/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200917.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 17, 2020, Vol. 24, No. 260 Headlines 1400 NORTHSIDE: Seeks to Hire 515 Life Real Estate as Broker 24 HOUR FITNESS: Gets Court OK to Access Final $200M Ch. 11 Loan ACGSA TRANSIT: Plan to be Funded by Lump Sum & Principals' Income ADINO ALTAMONTE: Unsecured Creditors to Recover 100% Over 5 Years AETHON UNITED: Fitch to Assign 'B-(EXP)' IDR, Outlook Stable AETHON UNITED: Moody's Rates Proposed $700MM Unsec. Notes 'B3' AETHON UNITED: S&P Assigns 'B-' ICR; Unsecured Notes Rated 'B' AKORN INC: Funds May File Objection to All Assets Sale Under Seal ALLEGRO MICROSYSTEMS: Moody's Assigns B1 CFR, Outlook Stable ALLEGRO MICROSYSTEMS: S&P Assigns B+ ICR on Proposed Debt Issuance ALLIANCE RESOURCE: S&P Downgrades Issuer Credit Rating to 'B+' AMERICAN BLUE RIBBON: Emerging From Bankrutpcy APC AUTOMOTIVE: S&P Discontinues 'D' ICR on Chapter 11 Filing ARCHDIOCESE OF NEW ORLEANS: Victims' Suit Stays in District Court ARCHROCK INC: S&P Assigns B+ Issuer Credit Rating; Outlook Stable ASCENA RETAIL: Unsecured Creditors Have 2 Options in Joint Plan ASCENT RESOURCES: S&P Puts CCC+ Notes Rating on Watch Positive ATOM INSTRUMENT: PAC Did Not Use Trade Secrets, 5th Cir. Affirms AVEANNA HEALTHCARE: S&P Rates $185MM First-Lien Term Loan 'CCC+' BADGER FINANCE: S&P Upgrades ICR to 'B-' on Improved Liquidity BEAR GRASS: Unsecured Creditors to Have 1% Recovery in Plan BLUE CAY: Angel Sky Buying West Palm Beach Property for $600K BODY TRANSIT: Court Allows First Bank's $80,000 Secured Claim BOY SCOUTS: Suit vs Hartford Remanded to Dallas State Court BRIDGEWATER HOSPITALITY: Adcon Buying Houston Property for $4.25M CALCEUS ACQUISITION: S&P Affirms B ICR; Ratings Off Watch Negative CARE FOR LIFE: Unsecureds to Recover 1% in Over 50 Months in Plan CHENIERE ENERGY: S&P Rates $1BB Senior Notes 'BB' CHISHOLM OIL: Sept. 23 Plan Confirmation Hearing Set CHRISTOPHER S. HARRISON: Court Says Chapter 11 Trustee Warranted CLEARPOINT NEURO: D'Alessandro Will Succeed Hurwitz as CFO CLEARPOINT NEURO: Incurs $1.66 Million Net Loss in Second Quarter COMSTOCK MINING: Elects New Director; Sets Annual Meeting Date CONSOLIDATED COMMUNICATIONS: S&P Alters Outlook to Stable COUNTERPATH CORP: Appoints Interim Principal Financial Officer CREDIT ACCEPTANCE: Moody's Affirms Ba3 CFR, Outlook Remains Stable DAVE & BUSTER'S: At Risk of Going Bankrupt DENBURY RESOURCES: Nears Emergence, "DEN" Stock to Trade at NYSE EAS GRACELAND: Case Summary & 20 Largest Unsecured Creditors EASTERN NIAGARA: Pendyala Buying Lockport Property for $115K ED MORSE CADILLAC: Involuntary Chapter 11 Case Summary ENLINK MIDSTREAM: S&P Affirms 'BB+' ICR; Outlook Stable ENRAMADA PROPERTIES: Novoa Unsecureds to Recover 5% to 98% in Plan ERICKSON INC: Dismissal of Trustee Claims vs Morgan et al. Upheld ESSEX REAL: Selling Approx. 84-Acre Henderson Property for $48.4M EVIO INC: Partners with Steep to Operate a Medical Cannabis Lab FRONTIER COMMUNICATIONS: 2nd Lien Trustee Says Plan Unconfirmable FRONTIER COMMUNICATIONS: First Lien Committee Objects to Joint Plan FRONTIER COMMUNICATIONS: Lead Plaintiffs Object to Joint Plan FRONTIER COMMUNICATIONS: U.S. Bank National Objects to Plan GARTNER INC: S&P Rates New $800MM Senior Unsecured Notes 'BB' GCI LLC: S&P Puts 'B-' Issuer Credit Rating on CreditWatch Positive GENESIS PLACE: Case Summary & 10 Unsecured Creditors GEORGIA DEER: Cain Buying 2014 Dodge 5500 Rollback for $36K GEORGIA DEER: Caldwell Buying International Spreader 8100 for $14K GLOBAL MEDICAL: S&P Rates New Senior Secured Term Loan 'B' GRAND CANYON RANCH: Approval of Counsel's Contingency Fee Upheld HENLEY PROPERTIES: Wolfe Buying Pineville Property for $23K HERTZ CORP: Ex-CEO Agrees to Return $2M to Settle SEC Suit HERTZ GLOBAL: Faces Objections to Its Employee Incentive Schemes HOLOGIC INC: S&P Rates New $950MM Senior Unsecured Notes 'BB-' HORSEHEAD HOLDING: May Pursue Claims Against TOPCOR, Court Says IDATA MEDICAL: Unsecured Creditors to Receive $36,000 Over 2 Years IL MULINO: Seven Branches File for Chapter 11 Bankruptcy ILLINOIS HOUSING: S&P Cuts Rating on 2005 Housing Bond to 'BB+' IMPERIAL ROI: Recon Public Sale of Dallas Property Approved INNOVATION PHARMACEUTICALS: Incurs $6.65M Net Loss in Fiscal 2020 INNOVATIVE DESIGN: Delays Filing of July 31 Quarterly Report INTERIM HEALTHCARE: U.S. Trustee Objects to Plan & Disclosures JENAMAC LLC: Seeks to Tap Valbridge Property Advisors as Appraiser KARL E. LUGUS: Unsecureds to Get $1K Per Month Until Paid in Full KASPIEN HOLDINGS: Incurs $899K Net Loss in Second Quarter KBR INC: S&P Alters Outlook to Positive, Affirms 'BB-' ICR KBR RATINGS: Moody's Alters Outlook on Ba3 CFR to Positive KETTNER INVESTMENTS: Case Summary & 16 Unsecured Creditors LA TERRAZA: Seeks Approval to Hire Knight Law Group as Counsel LATAM AIRLINES: Objects Consumer Group's Motion to Lift Ch.11 Stay LINKMEYER PROPERTIES: Affiliate Hires Hester Baker as Legal Counsel LITTLE JOHN'S ANTIQUE: Has Until Nov. 27 to File Plan & Disclosures LIVE PRIMARY: Allowed to Use Cash Collateral on Final Basis M.C. TOWING & RECOVERY: Files Emergency Bid to Use Cash Collateral MARBLE RIDGE: Left Debt With Puerto Rico Bondholders Amid Closure MENDENHALL AUTO: To Pay Creditors in Full From Property Refinancing MERCHANT LLC: Unsecured Creditors to Receive Full Payment in Plan METAL PARTNERS: Affiliate Taps Cushman & Wakefield as Broker METRO CHRISTIAN: Unsecureds to Receive $2.4K Per Year Over 5 Years MILLERSVILLE UNIVERSITY: S&P Lowers Revenue Bond Rating to 'BB+' MONTREAL MAINE: Canadian Pacific Bid for Sanctions vs WFSC Junked MOOD MEDIA: Joint Prepackaged Plan Confirmed by Judge MURRAY ENERGY: Plan Declared Effective; Sale to ACNR Completed MUSEUM OF AMERICAN JEWISH: Unsec. Creditors to Recover 1% in Plan NEW WAY TRANSPORT: Plan of Reorganization Confirmed by Judge NEWS-GAZETTE: Sept. 30 Plan Confirmation Hearing Set NEXSTAR BROADCASTING: Moody's Rates $30MM Sec. Revolver Loan 'B3' NEXSTAR BROADCASTING: S&P Rates New $1BB Senior Unsecured Notes 'B' NEXTERA ENERGY: Fitch Affirms BB+ LT IDR, Outlook Stable NNN 400 CAPITOL: Loses Second Amended Suit vs Wells Fargo et al. NORTH CAROLINA TOBACCO: Not Liable for LLC Members' Taxes NORTHERN DYNASTY: Calls J Capital Report 'Fatuous, Flimsy' NPHSS LLC: Disclosure Statement Hearing Continued to Oct. 1 OCEAN POWER: Incurs $3.38 Million Net Loss in First Quarter OMNIMAX INTL: Moody's Appends LD to 'Ca-PD' PDR on Missed Payment OPPENHEIMER HOLDINGS: S&P Rates $125MM Senior Secured Notes 'B+' PAPER STORE: Williams' Suit Stayed Pending Bankruptcy Proceedings PARK HOTELS: S&P Rates New $650MM Senior Secured Notes 'BB-' PENN NATIONAL: S&P Affirms 'B' ICR; Ratings Off Watch Negative PERMIAN HOLDCO 1: Cedar Bend Buying Odessa Property for $440K PERMIAN HOLDCO 1: Selling Permian Tank's El Reno Property for $510K PHX INVESTMENT: Must Pay Amos $883,000 for Fees and Damages PIER 1 IMPORTS: Court Approves Liquidation Plan PILOCH DISTRIBUTION: AGL et al.'s Funds in Chase and BA Suspended PM GENERAL PURCHASER: S&P Assigns 'B+' ICR; Outlook Stable PROFESSIONAL FINANCIAL: Hires Donlin Recano as Claims Agent PURDUE PHARMA: Order Enjoining Entities to File Suits Upheld QORVO INC: Moody's Rates New Sr. Unsecured Notes Due 2031 'Ba1' QORVO INC: S&P Rates New $700MM Senior Unsecured Notes 'BB+' QUALITY REIMBURSEMENT: Gancman & Eastpoint Object to Disclosure QUEST GROUP: Unsecured Creditors to Recover 5% Over 3 Years in Plan RACKSPACE TECHNOLOGY: S&P Alters Outlook to Positive, Affirms B ICR RAINBOW LAND: Gets Court Approval to Hire Feasibility Expert RAINBOW LAND: Gets Court Approval to Hire Interest Rate Expert REDEEMED CHRISTIAN: Cornerstone Buying Tampa Property for $350K REYNOLDS GROUP: S&P Affirms 'B+' ICR, Revises Outlook to Stable RGN-ATLANTA: Voluntary Chapter 11 Case Summary RGN-BRAINTREE: Voluntary Chapter 11 Case Summary RGN-MILWAUKEE: Voluntary Chapter 11 Case Summary RGV SMILES: Seeks to Hire Burton McCumber as Accountant RGV SMILES: Seeks to Hire Riggs & Ray as Special Counsel RIVER BEND: Has Until April 27, 2021 to File Plan & Disclosures ROBERT J. MOCKOVIAK: Defense Counsel Can Stop Representing CPI ROBERT RICHARD GUNVILLE, JR: Selling Buckhead Property for $326K RODOLFO CARRERO: Not Barred from Refiling Ch. 11 Bankr. Petition SCOSA PROPERTIES: Claimants to Be Paid in Full in Plan SEADRILL LTD: Reaches Forbearance Until Sept. 29 for Missed Payment SERENTE SPA: Plan of Reorganization Confirmed by Judge SEVEN STARS: Bankruptcy Court Dismisses Subchapter V Case SHEA HOMES: S&P Rates New $300MM Senior Unsecured Notes 'BB-' SHEARER'S FOODS: Moody's Cuts 1st Lien Term Loan to B2 on Upsizing SKY-SKAN: Seeks Continued Use of Cash Collateral Thru January 2021 SPECIALTY BUILDING: Moody's Rates $575MM Secured Notes 'B3' SPECIALTY BUILDING: S&P Alters Outlook to Positive, Affirms B- ICR SPEEDCAST INT'L: Black Diamond, Centerbridge Head to Mediation SPHIER EMERGENCY: Case Summary Unsecured Creditor SPORTCO HOLDINGS: Wellspring Sues Insurers for Claims of Tanking STANLEY C. CHESTNUT: N Projects Buying Goldsboro Property for $125K TOMMIE BROADWATER, JR: $412K Sale of DC Property to Green Approved TOWN SPORTS: Files for Chapter 11; Has 2 Loan Offers TOWN SPORTS: S&P Cuts Term Loan Rating to 'D' on Bankruptcy Filing TOWNHOUSE HOTEL: Case Summary & 20 Largest Unsecured Creditors TRANSOCEAN LTD: S&P Affirms 'SD' Issuer Credit Rating TTBGM INC: Unsecured Creditors to Recover 100% Over 5 Years UBER TECHNOLOGIES: S&P Rates New Unsecured Notes 'CCC+' ULTRA PETROLEUM: Ch. 11 Plan Undervalues Company, Say Creditors ULTRA PETROLEUM: Equity Group Questions Plan Releases USF COLLECTIONS: Sept. 17 Hearing on Postpetition Accounts Sale V.S. INVESTMENT: McBride Buying Seattle Property for $750K VERITY HEALTH: Prospect Lacks Standing to Oppose Sale, Court Says WALDEN PALMS: Selling 4 Orlando Condo Units for $154K WHITING PETROLEUM: Has Cut Jobs by 16%, Reduces Executives' Pay [*] 500 U.S. Companies Have Filed for Bankruptcy Due to COVID-19 [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 1400 NORTHSIDE: Seeks to Hire 515 Life Real Estate as Broker ------------------------------------------------------------ 1400 Northside Drive, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ 515 Life Real Estate Company, LLC as broker. Debtors need the assistance of the firm in connection with the marketing and sale of their property located at 8570 Henderson Mountain Road, Fairmount, Ga., for a list price of $795,000. 515 Life Real Estate will be paid a 6 percent commission on the sales price. If there is a cooperating broker, that cooperating broker will receive a 3 percent commission. Barry Hardison, the owner and broker at 515 Life Real Estate, 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: Barry Hardison 515 Life Real Estate Company, LLC 1651 Lumber Company Road Talking Rock, GA 30175-4187 Telephone: (706) 301-5600 Facsimile: (706) 692-0060 Email: barryhardison@windstream.net 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), Debtor's chief executive officer and chief financial officer. Judge James R. Sacca oversees the case. At the time of the filing, Debtor estimated $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Paul Reece Marr, P.C. and Allison MacKenzie, Ltd. serve as Debtor's bankruptcy counsel and special litigation counsel, respectively. Debtor filed its Chapter 11 plan of reorganization and disclosure statement on July 23, 2020. 24 HOUR FITNESS: Gets Court OK to Access Final $200M Ch. 11 Loan ---------------------------------------------------------------- Law360 reports that the partly shuttered and bankrupt gym chain 24 Hour Fitness got a Delaware judge's nod to tap into the final $200 million of its Chapter 11 financing loan on July 31, 2020, in part after proposing a trio of compromise options for dozens of restive landlords left unpaid since the case began in June 2020. U.S. Bankruptcy Judge Karen B. Owens approved the final installment of the company's overall $250 million debtor-in-possession loan, after saying the court had been comforted by concessions made to landlords and assurances that the case would remain solvent until its proposed year-end confirmation exit. About 24 Hour Fitness 24 Hour Fitness Worldwide, Inc., owns and operates fitness centers in the United States. As of March 31, 2017, the company operated 426 clubs serving approximately 3.6 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. For the 12 months ended March 31, 2017, the company generated total revenue of about $1.4 billion. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 24 Hour Fitness Worldwide and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11558) on June 15, 2020. 24 Hour Fitness was estimated to have $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. The Hon. Karen B. Owens is the case judge. The Debtors tapped Weil, Gotshal & Manges, LLP as lead bankruptcy counsel; Pachulski Stang Ziehl & Jones, LLP as local counsel; FTI Consulting, Inc. as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk, LLC as claims agent. ACGSA TRANSIT: Plan to be Funded by Lump Sum & Principals' Income ----------------------------------------------------------------- ACGSA Transit, Inc. filed with the U.S. Bankruptcy Court for the Eastern District of New York a Disclosure Statement describing its Plan of Reorganization dated July 31, 2020. Class I (Secured Claim) will consist of the original secured claim of the creditor, Pentagon Federal Credit Union successor in interest by merger to Progressive CU, in the amount of $340,000. The claim will be satisfied by the surrender of two NYC Taxi Medallions # 3K70; 3K73. Class II (Unsecured Claims) will consist of the unsecured claim of Pentagon Federal Credit Union successor in interest by merger to Progressive CU in the total amount of $730,918. The deficiency claim will be paid as follows: a lump sum payment of $220,000 will be paid to PFCU on the Effective Date of the Plan. The remaining $50,000 will be paid in 48 monthly payments of $1,042. The Plan will be funded as follows, the contemplated lump sum payment and 48 monthly installment payments will be made from the personal stock portfolio and steady monthly income of the two corporate principals, Alan T. Sapoznik and Clara Sapoznik. As provided in the Plan, all payments, distributions, and transfers of cash or property, under the Plan are in full and final satisfaction, and release of all claims whatsoever existing as of the Confirmation Date against the Debtor, the Estate and the Reorganized Debtor, of any kind or nature whatsoever. These releases shall be effective upon substantial consummation of the Plan. A full-text copy of the Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y6nnk29t from PacerMonitor at no charge. The Debtor is represented by: ALLA KACHAN, ESQ. 3099 Coney Island Ave, 3rd Floor Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-315 E-mail: alla@kachanlaw.com About ACGSA Transit ACGSA Transit, Inc., a privately held company in the taxi and limousine service industry, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-44902) on Aug. 13, 2019. At the time of the filing, the Debtor disclosed $400,100 in assets and $1,070,000 in liabilities. The case is assigned to Judge Carla E. Craig. ADINO ALTAMONTE: Unsecured Creditors to Recover 100% Over 5 Years ----------------------------------------------------------------- Adino Altamonte Springs, LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, a Plan of Reorganization and a Disclosure Statement on July 31, 2020. The overall purpose of the Plan is to provide for the restructuring of the Debtor’s liabilities in a manner designed to maximize recoveries to all stakeholders. The Debtor believes that the Plan provides the best means currently available for its emergence from Chapter 11 and the best recoveries possible for holders of claims and interests against the Debtor, and thus strongly recommends that you vote to accept the Plan. The Debtor shall continue to operate their businesses in the ordinary course; make payments to secured and unsecured creditors as set forth in detail in the Plan; and assume some of the Debtor's executory contracts on the Effective Date. The Allowed Secured Claims will be paid and treated as set forth below and under the Plan. Allowed Priority Claims and Allowed Administrative Claims shall be paid in full over time, and Allowed Unsecured Claims shall receive their interest in payments over time. Class 4 consists of all Allowed Unsecured Claims against Adino other than the Truist loan. Class 4 is impaired. The Debtor will pay each Class 4 unsecured creditor 100% of their Unsecured Claim in equal monthly installments, with no interest and over a period of 60 months, with payments commencing 30 days after the Effective Date. Payments will continue until the Unsecured Claims are paid in full. Class 5 equitable interests in the Debtor are unimpaired. The Debtor intends to fund the Plan from cash generated by operating its business and will cure the AGRE Lease with the Subordinated Corporate Financing, as defined and set forth in the Plan. All cash in excess of operating expenses generated from operations of the Debtor's business until the Effective Date will be used for Plan Payments. A full-text copy of the Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y3mtof2h from PacerMonitor.com at no charge. The Debtor is represented by: PAUL N. MASCIA, ESQ. NARDELLA & NARDELLA, PLLC 135 W. CENTRAL BLVD., SUITE 300 ORLANDO, FL 32801 About Adino Altamonte Springs Adino Altamonte Springs, LLC, a Florida limited liability company, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-03773) on July 2, 2020. The petition was signed by Daryl M. Baer, Debtor's chief operating officer. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. The Debtor has tapped Nardella & Nardella, PLLC as its bankruptcy counsel. AETHON UNITED: Fitch to Assign 'B-(EXP)' IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings expects to assign a Long-Term Issuer Default Rating (IDR) of 'B-(EXP)' with a Stable Outlook to Aethon United BR LP at transaction close. In addition, Fitch expects to rate the senior unsecured notes 'B-(EXP)'/'RR4'. Aethon's expected ratings reflect their core position in the mature price-advantaged Haynesville Basin, competitive cost structure with margin supported by midstream and services integration, pro forma Fitch-calculated financial leverage of approximately 2.7x at YE 2020, reduced price risk through peer-leading six-year rolling hedge coverage which supports their production growth plans, expected production and capital efficiency improvement related to lower service costs, production from the previously drilled and uncompleted megalodon pad, and improvements in well design, as well as non-operating interest participation. Offsetting factors include forecast negative FCF through 2021, execution risk of the expected production and capital efficiencies needed to grow production to meet firm transportation commitments, and improving liquidity and refinancing prospects. The expected ratings are predicated upon the completion of the proposed refinancing of the second-lien notes and a portion of the reserve-based lending (RBL) borrowings. Failure to execute the proposed unsecured bond issuance and RBL extension would result in the withdrawal of the expected ratings. KEY RATING DRIVERS Proposed Transaction Addresses Maturity Wall: At 2Q20, Aethon's debt consists of a $520 million draw under their RBL, with a borrowing base of $719 million maturing in July 2021, and $550 million of second-lien notes due September 2023. The company is looking to refinance their second lien, and term out part of the RBL borrowing with a new senior unsecured note issuance. In connection with the new issuance, Aethon intends to extend their RBL facility to 2023 and upsize to a borrowing base of approximately $775 million. Negative FCF Expected Through 2021: Aethon has pursued a growth strategy, outspending CFO to grow net production from 324MMcfe/d in 2018 to 645MMcfe/d expected in 2020 (91% growth). Fitch expects the following factors will support Aethon's cash netbacks and continued production growth, albeit with negative FCF through 2021: a substantial hedge book; competitive cost structure; and capital efficiencies relating to non-operating participation, working interest mix, and well design. Fitch believes that the prioritization of production growth over FCF encouraged by Aethon's firm transportation commitments reduces financial flexibility, as cash flow outspend is expected to remain a drag on liquidity in the near term. Robust Hedge Book Reduces Price Risk: Aethon's programmatic, rolling six-year hedge program helps to mitigate price and cash flow risk, supporting the development budget linked to filling their near-term firm transportation commitments. The company targets hedging a majority of two-year forward development production, and continually layers hedges to cover the resulting proved developed producing production for up to six years. Fitch estimates actual coverage in line with these targets, with substantially all-natural gas production hedged at $2.68/MMbtu and $2.45/MMbtu in 2020 and 2021, respectively. Coverage declines thereafter with 152Bcf of 2022 hedges at $2.50/MMbtu, and 124Bcf of 2023 hedges at $2.65/MMbtu. Fitch expects Aethon's hedge book to help de-risk cash flow variability, fund the development program and stabilize the RBL borrowing base. Low-Cost Gas Production Profile: Aethon's largely contiguous core position in the highly productive Haynesville basin supports their competitive cash netbacks. The mature, well-delineated, Haynesville offers repeatable well results with relatively low execution risk. Proximity to Henry Hub and the Gulf of Mexico along established infrastructure help limit Aethon's basis risk. While unhedged netbacks were challenged during the first half of 2020, Aethon enjoys competitive unhedged cash netbacks of approximately $0.30/Mcfe (1Q20), compared with offset operator Comstock Resources Inc. ($0.43/Mcfe, 2Q20), much larger Appalachian operators CNX Resources Corporation ($0.29/Mcfe, 2Q20) and Southwestern Energy Company ($0.33/Mcfe, 2Q20), as calculated by Fitch. Midstream Integration and Commitments: Aethon's vertical integration into midstream assets includes more than 1,110 miles of pipe and more than 80,000HP of owned compression. Fitch believes this integration helps support margins by reducing operating expenses and providing $0.34/Mcfe uplift to net revenue interest volumes, as reported by the company in its 1H20 operating results. Fitch expects the midstream and marketing segment to grow in line with Aethon's upstream development program, contributing approximately $100 million EBITDA in 2020. While guaranteeing access to egress from the basin, Fitch expects Aethon's firm transportation commitments to reduce generation and transmission flexibility and motivate the company's near-term production growth, despite expected negative FCF. DERIVATION SUMMARY Aethon's expected ratings of 'B-'/Stable (EXP) with 475Mcfe/d at YE 2019, reflect its small size relative to peers Comstock (CRK; B/Positive; 846Mcfe/d at YE 2019) and Ascent Resources Utica Holdings, LLC (B/Stable (EXP); 2,087Mcfe/d at 2Q20). Aethon's core position in the Haynesville and robust hedge book result in competitive netbacks, on a hedged and unhedged basis, compared with larger Appalachian peers and other Haynesville players. Margins are further supported by the company's integration into midstream and services segments. Fitch expects FCF generation to be impaired as the company continues to prioritize production growth to meet near-term midstream obligations, resulting in negative FCF expectations through 2021. Pro forma the proposed transaction, Fitch expects Aethon's Fitch-calculated leverage of 2.7x at YE 2020 is expected to compare favorably with higher rated peers Southwestern (BB/Negative; 3.0x at pro forma 1Q20), CRK (B/Positive; 3.8x at 1Q20) and EQT Corporation (BB/Positive; 3.2x at 1Q20). KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - West Texas Intermediate prices of $38/barrel (bbl), $42/bbl, $47/bbl and $50/bbl in 2020, 2021, 2022 and 2023, respectively; - Henry Hub prices of $2.10/Mcf, $2.45/Mcf, $2.45/Mcf and $2.45/Mcf in 2020, 2021, 2022 and 2023, respectively; - Completion of $700 million senior unsecured bond offering and RBL extension; - Improving capital efficiencies relating to non-operated participation, well design and lower cost environment; - Production growth, supported by robust hedge book, to fulfill midstream firm transportation commitments; - Midstream segment growth in line with upstream growth; - Near-term negative FCF funded with revolver borrowings, with subsequent positive FCF allocated to reduce RBL balance. KEY RECOVERY RATING ASSUMPTIONS -- The recovery analysis assumes that Aethon would be reorganized as a going-concern in bankruptcy rather than liquidated. -- Fitch assumed a 10% administrative claim. Going-Concern (GC) Approach -- The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which the enterprise valuation (EV) is based, which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. -- An EV multiple of 3.75x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The multiple considered the following factors: -- The historical bankruptcy case study exits multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x; -- This multiple is consistent with the Fitch recovery multiple of Haynesville peer CRK (3.75x). Liquidation Approach -- The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. -- Fitch considers valuations such as SEC PV-10 and M&A transactions for each basin including multiples for production per flowing bbl, proved reserves valuation, value per acre and value per drilling location. -- The senior secured revolver is expected to be 80% drawn given the likelihood of negative redetermination in a sustained low-price environment. -- The revolver is senior to the senior unsecured bonds in the waterfall. The allocation of value in the liability waterfall results in a recovery rating (RR) corresponding to 'RR4' for the senior unsecured notes ($700 million pro forma for the notes offering). RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: -- Realization of production and capital efficiencies resulting in successful shift to material positive FCF generation ahead of expectations, that further improves future liquidity and refinance prospects; -- Demonstrated commitment to stated financial policy, including hedging program resulting in maintenance of midcycle debt/EBITDA below 3.0x (adjusted FFO leverage below 3.0x). Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: -- Terms of final transaction worse than assumed; -- Failure to realize expected production and capital efficiency gains resulting in lower than expected unit economics and/or positive FCF; -- Expectations for RBL borrowings to exceed $400 million by the end of 2021 that heightens refinancing risk; -- Debt/EBITDA (adjusted FFO leverage) durably above 4.0x. LIQUIDITY AND DEBT STRUCTURE Pro forma the transaction, Fitch assumes, Aethon's debt will consist of a $775 million first-lien RBL due 2023, and approximately $700 million of senior unsecured notes with tenor of five years. With approximately $50 million of cash on the balance sheet at 2Q20, and $370 million available liquidity following the proposed transaction, Fitch expects Aethon to maintain adequate liquidity, funding near-term negative FCF with incremental revolver borrowings and subsequent positive FCF allocated to reduce the RBL balance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. AETHON UNITED: Moody's Rates Proposed $700MM Unsec. Notes 'B3' -------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Aethon United BR LP (Aethon), including a B2 Corporate Family Rating (CFR), a B2-PD Probability of Default Rating (PDR) and a B3 rating to the company's proposed $700 million senior unsecured notes. The rating outlook is stable. Aethon is an independent exploration & production company focused primarily on developing natural gas properties in North Louisiana and East Texas. Aethon is seeking to raise $700 million of senior unsecured notes with proceeds used to refinance the company's $550 million second lien term loan due 2023 and partially repay existing borrowings on the company's $775 million reserved based lending (RBL) facility. "Aethon's ratings are supported by its lower financial leverage, proved reserves base, and strong cash margins aided by its commodity hedge book and significant midstream infrastructure ownership, offset by the company's pure-play natural gas production profile and projected outspending cash flow of its development program," commented Sreedhar Kona, Moody's Senior Analyst. "Aethon's good hedge position and our expectation that the company will execute its development program contribute to the stable outlook." Assignments: Issuer: Aethon United BR LP Probability of Default Rating, Assigned B2-PD Corporate Family Rating, Assigned B2 Senior Unsecured Notes, Assigned B3 (LGD5) Outlook Actions: Issuer: Aethon United BR LP Outlook, Assigned Stable RATINGS RATIONALE Aethon's B2 Corporate Family Rating (CFR) reflects the company's pure-play natural gas production profile, which yields lower cash margins than an oil-weighted production base on an equivalent unit of production, notwithstanding the company's operations in prolific natural gas plays of Cotton Valley/Haynesville and East Texas. The ratings are also constrained by the company's geographic concentration and to some extent its firm transportation (FT) commitments which, while providing flow assurance, could prove burdensome if the company's production slows down. A significant portion of Aethon's reserve base is proved undeveloped and the company's capital spending program to develop the acreage will not enable the company to be free cash flow positive through 2021. Aethon benefits from its relatively low debt leverage, its sizeable production and reserve base and strong cash margins aided by its substantial commodity hedge book. The company has demonstrated a meaningful track record of production and reserves growth since its inception in 2014 and has delineated its acreage significantly. The company's ownership of significant midstream gathering infrastructure enhances the company's cash margins and its FT capacity provides access to Gulf Coast markets with attractive natural gas pricing. The ownership of midstream infrastructure also improves Aethon's asset coverage. The company is supported by an experienced management team with a good track record and a long-term investor Ontario Teacher's Pension Plan as one of its sponsors. Aethon's $700 million senior unsecured notes due in 2025 are rated B3, one-notch below the CFR, reflecting the priority ranking of the company's $775 million borrowing base senior secured RBL facility. Moody's expects Aethon to maintain adequate liquidity. At closing of the proposed notes transaction, Aethon will have $46 million of cash balance and $322 million available under its borrowing base RBL facility, after accounting for outstanding borrowings and letters of credit. Moody's expects Aethon's RBL facility maturity to be extended to 2023 concurrent with the closing of the proposed notes. Aethon will fund its capital spending needs and debt service through 2021 from its operating cash flow and RBL borrowings. Under the RBL credit agreement, Aethon is required to maintain total net debt/EBITDAX of less than 3.5x and a current ratio of greater than 1x. Aethon will maintain compliance with its financial covenants. The stable outlook reflects Aethon's good hedge position and its view that Aethon will continue to grow production scale and reserves size while approaching cash flow neutrality. Moody's also expects the company to maintain low debt leverage and adequate liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade could be considered if the company generates free cash flow while growing production and, reserves and maintains retained cash flow to debt above 35% and leveraged full cycle ratio above 1.5x. The natural gas pricing environment must be supportive as well. Factors that could lead to a downgrade include signs of declining production, higher leverage or retained cash flow to debt below 20%, deterioration of liquidity or a significant rise in debt. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Aethon is an independent exploration & production company focused primarily on developing natural gas properties in North Louisiana and East Texas. AETHON UNITED: S&P Assigns 'B-' ICR; Unsecured Notes Rated 'B' -------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to U.S.- based oil and gas exploration and production (E&P) company Aethon United BR LP, and its 'B' rating to the $700 million senior unsecured notes proposed by the company to refinance its existing $550 million privately placed second-lien term loan and partially repay revolver borrowings. The recovery rating of '2' indicates S&P's expectation for substantial (70%-90%; rounded estimate: 85%) recovery of principal in the event of a default. The ratings on Aethon reflect the company's small proved reserve and production base relative to peers, its single basin concentration in the Haynesville Shale and focus on natural gas production (99% dry gas), a high proportion (65%) of proved undeveloped reserves (PUDs) that will require significant spending to develop, and S&P's expectation for negative free cash flow over the next two years. Ratings are supported by the company's moderate leverage metrics; its systematic hedging program; meaningful benefits of the vertical integration of its midstream and marketing businesses; and firm transportation contracts providing access to favorable pricing and export markets on the Gulf Coast. Based on its current natural gas price deck assumptions, S&P expects debt to EBITDA of 2x–2.5x and FFO to debt in the low-30% area, with negative free cash flow over the next two years. S&P expects Aethon to generate negative free operating cash flow (FOCF) over the next 12 -18 months as it aggressively grows production and reserves, supported by sound financial measures. It expects Aethon to continue to pursue an aggressive growth strategy vis-a-vis many of its Haynesville and natural gas focused peers. The company's production has grown from 324 million cubic feet equivalent (MMcfe) per day in 2018 to about 619 MMcfe per day in the first half of 2020. S&P expects production growth will remain strong, exceeding 30% in 2020 and 20% in 2021 with the company currently running a five-rig development program. This is in contrast to industry peers who have generally reduced capital expenditures (capex), lowered growth targets, and focused on generating free cash flow. Despite the rapid growth, S&P expects Aethon to maintain modest financial measures, including FFO/debt in the low 30% range, as well as adequate liquidity while it moves toward free cash flow generation beginning in 2022. The company seeks to hedge the majority of production two years out, with additional hedges on proved developed production for up to six years, helping support cash flows over this period of heavy spending. In 2021, Aethon has hedged nearly all its expected production at an average price of $2.45 per mmBtu. Although it expects liquidity to improve following the senior note offering and debt repayment, S&P anticipates a moderate deterioration in liquidity over the next 12 months as Aethon uses its RBL to fund negative cash flow. Aethon derives significant benefits from the integration of its midstream gathering, processing and transportation operations. Aethon's 1,111 miles of gathering and transmission pipelines support gross gathering capacity of 1.3 billion cubic feet (Bcf) per day, which S&P expects to grow to 1.6 Bcf per day in 2021 as its midstream buildout continues. This infrastructure provides takeaway capacity for more than 80% of the company's proprietary volumes and generates fee revenue from additional working interest and nonoperated volumes. Overall, during the first half of 2020 this provided an "uplift" to net production of around $0.34 per Mcfe. Additionally, the company has relatively favorable differentials due to its proximity to Henry Hub and has firm transportation capacity of 780 million cubic feet (mmcf) per day to the Gulf Coast, granting Aethon access to favorable demand and export markets. Finally, S&P believes Aethon will receive ongoing benefits from the company's marketing team, which is able to use Aethon's midstream infrastructure and transportation commitments to increase realized prices and add additional EBITDA from third-party and nonoperated volumes. Despite rapid growth, Aethon lacks the scale of operations of natural gas focused peers. Aethon's scale of operations, particularly production, lacks the scale of peers such as Comstock Resources and Indigo Natural Resources. Aethon's expected 2020 production of 600–650mmcfe/d falls short of that of Indigo and Comstock, which should both have about 1 bcfe/day or greater. As a result of the smaller scale, combined with the expected negative free cash flow, S&P has applied a negative comparable rating analysis to the anchor. The stable outlook reflects S&P's view that Aethon will maintain healthy financial measures and adequate liquidity over the next 12–18 months, until it generates consistent positive free cash flow. Under its base-case assumptions, S&P expects FFO/debt to average about 30% and debt/EBITDA of 2.5x or less over the next two years. The outlook also assumes that Aethon will continue to organically grow reserves and production to levels closer to peers and that any acquisitions will be funded so that debt leverage and liquidity remain healthy. "We could lower ratings if we expected FFO/debt to average below 20% or debt/EBITDA above 4x, or if liquidity significantly weakened. This could occur if natural gas prices decline, most likely due to an oversupply of gas if demand does not recover from 2020's demand destruction, and Aethon does not lower spending levels, increasing outstanding RBL borrowing to sustain greater-than-expected negative cash flow," S&P said. "We could raise ratings if Aethon can improve the scale of it operations to levels more consistent with similarly rated peers, while maintaining FFO/debt around 30% and adequate liquidity. This likely occurs with the continued development of its reserves and/or an acquisition that does not materially increase debt leverage," the rating agency said. Additionally, an upgrade could be supported by free cash flow generation and debt repayment that helps improve financial measures so that FFO/debt averages above 45% or debt/EBITDA below 2x, according to S&P. AKORN INC: Funds May File Objection to All Assets Sale Under Seal ----------------------------------------------------------------- Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware authorized 99SEIU Benefit Funds, DC47 Fund and SBA Fund to file under seal their objection to the proposed sale by Akorn, Inc. and affiliates of substantially all business assets to Akorn Holdings Topco, LLC for approximately $1.05 billion, and to the Confirmation of the Debtors' Plan. The Movants are granted to file the Sealed Documents under seal or redaction consistent with the request in their Motion. They may provide a copy of the Sealed Documents to the U.S. Trustee, the counsel for the Official Committee of Unsecured Creditors and any other party that is a signatory on the Protective Order. The Movants will file a redacted document consistent with the Order under cover of "Notice of Filing of Proposed Redacted Version of 1199SEIU Benefit Funds, DC47 Fund and SBA Fund Objection to the Debtors' Motion to Sell and Confirmation of the Debtors' Plan within three days of the date of the Order. About Akorn, Inc. Akorn, Inc. (Nasdaq: AKRX) -- http://www.akorn.com/-- is a specialty pharmaceutical company that develops, manufactures, and markets generic and branded prescription pharmaceuticals, branded as well as private-label over-the-counter consumer health products, and animal health pharmaceuticals. Akorn is headquartered in Lake Forest, Illinois, and maintains a global manufacturing presence, with pharmaceutical manufacturing facilities located in Illinois, New Jersey, New York, Switzerland, and India. Akorn, Inc., and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11178) on May 20, 2020. As of March 31, 2020, the Debtors disclosed total assets of $1,032,275,000 and total liabilities of $1,051,769,000. The cases are assigned to Judge John T. Dorsey. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their general bankruptcy counsel. Richards, Layton & Finger, P.A., is the Debtors' local counsel. AlixPartners, LLP, serves as the Debtors' restructuring advisor, and PJT Partners LP is the financial advisor and investment banker. Kurtzman Carson Consultants, LLC, is the notice and claims agent. ALLEGRO MICROSYSTEMS: Moody's Assigns B1 CFR, Outlook Stable ------------------------------------------------------------ Moody's Investors Service assigned the following first-time ratings to Allegro MicroSystems, Inc.: Corporate Family Rating ("CFR") of B1, Probability of Default Rating of B1-PD, and Senior Secured Term Loan Facility rating of B1. The rating outlook is stable. Allegro intends to use the net proceeds of the Term Loan and balance sheet cash to fund a $400 million cash distribution to Allegro's shareholders: Sanken Electronics Co.'s ("Sanken"), One Equity Partners, and Allegro management. Assignments: Issuer: Allegro MicroSystems, Inc. Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured Term Loan Facility, Assigned B1 (LGD4) Outlook Actions: Issuer: Allegro MicroSystems, Inc. Outlook, Assigned Stable RATINGS RATIONALE The B1 CFR reflects Allegro's modest financial leverage, which Moody's expects will decline towards 3x debt to EBITDA (Moody's adjusted) over the next 12 to 18 months. The CFR also considers Allegro's niche leadership position in the $2.4 billion fragmented, magnetic sensors integrated circuit market. The strong market position is supported by customer relationships, which in part reflect Sanken's majority ownership and the connection this provides to Sanken's Japanese customer base. The sensors and power management portfolios derive support from positive secular trends in the automotive industry, particularly advanced driver assistance systems ("ADAS"), the rising electronic content in cars, and increasing share of electric vehicles. Allegro also benefits from the shift during fiscal year 2021 towards a largely outsourced manufacturing model. Moody's believes this will produce less volatile and consistent free cash flow ("FCF") generation giving Allegro increased financial flexibility during periods of depressed demand. Moody's expects that Allegro will maintain a cash balance in excess of $90 million supported by the consistent FCF generation. Still, the maintenance of low financial leverage is appropriate given the Allegro's small revenue scale and much larger competitors in the broader sensors and power semiconductors market, such as NXP B.V., Renesas Electronics Corp., and Infineon Technologies A.G. These competitors benefit both from broader product portfolios across adjacent markets than Allegro and considerably larger research and development budgets and financial resources, which can be marshalled for acquisitions to fill in missing technologies in the product portfolio. The greater resources of the leading competitors increase the risk of competitive entry via acquisition, which could invigorate a currently smaller segment competitor of Allegro. Moody's believes that this also increases the risk that the larger competitors could displace Allegro's products over time due to the integration of currently discrete function products into multi-function solutions as end customers attempt to limit design complexity in newer products. In addition, most of Allegro's revenues are derived from the highly-cyclical Automotive end market (over 70% of revenues), which has been negatively impacted by shelter-in-place restrictions related to Covid-19 and the global recession, contributing to significant revenue shortfalls and volatility. Indeed, Moody's expects global light vehicle unit sales to decline 19% in calendar year 2020. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Given Allegro's exposure to the global economies and supply chain, the company remains vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. The credit profile is impacted by governance considerations. Allegro's ownership is concentrated, with Sanken owning 67.2%, private equity firm OEP owning 28.8%, and the remaining 4% held by Allegro's management. Allegro's board has a large share of independent directors (four of the nine directors), with the remainder of the board is comprised of the CEO and two directors each from Sanken and OEP. While the ownership of a financial sponsor increases the risk for aggressive policy, OEP has asserted its desire to monetize the investment either via sale to a strategic buyer or through a public offering rather than through debt-funded capital returns. The stable outlook reflects Moody's expectation that revenues, EBITDA, and FCF will improve over the near term as the automotive end market recovers from the coronavirus-related demand disruption. With the anticipated recovery in profitability and increasing cash flows, Moody's expects that leverage will decline towards 3x debt to EBITDA (Moody's adjusted) and FCF to debt (Moody's adjusted) will improve to 20% over the next 12 to 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be upgraded if Allegro: -- increases revenue scale and improves end market diversity by reducing the revenue concentration to the Automotive end market -- sustains EBITDA margin above 25% (Moody's adjusted) -- maintains FCF to debt above 20% (Moody's adjusted). The rating could be downgraded if Allegro: -- fails to generate organic revenue growth at least in the low single digit percentage level -- decreases EBITDA margin to less than 20% (Moody's adjusted) or -- engages in debt funded share repurchases or distributions, or highly-leveraging acquisitions, such that debt to EBITDA (Moody's adjusted) is sustained above 3x The B1 rating of the Term Loan reflects the collateral, which includes a first priority lien on all assets, and benefits from loss absorption of unsecured liabilities. The Term Loan benefits from upstream guarantees of wholly-owned material domestic subsidiaries. As the Term Loan represents a single class of debt, the instrument rating is consistent with the B1 CFR. As proposed the Term Loan provides flexibility that if utilized could negatively impact creditors, including: (1) incremental pari passu term facilities of at least $150 million (100% of Closing Date EBITDA as defined in the credit agreement) plus an additional amount using thresholds (to be determined) based on first lien leverage (as defined in the credit agreement), (2) collateral leakage permitted through the transfer of assets to unrestricted subsidiaries, subject to carve-out capacity, with no additional "blocker" protections (3) requirement that only wholly-owned subsidiaries must provide guarantees, raising the risk of potential guarantee release; partial dividends of ownership interests could jeopardize guarantees, and (4) the asset sale proceeds Term Loan prepayment requirement is reduced to 50% at a First Lien Net Leverage Ratio (as defined in the credit agreement) level 0.5 turns lower than the Closing First Lien Net Leverage Ratio (as defined) and is eliminated entirely at a First Lien Net Leverage Ratio level 1.0 turns lower than Closing First Lien Net Leverage Ratio. Allegro MicroSystems, Inc., based in Manchester, New Hampshire, designs and sells sensor integrated circuits and application specific power semiconductors, serving the automotive and industrial markets. The principal methodology used in these ratings was Semiconductor Industry published in July 2018. ALLEGRO MICROSYSTEMS: S&P Assigns B+ ICR on Proposed Debt Issuance ------------------------------------------------------------------ S&P Global Ratings assigned its 'B+' issuer credit rating to U.S.-based sensor and power semiconductor provider Allegro MicroSystems Inc. S&P also assigned a 'B+' issue-level rating and '3' recovery rating to the proposed senior secured term loan. The stable outlook reflects S&P's expectation that the discontinuation of lower-margin activities in March should support slightly higher EBITDA margins of about 20% in fiscal 2021. S&P expects leverage of about 3.3x in fiscal 2021. It also expects that Allegro will continue to maintain a more conservative balance sheet and financial policy than its parent company, Sanken, and that Sanken will maintain sufficient liquidity such that its capital structure remains sustainable. Dividend recapitalization significantly increases Allegro's leverage. S&P expects Allegro's leverage to peak at about 3.3x in fiscal 2021 pro forma for the transaction, which represents a meaningful increase in leverage from historical levels of less than 1x. In addition to the proposed debt incurrence, this partly reflects lower EBITDA from weaker revenue due to the impact of the ongoing economic recession on manufacturing activity in the automotive and industrial end markets, as well as restructuring costs related to the expected closure of a back-end processing facility in Thailand. Free operating cash flow (FOCF) generation will also be affected by the debt incurrence due to an increase in annual cash interest payments to about $20 million from minimal levels. However, this is offset by lower ongoing capital expenditures (capex) and working capital investments following the divestiture of wafer foundry Polar Semiconductor LLC (PSL) and the termination of a distribution operation for Sanken's products outside Asia, both lower margin and more capital-intensive operations. "Our adjusted debt, operating cash flow, and EBITDA include standard adjustments for operating leases, share-based compensation, and post-retirement benefits. We do not net accessible cash from our debt figures," S&P said. EBITDA growth and a conservative financial policy should support near-term deleveraging. Leverage should decrease to the mid-2x area in fiscal 2022, with EBITDA growth supported by the realization of over $10 million of cost savings from the consolidation of back-end processing to a Philippines-based facility, as well as a potential return to mid-to-high single-digit percent revenue growth. S&P expects this to also support an increase in FOCF to about $60 million in fiscal 2022 from about $45 million in fiscal 2021. "We also expect Allegro to maintain a relatively conservative financial policy, specifically a suspension of dividends following the proposed transaction, limited acquisition activity focused on tuck-in acquisitions, and a maximum gross leverage target of 2.5x as defined by the company," S&P said. "Furthermore, we believe that the company's governance framework has sufficient structural protections against either of its main shareholders unilaterally influencing Allegro to pay dividends or incur material debt," the rating agency said. Allegro's relatively small scale and exposure to the highly cyclical automotive segment could result in volatile credit metrics. Allegro has a smaller revenue base and narrower product focus compared with some of its rated peers such as Infineon Technologies AG and NXP B.V. The company also has a 75% revenue concentration in the automotive end-market, which S&P views as particularly cyclical. "Despite its good geographic and customer diversification, in our view, Allegro's substantial automotive exposure and modest absolute level of FOCF generation leaves its credit metrics more susceptible to end-market volatility compared with 'BB-' rated peers with broader end-market exposures," S&P said. "Furthermore, many of Allegro's competitors have substantially greater financial resources and research and development budgets, and Allegro could face significant competitive headwinds if it is unable to keep up with product design investments in a rapidly evolving semiconductor marketplace," the rating agency said. Allegro benefits from good long-term growth prospects and long-lasting customer relationships. "We consider Allegro's good position in the magnetic sensors market, longstanding and durable customer relationships, and strong intellectual property portfolio that allows for premium price points to be key strengths of the business," S&P said. "Although we expect automobile sales to remain volatile, we do view the longer-term growth prospects for this end market positively, primarily due to the increasing adoption of electric and hybrid powertrains as well as driver-assistance systems from lane-change notification to fully autonomous vehicles, both of which drive higher semiconductor content in vehicles," the rating agency said. With a "fabless" operating model following the PSL divestiture, Allegro should also have a more flexible cost structure to help partly manage the impact of market volatility on profitability. The stable outlook reflects S&P's expectation that the discontinuation of lower-margin activities (wafer fabrication and Sanken product distribution) should support slightly higher EBITDA margins of about 20% in fiscal 2021 in spite of a low- to mid-single-digit percent revenue decline. S&P expects leverage of about 3.3x and FOCF to debt above 10% in fiscal 2021. It also expects that Sanken will maintain sufficient liquidity such that its capital structure remains sustainable and that One Equity Partners will continue to ensure that Allegro maintains a more conservative balance sheet and financial policy than its parent company. S&P could lower the rating if: -- The economic recession were prolonged or worsened, resulting in S&P expecting EBITDA to decline significantly and leverage to remain above 4x for a sustained period. This could be reflected by a substantial deterioration in profitability such that EBITDA margins were well below 20%; -- Although less likely in S&P's view, Allegro adopted an increasingly aggressive financial policy characterized by further debt-funded dividends or large acquisitions could also result in a downgrade; -- Sanken restructured its relationship with Allegro such that their operations were to become more highly integrated, including an increasing reliance on pooled resources or in-house foundry assets; -- There were a weakening of the structural protections in Allegro's governance framework. S&P would view the ability of Sanken to unilaterally upstream cash as a particularly significant weakening of the current governance framework; or -- There were continued deterioration in Sanken's performance or liquidity, leading S&P to view the group's capital structure as unsustainable. "We consider an upgrade to be unlikely in the next 12 months, given constraints from the company's ownership structure. We would view an improvement to the consolidated group's credit metrics as a necessary precursor for an upgrade absent a change in Allegro's ownership," S&P said. "Over the longer run, we could raise our rating if Allegro were able to sustainably reduce leverage to below 2x, combined with either Sanken deleveraging below 5x and maintaining significant positive FOCF by successfully implementing its planned restructuring activities or no longer having a controlling stake in Allegro," the rating agency said. ALLIANCE RESOURCE: S&P Downgrades Issuer Credit Rating to 'B+' -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating and the senior unsecured issue rating on U.S. thermal coal producer Alliance Resource Partners L.P. to 'B+' from 'BB-'. The negative outlook reflects the expectation for higher than previously forecasted leverage as well as S&P's view that the capital markets' heightened focus on environmental, social and governance (ESG) concerns may make it more difficult and more expensive to refinance maturities beginning in 2024. Profit margins are lower and overall business risk is higher. Alliance has been and remains one of the more efficient and profitable coal mining firms in the U.S. Still, its adjusted EBITDA margins are declining amid weak demand and low prices. While historically above average (31% in 2019), forecasted margins in the 20% to 25% will be more closely in line with the average for the broader mining industry. This is the direct result of lower prices and reduced operating efficiencies tied to lower production. And unlike commodities such as iron ore and copper, S&P doesn't anticipate sharp rebounds from cyclical lows because of the long-term secular decline in the thermal coal industry. S&P now expects Alliance's adjusted debt leverage to increase to the 3x-4x range in 2020 and 2021 due to reduced thermal coal demand exacerbated by the coronavirus pandemic. S&P now expects a drop of about 45%-50% in its adjusted EBITDA estimate to $300 million-$330 million in 2020 due to lower sales volumes and higher operating costs. This will cause adjusted leverage to spike above 3.0x in 2020 compared with 1.8x in 2019. This is based on S&P's expectation of adjusted debt of around $1 billion (including approximately $283 million in asset retirement obligations, post-retirement and worker compensation obligations) at the end of 2020. The structural shift of utility customers transitioning from carbon-intensive fuels such as thermal coal is the key driver of decreased thermal coal demand. Low natural gas prices and the coronavirus pandemic have accelerated falling demand in the past 12 months. S&P anticipates this trend will continue given its natural gas price assumption of $2.00 per million Btu (/mmBtu) in 2020 and $2.25/mmBtu in 2021 and because utility customers continue to decarbonize their fuel mix for electricity generation with natural gas and renewable sources. The rating agency assumes Alliance will sell about 28 million tons annually in 2020 and 2021 compared with 39 million tons in 2019. Alliance could face limited access to the capital markets in the future that increases refinancing risk for its 2025 unsecured debt. Alliance will need to refinance its revolver in 2024 and its $400 million outstanding senior unsecured notes in 2025. Meanwhile, its notes continue to trade at a 20%-25% discount to par. Rising pressure on investors to divest holdings in companies that contribute to greenhouse gas emissions is likely to make access to capital increasingly difficult and more expensive for thermal coal companies. "Even though we expect Alliance to have superior EBITDA margins and lower adjusted leverage than several of its U.S.-based coal peers like Peabody Energy Corp. and Arch Resources Inc., we believe Alliance's market capitalization has dropped significantly over the past 12 months," S&P said. "We believe that investor considerations associated with ESG risks could limit Alliance's access to funding sources when it seeks to refinance its notes or replace its reserves. We believe this risk is reflected in bond prices as well as the significant drop in Alliances equity market capitalization over the past 12 months," the rating agency said. Positive free operating cash flow (FOCF) and conservative financial policy should help reduce outstanding debt. S&P expects Alliance to generate positive FOCF of $150 million-$170 million in 2020 after $130 million-$140 million of capital expenditures (capex) (cut by more than half from 2019). This will leave about $90 million-$100 million of discretionary cash flow for debt repayment after about $58 million of required debt payments (including $39 million due under the account receivables facility). S&P assumes the company will prioritize debt repayment over the limited partner's distributions in the next 12-24 months to strengthen the balance sheet and preserve liquidity. It also expects Alliance to limit spending on the expansion of its oil and gas reserves. S&P estimates that 2021 FOCF will decline further to about $100 million-$120 million as higher-priced contracts roll off and sales volumes stay flat. To partially offset lower price realizations, the rating agency believes Alliance could switch production to the lowest-cost operations (such as the Gibson South, Hamilton, and Tunnel Ridge mines). The company also has a nonunionized work force that can be adjusted to match production volumes. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Greenhouse gas emissions "The negative outlook reflects our view that Alliance will likely operate at reduced annual production of about 28 million short tons. This decline is driven by persistently low natural gas prices and coal demand reduction by utility customers. In this environment we forecast adjusted leverage to rise above 3x over the next 12 months," S&P said. "The negative outlook also incorporates the risk of ESG-related considerations limiting capital markets access, which we believe is reflected in the reduced debt pricing and market capitalization of the company," the rating agency said. S&P could lower its rating on Alliance in the next 12 months if coal fired utility plant closures accelerate or the economy remains weaker than anticipated, causing prices to drop 5% to 10% and volumes to drop 10%. This could cause EBITDA to drop 15% to 20% resulting in: -- Adjusted debt leverage above 4x, or -- Covenant headroom below 5%; or -- FOCF at break even or negative. S&P could also lower its rating if the company's public debt discount widened further and market capitalization continued to decline, indicating deteriorating access to capital market. S&P could revise the outlook to stable in the next 12 months if operating performance improved such that Alliance sold more than 30 short tons of coal at 5% to 10% higher prices, and if the company repaid at least $50 million of borrowings. This could result in: -- Adjusted debt leverage sustained below 3x; -- Covenant headroom above 15%; and -- A potentially more receptive outlook from some debt investors. AMERICAN BLUE RIBBON: Emerging From Bankrutpcy ---------------------------------------------- FSR reports that American Blue Ribbon Holdings announced Sept. 10, 2020, that it's emerging from bankruptcy with two separate entities and 62 fewer company-owned restaurants. The company—the parent of Village Inn and Bakers Square -- ended 2019 with 130 company-owned units. As it entered bankruptcy in January, American Blue Ribbon shuttered 33 underperforming stores, leaving it with 97. During bankruptcy, the company decreased the company footprint by 62 -- 34 stores became franchises and 28 permanently closed. Since the end of 2019, 61 company stores have permanently closed. Under the new corporate tree, one entity will oversee 21 company-owned and 118 franchised Village Inn restaurants and 14 company-owned Bakers Square restaurants. The other corporation will own Legendary Baking, which makes more than 20 million pies each year. The effective date of the new entities will be announced at a later date. The restructuring plan does not affect O'Charley's or Ninety Nine Restaurants. "The confirmation of the Plan by the Court results in a healthy capital structure and foundation for each of the businesses to optimize their value," said CEO Craig Barber in a statement. "The emergence of the businesses from the reorganization process is especially rewarding given the challenges since March with COVID related restrictions. We look forward to fulfilling a singular focus on delivering value for the benefit of all stakeholders, including our customers, employees, franchisees, suppliers, creditors and owner. We are truly excited for the days and years ahead." At the time of bankruptcy, American Blue Ribbon said financial numbers have trended in the wrong direction since 2017, with declining sales and margins. The brand cited higher wage rates, unfavorable trade locations, high rent, increased competition in the family-dining segment, and emphasis of off-premises as reasons for the downward movement. American Blue Ribbon sustained operating losses of $11 million in 2018 and $7 million in 2019. The company said Legendary Baking's performance declined from 2016 to 2018 because of over-expansion, the addition of a new leased production facility, and a decline in operating efficiencies at existing facilities. As a part of the reorganization, Legendary recently consolidated all manufacturing operations to its 60,000 square foot facility in Chaska, Minnesota. Additionally, ABRH and other non-debtor affiliate companies said they were no longer funding American Blue Ribbon's operations. In the filing, American Blue Ribbon noted that in the absence of continued funding by ABRH, it projected a "liquidity crisis on or about the petition date." The company said it didn't have the "contracts, infrastructure or human resources" to independently maintain operations without ABRH. American Blue Ribbon received $20 million in debtor-in-possession financing from Cannae Holdings, its majority equity owner, to support reorganization. During proceedings, that was increased to $27.5 million to address issues from the COVID pandemic. About American Blue Ribbon Holdings Based in Nashville, Tennessee, American Blue Ribbon Holdings, LLC -- http://www.americanblueribbonholdings.com/-- operates two distinct regional family dining restaurant brands -- Village Inn and Bakers Square, as well as a bakery operation, Legendary Baking. Founded in 1958 and 1969, respectively, Village Inn and Bakers Square are full-service sit-down family dining restaurant concepts that feature a variety of menu items for all meal periods. As of the Petition Date, in connection with the family dining business, the Debtors operate 97 restaurants in 13 states, franchise 84 Village Inn restaurants, and maintain an e-commerce presence as well. Legendary Baking is the Debtors' manufacturing operation that produces pies in two Debtor-owned production facilities. Legendary Baking provides those pies to the Family Dining Business for sale in Village Inn and Bakers Square restaurants while also selling pies to other restaurants, independent bakers, and customers. American Blue Ribbon Holdings and four affiliates, namely (1)Legendary Baking, LLC, (2) Legendary Baking Holdings, LLC, (3) Legendary Baking of California, LLC, and (4) SVCC, LLC, each filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 20-10161) on Jan. 27, 2020. As of the Petition Date, American Blue Ribbon Holdings estimated between $100 million and $500 million in assets and between $50 million and $100 million in liabilities. The petitions were signed by Kurt Schnaubelt, chief financial officer. Judge Laurie Selber Silverstein is assigned to the cases. Young Conaway Stargatt & Taylor, LLP and KTBS LAW LLP serve as the Debtors' counsel. Epiq Corporate Restructuring, LLC, is the Debtors' claims and noticing agent. APC AUTOMOTIVE: S&P Discontinues 'D' ICR on Chapter 11 Filing ------------------------------------------------------------- S&P Global Ratings discontinued all ratings on automotive aftermarket supplier APC Automotive Technologies Intermediate Holdings LLC and related entities. This follows S&P's downgrading the company to 'D' pursuant to the company's filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code on June 3, 2020. ARCHDIOCESE OF NEW ORLEANS: Victims' Suit Stays in District Court ----------------------------------------------------------------- In the case captioned JAMES DOE, v. ARCHDIOCESE OF NEW ORLEANS INDEMNITY, INC., et al., SECTION: "J" (3), Civil Action No. 20-1338 (E.D. La.), District Judge Carl Barbier denied Plaintiff James Doe's Motion to Remand Action to State Court. Judge Barbier also denied Defendant Roman Catholic Church of the Archdiocese of New Orleans' Motion to Refer Matter to Bankruptcy Court. The suit is one of 35 similar cases filed by plaintiffs who alleged they were sexually abused as children by clergy members working for the Archdiocese. The alleged abuse took place over a span of several decades, from the late 1960s into the 1990s. In 2018, the Archdiocese released a list of clergy members that had been credibly accused of engaging in sexual abuse of minors. The release of the list precipitated dozens of lawsuits against individual clergymen and the Archdiocese, as well as the Archdiocese's insurers. All of the lawsuits were filed in state court. The suit was brought in Orleans Parish Civil District Court in February of 2019. The state court litigation became mired in discovery disputes regarding the confidentiality of various documents produced by the Archdiocese. On May 1, 2020, before the discovery disputes could be resolved, the Archdiocese filed for Chapter 11 Bankruptcy. Upon the filing of bankruptcy, the Archdiocese removed the sex abuse cases to federal court on the grounds that they are "related to the bankruptcy." When the Archdiocese filed for bankruptcy, no scheduling order had been entered and no trial date had been set by the state court in this case. Proceeding parallel to this case is the Archdiocese's Chapter 11 Bankruptcy, overseen by the Bankruptcy Judge. On July 3, 2020, the Official Committee of Unsecured Creditors filed a motion to dismiss the Chapter 11 case, essentially arguing that the bankruptcy is fraudulent, and the Archdiocese is merely attempting to forum shop and delay litigation. On July 7, 2020, roughly two months after removal, the Plaintiff filed the instant Motion to Remand. The Archdiocese then filed its Motion to Refer. According to Judge Barbier, the bedrock issue in this matter concerned weighing the factors that bear on permissive abstention and/or equitable remand. The Archdiocese's Motion to Refer is premised on Local Rule 83.4.1, which states: All cases under Title 11 and all proceedings arising under Title 11 or arising in or related to a case under Title 11 are transferred by the district court to the bankruptcy judges of this district. As set forth in 28 U.S.C. 157(b)(5), personal injury tort and wrongful death claims must be tried in the district court. The Plaintiff responded by arguing the Court can and should withdraw the reference to the Bankruptcy Court. A preliminary question exists as to whether the Court must first refer this matter to the Bankruptcy Court before it may decide whether to withdraw that reference. The Court concluded it is not required to do so. Fifth Circuit precedent indicates that a district court may "effectively withdraw" a case by simply acting in the case before it is referred. The next question is whether the Court should "effectively withdraw" the reference. The Court said that there are two types of withdrawal: mandatory and permissive. The Plaintiff did not argue mandatory withdrawal applies; only permissive withdrawal is at issue. There must be "cause" to exercise permissive withdrawal. Factors to consider include whether the matter is a core or non-core proceeding; whether the proceedings involve a jury demand; and whether withdrawal would further the goals of promoting uniformity in bankruptcy administration, reducing forum shopping and confusion, fostering the economical use of the debtors' and creditors' resources, and expediting the bankruptcy process. The Court found that the balance of factors favors withdrawing the reference. Consequently, the Court denied the Archdiocese's Motion to Refer. On the issue of remand, the Plaintiff urged remand under mandatory abstention or, alternatively, permissive abstention/equitable remand. According to the Court, mandatory abstention is only applicable when all of the following five elements are met: "(1) there was a 'timely motion of a party' for abstention; (2) the claim has no independent basis for federal jurisdiction, other than section 1334(b); (3) the claim is a non-core proceeding; (4) an action has been commenced in state court; and (5) the action could be adjudicated timely in state court." The Court found elements (2) and (5) are lacking. This leaves the Plaintiff's arguments regarding permissive abstention and/or equitable remand. As other courts have noted, the factors governing permissive abstention and equitable remand are nearly identical. Because the analysis is so similar, courts that grant remand often employ equitable remand found in 28 U.S.C. section 1452(b), which allows a court to remand "on any equitable ground" claims removed under section 1452(a). This is a broad grant of authority. A court may consider the following factors when deciding a motion for equitable remand: (1) [t]he convenience of the forum; (2) the presence of non-debtor parties; (3) whether the case should be tried as a whole in state court; (4) the duplicative and uneconomic effect of judicial resources in two forums; (5) the lessened possibility of inconsistent results; (6) whether the state court would be better able to handle issues of State law; (7) the expertise of the Bankruptcy Court; (8) the degree of relatedness or remoteness to the main bankruptcy case; (9) prejudice to involuntarily removed parties; (10) whether the case involves forum shopping; (11) the burden on the Bankruptcy Court's docket; and (12) considerations of comity. The parties vigorously disputed how the Court should weigh these factors. The Plaintiff argued that the Bankruptcy Court's inability to adjudicate personal injury jury trials, the predominance of Louisiana state law issues, the presence of multiple non-debtors, the unrelatedness of Plaintiff's claims to the Archdiocese's Chapter 11 Bankruptcy, and the Archdiocese's alleged forum shopping all favor remand. The Archdiocese, on the other hand, contended that the Bankruptcy Court is willing and able to adjudicate the state law claims present in this case, the non-debtors will be prejudiced if the case is remanded to state court, this case is related to the main bankruptcy because the presence of the numerous sex abuse lawsuits was a primary driver in filing Chapter 11 Bankruptcy, and finally they were not forum shopping, but rather utilizing Chapter 11 Bankruptcy in the way Congress intended; i.e. to create a single forum to adjudicate and pay out claims against the estate. The Court found that both the Plaintiff and the Archdiocese have equitable factors that favor their respective positions. Ultimately, though, the Court concluded that remand is inappropriate at this time, largely because the automatic stay has not been lifted. With the automatic stay still in effect, many of the equitable considerations the Plaintiff cited in support of remand are less weighty than they would otherwise be. No discovery may proceed, no prescription hearings may be set, no state jury trial may occur, and generally no comity concerns exist because the substantive claims against the Archdiocese are stayed, regardless of the forum. Conversely, the Archdiocese's concerns about maintaining the numerous suits against it in one forum are equally valid whether the stay is in effect or not. Accordingly, the Court denied Plaintiff's Motion to Remand. A copy of the Court's Order dated August 11, 2020 is available at https://bit.ly/3lFnnhj from Leagle.com. About the Archdiocese of New Orleans Created as a diocese in 1793, and established as an archdiocese in 1850, the Roman Catholic Church of the Archdiocese of New Orleans -- https://www.nolacatholic.org/ -- is a non-profit religious corporation incorporated under the laws of the State of Louisiana. The archdiocese's geographic footprint occupies over 4,200 square miles in southeast Louisiana and includes eight civil parishes -- Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, St. Tammany, and Washington. The Roman Catholic Church for the Archdiocese of New Orleans sought Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1, 2020. The archdiocese was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge Meredith S. Grabill oversees the case. The archdiocese is represented by Jones Walker LLP. Donlin, Recano & Company, Inc. is the claims agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 20, 2020. The committee is represented by Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP. ARCHROCK INC: S&P Assigns B+ Issuer Credit Rating; Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issuer credit rating to Archrock Inc., with stable outlook. The ratings on Archrock's subsidiary, Archrock Partners L.P., are unchanged. "We are assigning a rating to Archrock Inc. to better reflect our credit view of the consolidated group. Previously, while we considered credit metrics at Archrock Inc. and viewed the company and its subsidiaries as part of a consolidated group, we rated only the subsidiary Archrock Partners L.P.," S&P said. Following changes to Archrock's debt guarantees and financial reporting within the group earlier this year, S&P will now also rate the group's parent, Archrock Inc. It views Archrock Partners as core to Archrock and does not anticipate their respective ratings to deviate going forward. S&P expects Archrock will weather the 2020 downturn without a material degradation in credit quality. Archrock, like all midstream oil and gas operators, will face pressures resulting from the recent collapse and ongoing volatility in oil, but its position as a compression company should protect it from a precipitous decline in cash flows. S&P forecasts a slight decline in fleet utilization--to about 80%-85% in 2020--because it believes overall demand for gas compression will remain relatively stable, even assuming a decline in associated gas production following oil well shut-ins, because a lower amount of gas in pipelines requires greater compression. Counterparty risk and short-dated contracts increase exposure to volumetric risk. Archrock's contract tenures generally span one to three years, increasing the importance of continually re-signing or extending contracts. Given the pressure S&P expects to see on many of Archrock's counterparties through the current downturn, it expects to see downward pricing pressure when Archrock re-negotiates its contracts; however, because of high switching costs and the continued need for compression services, it expects to see few outright cancelations of contracts, supporting the company's cash flows through the downturn. Archrock's capital structure is aggressive, with S&P-adjusted debt to EBITDA between 4x and 5x through 2022. S&P forecasts Archrock to stay below its 5x downside threshold through 2022. The rating agency expects the downturn will have the greatest impact in 2021 and 2022, when it forecasts EBITDA to be about 10%-15% lower than in its previous analysis. However, throughout this period S&P expects leverage to top out at about 4.75x in 2021, before declining to the low-4x area in 2022 following a presumed recovery in oil and gas prices. Relatively light capital spending over the next two years further supports credit metrics. "The stable outlook on Archrock Inc. reflects our expectation for steady financial performance throughout 2020. We expect S&P Global Ratings-adjusted debt to EBITDA of between 4x and 5x over the next two years," the rating agency said. S&P could consider a negative rating action if it believed debt to EBITDA at the partnership would exceed 5x for an extended period. This could occur if demand for compression services weakened, which would likely stem from an industry-wide decline in natural gas production or slacking natural gas demand. "We could consider a positive rating action if we expected Archrock to maintain debt to EBITDA below 4x while utilization remained in the 90% area and the partnership continued to increase its scale by adding incremental horsepower. This could occur if the company adopted a more conservative financial policy while demand for natural gas increased, resulting in increased production and demand for compression services," S&P said. ASCENA RETAIL: Unsecured Creditors Have 2 Options in Joint Plan --------------------------------------------------------------- Ascena Retail Group, Inc., and its affiliated debtors proposed a Joint Plan of Reorganization for the resolution of the outstanding claims against and interests in the Debtors dated July 31, 2020. Class 5 consists of all general unsecured claims. If holders of allowed general unsecured claims vote as a class to accept the Plan, each holder of an allowed general unsecured claim will receive its pro rata share of cash in an amount equal to $500,000. If holders of allowed general unsecured claims vote as a class to reject the Plan, each holder of an allowed general unsecured claim will receive treatment consistent with section 1129(a)(7) of the Bankruptcy Code, as determined by the Debtors and the Required Consenting Stakeholders. Class 8 consists of all interests in Ascena. Each holder of an allowed interest in Ascena will have such interests cancelled, released, and extinguished without any distribution. The Reorganized Debtors shall use cash on hand, including proceeds from the exit facilities, to fund distributions to certain holders of allowed claims. On the Effective Date, Reorganized Ascena shall issue the New Common Stock to fund distributions to certain holders of Allowed Claims. On the Effective Date, each Consenting Stakeholder shall receive, in its capacity as such, (a) its pro rata share of 44.9% of the New Common Stock, which will be subject to dilution from the Management Incentive Plan, and (b) its pro rata share of the Equity Premium, which will be subject to dilution from the Management Incentive Plan. A full-text copy of the joint plan of reorganization dated July 31, 2020, is available at https://tinyurl.com/yy7ga9kh from PacerMonitor.com at no charge. Proposed Co-Counsel to the Debtors: Kirkland & Ellis LLP 601 Lexington Avenue New York, NY 10022 Attn.: Steven N. Serajeddini - and - Kirkland & Ellis LLP 300 North LaSalle Chicago, Illinois 60654 Attn.: John R. Luze, Jeff Michalik - and - Cooley LLP 1299 Pennsylvania Avenue, NW, Suite 700 Washington, DC 20004-2400 Attn.: Cullen D. Speckhart, Olya Antle About Ascena Retail Group Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Visit http://www.ascenaretail.com/for more information. