Intelligence (AI), the Internet of Things (IoT), autonomous vehicles and high-speed networking for cloud service providers and data centers. POET is headquartered in Toronto, with operations Allentown, PA and Singapore. POET Technologies reported a net loss of US$5.95 million for the year ended Dec. 31, 2019, compared to a net loss of US$16.32 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had US$21.21 million in total assets, US$4.36 million in total liabilities, and US$16.85 million in shareholders' equity. POWER SOLUTIONS: Incurs $712K Net Loss in First Quarter ------------------------------------------------------- Power Solutions International, Inc., reported a net loss of $712,000 for the three months ended March 31, 2020, compared to a net loss of $2.58 million for the three months ended March 31, 2019. Sales for the first quarter of 2020 were $105.1 million, a decrease of $10.7 million, or 9%, versus the comparable period last year, as a result of sales declines of $13.4 million and $1.7 million in the industrial and transportation end markets, respectively, partly offset by a $4.4 million increase in the energy end market. Lower industrial end market sales were primarily attributable to reduced demand for products used in the material handling/forklift and arbor care markets. Reduced transportation end market sales are primarily due to lower shipments in the medium duty truck market, which was mostly attributable to the previously disclosed customer-requested acceleration of the delivery of certain engines during the fourth quarter of 2019 that were originally scheduled for the first half of 2020. This negatively impacted sales in the first quarter of 2020, but was partly offset by stronger demand for products used in the school bus market. Higher energy end market sales were primarily driven by increased demand for the Company's power generation products, including demand response products, partly offset by lower demand for products used within the oil and gas industry. Gross profit was virtually unchanged in the first quarter of 2020 as compared to the same period last year notwithstanding lower sales volume. Gross margin in the first quarter of 2020 was 16.9%, an improvement of 1.6 percentage points versus the same period last year, primarily due to improved product mix and strategic pricing actions, partly offset by reduced operating leverage due to lower sales and higher warranty expense. Operating expenses decreased by $1.9 million, or 8%, versus the comparable period in 2019, in part attributable to lower selling, general and administrative expenses (SG&A), due to lower financial reporting expenses given the completion of the restatement of the Company's financial statements in May 2019, among other factors. In the first quarter of 2019, the Company reported a $4.4 million gain from the change in fair value of the Weichai Warrant. The Weichai Warrant was exercised in April 2019 and, as a result, had no impact on the comparable 2020 period. Interest expense declined by $0.8 million for the three months ended March 31, 2020, versus the comparable period in 2019 due in part to lower outstanding debt levels and a lower interest rate related to the $55.0 million Unsecured Senior Notes for the three months ended March 31, 2020. Also, the Company recorded an income tax benefit of $4.0 million in the first quarter of 2020 versus a $0.6 million benefit last year. The increase in the tax benefit for the three months ended March 31, 2020 is primarily attributable to the impact of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) enacted during the quarter, which allows the Company to elect bonus depreciation for the 2018 and 2019 tax years, carryback net operating losses to earlier years, and immediately refund AMT credits as well as a change in the deferred tax liability related to an indefinite-lived intangible asset. As of March 31, 2020, the Company had $290.03 million in total assets, $262.09 million in total liabilities, and $27.94 million in total stockholders' equity. Outlook for Full Year of 2020 Projected sales and profitability for the full year of 2020 are currently expected to be substantially lower than 2019 levels in large part due to the impact of the novel coronavirus COVID-19 pandemic, which has resulted in the implementation of significant governmental measures to control the spread of the virus, including quarantines, travel restrictions, business shutdowns and restrictions on the movement of people in the United States and abroad, and the related recent historic decline in oil demand. Further, the previously disclosed customer requested fourth quarter 2019 acceleration of approximately $30 million of transportation end market sales, and industrial end market headwinds are also anticipated to negatively impact the Company's 2020 financial results. The Company has initiated certain actions as a result of the expected significant negative impacts of these factors. To date in 2020, the Company's production facility workforce has been reduced to more closely align with current volume trends. Additionally, the Company implemented various temporary cost reduction measures, including reduced pay for salaried employees, suspension of the 401(k) match program, and deferred spending on certain R&D programs, among others. The measures with regard to pay for employees and the Company's 401(k) match program are now anticipated to run through Sept. 30, 2020, at which time the Company will assess market conditions. The Company continues to review operating expenses as part of the contingency planning process. The Company currently expects lower SG&A expenses reflective of a further decline in financial reporting costs and the impact of cost savings actions. Partly offsetting these factors are expectations for the continued incurrence of significant legal fees primarily in connection with the Company's indemnification obligations, in addition to expenses for its internal control remediation efforts. Cash Flow and Debt Operating cash flow for the first quarter of 2020 was $24.3 million due mostly to favorable changes in working capital. The Company's total debt obligations were approximately $73 million at March 31, 2020, a decrease of approximately $22 million as compared with total debt at Dec. 31, 2019. Debt levels at March 31, 2020 and Dec. 31, 2019 include the net impact of customer prepayments of approximately $12 million and $6 million, respectively. As previously disclosed, on April 2, 2020, the Company closed on a new senior secured revolving credit facility pursuant to a credit agreement with Standard Chartered Bank, which allows the Company to borrow up to $130 million. As of May 31, 2020, the Company had borrowings of $130 million under the Credit Agreement and cash and cash equivalents of approximately $36 million. This amount reflects a net positive cash impact from customer prepayments of approximately $12 million. Management Comments John Miller, chief executive officer, commented, "We are pleased with the improvement in gross margin and the reduction in financial reporting expenses, which partly aided in mitigating the impact of lower sales on our financial results during the quarter." "Although our near-term financial results are anticipated to include the negative impact from the COVID-19 pandemic, we believe that the continued execution of our disciplined strategy positions us well to deliver long-term shareholder value. As the year progresses, we will continue to closely monitor market conditions and will review operating expenses with a focus on preserving our strong liquidity position." A full-text copy of the Quarterly Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/t7h8My About Power Solutions Headquartered in Wood Dale, Illinois, Power Solutions International, Inc. -- http://www.psiengines.com/-- designs, engineers, and manufactures emissions-certified, alternative-fuel power systems. PSI provides integrated turnkey solutions to global original equipment manufacturers in the industrial and on-road markets. The Company's unique in-house design, prototyping, engineering and testing capacities allow PSI to customize clean, high-performance engines that run on a wide variety of fuels, including natural gas, propane, biogas, gasoline and diesel. As of Dec. 31, 2019, the Company had $313.7 million in total assets, $285.7 million in total liabilities, and $28.50 million in total stockholders' equity. BDO USA, LLP, in Chicago, Illinois, the Company's auditor since 2018, issued a "going concern" qualification in its report dated May 4, 2020 citing that significant uncertainties exist about the Company's ability to refinance, extend, or repay outstanding indebtedness and maintain sufficient liquidity to fund its business activities. These factors raise substantial doubt about the Company's ability to continue as a going concern. PPV INC: Wants to Move Exclusive Plan Filing Period to August 7 --------------------------------------------------------------- PPV, Inc. and Bravo Environmental NW, Inc. asked the U.S. Bankruptcy Court for the District of Oregon to extend the periods during which only the companies can file and solicit acceptances for their Chapter 11 plan to August 7 and October 6, respectively. Due to COVID-19, the companies' discussions with potential lenders or buyers have been delayed or postponed in light of the state of the financial economy. Nonetheless, the companies have been approached with a framework for a possible sale transaction that will facilitate a confirmable plan of reorganization. In addition, the companies have been in discussions with key creditors about the status of such sale negotiations and the possible treatment of creditors' claims in a plan of reorganization. However, much of this work and analysis will depend on the terms of the sale transaction which will only be clear after the expiration of the June 8 exclusivity period. In addition, just recently, the Thuney family, including the president (Joseph Thuney) and CEO (James Thuney) of the Debtors) was struck by an unimaginable tragedy when Joseph's daughter and James' granddaughter, Brittany Thuney, was murdered. Up until the time of Brittany's death, Joseph and James had both been actively working with counsel towards formation of a plan and disclosure statement. The companies also proposed to extend the deadline to assume or reject all unexpired leases of nonresidential real property through and including August 7. About PPV, Inc. PPV, Inc. -- https://www.ppvnw.com/ -- is a waste management services provider in Portland, Oregon. The company offers industrial cleaning, recycling, treatment, and technical waste management services. PPV, Inc. filed a petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Lead Case No. 19-34517) on Dec 10, 2019. In the petition signed by Joseph J. Thuney, president, the Debtor was estimated to have between $1 million and $10 million in both assets and liabilities. Judge Trish M. Brown oversees the case. Douglas R. Ricks, Esq. at Vanden Bos & Chapman, LLP, is the Debtor's counsel. PRESTIGE HEATING: Plan Confirmation Hearing Continued to July 14 ---------------------------------------------------------------- The hearing to consider the confirmation of the Prestige Heating And Air Conditioning, LLC's Chapter 11 Plan and Final Approval of the Debtor's Disclosure Statement filed on March 23, 2020 will be continued to the 14th of July 2020, at 3:00 p.m., before the Honorable Eduardo V. Rodriguez in courtroom 402, 515 Rusk, Houston, Texas, 77002. The deadline for which the Debtor must confirm its Plan is extended to the 7th of July 2020. All objections to confirmation of the Plan or final approval of the Disclosure Statement and written acceptances or rejections of the plan must be filed and served no later than 5:00 p.m. on the 7th of July 2020. About Prestige Heating Prestige Heating and Air Conditioning, LLC, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 19-3529) on Sept. 23, 2019. The Debtor is represented by Susan Tran Adams, Esq., of CORRAL TRAN SINGH LLP. PUERTO RICO HOSPITAL: Court Says J&J Proceeds Not Bank Collateral ----------------------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte granted the Defendants' motion to dismiss the case captioned BANCO SANTANDER PUERTO RICO Plaintiff, v. PUERTO RICO HOSPITAL SUPPLY, INC. AND CUSTOMED, INC. Defendants, ADV. PROC. No. 19-00448 (ESL) (Bankr. D.P.R.). Santander filed the action seeking declaratory relief to determine the extent of its lien over property of the Defendants, specifically, the proceeds obtained by the Debtors/Defendants in an arbitration proceeding concerning the distribution rights against Johnson and Johnson International, Inc. and Etichon, Inc. in an award confirmed by the U.S. District Court for the District of Puerto Rico in case number 17-01405, as well as any proceeds in another pending case, case number 17-02281. Santander alleges that the relevant facts are uncontested as the same have been stipulated in the Cash Collateral Stipulation. Santander contends that a decision on this matter is critical as the proposed Chapter 11 plan does not provide for payment of the funds to Santander. On April 28, 2017, the Debtors entered into a Credit Agreement with Banco Santander Puerto Rico and FirstBank Puerto Rico, pursuant to which the Lenders provided a certain credit facility to the Borrowers in the amount of $32,000,000. As part of the Collateral Documents, Borrowers executed a (i) Security Agreement; (ii) Pledge and Assignment of Account; (iii) Mortgage Notes Pledge and Security Agreement; and (iv) UCC-1 Financing Statements; among others, as listed in the Credit Agreement. To secure their obligations under the Credit Agreement, the Debtors granted the Lenders, through the Security Agreement, a first priority security interest over, among other assets of the Debtors, their inventories, accounts receivable, general intangibles, such as contract rights, and any proceeds thereof. The Lenders properly perfected their security interests over the Collateral granted by the Debtors under the Security Agreement by filing the corresponding UCC-1 Financing Statements. On March 28, 2017, J&J filed a Complaint against the Debtors claiming that the latter failed to pay over $4.244 million in past due product purchases, in violation of its essential payment obligations, and requested a declaration from the Court to the effects that it had just cause to terminate its commercial relationships with the Debtors. The Debtors moved to compel arbitration based on a clause in certain Non-Exclusive Distribution Agreement which provides for the arbitration of claims before the American Arbitration Association. On July 10, 2017, the Court entered an order compelling arbitration. On May 2, 2019, the Panel issued an award in favor of the Debtors and against J&J in the amount of $1,184,598.19. On Sept. 30, 2019, the Court confirmed the J&J Award. On Nov. 6, 2017, the Debtors filed a separate complaint against J&J for violations to Puerto Rico Law 75 over J&J's termination without just cause of an exclusive distribution agreement they maintained since 1990. The Debtors asserted, among other damages suffered, lost benefits, loss of profits, loss of goodwill, the value of unsold inventory, and the value of capital investments to the extent those cannot be used for another business activity, which damages are estimated to exceed $10 million, exclusive of interests, costs, attorney's fees, and expert witness fees. On April 10, 2019, the Court stayed the Second Case due to the Debtors' bankruptcy filings. The Debtors/Defendants have moved for the dismissal of the complaint on the ground that the same fails to state a claim upon which relief may be granted. The Defendants do not question the factual allegations in the complaint but disagree with the legal inferences drawn by plaintiff from the same. The Defendants' first argument is that claims for relief are tortious in nature because a principal's termination without just cause of the relationship is a tortious act under Puerto Rico Law 75. The statute provides in section 278b that "if no just cause exists for the termination of the dealer's contract for detriment to the established relationship, or for refusal to renew the same, the principal shall have executed a tortious act against the dealer." The Defendants point to decisions supporting said characterization. The Defendants contend that Santander may not discard the tortious nature of Law 75 claims as the same are clearly stated in the Law 75 statute. The public interest of Law 75 is remedial in nature and must be liberally interpreted. The strong public policy is directed to "leveling the contractual conditions between two groups financially unequal in their strength." The Defendants also argue that a lien cannot be acquired over commercial tort claims as after-acquired property. "A security interest does not attach under a term constituting an after-acquired property clause to . . . (2) a commercial tort claim." Section 9-204 of the Commercial Transactions Act. "Furthermore, an after-acquired property clause in a security agreement cannot create a security interest in a commercial tort claim. The claim must already exist when the parties enter into the security agreement." In response, Plaintiff noted that the allegations in the complaint are that the Debtors' claims against J&J arise from the distribution agreements purportedly terminated without just cause. The Complaint alleges that the contracts with J&J are undeniably part of the Lenders' collateral and that the proceeds thereof, which include the eventual payment of the award or judgments against J&J, are also part of BSPR's collateral. Santander concludes that the Complaint has sufficient well-pleaded facts to survive a motion to dismiss under the Rule 12(b)(6) standard. Santander alleges that the "claims against J&J arise under the contracts encumbered by Lenders' lien, and, therefore, any right to eventual payment pursuant to awards or judgments arising therefrom are also part of the Lenders' collateral as proceeds. In other words, pursuant to the allegations in the Complaint the payments to be received by Debtors for those awards or judgments are, at bottom, proceeds of the Lenders' collateral covered by their duly perfected security interest." According to the Bankruptcy Court, Section 278b of Law 75 creates and provides for the execution of a tortious act when the principal terminates the dealer's relationship without just cause. The damages award in question constitute a commercial tort claim within the definition of commercial tort action in section 2112(13) of the PR UCC due to the tortious nature of an action under Law 75. Commercial tort claims are not clearly identified and described with specificity in the Security Agreement provisions regarding the Collateral given by the Defendants to the Lenders. Section 2218 of the PR UCC provides that "[e]xcept as otherwise provided in subsections (c), (d), and (e) of this section, a description of personal property is sufficient, whether or not it is specific, if it reasonably identifies what is described." Subsection (e) provides that a description by type of collateral is an insufficient description when it concerns a commercial tort claim. The description in the Security Agreement is insufficient as it does not mention commercial tort claims. In re American Cartage held that a security agreement that does not specifically mention any commercial tort claims does not encompass the commercial tort claims that are at issue. In this case there is no specific reference in the Collateral to commercial tort claims and none existed at the time the Security Agreement was signed. Since the commercial tort claims in the case before the court were not specified and identified in the Security Agreement, the damage award is not related to the Collateral. According to the Court, the collateral in the Puerto Rico Hospital Supply case is more comprehensive and broader than the one described in In re American Cartage. However, neither specifically included and described a commercial tort action. In order for the secured creditor to have a right to the recovery, as opposed to the claim, the party must have a right to the recovery. The right to recovery of a commercial tort claim under the PR UCC requires that the same be clearly identified and described in the security agreement. It was not so in this case. Therefore, the Bankruptcy Court concludes that the commercial tort claim was not included in the Security Agreement as part of the Collateral and, thus, Santander does not have a right to the recovery of the funds resulting from the Johnson litigation. In view of the foregoing, the Court finds and concludes that the funds resulting from the J&J litigation are a commercial tort claim and that the same was not clearly identified and described in the Security Agreement. Therefore, the same are not Collateral. This legal conclusion leads the court to determine that Santander's lien over the funds obtained by the Debtors under tort actions pursuant to Law 75, the Puerto Rico Dealer's Contracts Act, 10 L.P.R.A. sections 278a - 278e are not proceeds to which the lien attaches. Thus, Santander's action does not plausibly give rise to an entitlement to the relief requested based on the factual allegations in the Complaint. Consequently, the Court grants Defendants' motion to dismiss. A copy of the Court's Opinion and Order dated April 3, 2020 is available at https://bit.ly/2Zx1Xun from Leagle.com. About Puerto Rico Hospital Supply Puerto Rico Hospital Supply, Inc., distributes medical supplies in Puerto Rico. Customed Inc., founded in 1991, manufactures surgical appliances and supplies. Puerto Rico Hospital Supply, Inc. and Customed, Inc., filed voluntary Chapter 11 petitions (Bankr. D.P.R. Case Nos. 19-01022 and 19-01023) on Feb. 26, 2019. The petitions were signed by Felix B. Santos, president. The cases are assigned to Judge Enrique S. Lamoutte Inclan. At the time of the filing, Puerto Rico Hospital estimated $50 million to $100 million in assets and $10 million to $100 million in liabilities while Customed, Inc. estimated $10 million to $50 million in both assets and liabilities. Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, represents the Debtors. QUALITY REIMBURSEMENT: Wants to Maintain Exclusivity Until Sept. 25 ------------------------------------------------------------------- Quality Reimbursement Services, Inc. asks the U.S. Bankruptcy Court for the Central District of California to extend, through and including Sept. 25, the period within which the Debtor has the exclusive right to solicit acceptances to a Chapter 11 plan of reorganization. The Debtor has already filed a plan that pays creditors in full. The Debtor requested the extension to ensure that third parties are not able to derail the confirmation process. Currently, the Debtor has been actively engaged in negotiations with GE and the Committee to resolve their issues, and simultaneously has been taking actions to ensure its ability to perform under the proposed settlement offers. The Debtor believes that the parties are very close to a settlement. If a settlement is reached, the Debtor will need some additional time to incorporate the terms of the settlement into an amended plan and disclosure statement. Most recently, the parties have stipulated to multiple continuances of the plan confirmation process based on their desire to consensually resolve disputes and their recognition of the progress made therewith. About Quality Reimbursement Services Quality Reimbursement Services, Inc. -- http://www.qualityreimbursement.com/-- has been reviewing Medicare and Medicaid cost reports for more than 12 years. Its corporate office is located in Arcadia (CA). The company also has offices located in Birmingham, Ala.; Scottsdale, Ariz.; Los Angeles, Calif.; Colorado Springs, Colo.; Jacksonville, Fla.; Chicago, Ill.; Detroit and Shelby Township, Mich.; Guttenberg, N.J.; Dallas/Fort Worth, Texas; and Spokane, Wash. Quality Reimbursement Services filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-20918) on Sept. 13, 2019. In the petition signed by James C. Ravindran, president and CEO, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Julia W. Brand oversees the case. Garrick A. Hollander, Esq., at Winthrop Couchot Golubow Hollander, LLP, represents the Debtor. The Office of the U.S. Trustee appointed a committee of unsecured creditors in the Debtor's case on Oct. 22, 2019. The committee retained Buchalter, a Professional Corporation, as its legal counsel. QUEST GROUP: Association Objects to Plan Disclosures ---------------------------------------------------- Venetian Isles Master Association, Inc., objects to the Quest Group Holding, LLC's Disclosure Statement. The Association objects to the Disclosure Statement because it fails to provide adequate information necessary for interested parties to make an informed decision on the adequacy of the disclosure or the acceptance or rejection of the Plan. The Association points out that the Disclosure Statement fails to adequately describe the income generated from the rental of the properties or otherwise how the Debtor will service the debt on the properties. Association asserts that the Disclosure Statement is silent as to the principals' financial wherewithal to make this payment or otherwise how the Debtor will make the Plan payments. Association complains that the Disclosure Statement and Plan are wholly deficient with regard to the status of the Association and its secured claim. According to Association, the Disclosure Statement is deficient and inadequate for an informed creditor to consider the Debtor’s intentions with its Plan and should therefore not be approved. Attorneys for the Association: Siegfried Rivera 201 Alhambra Circle, 11TH Floor Coral Gables, FL 33134 Tel No.: 305-442-3334 Fax No. 305-443-3292 E-mail: jberlowitz@siegfriedrivera.com About Quest Group Holding Quest Group Holding, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-21776) on Sept. 25, 2018. In the petition signed by Eddrian Burciaga, owner, the Debtor was estimated to have assets of less than $1 million and liabilities of $1 million to $10 million. Judge Jay A. Cristol oversees the case. The Debtor tapped Marrero, Chamizo, Marcer, Law, LP, as its legal counsel. QUEST GROUP: US Trustee Objects to Disclosure Statement ------------------------------------------------------- The United States Trustee for Region 21 submitted an objection to the Disclosure Statement and Plan of Reorganization proposed by Quest Group Holdings LLC. The U.S. Trustee points out that the Debtor does not attach any projections to the Disclosure Statement nor does it provide an explanation of the income produced by the subject properties and what if any principal contributions will be made to support the proposed plan. The U.S. Trustee asserts that the Debtor does not disclose the source of the "new money" needed monthly to fund the Plan. The U.S. Trustee complains that the Disclosure Statement and Plan propose to pay Class 2 a pro rata distribution of 5 percent without providing an estimated sum of what this percentage will be. According to the U.S. Trustee, the Debtor provides no explanation as to why the separate classifications are appropriate or why the disparate treatment should be allowed. The U.S. Trustee points out that the Disclosure Statement lacks sufficient information to support the proposed Plan as described above. The U.S. Trustee further points out that the proposal before the Court fails to provide information needed for creditors and voting parties to assess the fairness of the proposed distribution. About Quest Group Holding Quest Group Holding, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-21776) on Sept. 25, 2018. In the petition signed by Eddrian Burciaga, owner, the Debtor was estimated to have assets of less than $1 million and liabilities of $1 million to $10 million. Judge Jay A. Cristol oversees the case. The Debtor tapped Marrero, Chamizo, Marcer, Law, LP, as its legal counsel. RAYNOR SHINE: Wants to Move Exclusivity Period Through Aug. 31 -------------------------------------------------------------- Raynor Shine Services LLC and Raynor Apopka Land Management request the U.S. Bankruptcy Court for the Middle District of Florida to extend the periods during which only the companies can file and solicit acceptances for their Chapter 11 plan through Aug. 31 and Oct. 30, respectively. The companies also proposed to extend the deadline for filing their plan and disclosure statement to through August 31. There has been a delay in filing a plan and disclosure statement because of the complicated nature of restructuring the companies' businesses and the ongoing uncertainty of the current Covid-19 Crisis. The Debtors are in negotiation with various parties concerning its exit from Chapter 11, but these discussions are not yet complete, though they are expected to be completed soon. About Raynor Shine Services Raynor Shine Services is an environmental recycling company based in Apopka, Florida. It offers mulch installation, grapple truck services, recycle yard disposal, land clearing, grinding services, storm recovery services. Raynor Shine Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-00577) on Jan 30, 2020. The petitions were signed by Henry E. Moorhead, CRO. At the time of filing, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Frank M. Wolff, Esq. at LATHAM LUNA EDEN & BEAUDINE LLP, serves as the Debtor's counsel. RED ROSE INC: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Region 17 on June 27 appointed a committee to represent unsecured creditors in the Chapter 11 cases of Red Rose, Inc., Petersen Dean Inc., PD Solar Inc., PetersenDean Hawaii LLC, PetersenDean Roofing and Solar Systems Inc., and PetersenDean Texas Inc. The committee members are: 1. ABC Supply Company, Inc. Attn: Theresa Harrison 1 ABC Parkway Beloit, Wisconsin 53511 Tel: 608 368 2237 Email: Theresa.Harrison@abcsupply.com 2. Beacon Sales Acquisition, Inc. Attn: David Wrabel 505 Huntmar Park Dr., Ste. 300 Herndon, Virginia 20170 Tel: 860 693 6630 Email: david.wrabel@becn.com 3. DJ Roof and Solar Supply, LLC Attn: Daryl Hudson 2009 Admirals Way Ft. Lauderdale, Florida 33316 Tel: 888-560 5885 Email: DHudson@Sheraport.com 4. Export Development Canada/ Exportation et Développement Canada Attn: Dan Barona 150 Slater Street Ottawa, Ontario, Canada K1A 1K3 Tel: 613 597 8988 Email: dbarona@edc.ca 5. Fabian Covarrubias as Class Action Representative Attn: Fabian Covarrubias c/o Daniel F. Gaines, Esq. Gaines & Gaines APLC 27200 Agara Rd., Ste. 101 Calabasas, California 91301 Tel: 818 703 8985 Email: daniel@gaineslawfirm.com 6. National Union Fire Insurance Company of Pittsburgh, Pa. Attn: Kevin J. Larner 80 Pine Street, 13th Floor New York, New York 10005 Tel: 212 458-7101 Email: kevin.larner@aig.com 7. Sterling National Bank Attn: Frederick Meagher 1412 Broadway New York, New York 10018 Tel: 212 661 7152 Email: fmeagher@snb.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 Red Rose Inc. Red Rose, Inc., its affiliates and its parent company Petersen-Dean Inc., a full-service, privately-held roofing and solar company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Lead Case No. 20-12814) on June 11, 2020. At the time of the filing, Red Rose and Petersen-Dean each disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Mike K. Nakagawa oversees the cases. Debtors are represented by Fox Rothschild, LLP. RED VENTURES: Moody's Alters Outlook on B1 CFR to Stable -------------------------------------------------------- Moody's Investors Service has affirmed Red Ventures, LLC's B1 Corporate Family Rating, B2-PD Probability of Default Rating and B1 ratings on the senior secured first-lien bank credit facilities. The outlook was revised to stable from positive. Affirmations: Issuer: Red Ventures, LLC (Co-Borrower: New Imagitas, Inc.) Corporate Family Rating, Affirmed at B1 Probability of Default Rating, Affirmed at B2-PD $754 Million Senior Secured First-Lien Revolving Credit Facility due 2023, Affirmed at B1 (LGD3) $2,279 Million (originally $2,290 Million) Senior Secured First-Lien Term Loan due 2024, Affirmed at B1 (LGD3) Outlook Actions: Issuer: Red Ventures, LLC Outlook, Changed to Stable from Positive The revision of the rating outlook to stable reflects Moody's expectation that the economic recession arising from the novel coronavirus pandemic will slow Red Ventures' revenue growth and delay deleveraging in 2020. Moody's views the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The magnitude of the impact will depend on the depth and duration of the pandemic, the impact that government restrictions to curb the virus will have on consumer behavior, the duration of restrictions in regions where the company operates as well as the timeline for fully reopening those economies. RATINGS RATIONALE Red Ventures' B1 CFR is forward-looking supported by its best-in-class online customer acquisition platform designed around a performance-based revenue model, loyal client relationships and a proprietary analytics platform that has consistently delivered comparatively higher customer traffic and sales conversions than its clients' in-house marketing programs. The company maintains high adjusted EBITDA margins and a fast growth profile longer-term, albeit under near-term pressure due to the recession. Moody's believes Red Ventures will continue to benefit from the secular shift of brand marketing spend and consumer purchase activity from traditional channels to online platforms. The company is well-positioned to exploit these trends, which have become more pronounced during the COVID-19 outbreak as consumers scale back in-store shopping and increase their visits to online retail sites and e-commerce consumption. Red Ventures' "asset-lite" operating model facilitates good conversion of EBITDA to positive free cash flow, supporting good liquidity and Moody's expectation that the company will focus on deleveraging. Moody's also acknowledges management's stated commitment to achieve a 3x-4x total debt to EBITDA leverage target (equivalent to 3.2x-4.2x Moody's adjusted) by reducing discretionary distributions and applying free cash flow to debt repayment. While Moody's believes the Bankrate acquisition enhanced Red Ventures' scale, diversified its traffic sources and helped to expand its financial institution client base given Bankrate's strong brand as a leading publisher, aggregator and distributor of online personal finance content, Moody's also believes that Bankrate's revenue is susceptible to certain factors beyond its control. These include economic recession, high levels of unemployment, increases/decreases in housing activity and changes in interest rates that affect consumers' purchasing behavior and ability to access credit, which Moody's factors in the B1 rating. Moody's expects the company's financial services segment to be negatively impacted the most in the current economic downturn as financial institutions reduce promotional ad spending and consumer web traffic declines on those sites. However, Moody's believes there will be offsetting increasing traffic on Red Ventures' health, education, entertainment and home services sites. Moody's expects Red Ventures to maintain tight cost controls, especially on new hiring, and eliminate inefficient spend during the downturn to offset slower revenue growth. An additional factor that constrains the rating includes Red Ventures' high pro forma financial leverage of 6.3x total debt to EBITDA (Moody's adjusted at LTM March 31, 2020, which excludes one-time acquisition-related transaction and restructuring costs and includes LTM EBITDA from acquisitions). Elevated leverage stems from two partially debt-financed medium-sized acquisitions last year, which highlights the company's acquisitive growth strategy that could lead to integration challenges and volatile credit metrics. The rating also embeds exposure to cyclical advertising revenue, absence of meaningful international diversification, high customer and end market concentrations, as well as governance risks related to private equity sponsor ownership that could lead to further M&A activity and dividend distributions. While Moody's expects acquisitions made in Q2 2019 and Q3 2019 will help Red Ventures deliver modest year-over-year revenue growth on a GAAP basis in the first half of 2020, Moody's expects revenue growth for the entire year to be roughly flat as the acquisitions' revenue, which was included in the company's consolidated revenue in the second half of last year will also be captured in the second half of this year. This will produce better comparability and, as a consequence, reflect existing negative organic revenue growth trends. In Q1 2020, pro forma revenue and EBITDA on an as-reported basis (as if acquisitions were owned for the entire year) declined 8% and 10%, respectively, following 12% and 11% corresponding declines in Q4 2019. The stable outlook considers the likelihood that financial leverage will remain higher than expected in 2020, ending the year temporarily above the downgrade threshold at roughly 5.8x total debt to EBITDA (Moody's adjusted), compared to Moody's original estimate of under 4x. Moody's projects a global economic recession this year with the US and G-20 advanced economies contracting 5.7% and 6.4%, respectively. As the virus threat subsides and economic growth gradually returns in 2021, Moody's projects financial leverage will decline to just under 5x by the end of next year. The stable outlook also reflects Moody's view that Red Ventures' digital marketing platform and online customer acquisition model will remain fairly resilient during the economic recession and generate robust free cash flow. Though Moody's projects US advertising spend to contract in the mid-to-high single digit percentage range in 2020, Moody's expects digital ad spend to grow, albeit at a low-single digit percentage pace with social media and mobile expanding at high single-digits. Moody's expects the company will continue to experience favorable digital ad market trends and achieve share gains as customers adopt its data-driven approach to marketing, especially in end markets less affected by the virus such as health, education, entertainment and home services (collectively accounting for the majority of revenue), which Moody's believes will offset EBITDA shortfalls in the credit cards sub-segment of its financial services business. Red Ventures has shifted resources from financial services to similar functions in health, education, entertainment and home services to exploit growth opportunities in these segments. Web-based providers like Red Ventures are expected to experience an increase in demand during the pandemic due to extended stay-at-home practices as clients accelerate the digitization of education and tele-health services and consumers increasingly engage in online activities such as ad-supported video streaming, social media, e-learning and e-commerce. Moody's expects Red Ventures will maintain good liquidity with the potential for small tuck-in acquisitions, avoid dividend recapitalizations and pay negligible distributions facilitating free cash flow generation for debt reduction. In Q1 2020, the company proactively drew $270 million (net of a $60 million repayment) under its $754 million revolver as a precautionary measure resulting in $254 million of availability plus $373 million in cash balances at quarter end. Moody's projects the company will partially repay revolver borrowings over the coming twelve months and fully repay the remaining outstanding balance by 2021. The revolver is subject to a springing Maximum First Lien Leverage covenant equal to 7.5x (as defined in the first-lien credit agreement) that becomes operative each quarter when more than 35% of the facility is drawn. At March 31, 2020, Red Ventures' First Lien Leverage Ratio was 4.7x. While Moody's expects the company to maintain sufficient covenant headroom over the next twelve months, Moody's will closely monitor the cushion as EBITDA levels moderate. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. 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 Red Ventures of the deterioration in credit quality it has triggered, given its exposure to the US economy, which has left it vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. 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 the company demonstrates revenue growth and EBITDA margin expansion leading to consistent and increasing positive free cash flow generation and sustained reduction in total debt to GAAP EBITDA leverage below 4x (Moody's adjusted) and free cash flow to debt (Moody's adjusted) of at least 6%. Red Ventures would also need to increase scale, maintain at least a good liquidity profile and exhibit prudent financial policies. Ratings could be downgraded if financial leverage is sustained above 5x total debt to GAAP EBITDA (Moody's adjusted) or EBITDA growth is insufficient to maintain free cash flow to adjusted debt of at least 2% beyond 2021. Market share erosion, significant client losses, sub-par organic revenue growth, weakened liquidity or if the company engages in leveraging acquisitions or sizable shareholder distributions could also result in ratings pressure. Headquartered in Fort Mill, South Carolina, Red Ventures, LLC is a wholly-owned operating subsidiary of Red Ventures Holdco, LP, which owns a portfolio of growing digital businesses that bring consumers and brands together through integrated e-commerce, strategic partnerships, and proprietary brands across the financial, home, health, education and entertainment services industries. On November 8, 2017, Red Ventures completed the acquisition of Bankrate, Inc. for approximately $1.4 billion. The company completed two mid-sized acquisitions, HigherEducation.com on April 12, 2019 and Healthline Media on July 16, 2019. Following a July 2018 equity raise mainly from existing investors, Red Ventures' management and employees own roughly half of the company, while private equity firms, Silver Lake Partners, General Atlantic, ICONIQ and other investors own the remaining half. Revenue totaled $1.37 billion for the twelve months ended March 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. RGIS SERVICES: Moody's Withdraws 'Ca' CFR on Debt Restructuring --------------------------------------------------------------- Moody's Investors Service withdrew RGIS Services, LLC's ratings following the execution of the company's restructuring support agreement. "The severe disruption from coronavirus-driven temporary closures among RGIS' customer base, combined with a high interest expense burden, resulted in significant challenges for the business," said Moody's Vice President and senior analyst Raya Sokolyanska. "The restructuring reduces RGIS' $448 million debt by more than half and improves liquidity by lowering interest payments, removing financial maintenance covenants and extending debt maturities." Withdrawals: RGIS Services, LLC: Corporate family rating, withdrawn, previously rated Ca Probability of default rating, withdrawn, previously rated Ca-PD/LD Senior secured credit facilities, withdrawn, previously rated Ca (LGD4) Outlook, withdrawn, previously negative RATINGS RATIONALE On June 25, 2020, RGIS executed a restructuring support agreement with holders of over 98% of its debt. As part of the agreement, the existing term loan and revolver borrowings (with the exception of a small holdout amount) were converted into a $200 million new term loan and equity. Existing equity interests were cancelled. 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. Following the restructuring, RGIS will be owned by its former lenders, including funds affiliated with HPS Investment Partners, LLC and Black Diamond Capital Management. RGV SMILES: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: RGV Smiles by Rocky L. Salinas D.D.S. P.A. a/k/a Compassionate Healthcare Services 805 N. Cage Blvd., Suite D Pharr, TX 78577 Case No.: 20-70209 Business Description: RGV Smiles by Rocky L. Salinas D.D.S. P.A. is a dental services provider in Pharr, Texas. Chapter 11 Petition Date: June 30, 2020 Court: United States Bankruptcy Court Southern District of Texas Judge: Hon. Eduardo V. Rodriguez Debtor's Counsel: Joyce Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Tel: (972) 503-4033 E-mail: joyce@joycelindauer.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Rocky L. Salinas DDS, director. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/1BEqCi ROLETTE COUNTY: Moody's Reviews Ba1 Issuer Rating for Downgrade --------------------------------------------------------------- Moody's Investors Service places the Ba1 issuer rating and Ba3 lease revenue rating of Rolette County, ND under review for possible downgrade. The county has $9.2 million of rated lease revenue debt outstanding. The issuer rating represents Moody's assessment of hypothetical debt of the county supported by a general obligation unlimited tax pledge. The county does not currently have any outstanding debt supported by a GOULT pledge. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The county's Ba1 issuer and Ba3 lease ratings were placed under review because of the heightened non-appropriation risk caused by the county's weak financial position and its current inability to use its jail facility, which was temporarily closed by the state while it investigates several compliance violations. The jail is the pledged asset supporting the lease bonds and has historically been a financial burden for the county. During the review, Moody's will assess the county's long-term commitment to the lease, the impact of the closure on the county's finances, and the implications of any state findings through its investigation. Moody's expects to complete the review in the coming weeks. The Series 2016 COPs are secured by rental payments made by the county to the trustee (Zion Bank), subject to annual appropriation. Per a lease-purchase agreement, initially executed upon issuance of the bonds, the bonds are secured by lease payments equal to debt service from the county directly to the trustee, subject to annual appropriation. The Ba3 lease revenue rating is notched twice from the county's issuer rating due to the risk of annual non-appropriation of lease payments, which will be funded in part with volatile revenue sources; the more essential nature of the pledged assets (the county's new jail); and the risks associated with operating the jail facility, which opened in early 2018 but has been temporarily shut down as of June 22, 2020, which negatively impacts revenues sources. Moody's will continue to monitor the ongoing investigation and the impact on pledged revenue sources to pay debt service. The coronavirus outbreak is a social risk under its ESG framework, given the substantial implications for public health and safety. Rolette County is not susceptible to immediate material credit risks related to the coronavirus. The longer-term impact will depend on both the severity and duration of the crisis. The situation surrounding coronavirus is rapidly evolving. If its view of the credit quality of Rolette County changes, Moody's will update the rating and/or outlook at that time. RATING OUTLOOK Ratings under review FACTORS THAT COULD LEAD TO AN UPGRADE - Material improvement in operations of the jail - Significant increases to operating reserves and liquidity (issuer rating) - Upgrade in issuer rating (lease rating) FACTORS THAT COULD LEAD TO A DOWNGRADE - Permanent closure of jail and/or failure to appropriate for lease payments (issuer and lease ratings) - Negative budget variances in revenue that reduce liquidity (issuer rating) - Inability to cover lease payments without further drawing down reserves (issuer rating) - Downgrade in issuer rating (lease rating) LEGAL SECURITY The lease revenue bonds are secured by rental payments made by the county to the trustee, Zion Bank, subject to annual appropriation. PROFILE Rolette County is located in north central North Dakota (Aa1 stable) along the border of Manitoba (Aa2 stable), Canada (Aaa stable), and encompasses 913 square miles. It is home to roughly 14,603 residents as of 2018. The Turtle Mountain Reservation is located on 46,000 acres in the county. METHODOLOGY The principal methodology used in the issuer rating was US Local Government General Obligation Debt published in September 2019. ROMANS HOUSE: Court Approves Disclosure Statement ------------------------------------------------- The Court ordered that the Disclosure Statement of Romans House, LLC, and Healthcore System Management, LLC is approved. Prior to June 3, 2020, the Plan, the Disclosure Statement, the Disclosure Statement Approval Order and a Ballot conforming to Official Form 14 shall be mailed to creditors. A hearing on confirmation of the Plan will be held on July 7, 2020, at 9:30 a.m. before the Honorable Edward L. Morris. Pursuant to paragraph 1 of General Order 2020-14, the hearing will be conducted by video conference. July 2, 2020, is fixed as the last day for filing and serving written objections to confirmation of the Plan. July 2, 2020, at 5:00 p.m. is fixed as the deadline for tendering written acceptances or rejections of the Plan. Counsel for the Debtor: Robert T. DeMarco DEMARCO MITCHELL, PLLC 1255 West 15th Street, 805 Plano, Texas 75075 About Romans House Based in Forth Worth, Texas, Romans House, LLC, operates Tandy Village Assisted Living, a continuing care retirement community and assisted living facility for the elderly in Fort Worth, Texas. Affiliate Healthcore System Management, LLC, operates Vincent Victoria Village Assisted Living, also an assisted living facility for the elderly. Romans House, LLC, and Healthcore System sought Chapter 11 protection (Bankr. N.D. of Tex. Case No. 19-45023 and 19-45024) on Dec. 9, 2019. Romans House was estimated to have $1 million to $10 million in assets and liabilities while Healthcore was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Edward L. Morris is the case judge. DEMARCO MITCHELL, PLLC, is the Debtors' counsel. ROOFTOP GROUP: Debtors Will Either Restructure or Liquidate in Plan ------------------------------------------------------------------- The Official Committee of Unsecured Creditors of Rooftop Group International Pte. Ltd., filed a Disclosure Statement for its Plan of Reorganization / Liquidation. Based upon the information currently available to the Committee, (A) Rooftop International's Assets consist primarily of (i) intellectual property; (ii) its ownership interest in various subsidiaries and affiliates; and (iii) Causes of Action; and (B) Rooftop Services' and Rooftop USA’s Assets consist primarily of Causes of Action. As of April 30, 2020, Rooftop International reported cash in its account in the amount of $106,795. As of May 27, 2020, the Trustee has $14,470 in the Rooftop Services account, and $95,241 in the Rooftop USA account. Creditors will be treated as follows: * Class 2 Secured Claims. Class 2 Claims are Impaired. Each Holder of an Allowed Class 2 Claims shall receive, at the election of the Committee, (i) deferred cash payments having a present value equal to the amount of its Allowed Class 2 Claim and retention of the liens securing such Claim to the extent of the allowed amount of such Claim; (ii) the "indubitable equivalent" of such Allowed Class 2 Claim; (iii) the distribution of the collateral securing such Allowed Class 2 Claim; or (iv) other mutually agreeable treatment on account of such Claim. * Class 3 General Unsecured Claims. Class 3 Claims are Impaired. Each Holder of an Allowed Class 3 Claim will receive in respect of such Claim its Pro Rata distribution of (a) Net Proceeds from Causes of Action and (b) either (i) upon a Restructuring, the New Common Stock Distribution; or (ii) upon a Liquidation, Net Proceeds from such Liquidation. The Holders of Claims in this Class are entitled to vote. * Class 4 Interests. Class 4 Interests are