/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200807.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, August 7, 2020, Vol. 24, No. 219 Headlines 4-S RANCH: US Trustee Objects to Disclosure Statement ABR BUILDERS: Court Confirms Reorganization Plan ACADIAN CYPRESS: Aug. 13 Hearing on Disclosure Statement ALTHAUS FAMILY: Aug. 11 Hearing on Disclosure Statement AMC ENTERTAINMENT: S&P Lowers ICR to 'SD' on Distressed Exchange AMERICORE HOLDINGS: Trustee Objects to Third Friday DIsclosures ANEW YOU MEDICAL: Unsecureds Will be Paid $50,000 Over 60 Months APOLLO ENDOSURGERY: Incurs $6.25-Mil. Net Loss in Second Quarter ARCHDIOCESE OF SANTA FE: Seeks Approval to Hire Real Estate Brokers ASCENA RETAIL: Gets Approval to Hire Prime Clerk as Claims Agent AUXILIUS HEAVY: KC Cohen Approved as Legal Counsel AUXILIUS HEAVY: Sanders Tax Service Approved as Accountant AVIS BUDGET: S&P Rates New $350MM Senior Unsecured Notes 'B-' B.R. ELLIS TIMBER: Unsecureds Will be Paid $12,000 on Prorata Basis BALTIMORE HOTEL: S&P Cuts Revenue Refunding Bond Rating to 'BB-' BEEGE HOLDING: Gets Interim Court Approval to Hire CRO BOROWIAK IGA: Aug. 12 Hearing on Disclosure Statement BRADLEY INVESTMENTS: First Home Objects to Disclosure Statement BRIDGEWATER HOSPITALITY: Aug. 11 Hearing on Disclosure Statement CARE FOR LIFE: Has Oct. 5 Deadline to Confirm Plan CARET CORPORATION: Unsecureds to Get 2% of Their Claims CARROUSEL THERAPY: Court Confirmed Plan and Approves Disclosures CEC ENTERTAINMENT: Chuck E. Cheese Closes 3 Ohio Locations CENTURY TOWNHOMES: Unsecureds Will be Paid From Proceeds of Sale CHESAPEAKE ENERGY: Gets Court Permission to Access Ch. 11 Financing CHEYENNE HOTEL: Unsecureds to Recover 5% in Plan CIAOBABYONMAIN LLC: Asks for Oct. 5 Deadline to File Plan CIAOBABYONMAIN LLC: Oct. 5 Deadline to File Plan and Disclosures CINEMEX HOLDINGS: Pushes Bid to Obtain Rent Relief CITY POWER: Unsecureds to Get Pro Rata Share of Available Funds CL AND MEW: Butler Law Firm Approved as Counsel COLUMBIA NUTRITIONAL: Columbia State Objects to Disclosures COMCAR INDUSTRIES: TFI Purchases MCT Transportation's Assets COVIA HOLDINGS: In Chapter 11 to Reduce Debt by $1 Billion CRESTWOOD EQUITY: Crestwood to Maintain Operations CSC HOLDINGS: S&P Rates New $1BB Guaranteed Notes 'BB' CYTOSORBENTS CORPORATION: Posts $2.9M Net Loss in 2nd Quarter D/C DISTRIBUTION: Asbestos Claimants Allowed to Pursue Case DENBURY RESOURCES: Porter, Paul Weiss Represent Second Lien Group DONMAR RENTALS: Unsecureds Will be Paid in Full in Plan DORAN HOLDING: Foreclosure Sale of NJ Property Upheld EDGEWATER RNH: Unsecureds Will be Paid From Funds Remaining EIGHTY-EIGHT HOMES: Seeks 60-Day Extension of Deadline to File Plan ELEMENT SOLUTIONS: Moody's Rates $800MM Unsec. Notes Due 20208 'B2' EMERGENT BIOSOLUTIONS: S&P Assigns 'BB' ICR; Outlook Stable EXIDE TECHNOLOGIES: Gets Court OK to Give Execs Ch. 11 Bonuses FANSTEEL INC: Aug. 6 Hearing on Disclosures and Plan FIELDWOOD ENERGY: Fitch Cuts LT IDR to 'D' on Bankruptcy Filing FIELDWOOD ENERGY: Moody's Cuts PDR to D-PD on Bankruptcy Filing FOLSOM FARMS: US Trustee Objects to Disclosure Statement FORESIGHT ENERGY: Announces Reorganization Plan Implementation FORUM ENERGY: Moody's Hikes CFR to Caa2 & Alters Outlook to Stable FORUM ENERGY: S&P Lowers ICR to 'SD' on Distressed Debt Exchange FRANK INVESTMENTS: Court Confirms Liquidating Plan FRONTIER COMMUNICATIONS: 1st Lien Lenders Want Rejection of Plan FRONTIER COMMUNICATIONS: To Seek Plan Confirmation Aug. 11 GABRIEL INVESTMENT: Proceeds of Nooner Sale to Pay Off Claims GMI GROUP: Unsecureds to Get 30% of Claims in Plan GNC HOLDINGS: Closes Kenhorst, PA Location GNC HOLDINGS: Investor Harbin Pharmaceutical to Open Auction GRAPHIC TUFTING: Unsecureds to Get Nothing in Plan GROUP 1 AUTOMOTIVE: S&P Rates $550MM Senior Unsecured Notes 'BB+' HARVEST MIDSTREAM: S&P Assigns 'B+' ICR; Outlook Stable HEARTS AND HANDS: Unsecureds Will be Paid in Full in Plan HOWARD HUGHES: Fitch Rates $750MM Senior Unsec. Notes 'BB/RR4' HOWARD HUGHES: Moody's Rates New $750MM Senior Unsec. Notes 'Ba3' HS MIDCO: S&P Rates Term Loan for Data Security Acquisition 'B-' J.C. PENNEY: Losses Mounted for Months Leading to Bankruptcy Filing JDUB'S BREWING: Jennis Law Firm Seeks Payment of $49,600 in Fees JDUB'S BREWING: Low Seeks $22,600 in Fees for CFO Work KDJJ ENTERPRISES: Lake & Cobb Approved as Legal Counsel LADAN INC: Unsecureds to Recover 8.75% of Allowed Claims LIBBEY GLASS: U.S. Trustee Questions Pre-Bankruptcy Bonuses LIBERTY HOLDING: Unsecureds Will Recover 10% of Claims LIQUIDMETAL TECHNOLOGIES: Incurs $643K Net Loss in Second Quarter LOGMEIN INC: S&P Assigns 'B-' ICR on Francisco Partners Acquisition LONESTAR RESOURCES: Obtains Forbearance from Lenders & Noteholders M & H PINE STRAW: Unsecureds Will Recover 9.6% of Claims MCCLATCHY CO: Investor Chatham Wins Auction for Assets MECHANICAL TECHNOLOGIES: Sept. 4 Hearing on Disclosure Statement MILANO ACQUISITION: Moody's Assigns B3 CFR, Outlook Stable MILLER ENERGY: Investors Won Certification on KPMG Audit MW HEALTHCARE: Fitch Alters Outlook on 'BB' on $46MM Bonds to Neg. NATIONSTAR MORTGAGE: S&P Rates $850MM Senior Notes 'B' NEW FORTRESS: S&P Assigns 'B+' Long-Term ICR; Outlook Stable NPC INTERNATIONAL: In Chapter 11 After Reaching Plan Deal OAKLAND PHYSICIANS: Can Clawback Transfers Made to Michael Short OAKLAND PHYSICIANS: May Recoup Payments to Singhal, Court Says OLD TIME POTTERY: Starts Chapter11 Bankruptcy Process, Closes Store PAPER STORE: Law Firm of Russell Represents Utility Companies PAPER STORE: McCarter & English Represents Utility Companies PENSKE AUTOMOTIVE: S&P Rates $550MM Senior Subordinated Notes 'B+' PG&E CORP:Provides Update on Equity Exit Financing Over-Allotment POINT BLANK: Equity Group Bid to Enforce 2nd Amended Plan Tossed PRESSER CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors PROSPECT CAPITAL: S&P Rates New $1BB in Preferred Stock 'BB' PROVIDENT OKLAHOMA: S&P Cuts 2017 A-B Revenue Bond Rating to 'D' PRYSM INC: Case Summary & 20 Largest Unsecured Creditors QUORUM HEALTH: Emerges from Chapter 11 Bankruptcy REDFISH COMMONS: Voluntary Chapter 11 Case Summary ROCKPORT DEVELOPMENT: Seeks Approval to Hire Real Estate Agents SEARS HOLDINGS: Closes Rockaway Townsquare Mall, NJ Location SENSATA TECHNOLOGIES: S&P Affirms 'BB+' ICR; Outlook Negative SERVICE CORP: S&P Rates New $850MM Senior Unsecured Notes 'BB' SHAE MANAGEMENT: Unsecureds Will Get Nothing in Plan SIMBECK INC: Has Until Sept. 28 to File Disclosures and Plan SOAPTREE HOLDINGS: Unsecureds to Get Payment of 2% of Claims SPIRIT AEROSYSTEMS: S&P Lowers ICR to 'B' on Amended Covenants SPRINGFIELD HOSPITAL: Taps Ankura to Conduct Asset Valuation STL HOLDING: S&P Assigns 'B' Issuer Credit Rating; Outlook Stable STORMBREAK RANCH: USA Objects to Disclosure Statement STURDIVANT TAYLOR: Asks for 60-Day Extension of Plan Deadline SUPERIOR AIR: JetSuiteX to Get Ownership in Committee-Backed Plan TAILORED BRANDS: Porter, Gibson Dunn Update on Term Lender Group TAILORED BRANDS: S&P Cuts Debt Rating to 'D' on Chapter 11 Filing TRIVASCULAR SALES: Seeks to Hire Jefferies LLC as Investment Banker TUTOR PERINI: Fitch Rates New Secured Term Loan B 'BB+' TUTOR PERINI: Moody's Alters Outlook on B2 CFR to Stable UNIQUE TOOL: Aug. 11 Hearing on Disclosure Statement UNIT CORPORATION: Unsecureds to Recover 4% to 9% in Plan VERITAS HOLDINGS: S&P Assigns 'B' Rating to New Term Loans VERNON 4540: Case Summary & 12 Largest Unsecured Creditors VISTEON CORP: S&P Affirms 'BB-' ICR; Rating Off Watch Negative WATKINS NURSERIES: Seeks to Hire Ritchie Bros. as Auctioneer WC 3RD AND CONGRESS: Case Summary & 7 Unsecured Creditors WHITING PETROLEUM: Responds to Disclosure Objections WHITING PETROLEUM: Senior Noteholders Defend Plan WHITING PETROLEUM: Unsecureds Projected Recovery Under Plan at 39% XEROX HOLDINGS: S&P Downgrades Issuer Credit Rating to 'BB' XEROX HOLDINGS: S&P Rates Senior Unsecured Note Issuance 'BB' ZATO INVESTMENTS: Unsecureds Get 100% of Allowed Claims [*] Confusion MOunts on Bankruptcy Debtor's Access to PPP [*] Increasing Bankruptcies & Retail Closures Imperils Malls [^] BOOK REVIEW: The Rise and Fall of the Conglomerate Kings ********* 4-S RANCH: US Trustee Objects to Disclosure Statement ----------------------------------------------------- Tracy Hope Davis, United States Trustee for Region 17, filed an objection to approval of the 4-S Ranch Partners, LLC's Disclosure Statement for its Plan of Reorganization. The U.S. Trustee asserts that the Disclosure Statement's liquidation analysis is incomplete, because it does not address the impact of the Debtor's stored water inventory and equipment assets or Mr. Sloan's status as a co-debtor. The U.S. Trustee points out that the Disclosure Statement does not provide adequate information about the procedure for payment of quarterly fees. About 4-S Ranch Partners 4-S Ranch Partners, LLC, is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). 4-S Ranch Partners filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 20-10800) on March 2, 2020. The petition was signed by Stephen W. Sloan, managing member. At the time of filing, the Debtor was estimated to have $500 million to $1 billion in assets and $50 million to $100 million in liabilities. The case is assigned to Judge Rene Lastreto II. Reno F.R. Fernandez III, Esq., at MACDONALD FERNANDEZ LLP, represents the Debtor. ABR BUILDERS: Court Confirms Reorganization Plan ------------------------------------------------ The Court has entered findings of fact, conclusions of law and order confirming the ABR Builders LLC's Fourth Amended Plan of Reorganization. As evidenced by the Certification of Ballots filed by the Debtor on May 22, 2020 and as supplemented at the Confirmation Hearing, the Debtor has certified that it received the requisite acceptances both in number and amount from certain Classes of Creditors. Ballots were transmitted to Holders of Claims in all Classes (the "Voting Classes") of the Plan in accordance with the Disclosure Statement Order and the Plan. As of the date of the Confirmation of Ballots, §§Creditors entitled to vote to accept or reject the Plan voted as stated in the Confirmation of Ballots. The Certification of Ballots (Docket No. 114) states that impaired Classes 1, 2, 4 and 5 voted to accept the Plan and Class 4 votes, which originally voted to reject the Plan, have either changed their vote or withdrawn their vote against the Plan. At least two-thirds in dollar amount and more than one-half in number of the Holders of Claims inVoting Classes 1, 2, 4 and 5 (100% of the interests), who voted on the Plan, voted to accept the Plan. At least one impaired class of claims for the Debtor voted to accept the Plan. The Plan is modified to include the following provisions:a. Article III – Paragraph entitled "Class 5" is hereby modified to delete the provisions that "the ownership Interest (the Principals) will be entitled to the releases provided for in Par. 18.5 of the Plan if the ownership makes all of the required payments and such payments are distributed to creditors whether or not the Plan is finally consummated". Article XVIII – Paragraph 18.5, providing for "third-party releases" which sought to release any claims by any party against Boleslav Ryzinski and Lukasz Macniak is hereby modified to delete the entire paragraph. Article IX providing for Executory Contracts is modified to include at the end of the first sentence "provided that any and all contracts between the Debtor and 112th Street Partners LLC ("112th Street") will be rejected on June 29, 2020 or such other date that may be agreed to between 112th Street, in its sole discretion, and the Debtor unless 112th Street, in its sole discretion, agrees to assumption of any such contract(s) by the Debtor. The terms of the Stipulations between the Debtor and the objecting creditors attached as Exhibits A through C of the Declaration of Leo Fox, Esq. dated June 12, 2020 [Docket No. 144] and the Stipulation between the Debtor and Clarkson Recovery dated June 15, 2020 (Docket No. 150) have been previously approved at this Hearing and incorporated herein by reference for all purposes and shall control over any contradictory provisions in the Plan and the Confirmation Order. The Plan, including the Exhibits to the Amended Disclosure Statement, which shall be deemed incorporated by reference in the Plan, shall be, and hereby is, approved and confirmed, having met the requirements of Sec. 1129 of the Bankruptcy Code. The Plan shall not become effective unless and until the conditions of the Effective Date set forth in the Plan and in this Confirmation Order have been satisfied. The Confirmation Date shall not take place before June 29, 2020. The Effective Date shall be 30 days after the Confirmation Date. Attorney for the Debtor: Leo Fox, Esq. 630 Third Avenue - 18th Floor New York, New York 10017 Tel: (212) 867-959 About ABR Builders ABR Builders -- http://www.abrbuilders.com/-- is a general contractor serving New York City and the adjoining areas. Since its founding in 1995, the Company has constructed high-end residential houses and commercial projects such as private medical clinics. ABR manufactures all custom architectural, structural, and interior components through its in-house resources. At the time of filing, the estimated assets and debts are $1 million to $10 million. ABR Builders LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-11041) on April 4, 2019. The Debtor was estimated to have $1 million to $10 million in assets and liabilities as of the bankruptcy filing. Leo Fox, Esq., in New York, serves as counsel to the Debtor. ACADIAN CYPRESS: Aug. 13 Hearing on Disclosure Statement -------------------------------------------------------- The hearing to consider approval of the disclosure statement of Acadian Cypress & Hardwoods, Inc. will be held before Jerry A. Brown, Bankruptcy Judge, on Aug. 13, 2020 AT 3:00 P.M. Central Time to be heard telephonically which is consistent with the adopted emergency Court protocols in place using: Dialin-Telephone Number: 888-684-8852 and Access Code: 7058793. Aug. 6, 2020 is fixed as the last day for filing written objections to the disclosure statement. Aug. 6, 2020 is fixed as the last day to file Proof of Claims in this proceeding. No later than July 9, 2020 the disclosure statement and the plan of reorganization and a copy of this Order and Notice of Hearing must be transmitted by the debtor’s counsel in accordance with Federal Rule of Bankruptcy Procedure 3017(a). Counsel for the Debtor: Douglas S. Draper Heller, Draper, Patrick, Horn & Manthey, LLC 650 Poydras Street, Suite 2500 New Orleans, LA 70130-6103 Tel: (504) 299-3300 About Acadian Cypress Acadian Cypress & Hardwoods, Inc. -- http://www.acadianhardwoods.net/-- manufactures lumber, plywood, siding, shingles, flooring, fencing and molding profiles. Acadian Cypress sought Chapter 11 protection (Bankr. E.D. La. Case No. 19-12205) on April 15, 2019. In the petition signed by Frank Vallot, president, the Debtor was estimated to have assets and liabilities ranging from $1 million to $10 million. Judge Jerry A. Brown oversees the case. The Debtor tapped Heller, Draper, Patrick, Horn & Manthey, LLC as its legal counsel, and Raizner Slania LLP as its special counsel. ALTHAUS FAMILY: Aug. 11 Hearing on Disclosure Statement ------------------------------------------------------- Judge Mary Ann Whipple has ordered that the hearing to consider the approval of the Disclosure Statement of Althaus Family Investors Ltd., will be held at Courtroom No. 2, Room 103, United States Courthouse, 1716 Spielbusch Avenue, Toledo, Ohio, on August 11, 2020, at 9:30 a.m. August 3, 2020, is fixed as the last day for filing with the court and serving written objections to the disclosure statement. About Althaus Family Investors Althaus Family Investors Ltd., filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ohio Case No. 19-32357) on July 26, 2019, estimating under $1 million in both assets and liabilities. The Debtor is represented by Steven L. Diller, Esq. at Diller and Rice, LLC. AMC ENTERTAINMENT: S&P Lowers ICR to 'SD' on Distressed Exchange ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on AMC Entertainment Holdings Inc. to 'SD' (selective default) from 'CC' and its issue-level rating on its subordinated notes to 'D' from 'C'. S&P assigned its 'B-' issue-level and '2' recovery rating to the company's new $200 million first-lien notes. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%; rounded estimate: 75%) recovery in the event of a payment default. At the same time, S&P assigned its 'CCC-' issue-level and '6' recovery rating to the company's new $1.46 billion second-lien secured exchange notes. The '6' recovery rating indicates S&P's expectation for modest (0%-10%; rounded estimate: 0%) recovery in the event of a payment default. "The issue-level ratings are based on our expectation that we will raise the issuer credit rating on AMC to 'CCC+' in the next few days. We will also be placing all of our ratings on CreditWatch with negative implications to reflect the uncertainty related to the company's reopening plans amid the coronavirus pandemic," S&P said. The downgrade follows the completion of AMC's exchange offer, under which it offered its subordinated lenders a range of roughly $705-$800 of new second-lien secured notes due 2026 for every $1,000 of par value if the lender also participated in a new issuance of $200 million first-lien notes due 2026. If consenting lenders did not elect to participate in the new issuance, they received roughly $650 for every $1,000 of par value. They also offered a group of lenders 5 million shares of class A common stock and a 2% arranger premium in return for backstopping incremental first-lien debt. To complete the exchange, the company is issuing $1.46 billion of new second-lien secured notes due 2026, and S&P estimates that lenders are receiving roughly 70%-75% of par value. Because of this, S&P views the transaction as a distressed exchange and tantamount to a default on the subordinated notes. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety AMERICORE HOLDINGS: Trustee Objects to Third Friday DIsclosures --------------------------------------------------------------- Americore Holdings, LLC, and its affiliated debtors, through Chapter 11 Trustee Carol L. Fox, joins in the Official Committee of Unsecured Creditors' objection to the Third Friday Return Fund, LLP's Ex Parte Motion to (1) Conditionally Approve Disclosure Statement and (2) Combine Final Hearing on Approval of Disclosure Statement with Hearing on Confirmation of the Plan. The Trustee agrees no good cause has been shown to bypass the standard disclosure statement consideration hearing process and the proposed disclosure statement fails to provide adequate information as required by 11 U.S.C. Sec. 1125(a). Counsel for the Chapter 11 Trustee: Jimmy D. Parrish Baker & Hostetler LLP Post Office Box 112 Orlando, Florida 32802-0112 Telephone: 407-649-4000 Facsimile: 407-841-0168 E-mail: jparrish@bakerlaw.com About Americore Holdings Americore Holdings, LLC and its affiliates, including Americore Health LLC, own and operate the Ellwood City Medical Center in Pennsylvania, Southeastern Kentucky Medical Center (formerly Pineville Community Hospital), Izard County Medical Center in Arkansas; and St. Alexius Hospital in St. Louis. Americore Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No.19-61608) on Dec. 31, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of less than $50,000. Judge Gregory R. Schaaf oversees the case. Bingham Greenebaum Doll, LLP is the Debtor's legal counsel. Carol A. Fox was appointed as the Debtors' Chapter 11 trustee. The trustee is represented by Baker & Hostetler LLP. ANEW YOU MEDICAL: Unsecureds Will be Paid $50,000 Over 60 Months ---------------------------------------------------------------- Margaret Sheryl Wehner and Anew You Medical Weight Loss and Spa, PLLC, submitted a Plan and a Disclosure Statement. Sherry is a licensed physician. and is the sole owner of Anew. She also has a 25% membership interest in 1920 Woodlawn Partners, LLC, which owns certain real property in San Antonio on which several non-profit businesses operate. The Debtor will pay its administrative costs in full within 30 days of the Effective Date or by such other mutually agreeable terms as the parties may agree. Class 4 Ascentium Capital, LLC, is impaired. Ascentium has a secured claim in the amount of $45,000 and an unsecured claim in the amount of $146,214. The secured portion will be paid in monthly payments of $975 with interest at 5% per annum in full satisfaction of Ascentium's secured claim. The balance will be treated as a Class 9 creditor. Ascentium will retain its lien on its collateral until the secured portion is paid in full. Class 6 Balboa Capital, which is impaired, has a disputed claim. Balboa Capital has filed a claim (No. 11) in both bankruptcies in the amount of $133,707. Of this amount, Balboa asserts that 61,000 is secured and the balance is unsecured. The Debtor proposes to pay S15,000 over a period of two years in equal monthly payments of $652 which includes interest at 4% per annum in full satisfaction of both Balboa's secured and unsecured claim. Class 7 Great American Finance Serv. This class will be impaired and disputed. Great American Financial Service has filed a claim (No. 9) in both bankruptcies in the amount of $67,468. Of this amount, Great American asserts that S30,000 is secured and the balance is unsecured. Debtor proposes to pay $5,000 over a period of two years in equal monthly payments of $218 which includes interest at 4% per annum in full satisfaction of both Great American's secured and unsecured claim. Class 8 Frost Bank will be impaired and disputed as to whether the debt is non-dischargeable. Frost Bank has filed a claim (No. 10) in both bankruptcies in the amount of $1,154,112. The Debtor proposes to pay $500,000 over a period of six years in equal monthly payments of $7,000 in full satisfaction of both Frost secured and unsecured claim. Class 9 General Unsecured Claims are impaired. The aggregate amount of liquidated General Unsecured Claims, derived from the Debtor's Schedule F and currently filed claims, is estimated at $491,000. The Debtor will pay Class 9 the sum of $50,000 over a period of 60 months from and after the Effective Date, together with interest at 1.5%. The first payment will be made the first day of the second full month following the Effective Date. The estimated payment is $866. Upon satisfactory completion of this payment schedule, the Debtor will not be under any further or continuing obligation to creditors in this class, and the respective claims of each shall be deemed satisfied and extinguished. Class 11 - Equity Security. Margaret Sherry Wehner will retain her interest in Anew and the Woodlawn Partners, Ltd. During the post-period, Anew has continued to operate its business. In Addition, the bankruptcies of Anew and Sherry are being jointly administered. Sherry sold her homestead. Debtor has been affected by the COVID-19 pandemic as patients have not decided and/or were prohibited from doing elective surgeries. Those surgeries are slowly returning as the homestay at home rules are relaxed. The Deadline to file a written objection is July 27, 2020 by 5:00 p.m. CST. The Court will conduct a hearing via a telephone conference call on Aug. 5, 2020 at 9:00 a.m. The conference call number is 877.848.7030, Access Code 4494028#. The deadline for receipt of your ballot is July 27, 2020, by 5:00 p.m CST. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/y7hcgxzq from PacerMonitor.com at no charge. Attorney for the Debtors: DEAN W. GREER 2929 Mossrock, Suite 117 San Antonio, Texas 78230 Telephone 210.342.7100 Facsimile No. 210.342.3633 About Anew You Medical Weight Loss and Spa LLC Anew You Medical Weight Loss and Spa PLLC is a non-public corporation founded in 2016 in the medical wellness business. It offers a variety of services, including weight loss, IV therapy, laser hair removal, skin treatments, coolsculpting, hormone therapy, and hair rejuvenation. Anew You Medical Weight Loss and Spa sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.19-51171) on May 15, 2019. The case is jointly administered with the Chapter 11 case of Margaret Sheryl Wehner, the Debtor's managing member (Bankr. W.D. Tex. Case No. 19-51172). At the time of the filing, Anew was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The cases are assigned to Judge Craig A. Gargotta. The Law Offices of Dean W. Greer is Anew's legal counsel. APOLLO ENDOSURGERY: Incurs $6.25-Mil. Net Loss in Second Quarter ---------------------------------------------------------------- Apollo Endosurgery, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q, reporting a net loss of $6.25 million on $5.64 million of revenues for the three months ended June 30, 2020, compared to a net loss of $8.77 million on $14.25 million of revenues for the three months ended June 30, 2019. Todd Newton, CEO of Apollo, said, "The COVID-19 pandemic had a significant impact on sales in the second quarter, but after the initial slowdown in April we have been on a recovery path. This recovery was particularly visible in the United States where June 2020 product sales were close to 90% of our June 2019 product sales level. In July, the recovery has continued with sales in our direct markets exceeding sales from July of last year. "We took immediate actions to preserve the interests of our shareholders by aggressively reducing cash expenditures at the beginning of the second quarter, while still pursuing our most important development programs such as the X-Tack program. X-Tack is designed to enhance an endoscopist's ability to address the closure challenges of large or irregularly shaped defects, whether encountered in the upper or lower GI tract, and meaningfully expands our addressable market. Additionally during the quarter, the Mayo Clinic published results from an IDE study using Orbera for the treatment of NASH. The Mayo study reported 65% of patients achieved resolution of NASH at 6 months. Lastly, the MERIT study continues to progress although planned activities at certain of the study sites were delayed due to COVID-19 factors. We believe that these and other efforts will open new avenues for revenue growth in the future." Stefanie Cavanaugh, Apollo's chief financial officer, said, "We set an aggressive goal to match the anticipated reduction in revenue this quarter with reduced operating expenses as part of our COVID-19 response plan and keep cash use at a level consistent with pre-pandemic quarters. We met this goal. Also, we further reduced our market risk by concurrently raising $25 million of equity and securing beneficial covenant amendments from our lender. We will remain diligent to calibrate our cash expenditures with the pace of our business recovery." For the six months ended June 30, 2020, the Company reported a net loss of $16.51 million on $16.36 million of revenues compared to a net lsos of $11.58 million on $27.46 million of revenues for the six months ended June 30, 2019. As of June 30, 2020, the Company had $60.09 million in total assets, $70.67 million in total liabilities, and a total stockholders' deficit of $10.58 million. The Company has experienced operating losses since inception and expects its negative cash flows from operating activities to continue. To date, the Company has funded its operating losses through equity offerings and the issuance of debt instruments. The Company's ability to fund operations and meet debt covenant requirements will depend on its level of future revenue and operating cash flow and its ability to access additional funding through either equity offerings, issuances of debt instruments or both. In addition, the reduction in sales due to the COVID-19 pandemic and uncertainty over how long the COVID-19 impact on the Company's business will last has placed additional demands on the Company's capital resources. As a result of these factors, at Dec. 31, 2019 and March 31, 2020, substantial doubt existed about the Company's ability to continue as a going concern and the auditor's opinion on the Company's audited financial statements for the year ended Dec. 31, 2019 includes an explanatory paragraph stating that losses and negative cash flows from operations and uncertainty in generating sufficient cash to meet operations raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://is.gd/lED1zV About Apollo Endosurgery Apollo Endosurgery, Inc. -- http://www.apolloendo.com-- is a medical technology company focused on less invasive therapies to treat various gastrointestinal conditions, ranging from gastrointestinal complications to the treatment of obesity. Apollo's device-based therapies are an alternative to invasive surgical procedures, thus lowering complication rates and reducing total healthcare costs. Apollo's products are offered in over 75 countrie and include the OverStitch Endoscopic Suturing System, the OverStitch Sx Endoscopic Suturing System, and the ORBERA Intragastric Balloon. Apollo Endosurgery incurred a net loss of $27.43 million in 2019 compared to a net loss of $45.78 million in 2018. As of March 31, 2020, the Company had $66.69 million in total assets, $72.15 million in total liabilities, and a total stockholders' deficit of $5.45 million. KPMG LLP, in Austin, Texas, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 26, 2020 citing that the Company has suffered recurring losses from operations, cash flow deficits and debt covenant violations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. ARCHDIOCESE OF SANTA FE: Seeks Approval to Hire Real Estate Brokers ------------------------------------------------------------------- Roman Catholic Church of the Archdiocese of Santa Fe seeks approval from the U.S. Bankruptcy Court for the District of New Mexico to employ Santa Fe Properties to market for sale or lease its property located at 49/50 Mt. Carmel Road, in Santa Fe, N.M. The firm's services will be provided mainly by real estate brokers, Philip Gudwin and Rusty Wafer, who will receive a 6 percent sale commission or 6 percent lease commission. In addition to the commission, Debtor has agreed to pay the brokers applicable gross receipts tax. Santa Fe Properties is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Philip Gudwin Rusty Wafer Santa Fe Properties 1000 Paseo de Peralta Santa Fe, New Mexico 87501 Office: 505.982.4466 Cell: 505.984.7343 / 505.690.1919 Fax: 505.984.1003 Email Philip.Gudwin@sfprops.com Rusty.Wafer@sfprops.com About Roman Catholic Church of the Archdiocese of Santa Fe The Roman Catholic Church of the Archdiocese of Santa Fe is an ecclesiastical territory or diocese of the southwestern region of the United States in the state of New Mexico. At present, the Archdiocese of Santa Fe covers an area of 61,142 square miles. There are 93 parish seats and 226 active missions throughout this area. For more information, visit https://www.archdiosf.org/. The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr. D. N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse claims. It reported total assets of $49,184,579 and total liabilities of $3,700,000 as of the bankruptcy filing. Judge David T. Thuma oversees the case. The archdiocese tapped Elsaesser Anderson, Chtd. and Walker & Associates, P.C., as bankruptcy counsel; Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A as special counsel; and REDW, LLC as accountant. ASCENA RETAIL: Gets Approval to Hire Prime Clerk as Claims Agent ---------------------------------------------------------------- Ascena Retail Group, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Prime Clerk LLC as their claims and noticing agent. The firm will oversee the distribution of notices and will assist in the maintenance, processing and docketing of proofs of claim filed in Debtors' Chapter 11 cases. Debtors provided Prime Clerk an advance in the amount of $100,000 prior to their bankruptcy filing. Benjamin Steele, vice president of Prime Clerk, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Prime Clerk can be reached through: Benjamin J. Steele Prime Clerk LLC 830 Third Avenue, 9th Floor New York, NY 10022 Direct: (212) 257-5490 Mobile: 646-240-7821 Email: bsteele@primeclerk.com About Ascena Retail Group Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Visit http://www.ascenaretail.comfor more information. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. On July 23, 2020, Ascena Retail Group and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities. The Hon. Kevin R. Huennekens is the case judge. Debtors have tapped Kirkland & Ellis LLP and Cooley LLP as bankruptcy counsel, Guggenheim Securities, LLC as financial Advisor, and Alvarez and Marsal North America, LLC as restructuring advisor. Prime Clerk, LLC is the claims agent. AUXILIUS HEAVY: KC Cohen Approved as Legal Counsel -------------------------------------------------- Auxilius Heavy Industries, LLC won approval from the United States Bankruptcy Court for the Southern District of Indiana to hire KC Cohen, Lawyer PC, as their legal counsel. The Debtor requires Cohen to: (a) give it advice with respect to its duties, powers, and responsibilities in this case; (b) investigate and pursue any actions on behalf of the estate in order to recover assets for or best enable this estate to reorganize fairly; (c) represent the Debtor in these proceedings in an effort to maximize the value of the assets available, and pursue confirmation of a successful Plan of Reorganization; (d) perform such other legal services as may be required and in the interest of the estate. Prior to filing the case, the Debtor and the firm entered into an Engagement Agreement that defines certain terms and conditions for the provision of professional services by the firm to the Debtor. The Engagement Agreement calls for the Debtor to pay the firm, subject to appropriate approval of fees or allowance of draws by the Court, on an hourly basis at the rate of $350 per hour. Cohen attests it is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Cohen disclosed receiving payments of $2,717 from which a pre-petition invoice of $2,502.50 representing services rendered to prepare the case for filing was paid to the firm leaving a balance on hand of $215.50, which remains in its trust account. The firm may be reached through: KC Cohen, Esq. KC COHEN, LAWYER, PC 151 N. Delaware St., Ste. 1106 Indianapolis, IN 46204-2573 Tel: 317-715-1845 E-mail: kc@smallbusiness11.com About Auxilius Heavy Based in Carmel, Indiana, Auxilius Heavy Industries, LLC is a privately held company that operates in the wind industry. The company offers wind turbine services, including blade inspections and repairs, end of warranty inspections, turbine cleaning, and supplemental manning. The company serves wind farms located in the following states: California, Colorado, Illinois, Indiana, Iowa, Michigan, Nebraska, New Mexico, Texas, and Pennsylvania. It also has offices located in Los Angeles, CA; Bradfod, Illinois, and Fowler, Indiana. The company filed for chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 20-01963) on March 26, 2020, with total assets of $639,911 and total liabilities of $2,025,877. The petition was signed by Michael Kidwel, president. The Hon. James M. Carr presides over the case. The Debtor hired KC Cohen, Lawyer, PC, as counsel. AUXILIUS HEAVY: Sanders Tax Service Approved as Accountant ---------------------------------------------------------- Auxilius Heavy Industries, LLC has won approval from the United States Bankruptcy Court for the Southern District of Indiana to hire Sanders Tax Service as its accountant. The Debtor needs the firm to: (a) give advice with respect to State and Federal tax return preparation and filing, and execute such work as is incidental to such filing; and (b) continue to provide bookkeeping and reporting assistance. The Accountant has prepared tax returns and related filings for many years and will continue to do so on behalf of the estate pursuant to the terms of an Agreement for Tax and Accounting Services. Tax return preparation costs $1,850, in addition to the flat fee of $600 per month for related advisory services. The firm's professionals who will render service to the Debtor and their hourly rates are: Scott Ruppel, EA $85/hour Marie Ruppel (bookkeeper) $45/hour Josh Ruppel(bookkeeper) $45/hour Brandon Ruppel (Accountant) $65/hour Sanders Tax Service is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, the firm attests. About Auxilius Heavy Based in Carmel, Indiana, Auxilius Heavy Industries, LLC is a privately held company that operates in the wind industry. The company offers wind turbine services, including blade inspections and repairs, end of warranty inspections, turbine cleaning, and supplemental manning. The company serves wind farms located in the following states: California, Colorado, Illinois, Indiana, Iowa, Michigan, Nebraska, New Mexico, Texas, and Pennsylvania. It also has offices located in Los Angeles, CA; Bradfod, Illinois, and Fowler, Indiana. The company filed for chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 20-01963) on March 26, 2020, with total assets of $639,911 and total liabilities of $2,025,877. The petition was signed by Michael Kidwel, president. The Hon. James M. Carr presides over the case. The Debtor hired KC Cohen, Lawyer, PC, as counsel. AVIS BUDGET: S&P Rates New $350MM Senior Unsecured Notes 'B-' ------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level and '6' recovery ratings to Avis Budget Car Rental LLC's and Avis Budget Finance Inc.'s proposed $350 million senior unsecured notes due 2027 and placed the issue-level rating on CreditWatch with negative implications. The notes are guaranteed by parent Avis Budget Group Inc. The '6' recovery rating indicates its expectation that lenders would receive negligible (0%-10%; rounded estimate: 5%) recovery in the event of a payment default. Proceeds will be used to redeem the outstanding $100 million of the company's 5.5% senior unsecured notes due 2023 and for general corporate purposes. S&P also lowered its issue-level rating on the company's existing senior unsecured debt to 'B-' from 'B'. The rounded recovery estimate is 5% (previously 10%), reflecting the higher amount of unsecured debt in the capital structure. S&P's ratings on Avis Budget remain on CreditWatch, where it placed them with negative implications on March 16, 2020, due to the steep decline in airport travel related to the coronavirus outbreak. Avis Budget generates most of its revenues at airports globally and thus relies on airline passenger travel. To offset the steep decline in air travel and demand for its vehicles, the company has reduced costs and its fleet by canceling orders for new vehicles, and it is attempting to sell vehicles. However, S&P expects the company to be hurt by weak, albeit improving, used car prices, resulting in higher vehicle costs (weak car prices are reflected in higher depreciation expense). Airline passenger traffic has started recovering, but from very low levels and with recent setbacks as the virus is rebounding in parts of the U.S. Still, S&P sees a slow, uneven recovery continuing into 2021. The CreditWatch resolution will focus on challenges the car rental industry faces, including levels of capital spending, the impact of used car prices on asset sales, wider access to the asset-backed market, and liquidity. S&P would likely lower the rating on Avis Budget if it believes its operations, credit metrics, and liquidity will take longer to recover than it currently expects. Issue Ratings--Recovery Analysis Key analytical factors -- In its simulated default scenario, S&P assumes a severe disruption in the travel industry, causing a decrease in revenue from car rentals and leading to default in 2024. S&P expects that the collateralized fleet funding programs would remain intact and that the outstanding letters of credit under the revolving credit facility would not be drawn. -- S&P believes that if Avis Budget defaulted, its extensive network of rental locations and the public's need to rent vehicles would keep its business model viable. As a result, lenders would achieve the greatest recovery value through reorganization rather than liquidation. -- S&P used a discrete asset valuation (DAV) approach to estimate enterprise valuation at emergence because nearly all assets of the company are pledged to specific debt facilities. To calculate the DAV, the rating agency applies a 90% realization rate to the net value of Avis' vehicles and a lower realization of 40% on net property and equipment. The 90% realization rate, which is slightly higher than the 85% assumed in S&P's last review, reflects the used car market's improvement from its trough. -- S&P assumes if Avis Budget were to default, it would preserve most of its highly desirable on-airport locations and therefore would only reject a small portion (10%) of its operating leases. Simplified waterfall -- Enterprise value (net of 3% administrative expenses): $12.2 billion -- Valuation split (domestic/international): 75%/25% -- Priority claims (including domestic debt under vehicle program): $7.67 billion -- Total collateral value available to nonvehicle secured debt: $1.72 billion -- Secured first-lien debt claims (revolver, term loan, and secured notes): $2.50 billion -- Recovery range: 70%-90%; rounded estimate: 70% -- Total value available to unsecured notes: $296 million -- Total unsecured debt claims/pari passu (deficiency) claims/nondebt unsecured claims (lease rejection): $2.58 billion/$782 million/$54 million -- Recovery range: 0%-10%; rounded estimate: 5% Note: All debt amounts include six months of prepetition interest. Collateral value equals asset pledge from obligors after priority claims plus equity pledge from nonobligors after nonobligor debt. Other valuation assumptions include LIBOR of 250 basis points at default. Ratings List Avis Budget Group Inc. Avis Budget Car Rental LLC Issuer Credit Rating B+/Watch Neg/-- B+/Watch Neg/-- New Rating Avis Budget Car Rental LLC Avis Budget Finance Inc Senior Unsecured US$350 mil 5.75% sr nts due 07/15/2027 B- /Watch Neg Recovery Rating 6(5%) Ratings Lowered; Recovery Ratings Revised To From Avis Budget Car Rental LLC Avis Budget Finance Inc Avis Budget Finance plc Senior Unsecured B- /Watch Neg B /Watch Neg Recovery Rating 6(5%) 5(10%) B.R. ELLIS TIMBER: Unsecureds Will be Paid $12,000 on Prorata Basis ------------------------------------------------------------------- B.R. Ellis Timber, Inc., submitted a First Amended Plan of Reorganization. The Debtor's financial projections show that it is expected to generate average gross revenue of approximately $120,000 per month, incur average operating expenses (exclusive of payments due under the Plan on account of restructured debt) of approximately $95,561 per month, and distribute under the Plan on account of Priority Claims and Secured Claims an average of approximately $24,181.96 per month during the 3-year period beginning on the date on which the first distribution is due under the Plan. Class 1 Administrative Claims, consisting of those costs and expenses approved by the Court by a Final Order pursuant to Sec. 327, 330, 331, and 503 of the Code, will be paid as follows: * If the Plan is confirmed consensually under Sec. 1191(a): Administrative Claims will be paid in cash and in full including accruals to date of payment within 10 days from the Effective Date of the Plan. * If the Plan is confirmed under Sec. 1191(b) without consent of all Impaired Classes: Administrative Claims may be paid with interest of 8% per annum over 24 months in 24 equal monthly payments. Class 3 Secured Claim of BMO Harris Bank N.A. is impaired. The claim of BMOH in the amount of $213,265 will be entitled to receive all insurance proceeds plus any salvage value (indicated by Athens Administrators to total $108,175) from the destruction of the 2018 International HX520 Tractor - VIN: 3HSDPAPT7JN439571 which was totaled prior to the Petition Date. In addition to receipt of the insurance proceeds above, BMOH will be allowed a secured claim in the amount of $47,993 to be paid through the plan, which claim shall be and remain secured by the Debtor's 2018 International HX520 tractor VIN 3HSDPAPTXJN501612, and which claim shall accrue interest at the rate of 5.25% per annum from the Effective Date of the Plan and be paid by means of 60 monthly payments in the amount of $911.20 each to be paid on a monthly basis for a total of 60 months. In addition to the Secured Claim of BMOH, the balance of BHOH's total claim of $213,265, after the application of the insurance and any salvage sales proceeds paid shall be allowed as a General Unsecured Claim to be included and treated in the class of General Unsecured Claims. Class 4 Secured Claim of Commercial Credit Group, Inc., is impaired. CCG's claims will be treated as follows: * Note & Security Agreement 1C06151701 (collateral includes Eager Beaver lowboy and other collateral): CCG's claim will be allowed in the amount of $157,216.96 (inclusive of all principal, interest, costs, and fees (but exclusive of attorney's fees)), which will be treated as a fully secured claim to be paid with interest of 7.5% over 54 months in 54 equal monthly payments in the amount of $3,431 per month beginning with the May 5, 2020 payment. * Note & Security Agreement 1C12201801 (collateral includes Cat loader and other collateral): CCG's claim will be allowed in the amount of $111,504.64 (inclusive of all principal, interest, costs, and fees (but exclusive of attorney’s fees)), which will be treated as a fully secured claim to be paid with interest of 7.5% over 36 months in 36 equal monthly payments in the amount of $3,460 per month beginning with the May 5, 2020 payment. * Note & Security Agreement 1C02051901 (collateral includes International truck and other collateral): CCG's claim will be allowed in the amount of $125,598+ (inclusive of all principal, interest, costs, and fees (but exclusive of attorney's fees)), which will be treated as a fully secured claim to be paid with interest of 7.5% over 54 months in 54 equal monthly payments in the amount of $2,741 per month beginning with the May 5, 2020 payment. Class 5 Secured Claims of First-Citizens Bank & Trust Company is impaired. The Master Lease Agreement between the Debtor and FCB will be treated as a security agreement and not as a true lease. The trailers securing this claim and FCB's secured claim will be valued at $25,744. FCB's secured claim of $25,744 will be paid in full with interest at 5.25% per annum in 60 equal monthly payments of $489 each. Class 6 Secured Claim of Americredit Financial Services, Inc. d/b/a GM Financial is impaired. The 2017 GMC Sierra securing the claim will be valued at $28,000, and the total of the remaining payments due on the Optional GAP Contract on the vehicle is $609 -- therefore Americredit/GM's Secured Claim shall be valued at $28,609. Americredit/GM's Secured Claim of $28,609 will be paid in full with interest at 5.25% per annum in 60 equal monthly payments of $543 each. Class 7 Secured Claim of John Deere Construction & Forestry Company is impaired. This class consists of the Secured Claim of John Deere Construction & Forestry Company based on four separate contracts and secured by multiple specific items of collateral including the following: Contract 1, Contract 2, and Contract 3: The Contract 1 Collateral will be valued at $110,000, the Contract 2 Collateral will be valued at $130,000, and the Contract 3 Collateral will be valued at $50,000, such that on account of Contact 1, Contract 2, and Contract 3, the John Deere Claim eill be allowed as a Secured Claim in the amount of $290,000 as of the Petition Date. Interest at the rate of 5.25% per annum will accrue on that amount of the Secured Claim from and after the entry of the Consent Order entered by the Court on May 21, 2020, which Secured Claim will be paid by means of monthly payments in the aggregate of $5,513 to be paid on a monthly basis for a total of 60 months. Contract 4: On account of Contact 4, the Debtor will surrender and make the Contract 4 Collateral available to John Deere within 10 days of entry of the Consent Order entered by the Court on May 21, 2020. Following its surrender, the Contract 4 Collateral shall be sold by John Deere within a reasonable time and in a commercially reasonable manner, and following its sale John Deere shall amend its Claim to reduce it by the total net sales proceeds received by John Deere on account of the Contract 4 Collateral. Deficiency Claim: The remaining balance of the John Deere Claim – consisting of the total original John Deere Claim of $1,369,008.19, less the amount of the John Deere Contract 1 – 3 Secured Claim of $290,000, less the estimated value of the Contract 4 Collateral (estimated by the Debtor to be $442,000) - shall be allowed as a General Unsecured Claim to be included and treated in the class of General Unsecured Claims. Class 9 General Unsecured Claims are impaired. The Debtor's projected disposable income of the Debtor for the 3-year period beginning on the date on which the first distribution is due under the Plan is $9,254. The Debtor proposes to pay the amount of $12,000 to this Class, which will be distributed on a pro-rata basis among the holders of the Allowed General Unsecured Claims in this class. For feasibility purposes, the Debtor estimates that payments to this class will total approximately $4,000 per month. All funds necessary for the implementation of the Plan will be obtained from funds in possession of the Debtor, generated by the business of the Debtor, derived from the liquidation of property of the estate, recovered or preserved as a result of the exercise of the Debtor's enforcement and/or avoiding powers retained and authorized under this Plan. A full-text copy of the First Amended Plan of Reorganization dated June 29, 2020, is available at https://tinyurl.com/y7slsjcd from PacerMonitor.com at no charge. Attorneys for B.R. Ellis Timber: Algernon L. Butler, III BUTLER & BUTLER, L.L.P. P.O. Box 38 Wilmington, NC 28402 Telephone: (910) 762-1908 E-mail: albutleriii@butlerbutler.com About B.R. Ellis Timber B.R. Ellis Timber, Inc., a privately held company in the logging business, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 20-00784) on Feb. 24, 2020. At the time of the filing, the Debtor disclosed $1,373,900 in assets and $2,244,568 in liabilities. Judge Stephani W. Humrickhouse oversees the case. The Debtor tapped Butler & Butler, L.L.P., as its legal counsel, and W. Greene, PLLC, as its accountant. BALTIMORE HOTEL: S&P Cuts Revenue Refunding Bond Rating to 'BB-' ---------------------------------------------------------------- S&P Global Ratings lowered the ratings on Baltimore Hotel Corp. (BHC) one notch to 'BB-' and removed them from CreditWatch, where it placed them with negative implications on March 16, 2020. BHC owns Hilton Baltimore, connected to the Baltimore Convention Center (BCC) and operated by an affiliate of Hilton Worldwide Holdings Inc. since August 2008. It is a 757-room convention center hotel in downtown Baltimore's Inner Harbor area, overlooking Oriole Park at Camden Yards and connected to BCC by a pedestrian bridge. The hotel has meeting rooms; a 37,000-square-foot ballroom; and a 567-space, four-story parking garage with two subterranean levels. The hotel's net revenues and pledged city tax revenues secure the bonds. City revenues include a $7 million annual appropriation funded through a second lien on the citywide hotel occupancy tax revenue. They also include a pledge of site-specific hotel occupancy tax revenue, which will vary based on the project's occupancy, and the tax increment financing (TIF) payment. S&P anticipates BHC's performance will be severely deteriorated this year under the rating agency's revised base case and during the path to recovery. The rating agency anticipates a DSCR well below 1x and that the project would significantly depend on its liquidity cushion to mitigate cash flow shortfalls. S&P also expects a declining tax support revenues in the short term due to the adverse impact of the COVID-19 pandemic on Baltimore's local economic conditions. As a result, S&P lowered its ratings on BHC's senior revenue refunding bonds to 'BB-' from 'BB' and removed them from CreditWatch negative. Though the project's liquidity profile demonstrates sufficiency to mitigate the cash flow shortfall in its forecast, S&P believes the relative strength and liquidity cushion to absorb further underperformance is weaker than those of other investment-grade convention center hotels in the rating agency's rated portfolio. Unprecedented market conditions lead to revised S&P Global Ratings assumptions. Since April 14, 2020, the project has been under temporary suspended operation (TSO) because of a shelter-in-place mandate in Baltimore due to the COVID-19 pandemic as well as the re-purposing of the Baltimore Convention Center as a field hospital to treat recovering COVID-19 patients. In the TSO period, the hotel is closed for all guests in order to conserve existing cash reserves by reducing the costs of operating the hotel. Nearly all conventions/events are canceled or postponed for this year. "We expect a slower and gradual recovery for hotel operations given that convention center businesses would be the last to recover, following drive-to leisure and individual business travel. We believe the recovery would highly depend on how the community would deal with COVID-19 in the next 12 months, either by the availability of a vaccine or further government mandates," S&P said. "Our updated forecast is based on the project's most recent performance and our latest corporate lodging forecast. It anticipates a 40%-50% decline in RevPAR against its 2019 level in 2020 and 20% in 2021 for the U.S. lodging market. In our view, given the nature of convention center business that drives the hotel's revenues, we expect the impact to be more severe on convention center hotels," the rating agency said. S&P's revised base case assumes nearly zero RevPAR until September 2020 and 50% lower than the 2019 level from October to December 2020. S&P bases this on its assumption that the government will loosen restrictions on indoor gathering/business-related activities early in the fourth quarter of 2020, and the recovery would not happen immediately as people may still have concern being exposed to large groups. S&P believes the shape of recovery is close to a U-shape, with a four-year recovery back to the 2019 level. S&P expects a slower recovery for convention center hotels, as smaller leisure-focused hotels or boutique hotels may recover sooner. Post-2024, S&P assumes a 2% increase year over year, consistent with its assumption pre-COVID-19. The revised downside case assumes zero RevPAR until the end of 2020, which reflects potential risks the hotel would still be under great pressure with nearly no guests or suspended the rest of the year. A possible scenario would be a sizable second wave, which could make the virus battle longer than expected and lead to more local government restrictions. S&P applies a 10% additional stress from 2021-2024 over its base case to reflect a longer U-shaped recovery, with RevPAR resurfacing to its 2019 level by 2025. On the expense side, S&P discovered hotel operating expenses become less elastic under the extreme operation environment of a material decline in RevPAR. Operating expenses are much stickier in such situations because the hotel is still responsible to pay for certain room maintenance, utility, administration, marketing, and employee salary expenses. As a result, S&P forecasts total operating expenses to be about $15 million under its base case and $12 million under its downside case in 2020, given the most severe decline on RevPAR assumed in this year. S&P's assumed fixed expenses forecast (including management fees, insurance, property tax, and furniture, fixtures and equipment (FF&E) reserve contribution) is consistent with the rating agency's assumption pre-COVID-19. In addition, S&P expects the tax support revenues are at risk given the impact of COVID-19 pandemic on Baltimore's local economy. S&P revised its annual growth rate of TIF revenue to be in line with its most recent GDP forecast from 2021-2024, and 2% from 2025 and onward in the base case. S&P applied an additional 1% lower than its base-case growth rate for the first five years in the downside case. The rating agency maintained its assumption for site-specific hotel tax revenue at around 11.7% of total room revenue, which would be impaired based on its revised base case and downside case RevPAR assumptions. S&P also maintained its assumption of $7 million annual citywide hotel tax revenue, given the relatively small proportion in the total citywide hotel tax revenue collected by Baltimore each year (around $30.7 million average for the past 10 years). The anticipated material decline of hotel performance and concern around tax support revenue weakens BHC's credit profile, though partially offset by the project's liquidity cushion. Under its base case, S&P expects the project's cash flow would dramatically decline in 2020 with a DSCR of 0.34x. The project benefits from a liquidity cushion from various accounts including cash trap funds, operating reserve account, senior and subordinated FF&E reserves, and a debt service reserve account (DSRA). As of May 31, 2020, the project's total liquidity was around $32 million, which only covers about two years of debt service. This is weaker than the liquidity at other rated convention center hotels, which cover over 4-5 years' debt service. "Under the downside case, BHC's liquidity shows resiliency throughout the recovery and beyond 2025. However, we anticipate its DSRA will be drawn in 2020 and refunded in 2023. Given its material weakened performance, partially offset by its liquidity cushion under the downside case, we believe our ratings on BHC's senior revenue refunding bonds are in line with the 'BB-' level," S&P said. Environmental, social, and governance (ESG) credit factors relevant to this credit rating change: -- Health and safety The negative outlook reflects the uncertainty of the hotel performance given the possibility of prolonged recovery from the weakening travel demand and a fundamental shift in the lodging industry with regard to the existing models of business travel and conventions, which could lead to a consistent and material decline in RevPAR beyond S&P's base-case assumption. S&P forecasts a minimum DSCR of 0.34x for the year ended in 2020. "We could lower the ratings if RevPAR declines 30% or more over our base-case assumption each year from 2020–2023, which exhausts the project's liquidity before 2023. Factors that could trigger the downgrade include a new round of government shelter-in-place mandates due to a material second wave of COVID-19 in the U.S. in 2021, a faster structural shift in the convention business model over the next two years, and a longer-than-expected economic recession post-COVID-19," S&P said. "Although unlikely until the COVID-19 situation resolves and performance substantially recovers toward 2019 level, we could revise the outlook to stable if the project's DSCR recovers to above 1x. We also could raise the ratings if the hotel's performance returns to pre-COVID-19 levels with a DSCR above 1.4x. The upgrade could happen if the speed of recovery in the convention-related travel outperforms our expectation in the next two years," the rating agency said. BEEGE HOLDING: Gets Interim Court Approval to Hire CRO ------------------------------------------------------ BeeGe Holding Corp and Beesion Technologies, LLC received interim approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Maria Yip of Yip Associates, LLC as their chief restructuring officer. The duties and powers of the CRO are as follows: (a) The CRO shall have the combined sole and absolute power and authority of the chief executive officer, the chief operating officer, chief financial officer, and the chief restructuring officer of the Debtors; (b) The CRO shall perform a financial review, of the Debtors including but not limited to a review and assessment of financial information that has been, and that will be, provided by the Debtors to its creditors, including without limitation its short and long-term projected cash flows, and shall assist the Debtors in developing, refining and implementing its business plans, and the CRO shall have the power to implement such business plans with the approval of the Debtors managers. which approval shall not be unreasonably withheld, conditioned or delayed; and (c) The CRO shall assist in the identification of cost reduction and operations improvement opportunities and the CRO shall have the power and authority to implement such cost reduction recommendations; and (d) The CRO shall assist the Debtors' managers in the identification of opportunities to generate liquidity for the Debtors, including, but not limited to, sales of inventory and other assets outside the ordinary course; and (e) The CRO shall develop possible restructuring plans or strategic alternatives for maximizing the enterprise value of the Debtors' various business lines, the CRO shall determine which plan(s) or alternatives are appropriate under the circumstances, subject to the CRO seeking the input and approval of the Debtors' managers, which decision shall be provided to the CRO within two business days, and shall not be unreasonably withheld, conditioned or delayed. The CRO shall use commercially reasonable efforts to attempt to implement such plan(s) or alternative(s); (f) The CRO shall be the Debtors' representation for all purposes in connection with any proceeding under Chapter 11 of the Bankruptcy Code. Yip Associates standard hourly rates range from $195 to $495. Partners $495 Directors $350 Managers $300 Senior Associates $245 Associates $195 Yip Associates neither represents nor holds an interest adverse to the interests of Debtors and their estates with respect to the matters on which it is to be employed, according to court filings. The CRO can be reached at: Maria M. Yip, CPA Yip Associates LLC 2 S. Biscayne Blvd, Suite 2690 Miami, FL 33131 Tel: 305-569-0550 Fax: 1-888-632-2672 About BeeGe Holding Corp BeeGe Holding Corp. and Beesion Technologies, LLC, filed its voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (S.D. Fla. Lead Case No. 20-17683) on July 15, 2020. At the time of filing, the Debtor estimated $50,000 in assets and $1,000,001 to $10 million in liabilities. Jacqueline Calderin, Esq. at Agentis PLLC represents the Debtor as counsel. BOROWIAK IGA: Aug. 12 Hearing on Disclosure Statement ----------------------------------------------------- The hearing to consider approval of the Disclosure Statement of Borowiak IGA Foodliner, Inc dba Borowiak's IGA will be held on August 12, 2020 at 09:00 AM in U.S. Bankruptcy Court, 301 W Main St, Benton, IL 62812. August 5, 2020 is fixed for filing and serving written objections to the disclosure statement. Proponent must file certificate of service within 14 days of receipt of this notice. About Borowiak Iga Foodliner Borowiak IGA Foodliner, Inc., which conducts business under the name Borowiak's IGA, is a food retailer in Southern Illinois offering canned foods and dry goods, beverages, cocktails, breads, casseroles, and other related products. Borowiak owns and operates three grocery stores located in Albion, Mt. Carmel and Carterville, Ill. Earlier in 2019, Borowiak closed its stores in Mt. Vernon, Centralia and Grayville. In late 2018, Borowiak closed one store in Lawrenceville. Visit https://www.borowiaksonline.com Borowiak sought Chapter 11 protection (Bankr. S.D. Ill. Case No. 19-40699) on Sept. 17, 2019 in Benton, Ill. In the petition signed by Trevor Borowiak, president, the Debtor disclosed $2,205,931 in assets and $9,097,877 in liabilities. Judge Laura K. Grandy oversees the case. The Debtor employed the Antonik Law Offices as its legal counsel. BRADLEY INVESTMENTS: First Home Objects to Disclosure Statement --------------------------------------------------------------- First Home Bank (objects to approval of the Disclosure Statement accompanying Plan of Reorganization of debtor Bradley Investments, Inc. According to Bank, the Disclosure Statement lacks adequate information regarding the Debtor's assets, financial condition, cash flow and liabilities. The Bank asserts that the Disclosure Statement does not state whether the Debtor's business operation and financial condition has improved or deteriorated since filing Chapter 11 nearly one year ago. The Bank complains that the Disclosure Statement contains inadequate information regarding the financial viability of the Debtor's business operation given the industry-wide decline and lack of specificity regarding the extent of the Debtor's improved financial performance since the petition date. The Bank points out that the Debtor should disclose to the Court and the creditors (i) the status of the Debtor's PPP loan application and approval; (ii) whether the Debtor disclosed in its application that it has filed Chapter 11 bankruptcy and, if not, the reason why; (iii) the proposed use of any PPP loan proceeds with an analysis of the extent of forgiveness of the Debtor's loan repayment obligation; (iv) the extent to which the Debtor's post-confirmation performance hinges on approval of the PPP loan and its ultimate forgiveness; and (v) the financial impact on the Debtor’s post-confirmation pro forma and cash flow if the PPP loan must be repaid. According to Bank, approval of the Disclosure Statement should be denied because the plan is unconfirmable. The Bank asserts that the Plan fails to properly treat the Bank as the holder of an allowed, fully-secured claim. The Bank complains that the Plan is also unconfirmable -- warranting disapproval of the Disclosure Statement -- because the Plan violates the absolute priority rule. Attorneys for First Home Bank: ROBERT J. POWELL DOUGLAS A. BATES CLARK PARTINGTON 125 East Intendencia Street (32502) P.O. Box 13010 Pensacola, Florida 32591-3010 Telephone: (850) 434-9200 rpowell@clarkpartington.com dbates@clarkpartington.com About Bradley Investments Bradley Investments, Inc., which conducts business under the name Timbercreek Golf Club, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 19-12908) on Aug. 22, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The case has been assigned to Judge Henry A. Callaway. The Debtor is represented by Irvin Grodsky, Esq., at Grodsky and Owens. On Sept. 19, 2019, the U.S. Bankruptcy Court for the Southern District of Alabama appointed an Official Committee of Unsecured Creditors. The Committee retained