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. On July 23, 2020, Ascena Retail Group and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities. The Hon. Kevin R. Huennekens is the case judge. Debtors have tapped Kirkland & Ellis LLP and Cooley LLP as bankruptcy counsel, Guggenheim Securities, LLC as financial Advisor, and Alvarez and Marsal North America, LLC as restructuring advisor. Prime Clerk, LLC is the claims agent. ASCENT RESOURCES: S&P Puts CCC+ Notes Rating on Watch Positive -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based exploration and production company Ascent Resources Utica Holdings LLC to 'CC' from 'CCC+' after the company announced an exchange offer for its 2022 notes, which the rating agency considers to be a distressed exchange. The rating agency also lowered its issue-level rating on the 2022 notes to 'CC' from 'CCC+'. At the same time, S&P placed its 'CCC+' issue-level rating on Ascent's 2026 notes on CreditWatch with positive implications, reflecting the potential for an upgrade if the company's debt exchange offer is successful. It also assigned a preliminary 'B+' issue-level rating to the proposed 2025 second-lien term loan and a preliminary 'B' issue-level rating to the proposed 2027 senior unsecured notes. The preliminary ratings reflect the likelihood of an upgrade of the issuer credit rating to 'B-' if the transaction is successful. Meanwhile, the negative outlook reflects the likelihood of a downgrade upon closing of the debt exchange transaction. Pursuant to the transaction, the company would exchange its outstanding $925 million senior unsecured notes due 2022 for a $550 million second-lien term loan due 2025 and new senior unsecured notes due 2027 on a pro rata basis. The exchange offer is at par if tendered before the early tender date of Sep. 23, 2020, and at a 5% discount after. In S&P's view, the higher debt priority provided by the second-lien loan and senior unsecured notes mix is insufficient compensation to offset the extended maturity. In addition, Ascent faces a high risk of conventional default over the near to medium term if it cannot refinance its 2022 notes within the next 14 months. The company's reserve-based lending facility due 2022 has a springing maturity of December 2021 if more than $200 million of the 2022 notes remain outstanding by then. "The preliminary ratings on the new debt instruments reflect both the likelihood that we upgrade the issuer credit rating to 'B-' if the debt exchange is successful and our recovery expectations for each debt," S&P said. "If the transaction goes through as expected, we believe Ascent's debt leverage, capital structure, and maturity schedule will become sustainable and hence command a higher rating. We base our recovery expectations on the debt on an updated PV10 valuation of reserves at midyear 2020," the rating agency said. The negative outlook reflects S&P's expectation that it will lower the issuer credit rating to 'SD' (selective default) when the transaction closes because the rating agency considers it to be a distressed exchange. S&P would also lower its rating on the 2022 notes to 'D'. S&P is likely to re-assess the issuer credit rating to 'B-' once the cash tender offer from the Sponsors for the new 2027 notes has ended. "We expect to lower our issuer credit rating to 'SD' when Ascent completes its distressed debt exchange, and to keep at that level until the cash tender offer from the Sponsors is complete," S&P said. "Although unlikely at this time, we could raise our rating on Ascent if we expect it will not complete its distressed debt exchange," the rating agency said. ATOM INSTRUMENT: PAC Did Not Use Trade Secrets, 5th Cir. Affirms ---------------------------------------------------------------- The Plaintiffs in the case captioned ATOM INSTRUMENT CORPORATION, doing business as Excitron Corporation; FRANEK OLSTOWSKI, Plaintiffs-Appellants, v. PETROLEUM ANALYZER COMPANY, L.P., Defendant-Appellee, Consolidated with No. 19-20371 (5th Cir.) initiated an adversary proceeding against Petroleum Analyzer, in which they alleged misappropriation of trade secrets, unfair competition, and civil theft. The district court withdrew the reference to the bankruptcy court and entered a take-nothing judgment. The district court also awarded attorneys' fees to the defendant. The United States Court of Appeals, Fifth Circuit affirmed the district court's judgment and fee award. They also remanded the case to allow the district court to make the initial determination and award of appellate attorneys' fees to Petroleum Analyzer. Plaintiff Franek Olstowski once worked for the defendant Petroleum Analyzer Co., L.P., where he was a research and development consultant. While working there in 2002, Olstowski developed an excimer lamp using krypton-chloride to detect sulfur with ultraviolet fluorescence. There is no dispute that Olstowski developed the technology on his own time and in his own laboratory, but he also performed tests and generated data for the technology using Petroleum Analyzer resources. In 2003, and again in 2005, Olstowski and Petroleum Analyzer entered into non-disclosure agreements regarding the technology. The parties never were able to agree on licensing. During the period of the discussions, Olstowski applied for a patent for his technology, then twice amended it. The Patent and Trademark Office rejected his first application and his first amendment but accepted his second amended application. ATOM Instrument Corp. was started in 2004 by Olstowski to assist him in the failed licensing discussions with Petroleum Analyzer. In 2006, Petroleum Analyzer filed a lawsuit in the 269th District Court of Harris County, Texas, seeking a declaratory judgment that Petroleum Analyzer is the owner of the technology Olstowski developed. The state court ordered the claims to arbitration because the 2005 non-disclosure/non-use agreement contained an arbitration clause. The arbitration panel declared that Olstowski is the owner of: a. the technology and methods embodied in the patent applications styled Improved Ozone Generator with Duel Dielectric Barrier Discharge, Improved Close-Loop Light Intensity Control and Related Fluorescence Application Method; and Excimer UV Fluorescence Detection; b. all of the accompanying drawings, blueprints, schematics and formulas created or drawn by either Olstowski or Virgil Stamps of the application identified in or in support of ((a) and (b) hereinafter referred to as the Excimer Technology); and c. Issued Patents and/or Patent Applications pending entitled: Ozone Generator with Dual Dielectric Barrier Discharge and Methods for Using Same, Improved Closed-Loop Light Intensity Control and Related Fluorescence Application Method, and Excimer UV Fluorescence Detection (as amended). The panel also concluded that the "[t]echnology and intellectual property embodied within the technology set forth in paragraph 5 (a)-(c) above are trade secrets of Olstowski." Accordingly, the panel enjoined Petroleum Analyzer from claiming or using the technology. On Nov. 6, 2007, the state court confirmed the arbitral award. A Texas appellate court upheld the confirmation order. In 2009, Petroleum Analyzer partnered with a German company to develop its own sulfur-detecting excimer lamp called a MultiTek, which also used krypton-chloride to detect sulfur with ultraviolet fluorescence. Petroleum Analyzer manufactured and sold the MultiTek between November 2009 and October 2011. In December 2010, upon learning that Petroleum Analyzer was selling the MultiTek, Olstowski and ATOM filed a motion in state court to hold Petroleum Analyzer in contempt because Petroleum Analyzer violated the order enjoining it from using Olstowski's technology. Petroleum Analyzer responded that the confirmation order had ambiguously defined the technology that Petroleum Analyzer was enjoined from using. In August 2011, Olstowski and ATOM again moved to enforce the injunction, and in December 2011 they filed a second contempt motion. The state court granted the motion in part merely to clarify the meaning of the confirmation order. The state court concluded that the phrase "technology developed by Olstowski" as used in the confirmation order "means technology using an excimer light source that uses Krypton-Chloride specifically to measure sulfur using ultraviolet fluorescence." The state court, though, denied the contempt motion due to mootness: Petroleum Analyzer had ceased selling the MultiTek sometime between September and October of 2011. Significantly, the state court never decided whether Petroleum Analyzer's MultiTek used Olstowski's technology as defined by the arbitration panel and confirmation award. In February 2012, ATOM filed for bankruptcy under Chapter 11 of the Bankruptcy Code. Two months later, Olstowski and ATOM initiated an adversary proceeding against Petroleum Analyzer, in which they alleged misappropriation of trade secrets, unfair competition, and civil theft. On the bankruptcy court's recommendation, the district court withdrew the reference to the bankruptcy court and asserted jurisdiction under 28 U.S.C. section 1334. In August 2014, the district court entered partial summary judgment for Olstowski and ATOM, holding that Petroleum Analyzer "will be liable for using the trade secrets of Franek Olstowski and ATOM Instrument, LCC, if it used his technology in its MultiTek." Four years later, the district court held a six-hour bench trial to determine if Petroleum Analyzer had used any of Olstowski's protected technology. The court entered a judgment in favor of Petroleum Analyzer and later awarded attorneys' fees to Petroleum Analyzer. Olstowski and ATOM filed two appeals, which the 5th Circuit had consolidated. Olstowski and ATOM argued the district court made two errors: (1) finding that Petroleum Analyzer did not use Olstowski's trade secrets in Petroleum Analyzer's MultiTek and (2) awarding Petroleum Analyzer attorneys' fees under the Texas Theft Liability Act. According to the 5th Circuit, Olstowski and ATOM based their entire case on Petroleum Analyzer's use of krypton-chloride in the MultiTek. Further, because of the backdrop of the arbitration panel's decision, they argued that what might otherwise look like a factual issue on the technology is actually a legal issue of interpretation of the panel decision. As they surely realized, it is difficult to argue that a legal question is posed when asking whether one company used another's protected technology. The arbitration panel stated that the technology described in Olstowski's patents is a trade secret. To be sure, the words "krypton" and "chloride" appeared in the panel decision. Yet it was unclear to the district court how a gas and a chemical compound commonly used in lamps and lasers can be a trade secret. Olstowski and ATOM could have provided expert testimony to show how the use of krypton-chloride is so unique to their device as to make it an integral part of their protected trade secret as opposed to a generic concept of physics, which is unprotected. They did not. The two witnesses they did call merely testified that Petroleum Analyzer's MultiTek used krypton-chloride, a fact Petroleum Analyzer did not contest. The 5th Circuit concluded that Olstowski and ATOM's proclaimed legal issue is indeed a factual one, and that they failed to carry their burden of proof at trial. On this record, the 5th Circuit could not say that the district court's finding of fact was clearly erroneous. Olstowski and ATOM also argued that the district court's decision disregarded the "law of the case," which would be another means to transform resolution of the appeal into primarily a question of law. They argued that the state district and appellate courts confirmed the arbitration panel's award of Olstowski's trade secret, and that the state district court clarified the confirmation order's description of the technology to include the use of krypton-chloride. According to Olstowski and ATOM, the federal district court's judgment improperly altered the plain meaning of the previous orders. The 5th Circuit found, first, that neither the arbitration panel award nor the state clarification order explicitly stated that the use of krypton-chloride itself was a protected trade secret. Second, ATOM and Olstowski asked the district court to "make a ruling . . . defining what technology in dispute belongs to [them], to the exclusion of" Petroleum Analyzer. The district court did so by a decision that did not deviate from the arbitration panel award or any other order. In fact, the district court stated that the arbitration panel award's description of Olstowski's technology remained in effect. The 5th Circuit held that the district court did not ignore the "law of the case." After the district court entered its judgment on the merits of this dispute, Petroleum Analyzer moved for an award of attorneys' fees under the Texas Theft Liability Act ("TTLA"). Olstowski and ATOM argued that the district court erred in failing to segregate Petroleum Analyzer's fees that were not related to Petroleum Analyzer's defense of their claim under the TTLA. The 5th Circuit found no error as to the billing entries totaling $3,498 used as an example of the need for segregating the billings. Though the fees were billed for work done via mediation prior to the TTLA claims being filed, the work advanced Petroleum Analyzer's attempt to resolve a threatened claim under the TTLA. A copy of the Court's decision dated August 7, 2020 is available at https://bit.ly/3jyqJ3Z from Leagle.com. ATOM Instrument Corporation, dba Excitron Corporation, filed for Chapter 11 bankruptcy (Bankr. S.D. Texas Case No. 12-31184) on Feb. 10, 2012, disclosing under $1 million in both assets and debts. Melissa Anne Haselden, Esq., at Hoover Slovacek LLP, serves as the Debtor's bankruptcy counsel. AVEANNA HEALTHCARE: S&P Rates $185MM First-Lien Term Loan 'CCC+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'CCC+' rating to Aveanna Healthcare LLC's proposed $185 million first-lien term loan due in 2024. The recovery rating is '3', the same as for the existing first-lien debt, indicating S&P's expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. This represents the rating agency's view of slightly weaker recovery prospects versus its previous expectation of 60% recovery due to the increase in first-lien debt. The company intends to use the proceeds to fund several tuck-in acquisitions of private duty nursing companies, and an adult home health company. The addition of adult home health will be a new business platform for the company. Although S&P views home health reimbursement as risky, particularly with the new Medicare reimbursement system (the Patient-Driven Groupings Model, which became effective on Jan. 1, 2020), the rating agency believes it has greater growth opportunities. S&P also believes management has extensive experience managing both reimbursement risk and acquisition integrations. "Our 'CCC+' issuer credit and issue-level ratings on Aveanna are unchanged, and the outlook is negative. The negative outlook reflects the potential for continued cash flow deficits in 2020 and 2021," S&P said. Although Aveanna's liquidity position has recently improved through the receipt of funds related to certain legal settlements and a sponsor equity infusion, we expect the company to remain acquisitive, particularly in building out the home health segment, which would require significant use of cash or additional financing needs," the rating agency said. BADGER FINANCE: S&P Upgrades ICR to 'B-' on Improved Liquidity -------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based Badger Finance LLC to 'B-' from 'CCC' because it expects sustained improved profitability and cash flow generation. At the same time, S&P is raising its rating on the company's first-lien term loan to 'B-' from 'CCC'. The '3' recovery rating is unchanged, indicating S&P's expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. "The stable outlook reflects our expectation that the company will maintain adequate liquidity, positive operating cash flow, and maintain adjusted leverage of 6x-7x excluding our treatment of the preferred shares as debt," S&P said. Badger Finance LLC's profitability and liquidity have improved from new ready-to-drink (RTD) contract wins and higher demand for its single-serve coffee business. S&P Global Ratings expects the company to experience stronger operating leverage with increased top-line growth. The upgrade reflects Badger's improved EBITDA and lower debt leverage. The company outperformed S&P's expectations, benefiting from new customer wins in its RTD Horseshoe segment and improved product mix, resulting in adjusted leverage declining to about 9x for the 12 months ended June 30, 2020, down from 12x for the same period a year ago, excluding the rating agency's treatment of the preferred shares as debt. S&P now forecasts adjusted EBITDA margins of 18%-19% for fiscal 2020 compared to its previous expectation of 12%-13%. It no longer expects the company to face a near-term liquidity constraint given the rating agency's expectation of improved profitability and free cash flow in excess of $10 million for fiscal 2020. S&P also expects leverage to decline to around 6x-7x for fiscal 2020 excluding its treatment of the preferred shares as debt and leverage of 13x-14x including its treatment of the company's preferred shares as debt. While the terms have not changed, S&P has reassessed its treatment of the company's preferred shares that is majority owned by investor, The Blackstone Group. S&P now views the company's roughly $350 million preferred shares as debt in the rating agency's ratios because they have a minimum internal rate of return threshold. Although there is no cash payment on these shares, no maturity, and no contractual right to force an exit, S&P does not view it as permanent capital. Profitability has improved due to new contract wins and greater overhead absorption in the RTD segment. The company has executed on winning new contracts at its Horseshoe plant, increasing sales by 316% for the second fiscal quarter of 2020 over the same period a year ago. This has resulted in substantial year-over-year Horseshoe EBITDA margin improvement to nearly 30% from negative a year ago, due to improved overhead absorption from new customer wins, increased operating efficiency, and stronger product mix. S&P expects RTD beverage growth at Horseshoe to continue for the remainder of fiscal 2020 and into next year as the company executes on long-term contracts with pricing protection measures and increases utilization and efficiency at the plant. The company has also improved its customer and product mix in RTD beverages to further bolster profitability. The single-serve segment has grown and benefits from heightened demand due to increased at-home consumption from the pandemic. This will also result in the company diversifying its channel mix into more traditional grocery and mass segments, which will benefit price points and reduce reliance on the value channel. Despite its flat top-line forecast for the Trilliant business, S&P expects the company to begin retaking share from smaller super-value players through leveraging its stronger production capabilities and its own new super-value brands. Additionally demand tailwinds should benefit Trilliant, private label fresh ground coffee pods grew to 20.8% share in 2019 up from 12.3% in 2015 (Source: Euromonitor), as consumers continue to look for value, primarily taking share from the mid-price range of the coffee pod segment." S&P expects stronger cash flow generation, resulting in improved liquidity. The rating agency now expects free cash flow generation for fiscal 2020 in excess of $10 million, which is up from its previous expectation of negative free cash flow. This is driven by the company's improved overhead absorption, new higher-margin product mix in the Horseshoe segment and its pricing leverage given its scale in retort bottling. Additionally, S&P expects the company to continue branching into its own branded RTD products, which should further improve product mix, while also retaining its private label businesses to generate operating leverage. S&P expects the company to continue prudently managing its maintenance capital expenditures (capex) to less than $5 million for fiscal 2020, utilizing minimal incremental investments to flex its current production capacity to fulfill increased demand. There are several key risks to S&P's forecast, including a shortage of cans due to increased dining at home, although the company's needs are met through 2021, and increased competition in the super-value single-serve channel. Additionally, as workers return to offices and consume office coffee, demand for the company's single-serve value channel products could wane. "We expect the company to repay its 2019 accrued tax liabilities as well as fiscal 2020 tax distributions with operating cash flows. We also expect the company to further repay its asset-based lending revolver, freeing up additional capacity and improving its liquidity position," S&P said. "We forecast sources of liquidity over uses of 1.2x over the next 12 months, due to our expectation of improved funds from operations of over $15 million," the rating agency said. The stable outlook reflects S&P's expectations that the company will deliver on EBITDA margin expansion through improved mix and operational improvements, and grow sales through new business wins enabling it to generate about $10 million of free cash flow. "We could downgrade the ratings if EBITDA margins contract such that we would no longer believe the company can generate cash flows in excess of debt service payments, resulting in an unsustainable capital structure. We could also lower the ratings if EBITDA to cash interest declines below 1.2x. This could happen if competition intensifies or demand wanes," S&P said. "While unlikely over the next 12 months, we could raise the ratings if we expect the company to return to growth in the Trilliant business while generating free cash flow in excess of $15 million, increasing its business scale and diversification, and maintaining a conservative financial policy," the rating agency said. BEAR GRASS: Unsecured Creditors to Have 1% Recovery in Plan ----------------------------------------------------------- Debtor Bear Grass Holdings LLC filed with the U.S. Bankruptcy Court for the District of Nevada a Disclosure Statement to accompany Plan of Reorganization dated July 31, 2020. Class 6 General Unsecured Claims will receive payment of 1% of each Allowed Claim in cash as soon as reasonably practicable after the later of (i) the Effective Date of the Plan, (ii) the date such Class 5 Claim becomes Allowed, or (iii) such other date as may be ordered by the Bankruptcy Court. Class 6 is an Impaired Class. The Holder of an Allowed Class 6 Claim is entitled to vote to accept or reject the Plan. On the Effective Date of the Plan, the Debtor's Equity Interest Holder will retain its share of Equity Interest in Reorganized Debtor. Class 7 is an Unimpaired Class and is deemed to have accepted the Plan. The Holder of an Allowed Class 7 Claim is not entitled to vote to accept or reject the Plan. On the Effective Date, without any further action by Debtor or Reorganized Debtor, all of Debtor's assets will vest in the Reorganized Debtor, subject to the terms and conditions of the Plan. The Reorganized Debtor will continue to exist as a separate entity in accordance with applicable law and shall retain all licenses necessary to its operations that existed as of the Petition Date. The Debtor's existing articles of incorporation, bylaws, corporate resolutions will continue in effect for Reorganized Debtor following the Effective Date, except to the extent such documents are amended in conformance with the Plan or by proper corporate action after the Effective Date. Reorganized Debtor's parent company and managing member, 365 Real Estate Investments, LLC, will provide substantial new value to Reorganized Debtor by infusing Reorganized Debtor with the necessary funds to restore the Property to habitable conditions, and renovate to maximize income, which Debtor projects will cost at least $200,000.00. A full-text copy of the Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y3mtof2h from PacerMonitor.com at no charge. Counsel for the Debtor: ANDERSEN LAW FIRM, LTD. Ryan A. Andersen, Esq. Email: ryan@vegaslawfirm.legal Ani Biesiada, Esq. Email: ani@vegaslawfirm.legal 3199 E Warm Springs Rd, Ste 400 Las Vegas, Nevada 89120 Tel: 702-522-1992 Fax: 702-825-2824 About Bear Grass Holdings Bear Grass Holdings LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 19-12827) on May 6, 2019, estimating under $1 million in both assets and liabilities. The Debtor is represented by the Andersen Law Firm. BLUE CAY: Angel Sky Buying West Palm Beach Property for $600K ------------------------------------------------------------- Blue Cay, LLC, asks the U.S. Bankruptcy Court for the Southern District of Florida to authorize the sale of the real property located at 999 Whippoorwill Terrace, West Palm Beach, Palm Beach County, Florida to Angel Sky Lakes, LLC for $600,000, under the terms of their "As Is" Residential Contract for Sale and Purchase, and Addendum(s) to the Contract. The value of the Property is $417,887. The Lenders, Kenneth and Carole Pierce, will be paid in full, as well as any tax money owed, with the Debtor to receive the remaining proceeds after closing costs. The closing is scheduled for Sept. 10, 2020. Based on the Palm Beach County Property Appraiser's valuation, the Debtor believes that the offer tendered by the Buyer is fair and reasonable in light of the current market conditions. Thus, it submits that the offer is in the best interests of the Estate and its creditors. A copy of the Contract is available at https://tinyurl.com/y4vjmarv from PacerMonitor.com free of charge. 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 Aug. 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. BODY TRANSIT: Court Allows First Bank's $80,000 Secured Claim ------------------------------------------------------------- Bankruptcy Judge Eric L. Frank sustained Debtor Body Transit, Inc.'s objection to First Bank's election and granted its valuation motion. Judge Frank also determined that First Bank holds an allowed secured claim of $80,000 and a general unsecured claim of $890,233.13. On Jan. 2, 2020, the Debtor filed a voluntary petition under chapter 11 of the Bankruptcy Code. In the petition, the Debtor designated itself as a "small business debtor" as defined in 11 U.S.C. section101(51D). On March 2, 2020, the Debtor filed a motion requesting authority to proceed under the Small Business Reorganization Act of 2019 ("the SBRA"), codified as subchapter V of chapter 11 of the Bankruptcy Code, 11 U.S.C. sections1181-1195. The motion was contested by the Debtor's secured creditor, First Bank. By Memorandum and Order dated March 24, 2020, Judge Frank granted the Debtor's Motion. The two interrelated contested matters in this case are: (1) the Debtor's objection to First Bank's Election Pursuant to section1111(b) of the Bankruptcy Code (the section 1111(b) Election Objection); and (2) the Debtor's Motion to Value and Determine Secured Status of First Bank's Lien on the Debtor's Tangible and Intangible Property, based on 11 U.S.C. section 506(a) and Fed. R. Bankr. P. 3012. Section 1111(b) permits an undersecured creditor to elect to have its claim treated as fully secured for certain purposes in a chapter 11 reorganization. In this case, the Debtor filed an objection, asserting that First Bank is not entitled to make that election. Instead, the Debtor argued that it should be permitted to bifurcate First Bank's claim into secured and unsecured components pursuant to 11 U.S.C. section506(a), so that the two components can be treated differently in a plan of reorganization. The Debtor commenced the case on Jan. 2, 2020. At that time, the Debtor operated three fitness clubs in Montgomery County, Pennsylvania. On Jan. 31, 2020, First Bank filed four claims totaling approximately $1.1 million, asserting a secured position in all of the Debtor's assets. Since the commencement of the case, the Debtor closed and sold the assets in its location in Pottstown, Pa., referred to by the parties as "North Coventry location." The Debtor also closed its second location in Limerick, Pa., and the lessor at that site has been granted relief from the automatic stay to retake possession of the premises. The Debtor sought to reorganize through the operations of its one remaining location, in Collegeville, Pa. On Feb. 21, 2020, Collegeville Plaza Associates, L.P., the Debtor's lessor of the premises at the Collegeville location filed a motion for relief from the automatic stay, seeking authority to pursue the entry of a money judgment and a judgment for possession of the premises. After a number of consensual continuances, probably driven by the COVID-19 shutdown that began in Pennsylvania on March 16, 2020, a hearing on CPA's Motion was held on May 13, 2020. The day following the hearing, Judge Frank entered an order granting CPA relief to proceed with its state court litigation, but solely for the purpose of obtaining a money judgment and a judgment for possession; i.e., the stay remaining in place to preclude any enforcement of the judgment. The May 13, 2020 order also required the Debtor to make an adequate protection payment and scheduled a further hearing on June 24, 2020 to consider whether CPA should be granted additional relief. The June 24th hearing was continued by agreement to July 15, 2020, when it was continued again by agreement to August 19, 2020. On April 11, 2020, the Debtor filed a proposed chapter 11 plan of reorganization, and an amended plan on April 22, 2020. On April 19, 2020, First Bank filed an "Election Pursuant to 11 U.S.C. section 1111(b)(2) to Have its Claim Treated as Fully Secured. The section 1111(b) Election states: "First Bank hereby elects that its claim, notwithstanding 11 U.S.C. [Sec.] 506(a), be treated as a secured claim to the extent that such claim is allowed. . . ." The Debtor responded by filing the Valuation Motion on April 29, 2020. The Debtor's position in these contested matters is grounded in the reorganization strategy that is set forth in the proposed amended plan of reorganization filed on April 22, 2020. The Debtor's reorganization strategy may be summarized as follows. The Debtor seeks to: -- bifurcate First Bank's allowed claim into secured and unsecured components through 11 U.S.C. section 506(a)(1); -- provide in the Plan for payment of First Bank's allowed secured claim pursuant to 11 U.S.C. section 1191(b), (c)(1) (incorporating 11 U.S.C. section 1129(b)(2)(A)); and -- pay nothing on account of First Bank's substantial allowed unsecured claim or to the holders of all other allowed unsecured claims. According to Judge Frank, the case does not resemble the classic fact pattern that Congress designed section1111(b) to prevent. First Bank is not a secured creditor being cashed out during a temporary decline in the value of its collateral, with the Debtor seeking to retain such collateral and obtain the windfall benefit of a market correction in the foreseeable appreciation that restores value to the collateral. If anything, the evidence indicates that the value of First Bank's collateral -- the Debtor entity as currently structured -- may be permanently contracted. While some benefit in purchasing a fitness entity like the Debtor as a going concern would be derived from the ongoing nature of its operations and a paying base of customers, Judge Frank credited the testimony and report regarding the fundamental changes that fitness centers will likely need to implement to be profitable in the post-COVID-19 world. These changes, such as new social distancing and sterilization rules, smaller in-person class sizes, and greater provision of remote workouts, could represent a fundamental shift in the bundle of fitness services that the Debtor had offered to its former customer base. And, it is not at all clear to Judge Frank that the same base of consumers that paid for the Debtor's pre-COVID-19 fitness services would continue to do so after such changes are implemented. Thus, the depressed enterprise value of the Debtor and the need for significant retooling and effort to rebuild the business from the ground up, separates this case from cases involving collateral that decline and then rise again purely for market forces. Summing the situation up, Judge Frank said the Debtor's financial difficulties prior to the commencement of this bankruptcy case in January 2020, as well as the effect of the COVID-19 pandemic that struck in March 2020, have caused a precipitous decline in the value of the Debtor's business and First Bank's lien position. It is clear that the entire fitness industry faces an uncertain future, and there is no quick rebound in sight that would provide the Debtor with a windfall. The best evidence indicates that if the Debtor's business can survive at all, its value will not increase rapidly in the foreseeable future; at best, any increase will occur through gradual growth. In the uncertain event that this growth even occurs, it probably will be attributable to some combination of market forces, the entrepreneurial efforts and acumen of the Debtor's principal and, perhaps, the investment of additional capital. These circumstances support a more elastic application of the term "inconsequential value" in section1111(b)(1)(B)(i). To some degree also, the Debtor's election to reorganize under subchapter V and the purposes and policies underlying the SBRA influence my determination of the level of value that is "inconsequential." The purpose of the SBRA is "to broaden the opportunity for small businesses to successfully utilize the benefits of chapter 11 of the Bankruptcy Code." In light of current economic conditions, the future prospects in the fitness industry and the Debtor's status as a small business debtor under subchapter V, permitting the Debtor to stay in business by bifurcating the severely undersecured First Bank claim, providing for its allowed secured claim, as determined by operation of 11 U.S.C. section 506(a), and paying its unsecured creditors only the amount that its projected disposable income for three to five years permits is consistent with both the explicit confirmation standards of subchapter V and the underlying purpose of the SBRA. Further, to the extent the First Bank is using the section 1111(b) Election as a device to block confirmation and compel the Debtor to liquidate, that only underscores the inconsequential value of its interest in the Debtor's property. If the Debtor does not reorganize, its property will be liquidated and the liquidation value of the property -- here, approximately $30,000 -- will be the actual value First Bank will realize. Surely, a receipt of $30,000 on a $917,000 debt is "almost, but not quite, out of the money." Admittedly, when valuing the Debtor's property as a going concern, determining the value of the assets to be $80,000 or 8.2% of the outstanding debt, the issue is a closer call. Nevertheless, the Court found that value is sufficiently marginal to preclude First Bank from making the section 1111(b) election. A copy of the Court's Amended Opinion dated August 7, 2020 is available at https://bit.ly/2QK3987 from Leagle.com. About Body Transit Body Transit, Inc., d/b/a Rascals Fitness, is a locally owned and operated fitness center offering gym memberships. Rascals Fitness offers sports-specific training for youth and specializes in goal-oriented fitness, such as weight loss and toning. Marc Polignano founded the company in 2007. The company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 20-10014) on Jan. 2, 2020. In the petition signed by Marc Polignano, president, the Debtor was estimated to have between $50,000 and $100,000 in assets, and between $10 million and $50 million in liabilities. Judge Eric L. Frank is assigned to the case. Center City Law Offices, LLC, serves as the Debtor's counsel. BOY SCOUTS: Suit vs Hartford Remanded to Dallas State Court ----------------------------------------------------------- District Judge Jane J. Boyle denied the Defendants' motion to transfer venue and granted the Plaintiffs' motion for abstention and remand in the case captioned BOY SCOUTS OF AMERICA; CONNECTICUT YANKEE COUNCIL; SPIRIT OF ADVENTURE COUNCIL; ALOHA COUNCIL; and CASCADE PACIFIC COUNCIL, Plaintiffs, v. THE HARTFORD ACCIDENT & INDEMNITY COMPANY and FIRST STATE INSURANCE COMPANY, Defendants, Civil Action No. 3:19-CV-1318-B (N.D. Tex.). The case is remanded to the Dallas County district court. The case is an insurance-coverage dispute that arises out of sexual-assault lawsuits filed against Boy Scouts of America and several of its local councils. Boy Scouts of America is a well-known youth-development organization that operates across the country. The Boy Scouts works with local organizations to implement its scouting program. These organizations -- often churches, clubs, or other educational groups -- are supported by local councils. Boy Scouts of America and several of its local state councils filed this lawsuit in Texas state court against Defendants -- The Hartford Accident and Indemnity Company and First State Insurance Company -- for the improper denial of coverage under various general and excess liability policies issued by Hartford. The Boy Scouts maintains a "comprehensive, broad insurance program" for "its many activities and local councils throughout the country[.]" Relevant to this case, the Boy Scouts purchased several general liability, umbrella, and excess liability insurance policies from Hartford. Under the policies, Hartford agreed to cover sums that the Boy Scouts would be "obligated to pay as damages because of personal injury. . . ." Hartford also agreed to defend and indemnify the insured in personal injury suits. Recently, the Boy Scouts and its local councils have been sued by various youth participants for sexual-abuse-related injuries suffered while participating in various scouting programs. These sexual-assault victims generally allege that the Boy Scouts and the respective local councils were negligent in failing to prevent the abuse. The Boy Scouts and the local councils alleged that some of these underlying sexual-abuse lawsuits are covered by their insurance policies with Hartford. They further alleged that they provided Hartford with notice of these lawsuits but that Hartford has denied its coverage obligations under the policies, including coverage for defense costs and indemnity payments associated with these lawsuits. On June 5, 2018, the Boy Scouts and local councils filed their Original Petition against Hartford in the District Court for the 95th Judicial District of Dallas County, Texas. Plaintiffs asserted the following claims against Hartford: (1) declaratory judgment; (2) breach of contract; and (3) violations of Chapter 542 of the Texas Insurance Code. The case progressed in state court until May 31, 2019, when Hartford filed a notice of removal in the District Court. In its notice of removal, Hartford argued that the Court may exercise subject matter jurisdiction over this case under 28 U.S.C. section 1332, because although Connecticut Council and Hartford are citizens of Connecticut, Connecticut Council was improperly joined and thus its citizenship should not be considered for the purpose of assessing the validity of diversity jurisdiction. Hartford alleged that, through initial discovery conducted in state court, it learned that Connecticut Council did not have a justiciable claim against Hartford in this action. On June 21, 2019, the Plaintiffs filed a motion to remand the case to state court on the ground that the Connecticut Council was properly joined and therefore diversity of citizenship did not exist. However, while the motion was pending, the Boy Scouts filed a Chapter 11 case in the United States Bankruptcy Court for the District of Delaware. Defendants asserted that because of the bankruptcy, this Court has an independent basis for jurisdiction over this matter because it is "related to" to a Chapter 11 case. On March 10, 2020, the Court denied the Plaintiffs' motion to remand. Although the Court agreed with the Plaintiffs that Connecticut Council was not an improperly joined party and thus the Court lacked diversity jurisdiction, the Court denied the Plaintiffs' motion on the basis that the Boy Scouts' bankruptcy proceeding seemed to provide the Court with "related to" jurisdiction over this matter. However, as the proper vehicle to resolve the viability of this new jurisdictional ground was not before the Court, the Court denied the Plaintiffs' motion without prejudice to refiling a second motion to remand based on "related to" jurisdiction (or the lack thereof). The Court also advised the parties that it was interested in hearing arguments on abstention and venue. The Court ordered Plaintiffs to file their second motion to remand, if they so desired, on or before March 31, 2020. On March 26, 2020, the Defendants filed a motion to transfer venue to the U.S. District Court for the District of Delaware. In this motion, the Defendants argued that the bankruptcy court administering the Boy Scouts' bankruptcy case would be better suited to resolve the claims at issue here. The Defendants assert that this Court can effect a transfer under 28 U.S.C. Sec. 1412, which provides that "a district court may transfer a case or proceeding under title 11 to a district court for another district, in the interest of justice or for the convenience of the parties." On March 31, 2020, the Plaintiffs filed a response to the Defendants' motion to transfer, combined with their own motion for abstention and remand. First, the Plaintiffs asserted that mandatory abstention under 28 U.S.C. section 1334(c)(2) applies, requiring the District Court to remand the case back to Texas state court. Next, Plaintiffs argued that the Court also has a basis to remand the case under 28 U.S.C. section 1334(c)(1), which provides for permissive abstention, and section 1452(b), which provides for equitable remand. Finally, Plaintiffs responded to Defendants' argument that a transfer would be appropriate in this case -- Plaintiffs asserted that (1) mandatory abstention should be applied in the first instance before a transfer; (2) Delaware is not the most convenient forum; and (3) transfer to Delaware would not serve the interest of justice. The Boy Scouts -- as the debtor in the bankruptcy proceeding -- believed that Texas state court would still be the most convenient forum. According to Judge Boyle, the party seeking mandatory abstention must show that: (1) the claim has no independent basis for federal jurisdiction, other than section 1334(b); (2) the claim is a non-core proceeding, i.e., it is related or in a case under title 11; (3) an action has been commenced in state court; and (4) the action could be adjudicated timely in state court. Hartford either conceded or failed to respond to the Plaintiffs' contention that the first three factors are satisfied. Regardless, the Plaintiffs have met these factors. Judge Boyle found that the action is not a "core" proceeding. "Mandatory abstention applies only to non-core proceedings -- that is, proceedings 'related to a case under title 11,' but not 'arising under title 11, or arising in a case under title 11.'" Thus, according to the District Court, if the proceeding involves a right created by federal bankruptcy law or is one that would arise only in bankruptcy, it is a core proceeding. The Plaintiffs argued the case is non-core, and Hartford again did not dispute this characterization, Judge Boyle said. Based on Plaintiffs' arguments and the applicable law, the District Court has no trouble concluding that this pre-petition insurance coverage action is a non-core proceeding as it does not invoke a substantive right created by federal bankruptcy law and is a case that can exist outside of bankruptcy. Turning to the third factor, Judge Boyle said the action was undisputedly commenced in state court and then removed to the District Court. The District Court found that the Plaintiffs have satisfied this factor as well. The District Court also found that the Plaintiffs have presented sufficient evidence to satisfy the fourth factor. To start, as Plaintiffs pointed out, the Dallas state court had made significant progress in the case in the one year that it was before the court. The parties had sent out and nearly completed written discovery, and a motion for summary judgment was ripe on the Number of Occurrences issue, which both parties admitted is a key issue in this dispute. On remand, the Texas state court will be ready to pick up where it left off when Hartford removed this case. And after the Number of Occurrences issue is resolved at summary judgment, the court will be able to proceed to trial on Plaintiffs' remaining bad-faith claim. The trial court had set a trial date for April 13, 2020, before Hartford removed the case. As Plaintiffs have offered, the Texas Office of Court Administration reports that in 2019, the Dallas state courts disposed of 79% of their cases in less than one year, with only 9% of cases taking longer than 18 months to resolve. This is more than sufficient to show that a Dallas state court can timely adjudicate this action, Judge Boyle said. A copy of the Court's Memorandum Opinion and Order dated August 6, 2020 is available at https://bit.ly/31Do4zN from Leagle.com. About the Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets at least $500 million in liabilities as of the bankruptcy filing. The Debtors tapped Sidley Austin LLP as general bankruptcy counsel; Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel; and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. BRIDGEWATER HOSPITALITY: Adcon Buying Houston Property for $4.25M ----------------------------------------------------------------- Bridgewater Hospitality, LLC, asks the U.S. Bankruptcy Court for the Southern District of Texas to authorize the sale of the real property located at 220 Greens Landing Drive, Houston, Texas and the adjacent unimproved land to Adcon Petroleum, LLC for $4.25 million. The Debtor owns the Property. It is currently under a revised Commercial Earnest Money Contract with the Buyer, an unrelated third party. The Debtor has been trying to find a buyer who would payoff Guaranty Bank & Trust, N.A. in full but has been unable to locate such a buyer. The Debtor proposes to sell the Property to the Buyer for $4.25 million to be at closing. The terms of the revised Contract do not affect the purchase price. The sale will be free and clear of all liens, claims and encumbrances, and such liens, claims and encumbrances will attach to the sales proceeds. The sales proceeds will be held by the title company pending an order of distribution approved by the Court. It is a short sale. Guaranty Bank has indicated it is willing to accept less than the amount owed on its loan. It claims a lien on the Property in excess of $5,118,358. The Property is also encumbered with liens to the taxing authorities for 2019 and 2020 ad valorem taxes. The reasonable and necessary closing costs associated with the sale will be paid at the time of closing along with the U.S. Trustee's fees and any approved legal fees. The Debtor may also seek payment of a reasonable Buyer's Broker's fee upon successful closing of the sale pursuant to the terms of the Earnest Money Contract; however, the Debtor is not aware of any broker at this time. The Debtor asks that the 14-day period following the entry of an Order allowing the sale be waived. The Contract does include a provision requiring the Buyer's deposit in trust of earnest money in the amount of $25,000 within three days of execution of the Contract by the Buyer and the Seller and approval of the Court. A hearing on the Motion is set for Sept. 2, 2020 at 11:00 a.m. Objections, if any, must be filed within 21 days from the date of service. A copy of the Contract is available at https://tinyurl.com/y29ogdgw from PacerMonitor.com free of charge. About Bridgewater Hospitality Bridgewater Hospitality, LLC, is a privately held company in the traveller accommodation industry. Bridgewater Hospitality filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31546) on March 2, 2020. The petition was signed by Prashant Patel, manager and general partner. At the time of filing, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Joyce Lindauer, Esq. at JOYCE W. LINDAUER ATTORNEY, PLLC, is the Debtor's counsel. CALCEUS ACQUISITION: S&P Affirms B ICR; Ratings Off Watch Negative ------------------------------------------------------------------ S&P Global Ratings affirmed all of its ratings on U.S.-based designer, marketer, and distributor of shoes, handbags, and accessories Calceus Acquisition Inc., including the 'B' issuer credit rating, and removed them from CreditWatch, where S&P placed them with negative implications on April 10, 2020. The outlook is negative. "The CreditWatch resolution reflects our expectation for improvement of the company's depressed credit metrics in the second half of fiscal 2021, and adequate liquidity cushion to withstand an elevated cash burn rate," S&P said. While S&P expects the COVID-19 pandemic's impact on retail operations and consumer demand will weigh heavily on the company's operating results in upcoming quarters, the rating agency believes revenue stabilization, and margin expansion will result in significant recovery of credit metrics by fiscal year-end 2022. As evidenced by strong double-digit growth through the first three quarters of fiscal 2020, S&P believes the company's brand and products resonate with consumers, driven by its unique "casual-but-professional" offerings. S&P expects sequential sales growth to return in the latter half of fiscal 2021 (ending May 29), propelled by normalizing retail operating conditions, healthier consumer confidence, and e-commerce growth. Additionally, S&P expects margins to expand--but not return to pre-pandemic levels--through a combination of lower promotional activity, and higher direct-to-consumer sales. As such, S&P forecasts a decline in adjusted leverage to the high-4x by the end of the fiscal year ended May 2022, while FOCF improves significantly to about $40 million. Calceus' recent issuance of $75 million of senior secured notes provides it with additional liquidity cushion to withstand an elevated cash burn rate. The company finished the fiscal year ended May 30, 2020, with about $130 million of cash, in part from drawing down $87 million on its $115 million ABL. The net proceeds from the $75 million notes issuance in June 2020 will further enhance liquidity. "While we expect the company to face an elevated cash burn because of weak retail and macroeconomic conditions in upcoming quarters, we believe Calceus' liquidity, particularly after the notes issuance, should prove adequate," S&P said. "Additionally, we expect the company to use existing cash to pay down the ABL in fiscal 2021. As such, we do not expect the springing 1x fixed-charge covenant governing the ABL to be effective over the next 12 months," the rating agency said. S&P expects a sharp deterioration of comparable sales and margin in fiscal 2021 will result in weak credit metrics, with downside risk if the economy does not recover. While a large majority of the company's stores, as well as many of its customers' doors, have reopened, S&P expects brick-and-mortar shopping activity and consumer demand will be below pre-pandemic levels while infection concerns and a weak macro-economic environment persist. Additionally, S&P believes the retail environment will be highly promotional, with the company working to clear-through its dress inventory; the shift to more casual footwear having been accelerated by the higher adoption of remote work. As a result, S&P expects full-year fiscal 2021 sales to drop approximately 25%, while the adjusted margin erodes to 12%, 100 basis points further from depressed fiscal 2020 levels. At this level of declines, S&P forecasts that adjusted leverage will increase to about 8x by fiscal year-end 2021, a significant spike from 2020 leverage of 5.8x. Additionally, S&P expects the company to generate negative free operating cash flow, hampered by weak earnings and working capital outflow, prior to turning notably positive in 2022. "The negative outlook reflects the potential that we could lower the ratings over the next few quarters if the company performs below our expectations, such that we believe it could prevent a meaningful improvement in fiscal 2022 credit metrics and continuing cash burn," S&P said. "We could lower the rating if we expect leverage will remain above 7x on a sustained basis, or if we forecast that the company will not generate FOCF of around $10 million in fiscal 2022. This could result from prolonged periods of weak consumer demand or promotional activity, such that sales and margin remains at depressed levels," the rating agency said. S&P could revise the outlook to stable if Calceus' sales and earnings prospects improve such that the rating agency believes the company can maintain leverage below 7x, and improve its fixed-charge coverage ratio above 1.5x. "This could occur if the company performs to our expectations in fiscal 2022 due to a stabilization of operating results," the rating agency said. CARE FOR LIFE: Unsecureds to Recover 1% in Over 50 Months in Plan ----------------------------------------------------------------- Care for Life Home Health, Inc., filed an Amended Plan and an Amended Disclosure Statement on July 31, 2020. Class 5 Non-priority unsecured creditors (convenience class). The amount due to the creditors in this class are too small to warrant monthly payments and will be paid in full on the effective date of the Plan in the amount of $796.18. This amount represents 1% of the amount owed to the Class 5 creditors. Class 6 Non-priority unsecured creditors. This class shall be paid 1% of the amount owed to it over 50 months. This amounts to a total of $8,190 which is $163.81 per month for 50 months. Class 7 Equity security holders of the Debtor. Since the Plan does not propose to pay all claims in full, either the equity holders cannot retain the equity in the Reorganized Debtor or new value must be contributed to the estate. The shareholders are choosing to add new value to the estate. To do so, the Debtor held an auction of the equity in the Reorganized Debtor where the current shareholders, creditors, and third parties had an option to bid on the equity in the Reorganized Debtor. This notice was published on May 20, 2020 and Mia Pacheco placed the first and only bid at $2,500 by placing the only bid, she shall have the right to become the owner of all of the equity interests of the Reorganized Debtor. In order to add sufficient value to the Reorganized Debtor, Mia Pacheco has agreed to contribute $1,000 per month of new value instead of a one time $2,500 payment. A full-text copy of the Amended Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y4283bd7 from PacerMonitor at no charge. Attorney for the Plan Proponent: Ben Schneider 8424 Skokie Blvd., Suite 200 Skokie, IL 60077 Tel: 847-933-0300 E-mail: ben@windycitylawgroup.com About Care For Life Home Health Based in South Elgin, Ill., Care For Life Home Health, Inc. filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 19-33113) on Nov. 21, 2019, listing less than $1 million in both assets and liabilities. Ben L Schneider, Esq., at Schneider & Stone, is the Debtor's legal counsel. CHENIERE ENERGY: S&P Rates $1BB Senior Notes 'BB' ------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to U.S.-based liquefied natural gas (LNG) developer Cheniere Energy Inc.'s (CEI) $1 billion senior notes due in 2028. The company plans to use the proceeds from the financing primarily toward repayment of its existing CEI term loan due in 2023 and balance toward payment of related transaction fees and expenses. While the notes will initially be secured, the indenture contains provisions for the security to fall away once the CEI term loan has been completely refinanced. Accordingly, S&P is rating the new notes on an unsecured basis. The 'BB' issue-level rating and the '3' recovery rating on the bonds due in 2028 reflect its expectation that lenders would receive meaningful (50%% to 70%; rounded estimate: 50%) recovery if a payment default occurs. The issuer credit rating and the rating on the senior secured revolver remain unchanged. Key analytical factors: -- S&P's simulated default scenario for CEI contemplates a default arising in 2025 from a prolonged period of weak LNG prices, which could pressure the company's cash flows; despite generated by a diverse portfolio of long-term take-or-pay style contracts with investment-grade counterparties. The default could also arise because CEI relies on its subsidiaries for cash flow, which it receives after debt service at the subsidiary level. -- S&P's analysis assumes that assets at SPL and CCH are pledged to their respective nonrecourse debt; therefore, its recovery analysis excludes EBITDA from those entities but includes dividends from them. In addition, it has not included the corporate debt of Cheniere Energy Partners L.P. (CQP), because it has looked at distributions from CQP post debt service. -- S&P's analysis assumes 85% of the revolving credit facility is drawn. -- S&P makes a 65% operating adjustment, reflecting an EBITDA decline of about 85%. -- S&P's analysis assumes all debt has six months' interest outstanding at default. Simulated default assumptions: -- Simulated year of default: 2025 -- EBITDA at emergence: $452 million (after operational adjustment) -- EBITDA multiple: 7x (in line with midstream peers without direct commodity price exposure) -- All debt has six months' interest outstanding at default Simplified waterfall: -- Net enterprise value after 5% administrative costs: $3 billion -- Secured first-lien debt: $2.1 billion -- Recovery expectations: 90%-100% (rounded estimate 95%) -- Total value available to unsecured claims: $904 million -- Senior unsecured debt: $1.7 billion -- Recovery expectations: 50%-70% (rounded estimate 50%) CHISHOLM OIL: Sept. 23 Plan Confirmation Hearing Set ---------------------------------------------------- On July 1, 2020, Chisholm Oil and Gas Operating, LLC and its debtor affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a motion for entry of an order approving the Disclosure Statement and scheduling the Confirmation Hearing to consider confirmation of the Plan. On August 4, 2020, Judge Brenda L. Shannon granted the motion and ordered that: * The Disclosure Statement contains adequate information in accordance with section 1125 of the Bankruptcy Code and is approved. * Aug. 29, 2020 at 4:00 p.m. shall be the deadline to file and serve any motion requesting temporary allowance of a Claim for purposes of voting. * The Solicitation Packages are approved. * Sept. 11, 2020 at 4:00 p.m. is the voting deadline. * Sept. 23, 2020 at 10:00 a.m. is the Confirmation Hearing. * Sept. 8, 2020 at 4:00 p.m. is the deadline to object or respond to confirmation of the Plan. * Sept. 18, 2020 at 4:00 p.m. is the deadline for Debtors to file and serve replies or an omnibus reply to any such objections along with their brief in support of confirmation of the Plan. A full-text copy of the order dated August 4, 2020, is available at https://tinyurl.com/y6lpf7oe from PacerMonitor at no charge. About Chisholm Oil and Gas Chisholm is an exploration and production company focused on acquiring, developing, and producing oil and natural gas assets in the Anarkado Basin in Oklahoma in an area commonly referred to as the Sooner Trend Anadarko Basin Canadian and Kingfisher County (the "STACK"). Chisholm Oil and Gas Operating, LLC, based in Tulsa, Oklahoma, and its affiliates sought Chapter 11 protection (Bankr. Lead Case No. 20-11593) on June 17, 2020. In the petition signed by CFO Michael Rigg, the Debtors were estimated to have $1 billion to $10 billion in assets and $500 million to $1 billion in liabilities. The Hon. Brendan Linehan Shannon presides over the case. The Debtors tapped WEIL, GOTSHAL & MANGES LLP, and YOUNG CONAWAY STARGATT & TAYLOR, LLP, as counsel; EVERCORE GROUP LLC, as investment banker; ALVAREZ & MARSAL NORTH AMERICA, LLC, as financial advisor; OMNI AGENT SOLUTIONS, as claims and noticing agent. CHRISTOPHER S. HARRISON: Court Says Chapter 11 Trustee Warranted ---------------------------------------------------------------- Bankruptcy Judge Stephanie Stephani W. Humrickhouse issued a supplemental opinion regarding her decision to appoint a Chapter 11 Trustee in Christopher S. Harrison's bankruptcy case. The matter came on to be heard upon the Emergency Motion for Entry of an Order Appointing Chapter 11 Trustee filed by Mouzon Bass III, Ebenconcepts, Inc., Orchestrate Hr, Inc., Vivature, Inc., and Vologic, Inc. (the "Bass Parties") on June 5, 2020. Hearings were held in Raleigh, North Carolina on June 16, 17, 19, 2020. The court took the matter under advisement at the conclusion of the hearing. On June 24, 2020, the court entered an Order Appointing Chapter 11 Trustee, pursuant to section 1104(a), which provided that the specific grounds for the appointment of the chapter 11 Trustee would be set forth in a later supplemental full opinion. Christopher S. Harrison filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code on Dec. 13, 2019. An initial section 341 meeting was conducted in the case on Jan. 22, 2020 and at a continued section 341 meeting on May 13. The debtor filed his Schedules and Statements of Financial Affairs on Dec. 23, 2019. They were amended on Jan. 7, 2020 and again on Jan. 21, March 10, and March 30. By order dated Dec. 16, 2019, the debtor was directed to file a plan and disclosure statement by March 13, 2021. The due date for the filing of a plan and disclosure statement was later amended to March 12 by order dated Dec. 19. The debtor sought and received additional extensions to file a plan and disclosure statement until August 11. The debtor ultimately filed his Plan and Disclosure Statement on June 12. On June 5, 2020, the Bass Parties filed an Emergency Motion to Appoint Trustee. At the hearings held on the Motion, the testimony of the debtor, the testimony of Patrick George Adams, and many documents were received into evidence. At trial, the debtor attempted to explain both his pre- and post- petition behavior. His willingness to offer explanations and even apologies have been taken into consideration by the court, but cannot offset the clear and convincing evidence of both cause for appointment of a trustee and a finding and conclusion that such appointment would be in the best interests of the creditors and the estate. The Bass Parties have alleged that both the debtor's pre-petition and post-petition conduct warrant the appointment of a trustee. The court and others have held that more focus and weight should be given to post-petition conduct when analyzing the propriety of appointing a trustee. The debtor maintained that his post-petition behavior has been exemplary, and the fact that the debtor has not "lived large" post-petition should carry the day. The court did not agree with the debtor's characterization of his post-petition conduct. Additionally, even if the post-petition "irregularities" and "deficiencies" recited by the Bass Parties might not, in and of themselves, constitute grounds for the appointment of a trustee, when coupled with the pre-petition "list of horribles" alleged by the Bass Parties and shown at trial, the conclusion that the appointment of a trustee is in the best interest of creditors and warranted for cause, is inescapable. The Bass Parties cite post-petition conduct in support of their motion: 1. Failure to file accurate and honest Schedules and Statements of Financial Affairs; 2. Delay in amending Schedules and Statements of Financial Affairs to accurately and honestly depict his financial situation; 3. Delay in amending tax returns, including delay in providing important information to professionals retained by the debtor; 4. Failure to timely and fully comply with Rule 2004 requests; 5. Failure to honestly, accurately, and credibly testify at his 341 meetings; and 6. Reluctance to pursue avoidance and recovery actions against friends and family members. According to Judge Humrickhouse, the debtor sought and obtained a two-week extension to file his Schedules and Statements of Financial Affairs and amended those documents four times prior to trial. However, the debtor never fully, timely and accurately amended his Schedules and Statements of Financial Affairs through the date of the hearings. This is especially significant because the primary purpose of this chapter 11 is to deal with the impending multi-million-dollar income tax liability of the debtor. The debtor should have been fully aware of the necessity to accurately reflect his financial situation on his bankruptcy pleadings at the onset of the case. That information is vital in any bankruptcy case, but particularly here. Unannotated entries of "Unknown" and "Various" do not satisfy a debtor's obligation to be honest, forthcoming, and credible. Judge Humrickhouse added that the plain language of section 1104(a)(1) allows the court to consider the pre-petition conduct of the debtor in determining whether the appointment of a trustee is appropriate. The pre-petition conduct of the debtor clearly and unequivocally supports a finding of cause -- at a minimum, on the basis of incompetence and gross mismanagement, and under the worst construction, on the basis of fraud or dishonesty -- for the appointment of a trustee. The debtor testified that he was earnestly trying to reconcile his tax situation and make amends to the IRS and his creditors. However earnest the debtor may be, the Court sees it as much too little, much too late. Cause certainly exists for the appointment of a trustee. Furthermore, Judge Humrickhouse held that it is in the best interests of the estate and creditors that a trustee be appointed. The vast majority of property that could be used to satisfy the claims of creditors is presently in the possession and/or control of the debtor's wife: jewelry and real property. There is an inherent reluctance of a debtor to sue his wife to regain possession of and liquidate her property, notwithstanding, his testimony that he would ask her to do so and that she agreed to return some jewelry. She did not testify at trial nor did she sign the Plan. The Plan does not provide for the recovery of the property from the debtor's wife. Instead, the Plan sets out a means for execution that is based largely on the sale of the debtor's interest in Ebenconcepts -- relying on a disputed valuation of such interest -- and possible recovery from an avoidance action against Ebenconcepts that is being investigated. The Plan as filed shows no present intent on the part of the debtor to devote the recovery of valuable property in the hands of his wife to the payment of his creditors. The objective analysis of a trustee is therefore necessary because the chapter 11 process with the debtor remaining at the helm under the circumstances is insufficient to protect the estate and creditors. Judge Humrickhouse, thus, found that appointment of a trustee is warranted. A copy of the Court's Supplemental Opinion is available at https://bit.ly/32B6mft from Leagle.com. Christopher S. Harrison sought Chapter 11 protection (Bankr. E.D. N.C. Case No. 19-05730) on Dec. 13, 2019. The Debtor tapped William P. Janvier, Esq., at Janvier Law Firm, PLLC, as counsel CLEARPOINT NEURO: D'Alessandro Will Succeed Hurwitz as CFO ---------------------------------------------------------- ClearPoint Neuro, Inc. reports that global medical device financial executive Danilo D'Alessandro has been appointed the Company's next Chief Financial Officer succeeding Harold A. (Hal) Hurwitz who plans to retire in 2021. Mr. D'Alessandro will join the Company on Sept. 29, 2020 initially as vice president of finance. Mr. D'Alessandro will assume the CFO position on Jan. 1, 2021. Mr. D'Alessandro has an extensive background in global corporate finance, financial planning and growth, and mergers & acquisitions (M&A). Mr. D'Alessandro most recently served as the global Head of Finance of the Image Guided Therapy Devices division at Philips, a business unit representing cumulative inorganice investments of approximately $4 bn and more than 3,000 employees. Over the past five years (2015-2020), he led the finance and accounting function of the Image Guided Therapy Devices division and was instrumental in driving double-digit growth and a significant step-up in profitability over the course of his tenure. Prior to that, he held a variety of senior roles at Philips in Finance and M&A, both in the United States and the Netherlands. Mr. D'Alessandro completed an Undergraduate degree in Institutions and Financial Markets Management at Università Bocconi and a Master of Science in Accounting and Finance from the University of Bath. "We are very excited for both Hal and Danilo as they enter this next chapter of their lives and their careers," commented Joe Burnett, president and CEO of ClearPoint Neuro. "Hal has been a tremendous partner and friend over the past years, and his commitment and contributions have been invaluable to the Company and our accomplishments. In the last two years alone, we completed two positive financing rounds, restructured all of our debt out until 2025, renamed the Company to ClearPoint Neuro, Inc. (CLPT), uplisted CLPT to the Nasdaq Capital Market and initiated analyst coverage for the first time. These are feats that normally define a career, and we are excited for Hal's well-earned transition into an active retirement during which he will consult and perform external board services." "Danilo is the perfect fit for ClearPoint Neuro's next chapter," continued Burnett. "His industry expertise coupled with the rigor and discipline for management reporting learned at a sophisticated healthcare leader like Philips will serve us well as our business grows in both revenue and complexity. Our ambition to expand the ClearPoint portfolio globally is paramount and is complemented by Danilo's experience in International Markets and business development, including mergers and acquisitions. We are all excited to get started and know that Hal will be a terrific coach and mentor to ensure an effective transition." "I look forward to becoming a valuable member of the ClearPoint Neuro team," said Mr. D'Alessandro. "It is an honor to join at such an exciting inflection point of growth and to help in the development of innovative therapies for such an underserved patient population. We truly believe that we can help these patients and restore quality of life." Mr. D'Alessandro's base salary is $285,000, which is subject to adjustment at the discretion of the Compensation Committee, subject to certain limitations. Starting with the fiscal year commencing on Jan. 1, 2021 and for each year thereafter, the Employment Agreement provides that Mr. D'Alessandro is eligible to receive an annual incentive bonus based on a target of 35% of his annual base salary, subject to certain performance goals to be established by the Compensation Committee. The amount of the incentive bonus payable to Mr. D'Alessandro may be more or less than the target amount, depending on whether, and to what extent, applicable performance goals for such year have been achieved. About ClearPoint Neuro ClearPoint Neuro formerly MRI Interventions, Inc. -- http://www.clearpointneuro.com/-- is a medical device company that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain under direct, intra-procedural magnetic resonance imaging, or MRI, guidance. From its inception in 1998 to 2002, the Company deployed significant resources to fund its efforts to develop the foundational capabilities for enabling MRI-guided interventions and to build an intellectual property portfolio. In 2003, its focus shifted to identifying and building out commercial applications for the technologies it developed in prior years. Clearpoint recorded a net loss of $5.54 million for the year ended Dec. 31, 2019, compared to a net loss of $6.16 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $23.58 million in total assets, $20.82 million in total liabilities, and $2.76 million in total stockholders' equity. CLEARPOINT NEURO: Incurs $1.66 Million Net Loss in Second Quarter ----------------------------------------------------------------- ClearPoint Neuro, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.66 million on $2.48 million of total revenues for the three months ended June 30, 2020, compared to a net loss of $1.55 million on $2.61 million of total revenues for the three months ended June 30, 2019. For the six months ended June 30, 2020, the Company reported a net loss of $3.72 million on $5.59 million of total revenues compared to a net loss of $2.77 million on $5.08 million of total revenues for the same period last year. As of June 30, 2020, the Company had $23.03 million in total assets, $21.69 million in total liabilities, and $1.34 million in total stockholders' equity. The Company has incurred net losses since its inception, which has resulted in a cumulative deficit at June 30, 2020 of $116 million. In addition, the Company's use of cash from operations amounted to $4.0 million for the six months ended June 30, 2020 and $2.8 million for the year ended December 31, 2019. Since its inception, the Company has financed its operations principally from the sale of equity securities, the issuance of notes payable, product and service contracts and license arrangements. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1285550/000117152020000375/eps9162.htm About ClearPoint Neuro ClearPoint Neuro formerly MRI Interventions, Inc. -- http://www.clearpointneuro.com/-- is a medical device company that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain under direct, intra-procedural magnetic resonance imaging, or MRI, guidance. From its inception in 1998 to 2002, the Company deployed significant resources to fund its efforts to develop the foundational capabilities for enabling MRI-guided interventions and to build an intellectual property portfolio. In 2003, its focus shifted to identifying and building out commercial applications for the technologies it developed in prior years. Clearpoint recorded a net loss of $5.54 million for the year ended Dec. 31, 2019, compared to a net loss of $6.16 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $23.58 million in total assets, $20.82 million in total liabilities, and $2.76 million in total stockholders' equity. COMSTOCK MINING: Elects New Director; Sets Annual Meeting Date -------------------------------------------------------------- Judd B. Merrill, 49, has been elected to Comstock Mining Inc.'s Board of Directors. Mr. Merrill is currently the chief financial officer of Aqua Metals, Inc., a clean AquaRefining metal recycling technology, since 2018. Mr. Merrill brings extensive public company mining and clean mineral technology industry experience to Comstock. Prior to joining Aqua Metals, Mr. Merrill was the chief financial officer of Comstock, and the director of Finance & Accounting at Klondex Mines Ltd., a North American based gold and silver mining company that, prior to its acquisition by Hecla Mining Company was a $500 million, publicly traded company listed on the both New York and the Toronto Stock Exchanges. Mr. Merrill previously held financial management positions at Fronteer Gold Inc. and Newmont Mining Corporation. Mr. Merrill started his career as an auditor, working for the independent accounting firm of Deloitte and Touche. Mr. Corrado De Gasperis, executive chairman and CEO, said, "We are very pleased to welcome Judd Merrill to Comstock's Board of Directors. His mining, clean technology, financial and public company experience makes him a productive and valuable independent director for our shareholders, especially as we implement our precious-metal focused strategic plans and commercialize our environment-enhancing, clean mercury technologies." Mr. Merrill was previously employed by Comstock Mining Inc. for over six years, with financials positions of increasing responsibility, including chief financial officer and corporate secretary. Mr. Merrill has been away from Comstock for over three years and qualifies as an independent director and the Company looks forward to introducing him to its shareholders at the 2020 Annual Meeting of Shareholders. Annual Meeting The 2020 Annual Meeting of Shareholders is scheduled for Wednesday, Nov. 18, 2020, at the historic Brewery Arts Center, 449 W. King Street, Carson City, Nevada. The meeting will begin at 9:00 a.m., and will include an update on the Company's corporate alignment, geological developments and the gold industry. The 2020 Annual Meeting schedule for Nov. 18, 2020, is as follows: 8 a.m. – 9 a.m. - Continental Breakfast 9 a.m. – Noon - 2020 Annual Shareholders Meeting, Company Presentations, Q & A Lunch will be served at the Brewery Arts Center following the presentations. For the convenience of Shareholders, they may attend the Annual Meeting through a webcast at: www.virtualshareholdermeeting.com/LODE2020 Due to COVID-19 guidelines put forth by the State of Nevada, seating is limited for Shareholders and is based on a first-come, first-served basis by registering at the Company website: https://www.comstockmining.com/investors/asm2020/ The record date for the Annual Meeting is Sept. 24, 2020. Only shareholders of record at the close of business on Sept. 24, 2020, may vote at the meeting. The Company's proxy statement will be sent to shareholders of record and will describe the matters to be voted upon. About Comstock Mining Comstock Mining Inc. -- http://www.comstockmining.com/-- is a Nevada-based, gold and silver mining company with extensive, contiguous property in the Comstock District. The Company began acquiring properties in the Comstock District in 2003. Since then, the Company has consolidated a significant portion of the Comstock District, amassed the single largest known repository of historical and current geological data on the Comstock region, secured permits, built an infrastructure and completed its first phase of production. The Company continues evaluating and acquiring properties inside and outside the district expanding its footprint and exploring all of its existing and prospective opportunities for further exploration, development and mining. Comstock Mining recorded a net loss of $3.81 million for the year ended Dec. 31, 2019, compared to a net loss of $9.48 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $44.40 million in total assets, $16.76 million in total liabilities, and $27.63 million in total equity. Deloitte & Touche LLP, in Salt Lake City, Utah, the Company's auditor since 2011, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has incurred recurring losses and cash outflows from operations, has an accumulated deficit and has debt maturing within twelve months from the issuance date of the financial statements that raise substantial doubt about its ability to continue as a going concern. CONSOLIDATED COMMUNICATIONS: S&P Alters Outlook to Stable --------------------------------------------------------- S&P Global Ratings revised its outlook on Consolidated Communications Holdings Inc. to stable from negative and affirmed the 'B' issuer credit rating. S&P also assigned a 'B+' issue-level rating and '2' recovery rating to the cproposed first-lien senior secured credit facilities, which comprise a $250 million revolving credit facility due in 2025 and $1 billion first-lien term loan due in 2027, and the $1 billion proposed senior secured notes due in 2028. The '2' recovery rating indicated its expectation of substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default. Consolidated Communications Inc. is the issuer of the debt. "The stable outlook reflects our view that although weak economic conditions and secular industry declines should contribute to lower earnings over the next year, Consolidated's fiber-to-the-home network investments will help it moderate revenue declines over time while maintaining EBITDA margin in the 40% area such that adjusted leverage remains comfortably below 5x," S&P said. "The stable outlook reflects our view that although the top line remains under pressure, Consolidated is positioned to improve revenue and EBITDA growth trends over the next couple of years, while its recapitalization will eliminate near term refinancing risk," the rating agency said. Despite intense competition for broadband service in its markets from incumbent cable operators, which overlap with over 70% of the company's footprint, and the continued loss of legacy voice and video customers, Consolidated's financial results have improved in recent quarters due to broadband and data revenue growth and operating expense reductions. At the same time, the company reduced leverage to a more manageable level, which combined with additional balance sheet cash from the $350 million initial investment from Searchlight provides meaningful capacity to invest in its network, including FTTH upgrades, and increase its broadband penetration and market share. Further, assuming a successful recapitalization, Consolidated's nearest debt maturity will be in 2025, when its revolving credit facility comes due, limiting near-term refinancing risks." Investment from Searchlight results in a capital structure that can support higher capital spending to accelerate fiber deployment, enhancing Consolidated's ability to compete with cable broadband in its more competitive markets. Cable providers have upgraded their networks to DOCSIS 3.1 and can offer download speeds of 1 gigabit per second (Gbps). Consolidated responded by expanding its 1 Gbps passings in certain markets, although approximately 95% of its Northern New England footprint is still served by copper due to capital spending constraints, which contributed to revenue and EBITDA declines of 4.5% and 2.6%, respectively, in 2019. The $425 million investment from Searchlight helps alleviate pressure to further reduce debt and provides added liquidity to support the company's $450 million fiber buildout program, which is targeting FTTH upgrades to 1 million homes in New England. The transaction does not improve Consolidated's S&P-adjusted credit metrics since the rating agency treats the investment as debt based on its criteria for hybrid capital. Consolidated plans to make fiber available to more than 60% of its addressable market in New England over five years, up from about 6% of its existing footprint that is FTTH enabled. S&P believes these investments will allow the company to better compete with cable operators such as Charter and Comcast, drive broadband market share gains, and enable longer-term revenue growth. Consolidated's prudent allocation of capital over the past year increased financial flexibility. Since Consolidated eliminated its $110 million annual common dividend in April 2019 and committed its free cash flow to debt reduction, it targeted reducing reported net debt to EBITDA below 4x by the end of 2020. Consolidated's net leverage was about 4.1x as of June 30, with solid prospects to meet its goal by the end of the year. Once leverage falls below 4x, S&P expects the company to reinvest the majority of its free cash flow into the business to support fiber deployment, reducing the need for external sources of funding over the near term. "The stable outlook reflects our view that although weak economic conditions and secular industry declines should contribute to lower revenue over the next year, Consolidated's FTTH network investments will help moderate revenue declines while maintaining its EBITDA margin in the 40% area such that adjusted leverage remains comfortably below 5x," S&P said. "We could lower the rating on Consolidated if the recession results in significantly higher churn among small to midsize business customers or increased bad debt expense from residential customers, which exacerbates already intense competition from cable providers, such that revenue and EBITDA declines accelerate and we expect leverage to increase to the 6x area longer term," the rating agency said. Over the longer term, S&P could raise its ratings on Consolidated if the company profitably captures significant broadband share in its markets while increasing EBITDA and free operating cash flow (FOCF). An upgrade would require Consolidated to sustain leverage below 5x and FOCF to debt above 5%. COUNTERPATH CORP: Appoints Interim Principal Financial Officer -------------------------------------------------------------- Counterpath Corporation appointed Srinivasa Janaswamy to act as the Company's interim vice president of finance, secretary, treasurer and principal financial officer and principal accounting officer, effective Sept. 16, 2020, while Karen Luk, the vice president of finance, secretary, treasurer and principal financial officer and principal accounting officer of the Company, is on maternity leave. Upon Ms. Luk's return from maternity leave, Ms. Luk will return to the position of vice president of finance, secretary, treasurer and principal financial officer and principal accounting officer. Mr. Janaswamy, age 54, brings more than fifteen years of accounting and finance experience working with publicly traded companies within Canada. From November 2019 to May 2020, he was the chief financial officer for D3 Securities Systems Inc., a Vancouver based private company in the cyber security space. From April 2015 to August 2019, he was the director of Finance at ABC Recycling Ltd., a Burnaby based company that primarily processes scrap metal. From December 2013 to March 2015, Mr. Janaswamy was the Director of Finance at Visier Inc., a Vancouver based technology company developing software for HR analytics. Prior to this, from December 2006 to December 2013, Mr. Janaswamy worked for the company as controller and director of Finance. Mr. Janaswamy is a Canadian designated Chartered Professional Accountant. He holds a Bachelor of Business Administration degree in Accounting and Finance obtained from Osmania University in India, and a Bachelor of Law degree from Osmania University in India. The Company has not been party to any transaction with Mr. Janaswamy since May 1, 2019, or any currently proposed transaction with Mr. Janaswamy in which we were or will be a participant and where the amount involved exceeds the lesser of US$120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which Mr. Janaswamy had or will have a direct or indirect material interest. About CounterPath Headquartered in British Columbia, Canada, CounterPath Corporation -- http://www.counterpath.com/-- designs, develops, and sells software and services that enable enterprises and telecommunication service providers to deliver Unified Communications & Collaborations (UCC) solutions to their end users. Its offerings include softphones that support HD voice/video calling, messaging, and presence from a wide range of call services and VoIP services, as well as hosted services for team voice, messaging, presence, video conferencing and screen sharing functionality, over Internet Protocol (IP) based networks. CounterPath reported a net loss of $1.10 million for the year ended April 30, 2020, compared to a net loss of $5.01 million for the year ended April 30, 2019. As of July 31, 2020, the Company had $13.48 million in total assets, $9.84 million in total liabilities, and $3.65 million in total stockholders' equity. BDO Canada LLP, in Vancouver, British Columbia, the Company's auditor since 2006, issued a "going concern" qualification in its report dated July 16, 2020, citing that the Company has incurred losses and has an accumulated deficit of $69,677,656 as of April 30, 2020. These events and conditions, along with other matters, raise substantial doubt about its ability to continue as a going concern. CREDIT ACCEPTANCE: Moody's Affirms Ba3 CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed the Ba3 long-term Corporate Family Rating (CFR) and senior unsecured rating of Credit Acceptance Corporation (CACC). The rating outlook remains stable. Affirmations: Issuer: Credit Acceptance Corporation Corporate Family Rating, Affirmed Ba3 Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 Outlook Actions: Issuer: Credit Acceptance Corporation Outlook, Remains Stable RATINGS RATIONALE The ratings affirmation reflects Moody's unchanged view of Credit Acceptance's ba3 standalone assessment, which is supported by continued strong profitability, capitalization, and liquidity, somewhat offset by a challenging operating conditions and high regulatory risk in subprime auto lending in the US (Government of United States of America, Aaa stable). The economic dislocation caused by the coronavirus pandemic poses unique challenges, prompting the firm to revise downwards its expected loan portfolio cash flows by roughly $200 million in the first quarter of 2020, which was driven by a variance of 0.9%, 1.5% and 1.9% of total contractual cash flows relative to pre-coronavirus collection forecasts for 2018, 2019 and 2020 loan vintages, respectively. And while loan collections have outperformed the downward revision made following first quarter, this is in part driven by a significant level of US government fiscal stimulus to consumers. Therefore, loan performance may deteriorate depending on the path of the recovery and the additional level of fiscal support to consumers, if any. However, given the ample cushion between expected collections and the amount Credit Acceptance advances to dealers for its loans, Moody's expects the firm to maintain strong earnings, and solid capitalization and liquidity in the next 12-18 months. While the firm reported an $84 million GAAP net loss for the first quarter of 2020 and $96 million in net income for the second quarter of 2020, down from $164 million during each of the corresponding periods during the prior year, the decline was driven largely by the implementation of the Current Expected Credit Losses (CECL) accounting standard on 1 January 2020. The firm's own adjusted results during the first two quarters of 2020, which are calculated similarly to pre-CECL GAAP results, corresponded to annualized return on assets of 9.6% and 8.5% for the first and second quarters of 2020, respectively. And while loan originations fell sharply during March and April, as coronavirus-related lockdowns took place and the economic environment deteriorated rapidly, the company reported a sharp increase in originations during the months following as lockdown measures have relaxed. The firm has also maintained solid capitalization, with tangible equity accounting for 28% of tangible managed assets at 30 June 2020, compared to 32% at 31 December 2019, with the decline driven by share repurchases in the first quarter of 2020; Credit Acceptance did not repurchase any shares in the second quarter of 2020. In addition, Credit Acceptance has ample liquidity, with over $800 million in availability under its revolver and warehouse facilities at 30 June 2020, which has since increased following a securitization transaction in the third quarter of 2020. Notwithstanding these positive developments in Moody's view, Credit Acceptances faces headwinds with respect to uncertainty regarding the economic environment, which is characterized by the ongoing coronavirus pandemic, and the regulatory environment. During the third quarter of 2020, the firm disclosed that it received subpoenas from the New Jersey and Maryland Attorneys General pertaining to its originations and collections practices and expanding both matters to include 39 other states and the District of Columbia. During the quarter the Massachusetts Attorney General also filed a lawsuit against the firm alleging that the company engaged in unfair and deceptive trade practices in subprime auto lending, debt collection and asset-backed securitization. While the outcome of these investigations is highly uncertain, as a subprime auto lender Credit Acceptance has been subject to a number of regulatory inquiries during recent years, though these have not to date resulted in material fines or a significant change to the firm's business practices. Nevertheless, there remains a high legal and regulatory risk, which is a factor in determining Credit Acceptance's standalone assessment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Credit Acceptance's ratings could be upgraded if the company is able to maintain its competitive position in the US subprime auto lending market and demonstrate stable asset quality, particularly with respect to its growing purchased loan program, while maintaining strong profitability and debt to equity below 2.5 times, adjusted for the impact of CECL. CACC's ratings could be downgraded if debt to equity on a CECL-adjusted basis increases beyond 2.5 times, or if profitability falls below 6.5% as measured by net income to tangible managed asset or if asset quality deteriorates. CACC's senior unsecured ratings could also be downgraded if the proportion of senior unsecured debt were to decline, increasing the risk of losses for these creditors due to lower protection from reduced debt volume. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. DAVE & BUSTER'S: At Risk of Going Bankrupt ------------------------------------------ Eliza Ronalds-Hannon of Bloomberg News reports that Dave & Buster's Entertainment Inc. is at risk of becoming bankrupt. The company started out in 1982 as a buddy business in Dallas, where the original Dave handled games and entertainment while Buster managed the kitchen. Almost 40 years later, founders David Corriveau and James "Buster" Corley are long gone but their chain endures: it's grown to 137 locations, gone through two different private equity owners and raised $94 million to pay down debt in a 2014 IPO. But debt is a problem once again for the good-times guys, and the company has warned it may need to file for Chapter 11 bankruptcy to restructure its obligations. Dave & Buster's Entertainment, Inc., (NASDAQ:PLAY), an owner and operator of entertainment and dining venues, said Sept. 11, 2020, said that in its second quarter 2020, which ended on August 2, 2020, second quarter comparable store sales decreased 87%, which was for the entire 115 comparable store sales base, 47 of which were closed. The Company’s second quarter 2020 financial results were severely impacted by the effects of the COVID-19 pandemic when compared against the results of the second quarter of 2019. As of March 20, 2020, all of the Company;s stores were temporarily closed in compliance with state-by-state COVID-19 mitigation mandates. The Company reopened 1 store on April 30, had re-opened 26 stores by the end of May, 66 stores by the end of June, and ended the second quarter with 84 re-opened stores in 27 states. As of September 9, the Company had reopened 89 stores, all operating under reduced hours and capacity limitations as dictated by each locality, new seating and game configurations to promote social distancing, a temporarily condensed food and beverage menu, and extensive incremental cleaning and sanitation procedures to protect the health and safety of guests and team members. About Dave & Buster's Entertainment Founded in 1982 and headquartered in Dallas, Texas, Dave & Buster's Entertainment, Inc., is the owner and operator of 136 venues in North America that combine entertainment and dining and offer customers the opportunity to "Eat Drink Play and Watch," all in one location. Dave & Buster's offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. Dave & Buster's currently has stores in 40 states, Puerto Rico, and Canada. DENBURY RESOURCES: Nears Emergence, "DEN" Stock to Trade at NYSE ---------------------------------------------------------------- Denbury Resources Inc. on July 31, 2020 was notified by the New York Stock Exchange ("NYSE") of its determination to commence proceedings to delist the Company's common stock from trading on the NYSE and as of July 31, 2020 to indefinitely suspend trading of the Company’s common stock on the NYSE. This suspension and delisting was done by the NYSE due to the Company's voluntary filing for reorganization under Chapter 11 of the Bankruptcy Code on July 30, 2020. Effective July 31, 2020, the Company's common stock commenced trading on the OTC Pink marketplace under the symbol "DNRCQ." Denbury Resources announced Sept. 4, 2020, that the United States Bankruptcy Court for the Southern District of Texas has confirmed its "pre-packaged" plan to restructure the Company's balance sheet and eliminate Denbury's $2.1 billion of bond debt (the "Plan"). Denbury Resources announced Sept. 15, 2020 that in connection with its expected near-term emergence from bankruptcy, the Company plans to change its corporate name to "Denbury Inc." Additionally, Denbury is currently preparing to list its new common stock in the reorganized Company for trading on the New York Stock Exchange under the ticker symbol "DEN," and expects trading in its stock to begin shortly following emergence. About Denbury Resources Headquartered in Plano, Texas, Denbury Resources Inc. -- http://www.denbury.com/--is an independent oil and natural gas company with onshore production and development activities in the Gulf Coast and Rocky Mountains regions. The Company's goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to carbon dioxide enhanced oil recovery (CO2 EOR) operations. Denbury filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-33801) on July 30, 2020. The Hon. David R. Jones oversees the case. At the time of filing, the Debtors have $4,607,091,000 in total assets and $3,117,646,000 in total debt as of March 31, 2020. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER L.L.P. as local bankruptcy counsel; EVERCORE GROUP L.L.C. as financial advisor; and ALVAREZ & MARSAL NORTH AMERICA, LLC as restructuring advisor. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims agent. EAS GRACELAND: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: EAS Graceland, LLC DBA Travelodgy by Wyndham Memphis Airport 1471 East Brooks Road Memphis, TN 38116 Business Description: EAS Graceland, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: September 15, 2020 Court: United States Bankruptcy Court Western District of Tennessee Case No.: 20-24484 Judge: Hon. David S. Kennedy Debtor's Counsel: Michael P. Coury, Esq. GLANKLER BROWN PLLC 6000 Poplar Ave Suite 400 Memphis, TN 38119 Tel: 901-525-1322 E-mail: mcoury@glankler.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Laure Marmontel, manager. A copy of the petition containing, among other items, is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XB6LR4I/EAS_Graceland_LLC__tnwbke-20-24484__0001.0.pdf?mcid=tGE4TAMA EASTERN NIAGARA: Pendyala Buying Lockport Property for $115K ------------------------------------------------------------ Eastern Niagara Hospital, Inc., asks the U.S. Bankruptcy Court for the Western District of New York to authorize the private sale of a small office building at 53 Elizabeth Drive, Lockport, New York to Prashant Pendyala, MD for $115,00, "as is, where is," free and clear of liens, claims and encumbrances. Since the inception of the Chapter 11 case, the Debtor, with the assistance of its counsel and financial advisors, have investigated and analyzed a number of strategies to preserve and maximize the value of its assets. It concluded that, under the circumstances, the best way to maximize the value of its assets for the benefit of its creditors is to conduct a private sale of the Property. The Debtor was approached by the Purchaser, a physician who would like to purchase the small office building at Elizabeth Drive for a price of $115,000. The Elizabeth Drive property was listed on the Debtor's schedules as having a net book value of $64,000. The Debtor owns Elizabeth Drive free and clear of liens. In October 2019, the Debtor requested a broker's opinion on the estimated value of Elizabeth Drive in an "as is" condition and was advised that the estimated value was $123,000. The Debtor currently has one doctor leasing the space, but he is expected to retire and will be vacating Elizabeth Drive prior to or at the time of the Closing Date. The Purchaser is able to pay cash at closing. Said fund would be immediately available to the Debtor, consistent with the terms of the Agreement, which is subject to Bankruptcy Court approval. The Debtor now asks to sell Elizabeth Drive to the Purchaser in an effort to maximize the value of the asset for its estate. Monetizing the asset without the time and expense of a broker and/or auction process will result in the best return to the estate. The Purchaser is ready and able to immediately acquire Elizabeth Drive. To implement the foregoing successfully, the Debtor asks that the Court enters an order providing that notice of the relief sought satisfies Bankruptcy Rule 6004 (a) and that the Debtor has established cause to exclude such relief from the 14-day stay under Bankruptcy Rule 6004 (h). A copy of the Agreement is available at https://tinyurl.com/y3wcrgvn from PacerMonitor.com free of charge. A telephonic hearing on the Motion is set for Sept. 21, 2020 at 10:00 a.m. About Eastern Niagara Hospital Eastern Niagara Hospital, Inc. -- http://www.enhs.org/-- is a not-for-profit organization, focused on providing general medical and surgical services. It offers radiology, surgical services, rehabilitation services, cardiac services, respiratory therapy, obstetrics and women's health, emergency services, acute and intensive care, chemical dependency treatment, occupational medicine services, DOT medical exams, dialysis, laboratory services, child and adolescent psychiatry, and express care. Eastern Niagara Hospital sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 19-12342) on Nov. 7, 2019. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. The Debtor tapped Jeffrey Austin Dove, Esq., at Barclay Damon LLP, as its legal counsel. The U.S. Trustee for Region 2 appointed creditors to serve on the official committee of unsecured creditors on Nov. 22, 2019. The committee is represented by Bond, Schoeneck & King, PLLC. Michele McKay was appointed as health care ombudsman in the Debtor's bankruptcy case. ED MORSE CADILLAC: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Debtor: Ed Morse Cadillac 101 E Flecher Ave Tampa, FL 33612 Involuntary Chapter 11 Petition Date: September 16, 2020 Court: United States Bankruptcy Court Middle District of Florida Case Number: 20-06967 Petitioning Creditor: Jejuan Sims 12492 Equine Ln Wellington, FL 33414 Creditor's Nature of Claim & Claim Amount: Creditor's rights, $1,010,000 A full-text copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/HOT5QRQ/Ed_Morse_Cadillac__flmbke-20-06967__0001.0.pdf?mcid=tGE4TAMA ENLINK MIDSTREAM: S&P Affirms 'BB+' ICR; Outlook Stable ------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' issuer credit rating and issue-level ratings on Enlink Midstream LLC and its 'B+' issue-level rating on the company's preferred stock. The '3' recovery rating is unchanged. The stable rating outlook reflects S&P's expectation that Enlink will maintain adjusted debt leverage around 5.0x and EBITDA/interest coverage around 3.4x over the next 12 months, with leverage improving to below 5.0x in the medium term. S&P expects the announced distribution cut to largely offset lower revenues as the company applies excess cash to self-fund capital expenditures (capex) and pay down debt in the next 24 months. Lower volumes and expiring minimum volume commitments pressure credit metrics in the near term. Enlink Midstream LLC has faced declining volumes in Oklahoma, driven by the decisions of exploration and production companies to cut capital allocation in the state and focus on the Permian basin even before the volatility in commodity prices due to the OPEC discord and the COVID-19 pandemic. Oil price shut-ins and curtailments as a result of the oil price crash in March 2020 affected crude volumes on all segments in the first half of 2020 and the gas gathering, transportation, and processing volumes in Louisiana and Oklahoma. This is somewhat offset by stable volumes on its gas gathering, processing, and transportation systems in the North Texas segment, Permian segment, and NGL fractionation. S&P expects effects of volatile commodity prices to last through 2021. "We note Devon's minimum volume commitments in the STACK play, which roll off at the end of 2020, account for approximately $50 million- $70 million in revenue," S&P said. "As a result, we have lowered our expectation for EBITDA to about $1 billion to $1.1 billion on an adjusted basis over the near term. This is lower than our previous expectations, leading to slightly elevated credit metrics in 2020 and 2021," the rating agency said. Enlink's management has taken a number of measures to preserve liquidity, improve free cash flow, and pay down debt over the medium term. After announcing a 35% cut to distributions in January 2020, Enlink announced a further 50% cut in distributions for an overall cut of about 67% compared with 2019. Effectively, the company cut the distribution as much as possible while still allowing GIP Stetson to service its debt. The new $0.375 per unit distribution level will save about $375 million in annual distributions for the company. Enlink initially announced a 40% capex budget cut and later followed up with an additional 15%, for a total capex cut of about 66% from 2019 levels. The company is also in the process of implementing numerous expense reduction activities across its cost structure for total savings of about $50 million to $120 million in 2020. S&P considers all the above measures as credit supportive since it expects the company to repay debt over the next two to three years using excess operating cash flow generated from the above actions. A high percentage of fee-based contracts with investment-grade counterparties underpins Enlink's business. S&P's assessment of Enlink's business risk profile reflects its mostly fee-based contracts (about 90% of operating margin) with 85% investment-grade counterparties that limits commodity price risk, and asset, commodity, and geographic diversity of business operations across various basins in the U.S. including the Permian Basin, Anadarko basin, STACK, and Woodford, among others. The company's volume risk is partially mitigated by a significant portion of its cash flows under minimum volume commitments (MVCs). The stable rating outlook reflects S&P's expectation that Enlink will maintain adjusted debt leverage around 5.0x and EBITDA/interest coverage around 3.4x over the next 12 months, with leverage improving to below 5.0x in the medium term. S&P expects the announced distribution cut to largely offset lower revenues as the company applies excess cash to self-fund capex and pay down debt in the next 24 months. "We could consider a negative rating action if we expect adjusted debt leverage to stay above 5x and EBITDA/interest coverage declined below 3.0x. This could occur if commodity prices deteriorate to a level that results in further declining volumes. This could also occur if we consolidate Enlink with its holding company, GIP Stetson, which could occur if GIP considers taking Enlink private," S&P said. "While unlikely at this time, we could consider raising the rating if Enlink is able to maintain adjusted leverage in the low 4.0x range or better or EBITDA/interest coverage exceeding 5x while continuing to grow its scale and footprint in the Permian basin and Oklahoma. This could occur if the company issues a modest mix of equity to fund its spending program," the rating agency said. ENRAMADA PROPERTIES: Novoa Unsecureds to Recover 5% to 98% in Plan ------------------------------------------------------------------ Debtors Enramada Properties, LLC, Oscar Rene Novoa and Sylvia Novoa filed with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, a Disclosure Statement in support of Plan of of Reorganization dated July 31, 2020. Class 4(a), comprising creditors each with an allowed claim of $2,500 or less or who elects to reduce its allowed claim to $2,500 will each receive a single payment equal to 100% of its allowed claim on the effective date of the Plan. Class 4(a) claims total $5.516. Class 4(b) consists of general unsecured claims filed in both the Enramada and Novoa bankruptcy cases. Class 4(b) claims total $1,763,655, of which $1,703,655 is disputed. Enramada will contribute the full amount of the net proceeds from the sale of the Landfranco and Washington Properties to pay the claims of Class 4(b) and Class 4(c). The net proceeds are expected to total $361,242. Class 4(b) members will be paid up to 100% of their allowed claims if Debtors prevail on some or all of their objections. It cannot be determined at this time how much Class 4(b) claims will be paid if some or all creditors' claims are sustained or if Zapeda-Moreno's claim remains secured. Class 4(c) consists of claims by general unsecured creditors of the Enramada bankruptcy case only. Class 4(c) claims total $273,190. Enramada will contribute the full amount of the net proceeds from the sale of the Landfranco and Washington Properties to pay claims of Class 4(b) and Class 4(c). The net proceeds are expected to total $361,242. Class 4(c) members will be paid up to 100% of their allowed claims if Debtors prevail on some or all of their objections to the claims of the Class 4(c) creditors. The source of payments will be from the net proceeds from the sale of the Lanfranco and Washington Properties. Class 4(d) consists of claims by general unsecured creditors in the Novoa bankruptcy case only. Class 4(d) claims total $760,861, of which $408,028 is disputed. Class 4(d) members will be paid up from 5% up to 98% of their allowed claims if Debtors prevail on some or all of their objections and if they receive a substantial recovery against Pogosian. It cannot be determined at this time how much Class 4(d) claims will be paid if some or all creditors' claims are sustained. Class 4(d) claims will be paid in 60 monthly payments of $1,700 plus the recovery from the Pogosian litigation. Sylvia Novoa is asserting a claim against Pogosian in the amount of $326,428. The Debtors will also contribute the net proceeds from the sale of the Lanfranco and Washington properties, after payment of Class 4(a) , 4(b) and 4(c) claims. The Plan will be funded by a combination of the net proceeds from the sale of the Lanfranco and Washington Properties and from Debtors' future income. A full-text copy of the disclosure statement dated July 31, 2020, is available at https://tinyurl.com/y4q69y2w from PacerMonitor at no charge. The Debtor is represented by: Andrew Bisom, Esq The Bisom Law Group 300 Spectrum Center Drive, Ste. 1575 Irvine, CA, 92618 Tel: (714) 643-8900 Fax: (714) 643-8901 E-mail: abisom@bisomlaw.com About Enramada Properties Enramada Properties, LLC, based in Whittier, California, holds a joint tenancy interest in a property located in Los Angeles, California valued at $325,000. It also owns in fee simple two real properties in Whittier having an aggregate current value of $1.1 million. Enramada Properties filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 19-19869) on August 22, 2019. In the petition signed by Sylvia Novoa, managing member, the Debtor listed total assets of $1,429,000 against total liabilities of $1,724,414. The Hon. Julia W. Brand oversees the case. Andrew S. Bisom, Esq., at The Bison Law Group, serves as the Debtor's bankruptcy counsel. ERICKSON INC: Dismissal of Trustee Claims vs Morgan et al. Upheld ----------------------------------------------------------------- In the appeals case captioned ROBERT E. OGLE, Litigation Trustee for the Erickson Litigation Trust, Appellant, v. QUINN MORGAN, et al., Appellee, Civil Action No. 3:19-CV-1838-S (N.D. Tex.), District Judge Karen Gren Scholer affirmed the Bankruptcy Court's decision granting Defendants Quinn Morgan; Kenneth Lau; Centre Lane Partners, LLC; 10th Lane Finance Co. LLC; 10th Lane Partners, LP; ZM Private Equity Fund I, LP; ZM Private Equity Fund II, LP; and ZM EAC LCC's Motion to Dismiss. Prior to filing for bankruptcy, Debtor Erickson, Inc. was a company in the helicopter industry. In 2013, a shareholder filed a Verified Class Action and Derivative Complaint in the Court of Chancery of the State of Delaware, challenging the Debtor's acquisition of Evergreen International Aviation, Inc. With the exception of one entity, all of the Defendants were named in the Delaware Action. In June 2016, the parties to the Delaware Action filed a Stipulation and Agreement of Compromise, Settlement, and Release. In September 2016, the presiding judge of the Delaware Action held a hearing to determine whether to approve the Settlement. Following the hearing, the court entered an Order and Final Judgment approving the Stipulated Settlement, finding that its terms and conditions were "fair, reasonable, and adequate, and in the best interests of Plaintiff, the Class and the Company." The Delaware Judgment also provided for the release of all claims "which are based upon, arise out of, relate in any way to, or involve, directly or indirectly . . . the [EIA] Transaction," and permanently enjoined Debtor as follows: [Debtor] . . . [its] legal representatives, heirs, executors, administrators, estates, predecessors, successors, predecessors-in-interest, successors-in-interest, and assigns, and any person or entity acting for or on behalf of, or claiming under, any of them . . . shall hereby be forever barred and enjoined from commencing, instituting, or prosecuting the released claims against the [d]efendants. On Nov. 8, 2016, the Debtor filed for Chapter 11 bankruptcy. Pursuant to the terms of the Debtor's Second Amended Joint Plan of Reorganization, the Debtor assigned claims against Defendants, as well as certain other claims, to the Erickson Litigation Trust for prosecution by its trustee, Robert E. Ogle. The Trustee filed this action on July 23, 2018, bringing 12 claims for avoidance of the acquisition of EHI and the Delaware Settlement under theories of actual and constructive fraudulent transfers. On June 26, 2019, the Bankruptcy Court entered an order dismissing all claims, which incorporated by reference its May 28, 2019 oral ruling. The Trustee filed his Notice of Appeal on July 10. On August 30, 2019, the Trustee filed his Appellant's Brief and designated the following issue for appeal: Whether the Bankruptcy Court erred when it dismissed the Trustee's avoidance claims. The Trustee argued that the Bankruptcy Court erred in concluding that the Trustee was a "successor" or "assignee" of the Debtor such that the Delaware Judgment's injunction on future suits should apply to bar claims related to the Debtor's acquisition of EIA. The District Court has conducted a de novo review of this conclusion and affirmed the Bankruptcy Court for the reasons stated in the Order, which incorporated the Oral Ruling by reference. Specifically, the District Court found that these avoidance claims "relate . . . to . . . the [EIA] Transaction," and the Trustee is enjoined from bringing these claims because he is an assignee, successor, and legal representative of the Debtor. Therefore, the Delaware Judgment enjoined him from bringing Counts 1, 2, and 3. The Trustee argued that the Bankruptcy Court erred in dismissing Counts 7 and 9 pursuant to the Rooker-Feldman doctrine and Besing v. Hawthorne (In re Besing), 981 F.2d 1488 (5th Cir. 1993). The Court has conducted a de nova review of this conclusion and affirmed the Bankruptcy Court for the reasons stated in the Order, which incorporated the Oral Ruling by reference. Specifically, the District Court found that Besing bars the Trustee's constructive fraudulent transfer claims related to the Delaware Judgment. Finally, the Trustee argued the Bankruptcy Court erred in dismissing Counts 6 and 8 for failure to state a claim. The District Court has conducted a de novo review of this conclusion and affirmed the Bankruptcy Court for the reasons stated in the Order, which incorporated the Oral Ruling by reference. Specifically, claims for actual fraudulent transfer must satisfy the heightened pleading standard in Federal Rule of Civil Procedure 9(b). The Fifth Circuit has described Rule 9(b) as requiring the plaintiff to set forth the "who, what, when, where, and how of the alleged fraud." To meet this requirement in actual fraudulent transfer actions, courts consider various "badges of fraud," including: (1) the lack or inadequacy of consideration; (2) the family, friendship, or close associate relationship between the parties; (3) the retention of possession, benefit, or use of the property in question; (4) the financial condition of the party sought to be charged both before and after the transaction in question; (5) the existence or cumulative effect of the pattern or series of transactions or course of conduct after the incurring of debt, onset of financial difficulties, or pendency or threat of suits by creditors; and (6) the general chronology of events and transactions under inquiry. Here, while the Trustee makes conclusory allegations related to the badges of fraud, those pleadings are not sufficient to meet Rule 9(b) standards with respect to fraudulent intent. Accordingly, the District Court affirmed the Bankruptcy Court's dismissal of Counts 6 and 8. A copy of the Court's Memorandum Opinion and Order dated August 6, 2020 is available at https://bit.ly/3jqdB0J from Leagle.com. About Erickson Inc. Founded in 1971, Erickson Incorporated (otcmkts:EACIQ) -- http://www.ericksoninc.com/-- is a vertically-integrated manufacturer and operator of the powerful heavy-lift Erickson S-64 Aircrane helicopter, and is a leading global provider of aviation services. Erickson Incorporated, based in Portland, Ore., and its affiliates each filed a Chapter 11 petition (Bankr. N.D. Tex.; Erickson Incorporated, Case No. 16-34393; Evergreen Helicopters International, Inc., Case No. 16-34392; EAC Acquisition Corporation, Case No. 16-34394; Erickson Helicopters, Inc., Case No. 16-34395; Erickson Transport, Inc., Case No. 16-34396; Evergreen Equity, Inc., Case No. 16-34397; Evergreen Unmanned Systems, Inc., Case No. 16-34398) on Nov. 8, 2016. In its petition, Erickson estimated $942.8 million in assets and $881.5 million in liabilities. The Hon. Harlin D. Hale is the case judge. Haynes and Boone is serving as bankruptcy counsel to the Debtors. Kenric D. Kattner, and Kourtney P. Lyda, Esq., of the firm's Houston office and Ian T. Peck and David Lawrence Staab of the firm's Fort Worth office, head the engagement. Imperial Capital is serving as investment banker to the debtors, with Christopher Shephard, co-head of the firm's Investment Banking Group and head of Capital Markets, leading the engagement. Alvarez & Marsal is serving as financial advisor, with managing director Steven Varner leading the engagement. Kurtzman Carson Consultants, LLC, is the Debtors' claims, noticing and balloting agent and the subscription agent in the rights offering. No statutory committee of creditors has been appointed in the case. Goldberg Kohn, Ltd., is lead counsel for DIP revolving agent and existing first lien agent Wells Fargo Bank, and revolving lenders Deutsche Bank, Bank of the West and HSBC. Randall Klein, Principal at Goldberg and chair of the firm's Bankruptcy & Creditors' Rights Group, heads the engagement. David Weitman, a partner at K&L Gates, LLP, is local counsel to Wells Fargo. Akin Gump Strauss Hauer & Feld LLP is representing the ad hoc group of holders of 8.25% Second Priority Senior Secured Notes due 2020. Partner Scott L. Alberino heads the engagement. Seyfarth Shaw LLP and The Law Offices of Mark A. Weisbart are representing Wilmington Trust, as indenture trustee for the 8.25% notes. Edward M. Fox, a partner in the litigation department of Seyfarth Shaw, and James Brouner, attorney at the Law Offices of Mar A. Weisbart, head the engagement. Katten Muchin Rosenman LLP is representing funds managed by Quinn Morgan at Centre Lane Partners. Managing partner Brian F. Antweil leads the engagement. Ropes & Gray LLP is representing Wilmington Savings Fund Society, FSB, the administrative agent under the proposed new second lien credit facility. Mark Somerstein, a partner at the firm, heads the engagement. * * * On March 22, 2017, the Bankruptcy Court confirmed the Debtor's Second Amended Plan of Reorganization. Erickson's restructuring will reduce the company's pre-bankruptcy debt by more than $400 million upon emergence. In order to improve its capital structure and finance its exit from bankruptcy, Erickson was able to (i) obtain a commitment for an asset-based lending facility with a borrowing capacity of up to $150 million, led by MidCap Financial Trust, (ii) reach an agreement on non-cash repayment for $69.8 million in financing obtained during the bankruptcy, and (iii) secure a backstopped $20 million rights offering. ESSEX REAL: Selling Approx. 84-Acre Henderson Property for $48.4M ----------------------------------------------------------------- Essex Real Estate Partners, LLC, asks the U.S. Bankruptcy Court for the District of Nevada to authorize the sale of its real properties located in Henderson, Clark County, Nevada identified as APNs: 191-15-811-001; 191-15-711-002; 191-23-211-003; 191-23-211-004; and 191-14-311-002, for a collective gross sales price of $48,374,400. After extensive negotiations, subject to Court approval after notice and hearing, Essex has entered into six separate purchase and sale agreements ("PSAs") with three different Buyers. The six agreements are for the sale of 83.30 acres of the Property for a collective gross sales price of $48,374,400. The six purchase and sale agreements ("PSAs") is detailed as follows: Parcel APN Acres Price/Acre Total Buyer ------ --- ----- ---------- ----- ----- 1 191-15-811-001 27.45 $560,022 $15,372,617 Greystone Nevada 2A 191-15-71 1002 22.75 $560,000 $12,740,000 Pardee Homes 2B 11.74 $708,796 $8,300,000 Westcorp Management 3 191-44-311-002 5.95 $560,000 $3,332,000 Pardee Homes 4 191-23-211-003 7.29 $560,000 $4,082,400 Pardee Homes 5 191-23-211-004 8.12 $560,022 $4,547,383 Greystone Nevada The Property consists of approximately 83.39 acres of mixed-use undeveloped land within the Inspirada Master Plan Community, in Henderson, Clark County, Nevada. On Nov. 29, 2007, Essex borrowed the total principal sum of $66 million under a Term Loan Agreement dated Nov. 29, 2007, and a Deed of Trust Note in the amount of $42.9 million payable to The Foothill Group, Inc. and a Deed of Trust Note in the principal amount of $23.1 million payable to IFA. At all relevant times, NexBank, SSB was and is the duty appointed collateral agent and administrative agent for the lenders under the Notes and the Term Loan Agreement. The purpose of the Loan was to finance the purchase and development of the Property based on a Development Agreement dated Nov. 29, 2007, between Essex and KB Home Nevada, Inc. The entire principal and accrued interest owing under the Notes and Term Loan Agreement was wholly due and payable by Essex on the initial Maturity Date of Dec. 1, 2008. Pursuant to an Amended Order Scheduling Settlement Conference, the Debtor, NexBank and IFA will participate in a settlement conference on July 16, 2020, in an attempt to resolve the claims each has against the other. Essex, NexBank and IPA have each agreed to participate in an additional settlement conference on Sept. 8, 2020, in a further attempt to resolve the claims each has against the other. As detailed in the Preliminary Title Report, the only allowed secured liens and encumbrances against the Real Property consist of unpaid Real Property taxes owing to the Clark County Treasurer in an estimated sum of $2.8 million, as of July 1, 2020. The purported liens of NexBank, IFA and the Fractional Assignees under the Deed of Trust are all disputed and the Debtor is asking to sell its Real Property free and clear of those disputed claims, with any purported liens to attach to the proceeds of the sale until the claims are adjudicated in the Court or otherwise resolved by mutual agreement of the parties. The Debtor has entered into six separate Purchase and Sale 19 Agreements with three different potential buyers, specifically Westcorp; Greystone; and Pardee. A. Westcorp Agreement for Sale of Real Property (11.74 acres of APN: 191-15-711-002, Parcel 2B): a. Purchase Price: $8.3 million payable as follows: $50,000 Initial Deposit delivered to First American Title Insurance Co. ("FATCO"), to be credited at closing to the purchase price, with the balance of the purchase price to be paid in cash upon Closing. Within five business days of the date certain conditions to Westcorp's obligations, Westcorp will deliver to FATCO an additional deposit of $250,000, which will also be applied to the purchase price, and be subject to same refundable conditions as the Initial Deposit. b. Closing: Closing will occur on the business day that Westcorp designated to the Debtor in writing, but in no event later than the 60 days following the last of certain conditions detailed in the Agreement. If Closing has not occurred on Jan. 15, 2021, for any reason except due to a default of Westcorp, then at any time thereafter Westcorp may terminate the Agreement upon two business days’ written notice to Essex and any Deposit (plus accrued interest) will he returned to Westcorp. c. Closing Costs: The Debtor will pay the premium for a standard ALTA standard owner's policy of title insurance, the cost of recordation of the Deed, one-half of any escrow fee and all transfer tax. Property taxes will be prorated as of the Closing and each party will pay its own attorney’s fees and costs. Westcorp will have a period of 30 days from Aug. 3, 19 2020, to conduct its due diligence and inspection of the Property. d. Sales Commissions: The Debtor's real estate broker, Michael Stuart of Colliers International, did not negotiate the sale to Westcorp, but Michael Stuart of Colliers International is entitled to a sales commission of 0.50% of the gross sales price, payable at closing. B. Greystone Real Property Purchase and Sale Agreement and Escrow Instructions (22.75 acres of APN: 191-15-711-092 "Parcel 2A"): a. Purchase Price: $12,740,000, payable as follows: $100,000 Initial Deposit delivered to Fidelity National Title/Group, to be credited at closing to the purchase price, with the balance of the purchase price to be paid upon Closing. If Pardee delivers its Continuation Notice, then within three business days after the expiration of the Inspection Period, Pardee will also deliver to Fidelity an additional deposit of $150,000. The Deposit includes as independent consideration for Essex's performance the sum of $100, which shail be retained by Essex in all instances. b. Closing: The Closing will occur no later than 45 days following the Tentative Map approval date, but no later than Jan. 31, 2021, provided all other conditions in favor of Pardee are satisfied. Pardee will have a period of 60 days from the opening of escrow to conduct its due diligence and inspection of the Property. c. Closing Costs: Essex will pay the cost of the standard coverage portion of the Buyer's Title Policy, one-half of any escrow fee and all real property transfer taxes. The Property taxes will be prorated as of the Closing and each party will pay its own attorney's fees and costs. d. Sales Commissions: Essex's Court approved real estate broker, Michael Stuart of Colliers International, will be paid a real estate commission of 0.5% of the gross sales price, plus 15% of the difference between $503,658 per acre and $560,000 per acre times the number of total acres sold. C. Pardee Real Property Purchase and Sale Agreement and Joint Escrow Instructions (5.95 acres of AFN: 191-14-311-002 "Parcel 3") a. Purchase Price: $3,332,000, payable as follows: $50,000 Initial Deposit delivered to Fidelity National Title/Group, with the balance of the purchase price to be paid upon Closing. If Pardee delivers its Continuation Notice, then within three business days after the expiration of the Inspection Period, then Pardee will also deliver to Fidelity an additional deposit of 75,000. The Deposit includes as independent consideration for Essex's performance the $100, which will be retained by Essex in all instances. b. Closing: The Closing will occur no later than 45 days following the Tentative Map approval date, but no later than Jan. 31, 2021, provided all other conditions in favor of Pardee are satisfied. Pardee will have a period of 60 days from the opening of escrow to conduct its due diligence and inspection of the Property. c. Closing Costs: Essex will pay the cost of the standard coverage portion of the Buyer's Title Policy, one-half of any escrow fee and all real property transfer taxes. Property taxes will be prorated as of the Closing and each party will pay its own attorney's fees and costs. d. Sales Commissions: Essex's Court approved real estate broker, Michael Stuart of Colliers International, will be paid a real estate commission of 0.5% of the gross sales price, plus 15% of the difference between $503,658 per acre and $560,000 per acre times the number of total acres sold. e. Breakup Fee: The Debtor will reimburse Greystone its out-of-pocket costs incurred in connection with the transaction in a sum not to exceed $50,000 in the event Greystone is no longer the ultimate buyer because the Debtor accepts an overbid from another purchaser and such overbid is approved by the Court. D. Pardee Real Property Purchase and Sale Agreement and Escrow Instructions (7.29 acres of APN: 191-23-211-003 "Parcel 4") a. Purchase Price: $4,082,400, payable as follows: $50,000 Initial Deposit delivered to Fidelity National Title/Group, to be credited at closing to the purchase price, with the balance of the purchase price upon Closing. If Pardee delivers its Continuation Notice, then within three business days after the expiration of the Inspection Period, then Pardee will also deliver to Fidelity an additional deposit of $75,000. The Deposit includes as independent consideration for Essex's performance the sum of $100, which will be retained by Essex in all instances. b. Closing: The Closing will occur no later than 45 days following the Tentative Map approval date, but no later than Jan. 31, 2021, provided all other conditions in favor of Pardee are satisfied. Pardee will have a period of 60 days from the opening of escrow to conduct its due diligence and inspection of the Property. c. Closing Costs: The Debtor will pay the cost of the standard coverage portion of the Buyer's Title Policy, one-half of any escrow fee and all real property transfer taxes. Property taxes will be prorated as of the Closing and each party will pay its own attorney's fees and costs. d. Sales Commissions: The Debtor's real estate broker, Michael Stuart of Colliers International, is entitled to payment of real estate commissions consisting of 0.50% of the gross sales price, payable at Closing. E. Greystone Real Property Purchase and Sale Agreement and Escrow Instructions (27.45 acres of APN: 191-15-811-001 "Parcel 1") a. Purchase Price: $5,372,617, payable as follows: $25,000 Initial Deposit delivered to Fidelity National Title/NCS, to be credited at closing to the purchase price, with the balance of the purchase price to be paid upon Closing. If Greystone delivers its Notice of Approval at 6:00 p.m. (PT) on the date that is three business days after the Decision Date, then Greystone will also deliver to Fidelity an additional deposit of $125,000. The Deposit includes as independent consideration for Essex's performance the sum of $100, which will be retained by Essex in all instances. b. Closing: The Closing will occur no later than 45 days following the Tentative Map approval date, but no later than Jan. 15, 2021, provided all other conditions in favor of Pardee are satisfied. Greystone will have a period of 60 days from the Effective Date of the Parties signing the Agreement (June 24, 2020), which 60 days was extended for another 30 days by Essex, to conduct its due diligence and inspection of the Property. If it is not satisfied with the results of its due diligence investigation, it may terminate the Agreement at any time prior to 6:00 p.m. (PT) on the Decision Date, as may be extended by agreement, by giving Essex written notice of termination. c. Closing Costs: The Debtor will pay the cost of the standard coverage portion of the Buyer's Title Policy, one-half of any escrow fee and all real property transfer taxes. Property taxes will be prorated as of the Closing and each party will pay its own attorney's fees and costs. d. Sales Commissions: The Debtor's real estate broker, Michael Stuart of Colliers International, is entitled to payment of real estate commissions consisting of 0.50% of the gross sales price. e. Breakup Fee: $50,000 F. Greystone Real Property "Purchase and Sale Agreement and Escrow Instructions (8.12 acres of APN: 191-23-211-004 "Parcel 5") a. Purchase Price: $4,547,383, payable as follows: $25,000 Initial Deposit delivered to Fidelity National Title/NCS, to be credited at closing to the purchase price, with the balance of the purchase price to be paid upon Closing. If Greystone delivers its Notice of Approval at 6:00 p.m. (PT) on the date that is three business days after the Decision Date, then Greystone will also deliver to Fidelity an additional deposit of $125,000. The Deposit includes as independent consideration for Essex's performance the sum of $100, which will be retained by Essex in all instances. b. Closing: The Closing will occur no later than 40 days following the Tentative Map approval date, but no later than Jan. 15, 2021, provided all other conditions in favor of Pardee are satisfied. Greystone will have a period of 60 days from the Effective Date of the Parties signing the Agreement (June 24, 2020), which 60 days was extended for another 30 days by Essex, to conduct its due diligence and inspection of the Property. If it is not satisfied with the results of its due diligence investigation, it may terminate the Agreement at any time prior to 6:00 p.m. (PT) on the Decision Date, as may be extended by agreement, by giving Essex written notice of termination. c. Closing Costs: The Debtor will pay the cost of the standard coverage portion of the Buyer's Title Policy, one-half of any escrow fee and all real property transfer taxes. Property taxes will be prorated as of the Closing and each party will pay its own attorney's fees and costs. d. Sales Commissions: The Debtor's real estate broker, Michael Stuart of Colliers International, is entitled to payment of real estate commissions consisting of 0.50% of the gross sales price. e. Breakup Fee: $50,000 In the event a higher offer to purchase the Property before, or at, the appointed hearing is received, the Debtor asks approval of the Bidding Procedures. The salient terms of the Bidding Procedures are: a. Bid Deadline: Sept. 18, 2020 at 4:00 p.m. (PST) b. Initial Bid: A cash bid in an amount not less than any Stalking Horse Bid, plus $50,000 c. Deposit: Not less than $25,000 per Lot (except for Lot 6, for which a minimum deposit of $150,000 is required) d. Auction: The Court will conduct the Auction at (via Zoom) the C. Clifton Young Federal Building, 300 Booth St, Reno, NV 89509 on Sept. 25, 2020 at 10:00 a.m. (PDT), or such other time and date as designated by the Debtor on a notice to all Qualified Bidders or announced in open court. e. Bid Increments: $50,000 f. Expense Reimbursement: $50,000 for Lots 1 and S The Debtor will pay real estate commissions upon closing for each proposed sale to the Buyers. But in the event the final approved Property sales are for higher overbids or to new purchasers not contemplated in the Motion, Essex's Court approved real estate broker, Michael Stuart of Colliers International, is entitled to payment of real estate commissions as follows: a. In the event of a sale to a new purchaser, the commission will be 1.5% of the gross sales price of the interest to be transferred; b. In the event of a sale to a purchaser who has already submitted a bona fide, good faith offer, the commission will be 0.5% of the gross sales price of the interest to be transferred. Broker and Client agree on a list of current Buyers as follows: Lennar (Greystone); Richmond; Pardee; and Bob Wiedauer (Westcorp); and c. In the event a sale to purchaser who has previously submitted an offer whereas their price is negotiated above the original submitted price to owner, the commission will be 0.50% of the original offer price, plus 15% of the increased price negotiated by Broker and Client, capped out to maximum of 1.5% commission of the gross sales price. Finally, Essex asks a waiver of the 14-day stay contemplated by Fed. R. Bankr. P. 6004(h), so that any sale of the Property can close as soon as practicable after entry of an Order approving such sale. A copy of the Agreements and Bidding Procedures is available at https://tinyurl.com/y55a9b35 from PacerMonitor.com free of charge. A hearing on the Motion is set for Sept. 25, 2020 at 10:00 a.m. About Essex Real Estate Partners Essex Real Estate Partners, LLC, based in Reno, NV, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 19-51486) on Dec. 27, 2019. In the petition signed by Jeri Coppa-Knudson, manager, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. The Hon. Bruce T. Beesley oversees the case. Stephen R. Harris, Esq., a Harris Law Practice, LLC, serves as bankruptcy counsel to the Debtor. EVIO INC: Partners with Steep to Operate a Medical Cannabis Lab --------------------------------------------------------------- EVIO, Inc., entered into a contribution exchange agreement with Steep Hill, Inc. on or about Sept. 8, 2020. As a result of the transaction, EVIO Inc. and Steep Hill Inc, will jointly operate a medical and adult use cannabis testing and analytical testing laboratory at 2448 Sixth Street, Berkeley, CA 94710. The joint venture company C3 Labs, LLC, was previously a wholly owned subsidiary of EVIO Inc. Under terms of the Agreement, Steep Hill will contribute specific assets to C3 Labs for 161,429 Class A Units constituting a 49% percent interest of C3 Labs. C3 Labs is willing to assume from Steep Hill certain assumed liabilities all upon the terms and subject to the conditions set forth in the Contribution and Exchange Agreement. Under the transaction, C3 Labs will acquire and Steep Hill will contribute the tangible personal property to the extent used by Steep Hill in the conduct of the business (exclusive of the Steep Hill licensing business), including the equipment, inventory, receivables and other tangible property; all rights in respect of the Leased property at 2448 Sixth Street, Berkeley, CA 94710 the rights of Steep Hill under the material contracts to the extent relating to the Business (to the extent such contracts are transferable); all licenses, permits and agreements relating to the Business. In conjunction with the Contribution Exchange Agreement, Steep Hill Inc. has entered into a promissory note to pay C3 Labs, LLC, $320,000. The funds are due within 90 days and accrue an annualized interest rate of 1.49. If Steep Hill fails to pay C3 Labs, LLC the funds, Steep Hill has pledged its ownership of 129,143 Class A Units of C3 Labs, which reduce their overall ownership from 49% to effectively 9.8%. In consideration of the execution of the Contribution Exchange Agreement, C3 Labs LLC has entered into a license agreement with Steep Hill, Inc which includes a Technology License Grant and Service Mark License Grant. The license agreement will be based on 5% of the testing services performed by the C3 Labs LLC. Upon approval of the BCC and local authorities, C3 Labs, LLC will operate at Steep Hill California. In conjunction with the California Cannabis Rules, cannabis licenses are no transferable between addresses. As such, Steep Hill, Inc. when they relocated to 2448 Sixth Street, had initiated the process to obtain a new license from the Bureau of Cannabis Control "BCC". At this time, that license application is still pending with the BCC. EVIO and C3 Labs will take the lead on completing the application with the BCC. There is no standard time for issuance of the license from the BCC. Revises MIPA In conjunction with the initial Membership Interest Purchase Agreement with Green Analytics to sell 49% of Viridis Analytics, MA, subject to approval of the Massachusetts Cannabis Control Commission, the MIPA has been revised to sell 100% of Viridis Analytics, MA to Green Analytics, subject to approval of the Massachusetts Cannabis Control Commission. Green Analytics will assume certain debts and obligations of Viridis Analytics. Green Analytics is currently paying all on-going obligations of Viridis Analytics, with certain obligations, such as rent and insurance being off-set from the purchase price. Upon the approval of the MA CCC, will a final outstanding amount due to EVIO Inc will be finalized. About EVIO, Inc. EVIO, Inc., formerly Signal Bay, Inc. -- http://www.eviolabs.com/ -- provides analytical testing and advisory services to the emerging legalized cannabis industry. The Company is domiciled in the State of Colorado, and its corporate headquarters is located in Bend, Oregon. Evio reported a net loss of $20.67 million for the year ended Sept. 30, 2019, compared to a net loss of $11.94 million on for the year ended Sept. 30, 2018. As of Dec. 31, 2019, the Company had $8.06 million in total assets, $20.15 million in total liabilities, and a total deficit of $12.08 million. BF Borgers CPA PC, in Lakewood, CO, the Company's auditor since 2019, issued a "going concern" qualification in its report dated May 18, 2020 citing that the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. FRONTIER COMMUNICATIONS: 2nd Lien Trustee Says Plan Unconfirmable ----------------------------------------------------------------- Wilmington Savings Fund Society, FSB (the "Second Lien Notes Trustee"), as successor Indenture Trustee and Collateral Agent for the 8.500% Second Lien Secured Notes due 2026 (the "Second Lien Notes"), submitted an opposition to the Third Amended Joint Plan of Reorganization of Frontier Communications Corporation and its Debtor Affiliates. The Second Lien Notes Trustee asserts that: * On its face, the Plan is unconfirmable as a matter of law. The Debtors are contractually required under the Second Lien Notes Indenture to pay default interest on the Second Lien Notes between the Petition Date and the Effective Date. * They remain obligated under the Second Lien Notes Indenture to pay the applicable make-whole premium on the Second Lien Notes in the event the Debtors elect the cash-out option, given the fact that the Debtors have retained the option to cash-out the Second Lien Notes. * The First Lien Ad Hoc Committee's arguments are based upon a misreading of the Intercreditor Agreement. However, if this argument were accepted, the Second Lien Notes would be further impaired by the Plan, thereby making it further unconfirmable as a matter of law. The Second Lien Notes Trustee requests that the Court deny confirmation of the Plan unless the Debtors remedy defects in the Plan. A full-text copy of the Second Lien Notes Trustee's objection dated July 31, 2020, is available at https://tinyurl.com/y2fw2k8y from PacerMonitor.com at no charge. Counsel for Wilmington Savings Fund: RIKER, DANZIG, SCHERER, HYLAND & PERRETTI LLP Joseph L. Schwartz (admitted pro hac vice) Curtis M. Plaza Tara J. Schellhorn Tod S. Chasin Headquarters Plaza, One Speedwell Avenue Morristown, New Jersey 07962-1981 Tel: (973) 538-0800 - and - 500 Fifth Avenue, 49th Floor New York, New York 10110 Tel: (212) 302-6574 About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as investment banker. FRONTIER COMMUNICATIONS: First Lien Committee Objects to Joint Plan ------------------------------------------------------------------- The ad hoc committee of certain unaffiliated holders of outstanding first lien debt (the "First Lien Committee") of Frontier Communications Corporation and its Debtor Affiliates objects to the Third Amended Joint Plan of Reorganization of Debtors. The First Lien Committee opposes the Plan because it alters the First Lien Lenders' legal, equitable, and contractual rights, depriving them of the benefits of the bargain they struck with the Debtors for more than $4 billion of credit. The First Lien Committee claims that a linchpin of the Debtors' restructuring is their asserted ability to reinstate some or all of the First Lien Debt. While the Debtors acknowledge that, to do so, they must not alter the First Lien Lenders' rights, the Plan honors that requirement in the breach. The First Lien Committee points out that the Plan violates the Term Loan Lenders' rights to pro rata treatment under the Credit Agreement. Inexplicably, the Debtors acquiesce to the Revolving Lenders’ insistence on full repayment on the Effective Date, while attempting to reinstate obligations to the Term Loan Lenders under the very same Credit Agreement. The First Lien Committee asserts that while disregarding the rights of the First Lien Lenders, the Plan provides the Senior Noteholders with significant benefits to which they are not entitled. The Plan requires full payment, in cash, of accrued but unpaid prepetition interest, thereby providing certain Senior Noteholders with a far greater recovery than other Senior Noteholders. The First Lien Committee further asserts that the Plan impairs the First Lien Lenders’ legal, equitable, and contractual rights in multiple ways. In their pursuit of peace with the Senior Noteholders, their efforts to appease the Revolving Lenders and entice them to provide exit financing, and their commitment to maximum optionality through the Effective Date, the Debtors have disregarded the First Lien Lenders’ rights, leaving the First Lien Committee no choice but to oppose confirmation. A full-text copy of the First Lien Committee's objection dated July 31, 2020, is available at https://tinyurl.com/y434q4w7 from PacerMonitor.com at no charge. Counsel to the First Lien Committee: Brian S. Hermann Julia Tarver Mason Wood Gregory F. Laufer Kyle J. Kimpler PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019-6064 About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as investment banker. FRONTIER COMMUNICATIONS: Lead Plaintiffs Object to Joint Plan ------------------------------------------------------------- Arkansas Teacher Retirement System and Carlos Lagomarsino (together, "Lead Plaintiffs") submitted a limited objection to confirmation of the Third Amended Joint Plan of Reorganization of Frontier Communications Corporation and its debtor affiliates. Securities Lead Plaintiffs claim that the Plan should preserve the claims of Lead Plaintiffs and the Class against the Debtors, solely to the extent of available insurance coverage. Claims against the Debtors arising out of purchases of their publicly traded securities, including the claims held by Lead Plaintiffs and the putative Class, are not entitled to any distribution under the Plan. Securities Lead Plaintiffs raised concerns regarding post-confirmation preservation of and access to evidence that is potentially relevant to the Securities Litigation. The Lead Plaintiffs reserve the right to supplement this Limited Objection in the event the Confirmation Hearing is adjourned, and the deadline to object to confirmation is extended, further confirmation related pleadings are filed, or the Plan is further modified. A full-text copy of the Lead Plaintiffs' objection to Third Amended Joint Plan of Reorganization dated July 31, 2020, is available at https://tinyurl.com/yyejm3d8 from PacerMonitor.com at no charge. Bankruptcy Counsel to Lead Plaintiff: LOWENSTEIN SANDLER LLP Michael S. Etkin Andrew Behlmann Colleen Maker One Lowenstein Drive Roseland, New Jersey 07068 Tel: (973) 597-2500 Lead Counsel to Lead Plaintiff: BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP Katherine M. Sinderson Jesse L. Jensen Kate W. Aufses 1251 Avenue of the Americas New York, NY 10010 Tel: (212) 554-1400 About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as investment banker. FRONTIER COMMUNICATIONS: U.S. Bank National Objects to Plan ----------------------------------------------------------- U.S. Bank National Association, as indenture trustee under three Subsidiary Unsecured Notes Indentures, and on behalf of the holders of $700 million in outstanding principal amount of Subsidiary Unsecured Notes issued respectively by the debtors Frontier California Inc., Frontier Florida LLC, and Frontier North Inc. (the "Subsidiary Debtors"), submitted a precautionary objection in connection with the hearing on confirmation of Third Amended Plan of Reorganization of Frontier Communications Corporation and its debtor affiliates. U.S. Bank asserts that: * It is a basic principle of bankruptcy law each separate bankruptcy estate in a multi-debtor case must be treated separately unless grounds for substantive consolidation are demonstrated. Here, there has been no substantive consolidation. * The Debtors are not free to cancel the Intercompany Claims owing to the Subsidiary Debtors to the detriment of the holders of the Subsidiary Unsecured Notes, and the Debtors have very appropriately provided assurances that they will not do so. The Subordinated Unsecured Notes Trustee simply seeks to have these assurances and disclosures included within the confirmation order. * Consistent with the July 15 Notice, the Suggested Language would limit Debtors’ Class 13 elections of the Plan, to make it clear that Debtors would not impair the Subsidiary Unsecured Notes by confiscating important economic assets in the form of Intercompany Claims held by Subsidiary Debtors, including super priority administrative expense claims. * The Subsidiary Unsecured Notes Trustee respectfully requests that the Court condition approval of the Plan upon the inclusion of the Suggested Language set forth in the Confirmation Order. A full-text copy of the Subsidiary Unsecured Notes Trustee's objection is available at https://tinyurl.com/y4cqvzf6 from PacerMonitor.com at no charge. Counsel for U.S. Bank National Association: KELLEY DRYE & WARREN LLP 101 Park Avenue New York, New York 10178 Tel: (212) 808-7800 Fax: (212)-808-7897 James S. Carr, Esq. Kristin S. Elliott, Esq - and - MASLON LLP 3300 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402 Tel: (612) 672-8200 Clark T. Whitmore, Esq. Jason Reed, Esq. About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as investment banker. GARTNER INC: S&P Rates New $800MM Senior Unsecured Notes 'BB' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level and '3' recovery ratings on Gartner Inc.'s proposed $800 million senior unsecured notes due 2030. Gartner also plans to amend and restate its senior secured credit facility and put in place a $1.4 billion senior secured credit facility due 2025 comprising a $1 billion revolving credit facility (replacing its previous $1.2 billion revolving credit facility) and a $400 million term loan A. This credit facility is unrated. "The reduction in its revolving credit facility size reduces potential secured claims in a default scenario and improves the recovery prospects for the company's unsecured debt in our view," S&P said. As a result, S&P is revising its recovery ratings on the company's senior unsecured notes due 2028 to '3', indicating meaningful (50% to 70%; rounded estimate 60%) recovery in a payment default scenario, from '4'. "The stable outlook continues to reflect our expectation that Gartner's cost-avoidance measures in 2020 and relatively stable performance in the company's research segment will allow it to maintain leverage at or below the mid-3x area over the next 12 months," S&P said. S&P views Gartner's proposed transactions as leverage neutral. Gartner plans to use the net proceeds of the proposed $800 million senior unsecured notes issuance along with cash on hand to repay or redeem the $800 million outstanding principal amount on its 5.125% senior unsecured notes due in April 2025. The proposed amendment to the company's credit facility includes a $1 billion revolving credit facility and a $400 million term loan. Because the company's pro forma funded debt remains largely unchanged, S&P views these transactions as leverage neutral and as enhancements to the company's debt maturity profile. Recovery of unsecured debt claims improves because of the reduction in the revolving credit facility size as a part of the credit facility amendment. "We assume a smaller draw on the company's revolving credit facility in our default scenario as a result of the reduction in the size of the facility to $1 billion from $1.2 billion. This contributes to increased recovery prospects for the company's unsecured claims and drives our recovery rating revision to '3' from '4' on Gartner's senior unsecured debt," S&P said. All other ratings, including S&P's 'BB' issuer credit rating and stable outlook, on Gartner Inc. are unchanged. GCI LLC: S&P Puts 'B-' Issuer Credit Rating on CreditWatch Positive ------------------------------------------------------------------- S&P Global Ratings placed its 'B-' issuer credit rating on U.S.