/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200910.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 10, 2020, Vol. 24, No. 253 Headlines 1400 NORTHSIDE: Seeks Approval to Tap Atlanta Fine Homes as Broker 670 KNABB: Seeks to Hire Barbara T. Baker as Real Estate Agent AAC HOLDINGS: Files Two-Option Bankruptcy Plan ACETO CORPORATION: Court Junks Second Amended Securities Suit ALTISOURCE PORTFOLIO: S&P Lowers ICR to 'B-'; Outlook Negative AMERICAN FORKLIFT: Case Summary & 20 Largest Unsecured Creditor APCO HOLDINGS: S&P Upgrades ICR to 'B' on Strong Second Quarter AVAYA INC: Fitch Rates $750MM Senior Secured Notes 'BB-/RR2' AVSC HOLDING: S&P Cuts ICR to CCC- on Looming Liquidity Shortfall BAY AREA CONSORTIUM: Appeals Ct. Says Claims v Alameda Time-Barred BAY CLUB OF NAPLES: U.S. Trustee Unable to Appoint Committee BEAR CREEK: Seeks Approval to Tap Richard D. Gaines as Attorney BLUE CAY: Seeks Approval to Tap Van Horn Law Group as Counsel BOARDRIDERS INC: S&P Cuts ICR to SD on Distressed Debt Transaction BON VIEW: Seeks Approval to Hire Crowley Liberatore as Attorney BUCKEYE TECHNOLOGIES: Egan-Jones Hikes Sr. Unsecured Ratings to BB BULLSHARK INC: Seeks to Hire Kutner Brinen P.C. as Attorney BURKE MOUNTAIN: Seeks to Tap Crowley Liberatore P.C. as Attorney CAESARS ENTERTAINMENT: Egan-Jones Cuts Sr. Unsec. Ratings to CCC+ CALIFORNIA RESOURCES: Boosts Stock Offering to Unsecured Creditors CALIFORNIA RESOURCES: Panel Seeks to Hire FTI as Financial Advisor CARSON CREEK: U.S. Trustee Unable to Appoint Committee CENGAGE LEARNING: S&P Lowers ICR to 'CCC+'; Outlook Negative CENTRAL GARDEN: Egan-Jones Hikes Senior Unsecured Ratings to BB- CM WIND DOWN: Egan-Jones Lowers Senior Unsecured Ratings to CCC+ CNX MIDSTREAM: S&P Alters Outlook to Stable, Affirms 'B+' ICR CNX RESOURCES: Moody's Rates Add'l. $200MM Unsecured Notes 'B3' COLOGIX HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B-' ICR COPPER BULL: Seeks Approval to Hire Amy Zagorsky as Bookkeeper CORNERSTONE BUILDING: S&P Affirms 'B+' ICR; Outlook Negative DAYSPRING ACADEMY: S&P Assigns 'BB' ICR; Outlook Stable DIFFUSION PHARMACEUTICALS: Names New President & CEO EFS COGEN I: Moody's Rates $950MM Senior Secured Term Loan B 'Ba3' ENCORE CAPITAL: Fitch Rates EUR300MM Sr. Secured Notes 'BB+(EXP)' ENCORE CAPITAL: Moody's Rates $300MM Senior Secured Notes 'Ba3' ENERPLUS CORP: Egan-Jones Lowers Senior Unsecured Ratings to BB- FIELDWOOD ENERGY: Fitch Withdraws 'D' LT IDR on Bankruptcy FILTRATION GROUP: S&P Alters Outlook to Stable, Affirms 'B' ICR FIRST CHOICE: Seeks Approval to Tap Trenam as Special Counsel FIRSTENERGY CORP: Faces Stock-Drop $60M Bribery Lawsuit FOSSIL GROUP: Egan-Jones Lowers Senior Unsecured Ratings to CC FROGNAL HOLDINGS: Bankruptcy Complicates Estate Development FUIGO LLC: Court Expunges Canon Financial's Unsecured Claim HERTZ GLOBAL: Announces Changes in Finance Leadership IAMGOLD CORP: Moody's Rates New Senior Unsecured Notes 'B2' ISTAR INC: Egan-Jones Lowers Sr. Unsecured Ratings to B+ JETBLUE AIRWAYS: S&P Revises Liquidity Assessment, Affirms 'B+' ICR KB US HOLDINGS: U.S. Trustee Appoints Creditors' Committee KC CULINARTE: S&P Lowers ICR to 'CCC' on Deteriorating Liquidity KIMBLE DEVELOPMENT: Voluntary Chapter 11 Case Summary LINCOLN COUNTY, GA: S&P Cuts 2015 Revenue Bond Rating to 'BB+' LOS ANGELES SCHOOL: Case Summary & 19 Unsecured Creditors LOUISIANA LOCAL: Moody's Review $27MM 2019 Bonds for Downgrade LS PARENT: S&P Affirms 'B' ICR on Refinancing Deal; Outlook Stable LUBY'S INC: Board Adopts Plan of Liquidation and Dissolution LVI INTERMEDIATE: Proposed Sale Draws Scrutiny of FTC MAGAZINE INCORPORACOES: Chapter 15 Case Summary MBIA INC: Egan-Jones Cuts Senior Unsecured Ratings to CCC MCGRAW-HILL EDUCATION: S&P Lowers ICR to 'CCC+'; Outlook Negative NEIMAN MARCUS: Closes Bellevue, WA Location NEOVASC INC: To Participate in H.C. Wainwright Annual Conference NOBLE CORP: Seeks Approval to Tap Baker Botts as Special Counsel NOBLE CORP: Seeks to Hire McAughan Deaver PLLC as Special Counsel NOBLE CORP: Seeks to Tap Smyser Kaplan & Veselka as Special Counsel NORDSTROM INC: S&P Downgrades ICR to 'BB+'; Outlook Negative NORTH AMERICAN LIFTING: S&P Rates $45MM DIP Term Loan 'BB' NORTHWEST HARDWOODS: Moody's Cuts CFR to 'C', Outlook Stable NPC INT'L: Committee Taps Alvarez & Marsal as Financial Advisor NRG ENERGY: Egan-Jones Lowers Senior Unsecured Ratings to BB NUSTAR LOGISTICS: Fitch Rates New Sr. Unsecured Notes 'BB-/RR4' NUSTAR LOGISTICS: Moody's Rates New Unsec. Notes Ba3, Outlook Neg. OLIN CORPORATION: Egan-Jones Lowers Senior Unsecured Ratings to B- ONEWEB GLOBAL: Plans to Invest $50M Into New Telecom Venture PAINT THE WIND: Seeks Approval to Tap Lawrence V. Young as Counsel PATRIOT WELL: Committee Seeks to Tap Foley & Lardner as Counsel PENNSYLVANIA REAL: Egan-Jones Lowers Sr. Unsecured Ratings to BB- PEYTO EXPLORATION: Egan-Jones Cuts Senior Unsecured Ratings to B+ PG&E CORP: Asks Judge to Reject Elliott's $250 Million Claim PHILADELPHIA INDUSTRIAL DEVEL: S&P Cuts Bond Rating to 'BB- (sf)' PROTOMAC 18: Seeks Damages Against Rabbinical Council & Others PUERTO DEL REY: Marina PDR Wins Summary Judgment vs Master Link QUALITYTECH LP: Moody's Hikes CFR & Sr. Unsec. Rating to Ba3 QUOTIENT LIMITED: Settles Dispute with Ortho Clinical REITMANS (CANADA): Accepted for Listing at TSX Venture Exchange REMINGTON OUTDOOR: JJE Capital's $65M Bid to Lead Sept. 17 Auction RGN-DENVER XI: Case Summary & Unsecured Creditor SHARING ECONOMY: Wong Ying Ying Quits as Independent Director SHILOH INDUSTRIES: Sept. 11 Deadline Set for Panel Questionnaires SITEONE LANDSCAPE: S&P Alters Outlook to Positive, Affirms BB- ICR SOUTHLAND ROYALTY: Ch. 11 Will Void Williams Claim Advances STERICYCLE INC: Egan-Jones Lowers FC Senior Unsecured Rating to B+ SUPERIOR ENERGY: Egan-Jones Lowers Senior Unsecured Ratings to CC SUR LA TABLE: Second Avenue Provides $35M Financing to JV SWITCH LTD: Moody's Rates $500MM Sr. Unsec. Notes Due 2028 'B1' TALLGRASS ENERGY: Fitch Lowers LT IDR to BB-, Outlook Negative TREESIDE CHARTER: Court Confirms Chapter 11 Reorganization Plan TRUCK HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B-' ICR TURBOCOMBUSTOR TECHNOLOGY: Moody's Withdraws Caa1 CFR US CONCRETE: Moody's Rates New $300MM Unsec. Notes Due 2029 'B3' USF COLLECTIONS: Case Summary & 20 Largest Unsecured Creditors VIA AIRLINES: Bought by Wexford Capital, Set for Relaunching VISTA PROPPANTS: Seeks to Tap Jackson Walker as Litigation Counsel WHITING PETROLEUM: Seeks Approval to Hire PwC as Advisor WINDSTREAM HOLDINGS: Issues $1.4-Bil. Notes for Exit Financing WRW INC: Bankruptcy Administrator Unable to Appoint Committee [*] Van Horn Law Touts First Ch.11 Subchapter V Confirmation [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 1400 NORTHSIDE: Seeks Approval to Tap Atlanta Fine Homes as Broker ------------------------------------------------------------------ 1400 Northside Drive, Inc. and its debtor affiliate, Cummins Beveridge Jones, II, seek approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Atlanta Fine Homes Sotheby's International Realty as broker. The Debtors need the assistance of the firm in connection with the marketing and sale of their approximately 785 acres of land located on Young Loop Road in the city of Fairmount, County of Pickens, Georgia for a list price of $2,747,500.00. The firm will be paid a 6% commission of the sales price. If there is a cooperating broker, that cooperating broker shall receive a 4% commission. Angela Beck and Brandon Anderson, real estate agents with Atlanta Fine Homes Sotheby's International Realty, disclosed in court filings that the firm and its employees are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Angela Beck Brandon Anderson ATLANTA FINE HOMES SOTHEBY'S INTERNATIONAL REALTY 3290 Northside Parkway NW, Suite 200 Atlanta, GA 30327 Telephone: (404) 237-5000 Facsimile: (404) 237-5001 About 1400 Northside Drive 1400 Northside Drive, Inc., owner of a male strip club known as Swinging Richards, filed a voluntary Chapter 11 petition (Bankr. N.D. Ga. Case No. 19-56846) on May 2, 2019. The case is jointly administered with the Chapter 11 case filed by Cummins Beveridge Jones II (Bankr. N.D. Ga. Case No. 19-20853), the Debtor's chief executive officer and chief financial officer. At the time of the filing, 1400 Northside Drive estimated $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Judge James R. Sacca oversees the case. Paul Reece Marr, P.C., is the Debtor's legal counsel. 670 KNABB: Seeks to Hire Barbara T. Baker as Real Estate Agent -------------------------------------------------------------- 670 Knabb, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of New York to employ Barbara T. Baker of Howard Hanna Real Estate Services as real estate agent. The Debtor requires the assistance of Ms. Baker in the listing and marketing of its five undeveloped lots located on Knabb Road, Elma, New York. The Debtor has agreed to compensate her 7% of the property's purchase price. Ms. Baker and the firm have no connections with the Debtor, its creditors or other parties-in-interest or their respective attorneys and accountants. Ms. Baker can be reached at: Barbara T. Baker HOWARD HANNA REAL ESTATE SERVICES 5462 Sheridan Drive Williamsville, NY 14221 Telephone: (716) 932-5300 About 670 Knabb 670 Knabb LLC classifies its business as single asset real estate (as defined in 11 U.S.C. Section 101(51B)). It owns five residential vacant lands and a single-family residence in Elma, N.Y., having an aggregate current value of $2.13 million. 670 Knabb sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 20-10932) on July 15, 2020. The petition was signed by Kevin Cichocki, its president. At the time of the filing, the Debtor disclosed total assets of $2,136,357 and total liabilities of $1,065,000. Judge Carl L. Bucki oversees the case. Arthur G. Baumeister, Jr., Esq., at Baumeister Denz, LLP, is the Debtor's legal counsel. AAC HOLDINGS: Files Two-Option Bankruptcy Plan ---------------------------------------------- Daniel Gill, writing for Bloomberg Law, reports that American Addiction Centers' bankrupt parent and affiliates filed a two-option reorganization plan that envisions either selling the centers to pay lenders and administrative expenses or giving lenders equity in the reorganized business. Both options intend to preserve its value as a going concern and save employees' jobs, according to the disclosure statement filed July 25 in the U.S. Bankruptcy Court for the District of Delaware. The plan was filed the same day. About AAC Holdings AAC Holdings, Inc. and its affiliates provide inpatient and outpatient substance use treatment services for individuals with drug addiction, alcohol addiction and co-occurring mental or behavioral health issues. They also provide clinical diagnostic laboratory services and provide physician services to clients. AAC Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11648) on June 20, 2020. The Debtors disclosed that they had $449.35 million in assets and $517.40 million in liabilities as of Feb. 29, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Greenberg Traurig, LLP as their bankruptcy counsel, Chipman Brown Cicero & Cole, LLP as conflicts counsel, and Cantor Fitzgerald as investment banker. Donlin, Recano & Company, Inc., is Debtors' notice, claims and balloting agent and administrative advisor. The U.S. Trustee for Regions 3 and 9 appointed a committee of unsecured creditors. The committee is represented by Cole Schotz P.C. David N. Crapo was appointed as the patient care ombudsman for the Treatment Debtors. ACETO CORPORATION: Court Junks Second Amended Securities Suit ------------------------------------------------------------- District Judge Edward R. Korman granted the Defendants' motion to dismiss the second amended class action complaint (SAC) captioned In re Aceto Corporation Securities Litigation This Document Relates to: ALL ACTIONS, Master File No. 2:18-cv-2425-ERK-AYS (E.D.N.Y). The SAC dropped Aceto Corporation as a defendant and added as defendants four more individuals who were directors or officers at Aceto during the putative class period: Albert L. Eilender, Walter J. Kaczmarek, Rebecca A. Roof, and Frances P. Scally. All seven remaining defendants moved to dismiss the SAC for failure to state a claim pursuant to FED. R. CIV. P. 9(b) and 12(b)(6), and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. sections 78u-4, et seq. During the putative class period, between August 25, 2017 and Feb 19, 2019, Aceto was engaged in the development, marketing, sale and distribution of pharmaceutical products. At the end of the Class Period, Aceto filed for Chapter 11 bankruptcy. The SAC introduced new allegations concerning Aceto's relationship with one of its suppliers, an Indian pharmaceutical manufacturer called Aurobindo Pharma Ltd. In June 2016, well before the Class Period, Aceto explained in its annual report that it was dependent on its suppliers for its ability to fulfill its customers' orders, and that its suppliers' failure to meet Aceto's needs could result in Aceto being forced to pay its customers failure-to-supply penalties. Aceto issued similar warnings to investors during the Class Period, explaining that Aceto could suffer material adverse effects from "[a]ny interruption" in its supply, such as its suppliers' lack of "ability to timely provide" the needed materials, a supplier's "quality issue," or a supplier's "unwillingness . . . to supply ingredients or other materials to" Aceto. In November 2016, Aceto acquired certain generic drug products from Citron Pharma LLC and Lucid Pharma LLC. Until that time, those products had been supplied to Citron and Lucid by Aurobindo pursuant to long-term contracts So, when Aceto acquired Citron's and Lucid's products, Aceto also entered a supply agreement with Aurobindo pursuant to which Aurobindo would supply the products to Aceto. On the day that both transactions were executed, Aceto issued a press release announcing its acquisition of Citron's and Lucid's assets, in which it noted that Citron had "manufacturing partnerships" that are "complementary" to Aceto's and that the acquisition would "expand [Aceto's] partnership networks." In a Form 8-K released at the same time, Aceto disclosed that it had entered a "supply and distribution agreement" with Aurobindo that "will govern the manufacture and supply of 78 of the 81 products" Aceto had acquired from Citron and Lucid. The next day, Aceto explained the same thing at an earnings conference, and specifically clarified that Aurobindo would be doing "all the manufacturing" for those products. Aceto stated that it thought Aurobindo is a "great manufacturer" and that the Supply Agreement would "enable supply" of the products acquired from Citron, and potentially additional ones developed later. Plaintiff alleged that, by "early in calendar year 2017," Aurobindo was in "material breach of its obligations under the Supply Agreement[]."Plaintiff alleged that, within the Class Period, between 2017 and 2018, Aurobindo's repeated failures to supply the products to Aceto, in breach of the Supply Agreement, prevented Aceto from satisfying its own supply obligations to customers, causing Aceto to owe its customers at least $13 million in failure-to-supply penalties. Beginning as early as November 2017, three months into the Class Period, Aceto made several disclosures to investors that it was having "supply challenges," and repeatedly reported supply challenges specifically for the products Aceto acquired from Citron and Lucid. It disclosed that the supply challenges were "all on the manufacturing side," and may be due to its suppliers' "potential capacity challenges." Aceto told investors that it was proactively working to address these challenges and that it was optimistic that it could do so in a timely manner. For example, in May 2018, Aceto reported to investors that it had "made significant progress" in addressing its "supply chain challenges" and "improving [its] overall inventory position," including a "50% improvement in terms of our inventory health" "with one key supplier in India that supplies most of our volume." Also in May 2018, Aceto disclosed that it incurred over $10 million in failure-to-supply penalties that were "primarily related to supply challenges with regards to products acquired from Citron and Lucid." In September 2018, Aceto disclosed that its failure-to-supply penalties had increased to $27.8 million, of which $14.8 million were "related to supply challenges with regards to products acquired from Citron." When Aceto filed for bankruptcy in February 2019, marking the end of the Class Period, it represented to the bankruptcy court that "certain supply chain challenges" forced Aceto to incur "failure to supply penalties" and were among the reasons for its insolvency. Three months later, Aceto sued Aurobindo for fraud and breach of contract. In its complaint, Aceto accused Aurobindo of having planned all along to breach the Supply Agreement in order to sabotage Aceto and steal its customers. Aceto attributed Aurobindo's breaches of the Supply Agreement to Aurobindo's lack of sufficient production capacity, and accused Aurobindo of having fraudulently induced Aceto to enter the Supply Agreement by fraudulently misleading Aceto to believe such capacity challenges would not occur. According to Judge Korman, section 10(b) of the Securities Exchange Act of 1934 prohibits the "use or employ, in connection with the purchase or sale of any security . . ., [of] any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe as necessary or appropriate in the public interest or for the protection of investors." 15 U.S.C. section 78j(b). SEC Rule 10b-5 makes it unlawful, "in connection with the purchase or sale of any security," to "make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made . . . not misleading." To prove a violation of Rule 10b-5, a plaintiff must establish: (1) a material misrepresentation or omission; (2) scienter; (3) a connection with the purchase or sale of a security; (4) reliance; (5) economic loss; and (6) loss causation. Only the first two elements are at issue, the judge says. The Plaintiff's position is that the SAC adequately pleaded that the Defendants' public disclosures omitted material information about Aceto's problem with Aurobindo, and that Defendants' duty to disclose the omitted information was so clear that their failure to do so implies scienter. The Defendants argued that their disclosures about Aurobindo were sufficiently thorough, so Plaintiff has failed to plead any material omission and has also failed to plead scienter. To determine whether scienter is adequately pled in a section 10(b) action, a court must first "accept all factual allegations in the complaint as true," and then "consider the complaint in its entirety" to determine "whether all of the facts alleged, taken collectively, give rise to a strong inference of scienter." Judge Korman stated that Plaintiff argued that Defendants had a clear duty to make additional disclosures about Aurobindo. But, ironically, the Plaintiff has not clearly explained what additional disclosures he believed Defendants had a clear duty to make. After Aceto publicly identified Aurobindo as its sole supplier of the drugs it acquired from Citron, Aceto repeatedly disclosed that its supplier for those drugs (i.e. Aurobindo) was failing to provide Aceto with sufficient supply to fill its customers' orders. Aceto even kept investors apprised of the amount of failure-to-supply penalties Aceto incurred due to Aurobindo's supply failures. Nevertheless, Plaintiff argued that the Defendants owed a "clear duty" to make additional disclosures, such as that Aurobindo was "at fault" for its failures to meet Aceto's supply needs, that such failures constituted breaches of Aurobindo's obligations under the Supply Agreement, and that Aurobindo was directly competing against Aceto for customers. The Plaintiff insisted that Defendants' omission of these details prevented investors from understanding the "scope and magnitude" of the problem. Defendants argued that the Plaintiff has failed to explain how the so-called omissions were even material, let alone so clearly material as to imply scienter. The Defendants argued that their disclosures about the problem with Aurobindo, as sufficiently alleged in the SAC, were duly candid and thorough. They further argue the SAC fails to allege that the Aceto's dispute with Aurobindo did not escalate during the Class Period to a level requiring Defendants to publicly disclose impending litigation with Aurobindo or that its relationship with Aurobindo was coming to an end. Judge Korman agreed with Defendants that in light of the disclosures Aceto made throughout the Class Period about its problem with Aurobindo -- not to speak of its disclosures of its other major financial problems -- any duty to disclose the omitted additional information about Aurobindo was not clear. The Defendants could have reasonably assumed that what was material to investors was the fact that Aurobindo was failing to meet Aceto's supply needs, which was preventing Aceto from filling its customers' orders and was forcing Aceto to pay penalties to those customers. It was not clear that investors would have been interested in further details, such as the legal issue of whether or not Aurobindo's failures to meet Aceto's supply needs amounted to breaches of the Supply Agreement. Accordingly, Defendants' failure to disclose that Aurobindo was in breach of the Supply Agreement and the other information Plaintiffs fault them for omitting does not produce a strong enough inference of recklessness to survive the Defendants' motion to dismiss. In sum, the caselaw does not suggest Defendants owed investors a duty to make additional disclosures about the Aurobindo problem that was clear enough to imply scienter. A copy of the Court's Memorandum and Order dated August 3, 2020 is available at https://bit.ly/32fPWZR from Leagle.com. About Aceto Corporation ACETO Corporation (NASDAQ: ACET), incorporated in 1947, is focused on the global marketing, sale and distribution of Human Health products (finished dosage form generics and nutraceutical products), Pharmaceutical Ingredients (pharmaceutical intermediates and active pharmaceutical ingredients) and Performance Chemicals (specialty chemicals and agricultural protection products). With business operations in nine countries, ACETO distributes over 1,100 chemical compounds used principally as finished products or raw materials in the pharmaceutical, nutraceutical, agricultural, coatings, and industrial chemical industries. ACETO's global operations, including a staff of 25 in China and 12 in India, are distinctive in the industry and enable its worldwide sourcing and regulatory capabilities. Aceto Corporation and eight affiliates sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 19-13448) on Feb. 19, 2019. ACETO disclosed assets of $753,159,000 and liabilities of $702,848,000 as of Dec. 31, 2018. The Hon. Vincent F. Papalia is the case judge. The Debtors tapped Lowenstein Sandler LLP as counsel; Simmons & Simmons as foreign counsel; PJT Partners LP as an investment banker and financial advisor; AP Services LLC as restructuring advisor; and Prime Clerk LLC as claims and noticing agent. The U.S. Trustee, on Feb. 28, 2019, appointed five members to the official committee of unsecured creditors. Counsel for the Committee is Stroock & Stroock & Lavan LLP and Porzio, Bromberg & Newman, P.C. Houlihan Lokey Capital, Inc., is the Committee's investment banker. GlassRatner Advisory & Capital Group, LLC, as its financial advisor. ALTISOURCE PORTFOLIO: S&P Lowers ICR to 'B-'; Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Altisource Portfolio Solutions S.A. to 'B-' from 'B'. The outlook is negative. S&P also lowered its rating on the company's senior secured notes to 'B-' from 'B'. The recovery rating on the senior secured notes is '4', reflecting S&P's expectation of a modest recovery (30%) in a hypothetical default scenario. The rating action follows an investor instructing Ocwen to transfer certain field services and default-related service referrals to other providers starting in July 2020. Altisource estimated that it derived $78.8 million of service revenue from these sources for the six months ended June 30, 2020, which was 36.3% of total service revenue. Given debt to adjusted EBITDA was already 3.9x at year-end 2019 (before the pandemic), S&P believes the anticipated loss of revenue will lead to leverage being sustained well over 4x, its previously cited threshold for a downgrade. Notwithstanding the above, S&P still believes Altisource holds sufficient liquidity for the current stress period. While foreclosure and eviction moratoriums will likely continue to weigh on operating performance, S&P believes Altisource's cost-cutting initiatives and $68.2 million of cash should be sufficient to cover any liquidity outflows over the next 12 months. Furthermore, the company's mostly countercyclical business model could benefit from increases in delinquencies or foreclosures after forbearance options are exhausted. The negative outlook on Altisource over the next 12 months reflects S&P's view that the moratorium on foreclosures as a result of the COVID-19 pandemic could further weigh on the company's operations. It also reflects the potential for additional unforeseen events, such as another material change to Altisource's relationship with a significant customer, which could jeopardize a large portion of revenue. "We could lower the ratings over the next 12 months if we expect any future events to weigh on Altisource's operating results such that EBITDA interest coverage could be sustained under 1.5x. We could also lower the ratings if the company's liquidity position deteriorates," S&P said. "We could revise the outlook to stable if operating performance stabilizes and we have greater visibility into the company's ability to sustain debt to EBITDA between 4.0x and 5.0x," the rating agency said. AMERICAN FORKLIFT: Case Summary & 20 Largest Unsecured Creditor --------------------------------------------------------------- Debtor: American Forklift Rental & Supply, LLC 5387 LB McLeod Road Orlando, FL 32811 Business Description: American Forklift Rental & Supply, LLC -- https://www.americanforkliftrental.com -- specializes in forklift rentals for the Central Florida area including Orlando, Tampa, Lakeland, Orange County, Polk County, Lake County, and surrounding areas. American Forklift Rental also offers new and used sales on a wide variety of forklifts. Chapter 11 Petition Date: September 8, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-05046 Debtor's Counsel: Melissa Youngman, Esq. MELISSA YOUNGMAN, PA 721 Maitland Avenue Altamonte Springs, FL 32701 Tel: 407-374-1372 Email: my@melissayoungman.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph Garcia, Jr., managing member. A full-text 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://www.pacermonitor.com/view/T26B5RA/American_Forklift_Rental__Supply__flmbke-20-05046__0001.0.pdf?mcid=tGE4TAMA APCO HOLDINGS: S&P Upgrades ICR to 'B' on Strong Second Quarter --------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on APCO Holdings LLC to 'B' from 'B-' and revised the outlook to negative from creditwatch with negative implications. At the same time, S&P raised its rating on APCO's $240 million first-lien credit facility ($20 million revolver due 2023 and $220 million term loan due 2025) to 'B' from 'B-'. The recovery rating remains at '3', indicating S&P's expectation that lenders would receive meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. The upgrade reflects S&P's expectation that APCO's adjusted leverage will remain below 6x with an EBITDA of $48 million-$53 million for the next 12-24 months. S&P attributes APCO's resilience in the second quarter to better-than-expected light vehicle sales with higher attachment points, more favorable product mix with a higher proportion of VSCs, an asset sale, expense actions taken to limit cash flows, and stronger profit-sharing benefits from lower driving activity and fewer servicing requests. S&P believes these actions have eliminated liquidity and covenant pressures on the company early in the second quarter, when it drew down on the revolver to ensure it could support expected negative margin during the pandemic. As of the second quarter, leverage was 5.2x relative to 5.5x at year-end. Covenant cushion on the company's 7.0x financial maintenance covenant was almost 45%. Although the company is on pace to achieve record levels of EBITDA in 2020, the outlook is negative as there still remains risk for the business due to lower levels of profit-sharing (up to 50%-60% lower than what is expected in 2020), lower production levels during the pandemic, and the re-introduction of costs taken out of the business in the second quarter, moderating margin levels on a lower revenue base. Additional risks include the potential of a second wave of COVID-19, business failure from an extended shutdown, and prolonged lower light vehicle sale levels due to reduced dealer incentives and continued macroeconomic pressures. "The negative outlook reflects our view that the COVID-19 pandemic has hurt the auto warranty segment production and will create uncertainty around light vehicle sales and warranty administration volume as well as profit-sharing benefits that could help APCO's EBITDA through 2020-2021," S&P said. S&P could downgrade the company in the next 12 months if this rebound is weaker or the downturn lasts longer than the rating agency expected. Some indications of this could include APCO's debt-to-EBITDA ratio rising above 7x and its coverage deteriorating to below 2x, indicating sustained pressures on servicing obligations; or its liquidity profile deteriorating further from levels that S&P currently views as adequate. "We could revise the outlook to stable at any point within the next twelve months if continued performance momentum and macro considerations reduce uncertainty on the company's ability to maintain leverage below 7x and coverage above 2x. This may happen if the company is able to sustain normal levels of profit-sharing benefits, light vehicle sales stabilize or rebound quicker than anticipated or margin levels remain elevated from historical levels," the rating agency said. AVAYA INC: Fitch Rates $750MM Senior Secured Notes 'BB-/RR2' ------------------------------------------------------------ Fitch Ratings has assigned a 'BB-'/'RR2' rating to Avaya Inc.'s issuance of $750 million of senior secured notes due 2028. Proceeds from the notes will be used to partially repay the company's senior secured term loan due 2024, as well as related fees, costs and expenses. The company's Long- Term Issuer Default Rating (IDR) is 'B' and the Rating Outlook is Stable. KEY RATING DRIVERS RingCentral Strategic Partnership: On Oct. 31, 2019, Avaya closed on a strategic partnership with RingCentral Inc., a provider of global enterprise cloud communications, collaboration and contact center (CC) solutions. Avaya's transition to the cloud will be accelerated by the strategic partnership. The partnership is in the form of a commercial arrangement and not a joint venture. Through the partnership, on March 31, Avaya introduced Avaya Cloud Ofﬁce by RingCentral (or ACO), a uniﬁed communications as a service (UCaaS) solution. For Avaya, this offering ﬁlls a gap in their offerings, as it completes a suite of uniﬁed communications (UC), CC, UCaaS, contact center as a service (CCaaS) and communications platform as a service (CPaaS) solution on a global basis. As a part of the agreement, RingCentral paid Avaya $375 million, mostly for future fees, and for certain licensing rights. The payment consisted of $361 million in RingCentral common stock valued as of Oct. 31, 2019, and $14 million in cash. Avaya and RingCentral entered into an investment agreement whereby RingCentral also purchased 125 million shares of Avaya's 3% Series A convertible preferred stock for a total of $125 million. Avaya sold a signiﬁcant portion of the RingCentral shares on Nov. 12, 2019 in an underwritten offering, realizing gains of $11 million. Using the proceeds from the common stock and preferred sales, Avaya prepaid $250 million of its term loan in November, and over its ﬁrst two ﬁscal quarters ending March 31, 2020, repurchased $330 million of common stock, or 26% of the shares outstanding relative to November 2019. The company did not repurchase any shares in 3Q20. Effect of Coronavirus Pandemic: Fitch believes Avaya operates in a low-risk sector, given its offerings of communications products, solutions and services. The company enabled its workforce to work remotely to a signiﬁcant extent, and has been able to support its customers by providing services remotely instead of on-site. The company also implemented cost-saving and cash-management plans to reduce the impact of the coronavirus on its business and liquidity position. As one step to maintain its liquidity, the company suspended share repurchases, even though it has not used its full authorization. The company also borrowed $50 million under its asset-based loan (ABL) as a precautionary measure, but repaid such borrowings at the end of July. The shift to remote working could provide a beneﬁt to future demand for the company's products and services. The company provided over 2 million temporary software licenses free of charge to companies globally to enable their employees to work remotely. This initiative could lead to future revenue opportunities. Market Position Evolving: Fitch's existing IDR reﬂects the company's historically strong market position as a top-three provider in target markets, and an improved credit proﬁle with signiﬁcantly reduced interest expense and pension obligations upon emergence from Chapter 11 in late 2017. The ratings are limited by the competitiveness of the UC and CC businesses, including cloud-based solutions. The development and expansion of cloud-based offerings are crucial to the company's growth, including ACO. The partnership with RingCentral enables the company to focus its investments on CCaaS, CPaaS, collaboration and private cloud. Leverage Higher than Expected: Fitch estimates gross leverage and net leverage will be 4.9x and 3.7x, respectively, at the end of ﬁscal 2020, in a range appropriate for the current rating. Fitch assumes Avaya may carry more cash than normal (well into ﬁscal 2021) due to the uncertainty of the coronavirus pandemic. FCF Generation: Avaya's FCF metrics are affected by the accounting for the consideration advance, or prepayment, received from RingCentral in the form of RingCentral's common stock. At the close of the transaction, Avaya recorded $375 million in contract liabilities. Over time, the company will recognize revenues and reduce contract liabilities as seats are sold under the agreement and Avaya performs support services. The prepayment and subsequent recording of revenue by a reduction in contract liabilities will have a negative effect on working capital. Normalized for the accounting treatment, Fitch estimates aggregate FCF could be at the high end of a range from $150 million to $200 million over ﬁscal 2020-2022. Through ﬁscal 2Q20, Avaya received $412 million in cash, recorded in investing activities, due to the sale of stock received as a prepayment. Revenue from Software and Services: Software and services accounted for approximately 89% of revenue in ﬁscal 3Q20. Relatively stable software sales mitigate the effects of the legacy revenue declines within the UC segment. Avaya generated approximately 64% of total revenues from recurring contracts in ﬁscal 3Q20, up from 58% in ﬁscal 2019. Recurring support services contracts generally have contract tenures of one to ﬁve years; private cloud and managed services contract terms range from one to seven years. Broad Distribution Network: Avaya's indirect channel, with more than 4,000 active channel partners at the end of ﬁscal 2019, extends the company's sales reach to about 175 countries worldwide. Diversiﬁed Revenue Base: Avaya's revenue base is diversiﬁed from a customer, geographic and industry perspective. Avaya had more than 100,000 customers at the end of ﬁscal 2019, including 90% of the Fortune 100 companies. Approximately 46% of total revenue is generated outside the U.S. DERIVATION SUMMARY The global UC industry historically exhibited moderate concentration with the top three vendors -- Cisco Systems, Inc.; Avaya; and Microsoft Corporation (AA+/Stable) -- likely having more than a 50% combined market share, while additional competitors including Alcatel-Lucent Enterprise (ALE, subsidiary of China Huaxin Post and Telecom Technologies Co., Limited) and Mitel Networks Corp. maintain smaller shares. Recent trends, such as the entry of cloud-based competitors and hardware product commoditization, presented signiﬁcant challenges to these legacy UC vendors. ALE's parent China Huaxin put limited resources into ALE since acquiring the business in 2014, making the long-term future uncertain. Microsoft is largely insulated from these pressures, having pursued a differentiated approach that centers on integration of third-party UC hardware into the company's enterprise software offerings. The CC market is similarly dominated by the leading vendors, including Avaya, Cisco and Genesys Telecommunications Laboratories Inc., which maintained a combined market share of more than 50%. Mitel is a notable smaller vendor. The CC market was also disrupted by emerging trends, including closer integration of contact center functionality with CRM functions and the entry of cloud-based competitors. In contrast to the UC market, legacy CC vendors have thus far been able to avoid revenue pressure, as enterprise customers continue to prefer traditional on-premise solutions. However, cloud-based offerings generated strong growth in SME and midmarket segments, and are gradually beginning to penetrate enterprise clients. The leading vendors made acquisitions in the cloud CC space, including Avaya's acquisition of Spoken Communications Inc., Cisco (Broadsoft, Inc.), Genesys (Interactive Intelligence Group Inc.) and Mitel's acquisition of ShoreTel, Inc. Avaya's primarily on-premise offerings allowed the company to maintain a relatively strong position among large enterprises. The company's cloud offering is in the early stages of growth. However, the company's results could be pressured if more seasoned cloud providers successfully penetrate enterprise segments. The company is addressing its cloud product portfolio through organic investment and the acquisition of Spoken in March 2018. Avaya's ratings reﬂect the company's historically strong market position as a top three provider in target markets in addition to an improved credit proﬁle with signiﬁcantly reduced interest expense and pension obligations upon emergence from Chapter 11. The ratings are limited by secular challenges, near-ﬂat revenues (albeit relatively stable after previously more rapid revenue declines) and market share loss in the UC segment, and uncertainties in the CC segment growth given its developing cloud strategy. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include: -- Revenue declines in the low single digits in ﬁscal 2020, and returns to modest low single digit growth in ﬁscal 2021 as the Avaya Cloud Ofﬁce offering gains momentum. Growth approximates 3% annually thereafter. -- EBITDA margin range of 23%-24%; with margins higher in the out years due to the improved proﬁtability of ACO relative to premise seat revenue. -- Capital intensity of 3%-4% due to investment in infrastructure for private cloud offerings. -- Fitch forecasts future debt repayments, beginning in ﬁscal 2021, to manage leverage toward the company's 2.5x net leverage target. Recovery Rating (RR) Assumptions: The recovery analysis assumes Avaya's enterprise value is maximized in a going-concern scenario versus liquidation. Fitch contemplates a scenario in which default may be caused by disappointing sales of the company's on-premise CC offering, along with continued secular pressure in UC. Additionally, while the strategic partnership with RingCentral is successful, ACO sales are lower than expected, and the company overall realizes lower revenue than expected in the transitions to subscription software sales and EBITDA margin pressure. Under this scenario, Fitch estimates a going-concern EBITDA of $535 million, which is approximately 30% below Fitch-calculated EBITDA for ﬁscal 2017, which was just prior to its exit from bankruptcy in December 2017. Fitch assumes Avaya will receive a going-concern recovery multiple of 5.5x EBITDA under this scenario. The 5.5x multiple compares with the bankruptcy exit multiple for Avaya of 8.1x, and the median multiple of 8.4x for recent transactions for low- to moderate-growth enterprise communications companies in the 8x-9x range, including ShoreTel, West Corp. (now Intrado Corporation), Polycom, Inc. and ALE's enterprise business, among others. The multiple is also modestly higher than the 5.0x Fitch used in previous analyses, given ACO's potential to improve Avaya's results. Fitch assumes the $300 million secured ABL (the size of the facility as of June 30, 2020) is to be fully drawn at the time of default and a 10% administrative claim through a restructuring. Fitch-forecast going-concern EBITDA of $535 million and recovery multiple of 5.5x results in a post-reorganization enterprise value of $2.65 billion after the deduction of expected administrative claims and the assumed ABL drawn amount, resulting in 89% recovery for the $2.62 billion ﬁrst-lien senior secured term loan, which allows for notching of +2 from the IDR of 'B' to 'RR2'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Improvement in the outlook for company revenues, including positive revenue growth, expansion of margins due to continued cost-reduction efforts and success in newer market areas, including cloud services; -- Strong FCF with FCF margins in the low double digits; -- Gross debt leverage sustainable below 4.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continued deterioration in revenue expectations beyond the forecast horizon, combined with margin pressure; -- Gross debt leverage sustained above 5.5x. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch believes Avaya has solid liquidity based on the $742 million cash balance as of June 30, 2020 ($256 million was held outside the U.S.). Avaya indicates the amounts in excess of in-country needs that could be subject to restrictions were not material. Liquidity is also supported by an undrawn $300 million ABL facility in place as of June 30, 2020. Avaya had $72 million of availability on the facility, as determined by the borrowing base, less borrowings of $50 million and $41 million of outstanding LOCs and guarantees. The debt structure prior to the repayment arising from the current transaction, in addition to the ABL facility, includes a $2.624 billion ﬁrst-lien term loan ($2.925 original amount) that matures in December 2024. Owing to a $250 million prepayment in November 2019 due to the sale of RingCentral common stock, Fitch believes there will be no further amortization payments on the term loan prior to maturity under the credit agreement. The parent also has outstanding $350 million in 2.25% senior unsecured convertible notes due in June 2023. Avaya sold a signiﬁcant portion of the RingCentral shares in an underwritten offering on Nov. 12, 2019, realizing gains of $11 million. Using the proceeds from the common stock and preferred sales, Avaya prepaid $250 million of its term loan in November, and over its ﬁrst two ﬁscal quarters ending March 31, 2020, repurchased $330 million of common stock, or 26% of the shares outstanding relative to November 2019, under a $500 million share-repurchase program initiated in conjunction with the strategic partnership with RingCentral. This fell within their 4Q19 guidance of 25%-28% of outstanding common shares. The company stated for now it will retain cash due to the coronavirus pandemic. 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). AVSC HOLDING: S&P Cuts ICR to CCC- on Looming Liquidity Shortfall ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on AVSC Holding Corp. to 'CCC-' from 'CCC', its issue-level rating on the company's first-lien debt to 'CCC-' from 'CCC', and its issue-level rating on the company's second-lien debt to 'C' from 'CC'. S&P's recovery ratings are unchanged. Despite AVSC's aggressive cost management actions, S&P believes its negative cash flow generation will deplete its liquidity sources in the next six months. The company reduced its variable costs from revenue-based commissions, direct labor tied to its revenue services, and supplies, travel and entertainment, and freight expenses. In addition, it temporarily reduced some fixed costs in its selling, general, and administrative (SG&A) functions through furloughs and restructuring programs. "While these cost-management initiatives are substantial, we believe they will be insufficient to offset its minimal revenue generation, which we believe will last for most of 2020 and into 2021. Absent outside sources of capital, we expect AVSC's stranded operating costs--combined with debt interest costs, debt amortization payments, capital expenditure (capex), and working capital uses--to deplete its liquidity in the next six months and lead to a payment default or an in- or out-of-court restructuring," S&P said. S&P doesn't expect any material corporate events supported by AVSC to be held in 2020 due to the COVID-19 pandemic, and new event bookings to pick up slowly in 2021. Hotel and convention center based corporate and group events ground to a halt since the beginning of the COVID-19 pandemic in the U.S. Accordingly, AVSC's revenue declined substantially because demand for its audiovisual services is directly tied to such events. "While certain parts of the U.S. economy are attempting to reopen, we believe recovery in group-based events in hotels, the primary source of AVSC's revenue, will materially lag the rest of the travel and hotel industry," S&P said. "Consequently, we expect minimal revenue in the third and fourth quarters of 2020 before slowly recovering in 2021. Specifically, we forecast a 65%-75% decline in AVSC's total reported revenue for 2020. While we expect revenue to rebound in 2021, we believe growth in the first half will be well below our prior expectations," the rating agency said. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook reflects the risk AVSC could default on its debt obligations or pursue restructuring without unforeseen positive developments. "We could lower the rating if the company defaults on its debt obligations or pursues restructuring," S&P said. "We could raise our rating on AVSC if we believe it will manage its operating costs, working capital, and liquidity such that we do not believe a default is likely over the next six months. This would most likely occur if the company receives an external source of funding and liquidity injection through a debt or equity offering," the rating agency said. BAY AREA CONSORTIUM: Appeals Ct. Says Claims v Alameda Time-Barred ------------------------------------------------------------------ In the case captioned BAY AREA CONSORTIUM FOR QUALITY HEALTHCARE, Plaintiff and Appellant, v. ALAMEDA COUNTY, Defendant and Respondent, No. A157789 (Cal. App.), the California Court of Appeals affirms the trial court's order sustaining, without leave to amend, the demurrer of respondent Alameda County to the third amended complaint (TAC) filed by Bay Area Consortium for Quality Healthcare for damages. Among others, the TAC alleges the County had not fully paid BAC for health care services it had provided to indigent patients in Alameda County between 2000 and 2008 pursuant to contracts with the County. From 1999 to 2008, BAC, a community not-for-profit health and social services agency, provided health care services for indigent and Medicaid-based patients under California's Department of Human Services' targeted case management (TCM) program, which was administered by the County. The County failed to accurately pay BAC for those services under contracts between the parties from 1999 to 2008, and ultimately terminated BAC's contract, ostensibly for nonperformance or failure to meet the contract requirements. The value of the services BAC provided exceeded $2.8 million for the period of July 1, 2002 to June 30, 2008, as indicated in a financial audit report completed by the California Financial Audits Unit (audits unit) in 2010, which was made known to BAC in 2011. On March 23, 2015, BAC commenced this action against the County and Alameda Alliance for breach of contract and common counts based on the alleged failure to pay BAC for the health care services its employees provided to indigent patients in Alameda County. On July 30, 2015, BAC filed a first amended complaint against both defendants, alleging nine causes of action. On Jan. 7, 2016, the County filed a motion for judgment on the pleadings, which the trial court granted without leave to amend on Feb. 2, 2016. BAC appealed that order and on May 9, 2018, a panel of the California Court of Appeals, Second Division held, inter alia, that: (1) BAC had alleged facts bringing it within the exemption for the claim filing requirement of the Government Claims Act (Gov. Code, section 905, subd. (e)); (2) "[a]lthough it is less than clear which particular contract or contracts . . . BAC contends [the] County has breached," BAC appeared to have stated a claim for breach of contract; and (3) the trial court abused its discretion when it granted the motion for judgment on the pleadings without leave to amend as to causes of action for breach of the covenant of good faith and fair dealing and common counts. The Appeals Court, therefore, reversed the judgment as to the causes of action for breach of contract, breach of the covenant of good faith and fair dealing, and common counts, and remanded the matter to the trial court with directions to give BAC the opportunity to amend its complaint to plead its excuse for failure to comply with the Government Claims Act and to amend its causes of action for breach of the covenant of good faith and fair dealing and common counts. On Sept. 6, 2018, BAC filed its TAC, which included three causes of action against both the County and Alameda Alliance for breach of contract, breach of the covenant of good faith and fair dealing, and common counts. On Oct. 10, 2018, the County filed a demurrer to the TAC on the grounds that (1) BAC failed to timely file the TAC after the clerk of this court mailed the notice of remittitur, pursuant to Government Code section 472b; (2) all causes of action were barred by the relevant statute of limitations; (3) the third cause of action for common counts failed to state facts sufficient to constitute a cause of action because the County was protected by the doctrine of Sovereign Immunity; and (4) the second and third causes of action, for breach of the covenant of good faith and fair dealing and common counts, failed to state facts sufficient to constitute these causes of action because they sought the same relief as the breach of contract cause of action. On June 13, 2019, the trial court sustained the County's demurrer without leave to amend and dismissed the TAC with prejudice, as to the County only. The court based its ruling solely on BAC's failure to file its TAC within 30 days after the clerk of this court mailed notice of issuance of the remittitur, which violated section 472b. On appeal, BAC contends the court erred when it sustained the demurrer without leave to amend on the ground that the TAC was not filed within the required time period set forth in Code of Civil Procedure section 472b1 for filing an amended complaint after reversal on appeal of an order sustaining a demurrer without leave to amend. Although the trial court based its ruling solely on the timeliness of the filing of the TAC, BAC further contends the court erred in sustaining the demurrer because the TAC stated facts sufficient to constitute any of the three causes of action alleged against the County. The Appeals Court concludes that the demurrer was properly sustained without leave to amend because all causes of action BAC has alleged against the County in the TAC were barred by the applicable statute of limitations. Although BAC does not discuss in its briefing which statutes of limitations apply to the causes of action raised in its TAC, it does not dispute the County's statement that the statute of limitations for each of the three causes of action is four years, given that each cause of action is based on the County's purported breach of a written contract. Rather, BAC's argument on this issue in its opening brief consists of the following three sentences: "The statute of limitations does not bar BAC's claims. Paragraphs 14 [to] 22 show that on Oct. 28, 2011, BAC became aware of [the County's] refusal to pay its bills. Therefore, the statute of limitations for BAC's claims began to run on that day and BAC's claims are timely." To the extent that this statement that BAC "became aware of" the County's "refusal to pay its bills" on Oct. 28, 2011 can be construed as an argument that the discovery rule applies here, the Appeals Court concludes, based on the facts pleaded in the TAC, that such an argument is without merit. According to the Appeals Court, BAC's own factual allegations in the TAC show that by 2008, more than four years before it commenced this action in 2015, it discovered or had reason to discover its claims against the County for the alleged failure to fully pay for contracted health services provided between 2000 and 2008. The causes of action alleged against the County in the TAC are therefore time-barred. Moreover, considering all of the factual allegations in the TAC, the Appeals Court also finds BAC has not shown a reasonable possibility that it could amend its complaint to state causes of action not barred by the applicable statute of limitations. A copy of the Court's Decision dated July 28, 2020 is available at https://bit.ly/2DXMdrs from Leagle.com. Nonprofit Bay Area Consortium for Quality Health Care, dba Berkeley Health Center for Women & Men, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Case No. 14-43243) on Aug. 4, 2014. BAY CLUB OF NAPLES: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of The Bay Club of Naples LLC, according to court dockets. About The Bay Club of Naples The Bay Club of Naples, LLC is a Naples, Fla.-based company engaged in the business of real estate development. The Bay Club of Naples and its affiliate, The Bay Club of Naples II, LLC, concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-05008) on June 29, 2020. Harry M. Zea, manager, signed the petition. At the time of the filing, each Debtor disclosed estimated assets of $10 million to $50 million and estimated liabilities of the same range. Debtors have tapped Underwood Murray, P.A. as their bankruptcy counsel. Becker & Poliakoff, P.A. and Genovese Joblove & Battista, P.A. serve as Debtors' special counsel. BEAR CREEK: Seeks Approval to Tap Richard D. Gaines as Attorney --------------------------------------------------------------- Bear Creek Trail, LLC seeks approval from the U.S. Bankruptcy Court for the District of Wyoming to employ Richard D. Gaines as its attorney. The Debtor desires to employ Mr. Gaines to represent the Debtor in a litigation that was removed from the First Judicial District Court for the State of Wyoming to the Federal District Court of Wyoming. Mr. Gaines will be paid at his rate of $350 per hour. He will charge $70 per hour for paralegal staff. He will also seek reimbursement for out-of-pocket expenses incurred in connection with this representation. To the best of the Debtor's knowledge, the attorney has no adverse connections with the estate as attorney for the estate or attorney for the Debtor, no connections with the creditors or any other party-in-interest or their respective attorneys and accountants, the United States Trustee nor any employee of the United States Trustee. The attorney can be reached at: Richard D. Gaines, Esq. LAW OFFICES OF RICHARD D. GAINES PO Box 943 102 Sugarberry Lane Greentown, PA 18426-0943 Telephone: (570) 857-0180 Facsimile: (570) 857-0181 E-mail: rdenisgaines@earthlink.net About Bear Creek Trail Bear Creek Trail, LLC is a Cheyenne, Wyo.-based company whose primary asset is a vessel located on the east cost of the United States. Bear Creek Trail sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No. 20-20348) on July 20, 2020. The petition was signed by Marvin Keith, president, Elk Mountain, Inc., the Debtor's owner and CEO of Bear Trail, LLC. At the time of the filing, the Debtor disclosed total assets of $615,000 and total liabilities of $1,719,947. Judge Cathleen D. Parker oversees the case. Ken McCartney, Esq., at The Law Offices of Ken McCartney, P.C., is the Debtor's legal counsel. BLUE CAY: Seeks Approval to Tap Van Horn Law Group as Counsel ------------------------------------------------------------- Blue Cay, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Van Horn Law Group, P.A. and its regular associates as counsel. The firm will render these legal services to the Debtor: (a) give advice to the Debtor with respect to its powers and duties as a debtor-in-possession and the continued management of its business operations; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; (d) protect the interest of the Debtor in all matters pending before the court; and (e) represent the Debtor in negotiation with its creditors in the preparation of a plan. The firm's hourly rates are below: Chad Van Horn, Esq. $450 Associates $350 Jay Molluso $250 Law Clerks $175 Paralegals $175 The firm will require an initial retainer in the amount of $5,000.00, plus a filing fee of $1,717.00, before undertaking any work in connection with this engagement. Chad Van Horn, a founding partner of Van Horn Law Group, P.A., and Melissa Goolsarran Ramnauth, a regular associate of Van Horn Law Group, P.A., disclosed in court filings that the firm and its employees are "disinterested persons" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Chad Van Horn, Esq. VAN HORN LAW GROUP, P.A. 330 N. Andrews Ave., Suite 450 Fort Lauderdale, FL 33301 Telephone: (954) 765-3166 E-mail: Chad@cvhlawgroup.com About Blue Cay Blue Cay, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-18877) on August 18, 2020, listing under $1 million in both assets and liabilities. Judge Mindy A. Mora oversees the case. Van Horn Law Group, P.A., led by Chad Van Horn, Esq., is the Debtor's legal counsel. BOARDRIDERS INC: S&P Cuts ICR to SD on Distressed Debt Transaction ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S. action sports apparel company Boardriders Inc. to 'SD' (selective default) from 'CCC+' and its issue-level rating on the company's term loan to 'D' from 'CCC+'. The downgrade reflects S&P's view that the recent transaction completed by Boardriders to provide needed liquidity and fund an operational turnaround is tantamount to a default because the company is distressed and the original lenders are now in a disadvantaged position. Boardriders Inc. recently issued $155 million of new money debt, including: -- $65 million contributed by Boardriders' financial sponsor owner, Oaktree, consisting of a $45 million initial term loan and a $20 million delayed draw term loan (currently undrawn); -- $45 million contributed by other existing lenders; and -- $45 million via a facility backed by a European government. Boardriders is using the proceeds from the new debt to repay asset-based loan revolver borrowings, pay transaction fees, and put cash on the balance sheet to help fund operations. It also issued $492 million of preferred stock as additional compensation to lenders who contributed new money. The company allowed existing lenders who contributed new money to roll up their original term loan positions into new tranches of term loan debt that rank pari passu with the new money facilities. These new facilities all rank senior to the remaining balance of the existing term loan, which is held by lenders who did not participate in the transaction. "We view this transaction as tantamount to a default on the existing term loan because the company's operations are distressed and its lenders who did not participate in the transaction are now in a disadvantaged collateral position relative to the new debt. This indicates to us that they will receive less than what they were originally promised, without receiving adequate offsetting compensation," S&P said. "We expect to reevaluate our ratings on Boardriders and the company's debt in the near term. We will likely raise our issuer credit rating on Boardriders to the 'CCC' category, given its still-unsustainable debt leverage, high debt service commitments, and our view that the company will likely have difficulty generating consistently positive free cash flow before its next significant debt maturity in 2023," the rating agency said. BON VIEW: Seeks Approval to Hire Crowley Liberatore as Attorney --------------------------------------------------------------- Bon View Developers, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Crowley Liberatore P.C. as its attorney. The firm will render these legal services to the Debtor: (a) prepare the petition, lists, schedules and statements required by 11 U.S.C. Sec. 521; the pleadings, motions, notices and orders required for the orderly administration of the estate and to ensure the progress of this case; and to consult with and advise the Debtor in the reorganization of its financial affairs. (b) prepare for, prosecute, defend, and represent the Debtor's interest in all contested matters, adversary proceedings, and other motions and applications arising under, arising in, or related to this case. (c) advise and consult concerning administration of the estate in this case, concerning the rights and remedies with regard to the Debtor's assets; concerning the claims of administrative, secured, priority, and unsecured creditors and other parties-in-interest. (d) investigate the existence of other assets of the estate; and, if any exist, to take appropriate action to have the same turned over to the estate. (e) prepare a Disclosure Statement and Plan of Reorganization for the Debtor, and negotiate with all creditors and parties-in-interest who may be affected thereby; to obtain confirmation of a Plan, and perform all acts reasonably calculated to permit the Debtor to perform such acts and consummate a Plan. The firm will seek compensation for professionals and paraprofessionals based upon their hourly rates, plus out-of-pocket expenses. The firm received a total of $25,914.00 from Ray Hollowell, Jr., the manager of Bon View Development, LLC and Burke Mountain Southeast, LLC. The firm holds a balance of $15,375.00 retainer after deducting pre-petition invoices of $7,105.00 and filing fees of $3,434.00. Karen M. Crowley, a member of Crowley Liberatore P.C., disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Karen M. Crowley, Esq. CROWLEY LIBERATORE P.C. 150 Boush Street, Suite 604 Norfolk, VA 23510 Telephone: (757) 333-4500 Facsimile: (757) 333-4501 E-mail: kcrowley@clrbfirm.com About Bon View Developers Bon View Developers, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 20-33634) on August 27, 2020. Crowley Liberatore P.C. is the Debtor's legal counsel. BUCKEYE TECHNOLOGIES: Egan-Jones Hikes Sr. Unsecured Ratings to BB ------------------------------------------------------------------ Egan-Jones Ratings Company, on September 4, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Buckeye Technologies Inc. to BB from BB-. Headquartered in Memphis, Tennessee, Buckeye Technologies Inc. manufactures and markets specialty cellulose and absorbent products. BULLSHARK INC: Seeks to Hire Kutner Brinen P.C. as Attorney ----------------------------------------------------------- BullShark, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ Kutner Brinen, P.C. as its attorneys. The firm will render these professional services to the Debtor: (a) provide the Debtor with legal advice with respect to its powers and duties; (b) aid the Debtor in the development of a plan of reorganization under Chapter 11; (c) file the necessary petitions, pleadings, reports, and actions that may be required in the continued administration of the Debtor's property under Chapter 11; (d) take necessary actions to enjoin and stay until a final decree herein the continuation of pending proceedings and to enjoin and stay until a final decree herein the commencement of lien foreclosure proceedings and all matters as may be provided under 11 U.S.C. Sec. 362; and (e) perform all other legal services for the Debtor that may be necessary herein. The firm received payment for pre-petition fees and costs in the amount of $6,932.00, including the filing fee. To the best of the Debtor's knowledge, Kutner Brinen, P.C. has no connection or relationship with creditors and is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Keri L. Riley, Esq. KUTNER BRINEN, P.C. 1660 Lincoln Street, Suite 1850 Denver, CO 80264 Telephone: (303) 832-2400 E-mail: klr@kutnerlaw.com About BullShark Inc. BullShark, Inc. is a privately held company that operates in the food service industry. It owns and operates several Jason's Deli franchise locations across Colorado. BullShark filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-15814) on August 31, 2020. The petition was signed by Stanley Lyons, its president. At the time of the filing, the Debtor disclosed total assets of $330,433 and total liabilities of $1,744,131. Judge Thomas B. McNamara oversees the case. Kutner Brinen, P.C. serves as the Debtor's counsel. BURKE MOUNTAIN: Seeks to Tap Crowley Liberatore P.C. as Attorney ---------------------------------------------------------------- Burke Mountain Southeast, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Crowley Liberatore P.C. as its attorney. The firm will render these legal services to the Debtor: (a) prepare the petition, lists, schedules and statements required by 11 U.S.C. Sec. 521; the pleadings, motions, notices and orders required for the orderly administration of the estate and to ensure the progress of this case; and to consult with and advise the Debtor in the reorganization of its financial affairs. (b) prepare for, prosecute, defend, and represent the Debtor's interest in all contested matters, adversary proceedings, and other motions and applications arising under, arising in, or related to this case. (c) advise and consult concerning administration of the estate in this case, concerning the rights and remedies with regard to the Debtor's assets; concerning the claims of administrative, secured, priority, and unsecured creditors and other parties-in-interest. (d) investigate the existence of other assets of the estate; and, if any exist, to take appropriate action to have the same turned over to the estate. (e) prepare a Disclosure Statement and Plan of Reorganization for the Debtor, and negotiate with all creditors and parties-in-interest who may be affected thereby; to obtain confirmation of a Plan, and perform all acts reasonably calculated to permit the Debtor to perform such acts and consummate a Plan. The firm will seek compensation for professionals and paraprofessionals based upon their hourly rates, plus out-of-pocket expenses. The firm received a total of $25,914.00 from Ray Hollowell, Jr., the manager of Bon View Development, LLC and Burke Mountain Southeast, LLC. The firm holds a balance of $15,375.00 retainer after deducting pre-petition invoices of $7,105.00 and filing fees of $3,434.00. Karen M. Crowley, a member of Crowley Liberatore P.C., disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Karen M. Crowley, Esq. CROWLEY LIBERATORE P.C. 150 Boush Street, Suite 604 Norfolk, VA 23510 Telephone: (757) 333-4500 Facsimile: (757) 333-4501 E-mail: kcrowley@clrbfirm.com About Burke Mountain Southeast Burke Mountain Southeast, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 20-33633) on August 27, 2020. Crowley Liberatore P.C. is the Debtor's legal counsel. CAESARS ENTERTAINMENT: Egan-Jones Cuts Sr. Unsec. Ratings to CCC+ ----------------------------------------------------------------- Egan-Jones Ratings Company, on September 3, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Caesars Entertainment Inc/old to CCC+ from B-. EJR also downgraded the rating on commercial paper issued by the Company to C from B. Headquartered in Las Vegas, Nevada, Caesars Entertainment, Inc. is a gaming company operating casino resorts. CALIFORNIA RESOURCES: Boosts Stock Offering to Unsecured Creditors ------------------------------------------------------------------ Steven Church, writing for Bloomberg News, reports that bankrupt oil and gas producer California Resources increased the amount of stock unsecured creditors would get in exchange for wiping out the debts California Resources Corp. owes to them, according to a court filing. Under the revised restructuring support agreement, unsecured creditors would share 16.4% of new shares to be issued as part of the California Resources reorganization proposal. Previously, unsecured creditors had been offered 7% of the shares. Senior lenders would get 83.6% of the stock, should the reorganization plan be approved by U.S. Bankruptcy Judge David Jones, down from 93% under the original proposal. About California Resources California Resources Corporation -- http://www.crc.com/-- is an oil and natural gas exploration and production company headquartered in Los Angeles. The company operates its resource base exclusively within California, applying complementary and integrated infrastructure to gather, process and market its production. On July 15, 2020, California Resources and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33568). At the time of the filing, California Resources 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 Sullivan & Cromwell, LLP and Vinson & Elkins LLP as their bankruptcy counsel, Perella Weinberg Partners as investment banker, Alvarez & Marsal North America, LLC as restructuring advisor, and Epiq Corporate Restructuring, LLC as claims agent. CALIFORNIA RESOURCES: Panel Seeks to Hire FTI as Financial Advisor ------------------------------------------------------------------ The official committee of unsecured creditors appointed to the chapter 11 cases of California Resources Corporation and its debtor affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ FTI Consulting, Inc. as financial advisor. FTI will render these professional services to the committee: (a) Assist in the preparation of analyses required to assess the debtor-in-possession (DIP) financing or use of cash collateral; (b) Assist with the assessment and monitoring of the Debtors' short-term cash flow, liquidity, and operating results; (c) Assist in the review of financial related disclosures required by the Court; (d) Assist with the review of any retention and other employee benefit programs; (e) Assist with the review of the Debtors' analysis of core business assets and the potential disposition or liquidation of non-core assets; (f) Assist with the review of the Debtors' cost/benefit analysis with respect to the affirmation or rejection of various executory contracts and leases; (g) Assist with review of any tax issues associated with, but not limited to, claims/stock trading, preservation of net operating losses, refunds due to the Debtors, plans of reorganization, and asset sales; (h) Assist in the review of the claims reconciliation and estimation process; (i) Assist in the review of other financial information prepared by the Debtors; (j) Attend at meetings and assist in discussions with the Debtors, potential investors, banks, other secured lenders, the committee and any other official committees organized in these chapter 11 proceedings, the U.S. Trustee, other parties-in-interest and professionals hired by the same, as requested; (k) Assist in the review and/or preparation of information and analysis necessary for the confirmation of a plan and related disclosure statement in these chapter 11 proceedings; (l) Assist in the prosecution of committee responses/objections to the Debtors' motions; and (m) Render such other general business consulting or such other assistance as the committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. FTI is not owed any amounts with respect to pre-petition fees and expenses. The hourly rates of the firm are as follows: Senior Managing Directors $920 - $1,295 Directors/Senior Directors/Managing Directors $690 - $905 Consultants/Senior Consultants $370 - $660 Administrative/Paraprofessionals $150 - $280 In addition, FTI will seek reimbursement for actual and necessary expenses incurred in connection with these chapter 11 cases. Michael Cordasco, a senior managing director with FTI Consulting, Inc., disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael Cordasco FTI CONSULTING, INC. Three Times Square, 9th Floor New York, NY, 10036 Telephone: (212) 499-3683 Facsimile: (212) 841-9350 E-mail: michael.cordasco@fticonsulting.com About California Resources Corporation California Resources Corporation -- http://www.crc.com/-- is an oil and natural gas exploration and production company headquartered in Los Angeles. The company operates its resource base exclusively within California, applying complementary and integrated infrastructure to gather, process and market its production. On July 15, 2020, California Resources and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33568). At the time of the filing, California Resources 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 Sullivan & Cromwell, LLP and Vinson & Elkins LLP as their bankruptcy counsel, Perella Weinberg Partners as investment banker, Alvarez & Marsal North America, LLC as restructuring advisor, and Epiq Corporate Restructuring, LLC as claims agent. On July 27, 2020 the Office of the United States Trustee held a meeting to appoint the official committee of unsecured creditors for these chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel and FTI Consulting, Inc. as financial advisor. CARSON CREEK: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The Office of the U.S. Trustee on Sept. 8 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Carson Creek Ranch Parking, LLC. About Carson Creek Ranch Parking Carson Creek Ranch Parking, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-10876) on Augu. 3, 2020. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. Judge Tony M. Davis oversees the case. Todd Headden, Esq., at Hajjar Peters LLP, serves as Debtor's legal counsel. CENGAGE LEARNING: S&P Lowers ICR to 'CCC+'; Outlook Negative ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Cengage Learning Holdings II to 'CCC+' from 'B-'. The negative outlook indicates that S&P could lower the ratings if the company engaged in a distressed exchange in which lenders would receive less than par. Declining revenue, high leverage, and upcoming debt maturities increase the likelihood of a debt restructuring. Longer term, S&P believes ongoing industry secular pressures and the company's weak credit metrics will complicate refinancing efforts and might raise the possibility of a distressed exchange in which lenders receive less than par as the company's capital structure nears maturity. S&P forecasts adjusted FOCF to debt of below 3% and adjusted leverage of over 11x this year that will remain weak over the next 12-18 months. Cengage's asset-based lending (ABL) revolving credit facility matures on June 7, 2021. Cengage faces significant debt maturities in 2023 (when its $1.6 billion term loan matures on June 7, 2023). In addition, the company's $620 million of 9.5% senior notes are due June 15, 2024. Although the company has maintained a $100 million debt repurchase authorization since 2017, S&P believes such a transaction could become more attractive given current economic conditions. S&P would view any repurchase of debt at a discount as tantamount to a default since lenders would receive less than originally agreed. Lower enrollment and a decline in the international segment will affect Cengage's operating performance meaningfully in fiscal 2021. S&P expects Cengage to report a low-double-digit percentage revenue decline in fiscal 2021 due to lower student enrollment and a decline in the international and Gale segments, along with a continued decline in print textbook sales. The current global recession combined with a shift to online classes has affected enrollment in educational institutions. Amid declining higher education student enrollment, pricing pressures, and intense competition, educational publishers have been trying to increase their market share by introducing affordable digital solutions that can replace the secondary market (textbook rentals and reselling). Digital delivery will also help in establishing direct relationships with students, thereby restricting exposure to retailers. Launched in August 2018, Cengage Unlimited has performed well as students shift to digital offerings supported by the current environment. However, the growth from the digital initiatives is still lower than the declines in traditional print, resulting in overall revenue declines. In addition, S&P previously expected the international segment to support Cengage's revenue growth, but the rating agency now expects it to decline by more than 20% in light of pandemic-induced recession and lower sales expectations, primarily in Asia. As a result, S&P believes that the company's FOCF to debt will remain below 3% over the next 12-18 months. Liquidity will remain adequate based on strong cash balances. As of June 30, 2020, the company had about $320 million as cash on its balance sheet and roughly $35 million available under its $250 million ABL asset backed revolving credit facility (ABL) due July 2021. "We believe the company will be able to manage its liquidity requirements over the next 12 months based on its strong cash balances even after assuming repayment of the outstanding ABL on or before maturity. However, because the ABL is now current, we exclude it from our liquidity calculations," S&P said. The negative outlook reflects the possibility of a downgrade if current liquidity significantly declined such that the company needed to draw on its revolver or if S&P envisioned a default scenario, including a debt restructuring within a year. S&P could lower the rating if the company pursued a debt restructuring transaction or if liquidity weakened such that cash balances fell and the company were reliant on the revolver. This scenario includes accelerated textbook revenue declines, an unsuccessful digital strategy, greater competition, and a loss in market share that leads to persistent negative FOCF. S&P could raise the rating if the company refinanced its near-term maturities and gained meaningful traction with its digital strategy, which resulted in EBITDA growth and adjusted FOCF to debt increasing to the 3%-5% range over a sustained period. CENTRAL GARDEN: Egan-Jones Hikes Senior Unsecured Ratings to BB- ---------------------------------------------------------------- Egan-Jones Ratings Company, on September 2, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Central Garden & Pet Company to BB- from B+. Headquartered in Walnut Creek, California, Central Garden & Pet Company supplies consumer lawn and garden and pet supply products. CM WIND DOWN: Egan-Jones Lowers Senior Unsecured Ratings to CCC+ ---------------------------------------------------------------- Egan-Jones Ratings Company, on September 2, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by CM Wind Down Topco Inc. to CCC+ from B-. EJR also downgraded the rating on commercial paper issued by the Company to C from B. Headquartered in Atlanta, Georgia, CM Wind Down Topco Inc. operates as a radio broadcasting company. CNX MIDSTREAM: S&P Alters Outlook to Stable, Affirms 'B+' ICR ------------------------------------------------------------- S&P Global Ratings revised the outlook on U.S.-based midstream energy partnership CNX Midstream Partners L.P. (CNXM) to stable from negative after its parent, CNX Resources Corp., announced its intention to acquire the remaining public stake in the partnership with an expected transaction close in the fourth quarter of 2020. At the same time, S&P is affirming its 'B+' issuer credit rating on CNXM and its 'BB-' issue-level rating on the senior unsecured notes. The recovery rating remains '2', indicating the rating agency's expectations for substantial (70%-90%; rounded estimate: 85%) recovery in a payment default scenario. The stable outlook on CNXM reflects its stable outlook on CNX. S&P expects that CNX will maintain funds from operations (FFO) to debt in the 25%-30% range over the next two years and that CNXM will sustain adjusted debt to EBITDA of about 3x through 2021 and maintain adequate liquidity. "Take-in transaction strengthens CNX Midstream's strategic importance to CNX Resources. CNX Resources' announcement to purchase the remaining public stake in CNX Midstream has strengthened our view of the strategic relationship between CNX Midstream and CNX Resources," S&P said. "The transaction supports our view that CNXM's assets are important to CNX Resource's long-term growth strategy and CNXM is highly unlikely to be sold," the rating agency said. Both companies share the same management team and CNX Midstream is the primary midstream operator for CNX Resources. We believe that as the sole parent and the largest counterparty, CNX Resources plays a more integral role in CNX Midstream's operations." CNX Resources accounts for 80% of CNX Midstream's revenues for the six months ended June 30, 2020, and CNXM consequently heavily relies on CNX for overall volumetric growth. However, one caveat of this relationship is that with only a small proportion of overall volumes sourced from third parties, it is unlikely the company will increase volumes if CNX cannot increase overall production. The outlook revision to stable from negative reflects the change in outlook for parent company, CNX Resources. U.S.-based exploration and production (E&P) company CNX Resources Corp. has made progress in refinancing debt through the issuance of convertible notes, and S&P expects further debt reduction from free cash flow over the next couple of years. Given the lower natural gas price environment, S&P expects the company to shut off some wells in response to lower returns, resulting in a production decline in 2020. However, as CNX turns those wells back on, S&P expects volumes to rise by about 10% in 2021. Additionally, CNX has almost all of its expected gas production in 2020 and 80% of its 2021 volumes hedged at favorable prices, which provides strong protection to cash flows. The outlook revision on CNX to stable reflects S&P's expectation that CNX will maintain FFO to debt in the 25%-30% range over the next two years. S&P forecasts that CNXM volumes will decline in 2020 and improve in 2021 from the recently completed infrastructure investment program. Similarly, the rating agency expects to see the same trends in volumes at CNX occurring for CNX Midstream. It expects production to decrease in 2020 and then grow by about 10% in 2021, resulting in adjusted debt to EBITDA of approximately 3.6x in 2020 and around 3x in 2021. CNX's major infrastructure build-out is almost completed and S&P expects it to be fully operational by 2021, resulting in 2021 EBITDA between $255 million and $265 million. S&P views the completion of the company's broad infrastructure build-out positively because it positions CNXM for both organic and third-party volume growth. However, the rating agency believes the effects of depressed gas prices will continue to dampen performance in the coming year. "We do not expect the capital structure of CNXM to change. Post transaction, all senior notes and the CNXM revolving credit facility will remain outstanding and there will be no changes to the contractual agreements at CNXM. We expect the company will use cash flows generated by CNXM to pay down debt and that any excess cash will flow to CNX," S&P said. "The stable outlook on CNXM reflects the stable outlook on the parent, CNX Resources. The stable outlook on CNX Resources reflects our expectation that FFO to debt will approach 30% in 2021 and that the company will generate sufficient free cash flow in the next two years to repay its remaining 2022 debt maturities, or could access capital markets to refinance them," the rating agency said. S&P anticipates CNXM will marginally increase volumes and throughput in 2021 now that the company has completed its broad infrastructure build-out. The rating agency continues to expect the partnership to sustain adjusted debt to EBITDA of about 3x through 2021 and maintain adequate liquidity. "We could lower our ratings on CNXM if we lowered our rating on CNX. We could lower the issuer credit rating on CNX if we forecast CNX's leverage will weaken over the next two years, such that projected FFO to debt approaches 20% and debt to EBITDA approaches 4x on a sustained basis. This could happen if drilling costs exceeded expectations, or if gas price realizations deteriorate," S&P said. "We could raise the rating on CNXM if we raised our rating on CNX. An upgrade for CNX would require stronger leverage measures, including projected FFO to debt well above 30% and debt to EBITDA well below 3x on a sustained basis." The company could achieve these credit measures if it meets its natural gas production targets while containing costs, capital spending, and achieving improved gas price realizations," the rating agency said. CNX RESOURCES: Moody's Rates Add'l. $200MM Unsecured Notes 'B3' --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to CNX Resources Corporation's (CNX) proposed additional $200 million 7.250% senior unsecured notes due 2027. The outlook is negative. All other ratings of CNX are not affected. "CNX is successfully managing its refinancing requirements and is positioning its operations to generate free cash flow and continue to reduce leverage," said Elena Nadtotchi, VP-Senior Credit Officer at Moody's. Assignments: Issuer: CNX Resources Corporation Senior Unsecured Notes, Assigned B3 (LGD5) RATINGS RATIONALE The proposed senior unsecured notes are rated B3, two notches below the CFR level, given the significant size of the secured credit facility in the capital structure that has a priority claim and security over substantially all of the company's assets. The new notes will be rated at the same level and rank equally with CNX's existing senior unsecured notes and benefit from the same set of guarantees by operating subsidiaries. CNX's B1 CFR is supported by its proactive management of liquidity, refinancing risks and commodity price risks. CNX maintains an extensive hedging program with minimal commodity price risk in 2020 and high coverage in 2021-22 and beyond. In response to declining natural gas prices, CNX reduced capital investment to keep production level flat in 2020-2021 and should generate sizable positive FCF, supported by its hedging revenues. Moody's expects CNX to maintain solid leverage metrics underpinned by its hedging arrangements. The B1 rating further reflects CNX's single basin concentration in Appalachia, subjecting its natural gas production to material basis differentials, that the company hedges. CNX maintains adequate liquidity. The liquidity position is improving and is underpinned by Moody's expectation that the E&P business will generate sizable positive FCF in 2020-21 as it cut its capital investment and benefits from extensive hedging. Liquidity is also supported by its committed secured revolving credit facility that matures in April 2024 and which, as of June 2020, had a borrowing base of $1.9 billion. As of June 30, 2020, CNX reported $1.2 billion availability under its secured credit facility and full compliance under covenants. The facility includes two financial covenants (a maximum net leverage ratio of 4.0x and a minimum current ratio of 1x) and Moody's expects CNX to remain in compliance with covenants though 2021. The terms of the facility also include the springing maturity clause bringing its maturity forward to January 2022, if more than $500 million of CNX's senior unsecured 2022 notes remain outstanding at that time. In 2020, CNX used its operating cash flows and executed a number of transactions to refinance its 2022 notes, including placing $345 million 2022 convertible notes. The proceeds of the new issuance and borrowings are expected to be used to redeem the remaining outstanding amounts under the 2022 notes. Going forward, Moody's expects CNX to use most of its FCF to reduce overall leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS CNX's ratings may be upgraded if the company demonstrates replacement of reserves amid modest growth in production and broader recovery in natural gas sector and maintains solid leverage with RCF/debt above 30% and debt/production below $10,000/boe, with sustained solid profitability and capital returns, with LFCR maintained above 1.5x. Deteriorating cash margins, capital returns and operating cash flow or a substantial increase in leverage with RCF/debt declining below 20% could result in a downgrade of the ratings. CNX Resources Corporation is a sizable publicly traded independent exploration and production company operating in the Appalachian Basin. It controls substantial resources in Marcellus and Utica Shale. The methodologies used in this rating were Independent Exploration and Production Industry published in May 2017. COLOGIX HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B-' ICR ---------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on U.S.