Blakeley LLP as counsel. BRIDGEWATER HOSPITALITY: Aug. 11 Hearing on Disclosure Statement ---------------------------------------------------------------- Judge Jeffrey P. Norman has ordered that the hearing to consider the approval of the Disclosure Statement of Bridgewater Hospitality, LLC; dba Best Western Plus Houston I-45 North Inn & Suites will be held at Courtroom 403, United States Courthouse, 515 Rusk St., Houston, Texas, on August 11, 2020, at 11:00 a.m. August 5, 2020, is fixed as the last day for filing and serving written objections to the disclosure statement. About Bridgewater Hospitality Bridgewater Hospitality, LLC, is a privately held company in the traveller accommodation industry. Bridgewater Hospitality filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31546) on March 2, 2020. The petition was signed by Prashant Patel, manager and general partner. At the time of filing, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Joyce Lindauer, Esq. at JOYCE W. LINDAUER ATTORNEY, PLLC, is the Debtor's counsel. CARE FOR LIFE: Has Oct. 5 Deadline to Confirm Plan -------------------------------------------------- Judge A. Benjamin Goldgar has ordered that the deadline for Care For Life Home Health, Inc. to confirm a Chapter 11 Plan is extended to Oct. 5, 2020. The Debtor's Amended Plan and Disclosure Statement were due on or before July 29, 2020. The Debtor's counsel: Ben Schneider 8424 Skokie Blvd., Suite 200 Skokie, IL 60077 Phone # 847-933-0300 ARDC # 6295667 About Care For Life Home Health Based in South Elgin, Ill., Care For Life Home Health, Inc., filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 19-33113) on Nov. 21, 2019, listing less than $1 million in both assets and liabilities. Ben L Schneider, Esq., at Schneider & Stone, is the Debtor's legal counsel. CARET CORPORATION: Unsecureds to Get 2% of Their Claims ------------------------------------------------------- Caret Corporation and Caret's wholly owned subsidiary Prestige Cosmetics LLC, submitted a Joint Disclosure Statement. Caret scheduled assets totaling $258,197. Included in this amount was the security deposit held by the Landlord in the amount of $184,292, which was retained by the Landlord pursuant to the Landlord Settlement. Prestige scheduled assets totaling $622,829. Of that amount, $570,904 consisted of accounts receivable of which $315,700 were 90 days old or less and the balance over 90 days old. Class 5A (Caret) Caret General Unsecured Claims approximate $4,448,701. Jon Ruggles has agreed to waive distribution on his claim of $3,265,615 so that the holders of Caret General Unsecured Claims can receive a distribution. Class 5A Claims will be paid their prorata share of any and all Carets funds on hand periodically, to the extent that funds are available after payment of administrative and priority claims. Caret estimates that its unsecured creditors will receive a distribution of approximately 2% of their allowed claims. This class is impaired. Class 2B (Prestige) Prestige General Unsecured Claims approximate $2,434,865. Class 2B Claims will be paid their pro rata share of any and all Prestige funds on hand periodically, to the extent that funds are available after payment of administrative and priority claims. Caret estimates that its unsecured creditors will receive a distribution of approximately 7% to 8% of their allowed claims. This class is impaired. Class 6A (Caret) Ivonne Ruggles, the 100% interest holder, is impaired. Class 6A interests will be cancelled at the conclusion of the liquidation and filing of dissolution documentation for Caret. Class 3B (Prestige) Caret, 100% interest holder, is impaired. Class 3B interests will be cancelled at the conclusion of the liquidation and filing of dissolution documentation for Prestige. This class is impaired. The Plans will be funded by the following: (i) funds in the Debtors' respective Debtor-in- Possession Bank accounts, (ii) as to Caret, the release of tax escrow, (iii) as to Caret, contribution from Jon Ruggles and waiver of his claim against Caret, and (iv) as to Prestige recoveries from collections on accounts receivable, preference actions, fraudulent transfer actions and other causes of action. A full-text copy of the Joint Disclosure Statement dated July 1, 2020, is available at https://tinyurl.com/ydxblscb from PacerMonitor.com at no charge. Counsel for the Debtors: NORRIS McLAUGHLIN, P.A. Morris S. Bauer, Esq. 400 Crossing Boulevard, 8th Floor P.O. Box 5933 Bridgewater, New Jersey 08807 Tel: (908) 722-0700 E-mail: msbauer@norris-law.com About Caret Corporation Caret Corporation, based in Fairfield, NJ, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 19-31194) on Nov. 8, 2019. In the petition signed by Ivonne Ruggles, president, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The Hon. Stacey L. Meisel oversees the case. Morris S. Bauer, Esq., at Norris Mclaughlin, P.A., serves as bankruptcy counsel, to the Debtor. CARROUSEL THERAPY: Court Confirmed Plan and Approves Disclosures ---------------------------------------------------------------- Judge Lori V. Vaughan has ordered that the Plan of Carrousel Therapy Center Corporation is confirmed. The Disclosure Statement is approved on a final basis. The Debtor shall file all objections to claims within ninety (90) days from the date of this Order. Payments to be made pursuant to the Plan is as follows: * Class 1 consists of the Allowed Secured Claim of Ally in the amount of $31,509. This claim is secured by a first-priority lien on the Ally Collateral. Ally will be secured by a lien on the Ally Collateral to the same validity and priority as existed as of the Petition Date. Pursuant to the retail installment contract between the Debtor and Ally, the monthly contractual payment to Ally is in the amount of $870.72. * Class 2 consists of the Allowed Secured Claim of CIT, which arises from a pre-petition loan to the Debtor for the purchase of the CIT Collateral. CIT filed Claim Number 1, alleging a total indebtedness in the amount of $12,696. In accordance with Claim Number 1, $12,695.64 shall be treated as an Allowed Secured Claim. In full satisfaction of CIT's Allowed Secured Claim, CIT will be secured by a first priority Lien on the CIT Collateral to the same validity and priority as existed as of the Petition Date and shall be paid through monthly payments of principal and interest, amortized over a period of one year at a four percent (4.00%) fixed rate of interest. The first payment will be due on the thirtieth day after the Effective Date and will continue on the same day of each month thereafter. The monthly payments of principal and interest to CIT will be in the amount of $1,081. * Class 3 consists of the Allowed Secured Claim of Fundation in the amount of $100,084. In full satisfaction of Fundation's Allowed Secured Claim, Fundation will be secured by a first priority Lien on the Fundation Collateral to the same validity and priority as existed as of the Petition Date and shall be paid through monthly payments of principal and interest, amortized over a period of five years at a 4 percent fixed rate of interest. The first payment will be due on the thirtieth day after the Effective Date and will continue on the same day of each month thereafter. The monthly payments of principal and interest to Fundation will be in the amount of $1,843. * Class 4 consists of the Allowed Secured Claim of Regions in the amount of $80,725 arising from Regions' prepetition loan to the Debtor for the purchase of the Regions Collateral. In full satisfaction of Regions Allowed Secured Claim, the Debtor shall surrender the Regions Collateral to Regions. Pursuant to the Order Granting Motion for Final Relief From The Automatic Stay (Doc. No. 99), the Debtor surrendered the Regions Collateral to Regions prior to the entry of this Confirmation Order. * Class 5 consists of the Allowed Unsecured Claims against the Debtor. The total amount of Allowed Unsecured Claims against Debtor is $110,780, of which $50,204 is a Disputed General Unsecured Claim of the Internal Revenue Service. The undisputed Allowed Unsecured Claims against the Debtor total $60,576. In full satisfaction of the Class 5 Allowed Unsecured Claims, on the Effective Date, the total sum of $25,000 will be paid to the Holders of Class 5 Allowed Unsecured Claims on a pro rata basis. The source of the $25,000 will be the new value contributed to the Debtor by Rivera. Furthermore, the Debtor will pay the remaining balance of $35,576 from its operations, which will result in the Holders of Allowed Unsecured Claims to be paid in full. * Class 6 consists of Equity Interests. Rivera owns all of the Equity Interests in the Debtor. Under the Plan, Rivera will retain all Equity Interests in the Debtor. On account of Rivera's retention of 100% of the ownership interest in the Debtor, Rivera will subordinate her general unsecured claim to the all other Holders of Allowed Unsecured Claims and shall contribute new value in the amount of $25,000 on the Effective Date. The new value contributed by Rivera will be paid to the Holders of Class 5 Unsecured Claims, on a Pro Rata basis, on the Effective Date. A post-confirmation Status Conference has been scheduled for Sept. 1, 2020 at 2:00 p.m., at the United States Bankruptcy Court, 400 W. Washington Street, 6th Floor, Courtroom C, Orlando, Florida 32801. About Carrousel Therapy Center Carrousel Therapy Center Corporation offers interdisciplinary and centralized pediatric therapies and behavioral health services for children, adults, and families. Based in Saint Cloud, Florida, Carrousel Therapy Center sought Chapter 11 protection (Bank. M.D. Fla. Case No. 19-07009) in Orlando, Florida, on Oct. 25, 2019. In the petition signed by Dalis M. Rivera, president, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities as of the bankruptcy filing. BARTOLONE LAW, PLLC, led by Aldo G. Bartolone, Jr., Esq., in Orlando, Florida, is counsel to the Debtor. CEC ENTERTAINMENT: Chuck E. Cheese Closes 3 Ohio Locations ---------------------------------------------------------- Deirdre Byrne, writing for MYMC Media, reports that Chuck E. Cheese has permanently closed its Gaithersburg location. Although the Gaithersburg Chuck E. Cheese has closed, the Chuck E. Cheeses in Rockville and Takoma Park have reopened and are still operating. The closures come as Chuck E. Cheese's parent company, CEC Entertainment, announced in a statement at the end of June that it was filing for Chapter 11 bankruptcy "in order to overcome the financial strain resulting from prolonged, COVID-19 related venue closures." "The Company expects to use the time and legal protections made available through the Chapter 11 process to continue discussions with financial stakeholders, as well as critical conversations with its landlords, to achieve a comprehensive balance sheet restructuring that supports its re-opening and longer-term strategic plans," the CEC Entertainment statement says. According to CEC Entertainment, since the coronavirus closures began in March, the company has officially reopened 266 of its Chuck E. Cheese and Peter Piper Pizza restaurants around the country. About CEC Entertainment CEC Entertainment -- http://www.chuckecheese.com/-- is a family entertainment and dining company that owns and operates Chuck E. Cheese and Peter Piper Pizza restaurants. As of Dec. 31, 2019, CEC Entertainment and its franchisees operate a system of 612 Chuck E. Cheese restaurants and 129 Peter Piper Pizza stores, with locations in 47 states and 16 foreign countries and territories. CEC Entertainment recorded a net loss of $28.92 million for the year ended Dec. 29, 2019, compared to a net loss of $20.46 million for the year ended Dec. 30, 2018. As of Dec. 29, 2019, CEC Entertainment had $2.12 billion in total assets, $1.90 billion in total liabilities, and $213.78 million in total stockholders' equity. On June 24, 2020, CEC Entertainment and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33163). Judge Marvin Isgur oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel; FTI Consulting, Inc. as financial advisor; PJT Partners LP as investment banker; Hilco Real Estate, LLC as real estate advisor; and Prime Clerk, LLC, as claims, noticing and solicitation agent. CENTURY TOWNHOMES: Unsecureds Will be Paid From Proceeds of Sale ---------------------------------------------------------------- Century Townhomes Association, submitted a Plan and a Disclosure Statement. The primary function of the Debtor is to collect assessments from owners of the Townhomes, which assessments are used to pay monthly charges billed to the Debtor by the Clairton Municipal Authority (the "Municipal Authority") and Pennsylvania American Water Company ("Pa American") for sewage and water service to the Townhomes, respectively, and to pay for maintenance and repairs to common areas at the Townhomes. Owners are currently assessed $150 per month for occupied Townhomes, $75 per month for units temporarily unoccupied while they are re-rented, and $10 per month for unoccupied Townhomes. Class 3 General unsecured claims totaling $578,000 are impaired. General Unsecured Creditors will be paid a pro rata share of their claim from the proceeds of any Sale upon the closing of any Sale. The Debtor anticipates that the foreclosures will be simple, since most of the Lien Properties are abandoned. The Debtor also believes that Allegheny County, the Clairton City School District, the City of Clairton, and any other potential lien creditors will consent to the Foreclosure and payment of Sale proceeds to the Debtor's claimants pursuant to the Plan. The Debtor also believes that a sale will yield funds sufficient to make a distribution to General Unsecured Creditors. A full-text copy of the Disclosure Statement dated July 1, 2020, is available at https://tinyurl.com/yctzreee from PacerMonitor.com at no charge. Counsel to the Debtor: Kathryn L. Harrison, Esq. CAMPBELL & LEVINE, LLC 310 Grant Street, Suite 1700 Pittsburgh, Pennsylvania 15219 Tel: 412-261-0310 Fax: 412-261-5066 E-mail: kharrison@camlev.com About Century Townhomes Association Century Townhomes Association is a Pennsylvania non-profit corporation that operates a homeowners association for residential townhomes located in Clairton, Pennsylvania, known as Century Townhomes. Century Townhomes was a project of Action Housing, Inc., designed to provide affordable housing in the City of Clairton. The development consists of over 425 residential townhomes, owned by individual homeowners, landlords who rent units to leaseholders, and a non-profit organization that provides housing to individuals with disabilities in its units. Century Townhomes Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 18-21925) on May 10, 2018. In the petition signed by Eric Hatchett, president, the Debtor was estimated to have assets of less than $100,000 and liabilities of less than $500,000. Judge Jeffery A. Deller is the presiding judge. The Debtor hired Campbell & Levine, LLC, as its legal counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. CHESAPEAKE ENERGY: Gets Court Permission to Access Ch. 11 Financing ------------------------------------------------------------------- Law360 reports that bankrupt oil and gas driller Chesapeake Energy Corp. received permission from a Texas judge to access a portion of $925 million in Chapter 11 loans as it seeks to turn about $7 billion of prepetition debt into equity. During a first-day hearing conducted via phone and video conferencing, U.S. Bankruptcy Judge David R. Jones granted interim approval to the debtor-in-possession financing package being provided by existing lenders under a $1.9 billion secured revolving credit facility, saying the terms of the loans were vigorously negotiated before the bankruptcy filing. About Chesapeake Energy Corp. 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 reported a net loss of $308 million for the year ended Dec. 31, 2019. As of March 31, 2020, the Company had $7.81 billion in total assets, $2.26 billion in total current liabilities, $9.47 billion in total long-term liabilities, and a total deficit of $3.92 billion. * * * As reported by the TCR on April 29, 2020, Moody's Investors Service downgraded Chesapeake Energy Corporation's Corporate Family Rating to Ca from Caa1. The downgrade reflects Chesapeake's eroding liquidity, the prospect of significant production declines due to substantially reduced capital investment, a depressed commodity price environment, very limited access to capital, and the high likelihood of a restructuring in the near term. CHEYENNE HOTEL: Unsecureds to Recover 5% in Plan ------------------------------------------------ GALAXY CONSTRUCTION, LLC, filed a Chapter 11 Plan for the resolution of claims against Cheyenne Hotel Investments. In the Schedules of Assets and Liabilities filed in the bankruptcy case, the Debtor lists assets with an aggregate value of $13,887,962 as of the Petition Date. This amount consists of (i) real property in the amount of $12,800,000 (Galaxy disagrees with this figure and believes the value of the real property is approximately $3,500,000), (ii) cash and cash equivalents in the amount of $559,962 (of which $557,287 is stated as a reserve account at Berkadia Commercial Loan Servicing), (iii) accounts receivable in the amount of $0.00, (iv) equipment, furnishings, supplies, and fixtures in the amount of $325,000; (v) inventory in the amount of $3,000, and (vi) intellectual property in the amount of $200,000. These values were supplied by the Debtor and the actual value of any given asset may be materially different than the amount provided by the Debtor. Class 1: Allowed Priority Claim of the Internal Revenue Service is impaired. The claim will be paid in full over 60 months from the Effective Date at an interest rate of 4.21% per annum (calculated pursuant to 26 U.S.C. Sec. 6621 as the current Federal Short Term Rate of 1.21% plus 3%). Payments will commence on the first day of the month following the Effective Date and continue on the first day of each month thereafter until paid in full. Class 2: Allowed Priority Claim of Colorado Department of Revenue is impaired. The Class 2 Claim of the CDOR will be paid in full over 24 months from the Effective Date at an annual interest rate of 5 percent plus 0.5 percent for each full or partial month the tax remains unpaid, not to exceed a total of 12 percent. Payments will commence on the first day of the month following the Effective Date and continue on the first day of each month thereafter until paid in full. Class 3: Allowed Priority Claim of El Paso County Treasurer is impaired. The Allowed Priority Claim of the El Paso County Treasurer in the estimated amount of $162,536 will be paid in full over 24 months from the Effective Date at an interest rate of 1.0 percent per month on the taxes remaining outstanding at the beginning of each month. Payments will commence on the first day of the month following the Effective Date and continue on the first day of each month thereafter until paid in full. Class 4: Allowed Secured Claim of Wells Fargo Bank, N.A., is impaired. Wells Fargo filed an allegedly fully secured claim in the amount of $7,074,780. To the extent a Class 4 Claim is allowed, it shall be amortized over 20 years, bearing interest at the rate of 5.25% per annum. Monthly payments of both principal and interest will be made on the claim beginning on the first day of the first month following confirmation of the Plan, and on the first day of each month thereafter. Class 5: Allowed Secured Claim of U.S. Bank National Association, as Trustee is impaired. U.S. Bank filed an allegedly fully secured claim in the amount of $624,399. To the extent a Class 5 Claim is allowed, it shall be amortized over 20 years, bearing interest at the rate of 5.25% per annum. Monthly payments of both principal and interest will be made on the claim beginning on the first day of the first month following confirmation of the Plan, and on the first day of each month thereafter. Class 6: Allowed General Unsecured Claims are impaired. The total of claims in this class is estimated at $4,489,142, including the Unsecured portions of the Claim of Wells Fargo and all of the Claim of U.S. Bank. To the extent Class 6 Claims are Allowed, they shall be paid a total of 5 percent of the allowed amount of each such Claim, payable in equal monthly installments without interest for 24 months, beginning on the Effective Date and continuing on the first day of each month thereafter. Class 7: Equity Interests are impaired. All existing Equity Interests in the Debtor as of the Confirmation Date shall be cancelled and new equity comprising 100% of the equity interests in the Reorganized Debtor shall be issued to Galaxy, the Plan Proponent, as of the Effective Date. The Plan will be funded by Galaxy through cash capital contributions it will make to rehabilitate and re-open the Hotel and pay Creditors under the Plan, and by the profits Galaxy will earn through the resumption and continuation of the Debtor's hotel business. A full-text copy of the Disclosure Statement dated June 24, 2020, is available at https://tinyurl.com/ycfhwrqv from PacerMonitor.com at no charge. Attorneys for GALAXY CONSTRUCTION, LLC, creditor and plan proponent: Joyce W. Lindauer Paul B. Geilich Joyce W. Lindauer Attorney, PLLC 1412 Main St., Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 E-mail: joyce@joycelindauer.com paul@joycelindauer.com - and - Mark A. Larson Larson Law Firm, LLC 1400 Main Street, Ste. 201D Louisville, CO 80027 Telephone:303-228-9414 E-mail: mark@larsonlawyer.com About Cheyenne Hotel Investments Cheyenne Hotel Investments operates Homewood Suites by Hilton Hotel located in Colorado Springs, Colo. Cheyenne Hotel Investments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-15473) on June 26, 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. The case is assigned to Judge Kimberley H. Tyson. The Debtor is represented by Thomas F. Quinn, P.C. CIAOBABYONMAIN LLC: Asks for Oct. 5 Deadline to File Plan --------------------------------------------------------- CiaoBabyOnMain, LLC, move for a second order extending the time for it to file its Chapter 11 plan and disclosure statement. The deadline for the Debtor to file its plan and disclosure statement under 11 U.S.C. Sec. 1121 was April 7, 2020. The deadline was extended once previously to July 6, 2020. In response to the current COVID-19 crisis, The Governor of the State of Illinois has issued a Gubernatorial Disaster Proclamation and a series of executive orders which impair economic activity in the state, and particularly restaurant operations and patronage. Because of these extraordinary circumstances, it is impossible for the Debtor to know at this time what its revenues would be in the coming months following the confirmation of any plan. Accordingly the Debtor seeks an extension of 91 days for its time to file a plan and disclosure statement under 11 U.S.C. Sec. 1121(e)(2) through and until Monday, October 5, 2020. Attorney for the Debtor: Jonathan D. Golding, Esq. (ARDC# 6299876) THE GOLDING LAW OFFICES, PC 500 N. Dearborn Street, 2nd Floor Chicago, IL 60654 Tel: (312) 832-7892 Fax: (312) 755-5720 Email: jgolding@goldinglaw.net About CiaoBabyOnMain CiaoBabyOnMain, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-16814) on June 12, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The case is assigned to Judge Janet S. Baer. The Golding Law Offices, P.C., is the Debtor's counsel. CIAOBABYONMAIN LLC: Oct. 5 Deadline to File Plan and Disclosures ---------------------------------------------------------------- Judge Janet S. Baer has ordered that the CiaoBabyOnMain, LLC's deadline to file a plan and disclosure statement is extended through and until October 5, 2020. The Debtor's counsel: Jonathan D. Golding, Esq. THE GOLDING LAW OFFICES, P.C. 500 N, Dearborn Street, 2nd Floor Chicago, IL 60654 Tel: (312) 832-7892 Fax: (312) 755-5700 Email: jgolding@goldinglaw.net About CiaoBabyOnMain CiaoBabyOnMain, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-16814) on June 12, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of less than $500,000. The case is assigned to Judge Janet S. Baer. The Golding Law Offices, P.C., is the Debtor's counsel. CINEMEX HOLDINGS: Pushes Bid to Obtain Rent Relief -------------------------------------------------- Nathan Hale, writing for Law360, reports that movie theater operator Cinemex Holdings USA Inc. pushed back in Florida bankruptcy court on some of its landlords' objections to its bid for rent relief as it navigates the COVID-19 pandemic, saying there are factors beyond whether government authorities allow it to reopen. During a videoconference hearing before U.S. Bankruptcy Judge Laurel Isicoff, Cinemex's attorney, Patricia Tomasco, reported that the company has made progress in negotiations with the landlords for its 41 CMX Cinemas theaters to suspend or reduce their rent obligations as well as on language for a proposed order that would authorize it to obtain millions in post-petition financing to help cover rent and other expenses. Cinemex said in its filings that it is engaged in negotiations with 17 landlords, and eight agreed prior to hearing to hold off having the court consider their objections until July 30. Tomasco said all of the continuances contain agreements to abate rent collection until then. But that leaves two landlords -- Cobb Lakeside LLC and GT RP Halcyon LLC -- that haven't reached any agreements with Cinemex. They presented similar arguments Monday, telling the court that Cinemex based its motion for rent abatement on its being unable to open and operate due to state and local governments' stay-at-home orders but that such restrictions do not apply to their particular properties. With respect to Halcyon's property, a recently built Cinemex theater-restaurant complex in Forsyth, Georgia, Cinemex has been "perfectly able to open and operate" since before it even filed its Chapter 11 petition in late April, said Halcyon counsel Harris J. Koroglu of Shutts & Bowen LLP. Meanwhile, Cinemex has been permitted to operate its theater in a Lakeland, Florida, shopping center owned by Cobb Lakeside at 50% capacity since June 5, Cobb Lakeside counsel Stephen B. Porterfield of Sirote & Permutt PC said, adding that the company also had the capability to operate a restaurant at the theater separately. Tomasco responded that Cinemex's ability to resume operations is not as simple as the lifting of government restrictions, arguing that rent abatement is warranted under the doctrine of frustration of purpose. The company's leases contemplate -- and in some cases require -- it to operate theaters showing first-run movies, she said. But as a result of the global pandemic, the next major movie releases are expected to be Disney's live-action version of "Mulan" on July 24 and director Christopher Nolan's "Tenet" on July 30. "There is no other content available now," Tomasco said, adding that those release dates are not guaranteed and that Cinemex also will need time to rehire employees and train them on how to avoid the spread of the coronavirus. While the company could attempt to reopen and show classics such as "Ben Hur" or "Charlie and the Chocolate Factory," that just would not be the same, Tomasco suggested. "It's not going to be the same profitability, the same foot traffic and the same customer you would get for first-run movies," she said. Koroglu pushed back, saying, "Any government moratoriums do not impact the debtor's ability to operate theaters. So now what you have is the debtor attempting to rewrite the terms of the lease." Tomasco also argued that the landlords are conflating "frustration of performance" with "impossibility of performance." A force majeure clause that covers events outside the reasonable control of the parties can foreclose an impossibility of performance clause, but there is no case saying it can foreclose a frustration of purpose clause, she said. Cinemex also pointed to the frustration of purpose doctrine among arguments it raised in a reply to the other pending objections that it filed Monday morning. The company also pointed out in the filing that while state authorities have allowed it to reopen certain theaters recently, authorities have continued to recommend that people stay home and avoid large gatherings in enclosed spaces, such as theaters. Judge Isicoff continued her consideration of Cobb Lakeside's and Halcyon's objections until a hearing she set for July 9, expressing hope that the brief deferral might provide time for the parties to resolve the objections. She also indicated that she intends to rule by July 30 on all the objections. Cinemex, which is jointly owned by Mexican companies Grupo Cinemex SA de CV and Operadora de Cinemas SA de CV, filed for Chapter 11 protection on April 25 and 26 citing government-mandated closures of theaters during the COVID-19 pandemic. Cinemex operates 41 upscale dine-in movie theaters in 12 states under the CMX Cinemas brand. The company says it has laid off almost all its 2,500 workers, leaving fewer than 20 employees to maintain the business. Its monthly lease obligations are about $3.2 million in rent, plus an additional $700,000 in tax and insurance, according to Cinemex's motion. Counsel for Cinemex, Halcyon and Cobb Lakeside did not immediately respond to requests for comment after Monday's hearing. Cinemex is represented by Brett M. Amron, Jeffrey P. Bast and Jaime Burton Leggett of Bast Amron LLP, and Patricia B. Tomasco, Eric Winston and Juan P. Morillo of Quinn Emanuel Urquhart & Sullivan LLP. Halcyon is represented by Harris J. Koroglu and Ryan C. Reinert of Shutts & Bowen LLP. Cobb Lakeside is represented by Stephen B. Porterfield and Thomas B. Humphries of Sirote & Permutt PC and Jason A. Weber of Tiffany & Bosco PA. The case is In re: Cinemex USA Real Estate Holdings Inc. et al., case number 1:20-bk-14695, in the U.S. Bankruptcy Court for the Southern District of Florida. About Cinemex Holdings Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, the Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP serve as the Debtors' bankruptcy counsel. CITY POWER: Unsecureds to Get Pro Rata Share of Available Funds --------------------------------------------------------------- City Power and Gas, LLC, submitted a Second Amended Plan of Reorganization. Class 1 DIP Lender Secured Superpriority Administrative Claim will be paid in full in cash on the Effective Date. The Debtor anticipates that the payment will be made with proceeds from a new lending facility that replaces the DIP Facility, with closing occurring on the Effective Date. This class is impaired. At such time as the Debtor has paid all Class 1 and 2 claims in full, the holders of general unsecured claims in Class 3 will receive their pro rata share of the Debtor's available funds, payable as applicable from the Effective Date Distribution, the New Value Contribution, if any, the Cause of Action Proceeds and the Monthly Installments. The foregoing payments will be in full satisfaction of their claims. This class is impaired. Class 4 equity interests will be retained by the Class 4 Holder subject to the following: except as provided in Section 4.6, if the Estate is not able to pay the Class 1, 2 and 3 Holders, then upon the receipt of a New Value Contribution following a sale of the membership interests of the Reorganized Debtor conducted in accordance with the Equity Sale Procedures, the Class 4 Holder (CPG Power Holdings, LLC) will surrender any certificates evidencing its interests to the Reorganized Debtor, and such existing certificates shall be issued to the New Equity Holder in exchange for the New Value Contribution. This class is impaired. The Plan payments shall be funded from the (i) revenues of the Debtor’s post-Petition business operations; (ii) the New Value Contribution, if any; and (iii) causes of action proceeds. A full-text copy of the Second Amended Plan of Reorganization dated July 1, 2020, is available at https://tinyurl.com/y8htr2ev from PacerMonitor.com at no charge. Counsel for the Debtor: CLIFFORD M. GINN GINN LAW, LLC 62 Marion Jordan Road Scarborough, ME 04074 Tel: (207) 274-0001 About City Power and Gas City Power and Gas, LLC -- https://www.citypowerandgas.com/ -- is an electricity and natural gas company servicing homes and small businesses. It is a licensed energy and gas supplier and regulated by the New York Public Service Commission. City Power and Gas sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-77685) on Nov. 7, 2018. The case is assigned to Judge Alan S. Trust. Clifford M. Ginn, Esq., at Ginn Law, LLC, is the Debtor's bankruptcy counsel. CL AND MEW: Butler Law Firm Approved as Counsel ----------------------------------------------- The United States Bankruptcy Court for the District of Columbia has granted CL and Mew Company, LLC's amended application to employ The Butler Law Group, PLLC, led by Craig A. Butler, as its Chapter 11 counsel. The Debtor has entered into an amended retainer agreement with the firm for representation in all aspects of the Chapter 11 case, including filing of the required schedules, statements, and reports, settlement negotiations, advice concerning administration of the estate, filing of necessary motions, the bringing and defense of any contested matters or adversary proceedings involving the Debtor in the Bankruptcy Court, and approval and confirmation of a Disclosure Statement and Plan. The Debtor says Craig A. Butler is a member in good standing of the Bar of this Court, is experienced in bankruptcy matters, and represents no interests adverse to those of the estate. Bankruptcy Judge S. Martin Teel, Jr. previously issued an order denying the Debtor's application to employ Butler as counsel. The amended application remedied the concerns raised by the Bankruptcy Court. In the Debtor's prior case, Case No. 19-00651, Butler was employed as the Debtor's counsel and he reported on his Rule 2016(b) statement in that case that a balance of $917 was owed him on a flat fee of $2,000. Butler has never filed an amended disclosure statement in Case No. 19-00651 reflecting payment of that $917 balance (as would have been required if he received such payment). On March 11, 2020, the Debtor filed the original application to employ Butler as counsel in the 2020 bankruptcy case. According to Judge Teel, the Debtor failed to make, as required by Rule 2014(a), any disclosures in the application itself regarding its knowledge regarding the connections specified by Rule 2014(a). In Butler's verified statement accompanying the application in this Rule 2014(a), Butler does address the connections specified by Rule 2014(a) but he falsely states that he nor the Butler Law Group previously represented the Debtor, and that they don't have any known connections with the Debtor. Butler's verified statement does not disclose what happened to his fee claim in the prior case and whether any amounts are still owed him or his firm based on the representation of the debtor in Case No. 19-00651. Moreover, Butler's Rule 2016(b) statement indicates that his representation of the Debtor will be for $7,500. However, the retainer letter attached to the application to employ Butler indicates that he is representing the Debtor for a retainer of $6,000, not $7,500, with work to be billed on an hourly fee basis, not based on a flat fee. The application and the Rule 2016(b) statement do not jibe. A copy of the Court's Memorandum Decision and Order dated April 1, 2020, is available at https://bit.ly/2XH2Zmq from Leagle.com. About CL and Mew CL and Mew Company, LLC filed for chapter 11 bankruptcy (Bankr. D.D.C. Case No. 20-00091) on Feb. 11, 2020, listing under $1 million in both assets and liabilities, and is represented by Craig Butler at The Butler Law Group. CL and Mew Company, based in Washington, DC, classifies its business as Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Its principal assets are located at 2628 Martin Luther King, Jr. Avenue, SE Washington, DC 20020. It previously filed for Chapter 11 (Bankr. D.D.C. Case No. 19-00651) on September 30, 2019. The Hon. S. Martin Teel, Jr. presided over the 2019 case and is overseeing the 2020 case. In the 2019 petition, it estimated $1 million to $10 million in both assets and liabilities. The 2019 petition was signed by Carlton Warner, managing member. COLUMBIA NUTRITIONAL: Columbia State Objects to Disclosures ----------------------------------------------------------- Columbia State Bank filed an objection to Columbia Nutritional, LLC's Disclosure Statement. The Bank points out that the Disclosure Statement fails to reflect the Bank's agreement with the Debtor re plan revisions. The Bank asserts that the treatment of the Bank's Class 2 Claim must disclose that the Debtor will not pursue any prepetition claims against the Bank. The Bank complains that the Debtor fails to disclose in its Disclosure Statement that the Debtor released those Alleged Claims on more than one occasion prior to filing its bankruptcy in conjunction with forbearance agreements into which the Debtor and the Bank entered and pursuant to which the Bank gave valuable consideration to the Debtor in the form of forbearance of its rights under the loan documents between the Debtor and the Bank despite the Debtor’s acknowledged defaults. Counsel for Columbia State Bank: Jason M. Ayres Tara J. Schleicher Foster Garvey P.C. 121 SW Morrison Street, Ste. 1100 Portland, Oregon 97204-3141 Telephone: (503) 228-3939 Facsimile: (503) 226-0259 E-mail: jason.ayres@foster.com tara.schleicher@foster.com About Columbia Nutritional Columbia Nutritional, LLC -- https://www.columbianutritional.com/ --is a contract manufacturer of dietary supplements based in the Pacific Northwest. Columbia Nutritional filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-40353) on Feb. 6, 2020. In the petition signed by COO Brea Viratos, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Brian D. Lynch oversees the case. Thomas W. Stilley, Esq., at Sussman Shank LLP, serves as the Debtor's legal counsel. COMCAR INDUSTRIES: TFI Purchases MCT Transportation's Assets ------------------------------------------------------------ Street Insider reports that TFI International Inc. (NYSE: TFII), a North American leader in the transportation and logistics industry, announced the acquisition of substantially all the assets of MCT Transportation, LLC. Originally Midwest Coast Transport, MCT Transportation was a refrigerated and dry van subsidiary of Comcar Industries, Inc., which along with its other subsidiaries filed Chapter 11 petitions in the U.S. Bankruptcy Court on May 17, 2020. TFI International paid total consideration of U.S. $9.6 million for the assets acquired including accounts receivable, along with U.S. $2.8 million for two real estate properties. Headquartered in Sioux Falls, South Dakota, MCT Transportation provides quality transportation for major companies in the packaged food, agricultural, medical and automobile industries, primarily throughout the Southeast and Midwest regions of the U.S., and generated 2019 revenue before fuel surcharge of approximately U.S. $45 million. Its highly professional driving team operates more than 130 tractors in addition to 90 owner-operator tractors, plus 340 reefer trailers and 275 dry van trailers. MCT Transportation, which will become part of TFI International’s Truckload segment, had four terminal locations, including two acquired by TFI, in Florida and Arkansas. "We are excited to welcome the MCT team to TFI International to help enhance our truckload capabilities in the U.S.," stated Alain Bédard, Chairman, President and Chief Executive Officer of TFI International. "MCT brings a host of capabilities including key regionalized lanes in the Midwest and Southeast, specialized Florida-originating outbound lanes, and dedicated Midwest-West lanes. Importantly, MCT has strong overlap with our existing customers allowing us to provide service across an expanded region, as well as overlap in multiple facilities which we can leverage to drive significant efficiencies." About TFI International Inc. TFI International Inc. is one of North America's largest trucking companies, comprising dozens of subsidiaries offering truckload, less-than-truckload, logistics, and package and courier services across Canada, the US, and Mexico. About Comcar Industries Comcar Industries -- https://comcar.com/ -- is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc., is the claims agent. COVIA HOLDINGS: In Chapter 11 to Reduce Debt by $1 Billion ---------------------------------------------------------- Covia Holdings Corp. (NYSE:CVIA) and certain of its direct and indirect subsidiaries on June 29, 2020, voluntarily commenced cases under chapter 11 of title 11 of the United States Code in the U.S. Bankruptcy Court for the Southern District of Texas. In connection with the Chapter 11 Cases, the Company Parties entered into a Restructuring Support Agreement, dated June 29, 2020, with certain creditors (the "Consenting Stakeholders"), which contemplated agreed-upon terms for a prearranged plan of reorganization. Under the Restructuring Support Agreement, the Consenting Stakeholders agreed, subject to certain terms and conditions, to support a financial restructuring of the existing debt of, existing equity interests in, and certain other obligations of the Company Parties, pursuant to the Plan as filed with the Bankruptcy Court. On July 7, 2020, the Consenting Stakeholders and the Company Parties entered into an Amended and Restated Restructuring Support Agreement (a) to revise the defined term "Required Consenting Stakeholders" to mean those Consenting Stakeholders holding 60.01%, instead of 50.01%, of the aggregate outstanding principal amount of the term loans under that certain Credit and Guaranty Agreement, dated as of June 1, 2018, as amended, that are held by the Consenting Stakeholders and (b) to provide that the Bankruptcy Court must enter, instead of enforce, an order setting the general claims bar date in the Chapter 11 Cases within 60 days of the petition date, which was June 29, 2020; provided that such milestone may be extended by written agreement between the Company and the Required Consenting Stakeholders. Sustainable Capital Structure Covia Holdings at the end of June announced that it has taken a major step toward creating a sustainable capital structure by reducing debt and eliminating excess fixed costs by more than $1 billion. The Company has entered into a restructuring support agreement (the "RSA") with holders of a majority of its secured debt for a comprehensive financial restructuring of its debt. To implement the terms of the RSA, the Company and certain of its U.S. subsidiaries have voluntarily filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. In addition to reducing its debt, the Company expects to significantly reduce excess fixed costs, improve operating cash flow and position the Company to better execute its go-forward business strategy through the Chapter 11 reorganization process. The Company’s foreign subsidiaries, including those in Canada, Mexico and Denmark, were not included in the filings, and its international operations are continuing in the ordinary course. Covia's U.S. operations will also continue in the ordinary course of business serving customers. The Company's current cash reserves of approximately $250 million are expected to provide substantial liquidity to fund operations, support its long-term investment program, and manage the reorganization process. "The actions announced today are expected to significantly strengthen our balance sheet and improve our operating cash flow, making Covia an even stronger partner to our customers in both the near- and long-term," said Richard Navarre, Chairman, President and Chief Executive Officer, on June 29, 2020. "Following a careful and comprehensive review, the Board of Directors and management determined these actions are the best option to ensure the long-term success for Covia. We are pleased to have our lenders’ support for our restructuring plan, which demonstrates their confidence in our ongoing operations. Their support of our plan should also allow us to complete this restructuring on an expedited timeframe." Mr. Navarre noted that the unprecedented backdrop from the COVID-19 pandemic and recent energy price shocks have significantly impacted the Company's end markets and customers. "We have made important and substantial progress over the last year executing our strategy and aligning our business with changing market conditions, however, the negative impact of the pandemic and energy downturn has required this action," said Mr. Navarre. "The reorganization process we began today serves as the means to a new beginning, and we expect the actions we have taken recently will enhance the competitive position of our high-quality assets for the future." Mr. Navarre commented that the Covia team remains steadfastly focused on operating safely and serving the Company's customers with quality products. "We thank our customers for their support and also appreciate the continued cooperation of our business partners who play a key role in bringing our materials to market," he said. "We also thank our employees for their hard work and commitment to working safely and productively in the face of recent challenges. This gives me great confidence in our ability to continue to meet our customers’ needs and successfully exit the process even stronger." Covia has filed a number of customary motions seeking court authorization to support its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption. The Company intends to pay vendors and suppliers in full under normal terms for goods and services provided after the filing date. Covia expects to receive court approval for these requests and intends to move through the restructuring proceedings as quickly as possible. Covia Holdings Corporation Covia Holdings Corporation and its affiliates -- http://www.coviacorp.com/-- provide diversified mineral-based and material solutions for the energy and industrial markets. They produce a specialized range of industrial materials for use in the glass, ceramics, coatings, foundry, polymers, construction, water filtration, sports and recreation, and oil and gas markets. Covia Holdings Corporation, based in Independence, Ohio, and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33295) on June 29, 2020. In its petition, Covia disclosed $2,504,740,814 in assets and $1,903,952,839 in liabilities. The petition was signed by Andrew D. Eich, executive vice president, chief financial officer, and treasurer. The Hon. Marvin Isgur presides over the case. The Debtors tapped KIRKLAND & ELLIS LLP, and KIRKLAND & ELLIS INTERNATIONAL LLP, as counsel; JACKSON WALKER L.L.P., as co-counsel; KOBRE & KIM LLP, as special litigation counsel; PJT PARTNERS LP, as investment banker; ALIXPARTNERS, LLP, as financial advisor; and PRIME CLERK LLC, as claims and noticing agent. CRESTWOOD EQUITY: Crestwood to Maintain Operations -------------------------------------------------- Crestwood Equity Partners LP (NYSE: CEQP) released a statement in connection with the bankruptcy filing of Chesapeake Energy (NYSE: CHK), a customer in the Powder River Basin and northeast Marcellus. Crestwood said it has been preparing for this event over the past few months and is well-positioned to maintain full operations to Chesapeake throughout bankruptcy proceedings. Crestwood's gathering and processing systems are integral to Chesapeake's operations in the Powder River Basin, as a substantial amount of its revenues are derived from the sale of natural gas and natural gas liquids (NGLs) produced from acreage dedicated to Crestwood, which is the most economic path to market. Chesapeake is current on all outstanding invoices payable to Crestwood and additional cash flow protection is in place via letters of credit. In the Powder River Basin, Crestwood's midstream assets are supported by a 358,000 acreage dedication by Chesapeake and a 30,000 acreage dedication by Panther Energy, as well as dedications by other producers in the basin. The Bucking Horse processing facility and the Jackalope gas gathering system are supported by a 20-year fixed fee gathering and processing agreement with Chesapeake that was restructured in the first quarter 2017 and reflects competitive market terms in-line with other midstream operators in the basin. Crestwood provides a critical service to Chesapeake with over 320 wells connected to the Jackalope system. Following the announcement, Crestwood does not anticipate any changes to its ability to achieve the revised 2020 cash flow forecast and financial metrics provided on May 5, 2020. Non-GAAP Financial Measures Adjusted EBITDA and distributable cash flow are non-GAAP financial measures. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or operating income or any other GAAP measure of liquidity or financial performance. About Crestwood Equity Partners Crestwood Equity Partners LP (NYSE: CEQP) is a holding company whose subsidiaries are engaged primarily in the gathering, processing, storage and transportation of natural gas and NGLs, the marketing of NGLs, and the gathering, storage and transportation of crude oil. CEQP is headquartered in Houston. 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. The 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. CSC HOLDINGS: S&P Rates New $1BB Guaranteed Notes 'BB' ------------------------------------------------------ S&P Global Ratings assigned its 'BB' issue-level rating and '2' recovery rating to CSC Holdings LLC's proposed $1 billion guaranteed notes due 2031. The '2' recovery rating indicates its expectation for substantial recovery (70%-90%; rounded estimate: 70%) in a simulated default scenario. At the same time, S&P's 'B' issue-level rating and '6' recovery rating on unsecured debt remains unchanged following the company's $1.7 billion add-on to existing $625 million unsecured notes due 2030. The '6' recovery rating indicates its expectation for negligible recovery (0%-10%; rounded estimate: 0%) in a default scenario. CSC is a subsidiary of Altice USA Inc., which recently announced that it reached an agreement to sell 49.9% of its Lightpath subsidiary to Morgan Stanley Infrastructure Partners and will retain a 50.1% stake in the joint venture (JV). In connection with the Lightpath JV transaction, Lightpath and its subsidiaries will become unrestricted and all guarantees of the credit facilities, the 2031 senior guaranteed notes, and the existing guaranteed notes provided by the guarantors within the Lightpath group will be released. The Lightpath group, which contributes about 5% of total EBITDA, will be financed independently outside the restricted group and is expected to incur indebtedness in connection with the Lightpath JV transactions. Therefore, S&P has lowered its stressed emergence enterprise value by about $500 million to reflect the value from Lightpath that will be unavailable to lenders of CSC Holdings LLC. This results in a modestly lower estimated recovery for existing lenders although S&P is not revising its recovery ratings because estimated recovery on secured and guaranteed notes is just above 70%. S&P's 'BB-' issuer credit rating on Altice USA is unaffected by this leverage-neutral transaction because it will use the proceeds to repay a similar amount of debt. Altice has also committed to repaying debt when the Lightpath transaction closes, such that it will be at least leverage neutral to Altice USA. While Altice USA could use its annual free operating cash flow (FOCF) generation of about $1.2 billion-$1.5 billion to deleverage, the company has been aggressively pursuing share buybacks recently. As a result, debt to EBITDA is about 5.4x on a last-12-month (LTM) basis, slightly below S&P's 5.5x downgrade trigger. Still, S&P expects shareholder returns to moderate in the second half of the year, as the company aims to restore leverage to below 5x by the end of the year. The rating agency believes Altice will still generate positive EBITDA growth of 1%-3% through the recession, as healthy high-margin broadband growth offsets accelerating video cord-cutting and weaker small business sales. RECOVERY ANALYSIS Key analytical factors: -- S&P's simulated default scenario contemplates a default during 2024, primarily due to accelerated pricing pressure and competition from Verizon Fios and new 5G fixed-wireless broadband offerings combined with increased video customers churn stemming from streaming alternatives. -- Ultimately, a declining subscriber base combined with lower revenues per customer would simulate EBITDA below the minimum required to service Altice USA's fixed charges (principally interest expense, capex, and scheduled debt amortization). -- S&P believes that if Altice USA defaulted, it would retain a viable business model fueled by continued demand for wired high-speed internet connections. The rating agency values the company at a 6x expected emergence-level EBITDA to determine debtholders' recovery prospects. The 6x multiple is at the lower end of the typical 6x-7x multiple S&P ascribes to incumbent cable operators to reflect heightened competition form Verizon in the Optimum footprint. -- Other key default assumptions include the $2.56 billion revolver is 85% drawn, an increased spread on the revolver to 5% as covenant amendments are obtained, and all debt having six months of prepetition interest. -- Secured debt is pari passu with unsecured guaranteed notes because they are issued by the same entity and both carry guarantees by the majority of operating subsidiaries whereas collateral for the secured debt only consists of a pledge of the capital stock of material operating subsidiaries. In a default scenario, this collateral, in S&P's view, would not provide lenders with incremental value relative to the guaranteed unsecured claims. Simulated default assumptions: -- Simulated year of default: 2024 -- EBITDA at emergence: $2.1 billion -- EBITDA multiple: 6x Simplified waterfall: -- Net enterprise value (after 5% administrative claims): $12.2 billion -- Obligor/nonobligor split (%): 100/0 -- Estimated secured credit facility and guaranteed claims: $17.2 billion -- Value available for secured and guaranteed claims: $12.2 billion -- Recovery expectations: 70%-90% (rounded estimate: 70%) -- Estimated senior unsecured claims: $7.6 billion -- Recovery expectations: 0%-10% (rounded estimate: 0%) -- Structurally subordinated claims: $670 million -- Recovery expectations: 0%-10% (rounded estimate: 0%) CYTOSORBENTS CORPORATION: Posts $2.9M Net Loss in 2nd Quarter ------------------------------------------------------------- Cytosorbents Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q, disclosing a net loss attributable to common shareholders of $2.87 million on $9.79 million of total revenue for the three months ended June 30, 2020, compared to a net loss attributable to common shareholders of $3.55 million on $6.23 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 attributable to common shareholders of $6.32 million on $18.50 million of total revenue compared to a net loss attributable to common shareholders of $8.43 million on $11.42 million of total revenue for the same period during the prior year. As of June 30, 2020, the Company had $49.26 million in total assets, $24.94 million in total liabilities, and $24.32 million in total stockholders' equity. Dr. Phillip Chan, MD, PhD, chief executive officer of CytoSorbents Corporation, stated, "As discussed in further detail in our preliminary Q2 2020 financial results and corporate update, our record quarterly financial results reflected strong CytoSorb sales in our underlying critical care business, further augmented by demand from the COVID-19 pandemic. We have now surpassed a major milestone, with more than 100,000 treatments delivered cumulatively worldwide, with distribution in 65 countries globally." "The second quarter of 2020 also brought some of the most exciting progress in our recent history, including bringing CytoSorb to the American public under FDA Emergency Use Authorization (EUA) for use in critically-ill COVID-19 patients with imminent or confirmed respiratory failure, FDA Breakthrough Designation to remove ticagrelor (Brilinta, AstraZeneca) during cardiac surgery, and E.U. CytoSorb approval to remove rivaroxaban (Xarelto, Bayer/Jannsen) during cardiothoracic surgery, complementing E.U. approval to remove ticagrelor obtained in January for the same application." "On July 24, 2020, we completed a landmark public offering of $57.5 million of our common stock, with net proceeds to the Company of approximately $54.0 million. A solid core of well-regarded, long-term, healthcare-focused institutional investors participated in the financing, which was co-led by Cowen and SVB Leerink acting as joint-book running managers and B. Riley FBR acting as co-manager. The financing has augmented our institutional ownership - a major goal of the financing, and also brings our current cash balance to approximately $89.0 million, our strongest capital position ever. Importantly, the financing gives us the growth capital to drive sales, clinical trials, and manufacturing expansion, while financing the company to expected GAAP (Generally Accepted Accounting Principles) profitability, and providing financial stability to weather these uncertain times. As part of the financing, we have contractually agreed to not raise additional equity capital (e.g. ATM facility, secondary public offering, etc.) for the next 90 days and have no current plans to raise additional funds." "One of the major reasons we did this fundraise now is to aggressively unlock the immediate U.S. opportunity to create potentially significant value for shareholders." Dr. Chan concluded, "The COVID-19 pandemic is now aggressively attacking the Americas, India, South Africa, and the Middle East, with second waves well underway in Eastern Europe, Southeast Asia, Japan, and other countries. Without a COVID-19 vaccine, the future is uncertain, with most expecting a second wave starting this fall. That said, we have not historically given specific financial guidance on quarterly results until the quarter has been completed. However, notwithstanding uncertainty related to the COVID-19 pandemic, based upon current order patterns, we expect that Q3 2020 will be one of the company's strongest quarters in terms of product sales." Since inception, the Company's operations have been primarily financed through the issuance of debt and equity securities. At June 30, 2020, the Company had current assets of approximately $41,948,000 including cash on hand of approximately $35,114,000 and current liabilities of approximately $15,664,000. On July 24, 2020, the Company closed the sale of approximately 6,052,631 shares of its Common Stock and received gross proceeds of approximately $57.5 million and, after deducting the underwriting discounts and commissions and expenses related to the offering, received total net proceeds of approximately $54 million. Prior to June 30, 2020, the Company's consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As a result of the Offering, the Company's cash balance increased to approximately $89.0 million, which the Company expects will fund the Company's operations well beyond the next twelve months. As a result, the Company has determined that the going concern risk has been eliminated. In early July 2020, the Company received approximately $2,414,000 in proceeds related to the sale of shares pursuant to the Open Market Sale Agreement with Jefferies LLC and B. Riley FBR, Inc. On July 31, 2019, the Company executed an Amendment to its Loan Agreement with Bridge Bank and, simultaneous with this Amendment, received $5 million in proceeds from an additional term loan. In addition, the Amendment extended the interest-only period of the loan through October 2020. Monthly principal payments of approximately $833,000 commence in November 2020. The Company believes that it has sufficient cash to fund its operations well into the future. A full-text copy of the Form 10-Q is available for free at: https://is.gd/WFU1po About CytoSorbents Based in Monmouth Junction, New Jersey, CytoSorbents Corporation is engaged in critical care immunotherapy, specializing in blood purification. Its flagship product, CytoSorb is approved in the European Union with distribution in 58 countries around the world, as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause massive inflammation, organ failure and death in common critical illnesses. These are conditions where the risk of death is extremely high, yet no effective treatments exist. As of March 31, 2020, the Company had $44.23 million in total assets, $22.91 million in total liabilities, and $21.31 million in total stockholders' equity. WithumSmith+Brown, PC, in East Brunswick, New Jersey, the Company's auditor since 2004, issued a "going concern" qualification in its report dated March 5, 2020 citing that the Company sustained net losses for the years ended Dec. 31, 2019, 2018 and 2017 of approximately $19.3 million, $17.2 million and $8.5 million, respectively. Further, the Company believes it will have to raise additional capital to fund its planned operations for the twelve month period through March 2021. These matters raise substantial doubt regarding the Company's ability to continue as a going concern. D/C DISTRIBUTION: Asbestos Claimants Allowed to Pursue Case ----------------------------------------------------------- Roderick Johnston, Rosalyn Johnston, Gary Neto, Larry Walker (through his estate), Thomas Sinclair, Carlton Keathley and Douglas Kuznik filed a Motion for Relief from the Automatic Stay as to Certain Asbestos Claimants to pursue in another forum their asbestos-related personal injury claims against Debtor D/C Distribution, LLC nominally. The Claimants do not seek to recover monetarily from the Debtor or its bankruptcy estate but rather to recover solely to the extent of and from any available insurance coverage. Kaanapali Land Company, LLC, the United States of America, on behalf of the Department of Defense, the Department of the Navy, and the Environmental Protection Agency, Fireman's Fund Insurance Company and Alex D. Moglia as chapter 7 trustee filed objections or responses to the Motion. Bankruptcy Judge Timothy A. Barnes grants the motion, finding that the Claimants have established both cause for relief from the stay and that the Debtor lacks equity in the property (insurance coverage). The Debtor filed for chapter 7 bankruptcy relief on July 17, 2007. The Debtor, formerly known as AMFAC Distribution Corporation, was the successor-in-interest by merger to three California corporations, who merged between 1976 and 1979. The companies are described by the Claimants as plumbing supply houses. The Claimants allege that they have sustained asbestos-related injuries due to exposure caused by the Debtor or its pre-merger predecessors and that the automatic stay in this case is preventing them from seeking redress. As such, they ask for relief from that stay to seek recovery against insurance policies under which the Debtor and/or its predecessors were defended and indemnified during the relevant time periods. Recovery will only be sought to the extent of and from insurance coverage. The Objecting Parties each argue that the Claimants may have claims against the policy issued by FFIC, which policy the Objecting Parties wish to use to settle the United States' claim against KLLLC and Oahu Sugar. KLLLC argues that the Motion should be denied because the Claimants have not filed claims in this case. KLLLC and FFIC argue that determination of which of the Policies apply to each of the Claimants cases will be a burden to the Trustee. KLLLC and FFIC also argue that the Claimants have not satisfied all of the factors set forth in In re Fernstrom Storage & Van Co., 938 F.2d 731, 735 (7th Cir. 1991). The Fernstrom factors are a three-part test stated by the Seventh Circuit in Fernstrom, but as used earlier by the District Court in another case. In In re Pro Football Weekly, 60 B.R. 824, 826 (N.D. Ill. 1986), the District Court considered whether a bankruptcy court was correct to lift the stay to "allow continuation of a pending lawsuit." The District Court adopted a test from an earlier bankruptcy court decision, asking whether: a) Any great prejudice to either the bankrupt estate or the debtor will result from continuation of a civil suit, b) the hardship to the [non-bankrupt party] by maintenance of the stay considerably outweighs the hardship of the debtor, and c) the creditor has a probability of prevailing on the merits of his case. In applying the Fernstrom factors, the court is mindful that KLLLC has argued that the Claimants should not qualify for any relief as there is no pending civil action. Citing section 362(d)(1)'s legislative history, KLLLC suggests in a footnote that because most of the Claimants have not filed lawsuits naming the Debtor, the Motion is "inconsistent with the paradigm case under Section 362(d)(1)." The Court says KLLLC's argument is simply misplaced. The Court explains the automatic stay is broader than as applied to existing lawsuits and nothing in section 362(a) (the automatic stay itself) or section 362(d) (relief from the stay) limits a party to seeking relief from stay when a contemplated suit has not yet been brought. Fernstrom seems to apply a test meant for existing suits in a broader context, but that serves to demonstrate not that cause cannot be demonstrated where the limited circumstances of Pro Football Weekly do not exist, but rather that courts should be flexible in weighing cause irrespective of the circumstances, the Court adds. KLLLC clearly does not think much of this argument, relegating it to a footnote. The Court thinks even less of it. Nothing in the statute limits the Claimants from seeking the relief they seek in the Motion under the circumstances at bar. KLLLC's footnote objection in this regard is overruled. As to the first Fernstrom factor, there is no "great prejudice" to the bankrupt estate or the Debtor if the Claimants are allowed to continue their actions nominally against the Debtor. This is a chapter 7 case, not a chapter 11 case as in Fernstrom. Questions of great prejudice to the Debtor are inapplicable. The Debtor in this chapter 7 case is a corporation and therefore is not eligible for a discharge. Once this case is closed, the Claimants will no longer be restrained by the automatic stay and may pursue the Debtor. Thus, harm to the Debtor is simply not a factor. Further, there is no reorganization plan to prejudice. What exists is a very old chapter 7 liquidation in which no concrete plans to monetize the affected Policies have been advanced. It is difficult to conclude prejudice where there is nothing to prejudice. The second factor under the Fernstrom analysis concerns balancing the hardship of the movants with the hardship to the debtor and whether one "considerably outweighs" the other. This is a chapter 7 bankruptcy with limited remaining assets. If the stay were lifted to allow the Claimants to pursue the Debtor's insurers, at most the Debtor would have to be involved in determining which insurer, if any, should defend each claim. This is something the Debtor would have to do no matter where and when6 the Claimants pursue their claims. Taking into account such equitable considerations, "[t]he equities weigh heavily in favor of [the Claimants]" who should be allowed to "establish liability in the tort system" so that they may recover any damages they have suffered against the Debtor's proper insurer. In weighing the harm to the Claimants of being denied redress versus the harm to a virtually nonexistent process here, the actual hardship to the Claimants considerably outweighs any ephemeral harm to the chapter 7 case or the Debtor. The Claimants have satisfied their burden with respect to the second Fernstrom factor. The third and final factor in the Fernstrom analysis is whether "the creditor has a probability of prevailing on the merits." Asbestos litigation is complex, as can be seen by the numerous defendants in each of the Claimants' state law complaints. All the Claimants have filed state court cases alleging asbestos-related injuries. One of those cases is set to go to trial within the year. The other six have apparently "proceeded and resolved" either through a judgment or settlement, suggesting they have probable claims as well. At the very least, the court can conclude that the underlying claims are not frivolous and that the Claimants have colorable claims. The Claimants have therefore established at least the requisite probability of prevailing on the merits. Nothing more is needed for this court's determination of their claims in the state court, the Court concludes. The bankruptcy case is in re: In re: D/C Distribution, LLC, Chapter 7, Debtor, Case No. 07bk12776 (Bankr. N.D. Ill.). A copy of the Court's Memorandum Decision dated July 21, 2020 is available at https://bit.ly/3hUcC8l from Leagle.com. DENBURY RESOURCES: Porter, Paul Weiss Represent Second Lien Group ----------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Paul, Weiss, Rifkind, Wharton & Garrison LLP and Porter Hedges LLP submitted a verified statement that they are representing the Second Lien Ad Hoc Committee in the Chapter 11 cases of Denbury Resources Inc., et al. The Second Lien Ad Hoc Committee of (i) 9% Senior Secured Second Lien Notes Due 2021, issued under that certain indenture, dated as of May 10, 2016, as amended, restated, amended and restated, supplemented or otherwise modified from time to time; (ii) 9 1⁄4% Senior Secured Second Lien Notes Due 2022, issued under that certain indenture, dated as of December 6, 2017, as amended, restated, amended and restated, supplemented or otherwise modified from time to time; (iii) 7 1⁄2% Senior Secured Second Lien Notes Due 2024, issued under that certain indenture, dated as of August 21, 2018 as amended, restated, amended and restated, supplemented or otherwise modified from time to time; and (iv) 7 3⁄4% Senior Secured Second Lien Notes Due 2024, issued under that certain indenture, dated as of June 19, 2019. In March 2020, certain members of the Ad Hoc Committee retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent them in connection with a potential financed restructuring of the above-captioned debtors and debtors-in-possession. In July 2020, certain members of the Ad Hoc Committee retained Porter Hedges LLP, as its co-counsel. As of Aug. 4, 2020, members of the Ad Hoc Committee and their disclosable economic interests are: Fidelity Investments, Inc. 245 Summer St. Boston, MA 02110 * 9.0% due 2021: 103,271,000 * 9.25% due 2022: 86,011,000 * 7.75% due 2024: 259,839,000 * Converts: 154,449,000 Capital Research and Management 399 Park Ave., 33th Fl. New York, NY 10022 * 9.0% due 2021: 54,006,000 * 7.75% due 2024: 32,185,000 * Equity: 60,000 shares GoldenTree Asset Management, LP 300 Park Ave., 21st Fl. New York, NY 10022 * 9.0% due 2021: 18,500,000 * 9.25% due 2022: 157,346,000 * 7.75% due 2024: 14,000,000 * 7.5% due 2024: 60,924,000 Cyrus Capital Partners, LP 65 East 55th St. 35th Fl. New York, NY 10022 * 9.0% due 2021: 93,410,000 * 9.25% due 2022: 2,336,000 Keyframe Capital Partners, L.P. 65 East 55th St. 35th Fl. New York, NY 10022 * 9.0% due 2021: 7,981,000 * 9.25% due 2022: 2,619,000 Aristeia Capital One Greenwich Plaza, 3rd Fl. Greenwich, CT 06830 * 9.0% due 2021: 29,553,000 * 9.25% due 2022: 24,780,000 * 7.75% due 2024: 18,828,000 * Converts: 11,776,000 * 5.50% due 2022: 172,000 * 4.625% 2023: 12,216,000 * Equity: 30,101,336 shares Nomura Corporate Research and Asset Management, Inc. 309 West 49th St. New York, NY 10019-7316 * 9.0% due 2021: 32,925,000 * 9.25% due 2022: 10,000 * 7.75% due 2024: 2,090,000 * Converts: 10,481,000 FS/EIG Advisor, LLC 600 New Hampshire Ave NW, Ste 1200 Washington, DC 20037 * 9.25% due 2022: 42,341,000 J.P. Morgan Investment Management Inc. 1 E Ohio St Indianapolis, IN 46204 * 9.0% due 2021: 14,522,000 * 9.25% due 2022: 31,791,000 AllianceBernstein, LP 1345 Avenue of the Americas New York, NY 10105 * 9.0% due 2021: 287,000 * 9.25% due 2022: 24,723,000 * 7.75% due 2024: 13,306,000 Counsel to the Ad Hoc Committee can be reached at: John F. Higgins, Esq. PORTER HEDGES LLP 1000 Main St., 36th Floor Houston, TX 77002 Telephone: (713) 226-6000 Facsimile: (713) 228-1331 Email: jhiggins@porterhedges.com - and - Andrew Rosenberg, Esq. Elizabeth McColm, Esq. Michael Turkel, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019 Telephone: (212) 373-3000 Facsimile: (212) 757-3990 Email: arosenberg@paulweiss.com emccolm@paulweiss.com mturkel@paulweiss.