Impaired. The Holders of Class 4 Interests will receive no distribution. On the Effective Date, all Class 4 Interests will be deemed canceled, null and void, and of no force and effect. On the Effective Date, the Debtors will consummate either a Restructuring or a Liquidation in accordance with the terms of the Plan. A full-text copy of the Disclosure Statement for the plan of Reorganization / Liquidation dated June 3, 2020, is available at https://tinyurl.com/yaamjvpb from PacerMonitor.com at no charge. Counsel for the Creditors Committee of Rooftop Group International: Judith W. Ross Rachael L. Smiley ROSS & SMITH, PC 700 North Pearl Street, Suite 1610 Dallas, Texas 75201 Telephone: 214-377-7879 Facsimile: 214-377-9409 E-mail: judith.ross@judithwross.com rachael.smiley@judithwross.com - and - James E. Van Horn BARNES & THORNBURG LLP 1717 Pennsylvania Avenue NW, Suite 500 Washington, D.C. 20006-4623 Telephone: 202-371-6351 Facsimile: 202-289-1330 E-mail: jvanhorn@btlaw.com Chapter 11 Trustee of ROOFTOP GROUP USA, INC., Case No. 19-44234-mxm11, and ROOFTOP GROUP SERVICES (US) INC., Case No. 19-44235-mxm11: Daniel J. Sherman SHERMAN & YAQUINTO, L.L.P. 509 N. Montclair Avenue Dallas, TX 75208-5498 Telephone: 214-942-5502 Facsimile: 214-946-7601 E-mail: Corky@syllp.com About Rooftop Group Int'l Rooftop Group International Pte. Ltd. is a private limited company organized under the laws of Singapore. It was formed to hold certain intellectual property assets, including registered trademarks and patents, relating to the manufacture and sale of hobby-grade drones under the name Propel RC(R). At present, it has no operations and has no employees, and its remaining assets are composed almost entirely of certain patents, trademarks, and other intellectual property. In addition, it licenses certain of its trademarks to Amax Industrial Group China Co, Ltd., under a nonexclusive license agreement. Certain of Rooftop Group's prepetition secured creditors commenced collection actions against the Debtor in Singapore courts pertaining to prepetition debt obligations under which the Debtor was either a primary obligor or guarantor. The Debtor's intellectual property assets are not encumbered by any lien or security interest; however, a portion of the outstanding equity in the Debtor is pledged to secure repayment of certain of the Debtor's prepetition obligations and certain prepetition creditors assert liens on certain asset classes other than intellectual property. To preserve the value of its intellectual property assets for the benefit of all its unsecured creditors, on April 30, 2019, the Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-31443). In the petition signed by Darren Matloff, director, the Debtor was estimated to have $1 million to $10 million in assets and $50 million to $100 million in liabilities. The Hon. Harlin DeWayne Hale oversees the case. The Debtor is represented by Reed Smith LLP. The Office of the U.S. Trustee on June 13, 2019, formed an official committee of unsecured creditors. The five members who comprise the Committee in its current form are Brian Dlugash, PICA Australia Pty., Ltd., Begaline Limited, Polar Ventures Overseas Limited, and Chiat Thian Chew. The Creditors' Committee is represented by Barnes & Thornburg LLP. RQW - REAL ESTATE: Unsecureds to Recover 100% in Plan ----------------------------------------------------- RQW Real Estate Holdings, LLC, and RQW Automotive Services, LLC, submitted a Second Amended Joint Disclosure Statement. The Debtors' Plan provides for two classes of secured claims, two classes of unsecured classes, and four classes of equity security holders. The Bank will receive full payment of $1,200,000, in full and complete satisfaction of its allowed claim. The DuPage County Collector, the holder of a secured claim of approximately $24,000 against the Real Estate Debtor, shall receive payment in full of all real estate taxes owed by Real Estate Debtor as of the Confirmation Date. Unsecured creditors holding allowed claims against Real Estate Debtor (virtually none) and Auto Debtor will receive a 100% distribution. The equity interests held by Wilkie Holdings Inc. in Real Estate Debtor and Auto Debtor will be cancelled and Eric Quick will be the sole equity holder of the Debtors. The Joint Plan also provides for the payment of administrative and priority claims in full or as otherwise agreed to by the parties. As of the Effective Date and in consideration of the Exit Financing, Eric and Adriana Quick shall be released and discharged by Richard Wilkie, Wilkie Holdings, LLC and Mary Wilkie, from any and all claims, liabilities, debts, suits and demands related to the Debtors in any way, including, but not limited to, the claims asserted against Eric Quick by Richard Wilkie and Wilkie Holdings, LLC, in the Dupage County suit and the claims against Eric Quick and Adriana Quick in the suit filed by First Midwest Bank in Cook County, except for the Bank, where the releases and discharges will be effective as of the Exit Financing Closing Date. As discussed, distributions under the Plan will be from the Debtor's operations and/or the cash infusion by Quick. A full-text copy of the Second Amended Joint Disclosure Statement dated June 3, 2020, is available at https://tinyurl.com/ybqpaoxw from PacerMonitor.com at no charge. Debtor's counsel: Scott R. Clar (Atty. No. 06183741) Crane, Simon, Clar & Goodman 135 S. LaSalle Street, Suite 3705 Chicago, Illinois 60603 Tel: 312-641-6777 E-mail: sclar@cranesimon.com About RQW Real Estate Holdings and RQW Automotive Services RQW Real Estate Holdings LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). RQW Real Estate Holdings and its affiliate, RQW Automotive Services LLC, filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 19-35576) on Dec. 18, 2019. At the time of the filing, RQW Real Estate Holdings was estimated to have assets of between $1 million and $10 million and liabilities of the same range. RQW Automotive had estimated assets of between $1 million and $10 million and liabilities of less than $50,000. Judge Deborah L. Thorne oversees the cases. Crane, Simon, Clar and Dan is the Debtors' legal counsel. RSB INVESTMENTS: Seeks to Hire Briones Business as Legal Counsel ---------------------------------------------------------------- RSB Investments Group, LLC seeks approval from the U.S. Bankruptcy Court for the District of New Mexico to employ Briones Business Law Consulting, P.C. as its legal counsel. The firm will provide the following services: (a) advise Debtor regarding all aspects of its Chapter 11 case; (b) prepare Debtor's Chapter 11 plan of reorganization and other legal papers; (c) assist Debtor in taking actions required to effect reorganization; and (d) provide all legal services necessary for Debtor's continued operation. The firm will be paid at hourly rates as follows: Thomas Briones $350 Chris Jaramillo $195 Isaac Leon $175 Trei Gilpin and Nishant Patel, Law clerks $75 Alaena Romero, Paralegal $75 Briones was paid $744.34 for pre-bankruptcy services and tax. Thomas Briones, Esq., at Briones, disclosed in court filings that the firm and its attorneys have no connection with Debtor, its creditors or any other "party-in-interest." The firm can be reached through: Thomas R. Briones, Esq. Briones Business Law Consulting, P.C. 1121 4th St. NW, Ste. 1B Albuquerque, NM 87102 Telephone: (505) 246-0120 Facsimile: (505) 271-4848 Email: tb@brionesbusinesslaw.com About RSB Investments Group RSB Investments Group, LLC is a privately held company in the traveler accommodation industry. It is based in Deming, N.M. On June 11, 2020, RSB Investments Group filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.M. Case No. 20-11176). At the time of the filing, Debtor disclosed total assets of $164,327 and total liabilities of $1,019,142. Judge Robert H. Jacobvitz oversees the case. Debtor is represented by Briones Business Law Consulting, P.C. RUM RUNNERS: Needs More Time to Formulate Chapter 11 Plan --------------------------------------------------------- Rum Runners Saloon, Inc. asked the U.S. Bankruptcy Court for the Western District of Pennsylvania to extend the periods during which the company has the exclusive right to file a plan of reorganization. Rum Runners sought the extension in order to provide it ample time to complete the process of finding a tenant for the property and a sale of the assets. About Rum Runners Saloon Based in Pittsburgh, Rum Runners Saloon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 19-24682) on Dec. 3, 2019, disclosing under $1 million in both assets and liabilities. Judge Gregory L. Taddonio oversees the case. The Debtor is represented by Brian C. Thompson, Esq., at Thompson Law Group, P.C. SALGUERO'S INC:Taps Molinari Oswald as Accountant ------------------------------------------------- Salguero's, Inc. received approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Molinari Oswald, LLC as its accountant. The firm's services will include: (a) assisting Debtor in closing out its books as of the date of the filing of its Chapter 11 case and assisting Debtor in opening new books; (b) assisting Debtor to establish and maintain a bookkeeping system, if necessary, to accommodate the reporting requirements; (c) preparing periodic statements describing Debtor's operations; and (d) assisting Debtor in preparing and filing its income tax and employment tax returns. The firm will be paid at hourly rates as follows: Michael Homa, CPA $205 Karen McKeon, Staff Accountant $115 Aaron Hoffman, Staff Accountant $65 Katherine Stauffer, Bookkeeper $75 Michael Homa, a certified public accountant at Molinari Oswald, disclosed in court filings that he and his firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. Molinari Oswald can be reached at: Michael F. Homa, CPA Molinari Oswald, LLC 4508 Old Bethlehem Pike Center Valley, PA 18034 Telephone: (610) 871-6700 Facsimile: (610) 871-6777 Email: mhoma@molinarioswald.com About Salguero's Inc. Salguero's, Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D. Pa. Case No. 20-12251) on May 8, 2020, disclosing under $1 million in both assets and liabilities. Judge Patricia M. Mayer oversees the case. Debtor has tapped Case & DiGiamberardino, P.C. as its legal counsel, and Molinari Oswald, LLC as its accountant. SFP FRANCHISE: Unsecureds to Recover 0.52% to 3.15% in Plan ----------------------------------------------------------- SFP Franchise Corporation and Schurman Fine Papers filed a Joint Plan of Liquidation and a Disclosure Statement. Generally speaking, the Plan: * provides the vesting of all available cash in the Liquidation Trustee, for the purpose of distribution to holders of Claims; * provides for the full and final resolution of funded debt obligations; * designates a Liquidation Trustee to wind down the Debtors' affairs, prosecute, continue or settle certain Retained Causes of Action, pay and reconcile Claims, and administer the Plan and Liquidation Trust in an efficacious manner; and * provides for 100 percent recoveries for holders of Administrative Claims, Secured Tax Claims, Priority Tax Claims, Other Priority Claims and Other Secured Claims. The Debtors believe that confirmation of the Plan will avoid the lengthy delay and significant cost of liquidation under chapter 7 of the Bankruptcy Code. The Plan classifies holders of Claims and Interests according to the type of the holder's Claim or Interest. Holders of Claims in Class 4 (AG Secured Claims), Class 5 (AG Deficiency Claims) and Class 6 (General Unsecured Claims) are entitled to vote to accept or reject the Plan. Class 4 AG Secured Claims total $38,706,673, and holders of these claims are projected to recover 0% to 2%. In full and final satisfaction of all Allowed AG Secured Claims, the Encumbered Cash shall be paid solely from the Encumbered Cash Reserve to holders of Allowed AG Secured Claims until the Allowed AG Secured Claims are paid in full. Class 5 AG Deficiency Claims are projected to total $37,906,000, and holders of these claims are projected to recover 0% to 0.52%. Each holder of such Allowed AG Deficiency Claim shall receive its pro rata share of the Beneficial Trust Interests, which Beneficial Trust Interests shall entitle the holders thereof to receive their pro rata share of the Liquidation Trust Assets. Class 6 General Unsecured Claims total $38,000,000, and holders of these claims are projected to recover 0.52% to 3.15%. Each holder of such Allowed General Unsecured Claim will receive its pro rata share of the Beneficial Trust Interests, which Beneficial Trust Interests shall entitle the holders thereof to receive their pro rata share of the Liquidation Trust Assets. Class 9 Interests are impaired. Holders of Interests in the Debtors will receive no distribution under the Plan. Distributions under the Plan on account of the Beneficial Trust Interests will be funded by the Liquidation Trust Assets. A full-text copy of the Disclosure Statement dated June 3, 2020, is available at https://tinyurl.com/y9mgjq5v from PacerMonitor.com at no charge. Counsel to the Debtors: Adam G. Landis Matthew B. McGuire Nicolas E. Jenner LANDIS RATH & COBB LLP 919 Market Street, Suite 1800 Wilmington, DE 19801 Telephone: (302) 467-4400 Facsimile: (302) 467-4450 About SFP Franchise Corporation Schurman Retail Group -- http://www.srgretail.com/-- was founded in 1950 as an importer and wholesaler of fine greeting cards offering its products through wholesale, franchise, retail, and online channels. The first Papyrus store was opened in 1973 in Berkeley, California. Today, the company operates Papyrus, Paper Destiny, and American Greetings/Carlton Cards retail stores. As of the Petition Date, the Company owns and operates 254 retail stores in the United States and Canada and is headquartered in Goodlettsville, Tennessee. SFP Franchise Corporation and Schurman Fine Papers sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10134) on Jan. 23, 2020. At the time of the filing, the Debtors each had estimated assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. Judge John T. Dorsey oversees the cases. The Debtors tapped Landis Rath & Cobb, LLP as their legal counsel, and Omni Agent Solutions as claims and noticing agent. The U.S. Trustee for Region 3 on Feb. 4, 2020, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of SFP Franchise Corporation and Schurman Fine Papers. SHAKER RD LLC: Seeks to Hire Hendel Collins as Counsel ------------------------------------------------------ Shaker Rd, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Massachusetts to employ Hendel Collins & O'Connor, P.C., as counsel to the Debtor. Shaker Rd, LLC requires Hendel Collins to: (a) provide legal advice with respect to the powers, rights, and duties of the Debtor in the continued management and operation of its business; (b) provide legal advice and consultation related to the legal and administrative requirements of operating this Chapter 11 bankruptcy case, including to assist the Debtor in complying with the procedural requirements of the Office of the U.S. Trustee; (c) take all necessary actions to protect and preserve the Debtor's Estate, including prosecuting actions on the Debtor's behalf, defending any action commenced against the Debtor, and representing the Debtor's interests in any negotiations or litigation in which the Debtor may be involved, including objections to the claims filed against the Debtor's Estate; (d) prepare on behalf of your Applicant any necessary pleadings including Applications, Motions, Answers, Orders, Complaints, Reports, or other documents necessary or otherwise beneficial to the administration of the Debtor's Estate; (e) represent the Debtor's interests at the Meeting of Creditors, pursuant to the Bankruptcy Code, and at any other hearing scheduled before this Court related to the Debtor; (f) assist and advise your Applicant in the formulation, negotiation, and implementation of a Chapter 11 Plan and all documents related thereto; (g) assist and advise the Debtor with respect to negotiation, documentation, implementation, consummation, and closing of corporate transactions, including sales of assets, in this Chapter 11 bankruptcy case; (h) review and analyze all claims filed against the Debtor's Bankruptcy Estate and to advise and represent the Debtor in connection with the possible prosecution of objections to claims; (i) assist and advise the Debtor concerning any executor contract and unexpired leases, including assumptions, assignments, rejections, and renegotiations; (j) coordinate with other professionals employed in the case to rehabilitate the Debtor's affairs; and (k) perform all other bankruptcy related legal services for the Debtor that may be or become necessary during the administration of this case. Hendel Collins will be paid based upon its normal and usual hourly billing rates. On or about May 20, 2020, the Debtor paid a retainer in the amount of $10,000 to Hendel Collins. On June 16, 2020, the Debtor paid Hendel Collins an additional $10,000. As of the petition date, after deducting fees and expenses, Hendel Collins is holding a retainer in the amount of $13,500.50. Hendel Collins will also be reimbursed for reasonable out-of-pocket expenses incurred. Andrea M. O'Connor, partner of Hendel Collins & O'Connor, P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Hendel Collins can be reached at: Andrea M. O'connor, Esq. HENDEL COLLINS & O'CONNOR, P.C. 101 State Street Springfield, MA 01103 Tel: (413) 734-6411 E-mail: aoconnor@hendelcollins.com About Shaker Rd LLC Shaker Rd, LLC, based in East Longmeadow, MA, filed a Chapter 11 petition (Bankr. W.D. Mass. Case No. 20-30338) on June 17, 2020. HENDEL, COLLINS & O'CONNOR, P.C., serves as bankruptcy counsel to the Debtor. In the petition signed by Louis Masaschi, manager, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. SIGNATURE INSURANCE: Hires Latham Luna as Counsel ------------------------------------------------- Signature Insurance Group, LLC, seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Latham Luna Eden & Beaudine, LLP, as counsel to the Debtor. Signature Insurance requires Latham Luna to: (a) provide legal advice as the Debtor's rights and duties in this case; (b) prepare pleadings related to this case, including a disclosure statement and a plan of reorganization; and (c) take any and all other necessary action incident to the proper preservation and administration of the estate. Latham Luna will be paid at these hourly rates: Justine M. Luna, Partner $400 Daniel Velasquez, Partner $300 Paralegals $160 Prior to the petition date, the Debtor paid Latham Luna an advance fee of $9,661. Latham Luna will also be reimbursed for reasonable out-of-pocket expenses incurred. Justin M. Luna, partner of Latham Luna Eden & Beaudine, 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. Latham Luna can be reached at: Justin M. Luna, Esq. LATHAM LUNA EDEN & BEAUDINE, LLP 111 N. Magnolia Ave., Suite 1400 Orlando, FL 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: jluna@lathamluna.com About Signature Insurance Group Signature Insurance Group, LLC, based in Orlando, FL, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-03142) on June 3, 2020. LATHAM LUNA EDEN & BEAUDINE LLP, serves as bankruptcy counsel. In its petition, the Debtor was estimated to have $100,000 to $500,000in assets and $1 million to $10 million in liabilities. The petition was signed by David R. Ballew, CEO and manager. SLANDY INC: Court Conditionally Approves Disclosure Statement ------------------------------------------------------------- Judge Caryl E. Delano has ordered that the Disclosure Statement filed by Slandy, Inc., d/b/a Executive Care is conditionally approved. The Court will conduct a hearing on confirmation of the Plan, including timely filed objections to confirmation, objections to the Disclosure Statement, motions for cramdown, applications for compensation, and motions for allowance of administrative claims on July 13, 2020 at 3:30P.M. in Tampa, FL − Courtroom 9A, Sam M. Gibbons United States Courthouse, 801 N. Florida Avenue. Objections to confirmation must be filed with the Court and served on the Local Rule 1007−2 Parties in Interest List no later than seven days before the date of the Confirmation Hearing. Any written objections to the Disclosure Statement must be filed with the Court and served no later than seven days prior to the date of the hearing on confirmation. The Plan Proponent must file a ballot tabulation no later than 96 hours prior to the time set for the Confirmation Hearing. Parties in interest must submit to the Clerk's office their written ballot accepting or rejecting the Plan no later than eight (8) days before the date of the Confirmation Hearing. About Slandy Inc. Slandy, Inc. d/b/a Executive Care -- https://north-pinellas.executivehomecare.com/ -- provides a full range of in-home care services to clients who are residing in a hospitals, assisted living or skilled nursing facilities that may need extra personal attention. These home care services can range from companion care and personal care to 24/7 and Live-In care, and more. Slandy, Inc., filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-11554) on Dec. 6, 2019. In the petition signed by Andrew E. Corbett, president, the Debtor disclosed $193,351 in assets and $1,041,442 in liabilities. Buddy D. Ford, Esq. at Buddy D. Ford, P.A., is the Debtor's counsel. SLM CORP: Fitch Corrects March 13 Ratings Release ------------------------------------------------- Fitch Ratings replaced a ratings release on SLM Corporation published on March 13, 2020 to correct the name of the obligor for the bonds. The amended ratings release is as follows: Fitch Ratings has affirmed SLM Corporation's and Sallie Mae Bank's Long-Term Issuer Default Ratings at 'BB+'. In addition, Fitch has affirmed SLM's and Sallie Mae Bank's Viability Ratings at 'bb+', and SLM's senior unsecured debt rating and preferred stock rating at 'BB+' and 'B+', respectively. The Rating Outlook is Stable. KEY RATING DRIVERS The rating affirmations reflect SLM's leading market position in the U.S. private education loan industry, above average returns and operating performance relative to peer banks, solid asset quality, and sufficient levels of capital and liquidity. Rating constraints include SLM's monoline business model and heavy reliance on net interest income, heightened legislative/regulatory risk associate with the student lending/servicing business, the duration mismatch between demand deposits and longer-term student loans, and SLM's higher proportion of brokered deposits which are more sensitive to interest rates. In January, the company announced a revised strategy, whereby it plans to sell $3 billion of private student loans annually over the next three years beginning in 1Q20. The company plans to use the gains generated as well as the capital freed up from the loan sales for share repurchases ($600 million in 2020 and $1.4 billion over three years). The sales are expected to result in SLM's assets remaining essentially flat over the next three years assuming the transactions are executed as planned. The company announced on March 10 that it had completed the sale of $3 billion loans and entered into an accelerated share repurchase program with JP Morgan. This decision was driven by the underperformance of SLM shares in recent years, which management believes provided an arbitrage opportunity whereby it could clearly demonstrate the market value of its loan portfolio relative to the implied value reflected in its share price. While the gain on sale income will likely result in higher earnings volatility than holding the loans to term, and the increase in share repurchases is viewed less favorably for debtholders, Fitch expects the impact to be relatively neutral to SLM's capital ratios and liquidity position, although the reduction in longer-term profits from selling loans rather than holding them to term is viewed negatively. Fitch expects SLM's capital distributions to shareholders as a percentage of net income to remain below 100%. Management has also stopped originating personal installment loans and will run off the existing portfolio, of roughly $1 billion at Dec. 31, 2019. Fitch views SLM's decision to exit the personal installment loan business favorably, as the product's higher risk profile and more intense competitive landscape more-than-offset the modest diversification benefit. SLM's private education loan origination growth decelerated to 6% in 2019 from 11% in 2018, and period-end private education loan growth moderated to roughly 13% in 2019 from 18% in 2018, as loan consolidations to third parties remained elevated. Period end loan growth has been negatively impacted, over the past few years, by growth of the personal education loan consolidation market. In 2019, nearly $1.5 billion in loans were refinanced away from SLM; a 53% increase from the prior year. This was above the $1.25 billion projected by management at the beginning of the year. Last year was the first year in which Navient Corporation was able to consolidate SLM borrowers' loans following the expiration of its non-compete agreement with SLM, which Fitch believes was a meaningful contributor to the sharp increase. Negative ratings pressure could occur should loans being refinanced away from SLM remain elevated for a sustained period, negatively impacting SLM's earnings and credit performance. Asset quality was solid in 2019 even as the portfolio continued to season and a larger percentage of loans entered repayment. At Dec. 31, 2019, 46% of the private education loan portfolio was in full principal and interest repayment; up from 44% a year ago. Fitch estimates net charge-offs as a percentage of loans in full principal and interest repayment increased to 1.86% in 2019 from 1.66% in 2018. Reserve coverage remained solid, at 2.0x TTM charge-offs. However, both forbearance and troubled debt restructurings as a percentage of loans in repayment rose to 4.1% and 9.4% at YE 2019 from 3.8% and 8.6%, respectively, at YE 2018. Fitch