-based data center operator Cologix Holdings Inc. and revised its outlook to stable from negative. Its issue-level rating on the company's senior secured first-lien credit facilities is affirmed at 'B-'; the recovery rating on this debt is '3'. "The stable outlook reflects our belief that the company will continue to profitably monetize recent large investments in capacity expansion, such that leverage continues to decline to levels more appropriate for the rating over the next year," S&P said. S&P does not expect the COVID-19 pandemic to have a significant adverse impact on the company's operations over the coming 12 months. It expects the company to report mid-single-digit revenue growth in 2020, improving to near 10% in 2021, as edging out of data closer to the end consumer continues to drive demand. The company's data centers have been deemed essential businesses by local governments and remain fully operational with limited access impediments. "In our view, heightened demand, from increasing network traffic and capacity requirements, will continue to support organic growth. Customer concentrations are weighted toward network operators and cloud service providers, from which we project accelerated timetables and increased needs," S&P said. Despite recent improvements, S&P expects leverage to remain elevated given the company's private equity ownership by Stonepeak. Adjusted leverage declined toward the mid-7x area thus far in 2020, as the company has slowed down its capital spending this year following its 2019 expansion. With the company now having decent capacity at its facilities, S&P anticipates continued improvement in revenue, utilization, EBITDA margins, and leverage while the company is able to sustain this period of limited capex spend. "Although we expect continued deleveraging in our base case, upside may be limited, given our belief the sponsor could add leverage to the business to fund continued growth or distributions. While we have not baked this into our forecast, we believe that longer-term improvement in leverage could be constrained by the sponsor's potential leveraging actions," S&P said. Despite a small EBITDA base owing to its limited scale of operations, the company's higher concentration of interconnection revenues, minimal exposure to small-and-medium (SMB) businesses, and lack of exposure to volatile managed services revenue provides earnings stability. S&P views Cologix as a small player within the highly fragmented data center business, with a revenue base of under $200 million. That said, its business model is favorable compared with other rated data center peers in tier 2 and 3 markets due to its carrier-neutral hotel ecosystem. Cologix operates carrier hotels in seven of its nine markets with little competition from larger-scale providers that are focused on interconnection, such as Equinix. Carrier hotels drive interconnection revenue, which creates a hard-to-replicate network effect and differentiates the company's product offering from other commodity-like colocation data center operators. The company generates roughly 20% its revenue from interconnections, levels well ahead of its larger-scale peers such as Flexential, TierPoint, and Cyxtera. S&P views interconnection revenue favorably due to its high-margin economics and the sticky customer base. Furthermore, Cologix is not exposed to managed services like other data center peers S&P rates such as Flexential, which has about 25% revenue exposure to managed services and cloud services. S&P views managed services less favorably than colocation because it is easier to churn since customers do not own the equipment. "The stable outlook reflects our belief that the company will continue to grow EBITDA through 2020, such that leverage will be sustained below the mid-7x area. We believe the adverse impact of COVID-19 on the company's operations will remain moderate, with the company posting single-digit revenue growth this year," S&P said. S&P could lower its rating on Cologix if operational performance deteriorates such that it views the company's capital structure as unsustainable and no longer see a credible path for it to reduce its leverage. This would likely occur because of potential leveraging actions driven by the company's sponsor, and if S&P sees excessive customer churn and increased pricing pressure. "We could also lower the rating if the company's liquidity becomes inadequate to service its debt, though we view this as unlikely over the next year given that Cologix could reduce its high discretionary capital expenditure or potentially receive an equity contribution from its financial sponsor," S&P said. "While unlikely over the next year, given our belief that the sponsor is likely to lever up the business to fund growth or a distribution at some point, we could raise our rating on Cologix if we believed it would maintain leverage below 7x and an EBITDA-to-cash interest coverage ratio greater than 2.0x," the rating agency said. COPPER BULL: Seeks Approval to Hire Amy Zagorsky as Bookkeeper -------------------------------------------------------------- The Copper Bull, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to employ Amy Zagorsky as its bookkeeper. Ms. Zagorsky will render these professional services to the Debtor: (a) preparation of bank statement reconciliations on a monthly basis and prepare monthly financial statements; (b) assistance with review of reports or filings as required by the Trustee or the Office of the U.S. Trustee; and (c) other such functions as requested by the Trustee. Ms. Zagorsky will be compensated at her hourly rate of $30 per hour. Amy Zagorsky of Inside Job Accounting, LLC disclosed in court filings that no member, associate or employee of her bookkeeping business has any connections with the Debtor, creditors, or any other party-in-interest in this case or their respective attorneys, with the United States trustee, or with any person employed in the office of the United States trustee. The firm can be reached through: Amy Zagorsky INSIDE JOB ACCOUNTING, LLC 7210 Antoinette Circle Navarre, FL 32566 Telephone: (850) 586-1160 About The Copper Bull Based in Navarre, Florida, The Copper Bull, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 20-30179) on Feb. 27, 2020, listing under $1 million in both assets and liabilities. Judge Karen K. Specie oversees the case. Carrie Cromey, Esq. at Cromey Law, P.A., represents the Debtor as counsel. Amy Zagorsky is tapped as bookkeeper. CORNERSTONE BUILDING: S&P Affirms 'B+' ICR; Outlook Negative ------------------------------------------------------------ S&P Global Ratings affirmed the 'B+' issuer credit rating on Cornerstone Building Brands Inc. (CNR) and removed it from CreditWatch, where the rating agency placed it with negative implications on April 1, 2020. Homebuilding activity and remodeling spending have strengthened since the beginning of the COVID-19 pandemic and recession. The increased homebuilding and home improvement activities reflected higher demand for suburban homes and consumers' focus on improving their homes. Furthermore, new-home construction and remodeling activity have continued to increase in the third quarter, which leads S&P to believe that this performance will be sustained through the rest of 2020 and into 2021. However, weak demand in the commercial side of CNR is tempering the improvement of its residential sector. CNR's expense control and cash preservation measures taken early in the recession (reduced travel, acquisition, and share repurchase expenditures) offset much of COVID-19 related expenses. For CNR, net sales decreased 16% in the quarter and EBITDA decreased only 9%, equating leverage to 6.3x, primarily reflecting decreased activity in the low-rise commercial building sector. S&P expects CNR to maintain leverage of the mid-6x area in 2020, which is currently high for the rating agency's issuer credit rating. CNR has been able to reduce leverage on a trailing-12-month basis to 6.3x as of July 20, 2020, which we consider on the higher end high for a 'B+' rated entity. However, CNR will need to maintain its current EBITDA margin of 13%, while mitigating reduced revenue to reduce debt leverage further. The company is currently benefiting from reduced raw material costs that we view as volatile, as well as reduced selling, general, and administrative (SG&A) expenses, some of which we view as temporary. S&P does not anticipate the company will participate in any further debt-funded acquisitions or related distributions to its financial sponsor. Its ratings reflect CNR's high leverage, with adjusted debt to EBITDA expected to be above 6x and funds from operations (FFO) to debt expected to be 8%-10% by the end of 2020, improving toward 6x and maintaining at 8%-10%, respectively, in 2021. S&P expects modest EBITDA margin improvement to 13% in 2020 from 12.2% in 2019, as cost initiatives are realized, which the rating agency believes will help gradually improve credit metrics. It also expects the company to maintain its EBITDA interest coverage above 2.5x in 2020 and 2021. In addition, the company has a favorable capital structure with long-dated maturities (the nearest being its asset-based lending facility due 2023). S&P's ratings also reflect CNR's 62% ownership by financial sponsors. The company is majority owned by financial sponsors Clayton, Dubilier & Rice (49%) and Golden Gate Capital (13%). The company's board does have a majority of independent directors, and 38% of CNR's ownership is public. At this time S&P is not anticipating any debt-related acquisition or actions that would deteriorate their leverage from its forecasts. The negative outlook reflects the company's currently high debt leverage at over 6x and the risk that weakness in the company's commercial buildings segment will temper improvement in its residential businesses, keeping debt leverage elevated above 6x going into 2021. S&P could lower the rating on CNR if: -- There is a reversal in the current strong residential housing trends, and EBITDA declines such that the company's leverage is approaching 7x. -- CNR pursues debt-funded acquisitions or distributions under its ABL facility such that EBITDA interest coverage falls below 2x. S&P could stabilize the outlook on CNR if the residential sales recovery continues to gain strength while the company improves margins and EBITDA such that: -- Demand trends strengthened, and EBITDA grew such that debt to EBITDA fell below 6x; and -- That perceived risk of re-leveraging is low, such that fully adjusted debt to EBITDA would remain below 6x based on the company's financial policy and use of its asset-based lending facility. DAYSPRING ACADEMY: S&P Assigns 'BB' ICR; Outlook Stable ------------------------------------------------------- S&P Global Ratings assigned its 'BB' issuer credit rating (ICR) to Dayspring Academy for Education and the Arts, a Florida not-for-profit corporation. The outlook is stable. An ICR reflects an obligor's general creditworthiness, focusing on its capacity and willingness to meet financial commitments when they come due. It does not apply to any specific financial obligation because it does not take into account the obligation's nature and provision, standing in bankruptcy or liquidation, statutory preferences, or legality and enforceability. "We assessed Dayspring's enterprise profile as adequate, with excellent academic performance, seasoned and effective management, solid demand, a robust wait list, growing enrollment, and sound academic performance, tempered by potential construction risk and future expansion plans," said S&P Global Ratings analyst Mel Brown. "We assessed Dayspring's financial profile as vulnerable, with a small revenue base of less than $10 million, very low unrestricted reserves, a manageable debt burden, and solid pro forma lease-adjusted maximum annual debt service coverage." The stable outlook reflects S&P's opinion that over its outlook period, it expects Dayspring to maintain financial metrics around current assessment levels despite any state funding cuts, preserve its stable market position, good academics, and improve unrestricted days' cash on hand to levels more commensurate with the rating. DIFFUSION PHARMACEUTICALS: Names New President & CEO ---------------------------------------------------- Robert ("Bob") J. Cobuzzi Jr., Ph.D., who has served as a member of Diffusion Pharmaceuticals Inc.'s Board of Directors since January 2020, will succeed David G. Kalergis as president and chief executive officer effective immediately. Mr. Kalergis will retire from his operational responsibilities but continue to serve as Chairman of the Board. Dr. Cobuzzi is an accomplished pharmaceutical executive with significant and successful experience in the areas of drug development, business development and operational leadership across multiple therapeutic areas. Since joining the Diffusion board in January 2020, Bob has immersed himself in the science and development of Diffusion's lead-product candidate, trans sodium crocetinate ("TSC"), providing significant support to management as the Chairman of the Science and Technology Committee. "Bob is uniquely qualified to lead Diffusion as it expands efforts to develop TSC for life-threatening medical conditions where the body has a decreased ability to deliver oxygen to the areas where it is needed most," said David Kalergis, Diffusion's Chairman. "His deep leadership expertise and broad industry experience make him the ideal leader to drive product development and Company growth." "I am honored to build on David's legacy and excited to lead Diffusion into its next phase of development. I believe Diffusion has a significant opportunity with TSC to develop a unique and clinically meaningful asset that we believe will address an unmet medical need and create shareholder value," said Dr. Cobuzzi. "I would like to thank David and the Board for the opportunity to serve Diffusion, its patients and its shareholders." David G. Kalergis has retired as president and chief executive officer of the Company but will continue to serve as chairman of the board of the Company. "It has been a tremendous privilege, first to work with Dr. John Gainer on the development of TSC, and then to work with the entire Diffusion team to bring this exciting new drug to its current inflection point," said Mr. Kalergis. "Speaking on behalf of the entire board, we welcome Bob as president and CEO." Dr. Cobuzzi has 25 years of cross-functional leadership experience in the pharmaceutical and biotechnology industries. He currently serves as a Venture Partner and chairman of the Business Development Board of Sunstone Life Sciences Ventures. From 2005 until 2018, Dr. Cobuzzi held senior leadership roles with Endo International PLC (Nasdaq: ENDP), most recently as President of Endo Ventures Ltd. headquartered in Dublin, Ireland. Prior to joining Endo, Dr. Cobuzzi's experience included significant scientific licensing, regulatory, and clinical program experience with Adolor Corporation, Centocor Inc. and AstraMerck, Inc./Astra Pharmaceuticals LP. Dr. Cobuzzi graduated from Colby College with an A.B. in Biochemistry and Art History, received his Ph.D. in Molecular and Cellular Biochemistry from Loyola University Chicago and completed a post-doctoral fellowship in Experimental Therapeutics at Roswell Park Comprehensive Cancer Center in Buffalo, New York. About Diffusion Pharmaceuticals Diffusion Pharmaceuticals Inc. is an innovative biotechnology company developing new treatments that improve the body's ability to bring oxygen to the areas where it is needed most, offering new hope for the treatment of life-threatening medical conditions. Diffusion's lead drug TSC was originally developed in conjunction with the Office of Naval Research, which was seeking a way to treat hemorrhagic shock caused by massive blood loss on the battlefield. Diffusion reported a net loss of $11.80 million for the year ended Dec. 31, 2019, compared to a net loss of $18.37 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $24.11 million in total assets, $3.97 million in total liabilities, and $20.13 million in total stockholders' equity. KPMG LLP, in McLean, Virginia, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 17, 2020 citing that the Company has suffered recurring losses from operations, has limited resources available to fund current research and development activities, and will require substantial additional financing to continue to fund its research and development activities that raise substantial doubt about its ability to continue as a going concern. EFS COGEN I: Moody's Rates $950MM Senior Secured Term Loan B 'Ba3' ------------------------------------------------------------------ Moody's Investors Service assigned a Ba3 rating to EFS Cogen Holdings I LLC's proposed $950 million senior secured term loan B due 2027 and a Ba2 rating to EFS Cogen's super senior secured $100 million revolving credit facility due 2025. The rating outlook is stable. Proceeds from the new senior secured term loan will be used to repay an outstanding term loan (approximately $839.1 million), to make a distribution to the equity sponsors and to pay transaction fees and expenses; while the new senior secured revolver will replace the existing liquidity facility. Moody's intends to withdraw the Ba3 rating on the existing secured term loan and the secured revolving credit facility upon the closing of the new credit facilities. EFS Cogen owns a 974 MW 6-unit natural gas-fired combined cycle cogeneration plant in Linden, New Jersey that consists of Units 1-5 (809 MW) and Unit 6 (164 MW). RATINGS RATIONALE The Ba3 rating assignment for the senior secured term loan reflects the Project's location within a highly constrained load pocket, its strong historical operating performance, its unique competitive position, and its expectations for relatively predictable cash flow as an important asset serving the City of New York. These strengths are balanced by the Project's reliance on merchant power markets for a significant portion of its cash flows and the high leverage at financial close due in part to the dividends being paid to the Sponsors that contribute to somewhat weak financial metrics in the early years. For example, the ratio of Debt to EBITDA at the outset exceeds 6.0x, but is expected to decline over time from the benefits of the cash flow sweep, which should help produce credit metrics that are positioned towards the lower end of the Ba rating category. The Ba2 rating assignment for the senior secured revolving credit facility reflects structural features that give any outstanding revolving credit facility draws a priority claim over the term loan during any bankruptcy reorganization or liquidation scenario. Because its ratings incorporate both the probability of default and loss given default probabilities, Moody's has notched the rating of this super senior secured working capital facility one notch above the rating of the secured term loan. A key rating consideration which helps to offset EFS Cogen's leverage is the Project's position as an efficient electric generator within New York City Zone J, a highly congested load pocket within the most constrained zone of the New York Independent System Operator (ISO), enabling it to earn premium energy and capacity pricing compared to other established power markets. Importantly, Units 1-5 currently provide approximately 19% of Zone J's "In-City" power generation. Moreover, EFS Cogen's location in New Jersey enables it to source less expensive natural gas supply relative to all other "In-City" generators. Moody's believes that this competitive advantage is not likely to change over the life of the financing. Lenders also benefit from some longer-term contracted revenues. Specifically, the Project provides critical steam and power to Phillips 66's Bayway Refinery and Infineum's Bayway Chemical Plant (a JV between ExxonMobile and Royal Dutch Shell) under long-term contracts that run through April 2032. Combined, these contracts are expected to generate approximately 20% of annual recurring revenue. The Phillips 66 Bayway refinery complex houses the largest refinery on the East Coast, and as such, EFS Cogen represents critical energy infrastructure. FINANCIAL METRICS The Sponsor's base case projections for capacity, energy and fuel prices have been developed based on a fundamental analysis performed by ESAI Power, LLC. Based on the Sponsor's base case assumptions, the Project's three-year average Project CFO/Debt is 14.9%, the three-year average debt service coverage ratio (DSCR) is 2.95x, and the three-year average Debt/EBITDA is 4.6x. These financial metrics score in the mid-range of the Ba rating category indicated in the Power Generation Projects Methodology (the Methodology). In this scenario, about 64% of the term loan is repaid from excess cash flow and mandatory amortization prior to its 2027 maturity date. Moody's base case forecast incorporates lower capacity prices, lower natural gas and power prices, and 5% higher operations and maintenance expenses. Based on these more conservative assumptions, the Project's three-year average Project CFO/Debt is 8.2%, its three-year average DSCR is 2.04x, and the three-year average Debt/EBITDA is 6.1x. These financial metrics fall within the high B to low Ba rating categories as indicated in the Methodology, but as previously mentioned, Moody's expects that EFS Cogen will produce credit metrics over time more strongly positioned in the Ba rating category. In the Moody's base case, Moody's calculates that about 47% of the term loan is repaid from excess cash flow and mandatory amortization prior to maturity, suggesting that refinancing risk, while present, appears to be manageable. Although refinancing risk exists, the importance of Units 1-5 in providing in-city generating capacity and the critical infrastructure provided to the Bayway Refinery are additional mitigating factors. STRUCTURAL FEATURES The senior secured lenders benefit from standard project finance features, including a trustee administered cash flow waterfall of accounts, a six-month debt service reserve, a pledge of the assets and the Sponsor's ownership interests in the Borrower. Debt is repaid quarterly via a 1% scheduled amortization. There is also a mandatory quarterly cash sweep equal to 75% of excess cash flow with a leverage-based step down to 50% once the Net Debt to EBITDA ratio reaches 3.75x. As per the Moody's base case, the Project is not expected to reach this step-down threshold until 2025. The terms of the proposed refinancing structure also contain one financial covenant: the maintenance at all times of a DSCR of at least 1.1 times. RATING OUTLOOK The stable outlook reflects an expectation for continued strong operating performance and improved financial results due primarily to higher capacity related revenues owing to the premium positioning of the assets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS FACTORS THAT COULD LEAD TO AN UPGRADE EFS Cogen's rating is unlikely to be upgraded in the near-term owing to the anticipated leverage at financial close of the refinancing. Longer term, the rating could come under positive pressure should the credit metrics become more solidly positioned in the mid-Ba rating category on a consistent basis. Specifically, if the ratio of Project CFO/Debt exceeds 12% and the DSCR exceeds 2.5x on a sustained basis, consideration of an upgrade may be warranted. FACTORS THAT COULD LEAD TO A DOWNGRADE EFS Cogen's rating may be pressured should its ratio of Project CFO/Debt decline to below 8.0% on a sustained basis or if the generating facility experiences operating problems. PROFILE EFS Cogen owns a 974 MW 6-unit natural gas-fired combined cycle cogeneration plant in Linden, New Jersey that consists of Units 1-5 (809 MW) and Unit 6 (165 MW). A dedicated transmission line allows Units 1-5 to dispatch its electric output and capacity into New York City. EFS Cogen is owned 50% by JERA Co. Inc., a global energy company based in Tokyo, 14% by affiliates of Ares EIF, 14% by affiliates of Oaktree Capital, 12% by Rose Capital Investment and 10% by GS Platform (a consortium of South Korean power producers). The principal methodology used in these ratings was Power Generation Projects Methodology published in July 2020. ENCORE CAPITAL: Fitch Rates EUR300MM Sr. Secured Notes 'BB+(EXP)' ----------------------------------------------------------------- Fitch Ratings has assigned Encore Capital Group, Inc.'s proposed EUR300 million issue of senior secured notes an expected rating of 'BB+(EXP)'. The assignment of final rating is contingent on the receipt of final documents conforming to information already reviewed. As announced on September 1, 2020, Encore has entered into an amended and restated senior credit facility agreement, subject to certain conditions that Encore expects to be met on or prior to the issue date of the notes. The proceeds of the notes will principally be used to repay an equivalent sum of other debt previously drawn under the senior credit facility agreement and other facilities. Therefore, Fitch does not expect the transaction to meaningfully impact Encore's leverage ratio. Based in San Diego, Encore purchases portfolios of defaulted receivables from financial service providers including banks, credit unions, consumer finance companies, and commercial retailers. It also provides debt servicing and portfolio management services to credit originators for non-performing loans. Encore is listed on NASDAQ, and in 2018 became 100% owner of the UK-based Cabot Credit Management Limited, having been a 43% shareholder since 2013. KEY RATING DRIVERS The expected rating of the senior secured notes is equalised with Encore's Long-Term Issuer Default Rating (IDR). The equalisation reflects the prior claim on available security of a higher-ranking super-senior debt level, which results in Fitch expecting average rather than above-average recoveries for Encore's senior secured notes. The Long-Term IDR of Encore reflects its leading franchise in the debt purchasing sector in its chosen markets, its strong recent profitability and its low leverage by the standards of the sector. The rating also takes into account the concentration of Encore's activities within debt purchasing and the potential for a prolonged COVID-19-driven economic downturn to weaken collections performance and portfolio asset quality. Its further factors in the need over the longer term for debt purchasers to maintain adequate access to funding with which to replenish their stocks. RATING SENSITIVITIES The expected rating of the notes is primarily sensitive to changes in Encore's Long-Term IDR. However, a downgrade of Encore's IDR would not automatically lead to negative rating action on the notes, depending on Fitch's view of the likely impact on recoveries of the circumstances giving rise to the downgrade. Changes to Fitch's assessment of relative recovery prospects for senior secured debt in a default (e.g. as a result of a material shift in the proportion of Encore's debt which is either unsecured or super-senior secured) could also result in the senior secured debt rating being notched up or down from the IDR. Factors that could, individually or collectively, lead to positive rating action/upgrade: Given the current economic backdrop, an upgrade of Encore's IDR is unlikely in the short term. Over the medium to long term, positive rating action would be subject to: - Maintenance of gross debt/adjusted EBITDA consistently below 2.5x, while also developing a significant tangible equity position via retention of profits; and - Demonstration of collections and earnings resilience throughout the course of the current global economic dislocation. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A sustained fall in earnings generation, particularly if leading to a weakening in key debt service ratios or other financial efficiency metrics; - Failure to adhere to management's public leverage guidance of maintaining a net debt-to-adjusted EBITDA of 2x-3x; - A weakening in asset quality, as reflected in acquired debt portfolios significantly underperforming anticipated returns or requiring material write-downs in expected recoveries; or - An adverse operational event or significant disruption in business activities (for example arising from regulatory intervention in key markets adversely impacting collection activities), thereby undermining franchise strength and business-model resilience. ESG Considerations Fitch has assigned Encore an ESG relevance score of '4' in relation to 'Customer Welfare - Fair Messaging, Privacy & Data Security', in view of the importance of fair collection practices and consumer interactions and the regulatory focus on them. Fitch has also assigned an ESG relevance score of '4' for 'Financial Transparency', in view of the significance of internal modelling to portfolio valuations and associated metrics such as estimated remaining collections. These are features of the debt purchasing sector as a whole, and not specific to Encore. Except for the matters discussed, 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). ENCORE CAPITAL: Moody's Rates $300MM Senior Secured Notes 'Ba3' --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 debt rating to Encore Capital Group, Inc.'s proposed EUR300 million 5-year senior secured notes. RATINGS RATIONALE The debt rating of Ba3 assigned to Encore's proposed EUR300 million senior secured notes is based on the company's Ba2 Corporate Family Rating (CFR) and reflects the application of Moody's Loss Given Default for Speculative-Grade Companies methodology and the priorities of claims and asset coverage in Encore's liability structure. The notes will represent senior secured obligations of Encore and will be fully and unconditionally guaranteed on a senior secured basis by substantially all material subsidiaries of the company. The new notes will rank junior to the revolving credit facility and Encore's private placement notes due 2024, which will be partially prepaid. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The senior secured debt rating could be upgraded because of 1) an upgrade of Encore's CFR or 2) changes to the liability structure that would decrease the amount of debt considered senior to the notes or increase the amount of debt considered junior to the notes. Encore's CFR could be upgraded if the company: 1) continues to demonstrate strong financial performance, with consistently solid profitability and cash flows; 2) reduces its leverage, on a consistent basis, to less than 2.5x; 3) diversifies its geographical mix, which would reduce its exposure to the regulatory risk in a given region; and 4) if Moody's deems that the operating environment for debt purchasers has improved. The senior secured debt rating could be downgraded because of 1) a downgrade of Encore's CFR or 2) changes to the liability structure that would increase the amount of debt considered senior to the notes. Encore's CFR could be downgraded in case of: 1) meaningful and sustained deterioration in the company's profitability and cash flows; 2) increase in leverage, on a sustained basis, to above 3.5x, measured as Debt/EBITDA; 3) failure to maintain adequate committed revolving borrowing availability, or if liquidity otherwise materially weakens; or 4) regulatory developments in a country to which the company has significant business exposure that would have significant negative impact on the company's franchise. LIST OF AFFECTED RATINGS Issuer: Encore Capital Group, Inc. Assignments: Backed Senior Secured Notes, Assigned Ba3 PRINCIPAL METHODOLOGY The principal methodology used in this rating was Finance Companies Methodology published in November 2019. ENERPLUS CORP: Egan-Jones Lowers Senior Unsecured Ratings to BB- ---------------------------------------------------------------- Egan-Jones Ratings Company, on September 2, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Enerplus Corporation to BB- from BB. Headquartered in Calgary, Canada Enerplus Corporation is an oil and gas exploration and production company that owns a large, diversified portfolio of income-generating crude oil and natural gas properties. FIELDWOOD ENERGY: Fitch Withdraws 'D' LT IDR on Bankruptcy ---------------------------------------------------------- Fitch Ratings has withdrawn the following Fieldwood Energy LLC Ratings: -- 'D' Long-Term Issuer Default Rating (IDR); -- 'C/'RR5' first lien secured term loan; -- 'C'/'RR6' senior second lien term loan rating. The ratings were withdrawn due to bankruptcy of the rated entity, debt restructuring or issue/tranche default. KEY RATING DRIVERS Key Rating Drivers are not applicable, as the ratings have been withdrawn. RATING SENSITIVITIES Rating sensitivities are do not apply, as the ratings are being withdrawn. ESG CONSIDERATIONS Fieldwood has an Environmental, Social and Governance (ESG) 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, either due to their nature or the way in which they are being managed by the entity. FILTRATION GROUP: S&P Alters Outlook to Stable, Affirms 'B' ICR --------------------------------------------------------------- S&P Global Ratings revised the outlook on Filtration Group Corp. (FGC) to stable from negative and affirmed its 'B' issuer credit and issue-level ratings. The stable outlook reflects S&P's forecast for continued favorable life science end market demand while maintaining good EBITDA margins, which should allow FGC to maintain S&P-adjusted debt to EBITDA of 5.5x-6.5x over the next 12 months. "FGC's profitability will likely be stronger than we previously anticipated in 2020, driven by resilient indoor air quality and medical, bioscience, and pharmaceutical end markets," S&P said. S&P now forecasts revenue declines will be limited to the mid- to high-single-digit percent range compared to the rating agency's prior forecast of a double-digit decline in 2020. Over the next year, indoor air quality and medical, bioscience, and pharmaceutical product demand will likely continue to grow, which should largely offset potentially prolonged softness in demand for industrial products. FGC's life science products generally earn higher margins than its industrial product lines, and S&P expects this shift in product mix, along with recent cost-cutting actions, to benefit overall margins in 2020 and into 2021. Indoor air filtration product lines will benefit volumes as customers react to COVID-19 risks. Demand for consumer filters spiked during the second quarter of 2020 as customers became increasingly aware of airborne virus transmission risk. FGC moved quickly to produce and market air filtration systems that trap and eliminate viruses. Therefore, S&P believes indoor air products (about 20% of FGC's revenue) represent a significant near-term opportunity for FGC for the duration of the pandemic and even thereafter if customers continue to perceive health and safety risks as heightened. Automotive product volumes decreased significantly in April and May 2020 but demand appears to be rebounding. FGC supplies transmission filtration systems to auto manufacturers and tier-one suppliers--a supply chain with limited inventory. As auto production in the U.S. and Europe shut down in response to the pandemic, FGC saw demand collapse in April and rebounded sharply by June, more quickly than it had previously expected. "FGC remains exposed to automobile production globally, which we expect to decrease this year from 2019 levels. Beyond 2020, however, we expect the global trend toward more stringent emission regulations and automatic transmission vehicles (which have lower emissions) to increase demand for transmission filtration systems, of which FGC has a leading market share," S&P said. Cost reduction actions will likely continue to benefit margins. S&P believes that labor and material cost reductions, which FGC began to implement during the second half of 2019 and accelerated as the coronavirus became a pandemic, will improve FGC's profitability through 2021. During the first half of 2020, these actions increased margins, likely because they were in process before the pandemic. S&P expects the company will maintain these improved margin levels next year. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety "The stable outlook on FGC reflects our forecast that despite soft industrial end market conditions, the company will benefit from favorable life science end market demand as well as higher margins and maintain S&P Global Ratings-adjusted debt to EBITDA of 5.5x-6.5x over the next 12 months," the rating agency said. S&P could lower its rating on FGC if it expects: -- Financial leverage will exceed 7.5x as a result of weak end market demand, operational inefficiencies, a large debt-funded acquisition, or dividends to owners; or -- FOCF will be significantly lower than S&P's forecast. Although unlikely over the next year or so, S&P could raise its ratings if: -- FGC reduces its S&P Global Ratings-adjusted financial leverage to below 5x; and -- The company's ownership expresses a strong commitment to maintaining leverage at less than 5x throughout the business cycle. FIRST CHOICE: Seeks Approval to Tap Trenam as Special Counsel ------------------------------------------------------------- First Choice Healthcare Solutions, Inc. and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Lynn Welter Sherman and the law firm of Trenam, Kemker, Scharf, Barkin, Frye, O'Neil & Mullis, P.A. as special counsel. The Debtors desire to employ Trenam to investigate, and if appropriate, prosecute claims against former directors, officers, and insiders of the Debtors, including without limitation claims for breach of fiduciary duty and self-dealing and avoidance actions under the Bankruptcy Code. Trenam will work with Akerman LLP, the Debtors' lead counsel, to avoid any overlapping or duplication of work in these chapter 11 cases. The hourly rates of Trenam's professionals are below: Attorneys $210 - $450 Paralegals $205 - $215 In addition, the firm will seek a $10,000 post-petition retainer and reimbursement for out-of-pocket expenses incurred in connection with these chapter 11 cases. To the best of the Debtors' knowledge, the firm has no connection with the Debtors' accountants, the United States Trustee, or any persons employed by the United States Trustee. It represents no interest adverse to the Debtors in the matters upon which it is to be retained. The firm can be reached through: Lynn Welter Sherman, Esq. TRENAM, KEMKER, SCHARF, BARKIN, FRYE, O'NEIL & MULLIS, P.A. 200 Central Ave., Suite 1600 St. Petersburg, FL 33701 Telephone: (727) 820-3980 Facsimile: (727) 820-3974 E-mail: LSherman@trenam.com About First Choice Healthcare Solutions Headquartered in Melbourne, Florida, First Choice Healthcare Solutions -- https://www.myfchs.com -- is implementing a defined growth strategy aimed at building a network of localized, integrated care platforms comprised of non-physician-owned medical centers, which concentrate on treating patients in the following specialities: Orthopaedics, Spine Surgery, Neurology, Interventional Pain Management and related diagnostic and ancillary services in key expansion markets throughout the Southeastern U.S. First Choice Healthcare Solutions, Inc. and its debtor affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-03355) on June 15, 2020. The petitions were signed by Phillip J. Keller, interim chief executive officer and chief financial officer. At the time of the filings, First Choice Healthcare Solutions disclosed total assets of $1,283,553 and total liabilities of $1,855,427; First Choice Medical Group of Brevard, LLC disclosed total assets of $2,260,116 and total liabilities of $3,016,161; FCID Medical, Inc. had total assets of $1,832,489 and total liabilities of $642,515; and Marina Towers, LLC had total assets of $6,149,380 and total liabilities of $6,558,440. Judge Karen S. Jennemann oversees the cases. Akerman LLP is the Debtors' counsel. Trenam, Kemker, Scharf, Barkin, Frye, O'Neil & Mullis, P.A. is tapped as special counsel. FIRSTENERGY CORP: Faces Stock-Drop $60M Bribery Lawsuit ------------------------------------------------------- Law360 reports that a shareholder hit FirstEnergy Corp. with a proposed class action in an Ohio federal court July 28, 2020, over allegations that the utility paid Ohio lawmakers $60 million to arrange a $1 billion bailout, saying news of the charges sent the company's stock price plunging 45%. The complaint by shareholder Diane Owens alleges that she and other FirstEnergy investors sustained massive losses thanks to what she said were the utility's lies about how it was dealing with the financial problems around its nuclear power plants. About FirstEnergy Corp. FirstEnergy Corp. (NYSE: FE), through its subsidiaries, generates, transmits, and distributes electricity in the United States. The Company operates through Regulated Distribution and Regulated Transmission segments. It was founded in 1996 and is headquartered in Akron, Ohio. Akron, Ohio-based FirstEnergy Solutions, Corp. (FES) is a subsidiary of FirstEnergy Corp (NYSE:FE). FES -- http://www.firstenergycorp.com/-- provides energy-related products and services to retail and wholesale customers; and owns and operates 5,381 MWs of fossil generating capacity through its FirstEnergy Generation subsidiaries. FES also owns 4,048 MWs of nuclear generating capacity through its FirstEnergy Nuclear Generation subsidiary. Nuclear generating plants are operated by FirstEnergy Nuclear Operating Company (FENOC), which is a separate subsidiary of FirstEnergy Corp. On March 31, 2018, FirstEnergy Solutions and 6 affiliates, including FENOC, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 18-50757). The cases are pending before the Honorable Judge Alan M. Koschik and their cases be jointly administered under Case No. 18-50757. Parent company, First Energy Corp. and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process. First Energy Corp. listed $42.2 billion in total assets against $4.07 billion in total current liabilities, $21.1 billion in long-term debt and other long-term obligations and $13.1 billion in non-current liabilities as of Dec. 31, 2017. The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as bankruptcy counsel; Brouse McDowell LPA as co-counsel; Lazard Freres & Co. as investment banker; Alvarez & Marsal North America, LLC, as restructuring advisor and Charles Moore as chief restructuring officer; and Prime Clerk as claims and noticing agent. The Debtors also tapped Willkie Farr & Gallagher LLP, Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan, LLP as special counsel. The U.S. Trustee for Region 9 appointed an official committee of unsecured creditors on April 12, 2018. Milbank, Tweed, Hadley & McCloy LLP and Hahn Loeser & Parks LLP serve as counsel to the committee. FOSSIL GROUP: Egan-Jones Lowers Senior Unsecured Ratings to CC -------------------------------------------------------------- Egan-Jones Ratings Company, on September 3, 2020, downgraded the foreign currency local currency senior unsecured ratings on debt issued by Fossil Group Inc. to CC from CCC-. Headquartered in Richardson, Texas, Fossil Group, Inc. designs, develops, markets, and distributes consumer fashion accessories. FROGNAL HOLDINGS: Bankruptcy Complicates Estate Development ----------------------------------------------------------- Rachel Riley, writing for Herald Net, reports that the bankruptcy filing of Frognal Holdings LLC, the developer of the estate development near Picnic Point in West Edmonds, Washington, says its Chapter 11 filing is a temporary setback that won't block 112 planned homes near Picnic Point. Backers of the controversial Frognal Estates development filed for Chapter 11 bankruptcy Thursday, July 23, 2020, in hopes of reviving the 15-year project's faltering financials. Frognal Holdings LLC, which owns the 22-acre property near Picnic Point Road, owes $11.3 million to more than a dozen creditors, according to a petition the company’s attorneys filed in U.S. Bankruptcy Court in Seattle. Once forested and now covered with stumps, the site was approved for a 112-home subdivision over the objections of neighbors, who argued the development would create landslide risks on steep and environmentally sensitive land. Developer John Lakhani insisted in a Friday, July 24, 2020, text message that the project will still go forward as planned. Foreclosure loomed for Frognal. The property was to be auctioned from the steps of the Snohomish County Courthouse on Friday. However, that auction was postponed to Aug. 28, 2020. Lakhani, president and CEO of Everett-based Integral Northwest, has acknowledged hangups in the financing plan and said he's working to fix them. The developer got a loan to buy the property and planned to get a second one to finance construction and pay off the first loan, he previously explained. Due to delays in permitting and other issues, though, Integral Northwest couldn’t repay the first loan when it initially anticipated it would, he has said. "Chapter 11 became necessary, but we expect to be out of Chapter 11 before the end of the year," he said in the Friday text message. "Nothing has otherwise changed in our development plans for the property." Chapter 11 of the U.S. Bankruptcy Code allows a company to continue to run while formulating a restructuring plan to pay creditors. Sometimes the plan works and the company becomes profitable again; other times, it liquidates. The property, valued at about $30 million, accounts for the vast majority of the company’s nearly $31 million in assets, according to the bankruptcy petition. The development's turbulent history began in 2005, when the first permit application was submitted under the name Horseman’s Trail. The developer won a series of court battles for the project, although it still must address drainage and slope stability on steep terrain south of Mukilteo. "We're still fighting it," said Christa Howser, who was at the courthouse on Friday morning when the announcement was made that the foreclosure auction would be postponed. She and her husband, who live in Lynnwood and frequently visit Picnic Point, have been speaking out against the plan for years. The project's opponents have lambasted