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/Bp50wm About Denbury Headquartered in Plano, Texas, Denbury Resources Inc. -- http://www.denbury.com-- is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. The Company's goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO2 enhanced oil recovery operations. As of March 31, 2020, the Company had $4.61 billion in total assets, $258.72 million in total current liabilities, $2.86 billion in total long-term liabilities, and $1.49 billion in total stockholders' equity. Denbury received on March 5, 2020 formal notice from the New York Stock Exchange that the average closing price of the Company's shares of common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price for continued listing on the NYSE. The NYSE notification does not affect Denbury's ongoing business operations or its U.S. Securities and Exchange Commission reporting requirements, nor does it trigger any violation of its debt obligations. Denbury is considering all available options to regain compliance with the NYSE's continued listing standards, which may include a reverse stock split, subject to approval of the Company's board of directors and stockholders. DONMAR RENTALS: Unsecureds Will be Paid in Full in Plan ------------------------------------------------------- Donmar Rentals, LLC and Donmar Equities, LLC, submitted a Pland and a Disclosure Statement. All holders of claims/creditors are being paid at least a portion of their claims: Class 1: Rentals Secured Claims (First Merchants) are impaired. First Merchants will have allowed secured claims for each property retained by Rentals to the Plan (the "Rentals Properties:), which shall be paid as follows: * Allowed Secured Claim of $23,715 secured by 1055 N. Main Street, Frankfort, Indiana, amortized over 20 years at the Till Rate, payable in equal monthly installments, commencing on the Initial Distribution Date, non-recourse as to Rentals. * Allowed Secured Claim of $76,112, secured by 254 S. East and 659 E. Walnut, Frankfort, Indiana, amortized over 20 years at the Till Rate, payable in equal monthly installments, commencing on the Initial Distribution Date, non-recourse as to Rentals. * Allowed Secured Claim of $33,861, secured by 551 E. Wabash Street, Frankfort, Indiana, amortized over 20 years at the Till Rate, payable in equal monthly installments, commencing on the Initial Distribution Date, non-recourse as to Rentals. * Allowed Secured Claim of $21,710, secured by 657 E. Clinton Street, Frankfort, Indiana, amortized over 20 years at the Till Rate in effect on the Effective Date, payable in equal monthly installments, commencing on the Initial Distribution Date, non-recourse as to Rentals. * Allowed Secured Claim of $18,859, secured by 701 N. Columbia Street, Frankfort, Indiana, amortized over 20 years at the Till Rate, payable in equal monthly installments, commencing on the Initial Distribution Date, non-recourse as to Rentals. * Allowed Secured Claim of $19,702, secured by 807-809 E. South Street, Frankfort, Indiana, amortized over 20 years at the Till Rate, payable in equal monthly installments, commencing on the Initial Distribution Date, non-recourse as to Rentals. Class 3: Rentals Unsecured Claims are impaired. Each Holder of an Allowed Unsecured Claim in Class 3 will be paid its pro rata share from excess cash flow for the calendar year ending one year from the Effective Date. This payment shall be in full satisfaction of such Allowed Unsecured Claims. Class 4: Equities Unsecured Claims are impaired. Clinton County will have Allowed Unsecured Class 4 Claim, in the amount of $108,151 which shall be paid in full by delivery of a quitclaim deed to Clinton County for 359 S. Main Street, with an attributed value of $70,000 (less than the 2019 assessed value of $78,000). All Holders of an Allowed Unsecured Claim of Equities, commencing on Initial Distribution Date, shall be paid the balance of their Allowed Unsecured Claim in 36 equal monthly installments The Plan will be funded by income generated by the Properties and any sales thereof. The Plan may also be funded by new financing secured by the Properties or unsecured loans. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/ycp8xrm2 from PacerMonitor.com at no charge. Counsel for the Debtors: Christine K. Jacobson Andrew T. Kight JACOBSON HILE KIGHT LLC 108 E. 9th Street Indianapolis, Indiana 46202 Tel: (317) 608-1132 (317) 608-1130 E-mail: cjacobson@jhklegal.com akight@jhklegal.com About DonMar Rentals DonMar Rentals, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 19-07510) on Oct. 8, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $50,001 and $100,000. Judge James M. Carr oversees the case. The Debtor tapped Christine K. Jacobson, Esq., at Jacobson Hile Kight LLC, as its legal counsel. No official committee of unsecured creditors has been appointed in the Debtor's case. DORAN HOLDING: Foreclosure Sale of NJ Property Upheld ----------------------------------------------------- The Superior Court of New Jersey affirms a Chancery Division order confirming a Special Master's foreclosure sale of 28 Garfield Place, South Hackensack, in New Jersey. On Feb. 19, 2019, the Special Master conducted a foreclosure sale of the Property to T&M Delivery Corporation (T&M) for $400,000. On July 14, 2011, Doran Holding Company and co-defendants Angelo Annuzzi and Dominick Annuzzi, individually and as Executrix (sic) of the Estate of Delores Annuzzi, executed a $200,000 promissory note in favor of plaintiff, Community Bank of Bergen County, N.J. Doran secured payment of the note by executing a $200,000 mortgage encumbering the Property. On Oct. 5, 2015, Community Bank filed a complaint to foreclose its mortgage on the Property, after defendants defaulted on August 12, 2015. At the time, defendants were indebted to Community Bank on multiple loans. In addition to a mortgage on the Property, Community Bank held mortgages on two other parcels owned by defendants: 22 Garfield Place, South Hackensack and 220 Bell Avenue, Lodi. On Dec. 1, 2015, defendants filed an answer alleging the mortgage was unenforceable, claiming it was procured by fraud and barred by the doctrines of unclean hands and frustration of purpose. On July 5, 2016, the parties filed a stipulation of settlement resolving their dispute. The stipulation granted defendants ninety days to repay the $1,127,000 they owed Community Bank. The agreement required defendants to pay $27,000 in June, $20,000 in July, $20,000 in August, and the remainder of $1,060,000 in September. After defendants failed to satisfy their obligations under the settlement agreement, on July 7, 2017, the trial court entered a final judgment in favor of Community Bank in the amount of $174,758.69, plus counsel fees. Judge Edward A. Jerejian then appointed attorney Frederic M. Shulman as a Special Master to conduct a foreclosure sale of the Property, after the Bergen County Sheriff did not conduct a sale of the Property within the 150 day-period prescribed in N.J.S.A. 2A:50-64 (3)(a). After two adjournments, on Oct. 2, 2017, Doran filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of New Jersey. As a result, the sale of the Property was stayed. In support of the motion they filed in the Bankruptcy Court, defendants submitted an appraisal report prepared for Community Bank, which valued the Property at $715,000. On Dec. 18, 2019, the Bankruptcy Court vacated the automatic stay to permit the Special Master to sell the Property to satisfy the debts owed. The court ruled the sale proceeds would be applied to first pay off the mortgage secured by the Property, then applied to pay off the debt secured by 22 Garfield Place, and lastly applied to pay the debt secured by 220 Bell Avenue. If the sale of the Property did not raise sufficient funds to pay off the mortgages, the court permitted the sale of 22 Garfield Place. Prior to the sale of the Property, Dominic Fittizzi, defendants' real estate broker, listed the Property for sale at $1,750,000. The 2019 real estate tax assessment for the Property was $891,900. In January 2019, Fittizzi received an all cash offer for $1,550,000; however, a municipal land use ordinance prohibited the buyer's intended use. On Feb. 7, 2019, the buyer withdrew the offer. On Feb. 19, 2019, the Special Master conducted a foreclosure sale of the Property to T&M2 for $400,000. On Feb. 26, 2019, the Special Master filed a motion to confirm the foreclosure sale. On March 1, 2019, Fittizzi received another offer to purchase the Property from an unrelated third party for $1,400,000. Doran accepted the offer on March 3, 2019. In a certification opposing confirmation of the Special Master's sale, Fittizzi opined that based on the two offers he received, the sale to T&M was "shockingly and unreasonably low, and grossly unfair to Doran." He additionally stated the Property "can and will be sold for $1.4 million to the current proposed buyer or for more than $1 million to any legitimate third party buyer, if a reasonable amount of time is permitted to close the transaction (or to continue the marketing, as applicable)." On March 14, 2019, the Bankruptcy Court denied Doran's motion to vacate the stay relief and reinstate the automatic stay and reinstate the automatic stay with respect to Community Bank. On March 19, 2019, Chancery Division Judge Joan Bedrin Murray granted Community Bank's motion to confirm the Special Master's foreclosure sale. The judge distinguished this case from Ryan v. Wilson, 64 N.J. Eq. 797 (E & A. 1902), explaining no irregularities existed in the Property to prevent its sale. The judge ruled that Doran's alleged contract entered into after the Special Master's sale was merely a "letter of intent." The court found defendants received proper notice and the sale was properly executed. Defendants now appeal from the March 19, 2019 order confirming the foreclosure sale of the Property for $400,000. On appeal, Doran continues to argue that the Superior Court follow Ryan, where the court refused to confirm the sale of two mills because assets inside the mills were four times more valuable than the value of the mills. Thus, the court found it reasonable to sell the assets in the mills first. The Superior Court discerns no similar facts or circumstances in the case under review to justify vacating the foreclosure sale under the rationale in Ryan. In fact, besides the sale price, Doran asserts no other allegations against Community Bank. The Special Master sold the Property for $400,000. The trial court found defendants received proper notice of the sale, the sale was proper under the circumstances, and there were no irregularities in the sale to vacate it. We agree with the trial court. While the tax assessment for the Property listed its value at $891,900, the sales price was not so grossly inadequate as to support an inference of fraud. Further, the sales price does not shock the judicial conscience, and there was no independent substantive ground for equitable relief. Doran argues we should prevent T&M from receiving a good bargain, but does not provide any meritorious argument why T&M's leasehold interest should have precluded its successful effort to purchase the Property. Thus, the Superior Court concludes the alleged inadequacy of the sales price, standing alone, is insufficient to justify vacating the sale. Doran also argues the judge should have permitted it to proceed with the sale of the Property to another purchaser, who submitted its offer after the foreclosure sale. The judge found the evidence produced by defendants did not establish a written contract for the sale of the Property, but rather the document was merely a letter of intent. The record clearly supports the judge's finding. The document essentially presented a preliminary non-binding conditional offer, which at most, constituted a first step in negotiations, far from a firm offer to purchase the Property. Additionally, Doran failed to produce evidence of a deposit tendered by the prospective purchaser, or proof of its financial ability to complete the transaction. Thus, Doran failed to provide the court with any valid basis to deny confirmation of the foreclosure sale. The Superior Court finds no basis to conclude the judge abused her discretion when she confirmed the foreclosure sale to T&M. A copy of the Court's Opinion dated July 21, 2020 is available at https://bit.ly/2BHvyaV from Leagle.com. The appellate case is captioned COMMUNITY BANK OF BERGEN COUNTY, NJ, Plaintiff-Respondent, v. DORAN HOLDING COMPANY, Defendant-Appellant, and DOMINICK ANNUZZI, as Executrix of the Estate of DOLORES ANNUZZI, DOMINICK ANNUZZI, and ANGELO ANNUZZI, Defendants, No. A-3751-18T2, (N.J. Super. App. Div.). McManimon Scotland & Baumann LLC, attorneys for appellant ( Sam Della Fera -- sdellafera@msbnj.com -- of counsel and on the brief). Getler Gomes & Sutton, PC, attorneys for respondent Community Bank of Bergen County, NJ ( Janine A. Getler, of counsel and on the brief). McCalla Raymer Leibert Pierce, LLC, attorneys for respondent T&M Delivery Corp. ( Richard P. Haber, on the brief). About Doran Holding Company Doran Holding Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 17-29969) on Oct. 2, 2017. In the petition signed by Angelo Annuzzi, its president, the Debtor estimated assets of $1,000,001 to $10,000,000 and liabilities of less than $500,000. Judge Stacey L. Meisel presided over the case. The Debtor hired McManimon Scotland & Baumann, LLP, as counsel. EDGEWATER RNH: Unsecureds Will be Paid From Funds Remaining ----------------------------------------------------------- Edgewater RNH, LLC, filed a Plan of Reorganization and a Disclosure Statement. The Debtor owned three improved real properties which it leased to separate management companies to operate restaurants on the properties under the trade name Red Neck Heaven. Class 6 Unsecured Claims totaling $773,401 will be paid the net amount, pro rata, after all higher ranked claims have been paid. Payment to unsecured creditors, if any, will be made at or shortly following the expiration of the Plan Period without necessity to obtain leave of Court. The Debtor;s primary source of income was from the RNH Leases. A full-text copy of the Plan of Reorganization and Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/yano9omg from PacerMonitor.com at no charge. Attorney for the Debtor: Bruce W. Akerly AKERLY LAW PLLC’ 878 S. Denton Tap Road, Suite 100 Coppell, TX 75019 Tel: (469) 444-1864 E-mail: bakerly@akerlylaw.com About Edgewater RNH LLC Edgewater RNH LLC's business consists of the ownership and leasing of three real properties: two in Tarrant County and one in Denton County, Texas. Edgewater RNH LLC filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-63869) on March 3, 2020. In the petition signed by William A. Tinker, managing member, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Debtor tapped Bruce Akerly, Esq., at AKERLY LAW PLLC, as its counsel. EIGHTY-EIGHT HOMES: Seeks 60-Day Extension of Deadline to File Plan ------------------------------------------------------------------- Eighty-Eight Homes LLC, moves the bankruptcy court for an order extending the time to file a Plan and a Disclosure Statement. Because the petition was filed on April 30, 2020, and because Debtor is a single asset real estate entity, pursuant to 11 USC Sec. 362(d)(3), Debtor had until July 29, 2020 to file a plan of reorganization that has a reasonable possibility of being confirmed within a reasonable time. If Debtor fails to either file such a plan or obtain an extension of time by July 30, 2020, the Debtor's secured creditor will likely be able to obtain relief from stay, which will extinguish all possibility of a reorganization. Upon review of certain information, counsel for the Debtor-In-Possession has decided that it is in the best interest of the estate to seek an extension of time to file a chapter 11 plan. The Debtor prays that the Court issue an order extending the time to file a Plan and Disclosure Statement by 60 days. Attorneys for the Debtor: LARS T. FULLER SAM TAHERIAN JOYCE K. LAU THE FULLER LAW FIRM, P.C. 60 No. Keeble Ave. San Jose, CA 95126 Telephone: (408)295-5595 Facsimile: (408) 295-9852 About Eighty-Eight Homes Eighty-Eight Homes LLC is engaged in activities related to real estate. The company owns in fee simple a property located at 808 S Main St Milpitas, CA 95035, having a current value of $8.5 million. Eighty-Eight Homes filed its voluntary petition under Chapter 11 of the Bankruptcy Court (Bankr. N.D. Cal. Case No. 20-50712) on April 30, 2020. In the petition signed by Mary Ly, managing member, the Debtor disclosed $8,645,000 in assets and $10,684,110 in liabilities. Lars Fuller, Esq., at the Fuller Law Firm, PC, represents the Debtor. ELEMENT SOLUTIONS: Moody's Rates $800MM Unsec. Notes Due 20208 'B2' ------------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Element Solutions Inc's $800 million senior unsecured notes due 2028. Element Solutions Inc's Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, SGL-2 Speculative Grade Liquidity rating and Ba2 first lien senior secured credit facility ratings are unchanged. The outlook is negative. "The note issuance will allow Element Solutions to take advantage of the current low interest rate environment and should materially reduce cash interest and extends the maturity profile," said Domenick R. Fumai, Moody's Vice President and lead analyst for Element Solutions Inc. Assignments: Issuer: Element Solutions Inc Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD5) RATINGS RATIONALE The senior unsecured notes are rated B2 reflecting their effective subordination to the still sizable amount of secured debt in the capital structure. The rating on the senior unsecured notes also reflects expectations that the amount of secured debt could increase from the current level in the future to fund either acquisitions or share repurchases. The first lien term loan is secured by a first lien on the assets of the borrower and guarantors, which include domestic subsidiaries. Element Solutions intends to use the net proceeds of the new issue, in addition to cash on the balance sheet, towards redeeming the company's entire outstanding $800 million 5.875% senior unsecured notes due 2025, including accrued and unpaid interest, if any, along with fees and expenses related to the transaction. Moody's expects this leverage-neutral transaction should materially reduce cash interest expense based on the current interest rate environment, further strengthening free cash flow, and also extends the debt maturity profile. The Ba3 CFR rating considers Element Solution's solid liquidity, attractive margins, variable cost structure and asset-light business model that will allow the company to generate free cash flow and eventually restore metrics commensurate with the existing rating. The credit profile incorporates its solid, globally diversified business with leading positions in niche segments and exposure to favorable long-term trends in 5G technology, increased electronic content in automobiles and the Internet of Things. The rating is constrained by the company's significant exposure to the cyclical automotive and electronics industries. The rating also considers expectations that cash balances will be prudently managed during the downturn to mitigate the impact of slower macroeconomic growth and exposure to these industries. The lack of a long-term operating history under the new financial policy, which includes the company's public statement to maintain net leverage according to management's calculation below 3.5x, is tempered by expectations that future free cash flow generation will be used for share repurchases and M&A, rather than additional debt reduction. Moody's expects the company to maintain good liquidity over the next 12 months. Element Solutions has available cash on the balance sheet of approximately $237 million and full availability under its $330 million revolving credit facility as of June 30, 2020. Moody's also expects Element Solutions to generate positive free cash flow, which should further enhance its liquidity profile. The negative outlook reflects Moody's expectations that credit metrics will weaken in 2020 as several of Element's major end markets, including autos and electronics, continue to suffer from weaker demand as economic growth falters due to the coronavirus pandemic. Moody's would likely revise the outlook back to stable upon evidence that the economic weakness does not persist for more than several quarters and Element is able to restore financial metrics consistent with the Ba3 rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would likely consider a downgrade if leverage is sustained above 4.0x, free cash flow is negative for a sustained period, or the company uses cash on the balance sheet for share repurchases or acquisitions before restoring credit metrics. Although unlikely given the challenging economic conditions, an upgrade would be contingent on financial leverage, including Moody's standard adjustments, remaining well below 3.5x, maintaining retained cash flow-to-debt (RCF/Debt) above 17% and consistently generating positive free cash flow. The principal methodology used in these ratings was Chemical Industry published in March 2019. Headquartered in Fort Lauderdale, FL, Element Solutions Inc is a public company that produces a wide array of specialty chemicals and materials primarily sold into the automotive, electronics and industrial markets with leading positions in a number of niche markets. The company operates in two business segments: Electronics and Industrial & Specialty. Element Solutions had sales of approximately $1.8 billion for the last twelve months ended June 30, 2020. EMERGENT BIOSOLUTIONS: S&P Assigns 'BB' ICR; Outlook Stable ----------------------------------------------------------- S&P Global Ratings assigned its 'BB' issuer credit rating to U.S.-based specialty pharmaceutical manufacturer and contract development and manufacturing organization (CDMO) Emergent BioSolutions Inc. (Emergent). At the same time, S&P assigned its 'BB-' issue-level rating to the $400 million in unsecured notes proposed by Emergent to pay down current outstanding borrowings under its revolving credit facility and for general corporate purposes. The recovery rating is '5', reflecting S&P's expectation for modest recovery (10%-30%; rounded estimate: 10%) in the event of payment default. S&P's rating reflects Emergent's leading drugs in niche areas and long-standing relationship and partnership with the U.S. government for drug development and manufacturing. Emergent focusses exclusively on products and services that combat public health threats. The company partners with the U.S. government via major contracts to supply the Strategic National Stockpile (SNS) for anthrax and smallpox vaccines, and also manufactures products that address chemical weapon threats, opioid overdose, and infectious diseases. While Emergent holds a leading market share position in most of its product categories, the addressable markets remain very niche. The company also operates nine global development and manufacturing sites, supporting a growing CDMO business. Long-standing and contractual government relationships support revenue stability, but organic growth drivers remain a point of concern. Emergent has several long-standing procurement contracts with government agencies, including a 10-year contract to supply smallpox vaccine ACAM2000 to the national stockpile signed in September 2019. These multiyear contracts (accounting for 61% of 2019 revenues) provide good stability and visibility for revenue when compared with other specialty pharmaceutical peers. The company also has a demonstrated ability to renew these contracts: since 1997, the department of Health and Human Services (HHS) has renewed the procurement contract for anthrax vaccines seven times. Emergent has seven programs that are funded by the government and/or NGO partners, including the next-generation candidate for anthrax, AV7909. Emergent also operates one of only three Centers for Innovation in Advanced Development and Manufacturing (CIADM) designated facilities in the U.S. "While we view barriers to entry as high, we think it will be difficult for Emergent to drive organic growth in its product portfolio going forward, given the limited size of end markets and a relatively light pipeline. While the company currently has more than 15 products in development, we do not think any will be a material contributor in the near term," S&P said. Product concentration is relatively high, but a growing CDMO segment improves diversification. Emergent's top-three products (Narcan, ACAM2000, and BioThrax/AV7909) accounted for 89% of product revenues during the six-month period ended June 30, 2020. While this compares unfavorably with other specialty peers, S&P expects diversification will improve substantially this year from a growing CDMO segment. In the wake of the COVID-19 pandemic, Emergent was well positioned to partner with prospective vaccine manufacturers and the Biomedical Advanced Research and Development Authority (BARDA) to provide development and manufacturing services. S&P expects CDMO services to account for around 30% of total year-end 2020 revenues. S&P expects COVID-19-related tailwinds to drive rapid growth through 2021. Emergent has contracted around $1.5 billion in CDMO revenue since March. This includes more than $600 million from the US government to reserve manufacturing capacity through 2021 and expand viral and non-viral CDMO capacity. Emergent also signed significant five-year contracts with Johnson & Johnson and AstraZeneca to develop and manufacture their COVID-19 vaccine candidates. Given the temporary nature of these contracts, S&P thinks it may be challenging for Emergent to sustain CDMO growth in a post-COVID environment. Nevertheless, the rating agency expects total revenue to grow at 30% through 2021. Top product Narcan is facing near-term generic competition. Narcan, Emergent's Naloxone nasal spray, accounted for 25% of 2019 revenues. On June 5, 2020, the U.S. District Court in New Jersey invalidated four patents protecting Narcan, clearing the path for Teva to release a generic competitor in the near term. S&P anticipates a late-2020 or early-2021 launch for generic competition, but think that downside risk is somewhat mitigated by Narcan's exposure to Public Interest Pricing (PIP) markets (approximately 60% of sales), where it is already offered at a highly discounted price. "Credit measures are very strong, but we expect Emergent to be active in pursuing acquisitions. We expect that the influx of new CDMO contracts will more than make up for lost sales of Narcan over the next 12 months, driving 30% revenue growth and free cash generation of more than $200 million," S&P said. "We forecast adjusted leverage of just 1.6x at 2020 year-end, but expect that Emergent will continue to pursue acquisitions at its historical rate. The company has publicly indicated a target net leverage range of 2x-3x. Over the next 18 months, we estimate that Emergent has around $1.2 billion in capacity for M&A before leverage exceeds 3x," the rating agency said. The stable outlook reflects S&P's expectation for double-digit percent revenue growth during 2020 and 2021, driven by COVID-19 related CDMO contracts. It also reflects S&P's expectation for adjusted leverage sustained between 2x and 3x long term, despite M&A activity. "We could consider lowering the rating if Emergent demonstrates a more aggressive financial policy than expected, such that adjusted leverage is sustained above 3x. We estimate that the company has around $1.2 billion in capacity for acquisitions, share repurchases, or dividends before reaching this point," S&P said. "Although very unlikely, we could consider raising the rating if Emergent was able to materially diversify its product concentration and expand its product offerings while maintaining leverage below 3x," the rating agency said. EXIDE TECHNOLOGIES: Gets Court OK to Give Execs Ch. 11 Bonuses -------------------------------------------------------------- Law360 reports that a Delaware judge on June 29, 2020 gave his nod to Exide Technologies LLC's plan to award up to roughly $1 million in bonuses to three executives in its Chapter 11, despite the federal bankruptcy watchdog flagging targets that will trigger the bonuses as too easy to achieve. During a virtual hearing, U.S. Bankruptcy Judge Christopher S. Sontchi said Exide had shown enough evidence to support its contention that the bonuses are meant to incentivize the three executives, including the company's CEO, to meet certain benchmarks related to financial performance and the sale of company assets during the Chapter 11. About Exide Technologies Headquartered in Milton, Ga., Exide Technologies (NASDAQ: XIDE) --http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002, and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. Exide disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant and GCG as claims agent. Schnader Harrison Segal & Lewis LLP was tapped as special counsel. The Official Committee of Unsecured Creditors was represented by Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co-counsel. Zolfo Cooper, LLC served as its bankruptcy consultants and financial advisors. Geosyntec Consultants was tapped as environmental consultants to the Committee. Robert J. Keach of the law firm Bernstein Shur was appointed as fee examiner. He hired his own firm as counsel. Exide said its Plan of Reorganization became effective on April 30, 2015, and that the Company emerged from Chapter 11 as a newly reorganized company. The Bankruptcy Court confirmed the Plan on March 27, 2015. FANSTEEL INC: Aug. 6 Hearing on Disclosures and Plan ---------------------------------------------------- Judge Anita L. Shodeen has ordered that the timely filed objections to the amended disclosure statement and plan of Fansteel, Inc., will be heard via telephonic hearing on Aug. 6, 2020 at 10:00 a.m. In the event no objections are filed the Court will conduct the hearings on the approval of the disclosure statement and confirmation of the plan hearing telephonically or by video on August 6, 2020 at 10:00 a.m. About Fansteel and Affiliates Headquartered in Creston, Iowa, Fansteel, Inc., manufactures aluminum and magnesium castings for the aerospace and defense industries. Fansteel has four locations in the USA and one in Mexico and has a workforce of more than 600 employees. Fansteel generated $87.4 million in revenue in 2015 on a consolidated basis. Wellman Dynamics Corporation contributed 67% of Fansteel's sales. The rest of the sales are generated from Intercast, a division of Fansteel, and other non-debtor subsidiaries. Fansteel, Wellman Dynamics, and Wellman Dynamics Machinery & Assembly, Inc., filed Chapter 11 petitions (Bankr. S.D. Iowa Case Nos. 16-01823, 16-01825 and 16-01827) on Sept. 13, 2016. The petitions were signed by Jim Mahoney, CEO. The cases are assigned to Judge Anita L. Shodeen. The Debtors disclosed total assets of $32.9 million and total debt of $41.97 million. The companies tapped Jeffrey D. Goetz, Esq., and Krystal R. Mikkilineni, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., as counsel; RSM US LLP as tax advisor; Jeffrey Sands and Dorset Partners, LLC as business broker; and Mark J. Steger, Esq., at the Clark Hill Law Firm, as Environmental Counsel. The companies filed motions to jointly administer the cases pursuant to Bankruptcy Rule 1015(b), and the court ordered the joint administration on Oct. 17, 2016. The court subsequently entered an order on May 24, 2017, vacating its Oct. 17 order and discontinuing the joint administration of the cases under the lead case of Fansteel. On Sept. 23, 2016, the U.S. Trustee for Region 12 appointed an official committee of unsecured creditors in Fansteel's bankruptcy case. The committee retained Morris Anderson & Associates, Ltd., as financial advisor; and Archer & Greiner, P.C. and Nyemaster Goode, P.C., as counsel. In March 2017, the U.S. trustee announced that the unsecured creditors' committee of Fansteel would no longer serve as the official committee in its case and that it would be reconstituted as the official committee of unsecured creditors in the Chapter 11 cases of Wellman Dynamics and Wellman Dynamics Machinery. As of March 22, 2017, a new creditors' committee has not yet been appointed in Fansteel's bankruptcy case. Wellman Dynamics filed a Chapter 11 plan of reorganization and disclosure statement on Jan. 11, 2017. On May 8, 2017, the creditors' committee of Wellman Dynamics filed a rival Chapter 11 plan of liquidation for the company. FIELDWOOD ENERGY: Fitch Cuts LT IDR to 'D' on Bankruptcy Filing --------------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Issuer Default Rating of Fieldwood Energy LLC to 'D' from 'C'. The senior first lien secured term loan was downgraded to 'C'/'RR5' from 'CCC'/'RR1' and the second lien secured term loan was affirmed at 'C'. The recovery rating was lowered to 'RR6' from 'RR5' on the second lien secured term loan. Fieldwood's 'D' rating reflects the announcement that the company has filed Chapter 11 under the U.S. Bankruptcy Code. The company entered into a restructuring support agreement with its lenders, which was filed on Aug. 4, 2020. The company had entered into multiple forbearance agreements with its lenders since May, which allowed Fieldwood to skip principal and interest payments. Fitch's downgrade on the senior secured term loan reflects the lower going-concern valuation applied to Fieldwood, which considers the potential acceleration of the present value of Asset Retirement Obligations, a liquidity discount for the lack of strategic and investor demand for offshore E&P assets, challenged high-yield oil & gas capital market access and the historically low oil price environment. Fieldwood has suffered from the low oil price environment following the onset of the coronavirus exacerbated by the short-term supply increase when OPEC+ failed to reach a production level agreement. The company has had to shut-in production due to storage limitations and weak economics at current pricing levels. In addition, FWE has limited liquidity as it was fully drawn on its revolver and delayed-draw term loan under the GS credit facility, was likely to generate FCF deficits in the current pricing environment, and lacked access to debt capital markets that was necessary to refinance near-term maturities. KEY RATING DRIVERS Bankruptcy Filing: Fieldwood filed Chapter 11 under the U.S. Bankruptcy Code on Aug. 3, 2020. This follows the entrance in multiple forbearance agreements with its lenders since May, which allowed the company to skip principal and interest payments. Fieldwood entered into a restructuring support agreement with its lenders. Weak Hedging Program: Fieldwood has hedged approximately 100% of its expected production during March to June 2020 at relatively high prices. However, there is little hedged in in the second half of 2020 and none beyond. The company monetized 2.5 mmbls of its 2020 hedges for $55 million, which increased liquidity, but also exposes Fieldwood in an event that oil prices do not recover during the second half of the year. Small Offshore E&P Profile: Fieldwood's focus as a small, private equity sponsored player in the offshore shallow and Deepwater Gulf of Mexico region results in an asset profile that is different from the typical shale-driven onshore E&P. Differences include relatively low asset acquisition costs, lower decline rates, and higher oil and gas price realizations. Challenges associated with the business model include materially higher environmental remediation costs, the need to post significant financial assurances to third parties to guarantee remediation work, and the tail risks from hurricane activity and potential offshore oil spills. As a smaller operator, the company also relies on third-party infrastructure, which can result in periodic shut-in production during planned and unplanned maintenance. Substantial Decommissioning Costs: Because of its focus on mature offshore assets, Fieldwood has inherited substantial environmental liabilities versus onshore peers. At YE 2019, Fieldwood had an Asset Retirement Obligation of approximately $1.22 billion, and relatively high related plugging and abandonment spending. Run-rate P&A spending is estimated by the company in the $100 million-$150 million per year range, with a 2019 spend of $163 million. Given current liquidity constraints, Fieldwood plans to substantially curtail P&A spending in 2020. Fieldwood views its ability to efficiently decommission infrastructure as a competitive advantage. In recent years, the company has plugged and abandoned the majority of decommissioned facilities on the GoM shelf, giving it experience in remediation that many other E&Ps lack. There is considerable variation around estimates for remediation costs, which could pose a risk to cash flows in the event of unfavorable fluctuations. Fitch recognizes that the company's decommissioning reserves and other assurance will help offset some of these costs. This includes $500 million in local currency and surety bonds pledged to remediate the Apache properties, as well as a separate decommissioning Trust A fund. This trust owns a 10% net profits interest in the assets acquired from Apache. Fieldwood makes monthly cash contributions to the Trust until the total security held reaches $800 million or 125% of the remaining liability. Regulatory Environment Improved: The regulatory environment for offshore operators has improved in some regards under the Trump administration, and Fieldwood has not been required to post material additional bonds to the Bureau of Ocean Energy Management following its 2016 notice to lessees regarding potential supplemental bond requirements for decommissioning activities on leases in GoM. However, the company's overall exposure to this issue is material, and the risk exists that this treatment could be reversed, particularly in the event of a future change in administrations. KEY ASSUMPTIONS KEY RECOVERY RATING ASSUMPTIONS -- The recovery analysis assumes that Fieldwood would be reorganized as a going-concern in bankruptcy rather than liquidated; -- Fitch assumes a 10% administrative claim. Going-Concern Approach Fieldwood's GC EBITDA assumptions reflect Fitch's projections under a base case price deck, which assumes WTI oil prices of $32 in 2020, $42 in 2021, $50 in 2022, and a long-term price of $52. The GC EBITDA assumption reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. The GC EBITDA assumption uses 2021 EBITDA, which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. An EV multiple of 2.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: The historical bankruptcy case study exits multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.6x and median of 6.1x; Median observed offshore transactions are in the 2.0x-3.0x range. The lower going-concern valuation applied to Fieldwood reflects the potential acceleration of the present value of Asset Retirement Obligations, a liquidity discount for the lack of strategic and investor demand for offshore E&P assets, challenged high-yield oil & gas capital market access and the historically low oil price environment. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch used historical transaction data for the GoM blocks on a $/bbl, $/1P, $/2P, $/acre and PV-10 basis to attempt to determine reasonable sales based on M&A transactions greater than $100 million. The super senior GS credit facility is assumed to be fully drawn upon default. The GS credit facility is senior to the first- and second-lien term loans. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' recovery for the super senior GS credit facility, a 'RR%' for the first-lien term loan, and a recovery corresponding to 'RR6' for the second-lien term loan. RATING SENSITIVITIES Rating sensitivities are not applicable, as the company has filed for bankruptcy. 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 Fieldwood has an Environmental, Social and Governance Relevance Score of '4' for waste and hazardous materials management/ecological impacts, due to the enterprise-wide solvency risks that an offshore oil spill poses for an E&P company of Fieldwood's small size and limited financial resources. This factor has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). FIELDWOOD ENERGY: Moody's Cuts PDR to D-PD on Bankruptcy Filing --------------------------------------------------------------- Moody's Investors Service downgraded Fieldwood Energy LLC's Probability of Default Rating to D-PD from Ca-PD/LD. Fieldwood's other ratings were affirmed, including its Ca Corporate Family Rating, Caa3 first-lien secured term loan rating, and C second-lien secured term loan rating. The rating outlook is negative. These actions follow the company's bankruptcy filing on August 4, 2020. Downgrades: Issuer: Fieldwood Energy LLC Probability of Default Rating, Downgraded to D-PD from Ca-PD /LD Affirmations: Issuer: Fieldwood Energy LLC Corporate Family Rating, Affirmed Ca Senior Secured 2nd Lien Term Loan, Affirmed C (LGD5) Senior Secured 1st Lien Term Loan, Affirmed Caa3 (LGD3) Outlook Actions: Issuer: Fieldwood Energy LLC Outlook, Remains Negative RATINGS RATIONALE The affirmation of the Ca CFR and other debt instruments' ratings reflects Moody's view on expected recoveries. Shortly after its rating action, Moody's will withdraw all of Fieldwood's ratings, and no changes to the ratings are expected prior to the withdrawal. Fieldwood Energy LLC is an independent oil and gas exploration and production company headquartered in Houston, Texas. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. FOLSOM FARMS: US Trustee Objects to Disclosure Statement -------------------------------------------------------- Gregory M. Garvin, Acting United States Trustee for Region 18, objects to the Disclosure Statement filed by Folsom Farms, LLC. The U.S. Trustee complains that the Disclosure Statement and accompanying Plan are vague and lack even basic information about Debtor's operations, assets, and prospects for reorganization. The U.S. Trustee points out that the Disclosure Statement does not provide any details on the proposed refinance. The U.S. Trustee asserts that the Disclosure Statement contains no historical or current financial information that would give creditors perspective on Debtor's current financial situation and prospects under the plan. According to the U.S. Trustee, the Disclosure Statement and Plan do not disclose the identity and affiliations of any individual proposed to serve as management as required by 11 U.S.C. Sec. 1129(a)(5). The U.S. Trustee complains that the Disclosure Statement does not contain and description any administrative expenses that have accrued so far in the case, including under the retainer agreement attached to the Order for the Employment of Counsel for Debtor-in-Possession, ECF Doc. No. 41. The U.S. Trustee points out that the Disclosure Statement contains no information as to the current leases on Debtor's property or whether they have changed post-petition, it is unclear whether Debtor is continues to lease property to an entity growing hemp or other cannabis plants. About Folsom Farms Folsom Farms, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B). Folsom Farms sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 20-30575) on Feb. 19, 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 Peter C. McKittrick oversees the case. Sally Leisure, Esq., at SRL Legal, LLC, is the Debtor's legal counsel. FORESIGHT ENERGY: Announces Reorganization Plan Implementation -------------------------------------------------------------- Foresight Energy LP announced that it has consummated its chapter 11 plan of reorganization (the "Plan"). In connection with consummation of the Plan on June 30, 2020 (the "Effective Date"), all of Old Foresight’s assets with exception of Foresight Energy LP, Foresight Energy GP LLC, and Foresight Energy LLC (but otherwise including such entities' assets) were transferred to Foresight Energy Operating LLC, a newly formed Delaware limited liability company that is wholly-owned by Foresight Energy Resources LLC, a Delaware limited liability company. Foresight Energy LP, Foresight Energy GP LLC, and Foresight Energy LLC will be dissolved. Foresight Energy Resources LLC (together with its direct and indirect subsidiaries, “Foresight”) is the new parent company for OldForesight's non-dissolving subsidiaries and go-forward business. Pursuant to the Plan, Foresight discharged over $1 billion of indebtedness and eliminated approximately $94 million of anticipated annual cash interest payments, plus additional reductions in annual cash flow expenses through modified contractual terms with key logistics, mineral interest, and vendor counterparties. Holders of Old Foresight's limited partnership units received no recovery under the Plan. Additionally, pursuant to the Plan, Foresight has emerged from chapter 11 with only $225 million in secured exit facility loans (the "Exit Facility"), $75 million of which will convert to equity 60 days following the closing of the Exit Facility, and will have approximately $65 million in cash liquidity. "We are thankful to our many stakeholders, including our creditors, employees, customers, vendors, trade creditors, and key contract counterparties, for their continued support. With their cooperation, we have been able to implement our reorganization plan within four months of entering chapter 11. As a result of this support, we have achieved a capital structure that provides our very productive and low cost mining operations the ability to aggressively compete domestically and globally in a very competitive coal market. We look forward to the future under our new ownership and capital structure," said Robert D. Moore, Chief Executive Officer. Foresight's Plan and the order of the Court confirming the Plan were previously provided in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission on June 24, 2020, which can be viewed on the SEC's website at http://www.sec.gov. Additional information is available by calling (833) 991-0977 (toll free) or (503) 597-7679 (international). Court filings and other information related to the court-supervised proceedings are available at a Web site administered by Foresight's claims agent, Prime Clerk LLC, at https://cases.primeclerk.com/foresightenergy. About Foresight Energy Foresight Energy and its subsidiaries -- http://www.foresight.com/ -- are producers of thermal coal, with four mining complexes and nearly 2.1 billion tons of proven and probably coal reserves strategically located near multiple rail and river transportation access points in the Illinois Basin. The Debtors also own a barge-loading river terminal on the Ohio River. From this strategic position, the Debtors sell their coal primarily to electric utility and industrial companies located in the eastern half of the United States and across the international market. Foresight Energy LP and its affiliates sought Chapter 11 protection (Bankr. E.D. Mo. Lead Case No. 20-41308) on March 10, 2020. The Hon. Kathy A. Surratt-States is the case judge. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to Foresight Energy; Jefferies Group is acting as investment banker; and FTI Consulting, Inc. is acting as financial advisor. Prime Clerk LLC is the claims agent at https://cases.primeclerk.com/ForesightEnergy Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel and Lazard Freres & Co. LLC is acting as investment banker to the Ad Hoc Lender Group representing lenders under the first lien credit agreement. Milbank LLP is acting as legal counsel and Perella Weinberg Partners LP is acting as investment banker to the Ad Hoc Lender Group representing crossover lenders under each of the second lien indenture and first lien credit agreement. The Debtors were estimated to have $1 billion to $10 billion in assets and liabilities. FORUM ENERGY: Moody's Hikes CFR to Caa2 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service upgraded Forum Energy Technologies, Inc.'s Corporate Family Rating to Caa2 from Ca, Probability of Default Rating to Caa2-PD from Ca-PD and Speculative Grade Liquidity rating to SGL-3 from SGL-4. Moody's assigned a Caa3 rating to Forum's convertible senior secured notes due 2025. Moody's upgraded the rating on the remainder of the existing senior unsecured notes due 2021 to Ca from C. The outlook was changed to stable from negative. "The upgrade of Forum's ratings reflects the extended debt maturity profile and resulting improvement in liquidity," said Jonathan Teitel, a Moody's analyst. Forum issued about $315 million of new 9% convertible senior secured notes due 2025 in exchange for the same amount of senior unsecured notes due 2021 and $3.5 million of cash. Approximately $13 million of existing senior unsecured notes due 2021 remain outstanding. Upgrades: Issuer: Forum Energy Technologies, Inc. Probability of Default Rating, Upgraded to Caa2-PD from Ca-PD Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Corporate Family Rating, Upgraded to Caa2 from Ca Senior Unsecured Notes, Upgraded to Ca (LGD6) from C (LGD5) Assignments: Issuer: Forum Energy Technologies, Inc. Senior Secured Convertible Notes, Assigned Caa3 (LGD4) Outlook Actions: Issuer: Forum Energy Technologies, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Forum's Caa2 CFR reflects elevated leverage, weak interest coverage and constraints to free cash flow generation through 2021. Forum faces highly challenging industry conditions from weak commodity prices and the resulting reduction in drilling and completion activities by exploration and production companies. Forum's debt maturity profile is improved as a result of the exchange transaction. However, the company still has a considerable amount of debt relative to a weak EBITDA base. Of the convertible notes, $150 million is mandatorily redeemable into common stock if the stock price achieves certain levels. If reached, this feature provides for meaningful debt reduction. Moody's expects Forum's EBITDA in 2020 will be significantly constrained as a result of the large reduction in customer demand and that reduced upstream capital spending will continue to weigh on activity levels in 2021. In response to reduced customer demand, Forum has taken steps to lower costs including reducing its labor force, furloughing certain employees, reducing salaries, and closing and consolidating certain facilities. Even as new equipment sales have decreased, the company continues to generate revenue from consumable products which comprise a majority of the top line but at lower levels because of the sharp decrease in US activity levels. The company benefits from its diversified exposure to international markets which provides some offset to weakness in domestic markets. The SGL-3 rating reflects Moody's view that Forum has adequate liquidity through mid-2021. As of March 31, 2020, the revolver's borrowing base was $234 million. The recent revolver amendment reduced lender commitments to $250 million from $300 million. The facility has $85 million drawn (including $30 million drawn in the second quarter of 2020) and $26 million in letters of credit outstanding. As of March 31, pro forma cash would be $111 million (reflecting bond repurchases, the revolver draw in the second quarter and the cash payment to bondholders). The recent revolver amendment added an anti-cash hoarding provision. The revolver expires in October 2022 if all existing notes due 2021 are repaid, which Moody's expects. Extending the revolver beyond 2022 will be important to support continued adequate liquidity. Forum's convertible senior secured notes due 2025 are rated Caa3. The convertible senior secured notes are secured by a first lien except with respect to ABL revolver priority collateral (including cash, receivables and inventory). The convertible notes have a second lien with respect to the ABL revolver priority collateral. The remaining senior unsecured notes due 2021 are rated Ca, reflecting effective subordination to the secured debt. The stable outlook reflects Moody's expectation that Forum will repay the remainder of senior notes due 2021, grow EBITDA and reduce debt/EBITDA but that leverage will remain elevated in 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a downgrade include declining EBITDA; EBITDA/interest below 1x; or weakening liquidity. Factors that could lead to an upgrade include debt/EBITDA below 7x; EBITDA/interest maintained above 1x; and positive free cash flow generation. Forum, headquartered in Houston, Texas, is a publicly traded oilfield equipment company serving drilling and downhole, completion, and production activities. Revenue for the twelve months ended March 31, 2020 was roughly $900 million. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. FORUM ENERGY: S&P Lowers ICR to 'SD' on Distressed Debt Exchange ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Forum Energy Technologies Inc., a Houston-based oilfield products and services provider, to 'SD' (selective default) from 'CC'. At the same time, S&P lowered its issue-level rating on Forum's debt to 'D' from 'CC'. The '4' recovery rating is unchanged, indicating its expectation for average (30%-50%; rounded estimate: 30%) recovery of principal in the event of a payment default. The downgrade follows Forum's announcement that holders of about $315 million of aggregate principal amount of its 6.25% senior unsecured notes due 2021 had validly tendered to participate in the debt exchange, meeting the minimum 95% subscription threshold needed to execute the deal. Holders participating in the exchange will receive $1,000 principal amount of the company's new 9% convertible secured notes due in 2025 plus a pro rata portion of a $3.5 million cash payment for each $1,000 principal amount of existing notes tendered. "We consider the exchange distressed and tantamount to default because, in our view, noteholders are receiving less than they were originally promised and Forum was facing a realistic possibility of a conventional default prior to this transaction," S&P said. Although the initial offer is for an equal principal amount, approximately 45% of the new notes will be mandatorily convertible into common equity (subject to meeting certain conditions). The maturity date will extend to 2025, compared with 2021 for the existing notes. The new notes will pay 9% interest, of which 6.25% is payable in cash and 2.75% in either cash or additional notes at the company's option. In addition, $150 million principal amount of the new notes will be mandatorily convertible into common stock. Forum had previously stated it would seek broader strategic alternatives--including potential bankruptcy--if it could not execute on the exchange. S&P expects to review its issuer credit rating and issue-level ratings on Forum shortly, incorporating the new capital structure. FRANK INVESTMENTS: Court Confirms Liquidating Plan -------------------------------------------------- This matter came before the Court for hearing on June 18, 2020 to consider confirmation of the Second Amended Chapter 11 Plan of Liquidation of Frank Investments, Inc., a New Jersey Corporation and final approval of the Disclosure Statement for Second Amended Chapter 11 Plan of Liquidation of Frank Investments, Inc., a New Jersey Corporation, filed by debtor in possession, Frank Investments, Inc., a New Jersey corporation. The Plan treats Classes 1, 2, 3, 4 and 5 as Impaired. Class 1, Class 2 and Class 4 have voted to accept the Plan. However, Class 3 has not voted to accept the Plan. Additionally, Class 5 does not receive or retain any property under the Plan and is therefore deemed to reject the Plan. Class 1, Class 2 and Class 4 have voted to accept the Plan. Class 6 and Class 7 are Unimpaired and therefore deemed to accept the Plan. However, Class 3 has not voted to accept the Plan. Class 5 does not receive or retain any property under the Plan and is deemed to reject the Plan. Accordingly, the requirements of 11 U.S.C. Sec. 1129(a)(8) have been satisfied with respect to Classes 1, 2, 4, 6 and 7, but have not been satisfied with respect to Classes 3 and 5. The Plan treats Classes 1, 2, 3, 4 and 5 as impaired. Classes 1, 2 and 4 voted in favor of the Plan, and therefore have accepted the Plan. Accordingly, based upon the acceptance of Classes 1, 2 and 4, the requirements of 11 U.S.C. Sec. 1129(a)(10) have been satisfied with respect to one Impaired Class of Claims accepting the Plan, not including acceptance of the Plan by any Insiders. The Plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that is impaired under, and has not accepted, the Plan. In particular, Class 3, which consists of Allowed General Unsecured Claims, and Class 5, which consists of Equity Interests, are impaired under and have not accepted the Plan. The holder of any claim or interest that is junior to Class 3 or Class 5 will not receive or retain under the Plan on account of such junior claim or interest any property. Judge Erik P. Kimball has ordered that the Plan, as modified herein filed by Frank Investments, Inc., et al., is confirmed and approved. Any and all objections to confirmation of the Plan not withdrawn or otherwise addressed in this Order are expressly overruled. The Plan is modified as follows: a. Administrative Claims consisting of postpetition ad valorem taxes on Absecon ("Absecon Administrative Claims"), which the Debtor estimates to total approximately $19,000, shall be paid as follows: within fourteen (14) days of the Confirmation Date, the holder(s) of the Absecon Administrative Claims may request in writing payment in Cash from the Debtor. If made, the written request must include specific instructions for payment, a specified payoff date, and a payoff amount effective as of such payoff date. If such written request is issued properly to the Debtor pursuant to the terms of the Confirmation Order, the Debtor shall pay the Absecon Administrative Claims in Cash forthwith; provided, however, that at the closing of any transfer of Absecon by the Debtor to a thirdparty, including any transfers made by deed in lieu of foreclosure, quitclaim deed or similar mechanism, Bancorp shall fully reimburse the Debtor in Cash for the Debtor's payment of the Absecon Administrative Claims. Alternately, if the holder(s) of Absecon Administrative Claims do not provide written request to the Debtor for payment in Cash within fourteen (14) days of the Confirmation Date, such claims shall be paid in full upon the closing of any transfer of Absecon by the Debtor to a thirdparty, including any transfers made by deed in lieu of foreclosure, quitclaim deed or related mechanism. In such a circumstance, the Absecon Administrative Claims shall be paid such closing: (i) from the Absecon sale proceeds the are subject to Bancorp's lien or security interest, or (ii) in the event of a credit bid by Bancorp, or deed in lieu or similar transfer to Bancorp, by Bancorp in Cash. b. The Plan includes an additional Class: Class 6. Class 6 consists of the Allowed Secured Claim of the Palm Beach County Tax Collector in the approximate amount of $716.72. See Proof of Claim 32. The Class 6 Claim shall be paid in full, with interest, on or before the Effective Date. The Class 6 Claim is Unimpaired and deemed to accept the Plan. c. The Plan includes an additional Class: Class 7. Class 7 consists of the Allowed Secured Claim consisting or prepetition ad valorem taxes on Absecon, which the Debtor estimates to total approximately $25,000. The Plan shall leave unaltered the legal, equitable, and contractual rights to which Class 7 Claim entities the holder of such claim or interest. The Class 7 Claim is Unimpaired and deemed to accept the Plan. d. Within 30 days of the Effective Date, the Debtor will submit to Bancorp requests for any unreimbursed Collateral Expenses. Within 30 days of its receipt of such requests, Bancorp shall (a) fully reimburse the Debtor for agreed Collateral Expenses and (b) in the event of a dispute over a Collateral Expense, file a motion with the Court requesting adjudication of such dispute. Attorneys for the Debtor: Patrick Dorsey, Esq. SHRAIBERG, LANDAU & PAGE, P.A. 2385 NW Executive Center Drive, #300 Boca Raton, Florida 33431 Tel.: 561-443-0800 Facsimile: 561-998-0047 Email: pdorsey@slp.law About Frank Investments Frank Investments Inc., Frank Theatres Management LLC and Frank Entertainment Companies, LLC are affiliates of Rio Mall, LLC, which sought bankruptcy protection (Bankr. S.D. Fla. Case No. 18-17840) on June 28, 2018. Rio Mall, LLC, owns and operates commercial real property that comprises the shopping center known as Rio Mall located at 3801 Route 9 South, Rio Grande, N.J. Frank Investments and its debtor affiliates sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 18-20019) on Aug. 17, 2018. At the time of the filing, Frank Investments and Frank Entertainment had estimated assets of between $10 million and $50 million and liabilities of the same range. Frank Theaters had estimated assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. Bradley S. Shraiberg, Esq., at Shraiberg Landau & Page, P.A., is the Debtors' bankruptcy counsel. VerStandig Law Firm, LLC, is special counsel. No official committee of unsecured creditors has been appointed. FRONTIER COMMUNICATIONS: 1st Lien Lenders Want Rejection of Plan ---------------------------------------------------------------- Frontier Communications Corporation and its direct and indirect subsidiaries, submitted a Disclosure Statement relating to the Second Amended Joint Plan of Reorganization. Class 6 First Lien Notes Claims are unimpaired. The class is not entitled to vote on (deemed to accept) the Plan. Despite the unimpaired status of Holders of First Lien Notes, the Debtors reached an agreement with counsel to the ad hoc committee of certain unaffiliated holders of the Debtors' outstanding first lien debt (the "First Lien Committee") regarding the conditional soliciting of votes from Holders of First Lien Notes Claims and Second Lien Notes Claims (the "Conditional Solicitation of Certain Unimpaired Classes"). In the event that the Bankruptcy Court later determines, or the Debtors agree, that First Lien Notes Claims are Impaired under the Plan, Holders of such Claims shall be considered Voting Parties, retroactive to the entry of the Disclosure Statement Order. In the event of such determination or agreement, such claims will be considered Impaired Claims, retroactive to the entry of the Disclosure Statement Order, and such votes shall be valid for all purposes under the Plan for all purposes, including but not limited to the voting determination of Class 6 with respect to acceptance or rejection of the Plan. Class 7 Second Lien Notes Claims are unimpaired. The class is not entitled to vote (deemed to accept). Despite the unimpaired status of Holders of Second Lien Notes, the Debtors reached an agreement with counsel to Wilmington Savings Fund Society, FSB regarding the conditional solicitation of certain unimpaired classes to avoid confirmation delays in the event that the Bankruptcy Court later determines, or the Debtors agree at a future date, the second lien notes claims are impaired under the Plan. In the event of such determination or agreement, the claims will be considered Impaired Claims, retroactive to the entry of the Disclosure Statement Order, and such votes shall be valid for all purposes under the Plan for all purposes, including but not limited to the voting determination of Class 7 with respect to acceptance or rejection of the Plan. The Debtors believe First Lien Notes Claims and Second Lien Notes Claims are unimpaired. As a precaution to avoid Confirmation delays in the event that the Bankruptcy Court later determines, or the Debtors agree at a future date, that such Claims are impaired under the Plan, the Debtors are participating in the Conditional Solicitation of Certain Unimpaired Classes. For the avoidance of doubt, the Conditional Solicitation of Certain Unimpaired Classes will not modify or otherwise alter the Unimpaired status of such Claims. If the Bankruptcy Court determines, or the Debtors agree at a future date, that such Claims are Impaired, the following Holders of First Lien Notes Claims and/or Second Lien Notes Claims will be Releasing Parties: (a) all Holders of such Claims that vote to reject the Plan and do not opt out of or otherwise object to the Third-Party Release in the Plan; and (b) all Holders of such Claims that abstain from voting on the Plan and do not opt out of or otherwise object to the Third-Party Release in the Plan. Absent such determination or agreement, First Lien Notes Claims and Second Lien Notes Claims are Unimpaired and not entitled to vote, and Holders of such Claims shall not be Releasing Parties. Statement of the First Lien Committee The following represents the position of the First Lien Committee with regard to the confirmability of the Plan. The Debtors disagree with much of the First Lien Committee’s assessments of the confirmability of the Plan, but have included it here verbatim at the First Lien Committee's request. STATEMENT OF THE FIRST LIEN COMMITTEE REGARDING DEBTORS' JOINT PLAN OF REORGANIZATION The ad hoc committee of certain unaffiliated lenders (the "First Lien Committee") that hold, either directly or through funds or accounts managed by them, the outstanding First Lien Debt Obligations of Frontier Communications Corporation ("Frontier") and certain of its subsidiaries and affiliates (collectively, the "Debtors") does not support the Debtors' Plan. As explained in the Objection of the First Lien Committee to the Debtors' Disclosure Statement Motion [Docket No. 555], the First Lien Committee contends that the Plan is unconfirmable for at least the following reasons: Plan Treatment. The Plan proposes to either refinance or reinstate the Term Loan Claims and the First Lien Notes Claims. The First Lien Committee contends that neither treatment option is permissible under the Bankruptcy Code. According to the First Lien Committee, reinstatement is impermissible because the Plan does not comply with Sections 1123(d) or 1124 of the Bankruptcy Code. The First Lien Committee contends that the Plan would substantially alter the legal, equitable, and contractual rights of the Term Loan Lenders and the First Lien Noteholders and results in several breaches of the First Lien Debt Documents. These alleged breaches include the following: (1) The Plan does not provide for the payment of postpetition interest on the First Lien Debt Obligations calculated at the default rate specified in the First Lien Debt Documents. The First Lien Committee contends that such failure is a violation of their contractual and statutory entitlement to postpetition interest at the post-default contract rate, and precludes reinstatement of the First Lien Debt Obligations. (2) The Plan contemplates nearly $950 million of Incremental Payments and Surplus Cash payments to the holders of Senior Notes Claims, which the First Lien Committee contends is an impermissible diversion of proceeds from the Debtors' PNW Sale. The First Lien Committee further contends that the Debtors' use of the PNW Sale proceeds violates their contractual and statutory rights and precludes reinstatement of the First Lien Debt Obligations. (3) The Plan proposes to pay the Revolving Credit Claims in full in cash on the Effective Date, while reinstating the Term Loan Claims. The First Lien Committee contends that this produces a preferential pay-down of the Revolving Credit Lenders that contravenes the pro rata payment provisions in the Credit Agreement governing both sets of Claims. The First Lien Committee contends that this also precludes reinstatement. (4) The Plan does not incorporate the turnover and payment subordination mechanisms set forth in the Intercreditor Agreement by and among the Debtors, the First Lien Parties and the Second Lien Parties. The First Lien Committee contends that the Plan must enforce the provisions of the Intercreditor Agreement that require payment in full of the First Lien Debt Obligations, and that the Debtors’ failure to incorporate such provisions in the Plan constitutes a breach of the First Lien Debt Documents and precludes reinstatement. (5) The First Lien Committee contends that the Noteholder Groups' selection of the members of the new board of the Reorganized Debtors will trigger a change in control under the First Lien Debt Documents, thereby causing an Event of Default thereunder that would preclude reinstatement. The First Lien Committee asserts that the Debtors' alternative Plan treatment for the Term Loan Claims and the First Lien Notes Claims, payment in full in cash on the Effective Date, does not comply with the Bankruptcy Code because the Plan prohibits the allowance of fees and expenses contractually owed to the Term Loan Lenders and the First Lien Noteholders, including default interest, fees, and any make-whole premium. Impairment. The First Lien Committee contends that the Debtors are required to solicit votes from the Holders of Claims in Class 5 (Term Loan Claims) and Class 6 (First Lien Notes Claims) because these Claims are impaired under the Plan for many of the same reasons that reinstatement is prohibited. In addition, the First Lien Committee contends that holders of Term Loan Claims and First Lien Notes Claims are impaired because the Plan would impose third-party releases on such holders unless they affirmatively object or opt out of such releases. The First Lien Committee asserts that the Plan cannot be confirmed because the Debtors failed to solicit all classes of impaired creditors. Classification. The First Lien Committee contends that the Plan separately classifies the Revolving Credit Claims and the Term Loan Claims in violation of Section 1122 of the Bankruptcy Code. The First Lien Committee further contends that both the Revolving Credit Claims and the Term Loan Claims should be classified in the same Class because both Claims are governed by the Credit Agreement and share the same collateral and guarantee package. Non-Estate Professional Fees. The Plan provides for payment in full on the Confirmation Date of the Noteholder Groups' outstanding professional fees. The First Lien Committee asserts that there is no legal basis for the Debtors to pay the professional fees of unsecured creditors under the Plan. The First Lien Committee opposes confirmation of the Plan and intends to oppose confirmation of the Plan. As a result, the Plan may not be confirmed because of these infirmities. The First Lien Committee recommends that all entities entitled to vote on the Plan submit a timely ballot voting to reject the Plan. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/ybfo74jg from PacerMonitor.com at no charge. Counsel to the Debtors and Debtors in Possession: Stephen E. Hessler, P.C. Mark McKane, P.C. (admitted pro hac vice) Patrick Venter KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 - and - Chad J. Husnick, P.C. Benjamin M. Rhode (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020, to seek approval of a plan that would cut debt by $10 billion. Frontier announced it had entered into a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of its $11 billion outstanding unsecured bonds. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. FRONTIER COMMUNICATIONS: To Seek Plan Confirmation Aug. 11 ---------------------------------------------------------- Daniel Gill, writing for Bloomberg Law, reports that bankrupt Frontier Communications Corp. received court approval to solicit votes on a reorganization plan that would transfer all equity to certain creditors and lower its debt by more than $10 billion. Only one class of creditors—holders of senior unsecured notes—can vote on the plan, according to Frontier's disclosure statement that was approved at a telephonic hearing by Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York. On May 15, 2020, the Debtors filed their Joint Plan of Reorganization and the Disclosure Statement related thereto. On June 30, 2020, the Bankruptcy Court entered an order approving the Disclosure Statement. The Bankruptcy Court will hold a hearing to consider confirmation of the Plan on August 11, 2020 at 10:00 a.m. (ET). About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as investment banker. GABRIEL INVESTMENT: Proceeds of Nooner Sale to Pay Off Claims ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Bankruptcy Cases of debtors Gabriel Investment Group, Inc., Don's & Ben's, Inc., Gabriel Holdings, LLC, SA Discount Liquors, Inc., and Gabriel GP, Inc., proposes a First Amended Joint Chapter 11 Plan of Reorganization for the Debtors' estate. Pursuant to Bankruptcy Rule 9019 and through the Plan, the Committee requests approval of all compromises and settlements included in this Plan, including but not limited to the compromises and settlements set forth in Article V, if any. Class 1 Allowed Secured PNC Claim is impaired and will include the Secured Claim of PNC, which shall be allowed in full in the unpaid principal balance then outstanding on the Effective Date, together with all accrued and unpaid contractual interest, fees and expenses which claim is secured by all of Debtors' assets. Upon consummation of the Nooner Sale, or any other sale of the majority of Debtors' assets, all proceeds of the sale will be paid to PNC except the PNC Hold Backs and Trust Fund Carve out provided for in the Asset Purchase Agreement. Class 3 Secured Claim of John D. Gabriel, Sr., and Rosalie Gabriel is the impaired secured claim scheduled by the equity holders for John D. Gabriel, Sr. and Rosalie Gabriel with full knowledge that the claim was not secured. No proof of claim was filed. The claim is not allowable as a secured claim under 11 U.S.C. Sec. 506. Class 4 allowed administrative convenience claims are the impaired unsecured administrative convenience claims. Claim holders will each receive a single cash payment equal to 15% of the allowed administrative convenience claims. Class 5 allowed general unsecured claims are impaired. Liability for preserving and managing Trust Assets and distributing Trust Assets to Class 5 Claimants shall be assigned to, assumed, and treated by the Trust as further provided in Article VII of this Plan and the Trust Agreement. Article VII Creditor Trust: a. The Trust shall receive the transfer and assignment of assets as provided in Articles VI and VII, including from amounts transferred from the Plan Implementation Account and all other estate bank accounts. The Trust shall make distributions to the Class 5 and 6 claimants, as provided by this Plan and the Trust Agreement. The Trust shall have the sole discretion to cease funding TABC or other regulatory litigation in the event the Trustee determines the litigation is not commercially feasible. Notwithstanding anything to the contrary, the Trust shall not be required to expend more than $50,000 of Trust funds in funding the TABC litigation. b. The Trust shall pursue all claims or Causes of Action against any Party. Class 6 Allowed Unsecured Critical Vendor Claims of Republic Beverage Company and Southern Glazers Wholesale are impaired. Liability for preserving and managing Trust Assets and distributing Trust Assets to Class 6 Claimants shall be assigned to, assumed, and treated by the Trust as further provided in Article VII of this Plan and the Trust Agreement. Class 6 claimants shall receive the same treatment by the Trust as the Class 5 Claimants. Holders of Class 7 Allowed Interests of GIG will have no rights arising from or related to such Canceled Instruments or the cancellation thereof, except the rights provided for pursuant to the Plan. Class 8 Allowed Interests of Don's & Ben's, Inc., Gabriel Holdings, LLC, SA Discount Liquors, Inc. and Gabriel GP, Inc. (the "Consolidated Debtors") are impaired. The holders of or parties to such Canceled Instruments will have no rights arising from or related to such Canceled Instruments or the cancellation thereof, except the rights provided for pursuant to this Plan. Class 9 Allowed Secured Claim of Kia Motor Finance will be surrendered to the creditor and the creditor shall have 30 days from the effective date to file its deficiency claim with the Court. Kia Motors allowed deficiency claim shall be treated along with the Class 5 unsecured claims. Holders of Class 10 Allowed Priority Non-Tax Claims will receive, in full satisfaction, settlement, release, and discharge of and in exchange for such Allowed Priority Non-Tax Claim. The Class 10 Allowed Priority Non-Tax Claims are owed $8,609. The proceeds of the Nooner Sale (except the Trust Carve Out funds) shall be deposited to the Plan Implementation Account. As the assets are sold and bank accounts are no longer needed for store operations, the funds in such bank accounts shall be deposited into the Plan Implementation Account. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/ybz98e9r from PacerMonitor.com at no charge. Attorney for the Committee: Ronald J. Smeberg Muller Smeberg, PLLC 111 W. Sunset Rd. San Antonio, Texas 78209 Tel: 210-664-5000 Fax: 210-598-7357 About Gabriel Investment Group Gabriel Investment Group, Inc., founded in 1948, operates a chain of package stores that sell wines, liquors, and beers. As of the Petition Date, Gabriel operates 15 package store locations as Gabriel's Liquor and 30 package store locations as Don's & Ben's Liquor. Gabriel Investment Group sought relief under Chapter 11 of the Bankruptcy Code (Bank. W.D. Tex. Lead Case No. 19-52298) on Sept. 27, 2019 in San Antonio Texas. The other debtor affiliates are Don's & Ben's Inc. (Bankr. W.D. Tex. 19-52299); Gabriel Holdings, LLC (Bankr. W.D. Tex. 19-52300); SA Discount Liquors, Inc. (Bankr. W.D. Tex. 19-52301); and Gabriel GP, Inc. (Bankr. W.D. Tex. 19-52302). In the petitions signed by Inez Cindy Gabriel, president, the Debtors were estimated to have assets at $1 million to $10 million and liabilities within the same range. Judge Ronald B. King oversees the cases. The Debtors tapped Pulman Cappuccio & Pullen, LLP, as legal counsel. The Office of the U.S. Trustee appointed creditors to serve on the official committee of unsecured creditors on Nov. 21, 2019. The Committee is represented by Muller Smeberg, PLLC. GMI GROUP: Unsecureds to Get 30% of Claims in Plan -------------------------------------------------- GMI Group, Inc., submitted a Plan and a Disclosure Statement. Class 2 shall consist of claims held by the lenders with a security interest in vehicle. These lenders will receive cure payments of any post-petition delinquencies, as specifically described below, over an eight-month period following on the payment due date on the 30th day following the Effective Date of the Plan, on a monthly basis, and will also be paid on an on-going monthly basis according to their contracts. Class 2 is Impaired. Ally Bank holds a secured claim, Claim No. 5, in the amount of $20,084.57, at an interest rate of 6.39% secured by a 2018 Toyota RAV 4 and shall be paid in accordance with terms of that Order entered by the U.S. Bankruptcy Court on its Motion to Lift Stay. This provides for a cure over an eight month period and on-going monthly payments at the contract rate. For the first eight months, payments shall be in the amount of $794.81 per month and thereafter payments shall be in the amount of $389.95 per month. Nissan holds three claims, secured by three 2018 Nissan NV200s at an interest rate of 4.99%. Claim No. 22, filed in the amount of $13,626.87; Claim No. 23, filed in the amount of 13,111.09 and Claim No. 24, filed in the amount of $16,221.13. These monthly payments are $377.27 each. This will be paid according to contract. World Omni holds a secured claim, Claim No. 15 in the amount of $33,592.32 secured by a 2017 Toyota Tundra 4x4 at an annual interest rate of 6.64% with monthly payments in the amount of $794.81. This will be paid according to contract. Santander/Chrysler holds a secured claim, Claim No. 3 in the amount of $19,643, at an annual interest rate 7.67%, secured by a 2017 Dodge RAM ProMaster. This will be paid at the rate of $502.97 on a monthly basis. Class 3 will consist of the impaired secured claim of Reliable Fast, LLC., Claim No. 2, filed in the amount of $143,832. The claimant will receive $50,000 in cash on the Effective Date in full, final and complete satisfaction of their debt; including a release of the guarantor, release of any and all liens and judgments, and dismissal of the pending adversary proceeding and all other pending litigation. Class 4 will consist of the impaired secured claim of Expansion Capital Group, LLC, Claim No. 21, filed in the amount of $76,850. They will receive $25,000 in cash on the Effective Date in full, final and complete satisfaction of their debt; including a release of the guarantor, release of any and all liens and judgments, and dismissal of the pending adversary proceeding and all other litigation. Class 5 will consist of all claims by holders of rejected leases. Debtor is unaware of any claims for this class. Any claims filed will receive payment as if they are members of Class 6. General unsecured creditors are classified in Class 6 and will receive a distribution of 30 percent of their allowed claims, to be distributed as described in the Plan. Class 6 will consist of all non-priority unsecured claims allowed under Sec. 502 of the Code and is impaired. Class 6 shall receive CREDITOR ESTIMATED CLAIM DISTRIBUTION -------- --------------- ------------ Scroggins & Williamson $582 $175 American Express $25,236 $7,571 Internal Revenue Service $3,027 $908 American Express $15,330 $4,599 American Express $4,825 $1,447 American Express $28,177 $8,453 BBT $1,447 $434 Capital One Bank $6,296 $1,889 Joseph L. Randazzo, Jr. $20,000 $6,000 Veritiv Operating $71,775 $21,532 AmTrust North America $20,882 $6,265 Cosgrove Enterprises $149,730 $44,919 I-Tech E-Services LLC $200,000 $60,000 Oasis Outsourcing $107,440 $32,232 Janitorial Service Group $98,461 $29,538 Citicard Costcco Visa $28,869 $8,061 Somphane Inthovong $5,000 $1,500 Powell & Edwards $4,900 $1,470 Signature Staffing $2,275 $683 Strategic Maintenance $11,461 $3,438 Synovous $2,276 $683 Class 8 will consist of the equity security holder of the Debtor. Ms. Kayla Dang is retaining her 100% equity interest in the Debtor in exchange for the infusion of new value to fund payments under the Plan. Payments and distributions under the Plan will be funded by Debtor's principal, Ms. Kayla Dang, will contribute new value in an amount sufficient to cover all administrative expense priority claims and all payments due on the Effective Date of the plan, e.g. Classes 3 and 4 so that they may be paid in full on the Effective Date of the Plan. The source of these funds is from the sale of the assets held by her and her personal LLCs. The Debtor will pay all claims from postpetition income from Operations, supplemented, to the extent necessary, by personal contributions. There will be capital contribution in the amount of $10,000 per month ($120,000 per year) from Ms. Kayla Dang. A full-text copy of the Disclosure Statement dated June 20, 2020, is available at https://tinyurl.com/yc4cdrgc from PacerMonitor.com at no charge. Attorney for the Debtor: Shayna M. Steinfeld, Esq. Steinfeld and Steinfeld, PC 31 Lenox Pointe, NE Atlanta, Georgia 30324 Tel: (404) 636-7786 About GMI Group GMI Group, Inc. -- http://thegmigroup.com/-- is a janitorial service company serving the Southeastern United States. Established in 2005, the Company specializes in corporate sites, multitenant, medical offices, universities, schools, manufacturing plants, federal, state and local agency facilities. GMI Group filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 19-52577) on Feb. 14, 2019. In the petition signed by CEO Kayla Dang, the Debtor disclosed $791,787 in assets and $1,621,246 in liabilities. Shayna M. Steinfeld, Esq., at Steinfeld & Steinfeld PC, is the Debtor's counsel. GNC HOLDINGS: Closes Kenhorst, PA Location ------------------------------------------ Berks Weekly reports that vitamin and nutrition chain GNC Holding Inc. will close its store in Kenhorst, Pennsylvania. GNC filed for Chapter 11 bankruptcy protection in June 2020, with plans to shut down as many as 1,200 of its 5,200 US stores. In Berks County, GNC has three stores, Kenhorst, Berkshire Mall, and Wyomissing. Only the Kenhorst store is closing. It is unclear when the Kenhorst store will actually shut down. However, it will maintain regular hours while it holds discount sales of inventory and fixtures. GNC will continue operating, but it will become a smaller company. "Our business has been under financial pressure for the past several years as we have worked to pay down debt and reposition GNC to be more competitive in a challenging operating environment," says company officials in a statement. "Over the past year, GNC has been executing a store portfolio optimization strategy to close underperforming stores, while doubling down on our omni-channel and brand strategies to better meet consumer demand." "We believe that our strategy is sound, and the success we’ve seen thus far makes us confident we're moving our business in the right direction. The Chapter 11 process will allow us to accelerate these strategies and invest in the appropriate areas to evolve in the future, while improving our capital structure and balance sheet." About GNC Holdings GNC Holdings Inc. -- http://www.gnc.com/-- is a global health and wellness brand with a diversified omni-channel business. In its stores and online, GNC Holdings sells an assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink, and other general merchandise, featuring innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC Holdings. GNC Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on June 23, 2020. The Debtors disclosed $1,415,957,000 in assets and $895,022,000 in liabilities as of March 31, 2020. Judge Karen B. Owens oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; Evercore Group, LLC as investment banker and financial advisor; FTI Consulting, Inc., as financial advisor; and Prime Clerk as claims and noticing agent. Torys LLP is the legal counsel in the Companies' Creditors Arrangement Act case. GNC HOLDINGS: Investor Harbin Pharmaceutical to Open Auction ------------------------------------------------------------ Beth Ewen, writing for Franchise Times, reports that Harbin Pharmaceutical Group placed a stalking horse bid of $760 million for GNC Holdings, the vitamin and herbal supplements retailer that filed for Chapter 11 bankruptcy protection in June and said it plans to close up to 1,374 stores in the U.S. and Canada by the end of the year. That bid kicks off an auction process seeking higher and better offers, supervised by the bankruptcy court. In 2018, Harbin Pharmaceutical Group invested $300 million in GNC, with the last tranche received in February 2019, documents said. Proceeds were used to pay down debt. Based in China, Harbin manufactures and distributes pharmaceuticals including antibiotics, Chinese medicines, animal vaccines and others. It traded on the Shanghai Stock Exchange for 3.33 Chinese Yuan June 23, down from a 52-week high of 6.53, according to Reuters. One Chinese Yuan equals 14 cents in U.S. currency. GNC said the closures will help the retailer cut costs and enable an exit from the bankruptcy process by the fall. Cash Incentives On June 18, the company approved cash incentives for key employees. The incentives were paid in advance of the filing with the requirement the after-tax portion be repaid "in the event that the incentive is not earned," although they can retain 75 percent of the bonus even if the company does not successfully emerge from Chapter 11. Kenneth Martindale, chairman and CEO, received $2.19 million in a retention bonus; Tricia Tolivar, executive vice president and CFO, received $795,000; Ryan Ostrom, chief brand officer, $330,000; Carl Seletz, chief global officer, $330,000; and Steven Piano, senior VP, chief human resource officer, $258,000. Such payouts, while typically causing outrage in the Twitterverse, are common in large bankruptcy cases, said Robert Haupt, an attorney with Lathrop GPM in Kansas City. He is not involved with the GNC case but has handled multiple bankruptcy cases for both creditors and debtors. Hertz, for example, put aside $16.2 million for retention bonuses to 340 employees at "director level" or above, including $700,000 for its chief executive, before filing for Chapter 11 in May. "From a practical point of view, everything that happens in bankruptcy should be designed to benefit all the parties," he said, adding the intent of such bonuses is: "Very simply, Is it worth it to the greater good for the business to retain its management, who very well may start looking for other jobs right now? "Capital, management, employment, labor, it's always a dispute over who's most important to the process," he said. "Management here thinks they're so important and they're also the decision makers. Everyone can challenge that though," during the court process. "Are we paying too much?" Rather than question a retention bonus, investors might ask why Martindale stayed in his post so long, since 2017. He also became chairman in August 2018. GNC lost some $500 million over the past four years. In mid-May, it reported a $200 million loss in the first three months of 2020. That compares to $15 million in losses in the first quarter of last year. In 2017, GNC revenue was $2.48 billion and its net loss was $148.85 million. In 2018, revenue declined to $2.35 billion, attributed mostly to the closing of 87 corporate stores and disappointing ecommerce sales. Net income was $58.8 million. In 2019, revenue declined further to $2.068 billion, with a $35.1 million loss. "In the restaurant business, you say 'never let cooks eat their own mistakes.' You don't want to reward the person who did the act that caused the problem," Haupt said about how to evaluate a CEO's performance. "In this world, though, and you know the other side is going to be, the market's been challenged, and certainly since March there's been factors that are unprecedented. "Bankruptcy courts are essentially courts of equity, so the judges have tremendous power to make equitable decisions," he said. GNC listed total liabilities of $895 million and assets of $1.4 billion in SEC documents. The largest debt, for $159.9 million, is owed to The Bank of New York Mellon Trust Co. in Pittsburgh, where GNC is based. GNC had about 1,000 franchises in the U.S. and 1,949 outside the U.S. in 2019. They'll have to get in line with other unsecured creditors to be heard during the bankruptcy process, Haupt said. "Courts are authorized to appoint committees of creditors. It's not uncommon for franchisees to get together, because their interests are so unique," he said. "They could ask the court to appoint the franchisee committee, and you would ask the company to pay for a lawyer for the franchisee committee. "Franchisees invest in the brand, they put their blood and sweat into it. They have the absolute right to say, who's looking out for us?" Haupt said. About Harbin Pharmaceutical Group Harbin Pharmaceutical is engaged in the research, development, manufacture and sale of pharmaceutical products. The Company primarily offers antibiotics, Chinese patent medicines, over-the-counter (OTC) medicines, healthcare products and synthesized preparations, among others. About GNC Holdings GNC Holdings Inc. -- http://www.gnc.com/-- is a global health and wellness brand with a diversified omni-channel business. In its stores and online, GNC Holdings sells an assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink, and other general merchandise, featuring innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC Holdings. GNC Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on June 23, 2020. The Debtors disclosed $1,415,957,000 in assets and $895,022,000 in liabilities as of March 31, 2020. Judge Karen B. Owens oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; Evercore Group, LLC as investment banker and financial advisor; FTI Consulting, Inc., as financial advisor; and Prime Clerk as claims and noticing agent. Torys LLP is the legal counsel in the Companies' Creditors Arrangement Act case. GRAPHIC TUFTING: Unsecureds to Get Nothing in Plan -------------------------------------------------- Graphic Tufting Center, Inc., filed a Plan and a Disclosure Statement. On the Filing Date, the Debtor owned personal properties having a total value of $989,260. Class 1: Secured Claim of First Bank of Dalton is impaired with approximate amount of $2,580,081. The FBD Secured Claim is comprised of the following: (a) Class 1A in the amount of $2,478,411 and (b) Class 1B in the amount of $101,670. Class 1A: The Class 1A claim of FBD arises from and in connection with that certain promissory note executed on March 18, 2013, by Debtor and Marabella, Inc. in the original principal amount of $2,880,000 (the "SBA Note"). As of Dec. 3, 2019, the Class 1A claim was $2,478,411. The Debtor intends to sell the GTC Collateral over the next 12 months. The Equipment appraised for $989,260. The Debtor anticipates the net proceeds of the sale to be approximately $939,79. The net proceeds of the sale of the GTC Collateral will be applied to the Class 1A Claim. The Holder of any Class 1A Claim is impaired. Class 1B: The Class 1B claim of FBD arises from and in connection with that certain promissory note executed by Debtor on or about August 28, 2014 in the original principal amount of $100,020.95. As of October 16, 2019, the Class 1B claim was $101,670.29. The Class 1B Claim shall be satisfied pursuant to the Plan of Liquidation filed contemporaneously herewith by Debtor’s affiliate. The Holder of any Class 1B Claim is impaired. Class 5 General Unsecured Claims totaling $1,941,977 will receive no distributions. Holders of Class 5 Claims will be deemed to have rejected the Plan. Class 6: Secured Claim of Tufting Equipment Company, Inc., totaling $90,000 is impaired. The Debtor will market and sell the TEC Collateral over the next 12 months for approximately $100,000. The Debtor anticipates the net proceeds of the sale to be approximately $95,000. The net proceeds of the sale of the TEC Collateral will be applied to the Class 6 Claim. The Class 6 deficiency, if any, will be treated as a Class 5 unsecured claim. As to Class 7: Debtor's Interest, upon completion of the payments to creditors as contemplated by the Plan, Debtor will be dissolved and the shares of Debtor shall be canceled. The Debtor shall pay all claims from the sale of Equipment with a total amount of $989,260.00. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/ybp4xtk7 from PacerMonitor.com at no charge. Attorneys for the Debtor: Cameron M. McCord Jones & Walden, LLC 699 Piedmont Ave, NE Atlanta, Georgia 30308 Tel: (404) 564-9300 About Graphic Tufting Center Graphic Tufting Center Inc., a privately held company that manufactures carpets and rugs, filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.20-40033) on Jan. 7, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Paul W. Bonapfel oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC, is the Debtor's legal counsel. The Debtor filed its Chapter 11 plan of reorganization and disclosure statement on March 24, 2020. GROUP 1 AUTOMOTIVE: S&P Rates $550MM Senior Unsecured Notes 'BB+' ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating and '4' recovery rating to auto retailer Group 1 Automotive Inc.'s proposed $550 million senior unsecured notes due 2028. The '4' recovery rating indicates S&P's expectation for average recovery (30%-50%; rounded estimate: 45%) in the event of a default. The company will use the proceeds from these notes to pay down its existing $550 million 5.0% notes due 2022 in a leverage-neutral transaction, which will potentially reduce its interest costs. Due to the severely reduced levels of activity in its U.S., U.K., and Brazilian end markets in the second quarter, Group 1 executed a comprehensive cost-reduction plan to protect its cash flow. The company's U.S. business recovered steadily in May and June led by its used vehicle and service businesses as well as positive contributions from its online vehicle purchasing platform, Acceleride. Given the gradual improvement in business activity, Group 1 has returned to approximately 70% of its pre-COVID employment levels in both the U.S. and U.K. The negative outlook reflects the risk that a weaker-than-anticipated recovery in macroeconomic conditions or a second wave of the pandemic will adversely effect the company's business activity. S&P could revise its outlook on Group 1 to stable if it appears likely it will achieve and maintain leverage of between 3x and 4x and free operating cash flow to debt of 10% or above by 2021--in line with its current base-case forecast--amid a gradual recovery in its end-market conditions. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors S&P's simulated default scenario envisions a payment default occurring in 2025 due a combination of the following factors: a renewed U.S. economic downturn that reduces the demand for new and used vehicles and causes customers to defer their servicing and repairs; the downturn leads to lower consumer credit availability, which reduces Group 1's finance-related commissions; a sharp increase in fuel costs that leads to a pronounced shift in customer preferences toward smaller, more-economical vehicles, which offer lower margins for dealers; and less-attractive inventory financing terms because of rising interest rates and reduced interest credits from automotive manufacturers. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $204 million -- EBITDA multiple: 5x Simplified waterfall -- Net enterprise value (after 5% administrative costs): $2.479 billion -- Valuation split (obligors/nonobligors): 85%/15% -- Priority claims: $674 million -- Value available to first-lien debt claims (collateral/noncollateral): $1.57 billion/$0 -- Secured first-lien debt claims: $1.28 billion -- Recovery expectations: Not applicable -- Total value available to unsecured claims: $291 million -- Senior unsecured debt/pari passu unsecured claims: $608 million/$16 million -- Recovery expectations: 30%-50% (rounded estimate: 45%) Note: All debt amounts include six months of prepetition interest. Collateral value equals asset pledge from obligors after priority claims plus equity pledge from nonobligors after nonobligor debt. Ratings List Group 1 Automotive Inc. Issuer Credit Rating BB+/Negative/-- New Rating Group 1 Automotive Inc. Senior Unsecured US$550 mil nts due 2028 BB+ Recovery Rating 4(45%) HARVEST MIDSTREAM: S&P Assigns 'B+' ICR; Outlook Stable ------------------------------------------------------- S&P Global Ratings assigned its 'B+' issuer credit rating to Houston-based midstream energy partnership Harvest Midstream I L.P. (Harvest). The outlook is stable. At the same time, S&P assigned its 'BB-' issue-level and '2' recovery ratings to the partnership's proposed $600 million senior unsecured notes. The '2' recovery rating indicates S&P's expectation for substantial(70%-90%; rounded estimate: 70%) recovery in the event of a payment default. S&P's 'B+' issuer credit rating reflects Harvest's evolving business profile. The partnership has completed a series of transactions commencing in fourth-quarter 2018, with the $1.1 billion purchase of the Four Corners assets (Harvest Four Corners)--consisting of about 3,900 miles of pipelines and 6,500 receipt points in the San Juan basin--from Williams Cos. To complement this acquisition, the partnership closed an asset transfer from Hilcorp Energy I, L.P. (HEI) for the Harvest Alaska LLC assets earlier this year. The assets include about 290 miles of oil and natural gas pipelines in the Cook Inlet, as well as various gathering oil pipelines in the North Slope region. The asset transfer came at no cost to the partnership because HEI relinquished ownership of the assets to Harvest. S&P expects the partnership to close its acquisition with BP (the BP Alaska midstream asset acquisition) by the end of third-quarter 2020. Harvest will purchase these midstream assets for approximately $100 million. The assets include a 49% ownership interest in the Trans Alaska Pipeline System (TAPS), a 32% ownership interest in Point Thomson Export Pipeline, a 50% interest in Milne Point, a 49% ownership in Alyeska Pipeline Services Co. (operates TAPS), and a 25% ownership in Prince William Sound Oil Response Corp. Collectively, the BP Alaska midstream assets are essential in the region to move product out of various production fields and into downstream markets. "We assess the partnership's business risk profile as weak, reflecting its geographic and asset diversity across six regions, with a focus in higher break-even regions," S&P said. The partnership's core exposures are in the San Juan Basin and Alaska, with complementary exposures in South Texas, the Gulf Coast, and the Utica Basin. Currently, the San Juan Basin and Alaska account for approximately 90% of net revenues. The partnership's assets are diversified across natural gas and oil. Pro forma these transactions, pipelines make up 72% of Harvest's asset portfolio, processing facilities account for 26%, and terminals account for 2% (based on net revenue). The partnership's contract profile consists of a collection of large upstream producers, as well as marketing and refining customers such as Shell Trading, BP, Valero, and Marathon Oil. The partnership's contract profile when compared to other similarly rated midstream peers is weaker, as 87% of its revenues come from fixed-fee contracts, and an estimated 22% of 2020 estimated EBITDA is backed by minimum volume commitment contracts. Additionally, the association with HEI accounts for 47% of volume throughput. "We view HEI as a material counterparty, and our rating on HEI could constrain our rating on Harvest, though the two ratings are not directly linked. We view Harvest's overall contract profile as weaker than other similarly rated midstream peers, reflecting more volumetric and commodity price risk," S&P said. S&P assesses the partnership's financial risk profile as aggressive. The impact from COVID-19 and the lower commodity price environment will have a larger impact on the Harvest Four Corners assets, where approximately 25% of cash flows are exposed to commodity price fluctuations. That said, Harvest's asset portfolio is essential in Alaska and the San Juan basin to move product out of production fields and into downstream markets. This will somewhat insulate the company's cash flows throughout this pandemic. The rating agency expects Harvest to achieve adjusted debt to EBITDA of 4x-4.5x in 2020, improving to 3x-4x thereafter. The stable outlook reflects S&P's expectation that the partnership will successfully close the BP Alaska midstream acquisition by the end of third-quarter 2020. S&P expects Harvest's recent acquisitions to complement its current foothold in Alaska and further grow the partnership's exposure across multiple core basins. The rating agency expects Harvest to achieve adjusted debt to EBITDA of 4x-4.5x in 2020, improving to 3x-4x thereafter. "We could consider lowering the rating if the partnership sustains adjusted debt to EBITDA above 5x for an extended period. This could occur if the BP Alaska midstream acquisition closing date is delayed and cash flow upside is not realized until the second half of 2021. We could also consider a negative rating action if Hilcorp Energy I, LP is materially downgraded given Harvest's high exposure to its volume flows," S&P said. "Although unlikely over the near term, we could consider a positive rating action if the partnership significantly scales operations and diversifies its exposure across additional regions or basins. We could also consider a positive rating action if the partnership sustains an adjusted debt to EBITDA below 4x for an extended period, while adding additional long-term minimum volume commitments or fixed-fee-based contracts to its contract profile," the rating agency said. HEARTS AND HANDS: Unsecureds Will be Paid in Full in Plan --------------------------------------------------------- Hearts and Hands of Care, Inc., submitted a Second Amended Plan of Reorganization. Class 4: West Town Allowed Bank Secured Claim. Impaired. Class 4 consists of the Allowed Secured Claim of West Town Bank & Trust (West Town Bank). Pursuant to 11 U.S.C. Sec. 1123(b)(2) and 365, the Debtor will assume all of its executory contracts with West Town Bank and such contracts shall be fully enforceable against the reorganized Debtor in accordance with their terms. West Town Bank will be impaired with respect (and only with respect) to unpaid amounts accruing prior to June 30, 2020 for late fees, default interest or other fees or expenses, including attorneys' fees (the "Deferred Obligations"), and all such fees and expenses accruing after June 30, 2020 shall be due according to the terms of the contracts between the Debtor and West Town Bank. With respect to the Deferred Obligations, the Debtor will pay $63,063 prior to and as a precondition to the occurrence of the Effective Date. Such payment will satisfy the Deferred Obligations in full and, provided such payment is made by June 30, 2020, then West Town Bank shall not charge additional late fees, default interest, or other fees or expenses on or after June 30, 2020 with respect to the Deferred Obligations. The reasonable fees and expenses of West Town Bank’s counsel accrued prior to June 30, 2020 in the bankruptcy cases for the Debtor and for Savion will be added to and part of West Town Bank’s secured claim and are included in the Deferred Obligations. As to Class 9: TCA Global Allowed Secured Claim, the Debtor proposes to allow the Class 9 Claim in the full amount of its proof of claim no. 12 as an unsecured claim, and the Allowed Claim of TCA Global will be included in Class 11, treated as a Class 11 Claim, and paid in full pursuant to Section 5.11 of the Plan. Class 11: Allowed General Unsecured Claims will be paid in full by or before the January 31, 2025 payment. Section 9.7. Post-petition loan. On May 10, 2020, the Debtor signed a promissory note (the "Nuvision Note") in the amount of $1,233,755 (the "Loan") in favor of Nuvision Federal Credit Union DBA Denali, A Division of Nuvision Credit Union. The Loan is part of the United States Small Business Administration's ("SBA") Paycheck Protection Program ("PPP"). The Bankruptcy Court approved the Loan on May 22, 2020, nunc pro tunc to May 10, 2020. As part of the PPP, the Debtor has used proceeds of the Loan for authorized purposes, as the SBA has defined that term, and will use the remainder of the proceeds of the Loan for authorized purposes. (A) The Debtor will timely apply for forgiveness of the Loan. To the extent all or part of the Loan is not forgiven, the Debtor shall repay the Loan according to the Loan’s terms and conditions, as set forth in the Nuvision Note. Funds to accomplish repayment of the Loan shall be generated from the Debtor’s operations, cash on hand (including the Savings Funds as defined below), or other sources that the Debtor may identify. To the extent that the Debtor repays all or part of the Loan and the Loan is subsequently forgiven in an amount that results in an overpayment to Nuvision, Nuvision will refund the overpayment to the Debtor within 21 days of the Debtor providing written notice to Nuvision of the forgiveness, unless Nuvision has been unable to verify the amount of the forgiveness with the SBA, despite Nuvision's diligence in seeking verification, in which case Nuvision will refund the overpayment within three business days of receiving SBA verification of the amount of the forgiveness. (B) Within 14 days of confirmation, the Debtor shall move the funds in its savings account, currently account #-2274 at Wells Fargo Bank (the "Savings Funds"), to an account at Nuvision. The Debtor shall maintain this savings account at Nuvision until the Loan is paid in full. (C) Notwithstanding any other language in this Section, Nuvision may carry out ordinary account maintenance activities with respect to the credit union account holding the Savings Funds, including but not limited to charging ordinary account fees against the balance of the account in accordance with the Debtor's member agreement with Nuvision, and taking such other actions as permitted or required by the member agreement and Nuvision's policies. (D) Nuvision acknowledges and agrees that the Savings Funds are not collateral for the Loan or any loan from Nuvision, and Nuvision shall not freeze, withdraw, restrict access to, or withdrawal of, or take any other action with respect to, the Savings Funds, except in the event of default as set forth in the following paragraph. (E) In the event of default under the terms of Nuvision Note, Nuvision may be entitled to exercise its statutory right of offset against the Savings Funds in accordance with the following procedures: (1) if Nuvision seeks to take any action with respect to the Savings Funds other than exercising a statutory right of offset, Nuvision shall provide notice of a default under this Plan pursuant to Paragraph 11.11 and, after providing such notice, shall obtain Bankruptcy Court approval prior to taking any action with respect to the Savings Funds; (2) if Nuvision seeks to exercise its statutory right of offset with respect to the Savings Funds, Nuvision shall first provide written notice and an opportunity to cure in accordance with Paragraph 11.11 of this Plan. If Debtor fails to cure in accordance with Paragraph 11.11, Nuvision shall not be required to obtain Bankruptcy Court approval prior to exercising its right of offset (F) To the extent of any discrepancy between this Plan and the terms and of the Nuvision Note, the terms of the Nuvision Note shall control. Section 9.8. Discharge of Patient Care Ombudsman. On September 3, 2019, the Bankruptcy Court appointed Brittany Hagedorn as patient care ombudsman in this case. Upon Confirmation, Ms. Hagedorn’s appointment shall be terminated. Ms. Hagedorn shall file her final report within 21 days of confirmation and file her final fee application in accordance with the terms of this Plan. A full-text copy of the Second Amended Plan of Reorganization dated June 29, 2020, is available at https://tinyurl.com/yc4afhas from PacerMonitor.com at no charge. About Hearts and Hands of Care Hearts and Hands of Care, Inc., is a home and community-based waiver services agency which is certified for and provides waiver-funded services. HHOC provides both habilitative and non-habilitative services to support individuals with a variety of disabilities, as well as their families. The agency provides services to approximately 212 recipients. Hearts and Hands of Care sought Chapter 11 protection (Bankr. D. Alaska Case No. 19-00230) on July 22, 2019. In the petition signed by CEO Kisha Smaw, the Debtor was estimated to have assets of at least $50,000 and liabilities at $1 million to $10 million. Judge Gary Spraker oversees the case. Attorneys for the Debtor: Thomas A. Buford Christine M. Tobin-Presser BUSH KORNFELD LLP HOWARD HUGHES: Fitch Rates $750MM Senior Unsec. Notes 'BB/RR4' -------------------------------------------------------------- Fitch Ratings has assigned a 'BB'/'RR4'rating to the $750 million senior unsecured notes issued by Howard Hughes Corporation. Fitch expects the proceeds, combined with cash on hand, will be used to repay approximately $808 million of secured debt. KEY RATING DRIVERS Key Assets in Attractive Markets: HHC owns strategic asset positions in select Sunbelt and Mid-Atlantic markets, which benefit from migration and job growth but also face lower physical and zoning barriers to entry. Through its operating, master planned communities and development segments, the company is able to plan and grow its communities over multiyear periods while increasing its base of recurring income. The company's MPCs total over 80,000 acres with 10,000 acres remaining for sale. A vast majority of its operating assets are located with its MPCs. The portfolio is adequately diversified by tenant, limiting credit exposure. The company's 2Q20 rent collection was 59.5% for retail, 96.3% for office and 97.1% for multifamily. Roughly 30% of operating portfolio NOI comes from the retail/lodging/other segments, which were more heavily affected by closures due to the coronavirus pandemic and will likely be slow to recover in uneven re-opening mandates. The majority of operating NOI comes from office/multifamily, which should be relatively more stable, but will likely see some impact from the weak economy. Land and Condo Development Volatility: Fitch views HHC's rental income risk profile as below average relative to that of its equity REIT peers and generally consistent with the high speculative-grade category. The company generated approximately 47% of 2019 NOI from contractual rents from its operating portfolio properties, including office, multifamily, retail and, to a lesser extent, hotels located in and adjacent to its MPCs. The company's development-for-sale segments provide incremental cash flow but increased volatility. Fitch anticipates declines in earnings for these segments in fiscal years 2020-2021. Fitch assumes modest declines of 5%-15% in revenue growth in MPC revenues in 2020-2021, which is generally tied to homebuilder sales. Condo sales at Ward Village in Honolulu are volatile and depend on the timing of deliveries and closing contracts. The company contracted to sell 242 condos as of July 2020, which are expected to close in subsequent quarters as towers under construction are completed in 2021 and beyond. Given the uncertainty around travel to Hawaii, Fitch has modeled minimal revenues for the segment this year, rebounding in 2021 to 80% of 2018-2019 levels. High Income-Based Leverage: Fitch expects net leverage to increase to 14x in 2020, up from 11x in 2019. NOI will be negatively affected in 2020 by closures at the company's hospitality and Seaport assets, as well as timing of condo sales. As revenues recover and development assets deliver, Fitch expects leverage to decline to around mid-7x over the forecast period to 2023. HHC's net debt to recurring operating EBITDA leverage is high relative to low investment-grade-rated equity REIT peers, partly due to the company's development focus and related non-income-producing assets. Moreover, the company generates a high percentage of income from non-recurring asset sales within its MPC and strategic development segments, which Fitch views as more volatile than contractual rental income. Fitch also considers HHC's net debt/capital, a supplemental metric commonly used to analyze homebuilders, which was approximately 50% for the quarter ended June 30, 2020 and 55% for the full year ended Dec. 31, 2019. Fitch expects this metric to improve to the mid-40% range during the forecast period through 2023. Prefunded Development Mitigates Risk: HHC prefunds all development with non-recourse secured debt. The company does not begin construction until all cash needed is on the balance sheet. Fitch views this strategy as mitigating unfunded development pipeline risk. As of June 30, 2020, HHC's projects under construction had a total estimated cost of $4.3 billion with $1.4 billion remaining to be spent, including $1 billion in committed debt to be drawn. Unfunded development cost to complete represents approximately 5% of undepreciated assets. Fitch generally views development cost to complete as a percentage of undepreciated assets over 10% as a concern. The company develops within its core MPCs, which Fitch views positively. The Seaport District development project in NYC has been affected by government restrictions related to the coronavirus pandemic. Public access areas have reopened during the day, but many business and venues remain closed. Although construction has been allowed to restart in the latest re-opening phase, new guidelines will likely delay the pace. The segment generated negative NOI in 2019 and 2Q20, and the path to recovery remains unclear. Fitch assumptions provide for positive NOI generation by 2022. Adequate Near-Term Liquidity: The company's ample near-term liquidity is primarily due to approximately $931 million in readily available cash as of June 30, 2020 and remaining availability of $23.7 million on the company's revolving credit facility. The company enhanced its liquidity though an approximately $600 million equity issuance during the first quarter of 2020. The company has $1.4 billion remaining to be spent on projects under construction as of June 30, 2020, of which it has $1 billion in committed debt to be drawn. Speculative-Grade Capital Access: The company has demonstrated capital access to the unsecured bond market with four issuances totaling $2.5 billion, inclusive of this $750 million unsecured issuance, since the company's inception. The company has $2 billion in non-core assets it plans to redeploy into investment opportunities. Given the disruption to capital markets, Fitch's model provides for $1.5 billion of dispositions over the forecast period to fund spending needs and debt repayment. Strategic Management Shift: Since the management shift in 2019, HHC has established a transformation plan. The plan details reducing $45 million-$50 million annually in G&A expenses, disposing of $2 billion of non-core assets and refining development focus to only core MPCs. Fitch believes the above transformation plan will take over 12 months to execute. DERIVATION SUMMARY Although HHC has not elected REIT status, Fitch views select U.S. equity REITs and, to a lesser extent, U.S. homebuilders as comparable peers, notwithstanding the company's differentiated business model that includes ownership of multiple commercial property types in and around select MPCs, as well as its high exposure to sales income from developed lots and merchant developments. The company generates approximately half of its NOI from contractual rents from its operating portfolio properties, including office, multifamily, retail and, to a lesser extent, hotels located in and adjacent to its MPCs. HHC's portfolio is more diversified by property type than higher-rated, Sunbelt-focused multifamily REIT peers Camden Property Trust (A-/Stable) and Mid-America Apartment Communities (BBB+/Stable); however, the company operates at considerably higher net debt/recurring operating EBITDA leverage and reliance on non-contractual residential land sales. HHC's portfolio is more diversified by geography and property type than Mid-Atlantic office and multifamily REIT peer Mack-Cali Realty Corporation (BB-/Negative), including greater exposure to select Sunbelt markets, which benefit from migration and job growth but also face lower physical and zoning barriers to entry. Fitch considers debt to capitalization as a secondary leverage measure given HHC's high level of non-income-producing land and homebuilding industry exposure. Fitch expects the company will operate with a debt capitalization ratio of 40%-50% over the forecast period, which is moderately above the 35% to 40% range for homebuilding peer Toll Brothers, Inc. (BBB-/Stable). KEY ASSUMPTIONS -- Overall SSNOI declines of 10% in 2020 driven by closed assets, rebounds 8% in 2021 and grows 4% per year in 2022-2023. -- Development deliveries of operating and Seaport assets totaling $1.6 billion at 7.4% over the forecast period. Seaport District turns NOI positive in 2022 as developments stabilize. -- Modest revenue declines in the MPC segment in 2020-2021, predominantly tied to assumptions of homebuilder sales and low-single-digit increases through 2022-2023. Minimal condo sales in 2020, rebounding in 2021 to 80% of 2018-2019 levels and increasing 7% per year in 2022-2023. -- $1.5 billion of dispositions at 6% over the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- REIT leverage (net debt to recurring operating EBITDA) sustaining below 7x, assuming a similar or modestly greater percentage of NOI from contractual rents. -- REIT fixed-charge coverage sustaining above 2.5x. -- Growth in HHC's operating assets resulting in NOI from recurring contractual rental income comprising 70% of net operating income. -- Growth in unencumbered assets and/or UA/UD coverage improving to 1.75x, or greater. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch expectations of REIT leverage (net debt to recurring operating EBITDA) sustaining above 9x. -- Expectations of REIT fixed-charge coverage sustaining below 1.5x. -- Expectations of deteriorating access to capital markets. -- Execution missteps related to HHC's transformation plan in key areas, such as reducing corporate overhead, non-core asset sales and growing the contribution from recurring operating portfolio rents. 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 Fitch estimates HHC's base case liquidity coverage to remain solid through fiscal 2021 pro forma for the unsecured bond issuance. The company's sources include retained cash flow, $23.7 million availability on its $700 million credit facility, approximately $931 million cash on hand and approximately $1 billion committed debt to be drawn on existing development projects. Fitch expects that HHC will use the $750 million unsecured bond issuance, in addition to cash on hand, to redeem approximately $824 million in secured debt. Fitch defines liquidity coverage as sources of liquidity divided by uses of liquidity. Sources include unrestricted cash, availability under unsecured revolving credit facilities and retained cash flows from operating activities after dividends. Uses include pro-rata debt maturities, expected recurring capex and forecast (re)development costs. 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. HOWARD HUGHES: Moody's Rates New $750MM Senior Unsec. Notes 'Ba3' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to The Howard Hughes Corporation's proposed $750 million senior unsecured notes due 2028. All other ratings for the company remain unchanged. The outlook is stable. The proceeds from the new notes will be used to partially repay outstanding borrowings under the company's senior secured facilities and for general corporate purposes. The transaction will be leverage neutral while improving the company's debt maturity profile. Pro forma for the proposed offering, Moody's projects HHC's debt-to-book capitalization (inclusive of Moody's adjustments) will be 54% at year-end 2020. "With the proposed $750 million offering, Howard Hughes will enhance its financial flexibility by pushing out its debt maturities," said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Assignments: Issuer: The Howard Hughes Corporation Senior Unsecured Notes, Assigned Ba3 (LGD5) RATINGS RATIONALE Howard Hughes' Ba2 corporate family rating reflects the company's position as a leading US homebuilder with a diversified portfolio of assets and growing profitability from income producing properties. In addition, Moody's credit rating is supported by more than $3.7 billion in book equity and a valuable land portfolio located in some of the most desirable and supply constrained cities in the US. At the same time, Moody's rating takes into consideration the company's debt leverage and revenue volatility from the widening spread of the coronavirus outbreak. ESG considerations Moody's evaluated for Howard Hughes, in addition to the coronavirus effects, is the governance risk associated with Pershing Square being a large stakeholder in the company. Moody's believes this risk is partially mitigated by Howard Hughes' disclosure requirement as a publicly traded entity on the NYSE and Pershing Square's history of being a thoughtful and supportive long-term investor in Howard Hughes. The stable outlook reflects Moody's expectation that during this uncertain economic environment Howard Hughes will maintain a prudent approach to its balance sheet management and liquidity profile. In addition, Moody's outlook considers the significant percentage of non-refundable condominium pre-sales for delivery in 2020 and 2021, which will provide future relative operating stability. Howard Hughes' SGL-3 Speculative Grade Liquidity rating reflects Moody's expectation of an adequate liquidity profile over the next 12 to 18 months. At June 30, 2020, the company had approximately $931 million in cash. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: The ratings could be upgraded if: - Adjusted debt leverage is below 40% for a sustained period of time - EBITDA-to-Interest expense is approaching 4.0x - The company improves its free cash flow and maintains a good liquidity profile The ratings could be downgraded if: - The adjusted debt leverage is above 55% for a sustained period of time - EBITDA-to-Interest expense is below 2.0x for a sustained period of time - The company's liquidity profile deteriorates The principal methodology used in these ratings was Homebuilding and Property Development Industry published in January 2018. Headquartered in Dallas, Texas, Howard Hughes was spun off from General Growth Properties in November 2010. The company operates in three different segments: lot sales to homebuilders from its own master planned communities; rental and other income from developed mixed use properties (referred to as the Operating Assets segment); and Strategic Developments, which include mixed use properties held for future development and redevelopment. HS MIDCO: S&P Rates Term Loan for Data Security Acquisition 'B-' ---------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level and '3' recovery ratings to security software and automation software provider HS Midco Inc.'s (dba HelpSystems) $145 million euro-equivalent incremental first-lien term loan. Proceeds from the loan and a $60 million second-lien term loan (unrated, privately placed) will be used to fund an acquisition focused on secure data transfer. S&P Global Ratings' 'B-' issuer credit rating on HelpSystems and 'B-' issue-level and '3' recovery rating on its first-lien credit facility are unchanged. HS Purchaser LLC is the borrower. HelpSystems continues to use acquisitions to move away from low-growth IBM solutions to higher-growth security solutions. S&P Global Ratings believes the majority of HelpSystems' revenue now comes from its security solutions; previously it was a fraction. The rating agency believes HelpSystems will continue to pursue debt-funded acquisitions to expand its security solutions. While S&P Global Ratings-adjusted leverage will be in the high-7x area at transaction close, HelpSystems' mission critical solutions, approximately 80% recurring revenue, total liquidity around $70 million, above 50% S&P Global Ratings-adjusted EBITDA margins, and expected positive unadjusted free operating cash flow in 2020 will help provide sufficient liquidity for debt service over the next couple of years. ISSUE RATINGS - RECOVERY ANALYSIS Key analytical factors -- S&P Global Ratings assigned its 'B-' issue-level rating to the $145 million euro-equivalent incremental first-lien term loan with a '3' recovery rating, indicating its expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in a default. -- The 'B-' issue-level and '3' recovery rating on its $60 million revolving credit facility and $912 million first-lien term loan are unchanged. -- S&P Global Ratings' simulated default scenario assumes a payment default in 2022 as revenue deteriorates in the wake of the macroeconomic impact from the COVID-19 pandemic, increased competition from larger companies, and a large portion of HelpSystems' client base reduces use of IBM Power systems. -- S&P Global Ratings values the company as a going concern because it believes following a payment default it is likely to be reorganized rather than liquidated, reflecting its leading brand and market position. -- S&P Global Ratings applies a 6x multiple to an estimated distressed emergence EBITDA of $116 million to estimate a gross enterprise value at emergence of about $695 million. The multiple is consistent with that used for other software companies with similar scale, growth trajectory, and market position. Simulated default assumptions -- Simulated year of default: 2022 -- EBITDA at emergence: $116 million -- EBITDA multiple: 6x -- Revolving credit facility: 85% drawn at default Simplified waterfall -- Net enterprise value after 5% administrative costs: $661 million -- Valuation split (obligors/nonobligors): 85%/15% -- Total value available to first-lien creditors: $647 million -- Secured first-lien debt claims: $1.13 billion -- Recovery expectations: 50%-70% (rounded estimate: 55%) -- Total value available to second-lien creditors: $13 million -- Secured second-lien debt claims: $305 million All debt amounts include six months of prepetition interest. J.C. PENNEY: Losses Mounted for Months Leading to Bankruptcy Filing ------------------------------------------------------------------- Samantha McDonald, writing for Yahoo.com, reports that several months prior to bankruptcy filing, J.C. Penney Company Inc.'s balance sheet recorded massive losses. The beleaguered department store announced in a filing with the Securities and Exchange Commission that it had suffered a $546 million loss in the first quarter, compared with the prior year period's $154 million loss. Its revenues also plunged from $2.56 billion a year ago to $1.2 billion in the three months ended May 2. What's more, JCPenney's operating loss ballooned to $477 million, versus last year's loss of $93 million. That figure was 40% more than it predicted it would lose when it released preliminary financial results three weeks ago. The Plano, Texas-based chain is currently in the process of liquidating locations as part of its store optimization strategy. (It operates 846 units across the country and employs more than 90,000 workers.) Two weeks ago, the company confirmed an initial phase of 136 permanent closures, followed by last week’s announcement of another round of 13 outposts set to shut down in the coming months. It anticipates a third wave of closures but has yet to provide a date for such sales. In total, JCPenney expects to close 242 doors, or about 29% of its fleet, by February. As part of its plan to restructure, the retailer intends to reduce its brick-and-mortar footprint, while focusing its resources on top-performing locations and its e-commerce business. JCPenney, which was founded 118 years ago, filed for Chapter 11 protection in mid-May. According to the filing, it had $500 million in cash at hand and received debtor-in-possession financing commitments of $900 million. It also recently received court approval to access $450 million of new money from its first-lien lenders, $225 million of which will be drawn immediately. The retailer's longtime struggles were compounded amid the COVID-19 pandemic, which forced it to shutter scores of outposts across the country and furlough most of its retail associates. Today, nearly all of its outposts have reopened with safety precautions in place following coronavirus-related closures. About J.C. Penney J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors have tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney A committee of unsecured creditors has been appointed in Debtors' Chapter 11 cases. The committee is represented by Cole Schotz, P.C., and Cooley, LLP. JDUB'S BREWING: Jennis Law Firm Seeks Payment of $49,600 in Fees ---------------------------------------------------------------- David Jennis, P.A. d/b/a Jennis Law Firm, counsel to JDub's Brewing Company, LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida for: (i) allowance and payment of compensation for services rendered in the amount of $28,649.00 and reimbursement of expenses paid and incurred in the amount of $958.04, totaling $29,607.04 in such capacity for the period April 6, 2020 through August 3, 2020; (ii) allowance and payment of compensation for anticipated services rendered in the amount of $19,000.00 and reimbursement of anticipated expenses paid to be incurred in the amount of $1,000.00, totaling $20,000.00 in such capacity for the period of August 4, 2020 through the effective date if a plan of reorganization. JDub's Brewing won court approval in May to hire Tampa-based Jennis Law Firm as their legal counsel. The Firm's Daniel E. Etlinger assumed primary responsibility as lead bankruptcy counsel. Mr. Etlinger is supported by David S. Jennis, Erik Johanson and Mary A. Joyner as necessary. The Debtor required the Firm to provide these services: (a) Take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on its behalf, the defense of any actions commenced against the Debtor, negotiations concerning any litigation in which the Debtor may be involved, and objections, when appropriate, to claims filed against the estate; (b) prepare, on behalf of the Debtor, any applications, answers, orders, reports, and/or papers in connection with the administration of the estate; (c) counsel the Debtor with regard to its rights and obligations as a debtor-in-possession; (d) prepare and file schedules of assets and liabilities; (e) prepare and file a chapter 11 plan and corresponding disclosure statement; and (f) perform all other necessary legal services in connection with this chapter 11 case. The Debtor filed a Chapter 11 Small Business Subchapter V Plan in July. A hearing is scheduled for Aug. 26 at 10:00 a.m. in Tampa, Florida, to consider confirmation of the Plan. Mr. Etlinger disclosed that the Firm received a pre-petition bankruptcy retainer as an inducement to undertake the proposed representation. A portion of the Retainer was used to reimburse the Firm for pre-petition services and the filing fees required to commence this Chapter 11 case. The Firm said it would apply the balance of its Retainer, as permitted under Local Rule 2016-1(b), to its monthly statements for services rendered and costs incurred after the Petition Date. The Firm's hourly rates range from $120-$160 for paralegals to $275-$475 for attorneys. The Debtor has agreed to contribute an additional $10,000 to the Firm as part of its bankruptcy retainer which was included in the Debtor's cash collateral budget. The Firm and its attorneys are disinterested and do not hold or represent any interest adverse to the Debtor's estate. Jennis Law can be reached through: David S. Jennis, Esq. Daniel E. Etlinger, Esq. JENNIS LAW FIRM 606 East Madison Street Tampa, FL 33602 Facsimile: (813) 405-4046 Telephone: (813) 229-2800 E-mail: detlinger@jennislaw.com ecf@jennislaw.com About JDub's Brewing Based in Sarasota, Florida, JDub's Brewing Company, LLC is a privately held company in the beverage manufacturing industry. The company filed for chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 20-02926) on April 6, 2020, with total assets of $697,542 and total liabilities of $1,687,781. The petition was signed by Jeremy Joerger, its CEO. JDUB'S BREWING: Low Seeks $22,600 in Fees for CFO Work ------------------------------------------------------ Robert J. Low, has filed a final application for compensation and reimbursement of expenses for his services rendered as Fractional Chief Financial Officer to the debtor JDub's Brewing Company, LLC. Mr. Low seeks final allowance and payment of compensation for services: (i) rendered and expense reimbursement in the total amount of $17,665.00 for the period of April 6, 2020 through July 31, 2020; and (ii) anticipated to be rendered and expense reimbursement anticipated to be incurred in the total amount of $5,070.00 for services from August 1, 2020 through the effective date of a bankruptcy plan. The Debtor filed a Chapter 11 Small Business Subchapter V Plan in July. A hearing is scheduled for Aug. 26 at 10:00 a.m. in Tampa, Florida, to consider confirmation of the Plan. JDub's Brewing sought and obtained approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Bob Low as its fractional chief financial officer and Bay Area Bookkeeping LLC as its bookkeeper. As Fractional CFO, Mr. Low provides advisory and financial services in connection with the Debtor's business operations. Specifically, he assists with budgets, forecasts, reviews vendor agreements, assists with monthly operating reports and renders other tasks necessary in the bankruptcy. As bookkeeper, Bay Area Bookkeeping provides day-to-day accounting, collections, accounts payable and organizational assistance necessary in the bankruptcy. Mr. Low agreed to be paid $115 per hour for his services and Bay Area Bookkeeping $25 per hour. About JDub's Brewing Based in Sarasota, Florida, JDub's Brewing Company, LLC is a privately held company in the beverage manufacturing industry. The company filed for chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 20-02926) on April 6, 2020, with total assets of $697,542 and total liabilities of $1,687,781. The petition was signed by Jeremy Joerger, its CEO. KDJJ ENTERPRISES: Lake & Cobb Approved as Legal Counsel ------------------------------------------------------- KDJJ Enterprises, Inc. sought and obtained approval from the U.S. Bankruptcy for the District of Arizona to hire Lake & Cobb, P.L.C. as counsel. The Debtor says the firm is competent to represent it in the proceedings in the Bankruptcy Court and the attorneys at the firm are already familiar with the financial affairs of the Debtor. The Debtor requires the firm to: (a) Give advice regarding the operation of the Debtor's affair; (b) negotiate and formulate a plan of reorganization; and (c) perform other and further legal services as will become necessary in the course of these proceedings. The firm's professionals who will render services to the Debtor and their hourly rates are: Professional Hourly Rate ------------ ----------- Don C. Fletcher $325 Jospeh Glenn $300 Sheryl L. Andrew $220 Partners $250-$350 Associates $185-$275 Paralegals $160-$170 Legal Assistants $60-$125 In addition, the firm will seek reimbursement in full for all reasonably incurred expenses, including, without limitation, travel costs, long distance calls, courier and express mail costs, special or hand deliveries, copying costs, document processing, court fees, transcript costs and other expenses. Lake & Cobb, P.L.C. attests that it is a "disinterested person" as required by 11 U.S.C. section 327 (a) and as defined in 11 U.S.C. section 101(14). The firm can be reached through: Don C. Fletcher, Esq. LAKE & COBB, P.L.C. 1095 W. Rio Salado Parkway, Suite 206 Tempe, AZ 85281 Tel: 602-523-3000 Fax: 602-523-3001 E-mail: dfletcher@lakeandcobb.com About KDJJ Enterprises Based in Casa Grande, Arizona, KDJJ Enterprises, Inc. filed for chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 20-03441) on March 30, 2020, listing $1 million to $10 million in estimated assets and liabilities. The petition was signed by David A. Ellis, president/CEO. LADAN INC: Unsecureds to Recover 8.75% of Allowed Claims -------------------------------------------------------- Ladan, Inc., submitted a Combined Chapter 11 Plan of Reorganization and Disclosure Statement. Part 1 contains the treatment of creditors with secured claims; Part 2 contains the treatment of general unsecured creditors: a pro rata portion of $440,025, likely to result in a 8.75% recovery of allowed claims in quarterly payments over 20 quarters. Taxes and other priority claims would be paid in full, as shown in Part 3. Class 1A Bank of the West is impaired with a total amount due $99,505 bearing interest rate of 4%. The claims will be paid $1,832 monthly for 60 months. Class 2(a) Merchant Cash Advance ("MCA") claims are impaired. Such claims are not deemed allowed under 11 U.S.C. Section 1111(a) unless the holders of such claims timely filed Proof of Claim in the case. As none of the following Class 2(a) claims timely filed Proofs of Claim in the Debtor’s case, the holders of such claims shall not receive anything under the Plan. Class 2(b) Undisputed General Unsecured Claims are impaired. Creditors will receive a pro-rata share of a fund totaling $440,025, created by Debtor's payment of $20,001 per quarter for a period of 20 quarters, starting with the first full quarter following the Effective Date of the Plan, with two additional $20,000 payments made on the 15th of the month for the first two months of the Plan. A full-text copy of the Combined Chapter 11 Plan of Reorganization and Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/ya5f9pxx from PacerMonitor.com at no charge. Attorneys for Ladan Inc.: JEFFREY J. GOODRICH, SBN 107577 GOODRICH & ASSOCIATES 336 Bon Air Center, #335 Greenbrae, CA 94904 Tel: (415) 925-8630 About Ladan Inc. Ladan, Inc. -- http://ludwigsfinewine.com/-- is a private held company that owns and operates wine, beer, and liquor stores. Ladan, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30130) on Feb. 6, 2020. The case is assigned to Judge Dennis Montali. In the petition signed by Magid Nazari, president, the Debtor had $258,503 in assets and $7,672,414 in liabilities. Jeffrey Goodrich, Esq., at GOODRICH & ASSOCIATES, is the Debtor's counsel. LIBBEY GLASS: U.S. Trustee Questions Pre-Bankruptcy Bonuses ----------------------------------------------------------- Leslie A. Pappas, writing for Bloomberg Law, reports that Libbey Glass Inc. is facing the Justice Department's opposition to its bankruptcy loan, over a provision in the loan terms that bans future lawsuits challenging over $2.35 million in executive bonuses. Libbey paid five insiders the retention bonuses less than two weeks before filing for bankruptcy June 1, according to a June 26 filing by the U.S. Trustee's Office, the DOJ's bankruptcy watchdog. About Libbey Glass Inc. Based in Toledo, Ohio, Libbey Inc. (NYSE American: LBY) is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the U.S., Mexico, China, Portugal and the Netherlands. In existence since 1818, the Company supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries. Libbey's global brand portfolio, in addition to its namesake brand, includes Libbey Signature, Master's Reserve, Crisa, Royal Leerdam, World Tableware, Syracuse China, and Crisal Glass. In 2019, Libbey Inc.'s net sales totaled $782.4 million. For more information, visit http://www.libbey.com/ Libbey Glass Inc. and 11 of its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11439) on June 1, 2020. In the petition signed by CEO Michael P. Bauer, Libbey Glass was estimated to have $100 million to $500 million in assets and $500 illion to $1 billion in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger,P.A., as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Lazard Ltd as investment banker. Prime Clerk LLC is the claims agent, maintaining the page https://cases.primeclerk.com/libbey LIBERTY HOLDING: Unsecureds Will Recover 10% of Claims ------------------------------------------------------ Liberty Holding, LLC, submitted a Plan and a Disclosure Statement. The Debtor made payments pursuant to the terms of its confirmed Chapter 11 Plan until the Fall of 2019. At the time of the closing of the Debtor's prior Chapter 11 case, the Debtor had owed $40,000 in unpaid real estate taxes. The Debtor had kept current with its post-confirmation tax debt and had paid the arrearage tax debt down to approximately $17,000 owed at the time of the filing of the instant Chapter 11 case. Class 2 Secured claim of Blue Ridge Bank with a claim of $423,359 is impaired. The creditor will receive a monthly payment of $3,811 beginning 30 days from effective date of Plan and ending on March 2024 with interest rate of 8%. Class 3 Secured claim of Small Business totaling $405,000 will receive a monthly payment of $1,141 beginning 30 days from effective date of Plan and ending on May 2045 with interest rate of 2%. Class 4 General unsecured class, which is impaired, will receive a monthly payment of $455 per month beginning 30 days from the effective date of the Plan and ending 30 months after they begin with estimated percent of claim paid of 10%. Class 5 equity interest holders are impaired. Upon the Effective Date of the Plan, all membership interests will be modified so as to deprive the holders thereof of any rights in respect of the Debtor to any distribution upon liquidation of the limited liability company, or upon sale of all or substantially all of the Debtor's assets, and will be further modified to provide that no dividends shall be paid by reason of such member interests. Payments and distributions under the Plan will be funded by disposable earnings and capital contributions. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/y6uop87s from PacerMonitor.com at no charge. Counsel for Liberty Holding LLC: Robert B. Easterling 2217 Princess Anne Street, Suite 100-2 Fredericksburg, Virginia 22401 Tel: (540) 373-5030 Fax: (540) 373-5234 E-mail: eastlaw@easterlinglaw.com About Liberty Holding Liberty Holding, LLC, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Va. Case No. 20-10947) on March 30, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Robert B. Easterling, Attorney at Law. LIQUIDMETAL TECHNOLOGIES: Incurs $643K Net Loss in Second Quarter ----------------------------------------------------------------- Liquidmetal Technologies, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q, disclosing a net loss of $643,000 on $33,000 of total revenue for the three months ended June 30, 2020, compared to a net loss of $3.22 million on $132,000 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 $1.39 million on $104,000 of total revenue compared to a net loss of $4.99 million on $355,000 of total revenue for the six months ended June 30, 2019. As of June 30, 2020, the Company had $39.69 million in total assets, $1.25 million in total liabilities, and $38.44 million in total shareholders' equity. Cash used in operating activities totaled $1,204,000 and $2,456,000 for the six months ended June 30, 2020 and 2019, respectively. The cash was primarily used to fund operating expenses related to the Company's business and product development efforts. Following the completion of the 2019 Restructuring Plan, cash used in operating activities for the six months ended June 30, 2020 will be reflective of cash usages going forward. Cash provided by (used in) investing activities totaled $2,187,000 and $(592,000) for the six months ended June 30, 2020 and 2019, respectively. Investing inflows primarily consist of proceeds from the sale of debt securities. Investing outflows primarily consist of purchases of debt securities and capital expenditures for additional production equipment and building improvements. Cash provided by financing activities totaled $0 and $14,000 for the six months ended June 30, 2020 and 2019, respectively. Cash provided by financing activities is comprised of cash received for the issuance of shares following the exercise of stock options. A full-text copy of the Form 10-Q is available for free at: https://is.gd/D14ftU About Liquidmetal Technologies Lake Forest, California-based Liquidmetal Technologies, Inc. -- http://www.liquidmetal.com/-- is a materials technology company that develops and commercializes products made from amorphous alloys. The Company's family of alloys consists of a variety of bulk alloys and composites that utilize the advantages offered by amorphous alloys technology. The Company designs, develops and sells products and custom parts from bulk amorphous alloys to customers in a wide range of industries. The Company also partners with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products. Liquidmetal reported a net loss of $7.43 million for the year ended Dec. 31, 2019, compared to a net loss of $8.70 million for the year ended Dec. 31, 2018. LOGMEIN INC: S&P Assigns 'B-' ICR on Francisco Partners Acquisition ------------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to LogMeIn Inc. after the cloud-based solutions provider entered into a definitive agreement to be acquired by Francisco Partners for approximately $4.3 billion. The company will fund the transaction with approximately $1.4 billion of sponsor equity, a $1.95 billion first-lien term loan, $750 million of first lien senior secured notes, $500 million second-lien term loan, and an undrawn $250 million revolver. At the same time, S&P assigned its 'B-' issue-level and '3' recovery ratings to the company's first-lien debt, and its 'CCC' issue-level and '6' recovery ratings to the second-lien term loan. The 'B-' issuer credit rating reflects LogMeIn's high initial adjusted leverage (excluding planned cost control) about 9x as of May 31, 2020. The rating also reflects LogMeIn's moderate scale within a highly competitive industry with low barriers to entry and several substitutes. However, the company's highly recurring revenue base, low customer concentration, and opportunity to substantially optimize costs partly offset these weaknesses. LogMeIn provides a diverse suite of products--which include meeting and telephony solutions, password management, remote access, and digital customer support—and primarily caters to small to midsize (SMB) firms. Its good revenue visibility comes from multiyear contracts and 97% annual recurring revenue, most of which is collected a year in advance. The company also benefits from high retention rates of about 90% with higher bookings over the past several quarters. LogMeIn primarily targets SMB clients that look to displace traditional private branch exchange (PBX) systems with internet-supported unified communication solutions. SMB clients usually do not have sophisticated information technology (IT) departments, so they seek comprehensive cloud platforms to keep upfront investments and ongoing IT costs relatively low. Unlike the saturated enterprise space, the SMB sector is relatively underpenetrated, providing opportunities for new entrants. The unified communication industry is large and expanding, and it benefits from a temporary demand surge due to remote work amid the COVID-19 pandemic. LogMeIn increased revenue by about 8% through May 2020, rising from customer demand especially for its telephony and password management segments as well as additional cross-selling for existing customers. Historically, LogMeIn's heavy sales and marketing investment (averaging 38% of revenue based mostly on direct sales) did not consistently lead to top-line growth. The plan to place more emphasis on e-commerce sales will alleviate some operating expenses, contributing to margin improvement. S&P expects revenue to slow to the low- to mid-single–digit percent in 2021 as workers gradually return to offices, reducing usage of several collaboration tools. It expects EBITDA margins to rise to the low-30% area in 2021 from about 27% in 2020, mainly stemming from cost savings with a total run rate of approximately $128 million. LogMeIn swiftly eliminated about $100 million in costs in 2018 after its 'GoTo' merger. However, EBITDA margins dipped in the subsequent year but should provide space for anticipated cost control. S&P expects the company to realize the entire cost savings plan over the next two years, ultimately arriving at an EBITDA margin of about mid-30% in 2022. The rating agency expects margin enhancement initiatives to extract about $97 million of savings through 12 months and an additional $31 million the following 12 months. S&P estimates LogMeIn's initial adjusted leverage of about 9x as of May 31, 2020. It reduces EBITDA by software development costs of about $40 million, and expects leverage to decline toward the low-7x area by the end of 2021. S&P also expects LogMeIn to generate free cash flow of $190 million-$200 million over the next year, burdened by interest expense of approximately $180 million and improving further as acquisition-related one-time costs roll off and cost savings goals are met. The positive outlook reflects S&P's expectation that the company's cost-cutting efforts will materially improve EBITDA margins and reduce leverage toward the low-7x area by the end of 2021. It also expects free cash flow to debt in the mid-single–digit percent over the next 12 months. "We could revise our outlook to stable if we expect leverage to remain above 7.5x. This could occur if LogMeIn cannot deliver cost cuts, its operations significantly underperform our base case, or it engages in a large debt-funded acquisition," S&P said. "We could raise our ratings over the next year if we expect leverage is on a path to decline and will sustain below 7.5x. In this scenario, we would expect LogMeIn to maintain organic revenue growth in the low- to mid-single-digit percent area and substantially improve profitability and free cash from cost-reduction initiatives," the rating agency said. LONESTAR RESOURCES: Obtains Forbearance from Lenders & Noteholders ------------------------------------------------------------------ Lonestar Resources US Inc. and certain of its subsidiaries, entered into a forbearance agreement with certain holders of outstanding notes and any additional holder of Notes on July 31, 2020. Lonestar Resources elected not to make the approximately $14.1 million interest payment due and payable on July 1, 2020 with respect to its 11.25% senior notes due 2023 issued under the indenture governing the Notes, dated as of Jan. 4, 2018. The Company elected not to make the Interest Payment in order to evaluate certain financial alternatives. The Company's failure to make the Interest Payment on July 1, 2020 represented an event of default under the Credit Facility at that time and the Company's failure to make the Interest Payment within thirty days after it is due and payable constitutes an "event of default" under the Indenture. As active discussions are still ongoing regarding the Company's evaluation of financial alternatives, the Company determined it would not make the Interest Payment prior to the expiration of the thirty day grace period, resulting in an event of default under the Indenture. Pursuant to the Forbearance Agreement, subject to certain terms and conditions, the Forbearing Holders have agreed to temporarily forbear from the exercise of any rights or remedies they may have in respect of the aforementioned event of default under the Indenture. The Forbearance Agreement terminates on Aug. 21, 2020, unless certain specified circumstances cause an earlier termination. Amendment to the Forbearance Agreement, Fourteenth Amendment, and Borrowing Base Agreement As previously disclosed, on July 2, 2020, the Company and certain of its subsidiaries entered into a Forbearance Agreement, Fourteenth Amendment, and Borrowing Base Agreement with Citibank, N.A., as administrative agent, and the lenders party thereto with respect to the Company's senior secured credit facility. Pursuant to the Credit Facility Forbearance Agreement, among other things, the administrative agent and the lenders under the Credit Facility agreed to refrain from exercising their rights and remedies under the Credit Facility and related loan documents with respect to certain defaults, including the Company's failure to make the Interest Payment on time, until July 31, 2020, subject to an earlier termination as a result of certain specified circumstances. On July 31, 2020, the Company and certain of its subsidiaries entered into an Amendment with respect to the Credit Facility Forbearance Agreement with the Lenders, pursuant to which the Lenders agreed to extend the stated term of the Credit Facility Forbearance Agreement until Aug. 21, 2020. About Lonestar Resources Headquartered in Fort Worth, Texas, Lonestar -- http://www.lonestarresources.com/-- is an independent oil and natural gas company, focused on the development, production, and acquisition of unconventional oil, natural gas liquids, and naturalgas properties in the Eagle Ford Shale in Texas, where the Company has accumulated approximately 72,642 gross (53,831 net) acres in what it believes to be the formation's crude oil and condensate windows, as of Dec. 31, 2019. Lonestar Resources reported a net loss attributable to common stockholders of $111.56 million for the year ended Dec. 31, 2019, compared to net income attributable to common stockholders of $11.53 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $616.35 million in total assets, $586.73 million in total current liabilities, $19.28 million in total long-term liabilities, and $10.34 million in total stockholders' equity. BDO USA, LLP, in Dallas, Texas, the Company's auditor since 2013, issued a "going concern" qualification in its report dated April 13, 2020 citing that the Company did not satisfy certain covenants under the Company's revolving credit facility as of Dec. 31, 2019 and does not anticipate maintaining compliance with the consolidated current ratio covenant over the next twelve months, which could lead to acceleration of the Company's debt obligations. These matters raise substantial doubt about the Company's ability to continue as a going concern. M & H PINE STRAW: Unsecureds Will Recover 9.6% of Claims -------------------------------------------------------- M & H Pine Straw, Inc., submitted a Plan and a Disclosure Statement. The Debtor's Plan provides for the satisfaction of all allowed administrative claims on the Effective Date or as soon as practicable thereafter, unless otherwise agreed by the holder of such claim. As to each administrative claim allowed thereafter, payment will be made as soon as practicable. The Debtor's Plan also provides for the satisfaction of all priority tax indebtedness either in cash or over a five-year period in installments with interest as provided in 11 U.S.C. Sec. 1129. There are no known priority claims other than administrative expense claims and tax claims. Amur holds a first-priority lien on: (a) two 2006 Volvo tractor trucks, which the Debtor values at $3,500 each ($7,000 total); (b) one 2006 Kidron trailer, which the Debtor values at $2,500; and (c) one 2017 Peerless hopper trailer, which the Debtor values at $20,000, for a total secured claim of $29,500. The Reorganized the Debtor will pay Amur the total amount of its secured claim, $29,500, plus interest at the rate of 4.25% interest per annum, in monthly installments of $1,284 per month over the course of two years. The balance of any indebtedness owed to Amur, approximately $6,700, will be treated as a Class 6 General Unsecured Claim. Daimler holds a first priority lien on (a) two 2019 Freightliners, which the Debtor values at $101,000 each ($202,000 total); and (b) six 2018 Freightliners, which the Debtor values at $85,000 each ($510,000 total), for a total secured claim of $712,000. The Reorganized Debtor will pay Daimler the total amount of its secured claim, $712,000, plus interest at the rate of 4.25% interest per annum, in monthly installments of $13,193 per month over the course of five years. The balance of any indebtedness owed to Daimler, approximately $192,000, less payments received after the filing of the Case, will be treated as a Class 6 General Unsecured Claim. LCA holds a first priority lien on (a) six 2005 utility trailers, which the Debtor values at $2,500 each ($15,000 total); and (b) two 2004 utility trailers, which the Debtor values at $2,500 each ($5,000 total), for a total value of $20,000, which exceeds the indebtedness owed to LCA as of the Petition Date. After application of the June 2020 payment to LCA, the Debtor estimates the remaining LCA secured claim to be approximately $9,100 as of the date of this Disclosure Statement. The Reorganized Debtor will pay LCA the total amount of its secured claim (estimated at $9,100) plus interest at the rate of 4.25% interest per annum, in monthly installments of $776 over the course of 12 months. The value of the LCA Assets in excess of the LCA secured claim has been included in the total amount to be paid to general unsecured creditors. Newtek holds a first-priority lien on (a) 84 trailers with model years ranging from 1983 to 2001, which the Debtor values at $56,765 total; (b) miscellaneous property which the Debtor values at $2,100; and (c) all of the Debtor's accounts receivable, which the Debtor estimates will equal $120,000 as of the Confirmation Date, for a total estimated secured claim of $178,865. The actual amount of Newtek's secured claim will be adjusted based on the actual accounts receivable as of the Confirmation Date. The Reorganized the Debtor will pay Newtek the amount of its secured claim in a lump sum on the Effective Date of the Plan. The balance of any indebtedness owed to Newtek, approximately $1,711,000, less payments received after the filing of the Case, will be treated as a Class 6 General Unsecured Claim. Volvo holds a first-priority lien on three 2012 Volvo tractor trucks, which the Debtor values at $18,000 each, for a total secured claim of $54,000. The Reorganized Debtor will pay Volvo the total amount of its secured claim, $54,000, plus interest at the rate of 4.25% interest per annum, in monthly installments of $1,600 per month over the course of three years. The balance of any indebtedness owed to Volvo, approximately $64,000, less payments received after the filing of the Case, will be treated as a Class 6 General Unsecured Claim. Based on its schedules, that there are $2,050,901 in general unsecured claims, which includes the estimated deficiency claims of Amur, Daimler, Newtek and Volvo, as well as rejection damages related to the Volvo Leased Assets, as defined in the Plan. These general unsecured claims will be satisfied with payment of each creditors pro rata share of $197,100, or approximately 9.6% of each creditor's claim, which is the fair market value of the Debtor's free and clear assets if the Debtor were to sell the free and clear assets to third parties in arms-length transactions in the normal course of business. As of the Effective Date, the equity shareholder interests in the Debtor held by Mr. Maloy shall be deemed cancelled and rendered null and void, and he shall not receive or retain any property under the Plan on account of such interests, and no distributions or dividends will be paid with respect to those equity interests. The cash distributions contemplated by the Plan will be funded by cash generated in the operation of the Reorganized Debtor's business and by the purchase of new shares in the Reorganized Debtor by BDL Acquisitions, LLC ("BDL") for the total sum of $376,000, on or before the Effective Date, plus additional funding from BDL, in the amounts necessary to pay the operating expenses of the Reorganized Debtor and the Plan payments, if needed. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/y87v2fan from PacerMonitor.com at no charge. Attorneys for Debtor: William A. Rountree Benjamin R. Keck ROUNTREE LEITMAN & KLIEN, LLC Century Plaza I 2987 Clairmont Road, Suite 175 Atlanta, Georgia 30329 Tel: (404) 584-1238 E-mail: wrountree@rlklawfirm.com bkeck@rlklawfirm.com About M & H Pine Straw M & H Pine Straw, Inc., a wholesaler of pine straw, filed a voluntary Chapter 11 petition (Bankr. N.D. Ga. Case no. 20-20099) on Jan. 17, 2020. The petition was signed by Harris Maloy, owner. At the time of the filing, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. William A. Rountree, Esq., at Rountree Leitman & Klein, LLC, is the Debtor's legal counsel. MCCLATCHY CO: Investor Chatham Wins Auction for Assets ------------------------------------------------------ AXIOS reports that McClatchy, America's second-largest newspaper chain, announced that Chatham Asset Management, a New Jersey-based hedge fund, will take over the company's assets as a result of its bankruptcy auction. The Sacramento, Calif.-based McClatchy newspaper chain, home to publications like the Kansas City Star and the Miami Herald, was one of the few remaining local newspaper companies that hadn't yet been taken over by a big investment firm. The agreement will allow McClatchy in the third quarter of 2020 to transition out of Chapter 11 bankruptcy protection, which it filed for in February following a financial emergency related to its pension obligations. Prior to the auction, Chatham was McClatchy's largest investor and creditor. It's been an investor in McClatchy for over ten years. Chatham owns roughly $4 billion in assets. Within the media industry, it also owns majority stakes in Canadian newspaper chain Postmedia and American Media Inc., the publisher of the controversial American tabloid the National Enquirer. About The McClatchy Co. The McClatchy Co. (OTC-MNIQQ) -- https://www.mcclatchy.com/ -- operates 30 media companies in 14 states, providing each of its communities local journalism in the public interest and advertising services in a wide array of digital and print formats. McClatchypublishes iconic local brands including the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange American under the symbol MNI. On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with a Plan of Reorganization that will cut $700 million of funded debt in half. McClatchy was estimated to have $500 million to $1 billion in assets and debt of at least $1 billion as of the bankruptcy filing. The cases are pending before the Honorable Michael E. Wiles. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as general bankruptcy counsel; Togut, Segal & Segal LLP as co-bankruptcy counsel with Skadden; Groom Law Group as special counsel; FTI Consulting, Inc. as financial advisor; and Evercore Inc. as investment banker. Kurtzman Carson Consultants LLC is the claims agent. MECHANICAL TECHNOLOGIES: Sept. 4 Hearing on Disclosure Statement ---------------------------------------------------------------- A Mechanical Technologies Corp. d/b/a Alpine Airis Disclosure Statement, was filed on March 24, 2020, and a hearing for the approval of the Disclosure Statement is currently set for July 8, 2020, at 3:30 p.m. Additionally, a hearing on the motion to convert case to Chapter 7 pursuant to 11 U.S.C. Sec. 1112(b) is scheduled for July 10, 2020, at 10:00 a.m. The hearing for approval of the Disclosure Statement will be continued from July 8, 2020, at 3:30 p.m., to Sept. 4, 2020, at 2:00 p.m., and the hearing on the Motion to Convert is likewise continued from July 10, 2020, at 10:00 a.m., to Sept. 4, 2020, at 2:00 p.m. The parties further agree that the deadline to file any supplemental pleadings is Aug. 14, 2020, and any replies to supplemental pleadings, or replies to the objection to the Debtor's Disclosure Statement, must be filed on or before Aug. 28, 2020. Attorneys for the Debtor: STEPHEN R. HARRIS, ESQ. HARRIS LAW PRACTICE LLC 6151 Lakeside Drive, Suite 2100 Reno, NV 89511 Telephone: (775) 786-7600 E-mail: steve@harrislawreno.com Attorneys for ADVNC Air Technologies, Michael and Mary Regina Donovan: AMY N. TIRRE, ESQ. LAW OFFICES OF AMY N. TIRRE Attorneys for J.W. McClenahan Co.: LOUIS M. BUBALA III, ESQ. KAEMPFER CROWELL About Mechanical Technologies Mechanical Technologies d/b/a Alpine Air -- http://alpineheatingandair.com/-- specializes in offering single source contracting for all residential and commercial design/build needs. The Company services and installs residential heating and air conditioners. Alpine Air has designed, installed and serviced projects including computer rooms, environmental chambers, manufacturing facilities, biotech laboratories, burn-in rooms, and dry rooms. Alpine Air was established in 1987. Mechanical Technologies Corp. d/b/a Alpine Air, based in Reno, NV, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 19-51146) on Sept. 26, 2019. In the petition signed by John Donovan, president, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Hon. Bruce T. Beesley oversees the case. Stephen R. Harris, Esq., at Harris Law Practice LLC, serves as bankruptcy counsel and Robison Sharp Sullivan & Brust, is special counsel. MILANO ACQUISITION: Moody's Assigns B3 CFR, Outlook Stable ---------------------------------------------------------- Moody's Investors Service assigned Milano Acquisition Corp. the following first-time ratings: B3 corporate family rating; B3-PD probability of default rating; and B2 instrument rating to the proposed first lien senior secured credit facilities, which include a $2,400 million term loan and a $400 million revolving facility. The rating outlook is stable. The initial ratings reflect the credit profile of the new entity that will be formed after the acquisition by Veritas Capital of DXC Technology Corporation's health and human services assets. The proposed transaction is expected to close before the end of calendar year 2020. Proceeds from the proposed new first-lien facilities, along with second-lien debt (unrated) and an equity contribution from the sponsor, will be used to finance the acquisition and provide liquidity. Changes to the proposed instruments and structure could result in a different rating outcome. Assignments: Issuer: Milano Acquisition Corp. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Gtd Senior Secured 1st Revolving Credit Facility, Assigned B2 (LGD3) Gtd Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Outlook Actions: Issuer: Milano Acquisition Corp. Outlook, Assigned Stable RATINGS RATIONALE The B3 CFR reflects Milano's high financial leverage at roughly 7.0x debt/EBITDA, Moody's adjusted as of fiscal year 2020 (pro forma with the new capital structure after the separation from DXC and including certain cost reduction expectations, above 8.0x excluding these adjustments). Moody's anticipates that the new private equity owner will pursue financial policies, a key ESG consideration, that sustain high debt/EBITDA levels. Deleveraging is expected to rely mostly on growth, which will be limited by Milano's mature revenue base. Moody's considers Medicaid Management Information Systems, which generate the majority of Milano's revenue, to be a mature IT services segment. Incremental growth could arise from adjacent opportunities, such as eligibility & enrollment systems, immunization tracking, analytics and other, but Milano will face a more competitive environment in these new revenue segments. A lack of history operating as a standalone entity also weighs on the credit. Milano's outsourcing contracts ultimately rely on the federal government as the main payor, which elevates revenue concentration and Moody's believes could lead to pricing pressure. Lastly, while Moody's does not anticipate systemic changes to the Medicaid model in the near term, regulatory proposals influenced by social pressure to expand healthcare availability, such as a single-payer system, could lead to long-term disruption of Milano's business model. The rating is supported by a dominant position in the MMIS segment. Milano is the primary provider in 30 US states and territories, well ahead of other competitors, and supports 12 additional states with adjacent solutions. Milano's experience and successful track record providing complex outsourced Medicaid services create sticky relationships and a competitive advantage. Long-term outsourcing contracts provide stability, with over 95% of the revenue expected in the next two years already in the backlog. Milano's scale and competitive position yield a healthy EBITDA margin around 30% (Moody's adjusted), which combined with low capex requirements results in strong cash flow generation capacity. Decades-long relationships with Medicaid agencies will facilitate opportunities to expand into fast growing adjacent services, beyond the mature MMIS segment. The rapid and wide spread of the coronavirus outbreak and weak global economic outlook are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The pandemic could create growth opportunities for Milano as increasing unemployment drives Medicaid enrollment and the agencies incorporate coverage for new procedures related to the coronavirus, or seek to develop digital tools to track immunization records or other new functionality. However, Moody's believes that tightening agency budgets and social distancing measures could lead to pricing pressure and delayed implementations. Moody's considers Milano's liquidity to be good, with a cash balance of $150 million and an undrawn $400 million revolving credit facility at closing of the company's separation from DXC. Free cash flow in fiscal year 2021 will be pressured by one-time costs to achieve cost reduction targets and incremental expenses to build standalone corporate capabilities, but Moody's anticipates that it will be positive and will suffice to cover mandatory debt amortization payments. Moody's expects the first lien secured credit facility will be covenant-lite, with a loose springing first-lien net leverage covenant to be set at a 35% cushion from closing levels, only applicable at quarter or year-end when over 35% of the revolving credit facility is drawn. The individual debt instrument ratings are based on Milano's probability of default, as reflected in the B3-PD probability of default rating, and the loss given default expectations of the individual debt instruments. The B2 rating and LGD3 loss given default assessment on the first-lien senior secured facilities, including the $400 million 5-year revolver and 7-year $2,400 million term loan, reflect their senior position in the capital structure and loss absorption support provided by the $800 million 8-year second-lien senior secured facility (unrated). Changes to the proposed instruments and structure could result in a different rating outcome. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects the expectation for mid-single-digit revenue growth over the next 12 months, as California and Washington DC contracts ramp up, with low single-digit growth rates in the longer term. Milano could achieve higher growth rates through new MMIS state wins from incumbent providers, or successful entry into fast growing adjacent HHS markets, such as E&E and analytics. Leverage at close will be very high at roughly 7.0x, Moody's adjusted including partial credit for expected cost saving initiatives and other adjustments, but revenue growth and margin expansion will support deleveraging toward 6.5x over the next 12-24 months. Moody's anticipates weak, but positive, free cash flow over the next 12 months as one-time expenses to achieve cost reduction targets and a high interest expense burden keep FCF/debt in the 2% - 4% range. Cost initiatives will support improving free cash flow metrics thereafter, in the absence of leveraging transactions. The ratings could be upgraded if (all metrics Moody's adjusted) 1) Milano demonstrates stable growth, margins and cash flow generation capacity over time as a standalone company; 2) the company is able to diversify its revenue base beyond core MMIS projects, into new E&E, analytics and other adjacent opportunities, leading to revenue growth above low single-digits and increased scale; 3) debt/EBITDA decreases toward 6.0x and free cash flow to debt approaches 5%; and 4) the company maintains good liquidity and exhibits prudent financial policies. The ratings could be downgraded if (all metrics Moody's adjusted) 1) revenue or profitability as a standalone entity are lower than anticipated, or financial policies become more aggressive, leading to the expectation for debt/EBITDA sustained above 7.5x or free cash flow to debt approaching break-even; 2) long-term contract renewal rates diminish, or the company experiences pricing pressure, indicating increased competition in the core MMIS segment; 3) liquidity deteriorates; or 4) adverse regulatory changes challenge the viability of the current business model. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Milano Acquisition Corp. provides software and managed services to health and human services agencies in the US. The company generates the majority of its revenue from long-term contracts with Medicaid agencies that outsource the operation and management of their Medicaid Management Information System to the company. Milano is the primary MMIS provider to 30 US states and territories. Including core MMIS and adjacent services, Milano serves a total of 42 US states and territories. Pro forma as a standalone entity, Milano generated $1.4 billion in revenue in the fiscal year ended March 2020. MILLER ENERGY: Investors Won Certification on KPMG Audit -------------------------------------------------------- Law360 reports that a Tennessee federal magistrate judge on June 29, 2020 recommended certifying two proposed investor classes accusing accounting giant KPMG of helping the now-defunct Miller Energy Resources Inc. falsify financials about oil and gas assets, finding the shareholders proved they fulfill all federal requirements. U.S. Magistrate Judge Debra C. Poplin said that two classes — one bringing Section 10 claims under the Exchange Act and one bringing Section 11 claims under the Securities Act — should be certified after finding they were large enough, the prospective class representatives were typical of the classes overall, and their choice of counsel was adequate. About Miller Energy Resources Miller Energy Resources, Inc. -- http://www.millerenergyresources.com/-- is an oil and natural gas production company focused on Alaska. The Company has a substantial acreage, reserve, and resource position in the State, significant midstream and rig infrastructure to support production, and 100% working interest in and operatorship of most of its assets. Miller Energy Resources and 10 of its affiliates filed Chapter 11 bankruptcy petitions (Bank. D. Alaska Lead Case No. 15-00236) on Oct. 1, 2015. Carl F. Giesler, Jr., the CEO, signed the petitions. Judge Gary Spraker is assigned to the cases. The Debtors have engaged Andrews Kurth LLP as counsel, David H. Bundy P.C., as local counsel, Seaport Global Securities as financial advisor, and Prime Clerk as claims and noticing agent. On Aug. 6, 2015, Cook Inlet, a wholly-owned by MER, became the subject of an involuntary Chapter 11 case filed by four creditors asserting to have an aggregate claim of $2.8 million. The petitioning creditors were Baker Hughes Oilfield, M-I LLC, Schlumberger Tech. Corp, and Baker Petrolite, LLC. Judge Spraker granted an order for relief under Chapter 11 of the Bankruptcy Code on Oct. 2, 2015. On Oct. 16, 2015, the U.S. Trustee formed an official committee of unsecured creditors. The Committee tapped Snow Spence Green LLP as counsel and Erik LeRoy, P.C, as local counsel. The members of the Committee are: (i) Cruz Construction Inc., (ii) Baker Hughes Oilfield Operations, Inc., (iii) Cudd Pressure Control, Inc., (iv) Exxon Mobil Corporation, (v) Inlet Drilling Alaska, Inc., (vi) National Oilwell Varco LP, and (vii) Schlumberger Technology Corporation. Cook Inlet disclosed $180 million in assets and $212 million in liabilities in its schedules. MW HEALTHCARE: Fitch Alters Outlook on 'BB' on $46MM Bonds to Neg. ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB' rating on approximately $46 million in revenue bonds, series A-1 and A-2, issued by State of Connecticut Health and Educational Facilities Authority on behalf of MW Healthcare, Inc.: The Rating Outlook is revised to Negative from Stable. SECURITY The bonds are secured by a gross revenue pledge of the obligated group, first mortgage and security interest in all assets of the OG and a debt service reserve fund. KEY RATING DRIVERS PANDEMIC RELATED PRESSURES: The Negative Outlook primarily reflects expected pressures related to the coronavirus on MW's operating and financial profiles over the next year. While MW's receipt of approximately $2.5 million in stimulus funding and grants will largely offset revenue losses through the end of fiscal 2020 (ending Sept. 30, 2020), Fitch believes MW's high exposure to skilled nursing revenues, adult day care revenues, and government payors leaves it highly susceptible to prolonged disruptions to census and/or revenues as a result of the pandemic. In fiscal 2019, MW's skilled nursing facility and adult day care revenues comprised 74% and 7%, respectively, of total operating revenues. STRONG LIQUIDITY POSITION: In fiscal 2019, MW had $21.9 million in unrestricted cash and investments, which translates into 546 days cash on hand, 45.4% cash to debt, and 7.5x cushion ratio. All three metrics remain strong for MW's rating level and compare favorably to Fitch's below investment grade medians of 312 DCOH, 33% cash to debt, and 4.3x cushion ratio. MW's strong cash reserves, coupled with its receipt of stimulus funding, help mitigate concerns over short-term disruptions to revenues and census from the coronavirus pandemic and risks associated with its ongoing capital project. CAPITAL PROJECT ON TRACK: Mary Wade is currently underway on its capital expansion project that entails constructing a new 75,000-sf building with 64 new assisted living units and 20 new memory care units, which are both new service lines. The project is expected to cost $30 million and is being funded entirely from bond proceeds. The project is currently on time and on budget. The 'BB' rating incorporates the full size and scope of the project. SOLID HISTORICAL DEMAND: MW's long operating history and favorable local reputation for quality care and services have supported solid demand in recent years. Over the last three fiscal years, MW has averaged a strong 93% in its SNF beds and 98% in its residential care home units. However, disruptions from the pandemic are expected to materially impact MW's census levels as evidenced by its current occupancy of 65% in its SNF beds and 75% in its RCHUs. Fitch believes MW will face ongoing challenges to improve and maintain census near historical levels throughout the pandemic, which is reflected in the Negative Outlook. HIGH SNF EXPOSURE: MW's resident revenues are highly concentrated in its SNF, which accounted for a high 83% of total resident revenues in fiscal 2019. Additionally, in fiscal 2019, the payor mix in MW's SNF was comprised of 52% Medicaid and 25% Medicare, while its RCHUs are almost entirely funded by the State of Connecticut's Old Age Assistance fund. Therefore, MW's high concentration in SNF revenues and governmental payors leaves it susceptible to ongoing changes in the SNF landscape, particularly during the pandemic, as well as governmental payor reimbursement. ELEVATED LONG-TERM LIABILITY PROFILE: MW's debt burden remains elevated as evidenced by maximum annual debt service equating to 19.4% of fiscal 2019 revenues. Additionally, debt-to-net available measured a weak 41.1x in fiscal 2019. However, MW's debt burden is expected to moderate following completion and stabilization of its expansion project, which will significantly improve its revenue base and cash flow levels. ASYMMETRIC RISK CONSIDERATIONS: There are no asymmetric risk factors affecting the rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Improvement and maintenance of census to historical levels across both service lines, coupled with its project remaining on track may result in a revision in the Outlook to Stable; -- Although outside of the current outlook period, successfully execution of its expansion project, coupled with improvement in key financial metrics near Fitch's expectations may result in positive rating action. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Any significant project execution issues such as construction delays, cost overruns, or slow fill-up that negatively impacting MW's operating or financial profile or its ability to adequately cover its debt service payments; -- Prolonged weak census levels or slow recovery of census to historical levels that results in weaker operational performance and/or deterioration in unrestricted cash reserves; -- Should economic conditions decline further than expected from Fitch's expectation or should a second wave of infections occur, Fitch would expect further pressure on MW's revenue base. If there are significant additional pressures on MW's revenue base due to the pandemic, which materially deteriorates its operations, cash flow levels, or unrestricted reserves, there could be rating pressure. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT PROFILE Mary Wade has a long operating history, which dates back to 1866, when it was founded to provide shelter to homeless and needy young women and children. At the beginning of the 20th century, MW's services shifted to focus more on elderly care. Now, MW's operations primarily consist of a 45-bed residential care home, a 94-bed SNF (with 20 beds dedicated to short-term rehab), and an adult day care center. All three services are provided by The Mary Wade Home. MWH, along with MW Healthcare, the parent company of MWH and all affiliated entities, and Mary Wade Residence, the company created to operate its new ALU/MCU facility, comprise the OG. Mary Wade's other affiliated entities are all located outside the OG and consist of MWH Holding, Fair Haven Properties, and Mary Wade at Home. Both MWH Holding and Fair Haven Properties were established to acquire and own properties, while Mary Wade at Home was established to provide companion and personal assistance, but hasn't been operational since 2018. Fitch analysis is based upon consolidated financial statements. In fiscal 2019, the OG comprised 99.4% of consolidated assets and 98.9% of consolidated revenues. Total operating revenues of MW were $15.1 million in fiscal 2019. CAPITAL PROJECT ON TRACK MW is underway on its capital expansion project that entails building a new 75,000-sf building located across the street from its current campus. The building will have 64 new ALUs, 20 MCUs, as well as relate common area and parking space. Project construction began in August 2019 and is expected to be completed by May 2021. The project is currently on time and on budget. Fill-up of MW's new units is expected to begin in December 2020 with anticipated stabilized occupancy (approximately 90%) by May 2021. Fitch believes this fil-up schedule is somewhat conservative and helps mitigate some concerns over fill-up delays due to disruptions from the coronavirus pandemic. The project is expected to cost $30 million and will be funded entirely by the series 2019 bond proceeds. MW has a guaranteed maximum price contract, liquidated damages provisions, and an owner's representative in place to help mitigate construction risk. Overall, Fitch views MW's expansion project favorably as it is expected to be accretive to its financial profile, will diversify its service offerings, and should improve its payor mix with higher exposure to private pay residents. However, although favorable if successfully executed, the project has various associated risks over the short-term including potential disruptions from the coronavirus pandemic. Additionally, there is a somewhat heavy reliance on new revenues from the project to support debt service payments as evidenced by MADS coverage averaging a weak 0.5x over the last three fiscal years. Concerns over these various risks are somewhat offset by MW's strong brand and reputation in its service area, its strong liquidity position and various construction risk mitigation efforts. OPERATING PROFILE MW's long-operating history, strong local reputation, and minimal competition for certain service lines have driven strong historical demand. In fiscal 2019, MW averaged a strong 97% in its RCHUs and 95% in its SNF beds. Additionally, MW maintains a strong waitlist for Medicaid and private pay of approximately 250 people. MW has limited competition for its RCHUs, which are primarily funded via the State of Connecticut OAA program. RCHU services are similar to personal or low acuity assisted living programs. MW has also maintained these strong census levels through the six-month interim period as evidenced by its average 95% occupancy in its RCHUs and 96% occupancy in its SNF beds. However, despite its strong historical demand across both service lines, MW's census levels are expected to be materially impacted due to disruptions from the pandemic. This is evidenced by MW's current census levels of 65% in its SNF and 75% in its RCHUs. Fitch notes that MW management shut down admissions into its RCHUs from March through July, but has begun admitting new residents in mid-to-late July. Overall, Fitch expects MW management will continue to face ongoing challenges caused by the pandemic that will impact its ability to move-in new residents despite its strong demand in both service lines, which is reflected in the Negative Outlook. While Fitch believes MW's strong balance sheet and receipt of stimulus funding offset weaker census levels over the short-term, there could be negative pressure on the rating if softer census levels persist into fiscal 2021 or there are demand/fill-up delays with its new units. FINANCIAL PROFILE MW's strong historical census levels and good expense management practices have translated into solid historical operational performance. In fiscal 2019, MW had a 96.4% operating ratio and 4.8% net operating margin, which both compare favorably to Fitch's BIG medians of 100.7% and 3.8%, respectively. This solid performance was maintained through the six-month interim period as evidenced by its 95.6% operating ratio and 5.4% NOM. However, despite the solid performance through the fiscal 2Q20, MW's operations are expected to be significantly impacted by the coronavirus pandemic. Given a substantial amount of MW's revenues are derived by SNF and adult day care revenues, Fitch anticipates MW's revenue base will be heavily impacted in fiscal 2020. In fiscal 2019, SNF and adult day care revenues accounted for 74% and 7%, respectively, of total operating revenues. Fitch notes MW's adult day care center has been shut down since March and management expects to slowly begin opening the facility in July with limited hours and residents. While revenue pressures exist, MW has received approximately $2.5 million in stimulus funding and grants to offset revenues pressures, including approximately $1.8 million in PPP loan under the Coronavirus Aid, Relief, and Economic Security Act. Fitch expects the stimulus funding to largely offset revenues losses in 2020, which is reflected in the affirmation of the 'BB' rating. LONG-TERM LIABILITY PROFILE The $46 million in series 2019 bonds remains MW's only outstanding long-term debt. The bonds are fixed-rate, have a MADS of approximately $2.9 million, and a final maturity of 2054. MW has no exposure to derivative instruments, a pension liability, or a future service obligation. Overall, MW's debt burden remains elevated as evidenced by MADS equating to a high 19.4% of fiscal 2019 revenues, which is weaker than Fitch's BIG median of 16.7%. Additionally, debt to net available measured a very elevated 41.1x in fiscal 2019, which is significantly weaker than Fitch's BIG median of 10.9x. However, MW's new units from its upcoming capital project are expected to generate a significant amount of new revenue, which will moderate MW's debt burden. Current third-party forecasts show debt to net available moderating to 9.3x in 2023 and MADS equating to 17.3% of fiscal 2023 revenues, which are both more in line with MW's current rating level. 