expects credit losses to trend higher over the near to medium term as the portfolio seasons and a higher proportion of loans are in full repayment, but to remain with management's 6%-7% life of loan forecast barring a major shift in the macroeconomic environment. In October 2019, the company indicated that it would begin testing changes to its loan modification practices that include limiting the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted. Management expects these changes to accelerate defaults and life of loan losses in the portfolio by between 4% and 14%. While Fitch views improved transparency on loss emergence trends and greater consistency of loan modification policies with peer banks favorably, the expected increase in defaults is viewed negatively. SLM's operating performance remained strong in 2019, with pre-tax income up 33% from the prior year driven by 13% loan growth and improved cost controls as SLM's efficiency ratio declined to 34.7% in 2019 from 41.0% in 2018. The company recognized $44 million of non-recurring costs in 2018 related to its business diversification efforts and technology infrastructure migration to the cloud. The company also had a more significant write-down of its tax indemnification receivable in 2018 relative to 2019 as a result of the lapse of statute of limitations, which negatively impacted 2018 results. If not for this item, pre-tax income growth would have been 15.6%, which is more in line with loan growth. SLM's net interest margin declined to 5.76% from 6.10% in the prior year. The decline was primarily driven by an increase in cash and short-term liquidity at the prompting of its regulators in order to be more consistent with peer banks. Nonetheless, pre-tax ROA improved to 2.4% in 2019 from 2.2% in the prior year. Fitch believes the recent 50 bps cut in interest rates by the Fed is a manageable for SLM. Based on its balance sheet at Dec. 31, 2019, management projects a 1.4% decline in net interest income would result over the following 24 months from a down 100 bps interest rate shock (immediate). Sallie Mae Bank's risk-based capital ratios ticked-up as loan growth moderated and the company increased its liquidity levels. Sallie Mae Bank's common equity Tier 1 ratio increased by 10 bps, to 12.2% at the end of 2019 compared to the prior year. However, the bank's Tier 1 leverage ratio declined to 10.2% from 11.1% and SLM's tangible common equity ratio declined to 8.9% from 9.7% as a result of the aforementioned increase in SLM's cash and short-term investments as a percentage of assets. The implementation of the CECL accounting standard this year is expected to place near-term pressure on SLM's regulatory capital ratios. Whereas SLM's liquidity (cash and short-term investments) as a percentage of assets has historically been low relative to peer banks, at the prompting of its regulators SLM increased its liquidity portfolio to 18.8% of assets as of Dec. 31, 2019, compared to 10.5% a year ago. The increase in liquidity was largely funded with deposits. While Fitch views the absolute level of liquidity held at Sallie Mae Bank favorably, it is mitigated by the commensurate increase in deposits, which are expected to be prioritized relative to other forms of debt in a default scenario. SLM will have had the largest impact among the consumer lenders in Fitch's rated universe from the implementation of the current expected credit loss accounting standard on Jan. 1, 2020. SLM's day one impact from CECL was estimated to be a $1.1 billion increase to its loan loss reserve (+250%) and a negative impact to common equity of $950 million (-33%). Although the impact to SLM's regulatory capital ratios will be significant, it will be mitigated by the three-year phase-in period allowed by bank regulators. Following the full phase-in of CECL, Fitch expects SLM to maintain regulatory capital ratios that remain well in excess of regulatory minimums, and with the addition of considerably higher loss reserves of roughly 7% of loans, should provide a larger buffer to absorb credit losses than was available pre-CECL, which Fitch views favorably. Although SLM has diversified its funding profile over the past couple of years, it remains a ratings constraint. SLM has historically targeted a funding mix of 80% deposits and 20% securitization. The securitization funding mix was below the targeted level at 15% of total funding at Dec. 31, 2019, but is expected to trend higher over the course of this year. The majority of SLM's deposits are brokered (57%), which are more price sensitive than traditional retail deposits. Fitch also believes that the duration of brokered deposits does not align as well with student loan assets as securitizations and unsecured debt, particularly during periods of rising interest rates. Although the company does enter into swaps to hedge a portion of the repricing risk, Fitch views SLM's deposit franchise as weaker than its online bank and regional bank peers. The Stable Outlook reflects the expectation that SLM's credit performance will be consistent with management's cumulative loss forecasts through the cycle. The Outlook also reflects management's ability to execute loan sales at reasonable gains that support share repurchases while maintaining flat asset growth and stable capital ratios (excluding the effects of CECL), consistent profitability, and the maintenance of its leading competitive position in private education lending over the Outlook horizon. SUPPORT RATING AND SUPPORT RATING FLOOR SLM has a Support Rating of '5' and Support Rating Floor of 'NF'. In Fitch's view, SLM is not systemically important, and therefore the probability of sovereign support is unlikely. SLM's IDRs and VRs do not incorporate any support. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Fitch's 'B+' rating on the series B preferred shares reflect their linkage to the VR. The notching reflects the subordinated payment priority and weaker recovery prospects for these instruments, in accordance with Fitch's "Global Bank Rating Criteria". The series B preferred shares are rated three notches below the VR, reflecting the instrument's non-performance and relative loss severity risk profile in addition to their non-cumulative nature. DEPOSIT RATINGS Sallie Mae Bank's uninsured long-term deposit ratings are rated one-notch higher than SLM's Long-Term IDR and senior unsecured debt because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. ESG CONSIDERATIONS SLM's has an ESG Relevance Score of 4 for Exposure to Social Impacts due to its exposure to shift in social or consumer preferences as a result of an institution's social positions, or social and/or political disapproval of core activities which, in combination with other factors, impacts the rating. RATING SENSITIVITIES Positive ratings momentum is unlikely in the near term but could be driven longer term by an improvement in the company's funding profile, with a de-emphasis on brokered deposits in relation to retail deposits, and/or an increase in unsecured debt issuance. Positive momentum could also be supported by more meaningful revenue diversification without a corresponding increase in risk profile, and credit performance that is consistent with management's cumulative loss expectations through a full credit cycle. Ratings could be negatively impacted by rapid asset growth relative to SLM's capital and servicing capacity, meaningful deterioration in portfolio credit quality, a greater emphasis on brokered deposits and secured funding, or legislative actions aimed at reducing demand for private education loans. Negative ratings momentum could also be driven by significant erosion in the importance of the school financial aid office channel for student loan originations that could be detrimental to SLM's franchise, or further increases in loans being refinanced from SLM that would result in meaningful margin pressure and/or weaker credit performance. SUPPORT RATING AND SUPPORT RATING FLOOR Since SLM's Support Rating and Support Rating Floor are '5' and 'NF', respectively, there is limited likelihood that these ratings will change over the foreseeable future. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES The preferred stock ratings are sensitive to any changes in SLM's VR and would be expected to move in tandem. DEPOSIT RATINGS The long- and short-term deposit ratings are sensitive to any change in SLM's Long- and Short-Term IDRs and would be expected to move in tandem. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. SLM's has an ESG Relevance Score of 4 for Exposure to Social Impacts due to its exposure to shift in social or consumer preferences as a result of an institution's social positions, or social and/or political disapproval of core activities which, in combination with other factors, impacts the rating. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. Sallie Mae Bank - LT IDR BB+; Affirmed - ST IDR B; Affirmed SLM Corporation - LT IDR BB+; Affirmed - ST IDR B; Affirmed SOUTHEASTERN METAL: $1.76M Sale of Personal Property to CIA Okayed ------------------------------------------------------------------ Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized Southeastern Metal Products, LLC and affiliates to sell items of personal property described in Exhibit B, including substantially all of the machinery and equipment used by the Debtors in the operation of their businesses, which is currently located at their principal place of business located at 1420 and 1430 Metals Drive, Charlotte, Mecklenburg County, North Carolina, to Cincinnati Industrial Auctioneers, Myron Bowling Auctioneers, Inc. and PPL Acquisition Group XI, LLC ("CIA"), for a total purchase price of $1.76 million, pursuant to the terms and conditions of their Asset Purchase Agreement. The sale of the Personal Property Assets is free and clear of all Liens, Claims, Encumbrances and Interests, with all such liens, claims, encumbrances and interest, if any, attaching to the proceeds of the sale. The Debtors are authorized and directed to pay, or cause to be paid, to Fairview Loans IV, LLC the proceeds of the sale of the Personal Property Assets up to the full amount of Fairview Loans IV's claim in cash at the closing of the sale of the Personal Property Assets, subject, however to a reservation for payment of the KEIP obligations that become due. Notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 7062, 9014, or otherwise, the Order will be immediately effective and enforceable upon its entry. Asset Sales, Inc. is approved as the back-up bidder in the amount of $1.75 million. In the event that CIA fails to timely close on the purchase of the Personal Property Assets in accordance with the Asset Purchase Agreement, the Debtors may close on the sale of the Personal Property Assets to Asset Sales. CIA (or in the event that CIA fails to timely close on the sale of the Personal Property Assets, Asset Sales) will be entitled to a license to use the real estate sold by the debtor Southeastern Metal Products, LLC pursuant to Order of the Court entered contemporaneously therewith for the purpose of preparing for and conducting an auction sale of the Personal Property Assets and permitting ultimate purchasers of the Personal Property Assets to remove the such Personal Property Assets from the Real Estate, to and including Sept. 30, 2020. In accordance with section 1146(a) of the Bankruptcy Code, the sale of the Personal Property Assets pursuant to the Order will be free and clear of any stamp tax or similar tax as the sale is in furtherance of the Debtors' chapter 11 plan which as confirmed by Order of the Bankruptcy Court simultaneously with the entry of the Order. A copy of the Agreement is available at https://tinyurl.com/yd2zec7u from PacerMonitor.com free of charge. About Southeastern Metal Products Southeastern Metal Products LLC is a contract manufacturing company that specializes in fabrication and stampings for various industries including telecommunications, transportation, appliance and health and safety industries. Southeastern Metal Products and its affiliates SEMP Texas, LLC and Hospital Acquisition LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10998) on May 6, 2019. At the time of the filing, Southeastern Metal disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. SEMP Texas had estimated assets of less than $1 million and liabilities of less than $500,000 while Hospital Acquisition had estimated assets of less than $50,000 and liabilities of less than $50,000. The Debtors hired Weir & Partners LLP as counsel; Finley Group as financial advisor; and Omni Management Group as claims and noticing agent. Andrew Vara, acting U.S. trustee for Region 3, appointed an official committee of unsecured creditors on May 20, 2019. Lowenstein Sandler LLP is the committee's legal counsel. SOUTHWEST AIRLINES: Offers Generous Buyout Deals to Trim Workforce ------------------------------------------------------------------ Kyle Arnold, writing for Dallas News, reports that Dallas-based airline company Southwest Airlines offered the most generous buyout deals in history to avoid furloughs and layoffs in the fall of 2020. In a document shared with employees on June 1, 2020, Southwest detailed early retirement and extended time off packages designed to "ensure the long-term success" of the airline. Most Southwest employees with more than 10 years at the company would get a year's pay and four years of flight privileges if they opt for early retirement. Pilots would get paid about two-thirds of their average salary for five years or until they hit 65, whichever comes first. Early retirees would also get a year of company-paid health insurance. Southwest and other airlines are in a race to cut costs before Sept. 30, 2020, when obligations under payroll protections grants from the stimulus package end. Until then, airlines that took grants and loans can't lay off employees, cut salaries or furlough workers. But airline executives don’t expect traffic to rebound for at least a year. Airlines have also agreed to suspend dividends, share buybacks and limit executive pay. "Even with these offerings, we can't guarantee that we won't have to lay off or furlough employees in the future," the Southwest document said. "We are offering this program to take voluntary steps first." Employees have until July 15, 2020 to apply for the programs. Other airlines, including Fort Worth-based American, are making similar pleas to employees to take voluntary time off and early retirement. Last week, American said it would reduce its management and support staff by 30%. Eligibility for Southwest's leave and retirement programs will depend on how many workers the company needs in each workforce group. Southwest Airlines CEO Gary Kelly has said air traffic will probably be down 30%. "Heading into the fall, we have planned to reduce our capacity by about 30%," the document said, echoing comments by Kelly. "While this number may change, that is our current plan. While overstaffing isn't tied 100% to capacity levels, it would be fair to assume that we are overstaffed in many areas at a similar percentage." Air carriers have taken a brutal hit from the COVID-19 pandemic. Traffic is down about 80% year-over-year since the beginning of March and fell by as much as 96% in early April 2020, according to the Transportation Security Administration. Even with a recovery in the last few weeks, passenger traffic was still down about 88% last weekend compared to the same weekend last year. "It's a very dynamic situation," said Jon Weaks, head of the Southwest Airlines Pilots Association. "Hopefully, this gives them some flexibility going into the new normal." Mr. Weaks said the union is still evaluating the deal, but many pilots are showing interest and working through calculations to see if it's beneficial for them. SWAPA hasn't been told exactly how many pilots the company needs to take the deal. Southwest, which has about 60,000 employees, is also offering an extended time away plan for 6, 12 and 18 months that would give employees 50% pay along with health and flight benefits. The plan for pilots would pay about 60% of their regular pay during the extended leave program. Workers with less experience would get a smaller payout for both the early retirement and extended time off program. Southwest has parked more than 400 of its 750 airplanes due to the COVID-19 pandemic, and is reducing capacity on planes by a third in order to give passengers more room for social distancing. Still, Southwest is planning an aggressive schedule for November 2020 and December 2020 to try to capture market share from competitors. "Given our current situation, my No. 1 goal is to protect the future of Southwest Airlines and do my best to provide job security for our employees," Kelly said in a letter in the early retirement and leave document. "It is clear that for the near future we are currently overstaffed. It’s imperative that we bring our employee numbers down, voluntarily." Kelly wrote that the airline can't control the duration of the pandemic, the speed of economic recovery or the return of customer demand. "We can take meaningful measures to cut our spending and conserve cash as much and as quickly as possible," he said. About Southwest Airlines Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. Southwest Airlines Co. was founded in 1967 and is based in Dallas, Texas. STAGE STORES: Hires A&G Realty as Real Estate Consultant -------------------------------------------------------- Stage Stores, Inc. and Specialty Retailers, Inc. seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ A&G Realty Partners, LLC as their real estate consultant. The firm will provide the following services: (a) consult with Debtors to discuss their goals, objectives and financial parameters in relation to their leases; (b) provide advice and guidance related to individual financial and non-financial lease restructuring opportunities and risks based upon Debtors' goals and objectives; (c) review lease abstracts and other diligence provided by Debtors and provide a portfolio rent reduction estimate and other real estate analysis; (d) negotiate with landlords to modify lease terms; (e) if requested by Debtors, negotiate with landlords to obtain early termination rights; (f) if requested by Debtors, market the leases designated for sales; (g) assist Debtors with their strategy for communications to landlords; (h) prepare reports to evaluate proposed lease restructurings and track performance as agreed; (i) coordinate with Debtors' internal team and legal counsel to effectuate lease amendments and other necessary documents; and (j) assist in the marketing and sale of Debtors' distribution center. A&G will be compensated as follows: (a) Early Termination Rights. For each early termination right obtained by A&G, the firm will be paid a fee of 1/4 of one month's gross occupancy cost per lease. (b) Monetary Lease Modifications. For each monetary lease modification obtained by A&G, the firm will be paid a fee in the amount of 3 percent of the "occupancy cost savings" per lease. (c) Lease Sales. A&G will be paid a fee of 4 percent of the gross proceeds for each lease sale consummated. (d) Landlord Consents. If requested by Debtors, for each landlord consent obtained by A&G to extend Debtors' deadline to assume or reject a lease as a part of their Chapter 11 case, the firm will be paid a fee in the amount of $300 per lease. (e) Distribution Center Sale. A&G will get 3 percent of the gross proceeds from the sale of the distribution center. Andrew Graiser, co-president of A&G, 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: Andrew Graiser A&G Realty Partners, LLC 445 Broadhollow Road, Suite 410 Melville, NY 11747 Telephone: (631) 465-9506 Email: andy@agrep.com About Stage Stores Stage Stores, Inc. (SSI) and its affiliates 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. It operates approximately 700 stores across 42 states. Stage Stores' department stores predominately serve small towns and rural communities and its off-price stores are mostly located in mid-sized Midwest markets. Visit http://www.stagestoresinc.com for more information. Stage Stores and affiliate, Specialty Retailers, Inc., sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32564) on May 10, 2020. As of Nov. 2, 2019, Stage Stores had total assets of $1,713,713,000 and total debt of $1,010,210,000. The Hon. David R. Jones is the case judge. Debtors tapped Kirkland & Ellis LLP as bankruptcy counsel; Jackson Walker L.L.P. as local bankruptcy counsel; PJ Solomon, L.P. as investment banker; Berkeley Research Group, LLC as restructuring advisor; and A&G Realty Partners, LLC as real estate consultant. Gordon Brothers Retail Partners, LLC manages Debtors' inventory clearance sales. Kurtzman Carson Consultants, LLC is Debtors' claims agent. Cooley LLP and Cole Schotz P.C. represent the committee of unsecured creditors appointed in Debtors' Chapter 11 cases. STONE TRUCKING: Shuts Operations, Lays Off 51 Workers ----------------------------------------------------- Noi Mahoney, writing for FreightWaves, reports that Stone Trucking Company said it will shut down operations and lay off 51 employees as a result of the pandemic. Citing economic challenges tied to the "coronavirus natural disaster," Stone Trucking said it will shut down and lay off 51 employees in Tulsa, Oklahoma. Company officials cited the coronavirus' impact on the oil and gas industry as the reason for the closure, as well as the "recent failure of an opportunity to sell the company to allow for continued operations." "We were unable to provide more advance notice of this action because these circumstances were not reasonably foreseeable until recently when the full scope of COVID-19's impact upon our business became clear and the sale of the business fell through," said Stephen Royce, Stone Trucking's executive vice president of human resources, according to a WARN notice filed with the Oklahoma Office of Workforce Development. The 75-year old trucking company, known for its green trucks, has 73 drivers and 95 trucks, according to the Federal Motor Carrier Safety Administration's SAFER website. It's not clear if the truck drivers were employees, or owner-operators contracted to the company. Stone Trucking's closure will be finalized by July 3, 2020. About Stone Trucking Company Stone Trucking Co. is a Kiefer-based logistics and freight transportation service provider for energy corporations in the U.S., Mexico and Canada founded in 1945. It offers premier legal flatbed, oversize, and heavy haul carrier services, escort services with experienced in-house drivers operating late-model pilot vehicles, customized on-site trailer fabrication and storage facilities equipped with cranes and forklifts to accommodate the needs of customers by maximizing their shipping and real estate schedule. Along with the facility in Tulsa, the company also lists operations in Arkansas and Texas, according to its website. SVENHARD'S SWEDISH: Court Denies Bid for Exclusivity Extension -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California issued an order denying Svenhard's Swedish Bakery's Motion for an extension of the exclusivity period for filing a Chapter 11 Plan and disclosure statement. About Svenhard's Swedish Bakery Svenhard's Swedish Bakery is a privately held company in Fresno, Calif., that is primarily engaged in manufacturing fresh and frozen bread and other bakery products. Svenhard's Swedish Bakery filed a Chapter 11 petition (Bankr. E.D. Cal. Case No. 19-15277) on Dec. 19, 2019. In the petition signed by David Kunkel, chief operating officer, Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Rene Lastreto II is the presiding judge. The Debtor tapped Zolkin Talerico LLP as bankruptcy counsel, and Gary Garrigues Law Firm and Cera LLP as special litigation counsel. TECHNIPLAS LLC: Committee Hires Akin Gump as Counsel ---------------------------------------------------- The Official Committee of Unsecured Creditors of Techniplas, LLC, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Akin Gump Strauss Hauer & Feld LLP, as co-counsel to the Committee. Techniplas, LLC requires Akin Gump to: (a) advise the Committee with respect to its rights, duties and powers in the Chapter 11 Cases; (b) assist and advise the Committee in its consultations and negotiations with the Debtors relative to the administration of the Chapter 11 Cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure and in negotiating with holders of claims and equity interests; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and their insiders, and of the operation of the Debtors' businesses; (e) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization or liquidation for the Debtors and accompanying disclosure statements and related plan documents; (f) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the Chapter 11 Cases; (g) represent the Committee at all hearings and other proceedings before this Court; (h) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety, and to the extent deemed appropriate by the Committee, support, join or object thereto; (i) advise and assist the Committee with respect to any legislative, regulatory or governmental activities; (j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (k) assist the Committee in its review and analysis of all of the Debtors' various agreements; (l) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any matter related to the Debtors or the Chapter 11 Cases; (m) investigate and analyze any claims against the Debtors' non-debtor affiliates; and (n) perform such other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. Akin Gump will be paid at these hourly rates: Partners $995 to $1,995 Senior Counsels/Counsels $735 to $1,510 Associates $535 to $960 Paralegals $125 to $455 Akin Gump 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: (a) Akin Gump did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement. (b) No rate for any of the professionals included in this engagement