county leaders for allowing logging at the site just north of Picnic Point Elementary School before the developer obtained all the permits it needed. Residents have also called on the county to buy the vacant land, restore it and turn it into a park. "That was the best of all possible worlds," Howser said. An independent geotechnical engineer and county staff are monitoring the site for erosion and stability, county Planning and Permitting Supervisor Ryan Countryman has said. The developer has also posted bonds to ensure that monitoring continues and that erosion control measures are maintained, according to Countryman. The county has issued construction permits for the project that don't expire until summer 2022, and they could be extended, Countryman has said. The developer is awaiting approval of the project's sewer plans from the Alderwood Water and Wastewater District, said John McClellan, the district's engineering and development director. The district wants to see designs for an off-site sewer line that will last in an area highly susceptible to erosion. An engineer for the district recently reviewed the latest drafts and made comments that the developer will now have to address, McClellan said. "There's things we want them to include and clarify in the plans," he said, adding that those plans "are close to being in a state where they could be approved." About Frognal Holdings Frognal Holdings, LLC, is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)), whose principal assets are located at 13500 60th Avenue, West Edmonds, WA 98026. The property is a proposed 112-lot residential subdivision having an appraised value of $30.8 million. Frognal Holdings filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wa. Case No. 20-11966) on July 23, 2020. At the time of filing, Debtor disclosed $30,921,624 in assets and $11,302,231 in liabilities. Christine M. Tobin-Presser, Esq., at Bush Kornfeld LLP, is the Debtor's legal counsel. FUIGO LLC: Court Expunges Canon Financial's Unsecured Claim ----------------------------------------------------------- Bankruptcy Judge Martin Glenn sustains the objection of Debtor Fuigo LLC to Claim No. 4-1 filed by Canon Financial Services, Inc. in the bankruptcy case captioned In re Fuigo LLC, Chapter 11, Debtor, Case No. 19-12662 (MG) (Bankr. S.D.N.Y.). The claim is expunged. On August 16, 2019, the Debtor filed a voluntary chapter 11 petition which designates the Debtor as a small business debtor as defined in 11 U.S.C. section 101(51D). The Debtor continues in possession of its property and manages its business as a debtor-in-possession. No official committee of unsecured creditors has been appointed. On or about Dec. 17, 2018, Canon and the Debtor entered an equipment lease, whereby Fuigo leased two photocopy machines from Canon for sixty months, along with equipment maintenance services. While the Lease does not specify an end date, a term of sixty months starting from December 2018 would end December 2023. On Nov. 15, 2019, Canon filed the Canon Claim as an unsecured non-priority claim in the amount of $91,215.23, comprised of the balance of future remaining payments under the Lease of $70,716.23, and the "estimated equipment value" of $20,500. The Schedule attached to the Canon Claim indicates a $0 balance for lease payment arrears. The Debtor's Objection seeks to expunge the Canon Claim in its entirety. The Debtor argues that the Canon Claim should be expunged pursuant to Bankruptcy Code section 502(b) because Canon has failed to assert any legitimate and non-hypothetical prepetition claim. The Lease is an executory contract with no prepetition arrears; it has not been rejected thus far so no rejection damages can be asserted. The Debtor retains the right to continued possession of the Copiers, and further retains the right to purchase the Copiers at the end of the Lease term. Therefore, the Debtor maintains that Canon has no basis to assert an unsecured claim against the Debtor's estate for the value of the equipment. While the Lease contains an ipso facto clause that seemingly would permit Canon to terminate the contract when "a petition or proceeding is . . . filed . . . under any bankruptcy or insolvency law" (Lease section 7), the Debtor argues that this clause is unenforceable under section 365(e) of the Bankruptcy Code. Lastly, the Debtor argues that expunging the Canon Claim will not prejudice Canon's rights to file a new claim should the Debtor reject the Lease. The Canon Claim was prima facie valid when filed. After the Debtor objected to the Canon Claim with a bona fide legal argument, the burden shifted back to Canon to offer evidence supporting the validity of their claim. By failing to respond to the Objection, Canon did not meet its burden to prove that the Canon Claim should be allowed. According to the Court, the Canon Claim was filed as an unsecured claim with no legal basis for asserting it. The Schedule attached to the Canon Claim expressly states that there are no prepetition arrears and that the claim is only for future payments. There are no rejection damages because the Debtor has not yet rejected the Lease. And the Debtor retains the right to assume the Lease prior to the confirmation of a plan. Therefore, until the Lease is rejected. Canon does not have a basis to assert a claim under section 365(g). Section 365(e) prevents Canon from automatically terminating or modifying the contract upon the Debtor's filing for bankruptcy. Since the Debtor still has time to reject or assume the Lease, Canon has no legal basis to assert its $70,716.23 claim for the remaining Lease term. Canon also asserts a $20,500 claim for the estimated equipment value as part of the end of Lease purchase option. Judge Glenn says the Lease provides that the Debtor has until the end of the term to purchase the Copiers, but the Lease term has not expired. Since the Debtor still has the right to purchase or return the Copiers, Canon does not have a claim for the Copiers' value. A copy of the Court's Memorandum Opinion dated July 28, 2020 is available at https://bit.ly/33YkJgr from Leagle.com. About Fuigo LLC Fuigo LLC is a provider of workspace and business solutions for interior designers. It is a technology company providing end-to-end business software. Fuigo filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-12662) on Aug. 16, 2019. In the petition signed by CEO Maurice Riad, the Debtor estimated $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Todd E. Duffy, Esq., at DuffyAmedeo LLP, is the Debtor's counsel. HERTZ GLOBAL: Announces Changes in Finance Leadership ----------------------------------------------------- Hertz Global Holdings, Inc. (NYSE: HTZ), a global leader in car rental, in mid-August announced that Chief Financial Officer (CFO) Jamere Jackson, has resigned to pursue a new opportunity. Mr. Jackson will remain with Hertz until September 11, 2020, to assist in the transition of his responsibilities. The Company also announced the promotion of R. Eric Esper to Executive Vice President of Finance, Chief Financial Officer, and Kenny K. Cheung to Executive Vice President of Finance, Chief Operational Finance and Restructuring Officer, effective immediately. They will report directly to Paul Stone, Hertz's President and Chief Executive Officer, as will the Company's Treasurer, Scott Massengill. Mr. Esper has served as Senior Vice President and Chief Accounting Officer of Hertz since November 2018. He previously served as Vice President and Controller of the Company beginning March 2018. From July 2010 to March 2018, Mr. Esper held a variety of financial leadership roles with Norwegian Cruise Line Holdings Ltd., most recently as Vice President, Brand Finance & Strategy, and Vice President and Controller. Prior to that, Mr. Esper was with PricewaterhouseCooper, LLC. He is a Certified Public Accountant. Mr. Cheung has served as Senior Vice President of Global Financial Planning & Analysis and Chief Financial Officer of North America at Hertz. He joined the Company in December 2018. He previously held a variety of financial leadership roles with Nielsen Holdings, PLC, an information, data and measurement firm, most recently as Global Chief Audit Executive, and prior to that as a regional Chief Operating Officer after holding the position of regional Chief Financial Officer. Prior to Nielsen, Mr. Cheung worked for General Electric in various roles across Supply Chain, Operations, and FP&A. Mr. Massengill has served as Senior Vice President and Treasurer of Hertz since July 2008. Prior to joining Hertz, Mr. Massengill served as Chief Financial Officer for the $2 billion domestic residential heating and air conditioning business division of Trane Inc. (formerly American Standard Companies Inc.) from 2005 to 2008. Prior to that, he was Vice President and Treasurer at American Standard from 2001 to 2005. Mr. Massengill has also held management level financial positions at Bristol–Myers Squibb, AlliedSignal and Exxon. "The finance function is extremely important. This leadership structure provides us with deep expertise that will be especially valuable as we navigate the uncertainty around travel that the global pandemic has produced and as we work our way through the bankruptcy process," said Stone. "We're fortunate to have incredible bench strength on our Finance team. I've worked closely with Eric, Kenny and Scott for several years, and appreciate the value they add through the different perspectives they bring, while remaining tightly aligned on vision and strategy." About Hertz Global Holdings Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. The Company also operates a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court (Bankr. D. Del. Case No. 20-11218). The Hon. Mary F. Walrath is the presiding judge. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor. Richards, Layton & Finger, P.A., is the local counsel. Prime Clerk LLC is the claims agent, maintaining the page https://restructuring.primeclerk.com/hertz IAMGOLD CORP: Moody's Rates New Senior Unsecured Notes 'B2' ----------------------------------------------------------- Moody's Investors Service assigned a B2 rating to IAMGOLD Corporation's proposed new senior unsecured notes. Proceeds will be used to refinance the company's existing 7.00% Senior Notes due 2025. Assignments: Issuer: IAMGOLD Corporation Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD5) RATINGS RATIONALE IAMGOLD (B1 CFR) benefits from 1) low leverage (1.4x LTM Q2/20), 2) very good liquidity (SGL-1) with cash in excess of debt, and 3) conservative financial policies. IAMGOLD is constrained by 1) the company's high operating cash costs ($1100/gold equivalent ounce ("GEO") LTM Q2/20) (Revenue - EBITDA)/GEO), 2) its moderate scale (800 thousand GEOs), 3) a concentration of production and cash flows at its two largest mines, 4) execution risk in developing its Côté Gold project and 5) geopolitical risk (mines in Burkina Faso, and Suriname). IAMGOLD together with joint venture partner Sumitomo Metal Mining Co. Ltd., sanctioned the construction of the Côté Gold project in Ontario Canada. With a capital obligation of $875 — $925 million for IAMGOLD's 70% share of project construction costs, the project will consume a material amount of IAMGOLD's available liquidity through 2023 and introduce project execution risk. However, once completed, the company will benefit from improved diversification in a low risk jurisdiction, and an increased production profile from a long life mine with expected lower cash costs. IAMGOLD has very good liquidity (SGL-1). The company had $832 million in cash and $6 million in short term investments at June 2020 and a $500 million committed facility ($472 million matures Jan 2024, remainder matures Jan 2023) which is largely undrawn. Moody's expects the company to be free cash flow negative by about $300 million over the next 12 months, using a gold price sensitivity of $1300. IAMGOLD has no re-financing risk over the near term; its credit facility matures in January 2024; and its $400 million in notes are due in 2025 (which are to be refinanced in the proposed transaction). IAMGOLD's credit facility includes financial covenants with which Moody's believes the company will remain comfortably in compliance. The stable outlook reflects IAMGOLD's strong liquidity position which provides it with financial flexibility to progress on its capital projects associated with increasing production and lowering its cash costs. It also assumes that IAMGOLD will fund negative free cash flow largely with its sizeable cash balance. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The CFR rating could be upgraded to Ba3 if IAMGOLD is able to achieve increased mine diversity and demonstrate its ability to execute on new mine development without meaningful setbacks, total cash costs per ounce (revenue less adjusted EBITDA divided by total production) are maintained below $800/oz ($1100/GEO LTM Q2/20) , leverage is sustained below 2.5x (1.4 LTM Q2/2020), and liquidity remains good. The CFR rating could be downgraded to B2 if Moody's expects IAMGOLD's adjusted debt/EBITDA to be sustained above 3x (1.4 LTM Q2/20), or should the company's liquidity position materially worsen, most likely due to new development costs consuming most of its currently very good liquidity. The principal methodology used in this rating was Mining published in September 2018. Headquartered in Toronto, Canada, IAMGOLD owns and operates three gold mines: Rosebel (95% owned, ~251koz of attributable gold production in 2018) in Suriname, Essakane (90%, ~368koz) in Burkina Faso, and Westwood (100%, ~91koz) in Canada. The company also has two primary gold mine development projects: Côté Gold in Ontario, Canada, and Boto in Senegal. Revenues LTM June 2020 were $1.1 billion. ISTAR INC: Egan-Jones Lowers Sr. Unsecured Ratings to B+ -------------------------------------------------------- Egan-Jones Ratings Company, on September 1, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by iStar Incorporated to B+ from BB-. Headquartered in New York, New York, iStar Incorporated operates as a real estate investment company. JETBLUE AIRWAYS: S&P Revises Liquidity Assessment, Affirms 'B+' ICR ------------------------------------------------------------------- S&P Global Ratings revised its assessment of JetBlue Airways Corp.'s liquidity to adequate from less than adequate following the company's capital-raising initiatives since June 2020 that have aided its liquidity. S&P also affirmed its ratings, including its 'B+' issuer credit rating on JetBlue and its 'B+' issue-level rating (recovery rating: '3') on the company's secured term loan. JetBlue has raised over $2 billion in liquidity since June 2020 in the form of enhanced equipment trust certificates (EETCs) (totaling about $920 million), a $750 million senior secured term loan, and sale-leaseback transactions. The company has benefited from the U.S. government's Payroll Support Program, which is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, having received $936 million for payroll support in April 2020. A portion of this ($251 million) is in the form of a low-interest loan. JetBlue has already repaid a large portion of the 364-day facility that matures in March 2021 (about $800 million of the original $1 billion has been repaid) using the proceeds from its initiatives. Therefore, S&P now expects that JetBlue's sources of liquidity will be about 1.4x its uses over the next 12 months, despite the rating agency's expectation the company will report substantial negative cash flow in 2020. S&P expects JetBlue's operating performance to remain weak in 2020 due to the steep decline in airline passenger traffic, with some recovery expected in 2021, resulting in FFO to debt improving to the high-teens percent area. "We would lower our rating on JetBlue over the next year if we believe its recovery will be more prolonged or weaker than our base-case scenario, resulting in continued high cash burn and FFO to debt in the low-teens percent area or lower in 2021. We could also lower the rating if the company's liquidity position weakens materially," S&P said. "Although unlikely in 2020, we could revise the outlook to stable if the recovery in airline passenger traffic is stronger than our base-case scenario, resulting in FFO to debt of about 20% in 2021," the rating agency said. KB US HOLDINGS: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in the Chapter 11 cases of KB US Holdings, Inc. and its affiliates. The committee members are: 1. Suburban Disposal Inc. 54 Montesano Road Fairfield, NJ 07004 Attention: Kerry Roselle, Vice President 2. United Food and Commercial Workers International Union 219 Paterson Avenue Little Falls, NJ 07424 Attention: David T. Young UFCW International VP and Director of Region 1 Northeast Attention: David Aaron Brenner Senior Analyst at UFCW 3. W.P. Carey 50 Rockefeller Plaza, 2nd Floor New York, NY 10020 Attention: Nicolas Isham, Executive Director and Katherine Speltz, Associate Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About KB US Holdings KB US Holdings, Inc. is the parent company of King Food Markets and Balducci's Food Lover's Market. Headquartered in Parsippany, N.J., Kings Food Markets has been a specialty and gourmet food market across the East Coast. In 2009, Kings Food Markets acquired specialty gourmet retail grocer, Balducci's Food Lover's Market. As of the petition date, the Debtors operate 35 supermarkets across New York, New Jersey, Connecticut, Virginia, and Maryland. KB US Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No. 20-22962) on Aug. 23, 2020. At the time of the filing, Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Sean H. Lane oversees the cases. Debtors have tapped Proskauer Rose LLP as their legal counsel, Peter J. Solomon as investment banker, Ankura Consulting Group LLC as financial advisor, and Prime Clerk LLC as claims, noticing and solicitation agent. KC CULINARTE: S&P Lowers ICR to 'CCC' on Deteriorating Liquidity ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based KC Culinarte Holdings L.P. to 'CCC' from 'CCC+'. Concurrent with the downgrade, S&P lowered its issue-level rating on the company's first-lien facility to 'CCC' from 'CCC+'. The recovery rating remains '3'. The downgrade reflects KC's weak operating performance and deteriorating liquidity position. Through the first three quarters of fiscal 2020, food service and national food service account revenues declined a combined 45% from the same prior-year period. We assess adjusted leverage in the double digits for the 12 months ended June 30, compared to about 6x last year, due primarily to a roughly 60% decline in adjusted EBITDA resulting from foodservice weakness and facility integration difficulties." Additionally, KC's revenues derived from soup well stations at retail locations such as Whole Foods were also affected by COVID-19-related closures. This substantially deteriorated cash flow, with an operating cash outflow of about $20 million through the first three quarters. The company's liquidity position was already weakened over first half fiscal 2020, due to operating difficulties at the Everett, Wash., facility that led to free cash outflow in excess of $15 million. KC's liquidity position deteriorated further in the quarter due to operating losses and it completely drew down the availability on its revolver, leaving $50 million cash as its sole source of liquidity. "We believe a near-term liquidity shortfall is possible because we expect the company to continue burning cash over the next few quarters and food service revenues will continue to be down at least 60%. If so, we expect the sponsor could step in to provide emergency funding," S&P said. A recovery in food service will be slow. S&P expects a sales decline of about 20% for fiscal 2020, driven primarily by lower sales in the food service, national food service account, and self-serve retail segments. While the company has captured some of the shift to dining at home in its mass and retail channels, it relies heavily on food service (35% of revenues in the third quarter of fiscal 2019) and national food service accounts (15%). Although outdoor dining has reopened and indoor dining in certain states has reopened with limited capacity, food service revenues were down 83% from a year earlier for the third quarter of fiscal 2020. Heading into the back half of the calendar year, colder weather could reduce dining out and further weaken KC's historical peak selling season. It is unclear when the food service industry will recover, and it will largely depend on the handling of the coronavirus pandemic. Additionally, a sluggish macroeconomic recovery and weakened discretionary spending could also result in less dining out and trading down to cheaper soup alternatives in the retail segment. KC is working to offset sales decline through cost reductions, though profitability will sharply decline due to weaker demand. The company has worked to reduce costs, temporarily closing and re-opening its manufacturing facility in Green Bay, Wis., which primarily relies on restaurant revenues. Additionally, KC also instituted furloughs and wage reductions at the Lynn, Mass. and Everett, WA. sites. No furloughs or wage reductions occurred at Union City, Calif., which benefitted from retail and meal kit customer bases. "The company has focused on improving Everett operations, and we expect it should service its larger retail and mass customers; if it cannot, Lynn can pick up the capacity. With lower volumes expected for the seasonal soup selling season in fiscal 2020, overhead absorption inefficiencies will continue," S&P said. "We expect leverage to remain in the high-double-digit area through fiscal 2020 and for negative free cash flow of about $40 million-$45 million. This severely constrains KC's liquidity position given our expectation of ongoing cash burn into fiscal 2021 until the food service business substantially recovers," the rating agency said. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook reflects the risk of a lower rating, driven by continued deterioration in operating performance, increasing the likelihood of a debt restructuring or liquidity constraint during the next year. "We could lower the ratings if KC restructures its debt whereby lenders receive less than par, or if its liquidity position continues to deteriorate such that we believe a default is imminent. This could occur if operations remain substantially disrupted by COVID-19-related food service shutdowns or weaker consumer discretionary spending," S&P said. "We could raise the ratings if operating performance improves, leading to sustained positive free cash flow generation, sufficient debt service coverage, and if we believe it is unlikely the company would complete a debt restructuring." This could occur if COVID-19 restrictions are lifted and consumers go out again, such that food service revenues return or if KC replaces lost food service revenues through other channels," the rating agency said. KIMBLE DEVELOPMENT: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Kimble Development of Baton Rouge I, L.L.C. 10606 Coursey Blvd., Suite B Baton Rouge, LA 70816 Business Description: Kimble Development of Baton Rouge I, L.L.C. classifies its business as Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: September 8, 2020 Court: United States Bankruptcy Court Middle District of Louisiana Case No.: 20-10632 Debtor's Counsel: Tristan Manthey, Esq. HELLER, DRAPER, PATRICK, HORN & MANTHEY LLC 650 Poydras Street Suite 2500 New Orleans, LA 70130 Tel: 504-299-3300 Email: tmanthey@hellerdraper.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michael D. Kimble, authorized representative. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors at the time of the filing. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SYFBWKY/Kimble_Development_of_Baton_Rouge__lambke-20-10632__0001.0.pdf?mcid=tGE4TAMA LINCOLN COUNTY, GA: S&P Cuts 2015 Revenue Bond Rating to 'BB+' -------------------------------------------------------------- S&P Global Ratings lowered its long-term rating on Lincoln County, Ga.'s series 2015 water and sewerage system revenue refunding bonds to four notches 'BB+' from 'A-'. The ratings have also been placed on CreditWatch with negative implications. "The lowered rating reflects the county's inability to generate net revenues at least equal to its 1.2x rate covenant for three fiscal years from 2017-2019 (ended June 30)," said S&P Global Ratings credit analyst Scott Garrigan. S&P has also observed that pre-approved rate increases to occur through the 2020 fiscal year have failed to materially increase debt service coverage meaningfully above 1x or unrestricted liquidity even to levels that represent 30 days of operating expenses (at June 30, 2019, the ending unrestricted cash in the water fund was $37,000). "Because we neither have any evidence of corrective actions to remedy the rate covenant violations nor any projections to indicate stronger future financial performance, we do not consider the rating to be investment grade any longer," said Mr. Garrigan. S&P will continue its outreach to management to ascertain if any plans exist for generating stronger financial margins in the water fund, and whether it has any updated forecasts that the rating agency would consider indicative of materially stronger financial performance compared to historical trends. "The CreditWatch placement with negative implications accounts for our view that there is a one-in-two chance that the rating could fall further if we do not believe that the county has been able or willing to make meaningful steps to improve the financial condition of the water fund, especially given the context of the repeated rate covenant violations and marginal liquidity," added Mr. Garrigan. S&P could remove the CreditWatch if its review of the county's unaudited information and forecasts makes it believes that the county will be able to achieve compliance with the rate covenant and sustain that performance through multiple fiscal years. Only when the financial condition improves significantly would S&P likely raises the rating above 'BB+'. LOS ANGELES SCHOOL: Case Summary & 19 Unsecured Creditors --------------------------------------------------------- Debtor: Los Angeles School of Gymnastics, Inc. 8450 Higuera Street Culver City, CA 90232 Business Description: Los Angeles School of Gymnastics, Inc. -- https://www.lagymnastics.com -- offers gymnastics programs for kids. The school has served families with gymnastics instruction, innovative programs and well- rounded curriculum supporting children since 1975. Chapter 11 Petition Date: September 8, 2020 Court: United States Bankruptcy Court Central District of California Case No.: 20-18203 Judge: Hon. Deborah J. Saltzman Debtor's Counsel: Michael S. Kogan, Esq. KOGAN LAW FIRM, APC 1849 Sawtelle Blvd., Suite 700 Los Angeles, CA 90025 Tel: 310-964-1690 Email: mkogan@koganlawfirm.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Tanya Berenson, chief executive officer. A copy of the petition containing, among other items, a list of the Debtor's 19 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EUJ6RRI/Los_Angeles_School_of_Gymnastics__cacbke-20-18203__0001.0.pdf?mcid=tGE4TAM LOUISIANA LOCAL: Moody's Review $27MM 2019 Bonds for Downgrade -------------------------------------------------------------- Moody's Investors Service placed the Ba2 rating on review for possible downgrade on the approximately $27,000,000 Louisiana Local Government Environmental Facilities and Community Development Authority Student Housing Revenue Bonds (Provident Group - ULM Properties LLC - University of Louisiana at Monroe Project) Series 2019A and Series 2019B. RATINGS RATIONALE The review for possible downgrade is based on project's failure to timely complete construction for the inaugural Fall 2020 semester and continued uncertainty around when the project will be completed. The lack of rental revenue evident at the project's opening could strain the project's liquidity position and rapidly deplete trustee-held repair and replacement, surplus, etc. accounts. The review will focus on the sources of short-term liquidity that will be pledged towards debt service and will consider direct and indirect university support, if any. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and financial market declines 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. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Upgrade would be unlikely in the near term due to construction and initial lease up risk FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Prolonged construction delays or failure to lease up at the expected occupancy and rent levels - Weak financial performance as measured by low and/or declining debt service coverage levels LEGAL SECURITY Project revenues will constitute the primary source of revenue for the rated debt. The bond trustee will also have a security interest in various funds, such as the Bond Fund, Debt Service Reserve Fund, and the Repair and Replacement Fund, as provided by the Trust Agreement. USE OF PROCEEDS Not Applicable PROFILE Provident Group- ULM Properties, LLC, is a single member LLC of which Provident Resources Group Inc., a non-profit corporation is the sole member. The Borrower was formed for the purpose of developing, constructing, owning and operating student housing. The Borrower will issue the tax-exempt bonds to construct the Project and fund the required reserves under the Trust Indenture. METHODOLOGY The principal methodology used in these ratings was Global Housing Projects published in June 2017. LS PARENT: S&P Affirms 'B' ICR on Refinancing Deal; Outlook Stable ------------------------------------------------------------------- S&P Global Ratings affirmed all its ratings, including the 'B' issuer credit rating, on U.S.-based LS Parent Corp. (Pre-Paid Legal Services Inc. or LegalShield), which is currently planning to issue a $135 million add-on to its first-lien term loan and use the proceeds and cash from its balance sheet to repay most of its $180 million second-lien term loan. The pandemic has had minimal negative effects on the company, but cancellations could increase if unemployment remains high for a prolonged period. So far disruption of the demand for LegalShield's products as a result of the pandemic has been minimal. Unlike many other consumer products and consumer services companies, it does not rely on retail store fronts or physical manufacturing facilities to make and sell its products, so closures around the country in March, April, and May were not an issue. Typically about one-third of its revenue comes from its network of multilevel marketing sales associates. Multilevel marketing can be modestly countercyclical, and the company increased its number of sales associates during this period with high unemployment. Moreover, unlike many other jobs in the so-called gig economy, network sales associate job duties can be performed virtually, which makes it attractive as people across the country are still trying to limit in-person interactions to help slow the spread of the coronavirus. Still, if unemployment remains high and consumer spending remains low for a prolonged period, membership cancellations could increase and sales could decline. S&P expects leverage to be high, in the mid- to high-6x area, mainly due to a debt-financed dividend in 2019. The proposed transaction is modestly deleveraging, since the company is using cash from the balance sheet (along with proceeds from the proposed first-lien term loan add-on) to repay its second-lien term loan. S&P does not net cash in its calculation of LegalShield's leverage metrics. However, leverage is still high because of debt issued last year: In March 2019, LegalShield used its leverage capacity to issue a rather large debt-financed dividend. In July 2019, the company announced another add-on to its term loan to fund an acquisition of a provider of legal and identity theft solutions. Although the latter transaction was roughly leverage neutral on a pro forma basis, the transactions underscore S&P's assessment that LegalShield's financial sponsor owner will keep leverage high. S&P believes the company intends to repay additional debt to temporarily rebuild its leverage capacity, but the rating agency does not expect it to sustain significantly lower leverage given its recent history of debt-financed dividends and acquisitions. Regardless, S&P does not expect the company to increase and sustain leverage above the rating agency's 7x downgrade threshold. LegalShield has successfully diversified toward its business solutions and direct-to-consumer channels, but the pandemic has caused a channel mix shift, potentially hurting margins. Historically, LegalShield's primary distribution channel was its network of multilevel marketing sales associates. S&P views sales in its business solutions and direct-to-consumer channels more favorably than sales in its network segment because customer acquisition costs are lower. However, due to the pandemic, channels are shifting back toward the network channel and away from business solutions. The unemployment caused by the pandemic has led to higher recruiting of sales associates, which help sales in the network channel. Conversely, sales in the business solutions channel are lower due to a slowdown in business activity and many businesses deferring decisions related to legal plan providers during this period of heightened uncertainty. S&P expects this trend to continue while unemployment is high and business activity is slower than normal. Once the economy returns to growth, S&P expects the revenue shift to favor the business solutions segment, but sustained growth in this channel could be challenging because LegalShield faces a lot of competition. It is a relatively newer entrant into the space and competes with larger established players with greater financial wherewithal such as MetLife and Hyatt. LegalShield benefits from revenue visibility due to its subscription-based business model with good retention rates. Still, S&P continues to view the pre-paid legal services and identity theft protection industries as highly competitive with few barriers to entry and low switching costs. Despite the positive momentum, LegalShield has achieved over the past few years, S&P views its products as discretionary and susceptible to customer cancellations during economic downturns. "The stable outlook on LegalShield reflects our belief that the company will continue to generate healthy free cash flow of about $40 million-$60 million and will manage leverage toward the mid-6x area," S&P said. S&P could lower its ratings on LegalShield if free operating cash flow deteriorates below $10 million or leverage increases above 7x on a sustained basis. This would likely be caused by prolonged unemployment in the U.S. that leads to higher than normal cancellation rates and higher than expected costs to acquire new customers. "Although unlikely given its private-equity ownership, we could raise our ratings on LegalShield if we believe it will sustain leverage of less than 5x and a funds from operations-to-debt ratio of more than 12%. To raise the rating, the company's sponsors would need to demonstrate a commitment to maintaining such leverage," the rating agency said. LUBY'S INC: Board Adopts Plan of Liquidation and Dissolution ------------------------------------------------------------ Luby's, Inc.'s Board of Directors, after considering a number of strategic alternatives, has approved and adopted a plan of liquidation and dissolution that provides for the sale of the Company's assets and distribution of the net proceeds to the Company's stockholders, after which the Company will be dissolved. This follows Luby's June 3, 2020 announcement that it is seeking the sale of its assets. Approval of the Plan by the Company's stockholders is the next step in connection with these matters. The Company intends to hold a special meeting of stockholders to seek approval of the Plan for which it will file preliminary proxy materials with the Securities and Exchange Commission. The Company believes that the sale of assets pursuant to its monetization strategy and the dissolution will provide stockholders with an opportunity to receive cash distributions that maximize the value of their investment. The assets to be sold include operating divisions Luby's Cafeterias, Fuddruckers, and the Company's Culinary Contract Services business, as well as the Company's real estate. The Company will also provide an opportunity at the special meeting for its stockholders to vote on maintaining or revoking the Rights Agreement, often referred to as a "poison pill." In addition, the Company will also seek stockholder approval to reduce the size of the Board of Directors and to permit action of stockholders by written consent. The Plan of Liquidation outlines an orderly sale of the Company's businesses, operations, and real estate, and an orderly wind down of any remaining operations. If the Company's stockholders approve the Plan, the Company intends to attempt to convert all of its assets into cash, satisfy or resolve its remaining liabilities and obligations, including contingent liabilities and claims and costs associated with the liquidation of the Company, and then file a certificate of dissolution. The Company currently anticipates that its common stock will be delisted from the NYSE upon the filing of the certificate of dissolution, which is not expected to occur until the earlier of the completion of the asset sales or three years, but the delisting of its common stock may occur sooner in accordance with the applicable rules of the NYSE. The decision by the Board to approve the Plan follows a comprehensive review of the Company's operations and assets led by a Special Committee of the Board comprised of independent directors Gerald Bodzy, Twila Day, Joe McKinney, Gasper Mir, John Morlock, and Randolph Read. Messrs. Bodzy and Read, Co-Chairmen of the Special Committee, jointly commented, "This Plan of Liquidation is the next logical step in the Company's previously announced plan to maximize value of the Company through the sale of its operations and assets. Our stockholders have expressed their support for seeking alternatives to continuing to operate the Company's restaurants in their current form, and we believe the Plan of Liquidation will allow the Company to accomplish that task in the most efficient manner." Christopher J. Pappas, chief executive officer and president of Luby's, said, "We believe that moving forward with a Plan of Liquidation will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the Company should a compelling offer that delivers superior value be made. The Plan also continues to provide for the potential to place the restaurant operations with well-capitalized owners moving forward." If at any time, including after the Plan is approved by stockholders, the Company receives an offer for a corporate transaction that, in the view of the Board of Directors, will provide superior value to its stockholders in comparison to the value of the estimated distributions under the Plan, taking into account factors that could affect valuation, including timing and certainty of closing, credit market risks, proposed terms and other factors, the Plan could be abandoned in favor of such an alternative transaction. While no assurances can be given, the Company currently estimates, assuming the sale of its assets pursuant to its monetization strategy, that it could make aggregate liquidating distributions to stockholders of between approximately $92 million and $123 million (approximately $3.00 and $4.00 per share of common stock, respectively, based on 30,752,470 shares of common stock outstanding as of Sept. 2, 2020). Aggregate payments will likely be paid in one or more distributions. The Company cannot predict the timing or amount of any such distributions, as uncertainties exist as to the value it may receive upon the sale of assets pursuant to its monetization strategy, the net value of any remaining assets after such sales are completed, the ultimate amount of expenses associated with implementing its monetization strategy, liabilities, operating costs and amounts to be set aside for claims, obligations and provisions during the liquidation and winding-up process and the related timing to complete such transactions and overall process. Duff & Phelps Securities, LLC, acted as financial advisor and Gibson, Dunn & Crutcher LLP served as legal advisor to the Special Committee in connection with the Committee's strategic review. The Special Committee recommended the approval of the Plan to the full Board of Directors which then unanimously approved the Special Committee's recommendation. About Luby's Luby's, Inc. (NYSE: LUB) operates two core restaurant brands: Luby's Cafeterias and Fuddruckers. Luby's is also the franchisor for the Fuddruckers restaurant brand. In addition, through its Luby's Culinary Contract Services business segment, Luby's provides food service management to sites consisting of healthcare, corporate dining locations, sports stadiums, and sales through retail grocery stores. Luby's reported a net loss of $15.23 million for the year ended Aug. 28, 2019, compared to a net loss of $33.57 million for the year ended Aug. 29, 2018. "The full extent and duration of the impact of the COVID-19 pandemic on our operations and financial performance is currently unknown," said Luby's in its Quarterly Report for the period ended June 03, 2020. "The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations and its ability to generate proceeds from real estate property sales to meet its obligations. The above conditions and events, in the aggregate, raise substantial doubt about our ability to continue as a going concern. Notwithstanding the aforementioned substantial doubt, the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. Management has assessed the Company's ability to continue as a going concern as of the balance sheet date, and for at least one year beyond the financial statement issuance date. The assessment of a company's ability to meet its obligations is inherently judgmental." LVI INTERMEDIATE: Proposed Sale Draws Scrutiny of FTC ----------------------------------------------------- Leslie A. Pappas, writing for Bloomberg Law, report Federal Trade Commission has opened a "non-public inquiry" into bankrupt LASIK provider LVI Intermediate Holdings Inc.'s proposed $35 million sale to a competitor, LVI's attorney said. The company intends "to cooperate fully and promptly," G. David Dean of Cole Schotz P.C., an attorney for LVI, said in a letter filed July 24 with the U.S. Bankruptcy Court for the District of Delaware. LVI's letter comes three days after a committee of unsecured creditors objected to LVI's decision to cancel a planned bankruptcy auction and sell itself in a private sale to Kismet New Vision Holdings LLC. About LVI Intermediate Holdings Inc. Headquartered in West Palm Beach, Fla., LVI Intermediate Holdings (doing business as Vision Group Holdings) develops and manages through its various subsidiaries two of the leading LASIK surgery brands in the United States: The LASIK Vision Institute and TLC Laser Eye Centers. It also owns and manages certain select general ophthalmology practices and QuaslightLasik, a licensed Preferred Provider Organization for LASIK surgery providers. LVI Intermediate Holdings, Inc. and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 20-11413) on May 29, 2020. The Hon. Karen B. Owens oversees the cases. In the petition signed by Lisa Melamed, interim chief executive officer, the Debtors were estimated to have $1 million to $10 million in assets and $100 million to $500 million in liabilities. The Debtors tapped Cole Schotz P.C. as counsel; Alvarez & Marsal Capital as financial advisor; Raymond James & Associates, Inc., as investment banker; and Donlin Recano & Company, Inc. as claims and noticing agent. MAGAZINE INCORPORACOES: Chapter 15 Case Summary ----------------------------------------------- Chapter 15 Debtor: Magazine Incorporacoes S.A., et al. Avenida Carlos Gomes, 141, conj. 311 Bairro Auxiliadora Porto Alegre - RS, 90480 Brazil Chapter 15 Petition Date: September 8, 2020 Court: United States Bankruptcy Court Southern District of Florida Chapter 15 Case No.: 20-19746 Judge: Hon. Laurel M. Isicoff Foreign Representative: Medeiros & Medeiros Administracao Judicial Av. Dr. Nilo Pecanha 2900/701 Chac das Pedras, T. Comercial Iguatemi Porto Alegre - RS 91330 Brazil Foreign Proceeding: Business, Corporate Reorganization & Bankruptcy Court - Rio Grande do Sul Foreign Representatives' Counsel: Leyza Blanco, Esq. SEQUOR LAW P.A. 1111 Brickell Avenue, Suite 1250 Miami, FL 33131 Tel: (305) 372-8282 Email: lblanco@sequorlaw.com Estimated Assets: Unknown Estimated Debts: Unknown A full-text copy of the Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/U77JXWY/Magazine_Incorporacoes_SA_et_al__flsbke-20-19746__0001.0.pdf?mcid=tGE4TAMA MBIA INC: Egan-Jones Cuts Senior Unsecured Ratings to CCC --------------------------------------------------------- Egan-Jones Ratings Company, on August 31, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by MBIA Incorporated to CCC from B-. EJR also downgraded the rating on commercial paper issued by the Company to C from B. Headquartered