/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200730.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 30, 2020, Vol. 24, No. 211 Headlines 1549 SE 14TH ST: Voluntary Chapter 11 Case Summary 4920 LOUGHBORO: Case Summary & Unsecured Creditor A.E. CROSTHWAIT: Voluntary Chapter 11 Case Summary AERKOMM INC: Subsidiary Partners with Airbus Interior Services AGAPE BEAUVOIR MANOR: S&P Lowers Revenue Bond Rating to 'B+' ALCHEMY COPYRIGHTS: Moody's Assigns B1 CFR, Outlook Stable ALL AMERICAN: Involuntary Chapter 11 Case Summary APEX LINEN: U.S. Trustee Appoints Creditors' Committee ART VAN: Counsel Did Not Violate Wells Fargo Waiver, Court Says BILLINGS LODGE: U.S. Trustee Appoints Creditors' Committee BIZNESS AS USUAL: Dalin Funding Objects to Plan Disclosures BIZNESS AS USUAL: Philadelphia Says Plan Speculative BIZNESS AS USUAL: UST Notes of Deficiencies on Disclosures CARBO CERAMICS: Unsecureds Get Pro Rata Share of GUC Cash Pool CBL & ASSOCIATES: Continues to Engage in Negotiation with Lenders CBL & ASSOCIATES: Egan-Jones Lowers Sr. Unsecured Ratings to D CENOVUS ENERGY: Fitch Rates Sr. Unsecured Notes Due 2025 'BB+' CENOVUS ENERGY: Moody's Rates Senior Unsecured Notes 'Ba2' CHESAPEAKE ENERGY: Hires Alvarez & Marsal as Restructuring Advisor CHESAPEAKE ENERGY: Seeks Court Approval to Hire Investment Bankers CHESAPEAKE ENERGY: Seeks to Hire Kirkland & Ellis as Legal Counsel CHESAPEAKE ENERGY: Seeks to Tap Jackson Walker as Co-Counsel CHESAPEAKE ENERGY: U.S. Trustee Appoints Royalty Owners' Committee CHRIST THE CORNERSTONE: Court Conditionally Approves Disclosures COMMUNITY HEALTH: Posts $70 Million Net Income in Second Quarter CONSOLIDATED LAND: Unsecureds Get Remainder of Equity Investment COSTA HOLLYWOOD: Evolution Hospitality Objects to Disclosures CRACKER BARRELL: Egan-Jones Withdraws BB+ Senior Unsecured Ratings DAVIS FAMILY: Aug. 5 Hearing on Disclosure Statement DECIPHERST INC: U.S. Trustee Unable to Appoint Committee DOMINO'S PIZZA: Egan-Jones Hikes Senior Unsecured Ratings to BB- ECTOR COUNTY HOSPITAL: Fitch Cuts Issuer Default Rating to BB FARR BUILDERS: Frost Objects to Disclosure Statement FORESIGHT ENERGY: Unsecureds to Split $2.55 Million in Plan FOX VALLEY PRO: Unsecureds Will be Paid 100% of Their Claims G-III APPAREL: Moody's Rates New Senior Secured Notes 'Ba3' GNC HOLDINGS: Fitch Withdraws 'D' LT IDR on Chapter 11 Filing GREENCROFT OBLIGATED: Fitch Affirms BB+ Rating on 2013A Bonds GRUPO AEROMEXICO: Wins Court OK to Reject Leases for 19 Planes GT POLARIS: Fitch Assigns 'B' LongTerm IDR, Outlook Stable HALLIBURTON CO: Egan-Jones Cuts Sr. Unsecured Ratings to BB- HCA INC: Egan-Jones Hikes Senior Unsecured Ratings to B+ HENRY ANESTHESIA: Case Summary & 20 Largest Unsecured Creditors HORNBLOWER SUB: Moody's Hikes CFR to Caa2, Outlook Negative IMERYS TALC: Cyprus Historical Objects to Disclosure Statement INTELSAT SA: Committee Taps Bonn Steichen as Special Counsel INTELSAT SA: Committee Hires Hunton Andrews as Co-Counsel INTELSAT SA: Committee Hires Moelis & Company as Investment Banker INTELSAT SA: Committee Taps FTI Consulting as Financial Advisor INTELSAT SA: Committee Taps Prime Clerk as Information Agent INTELSAT SA: Creditors' Committee Taps Milbank LLP as Counsel JEP REALTY: July 29 Hearing on Disclosure Statement K.G. IM: Case Summary & 20 Largest Unsecured Creditors KHAN REAL ESTATE: Case Summary & 2 Unsecured Creditors M9 DEFENSE: U.S. Trustee Unable to Appoint Committee MARTIN MIDSTREAM: Reports $2.2-Mil. Net Loss for Second Quarter MCCLATCHY COMPANY: Egan-Jones Hikes Senior Unsecured Ratings to C MUJI U.S.A.: U.S. Trustee Unable to Appoint Committee NORTHLAND CORPORATION: Case Summary & 20 Top Unsecured Creditors NSHE CA BULLS: Creditors to Be Paid in Full in 180 Days in Plan NSHE CA BULLS: Status Report of Disclosure Statement PORCIER-MILLER: Voluntary Chapter 11 Case Summary PRINCETON AVENUE: Creditors Says Plan Can't Be Confirmed PYXUS INTERNATIONAL: Unsecured Claims are Unimpaired R.E.X. INC: Case Summary & 7 Unsecured Creditors REVLON CONSUMER: Commences Exchange Offer for 5.75% Senior Notes ROCKSTAR REMODELING: Gets Approval to Employ State Court Receiver SABLE PERMIAN: Seeks Approval to Tap Latham & Watkins as Counsel SABLE PERMIAN: Seeks to Hire Hunton Andrews as Co-Counsel SEQUA CORP: Moody's Hikes CFR to Caa2 & PDR to Caa2-PD SERES THERAPEUTICS: Widens Net Loss to $20.7M in Second Quarter SKILLSOFT CORP: Unsecured Claims Unimpaired in Plan SL GREEN: Moody's Alters Outlook on (P)Ba1 Ratings to Negative SONOCINE INC: Involuntary Chapter 11 Case Summary SUMMIT MIDSTREAM: Reports Preliminary Results of Exchange Offer SUNCREST STONE: Files Modification to 3rd Amended Plan SUNESIS PHARMACEUTICALS: Agrees to Pay Off $5.7 Million Bank Debt TAILORED BRANDS: Incurs $270 Million Net Loss in First Quarter TRIDENT TPI: Moody's Alters Outlook on B3 CFR to Stable TUPPERWARE BRANDS: Posts $63.8-Mil. Net Income in Second Quarter TWINS SPECIAL: Unsecureds Paid Prorata in 48 Monthly Installments US GC INVESTMENT: Hires Briggs Alexander as Litigation Counsel UTEX INDUSTRIES: Moody's Cuts CFR to Ca & Alters Outlook to Neg. VAC FUND HOUSTON: Unsecureds Get Beneficial Interest From Pool WATSON VALVE: Trustee Seeks Approval to Hire Special Counsel WOODLAWN COMMUNITY: Trustee Seeks Approval to Hire Auctioneer [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 1549 SE 14TH ST: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: 1549 SE 14th St, LLC 9620 NE 2nd Ave Ste 203 Miami Shores, FL 33138-2749 Business Description: 1549 SE 14th St, LLC is the owner of fee simple title to a property located 1448 SE 13th St, Fort Lauderdale, Florida, having a current value of $1.18 million. Chapter 11 Petition Date: July 29, 2020 Court: United States Bankruptcy Court Southern District of Florida Case No.: 20-18186 Judge: Hon. Jay A. Cristol Debtor's Counsel: Chad Van Horn, Esq. VAN HORN LAW GROUP, P.A. 330 N Andrews Ave Ste 450 Fort Lauderdale, FL 33301-1012 Tel: (954) 765-3166 E-mail: chad@cvhlawgroup.com Total Assets: $1,182,810 Total Liabilities: $2,033,802 The petition was signed by John Aaron, managing member/owner. 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/k20nbu 4920 LOUGHBORO: Case Summary & Unsecured Creditor ------------------------------------------------- Debtor: 4920 Loughboro Rd LLC 4920 Loughboro Rd. NW Washington, DC 20016 Business Description: 4920 Loughboro Rd LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: July 27, 2020 Court: United States Bankruptcy Court District of Columbia Case No.: 20-00318 Judge: Hon. S. Martin Teel, Jr. Debtor's Counsel: Ashvin Pandurangi, Esq. AP LAW GROUP, PLC 211 Park Ave. Falls Church, VA 22046 Tel: 571 969 6540 Email: ap@aplawg.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Hicham Moutawakil, owner. The Debtor listed DC Office of Tax and Revenue as its sole unsecured creditor holding a claim of $0. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/ZPNU8S A.E. CROSTHWAIT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: A.E. Crosthwait & Co., Inc. 640 West Madison Street Houston, MS 38851 Chapter 11 Petition Date: July 28, 2020 Court: United States Bankruptcy Court Northern District of Mississippi Case No.: 20-12414 Debtor's Counsel: Craig M. Geno, Esq. LAW OFFICES OF CRAIG M. GENO, PLLC 587 Highland Colony Parkway Ridgeland, MS 39157 Tel: 601-427-0048 Email: Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Allen E. Crosthwait, president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors at the time of the filing. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/gtI4Q8 AERKOMM INC: Subsidiary Partners with Airbus Interior Services -------------------------------------------------------------- Aerkomm Inc.'s wholly owned subsidiary in Malta, Aerkomm Pacific Ltd., has entered into an agreement with Airbus Interior Services for the Aerkomm K++ Connectivity Solution Installation on the Airbus A320 family of aircraft. As a fully-owned subsidiary of Airbus SAS, Airbus Interior Services provides current cabin upgrade solutions for Airbus aircraft operators while bringing additional flexibility and reduced lead times. Following an agreement Aircom Pacific Inc. signed with Airbus ACJ in November 2018 pursuant to which Airbus agreed to develop, install and certify the Aerkomm K++ System on a prototype A320 aircraft to EASA and FAA certification standards, Aerkomm Malta and Airbus Interior Services have signed a new agreement. Airbus Interior Services will provide and certify as per Airbus Design Organization Approval a complete retrofit solution to develop EASA/FAA certified Service Bulletins, to supply related Aircraft Modification Kits, and to install the Aerkomm K++ Connectivity solution on the A320 family of commercial aircraft. This new agreement also includes Airbus support for the integration of the Aerkomm K++ System components on the aircraft, including ARINC 791 structural reinforcements and related engineering work. Airbus Interior Services will provide support for National Airworthiness Authorities (NAA) certification as required over and above the EASA certification, as well as provide on-site technical support at the Maintenance Repair Organization (MRO) base for the aircraft retrofit. The AERKOMM K++ IFEC system is intended to provide passengers on A320 aircraft with an "at home" network experience using a Ka-band technology to give free access to on-board WiFi internet connectivity for all passengers' personal devices, including laptops, mobile phones and tablets. This system will additionally provide passengers with access to e-commerce amenities such as in-flight shopping and travel services. The Aerkomm K++ system will also be compatible with the next generation of LEO satellite technologies. The Airbus Interior Services Service Bulletin and Airbus kits for the AERKOMM K++ retrofit solution will be installed first on Hong Kong Airlines fleet of 12 Airbus A320 aircraft. Hong Kong Airlines will be Aerkomm's the first commercial airline customer. Mr. Louis Giordimaina, CEO of Aerkomm, commented, "This agreement with Airbus marks a new chapter in our development, as we take a big step forward in our partnership with Airbus for the provision of Service Bulletins and Aircraft Modification Kits to be installed on A320 family aircraft retrofitted with our Aerkomm K++ IFEC System. We are pleased that Hong Kong Airlines will be our first customer benefitting from this Airbus retrofit solution on their A320 fleet." "In addition, this agreement, as the first application of our technology to a commercial airline passenger fleet, is a milestone in the commercialization of our Aerkomm K++ IFEC system. We look forward to furthering our partnership with Airbus to implement our industry-leading technology." About Aerkomm Headquartered in Nevada, USA, Aerkomm Inc. -- http://www.aerkomm.com/-- is a full-service development stage provider of in-flight entertainment & connectivity (IFEC) solutions, intended to provide airline passengers with a broadband in-flight experience that encompasses a wide range of service options. Those options include Wi-Fi, cellular, movies, gaming, live TV, and music. The Company plans to offer these core services, which it is currently still developing, through both built-in in-flight entertainment systems, such as a seat-back display, as well as on passengers' own personal devices. Aerkomm recorded a net loss of $7.98 million for the year ended Dec. 21, 2019, compared to a net loss of $8.15 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $52.32 million in total assets, $8.13 million in total liabilities, and $44.19 million in total stockholders' equity. AGAPE BEAUVOIR MANOR: S&P Lowers Revenue Bond Rating to 'B+' ------------------------------------------------------------ S&P Global Ratings lowered its long-term rating to 'B+' from 'BBB-' on Biloxi Housing Authority, Miss.' multifamily housing revenue bonds, series 2012A, issued for Agape Beauvoir Manor Inc., Texas' Beauvoir Manor Apartments Project. The outlook is negative. The rating action on the bonds reflects implementation of S&P's "Methodology for Rating U.S. Public Finance Rental Housing Bonds," published on April 15, 2020. The ratings are no longer under criteria observation. "The rating reflects our view of the project's very weak coverage and liquidity assessment, very weak market position assessment, and weak/very weak management and governance assessment, as demonstrated by a highly volatile and negative operational and financial performance trend," said S&P Global Ratings credit analyst Jose Cruz. The negative outlook considers the pressure on the project's financial performance due to deferred maintenance identified in the Real Estate Assessment Center (REAC) report. Further declines in the REAC score could jeopardize the project's qualification for Section 8 assistance should the project be unable to renew its Housing Assistance Payment contract with the U.S. Dept. of Housing & Urban Development. The bonds were issued to finance the acquisition and rehabilitation of Beauvoir Manor Apartments in Biloxi, Miss., a 150-unit Section 8 multifamily residential rental housing development. As of Dec. 31, 2019, $4.06 million of the series 2012A bonds is outstanding. Proceeds were also used to fund separate debt service reserve fund accounts for the bonds, sized at six months' maximum annual debt service, and to pay certain costs of issuance of the bonds. ALCHEMY COPYRIGHTS: Moody's Assigns B1 CFR, Outlook Stable ---------------------------------------------------------- Moody's Investors Service has assigned to Alchemy Copyrights, LLC a B1 Corporate Family Rating and B1-PD Probability of Default Rating. In connection with this rating action, Moody's assigned a B1 rating to Concord's proposed senior secured credit facilities, consisting of a $450 million revolving credit facility and $400 million term loan B. The rating outlook is stable. Net proceeds from the debt raise will be used to fully refinance borrowings under the existing RCF and term loan A facility. Following is a summary of its rating actions: Assignments: Issuer: Alchemy Copyrights, LLC Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD $400 Million Senior Secured Term Loan B due 2027, Assigned B1 (LGD3) Issuer: Alchemy Copyrights, LLC (Co-Borrower: Boosey & Hawkes Holdings Limited) $450 Million Senior Secured Revolving Credit Facility due 2023, Assigned B1 (LGD3) Outlook Actions: Issuer: Alchemy Copyrights, LLC Outlook, Assigned Stable The assigned ratings are subject to review of final documentation and no material change to the size, terms and conditions of the transaction as advised to Moody's. RATINGS RATIONALE Concord's B1 CFR reflects the company's position as one of the leading independent music companies operating globally, with an attractive music repertoire that has longevity and good monetization characteristics. Concord has experienced substantial revenue growth over the past five years through acquisitions and organic means, which produced an extensive recorded music library and music publishing assets that drive high margin recurring revenue streams. The company benefits from a well-diversified business model across recorded music (45% of revenue), music publishing (38%) and theatricals (17%). Revenue is also fairly diversified across multiple music genres and license types (e.g., streaming, performance, mechanical, synchronization, grand rights, physical, etc.). The B1 rating is further reinforced by the resilient business model driven by higher margin digital streaming revenue, which Moody's estimates accounts for approximately 45% of total revenue. Moody's expects the company will experience 5%-7% average annual organic revenue growth (after the novel coronavirus subsides) driven by continued strong secular adoption of paid digital music streaming services by consumers, especially in underpenetrated overseas markets. Around 29% of revenue is derived from international markets, a credit positive. As a result of the continuing shift to streaming platforms combined with its attractive and extensive music catalog, Concord has demonstrated the ability to more than offset secular declines in physical media and digital downloads. The rating is constrained by Concord's small size and limited ability to internally fund its aggressive acquisition growth strategy, which relies primarily on financial support from the parent. The rating anticipates continued acquisition activity funded with a combination of equity and debt, which could lead to fluctuations in credit protection measures. It also factors in the seasonal working capital of the business, which produces working capital outflows in the March and September quarters when rights holders are typically paid, although for the entire year, Moody's expects working capital to remain relatively neutral. The rating also reflects the anticipated softness and declines in certain revenue segments due to the impact from the coronavirus (a.k.a. COVID-19) pandemic. Potential headwinds also include the slow transition from physical to digital among a few large countries and the music industry's revenue challenges that prevent full maximization of content value from user-uploaded videos to Concord's songwriters and rights holders. The B1 CFR also considers Concord's small size and de minimis market share in the global music industry relative to the three major music companies, Universal Music Group, Sony Music Entertainment and Warner Music Group. Moody's estimates the global music industry produced roughly $25.8 billion in annual revenue last year, which comprised the recorded music and music publishing sectors. The three majors collectively accounting for nearly 66% of the global market compared to an estimated 2% share for Concord. Offsetting factors include: (i) the industry's high-single digit secular growth trends; (ii) Concord's well-diversified and sizable catalog of well-known and timeless music copyrights and recordings that produce recurring license revenue; and (iii) the stable, high margin attributes associated with music publishing and catalog assets (87% of Concord's revenue), which tend to be less volatile than new release recordings. The company's exclusive distribution agreement with Universal Music is also a compensating factor. Since 2005, Universal has distributed Concord's recorded music worldwide, which accounts for about 5% of Universal's domestic market share. The agreement allows Concord to benefit from Universal's marketing resources and global reach as the world's largest music label, while also enabling the company to control the release schedule and marketing in key territories. Concord will also benefit from Universal's recent multi-year streaming rights deal with Spotify that gives Universal access to Spotify's marketing tools. Concord benefits from its historically high revenue growth profile, driven primarily by acquisitions of strategic music assets, and Moody's expectation that the company will continue to be acquisitive over the rating horizon. While catalog acquisitions provide diversification across music genres and help to sustain high EBITDA margins and drive annuity-like cash flows, their purchase price multiples have risen in recent years in tandem with the industry's return to growth. Following nearly two decades of revenue declines, the music industry has generated year-over-year growth since 2015, driven chiefly by listeners' increasing music adoption on paid streaming services. However, Concord's penchant to grow its music catalog via copyright acquisitions during this period led to a history of negative free cash flow generation (as calculated by Moody's). Moody's views the acquisition of intangible music assets, such as copyrights, as a capital expenditure given that music companies must continually invest in their libraries to drive incremental top line revenue. Accordingly, Moody's defines free cash flow as cash flow from operations fewer capital expenditures less acquisitions of intangible music assets less dividends. Excluding intangible music asset acquisitions from the definition would result in historically positive free cash flow generation. While most acquisitions fall in the $1-$30 million range, Concord has also made large business acquisitions, such as Imagem (in 2017) and Pulse Music Group and a large undisclosed publishing catalog acquisition (both completed in early 2020), further highlighting the acquisitive growth strategy. Traditional M&A is not factored in Moody's free cash flow calculation; however, the rating incorporates its expectation that Concord will continue to pursue medium-to-large sized acquisitions that will be prudently financed, but also potentially lead to unstable credit metrics if financed with sizable debt. Concord has historically relied on external equity funding from its ultimate parent, the State of Michigan Retirement System (SMRS), to offset cash flow shortfalls arising from music catalog purchases and M&A activity. Given the company's limited ability to internally fund its discretionary growth, Moody's views the parent's historical financial support and ability to provide consistent access to funding as a credit positive for the B1 rating. SMRS owns approximately 94% of Concord through various holding company entities residing above the borrower. The parent has contributed a significant amount of gross cash equity in Concord since 2017 to help fund nearly $1 billion in acquisitions and has refrained from taking a shareholder distribution since 2017. Moody's views SMRS as a long-term investor aligned with the company's strategic objectives and focused on growing Concord's music library. SMRS has a highly diversified investment strategy with approximately $70 billion in assets under management. Concord represents the largest asset in the real return and opportunistic segment of SMRS's portfolio, with prospects for future capital injections. As a government entity, SMRS cannot hold board seats and has retained an independent third-party fiduciary to represent it on Concord's board. In addition, Concord has opportunistically tapped the debt capital markets to help fund its acquisitive growth. Since 2017, gross debt has increased 2.3x while as-reported EBITDA expanded more than 2.5x. The B1 rating considers Concord's moderately high pro forma financial leverage of 5.4x total debt to EBITDA (as calculated by Moody's at LTM March 31, 2020) or 4.8x adjusted for current acquisitions' LTM EBITDA. While leverage has the propensity to decline primarily via solid EBITDA growth, given the large number of independent labels and music catalogs currently available for purchase, Moody's expects Concord to engage in future debt-funded acquisitions should opportunities arise, which will likely result in volatile credit metrics and leverage fluctuating in the 4.5x-6x range (as calculated by Moody's) over the rating horizon. Concord's leverage target is 4x as-reported (equivalent to approximately 4.25x as calculated by Moody's). Further, leverage reduction could be delayed over the next two years if management elects to put its equity stake in Concord to the parent starting in FY 2021. The proposed covenant package is designed to restrict the amount of a likely distribution to the lesser of $35 million or 25% of annual free cash flow (as defined in the proposed bank credit agreement) if leverage is above 4x (as defined). However, to the extent leverage falls below 4x or the covenant is waived or relaxed in the future, this could facilitate a sizable distribution, which could conceivably be financed with debt at the borrower resulting in higher-than-expected leverage. Moody's expects that the economic recession arising from the coronavirus pandemic on Concord's profitability will be relatively manageable given its license-based revenue model. However, Moody's estimates roughly 45% of Concord's revenue will be impacted by COVID-19 and expects revenue will decline in the low-to-mid single-digit range in 2020. This is mainly due to lower performance royalties arising from the cancellation or postponement of tours and live concerts (which, in turn, have slowed new releases); reduced synchronization revenue due to the temporary suspension of film, TV and advertising productions; and reduced theatrical revenue due to the suspension of plays, live musicals and theatrical productions. The stable outlook reflects Moody's view that Concord's license revenue model, driven by digital revenue growth, and operating profitability will remain fairly resilient during the ensuing economic recession. The outlook considers Moody's expectation for continued improvement in recorded music industry fundamentals combined with Concord's position as one of the world's largest independent music content providers with overseas diversification and an enhanced recorded music repertoire and music publishing assets. The company's revenue diversification across music genre and license type will help to partially offset the impact from COVID-19 related declines in performance, synchronization and theatricals revenue. 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 length of restrictions in regions where Concord operates as well as the timeline for fully reopening those economies. As a result, de-leveraging could be delayed with total debt to EBITDA rising to the 5.5x-6x area (as calculated by Moody's) due to moderating EBITDA in FY 2020 and then declining to around 5x in FY 2021, which is factored in the stable outlook. Moody's projects a global economic recession this year with the US and G-20 advanced economies contracting 5.7% and 6.4%, respectively, followed by a corresponding 4.5% and 4.8% rebound in 2021. Moody's expects Concord will maintain good liquidity over the next 12-15 months supported by cash levels of at least $20 million (cash balances totaled $60 million at March 31, 2020), access to the new $450 million RCF, of which $269 million is expected to be drawn at closing, and positive free cash flow generation of $25-$35 million (as calculated by Moody's) supplemented by cash equity contributions from the parent to cover potential shortfalls from discretionary M&A activity. 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. Concord's credit profile reflects the impact of the outbreak on its profitability given its exposure to the US economy, which has left it vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. A social impact that Moody's considers in Concord's credit profile is consumers' increasing shift to on-demand music streaming subscription services (access) from music purchases (ownership). Given that Concord owns the copyrights to highly desirable music content, the streaming providers have no other choice but to license the company's content for their platforms to remain competitive and ensure listeners have access to their favorite songs. This will continue to benefit Concord and support solid revenue and EBITDA growth fundamentals over the next several years. The State of Michigan Retirement System (SMRS) owns approximately 94% of Concord and has historically provided the company with financial support to help fund acquisitions. Moody's views the parent's long-term investment focus, cash equity support, strategic alignment and use of an independent fiduciary as positive factors that reduce governance risk. However, personnel changes in key roles at SMRS could occur in the future and alter the fund's investment strategy and continued support for the company. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Concord increases scale and exhibits sustained revenue growth, EBITDA margin expansion and higher returns on investment. Upward pressure on ratings could also transpire if Moody's expects total debt to GAAP EBITDA will decline below 4x (as calculated by Moody's) with retained cash flow to debt of at least 20% (as calculated by Moody's) on a sustained basis. Concord would also need to produce positive free cash flow to debt of 4% (as calculated by Moody's), maintain at least a good liquidity profile and exhibit prudent financial policies. Ratings could be downgraded if competitive pricing pressures led to declines in license revenue and organic revenue growth, or higher operating expenses (due to increased marketing or artist and repertoire investments in recorded music or new administration deals that produce lower margin revenue in music publishing) resulted in sustained EBITDA margin contraction. Sizable debt-financed acquisitions or shareholder distributions resulting in total debt to GAAP EBITDA sustained above 5x (as calculated by Moody's) beyond FY 2021 could also lead to ratings pressure. To the extent leveraging transactions result in higher sustained total debt to GAAP EBITDA than Moody's base-case expectation, ratings could be downgraded. Downward pressure could also occur if EBITDA or liquidity were to weaken resulting in retained cash flow to debt sustained below 10% (as calculated by Moody's) or the parent reduces its Concord ownership stake below 90%. Headquartered in Nashville, Tennessee, Alchemy Copyrights, LLC is a leading global independent music content provider. Concord's current catalog includes: a library of over 400,000 copyrights from more than 10,000 songwriters, artists and composers across a diverse range of music genres; 18 of the top 100 songs streamed on Spotify; and 284 Grammy-winning recordings. The company is owned by the State of Michigan Retirement System. Revenue totaled $448 million for the twelve months ended March 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. ALL AMERICAN: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: All American Transit Mix Corp. 46 Knickerbocker Avenue Brooklyn, NY 11237 Business Description: All American Transit Mix Corp. -- http://www.allamericantransitmix.com-- is a ready mix concrete supplier located in Brooklyn, New York. Its plant is approved by all NYS and NYC agencies, and it is a member of the NRMCA and Local 282. Involuntary Chapter 11 Petition Date: July 29, 2020 Court: United States Bankruptcy Court Eastern District of New York Case Number: 20-42783 Petitioners' Counsel: Joseph J. Vitale, Esq. Michael S. Adler, Esq. Melissa Woods, Esq. COHEN, WEISS AND SIMON LLP 900 Third Avenue, Suite 2100 New York, NY 10022 Tel: 212-563-4100 Email: madler@cwsny.com mwoods@cwsny.com List of Petitioning Creditors: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Local 282 Welfare Trust Fund Contributions $108,523 2500 Marcus Avenue due to benefit Lake Success, NY 11042 fund Local 282 Pension Trust Fund Contributions $54,015 2500 Marcus Avenue due to benefit Lake Success, NY 11042 fund Local 282 Job Training Contributions $784 Trust Fund due to benefit 2500 Marcus Avenue fund Lake Success, New York 11042 A full-text copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://is.gd/2MVsTk APEX LINEN: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Apex Linen Service, LLC and its affiliates. The committee members are: 1. Standard Textile Co. Inc. Attn: Michael Carman 1 Knollcrest Drive Cincinnati, OH 45237 Phone: 513-761-9256 (Ext. 2433) Email: mcarman@standardtextile.com 2. Gardner Machinery Corp. Attn: Richard Gardner P.O. Box 33818 Charlotte, NC 28233 Phone: 704-372-3890 Email: rgardner@gardnermachinery.com 3. GA Braun, Inc. Attn: Ronald P. Rossi 79 General Irwin, Blvd. North Syracuse, NY 13212 Phone: 315-475-3123 Email: rrossi@gabraun.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 Apex Linen Service Apex Linen Service LLC, a Las Vegas-based company, and its affiliates, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11774) on July 6, 2020. In the petitions signed by Chris Bryan, president and authorized representative, Apex Linen Service was estimated to have $10 million to $50 million in both assets and liabilities. Judge Laurie Selber Silverstein presides over the cases. Debtors have tapped Goldstein & McCintock LLLP as their bankruptcy counsel, GlassRatner Advisory & Capital Group LLC as chief restructuring officer, and Stretto as claims and noticing agent. ART VAN: Counsel Did Not Violate Wells Fargo Waiver, Court Says --------------------------------------------------------------- Chief Bankruptcy Judge Christopher S. Sontchi overrules the objection of the United States Trustee to the retention application of Benesch, Friedlander, Coplan & Aronoff LLP as bankruptcy counsel to Debtors Art Van Furniture, LLC and its affiliates. At issue is whether the Court should deny the application under Bankruptcy Code Section 327. The U.S. Trustee argued that Benesch violated its conflicts waiver with Wells Fargo, N.A. when, after the Debtors defaulted under the Interim Cash Collateral Order, Benesch worked with Wells Fargo to develop "post-suspension restructuring alternatives." Benesch opposed the Objection on the grounds that its post-default efforts and all necessary aspects of the Chapter 11 proceeding fell within the scope of its conflicts waiver. On March 4, 2020, four days before the Debtors' bankruptcy filing, Benesch received a $250,000 retainer from the Debtors. That same day, Wells Fargo granted specific consent for Benesch to represent Art Van Furniture in connection with the bankruptcy proceedings. On March 11, the Court entered the Interim Order (I) Authorizing the Debtors to Use Cash Collateral, (II) Granting Adequate Protection to the Prepetition Secured Parties, (III) Modifying the Automatic Stay, (IV) Scheduling a Final Hearing, and (V) Granting Related Relief. On March 16, 2020, the Debtors submitted an application for entry of an order authorizing the employment and retention of Benesch as bankruptcy counsel to the Debtors. On the same day, Benesch filed the Declaration of Jennifer Hoover in support of the Application and disclosed Wells Fargo as a current client of Benesch and the existence of the Waiver. On March 19, pursuant to paragraph 21 of the Interim Cash Collateral Order, Wells Fargo issued a Notice of Events of Default, which terminated the Debtors' right to use Cash Collateral, other than as permitted during the Remedies Notice Period (which expired on April 6). Following these events, Benesch continued to work with advisors for Wells Fargo and the Official Committee of Unsecured Creditors to develop "post-suspension restructuring alternatives." These efforts were unsuccessful and on April 3, the Debtors filed a motion to convert the Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code. On April 6, 2020, the U.S. Trustee filed an objection to the Debtors' Application for approval of Benesch's hiring. On this same day, Benesch filed a supplemental declaration in which the Debtors disclosed additional conflict waivers obtained from PNC and KKR. The Court also entered an order on April 6 converting the Debtors' cases to Chapter 7. On April 24, 2020, Benesch filed a reply and a second supplemental declaration of Ms. Hoover in support of the Application. On May 29, 2020, the Debtors filed a third supplemental declaration of Ms. Hoover along with the declaration of Michael J. Barrie in support of the Applications. On June 3, 2020, the Court held a hearing in connection with the Application. The U.S. Trustee is the only party that objected to the Application. At all relevant times, Benesch represented the Debtors in these Chapter 11 cases and Wells Fargo, the Debtors' ABL Lender, in unrelated matters. As a result, Benesch obtained conflict waivers from both the Debtors and Wells Fargo. Paragraphs three and four of the Wells Fargo Waiver form the core of the disagreement between the parties. These paragraphs contain the terms "Dispute" and "Transaction," which have been defined in and expressly incorporated from the Wells Fargo Conflicts Policy. Wells Fargo's Conflicts Policy defines "Dispute" as "[a] pending, threatened, or likely litigation, arbitration, bankruptcy, adversary proceeding, contested motion, discovery, discovery, alternative dispute resolution process or loan workout, including without limitation, any foreclosure or collection action." It defines "Transaction" as "[a]ny matter which is not a Dispute." The U.S. Trustee contends Benesch represented the Debtors in workout or restructuring efforts following the Debtors' March 19 default under the Interim Cash Collateral Order. The U.S. Trustee argues that this representation is beyond the scope of the Waiver, which purportedly "appears not to allow Benesch to represent the Debtors in a dispute arising out of a transaction . . . or in a workout or restructuring of any related transaction in the context of a default." Benesch insists that it is compliant with the Bankruptcy Code Section 327's requirements for the retention of professionals. The firm asserts that it neither holds nor represents an interest adverse to the Debtors or their estates. Benesch asserts that at no point during the process of obtaining consent did Wells Fargo ever indicate "that the waiver would not encompass the adverse representation of the Debtors during their chapter 11 cases in matters relating to the Debtors' access to and use of cash collateral or other matters likely to arise in the course of Benesch's representation of the Debtors as their general bankruptcy counsel." Benesch contends that the Waiver encompassed "all necessary aspects" of the Art Van engagement, which the Waiver defined as "a liquidation of [Art Van Furniture Inc.], including a potential Chapter 11 Bankruptcy Proceeding. As such, it argues that, under the Waiver, its post-default cash collateral negotiations are a "Dispute" and, therefore, that the final sentence of paragraph three -- which concerns "the Transaction" -- is inapplicable. In the alternative, the firm argues that even if the "Art Van Liquidation" qualified as "the Transaction," the broad definition of its engagement "necessarily includes everything involved 'in a potential Chapter 11 Bankruptcy Proceeding.'" The Court does not find that the U.S. Trustee has met its burden in connection with its objection to Benesch'S hiring as bankruptcy counsel to the Debtors. The Court does not find that Benesch violated the Waiver when, after the Debtors defaulted under the Interim Cash Collateral Order, Benesch negotiated with Wells Fargo and other parties in interest to develop "post-suspension restructuring alternatives." More generally, the Court does not find sufficient evidence in the record of either an actual conflict or a potential conflict that would require the disqualification of Benesch's Application. Consequently, Benesch's retention application will be granted. Benesch is directed to submit a proposed form of order under certification of counsel. The bankruptcy case is in re: ART VAN FURNITURE, LLC, et al., Chapter 11, Debtors, Case No. 20-10553 (CSS) (Bankr. D. Del.). A copy of the Court's Opinion dated July 21, 2020 is available at https://bit.ly/39AvyWC from Leagle.com. BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP Gregory W. Werkheiser -- gwerkheiser@beneschlaw.com -- Michael J. Barrie -- mbarrie@beneschlaw.com -- Jennifer R. Hoover -- jhoover@beneschlaw.com -- Kevin M. Capuzzi -- kcapuzzi@beneschlaw.com -- Kate Harmon , John C. Gentile , Wilmington, DE. ANDREW R. VARA , UNITED STATES TRUSTEE, Linda R. Richenderfer Trial Attorney Office of the United States Trustee, Wilmington, DE. About Art Van Furniture Art Van Furniture, LLC, and 12 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8, 2020. Art Van was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Art Van was a brick-and-mortar furniture and mattress retailer headquartered in Warren, Michigan. At the time of filing, the Company operated 169 locations, including 92 furniture and mattress showrooms and 77 freestanding mattress and specialty locations. The Company did business under brand names, including Art Van Furniture, Pure Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress, and Wolf Furniture. The Company was founded in 1959 and was owned by its founder, Art Van Elslander, until it was sold to funds affiliated with Thomas H. Lee Partners, L.P. in March 2017. As part of this transaction, THL acquired the operating assets of the Company and certain real estate investment trusts, who closed the transaction alongside THL, acquired the owned real estate portfolio of the Company, and entered into long-term leases with Art Van. The proceeds from the sale-leaseback transaction were used to fund the purchase price paid to the selling shareholders. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as counsel. Kurtzman Carson Consultants LLC served as the claims agent. At the Debtors' behest, the Bankruptcy Court entered an order on April 6, 2020, converting the Debtors' cases to Chapter 7. BILLINGS LODGE: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- Gregory Garvin, acting U.S. trustee for Region 18, appointed a committee to represent unsecured creditors in the Chapter 11 case of Billings Lodge No. 394, Benevolent and Protective Order of Elks of United States of America, Inc. The committee members are: 1. James & Mary Bennett 3840 Rimrock Rd., Apt. 2216 Billings, MT 59106 2. Duncan Burford 3856 Avenue C Billings, MT 59102 3. Russ & Karen Fagg 3053 Thousand Oaks St. Billings, MT 59102 4. Jeanette Moran 1424 Parkhill Dr. Billings, MT 59102 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 Billings Lodge No. 394 Billings Lodge, No. 394, Benevolent and Protective Order of Elks of United States of America, Inc. is a tax-exempt civic and social organization. It is a Billings, Montana-based fraternal organization that hosts various civic events and social gatherings like wedding receptions, meetings and other functions. Billings Lodge filed a voluntary Chapter 11 bankruptcy petition (Bankr. D. Mon. Case No. 20-10110) on June 5, 2020. The petition was signed by Jeffery R. Isom, exalted ruler. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Debtor has tapped Felt Martin PC as its legal counsel and Heidi Giem of Paigeville Accounting, LLC as its accountant. BIZNESS AS USUAL: Dalin Funding Objects to Plan Disclosures ----------------------------------------------------------- Dalin Funding, LP, objects to the Disclosure Statement explaining the Chapter 11 Plan filed by Bizness as Usual Inc. According to Dalin Funding, the Debtor must identify and disclose all 'property of the estate' including all of the Debtor's 'legal and equitable' property interests. Dalin Funding points out that the Debtor fails to adequately describe how it will disallow the claims of Dalin and how it will discharge all of the filed mortgages and assignments of rent. Dalin Funding asserts that the Debtor has the burden of proving that a disclosure statement is adequate, including showing that the plan is confirmable or that defects might be cured or involve material facts in dispute. Dalin Funding complains that the success of Debtor's Plan hinges on a speculative, undescribed, undefined claim against Dalin. According to Dalin Funding,as in In re Am. Capital Equip., LLC, the Plan "is simply not reasonably likely to succeed and therefore, is not feasible." Dalin Funding points out that the Plan blatantly, and without and factual or legal basis, discriminates against Dalin, a secured creditor. Dalin Funding asserts that the Debtor's Plan fails to explain how the Properties will be sold free and clear of Dalin's perfected security interests to fund the Plan. Counsel for Dalin Funding, LP: Daniel D. Haggerty, Esquire KANG HAGGERTY & FETBROYT LLC 123 S. Broad Street, Suite 1670 Philadelphia, PA 19109 Tel: (215) 525-5850 Fax: (215) 525-5860 E-mail: dhaggerty@KHFlaw.com About Bizness as Usual Bizness as Usual Inc. filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 19-16477) on Oct. 15, 2020. The Debtor's counsel is Michael P. Kutzer, Esq. BIZNESS AS USUAL: Philadelphia Says Plan Speculative ---------------------------------------------------- City of Philadelphia, a secured and priority creditor, objects to the motion to approve the Disclosure Statement of Bizness as Usual, Inc. The City points out that the Disclosure Statement lacks adequate information and includes statements and provisions that are contrary to law. The City asserts that the Disclosure Statement lacks the following: a Chapter 7 liquidation analysis; financial projections; the basis for the valuation of the Debtor's assets; an explanation of the risks inherent in the Plan; an explanation as to why and how Dalin’s claims will be entirely eliminated and information regarding marketing efforts for the sale of properties that will fund the Plan. The City complains that the Plan is speculative and not feasible. According to City, the Debtor cannot realistically carry out its Plan. The City points out that the Debtor has not referenced any marketing efforts with respect to any of the properties it proposes to sell. The City asserts that the Debtor is unable to demonstrate "reasonable prospects of financial stability and success" or that the plan presents a "workable scheme of organization and operation from which there may be a reasonable expectation of success." About Bizness as Usual Bizness as Usual Inc. filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 19-16477) on Oct. 15, 2020. The Debtor's counsel is Michael P. Kutzer, Esq. BIZNESS AS USUAL: UST Notes of Deficiencies on Disclosures ---------------------------------------------------------- The United States Trustee for Region 3 objects to the Bizness as Usual, Inc.'s Motion for Approval of its Disclosure Statement. The U.S. Trustee asserts that the Debtor fails to disclose the impact on his ability to successfully perform and complete his obligations under his proposed plan if he is unsuccessful with any objections or other actions. The U.S. Trustee complains that the Disclosure Statement should state which properties are encumbered by creditors' claims and the amount of such encumbrances on each property. The U.S. Trustee points out that the Disclosure Statement contains no information regarding what remedies, if any, creditors have if the Debtor fails to perform its obligations under the Plan, as it appears from the Disclosure Statement that there can never be a default. According to the U.S. Trustee, the Debtor's description of its ability to make the monthly payments proposed in its Plan as well as its description of the results of its operations are not supported by the financial information attached to the Disclosure Statement. About Bizness as Usual Bizness as Usual Inc. filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 19-16477) on Oct. 15, 2020. The Debtor's counsel is Michael P. Kutzer, Esq. CARBO CERAMICS: Unsecureds Get Pro Rata Share of GUC Cash Pool -------------------------------------------------------------- CARBO Ceramics Inc., et al., submitted a Second Amended Joint Chapter 11 Plan of Reorganization. The Classes are treated as follows: * Class 3 Prepetition Lender Secured Claims. The Prepetition Lender Claims in Class 3 shall be deemed Allowed in the amount of not less than $20,000,000. Each Holder of an Allowed Prepetition Lender Secured Claim shall receive, together with its recovery on account of its DIP Facility Claims, its Pro Rata share of the DIP Lender/Prepetition Lender Equity Distribution. Class 3 is Impaired. * Class 4 General Unsecured Claims. Each Holder of an Allowed General Unsecured Claim against a Debtor will receive its Pro Rata share of (i) the portion of the GUC Cash Pool allocated to Holders of Allowed General Unsecured Claims of such Debtor pursuant to the Plan, and (ii) as applicable, the Liquidating Trust Interests to the extent allocated to Holders of Allowed General Unsecured Claims of such Debtor pursuant to the Plan; provided, however, that the Supporting Lenders waive their right to a distribution on account of their respective Prepetition Lender Deficiency Claims against each Debtor. Class 4 is Impaired. * Class 7 – Section 510(b) Claims and Class 8 – CARBO Interests. On the Effective Date, all Section 510(b) Claims and CARBO Interests shall be cancelled, released, discharged, and extinguished. Holders of Section 510(b) Claims and CARBO Interests shall not receive any distribution on account thereof. Classes 7 and 8 is Impaired. Sources of Plan Consideration are Cash on Hand/DIP Facility Borrowings, Issuance and Distribution of Reorganized CARBO Interests, Exit Facility and Liquidating Trust Note. A full-text copy of the Second Amended Joint Chapter 11 Plan of Reorganization dated June 17, 2020, is available at https://tinyurl.com/y6vb4534 from PacerMonitor.com at no charge. Counsel for the Debtors: Paul E. Heath Matthew W. Moran Garrick C. Smith Matthew D. Struble VINSON & ELKINS LLP Trammell Crow Center 2001 Ross Avenue, Suite 3900 Dallas, TX 75201 - and - David S. Meyer Michael A. Garza VINSON & ELKINS LLP The Grace Building 1114 Avenue of the Americas New York, New York 10036-7708 About CARBO Ceramics CARBO Ceramics Inc. -- https://carboceramics.com/ -- is a global technology company providing products and services to the oil and gas, industrial, and environmental markets. CARBO offers oilfield ceramic technology products, base ceramic proppant, and frac sand proppant for use in the hydraulic fracturing of oil and natural gas wells. Asset Guard Products Inc., a subsidiary of CARBO, offers products intended to protect operators' assets, minimize environmental risks, and lower lease operating expenses through spill prevention, containment, and countermeasure systems for the oil and gas industry. StrataGen, Inc., another subsidiary, offers fracture consulting and data services and provides a suite of stimulation software solutions used for designing fracture treatments and for on-site real-time analysis to assist E&P companies in the efficient completion of wells and enhancement of oil and natural gas production. CARBO Ceramics Inc. and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-31973) on March 29, 2020. At the time of the filing, the Debtors were estimated to have assets of between $100 million and $500 million and liabilities of the same range. Judge Marvin Isgur oversees the cases. The Debtors tapped Vinson & Elkins LLP as bankruptcy counsel; Okin Adams LLP as special counsel; Perella Weinberg Partners L.P. and Tudor Pickering, Holt & Co. as investment banker; FTI Consulting, Inc. as financial advisor; Ernst & Young LLP, KPMG LLP, and Weaver and Tidwell L.L.P. as accountants and tax advisors. Prime Clerk, the claims agent, maintains this website https://dm.epiq11.com/case/crc/info. The Office of the U.S. Trustee appointed a committee of unsecured creditors on April 14, 2020. The committee is represented by Foley & Lardner LLP. GlassRatner Advisory & Capital Group, LLC, is the committee's financial advisor. CBL & ASSOCIATES: Continues to Engage in Negotiation with Lenders ----------------------------------------------------------------- CBL & Associates Limited Partnership, the majority owned subsidiary of CBL & Associates Properties, Inc. (the "REIT"), and certain subsidiary guarantors previously reported their entry into (i) a Forbearance Agreement with certain beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders of beneficial owners of in excess of 50% of the aggregate principal amount of the Operating Partnership's 5.25% senior unsecured notes due 2023, as amended by the First Amendment to the 2023 Notes Forbearance Agreement, dated July 15, 2020 and the Second Amendment to the 2023 Notes Forbearance Agreement, dated July 22, 2020, pursuant to which among other provisions, the 2023 Holders agreed to forbear from exercising any rights and remedies under the indenture governing the 2023 Notes solely with respect to any default resulting from the nonpayment of the $11.8 million interest payment that was due and payable on June 1, 2020, including the failure to make such payment by the end of the 30-day grace period and (ii) a Forbearance Agreement with Wells Fargo Bank, National Association, as administrative agent for the lenders party to the Credit Agreement, dated as of Jan. 30, 2019, as amended by the First Amendment to the Bank Forbearance Agreement, dated July 15, 2020 and the Second Amendment to the Bank Forbearance Agreement, dated July 22, 2020, pursuant to which among other provisions, the Agent, on behalf of itself and the Lenders, agreed to forbear from exercising any rights and remedies under the Credit Agreement solely with respect to the Specified Defaults, including the cross-default resulting from the failure to pay the 2023 Notes Interest Payment or the 2026 Notes Interest Payment. As previously reported, on July 15, 2020, the Operating Partnership, the Subsidiary Guarantors and the REIT, as a limited guarantor entered into a Forbearance Agreement with certain beneficial owners and/or investment advisors or managers of discretionary funds, accounts or other entities for the holders or beneficial owners of in excess of 50% of the aggregate principal amount of the Operating Partnership's 5.95% senior unsecured notes due 2026, as amended by the First Amendment to the 2026 Notes Forbearance Agreement, dated July 22, 2020, pursuant to which, among other provisions, the 2026 Holders agreed to forbear from exercising any rights and remedies under the indenture governing the 2026 Notes solely with respect to the default resulting from the nonpayment of the $18.6 million interest payment that was due and payable on June 15, 2020, including the failure to pay the 2026 Notes Interest Payment by the end of the 30-day grace period. As previously reported, on July 22, 2020, the respective parties to each such agreement, entered into amendments to further extend the forbearance period to July 27, 2020 with respect to the 2023 Notes and the 2026 Notes, and July 29, 2020 with respect to the Credit Agreement and, each agreed to provide for further automatic extension of the forbearance period under such agreement by written notice from the 2023 Holders, the 2026 Holders and the required Lenders, respectively, setting forth the modified date and time of the expiration of the forbearance period. On July 27, 2020, the Operating Partnership received notice from each of the 2023 Holders and the 2026 Holders respectively extending the forbearance period under each of the 2023 Notes Forbearance Agreement and the 2026 Notes Forbearance Agreement to July 29, 2020. As previously reported, the Company elected to not make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment and, as provided for in the indenture governing the 2023 Notes and the 2026 Notes, to enter the respective 30-day grace periods to make such payments. The Operating Partnership did not make either of the 2023 Notes Interest Payment or the 2026 Notes Interest Payment on the last day of the respective 30-day grace periods. The Operating Partnership's failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment is considered an "event of default" with respect to each of the 2023 Notes and the 2026 Notes, which results in a cross default under the Credit Agreement. While the events of default are continuing under the indenture, the Trustee or the holders of at least 25% in principal amount of the 2023 Notes may declare the 2023 Notes to be due and payable immediately and the Trustee or the holders of at least 25% in principal amount of the 2026 Notes may declare the 2026 Notes to be due and payable immediately. While the events of default are continuing under the Credit Agreement, the Agent may and shall upon the direction of the requisite lenders, declare the loans thereunder to be immediately due and payable. Further, if any of the 2023 Notes, the 2026 Notes or the Credit Agreement were accelerated, it would trigger an "event of default" under the Operating Partnership's 4.60% senior unsecured notes due 2024, which could lead to the acceleration of all amounts due under those notes. The Company is continuing to engage in negotiations and discussions with the holders and lenders of the Company's indebtedness. There can be no assurance, however, that the Company will be able to negotiate acceptable terms or to reach any agreement with respect to its indebtedness. About CBL Properties Headquartered in Chattanooga, TN, CBL Properties -- http://www.cblproperties.com-- owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL's portfolio is comprised of 108 properties totaling 68.2 million square feet across 26 states, including 68 high-quality enclosed, outlet and open-air retail centers and 9 properties managed for third parties. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. CBL & Associates reported a net loss of $131.72 million for the year ended Dec. 31, 2019, compared to a net loss of $99.23 million for the year ended Dec. 31, 2018. * * * As reported by the TCR on June 1, 2020, Moody's Investors Service downgraded the ratings of CBL & Associates Limited Partnership, including the corporate family rating to Ca from Caa1 and senior unsecured debt to C from Caa3. The rating downgrade reflects Moody's expectation that CBL's liquidity profile will erode rapidly in the next two quarters. CBL & ASSOCIATES: Egan-Jones Lowers Sr. Unsecured Ratings to D -------------------------------------------------------------- Egan-Jones Ratings Company, on July 20, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by CBL & Associates Properties Inc. to D from CCC. EJR also downgraded the rating on commercial paper issued by the Company to D from C. Headquartered in Chattanooga, Tennessee, CBL & Associates Properties Inc. CBL & Associates Properties, Inc. is a self-managed and self-administered real estate investment trust. CENOVUS ENERGY: Fitch Rates Sr. Unsecured Notes Due 2025 'BB+' -------------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR4' rating to Cenovus Energy Inc.'s senior unsecured 2025 notes. Proceeds are earmarked to repay the company's revolver balances and other short-term indebtedness, which stood at CAD1.77 billion as of the end of Q2. The notes will be issued under the company's existing indentures. Cenovus' ratings are supported by its size and scale; the benefits of a partial integrated business model, which includes its two US jv refineries; its relatively low sustaining capital; the moderate decline rates associated with the oil sands; and CVE's commitment to defending the balance, sheet including a track record of significant debt reductions prior to the recent pandemic. Ratings concerns are significant and include the higher fixed costs and lower realizations associated with oil sands operations; the high volatility recently seen with WCS differentials; the material gross debt additions made by the company recently; and the risk that a second wave of the pandemic could depress oil prices and hinder company plans to reduce leverage, resulting in prolonged weaker credit metrics. KEY RATING DRIVERS Higher Leverage: CVE's gross debt rose significantly in Q2, with borrowings across committed and uncommitted facilities increasing to approximately CAD1.77 billion versus CAD697 million in Q1 (and CAD265 million at YE 2019). While several non-recurring items, including inventory write-offs and transitional rail costs, contributed to the increase, the magnitude of CVE's debt increase is an outlier among E&P peers and reflects the higher fixed costs associated with oil sands operations. Volatile Q2 Results: In 1H20, CVE saw sharp COVID-linked declines in its reported financial results, including a loss of CAD57 million in upstream operating margin (versus positive CAD2,014 the year prior), and a refining & marketing loss of CAD241 million (versus positive CAD502 million the year prior). WCS dropped to below USD5 per barrel in April before sharply rebounding later in the quarter. The company announced an initial 60,000 bpd cut at Christina Lake that was subsequently reversed as WCS prices recovered. Current WCS prices in the low USD30 range, if sustained, should support positive FCF generation. Weak Near-Term Metrics: In its base case, Fitch expects the company's near-term leverage to be weak but improve due to both a rising price deck (WTI 2021: USD42, 2022: USD50, 2023: USD52) and the repayment of gross balance sheet debt out of FCF. Fitch forecasts CVE's debt/EBITDA to decline below 2.5x by 2022 in its base case but note the company's ability to de-lever would be considerably slower in a low $40 WTI price environment. As calculated by Fitch, if recent strip oil prices were sustained, CVE's leverage would decline to only around 4.2x in 2022 and 3.5x by 2023. Capex Reduction: In response to the downturn, CVE announced two rounds of capex cuts, with currently projected spending around CAD800 million. This includes cuts in discretionary capex, Deep Basin spending, and other programs. CVE also suspended its crude-by-rail program given the price collapse has rendered rail uneconomic in the near term. CVE continues to pay charges for the rail program but at a reduced level (CAD18-20 million versus CAD80 million per month). Additional Policy Responses: In the event of a prolonged downturn, Fitch thinks incremental capex cuts are likely given the company's relatively low decline rate, which mitigates the treadmill issues seen among shale producers. Asset sales and equity raises are less likely given the ongoing difficult market for Canadian upstream assets and issues over equity dilution. The company has already cut its dividend. Curtailment Beneficial: Over the longer term, Fitch views the provincial oil curtailment as beneficial for oil sands producers given its ability to mitigate downside volatility for WCS differentials. The policy, which aligns producers like CVE with the revenue interests of the province, provides a net benefit to WCS exposed companies. When favorable pricing returns, CVE should have an above average ability to grow its production under the curtailment, given its crude by rail contracts which are exempted under the ban. However, rail remains more expensive than pipeline capacity and is currently well out of the money. Downstream Integration Benefit: CVE is partially integrated through its 50% stake in crude oil refining jv WRB. This jv creates moderate diversification benefits for the company. CVE's two U.S. jv refineries, Wood River and Borger, have 495,000 bpd of processing capacity (50% net to CVE, and 50% to Phillips 66, the operator). These refineries are capable of running up to 275,000 bpd of heavy crude. On a run rate basis, CVE's share of the jv covers approximately 25% of the company's forecast blended heavy oil production. Refining fundamentals are under pressure in the current environment. Crude utilization for the jv refineries fell to 66% in Q2. DERIVATION SUMMARY At 465,415 boepd (before royalties), CVE's size is above average for peer E&Ps, and is larger than companies like NBL (BBB/RWP), HES (BBB-/Stable) and Murphy (BB+/Negative) but smaller than Ovintiv (BBB-/Negative). Basin diversification is limited given a concentrated position in the Canadian Oil Sands but is offset by the company's refining jv, and to a lesser degree, short cycle Deep Basin assets. As calculated by Fitch, CVE's cash margins are low versus peers, which led to debt increases in the current downturn. While CVE has a high percentage of oil production, its netbacks have historically been restrained by the WCS prices, which have seen very high volatility in the coronavirus pandemic. This exposure to WCS and additional fixed costs adds a layer of cash flow volatility (and headline risk) that most other E&Ps lack. The level of CVE's integration/transportation arrangements, which hedge against this volatility, is material but remains lower than that of bigger Canadian competitors like Suncor and Canadian Natural Resources. Offsetting this exposure is the company's commitment to lower debt levels, robust self-help corporate actions Cenovus has taken to defend credit quality, good historical FCF profile, and comparatively shallow decline rate. KEY ASSUMPTIONS -- Base Case WTI oil price of USD32 in 2020, USD42 in 2021, USD50 in 2022, and USD52 in 2023 and the long term; -- WCS differential of just under USD11/barrel in 2020, rising to USD15-16/barrel by the end of the forecast; -- 2020 production of 465,000 boepd, rising to 495,000 boepd by the end of the forecast; -- FCF applied primarily to gross debt repayment over the life of the forecast; -- Capex of CAD800 million in 2020, rising in line with a rising price deck; -- No dividends or buybacks over the remainder of the forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained improvement in oil market fundamentals and pricing; -- Sustained debt/EBITDA at or below 2.6x; -- Continued progress in de-levering and lowering break-evens resulting in more competitive unit economics; -- Long-term resolution of oil sands takeaway issues for the company. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Another leg down in oil prices fundamental resulting in weaker base case credit metrics; -- Sustained debt/EBITDA above 3.3x; -- Failure to maintain adequate liquidity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Liquidity and Debt Structure: Cenovus' liquidity is reasonable. At June 30, 2020, the company had CAD152 million of cash equivalents, committed credit facilities of CAD5.6billion, as well as uncommitted credit facilities. At the end of Q2, just under CAD1.5 billion was drawn on the committed facilities and CAD299 million on the uncommitted facilities, leaving CAD4.1 billion in committed capacity and CAD301 million of uncommitted facilities. Maturities Profile Manageable: Cenovus has a manageable maturity profile, with its next maturities due USD500 million in 3.0% notes due August 2022, and USD450 million in 3.8% notes due in September 2023. Covenant restrictions across CVE's debt instruments are light. The company's main financial covenant is a maximum debt-to-capitalization ratio of 65%. ESG CONSIDERATIONS Cenovus has an ESG Relevance Score of 4 for Exposure to Social Impacts, due to high exposure to pipeline and logistics takeaway capacity, which has been delayed multiple times due to social resistance to pipelines in Canada. This has increased volatility around the Canadian oil price differential, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. 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). SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. CENOVUS ENERGY: Moody's Rates Senior Unsecured Notes 'Ba2' ---------------------------------------------------------- Moody's Investors Service rated Cenovus Energy Inc.'s senior unsecured notes offering Ba2. The proceeds of the US$750 million unsecured notes offering will be used to repay short-term debt. Cenovus' Ba2 corporate family rating, Ba2-PD probability of default rating, Not Prime commercial paper rating and negative outlook are unchanged. Assignments: Issuer: Cenovus Energy Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD4) RATINGS RATIONALE Cenovus' Ba2 CFR benefits from: 1) a partially integrated business model that helps mitigate wide and volatile Canadian light-heavy oil differentials; 2) a long-lived, low decline, and sizable bitumen production and reserve base; and 3) good liquidity. Cenovus' rating is challenged by 1) its concentration in largely one geographic location, the Foster Creek and Christina Lake (FCCL) steam-assisted gravity drainage projects; 2) low cash flow generation leading to negative free cash flow in 2020 and weak credit metrics through 2020 and likely 2021; and 3) Deep Basin natural gas and liquids-rich natural gas assets that provide low returns. Cenovus has good liquidity. Pro forma for the notes offering and at June 30, 2020, Cenovus has C$152 million of cash and C$3.7 billion available under its C$4.5 billion revolving credit facilities (C$1.2 billion matures November 2022 and C$3.3 billion November 2023). Cenovus will have breakeven free cash flow through Q2 2021. Cenovus will be well in compliance with its sole financial covenant (Debt to Cap below 65%) through this period. Cenovus' senior unsecured notes are rated Ba2, at the CFR, as all the debt in the capital structure is unsecured. The negative outlook reflects its expectation that retained cash flow to debt could be below 15% in 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if retained cash flow to debt moves towards 30% and if Cenovus maintains its operating and capital cost structure at FCCL. The ratings could be downgraded if retained cash flow to debt remains below 15% or if FCCL operating cost structure deteriorates. Cenovus is a Calgary, Alberta-based exploration and production company with interests in downstream refinery assets. Cenovus had approximately 3.8 billion barrels of oil equivalent of net proved reserves, and produced (net of royalties) about 460 thousand boe/d in Q2 2020. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. CHESAPEAKE ENERGY: Hires Alvarez & Marsal as Restructuring Advisor ------------------------------------------------------------------ Chesapeake Energy Corporation and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Alvarez & Marsal North America, LLC as their restructuring advisor. A&M will render the following restructuring support services: (a) assist Debtors in the preparation of financial-related disclosures required by the court; (b) assist Debtors with information and analyses required pursuant to their debtor-in-possession financing; (c) identify and implement short-term cash management procedures; (d) identify and perform cost/benefit evaluations of Debtors' executory contracts and leases; (e) provide general technical accounting support services; (f) assist Debtors' management team and legal counsel focused on the coordination of resources related to the ongoing reorganization effort; (g) assist in the preparation of financial information for distribution to creditors and other parties; (h) attend meetings and assist in discussions; (i) analyze creditor claims by type and entity; (j) assist in the preparation of information and analysis necessary to confirm a plan of reorganization; (k) evaluate and analyze avoidance actions; (l) analyze or prepare information necessary to assess the tax attributes related to the confirmation of the plan; and (m) provide litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by Debtors. The hourly rates for the firm's corporate restructuring professionals are as follows: Managing Directors $900 – $1,150 Directors $700 – $875 Analysts/Associates $400 – $675 The hourly billing rates for the case management professionals are as follows: Managing Directors $850 – $1,000 Directors $675 – $825 Analysts/Consultants $400 – $625 A&M received a retainer in the amount of $500,000. In the 90 days prior to Debtors' bankruptcy filing, the firm received retainers and payments totaling $5,669,381.51. John Stuart, a managing director at A&M, disclosed in court filings that the firm is a "disinterested person" within the meaning of Bankruptcy Code Section 101(14). The firm can be reached through: John Stuart Alvarez & Marsal North America, LLC 2100 Ross Avenue, 21st Floor Dallas, TX 75201 Telephone: (214) 438-1000 Facsimile: (214) 438-1001 Email: jstuart@alvarezandmarsal.com About Chesapeake Energy Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. Debtors have tapped Kirkland & Ellis LLP as legal counsel; Jackson Walker LLP as co-counsel and conflicts counsel; Alvarez & Marsal as restructuring advisor; Rothschild & Co and Intrepid Financial Partners as financial advisors; and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information. Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel; RPA Advisors, LLC as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc. has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. CHESAPEAKE ENERGY: Seeks Court Approval to Hire Investment Bankers ------------------------------------------------------------------ Chesapeake Energy Corporation and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Rothschild & Co US, Inc. and Intrepid Partners, LLC as their investment bankers. The firms will render the following services: (a) identify or initiate potential transactions; (b) meet with Debtors' management and third-party engineering firm to gain understanding of their assets, business and prospects; (c) review and analyze Debtors' business plans and financial projections; (d) review estimates of Debtors' proved, probable, possible and contingent reserves and resources and compare these estimates to their business plans, financial projections and historical results; (e) evaluate debt capacity and liquidity requirements in light of Debtors' business plans and financial projections and assist in the determination of an appropriate capital structure for Debtors; (f) provide Debtors with market updates on the oil and gas industry sector and performance; (g) review the impact to Debtors' net present value of various potential drilling and development plan scenarios, commodity price forecasts and midstream and other operating assumptions; (h) assist Debtors in performing valuation analyses with respect to their businesses and assets; (i) assist Debtors and their other bankruptcy professionals in reviewing the terms of any proposed transaction, in responding thereto and, if directed, in evaluating alternative proposals for a transaction; (j) determine a range of values for Debtors and any securities that they offer or propose to offer in connection with a transaction; (k) advise Debtors on the risks and benefits of considering a transaction with respect to their intermediate and long-term business prospects and strategic alternatives to maximize their business enterprise value; (l) review and analyze any proposals Debtors receive from third parties in connection with a transaction; (m) assist or participate in negotiations; (n) with respect to any "M&A transaction" (transaction in which Debtors sell or acquire material assets or equity interests, or otherwise consummate any merger, consolidation or other business combination transaction), the firms will: (i) assist Debtors in compiling and prioritizing a list of potential counterparties for a potential M&A transaction and in facilitating contact with such potential counterparties; (ii) assist Debtors in formulating and executing a process to solicit proposals from potential counterparties for an M&A transaction; (iii) assist Debtors in coordinating due diligence by potential counterparties for an M&A transaction, including managing a data room; (iv) assist Debtors in preparing management presentations to potential counterparties for an M&A transaction; and (v) assist Debtors in negotiating the financial terms of a potential M&A transaction. (o) with respect to a potential new capital raise: (i) assist Debtors in identifying and approaching potential sources of financing; (ii) assist Debtors in evaluating the financial terms of any proposed new capital raise and in structuring any new capital raise; and (iii) assist Debtors in negotiating the financial terms of any new capital raise with the potential sources of financing. (p) advise Debtors with respect to, and attend, meetings of Debtors' Board of Directors, creditor groups, official constituencies and other interested parties, as necessary; and (q) participate in hearings before the bankruptcy court and provide testimony if requested by Debtors. The following fees will be split equally between Rothschild & Co and Intrepid: (a) Monthly Fee: $250,000 per month. (b) Completion Fee: $20 million payable upon the earlier of (i) the confirmation and effectiveness of a plan; and (ii) the closing of a transaction. (c) M&A Fee: A fee, that in no event shall be less than $1.5 million, upon the closing of each M&A transaction. (d) New Capital Fee: A fee in connection with any new capital raise equal to the greater of 50 percent of the total fees actually paid to any bank acting as lead arranger, syndication agent or similar roles and the applicable percentages set forth below: (i) 0.625 percent of the face amount of any senior secured debt raised; (ii) 1 percent of the face amount of any junior secured, unsecured or mezzanine debt raised; and (iii) 1.625 percent of the face amount of any subordinated debt, equity, equity-linked securities, obligations or hybrid capital raised. (e) In the event Debtors enter into a transaction that constitutes both a transaction and an M&A transaction, the investment bankers shall be entitled to the higher of the completion fee and the M&A fee. (f) Credit: The investment bankers shall credit against the completion fee: (i) 50 percent of the monthly fees paid in excess of $750,000; (ii) 50 percent of any M&A fees paid; and (iii) 50 percent of any new capital fees paid. (g) Cap: The aggregate amount of fees due and owing to the investment bankers from Debtors shall not exceed, after accounting for any applicable credits, $28.5 million. (h) Expenses: The investment bankers will receive reimbursement for work-related expenses. During the 90 days immediately preceding the petition date, Rothschild & Co. received the following payments in connection with its engagement: (a) fee payments totaling $375,000, and (b) expense-reimbursement payments totaling $15,910.61. Meanwhile, Intrepid received the following payments during the 90 days immediately preceding the petition date: (a) fee payments totaling $375,000 and (b) expense-reimbursement payments totaling $16,681.54. Debtors also paid Intrepid $25,000 to be applied against pre-bankruptcy expenses incurred by both firms but not yet invoiced or otherwise processed as of the petition date. R. Adam Miller, a managing director at Intrepid, and Stephen Antinelli, co-head of Restructuring, North America of Rothschild & Co, disclosed in court filings that the firms are "disinterested persons" within the meaning of Bankruptcy Code Section 101(14). The firms can be reached through: R. Adam Miller Intrepid Partners, LLC 1201 Louisiana Street, Suite 600 Houston, TX 77002 Telephone: (713) 292-0863 Facsimile: (281) 582-7298 - and – Stephen Antinelli Rothschild & Co US, Inc. 1251 Avenue of the Americas New York, NY 10020 Telephone: (212) 403-3500 About Chesapeake Energy Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. Debtors have tapped Kirkland & Ellis LLP as legal counsel; Jackson Walker LLP as co-counsel and conflicts counsel; Alvarez & Marsal as restructuring advisor; Rothschild & Co and Intrepid Financial Partners as financial advisors; and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information. Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel; RPA Advisors, LLC as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc. has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. CHESAPEAKE ENERGY: Seeks to Hire Kirkland & Ellis as Legal Counsel ------------------------------------------------------------------ Chesapeake Energy Corporation and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their legal counsel. The firms' services will include: (a) advising Debtors with respect to their powers and duties in the continued management and operation of their business and properties; (b) advising and consulting on the conduct of their Chapter 11 cases; (c) attending meetings and negotiating with representatives of creditors and other parties; (d) taking all necessary actions to protect and preserve Debtors' bankruptcy estates; (e) preparing pleadings; (f) representing Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; (g) advising Debtors in connection with any potential sale of their assets; (h) appearing before the bankruptcy court and any appellate courts; (i) advising Debtors regarding tax matters; (j) taking any necessary action on behalf of the Debtors to negotiate, prepare and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan. The firms' hourly rates are as follows: Partners $1,075 - $1,845 Of Counsel $625 - $1,845 Associates $610 - $1,165 Paraprofessionals $245 - $460 On March 11, Debtors paid $1 million to the firms, which constituted an advance payment retainer. Subsequently, the firms receive additional advance payment retainers totaling $11,500,812.17. Patrick Nash Jr., Esq., disclosed in court filings that the firms are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. In response to the request for additional information set forth in Paragraph D.1. of the Revised U.S. Trustee Guidelines, Mr. Nash made the following disclosures: Question: Did Kirkland agree to any variations from, or alternatives to, Kirkland's standard billing arrangements for the engagement? Answer: No. The firms and Debtors have not agreed to any variations from, or alternatives to, the firms' standard billing arrangements. The rate structure provided by the firms is appropriate and is not significantly different from the rates that they charge for other non-bankruptcy representations or the rates of other comparably skilled professionals. Question: Do the Kirkland professionals in this engagement vary their rate based on the geographic location of Debtors' Chapter 11 cases? Answer: No. The hourly rates used by the firms in representing Debtors are consistent with the rates that they charge other comparable Chapter 11 clients, regardless of the location of their cases. Question: If Kirkland represented the Debtors in the 12 months prepetition, disclose Kirkland's billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If Kirkland's billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Answer: The firms represented Debtors from Jan. 1 to June 28, 2020 using the following rates. Billing Category U.S. Range ---------------- ---------- Partners $1,075 - $1,845 per hour Of Counsel $625 - $1,845 per hour Associates $610 - $1,165 per hour Paraprofessionals $245 - $460 per hour The firms represented Debtors from June 29 to Dec. 31, 2019 using the following rates: Billing Category U.S. Range ---------------- ---------- Partners $1,025 - $1,795 per hour Of Counsel $595 - $1,705 per hour Associates $595 - $1,125 per hour Paraprofessionals $235 - $460 per hour Question: Have the Debtors approved Kirkland's budget and staffing plan, and, if so, for what budget period? Answer: Yes, for the period from June 28 to Sept. 30, 2020. The firms can be reached through: Patrick J. Nash, Jr. Kirkland & Ellis LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Email: patrick.nash@kirkland.com About Chesapeake Energy Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. Debtors have tapped Kirkland & Ellis LLP as legal counsel; Jackson Walker LLP as co-counsel and conflicts counsel; Alvarez & Marsal as restructuring advisor; Rothschild & Co and Intrepid Financial Partners as financial advisors; and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information. Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel; RPA Advisors, LLC as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc. has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. CHESAPEAKE ENERGY: Seeks to Tap Jackson Walker as Co-Counsel ------------------------------------------------------------ Chesapeake Energy Corporation and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Jackson Walker LLP. Jackson Walker will serve as co-counsel with Kirkland & Ellis LLP, and Kirkland & Ellis International, LLP, the other firms handling Debtors' Chapter 11 cases. The firm's attorneys and its paraprofessionals will be paid at hourly rates as follows: Matthew D. Cavenaugh $750 Restructuring attorneys $445 - $895 Partners $565 - $900 Associates $420 - $565 Paraprofessionals $175 - $185 Debtors paid the firm an initial retainer in the amount of $168,680. On June 16, the firm received an additional $50,000. Matthew Cavenaugh, Esq., a partner at Jackson Walker, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. In response to the request for additional information set forth in Paragraph D.1 of the U.S. Trustee Fee Guidelines, Mr. Cavenaugh made the following disclosures: Question: Did the firm agree to any variations from, or alternatives to, the firm's standard billing arrangements for its engagement? Answer: No. Jackson Walker and Debtors have not agreed to any variations from, or alternatives to, the firm's standard billing arrangements for its engagement. The rate structure provided by the firm is appropriate and is not significantly different from the rates that Debtors charge for other non-bankruptcy representatives or the rates for other comparably skilled professionals. Question: Do the firm's professionals vary their rate based on the geographical location of Debtors' Chapter 11 cases? Answer: No. The hourly rates used by the firm in representing Debtors are consistent with the rates that it charges other comparable Chapter 11 clients regardless of the location of the cases. Question: If the firm has represented Debtors in the 12 months prepetition, disclose the firm's billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If the firm's billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Answer: Mr. Cavenaugh's hourly rate is $750. The rates for other restructuring attorneys at the firm range from $445 to $895 an hour while the paraprofessional rates range from $175 to $185 per hour. The firm represented Debtors during the weeks immediately before the petition date using those rates. Question: Have the Debtors approved the firm's budget and staffing plan, and if so, for what budget period? Answer: The firm has not prepared a budget and staffing plan. Jackson Walker can be reached through: Matthew D. Cavenaugh, Esq. Jackson Walker LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: mcavenaugh@jw.com About Chesapeake Energy Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. Debtors have tapped Kirkland & Ellis LLP as legal counsel; Jackson Walker LLP as co-counsel and conflicts counsel; Alvarez & Marsal as restructuring advisor; Rothschild & Co and Intrepid Financial Partners as financial advisors; and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information. Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel; RPA Advisors, LLC as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc. has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. CHESAPEAKE ENERGY: U.S. Trustee Appoints Royalty Owners' Committee ------------------------------------------------------------------ Henry Hobbs Jr., acting U.S. trustee for Region 7, appointed nine creditors to the committee of royalty owners in the Chapter 11 cases of Chesapeake Energy Corp. and its affiliates. The committee members are: 1. B.D. Griffin 501 N. Thompson, Suite 300 Conroe, TX 77301 Tel: 936-520-7221/936-538-8202 Fax: 936-760-6920 Email: bd.griffin@mctx.org Counsel: Circelli, Walter & Young, PLLC George Parker Young, Esq. 500 East 4th Street, Suite 250 Fort Worth, TX 76102 Tel: 817-697-4942 Fax: 817-697-4844 Email: gpy@cwylaw.com 2. Jeff G. Snowden Capex Consulting Group 3245 Main Street, Suite 235-171 Frisco, TX 75033 Tel: 214-619-0692/214-514-6382 Fax: 214-619-0694 Email: jsnowden@capexconsulting.com Counsel: Circelli, Walter & Young, PLLC George Parker Young, Esq. 500 East 4th Street, Suite 250 Fort Worth, TX 76102 Tel: 817-697-4942 Fax: 817-697-4844 Email: gpy@cwylaw.com 3. Ron Carlton CTF, Ltd. 100 Cinder Road NE Carrollton, OH 44615-9637 Tel: 330-738-4391 Email: suregroup2@gmail.com Counsel: Sharp Law, LLP Rex Sharp, Esq. Barbara Frankland, Esq. 5301 West 75th Street Prairie Village, KS 66208 Tel: 913-222-2479/913-901-0505 Fax: 913-901-0419 Email: bfrankland@midwest-law.com - and - Krugliak, Wilkins, Griffiths & Dougherty Co., LPA Gregory Watts, Esq. 4775 Munson Street, N.W. Canton, OH 44718 Tel: 330-497-0577 Fax: 330-497-4020 Email: gwatts@kwgd.com 4. Daniel A. Leis Union Pacific Railroad Company 1400 Douglas Street, Stop 1690 Omaha, NE 68179 Tel: 402-544-8533 Email: daleis@up.com Counsel: Harris, Finley & Bogle PC James E. Key, Esq. 777 Main Street, Suite 1800 Fort Worth, TX 76102 Tel: 817-870-8735 Email: jkey@hfblaw.com 5. Ryan Watts Addax Minerals Fund, L.P. 5950 Berkshire Lane, Suite 1250 Dallas, TX 75225 Tel: 972-861-0104/214-534-4100 Email: rwatts@springbokenergy.com Counsel: Burns Charest LLP Daniel Charest, Esq. Spencer Cox, Esq. 900 Jackson Street, Suite 500 Dallas, TX 75202 Tel: 469-904-4555/214-681-8444 Fax: 469-444-5002 Email: dcharest@burnscharest.com 6. Clark A. Beebe 2092 Lakeside Drive West P.O. Box 194 Highland Lakes, NJ 07422 Tel: 908-265-4019 Email: beebeinnj@gmail.com Counsel: Indik McNamara & Dallarda, PC Thomas S. McNamara, Esq. 123 South Broad Street, Suite 2170 Philadelphia, PA 19109 Tel: 215-567-7125/732-821-2500 Fax: 215-563-8330/484-930-0408 Email: tmcnamara915@gmail.com 7. Michael D. Donovan 1885 Swedesford Road Malvern, PA 19355 Tel: 610-647-6067 Fax: 610-647-7215 Email: mdonovan@donovanlitigationgroup.com Counsel: Donovan Litigation Group, LLC Michael D. Donovan, Esq. 1885 Swedesford Road Malvern, PA 19355 Tel: 610-647-6067 Fax: 610-647-7215 Email: mdonovan@donovanlitigationgroup.com 8. Aaron D. Hovan 154 Warren Street P.O. Box 336 Tunkhannock, PA 18657 Tel: 570-836-3121 Email: adh23@columbia.edu Counsel: Schnader Harrison Segal & Lewis LLP Ira Richards, Esq. 1600 Market Street, Suite 3600 Philadelphia, PA 19103 Tel: 215-751-2503 Email: irichards@schnader.com 9. Charles E. Schaffer 510 Walnut Street, Suite 500 Philadelphia, PA 19106 Tel: 215-592-1500/215-518-0309 Email: cschaffer@lfsblaw.com Counsel: Levin Sedran & Berman Charles E. Schaffer, Esq. 510 Walnut Street, Suite 500 Philadelphia, PA 19106 Tel: 215-592-1500/215-518-0309 Email: cschaffer@lfsblaw.com Counsel: Larry D. Moffett, Esq. 2086 Old Taylor Road, Suite 1012 Oxford, MS 38655 Email: larry@larrymoffett.com Counsel: Lieff, Cabraser, Heimann & Bernstein LLP David S. Stellings, Esq. Daniel Seltz, Esq. 250 Hudson Street, 8th Floor New York, NY 10013 Email: dstellings@lchb.com Email: dseltz@lchb.com Counsel: Cuneo Gilbert & LaDuca, LLP Charles J. LaDuca, Esq. 507 C Street, NE Washington, DC 20002 Email: charles@cuneolaw.com Counsel: Barrett Law Group John W. (“Don”) Barrett, Esq. P.O. Drawer 927 Lexington, MS 39095 Email: dbarrett@barrettlawgroup.com Counsel: The O'Brien Law Group LLC Michelle R. O’Brien, Esq. 3738 Birney Avenue Moosic, PA 18507 Email: mobrien@theobrienlawgroup.com Counsel: Law Office of Francis P. Karam Francis P. Karam, Esq. Jerry Karam, Esq. Doug Clark, Esq. 175 Varick Street New York, NY 10014 Email: frank@fkaramlaw.com Counsel: Obermayer Rebmann Maxwell & Hippel LLP D. Alexander Barnes, Esq. Centre Square West 1500 Market Street, Suite 3400 Philadelphia, PA 19102 Tel. 610-506-8000 Fax 215-665-3165 Email: alexander.barnes@obermayer.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 Chesapeake Energy Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. Debtors have tapped Kirkland & Ellis LLP as legal counsel; Alvarez & Marsal as restructuring advisor; Rothschild & Co and Intrepid Financial Partners as financial advisors; and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information. Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel; RPA Advisors, LLC as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc. has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. CHRIST THE CORNERSTONE: Court Conditionally Approves Disclosures ---------------------------------------------------------------- The Christ the Cornerstone Community Church’s Disclosure Statement is conditionally approved. The hearing to consider final approval of the Debtor's Disclosure Statement and to consider the confirmation of the Debtor's proposed Chapter 11 Plan is fixed and will be conducted on July 30, 2020 at 2:30 p.m. by the Honorable Stacey G. Jernigan on the 14th Floor, Courtroom #1, U.S. Courthouse, 1100 Commerce St., Dallas, Texas 75242. July 24, 2020 is fixed as the last day for filing written acceptances or rejections of the Debtor’s proposed Chapter 11 Plan which must be received by 5:00 p.m. (CST/CDT). July 24, 2020, is fixed as the last day for filing and serving written objections to final approval of the Debtor’s Disclosure Statement or confirmation of the Debtor’s proposed Chapter 11 plan. The Debtor's counsel: Areya Holder Aurzada HOLDER LAW 901 Main Street, Suite 5320 Dallas, TX 75202 Telephone: (972) 438-8800 Email: areya@holderlawpc.com About Christ the Cornerstone Christ the Cornerstone Community Church is a tax-exempt religious organization (as described in 26 U.S.C. Section 501). It owns eight real estate properties (consisting of vacant land and commercial property) in Desoto, Texas, having an aggregate current value of $4.5 million. The Church sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 19-33649) on Nov. 1, 2019. The Debtor disclosed $4,494,083 in total assets and $555,234 in total liabilities as of the bankruptcy filing. The Hon. Stacey G. Jernigan is the case judge. Areya Holder, Esq., at HOLDER LAW, is the Debtor's counsel. COMMUNITY HEALTH: Posts $70 Million Net Income in Second Quarter ---------------------------------------------------------------- Community Health Systems, Inc. announced financial and operating results for the three and six months ended June 30, 2020. Net operating revenues for the three months ended June 30, 2020, totaled $2.519 billion, a 23.7 percent decrease, compared with $3.302 billion for the same period in 2019. Net income attributable to Community Health Systems, Inc. common stockholders was $70 million, or $0.61 per share (diluted), for the three months ended June 30, 2020, compared with net loss of $(167) million, or $(1.47) per share (diluted), for the same period in 2019. Excluding certain adjusting items, net income attributable to Community Health Systems, Inc. common stockholders was $0.85 per share (diluted), for the three months ended June 30, 2020, compared to net loss of $(0.47) per share (diluted) for the same period in 2019. Payments received by the Company through the Public Health and Social Services Emergency Fund had a positive impact on net income attributable to Community Health Systems, Inc. common stockholders (both on a consolidated and adjusted basis) of approximately $333 million, or $2.89 on a per share (diluted) basis, for the three months ended June 30, 2020. Weighted-average shares outstanding (diluted) were 115 million and 114 million for the three months ended June 30, 2020 and 2019, respectively. Adjusted EBITDA for the three months ended June 30, 2020, was $454 million compared with $402 million for the same period in 2019. Payments received through the PHSSEF had a positive impact on Adjusted EBITDA for the three months ended June 30, 2020 in the amount of $448 million. The consolidated operating results for the three months ended June 30, 2020, reflect a 23.6 percent decrease in admissions and a 29.2 percent decrease in adjusted admissions, compared with the same period in 2019. On a same-store basis, admissions decreased 18.1 percent and adjusted admissions decreased 24.2 percent for the three months ended June 30, 2020, compared with the same period in 2019. Volume declines were most pronounced in the month of April 2020 and declined to a lesser degree in the months of May and June 2020. On a same-store basis, net operating revenues decreased 18.4 percent for the three months ended June 30, 2020, compared with the same period in 2019. Net operating revenues for the six months ended June 30, 2020, totaled $5.544 billion, a 17.0 percent decrease, compared with $6.679 billion for the same period in 2019. Net income attributable to Community Health Systems, Inc. common stockholders was $87 million, or $0.76 per share (diluted), for the six months ended June 30, 2020, compared with net loss of $(285) million, or $(2.51) per share (diluted), for the same period in 2019. Excluding certain adjusting items, net loss attributable to Community Health Systems, Inc. common stockholders was $(0.73) per share (diluted), for the six months ended June 30, 2020, compared to $(1.00) per share (diluted) for the same period in 2019. The change in tax valuation allowance (which was one of the aforementioned adjusting items) had a positive impact of $240 million, or $2.09 per share (diluted), on net income attributable to Community Health Systems, Inc. common stockholders, and arose from discrete tax benefits related to the release of federal and state valuation allowances on IRC Section 163(j) interest carryforwards as a result of an increase to the deductible interest expense allowed for 2019 and 2020 under the Coronavirus Aid, Relief and Economic Security Act that was enacted during the six months ended June 30, 2020. In addition, payments received by the Company through the PHSSEF, as more specifically described below, had a positive impact on net income attributable to Community Health Systems, Inc. common stockholders (both on a consolidated and adjusted basis) of approximately $333 million, or $2.90 on a per share (diluted) basis, for the six months ended June 30, 2020. Weighted-average shares outstanding (diluted) were 115 million and 114 million for the six months ended June 30, 2020 and 2019, respectively. Adjusted EBITDA for the six months ended June 30, 2020, was $763 million compared with $793 million for the same period in 2019. Payments received through the PHSSEF had a positive impact on Adjusted EBITDA for the six months ended June 30, 2020 in the amount of $448 million. The consolidated operating results for the six months ended June 30, 2020, reflect an 18.3 percent decrease in admissions and a 21.0 percent decrease in adjusted admissions, compared with the same period in 2019. On a same-store basis, admissions decreased 11.5 percent and adjusted admissions decreased 14.5 percent for the six months ended June 30, 2020, compared with the same period in 2019. Volume declines were most pronounced in the month of April 2020 and declined to a lesser degree in the months of May and June 2020. On a same-store basis, net operating revenues decreased 10.9 percent for the six months ended June 30, 2020, compared with the same period in 2019. Commenting on the results, Wayne T. Smith, chairman and chief executive officer of Community Health Systems, Inc., said, "The COVID-19 pandemic continues to be an unprecedented public health crisis that has forever changed our country and the healthcare industry. Our response to this crisis is guided by our most important priority - to provide safe, quality healthcare for the patients who put their trust in us. We are forever grateful to our incredible physicians, nurses and other caregivers who bravely step up and step forward every day to care for their patients, communities and each other. And, we thank all of America's healthcare workers for their compassionate, professional, and truly heroic actions in this pandemic. "I am proud of our hospital leadership teams and the corporate support teams that have demonstrated agility and resilience under pressure and leveraged all of the resources of our organization to support their community response as well as one another. We will continue to adapt to this evolving situation with a steadfast commitment to provide the best possible response to this public health crisis, while at the same time focusing on long-term growth for all of the Company's stakeholders." COVID - 19 Pandemic: The COVID-19 pandemic had an adverse impact on the Company's operations and financial results for the three and six months ended June 30, 2020 beginning in the second half of March 2020 as the result of decreases in net operating revenues driven by a decline in patient volumes and increases in expenses related to supply chain and other expenditures. The Company previously announced in the Current Report on Form 8-K filed by the Company on April 6, 2020, that it was withdrawing its 2020 financial guidance issued in its earnings release dated Feb. 19, 2020. The Company is not able to fully quantify the impact that the COVID-19 pandemic will have on its financial results during 2020, but expects developments related to the COVID-19 pandemic, including the CARES Act and PPPHCE Act, to materially affect the Company's financial performance in 2020. Moreover, as a result of the continuously changing and unpredictable environment related to the COVID-19 pandemic, the Company is not providing guidance in this earnings release. As a result of the COVID-19 pandemic, federal and state governments have passed legislation, promulgated regulations, and taken other administrative actions intended to assist healthcare providers in providing care to COVID-19 and other patients during the public health emergency. Sources of relief include the CARES Act, which was enacted on March 27, 2020, and the Paycheck Protection Program and Health Care Enhancement Act, which was enacted on April 24, 2020. Together, the CARES Act and the PPPHCE Act include $175 billion in funding to be distributed to eligible providers through the PHSSEF. In addition, the CARES Act provided for an expansion of the Medicare Accelerated and Advance Payment Program. During the three months ended June 30, 2020, the Company received approximately $564 million in payments through the PHSSEF in both general and targeted distributions, net of amounts received for previously divested entities that are required to be repaid to the U.S. Department of Health and Human Services. PHSSEF payments are intended to compensate healthcare providers for lost revenues and incremental expenses incurred in response to the COVID-19 pandemic and are not required to be repaid provided that recipients attest to and comply with certain terms and conditions, including limitations on balance billing and not using funds received from the PHSSEF to reimburse expenses or losses that other sources are obligated to reimburse. Approximately $448 million of the PHSSEF payments qualified as income for reimbursement of lost revenues and incremental expenses and was recognized as a reduction in operating costs and expenses during the three and six months ended June 30, 2020. Amounts not recognized as a reduction to operating costs and expenses or that have not been refunded to HHS as of June 30, 2020, are reflected within accrued liabilities-other in the condensed consolidated balance sheet, and such unrecognized amounts may be recognized as a reduction in operating costs and expenses in future periods if the underlying conditions for recognition are met. Additionally, approximately $109 million in payments through the PHSSEF have been received in July 2020 which did not qualify for recognition during the three months ended June 30, 2020. Medicare accelerated payments of approximately $1.2 billion were received during the three months ended June 30, 2020, via the Medicare Accelerated and Advance Payment Program. These are advances that providers must repay. The Medicare accelerated payments are interest free for up to 12 months and the program currently requires that the Centers for Medicare and Medicaid Services recoup the accelerated payments beginning 120 days after receipt by the provider, by withholding future Medicare fee-for-service payments for claims until such time as the full accelerated payment has been recouped. The program currently requires that any outstanding balance remaining after 12 months must be repaid by the provider or be subjected to a 10.25% annual interest rate. Recoupment of accelerated Medicare payments received by the Company is currently expected to begin in August 2020. As of June 30, 2020, Medicare accelerated payments are reflected within accrued liabilities-other in the condensed consolidated balance sheet. Effective April 26, 2020, CMS is reevaluating pending and new applications for accelerated payments in light of significant other relief provided by the CARES Act and the PPPHCE Act. Accordingly, the Company does not expect to receive additional Medicare accelerated payments. The PHSSEF payments received to date and which the Company may receive in the future under the CARES Act and the PPPHCE Act, have been and may continue to be beneficial in partially mitigating the impact of the COVID-19 pandemic on the Company's results of operations and financial position. Additionally, the federal government may consider additional stimulus and relief efforts, but we are unable to predict whether additional stimulus measures will be enacted or their impact, if any. The Company is unable to assess the extent to which anticipated ongoing negative impacts on the Company arising from the COVID-19 pandemic will be offset by amounts which the Company may recognize or receive in the future under the CARES Act, the PPPHCE Act and any future stimulus measures. The Company completed the divestiture of three hospitals on Jan. 1, 2020 (in respect of which the Company received proceeds at a preliminary closing on Dec. 31, 2019), two hospitals on May 1, 2020, and two hospitals on July 1, 2020 (in respect of which the Company received proceeds at a preliminary closing on June 30, 2020) for a total of seven hospitals. In addition, the Company has entered into definitive agreements to sell a total of five hospitals, for which the Company expects to receive aggregate proceeds of approximately $430 million. These divestitures, subject to definitive agreements, which are expected to be completed at various times during the third and fourth quarters of 2020, will mark the end of the Company's formal portfolio rationalization strategy, which commenced in 2017. There can be no assurance that these potential divestitures subject to definitive agreements will be completed, or if they are completed, the ultimate timing of the completion of these divestitures. The Company continues to receive interest from potential acquirers for certain of its hospitals, and may, from time to time, consider selling additional hospitals following the completion of the Company's formal portfolio rationalization strategy. A full-text copy of the press release is available for free at: https://is.gd/61D76q About Community Health Community Health Systems, Inc. -- www.chs.net -- is a publicly traded hospital company and an operator of general acute care hospitals in communities across the country. The Company, through its subsidiaries, owns, leases or operates 99 affiliated hospitals in 17 states with an aggregate of approximately 16,000 licensed beds. The Company's headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Community Health reported a net loss attributable to the Company's stockholders of $675 million for the year ended Dec. 31, 2019, following a net loss attributable to the Company's stockholders of $788 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $15.61 billion in total assets, $17.25 billion in total liabilities, $502 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $2.14 billion. * * * As reported by the TCR on Nov. 29, 2019, S&P Global Ratings raised its issuer credit rating on U.S.-based hospital operator Community Health Systems Inc. to 'CCC+' from 'SD' (selective default). The upgrade to 'CCC+' reflects the company's longer-dated debt maturity schedule, and S&P's view that Community's efforts to rationalize its hospital portfolio as well as improve financial performance and cash flow should strengthen credit measures over the next couple of years. In November 2019, Fitch Ratings downgraded Community Health Systems, Inc.'s Issuer Default Rating to 'C' from 'CCC' following the company's announcement of an offer to exchange a series of senior unsecured notes due 2022. CONSOLIDATED LAND: Unsecureds Get Remainder of Equity Investment ---------------------------------------------------------------- Consolidated Land Holdings, LLC, Appleton Land, LLC, 100 Berlin Land, LLC, 200 STL Land, LLC, 204 Fox Land, LLC, 205 Wolf Land, LLC, 5500 Midland Land, LLC, & High Point Land, LLC, submitted a Joint Chapter 11 Plan and a Disclosure Statement. All Claims held against the Debtors will be classified and treated pursuant to the terms of the Plan. The Plan contains four classes of claims and interests. The Plan contemplates the payment of Allowed Secured Claim in Classes 1 through payment, in full, over time under the terms set forth below. The Allowed Radisson Class 2 Claim will be paid a lump sum payment of $350,000 on the Effective Date. In addition, the Reorganized Appleton will enter a new franchise agreement with Radisson. The Plan provides for the Allowed Unsecured Class 3 Claims to receive the balance of the Equity Infusion after payment of all Allowed Administrative claims. The Plan is premised on the purchase of equity and infusion of $500,000 (the "Equity Infusion") such that Equity Investor will become the sole owner of the Reorganized Debtors. The Equity Investor will be the 100% owner of the Reorganized Consolidated, Appleton, 100 Berlin, 200 STL, 204 Fox, 205 Wolf, 5500 Midland, and High Point. In addition, the Plan further provides the respective Holders of Allowed Administrative Claims, Allowed Priority Claims and Allowed Priority Tax Claims (if any) will be paid in full on the Effective Date or in accordance with the treatment specified herein. Class 2 consists of the Allowed Radisson Unsecured Claim against all of the Debtors (except 200 STL). In full satisfaction of the Allowed Class 2 Claim, holder of such claims will receive a lump sum payment of $350,000 and a franchise agreement with Appleton. Class 2 is impaired. Class 3 – Allowed General Unsecured Claims – All Debtors (which will include any deficiency claims related to Class 1) will receive the remainder of the new equity investment after Administrative Claims. In the event of a conversion and liquidation, there would be likely no distribution to Holders of Allowed Class 3 Claims as the debt encumbering assets exceeds the value of such assets. Class 3 is Impaired. Funds generated from operations through the Effective Date will be used for Plan Payments; however, the Debtors' cash on hand as of Confirmation will be available for payment of Administrative Expenses. A full-text copy of the Joint Disclosure Statement dated June 17, 2020, is available at https://tinyurl.com/y7qnf54g from PacerMonitor.com at no charge. Counsel for the Debtors: R. SCOTT SHUKER, ESQ. MARIANE L. DORRIS, ESQ. JOHN B. DORRIS, ESQ. SHUKER & DORRIS, P.A. 121 S. ORANGE AVENUE, SUITE 1120 ORLANDO, FLORIDA 32801 About Consolidated Land Holdings Consolidated Land Holdings and its subsidiaries are privately held companies engaged in activities related to real estate. Consolidated Land Holdings, LLC, and 21 affiliates concurrently filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 19-04760) on July 22, 2019. The petitions were signed by Joseph G. Gillespie III, manager. At the time of filing, the Debtors were estimated to have $50 million to $100 million in both assets and liabilities. The Debtors are represented by R Scott Shuker, Esq. at Latham, Shuker, Eden & Beaudine, LLP. COSTA HOLLYWOOD: Evolution Hospitality Objects to Disclosures ------------------------------------------------------------- Evolution Hospitality LLC objects on a limited basis to the First Amended Chapter 11 Plan of Liquidation and First Amended Disclosure Statement of Costa Hollywood Property Owner LLC. Evolution asserts that the Debtors' Disclosure Statement does not provide creditors with "adequate information" under Section 1125(b) of the Bankruptcy Code, and as such, cannot be approved as currently drafted. Evolution complains that the Plan accompanying the Disclosure Statement is presently unconfirmable due to its violations of the confirmation requirements of Section 1129 of the Bankruptcy Code that it would be futile allow the Debtors to solicit votes thereon. Evolution points out that the proposed Plan and Disclosure Statement contains no detailed information concerning the "Secured Lender's Contribution", only that the Debtor assumes $400,000 of will be consumed by "Professional Claims". According to Evolution, the Disclosure Statement Contains No Authority for the Plan's Proposal that the Debtor's "officers, directors or employees" and "other professionals" Receive Third-Party Releases. Evolution asserts that the Disclosure Statement contains no law that supports providing a discharge to the Debtor's principals and employees who are not contributing anything to the Plan. Evolution complains that the Proposed Liquidating Trustee Has Broad Control and Authority Without Accountability or Oversight. Evolution points out that the lack of transparency as to fees, the failure to identify who will be counsel, the failure to identify the roles of various counsel and financial professionals, the failure to provide any type of budget, the attempt to prevent creditors from seeing the fees, and the desire to shield fees from this Court's review, demonstrate an implied lack of good faith by the Debtor in proposing the Plan and Disclosure Statement. Counsel for Evolution Hospitality: Michael P. Dunn, Esq. DUNN LAW P.A. 25 SE Second Ave, Eighth Floor Miami, Florida 33131 Phone: (305) 209-2131 E-mail: alexis.read@dunnlawpa.com michael.dunn@dunnlawpa.com About Costa Hollywood Costa Hollywood Property Owner, LLC -- https://www.costahollywoodresort.com/ -- is a privately held company in the traveler accommodation industry. The Company owns and operates Costa Hollywood Beach Resort, a resort hotel in Hollywood Beach, Florida. Costa Hollywood Beach Resort offers rooms and suites featuring an elevated design aesthetic and luxe decor. The Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-22483) on Sept. 19, 2019. In the petition signed by Moses Bensusan, manager and sole member, the Company was estimated to have assets ranging from $50 million to $100 million and liabilities of the same range. The Hon. Raymond B. Ray is the case judge. Peter D. Russin, Esq. at MELAND RUSSIN & BUDWICK, P.A., serves as the Company's bankruptcy counsel. CRACKER BARRELL: Egan-Jones Withdraws BB+ Senior Unsecured Ratings ------------------------------------------------------------------ Egan-Jones Ratings Company, on July 22, 2020, withdrew its 'BB+' foreign currency and local currency senior unsecured ratings on debt issued by Cracker Barrel Old Country Store Inc. Headquartered in Lebanon, Tennessee, Cracker Barrel Old Country Store, Inc. operates restaurants. DAVIS FAMILY: Aug. 5 Hearing on Disclosure Statement ---------------------------------------------------- The hearing to consider the approval of the disclosure statement filed by The Davis Family Revocable Trust will be held on August 5, 2020 at 10:30 a.m., in Courtroom 1, U.S. Courthouse, 333 Constitution Avenue, Washington, DC 20001. All objections to the disclosure statement must be filed and served prior to the hearing. The Davis Family Revocable Trust, filed a Disclosure Statement. The Debtor's sole asset is the Monroe Property. The property is currently vacant and in need of substantial repair and renovation. The Debtor estimates that the current value of the Monroe Property is $850,000. Class III: Allowed Secured Claim of PNC Bank against the Monroe Property. PNC has asserted that the balance of principal, accrued interest and all other charges on the Claim was $1,776,404 as of the Petition Date. The Debtor estimates monthly payments on the re-amortized Claim will be $4,826, and that its balloon payment shall be $680,076 at the conclusion of the term. Class III is impaired. Class VI: Allowed Unsecured Claims. The Debtor is aware of only one Unsecured Claim which may be entitled to payment in the present case, the Unsecured Claim of the Internal Revenue Service in the amount of $420. In the event the Debtor has any obligations payable under Class VI, the Debtor shall pay the amount of such obligations in full on the Effective Date. Class VI is not impaired. The Plan will be funded from the rental of the Monroe Property, and from the rehabilitation loan from Diamond. A full-text copy of the Disclosure Statement dated June 15, 2020, is available at https://tinyurl.com/y8wkexyl from PacerMonitor.com at no charge. Counsel for the Debtor: Augustus T. Curtis COHEN BALDINGER & GREENFELD, LLC 2600 Tower Oaks Boulevard Suite 103 Rockville, Maryland 20852 Tel: (301) 881-8300 About The Davis Family Revocable Trust The Davis Family Revocable Trust is a trust created in 2008 in order to acquire and develop real property located in Maryland and the District of Columbia. On June 18, 2019, the Debtor filed a voluntary petition under Chapter 11 of the United States Code (Bankr. D.D.C Case No. 19-00400). The Debtor is represented by COHEN BALDINGER & GREENFELD, LLC. DECIPHERST INC: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee on July 25 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Decipherst, Inc. About Decipherst Inc. Decipherst, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-11734) on June 24, 2020. At the time of the filing, the Debtor disclosed under $50,000 in both assets and liabilities. Judge Timothy W. Dore oversees the case. The Debtor has tapped Darrel B. Carter, Esq., at CBG Law Group, as its legal counsel. DOMINO'S PIZZA: Egan-Jones Hikes Senior Unsecured Ratings to BB- ---------------------------------------------------------------- Egan-Jones Ratings Company, on July 21, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Domino's Pizza Inc. to BB- from B+. Headquartered in Ann Arbor Charter Township, Michigan, Domino's Pizza, Inc. operates a network of company-owned and franchise Domino's Pizza stores, located throughout the United States and in other countries. ECTOR COUNTY HOSPITAL: Fitch Cuts Issuer Default Rating to BB ------------------------------------------------------------- Fitch Ratings has maintained the Rating Watch Negative and downgraded to 'BB' from 'BB+' Ector County Hospital District [d/b/a Medical Center Health System], TX's issuer default rating and $42 million series 2010B hospital revenue bonds issued by ECHD. SECURITY The bonds are secured by a pledge of revenues from ECHD, which specifically excludes ad valorem and local sales tax receipts. ANALYTICAL CONCLUSION The downgrade to 'BB' from 'BB+' reflects Fitch's expectations that disruptions from the coronavirus pandemic to volumes and revenues will weaken ECHD's operations in fiscal 2020 and result in deterioration of unrestricted cash reserves to levels consistent with a lower rating level. The 'BB' rating also incorporates Fitch's expectations that sales tax revenues will be pressured in fiscal 2020 as ECHD's local economy and sales tax revenues remain vulnerable to energy price volatility. Furthermore, with consecutive years of weak operating results and a thin liquidity position (63 days cash on hand in fiscal 2019) prior to the coronavirus outbreak, Fitch believes ECHD is more susceptible to any prolonged disruptions caused by the coronavirus pandemic. The maintenance of the RWN primarily reflects ECHD's thin liquidity position and weak DCOH metric, which is currently in breach of its liquidity covenant. A breach of the covenant may result in a consultant call in or a technical event of default under its master trust indenture. However, Fitch notes that a new executive management has been in place since mid-2019 and remains focused on better managing its expense base and improving core operations and cash flow levels. The RWN also reflects the challenges the organization faces in overcoming coronavirus pandemic related disruptions to volumes and sales tax revenues, which is further heightened given the recent surge in COVID-19 cases in the state of Texas and throughout the Permian Basin. The outbreak of coronavirus and related containment measures worldwide has created an uncertain and negative environment for the entire healthcare system. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in the sector as a result of the virus outbreak as it relates to severity and duration and incorporate revised expectations for future performance and assessment of key risks. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Leading Market Share in Energy Reliant Economy. ECHD's midrange defensibility primarily reflects its leading market share in its primary service area of Ector County, which remains vulnerable to energy price volatility. Additionally, ECHD is a taxing district that collects a 0.75% sales tax and levies ad valorem taxes up to $0.15 (currently at $0.1127) on each $100 taxable assessed valuation to support operations. While ECHD's available ad valorem taxing margin provides limited financial cushion against unexpected operating volatility, Fitch does not view the taxing margin as strong enough for a higher revenue defensibility assessment. Operating Risk: 'bb' Weak Historical Operational Performance. The change in ECHD's operating risk assessment to 'bb' from 'bbb' reflects consecutive years of weak operating performance and the expectation that disruptions to volumes and sales tax revenues from the coronavirus pandemic will further strain operational performance in fiscal 2020. Over the last four fiscal years, ECHD has averaged a weak 0.6% operating EBITDA margin and 1.4% EBITDA margin. Furthermore, ECHD's weak operating cash flow levels in recent years has resulted in management scaling back capital spending which has increased ECHD's average age of plant to 15.6 years. Financial Profile: 'bb' Weaker Net Leverage Position Under a Stress Scenario. In fiscal 2019, ECHD had a weak 63 DCOH, 28% cash-to-adjusted debt, and 10.4x net adjusted debt-to-adjusted EBITDA. Fitch believes ECHD's weaker operations and limited cash reserves provides little flexibility under a stressed scenario and expects its key net leverage and liquidity metrics to decline over the short-term due to stresses on operations from the coronavirus pandemic. The downgrade to 'BB' incorporates Fitch's expectation that ECHD's key metrics will decline to levels more consistent with the lower rating throughout fiscal 2020. Fitch's net leverage metrics include a higher pension liability obligation following an adjustment, per criteria, of ECHD's discount rate to 6% from 8.1%. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS Fitch views ECHD's weak 63 DCOH in fiscal 2019 as an asymmetric risk factor that is incorporated into the 'BB' rating. While ECHD has steadily improved its unrestricted cash reserves over the last two fiscal years, its 63 DCOH remains somewhat weak and currently trails its escalating liquidity covenant of 80 DCOH in fiscal 2020. Fitch's expectations are ECHD's DCOH metric will be further pressured in fiscal 2020, which could result in covenant breach of its required 80 DCOH and is reflected in the RWN. Current remedies of the liquidity covenant breach are a consultant call-in and/or a technical event of default under its MTI. RATING SENSITIVITIES The RWN reflects Fitch's view that ECHD's thin liquidity position may result in a covenant breach under its MTI and its weak historical operations provide little financial flexibility, even at the lower rating level, to absorb prolonged disruptions to volumes and/or tax revenues from the coronavirus pandemic. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- A decline in unrestricted cash reserves below Fitch's expectations that results in DCOH falling below 30 days or cash-to-adjusted debt declining below 15%; -- Any covenant violation that results in an event of default under its MTI; -- Should economic conditions decline further from Fitch's expectations for economic contraction due to the coronavirus outbreak, or should a second wave of infections and longer lockdown periods across parts of the country occur, Fitch would expect to see an even larger GDP decline in 2020 and a weaker recovery in 2021, and ECHD would experience rating pressure. Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Sustained operating EBITDA margins at or above 7% that results in an Operating Risk assessment of 'bbb'; -- Increased and sustained unrestricted cash reserves to levels that result in DCOH above 80 days and cash to adjusted debt above 30%. 