varies based on the geographic location of the bankruptcy case. (c) Akin Gump did not represent any member of the Committee in connection with these cases prior to its retention by the Committee. (d) Akin Gump expects to develop a prospective budget and staffing plan to comply reasonably with the U.S. Trustee's request for information and additional disclosures, as to which Akin Gump reserves all rights. The Committee has approved Akin Gump's proposed hourly billing rates. The Akin Gump attorneys and paraprofessionals staffed on the Chapter 11 Cases, subject to modification depending upon further development. Arik Preis, partner of Akin Gump Strauss Hauer & Feld 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 (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. Akin Gump can be reached at: Arik Preis, Esq. Kevin Zuzolo, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP Bank of America Tower New York, NY 10036 Telephone: (212) 872-1000 Facsimile: (212) 872-1002 E-mail: apreis@akingump.com kzuzolo@akingump.com About Techniplas, LLC Techniplas, LLC, headquartered in Nashotah, Wisconsin USA, is a privately held producer of technical plastic components for the automotive, transportation and electrical industry. Techniplas is specialized in thermoplastic and thermo-set molding and has expertise in metal-to-plastic conversion, light weighting and tool design. Techniplas employed about 2,357 employees in its operations as of December 2018 and generated revenue of $529 million in 2018. As of December 2020, Techniplas had total assets worth $258.6 million and liabilities worth $331 million, according to court filing. Techniplas, LLC, and its affiliates sought Chapter 11 protection (D. Del. Lead Case No. 20-11049) on May 6, 2020. The Debtors were estimated to have $100 million to $500 million in assets and liabilities. The Debtors tapped WHITE & CASE LLP as counsel; FOX ROTHSCHILD LLP as restructuring counsel; MILLER BUCKFIRE & CO., LLC as investment banker; FTI CONSULTING, INC., as restructuring advisor; and EPIQ CORPORATE RESTRUCTURING, LLC, as claims agent. The U.S. Trustee for Regions 3 and 9 appointed a committee to represent unsecured creditors in the Chapter 11 cases of Techniplas, LLC and its affiliates. Potter Anderson & Corroon LLP, and Akin Gump Strauss Hauer & Feld LLP, as co-counsel; Berkeley Research Group, LLC, as financial advisor. TECHNIPLAS LLC: Committee Hires Potter Anderson as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Techniplas, LLC, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Potter Anderson & Corroon LLP, as co-counsel to the Committee. Techniplas, LLC requires Potter Anderson to: a. provide legal advice regarding local rules, practices, and procedures and providing substantive and strategic advice on how to accomplish Committee goals, bearing in mind that the Delaware Bankruptcy Court relies on Delaware counsel such as Potter Anderson to be involved in all aspects of each bankruptcy proceeding; b. draft, review and comment on drafts of documents to ensure compliance with local rules, practices, and procedures; c. draft, review and revise objections in connection with the Debtors' motions for approval of debtor in possession financing, bidding procedures, and the sale(s); d. draft, review and comment on drafts of any plan and related documents; e. draft, file and serve of documents as requested by Akin Gump Strauss Hauer & Feld LLP; f. prepare certificates of no objection, certifications of counsel, and notices of fee applications; g. print of documents and pleadings for hearings, prepare binders of documents and pleadings for hearings; h. appear in Court and at any meetings of creditors on behalf of the Committee in its capacity as co-counsel with Akin Gump; i. monitor the docket for filings and coordinating with Akin Gump on pending matters that may need responses; j. participate in calls with the Committee and parties-in- interest in the case; k. provide additional administrative support to Akin Gump, as requested; and l. take on any additional tasks or projects the Committee may assign. Potter Anderson will be paid at these hourly rates: Partners $650 to 675 Associates $395 to $435 Paraprofessionals $110 to $290 Potter Anderson 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: No. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Potter Anderson expects to develop a budget and staffing plan to reasonably comply with the U.S. Trustee's request for information and additional disclosures, as to which Potter Anderson reserves all rights. The Committee has approved Potter Anderson's proposed hourly billing rates. Christopher M. Samis, partner of Potter Anderson & Corroon 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 (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. Potter Anderson can be reached at: Christopher M. Samis, Esq. L. Katherine Good, Esq. Aaron H. Stulman, Esq. D. Ryan Slaugh, Esq. POTTER ANDERSON & CORROON LLP 1313 N. Market Street, 6 th Floor Wilmington, DE 19801 Telephone: (302) 984-6000 Facsimile: (302) 658-1192 E-mail: csamis@potteranderson.com kgood@potteranderson.com astulman@potteranderson.com rslaugh@potteranderson.com About Techniplas, LLC Techniplas, LLC, headquartered in Nashotah, Wisconsin USA, is a privately held producer of technical plastic components for the automotive, transportation and electrical industry. Techniplas is specialized in thermoplastic and thermo-set molding and has expertise in metal-to-plastic conversion, light weighting and tool design. Techniplas employed about 2,357 employees in its operations as of December 2018 and generated revenue of $529 million in 2018. As of December 2020, Techniplas had total assets worth $258.6 million and liabilities worth $331 million, according to court filing. Techniplas, LLC, and its affiliates sought Chapter 11 protection (D. Del. Lead Case No. 20-11049) on May 6, 2020. The Debtors were estimated to have $100 million to $500 million in assets and liabilities. The Debtors tapped WHITE & CASE LLP as counsel; FOX ROTHSCHILD LLP as restructuring counsel; MILLER BUCKFIRE & CO., LLC as investment banker; FTI CONSULTING, INC., as restructuring advisor; and EPIQ CORPORATE RESTRUCTURING, LLC, as claims agent. The U.S. Trustee for Regions 3 and 9 appointed a committee to represent unsecured creditors in the Chapter 11 cases of Techniplas, LLC and its affiliates. Potter Anderson & Corroon LLP, and Akin Gump Strauss Hauer & Feld LLP, as co-counsel; Berkeley Research Group, LLC, as financial advisor. TEMPLAR ENERGY: Tapstone Named Stalking Horse Bidder for Assets --------------------------------------------------------------- Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware approved the designation of Tapstone Energy, LLC, as the Stalking Horse Bidder for substantially all assets. Subject to overbid, at the Closing, Tapstone will (a) pay $65 million, plus the Estimated Closing Adjustment Amount, less the Good Faith Deposit and (b) assume, or cause a Buyer Designee to assume, as applicable, the Assumed Liabilities from the Sellers, including the assumption of the obligation to pay to the applicable counterparties of the applicable Assumed Contracts the Cure Costs payable by the Buyer under Section 2.5. The Stalking Horse APA with Tapstone will serve as the Stalking Horse Bid, subject to the terms and conditions set forth in the Stalking Horse APA and the Bidding Procedures Order. In accordance with the Bidding Procedures Order, Tapstone will be deemed a Qualified Bidder for the Assets set forth in the Stalking Horse APA, and the Stalking Horse APA will be deemed a Qualified Bid with respect to such Assets for all purposes. The Debtors are authorized to pay the Termination Fee in an amount equal to $1.95 million (3% of the cash component of the Stalking Horse Purchase Price) as provided in the Stalking Horse APA, subject to the terms and conditions set forth therein, in the Bidding Procedures Order, and the Order. The Debtors are authorized to pay the Expense Reimbursement in an amount equal to all reasonable and documented out-of-pocket expenses incurred by Tapstone in connection with its legal, financial advisory, accounting, and other similar costs, fees, and expenses incurred in connection with the preparation and negotiation of the Stalking Horse APA and the transactions contemplated thereby, up to an aggregate maximum amount of $350,000, as provided in the Stalking Horse APA, subject to the terms and conditions set forth therein, in the Bidding Procedures Order, and in the Order. Any obligation of the Debtors to pay the Termination Fee or the Expense Reimbursement under the terms and conditions set forth in Stalking Horse APA, the Bidding Procedures Order, and the Order will survive termination of the Stalking Horse APA (to the extent provided therein) and, until paid, will constitute an administrative expense of the Debtors under sections 503(b)(1)(A) and 507(a)(2) 503(b) of the Bankruptcy Code. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of the Order will be immediately effective and enforceable upon its entry. The salient terms of the Bidding Procedures are: a. Bid Deadline: July 6, 2020 at 5:00 p.m. (ET) b. Initial Bid: At a minimum, each Bid must have an Aggregate Purchase Price that in the Debtors' reasonable business judgment, after consultation with the Consultation Parties, has a monetary value equal to or greater than the Aggregate Acquisition Consideration, plus the Expense Reimbursement and the Termination Fee (each as defined in the Stalking Horse APA), plus $500,000 in cash or cash equivalents. c. Deposit: 10% of the Aggregate Purchase Price of the Bid d. Auction: If at least one Qualified Bid is received in accordance with the Bidding Procedures with regard to the Assets, the Debtors will be permitted to hold the Auction in accordance with the Bidding Procedures, which Auction will take place on July 9, 2020 at 10:00 a.m. (ET) at the offices of counsel to the Debtors, Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019, or such later time or such other place, including by telephone or video conference, as the Debtors will designate. e. Bid Increments: $500,000 f. Sale Hearing: July 14, 2020 at 10:30 a.m. (ET) g. Sale Objection Deadline: July 7, 2020 at 4:00 p.m. (ET) h. Closing: Aug. 31, 2020 A copy of the Bidding Procedures is available at https://tinyurl.com/y7j67hhn from PacerMonitor.com free of charge. About Templar Energy Templar Energy LLC and its affiliates, founded in 2012, are independent exploration and production companies, with a core focus on the development and acquisition of oil and natural gas reserves in the Greater Anadarko Basin of Western Oklahoma and the Texas Panhandle. Templar Energy and its operating subsidiaries -- http://templar.energy/-- have acquired substantial assets in the Mid-Continent region covering, as of the Petition Date, approximately 273,400 net acres by directly leasing oil and gas interests from mineral owners. Templar Energy LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11441) on June 1, 2020. Templar Energy was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. Guggenheim Securities, LLC is acting as the Company's investment banker, Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel, and Alvarez & Marsal North America, LLC, is acting as financial advisor. Young Conaway Stargatt & Taylor, LLP, is local co-counsel. Kurtzman Carson Consultants LLC is claims agent, maintaining the page http://www.kccllc.net/TemplarEnergy THOR INDUSTRIES: Moody's Alters Outlook on B1 CFR to Stable ----------------------------------------------------------- Moody's Investors Service affirmed its ratings for Thor Industries, Inc., including the company's B1 corporate family rating and B1-PD probability of default rating, as well as the B2 rating on the company's senior secured term loan. The company's speculative grade liquidity rating remains unchanged at SGL-2. The ratings outlook has been changed to stable from negative. RATINGS RATIONALE The B1 CFR balances Thor's significant scale and the company's leading market positions against the cyclical and competitive nature of the RV industry that is highly vulnerable to economic downturns. The rating favorably considers Thor's strong competitive standing in North America and Europe, a portfolio of well-known brands, and the company's recreational vehicle (RV) offering that touches multiple price points and segments. As of April 2020, Moody's-adjusted debt-to-EBITDA was relatively well-positioned at around 2.8x, although Moody's expects near-term earnings headwinds to result in leverage in excess of 3x by the end of the fiscal year ending July 2020. Thor currently faces a volatile and challenging operating environment due to disruptions in consumer spending in the aftermath of the coronavirus. These challenges weighed heavily on financial performance, with Q3 ended April 2020 earnings declining around 75%. Moody's anticipates continued albeit reduced disruptions in consumer RV purchases in Q4, but also notes that prospects for a more stable operating environment in fiscal 2021 appear favorable, given the recent rebound in dealer demand along with comparatively low dealer inventory levels, and assuming a resurgence of the coronavirus outbreak does not occur. The rapid spread of the coronavirus outbreak, the deteriorating global economic outlook, low oil prices and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Notwithstanding some early signs that the adverse impact of the coronavirus outbreak on Thor and the deterioration in credit quality that it triggered may be relatively short-lived and subsiding, the company remains vulnerable to shifts in market demand and consumer sentiment in these unprecedented operating conditions. The stable ratings outlook reflects expectations of more favorable retail trends in the RV market in coming periods, particularly in the US, as well as expectations of a growing backlog that should support a more stable operating environment in fiscal 2021. Expectations of a conservative financial policy along with a continued focus on debt reduction would be required for an upgrade. Given Thor's vulnerability to highly cyclical end markets, Moody's expects the company to maintain credit metrics that are stronger than levels typically associated with companies at the same rating level. A ratings upgrade would involve expectations of a stable RV retail sales environment and would also require maintenance of a good liquidity profile, and a demonstrated ability to generate consistently strong free cash flows coupled with substantial availability under the company's revolver. A weakening of Thor's liquidity profile involving expectations of negative free cash flow, sustained reliance on revolver borrowings or concerns about covenant compliance could result in a ratings downgrade. The loss of a major dealer or the loss of market share, or debt-financed share repurchases or acquisitions over the near-term, could also result in downward ratings actions. Any near-term debt-financed acquisitions or share repurchases would likely cause downward ratings pressure. The following is a summary of its rating actions: Issuer: Thor Industries, Inc. Corporate Family Rating, affirmed B1 Probability of Default Rating, affirmed B1-PD Senior Secured Bank Credit Facilities, affirmed B2 (LGD4) Outlook, changed to Stable, from Negative Thor Industries, Inc., headquartered in Elkhart, Indiana, is a leading designer and manufacturer of recreational vehicles including travel trailers, fifth wheels, specialty trailers, motorhomes, caravans, and campervans. The company primarily operates in North America and Europe and sells its products under brands such as Keystone, Airstream, Heartland, Jayco, Thor Motorcoach, Hymer, and Niesmann Bischoff. Estimated reported revenues for the twelve months ended April 2020 are about $8 billion. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. TOTAL OILFIELD: Seeks to Hire Giddens & Gatton as Legal Counsel --------------------------------------------------------------- Total Oilfield Solutions, LLC seeks approval from the U.S. Bankruptcy Court for the District of New Mexico to employ Giddens & Gatton Law, P.C. as its legal counsel. Giddens & Gatton will provide the following services: (a) advise Debtor regarding all aspects of its Chapter 11 case; (b) prepare a Chapter 11 plan of reorganization and other legal papers; (c) take actions required to effect reorganization under Subchapter 5 of Chapter 11 of the Bankruptcy Code; and (d) provide all legal services necessary for Debtor's continued operation. The firm will be paid at hourly rates as follows: Dave Giddens $350 Chris Gatton $275 Marcus Sedillo $175 Ashley Cook $175 Paralegals $115 Document Clerk $40 The firm received a retainer in the amount of $7,500. Giddens & Gatton and its attorneys do not have any connection with Debtor, its creditors or any other "party-in-interest," according to court filings. The firm can be reached through: George D. Giddens, Esq. Giddens & Gatton Law, P.C. 10400 Academy NE, Suite 350 Albuquerque, NM 87111 Telephone: (505) 271-1053 Facsimile: (505) 271-4848 Email: dave@giddenslaw.com About Total Oilfield Solutions Total Oilfield Solutions, LLC, a Carlsbad, N.M.-based provider of support activities for the mining industry, filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D.N.M. Case No. 20-11198) on June 15, 2020. At the time of filing, Debtor disclosed assets of $1 million to $10 million and estimated liabilities of $100,000 to $500,000. Judge Robert H. Jacobvitz oversees the case. Debtor is represented by Giddens & Gatton Law, P.C. TRENT RIVER: Court Conditionally Approves Disclosure Statement -------------------------------------------------------------- Judge Joseph N. Callaway has ordered that the disclosure statement filed by Trent River Adventures, LLC is conditionally approved. The hearing on confirmation of the Plan is scheduled on Tuesday, July 14, 2020 at 10:00 a.m., in Randy D. Doub United States Courthouse, 2nd Floor Courtroom, 150 Reade Circle, Greenville, NC 27858. July 7, 2020 is fixed as the last day for filing and serving written objections to the Disclosure Statement. July 7, 2020 is fixed as the last day for filing and serving written objections to confirmation of the plan. July 7, 2020 is fixed as the last day for filing written acceptances or rejections of the plan. The enclosed ballot should be completed and filed with the plan proponent on or before that date. On or before June 8, 2020 , the plan proponent must transmit the disclosure statement and the plan referred to above, this order, and official form 14 (ballot for accepting and rejecting the plan), to all creditors. A certificate of service must be filed with the court on or before June 11, 2020 evidencing service. About Trent River Adventures Trent River Adventures, LLC, a company that owns and operates a golf course facility in New Bern, N.C., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 20-00926) on March 3, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Joseph N. Callaway oversees the case. The Law Offices of Oliver & Cheek, PLLC and Lori G. Baldwin, CPA, serve as the Debtor's legal counsel and accountant, respectively. TRI-POINT OIL: Point-of-Sale Location in Colorado Hit by Filing --------------------------------------------------------------- Ken Amundson, writing for Reporter Herald, reports that turmoil in the oil and gas industry has resulted in the closure and bankruptcy filing of a major sales-taxpayer in Loveland, Colorado, Tri-Point Oil and Gas Production Systems. The 95,000-square-foot building at 5100 Boyd Lake Avenue in Loveland now sits empty and is listed for sale or lease with Cushman and Wakefield commercial brokerage. Tri-Point, a Houston-based company, was recruited to Loveland in order to consolidate its Erie and Brighton locations. It manufactured oil and gas separators for customers in Colorado and North Dakota. Tri-Point purchased Leed Fabrication Services in 2016; Leed had been operating in Loveland since 2012. The city of Loveland offered sales-tax rebates in February 2019 to lure the company's point-of-sale location from Erie to Loveland, but the company never collected on the incentives because it had not completed its end of the bargain, said Kelly Jones, city economic development director. Jones said the company did establish Loveland as its point-of-sale location and did pay sales taxes to the city. "It was a huge amount of sales taxes for the city," she said. The original deal documents presented to the City Council anticipated $981,000 in sales-tax collections in 2019 and perhaps as much as $2.5 million in 2020. In return for making Loveland its point-of-sale location, the company was supposed to receive a rebate of one-third of the sales taxes it collected in the first year and one-sixth of its taxes in years two through five. It also was to receive a use-tax waiver worth $35,125 and building-permit fee waivers of $29,126. The company planned to add 24,000 square feet of manufacturing space and 5,000 square feet of executive office space. It said it would add 25 jobs over five years. The exact employee count at the time of closure is not certain, but about a year ago it had 150-160 employees. The Chapter 11 bankruptcy action was filed March 16 in the Texas Southern Bankruptcy Court in Houston, with the company claiming assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. Among the listed creditors are the Larimer County treasurer, $97,817; Pawnee Leasing Corp. of Fort Collins, $24,344; and the city of Loveland, $396,278. The debt to the city stems from an incentive arrangement with Leed Fabrication, which received deferred street improvement fees from the city that had not been repaid as of the date of Tri-Point’s purchase of Leeds. Jones said payment of the fees is in dispute between Leed and Tri-Point. Jones said the city still hopes to collect the fees from Leed, but if the court determines that Tri-Point is responsible, then it becomes part of the bankruptcy. The property at 5100 Boyd Lake Ave. is owned by Monomoy Properties of Loveland, which bought it in September of 2019 for $10.25 million. Personal property on the site owned by Tri-Point is valued by the county at $1.94 million. About Tri-Point Oil and Gas Production Systems Tri-Point Oil & Gas Production Systems, LLC, and its related entities -- https://www.tri-pointllc.com/ -- together form an oil and gas production and processing equipment company headquartered in Houston, Texas. Their services include engineering and design, installation, start-up, and after-market field maintenance to provide custom engineered and configured solutions to upstream and midstream customers. In addition, they provide services including training, on-site service, testing services, and aftermarket maintenance and repair. They also own and operate supply stores, located in the Permian Basin, Mid-Continent, and Rocky Mountain regions. On March 16, 2020, Tri-Point Oil and three affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-31777). In the petitions signed by CEO Jeffrey Martini, Tri-Point Oil was estimated to have $10 million to $50 million in assets and $50 million to $100 million in liabilities. The Hon. David R. Jones is the case judge. Debtors tapped Porter Hedges LLP as legal counsel; Alixpartners, LLP as financial advisor; and Bankruptcy Management Solutions, Inc. (which conducts business under the name Stretto) as claims agent. USA GYMNASTICS: Survivors Object to Disclosure Statement -------------------------------------------------------- Marcia Frederick Blanchette, and approximately 28 other fellow survivors (the "Survivors") filed a joinder and separate statement in support of the objection of the Additional Tort Claimants Committee of Sexual Abuse Survivors to Disclosure Statement for First Amended Chapter 11 Plan of Reorganization Proposed by USA Gymnastics, filed by the Additional Tort Claimants Committee of Sexual Abuse Survivors. On May 19, 2020, the Survivors' Committee filed its objection requesting the Court deny approval of the Disclosure Statement for numerous reasons set forth in the Objection. The Survivors and their counsel listed below support the position of the Survivors' Committee and hereby adopts, joins and incorporates by reference all objections to the Disclosure Statement as set forth in the objection filed by the Survivors' Committee. Attorney for Marcia Frederick Blanchette, et al and 28 other Survivor Claimants: Kimberly A. Dougherty ANDRUS WAGSTAFF, PC 19 Belmont Street South Easton, MA 02375 Tel: (508) 230-2700 Fax: (888) 875-2889 E-mail: kim.dougherty@andruswagstaff.com About USA Gymnastics USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit organization incorporated in Texas. Based in Indianapolis, Indiana, USAG's organization encompasses six disciplines: women's gymnastics, men's gymnastics, trampoline and tumbling, rhythmic gymnastics, acrobatic gymnastics, and group gymnastics. USAG provides educational opportunities for coaches and judges, as well as gymnastics club owners and administrators, and sanctions approximately 4,000 competitions and events throughout the United States annually. More than 200,000 athletes, professionals, and clubs are members of USAG. USAG sets the rules and policies that govern the sport of gymnastics in the United States, including selecting and training the United States gymnastics teams for the Olympics and World Championships. As of the Petition Date, USAG employs 53 individuals, nearly all of whom work for USAG full-time. USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 18-09108) on Dec. 5, 2018. USAG was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The petition was signed by James Scott Shollenbarger, chief financial officer. The Hon. Robyn L. Moberly is the case judge. USAG tapped Jenner & Block LLP as counsel; Hilder & Associates, P.C., as ordinary course counsel; Alfers GC Consulting, LLC, and Scramble Systems, LLC, as business consulting services providers; and OMNI Management Group, Inc. as claims