in Purchase, Harrison, New York, MBIA Incorporated provides financial guarantee insurance and other forms of credit protection. MCGRAW-HILL EDUCATION: S&P Lowers ICR to 'CCC+'; Outlook Negative ----------------------------------------------------------------- S&P Global Ratings lowered all of its ratings on McGraw-Hill Education Inc. (MHE), including its issuer credit rating, by one notch, to 'CCC+' from 'B-'. "The downgrade reflects our view that MHE's existing capital structure is unsustainable and refinancing risk is elevated. Although we don't envision a near-term default, we now view MHE's existing capital structure as unsustainable and the refinancing risk elevated from its sizable debt maturities of about $1.8 billion in 2022," S&P said. In addition, S&P sees increasing risk that the company could pursue some form of debt restructuring given the debt facilities are trading at a steep discount. The rating agency believes lower college student enrollment trends this fall semester and business disruptions due to the social distancing restrictions imposed to limit the spread of the coronavirus will negatively affect MHE's operating performance this year, despite an accelerated demand for its digital product offerings and cost-reduction efforts. The ultimate impact from lower student enrollment because of the coronavirus pandemic remains uncertain; S&P expects MHE's operating performance declines this year will further weaken credit metrics. The company's performance during its fiscal second quarter (ended Sept. 30) accounts for roughly 35% of revenue and about 70% of total adjusted EBITDA on a generally accepted accounting principles (GAAP) basis. The downgrade also incorporates the risk that states could delay sizable K-12 state adoptions over the next 12-24 months because of the current economic challenges and outlook. S&P expects adjusted leverage to increase to over 10x, a free operating cash flow (FOCF)-to-debt ratio of less than 5%, and EBITDA interest coverage of about 1.5x over the next 12-18 months. While liquidity is currently sufficient, the inability to refinance the overall capital structure is a risk. S&P currently assesses MHE's liquidity as adequate because the rating agency expects it to maintain sufficient cash on hand and cash flow generation to cover its operating needs over the next 12 months without relying on borrowings from its revolving credit facility. The company's $350 million revolver, which matures on May 4, 2021, was undrawn as of June 30, 2020. MHE will need to refinance its 2022 debt maturities (accounting for roughly 80% of its capital structure) over the coming 12-18 months, which could become increasingly difficult if the economic and operating environments remain challenged. MHE has a good market position in higher education and the K-12 education publishing market. MHE has a solid market position as one of the three largest U.S. providers in both higher education and K-12 education publishing. MHE's higher education segment benefits from strong brand recognition and a breadth of titles, including long-respected textbooks across key subject areas. However, the company has a narrow product focus in educational learning solutions, with exposure to declining higher education enrollment; pricing pressure; and competition from its larger peers, used and rental textbooks, and open educational resources in its higher education segment. In addition, cash flows from its K-12 segment can be volatile because of cyclical state and local budgetary spending, as well as intense competition for state adoption. The company has made good progress in transitioning its offerings to a digital format amid the secular challenges in the higher education market. Digital sales account for 77% of the higher education segment compared with about 58% in 2017, and S&P expects the demand for these product offerings to accelerate because of increased distance learning due to the pandemic. The negative outlook reflects the possibility of a downgrade if liquidity tightened such that the company needed to draw on its revolver or if S&P envisioned a default scenario, including a debt restructuring within a year. "We could lower our rating on MHE if we believed there were an increased risk of a default in the next 12 months. In this scenario, the company's performance would not rebound sufficiently in advance of its 2022 maturities, such that we believed a refinancing at par were increasingly unlikely. We could also lower the rating if we believed the likelihood of a below-par repurchase of the senior notes had materially increased," S&P said. "We could raise the rating if MHE refinanced its near-term debt maturities at similar terms/pricing and materially improved and sustained operating performance that would enable deleveraging and an FOCF-to-debt ratio in the 3%-5% range," the rating agency said. NEIMAN MARCUS: Closes Bellevue, WA Location ------------------------------------------- Paul Roberts, writing for Seattle Times, reports that Neiman Marcus is scheduled to close its Bellevue, Washington, location. When Neiman Marcus opened a store in Bellevue in 2009, many locals were skeptical that a shop specializing in four-figure cocktail dresses and handbags could survive the Great Recession. But while the upscale scale retailer proved its skeptics wrong in that recession, it isn't so lucky this time. Neiman Marcus confirmed that its Bellevue store, at The Shops at The Bravern, is among four locations slated to be permanently closed as part of its bankruptcy. Bloomberg News reported that the other three are in Fort Lauderdale and Palm Beach, Florida, and in New York City's Hudson Yards, where a three-story Neiman Marcus store had opened only in 2019. The closures are the latest evidence of the damage that the pandemic and recession are doing to a bricks-and-mortar retail sector that was already struggling. Retail experts say Dallas-based Neiman Marcus had seen sales lag since the last recession and as online competitors emerged, but had been slow to build a robust online presence of its own. For the month of June, Neiman Marcus’ online portal had less than a quarter of the traffic of upscale rival Nordstrom, according to SimilarWeb. "With all respect to top management, they didn’t bring a "sense of urgency to online marketing," Greg Furman, of The Luxury Marketing Council, told Forbes in May. By the time Neiman Marcus filed for Chapter 11 bankruptcy in May, its debts were more than $5 billion, according to Forbes. The closures came to light earlier this month after a New York commercial real estate firm that markets "distressed" properties listed as for sale the lease of the Bellevue location. At the time, a Neiman Marcus spokesperson said the sales of the leases was "not necessarily an indication that we are closing a particular store, but rather a way to monetize the value of the leases at these properties and allocate the proceeds toward investments that drive profitable and sustainable growth." But in a statement to Bloomberg this week, Neiman Marcus confirmed the four closures, which it said would "help ensure the continued long-term success of our business and underscores our unrelenting focus on providing unparalleled luxury experiences and engagement." About Neiman Marcus Group Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is a luxury omni-channel retailer conducting store and online operations principally under the Neiman Marcus, Bergdorf Goodman, and Last Call brand names. It also operates the Horchow e-commerce website offering luxury home furnishings and accessories. Since opening in 1907 with just one store in Dallas, Neiman Marcus and its affiliates have strategically grown to 67 stores across the United States. Weeks after being forced to temporarily shutter stores due to the coronavirus pandemic, Neiman Marcus Group and 23 affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32519) on May 7, 2020, after reaching an agreement with a significant majority of our creditors to undergo a financial restructuring that will substantially reduce the Company's debt load, and provide access to considerable financing to ensure business continuity. Kirkland & Ellis LLP is serving as legal counsel to the Company, Lazard Ltd. is serving as the Company's investment banker, and Berkeley Research Group is serving as the Company's financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/NMG Judge David R. Jones oversees the cases. The Extended Term Loan Lenders are represented by Wachtell, Lipton, Rosen & Katz as legal counsel, and Ducera Partners LLC as investment banker. The Noteholders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel and Houlihan Lokey as investment banker. NEOVASC INC: To Participate in H.C. Wainwright Annual Conference ---------------------------------------------------------------- Neovasc, Inc.'s management team will be participating in the 22nd Annual H.C. Wainwright Global Investment Conference on Sept. 14-16, 2020. Fred Colen, Neovasc's President and CEO, will present on September 15 at 3:30 p.m. EDT. A link to the live webcast of Mr. Colen's presentation will be available online through the investor relations section of the Neovasc website at https://www.neovasc.com/investors/. Following the event, a replay of the presentation will be archived on the Neovasc website for approximately 90 days. About Neovasc Inc. Neovasc -- http://www.neovasc.com-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Reducer, for the treatment of refractory angina, which is not currently commercially available in the United States (2 U.S. patients have been treated under Compassionate Use) and has been commercially available in Europe since 2015, and Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada, Israel and Europe. Neovasc recorded a net loss of $35.13 million for the year ended Dec. 31, 2019, compared to a net loss of $107.98 million for the year ended Dec. 31, 2018. As at Dec. 31, 2019, the Company had $10.10 million in total assets, $24.55 million in total liabilities, and a total deficit of $14.44 million. Grant Thornton LLP, in Vancouver, Canada, the Company's auditor since 2002, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company incurred a comprehensive loss of $33,618,494 during the year ended Dec. 31, 2019, and as of that date, the Company's liabilities exceeded its assets by $14,445,765. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. NOBLE CORP: Seeks Approval to Tap Baker Botts as Special Counsel ---------------------------------------------------------------- Noble Corporation plc and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Baker Botts L.L.P. as their special counsel. Baker Botts will render these professional services to the Debtors: (a) assist with income tax advice in connection with corporate structuring of the Debtors during and upon exit from these proceedings; (b) provide assistance on a variety of finance-related matters; and (c) provide general corporate assistance. The firm's hourly rates are below: Partners $995 - $1,505 Special Counsel $965 - $1,595 Associates $520 - $955 Paraprofessionals $340 - $375 The hourly rates of professionals who are expected to have primary responsibility in this engagement, inclusive of a 24% discount off Baker Botts' standard hourly rates for 2020, are as follows: Emanuel Christopher Grillo $1,144.00 David Sterling $1,075.00 David L. Emmons $1,003.00 Derek S. Green $996.00 Luke A. Weedon $969.00 Paul Thomas Luther $893.00 James Robert Prince $874.00 Justin Fitzgerald Hoffman $832.00 Thomas D. Fina $825.00 Eric M. Winwood $802.00 Terence Laurence Rozier-Byrd $802.00 Rachael Lee Lichman $802.00 Jonathan D. Lobb $790.00 Natasha Sharmeen Khan $783.00 Lyman Rushton Paden $783.00 Jennifer M. Trulock $779.00 Shadi Ratib Zohdi Haroon $768.00 Anthony Grant Everett $760.00 Krisa R. Benskin $745.00 Patrick Earl Matthews $745.00 Jason A. Wilcox $737.00 Brian Raymond Byrne $733.00 Cynthia Jo Cole $733.00 Sterling A. Marchand $726.00 Tyler M. Beas $714.00 Marian A. Fielding $703.00 David Levi Morris $703.00 Charles M. Davis III $680.00 Kathryn Anne McEvilly $680.00 Lakshmi R. Ramanathan $680.00 Wicki Andersen $657.00 Harrison Frazier Reback $638.00 Fareed Iqbal Kaisani $585.00 Austin John Collins $536.00 Hayley Danielle Hervieux $536.00 Jacqueline Paige Scioli $536.00 Gabriela Eva Alvarez $536.00 Brooke Gabrielle Chatterton $536.00 Jack Edward Chadderdon $490.00 Dominick J. Constantino $490.00 Caroline Adair Cartwright $395.00 Sean E. Aguirre $395.00 Malakeh Mazen Hijazi $395.00 Christian Eric Ryholt $395.00 Derek Ernest Gabriel $395.00 Robert M. Caine $285.00 Rory Minter Fontenla $285.00 Mark Patrick Schwartz $266.00 Sara Jane Jones $258.00 Richard Pravata $171.00 In addition, the firm will seek reimbursement for out-of-pocket expenses incurred in connection with these chapter 11 cases. The Debtors do not owe any amounts to Baker Botts. Baker Botts provides the following response to the request for additional information set forth in Paragraph D.1. of the Revised U.S. Trustee Guidelines: Question: Did Baker Botts agree to any variations from, or alternatives to, Baker Botts's standard billing arrangements for this engagement? Answer: Yes. Baker Botts has preserved the 24% discount on its hourly rates that was provided to the Debtors prior to the Petition Date. Question: Do any of the Baker Botts professionals in this engagement vary their rate based on the geographic location of the Debtors' chapter 11 cases? Answer: No. Question: If Baker Botts has represented the Debtors in the 12 months prepetition, disclose Baker Botts's billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. Answer: Baker Botts has represented the Debtors in the past 12 months through the combination of hourly and flat fee arrangements. In particular, other than for certain '34 Act securities matters (the '34 Act Matters), since January 1, 2020 Baker Botts has represented the Debtors on an hourly basis at its standard billing rate, less a 24% discount. That discount is intended to be equivalent to the discount provided in prior years. For the '34 Act Matters, Baker Botts has historically performed such services for the Debtors on a flat fee basis with the Debtors paying Baker Botts $25,000 per quarter. Baker Botts will perform all services for the Debtors moving forward on an hourly basis at its standard rates, less a 24% discount. Question: If Baker Botts's billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Answer: Baker Botts will perform all services for the Debtors moving forward on an hourly basis at its standard rates, less a 24% discount, including for the '34 Act Matters. Question: Have the Debtors approved Baker Botts's budget and staffing plan, and, if so, for what budget period? Answer: Baker Botts is developing a staffing plan and a 90-day fee estimate to reasonably comply with the U.S. Trustee's guidelines, as to which Baker Botts reserves all rights. Baker Botts intends to continue to staff matters in an efficient manner, while providing quality service to the Debtors, as Baker Botts has done throughout the relationship of the parties. The Baker Botts attorneys primarily responsible for performing services to the Debtors in connection with these chapter 11 cases, subject to modification depending on further development, are set forth above. The Debtors have approved Baker Botts's proposed hourly billing rates with respect to the work to be performed on the matters identified in the application. David L. Emmons, a partner of Baker Botts L.L.P., disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: David L. Emmons, Esq. BAKER BOTTS L.L.P. 2001 Ross Avenue, Suite 900 Dallas, TX 75201-2980 Telephone: (214) 953-6500 Facsimile: (214) 953-6503 E-mail: david.emmons@bakerbotts.com About Noble Corporation Noble Corporation plc -- http://www.noblecorp.com/-- is an offshore drilling contractor for the oil and gas industry. It provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble Corporation focuses on a balanced, high-specification fleet of floating and jackup rigs and the deployment of its drilling rigs in oil and gas basins around the world. On July 31, 2020, Noble Corporation and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33826). Richard B. Barker, chief financial officer, signed the petitions. Debtors disclosed total assets of $7,261,099,000 and total liabilities of $4,664,567,000 as of March 31, 2020. Judge Marvin Isgur oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and Porter Hedges LLP as legal counsel; Smyser Kaplan & Veselka, L.L.P., McAughan Deaver PLLC, and Baker Botts L.L.P. as special counsel; AlixPartners, LLP as financial advisor; and Evercore Group LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NOBLE CORP: Seeks to Hire McAughan Deaver PLLC as Special Counsel ----------------------------------------------------------------- Noble Corporation plc and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ McAughan Deaver PLLC as their special counsel. The Debtors desire to employ the firm to provide assistance for estimating the patent and breach of contract claims filed by Transocean Offshore Deepwater Drilling Inc. against the Debtors. The firm's hourly rates are below: Robert J. McAughan, Jr., Principal $600 Albert B. Deaver Jr., Principal $580 Christopher Lonvick, Senior Case Manager/Patent Agent/Paralegal $245 In addition, the firm will seek reimbursement for out-of-pocket expenses incurred in connection with these chapter 11 cases. Robert J. McAughan, Jr., a principal of McAughan Deaver PLLC, disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert J. McAughan, Jr., Esq. MCAUGHAN DEAVER PLLC 550 Westcott St., Suite 375 Houston, TX 77007 Telephone: (713) 829-3851 E-mail: bmcaughan@md-iplaw.com About Noble Corporation Noble Corporation plc -- http://www.noblecorp.com/-- is an offshore drilling contractor for the oil and gas industry. It provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble Corporation focuses on a balanced, high-specification fleet of floating and jackup rigs and the deployment of its drilling rigs in oil and gas basins around the world. On July 31, 2020, Noble Corporation and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33826). Richard B. Barker, chief financial officer, signed the petitions. Debtors disclosed total assets of $7,261,099,000 and total liabilities of $4,664,567,000 as of March 31, 2020. Judge Marvin Isgur oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and Porter Hedges LLP as legal counsel; Smyser Kaplan & Veselka, L.L.P., McAughan Deaver PLLC, and Baker Botts L.L.P. as special counsel; AlixPartners, LLP as financial advisor; and Evercore Group LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NOBLE CORP: Seeks to Tap Smyser Kaplan & Veselka as Special Counsel ------------------------------------------------------------------- Noble Corporation plc and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Smyser Kaplan & Veselka, L.L.P. as their special counsel. The Debtors desire to employ the firm to provide assistance for estimating the patent and breach of contract claims filed by Transocean Offshore Deepwater Drilling Inc. against the Debtors. The firm's hourly rates are below: Hector Chavez III, Partner $500.00 Lee L. Kaplan, Partner $750.00 Eugene Zilberman, Associate $350.00 Rex Manning, Associate $350.00 Patsy Chavez, Paralegal $250.00 In addition, the firm will seek reimbursement for out-of-pocket expenses incurred in connection with these chapter 11 cases. Hector R. Chavez, a partner of Smyser Kaplan & Veselka, L.L.P., disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Hector R. Chavez, Esq. SMYSER KAPLAN & VESELKA, L.L.P. 717 Texas Ave #2800 Houston, TX 77002 Telephone: 713) 221-2356 About Noble Corporation Noble Corporation plc -- http://www.noblecorp.com/-- is an offshore drilling contractor for the oil and gas industry. It provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble Corporation focuses on a balanced, high-specification fleet of floating and jackup rigs and the deployment of its drilling rigs in oil and gas basins around the world. On July 31, 2020, Noble Corporation and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33826). Richard B. Barker, chief financial officer, signed the petitions. Debtors disclosed total assets of $7,261,099,000 and total liabilities of $4,664,567,000 as of March 31, 2020. Judge Marvin Isgur oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and Porter Hedges LLP as legal counsel; Smyser Kaplan & Veselka, L.L.P., McAughan Deaver PLLC, and Baker Botts L.L.P. as special counsel; AlixPartners, LLP as financial advisor; and Evercore Group LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NORDSTROM INC: S&P Downgrades ICR to 'BB+'; Outlook Negative ------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on U.S.-based department store retailer Nordstrom Inc. to 'BB+' from 'BBB-' and the short-term, commercial paper rating to 'B' from 'A-3'. Concurrently, S&P is lowering its issue-level ratings on the company's senior unsecured debt to 'BB+' and assigning a '4' recovery rating. The issue-level rating on the senior secured notes remains 'BBB-', and S&P is assigning a '1' recovery rating. "The downgrade reflects our view that Nordstrom's long-term competitive position has diminished in light of ongoing secular pressures that have been amplified by the COVID-19 pandemic. The company faces mounting challenges to its business, including depressed demand due to cyclical pressures from a weak economic environment and longer-term risks from changing consumer preferences," S&P said. Nordstrom's operating performance has been severely pressured this year, and although S&P expects results will sequentially improve, the rating agency believes the pace and magnitude of recovery will be weaker than its previous forecast. "We view Nordstrom's ability to return sales and EBITDA to pre-pandemic levels in the next couple of years as highly unlikely given the pandemic has accelerated changes in consumer behavior," S&P said. Nordstrom's performance has been languishing as it struggles to contend with the fundamental challenges facing its core full-price business. Department stores' relevance has been waning for years. Industry sales have declined 3.4% annually from 2010 to 2019, compared to 4.2% annual growth in core retail sales during the same period, according to U.S. Census Bureau data. Although monthly retail spending has rebounded and exceeded pre-pandemic levels in July, department store sales remain down 13.4% from last year. Nordstrom has invested heavily to reposition its business to maintain relevance and fight for a larger share of a declining market. Yet, despite about $4 billion in capital spending over the past five years, including the construction of its New York City flagship location, annual revenue generated at Nordstrom's full-price segment in the past fiscal year fell below 2015 levels. S&P believes the forces driving these headwinds, including shifting category preferences, declining mall traffic, and changing demographics, will continue to pressure topline growth. Additionally, S&P expects lower tourism levels to hurt foot traffic at Nordstrom's stores in its two largest markets: California and New York. Nordstrom's fashion curation and partnership with strategic designer brands are important elements of its merchandising strategy. However, the company's assortment is less diverse than peers', and it depends heavily on women's apparel, a category that was experiencing pressure even before COVID-19. Casualization trends in fashion have resulted in wardrobe consolidation and consumers electing comfort over dress wear and formal attire. S&P believes COVID-19 has accelerated these trends and will pressure other key categories, including women's accessories. The company is also underpenetrated in merchandise categories that have recently outperformed while consumers are spending more time at home. For instance, we estimate home products accounted for less than 5% of Nordstrom's sales while making up nearly 20% at Kohl's. While Nordstrom can pivot, chasing on-trend merchandise introduces execution risk. Consistent underperformance at Nordstrom Rack relative to off-price peers indicates deteriorating operating strength. Revenue growth at Nordstrom Rack, the company's off-price business, has steadily decelerated since 2014, culminating with roughly flat top-line growth in 2019. "We believe the company's value proposition has weakened from increased competition and stronger players in the off-price channel taking market share. We believe Nordstrom Rack's merchandise is less diverse and has a higher average price point that is not resonating as much with customers in a part of the market has experienced solid growth over the last several years," S&P said. S&P expects COVID-19 will continue to have an outsized impact on Nordstrom as it struggles to drive in-person customer traffic to its stores, and the company could face inventory challenges because of disruptions in vendor supply chains. While most Nordstrom Rack stores are in off-mall locations, a core underpinning of the off-price value proposition is an in-person treasure hunt experience. S&P believes assuaging consumer health concerns will remain a challenge until a vaccine becomes widely available. Amid a challenged backdrop, the company's earnings growth will increasingly rely on management's ability to recalibrate its operating cost structure through cost-cutting and efficiency initiatives. "While Nordstrom's core merchandising, fulfillment, and customer service competencies position it to compete, we believe the industry will continue to contract. We now view the longer-term prospects of Nordstrom's business less favorably. This assessment is reflected in the revised business risk score of fair from satisfactory," S&P said. Notwithstanding the challenges facing Nordstrom, S&P believes the company benefits from some key differentiating factors. Nordstrom has invested heavily in its digital and supply chain capabilities. Digital sales represented 33% of total net sales in 2019, higher than most competitors and better aligned with evolving consumer preferences, and accounted for 57% of sales year-to-date through Aug. 1, 2020. In addition, the company has bolstered its omnichannel capabilities at Nordstrom Rack, introducing store fulfillment for online orders earlier this year. S&P believes growth trends in the off-price channel will continue to outpace traditional apparel due to consumers' penchant for value. The rating agency believes the company also benefits from its elevated customer service levels. Collectively, these relative strengths led S&P to assign a positive comparable ratings analysis modifier (previously neutral). Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety "The negative outlook reflects the elevated pressures Nordstrom faces as it navigates an intensely challenging operating environment. The detrimental effects of the COVID-19 pandemic on department store and off-price spending could be worse than we currently expect, pressuring Nordstrom's cash generation and ability to strengthen credit metrics," S&P said. "We could lower the rating if Nordstrom's competitive position deteriorates or if we expect leverage to remain above 4x," the rating agency said. This could occur if: -- Operating performance recovers more slowly than S&P anticipates, potentially due to a reinstatement of restrictive measures to control the spread of the coronavirus, delaying improvements in earnings and core free cash flow generation. -- Full-price and off-price sales and margin performance trail peers, indicating Nordstrom's relative competitive position is deteriorating. -- The company resumes dividends and share repurchases ahead of debt reduction while leverage is elevated for the rating. -- S&P could revise the outlook to stable if Nordstrom is on track to generate more than $400 million of core free operating cash flow (FOCF) and improve adjusted leverage to below 4x by fiscal year-end 2021. This could occur if: -- Demand recovers in line with S&P's base-case assumptions. -- Nordstrom successfully controls expenses and lowers costs to account for reduced demand. -- Nordstrom deploys free cash flow toward debt reduction. NORTH AMERICAN LIFTING: S&P Rates $45MM DIP Term Loan 'BB' ---------------------------------------------------------- S&P Global Ratings assigned its point-in-time 'BB' issue-level rating to the $45 million debtor-in-possession (DIP) term loan provided to North American Lifting Holdings Inc. (NALH). NALH is operating under the protection of Chapter 11 of the U.S. Bankruptcy Code following a voluntary filing on August 23, 2020. S&P's 'D' issuer credit rating on NALH remains unchanged. S&P's 'BB' issue rating on NALH's $45 million DIP term loan reflects its view of the credit risk borne by the DIP lenders, including its views on: -- The company's ability to meet its financial commitments during bankruptcy through S&P's debtor credit profile (DCP) assessment. -- Prospects for full repayment through reorganization and emergence from Chapter 11 via S&P's capacity for repayment at emergence (CRE) assessment. Potential for full repayment in a liquidation scenario via S&P's additional protection in a liquidation scenario (APLS) assessment. The borrower under the $45 million DIP term loan is North American Lifting Holdings Inc. with subsidiary guarantees provided by all direct and indirect domestic subsidiaries (excluding Rocky Mountain Structures Inc.). The DIP facility is secured by a super-priority first-lien security interest in all assets of the company including a priming lien over the first-lien collateral and all previously unencumbered assets, proceeds of avoidance actions under the bankruptcy code, and insurance proceeds. Adequate protection payments in the form of default interest will be paid to the prepetition first-lien lenders. NORTHWEST HARDWOODS: Moody's Cuts CFR to 'C', Outlook Stable ------------------------------------------------------------ Moody's Investors Service (Moody's) downgraded Northwest Hardwoods, Inc.'s Corporate Family Rating (CFR) to C from Ca and downgraded and appended the company's Probability of Default Rating (PDR) to C-PD/LD from Ca-PD. Moody's also downgraded the rating on the company's senior secured notes due 2021 to C from Ca. The outlook is changed to stable from negative. The downgrade of the CFR to C from Ca and the PDR to C-PD/LD from Ca-PD follows Northwest's missed interest payment on its senior secured notes due 2021, which was due on September 2. The failure to pay the interest due before the expiration of the thirty-day grace period allowed under the indenture is considered a default. On September 2, 2020 Northwest entered into a forbearance agreement with its notes holders and removed the default. The downgrade also reflects Moody's revised estimates of recovery values for the note holders. The change in outlook to stable from negative reflects Moody's view that current views of recovery values are now reflected in the ratings. The following rating actions were taken: Downgrades: Issuer: Northwest Hardwoods, Inc. Corporate Family Rating, Downgraded to C from Ca Probability of Default Rating, Downgraded to C-PD /LD from Ca-PD Senior Secured Notes, Downgraded to C (LGD5) from Ca (LGD4) Outlook Actions: Issuer: Northwest Hardwoods, Inc. Outlook, Changed to Stable from Negative RATINGS RATIONALE Northwest's C CFR reflects tremendously weak credit metrics due to the volatility in key end markets. Extremely high leverage and weak liquidity combine to make Northwest's capital structure untenable. The company's revolving credit facility expiration date springs forward to June 2021 followed by the maturity of its notes on August 1, 2021. Also, Moody's believes that Northwest will pursue a debt restructuring or another interest forbearance agreement before February 1, 2021, the date at which the company must make another semi-annual bond interest payment of about $14 million. The rapid and widening spread of the coronavirus outbreak and the resulting economic contraction are creating a severe and extensive credit shock, creating volatility in construction activity. Reduced shipments of lumber to China, Northwest's primary overseas market, is adding to Northwest's financial difficulties as well. Governance risks Moody's considers in Northwest's credit profile include an aggressive financial policy, evidenced by its extremely high leverage and the reluctance at this time of Littlejohn & Co., the primary owner of Northwest, to inject additional capital in order to honor Northwest's commitment to its note holders and to prevent an inevitable restructuring. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be upgraded if: -- The company provides a long-term solution to its looming debt maturities -- Liquidity improves -- Ongoing trends in end markets support sustained organic growth The rating could be downgraded if: -- The company does not extend its debt maturities -- Redemption of debt at deep discounts or conversion of debt for equity, which would be considered a default Northwest Hardwoods, Inc., headquartered in Tacoma, Washington, is a national manufacturer and distributor of hardwood lumber used for diverse products such as mill work, cabinetry, flooring, and furniture. Littlejohn & Co., through its affiliates, is the primary owner of Northwest. Northwest is privately owned and does not disclose financial information publicly. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. NPC INT'L: Committee Taps Alvarez & Marsal as Financial Advisor --------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of NPC International, Inc. and affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to retain Alvarez & Marsal North America, LLC as its financial advisor. The services to be provided by the firm are as follows: (a) assist in the assessment and monitoring of Debtors' cash flow budgets, liquidity and operating results; (b) assist in the review of court disclosures, including the schedules of assets and liabilities, the statements of financial affairs, monthly operating reports, and periodic reports; (c) assist in the review of Debtors' cost/benefit evaluations with respect to the assumption or rejection of executory contracts and unexpired leases; (d) assist in the analysis of Debtors' assets and liabilities and any proposed transactions for which court approval is sought; (e) assist in the review of Debtors' proposed key employee retention plan and key employee incentive plan; (f) attend meetings with Debtors, unsecured creditors' committee, the U.S. trustee and other "parties in interest" in Debtors' Chapter 11 cases (g) assist in the review of tax issues; (h) assist in the investigation and pursuit of causes of actions; (i) assist in the review of claims reconciliation and estimation process; (j) assist in the review of Debtors' business plan; (k) assist in the review of sales or dispositions of Debtors' assets, including allocation of sale proceeds; (l) assist in the valuation of Debtors' enterprise and equity, and the analysis of debt capacity; (m) assist in the review or preparation of information and analysis necessary for the confirmation of a bankruptcy plan; (n) participate in hearings before the court; and (o) render other general business consulting services. Alvarez & Marsal's hourly rates are as follows: Managing Directors $900-$1,150 Directors $700-$875 Associates $550-$675 Analysts $400-$500 The firm will be reimbursed for work-related expenses incurred. Alvarez & Marsal does not represent any other entity having an adverse interest in connection with Debtors' Chapter 11 cases pursuant to Bankruptcy Code Section 1103(b). The firm can be reached through: Richard Newman Alvarez & Marsal North America, LLC 540 West Madison Street, Suite 1800 Chicago, IL 60661 Tel: +1 312 601 4220 Fax: +1 312 332 4599 Email: rnewman@alvarezandmarsal.com About NPC International NPC International, Inc. is a franchisee company with over 1,600 franchised restaurants across two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states and the District of Columbia. Visit https://www.npcinternational.com for more information. 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, the Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. Debtors have tapped Weil, Gotshal & Manges LLP as bankruptcy counsel, Alixpartners LLP as financial advisor, and Greenhill & Co. LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims, noticing and solicitation agent and administrative advisor. The Office of the U.S. Trustee appointed a committee of unsecured creditors in Debtors' Chapter 11 cases. Kelley Drye & Warren, LLP and Alvarez & Marsal North America, LLC serve as the committee's legal counsel and financial advisor, respectively. NRG ENERGY: Egan-Jones Lowers Senior Unsecured Ratings to BB ------------------------------------------------------------ Egan-Jones Ratings Company, on September 1, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by NRG Energy Inc. to BB from BB-. Headquartered in Houston, Texas, NRG Energy, Inc. owns and operates a diverse portfolio of power-generating facilities primarily in the United States. NUSTAR LOGISTICS: Fitch Rates New Sr. Unsecured Notes 'BB-/RR4' --------------------------------------------------------------- Fitch Ratings has assigned a 'BB-/RR4' rating to NuStar Logistics, L.P.'s proposed offering of senior unsecured notes. The notes will rank equally in right of payment with all other existing and future unsecured senior indebtedness and will be structurally subordinated to any future indebtedness and other liabilities of subsidiaries that do not guarantee the notes. The new issuance will be guaranteed by NuStar Energy L.P.(NuStar) and NuStar Pipeline Operating Partnership L.P. (NPOP). Logistics and NPOP are the operating partnerships of NuStar, which is a publicly traded master limited partnership. The proceeds of the offering are expected to be used for repayment indebtedness, including the term loan entered into in April 2020, and borrowings under the revolving credit facility (2023). Fitch has reviewed preliminary documentation for the proposed notes; the assigned rating assumes there will be no material variation from the draft previously provided. Fitch currently rates Logistics' Long-Term Issuer Default Rating (IDR) at 'BB-' and the Rating Outlook is Stable. KEY RATING DRIVERS Improved Liquidity Position: In April 2020, NuStar entered into a $750 million term loan to repay the upcoming bond maturities until markets opened up for issuance, which helped address some of the partnership's near-term liquidity concerns. NuStar now plans to issue senior unsecured notes, and proceeds will be used for prepayment of that $750 million term loan. Proceeds will also be used for upcoming notes maturities in 2021 and 2022 as well as the borrowings under the revolver. Pro forma for the notes offering, Fitch believes that the partnership will have further enhanced liquidity by extending the date of near-term maturities. Leverage Remains Elevated: At the end of 2019, leverage (total debt with equity credit to adjusted EBITDA) was 5.5x, which was in line with Fitch's estimate of 5.6x. NuStar had a slate of growth projects, some of which were completed in 3Q19, and were expected to boost EBITDA further in 2020, but the macro headwinds have tempered Fitch's original EBITDA estimates. Fitch recognizes NuStar's recently announced constructive measures such as capex, distribution and cost reductions to help conserve cash. These measures together with the $750 million term loan provides some financial flexibility and addresses the near-term debt maturities. Fitch, however, expects leverage to remain elevated in 2020 and 2021 as the gathering and processing (G&P) and refined products business will be directly affected by reduced producer drilling activities and demand destruction. Fitch expects leverage in the range of 5.5x-5.9x at YE20 and between 5.6x-6.1x at YE21 before improving to a range of 5.3x-5.6x in 2022. Volume and EBITDA Risks: Reduced utilization and volume exposure are concerns for NuStar. Its fee-based business with minimum volume commitments provide some cash flow stability in the near term; however, shifting exploration and production (E&P) budgets and production focus, and flattening basis differentials have the potential to drive delays or pullback in volumes, weighing on EBITDA growth. The partnership remains focused on growth predominantly in the Permian where crude pipeline throughput is expected to decline in the current environment. This may be partially offset by incremental storage demand. NuStar also expects EBITDA growth from its Trafigura project, Northern Mexico supply project and West Coast projects. Significant Use of Hybrids: NuStar has a large part of its capital structure derived from the Series A, B, C and D perpetual preferreds. The partnership has leaned on these securities when equity and debt markets were less attractive. In addition, the bank agreement excludes them from the definition of debt for purposes of its leverage calculation. Fitch assigns 50% equity credit to these four securities. This enhances the available liquidity on the revolver. The face value of these securities was nearly $1.4 billion as of June 30, 2020, compared with face value of debt at $3.4 billion. The securities have high coupons with the $227 million Series A at 8.5%; the $385 million Series B at 7.625%; and the $173 million Series C at 9.0%. There is also the $590 million of Series D perpetual preferreds privately placed with EIG Nova Equity Aggregator, L.P. and FS Energy and Power Fund in June and July 2018, not rated by Fitch, with a coupon of 10.75%. NuStar has $402.5 million of junior subordinated debt that receives 50% equity credit per Fitch's criteria. These were fixed-to-floating notes fixed at 7.625% until April 2018, when they became floating rate notes. The interest on these notes was 8.0% as of June 30, 2020. DERIVATION SUMMARY The 'BB-' rating reflects NuStar's size and scale, and leverage. Fitch forecasts NuStar's leverage (defined as total debt to adjusted EBITDA with debt adjusted for equity credit) to be between 5.5x-5.9x by year-end 2020. NuStar is smaller and less diverse than higher rated Plains All American LP (PAA; 'BBB-'/ Stable), which has the advantage of size and scale that provides operational and geographic diversification as well as an advantage in accessing the capital markets. NuStar's leverage is higher than some of the 'BB' midstream energy issuers like Sunoco, LP (SUN; 'BB'/Negative) and AmeriGas Partners, LP (APU; 'BB'/ Stable). Fitch notes that they are not direct peers since NuStar is focused on crude and refined products and Sunoco is an independent fuel distributor. AmeriGas is a propane distributor. Fitch expects that SUN will have leverage higher than 5.0x at the end of 2020, as it faces the near-term demand destruction from the coronavirus pandemic and AmeriGas Partners, LP's leverage to be above 6.0x at the end of its fiscal year end (Sept. 30, 2020). KEY ASSUMPTIONS - Fitch utilized its WTI oil price deck of $32/bbl in 2020, $42/ bbl in 2021 and $50/ bbl in 2022 and $52/bbl thereafter; - Markets continue to remain subdued in 2021 before making a modest turnaround in 2022; - Growth capex and maintenance capex consistent with management guidance; - Distributions remain flat; - No asset sales or equity issuance assumed. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch may take a positive rating action if expected leverage (total debt adjusted for equity credit/adjusted EBITDA) falls below 5.5x for a sustained period of time provided NuStar has an adequate cushion in its financial covenants. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Expected Leverage (total debt adjusted for equity credit/ adjusted EBITDA) at or above 6.5x on a sustained basis and FFO interest coverage below 2.0x on a sustained basis; -- Inability to meet funding needs which could come from lack of access to capital markets, inability to complete assets sales, or restricted liquidity; -- Failure to reduce growth capex and distribution if external funding is restricted; -- Significant increases in capital spending beyond its expectations with negative consequences for the credit profile. LIQUIDITY AND DEBT STRUCTURE Improving Liquidity: As of June 30, 2020, NuStar had total liquidity of $902.8 million, which includes $885.1 million undrawn on its revolver, after accounting for $4.0 million in letters of credit. Cash on the balance sheet was $17.7 million. In March 2020, the revolving credit facility was reduced to $1.0 billion from $1.2 billion and the maturity extended to October 2023. With the partnership's proposed bond offering, liquidity will be enhanced with additional availability on the revolver and maturities will be extended. Once NuStar completes the proposed bond offering and repays the 2021s and 2022s, its nearest maturity is the revolving credit facility in 2023. NuStar's ability to draw on the revolver is restricted by a leverage covenant as defined by the bank agreement, which does not allow leverage to be greater than 5.0x for covenant compliance or 5.5x for two consecutive quarters following a qualifying acquisition. Bank defined leverage was 3.94x, as of June 30, 2020, higher than the 3.88x at YE 2019. Fitch expects NuStar to remain covenant compliant. Fitch notes that the covenant calculation allows for exclusion of the junior subordinated notes of $402.5 million and preferred equity Series A, B, C and D, totaling nearly $1.4 billion. The covenant calculation allows for inclusion of pro forma EBITDA for material projects and acquisitions, providing some cushion in calculations. NuStar calculates consolidated debt at $3.4 billion as of June 30, 2020 and $2.9 billion of this amount is fixed rate. The remaining $0.5 billion is floating rate, largely based on LIBOR. The partnership's $402.5 million floating rate notes changed from a fixed rate of 7.625% to a floating rate effective January 2018. The interest rate on these notes was 8.0% as of June 30, 2020. The partnership also has a $100 million receivable financing agreement that can be upsized to $200 million. The borrowers are NuStar and NuStar Finance LLC (NuStar Finance), a special purpose vehicle (SPV) and wholly owned subsidiary of NuStar. There was $48.6 million of borrowings outstanding under the agreement as of June 30, 2020. The securitization program extends until Sept. 20, 2023, with the option to renew for additional 364-day periods thereafter. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch gives 50% equity credit to NuStar's junior subordinated notes due 2043 ($402.5 million face value) and 50% debt credit to NuStar's four series of perpetual preferred equity securities ($1,374 million). NUSTAR LOGISTICS: Moody's Rates New Unsec. Notes Ba3, Outlook Neg. ------------------------------------------------------------------ Moody's Investors Service assigned a Ba3 rating to NuStar Logistics L.P. proposed senior unsecured notes. The outlook is negative. NuStar Logistics L.P. is the primary operating subsidiary of NuStar Energy L.P. (NuStar) and is the vehicle through which NuStar has issued all its public debt, including $1 billion revolving credit facility, various senior unsecured notes, rated Ba3, and fixed-to-floating subordinated notes, rated B2. NuStar Logistics L.P. debt is guaranteed by NuStar. The group will use the proceeds from the placement of the proposed notes to refinance existing maturities. NuStar Logistics' proposed senior unsecured notes are rated Ba3, at the level of NuStar's Ba3 Corporate Family Rating (CFR), reflecting a debt capital structure that is comprised of almost all unsecured debt. NuStar Logistics' various unsecured bonds and its 2020 revolving credit facility are unsecured and pari passu. NuStar Logistics' subordinated notes and NuStar's preferred units are rated B2, two notches below the Ba3 CFR, reflecting their respective contractual and structural subordination to NuStar Logistics' debt obligations. If the revolver were to become secured or secured debt was added to the capital structure then the senior unsecured notes would likely be downgraded. The negative outlook on the ratings reflects high execution risk, as NuStar is forging its deleveraging plan. Assignments: Issuer: NuStar Logistics, L.P. Senior Unsecured Notes, Assigned Ba3 (LGD3) RATINGS RATIONALE NuStar's Ba3 CFR reflects Moody's expectation that in the near term NuStar will not generate significant free cash flow and will need to make divestments to reduce debt. NuStar benefits from an extensive and diversified portfolio of assets, but any divestments will likely take some time because the company needs to achieve higher valuations to enable deleveraging. Prior year growth investments and an enlarged revenue base should help NuStar to mitigate a decline in earnings in 2020, caused by reduced activity in refining and E&P sectors amid economic lockdowns. Slower growth in earnings from NuStar's new assets, including from its recently completed Permian Crude system, will delay organic deleveraging beyond 2020-21. While NuStar reduced its shareholder distributions, its free cash flow generation remains constrained by the significant cash payments on common and preferred units, as well as its relatively high cash cost of debt. In 2017-2019, NuStar generated significant negative free cash flow and had to make divestments to help fund operating deficits. In 2020, NuStar cut capital investment and should cover most of payments on capital and investment from its operating cash flow. At the end of June 2020, NuStar's adjusted debt stood at $3.4 billion, with a further $1.4 billion outstanding in preferred securities, that Moody's excludes from the calculation of debt and leverage metrics. Moody's expects NuStar's leverage to exceed 5x debt/EBITDA in 2020-21 and to recover slowly in step with growth in earnings. Moody's expects NuStar's liquidity profile to remain constrained by weak free cash flow generation, after several years of significant investment and free cash flow deficits funded by borrowing and by issuing preferred securities. The SGL-3 rating anticipates that the company will continue to proactively manage its significant refinancing needs in 2021-23. NuStar's principal source of liquidity is its committed $1 billion revolving credit facility that matures in October 2023. The credit facility is unsecured, but drawings are subject to a material adverse change clause. The credit facility has two financial covenants (debt/EBITDA of no greater than 5.0x and EBITDA/ Interest of at least 1.75x). Moody's expects NuStar to remain in compliance with the financial covenants in 2020-21. NuStar is proactively managing its significant annual refinancing needs. Supporting NuStar's liquidity profile is its large asset base as well as its unsecured capital structure and the corresponding flexibility to sell assets or raise secured financing to raise cash. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Considering the large amount of preferred liabilities outstanding, a deterioration in leverage, with debt/EBITDA exceeding 5.5x or weaker liquidity may lead to a downgrade of the rating. The Ba3 rating may be upgraded if the company delivers on the growth potential of its now completed Permian Crude System acquisition and lays the foundation of the financial framework which will allow it to maintain sound liquidity and leverage below 4.5x debt/EBITDA, as well as reduce the financial burden of distributions, including payments on various preferred units. NuStar Energy is a sizable and diversified pipeline and storage company operating a network of oil and refining product pipelines in the Permian and Eagle Ford basins in Texas, and an interstate ammonia pipeline connecting production and terminals in Louisiana with America's corn belt. NuStar also owns and operates large crude and refining products storage network across the Midwest. The principal methodology used in these ratings was Midstream Energy published in December 2018. OLIN CORPORATION: Egan-Jones Lowers Senior Unsecured Ratings to B- ------------------------------------------------------------------ Egan-Jones Ratings Company, on August 31, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Olin Corporation to B- from B. EJR also downgraded the rating on FC commercial paper issued by the Company to B from A3. Headquartered in Clayton, Missouri, Olin Corporation manufactures chemicals and ammunition products. ONEWEB GLOBAL: Plans to Invest $50M Into New Telecom Venture ------------------------------------------------------------ Law360 reports that the ground service provider for bankrupt satellite internet service OneWeb said July 27, 2020, it plans to invest $50 million in the partnership between the U.K. government and an Indian telecom company that purchased the defunct company's network for $1 billion. Maryland-based Hughes Network Systems, which had been the distribution partner for OneWeb's planned global satellite broadband internet network, said it had "agreed in principle" to invest in the joint venture between the British government and Bharti Global Ltd. , which placed the highest bid for OneWeb's assets in a Chapter 11 auction earlier this month. About OneWeb Global Founded in 2012, OneWeb Global Limited is a global communications company developing a low-Earth orbit satellite constellation system and associated ground infrastructure, including terrestrial gateways and end-user terminals, capable of delivering communication services for use by consumers, businesses, governmental entities, and institutions, including schools, hospitals, and other end-users whether on the ground, in the air, or at sea. OneWeb's business consists of the development of the OneWeb System, which has included the development of small-next generation satellites that have been mass-produced through a joint venture and the development of specialized connections between the satellite system and the internet and other communications networks through the SNPs. For more information, visit https://www.oneweb.world. OneWeb Global Limited and its affiliates ought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22437) on March 27, 2020. At the time of the filing, Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge Robert D. Drain oversees the cases. The Debtors tapped Milbank, LLP as legal counsel; Guggenheim Securities, LLC as investment banker; FTI Consulting, Inc. as financial advisor; and Omni Agent Solutions as claims, noticing and solicitation agent. PAINT THE WIND: Seeks Approval to Tap Lawrence V. Young as Counsel ------------------------------------------------------------------ Paint the Wind, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ Lawrence V. Young, Esq. and CGA Law Firm. The Debtor desires to employ Mr. Young to represent the Debtor with respect to all legal matters relating to the Chapter 11 proceedings. Mr. Young will be compensated at his hourly rate of $375 and his staff at their hourly rates of between $100 - $130. Mr. Young received the total sum of $12,000.00 from the Debtor-in-Possession. The amount of $2,802.50, was expended for pre-petition bankruptcy-related services. The remaining amount of $9,197.00, which comprises a retainer in the amount of $7,480.00 and the case filing fee of $1,717.00, is held in the counsel's trust account. Lawrence V. Young, Esq. of CGA Law Firm disclosed in court filings that he and the firm are "disinterested persons" within the meaning of section 101(14) of the Bankruptcy Code. The attorney can be reached at: Lawrence V. Young, Esq. CGA LAW FIRM 135 North George Street York, PA 17401 Telephone: (717) 848-4900 E-mail: lyoung@cgalaw.com About Paint the Wind Paint the Wind, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bank. M.D. Pa. Case No. 20-02604) on August 31, 2020. The petition was signed by Christine M. Rakoci, its member. At the time of filing, the Debtor estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Henry W. Van Eck oversees the case. Lawrence V. Young, Esq. of CGA Law Firm is the Debtor's counsel. PATRIOT WELL: Committee Seeks to Tap Foley & Lardner as Counsel --------------------------------------------------------------- The official committee of unsecured creditors appointed to the chapter 11 case of Patriot Well Solutions LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Foley & Lardner LLP as its counsel. Foley & Lardner will render these professional services to the committee: (a) advise the committee in connection with its powers and duties under the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules; (b) assist and advise the committee in its consultation with the Debtor relative to the administration of this case; (c) attend meetings and negotiate with the representatives of the Debtor and other parties-in-interest; (d) assist and advise the committee in its examination and analysis of the conduct of the Debtor's affairs; (e) assist and advise the committee in connection with any sale of the Debtor's assets pursuant to section 363 of the Bankruptcy Code; (f) assist the committee in the review, analysis and negotiation of any chapter 11 plan(s) of reorganization or liquidation that may be filed and assist the committee in the review, analysis and negotiation of the disclosure statement accompanying any such plan(s); (g) assist the committee in analyzing the claims asserted against and interests asserted in the Debtor, in negotiating with the holders of such claims and interests, and in bringing, participating, or advising the committee with respect to contested matters and adversary proceedings; (h) assist with the committee's review of the Debtor's Schedules of Assets and Liabilities, Statement of Financial Affairs and other financing reports prepared by the Debtor, and the Committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor and of the historic and ongoing operation of their businesses; (i) assist the committee in its analysis of, and negotiations with, the Debtor or any third party related to, among other things, cash collateral issues, financings, compromises of controversies, assumption or rejection of executory contracts and unexpired leases, and matters affecting the automatic stay; (j) take all necessary action to protect and preserve the interests of the committee; (k) prepare all necessary motions, applications, answers, orders, reports, replies, responses, and papers in support of positions taken by the committee; (l) appear, as appropriate, before this Court, the appellate courts, and the United States Trustee, and protect the interests of the committee before those courts and before the United States Trustee; (m) investigate and analyze the existence, extent, validity, enforceability, and priority of liens asserted against the Debtor, and participate as necessary in any action related to such investigation; (n) analyze any other state law issues related to this Chapter 11 Case; (o) participate in any related investigation of the Debtor and/or the Debtor's secured lenders to the extent related to (a) and (b) above, if applicable; (p) take all actions; and (q) perform all other necessary legal services in this case for the committee. The firm's hourly rates are as follows: Attorneys $420 - $1,080 Paraprofessionals $60 - $245 In addition, the firm will seek reimbursement for actual and necessary expenses incurred in connection with these chapter 11 case. The firm has not received a retainer in connection with its representation of the committee in this chapter 11 case. Foley & Lardner provides the following in response to the request for additional information set forth in Paragraph D.1. of the Revised U.S. Trustee Guidelines: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclosure your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Response: Not applicable. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Foley expects to develop a budget and staffing plan to reasonably comply with the U.S. Trustee's request for information and additional disclosures, as to which Foley reserves all rights. The committee has approved Foley's proposed hourly billing rates. Holland N. O'Neil, a partner of Foley & Lardner LLP, disclosed in court filings that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael K. Riordan, Esq. FOLEY & LARDNER LLP 1000 Louisiana, Suite 2000 Houston, TX 77002-5011 Telephone: (713) 276-5727 E-mail: mriordan@foley.com -and- Holland N. O'Neil, Esq. Marcus Helt, Esq. FOLEY & LARDNER LLP 2021 McKinney Avenue, Suite 1600 Dallas, TX 75201 Telephone: (214) 999-4961 (214) 999-4526 E-mail: honeil@foley.com mhelt@foley.com About Patriot Well Solutions Patriot Well Solutions LLC -- https://www.patriotwell.com -- provides well completion, production and intervention services for the energy industry. It offers wireline and perforating, coiled tubing and nitrogen, fluid pumping and crane services. Patriot Well Solutions sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-33642) on July 20, 2020. The petition was signed by Matthew Foster, its chief restructuring officer. At the time of the filing, the Debtor disclosed between $10 million and $50 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. The Debtor tapped Squire Patton Boggs (US) LLP as legal counsel, Sonoran Capital Advisors LLC as restructuring advisor, Piper Sandler & Co. as financial advisor, and Stretto as claims and noticing agent. On August 5, 2020, the United States Trustee for the Southern District of Texas appointed the official committee of unsecured creditors in this chapter 11 case. The committee tapped Foley & Lardner LLP as its counsel. PENNSYLVANIA REAL: Egan-Jones Lowers Sr. Unsecured Ratings to BB- ----------------------------------------------------------------- Egan-Jones Ratings Company, on September 3, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Pennsylvania Real Estate Investment Trust to BB- from BB. Headquartered in Philadelphia, Pennsylvania, Pennsylvania Real Estate Investment Trust is a self-administered real estate investment trust involved in acquiring, managing, and holding real estate interests for current yield and long-term appreciation. PEYTO EXPLORATION: Egan-Jones Cuts Senior Unsecured Ratings to B+ ----------------------------------------------------------------- Egan-Jones Ratings Company, on September 4, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Peyto Exploration & Development Corporation to B+ from BB-. Headquartered in Calgary, Canada Peyto Exploration & Development Corporation is an oil and gas exploration and production company. PG&E CORP: Asks Judge to Reject Elliott's $250 Million Claim ------------------------------------------------------------ Reuters reports that PG&E is urging a judge to reject a $250 million claim from investment firm Elliott Management, saying the demand violates the California utility's court-approved bankruptcy plan and that, if paid, the funds would be taken from victims of the state's wildfires. In court papers, PG&E's lawyers at Weil, Gotshal & Manges responded to the claim, which was made in late July following what Elliott says was PG&E's failure to use its "best efforts" to help Elliott access up to $2 billion in equity value. Mark Chediak, writing for Bloomberg News, reports that Elliott Management has claimed that PG&E Corp. cost the activist investor $250 million by breaking a promise to help the hedge fund get rights to buy equity in the utility giant during its massive bankruptcy case. PG&E was supposed to help Elliott gain access to as much as $2 billion in equity commitments, as part of a settlement struck in January to resolve competing and sometimes contentious restructuring plans, according to a court filing by Elliott. Elliott said PG&E's failure to follow through resulted in damages of up to 19.8 million shares valued at about $250 million. 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 labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, as special regulatory counsel. Munger Tolles & Olson LLP, as special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PG&E Corporation and Pacific Gas and Electric Company announced July 1, 2020, that PG&E has emerged from Chapter 11, successfully completing its restructuring process and implementing PG&E's Plan of Reorganizationthat was confirmed by the Bankruptcy Court on June 20, 2020. PHILADELPHIA INDUSTRIAL DEVEL: S&P Cuts Bond Rating to 'BB- (sf)' ----------------------------------------------------------------- S&P Global Ratings lowered its long-term ratings to 'BB- (sf)' and 'B+ (sf)' from 'BB+ (sf)' and 'BB (sf)' on Philadelphia Authority for Industrial Development's series 2016A and subordinate 2016B senior housing revenue bonds (The Pavilion), respectively. The outlook is negative. In July 2016, the Philadelphia Authority for Industrial Development issued $29.615 million in senior housing revenue bonds on behalf of the borrower, Pavilion Apartments Penn LLC, whose sole member is JPC Charities, an Ohio 501(c)(3) nonprofit corporation. Proceeds of the issuance--$24.410 million of series 2016A senior lien bonds and $2.205 million in series 2016B subordinate bonds--were used to finance i) a portion of the cost of the acquisition of a long-term leasehold interest in, renovation and equipping of a 295-unit senior residential rental housing project that receives Section 8 rental subsidy payments pursuant to the Housing Assistance Payment (HAP) contract with the U.S. Dept. of Housing and Urban Development (HUD); ii) fund separate debt service reserve funds (DSRF) for the senior and subordinate bonds; and iii) to pay certain costs of issuance of the bonds. Debt service on the bonds is due every June 1 and Dec. 1. The bonds have a final maturity date of Dec. 1, 2051. Maximum annual debt service (MADS) on the bonds equals $1,559,156 occurred in 2019. S&P has used this MADS to calculate S&P debt service coverage (DSC) through this review. In future reviews, S&P will use the highest upcoming annual debt service figure for its DSC calculation. The ratings on the bonds reflect S&P's view of the following credit characteristics: -- Very weak coverage and liquidity assessment for both the 2016A and 2016B bonds as a result of weighted-average S&P DSCs of 1.15x and 1.05x, respectively, and DSRFs sized at six- months MADS, rather than full MADS; -- Very weak management and governance assessment based the ownership entity's track record of deviation from policies, violation of covenants, disclosure requirements and commitments, continued evidence of financial statement reporting that is not timely, inaccurate, incomplete or is inadequate for quality operational and financial statement analysis, as well as limited evidence that organization plans, policies and procedures exist to guide the project through both day-to-day and challenging times; and -- Weak market position assessment as a result of a sharp decline in the project's Real Estate Assessment Center (REAC) inspection score to 72c in March 2020 from 97b in April 2019 indicating material decline in the project's physical asset quality. The negative outlook is due to several factors that could going forward, in S&P's view, result in further negative rating action on the bonds. Specifically, the negative outlook is due primarily to the fiscal 2019 audited financial statements and operating data not being made available for the project. The failure to provide this information for the period ending Dec. 31, 2019 has several negative implications for the project. First, the borrower is in violation of the executed continuing disclosure agreement commitment to provide financial information, operating data, and audited financial statements (collectively, the annual information) in accordance with the Securities and Exchange Commission Rule 15c2-12. A notice of failure to file was posted to the Municipal Securities Rulemaking Board's (MSRB) Electronic Municipal Market Access (EMMA) website on June 30, 2020. Second, it reflects poorly on the management and governance of the project and the ability to comply with agreed-upon covenants as well as the ability to successfully manage finances and operations of the project in the long run. And finally, without this information the ability for S&P to provide accurate and timely review of the project and the ability to maintain the rating is compromised, as discussed in S&P's research, titled "How Quality And Timeliness of Information Are Incorporated Into U.S. Public Finance's Rating Process," published Oct. 25, 2016. The negative outlook also reflects the material decline in the project's asset quality as implied by the REAC score of 72c mentioned above. S&P has requested but not received the full REAC report from the March 2020 inspection. Should the report show that further declines in asset quality or severe life-threatening conditions exist at the project, S&P could worsen its market position assessment or adjust the final rating downward to reflect these risks. Finally, the negative outlook reflects the project's inability to cover debt service coverage requirements with cash flows from operations in fiscal 2019, according to draft audited financials, but relied on all but $1 of the repair and replacement fund cash, which offsets maintenance and repair operating expenses for the period. Further, from time to time, the project receives funds borrowed from entities under common ownership and other related parties to cover operating expenses. The loans from these related parties are unsecured, due on demand, non-interest bearing and have no formal repayment terms. S&P has not included cash inflows from these loans in its financial analysis, but do note that without them the project could fall into a liquidity crisis. PROTOMAC 18: Seeks Damages Against Rabbinical Council & Others -------------------------------------------------------------- Rachel Kohn, writing for Washington Jewish Week, reports that Kosher-based caterer Protomac 18 Caterers seeks millions worth of damages from the Rabbinical Council of Greater Washington. A long simmering labor dispute in the Orthodox community flared July 2020 when Rabbi Israel David Bacharach filed a lawsuit against the Rabbinical Council of Greater Washington, council member Rabbi Levi Shemtov and the Baltimore-based kosher certification agency Star-K. Bacharach is the Gaitherburg-based CEO and president of Potomac 18 Caterers. Bacharach's lawyer, David Kaminow, provided a copy to WJW of the complaint filed July 2, 2020 in Montgomery County Circuit Court. Bacharach is alleging that after the rabbinical council, also known as the Vaad, rescinded its kosher certification of Potomac 18 in November 2017 "without just cause or reason," Vaad members went on to interfere with Bacharach's business relationships with existing and potential clients. Bacharach also claims that the Vaad cost him his job as a mashgiach (kosher compliance supervisor) at Hebrew Home of Greater Washington, a position he held for some 20 years. In a letter provided by Kaminow and dated Nov. 30, 2017, the Vaad's president, Rabbi Yosef Singer, addressed the vice president of human resources at Charles H. Smith Life Communities, which runs Hebrew Home. Singer wrote that he was following up on a Nov. 14 conversation to affirm in writing that since the Vaad rescinded the kosher certification of Bacharach's catering business, he could no longer represent the Vaad as a mashgiach at Hebrew Home. Singer wrote: "On October 26, 2017, the VAAD informed Rabbi Bacharach that it was withdrawing its Capitol K Kashruth Certification from Potomac 18. This action was necessitated by Potomac 18's systemic noncompliance with VAAD kashruth polities and regulations dating back to before the fall of 2016. Under these circumstances, it is untenable that Rabbi Bacharach continue to represent the VAAD as a mashgiach, whose primary function is to enforce kashruth compliance." Singer added: "Please know that the VAAD has no objection to Rabbi Bacharach's continued employment at the Hebrew Home as long as he is no longer involved with its kashruth certification operations." Kaminow told WJW that within days of the letter's receipt, Bacharach was fired. Star-K is named in the lawsuit because of its partnership with the Vaad, dating back to 2015. Rabbi Tzvi Holland, director of special projects and a kashrut administrator for Star-K, assists the Vaad in certifying and supporting mashgiachs across the Washington area. In 2018, the Vaad's executive director, Rabbi Moshe Walter, said Holland "added a new level of professionalism and responsiveness to the Vaad’s kashrut operation," according to Kol HaBirah. Shemtov is member of the Vaad, the executive vice president of American Friends of Lubavitch (Chabad) and the founder and spiritual leader of TheSHUL in Kalorama. Bacharach "had a contract with the White House to do their Chanukah meals, and Rabbi Shemtov was involved personally in him losing that contract," said Kaminow. Singer declined to comment on the case until the Vaad is served with a copy of the complaint and summons from the court. Shemtov said: "I guess no good deed goes unpunished. Like others, I worked to help Rabbi Bacharach on numerous occasions to bid and get, not lose, business, and I helped him settle disputes with people on several occasions," Shemtov said. "I am unaware of any contract with the White House," he continued. "I have overseen the kosher aspects of their events. As far as I am concerned, they can choose whoever they wish to provide whatever support as long as the kosher standards aren't compromised, and they have changed providers more than once." "As for the Vaad, they bent over backwards to ensure the sunset of supervision would not leave him unable to operate." "I really can't understand the suit," he said. "Perhaps I'll know more after I receive the complaint." Bacharach is seeking a total of $1.1.million in damages from the three parties for the alleged loss of the business relationship with the White House. The three other counts in the lawsuit — interference with other business relationships, interference with the Hebrew Home contract, and interference with a one-time event contract in Potomac — are leveled at the Vaad and Star-K only. For these, Bacharach is seeking $8.2 million. According to bankruptcy court records, Bacharach filed for Chapter 11 bankruptcy on behalf of his company in July 2018. The 20 largest unsecured claims (i.e. debts without collateral) amounted to over $4 million, and he indicated that he had more than 50 creditors. The bankruptcy was terminated in October 2019 due to failure to meet court-mandated milestones, including creating a plan to pay his creditors, according to the court's order of dismissal. The current status of these debts is not publicly available. Bacharach's Chapter 11 filing was a result of the defendants' efforts against his business, said Kaminow. About Protomac 18 Caterers Protomac 18 Caterers is a Gaitersburg-based catering company that provides quality food and services to customers. PUERTO DEL REY: Marina PDR Wins Summary Judgment vs Master Link --------------------------------------------------------------- District Judge Raul M. Arias-Marxuach denies the Defendant's motion for summary judgment and grants the Plaintiff’s motion for partial summary judgment in the case captioned Marina PDR Operations, LLC, Plaintiff, v. Master Link Corp., Inc.; M/V Master Link I, in rem Defendants, Civil No. 17-1307 (RAM) (D.P.R.). On August 30, 2017, Plaintiff Marina PDR Operations, LLC filed a Third Amended Complaint against Defendants Master Link Corp. and M/V MASTER LINK I, in rem. Marina PDR is the operator of the Puerto Rico Del Rey Marina in Fajardo, Puerto Rico, providing wet slip and land storage for vessels of various sizes. ML's business consists of providing repair and maintenance services to vessels. ML had a contract with the Commonwealth of Puerto Rico's Maritime Transportation Authority, a public corporation which was "created to provide ocean transportation of cargo and passengers between mainland Puerto Rico and the municipalities of Vieques and Culebra." The contract, which expired on Nov. 4, 2012, was a Puerto Rico General Services Administration ("GSA") contract for repair services for M/V FAJARDO II. ML also had a contract with the marina's previous owner Puerto del Rey, Inc. ("PDR") for the repair of MASTER LINK I. Per the Complaint, ML allegedly breached both contracts. Thus, Marina PDR claimed ML owes it $115,292.04 in unpaid fees and taxes for FAJARDO II and MASTER LINK I. In the alternative, Marina PDR requested that MTA be held liable for $78,311.85 for overdue payments because it is the owner of FAJARDO II and original signatory to a Boat Space License Agreement ("BSLA") with the marina's previous owner PDR. On June 26, 2018, Plaintiff and MTA filed a Settlement Agreement dismissing the claim against the latter. Partial judgment was entered accordingly. On Nov. 15, 2018, ML filed a Motion for Summary Judgment ("MSJ") and a Statement of Material Facts in Support of Defendant's Motion for Summary Judgment. It alleges that: 1) Marina PDR lacks standing to sue; 2) ML did not become indebted to Marina PDR under the contract between MTA and PDR concerning FAJARDO II because the assumption of debt and novation doctrines are inapplicable, and 3) Marina PDR cannot recover twice on the same claim. Plaintiff opposed the MSJ and propounded additional facts. Plaintiff's Opposition to MSJ is currently unopposed. On Nov. 15, 2018, Marina PDR filed a Motion for Partial Summary Judgment and Memorandum of Law in Support Thereof ("PMSJ") and a Statement of Uncontested Material Facts in Support of Motion for Summary Judgment ("PSUMF"). It alleges that partial summary judgment is proper because there is no genuine issue regarding the amount due by ML for the storage of MASTER LINK I. ML opposed the same and Marina PDR replied. In his analysis, Judge Arias-Marxuach states that Defendant bears the burden of proof on a novation claim, an affirmative defense pursuant to Fed. R. Civ. P. 8(c)(1). ML did not plead novation as an affirmative defense in its answer to the Complaint. Typically, this would amount to waiver of the defense. But, there are exceptions such as "where [1] the defendant asserts it [the defense] without undue delay and the plaintiff is not unfairly prejudiced by any delay," or where "[2] the circumstances necessary to establish entitlement to the affirmative defense did not obtain at the time the answer was filed." Here, Plaintiff was not prejudiced by a failure to plead the defense because novation was addressed in ML's Motion to Dismiss the Second Amended Complaint, and which was later incorporated by reference into ML'S Motion to Dismiss Third Amended Complaint. Further, this occurred before the discovery deadline and both parties briefed the novation issue in their respective summary judgment motions. Hence, ML can proceed with the novation defense. There are two types of novation: modificatory and extinctive. In the first type, "a modificatory novation simply modifies [either the object or principle condition of an agreement], but does not extinguish, the original agreement." Notably, "novation is never presumed" and must be proved "without any trace of doubt." It is always "established by the parties' intention," as determined case-by-case. Puerto Rico jurisprudence recognizes two subtypes of extinctive novation: express or tacit. The first occurs when the parties expressly state their intent to create a new agreement. The second occurs when there is a total incompatibility between the old and the new agreement. Under the first subtype, extinctive novation occurs "even when the contractual condition modified is of secondary importance, as long as that is what the parties intended[,] and they have conclusively stated that the prior contract is canceled and substituted by another." In the second subtype, the new contract and the original one must be incompatible "in all points." The change "must be so radical in nature as to make the new and old agreements unable to coexist and to make them mutually excludable." Changes "that are mainly quantitative in nature do not extinguish" the contract's main obligation, "which remains in effect with all its supplementary and accessory guarantees." ML did not raise a novation defense for ML-PDR BSLA for MASTER LINK I in its MSJ. Instead, it only mentions novation to argue why ML did not become a debtor under the MTA-PDR BSLA for FAJARDO II. ML did bring forth the defense in its Opposition to PSMUF, where it alleges that the ML-PDR BSLA was "novated by the parties when they agreed to a lower monthly charge." This allegedly occurred when the parties agreed that the "discount [of $6,114.32] on storage fees was for past and future invoices for the storage of the barge." Marina PDR denied that the discount was a novation. It explains that the "discount was offered as a deal on September 2014 [...] [for] Master Link to be able to pay the minimum amount owed at the time promptly, since it owed almost $14,285.79 at the time to PDR." Thus, it should not be considered an intent to change the terms of the ML-PDR BSLA. Plaintiff also avers that no invoice after 2014 includes a discount, which should also indicate that Marina PDR did not intend to change the storage rate set in the BSLA. The Court agrees with Marina PDR. First, ML does not state whether it is relying on an extinctive or modificatory novation. Second, it fails to: (1) provide evidence of an intent to extinguish the ML-PDR BSLA; (2) prove an incompatibility between the BSLA and a new agreement, if one exists at all; or (3) proffer sufficient evidence of a modification of the ML-PDR BSLA. The District of Puerto Rico has held that "[t]he party raising the affirmative defense of novation has the duty to proffer sufficient competent evidence of novation, specifically, evidence of the contracting parties' express intention or incompatibility of the two agreements." ML did neither here. For example, in Ceramic Enterprises, Inc. v. Dexion Inc. the District of Puerto Rico held that extinctive novation did not occur since "[c]hanges in the price, duration, and square footage terms of the lease are not so material as to extinguish the Lease in favor of a new and separate lease." Here, therefore, the discount seems to be a mere "quantitative change" which did not extinguish the terms of the BSLA. Lastly, the Court observes that the original ML-PDR BSLA stated that "[r]ates may be changed from time to time at Marina's [then PDR's] sole discretion." Hence, any change by PDR to the storage and repair rates, whether a discount or otherwise, would not necessarily novate an existing BSLA. In RentPath, LLC v. CarData Consultants Inc., the District of Georgia held that the original contract between the parties showed that "the parties understood basic modifications to the service price would not create an entirely new agreement." This because the service agreement in question stated "that fees 'may be amended from time to time[.]'" Thus, even when viewing the facts in the light most favorable to ML and drawing all reasonable inferences in its favor, the novation theory is inapplicable. ML posits that the ML-PDR BSLA is not authenticated and is inadmissible at the summary judgment stage, thus denial of the PMSJ is proper. Conversely, Plaintiff avers that the BSLA was properly authenticated via Ms. Marinés Camacho's unsworn statement filed alongside the PMSUF. The Court agrees with Plaintiff. Moreover, it sees no need to address the authenticity of the BSLA given that ML filed the same exhibit as an exhibit to its SMUF. In referencing the ML-PDR BSLA in its MSJ and SMUF, ML is essentially adopting and authenticating it -- the same BSLA it now declares inadmissible with regards to the PMSJ and PSMUF. Judge Ariash-Marxuach says the Defendant cannot have it both ways. The Court overrules ML's objection to admission of the ML-PDR BSLA. The District of Wisconsin reached a similar ruling in Daud v. Nat'l Multiple Sclerosis Society when it overruled the defendant's objection regarding the inadmissibility of an exhibit filed alongside a summary judgment motion. The District Court held that "Defendant cannot utilize an exhibit to support one of its facts, ostensibly representing the exhibit is admissible, but also argue Plaintiff cannot use the same exhibit to support of one of her facts because it is purportedly inadmissible." The Court thus grants Plaintiff's Motion for Partial Summary Judgment. A copy of the Court's Opinion and Order dated July 29, 2020 is available at https://bit.ly/3h0cyDK from Leagle.com. About Puerto del Rey Puerto del Rey, Inc., a/k/a Marina Puerto Del Rey, filed a petition for Chapter 11 protection (Bankr. D.P.R. Case No. 12-10295) on Dec. 28, 2012, in Old San Juan, Puerto Rico, owing $43 million to secured lender First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips and dry storage for 600 boats. Bankruptcy was designed to forestall creditors from attaching assets. In its amended schedules, the Debtor disclosed $99.9 million in assets and $44.6 million in liabilities as of the Petition Date. The Charles A. Cuprill, PSC Law Offices, in San Juan, Puerto Rico, represents the Debtor as counsel. QUALITYTECH LP: Moody's Hikes CFR & Sr. Unsec. Rating to Ba3 ------------------------------------------------------------ Moody's Investors Service upgraded the ratings of QualityTech, L.P., including its senior unsecured debt and corporate family rating to Ba3 from B1. QualityTech, L.P. is the operating partnership of QTS Realty Trust, Inc. (collectively referred to herein as "QTS"). The rating outlook is stable. The rating upgrade reflects the REIT's improved earnings quality resulting from its successful strategic shift to exit non-core cloud and managed services products. The rating upgrade also incorporates QTS's consistently sound operating performance supported by the continued demand for data center assets with strong signed leasing activity from QTS's customer verticals including hybrid colocation, hyperscale and Federal. Management has exhibited good operating and fiscal discipline by maintaining sound liquidity and steady credit metrics as it manages growth. Upgrades: Issuer: QualityTech, L.P. -- Senior unsecured debt, Upgrade to Ba3 from B1 -- Corporate Family Rating Upgrade to Ba3 from B1 Outlook Action: Issuer: QualityTech, L.P. Rating outlook revised to Stable from Positive RATINGS RATIONALE QTS's Ba3 rating reflects an unsecured funding strategy with a largely unencumbered asset base representing 98.6% of gross assets, a diversified tenant roster with more than 1,200 customers, and a manageable debt maturity schedule with capital needs that are generally pre-funded three to four quarters or more in advance through forward equity issuances. In addition, the REIT has been successful in shifting away from the lower margin cloud and managed services, which has allowed QTS to participate in select strategic growth opportunities with hyperscale and Federal customers while continuing to generate good performance within its diversified hybrid colocation platform. During Q2 2020, QTS continued to experience elevated demand for additional connectivity and ancillary services, in part driven by the effects of COVID-19. The continued strength in QTS's leasing performance resulted in a backlog of signed, but not yet commenced, annualized revenue of approximately $111 million, an increase of approximately 10% quarter-over quarter. Same space renewal rates increased by 2.6%, while churn has trended towards the lower end of its historical range, 0.5% for Q2 2020, which brought Q2 2020 YTD churn to approximately 1.1%. Its adjusted EBITDA margin has grown modestly but steadily in the past four quarters reaching 50.0% in Q2 2020 from 46.8% in Q3 2019. These strengths are counterbalanced by the REIT's elevated leverage and meaningful asset concentration, exacerbated by its small asset base. QTS's two largest properties, Atlanta-Metro and Atlanta-Suwanee data centers contributed 31% and 15%, respectively of annual rent for the first six months of 2020. However, the REIT continues to gradually reduce this concentration with organic growth and some acquisitions. QTS's net debt/EBITDA remains elevated at 8.3x TTM Q2 2020 driven by $423 million offering of two separate preferred issuances over the course of 2018 which are both redeemable in 2023. Net debt/EBITDA improves to 7.3x excluding approximately $316 million convertible preferred stock that Moody's expects to be converted at the earliest opportunity in 2023 given the conversion rate and QTS' stock price. The rating outlook is stable reflecting Moody's expectation that QTS will continue to capitalize on strong demand for outsourced server and storage device capacity. The stable rating outlook also incorporates its expectation that QTS will continue to prudently grow and diversify while improving leverage, maintaining adequate liquidity and increasing operating margins over time. QTS's SGL-2 rating is supported by its positive cash flow generation, revolver availability, a minimal near-term maturity schedule, and ample undrawn forward equity proceeds, which should lend flexibility to support growth. At June 30, 2020, QTS's revolving credit facility had $491.1 million available on its $1.0 billion capacity. The revolver expires in December 2023 and contains a one-year extension option to 2024. The REIT has an additional $16.5 million in cash and $590.6 million in undrawn forward equity proceeds. However, the REITs' capex is sizable. As a result of signed leasing activity year-to-date that has outperformed QTS's initial expectations and the sales pipeline visibility for the second half of this year, QTS raised its capex projection for the full year 2020, excluding M&A, to between $650 million to $750 million, up from $550 million to $600 million previously. Positively, more than 75% of its capital development plan is directly tied to signed leases. The REIT's financial flexibility is further enhanced by its sizable unencumbered asset pool. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS To achieve an upgrade, QTS will need to demonstrate its ability to profitably grow its asset base while significantly improving asset diversity. To the extent asset concentration and scale concerns are effectively mitigated, upward ratings momentum could result if QTS improves and sustains its EBITDA margin above 50%, maintains fixed charge coverage above 3.5x and sustains net debt/EBITDA under 6.5x (including preferred stock and Moody's standard operating lease adjustments). The rating upgrade would also require that QTS maintains a development pipeline comfortably below 10% of gross assets. Meaningful deterioration of QTS's liquidity profile or signs of sustained deteriorating operating performance could lead to downward rating pressure. An aggressive growth appetite such that development to gross assets exceeds 10%, net debt/EBITDA is sustained above 8.0x (including preferred stock and Moody's standard operating lease adjustments) will lead to downgrade. A sizable acquisition that poses integration risks or increases leverage could also result in a downgrade. Moreover, QTS's ratings could be downgraded if the REIT experiences higher than expected churn and customer defections, or if industry oversupply results in competitive pricing pressures and deterioration in profitability or strained liquidity. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in September 2018. QTS Realty Trust, Inc., (NYSE: QTS) headquartered in Overland Park, Kansas, USA is the REIT parent of QualityTech, LP. QTS is a provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space. At June 30, 2020, QTS owns, operates or manages 25 data centers and supports more than 1,200 customers primarily in North America and Europe. QUOTIENT LIMITED: Settles Dispute with Ortho Clinical ----------------------------------------------------- Quotient Limited and Ortho Clinical Diagnostics have signed a binding letter of intent that confirms the termination of their former distribution agreement and related contracts and resolves all their disputes over the former distribution agreement. In addition, this ends the pending arbitration between the two companies and establishes a new distributor relationship focused solely on patient transfusion diagnostics. Under the new agreement, Quotient will develop an immunohematology (IH) MosaiQ microarray optimized for the patient transfusion market. Quotient will sell this microarray along with instruments and consumables to Ortho for distribution in Europe and in the US. In addition to payments for the products it will supply, Quotient will also be entitled to payments in the amount of up to $67.5 million. The first non-refundable milestone payment of $7.5 million was received on Sept. 4, 2020. The remaining milestone payments are due upon achievement of certain regulatory and commercial sales benchmarks. Ortho's rights to the IH microarray in the European and US patient transfusion markets are for ten-year terms. Ortho's rights are exclusive so long as Ortho satisfies certain minimum purchase requirements. Under the new agreement Ortho has no rights to applications of Quotient's MosaiQ technology outside of patient transfusion diagnostics. Quotient retains the rights to market, distribute and sell the IH microarray for use in testing blood donors. The current global transfusion diagnostics market is estimated at $3.4 billion of which approximately two-thirds is related to the blood donation market to which Quotient retains all rights. "We are delighted to have Ortho, a world market leader in the transfusion diagnostics sector, leverage its commercial capabilities to sell MosaiQ to patient segment customers," said Franz Walt, chief executive officer of Quotient. About Quotient Limited Penicuik, United Kingdom-based Quotient Limited is a commercial-stage diagnostics company committed to reducing healthcare costs and improving patient care through the provision of innovative tests within established markets. With an initial focus on blood grouping and serological disease screening, Quotient is developing its proprietary MosaiQTM technology platform to offer a breadth of tests that is unmatched by existing commercially available transfusion diagnostic instrument platforms. The Company's operations are based in Edinburgh, Scotland; Eysins, Switzerland and Newtown, Pennsylvania. Quotient Limited reported a net loss of $102.77 million for the year ended March 31, 2020, compared to a net loss of $105.4 million for the year ended March 31, 2019. As of June 30, 2020, the Company had $200.68 million in total assets, $230.87 million in total liabilities, and a total shareholders' deficit of $30.18 million. Ernst & Young LLP, in Belfast, United Kingdom, the Company's auditor since 2007, issued a "going concern" qualification in its report dated June 12, 2020, citing that the Company is currently involved in an arbitration dispute with a customer and an adverse outcome of this dispute in addition to the Company's expenditure plans over the next 12 months could result in net cash outflows over the next 12 months exceeding the Company's existing available cash and short-term investment balances, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. REITMANS (CANADA): Accepted for Listing at TSX Venture Exchange --------------------------------------------------------------- Reitmans (Canada) Limited announced Sept. 1, 2020, that its shares have been accepted for listing on the TSX Venture Exchange (the "TSX-V"). Further to the delisting of the Company's shares on the Toronto Stock Exchange on July 29, 2020, the Company expects that its common shares and Class A shares will begin trading on the TSX-V at the opening of market on September 3, 2020. The trading symbol of the Company's common shares and Class A shares will remain "RET" and "RET-A", respectively. The apparel retailerfiled for bankruptcy protection in May after the pandemic forced it to close all its stores. Reitmans (Canada) was delisted from the Toronto Stock Exchange in July 2020. Trading in the company's common and Class A non-voting shares was suspended after the issuance of the initial order under the bankruptcy proceeding. About Reitmans (Canada) Reitmans (Canada) Limited -- http://www.reitmanscanadalimited.com/ -- is a leading ladies apparel retailer with retail outlets throughout Canada. The Company employs approximately 5,000 people and currently operates 417 stores consisting of 246 Reitmans, 92 Penningtons and 79 RW&CO. On May 19, 2020, Reitmans filed for creditor protection before the Quebec Superior Court pursuant to the Companies' Creditors Arrangement Act (the "CCAA"). Ernst & Young Inc., was the Monitor appointed under the CCAA process. REMINGTON OUTDOOR: JJE Capital's $65M Bid to Lead Sept. 17 Auction ------------------------------------------------------------------ On July 27, 2020, Remington Outdoor Company, Inc. and 12 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Alabama. On July 28, 2020, the Debtors filed a motion to sell substantially all of their assets. On Aug. 20, 2020, the Bankruptcy Court entered an order approving bidding and auction procedures in connection with such sale. The auction, if required, will be held on Sept. 17, 2020 at 10:00 a.m. (CT) virtually via video-conference technology. The Bankruptcy Court will hold a hearing to consider approval of the sale on Sept. 23, 2020 at 10:00 a.m. (CT). The Wall Street Journal reports that Remington Outdoor has agreed to sell its ammunition business out of bankruptcy to South Carolina-based investment firm JJE Capital Holdings LLC for $65 million plus the assumption of liabilities, subject to better offers. The JJE offer came in the form of a stalking-horse bid, setting a floor on the sale price for Remington's ammunition business, which the company has been marketing while in chapter 11. The proposed deal outlined in papers filed in the U.S. Bankruptcy Court in Decatur, Ala., covers the design and manufacturing of ammunition sold under the Remington and Barnes Bullets brands and includes production facilities in Arkansas and Utah. Rick Green, writing for Bloomberg News, reports that Remington Outdoor has filed for bankruptcy for the second time in two years. About Remington Outdoor Remington Outdoor Company, Inc., and its affiliates are manufacturers of firearms, ammunition and related products for commercial, military, and law enforcement customers throughout the world. They operate seven manufacturing facilities located across the United States. The companies' principal headquarters are located in Huntsville, Alabama. On March 25, 2018, Remington Outdoor Company, Inc. and 12 affiliated debtors sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 18-10684) to seek confirmation of a prepackaged plan of reorganization. Remington exited bankruptcy in May 2018 after winning approval of its plan. Remington Outdoor Company and its affiliates again sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020. At the time of the filing, Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Clifton R. Jessup Jr. oversees the present cases. In the recent cases, the Debtors tapped O'Melveny & Myers LLP as their bankruptcy counsel, Burr & Forman LLP as local counsel, M-III Advisory Partners LP as financial advisor, Ducera Partners LLC as investment banker, and Prime Clerk LLC as notice, claims and balloting agent. The U.S. Bankruptcy Administrator for the Northern District of Alabama appointed a committee of unsecured creditors on Aug. 6, 2020. The committee is represented by Fox Rothschild, LLP and Baker Donelson Bearman Caldwell & Berkowitz, PC. RGN-DENVER XI: Case Summary & Unsecured Creditor ------------------------------------------------ Debtor: RGN-Denver XI, LLC 3000 Kellway Drive Suite 140 Carrollton, TX 75006 Business Description: RGN-Denver XI, LLC is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: September 8, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-12087 Debtor's Counsel: Ian J. Bambrick, Esq. FAEGRE DRINKER BIDDLE & REATH LLP 222 Delaware Avenue, Suite 1410 Wilmington, Delaware 19801 Tel: (302) 467-4200 Email: Ian.Bambrick@faegredrinker.com Debtor's Financial Advisor: ALIXPARTNERS Debtor's Restructuring Advisor: DUFF & PHELPS, LLC Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by James S. Feltman, responsible officer. The Debtor listed Civica Office LLC as its sole unsecured creditor holding a claim of $50,209. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/TZELVQI/RGN-Denver_XI_LLC__debke-20-12087__0001.0.pdf?mcid=tGE4TAMA SHARING ECONOMY: Wong Ying Ying Quits as Independent Director ------------------------------------------------------------- Wong Ying Ying resigned as an independent director of Sharing Economy International Inc. on Aug. 24, 2020. Cheng Wai Yin has agreed to serve as the Company's new independent director, effective Aug. 31, 2020. About Sharing Economy Hong Kong-based Sharing Economy International Inc. is engaged in the design, manufacture and distribution of a line of proprietary high and low temperature dyeing and finishing machinery to the textile industry. The Company's products feature a high degree of both automation and mechanical-electrical integration. Its products are used in dyeing yarns such as pure cotton, cotton-polyester, terylene, polyester wool, poly-acrylic fiber, nylon, cotton ramie, and wool yarn. The Company reported a net loss of $27.51 million for the year ended Dec. 31, 2019, compared to a net loss of $42.96 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $5.10 million in total assets, $14.02 million in total liabilities, and a total stockholders' deficit of $8.92 million. Audit Alliance LLP, in Singapore, the Company's auditor since 2020, issued a "going concern" qualification in its report dated July 24, 2020, citing that the Company's minimal activities raise substantial doubt about its ability to continue as a going concern. SHILOH INDUSTRIES: Sept. 11 Deadline Set for Panel Questionnaires ----------------------------------------------------------------- Shiloh Industries, Inc., which filed for Chapter 11 protection, authorizes the United States Trustee to appoint an Official Committee of Unsecured Creditors in its bankruptcy case. If a party wishes to be considered for membership on the Committee, it must complete a required Questionnaire available at https://tinyurl.com/y5t9j5fu and return it via email to Timothy.Fox@usdoj.gov at the Office of the United States Trustee so that it is received no later than Friday, Sept. 11, 2020 at 4:00 p.m. Under the Bankruptcy Code, the Committee has the right to demand that the debtor consult with the Committee before making major decisions or changes, to request the appointment of a trustee or examiner, to participate in the formation of a plan of reorganization, and in some cases, to propose its own plan of reorganization. About Shiloh Industries Shiloh Industries, Inc. and its subsidiaries are global innovative solutions providers focusing on lightweighting technologies that provide environmental and safety benefits to the mobility markets. On Aug. 30, 2020, Shiloh Industries and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del., Lead Case No. 20-12024). The petitions were signed by Lillian Etzkorn, authorized person. The Debtors reported total consolidated assets of $664,170,000 and total consolidated debts of $563,360,000 as of April 30, 2020. Jones Day and Richards, Layton & Finger P.A. have been tapped as legal counsel of the Debtors. Houlihan Lokey Capital Inc serves as the Debtors' financial advisor; Ernst & Young LLP serves as restructuring advisor; and Prime Clerk LLC serves as claims and noticing agent. SITEONE LANDSCAPE: S&P Alters Outlook to Positive, Affirms BB- ICR ------------------------------------------------------------------ S&P Global Ratings affirmed its 'BB-' issuer credit rating on SiteOne Landscape Supply Inc. and revised its outlook to positive from stable. The rating agency also affirmed its 'BB' ratings on SiteOne's first-lien term loan. The equity stock offering, which SiteOne completed in August 2020, provides additional financial flexibility to the company such that it can continue pursuing its growth strategy, even if business conditions worsen. SiteOne plans to use the $262 million in net proceeds from its equity stock offering for general corporate purposes such as bolt-on acquisitions and debt reduction. The company's strategy has been to grow by making small tuck-in acquisitions (usually of $1 million-$30 million, average $9.5 million per acquisition in 2018 and 2019). Since 2014, SiteOne has completed over 50 acquisitions, including six so far in 2020. These acquisitions combined with organic growth have resulted in its revenues expanding from $1.18 billion in 2014 to $2.36 billion in 2019. In the past, the company has primarily funded these acquisitions under its asset-based loan (ABL) facility and has used free cash flow to repay these borrowings. As a result, SiteOne has operated with adjusted leverage in the 3x-4x range, with seasonal working capital needs pushing adjusted leverage to the higher end of this range. The recent stock offering not only provides additional funds, but also reduces SiteOne's reliance on its ABL facility to finance future acquisitions. So, if business conditions worsen under prolonged recessionary pressures, reducing operating cash flow, SiteOne should still have sufficient financial flexibility to pursue acquisition opportunities without jeopardizing its leverage thresholds. Strength in end markets, particularly repair and maintenance, have led to favorable revenues the second quarter of 2020, and S&P expects this to continue over the next few quarters. The overall strength in homebuilding activity over the last few months has resulted from favorable mortgage rates and higher demand for suburban homes. Further, increased focus by consumers on home improvement spending, rising trend of outdoor living investments, and more do-it-yourself projects amid stay-at-home restrictions have led to strong replacement and maintenance demand. These factors combined with the small-ticket nature of many of SiteOne's products, and its high exposure (over 60% of the revenues) to the repair and maintenance end markets have resulted in improved revenues and earnings in the second quarter. Net sales increased 9% in the quarter, on the back of organic sales growth of 3% and incremental revenues from acquisitions closed last year. Furthermore, S&P expects the favorable demand conditions to continue through the second half of this year into 2021. S&P therefore now expects SiteOne's annual revenue to grow about 8%-9% in 2020 and 2021. S&P now expects SiteOne to operate with an adjusted leverage in the 2x-3x range versus the rating agency's prior expectation in the 3x-4x range. In anticipation of a slowdown in the second quarter, management took steps to curtail expenses and preserve cash. This led to EBITDA margin expansion and cash flow growing faster than revenues. The company was able to sustain its above-average EBITDA margins at about 11%, while reducing adjusted leverage to 2.5x (for the 12 months ended June 30, 2020). However, as demand recovers S&P expects some of these cost savings to reverse and the company to have an increased need for working capital. However, due to the additional liquidity provided by the stock offering, even with some acquisition spending, S&P thinks SiteOne will end this year with higher-than-usual cash on hand. The rating agency projects SiteOne's adjusted leverage (net basis) will be about 2x-2.5x and fund from operations (FFO)/debt will be over 30% by year-end 2020. Furthermore, S&P believes the company will operate with lower target leverage thresholds of adjusted leverage in the 2x-3x range. The positive outlook on SiteOne indicates the potential for a higher rating over the next 12 months, based upon the company's ability to grow its revenues and sustain EBITDA margins of 10%-11% during the current recession, while maintaining adjusted leverage in the 2x-3x range and FFO/debt of over 30%. S&P could raise its ratings over the next 12 months on SiteOne by one notch if: -- EBITDA and cash flows continue to improve such that adjusted leverage remains within the 2x-3x range and FFO/debt stays above 30%; and -- The company sustains EBITDA margins at or above the current levels. S&P could revise the outlook back to stable if: -- SiteOne pursues large debt-funded acquisitions, such that adjusted leverage rises back to the 3x-4x range; or -- Recessionary pressures cause EBITDA declines of 20% or more, resulting in adjusted leverage of over 3x. SOUTHLAND ROYALTY: Ch. 11 Will Void Williams Claim Advances ----------------------------------------------------------- Law360 reports that the Chapter 11 filing of Southland Royalty will nullify the claim advances of Williams Cos. On July 28, 2020, a Delaware bankruptcy judge kept alive much of a multicount suit aimed at restructuring or nullifying a Williams Cos. affiliate's gas-handling agreements with bankrupt oil and gas producer Southland Royalty Co. LLC, including some counts the affiliate said would "confiscate" assets worth hundreds of millions of dollars. U.S. Bankruptcy Judge Karen B. Owens, ruling during a court teleconference, dismissed three counts and parts of three others, while moving toward trial on the balance of the original 14-count adversary suit. The suit asked Judge Owens to allow termination of minimum future gas volume obligations to Williams affiliate Wamsutter LLC, commitments. About Southland Royalty Southland Royalty Company LLC -- http://www.southlandroyaltyco.com/ -- is a privately held independent exploration and production company engaged in the acquisition and development of hydrocarbons. Headquartered in Fort Worth, Southland Royalty Company conducts its business across four states, with the majority of operations in Wyoming and New Mexico. Southland Royalty Company was formed principally to produce and extract hydrocarbons in the Wamsutter field of the Green River Basin and in the San Juan Basin. Southland Royalty Company sought Chapter 11 protection (Bankr. D. Del. Case No. 20-10158) on Jan. 27, 2020. In the petition signed by CRO Frank A. Pometti, the Debtor was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. The Debtor tapped Shearman & Sterling LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as Delaware counsel; AP Services, LLC as interim management services provider; PJT Partners Inc. as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. STERICYCLE INC: Egan-Jones Lowers FC Senior Unsecured Rating to B+ ------------------------------------------------------------------ Egan-Jones Ratings Company, on September 2, 2020, downgraded the foreign currency senior unsecured rating on debt issued by Stericycle Incorporated to B+ from BB-. Headquartered in Bannockburn, Illinois, Stericycle, Incorporated provides regulated medical waste management services. SUPERIOR ENERGY: Egan-Jones Lowers Senior Unsecured Ratings to CC ----------------------------------------------------------------- Egan-Jones Ratings Company, on September 3, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Superior Energy Services Inc. to CC from D. EJR also downgraded the rating on commercial paper issued by the Company to C from D. Headquartered in Houston, Texas, Superior Energy Services, Inc. provides the drilling, completion and production-related needs of oil and gas companies. SUR LA TABLE: Second Avenue Provides $35M Financing to JV --------------------------------------------------------- Second Avenue Capital Partners, LLC ("SACP") (www.secondavecp.com) announced it has provided a $35,000,000 senior secured credit facility to a joint venture of Marquee Brands and CSC Generation in support of their newly acquired luxury kitchenware retailer Sur La Table. Proceeds from the transaction are being used to provide additional working capital and support growth. Sur La Table was founded in 1972 and quickly became a preeminent brand and curator of the finest culinary products and tools to professional and home chefs alike. In addition to serving as a critical retailer to global brands in the sector, Sur La Table is also the largest provider of non-degree cooking schools in the United States with over 650,000 students growing at 19% per year serving as a pioneer in experiential retail and unprecedented customer loyalty. "The acquisition of Sur La Table, a company known for its exceptional quality, represented an appealing opportunity for us, said Justin Yoshimura, CEO of CSC Generation. "Sur La Table's seamless omnichannel shopping experience guided by passionate and highly knowledgeable staff, technology, and one-a-kind offerings will allow the company to recover and forge ahead in a post-COVID-19 retail environment." "SACP was a true partner throughout the acquisition, from supporting us in the bidding process to delivering a credit facility concurrent with our closing," Mr. Yoshimura continued. "They remained flexible and executed on the terms provided, adjusting with us as the deal dynamics evolved. Within one week, SACP delivered a capital solution that provides Sur La Table with the resources to build long-term success." "These uncertain times have been very disruptive to the retail sector," said Chris O'Connor, President of Second Avenue Capital Partners. "Because of that disruption, many lenders are stepping back from the space. But with the insight gained from our affiliates and our retail-focused approach, these are exactly the types of transactions where we lean in. With Sur La Table, we see more than just a business with a loyal customer base. We see a company with a product offering that has enhanced purpose for an improved quality of life centered around the home." About Second Avenue Capital Partners LLC – Second Avenue Capital Partners, LLC (www.secondavecp.com), a Schottenstein Affiliate, is a finance company specializing in asset-based loans for the broader retail and consumer products industry. Focused on serving middle-market companies, SACP leverages the experience of retail operators, product merchants, and lenders to provide an array of customized, capital solutions for businesses. This unique merchant perspective gives SACP the ability to recognize and unlock value in assets other capital providers often overlook or do not understand. The firm's tailored financial solutions are a vital resource for clients as they seek the capital necessary to effectuate strategy and achieve financial objectives. Headquartered in Boston, Second Avenue Capital Partners also has offices in New York, Columbus, and Los Angeles. About Sur La Table - Founded in 1972 at Seattle's historic Pike Place Market, Sur La Table is the trusted resource for customers passionate about cooking and entertaining. The company's catalog of products encompasses cookware, kitchen electrics, tools and gadgets, cutlery, bakeware, tabletop, glassware, and locally sourced food and accessories, available in over 50 stores nationwide as well as online at www.surlatable.com. The company also operates the largest non-professional cooking school in the United States, offering cooking classes from kitchens located in 35+ locations. Cooks from beginner to advanced can take cooking classes to learn, build skills, and get inspired to live a better life through cooking. Follow Sur La Table on Facebook, Instagram, Pinterest, and YouTube. About CSC Generation - CSC Generation Holdings is a technology start-up that enables brands to become "digitally native." Over the next decade, CSC Generation's goal is to reach $10B in revenues by helping retailers survive. CSC Generation is founded by Justin Yoshimura and backed by world-class investors including Altos Ventures and Panasonic. About Marquee Brands - Marquee Brands (www.marqueebrands.com) is a leading global brand owner, marketer and media company. Owned by investor funds managed by Neuberger Berman, one of the world's leading employee-owned investment managers, Marquee Brands targets high quality brands with strong consumer awareness and long-term growth potential. Marquee Brands seeks to identify brands in various consumer product segments with the goal of expanding their reach across retail channel, geography and product category while preserving the brand heritage and enhancing the ultimate consumer experience. Through its global team of professionals and partners, Marquee Brands monitors trends and markets in order to grow and manage brands in partnership with retailers, licensees and manufacturers through engaging, impactful strategic planning, marketing, and ecommerce. About Sur La Table Sur La Table, Inc. -- https://www.surlatable.com/ -- is a privately held retail company that sells kitchenware products, including cookware, bakeware, kitchen tools, knives, small appliances, dining and home products, coffee and tea, food, and outdoor cookware. SLT Holdco, Inc. and affiliate, Sur La Table, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Tex. Lead Case No. 20-18368) on July 8, 2020. The petition was signed by Jason Goldberger, chief executive officer. At the time of the filing, SLT Holdco was estimated to have assets and liabilities of between $10 million to $50 million. Sur La Table was estimated to have assets and liabilities of between $100 million to $500 million. Michael D. Sirota, Esq., Warren A. Usatine, Esq., David M. Bass, Esq., Jacob S. Frumkin, Esq. of Cole Schotz P.C., serve as counsel to the Debtors. SOLIC Capital is the Debtors' financial advisor and investment banker. A&G Realty Partners LLC acts as the Debtors' real estate advisor. Great American Group, LLC and Tiger Capital are the Debtors' sales consultant. Omni Agent Solutions is the Debtors' claims and noticing agent. SWITCH LTD: Moody's Rates $500MM Sr. Unsec. Notes Due 2028 'B1' --------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to Switch, Ltd.'s proposed $500 million senior unsecured notes due 2028 (Unsecured Notes). The net proceeds from the sale of the Unsecured Notes issuance will be used to repay the outstanding borrowings under Switch's revolving credit facility and a portion of its term loan B, with the remaining proceeds to be used to add cash to the balance sheet. Moody's also assigned a Ba1 rating to the company's newly amended and extended $500 million senior secured revolving credit facility and upgraded its senior secured term loan B (due 2024) to Ba1 from Ba3. Moody's has also affirmed Switch's Ba3 corporate family rating (CFR) and Ba3-PD probability of default rating (PDR), and maintained the company's SGL-2 speculative grade liquidity rating. Switch's outlook remains positive based on the company's solid financial position and growth upside from data center builds and continued expansion within the company's four US regional markets. Switch's financial policy has historically incorporated a prudent approach to funding cash flow deficits and remains an important driver of the credit profile going forward. The company is also expected to maintain its currently low dividend with only small annual increases going forward. Assignments: Issuer: Switch, Ltd. Senior Secured Bank Credit Facility, Assigned Ba1 (LGD2) Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD5) Affirmations: Issuer: Switch, Ltd. Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Upgrades: Issuer: Switch, Ltd. Senior Secured Bank Credit Facility, Upgraded to Ba1 (LGD2) from Ba3 (LGD3) Outlook Actions: Issuer: Switch, Ltd. Outlook, Remains Positive RATINGS RATIONALE Switch's Ba3 CFR reflects its strong growth profile and bookings trends, contracted recurring revenue, high margins, low churn, efficient capital investment and the company's market position operating some of the world's largest data centers providing retail colocation and interconnection services. The company's rating is also supported by its patent protected technology, innovative data center design concepts and value proposition that differentiates it from competitors. In addition, the company has a solid asset base relative to its debt load and owns the majority of its assets, which should allow for significant operating leverage as the business continues to scale with revenue growth in the low double-digits. These factors are offset by the company's moderate scale, improving but still concentrated customer profile, moderate leverage and negative free cash flow resulting from stabilized but still high capital intensity associated largely with success-based growth. Moody's expects Switch's negative free cash flow, the result of capital investments to support growth, to steadily decline further in 2021 and 2022. Switch's debt leverage (Moody's adjusted) for the last 12 months ending June 30, 2020 was 4.0x. Moody's has maintained an SGL-2 speculative grade liquidity rating on Switch primarily supported by its cash balances and $500 million revolver despite its expectation of negative free cash flow over the next 12 months. Pro forma for the company's Unsecured Notes issuance, Switch will have about $70 million of cash on hand and full availability under its revolver. Moody's anticipates the company will rely on its cash balances and utilize its revolver to finance its cash flow deficit for the next 12-18 months. Moody's expects capital spending to be about 58% of revenue in 2020 and 2021, respectively, down from capital spending levels near 70% of revenue in 2018. However, Moody's notes that if liquidity becomes strained, Switch can pull back on current or future growth-based capital spending and estimates that maintenance capital spending will range at low single-digit levels as a percentage of revenue. The company also has a quarterly dividend and an annual cash tax distribution that negatively, but only nominally, impacts free cash flow. The company recently increased its dividend to a higher but still low level, but Moody's expects future annual increases will be only nominal in nature. In concert with its inaugural senior unsecured notes issuance, Switch has also amended its maintenance covenant to a 4x senior secured leveraged ratio from a total leverage ratio. The instrument ratings reflect the probability of default of Switch, as reflected in the Ba3-PD probability of default rating, an average expected family recovery rate of 50% at default, and the loss given default (LGD) assessment of the debt instruments in the capital structure based on a priority of claims. The first lien senior secured credit facilities are rated Ba1 (LGD2), two notches above the Ba3 CFR, given the loss absorption support provided by the company's new senior unsecured notes rated B1 (LGD5). The positive outlook reflects Moody's expectation that Switch will increase its scale through steady revenue and EBITDA growth, maintain leverage below 4x (Moody's adjusted) on a sustained basis and prudently fund future organic or any M&A-related growth. Moody's expects Switch will continue to initially fund cash shortfalls from organic growth by drawing down on its $500 million revolver. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Switch's ratings following continued strong bookings trends, steady revenue and EBITDA growth execution in both new and existing markets, and if leverage remains below 4x (Moody's adjusted) on a sustained basis. The rating could be downgraded if liquidity deteriorates or if leverage is sustained above 4.5x (Moody's adjusted). Also, the ratings could face pressure if the company engages in shareholder friendly activity that pressures its credit metrics or liquidity. The principal methodology used in these ratings was Communications Infrastructure Industry published in September 2017. Switch, Ltd. provides colocation space and related services to global enterprises, financial companies, government agencies and others that conduct critical business on the internet. Switch also licenses its intellectual property to data center equipment manufacturers. The company operated 12 data centers across four campuses as of June 30, 2020. TALLGRASS ENERGY: Fitch Lowers LT IDR to BB-, Outlook Negative -------------------------------------------------------------- Fitch Ratings has downgraded Tallgrass Energy Partners, LP's (Opco) Long-Term Issuer Default Rating (IDR) to 'BB-' from 'BB'. The senior unsecured rating for Opco has been downgraded to 'BB-'/'RR4' from 'BB'/'RR4'. The senior secured rating for Opco is affirmed at 'BB+'/'RR1'. The Outlook has been revised to Negative from Stable. Fitch has affirmed Prairie ECI Acquiror LP's (Prairie ECI Acquiror LP, as borrower under the Term Loan B, and Tallgrass Energy, LP, as pledgor in the Term Loan B structure are referred to collectively as, Holdco) IDR at 'B+'. Fitch has downgraded Holdco's senior secured rating to 'B'/'RR5' from 'BB-'/'RR3'. The Outlook has been revised to Negative from Stable. The affirmation of Prairie ECI Acquiror LP's IDR is the result of a balance of negative and positive developments. On the positive side, Fitch has, as it always does, reviewed its Parent Subsidiary Linkage judgment, and with this current review finds there should be one, not two, notches of difference between the Opco and Holdco IDRs. The negative developments are categorized as follows. One development is a forecast of fundamentals for the Tallgrass family that is worse (as summarized in the next paragraph) than Fitch expected in February 2020, and the other development is a change in the policy relating to distribution to Holdco from Opco. Fitch previously assumed a distribution policy that translated into relatively modest stand-alone leverage (the ratio of Holdco-level debt to distributions into Holdco). A new distribution policy was recently established pertaining to Opco, and it calls for a cut in distributions from Opco to Holdco from the historic run-rate. Accordingly, Fitch now contemplates high stand-alone leverage for Holdco. As mentioned, the downgrade of Tallgrass Energy Partners, LP's IDR is due to a forecast of fundamentals that are worse than Fitch expected in February 2020. At that time, Fitch noted in its press release that forecast leverage was rising from past forecasts. In point of fact, and to focus on the leverage denominator, in February 2020 Fitch forecast that 2021 proportionate-for-ROCKIE consolidated EBITDA would be approximately $950 million to $1 billion. Fitch now forecasts 2021 proportionate EBITDA to be approximately $825 million-875 million. The Negative Outlook is set for both Prairie ECI Acquiror LP and Tallgrass Energy Partners, LP based on their exposure to long-term shippers on each of Pony Express and ROCKIE that are rated lower than BB+. Certain shippers of Opco are deemed to have single-B category credit quality. Fitch views the retention of cash in the Tallgrass family that is facilitated by the new distribution policy to likely lead to debt repayment (as opposed to growth capex). However, if a large-sized shipper declares bankruptcy soon and rejects its contract with Tallgrass, the prompt effect will overcome the positive of the change in distribution policy, as it takes time for the benefit of the change in distribution policy to reflect significant Opco de-leveraging. KEY RATING DRIVERS Leverage: For both Holdco and Opco, the current forecast for leverage for 2020 leverage represents an increase (both on a proportionate consolidated basis) than what Fitch had previously expected. For Opco, in 2020 Fitch had expected proportionate consolidated leverage of about 6.0x, and the forecast is now for 6.2-6.3x. Take-or-Pay and Minimum Volume Commitment: Opco has had low cash flow volatility historically. The westbound service on ROCKIE is almost fully contracted, and the contract coverage on this segment is approximately 12 years. Pony Express has minimum volume commitments for a majority of capacity. A considerable amount of Pony Express capacity is under contracts that provide with volume incentive rates, which historically has been a contract structure that has attracted incremental significant volumes, and these volumes that have been quite steady over time. Counter-party Credit Risk: Certain parts of Opco's business reveal customers that are financial distress or bankruptcy. Ultra-Petroleum Corp. affects ROCKIE, and Whiting Petroleum Corporation affects the water business of Opco. The Negative Outlook for both Opco and Holdco relates to counter-party credit risk trends, some of which date back about 12 months (with some recent up trends mixed in with the overall down trend). ROCKIE is relatively insensitive to customer credit risk movements in the 'B+'/'BB-'/'BB'/'BB+' range, yet concerns exist about some lower-rated and non-rated customers of ROCKIE. Opco's Pony has a degree of execution risk in achieving volumes over minimum volume commitment (MVC) levels, and counterparty credit volatility even in the 'B+'/'BB-' range may potentially correlate, in Fitch's view, with producer plans for shrinking volumes. Parent Subsidiary Linkage: Per Fitch's relevant criteria, Holdco and Opco existing a strong subsidiary/weak parent relationship. Legal ties are weak, as, among other things, Opco does not guarantee the debt of Holdco. Operational ties are approximately weak. In particular, there is no centralized treasury. Opco has its own revolving credit facility, while Holdco at June 30, 2020 has unrestricted cash for an amount that is a few times higher than needed to make its next several quarterly debt service payments. Given the weak ties, overall linkage is deemed to be weak. At this juncture, Fitch choses to have Holdco and Opco's IDRs be different, one from the other. The notching between the IDRs is one notch, whereas before it was two notches. One notch is more appropriate given what Fitch now realizes is some potential for ebbs and flows as to what Holdco needs (or does not need) from Opco. This corporate family (so, each of Holdco and Opco) has a relevance Score of 4 for Group Structure and Financial Transparency as it possesses a complex group structure, with ownership concentration. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY The Key Rating Driver, on Parent Subsidiary Linkage, serves as the basis of the derivation analysis. The focus of peer analysis is on companies which make for a good comparison to the Tallgrass group's consolidated profile (a term in Parent Subsidiary Linkage Criteria). Williams (BBB-/Stable) shares with the Tallgrass group the core of the credit being two long-distance FERC regulated pipes. Williams FERC-regulated pipes are each stronger than either of Tallgrass' two largest FERC regulated pipelines. This element of superiority is balanced by Williams having a much larger gathering and processing business than Tallgrass. G&P is a higher risk business than FERC-regulated pipelines. Fitch expects Williams to have 2020 total debt to EBITDA in the 4.8-5.0x range. The two families (Williams Companies, Inc. on the one side, and the average IDR of the Tallgrass family on the other) are separated in ratings by a large amount, and the explanation is the leverages and sizes relevant to each family. NuStar Energy (BB-; Stable) has a FERC-regulated pipeline that carries refined products. It is the minority of the business. Yet this pipeline is stronger than either of Tallgrass' two pipelines. Fitch forecasts 2021 total debt to EBITDA of approximately 5.6x-6.0x. This 2021 leverage profile is similar to Fitch's forecast of leverage for Opco. However, the proportional-for-ROCKIE Holdco leverage is expected to be approximately 7.5x in 2021. Accordingly, the Tallgrass' consolidated profile is deemed to be 'b+', and, off of this 'b+', Holdco's IDR is 'B+' and Opco's is 'BB-'. KEY ASSUMPTIONS -- Fitch Price Deck of West Texas Intermediate, 2021 $42/barrel, 2022 $47, and Long-term $50, and Henry Hub 2021 and out, $2.45/thousand cubic feet. -- ROCKIE distributions and EBITDA consistent with Fitch's expectations for ROCKIE; -- The non-ROCKIE part of Opco's business absorbs some shortfalls against Fitch previous expectations related to customer bankruptcies; -- 2021 capital expenditures and investments in joint ventures falls to level significantly lower than the previous trough; -- 2021 distributions from Opco to Holdco are, for each quarter, approximately equal to the distribution declared in August 2020; -- The Recovery Rating 5 (RR5) for Holdco's Term Loan B is based on a scenario where Opco is in financial distress along with Holdco. The going concern proportionate EBITDA upon a 2023 emergence is an assumption of $800 million. The previous 'RR3' was based on Holdco being in distress and Opco healthy, and so the previous cash flow figure is not comparable to the case here. The assumed multiple is 9.0x, which is at a material discount to the ample historical track record for long-distance natural gas pipelines, and is approximately consistent with the track record for oil pipelines. As specified in Fitch's Corporates Notching and Recovery Ratings Criteria, a 10% administrative claim is assumed. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: --Fitch would consider stabilizing the Outlooks for both Holdco and Opco if counter-party credit risk on MVC contracts and take-or-pay contracts (including at ROCKIE) was deemed to be lessening, and with respect to Pony Express, that volumes were forecasted to be sustainably at or above forecasted levels, all in the context of leverage in-line with Fitch's expectation; --For both Opco and Holdco, proportionate consolidated Total Debt-to-Adjusted EBITDA (measured at the Holdco level) that is expected to be below 7.0x for a sustained period. Factors that could, individually or collectively, lead to a negative rating action/downgrade: --For both Opco and Holdco, proportionate consolidated total debt-to-adjusted EBITDA (measured at the Holdco level) that is expected to be above 8.0x for a sustained period; --For both Opco and Holdco, a significant depletion of Holdco's consolidated liquidity, compared to its current liquidity position; --For both Opco and Holdco, a large customer with a long-term take or pay (ROCKIE) contract or MVC (Pony Express) contract has a financial condition that is consistent with a potential bankruptcy filing, and the current market for the Opco's transportation service indicates the potential for a contract rejection. LIQUIDITY AND DEBT STRUCTURE Holdco Liquidity Adequate: Liquidity needs at Prairie ECI Acquiror LP are expected to be limited to interest payments, relatively small debt amortization, and, in the event the Opco-Holdco distribution policy changes back to the historic one (not expected by Fitch) distributions to owners. Fitch expects distributions from Tallgrass Energy Partners, LP to be supportive of Prairie ECI Acquiror, LP's ability to meet its debt service obligations and its minimum debt service coverage ratio covenant of 1.1x. In Fitch's view, liquidity is also supported by a significant amount of unrestricted cash at Holdco for future interest payments. As of June 30, 2020, the borrowing amount under the term loan was $1.48 billion. Opco: Liquidity Adequate: On July 26, 2018, Opco and certain of its subsidiaries entered into an amendment to its existing revolving credit facility. The amendment modified certain provisions of the credit agreement to, among other things, increase the available amount of the Opco revolving credit facility to $2.25 billion, reduce certain applicable margins in the pricing grids used to determine the interest rate and revolving credit commitment fees, modify the use of proceeds to allow Opco to pay off the Tallgrass Equity, LLC revolving credit facility, and increase the maximum total leverage ratio to 5.5x. In addition to the 5.5x leverage covenant, the revolver requires Opco maintain a consolidated senior secured leverage ratio of not more than 3.75x and a consolidated interest coverage ratio of not less than 2.5x. As of June 30, 2020, Opco had $1.47 billion in borrowings outstanding under its credit facility and was in compliance with its covenants, leaving roughly $777 million in availability. Under Fitch's assumptions, management will ensure a fluid refinancing and/or amendment of the revolver. Opco currently has four series of senior secured notes outstanding with maturity dates in 2023, 2024, 2027 and 2028, so near-term maturities are limited to the revolver which matures in June 2022. Fitch believes Opco's near-term maturity obligations are manageable. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch typically adjusts midstream energy companies' EBITDA to exclude equity in earnings of unconsolidated affiliates but include cash distributions from unconsolidated affiliates. For additional perspective, Fitch evaluates Opco and Holdco relative to its proportionate consolidation-based leverage, which includes pro rata EBITDA and pro rata debt of levered joint ventures. For Opco and Holdco, in addition to calculating its leverage metrics inclusive of REX distributions as described Fitch has also proportionately consolidated ROCKIE in Opco and Holdco's leverage calculations to include 75% of ROCKIE EBITDA and debt in Opco and Holdco's metrics, amounts proportional to their ownership interest in the pipeline. As to ROCKIE's EBITDA, Fitch adds to operating income changes in the Contract Asset account. Lastly, Fitch reviews Holdco's Stand-alone Leverage, but unlike in the last press release for Holdco, Fitch no longer has Stand-alone Leverage in its Sensitivities. ESG CONSIDERATIONS Prairie ECI Acquiror LP: Group Structure: 4, Financial Transparency: 4 Tallgrass Energy Partners, LP: Group Structure: 4, Financial Transparency: 4 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, either due to their nature or the way in which they are being managed by the entity. TREESIDE CHARTER: Court Confirms Chapter 11 Reorganization Plan --------------------------------------------------------------- Bankruptcy Judge R. Kimball Mosier issued his findings and conclusions regarding the confirmation of Debtor Treeside Charter School's chapter 11 plan of reorganization dated July 22, 2020. Judge Mosier finds that the Confirmed Plan complies with, and the Debtor satisfies, all applicable confirmation requirements. Judge Mosier states that the Plan establishes five Classes of Claims. Classes 1, 3, 4, and 5 were impaired and were entitled to vote on the Plan, and 100% of creditors in Classes 1, 3, and 4 which submitted ballots voted in favor of the Plan No objections were filed by any creditor or party in interest to the Plan. Those Creditors who are impaired, but did not vote, are bound by the Class that accepted the Plan. Accordingly, the Court finds the Debtor meets the voting requirements under Bankruptcy Code section 1129(a)(8) and (a)(10). The Plan was also proposed in good faith and not by any means forbidden by law and, therefore, complies with the requirements of section 1129(a)(3). In determining that the Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the filing of the Bankruptcy Case and the formulation of the Plan. The Plan satisfies section 1129(a)(7) with respect to all Classes of Claims. All Classes have either accepted the Plan, or will receive property of a value, as of the Effective Date, that is not less than the amount that such holder would so receive or retain if the Debtor's Estate was liquidated under chapter 7 on the Effective Date. As such, section 1129(a)(7)(A) is satisfied. In addition, the Court holds that the Plan is feasible and complies with section 1129(a)(11) because confirmation is not likely to be followed by a liquidation or the need for further financial reorganization of the Debtor. The Court is satisfied that the Plan offers a reasonable prospect of success and is workable. As such, the requirements of section 1129(a)(11) are satisfied. A copy of the Court's Findings and Conclusions dated July 29, 2020 is available at https://bit.ly/2PPl2li from Leagle.com. About Treeside Charter School Treeside Charter School sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No. 19-28378) on Nov. 12, 2019. At the time of the filing, the Debtor disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. The case is assigned to Judge R. Kimball Mosier. Cohne Kinghorn, P.C., is the Detor's legal counsel. Hashimoto Forensic Accounting, LLC, is the accountant and financial advisor, replacing Piercy Bowler Taylor & Kern. TRUCK HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B-' ICR -------------------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based truck accessories supplier Truck Holdings Inc. (THI; d/b/a Truck Hero) to stable from negative and affirmed the 'B-' issuer credit rating. Sales in recent months exceeded S&P's prior expectations and the rating agency now expects steady demand for the remainder of the year. Despite the ongoing U.S. recession stemming from the coronavirus pandemic, discretionary demand for products at a few aftermarket suppliers, including THI, appears to buck the trend as consumers look to upgrade their trucks. THI sells many products directly through warehouse distributors and online channels to install at home and the company reported stronger order rates in May, June and July, especially through its e-commerce channels. S&P believes there is still some risk that demand could be the result of a pull-forward from subsequent quarters and the effect of stimulus payments to consumers, and that some consumers may avoid making nonessential upgrades to their vehicles if there is more fallout in the economy next year. This could partially negate the overall advantage of the company's go-to-market strategy and potential cross-selling opportunities from its Lund International Holding Co. acquisition last year. Roughly 12.5% of sales is tied to new truck production, though that is supplied to automaker dealer networks and is not an inline install at the plant. Despite some recovery in 2021 and 2022, S&P does not expect U.S. light vehicle sales to approach normalized levels of 16 million units before 2023 and this will partially limit THI's sales growth as well. "The stable outlook on THI reflects our view that stronger-than-expected demand for its products should support positive free flow in 2020, allowing it to generate free cash flow," S&P said. The rating agency expects the company will maintain its market share in its product lines, while using acquisitions to expand new product areas in 2021. "We could raise the rating on THI if the company reduces debt to EBITDA below 6.5x while sustaining an FOCF-to-debt ratio of around 5%. This could be due to stronger margins from cost reduction, greater synergy realization from past acquisitions, and reduced working capital needs due to a faster cash collection cycle. We would also need to be confident that the company can maintain financial policies that support such metrics," S&P said. "Though unlikely over the next 12 months, we could lower our ratings on THI if EBITDA margins fall another 20%, causing negative FOCF for multiple quarters, thereby draining liquidity or pushing leverage close to 7x on a sustained basis. This could occur if demand for the company's products is weaker than expected due to a deteriorating economic environment, a sharp increase in gas prices that dampens the growth of discretionary purchases, greater competition, higher-than-expected integration costs, or rising commodity prices," the rating agency said. TURBOCOMBUSTOR TECHNOLOGY: Moody's Withdraws Caa1 CFR ----------------------------------------------------- Moody's Investors has withdrawn all of its ratings for TurboCombustor Technology, Inc. Withdrawals: Issuer: TurboCombustor Technology, Inc. Corporate Family Rating, Withdrawn, previously rated Caa1, Rating Under Review for Downgrade Probability of Default Rating, Withdrawn, previously rated Caa1-PD, Rating Under Review for Downgrade Senior Secured Bank Credit Facility, Withdrawn, previously rated Caa1 (LGD3), Rating Under Review for Downgrade Outlook Actions: Issuer: TurboCombustor Technology, Inc. Outlook, Changed to Rating Withdrawn from Rating Under Review RATINGS RATIONALE Moody's has withdrawn the ratings due to the rated debt obligations having been repaid in conjunction with a refinancing of the company's debt capital. Headquartered in Manchester, Connecticut, TurboCombustor Technology, Inc. is involved with the fabrication and assembly of gas turbine engine parts for use in commercial, military and industrial applications. The company is majority-owned by entities affiliated with The Carlyle Group. Revenues for the twelve months ended March 2020 were approximately $572 million. US CONCRETE: Moody's Rates New $300MM Unsec. Notes Due 2029 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to US Concrete, Inc.'s proposed $300 million senior unsecured notes due 2029. All other ratings for the company remain unchanged, including the B2 Corporate Family Rating, B2-PD Probability of Default Rating and B3 senior unsecured rating. The SGL-2 Speculative Grade Liquidity Rating is also unchanged. The outlook is stable. The proceeds from the new notes will be used to redeem $300.0 million of the company's $600.0 million aggregate principal amount of its 6.375% senior unsecured notes due 2024. The transaction will be leverage neutral while improving the company's debt maturity profile. Pro forma for the proposed offering, Moody's projects US Concrete's debt-to-EBITDA (inclusive of Moody's adjustments) will be 5.4x at year end 2020. "With the proposed $300 million offering US Concrete will enhance its financial flexibility by extending its debt maturity profile and lowering its interest expense," said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Assignments: Issuer: US Concrete, Inc. Senior Unsecured Notes, Assigned B3 (LGD5) LGD Adjustment: Senior Unsecured LGD changed to (LGD5) from (LGD4) RATINGS RATIONALE U.S. Concrete, Inc.'s B2 Corporate Family Rating reflects the company's strong market position as a leading regional producer of construction materials in the Northeast, Texas and Northern California, its vertically integrated asset base and attractive geographic footprint. In addition, Moody's credit rating is supported by the company's solid EBITDA margins and good liquidity profile. At the same time, the rating takes into consideration the company's vulnerability to cyclical end markets, the competitive nature of its ready-mix concrete business and significant revenue exposure to urban centers like New York City, San Francisco and San Jose which have been disproportionately impacted by the outbreak of the coronavirus. Governance characteristics considered for US Concrete is the company's willingness to take on additional leverage in order to fund growth through acquisitions. That said, Moody's does not expect the company to grow through major acquisitions over the next 12-18 months. The stable outlook reflects Moody's expectation that during this uncertain economic environment US Concrete will maintain stable profitability and generate cash that can be used to de-lever its balance sheet. US Concrete's SGL-2 Speculative-Grade Liquidity Rating reflects Moody's expectation of a good liquidity profile over the next 12-18 months. At June 30, 2020, the company's liquidity profile was supported by (i) $17.5 million of cash, (ii) $137 million of availability under the $300 million asset-based lending revolver (ABL), and (iii) $180 million of availability under a delayed term loan which permits borrowings until December 15, 2021. If borrowings take place, the outstanding amount will mature in May 2025 (subject to a springing maturity on March 1, 2024 to the extent any of the company's 6.375% senior unsecured notes due 2024 remain outstanding on such date). The ABL facility, which expires in August 2022 is governed by a springing fixed charge coverage ratio of 1.0x, which comes into effect if availability under the ABL is less than the greater of (i) $25 million or (ii) the lesser of 10% of a) the borrowing base or b) the total revolver availability. Moody's does not expect the company to trigger the springing financial covenant over the next 12 to 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if: -- Operating margin is above 10% for a sustained period of time -- Debt-to-EBITDA is below 3.5x for a sustained period of time -- EBIT-to-Interest expense is above 2.0x for a sustained period of time -- The company improves its liquidity profile The ratings could be downgraded if: -- Operating margin falls below 4.0% -- Debt-to-EBITDA is above 5.0x for a sustained period of time -- EBIT-to-Interest expense is below 1.5x for a sustained period of time -- The company's liquidity deteriorates The principal methodology used in this rating was Building Materials published in May 2019. Headquartered in Euless, Texas, US Concrete is a publicly traded company on the NASDAQ with the ticker symbol [USCR]. It operates within two primary segments: ready-mixed concrete and aggregate products. The company is one of the leading producers of ready-mixed concrete in north and west Texas, northern California, New Jersey, New York, Washington DC, Oklahoma and the US Virgin Islands. The company has 162 standard ready-mixed concrete plants, 17 volumetric ready-mixed concrete facilities, and 19 aggregates producing facilities. USF COLLECTIONS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: USF Collections, Inc. 1385 Broadway, Suite 1012A New York, NY 10018 Business Description: USF Collections Inc. is an importer and wholesaler of apparel and accessories. Chapter 11 Petition Date: September 8, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-12085 Debtor's Counsel: Gilbert A. Lazarus, Esq. LAW OFFICE OF GILBERT A. LAZARUS, PLLC 92-12 68th Ave. New York, NY 11375 Tel: (917) 417-3795 E-mail: Gillazarus@gmail.com Total Assets as of December 31, 2019: $1,289,276 Total Liabilities as of December 31, 2019: $2,396,650 The petition was signed by Ranjit Khanna, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: https://www.pacermonitor.com/view/WGD6KBQ/USF_Colleections_Inc__nysbke-20-12085__0001.0.pdf?mcid=tGE4TAMA VIA AIRLINES: Bought by Wexford Capital, Set for Relaunching ------------------------------------------------------------ Bulent Imat, writing for Airline Geeks, reports that Wexford Capital, a Florida-based investment firm, announced that it and some of the firm's partners received bankruptcy court approval to reorganize and acquire Via Airlines, a regional airline based in Maitland, Florida. The court's approval will allow Via to relaunch flight operations when approved by the U.S. Department of Transportation (DOT) and recertified by the Federal Aviation Administration (FAA). "We are excited to re-enter the regional airline space. Leveraging our decades of experience investing in the airline industry, we are excited about the opportunity to create the next best-in-class regional airline," said Arthur Amron, a partner of Wexford Capital, in a statement. The re-branded airline is planning to provide regional air services to strategic destinations that have been hit hard due to novel coronavirus pandemic. Wayne Heller, Republic Airways' former chief operating officer, will act as the chief executive officer of the airline. "We are evaluating initial launch markets and strategic partnerships, including, but not limited to, the Southeast, Midwest and Alaskan markets," Heller said. "Although the pandemic has decimated and challenged the airline industry today, we believe that a quality regional air services provider will continue to be highly desired and vital for the transportation of people and goods throughout the U.S for the foreseeable future, and we intend to be part of that solution." Via Airlines To Have An Experienced Executive Team Founded in 1997, Via was a regional airline providing scheduled air service in the U.S. Before starting scheduled passenger flights in December 2014, the airline was only offering charter flights. The regional airline employed approximately 150 people and operated a fleet of eight aircraft including 50-seat Embraer ERJ-145 jets, 30-seat Embraer ERJ-120s and a Cessna Citation XL. The airline was operating 19 routes from its two hubs, Orlando Sanford International Airport and Austin-Bergstrom International Airport. Via Airlines announced that it filed for Chapter 11 bankruptcy and ceased all operations on Oct. 8, 2019, due to pilot shortage and financial issues. Prior to bankruptcy, Atlanta-based Ashley Air, LLC agreed to acquire the airline, yet was unable to fulfill its financial commitments like injecting capital to the airline alleged the airline. According to the bankruptcy filing, Ashley Air also did not pay employees' wages and did not refund passengers for canceled flights. The airline was forced to scale back on flights from some of its routes and delay the launch of some routes due to a lack of qualified airline pilots, which particularly affected regional airlines. The airline's suspension of flight operations to and from Birmingham, Ala. was a good example of the pilot shortage problem. Although the airline previously announced that it had selected Birmingham as a focus city, it had to cease all flights to and from Birmingham. "Regrettably, upon considering the carrier’s on-going challenges in recruiting, training and retaining a suitable level of qualified crews, Via Airlines' Board of Directors has made the difficult decision to suspend all flights to/from Birmingham-Shuttlesworth International Airport effective immediately," said Don Bowman, vice president for Business Development and Distribution for Via Airlines in May 2019. Wexford Capital also founded and drove the transformation of Republic Airways into a regional airline with over 200+ modern regional jets and the new airline will be supported by a highly experienced management team. Via Airlines is returning to the scheduled commercial flights with a new name and a new executive team — and possibly without pilot shortage problem — in the midst of the novel coronavirus pandemic that forced airline companies to lay off pilots. About Via Airlines Via Airlines, Inc., is a domestic regional airline offering scheduled service across the United States. Via Airlines sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 19-06589) on Oct. 8, 2019. The Debtor was estimated to have $10 million to $50 million in assets and liabilities as of the bankruptcy filing. Judge Karen S. Jennemann oversees the case. Latham, Luna, Eden & Beaudine, LLP, is the Debtor's legal counsel. VISTA PROPPANTS: Seeks to Tap Jackson Walker as Litigation Counsel ------------------------------------------------------------------ Vista Proppants and Logistics, LLC and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Jackson Walker LLP as special litigation counsel. Jackson Walker was retained prior to the Petition Date to represent the Debtors in connection with certain litigation pending in the 335th Judicial District Court for Hood County, Texas, styled Lonestar Prospects, Ltd., v. Hood County Appraisal District, Case No. C-2018373 and continues to represent the Debtors' interests in the litigation. Jay K. Wieser, Esq., is the primary attorney working on this case. His standard hourly rate is $565.00. Jackson Walker was paid $117,205.34 for services rendered to the Debtors related to the litigation and $790,604.51 total in the one-year period prior to the Petition Date. Jay K. Wieser, a partner in the law firm of Jackson Walker LLP, disclosed in court filings that neither him, nor the firm, nor any partner or associate thereof, insofar as he has been able to ascertain, has any connection with the Debtors, their creditors, the United States Trustee, persons employed in the United States Trustee's Office, or any other parties-in-interest, or their respective attorneys. The firm can be reached through: Jay K. Wieser, Esq. JACKSON WALKER LLP 777 Main Street, Suite 2100 Fort Worth, TX 76102 Telephone: (817) 334-7249 E-mail: jwieser@jw.com About Vista Proppants and Logistics Vista Proppants and Logistics, LLC -- https://www.vprop.com/ -- is a pure-play, in-basin provider of frac sand solutions in producing regions in Texas and Oklahoma, including the Permian Basin, Eagle Ford Shale and SCOOP/STACK. It is headquartered in Fort Worth, Texas. Vista Proppants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-42002) on June 9, 2020. The petitions were signed by Gary Barton, chief restructuring officer. At the time of the filing, Vista Proppants had estimated assets of less than $50,000 and liabilities of between $100 million and $500 million. Judge Edward L. Morris oversees the cases. The Debtors tapped Haynes and Boone, LLP, as their legal counsel; Jackson Walker LLP as special litigation counsel; and Alvarez & Marsal North America, LLC, as chief restructuring officer. Kurtzman Carson Consultants, LLC, is the Debtors' claims, noticing, balloting and solicitation agent. WHITING PETROLEUM: Seeks Approval to Hire PwC as Advisor -------------------------------------------------------- Whiting Petroleum Corporation and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ PricewaterhouseCoopers LLP to provide accounting and valuation advisory services. The services are as follows: 1. Accounting Advisory Services: (i) Assist Debtors in identifying key milestones and milestone interdependencies. (ii) Read and provide commentary on Debtors' project plan, if requested and mutually agreed upon. (iii) Advise Debtors regarding potential accounts that may be impacted by the bankruptcy petition at each milestone, which may include educating Debtors on what the potential bankruptcy impacts may be on a given financial statement line item. (iv) Assist Debtors in determining whether fresh-start reporting applies within ASC 852. If applicable and mutually agreed upon, assist Debtors in selecting new accounting policies upon emergence, and draft accounting whitepapers for their consideration. (v) Assist Debtors in preparing accounting documentation for the individual transactions that make up the 4 column balance sheet required within ASC 852. (vi) Advise Debtors on how bankruptcy may change the nature of the inherent risk in a financial line item. (vii) Provide Debtors with any applicable training and examples in the public domain regarding the application of ASC 852. (viii) As to Internal Controls over Financial Reporting Services, participate in working sessions with Debtors to assist them with the design and implementation of certain internal controls that may be applicable to the adoption of ASC 852 and ongoing reporting and disclosure requirements. Based on decisions made by Debtors during the working sessions, PwC will develop a draft risk and controls matrix, subject to Debtors' approval and finalization. 2. Valuation Advisory Services. Valuation services pertaining to Debtors' estimate of the fair value of some of their assets and liabilities for accounting and financial reporting considerations relating to their Chapter 11 petitions as well as Debtors' estimate of the fair market value of certain legal entities for their legal restructuring for tax planning purposes in connection with Debtors' Chapter 11 proceedings. The hourly rates for the firm's services are as follows: Partner $895 Managing Director $895 Director $809 Senior Manager $719 Manager $629 Senior Associate $518 Experienced Associate $449 New Associate $359 Rajeeb Das, a partner at PwC, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Rajeeb Das PricewaterhouseCoopers LLP 76 Laura Street Jacksonville, FL 32202 Tel: +1 (904) 354 0671 About Whiting Petroleum Corp. Whiting Petroleum Corporation, a Delaware corporation 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. Visit http://www.whiting.comfor more information. 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, Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. Debtors have tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker LLP as their 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. The Office of the U.S. Trustee appointed a committee of unsecured creditors in Debtors' Chapter 11 cases. The committee has tapped Pachulski Stang Ziehl & Jones LLP as its bankruptcy counsel, Gray Reed & McGraw LLP as local counsel, and Conway MacKenzie, Inc. as financial advisor. WINDSTREAM HOLDINGS: Issues $1.4-Bil. Notes for Exit Financing -------------------------------------------------------------- According to a regulatory filing by Wundstream Holdings, Inc., on Aug. 25, 2020, Windstream Escrow LLC (the "Escrow Issuer") and Windstream Escrow Finance Corp. (the "Co-Issuer" and, together with the Escrow Issuer, the "Escrow Issuers"), each an indirect wholly-owned subsidiary of Windstream Holdings, Inc. (the "Company"), issued $1,400,000,000 aggregate principal amount of 7.750% Senior First Lien Notes due 2028 (the "Notes"). The offering of the Notes is part of a series of exit financing transactions being undertaken in connection with a restructuring of the Company and certain of its subsidiaries (collectively, the "Debtors"), to be effected through a plan of reorganization under Chapter 11 of title 11 of the United States Code in the U.S. Bankruptcy Court for the Southern District of New York substantially on the terms of the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization of Windstream Holdings, Inc. et al., Pursuant to Chapter 11 of the Bankruptcy Code, filed June 22, 2020 (as it may be amended, supplemented or modified, the "Plan") and approved by the Bankruptcy Court on June 26, 2020 (the "Chapter 11 Cases"). The gross proceeds from the offering of the Notes were deposited into a segregated escrow account (the "Escrow Account") and will be released upon satisfaction of certain escrow release conditions (the "Escrow Conditions" and the date of such release, the "Completion Date"), including the occurrence of the effective date of the Plan (the "Effective Date"). On the Completion Date, we will undertake a reorganization, as a result of which the issuer of the Notes (the "Permanent Issuer" and, together with the Co-Issuer, the "Permanent Issuers") will either be Windstream Services, LLC ("Old Services" and as it may be reorganized pursuant to the Plan, "Reorganized Windstream Services") or a newly formed limited liability company ("New Services"), which will assume the Notes and the obligations of the Escrow Issuer under the Notes and the Indenture. Windstream Escrow Finance Corp. will remain the co-issuer of the Notes and will be a wholly-owned subsidiary of the Permanent Issuer following the reorganization. The term "Issuers" refers to (a) prior to the Completion Date, the Escrow Issuers, and (b) from and after the Completion Date, the Permanent Issuers. The Notes were issued pursuant to an indenture, dated as of August 25, 2020 (the "Indenture"), among the Issuers and Wilmington Trust, National Association, as trustee and Notes collateral agent. Prior to the Completion Date, the Notes will not be guaranteed. On the Completion Date, the Notes will be guaranteed by each of the Permanent Issuer’s wholly-owned domestic subsidiaries (other than the Co-Issuer) that will guarantee the new term loan facility (the "New Exit Term Facility") and the new super-senior secured revolving credit facility (the "New Super-Senior Exit Revolving Facility" and, together with the New Exit Term Facility, the "New Exit Facilities") to be entered into on or about the Completion Date. Prior to the Completion Date, the Notes will be secured by a lien on amounts deposited into the Escrow Account. From and after the Completion Date, the Notes and related guarantees will be secured by liens, subject to permitted liens, on substantially all of the Permanent Issuers' assets and the assets of the guarantors in each case, that constitute personal property (the "Collateral"). Maturity and Interest Rate Payments The Notes will mature on Aug. 15, 2028. Interest on the Notes will be payable semi-annually, on February 15 and August 15 of each year, commencing on Feb. 15, 2021, to holders of record on the preceding February 1 and August 1, as the case may be. Ranking The Notes are and, from and after the Completion Date, the Notes and the guarantees will be, the senior secured obligations of the Issuers and the guarantors, respectively, and rank or will rank: (i) equal in right of payment with all of the Issuers' and the guarantors’ existing and future unsubordinated debt that does not have payment priority to the Notes, including indebtedness under the New Exit Term Facility; (ii) effectively equal to any existing and future indebtedness that is secured by equal priority liens on the Collateral and equal payment priority with the Notes pursuant to the first-lien intercreditor agreement (the "First Lien Intercreditor Agreement"), including indebtedness under the New Exit Term Facility (except to the extent of the value of the assets of the Company, as it may be reorganized pursuant to the Plan (“Reorganized Windstream”), which will secure the New Exit Term Facility, but not the Notes); (iii) effectively junior to all of the Issuers’ and the guarantors' existing and future indebtedness that is secured by equal priority liens on the Collateral and senior payment priority to the Notes pursuant to the First Lien Intercreditor Agreement, including indebtedness under the New Super-Senior Exit Revolving Facility, to the extent of such senior payment priority; (iv) effectively senior to the Issuers' and the guarantors’ existing and future unsecured indebtedness, to the extent of the value of the Collateral securing the Notes; (v) effectively junior to any existing and future indebtedness of the Issuers or the guarantors secured by liens on assets that are not part of the Collateral, to the extent of the value of such assets; (vi) senior in right of payment to any future subordinated indebtedness of the Issuers or the guarantors; and (vii) structurally subordinated to all existing and future indebtedness and other liabilities of any subsidiaries that do not guarantee the Notes, including trade payables (other than indebtedness and liabilities owed to the Issuers or the guarantors). Collateral Prior to the Completion Date, the Notes will be secured by a lien on amounts deposited in the Escrow Account. From and after the Completion Date, the Notes and the guarantees will be secured by first-priority liens, subject to permitted liens, on substantially all of the personal property assets of the Issuers and the guarantors, which personal property assets will also ratably secure the New Exit Facilities (except the assets of Reorganized Windstream), in each case whether now owned or hereafter acquired, except for certain stock of foreign subsidiaries and certain excluded assets. Excluded assets include, among other things: (i) motor vehicles and other assets subject to certificates of title and letter of credit rights, in each case to the extent a lien thereon cannot be perfected by the filing of a UCC financing statement; (ii) assets for which a pledge thereof or a security interest therein is prohibited by applicable law, rule or regulation, of any applicable jurisdiction; (iii) margin stock (within the meaning of Regulation U); (iv) any segregated funds held in escrow for the benefit of an unaffiliated third party (other than the Issuers or the guarantors); (v) any lease, license or other agreements, or any property subject to a purchase money security interest, capitalized lease obligation or similar arrangements, in each case to the extent permitted under the Indenture, to the extent that a pledge thereof or the grant of a security interest therein would violate or invalidate such lease, license or agreement, purchase money, capitalized lease or similar arrangement, or create a right of termination in favor of any other party thereto (other than the Issuers or the guarantors) after giving effect to the applicable anti-assignment clauses of the UCC and the applicable laws, other than the proceeds and receivables thereof the assignment of which is expressly deemed effective under applicable laws notwithstanding such prohibition; (vi) any intent-to-use trademark application in the United States prior to the filing of a "Statement of Use" or "Amendment to Allege Use" with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant, attachment or enforcement of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application; (vii) capital stock issued by, or assets of, unrestricted subsidiaries, immaterial subsidiaries or other special purpose entities; (viii) capital stock or other voting interests of any foreign subsidiary of the Company in excess of 65% of the issued and outstanding voting stock or other voting interests of such entity; (ix) any fee-owned real property and any leasehold interests in real property; and (x) other collateral exceptions and exclusions under applicable financing agreements. Covenants The Indenture contains covenants limiting the Issuers' and certain restricted subsidiaries’ ability to: (i) incur additional debt and issue preferred stock; (ii) incur or create liens; (iii) redeem and/or prepay certain debt; (iv) pay dividends on capital stock or repurchase stock; (v) make certain investments; (vi) engage in specified sales of assets; (vii) enter into transactions with affiliates; and (viii) engage in consolidation, mergers and acquisitions. These covenants contain important exceptions, limitations and qualifications. At any time that the Notes are rated investment grade, certain covenants will be suspended. Optional Redemption The Issuers may redeem some or all of the Notes at any time prior to August 15, 2023 at a price equal to 100% of the principal amount of the Notes redeemed plus a "make-whole" premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Issuers may redeem some or all of the Notes at any time on or after Aug. 15, 2023 at the redemption prices set forth in the Indenture. In addition, at any time prior to Aug. 15, 2023, up to 40% of the original aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings, at the redemption price specified in the Indenture. Change of Control Upon the occurrence of a change of control and a ratings downgrade to below investment grade, the Issuers must offer to purchase the Notes at 101% of their face amount, plus accrued and unpaid interest to, but not including, the purchase date. Events of Default The Indenture also provides for customary events of default which, if certain of them occurs: (i) would make all outstanding Notes due and payable immediately; or (ii) would allow the trustee or the holders of at least 30% in principal amount of the then outstanding Notes to declare the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable by notice in writing to the Issuers and, upon such declaration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. About Windstream Holdings Inc. Windstream Holdings, Inc., and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as its financial advisor, and Perella Weinberg Partners LP as investment banker. WRW INC: Bankruptcy Administrator Unable to Appoint Committee ------------------------------------------------------------- The U.S. Bankruptcy Administrator for the Eastern District of North Carolina on Sept. 8 disclosed in a filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of WRW Inc. About WRW Inc. WRW, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 20-02833) on Aug. 14, 2020. At the time of the filing, Debtor disclosed assets of between $500,001 and $1 million and liabilities of the same range. Judge Joseph N. Callaway oversees the case. C. Scott Kirk, Attorney at Law, PLLC and Greg W. Isley, CPA, PA serve as Debtor's legal counsel and accountant, respectively. [*] Van Horn Law Touts First Ch.11 Subchapter V Confirmation ------------------------------------------------------------ Chad Van Horn, writing for South Florida Reporter, reports that the first Chapter 11 Subchapter V Business Bankruptcy was confirmed in July 2020 (Case No. 20-12446-EPK), a case filed by Fort Lauderdale-based Van Horn Law Group. Subchapter V of the Small Business Reorganization Act (SBRA) streamlines the Bankruptcy Code's Chapter 11 process to give businesses more time to negotiate with creditors, reduce monthly payments and decrease the total amount owed to creditors. The SBRA was passed last summer and became effective on February 19, 2020. "In the summer of 2019, no one even conceived of a worldwide pandemic and its resultant effect on our economy," said Chad Van Horn, founding partner attorney of Van Horn Law Group. "Today, however, with raging illness and forced shutdowns, Subchapter V is a lifeline for small businesses grappling with significant revenue loss, disappearing customers, while finding ways to stay afloat. We are dedicated to assisting small business owners so they may survive one of the most difficult economic challenges in our country's history." Van Horn and his team are committed to helping small businesses and individuals make it through the pandemic by providing first-rate, affordable legal services with compassion, understanding and respect. Speedy utilization of this new Subchapter V tool illustrates the firm's expertise as well as its commitment to its clients. Van Horn Law Group, P.A., is the largest bankruptcy firm in Broward County, Florida, based on total cases filed, the fourth largest bankruptcy firm in Florida based on Chapter 7 cases filed and the 22nd largest bankruptcy firm in the United States based on Chapter 7 filings. The firm also was included on Inc. magazine's 2019 list of the top 5,000 fastest-growing, privately held companies in the United States. The firm's practice areas include personal and corporate bankruptcy, student loan consolidation and litigation, estate planning/asset protection, LGBT estate planning/asset protection, foreclosure defense, corporate representation, debt consolidation, civil litigation, debt relief, and consumer law. Van Horn, who graduated from Pittsburgh's Robert Morris University with a B.S. in Business Management, discovered his niche in bankruptcy while working as a clerk for a bankruptcy law firm during the day and pursuing a law degree at night. He received his Juris Doctor from Nova Southeastern University's Shepard Broad Law Center in 2009 and founded his bankruptcy firm shortly thereafter. Van Horn is the author of The Debt Life, an Amazon bestseller within 24 hours of going on sale, which illustrates effective solutions to help individuals and businesses find their way beyond "the debt life" and into financial solvency, and Everything You Need to Know About Bankruptcy in Florida, an overview of bankruptcy options for those in considerable debt. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Kuldeep Singh and Amandeep Kaur Bankr. N.D. Cal. Case No. 20-41448 Chapter 11 Petition filed September 2, 2020 represented by: Brent Meyer, Esq. In re Christopher Summers Bankr. C.D. Cal. Case No. 20-12488 Chapter 11 Petition filed September 2, 2020 In re Farm Measurement LLC Bankr. D. Del. Case No. 20-12064 Chapter 11 Petition filed September 2, 2020 See https://www.pacermonitor.com/view/ARJGHVQ/Farm_Measurement_LLC__debke-20-12064__0001.0.pdf?mcid=tGE4TAMA represented by: Tracy Pearson, Esq. DUNLAP BENNETT & LUDWIG PLLC E-mail: bankruptcy@dbllawyers.com In re Imagery Collection LLC Bankr. D. Del. Case No. 20-12063 Chapter 11 Petition filed September 2, 2020 See https://www.pacermonitor.com/view/IU3G4UA/Imagery_Collection_LLC__debke-20-12063__0001.0.pdf?mcid=tGE4TAMA represented by: Tracy Pearson, Esq. DUNLAP BENNETT & LUDWIG PLLC E-mail: bankruptcy@dbllawyers.com In re Gerald R. Hignite and Susan A. Hignite Bankr. W.D. Ky. Case No. 20-32245 Chapter 11 Petition filed September 2, 2020 represented by: Tyler Yeager, Esq. In re C&S Log Homes, Inc. Bankr. E.D.N.C. Case No. 20-03009 Chapter 11 Petition filed September 2, 2020 See https://www.pacermonitor.com/view/NUMOJMY/CS_Log_Homes_Inc__ncebke-20-03009__0001.0.pdf?mcid=tGE4TAMA represented by: Travis Sasser, Esq. SASSER LAW FIRM E-mail: travis@sasserbankruptcy.com In re AS Is Auto Mart of Arkansas LLC Bankr. W.D. Ark. Case No. 20-71932 Chapter 11 Petition filed September 3, 2020 See https://www.pacermonitor.com/view/K3BJ2BI/AS_Is_Auto_Mart_of_Arkansas_LLC__arwbke-20-71932__0001.0.pdf?mcid=tGE4TAMA represented by: Donald A. Brady, Jr., Esq. BRADY & CONNER, PLLC E-mail: don@fayettevillebankruptcy.com In re Sherry Virginia Seitzinger Bankr. N.D. Cal. Case No. 20-51314 Chapter 11 Petition filed September 3, 2020 In re Annie's Holdings LLC Bankr. M.D. Fla. Case No. 20-02628 Chapter 11 Petition filed September 3, 2020 See https://www.pacermonitor.com/view/SFDUGLQ/Annies_Holdings_LLC__flmbke-20-02628__0001.0.pdf?mcid=tGE4TAMA represented by: Richard A. Perry, Esq. RICHARD A. PERRY P.A. E-mail: richard@rapocala.com In re Hopster's LLC Bankr. D. Mass. Case No. 20-11823 Chapter 11 Petition filed September 3, 2020 See https://www.pacermonitor.com/view/YUMZKLQ/Hopsters_LLC__mabke-20-11823__0001.0.pdf?mcid=tGE4TAMA represented by: Alex R. Hess, Esq. ALEX R. HESS LAW GROUP E-mail: Ahess@arhlawgroup.com In re Marcus B. Daniels and Sandra W. Daniels Bankr. S.D. Miss. Case No. 20-02318 Chapter 11 Petition filed September 3, 2020 represented by: Craig Geno, Esq. In re Robert J. Ambruster, Inc. Bankr. E.D. Mo. Case No. 20-44289 Chapter 11 Petition filed September 3, 2020 See https://www.pacermonitor.com/view/4IL6HKQ/Robert_J_Ambruster_Inc__moebke-20-44289__0001.0.pdf?mcid=tGE4TAMA represented by: Angela Redden-Jansen, Esq. ANGELA REDDEN-JANSEN E-mail: amredden@swbell.neT In re Mooncherry Corporation Bankr. E.D. Tex. Case No. 20-41894 Chapter 11 Petition filed September 3, 2020 See https://www.pacermonitor.com/view/BLCT4NA/Mooncherry_Corporation__txebke-20-41894__0001.0.pdf?mcid=tGE4TAMA represented by: Joyce Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC E-mail: joyce@joycelindauer.com In re Scott Alan Siegfried Hintze and Amber Michelle Hintze Bankr. D. Ariz. Case No. 20-10125 Chapter 11 Petition filed September 4, 2020 represented by: Shawn Aubrey McCabe, Esq. WRIGHT LAW OFFICES PLC In re Nestor Geoffrey D. Quilates and Maria Ermelinda A. Quilates Bankr. E.D. Cal. Case No. 20-24259 Chapter 11 Petition filed September 4, 2020 represented by: Arasto Farsad, Esq. In re Jay Revapuri Inc. of Jax Bankr. M.D. Fla. Case No. 20-02645 Chapter 11 Petition filed September 4, 2020 See https://www.pacermonitor.com/view/EWGDBEI/JAY_REVAPURI_INC_OF_JAX__flmbke-20-02645__0001.0.pdf?mcid=tGE4TAMA represented by: Bryan K. Mickler, Esq. LAW OFFICES OF MICKLER & MICKLER, LLP E-mail: court@planlaw.com In re Randall C. Hall Bankr. N.D. Ill. Case No. 20-81572 Chapter 11 Petition filed September 4, 2020 represented by: Ariel Weissberg, Esq. In re Hubbards Cabins, LLC Bankr. E.D. Ky. Case No. 20-60999 Chapter 11 Petition filed September 4, 2020 See https://www.pacermonitor.com/view/KNRUIRI/Hubbards_Cabins_LLC__kyebke-20-60999__0001.0.pdf?mcid=tGE4TAMA represented by: Dean A. Langdon, Esq. DELCOTTO LAW GROUP PLLC E-mail: dlangdon@dlgfirm.com In re M&T Properties, LLC Bankr. D. Md. Case No. 20-18189 Chapter 11 Petition filed September 4, 2020 See https://www.pacermonitor.com/view/2ANTXKY/MT_Properties_LLC__mdbke-20-18189__0001.0.pdf?mcid=tGE4TAMA represented by: Daniel A. Staeven, Esq. FROST & ASSOCIATES, LLC E-mail: daniel.staeven@frosttaxlaw.com In re SMP Development, Ltd. Bankr. W.D. Pa. Case No. 20-22595 Chapter 11 Petition filed September 4, 2020 See https://www.pacermonitor.com/view/7R6GREQ/SMP_Development_Ltd__pawbke-20-22595__0001.0.pdf?mcid=tGE4TAMA represented by: Jeffrey T. Morris, Esq. ELLIOTT & DAVIS PC E-mail: morris@elliott-davis.com In re Deerlick Trucking & Sales LLC Bankr. W.D. Pa. Case No. 20-10596 Chapter 11 Petition filed September 4, 2020 See https://www.pacermonitor.com/view/2YNZNYI/Deerlick_Trucking__Sales_LLC__pawbke-20-10596__0001.0.pdf?mcid=tGE4TAMA represented by: Michael S. JanJanin, Esq. QUINN, BUSECK, LEEMHUIS, TOOHEY, & KROTO, INC. E-mail: mjanjanin@quinnfirm.com In re Connecting Cultures, Inc. Bankr. E.D. Wisc. Case No. 20-26091 Chapter 11 Petition filed September 4, 2020 See https://www.pacermonitor.com/view/LTFQ64Q/Connecting_Cultures_Inc__wiebke-20-26091__0001.0.pdf?mcid=tGE4TAMA represented by: Paul G. Swanson, Esq. STEINHILBER SWANSON LLP E-mail: pswanson@steinhilberswanson.com In re Rothe H2O LLC Bankr. D. Colo. Case No. 20-15980 Chapter 11 Petition filed September 8, 2020 See https://www.pacermonitor.com/view/SUCG57Y/Rothe_H2O_LLC__cobke-20-15980__0001.0.pdf?mcid=tGE4TAMA represented by: John Scanlan, Esq. CIRCLE LAW - THE SCANLAN LAW OFFICES E-mail: jvscanlan@circlelaw.net In re Shaan Saar LLC Bankr. M.D. Fla. Case No. 20-05039 Chapter 11 Petition filed September 8, 2020 See https://www.pacermonitor.com/view/MANFYZI/Shaan_Saar_LLC__flmbke-20-05039__0001.0.pdf?mcid=tGE4TAMA represented by: Melissa Youngman, Esq. MELISSA YOUNGMAN, PA E-mail: my@melissayoungman.com In re Potrero Investments LLC Bankr. S.D. Fla. Case No. 20-19744 Chapter 11 Petition filed September 8, 2020 See https://www.pacermonitor.com/view/UJLP67I/Potrero_Investments_LLC__flsbke-20-19744__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Jeffrey Allen Katseanes Bankr. D. Idaho Case No. 20-40701 Chapter 11 Petition filed September 8, 2020 represented by: Aaron J. Tolson, Esq. In re Claudia Josefina Newton Frausto and Eduardo Teodulo Torres Bankr. D. Neb. Case No. 20-81097 Chapter 11 Petition filed September 8, 2020 In re Linda W. Womac Bankr. E.D. Tenn. Case No. 20-32093 Chapter 11 Petition filed September 8, 2020 represented by: James Moore, Esq. In re Vladislav Kreinis Bankr. E.D. Va. Case No. 20-72503 Chapter 11 Petition filed September 8, 2020 represented by: Joseph Liberatore, Esq. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***