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 ECHD owns and operates a 402 licensed bed acute care facility located in Odessa, Texas. With 349 beds in service, the hospital remains the largest hospital in the county and provides acute patient care services, inpatient rehabilitation services, outpatient diagnostic imaging, and radiation oncology services. Additionally, ECHD serves as a teaching hospital for Texas Tech University Health Sciences Center. In fiscal 2019, ECHD had total revenues of $376 million which includes approximately $70 million in tax revenues, in the form of both sales and property taxes. REVENUE DEFENSIBILITY In fiscal 2019, combined self-pay and Medicaid comprised a weak 28.5% of gross revenues. While ECHD's weaker payor mix is consistent with its role as the safety net hospital in the county, its payor mix has consistently deteriorated in recent years. Self-pay accounted for a high 18.9% of gross revenues in fiscal 2019, which is a large uptick from the 11.6% it represented in recent years. Management has previously attributed this growth to the large influx of uninsured new workers in the service area following the boom in oil production in the region over the last few years. In addition to Medicaid and self-pay, Medicare and commercial payors accounted for approximately 39% and 28% of gross revenues, respectively, in fiscal 2019. Due to its exposure to indigent patients and high uncompensated care costs, ECHD received approximately $23 million in supplement funding in fiscal 2019, a 41% decrease from the $38 million in received in fiscal 2018. ECHD remains a taxing district that has the authority to collect a 0.75% sales tax and to levy ad valorem taxes up to $0.15 on each $100 of TAV for the purpose of supporting operations. ECHD's tax base is coterminous with that of Ector County. In fiscal 2019, ECHD recognized approximately $54 million in sales taxes and $16 million in property tax revenues to support operations, which combined accounted for 23% of its total revenues. ECHD has the independent legal ability and demonstrated willingness to adjust its ad valorem maintenance and operations tax rates, but the district does not have the ability to adjust its 0.75% sales tax rate. With sales tax revenues comprising a large share of its overall tax revenue support and the district not having the ability to adjust its sales tax rate, the district's operations and revenues are subject to volatility if its sales tax revenues decline unexpectedly yoy. This was evidenced during fiscal 2016 following a 42% decline in its sales tax revenues over a two-year period, which partially led to ECHD's operating EBITDA margin falling to 0.3% in fiscal 2016 from 10.6% in fiscal 2014. Through the first six-months of 2020, sales tax revenues measured approximately $21.8 million which would be an 18% decline from fiscal 2019 levels if annualized. With the pandemic impacting oil production and its local economy, Fitch's believes ECHD's operations are particularly vulnerable in fiscal 2020 due to the pandemic's impact on both hospital volumes and its sales tax revenues which is incorporated into the downgrade and RWN. The district currently levies $0.1127 per $100 of TAV, all of which is used for operations and support of indigent care. While the district has the ability to levy up to $0.15, if a proposed tax rate results in an 8% yoy M&O levy increase (adjusted for removal of new properties), the proposed tax rate increase may be subject to election if petitioned by voters. Fitch estimates that the district's tax rate capacity provides up to $6.1 million of additional revenue based on the current TAV and tax levy. While this additional taxing capacity provides ECHD with limited financial cushion against unexpected operating volatility, it is not viewed by Fitch to be strong enough to support revenue defensibility higher than 'bbb' or midrange. Furthermore, will the pandemic likely impacting sales tax revenues, net patient revenues, and underlying TAVs over the next year, Fitch expects ECHD will likely increase its tax rate over the next year which would further limit additional taxing capacity. ECHD's Medical Center Hospital is the largest hospital in the county, a referral center for the 17-county Permian Basin region, and a teaching hospital for Texas Tech University's Health Services Center. The district's 65% primary service area market share is approximately twice that of the next competitor, Odessa Regional Medical Center. The district provides outpatient services through its network of facilities, clinics and specialty centers. The hospital's affiliated entity, Medical Center Hospital Professional Care employs hospital-based and clinic-based providers. Overall, hospital volumes continued to improve in fiscal 2019 as inpatient admissions increased 3.5%, births increased 8.5%, and emergency department volumes 3.3% yoy. However, due to the shutdown of elective admissions from the coronavirus pandemic and the likely impact to oil production and the local economy, Fitch believes ECHD's volumes will be negatively impacted in fiscal 2020. While the 'BB' rating incorporates the expectation for short-term disruptions to volumes and tax revenues, any prolonged disruption from the coronavirus pandemic that weakens ECHD's volumes and revenues beyond Fitch's expectations could further pressure the rating. Ector County resides in the Permian Basin, the largest oil producing region in the U.S. The county's five-year population growth, median household income, and poverty rates all remain favorable compared to state and national averages, reflecting the historical expansionary cycle in the oil-rich Permian Basin. However, Fitch considers the economy's exposure to energy price volatility a credit weakness, particularly because of ECHD's reliance on sales and property taxes to support operations. Fitch believes the high exposure to energy price volatility could allow for a drastic shift in ECHD's payor mix or revenue base in a short period of time. OPERATING RISK From fiscal 2012 -2014, ECHD produced strong profitability levels as evidenced by its average 9.9% operating EBITDA and 10.5% EBITDA margins. However, beginning in fiscal 2015, ECHD's operations have steadily been weak, averaging a 1.7% operating EBITDA and 2.4% EBITDA from fiscal 2015 -2019, which is more consistent with its lower operating risk assessment of 'bb'. Fitch attributes ECHD's rapid decline in profitability during this time period to increased staffing costs associated with its growth and expansion strategy, volatile tax revenue support that is tied to the cyclical oil and gas industry, a deteriorating payor mix, and increased costs and revenue cycle disruptions from its Cerner electronic medical record conversion that went live in fiscal 2017. While previous management enacted various operational and revenue cycle improvements geared at improving operating cash flow levels, ECHD's fiscal 2019 performance drastically declined yoy to a negative 1.1% operating EBITDA margin and 0% EBITDA margin. ECHD's executive management team was replaced in July 2019 and new management has remained focused on improving core performance, specifically on better expense management practices. Some of the initiatives enacted by new management include renegotiating contracts with its payors, eliminating its overall full-time employee count, and moving its emergency room to a Level III designation from a Level II. Despite most of these initiatives being put in place later in the fiscal year, ECHD had begun to experience improvements in its operating performance as evidenced by the 4.8% operating EBITDA and 5.3% EBITDA margin it had at the three-month interim period (ending Dec. 31, 2019). Despite the improvement at the three-month interim period, ECHD's operations are expected to be significantly impacted by the coronavirus pandemic which will disrupt hospital volumes and sales tax revenues. This is somewhat evident at the six-month interim period (ending March 31, 2020) as ECHD's operating EBITDA and EBITDA declined to negative 1.9% and negative 1.2%, respectively. ECHD has received approximately $26 million to date in the Coronavirus Aid, Relief, and Economic Security Act funding. However, despite the stimulus funding, ECHD's operational performance is expected to significantly weaken in fiscal 2020 and is expected to result in deterioration of unrestricted cash reserves. Fitch believes ECHD's capital needs are very high given its high average age of plant of 15.6 years in fiscal 2019. While ECHD had healthy capital spending of 134% of depreciation during fiscal years 2014 -2017, ECHD has limited capital spending to an average of 42% of depreciation over the last two years. The lower capital outlays in fiscal 2018 and fiscal 2019 reflect management's pullback of capital spending following its weaker operating cash flow levels in recent years. With ongoing pressures on revenues caused by the coronavirus pandemic and its weak performance in fiscal 2019, Fitch expects ECHD to continue to limit its capex spending over the short-term until new management can enact its cost savings measures to improve operating cash flow levels. This limited capex, while necessary, will further weaken ECHD's average age of plant metric and increase the need for higher capital spending over the medium to longer term. These higher capital needs are partially reflected in ECHD's lower 'bb' operating risk assessment. However, Fitch does believe that ECHD has some flexibility on its capex spending due to its strong market position and status as a safety net provider in Ector County. FINANCIAL PROFILE Despite weaker operations over the last several years, ECHD's limited capital spending has helped steadily improve its unrestricted reserves over the last two fiscal years. In fiscal 2019, ECHD had $66 million in unrestricted cash and investments which translates into 63 DCOH, 28.4% cash to adjusted debt, and 10.6 NADAE. Per Fitch's criteria, adjusted debt includes Fitch's adjusted net pension liability of $201 million in fiscal 2019. This liability differs from the $56 million liability reported on ECHD's financial statements due to Fitch's change in discount rate to 6% from 8%. However, despite the recent growth in cash reserves, Fitch expects ECHD's unrestricted cash and investments to decline in fiscal 2020 due to the disruptions on revenues caused by the coronavirus pandemic, which is reflected in the 'BB' rating. Fitch's forward-looking analysis reflects both an issuer specific revenue stress and a portfolio sensitivity analysis based upon ECHD's current portfolio allocation and Fitch's expectations for economic contraction. ECHD's current investment allocation is entirely in cash and cash equivalents and fixed income securities, which results in minimal disruptions to ECHD's investment portfolio throughout the forward-looking scenario. Fitch expects a deep economic contraction in 2Q20 with a massive rise in unemployment. Fitch assumes containment measures will begin to be unwound in the second quarter of 2020, allowing for recovery. However, with so much uncertainty depending on the progress of the virus, including the recent surge in cases in the Permian Basin in Texas, there is a large degree of uncertainty around Fitch's forecasts. In the event the virus is contained during the 1H20, Fitch assumes that real GDP growth will bounce back strongly in 2021. Under these assumptions, ECHD's net leverage metrics are consistent with a 'bb' financial profile assessment and its 'BB' IDR and revenue bond rating. However, given its limited cash reserves, Fitch believes ECHD is acutely sensitive to prolonged disruptions from the coronavirus pandemic which is incorporated into the RWN. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS Fitch views ECHD's weak DCOH of 63 days in fiscal 2019 as an asymmetric risk. Fitch expects ECHD's unrestricted reserves to be further pressured in fiscal 2020, which should weaken its DCOH metric and afford little financial flexibility for prolonged operating pressures from the coronavirus pandemic. Furthermore, a Dec. 22, 2017 amendment to the district's revenue bond indenture agreement modified the coverage calculation ratio to exclude unusual, infrequent, or extraordinary non-cash items, including non-cash items relating to GACB 68 and GASB 75. The amendment also added a DCOH covenant escalating progressively from 50 DCOH as of fiscal 2018, 60 DCOH in fiscal 2019, up to 80 DCOH as of fiscal 2020, and 100 DCOH thereafter. Fitch believes ECHD may violate this covenant in fiscal 2020 which may result in a consultant call-in or a technical event of default under its MTI. The district's debt includes $41.2 million of fixed rate revenue bonds (series 2010B) maturing in 2035 and $2.8 million of bank notes maturing by 2020. Additionally, ECHD participates in the Texas County and District Retirement System, a multiple-employer defined benefit pension plan. In fiscal 2019, the ECHD's DB pension plan reported a net pension liability of $56 million utilizing an 8% discount rate. However, Fitch includes a higher net pension liability of $201.6 million to ECHD's adjusted debt calculation, reflecting an assumed discount rate of 6%. 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). FARR BUILDERS: Frost Objects to Disclosure Statement ---------------------------------------------------- Frost Bank objects to and opposes approval of the Debtor's Disclosure Statement proposed by Farr Builders, LLC. Frost asserts that the Plan fails to disclose how long the properties have been or will be listed for sale, the sales price of the properties, and the name and company of the listing broker. Frost complains that the Debtors have also failed to disclose the existence of any marketing plan, time limits, or strike price for the properties. According to Frost, there are no details in either document with respect to the administrative claim such as amount, source, status, timing and chances of success. Frost points out that the Disclosure Statement and Plan do not provide any details with respect to the sales effort. Attorneys for Frost Bank: Robert L. Barrows WARREN, DRUGAN & BARROWS, P.C. 800 Broadway, Suite 200 San Antonio, Texas 78215 Telephone: (210) 226-4131 Facsimile: (210) 224-6488 rbarrows@wdblaw.com About Farr Builders Farr Builders, LLC, a general contractor based in San Antonio, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50324) on Feb. 7, 2020. At the time of the filing, the Debtor disclosed $3,792,881 in assets and $2,345,269 in liabilities. Judge Ronald B. King oversees the case. Heidi McLeod Law Office is the Debtor's bankruptcy counsel. FORESIGHT ENERGY: Unsecureds to Split $2.55 Million in Plan ----------------------------------------------------------- Foresight Energy LP, et al., submitted a Second Amended Joint Chapter 11 Plan of Reorganization. The DIP Claims will be allowed and deemed to be Allowed Claims in the full amount outstanding under the DIP Credit Agreement as of the Effective Date. In full satisfaction, settlement, discharge and release of, and in exchange for, the DIP Claims, each Holder of an Allowed DIP Claim shall be indefeasibly paid and satisfied in full in Cash on the Effective Date except to the extent that a Holder of a DIP Claim agrees to less favorable treatment. Class 3 First Lien Facility Claims are impaired. The First Lien Facility Claims are allowed in an aggregate amount of not less than $844,158,764 plus any First Lien Accrued Adequate Protection Payments. Each Holder of an Allowed First Lien Facility Claim shall receive its pro rata share of 92.75% of the New Common Equity, subject to the Full Equity Dilution. Class 4 Second Lien Notes Claims are impaired. The Second Lien Notes Claims are allowed in an aggregate amount of not less than $472,265,180. Each Holder of an Allowed Second Lien Notes Claim shall receive its Pro Rata share of 7.25% of the New Common Equity, subject to the Full Equity Dilution. Class 5 General Unsecured Claims are impaired. Each Holder of an Allowed General Unsecured Claim shall receive at its option either: (i) its Pro Rata share of $2,550,000 in cash from the GUC Cash Pool; or (ii) other less favorable treatment agreed to by the Holder. Class 8 Interests in FELP and Interests in GP LLC is impaired. On the Effective Date, all interests in GP LLC and all interests in FELP will be cancelled and discharged and shall be of no further force and effect, whether surrendered for cancellation or otherwise, and each Holder of such Interests shall not be entitled to receive any distribution under the Plan on account of such Interests. Consideration for Plan distributions shall come from Equity Interests in Reorganized Foresight and Exit Facility. A full-text copy of the Second Amended Joint Chapter 11 Plan of Reorganization dated June 17, 2020, is available at https://tinyurl.com/y736ebj4 from PacerMonitor.com at no charge. Co-Counsel for the Debtors: Paul M. Basta Alice Belisle Eaton Alexander Woolverton PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019 Telephone: (212) 373-3000 Facsimile: (212) 757-3990 Co-Counsel for the Debtors: Richard W. Engel, Jr. John G. Willard Kathryn R. Redmond ARMSTRONG TEASDALE LLP 7700 Forsyth Boulevard, Suite 1800 St. Louis, Missouri 63105 Telephone: (314) 621-5070 Facsimile: (314) 621-5065 About Foresight Energy Foresight Energy and its subsidiaries -- http://www.foresight.com/ -- are producers of thermal coal, with four mining complexes and nearly 2.1 billion tons of proven and probably coal reserves strategically located near multiple rail and river transportation access points in the Illinois Basin. The Debtors also own a barge-loading river terminal on the Ohio River. From this strategic position, the Debtors sell their coal primarily to electric utility and industrial companies located in the eastern half of the United States and across the international market. Foresight Energy LP and its affiliates sought Chapter 11 protection (Bankr. E.D. Mo. Lead Case No. 20-41308) on March 10, 2020. The Debtors were estimated to have $1 billion to $10 billion in assets and liabilities. The Hon. Kathy A. Surratt-States is the case judge. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to Foresight Energy; Jefferies Group is acting as investment banker; and FTI Consulting, Inc. is acting as financial advisor. Prime Clerk LLC is the claims agent at https://cases.primeclerk.com/ForesightEnergy Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel and Lazard Freres & Co. LLC is acting as investment banker to the Ad Hoc Lender Group representing lenders under the first lien credit agreement. Milbank LLP is acting as legal counsel and Perella Weinberg Partners LP is acting as investment banker to the Ad Hoc Lender Group representing crossover lenders under each of the second lien indenture and first lien credit agreement. FOX VALLEY PRO: Unsecureds Will be Paid 100% of Their Claims ------------------------------------------------------------ Fox Valley Pro Basketball, Inc., filed Plan and a Disclosure Statement. The Debtor has recently obtained an SBA EIDL loan for $150,000 and a new debtor in possession loan for $475,000 that will permit the Debtor to pay the real estate taxes and other costs incurred during the chapter 11 Case. There is no guaranty that the TIF Financing will occur. The Debtor must meet each condition of the Letter of Intent. At the hearing to consider confirmation of the Plan, the Debtor will be required to show that the Plan is feasible, meaning that the Debtor will likely be able to perform as required by the Plan. If the Debtor is unable to show the Plan is feasible, the Court will not confirm the Plan the Debtor's reorganization efforts will likely fail and Bayland will receive all assets, except the TIF Agreements and the Bayland Preference Action. Allowed Administrative Expenses from DIP loans During the case, the Debtor obtained financing from the Windward of $300,000, the Small Business Administration's Economic Injury Disaster Loan of $150,000, GL2020 LLC of $475,000 and from Two Willows. The loans from Windward and GL2020 LLC will be paid interest on a monthly basis at 9% until November 15, 2020 at which time the full principal amount and accrued interest will be paid from Debtor's profits and the proceeds of the TIF Agreements. The Small Business Administration’s Economic Injury Disaster Loan of $150,000 will be paid under the terms agreed to when it was obtained. They were interest at 3.75% per annum with a 30 year amortization. Payment were to begin 12 months after the loan was obtained, June 2021. With respect to the Class 1 Allowed Claims of Bayland, the Debtor and Bayland have stipulated to the value of Bayland's collateral for all purposes during the Case as being $10.3 million. The Plan provides that Bayland’s Secured Claim will be paid in equal monthly installments of principal with interest over 300 months with interest between 4.25% (payments of approximately $56,000) or under terms determined by the Court to be fair and equitable. Bayland’s Allowed Unsecured Claim of approximately $2.3 million, plus an additional $508,137 if the Bayland Preference Action is successful and Bayland pays the amount owed. Class 3: Allowed Unsecured Claims - Trade (Convenience; less than $1,000) will be paid 75% of their allowed claim on the Effective date without interest. Creditors have the option to be treated and paid 100% of the Claims as Class 4 Claims if they affirmatively elect to do so. Holders of Class 4: Allowed Unsecured Claims - Trade (Large Claims; more than $1,000) will receive 100% of their allowed claims. The class will receive payment of $125,000 on the Effective Date to be shared on a pro rata basis, for a 15% dividend. The balance of the allowed clams will be paid in equal monthly installments without interest over 60 months. LIQUIDATION ANALYSIS The chapter 11 administrative expenses are estimated to be approximately $1.3 million and consist of $350,000 for the Debtor’s attorneys, Kerkman & Dunn, $34,000 for Suttner Accounting Inc., $70,000 for the DIP loan from Two Willows, $300,000 for the DIP loan from Windward, $150,000 for the SBA loan, $475,000 from the GL2020 LLC DIP loan and $126,000 for vendors and contractors, some of which is disputed. A full-text copy of the Disclosure Statement dated June 17, 2020, is available at https://tinyurl.com/y8olxlsq from PacerMonitor.com at no charge. Attorneys for Fox Valley Pro Basketball: Kerkman & Dunn 839 N. Jefferson St., Suite 400 Milwaukee, Wisconsin 53202-3744 Tex: 414.277.8200 Fax: 414.277.0100 E-mail: jkerkman@kerkmandunn.com About Fox Valley Pro Basketball Fox Valley Pro Basketball, Inc., is the owner of the Menominee Nation Arena in Oshkosh, Wis. The arena serves as the home of the Wisconsin Herd of the NBA G League and the Wisconsin Glow women's basketball team. Fox Valley Pro Basketball sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis. Case No. 19-28025) on Aug. 19, 2019. 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. The case is assigned to Judge Brett H. Ludwig. Kerkman & Dunn is the Debtor's counsel. G-III APPAREL: Moody's Rates New Senior Secured Notes 'Ba3' ----------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to G-III Apparel Group, Ltd.'s proposed senior secured notes offering. Moody's also affirmed all existing ratings including its Ba3 corporate family rating, Ba3-PD probability of default rating, and Ba3 on the senior secured term loan. Its speculative grade liquidity rating remains an SGL-3 and the rating outlook remains negative. Proceeds from the new notes will be used to repay G-III's senior secured term loan due December 2022 and for general corporate purposes. Upon completion of the re-financing, the Ba3 rating on the senior secured term loan will be withdrawn. G-III also intends to extend the expiration of it unrated $650 million secured ABL revolver to 2025. "The transaction will enhance G-III's liquidity profile by extending its debt maturity profile and adding cash to the balance sheet," stated Moody's apparel analyst, Mike Zuccaro. "Operating performance and credit metrics will significantly deteriorate in FY 2021. However, with a strong stable of brands and a very conservative leverage profile prior to the coronavirus pandemic, Moody's expects performance and metrics to improve to levels more commensurate with the rating by the end of fiscal January 2022." G-III has taken significant action to reduce costs and preserve cash, including the restructuring of its retail operations, including the closing of 110 Wilsons Leather and 89 G.H. Bass stores. Assignments: Issuer: G-III Apparel Group, Ltd. Senior Secured Regular Bond/Debenture, Assigned Ba3 (LGD4) Affirmations: Issuer: G-III Apparel Group, Ltd. Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD4) Outlook Actions: Issuer: G-III Apparel Group, Ltd. Outlook, Remains Negative RATINGS RATIONALE G-III 's Ba3 CFR reflects its solid market position, well known brands, broad product offering and track record of growth, both organically and through new licenses and acquisitions. The December 2016 acquisition of Donna Karan expanded the company's portfolio of owned brands and provided significant profitable growth opportunities. The rating is supported by governance considerations, specifically a conservative leverage policy that targets debt reduction and maintaining moderate leverage. As of fiscal year ended January 2020, lease-adjusted debt-to-EBITDAR was approximately 1.9x, having improved significantly since the acquisition of Donna Karan due to both earnings growth and debt reduction. Liquidity is adequate, supported by balance sheet cash and ample revolver availability. G-III's credit profile is constrained by the company's ongoing reliance on licensed brands for more half of its sales, and the relatively short term of the contracts within the licensed portfolio. Calvin Klein, its largest licensed brand and longest current contract, expires in December 2023. In addition, as an apparel wholesaler/retailer, G-III's business risk is high due to the potential for performance volatility related to fashion risk or changes in consumer spending, and significant wholesale customer concentration. While significantly reduced over the past few years, sourcing concentration from China remains relatively high. Thus recent tariff increases on products sourced in China and sold into the United States will modestly increase costs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects the risk that a prolonged downturn caused by the coronavirus will pressure the company's profitability and credit metrics over the near-to-intermediate term. The ratings could be downgraded should there not be a clear trend toward business improvement which will position the company to approach 60% of its fiscal 2020 EBITDA in fiscal 2022, if liquidity were to deteriorate through increased revolver borrowing or negative free cash flow, or if financial policy became more aggressive, such as through large debt-financed acquisitions or share buybacks while leverage remains elevated. Failure to renew major licenses or sustainably reduce leverage ahead of major license expirations could also lead to a ratings downgrade. Specific metrics include average lease-adjusted debt/EBITDA sustained above 4.5 times or EBITA/interest expense below 2.5 times. The ratings could be upgraded over time if the company sustainably expands revenue and EBITA margins, maintains conservative financial policies and good liquidity. Quantitatively, an upgrade would require average lease-adjusted debt/EBITDA sustained below 3.5 times and EBITA/interest expense above 3.5 times. G-III designs, sources and markets apparel and accessories under owned, licensed and private label brands. G-III's owned brands include DKNY, Donna Karan, Vilebrequin, G. H. Bass, Andrew Marc, Marc New York, Eliza J and Jessica Howard. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi's and Dockers brands among others. The company also operates retail stores under the DKNY, Wilsons Leather, G. H. Bass, Vilebrequin, Calvin Klein Performance and Karl Lagerfeld Paris names. Revenue for the twelve-month period ended April 30, 2020 is approximately $2.9 billion. The principal methodology used in these ratings was Apparel Methodology published in October 2019. GNC HOLDINGS: Fitch Withdraws 'D' LT IDR on Chapter 11 Filing ------------------------------------------------------------- Fitch Ratings has withdrawn the 'D' Long-Term Issuer Default Ratings for GNC Holdings, Inc. and General Nutrition Centers, Inc. Given GNC's Chapter 11 filing on June 23, 2020, Fitch will no longer provide ratings or analytical coverage for the company. KEY RATING DRIVERS No longer applicable given its rating withdrawal. RATING SENSITIVITIES Rating sensitivities are not applicable as the ratings are being withdrawn. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. 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). General Nutrition Centers, Inc. - LT IDR WD; Withdrawn - Senior secured; LT WD; Withdrawn - Senior secured; LT WD; Withdrawn GNC Holdings, Inc. - LT IDR WD; Withdrawn - Preferred; LT WD; Withdrawn GREENCROFT OBLIGATED: Fitch Affirms BB+ Rating on 2013A Bonds ------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on the following bonds issued by the Indiana Finance Authority on behalf of Greencroft Obligated Group: -- $41.9 million revenue bonds, series 2013A. The Rating Outlook is Stable. SECURITY The bonds are secured by a mortgage on GOG's facilities, a gross revenue pledge, and a debt service reserve fund. KEY RATING DRIVERS SOLID OPERATING HISTORY: A key credit strength is GOG's long operating history in each of its three service areas, which dates back to 1967. GOG's unit mix is comprised of a higher proportion of assisted living and skilled nursing units relative to other life plan communities, which helps serve as a differentiator in a somewhat competitive marketplace. Operating performance has been stable and consistent with the 'BB+' rating. In fiscal 2019, GOG had a 93.8% operating ratio, 14.1% net operating margin, and -2.1% excess margin, which are favorable to, or on par with, Fitch's below investment grade medians of 100.7%, 3.8% and negative 2.4%, respectively. GOG continues to benefit from participation in the state of Indiana's intergovernmental transfer program allowing GOG to leverage supplemental payments for an annual benefit of about $3.0 million. The coronavirus pandemic has had minimal impact on GOG's operations to date. GOG received $1.9 million in relief funds and a PPP loan of $4.8 million. Fitch expects these funds will offset budgeted revenue shortfalls and elevated expenses related to personal protective equipment. RELATIONSHIP WITH GREENCROFT COMMUNITIES: Each member of GOG (Greencroft Goshen, Southfield Village, and Hamilton Grove) is affiliated with Greencroft Retirement Communities, which serves as the sole corporate member and manager and provides various benefits such as financial planning, budgeting, and management expertise. The strong relationship dates back to the founding of each affiliate and each obligated group member has entered into an affiliation contract with GRC into perpetuity, which Fitch views favorably. SUFFICIENT LIQUIDITY POSITION: GOG's fiscal 2019 unrestricted cash and investment remained consistent with fiscal 2018, with $26.0 million translating into 272 days cash on hand, 38.4% cash to debt, and 4.9x cushion ratio. These metrics remain sufficient to support a 'BB+' rating level and are on par with Fitch's BIG medians of 312 DCOH, 33% cash to debt, and 4.3x cushion ratio. However, these metrics remain weaker than Fitch's 'BBB' category medians of 465 DCOH, 64% cash to debt, and 8.3x cushion ratio. IMPROVING CENSUS: Occupancy for assisted and skilled nursing has improved somewhat since fiscal 2018 with average occupancy of 91.5% for ILUs, and 88.1 % for skilled nursing for fiscal 2019. Occupancy for ALUs averaged 79.8% for 2019 but is up to 92% for the most recent quarter end. GOG still faces staffing challenges arising from a tight labor market in GOG's service area. Management continues to address the staffing levels through wage adjustments, retention programs and more efficient utilization of staff at all three campuses. Occupancy levels are trending up and census remains sufficient to support stable operations. ELEVATED, BUT MANAGEABLE LONG-TERM LIABILITIES: Although slightly elevated, GOG's debt burden remains manageable as evidenced by maximum annual debt service equating to 13.7% of fiscal 2019 total revenues, which compares favorably to Fitch's BIG median of 16.7%, yet remains weaker than Fitch's 'BBB' category median of 12.9%. Coverage remains comfortable for the rating level with 1.5x MADS coverage and 1.2x revenue-only coverage in fiscal 2019. RATING SENSITIVITIES The Stable Outlook is driven primarily by GOG's sufficient operating metrics, sustained demand for its service lines, ample cash position, and sustainable leverage profile. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained significant improvements in core operating metrics; -- Growth in unrestricted cash and investments as a result of improved operating metrics; Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Decrease in demand resulting in decreased operating margins and weaker liquidity; -- Weaker operating performance resulting in lower coverage levels and given GOG's elevated debt burden and modest coverage from low entrance fees from turnover units. 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 GOG comprises three separate Type-C LPCs: Greencroft Goshen, located in Goshen, IN; Southfield Village, located in Southbend, IN; and Hamilton Grove, located in New Carlisle, IN. The total OG consists of 404 ILUs, 188 ALUs, and 335 SNF beds. GOG had total operating revenues of $38.4 million in fiscal 2019. All three OG campuses are part of and managed by GRC, which also provides management services for four additional retirement communities outside of the OG, with about 2,000 residents. GOG provides very limited financial support to other non-obligated members of GRC, with only about $1.0 million of advances to affiliates outstanding at the end of fiscal 2019. The recent outbreak of coronavirus and rise in related government containment measures worldwide has created an uncertain environment for the entire healthcare system in the near term. While GOG's financial performance through the most recently available data has not indicated any material impairment as a direct result of the pandemic, 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. 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). GRUPO AEROMEXICO: Wins Court OK to Reject Leases for 19 Planes -------------------------------------------------------------- Grupo Aeromexico, S.A.B. de C.V. (BMV "AEROMEX") said July 23, 2020 that as part of the rights afforded within its voluntary financial restructuring process under Chapter 11 of the United States Bankruptcy, the Company on July 3 requested Court authorization to reject certain lease agreements for 19 aircraft to their respective lessors in an orderly manner. These aircraft are not part of the Company's strategic fleet requirements under current market conditions. The aircraft involved are: 5 Boeing 737-800s, 5 Boeing 737-700s and 9 Embraer E-170-LR aircraft, as well as 4 GE CF34-8E5 engines (the "Equipment"). This motion is part of the Company's measures to ensure a more efficient and homogeneous fleet, in order to ensure a viable and profitable commercial platform in the new post COVID-19 economic reality. The July 23 hearing approved the termination of the contracts in agreement with the Company's request. Aeromexico will follow the guidelines authorized by the Court and the logistical aspects agreed with the lessors for the orderly return of the Equipment. This will reduce costs associated with the leasing and maintenance of the Equipment and is part of the efforts to rationalize the fleet of its subsidiaries that operate under the Aeromexico and Aeromexico Connect brands. The Company called the court decision "positive," which has no effect on the Company's network plan or frequencies. In addition to strengthening the Company's operation towards a more profitable and sustainable future the lease rejection, the Company explained, will contribute to the business plan which is being reviewed by management, supported by operational and financial advisers. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors were estimated to have consolidated assets and liabilities of $1 billion to $10 billion. Grupo Aeromexico, S.A.B. de C.V. is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. 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. At the time of filing, the Group's operating fleet of 119 aircraft is comprised of Boeing 787 and 737 jet airliners and Embraer 170 and 190 models. Aeromexico is a founding member of the SkyTeam airline alliance, which celebrated its 20th anniversary, and serves in 170 countries by the 19 SkyTeam airline partners. Aeromexico created and implemented a Health and Sanitization Management System (HSMS) to protect its customers and employees at all steps of its operations. Davis Polk & Wardwell LLP and Cervantes Sainz are acting as Aeromexico's legal counsel, Rothschild & Co. is acting as financial advisor, and AlixPartners, LLP is serving as restructuring advisor to the Company. Epiq Bankruptcy Solutions is the claims agent. GT POLARIS: Fitch Assigns 'B' LongTerm IDR, Outlook Stable ---------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Ratings to GT Polaris, Inc. [Orion Advisor Solutions] of 'B' with a Stable Outlook. Fitch has also assigned a senior secured first lien issue rating of 'BB-'/'RR2'. Fitch's actions affect approximately $780 million of committed and outstanding debt, pro forma for the transaction to be acquired and combined with Brinker Capital. KEY RATING DRIVERS Market Leadership: The combination of Orion and Brinker is expected to create a leading turnkey asset management program with a number four market position and over $40 billion of assets under management. Fitch believes the combination includes the potential to enhance sales momentum given Orion's leading integrated subscription-based portfolio management software, open-architecture platform, and strength in the small-mid market RIA channel, as well as Brinker's strong position in the high net-worth and insurance broker-dealer segments. Fitch believes the company will be well positioned for market share gains and elevated growth rates resulting from established, complimentary channel positions and opportunities to sell Orion's software platform to the combined client base, resulting in continued growth momentum and contributing to deleveraging capacity. Strong Secular Tailwinds: Fitch believes Orion benefits from a strong growth opportunity as the company's target RIA clients are likely to continue to benefit from supportive macro and secular trends. Fee-based revenue growth, which is dependent on the investable AUM controlled by the company's target RIA clients, is supported by the long-term growth rate in US household directly held investments of 7% per annum, according to Federal Reserve data. In addition, RIAs have experienced elevated growth in AUM of 8.5% per annum since 2009, according to RIA Channel/RIA Database, indicative of strong market share gains as the industry continues to experience a secular shift away from the traditional wirehouses, broker-dealers, and investment and retail banks. Fitch believes this trend is likely to persist given higher service levels provided by RIAs, reduced conflicts of interest, and bank and brokerage consolidation, as well as a desire for independence, fiduciary alignment with clients and higher payouts among professional advisors. Finally, the evolving and rapidly growing RIA industry provides an additional vector of growth for Orion given the opportunity to sell the company's portfolio management software solution to a market in which advisors are faced with high reporting, compliance and back‐office costs and are making increasing use of outsourced solutions in order to devote more time towards client service and to compete in an increasingly digitized space. Fitch believes these trends are supportive of long-term revenue growth, leading to its forecast of 10% organic growth per annum. Margin Expansion Opportunity: The combination of Orion and Brinker presents opportunities for significant cost reductions and synergies, leading to strong margin expansion potential as management and the sponsor have identified synergies and cost reductions across sales, marketing, technology, investment management and corporate administration functions. Fitch forecasts partial synergy achievement will to lead to over 600 bps of EBITDA margin expansion by FY21, enabling a reduction in leverage of approximately 1.6x. Fitch believes margins in the high 40's and strong FCF conversion will lead to FCF margins averaging mid-teens over the forecast horizon, which positively supports debt-servicing ability given elevated leverage. Cyclical Fee-based Revenue: Fitch believes that Orion is highly exposed to volatility in financial market given the reliance on fee revenue that is based on clients' AUM. Fitch believes that risks from a sustained decline in financial markets and resulting revenue pressure are magnified by the company's elevated leverage profile. For example, during the height of the financial crisis in 2008, US household directly held financial assets declined by 25%. Fitch believes a similar decline, depending on its duration, could result in significant challenges for Orion given the high levels of debt. In 2020, Fitch believes the declines in financial markets experienced during the height of pandemic fears will limit revenue growth to mid-single digits. Fitch believes the cyclicality of fee-based revenue is partially offset by the increasing revenue mix from company's subscription software product that Fitch forecasts will contribute 47% of revenue by 2023, up from 41% in 2020. Acquisitive Strategy: Fitch expects Orion to pursue an acquisitive strategy, making use of the company's leading market position to act as a consolidator in an evolving, fragmented market that is experiencing rapid growth. Fitch believes the company is likely to deploy capital towards a variety of attractive M&A candidates that may offer increased market share, new sales channels, new client segments, or that can bolster technology offerings. Fitch expects future M&A to be largely debt-funded, resulting in limited further deleveraging after FY21. Elevated Leverage: Fitch forecasts pro forma Total Debt with Equity Credit/Operating EBITDA leverage of 8.6x in FY20, inclusive of partial synergy achievement, declining to 7.0x in the following year as cost savings reach full runrate. Fitch expects modest further declines in leverage due to the company's private equity ownership, which is likely to pursue a debt-funded M&A growth strategy or other shareholder-friendly approaches to maximizing returns. Leverage compares unfavorably to 6.6x median for issuers in the 'B' rating category under Fitch's Technology coverage. Fitch notes that higher leverage is supported by its forecast for mid-teens average FCF margins, well above 1.8% median for the same peers in the 'B' rating category. However, Fitch believes elevated leverage presents a substantial risk given potential cyclicality of fee-based revenue. DERIVATION SUMMARY Fitch is evaluating Orion Advisor Solution in respect of its pending transaction to be acquired and combined with Brinker Capital by private equity sponsors Genstar Capital and TA Associates. Fitch forecasted FY20 pro forma leverage of 8.6x, inclusive of partial synergy achievement, is high for the rating compared to issuers in the Technology sector in the 'B' rating category, where median leverage is 6.6x. However, Fitch believes Orion's favorable long-term growth prospects, strong market positioning relative to competitors, and mid-teens FCF margins are supportive of the elevated leverage and indicative of a stronger credit profile than balance sheet metrics suggest. Fitch believes elevated leverage may present material risks over the longer term as a result of the potential for substantial cyclicality in fee-based revenue given the exposure to financial market volatility. Fitch believes that the elevated leverage profile may magnify risks from a sustained market downturn and lead to ratings downside should operating results deteriorate meaningfully. However, potential cyclicality is partially moderated by the company's subscription software product that Fitch expects will trend towards 50% revenue contribution over the longer term, by client retention rates that ranged 94% - 96% in recent years, and by secular trends that support new asset inflows. Fitch believes Orion benefits from several underlying macro and secular trends that provide an opportunity for sustained double-digit growth rates, when excluding the impacts from possible future financial market fluctuations. The company's target RIA market has experienced rapid growth due to long-term trends in US household financial asset accumulation as well as a share shift away from traditional financial management channels such as wirehouse and broker-dealers towards independent financial advice. Fitch believes the strength in the target market provides a long runway for revenue growth from the company's TAMP services as RIA clients experience continued growth in assets under management and from increased sales of the company's software portfolio management platform as the RIA market expands and comes to rely more heavily on outsourced operations. Combining Fitch's growth expectations with its forecast of achieved cost savings, Fitch believes that Orion will demonstrate a significant initial reduction in leverage to 7.0x in FY21 based primarily on rapid EBITDA growth. However, Fitch believes the pace of deleveraging will moderate thereafter given its expectation that Orion will likely pursue a debt-funded acquisitive strategy to serve as a consolidator in a fragmented market that is experiencing rapid growth and evolution. Fitch believes the rating is supported by attractive growth prospects that are supported by established macro and secular trends, strong market positioning with a number four share, and favorable FCF margins compared to peers in the rating category. However, Fitch's forecast for elevated leverage in respect of the potential for cyclicality caused by financial market volatility, are limitations for rating upside and suggestive of a 'B' rating. Fitch applied its Master Corporate Rating Criteria and its Corporates Notching and Recovery Ratings Criteria in the determination of the IDR and issue ratings. No country-ceiling or operating environment aspects had an impact on the rating. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Orion would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Fitch has assumed a 2% concession payment to creditors underneath the first lien lenders in the waterfall. Going-Concern Approach The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the enterprise valuation. Fitch contemplates a scenario in which a sustained decline in financial markets leads to a reduction in fee-based revenue and impairs debt-servicing ability. As a result, Fitch expects that Orion would likely be reorganized with reduced debt outstanding, permanent loss of a portion of the customer base, and increased levels of operating expenses to regain sales momentum and reinvest in technology offerings. Under this scenario, Fitch estimates reduced revenue and EBITDA margin levels would result in a going-concern EBITDA that is approximately 12% below Fitch forecasted pro forma 2020 EBITDA, which includes partially realized synergies. An EV multiple of 6.