agent. WALKER INVESTMENT: July 15 Deadline to File Disclosures and Plan ---------------------------------------------------------------- Judge Neil P. Olack has ordered that the U.S. Trustee's motion to set the deadline for filing a Disclosure Statement and Plan of Reorganization of Walker Investment Properties, LLC, is granted. The judge ruled that on or before July 15, 2020, the Debtor must file a disclosure statement containing adequate information and file a confirmable plan of reorganization. Attorney for the Debtor: R. MICHAEL BOLEN HOOD & BOLEN, PLLC 3770 HIGHWAY 80 WEST JACKSON, MISSISSIPPI 39209 TEL: (601) 923-0788 E-mail: rmb@hoodbolen.com About Walker Investment Properties Walker Investment Properties, LLC is a privately held real estate investment company in Madison, Mississippi. The company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 19-04313) on Dec. 4, 2019. The petition was signed by Andrew C. Walker, manager/member. At the time of filing, the company was estimated to have assets under $50,000 and liabilities under $10 million. The case is assigned to Judge Neil P. Olack. The company tapped R. Michael Bolen, Esq. at HOOD & BOLEN, PLLC as counsel. WESTERN MIDSTREAM: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Western Midstream Operating, LP's Long-term Issuer Default Rating and senior unsecured rating at 'BB'. The senior unsecured notes have a Recovery Rating of 'RR4', which implies an average recovery in the event of default. Fitch also removed the Rating Watch Negative and assigned a Stable Outlook. The Stable Outlook is primarily driven by the rating upgrade and removal of Occidental Petroleum Corp. (OXY; BB/Stable)'s RWN, WES's largest counterparty, that is expected to contribute approximately 60%-65% of WES's revenue in 2020. The Stable Outlook at WES reflects the overall improved counterparty quality following the positive rating action and revised outlook at OXY. OXY's operational and financial health have a strong bearing on the credit profile of WES given that OXY is the largest counterparty of WES. The ratings affirmation and outlook are also reflective of that expectation that WES's leverage will remain below 5.0x through 2021. Fitch also views that WES has the financial levers including capex and distribution reduction to further deleverage in the forecast years. Fitch recently upgraded OXY's IDR to 'BB' and removed the RWN following OXY's unsecured notes issuance. Fitch believes that OXY's unsecured notes issuance will help bridge OXY's large maturity wall in the absence of material near-term asset sales. Demonstrated capital market access also reduces future event risk around possible liability management exercises, and may also create uplift in the company's deleveraging program. KEY RATING DRIVERS Counterparty Exposure: WES's counterparty risk has improved following the recent rating upgrade at OXY, WES's largest counterparty. WES has a significant customer concentration to OXY, which is expected to contribute approximately 60%-65% of WES's revenues in 2020. Since WES is dependent on OXY for its cash flows and future growth, OXY's operational and financial health have a strong bearing on the credit profile of WES. Despite some uncertainties in the near-term growth outlook, WES's midstream operations will remain strategically important to OXY's production, particularly in the Permian, in Fitch's view. However, Fitch notes that as a gathering and processing company WES is still predominately exposed to non-investment grade counterparties. Rising Leverage and Operational Headwind: Fitch forecasts that WES's leverage will be approximately 4.5x at YE20 and trend to 4.6x-4.8x in 2021. Curtailed Exploration and Production E&P production activities, particularly from its largest counterparty OXY, could further prompt a steeper decline in EBITDA in 2021. WES's operations outside the Permian will remain challenged driven by capital reduction by E&P producer customers under the unfavorable commodity price environment, in Fitch's view. OXY's capex reduction will affect WES's operation in the Denver-Julesburg (DJ) basin, eroding EBITDA in 2020 and 2021. For 2020, WES is expected to generate 37% of its EBTIDA in the DJ basin. Additionally, Fitch forecasts performance in other non-core regions, which comprises approximately 10% of WES 2020 EBITDA, to decline through 2021. Nonetheless, Fitch recognizes that WES has the financial levers including room to further reduce capex and distributions to deleverage in the forecast years. Asset and Contract Profile: Fitch believes that WES will generate close to 98% of its gross margin from fee-based and fixed price contracts in 2020, and historically WES had limited exposure to direct commodity price exposure. WES is also diversified geographically, supported by a blend of contracts with Minimum Volume Commitment and/or Cost of Service components, relative to the more standard requirements contracts prevalent in the gathering industry. For FY 2019, approximately 65% of WES's natural gas throughput was protected by either MVCs or COS. For the same period, approximately 78% of its crude-oil, NGLs, and produced-water throughput were supported by either MVCs or COS. However, Fitch notes that if any of the rates, whether in dollars per actual volumes or dollars per contracted volumes, in these contracts are high relative to the market rate, there is a strong likelihood for WES's E&P customers to consider rejecting these long-term contracts, especially those who are compelled to seek the shelter of bankruptcy. Under short-term contracts, WES risks that pre-petition accounts receivables may not be paid. In its rating case Fitch assumes the economic value of the contracts between OXY and WES remains intact with no renegotiation of contract terms that is deemed materially unfavorable to WES. As of YE 2019, WES also had a long-term weighted average contract life of more than eight years collectively for its gas, crude, and water businesses. WES also has a portfolio of equity investments, including ownership interests in long haul pipelines in the Permian, which should continue to provide stable cash flow in the near term. Fitch believes that the Permian will continue to be the cornerstone of growth for WES. Ownership Uncertainties: Uncertainties around future ownership remains an overhanging issue for WES, as OXY remains committed to lowering its 53.4% limited partnership ownership stake in WES to approximately 50% following WES's recent deconsolidation from OXY's balance sheet. In the long term, the operational alignment between OXY and WES in the Permian remains intact given the good fit between legacy Anadarko's and WES's assets in the basin. However, OXY reeling back legacy Anadarko's historic focus on the DJ basin may materially impede WES's future growth. WES targets growing the company through third-party volumes, but Fitch believes such growth will now be much slower, as upstream customers are becoming increasingly capital disciplined with their production spending under the adverse commodities price environment. Parent Subsidiary Linkage: Fitch determines that the parent-subsidiary relationship does not exist between OXY and WES and considers WES's ratings on a standalone basis. WES was deconsolidated from OXY's balance sheet in January 2020. The limited partnership agreement was amended and significantly expanded unitholders' rights, including the right to remove and replace OXY as the general partner. WES has a separate board of directors and separate management team from OXY. WES is also reported under the equity method of accounting in OXY's financial statements. ESG Considerations: WES has an ESG Relevance Score of 4 for Group Structure and Financial Transparency as the company operates under a somewhat complex group structure as a master limited partnership (MLP). This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY One comparable for WES is EQM Midstream Partners, LP (EQM; BB/Negative). EQM is a G&P company whose ratings are capped by its major E&P customer EQT Corporation (EQT; BB/Negative). In the case of EQT and EQM, Fitch believes that the G&P companies' vulnerability to default is virtually equal to the E&P companies' vulnerability to default. Additionally, EQM's ratings also consider the uncertainties around the Mountain Valley Pipeline project execution as it experiences regulatory and environmental challenges with multiple delays and cost overruns. Fitch believes that WES is better positioned financially relative to EQM in the near term. WES's leverage is projected to be 4.5x and 4.6x-4.8x in 2021, whereas EQM's leverage is forecasted to be 5.9x-6.2x in 2020, and ranging between 4.7x-4.9x by YE 2021 on a consolidated basis, subject to MVP coming online in 2021. In terms of contract mix, both WES and EQM generate a significant amount of cash flow under reservation fee from MVCs from their respective largest counterparties. Another peer with significant concentrated counterparty exposure is Antero Midstream Partners LP (AM; B/RWN). While AM is expected to operate at lower leverage than WES, at around 3.5x-4.0x, its size and asset to business line diversity are more limited. AM is a natural gas G&P company in the Appalachian basin and generates 100% of its cash flow from Antero Resources Corporation (AR; B/RWN). Fitch believes WES is better positioned financially and is more diversified in its business mix relative to EQM and AM. KEY ASSUMPTIONS -- Base case WTI oil price of $32/barrels (bbl) in 2020, $42/bbl in 2021, $50/bbl in 2022 and $52/bbl in 2023 and in the long term; -- Henry Hub natural gas prices of $1.85/thousand cubic feet (mcf) in 2020, $2.45/mcf in 2021, $2.45/mcf in 2022 and in the long term; -- Declining throughput volume and operating performance in segments outside of the Permian through 2021; -- Distribution remains level throughout the forecast years; -- No adverse changes in existing contract terms between WES and its major counterparties that would materially impair WES's expected cash flow; -- Rating case does not assume a significant change in the financial policy due to potential ownership changes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Leverage (total debt-to-adjusted EBITDA) at or below 4.0x and a distribution coverage ratio above 1.1x on a sustained basis, with gross margin remaining above 90% fee-based or fixed priced; -- Asset and business line expansion leading to a more diversified cash flow profile; -- Favorable rating action at OXY may lead to positive rating action for WES, provided the factors driving a rating change at OXY have benefits that accrue to the credit profile of WES. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Leverage as total debt-to-adjusted EBITDA at or above 5.0x and a distribution coverage ratio below 1.1x on a sustained basis; -- Negative rating action at OXY; -- Materially unfavorable changes in contract mix; -- Negative change in law, either new laws, or rulings on old laws, that cause volumetric declines and pushes profitability lower and leverage higher on a sustained basis; -- Adoption of a growth funding strategy which does not include a significant equity component, inclusive of retained earnings. 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 Manageable Liquidity: As of March 31, 2020, WES had approximately $152 million in cash and $125 million in outstanding borrowings and $6.5 million in outstanding LOC, resulting in approximately $1.9 billion available on its $2.0 billion senior unsecured revolving credit facility. Fitch expects that liquidity will remain adequate over the near term. The nearest debt maturity for WES is its $500 million senior unsecured notes due in 2021. In December 2019, WES extended the maturity date of the RCF to February 2025 from February 2024 that WES issued. The credit facility requires that WES maintain a consolidated leverage ratio at or below 5.0x, or a consolidated leverage ratio of 5.5x with respect to quarters ending in the 270-day period immediately following certain acquisitions. WES is currently in compliance with this covenant and Fitch expects it will remain so for the balance of its forecast period. WES also accessed the capital markets in January 2020, issuing $3.2 billion of senior notes across three tranches, which come due in 2025, 2030, and 2050, as well as $300 million of floating rate notes due 2023. The net proceeds from the senior notes and floating rate notes were used to repay the $3.0 billion outstanding borrowings under the term loan facility and outstanding amounts under the RCF. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Driven by the change in OXY's rating 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). WESTERN MIDSTREAM: Moody's Cuts CFR to Ba2, Outlook Negative ------------------------------------------------------------ Moody's Investors Service downgraded Western Midstream Operating, LP's Corporate Family Rating to Ba2 from Ba1, its Probability of Default Rating to Ba2-PD from Ba1-PD and its senior unsecured notes rating to Ba2 from Ba1. Its Speculative Grade Liquidity Rating was unchanged at SGL-2. The outlook is negative. WES Operating's general partner is owned by Western Midstream Partners, LP (WES, not rated), a publicly traded master limited partnership, which also owns a 98% limited partnership interest in WES Operating. Occidental Petroleum Corporation (OXY, Ba2 negative) indirectly owns WES's general partner Western Midstream Holdings, LLC (not rated). "WES Operating's downgrade follows the downgrade of WES's general partner and principal throughput counterparty Occidental Petroleum Corporation (OXY) to Ba2 negative," commented Andrew Brooks, Moody's Vice President. "Although the anticipated trajectory of WES Operating's improving financial metrics remains largely intact, its Ba2 CFR is effectively capped by OXY's Ba2 rating." This rating action concludes the review for downgrade on the ratings initiated on March 20, 2020. Downgrades: Issuer: Western Midstream Operating, LP Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD Corporate Family Rating, Downgraded to Ba2 from Ba1 Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD4) from Ba1 (LGD4) Outlook Actions: Issuer: Western Midstream Operating, LP Outlook, Changed to Negative from Rating Under Review RATINGS RATIONALE WES Operating's CFR is effectively capped by Occidental Petroleum's Ba2 CFR, reflecting the significant majority of WES Operating's throughput and EBITDA that is generated by OXY as its primary customer, and the control OXY exerts as the owner of WES's general partner. OXY continues to contend with a heavy debt burden and weak credit profile following its August 2019 acquisition of Anadarko Petroleum Corporation. While many of its credit attributes could support a higher rating, WES Operating's high customer concentration risk with OXY combined with OXY's controlling ownership of WES's general partner has historically limited its rating to that of Anadarko as the former owner of its general partner, and now OXY. Recent amendments to foundational agreements granting greater operating autonomy to WES which permitted OXY to deconsolidate WES for financial reporting purposes, grant greater operating autonomy to WES, which could help it further grow third-party throughput and diversify the extent of customer concentration it has with OXY. WES Operating's credit risks include its reliance on OXY as its primary customer, and its indirect exposure to weak commodity prices which will continue to pressure WES Operating's throughput volumes. Supporting its credit profile, WES Operating has long term fee-based natural gas and crude oil gathering and processing, and water handling contracts with an average life approximating nine-years, with 65% of natural gas and 78% of liquids contracts backed by either minimum volume commitments or cost-of service contract constructs. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil and natural gas prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact of these combined shocks on OXY and the deterioration in credit quality it has triggered as WES Operating's principal contract counterparty, leaving them vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. Moody's expects that WES Operating will maintain good liquidity into 2021, consistent with its SGL-2 Speculative Grade Liquidity rating, reflecting the available borrowing capacity under its $2 billion unsecured bank revolving credit facility. At March 31, $125 million was outstanding under the revolving credit facility. The revolver has a scheduled February 2025 maturity date ($100 million will mature in February 2024). The revolving credit facility is unsecured and has a financial maintenance covenant limiting debt/ EBITDA to 5x. Moody's expects WES Operating to remain in compliance under the covenant, although further debt reduction and EBITDA growth would help build additional headroom for coverage which appears limited as of March 31. January's $3.5 billion notes issue repaid the partnership's $3 billion term loan that was scheduled to mature in December 2020. WES Operating's next scheduled debt maturity is its $439 million 5.375% senior notes issue due in June 2021. To further reinforce its liquidity position, WES announced in May a 50% cut in its distribution, and a 45% reduction in 2020's capital spending from prior guidance. Together with $75 million of planned operating cost savings, these measures will reduce WES's annual cash outflow by about $1.0 billion. Pro forma for these savings, Moody's expects WES to be modestly cash flow positive after distributions on a run rate basis, with excess cash directed at debt reduction. WES Operating's negative outlook reflects OXY's negative outlook, a function of OXY's weak financial metrics and the challenges it confronts as it addresses its near-term debt maturities in a weak oil and gas market. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS WES Operating's CFR could be downgraded if OXY's CFR is downgraded. WES Operating's Ba2 CFR could also be downgraded if its debt/EBITDA rises above 5.5x or if distribution coverage approaches 1x. In order for WES Operating to be upgraded, OXY's CFR would have to be upgraded which is unlikely in the near-term given the challenge of low oil prices and its corresponding negative outlook. An upgrade would also be conditioned upon WES Operating's leverage falling below 4.5x. The principal methodology used in these ratings was Midstream Energy published in December 2018. A 98% limited partner interest in WES Operating is owned by Western Midstream Partners, LP, a publicly traded MLP. WES Operating provides midstream energy services primarily to OXY as well as other third-party oil and gas producers and customers. WES also owns a 100% equity interest in Western Midstream Operating GP, LLC, which holds the non-economic general partner interest in WES Operating. OXY owns Western Midstream Holdings, LLC, WES's general partner. Western Midstream Partners is headquartered in The Woodlands, Texas. WEX INC: Moody's Affirms Ba2 CFR, Outlook Remains Negative ---------------------------------------------------------- Moody's Investors Service affirmed WEX Inc.'s (WEX) Ba2 corporate family, long-term senior secured debt, and senior secured bank credit facility ratings. The issuer outlook remains negative. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. Moody's regards the coronavirus outbreak as a social risk under its environmental, social and governance (ESG) framework, given the substantial implications for public health and safety. The actions reflect the impact on WEX of the breadth and severity of the shock on WEX's earnings, leverage and cash flow. Affirmations: Issuer: WEX Inc. Corporate Family Rating, Affirmed Ba2 Senior Secured Bank Credit Facility, Affirmed Ba2 Senior Secured Regular Bond/Debenture, Affirmed Ba2 Outlook Actions: Issuer: WEX Inc. Outlook, Remains Negative RATINGS RATIONALE The ratings affirmation follows WEX's announcement on 29 June 2020 that Warburg Pincus had agreed to invest $400 million through a private placement, which includes a combination of $90 million in common shares and $310 million in convertible unsecured notes. Following the completion of the transaction, Warburg Pincus will own approximately 4.7% of WEX's common shares on a as-converted basis [1]. Concurrently, WEX announced an amendment to the terms and conditions of its existing credit facility which will allow for unlimited cash netting for the purpose of calculating its net debt to EBITDA financial covenant upon closing of the private placement, from $125 million prior to the amendment [2]. Moody's has assessed that both the equity increases and amendment to its credit facilities are positive developments for WEX's standalone credit profile but have no immediate implications for the ratings, which were affirmed at the current levels. More specifically, these developments will reduce the risk of a covenant breach under WEX's credit agreement and will allow WEX to more comfortably utilize part of its revolving credit facility, if needed, to complete the pending eNett International (Jersey) Limited (eNett) and Optal Limited (Optal) acquisition, if it does ultimately take place. WEX had $768.7 million in availability under the revolver as of 31 March 2020. WEX also has backstop financing commitments in place for the acquisition with certain existing lenders with Bank of America as lead arranger, which includes a $752 million term loan B and a $600 million secured bridge loan. Nevertheless, WEX's core fuel and travel payments processing and account servicing businesses remain under pressure because of declining volumes amid the coronavirus outbreak, which Moody's expects to pressure EBITDA and result in higher leverage over the next 12-18 months, driving the negative outlook. These pressures are mitigated by the benefits to creditors from the company's other businesses, which include non-travel related corporate payments and health and employee benefits payment processing and account servicing. WEX contends that it is not required to complete the eNett and Optal acquisition, first announced in January 2020, because the effects of the coronavirus outbreak constitute a material adverse effect (MAE) under the purchase agreement governing the transaction. WEX's interpretation of the MAE clause is being contested by the sellers and is awaiting a resolution in the United Kingdom. eNett is a provider of business-to-business (B2B) payments solutions to the travel industry primarily in the Europe and Asia Pacific regions and Optal optimizes B2B transactions. Currently, a large majority of Optal's revenues comes from services provided to eNett. eNett and Optal's businesses are also negatively impacted by the substantial challenges facing the global travel industry. Separately, WEX has announced amendments to its credit facility allowing for unlimited cash netting for the pruposes of calculating of its net debt / EBITDA financial covenant, provided the $400 million private placement is completed. If for whatever reason, WEX is unable to issue at least $300 million in unsecured notes (which would include the planned unsecured convertible note issuance), the amended credit agreement will allow for up to $250 million of cash netting if it does not complete the eNett and Optal acquisition and $400 million if it does ultimately acquire the two companies. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, a ratings upgrade is unlikely over the next 12-18 months. However, the rating could be upgraded if WEX were to improve profitability to a level whereby net income to assets exceeded 3% on a sustainable basis. Increased business scale and diversification, and consistent demonstration of conservative financial policies, such as managing to a company-reported bank covenant net debt/EBITDA to remain between 2.5x to 3.5x absent an acquisition, would also be positive for the ratings. The outlook could return to stable if the company's bank covenant net debt to EBITDA falls and remains below 5.0x, and begins to trend towards the company's target range of 2.5x and 3.5x. If WEX is required to complete the eNett and Optal acquisition, leverage will likely remain elevated in the medium term. The ratings could be downgraded if the company were to increase materially its leverage, evidenced by the company-reported bank covenant net debt / EBITDA above 5.0x that Moody's expects to persist for four or more quarters, or if the company-reported bank covenant net debt / EBITDA were to rise above 5.5x, or 5.75x if the eNett and Optal acquisition closes. In addition, a ratings downgrade could be prompted if the company took any actions that would increase leverage or harm its liquidity, such as undertake any further debt-financed acquisitions. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. WINNEBAGO INDUSTRIES: Moody's Alters Outlook on B2 CFR to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed most of its ratings for Winnebago Industries, Inc., including the company's B2 corporate family rating and B2-PD probability of default rating. Concurrently, Moody's assigned a B2 rating to the company's new senior secured notes due 2028. Proceeds from the notes will be used to repay the existing senior secured term loan and to fund cash to the balance sheet. The ratings on the term loan will be withdrawn upon paydown of the facility. The Speculative Grade Liquidity rating remains unchanged at SGL-2. The ratings outlook has been changed to stable from negative. RATINGS RATIONALE The B2 CFR broadly reflects the highly cyclical nature of the RV and motorboat industry and a competitive operating environment with limited barriers to entry against Winnebago's strong brand name and well-established market position. Moody's recognizes Winnebago's track record of strong execution, earnings growth and debt reduction, and a history of deleveraging after previous debt-financed acquisitions. Winnebago currently faces a difficult operating environment due to disruptions from the coronavirus pandemic, and Moody's anticipates a continuation of sales and topline pressures through the end of the fiscal year ending August 2020. Furthermore, the risk of a second wave of the pandemic remains elevated and the potential for additional disruptions to consumer spending, and RV retail sales in particular, remains very real. That said, over the last eight weeks, there has been a rebound in dealer demand and this coupled with much improved backlog and comparatively low dealer inventory levels appears to bode well for a more stable demand environment in fiscal 2021. The rapid spread of the coronavirus outbreak, the deteriorating global economic outlook, low oil prices and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Notwithstanding some early signs that the adverse impact of the coronavirus outbreak onWinnebago and the deterioration in credit quality that it triggered may be relatively short-lived and subsiding, the company remains vulnerable to shifts in market demand and consumer sentiment in these unprecedented operating conditions. The stable ratings outlook reflects recent growth in Winnebago's backlog that has been pronounced, as well as increased demand from RV dealers, considerations that should support a more stable operating environment in fiscal 2021. In light of the high degree of cyclicality inherent in Winnebago's end markets, Moody's expects the company to maintain key credit metrics that are meaningfully stronger than levels typically associated with companies at the same rating level. Consideration for a ratings upgrade could be warranted if retail RV registrations and/or wholesale deliveries stabilize and grow modestly over the next few quarters. A larger and more diversified product offering that reduces the cyclicality of the overall business would be constructive to any prospective consideration of higher ratings, as well. A ratings upgrade would require maintenance of a good liquidity profile and a demonstrated ability to generate consistently strong free cash flows coupled with substantial availability under the revolver. A weakening liquidity profile involving increased reliance on the company's asset-backed revolver or expectations of negative free cash flow would pressure the ratings downward. Sales or earnings pressure from the coronavirus outbreak beyond what is already contemplated would also result in downward rating pressure. The loss of a key dealer or the erosion of market share, expectations of a meaningful weakening of retail demand, debt-financed acquisitions, or any share buybacks over the near-term could also result in lower ratings. The following is a summary of its rating actions: Issuer: Winnebago Industries, Inc. Corporate Family Rating, affirmed B2 Probability of Default Rating, affirmed B2-PD Senior Secured Notes due 2028, assign B2 (LGD3) Senior Secured Term loan due 2023, no action -- to be withdrawn at close Outlook, changed to Stable from Negative Winnebago Industries, Inc., headquartered in Forest City, Iowa, is a leading manufacturer of RVs used primarily in leisure travel and outdoor recreational activities. Winnebago manufactures a variety of motor homes, travel trailers and fifth wheel trailers, as well as recreational powerboats. Revenues for the twelve months ended May 2020 were approximately $2.1 billion. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. WOK HOLDINGS: Fitch Assigns CCC+ IDR & Rates Secured Loans CCC+ --------------------------------------------------------------- Fitch Ratings has assigned a Long-Term Issuer Default Rating of 'CCC+' to Wok Holdings Inc., operator of the P.F. Chang's chain of restaurants. Fitch has also assigned a 'CCC+'/'RR4' rating to the company's senior secured credit facility including its $55 million revolver and $430 million term loan. PFC's rating reflects the company's good niche positioning and leading market position in the full-service Asian category, as well as its higher financial leverage, smaller scale relative to other large casual chain dining concepts and secular challenges within the casual dining segment that have been exacerbated by the coronavirus pandemic. PFC has relatively good system health supported by a better than average brand perception with broad appeal across most consumer demographics, average unit volumes that are at least on par with peers and same-store sales performance in-line with the casual dining segment but a lower Fitch-calculated EBITDA margin of 6.4% in 2019 compared with some of its peers that have margins in the mid-teens range. Fitch estimates the company has around $29 million of liquidity pro forma a $10 million loan it received pursuant to the CARES Act. While Fitch views this as adequate, liquidity could become stressed if the impacts of the coronavirus pandemic last longer than anticipated. KEY RATING DRIVERS Leading Asian Market Share: PFC had approximately $900 million in revenue in 2019 across 216 company-operated stores in 39 states across the U.S. and 99 franchise locations in 23 countries. It has the leading market position in the U.S. full-service Asian restaurant category, a segment that has been growing faster than the overall casual dining space. The menu offering has evolved to increase consumer appeal to a broader demographic by expanding approximately one-third of the menu options from Chinese into other Asian cuisines, with brand messaging focused on fresh ingredients made from scratch. PFC has relatively good system health supported by average unit volumes that are at least on par or higher when compared with peers and SSS performance in line with the casual dining segment that experienced low single-digit secular declines related to guest traffic volumes. Coronavirus Pandemic Impact: Fitch expects the impact on revenues for the consumer discretionary sector from the coronavirus pandemic to be unprecedented as closures of restaurants severely depress sales. Numerous unknowns remain, including the length of the outbreak; the time frame for a full reopening of restaurant locations and the cadence at which it is achieved; and the economic conditions exiting the pandemic, including unemployment and household income trends, government support of business and consumers, and the impact the crisis will have on consumer behavior. States began restricting dine-in service in mid-March 2020, resulting in PFC reporting 1Q20 SSS down 12.5% as early strength during the quarter was quickly erased by the closure of dining rooms toward quarter end. Widespread closures remained in place through April, with select states beginning to allow dine-in service with restrictions as early as May, and other states slowly following suit. Fitch expects 2Q20 SSS to be down over 40%, as the impact of dining room closures is only partially offset by growth in off-premise transactions. Fitch expects SSS declines to moderate to around 20% in 3Q20 and remain down around 10% in 4Q20 due to lingering pandemic effects and the impact of the resulting consumer downturn. Fitch expects significant growth in 2021 against a weak 2020, but expects total 2021 sales could remain 8%-10% below 2019. Given the typical timing of a consumer downturn of four to six quarters, revenue trends could accelerate somewhat exiting 2021, yielding 2022 as a growth year. Assuming this scenario, Fitch expects PFC's revenue to decline around 24% in 2020, with EBITDA down around 27%. Fitch expects revenue to rebound around 20% in 2021, with EBITDA rising around 38% to $58 million, with 2021 revenues around 8% below 2019 and EBITDA around flat. In response to the pandemic, PFC closed dining rooms in line with state regulations, significantly reduced capex to preserve cash flow and decreased corporate overhead by instituting pay cuts at the executive level while halting travel and consulting expenses. The company notified landlords they would not be paying rent and negotiated deferrals for a significant portion of their 2Q20 commitments. They optimized restaurants for off-premise dining by reducing and furloughing restaurant staff, adjusting menus and cutting non-essential restaurant expenses. Leverage to Remain Elevated, Liquidity a Concern: Fitch calculates adjusted leverage (capitalizing rents at 8.0x) at 7.6x for 2019. Leverage in 2020 is expected to rise to around 9.0x, as the pandemic temporarily depresses EBITDA and causes increased debt levels to fund cash burn. As the impact of the pandemic fades, Fitch expects leverage to return below 8.0x in 2021, with further improvement to around 7.0x in 2022 as the U.S. economy gains strength exiting the recession. With the revolver completely utilized at quarter end, including $27.3 million of drawings and $27.7 million in LOC, liquidity at the end of 1Q20 comprised PFC's cash balance of $19.1 million. However, subsequent to quarter end, the company received a $10 million loan pursuant to the Coronavirus Aid, Relief and Economic Security Act. Fitch's base case forecast does not anticipate a need for further liquidity and the company does not have any debt maturities prior to 2024, but Fitch views the company's liquidity as tight considering the high degree of uncertainty due to the coronavirus and the economic slowdown expected to follow. Fitch acknowledges the equity sponsors could provide additional support if required. Focus on Off Premise Proves Timely: Following their purchase of PFC in early 2019, TriArtisan Capital Advisors LLC and Paulson & Co. Inc. installed a new management team, including a new CEO and CFO who identified off-premise as a major opportunity. The effort began to take shape in 3Q19 as the company hired a new head of OPD, launched a mobile app and conceived an express restaurant format called "P.F. Chang's To Go," which would only offer takeout, catering and delivery. The company optimized the layout of existing restaurants to facilitate takeout and delivery and expanded partnerships with third-party delivery companies to broaden its reach. The company achieved quick success with OPD, which grew as a percentage of sales to 23% in 2019 from 18% in 2018, with pre-coronavirus expectations of continued growth to 26% in 2020. As the company was forced to close its dining rooms due to the pandemic starting in mid-March, its strategy to expand its OPD offering proved timely, allowing the company to retain a greater percent of sales, with PFC expecting 2Q20 sales to be down around 44% despite having most of its dining rooms closed for the bulk of the quarter. Remodels and Brand Relaunch Show Promise Stemming Weakness: Company data suggests PFC's SSS and traffic were lagging the industry for the six quarters ended 1Q19. Adjustments to the marketing strategy and a focus on delivery helped flip relative performance to positive in 2Q19, while the initiation of a brand relaunch focused on enhancing the dine-in experience accelerated performance relative to the industry in 2H19 into 2020. The company reported a 410bps positive spread to the upscale casual segment in customer traffic in 3Q19 and positive 6% SSS in January. While early results of the brand relaunch are positive, it is unclear whether longer-term impacts of the pandemic will disrupt the company's momentum and whether the company will have the resources to pursue remodels at the same pace given cash flow pressures from the slowdown. Cost Controls Should Benefit Margins: Fitch-calculated EBITDA margins of 6.4% for 2019 are well below casual dining peer Darden Restaurants, Inc. (BBB-/Negative) at 14.7% for the year ended May 2019. Under new management, PFC has taken steps to capitalize on cost efficiencies, including optimizing its menu and implementing new systems and processes to manage inventory, waste and labor. While Fitch-calculated EBITDA has yet to reflect the benefits of these actions due to the upfront costs involved, Fitch expects the impact of the measures to be more visible in 2021 when the effect of the pandemic on operations begin to dissipate. Cost-containment measures have been offset by rising minimum wages, although the recent loosening of the labor market could serve to alleviate recent pressure. Fitch expects the company's margins to approach the high single digits longer term. DERIVATION SUMMARY PFC's rating reflects the company's good niche positioning and leading market position in the full-service Asian category, as well as its high financial leverage, smaller scale relative to other large casual chain dining concepts and secular challenges within the casual dining segment that have been exacerbated by the coronavirus pandemic. PFC has relatively good system health supported by a better than average brand perception with broad appeal across most consumer demographics, average unit volumes that are at least on par with peers and same-store sales performance in-line with the casual dining segment but lower Fitch-calculated margins of 6.4% in 2019 versus some of its peers that have margins in the mid-teens range. Fitch estimates the company has around $29 million of liquidity pro forma a $10 million loan it received pursuant to the CARES Act. While Fitch views this as adequate, liquidity could become stressed if the impacts of the coronavirus pandemic last longer than anticipated. PFC's rating is lower than Darden's due to PFC's considerably smaller scale and significantly higher leverage (total adjusted debt to EBITDAR on a rent-adjusted basis). Darden generated $8.6 billion in revenue and $1.25 billion in EBITDA for fiscal 2019 (ending May 27, 2019), with adjusted debt/EBITDAR of 2.5x, though Fitch expects leverage to peak at 4.7x due to impacts of the coronavirus. The rating differential also considers PFC's lack of brand-level diversification and weaker comparable store sales trends compared with Darden. Despite industry secular headwinds, Darden's Same Restaurant Sales outperformed the broader casual segment, particularly with its Olive Garden and Longhorn Steakhouse concepts. PFC's ratings are also lower than quick-service restaurant competitor Starbucks Corporation (BBB/Negative). Starbucks has significantly greater scale and geographic diversification with over 31,000 units, and operates in the less economically sensitive fast food category, with total adjusted debt/EBITDAR of 3.2x as of Sept. 30, 2019, though Fitch expects leverage to rise to 7.0x in fiscal 2020 before heading back down. PFC's rating is a notch lower than Rite Aid Corporation (B-/Stable). Rite Aid's ratings reflect continued operational challenges, which heightened questions regarding the company's longer-term market position and the sustainability of its capital structure. Persistent EBITDA declines led to negligible to modestly negative FCF and elevated adjusted debt/EBITDAR in the low- to mid-7.0x range, despite some signs of pharmacy sales stabilization over the past year. Fitch believes operational challenges include both a challenged competitive position in retail and, more recently, sector wide gross margin contraction resulting from reimbursement pressure. KEY ASSUMPTIONS -- COVID-induced SSS declines peak around negative 40% in 2Q20, improving to negative 20% in 3Q20 and negative 10% in 4Q20, resulting in a full-year total revenue decline of 24%. Revenues rebound around 20% in 2021 on easy comps with 2021 revenue around 8% below 2019 levels. Fitch expects mid-single-digit revenue growth thereafter driven by low single-digit SSS growth; -- EBITDA margins decline to the low 6% range in 2020 under pressure from the coronavirus, increasing by nearly 100bps annually thereafter as volumes recover and cost savings are realized. Fitch expects 2021 EBITDA around $58 million, in line with 2019 levels; -- Capex troughs at $15 million in 2020 as the coronavirus pressures cash flow, but grows in the following years to absorb FCF as the company invests in remodels; -- Leverage spikes over 9.0x in 2020 due to additional debt and pressure on EBITDA due to the coronavirus, declining to the high 7x range in 2021 as earnings recover and around 7.0x in 2023. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Consistently positive SRS comps with EBITDA margins in the mid to high single digits, resulting in flat to positive FCF; -- Total adjusted debt/EBITDAR expected to sustain below 7.0x, improving the sustainability of the company's cap structure. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A negative rating action could occur if operating trends are worse than expected, resulting in continued cash burn with fixed charge coverage ratio (operating EBITDAR/gross interest paid + rents) trending below 1.0x and the need for further liquidity injection. Capital structure changes that results in any form of distressed debt exchange or restructuring would also lead to downward rating actions. 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 PFC's capital structure includes a $55 million revolving credit facility due March 1, 2024 ($27.3 million drawn at March 31, 2020, with $27.7 million LOCs outstanding) and a $426 million term loan due March 26, 2026. Both the term loan and the revolver bear interest at LIBOR plus 6.5%. The term loan amortizes at a rate of 1% per annum, or approximately $1.1 million per quarter, and provides a cash flow sweep of up to 50%, depending on leverage. The credit agreement has a maximum leverage ratio of 6.5x. With the revolver completely utilized at quarter end by $27.3 million of drawings and $27.7 million in LOCs, liquidity at the end of 1Q20 comprised PFC's cash balance of $19.1 million. Subsequent to quarter end, the company received a $10 million loan pursuant to the CARES Act. Fitch treats the loan as debt with a 2022 maturity as it is unclear whether this loan will be forgiven or if it will need to be repaid. Fitch's base case forecast does not anticipate a need for further liquidity and the company does not have any debt maturities prior to 2024, but Fitch views the company's liquidity as tight considering the high degree of uncertainty due to the coronavirus and the economic slowdown expected to follow. Fitch acknowledges the equity sponsors could provide additional support if required. Recovery Considerations For issuers with IDRs of 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue ratings are derived from the IDR, the relevant Recovery Rating (RR) and prescribed notching. In a going concern scenario, Fitch assumes material stress on sales persists, rendering PFC's capital structure unsustainable and forcing a bankruptcy. Fitch assumes the company closes approximately one-quarter of its weakest restaurants, resulting in pro forma revenue around $675 million. Fitch assumes the company uses the bankruptcy or restructuring process to renegotiate leases and cut expenses resulting in an EBITDA margin around 7% and EBITDA of $50 million. Fitch applies a 5.0x enterprise value/EBITDA multiple, below the 6.7x median multiple for Gaming, Lodging & Leisure bankruptcy reorganizations analyzed by Fitch. The multiple reflects PFC's market position in the narrow Asian food segment, the secular decline in the casual dining space and lack of brand diversity. After deducting 10% for administrative claims, PFC's first-lien secured credit facility, revolver and term loan are expected to have average recovery prospects (31%-50%) and have been assigned 'CCC+'/'RR4' ratings. The revolver and term loan are secured by a first-priority interest in substantially all assets of the borrower (Wok Holdings, Inc.) and the guarantors (material direct and indirect wholly owned U.S. subsidiaries with certain exceptions, including unrestricted subsidiaries). 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). WYOMING INVESTMENT: Permanently Closes Fitness Center ----------------------------------------------------- Casper Star Tribune reports that the Wyoming Athletic Club is permanently closing its doors, the fitness center announced on June 5, 2020. The gym filed for Chapter 11 bankruptcy in March to avoid having its east side location auctioned at a foreclosure sale. Wyoming Athletic Club, which had two locations in Casper, said it had more than $1 million in debt. It closed March 19, 2020 as a precaution against the novel coronavirus. Gyms were allowed to reopen with restrictions in May in Wyoming, but the fitness center said on Facebook that it was taking two weeks to reassess. It did not reopen thereafter. "The shut down for Covid-19 during our Chapter 11 restructuring was more than we could come back from as a small business," the club posted on Facebook. "We apologize to our members for any inconvenience this may cause. We will miss all of our members. You have become friends and family to all of us at WAC. Our years as a premier athletic club in Casper have been good ones. This was in no way an easy decision." About Wyoming Investment Partners Wyoming Investment Partners, LLC, d/b/a Wyoming Athletic Club (http://itsmywac.com),offers comprehensive fitness training, sport performance programs, and kids fitness options. Wyoming Investment Partners, LLC, based in Casper, WY, filed a Chapter 11 petition (Bankr. D. Wyo. Case No. 20-20085) on March 4, 2020. In its petition, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The petition was signed by Louis Quint Jr., Esq., member of Health Club Management, LLC. Bradley T. Hunsicker, Esq., at Markus Williams Young & Hunsicker LLC, serves as bankruptcy counsel. [*] Airbus Plans to Sue Airlines for Undelivered Jets ----------------------------------------------------- Reuters reports that Airbus plans to sue some carriers for undelivered jets. Amid the global health crisis, several airlines are concerned about taking on more aircraft than they need over the next few years. Some carriers are trying to get out of their agreements with manufacturers to save money. However, Airbus has hinted there it may sue companies that are refusing to honor their contracts. Airbus CEO Guillaume Faury shared that some carriers refused to take calls at the height of the situation. His firm has been trying to communicate with these airlines to resolve the issues at hand, but there has not been any progress. If this trend continues, the European outfit may have to take legal action. However, despite this lack of communication, he hopes for a compromise. "It will remain, I hope, the exception because we always try to find a different route than going to court," Faury said, as reported by Reuters. "But if and when airlines -- and it's happening -- have no other choice than fully defaulting and not proposing something better than nothing, or are not willing to do it, then (lawsuits) will happen." Within the report, Bertrand Grabowski, an aviation banker turned independent adviser, highlighted how too many planes were being manufactured before the pandemic swept the globe. Along with this, several carriers without sustainable business models were taking these units on. Subsequently, the coronavirus outbreak catalyzed the overproduction challenges that these companies now face. With several carriers trying to change their plans at once, it could be detrimental for manufacturer. Therefore, a strong stance by Airbus is not surprising since it is looking to avoid turmoil, such as the collapse of Swissair and Sabena in 2001. Subsequently, it has sent out dozens of default notices to airlines. Altogether, it is a challenging time for both manufacturers and airlines with both flight activity and production low. However, the aviation industry will eventually rise again. Therefore, it is in the interest of both parties to engage in dialogue to come to a balanced solution. Simple Flying reached out to Airbus for more information about these reports. A spokesperson for the firm shared that it does not comment on confidential talks with individual customers. Airbus has announced that it netted no new orders for May. Additionally, the firm made 24 deliveries of its aircraft. These shipments were spread between the A220, A320 and A350 XWB families. Despite the lack of business activity, there were no cancellations made during the month. However, earlier, Qatar Airways warned Airbus and Boeing to defer deliveries. If they don't do this, they may lose out on future business from the flag carrier of Qatar. Ultimately, the Middle Eastern outfit is just one of several airlines looking to change their delivery plans amid the COVID-19 pandemic. About Airbus Headquartered in Toulouse, France, Airbus S.A.S. -- http://www.airbus.com/en-- is a leading aircraft manufacturer in Europe with around 55,000 people employed at 16 sites in Germany, France, Spain and the United Kingdom. [*] PPP Amendments Provide Flexibility to Borrowers --------------------------------------------------- Jones Day wrote an article on the U.S. President signing amendments to the Paycheck Protection Program into law. Jones Day said that amendments to the Paycheck Protection Program with respect to loan forgiveness period, safe harbors, and other provisions provide flexibility to borrowers: The new Paycheck Protection Program Flexibility Act of 2020 ("PPPFA") amends the Paycheck Protection Program ("PPP") created under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act and affects both existing and future PPP loans. Loan Forgiveness Extensions Applicability. The updated loan forgiveness terms apply to all PPP loans, including those that were made prior to the enactment of the PPPFA. Extension of Covered Period for PPP Loan Forgiveness. The PPPFA extends the "covered period" for loan forgiveness (i.e., the period with respect to which borrowers may seek loan forgiveness) from an eight-week period to the earlier of: (1) 24 weeks from the loan origination date, or (2) December 31, 2020. Borrowers with a PPP loan made prior to enactment of the PPPFA can elect to retain the eight-week covered period for loan forgiveness purposes. Payroll Costs. Under the Small Business Administration's prior interim rules and guidance, at least 75% of any amount of loan forgiveness must have been used on payroll costs. The PPPFA requires that, in order to be eligible for any loan forgiveness, a borrower must use at least 60% of loan proceeds on payroll costs, and may use up to 40% of loan