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). NATIONSTAR MORTGAGE: S&P Rates $850MM Senior Notes 'B' ------------------------------------------------------ S&P Global Ratings said it assigned its 'B' senior unsecured debt rating to Nationstar Mortgage Holdings Inc.'s (B/Negative/--; a subsidiary of Mr. Cooper Group Inc.) $850 million of senior notes due 2028. The recovery rating is '4', indicating its expectation of an average recovery (35%) in the event of a default. S&P has also revised the recovery rating on the existing unsecured notes due 2026 and 2027 to '4' from '3'. The company intends to use the net proceeds from this offering, along with cash on hand, to redeem 8.125% of $950 million notes due 2023 at 104.063%. Pro forma, S&P anticipates debt to tangible equity to be around 1.4x, compared with 1.45x the prior quarter. If S&P was to exclude deferred tax assets, which generally can be realized only if the company reports taxable income, the company's debt to tangible equity would be 4.77x. As of June 30, 2020, Mr. Cooper had $1.59 billion of net mortgage servicing rights (MSRs) on its balance sheet, which is net of $1.17 billion of nonrecourse MSR-related liabilities. As of June 2020, Mr. Cooper's servicing unpaid principal balance was $595.5 billion, of which forward MSRs were $278 billion, subservicing was $297 billion, and reverse loans were $21 billion. The negative outlook over the next 12 months reflects S&P's expectation that unfavorable mark-to-market adjustment on MSRs will lead debt to tangible equity to be 1.4x-2.0x. S&P's outlook also considers the company's existing market position as the largest nonbank mortgage servicer. Issue Ratings--Recovery Analysis Key analytical factors -- S&P's simulated default scenario contemplates a default occurring in 2023, in the face of substantial curtailments of business practices owing to regulatory and compliance deficiencies in servicing practices. -- Eventually, the company's liquidity and capital resources become strained to the point where it cannot continue to operate without an equity infusion or bankruptcy filing. -- As a result, the company may find itself having to liquidate its MSRs. S&P believes the causes of a default would be inherent to the company's operating activities. Because of this, S&P believes creditors would value the company's MSRs the most. -- S&P has therefore valued the company through a discrete asset valuation of its MSRs. -- S&P nets the MSRs with the liability and then assess a 25% haircut. Simulated default assumptions -- Low interest rates leading to depressed MSR valuations -- A sustained period of rapid amortization of MSRs with limited ability to refinance the repayments -- Limited new origination activity and limited purchase of MSRs in the secondary market -- An increase in borrower delinquencies and an increase in discount rate to value MSRs Simplified waterfall -- Discrete asset value (after 5% administrative costs): $1.42 billion -- Priority claims: $616 million -- Collateral value available to unsecured creditors: $808 million -- Senior unsecured notes: $ 2.28 billion -- Recovery expectations: 35% Note: All debt amounts include six months of prepetition interest. Ratings List New Rating Nationstar Mortgage Holdings Inc. Senior Unsecured US$850 mil nts due 2028 B Recovery Rating 4(35%) NEW FORTRESS: S&P Assigns 'B+' Long-Term ICR; Outlook Stable ------------------------------------------------------------ S&P Global Ratings assigned its 'B+' long-term issuer credit rating to New Fortress Energy LLC. S&P also assigned its 'B+' issue-level rating and '3' recovery rating to the company's existing senior secured term loan. S&P's assessment of NFE's business risk profile reflects the lack of diversity, small but growing operating scale, and some volumetric and commodity price exposure with mitigations in place. NFE generates its revenues through selling LNG/gas, electricity, and steam to its customers in the power, industrial, and transportation sectors through long-term contracts. The contracts provide predictability to cash flows because they include minimum take-or-pay volume and fixed fees such as demand charge and capacity payment. Although the customers have committed various levels of volumes, NFE's ability to ramp up its volume to run rate will partially depend on its customers' ability to continue to purchase volumes in excess of the minimum take-or-pay volumes. NFE's business risk is partially constrained by its lack of diversity and execution risk on growth projects. S&P generally thinks that greater geographic diversity should provide better protection against risk factors that might affect one country but not another. Over the next 12 months, S&P estimates that almost all of the operating margin will come from LNG/gas, steam, or power sales in Jamaica, Puerto Rico (which is a U.S. territory), Nicaragua, and Mexico. NFE invests and operates in emerging and underdeveloped markets across different continents that typically have inefficient and outdated infrastructure and generate power through oil-based fuel, which is more expensive than LNG/natural gas. Because energy imposes fundamental constraints on economic growth and development, S&P thinks emerging markets should present growth prospects for NFE over the next few years, but the company could face heightened jurisdictional and political risks as it seeks to expand into these markets. "We also believe that NFE's integrated model has not yet been tested enough under various economic conditions. For a business that's evolving, we look for an established record of operational performance and how the company manages volatility in cash flows over time. A change in the business risk profile will also depend on how well NFE continues to execute on its growth plan," S&P said. S&P's assessment of NFE's financial risk profile factors in its growth trajectory with an EBITDA of at least $150 million during the second half of 2020 and over $400 million for the full year of 2021, supported by new projects in Mexico and Nicaragua that the rating agency expects to come online either by the end of 2020 or early 2021. S&P forecasts NFE's weighted average adjusted debt to EBITDA, based on committed projects, to be about 3.6x from 2020 to 2022, with 2021 and 2022 carrying more weight in the rating agency's leverage calculation because EBITDA begins to ramp up in the second half of 2020. S&P's adjusted debt includes NFE's operating lease, which is a standard adjustment in the rating agency's credit metric calculation. NFE has a number of projects in its pipeline that are currently under various stages of development with a few close to reaching the financial investment decision (FID). If the projects that are near FID come into fruition in the near term, S&P's adjusted leverage on NFE could potentially reach below 3x starting in 2022, assuming all other inputs are unchanged. "Our view of NFE's aggressive financial risk profile is factored into a cushion of potential variance to our financial forecast to account for a probable scenario in which volume ramp up is slower than expected and the lack of track record of delivering actual performance in line with guidance given that the company has recently transitioned to an operating company from a developing company," S&P said. "We think that NFE has the potential to maintain leverage between 3x-4x once it establishes a longer operational and financial track record," the rating agency said. The stable outlook reflects S&P's expectation of continued volume ramp up and increased cash flow generation as NFE brings new projects into service supported by long-term contracts with a combination of minimum take-or-pay component and fixed fees. The rating agency projects its adjusted debt to EBITDA in the 3x-4x area in its forecast period. "We could lower the rating if we expected our adjusted debt to EBITDA to reach above 5x. This might stem from lower-than-expected customer volumes, delays in bringing growth projects online, a material increase in variable cost, or an increased level of debt to fund growth projects. We could also lower the rating if the NFE were unable to pass our sovereign stress test on lower-rated countries where the company has material exposure," S&P said. "We could raise the rating if we believed NFE's business risk profile had improved through increasing its scale and diversity, continuing execution of its growth plan, and establishing an operating track record. We could consider raising the rating if our adjusted debt to EBITDA were approaching 3x as the company continued to grow through its existing assets; achieve run rate volumes, and develop new projects. An upgrade would also require NFE to consistently pass our sovereign stress test on countries where the company has material exposure," the rating agency said. NPC INTERNATIONAL: In Chapter 11 After Reaching Plan Deal --------------------------------------------------------- NPC International, Inc., announced that it has entered into a restructuring support agreement ("RSA") with lenders holding approximately 100% of the Company's first lien priority debt and 70% of its first lien debt (collectively, the "Senior Secured Lender Group") to substantially reduce NPC's long-term debt and strengthen the Company's capital structure. NPC and the Senior Secured Lender Group contemplate that the terms of the RSA would become part of a comprehensive Chapter 11 plan to restructure the Company's balance sheet and optimize its portfolio of restaurants throughout the country. Accordingly, NPC and certain of its affiliates and subsidiaries in July filed voluntary petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. NPC intends to use the Chapter 11 process to engage in further discussions with its brand partners, landlords and other creditors to achieve a consensual Chapter 11 plan of reorganization that will best position the Company for long-term success in the current restaurant industry environment. "As our industry has been in the midst of dynamic changes due to shifting consumer preferences and dining behavior, we also have been facing increased labor and commodities costs and a higher level of financial leverage that presents obstacles to achieving our long-term business objectives," said Jon Weber, CEO & President of NPC's Pizza Hut division. "These challenges have been magnified recently by the impact and uncertainty of COVID-19, and we believe it is necessary to take proactive steps to strengthen our capital structure, so we have the financial flexibility to continue to adapt to current industry trends. We also intend to use this process to continue to evaluate and optimize our restaurant portfolio so that we are best positioned to meet the needs of consumers across the country." "We are very pleased with the support we are receiving from our senior lenders, which demonstrates their confidence in NPC and our potential for long-term success once we get the company in a stronger financial position," said Carl Hauch, CEO & President of NPC's Wendy's division. "The Wendy's business remains strong and resilient and is already recovering from the impact of the pandemic to produce year-over-year growth. We look forward to continuing our discussions with our brand partners, landlords and other creditor groups and are confident that we will be able to work collaboratively to agree on a long-term plan that is in the best interests of all stakeholders." Business Continuity NPC has filed several customary "First Day" motions with the Court, which are intended to ensure that the Company is able to maintain operations in the ordinary course and facilitate a smooth transition into Chapter 11. Among these is a motion to continue providing wages, salaries and benefits to all NPC employees without change or interruption, and NPC does not expect there to be any changes to employees’ day-to-day job responsibilities or work schedules. Similarly, NPC intends to pay vendors under customary terms for goods and services provided on or after the Chapter 11 filing date. The Company has sought and expects to receive Court authorization to continue to use its available cash, which it believes will provide sufficient liquidity to meet its ongoing obligations throughout the Chapter 11 process. Restaurant Service Will Continue with COVID-19 Precautions in Place NPC's Pizza Hut and Wendy's restaurants throughout the country remain open for business on regular schedules. NPC is continuing to closely follow the guidance and recommendations from the Centers for Disease Control and Prevention (CDC), as well as from local and federal governments and public agencies, regarding any service restrictions. The Company remains focused on protecting the safety of its team members and guests, while serving and supporting its local communities. Mr. Hauch said, "During the past few months as we have navigated the challenges presented by COVID-19, Jon and I have been incredibly pleased with the resilience of our business and the commitment of our employees throughout the NPC organization. We could not be prouder of the way our teams responded to an unprecedented situation and continued to provide essential dining services to consumers throughout the country. As we go through this process, that focus on providing outstanding and safe service to guests in our Wendy's and Pizza Hut restaurants will not change. Our restaurants remain open on normal schedules, and we are maintaining the highest standards of safety, cleanliness and hygiene." "We would like to thank our outstanding team members for their hard work and dedication," said Mr. Weber. "The quality of our team is one of our company's greatest strengths, and it is a big part of what gives us confidence about the future. We believe that by reducing our debt level and improving our capital structure, we will create a stronger future." The Wall Street Journal reports that NPC International Inc., the owner of more than 1,200 Pizza Hut restaurants and 385 Wendy's Co. stores, missed interest payments on its nearly $800 million in loans on Jan. 31, prompting S&P Global Ratings and Moody's Investors Service to lower their views on the company's debt. NPC was in conversations with its lenders for a possible bankruptcy filing at that time, people familiar with the matter said. About NPC International NPC International, Inc. -- https://www.npcinternational.com/ -- is a franchisee company with over 1,600 franchised restaurants across two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states and the District of Columbia. NPC International and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33353) on July 1, 2020. At the time of the filing, Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy counsel; Alixpartners, LLP as financial advisor; Greenhill & Co., LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims, noticing and solicitation agent and administrative advisor. OAKLAND PHYSICIANS: Can Clawback Transfers Made to Michael Short ---------------------------------------------------------------- District Judge Terrence G. Berg affirms the Bankruptcy Court's order granting summary judgment to Basil Simon, debtor Oakland Physicians Medical Center, L.L.C.'s Trustee, in the case captioned OAKLAND PHYSICIANS MEDICAL CENTER, L.L.C. MICHAEL J. SHORT, Appellant, v. BASIL SIMON, Appellee, No. 2:19-cv-12101 (E.D. Mich.). The Debtor was formed in 2008 to acquire the assets of Pontiac General Hospital. The Debtor's members, who at the time consisted of approximately 45 physicians and McLaren Health Care, invested millions of dollars into the Debtor. In 2010, McLaren disassociated itself from the hospital and demanded repayment of its secured loan. The member-physicians made advances to the Debtor to enable it to pay off the debt owed to McLaren and to later finance the Debtor's revival. Short, a practicing psychiatrist, was a member on the board of directors of the Debtor. The Debtor's operating agreement reflects that Short made a capital contribution to the Debtor in the amount of $250,000 on or about June 1, 2009 in exchange for 50 "Class B" membership units. Short was one of approximately 42 members in the Debtor as of June 1, 2009. Short maintained a private practice at an office outside of the hospital as well as provided inpatient services at the hospital. Despite the member-physician efforts to revive the Debtor, it suffered losses between 2010 and 2015 and required continued cash advances from its members in order to continue its operations. Between Nov. 1, 2011 and July 1, 2015, Short made 20 advances to the Debtor totaling $1,632,333.34. From April 1, 2013 to July 17, 2015, the Debtor transferred $571,939.44 back to Short. The advances were not enough to sustain the Debtor. On July 22, 2015, it filed a voluntary petition under Chapter 11 of the Bankruptcy Code. On August 24, 2016, Short filed a proof of claim in the amount of $952,377.80 for "monies loaned." There were no supporting documents attached to the claim. On Oct. 28, 2016, the Debtor's Trustee objected to the claim. The Trustee brought an avoidance action shortly thereafter. The Trustee's second amended complaint against Short contained seven counts: Count I - Claim for Re-Characterization of any Advances by Defendant; Count II - Preferential Transfers under 11 U.S.C. sections 547(b), 550(a) and 551; Count III — Fraudulent Transfers under 11 U.S.C. sections 548(a)(1)(A), 548(a)(1)(B), 550 and 551; Count IV - Avoidance of Fraudulent Transfers under Michigan's Uniform Fraudulent Transfer Act, M.C.L. sections 566.31 et seq1, and 11 U.S.C. sections 544(b) and 550; Count V - Breach of Statutory Duties to Act in Good Faith and in the Best Interests of the Company; Count VI - Equitable Subordination of Claims; and Count VII - Claim Disallowance under 11 U.S.C. section 502(d). The bankruptcy court entered summary judgment in favor of the Trustee on Count II, finding the Debtor's transfers to Short preferential. The bankruptcy court then held an evidentiary hearing on the limited issue of whether the advances were capital contributions or loans, noting that both parties agreed such a hearing would resolve the remaining claims before the court. In the opinion after the hearing, the bankruptcy court determined that all but two of Short's advances were capital contributions and not loans. After the hearing, the Trustee moved for summary judgment on Counts I, III, IV, VI and VII. The bankruptcy court recharacterized the advances as capital contributions and not loans pursuant to the opinion after the hearing and granted summary judgment in favor of the Trustee on Count I. The bankruptcy court further found that because the Debtor was under no obligation to repay Short for the capital contributions, the Debtor's transfers to Short preceding the bankruptcy petition were fraudulent and could be avoided and recovered by the Trustee. Accordingly, the bankruptcy court also granted summary judgment in favor of the Trustee on Counts III, IV, and VII, but dismissed Counts V and VI. Short's appeal followed. Short raises 19 issues on appeal, which can be boiled down to the following areas of alleged error: the bankruptcy court (1) ignored evidence that the advances were loans; (2) incorrectly applied federal law instead of Michigan law when considering whether the advances were loans; (3) engaged in improper burden shifting; (4) failed to consider Short's affirmative defenses; and (5) considered issues not set forth in the final pretrial order submitted prior to the evidentiary hearing. Short contends that the bankruptcy court abused its discretion by discrediting or ignoring evidence that the advances were loans. On Sept. 25 and 26, 2018, the bankruptcy court held a hearing to hear evidence on this limited issue. At the conclusion of the hearing, the bankruptcy court found the two advances evidenced by signed, executed promissory notes were loans. The remaining advances were found to be capital contributions. Short claims this was error. Judge Berg says Short does not provide any evidence to support his position that the loan summary should have carried more evidentiary weight than it did. Instead, he argues that he should not be punished for the Debtor's failure to produce an accurate loan summary during the hearing. But this argument overlooks the fact that Short himself could have kept copies of the signed notes but failed to do so. Had he kept copies of the signed notes, as he said was his practice, the terms of the advances would have been clear, the notes would have been easily authenticated, and proof of their execution complete. The bankruptcy court properly found that the loan summary was not probable evidence of the terms of the advances, and Short has not demonstrated that was error. Short also argues the bankruptcy court engaged in improper burden shifting with respect to Count III of the Trustee's complaint, avoidance and recovery of fraudulent transfers pursuant to 11 U.S.C. sections 548 for the two-year period preceding the filing of the Debtor's bankruptcy case. Short also argues the bankruptcy court engaged in improper burden shifting with respect to Count III of the Trustee's complaint, avoidance and recovery of fraudulent transfers pursuant to 11 U.S.C. sections 548 for the two-year period preceding the filing of the Debtor's bankruptcy case. The parties agree the Debtor was insolvent at the time the transfers occurred, so the only relevant element on appeal is whether Debtor received "reasonably equivalent value" in exchange for the transfers. The Bankruptcy Code does not define "reasonably equivalent value," but defines "value" for the purpose of determining whether a transfer is fraudulent as "property, or satisfaction or securing of a present or antecedent debt of the debtor[.]" Thus, payment of a pre-existing debt constitutes value. In his adversary proceeding, the Trustee argued the Debtor did not receive reasonably equivalent value for the transfers because the Debtor did not owe Short any debt when it made the transfers to him. Short countered that the Debtor did receive reasonably equivalent value because the Debtor owed him debt from the loans, and the transfers were simply repayment of that debt. The bankruptcy court determined that the advances were not loans, and as a result, the transfers to Short were fraudulent because the Debtor did not receive reasonably equivalent value. On appeal, Short argues this was error because instead of requiring the Trustee to prove each element of his fraudulent transfer claim, the bankruptcy court improperly shifted the burden to Short to show why the transfers were not fraudulent. According to the District Court, Short is incorrect. In satisfying his burden on the fraudulent transfer claim, the Trustee pointed to the lack of evidence supporting Short's claim that the advances were loans, and accordingly, the transfers were not made on account of antecedent debt. Specifically, the Trustee proffered: (1) Short only produced two signed promissory notes; (2) Short did not know if the notes were repaid; (3) Short did not have a way of tracking interest; and (4) neither Short nor the Debtor's two controllers could correlate any of the transfers to any of the advances. A movant may point to a lack of evidence in the non-movant's case to carry its burden on summary judgment. If the non-movant does not provide evidence in response, summary judgment may be granted for the moving party. Short did not sufficiently rebut the evidence relied upon by the Trustee, and the bankruptcy court properly granted summary judgment its favor. Accordingly, the bankruptcy court did not engage in burden shifting. Rather, the bankruptcy judge properly pointed out that the Trustee had established his burden by showing there was no credible evidence in the record that the Debtor received reasonably equivalent value in exchange for the transfers because the transfers were not on account of antecedent debt. Consequently, the bankruptcy court did not engage in burden-shifting. A full-text copy of the Court's Order dated July 22, 2020 is available at https://bit.ly/3fiTn6B from Leagle.com. About Oakland Physicians Oakland Physicians Medical Center, LLC, a physician-owned 47-bed hospital, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No. 15-51011) on July 22, 2015, estimating assets between $1 million and $10 million and liabilities between $10 million and $50 million. The petition was signed by Yatinder M. Singhal, M.D., member/chairman of the Board. OAKLAND PHYSICIANS: May Recoup Payments to Singhal, Court Says -------------------------------------------------------------- District Judge Terrence G. Berg affirms the Bankruptcy Court's order granting summary judgment in favor of Basil Simon, debtor Oakland Physicians Medical Center, L.L.C.'s trustee, in the case captioned OAKLAND PHYSICIANS MEDICAL CENTER, L.L.C. YATINDER M. SINGHAL, Appellant, v. BASIL SIMON, Appellee, No. 2:19-cv-11773 (E.D. Mich.). The Debtor was formed in 2008 to acquire the assets of Pontiac General Hospital. The Debtor's members, who at the time consisted of approximately 45 physicians and McLaren Health Care, invested millions of dollars into the Debtor. In 2010, McLaren disassociated itself from the hospital and demanded repayment of its secured loan. The member-physicians made advances to the Debtor to enable it to pay off the debt owed to McLaren and to later finance the Debtor's revival. Defendant Singhal, a practicing psychiatrist at the Debtor and a member on the board of directors of the Debtor, participated in making those advances. Singhal advanced $2,778,764.17 to the Debtor and the Debtor transferred $735,884.04 to Singhal over a three-year period. The advances were not enough to sustain the Debtor. On July 22, 2015, the Debtor filed a voluntary petition under Chapter 11 of the Bankruptcy Code. The Trustee brought an adversary action against Singhal and filed a motion for summary judgment to avoid and recover the $735,884.04 transferred from the Debtor to Singhal. Singhal denied the claim, asserting that all of the Debtor's payments to him were repayments of loans previously advanced by Singhal to the Debtor. The bankruptcy judge held a hearing on this single issue in the companion case of Simon v. Short, Adv. P. No. 16-5125. The Trustee and Singhal stipulated that the result of that hearing would also govern the characterization of Singhal's loans. After the hearing, the bankruptcy court held that most of the advances were capital contributions, not loans. The bankruptcy judge then granted the Trustee's motion for partial summary judgment against Singhal but held that $228,000 of the $735,884.04 sought was not recoverable because that amount alone represented repayment of a promissory note. Accordingly, the bankruptcy judge entered judgment for the Trustee in the amount of $507,884. Singhal now appeals, arguing that his final four payments in the amount of $600,764.17 satisfy the judgment. He claims he is absolved of liability. Singhal argues that even if the bankruptcy court was correct and Singhal's advances to the Debtor were not loans -- so the transfers to Singhal were fraudulent -- Singhal has already repaid the Debtor for the fraudulent transfers in the years preceding bankruptcy. Specifically, Singhal says the final four advances he made to the Debtor, amounting to $600,764.17, restored the Debtor to the position it would have been in had the transfers to Singhal not occurred. Accordingly, he argues, the Trustee will earn a windfall if he is permitted to recover again post-petition. Singhal claims that the avoidance and recovery of the transfers that the Debtor made to Singhal violate the "single satisfaction rule" under 11 U.S.C. section 550(d), which exists to prevent a trustee from collecting more than once what has already been returned to the Debtor. Judge Berg opines that for Singhal's appeal to have any merit, his final four advances to the Debtor in the amount of $600,764.17 would have to be considered "repayments" for previous transfers. There is nothing in the record to support such a conclusion. The bankruptcy court already held that those final four payments, along with all but one of Singhal's advances to the Debtor, were considered capital contributions. They were not being given to the Debtor to pay the Debtor back for monies the Debtor had paid to Singhal, they were contributions by Singhal to help the hospital continue to operate financially. Therefore, the Trustee was entitled to avoid and recover each of the transfers aside from the Debtor's single loan repayment. The Court also says nothing in the record suggests the Debtor has recovered what had already been returned to the Debtor pre-petition. In addition, Singhal mounts the "single satisfaction" defense for the first time on appeal, so it is waived. A copy of the Court's Order dated July 22, 2020 is available at https://bit.ly/2PeHlk9 from Leagle.com. About Oakland Physicians Oakland Physicians Medical Center, LLC, a physician-owned 47-bed hospital, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No. 15-51011) on July 22, 2015, estimating assets between $1 million and $10 million and liabilities between $10 million and $50 million. The petition was signed by Yatinder M. Singhal, M.D., member/chairman of the Board. OLD TIME POTTERY: Starts Chapter11 Bankruptcy Process, Closes Store ------------------------------------------------------------------- Mealand Ragland-Hudgins,writing for Murfreesboro Daily News Journal, reports that home decor retailer Old Time Pottery announced June 29, 2020 morning that it has started Chapter 11 bankruptcy proceedings in order to restructure its finances. Based in Murfreesboro, the company said the move was due to the COVID-19 pandemic. "Prior to COVID-19, Old Time Pottery was growing profitability at a near-record pace. When COVID-19 hit in March 2020, the company experienced a sudden and precipitous decline in sales that lasted for six weeks with mandates to close numerous store locations in accordance with state and local government regulations," the company said in a news release. The company incurred "significant short-term debts" in order to keep operations afloat during two of its busiest months for sales, the release said. As part of the Chapter 11 effort, Old Time Pottery will close stores in Fayetteville, North Carolina, North Charleston, South Carolina, Rockford, Illinois and Orlando, Florida. No reductions in staffing or other closures are expected at other stores, distribution center or store support center, the release said. Old Time Pottery operates 43 stores in 11 states, according to its website. The company has four locations in Tennessee: Murfreesboro, Madison, Knoxville and Pigeon Forge. Old Time Pottery officials said the company is expected to emerge from the filing with stronger operations as it did following the recession in 2008. A number of other businesses have announced plans to file Chapter 11 in recent weeks, including Tuesday Morning and Chuck E. Cheese. About Old Time Pottery Based in Murfreesboro, Tennessee, MOld Time Pottery Inc. operates a home decor retailer chain business. The company filed for Chapter 11 protection on Aug. 21, 2009 (Bankr. M.D. Ten. Case No. 09-09548). G. Rhea Bucy, Esq., Linda W. Knight, Esq., and Thomas H. Forrester, Esq., Gullett Sanford Robinson & Martin, represent the Debtor in its restructuring efforts. In its petition, the Debtor listed assets between $50 million and $100 million, and debts between $10 million and $50 million. PAPER STORE: Law Firm of Russell Represents Utility Companies ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the Law Firm of Russell R. Johnson III, PLC submitted a verified statement that it is representing the utility companies in the Chapter 11 cases of The Paper Store, LLC, et al. The names and addresses of the Utilities represented by the Firm are: a. Boston Gas Company Colonial Gas Cape Cod Colonial Gas Lowell KeySpan Energy Delivery Long Island Massachusetts Electric Company Narragansett Electric Company Niagara Mohawk Power Corporation Attn: Vicki Piazza, D-1 National Grid 300 Erie Boulevard West Syracuse, NY 13202 b. The Connecticut Light & Power Company Yankee Gas Services Company NStar Electric Company NStar Gas Company Public Service Company of New Hampshire Attn: Honor S. Heath, Esq. Eversource Energy 107 Selden Street Berlin, CT 06037 The nature and the amount of claims of the Utilities, and the times of acquisition thereof are as follows: a. The following Utilities have unsecured claims against the above-referenced Debtors arising from prepetition utility usage: Boston Gas Company, Colonial Gas Cape Cod, Colonial Gas Lowell, Massachusetts Electric Company, Connecticut Light & Power Company, Yankee Gas Services Company, NStar Electric Company, NStar Gas Company and Public Service Company of New Hampshire. b. KeySpan Energy Delivery Long Island, Massachusetts Electric Company, Narragansett Electric Company and Niagara Mohawk Power Corporation held prepetition deposits that secured all prepetition debt. c. For more information regarding the claims and interests of the Utilities in these jointly-administered cases, refer to the Objection of Certain Utility Companies To Motion of Debtors For Entry of Interim and Final Orders (I) Approving Proposed Form of Adequate Assurance of Payment To Utility Providers, (II) Establishing Procedures For Determining Adequate Assurance of Payment For Future Utility Services, (III) Prohibiting Utility Providers From Altering, Refusing, or Discontinuing Utility Service, and (IV) Granting Related Relief filed in the above-captioned, jointly-administered, bankruptcy cases. The Law Firm of Russell R. Johnson III, PLC was retained to represent the foregoing Utilities in July 2020. The circumstances and terms and conditions of employment of the Firm by the Companies is protected by the attorney-client privilege and attorney work product doctrine. The Firm can be reached at: Russell R. Johnson III, Esq. LAW FIRM OF RUSSELL R. JOHNSON III, PLC 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Tel: (804) 749-8861 Fax: (804) 749-8862 Email: russell@russelljohnsonlawfirm.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/WxXJpB About The Paper Store The Paper Store, LLC is a family-owned and family-operated specialty gift retailer, with 86 stores in seven states and an e-commerce business. The retail locations feature merchandise comprising fashion, accessories, spa, home decor, stationery, jewelry, sports and more from well-regarded brands such as Vera Bradley, Lilly Pulitzer, Godiva, 47 Brands, Alex and Ani, Life is Good, Vineyard Vines, and Sugarfina. Visit http://www.thepaperstore.com/for more information. Paper Store and its affiliate TPS Holdings, LLC sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-40743) on July 14, 2020. In the petition signed by CRO Don Van der Wiel, Paper Store was estimated to have assets of $10 million to $50 million and debt of $50 million to $100 million. Judge Christopher J. Panos oversees the cases. Debtors have tapped Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as their legal counsel, G2 Capital Advisors as restructuring advisor, SSG Capital Advisors as investment banker, Verdolno & Lowet, P.C. as accountant, and Donlin, Recano & Co., Inc. as claims and noticing agent. PAPER STORE: McCarter & English Represents Utility Companies ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of McCarter & English, LLP submitted a verified statement that it is representing these utility companies in the Chapter 11 cases of The Paper Store, LLC, et al. The names and addresses of the Utilities represented by the Firm are: a. Boston Gas Company Colonial Gas Cape Cod Colonial Gas Lowell KeySpan Energy Delivery Long Island Massachusetts Electric Company Narragansett Electric Company Niagara Mohawk Power Corporation Attn: Vicki Piazza, D-1 National Grid 300 Erie Boulevard West Syracuse, NY 13202 b. The Connecticut Light & Power Company Yankee Gas Services Company NStar Electric Company NStar Gas Company Public Service Company of New Hampshire Attn: Honor S. Heath, Esq. Eversource Energy 107 Selden Street Berlin, CT 06037 The nature and the amount of claims of the Utilities, and the times of acquisition thereof are as follows: a. The following Utilities have unsecured claims against the above-referenced Debtors arising from prepetition utility usage: Boston Gas Company, Colonial Gas Cape Cod, Colonial Gas Lowell, Massachusetts Electric Company, Connecticut Light & Power Company, Yankee Gas Services Company, NStar Electric Company, NStar Gas Company and Public Service Company of New Hampshire. b. KeySpan Energy Delivery Long Island, Massachusetts Electric Company, Narragansett Electric Company and Niagara Mohawk Power Corporation held prepetition deposits that secured all prepetition debt. c. For more information regarding the claims and interests of the Utilities in these jointly-administered cases, refer to the Objection of Certain Utility Companies To Motion of Debtors For Entry of Interim and Final Orders (I) Approving Proposed Form of Adequate Assurance of Payment To Utility Providers, (II) Establishing Procedures For Determining Adequate Assurance of Payment For Future Utility Services, (III) Prohibiting Utility Providers From Altering, Refusing, or Discontinuing Utility Service, and (IV) Granting Related Relief filed in the above-captioned, jointly-administered, bankruptcy cases. McCarter & English, LLP was retained to represent the foregoing Utilities in July 2020. The circumstances and terms and conditions of employment of the Firm by the Companies is protected by the attorney-client privilege and attorney work product doctrine. The Firm can be reached at: David Himelfarb, Esq. McCarter & English, LLP 265 Franklin Street Boston, MA 02110 Tel: (617) 449-6500 Fax: (617) 607-9200 Email: dhimelfarb@mccarter.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/dUPlwW About The Paper Store The Paper Store, LLC is a family-owned and family-operated specialty gift retailer, with 86 stores in seven states and an e-commerce business. The retail locations feature merchandise comprising fashion, accessories, spa, home decor, stationery, jewelry, sports and more from well-regarded brands such as Vera Bradley, Lilly Pulitzer, Godiva, 47 Brands, Alex and Ani, Life is Good, Vineyard Vines, and Sugarfina. Visit http://www.thepaperstore.comfor more information. Paper Store and its affiliate TPS Holdings, LLC sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-40743) on July 14, 2020. In the petition signed by CRO Don Van der Wiel, Paper Store was estimated to have assets of $10 million to $50 million and debt of $50 million to $100 million. Judge Christopher J. Panos oversees the cases. Debtors have tapped Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as their legal counsel, G2 Capital Advisors as restructuring advisor, SSG Capital Advisors as investment banker, Verdolno & Lowet, P.C. as accountant, and Donlin, Recano & Co., Inc. as claims and noticing agent. PENSKE AUTOMOTIVE: S&P Rates $550MM Senior Subordinated Notes 'B+' ------------------------------------------------------------------ S&P Global Ratings assigned its 'B+' issue-level and '6' recovery ratings to auto retailer Penske Automotive Group Inc.'s proposed $550 million senior subordinated notes due 2025. The '6' recovery rating indicates its expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default. Penske will use the proceeds from these notes to redeem its existing $550 million 5.75% notes due 2022 in a leverage-neutral transaction, which will potentially reduce its interest costs. The proposed senior subordinated notes will rank junior in right of payment to all of Penske's existing and future senior debt and will be structurally subordinated to all debt and other liabilities of subsidiaries that do not guarantee the notes. Due to the severely reduced second-quarter activity in its U.S. and European end markets, Penske executed a comprehensive cost-reduction plan to protect its cash flow. The company's business recovered steadily in May and June, led by its used vehicle and service businesses. The negative outlook reflects the risk that a weaker-than-anticipated recovery in macroeconomic conditions or a second wave of the pandemic will adversely affect the company's business activity. "We could revise our outlook on Penske to stable if its sales and margins recover from the pandemic. We would need to be more certain that the potential recovery after the second quarter of 2020 is robust enough for Penske to reduce debt to EBITDA below 5.0x over the next 12 months, with improved liquidity and a sufficient amount of cushion on its covenants," S&P said. Issue Ratings--Recovery Analysis Key analytical factors Penske's capital structure comprises several floorplan financing facilities, a U.S. senior secured revolver and term loan, and senior subordinated notes. The company also has a U.K. revolver and term loan, international floorplan financing facilities, and operating leases that S&P treats as nondebt claims. S&P's simulated default scenario assumes a payment default in 2025, fueled by sustained U.S. and European economic downturns, which reduce demand for new and used vehicles and lead customers to defer service and repairs. The economic downturns then lead to lower credit availability, which in turn reduces Penske's finance-related commissions; sharp increases in fuel costs, which lead to a pronounced customer preference shift into smaller and more economical vehicles, which have lower margins for dealers; and less attractive inventory financing terms because of rising interest rates and reduced interest credits from auto manufacturers. S&P's key assumptions also include: -- LIBOR increasing to 450 basis points; -- Fully drawn U.S. and U.K. revolvers; -- Borrowing for floorplan inventory financing remains consistent with current levels; and Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $380 million -- EBITDA multiple: 5x Simplified waterfall -- Net enterprise value (after 5% administrative costs): $5.21 billion -- Valuation split (obligors/nonobligors): 55%/45% -- Priority claims: $4.49 billion -- Value available to first-lien debt claims collateral/noncollateral): $593 million -- Secured first-lien debt claims: $608 million -- Recovery expectations: N/A -- Total value available to unsecured claims: $130 million -- Senior unsecured debt/pari passu unsecured claims: $64 million/$15 million -- Recovery expectations: N/A -- Structurally subordinated debt claims: $1.69 billion -- Recovery expectations: 0%-10% (rounded estimate: 0%) Note: All debt amounts include six months of prepetition interest. Collateral value equals assets pledged from obligors after priority claims plus equity pledged from nonobligors after nonobligor debt. PG&E CORP:Provides Update on Equity Exit Financing Over-Allotment ----------------------------------------------------------------- PG&E Corporation on July 25, 2020 announced that the underwriters of its previously announced underwritten public offering of equity units, which closed on July 1, 2020, have exercised in full their over-allotment option to purchase an additional 1,454,545 prepaid forward stock purchase contracts to create 1,454,545 equity units (the "additional equity units issuance"), for total net proceeds to PG&E Corporation (before estimated offering expenses) of approximately $119 million. The underwriters' option to purchase up to an additional 42,337,263 shares of common stock expired without exercise. PG&E Corporation expects to settle the additional equity units issuance on August 3, 2020. In connection with the additional equity units issuance, PG&E expects to effect the following transactions on August 3, 2020: * PG&E expects to redeem approximately $121 million of previously announced prepaid forward stock purchase contracts entered into with certain investors in order to backstop the over-allotment option granted to the underwriters in connection with the public offering of equity units. * PG&E expects to issue approximately $402 million of shares of common stock to such investors in respect of all unredeemed prepaid forward stock purchase contracts at a settlement price per share of $9.50, which is approximately 42.3 million shares. * Pursuant to a true-up mechanism entered into in connection with PG&E's Plan of Reorganization (the "Plan"), PG&E expects to issue an additional 748,415 shares of common stock to the PG&E Fire Victim Trust. Such shares, together with all other shares of common stock previously issued to the PG&E Fire Victim Trust, represent 22.19% of the outstanding common stock of PG&E Corporation as of the effective date of the Plan (assuming all the equity transactions specified in the Plan, including the additional equity units issuance, were consummated on such effective date). Closing of the additional equity units issuance is subject to the satisfaction or waiver of customary closing conditions. About PG&E Corp. PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three laborunions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, as special regulatory counsel. Munger Tolles & Olson LLP, is special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PG&E announced July 1, 2020, that it has emerged from Chapter 11 bankruptcy, successfully completing its restructuring process and implementing PG&E's Plan of Reorganization that was confirmed by the United States Bankruptcy Court on June 20, 2020. POINT BLANK: Equity Group Bid to Enforce 2nd Amended Plan Tossed ---------------------------------------------------------------- Chief Bankruptcy Judge Christopher S. Sontchi denied the Motion to Enforce the Second Amended Joint Chapter 11 Plan of Liquidation Proposed by Debtors SS Body Armor I and affiliates' and the Official Committee of Unsecured Creditors Regarding Class 3 and Class 4 Satisfaction. According to the Court, outstanding claims remain currently unresolved and have the potential to become Allowed Class 3 Claims. Moreover, the holders of Outstanding Claims have not received payment from the Recovery Trust. Therefore, the Court concludes that Class 3 Satisfaction has not occurred. The request was filed by the official committee of equity security holders appointed in the Debtors' cases. On April 14, 2010, SS Body Armor I, et al. (f/k/a Point Blank Solutions, Inc., et al.) filed voluntary chapter 11 petitions under the Bankruptcy Code. On April 26, 2010, the United States Trustee appointed an official committee of unsecured creditors and on July 27, 2010, the Trustee appointed an official committee of equity security holders. On August 10, 2010, D. David Cohen, a former attorney for, senior executive employee of, and shareholder in Point Blank Solutions, Inc., filed a claim on the Court's Claim Register against the Debtors in the amount of $1,886,850. On August 13, 2010, Carter Ledyard & Milburn LLP, personal counsel to Cohen, filed a claim on the Court's Claim Register against the Debtors for legal services provided to Cohen in the amount of $402,716.86. On Jan. 13, 2012, Cohen filed another claim against the Debtors in the amount of $736,285.42 for certain attorneys' fees and expenses he incurred. On June 10, 2015, the Debtors and the UCC proposed their Second Amended Joint Chapter 11 Plan of Liquidation. On Sept. 25, 2015, Cohen and CLM filed an Application for Fees and Expenses, and Memorandum in Opposition to the Payment of Fees and Expenses to Derivative Counsel, seeking an award of fees and expenses in the amount of $1,860,000. On Sept. 29, 2015, the Debtors filed Objections against each of Claim Nos. 402, 434, and 568, and on Oct. 19, 2015, the Debtors filed an Objection to the Fee Claim7 to which the UCC joined. On Nov. 10, 2015, the Court entered the Order Confirming the Second Amended Joint Chapter 11 Plan of Liquidation Proposed by the Debtors and Official Committee of Unsecured Creditors and the Plan became effective on Nov. 23, 2015. On Jan. 17, 2018, Cohen and CLM filed a Motion to Establish Reserve to Pay Fee Award Pursuant to Order dated Dec. 3, 2015, requesting the establishment of a reserve, and, on Feb. 23, 2018, the Court entered an Order Establishing Reserve, which required the Post-Confirmation Debtor to establish a reserve in the amount of $5 million to be held pending the determination of Cohen's and CLM's fee awards. On June 4, 2020, the U.S. Court of Appeals for the Third Circuit issued an Opinion regarding the Fee Claim, which (1) reversed-in-part the Court's order granting Cohen fees on a contingent basis because "Cohen is entitled to attorneys' fees and expenses for his objection to the initial settlement of this case[]" and remanded such part to the Court for determination of the appropriate amount of the fee reward, (2) affirmed-in-part the Court's order regarding denial of Cohen's claims to attorneys' fees and expenses under the Code, (3) affirmed the Court's order awarding fees to counsel in one of the underlying lawsuits, and (4) affirmed the Court's 2015 approval of a settlement in this case. To date, each of Claim Nos. 402, 434, 568, and the Fee Claim remain unpaid and outstanding. A reserve of $5 million is being maintained for potential payment of the Fee Claim and Claim No. 568, pursuant to the Order Establishing Reserve, and the Recovery Trust is reserving such cash as it estimates reasonably necessary to satisfy potentially required distributions on account of Claims Nos. 402 and 434. The Parties agree by their Stipulation of Facts that, to the best of their knowledge, payment in full has been rendered to the holders of all Class 3 Claims and Class 4 Claims under the confirmed Plan, except for the Outstanding Claims. At issue before the Court is whether Class 3 and Class 4 have been satisfied under the confirmed Plan. In accordance with the Plan, after both Class 3 and Class 4 Satisfaction have occurred, (1) Class 6 -- Holders of Old Common Stock Interests -- shall receive pro rata cash distributions, if any, from the Net Distributable Recovery Trust Proceeds, and (2) the two members of the Recovery Trust Committee appointed by the UCC shall resign and be replaced by the Equity Committee's designees. The Equity Group argues that both Class 3 and Class 4 Satisfaction have already occurred because (1) there are no Class 4 Claims and therefore Class 4 Satisfaction has occurred, (2) all Allowed Class 3 Claims have been paid by the Recovery Trust with interest, and (3) the occurrence of Class 3 Satisfaction does not concern itself with the repayment of Class 3 "Disputed Claims," such as the Outstanding Claims, which are independently governed by the Reserves. The Joint Objectors argue that neither Class 3 nor Class 4 Satisfaction have occurred because (1) the Outstanding Claims are, although not currently Allowed Claims, "potential Allowed Claims" which remain unpaid and must be paid before Class 3 and Class 4 Satisfaction can been realized, (2) the Plan requires that holders of Class 3 Trust Interests must receive payment from the Recovery Trust for the occurrence of Class 3 Satisfaction, (3) the occurrence of Class 3 Satisfaction is not tied to the establishment of the Reserves, and (4) it is possible that the Fee Claim gives rise to a Class Claim 4, rather than a Class 3 Claim, and, therefore, Class 4 Satisfaction cannot be deemed to have occurred. The Court explains that under Delaware law, an undefined contract term is ascribed its common or ordinary meaning. Unremarkably, "receiving a payment" is different from a "payment." On its own, a "payment" is "[a] sum of money (or equivalent) paid or payable." Had the occurrence of Class 3 Satisfaction been contingent merely on the action of payment by the Recovery Trust to holders of Class 3 Claims, "receiving" would not have been included to precede "payment." Perhaps if section 4.3(b) provided that Class 3 Satisfaction occurs "upon and in the event of payment to the holders of Class 3 Trust Interests," the Equity Group's reading would be correct. But those are not the facts presently before the Court. Instead, the Plan expressly provides that Class 3 Satisfaction occurs upon and in the event of the holders of Class 3 Claims "receiving payment." To "receive" means "[t]o take into . . . one's possession (something offered or given by another)." "Receiving payment" makes the verb "receive" transitive of the object "payment." Consequentially, the holders of Class 3 Claims must take into their respective possession payments made from the Recovery Trust. The Court further notes that Class 3 Satisfaction under the Plan necessarily requires that holders of Allowed Class 3 Claims receive payment. "That much is obvious. But what about Class 3 Claims that are currently Disputed, such as the Outstanding Claims, and thus not presently Allowed? Fortunately, sections 7.3 and 7.6 offers the Court an answer. Each section discusses what happens when a Disputed Claim "becomes" Allowed." Because Claims not presently Allowed can "become" Allowed, Disputed Class 3 Claims are effectively potential Allowed Class 3 Claims. Further, section 4.3(b) provides that Class 3 Satisfaction does not occur until the holders of Class 3 Claims receive payment from the Recovery Trust up to their Allowed amount. The Court understands this to include both presently Allowed and potential Allowed Class 3 Claims, such as the Outstanding Claims. The Court also holds that establishment of the Reserves does not change the Court's analysis regarding Class 3 and Class 4 Satisfaction. The bankruptcy case is in re: In re SS BODY ARMOR I, INC., et al., Chapter 11, Debtors, Case No. 10-11255 (CSS), (Jointly Administered) (Bankr. D. Del.). A copy of the Court's Memorandum Order dated July 21, 2020 is available at https://bit.ly/3jTKnZa from Leagle.com. About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintained facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on April 14, 2010. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq., David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, served as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP served as corporate counsel. Epiq Bankruptcy Solutions served as claims and notice agent. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. Ian Connor Bifferato, Esq., and Thomas F. Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein, Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq., at Baker & McKenzie LLP, served as counsel for the Official Committee of Equity Security Holders. Robert M. Hirsh, Esq., and George P. Angelich, Esq., at Arent Fox LLP, served as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at the Rosner Law Group LLC, served as co-counsel. In October 2011, the Debtors sold substantially all assets to Point Blank Enterprises, Inc. The lead debtor changed its name to SS Body Armor I, Inc., following the sale. On Nov. 10, 2015, the Bankruptcy Court entered an Order Confirming the Second Amended Joint Chapter 11 Plan of Liquidation Proposed by the Debtors and Official Committee of Unsecured Creditors. The Plan became effective 13 days later. PRESSER CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Presser Construction, Inc. 1330 FM 2203 Dumas, TX 79029 Business Description: Presser Construction, Inc. -- https://presserconstruction.com -- provides oil & gas pipeline construction, dirtwork services, utility construction, hydrovac services, and railroad construction services. Chapter 11 Petition Date: August 6, 2020 Court: United States Bankruptcy Court Southern District of Texas Case No.: 20-33986 Judge: Hon. Eduardo V. Rodriguez Debtor's Counsel: James Q. Pope, Esq. THE POPE LAW FIRM 5151 Katy Freeway 306 Houston, TX 77007 Tel: (713) 449-4481 Email: jamesp@thepopelawfirm.com Total Assets: $304,875 Total Debts: $4,556,974 The petition was signed by Joseph L. Presser, Jr., president/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/d7vutq PROSPECT CAPITAL: S&P Rates New $1BB in Preferred Stock 'BB' ------------------------------------------------------------ S&P Global Ratings said it assigned its 'BB' issue rating to Prospect Capital Corp.'s (PSEC; BBB-/Negative/--) proposed issuance of up to $1 billion in perpetual preferred stock. The company will issue $25 par preferred stock through Series A1, Series M1, or Series M2. The preferred stock is rated two notches below the 'BBB-' issuer credit rating to reflect subordination risk and the risk of partial or untimely payment of dividends on preferred stock. PSEC intends to use the net proceeds to maintain balance-sheet liquidity and repayment of debt under its credit facility, and potentially to make long-term investments. PSEC plans to issue this perpetual preferred stock over the next two years, with an option to extend the issuance window by one year. PSEC has the option to redeem in whole or in part at any time after the five-year anniversary from the issuance date. The holder has the option to convert into common shares at any time subject to a fee. The Series A fee schedule is 9% in year 1, 8% in year 2, 7% in year 3, 6% in year 4, 5% in year 5, and 0% thereafter. The Series M1 and M2 claw back 3 months of dividends if converted within the first 12 months. The preferred stock also has a death put at zero, and the holder or holder's estate must hold the shares for a minimum of six months before exercising the option. The annual death put cap is the greater of $10 million or 5% of the outstanding preferred shares at the end of the most recent calendar year. The preferred stock will pay an annual dividend of 5.5%. As of March 31, 2020, PSEC's leverage, measured as debt to adjusted total equity, was 1.0x. S&P views this issuance favorably because it allows the company to bolster its equity and will be treated as equity in its leverage calculation. On a pro forma basis, S&P expects the leverage to remain below 1.0x. PROVIDENT OKLAHOMA: S&P Cuts 2017 A-B Revenue Bond Rating to 'D' ---------------------------------------------------------------- S&P Global Ratings lowered its long-term rating on Oklahoma Development Finance Authority's tax-exempt series 2017A and taxable series 2017B revenue bonds, issued for Provident Oklahoma Education Resources (POER), La., to 'D' from 'CC'. S&P is taking this rating action as POER did not make its scheduled Aug. 1, 2020, principal and interest payment on the series 2017A and 2017B bonds. The trustee, at the direction of the majority of bondholders, filed a petition for and the court subsequently issued an order to defer debt service payments due on Aug. 1, 2020, and Feb. 1, 2021. Under the court order, nonpayment shall not constitute an event of default as defined in the indenture. However, per S&P's methodology on timeliness of payments, absent a grace period, if a payment is missed on its due date, the rating agency would assign a rating of 'D'. PRYSM INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Prysm, Inc. FKA Spudnik, Inc. 513 Fairview Way Milpitas, CA 95035 Case No.: 20-11924 Business Description: Prysm, Inc. -- https://www.prysm.com -- was formed in 2005 to develop, market and sell large-format displays using its proprietary Laser Phosphor Display or LPD technology. The Debtor introduced its first generation of tile-based LPD displays in 2010 and its second generation of single panel large-format displays in 2018. The Debtor is headquartered in Milpitas California where it conducts product development, testing, service, support, management, and administrative operations. Chapter 11 Petition Date: August 5, 2020 Court: United States Bankruptcy Court District of Delaware Judge: Hon. John T. Dorsey Debtor's Counsel: Charles J. Brown, III, Esq. Michael Busenkell, Esq. Ronald S. Gellert, Esq. Amy D. Brown, Esq. Holly Megan Smith, Esq. GELLERT SCALI BUSENKELL & BROWN, LLC 1201 N. Orange St., Suite 300 Wilmington, Delaware 19801 Tel: (302) 425-5800 Fax: (302) 425-5814 Email: cbrown@gsbblaw.com mbusenkell@gsbblaw.com rgellert@gsbblaw.com abrown@gsbblaw.com hmegansmith@gsbblaw.com Debtor's Claims & Noticing Agent: EPIQ CORPORATE RESTRUCTURING, LLC https://dm.epiq11.com/case/prysm/info Total Assets: $4,636,132 Total Liabilities: $273,635,076 The petition was signed by Amit Jain, president, CEO and chairman of the Board. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/ORPeQo List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. 11711 N. College LLC Rent $494,105 9339 Priority Way West Dr, Suite 120 Indianapolis, IN 46240 Attn: David Ciechanowicz Email: david@chanorep.com 2. Asia Optical Int'l, Ltd. Trade Debt/ $1,909,319 Palm Grove House Critical Vendor P.O. Box 438 Tortola, BVI Attn: Toni Hi Email: tonyjhi@sintai.com 3. AvNet Electronic Marketing Trade Debt $88,584 PO Box 100340 Pasadena, CA 91189-0340 Attn: Robert L. Pollak Email: gpa@glassberg-pollak.com 4. Breakaway Communications Trade Debt $61,563 381 Park Avenue South Suite 1216 New York, NY 10016 Attn: Kelly Fitzgerald Email: kfitz@breakaway.com 5. CMP Advanced Mechanical Trade Debt $106,629 Solutions Ltd. 1241 Cascades Chateauguay, Quebec J6J 4Z2 Canada Attn: Sindo Valverde Email: svalverde@cmp-ams.com 6. Crane Worldwide Trade Debt $62,745 San Francisco P.O. Box 844174 Dallas, TX 75284 Attn: Lisa Mateos Email: Lisa.Mateos@craneww.com 7. Divco West Real Rent $2,832,139 Estate Services, LLC 575 Market Street, 35th Floor San Francisco, CA 94105 Attn: Greg Walker Email: gwalker@divcowest.com 8. El Baba Smart Technology Trade Debt $85,000 Dubai World Central PO Box 712948 Dubai, AE Attn: Ihab Baba Email: ihab.baba@babasmarttech.com 9. ESRT 1350 Boradway LLC Rent $226,431 P.O. Box 28627 New York, NY 10087-8627 Attn: Todd Lawlor Email: tdl@sternbach.com 10. FedEx Trade Debt/ $98,723 PO Box 7221 Key Vendor Pasadena, CA 91109 Attn: Nathan Motzko Email: nathan.motzko@fedex.com 11. Lohika Systems Inc. Trade Debt/ $219,871 1001 Bayhill Drive# 108 Critical Vendor San Bruno, CA 94006 Attn: Daniel Dargham Email: daniel.dargham@lohika.com 12. Min Aik Technology Co. Ltd. Trade Debt $77,539 12F-1, #492-1, Sec.1, Wan Shou RD., Kuei Shan Shiang, Tao Yuan Hsien Taiwan Attn: Ewa Lee Email: ewa.lee@minaik.com.tw 13. Momentum Microsystems, Inc. Trade Debt/ $85,089 2030 Duane Ave. #110 Critical Vendor Santa Clara, CA 95054 Attn: Tamara Saliba Email: tamara@momentummicro.com 14. OCR Trade Debt/ $87,014 PO Box 369 Key Vendor Goldenrod, FL 32733 Attn: Joe Grillo Email: joe@ocr-services.com 15. PQ Labs Trade Debt/ $91,700 3754 Spinnaker Court Critical Vendor Fremont, CA 94538-6537 Attn: Anthony Cruzet Email: anthony@pqlabs.com 16. Prundential Overall Supply Trade Debt $54,878 Cleanroom Service P.O.Box 11210 Santa Ana, CA92711-1210 Attn: Patricia Conetta Email: patconetta@stacollect.com 17. SPIRE HRA Trade Debt $67,083 One O'Hare, LP 1700 Broadway Suite 650 Denver, CO 80290 Email: mcarroll@foxwibel.com 18. Trump Card Corp. Trade Debt $56,634 23807 Aliso Creek Rd. Suite 200 Laguna Niguel, CA 92677 Attn: Marcus Sherwood Email: marcus@baxter-bailey.com 19. Whale Rock LLC Rent $79,485 56 Winthrop St. Concord, MA 01742 Attn: Christopher Hart Email: ch@hartwright.com 20. Wilson Sonsini Legal $157,415 Goodrich & Rosati P.O. Box 742866 Los Angeles, CA 90074 Attn: Scott Ruzas Email: sruzas@wsgr.com QUORUM HEALTH: Emerges from Chapter 11 Bankruptcy ------------------------------------------------- Quorum Health Corporation has successfully completed its financial restructuring and emerged from the Chapter 11 process in U.S. Bankruptcy Court for the District of Delaware. The Company announced the appointment of veteran health care executive Joey Jacobs as Chief Executive Officer as well as a new Board of Managers with extensive healthcare experience. The reorganization provides Quorum Health with a stronger financial foundation, positioning the Company, its affiliated hospitals and management consulting business to continue providing high quality service to its patients and clients. The Company moves forward with a restructured balance sheet, having reduced debt by approximately $500 million. "This company has successfully turned a crucially important corner and I’m excited to join Quorum Health as we begin this new chapter," said Mr. Jacobs. "Completing this process allows our hospitals and subsidiaries to continue providing quality care and developing new ways to deliver much-needed health services to the communities we serve, now and in the future. We appreciate the Court’s diligence and are grateful for the wisdom of our bondholders in recognizing the strength of our operations and taking the difficult but necessary steps to provide a platform for success. I look forward to working with the Board and management team, as well as the dedicated employees and physicians, to shape a bright future." Mr. Jacobs, who will also serve on the Company’s Board of Managers, brings more than 40 years of health care leadership and operations experience. Most recently, he served as Chairman and Chief Executive Officer of Acadia Healthcare, a provider of behavioral health services that, under his leadership, grew from just six locations to a network of 586 facilities with operations in 40 states, the United Kingdom and Puerto Rico. Prior to joining Acadia, Mr. Jacobs co-founded Psychiatric Solutions, Inc. and served as Chairman, President and Chief Executive Officer. Previously, he spent 21 years in various leadership roles with HCA Healthcare. In addition to Mr. Jacobs' appointment, Martin D. Smith is being elevated to President and Chief Operating Officer. Mr. Smith, who joined Quorum Health upon its formation in 2016, previously served as its Executive Vice President and Chief Operations Officer. He will maintain operations and management responsibility for the Company’s 22 hospitals. Alfred Lumsdaine will continue to serve as Executive Vice President and Chief Financial Officer. The Company’s reconstituted Board of Managers will be led by Catherine Klema. Ms. Klema is President of Nettleton Advisors, a financial advisory and strategic consulting company assisting healthcare clients. Previously, she was Managing Director of Healthcare Investment Banking for SG Cowen Securities and Head and Managing Director of Healthcare Investment Banking for Furman Selz, LLC, as well as Senior Vice President for Lehman Brothers. She has served as a director of several health care companies, including Allergan, and currently serves on the Board of Trustees for Montefiore Medicine. "We are extremely pleased to have Mr. Jacobs join the Company at such a pivotal time," said Ms. Klema. "He brings a strong track record of creating value for stakeholders and an entrepreneurial perspective that will be important as the Company moves forward in a new and rapidly changing environment. When paired with Mr. Smith’s unique insights and success driving incremental improvement in the Company’s operations in recent years, we have great confidence in the strength of this management team." In addition to Ms. Klema and Mr. Jacobs, the new Board of Managers will be comprised of the following individuals: Murtaza Ali – Mr. Ali is an Operating Partner at Davidson Kempner Hawthorne Partners LP. Previously, he was a senior operating partner at BlueMountain Capital and a Managing Director at Anchorage Capital, overseeing value creation efforts across a range of industries including real estate, health care and business services. Earlier in his career, Mr. Ali held various leadership roles at the Boston Consulting Group, Target and McKinsey. Michael Rothbart – Mr. Rothbart currently serves as a Senior Research Analyst at GoldenTree Asset Management where he maintains a focus on health care and technology industries. Alice Schroeder – Ms. Schroeder, who has served on Quorum Health’s Board since 2018, is a former analyst and #1 New York Times and Wall Street Journal best-selling author. As CEO and Chair, she led WebTuner Corp., a Seattle-area software developer, through its turnaround and sale in May 2017. Formerly, she was a Managing Director in the equities division of Morgan Stanley, leading the global insurance research team. Andrew E. Schultz – Mr. Schultz is a managing member of Woodbine Consulting, LLC, and a member of Holding Capital Group. He was previously General Counsel of Greenwich Hospital in Greenwich, Connecticut, where he led the hospital’s affiliation with the Yale-New Haven Health System and also served as project executive for a $100 million expansion and new construction program. Dan Slipkovich – Mr. Slipkovich has more than 35 years of experience leading multi-billion-dollar hospital operations in senior leadership roles. Throughout his career, he has had direct operational responsibility for more than 200 hospitals in 29 states ranging from small rural facilities to large, urban academic medical centers. In 2005, he co-founded Capella Healthcare and served as the company’s CEO and Chairman of the Board. About Quorum Health Quorum Health Corporation -- http://www.quorumhealth.com/-- is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 22 affiliated hospitals in rural and mid-sized markets located across 13 states with an aggregate of 1,817 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business. Quorum Health incurred net losses attributable to the company of $200.25 million in 2018, $114.2 million in 2017, and $347.7 million in 2016. As of Sept. 30, 2019, Quorum Health had $1.52 billion in total assets, $1.72 billion in total liabilities, $2.27 million in redeemable non-controlling interest, and a total deficit of $203.36 million. On April 7, 2020, Quorum Health Corporation and 134 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10766) to seek confirmation of a pre-packaged plan. McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz served as the Company’s legal counsel, MTS Health Partners, L.P. served as financial advisor and Alvarez & Marsal North America, LLC acted as restructuring advisor. Kirkland & Ellis LLP served as legal counsel and Jefferies LLC served as financial advisor to the ad hoc noteholder group, which agreed to equitize their note claims into new equity of the Company and invested $200 million of new equity capital in the Company. Milbank LLP served as legal counsel and Houlihan Lokey, Inc. served as financial advisor to the ad hoc group of term lenders. The Company in June 2020 won approval of its reorganization plan. Members of the ad hoc noteholder group will hold substantially all of the reorganized Company's equity. REDFISH COMMONS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Redfish Commons, L.L.C. DBA Redfish Commons 10606 Coursey Boulevard Suite B Baton Rouge, LA 70816-4015 Business Description: Redfish Commons, L.L.C. -- https://www.kimbledevelopment.com -- is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: August 5, 2020 Court: United States Bankruptcy Court Middle District of Louisiana Case No.: 20-10553 Debtor's Counsel: Ryan J. Richmond, Esq. STERNBERG, NACCARI & WHITE, LLC 17732 Highland Road Suite G-228 Baton Rouge, LA 70810 Tel: (225) 412-3667 Email: ryan@snw.law Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 millioni The petition was signed by Michael D. Kimble, manager. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/mCqOsq ROCKPORT DEVELOPMENT: Seeks Approval to Hire Real Estate Agents --------------------------------------------------------------- Rockport Development, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Bill Ruth of Keller Williams Palos Verdes Realty and Charlie Raine of Remax Estate Properties. The real estate agents, who work together as Ruth and Raine, will assist in the sale of Debtor's property located at 8 Middleridge Lane South, Rolling Hills, Calif. They will receive, upon consummation of a sale, a 5 percent commission on the purchase price. Both real estate agents are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. Mr. Ruth holds office at: Bill Ruth Keller Williams Palos Verdes Realty 550 Deep Valley Drive, #383 Rolling Hills Estates, CA 90274 Tel: (310) 621-2885 Email: bill@ruthandraine.com Mr. Raine holds office at: Charlie Raine Remax Estate Properties 450 Silver Spur Road Rolling Hills Estates, CA 90274 Tel: 310.541.5224 Email: craine@remaxpv.com About Rockport Development Rockport Development, Inc., a company based in Irvine, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11339) on May 7, 2020. On June 11, 2020, Rockport's affiliate Tiara Townhomes LLC filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-11683). Judge Scott C. Clarkson oversees the cases, which are jointly administered under Case No. 20-11339. At the time of the filing, Rockport was estimated to have $10 million to $50 million in both assets and liabilities. Tiara Townhomes LLC disclosed assets of between $1 million and $10 million and liabilities of the same range. Debtor has tapped Marshack Hays, LLP as its legal counsel, and Michael VanderLey of Force Ten Partners, LLC as its chief restructuring officer. SEARS HOLDINGS: Closes Rockaway Townsquare Mall, NJ Location ------------------------------------------------------------ Valerie Musson, writing for Daily Voice, reports that Sears will close its Rockaway Town Square Mall, in Rockaway, New Jersey. It is just one of many that will soon close permanently in yet another Coronavirus-related blow to the brick-and-mortar retail landscape. The retail chain had added four closing jobs at the Rockaway store to its online database as of June 29, 2020. Available positions include home appliance sales, cashiers, hardware sales and backroom. Sears has been closing stores across the country since 2018, when the company -- which also owns Kmart -- filed for Chapter 11 bankruptcy protection. About Sears Holdings Corp. Sears Holdings Corporation (OTCMKTS: SHLDQ)--http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. At that time, the Company employed 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. The U.S. Trustee for Region 2 on July 9, 2019, appointed five retirees to serve on the committee representing retirees with life insurance benefits in the Chapter 11 cases. * * * In February 2019, Bankruptcy Judge Robert Drain granted Sears Holdings approval to sell the business to majority shareholder and CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL Investments, Inc., has won an auction to acquire substantially all of Sears' assets, including the "Go Forward Stores" on a going-concern basis. The proposal will allow 425 stores to remain open and provide ongoing employment to 45,000 employees. SENSATA TECHNOLOGIES: S&P Affirms 'BB+' ICR; Outlook Negative ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' issuer credit rating on Sensata Technologies B.V. and its issue-level ratings on the company and are removed all of the ratings from CreditWatch, where S&P placed them with negative implications on March 30, 2020. At the same time, S&P assigned its 'BB+' issue-level rating to the company's proposed $750 million unsecured notes. Despite the deterioration in its cash flow due to the pandemic, Sensata's credit metrics could still remain above S&P's downside trigger (free operating cash flow [FOCF] to debt of at least 10%) for the current rating, though there are some downside risks. S&P expects the company to generate positive cash flow in 2020 through temporary cost and capital expenditure reductions and working capital management. In addition, S&P assumes the company will be less focused on using its excess free cash flow for opportunistic acquisitions and share repurchases through 2021. In recent years, management has focused on integrating its large acquisitions, which led to a significant improvement in Sensata's credit metrics in 2019. Despite the pandemic-related deterioration in its metrics, S&P believes the company will be able to sustain debt to EBITDA in the 3.0x-4.0x range and FOCF to debt or more than 10% in 2021 and 2022, though there is some risk that a slower-than-expected recovery in the global autos and industrials markets could weaken its metrics. The negative outlook reflects the risk (albeit reduced) that S&P will downgrade Sensata over the next 12 months if the fallout from the pandemic has a prolonged negative effect on its demand and operational performance. "We could lower our ratings on Sensata by one notch if it appears that its debt to EBITDA will likely remain above 4.0x or its FOCF to debt will likely fall below 10% and remain at that level over the next two years," S&P said. "We could revise our outlook on Sensata to stable if we see steady macroeconomic recovery prospects in 2021 and the company continues to report market outgrowth and cash flow resiliency. This would support a reduction in its debt to EBITDA to solidly below 4.0x and an improvement in its FOCF to debt to well over 10%," the rating agency said. SERVICE CORP: S&P Rates New $850MM Senior Unsecured Notes 'BB' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '5' recovery rating to Service Corp. International's (SCI) proposed $850 million senior unsecured notes. The '5' recovery rating indicated its expectation for modest (10%-30%; rounded estimate: 15%) recovery in the event of a payment default. The company intends to use the proceeds from these notes to refinance its outstanding $850 million notes due 2024. "Our 'BB+' issuer credit rating and stable outlook on SCI reflect its narrow but leading market position as a provider of funeral and cemetery services. The company has a publicly-stated net leverage target range of 3.5x-4.0x and we expect its S&P-adjusted leverage will remain in the mid-3x to low-4x area over the next couple of years," the rating agency said. SHAE MANAGEMENT: Unsecureds Will Get Nothing in Plan ---------------------------------------------------- Shae Management, Inc, submitted a Plan and a Disclosure Statement. On the Filing Date, the Debtor owned real properties with a total worth of $1,175,000 and personal properties with a total worth of $989,598. Class 1: Secured Claim of First Bank of Dalton is impaired with approximate amount of $2,580,081. The FBD Secured Claim is comprised of the following: (a) Class 1A in the amount of $2,478,411 and (b) Class 1B in the amount of $101,670. The Class 1A claim of FBD arises from and in connection with that certain promissory note executed on March 18, 2013, by Debtor and Marabella, Inc. in the original principal amount of $2,880,000. As of December 3, 2019, the Class 1A claim was $2,478,411. The Debtor intends to sell that certain real property located at 1690 and 1695 Waring Road, Dalton, Georgia. Debtor is currently interviewing brokers to list and sell the 1690 Property and believes that the Real Property will sell in the next 18 months for approximately $1,175,000. The Debtor has identified Ken Gowin of Gowin Machinery Sales, Inc. to market sell its carpet Equipment. The Debtor believes the Equipment will sell in the next 12 months for a combined value of $989,589. The net proceeds of the sale of the Real Property and the Equipment will be applied to the Class 1A Claim. The Class 1B claim of FBD arises from and in connection with the promissory note executed by Debtor on or about Aug. 28, 2014, in the original principal amount of $100,021. As of Oct. 16, 2019, the Class 1B claim was $101,670. The Class 1B Claim will be satisfied from the remaining proceeds of the sale of the Real Property and Equipment as set forth in Class 1A. Class 4: General Unsecured Claims totaling 104,062 are impaired. There will be no distribution to Class 4 Claims and holders of Class 4 Claims will be deemed to have rejected the Plan. As to Class 5: Debtor's Interest, upon completion of the payments to creditors as contemplated by the Plan, the Debtor will be dissolved and the shares of the Debtor will be canceled. The Debtor will pay all claims from the sale of Debtor's real property and equipment. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/ycs459oe from PacerMonitor.com at no charge. Attorneys for the Debtor: Cameron M. McCord Jones & Walden, LLC 699 Piedmont Ave, NE Atlanta, Georgia 30308 Tel: (404) 564-9300 About Shae Management Shae Management, Inc., a property management company in Dalton, Ga., filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-42833) on Dec. 2, 2019. At the time of the filing, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Paul W. Bonapfel oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC, is the Debtor's legal counsel. SIMBECK INC: Has Until Sept. 28 to File Disclosures and Plan ------------------------------------------------------------ Simbeck, Inc., filed a second motion for an extension of the time to file a plan of reorganization. This case was filed on Oct. 1, 2019. The Debtor has continued to work to determine the extent of its debt so that it may be properly addressed in a disclosure statement and plan of reorganization. At this time, the Debtor requests additional time to obtain necessary financial information and to formulate a feasible plan of reorganization. The Debtor's counsel believes that the disclosure statement and plan of reorganization can be completely prepared no later than September 28, 2020. Counsel for the Debtor: Hannah W. Hutman, Esquire (VSB#79635) HOOVER PENROD PLC 342 South Main Street Harrisonburg, Virginia 22801 Tel: (540) 433-2444 Fax: (540) 433-3916 E-mail: hhutman@hooverpenrod.com About Simbeck Inc. Simbeck, Inc., is a transportation company with experience in long-haul, regional and short-haul truckload freight. With a fleet of more than 70 trucks, Simbeck is located along Interstate 81 in Northern Virginia providing the company access to all major shipping corridors along the east coast, and from Virginia to Texas. Simbeck filed a Chapter 11 petition (Bankr. W.D. Va. Case No. 19-50868) on Oct. 1, 2019, in Harrisonburg, Va. In the petition signed by Michael Darnell, Jr., resident, the Debtor was estimated to have assets of no more than $50,000 and liabilities at $1 million to $10 million. Judge Rebecca B. Connelly oversees the case. The Debtor tapped Hoover Penrod, PLC, as its legal counsel and Haines, Greene & Yowell Tax Service as its accountant. SOAPTREE HOLDINGS: Unsecureds to Get Payment of 2% of Claims ------------------------------------------------------------ Soaptree Holdings LLC, submitted an Amended Disclosure Statement describing its proposed Chapter 11 Plan. Pursuant to Section 1123(a)(1) of the Bankruptcy Code, Allowed Administrative Claims and Allowed Priority Tax Claims are not designated as Classes. The holders of such unclassified Claims shall be paid in full under the Plan consistent with the requirements of section 1129(a)(9)(A) of the Bankruptcy Code and thus are not entitled to vote on the Plan. As of the filing date of this Disclosure Statement, Debtor believes it owes $7,725 in Priority Tax Claims, and the known and unpaid Administrative Claims are the Allowed Administrative Claim of Juiceboy, LLC for the reimbursement of postpetition improvements and maintenance expenses on the Morning Dew Property, pursuant to the approved Settlement Agreement, in the amount of $15,000, Professionals Fees of Debtor's general reorganization counsel, the law firm of Andersen Law Firm, Ltd., in the approximate amount of $35,000, and U.S. Trustee's Fees, which are current. At present, the Debtor anticipates that the total remaining unpaid Administrative Claims as of the Confirmation Hearing will total no more than $52,068. Class 1: Buckhaven Secured Claim is impaired. The creditor will received monthly principal and interest payments in the amount of $1,922, which is an amount based upon the amount stipulated value of the Buckhaven Property being $304,061.31, amortized over a term of 30 years, at a fixed rate of 6.5% per annum; Class 1 shall also receive a post-petition escrow arrears payment in the amount of $2,357 within 60 days of Plan confirmation; Class 1 will further receive a monthly escrow payment in the amount of $247.96; the first monthly payment of principal, interest, and monthly escrow amounts shall commence on August 1, 2019. Class 2: Bishop Secured Claim is impaired. Creditor will received monthly principal and interest payments in the amount of $3,129, which is an amount based upon the amount stipulated value of the Bishop Property being $495,000, amortized over a term of 30 years, at a fixed rate of 6.5% per annum; Class 2 will also receive a postpetition escrow arrears payment in the amount of $4,104 within 60 days of Plan confirmation; Class 2 will further receive a monthly escrow payment in the amount of $473.23; the first monthly payment of principal, interest, and monthly escrow amounts shall commence on August 1, 2019. Class 5: Morning Dew Secured Claim is impaired. Class 5 shall receive a single payment in the amount of $245,000 within 90 days of the Effective Date of the Plan, unless Debtor requests an extension 15 days before the 90-day deadline, the Debtor will have an additional 30 days to provide the funds to Class 5. Class 6: Ennis Secured Claim is impaired. Class 6 shall receive a single payment in the amount of $56,300 within 30 days of the Effective Date of the Plan, in full and final satisfaction of such Allowed Secured Claim. Class 8: General Unsecured Claims are impaired. Class 8 will receive payment of 2% of each Allowed Claim in cash as soon as reasonably practicable after the later of (i) the Effective Date of the Plan, (ii) the date such Class 8 Claim becomes Allowed, or (iii) such other date as may be ordered by the Bankruptcy Court. On and after the Effective Date, the Reorganized Debtor's parent company and managing member, 365 Real Estate Investments, LLC, will provide substantial new value to Reorganized Debtor by infusing Reorganized Debtor with the necessary funds to make payments on administrative claims and to creditors, restore the Property to habitable conditions, and renovate to maximize income, which Debtor projects will cost at least $500,000. A full-text copy of the Amended Disclosure Statement dated June 24, 2020, is available at https://tinyurl.com/ycervdn8 from PacerMonitor.com at no charge. Counsel for the Debtor: Ryan A. Andersen, Esq. Ani Biesiada, Esq. ANDERSEN LAW FIRM, LTD. 3199 E Warm Springs Rd, Suite 400 Las Vegas, Nevada 89120 Phone: 702-522-1992 Fax: 702-825-2824 E-mail: ryan@vegaslawfirm.legal E-mail: ani@vegaslawfirm.legal About Soaptree Holdings Soaptree Holdings LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 18-16378) on Oct. 24, 2018. In the petition signed by its manager, Shawn Samol, the Debtor was estimated to have less than $1 million in assets and less than $50,000 in liabilities. Judge August B. Landis oversees the case. The Debtor tapped Andersen Law Firm, Ltd., as its legal counsel; and RPD Analytics, LLC as its appraiser and valuation expert. SPIRIT AEROSYSTEMS: S&P Lowers ICR to 'B' on Amended Covenants -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on the aerostructures supplier Spirit AeroSystems Inc. to 'B' from 'B+'. The outlook is stable. S&P also lowered the rating on the firm's $1.2 billion second-lien notes to 'B' from 'B+' and revised the recovery rating to '3' from '4', indicating expectations of meaningful recovery (50%-70%; rounded estimate: 65%) in a payment default. The better recovery is due to less first-lien debt following the recent amendment to the company's unrated credit facility. At the same time, S&P lowered its rating on the company's first-lien debt to 'BB-' from 'BB'. The '1' recovery rating is unchanged. S&P' also lowered its rating on the firm's unsecured debt to 'CCC+' from 'B-', with no changes to the '6' recovery rating. Earnings and cash flow will likely be worse than S&P's previous forecast due to its updated estimates of production rates for MAX shipsets in 2021. S&P now expects free cash flow to be a use of $800 million-$850 million in 2020 and $200 million-$250 million in 2021. This compares to the rating agency's previous forecast of a use of $700 million-$750 million and a use of $100 million-$150 million, respectively. S&P also now believes funds from operations (FFO) to debt, which will be negative in 2020, will now only recover to 4%-8% in 2021, down from its previous expectations of 10%-12%. The recent amendments to the credit facility are neutral to liquidity, as the covenant relief will likely allow for full availability on the smaller revolver through the end of 2021. Spirit AeroSystems recently amended its first-lien credit facility to waive the maximum first-lien leverage and minimum interest coverage covenants in the fourth quarter of 2020 and the first quarter of 2021, as the company was likely to be in violation of these covenants because of the effect of the coronavirus on aircraft demand and the ongoing grounding of the Boeing 737 MAX. The amendment also loosens the interest coverage covenant after the waiver period through the third quarter of 2022, as well as the total leverage covenant once it comes back into force in 2022. It also reduces the minimum liquidity requirement to $750 million from $1 billion. However, as part of the amendment, the total revolver commitments decline to $500 million from $800 million and the company had to pay down $100 million of the term loans. Environmental, social, and governance (ESG) factors relevant to the rating action: -- Health and safety The stable outlook reflects that earnings and cash flow should remain weak in 2021, but improve somewhat as MAX production increases, production rates on other aircraft models stabilize at lower levels, and the company adjusts its cost structure for the reduced volume. S&P expects FFO to debt of 4%-8% in 2021, although there is significant uncertainty in this forecast. "We could lower the rating in the next 12 months if we don't believe FFO to debt will increase to at least breakeven in 2021 or cash use is likely to be materially greater than we currently forecast. This could be caused by further reduction in MAX production, lower rates on other Boeing or Airbus programs, or the company being unable to improve its cost structure to match the lower demand. We could also lower the rating if liquidity becomes constrained or if we expect the company to violate the covenants in its credit facility and not be able to get a waiver from its lenders," S&P said. "Although unlikely, we could raise the rating if we believe FFO to debt will approach 12% in 2021 and free cash flow is materially better than we currently forecast. This could occur if production does not decline as much as we expect and Spirit adjusts its cost structure to match the lower demand," the rating agency said. SPRINGFIELD HOSPITAL: Taps Ankura to Conduct Asset Valuation ------------------------------------------------------------ Springfield Hospital, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Vermont to employ Ankura Consulting Group, LLC to conduct a market valuation of its business and assets. The firm's services will be provided mainly by Jerry Chang, a senior managing director at Ankura, who charges $845 per hour. The hourly rates for other professionals range from $390 to $800 per hour. Paraprofessionals charge between $150 and $315 per hour. Debtor will provide a general security retainer in the amount of $5,000. The estimated costs for the firm's services are as follows: Business Enterprise Valuation Analysis $12,500 to $15,000 Real Property Appraisal $12,500 to $15,000 Personal Property Appraisal $ 7,500 to $10,000 Ankura Consulting is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Jerry M. Chang Ankura Consulting Group, LLC 1180 West Peachtree Street NW, Suite 550 Atlanta, GA 30309 Main: +1.404.589.4200 Direct: +1.404.602.3462 Mobile: +1.404.512.5422 Email: jerry.chang@ankura.com About Springfield Hospital Springfield Hospital, Inc. is a not-for-profit, critical access hospital located in Springfield, Vermont. As part of Springfield Medical Care Systems' integrated system of care, including a network of ten federally qualified community health center sites, Springfield Hospital serves communities in southeastern Vermont and southwestern New Hampshire. Springfield Hospital, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Vermont Case No. 19-10283) on June 26, 2019. At the time of the filing, Debtor had estimated $10 million to $50 million in assets and liabilities. Hon. Colleen A. Brown oversees the case. Murray, Plumb & Murray is Debtor's legal counsel. STL HOLDING: S&P Assigns 'B' Issuer Credit Rating; Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Louisiana-based STL Holding Co. LLC (DSLD), reflecting its small scale and geographic concentration partially offset by relatively modest leverage. At the same time, S&P assigned its 'B' issue-level rating to the company's proposed $225 million senior unsecured notes. The recovery rating is '3', indicating S&P's expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of payment default. "The outlook is stable, reflecting our expectation for debt to EBITDA of about 3.6x over the next year, when comparatively firm new home sales demand in its Southeast U.S. markets contends with the effects of the COVID-19 pandemic," S&P said. DSLD is seeking to repay outstanding debt. The company intends to use the proceeds from this offering to repay about $195 million outstanding under its revolving credit facility and pay associated fees and expenses. Any remaining proceeds would be used for general corporate purposes. Concurrently, the company expects to enter into a new $75 million revolving credit facility with no outstanding balance at closing. S&P's rating on DSLD reflects its small scale relative to most other rated homebuilders and significant geographic concentration. With the Southeast accounting for all of the company's sales, DSLD is among the smaller rated homebuilders by both revenue ($721 million in 2019) and closings (3,077 in 2019). About 70% of its closings occur within its home state of Louisiana, 50% coming in east Louisiana alone. "Even though we anticipate continued growth will further penetrate smaller markets in its current and adjacent states--reducing its heavy Louisiana concentration--our forecast for debt to EBITDA remaining at or below 3x suggests a relatively conservative, organic expansion," S&P said. DSLD operates in just five Southeastern states and 12 markets; combined it has 112 active communities. DSLD's homes cater predominately to first-time (60% of closings in 2019) and move-up buyers (40%). Although management has proven adept at expanding its operations, future success may be harder won, as it intends for a portion of its growth to occur outside of its current markets even as the housing cycle matures. The company's land-light business model helps reduce land-based risk. Option-based contracts account for about two-thirds of all land. DSLD's relatively low gross and EBITDA margins (below 17%) reflect the cost for the relatively high resulting land optionality. At the same time, DSLD's comparatively high return on capital (almost 17%) underscores the fast inventory turns due to its low overall inventory carrying values. S&P's characterization of DSLD's overall financial risk reflects its leverage ratio. Still, debt to EBITDA at or below 3x in S&P's forecast leaves ample cushion before breaching its downgrade threshold (5x). Yet even though most other ratios fall into a range S&P believes appropriate for its assessment of the company's financial risk--if not better--certain cash flow measures (cash flow from operations to debt, discretionary cash flow to debt) underperform this assessment, which the rating agency thinks reflects management's ongoing growth priority. "Historical EBITDA trends suggest relatively low volatility in its largely post-pandemic past. We believe past volatility may not be indicative of future fluctuations in EBITDA though. Although we anticipate moderating growth in EBITDA, we think a maturing housing cycle, planned new market growth, and potentially less favorable interest rates could challenge our base-case forecasts for mostly steady EBITDA increases," S&P said. DSLD's growth has been steady via mostly in-market expansion, without undue profit volatility throughout its relatively brief operating history. S&P thinks ongoing EBITDA growth will reflect more modest volume and price gains inherent to small, existing, and adjacent Southeastern markets. With overall debt expected to remain slightly above $200 million, S&P anticipates leverage will reach 3.6x through this year before edging toward 3x in 2021. "We think the company will maintain stronger credit metrics than is typically associated with the rating. Thus, we would lower our rating over the next 12 months if we expected debt to EBITDA to exceed 5x, which would require about a 300 basis points (bps) decline in EBITDA margin from our forecasts," S&P said. "We believe an upgrade is highly unlikely over the next 12 months. Still, we would upgrade DSLD if we thought debt to EBITDA would be maintained below 2x, which would require about a 400 bps margin improvement. We consider this unlikely as we believe management is more intent on sustaining growth than boosting margins or reducing debt in the current environment and at this relatively early stage of its life cycle," the rating agency said. STORMBREAK RANCH: USA Objects to Disclosure Statement ----------------------------------------------------- United States of America, on behalf of the Internal Revenue Service, and files this objection to Stormbreak Ranch-FW, LP's disclosure statement. United States of America points out that the Debtor has not filed employment tax returns (Form 941) for the 2nd and 3rd quarters of 2016, the 1st quarter of 2017, the 4th quarter of 2018, and the 1st quarter of 2020. The United States of America further points out that the Debtor has not filed Form 940 for 2016, 2017, 2018 and 2019. The United States of America asserts that the Debtor has not filed partnership returns for 2016, 2017, and 2018. About Stormbreak Ranch-FW Stormbreak Ranch-FW, LP, manages and operates land and personal property located at 4168 County Road 444, Waelder, Texas 78959 (collectively, the "Property"). The land is a 70.74-acre ranch located in Caldwell and Gonzales Counties, Texas. The personal property consists of farm and ranching equipment. The Property is substantially all of Stormbreak Ranch's assets. Stormbreak Ranch is managed by its Executive Manager, Daniel J. Parish. Stormbreak Ranch-FW, LP, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-10040) on Jan. 7, 2020. In the petition signed by Daniel J. Parish, manager, the Debtor disclosed $4,475,905 in assets and $4,508,267 in liabilities. Judge Christopher oversees the case. Ryan Lott, Esq., at The Lott Firm, is the Debtor's bankruptcy counsel. STURDIVANT TAYLOR: Asks for 60-Day Extension of Plan Deadline ------------------------------------------------------------- Sturdivant Taylor, LLC, filed a motion to modify the deadlines contained in the order entered on April 21, 2020, in the above styled and numbered case. On the 7th day of October, 2019, a petition for relief was filed by Sturdivant under Chapter 11 of Title 11, United States Code, which case was assigned number 19-03561-NPO. On Feb. 6, 2020, the U.S. Trustee filed a motion requesting the Court set a deadline for the debtors to file a disclosure statement and a plan of reorganization. On April 3, 2020, a motion was filed requesting the Court extend the deadline for the debtors to file a disclosure statement and a plan of reorganization. Prior to the initial motions being filed by the U. S. Trustee, the debtors filed an application on Nov. 18, 2019, to employ Ward Wicht and Sunbelt, LLC, as brokers to market and offer for sale the daycare operated by Building Blocks and the real property owned by Sturdivant. The broker has been advertising this property and, to date, has two parties attempting to secure financing to purchase the property owned by these debtors. Both parties have submitted initial offers and the parties are continuing to negotiate. It is in the best interest of all parties for the debtors to continue attempting to sell the assets owned by these two debtors as a going concern which will yield the highest and best return for creditors. Accordingly, the debtors request the Court enter an order extending the deadline to file a disclosure statement and plan of reorganization for 60 days from July 2, 2020, or until August 31, 2020, to allow the debtors to continue marketing these properties. Attorneys for the Debtors: R. MICHAEL BOLEN HOOD & BOLEN, PLLC ATTORNEYS AT LAW 3770 HWY. 80 WEST JACKSON, MISSISSIPPI 39209 Tel: (601)923-0788 E-mail: rmb@hoodbolen.com About Sturdivant Taylor Sturdivant Taylor, LLC, owns and leases real property located at 243 Yandell Road, Canton, Miss., with a building located thereon leased to Building Blocks of Madison Crossing Daycare and Learning Center, Inc. where it operates a daycare. Sturdivant Taylor and Building Blocks sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Lead Case No.19-03561) on Oct. 7, 2019. At the time of the filing, Sturdivant Taylor disclosed assets of less than $50,000 and liabilities of less than $1 million. The cases have been assigned to Judge Neil P. Olack. Hood & Bolen, PLLC, is the Debtors' legal counsel. SUPERIOR AIR: JetSuiteX to Get Ownership in Committee-Backed Plan ----------------------------------------------------------------- Alex Wolf, writing for Bloomberg Law, reports that Superior Air Charter LLC joined with its unsecured creditors to propose a bankruptcy reorganization plan that would create a creditor trust and hand the charter flight company's assets over to its parent and lender, JetSuiteX Inc. The Chapter 11 plan stems from a settlement among Superior Air, a committee of unsecured creditors and JetSuiteX that will allow the company to emerge from bankruptcy as a going concern, according to filings submitted June 26 at the U.S. Bankruptcy Court for the District of Delaware. About JetSuite Inc. JetSuite is a private jet charter company founded in 2006 by Alex Wilcox, Keith Rabin, and Brian Coulter. It is one of the biggest operators of private air services in the United States. It operates chartered services with a fleet of Phenom 100 and Citation CJ3 aircraft and offer subscription-based air travel services to passengers to western United States, Canada, and Mexico. About Superior Air Charter Superior Air Charter, LLC -- https://www.jetsuite.com/ -- operates charter air carrier JetSuite. With its current headquarters in Dallas, Texas, JetSuite was founded in 2006 by Alex Wilcox, Keith Rabin, and Brian Coulter. It is one of the biggest operators of private air services in the United States. It operates chartered services with a fleet of Phenom 100 and Citation CJ3 aircraft and offer subscription-based air travel services to passengers to western United States, Canada, and Mexico. Superior Air Charter sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11007) on April 28, 2020. The Debtor was estimated to have $1 million to $10 million in assets and $50 million to $100 million in liabilities. The Debtor tapped Bayard, P.A., as counsel; and Stretto as claims agent. TAILORED BRANDS: Porter, Gibson Dunn Update on Term Lender Group ---------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Gibson, Dunn & Crutcher LLP and Gibson, Dunn & Crutcher LLP submitted an amended verified statement to disclose an updated list of Ad Hoc Group of Term Loan Lenders that they are representing in the Chapter 11 cases of Tailored Brands, Inc., et al. In April 2020, certain members of the Ad Hoc Group of Term Loan Lenders retained Gibson, Dunn & Crutcher LLP to represent them as counsel in connection with a potential restructuring of the outstanding debt obligations of the above- captioned debtors and certain of their subsidiaries and affiliates. Subsequently, on or about July 31, 2020, Gibson Dunn contacted Porter Hedges LLP to serve as Texas co-counsel to the Ad Hoc Group of Term Loan Lenders. Gibson Dunn and Porter Hedges represent the members of the Ad Hoc Group of Term Loan Lenders in their capacities as lenders under that certain Term Credit Agreement, dated as of June 18, 2020, by and among the Men's Wearhouse, Inc., as borrower, Tailored Brands, Inc., as holdings, certain of the other Debtors, as guarantors, Wilmington Savings Fund Society, FSB, as successor administrative agent and collateral agent, and the several lenders from time to time parties thereto. Gibson Dunn and Porter Hedges do not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Gibson Dunn and Porter Hedges do not represent the Ad Hoc Group of Term Loan Lenders as a "committee" and do not undertake to represent the interests of, and are not fiduciaries for, any creditor, party in interest, or other entity that has not signed a retention agreement with Gibson Dunn or Porter Hedges. In addition, the Ad Hoc Group of Term Loan Lenders does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Each member of the Ad Hoc Group of Term Loan Lenders does not represent the interests of, nor act as a fiduciary for, any person or entity other than itself in connection with the Debtors' chapter 11 cases. Upon information and belief formed after due inquiry, Gibson Dunn and Porter Hedges do not hold any disclosable economic interests in relation to the Debtors. As of Aug. 4, 2020, members of the Ad Hoc Group of Term Loan Lenders and their disclosable economic interests are: CIFC Asset Management, LLC 875 3rd Ave New York NY 10022 * Term Loan Indebtedness: $11,929,419.73 CIFC VS Management LLC 875 3rd Ave New York NY 10022 * Term Loan Indebtedness: $8,938,786.47 CIFC CLO Management LLC 875 3rd Ave New York NY 10022 * Term Loan Indebtedness: $35,373,902.36 CVC Credit Partners, LLC 5th Ave, 42nd Floor New York, NY 10019 * Term Loan Indebtedness: $41,099,838.07 Intermediate Capital Group 600 Lexington Ave. New York, NY 10022 * Term Loan Indebtedness: $51,698,844.68 * Unsecured Notes Indebtedness: $898,000.00 PGIM, Inc. 655 Broad Street, 7th Floor Newark, NJ 07012 * Term Loan Indebtedness: $66,926,089.85 Silver Point Capital, LP c/o Silver Point Capital Credit Admin Two Greenwich Plaza, First Floor Greenwich, CT 06830 * Term Loan Indebtedness: $92,368,983.56 Voya Investment Management Co. LLC 7337 E. Doubletree Ranch Road Scottsdale, AZ 85258 * Term Loan Indebtedness: $33,612,735.36 Voya Alternative Asset Management LLC 7337 E. Doubletree Ranch Road Scottsdale, AZ 85258 * Term Loan Indebtedness: $33,914,616.10 Voya Investment Trust Co. 7337 E. Doubletree Ranch Road Scottsdale, AZ 85258 * Term Loan Indebtedness: $9,940,578.09 Aegon USA Investment Management, LLC 27 West Monroe Street, Suite 6000 Chicago, IL 60606 * Term Loan Indebtedness: $17, 557,367 ALCOF II NUBT, L.P. c/o Arbour Lane Fund II GP, LLC 700 Canal Street, 4th Floor Stamford CT, 06902 * Term Loan Indebtedness: $52,772,192.25 Canaras Capital Management, LLC 130 West 42nd Street, Suite 1500 New York, NY 10036 * Term Loan Indebtedness: $8,064,939.78 Carlson Capital, L.P. 2100 McKinney Ave, Suite 1800 Dallas, TX 75201 * Term Loan Indebtedness: $20,037,478.44 Cowen Special Investments LLC 599 Lexington, 21st Floor New York, NY 10022 * Term Loan Indebtedness: $1,874,296.23 First Eagle Alternative Credit, LLC 227 W. Monroe, Suite 3200 Chicago, IL, 60606 * Term Loan Indebtedness: $19,509,635.40 The Guardian Life Insurance Company of America 10 Hudson Yards, 20th Floor New York, NY 10001 * Term Loan Indebtedness: $24,651,642 H.I.G. 200 Crescent Court, Suite 1414 Dallas, TX 75201 * Term Loan Indebtedness: $5,878,646.58 Bowery Funding ULC c/o The Bank of Nova Scotia 40 King Street West, 68th Floor Scotia Plaza Toronto, ON Canada M5H 1H1 * Term Loan Indebtedness: $989,843.48 Marathon Asset Management One Bryant Park, 38th Floor New York, New York 10036 * Term Loan Indebtedness: $13,893,149.32 Marble Point Credit Management LLC 600 Steamboat Road, 2nd Floor Greenwich, CT 06830 * Term Loan Indebtedness: $26,396,230.53 Medalist Partners, LP 12 East 49th Street, 38th Floor New York, NY 10017 * Term Loan Indebtedness: $4,695,427.51 MJX Asset Management LLC 12 E 49th Street, 38th Floor New York, NY 10017 * Term Loan Indebtedness: $34,526,518.51 MS 522 CLO CM LLC 522 Fifth Avenue New York, NY 10036 * Term Loan Indebtedness: $8,291,351.70 Teachers Advisors LLC 8500 Andrew Carnegie Boulevard Charlotte, NC 28262 * Term Loan Indebtedness: $24,210,237.41 Five Arrows Managers North America LLC 633 West 5th Street, Suite 6700 Los Angeles, CA 90 * Term Loan Indebtedness: $6,349,594.00 Scoggin International Fund Ltd 660 Madison Avenue, 20th Floor New York, NY 10065 * Term Loan Indebtedness: $15,900,000.00 Scoggin Worldwide Fund Ltd 660 Madison Avenue, 20th Floor New York, NY 10065 * Term Loan Indebtedness: $2,600,000.00 WhiteStar Asset Management, LLC Crescent Court, Suite 1175 Dallas, TX 75201 * Term Loan Indebtedness: $5,792,323.01 Trinitas Capital Management, LLC Crescent Court, Suite 1175 Dallas, TX 75201 * Term Loan Indebtedness: $14,180,980.79 Wells Fargo Bank, N.A. 45 Fremont St, Floor 29 San Francisco, CA 94105 * Term Loan Indebtedness: $5,360,238.89 ZAIS Group, LLC 101 Crawfords Corner Road, Suite 1206 Holmdel, NJ 07733 * Term Loan Indebtedness: $21,550,126.89 Investcorp Credit Management US LLC 280 Park Avenue, 36th Floor New York, NY 10017 * Term Loan Indebtedness: $3,915,844.53 Canyon Capital Advisors LLC 2000 Avenue of the Stars, 11th Floor Los Angeles, CA 90067 * Term Loan Indebtedness: $2,923,766.67 Canyon CLO Advisors LLC 2000 Avenue of the Stars, 11th Floor Los Angeles, CA 90067 * Term Loan Indebtedness: $1,949,177.78 Counsel for the Ad Hoc Group of Term Loan Lenders can be reached at: PORTER HEDGES LLP John F. Higgins, Esq. Aaron J. Power, Esq. 1000 Main Street, 36th Floor Houston, TX 77002-2764 Telephone: (713) 226-6000 Facsimile: (713) 226-6248 Email: jhiggins@porterhedges.com apower@porterhedges.com - and - GIBSON, DUNN & CRUTCHER LLC Scott J. Greenberg, Esq. Matt J. Williams, Esq. Keith R. Martorana, Esq. Jeremy D. Evans, Esq. 200 Park Ave. New York, NY 10166 Tel: (212) 351-4000 Fax: (212) 351-4035 Email: sgreenberg@gibsondunn.com mjwilliams@gibsondunn.com kmartorana@gibsondunn.com jevans@gibsondunn.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/nrL2jO About Tailored Brands Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty retailer of menswear, including suits, formalwear and a broad selection of polished and business casual offerings. The Comptany 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. TAILORED BRANDS: S&P Cuts Debt Rating to 'D' on Chapter 11 Filing ----------------------------------------------------------------- S&P Global Ratings lowered its issue-level rating on Fremont, Calif.-based specialty apparel retailer Tailored Brands Inc.'s senior secured debt to 'D' from 'CC'. Tailored Brands has commenced a voluntary prearranged Chapter 11 bankruptcy. The company anticipates restructuring its balance sheet debt and entered into a restructuring support agreement with the majority of its creditors. S&P is lowering the issue-level rating on the company's secured debt facility to 'D' from 'CC'. S&P had previously lowered the issuer credit and issue-level ratings on the unsecured debt to 'D' on July 2, following a missed interest payment on the company's unsecured notes. "We believe the company's prospects have significantly deteriorated because of the impact of COVID-19 on stores and changing shopping behavior, particularly for men's business apparel, which we expect will have lingering long-term effects. We expect to withdraw all our ratings on the company after 30 days," S&P said. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety Tailored Brands is a specialty retailer of men's formalwear in the U.S. and Canada. The company offers a wide variety of formalwear, business casual apparel, and accessories for men. As of Feb. 1, 2020, it operated 1,450 stores under the Men's Wearhouse, Men's Wearhouse and Tux, Jos. A. Bank, Moores, and K&G brands. TRIVASCULAR SALES: Seeks to Hire Jefferies LLC as Investment Banker ------------------------------------------------------------------- TriVascular Sales, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Jefferies LLC as their investment banker. Jefferies will provide the following services: (a) assist Debtors in connection with analyzing, structuring, negotiating and effecting (including providing valuation analyses as appropriate) a restructuring; (b) become familiar with, to the extent Jefferies deems appropriate, and analyze the business, operations, assets, financial condition, and prospects of the Debtors; (c) advise the Debtors on the current state of the "restructuring market"; (d) assist and advise the Debtors in developing a general strategy for accomplishing a restructuring; (e) assist and advise the Debtors in implementing a restructuring; (f) assist and advise the Debtors in evaluating and analyzing a restructuring, including the value of the securities or debt instruments, if any, that may be issued in any such restructuring; and (g) render such other financial advisory services as may from time to time be agreed upon by the Debtors. Jefferies' compensation are: (a) Monthly Fee. A monthly fee equal to $125,000 payable in advance on the fifteenth day of each month. An amount equal to 100 percent of all Monthly Fees actually paid to and retained by Jefferies after four full Monthly Fees have been paid under the Engagement Letter will be credited (without duplication) once against any restructuring Fee or M&A Transaction Fee due to Jefferies. Additionally, 100 percent of all Monthly Fees actually paid to Jefferies shall be credited against any Financing Fee due and payable to Jefferies. (b) Restructuring Fee. A fee in an amount equal to 1.5% of aggregate liabilities restructured, subject to a minimum fee of $3,000,000, due and payable upon consummation of a restructuring, including, without limitation, upon the effective date of a confirmed plan of reorganization pursuant to chapter 11 of the Bankruptcy Code, whether or not through the use of cramdown procedures. (c) M&A Transaction Fee. Promptly upon closing of an M&A Transaction, a fee equal to 1.5 percent of the Transaction Value, subject to a minimum fee of $3,000,000 (subject to any crediting of the Monthly Fees). (d) Debt Financing Fee. Promptly upon the closing of each Financing involving Debt Securities, a fee (Debt Financing Fee) equal to 4.0 percent of (i) the aggregate principal amount of such Debt Securities if the Debt Securities are issued below par or (ii) the gross proceeds from the Transaction if the Debt Securities are issued at or above par. (e) Equity Financing Fee. Promptly upon the closing of each Financing involving Equity Securities, a fee (Equity Financing Fee) in an amount equal to 5.0 percent of the aggregate gross proceeds received or to be received from the sale of Equity Securities, including, without limitation, aggregate amounts committed by investors to purchase Equity Securities. (f) Bank Debt Fee. Upon execution by the Debtors of a definitive credit agreement with respect to any Bank Debt, a fee (Bank Debt Fee and, together with any Debt Financing Fee or Equity Financing Fee, the Financing Fee) equal to 2.5 percent of the maximum principal amount available under the Bank Debt. (g) Expenses. In addition to any fees that may be paid to Jefferies under the Engagement Letter, the Debtors shall reimburse Jefferies for out-of-pocket expenses incurred in connection with its engagement by the Debtors (including reasonable and documented fees and expenses of counsel, and the reasonable and documented fees and expenses of any other independent experts retained by Jefferies). Jefferies will maintain records in support of any actual and necessary costs and expenses incurred in connection with the rendering of its services in these cases. Jefferies is a "disinterested person" within the meaning of Bankruptcy Code section 101(14), according to court filings. The firm can be reached through: Richard W. Morgner, Jr. Jefferies LLC 520 Madison Avenue New York, NY 10022 Phone: 1-212-284-2300 About TriVascular Sales TriVascular Sales, LLC and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-31840) on July 5, 2020. At the time of the filing, TriVascular Sales had estimated assets of less than $50,000 and liabilities of between $100 million to $500 million. Judge Stacey G. Jernigan oversees the cases. The Debtors tapped DLA Piper LLP (US) as their legal counsel, and FTI Consulting, Inc., as their financial advisor. Omni Agent Solutions is the claims, noticing and administrative agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' bankruptcy cases. TUTOR PERINI: Fitch Rates New Secured Term Loan B 'BB+' ------------------------------------------------------- Fitch Ratings has affirmed Tutor Perini Corp.'s Issuer Default Rating at 'B+'. Fitch has also assigned a rating of 'BB+'/'RR1' to the company's proposed senior secured term loan B. Proceeds will be used to repay senior unsecured convertible notes due 2020, pay down outstanding revolver borrowings and bolster TUT's cash balance. Fitch also affirmed the company's senior first-lien revolver at 'BB+'/'RR1' and downgraded the senior unsecured notes to 'B+'/'RR4' from 'BB-'/'RR3. The Rating Outlook has been revised to Stable from Negative. The Outlook revision to Stable reflects the company's strong 2Q20 performance with minimal operational disruption, runway to maintain elevated margins by executing on outstanding backlog and the elimination of near-term refinancing risk with the paydown of the convertible notes. Fitch believes the IDR of 'B+' is supported by the company's strong backlog, a high degree of revenue and cash flow visibility on many of the company's projects and long-term secular tailwinds bolstered by an expected increase to infrastructure spending. Fitch also believes most of TUT's key contracts are considered essential, and the company will be able to continue executing on backlog throughout 2020. Customer and contract diversification also support the rating. A number of risks offset these strengths as TUT navigates through the coronavirus pandemic. These risks include potential labor shortages, project delays, fewer new awards across the industry, and a lower volume of short-cycle and/or non-essential work that could affect both revenue and cost. Other factors that could pressure the rating include cash flow seasonality, cyclicality and key person risk. The downgrade of the senior unsecured notes to 'B+'/'RR4' from 'BB-'/'RR3' was largely driven by the introduction of additional first-lien debt ahead of the notes in the recovery waterfall, described later in this release. Fitch modestly increased its estimate of TUT's going concern EBITDA to $175 million from a previous estimate of $162 million due to a stronger assessment of the stability of the company's contracts and its market position. KEY RATING DRIVERS Infrastructure Projects Considered Essential: Many of TUT's projects are considered essential work across many of the geographies in which it operates and are generally not subject to shelter-in-place orders. These rules are usually determined on a state-by-state basis and vary depending on the type of project. Fitch generally views this as favorable for the continuity of TUT's operations. Fitch views labor disruption as one of the greatest risks to TUT's credit profile while managing through the coronavirus pandemic. If there is a labor shortage or employees are unable to perform work, higher costs associated with project delays could materially hurt the company's profitability and cash flow. As of July 2020, Fitch does not believe significant disruptions or reductions to the company's workforce have occurred, nor do Fitch projects any meaningful disruption in its forecasts. Fitch previously considered a material disruption in 2020, but now view these risks as less likely following a solid performance in 2Q20. Profitability Vulnerable: Fitch considers the company's EBITDA and FCF to be vulnerable to cyclical downturns and project delays. Fitch no longer expects significant volatility over the next 12-24 months following the company's strong execution during 2Q20. However, Fitch believes significant risk remains as the company manages through the coronavirus pandemic. Specifically, progress on completions could be delayed in the case of labor disruptions. Fitch believes some of the expected margin fluctuations could be offset by TUT's improved contract mix, which should continue as the company executes on outstanding backlog. Fitch projects TUT's EBITDA margin will remain around or above 6% over the next few years, relatively consistent with its operational peers. FCF could be more volatile than profitability, depending on management's ability to navigate working capital fluctuations against cash collections and potentially slower project completions. Fitch views the company's overall project risk profile as reasonable for the rating level and within expectations for the sector. Strong Backlog, Challenging Bidding Environment: Fitch considers the company's strong backlog to be one of the leading positive drivers for the company. Backlog was approximately $10.0 billion as of June 2020, slightly below the record $11.2 billion at YE 2019, but up from around $9.3 billion as of YE 2018. Fitch expects there may be fewer new projects up for bid in 2H20, but the elevated backlog should support the company in the next few years. There is also a concern that government budgets could be constrained beyond 2020 due to recent significant spending to curtail the economic decline from the coronavirus pandemic. Conversely, a limited number of competitors willing to take on large contracts should mitigate these concerns in the intermediate term, as TUT separated itself through a reputation for consistent execution over the years. Competition could increase again over time if projects remain scarce, though any progress toward a federal infrastructure spending bill or further expansion of state-by-state infrastructure spending could revive the bidding environment and present significant industry tailwinds. Adequate and Improving Leverage: Fitch projects the company's leverage (gross debt to EBITDA) will improve to the low-3x range during 2020 despite the coronavirus pandemic. The nominal debt balance has increased. However, expected outperformance on the top-line, coupled with margins around or above 6%, mitigated its impact. Fitch views the company's willingness to maintain significant long-term debt balance as a credit negative in the highly cyclical engineering and construction sector, although the new term loan will offer some flexibility in allowing the company to delever over time compared with the convertible notes that will be paid off. Key Person Risk: The CEO and Chairman of the Board, Ronald Tutor, has a long tenure with the company, and his experience and knowledge would not easily be replaced by one single person. However, several experienced executives are in place who would be able to manage the company when an eventual transition occurs. The E&C landscape is one in which experienced leadership heavily affect a firm's ability to win new awards. In addition, contract disputes are not unusual, and those relationships are often the underpinning of settlements and change-order compromises. These negotiations help firms avoid costly arbitration or litigation, and are often critical to a firm's ability to remain profitable. Fitch assesses this as a concern in the inevitable absence of Mr. Tutor due to the potential reputational impact. However, Fitch expects the company to continue addressing this concern over the intermediate term. Adequate Liquidity, Flexibility: Fitch considers the company's liquidity to be adequate to cover working capital fluctuations, capex and debt servicing during a moderate temporary downturn. Fitch also believes the company's financial flexibility improved since its previous review after refinancing its convertible notes and extending its revolver maturity. The new term loan also offers some flexibility within the capital structure to repay debt more quickly than if the company issued notes. Fitch calculated the company's total pro forma available liquidity at greater than $300 million following the proposed transaction, comprising approximately $90 million of readily available cash as of June 2020, more than $80 million of cash proceeds from the term loan, plus pro forma revolver availability. The company also had approximately $9 million of restricted cash and $92 million of cash related to variable interest entities as of the end of June, which Fitch considers restricted. Seasonality Could Strain Liquidity in Downturn: TUT's liquidity could become strained during a downturn given the inherent seasonal capital intensity and cyclicality of the sector. Collections in the first half of the year are typically weaker than the latter half and often lead to the company drawing on its revolver early in the year before paying it down during the second half. Fitch believes liquidity could also become strained as a result of one or more major project delays or cancellations. Working Capital Management: The company stated an intention to increase liquidity in part by working capital management. Fitch views the company's working capital management as adequate, as the firm produced moderately positive aggregate FCF over the previous four years. The company's working capital flows feature moderate volatility but less than some of its peers, largely driven by its proven ability to estimate and manage project costs, which allows client advances to satisfy most funding needs. Scale and Market Position: TUT's rating is supported by the firm's scale and domestic market position. The company maintains operations across the U.S., in addition to a diverse set of customers across a wide range of end markets. This geographic and end-market diversity, coupled with its extensive longstanding customer relationships, allow its segments to be highly competitive on projects of all sizes while maintaining limited exposure to a single region, industry or customer. The company's markets and capabilities include bridges, tunnels, highways, commercial and industrial buildings, mass-transit systems, condominiums, hospitality and gaming, aviation, education, sports facilities and healthcare. Diversified Projects and Customers: The company features a balanced split between private and public customers, with approximately 62% of its 2019 revenue generated from federal, state and local government agencies, and the remaining 38% originating from private project owners. The company's December 2019 backlog of approximately $11.2 billion comprises 54% higher margin civil projects, 25% building projects and 21% specialty contractor projects. Individual customer concentration is limited, particularly following the significant backlog growth since 2016. DERIVATION SUMMARY TUT's 'B+' rating is primarily derived from the company's product and end-market diversification compared with peers, strong reputation and meaningful growth prospects. Fitch considers the company's profitability to be adequate compared with other companies within the E&C industry, as the company returned positive FCF on average for the past three years. Fitch considers the main constraints on the rating to be the financial structure, limited liquidity and vulnerable profitability. Fitch believes the company's limited liquidity, when coupled with balance sheet debt, could exacerbate risks to the company's credit profile and operations due to the inherent seasonality and cyclicality across the sector. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer Include -- The majority of the company's projects are considered essential business with limited interruption; -- A revision from its previous revenue expectation reflects a continuation of modest growth in 1H20; -- Low single-digit growth in 2021 and 2022, helped by outstanding backlog; -- Some weakness in new commercial construction in 2023; -- EBITDA margins remain above 6% over the rating horizon due to the improved contract mix; -- Revolver borrowings are termed out and convertible notes are repaid; -- Annual capex between $55 million and $80 million through 2023; -- The company effectively manages liquidity and working capital; -- No material acquisitions, dividends or share repurchases. Recovery Rating Assumptions -- The recovery analysis assumes TUT would be reorganized as a GC in bankruptcy rather than liquidated; -- A 10% administrative claim; GC Approach -- Fitch assumes a distressed scenario in which the company loses several major customers/projects in conjunction with a large negative legal claim. -- The GC EBITDA estimate of $175 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the enterprise valuation. Fitch modestly increased its GC from $162 million at the time of its previous review due to Fitch's improved perception of the stability of the company's contracts and strong market position. -- The GC EBITDA reflects the company's limited profitability and uneven cash flows, but also its strong backlog and long-term secular tailwinds. -- An enterprise value multiple of 5.0x is applied to the GC EBITDA to calculate a post-reorganization EV. In determining the multiple, Fitch considered the company's high exposure to cyclicality, as well as its diversification and strong reputation. Fitch also considered the low trading multiple in the sector (TUT currently trades at less than 8.0x EV/EBITDA) compared with other E&C and industrial companies. -- Fitch notes that in this scenario, when comparing with a liquidation approach, Fitch utilized a 25% accounts receivable recovery rate for the liquidation value analysis due to the assumption that much of the company's current project receivables would not be available to pre-petition creditors as a result of project disputes/litigation. It is customary within the industry for major disputes with project owners to drag on for years, even post-bankruptcy, and in any case would likely be settled for a significant discount. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An increase in available liquidity to above $750 million, including at least $500 million in cash and equivalents, excluding cash held in joint ventures (JVs), for a prolonged period; -- Decreased debt/EBITDA to below 2.5x for a sustained period; -- FCF margin above 3% for a prolonged period; -- A material improvement in EBITDA margins to above 8% for a sustained period. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- State governments materially shift infrastructure spending plans to the extent that it affects TUT's backlog and revenue generation; -- State or federal governments enact more strict restrictions regarding whether to classify construction as an essential business to the extent it affects TUT's operations; -- A deterioration in adjusted debt/EBITDA to above 4.5x for a prolonged period; -- A material decline in EBITDA margins to below 3%; -- Failure to maintain at least $200 million in seasonally adjusted available liquidity (excluding cash held in JVs) for a prolonged period; -- Consistently negative FCF; -- Any indication of meaningful impending project losses, or legal or contingent liabilities that could lead to a severe liquidity strain or reputational damage to the company; -- Debt-funded share repurchases or dividends. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity, Flexibility: Fitch considers the company's liquidity to be adequate to cover working capital fluctuations, capex and debt servicing during a moderate temporary downturn. Fitch also believes the company's financial flexibility improved from its previous review after refinancing its convertible notes and extending its revolver maturity. The new term loan also offers some flexibility within the capital structure to repay debt more quickly than if the company issued notes. Fitch calculated the company's total pro forma available liquidity at greater than $300 million following the proposed transaction, comprising approximately $90 million of readily available cash as of June 2020, more than $80 million of cash proceeds from the term loan, plus pro forma revolver availability. The company also had approximately $9 million of restricted cash and $92 million of cash related to variable interest entities as of the end of June, which Fitch considers restricted. 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). TUTOR PERINI: Moody's Alters Outlook on B2 CFR to Stable -------------------------------------------------------- Moody's Investors Service changed Tutor Perini Corporation's outlook to stable from negative and affirmed its B2 corporate family rating, B2-PD probability of default rating, and its B3 senior unsecured notes rating. At the same time, Moody's assigned a Ba3 rating to the company's proposed first lien credit facilities including a $375 million term loan B and a $175 million revolving credit facility. The term loan proceeds will be used to pay off borrowings on its existing credit facility and to redeem its $200 million senior unsecured convertible notes. Tutor Perini's Speculative Grade Liquidity Rating was changed to SGL-3 from SGL-4 to reflect the extension of its debt maturities and the additional liquidity provided by the proposed refinancing. "The change in Tutor Perini's outlook reflects the extension of its debt maturities and the strengthening of its liquidity position from the proposed refinancing. It also incorporates its recently improved operating performance and cash flows." said Michael Corelli, Moody's Senior Vice President and lead analyst for Tutor Perini Corporation. Upgrades: Issuer: Tutor Perini Corporation Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Assignments: Issuer: Tutor Perini Corporation Senior Secured 1st Lien Term Loan, Assigned Ba3 (LGD2) Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba3 (LGD2) Outlook Actions: Issuer: Tutor Perini Corporation Outlook, Changed to Stable from Negative Affirmations: Issuer: Tutor Perini Corporation Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5 from LGD4) RATINGS RATIONALE Tutor Perini's B2 corporate family rating is supported by its moderate leverage, ample interest coverage, good market position, meaningful scale and diversity across a number of US nonresidential building and civil infrastructure construction markets and its strong project backlog. However, its rating is constrained by its relatively thin margins, historically low funds from operations as a percentage of its outstanding debt, inconsistent free cash flow generation, high level of unbilled receivables, significant exposure to fixed-price construction contracts and the risk of weaker future construction activity due to the impact of the COVID-19 outbreak. The company is also exposed to contingent risks associated with periodic contract disputes and the possibility of write-downs as it pursues past due payments. Tutor Perini's operating performance and cash flows have materially strengthened during the first half of 2020. The improved performance has been driven by increased activities on large infrastructure projects with higher margins and better billing terms, as well as progress on the resolution and collection of disputed balances. This was tempered by the impact of COVID-19 which led to temporary project suspensions and reduced productivity. The improved performance could represent a change in trend versus the company's recent history of somewhat volatile operating results and weak cash flows due to working capital investments resulting from slow paying customers and client driven billing and payment delays on out of scope work. Tutor Perini's free cash flow has materially strengthened over the LTM period ended June 2020 and it will benefit from enhanced cash flows related to the CARES Act in the second half of the year. However, its funds from operations are still less than 10% of its outstanding debt and the company's future cash flows and the outcome of negotiations and litigation remains uncertain. This was demonstrated by recent adverse outcomes on the Alaskan Way Viaduct Replacement Project (SR 99) that resulted in a $167 million charge in 4Q19 and an unfavorable arbitration ruling pertaining to an electrical project in New York that led to a $13 million charge in 1Q20. Also, while the recent operating performance has been strong and the backlog remains elevated, it has weakened recently and there is the risk that the COVID-19 outbreak could lead to materially lower nonresidential construction activity and lower government revenues and reduced infrastructure investments. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook 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. If the recent cash flow trends persist and business activity remains healthy then the company's ratings could experience upside pressure since its leverage and interest coverage are currently strong for the rating. Its adjusted leverage ratio (Debt/EBITDA) has declined to about 4.0x and its interest coverage (EBITA/Interest) has risen to around 2.5x over the LTM period ended June 2020. Tutor Perini's SGL-3 liquidity rating reflects its adequate near-term liquidity and the risks inherent in the engineering & construction sector and the potential adverse effects of economic weakness caused by the coronavirus. The company had an unrestricted cash balance of $183 million as of June 2020, but this included about $125 million of its portion of joint venture cash balances that are only available for joint venture-related uses. The company also had $250 million of availability under its $350 million committed bank credit facility, which had $100 million of borrowings outstanding. Therefore, the company's total liquidity (excluding JV cash) was about $308 million. Its near-term liquidity will decline modestly from the proposed refinancing and its revolver capacity will be reduced by $175 million due to covenant limitations on secured borrowings in its senior notes indenture. The stable ratings outlook reflects its expectation for improved operating results and cash flows in 2020, but also incorporates the risk it is not sustained considering the company's inconsistent historical performance and the economic impact of the coronavirus outbreak. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating pressure could develop if the company completes the proposed refinancing of its convertible notes and extends it debt maturities, materially strengthens its liquidity position, substantially reduces its unbilled receivables, sustains funds from operations at more than 15% of its outstanding debt and consistently generates free cash flow. Tutor Perini could face a downgrade if it doesn't refinance its convertible notes and extend its debt maturities or its consolidated EBITA margin declines below 4.0%, it sustains funds from operations below 12% of outstanding debt or a leverage ratio above 5.5x. Downward rating pressure could also develop if its liquidity materially weakens. Tutor Perini Corporation is headquartered in Sylmar, California and provides general contracting, construction management and design-build services to public and private customers primarily in the United States. Tutor Perini's revenues for the trailing twelve months ended June 30, 2020 was $4.9 billion and its backlog was $10.0 billion. The company reports its results in three segments: Civil (41% of LTM revenues; 55% of backlog as of June 30, 2020) is engaged in public works construction including the repair, replacement and reconstruction of highways, bridges and mass transit systems; Building (38% of LTM revenues; 23% of backlog), which handles large projects in the hospitality and gaming, sports and entertainment, education, transportation and healthcare markets; Specialty Contractors (21% LTM revenues; 22% of backlog) provides mechanical, electrical, plumbing and heating installation services. The principal methodology used in these ratings was Construction Industry published in March 2017. UNIQUE TOOL: Aug. 11 Hearing on Disclosure Statement ---------------------------------------------------- Judge Mary Ann Whipple has ordered that the hearing to consider the approval of the disclosure statement of Unique Tool & Manufacturing Co., Inc, will be held at Courtroom No. 2, Room 103, United States Courthouse, 1716 Spielbusch Avenue, Toledo, Ohio, on August 11, 2020, at 9:30 a.m. August 3, 2020, is fixed as the last day for filing and serving written objections to the disclosure statement. About Unique Tool & Manufacturing Unique Tool & Manufacturing Co., Inc. -- http://www.uniquetool.com/ -- is a custom metal stamping company formed in 1963, which supplies stampings to the satellite, communications, electrical, appliance, refrigeration and automotive industries throughout the United States, Canada and Mexico. It specializes in tool and die manufacturing, brazing, welding, plating and more. Unique Tool & Manufacturing sought Chapter 11 protection (Bankr. N.D. Ohio Case No. 19-32356) on July 26, 2019. At the time of the filing, the Debtor was estimated to have up to $50,000 in assets and $1 million to $10 million in liabilities. The Hon. Mary Ann Whipple is the case judge. Diller and Rice, LLC, is the Debtor's legal counsel. The U.S. Trustee for Region 9 appointed a committee of unsecured creditors on Sept. 5, 2019. The Creditors' Committee retained Wernette Heilman PLLC as its legal counsel. UNIT CORPORATION: Unsecureds to Recover 4% to 9% in Plan -------------------------------------------------------- Unit Corporation, et al., submitted a Plan and a Disclosure Statement. Unit Corp. is a holding company with no independent assets or operations. Unit Corp. conducts its operations through its operating subsidiaries. UNIT CORP.: Class A-3 Unit Corp. RBL Secured Claims. This class is impaired with estimated allowed claim amount of $36,000,000.00 and approx. % recovery of 100%. On a dollar-for-dollar basis, its Pro Rata share of the revolving loans, term loans, letter-of-credit participations, and other fees under the Exit Facility. Class A-4 Unit Corp. Subordinated Notes Claims. This class is impaired with estimated allowed claim amount of $672,368,576.39 and approx. % recovery of 4-9%. Pro Rata share of the Unit Corp. Subordinated Notes Equity Pool. Class A-5 Unit Corp. GUC Claims. This class is impaired with estimated allowed claim amount of $22,899,867 and approximately 4% to 9% recover. They will each receive a pro rata share of the Unit Corp. GUC Equity Pool; provided, however, that if the Holder of an Allowed Separation Claim (i) votes to accept the Plan and (ii) elects the Separation Settlement Opt-In on its Ballot, such Holder will instead receive cash payments in accordance with the Separation Settlement Treatment. Class A-8 Unit Corp. Interests are impaired. The interests will be cancelled, released, discharged, and extinguished; provided, however, that each Holder of a Unit Corp. Interest that does not elect the Release Opt-Out shall receive its Pro Rata share of the New Warrant Package. UNIT DRILLING COMPANY: Class B-3 UDC RBL Secured Claims. This class is impaired with estimated allowed claim amount of $36,000,000.00 and approx. % recovery of 100%. On a dollar-for-dollar basis, its Pro Rata share of the revolving loans, term loans, letter-of-credit participations, and other fees under the Exit Facility. Class B-4 UDC Subordinated Notes Claims. This class is impaired with estimated allowed claim amount of $672,368,576.39 and approximately 8% to 15% recovery. They will receive a pro rata share of the UDC Subordinated Notes Equity Pool. Class B-7 UDC Interests are unimpaired/impaired with approx. % recovery of 0-100%. The interests will be reinstated as of the Effective Date or, at the Reorganized Debtors' option, subject to the commercially reasonable consent of the Majority Restructuring Support Parties, canceled in exchange for replacement Interests in Reorganized UDC, and no distribution will be made on account of any UDC Interests. UNIT PETROLEUM COMPANY: Class C-3 UPC RBL Secured Claims. This class is impaired with estimated allowed claim amount of $36,000,000.00 and approx. % recovery of 100%. On a dollar-for-dollar basis, its pro rata share of the revolving loans, term loans, letter-of-credit participations, and other fees under the Exit Facility. Class C-4 UPC Subordinated Notes Claims are impaired with estimated allowed claim amount of $672,368,576 and approximate recovery of 3% to 6%. The members of the class will each receive pro rata share of the UPC Subordinated Notes Equity Pool. Class C-5 UPC GUC Claims are impaired with estimated allowed claim amount of $23,503,158.11 and approximate recovery of 3% to 6%. They will receive a pro rata share of the UPC GUC Equity Pool. Class C-7 UPC Interests are unimpaired/impaired with approximate recovery of 0% to 100%. The interests will be reinstated as of the Effective Date or, at the Reorganized Debtors' option, subject to the commercially reasonable consent of the Majority Restructuring Support Parties, canceled in exchange for replacement Interests in Reorganized UPC and no distribution shall be made on account of any UPC Interests. OTHER DEBTORS: Class D-3 Other Subordinated Notes Claims. This class is impaired with estimated allowed claim amount of $672,368,576.39 and approximate recovery of 15% to 30%. They will each receive a pro rata share of the Unit Corp. Subordinated Notes Equity Pool, the UDC Subordinated Notes Equity Pool, and the UPC Subordinated Notes Equity Pool. Class D-6 Other Interests are unimpaired/impaired with approximate recovery of 0% to 100%. Reinstated as of the Effective Date or, at the Reorganized Debtors' option, subject to the commercially reasonable consent of the Majority Restructuring Support Parties, canceled in exchange for replacement Interests in the Reorganized Other Debtors, as applicable. The Reorganized Debtors will fund distributions under the Plan from Cash on Hand/DIP Facility Borrowings, Exit Facility, and Issuance and Distribution of Reorganized Unit Corp. Interests. A full-text copy of the Disclosure Statement dated June 24, 2020, is available at https://tinyurl.com/y7cy6dcd from PacerMonitor.com at no charge. The Debtors' counsel: VINSON & ELKINS LLP Harry A. Perrin Paul E. Heath Matthew J. Pyeatt 1001 Fannin Street, Suite 2500 Houston, TX 77002-6760 - and - David S. Meyer Lauren R. Kanzer 1114 Avenue of the Americas, 32nd Floor New York, NY 10036 About Unit Corporation Unit Corporation (NYSE- UNT) (OTC Pink- UNTCQ) -- http://www.unitcorp.com/-- is a Tulsa-based, publicly held energy company engaged through its subsidiaries in oil and gas exploration, production, contract drilling and natural gas gathering and processing. On May 22, 2020, Unit Corporation and five affiliates sought Chapter 11 protection (Bankr. S.D. Tex. 20-32740) with a pre-negotiated plan that reduces debt by $650 million. Unit Corp. disclosed $2,090,052,000 in assets and $1,034,417,000 in debt as of Dec. 31, 2019. Vinson & Elkins L.L.P. is serving as legal advisor, Evercore Group L.L.C. is serving as investment banker, and Opportune LLP is serving as restructuring advisor to the Company. Prime Clerk LLC is the claims agent, maintaining the page https://cases.primeclerk.com/UnitCorporation Weil, Gotshal & Manges LLP is serving as legal advisor and Greenhill & Co., LLC is serving as financial advisor to an ad hoc group of holders of Subordinated Notes. VERITAS HOLDINGS: S&P Assigns 'B' Rating to New Term Loans ---------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '2' recovery rating to U.S.-based information management software provider Veritas Holdings Ltd.'s new term loans, which consist of a $1.55 billion term loan and a EUR690 million term loan. S&P also affirmed its 'B-' issuer credit ratings on Veritas Holdings and issuing subsidiary Veritas Bermuda Ltd. and maintained its negative outlook. This leverage-neutral transaction reduces refinancing risk and improves financial flexibility, but leverage remains high and near-term challenges remain. "Veritas' new issuance significantly diminishes a January 2023 maturity wall that, while still fairly distant, had begun to factor into our outlook on the company given an expectation for weak performance in calendar 2020 on COVID-19 pandemic-related macroeconomic weakness," S&P said. "We continue to believe that the ongoing pandemic will disrupt the firm's efforts to stabilize revenue in calendar 2020 and forecast Veritas' revenue and bookings to decline through the rest of the year, with integrated appliances and small and midsize business-focused BackupExec businesses faring the worst," S&P said. Financial leverage remains high, and while it had declined to 7.8x in fiscal 2020 S&P expects leverage to increase again on EBITDA declines in fiscal 2021, reaching over 9x by the end of the year. Improving renewal rates and core product stickiness should limit the extent of a downturn. Veritas' core NetBackup product will likely be its strongest performer in this environment, as its large enterprise customers rely on it to protect mission-critical data, although S&P does expect some customers to delay upgrades and capacity expansion. "The relative stability of this segment, along with a high share of recurring revenues, should mitigate the impact of lower information technology (IT) spending and limit the rate of Veritas' revenue declines to the high single–digit percent range, in our view. An impressive increase in renewal rates by over 700 basis points over the past 18 months should also moderate the impact of the weakening macroeconomic environment," S&P said. Veritas may struggle to reduce expenses further after many years of headcount reductions. The firm increased margins and EBITDA in recent years despite revenue declines through aggressive expense and headcount management. While Veritas has implemented a number of temporary expense reduction measures that should help defend margins somewhat in the near-term, S&P believes permanent further cuts may be difficult to achieve quickly or disruptive to the business turnaround, and that a sizable revenue decline will materially compress margins if sales do not quickly recover. S&P also sees risk that substantial further reductions may impair the firm's ability to innovate and return to growth when the economy eventually recovers. "The negative outlook highlights our view that macroeconomic weakness could accelerate revenue declines, reverse recent EBITDA margin gains, and pressure liquidity if Veritas cannot sustain positive free cash flow generation over the next 12 months. We note that the company's $250 million revolver matures in October 2022 and shrinks to $187 million in January 2021, which could constrain liquidity if cash flow deteriorates rapidly and does not recover. $568 million of pro-forma cash and an improved maturity profile increases flexibility to return to EBITDA growth," S&P said. S&P could lower its rating on Veritas if: -- Revenue decline accelerates to over 10% year over year in fiscal 2021 without significant and commensurate margin improvement; -- Free cash flow turns negative for the year and is likely to remain negative through fiscal 2022; or -- Cash flow is sufficiently negative to lead S&P to revise its adequate liquidity assessment. S&P would consider revising the outlook to stable if: -- S&P believes the company is likely to generate sustainably positive free cash flow through a macroeconomic downturn; -- Headroom remains over 10% under all covenants; and -- Liquidity and cash balances remain healthy. "We would view a successful completion of this refinancing as supportive and a necessary condition to stabilize our outlook on the firm, but would additionally look to evidence of underlying business stability over the current year as further evidence that the company's capital structure remains sustainable," S&P said. VERNON 4540: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Vernon 4540 Realty LLC 45 Carleon Ave Larchmont, NY 10538-3221 Chapter 11 Petition Date: August 5, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-22919 Judge: Hon. Robert D. Drain Debtor's Counsel: Bruce H. Bronson, Esq. BRONSON LAW OFFICE, P.C. 480 Mamaroneck Ave Harrison, NY 10528-1621 Tel: (877) 385-7793 E-mail: hbbronson@bronsonlaw.net Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Brent Carrier, managing member. A copy of the petition containing, among other items, a list of the Debtor's 12 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/NL4ugJ VISTEON CORP: S&P Affirms 'BB-' ICR; Rating Off Watch Negative -------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' issuer credit rating on Visteon Corp. and its issue-level ratings on its debt and removed all of the ratings from CreditWatch, where it placed them with negative implications on March 25, 2020. S&P believes auto sales are improving sequentially, however, the negative outlook reflects continued uncertainty around the severity and duration of the impact of COVID-19 on the auto industry. Visteon's sales declined nearly 50% in the second quarter and margins fell significantly because of plant closures because of COVID-19. Production is improving globally and if volumes continue to increase, S&P believes Visteon will be able to significantly increase its margins toward pre-pandemic levels in 2021. However, the timing and degree of economic recovery from COVID-19 remain uncertain. Visteon will continue to face risks from both operations and end-market demand. S&P expects high unemployment, shrinking discretionary income, and diminished consumer confidence will pressure spending on new cars. If demand remains at lower levels for a prolonged period of time, Visteon's credit metrics could further weaken. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook reflects the risk (albeit reduced) of a downgrade over the next 12 months if there is a prolonged negative effect on demand and operational performance from pandemic-related fallout. "We would likely lower our rating on Visteon if we expect its debt to EBITDA to remain above 4x in 2021 or its FOCF to debt remains below 5%," S&P said. "We could revise the outlook to stable if we see steady macroeconomic recovery prospects in 2021 and continued market outgrowth leading to strong margin recovery. This would support debt to EBITDA solidly below 4x and free cash flow to debt above 5%," the rating agency said. WATKINS NURSERIES: Seeks to Hire Ritchie Bros. as Auctioneer ------------------------------------------------------------ Watkins Nurseries, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Ritchie Bros. Auctioneers (America) Inc. and IronPlanet, Inc. as their auctioneer. Ritchie Bros. will assist the sale of Debtors' equipment and other personal properties. The firm will receive a commission based on the gross sale price of each piece of equipment as follows: (a) 10.50 percent for any lot in excess of $2,500; and (b) 10.50 percent for any lot realizing $2,500 or less. Christopher Owens, territory manager at Ritchie Group, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Ritchie Group can be reached through: Christopher Owens Ritchie Bros. Auctioneers (America) Inc. P.O. Box 6429 Lincoln, Nebraska 68506-0429 Tel: +1.402.421.3631 Fax: +1.402.421.1738 About Watkins Nurseries Watkins Nurseries, Inc. -- http://www.watkinsnurseries.com/-- is a wholesale and retail tree nursery, plant center, and landscape design firm established in 1876. It specializes in field-grown trees and shrubs that it produces on over 500 acres of farmland. Virginias Resources Recycled, LLC -- http://www.vrrllc.com/-- is a commercial and residential land clearing, grinding, grubbing and logging company located in Central, Virginia. Watkins-Amelia, LLC is engaged in activities related to real estate. Watkins Nurseries, Virginias Resources and Watkins-Amelia sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-30890) on Feb. 19, 2020. At the time of the filing, each Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Paula S. Beran, Esq., at Tavenner & Beran, PLC, is Debtor's legal counsel. WC 3RD AND CONGRESS: Case Summary & 7 Unsecured Creditors --------------------------------------------------------- Debtor: WC 3rd and Congress, LP 814 Lavaca Street Austin, TX 78701 Business Description: WC 3rd and Congress, LP is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: August 5, 2020 Court: United States Bankruptcy Court Western District of Texas Case No.: 20-10887 Debtor's Counsel: Mark H. Ralston, Esq. FISHMAN JACKSON RONQUILLO PLLC 13155 Noel Road, Ste. 700 Dallas, TX 75240 Tel: (972) 419-5500 Email: mralston@fjrpllc.com Estimated Assets: $50 million to $100 million Estimated Liabilities: $10 million to $50 million The petition was signed by Natin Paul, authorized agent. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/LRW8Sp List of Debtor's Seven Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Texas Commission Environmental $3,234 Quality (TCEQ) PO Box 3089 Austin, TX 78711 2. Alexander Dubose & Jefferson LLP Unknown 515 Congress Avenue, Suite 2350 Austin, TX 78701-3562 3. Hance Scarborough, LLP Unknown 400 W. 15th Street, Suite 950 Austin, TX 78701 4. Streusand, Landon, Ozburn, and Unknown Lemmon LLP 1801 S. Mopac Expressway, Suite 320 Austin, TX 78746 5. King & Spalding LLP Unknown 500 West 2nd Street, Suite 1800 Austin, TX 78701 6. Julia Clark & Associates Unknown 1401 West Avenue, Suite B Austin, TX 78701 7. Harney Partners Unknown 3800 N. Lamar Blvd, Suite 200 Austin, TX 78756 WHITING PETROLEUM: Responds to Disclosure Objections ---------------------------------------------------- Whiting Petroleum Corporation, et al., submitted an omnibus reply in support of, and in response to objections to, approval of the adequacy of the Disclosure Statement relating to the Joint Chapter 11 Plan of Reorganization. The Debtors point out that the Disclosure Statement contains adequate information. The Debtors have made proposals to each of the remaining objecting parties to resolve their respective adequate information objections. The Debtors have modified certain of the solicitation procedures to address these objections, and the remaining objections should be overruled. The Debtors believe that seven days is a sufficient length of time to review the contents of the Plan Supplement and to reach an informed decision whether to support the Plan. The filing of a plan supplement on fewer than 14 days' notice prior to voting is generally consistent with the practice of other complex chapter 11 cases confirmed in this district, many of which filed plan supplements seven or fewer days prior to the applicable voting deadline. The Debtors assert that the objections woefully fail to demonstrate that the Plan is patently unconfirmable. The Plan complies with each of the requirements, and the Debtors will present evidence and carry their burden on each of these points at the confirmation hearing. The Debtors point out that the Plan's classification of Class 4 and Class 5 is appropriate under Section 1122(a) of the Bankruptcy Code and applicable law. Whether the classification is appropriate is necessarily a fact-intensive inquiry that should be addressed at confirmation. The Debtors intend to present evidence on the classification at the Confirmation Hearing, and the objections to classification should be overruled at this stage. According to the Debtors, there is a legitimate business justification for the separate classification of claims in Classes 4 and 5. The Plan's classification scheme satisfies the requirements of section 1122(a) of the Bankruptcy Code and is consistent with the Fifth Circuit's holding in Greystone because a valid business reason exists to separately classify Trade Claims in Class 4 from other unsecured claims classified as Class 5 General Unsecured Claims. The Debtors point out that the classification of senior notes claims, litigation claims, and rejection damages claims in a single class is proper. Claims classified in Class 5 are similar in terms of their legal rights under the Bankruptcy Code, their priority (they are all pari passu unsecured claims), and their significance to the Debtors' go-forward operations. More specifically, claims in Class 5 are held by unsecured creditors with whom the Debtors do not anticipate maintaining an ongoing business relationship post-emergence. Courts have confirmed plans classifying unsecured notes claims with other unsecured claims such as rejection damages claims and litigation claims. The Debtors further point out that the release and exculpation provisions are appropriate. As to the releases, the Debtors will demonstrate at confirmation that such releases are appropriate and necessary in light of the holistic restructuring proposed by the Plan. The Debtors assert that the other confirmation-related objections are premature and should be deferred to the confirmation hearing. Co-Counsel to the Debtors: Matthew D. Cavenaugh Jennifer F. Wertz Veronica A. Polnick JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: mcavenaugh@jw.com jwertz@jw.com vpolnick@jw.com - and - Brian E. Schartz, P.C. Anna Rotman, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 609 Main Street Houston, Texas 77002 Telephone: (713) 836-3600 Facsimile: (713) 836-3601 Email: brian.schartz@kirkland.com anna.rotman@kirkland.com Gregory F. Pesce KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: gregory.pesce@kirkland.com - and - Stephen E. Hessler, P.C. 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: stephen.hessler@kirkland.com About Whiting Petroleum Corporation Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. WHITING PETROLEUM: Senior Noteholders Defend Plan ------------------------------------------------- The ad hoc committee of certain unaffiliated holders of senior notes issued by Whiting Petroleum Corporation, filed a statement in support of the Disclosure Statement Motion. According to the Ad Hoc Committee, any suggestion that the Ad Hoc Committee and Whiting negotiated in bad faith over the terms of the RSA, or that the Ad Hoc Committee engineered a sweetheart deal for itself at the expense of other similarly-situated stakeholders, is patently false. Ad Hoc Committee asserts that unlike other proposed plans that reward creditors that are "in the deal," the Plan does not contemplate any rights offering, backstop fees, or any special consideration for the Ad Hoc Committee or those of its members that negotiated the terms of the Plan with Whiting. Separately, the Ad Hoc Committee notes that EJS Investment Holdings, LLC's ("EJS") objection contains baseless arguments that the Ad Hoc Committee or some of its specific members have acted other than in good faith and without full transparency in connection with this matter. The Ad Hoc Committee of Noteholders has worked with the Debtors and the Official Committee of Unsecured Creditors to address and resolve various concerns regarding the Disclosure Statement, such as working with the Debtors to craft a viable business plan and a feasible budget. Ad Hoc Committee points out that for the reasons set forth herein and in the Reply, the Ad Hoc Committee respectfully requests that the Court (i) overrule the objections to the Disclosure Statement, (ii) enter an order approving the Disclosure Statement and proposed solicitation procedures. Co-Counsel to the Ad Hoc Committee of Noteholders: John F. Higgins (jhiggins@porterhedges.com) PORTER HEDGES LLP 1000 Main Street, 36th Floor Houston, Texas 77002 Telephone: (713) 226-6648 Facsimile: (713) 226-6248 - and - Andrew N. Rosenberg (arosenberg@paulweiss.com) Alice Belisle Eaton (aeaton@paulweiss.com) Michael M. Turkel (mturkel@paulweiss.com) Omid Rahnama (orahnama@paulweiss.com) PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Facsimile: (212) 757-3990 About Whiting Petroleum Corporation Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. WHITING PETROLEUM: Unsecureds Projected Recovery Under Plan at 39% ------------------------------------------------------------------ The Whiting Petroleum Corporation, et al., filed a Plan and a Disclosure Statement on June 29, 2020. Between the Petition Date and April 23, 2020, the Debtors and their advisors engaged in negotiations with the Ad Hoc Committee of Noteholders regarding the documentation of the Restructuring Support Agreement and Plan contemplated thereby. On April 23, 2020, the Debtors entered into the Restructuring Support Agreement with certain Consenting Creditors, subject, as to the Debtors, to Bankruptcy Court approval, which is anticipated to be granted at Confirmation. As of June 29, 2020, holders of 44.7% of the Senior Notes and at least 12.0% of the Convertible Notes have executed the Restructuring Support Agreement or have informally indicated that they support the Plan. The "settlement" referred to in the Plan and Disclosure Statement generally refers to the agreement by the Holders of Senior Notes Claims to equitize their debt pursuant to the Plan and to otherwise agree to the various compromises and resolutions of these Chapter 11 Cases embodied in the Plan. The material terms of the Plan and Restructuring Support Agreement are as follows: * Holders of Allowed RBL Claims shall, in full and final satisfaction of such Allowed RBL Claim, receive, at the option of each Holder: (a) if such Holder votes to accept the Plan and elects to participate in the Exit Facility, its Pro Rata share of: (i) the Exit Facility Revolving Loan Commitments; and (ii) the Exit Facility Effective Date Cash Amount; or (b) if such Holder does not vote to accept the Plan (including by voting against the Plan or failing to timely return a ballot) or does not elect to participate in the Exit Facility (including by not making any election with respect to the Exit Facility on the ballot), its Pro Rata share of the Exit Facility Term Loans. For the avoidance of doubt, in either case, contingent or unasserted indemnification or reimbursement obligations under the RBL Credit Agreement shall remain in full force and effect to the maximum extent permitted by applicable law and shall not be discharged, impaired, or otherwise affected by the Plan; * Holders of Allowed General Unsecured Claims shall receive their pro rata share of 97% of the equity of the Reorganized Debtors (subject to dilution by the New Common Stock to be issued pursuant to the New Warrants-A, the New Warrants-B, and the Management Incentive Plan); provided that if either Class 3 or Class 5 vote to reject the Plan, each Holder of an Allowed General Unsecured Claim shall receive, in full and final satisfaction of such Allowed General Unsecured Claim, its Pro Rata share of 100% of the New Common Stock, subject to dilution by the New Common Stock to be issued pursuant to the Management Incentive Plan; * To the extent that Class 3 and Class 5 vote to accept the Plan, Holders of Allowed Existing Interests shall receive (i) their Pro Rata share of 3% of the equity in the Reorganized Debtors (subject to dilution by the New Common Stock to be issued pursuant to the New Warrants-A, the New Warrants-B, and the Management Incentive Plan), (ii) warrants to purchase up to 10% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-A Agreement, and (iii) warrants to purchase up to 5% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-B Agreement; provided that if either Class 3 or Class 5 vote to reject the Plan, Holders of Allowed Existing Interests shall receive no distribution; and * To the extent that Class 3 and Class 5 vote to accept the Plan, Holders of Allowed Section 510(b) Claims shall receive (i) their Pro Rata share of 3% of the equity in the Reorganized Debtors (subject to dilution by the New Common Stock to be issued pursuant to the New Warrants-A, the New Warrants-B, and the Management Incentive Plan), (ii) warrants to purchase up to 10% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-A Agreement, and (iii) warrants to purchase up to 5% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-B Agreement; provided that if either Class 3 or Class 5 vote to reject the Plan, Holders of Allowed Section 510(b) Claims shall receive no distribution. Class 3 RBL Claims are projected to total $914,186,000. In full and final satisfaction of such Allowed RBL Claim, each Holder of an Allowed RBL Claim shall receive, at the option of each Holder: (a) if such Holder votes to accept the Plan and elects to participate in the Exit Facility, its Pro Rata share of: (i) the Exit Facility Revolving Loan Commitments and (ii) the Exit Facility Effective Date Cash Amount; or (b) if such Holder does not vote to accept the Plan (including by voting against the Plan or failing to timely return a ballot) or does not elect to participate in the Exit Facility (including by not making any election with respect to the Exit Facility on the ballot), its Pro Rata share of the Exit Facility Term Loans. For the avoidance of doubt, in either case, contingent or unasserted indemnification or reimbursement obligations under the RBL Credit Agreement will remain in full force and effect to the maximum extent permitted by applicable law and shall not be discharged, impaired, or otherwise affected by this Plan. Class 4 Trade Claims are projected to total $9,480,000. Class 5 General Unsecured Claims totaling $2,578,625,000 will recover 39%. Class 8 Existing Interests -- 92,522,059 shares -- will each receive a pro rata share of approximately $48 million in value. To the extent Class 3 and Class 5 vote to accept the Plan, each Holder of an Allowed Existing Interest shall receive its Pro Rata6 share of (i) the Existing Interests Equity Pool, (ii) the New Warrants-A, and (iii) the New Warrants-B; provided that if either Class 3 or Class 5 vote to reject the Plan: Holders of Allowed Existing Interests in Class 8 shall receive no distribution. A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/y99nca6r from PacerMonitor.com at no charge. Co-Counsel to the Debtors: Matthew D. Cavenaugh Jennifer F. Wertz Veronica A. Polnick JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: mcavenaugh@jw.com jwertz@jw.com vpolnick@jw.com - and - Brian E. Schartz, P.C. Anna Rotman, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 609 Main Street Houston, Texas 77002 Telephone: (713) 836-3600 Facsimile: (713) 836-3601 Email: brian.schartz@kirkland.com anna.rotman@kirkland.com Gregory F. Pesce KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: gregory.pesce@kirkland.com - and - Stephen E. Hessler, P.C. 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: stephen.hessler@kirkland.com About Whiting Petroleum Corporation Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. XEROX HOLDINGS: S&P Downgrades Issuer Credit Rating to 'BB' ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based print technology company Xerox Holdings Corp. to 'BB' from 'BB+'. S&P now expects revenues to decline by about 25% in 2020 and margins to fall to about 10%, materially below its prior forecast. Xerox's reported significant revenue declines of about 35% in the second quarter resulted in material margin and free operating cash flow pressures. S&P expects continued revenue headwinds in 2020, with revenues declining in the mid-20% range and margins compressing to about 10% down from 13%-14% over the past few years. The rating agency believes the current operating headwinds will persist in the near term further delaying the company's revenue stabilization. S&P's rating on Xerox considers the company's meaningful cash balances of about $2.3 billion and low adjusted leverage below 1x at June 30, 2020. The company's bolstered liquidity position resulting from the monetization of its stake in the Fuji Xerox joint venture should allow some cushion to absorb shareholder returns and tuck-in acquisitions while maintaining adjusted leverage below S&P's downgrade threshold of 2.5x over the coming 12 months. While adjusted leverage is low now, S&P believes it is temporary. The company aims to return at least 50% of free operating cash flow (FOCF) to shareholders, and has opportunistically increased returns over the past few years. In addition, in light of Xerox's weaker operational performance S&P believes activist investor involvement in the company raises risk related to increased shareholder returns and a more aggressive financial policy. S&P also believes Xerox established a higher risk tolerance as evidenced by its hostile takeover bid for HP Inc. "While Xerox has not made any large-scale debt-financed acquisitions recently, we believe its revenue stabilization will likely entail acquisitions to help offset revenue declines and margin pressures given the limited growth prospects in the mature enterprise print industry," S&P said. Global lock-down measures are easing, supporting a potential recovery in the second half. Although S&P Global Ratings' base case is for a gradual recovery through next year, rising COVID-19 cases could cause the recovery to lose momentum. Pandemic-related shutdowns have affected the company's significant base of enterprise clients, forcing many employees to work remotely. While Xerox derives about three-quarters of its revenue from contracted outsourcing services, equipment maintenance services, consumable supplies, and financing, some arrangements are variable usage-based and are uniquely vulnerable to remote working conditions, as evidenced by the company's significant revenue declines in equipment and post-sale revenues of negative 38% and negative 34%, respectively, during the second quarter ended June 30, 2020. About 50% of the company's contracted streams is variable. While Xerox has seen early indications of a modest improvement in June as offices reopen, growth in remote work trends could further delay the company's business turnaround. COVID-19-related disruptions and lower information technology (IT) spending will delay the company's path to revenue stabilization longer term. While Xerox's post-sale streams generate higher margins than its equipment sales and generate somewhat stable cash flow for many years, they are dependent on unit and print usage growth. The company noted that print pages continued to decline in the second quarter though moderating from the 50% decline it experienced in the first quarter. S&P expects weaker global IT spending (about negative 4% in 2020) and constrained printer market growth to persist due to the mature A3 market (which is about a $22 billion market according to IDC Corp.) and the declining volume of printed pages as workplaces shift to digitizing their content and documentation. The company derives about two-thirds of equipment sales from midrange products, which include A3 office machines. While S&P expects the print industry will experience a gradual long-term decline, work-from-home could accelerate the digital transition thereby depressing hardware demand and print revenues. S&P acknowledges Xerox is investing in new revenue opportunities in growth areas such as digital IT, software, and analytics, but these are modest now and unable to help offset legacy print erosion. The stable outlook reflects S&P's expectations that while Xerox will continue to face operating headwinds, the rating agency does not believe a further downgrade is likely over the next 12 months because its ample liquidity position would likely support low adjusted leverage below 2.5x allowing for some share repurchases and tuck-in acquisitions. The outlook also reflects S&P's expectation for a modest business recovery during the second half of 2020. "We could lower the rating if operational performance deteriorates beyond our current expectations and the company is unable to offset revenue pressures through additional cost reduction such that the adjusted EBITDA margin remains below 10%. A downgrade could also occur if shareholder returns or acquisitions cause adjusted leverage to rise above 2.5x on a sustained basis," the rating agency said. "Although unlikely over the near term, we could consider a higher rating if the company shows progress toward sustained business stabilization and a path to revenue growth driven by strategic initiatives already in place. We would also need to believe there is reduced risk of large-scale acquisitions and shareholder returns that materially increase leverage," S&P said. XEROX HOLDINGS: S&P Rates Senior Unsecured Note Issuance 'BB' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level and '3' recovery ratings to U.S.-based print technologies company Xerox Holdings Corp.'s proposed offering of senior unsecured notes due 2025 and 2028. S&P expects the company will use the net proceeds to help refinance upcoming debt maturities. Issue Ratings - Recovery Analysis Key analytical factors -- S&P's '3' recovery rating on the unsecured debt is unchanged but could be pressured over time if Xerox issues secured debt, which is immaterial currently. -- The '3' recovery rating on the company's unsecured senior debt, including its $1.8 billion unsecured revolver expiring August 2022, reflects S&P's expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of payment default. -- Xerox Holdings Corp.'s existing capital structure includes about $4.0 billion of unsecured senior notes issued by Xerox Corp. -- S&P expects Xerox Holdings Corp. will issue the proposed notes and Xerox Corp. will provide a guarantee. -- Xerox Holdings Corp. has no material assets other than its holdings in Xerox Corp. Holdings guarantees the unsecured revolver but not the notes. Currently this does not affect S&P's recovery ratings on unguaranteed debt. Simulated default assumptions -- Simulated year of default: 2025 -- Implied enterprise value multiple: 6x -- Implied EBITDA at emergence: $538 million Simplified waterfall -- Net enterprise value at default (after 5% administrative costs): $3.0 billion -- Collateral value available to unsecured creditors: $3.0 billion -- Total unsecured claims: $5.7 billion -- Recovery expectations: 50%-70%; rounded estimate: 50% Note: All debt amounts include six months of prepetition interest. ZATO INVESTMENTS: Unsecureds Get 100% of Allowed Claims ------------------------------------------------------- Zato Investments Ltd. Co., submitted a Plan and a Disclosure Statement. Class 1 Secured Claims of JTS Capital SB LLC (Claims 2, 3, and 4) are impaired with a total claim of $616,569. Payment is ongoing and will end on September 2023 and bearing and interest rate of Interest 5.8% per annum. Class 2 Secured Claim of Donna M Bosely & Christie M White (Claim 5) is impaired with a total claim of $86,971.97. The class will received a monthly payment of $241.59 beginning on September 2020 and ending on September 2023 without interest General unsecured creditors are classified in Class 3, and will receive a distribution of 100% of their allowed claims. Equity Security Holders are impaired. The interests of the class shall not be altered by the confirmation of the Plan, but the interests shall have no right to dividends of corporate income until all other creditors are paid in full or have agreed otherwise. The Debtor will fund its Plan by continuing its operations, and, from time to time, as may be determined by the sole judgment and discretion of the Debtor's management, liquidation of assets, additional offering of stock, or incurring debt. A full-text copy of the Disclosure Statement dated June 24, 2020, is available at https://tinyurl.com/y9bhy7xj from PacerMonitor.com at no charge. About Zato Investments Zato Investments Ltd. Co. owns real estate and improvements, consisting of single-family and multi-family residences for lease to the public at Little Rock, Arkansas. Zato Investments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ark. Case No. 19-13288) on June 24, 2019. At the time of the filing, the Debtor was estimated to have assets of between $500,001 and $1 million and liabilities of the same range. The case is assigned to Judge Phyllis M. Jones. Stanley V. Bond, Esq., of Bond Law Office, is the Debtor's counsel. [*] Confusion MOunts on Bankruptcy Debtor's Access to PPP --------------------------------------------------------- Frankin Barbosa, Jr, Howard Berkowen and Sheila Calello of McCarter & English LLP wrote an article on JD Supra titled "Confusion Mounts Regarding Bankruptcy Debtor Access to PPP"-Updated. One Court Reverses Itself and Others Expose Eligibility Loopholes Several recent bankruptcy court decisions reveal that a temporary restraining order prohibiting the Small Business Administration (SBA) from enforcing its rule that a debtor in bankruptcy cannot qualify for a Paycheck Protection Program (PPP) loan (the Bankruptcy Exclusion) is not necessarily a reliable predictor of ultimate success on the merits, and some courts have permitted end runs around the Bankruptcy Exclusion, empowering debtors to take advantage of those loopholes. A Brief Refresher Regarding the SBA’s Bankruptcy Exclusion Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacting the PPP, a loan program aimed at helping businesses pay their employees during the pandemic. The PPP is guaranteed under Section 7(a) of the Small Business Act, which authorizes the SBA to provide loans to small businesses. As with other Section 7(a) loans, the SBA made the approval of a PPP loan expressly contingent on the borrower not being "presently involved in any bankruptcy," even though that requirement is not imposed by the CARES Act. The PPP, however, is unlike any other Section 7(a) loan program in several important respects. Section 7(a) loans do not contain a forgiveness feature, and the SBA's guarantee of the loan is limited to 75-85% of the loan amount, leaving the lender at risk for the balance. On the other hand, a PPP loan is 100% guaranteed by the SBA, and if a borrower uses the PPP loan proceeds to fund payroll and other eligible operating expenses during a particular time period, that portion of the loan proceeds (up to 100%) will be forgiven, resulting in the loan becoming a grant. To be clear, the SBA is required to pay to the lender or PPP noteholder that portion of a PPP loan that is forgiven as well as interest on the principal amount so forgiven. On June 5, 2020, the Paycheck Protection Program Flexibility Act (the Flexibility Act) was enacted. The Flexibility Act makes the PPP friendlier to borrowers and significantly increases the likelihood that the entire PPP loan will be forgiven. Among the improvements are an increase in the amount of time a business has to spend PPP funds and an increase in the percentage of the loan that a business may spend on operating expenses. The Flexibility Act did not address the Bankruptcy Exclusion adopted through the SBA's rulemaking authority, despite the abundance of litigation challenging that rule and the mixed results arising from such litigation. Sometimes a Court Changes Its Mind In Penobscot Valley Hospital v. Carranza (In re Penobscot Valley Hospital), Case No. 20-1005, and Calais Regional Hospital v. Carranza (In re Calais Regional Hospital), Case No. 20-1006, the Bankruptcy Court for the District of Maine, assessing the merits of complaints filed by two debtor hospitals seeking relief from the Bankruptcy Exclusion, issued proposed findings of fact and conclusions of law supporting the dismissal of the debtors' complaints despite having previously entered a temporary restraining order (TRO) prohibiting the SBA from enforcing the Bankruptcy Exclusion. The hospital debtors in Penobscot and Calais filed complaints by way of order to show cause, seeking relief from the Bankruptcy Exclusion. Each of the debtors had been denied access to PPP loan funds on account of their pending bankruptcy proceedings, and alleged that the denial of their loan applications violated: (i) Section 525(a) of the Bankruptcy Code, because the PPP is a "grant" program as opposed to a loan program, and in administering the grant the SBA impermissibly discriminated against bankruptcy debtors; and (ii) the Administrative Procedures Act (APA), because the SBA exceeded its rulemaking authority when it promulgated the Bankruptcy Exclusion. These same arguments have been raised, with varying success, by bankruptcy debtors across the country. As in other similar cases, the SBA opposed the debtors' requests for relief and argued that (i) the debtors are barred from seeking injunctive relief against the SBA pursuant to 15 U.S.C. § 634(b); (ii) the PPP is a loan program, not a grant program, and therefore Section 525 of the Bankruptcy Code is inapplicable; and (iii) the SBA's promulgation of the Bankruptcy Exclusion was a proper exercise of its broad rulemaking authority to formulate and implement rules governing its lending programs, including the PPP. On April 30, 2020, the court granted TROs over the SBA's objection. The TROs enjoined the SBA and participating PPP lenders from denying or refusing to guarantee a PPP loan in favor of the debtors solely on the basis of their bankruptcy debtor status. In its opinion supporting the TROs, the court found that the debtors had demonstrated a likelihood of success on their Section 525 claims. More specifically, the court found that "participation in the PPP could be characterized as an 'other similar grant'" as defined under Section 525(a) and, as such, the SBA's categorical exclusion of bankruptcy debtors from the PPP violated Section 525's antidiscrimination provisions. However, and most unusually, the court reversed course on June 3, 2020, issuing findings of fact and conclusions of law calling for the dismissal of the complaint. The court declined to issue a final binding decision due to its finding that the debtors’ claims under the APA did not invoke issues “core” to the debtors' bankruptcy proceedings. As to the debtors’ Section 525 claim, the court determined that the PPP is not a "grant" as used in Section 525(a), namely because it initially assumes the form of a loan and it is not akin to instruments previously adjudicated as falling within the scope of section 525(a), like licenses, permits, charters and franchises: Despite the Debtor's assertions and notwithstanding some of the preliminary determinations made in the TRO, the PPP is a loan program; it is not merely a grant of aid. [. . .] [A] distribution of PPP funds initially assumes the form of a loan. Congress knows how to distribute aid without strings attached and, in fact, did so recently. See, e.g., 26 U.S.C. § 6428(a) (amending the IRC to provide so-called "recovery rebates" as tax credits for certain individuals in the wake of Covid-19). With the PPP, however, Congress elected to establish a loan program, albeit one that does not look like any other loan program available from the government or the capital markets. These loans may function as a grant of aid during a crisis, but they are still—at least at their inception—loans. [. . .] The existence of favorable terms and a unique feature (namely, forgiveness under specified circumstances) does not change the character of what the Debtor wants to obtain: a loan that might be forgiven by the lender. The Debtor makes much of the SBA’s concession that it does consider whether an applicant is likely to liquidate before providing a loan number for an application. That does not, in the Court's view, establish that the PPP is a "grant program" instead of a "loan program." Relatedly, and in further support of its finding that the PPP is a loan program, the court equated the Bankruptcy Exclusion to a creditworthiness assessment typical of loan transactions: Perhaps a person's status as a debtor presently involved in bankruptcy is a crude measure of creditworthiness, but it is still a measure. Relying on these findings and an assessment of the SBA's discretion to formulate rules in loan-making activities, the court found that the Bankruptcy Exclusion was a proper exercise of the SBA’s rulemaking authority and, therefore, did not violate the APA. The debtors recently filed objections to the court's findings of fact and conclusion of law, and pursuant to 28 U.S.C. § 157(c)(1), the district court will conduct a de novo review of the bankruptcy court’s findings. When in Doubt, Go Around the Bankruptcy Exclusion Although courts are divided on the issue of whether a bankruptcy debtor is eligible for a PPP loan, a number of courts have exposed loopholes affecting the Bankruptcy Exclusion and permitted debtors to take advantage of those back doors. Each of these cases involves one of two sets of factual circumstances: (i) the debtor already received the PPP loan before or during the pendency of the bankruptcy case, and therefore can keep the funds; or (ii) the debtor has already filed for bankruptcy, then voluntarily dismisses the bankruptcy case in order to apply for and obtain PPP funds, and then subsequently refiles the bankruptcy case. An example of the first category is In re United States of America Rugby Football Union Ltd., 20-10738-BLS (May 13, 2020), in which the Bankruptcy Court for the District of Delaware found that the debtor rugby association could keep the PPP loan it had allegedly applied for prior to its bankruptcy filing—although the timing of the application was disputed by the SBA—and which had been funded while the debtor was "involved in a bankruptcy proceeding." The court ruled in favor of the debtor notwithstanding the parties’ factual dispute regarding the timing of the loan application and, by implication, the veracity of the debtor's representations and responses therein. Similarly, in Gateway Radiology Consultants, P.A. v. Carranza (In re Gateway Radiology Consultants, P.A.), 20-00330-MGW (Jun. 8, 2020), the Bankruptcy Court for the Middle District of Florida permitted a debtor that applied for a PPP loan while involved in a Chapter 11 bankruptcy to keep those funds, despite the debtor's apparent representation on its loan application that it was not a bankruptcy debtor (a disputed fact), finding that the SBA exceeded its authority "[b]y engrafting onto the Paycheck Protection Program a requirement that Congress chose not to insist on" and also acted arbitrarily and capriciously in doing so. While this particular end run may expose a debtor and its management to fraud claims and civil or criminal penalties—to the extent a debtor’s responses on its loan application are not truthful—desperate times call for desperate measures, and a debtor may be willing to "roll the dice" in the hope that the SBA will not pursue a remedy against such a debtor, particularly if the debtor uses the loan proceeds to keep its employees working or if a higher court ultimately determines that the Bankruptcy Exclusion is unlawful. With respect to the second category of end runs, in at least one case a court permitted bankruptcy debtors to voluntarily dismiss their bankruptcy cases, apply for a PPP loan and then reopen the previously dismissed bankruptcy case, in order to circumvent the PPP eligibility rule. See In Advanced Power Technologies, LLC, Case No. 20-13304-PGH (Bankr. S.D. Fla. Apr. 24, 2020); but see In re Capital Restaurant Group, LLC, Case No. 19-65910-WLH (Bankr. N.D. Ga. Mar. 28, 2020) (dismissing bankruptcy case with prejudice and barring debtor from refiling for one year in order to prevent debtor from circumventing Bankruptcy Exclusion). The Takeaway: It’s the Wild West Out There Unfortunately, lenders have received conflicting messages from the SBA and courts. On the one hand, the SBA is unequivocally directing lenders to deny PPP loans to applicants involved in a bankruptcy proceeding. On the other hand, courts are all over the map as to the enforceability of the Bankruptcy Exclusion. It is nearly impossible to predict the result of a debtor's challenge to the Bankruptcy Exclusion. Some courts have passionately defended the interests of debtors, while others have, with equal conviction, sided with the SBA, citing its broad rulemaking authority. Even others, as illustrated above, are susceptible to initially ruling in favor of debtors and then changing their minds at the preliminary injunction phase. The mixed results create confusion for loan applicants, debtors, and participating lenders alike. What is likely, amid much uncertainty, is that the SBA's quick rollout of the PPP and the courts’ clashing rulings will engender additional PPP eligibility litigation between debtors and the SBA, at least until the PPP sunsets on June 30. As such, lenders may see other contradictory court decisions to add to the existing uncertainty and confusion. Future litigation related to the Bankruptcy Exclusion may not be limited to suits between debtors and the SBA, but may extend to lenders. For example, the SBA could ultimately decline to honor its guarantee upon a default, whether a loan was extended pursuant to a court order, in error, or based on a lender’s belief that the Bankruptcy Exclusion is unlawful. In that scenario, a lender would be left shouldering the burdens and risks of the loan unless it prevailed in a lawsuit against the SBA for wrongfully failing to honor its guarantee. The legal landscape continues to get muddier as more courts issue rulings pertaining to the Bankruptcy Exclusion. For example, the Fifth Circuit recently considered the SBA’s appeal of the Bankruptcy Court for the Southern District of Texas's TRO entered in Hidalgo County EMS Foundation v. Carranza, (In re Hidalgo County EMS Foundation), Case No. 20-2006 (Apr. 25, 2020) (entering order permitting debtor to resubmit PPP loan application to any lender with the phrase "presently involved in any bankruptcy" stricken from the PPP application and directing the lender and the SBA to consider the application on its merits without any consideration of Hidalgo's bankruptcy filing). On June 22, 2020, the Fifth Circuit issued a three-page opinion holding that the bankruptcy court in Hidalgo "exceeded its authority" when it enjoined the SBA from enforcing the Bankruptcy Exclusion. The Fifth Circuit found that 15 U.S.C. § 634(b)(1) and “well-established Fifth Circuit law” clearly prohibit courts from issuing injunctions against the SBA. The Fifth Circuit did not address the litigants' arguments regarding the "validity or wisdom" of the Bankruptcy Exclusion. Even if the Fifth Circuit had weighed in on the propriety of the Bankruptcy Exclusion itself, its decision likely would have had little practical effect on debtor access to the PPP because CARES Act funding for PPP loans expires on June 30. Given the increasing split among courts, it is not surprising that on June 22, 2020, the same day the Fifth Circuit issued its opinion, the Bankruptcy Court for the District of Vermont and the District Court for the Southern District of Indiana ruled in favor of debtors and issued permanent injunctions against the SBA prohibiting the use of its Bankruptcy Exclusion. See Springfield Hosp., Inc. v. Carranza (In re Springfield Hosp., Inc.), Case No. 20-01003 (Bankr. D. Vt.); USA Gymnastics v. U.S. Small Bus. Admin., Case No. 20-01631 (S.D. Ind.). Until there is greater certainty in this arena, if any comes at all, lenders should continue to process PPP loan applications in accordance with the SBA's rules governing eligibility, including the Bankruptcy Exclusion. Failure to follow the SBA's rules may put a lender at risk of the SBA refusing to honor its 100% guarantee and result in expensive litigation. In any event, lenders must be prepared to field questions from borrowers and to deal with the ambiguities of the PPP. [*] Increasing Bankruptcies & Retail Closures Imperils Malls ------------------------------------------------------------ Rockland County Business Journal reports that the rising list of retail closures and bankruptcy filings are detrimental to malls. The coronavirus pandemic shutdowns did not cause the retail take-down – they simply accelerated the phenomenon, which leaves the future of the American mall in question. Coresight Research estimates 20,000 to 25,000 stores could permanently close in the U.S. this year, with 55% to 60% of those closures in malls. That would bring to the total more than double last year's closures, and it represents a sharp increase over Coresight's previous closure estimate for 2020. To date, there have been 4,005 planned closures for the year. Prior to the pandemic, many predicted mass store closures would rack up as mall traffic declined, e-commerce took root, off-price gained market share, consumer spending habits changed and other factors forced consolidation. The pandemic put the perfect storm on fast track. GreenStreet Advisors, for example, said in April that more than half of mall-based department stores could potentially close by the end of 2021. Microsoft Closing All Retail Locations Microsoft is closing all of its 83 Microsoft Store retail locations, including its location in The Westchester Mall. The company says that will result in a charge of $450 million against its earnings for the second quarter of 2020. What Microsoft is doing is a sign of what we will see in the future from a lot of retailers. Microsoft's closures are not just about having fewer stores or eliminating unprofitable operations. Microsoft's move is a reflection of the time we're in and how consumers' habits have changed. Consumers have figured out how to do all or nearly all their shopping online and retailers are figuring out how to do all or nearly all their selling online, too. Shopping by livestream, video appointments, chat and other technologies have put convenience into consumers' hands and facilitated sales while stores are closed. GNC To Close Up To 1,200 Stores In June GNC Holdings Inc., parent company of health and wellness retailer GNC, filed for Chapter 11 bankruptcy protection and said it plans to close between least 800 to 1,200 stores. It is unclear whether the locations at The Shops of Nanuet or the Palisades Center will be shuttered. The move came after the coronavirus pandemic forced the company to temporarily close locations. The chain has also been weighed down by debt it accumulated in a private equity buyout several years ago. Chuck E. Cheese, Children's Place, 24-Hour Fitness All In Trouble Chuck E. Cheese also filed for Chapter 11 Bankruptcy protection. With e-commerce up 300% quarter to date while about 95% of stores were still closed due to the pandemic, the Children's Place said it will abandon many of its mall locations for good. Overall, e-commerce in the first quarter rose 12.2% to about 53% of net sales. At the start of 2022, the retailer's mall-based portfolio will represent less than 25% of its total revenue. Executives said 300 stores will permanently close in the next 20 months: about 100 by the end of the second quarter for a total of 200 closures this year, and another 100 set to close in 2021. It is unclear whether the Palisades Center location will be affected. National gym operator 24 Hour Fitness plans to close about 135 of its locations, becoming the latest retailer to file for bankruptcy protection after months of a forced shutdown dealt the company what the CEO called a "devastating" blow. The San Ramon, California-based company said it plans to reject about 135 of its leases, most of which are expected to be in California and Texas, in an effort to curb costs. The company said Monday it has secured $250 million in debtor-in-possession financing to help it reopen the remaining 300 before the end of the month. Its Chapter 11 petition is meant to allow 24 Hour Fitness to remain operable while it figures out a way to alleviate its $1.4 billion in debt and renegotiate some of its leases. It is unclear whether The Shops at Nanuet location will reopen. Fashion & Jewelry Brands Hurting Inditex, the Spanish owner of Zara and other affordable fashion brands said on June 10 it was closing as many 1,200 stores over the next two years. Inditex said the closures were part of its broader post-pandemic plans that includes the $3 billion investment over the next three years to develop a "fully integrated store and online model." Several Inditex brands' stores will falter, including Zara, Bershka, Massimo Dutti and Pull&Bear with closures mostly affecting its locations in Europe and Asia. Some stores in the Americas will also be closed. Signet Jewelers, the parent company of Kay Jewelers, Zales and Piercing Pagoda announced on June 9 that at least 150 stores of its various brands won't reopen after being temporarily closed because of the pandemic. Signet (SIG) also said that it will close "at least an additional 150 stores" by the end of the month. The Bermuda-based company has around 3,200 global locations. The closures will amount to more than $100 million in savings. [^] BOOK REVIEW: The Rise and Fall of the Conglomerate Kings ------------------------------------------------------------ Author: Robert Sobel Publisher: Beard Books Softcover: 240 pages List Price: $34.95 Review by David Henderson Order your personal copy today at http://is.gd/1GZnJk The marvelous thing about capitalism is that you, too, can be a Master of the Universe. If you are of a certain age, you will recall that is the name commandeered by Wall Street bond traders in their Glory Days. Being one is a lot like surfing: you have to catch the crest of the wave just right or you get slammed into the drink, and even the ride never lasts forever. There are no Endless Summers in the market. This book is the behind-the-scenes story of the financial wizards and bare-knuckled businessmen who created the conglomerates, the glamorous multi-form companies that marked the high noon of post-World War II American capitalism. Covering the period from the end of the war to 1983, the author explains why and how the conglomerate movement originated, how it mushroomed, and what caused its startling and rapid decline. Business historian Robert Sobel chronicles the rise and fall of the first Masters of the Universe in the U.S. and describes how the era gave rise to a cadre of imaginative, bold, and often ruthless entrepreneurs who took advantage of a buoyant stock market to create giant enterprises, often through the exchange of overvalued paper for real assets. He covers the likes of Royal Little (Textron), Text Thornton (Litton Industries), James Ling (Ling-Temco-Vought), Charles Bludhorn (Gulf & Western) and Harold Geneen (ITT). This is a good read to put the recent boom and bust in a better perspective. While these men had vastly different personalities and processes, they had a few things in common: ambition, the ability to seize opportunities that others were too risk-averse to take, willing bankers, and the expansive markets of the 1960s. There is something about an expansive market that attracts and creates Masters of the Universe. The Greek called it hubris. The author tells a good joke to illustrate the successes and failures of the period. It seems the young son of a Conglomerateur brings home a stray mongrel dog. His father asks, "How much do you think it's worth?" To which the boy replies, "At least $30,000." The father gently tries to explain the market for mongrel dogs, but the boy is undeterred and the next afternoon proudly announces that he has sold the dog for $50,000. The father is proudly flabbergasted, "You mean you found some fool with that much money who paid you for that dog?" "Not exactly," the son replies, "I traded it for two $25,000 cats." While it lasted, the conglomerate struggles were a great slugfest to watch: the heads of giant corporations battling each other for control of other corporations, and all of it free from the rubric of "synergy." Nobody could pretend there was any synergy between U.S. Steel and Marathon Oil. This was raw capitalist power at work, not a bunch of fluffy dot.commies pretending to defy market gravity. History repeats itself, endlessly, because so few people study history. The stagflation of the 1970s devalued the stock of conglomerates and made it useless a currency to keep the schemes afloat. The wave crashed and waiting on the horizon for the next big wave: the LBO Masters of the 1980s. Robert Sobel was born in 1931 and died in 1999. He was a prolific chronicler of American business life, writing or editing more than 50 books and hundreds of articles and corporate profiles. He was a professor of business history at Hofstra University for 43 years and he a Ph.D. from NYU. ********* 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 ***