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: Comparable Reorganizations: In Fitch's 13th edition of its "Bankruptcy Enterprise Values and Creditor Recoveries" case study, the agency notes seven past reorganizations in the Technology sector, where the median recovery multiple was 4.9x. Of these companies, Fitch believes the most relevant comparisons are the reorganizations of Allen Systems Group, Inc. and Aspect Software Parent, Inc., which received recovery multiples of 8.4x and 5.5x, respectively. Fitch believes the Allen Systems Group Inc. reorganization is highly supportive of the 6.5x multiple assumed for Orion given the mission critical nature of both company's offerings. M&A Multiples: Fitch has reviewed recent transactions in the TAMP industry, including the acquisitions of OBS Financial Services and Global Financial Private Capital, that were completed at transaction multiple of 6.0x and 6.9x, respectively. Fitch concludes that the 6.5x multiple assumed for Orion is appropriate given the company's number four market share, substantially larger scale, and rapidly growing software offering that would suggest any recovery multiple below 7.0x is sufficiently conservative. Comparable Recovery Assumptions: Fitch-rated comparable companies include Blucora, Inc., a provider of an integrated platform of brokerage, investment advisory and insurance services to tax-oriented financial advisors and an online tax preparation service for consumers, and Focus Financial Partners Inc., a partnership of Registered Investment Adviser firms. The recovery analysis for these issuers included assumed recovery multiples of 6.5x and 5.0x, respectively. While faced with more mature markets and lower organic growth potential, Fitch believes Blucora is a more relevant comparison given similar business models in wealth technology. Fitch assumed a substantially lower multiple for Focus Financial Partners as a result of the company's degree of dependence on key partners. Trading Multiples: Fitch's analysis of trading multiples for public peers including, AssetMark Financial Holdings, Inc., SEI Investments Company, and Envestnet, Inc., determined a range of 9x - 35x. Fitch believes the peer comparison is supportive of the assumed 6.5x multiple for Orion given the likelihood that potentially stressed operation in a recovery scenario would result in a discounted multiple relative to publicly traded peers. The recovery model implies a 'BB-' and 'RR2' Recovery Rating for the company's first lien senior secured facilities, reflecting Fitch's belief that 71%-90% expected recovery is reasonable. KEY ASSUMPTIONS -- Transaction is completed with no material changes to the currently contemplated terms; -- Revenue growth of mid-single digits in FY20 due to market declines during the first quarter, followed by organic growth averaging 10% per annum thereafter; -- EBITDA Margin expansion to high 40's by FY21 based on partial achievement of synergy and cost reduction targets; -- Capital intensity of 5% per annum, consistent with management projections. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Total Debt with Equity Credit/Operating EBITDA leverage sustained below 6.0x; -- CFO-Capex/Total Debt with Equity Credit sustained above 7.5%; -- Total Debt with Equity Credit/FCF sustained below 15.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total Debt with Equity Credit/Operating EBITDA leverage sustained above 8.0x -- CFO-Capex/Total Debt with Equity Credit sustained below 2.5%; -- Total Debt with Equity Credit/FCF sustained above 25.0x; -- FFO Interest Coverage sustained below 2.0x; -- Inability to achieve synergy and cost reductions or to execute on integration and growth strategy. 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 Abundant Liquidity: Fitch expects Orion to maintain strong liquidity throughout the forecast horizon given strong free cash flow margins and moderate liquidity requirements resulting from a supportive cash conversion cycle. Pro forma for the transaction, liquidity is expected to be comprised of $10 million in readily available cash and full availability on the $80 million revolving credit facility. Liquidity is further supported by strong FCF margins that Fitch forecasts will average mid-teens, leading to nearly $90 million in aggregate FCF over the ratings horizon. Fitch expects rapid growth in liquidity due to cash accumulation and the expectation for the RCF to remain undrawn. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch made standard financial adjustments as described in the applicable ratings criteria. SOURCES OF INFORMATION The principal sources of information used in the analysis are described in the applicable criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3. This means ESG issues are credit neutral or have only minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Orion has an ESG Relevance Score of 4 for Governance Structure due to its ownership by private equity sponsors Genstar Capital and TA Associates, which are assumed to be heavily biased in favor of shareholder returns. 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. HALLIBURTON CO: Egan-Jones Cuts Sr. Unsecured Ratings to BB- ------------------------------------------------------------ Egan-Jones Ratings Company, on July 22, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Halliburton Co to BB- from BB+. Headquartered in Houston, Texas, Halliburton Company provides energy and engineering and construction services, as well as manufactures products for the energy industry. HCA INC: Egan-Jones Hikes Senior Unsecured Ratings to B+ -------------------------------------------------------- Egan-Jones Ratings Company, on July 24, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by HCA Inc/Old to B+ from B. Headquartered in Nashville, Tennessee, HCA Incorporated of Delaware owns, manages, and operates hospitals. The Company offers freestanding surgery, emergency care facilities, diagnostic, and imaging centers. HENRY ANESTHESIA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Henry Anesthesia Associates LLC 1133 Eagles Landing Parkway Stockbridge, GA 30281 Business Description: Henry Anesthesia Associates LLC is a Georgia for-profit limited liability company which provides anesthesiology services. The Debtor previously sought bankruptcy protection on Sept. 6, 2019 (Bankr. N.D. Ga. Case No. 19-64159). Chapter 11 Petition Date: July 28, 2020 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 20-68477 Judge: Hon. Lisa Ritchey Craig Debtor's Counsel: Leslie Pineyro, Esq. JONES & WALDEN, LLC 699 Piedmont Avenue NE Atlanta, GA 30308 Tel: 404-564-9300 Email: info@joneswalden.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kenneth Mims, M.D., 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/KGyb5v HORNBLOWER SUB: Moody's Hikes CFR to Caa2, Outlook Negative ----------------------------------------------------------- Moody's Investors Service downgraded Hornblower Sub, LLC's Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD, and senior secured rating to Caa2 from B3. The outlook remains negative. "The downgrade reflects Hornblower's weak liquidity driven by the travel restrictions and limitations on public gatherings in response to the coronavirus pandemic affecting most of Hornblower's business segments," stated Pete Trombetta, Moody's lodging and cruise analyst. "Moody's forecasts that the company's cash needs over the next two quarters, including cash refunds for canceled overnight cruises, may outpace cash inflows without a significant improvement in operations over that time period," added Trombetta. Moody's notes recent sponsor support in the form of a guarantee by its private equity owner -- Crestview Partners -- on a new $45 million revolver (fully drawn). Moody's expects that the sponsor will continue to support the company through this crisis. 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 Hornblower of the deterioration in credit quality it has triggered, given its exposure to ongoing travel restrictions and limitations on public gatherings, which has left it vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. Downgrades: Issuer: Hornblower Sub, LLC Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: Hornblower Sub, LLC Outlook, Remains Negative RATINGS RATIONALE Hornblower's credit profile is constrained by Moody's forecast of weak liquidity in the short term due to the impact from the spread of COVID-19 that has forced Hornblower to suspend operations in most of its business segments. The company has suspended most of its operations since March 2020 and significant limitations on public gatherings and travel restrictions are expected to remain in place at a minimum over the next two quarters. The company's credit profile also reflects its small scale in terms of absolute level of earnings and the company's earnings concentration in its concessions segment. Following the Entertainment Cruises acquisition, the company's concession segment -- which includes Alcatraz Cruises, Statue Cruises, Niagara Cruises and the NYC Ferry -- under normal operating conditions accounts for more than 40% of earnings. The Statue of Liberty/Ellis Island concession is currently up for renewal, and the loss of this contract would have a negative impact on operations until the company is able to redeploy the ships. The company benefits from the exclusive nature of multiyear contracts to operate ferry transportation services at two National Park Service locations (Alcatraz and Statue of Liberty/Ellis Island) and the Canadian side of the Niagara Falls for the Niagara Parks Commission. The company is also the exclusive operator of the NYC Ferry system which serviced about 6.3 million passengers in calendar year 2019. The company recently began operating under a new contract for its Alcatraz concession that runs through 2034. The negative outlook reflects Moody's expectation that the company's earnings and cash flow will continue to be pressured in the coming quarters due to regulations in each of its segments related to social distancing guidelines which will make it heavily reliant on new external sources of liquidity to support the expected cash deficits. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The company's ratings could be downgraded if the probability of default increases for any reason. Positive rating action is unlikely in the near term given the negative outlook but the ratings could be upgraded if the company's operations return to a normalized level and liquidity is improved. Through its various subsidiaries, Hornblower Holdco is a concessioner of ferry transportation services to the National Park Service for Alcatraz Island and the Statue of Liberty/Ellis Island and the Niagara Parks Commission for the Canadian side of Niagara Falls, and is the exclusive operator of the NYC Ferry system. The company also provides cruises & events service in 11 markets in the US, Canada and the UK, operates overnight cruises on the Mississippi River, the Pacific Northwest, and the Great Lakes, as well as provides maritime operations and management services to public and private clients. The company, which is headquartered in San Francisco, California, had gross revenues of about $687 million for the twelve-month ending period March 31, 2020 and does not file public financials. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. IMERYS TALC: Cyprus Historical Objects to Disclosure Statement -------------------------------------------------------------- Cyprus Historical Excess Insurers objects to the proposed Disclosure Statement and proposed confirmation schedule filed by Imerys Talc America, Inc., et al. Cyprus Historical points out that the pending filing of the withheld sections of the Plan, the Disclosure Statement is grossly incomplete and the approval hearing must be postponed. Cyprus Historical further points out that the Debtor's plan is a mere placeholder missing core sections central to a mass tort bankruptcy. Cyprus Historical asserts that the Disclosure Statement should not be approved because it does not contain adequate information as required by Section 1125 of the Bankruptcy Code. Cyprus Historical complains that the Debtors fail to disclose anything about how claims are to be allowed or valued. According to Cyprus Historical, the Debtors fail to disclose vital information about Johnson & Johnson's indemnity agreement and offer to assume the defense. Cyprus Historical points out that it is impossible to evaluate the impact of the Plan on insurers until the withheld Plan sections and documents are filed. Cyprus Historical asserts that the Debtors say nothing about how the Plan assigns contracts for which Debtors' ownership rights are in question. Cyprus Historical complains that the Court should not set any confirmation schedule until after the Debtors file the Trust Distribution Procedures. According to Cyprus Historical, any confirmation schedule should expressly provide ample time for discovery. Counsel for Columbia Casualty Company, Continental Casualty Company, the Continental Insurance Company, as successor to CNA Casualty of California and as successor in interest to certain insurance policies issued by Harbor Insurance Company, Lamorak Insurance Company (formerly known as OneBeacon America Insurance Company), as successor to Employers' Surplus Lines Insurance Company, Stonewall Insurance Company (now known as Berkshire Hathaway Specialty Insurance Company), National Union Fire Insurance Company of Pittsburgh PA, and Lexington Insurance Company to the extent that they issued policies to Cyprus Mines Corporation prior to 1981: Stamatios Stamoulis STAMOULIS & WEINBLATT LLC 800 N. West Street, Third Floor Wilmington, Delaware 19801 Telephone: +1 302 999 1540 Facsimile: +1 302 762 1688 - and - Tancred Schiavoni Janine Panchok-Berry O'MELVENY & MYERS LLP Times Square Tower 7 Times Square New York, New York 10036-6537 Telephone: +1 212 326 2000 Facsimile: +1 212 326 2061 E-mail: tschiavoni@omm.com jpanchok-berry@omm.com About Imerys Talc America Imerys Talc and its subsidiaries -- https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC, as financial advisor; and Prime Clerk LLC as claims agent. INTELSAT SA: Committee Taps Bonn Steichen as Special Counsel ------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of Intelsat S.A. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Bonn Steichen & Partners as special counsel. Bonn Steichen will render these services: (a) advising the committee regarding Luxembourg law issues that impact the Debtors' estates or otherwise affect the rights of the Debtors' unsecured creditors; (b) assisting and representing the committee with regard to any filings in Luxembourg; (c) advising the committee on the relationships between the Debtors and other parties-in-interest based in Luxembourg; and (d) providing such other services to the committee in relation to Luxembourg law as may be necessary and requested by the committee. The standard hourly rates charged by the firm are as follows: Partners $600 - $800 Counsel $450 - $550 Senior Associates $350 - $450 Associates $250 - $350 Legal Assistants $125 - $175 Alain Steichen, Esq., a partner at Bonn Steichen, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Steichen made the following disclosures in response to the request for additional information set forth in Paragraph D.1. of the Revised U.S. Trustee Guidelines: Question: Did Bonn Steichen agree to any variations from, or alternatives to, its standard or customary billing arrangements for its engagement? Response: No. Question: Do the professionals included in Bonn Steichen's engagement vary their rate based on the geographic location of Debtors' bankruptcy cases? 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: Bonn Steichen did not represent the committee prior to the commencement of the cases. The firm has in the past represented, currently represents and may represent in the future certain committee members or their affiliates in their capacities as members of official committees in other Chapter 11 cases or individually in matters wholly unrelated to Debtors' cases. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Bonn Steichen is developing a prospective budget and staffing plan for the committee's review and approval. Furthermore, the firm understands that the committee, along with Debtors and the U.S. Trustee, will maintain active oversight of the firm's billing practices. The firm can be reached through: Alain Steichen Bonn Steichen & Partners 2, rue Peternelchen, Immeuble C2 L-2370 Howald, LU Telephone: (352) 26-025-1 Facsimile: (352) 26-025-999 Email: asteichen@bsp.lu About Intelsat Intelsat S.A. -- www.intelsat.com -- is a publicly held operator of satellite services businesses, which provides communications services to media companies, telecommunication operators, internet service providers, and data networking service providers. It also provides commercial satellite communication services to the U.S. government and other select military organizations and their contractors. Intelsat's administrative headquarters are in McLean, Virginia, and it has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat and its 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. 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. Debtors have 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 and 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. The committee has tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as financial advisor, Moelis & Company LLC as investment banker, Bonn Steichen & Partners as special counsel, and Prime Clerk LLC as information agent. INTELSAT SA: Committee Hires Hunton Andrews as Co-Counsel --------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of Intelsat S.A. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Hunton Andrews Kurth, LLP. Hunton Andrews will serve as co-counsel with Milbank, LLP, the other firm representing the committee in Debtors' bankruptcy cases. The firm's attorneys and paralegal will be paid at hourly rates as follows: Tyler P. Brown, Partner $970 Justin F. Paget, Counsel $660 Henry P. (Toby) Long, III, Associate $655 Jennifer E. Wuebker, Associate $525 Tina L. Canada, Paralegal $270 Tyler Brown, Esq., a partner at Hunton Andrews, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Brown also made the following disclosures in response to the request for additional information set forth in Paragraph D.1. of the U.S. Trustee Guidelines: Question: Did Hunton Andrews agree to any variations from, or alternatives to, its standard or customary billing arrangements for its engagement? Response: Other than the discount provided by Hunton Andrews, the firm did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for its engagement. Question: Do the professionals included in the firm's engagement vary their rate based on the geographic location of the bankruptcy case? Response: No professional at Hunton Andrews included in the engagement has varied or will vary his rate based on the geographic location of the bankruptcy case. Question: If Hunton Andrews represented the client in the 12 months prepetition, disclose the firm's billing rates and material financial terms for the prepetition engagement, including any adjustments during the twelve months prepetition. If the firm's billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: No adjustments were made to either the billing rates or the material financial terms of Hunton Andrews' employment by the committee as a result of Debtors' Chapter 11 cases. The firm can be reached through: Tyler P. Brown, Esq. Justin F. Paget, Esq. Jennifer E. Wuebker, Esq. Hunton Andrews Kurth, LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 Telephone: (804) 788-8200 Facsimile: (804) 788-8218 About Intelsat Intelsat S.A. -- www.intelsat.com -- is a publicly held operator of satellite services businesses, which provides communications services to media companies, telecommunication operators, internet service providers, and data networking service providers. It also provides commercial satellite communication services to the U.S. government and other select military organizations and their contractors. Intelsat's administrative headquarters are in McLean, Virginia, and it has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat and its 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. 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. Debtors have 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 and 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. The committee has tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as financial advisor, Moelis & Company LLC as investment banker, Bonn Steichen & Partners as special counsel, and Prime Clerk LLC as information agent. INTELSAT SA: Committee Hires Moelis & Company as Investment Banker ------------------------------------------------------------------ The official committee of unsecured creditors appointed in the Chapter 11 cases of Intelsat S.A. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Moelis & Company, LLC as its investment banker. Moelis will render the following investment banking services: (a) assist the committee in reviewing and analyzing Debtors' results of operations, financial condition and business plan; (b) assist the committee in reviewing and analyzing a potential restructuring; (c) assist the committee in negotiating a restructuring; (d) assist the committee in analyzing the capital structure of Debtors; (e) advise and assist the committee regarding securities Debtors offer in a potential restructuring; and (f) assist the committee in reviewing any alternatives to a restructuring proposed by Debtors, creditors or parties-in-interest. Moelis will be compensated as follows: (a) Monthly Fee. A fee of $225,000 per month, payable in advance of each month. (b) Restructuring Fee. A fee of $8.5 million at the closing of a restructuring. Barak Klein, a managing director at Moelis, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Barak Klein Moelis & Company, LLC 399 Park Avenue New York, NY 10022 Telephone: (212) 883-3800 Facsimile: (212) 880-4260 About Intelsat Intelsat S.A. -- www.intelsat.com -- is a publicly held operator of satellite services businesses, which provides communications services to media companies, telecommunication operators, internet service providers, and data networking service providers. It also provides commercial satellite communication services to the U.S. government and other select military organizations and their contractors. Intelsat's administrative headquarters are in McLean, Virginia, and it has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat and its 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. 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. Debtors have 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 and 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. The committee has tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as financial advisor, Moelis & Company LLC as investment banker, Bonn Steichen & Partners as special counsel, and Prime Clerk LLC as information agent. INTELSAT SA: Committee Taps FTI Consulting as Financial Advisor --------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of Intelsat S.A. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ FTI Consulting, Inc. as its financial advisor. FTI Consulting will render these financial advisory services: (a) review of financial-related disclosures required by the Court; (b) preparation of analyses required to assess the sufficiency of any proposed debtor-in-possession financing or use of cash collateral; (c) assessment and monitoring of Debtors' short-term cash flow, liquidity, and operating results; (d) review of Debtors' proposed key employee retention and other employee benefit programs; (e) review of Debtors' business plan and underlying fleet strategy; (f) review of Debtors' cost/benefit analysis with respect to the affirmation or rejection of various executory contracts and leases; (g) review of Debtors' identification of potential cost savings; (h) review of any tax issues associated with, but not limited to, claims/stock trading, preservation of net operating losses, refunds due to Debtors, plans of reorganization, and asset sales; (i) review of the claims reconciliation and estimation process; (j) review of Debtors' corporate structure; (k) analysis of entity level value waterfalls and potential recoveries with respect to any proposed plans of reorganization; (l) attendance at meetings and assistance in discussions; (m) review and preparation of information and analysis necessary for the confirmation of a Chapter 11 plan and related disclosure statement; (n) evaluation and analysis of avoidance actions; (o) review and analysis of the FCC auction and clearing or relocation process; and (p) prosecution of committee responses or objections to Debtors' motions. The customary hourly rates for professionals anticipated to provide the services are as follows: Senior Managing Directors $760 - $1,295 Directors/Senior Directors/Managing Directors $535 - $905 Consultants/Senior Consultants $325 - $660 Administrative/Associates $125 - $280 Samuel Star, a senior managing director at FTI Consulting, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Samuel E. Star FTI Consulting, Inc. Three Times Square, 9th Floor New York NY 10036 Telephone: (212) 247-1010 Facsimile: (212) 841-9350 Email: samuel.star@fticonsulting.com About Intelsat Intelsat S.A. -- www.intelsat.com -- is a publicly held operator of satellite services businesses, which provides communications services to media companies, telecommunication operators, internet service providers, and data networking service providers. It also provides commercial satellite communication services to the U.S. government and other select military organizations and their contractors. Intelsat's administrative headquarters are in McLean, Virginia, and it has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat and its 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. 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. Debtors have 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 and 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. The committee has tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as financial advisor, Moelis & Company LLC as investment banker, Bonn Steichen & Partners as special counsel, and Prime Clerk LLC as information agent. INTELSAT SA: Committee Taps Prime Clerk as Information Agent ------------------------------------------------------------ The official committee of unsecured creditors appointed in the Chapter 11 cases of Intelsat S.A. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Prime Clerk LLC as its information agent. The committee desires to employ Prime Clerk to establish and maintain a website and to provide technology and communications-related services. Additionally, The firm will prepare and serve required notices and pleadings on behalf of the committee. The firm's claims and noticing rates are as follows: Analyst $35 - $55 Technology Consultant $35 - $95 Consultant/Senior Consultant $70 - $170 Director $175 - $195 Solicitation Consultant $195 Director of Solicitation $215 Benjamin Steele, vice president of Prime Clerk, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Benjamin J. Steele Shai Waisman Prime Clerk LLC One Grand Central Place 60 East 42nd Street, Suite 1440 New York, NY 10165 Telephone: (212) 257-5450 (212) 257-5490 Email: bsteele@primeclerk.com swaisman@primeclerk.com About Intelsat Intelsat S.A. -- www.intelsat.com -- is a publicly held operator of satellite services businesses, which provides communications services to media companies, telecommunication operators, internet service providers, and data networking service providers. It also provides commercial satellite communication services to the U.S. government and other select military organizations and their contractors. Intelsat's administrative headquarters are in McLean, Virginia, and it has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat and its 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. 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. Debtors have 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 and 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. The committee has tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as financial advisor, Moelis & Company LLC as investment banker, Bonn Steichen & Partners as special counsel, and Prime Clerk LLC as information agent. INTELSAT SA: Creditors' Committee Taps Milbank LLP as Counsel ------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of Intelsat S.A. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Milbank, LLP as its legal counsel. Milbank LLP will render these services: (a) participate in in-person and telephonic meetings of the committee and subcommittees formed thereby, and otherwise advise the committee with respect to its rights, powers and duties in these Chapter 11 Cases; (b) assist and advise the committee in its meetings and negotiations with the Debtors and other parties-in-interest regarding the administration of these Chapter 11 Cases; (c) represent the committee at hearings and other proceedings before the Court and such other courts or tribunals, as appropriate; (d) assist the committee in its analysis of, and negotiations with the Debtors or third parties related to, financing, asset disposition transactions, compromises of controversies, and assumption and rejection of executory contracts and unexpired leases; (e) assist the committee in its analysis of, and negotiations with the Debtors or third parties related to, the formulation, confirmation and implementation of a chapter 11 plan(s) and all documentation related thereto; (f) assist the committee in analyzing claims asserted against, and interests in, the Debtors, and in negotiating with the holders of such claims and interests and bringing, or participating in, objections or estimation proceedings with respect to such claims and interests; (g) assist with the committee's review of the Debtors' Schedules of Assets and Liabilities, Statements of Financial Affairs and other financial reports prepared by the Debtors, and the committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the historic and ongoing operation of their businesses; (h) assist and advise the committee with respect to its communications with the general creditor body regarding significant matters in these cases; (i) respond to inquiries from individual creditors as to the status of, and developments in, these chapter 11 cases; (j) review and analyze complaints, motions, applications, orders and other pleadings filed with the Court, and advise the committee with respect to its positions thereon and the filing of any responses thereto; (k) assist the committee in its review and analysis of, and negotiations with the Debtors and non-Debtor affiliates related to, intercompany transactions and claims; (l) review and analyze third party analyses or reports prepared in connection with potential claims of the Debtors, advise the committee with respect to its positions thereon, and perform such other diligence and independent analysis as may be requested by the committee; (m) assist the committee in preparing pleadings and applications, and pursuing or participating in adversary proceedings, contested matters and administrative proceedings as may be necessary or appropriate in furtherance of the committee's duties, interests, and objectives; and (n) perform such other legal services as may be necessary or as may be requested by the committee in accordance with the committee's powers and duties as set forth in the Bankruptcy Code. Milbank will coordinate with the other professionals retained in these Chapter 11 Cases to ensure a clear delineation of each firm's respective role in connection with representation of the committee in these Chapter 11 Cases to prevent duplication of services. The firm's hourly rates are as follows: Partners $1,215 - $1,615 Counsel $1,175 - $1,380 Senior Attorney $1,175 Associates $475 - $1,045 Legal Assistants $240 - $385 Andrew LeBlanc, Esq., a partner at Milbank, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. LeBlanc also made the following disclosures in response to the request for additional information set forth in Paragraph D.1. of the U.S. Trustee Guidelines: Question: Did Milbank agree to any variations from, or alternatives to, its standard or customary billing arrangements for its engagement? Response: No. Question: Do any of the professionals included in Milbank's 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 twelve months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Milbank did not represent the committee prior to the commencement of Debtors' Chapter 11 cases. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Milbank is in the process of developing a prospective budget and staffing plan for the committee's review and approval. Furthermore, Milbank understands that the committee, along with the Debtors and the U.S. Trustee, will maintain active oversight of Milbank's billing practices. The firm can be reached through: Andrew M. LeBlanc, Esq. Milbank LLP 1850 K Street, NW, Suite 1100 Washington, DC 20006 Telephone: (202) 835-7500 Facsimile: (202) 263-7586 Email: aleblanc@milbank.com About Intelsat Intelsat S.A. -- www.intelsat.com -- is a publicly held operator of satellite services businesses, which provides communications services to media companies, telecommunication operators, internet service providers, and data networking service providers. It also provides commercial satellite communication services to the U.S. government and other select military organizations and their contractors. Intelsat's administrative headquarters are in McLean, Virginia, and it has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat and its 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. 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. Debtors have 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 and 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. The committee has tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as financial advisor, Moelis & Company LLC as investment banker, Bonn Steichen & Partners as special counsel, and Prime Clerk LLC as information agent. JEP REALTY: July 29 Hearing on Disclosure Statement --------------------------------------------------- Judge Tracey N. Wise has ordered that the JEP Realty, LLC, is ordered to file an amended disclosure statement and plan no later than June 30, 2020, and to schedule a disclosure statement approval hearing for July 29th, 2020, at 9:30 a.m. Attorneys for the Debtor: MATTHEW B. BUNCH, ESQ. BUNCH & BROCK, PSC 271 West Short Street, Suite 805 Lexington, Kentucky 40507 Tel: (859) 254-5522 About JEP Realty JEP Realty, LLC, is a privately held real estate agency in Lexington, Kentucky. JEP Realty filed a voluntary petition for relief with the Court under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Ky Case No. 18-51712) on Sept. 20, 2018. In the petition signed by John E. Pappas, member, the Debtor was estimated to have $1 million to $10 million in assets and liabilities. Judge Tracey N. Wise oversees the case. Jamie L. Harris, Esq., at DelCotto Law Group PLLC, is the Debtor's counsel. K.G. IM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Fourteen affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- K.G. IM, LLC (Lead Debtor) 20-11723 136 East 57th Street 13th Floor New York, NY 10022 IL Mulino USA, LLC 20-11724 IM LLC – III 20-11725 IMNYLV, LLC 20-11726 IM NY, Florida, LLC 20-11727 IM NY, Puerto Rico, LLC 20-11728 IMNY AC, LLC 20-11729 IM Products, LLC 20-11730 IM Long Island Restaurant Group, LLC 20-11731 IM Long Island, LLC 20-11732 IM Franchise, LLC 20-11733 IM 60th Street Holdings, LLC 20-11734 IM Broadway, LLC 20-11735 IMNY Hamptons, LLC 20-11736 Business Description: The Debtors operate a chain of restaurants that focuses on Italian cuisine. Chapter 11 Petition Date: July 29, 2020 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. Martin Glenn Debtors' Bankruptcy Counsel: Gerard S. Catalanello, Esq. James J. Vincequerra, Esq. William Hao, Esq. ALSTON & BIRD LLP 90 Park Avenue New York, NY 10016 Tel: (212) 210-9400 Email: Gerard.Catalanello@alston.com James.Vincequerra@alston.com William.Hao@alston.com Debtors' Special Corporate Counsel: TRAXI LLC - AND - DAVIS & GILBERT LLP Estimated Assets: $50 million to $100 million Estimated Liabilities: $10 million to $50 million The petitions were signed by Gerald Katzoff, manager. K.G. IM, LLC listed Firstrust Bank as its sole unsecured creditor holding a claim of $1,769,631. Copies of the petitions containing, among other items, lists of the Debtors 20 largest unsecured creditors are available for free at PacerMonitor.com at: https://is.gd/bxSL5Z https://is.gd/LsTTfl https://is.gd/eIvXVU https://is.gd/954DG7 https://is.gd/pucMGA https://is.gd/c2Hidn https://is.gd/Lpq8eu https://is.gd/8iwvoG https://is.gd/ChsumX https://is.gd/00meKf https://is.gd/XWMA25 https://is.gd/UpOrtW https://is.gd/VCi1lI https://is.gd/jU8IIC List of Mulino USA's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Firstrust Bank Loan $1,769,631 Eric Paul Senior VP 15 E. Ridge Pike Conshohocken PA 1942 2. Davis & Gilbert LLP Professional $217,423 1740 Broadway #3 Services New York, NY 10019 3. ABS Partners Real Estate, LLC Trade $90,926 200 Park Avenue South 10th Floor New York, NY 1000 4. Citrin Cooperman & Company, LLP Trade $80,000 529 Fifth Avenue New York, NY 10017 5. Employers Compensation Ins. Co. Trade $74,199 6. Premium Finance Agreement Trade $28,561 7. Ellenoff Grossman and Schole LLP Trade $25,000 1345 Avenue of the Americas New York, NY 10105 8. Magnacare-Claim Trade $20,834 One Penn Plaza Suite 5300 New York, NY 10119 9. WestGUARD Insurance Company Trade $18,413 18-19 Berkshire Hathaway Guard P.O. Box A-H Wilkes-Barre, PA 18703 10. Silk & Halpern Rent $16,515 425 Madison Ave New York, NY 10017 11. Jody Markman Trade $15,333 55 E 59th St #1700 New York, NY 10022 12. Affiliated Adjustment Group, LTD. Trade $13,921 3000 Marcus Avenue, Suite 3W3 Lake Success, NY 11042 13. Independence Blue Cross Trade $12,569 1919 Market Street, 2nd Floor Philadelphia, PA 19103 14. Sterling & Sterling LLC Trade $11,084 dba Sterling Risk 135 Crossways Park Drive Suite 300 P.O. Box 9017 Woodbury, NY 11797 15. Compeat Inc. Trade $9,511 11500 Alterra Parkway Suite 130 Austin, TX 78758 16. CSC Trade $5,325 17. Ruth D. Raisfeld, PC Trade $5,000 1025 Westchester Avenue Suite 106 White Plains, NY 10604 18. Robert N. Swetnick, Esq. Trade $4,500 230 Park Ave 21st Floor New York, NY 10169 19. Victoire Loup Trade $4,060 20. Borah,Goldstein, ET.AL. Trade $3,909 IM0401 377 Broadway New York, NY 10013 KHAN REAL ESTATE: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: Khan Real Estate LLC 3311 2nd Avenue North Billings, MT 59101 Business Description: Khan Real Estate LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Its principal assets are located in Billings, Montana, having an appraised value of $1.69 million. Chapter 11 Petition Date: July 27, 2020 Court: United States Bankruptcy Court District of Montana Case No.: 20-10140 Judge: Hon. Benjamin P. Hursh Debtor's Counsel: Molly S. Considine, Esq. PATTEN PETERMAN BEKKEDAHL & GREEN 2817 2nd Avenue N, Ste 300 Billings, MT 59101 Tel: (406) 252-8500 Total Assets: $1,870,711 Total Liabilities: $1,210,322 The petition was signed by Mansoor A. Khan, member. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/gcO3h2 M9 DEFENSE: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------- The Office of the U.S. Trustee on July 25 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of M9 Defense, Inc. About M9 Defense M9 Defense Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-11733) on June 24, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $10 million and $50 million. Judge Timothy W. Dore oversees the case. Debtor has tapped Darrel B. Carter, Esq., at CBG Law Group, as its legal counsel. MARTIN MIDSTREAM: Reports $2.2-Mil. Net Loss for Second Quarter --------------------------------------------------------------- Martin Midstream Partners L.P. announced its financial results for the second quarter of 2020. "We are pleased with our second quarter results as we continue to navigate through the crisis brought on by the COVID-19 pandemic," commented Ruben Martin, president and chief executive officer of Martin Midstream GP LLC, the general partner of the Partnership. "Entering into the quarter we were beginning to see the negative impacts of reduced refinery utilization on our businesses. However, as expected, the performance of our fertilizer division offset a portion of the impact as sales were strong through the corn planting season. Overall we remain confident in our diversified business model during these challenging times and fully expect to meet our guidance, although the uncertainty around containment of the virus and the length of the disruption to our economy and society continues to blur our line of sight for the near future. I want to commend our team for their commitment to safe and reliable operations that protect the health of our workforce and business partners while continuing to deliver positive results. "Finally, I would like to thank our lenders and noteholders for the support they have given the Partnership through the amendment of our revolving credit facility and the refinancing of our senior notes by the exchange offer that was launched July 9th. As previously announced, the early participation results were 92.045%, slightly below the 95.0% requirement under the Restructuring Support Agreement. However, we are optimistic the threshold percentage will be met prior to the expiration date and anticipate settling the exchange on August 12th. Although we regret the need to reduce the cash distribution due to leverage covenant conditions contained in the revolving credit facility, the Partnership's extended debt maturity profile and improved liquidity allow us to continue to strengthen our balance sheet and reduce leverage while focusing on our long-term vision for the business." SECOND QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT Terminalling and Storage T&S Operating Income for the three months ended June 30, 2020 and 2019 was $3.3 million and $4.4 million, respectively. Adjusted segment EBITDA for T&S was $10.6 million and $12.3 million for the three month periods ended June 30, 2020 and 2019, respectively, reflecting reduced volumes in the lubricants business related to lower demand in the oil field and construction industries due to COVID-19, expired capital recovery fees at the Smackover Refinery and decreased fees related to a crude pipeline gathering rate adjustment. Transportation Transportation Operating Income for the three months ended June 30, 2020 and 2019 was $0.6 million and $3.3 million, respectively. Adjusted segment EBITDA for Transportation was $4.9 and $8.7 for the three months ended June 30, 2020 and 2019, respectively, reflecting lower land transportation load count and lower marine utilization related to demand destruction and lower refinery utilization as a result of COVID-19. Sulfur Services Sulfur Services Operating Income for the three months ended June 30, 2020 and 2019 was $7.4 million and $5.3 million, respectively. Adjusted segment EBITDA for Sulfur Services was $10.8 and $8.6 for the three months ended June 30, 2020 and 2019 respectively, reflecting increased volumes in the fertilizer business slightly offset by reduced sulfur volumes due to lower refinery utilization impacted by demand destruction around COVID-19. Natural Gas Liquids NGL Operating Income (Loss) for the three months ended June 30, 2020 and 2019 was $1.1 million and $(3.4) million, respectively. Adjusted segment EBITDA from continuing operations for NGL was $1.6 million and $(0.2) million for the three months ended June 30, 2020 and 2019, respectively, reflecting an increase in volumes and margins in 2020 and losses in 2019 from commodity hedging contracts related to activities in the butane optimization business. Unallocated Selling, General and Administrative Expense USGA expenses included in operating income were $4.4 million and $4.6 million for the three months ended June 30, 2020 and 2019 respectively. USGA expenses included in adjusted EBITDA were $4.0 million and $4.3 million for the three months ended June 30, 2020 and 2019 respectively, reflecting a decrease in professional fees. 2020 Financial Guidance Update The majority of the Company's refinery services are focused on the Gulf Coast Region whose states have reopened their economies. However, the impact on refinery utilization due to demand destruction related to the current increase in COVID-19 cases remains unclear. As a result, the Partnership is not providing detailed segment guidance for 2020 but instead providing an estimated range for Adjusted EBITDA, Expansion Capital Expenditures and Maintenance Capital Expenditures. Liquidity At June 30, 2020, the Partnership had $181 million drawn on its $400 million revolving credit facility, an $11 million increase from March 31, 2020. Accordingly, the Partnership's leverage ratio, as calculated under the revolving credit facility, was 4.8 times on June 30, 2020 compared to 4.7 times on March 31, 2020. The Partnership is in compliance with all debt covenants as of June 30, 2020. Quarterly Cash Distribution The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2020. The distribution is payable on Aug. 14, 2020 to common unitholders of record as of the close of business on Aug. 7, 2020. The ex-dividend date for the cash distribution is Aug. 6, 2020. COVID-19 Response The Partnership initiated protocols in response to the COVID-19 pandemic which include work from home initiatives to protect the health and safety of its employees as well as the communities where it operates, travel restrictions, and training personnel regarding preventative measures when accessing docks, vessels and operating locations. At this time all facilities are operational and monitored closely. Results of Operations The Partnership had a net loss from continuing operations for the three months ended June 30, 2020 of $2.2 million, a loss of $0.06 per limited partner unit. The Partnership had a net loss from continuing operations for the three months ended June 30, 2019 of $10.6 million, a loss of $0.27 per limited partner unit. Adjusted EBITDA from continuing operations for the three months ended June 30, 2020 was $23.9 million compared to the three months ended June 30, 2019 of $23.5 million. Distributable cash flow from continuing operations for the three months ended June 30, 2020 was $12.5 million compared to the three months ended June 30, 2019 of $6.4 million. The Partnership had no net income from discontinued operations for the three months ended June 30, 2020 compared to a loss of $180.6 million, or $4.55 per limited partner unit for the three months ended June 30, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the three months ended June 30, 2020 compared to $5.5 million for the three months ended June 30, 2019. The Partnership had no distributable cash flow from discontinued operations for the three months ended June 30, 2020 compared to $4.9 million for the three months ended June 30, 2019. The Partnership had net income from continuing operations for the six months ended June 30, 2020 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss from continuing operations for the six months ended June 30, 2019 of $15.4 million, a loss of $0.39 per limited partner unit. Adjusted EBITDA from continuing operations for the six months ended June 30, 2020 was $54.9 million compared to the six months ended June 30, 2019 of $50.8 million. Distributable cash flow from continuing operations for the six months ended June 30, 2020 was $30.8 million compared to the six months ended June 30, 2019 of $12.7 million. The Partnership had no net income from discontinued operations for the six months ended June 30, 2020 compared to a loss of $179.5 million, or $4.52 per limited partner unit for the six months ended June 30, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the six months ended June 30, 2020 compared to $10.7 million for the six months ended June 30, 2019. The Partnership had no distributable cash flow from discontinued operations for the six months ended June 30, 2020 compared to $9.8 million for the six months ended June 30, 2019. Revenues for the three months ended June 30, 2020 were $140.6 million compared to the three months ended June 30, 2019 of $187.3 million. Revenues for the six months ended June 30, 2020 were $339.5 million compared to the six months ended June 30, 2019 of $427.4 million. About Martin Midstream Martin Midstream Partners L.P. is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution and transportation services. Martin Midstream reported a net loss of $174.95 million for the year ended Dec. 31, 2019, compared to net income of $55.66 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $612.20 million in total assets, $641.70 million in total liabilities, and a total partners' capital of $29.50 million. * * * In March 2020, Moody's Investors Service downgraded Martin Midstream Partners L.P.'s Corporate Family Rating to Caa3 from B3. "MMLP's rating downgrade reflect increased debt refinancing risks and elevated risk of default, including from a distressed exchange," said Jonathan Teitel, Moody's Analyst. S&P Global Ratings lowered its issuer credit rating on Martin Midstream Partners L.P. (Martin) to 'CCC-' from 'B-' as the company faces large upcoming debt maturities of about $575 million in the next 12 months, as reported by the TCR on March 25, 2020. MCCLATCHY COMPANY: Egan-Jones Hikes Senior Unsecured Ratings to C ----------------------------------------------------------------- Egan-Jones Ratings Company, on July 20, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by The McClatchy Company to C from D. Headquartered in Sacramento, California, The McClatchy Company publishes daily and non-daily newspapers located in western coastal states, North and South Carolina, and Minnesota. MUJI U.S.A.: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Muji USA Limited. About Muji U.S.A. Limited Muji U.S.A. Limited is a retailer of a wide variety of products, including household goods, apparel and food. It was originally founded in Japan in 1980. Visit https://www.muji.com for more information. Muji U.S.A. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-11805) on July 10, 2020. At the time of the filing, Debtor disclosed assets of between $50 million and $100 million and liabilities of the same range. Judge Mary F. Walrath oversees the case. Debtor has tapped Greenberg Traurig LLP as its legal counsel, Mackinac Partners LLC as financial advisor, B. Riley Real Estate LLC as real property lease consultant, and Donlin, Recano & Company Inc. as claims and noticing agent. NORTHLAND CORPORATION: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Northland Corporation DBA Viking Hardwoods DBA Northland Hardwood Distributors DBA Northland Equipment DBA Northland Real Estate FDBA Abney Premium Hardwoods FDBA Eagle Talon Transport FDBA Northland Trading 2600 Hwy E 146 La Grange, KY 40031 Business Description: Northland Corporation -- http://northlandcorp.com-- is in the primary business of drying, sorting, and grading hardwood lumber. Chapter 11 Petition Date: July 27, 2020 Court: United States Bankruptcy Court Western District of Kentucky Case No.: 20-31934 Debtor's Counsel: Charity S. Bird, Esq. KAPLAN JOHNSON ABATE & BIRD LLP 710 West Main Street Fourth Floor Louisville, KY 40202 Tel: (502) 540-8285 Email: cbird@kaplanjohnsonlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Orn E. Gudmundsson, Jr., CEO. 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/hEEETc NSHE CA BULLS: Creditors to Be Paid in Full in 180 Days in Plan --------------------------------------------------------------- NSHE CA Bulls, LLC, submitted a modified Disclosure Statement describing its Plan in June 2020. The California Franchise Tax Board filed a Proof of Claim in the amount of $3,229, of which $2,602 has been designated as a Priority Tax Claim. The Plan provides that an Allowed Priority Tax Claim of the Franchise Tax Board shall be paid an amount equal to the allowed amount of its Priority Tax Claim in a single installment on or before the later of: (i) 180 days from the Effective Date, or (ii) 30 days after the Claim becomes an Allowed Priority Claim. The amendments to the Disclosure Statement provide that Wells Fargo Bank, N.A., a secured claimant in Class 1, filed a Proof of Claim in the amount of $5,154,021; and Strategic Emerging Economics, Inc., a secured claimant in Class 2, filed a proof of claim in the amount of $3,636,353. Class 1 will either (1) retain its full lien on the Debtor's property and cure any default, reinstating the debt or paying the full amount within 180 days from the Effective Date, or (2) retain its full lien in the Debtor's real property, and pay the allowed claim in full, with interest at the non-default rate on or before 180 days from the Effective Date. The holder of an allowed Class 2 claim will retain its full lien in the Debtor's Real Property, and pay the allowed claim in full, together with fixed simple interest on principal accruing from and after the Effective Date at the Prime Rate of interest as reported by the Wall Street Journal plus 5% per annum, on or before the later of: (i) 180 days from the Effective Date, or (ii) 30 days after such claim becomes an allowed claim. Like its prior iteration, the Disclosure Statement says that holders of Class 3 unsecured claims totaling $28,693 will each receive the full amount of its allowed claim, in cash, together with simple interest on principal accruing from and after the Effective Date at the rate of 5 percent per annum, on or before the later of (i) 180 days from the Effective Date, or (ii) 30 days after the Claimbecomes an Allowed Claim. A full-text copy of the Disclosure Statement dated June 15, 2020, is available at https://tinyurl.com/y9mjmb3a from PacerMonitor.com at no charge. Counsel for Debtor-in-Possession: Kit James Gardner (161736) LAW OFFICES OF KIT J. GARDNER 501 West Broadway, Suite 800 San Diego, CA 92101 Telephone: (619) 525-9900 Facsimile: (619) 374-2241 About NSHE CA Bulls NSHE CA Bulls, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). NSHE CA Bulls sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 19-07519) on Dec. 17, 2019. At the time of the filing, Debtor had estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. Judge Laura S. Taylor oversees the case. The Law Offices of Kit J. Gardner is Debtor's legal counsel. On March 16, 2020, the Debtor filed its Chapter 11 plan, which proposes to pay unsecured creditors in full. NSHE CA BULLS: Status Report of Disclosure Statement ---------------------------------------------------- NSHE CA Bulls, LLC, is prepared to move forward with submitting its Plan of Reorganization and Disclosure Statement to creditors and parties in interest for voting, with the following revisions pointed out by the Court at the last hearing: 1. The name of Strategic's appraiser—Dore Group—has been added at page 5 of the Disclosure Statement. 2. Because the Claims Bar Date of May 25, 2020 has now passed, the discussion in the Disclosure Statement at page 10 regarding the possibility that claims could timely be filed after approval of the Disclosure Statement is moot, and has therefore been deleted from the Disclosure Statement. 3. Because secured creditors Wells Fargo Bank, N.A. and Strategic Emerging Economics, Inc. both filed claims, the Plan and Disclosure Statement regarding Classes 1 and 2, respectively, have been revised to reflect the amounts set forth in the Proofs of Claims rather than the Debtor’s estimates of the claims (the Debtor's combined estimates were more conservative, so the Debtor has not changed its liquidation analysis). 4. In addition to the foregoing, because the Franchise Tax Board ("FTB") filed a Proof of Claim in the total amount of $3,229.04, a paragraph has been added to the section of the Disclosure Statement regarding Priority Tax Claims in order to address the FTB’s claim. A full-text copy of the Disclosure Statement dated June 15, 2020, is available at https://tinyurl.com/y8b7tsol from PacerMonitor.com at no charge. General Bankruptcy Counsel for debtor NSHE CA Bulls, LLC: Kit James Gardner LAW OFFICES OF KIT J. GARDNER 501 West Broadway, Suite 800 San Diego, CA 92101 Telephone: (619) 525-9900 Facsimile: (619) 374-2241 About NSHE CA Bulls NSHE CA Bulls, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). NSHE CA Bulls sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 19-07519) on Dec. 17, 2019. At the time of the filing, the Debtor had estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. Judge Laura S. Taylor oversees the case. The Law Offices of Kit J. Gardner is the Debtor's legal counsel. On March 16, 2020, the Debtor filed its Chapter 11 plan, which proposes to pay unsecured creditors in full. PORCIER-MILLER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Porcier-Miller LLC 1881 North Nash St #505 Arlington, VA 22209 Chapter 11 Petition Date: July 28, 2020 Court: United States Bankruptcy Court Eastern District of Virginia Case No.: 20-11728 Debtor's Counsel: Christopher S. Moffitt, Esq. LAW OFFICES OF CHRISTOPHER S. MOFFITT 218 North Lee Street, 3rd Floor Alexandria, VA 22314 Tel: 703-683-0075 E-mail: moffittlawoffices@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Brian Miller, member-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/eHzXoR PRINCETON AVENUE: Creditors Says Plan Can't Be Confirmed -------------------------------------------------------- Arlene Pero and Jill Swersky, or collectively with Arlene, submitted an objection to the adequacy of the Third Modified Disclosure Statement proposed by debtor Princeton Avenue Group, Inc. Creditors point out that the 3rd Amended Disclosure Statement fails to provide adequate information under the Bankruptcy Code. According to Creditors, an adequate disclosure statement must provide some degree of corroborating factual information to encourage intelligent and "enlightened" voting. Creditors assert that the Amended Plan is incapable of confirmation. Creditors complain that the Debtor provides no information as to the amount of customers that may be served outdoors under the conditions provided by the State, nor how the Debtor projects receiving nearly 50 percent of its usual monthly rental income under these circumstances. Attorneys for Arlene Pero and Jill Swersky: Edmond M. George, Esquire Alicia M. Sandoval, Esquire Obermayer Rebmann Maxwell & Hippel LLP 1120 Route 73, Suite 420 Mt. Laurel, NJ 08054 Tel: (856) 795-3300 E-mail: edmond.george@obermayer.com alicia.sandoval@obermayer.com About Princeton Avenue Group Princeton Avenue Group, Inc., is the fee simple owner of a property located at 1301 Kings Highway, Swedesboro having an appraised value of $710,000. Princeton Avenue Group sought Chapter 11 protection (Bankr. D.N.J. Case No. 19-19841) on May 14, 2019. The Debtor disclosed $722,600 in assets and $2,020,505 in liabilities as of the bankruptcy filing. The Hon. Jerrold N. Poslusny Jr. is the case judge. MCDOWELL LAW, PC, led by Ellen M. McDowell, is the Debtor's counsel. PYXUS INTERNATIONAL: Unsecured Claims are Unimpaired ---------------------------------------------------- Pyxus International, Inc., et al., submitted a Plan and a Disclosure Statement. Holders of at least 67% of the Second Lien Notes have elected the Second Lien Notes Stock Option. Holders of Second Lien Notes that do not elect the Second Lien Notes Stock Option will receive Cash in an amount equal to 2.00% of the principal amount of their Second Lien Notes. Class 3 First Lien Notes Claims totaling $275,000,000 are impaired but to recover 100%. Each Holder of an Allowed First Lien Notes Claim shall receive either: (i) (x) payment in full in Cash of all accrued and unpaid interest on such Holder's First Lien Notes at the non-default rate to, but excluding, the Effective Date, and (y) such Holder's pro rata share of the Exit Secured Notes. (ii) if Pyxus obtains and accepts a binding commitment for Replacement First Lien Financing on or prior to such day that is 60 days after the Petition and consummates the Replacement First Lien Financing on the Effective Date, its pro rata share of $280.8 million plus all accrued and unpaid interest due and payable on such Holder’s First Lien Notes at the non-default rate to, but excluding, the Effective Date, payable in Cash with the proceeds of the Replacement First Lien Financing. Class 4 Second Lien Notes Claims totaling $635,686,000 will recover 30.3%. Each Holder of an Allowed Second Lien Notes Claim shall receive, at such Holder’s election, either: (i) such Holder's Pro Rata Share of the Second Lien Notes Common Stock Pool; or (ii) Cash equal to 2.00% of the principal amount of all Second Lien Notes beneficially owned by such Holder as of the date of distribution to Holders of Allowed Second Lien Notes Claims. Class 6 General Unsecured Claims are totaling $21,700,000 are unimpaired. Each Holder of an Allowed General Unsecured Claim shall be reinstated and paid in the ordinary course of business in accordance with the terms and conditions of the particular transaction or agreement giving rise to such Allowed General Unsecured Claim. Class 10 Existing Pyxus Interests are impaired. Holders of Existing Pyxus Interests (and any related Claims described in section 510(b) of the Bankruptcy Code in respect of such Existing Pyxus Interests), shall not receive or retain any other property or interests under the Plan. The Debtors shall fund distributions under the Plan, as applicable, with: (1) the issuance of New Common Stock; (2) the Exit ABL Facility; (3) the Exit Term Facility; (4) the Exit Secured Notes, or, if applicable, the Replacement First Lien Financing; and (5) the Debtors’ Cash on hand. Ballots or master ballots must be actually received by the Solicitation Agent before 5:00 p.m. prevailing Eastern Time, on July 20, 2020. A full-text copy of the Disclosure Statement dated June 15, 2020, is available at https://tinyurl.com/ycs85va2 from PacerMonitor.com at no charge. Proposed Counsel to the Debtors: Sandeep Qusba Michael H. Torkin Kathrine A. McLendon Nicholas E. Baker SIMPSON THACHER & BARTLETT LLP 425 Lexington Avenue New York, New York 10017 Telephone: (212) 455-2000 Facsimile: (212) 455-2502 E-mail: squsba@stblaw.com michael.torkin@stblaw.com kmclendon@stblaw.com nbaker@stblaw.com - and - Pauline K. Morgan Kara Hammond Coyle Ashley E. Jacobs Tara C. Pakrouh YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 E-mail: pmorgan@ycst.com kcoyle@ycst.com ajacobs@ycst.com tpakrouh@ycst.com About Pyxus International Pyxus International Inc. -- http://www.pyxus.com/-- is a global agricultural company with 145 years of experience delivering value-added products and services to businesses, customers and consumers. Pyxus reported a net loss of $71.17 million for the year ended March 31, 2019, compared to net income of $51.91 million for the year ended March 31, 2018. As of March 31, 2019, Pyxus had $1.86 billion in total assets, $1.67 billion in total liabilities, and $192.02 million in total stockholders' equity. On June 15, 2020, Pyxus and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11570). Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Simpson Thacher & Bartlett, LLP as general bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as Delaware bankruptcy counsel; and Lazard Freres & Co. LLC and RPA Advisors, LLC as restructuring advisors. Prime Clerk, LLC is the claims and noticing agent and administrative advisor. R.E.X. INC: Case Summary & 7 Unsecured Creditors ------------------------------------------------ Debtor: R.E.X., Inc. 3425 U.S. Rt. 60, E. Barboursville, WV 25504 Chapter 11 Petition Date: July 27, 2020 Court: United States Bankruptcy Court Southern District of West Virginia Judge: Hon. Frank W. Volk Debtor's Counsel: Joseph W. Caldwell, Esq. Matthew M. Johnson, Esq. CALDWELL & RIFFEE 3818 MacCorkle Ave. S.E. Suite 101 Post Office Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 E-mail: joecaldwell@frontier.com chuckriffee@frontier.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Rex Donahue, president. A copy of the petition containing, among other items, a list of the Debtor's seven unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/zvuS4o REVLON CONSUMER: Commences Exchange Offer for 5.75% Senior Notes ---------------------------------------------------------------- Revlon Consumer Products Corporation, the direct wholly-owned operating subsidiary of Revlon, Inc., commenced an offer to exchange any and all of its outstanding 5.75% Senior Notes due 2021 for a combination of 5.75% Senior Notes due Feb. 15, 2024 and an Early Tender/Consent Fee, payable in cash, upon the terms and conditions set forth in the confidential Offering Memorandum and Consent Solicitation Statement dated July 27, 2020. The New Notes are senior unsecured notes with terms substantially the same as those of the Existing Notes, with certain adjustments specified in the Offering Memorandum. Concurrently with the Exchange Offer, the Company is soliciting consents to eliminate substantially all of the restrictive covenants and certain events of default with respect to the Existing Notes. The Exchange Offer will expire at 11:59 p.m. on Aug. 21, 2020. For each $1,000.00 principal amount of Existing Notes tendered into the Exchange Offer and Consent Solicitation prior to the early tender deadline of 5:00 p.m. on Aug. 7, 2020, holders of Existing Notes will receive $750.00 principal amount of New Notes and $50.00 of cash as an early tender/consent fee. Holders who tender their Existing Notes after the early tender deadline will receive only $750.00 principal amount of New Notes for each $1,000.00 principal amount of Existing Notes tendered. The Exchange Offer and Consent Solicitation are subject to the following conditions precedent: (i) the valid tender without valid withdrawal of not less than 95% of the aggregate outstanding principal amount of Existing Notes (and the provision of the related Consents for such tendered Existing Notes); (ii) the receipt of all necessary consents from the lenders under the Company's term and revolving credit agreements required in order to consummate the Exchange Offer and Consent Solicitation; (iii) the receipt of requisite consents in the Consent Solicitation; and (iv) various other customary conditions precedent. The conditions precedent are for the sole benefit of the Company and may be amended or waived, in whole or in part, at any time, in the sole and absolute discretion of the Company, subject to applicable law. Preliminary Unaudited Results For the three months ended June 30, 2020, on a preliminary unaudited basis, Revlon, Inc. had: * Net sales of $347.6 million versus $570.2 million in the prior-year period. Revlon, Inc. estimates that COVID-19 contributed approximately $214 million to the $222.6 million total net sales decline versus the prior-year period. Excluding the $214 million negative impact from the COVID-19 pandemic and $12 million of negative impact from foreign exchange, Q2 2020 net sales would have been essentially flat compared to Q2 2019; * Operating loss of between $39.0 million and $89.0 million (with the variance being due to potential impairment charges estimated to range from $0 and $50.0 million, which impairment assessment is ongoing), versus a $9.4 million operating loss in the prior-year period, driven in part by the COVID-19 impacts described above; and * Adjusted EBITDA of $45.4 million versus $47.0 million in the prior-year period. At June 30, 2020, Revlon, Inc. had an estimated liquidity position of approximately $415.7 million, consisting of: (i) approximately $338.5 million of unrestricted cash and cash equivalents (with approximately $62.1 million held outside the U.S.); (ii) approximately $50.7 million in available borrowing capacity under the 2016 U.S. ABL Facility, which had approximately $249.5 million drawn at such date; (iii) approximately $30 million in available borrowing capacity under its 2019 Senior Line of Credit Facility between Products Corporation and MacAndrews & Forbes Group, LLC, which had no borrowings at such date; and less (iv) approximately $3.5 million of outstanding checks. Under the 2016 U.S. ABL Facility, as the Company’s consolidated fixed charge coverage ratio was expected to be greater than 1.0 to 1.0 as of June 30, 2020, all of the approximately $50.7 million of remaining availability under the 2016 U.S. ABL Facility was available as of such date. Revlon, Inc. estimates that its total liquidity was approximately $396.4 million as of July 17, 2020, consisting of: (i) approximately $322.0 million of unrestricted cash and cash equivalents (with approximately $54.4 million held outside the U.S.); (ii) approximately $50.7 million in available borrowing capacity under the 2016 U.S. ABL Facility, which had approximately $255.8 million drawn at such date; (iii) approximately $30 million in available borrowing capacity under the 2019 Senior Line of Credit Facility between Products Corporation and MacAndrews & Forbes Group, LLC, which had no borrowings at such date; and less (iv) approximately $6.3 million of outstanding checks. Under the 2016 U.S. ABL Facility, as the Company's consolidated fixed charge coverage ratio was expected to be greater than 1.0 to 1.0 as of June 30, 2020, all of the approximately $50.7 million of remaining availability under the 2016 ABL Facility was available as of July 17, 2020. The Company refers to the Asset-Based Revolving Credit Agreement, dated as of Sept. 7, 2016, by and among the Company, Revlon, Inc., certain local borrowing subsidiaries from time to time party thereto, certain lenders and issuing lenders party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing lender and swingline lender as the "2016 U.S. ABL Facility". Revlon Inc., after giving effect to the transactions contemplated by this Offering Memorandum, expects to have sufficient cash to continue its and the Company's operations for at least the next twelve months. COVID-19 Impact on Revlon, Inc.'s Business (Preliminary and Unaudited) While Revlon, Inc. continues to execute its business strategy, the COVID-19 pandemic has adversely impacted net sales in all major commercial regions around the globe that are important to Revlon, Inc.'s business. COVID-19's adverse impact on the global economy has contributed to significant and extended quarantines, stay-at-home orders and other social distancing measures; closures and bankruptcies of retailers, beauty salons, spas, offices and manufacturing facilities; increased levels of unemployment; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import and export restrictions. These adverse economic conditions have resulted in the general slowdown of the global economy, in turn contributing to a significant decline in net sales within each of Revlon, Inc.'s reporting segments and regions. COVID-19 contributed an estimated $214 million (or $217 million XFX) to Revlon, Inc.'s $222.6 million net sales decline, or a decline of 39%, in Q2 2020 versus Q2 2019 (or a decline of $215 million XFX or 38% XFX). These declines were partially offset by increased net sales of Revlon beauty tools, Revlon hair color products and Elizabeth Arden skincare and fragrances in certain markets, as well as continued strong growth in Revlon, Inc.'s e-commerce net sales. COVID-19 contributed an estimated $268 million ($272 million XFX) to Revlon, Inc.'s $323 million net sales decline, or a decline of 29%, during the six months ended June 30, 2020, compared to the prior year period (or a decline of $306 million XFX or 27% XFX). For Q2 2020, Revlon segment net sales declined $116 million ($113 million XFX) versus the prior year period, with COVID-19 contributing an estimated $115 million ($116 million XFX) to such decline. This net sales decline was partially offset by increased net sales of Revlon beauty tools and Revlon hair color products in North America. COVID-19 had a similar negative impact on Revlon, Inc.'s other reporting segments over such period, with COVID-19 contributing (i) an estimated $34 million ($35 million XFX) to a $37 million ($35 million XFX) decline in the Elizabeth Arden segment, (ii) an estimated $30 million ($31 million XFX) to a $30 million ($28 million XFX) decline in the Portfolio segment and (iii) an estimated $34 million ($35 million XFX) to a $39 million ($38 million XFX) decline in the Fragrances segment. Within Revlon, Inc.'s Portfolio Segment, during Q2 2020 both the Cutex and Creme of Nature brands experienced double digit net sales growth versus Q2 2019, driven by increased demand due to a shift in consumer buying preferences. On a regional basis, COVID-19 had a similar negative impact on Revlon, Inc.'s North America and International regions. Of a $110 million ($109 million XFX) decline in Revlon, Inc.'s net sales in its North America region during Q2 2020 compared to the three months ended June 30, 2019, COVID-19 contributed an estimated $104 million ($104 million XFX) to such decline. Similarly, of a $113 million ($105 million XFX) decline in Revlon, Inc.'s net sales in its International region over such period, COVID-19 contributed an estimated $110 million ($113 million XFX) to such decline. This net sales decline was partially offset by increased net sales of Elizabeth Arden skincare products, predominantly in China, as well as growth in Cutex and CND nail care products in various markets. In April 2020, Revlon, Inc. took several cost reduction measures designed to mitigate the adverse impact of COVID-19 on Revlon, Inc.'s net sales, including, without limitation: (i) reducing brand support, as a result of the abrupt decline in retail store traffic; (ii) continuing to monitor Revlon, Inc.'s sales and order flow and periodically scaling down operations and cancelling promotional programs; and (iii) closely managing cash flow and liquidity and prioritizing cash to minimize COVID-19's impact on Revlon, Inc.'s production capabilities. In April 2020, Revlon, Inc. also implemented various organizational interim measures designed to reduce costs in response to COVID-19, including, without limitation: (i) switching to a reduced work week in the U.S. and in Revlon, Inc's international locations and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of Revlon, Inc.'s U.S.-based office-based employees and 30% factory-based employees, as well as employees in a majority of Revlon, Inc.'s other locations; (iii) suspending Revlon, Inc.'s 2020 merit base salary increases, discretionary profit sharing contributions and matching contributions to Revlon, Inc.'s 401(k) plan; (iv) reducing Board and committee compensation by 50% and eliminating Board and committee meeting fees; and (v) suspending or terminating services and payments under consulting agreements with certain directors. With these measures, including the Revlon 2020 Restructuring Program, Revlon, Inc. achieved cost reductions of approximately $105.1 million during Q2 2020 that have substantially offset the impact of the decline in Revlon, Inc.'s net sales over such period. However, with the ongoing COVID-19 pandemic, these mitigation actions may not prove to be effective in insulating the Company from any further damaging economic impact of this pandemic. About Revlon Revlon, Inc. (together with its subsidiaries) conducts its business exclusively through its direct wholly-owned operating subsidiary, Revlon Consumer Products Corporation, and its subsidiaries. The Company manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; anti-perspirant deodorants; and other beauty care products. Revlon Inc. and its subsidiaries reported a net loss of $157.7 million for the year ended Dec. 31, 2019, compared to a net loss of $294.2 million for the year ended Dec. 31, 2018. * * * As reported by the TCR on May 12, 2020, Moody's Investors Service affirmed Revlon's Corporate Family Rating at Caa3. The affirmation of the Caa3 CFR with a negative outlook reflects that the transaction will meaningfully increase the company's cash interest cost at a time when Revlon will continue to generate negative free cash flow. ROCKSTAR REMODELING: Gets Approval to Employ State Court Receiver ----------------------------------------------------------------- Rockstar Remodeling and Diamond Decks, LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Kathleen Hurren, Esq., the receiver appointed in a case involving the managing member of Rockstar Remodeling Trust. Ms. Hurren was named as receiver by Judge Mary Lou Alvarez in the state court action (Cause No. 2020CI-07942) filed against Donald Ferguson, managing member of Rockstar Remodeling Trust, at the 285th Judicial District Court of Bexar County, Texas. Debtor had intervened into the case prior to the conclusion of the hearing held on May 26. The attorney will be paid at the rate of $400 per hour for her services and will receive reimbursement for work-related expenses. Ms. Hurren disclosed in court filings that she is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Ms. Hurren holds office at: Kathleen A. Hurren, Esq. 1718 San Pedro Ave. San Antonion, TX 78218 Telephone: (210) 341-6974 Email: kathleen@hurrenlaw.com About Rockstar Remodeling and Diamond Decks Rockstar Remodeling and Diamond Decks, LLC, a San Antonio, Texas-based company that provides construction services, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50997) on May 27, 2020. The petition was signed by Donald Ferguson, managing member of Rockstar Remodeling Trust. At the time of the filing, Debtor was estimated to have assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Craig A. Gargotta oversees the case. Debtor is represented by James S. Wilkins, P.C. SABLE PERMIAN: Seeks Approval to Tap Latham & Watkins as Counsel ---------------------------------------------------------------- Sable Permian Resources, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Latham & Watkins LLP as their legal counsel. The firm will provide the following services: (a) advise Debtors with respect to their powers and duties in the continued management and operation of their business; (b) advise and consult on the conduct of Debtors' Chapter 11 cases; (c) attend meetings and negotiate with representatives of creditors, interest holders and other parties; (d) analyze proofs of claim filed against Debtors and potential objections to such claims; (e) analyze executory contracts and unexpired leases and the potential assumption, assignment or rejection of such contracts and leases; (f) take all necessary actions to protect and preserve Debtors' estates; (g) represent Debtors in connection with obtaining authority to continue using cash collateral and access postpetition financing; (h) prepare legal papers; (i) take necessary actions to negotiate, prepare and obtain approval of a disclosure statement and confirmation of a plan of reorganization or liquidation; (j) advise Debtors in connection with any potential sale of their assets and take necessary actions to guide Debtors through such sale; (k) appear before the bankruptcy court or any appellate courts and the U.S. Trustee for the Southern District of Texas; and (l) advise on corporate, litigation, environmental, finance, tax, employee benefits and other legal matters. The firm's current hourly rates for matters related to Debtors' bankruptcy cases are as follows: Partners $1,120 - $1,680 Counsel $1,085 - $1,560 Associates $590 - $1,105 Professional Staff $250 - $850 Paralegals $250 - $540 The hourly rates for the firm's attorneys with primary responsibility for providing the services are as follows: George A. Davis $1,560 Jeffrey E. Bjork $1,515 Caroline A. Reckler $1,365 Jeffrey Bjork, Esq., a partner at Latham & Watkins, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Bjork also made the following disclosures in response to the request for additional information set forth in Paragraph D.1 of the U.S. Trustee Guidelines: Question: Did Latham & Watkins agree to any variations from, or alternatives to, Latham & Watkins' standard or customary billing arrangements for the firm's engagement? Response: Latham & Watkins did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for comparable Chapter 11 reorganizations in its postpetition representation of Debtors in their bankruptcy cases. Question: Do the Latham & Watkins professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: The hourly rates for the Latham & Watkins professionals representing Debtors are consistent with the rates that the firm charges other Chapter 11 clients regardless of the geographic location of Debtors' cases. Question: If you represented Debtors 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 Latham & Watkins' billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Latham & Watkins' current hourly rates have been used since Jan. 1 of this year. During the prior calendar year, the firm used the following rates: $1,070 to $1,565 for partners; $1,040 to $1,455 for counsel; $565 to $1,085 for associates; $220 to $790 for professional staff; and $220 to $520 for paralegals. All material financial terms have remained unchanged since the pre-bankruptcy period. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Latham & Watkins, in conjunction with Debtors, developed an agreed-upon budget and staffing plan for the period June 25 to Sept. 30, 2020. The firm can be reached through: Jeffrey E. Bjork, Esq. Latham & Watkins 355 South Grand Avenue, Suite 100 Los Angeles, CA 90071-1560 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 Email: jeff.bjork@lw.com About Sable Permian Resources Sable Permian Resources, LLC and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-33193) on June 25, 2020. At the time of the filing, Sable Permian Resources disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge Marvin Isgur oversees the cases. Debtors have tapped Latham & Watkins, LLP and Hunton Andrews Kurth, LLP as legal counsel; Alvarez & Marsal North America, LLC as financial advisor; and Evercore Group, LLC as investment banker. The Office of the U.S. Trustee appointed a committee of unsecured creditors on July 17, 2020. SABLE PERMIAN: Seeks to Hire Hunton Andrews as Co-Counsel --------------------------------------------------------- Sable Permian Resources, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Hunton Andrews Kurth, LLP. Hunton Andrews will serve as co-counsel with Latham & Watkins, LLP, the other firm handling Debtors' Chapter 11 cases. The hourly rates charged by attorneys at Hunton Andrews are as follows: Timothy A. Davidson II $930 Joseph P. Rovira $845 Ashley L. Harper $650 Philip M. Guffy $645 Catherine A. Diktaban $500 Constance Andonian $395 Tina Canada $285 Hunton Andrews received the sum of $315,000 as advance payment retainer. Debtors paid the firm $449,840.90 in fees and $15,453.00 in expenses prior to their bankruptcy filing. The firm still holds $285,599 on account. Timothy Davidson II, Esq., a partner at Hunton Andrews, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Davidson also made the following disclosures in response to the request for additional information set forth in Paragraph D.1 of the U.S. Trustee Guidelines: Question: Did Hunton Andrews Kurth agree to any variations from, or alternatives to, its standard or customary billing arrangements for its engagement? Response: No. Question: Do the Hunton Andrews professionals included in the firm's engagement vary their rate based on the geographic location of Debtors' bankruptcy cases? Response: No. Question: If you represented Debtors in the 12 months pre-petition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If Hunton Andrews Kurth's billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Hunton Andrews' billing rates and material financial terms for its representation of Debtors have not changed post-petition. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Hunton Andrews has provided Debtors with a budget, which is reflected in the budget attached to the court order that approved their debtor-in-possession financing. Hunton Andrews can be reached through: Timothy A. Davidson II, Esq. Hunton Andrews Kurth, LLP 600 Travis Street, Suite 4200 Houston, TX 77002 Telephone: (713) 220-4200 Facsimile: (713) 220-4285 Email: taddavidson@HuntonAK.com About Sable Permian Resources Sable Permian Resources, LLC and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-33193) on June 25, 2020. At the time of the filing, Sable Permian Resources disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge Marvin Isgur oversees the cases. Debtors have tapped Latham & Watkins, LLP and Hunton Andrews Kurth, LLP as legal counsel; Alvarez & Marsal North America, LLC as financial advisor; and Evercore Group, LLC as investment banker. The Office of the U.S. Trustee appointed a committee of unsecured creditors on July 17, 2020. SEQUA CORP: Moody's Hikes CFR to Caa2 & PDR to Caa2-PD ------------------------------------------------------ Moody's Investors Service upgraded its ratings for Sequa Corporation, including the company's corporate family rating (CFR, to Caa2 from Caa3) and probability of default rating (to Caa2-PD from Caa3-PD). For Sequa Mezzanine Holdings L.L.C., Moody's assigned a Caa1 rating to the company's first lien senior secured credit facilities comprised of a revolving credit facility due 2023, a term loan due 2023, and a new first lien term loan due 2025. Moody's also assigned a Caa3 rating to the company's senior secured second lien term loan due 2024. Concurrently, Moody's downgraded ratings on the existing first lien revolver due 2021 and existing first lien term loan due 2021 to Caa3 from Caa2. Moody's also affirmed the Ca ratings on the existing second lien term loan due 2022. An "/LD" designation was appended to the Caa2-PD probability of default rating following the company's deemed limited default event that has transpired concurrent with the recent successful closing of its restructuring transaction. Moody's will remove the "/LD" designation from the company's PDR after three days. The ratings outlook is stable. The rating actions follow the company's recent extension of its existing capital structure across its first and second lien tranches, and incremental $256 million capital raise comprised of a $200 million first lien term loan and $56 million in preferred equity. Proceeds from the new capital will be used to repay borrowings under the revolver, repay a portion of first and second lien term loans, and to fund cash to the balance sheet and pay associated fees and expenses. Moody's believes the proposed transaction constitutes a distressed exchange, given the nature of the transaction which subordinates claims of non-extending lenders and affords sub-market rates for extending lenders, including a payment-in-kind option instead of cash for a component of interest expense. The preceding rating actions are predicated on the assumed successful completion of the transaction in substantially the same form as contemplated when the transaction was initially launched. RATINGS RATIONALE The upgrades recognize the moderately reduced financial risk on a go-forward basis that will come from Sequa's extended maturity profile, as well as the improved financial flexibility that will allow the company to better navigate earnings headwinds in the aftermath of the coronavirus pandemic. The upgrades also consider Sequa's improved liquidity profile, with full availability under its revolving credit facility, amended and less restrictive financial covenants, and increased cash on hand. The Caa2 corporate family rating continues to incorporate Sequa's weak financial metrics and the cyclical nature of its aerospace and metal casting markets that are expected to be vulnerable to disruption in a weakened macroeconomic environment through at least the balance of 2020. Moody's expects earnings headwinds from the coronavirus, a high interest burden, and on-going business investments to collectively weigh on cash generation such that positive free cash flow is unlikely to be achieved until 2022. Weak cash flows will coincide with the company's highly leverage balance sheet (Moody's adjusted debt-to-EBITDA of around 7x as of March 2020) and a noisy earnings profile, involving multiple add-backs to EBITDA. Moody's views Sequa's Chromalloy segment (60% of sales) as highly susceptible to coronavirus disruptions, with particular earnings pressures facing its high margin commercial aftermarket business. Somewhat countering this is the expectation that the company's Precoat business (40% of sales) will remain comparatively more stable and should continue to produce relatively heathy levels of earnings and cash flows. The ratings downgrade on the existing first lien revolver due 2021 and term loan due 2021 reflects the expected subordination of these claims relative to extending first lien lenders who will benefit from a first-out provision relative to non-extending lenders in the 2021 tranche. 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 Sequa 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 changing sentiment in these unprecedented operating conditions. The stable ratings outlook incorporates expectations that Sequa's precoat business will remain relatively stable over the next 12-18 months, and also considers the improved financial flexibility that is provided by the extended capital structure and increased availability under the revolver. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include stronger operational performance than is expected over the next 12 months, and if Sequa's earnings profile holds up better than expected during through the coronavirus disruptions. Factors that could lead to a downgrade include weakening liquidity, involving meaningful drawdowns under the revolver, a potential breach of financial covenants or a level of cash burn that is more pronounced that currently contemplated. Meaningful reductions in earnings and cash flow generation in the company's Precoat segment or a further weakening in commercial aerospace markets could also result in a ratings downgrade. The following summarizes its rating actions: Issuer: Sequa Corporation Corporate Family Rating, upgraded to Caa2 from Caa3 Probability of Default Rating, upgraded to Caa2-PD/LD from Caa3-PD Outlook: changed to Stable from Negative Issuer: Sequa Mezzanine Holdings L.L.C. New First lien senior secured bank credit facility due 2023, assigned Caa1 (LGD3) New First lien senior secured bank credit facility due 2025, assigned Caa1 (LGD3) New Second lien senior secured bank credit facility due 2024, assigned Caa3 (LGD5) Existing First lien senior secured bank credit facility due 2021, downgraded to Caa3 (LGD5) from Caa2 (LGD3) Existing Second lien senior secured bank credit facility due 2022, affirmed Ca (LGD5) Outlook: changed to Stable from Negative Sequa Corporation, headquartered in Palm Beach Gardens, Florida, is a diversified industrial company operating in two business segments: Aerospace, through Chromalloy Gas Turbine, and metal coating, through Precoat Metals. Sequa was purchased via a $2.8 billion LBO by affiliates of Carlyle Partners V, L.P. in December 2007. Revenues for the twelve months ended March 2020 were $1.5 billion. The principal methodology used in these ratings was Aerospace and Defense Methodology published in July 2020. SERES THERAPEUTICS: Widens Net Loss to $20.7M in Second Quarter --------------------------------------------------------------- Seres Therapeutics, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q, reporting a net loss of $20.71 million on $6.04 million of total revenue for the three months ended June 30, 2020, compared to a net loss of $10.76 million on $12.53 million of total revenue for the three months ended June 30, 2019. For the six months ended June 30, 2020, the Company reported a net loss of $40.59 million on $14.23 million of total revenue compared to a net loss of $35.09 million on $19.85 million of total revenue for the same period last year. As of June 30, 2020, the Company had $100.68 million in total assets, $166.25 million in total liabilities, and a total stockholders' deficit of $65.57 million. As of June 30, 2020, the Company had cash, cash equivalents and investments totaling $63.9 million and an accumulated deficit of $500.2 million. Seres Therapeutics said, "Based on our current plans and forecasted expenses, we believe that our cash, cash equivalents and investments as of June 30, 2020, and proceeds received under the 2020 Sales Agreement subsequent to June 30, 2020, will enable us to fund our operating expenses, debt service obligations and capital expenditure requirements into the second quarter of 2021, subject to compliance with the conditions and covenants of our Loan and Security Agreement with Hercules Capital, Inc. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. These factors raise substantial doubt about our ability to continue as a going concern." Impact of Novel Coronavirus The Company further stated, "We are monitoring the global outbreak and spread of the novel strain of coronavirus, or COVID-19, and have taken steps to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the COVID-19 pandemic. The spread of COVID-19 has caused us to modify our business practices, including implementing a work from home policy for all employees who are able to perform their duties remotely and restricting all nonessential travel, and we expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of our employees, and other business partners in light of COVID-19. Given the fluidity of the COVID-19 pandemic however, we do not yet know the full extent of the potential impact of COVID-19 on our business operations. We will continue to monitor the situation closely." A full-text copy of the Form 10-Q is available for free at: https://is.gd/0xQK4d About Seres Therapeutics Seres Therapeutics, Inc. (Nasdaq: MCRB) -- http://www.serestherapeutics.com/-- is a microbiome therapeutics platform company developing a novel class of biological drugs that are designed to treat disease by restoring the function of a dysbiotic microbiome, where the state of bacterial diversity and function is imbalanced. Seres' SER-287 program has obtained Fast Track and Orphan Drug designation from the U.S. Food and Drug Administration and is being evaluated in a Phase 2b study in patients with active mild-to-moderate ulcerative colitis. Seres' SER-109 program has obtained Breakthrough Therapy and Orphan Drug designations from the FDA and is in Phase 3 development for recurrent C. difficile infection. Seres is also developing SER-401 in a Phase 1b study in patients with metastatic melanoma. Seres Therapeutics reported a net loss of $70.28 million for the year ended Dec. 31, 2019, compared to a net loss of $98.94 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $110.62 million in total assets, $172.27 million in total liabilities, and a total stockholders' deficit of $61.65 million. PricewaterhouseCoopers LLP, in Boston, Massachusetts, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 2, 2020, citing that the Company has incurred losses and negative cash flows from operations since its inception that raise substantial doubt about its ability to continue as a going concern. SKILLSOFT CORP: Unsecured Claims Unimpaired in Plan --------------------------------------------------- Skillsoft Corporation and its debtor affiliates filed a Plan and a Disclosure Statement. The Plan contemplates the distribution of 100% of Newco Equity to the holders of First Lien Debt Claims and Second Lien Debt Claims (96% on account of Allowed First Lien Debt Claims and 4% on account of Allowed Second Lien Debt Claims, each subject to dilution on account of the Warrants and the Incentive Plans), the distribution of $410 million of New Second Out Term Loans to the holders of First Lien Debt Claims, and the distribution of Warrants to the holders of Second Lien Debt Claims. The Debtors' general unsecured creditors, including the Company's trade vendors, customers, and employees, are unimpaired by the Plan and will receive payment of their claims in full in the ordinary course of business. Class 3 First Lien Debt Claims, impaired, will recover 71%. On the Effective Date, in full and final satisfaction, release, and discharge of the Allowed First Lien Debt Claims, the holders of Allowed First Lien Debt Claims (or the permitted assigns or designees of such holders) shall receive their pro rata share of: (i) New Second Out Term Loans; and (ii) 96% of Newco Equity (subject to dilution by the Warrants and the Incentive Plans. Class 4 Second Lien Debt Claims will recover 3%. On the Effective Date, in full and final satisfaction, release, and discharge of the Allowed Second Lien Debt Claims, the holders of Allowed Second Lien Debt Claims will receive their pro rata share of: (i) 4% of Newco Equity (subject to dilution by the Warrants and the Incentive Plans); (ii) the Tranche A Warrants; and (iii) the Tranche B Warrants. Class 5 General Unsecured Claims are unimpaired and will recover 100%. The legal, equitable, and contractual rights of the holders of Allowed General Unsecured Claims are unaltered by the Plan. Except to the extent that a holder of an Allowed General Unsecured Claim agrees to different treatment, on and after the Effective Date, or as soon as reasonably practicable thereafter, the Debtors shall continue to pay or dispute each General Unsecured Claim in the ordinary course of business as if the Chapter 11 Cases had never been commenced. Class 8 Existing Parent Equity Interests are impaired. On the Effective Date, the entire share capital of Parent shall be transferred to Newco Borrower in accordance with the Restructuring Transaction Steps. Holders of Existing Parent Equity Interests shall receive no distribution under the Plan. Plan Distributions of Cash shall be funded from the Debtors' Cash on hand as of the applicable date of such Plan Distribution and from proceeds of the New First Out Term Loan Facility. A full-text copy of the Disclosure Statement dated June 15, 2020, is available at https://tinyurl.com/ycnmtzrt from PacerMonitor.com at no charge. Proposed Counsel for the Debtors: Gary T. Holtzer Robert J. Lemons Katherine Theresa Lewis WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 - and - Mark D. Collins Amanda R. Steele Christopher M. De Lillo RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 910 N. King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701 About Skillsoft Corporation Skillsoft -- http://www.skillsoft.com/-- delivers online learning, training, and talent solutions to help organizations unleash their edge. Leveraging immersive, engaging content, Skillsoft enables organizations to unlock the potential in their best assets -- their people -- and build teams with the skills they need for success. Empowering millions of learners and counting, Skillsoft democratizes learning through an intelligent learning experience and a customized, learner-centric approach to skills development with resources for Leadership Development, Business Skills, Technology & Development, Digital Transformation, and Compliance. SumTotal provides a unified, comprehensive Learning and Talent Development suite that delivers measurable impact across the entire employee lifecycle. With SumTotal, organizations can build a culture of learning that is critical to growth, success, and business sustainability. SumTotal's award-winning technology provides talent acquisition, onboarding, learning management, and talent management solutions across some of the most innovative, complex and highly regulated industries, including technology, airlines, financial services, healthcare, manufacturing, and pharmaceuticals. Skillsoft and SumTotal are partners to thousands of leading global organizations, including many Fortune 500 companies. The company features three award-winning systems that support learning, performance and success: Skillsoft learning content, the Percipio intelligent learning experience platform, and the SumTotal suite for Talent Development, which offers measurable impact across the entire employee lifecycle. On June 14, 2020, Skillsoft Corp. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11532). The Debtors tapped Weil Gotshal & Manges LLP, as counsel; Richards Layton & Finger, as co-counsel; Stikeman Elliott LLP, as special Canadian counsel; William Fry, as Irish law advisor; FTI Consulting, Inc., as financial advisor; Houlihan Lokey Capital, Inc., as investment banker; AlixPartners, LLP, as financial advisor; and Kurtzman Carson Consultants LLC, as administrative advisor. SL GREEN: Moody's Alters Outlook on (P)Ba1 Ratings to Negative -------------------------------------------------------------- Moody's Investors Service has affirmed SL Green Operating Partnership, L.P.'s Baa3 senior unsecured debt rating, (P)Baa3 senior unsecured debt shelf rating, and (P)Ba1 subordinate shelf and junior subordinate shelf ratings. In the same action, all ratings of its parent REIT, SL Green Realty Corp. have also been affirmed. The rating outlook has been revised to negative from stable. The affirmations reflect the REIT's solid operating track record in the New York office real estate market, good liquidity position relative to capital needs over the next 1-2 years and sizeable but mostly preleased development pipeline. A weakening trend in operating metrics due to the pandemic and new supply, elevated leverage metrics that would likely deteriorate meaningfully as SL Green invests in its projects under construction over the next few quarters, a weak fixed charge coverage and an aggressive share buyback policy are key reasons for the change in outlook. The following ratings have been affirmed: Affirmations: Issuer: SL Green Operating Partnership, L.P. Junior Subordinated Shelf, Affirmed (P)Ba1 Subordinated Shelf, Affirmed (P)Ba1 Senior Unsecured Shelf, Affirmed (P)Baa3 Senior Unsecured Regular Bond/Debenture, Affirmed Baa3 Issuer: SL Green Realty Corp. Junior Subordinated Shelf, Affirmed (P)Ba1 Subordinated Shelf, Affirmed (P)Ba1 Preferred Shelf, Affirmed (P)Ba1 Preferred Shelf Non-cumulative, Affirmed (P)Ba1 Senior Unsecured Shelf, Affirmed (P)Baa3 Pref. Stock Preferred Stock, Affirmed Ba1 Senior Unsecured Regular Bond/Debenture, Affirmed Baa3 Outlook Actions: Issuer: SL Green Operating Partnership, L.P. Outlook, Changed to Negative from Stable Issuer: SL Green Realty Corp. Outlook, Changed to Negative from Stable RATINGS RATIONALE SL Green's Baa3 senior unsecured rating reflects its leadership position in the large and high barrier to entry New York office real estate market, laddered lease maturity schedule and good liquidity position while also considering its elevated leverage metrics, modest fixed charge coverage and consequential stock buyback program. A significant decline in office space usage in New York and drop-off in prospective tour activity, both due to the pandemic, will affect office leasing volume and net effective rents such that office REITs' same-store NOI trends would likely be under pressure in the next few quarters. Lack of geographic diversification, a materially preleased development pipeline and a modest yet valuable unencumbered asset base are some other key credit considerations incorporated in SL Green's rating. The revision of the rating outlook to negative reflects the increased likelihood of meaningful deterioration in some credit metrics such as the net debt + preferred to EBITDA, to about 12x, and fixed charge coverage, to below 2x, when the REIT's prorata share of unconsolidated joint ventures are included. Sustained weakness in leasing volume and pricing that would affect occupancy in the same-store pool and remaining lease-up of the construction projects are other credit concerns. At the end of Q2 2020, SL Green's same-store Manhattan office portfolio was 95.2% occupied while occupancy in the same-store retail and residential pools were 95.4% and 90% respectively. The REIT's 28-asset Manhattan office portfolio generates approximately 85% of operating property NOI. The increase in supply in the New York office market is creating leasing challenges for SL Green and its office landlord peers. The post-pandemic decline in physical occupancy in the buildings and tour activity is further straining the operating environment. The REIT's manageable lease maturity schedule, 12% through YE 2021, and diversified tenant base, well over 800 tenants, continue to be important credit strengths in the current environment. The modest upside from limited mobility during the pandemic is that many tenants are reluctant to make sweeping changes to their office space strategies and therefore short-term lease renewals, 1-2 years generally and upto 5 years in some instances, have become more common. Higher tenant retention will have a favorable impact on the office REITs' releasing capex. Trends such as higher proportion of remote working, distributed office locations and migration to economical office markets could reduce demand in high cost markets like New York, however, many are yet to be proven and are not expected to influence leasing decisions in the next 2-4 quarters. SL Green has a sizeable development pipeline with a capital outlay of $4.3 billion for its three new properties, however preleasing in its two large projects mitigates earnings risk. The One Vanderbilt project, a 1.7 million square feet development in the Grand Central submarket, accounts for over 76% of the budget and was 67% preleased at the end of Q2 2020. The $650 million 410 10th Avenue property was 98.6% preleased and over 70% funded. The remaining equity contribution for all three projects is modest at $101 million of which the REIT's share is $79 million. SL Green has announced a large-scale redevelopment/expansion of its One Madison Ave property with an aggregate budget of $2.3 billion. The joint venture partners for the project who own a combined 49.5% interest will contribute almost $500 million of equity capital and SL Green's contribution would likely be much lower. At the end of Q2 2020, SL Green's net debt + preferred to EBITDA is estimated to be about 10.4x and fixed charge coverage was 2.2x. The REIT's secured leverage, 31%, and effective leverage (debt + preferred as a % of gross assets), 55%, are also moderately elevated for the rating level, in part due to higher leverage, especially secured leverage, in the unconsolidated joint ventures. The aggregate leverage ratios are 15% stronger if GAAP financials are used and secured leverage is 15%. The REIT's track record in the New York office market, diversified capital structure that includes a meaningful proportion of non-recourse debt and preferred stock and a substantially preleased development pipeline supports higher leverage tolerance than similarly rated peers, however consistently high leverage due to an aggressive capital strategy or ambitious plans with significant execution risk will create rating pressure. SL Green's sound liquidity position is supported by over 36% availability on its $1.5 billion unsecured revolving credit facility at the end of Q2 2020, approximately $1.1 billion of cash balance, a valuable unencumbered asset base and manageable unfunded near-term capital needs. With less than $600 million of debt maturities through YE 2021, considering available extension options, and available committed capital sources for the development projects, the REIT's liquidity profile is good. Year-to date, the REIT has repurchased 6.2 million shares for approximately $400 million and has approximately 14% remaining capacity on the $3.0 billion authorization. Using asset sale proceeds to buy back shares limits pressure on liquidity, nevertheless it weakens the leverage metrics. The REIT's share buyback strategy in the face of the challenging operating environment and weakening leverage metrics would influence its assessment of their financial policy and commitment to an investment grade credit profile. 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 SL Green of the deterioration in credit quality it has triggered, given its exposure to office real estate located in high density metro areas, 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 rating upgrade is unlikely and would likely require net debt + preferred to EBITDA below 9.0x including pro-rata share of joint ventures, fixed charge coverage above 2.5x, both on a sustained basis. Maintaining strong operating performance and development exposure below 15% of gross assets are some other factors that could lead to an upgrade. SL Green's rating could be downgraded if net debt + preferred to EBITDA remains above 10.5x after the stabilization of the One Vanderbilt and 410 10th Avenue projects. Fixed charge coverage remaining below 2.0x or further deterioration in operating performance would also pressure the ratings. SL Green Realty Corp. (NYSE: SLG) is a real estate investment trust that is focused primarily on acquiring and operating commercial office properties in the New York metropolitan area, mainly the Manhattan submarket. As of June 30, 2020, SL Green held interests in 96 buildings totaling 41 million square feet via ownership interests and debt and preferred equity. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in September 2018. SONOCINE INC: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: Sonocine, Inc. 8850 Terabyte Court, Suite 1 Reno, NV 89521 Type of Business: Sonocine, Inc. -- http://www.sonocine.com-- is a provider of automated whole breast ultrasound services. Involuntary Chapter 11 Petition Date: July 28, 2020 Court: United States Bankruptcy Court District of Delaware Case Number: 20-11877 Judge: Hon. Brendan Linehan Shannon Name of Petitioner: Global Link Medical Group, Inc. Nature of Claim & Claim Amount: $1,520,000 (Business Debt) Petitioner's Counsel: K. Brian Matlock, Esq. YK LAW, LLP 801 So. Figueroa St., Suite 2125 Los Angeles, CA 90017 Tel: 213-837-2600 Email: bmatlock@yklaw.us - and - Christopher Ward, Esq. POLSINELLI 222 Delaware Ave., Suite 1101 Wilmington, DE 19801 Tel: 302-252-0922 Email: cward@polsinelli.com A full-text copy of the petition is available for free at: https://is.gd/xtVfgN SUMMIT MIDSTREAM: Reports Preliminary Results of Exchange Offer --------------------------------------------------------------- Summit Midstream Partners, LP announced preliminary results regarding its offer to exchange any and all of its 9.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units for newly issued common units representing limited partner interests in the Partnership, which expired at 5:00 p.m., New York City time on July 28, 2020. Based on preliminary information provided by American Stock Transfer & Trust Company, LLC, the depositary of the Exchange Offer, as of the Expiration Date, 62,816 Series A Preferred Units had been tendered and not validly withdrawn. The number of Series A Preferred Units properly tendered and not validly withdrawn is preliminary and is subject to verification by the Depositary. The Partnership expects to deliver the Common Units to be issued in exchange for the Series A Preferred Units on July 31, 2020. About Summit Midstream Partners Summit Midstream Partners is a value-driven limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in unconventional resource basins, primarily shale formations, in the continental United States. SMLP provides natural gas, crude oil and produced water gathering services pursuant to primarily long-term and fee-based gathering and processing agreements with customers and counterparties in six unconventional resource basins: (i) the Appalachian Basin, which includes the Utica and Marcellus shale formations in Ohio and West Virginia; (ii) the Williston Basin, which includes the Bakken and Three Forks shale formations in North Dakota; (iii) the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in Colorado and Wyoming; (iv) the Permian Basin, which includes the Bone Spring and Wolfcamp formations in New Mexico; (v) the Fort Worth Basin, which includes the Barnett Shale formation in Texas; and (vi) the Piceance Basin, which includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity investment in Double E Pipeline, LLC, which is developing natural gas transmission infrastructure that will provide transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas. SMLP also has an equity investment in Ohio Gathering, which operates extensive natural gas gathering and condensate stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in Houston, Texas. SMLP reported a net loss of $369.83 million for the year ended Dec. 31, 2019, compared to net income of $42.35 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $2.62 billion in total assets, $1.80 billion in total liabilities, $62.34 million in mezzanine capital, and $757.92 million in total partners' capital. * * * As reported by the TCR on June 30, 2020, S&P Global Ratings lowered the issuer credit rating on Summit Midstream Partners LP (SMLP) to 'SD' (selective default) from 'CCC'. "SMP Holdings remains, in our view, an unrestricted nonstrategic subsidiary of the partnership. The term debt has no guarantees and is non-course to SMLP. As a result, we are affirming the 'CCC' issuer credit rating on SMP Holdings and putting it on CreditWatch with negative implications to highlight the possibility of a near-term term loan restructuring," S&P said. SUNCREST STONE: Files Modification to 3rd Amended Plan ------------------------------------------------------ Suncrest Stone Products, LLC and 341 Stone Properties, LLC, file this First Modification to the Third Amended Joint Plan of Reorganization. Newtek Small Business Finance, LLC, and CDS Business Services, Inc., who have consented to this First Modification as evidenced by the signatures of their respective counsel, Debtors state that this First Modification does not adversely change the treatment of the claim of any creditor or the interest of any equity security or interest holder of the Debtors. The proposed treatment of the Allowed Secured Claim of Newtek Small Business Finance, LLC Related to the Real Estate Loan (the "Class 2(a) Secured Claim") will be amended as follows, and all provisions of the Plan and Disclosure Statement shall be read to conform to this amendment: (a) Class 2(a) includes the Allowed Secured Claim of Newtek Small Business Finance, LLC under the Real Estate Loan (stipulated in the amount of $1,240,000.00 as of the Confirmation Date) (the “Allowed Class 2(a) Secured Claim”), but not taking into consideration senior tax liens against the Real Property, if any, which liens, if senior, shall reduce the Allowed Class 2(a) Allowed Secured Claim by the amount of such senior liens. The Allowed Class 2(a) Secured Claim shall be satisfied in full by the Reorganized Debtors through an agreed surrender and abandonment by the Reorganized Debtors to Newtek of the Real Property so that Newtek can conduct a non-judicial foreclosure or otherwise dispose of the Real Property, with the surrender and abandonment to occur within thirty (30) days after the Effective Date or by such other date as the Debtors and Newtek agree on in writing (the “Surrender Date”); provided, however, that, (i) on the Confirmation Date, the automatic stay and any other post-confirmation injunctions provided under the Plan or the Bankruptcy Code are lifted for the sole purpose of permitting Newtek (or its successor, assignee, or designee) to exercise all of its rights under Georgia law to foreclose its security interest in the Real Property on a date that is after the Surrender Date, including, without limitation, sending all required notices and advertising the foreclosure; (ii) the Debtors shall, on or before the Surrender Date, remove all personal property and trash of the Reorganized Debtors from the Real Property; (iii) the Reorganized Debtors waive any requirement under O.C.G.A. Sec. 44-14-161 that Newtek (or its successor, assignee, or designee) confirm the foreclosure sale; and (iv) any proceeds of the foreclosure sale or other disposition of the Real Property that are in excess of the $1,240,000 will inure to Newtek exclusively and not reduce any Allowed Unsecured Deficiency Claim. Except as expressly set forth herein and in the Plan, the terms of Newtek's original loan documents related to the allowed Class 2(a) Secured Claim will remain in full force and effect to the extent necessary for Newtek to pursue its foreclosure remedies with respect to the Real Property, for Newtek to collect on its Class 3(a) and Class 7 claims in accordance with the Plan, and for Newtek to collect from any guarantor; provided, however, that if there is a conflict between the Plan and such original loan documents as to the Debtors' obligations under the Plan, then the Plan will control. The Allowed Unsecured Deficiency Claim of Newtek in connection with the Allowed Class 2(a) Secured Claim, the allowance of such Deficiency Claim being reserved for a post-confirmation stipulation between the Debtors and Newtek or determination by the Bankruptcy Court, will be treated as set forth in Class 7. The Allowed Class 2(a) Secured Claim shall not be subject to objection. Newtek's remaining post-confirmation lien against the Debtors and the Reorganized Debtors asserted in connection with its Class 2(a) Secured Claim is limited solely to the Real Property, with all of the Debtors', Reorganized Debtors', and the Bankruptcy Estates' other assets that were alleged to secure the Real Estate Loan being rendered by the Plan free and clear of the Allowed Class 2(a) Secured Claim, the Real Estate Loan, and all other liens besides the liens alleged in Class 1. The Plan and Debtors' Chapter 11 discharge does not, in any way, modify the obligations of any guarantors under the terms of the original loan documents related to the Allowed Class 2(a) Secured Claim for the full unmodified amounts due thereunder. Any modification to this claim in the Plan shall have no impact on the terms, extent, and validity of this claim as it relates to any guarantors. The proposed treatment of the Allowed Secured Claim of Newtek Small Business Finance, LLC Related to the Business Loan (the "Class 3(a) Secured Claim") will be amended as follows, and all provisions of the Plan and Disclosure Statement shall be read to conform to this amendment: (a) Class 3(a) includes the Allowed Secured Claim of Newtek Small Business Finance, LLC under the Business Loan (stipulated in the amount of $217,600 as of the Confirmation Date) (the "Allowed Class 3(a) Secured Claim"). The Allowed Class 3(a) Secured Claim shall be satisfied in full by the Reorganized Debtors together with interest at 5.50% (which shall accrue starting on the Confirmation Date), amortized over 120 months, in 23 equal monthly installments of $2,361.53 each, commencing 120 days after the Confirmation Date, with like payments due on or before the first day of each month thereafter, with a final balloon payment for the remaining balance as the 24th payment, such that the Allowed Class 3(a) Secured Claim will be paid in full within 24 months. Reorganized Debtor Suncrest Stone's obligations shall be evidenced by a modification to Newtek's promissory note, a modification to Newtek's security agreement, and such other documents as it and Newtek reasonably deem necessary in a form acceptable to it and Newtek (collectively, the "Class 3(a) Loan Documents") and be secured only by that certain prepetition property itemized on Exhibit A attached to and incorporated into this First Modification (collectively, the "Post-confirmation Collateral), with all of the Debtors', Reorganized Debtors', and the Bankruptcy Estates' other assets that were alleged to secured the Business Loan being rendered by the Plan free and clear of the Allowed Class 3(a) Secured Claim, the Business Loan, and all other liens besides liens alleged in Class 1. The Allowed Class 3(a) Secured Claim may be prepaid in whole or part at any time, without penalty, and the Class 3(a) Loan Documents will include release price provisions for the itemized Collateral in a form acceptable to Reorganized Debtor Suncrest Stone and Newtek. Except as expressly set forth herein, the Class 3(a) Loan Documents, and in the Plan, the terms of Newtek's original loan documents related to the allowed Class 3(a) Secured Claim shall remain in full force and effect to the extent necessary for Newtek to pursue its foreclosure remedies with respect to the Real Property, for Newtek to collect on its Class 3(a) and Class 7 claims in accordance with the Plan, and for Newtek to collect from any guarantor; provided, however, that if there is a conflict between the Plan and such original loan documents as to the Debtors' obligations under the Plan, then the Plan shall control. The Allowed Unsecured Deficiency Claim of Newtek in connection with the Allowed Class 3(a) Secured Claim, the allowance of such Deficiency Claim being reserved for a post-confirmation stipulation between the Debtors and Newtek or determination by the Bankruptcy Court, shall be treated as set forth in Class 7. The Allowed Class 3(a) Secured Claim shall not be subject to objection. The Plan and Debtors' Chapter 11 discharge does not, in any way, modify the obligations of any guarantors under the terms of the original loan documents related to the Allowed Class 3(a) Secured Claim for the full unmodified amounts due thereunder. Any modification to this claim in the Plan shall have no impact on the terms, extent, and validity of this claim as it relates to any guarantors. The proposed treatment of the Allowed Secured Claim of CDS Business Services, Inc. Related to the Receivables Claim (the "Class 4 Secured Claim") will be amended as follows, and all provisions of the Plan and Disclosure Statement shall be read to conform to this amendment: (a) Class 4 includes the Allowed Secured Claim of CDS Business Services, Inc. ("CDS") under the Receivables Claim (stipulated in the amount of $300,000 as of the Confirmation Date) (the "Allowed Class 4 Secured Claim"). The Allowed Class 4 Secured Claim will be satisfied in full by Reorganized Debtor Suncrest Stone together with interest at 6.00% (which shall accrue starting on the Confirmation Date), amortized over 60 months in 60 equal monthly installments of $5,799.84 each, commencing 120 days after the Confirmation Date, with like payments on or before the first day of each month thereafter, such that the Allowed Class 4 Secured Claim will be paid in full within 60 months. Reorganized Debtor Suncrest Stone's obligations shall be evidenced by a modification of CDS' promissory note and such other documents as it and CDS reasonably deem necessary in a form acceptable to it and CDS (collectively, the "Class 4 Loan Documents"). CDS will not have a lien on any real or personal property of the Reorganized Debtors, with all of the Debtors', Reorganized Debtors', and the Bankruptcy Estates' assets that were alleged to secure the Receivables being rendered by the Plan free and clear of the Allowed Class 4 Secured Claim, the Receivables Claim, and all other liens besides liens alleged in Class 1. The Allowed Class 4 Secured Claim may be prepaid in whole or part at any time, without penalty. The Class 4 Loan Documents, and in the Plan, the terms of CDS' original loan documents related to the allowed Class 4 Secured Claim will remain in full force and effect to the extent necessary for Newtek to pursue its foreclosure remedies with respect to the Real Property, for CDS to collect on its Class 4 claim in accordance with the Plan, and for CDS collect from any guarantor; provided, however, that if there is a conflict between the Plan and such original loan documents as to the Debtors' obligations under the Plan, then the Plan shall control. CDS shall not have an Allowed Unsecured Deficiency Claim and shall not participate in Class 7 or in the Creditors Trust. The Allowed Class 4 Secured Claim shall not be subject to objection. CDS' Class 4 Allowed Secured Claim shall not be discharged in this Chapter 11 Bankruptcy Case. The Plan and Debtors' Chapter 11 discharge does not, in any way, modify the obligations of any guarantors under the terms the original loan documents related to the Allowed Class 4 Secured Claim for the full unmodified amounts due thereunder. Any modification to this claim in the Plan shall have no impact on the terms, extent, and validity of this claim as it relates to any guarantors. The proposed treatment of the Allowed Claims of the Internal Revenue Service shall be amended as follows, and all provisions of the Plan and Disclosure Statement shall be read to conform to this amendment: (a) Reorganized Debtor Suncrest Stone will pay the unsecured priority claim of the Internal Revenue service ("IRS") in the amount of $105,144, at 5 percent interest, in cash, in equal monthly installments, on the same day of each month, pursuant to 11 U.S.C. Sec. 1129(a)(9)(C)-(D), and the Internal Revenue Code Sec. 6601 and 6621. The claims of the IRS will be subject to objection as provided in the Plan. (b) Reorganized Debtor Suncrest Stone shall remain in compliance with all federal tax deposits and estimated tax payments, as required by federal law. Proof of federal tax deposits must be sent to the Internal Revenue Service, c/o Lisa Smith, Internal Revenue Service, Bankruptcy Specialist, 401 West Peachtree Street, Stop 334-D, Atlanta, Georgia 30308. Failure to timely file returns or timely pay taxes as they become due will constitute a default of the Chapter 11 Plan. (c) The Allowed Unsecured Priority Claim, if any, of the IRS is a non-dischargeable debt, except as otherwise provided for in the Code, or order of the Court. If Reorganized Debtor Suncrest Stone defaults on its obligations to the IRS, then, notwithstanding anything to the contrary in the Plan or under the Bankruptcy Code, the IRS can collect said debt in the event of default in accordance with the default provisions described in this Order and in accordance with all of its available state and federal rights and remedies; any federal tax liens shall survive Plan confirmation, a bankruptcy discharge, and dismissal of the case. Any liens shall continue to be enforceable against all of the Debtors’ property under federal law. (d) A failure by Reorganized Debtor Suncrest Stone to make a payment to the IRS pursuant to the terms of the Plan and/or failure to remain current on filing and paying post-confirmation taxes, shall be an event of default as to the IRS and only as to the IRS and shall not constitute a general default under the Plan as to other creditors. As to the IRS, there is an event of default under the Plan if a payment is not received by the 15th day of each month. If there is a default, the IRS must send written demand for payment, and said payment must be received by the IRS within 15 days of the date of the demand letter. Reorganized Debtor Suncrest Stone can receive up to three (3) notices of default from the IRS during any calendar year; however, on the third notice of default from the IRS in a calendar year, the third notice cannot be cured, and the IRS may accelerate its allowed claim(s), past and future, and declare the outstanding amount of such allowed claim(s) to be immediately due and owing and pursue any and all available state and federal rights and remedies. These default provisions pertain to all Allowed Claims, if any, of the IRS – Allowed Unsecured Priority Claims and Allowed Unsecured General Claims – provided that any Allowed Unsecured General Claim shall be paid as provided in the Creditors Trust to the extent that such Allowed Claim is participating in the Creditors Trust. (e) The IRS is bound by the provisions of the confirmed Plan and is barred under 11 U.S.C. Sec. 1141 from taking any collection actions against the Debtors for prepetition claims during the duration of the Plan (provided there is no default as to the IRS). The period of limitations on collection remains suspended under 26 U.S.C. Sec. 6503(h) for the tax periods being paid under the Plan and terminates on the earlier of (1) all required payments to the IRS have been made; or (2) 30 days after the date of the demand letter for which the Debtor failed to cure the default. A full-text copy of the First Modification to the Third Amended Joint Plan of Reorganization dated June 15, 2020, is available at https://tinyurl.com/y8w57vjq from PacerMonitor.com at no charge. Attorneys for the Debtors: Matthew S. Cathey David L. Bury, Jr. STONE & BAXTER, LLP Suite 800, Fickling & Co. Building 577 Mulberry Street Macon, Georgia 31201 (478) 750-9898; (478) 750-9899 (fax) Attorney for Newtek Small Business Finance, LLC and CDS Business Services, Inc.: John G. McCullough Aldridge Pite, LLP Fifteen Piedmont Center 3575 Piedmont Road, N.E., Suite 500 Atlanta, GA 30305 Phone: (404) 7276; Fax: (888) 873-6147 Email: jmccullough@aldridgepite.com About Suncrest Stone Products Suncrest Stone Products, LLC -- https://www.suncreststone.com/ -- is a stone supplier in Ashburn, Georgia. Its products include Ashlar, Country Ledge, Ledge, River Rock, Olde-Castle, Splitface, Stock, and Rubble. Suncrest Stone Products and 341 Stone Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Lead Case No. 18-10850) on July 13, 2018. In the petition signed by Max Suter, authorized officer, Suncrest was estimated to have assets of less than $1 million and liabilities of $1 million to $10 million. 