proceeds for eligible non-payroll costs, including interest on certain mortgage obligations, payments on rent obligations, and utility payments. Extension of Re-Hire and Pay Restoration Safe Harbor Periods. The PPPFA extends from June 30, 2020, to December 31, 2020, the safe harbor period to hire/re-hire employees and/or restore reductions in employee salary/wages in order to avoid a reduction in the loan forgiveness amount. Expansion of Re-Hire Safe Harbor. The PPPFA also expands the re-hire safe harbor for certain employers who are unable to hire or re-hire employees before December 31, 2020. In particular, the PPPFA allows an employer to avoid a reduction in the amount of loan forgiveness due to a reduction in the number of full-time equivalent employees where the borrower is able to document, in good faith: * An inability (i) to rehire individuals who were its employees as of February 15, 2020; and (ii) to hire similarly qualified employees for unfilled positions by December 31, 2020; or * An inability to return to the same level of business activity as the borrower was operating at before February 15, 2020, due to compliance with requirements established or guidance issued by Health & Human Services, the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. Deferral Period. The deferral period for loan payments is extended from six months to the date on which the loan forgiveness amount is remitted to the lender, provided that borrowers apply for loan forgiveness within 10 months after the covered period ends. Loan Maturity New Loans. For PPP loans that are made after enactment of the PPPFA and have a remaining balance after loan forgiveness, the minimum maturity will be five years from the date on which the borrower applies for loan forgiveness and the maximum maturity will be 10 years. Existing Loans. For PPP loans that were made prior to the enactment of the PPPFA, borrowers and lenders may mutually agree to modify the maturity terms of the loan to conform to the PPPFA. Employer Payroll Taxes Delay of Payment Payroll Tax Deferral. The PPPFA amends the CARES Act to allow borrowers that receive loan forgiveness to still be eligible for the deferral of payment of employer payroll taxes under Section 2302 of the CARES Act. [*] Use of Cash Collateral Not Prohibited by Jevic -------------------------------------------------- Mark Douglas and Charles (Charlie) Oellermann of Jones Day wrote an article titled "Use of Cash Collateral to Pay Prepetition Debt Not Prohibited by Jevic": The ability of a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") to use "cash collateral" during the course of a bankruptcy case may be vital to the debtor's prospects for a successful reorganization. However, because of the unique nature of cash collateral, the Bankruptcy Code sets forth special rules that apply to the nonconsensual use of such collateral to protect the interests of the secured creditor involved. The U.S. Bankruptcy Court for the Eastern District of Washington examined these requirements in In re Claar Cellars, LLC, 2020 WL 1238924 (Bankr. E.D. Wash. Mar. 13, 2020). The court authorized a debtor to use cash collateral over the objection of a secured creditor because it found that the creditor's interest in the collateral was adequately protected. Moreover, the court concluded that the use of such collateral to pay in part a prepetition, allegedly secured debt owed to an affiliated debtor did not violate the U.S. Supreme Court's prohibition in Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973 (2017), against distributions that deviate from the Bankruptcy Code's priority scheme in the context of a "structured dismissal" of a chapter 11 case. Use, Sale, or Lease of Estate Property Outside Ordinary Course Section 363(b)(1) of the Bankruptcy Code provides in relevant part that "[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate." Courts generally apply some form of a business judgment test in determining whether to approve a proposed use, sale, or lease under section 363(b)(1). See ASARCO, Inc. v. Elliott Mgmt. (In re ASARCO, L.L.C.), 650 F.3d 593, 601 (5th Cir. 2011); In re Stearns Holdings, LLC, 607 B.R. 781, 792 (Bankr. S.D.N.Y. 2019); In re Friedman's, Inc., 336 B.R. 891, 895 (Bankr. S.D. Ga. 2005); see generally Collier on Bankruptcy ¶ 363.02 (16th ed. 2019). Under this deferential standard, a bankruptcy court will generally approve a reasoned decision by a trustee or DIP to use, sell, or lease estate property outside the ordinary course of business. See In re Alpha Nat. Res., Inc., 546 B.R. 348, 356 (Bankr. E.D. Va.), aff'd, 553 B.R. 556 (E.D. Va. 2016). However, when a transaction involves an "insider," courts apply heightened scrutiny to ensure that the transaction does not improperly benefit the insider at the expense of other stakeholders. See In re Alaska Fishing Adventure, LLC, 594 B.R. 883, 887 (Bankr. D. Alaska 2018); In re Family Christian, LLC, 533 B.R. 600, 622, 627 (Bankr. W.D. Mich. 2015). Special Rules for Use of Cash Collateral If a trustee or DIP proposes to use estate property in the form of "cash collateral," special rules apply. Section 363(a) of the Bankruptcy Code defines "cash collateral" as "cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents whenever acquired in which the estate and an entity other than the estate have an interest." Cash collateral also includes "the proceeds, products, offspring, rents, or profits of property . . . subject to a security interest." Section 101(51) of the Bankruptcy Code defines "security interest" as a "lien created by an agreement." Generally, cash collateral is thought of as an asset that can dissipate or be consumed quickly, easily, and undetectably. And once gone, cash collateral is difficult to trace and recover. Because of this transient characteristic, Congress has codified special provisions in the Bankruptcy Code to account for cash collateral and restrict the use of it, to protect the rights of the creditor that holds a security interest in the cash collateral. Under section 363(c)(4) of the Bankruptcy Code, a trustee or DIP is required to segregate and account for any cash collateral in its possession, custody, or control. This requirement applies to both cash collateral the debtor has on hand before the commencement of the bankruptcy case and any cash collateral the trustee or DIP acquires thereafter. Because the trustee or DIP has a duty to protect and maintain the cash collateral for the benefit of the one or more secured creditors that have an interest in the collateral, it is especially important to identify each secured creditor that has an interest in it. Under section 363(c)(2) of the Bankruptcy Code, a trustee or DIP may not use, sell, or lease cash collateral without either: (i) the consent of each secured creditor with an interest in the collateral; or (ii) the court's authorization. Often, a secured creditor will allow the DIP to use cash collateral for specific purposes to keep the business operational, under certain terms and conditions. This type of agreement benefits the secured creditor because it maintains the debtor's business as a going concern, thereby preserving the value of the secured creditor's interest in the collateral. Pursuant to section 363(e), if the secured creditor and the trustee or DIP cannot agree on a proposed use of cash collateral, the court may grant such permission, provided that the secured creditor's interest in the collateral is adequately protected. Under section 363(p), the trustee or DIP bears the burden of proving that it can adequately protect the secured creditor's interest in the cash collateral. Even though section 363(c)(2) requires notice and a hearing before the court can grant permission to use cash collateral, the court may, and often does, hear motions to use cash collateral on an expedited basis—particularly at the inception of a bankruptcy case. The court may conduct a preliminary hearing on the first day of the bankruptcy case to authorize the use of cash collateral for certain urgent and vital uses on an interim basis to prevent immediate and irreparable harm to the debtor's estate. The court typically convenes a later final hearing on the use of cash collateral. Jevic and Distributions Inconsistent With the Bankruptcy Code's Priority Scheme Chapter 11 cases culminate by either confirmation of a plan of reorganization or liquidation that becomes effective; conversion to a chapter 7 case; or dismissal of the case. In the case of dismissal, section 349(b) of the Bankruptcy Code is designed to reinstate as nearly as possible the pre-bankruptcy status quo unless the court orders otherwise "for cause." Prior to Jevic, some courts relied on this provision to approve "structured dismissals" of chapter 11 cases that include some provisions, rights, and protections typically seen in chapter 11 plan confirmation orders, including provisions for distributions to creditors. In some instances, these distributions deviated from the Bankruptcy Code's priority scheme. In Jevic, the Supreme Court held that bankruptcy courts may not deviate from the Bankruptcy Code's priority scheme when approving structured dismissals without the consent of creditors (without, however, offering any "view about the legality of structured dismissals in general"). The Court's 6-2 majority distinguished cases in which courts have approved interim settlements resulting in distributions of estate assets in violation of the priority rules, such as In re Iridium Operating LLC, 478 F.3d 452 (2d Cir. 2007). The majority found that Iridium "does not state or suggest that the Code authorizes nonconsensual departures from ordinary priority rules in the context of a dismissal—which is a final distribution of estate value—and in the absence of any further unresolved bankruptcy issues." In this sense, the majority explained, the situation in Iridium was similar to certain "first day" orders, where courts have allowed for, among other things, payments ahead of secured and priority creditors to employees for prepetition wages or to critical vendors on account of their prepetition invoices. The majority further explained that "in such instances one can generally find significant Code-related objectives that the priority-violating distributions serve." By contrast, the majority noted, the structured dismissal in Jevic served no such objectives (e.g., it did not benefit disfavored creditors by preserving the debtor as a going concern and enabling the debtor to confirm a plan of reorganization and emerge from bankruptcy). Rather, the majority emphasized, the distributions at issue "more closely resemble[d] proposed transactions that lower courts have refused to allow on the ground that they circumvent the Code's procedural safeguards" (citing, among others, certain proposed section 363 asset sales). Claar Cellars Claar Cellars LLC ("Claar") and RC Farms ("RC"), both of which are owned by the Whitelatch family ("Whitelatch"), operate 130 acres of vineyards in Washington. After RC harvests the grapes it produces, it sends the grapes to Claar, which processes them into wine and sells the wine. Under a 1997 purchase agreement, Claar is obligated to pay RC for the grapes Claar receives. In January 2020, Claar and RC filed for chapter 11 protection in the Eastern District of Washington. RC asserted a secured claim against Claar in the amount of $330,000 on the basis of a state law creating a statutory lien for grape growers on the inventory and accounts receivable of wine producers to which the growers provide grapes. As of the petition date, Claar and RC owed secured lender HomeStreet Bank ("HomeStreet") approximately $2 million. HomeStreet's prepetition collateral included personal property owned by both companies (including cash collateral) as well as real property owned by RC and a Whitelatch family trust. After filing for bankruptcy, both debtors, whose cases were not consolidated, filed motions seeking court authority to use HomeStreet's cash collateral for the purpose of maintaining the real property (in the case of RC) and continuing operations. In the budget accompanying the motions, Claar proposed to make seven monthly payments to RC during 2020 in the aggregate amount of approximately $163,000 for grapes shipped to Claar prepetition. This amount represented roughly half of RC's prepetition secured claim. RC's representative testified that RC could not operate without the payments. HomeStreet objected, arguing that: (i) the debtors were not adequately protecting HomeStreet's interest in its cash collateral; (ii) the proposed $163,000 in payments to RC would improperly satisfy a prepetition debt outside of a confirmed chapter 11 plan, thereby violating Jevic; and (iii) because the validity of RC's lien was questionable—an issue that needed to be adjudicated in an adversary proceeding—the court could not rely on the secured status of RC's claim to permit Claar's postpetition payments. The adequate protection issue with respect to RC was resolved after RC agreed to grant HomeStreet a lien on another parcel of unencumbered real property and the court found that the value of the overall adequate protection package significantly exceeded the amount of HomeStreet's claim. HomeStreet, however, still objected to the proposed $163,000 in payments by Claar to RC. The Bankruptcy Court's Ruling The bankruptcy court overruled HomeStreet's objections to the debtors' proposed uses of cash collateral. At the outset of its opinion, the court stated that section 363(b)(1) is one of many provisions in the Bankruptcy Code "providing broad and flexible powers for courts to deploy to facilitate the rehabilitation of a given debtor based on the context of that debtor's case." Explaining its ruling, however, the court observed that "section 363(b)(1) is not a tool to obviate prohibitions found elsewhere in the Bankruptcy Code, no matter how inconvenient those prohibitions may be in a particular case." The court noted that the provision, while straightforward, is cabined, complicated, and throttled by other provisions of the Bankruptcy Code, applicable nonbankruptcy law, and judicially crafted limitations. This last group of limitations, for example, includes the prohibition against section 363(b) asset sales that amount to sub rosa chapter 11 plans evading the detailed confirmation requirements set forth in the Bankruptcy Code (citing PBGC v. Braniff Airways, Inc. (In re Braniff Airways, Inc.), 700 F.2d 935, 940 (5th Cir. 1983)). Against this backdrop, and applying heightened scrutiny to the transaction because of RC's status as an insider, the bankruptcy court approved the use of HomeStreet's cash collateral to make the payments to RC. According to the court, approval was warranted for five reasons: (i) It was clear that RC possessed a secured claim against Claar in "some amount," and RC "articulated a colorable basis" under which it might be oversecured, which warranted periodic cash payments to RC as a form of adequate protection of its interest in Claar's property; (ii) The payments to RC were essential to RC's continued viability, which in turn justified RC's pledge of additional collateral to adequately protect HomeStreet's interest and "avoid[ed] the inequity that would result if the Claar estate got a completely fair ride on RC's credit support"; (iii) Claar received other indirect benefits from the continued viability of RC, including greater enterprise value generated by any sale of the Whitelatch-owned businesses as a consolidated package; (iv) The risk associated with the payments was minimal because of the relatively small "value leakage" and the ability for "recalibration" of the amount realized by RC on its remaining claim in the claims resolution process; and (v) An adversary proceeding was not required before Claar could make any periodic payments to RC, given that courts frequently approve partial payments to secured creditors, "despite potentially viable challenges to the validity, priority, or extent of the underlying lien that could be finally determined only via adversary proceeding." According to the bankruptcy court, authorizing the use of HomeStreet's cash collateral to pay part of RC's prepetition claims did not offend Jevic because the "payments are 'interim' distributions under any meaning of that word in Jevic" and because the distributions "advance significant bankruptcy objectives without causing material (or perhaps any) harm to any other creditor." HomeStreet also argued that the proposed payments to RC could not be approved as a first-day "critical vendor" motion, which some courts have sanctioned under the "doctrine of necessity." However, because the debtors could not establish that RC was a critical vendor and disclaimed any reliance on this theory to justify the payments, the court declined to address the continued viability of the practice. Outlook Claar Cellars is a primer on section 363(b) and the circumstances under which a DIP can use cash collateral over the objection of a secured creditor. However, the ruling is also notable for its commentary on the scope of Jevic in the context of a proposed non-ordinary course use, sale, or lease of estate property under section 363(b). Claar Cellars is not the only recent court ruling concluding that Jevic has limited application to proposed transactions under section 363(b). For example, in In re Old Cold LLC, 879 F.3d 376 (1st Cir. 2018), the U.S. Court of Appeals for the First Circuit ruled that Jevic did not apply to an asset sale under section 363(b). The court rejected the argument that a winning bid in an auction sale that provided for the payment of certain unsecured claims before administrative claims impermissibly violated the priority rules in contravention of Jevic. Instead, the court applied section 363(m) of the Bankruptcy Code to render statutorily moot an appellate challenge to a sale to a good-faith purchaser because the sale order had not been stayed pending appeal. According to the First Circuit, "Section 363(m) sets forth only two requirements: that there is a good faith purchaser, and that the sale is unstayed." It concluded that "[n]othing in Jevic appears to add an exception to this statutory text." In In re Daily Gazette Co., 584 B.R. 540 (Bankr. S.D.W. Va. 2018), the bankruptcy court ruled that Jevic's prohibition against nonconsensual structured dismissal settlements that deviate from the Bankruptcy Code's priority scheme did not affect a chapter 11 debtor's ability to sell its assets with the intention of using the sales proceeds to pay administrative claims followed by a distribution to a secured creditor holding a blanket lien on the debtor's assets. In In re Nine W. Holdings, Inc., 588 B.R. 678 (Bankr. S.D.N.Y. 2018), the bankruptcy court approved a DIP's motion to retain and compensate a distressed management consultant under section 363(b) rather than the provisions of the Bankruptcy Code traditionally relied upon for professional retention and compensation requests in chapter 11 cases. According to the court, Jevic recognized that priority-skipping distributions are permissible when there are "significant Code-related objectives that the priority-violating distributions serve." In In re Veg Liquidation, Inc., 931 F.3d 730, 739 (8th Cir. 2019), the U.S. Court of Appeals for the Eighth Circuit noted that "even if the reasoning of Jevic on priority rules were extended to § 363 sales, it would not apply in the context of a consummated sale." According to the court, "Whatever force the Bankruptcy Code's priority rules might have at a sale approval hearing or on direct review of a § 363 sale, . . . a deviation from those rules does not render final judgments 'void.'" Finally, although the court in Claar Cellars declined to address the continued viability of the "doctrine of necessity" in approving first-day critical vendor motions post-Jevic, other courts have held that the practice is sanctioned by the Supreme Court's ruling. For example, in In re Murray Metallurgical Coal Holdings, LLC, 2020 WL 1307378 (Bankr. S.D. Ohio Mar. 18, 2020), the court approved the payment of critical vendors at the inception of a bankruptcy case under section 363(b). Citing many other cases in which the practice has been sanctioned post-Jevic, the court wrote that "[t]he Supreme Court has recognized with apparent approval" the practice of authorizing payments to critical vendors where the payments would enable a successful reorganization, benefiting even disfavored creditors. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Design Massage Therapy LLC Bankr. W.D. Mo. Case No. 20-41167 Chapter 11 Petition filed June 23, 2020 See https://is.gd/uwcGgg represented by: John L. Lentell, Esq. JOHN L LENTELL JD MBA LLC E-mail: jlentell@lentell-lawoffice.com In re Back to Life Properties, Inc Bankr. E.D. Mich. Case No. 20-47096 Chapter 11 Petition filed June 24, 2020 See https://is.gd/CGg5wV represented by: Kimberly Ross Clayson, Esq. MAXWELL DUNN, PLC E-mail: bankruptcy@maxwelldunnlaw.com In re Decipherst Inc. Bankr. W.D. Wash. Case No. 20-11734 Chapter 11 Petition filed June 24, 2020 See https://is.gd/95Hil3 represented by: Darrel B. Carter, Esq. CBG LAW GROUP E-mail: darrel@cbglaw.com In re AAG Crepe House, Inc. Bankr. E.D.N.Y. Case No. 20-42423 Chapter 11 Petition filed June 24, 2020 See https://is.gd/YNPAzq represented by: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. E-mail: alla@kachanlaw.com In re Valley Equities, LLC Bankr. C.D. Cal. Case No. 20-15688 Chapter 11 Petition filed June 24, 2020 See https://is.gd/bp7hbA represented by: Ronald W. Ask, Esq. ELDER LAW CENTER, P.C. E-mail: elc@elderlawcenter.net In re Auc Trucking, Inc. Bankr. E.D. Ark. Case No. 20-12714 Chapter 11 Petition filed June 24, 2020 See https://is.gd/2n2u4E represented by: Kyle W. Havner, Esq. HAVNER LAW FIRM PA E-mail: havnerlaw@gmail.com In re Robyn Christine Jackson Bankr. S.D. Fla. Case No. 20-16834 Chapter 11 Petition filed June 24, 2020 represented by: David Merrill, Esq. In re Joshua Todd Crews and Tara Marie Crews Bankr. M.D. Tenn. Case No. 20-03088 Chapter 11 Petition filed June 24, 2020 represented by: Denis Waldron, Esq. DUNHAM HILDEBRAND, PLLC Email: gray@dhnashville.com In re David R. Hicks and Elaine R. Hicks Bankr. D. Maine Case No. 20-20240 Chapter 11 Petition filed June 25, 2020 represented by: James Molleur, Esq. MOLLEUR LAW OFFICE E-mail: info@molleurlaw.com In re Kenneth McGinley Bankr. E.D.N.Y. Case No. 20-42442 Chapter 11 Petition filed June 25, 2020 represented by: Lawrence Morrison, Esq. In re Terrance McGinley Bankr. E.D.N.Y. Case No. 20-42443 Chapter 11 Petition filed June 25, 2020 represented by: Lawrence Morrison, Esq. In re Bogie Enterprises, Inc. Bankr. M.D. Fla. Case No. 20-03570 Chapter 11 Petition filed June 25, 2020 See https://is.gd/Z5I4pi represented by: Jeffrey S. Ainsworth, Esq. BRANSONLAW, PLLC E-mail: jeff@bransonlaw.com In re Kjell Morgan Lindau and Patricia E. Lindau Bankr. D. Maine Case No. 20-10303 Chapter 11 Petition filed June 25, 2020 represented by: James F. Molleur, Esq. MOLLEUR LAW OFFICE E-mail: jim@molleurlaw.com/ tanya@molleurlaw.com In re Hiteshri Patel Bankr. D.N.J. Case No. 20-17880 Chapter 11 Petition filed June 25, 2020 represented by: Melinda Middlebrooks, Esq. MIDDLEBROOKS SHAPIRO, P.C. E-mail: middlebrooks@middlebrooksshapiro.com In re Daniel B Ziehmke and Ashleigh D Ziehmke (Madison) Bankr. W.D. Wisc. Case No. 20-11654 Chapter 11 Petition filed June 25, 2020 represented by: Kristin Sederholm, Esq. John P. Driscoll, Esq. KREKELER STROTHER, SC E-mail: ksederholm@ks-lawfirm.com Jdriscoll@ks-lawfirm.com In re VHN Services, LLC Bankr. E.D. Tex. Case No. 20-41448 Chapter 11 Petition filed June 26, 2020 See https://is.gd/priXZY represented by: Eric A. Liepins, Esq. ERIC A. LIEPINS E-mail: eric@ealpc.com In re Rice Timber Solutions, LLC Bankr. W.D. Va. Case No. 20-60947 Chapter 11 Petition filed June 26, 2020 See https://is.gd/4f8Bfj represented by: Reginald R. Yancey, Esq. REGINALD R. YANCEY In re Arlene McGinley Bankr. E.D.N.Y. Case No. 20-42447 Chapter 11 Petition filed June 26, 2020 represented by: Lawrence Morrison, Esq. In re Peter J. Zebrowski Bankr. W.D.N.Y. Case No. 20-10848 Chapter 11 Petition filed June 26, 2020 represented by: Arthur Baumeister, Esq. In re One Earth Landscape Management, Inc. Bankr. W.D. Va. Case No. 20-70640 Chapter 11 Petition filed June 29, 2020 See https://is.gd/hKfzHw represented by: Mark A. Black, Esq. BRUMBERG, MACKEY & WALL, P.L.C. E-mail: mblack@bmwlaw.com In re Camp Croteau, Inc. Bankr. C.D. Cal. Case No. 20-14458 Chapter 11 Petition filed June 29, 2020 See https://is.gd/xq7xak represented by: Todd Turoci, Esq. THE TUROCI FIRM E-mail: mail@theturocifirm.com In re Tax and Financial Advantage Group, Inc. Bankr. E.D. Ark. Case No. 20-12760 Chapter 11 Petition filed June 29, 2020 See https://is.gd/JtDNBS represented by: Joel G. Hargis, Esq. CADDELL REYNOLDS LAW FIRM E-mail: jhargis@justicetoday.com In re Richard Bertero Bankr. N.D. Cal. Case No. 20-30518 Chapter 11 Petition filed June 29, 2020 represented by: Eric Gravel, Esq. In re Patrick Boag Landscaping, LLC Bankr. D.N.J. Case No. 20-18098 Chapter 11 Petition filed June 30, 2020 See https://is.gd/525ACN represented by: Justin M. Gillman, Esq. GILLMAN, BRUTON & CAPONE, LLC E-mail: ecf@gbclawgroup.com In re Stephen Dwayne Ladd and Pamela Annette Ladd Bankr. N.D. Tex. Case No. 20-42211 Chapter 11 Petition filed June 30, 2020 represented by: Mark French, Esq. LAW OFFICE OF MARK B. FRENCH In re Jack A. Barrett Bankr. D. Ariz. Case No. 20-07712 Chapter 11 Petition filed June 30, 2020 represented by: Lamar D. Hawkins, Esq. GUIDANT LAW, PLC E-mail: lamar@guidant.law In re Rocky Lamar Salinas, D.D.S. Bankr. S.D. Tex. Case No. 20-70210 Chapter 11 Petition filed June 30, 2020 represented by: Joyce Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC E-mail: joyce@joycelindauer.com In re John Martin Kennedy Bankr. C.D. Cal. Case No. 20-15954 Chapter 11 Petition filed June 30, 2020 represented by: Sandford Frey, Esq. ********* 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 ***