341 Stone was estimated to have $1 million to $10 million in assets and liabilities. Judge Austin E. Carter is the presiding judge. Stone & Baxter, LLP, is the Debtors' counsel. GGG Partners, LLC, is the financial advisor and McMurry Smith & Company is the accountant. Crumley and Associates Inc. d/b/a South Georgia Appraisal Company, is the appraiser to the Debtor. SUNESIS PHARMACEUTICALS: Agrees to Pay Off $5.7 Million Bank Debt ----------------------------------------------------------------- Sunesis Pharmaceuticals, Inc., executed on July 28, 2020, a payoff letter to repay in full all outstanding indebtedness and terminate all commitments and obligations under its term loan agreement dated April 26, 2019, as amended, with Silicon Valley Bank. Under the payoff letter, the Company has agreed to pay to SVB approximately $5.7 million, which will satisfy all of the Company's debt obligations, including a final payment equal to 4% of the original principal amount of the borrowing. Meanwhile, the Company filed a preliminary prospectus supplement with the SEC on July 28, 2020, in which it disclosed that on a preliminary unaudited basis, the Company, estimates that its cash and cash equivalents as of June 30, 2020 to be approximately $17.7 million, which excludes restricted cash of $5.5 million. The estimate is preliminary based on currently available information and does not present all necessary information for a complete understanding of the Company's financial condition as of June 30, 2020 or the Company's results of operations for the three and six months ended June 30, 2020. About Sunesis Pharmaceuticals Headquartered in San Francisco, California, Sunesis -- http://www.sunesis.com/-- is a biopharmaceutical company developing novel targeted inhibitors for the treatment of hematologic and solid cancers. Sunesis has built an experienced drug development organization committed to improving the lives of people with cancer. The Company is focused on advancing its novel kinase inhibitor pipeline, including its oral non-covalent BTK inhibitor vecabrutinib and first-in-class PDK1 inhibitor SNS-510. Sunesis reported a net loss of $23.33 million for the year ended Dec. 31, 2019, compared to a net loss of $26.61 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $31.48 million in total assets, $9.40 million in total liabilities, and $22.09 million in total stockholders' equity. Ernst & Young LLP, in Salt Lake City, Utah, the Company's auditor since 1998, issued a "going concern" qualification in its report dated March 10, 2020 citing that the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. TAILORED BRANDS: Incurs $270 Million Net Loss in First Quarter -------------------------------------------------------------- Tailored Brands, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $269.9 million on $286.7 million of total net sales for the three months ended May 2, 2020, compared to net earnings of $7.14 million on $724.7 million of total net sales for the three months ended May 4, 2019. As of May 2, 2020, the Company had $2.50 billion in total assets, $2.88 billion in total liabilities, and a total shareholders' deficit of $378.32 million. In response to COVID-19, the Company took several actions to preserve financial liquidity and financial flexibility including: * Borrowing $310 million under its ABL Facility * Significantly reducing or deferring operating expenses, capital expenditures and inventory purchases * Extending payment terms with suppliers and vendors * Suspending rent payments under its operating leases for April and May and negotiating rent deferrals for some of its stores, with repayment of such deferred amounts beginning at the end of 2020 into 2021 * Implementing temporary base salary reductions for officers and employees with a salary of $100,000 or more ranging from 10% to 50% and reducing the Board's cash retainer fees by 50% (which were all reinstated in late June 2020), and * Furloughing or temporarily laying off all of its store employees, most of its distribution network employees and the majority of its corporate employees (while paying both the Company and employee portions of health premiums for medical, dental and vision for affected employees). From a liquidity perspective, as of May 2, 2020, the Company's cash and cash equivalents totaled $244.2 million. The Company continues to employ measures to maintain ample liquidity and maximize available cash on hand. As of May 2, 2020, the Company's outstanding borrowings under its ABL Facility totaled $385.0 million. In addition, the Company's remaining Availability was $88.8 million, which exceeds any minimum thresholds that would trigger adverse circumstances or potential default under the ABL Facility or its other outstanding indebtedness. Tailored Brands said," We believe the impact of COVID-19 makes many of the operating metrics that we report in the normal course of business to be less meaningful. As such, we have elected not to report comparable sales for our retail brands as our stores were closed for over half of the first quarter of 2020 and believe other operating metrics such as operating income and earnings per share are less meaningful to investors to assess performance." Key operating metrics for continuing operations for the three months ended May 2, 2020 include: * Net sales decreased $438.0 million, or 60.4%, primarily due to the temporary closure of our stores in response to COVID- 19. * Gross margin decreased $275.2 million. As a percentage of sales, gross margin was 10.4% reflecting deleveraging of occupancy costs. * The Company recorded $194.3 million of goodwill, intangible and long-lived asset impairment charges primarily driven by the significant sustained decrease in its stock price as well as the impact of COVID-19. * The Company recorded a gain on the previously announced sale of the Joseph Abboud trademarks totaling $82.7 million. * Operating loss was $258.7 million compared to operating income of $29.0 million for the same period last year. * Loss per share was $5.55 for the three months ended May 2, 2020 compared to diluted earnings per share of $0.13 for the same period last year. Key liquidity metrics for the three months ended May 2, 2020 include: * Cash and cash equivalents at the end of the first quarter of 2020 were $244.2 million primarily reflecting borrowings of $310.0 million in response to COVID-19 offset by cash outflows necessary to operate the business while stores were temporarily closed. * Cash used in operating activities was $121.4 million for the first three months of 2020 primarily reflecting the impact of COVID-19. * Capital expenditures were $9.0 million for the first three months of 2020 compared to $21.7 million for the first three months of 2019 as the Company significantly reduced and or deferred payment on its capital spend in response to COVID- 19. * Total debt at the end of the first quarter of 2020 was approximately $1.4 billion. During the first quarter of 2020, the Company made two scheduled $2.3 million payments on its term loan, while borrowings outstanding on its ABL Facility increased $335.0 million. Reductions in the Company's liquidity reflecting the implementation of a discretionary reserve on its $550 million asset-based credit facility and its election to not make the interest payment due on July 1, 2020 with respect to its 7.00% Senior Notes due 2022, have raised substantial doubt about the Company's ability to continue as a going concern within one year of the date that its condensed consolidated financial statements are issued. "Absent obtaining a waiver from our lenders or negotiating an agreement to avoid acceleration of our indebtedness, we will be in default on all of our indebtedness and we do not have sufficient liquidity to repay the amounts due under our indebtedness, consisting of our term loan, Senior Notes and ABL Facility. Furthermore, our current forecast for our financial condition and liquidity sources also raises doubt as to our ability to meet other obligations, including interest payments related to our indebtedness and operating lease obligations over the next twelve months. These conditions raise substantial doubt about our ability to continue as a going concern within one year after these condensed consolidated financial statements are issued." The Company has engaged advisors to assist with management's plans to evaluate several alternatives, including seeking a restructuring, amendment or refinancing of its debt through a private restructuring or reorganization under applicable bankruptcy laws. Management is also evaluating various alternatives to improve the Company's liquidity, including but not limited to, lease concessions and deferrals, further reductions of operating and capital expenditures, and raising additional capital. However, there can be no assurances that the Company will be able to successfully restructure its indebtedness or improve its financial position and liquidity. Management's plans are not yet finalized and are subject to numerous uncertainties including negotiations with its lenders and conditions in the credit and capital markets. As a result of the foregoing factors, the Company has concluded that management's plans do not alleviate substantial doubt about its ability to continue as a going concern. Furthermore, although management's projections indicate non-compliance with the fixed charge coverage ratio beginning in the fourth quarter of fiscal 2020, it is likely that the Company will pursue a reorganization under applicable bankruptcy laws prior to the occurrence of such non-compliance or well in advance of such date, possibly as soon as during the third quarter of fiscal 2020. Should we reorganize under applicable bankruptcy laws, there will likely not be any value distributed to its shareholders and our shares could be cancelled for no consideration. A full-text copy of the Form 10-Q is available for free at: https://is.gd/9YPwAG About Tailored Brands Tailored Brands, Inc., is an omni-channel specialty retailer of menswear, including suits, formalwear and a broad selection of polished and business casual offerings. The Company delivers personalized products and services through its convenient network of over 1,400 stores in the United States and Canada as well as its branded e-commerce websites at http://www.menswearhouse.com/and http://www.josbank.com. Its brands include Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G. Tailored Brands reported a net loss of $82.28 million for the year ended Feb. 1, 2020, compared to net earnings of $83.24 million for the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had $2.42 billion in total assets, $2.52 billion in total liabilities, and a total shareholders' deficit of $98.31 million. * * * As reported by the TCR on July 7, 2020, S&P Global Ratings lowered its issuer credit rating on Fremont, Calif.-based specialty apparel retailer Tailored Brands Inc. to 'D' from 'CCC+'. S&P does not expect the company will make the interest payment within the 30-day grace period. The rating agency downgraded the company because it believes the company will eventually pursue a comprehensive restructuring. TRIDENT TPI: Moody's Alters Outlook on B3 CFR to Stable ------------------------------------------------------- Moody's Investors Service changed the outlook for Trident TPI Holdings, Inc. to stable from negative and affirmed the B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also affirmed the B2 rating on Trident's first lien term loans and the Caa2 on the company's senior unsecured notes. The change in outlook to stable reflects Moody's view that Trident's management team has gained traction in integrating its recent transformative acquisitions. Moody's expects leverage to decline and free cash flow to improve over the next 12 to 18 months. Moody's expects that the company will maintain an adequate liquidity profile. Finally, acquisitions are anticipated to be bolt-on in nature and geared toward an expanded presence in the specialized medical/pharmaceutical end markets. The following rating actions were taken: Issuer: Trident TPI Holdings, Inc.: Corporate Family Rating, affirmed B3; Probability of Default Rating, affirmed at B3-PD; Outlook, changed to stable from negative; $629 million first lien senior secured term loan due 2024, affirmed at B2 (LGD3) EUR253 million first lien senior secured term loan due 2024, affirmed at B2 (LGD3) $345 million senior unsecured notes due 2024 and $260 million senior unsecured notes due 2025 affirmed at Caa2 (LGD5) RATINGS RATIONALE The B3 Corporate Family Rating incorporates Trident's relatively small scale in a competitive and fragmented industry, coupled with high debt leverage. Trident's financial policy includes a growth through acquisition strategy that elevates event and integration risk. The company also lacks contractual pass throughs on most of its business and has a high customer concentration, with about 25% of revenue generated from its top ten customers. However, Trident competes in stable end markets, including food and beverage and medical and pharmaceutical, with the ability to offer specialized products that contribute to the company's higher than average margins. In addition, Moody's expects revenue and EBITDA growth to aid in improving the company's credit quality and cash flow profile. Moody's expects Trident's liquidity profile to be adequate over the next 12-18 months stemming from its modest positive free cash flow and availability under its asset-based revolving credit facility. Further, the 2022 maturity of the revolving credit facility is the company's nearest maturity FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company continues to successfully integrate recent acquisitions, as well as balance its acquisition strategy with debt reduction to a leverage metric of below 5.5x. In addition, the company would need to cover interest more than 3.0x and maintain adequate liquidity. The ratings could be downgraded if the company embarks on an aggressive acquisition strategy, sustains leverage above 7.0x or interest coverage below 2.0x. A weakened liquidity profile could also result in a rating downgrade. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass, and Plastic Containers published in May 2018. Headquartered in Wayne, Pennsylvania, Trident TPI Holdings, Inc. is a manufacturer of plastic packaging and materials as well as tubing products for the food, healthcare and consumer goods markets. The healthcare business segment manufactures medical compounds, films and medical tubing. The food packaging business segment produces polystyrene thermoformed foam and PET packaging, such as egg cartons and foam food trays. The specialty packaging segment manufactures aerosol gasket, pump components, closure liners, medical pouches and industrial specialty films. Most of the company's revenue is generated from the Americas but Trident also has operations in Europe, Asia, and Latin America. For the twelve months ended March 31, 2020, sales were $993 million and adjusted EBITDA $187 million. Trident is a portfolio company of Genstar Capital and does not publicly disclose financial information TUPPERWARE BRANDS: Posts $63.8-Mil. Net Income in Second Quarter ---------------------------------------------------------------- Tupperware Brands Corporation filed with the Securities and Exchange Commission its quarterly report on Form 10-Q, disclosing net income of $63.8 million on $397.4 million of net sales for the 13 weeks ended June 27, 2020, compared to net income of $39.4 million on $475.3 million of net sales for the 13 weeks ended June 29, 2019. For the 26 weeks ended June 27, 2020, the Company reported net income of $56 million on $773.3 million of net sales compared to net income of $76.3 million on $962.6 million of net sales for the 26 weeks ended June 29, 2019. As of June 27, 2020, the Company had $1.19 billion in total assets, $1.47 billion in total liabilities, and a total shareholders' deficit of $282.3 million. "In the second quarter we pivoted to a new way to lead the business, a new way to operate the company and embraced a new growth strategy. Our performance reflects progress made to right size our cost structure and improve liquidity. We are now increasing our efforts to contemporize Tupperware and become a global leader in sustainable consumer solutions while leveraging the consumer influence of our iconic brand," said Miguel Fernandez, president and chief executive officer of Tupperware Brands. "While we continue to navigate an ever changing environment impacted by COVID-19, I want to thank all of our team members and our sales force for quickly embracing digital tools that contributed favorably to our performance. We will also continue to focus on improving access for consumers to our products while delivering new, innovative products that meet their needs." "The improvements in profitability achieved in the second quarter demonstrate the ongoing commitment to improve operating margins and deliver $180 million in gross cost reductions in 2020. As we head into the second half of the year, we will continue to explore initiatives designed to improve our liquidity, proactively address near term debt obligations, and build a stronger balance sheet," said Sandra Harris, chief financial officer. "Although our 4.75% 2021 Senior Notes became current in June, we have successfully retired approximately $100 million of those notes at a discount to par. Additionally, we continue to work with our advisors to explore opportunities to repurchase, refinance or extend the maturity on our debt, and we believe that our improved profitability and revenue growth through the Turnaround Plan, together with the anticipated sale of our Orlando real estate and other non-core assets, will contribute to our ability to meet our future debt obligations." Liquidity and Capital Allocation As of June 27, 2020, the Company continues to be in compliance with its financial covenants under its Credit Agreement. As part of the Turnaround Plan, the Company continued to prioritize the use of cash for the repayment of debt and investments to right size the business. The 4.75% 2021 Senior Notes became a current liability in June of 2020. The Company expects to continue to address this indebtedness through exploring with its advisors open-market purchases, future tender offers, exchange offers of debt for debt, cash or equity, or otherwise. The Company has successfully retired $98.7 million of those senior notes at a discount to par during the second quarter and an additional $13.4 million subsequent to the second quarter and through July 29, 2020. Additionally the Company believes that improved profitability and revenue growth through the Turnaround Plan, together with the anticipated sale of its Orlando real estate and other non-core assets in the coming year, will contribute to its ability to meet future debt obligations. During the second quarter ended June 27, 2020 the Company generated $101.8 million of cash flow from operating activities, net of investing activities, through reductions in discretionary spending, improvements in working capital including inventory reductions, and reducing payroll costs, including through organizational redesign, employee furloughs, and permanent reductions in employee headcount. A full-text copy of the Form 10-Q is available for free at: https://is.gd/2qjkKq About Tupperware Brands Tupperware Brands Corporation -- http://www.tupperwarebrands.com/ -- is a global manufacturer and marketer of innovative, premium products through social selling. Product brands span several categories including design-centric food preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products through the Avroy Shlain, Fuller Cosmetics, NaturCare, Nutrimetics and Nuvo brands. As of March 28, 2020, the Company had $1.29 billion in total assets, $829.9 million in total current liabilities, $601.8 million in long-term debt and finance lease obligations, $53.7 million in operating lease liabilities, $173.8 million in other liabilities, and a total shareholders' deficit of $364 million. * * * As reported by the TCR on July 14, 2020, S&P Global Ratings raised its issuer credit rating on U.S.-based Tupperware Brands Corp. to 'CCC-' from 'SD' after the company completed a tender offer for approximately $97.6 million of its $600 million 4.75% senior unsecured notes due June 1, 2021. As reported by the TCR on June 1, 2020, Moody's Investors Service downgraded Tupperware Brands Corporation's Corporate Family Rating to Caa3 from B3. These action follows Tupperware's May 26 announcement that it would launch a tender offer to purchase for cash up to $175 million of its $600 million senior unsecured notes due June 1, 2021. TWINS SPECIAL: Unsecureds Paid Prorata in 48 Monthly Installments ----------------------------------------------------------------- A Joint Plan of Reorganization Dated June 15, 2020, was jointly proposed by Twins Special, LLC together with secured creditors Nicholas Mechling and Christopher Mechling. Nicholas and Christopher Mechlings are the only members of Twins Special, LLC, a California limited liability company, which is the Debtor in this Bankruptcy Case. Class 1 Mechling Secured Claim is impaired. Interest will accrue at the contract rate. The laim remains secured. The secured amount is offset by all net Intellectual Property Proceeds received by the Mechlings. No payment will be made to Class 1 until all other creditors are paid in full. Class 2 Pouliot Judgment Claim (Claim No. 3) is impaired. The claim is treated as fully secured although the claim is partially disputed as to amount. The claim will bear interest at 3% and will be paid in full, in 48 monthly installments commencing on the first day of the third full month after the Effective Date. Class 3 General Unsecured Claims are impaired. The allowed claims are to be paid Pro Rata in 48 monthly installments commencing on the first day of the second full month after the Effective Date. The Plan provides that before each Plan Payment becomes due, the Mechlings will deposit to the account of the Reorganized Debtor funds sufficient to make each Plan Payment. The Mechlings anticipate that the source of these deposits will be Intellectual Property Proceeds. A full-text copy of the Disclosure Statement dated June 15, 2020, is available at https://tinyurl.com/yb4mftlq from PacerMonitor.com at no charge. Attorney for Debtor Twins Special, LLC: Bruce R. Babcock 085878 4808 Santa Monica Ave. San Diego, CA 92017 Telephone: (619) 222-2661 Attorneys for Creditors Nicholas Mechling and Christopher Mechling: Dean T. Kirby, Jr. Roberta S. Robinson KIRBY & McGUINN, A P.C. 707 Broadway, Suite 1750 San Diego, California 92101-5393 Telephone: (619) 685-4000 Facsimile: (619) 685-4004 About Twins Special Twins Special, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 20-01230) on March 3, 2020. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. Judge Christopher B. Latham oversees the case. The Debtor is represented by the Law Office of Bruce R. Babcock, Esq. US GC INVESTMENT: Hires Briggs Alexander as Litigation Counsel -------------------------------------------------------------- US GC Investment, L.P. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Briggs Alexander, APLC as its special litigation counsel. Briggs Alexander will represent Debtor in a case it filed against its landlord, Fu & Sons Investment Capital, LLC, for breach of lease agreement (Case No. 20STCV09036). The firm will get 35 percent of any recovery obtained after reimbursement of costs and expenses. Briggs Alexander disclosed in court filings that the firm is a "disinterested person" within the meaning of Bankruptcy Code Section 101(14). The firm can be reached through: Lev Zartarian, Esq. Peter Sunukjian, Esq. Jeffrey Weber, Esq. Briggs Alexander, APLC 2390 E. Orangewood Ave., Ste. 530 Anaheim, CA 92806-141 Telephone: (714) 520-9250 Facsimile: (714) 520-9248 Email: lev@briggsandalexander.com peter@briggsandalexander.com jeff@briggsandalexander.com About US GC Investment US GC Investment, L.P., owns a building which it constructed for the operation of Golden Corral Restaurant. The 11,548-square-foot building is located on the land owned by the landlord, Fu & Sons Investment LLC. The property has a liquidation value of $1.8 million. US GC Investment sought for protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-23436) on Nov. 15, 2018. At the time of the filing, Debtor disclosed $1,880,390 in assets and $3,964,666 in liabilities. The case has been assigned to Judge Vincent P. Zurzolo. Debtor is represented by the Law Offices of Michael Jay Berger. Debtor has tapped the Law Offices of Michael Jay Berger as its bankruptcy counsel and Briggs Alexander, APLC as its special litigation counsel. UTEX INDUSTRIES: Moody's Cuts CFR to Ca & Alters Outlook to Neg. ---------------------------------------------------------------- Moody's Investors Service downgraded UTEX Industries, Inc.'s Corporate Family Rating to Ca from Caa2, Probability of Default Rating to D-PD from Caa2-PD, first lien term loan to Ca from Caa1 and second lien term loan to C from Ca. The rating on the first lien revolving credit facility, previously withdrawn as of the maturity date, has been restored and downgraded to Ca from Caa1. The rating outlook was changed to negative from stable. Moody's has become aware that the company reached an agreement to extend its first lien revolver maturity beyond the maturity date in May 2020. Moody's considers this revolver maturity extension to be a distressed exchange, which Moody's views as a default. Moody's has also become aware of the company's subsequent failure to repay the revolver upon the extended maturity date, as well as its failure to fund the scheduled principal payment on its first lien term loan and scheduled interest payments on its first lien term loan and second lien term loan. Further, Moody's has become aware that UTEX and members of an ad hoc group of first lien lenders have executed a forbearance agreement with respect to those payments due under the First Lien Credit Agreement, and pursuant to the company's intercreditor agreement, second lien term loan lenders are prohibited from exercising certain remedies with respect to this nonpayment for at least 180 days and as set forth more fully in that agreement. This will likely lead to a material debt restructuring on distressed terms as the company considers strategic alternatives to potentially pursue a sustainable capital structure, while also responding to the coronavirus' negative effect on oil prices and demand for its products. Downgrades: Issuer: UTEX Industries, Inc. Probability of Default Rating, Downgraded to D-PD from Caa2-PD Corporate Family Rating, Downgraded to Ca from Caa2 Senior Secured First Lien Revolving Credit Facility, Downgraded to Ca (LGD3) from Caa1 (LGD3) Senior Secured First Lien Term Loan, Downgraded to Ca (LGD3) from Caa1 (LGD3) Senior Secured Second Lien Term Loan, Downgraded to C (LGD5) from Ca (LGD5) Outlook Actions: Issuer: UTEX Industries, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE The downgrade of UTEX's CFR to Ca and downgrade of the PDR to D-PD reflects Moody's views on overall recovery and that the company has defaulted under Moody's definitions of default. The company has a high debt burden and unsustainable capital structure, weak liquidity, and is relatively small in scale within the oilfield services sector. The company's performance is highly tied to drilling and completions activity in the US and is dependent on upstream capital budgets. Low crude oil prices and decreased rig count should weigh negatively on UTEX's operating results as exploration and production companies continue to cut back on capital spending levels. As such, Moody's expects UTEX to experience significantly lower EBITDA and weaker financial leverage metrics in 2020, likely leading to a material debt restructuring on distressed terms. 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 rating action reflects the impact on UTEX of these factors, given its exposure to the oil and gas sector and resulting vulnerability to shifts in market demand and sentiment in these unprecedented operating conditions. UTEX's first lien term loan and revolver are rated Ca, consistent with the CFR and reflecting Moody's view on expected recoveries for these instruments. The second lien term loan is rated C, one notch below the CFR, reflecting its subordination to UTEX's first lien debt as well as its size relative to the company's overall liability structure and Moody's view on recovery. The negative outlook reflects heightened risk of debt restructuring or a bankruptcy filing. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a downgrade include Moody's lowering its view on expected recoveries. Factors that could lead to an upgrade include the company reducing debt sufficiently to achieve a tenable capital structure with improved liquidity. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. UTEX Industries, Inc., headquartered in Houston, Texas, is a designer, manufacturer and distributor of highly engineered custom-tailored elastomer and thermoplastic spring energized seals, downhole products, and pressure pumping consumable products to the oil & gas extraction industry, particularly the well completions market. UTEX was acquired by affiliates of Riverstone Holdings LLC in April 2013. VAC FUND HOUSTON: Unsecureds Get Beneficial Interest From Pool -------------------------------------------------------------- Vac Fund Houston, LLC, and the Official Committee of Unsecured Creditors, proposed a Second Amended Joint Chapter 11 Plan of Reorganization. The Reorganized Debtor will execute deeds to each of the Returned Homes in favor of Goldman Sachs prior to or on the Effective Date. Thereafter the Reorganized Debtor shall market and sell all of the Goldman Remaining Homes and the Lendinghome Remaining Homes in the ordinary course of business subject to approval by the Management Board. The proceeds from those sales shall be paid to the creditors such as: Classes 1(A) – (F) Secured Claims of Goldman Sachs; Classes 2(A) – (Z) Secured Claims of Lendinghome; Class 3 Secured Claims of Cypress; Class 4 Secured Claim of Harris County; Class 5 Secured Claims of Montgomery County; Class 6 General Unsecured Claims and Class 7 Holders of Equity Interests in accordance with the priorities set forth in the Code and as provided in the Joint Plan. Class 6 will consist of the Allowed Unsecured Claims of creditors who have filed timely proofs of claim or were scheduled as holding Claims which are undisputed, noncontingent and liquidated. Each holder of an Allowed Claim in Class 6 shall receive a beneficial interest equal to the amount of their Allowed Claim in the Unsecured Creditors Pool in exchange for their Allowed Claim. On a quarterly basis, the Reorganized Debtor shall make a distribution to holders of beneficial interests in the Unsecured Creditors Pool, and each holder shall receive their pro rata share of the Unsecured Creditors Pool on each quarterly distribution date. Class 7 will consist of the interests of the holder of Equity Interests in the Debtor. No holder of Equity Interests shall retain any interests under this Joint Plan. Holders of Equity Interests are deemed to reject this Joint Plan. On the Effective Date, all of the assets of the Debtor and the Estate shall be transferred to and owned by the Reorganized Debtor, free and clear of all liens, claims and encumbrances any person except as explicitly set forth. A full-text copy of the Second Amended Joint Chapter 11 Plan of Reorganization dated June 15, 2020, is available at https://tinyurl.com/y9v9ylyo from PacerMonitor.com at no charge. Attorneys for the Debtor: Christopher R. Kaup, Arizona Bar No. 014820 Ace Van Patten, Nevada Bar No. 11731 TIFFANY & BOSCO P.A. 10100 West Charleston Boulevard Las Vegas, Nevada 89135 Telephone: (702) 258-8200 Facsimile: (602) 258-8787 E-Mail: crk@tblaw.com; avp@tblaw.com Counsel for the Official Committee of Unsecured Creditors: Daren R. Brinkman Laura Portillo BRINKMAN PORTILLO RONK, APC 8275 S. Eastern Ave., Ste 200 Las Vegas, NV 89123-2545 Telephone: (702) 598-1776 E-mail: firm@brinkmanlaw.com About VAC Fund Houston VAC Fund Houston, LLC, a Nevada-based company engaged in activities related to real estate, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 19-17670) on Dec. 2, 2019, disclosing $15,948,556 in assets and $17,369,695 in liabilities. The petition was signed by Christopher Shelton, trustee of VAC Fund Houston Trust, manager of Debtor. Judge Mike K. Nakagawa oversees the case. Christopher R. Kaup, Esq., at Tiffany & Bosco, P.A., is the Debtor's legal counsel. The U.S. Trustee for Region 17 appointed a committee of unsecured creditors on Jan. 15, 2020. The committee is represented by Brinkman Portillo Ronk, APC. WATSON VALVE: Trustee Seeks Approval to Hire Special Counsel ------------------------------------------------------------ Robert Ogle, the Chapter 11 trustee for Watson Valve Services, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ as his special counsel McDowell Hetherington, LLP effective June 4 to 12, and Chamberlain, Hrdlicka, Williams, White & Aughtry, P.C. effective June 12. McDowell, through Jarrod Martin, Esq., represented the trustee for the period between June 2 and 12. The attorney transferred to Chamberlain on June 12. Debtor will pay the attorney $425 per hour for his services. Lara Coleman, the paralegal assisting the attorney, will be compensated at $195 per hour. Prior to its bankruptcy filing, Debtor funded a retainer for McDowell in the amount of $125,000. On Feb. 6, the firm received payment of $58,432 from the retainer. Mr. Martin disclosed in court filings that the firms are "disinterested persons" within the meaning of Bankruptcy Code Section 101(14). Mr. Martin holds office at: Jarrod B. Martin, Esq. Chamberlain, Hrdlicka, Williams, White & Aughtry P.C. 1200 Smith Street, Suite 1400 Houston, TX 77002 Telephone: (713) 356-1280 Facsimile: (713) 658-2553 Email: jarrod.martin@chamberlainlaw.com About Watson Valve Services Watson Valve Services, Inc., founded in 2002 in Houston, Texas, supplies specialty and custom valves, with a specialty in valves for autoclaves used to mine gold. The company filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-30968) on Feb. 6, 2020 in Houston, Texas. John Watson is the Debtor's chief executive officer. Judge Marvin Isgur oversees the case. McDowell Hetherington LLP is the Debtor's bankruptcy counsel. Robert Ogle was appointed as trustee for the Chapter 11 case on June 2, 2020. He tapped Jarrod B. Martin, Esq., at McDowell Hetherington, LLP and Chamberlain, Hrdlicka, Williams, White & Aughtry P.C. as his special counsel. WOODLAWN COMMUNITY: Trustee Seeks Approval to Hire Auctioneer ------------------------------------------------------------- Gina Krol, the Chapter 11 trustee for Woodlawn Community Development Corp., seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Millennium Properties Real Estate to conduct an auction sale of the company's real property. The firm's services will be provided mainly by Daniel Hyman, chief executive officer. He will be paid a 5 percent commission by the buyers of the property located at 1500‐1528 E. 63rd St., Chicago. Any cooperating broker is anticipated to receive 2 percent of the commission. Mr. Hyman estimated the costs of marketing and sale at $4,000. Mr. Hyman disclosed in court filings that his firm does not represent any entity having an adverse interest in connection with Debtor's bankruptcy case. Millennium Properties can be reached through: Daniel J. Hyman Millennium Properties Real Estate 205 W. Wacker Dr., Suite 1750 Chicago, IL 60606 Telephone: (312) 338-3003 Email: dhyman@mpirealestate.com About Woodlawn Community Development Founded in 1972, Woodlawn Community Development Corp. manages and develops affordable housing for families in the Greater Metro Chicago area. Visit https://www.wcdcchicago.com for more information. Woodlawn Community Development filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 18-29862) on Oct. 24, 2018. In the petition signed by Leon Finney, Jr., president and chief executive officer, Debtor was estimated to have $50 million to $100 million in both assets and liabilities. Judge Carol A. Doyle oversees the case. Debtor has tapped Herzog & Schwartz, P.C. as its bankruptcy counsel. Gina B. Krol is Debtor's Chapter 11 trustee. She is represented by the law firm of Cohen & Krol. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Selfridge Group, Inc. Bankr. S.D. Fla. Case No. 20-17945 Chapter 11 Petition filed July 22, 2020 See https://is.gd/lifU8j represented by: Ido J. Alexander, Esq. LEIDERMAN SHELOMITH ALEXANDER + SOMODEVILLA, PLLC E-mail: ija@lsaslaw.com In re The Pipe Wright, Inc. Bankr. S.D. Fla. Case No. 20-17946 Chapter 11 Petition filed July 22, 2020 See https://is.gd/PUcWUU represented by: Ido J. Alexander, Esq. LEIDERMAN SHELOMITH ALEXANDER + SOMODEVILLA, PLLC E-mail: ija@lsaslaw.com In re Baby Buford 14 Mile, LLC Bankr. E.D. Mich. Case No. 20-47992 Chapter 11 Petition filed July 22, 2020 See https://is.gd/nL3QJq represented by: John M. Ketzler, Esq. LAW OFFICE OF JOHN M. KETZLER PLLC E-mail: johnketzler@jketzlerlaw.com In re Bahati, LLC Bankr. D. Ariz. Case No. 20-08435 Chapter 11 Petition filed July 21, 2020 represented by: Lynne Hughes, Esq. In re Kenneth B. Parr and DeAnna W. Parr Bankr. M.D. Fla. Case No. 20-05579 Chapter 11 Petition filed July 22, 2020 represented by: David Steen, Esq. In re Cigar Brothers, LLC Bankr. M.D. Fla. Case No. 20-05599 Chapter 11 Petition filed July 23, 2020 See https://is.gd/VSSVj5 represented by: David W. Steen, Esq. DAVID W. STEEN, P.A. E-mail: dwsteen@dsteenpa.com In re Master Replicas Group, Inc. Bankr. E.D. Pa. Case No. 20-13095 Chapter 11 Petition filed July 23, 2020 See https://is.gd/eMhkvd represented by: David B. Smith, Esq. SMITH KANE HOLMAN, LLC E-mail: dsmith@skhlaw.com In re HS Reo 105 LLC Bankr. W.D. Wash. Case No. 20-11973 Chapter 11 Petition filed July 23, 2020 See https://is.gd/MTcCqZ represented by: Marc S. Stern, Esq. LAW OFFICE OF MARC S. STERN E-mail: marc@hutzbah.com In re Chattanooga Mercantile, LLC Bankr. E.D. Tenn. Case No. 20-12020 Chapter 11 Petition filed July 23, 2020 See https://is.gd/vQAXSX represented by: Richard L. Banks, Esq. RICHARD BANKS & ASSOCIATES, P.C. E-mail: rbanks@rbankslawfirm.com In re Jon Christian Amberson Bankr. W.D. Tex. Case No. 20-51324 Chapter 11 Petition filed July 23, 2020 represented by: Scott Lawrence, Esq. In re Bernard V. Tew and Andrea B. Tew Bankr. E.D. Ky. Case No. 20-51078 Chapter 11 Petition filed July 23, 2020 represented by: Dean Langdon, Esq. DELCOTTO LAW GROUP PLLC Email: dlangdon@dlgfirm.com In re Ronald Dwayne Collins Bankr. E.D. Tenn. Case No. 20-31765 Chapter 11 Petition filed July 23, 2020 represented by: Thomas Tarpy, Esq. In re Silicon Valley Taxi Drivers, Inc. Bankr. N.D. Cal. Case No. 20-51104 Chapter 11 Petition filed July 24, 2020 See https://is.gd/keEzCL represented by: Rattan Dev S. Dhaliwal, Esq. DHALIWAL LAW GROUP, INC. In re Spon Computer Corporation Bankr. D.P.R. Case No. 20-02906 Chapter 11 Petition filed July 24, 2020 See https://is.gd/UVeL8f represented by: Noemi Landrau Rivera, Esq. LANDRAU RIVERA & ASSOCIATES E-mail: nlandrau@landraulaw.com In re McCary Meats, LLC Bankr. E.D. Wash. Case No. 20-01469 Chapter 11 Petition filed July 24, 2020 See https://is.gd/I8OsLl represented by: William L. Hames, Esq. HAMES, ANDERSON, WHITLOW & O'LEARY E-mail: billh@hawlaw.com In re Fruitions Restaurants, LP Bankr. N.D. Tex. Case No. 20-31993 Chapter 11 Petition filed July 24, 2020 See https://is.gd/JvJ0vM represented by: John P. Henry, Esq. HENRY & REGEL, PLLC E-mail: John@henryregel.com In re John Wilson Pugh and Anne Louise Pugh Bankr. E.D. Cal. Case No. 20-23614 Chapter 11 Petition filed July 24, 2020 represented by: John Downing, Esq. In re Lonnie U. Tinsman, Jr. Bankr. D. Maine Case No. 20-10352 Chapter 11 Petition filed July 24, 2020 represented by: James Molleur, Esq. In re Gilman's Cleaners, Inc. Bankr. S.D.N.Y. Case No. 20-35780 Chapter 11 Petition filed July 27, 2020 See https://is.gd/gZuxPV represented by: Michelle L. Trier, Esq. GENOVA & MALIN In re William Palafox Narvasa and Fernani Sison Narvasa Bankr. E.D. Cal. Case No. 20-23664 Chapter 11 Petition filed July 27, 2020 represented by: Arasto Farsad, Esq. In re Donald Gregory Campbell, VI Bankr. M.D. Fla. Case No. 20-05673 Chapter 11 Petition filed July 28, 2020 represented by: Kelley Petry, Esq. KELLEY M. PETRY, P.A. In re AASAA Media LLC Bankr. D. Utah Case No. 20-24553 Chapter 11 Petition filed July 28, 2020 See https://is.gd/2Bkh7i represented by: Lesta M. Simmons, Esq. DECISIS LAW PLLC E-mail: lesta.m.simmons@decisis.law In re Sentinl Inc Bankr. E.D. Mich. Case No. 20-48110 Chapter 11 Petition filed July 27, 2020 See https://is.gd/kRGh2R represented by: Kimberly Clayson, Esq. MAXWELL DUNN, PLC E-mail: kclayson@maxwelldunnlaw.com In re Donald Gregory Campbell, VI Bankr. M.D. Fla. Case No. 20-05673 Chapter 11 Petition filed July 28, 2020 represented by: Kelley Petry, Esq. KELLEY M. PETRY, P.A. In re Adam Capes Bankr. N.D. Ga. Case No. 20-68493 Chapter 11 Petition filed July 28, 2020 represented by: Will Geer, Esq. WIGGAM & GEER, LLC E-mail: wgeer@wiggamgeer.com In re John Wilson Pugh and Anne Louise Pugh Bankr. E.D. Cal. Case No. 20-23614 Chapter 11 Petition filed July 24, 2020 represented by: John Downing, 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 ***