-based wireless and cable provider GCI LLC's (GCI) on CreditWatch with positive implications. Also, S&P is placing its issue-level ratings on GCI's secured and unsecured debt on CreditWatch with positive implications. This includes the company's proposed $114 million add-on to its term loan B due 2025 (total to be $350 million) and the $550 million revolver due 2023. GCI's parent, GCI Liberty Inc., announced that it entered into an agreement under which Liberty Broadband will acquire GCI Liberty in a stock-for-stock merger, representing an $8.7 billion equity value for the GCI Liberty transaction. Pro forma for the merger, Liberty Broadband will provide more asset coverage and will be able to access an incremental $24 billion in unencumbered shares of Charter Communications (Charter) with which to support GCI. This is in addition to the Charter and LendingTree (TREE) stakes currently at GCI, valued at about $4.4 billion. Despite the COVID-19 pandemic and severe recession, GCI's operating and financial results have been stronger than S&P's expectations, mainly due to growth in the broadband segment. "The positive CreditWatch listing reflects our view that the improved asset coverage from the transaction benefits GCI's creditors since the equity stakes in CHTR and TREE could provide coverage of the debt or provide support for liquidity in a stressed scenario," S&P said. "That said, we do not believe the equity stakes will be used for deleveraging purposes unless GCI's operating and financial performance deteriorates significantly, namely the CHTR assets, which we view as strategic," the rating agency said. GCI's second-quarter operating results outperformed S&P's expectations. The company increased year-over-year revenue and adjusted EBITDA by 3.3% and 11%, respectively. Strong consumer broadband demand and healthy wireless subscriber trends contributed to modest top line growth as the company added 3,500 wireless and 3,700 broadband subscribers in the quarter. S&P expects demand for GCI's consumer broadband will continue growing at a healthy pace as it takes market share from its telecom competitors that use copper-based infrastructure with inferior data speeds. Furthermore, remote learning and work-from-home conditions should contribute to customers taking faster data speeds, resulting in higher average revenue per user (ARPU). Despite weak economic conditions, S&P believes consumers are highly unlikely to disconnect their broadband service, especially given the importance of having a fast and reliable broadband internet connection, particularly as more people migrate to over-the-top (OTT) video platforms. Still, S&P recognizes that GCI faces a challenging macroeconomic environment in Alaska, in part because of the effects of the coronavirus pandemic and the adverse trends in the oil and tourism industries. "We intend to resolve the CreditWatch placement when the transaction closes, most likely in the first half of 2021. We believe an upgrade, if any, would likely be one notch," S&P said. GENESIS PLACE: Case Summary & 10 Unsecured Creditors ---------------------------------------------------- Debtor: Genesis Place, LLC DBA Genesis Place Apartments 2973 Getwell Road Suite 3 Memphis, TN 38118 Business Description: Genesis Place, LLC classifies its business as Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: September 15, 2020 Court: United States Bankruptcy Court Western District of Tennessee Case No.: 20-24485 Judge: Hon. David S. Kennedy Debtor's Counsel: Michael P. Coury, Esq. GLANKER BROWN PLLC 6000 Poplar Ave Suite 400 Memphis, TN 38119 Tel: 901-525-1322 Email: mcoury@glankler.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Terry McCool, chief manager. A copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XUPS3LA/Genesis_Place__LLC__tnwbke-20-24485__0001.0.pdf?mcid=tGE4TAMA GEORGIA DEER: Cain Buying 2014 Dodge 5500 Rollback for $36K ----------------------------------------------------------- Georgia Deer Farm, Inc. asks the U.S. Bankruptcy Court for the Northern District of Georgia to authorize the sale of a 2014 Dodge 5500 Rollback, VIN 3C7WRMDLOEG292377, to Cain Equipment for $36,000. The Vehicle serves as security in regards to a loan held by Chrysler Capital. The Debtor estimates the balance of the loan with Chrysler Capital to be approximately $6,000. The Debtor has determined that it is in its best interest to sell the Property. The fair market value of the Vehicle is approximately $36,000. The Debtor asks approval to sell the Vehicle to the Buyer for $36,000 under the terms of the Purchase Agreement. The Vehicle will be sold free and clear of all liens, claims and encumbrances. By selling the Vehicle directly to Cain, the Debtor will save the costs of sale, including but not limited to commissions, which will directly benefit its creditors. The Debtor proposes to payoff the lien held by Chrysler Capital and to remit the remaining funds to its counsel to be held in escrow pending further order of the Court. Time is of the essence in the sale. A telephonic hearing on the Motion is set for Sept. 17, 2020 at 10:15 a.m. Objections, if any, must be filed within 21 days of the entry of the notice. A copy of the Agreement is available at https://tinyurl.com/y3qks5hd from PacerMonitor.com free of charge. About Georgia Deer Farm Georgia Deer Farm, Inc., a tractor and farm equipment dealer in Roopville, Ga., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-10563) on March 13, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. The case was previously assigned to the Hon. W. Homer Drake and was later reassigned to the Hon. Lisa Ritchey Craig. The Debtor is represented by The Falcone Law Firm, P.C. GEORGIA DEER: Caldwell Buying International Spreader 8100 for $14K ------------------------------------------------------------------ Georgia Deer Farm, Inc., asks the U.S. Bankruptcy Court for the Northern District of Georgia to authorize the sale of a 2000 International Spreader 8100, VIN 1H5HBAIN1YH290067, to Caldwell Farms for $13,500. The vehicle serves as partial security in regards to a loan held by Synovus Bank. The value of the Vehicle is less than the total amount owed to Synovus Bank. The Debtor has determined that it is in its best interest to sell the Vehicle. The fair market value of the Vehicle is approximately $13,500. The Debtor asks approval to sell the Vehicle to the Buyer for $13,500 under the terms of the Purchase Agreement. The Vehicle will be sold free and clear of all liens, claims and encumbrances. By selling the Vehicle directly to Caldwell Farms, the Debtor will save the costs of sale, including but not limited to commissions, which will directly benefit its creditors. The Debtor proposes to remit all proceeds to the lienholder, Synovus Bank. Time is of the essence in the sale. A telephonic hearing on the Motion is set for Sept. 17, 2020 at 10:15 a.m. Objections, if any, must be filed within 21 days of the entry of the notice. A copy of the Agreement is available at https://tinyurl.com/y42y5htm from PacerMonitor.com free of charge. About Georgia Deer Farm Georgia Deer Farm, Inc., a tractor and farm equipment dealer in Roopville, Ga., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-10563) on March 13, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. The case was previously assigned to the Hon. W. Homer Drake and was later reassigned to the Hon. Lisa Ritchey Craig. The Debtor is represented by The Falcone Law Firm, P.C. GLOBAL MEDICAL: S&P Rates New Senior Secured Term Loan 'B' ---------------------------------------------------------- S&P Global Ratings assigned its 'B' rating and '3' recovery rating to Global Medical Response Inc.'s (GMR) proposed senior secured term loan due in 2025 and senior secured notes due in 2025. The '3' recovery rating indicated its expectation for average (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. S&P expects the company to use the proceeds to redeem its outstanding term loan maturing in March 2022. The transaction is leverage neutral. S&P's 'B' long-term issuer credit rating and stable outlook on GMR reflect the substantial scale (about $4.2 billion in revenues in 2019), good geographic diversity, and earnings stability in the ground transport segment. Moreover GMR's relationships with governments to provide emergency services during times of natural and health disasters helps mitigate pressures in some scenarios, as demonstrated during the COVID-19 pandemic. This provides diversification to the highly fixed-cost structure and weather-sensitive emergency air transport business. The rating also reflects substantial exposure to both poor reimbursement from government payers and uncompensated care in the air transport business due to the emergency nature of services. It also reflects legislative initiatives to address surprise billing (when a patient receives an out-of-network charge and is billed for amounts not covered by the insurer). This could materially hinder profitability, as that part of the business has EBITDA margins above corporate average. The rating is constrained by the aggressive financial policy of the private equity sponsor owners and S&P's expectation that, despite improved leverage to around 6.5x (as of June 2020), leverage is unlikely to decline below 6x (the threshold for an upgrade) on a sustained basis under the current owners. For a more complete rationale for the ratings, refer to S&P's full analysis published Nov. 19, 2019. ISSUE RATINGS - RECOVERY ANALYSIS Key analytical factors -- GMR's capital structure comprises a $500 million asset-based lending (ABL) revolver due in 2023, $1.37 billion senior secured term loan B due in 2025, $500 million of senior secured notes due in 2025, about $1.42 billion outstanding of senior secured term loan B-2, $730 million unsecured term loan, and $370 million of 6.375% senior unsecured notes. -- S&P assumes the ABL revolver will be 60% drawn, LIBOR of 250 basis points at default, and some rise in margins following a breach in the financial covenant. -- Given continued demand for its services, S&P believes GMR would remain a viable business and therefore reorganize rather than liquidate following a hypothetical payment default. -- Consequently, S&P uses an enterprise valuation methodology to evaluate its recovery prospects. S&P values the company on a going-concern basis using a 6x multiple of the rating agency's projected EBITDA at default, consistent with the multiples the rating agency uses for similar companies. -- S&P estimates that for GMR to default, EBITDA would need to decline to about $441 million, a significant deterioration from its base-case forecast. Simulated default assumptions -- Simulated year of default: 2023 -- EBITDA at emergence: $441 million -- EBITDA multiple: 6x Simplified waterfall -- Net enterprise value (after 5% administrative costs): $2.5 billion -- Valuation split (obligors/nonobligors): 100%/0% -- Collateral value available to secured creditors (after priority claims relating to the ABL): $2.3 billion -- Secured first-lien debt: $3.3 billion -- Recovery expectations: 50%-70% (rounded estimate: 65%) -- Collateral value available to unsecured creditors: $0 billion -- Unsecured debt (including pari passu deficiency claims): $2.2 billion -- Recovery expectations: 0%-10% (rounded estimate: 0%) All debt amounts include six months of prepetition interest. GRAND CANYON RANCH: Approval of Counsel's Contingency Fee Upheld ---------------------------------------------------------------- In the case captioned FANN CONTRACTING, INC., Appellant, v. GARMAN TURNER GORDON LLP., Appellee, Case No. 2:19-cv-00716-GMN (D. Nev.), Fann Contracting, Inc. appeals the Bankruptcy Court's order approving Garman Turner Gordon, LLP's application for contingency fee. Upon review, District Judge Gloria M. Navarro affirms the Bankruptcy Court's order. This case arises out of Grand Canyon Ranch, LLC's voluntary petition for relief under Chapter 11 of the Bankruptcy Code, filed on July 20, 2015. Early on in THE proceedings, the Bankruptcy Court appointed Brian D. Shapiro to act as the Chapter 11 Trustee. Mr. Shapiro then filed an application with the Bankruptcy Court to employ GTG as counsel to assist the Trustee pursuant to 11 U.S.C. section 327(a). For compensation, GTG proposed a contingency fee structure of 35% "calculated based on any sums recovered, held, or distributed by the estate, including the value of in-kind or nonmonetary distributions." That fee would rise to 40% if a reorganization plan were needed or 45% if the matter did not conclude until after a post-trial motion or notice of appeal. The Bankruptcy Court approved GTG's employment on March 15, 2016. Later in 2016, GTG proposed to the Bankruptcy Court a settlement between several interested parties to the bankruptcy petition. The settlement centered on the sale of a large area of real estate near the Grand Canyon known as the "Frontier," control of which by the Debtor was largely disputed. The terms of this potential settlement were that the "Canyon Rock Parties" would waive all claims to the Frontier and provide a $780,000 cash payment to the Bankruptcy Estate, after which the Frontier would be sold to an entity of the Canyon Rock Parties' choosing free and clear of all encumbrances. After prompting by the Bankruptcy Court to achieve a more global settlement, GTG negotiated a second settlement and sought the Bankruptcy Court's approval in April 2017. This second settlement involved the "Mared Parties" and the Canyon Rock Parties, and the terms involved a payment of $1.75 million to the Estate upon closing. In exchange for the payment, the Trustee would transfer to Mared: (i) the Frontier property, "free and clear of all liens, claims, and encumbrances, expressly including the Disputed Lease" and (ii) all of the Estate's remaining assets, including any of the Estate's personal property located on the Frontier, with the exception of the Estate's claims involving Appellant and Jim Barnes. With that $1.75 million payment, $900,000 would be paid to the Canyon Rock Parties as an "allowed secured claim." The Bankruptcy Court approved this second settlement on August 23, 2017, and no party appealed that decision. Following the Bankruptcy Court's approval of the second settlement, on Nov. 28, 2017, GTG filed an application requesting fees and expenses in the amount of $590,836.93 (including a voluntary reduction of fees by $50,000) based on the 35% contingency fee structure of employment. But Appellant objected to that requested fee, asserting that the First Fee Notice and Application was procedurally improper, calculated pursuant to a misguided base computation, and based upon representations that render the fee award improvident. The Bankruptcy Court overruled Appellant's objection and approved GTG's First Fee Notice and Application. Appellant then appealed that approval to the District Court on Dec. 27, 2017. On appeal, the District Court found that the bankruptcy court erred by not considering the appropriateness of GTG's compensation award through 11 U.S.C. section 330, which warranted vacating the Bankruptcy Court's approval of fees and remand for additional consideration. While on remand, the Bankruptcy Court held an evidentiary hearing to review GTG's requested fees and expenses for reasonability under section 330. The Bankruptcy Court ultimately approved GTG's requested 35-percent contingency fee based on the $1.75 million second settlement, amounting to fees for GTG of $612,500.00. The Bankruptcy Court further awarded expenses incurred by GTG in the amount of $32,522.85. Appellant timely appealed that approval order. In this appeal, Appellant argues that the Bankruptcy Court's analysis of GTG's attorney's fees and expenses under 11 U.S.C. section 330 was "fundamentally flawed" as a matter of both law and fact. The Bankruptcy Court erred as a matter of law, according to Appellant, by not considering the "results achieved" -- particularly, that GTG would recover the full amount of its requested fees and expenses while unsecured creditors like Appellant would receive no distribution. Appellant also claims that it was "per se unreasonable" for the Bankruptcy Court to allow GTG's contingency fee to include the value of property already owned by the Estate. Next, Appellant argues that the Bankruptcy Court erred by allowing GTG to justify its requested contingency fee with unnecessary work and time spent defending its application for fees. Last, Appellant claims the Bankruptcy Court erred by failing to reduce GTG's fees based on GTG's purported breaches of ethical obligations and conflicts of interest. The Court notes that 11 U.S.C. section 330(a) provides several factors to guide a bankruptcy court's analysis on the reasonable amount of attorney's fees for a professional employed in a Chapter 11 case, such as: the time spent on services; the rates charges for such services; whether the services were necessary to the administration of, or beneficial at the time at which, the service was rendered toward the completion of the case; and whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed. Alongside those flexible factors, section 330 becomes resolute in section 330(a)(4)(A), instructing that a court "shall not allow compensation" for "unnecessary duplication of services" or services that were not "reasonably likely to benefit the debtor's estate" or "necessary to the administration of the case." Moreover, a professional like GTG hired to assist a bankruptcy trustee has a duty to scale back its services based on the reasonable expected outcome as set forth in In re Auto Parts Club, Inc., 211 B.R. 29, 34 (B.A.P. 9th Cir. 1997). Appellant argues that the Bankruptcy Court's section 330 analysis was flawed as a matter of law because it failed to consider how approving GTG's 35% contingency fee would mean over $600,000 in recovered fees while Appellant as an unsecured creditor would not recover any amount under the second negotiated settlement. Appellant argues that had the Bankruptcy Court's section 330 analysis properly considering this disparate result, it would have reduced GTG's fees and expenses to provide funds for unsecured creditors. Judge Navarro says support for Appellant's position comes from In re Auto Parts Club, Inc., where the Bankruptcy Appellate Panel for the Ninth Circuit affirmed a reduction in attorney's fees on the ground that "[t]he [bankruptcy] estate should not be consumed by professional fees, especially where the unsecured creditors receive no distribution." However, contrary to Appellant's argument, the record shows that the Bankruptcy Court's section 330 analysis did consider how GTG would recover more than $600,000 in fees while Appellant as an unsecured creditor would not receive a distribution under the second settlement's terms. Not only did the Bankruptcy Court recognize that disparity, the Bankruptcy Court provided reasons why it was not fatal to GTG's request for the 35% contingency fee. For example, the Bankruptcy Court noted that GTG's settlement negotiations ensured a reduction in the unsecured creditor pool by $13 million. The Bankruptcy Court also discussed how GTG's efforts in negotiating the second settlement enabled Appellant to obtain $200,000 to pay unsecured creditors -- "thereby providing a greater return to all unsecured creditors, including [Appellant's] dominant unsecured claim." On appeal, Appellant does not point to evidence showing these factual findings to be clearly erroneous; and the record supports them. Accordingly, unlike In re Auto Parts Club, Inc., this is not a case where an employed professional neglected the interests of unsecured creditors when securing a resolution. Nor is this a case where the professional ran up costs and drained funds even after it became reasonably apparent that a better result was unlikely to occur. The Bankruptcy Court's section 330 analysis thus does not fail from the outset or as a matter of law for ignoring the "results achieved," and the Court does not find clear error in the Bankruptcy Court's decision to not reduce GTG's fees based on the results alone. Judge Navarro also addressed whether the Bankruptcy Court abused its discretion when conducting its section 330 reasonableness review and awarding GTG its 35% contingency fee amounting to $612,500 and expenses of $32,522.85. Addressing first the $124,000 for time GTG spent litigating in state court about the Barnes Lease, the Court does not find that the Bankruptcy Court abused its discretion in considering the litigation as necessary or beneficial to the Estate for purposes of section 330. Appellant's argument is that the second negotiated settlement transferred the Northern Parcel of the Frontier into the Estate then out of the Estate to make it "free and clear" for resale. Because the Estate had control of the entire Frontier property at one point during that transfer process, Appellant argues, the Trustee "simply needed to reject the Barnes Lease" to render the related state court litigation moot. However, the record does not support the feasibility of Appellant's proposed resolution. GTG provided evidence showing that the Estate did not have the ability to reject the Barnes Lease, that doing so would "increase[ ] the pool of unsecured claims to be asserted against this estate," and that the second settlement considered these facts. Appellant did not appeal the Bankruptcy Court's approval of that second settlement, so the specific findings about its terms being in the best interests of the Estate are not reviewable now. Accordingly, the Court does not find clear error with the Bankruptcy Court viewing fees spent on the Barnes Litigation as beneficial to the Estate and compensable for purposes of section 330. A copy of the Court's Memorandum Opinion dated July 27, 2020 is available at https://bit.ly/3iqg4rk from Leagle.com. About Grand Canyon Ranch Headquartered in Las Vegas, Nevada, Grand Canyon Ranch, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 15-14145) on July 20, 2015. In the petition signed by Nigel Turner, manager, the Debtor estimated assets at between $1 million and $10 million and its liabilities at between $10 million and $50 million. Judge August B. Landis presided over the case. Matthew L. Johnson, Esq., at Johnson & Gubler, P.C., served as the Debtor's bankruptcy counsel. HENLEY PROPERTIES: Wolfe Buying Pineville Property for $23K ----------------------------------------------------------- Henley Properties, LLC, asks the U.S. Bankruptcy Court for the Western District of Missouri to authorize the sale of Lot 8, Stage Coach Lane, Twin Springs Subdivision, Pineville, Missouri, more particularly described as Section 16, Township 21 Range 30, to Shannon Wolfe for $23,000, under the terms of their Sale Contract for Vacant Land. The following sales costs, liens of record, and other charges and expenses related to the sale are to be paid out of the sale proceeds at the time of closing in the estimated amounts as indicated: a. Recorded liens of record in the amounts indicated: (i) Lien of Simmons Bank in the original amount of $99,874 (net sales proceeds to be applied to reduce loan balance), and (ii) 2019 McDonald County real estate taxes. b. Other charges and expenses in the amounts as indicated: 2019 McDonald County real estate taxes (prorated). c. Other charges and expenses in the amounts as indicated: (i) Commission to the Broker, Donna Bermingham in the amount of 6%, and (ii) $100 professional paid to real estate brokerage firm. Objections, if any, must be filed no later than seven days of the date of the notice. A copy of the Contract is available at https://tinyurl.com/yxhy4ov3 from PacerMonitor.com free of charge. About Henley Properties Henley Properties, LLC, owns and operates weddings and events venue. Henley Properties sought Chapter 11 protection (Bankr. W.D. Mo. Case No. 19-30422) on Aug. 6, 2019. In the petition signed by Floyd W. Henley and Rebecca L. Henley, members, the Debtor disclosed total assets at $2,973,329 and $1,192,562 in debt. The case is assigned to Judge Brian T. Fenimore. The Debtor tapped Mariann Morgan, Esq., at Checkett & Pauly, as counsel. HERTZ CORP: Ex-CEO Agrees to Return $2M to Settle SEC Suit ---------------------------------------------------------- he Securities and Exchange Commission on Aug. 13, 2020, charged former Hertz CEO and Chairman Mark Frissora with aiding and abetting the company in its filing of inaccurate financial statements and disclosures. Frissora has agreed to settle the charges and repay Hertz nearly $2 million in incentive-based compensation. The SEC's complaint alleges that as Hertz's financial results fell short of its forecasts throughout 2013, Frissora pressured subordinates to "find money," principally by re-analyzing reserve accounts, causing Hertz’s staff to make accounting changes that rendered the company’s financial reports materially inaccurate. According to the complaint, Frissora also led Hertz to hold rental cars in its fleet for longer periods and thus lower its depreciation expenses, without properly disclosing the change – and the risks of relying on older vehicles – to investors. In addition, the complaint alleges that Frissora approved Hertz's reaffirming its earnings guidance in November 2013, despite Hertz's internal calculations that projected lower earnings per share figures. Hertz revised its financial results in 2014 and restated them in July 2015, reducing its previously reported pretax income by $235 million. "Investors are entitled to accurate and reliable disclosures of material information about a company's financial condition," said Marc P. Berger, Director of the SEC's New York Regional Office. "We are committed to holding corporate executives accountable when their actions deprive investors of such information." The SEC’s complaint, filed in federal district court in New Jersey, charges Frissora with aiding and abetting Hertz’s reporting and books and records violations and with violating Section 304 of the Sarbanes-Oxley Act by failing to reimburse Hertz for the requisite amount of incentive-based compensation he received. Without admitting or denying the allegations, Frissora consented to a judgment permanently enjoining him from aiding and abetting any future violations of the applicable federal securities laws, requiring him to reimburse Hertz for $1,982,654 in bonus and other incentive-based compensation and requiring him to pay a $200,000 civil penalty. The settlement is subject to court approval. In December 2018, Hertz agreed to pay $16 million to settle related fraud and other charges brought by the SEC and in December 2019, the SEC issued a settled Order against Hertz former Controller Jatindar Kapur. The SEC's investigation was conducted by Jess Velona, Kenneth Byrne, Christopher Mele, and Adam Grace of the New York Regional Office, and was supervised by Sanjay Wadhwa. About Hertz Corp. 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 HERTZ GLOBAL: Faces Objections to Its Employee Incentive Schemes ---------------------------------------------------------------- Laura Layden of Fort Myers News-Press reports that car rental company Hertz Global Holdings faces opposition as it seeks bankruptcy court approval to hand out millions of dollars in bonuses to its key employees. Objections have been filed by a group of former executives, who fear the big payouts will jeopardize their promised retirement income from the company, while the U.S. trustee overseeing Hertz's Chapter 11 case questions the real intentions behind them. The Estero-based rental car company -- parent of The Hertz Corp. -- has proposed two new incentive plans, which could result in payouts of more than $14.6 million to hundreds of employees. A bankruptcy judge is scheduled to consider the approval of the incentive plans on Thursday. Hertz has argued the incentives are critical for motivating and keeping the employees in its management ranks, and necessary to compensate them for their extra hard work in challenging times. About Hertz Corp. 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 HOLOGIC INC: S&P Rates New $950MM Senior Unsecured Notes 'BB-' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level and '6' recovery ratings to Marlborough, Mass.-based medical device manufacturer Hologic Inc.'s proposed $950 million senior unsecured notes. The company will use proceeds to redeem its outstanding 4.375% unsecured notes due 2025. The '6' recovery rating reflects its expectation for negligible (0%-10%; rounded estimate: 5%) recovery in the event of default. S&P's 'BB+' issuer credit rating and existing issue-level ratings on Hologic are unchanged. The outlook is stable. "Our rating on Hologic incorporates our view of the company's leading market position in breast health and molecular diagnostics, which is supported by high barriers to entry, its above-average profitability, and moderate product and geographic diversity," S&P said. While S&P expects the COVID-19 pandemic to affect Hologic's operating performance in fiscal year 2020, the rating agency believes the company is well-positioned to withstand the impact. It should benefit from the sales of COVID-19 diagnostic tests, which S&P estimates will present a substantial tailwind in the second half of fiscal 2020 and in fiscal 2021, offseting the declines in other areas. Breast health and gynecology surgical segments are sensitive to the changes in hospitals' capital spending budgets and in elective procedure volumes, respectively. S&P expects revenues in both of those segments to decline in fiscal 2020. The projected recovery in fiscal 2021 could also be slow as hospitals prioritize preserving cash and tightening budget controls. In addition, revenues in Hologic's non-COVID-19 diagnostics segment are tied to testing volumes, which S&P expects to be down in 2020 and gradually recover in fiscal 2021. While S&P estimates that the tailwind from COVID-19 testing might be temporary, by the time the ensuing benefits subside, medical procedure volumes should normalize and hospitals should gradually resume their capital spending to pre-pandemic levels. "While we expect mergers and acquisitions to contribute to Hologic's growth strategy, we expect the company to maintain leverage between 2x-3x," S&P said. Issue Ratings--Recovery Analysis Key analytical factors -- Hologic's capital structure pro forma for new issuance will consist of a $1.5 billion revolving credit facility, $1.5 billion first-lien term loan, $400 million unsecured notes, and the proposed $950 million unsecured notes. The revolver and the term loan mature on Dec. 15, 2023, the $400 million notes mature on Feb. 1, 2028, and the proposed $950 million notes will mature 2029-2030. -- S&P treats the $225 million one-year receivables securitization program, which is currently in hibernation, as priority claims in its recovery analysis. -- S&P's simulated default scenario contemplates a default in 2025, stemming from a combination of unanticipated operational challenges, adverse changes to reimbursement, and the development of superior technologies by competitors. -- S&P assumes the revolver is 85% drawn at default. -- S&P has valued Hologic on a going-concern basis using a 6.5x multiple of its projected emergence-level EBITDA, consistent with its treatment of peers. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $378 million -- EBITDA multiple: 6.5x -- Jurisdiction: U.S. Simplified waterfall -- Net enterprise value (after 5% administrative costs): $2.33 billion -- Valuation split (obligors/nonobligors): 85%/15% -- Priority claims (securitization): $229 million -- Collateral value available to first-lien creditors: $1.98 billion -- Secured first-lien debt: $2.45 billion -- Recovery expectations: 70%-90%; rounded estimate: 80% -- Value available to unsecured creditors: $122 million -- Unsecured creditors (including deficiency claims from secured debt): $1.85 billion -- Recovery expectations: 0%-10%; rounded estimate: 5% Note: All debt amounts include six months of prepetition interest. HORSEHEAD HOLDING: May Pursue Claims Against TOPCOR, Court Says --------------------------------------------------------------- American Zinc Recycling Corp., filed the case captioned AMERICAN ZINC RECYCLING CORP., Plaintiff, v. TOPCOR AUGUSTA, LLC, Defendant, Civil Action No. 15-198 (W.D. Pa.) for breach of contract and breach of warranty against Defendant TOPCOR Augusta, LLC. TOPCOR filed a motion for summary judgment. Upon analysis, Magistrate Judge Patricia L. Dodge denied TOPCOR's motion. The action was commenced by Horsehead Corporation in February 2015. The Complaint alleged claims for breach of contract (Count I), breach of warranty (Count II) and indemnification (Count III). On August 29, 2018, a Report and Recommendation ("R&R") was issued by Magistrate Judge Mitchell recommending that a motion for summary judgment filed by TOPCOR be granted as to Count III and denied as to Counts I and II. On Jan. 11, 2019, Judge Cercone adopted the R&R as the opinion of the Court. The parties subsequently consented to jurisdiction before the undersigned magistrate judge. By order dated April 24, 2020, the Court granted Horsehead's motion to amend the caption of the case to substitute "American Zinc Recycling Corp." for "Horsehead Corporation." The claims, in this case, arose out of work performed at a zinc and diversified metals production facility (the "Plant") located on property located in Mooresboro, North Carolina (the "Property"). According to the Complaint, Horsehead began construction of this facility in 2011. The equipment used in the production process includes large steel tanks used to store electrolytes. In 2012, Horsehead and TOPCOR entered into a contract pursuant to which TOPCOR would perform certain work, including application of coatings to five electrolyte tanks. Horsehead paid TOPCOR for the Work, and Horsehead and AZR have utilized the Tanks and the Plant for their operations. Each of the Tanks is 40 feet in height with a diameter of 40 feet and a capacity of around 357,000 gallons. They sit on concrete pads in a containment area and are connected by piping to other equipment at the Plant. The Plant also includes maintenance ponds. According to the Complaint, after TOPCOR completed its coating work, all of the Tanks leaked, causing electrolyte solution to seep through the coating and erode the tank walls. AZR claimed that while TOPCOR repaired the leaks, this only partially addressed the damages sustained by AZR due to TOPCOR's allegedly improper work. It asserted that TOPCOR breached the parties' contract and its warranty. In November 2015, after the action was commenced, the parties entered into a Stipulation after one of the Tanks suffered another leak on or about August 20, 2015 and AZR intended to claim additional damages against TOPCOR as a result (the "Additional Tank Leak Allegations"). As stated in the Stipulation, the parties agreed that it would serve as a substitute for AZR filing an amended complaint and TOPCOR filing an amended answer regarding the Additional Tank Leak Allegations. The damages claimed by AZR have changed over time. AZR is presently claiming damages of more than $2.7 million. They include $1,482.110.80 for replacement of all interior coatings and some of the exterior coatings for four of the Tanks by New Kent Coatings for; $479,701.00 for repair and replacement of coatings by Infratech Services for a fifth Tank; and $300,158.16 for tank repairs by Fisher Tank on all five Tanks. "Initial repairs" were done in 2014 and 2015 and "full repairs" were performed in 2018 and 2019. TOPCOR noted that neither the Complaint nor the Stipulation/Amendment to the Complaint alleged that that Horsehead paid for the alleged repairs without full knowledge of the facts or as a result of fraud or duress by TOPCOR, HMPI, HMPL, or AZP. Similarly, AZR has not claimed that it was pressured by anyone, including HMPI, HMPL, AZP, or TOPCOR, to pay for repairs and costs related to property owned by HMPI, HMPL, or AZP, or that TOPCOR committed any fraudulent acts that prevented AZR from knowing it was paying for repairs to property that it did not own. AZR's damages did not include any claims by third parties. Its corporate designee testified that AZR is unaware of any claims made against AZR by AZP or by HMPI or HMPL against Horsehead. There are no agreements, understandings, or contracts that required Horsehead to pay for any damages to the Property or business property owned by HMPI or HMPL; similarly, AZR and AZP did not enter into any agreement that requires AZR to pay AZP for damages to its Property or its business property. According to Judge Dodge, courts have varied in their description and analysis of the voluntary payment doctrine. The voluntary payment doctrine has sometimes been described as follows: "when, under a mistake of law, one voluntarily and without fraud or duress pays money to another with full knowledge of the facts, the money paid cannot be recovered." Relying on the voluntary payment doctrine, TOPCOR asserted that it is entitled to judgment as a matter of law with respect to AZR's claims. It argued that both Horsehead and AZR were volunteers in making the payments that AZR sought to recover in this action and that neither had a legal obligation to do so because they did not own the Property, the Plant or its equipment when the claimed damages were sustained. The damages sought by AZR are for repairs to the Tanks, property that has always been owned by separate entities, not Horsehead or AZR. Thus, TOPCOR contended, AZR is barred from recovery because its payments to third-party vendors were entirely voluntary. AZR argued that most of the cases cited by TOPCOR involved voluntary payments that were made to another party in the lawsuit, not to a third party. TOPCOR countered that the voluntary payment doctrine is not limited to situations in which payment has been made to a party in a lawsuit. According to Judge Dodge, regardless of how the voluntary payment doctrine is defined, TOPCOR has failed to demonstrate that this doctrine applies here. AZR is not seeking to recover monies paid to TOPCOR under some mistake of law, nor is the cost of the necessary repairs the legal obligation of AZP under the facts of this case. Rather, AZR brought claims against TOPCOR pursuant to the terms of the contract between them. It argued that due to TOPCOR's breaches, it was required to repair the Tanks in order to use them in its operations. Simply put, the fact that Horsehead and AZR did not own the Tanks at the time the work was performed is irrelevant and does not make AZR a "volunteer" for purposes of this doctrine. AZR, not AZP, contracted with TOPCOR, paid money to TOPCOR and sought damages due to what it claims is TOPCOR's breach. Judge Dodge concluded that AZR may properly pursue its claims. TOPCOR noted that while the Court dismissed AZR's indemnification claim, AZR's remaining claims are merely an effort to recast this claim by seeing to recover damages to someone else's property. The Court disagreed. Judge Dodge said that TOPCOR's first motion for summary judgment was granted regarding this claim because the indemnification clause in the contract covered only third-party claims. Here, AZR did not seek damages from TOPCOR for third-party claims. There are no third-party claims in this case and the fact that the Tanks are not owned by AZR does not change the result. AZR alleged that it sustained harm as a result of TOPCOR's actions. Thus, Judge Dodge held that TOPCOR's argument that AZR is trying to revitalize the dismissed indemnification claim is unavailing. A copy of the Court's Memorandum Opinion dated August 10, 2020 is available at https://bit.ly/31PVT0t from Leagle.com. About Horsehead Holding Corp. Horsehead Holding Corp. is the parent company of Horsehead Corporation, a U.S. producer of specialty zinc and zinc-based products and a recycler of electric arc furnace dust; The International Metals Reclamation Company, LLC, a recycler of metals-bearing wastes and a leading processor of nickel-cadmium (NiCd) batteries in North America; and Zochem Inc., a zinc oxide producer located in Brampton, Ontario. Horsehead, headquartered in Pittsburgh, Pa., has seven facilities throughout the U.S. and Canada. The Debtors currently employ approximately 730 full-time individuals. Horsehead Holding Corp., Horsehead Corporation, Horsehead Metal Products, LLC, The International Metals Reclamation Company, LLC, and Zochem Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10287 to 16-10291) on Feb. 2, 2016. The Petition was signed by Robert D. Scherich as vice president and chief financial officer. Judge Christopher S. Sontchi is assigned to the case. The Debtors have engaged Kirkland & Ellis LLP as general counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, RAS Management Advisors, LLC, as financial advisor, Lazard Middle Market LLC as investment banker, Epiq Bankruptcy Solutions, LLC, as claims and noticing agent and Aird & Berlis LLP as Canadian counsel. The Debtors disclosed total assets of $1 billion and total liabilities of $544.6 million. As of the Petition Date, the Debtors' consolidated long-term debt obligations totaled approximately $420.7 million. Andrew Vara, acting U.S. trustee for Region 3, appointed seven creditors of Horsehead Holding Corp. to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP serves as counsel to the Committee, while Drinker Biddle & Reath LLP serves as co-counsel. The Unsecured Creditors Committee is represented by Kenneth A. Rosen, Esq., Bruce Buechler, Esq., and Philip J. Gross, Esq., at Lowenstein Sandler LLP. The U.S. Trustee's office appointed Aquamarine Capital and six others to serve on Horsehead Holding Corp.'s committee of equity security holders. The Equity Committee tapped Nastasi Partners as its bankruptcy co-counsel; Richards, Layton & Finger P.A. as its co-counsel; and SSG Capital Advisors, LLC as its financial advisor. IDATA MEDICAL: Unsecured Creditors to Receive $36,000 Over 2 Years ------------------------------------------------------------------ Idata Medical Documentation, LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, a Disclosure Statement describing Amended Plan of Reorganization dated August 4, 2020. Class 5 General Unsecured Claims (Estimate amount: $52,640 in filed unsecured claims plus any deficiency claims resulting from valuation orders) will be paid pro rata. Distributions will be made quarterly for a term of 2 years to begin on the Effective Date. Each distribution will be in the sum of $4,500 for a total dividend to holders of general unsecured claims of $36,000. It is anticipated that ownership of all property of the estate will vest with the Debtor on the Effective Date, with Mr. Kendall Tant to retain his ownership of the Debtor. It is also anticipated that Mr. Tant will continue to maintain and oversee the day to day operations of the Debtor, and will continue to do so with fair market compensation from the Debtor. The payments required under this plan will be funded from the business revenues of the Debtor, consistent with the budget and projections, to be filed separately. The Debtor will continue to manage its financial affairs post-confirmation, with Mr. Tant continuing to lead the business operations of the Debtor. A full-text copy of the disclosure statement dated August 4, 2020, is available at https://tinyurl.com/y3u5utjs from PacerMonitor.com at no charge. Attorneys for the Debtor: Scott W. Spradley Law Offices of Scott W. Spradley, P.A. 109 South 5th Street P.O. Box 1 Flagler Beach, FL 32136 Tel: (386) 693-4935 Fax: (386) 693-4937 E-mail: scott@flaglerbeachlaw.com About Idata Medical Documentation IData Medical Documentation, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-02474) on July 1, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of less than $500,000. The case is assigned to Judge Jerry A. Funk. The Debtor is represented by the Law Offices of Scott W. Spradley, P.A. IL MULINO: Seven Branches File for Chapter 11 Bankruptcy -------------------------------------------------------- Dennis Lynch of the New York Post reports that Wainscott Il Mulino outpost and six other restaurants under the brand have filed for Chapter 11 bankruptcy. The filing does not include New York City locations. The seven restaurants are backed by a five-year-old $35 million loan agreement with Benefit Street Partners, now in default. Il Mulino owner Jerry Katzoff said the filing was made to prevent BSP from taking over the properties, which BSP signaled it wanted to do after the restaurants closed in March amid the coronavirus pandemic. Katzoff said there was already tension with BSP over the loan before the pandemic hit. The March 2020 closure effectively sealed the deal on the viability of the restaurants. About Il Mulino Il Mulino owns and operates Italian restaurants throughout the United States. The upscale Il Mulino restaurant chain has filed for Chapter 11 bankruptcy protection for seven of its 16 branches to keep the operation's principal creditor from seizing control. According to FSR, the 16-unit company filed on behalf of seven locations across Miami, Puerto Rico, Las Vegas, Long Island, and Atlantic City. The locations not included in the filing are five New York City stores -- the flagship in Greenwich Village and four locations in Manhattan—and two in Florida, one in Tennessee, and another in the Poconos. K.G. IM, LLC, and its affiliates, including IL Mulino USA, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11723) on July 29, 2020. The other debtors are IM LLC III, IMNYLV, LLC, IM NY, Florida, LLC, IM NY, Puerto Rico, LLC, IMNY AC, LLC, IM Products, LLC, IM Long Island Restaurant Group, LLC, IM Long Island, LLC, IM Franchise, LLC, IM 60th Street Holdings, LLC, IM Broadway, LLC, and IMNY Hamptons, LLC. The Hon. Martin Glenn presides over the case. In the petition signed by Gerald Katzoff, manager, the Debtor was estimated to have $50 million to $100 in assets and $10 million to $50 million in liabilities. ALSTON & BIRD LLP, serves as bankruptcy counsel to the Debtors. TRAXI LLC and DAVIS & GILBERT LLP, serve as special counsel. ILLINOIS HOUSING: S&P Cuts Rating on 2005 Housing Bond to 'BB+' --------------------------------------------------------------- S&P Global Ratings lowered its rating on Illinois Housing Development Authority's series 2005 multifamily housing revenue bonds, issued for Preservation Housing Management and Crestview Preservation Associates L.P.'s Crestview Village apartments project, nine notches to 'BB+' from 'AA+'. The outlook is stable. The rating action reflects S&P's discovery of an analytic error and the project's consecutive decreases in asset-to-liability parity ratio to less than 100%. The analytic error dates back to S&P's initial analysis of the transaction in 2005. At issuance and in subsequent reviews, S&P assumed in error that the transaction structure included monthly pass-through principal-and-interest payments on both the mortgage loan and bonds without reliance on reinvestment earnings. S&P has corrected the analysis to reflect the transaction's structure of monthly interest payments and semiannual principal payments, as well as mismatched mortgage and bond amortization schedules. The bullet bond maturity of roughly $1.5 million due in 2037 is not matched with the amortization of the mortgage loan; this mismatch results in a projected shortfall at maturity and debt service coverage below 1x, without reliance on significant reinvestment earnings over and above S&P's stressed reinvestment criteria. "We could lower the rating further if the date of the projected shortfall is earlier than currently expected," said S&P credit analyst Emily Avila. "We could raise the rating if the asset-to-liability parity ratio were to improve to more than 100% or if other mitigating factors are presented." The project's asset-to-liability parity ratio of 99.65%, coupled with the timing of the projected debt service coverage shortfall, caps the rating at 'BB+', as set forth in S&P's "U.S. Federally Enhanced Housing Bonds" criteria, published Nov. 12, 2019, on RatingsDirect. IMPERIAL ROI: Recon Public Sale of Dallas Property Approved ----------------------------------------------------------- Judge Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas authorized Imperial ROI, Inc.'s sale of the real property located at 8621 Hidden Meadow Drive, Dallas, Fort Worth, Texas by and through Recon Realty, Inc./Andy Williams via customary MLS sale channels for residential real property for sale to the general public, for a price sufficient to be sold free and clear of lines attached or able to be attached to the same. Within two business days after entry of the Order, the Debtor will serve a copy of the Agreed Order on all creditors and other parties in interest required to receive notice of the same in accordance with Fed. R. Bankr. P. 2002 and will file a certificate of service evidencing the same within one business day thereafter. About Imperial ROI Imperial ROI, Inc., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-31868) on July 6, 2020, listing under $1 million in both assets and liabilities. The Hon. Harlan D. Hale oversees the case. Rochelle McCullough, LLP, is the Debtor's counsel. INNOVATION PHARMACEUTICALS: Incurs $6.65M Net Loss in Fiscal 2020 ----------------------------------------------------------------- Innovation Pharmaceuticals Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $6.65 million on $423,000 of revenues for the year ended June 30, 2020, compared to a net loss of $8.68 million on $0 of revenues for the year ended June 30, 2019. As of June 30, 2020, the Company had $9.25 million in total assets, $7.78 million in total liabilities, and $1.46 million in total stockholders' equity. As of June 30, 2020, the Company's cash amounted to $6.0 million and current liabilities amounted to $7.2 million. The Company had expended substantial funds on its clinical trials and expects to continue its spending on research and development expenditures. The Company's net cash used in operating activities for the years ended June 30, 2020 was approximately $4.2 million, and current projections indicate that the Company will continue to have negative cash flows from operating activities for the foreseeable future. The Company had a working capital deficit of approximately $1.2 million and $6.7 million, respectively, at June 30, 2020 and 2019. Research and development expenses for proprietary programs decreased during the year ended June 30, 2020 compared with the year ended June 30, 2019, primarily due to less spending on its programs due to its current lack of working capital. Clinical studies and development expenses will continue to decrease in future reporting periods if there is no increase in the Company's financial liquidity. Officers' payroll decreased during the year ended June 30, 2020 compared with the year ended June 30, 2019, due to the fact that the Company's president and chief medical officer resigned on Dec. 19, 2019, which led to the decrease in officers' payroll during the year ended June 30, 2020. Employees payroll and payroll tax expenses decreased during the year ended June 30, 2020 compared with the year ended June 30, 2019, due to fewer employees engaged in preclinical development after June 30, 2019, which led to the decrease in employees' payroll during the year ended June 30, 2020. Stock-based compensation - officers decreased during the year ended June 30, 2020 compared with the year ended June 30, 2019, due to the fact that the Company's President and Chief Medical Officer resigned on Dec. 19, 2019 and the Company reversed the stock-based compensation expenses of approximately $251,000 based on the amount of those unvested options and stock awards the Company expensed in the current year and all prior periods. Stock-based compensation - employees decreased during the year ended June 30, 2020 compared with the year ended June 30, 2019, due to the decrease of vesting in the number of stock awards granted to employees in 2020. Stock-based compensation - consultants decreased during the year ended June 30, 2020 compared with the year ended June 30, 2019, due to less stock awards being granted to consultants during the year ended June 30, 2020. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1355250/000147793220005387/ipix_10k.htm About Innovation Pharmaceuticals Innovation Pharmaceuticals Inc. (IPIX) -- http://www.IPharmInc.com/ -- is a clinical stage biopharmaceutical company developing a portfolio of innovative therapies addressing multiple areas of unmet medical need, including inflammatory diseases, cancer, infectious disease, and dermatologic diseases. Innovation Pharmaceuticals reported a net loss of $8.68 million for the year ended June 30, 2019, compared to a net loss of $16.36 million for the year ended June 30, 2018. INNOVATIVE DESIGN: Delays Filing of July 31 Quarterly Report ------------------------------------------------------------ Innovative Designs, Inc. filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Quarterly Report on Form 10-Q for the period ended July 31, 2020. The Company said its outside auditors have not completed their work in connection with compiling the financial information that is a part of the Form 10-Q. It is expected that the work will be completed within the extended filing period. About Innovative Designs Headquartered in Pittsburgh, Pennsylvania, Innovative Designs, Inc. operates in two separate business segments: cold weather clothing and a house wrap for the building construction industry. Both of its segment lines use products made from INSULTEX, which is a low-density foamed polyethylene with buoyancy, scent block, and thermal resistant properties. The Company has a license agreement directly with the owner of the INSULTEX Technology. Innovative Designs recorded a net loss of $841,979 for the year ended Oct. 31, 2019, compared to a net loss of $582,882 for the year ended Oct. 31, 2018. As of April 30, 2020, the Company had $1.57 million in total assets, $730,392 in total liabilities, and $838,961 in total stockholders' equity. Louis Plung & Company, LLP, in Pittsburgh, Pennsylvania, the Company's auditor since 2006, issued a "going concern" qualification in its report dated March 16, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The auditor further stated that, "In early 2020, an outbreak of a novel strain of coronavirus was identified and infections have been found in a number of countries around the world, including the United States. The coronavirus and its impact on trade including customer demand, travel, employee productivity, supply chain, and other economic activities has had, and may continue to have, a significant effect on financial markets and business activity. The extent of the impact of the coronavirus on our operational and financial performance is currently uncertain and cannot be predicted." INTERIM HEALTHCARE: U.S. Trustee Objects to Plan & Disclosures -------------------------------------------------------------- United States Trustee (UST) for Region 5 objects to Disclosure and Plan of Reorganization of Debtor Interim Healthcare of Southeast Louisiana, Inc. The UST objects that the Plan does not comply with applicable Code provisions or with applicable law. The Plan contains discharge and exculpation provisions that together are overbroad and contain prohibited non-debtor third party releases. The UST claims that the Plan provides for the liquidation of all or substantially all of the property of the estate. As such, the Debtor is not entitled to a discharge, and Section 10.4 of the Plan should be stricken. The US Trustee objects that the Plan does not comply with the Code or applicable law as required by 11 USC §1129(a). The UST points out that the Liquidating trust assets include reserved causes of action, but these actions are not otherwise described. The Plan and Disclosure fail to provide sufficient detail of assets of the trust so that creditors may make an informed judgment of when and how much they can expect to be paid under the plan. A full-text copy of the UST's objection to disclosure statement and plan dated August 4, 2020, is available at https://tinyurl.com/yyvnpr5w from PacerMonitor.com at no charge. About Interim Healthcare of Southeast Louisiana Interim Healthcare of Southeast Louisiana, Inc., is a home health care services provider based in Covington, Louisiana. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. E.D. La. Case No. 19-13127) on Nov. 19, 2019. The Hon. Jerry A. Brown oversees the case. In the petition signed by Julia Burden, president and CEO, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Debtor is represented by Joseph Patrick Briggett, Esq., at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard. JENAMAC LLC: Seeks to Tap Valbridge Property Advisors as Appraiser ------------------------------------------------------------------ Jenamac, LLC seeks approval from the U.S. Bankruptcy Court for the District of Utah to employ Valbridge Property Advisors to conduct an appraisal of its real property. Valbridge will bill at the rate of $2,700 for the base appraisal services and $250 an hour for additional services. The firm received a retainer in the amount of $1,350 from Jesse Boone, Debtor's principal. Tyler Free, the manager of Valbridge Property Advisors, 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: Tyler A. Free Valbridge Property Advisors 1100 East 6600 South, Suite 201 Salt Lake City, UT 84121 Telephone: (801) 262-3388 Email: tfree@valbridge.com About Jenamac LLC Jenamac, LLC sought Chapter 11 protection (Bankr. D. Utah Case No. 20-21148) on Feb. 27, 2020. At the time of the filing, Debtor disclosed assets of between $500,001 and $1 million and liabilities of the same range. Judge Kevin R. Anderson oversees the case. Ted F. Stokes, Esq., at Stokes Law PLLC, is Debtor's legal counsel. KARL E. LUGUS: Unsecureds to Get $1K Per Month Until Paid in Full ----------------------------------------------------------------- Karl E. Lugus, D.D.S., P.C. filed with the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, a Plan of Reorganization and a Disclosure Statement dated August 4, 2020. Class 2 General Unsecured Claims in the estimated aggregate amount of approximately $61,292. Under the Plan, beginning on the first day of February 2021 and on the like day of each consecutive month thereafter, the Debtor will pay a pro rata share of $1,000.00 per month to the creditors holding allowed Class 2 claims until each Class 2 claimant holding an allowed claim shall receive one hundred percent of its respective allowed claim amount in full satisfaction of its allowed claims. Karl and Claire Lugus each own 50% of the equity in and to the Debtor. Under the Plan, they shall each retain their equity interests in and to the Reorganized Debtor. The Debtor will pay all claims from Debtor's cash reserves and from post-petition income. A full-text copy of the disclosure statement dated August 4, 2020, is available at https://tinyurl.com/y28an4s5 from PacerMonitor.com at no charge. Counsel for the Debtor: PAUL REECE MARR, P.C. Paul Reece Marr 300 Galleria Parkway, N.W. Suite 960 Atlanta, Georgia 30339 Tel: 770-984-2255 E-mail: paul.marr@marrlegal.com About Karl E. Lugus, D.D.S., P.C. Karl E. Lugus, D.D.S., P.C., filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 19-55763) on April 11, 2019, estimating under $1 million in both assets and liabilities. The Debtor is represented by Will Geer, Esq., at Geer and Associates, CPA, P.C. KASPIEN HOLDINGS: Incurs $899K Net Loss in Second Quarter --------------------------------------------------------- Kaspien Holdings Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $899,000 on $42.29 million of net revenue for the 13 weeks ended Aug. 1, 2020, compared to a net loss of $8.13 million on $34.26 million of net revenue for the 13 weeks ended Aug. 3, 2019. For the 26 weeks ended Aug. 1, 2020, the Company reported a net loss of $6.31 million on $73.88 million of net revenue compared to a net loss of $15.93 million on $69.39 million of net revenue for the 26 weeks ended Aug. 3, 2019. As of Aug. 1, 2020, the Company had $44.56 million in total assets, $44.99 million in total liabilities, and a total shareholders' deficit of $430,000. The Company's primary sources of liquidity are its borrowing capacity under its revolving credit facility, available cash and cash equivalents, and to a lesser extent, cash generated from operations. The Company's cash requirements relate primarily to working capital needed to operate and grow its business, including funding operating expenses and the purchase of inventory. The Company said its ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and amount of its net revenue; the timing and amount of its operating expenses; the timing and costs of working capital needs; successful implementation of its strategy and planned activities; and its ability to overcome the impact of the COVID-19 pandemic. The Company experienced negative cash flows from operations during fiscal 2019 and 2018 and it expects to incur net losses in 2020. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/795212/000114036120020509/brhc10014982_10q.htm About Kaspien Kaspien, f/k/a Trans World Entertainment Corporation, provides a platform of software and services to empower brands to grow their online distribution channels on digital marketplaces such as Amazon, Walmart, eBay, among others. The Company helps brands achieve their online retail goals through its innovative and proprietary technology, tailored strategies, and mutually beneficial partnerships. Trans World reported a net loss of $58.74 million for the fiscal year ended Feb. 1, 2020, compared to a net loss of $97.38 million for the fiscal year ended Feb. 2, 2019. As of May 2, 2020, the Company had $45.24 million in total assets, $44.79 million in total liabilities, and $452,000 in total shareholders' equity. KPMG LLP, in Albany, New York, the Company's auditor since 1994, issued a "going concern" qualification in its report dated June 15, 2020, citing that the Company continues to experience recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. KBR INC: S&P Alters Outlook to Positive, Affirms 'BB-' ICR ---------------------------------------------------------- S&P Global Ratings affirmed its ratings on Houston-based professional services provider KBR Inc., including the 'BB-' issuer credit rating and revised the rating outlook to positive from stable. At the same time, S&P assigned a 'B+' issue-level rating to the company's proposed senior unsecured notes due 2028, with a '5' recovery rating. The recovery rating indicates S&P's expectation of modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. "The positive outlook reflects the potential that we will raise the ratings if KBR successfully integrates Centauri and continues winding down its E&C business while maintaining moderate leverage," S&P said. S&P views KBR's business risk as improving following acquisition of Centauri and exit of E&C segment. Centauri adds military and intelligence space contracting capabilities to KBR's existing civilian and commercial space portfolio. It views the focus on the space segment of government contracting as increasing the company's exposure to differentiated and high-value services. S&P expects the government solutions (GS) business to reach nearly $5 billion in annual revenue next year with the addition of Centauri and on the strength of on-contract growth and new business in logistics and systems engineering--all supported by robust government spending. Separately, KBR has committed to exiting the E&C business by fulfilling its existing contracts and ceasing new bid activity. S&P views the resulting company as having improved risk characteristics that could support a higher rating. The positive outlook reflects S&P's expectation that over the next several quarters KBR continues its exit of the E&C business, successfully integrates the Centauri acquisition, and improves credit measures such that FFO to debt will be in the mid-20% area and debt to EBITDA will be around 3x. "We could change the rating outlook to stable if the E&C exit is delayed, Centauri integration underperforms, or the company fails to meet our credit measure expectations. These could occur if the company experiences operational difficulties and realizes significant losses on future contracts, or if it pursues large debt-financed acquisitions or share repurchases beyond our expectations," S&P said. "We could raise our rating on KBR if the company completes its exit of the E&C business, successfully integrates the Centauri acquisition, and improves credit measures such that FFO to debt will be in the mid-20% area and debt to EBITDA will be around 3x. KBR can achieve these expectations if the company uses discretionary cash flow to repay debt, meets growth targets for its Government Services segment, and continues to run off its E&C business," the rating agency said. KBR RATINGS: Moody's Alters Outlook on Ba3 CFR to Positive ---------------------------------------------------------- Moody's Investors Service affirmed its ratings for KBR, Inc., including the company's Ba3 corporate family rating and Ba3-PD probability of default rating, as well as its Ba1 senior secured loan ratings. Moody's also assigned a B1 rating to the company's planned $250 million senior unsecured notes issuance. The company's speculative grade liquidity rating remains SGL-1. The ratings outlook has been revised to positive from stable. Proceeds from the planned senior unsecured notes offering, along with cash raised through the sale of accounts receivable and revolver borrowings, will fund the $827 million acquisition of Centauri Holding, which is scheduled to close in late-2020. According to Moody's lead analyst Bruce Herskovics, "KBR's recently announced decision to no longer pursue fixed price engineering construction procurement contracts within the energy sector should raise the company's margin profile, lessen income volatility, and lower contingent liabilities -- factors that may ultimately support a higher rating." Even so, Herskovics added that "While the potential for upward ratings momentum has clearly improved with the strategic redirection, our immediate enthusiasm has been tempered by the absence of any disposition value following the exit from this long-standing business line, with over $1 billion of backlog having been de-booked and material associated impairment/restructuring charges recorded thus far in the first half of 2020, and the Centauri acquisition set to further depress key credit metrics." The rapid spread of the coronavirus outbreak, a deteriorating global economic outlook, low oil prices and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. While defense services contracting has been relatively less affected than most other sectors, it has not been immune to the adverse impact of the pandemic, and the company remains vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. The following is a summary of the rating actions and Moody's ratings for KBR, Inc.: Unchanged: Issuer: KBR, Inc. Speculative Grade Liquidity Rating, Unchanged at SGL-1 Assignments: Issuer: KBR, Inc. Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD5) Affirmations: Issuer: KBR, Inc. Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Senior Secured 1st Lien Bank Credit Facility, Affirmed Ba1 (LGD2) Senior Secured 1st Lien Revolving Credit Facility, Affirmed Ba1 (LGD2) Outlook Actions: Issuer: KBR, Inc. Outlook, Changed to Positive from Stable RATINGS RATIONALE The Ba3 CFR reflects KBR's growing scale in defense services with good technical capabilities, its ability to lead large contracts, and favorable revenue diversity -- spanning the US defense and federal sector as well as the foreign government market. The rating also recognizes KBR's achievement of solid organic revenue growth, fueled by acquisitions that have benefited new business development, and a less complementary but nonetheless solid niche position within energy sector services/technology. Both scale and key credit metrics could very well become strong for the rating in 2021, with revenue in the high-$5 billion range, debt-to-EBITDA below 3.5x, and free cash flow-to-debt of about 10%. Estimation of 2020 credit metrics pro forma for the acquisition is made more complex, however, by significant business combination and revenue growth within Centauri, and KBR's restructuring, asset and goodwill impairment charges of approximately $250 million thus far through 2020. The positive rating outlook recognizes the opportunity for KBR to now more fully focus the organization toward realization of potential as a national security services contractor. The company possesses a strong reputation for project management within infrastructure and mission support. Technical capabilities being added through M&A are enabling KBR's prominence within space and intelligence communities to similarly evolve. Centauri's highly cleared and educated workforce will further solidify KBR's access to well-funded programs, and will also facilitate talent recruitment. Defense system and equipment modernization will increasingly require service contractors that can efficiently innovate, making the ability to attract/deploy engineers and scientists important for competitive success. KBR's Ichthys joint venture-related project cost recovery claims represent upside to the company's long-term cash flow targets. If realized, the proceeds could be deployed in a way that improves the credit profile. The Ba1 ratings for the secured loan facilities are two notches above the CFR, reflecting the presence of lower priority debt that would absorb first losses in a stress scenario, and thereby benefit recoveries under the loan facilities. The B1 rating assigned to the senior unsecured notes reflects their effectively junior position relative to the secured debt. While KBR's convertible notes (unrated) are structurally subordinated, unguaranteed obligations of the holding company, the size of that junior-most class relative to the guaranteed senior unsecured notes is not of a sufficient magnitude to significantly benefit the relative recovery prospects for senior unsecured noteholders. The speculative grade liquidity rating of SGL-1 continues to denote a very good liquidity profile. Following the Centauri acquisition, KBR's cash balances held outside of consolidated joint ventures will be around $250 million, and the company will have almost $600 million of availability under its $1 billion revolving line of credit. The liquidity profile benefits from Moody's expectation that free cash flow will approach $300 million in 2020 (about $125 million of which emanates from the sale of accounts receivable), with low scheduled amortization under the term loan near-term and good cushion anticipated under the company's financial ratio maintenance covenants. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward ratings momentum would depend upon achievement of better reported results in 2021 than currently anticipated, with backlog growth and debt-to-EBITDA declining to 3x, free cash flow-to-debt approaching 15%, and a good liquidity profile. Downward ratings pressure would mount with contract execution problems, a free cash flow deficit, covenant headroom issues and/or leverage climbing to the high-4x range. KBR, Inc., headquartered in Houston, Texas, is a global provider of differentiated professional services and technologies delivered across a wide government, defense and industrial base. Revenues for the last twelve months ended June 30, 2020 were approximately $5.8 billion. The principal methodology used in these ratings was Aerospace and Defense Methodology published in July 2020. KETTNER INVESTMENTS: Case Summary & 16 Unsecured Creditors ---------------------------------------------------------- Debtor: Kettner Investments, LLC 9625 Mission Gorge Road No. B-2331 Santee, CA 92071 Chapter 11 Petition Date: September 16, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-12366 Judge: Hon. Karen B. Owens Debtor's Counsel: Neil B. Glassman, Esq. BAYARD, P.A. 600 N. King Street, Suite 400 Wilmington, DE 19801 Tel: 302-655-5000 Email: nglassman@bayardlaw.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by John W. Huemoeller II, manager. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OBJXSAY/Kettner_Investments_LLC__debke-20-12366__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 16 Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Columbia & Beech $8,104,152 Corporation 74 Discovery Irvine, CA 92618 Attn: Steven Napoles Email: steven@napoleslaw.com 2. Krista Llamas $2,600,000 c/o 501 Broadway, Suite 1770 San Diego, CA 92101 Attn: Donald Vaughn, Esq. Email: dav@vv-law.com 3. Procopio, Cory, Legal Fees $839,607 Hargreaves & Savitch LLP 12544 High Bluff Dr., Suite 400 San Diego, CA 92130 Attn: John Cleary Email: john.cleary@procopio.com 4. Wilenchik & Bartness $41,738 Wilenchik & Bartness Bldg 2810 North Third Street Phoenix, AZ 85004 5. Smith, Katzenstein & Jenkins Legal Fees $16,545 1000 West Street, Suite 1501 Wilmington, DE 19801 Attn: David A. Jenkins, Esq. Email: daj@skjlaw.com 6. State of California $15,000 Business Bankruptcy Franchise Tax Board Business Entity Bankruptcy MS A345 Sacramento, CA 95812 7. White & Bright $12,015 970 Canterbury Place Escondido, CA 92025 Attn: Jennifer Sinex Email: jsinex@whiteandbrite.com 8. Morris, Nichols, Arsht & $5,153 Tunnell LLP 1201 Market St, Suite 1600 Wilmington, DE 19801 Attn: RJ Scaggs Email: rscaggs@mnat.com 9. Ibarra Carillo Soto $5,094 371 E Street Chula Vista, CA 91910 10. Phillip Koehnke APC $5,000 PO Box 2025 Carlsbad, CA 92018 Email: pek@peklaw.com 11. Robert Malasek $156 11202 Moreno Avenue Lakeside, CA 92040 Email: rtmalasek@gmail.com 12. Naturewell, Inc. $146 110 West C Street, Suite 1300 San Diego, CA 92101 Attn: Robert Malasek Email: rtmalasek@gmail.com 13. Marilyn Kriebel Litigation Unknown c/o 12760 High Bluff Drive Suite 240 San Diego, CA 92130 Attn: Sean C. Coughlin, Esq. Email: scc@coughlin-law.com 14. Premium Produce Litigation Unknown c/o 11440 West Bernardo Court, Suite 300 San Diego, CA 92127 Attn: M. Cris Armenta, Esq. Email: cris@crisarmenta.com 15. Stone Ash LLC Litigation Unknown c/o 11440 West Bernardo Court, Suite 300 San Diego, CA 92127 Attn: M. Cris Armenta, Esq. Email: cris@crisarmenta.com 16. Shannon and Jeff Llamas Litigation Unknown c/o 11440 West Bernardo Court, Suite 300 San Diego, CA 92127 Attn: M. Cris Armenta, Esq. Email: cris@crisarmenta.com LA TERRAZA: Seeks Approval to Hire Knight Law Group as Counsel -------------------------------------------------------------- La Terraza, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ The Knight Law Group as its legal counsel. Knight Law Group will render the following services: (a) Advise Debtor with respect to its powers and duties in the continued operation of its business affairs and management of its property; (b) Prepare applications, reports and other legal papers, (but not financial or monthly operation reports); and (c) Perform all other necessary legal services for Debtor in connection with its Chapter 11 case. The firm's services will be provided mainly by Noel Knight, Esq., who will be paid at the rate of $250 per hour. The retainer fee is $10,000. Mr. Knight disclosed in court filings that he has no adverse connections with the estate and he has no connections with the creditors or any other party-in-interest. The attorney can be reached at: Noel Knight, Esq. The Knight Law Group 800 J St., Ste. #441 Oakland, CA 95814 Telephone: (510) 435-9210 Facsimile: (510) 281-6889 E-mail: lawknight@theknightlawgroup.com About La Terraza La Terraza, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 20-23480) on July 15, 2020, listing under $1 million in both assets and liabilities. Judge Christopher D. Jaime oversees the case. Noel Knight, Esq., at The Knight Law Group, is Debtor's legal counsel. LATAM AIRLINES: Objects Consumer Group's Motion to Lift Ch.11 Stay ------------------------------------------------------------------ Law360 reports that LATAM Airlines objected Wednesday, September 16, 2020, in New York bankruptcy court to a motion from a Chilean consumer advocacy group seeking to lift the automatic stay of litigation in LATAM's Chapter 11 case so that a lawsuit over canceled flights can move forward in Chile. The Debtor said in its objection that lifting the stay at this point would be premature and inappropriate given the stage of the Chapter 11 case and the status of the Chilean action over damages arising from flights canceled due to the COVID-19 pandemic. About LATAM Airlines LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. LATAM Airlines Group S.A. is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general bankruptcy counsel; FTI Consulting as restructuring advisor; and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. Prime Clerk LLC is the claims agent. LINKMEYER PROPERTIES: Affiliate Hires Hester Baker as Legal Counsel ------------------------------------------------------------------- Linkmeyer Kroger, LLC, an affiliate of Linkmeyer Properties, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to hire Hester Baker Krebs LLC as its legal counsel. The services that will be provided by the firm are as follows: (a) advise Debtor regarding its powers and duties and the management of its property; (b) take necessary action to avoid the attachment of any lien against Debtor's property threatened by secured creditors; (c) prepare legal papers; and (d) perform all other legal services for Debtor in connection with its Chapter 11 case. The firm received the sum of $1,717 for the filing fee. Hester Baker does not represent interests adverse to Debtor and its bankruptcy estate in the matters upon which the firm is to be engaged, according to court filings. The firm can be reached at: David R. Krebs, Esq. John J. Allman, Esq. Hester Baker Krebs LLC One Indiana Square, Suite 1600 Indianapolis, IN 46204 Tel: (317) 833-3030 Fax: (317) 833-3031 Email: dkrebs@hbkfirm.com jallman@hbkfirm.com About Linkmeyer Properties Linkmeyer Properties, LLC, Linkmeyer Kroger, LLC and Linkmeyer Development II, LLC filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Lead Case No. 20-90898) on Aug. 13, 2020. At the time of the filing, each Debtor disclosed estimated assets of less than $50,000 and estimated liabilities of between $1 million and $10 million. Judge Andrea K. Mccord oversees the cases. Hester Baker Krebs, LLC serves as Debtors' legal counsel. LITTLE JOHN'S ANTIQUE: Has Until Nov. 27 to File Plan & Disclosures ------------------------------------------------------------------- Judge Erithe Smith of the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, has entered an order within which the August 28, 2020, deadline for Debtor Little John's Antique Arms, Inc. to file a Plan of Reorganization and Disclosure Statement is continued to November 27, 2020. A full-text copy of the order dated July 31, 2020, is available at https://tinyurl.com/y5qoz6q7 from PacerMonitor.com at no charge. Attorneys for Little John's: RICHARD A. MARSHACK CHAD V. HAES MARSHACK HAYS LLP 870 Roosevelt Irvine, CA 92620 Tel: 949-333-7777 Fax: 949-333-7778 E-mail: rmarshack@marshackhays.com chaes@marshackhays.com About Little John's Antique Arms Little John's Antique Arms, Inc. --http://littlejohnsauctionservice.net/-- is a family owned antique and modern arms auction company. Little John's Antique Arms, Inc., based in Orange, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-11026) on March 24, 2020. In the petition signed by John Gangel, president, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Erithe A. Smith oversees the case. Richard A. Marshack, Esq., at Marshack Hays LLP, serves as bankruptcy counsel to the Debtor. LIVE PRIMARY: Allowed to Use Cash Collateral on Final Basis ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has approved the Cash Collateral Motion filed by Live Primary LLC. The Debtor is authorized to use Cash Collateral and grant adequate protection to noteholders nunc pro tunc as of August 19, 2020, pursuant to a Stipulation and Order entered into by and among the Debtor, Broadway 26 Waterview LLC as landlord; and the Debtor's noteholders. The Noteholders loaned the Debtor the aggregate principal amount of $2,650,000. The Debtor will pay the Noteholders, as additional adequate protection, interest at the default rate equal to $55,416, and will pay the Landlord, on account of post-Petition Date rent, $20,000. As adequate protection for the Debtor's use of Cash Collateral, the Noteholders are granted a valid, perfected, and enforceable, post-petition lien on and security interest in all of the assets of the Debtor constituting the Pre-Petition Collateral; provided that the Replacement Lien will not extend to the estate’s avoidance claims. A full-text copy of the order is available for free at https://bit.ly/3gh5x0d from PacerMonitor.com. About Live Primary LLC Live Primary dba Primary --https://liveprimary.com -- is a co-working and shared office space featuring an array of amenities designed to help people feel good while working to make their businesses thrive. It sought protection under Chapter 11 of the US Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-11612) on July 12, 2020. At the time of filing it has an estimated assets of $1 million to $10 million and an estimated liabilities of $10 million to $50 million. The case is assigned to Judge Martin Glenn. Sanford P. Rosen, Esq. of Rosen and Associates PC is the Debtor's counsel. David Kirshenbaum as Investor Representative for the Noteholders is represented by: Daniel J. Weiner, Esq. Schafer & Weiner, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: dweiner@shaferandweiner.com Broadway 26 Waterview, LLC, the Debtor's Landlord, is represented in the case by: Jay B. Itkowitz, Esq. Itkowitz PLLC The Pioneer Building 41 Flatbush Avenue, First Floor Brooklyn, NY 11217-1160 Tel: (646) 822-1801 E-mail: jitkowitz@itkowitz.com M.C. TOWING & RECOVERY: Files Emergency Bid to Use Cash Collateral ------------------------------------------------------------------ M.C. Towing and Recovery LLC asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, for entry of interim and final orders authorizing its use of cash collateral and providing adequate protection. MK Ultra Investments, LLC may claim a security interest in all accounts by virtue of a collateral agreement. If enforceable, properly perfected and valid, the MK Ultra Investments collateral agreement could possibly encumber the Debtor's Cash Collateral. However, in making the Motion the Debtor neither acknowledges nor contests MK Ultra Investments having perfected, valid liens or security interests upon any of the Debtor's assets and expressly reserves its rights to later do so. As adequate protection, the Debtor proposes to deposit all income derived from its business operations in a new debtor-in-possession bank account. The Debtor will provide to MK Ultra Investments, upon request, monthly written reporting as to the status of its accounts receivable, collections, disbursements and operations in the same or similar format as has been historically provided by Debtor. Furthermore, MK Ultra Investments will be granted a replacement lien in any Cash Collateral acquired by the Debtor subsequent to the Petition Date to the same extent, priority and validity of its respective liens in such Cash Collateral as of the Petition Date. A copy of the motion is available at https://bit.ly/2ZFBF8t from PacerMonitor.com. About M.C. Towing and Recovery LLC M.C. Towing & Recovery LLC is a comprehensive towing, recovery and roadside assistance provider serving Port Richey, Fla., and surrounding areas. It sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 8:20-bk-06280-MGW) on August 19, 2020. It is represented in court by Christopher Hixson, Esq. of Consumer Law Attorneys. MARBLE RIDGE: Left Debt With Puerto Rico Bondholders Amid Closure ----------------------------------------------------------------- Michelle Kaske of Bloomberg News reports that Marble Ridge Capital LP left a group of investors holding Puerto Rico debt after the hedge fund last month said it was winding down its operations and its founder, Dan Kamensky, was subsequently charged with securities fraud. Marble Ridge is no longer listed among investors in the Lawful Constitutional Debt Coalition, an ad hoc group of Puerto Rico bondholders, according to a disclosure filing Tuesday night to the commonwealth's bankruptcy court. The group has been negotiating with Puerto Rico on how to restructure nearly $18 billion of general obligations and commonwealth-backed debt. About Marble Ridge Marble Ridge Capital LP, based in New York and founded in 2015 by Dan Kamensky, a former partner at hedge fund firm Paulson & Co, had $1.2 billion in assets under management as of Dec. 31, 2019, a regulatory filing showed. Distressed investment firm Marble Ridge said August 2020 that it plans to wind down its funds after a government report called into question the actions of its managing partner, Dan Kamensky, during the Neiman Marcus Group bankruptcy, the firm said. "After much consideration, and in light of the operating environment, we have made the difficult decision to commence an orderly wind-down of the Marble Ridge funds," the firm told clients in a letter. "Marble Ridge will manage the liquidation in the best interests of our investors and with the objective of protecting and enhancing the value of the funds' assets." MENDENHALL AUTO: To Pay Creditors in Full From Property Refinancing ------------------------------------------------------------------- Debtors Mendenhall Auction Company and Mendenhall Auto Auction, Inc. filed an Amended Joint Plan of Reorganization and a Disclosure Statement on July 31, 2020. Mendenhall Auction Company owns real property at 6729 Auction Road in Archdale North Carolina consisting of 4 acres with a tax value of $247,590. Mendenhall Auto Auction owns Real Property at 6695 Auction Road in Archdale North Carolina consisting of 33.6 acres with a tax value of $1,083,740. The Properties are contiguous. The Debtors are actively seeking to obtain refinancing on the Properties in an amount sufficient to pay all creditors in full based on the excess equity in the Properties. As it is the Debtor's intent to obtain refinancing on the Properties, they are not actively being marketed. The Debtor's reserve the right to sell some or all of the property in an amount sufficient to pay all creditors in full. The Debtor is currently working with Truliant Federal Credit Union on the proposed refinancing and estimates that in order to pay claims in full, $500,000 will be needed. The Debtors will have 90 days from the effective date of the Plan to obtain funds sufficient to pay all Debt in full with the intent to use the Properties as Collateral on a loan or to sell all or part. Unless ordered by the Court for good cause after notice and hearing, the Debtors shall have sixty (60) days in which to complete an auction sale for such properties as is necessary to pay all claims in full. In the event that the funds received from the sale or refinancing of the Properties not be sufficient to pay all creditors in full, then all funds will be segregated based on source and used to pay creditors of the actual entity. In the event a creditor has a joint claim against each of the Debtors funds shall be allocated Pro Rata to pay such claim. Class IX General Unsecured Creditors will be paid in full within six months from the date of the order for relief with interest at the rate of interest equal to the presumptive Till rate prevailing at the Date of the Amended Plan, which is currently set at 5.25 percent per annum. As more fully set forth in funding for the Plan section 2.2, the Debtors own real property with sufficient equity to pay all creditors in full including the Allowed Class IX Claim. The Debtors shall have 90 days from the Effective Date of the Plan to obtain funds sufficient to pay all debt in full with the intent to use the Properties as Collateral on a loan or to sell all or part. The Equity Security Holders shall retain their ownership interest in the Debtors with all rights and interest as of the date of the Order confirming the Chapter 11 Plan subject to the terms and conditions of the Plan of Reorganization as confirmed. The Class XI Equity Security Holder shall receive no payment or dividends until the Class IX General Unsecured Creditors have been paid in full. A full-text copy of the Amended Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y4k727hn from PacerMonitor.com at no charge. The Debtors are represented by: Dirk W Siegmund Ivey, McClellan, Gatton & Siegmund Post Office Box 3324 Greensboro, North Carolina 27402 Telephone: (336) 274-4658 Facsimile: (336) 274-4540 About Mendenhall Auto Auction Mendenhall Auto Auction, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 19-11405) on Dec. 30, 2019. At the time of the filing, the Debtor had estimated assets of between $1,000,001 and $10 million and liabilities of between $100,001 and $500,000. Judge Benjamin A. Kahn oversees the case. The Debtor tapped Dirk W. Siegmund, Esq., at the Law Firm of Ivey, McClellan, Gatton & Siegmund, LLP, as its legal counsel. MERCHANT LLC: Unsecured Creditors to Receive Full Payment in Plan ----------------------------------------------------------------- The Merchant LLC submitted to its creditors a First Amended Chapter 11 Plan and a corresponding Disclosure Statement on July 31, 2020. On Oct. 29, 2019, Michael J. Peloquin "or his nominee", entered into a Contract of Sale of Real Estate (the “Contract”) with New Georgetown Properties, LLC for the purchase of approximately 39.3 acres of raw land for use as the site of the retirement community. The Plan has the singular purpose of allowing the debtor to complete the purchase transaction under the terms of the Contract. The Plan proposes that the land purchase provided for in the Contract and all closing costs are to be financed entirely by Michael Peloquin, who will retain his interest in the reorganized debtor. Class A consists of the unsecured claim of New Georgetown Properties, LLC in the amount of $25,000.00. This claim is based upon the escrowed deposit under the Contract, which the Debtor proposes to assume. This class shall be paid 100% of its allowed claim on the date of the closing of the assumed Contract. Class B consists of the unsecured claims of Francis M. Donnarumma Esq. in the amount of $8,500.00, Blue Moon Design Architectural Design LLC in the amount of $20,400.00 and of Miller Consultants in the amount of $46,795.00. This class shall be paid 100% of their allowed claims upon the closing of the Construction Financing, plus interest at the federal judgment rate in existence on the date of confirmation. The Plan has the singular purpose of allowing the Debtor to assume the Contract and complete its purchase of the subject real property, whereupon it shall apply for a final decree. The Debtor shall fund the Plan from the investment income infused by its principal. A full-text copy of the first amended disclosure statement and plan dated July 31, 2020, is available at https://tinyurl.com/y4bpnnm4 from PacerMonitor.com at no charge. The Debtor is represented by: Edward P. Jurkiewicz Lawrence & Jurkiewicz, LLC 60 East Main Street Avon, CT 06001 Tel: (860) 264-1551 Fax: (860) 677-5005 E-mail: edwardjurkiewicz@sbcglobal.net About The Merchant LLC The Merchant LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No. 20-50104) on Jan. 24, 2020, listing under $1 million in both assets and liabilities. Edward P. Jurkiewicz, Esq. at LAWRENCE & JURKIEWICZ represents the Debtor as counsel. METAL PARTNERS: Affiliate Taps Cushman & Wakefield as Broker ------------------------------------------------------------ BCG Ownco, LLC, an affiliate of Metal Partners Rebar, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Nevada to hire Paccom Realty Advisors as its real estate broker. Debtor requires the services of a real estate broker in connection with the listing and sale of its property -- a 7.59-acres zoned land located at 1800 White Lane, Bakersfield, Calif. The broker, which conducts business under the name Cushman & Wakefield Pacific Realty Advisors, will get a 6 percent commission on the gross sales price. Cushman & Wakefield is a "disinterested person" pursuant to Sections 327(a) and 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Wayne Kress, SIOR Cushman & Wakefield Pacific Realty Advisors 5060 California Ave, Suite 1000 Bakersfield, CA 93309 Office: +1 661 633 3819 About Metal Partners Rebar Metal Partners Rebar, LLC and four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Lead Case No. 20-12878) on June 16, 2020. The petitions were signed by Joseph Tedesco, chief financial officer. At the time of the filing, Metal Partners Rebar disclosed estimated assets of $10 million to $50 million and estimated liabilities of $50 million to $100 million; BGD LV Holding, LLC disclosed estimated assets and liabilities of up to $50,000; BRG Holding, LLC disclosed estimated assets of $1 million to $10 million and estimated liabilities of $10 million to $50 million; and BCG Ownco, LLC disclosed estimated assets of $1 million to $10 million and estimated liabilities of $10 million to $50 million. Judge Mike K. Nakagawa oversees the cases. Debtors have tapped Saul Ewing Arnstein & Lehr LLP as their bankruptcy counsel, Larson & Zirzow, LLC as co-counsel with Saul Ewing, High Ridge Partners, LLC as financial advisor, and SSG Advisors, LLC as investment banker. On July 14, 2020 the U.S. trustee formed an unsecured creditors' committee. The committee has tapped Brown Rudnick, LLP as its bankruptcy counsel, McDonald Carano LLP as local counsel and Goldin Associates, LLC as financial advisor. METRO CHRISTIAN: Unsecureds to Receive $2.4K Per Year Over 5 Years ------------------------------------------------------------------ Metro Christian Fellowship, Inc. of Kansas City filed with the U.S. Bankruptcy Court for the Western District of Missouri a Combined Plan and Disclosure Statement dated August 4, 2020. Class 3 General Unsecured Creditors holding allowed claims will receive a pro rata share of the value of Debtor's personal property as of the date of the Petition to be paid in annual payments of $2,359 over 5 years or at such earlier time as practicable. This class is impaired. The Debtor believes that it will have enough cash on hand on the effective date of the Plan to pay all the claims and expenses that are entitled to be paid on that date. The financial projections show that the Debtor will have an aggregate annual average cash flow, after paying operating expenses and post-confirmation taxes of $41,146. The final Plan payment is expected to be paid on or before the 1st day of the 60th month following the 15th day after the effective date. A full-text copy of the Disclosure Statement dated August 4, 2020, is available at https://tinyurl.com/y6cbforh from PacerMonitor.com at no charge. Counsel for the Debtor: CONROYA BARAN Larry A. Pittman, II Robert S. Baran 1316 Saint Louis Ave., 2nd FL Kansas City, Missouri 64101 Tel: (816) 210-9680 Office: (816) 616-5009 Fax: (816)817-6023 About Metro Christian Fellowship Metro Christian Fellowship, Inc., of Kansas City sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-40917) on May 6, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. Judge Dennis R. Dow oversees the case. Mann Conroy, LLC is the Debtor's legal counsel. MILLERSVILLE UNIVERSITY: S&P Lowers Revenue Bond Rating to 'BB+' ---------------------------------------------------------------- S&P Global Ratings lowered its rating to 'BB+' from 'BBB-' on East Hempfield Township Industrial Development Authority, Penn.'s student housing revenue bonds, issued for Student Services Inc. (SSI) at Millersville University (MU). The outlook is negative. "The downgrade and negative outlook reflect the operating pressure that SSI faces due to the significant decline in occupancy rates and rental revenue as Millersville University offers its fall semester in a predominantly virtual format and adopted a one-student-per-bedroom model for its housing facilities," said S&P Global Ratings credit analyst Ruchika Radhakrishnan. "The negative outlook is driven by our expectation of a potential covenant violation, and the risk of weak spring 2020 occupancy, which could pressure the rating," Ms. Radhakrishnan added. As of June 30, 2019, SSI had $132 million in debt outstanding, amortized through fiscal 2047. The series 2013, 2014, and 2015 bonds were used to build a three-phase student housing replacement housing project on the MU campus. The three phases, with a total occupancy of 1,909 beds, were opened in fall 2014, fall 2015, and summer 2016. While S&P has reviewed the finances and demand of MU for purposes of understanding the project and the university's role in supporting the project, this rating does not directly reflect MU's underlying credit characteristics. The rating agency does not currently have an underlying rating on MU. In S&P's view, privatized student housing projects face elevated social risk due to the uncertainty on the duration of the COVID-19 pandemic, and unknown effect on spring 2020 enrollment and occupancy levels. The rating agency views the risks posed by COVID-19 to public health and safety as a social risk under its environmental, social, and governance (ESG) factors. Despite the elevated social risk, S&P believes SSI's environment and governance risk are in line with the rating agency's view of the sector as a whole. Founded in 1855, MU began as the Lancaster County Normal School, the first Normal School in Pennsylvania. In 1983, MU was upgraded to university status; it is currently one of 14 universities in the Pennsylvania State System of Higher Education (PASSHE). MU maintains a 200-acre campus in Lancaster County, approximately 75 miles west of Philadelphia and approximately 75 miles northeast of Baltimore. SSI, a 501c3 organization established in 1956, provides various services to the university that are not available through the PASSHE. This includes the operation of the on-campus housing facilities, and a portion of university auxiliaries, including the university store. MONTREAL MAINE: Canadian Pacific Bid for Sanctions vs WFSC Junked ----------------------------------------------------------------- Canadian Pacific Railway Company and Soo Line Railroad Company filed a motion for contempt and sanctions against World Fuels Services Corporation for failing to produce the requested documents and for violating a court order. After a full consideration of the motion, Magistrate Judge Edwin G. Torres denied Canadian Pacific's motion. On July 6, 2013, an eastbound Montreal, Maine & Atlantic Railway train with 72 carloads of crude oil, a buffer car, and 5 locomotive units derailed in Lac-Megantic, Quebec. The Derailment set off several massive explosions, destroyed most of downtown Lac-Megantic, and killed 47 people. A large quantity of oil was released into the environment, necessitating an extensive cleanup effort. As a result of the Derailment and the related injuries, deaths, and property damage, lawsuits were filed against MMA in both the United States and Canada. On August 7, 2013, MMA filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The Office of the United States Trustee then appointed Robert Keach to serve as trustee and act on behalf of MMA. In connection with the bankruptcy and the accumulation of funds to compensate the victims of the Derailment, Mr. Keach engaged in settlement negotiations with parties identified as potentially liable for damages arising from the Derailment. This included the Defendant who served as the shipper of the crude oil. After Mr. Keach's negotiations with the Defendant failed to secure a favorable settlement, he filed a lawsuit. The parties then reached a settlement on June 8, 2015, where the Defendant agreed to contribute $110 million to a settlement fund in exchange for a release of all claims arising out of the Derailment, including any third-party claims. At the same time, the Defendant assigned to Mr. Keach any claims arising under the Carmack Amendment. The Bankruptcy Court then entered an order on Oct. 9, 2015 that confirmed Mr. Keach's liquidation plan. Shortly thereafter, Mr. Keach assigned to Plaintiff -- a trustee of a wrongful death trust -- the Defendant's rights to bring any possible claims under the Carmack Amendment. After the Plaintiff acquired these rights, he filed a lawsuit in the United States District Court for the District of North Dakota. CP's motion arose out of a subpoena and a related Order entered earlier in this case. On March 3, 2020, CP served a subpoena on the Defendant. The Defendant did not object or otherwise responded to the subpoena. CP then moved to compel. The Court granted CP's motion to compel on May 22, 2020 and imposed a 30-day deadline on the Defendant to respond to the subpoena. CP claimed that the Defendant disregarded that deadline, failed to produce anything in response, and violated the Court's Order. Because the Defendant has made no attempts to comply and CP is still without the requested documents, CP sought sanctions against the Defendant including fees and costs. Canadian Pacific requested sanctions against the Defendant because the Court compelled the Defendant to respond to CP's subpoena within 30 days from the date of a court order. That deadline passed on June 22, 2020. The Defendant's response is that CP's motion lacks merit because CP knew that Defendant's production was forthcoming and that CP failed to confer prior to filing its motion. Defendant claims that, if CP had contacted Defendant beforehand, it would have discovered that Defendant was scheduled to serve its production of documents (albeit untimely) on July 2, 2020 -- negating the need to engage in useless motion practice. Although Defendant concedes that it failed to comply with a court order in the time provided, the Defendant stated that there should be no basis for contempt sanctions when the production was only a few days late. The Defendant also argued that CP has suffered no prejudice with such a minor delay and that it now has all of the documents in its possession. For these reasons, the Defendant concluded that the motion should be denied because CP failed to confer prior to filing its motion, the Defendant produced the documents requested, and CP suffered no prejudice as a result of a brief delay. CP took issue with the Defendant's response because the Defendant did nothing to gather and produce documents during the first 25 days after the Court's Order. Then, after a June 16, 2020 meet and confer call, CP complained that Defendant served a small production of only 54 documents on July 2, 2020 (11 days after the Court-ordered deadline). CP also argued that the Defendant improperly redacted and withheld many documents based on privilege despite being ordered to produce the documents requested, failing to timely object to the subpoena on any grounds, and failing to produce a privilege log as required under Fed. R. Civ. P. 45(e)(2). Judge Torres noted that the parties strongly disagreed on whether CP violated the Court's Local Rules in failing to meet and confer prior to filing its motion for sanctions, and whether this alone is a basis to deny the motion for sanctions. On one hand, CP claimed that motions for contempt are not the type of disputes that require a meet and confer because "it should have been obvious to [Defendant] that CP would make a motion for contempt once the deadline had passed without production of the documents." The Defendant argued, on the other hand, that there is no exception included in the language of Local Rule 7.1 with respect to motions for contempt and that the failure to confer is a sufficient reason by itself to deny the relief sought. Judge Torres said the Defendant's argument is well taken because Local Rule 7.1(a)(3) requires counsel for the movant to "confer (orally or in writing), or make reasonable effort to confer (orally or in writing), with all parties or non-parties who may be affected by the relief sought in the motion." Local Rule 7.1(a)(3) further requires counsel for the movant to "certify" that such conferral took place or that counsel "made reasonable efforts to confer with all parties or non-parties who may be affected by the relief sought in the motion, which efforts shall be identified with specificity in the statement (including the date, time, and manner of each effort), but has been unable to do so." "Failure to comply with the requirements of this Local Rule may be cause for the Court to . . . deny the motion and impose on counsel an appropriate sanction, which may include an order to pay the amount of the reasonable expenses incurred because of the violation, including a reasonable attorney's fee." Notwithstanding this rule, CP maintained that motions for contempt fall outside the scope of Local Rule 7.1(a)(3) with references to several out of circuit decisions. Judge Torres said that these cases are entirely unpersuasive, in large part, because they have no relevance to the local rules in this district. Local Rule 7.1(a)(3) applies to "any motion in a civil case," except for the specific motions carved out later in the rule. And motions for contempt are noticeably absent from that list of motions for which the rule does not apply. Courts in this district have also applied Local Rule 7.1(a)(3) to deny motions for contempt that fail to comply with this requirement because they waste time and judicial resources in disposing of matters that could have been narrowed, if not resolved entirely, between the parties. In any event, CP requested that the Court exercise its discretion and consider the motion for sanctions on the merits. Judge Torres said the problem with CP's motion is that it is almost impossible to discern the scope of CP's objections at this point because the Defendant has produced additional documents throughout the month of July and served a privilege log -- two issues that CP took issue with when it filed its motion for sanctions. It is also unclear if these documents are even needed at this point because, on August 6, 2020, the district court in North Dakota granted the Plaintiff's motion for summary judgment in the underlying action with respect to the assignee claims. While CP did not have an opportunity to present any argument on the relevancy of this decision (given its recent disposition), it calls into question whether this entire dispute is now moot. The Court was, therefore, reluctant to excuse the Local Rule violation because there are so many uncertainties on which arguments remain pending, whether the documents received are now in compliance with the subpoena requests (and if not, which ones are deficient), whether the privilege log complies with Rule 45, and whether this entire dispute is now moot. Therefore, given CP's failure to comply with Local Rule 7.1 and to explain the efforts it took to narrow or resolve some of these disputes and the recent developments in this case when juxtaposed with the underlying action, Judge Torres denied CP's motion for sanctions. The case is in re: JOE R. WHATLEY, JR., Plaintiff, v. WORLD FUEL SERVICES CORPORATION, Defendant., Case No. 20-20993-MC-SCOLA/TORRES (S.D. Fla.). A copy of the Court's Order dated August 19, 2020 is available at https://bit.ly/3iBx9PN from Leagle.com. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec. The Company sought bankruptcy protection (Bankr. D. Maine Case No.13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Montreal, Maine & Atlantic Canada Co. ("MMA Canada"), the Canadian unit of Chapter 11 debtor Montreal, Maine & Atlantic Railway Ltd. ("MMA"), on July 20, 2015, filed Chapter 15 bankruptcy petition (Bankr. D. Maine Case No. 15-20518) in Portland, Maine, to seek recognition and enforcement in the U.S. of the order by the Quebec Court approving MMA Canada's plan to pay off victims of the July 2013 derailment. The law firm of Verrill Dana served as counsel to the Debtor. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., is the Chapter 11 trustee. Lindsay K. Zahradka and and D. Sam Anderson, Esq. served as his counsel. Development Specialists, Inc., served as his financial advisor; and Gordian Group, LLC, served as his investment banker. Justice Martin Castonguay oversaw the case in Canada. Andrew Adessky at Richter Consulting was named CCAA monitor. The CCAA Monitor was represented by Sylvain Vauclair at Woods LLP. MM&A Canada was represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Committee was represented by lawyers at Perkins Olson; and Paul Hastings LLP. The unofficial committee of wrongful death claimants was represented by lawyers at Gross, Minsky & Mogul, P.A.; Murtha Cullina LLP; Meyers & Flowers, LLC; The Webster Law Firm; and Weller, Green Toups & Terrell LLP. The Debtor's Revised First Amended Plan of Liquidation, which created a C$446 million settlement fund for the benefit of all victims of the train derailment in 2013 that killed 47 people, became effective Dec. 22, 2015. MOOD MEDIA: Joint Prepackaged Plan Confirmed by Judge ----------------------------------------------------- Judge Marvin Isgur has entered findings of fact, conclusions of law and order confirming the Joint Prepackaged Plan of Reorganization of Mood Media Corporation and its Debtor Affiliates. The Debtors have proposed the Plan in good faith and not by any means forbidden by law. In so determining, the Court has examined the totality of the circumstances surrounding the filing of these chapter 11 cases, the Plan, the RSA, the process leading to Confirmation, including the unanimous support of Holders of Claims in the Voting Classes for the Plan, and the transactions to be implemented pursuant thereto. These Chapter 11 Cases were commenced, and the Plan was proposed, with the legitimate purpose of allowing the Debtors to implement the Restructuring Transactions, reorganize, and emerge from bankruptcy with a capital and organizational structure that will allow the Reorganized Debtors to conduct their businesses and satisfy their obligations with sufficient liquidity and capital resources. Classes 1, 2, and 5 are Unimpaired Classes, each of which is conclusively presumed to have accepted the Plan in accordance with section 1126(f) of the Bankruptcy Code. Accordingly, the Plan does not satisfy the requirements of section 1129(a)(8) of the Bankruptcy Code. Notwithstanding the foregoing, the Plan can be confirmed because it satisfies sections 1129(a)(10) and 1129(b) of the Bankruptcy Code. A full-text copy of the order and joint prepackaged plan of reorganization dated July 31, 2020, is available at https://tinyurl.com/y4w5wofw from PacerMonitor.com at no charge. Proposed Co-Counsel to the Debtors: Matthew D. Cavenaugh Veronica A. Polnick Genevieve Graham JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 E-mail: mcavenaugh@jw.com vpolnick@jw.com ggraham@jw.com - and - Edward O. Sassower, P.C. Joshua A. Sussberg, P.C. Christopher T. Greco, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 E-mail: edward.sassower@kirkland.com joshua.sussberg@kirkland.com christopher.greco@kirkland.com - and - W. Benjamin Winger KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 E-mail: benjamin.winger@kirkland.com About Mood Media Corp. Mood Media Corporation -- https://us.moodmedia.com/ -- is a global provider of in-store audio, visual, and other forms of media and marketing solutions to more than 400,000 commercial locations around the world and across a broad range of industries. Mood is an international business with operations in the United States and in over 40 other countries throughout the world. On July 30, 2020, Mood Media Corp. and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 20-33768). The Debtor was estimated to have $500 million to $1 billion in assets and liabilities. The Company's international subsidiaries are not part of the Chapter 11 filing. The Hon. Marvin Isgur is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP as bankruptcy counsel; PJ SOLOMON, L.P., as investment banker; and BERKELEY RESEARCH GROUP LLC as restructuring advisor. JACKSON WALKER L.L.P. is the local counsel. PRIME CLERK LLC is the claims agent. MURRAY ENERGY: Plan Declared Effective; Sale to ACNR Completed -------------------------------------------------------------- Murray Energy Holdings Co. and its subsidiaries announced that its chapter 11 plan became effective as of September 16, 2020, and that it has successfully completed a sale of substantially all its assets to a privately held company owned by a group of its former creditors. The United States Bankruptcy Court for the Southern District of Ohio (Western Division) approved the Plan on August 31, 2020. Through the restructuring process, Murray effectuated the sale of substantially all of their assets to American Consolidated Natural Resources, Inc. ("ACNR"), a new entity formed at the direction of an ad hoc group of Murray's superpriority term loan lenders. The restructuring transactions eliminated more than $8 billion of Murray’s debt and legacy liabilities and allowed ACNR to access new financing, providing ACNR with enhanced financial flexibility. Post-transaction, ACNR will continue conducting Murray’s business in the normal course, owning and operating 9 mines and preserving thousands of jobs throughout six states. In addition, ACNR will manage and operate the Foresight Energy mines and the Murray Metallurgical mines through two separate management services agreements. ACNR has entered into a new collective bargaining agreement with the United Mine Workers of America, which agreement was approved during Murray’s chapter 11 cases. Robert D. Moore, President and Chief Executive Officer of ACNR, commented, "Throughout these complex proceedings, we have been challenged with a global pandemic, extremely volatile coal markets, and months of uncertainty. Our employees and business partners met these challenges, and, together, moved the company forward to today's emergence. Through the efforts and sacrifice of our dedicated employees, the United Mine Workers of America, our secured lenders, and our trade partners and customers, we are a much stronger company today than we were when we sought Chapter 11 protection. As a result of these outstanding efforts, over 4,000 individuals remain working and ACNR will be a viable business partner in the communities in which our operations are located. I want to personally thank all of our employees and business partners for their efforts and their continued confidence in our leadership team." Additional information, including court filings and background information on the restructuring process, is available at https://cases.primeclerk.com/MurrayEnergy. You may also obtain copies of any pleadings by visiting the Court’s website at https://ecf.ohsb.uscourts.gov in accordance with the procedures and fees set forth therein. About American Consolidated American Consolidated Natural Resources, Inc. -- http://www.acnrinc.com/-- is the largest privately owned coal company in the United States and is headquartered in St. Clairsville, Ohio. ACNR will produce approximately 35 million tons of high-quality bituminous coal annually, and such operations include 9 active mines across the Northern and Southern Appalachia Basins (located in Ohio, West Virginia, and Alabama), the Illinois Basin (located in western Kentucky), and the Uintah Basin (located in Utah). About Murray Energy Headquartered in St. Clairsville, Ohio, Murray Energy -- http://murrayenergycorp.com/-- is the largest privately owned coal company in the United States, producing approximately 76 million tons of high quality bituminous coal each year, and employing nearly 7,000 people in the United States, Colombia and South America. Murray Energy now operates 15 active mines in five regions in the United States, plus two mines in Colombia, South America. It operates 12 underground longwall mining systems, 42 continuous mining units, 10 transloading facilities, and five mining equipment factory and fabrication facilities. Murray Energy and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Lead Case No. 19-56885) on Oct. 29, 2019. At the time of the filing, the Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. The cases have been assigned to Judge John E. Hoffman Jr. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as general bankruptcy counsel; Dinsmore & Shohl LLP as local counsel; Evercore Group L.L.C. as investment banker; Alvarez and Marsal L.L.C. as financial advisor; and Prime Clerk LLC as notice and claims agent. The U.S. Trustee for Region 9 appointed creditors to serve on the official committee of unsecured creditors on Nov. 7, 2019. The committee tapped Morrison & Foerster LLP as legal counsel; AlixPartners, LLP as financial advisor; and Vorys, Sater, Seymour and Pease LLP as local counsel. MUSEUM OF AMERICAN JEWISH: Unsec. Creditors to Recover 1% in Plan ----------------------------------------------------------------- Museum of American Jewish History, d/b/a National Museum of American Jewish History filed the Disclosure Statement with respect to Second Amended Chapter 11 Plan of Reorganization dated July 31, 2020. The Plan contemplates the reorganization of the Debtor and the resolution of all outstanding Claims against, and Interests in, the Debtor. Subject to the specific provisions set forth in the Plan, all Claims will be satisfied by cash payments to be issued by the Debtor, or by honoring its membership obligations. Because the Debtor is a non-profit corporation, no interests in it will be cancelled but nothing will be distributed on account of interests. Class 5 consists of General Unsecured Claims with 1% estimated recovery. Under the Plan, Class 5 General Unsecured Claims are Impaired. Each Holder of a Class 5 Allowed General Unsecured Claim shall receive, in full satisfaction, settlement, release, extinguishment and discharge of such Claim, Cash in an amount equal to such Holder’s pro rata share of the Class 5 Payment Fund, with such share to be calculated based on the Allowed amount of the Holder’s Class 5 Claim relative to the total amount of Allowed Class 5 Claims. Class 6 consists of interests in the Debtor. Under the Plan, Class 6 Interests are Unimpaired. Each Holder of Allowed Class 6 Interests shall retain its Interest and receive no Property or other value distribution on account of its Interest. The Debtor intends to fund the Plan through (1) Funds currently held by the Debtor; (2) Funds obtained from ongoing operations; (3) Funding raised from donors through seasonal campaigns conducted in the ordinary course; and (4) if necessary, borrowing from a financial institution. To fund the Plan, the Debtor must raise sufficient funds to make all payments called for on the Effective Date of the Plan, including but not limited to (1) payment of the sum of $100,000 with respect to the Class 3B Claim of the Bonds; and (2) payment of the sum of $250,000 with respect to Class 5, and all administrative and priority claims except the SBA Claim. The actual amount to be paid with respect to claims other than the Class 3 Claim of the Bonds depends on the resolution of several claims. Obtaining sufficient funding is a condition to the Effectiveness of the Plan. If the Plan is confirmed but the Debtor does not raise sufficient funds to fund the Plan, the Debtor may borrow funds from a financial institution or may withdraw the Plan. A full-text copy of the Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y4w5wofw from PacerMonitor.com at no charge. Counsel for the Debtor: DILWORTH PAXSON LLP Lawrence G. McMichael Peter C. Hughes Yonit A. Caplow 1500 Market St., Suite 3500E Philadelphia, PA 19102 Telephone: (215) 575-7000 Facsimile: (215) 575-7200 About Museum of American Jewish History The Museum of American Jewish History -- https://www.nmajh.org/ -- is a Pennsylvania non-profit organization which operates the National Museum of American Jewish History, the only museum in the nation dedicated exclusively to exploring and interpreting the American Jewish experience. The museum presents educational and public programs that preserve, explore and celebrate the history of Jews in America. The museum was established in 1976 and is housed in Philadelphia's Independence Mall. On March 1, 2020, Museum of American Jewish History sought Chapter 11 protection (Bankr. E.D. Pa. Case No. 20-11285). The Debtor was estimated to have $10 million to $50 million in assets and liabilities. Judge Magdeline D. Coleman oversees the case. The Debtor tapped Dilworth Paxson, LLP, as its legal counsel and Donlin, Recano & Company, Inc. as its claims agent. NEW WAY TRANSPORT: Plan of Reorganization Confirmed by Judge ------------------------------------------------------------ Judge Karen S. Jennemann has entered an order confirming the Second Amended Chapter 11 Plan of Reorganization and approving Second Amended Disclosure Statement of New Way Transport, Inc. The Debtor is authorized and directed to execute all agreements and undertake the actions contemplated by the Plan. The Debtor shall continue to pay fees assessed pursuant to 28 U.S.C. § 1930(a)(6) until such time as this Bankruptcy Court enters a final decree closing this Chapter 11 case, or enters an order either converting this case to a case under Chapter 7 or dismissing the case, pursuant to 11 U.S.C. § 1106(a)(7) and F.R.B.P. 2015(a)(5). A full-text copy of the order dated August 4, 2020, is available at https://tinyurl.com/y6rcp7gj from PacerMonitor.com at no charge. About New Way Transport New Way Transport, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03707) on June 5, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of less than $1 million. The case is assigned to Judge Cynthia C. Jackson. Bartolone Law, PLLC, is the Debtor's bankruptcy counsel. NEWS-GAZETTE: Sept. 30 Plan Confirmation Hearing Set ---------------------------------------------------- The News-Gazette, Inc. and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a motion for an order approving Disclosure Statement and scheduling a hearing on confirmation of Plan of Liquidation. On August 4, 2020, Judge Karen B. Owens granted the motion and ordered that: * The Disclosure Statement is approved. * Sept. 30, 2020, at 2:30 p.m. in the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 3rd Floor, Courtroom 1, Wilmington, Delaware 19801 is the Confirmation Hearing to consider the request of the Debtors for confirmation of the Plan. * Sept. 16, 2020 at 4:00 p.m. is fixed as the last day for filing and serving written objections or responses to the Debtors’ request for confirmation of the Plan. * Sept. 25, 2020 at 12:00 p.m. is fixed as the last day to file any replies or responses to any objections. * Sept. 16, 2020 is the deadline for the receipt of Ballots accepting or rejecting the Plan. A full-text copy of the order dated August 4, 2020, is available at https://tinyurl.com/y65l4va3 from PacerMonitor.com at no charge. About The News-Gazette The News-Gazette is a daily newspaper serving 11 counties in the eastern portion of Central Illinois and specifically the Champaign-Urbana metropolitan area. The News-Gazette Inc. and its debtor affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 19-11901) on Aug. 30, 2019. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Karen B. Owens oversees the case. William E. Chipman, Jr. at Chipman Brown Cicero & Cole, LLP, is the Debtors' legal counsel. NEXSTAR BROADCASTING: Moody's Rates $30MM Sec. Revolver Loan 'B3' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Nexstar Broadcasting, Inc.'s (Nexstar or the company) incremental $30 million senior secured revolving credit facility (due 2023) and a B3 to Nexstar's proposed senior unsecured notes due 2028. Proceeds from the unsecured notes issuance will be used to redeem Nexstar's 5.625% senior unsecured notes due 2024. Moody's has also assigned a Ba3 rating to Mission Broadcasting, Inc.'s (Mission) new $250 million senior secured revolving credit facility due 2023. At close, Nexstar will use cash on hand to partially pay down its term loan A-4 and Mission will draw on its revolving credit facility and pay off its term loan B-3. Nexstar's B1 corporate family rating (CFR), B1-PD probability of default rating (PDR), and all existing instrument ratings are unaffected by the transaction. The company's SGL-2 speculative grade liquidity (SGL) rating is unchanged. The outlook is stable. Assignments: Issuer: Mission Broadcasting, Inc. Senior Secured Revolving Credit Facility, Assigned Ba3 (LGD3) Issuer: Nexstar Broadcasting, Inc. Senior Secured Revolving Credit Facility, Assigned Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5) RATINGS RATIONALE Nexstar's B1 CFR is supported by the company's large national scale. Nexstar is the largest US local broadcaster with 196 television stations in 114 markets across 38 US states. The company reaches approximately 39% of U.S. households, inclusive of UHF discount. The company is expected to generate more than half of its net revenue through retransmission fees which are contractual and expected to continue to grow. Nexstar is highly cash generative and Moody's expects that, even with COVID-19's impact on core advertising revenue, Nexstar will generate free cash flow between $400 and $500 million in 2020. Nexstar's B1 CFR is constrained by the company's financial policies that tolerate high leverage; pro-forma for the 2019 Tribune acquisition, Moody's adjusted leverage (on a two-year average and including synergies) was around 5.7x in 2019 vs. 4.4x in 2018 (on a standalone basis). Its current expectations are that COVID-19's resulting shock to the US economy will lead to core TV advertising declining by around 25% for the full year. Given broadcast costs are mostly fixed, the expected decline in ad revenue will have a material impact on Nexstar's EBITDA. As a result, Moody's expects the company's leverage to remain elevated at about 5.9x through 2020 (on a two-year average basis). Moody's regards the current COVID-19 pandemic as a social risk under its ESG framework, given the substantial implications for health and safety. The response to the COVID-19 outbreak led to advertising demand -- which is correlated to the economic cycle and consumer confidence -- declining materially in H1 2020. More positively, during the height of the COVID-19 pandemic and stay at home orders, viewership of local TV increased materially as the concerned audiences sought clear, relevant and trustworthy news from their local broadcasters. While the figures vary by market, Moody's estimates that Nexstar's channels experienced at least a 30% increase in viewership during their news programs in April and May 2020. Overall social credit risk for the media and broadcasting sector is moderate. The key risk for the sector lies in evolving "Demographic and Societal Trends". Technological advances have favored changes in consumer preferences in particular in the way people consume media. Not only broadcasters had to adapt their business model to the new trend for digitalization by providing TV through high-speed internet, but they also face now competition from new players, including Netflix and Amazon, who compete for audiences. Nexstar's SGL-2 speculative grade liquidity (SGL) rating is supported by a sizeable cash balance of about $479 million and about $220 million of available capacity under the company's revolving credit facilities, as of June 30, 2020 and pro forma for the company's financing transactions. Nexstar's credit agreement contains a 4.25x first lien net leverage maintenance covenant, and the company's covenant leverage was 3.1x at June 2020. The company is expected to be in compliance with the first lien net leverage covenant over the next 12-18 months. The company generates sizable free cash flow which Moody's expects will be used to reduce debt in the remainder of 2020 and 2021. The ratings for the debt instruments reflect the overall probability of default of Nexstar, reflected in the B1-PD probability of default rating (PDR), an average family loss given default (LGD) rate of 50% and the priority ranking of the debt instruments in the capital structure. The senior secured facilities are rated Ba3 (LGD3) given their secured, priority claim on material owned property and assets over the unsecured notes, rated B3 (LGD5). The stable outlook reflects Moody's expectations that despite the disruption caused by the COVID-19, Nexstar will trend towards metrics in line with a B1 rating by 2021 year-end, in particular leverage (Moody's adjusted on a two-year basis) below 5.5x. The stable outlook also reflects Moody's expectations that the company will maintain a good liquidity profile in 2020 and beyond, and potentially use any excess cash flows to accelerate Nexstar's deleveraging pace. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive pressure on the ratings could develop should Moody's adjusted leverage (on a two-year average) improve to below 4.5x on a sustainable basis and should the company maintain Moody's adjusted free cash flow to debt (on a two year average) in the high single digit percentage. Negative ratings pressure could develop should the company's Moody's adjusted leverage (on a two-year average) increase above 5.5x on a sustained basis or should the company's liquidity weaken materially. Based in Irving, Texas, Nexstar is the largest US television broadcaster, owning, operating or providing sales and services to 196 television stations in 38 states, across 114 markets covering 39% of US television households (including the UHF discount). The company operates in 38 of the top 50 markets and ranks #1 or #2 in about 80% of its markets. Total pro forma net revenue was about $4.0 billion in FY 2019. The principal methodology used in these ratings was Media Industry published in June 2017. NEXSTAR BROADCASTING: S&P Rates New $1BB Senior Unsecured Notes 'B' ------------------------------------------------------------------- S&P Global Ratings assigned its 'B' rating to Nexstar Media Group Inc. subsidiary Nexstar Broadcasting Inc.'s proposed $1 billion senior unsecured notes due 2028. The recovery rating of '6' indicates its expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of payment default. The company intends to use the proceeds from these notes to redeem its existing $900 million 5.625% senior unsecured notes due 2024. The proposed transaction does not materially effect leverage and it enhances the company's debt maturity profile. Additionally, on Sept. 4 the company received new revolving credit commitments in an aggregate principal amount of $280 million under Nexstar's and Mission Broadcasting Inc.'s respective existing credit agreements. A total of $250 million of the 2020 revolving credit facility is allocated to Mission and $30 million of the 2020 revolving credit facility is allocated to Nexstar. The 2020 revolving credit facility is in addition to the $166 million 2018 revolving credit facility under Nexstar's and Mission's existing credit agreements. At the time of the close of the 2020 revolving credit facility, Mission borrowed $225 million under the facility and used the proceeds to prepay Mission's outstanding 2024 term loan B in full. Nexstar also made a voluntary prepayment of $250 million of its outstanding 2023 term loan A-4 with cash on hand. For the 12 months ended June 30, 2020, Nexstar's leverage remained elevated at 5.4x. S&P continues to view its outlook as stable with the expectation that Nexstar will manage leverage at 4.5x-5.5x by directing increasing cash flow toward shareholder returns, acquisitions, and debt repayment. Nexstar Media Group Inc. is the parent entity of Nexstar Broadcasting Inc. Issue Ratings - Recovery Analysis Key analytical factors Nexstar Broadcasting Inc. is the borrower of Nexstar's following facilities: -- New $30 million revolving credit facility 2020 tranche maturing 2023 (unrated); -- $166 million revolving credit facility 2018 tranche maturing 2023; -- $788.1 million term loan A maturing 2023; -- $675 million term loan A maturing 2024; -- $1.1 billion term loan B maturing 2024; -- $3.1 billion term loan B maturing 2026; -- $1.8 billion 5.625% senior unsecured notes due 2027; and -- New $1 billion senior unsecured notes due 2028. Mission Broadcasting Inc.'s senior secured credit facility includes: -- New $250 million revolving credit facility 2020 tranche maturing 2023 (unrated). Shield Media LLC's senior secured credit facility includes: -- $21.8 million senior secured term loan A maturing 2023 (unrated). -- The senior secured debt is guaranteed by Nexstar and its direct and indirect wholly owned subsidiaries (with certain exceptions) and is secured by substantially all of the company and its guarantors' assets (with certain exceptions including FCC licenses and certain assets from consolidated variable interest entities). Simulated default assumptions -- S&P's simulated default scenario contemplates a default in 2024 due to a combination of the following factors: a larger-than-expected drop in EBITDA in a non-election year, increased competition from alternative media, a prolonged decline in advertising revenue due to economic weakness, failure to generate retransmission revenue commensurate with its local market and relevant television networks, and pressure from affiliated networks to remit a significant portion of retransmission fees. -- Other default assumptions include an 85% draw on the revolving credit facilities, LIBOR is 2.5%, the spread on the revolving credit facilities and term loans rise to 5% as covenant amendments are obtained, and all debt includes six months of prepetition interest. -- S&P has valued Nexstar on a going-concern basis using a 7x multiple of its projected emergence EBITDA, which is in line with that of other large television broadcasters it rates. Simplified waterfall -- EBITDA at emergence: about $750 million -- EBITDA multiple: 7x -- Gross recovery value: about $5.2 billion -- Net recovery value for waterfall after administrative expenses (5%): about $5 billion -- Estimated senior secured debt: about $5.7 billion -- Value available for senior secured debt: about $5 billion -- Recovery range: 70%-90%; rounded estimate: 85% -- Estimated senior unsecured debt: about $2.8 billion -- Value available for senior unsecured debt: $0 -- Recovery range: 0%-10%; rounded estimate: 0% NEXTERA ENERGY: Fitch Affirms BB+ LT IDR, Outlook Stable -------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDR) of NextEra Energy Partners, LP (NEP) and its subsidiary, NextEra Energy Operating Partners, LP (NEP Opco) at 'BB+' with a Stable Rating Outlook. Due to strong legal ties, the IDRs of the two entities are the same. Fitch has also affirmed the 'BB+'/'RR4' rating for the senior unsecured notes at NEP Opco. The 'RR4' denotes average recoveries in an event of default. The senior unsecured notes are absolutely and unconditionally guaranteed by NEP. The notes also have an upstream guarantee from NextEra Energy US Partners Holdings, LLC (US Holdings), which is a subsidiary of NEP Opco. US Holdings is the borrower on the revolving credit facility, which is guaranteed by NEP Opco. NEP's ratings are driven by relatively stable cash flows generated by its portfolio of long-term contracted wind, solar and natural gas pipeline assets, strong asset and geographic diversity, and sponsor affiliation with NextEra Energy, Inc. (NextEra; A-/Stable), which is the largest renewable developer in the U.S. NEP's ratings also take into account the financial complexity and structural subordination of Holdco debt resulting from limited recourse project debt financings, tax equity and convertible equity portfolio financing structures deployed by the company across its project subsidiaries. The ratings also reflect management's commitment to manage Holdco Debt/Parent Only FFO ratio in a 4.0x-5.0x range. While the leverage ratio exceeded this range in 2019 partly driven by bankruptcy implications of one of its key offtakers, Pacific Gas & Electric Company (PG&E), and the timing of Meade pipeline acquisition, certain executed and planned actions by management should bring the 2020 leverage below the target range. Fitch expects NEP's Holdco FFO leverage ratio to range between 3.5x-3.7x over 2020-2022. Fitch does not expect coronavirus concerns to have a material impact on NEP's operations and access to capital due to contractual nature of its portfolio. KEY RATING DRIVERS Contractual Cash Flows and Asset Diversity: Fitch favorably views NEP's portfolio of wind, solar and natural gas pipeline assets, which have long-term offtake arrangements with creditworthy counterparties and minimal exposure to either volumetric or commodity risks. As of Dec. 31, 2019, the renewable energy and pipeline projects had a total weighted average remaining contract term of approximately 16 years. The distributions that NEP receives from its project subsidiaries are well diversified. The distributions are split as approximately 51% from wind assets, 24% from solar and 24% from natural gas pipeline assets based upon 2020 run rate project level cash available for distribution (CAFD). While the solar portfolio is largely California based, wind assets have a wide geographic footprint, which mitigates the CAFD exposure to the intermittency of wind resource in any one region. The November 2019 acquisition of Meade Pipeline Co. LLC, which owns an approximately 39.2% ownership interest in the Central Penn Line, has further diversified NEP's portfolio and modestly reduced its reliance on wind. Overall, the portfolio derives 37% of its CAFD from Western U.S., 15% from Midwest, 16% from South, 25% from Texas and 7% from Northeastern U.S. The concentration risk of the portfolio has materially decreased since the IPO. NEP currently has 46 operating projects compared to 10 in 2014. The top 5 projects contribute 41% of CAFD versus 84% at IPO. The top five projects include two Texas pipelines, Meade Pipeline, Genesis solar and Desert Sunlight solar projects. Robust Outlook for Wind and Solar Generation: Fitch believes improving economics, customer demand for cleaner generation and state renewable policy standards (RPS) will continue to drive wind and solar generation in the U.S. The recent extension of Production Tax Credits for wind projects that begin construction in 2020 at a rate of 60% is expected to support continued wind development until 2024. As a result, NEP should find no scarcity of renewable assets to acquire from third parties or its sponsor, NextEra, which currently has more than 13 GW of renewables backlog. Fitch believes NEP can meet its 12%-15% unit LP distribution growth guidance through 2024 and continue to have a competitive cost of capital. Increased Complexity with CEPF financings: NEP is increasingly reliant upon convertible equity portfolio financings (CEPF) to finance its growth and has, since 2018, entered into four such transactions with large institutional investors to raise approximately $2.6 billion in total proceeds. The institutional investor pays NEP an upfront amount in exchange for an equity interest in a portfolio of assets. The investor typically receives a small proportion of distributions from the portfolio for a period of 3-6 years, which represents a low coupon of between 1.0%-2.5%. NEP has the option to buy out the investor for a combination of equity and cash at a fixed return or else the cash from the portfolio flips to the investor. Fitch views CEPFs as an efficient way for NEP to issue equity, layer in equity issuances over time and limit its exposure to any underperformance of the asset portfolio. A competitive cost of capital is critical to fund acquisitions to meet NEP's 12%-15% distribution growth rate target, which is fairly aggressive compared with the growth rate targeted by its peers. However, the increased use of CEPFs has added financial complexity to the organizational structure and makes NEP reliant on the stability of capital markets and strength of its unit price to execute the buyouts in a timely and cost-effective manner. While NEP has the ability to issue non-recourse project debt to fund the investor buyout in cash as a significant amount of assets in the CEPFs are unencumbered, doing so will negatively affect Parent FFO. Fitch believes it will be prudent for management to maintain sufficient headroom in its Holdco leverage metrics to absorb the resulting leverage creep. Target Capital Structure: The ratings of NEP and NEP Opco reflect the structural subordination of their debt to the limited recourse debt or tax equity at the project level. The project debt for renewable projects is typically sized to yield a debt service coverage ratio (DSCR) greater than 1.2 and generate a low 'BBB-'/'BBB' rating. The debt typically matures within the expiration date of the long-term contracts on any project. Most recent DSCRs provided to Fitch by NEP indicate that all projects with limited recourse project debt financings are performing well in excess of their DSCR thresholds. At the Holdco level, management has a target of maintaining Holdco Debt/Parent Only FFO ratio in the 4.0x-5.0x range. Fitch defines Parent Only FFO as run rate project distributions less Holdco G&A expenses, fee for management service agreement, credit fees and Holdco debt service costs. In its calculation of Holdco debt, Fitch includes all debt held at intermediate holding companies. At present, this adjustment includes $205 million of Holdco financing at STX Holdings as well as a $270 million revolver upon draw, which is expected to fund the cash portion of the buyout for CEPF-4. Fitch assumes NEP will issue non-recourse project debt at the asset level to fund the cash buyout portions of other CEPFs, which is not included in its Holdco debt calculation. Fitch expects Holdco leverage to be in the 3.5x-3.7x range from 2020-2022. This reflects CAFD growth from 2019 acquisitions, conversion of $300 million convertible units and $183 million of preferred units in 2020 and use of available cash and other capital allocation decisions to bring down the revolver borrowings. Strong Sponsor Support: NEP benefits from its affiliation with NextEra, which is the largest renewable developer in the U.S. Aside from the drop down of 990 MWs at IPO, NEP has purchased approximately 4.0 GWs of additional wind and solar assets from NextEra. NextEra has demonstrated other forms of sponsor support such as the structural modification to the Incentive Distribution Rights fee structure executed in the fourth quarter of 2017, which lowered NEP's cost of equity and made future acquisitions more accretive to LP unitholders. NextEra provides to NEP its management, operational and administrative services via various service agreements and also financial management services through a cash sweep and credit support agreement. These agreements will continue to exist subject to the determination by NEP Board. The management service agreement (MSA) between NextEra and NEP has a 20-year contract life and cannot be terminated, except for cause. However, NEP's board will have the ability to oversee the MSA. Slippage in Counterparty Credit Quality: NEP's portfolio of assets consists of long-term contracted projects with credit worthy counterparties. The weighted average counterparty credit is 'BBB', based upon Fitch and other rating agencies' ratings. However, the average counterparty rating has declined from 'A-' since 2017, which is a concern. The decline has been driven in large part due to the downgrade in ratings for the California investor owned utilities. PG&E and Southern California Edison Company comprise 24% of expected 2020 run rate CAFD. The ratings for Pemex, which comprises 10% of expected 2020 run rate CAFD, have also declined to 'BB-'/Stable Outlook from 'BBB+'/Stable Outlook in 2016. NEP's Structural tax Advantages: Even though NEP is a C corporation for U.S. federal income tax purposes, it is not expected to pay meaningful federal income taxes for at least 15 years because of NOLs generated through MACRS depreciation benefits. NEP distributions up to an investor's outside basis are expected to be characterized as non-dividend distributions or return of capital for at least the next eight years. This makes NEP competitive to Master Limited Partnerships as a yield plus growth vehicle. DERIVATION SUMMARY Fitch views NEP's ratings to be positively positioned compared to those of Atlantica Sustainable Infrastructure Plc (AY; BB/Stable) and Terraform Power (TERP; BB-/Stable) due to favorable geographic exposure, long-term contractual cash flows with minimal regulatory risk, and association with a strong sponsor. These factors more than offset NEP's relative higher leverage, aggressive distribution growth strategy and weaker asset composition owing to a larger concentration of wind assets. All three have strong parent support. Fitch considers NEP best positioned owing to NEP's association with NextEra, which is the largest renewable developer in the U.S. This provides visibility to NEP's LP distribution per unit growth targets, which at 12%-15% are more aggressive than those of AY (8%-10%) and TERP (5%-8%). TERP benefits from having Brookfield Asset Management (BAM) as a sponsor. Algonquin Power & Utilities Corp. (BBB/Stable) has 44.2% ownership interest in AY and could participate in future equity offerings, potentially increasing its ownership interest in AY up to 48.5%. AY's portfolio benefits from a large proportion of solar generation assets (68% of total MWs) that exhibit less resource variability. In comparison NEP's portfolio consists of a large proportion of wind MWs (84% of power generation portfolio). TERP's utility scale portfolio consists of 41% solar and 59% wind. NEP's concentration in wind is mitigated to certain extent by its diverse geographic footprint Fitch views NEP's geographic exposure in the U.S. (100%) favorably as compared to TERP's (68%) and AY's (30%). AY's long-term contracted fleet has a remaining contracted life of 18 years, higher than NEP's 16 years and TERP's 13 years. NEP's forecasted credit metrics are stronger than TERP's and comparable with AY's. Fitch forecasts NEP's Holdco debt to Parent Only FFO ratio to be between 3.5x-3.7x over 2020-2022 compared with mid to high 5.0x for TERP and mid to high 3.0x for AY. Fitch rates NEP, AY and TERP based on a deconsolidated approach since their portfolio comprises assets financed using non-recourse project debt or with tax equity. Fitch's Renewable Energy Project Rating Criteria uses one-year P90 as the starting point in determining its rating case production assumption. However, Fitch has used P50 to determine its rating case production assumption for NEP, AY and TERP since they own a diversified portfolio of operational wind and solar generation assets. Fitch believes asset and geographic diversity reduces the impact that a poor wind or solar resource could have on the distribution from a single project. Fitch has used P90 to determine its stress case production assumption. If volatility of natural resources and uncertainty in the production forecast is high based on operational history and observable factors, a more conservative probability of exceedance scenario may be applied in the future. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer -- Fitch has used P50 to determine its rating case production assumption and P90 to determine its stress case production assumption; -- Buyout right exercised with CEPF and NEP to pay 70% of the buyout in common units with the balance paid in cash; -- Acquisition of operational and contracted assets over 2020-2022 to meet 12% to 15% distribution per unit growth; -- Acquisition CAFD between 8%-10%; -- Acquisitions funded with CEPFs and modest Holdco debt such that target capital structure is maintained; -- Intermediate holding company debt treated as on credit, which includes $205 million at STX Holdings and $270 million non-recourse revolving credit facility; -- None of the project debt treated on-credit, which includes Fitch's assumption of future project debt issuances to fund the cash portion of CEPFs buyout. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- NEP's partnership agreement requires a substantial portion of upstream distribution from NEP Opco to be distributed to its unitholders. In addition, the structural subordination of the Holdco debt to the non-recourse project debt, tax equity and convertible equity portfolio financings caps the IDR to 'BB+'. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Growth strategy underpinned by aggressive acquisitions, addition of assets in the portfolio that bear material volumetric, commodity or interest rate risks; -- Material underperformance in the underlying assets that lends variability or shortfall to expected cash flow for debt service; -- Lack of access to equity markets to fund growth that may cast uncertainty regarding NEP's financial strategy; -- Higher than expected use of cash to fund the buyout of investors in CEPFs; -- Distribution payout ratio approaching or exceeding 100%; -- Holdco leverage ratio exceeding 5.0x on a sustainable basis. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: NEP significantly improved its liquidity position through upsizing its credit facility in May 2019 to $1.25 billion, from $750 million. The upsized facility provides flexibility for NEP to finance acquisitions partly through revolver borrowings, which can be subsequently termed out through equity and debt capital market issuances. In February 2020, NEP extended the maturity date of the revolving credit facility to February 2025 from February 2024. As of June 30, 2020, NEP had $550 million drawn on its revolving credit facility. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch includes debt held at intermediate holding companies in its Holdco debt calculations. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). NNN 400 CAPITOL: Loses Second Amended Suit vs Wells Fargo et al. ---------------------------------------------------------------- In their Second Amended Complaint (SAC), Plaintiffs NNN 400 Capital Center and affiliates asserted several allegations against Defendants Wells Fargo et al. The claims in the SAC are: (I) Breach of contract against Wells Fargo Bank, N.A. as Trustee for the Registered Holders of Comm 2006-C8 Commercial Mortgage Passthrough Certificates; (II) negligence against Wells Fargo, Berkadia and LNR Partners, LLC; (III) tortious interference against Wells Fargo, Berkadia, and LNR; (IV) aiding and abetting tortious interference against Berkadia and LNR; (VI) breach of master confidentiality agreement against Somera Road Inc.; (VII) unjust enrichment against Taconic Capital Advisors, LP and Little Rock-400 West Capital Trust (LR-400); (VIII) breach of master confidentiality agreement against Taconic; and (IX) breach of contract against LR-400. After careful consideration, Bankruptcy Judge T. John Dorsey held that the Plaintiffs failed to meet their burden of proof with respect to their allegations in the SAC. The Court, therefore, found in favor of the Defendants on Counts I, II, III, IV, VI, VII, VII, and IX. The Court said Count V, which asserted a claim for declaratory relief regarding the late charge asserted by LR-400 which is included in LR-400's proof of claim, is moot. The Plaintiffs are 32 tenant-in-common Delaware LLCs created to own an undivided interest in commercial property located at 400 W. Capitol Ave., Little Rock, Arkansas (the "Regions Center"). The Plaintiffs invested in the Regions Center as part of an Internal Revenue Code Section 1031 tax-deferred exchange. The Regions Center serves as collateral for a 10-year commercial mortgaged-backed security loan with a maturity date of Sept. 1, 2016. As of the filing of the Plaintiffs' bankruptcy petitions, the Loan was in default. Moses Tucker Real Estate, Inc. manages the Regions Center for Plaintiffs pursuant to the Sub-Property Management Agreement between FGG (asset manager) and MTRE. On August 18, 2006, the Plaintiffs and Bank of America, N.A. entered into a 10-year CMBS agreement with a maturity date of Sept. 1, 2016. The Regions Center serves as collateral for the Loan. On Sept. 25, 2006, Bank of America assigned the Loan and Note to LaSalle Bank, N.A., who then assigned them to a CBMS Trust managed by Wells Fargo on Jan. 2, 2008. Wells Fargo maintained ownership of the Loan and Note until 2017, when they were purchased by LR-400. In February 2014, the Plaintiffs retained FGG, Inc. as their asset manager, replacing the former asset manager. On April 4, 2014, FGG submitted a request to Berkadia to approve FGG as the new asset manager. FGG provided Berkadia with documentation, information and fees of $2,000.00 as requested in furtherance of the approval process. LNR, as special servicer, was responsible for reviewing and approving the request, and therefore, Berkadia forwarded the Plaintiffs' request to LNR. Upon receiving the request, LNR asked Plaintiffs to pay LNR a fee of $21,500 in connection with its review of the new asset manager and a retainer of $7,500 for potential legal costs associated with the review. On Feb. 25, 2016, Robert Dyess, Plaintiffs' former counsel, attempted to address the nearly two-year-old change of management application by sending a letter to LNR's counsel Steve Simon. Mr. Dyess pointed out to Mr. Simon that the loan agreement stated that Wells Fargo shall not unreasonably withhold, condition, or delay approvals. Although LNR had not formally approved FGG as the asset manager, from early 2014 through 2016 -- when FGG was replaced with Moses Tucker -- Berkadia and LNR treated FGG as the asset manager. On June 5, 2016, LNR issued a Retroactive Consent to Change Property Manager and Addition of a Guarantor; however, there is no evidence that this was ever delivered to the Plaintiffs. The Plaintiffs first learned of the retroactive consent just before the deposition of Mr. Polcari. Also, Berkadia admits that it had no record or knowledge of the approval of FGG as replacement asset manager. At trial, Lori McGhee, Moses Tucker's corporate representative, confirmed that the asset manager approval process had no effect on the UBS refinancing or the Calmwater refinancing efforts, nor did it cause the Plaintiffs' maturity date default. The plaintiffs took issue with Wells Fargo and its agents' lease approval process. On May 1, 2000, the Twentieth Floor Corporation d/b/a the Friday Firm, entered into a lease at the Regions Center. On August 14, 2014, the Plaintiffs submitted a request to Berkadia for approval of an extension of the Friday Firm lease, which was forwarded to LNR for approval as the special servicer. LNR approved the Friday Firm lease on Nov. 5, 2014. In August 2015, the Plaintiffs entered into a lease agreement with RGN-Little Rock I, LLC for an eleven- year lease at the Regions Center. On Sept. 26, 2015, FGG submitted a lease approval request to Berkadia, who later forwarded the request to LNR. The plaintiffs executed the Regus lease on or around October 12, 2015, prior to LNR's approval of the lease. LNR did not approve the lease until April 20, 2016. LNR could not provide any reason for the delay in approval of the Regus lease. LNR required that Plaintiffs pay a $2,000 fee in connection with its review of the Regus lease. On Sept. 14, 2016, the Plaintiffs entered into a lease agreement with Wilson & Associates. On Oct. 13, 2016, the Plaintiffs submitted a request to LNR for approval of the Wilson lease. LNR conditionally approved the lease on Oct. 28, 2016. At trial, McGhee confirmed that the lease approval process had no effect on the UBS refinancing or the Calmwater refinancing efforts, nor did it cause the Plaintiffs' maturity date default. Judge Dorsey that to prevail on their breach of contract claim, Plaintiffs had to show that 1) Plaintiffs and Wells Fargo had a valid contract; 2) Wells Fargo breached a provision of that contract; and 3) Plaintiffs suffered resulting damages. The plaintiffs alleged that Wells Fargo had a duty to cooperate with the Plaintiffs in the performance of their obligations under the Loan Documents, as well as a duty of good faith and fair dealing. The plaintiffs alleged that Lender breached these duties by knowingly and intentionally thwarting the Plaintiffs' effort to pay off the loan, refusing to timely provide a payoff statement upon request, intentionally providing an inaccurate payoff statement, and knowingly and intentionally causing the Mitchell Williams lease to be terminated. Nowhere in the SAC did the Plaintiffs point to a specific contractual provision that they allege was breached. Plaintiffs attempted to meet their burden by introducing evidence of various perceived bad acts by Wells Fargo, Berkadia, and/or LNR. However, the Plaintiffs failed to prove at trial that any of these acts caused the Plaintiffs harm. The evidentiary record established that Plaintiffs suffered no harm resulting from the lease approval process, the property manager approval process, or the processing of reimbursement requests. The plaintiffs' own witness testified that these processes caused the Plaintiffs no harm. Plaintiffs did not meet their burden with respect to their claim that Wells Fargo, Berkadia, or LNR breached the Loan Agreement by not providing a final payoff statement prior to Sept. 30, 2016. The Loan Agreement did not provide for a specific time period in which Wells Fargo, Berkadia, or LNR must provide final payoff statements. Furthermore, the record established that the Plaintiffs' delay in providing Berkadia information relating to the mezzanine loan as well as numerous changes to the closing date contributed to the delay. Furthermore, the evidence presented at trial proved that the Plaintiffs did not suffer any harm as a result of not receiving a final payoff statement prior to Sept. 30, 2016. Judge Dorsey also found that the Plaintiffs failed to prove the elements of their negligence claim at trial. Plaintiffs produced no evidence of a duty, separate and apart from the contractual obligations of Wells Fargo, Berkadia, or LNR under the Loan Documents. The Plaintiffs' negligence claims are based on the same conduct as their breach of contract claim. Therefore, as a matter of law, the Plaintiffs' negligence claim fails. Regarding Count III, Judge Dorsey held that the Plaintiffs also failed to prove that Wells Fargo, Berkadia, or LNR engaged in any conduct with intent to interfere with the Mitchell Williams lease. In fact, the record is clear that the conduct of Wells Fargo, Berkadia, and LNR had no effect on Mitchell Williams' decision to terminate the lease. In sum, Judge Dorsey held that the Plaintiffs failed to meet their burden of proof with respect to their allegations in the SAC. Judge Dorsey, therefore, ruled in favor of the Defendants on Counts I, II, III, IV, VI, VII, VII, and IX. The case is in re: NNN 400 CAPITAL CENTER, LLC, et al., Plaintiff(s), v. WELLS FARGO BANK, N.A., AS TRUSTEE FOR THE REGISTERED HOLDERS OF COMM 2006-C8 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES; LNR PARTNERS, LLC, a Florida Limited Liability Company; BERKADIA COMMERCIAL MORTGAGE, LLC, a Delaware Limited Liability Corporation; LITTLE ROCK-400 WEST CAPITAL TRUST, a Delaware Statutory Trust; SOMERA ROAD, INC., a New York Corporation; and TACONIC CAPITAL ADVISORS, LP, a Delaware Limited Partnership, Defendant(s), Case No. 16-12728 (JTD) (Jointly Administered) (Bankr. D. Del.). A copy of the Court's Findings dated August 10, 2020 is available at https://bit.ly/3lH7wyV from Leagle.com. About NNN 400 Capitol Center NNN 400 Capitol Center 16, LLC and 23 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 16-12728) on Dec. 9, 2016. The petitions were signed by Charles D. Laird & Peggy Laird on behalf of Charles D. Laird and Peggy Laird Revocable Trust dated April 21, 1999, member. On June 5, 2017, NNN 400 Capitol Center, LLC and seven other affiliates of NNN 400 Capitol Center 16 filed Chapter 11 petitions. The cases are jointly administered under Case No. 16-12728. The cases are assigned to Judge Kevin Gross. Whiteford, Taylor & Preston, LLC, is the Debtors' bankruptcy counsel while Rubin and Rubin, P.A. serves as their special counsel. At the time of filing, NNN 400 Capitol Center 16, NNN 400 Capitol Center 10 and NNN 400 Capitol Center 11 estimated both assets and liabilities at $10 million to $50 million each. NORTH CAROLINA TOBACCO: Not Liable for LLC Members' Taxes ---------------------------------------------------------- Debtor North Carolina Tobacco International, LLC's Chapter 7 trustee, John Paul H. Cournoyer, filed a Motion to Determine that the Estate Should Not Remit Pass-Through Taxes on Behalf of Out-of-State Members. Upon considering the facts presented, Bankruptcy Judge Benjamin A. Kahn granted the motion. North Carolina Tobacco International commenced the case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code on Oct. 10, 2017. On Oct. 20, 2017, the Court appointed John A. Northern as the chapter 11 trustee. On Jan. 10, 2018, the Court converted the case to one under chapter 7 and appointed John Paul H. Cournoyer as the chapter 7 trustee. The Debtor is a Missouri limited liability company, which manufactured tobacco products in East Bend, North Carolina. The Debtor's principal place of business is in North Carolina. The Debtor had four members: Samuel Kim, Ken Hauser, Ed Van Deventer, and Robert Dotson. According to annual reports filed with the North Carolina Secretary of State, Kim and Van Deventer reside in California and Missouri, respectively. With the Court's approval, the Trustee has sold certain tangible assets of the Debtor. The Trustee filed the Motion, requesting that the Court find the Debtor not liable for income taxes attributable to the sale of certain tangible assets under 11 U.S.C. sections 105, 346, 505, and 726. The Court scheduled a telephonic hearing, at which only the Trustee appeared. The Court found that the Trustee's service of the Motion on the North Carolina Department of Revenue did not comply with Rule 7004(b)(6), directed the Trustee to re-serve the Motion on the Department, and continued the hearing. The Department filed a Response to the Motion arguing that Debtor is responsible for filing tax returns and paying income tax liability for non-resident members under N.C. Gen. Stat. section 105-154(d). The Trustee employed Lehman B. Pollard and the firm of Nelson & Company as accountant to assist the Trustee with, inter alia, filing all necessary tax returns for the estate. In the Motion, the Trustee alleged that the Accountant has informed him that "no tax basis may be claimed in the assets sold [by Trustee]." The Trustee argued that he cannot claim a tax basis in these assets because the Debtor failed to file certain pre-petition tax returns. Moreover, the Trustee is "unwilling to prepare or sign pre-petition [tax] returns" because the Trustee lacks adequate information concerning pre-petition transactions. Because the Trustee cannot claim a tax basis in the assets sold by the Trustee, the asset sales generated taxable gains. And, due to the Debtor's status as an LLC, the Trustee asserted that the income taxes owed as a result of the asset sales "will not be payable at the entity level." Instead, the Trustee argued that the income tax liability will "pass[-]through to . . . Debtor's equity holders." The Trustee alleged that, even though the tax obligations pass-through to the Debtor's members, North Carolina law requires the manager of an LLC with a nonresident LLC member to file an informational return and pay the nonresident members' income tax on their behalf from any otherwise distributable share of profits of the LLC. According to the Trustee, payment of income tax on behalf of Debtor's equity interest holders from the assets of the estate would constitute a distribution to the members ahead of the creditors of the LLC, and therefore would violate the distribution priorities mandated in 11 U.S.C. section 726. Under section 726, creditors must be paid prior to any distribution to equity holders. Therefore, the Trustee argued that, to the extent N.C. Gen. Stat. section 105-154(d) purports to require payment of member taxes prior to distributions to creditors, it is preempted by the distribution scheme under section 726. The Trustee further argued that regardless of the distribution scheme required by section 726 and any provisions of the North Carolina Limited Liability Company Act, N.C. Gen. Stat. section 57D-1-01 et seq., tax obligations of the members are prohibited from creating an obligation of the estate under 11 U.S.C. section 346. Lastly, the Trustee argued that N.C. Gen. Stat. section 105-154(d) does not create a tax at the entity level, but is merely a mechanism to facilitate the state's collection of taxes owed by a nonresident LLC member from distributions that otherwise would be payable to the nonresident member. The Trustee first pointed to the title of the statute: "Payment of Tax on behalf of Nonresident Owner or Partner." The Trustee then cited the language of the statute, which states that "[t]he manager of the business shall pay with the return the tax on each nonresident owner or partner's share of the income computed at the rate levied on individuals under G.S. 105-153.7." The Trustee argued that this language demonstrates that the tax is on the nonresident's share of the partnerships income and payment made is for the benefit of the nonresident, but this provision does not purport to create a separate tax at the entity level. Instead, Trustee contended that this language merely places an obligation on the manager to report and pay the tax obligations of nonresident members, but nowhere purports to create an obligation of the entity to North Carolina. Judge Kahn stated that to the extent that N.C. Gen. Stat. section 105-154 purports to impose a tax obligation against the Debtor, it is preempted by the Internal Revenue Code ("IRC") and 11 U.S.C. section 346. Section 346 "specifically sets forth and enumerates tax provisions relating to the treatment of state and local taxes and provides that the provisions of the Internal Revenue Code generally supersede any state and local rules." The Trustee asserted that North Carolina state taxation laws are preempted by section 346 and title 26 of the IRC, and the Court agreed. "Section 346 preempts state tax law in favor of specific provisions detailed in several subsections." Under federal law, any taxes in this case are taxable to the members and are not imposed on the corporation or partnership. It is well settled that pass-through entities, such as LLCs like Debtor, are not subject to federal taxation at the entity level. As an LLC with more than one member, Debtor is treated as a partnership for federal taxation purposes unless it elects to be treated as a corporation. "A partnership as such shall not be subject to the income tax imposed by this chapter. Persons carrying on business as partners shall be liable for income tax only in their separate or individual capacities." "Partnerships are not taxed at the entity level." Instead, "partners are taxed under a passthrough taxation system." Under this system, "[a] partnership is not itself liable for the payment of income taxes; instead, partnerships operate as `pass-through' entities and each partner must pay taxes on his or her allocated share of the partnership's income or loss." However, partnerships still are "required to submit annual informational returns to the IRS reporting income, gains, losses, and deductions." Income taxes of a pass-through entity like an LLC or S corporation are liabilities of that entity's members. "The filing of a bankruptcy case by the corporation does not alter its tax status or that of its shareholders." The Court, having determined that any taxes were imposed solely on the nonresident members rather than the LLC under federal law, said section 346(b) dictates the result in this case. According to the Court, that section expressly prohibits such taxes from being a liability of the estate. Furthermore, the North Carolina statutes and tax bulletins make it abundantly clear that the members at all times remain ultimately liable for the taxes, and the Department did not argue otherwise. Since the members are unquestionably liable for their respective tax obligations, the estate cannot also be liable. Section 346(b) expressly prohibits any dual tax obligation of the members and the estate, providing that the estate shall not be liable for any tax imposed on the members. The Court found that the estate has no liability for the taxes imposed against the resident or non-resident members of the LLC. The Court, therefore, granted the Trustee's motion. A copy of the Court's Order dated August 10, 2020 is available at https://bit.ly/2GpSA8l from Leagle.com. About North Carolina Tobacco North Carolina Tobacco International, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 17-51077) on Oct. 10, 2017. William A. Barbee, a court-appointed receiver for the Debtor's assets, signed the petition. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $1 million. Judge Benjamin A. Kahn oversees the case. The Debtor hired Richard Steele Wright, Esq., at Moon Wright & Houston, PLLC, as bankruptcy counsel. On Oct. 20, 2017, the Court appointed John A. Northen as Chapter 11 trustee for the Debtor. Northen Blue LLP serves as counsel to the Trustee. The Trustee hired GreerWalker LLP as financial consultant. An official committee of unsecured creditors has not been appointed in the case. Northen Blue's John Paul H. Cournoyer was later appointed as Chapter 7 trustee. NORTHERN DYNASTY: Calls J Capital Report 'Fatuous, Flimsy' ---------------------------------------------------------- Northern Dynasty Minerals Ltd. responded to a report issued by Beijing-based short seller J Capital Research on Sept. 9, 2020, calling it "fatuous, flimsy and fundamentally self-serving," as well as "typical of such efforts to profit by destroying the value of honest shareholders' investments." "We have heard and responded to the same baseless claims in JCap's 'research' report countless times since they were initially levelled by New York-based 'short-and-distort' firm Kerrisdale Capital back in 2017," said Northern Dynasty President & CEO Ron Thiessen. "Financial markets weighed and dismissed Kerrisdale's self-serving arguments then, and we are confident they will do so even more swiftly this time with these unoriginal allegations coming out of China." Thiessen noted that the allegations in the Kerrisdale report formed the basis of several derivative shareholder actions against Northern Dynasty, which were ultimately dismissed by the courts for failure to state a cause of action. JCap's report, entitled Pretend & Extend: The No-Return Deposit, claims that Northern Dynasty's 100%-owned Pebble copper-gold-molybdenum-silver-rhenium project in southwest Alaska will lose money, that capital costs have been underestimated and that the project's proposed mining plan intentionally targets low-grade portions of the deposit. Less than four months ago, JCap levelled similar accusations against Alaska's other late-stage mineral prospect – the Donlin Gold project (co-owned by Barrick and Novagold) – leading to a civil action lawsuit for defamation being brought against the firm. "We will take an appropriate amount of time to review the report and the market's reaction to it, if any, as well as our options for protecting the company and our shareholders from these spurious claims," Thiessen said, noting the Company may choose to issue a comprehensive response or may simply ignore what is intrinsically a self-serving attempt to profit by creating panic in the marketplace. Thiessen advised investors to carefully read and consider the extensive disclaimers issued by JCap, which confirm the authors have shorted Northern Dynasty stock and absolve them of any potential responsibility for the 'opinions,' 'inferences' and 'deductions' in the report. "We encourage our investors in the strongest possible terms not to reward this type of value destructive and irresponsible behavior," he said. Thiessen believes other parties engaged in market manipulation and short-selling have conspired to cost Northern Dynasty shareholders, large and small, some $500 million in recent months. He said there is little the Company can do to prosecute or counter these illegal activities other than continuing to advance the Pebble Project toward final permitting, construction and profitable operations. "Our focus must be on continuing to advance through the rigorous, objective and science-based federal permitting process in the United States, and proving that Pebble is a project of merit that will materially benefit project stakeholders in Alaska and our shareholders in America and around the world,' Thiessen said. "That's what we intend to do." Thiessen pointed to several egregious lies and misrepresentations in the JCap report as evidence of the quality of the research and the integrity of its authors: JCap claim: "...(Northern Dynasty) management is openly saying that, once the plan is under way, they will push forward with another 58 years. Management claims they will not need any additional environmental approval to extend the life of the mine." Northern Dynasty response: This claim is false. No future development scenario has been proposed at Pebble. The Company has consistently stated that any proposal for subsequent phases of development must undergo rigorous federal and state permitting processes. JCap claim: "Pebble itself in 2018 relied on its 2011 scenario to argue that the mine is economically viable. The USACE (US Army Corps of Engineers) asked Pebble for modeling on the economic viability of the proposed mine. In response, Pebble provided analysis based entirely on the 2011 scenario." Northern Dynasty response: JCap intentionally mischaracterizes the US Army Corps of Engineers' request for information and the Pebble Limited Partnership's response. In fact, Pebble was explicit when providing the 2011 data to USACE that it did not reflect current project costs. The allegation that Pebble capital costs are underestimated by Northern Dynasty is based on this mischaracterization. JCap claim: Northern Dynasty "has claimed poverty to dodge a feasibility study, which would demonstrate economic viability." Northern Dynasty response: Northern Dynasty has consistently stated it does not intend to complete a Preliminary Economic Assessment or other technical study to report on the future financial performance of the proposed Pebble mine until the project design is confirmed by regulators through the granting of a positive Record of Decision. That position and its rationale has not changed. About Northern Dynasty Minerals Northern Dynasty -- http://www.northerndynastyminerals.com-- is a mineral exploration and development company based in Vancouver, Canada. Northern Dynasty's principal asset, owned through its wholly-owned Alaska-based US subsidiary Pebble Limited Partnership, is a 100% interest in a contiguous block of 2,402 mineral claims in southwest Alaska, including the Pebble deposit. The Company is listed on the Toronto Stock Exchange under the symbol "NDM" and on the NYSE American Exchange under the symbol "NAK". Northern Dynasty reported a net loss of C$69.19 million for the year ended Dec. 31, 2019, compared to a net loss of C$15.96 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $154.62 million in total assets, C$16.12 million in total liabilities, and C$138.50 million. Deloitte LLP, in Vancouver, Canada, the Company's auditor since 2009, issued a "going concern" qualification in its report dated March 30, 2020, citing that the Company incurred a consolidated net loss of $69 million during the year ended Dec. 31, 2019 and, as of that date, the Company had a working capital deficit of $0.2 million and the consolidated deficit was $556 million. These conditions, along with other matters, raise substantial doubt about its ability to continue as a going concern. NPHSS LLC: Disclosure Statement Hearing Continued to Oct. 1 ----------------------------------------------------------- On Aug. 3, 2020, debtor NPHSS LLC filed a status report requesting to continue the hearing on Debtor's Combined Plan of Reorganization and Disclosure Statement set for August 6, 2020 at 1:30 p.m. The Debtor has sought continuance to amend the Disclosure Statement to include the terms of its recently filed motion to sell the piece of real property that is Debtor's primary asset, and to allow creditors to, if necessary, file objections to that Amended Plan. On Aug. 4, 2020, Judge Stephen L. Johnson ordered that: * The hearing on Debtor’s Disclosure Statement currently set for August 6, 2020 at 1:30 p.m. is continued to October 1, 2020 at 1:30 p.m. * The Debtor will file an amended Disclosure Statement by September 4, 2020. * Creditors will file any objections to the amended Disclosure Statement by September 18, 2020. * The Debtor will file any response to such objections by September 25, 2020. A full-text copy of the order dated August 4, 2020, is available at https://tinyurl.com/y3uyhh48 from PacerMonitor at no charge. About NPHSS LLC NPHSS, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)) based in Carmel by the Sea, Calif. NPHSS filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 20-50296) on Feb. 19, 2020. The petition was signed by Franklin Davis Loffer, III, Debtor's managing member. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. Judge Stephen L. Johnson oversees the case. Stanley Zlotoff, Esq., is the Debtor's bankruptcy counsel. OCEAN POWER: Incurs $3.38 Million Net Loss in First Quarter ----------------------------------------------------------- Ocean Power Technologies, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $3.38 million on $169,000 of revenues for the three months ended July 31, 2020, compared to a net loss of $3.02 million on $202,000 of revenues for the three months ended July 31, 2019. Revenue for the three months ended July 31, 2020, was primarily derived from the Enel Green Power project, while revenue for the same period in the prior year was mainly from projects with Premier Oil and the U.S. Navy. The net loss for the first quarter of fiscal 2021 increased by $0.4 million as compared to the first quarter of fiscal 2020, which was mainly attributable to product development and administrative costs. "We are fielding strong demand for proposals of OPT solutions from diverse markets," said George H. Kirby, president and chief executive officer of OPT. "With new products and solutions, and an expanding sales and business development presence, we believe that we are well-positioned to deliver on our commitment to grow our revenue." As of July 31, 2020, the Company had $14.40 million in total assets, $4.28 million in total liabilities, and $10.12 million in total stockholders' equity. Total cash, cash equivalents, and restricted cash was $12.0 million as of July 31, 2020. Net cash used in operating activities decreased by $0.9 million during the first quarter of fiscal 2021 to $2.7 million, as compared to the first quarter of fiscal 2020. On May 5, 2020, the Company received $0.9 million from the Paycheck Protection Program made available by the Coronavirus Aid, Relief and Economic Security Act, commonly referred to as the CARES Act. The Company has experienced substantial and recurring losses from operations, which have contributed to an accumulated deficit of $223.5 million as of July 31, 2020. As of July 31, 2020, the Company had approximately $12.0 million in cash, cash equivalents, and restricted cash on hand. The Company generated revenues of $0.2 million and $0.2 million during the three months ended July 31, 2020 and 2019, respectively. Based on the Company's cash, cash equivalents and restricted cash balances as of July 31, 2020, the Company believes that it will be able to finance its capital requirements and operations into the quarter ending July 31, 2021. Among other things, the Company is currently evaluating a variety of different financing alternatives and it expects to continue to fund its business with sales of its securities and through generating revenue with customers. The Company will require additional equity and/or debt financing to continue its operations into fiscal year 2022. The Company cannot provide assurances that it will be able to secure additional funding when needed or at all, or, if secured, that such funding would be on favorable terms. The Company said these factors raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1378140/000149315220017737/form10-q.htm About Ocean Power Technologies Headquartered in Monroe Township, New Jersey, Ocean Power Technologies, Inc. -- http://www.oceanpowertechnologies.com/-- is a marine power solutions provider that designs, manufactures, sells, and services its products while working closely with partners that provide payloads, integration services, and marine installation services. Ocean Power reported a net loss of $10.35 million for the 12 months ended April 30, 2020, compared to a net loss of $12.25 million for the 12 months ended April 30, 2019. As of April 30, 2020, the Company had $13.54 million in total assets, $3.04 million in total liabilities, and $10.49 million in total stockholders' equity. KPMG LLP, in Philadelphia, Pennsylvania, the Company's auditor since 2004, issued a "going concern" qualification in its report dated June 29, 2020, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. OMNIMAX INTL: Moody's Appends LD to 'Ca-PD' PDR on Missed Payment ----------------------------------------------------------------- Moody's Investors Service affirmed the Probability of Default Rating of OmniMax International, Inc and appended a limited default designation following the company's missed principal payment on its senior secured notes. Moody's also affirmed all other ratings of the company, including the Ca Corporate Family Rating (CFR) and the Caa3 rating on the company's senior secured notes. The outlook is negative. The affirmation of the Ca Corporate Family Rating reflects Moody's expectation that OmniMax's depressed profitability, weak liquidity, and untenable capital structure will lead to a restructuring. The Ca-PD/LD designation follows OminMax's failure to make the principal payment on its senior secured notes due August 15, 2020. OmniMax subsequently entered into a forbearance agreement with its senior secured note holders and simultaneously entered into a definitive agreement to be acquired by SVP Global. The negative outlook reflects the range of possible outcomes of recovery from the successful sale of the company to the inability to restructure outside of Chapter 11. The following rating actions were taken: Issuer: OmniMax International, Inc Probability of Default Rating changed to Ca-PD / appended LD from Ca-PD Corporate Family Rating, Affirmed Ca Senior Secured Notes, Affirmed Caa3 (LGD3) Outlook Actions: Issuer: OmniMax International, Inc Outlook, remains Negative RATINGS RATIONALE OmniMax International, Inc.'s Ca CFR reflects the company's untenable capital structure and weak liquidity. However, Moody's also takes into consideration OminMax's exposure to less cyclical refurbishment/maintenance-based products in the residential segment as opposed to those based on new residential construction. The company also holds leading positions in some niche areas of the fragmented residential, commercial and RV markets. The negative outlook reflects Moody's view that recovery prospects are appropriately captured in the current ratings, but there is uncertainty in the possibility of outcomes from the successful sale of the company to the inability to restructure outside of a Chapter 11 filing. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company: -- Can successfully refinance its debt -- Can affect a meaningful reduction in leverage -- Sees meaningful improvement in operating results and free cash flow -- Can sustain a good liquidity profile The ratings could be downgraded if: -- Moody's recovery estimates deteriorate -- Liquidity weakens further Headquartered in Norcross, Georgia, OmniMax International is a manufacturer of aluminum, steel, vinyl and copper products sold mainly in North America and Europe. OmniMax's products are sold to the residential repair and remodel, commercial construction and recreational vehicle markets. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. OPPENHEIMER HOLDINGS: S&P Rates $125MM Senior Secured Notes 'B+' ---------------------------------------------------------------- S&P Global Ratings said it that it has assigned its 'B+' debt rating to Oppenheimer Holdings Inc.'s proposed $125 million senior notes due 2025. The notes will be guaranteed on a senior secured basis by Oppenheimer's subsidiaries, E.A. Viner International Co. and Viner Finance Inc., and will be secured by a first-priority security interest in substantially all of Oppenheimer's and the subsidiary guarantors' existing and future tangible and intangible assets. S&P expects Oppenheimer to use proceeds from the offering, along with cash on hand, to redeem its 6.75% senior secured notes due July 2022. In its view, this offering does not affect S&P's rating or outlook on the company, given it is largely debt for debt in nature. Despite challenging conditions in the year-to-date period, Oppenheimer recorded relatively good results in the first half of the year, supporting S&P's stable outlook on the company. Notably, pretax income was flat year over year despite cash sweep income being down substantially due to Federal Reserve rate cuts. All of the firm's other substantial revenue sources, including commissions, advisory fees, and investment banking fees, are all up year over year through June 30, and the company's capital markets segment had a very solid second quarter on a profitability basis, generating $22 million in pretax income. This is a departure from previous years where this segment had pretax losses. PAPER STORE: Williams' Suit Stayed Pending Bankruptcy Proceedings ----------------------------------------------------------------- District Judge Ronnie Abrams stayed the case captioned PAMELA WILLIAMS, on behalf of herself and all others similarly situated, Plaintiff, v. THE PAPER STORE, LLC, Defendant, No. 20-CV-2298 (RA) (S.D.N.Y.) pending the Defendant's bankruptcy proceedings. The Defendant has filed a Notice of Suggestion of Bankruptcy stating that it has filed a Chapter 11 case before the United States Bankruptcy Court for the District of Massachusetts. Judge Abrams ordered the Defendant to file a letter no later than Oct. 7, 2020 updating the Court as to the status of the proceedings. A copy of the Court's Order dated August 7, 2020 is available at https://bit.ly/3jDL8EQ from Leagle.com. About The Paper Store The Paper Store, LLC -- http://www.thepaperstore.com-- is a family-owned and family-operated specialty gift retailer, with 86 stores in seven states and an e-commerce business. The retail locations feature merchandise comprising fashion, accessories, spa, home decor, stationery, jewelry, sports and more from well-regarded brands such as Vera Bradley, Lilly Pulitzer, Godiva, 47 Brands, Alex and Ani, Life is Good, Vineyard Vines, and Sugarfina. Paper Store and its affiliate TPS Holdings, LLC sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-40743) on July 14, 2020. In the petition signed by CRO Don Van der Wiel, Paper Store was estimated to have assets of $10 million to $50 million and debt of $50 million to $100 million. Judge Christopher J. Panos oversees the cases. Debtors have tapped Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as their legal counsel, G2 Capital Advisors as restructuring advisor, SSG Capital Advisors as investment banker, Verdolno & Lowet, P.C. as accountant, and Donlin, Recano & Co., Inc. as claims and noticing agent. The U.S. Trustee for Region 1 appointed a committee of unsecured creditors on July 27, 2020. The committee has tapped Fox Rothschild, LLP as its legal counsel and Alvarez & Marsal North America, LLC as its financial advisor. PARK HOTELS: S&P Rates New $650MM Senior Secured Notes 'BB-' ------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '1' recovery rating to the proposed $650 million senior secured notes due 2028 issued by Park Hotels & Resorts Inc.'s subsidiary borrowers Park Intermediate Holdings LLC and PK Domestic Property LLC. The '1' recovery rating indicates S&P's expectation for very high (90%-100%; rounded estimate: 90%) recovery for senior secured lenders in the event of a default. The '1' recovery rating assumes total revolver commitments will reduce to $901 million in December 2021 after temporarily increasing to $1.075 billion at the close of the proposed transaction. This is because S&P believes the higher commitment level will not be fully utilized under its forecast of liquidity uses, and certain non-extending revolver lenders will end their participation. The reduced future commitment level of $901 million will mature in 2023, which is the assumed year of default under S&P's hypothetical default scenario. Park will use the proceeds from the proposed notes to fully repay the $631 million outstanding under the term loan A due December 2021, repay a modest portion of revolver balances, and cover transaction fees and expenses. In conjunction with the proposed notes issuance, Park is seeking amendments to its credit facilities and the delayed-draw term loan that would extend the covenant relief period and introduce subsidiary guarantees from all unencumbered hotel subsidiaries. Moreover, the proposed issuance and amendments would extend maturities to 2023 for a significant portion of total debt outstanding. "Our 'B' issuer credit rating and negative outlook on Park are unchanged even though we believe the company is extending its covenant relief period because the increase of COVID-19 infections in the U.S. in recent months will likely slow the recovery in business and group travel and lodging demand," S&P said. "It is becoming increasingly clear to us that the 2021 recovery path we had assumed is at risk and that Park may not be able to restore LTM (last-twelve-month) credit measures in line with our 8.5x adjusted debt to EBITDA and 1.5x interest coverage downgrade thresholds by the end of 2021," the rating agency said. S&P believes Park's liquidity and business strengths warrant extending S&P's outlook horizon to 2022 for the company to restore credit measures in line with the current rating, particularly if a medical solution for COVID-19 emerges in the first half of 2021 and can be broadly disseminated during the remainder of 2021. A modestly longer outlook horizon is supported by S&P's estimate that Park has adequate liquidity and that the current liquidity runway is at least 25 months based on current business conditions. "It is our understanding that, based on Park's current operations and pace of hotel reopening, the company's monthly cash usage would be about $54 million, consisting of about $50 million in operating and corporate expenses, and maintenance capital expenditures of about $4 million," S&P said. S&P estimates that Park has about $1.4 billion of adjusted pro forma liquidity after giving effect to the proposed issuance, amendments, and anticipated reduction of revolver commitments to $901 million after December 2021. As a result, the liquidity runway could plausibly enable Park to sustain operations until travel and hotel demand gains momentum in 2022. S&P believes an outlook horizon into the first half of 2022 is further supported by: -- S&P's expectation that the company's adjusted debt to run-rate EBITDA could approach 8.5x by the fourth quarter of 2021; -- S&P's belief that while demand, especially for group and business travel, will be impaired at least through 2021, Park's portfolio of hotels will eventually recover along with leisure and hotel demand because of its exposure to desirable city-center and destination travel markets; -- The company's high-quality asset base, which enables it to command premium pricing in stable economic conditions; -- Park's debt maturity profile pro forma for the amendments and proposed issuance has a meaningful portion of maturities extended to 2023 and beyond; -- The company's unencumbered asset base that provides the flexibility to monetize individual hotels to reduce debt if needed, even if the timing may be disadvantageous in a recession scenario. S&P revised its base case forecast incorporating the following assumptions: -- In the U.S., the economy, midscale, and extended-stay segments have outperformed the industry, and the upper upscale and luxury full-service segments have underperformed the industry, since the pandemic began. This divergence has worsened in recent months and could persist until there is a medical solution to COVID-19 that improves consumers' confidence to travel. S&P assumes this divergence will continue into at least the first half of 2021. -- Leisure travel will recover first, business transient second, and group business third because of potential lingering concerns about gatherings and social distancing norms. Group travel would likely not recover until there is a vaccine or a reliable therapy. -- EBITDA generated by a hotel owner will be more sensitive than a manager and franchisor to declines in revenue per available room (RevPAR). -- Park to manage its cost base in a manner that achieves breakeven at lower occupancy rates than its hotels historically operated because guests may demand lower service levels, particularly food and beverage or any high-touch point service, for a prolonged period. The company has stated that assuming average daily rate is 15%-20% below that of the period immediately prior to the pandemic, hotel-level profitability could break-even at occupancy of 35%-40%. -- U.S. industry RevPAR will decline 40%-50% in 2020. S&P assumes Park's RevPAR will decline more than the high end of this range in 2020, perhaps 65%-75%, due to its exposure to upper upscale and luxury hotels and select destination markets that have been slower to recover. -- Based on its assumption that the economy continues to recover and a rebound in travel demand is sustained through 2021, S&P assumes 2021 U.S. industry RevPAR could increase 40%-50% but remain 20%-30% below 2019 levels. S&P assumes Park's RevPAR will increase by more than the high end of the rating agency's industry range in 2021 from the very low levels in 2020. S&P preliminarily assumes a medical solution could emerge in the first half of 2021 and achieve some level of broad dissemination over the course of 2021, enabling Park's RevPAR recovery to gain momentum in 2022. -- Given Park's exposure to owned hotels and meaningful operating leverage in the business model, adjusted EBITDA could be negative in 2020 and improve substantially in 2021, but still be less than 50% of 2019 EBITDA. -- Park to significantly reduce capital spending in 2020 and 2021, compared to 2019. -- No dividends or share repurchases for the remainder of 2020. -- No acquisitions or asset sales in 2020 or 2021. Based on these assumptions, S&P arrives at the following credit measures: -- Adjusted debt-to-EBITDA that is very high in 2020, and above 10x in 2021. -- Low EBITDA coverage of interest expense in 2020, improving to at least 1x in 2021. -- If a medical solution attains acceptance and broad dissemination in 2021, adjusted debt to EBITDA could improve to below 8.5x in 2022. Environmental, social, and governance (ESG) credit factors relevant to this rating change: -- Health and safety ISSUE RATINGS – RECOVERY ANALYSIS Key analytical factors: -- S&P's recovery analysis assumes the proposed issuance raises $650 million of senior secured notes due 2028, and that the proposed amendments are completed. -- S&P assigned its '1' recovery rating and 'BB-' issue-level rating to the proposed senior secured notes due in 2028. The '1' recovery rating indicates S&P's expectation of very high (90%-100%; rounded estimate: 90%) recovery for lenders in the event of a default." The '1' recovery rating incorporates the notes due 2025 that were upsized to $650 million during the issuance process in May, and assumes $901 million of revolver commitments at the time of hypothetical default. The revolver commitments will temporarily increase to $1.075 billion until December 2021, decreasing to $901 million thereafter. -- The proposed notes are pari passu with the existing credit facilities, $670 million delayed-draw term loan, and $650 million senior secured notes due 2025, and collectively they are secured by a first-priority lien on the equity interests of eight property-owning subsidiaries. In addition, pursuant to the proposed amendment, subsidiary guarantees will be provided by subsidiaries owning unencumbered hotels, and S&P assumes their value as well as the pro rata share of residual value (if there is any) from encumbered hotels would inure to the benefit of lenders of the notes, credit facilities, and delayed-draw term loan in the event of a default. -- It is S&P's understanding that the covenant relief period will be extended through and including Dec. 31, 2021. The collateral securing the notes, credit facilities, and delayed-draw term loan would be released subsequent to the covenant relief period if Park complies with financial covenants and its leverage ratio as defined in the amended credit agreements is below 6.5x for two consecutive quarters. In addition, even if collateral is released, subsidiary guarantees from encumbered and un-encumbered hotels would remain in place. The company would not be able to secure any other debt with the released collateral. If the collateral is released, S&P would reassess the notes, credit facilities, and delayed draw term loan as unsecured debt. -- Park is required to maintain a covenant for minimum liquidity through December 2022. Minimum liquidity through Dec. 24, 2021 is defined as $200 million in unrestricted cash and revolver availability plus 50% of the $174 million non-extending revolver commitments (or $87 million). After Dec. 24, 2021, minimum liquidity is defined as $200 million in unrestricted cash and revolver availability. In addition, during the covenant relief period, there will be negative incurrence covenants including restrictions on additional indebtedness other than the credit facilities, delayed-draw term loan, notes, and nonrecourse debt on excluded subsidiaries limited to an aggregate of $350 million, subject to certain terms and conditions. Subsidiaries other than those that guarantee the credit facilities, delayed draw term loan, and notes will be prohibited from providing guarantees to other debt. Restricted payments such as stock repurchases are further restricted during the covenant relief period. -- Subsequent to the covenant relief period, maintenance covenants will apply according to the amended credit agreements. Key financial covenants include a maximum leverage covenant of 8.5x for the quarters ending March and June 2022, which gradually steps down. After the covenant relief period, Park is required to comply with a covenant of unencumbered net operating income (NOI) to unsecured interest expense of no less than 1.75x for four quarters through December 2022, before the covenant steps up to 2x. Other key financial covenants include fixed-charge coverage ratio of 1.5x, secured debt to total asset value ratio of no more than 45%, and unencumbered leverage ratio of 60%. -- S&P's simulated default scenario contemplates a payment default in 2023, and assumes a severe economic downturn that reduces hotel demand, increased competition, external shocks that discourage travel, cyclical overbuilding in the hotel industry, and an 85% drawn revolving credit facility at default. -- S&P assumes Park would reorganize as a stand-alone going concern, or its assets could be sold in parts or in whole. It uses an income capitalization valuation approach to estimate the recovery value of the company's assets. -- S&P applies 35% stress to net operating income and use a 9.63% capitalization rate to arrive at the gross recovery value. -- S&P believes there would be very high (90%-100%, rounded estimate: 90%) recovery prospects for the credit facilities, delayed-draw term loan, and notes, all of which the rating agency understands to be pari passu. The '1' recovery rating reflects that even with 35% stress on NOI, there would be very high recovery value for lenders. Most of the value is derived from the unencumbered pool of assets, plus the eight properties with their respective direct parent's equity pledged to the lenders as collateral, and some residual value from certain encumbered properties after their respective nonrecourse debt is taken into consideration. In addition, S&P believes the subsidiary guarantees, maintenance financial covenants, and the negative pledge on assets provide lenders with protections from loss of asset coverage. Simplified waterfall: -- Net enterprise value available to lenders after 5% bankruptcy administrative costs and 5% property-level sales and marketing expenses: $2.66 billion -- Total secured debt (senior secured notes, credit facilities, and delayed-draw term loan): $2.83 billion -- Recovery expectations: 90%-100% (rounded estimate: 90%) All debt amounts include six months of prepetition interest. PENN NATIONAL: S&P Affirms 'B' ICR; Ratings Off Watch Negative -------------------------------------------------------------- S&P Global Ratings affirmed all of its ratings on U.S. regional gaming operator Penn National Gaming Inc., including its 'B' issuer credit rating, and removed the ratings from CreditWatch, where it placed them with negative implications on March 20, 2020. The affirmation reflects S&P's forecast that Penn's adjusted leverage will improve below 7.5x in 2021 following a significant spike this year due to the temporary closure of its casinos. S&P forecasts that the company's lease-adjusted net leverage will improve below the rating agency's 7.5x downgrade threshold by the end of 2021 after spiking this year due to the months-long closure of its casinos amid the COVID-19 pandemic. S&P's estimate that Penn's EBITDA will increase over the next several quarters assumes a modest improvement in its EBITDA margin relative to 2019 due to the cost cuts management implemented over the past few months, particularly related to its labor and marketing expenses. Additionally, S&P's expectation that the company will improve the margin reflects its view that many of the company's lower-margin or loss-leading amenities, like buffets, will remain closed for some time to comply with health and safety measures intended to limit the spread of the coronavirus. S&P also believes Penn may reopen its remaining closed properties (Zia Park Casino and Tropicana Resort in Las Vegas) over the coming months, although these facilities only contribute a modest level of EBITDA. While S&P believes the social distancing and other health and safety measures designed to limit capacity in casinos may hurt the company's revenue, the rating agency believes they will have less of an effect than it previously expected because it believes the historical peak utilization rates in many markets were below these limits. Therefore, despite the ongoing capacity restrictions, S&P expects Penn to continue to improve its revenue and EBITDA over the next few quarters as certain markets ease their capacity restrictions and customers become more comfortable with being in enclosed public spaces. Additionally, S&P believes that many of the cost cuts management implemented are sustainable, particularly if market demand remains below pre-COVID-19 levels and its competitors do not materially ramp-up their marketing activity. S&P believes it may take Penn several quarters to return its revenue and EBITDA to pre-closure levels because the rating agency expects the capacity and other social-distancing restrictions will remain in place until there is a vaccine for the virus or an effective therapy to treat COVID-19. S&P believes regional gaming markets, like the ones in which Penn operates, will recover faster than destination markets, such as the Las Vegas Strip, because most customers drive to these properties rather than fly, which reduces the cost of the trip and potentially alleviates any lingering fears around travel. Penn is broadly geographically diversified and has properties in 19 different states, which may enable it to offset some of its losses if an increase in the number of virus cases in certain states lead to additional operating restrictions (assuming a resurgence of the pandemic does not lead to the same type of widespread closures implemented earlier this year). Despite the potential for a resurgence, S&P believes a prolonged period of high U.S. unemployment may impair gaming demand because it would reduce consumer discretionary spending, especially in the absence of additional government stimulus efforts. S&P's 2021 adjusted leverage forecast assumes the following: -- U.S. unemployment remains elevated at 7.2% in 2021; -- Total revenue declines by about 5%-10% relative to 2019. S&P assumes Penn's Northeast, South, and Midwest segments recover the fastest and improve their revenue to about 5%-10% below 2019 levels because they cater to mostly local and regional customers. S&P assumes the company's West segment (the rating agency expects it to reopen Tropicana Las Vegas in mid-September), the smallest of its regions, will experience the slowest recovery and report revenue of at least 10%-15% below 2019 levels. S&P also assumes Penn's two new satellite casinos in Pennsylvania open in the second half of 2021 and begin contributing to its revenue and EBITDA; and EBITDAR to be flat to slightly negative relative to 2019 as a result of run rate cost synergies from acquisitions and cost reductions made as a result of coronavirus impact. S&P assumes that some of the cost reductions management implemented over the past few months will remain in place through 2021. However, S&P believes gaming operators may face some challenges in managing their expenses next year due to the uncertain and potentially volatile level of demand. "Based on these assumptions, we expect Penn's net lease-adjusted leverage to improve to the mid- to high-6x area by the end of 2021, which would provide it with a good cushion relative to our 7.5x downgrade threshold," S&P said. Penn completed a number of liquidity enhancing transactions earlier this year that helped preserve its liquidity while its casinos were closed and alleviated the liquidity risk posed by its high fixed rent payments. All of the company's wholly owned casinos are subject to leases with high fixed rent payments, which reduces its operating flexibility because it must cover these rent payments regardless of its operating performance and whether its properties are open. This exposes Penn National to a greater level of cash flow volatility than other regional gaming operators that own more of their real estate. These fixed rent payment consume roughly half of the company's EBITDAR (EBITDA before rent payments) and their drain on its resources was amplified while its properties were closed, which poses a liquidity risk. To preserve cash and alleviate the liquidity risk posed by its fixed rent payments, Penn sold the real estate assets of Tropicana Las Vegas to Gaming and Leisure Properties (GLPI) and entered into a ground lease for its Morgantown property in exchange for $337.5 million of rent credits, which it can use to offset its cash rent expense this year. Additionally, the company raised approximately $675 million of additional liquidity through its common stock and convertible senior note offerings in May 2020. Additionally, while its casinos were closed management implemented aggressive cost-reduction efforts, including furloughing employees, reducing its compensation, and suspending construction on its development projects, to reduce its monthly cash burn. Penn National ended the second quarter with about $1.2 billion of cash on its balance sheet, which S&P believes provides it with sufficient liquidity to navigate the potential volatility in future quarters. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook reflects the significant deterioration in Penn's credit measures this year due to the temporary closure of its casinos because of the coronavirus pandemic. Although the company has reopened many of its casinos and most regional casinos are reporting year-over-year improvements in their EBITDAR, there remains a high degree of uncertainty around the sustainability of its recovery over the next year. This is especially significant given S&P's view that U.S. unemployment will remain high through at least 2021 and the continued risk of a second wave of infections later this year." "We would consider lowering our ratings on Penn if we believe its lease-adjusted leverage will not improve below 7.5x next year," S&P said. "This could occur if its recovery is materially slower than we currently expect because of persistent high unemployment or changes in customer behavior stemming from the coronavirus or if an increasing number of virus cases in its primary markets lead to additional property closures or more stringent operating restrictions, reducing its EBITDAR by 15% relative to our forecast," the rating agency said. S&P could also lower its ratings if Penn's liquidity position deteriorated because of a weaker-than-expected recovery in its operating performance and its high fixed rent obligations. "It is unlikely that we will revise our outlook on Penn to stable over the next few quarters given our forecast that its adjusted leverage will remain high and above our downgrade threshold into 2021," S&P said. That said, we could revise our outlook to stable if we believe its operating performance has stabilized across its portfolio and anticipate its adjusted leverage will improve below our 7.5x downgrade threshold in 2021. However, the likelihood that we will raise our ratings on Penn through at least 2021 remains remote given our forecast credit measures, although we would consider raising our ratings if it appears to have sustainably reduced its adjusted leverage below 6.5x," the rating agency said. PERMIAN HOLDCO 1: Cedar Bend Buying Odessa Property for $440K ------------------------------------------------------------- Permian Holdco 1, Inc. and affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize the private sale of Permian Tank & Manufacturing, Inc.'s undeveloped real property located at 8820 NW Loop 338, Odessa, Texas to Cedar Bend Land, LLC for $440,000 or $14,426 per acre, under the terms of the Agreement for Purchase and Sale of Unimproved Land. The Property consists of approximately 30.5 acres of undeveloped, commercially zoned land. While the Debtors are utilizing their facility at the location, they are no longer using the undeveloped land behind the facility. The vast majority of the Property sits behind the Debtors' facility, and the Property has less than 300 feet of frontage to the road. Given the location of the Property, the Debtors believe that the only likely purchasers for the Property would be the owners of adjacent properties. The Debtors’ paramount goal in these Chapter 11 Cases is to maximize the value of their estates for the benefit of their creditors. Given the location of the Property, in early May, 2020, they engaged in discussions with the Purchaser, which owns an adjacent facility, with respect to the terms of a potential sale. In late June, 2020, the Debtors engaged in good-faith and arms'-length negotiations with the Purchaser, ultimately agreeing on the final purchase price of $440,000, or $14,426 per acre, subject to adjustment after completion of a land survey. In conducting their diligence with respect to the Purchase Price, the Debtors reviewed multiple comparable land sales, and accounted for the limited frontage of the Property. In addition to the Purchase Price, the Purchaser agreed to pay for the land survey and to evenly split closing costs. After such review and diligence, the Debtors determined that the Purchase Price was fair and reasonable. Pursuant to the terms and conditions of the Purchase Agreement, and subject to the Court's approval, the Debtors propose to sell to the Purchaser the Property, and the Property is being sold on an "as is, where is basis," free and clear of all liens, claims, encumbrances and other interests. The Purchaser has deposited $10,000 with Basin Abstract & Title, the title company. The Property is DIP Collateral, and the proceeds will be used in accordance with the Interim DIP Order. The Closing costs will be split evenly between the parties. As a result of the Purchaser's interest in the Property, and its willingness to provide fair and reasonable consideration based on that interest, the Debtors believe that their estates and creditors will benefit from the approval of the Sale without the added delay, energy, and expenses associated with an auction process. Moreover, the Debtors' estates will benefit by closing the Sale as soon as possible to avoid the accrual of unnecessary administrative expenses and carrying costs on account of the Property. Finally, there is no guarantee that the Purchaser would hold the offer open during an auction process. To implement the foregoing immediately, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). A hearing on the Motion is set for Sept. 15, 2020 at 2:00 p.m. (ET). The Objection Deadline is Sept. 8, 2020 at 4:00 p.m. (ET). A copy of the Agreement is available at https://tinyurl.com/y3wownzc from PacerMonitor.com free of charge. About Permian Holdco Permian Holdco 1, Inc. and its affiliates are manufacturers of above-ground storage tanks and processing equipment for the oil and natural gas exploration and production industry. Permian Holdco 1, Inc. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-11822) on July 19, 2020. The petitions were signed by Chris Maier, CRO. The Hon. Mary F. Walrath presides over the cases. The Debtors have estimated assets of $0 to $50,000,000 and estimated liabilities of $0 to $50,000,000. M. Blake Cleary, Esq., Robert F. Poppiti, Jr., Esq., Joseph M. Mulvihill, Esq., and Jordan E. Sazant, Esq. of Young Conaway Stargatt & Taylor, LLP serve as counsel to the Debtors. Seaport Gordian Energy LLC serves as investment banker to the Debtors and Epiq Corporate Restructuring LLC acts as notice and claims agent. PERMIAN HOLDCO 1: Selling Permian Tank's El Reno Property for $510K ------------------------------------------------------------------- Permian Holdco 1, Inc., and affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize the private sale of Permian Tank & Manufacturing, Inc.'s real and personal property located at 2309 E Highway 66, El Reno, Oklahoma, along with certain improvements and fixtures, to Hung-Quoc Ngo and Hoa Thi Nguyen for $510,000, under the terms of their Oklahoma Uniform Contract of Sale of Real Estate, dated Aug. 6, 2020. The Property consists of: (i) one parcel located at 2309 E Highway 66, El Reno, OK 73036, including all buildings, structures, parking areas, and other improvements, which the Debtors have historically used for, among other things, manufacturing certain of their products; and (ii) certain fixtures and equipment, including cranes, as described in section 11 of the Purchase Agreement. The Property includes 8.55 acres of commercially zoned land fronting Highway 66, and includes six total buildings, including one office and five workshops. The Debtors' paramount goal in these Chapter 11 Cases is to maximize the value of their estates for the benefit of their creditors. Since they right-sized their operations prior to the Petition Date, the Property has been shut down for approximately 18 months. Prior to the Petition Date, the Debtors engaged RE/MAX Energy Real Estate to market and sell the Property in exchange for a 6% commission. On Jan. 31, 2020, the Debtors, through the Broker, listed the Property for sale. The Property has been marketed through certain commonly-used commercial real estate marketing channels, including, without limitation, commercial real estate websites and the Broker's website. The initial listing price for the Property was $795,000. Shortly after listing the Property, the Debtors received an offer with multiple contingencies for the listing price. However, after reviewing the offer, the Debtors determined that the contingencies, which included a closing date that was six months out, were unworkable, and that the potential purchaser was unlikely to close the proposed sale. They eventually received a second indication of interest, but a firm offer never materialized. The Debtors also received an all-cash offer of $205,000, which was rejected. On July 3, 2020, the Purchaser submitted an offer to purchase the Property for $400,000. The Debtors engaged in good-faith and arms'-length negotiations with the Purchaser, ultimately agreeing on the final purchase price of $510,000. On July 30, 2020, the Debtors received a pre-approval letter from the Purchaser. The Purchase Agreement was executed shortly thereafter, on Aug. 6, 2020, and is subject to Court approval. Pursuant to the terms and conditions of the Purchase Agreement, and subject to the Court's approval, the Debtors propose to sell to the Purchaser the Property, and except for the warranty of title in the Deed, the Property is being sold on an "as is, where is basis," free and clear of all liens, claims, encumbrances and other interests. The Purchaser has deposited $10,000 with Chicago Title, the title company. The Property is DIP Collateral, and the proceeds will be used in accordance with the Interim DIP Order. Each party will pay their own closing costs. The Debtors will be responsible for Closing Costs in the amount of $33,659, as set forth in the Purchase Agreement. The Seller will be solely liable for payment of the Commission due to the Broker, which is 6% of the Purchase Price. As a result of the Purchaser's interest in the Property, and its willingness to provide fair and reasonable consideration based on that interest, the Debtors believe that their estates and creditors will benefit from the approval of the Sale without the added delay, energy, and expenses associated with an auction process. Moreover, their estates will benefit by closing the Sale as soon as possible to avoid the accrual of unnecessary administrative expenses and carrying costs on account of the Property. Finally, there is no guarantee that the Purchaser would hold the offer open during an auction process. To implement the foregoing immediately, the Debtors ask that the Court waives the 14-day stay period under Bankruptcy Rule 6004(h). A hearing on the Motion is set for Sept. 15, 2020 at 2:00 p.m. (ET). The Objection Deadline is Sept. 8, 2020 at 4:00 p.m. (ET). A copy of the Agreement is available at https://tinyurl.com/y38kl6uo from PacerMonitor.com free of charge. About Permian Holdco Permian Holdco 1, Inc. and its affiliates are manufacturers of above-ground storage tanks and processing equipment for the oil and natural gas exploration and production industry. Permian Holdco 1, Inc. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-11822) on July 19, 2020. The petitions were signed by Chris Maier, chief restructuring officer. Hon. Mary F. Walrath presides over the cases. M. Blake Cleary, Esq., Robert F. Poppiti, Jr., Esq., Joseph M. Mulvihill, Esq., and Jordan E. Sazant, Esq. of Young Conaway Stargatt & Taylor, LLP serve as counsel to the Debtors. Seaport Gordian Energy LLC serves as investment banker to the Debtors and Epiq Corporate Restructuring LLC acts as notice and claims agent. PHX INVESTMENT: Must Pay Amos $883,000 for Fees and Damages ----------------------------------------------------------- Magistrate Judge William E. Cassady granted the Plaintiff's Motion for Summary Judgment Against PHX Investment Group, LLC in the case captioned AMOS FINANCIAL, LLC, as assignee of SYNOVUS BANK, a Georgia banking corporation, Plaintiff, v. PHX INVESTMENT GROUP LLC, an Alabama limited liability company, THE MOORE GROUP LLC, an Alabama limited liability company, G & M HOUSE, LLC, an Alabama limited liability company, and DEMETRIUS MOORE, an individual, Defendants, Civil Action No: 19-426-C (S.D. Ala.). Specifically, the Court entered judgment in favor of Amos, as assignee of Synovus Bank, and against the Defendant, PHX, for money damages in the amount of $872,600.93, plus attorney's fees of $9,400, and court costs of $1,369.27, for a total of $883,370.20. The Court previously entered summary judgment in favor of Amos and against all of the Defendants except for PHX. In its Summary Judgment Order, the Court entered judgment against Demetrius Moore for money damages in the amount of "$872,600.93 with respect to Mr. Moore's guaranty of the loans owed by PHX." Although the Court found that Mr. Moore was obligated to the Plaintiff for this amount vis-a-vis his guaranty of the loans owed by PHX, the Court did not enter summary judgment against PHX because that company was in Chapter 11 bankruptcy when the Plaintiff's Motion for Summary Judgment was filed and therefore, the Plaintiff's claims against PHX were stayed. But PHX's bankruptcy case has now been dismissed, and the Plaintiff has moved the Court to enter summary judgment and award money damages against PHX in the amount of $872,600.93, plus attorney's fees and court costs, which is the same amount that the Court already determined is owed by PHX in its Summary Judgment Order. The Plaintiff's request for entry of summary judgment against PHX is supported by the evidence and materials previously submitted by the Plaintiff in support of the Plaintiff's Motion for Summary Judgment against the other Defendants as well as the findings and conclusions of law made by the Court in its Summary Judgment Order; those findings of fact and conclusions of law are adopted by the Court. A copy of the Court's Order dated August 3, 2020 is available at https://bit.ly/31gVhku from Leagle.com. About PHX Investment Group PHX Investment Group, LLC, a real estate investment company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 19-14154) on Nov. 25, 2019. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Henry A. Callaway presided over the case. The Debtor tapped Barry A. Friedman, Esq., at Friedman, Poole & Friedman, P.C. as counsel. The chapter 11 case has already been dismissed. PIER 1 IMPORTS: Court Approves Liquidation Plan ----------------------------------------------- Daniel Gill, writing for Bloomberg Law, reports that home furnishing retailer Pier 1 Imports Inc. won bankruptcy court approval of its liquidation plan after the pandemic dashed its hopes of reorganizing. Administrative expense claims holders would recover more than 40% under the the plan, approved Thursday, July 30, 2020, by Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia. The company’s unsecured creditors won't receive any money for their claims. But the plan releases them from potential liability for about $80 million for preference actions—suits to recover money from particular creditors that was paid within 90 days before the bankruptcy filing—the unsecured creditors committee said in a July 29 statement. Pier 1's shareholders won't receive anything in the liquidation. The retailer filed Chapter 11 in February, but abandoned its plan to reorganize or sell as a going concern after Covid-19 shuttered its doors. The bankruptcy court in May allowed the company to conduct going-out-of-business sales and wind down its affairs. Pier 1 sold its distribution center in Texas earlier this month for $18 million after a bankruptcy auction. About Pier 1 Imports Founded with a single store in 1962, Pier 1 Imports, Inc. -- http://www.pier1.com/-- is a leading omni-channel retailer of unique home decor and accessories. Its products are available through approximately 930 Pier 1 stores in the U.S. and online at pier1.com. Pier 1 Imports and seven affiliates sought Chapter 11 protection (Bankr. E.D. Va. Lead Case No. 20-30805) on Feb. 17, 2020, to pursue a sale of the assets. Pier 1 Imports disclosed $426.6 million in assets and $258.3 million in debt as of Jan. 2, 2020. Judge Kevin R. Huennekens oversees the cases. A&G Realty Partners is assisting Pier 1 Imports with its previously announced store closures and lease modifications. Pier 1 Imports landlords are encouraged to contact A&G Realty Partners through its website, http://www.agrep.com/ Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP serve as legal advisors to Pier 1 Imports and its affiliated debtors in the U.S. and Canada, respectively. The Debtors tapped AlixPartners LLP as restructuring advisor; Guggenheim Securities, LLC as investment banker; and Epiq Bankruptcy Solutions as claims agent. PILOCH DISTRIBUTION: AGL et al.'s Funds in Chase and BA Suspended ----------------------------------------------------------------- The Supreme Court of Nassau granted Plaintiff AJ Equity Group, LLC's motion for an order granting a preliminary injunction restraining all funds: -- in any JPMorgan Chase Bank, N.A. account titled to Anagrama Group LLC, Los Jaliscienses, LLC, Sweetmex, LLC, Transparent Transport, L.L.C., Miguel Arturo Salido Gutierrez or Arizabeth Escalante, including the account ending in 9886, up to the amount of $584,114.63, or such other amount as the Court deems just, and -- in any Bank of America, N.A. account titled to Anagrama Group LLC, Los Jaliscienses, LLC, Sweetmex, LLC, Transparent Transport, L.L.C., Miguel Arturo Salido Gutierrez or Arizabeth Escalante, including the account ending in 4295, up to the amount of $584,114.63, or such other amount as the Court deems just, pending the resolution of a lawsuit and until further Court order. The Plaintiff requested that the action be severed against Piloch Distribution, Inc., which filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Nevada. In support of the motion, counsel for the plaintiff submitted the Affidavit of Miter Sussman, President of the plaintiff corporation. Sussman asserted, in pertinent part that, "[t]his is an action for breach of contract. . . . AJ Equity and [defendants Piloch Distribution, Inc., Anagrama Group LLC, Los Jaliscienses, LLC, Sweetmex, LLC, Transparent Transport, L.L.C. ("Merchants")] entered into a written agreement dated May 26, 2020. Under the Agreement, the Merchants sold AJ Equity $524,650 of its future receipts ('Purchased Amount') for an upfront sum of $35,900 ('Purchase Price')." Defendants Gutierrez and Escalante guaranteed the obligation of Merchants under the Agreement. AJ Equity paid Merchants the Purchase Price, less contractual fees, on May 27, 2020. Under the Agreement, the Merchants agreed to pay the Purchased Amount by permitting AJ Equity to ACH debit $6,245.83 from their bank account every day as an approximation of 15% of Merchants' receipts, subject to reconciliation. Under the Agreement, the Merchants granted AJ Equity a security interest in their future receivables, among other property, which security interest AJ Equity perfected by filing a UCC financing statement with the Nevada Secretary of State on June 16, 2020. In Section 2.1 of the Agreement, the Merchants warranted that the bank statements they furnished to AJ Equity in connection with their application for funding fairly represented their financial condition at that time, that there was no material adverse change in conditions, and that they have a continuing affirmative obligation to notify AJ Equity of any material adverse change in its financial condition. In connection with their application for funding, Merchants provided AJ Equity with of their bank statements going back as far as January of 2019. The bank statements AJ Equity was provided with demonstrated that Merchant's (sic) receipts were consistently in excess of $1.3 million per month, thereby Justifying the amount of the estimated payment set forth in the Agreement. The Merchants defaulted under the Agreement by preventing AJ Equity from collecting the Purchased Amount and by otherwise breaching its Warranties and covenants to AJ Equity under the Agreement. Specifically, after making just 10 daily payments, starting on June, 13, 2020, the Merchants began directing their bank to reject each ACH payment that AJ Equity attempted to debit from Merchants' bank account. The Merchants did not request any reconciliation of the payments made under the Agreement. The defendants have ignored the attempts of AJ Equity to resolve this matter. It is evident that the business of Merchants is failing. If the bank account of Merchants is not restrained immediately, there will be no assets left to satisfy a final judgment. The final judgment to which AJ Equity may be entitled will be rendered ineffectual without the interim relief requested herein. AJ Equity anticipates that it will obtain a final judgment for at least $584,114.63, consisting of $467,291.70 in damages and $116,822.93 in legal fees. Merchants have a bank account with JPMorgan Chase Bank, N.A. ending in 9886. Merchants have a bank account with Bank of America, N.A. ending in 4295." Counsel for the plaintiff submitted in pertinent part, that, "[h]ere, a preliminary injunction should be granted. The Plaintiff is likely to succeed on the merits because it has a clear cut contract against the Defendants. The Plaintiff will suffer irreparable harm if provisional relief is withheld because Defendants will hide the Plaintiff's money, and any final judgment favoring the Plaintiff will be rendered ineffectual. A balancing of the equities clearly tips in Plaintiff's favor because Defendants haven right to the money they stole from the Plaintiff. For the same reasons, a temporary restraining Order should also be granted." According to the Court, "to obtain a preliminary injunction, a movant must demonstrate, by clear and convincing evidence, (1) a likelihood of success On the Merits; (2) irreparable injury absent a preliminary injunction; and (3) a balancing of the equities in the movant's favor," as set forth in Greystone Staffing, Inc. v. Warner, 106 A.D.3d 954, 965 N.Y.S.2d 599 (2d Dept. 2013) quoting Yedlin v. Lieberman, 102 A.D.3d 769, 961 N.Y.S.2d 186 (2d Dept. 2013). The Court adds that "to sustain its burden of demonstrating a likelihood of success on the merits, the movant must demonstrate a clear right to relief which is plain from the undisputed facts." To sustain their burden Of establishing irreparable harm, "the plaintiff is required to show that the irreparable injury to be sustained is more burdensome to him than the harm that would. be caused by the defendant through the imposition of the injunction." Finally, the plaintiff must demonstrate that the balancing of equities favors provisional relief. The Plaintiff must show that "the absence of a preliminary injunction would cause it greater injury than the imposition of the injunction would inflict upon the defendant. Based upon the papers and arguments presented before the Court, the Court held that the plaintiff has met its burden in order to obtain the requested preliminary injunction. The case is in re: AJ EQUITY GROUP LLC, Plaintiff, v. PILOCH DISTRIBUTION, INC., ANAGRAMA GROUP LLC, LOS JALISCIENSES, LLC, SWEETMEX, LLC; TRANSPARENT TRANSPORT, L.L.C. MIGUEL ARTURO SALIDO GUTIERREZ and ARIZABETH ESCALANTE, Defendants, Docket No. 605907/2020, Motion Seq. No. 01 (N.Y. Sup.). A copy of the Court's Order dated August 19, 2020 is available at https://bit.ly/32B2Jrf from Leagle.com. About Piloch Distribution Piloch Distribution, Inc. -- http://www.piloch.com-- distributes food and related products on a wholesale basis to retailers. Piloch Distribution filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 20-13047) on June 25, 2020. Piloch Distribution President Miguel Salido signed the petition. At the time of the filing, the Debtor disclosed total assets of $2,332,683 and total liabilities of $2,345,430. Judge August B. Landis oversees the case. David J. Winterton & Associates, Ltd. is the Debtor's legal counsel. PM GENERAL PURCHASER: S&P Assigns 'B+' ICR; Outlook Stable ---------------------------------------------------------- S&P Global Ratings assigned its 'B+' issuer credit rating to PM General Purchaser LLC (which does business as AM General) General. The outlook is stable. At the same time, S&P assigned its 'B+' issue-level and '3' recovery ratings to the company's proposed $600 million senior secured notes. "The stable outlook reflects our expectation that debt to EBITDA will decline to 4x-4.5x in 2021, due to the absence of transaction-related fees and expenses that will occur in 2020," S&P said. S&P's rating on AM General reflects its small size, very limited product, program, and customer diversity, combined with moderate leverage, solid profitability, and financial sponsor ownership. The rating agency expects pro forma debt to EBITDA to be about 10x in 2020 after accounting for transaction fees, declining to 4x-4.5x in 2021 due to the lack of those costs from the acquisition. Although leverage may improve further as earnings increase, S&P does not expect debt to EBITDA to decline below 4x for a sustained period as the company's financial sponsor will likely pursue acquisitions or possibly dividends if leverage gets that low. KPS Capital Partners L.P. plans to acquire AM General, funded with a combination of debt and equity, resulting in adjusted debt to EBITDA of about 10x after accounting for transaction-related fees and expenses. AM General provides engineering, manufacturing, assembly, and global aftermarket support for ground vehicle systems and solutions. KPS will finance the acquisition of AM General with a combination of equity and proceeds from its proposed $600 million senior secured notes. The capital structure also includes a new $75 million priority revolver to provide liquidity, which S&P expects to remain undrawn in the near term. "The stable outlook on AM General reflects our expectation that the company's pro forma debt leverage will be about 10x in 2020 after accounting for transaction-related fees and expenses, but will decrease to 4x-4.5x in 2021," S&P said. "While we expect credit ratios to improve as earnings increase due to growth in revenues, we believe the financial sponsor will likely pursue acquisitions and possibly dividends if leverage declines significantly," the rating agency said. S&P could lower the rating on AM General if debt to EBITDA increases above 5x for a sustained period. This could be caused by: -- Revenue decline due to a decrease in demand for the Humvee; -- EBITDA margins decline due to an increase in overhead costs or cost overruns on a contract; or -- The sponsor engages in aggressive financial policy in the form of large, debt-financed acquisitions or dividends. Although unlikely due to current sponsor ownership, S&P could raise the rating on AM General if: -- The company materially increased its scale and product diversification, likely through acquisitions, while maintaining current margins; and -- Debt to EBITDA remains below 5x. PROFESSIONAL FINANCIAL: Hires Donlin Recano as Claims Agent ----------------------------------------------------------- Professional Financial Investors, Inc. and Professional Investors Security Fund, Inc. received approval from the U.S. Bankruptcy Court for the Northern District of California to employ Donlin, Recano & Company, Inc. as claims, noticing and solicitation agent. The firm will oversee the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in Debtor's Chapter 11 case. The firm's hourly rates for professional services are as follows: Executive Management No charge Senior Bankruptcy Consultant $140 - $160 Case Manager $60 - $140 Technology/Programming Consultant $60 - $70 Consultant/Analyst $70 - $90 Clerical $35 The retainer fee is $10,000. Nellwyn Voorhies, executive director of Donlin, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Nellwyn Voorhies Donlin, Recano & Company, Inc. 6201 15th Avenue, Brooklyn, NY 11219 Phone: 212-481-1411 About Professional Financial Investors Professional Financial Investors, Inc. and Professional Investors Security Fund, Inc. are both engaged in activities related to real estate. On July 16, 2020, a group of creditors filed an involuntary Chapter 11 petition (Bankr. N.D. Cal. Case No. 20-30579) against Professional Investors. On July 26, 2020, Professional Financial sought Chapter 11 protection (Bankr. N.D. Cal. Case No. 20-30604). The cases are jointly administered under Case No. 20-30604. At the time of the filing, Professional Financial disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Dennis Montali oversees the cases. Debtors have tapped Sheppard, Mullin, Richter & Hampton, LLP as their bankruptcy counsel and Trodella & Lapping, LLP as their conflicts counsel. Ragghianti Freitas LLP, Weinstein & Numbers LLP, Nardell Chitsaz & Associates, and Wilson, Elser, Moskowitz, Edelman & Dicker LLP serve as special counsel. Michael Hogan of Armanino LLP was appointed as Debtors' chief restructuring officer. PURDUE PHARMA: Order Enjoining Entities to File Suits Upheld ------------------------------------------------------------ In the appeals case captioned BRYAN C. DUNAWAY., et al., Appellants, v. PURDUE PHARMACEUTICALS L.P., et al. Appellees, 19 Civ. 10941 (CM), 20 Civ. 03048 (CM), 19-08289 (RDD) (S.D.N.Y.), Chief District Judge Colleen McMahon affirmed the Bankruptcy Court's decision granting Debtors Purdue Pharmaceuticals L.P and affiliates' motion for an order enjoining all of governmental and private plaintiffs from continuing or commencing any judicial, administrative, or investigative actions, as well as any other enforcement proceeding, against the Debtors or the non-debtor Related Parties ("Preliminary Injunction"). Purdue Pharmaceutical, L.P. and certain of its affiliated entities and debtors filed for bankruptcy on Sept. 15, 2019. At the time, the Debtors were facing over 2,600 governmental enforcement actions and private lawsuits in state and federal courts, each of which alleged that Purdue's manufacture, promotion, and sale of prescription painkillers contributed to the ongoing opioid crisis that has killed hundreds of thousands and left millions more struggling with addiction. The federal actions against the Debtors are consolidated into a single multi-district litigation, while the state actions remain scattered across the country. There are also ongoing investigations by both law enforcement and regulatory agencies that have yet to culminate into either civil or criminal actions, but may in the near future. The bankruptcy was designed to consolidate all of these proceedings against the Debtors, as well as the claims against certain non-debtors, including Purdue's former or current owners, directors, officers, and other associated entities (the "Related Parties"), so that the parties could work towards a global settlement in a single forum. The District Court appeal arose from the adversary proceeding Purdue Pharma, L.P., et al. v. Commonwealth of Massachusetts, et al., Adv. Pro. No. 19-08289, which the Debtors filed in the Bankruptcy Court in order to temporarily halt the Pending Actions against them and the Related Parties. The Debtors argued that the injunction was necessary to allow Purdue's management and other stakeholders to focus on developing a confirmable plan of reorganization that would include a reasonable settlement for all of the parties to the Pending Actions. On Nov. 6, 2019, Bankruptcy Judge Robert Drain granted the Debtors' motion for Preliminary Injunction. The Appellants are five district attorneys from the state of Tennessee, and Baby Doe, an infant born dependent on opioids, each of whom is a plaintiff in the lawsuit Dunaway, et al. v. Purdue Pharma L.P., No. CC1-2018-cv-6347 (the "Dunaway Action"), which is currently stayed in the Circuit Court of Cumberland County, Tennessee, as a result of the Preliminary Injunction. The Dunaway Action sought damages under the Tennessee Drug Dealer Liability Act, Tenn. Code Ann. Sec. 29-38-101, et seq. (the "TDDLA") from, inter alia, Purdue and Purdue's former president and co-chairman, non-debtor Dr. Richard Sackler, whose family has controlled a majority of the company's stock for generations. The Appellants asked the District Court to vacate the injunction as to their claims solely against Dr. Sackler in the Dunaway Action, on the grounds that (1) the Bankruptcy Court lacks subject matter jurisdiction over a government enforcement action between state officials and a third party non-debtor, and, (2) even if the court did enjoy such authority, the record evidence before Judge Drain was insufficient to warrant granting Debtors' motion for a preliminary injunction. As a matter of equity, the Appellants implored the District Court to reverse the unprecedented protections that have been afforded to the Related Parties in the form of injunctive relief, claiming that the bankruptcy court has effectively extended immunity to individuals responsible for a nationwide crisis of addiction and death. The Appellants argued that: -- the Bankruptcy Court applied an overly expansive version of the "conceivable effects" test to find that the Dunaway Action claims against non-debtors were "related to" the bankruptcy; -- there was insufficient evidence as of the date of the Preliminary Injunction for the Bankruptcy Court to find that the claims in the Dunaway Action against Dr. Sackler were either "related to" or "arising in" the bankruptcy; -- the Debtors failed to satisfy their burden to establish the need for a preliminary injunction of the Related Party actions, including the Dunaway Action, under Federal Rule of Civil Procedure 65 and Federal Rule of Bankruptcy Procedure 7065; and -- the Bankruptcy Court's decision to enjoin governmental actors exercising their police powers against non-debtors was inappropriate in light of the fact that such actions are excluded from the automatic stay provisions of the Bankruptcy Code set out in 11 U.S.C. section 362(b)(4). In response to the Appellants' jurisdictional arguments, the Debtors argued that the Bankruptcy Court correctly held that jurisdiction was proper under 28 U.S.C. section 1334, because all of the facts underlying the Dunaway Action necessarily implicated the Debtors (on whose behalf Dr. Sackler was alleged acting), such that a finding of liability against Dr. Sackler would inevitably give rise to indemnification and contribution claims against the Debtors' estate. As for the preliminary injunction, the Debtors contended that Judge Drain did not abuse his discretion by concluding that continued proceedings against Dr. Sackler and other non-debtors could seriously threaten the global settlement, an essential ingredient to any confirmable reorganization plan. Finally, the Debtors argued that the fact that governmental actors exercising police powers are exempt from the automatic stay provision is irrelevant, because the injunction, in this case, imposes a discretionary stay that does not rely for its force on the automatic stay. According to Judge McMahon, Second Circuit precedent holds that "section 105(a) is properly used to enjoin creditors' lawsuits against third parties where 'the injunction plays an important part in the debtor's reorganization plan' or where the action to be enjoined `will have an immediate adverse economic consequence for the debtor's estate.'" Courts decide those questions by "appl[ying] the traditional preliminary injunction standard as modified to fit the bankruptcy context." Although the Second Circuit has never explicitly established the standard for reviewing a preliminary injunction issued under Section 105 of the Bankruptcy Code, various courts have resolved the issue by evaluating four factors: (1) whether there is a likelihood of successful reorganization; (2), whether there is an imminent irreparable harm to the estate in the absence of an injunction, although a limited exception permits an injunction to issue "whether the action to be enjoined is one that threatens the reorganization process," if the threat is not imminent; (3) the balance of "the comparative harm[s] to the debtor, and to [the] debtor's reorganization, against that to the would-be-enjoined party should an injunction be issued;" and (4) whether the public interest weighs in favor of an injunction. On the first factor, the Appellants argued that the Debtors cannot establish the likelihood of a successful reorganization based on the Settlement Structure, because "hundreds, if not thousands, of government entities oppose any plan that would protect or immunize Dr. Sacker without extensive financial due diligence," and their objections are "likely more than enough to block any plan." According to Judge McMahon, the Appellants cannot say that a reorganization is unlikely simply because they intend to object to the plan as presently constituted. Nor can they presume that Dr. Sackler will not ultimately be required to make "extensive" disclosure of his personal assets prior to a plan's confirmation. Furthermore, the record tends to show that Dr. Sackler will not obtain a full release being required to make substantial disclosures. Judge Drain has made clear that he shares the Appellants' view that the Related Parties, including Dr. Sackler, will have to make financial disclosures in order to obtain releases from individual liability. At the first injunction hearing, he emphasized that the likelihood of successful reorganization depended upon the objectors' "ability to perform due diligence," and encouraged the Debtors to continue "to engage in meaningful discussions with representatives of the key objecting parties. . . [to reach] a reasonable information sharing and milestone protocol." Judge McMahon also said that analysis of irreparable harm, or threat to reorganization, favors upholding the Preliminary Injunction. Appellants offered no reason why their lawsuit should be treated differently from every other lawsuit that is subject to the injunction. Judge McMahon stated that he had every reason to believe that lifting the stay would soon engulf the Debtors' and the Bankruptcy Court in appeals challenging the injunction's application to similar claims against Dr. Sackler or his family members in other fora. The Court also stated that Judge Drain's injunction does not destroy Appellants' interest in transparency. It does not immunize Dr. Sackler against personal liability and it does not protect him from having to disclose details about his personal wealth. Whether Dr. Sackler gets the protection that Appellants fear (and oppose) will be decided in the context of other motions in this bankruptcy. And there is no timetable for addressing them, as Judge Drain remains "far from approving any sort of permanent injunction and release with respect to third 22 parties in this case." The balance of the hardships and the public interest favor leaving the injunction in place. A copy of the Court's Order dated August 11, 2020 is available at https://bit.ly/3blfGbi from Leagle.com. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation facing the Company. The Company's consolidated balance sheet at Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has been assigned to oversee Purdue's Chapter 11 case. Davis Polk & Wardwell LLP and Dechert LLP are serving as legal counsel to Purdue. PJT Partners is serving as investment banker, and AlixPartners is serving as financial advisor. Prime Clerk LLC is the claims agent. QORVO INC: Moody's Rates New Sr. Unsecured Notes Due 2031 'Ba1' --------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Qorvo, Inc's new Senior Notes due 2031. The Ba1 Corporate Family Rating ("CFR") and stable outlook are unchanged. Qorvo plans to use the net proceeds of the New Notes plus existing cash balances and a draw on the bank credit facility to redeem Qorvo's $900 million of Senior Notes due 2026 ("2026 Notes"). Proforma for the $700 million issuance of New Notes, adjusted debt to EBITDA will decline to about 1.9x from 2.0x for the latest twelve months ended June 27, 2020. Assignments: Issuer: Qorvo, Inc. Senior Unsecured Notes, Assigned Ba1, LGD4 RATINGS RATIONALE Overall, Qorvo has only experienced modest impact from the slowdown in global economic activity and the coronavirus pandemic, with total revenues increasing 1.5% year over year in the June quarter. The negative impacts have been felt in the Mobile Products (MP) segment due to the decline in end market demand for smartphones, with revenues declining 16% year over year in the June quarter. Still, Moody's expects that Qorvo's content gains of more than 20% in Fifth Generation Cellular Telephony ("5G") smartphones will offset overall smartphone unit sales declines in calendar 2020, driving revenue growth in the MP segment over the near term. The Infrastructure and Defense Products (IDP) segment has experienced strong demand with revenues increasing 45% year over year in the June quarter. Upgrades to telecommunications infrastructure to support 5G telecommunications has been a source of revenue growth for the IDP segment and Moody's expects that this will continue as 5G network construction increases outside of Asia, driving revenue growth for the remainder of calendar year 2020 and into 2021. The Ba1 CFR reflects Qorvo's modest leverage, which Moody's expects to remain at or below the low 2x adjusted debt to EBITDA level during 2020 and below 1.5x over time. Qorvo benefits from its strong niche position in the smartphone radio frequency ("RF") filter market and a portfolio of infrastructure and defense products, which tend to have longer product life cycles. RF filter providers are enjoying strong secular growth from rapidly increasing RF content per phone, which has offset flat or declining smartphone unit sales. Still, the modest leverage and good liquidity are needed to balance the large revenue concentrations, as Qorvo's top two customers comprise over 40% of revenues, and the very short product life cycles characteristic of the smartphone industry. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Given Qorvo's exposure to the semiconductor supply chain, the company remains vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. Qorvo's credit profile is supported by governance considerations, specifically the company's conservative financial policy, with adjusted debt of less than 2x debt to EBITDA (latest twelve months ended June 27, 2020, proforma for the New Notes and redemption of the 2026 Notes). Qorvo's good liquidity, including cash of $1.1 billion as of June 27, 2020 (over $900 million proforma for the redemption of the 2026 Notes), and strong free cash flow generation, should provide a reasonable degree of financial flexibility to fund share buybacks and tuck in acquisitions. Qorvo is a public company with a broad investor base and an independent board of directors. The stable outlook reflects Moody's expectation that revenues will grow in the low to mid-single digits percent over the near-term reflecting content gains in 5G smartphones and infrastructure spending to upgrade telecommunications networks to support 5G. Given the increased revenues and tight control of expenses, Moody's expects that the EBITDA margin (Moody's adjusted) will improve modestly. Although Moody's does not expect material debt repayment over the near term, Moody's expects that the adjusted debt to EBITDA will decline towards 1.5x over the next 12 to 18 months due to the increasing EBITDA. Moody's also expects that Qorvo will maintain a conservative financial policy during this period of economic uncertainty, refraining from shareholder friendly actions over the near term. Qorvo's SGL-2 rating indicates good liquidity supported by cash, which Moody's expects to be maintained in excess of $500 million, and FCF, which Moody's projects to be over $450 million over the next year. These internal sources of liquidity are supplemented by an undrawn $300 million unsecured revolving credit facility maturing in December 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Qorvo substantially reduces the revenue concentration with its top two customers. Moody's would expect that Qorvo would also be generating organic revenue growth in excess of the industry, and maintaining a conservative leverage profile, with debt to EBITDA (Moody's adjusted) maintained below 1.5x. The ratings could be downgraded if Moody's expects a sustained slowdown in revenue growth or if the EBITDA margin falls below the low 20s percent level (Moody's adjusted) for an extended period of time. The rating could also be pressured if profitability pressure or a material increase in debt levels lead to debt to EBITDA (Moody's adjusted) sustained above 2.5x. Qorvo, Inc., based in Greensboro, North Carolina, produces radio frequency ("RF") filters and modules used in smartphones and other RF products for a variety of end markets including cellular telephony base stations, military and commercial radar, and WiFi networks. The principal methodology used in these ratings was Semiconductor Industry published in July 2018. QORVO INC: S&P Rates New $700MM Senior Unsecured Notes 'BB+' ------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' issue-level rating and '3' recovery rating to Greensboro, N.C.-based semiconductor manufacturer Qorvo Inc.'s new $700 million senior unsecured notes. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default. The company will use the proceeds from this issuance to redeem its existing 5.5% notes due 2026. S&P's 'BB+' issuer credit rating and stable outlook on Qorvo remain unchanged. Its ratings on the company reflect its high customer concentration and significant exposure to the wireless handset marketplace. These factors are offset by Qorvo's low financial leverage and the significant secular growth trends stemming from the increasing consumption of wireless data. The stable outlook reflects S&P's expectation that the firm's strong market position in radio frequency (RF) analog semiconductor devices--along with the growth in mobile data traffic and the increasing level of RF content in flagship smartphones--will enable it to expand at a faster pace than the broader analog semiconductor industry. "We forecast that this will enable Qorvo to sustain S&P Global Ratings-adjusted net leverage at or modestly above 1x despite the near-term macroeconomic weakness," the rating agency said. QUALITY REIMBURSEMENT: Gancman & Eastpoint Object to Disclosure --------------------------------------------------------------- Alvaro Gancman ("Gancman") and Eastpoint Corporation ("Eastpoint" and, with Gancman, "GE") object to the Third Amended Disclosure Statement [the "TADS"] accompanying Second Amended Chapter 11 Plan Of Reorganization [the "SAP"] filed by debtor Quality Reimbursement Services, Inc. GE claims that the TADS does not provide adequate, or in certain instances any, information regarding the basis for the Other Secured Claims, when the Other Secured Claims were incurred and why, the contractual terms for payment of the Other Secured Claims, the contractual interest rates for the Other Secured Claims, the Collateral securing the Other Secured Claims and the value thereof. GE points out that the TADS, however, fails to discuss why, assuming the Court permits the Debtor to separately classify the GE Claims and permit disparate treatment of such claims, all of the foregoing $2.254 million in Claims cannot be paid on the Effective Date from the approximately $3.345 million in cash that should be on hand, or why the Debtor would not do so to avoid accruing interest on unpaid amounts. GE asserts that the TADS (and TAP) must also be amended to provide oversight to whomever is analyzing and pursuing Causes of Action, because, at present, the TADS allows the Reorganized Debtor or the Committee, as applicable, to “file, litigate, prosecute, settle, adjust, retain, enforce, collect and abandon Causes of Action” without any oversight, including by GE, which is by far the largest creditor in the Case. GE further asserts that there is confusion as to the difference between the book values and liquidation values for assets included in the Liquidation Analysis. It is unclear why there is such a large disparity between the book values and liquidation values. The TADS needs to be amended to make this clear. GE states that the TADS and TAP provide for broad third-party exculpations and releases extending to Mr. Ravindran. The TADS needs to be amended to describe why the third-party exculpations and releases are necessary and what consideration Mr. Ravindran is paying to the estate for them. A full-text copy of GE's objection to third amended disclosure statement dated July 31, 2020, is available at https://tinyurl.com/yxnufyzp from PacerMonitor.com at no charge. Attorneys for Alvaro Gancman and Eastpoint: DAVID L. NEALE TODD M. ARNOLD LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234 Facsimile: (310) 229-1244 E-mail: DLN@LNBYB.COM TMA@LNBYB.COM About Quality Reimbursement Services Quality Reimbursement Services, Inc. --http://www.qualityreimbursement.com/-- has been reviewing Medicare and Medicaid cost reports for more than 12 years. Its corporate office is located in Arcadia (CA). The company also has offices located in Birmingham, Ala.; Scottsdale, Ariz.; Los Angeles, Calif.; Colorado Springs, Colo.; Jacksonville, Fla.; Chicago, Ill.; Detroit and Shelby Township, Mich.; Guttenberg, N.J.; Dallas/Fort Worth, Texas; and Spokane, Wash. Quality Reimbursement Services filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-20918) on Sept. 13, 2019. In the petition signed by James C. Ravindran, president and CEO, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Julia W. Brand oversees the case. Garrick A. Hollander, Esq., at Winthrop Couchot Golubow Hollander, LLP, represents the Debtor. The Office of the U.S. Trustee appointed a committee of unsecured creditors in the Debtor's case on Oct. 22, 2019. The committee retained Buchalter, a Professional Corporation, as its legal counsel. QUEST GROUP: Unsecured Creditors to Recover 5% Over 3 Years in Plan ------------------------------------------------------------------- Quest Group Holdings LLC filed the Second Amended Disclosure Statement dated July 31, 2020, that says claims will be treated under the Plan as follows: * Class 2 Secured claim of Venetian Isles Master Association, Inc's. The Debtor will pay the claim in full pursuant to an agreement negotiated between the parties. * Class 3 Partially secured holder of lien on real property located at 2962 NW 46 Street, Miami, Florida 33142-4426. The debtor is attempting to resolve this creditor's claim directly this creditor outside of this case and will not otherwise affect this debtor other creditor's as there will be not distribution. * Class 4 General unsecured claims. The claims will receive a pro rata distribution of 5 percent of allowed claims over three years. The effective date of the plan will occur 30 days after the date of confirmation of the Debtor's Plan of Reorganization. The creditors in this class are impaired. The estimated amount of claims or not objected to creditors is estimated to be approximately than $750,000. A full-text copy of the Second Amended Disclosure Statement dated July 31, 2020, is available at https://tinyurl.com/y6zbovca from PacerMonitor.com at no charge. Attorney for the Debtor: Richard Siegmeister, Esquire 3850 Bird Road, Floor 10 Miami, Florida 33146 Telephone: 305 859-7376 E-mail: rspa111@att.net rspalaw@att.net About Quest Group Holding Quest Group Holding, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-21776) on Sept. 25, 2018. In the petition signed by Eddrian Burciaga, owner, the Debtor estimated assets of less than $1 million and liabilities of $1 million to $10 million. Judge Jay A. Cristol presides over the case. The Debtor tapped Marrero, Chamizo, Marcer, Law, LP as its legal counsel. RACKSPACE TECHNOLOGY: S&P Alters Outlook to Positive, Affirms B ICR ------------------------------------------------------------------- S&P Global Ratings revised its rating outlook on U.S. information technology (IT) service provider Rackspace Technology Global Inc. to positive from stable and affirmed its 'B' issuer credit rating on the company. In addition, S&P affirmed its 'B+' issue-level rating on the company's senior secured debt. The recovery rating is '2'. The rating agency also affirmed the 'B-' issue-level rating on the company's senior unsecured debt. The recovery rating is '5'. "The positive outlook reflects our view that the company will experience good revenue growth over the next year, driven by strong performance in its multicloud services segment. Through cost-saving measures, we expect EBITDA margins to remain somewhat resilient despite gross margin pressures as the company expands its lower margin public cloud services business," S&P said. Rackspace Technology used a large portion of its IPO proceeds toward debt reduction and has a financial policy that is conducive to further de-leveraging. In August 2020, Rackspace Technology completed its IPO and used $514 million of the $658 million in proceeds to pay down debt. As a result, pro forma leverage improved to 5.7x from 6.4x (S&P's leverage calculations differ from management's since the rating agency includes finance and operating leases in debt, do not net cash, and expense one-time transformation costs). Management has indicated its financial policy is to continue de-leveraging the business by about a turn from the current pro forma level. S&P expects much of this de-leveraging will come from continued earnings growth and possibly further debt reduction from free cash flow. If continued good growth momentum persists (as has been the case with the first two quarters of 2020) with no material debt-funded activity for acquisitions or dividends, S&P believes its leverage calculations could display a credible path for de-leveraging to under 5x (which is the rating agency's upside leverage trigger). S&P also expects cash flow to continue to improve longer term as Rackspace Technology's business becomes less capital intensive than it was previously; its less capital intensive services businesses continue to grow while its more capital intensive legacy businesses (such as OpenStack) are expected to continue declining. Cash flow will also benefit from lower interest payments. S&P estimates that the debt reduction from the IPO proceeds saves Rackspace Technology about $40 million annually. Rackspace Technology 's multicloud services segment's growth has been good so far in 2020; sustained momentum of growth could lead to an upgrade. Rackspace Technology's multicloud services segment represents about three-fourths of its annual revenue and has been growing in the low-teen percentage area over the first two quarters of 2020 (mid- to high-single-digit percentage area on an organic basis). This represents a sharp improvement over the 1.6% growth in 2019. "We believe the recent revenue growth is tied to the trend of more companies migrating workloads into cloud environments and our opinion that there has been less churn in Rackspace Technology's legacy managed hosting business," S&P said. Rackspace Technology's private cloud solutions are ideal for customers who are very sensitive to data privacy or run legacy applications and want to shift away from legacy hosting technologies toward cloud. Rackspace Technology's public cloud services solutions work well with businesses that do not have the in-house IT resources to manage the complexity of multiple cloud environments, both from a technological and financial standpoint. Most of Rackspace Technology's customer base are small and midmarket businesses that likely outsource many of their IT needs and that might require assistance from companies such as Rackspace Technology in managing their IT resources under new cloud environments. Before 2020, revenue growth in multicloud services was minimal--S&P attributes a large portion of this to churn in Rackspace Technology's legacy managed hosting business. While the legacy managed hosting business has declined over the past few years, S&P cannot be certain that churn has stabilized yet. S&P expects many companies to put large IT migrations on hold during the COVID-19 pandemic and expect a resumption of migrations once the pandemic ends. The rating agency notes that if growth in Rackspace Technology's business slows down, de-leveraging could be more limited. Execution risks remain until transformation programs are complete and churn in managed hosting and OpenStack subsides. Rackspace Technology could face EBITDA margin pressures as lower-margin businesses continue to grow (such as public cloud services--part of the multicloud services segment) and as higher-margin businesses (such as managed hosting and OpenStack) decline. Management has embarked on a series of transformation activities to manage the cost base such that EBITDA margins remain resilient despite gross margin pressures. For the first six months of 2020, reported gross margins declined to 37.5% from 41.6% in the previous year. However EBITDA margins have remained fairly stable, in the high 20% area on an S&P Global Ratings-adjusted basis. Despite S&P's view that pressure on margins will continue, it expects cash flow to remain robust as capital intensity reduces as the business shifts more toward public cloud services. Management has guided to capital expenditures (capex) as a percentage of sales to be in the high-single-digit percentage area. The positive outlook reflects Rackspace Technology's improved credit metrics after its IPO and subsequent debt paydown, with leverage and other metrics approaching S&P's upside threshold. S&P expects that Rackspace Technology will display modest revenue growth over the next few years, as churn in legacy segments is offset by growth in multicloud services and its applications businesses. Through cost-saving actions, the rating agency expects management to hold S&P-adjusted EBITDA margins in at least the mid-20% area despite some natural margin pressures through the shift in business mix toward services. S&P forecasts leverage to approach 5x and free operating cash flow (FOCF) as a percentage of debt in the mid-single-digit area over the next 12 months. "We could raise the rating if the company continues to perform well--with strong bookings momentum leading to revenue growth, one-time cost reductions, and reduced customer churn. Leverage continuing to trend toward 5x and FOCF to debt maintained above 6% could lead to an upgrade," S&P said. "We could revise the outlook to stable over the next year if we do not expect leverage to trend below 5x or if we expected FOCF to debt to remain under 5%. This could be the result of revenue growth slowing down to the low-single-digit percentage area or with elevated customer churn. We could also revise the outlook to stable if the company issues additional debt to fund significant acquisitions or shareholder returns," the rating agency said. RAINBOW LAND: Gets Court Approval to Hire Feasibility Expert ------------------------------------------------------------ Rainbow Land & Cattle Company, LLC received approval from the U.S. Bankruptcy Court for the District of Nevada to employ feasibility expert Arthur Hill of Argo Resources. Debtor needs the services of a feasibility expert to render an opinion on the feasibility of the development of the RV Resort proposed in its Chapter 11 plan of reorganization. Mr. Hill will be paid from Debtor's estate as an administrative expense. In court filings, Mr. Hill disclosed that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hill can be reached at: Arthur J. Hill Argo Resources 2514 SW Marshall Ave. Pendleton, OR 97801 Telephone: (541) 379-0279 Email: ahill@argoresources.com About Rainbow Land & Cattle Company Rainbow Land & Cattle Company, LLC, a privately held company engaged in activities related to real estate, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 19-50627) on May 30, 2019. Debtor previously sought bankruptcy protection (Bankr. D. Nev. Case No. 12-14009) on April 4, 2012. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Bruce T. Beesley oversees the case. Holly E. Estes, Esq., at Estes Law, P.C., serves as Debtor's legal counsel. Debtor has also tapped interest rate expert Timothy W. Nelson of Evans, Nelson & Company, CPAS and feasibility expert Arthur J. Hill of Argo Resources. RAINBOW LAND: Gets Court Approval to Hire Interest Rate Expert -------------------------------------------------------------- Rainbow Land & Cattle Company, LLC received approval from the U.S. Bankruptcy Court for the District of Nevada to employ interest rate expert Timothy Nelson of Evans, Nelson & Company, CPAS. Debtor needs the services of an interest rate expert to render an opinion on the feasibility of, and the appropriate interest rates proposed in its Chapter 11 plan of reorganization. Mr. Nelson will be paid from Debtor's estate as an administrative expense. In court filings, Mr. Nelson disclosed that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Nelson can be reached at: Timothy W. Nelson Evans, Nelson & Company, CPAS 50 Continental Drive Reno, NV 89509 Telephone: (775) 825-6008 About Rainbow Land & Cattle Company Rainbow Land & Cattle Company, LLC, a privately held company engaged in activities related to real estate, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 19-50627) on May 30, 2019. Debtor previously sought bankruptcy protection (Bankr. D. Nev. Case No. 12-14009) on April 4, 2012. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Bruce T. Beesley oversees the case. Holly E. Estes, Esq., at Estes Law, P.C., serves as Debtor's legal counsel. Debtor has also tapped interest rate expert Timothy W. Nelson of Evans, Nelson & Company, CPAS and feasibility expert Arthur J. Hill of Argo Resources. REDEEMED CHRISTIAN: Cornerstone Buying Tampa Property for $350K --------------------------------------------------------------- The Redeemed Christian Church of God-Throne of Grace, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida to authorize the sale of the real property located at 8605 North 40th Street, Tampa, Florida to Cornerstone Foundation Academy, Inc., for $350,000, under the terms of the Commercial Contract. On Aug.13, 2020, the Debtor executed Sale Contract with the Buyer. The sale of the property is presently set to close on Oct. 30, 2020. Upon information and belief, the only parties who may claim a lien against the Real Property are Harvey Schonbrun, Trustee, in the approximate amount of $491,287 and various tax collector claims totaling the amount of $1,986. The proposed sale of the Real Estate is not in the ordinary course of business. The Debtor asks authority from the Court to sell the Real Property "as is" and "where is," free and clear of any potential liens, with valid and enforceable liens attaching to the proceeds of the sale. Taxes and ordinary closing costs, including broker's fees, will be paid at closing. The Debtor asks that the 14-day stay required under Bankruptcy Rule Section 6004(h) be waived, and that any order granting the Motion is effective immediately upon entry. The Mortgagor does not consent to the relief sought. A copy of the Contract is available at https://tinyurl.com/yxg5u5ae from PacerMonitor.com free of charge. About The Redeemed Christian Church of God-Throne of Grace Inc. The Redeemed Christian Church of God-Throne of Grace, Inc., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 20-00956) on Feb. 3, 2020, listing under $1 million in assets and liabilities. Buddy D. Ford, P.A., is the Debtor's legal counsel. REYNOLDS GROUP: S&P Affirms 'B+' ICR, Revises Outlook to Stable --------------------------------------------------------------- S&P Global Ratings revised its outlook on Reynolds Group Holdings Ltd. (RGHL) to stable from negative and affirmed the ratings on Pactiv Evergreen Inc. (PTVE), including the 'B+' issuer credit rating. S&P is assigning its 'B+' issue-level rating and '3' recovery to the proposed $1 billion term loan due 2026 and $1 billion senior secured notes due 2027. The stable outlook reflects the lower debt leverage as a result of the debt repayments and improved debt maturity profile despite the continued projected impact S&P expects from the COVID-19 pandemic. Reynolds Group Holdings Ltd. (RGHL) has launched an initial public offering (IPO) process for its Pactiv and Evergreen businesses, which S&P expects will raise about $800 million in proceeds. The company is also in the process of spinning-off its unrestricted subsidiary Graham Packaging to its parent company, Packaging Finance Ltd. (PFL). RGHL will rename itself to Pactiv Evergreen Inc. (PTVE) concurrent with the close of the IPO. With lower debt leverage following the debt pay down with the IPO proceeds, PTVE is better positioned to withstand potential further volatility from the COVID-19 pandemic. The effects of COVID-19 will continue to affect the company this year. In particular, the exposure to food service, paper cups and school milk cartons will be the most affected areas of PTVE's business. The broad stay-at-home orders that began late in the first quarter and into the second quarter had halted many of PTVE's sales into restaurants, purchases of paper cups for coffee, and school milk cartons. Offsetting some of these weaknesses is the strength of grocers, increase in take-out dining, and improved mix of carton sales to higher-margin products as consumers purchase more products for their homes during the pandemic. "We believe that the lifting of lockdown orders should help reverse the negative trends the company has experienced. However, with increasing COVID-19 cases in most of the U.S., delays in re-opening could continue to affect the company. Our base case is for a pro forma high-single-digit revenue decline this year, with modest growth returning in 2021 as the economy begins to recover," S&P said. The ratings on PTVE reflect its strong market positions in North American foodservice packaging, food merchandising, and beverage carton packaging. PTVE, with over $5 billion of revenues in 2019, is one of the leading manufacturers of fresh food and beverage packaging in North America. The company provides over 13,000 unique products that spans multiple substrates, including fiber, resin, and aluminum. Combined with a broad footprint across North America with 46 manufacturing facilities, 27 distribution facilities, and demonstrated produce development capabilities, it is able to meet the demands of some of the largest foodservice providers and grocers. It is the top provider to many of North America's largest food distributors, quick service restaurants, and grocers. Trends in food consumption such as fresh foods, online delivery, and specialty beverages should provide long-term tailwinds for the company. To support further growth, the company has invested higher-than-normal capital spending since 2018 which will run through 2021. The investments will improve efficiencies to expand capacity, increase throughput, and further its new product offering capabilities. In addition, the company should improve its cost structure with automation enhancements, more efficient supply chain management, and better integration of Pactiv and Evergreen. PTVE debt leverage still remains high despite improvements to its capital structure with actions around the IPO. S&P expects the company will issue $2 billion in new debt under the proposed secured term loan and senior secured notes, while repaying about $3.3 billion with the new debt issuance, IPO proceeds, and cash on hand. The new revolving credit facility maturity will mature in 2024, and the tenor on the new debt will push out the average maturities in its capital structure. Despite lower gross debt, one-time costs related to the spin-offs of Reynolds Consumer Products, Graham Packaging, and the IPO will affect EBITDA and debt leverage in 2020. S&P expects an economic recovery in 2021, coupled with improvements in the PTVE's cost structure, will bring the rating agency's adjusted debt leverage down to the mid-to-high 5x area in 2021. It also expects PTVE to implement a modest dividend as a public company, but do not forecast any material share repurchases over the next 12 months. Risks remain elevated under the current ownership as PTVE will be majority owned by Packaging Finance Ltd. (PFL), which is ultimately owned by a single shareholder. S&P views PTVE as strategically important to its parent, PFL, based on its importance to the group's long-term strategy. The stable outlook on PTVE reflects S&P's expectation that continued strength in its food merchandising business and recovery in its food service and beverage carton business will support stronger cash flows in the second half of the year and in 2021, which should support debt leverage in the mid-to-high 5x area by 2021. "We could lower the rating if the company sustains debt leverage above 7x, which could occur if it is unable to achieve projected growth and cost synergies, or if macro-conditions worsen beyond our expectations such that there are further declines in demand for foodservice and beverage carton products," S&P said. "We could raise the rating if the company is able to achieve its growth strategy and cost-reduction initiatives, such that it sustains adjusted debt to EBITDA below 5x. We would also require the company to demonstrate and commit to a more conservative financial policy that maintains the lower debt leverage level through economic cycles," the rating agency said. RGN-ATLANTA: Voluntary Chapter 11 Case Summary ---------------------------------------------- Seven affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- RGN-Atlanta XII, LLC 20-12359 3000 Kellway Drive Suite 140 Carrollton, TX 75006 RGN-Raleigh VII, LLC 20-12360 RGN-Miami Beach II, LLC 20-12361 RGN-Baltimore IV, LLC 20-12362 RGN-Tulsa V, LLC 20-12363 RGN-Costa Mesa II, LLC 20-12364 RGN-Irving II, LLC 20-12365 Business Description: The Debtors are primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: September 16, 2020 Court: United States Bankruptcy Court District of Delaware Debtors' 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 Debtors' Financial Advisor: ALIXPARTNERS Debtors' Restructuring Advisor: DUFF & PHELPS, LLC RGN-Atlanta's Estimated Assets: $0 to $50,000 RGN-Atlanta's Estimated Liabilities: $100,000 to $500,000 RGN-Raleigh VII's Estimated Assets: $100,000 to $500,000 RGN-Raleigh VII's Estimated Liabilities: $500,000 to $1 million RGN-Miami Beach's Estimated Assets: $100,000 to $500,000 RGN-Miami Beach's Estimated Liabilities: $1 million to $10 million RGN-Baltimore's Estimated Assets: $0 to $50,000 RGN-Baltimore's Estimated Liabilities: $100,000 to $500,000 RGN-Tulsa's Estimated Assets: $50,000 to $100,000 RGN-Tulsa's Estimated Liabilities: $500,000 to $1 million RGN-Costa Mesa's Estimated Assets: $500,000 to $1 million RGN-Costa Mesa's Estimated Liabilities: $1 million to $10 million RGN-Irving II's Estimated Assets: $100,000 to $500,000 RGN-Irving II's Estimated Liabilities: $500,000 to $1 million The petitions were signed by James S. Feltman, responsible officer. Copies of the petitions containing, among other items, lists of the Debtors' unsecured creditors are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/HVVB7KA/RGN-Atlanta_XII_LLC__debke-20-12359__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/H542GWQ/RGN-Raleigh_VII_LLC__debke-20-12360__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/DWOGLOQ/RGN-Miami_Beach_II_LLC__debke-20-12361__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/DTWN2VQ/RGN-Baltimore_IV_LLC__debke-20-12362__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/D2CEUWQ/RGN-Tulsa_V_LLC__debke-20-12363__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/AEGDUKY/RGN-Costa_Mesa_II_LLC__debke-20-12364__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/ANRYYSI/RGN-Irving_II_LLC__debke-20-12365__0001.0.pdf?mcid=tGE4TAMA The Debtors will move for joint administration of their cases for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure under the case captioned In re RGN-Group Holdings, LLC, et al. (Bankr. D. Del. Case No. 20-11961). RGN-BRAINTREE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: RGN-Braintree I, LLC 3000 Kellway Drive Suite 140 Carrollton, TX 75006 Business Description: RGN-Braintree I, LLC is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: September 15, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-12354 Judge: Hon. Brendan Linehan Shannon 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: $100,000 to $500,000 Estimated Liabilities: $100,000 to $500,000 The petition was signed by James S. Feltman, responsible officer. The Debtor filed an empty list of its 20 largest unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/WTIMMGY/RGN-Braintree_I_LLC__debke-20-12354__0001.0.pdf?mcid=tGE4TAMA The Debtor will move for joint administration of its case for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedrue under the case captioned In re RGN-Group Holdings, LLC, et al. (Bankr. D. Del. Case No. 11961). RGN-MILWAUKEE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: RGN-Milwaukee III, LLC 3000 Kellway Drive Suite 140 Carrollton, TX 75006 Business Description: RGN-Milwaukee III, LLC is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: September 15, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-12353 Judge: Hon. Brendan Linehan Shannon 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: $50,000 to $100,000 Estimated Liabilities: $500,000 to $1 million The petition was signed by James S. Feltman, responsible officer. The Debtor filed an empty list of its 20 largest unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ZY22YHY/RGN-Milwaukee_III_LLC__debke-20-12353__0001.0.pdf?mcid=tGE4TAMA The Debtor will move for joint administration of its case for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure under the case captioned In re RGN-Group Holdings, LLC, et al. (Bankr. D. Del. Case No. 11961). RGV SMILES: Seeks to Hire Burton McCumber as Accountant ------------------------------------------------------- RGV Smiles by Rocky L. Salinas D.D.S. P.A. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Burton McCumber & Longoria, LLP to provide accounting services. The services will include tax consultation and the preparation of Debtor's federal and state tax returns. The firm will be paid at hourly rates as follows: Javier Alarcon, CPA $250 Joel Fernandez, CPA $130 Mariana Longoria, Staff $92 Debtor will pay the firm on a monthly basis to the extent its invoices do not exceed $3,000 per month. Gregg McCumber, managing partner at Burton McCumber, assured the court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Burton McCumber can be reached at: Gregg S. McCumber Burton McCumber & Longoria, LLP 1950 Paredes Line Road Brownsville, TX 78521-1692 Tel: (956) 542-2553 Fax: (956) 542-8940 About RGV Smiles by Rocky L. Salinas RGV Smiles by Rocky L. Salinas D.D.S. P.A., a dental services provider in Pharr, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-70209) on June 30, 2020. Rocky L. Salinas, director at RGV Smiles, signed the petition. At the time of the filing, Debtor disclosed estimated assets of $100,000 to $500,000 and estimated liabilities of $10 million to $50 million. Judge Eduardo V. Rodriguez oversees the case. Joyce W. Lindauer Attorney, PLLC is Debtor's legal counsel. RGV SMILES: Seeks to Hire Riggs & Ray as Special Counsel -------------------------------------------------------- RGV Smiles by Rocky L. Salinas D.D.S. P.A. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Riggs & Ray, P.C. as special counsel. Riggs & Ray will represent Debtor in a case styled Richard F. Herrscher, DDS, MSD, PC, et al., Plaintiffs v. Xerox Corporation; Xerox State Healthcare, LLC; ACS State Healthcare, LLC, a Xerox Corporation, Defendants (Cause No. D-1-GN-15-002055), pending in the 345th Judicial District Court of Travis County, Texas. Debtor also needs the firm's legal assistance to investigate and, if viable, sue the Texas Medicaid Health Partnership for damages for its allegedly fraudulent and negligent practices. Riggs & Ray will get 40 percent of any recovery made for Debtor. Riggs & Ray is disinterested within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Jason Ray, Esq. Riggs & Ray, P.C. 506 W 14th St a Austin, TX 78701 Phone: +1 512-457-9806 About RGV Smiles by Rocky L. Salinas RGV Smiles by Rocky L. Salinas D.D.S. P.A., a dental services provider in Pharr, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-70209) on June 30, 2020. Rocky L. Salinas, director at RGV Smiles, signed the petition. At the time of the filing, Debtor disclosed estimated assets of $100,000 to $500,000 and estimated liabilities of $10 million to $50 million. Judge Eduardo V. Rodriguez oversees the case. Joyce W. Lindauer Attorney, PLLC is Debtor's legal counsel. RIVER BEND: Has Until April 27, 2021 to File Plan & Disclosures --------------------------------------------------------------- Judge James J. Robinson of the U.S. Bankruptcy Court for the Northern District of Alabama, Eastern Division, has entered an order within which the deadline for debtor River Bend Marina, LLC to file a Disclosure Statement and Plan is extended to April 27, 2021, and the deadline to achieve confirmation is extended to July 29, 2021. A copy of the order dated July 31, 2020, is available at https://tinyurl.com/y6c4rxs3 from PacerMonitor at no charge. About River Bend Marina River Bend Marina, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ala. Case No. 20-40075) on Jan. 15, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Robert D. McWhorter Jr., Esq., at Inzer Haney McWhorter Haney & Skelton, LLC. ROBERT J. MOCKOVIAK: Defense Counsel Can Stop Representing CPI -------------------------------------------------------------- In the case captioned ECLINICAL SOLUTIONS, LLC, Plaintiff, v. CLINICAL PROFESSIONALS, INC., Defendant, Civil Action No. 19-cv-10540-ADB (D. Mass.), Attorneys Jonathan Persky and John MacDonald, and the law firm of Constangy, Brooks, Smith & Prophete LLP ("Defense Counsel") have moved for leave to withdraw from their representation of Defendant Clinical Professionals, Inc. District Judge Allison D. Burroughs granted the motion to withdraw. CPI, which provides project management support to pharmaceutical companies pursuing clinical trials, entered into an agreement with eClinical for professional services and licensing fees. On March 21, 2019, eClinical filed this action, alleging that CPI had failed to pay eClinical for its services. On Oct. 31, 2019, the Court entered judgment for eClinical, with the consent of the parties, in the amount of $132,189.26. On Dec. 5, 2019, during a mediation before Judge Harrington, the parties reached an agreement regarding the schedule of payments. CPI has failed to make installment payments in accordance with the settlement agreement. eClinical has commenced post-judgment discovery against CPI, including noticing depositions and issuing requests for production of documents. A Rule 30(b)(6) deposition of CPI was noticed for July 16, 2020, and CPI's former Chief Operating Officer, Eric Richardson, was scheduled to be deposed on July 17, 2020. From the filing of the case until February 2020, Defense Counsel received authority from and reported to Richardson and the company's Vice President of Business Development, Sandra Mockoviak, both of whom were present at the mediation. In addition to being CPI's Vice President, Sandra Mockoviak and her husband Robert Mockoviak are the company's majority shareholders. The Defense Counsel has recently learned that Richardson was replaced as CPI's sole director. The Mockoviaks allege that George Souri, acting in accordance with an alleged written consent agreement, replaced Richardson as sole director. In a filing by the Mockoviaks against Souri, the Mockoviaks represent that Souri "managed to destroy CPI within 30 days" of becoming the sole director. Souri then attempted to revert control of the "now essentially defunct CPI" back to the Mockoviaks. The Mockoviaks filed a voluntary petition for Chapter 11 bankruptcy in the Southern District of Florida. CPI's operating account has since been frozen. The Defense Counsel reached out to counsel for Souri, as well as counsel for the Mockoviaks, both of whom maintained that their clients were not currently directors, officers, or employees of CPI. CPI currently owes Defense Counsel $10,104.36 for legal services related to this case. The Defense Counsel served the motion on the Mockoviaks, Souri, and CPI at its last known business address, in compliance with Local Rule 83.5.2(d). Additionally, the Court held a hearing on August 6, 2020. Although the Defense Counsel provided notice of the hearing to both the Mockoviaks and Souri, neither participated in the call. In considering a motion to withdraw, a court may consider: (1) the reasons why withdrawal is sought; (2) the prejudice withdrawal may cause to the litigants; (3) the delay in the resolution of the case which would result from withdrawal; and (4) the effect of withdrawal in the efficient administration of justice. Because "[c]orporations are unable to appear pro se," the Court should also consider the potential adverse consequences to an unrepresented corporate party. According to Judge Burroughs, it appeared that CPI does not have any directors or officers and is no longer being operated, as no one has asserted management powers over CPI. The Defense Counsel is therefore ostensibly without a client. Further, it appeared unlikely, given the posture of the case, that the Defense Counsel will ever be reimbursed for time they have already spent on this case. Finally, the Court noted that judgment has already been entered in this case, and the parties have agreed to a schedule of installment payments in satisfaction of that judgment. Therefore, CPI will not be unduly prejudiced by the Defense Counsel's withdrawal, as the only issue remaining is eClinical's post-judgment discovery. Because CPI is without a client representative to whom the Defense Counsel could report, had not paid the Defense Counsel for its representation, and will not be overly prejudiced given the posture of the case, Judge Burroughs granted the motion to withdraw. A copy of the Court's Memorandum Order and Opinion dated August 7, 2020 is available at https://bit.ly/2QPLvzu from Leagle.com. Robert J. Mockoviak and Sandra H. Mockoviak sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-14372) on April 10, 2020. The Debtors tapped Luis Salazar, Esq., at Salazar Law, as counsel. ROBERT RICHARD GUNVILLE, JR: Selling Buckhead Property for $326K ---------------------------------------------------------------- Robert Richard Gunville, Jr. and Judith Marie Gunville ask the U.S. Bankruptcy Court for the Western District of Michigan to authorize the sale of the real property located at 1090 Blue Springs Road, Buckhead, Georgia to Blake Butcher and Adrienne Little for $325,000. The Debtors and the Buyers have executed the Purchase Agreement, subject to the approval of the Court, in order to consummate the sales. The essential term of the Agreement to the Buyers is that the sale of the Real Estate is for the total sum of $325,000. The net proceeds of the sale of the Real Estate to the Buyers will be paid at closing to Morgan County for payment of delinquent real estate taxes and the balance of the proceeds to BankSouth, which holds the first lien on the Real Estate in the amount of approximately $225,000. Any remaining funds will be deposited in the trust Account of Warner Norcross + Judd pending further order of the court. The Debtors believe that the sale is in the best interest of their creditors due to the fact that the Properties are not necessary to their continued operations and sale of the Properties will be provided for in the Chapter 11's plan which the Debtors will be filing in the near future. There are no additional lienholders on the property. The sales will be free and clear of all liens, claims, and interests. Any liens, claims, and interests over the Properties will attached to the proceeds of the sale. A copy of the Agreement is available at https://tinyurl.com/y57zwte7 from PacerMonitor.com free of charge. Robert Richard Gunville, Jr., and Judith Marie Gunville sought Chapter 11 protection (Bankr. W.D. Mich. Case No. 19-90217) on Oct. 21, 2019. The Debtors tapped Rozanne M. Giunta, Esq., and Elisabeth M. Von Eitzen, Esq., at Warner Norcoss & Judd LLP, as counsel. RODOLFO CARRERO: Not Barred from Refiling Ch. 11 Bankr. Petition ---------------------------------------------------------------- Bankruptcy Judge Edward A. Godoy denied OSP Consortium, LLC's request to bar debtors Rodolfo Ramirez Carrero and Kendall Roggio Vega from refiling a bankruptcy petition for 180 days from the date of the order dismissing their case. On May 1, 2019, Debtors Carrero and Vega ("Mrs. Roggio") filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. A hearing on the final approval of the disclosure statement and confirmation of the small business plan was held on April 29, 2020. Prior to the hearing, the court entered an order directing the debtors to show cause as to why the case should not be dismissed or converted to chapter 7 due to the debtors' failure to file timely an amended disclosure statement and plan. The debtors responded on April 28, 2020, informing the court that "they [were] not in the position" to file an amended disclosure statement and plan since their properties had been damaged in the earthquakes that affected Puerto Rico in January 2020, "making it thus impossible for the [d]ebtors to comply with the terms of the stipulation" entered with the secured creditor, OSP. At the hearing, the debtors consented to the dismissal of the case on this basis. OSP, however, requested that the court impose a 180-day bar to the debtors re-filing a bankruptcy petition. The court provided a term for OSP to file a motion in support of its position and for the debtors to file their opposition. An evidentiary hearing was set for June 9, 2020. At the evidentiary hearing, the court heard testimony from both debtors and from Francisco de Armas Cubas, the principal of OSP's servicer, Caribbean Investment & Acquisition, Corp. At the conclusion of the hearing, the court took the matter under advisement. OSP argued that the debtors, in bad faith, are seeking to "bypass[] the provision of the stipulation" the parties entered in December 2019 by simply acquiescing to the dismissal of the case. This would allow them to then immediately re-file a second bankruptcy petition upon the dismissal of this case, thus extending the protections of the Bankruptcy Code without subjecting them to the repayment terms they previously negotiated with OSP. OSP contended that the debtors' bad faith constitutes cause for the imposition of a bar to re-file. In support of its position, OSP cites to case law holding that "willfully failing to make a plan payment" in a chapter 13 case may be grounds for dismissal with prejudice, even for a first-time filer The debtors countered that their failure to make payments to OSP under the terms of the stipulation is due solely to circumstances outside of their control that have severely impacted their finances, namely the January earthquakes in Puerto Rico and the COVID-19 pandemic. The debtors also emphasized that this is their first bankruptcy case. Given the factual record in this case, the court did not find that a bar to re-file is warranted. At the outset, OSP was not alleging that the debtors showed bad faith in either the filing of the bankruptcy case or in the negotiations leading up to the December 2019 stipulation. Rather, OSP argued that the debtors' failure to provide it with information regarding its insurance claim following the January 2020 earthquakes and to renegotiate the stipulation constitutes bad faith. According to Judge Godoy, this argument downplays, however, that circumstances for the debtor have changed significantly between December 2019, when it entered the stipulation with OSP, and March 20, 2020, the deadline for the debtor to file the amended disclosure statement and plan. The court also heard credible testimony from Dr. Ramirez and Mrs. Roggio detailing the damages their residence suffered in the January 2020 earthquakes, and the difficulties they have encountered in having the damages properly assessed and repaired. Dr. Ramirez also testified about the effects the earthquakes and the COVID-19 pandemic have had on his medical practice. Following the earthquakes, the debtors' business was shut down for several weeks due to a lack of electricity. Even upon reopening, the medical practice was slow to recover. And, Dr. Ramirez further testified that the COVID-19 pandemic has had a significant impact on Dr. Ramirez's medical practice beginning in March 2020, reducing by half the number of patients he has seen. Given this virtually unprecedented series of circumstances that have directly affected the debtors' property and business, and the difficulty in trying to forecast the medical practice's future earnings in light of the ongoing pandemic, the court did not consider the debtors' determination that they would not be able to file a viable amended plan of reorganization as a sign of bad faith. The court, therefore, did not find "cause" for the imposition of a bar to re-file under section 349(a). The bankruptcy case is in re: RODOLFO RAMIREZ CARRERO and KENDALL ROGGIO VEGA, DEBTORS, Case No. 19-02460(EAG)(Bankr. D.P.R.). A copy of the Court's Opinion and Order dated August 6, 2020 is available at https://bit.ly/2EK7KV2 from Leagle.com. Rodolfo Ramirez Carrero and Kendall Roggio Vega filed for chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 19-02460) on May 1, 2019, and are represented by Michelle Marie Vega Rivera, Esq. SCOSA PROPERTIES: Claimants to Be Paid in Full in Plan ------------------------------------------------------ SCOSA Properties, LLC, filed with the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, a Chapter 11 Plan of Reorganization and a Disclosure Statement. Through the Plan, the Debtor proposes to pay all administrative priority, priority, and secured creditors in full, with any applicable statutory interest on such claims. There are no general unsecured claims against the Debtor in the case. Equity Security Holders of the Debtor will retain their shares in the Debtor in exchange for making a $5,000 contributions towards the Plan: the $5,000 will be payable within 30 days of the Effective Date to ensure allowed administrative claims are paid in full. The Plan will be funded utilizing a combination of funds on hand as of the Effective Date, and funds generated from the future operations of the company, and funds contributed by the equity owners of the entity. A full-text copy of the Disclosure Statement dated August 4, 2020, is available at https://tinyurl.com/y23pd4na from PacerMonitor.com at no charge. About SCOSA Properties SCOSA Properties LLC is primarily engaged in renting and leasing real estate properties. The company filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50042) on Jan. 6, 2020. On the Petition Date, the Debtor was estimated between $1 million and $10 million in both assets and liabilities. The petition was signed by Scott M. Hillje, member. Law office of H. Anthony Hervol represents the Debtor. Judge Craig A. Gargotta is assigned to the case. SEADRILL LTD: Reaches Forbearance Until Sept. 29 for Missed Payment ------------------------------------------------------------------- Greg Chang of Bloomberg News reports that Seadrill reported forbearance agreements with certain creditors who have agreed not to take actions until Sept. 29, 2020, as a result of missed interest payments due in September 2020. Forbearance hasn’t been agreed to yet about possible terminations of the company’s leasing agreements for the West Hercules, West Linus and West Taurus. Agreements give more time for talks on restructuring, which “may involve the use of a court-supervised process.” Expects potential solutions will lead to significant equitization of debt and minimal or no recovery for current shareholders. The company has engaged Kirkland & Ellis as legal counsel, Houlihan Lokey as financial advisor and Alvarez. About SpeedCast International Headquartered in New South Wales, Australia, SpeedCast International Limited and its affiliates provide remote and offshore satellite communications and information technology services. SpeedCast's fully-managed service is delivered to more than 2,000 customers in 140 countries via a global, multi-access technology, multi-band and multi-orbit network of more than 80 satellites and an interconnecting global terrestrial network, bolstered by on-the-ground local support from more than 40 countries. Speedcast services customers in sectors such as commercial maritime, cruise, energy, mining, government, NGOs, enterprise and media. SpeedCast International and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32243) on April 23, 2020. At the time of the filing, the Debtors each had estimated assets of between $500 million and $1 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel; Herbert Smith Freehills as co-counsel with Weil; Moelis Australia Ltd. as financial advisor; FTI Consulting Inc. as restructuring advisor; and Kurtzman Carson Consultants LLC as claims agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' bankruptcy cases. The committee is represented by Hogan Lovells US, LLP. SERENTE SPA: Plan of Reorganization Confirmed by Judge ------------------------------------------------------ Judge Jeffrey P. Norman has entered an order approving the Disclosure Statement and confirming the Plan of Reorganization of Serente Spa, LLC. Notice of the hearing on confirmation of the Plan has been given in accordance with Title 11, United States Code, the Order of the Court and the Federal and Local Rules of Bankruptcy Procedure. The Plan complies with all applicable provisions of the Bankruptcy Code and applicable Bankruptcy Rules relating to confirmation. A full-text copy of the order and plan dated August 4, 2020, is available at https://tinyurl.com/y6rh256h from PacerMonitor.com at no charge. Attorney for the Debtor: MARGARET M. MCCLURE 909 Fannin, Suite 3810 Houston, Texas 77010 Tel: (713) 659-1333 Fax: (713) 658-0334 E-mail: margaret@mmmcclurelaw.com About Serente Spa Serente Spa, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-35078) on Sept. 9, 2019. At the time of the filing, the Debtor had estimated assets of less than $100,000 and liabilities of less than $1 million. The case is assigned to Judge Jeffrey P. Norman. Margaret Maxwell McClure, Esq., at the Law Office of Margaret M. McClure, is the Debtor's legal counsel. No official committee of unsecured creditors has been appointed in the Debtor's bankruptcy case. SEVEN STARS: Bankruptcy Court Dismisses Subchapter V Case --------------------------------------------------------- Bankruptcy Judge Scott M. Grossman issued an order dismissing the Subchapter V case by debtor Seven Stars on the Hudson Corp. Seven Stars on the Hudson Corp. operates a trampoline park located in a larger indoor entertainment facility called Xtreme Action Park, in Broward County, Florida. Seven Stars leases its premises at Xtreme Action Park from MDG Powerline Holdings, LLC. An alleged affiliate of MDG -- XBK Management, LLC d/b/a Xtreme Action Park -- is a co-tenant of the leased premises. Seven Stars filed the Chapter 11 case on June 5, 2019, as a "small business debtor," as defined in the version of 11 U.S.C. section 101(51D) then in effect. Shortly after filing the case, Seven Stars commenced an adversary proceeding against its co-tenant, Xtreme and its landlord, MDG. Throughout the Chapter 11 case -- which has been pending now for over one year -- Seven Stars had to address disputes with its now-former franchisor, Rockin' Jump, LLC; with its secured creditor, Wells Fargo Bank, N.A.; and with MDG and Xtreme. Seven Stars has since concluded its relationship with Rockin' Jump under a settlement agreement approved by the Court. With respect to Wells Fargo, Seven Stars has agreed on terms for consensual use of cash collateral, and there are not any currently pending disputes of record between Seven Stars and Wells Fargo. With respect to MDG and Xtreme, however, there remain unresolved disputes. One dispute that was resolved, however, was whether Seven Stars could assume its lease with MDG. Seven Stars timely moved to assume its lease on Oct. 3, 2019. The hearing to consider the assumption motion was consensually continued several times -- apparently in deference to resolution first of Seven Stars' dispute with Rockin' Jump under its franchise agreement. The last requested continuance of the lease assumption hearing was on March 3, 2020. The Court granted that request the same day, and rescheduled the assumption hearing for April 29, 2020. Due to an apparent inability to make that payment, on June 19, 2020 -- over a year after its petition date, four months after the Feb. 19, 2020 effective date of the Small Business Reorganization Act of 2019 (the "SBRA"), and about three weeks after the Court ruled that it must pay MDG $130,000 on the effective date of a Chapter 11 plan -- Seven Stars filed an Amended Petition for Non-Individuals Filing for Bankruptcy,20 in which it elected to proceed under new Subchapter V of Chapter 11 of the Bankruptcy Code. Subchapter V, however, requires a debtor to file a plan not later than 90 days after the order for relief, and requires the Court to hold a status conference not later than 60 days after the order for relief. Here, the order for relief was entered on June 5, 2019. Thus, upon amending its petition to elect to proceed under Subchapter V more than a year into its case, Seven Stars immediately put itself in default of the requirements of both Sections 1188(a) and 1189(b). Further, Bankruptcy Code section 1112(b)(4)(J) provides that a debtor's failure to file a disclosure statement or to file or confirm a plan within the time fixed by the Bankruptcy Code constitutes cause for dismissal of this case. Likewise, to confirm a Chapter 11 plan -- even one under new Subchapter V -- both the plan and the plan proponent must comply with the applicable provisions of the Bankruptcy Code. Accordingly, because cause facially existed for dismissal of this case under Section 1112(b)(4)(J), on June 24, 2020, the Court issued an Order to Show Cause Why Case Should Not Be Dismissed. Both Seven Stars and newly-appointed Subchapter V trustee, Linda Leali, filed briefs opposing dismissal of the case, in which they argued that the Court had authority to allow Seven Stars to proceed under new Subchapter V, notwithstanding expiration of the statutory deadlines. MDG filed a brief in support of dismissal, in which it argued that Seven Stars could not use Subchapter V to subvert the Court's ruling on assumption of its lease, and that extension of the expired statutory deadlines was not warranted. MDG also argued that it had vested rights in this case by virtue of the Court's earlier ruling on assumption of its lease, and that retroactive application of the Subchapter V deadlines would impermissibly alter those rights. The Office of the United States Trustee did not file any brief supporting or opposing dismissal, and took no position on dismissal at the hearing on the Show Cause Order. According to Judge Grossman, for a small business needing to reorganize its financial affairs, a Chapter 11 bankruptcy case can be prohibitively expensive. Recognizing that small business Chapter 11 cases "continue to encounter difficulty in successfully reorganizing," Congress enacting the SBRA to "streamline the bankruptcy process by which small businesses debtors reorganize and rehabilitate their financial affairs." The SBRA created a new Subchapter V of Chapter 11 of the Bankruptcy Code that permits qualifying small business debtors "'to file bankruptcy in a timely, cost-effective manner, and hopefully allows them to remain in business' which 'not only benefits the owners, but employees, suppliers, customers, and others who rely on that business.'" After considering all the facts presented, Judge Grossman stated that Subchapter V is intended to be an expedited process. The debtor has the opportunity to use new, powerful tools to reorganize and save its business; but it must do so quickly. Thus, the notion that Congress intended to permit a debtor to first try reorganizing through a traditional Chapter 11 case or a non-Subchapter V small business case (or even that a debtor might first seek to liquidate under Chapter 7), before giving it another try under Subchapter V after expiration of the statutory deadlines, is plainly inconsistent with the statute. The Court, therefore, disagrees with recently-reported cases that would liberally read Sections 1188(b) and 1189(b) to permit extensions of these deadlines for a debtor who has elected to proceed under Subchapter V after these deadlines had already passed. Judge Grossman held that where a debtor elects to proceed under Subchapter V after the statutory deadlines have passed, it cannot be said that the need for an extension of these deadlines is attributable to circumstances for which the debtor should not justly be held accountable. The debtor should justly be held accountable for these circumstances; the debtor made this election after the deadlines expired. That decision by a debtor should not foist upon creditors all of the added powers of a Subchapter V debtor without one of the most significant protections afforded to creditors under the SBRA -- that the case proceed expeditiously. The case, therefore, is dismissed. The bankruptcy case is in re: Seven Stars on the Hudson Corp., Chapter 11, Debtor, Case No. 19-17544-SMG (Bankr. S.D. Fla.). A copy of the Court's Order dated August 7, 2020 is available at https://bit.ly/2GlzHDm from Leagle.com. Based in Fort Lauderdale, FL 33309, Seven Stars on the Hudson Corp., dba Rockin Jump -- rockinjump.com/ftlauderdale -- manages a trampoline amusement park. The company filed for chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 20-19106) on August 24, 2020, with total assets of $491,919 and total liabilities of $1,393,203. The petition was signed by Jens Berding, authorized representative. SHEA HOMES: S&P Rates New $300MM Senior Unsecured Notes 'BB-' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level and '2' recovery ratings to Shea Homes L.P.'s proposed $300 million senior unsecured notes due 2030. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default. The rating agency expects the company to use the proceeds from this offering to refinance its existing senior notes due in 2025. SHEARER'S FOODS: Moody's Cuts 1st Lien Term Loan to B2 on Upsizing ------------------------------------------------------------------ Moody's Investors Service downgraded Shearer's Foods, LLC's proposed new first lien term loan to B2 from B1 on the upsizing of the first lien facility and equal downsizing of the proposed second lien term loan. All other ratings including the company's B2 CFR are unchanged. The rating outlook is stable. The downgrade is the result of the lower amount of junior debt that will be in the capital structure after the second lien term loan was downsized by $90 million to $250 million and the first lien was increased by $90 million to $1,075 million, providing less loss absorption to the first lien debt. Moody's notes that the overall amount of debt and thus leverage will remain the same. The larger proportion of debt at the lower first lien interest rate will save interest costs going forward which is a long term positive. The company is in the process of refinancing and increasing its first and second lien term loans and extending the maturities to 2027 and 2028 respectively. In addition to refinancing the existing first and second lien debt, the company will use proceeds to repay a subordinated seller note, repay revolver outstanding and fund a one-time $388 million special dividend to equity sponsors including Ontario Teachers' Pension Plan. The increased borrowings will lift debt to EBITDA leverage by a turn and a half, from 5.1x as of the LTM ended June, 2020 to approximately 6.6x at the close of the transaction, including Moody's adjustments. Moody's views the dividend payout and resulting increase in leverage to be financially aggressive but closing debt-to-EBITDA leverage of 6.6x will remain below 2017-2018 levels of over 7x when the company was faced with integration challenges following acquisitions and a poor potato crop. The rating agency expects that operational improvements that have generated efficiencies and good business momentum as a result of pricing increases, mix shifts through eliminating less profitable SKUs and innovation will sustain the improvement in margins achieved over the last 18 months. Improved earnings will provide sufficient free cash flow to reduce debt-to-EBITDA leverage to closer to 6x over the next year. Free cash has improved meaningfully over the last two years and Moody's projects that it will exceed $55 million over the next 12 months. The following ratings/ assessments are affected in the action: Issuer: Shearer's Foods, LLC. $1,075M Senior Secured 1st Lien Term Loan; to B2 (LGD3) from B1 (LGD3) The Caa1 rating on the proposed second lien term loan is not affected. Ratings on the existing first and second lien term loans of B3 and Caa2, respectively, will be withdrawn upon closing of the transaction and repayment of those facilities. RATING RATIONALE Shearer's B2 Corporate Family Rating reflects the company's high financial leverage following the planned dividend recapitalization, aggressive financial policies under private equity ownership and significant customer concentration. Profitability and free cash flow have been improving after the company addressed challenges that followed a period of rapid growth through acquisition, with free cash flow of approximately $56 million expected in 2020 (before the special dividend payout). The company has performed well amid the disruptions brought on by the coronavirus, with high demand for snacking items at retail offset by disruption in its smaller food service channels and higher coronavirus-related costs which the company believes largely offset the benefit of higher volumes. The rating reflects the company's leading position as a producer of private label snacks, its scale as a contract manufacturer with nationwide reach and its very good liquidity supported by improving projected free cash flow, growing cash balances, its expectation that after the refinancing it will maintain an unutilized $125 million revolver and a covenant lite structure. Environmental, Social and Governance considerations: The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Shearer's environmental impact remains low and the associated risks are limited. Environmental considerations are not a material factor in the rating. Shearer's governance is influenced by its private ownership. Like other private equity sponsored firms, Shearer's has been comfortable operating with high financial leverage. Moody's views Shearer's private equity ownership, including the willingness to lever up to pay a large dividend and its historically aggressive acquisition strategy, as governance risks that create risk that debt and leverage will increase. However, the company's intention to rapidly pay down debt following the dividend recap is a partial mitigant. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The stable rating outlook reflects Moody's view that continued revenue growth and realization of cost efficiencies will sustain earnings growth and comfortably positive free cash flow. The outlook also reflects Moody's view that debt-to-EBITDA leverage will decline to a 6.0x range over the next year and that Shearer's will maintain very good liquidity. Ratings could be upgraded if the company sustains debt to EBITDA below 5x, maintains good operating performance, generates consistently strong free cash flow, and adopts a more conservative financial policy. Ratings could be downgraded if the company's liquidity deteriorates, operating performance weakens, if it engages in large debt financed acquisitions or shareholder returns, or if debt to EBITDA leverage is sustained above 6.5x. Shearer's Foods, LLC, headquartered in Massillon, Ohio, manufactures snack food products such as kettle chips, tortilla chips, potato chips, extruded cheese snacks, cookies, and crackers for other companies. Revenue was approaching $1.3 billion for the 12 months ending June, 2020. Shearer's is majority owned by Ontario Teachers' Pension Plan and does not publicly disclose financial information. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. SKY-SKAN: Seeks Continued Use of Cash Collateral Thru January 2021 ------------------------------------------------------------------ Sky-Skan Inc. asks the U.S. Bankruptcy Court for the District of New Hampshire for entry of an order authorizing its continued use of cash collateral to pay costs and expenses in the ordinary course of business during the period between the weeks ending October 9, 2020 to January 21, 2021, or until the date on which the Court enters an order revoking the Debtor's right to use cash collateral. The Debtor proposes to use up to $624,614 of its $560,599 in revenue during the Use Period to pay costs and expenses incurred in the ordinary course of business. The Debtor says it should have a remaining positive cash of $89,753 at the end of the Use Period. The Debtor says the Internal Revenue Service and Coastal Capital, LLC, may assert interests on the cash collateral. The Debtor proposes and believes that the cash collateral will be adequately replaced during the Use Period such that the IRS and/or Coastal will be in a better position by allowing this use, than it would be if there were an immediate cessation of the business. Since February 2018, the Debtor has been paying into escrow at the Tamposi Law Group the monthly sum of $14,053.84. Payments have been made and will continue to be made on the 15th day of each month. Payments will continue each month thereafter until confirmation of the Debtor's Chapter 11 Plan. As adequate protection, the Debtor proposes to give the IRS and Coastal valid, binding, enforceable and automatically perfected liens on all of the Debtor's after acquired cash collateral arising post-petition to the same extent and in the same priority as such lien existed prior to the Petition Date. A copy of the Debtor's motion is available at https://bit.ly/35Bu8ex from PacerMonitor.com. Coastal Capital, LLC is represented in the case by: Peter Antonelli, Esq. Zachary J. Gregoricus, Esq. Mark D. Kanakis, Esq. Curran Antonelli E-mail: pantonelli@curranantonelli.com zgregoricus@curranantonelli.com kanakis@mklawnh.com The Committee Creditors' Committee is represented by: William S. Gannon, Esq. E-mail: bgannon@gannonlawfirm.com jarquette@gannonlawfirm.com bvenuti@gannonlawfirm.com gannonlawfirm@gmail.com About Sky-Skan Inc. Sky-Skan, Inc., was founded in 1967 as a company dedicated solely to the development and manufacture of specialized devices for depicting dynamic visualizations of astronomical and meteorological phenomena on planetarium domes in museums, schools, and universities. The company has since grown to become a provider of digital full dome science visualization, theater control, and show programming systems for hundreds of planetariums on six continents, serving hundreds of clients in the niche field of immersive science interpretation and education. From the initial planning stage to staff training and ongoing support, Sky-Skan provides all services required by the most advanced digital full-dome planetariums and visualization theaters. Sky-Skan, based in Nashua, New Hampshire, filed a Chapter 11 petition (Bankr. D.N.H. Case No. 17-11540) on Nov. 1, 2017. In the petition signed by Steven T. Savage, president, the Debtor was estimated to have less than $50,000 in assets and $1 million to $10 million in liabilities as of the bankruptcy filing. Peter N. Tamposi, Esq., at The Tamposi Law Group, P.C., serves as bankruptcy counsel to the Debtor, and SquareTail Advisors, LLC, is the financial advisor. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Dec. 1, 2017. The Committee retained William S. Gannon PLLC as its bankruptcy counsel. SPECIALTY BUILDING: Moody's Rates $575MM Secured Notes 'B3' ----------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Specialty Building Products Holdings, LLC's proposed issuance of $575.0 million senior secured notes due 2026. U.S. Lumber's B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating are not impacted by the proposed transaction. The outlook remains stable. Moody's views the proposed transaction as credit negative since a portion of the proceeds will be used to pay a dividend to affiliates of Madison Dearborn Partners, the primary owner of U.S. Lumber, in a leveraging transaction. The dividend represents multiple years of free cash flow and is almost half of Madison Dearborn's investment in U.S. Lumber. However, the balance of the proceeds will be used to redeem the company's $494 million senior secured term loan maturing 2025, at which time the rating will be withdrawn, and eliminates the refunding risk in late 2025. There is no significant change in interest costs from the proposed refinancing. Moody's estimates future cash interest payments will be nearly $50 million per year. The B3 rating assigned to the senior secured notes due 2026, one notch below the Corporate Family Rating, results from their subordination to the company's $125.0 million asset based revolving credit facility expiring in 2023. "The debt financed dividend overshadows U.S Lumber's improving operating performance and delays the deleveraging that Moody's expected," according to Peter Doyle, a Moody's VP-Senior Analyst. The following ratings/assessments are affected by the action: Assignments: Issuer: Specialty Building Products Holdings, LLC Senior Secured Regular Bond/Debenture, Assigned B3 (LGD4) RATINGS RATIONALE U.S. Lumber's B2 CFR reflects Moody's expectation of continued high leverage with debt-to-LTM EBITDA of 5.9x at year-end 2021. U.S. Lumber's end markets are volatile with intense competition. The inability to generate large amount of free cash flow throughout the year limits the company's financial flexibility. Offsetting these weaknesses is U.S. Lumber's operating performance, which is the company's greatest credit strength. Moody's forecasts adjusted operating margin improving and trending towards the high end of the 2.0% - 5.0% range through 2021. Also, the company has good revolver availability and no near-term maturities. Governance characteristics Moody's considers in U.S. Lumber's credit profile includes an aggressive financial strategy, evidenced by high leverage and using debt to finance a dividend. U.S. Lumber's Board lacks independent directors. The stable outlook reflects Moody's expectation that U.S. Lumber's leverage will improve towards 5.5x. Moody's also anticipates end markets will support growth over the next 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Factors that could lead to an upgrade: (All ratios incorporate Moody's standard adjustments): -- Debt-to-LTM EBITDA is maintained near 4.0x -- The company's liquidity profile improves, including generating substantial free cash flow -- Positive trends in end markets and sustained organic growth Factors that could lead to a downgrade: (All ratios incorporate Moody's standard adjustments): -- Debt-to-LTM EBITDA is expected to stay above 5.5x -- EBITA-to-interest expense is sustained below 1.5x -- The company's liquidity profile deteriorates Specialty Building Products Holdings, LLC (dba as U.S. Lumber), headquartered in Atlanta, Georgia, distributes building materials throughout the Southeast, Mid-Atlantic and East Coast of the United States, and Canada. U.S. Lumber operates as a two-step distributor, buying and reselling a large variety of specialty products mostly to national and other one-step distributors. Madison Dearborn Partners, through its affiliates, is the primary owner of U.S. Lumber. U.S. lumber is privately owned and does not disclose financial information publicly. The principal methodology used in this rating was Distribution & Supply Chain Services Industry published in June 2018. SPECIALTY BUILDING: S&P Alters Outlook to Positive, Affirms B- ICR ------------------------------------------------------------------ S&P Global Ratings revised its outlook on U.S. based building products distributor Specialty Building Products Holdings to positive from negative and affirmed all its ratings, including the 'B-' issuer credit rating. At the same time, S&P assigned its 'B-' issue level rating and '4' recovery rating to the $575 million senior secured notes due in 2026 proposed by the company to repay existing term loan and pay an $81 million distribution to its owners. Strong end-market demand along with new product initiatives have aided improvement in performance. Over the last few quarters S&P has seen strong demand trends in Specialty's two major end markets, new construction and repair and remodeling, which together account for over 90% of its revenues. While sales initially declined at the onset of the COVID-19 outbreak in April, there has been a steady recovery since. The company's revenues have also experienced organic growth from new product investments made last year. This has resulted in first half 2020 revenues growing by 17% from the prior year period and adjusted EBITDA improving 27%. Similarly, adjusted leverage for the 12 months ended June 30, 2020, reduced to 6.6x from 9.1x in the same period last year and EBITDA interest was about 2x. S&P now expects year-end 2020 adjusted leverage to be around 6x versus its prior expectations of over 8x. Management's steps to control expenses and preserve cash early in the COVID crisis benefited earnings and cash flows during the second quarter. While the company's high variable cost structure has helped maintain margins, its strong operating cash flow generation has funded a reduction in the asset-backed lending (ABL) facility borrowings. An improving earnings outlook provides the opportunity to issue more debt to fund a dividend to private equity sponsors. The dividend exceeds the company's cash generation since large acquisitions in 2017 and 2018, continuing a four-year trajectory of a rising debt load. Return on assets has dropped to about 4% in the last three years, which is below the cost of the company's debt and indicates some degradation of equity value for credit support. In line with its expectations of revenue growth, S&P expects Specialty will continue improving its earnings and cash flow generation. As a result, S&P now expects Specialty to end 2020 with adjusted leverage of around 6x while maintaining EBITDA interest coverage of about 2x. Further, the rating agency expects the company to maintain credit measures at these levels through 2021. Increased homebuilding and repair and remodel activities, since the beginning of the recession, underlie S&P's expectations of 10%-15% revenue growth in 2020-2021. Increased demand for suburban living and low mortgage rates have sparked a surge in homebuilding activity, raising demand for Specialty's products. Also, increased time spent at home due to social distancing practices has resulted in heightened consumer focus and spending towards home improvements/remodeling. S&P thinks this increased level of housing investment will continue over the next 12 months. Some of Specialty's major product categories, such as wood based products and composite decking, have seen large demand surges. This combined with the overall favorable demand conditions will drive revenue growth. S&P now expects the company's revenues to grow by 10%-15% in 2020 and 2021. The positive outlook on Specialty reflects the potential for a higher rating if favorable end market demand leads to improvement in the company's performance, such that adjusted leverage will be about 6x or less and EBITDA interest coverage will be about 2x. The dividend from the proposed financing slows the improvement in the company's credit profile by about a year, given that the new debt increases pro forma debt leverage by more than one turn of EBITDA. S&P may raise its ratings on Specialty over the next 12 months by one notch if: -- Earnings continue to improve such that adjusted leverage begins trending towards 6x, with EBITDA interest coverage of 2x; and -- The company continues to be disciplined in its use of debt for dividends and acquisitions. S&P may revise the outlook back to stable over the next 12 months if: -- Earnings fail to improve and adjusted leverage remains around 7x and EBITDA interest remains below 2x; or -- Business conditions deteriorate with little expectations of a quick recovery. SPEEDCAST INT'L: Black Diamond, Centerbridge Head to Mediation -------------------------------------------------------------- Steven Church of Bloomberg News reports that alternative lending giants Black Diamond Capital Management and Centerbridge Partners will take their fight to reorganize bankrupt satellite services provider Speedcast International to mediation. At a court hearing Tuesday, U.S. Bankruptcy Judge Marvin Isgur gave the investors permission to ask his fellow Houston-based bankruptcy judge David R. Jones to mediate the dispute Black Diamond is the biggest secured lender to Speedcast, which provides communication services to cruise ships and offshore oil rigs; the lender is pushing to buy Speedcast by using its debt as a form of currency at a bankruptcy auction, according to court documents. About SpeedCast International Headquartered in New South Wales, Australia, SpeedCast International Limited and its affiliates provide remote and offshore satellite communications and information technology services. SpeedCast's fully-managed service is delivered to more than 2,000 customers in 140 countries via a global, multi-access technology, multi-band and multi-orbit network of more than 80 satellites and an interconnecting global terrestrial network, bolstered by on-the-ground local support from more than 40 countries. Speedcast services customers in sectors such as commercial maritime, cruise, energy, mining, government, NGOs, enterprise and media. SpeedCast International and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32243) on April 23, 2020. At the time of the filing, Debtors each had estimated assets of between $500 million and $1 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel; Herbert Smith Freehills as co-counsel with Weil; Moelis Australia Ltd. as financial advisor; FTI Consulting Inc. as restructuring advisor; and Kurtzman Carson Consultants LLC as claims agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' bankruptcy cases. The committee is represented by Hogan Lovells US, LLP. SPHIER EMERGENCY: Case Summary Unsecured Creditor ------------------------------------------------- Debtor: Sphier Emergency Room #2, LLC 8721 Highway 6 Missouri, TX 77459 Business Description: Sphier Emergency Room #2, LLC operates in the health care industry. Chapter 11 Petition Date: September 16, 2020 Court: United States Bankruptcy Court Southern District of Texas Case No.: 20-34579 Debtor's Counsel: Clifton Kyle, Esq. KYLE LAW GROUP, P.C. 1716 Washington Avenue Houston, Texas 77007 Tel: 713-487-5751 Email: cckyle@kylelawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Dr. Swapan, Dubey, managing member. The Debtor listed Sienna Associations as its sole unsecured creditor holding a claim of $5,043. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SFFMS7A/Sphier_Emergency_Room_2_LLC__txsbke-20-34579__0001.0.pdf?mcid=tGE4TAMA SPORTCO HOLDINGS: Wellspring Sues Insurers for Claims of Tanking ---------------------------------------------------------------- Law360 reports that private equity firm Wellspring Capital Management LLC on July 31, 2020, hit a slew of its insurers with a suit in New York state court alleging they must defend it against claims that it plundered millions of dollars from gun seller United Sporting Cos. Inc., which blamed its bankruptcy on Donald Trump's win in the 2016 election. The New York City-based private equity firm is facing claims from the bankruptcy trustee for United Sporting's parent company SportCo Holdings Inc. that the directors and officers it put on United Sporting's board when it took over in 2008 siphoned off hundreds of millions of dollars from the Company. Wellspring Capital Management LLC operates as a private equity firm. About SportCo Holdings United Sporting Companies, Inc., was founded in 1933 under the name Ellett Brothers, Inc. before merging with Jerry's Sports, Inc., in 2009 and formally changing its name to United Sporting Companies, Inc. on July 16, 2010. Headquartered in Chapin, S.C., the companies are marketers and distributors of a broad line of products and accessories for hunting and shooting sports, marine, camping, archery, and other outdoor activities. The companies' product line of over 55,000 SKUs includes firearms, reloading, marine electronics, trolling motors, optics, cutlery, archery equipment, ammunition, leather goods, camping equipment, sportsman gifts, and a variety of other outdoor sporting goods products. The companies carry the major brands in the outdoor sports industry, including Remington, Ruger, Browning, Winchester, Smith & Wesson, Glock, Bushnell, Sig Sauer, Springfield Armory, Hornaday, Henry, Magpul, Armscor, MotorGuide, Minn Kota, Lowrance, Federal, CCI, Taurus, and Leupold. The companies employ 321 people. SportCo, a Delaware corporation, is a holding company with no business operations. SportCo Holdings, Inc. and its affiliates, including United Sporting Companies, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11299)on June 10, 2019. At the time of the filing, SportCo listed less than $50,000 and liabilities between $100 million and $500 million. The cases are assigned to Judge Laurie Selber Silverstein. The Debtors tapped McDermott Will & Emery LLP as their bankruptcy counsel; Polsinelli PC as local Delaware counsel; Winter Harbor LLC as restructuring advisor; BMC Group, Inc. as notice and claims agent; and Wilson Kibler, Inc., as real estate broker. Andrew Vara, acting U.S. trustee for Region 3, on June 17, 2019, appointed seven creditors to serve on the official committee of unsecured creditors in the Chapter 11 case. The Committee retained Lowenstein Sandler LLP, as counsel, and Morris James LLP, as co-counsel. STANLEY C. CHESTNUT: N Projects Buying Goldsboro Property for $125K ------------------------------------------------------------------- Stanley Claxton Chestnut asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to authorize the private sale of one parcel of real estate described as 709 NC 581 Hwy. S., Goldsboro, North Carolina, NC PIN 2670644527, consisting of .43 acres, more or less, and being more particularly described in that deed recorded Book 1259, Page 519, Wayne County Registry, to N Projects, LLC for $124,900, cash. The Debtor's Plan provides for the sale of the Property free and clear of all liens and interests, with such liens and interests attaching to the proceeds of sale. The Buyer has tendered an offer to purchase the Property in cash for $124,900. The Debtor proposes to accept said offer subject to the Court's approval. The private sale of the Property was negotiated and is being proposed in good faith, is in the best interest of the Estate, and is proposed for a sound business purpose. The offer represents a fair price for the Property based on current market conditions and the condition of the Property. Upon information and belief, these entities claim valid and enforceable liens or encumbrances against the Property: a. The Wayne County Tax Collector, by virtue of its statutory ad valorem tax lien (Claim No. 28 in the amount of $8,540). b. Select Bank & Trust Co., by virtue of that Deed of Trust recorded at Book 2921, Page 240, Wayne County Registry, on April 10, 2012 (Claim No. 23 in the amount of $488,055). c. Internal Revenue Service, by virtue of its statutory federal tax lien (Claim No. 5 in the amount of $395,327). The Debtor asks that the sale of the property be made free and clear of any and all liens, encumbrances, claims, rights and other interests. The liens, claims, and interests shall attach to the Net Proceeds of sale. The real estate agent employed by the Estate recommends acceptance of the Buyer's offer. The real estate agent, Beth Hines, employed by the Debtor post-confirmation, is entitled to a commission on the sale in the amount of $6,245, which is 5% of the gross sales proceeds. The proposed compensation is reasonable and the agent performed a necessary service which benefited the secured creditors. The compensation of the agent should be paid from the gross sales proceeds at closing. A copy of the Offer is available at https://tinyurl.com/y4379map from PacerMonitor.com free of charge. Stanley Claxton Chestnut sought Chapter 11 protection (Bankr. E.D. N.C. Case No. 19-00698) on Feb. 15, 2019. The Debtor tapped David F. Mills, Esq., as counsel. TOMMIE BROADWATER, JR: $412K Sale of DC Property to Green Approved ------------------------------------------------------------------ Judge Thomas J. Catliota of the U.S. Bankruptcy Court for the District of Maryland authorized Tommie Broadwater, Jr.'s sale of the real property located at 4324 Alabama Avenue, SE, Washington, DC, and Lots 3 and 4, to Diamonte Green for $412,050. The sale is free and clear of liens, claims, encumbrances, and interests. Wells Fargo Home Mortgage ("WF") consents to the closing on the Contract on the sale of the Property on Oct. 1, 2020 provided it receives all net proceeds after reasonable costs of closing such as broker commissions; real property taxes; transfer and recordation taxes, HOA liens, or front footer liens or other liens of record as may be reflected by the Report of Sale and WP will have a final CD for inspection and review no later than seven days prior to the closing as will the counsel to the Debtor from the settlement company, Worldwide Title containing such information which WF intends to rely as inducement for entering into the Consent Order. WF will retain a deficiency unsecured claim arising from the payoff sum of $452,973 on the lien against the Property as of Sept. 28, 2020, and any per diem increases thereto through Oct. 1, 2020 as the latest date closing may transpire, and WF's impaired claim is non-dischargeable by consent of the Debtor to the extent that the full amount of the POC/Amended POC is not paid pursuant to a confirmed Plan, regardless of any amendment/modification thereto and such secured portion of the WP claim will be paid from net proceeds (after reasonable broker fees/commissions and real property taxes/transfer taxes and HOA or front footer liens), and any resulting impaired deficiency unsecured claim will be paid in full pursuant to the Plan and is non-dischargeable by consent of the Debtor. WF will retain such deficiency claim against the Debtor for payment in full as an allowed unsecured claim, and otherwise will receive payment in full as a non-dischargeable claim against the Debtor by consent should the Chapter 11 fail in full administration of its anticipated Plan of Reorganization. The Debtor understands that his need to obtain a short sale from WF where there is alleged substantial equity in the remaining properties in the case and assets of the estate means that WF as a claimholder cannot consent to a short sale without payment in full of its deficiency claim. A Line of No Opposition must be filed to the Sale Motion by the Internal Revenue Service as requested in the Motion. The settlement agent Worldwide Settlements, Inc. will deliver to The Burns Law Firm, LLC a proposed final closing disclosure (HUD-1) no later than seven business days prior to any proposed closing, which will reflect the disbursements identified in the immediately following paragraph to be made by the settlement agent. After payment of allowed Broker commission; identified further reasonable closing costs from the CD referenced; the lien of record of WF (also known as US. Bank, NA) payable in the amount of all remaining net proceeds to the extent of its payoff as relayed in the Motion and the exhibit HUD-l to be provided by the settlement agent, the remaining proceeds of sale, if any (none anticipated), will be paid by check to the Debtor's counsel for distribution pursuant to further Court Order accompanied by a report of sale within two business days of the closing by the settlement agent. At any time within 60 days of closing on the sale, WF may amend its proof of claim to reflect any deficiency balance remaining after application of the net proceeds from the sale of the Property, and any such amended unsecured claim will be deemed to be a timely filed, allowed unsecured claim, subject to challenge on mathematical accuracy only. No other disbursements will be made at closing other than those identified by the settlement agent before all net funds are delivered to the Debtor's counsel within two business days following the sale closing. The stay provided for by Fed. R. Bankr. P. 6004(h) is waived. The Debtor will by the counsel upload a Report of Sale attaching the HUD-1 (closing disclosure) within 10 days from the date of the sale closing. If the Debtor's counsel does not receive the required proceeds and settlement sheet or closing disclosure (ie; HUD-1) within 90 days of the date of entry of the Order, the authority to sell granted by the Order will automatically terminate. Tommie Broadwater, Jr. sought Chapter 11 protection (Bankr. D. Md. Case No. 18-11460) on Feb. 2, 2018. The Debtor filed pro se. The Court appointed Theodore Meginson and M & M Real Estate Properties, L.L.C., as broker. TOWN SPORTS: Files for Chapter 11; Has 2 Loan Offers ---------------------------------------------------- On September 14, 2020, Town Sports International, LLC ("TSI LLC"), TSI Holdings II, LLC ("Holdings II") and certain subsidiaries of TSI LLC each filed voluntary petitions for relief under chapter 11, title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Debtors continue to operate their business as "debtors-in-possession" subject to the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. The Debtors are seeking approval of a variety of "first day" motions containing customary relief intended to permit the Debtors to continue their ordinary course operations, including by rejecting certain leases for club locations leased by the Debtors and by providing authority for the Debtors to use cash collateral to operate their business. Two DIP Financing Proposals The Debtors have received two separate proposals from certain of their prepetition lenders for the provision of debtor-in-possession financing, which the Debtors expect will be necessary to support the restructuring of the existing debt, existing equity interests in and certain other obligations of the Debtors, including the fees and costs incurred by the Debtors in connection with the Chapter 11 Cases. The first such proposal is from Kennedy Lewis Investment Management, LLC ("KLIM") and would provide the Debtors with an $80.0 million multi-draw senior secured super-priority debtor-in-possession credit facility ("KLIM DIP Facility"). KLIM would commit to provide the full amount of the KLIM DIP Facility, provided that each other lender under the Credit Agreement would have the opportunity to provide its pro rata share of $39.0 million of such DIP Facility. The KLIM DIP Facility would mature upon the earliest to occur of (i) the four month anniversary of the closing on such KLIM DIP Facility, (ii) the date that is 30 days after the Petition Date if a final order satisfactory to KLIM regarding the KLIM DIP Facility has not been entered by the Court on or before such date, (iii) the date of consummation of any sale of all or substantially all of the assets of any of the Debtors pursuant to section 363 of the Bankruptcy Code, (iv) the date on which the Court orders a conversion of any of the Chapter 11 Cases to a liquidation under chapter 7, title 11 of the Bankruptcy Code or the dismissal of any of the Chapter 11 Cases and (v) the effective date of any plan of reorganization of the Debtors subject to confirmation under section 1129(b)(2)(A)(iii) of the Bankruptcy Code. KLIM holds over forty-five percent of the total amount of debt owed by Debtors under the Credit Agreement, dated November 15, 2013, as amended (the "Credit Agreement"), by and among Holdings II, TSI LLC, as Borrower (as defined in the Credit Agreement), the Lenders party thereto and Deutsche Bank AG New York Branch as administrative agent. However the KLIM DIP Facility is conditioned on a consensual priming of the Debtors' prepetition secured debt which requires consent from a majority of the holders (the "Required Lenders") of debt owed by Debtors under the Credit Agreement. The KLIM DIP Facility does not currently have the support of the Required Lenders and, as a result, is not yet actionable. The second proposal is from Tacit Capital, LLC and an ad hoc group of certain lenders to the Debtors that have indicated that they own a majority of the total amount of debt owed by the Debtors under the Credit Agreement, and therefore would constitute the Required Lenders. The Tacit proposal is for a $17.5 million priming, super-priority, senior secured debtor-in-possession delayed-draw term loan facility (the "Tacit DIP Facility"), tied to a credit bid that provides for an additional $47.5 million of financing for the business following the Debtors’ exit from bankruptcy proceedings. The Tacit DIP Facility is also premised on a priming of the Debtors’ pre-petition lenders as well as a commitment by the Required Lenders to credit bid their debt. The Debtors believe that the lenders under the Credit Agreement will consent to provide debtor-in-possession financing, whether in substantially the form laid out in the KLIM proposal, the Tacit proposal or otherwise. However, given the financial pressures on the Debtors' operations, the Debtors determined it necessary to initiate the Chapter 11 Cases while discussions with its lenders to secure financing are ongoing. The Debtors intend to use cash on hand and cash from the results of operations to fund the working capital needs of the business prior to the entry of any order of the Court approving any debtor-in-possession financing facility. About Town Sports International Town Sports International Holdings, Inc. is a diversified holding company with subsidiaries engaged in a number of business and investment activities. The Company’s largest operating subsidiary has been involved in the fitness industry since 1973 and has grown to become one of the largest owners and operators of fitness clubs in the Northeast region of the United States. TSI’s corporate structure provides flexibility to make investments across a broad spectrum of industries in order to create long-term value for shareholders. TOWN SPORTS: S&P Cuts Term Loan Rating to 'D' on Bankruptcy Filing ------------------------------------------------------------------ S&P Global Ratings lowered its rating on Town Sports International Holdings Inc.'s senior secured term loan due in November 2020 to 'D' from 'CC'. The rating on the revolver remains 'D' following the company's failure to repay outstanding balances when due on Aug. 14, 2020. On Sept. 14, 2020, Town Sports International Holdings Inc.'s borrower subsidiary Town Sports International LLC filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. Despite the bankruptcy filing of the company's subsidiaries, S&P is raising the rating on parent company Town Sports International Holdings Inc. to 'CC' from 'SD' (selective default) because the entity was not included in the bankruptcy filing. Following the bankruptcy filing, S&P lowered the rating on the company's senior secured term loan due in November 2020 to 'D' from 'CC'. This debt had a balance of $153 million, according to the 8-K the company filed on Sept. 14, 2020. Despite the bankruptcy filing of the subsidiaries, S&P is raising the issuer credit rating on the holding company to 'CC' from 'SD' because the company has no longer selectively defaulted on its obligations; it has comprehensively defaulted through the bankruptcy filing of its material subsidiaries. The Town Sports International Holdings Inc. legal entity was not filed into bankruptcy, so S&P did not lower its rating to 'D'. However, the 'CC' issuer rating on the holding company is the lowest rating possible other than 'D' and 'SD'. The outlook is negative. The rating and outlook reflect the material impairment in near-term financial prospects of its bankrupt subsidiaries' operations. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety TOWNHOUSE HOTEL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Townhouse Hotel LLC 150 20th Street Miami Beach, FL 33139 Business Description: Townhouse Hotel LLC Chapter 11 Petition Date: September 16, 2020 Court: United States Bankruptcy Court Southern District of Florida Case No.: 20-19997 Judge: Hon. Robert A. Mark Debtor's Counsel: Scott Alan Orth, Esq. LAW OFFICES OF SCOTT ALAN ORTH, P.A. 3860 Sheridan Street. Suite A Hollywood, FL 33021 Tel: 305-757-3300 Email: scott@orthlawoffice.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Abraham Kramer, manager of G & A Miami LLC, managerof Townhouse Hotel LLC. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/YDGCGTQ/Townhouse_Hotel_LLC__flsbke-20-19997__0001.0.pdf?mcid=tGE4TAMA TRANSOCEAN LTD: S&P Affirms 'SD' Issuer Credit Rating ----------------------------------------------------- S&P Global Ratings affirmed the 'SD' (selective default) issuer credit rating on Transocean Ltd. S&P lowered the issue-level ratings on the unsecured debt being exchanged to 'D' from 'CCC+'(on the unsecured debt with subsidiary guarantees) and to 'D' from 'CCC' (on the unsecured debt without subsidiary guarantees) and removed them from CreditWatch, where S&P placed them with negative implications on Aug. 12, 2020. "We are assigning a 'CCC' issue-level rating and '2' recovery rating to the new 11.5% notes due in 2027. We are placing the 'B-' issue-level ratings on Transocean's secured debt on CreditWatch with negative implications, based on our view that we will likely raise the issuer credit rating to 'CCC-' following completion of the exchanges," S&P said. The issuer credit rating on Transocean Ltd. remains 'SD', reflecting the exchange of a portion of nearly all of its senior unsecured debt issues at 37.5%-82.5% of par for new 11.5% unsecured notes due in 2027. S&P views the exchanges as distressed because they offer debtholders significantly less than the original promise on the securities and because Transocean has unsustainable leverage and faces an onerous near-term maturity schedule, and therefore tantamount to default. S&P lowered the issue-level ratings on the following debt to 'D' and removed them from CreditWatch negative: -- 6.375% senior notes due in 2021 to 'D' from 'CCC' -- 3.8% senior notes due in 2022 to 'D' from 'CCC' -- 7.25% senior notes due in 2025 (with subsidiary guarantees) to 'D' from 'CCC+' -- 7.5% senior notes due in 2026 (with subsidiary guarantees) to 'D' from 'CCC+' -- 8% senior notes due in 2027 (with subsidiary guarantees) to 'D' from 'CCC+' -- 8% debentures due in 2027 to 'D' from 'CCC' -- 7.45% notes due in 2027 to 'D' from 'CCC' -- 7% senior notes due in 2028, issued by Global Marine Inc. to 'D' from 'CCC' -- 7.5% senior notes due in 2031 to 'D' from 'CCC' -- 6.8% senior notes due in 2038 to 'D' from 'CCC' -- 7.35% senior notes due in 2041 to 'D' from 'CCC' The company's secured debt issues and its 6.5% unsecured notes due 2020 were not involved in the exchanges. S&P affirmed its 'B-' issue-level ratings on Transocean's secured notes and its 'CCC' rating on the unsecured notes due in 2020, and is placing them on CreditWatch with negative implications. At the same time, S&P rated the company's new $688 million 11.5% notes due in 2027 'CCC' with a '2' recovery rating. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default. "Following completion of the exchange offers, we expect to resolve all CreditWatch listings and raise the issuer credit rating on Transocean to 'CCC-' with a negative outlook. This reflects our expectation that Transocean will likely pursue further debt exchanges or a restructuring we would consider tantamount to default," S&P said. TTBGM INC: Unsecured Creditors to Recover 100% Over 5 Years ----------------------------------------------------------- TTBGM, Inc. filed with the U.S. Bankruptcy Court for the Central District of California (Riverside) a Chapter 11 Plan of Reorganization and a Disclosure Statement on Aug. 4, 2020. Through this reorganizing Plan, the Debtor seeks to accomplish payments under the Plan by restructuring notes held by Byline Bank and Peer Street and secured by real property of the estate. The secured creditors of the estate shall be paid the present value of their claim at a market interest rate over a sixty-month period for Peer Street and through December 27, 2042 for Byline Bank Note. Payments under the Plan shall be made through net income generated from the TTBGM, Inc Real Property and/or through a sale or refinance of the TTBGM, Inc Real Property. The Effective Date of the proposed Plan is projected to be January 15, 2021. The first payment due under the plan is based upon the projected Effective Date is January 15, 2021. The Plan will be implemented through the following means: * The Manager of the Debtor, Tom Brown, will provide oversight and assistance in the operation of the Debtor's business and day-to-day management decisions. The Debtor will work to lease, refinance and or sell the TTBGM, Inc Real Properties providing funds for the payment of creditors. * The proceeds from net income resultant from the leasing of or the sale/refinance of the TTBGM, Inc Real Properties will be used to fund the payments to both Secured and Unsecured Creditors provided for under the Plan. Class 3 General Unsecured Creditors are impaired under the Plan. On or before the Effective Date, the Debtor shall execute a promissory note with each holder of a Class 3 Claim calling for bi-annual equal to 1.25% of the principal balance, totaling an 2.5% annual principal reduction payment. No interest shall accrue on the promissory Note. Claim will be paid over 60 months on 100% of a principal balance of $4,700,000. In the event funds are not sufficient to pay the Class 3 Claimants upon any sale of the TTBGM, Inc Real Property or other assets, the Class 3 Claimants shall receive a pro-rata share of the funds available by dividing the total amount of money each Class 3 Claimants claims and multiplying that percentage by the amount of money available to pay the Class 3 Claimants after sale of the TTBGM, Inc Property. Class 4 Interest holder Tom Brown is unimpaired under the Plan and will receive the pro-rata share of monies available after payment under the plan to classes 1 through 3. The Reorganized Debtor shall make all payments due under the Plan out of the funds on hand in the Debtor’s Estate as of the Effective Date, and through the lease Income generated by the TTBGM, Inc Real Property as well as through the eventual sale or refinance of the TTBGM, Inc Real Property. A full-text copy of the Disclosure Statement dated August 4, 2020, is available at https://tinyurl.com/y4jlfdzm from PacerMonitor.com at no charge. Attorney for Debtor: Thomas Corcovelos CORCOVELOS LAW GROUP 1001 Sixth Street, Suite 150, Manhattan Beach, California 90266-6750 Telephone: (310) 374-0116 Telecopier: 310-318-3832 TTBGM, Inc. TTBGM, Inc., is a California S corporation that was formed in November 2013 for the management and leasing of the golf course that abuts the Trilogy Real Property. TTBGM, Inc., filed Chapter 11 Petition (Bankr. C.D. Cal. Case No.: 20-13005) on April 27, 2020. At the time of filing, Debtor has $1 million to $10 million estimated assets and liabilities. The Hon. Wayne E. Johnson oversees the case. Thomas Corcovelos, Esq. of the CORCOVELOS LAW GROUP is the Debtor's counsel. UBER TECHNOLOGIES: S&P Rates New Unsecured Notes 'CCC+' ------------------------------------------------------- S&P Global Ratings assigned its 'CCC+' issue-level and '5' recovery ratings to San Francisco-based mobility and delivery platform provider Uber Technologies Inc.'s new unsecured notes, the same as the ratings on the company's existing unsecured debt. Uber plans to use the proceeds to redeem the $500 million outstanding on its unsecured notes due 2023. S&P's 'B-' issuer credit rating and stable outlook are unchanged. Despite the fact that COVID-19 has significantly affected mobility bookings, we believe offsetting factors will allow Uber to sustain its capital structure." The company has reduced customer support and recruiting staff to align with market demand. It also consolidated some discretionary investments, divesting its bikes and scooters business to Lime and discontinuing Uber Eats in certain markets. Uber had $7.8 billion in unrestricted cash and equivalents at June 30, 2020, equity stakes with a book value of $9.4 billion, and an undrawn $2.3 billion revolving credit facility due in 2023, which S&P believes provide ample liquidity to bridge the next several quarters until cash burn is more manageable. S&P expects cash flow deficits around $4 billion in 2020, narrowing to around $2 billion next year, which the rating agency considers manageable. It believes quarterly EBITDA will approach break-even in mid- to late 2021. The rides business shows early signs of recovery, with bookings down about 50% year over year in July compared to 75% in the second quarter. "We expect quarterly mobility EBITDA will again cover unallocated corporate expenses in the first half of 2021. Delivery demand is surging, allowing EBITDA loss margin to narrow. We think the current macroeconomic environment could be a catalyst for price competition to ease more quickly and permanently in both mobility and delivery," S&P said. ULTRA PETROLEUM: Ch. 11 Plan Undervalues Company, Say Creditors --------------------------------------------------------------- Law360 reports that the unsecured creditors of natural gas producer Ultra Petroleum Corp. have asked a Texas bankruptcy judge to reject the company's Chapter 11 plan, saying it undervalues the company and therefore cuts the money available to creditors by at least $475 million. In a motion filed August 1, 2020, the unsecured creditors committee said the valuation by Ultra investment banker Centerview Partners was "low and flawed," and would both unfairly cram down unsecured claims while bringing a windfall for Ultra's term lenders. About Ultra Petroleum Corp. Ultra Petroleum Corp., an independent oil and gas company, engages in the acquisition, exploration, development, operation, and production of oil and natural gas properties. Its principal business activities are developing its natural gas reserves in the Green River Basin of southwest Wyoming, the Pinedale and Jonah fields. The company was founded in 1979 and is headquartered in Englewood, Colorado. Ultra Petroleum Corp. and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14, 2020. The Debtor disclosed total assets of $1,450,000,000 and total debt of $2,560,000,000 as of March 31, 2020. The Hon. Marvin Isgur is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER LLP as local bankruptcy counsel; CENTERVIEW PARTNERS LLC as investment banker; and FTI CONSULTING, INC. as financial advisor. Prime Clerk LLC is the claims agent. ULTRA PETROLEUM: Equity Group Questions Plan Releases ----------------------------------------------------- The ad hoc Group of Equity Interest Holders, as holders of Interests in Ultra Petroleum Corp. and its debtor affiliates, objects to the Joint Chapter 11 Plan of Reorganization of the Debtors. The Ad Hoc Equity Group files this separate Plan Objection with respect to the release provisions contained in Article VIII of the Plan. Despite the breadth of the Third Party Releases, there is no discussion in the Disclosure Statement concerning the nature of claims against any of the Released Parties/Exculpated Parties. The Ad Hoc Equity Group claims that Third Party Releases are not provided voluntarily by holders of Interests, but rather are imposed upon them through Plan confirmation. As such, the Third Party Releases (and the inclusive Non-Debtor Protections) are fatally flawed. The Court should deny confirmation of the Plan. The Ad Hoc Equity Group asserts that the lack of consideration to Class 10 also reinforces the impropriety of inferring consent of Class 10 members based on inaction: It is highly implausible that any reasonable, fully informed holder of Interests would ever voluntarily relinquish its independent, direct claims against non-debtor defendants in exchange for nothing. The Ad Hoc Equity Group points out that the Plan Injunction seeks to permanently enjoin all Entities from pursuing Released Claims against Released Parties or Exculpated Parties. Because the Plan Injunction enjoins actions against non-debtors, it violates Section 524(e) of the Bankruptcy Code and Fifth Circuit law. A full-text copy of the ad hoc Group of Equity Interest Holders' objection dated July 31, 2020, is available at https://tinyurl.com/yyopkqpn from PacerMonitor at no charge. Attorneys for the Ad Hoc Equity Group: McCARTER & ENGLISH, LLP David J. Adler 825 8th Avenue 31st Floor New York, New York 10019 Tel: (212) 609-6800 E-mail: dadler@mccarter.com About Ultra Petroleum Ultra Petroleum Corp., an independent oil and gas company, engages in the acquisition, exploration, development, operation, and production of oil and natural gas properties. Its principal business activities are developing its natural gas reserves in the Green River Basin of southwest Wyoming, the Pinedale and Jonah fields. The company was founded in 1979 and is headquartered in Englewood, Colorado. Ultra Petroleum Corp. and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14, 2020. The Debtor disclosed total assets of $1,450,000,000 and total debt of $2,560,000,000 as of March 31, 2020. The Hon. Marvin Isgur is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER LLP as local bankruptcy counsel; CENTERVIEW PARTNERS LLC as investment banker; and FTI CONSULTING, INC. as financial advisor. Prime Clerk LLC is the claims agent. USF COLLECTIONS: Sept. 17 Hearing on Postpetition Accounts Sale --------------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York will convene a telephonic preliminary hearing through CourtSolutions on Sept. 17, 2020 at 11:00 a.m. (EST) to consider USF Collections. Inc.'s request for orders authorizing it to sell post-petition accounts, obtain secured financing, use cash collateral, and granting adequate protection in connection therewith, and other related relief, to enable it to continue the operation of its business. The Debtor's secured creditors, its 20 largest unsecured creditors, the United States Trustee and all parties having in interest in the Debtor's property, will show cause before the Preliminary Hearing, or as soon thereafter as the counsel can be heard, why an order should not be made and entered, preliminarily authorizing the Debtor to sell post-petition accounts, obtain secured financing, use cash collateral, and granting adequate protection in connection therewith, all in accordance with the DIP Budget , to avoid immediate and irreparable harm, on a preliminary basis pending a final hearing. They will also show cause at a Final Hearing, on a date to be determined at the Preliminary Hearing, why an order should not be made and entered, authorizing the Debtor to sell post-petition accounts, obtain secured financing, use cash collateral, and granting adequate protection in connection therewith, all in accordance with the DIP Budget; and whatever other relief the Court deems necessary, appropriate and proper. The objection deadline is Sept. 16, 2020 at 4:00 p.m. (EST). A copy of the Order, the Motion, and exhibits thereto, must be served upon the Debtor's secured creditors, its 20 largest unsecured creditors, the United States Trustee, all parties who have filed notices of appearance, and all parties having an interest in the Debtor's property, no later than Sept. 14, 2020. The requirement of filing a Memorandum of Law in support of the Motion pursuant to Local Rule 9013-1(b) is dispensed with and waived. About USF Collections USF Collections Inc. is an importer and wholesaler of apparel and accessories. USF Collections Inc. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-12085) on Sept. 8, 2020. In the petition signed by Ranjit Khanna, president, the Debtor had total assets of $1,289,276 and $2,396,650 in debt as of Dec. 31, 2019. The Debtor tapped Gilbert A. Lazarus, Esq., at Law Office of Gilbert A. Lazarus, PLLC, as counsel. V.S. INVESTMENT: McBride Buying Seattle Property for $750K ---------------------------------------------------------- V.S. Investment Assoc., LLC, asks the U.S. Bankruptcy Court for the Western District of Washington to authorize the sale of the real property located at 2465 S College Street, Seattle, Washington to Charlene McBride and/or assigns for $749,950. The Debtor listed an ownership interest in the property. It engaged the services of Shawn Perry with Windemere Real Estate North, Inc. to list the property for sale. On Aug. 23, 2020, an offer to purchase the property for $749,950 was received. The offer is $124,950 higher than any previous offer. The present offer is the highest and best offer received. The subject property is one of a four-unit real estate development project listed on the Debtor's Schedule A/B at an estimated $3.6 million. All the four units are encumbered by liens in these priority and amounts: Creditor Recording Date Approx Amount Due BRMK Lending, LLC 4/21/2016 $4,236,396 Paul Greben 1/16/2020 $598,500 1/21/2020 amended Ecocline Exc. & 1/30/2020 $137,205 Utilities LLC The Debtor asks authority to pay the first position Deed of Trust of BRMK Lending, LLC, successor by merger to PBRELF I, LLC all remaining proceeds after costs of closing, including real estate commissions, taxes, United States Trustee fees and other closing costs, as satisfaction of its lien against this property. Finally, it asks waiver of the 14-day period under Bankruptcy Rule 6004(h). A telephonic hearing on the Motion is set for Sept. 18, 2020 at 9:30 a.m. The objection deadline is Sept. 11, 2020. About V.S. Investment V S Investment Assoc LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-11541) on May 29, 2020. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. Judge Christopher M. Alston oversees the case. The Debtor has tapped Bountiful Law, PLLC, as its legal counsel. VERITY HEALTH: Prospect Lacks Standing to Oppose Sale, Court Says ----------------------------------------------------------------- Bankruptcy Judge Ernest M. Robles held that Prospect Medical Holdings, Inc. lacks standing to oppose Debtors Verity Health System of California, Inc. and affiliates' Emergency Motion for the Entry of an Order (I) Enforcing the Order Authorizing the Sale to Prime Healthcare Services, Inc.; (II) Finding that the Sale is Free and Clear of Additional Conditions; (III) Finding that the Attorney General Abused His Discretion in Imposing Additional Conditions on the St. Francis Medical Center Sale. Judge Robles had stricken the opposition from the record. On Feb. 26, 2020, the Court entered an order establishing bidding procedures for the sale of assets pertaining to St. Francis Medical Center. Parties interested in acquiring St. Francis were required to submit a bid by April 3, 2020, at 5:00 p.m. Prospect received notice of the Bidding Procedures Order but did not timely submit a bid. Other than the Stalking Horse Bid submitted by Prime Healthcare Services, Inc., the Debtors did not receive any Qualified Bids for the purchase of St. Francis. On April 9, 2020, the Court issued a ruling finding that the Debtors had properly designated Prime as the Winning Bidder pursuant to the Bidding Procedures Order and that the Debtors were authorized to sell St. Francis to Prime. The Ruling found that St. Francis had been adequately marketed. On April 9, 2020, the Court entered an order memorializing the findings set forth in the Ruling. Among other things, the Sale Order found that Prime's bid for St. Francis was the highest and best bid received, and that the transfer of St. Francis to Prime would "provide a greater recovery for the Debtors' estates than would be provided by any other available alternative." The sale of St. Francis to Prime was projected to close on or before August 22, 2020. By the Motion, the Debtors sought authorization to sell St. Francis free and clear of regulatory conditions which the California Attorney General claims authority to impose under Cal. Corp. Code section 5914. Prospect opposed the Motion. Prospect stated that it is prepared to purchase St. Francis on terms superior to the Prime Sale, and that it is willing to accept all of the AG Conditions. Prospect stated that it did not submit a bid because of uncertainties arising from the COVID-19 pandemic. Prospect asserted that granting the Motion would sanction an inherently unfair sale transaction in the face of a higher and better alternative. According to Judge Robles, Prospect was fully aware of the deadline to submit a bid for St. Francis, but made a business decision not to participate in the auction. Having chosen not to submit a bid, Prospect lacks standing to oppose future matters pertaining to the approval of the Prime Sale, including the Motion. Judge Robles also said that Prospect's reliance upon In re Family Christian, LLC, 533 B.R. 600, 621 (Bankr. W.D. Mich. 2015) for the proposition that it does have standing is unavailing. In Family Christian, the second highest bidder alleged that the sale process had been rigged for the benefit of the winning bidder. The court held that the disappointed bidder had standing because (1) it was challenging the fairness of the sale process and (2) it had a pecuniary interest in the sale resulting from an administrative claim it had purchased. Judge Robles added that Family Christian is inapposite because Prospect did not participate in the auction or the Bidding Procedures Motion. Prospect could have appeared at the hearing on the Bidding Procedures Motion and presented its argument that a delay in the auction was warranted given the COVID-19 pandemic. It chose not to do so. The Opposition -- filed shortly before the Prime Sale is projected to close -- is the first time that Prospect has appeared before the Court. To have standing to challenge the sale on fairness grounds, Prospect was required to, at the very minimum, actually participate in the auction or the Bidding Procedures Motion. Its failure to do so precludes it from objecting at this late date. Further, Prospect's contention that the auction was unfair, because it took place in the midst of the COVID-19 pandemic, is entirely without merit. Prospect ignored the fact that the estates' financial position did not afford the Debtors the luxury of postponing the auction. Because the Prime Sale is subject to review by the Attorney General under Cal. Corp. Code section 5914 et seq., the sale could not close until approximately four months after entry of the Sale Order. That meant that the Debtors were required to schedule the auction while they still had enough cash to sustain roughly four months of operations at St. Francis -- a daunting task given that between April 26, 2020 and July 11, 2020, the Debtors' cash burn rate was $700,000 per day. Subsequent events have vindicated the Debtors' decision to proceed with the auction in early April. Current projections indicate that unsecured creditors will receive $8.1 million, or only approximately 0.5% of their claims. Given the size of this case, the margin between a distribution to unsecured creditors and administrative insolvency is razor-thin. Had the auction been delayed, there is a substantial probability that the estates would become administratively insolvent. Therefore, the Debtors' decision to proceed with the auction when they did was in the best interest of creditors. The case is in re: Verity Health System of California, Inc. et al., Chapter: 11, Debtors and Debtors in Possession. [x] All Debtors [] Affects Verity Health System of California, Inc. [] Affects O'Connor Hospital [] Affects Saint Louise Regional Hospital [] Affects St. Francis Medical Center [] Affects St. Vincent Medical Center [] Affects Seton Medical Center [] Affects O'Connor Hospital Foundation [] Affects Saint Louise Regional Hospital Foundation [] Affects St. Francis Medical Center of Lynwood Medical Foundation [] Affects St. Vincent Foundation [] Affects St. Vincent Dialysis Center, Inc. [] Affects Seton Medical Center Foundation [] Affects Verity Business Services [] Affects Verity Medical Foundation [] Affects Verity Holdings, LLC [] Affects De Paul Ventures, LLC [] Affects De Paul Ventures — San Jose Dialysis, LLC, Debtors and Debtors in Possession, Jointly Administered With Case No. 2:18-bk-20162-ER, Case No. 2:18-bk-20163-ER., 2:18-bk-20164-ER, 2:18-bk-20165-ER, 2:18-bk-20167-ER, 2:18-bk-20168-ER, 2:18-bk-20169-ER, 2:18-bk-20171-ER, 2:18-bk-20172-ER, 2:18-bk-20173-ER, 2:18-bk-20175-ER, 2:18-bk-20176-ER, 2:18-bk-20178-ER, 2:18-bk-20179-ER, 2:18-bk-20180-ER, 2:18-bk-20181-ER (Bankr. C.D. Cal.). A copy of the Court's Memorandum of Decision dated August 7, 2020 is available at https://bit.ly/2QMZczi from Leagle.com. About Verity Health Systems Verity Health System -- https://www.verity.org/ -- operates as a non-profit health care system in the state of California, with approximately 1,680 inpatient beds, six active emergency rooms, a trauma center, and a host of medical specialties, including tertiary and quaternary care. Verity's two Southern California hospitals are St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles. In Northern California, O'Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach are part of Verity Health. Verity Health also includes Verity Medical Foundation. With more than 100 primary care and specialty physicians, VMF offers medical, surgical and related healthcare services for people of all ages at community-based, multi-specialty clinics conveniently located in areas served by the Verity hospitals. Verity Health System was created in a transaction approved by California Attorney General Kamala Harris and completed in December 2015. Verity Health System of California, Inc., and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition signed by CEO Richard Adcock, Verity Health was estimated to have assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Ernest M. Robles oversees the cases. The Debtors tapped Dentons US LLP as their bankruptcy counsel; Berkeley Research Group, LLC, as financial advisor; Cain Brothers as investment banker; and Kurtzman Carson Consultants as claims agent. The official committee of unsecured creditors formed in the case retained Milbank, Tweed, Hadley & McCloy LLP as counsel. WALDEN PALMS: Selling 4 Orlando Condo Units for $154K ----------------------------------------------------- Walden Palms Condominium Association, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida to authorize the sale of four residential condominium units: (i) Units 815, 1034, and 1534 to Waldar, LLC for $115,918; and (ii) Unit 213 to Douglas Rouillard for $38,000. The Units are more particularly described as: a. 4772 Walden Circle, Unit 213, Orlando, FL 32811-7242 [PIN 1723298957-02130] for $38,000; b. 4748 Walden Circle, Unit 815, Orlando, FL 32811-7242 [PIN 1723298957-08150] for $44,256; c. 4740 Walden Circle, Unit 1034, Orlando, FL 32811-7242 [PIN 1723298957-10340] for $40,148; and d. 4724 Walden Circle, Unit 1534, Orlando, FL 32811-7242 [PIN 1723298957-15340] for $31,515; On July 2, 2020, the Court entered an order approving the sale of six residential units within the Debtor's condominium complex free and clear of liens, claims and encumbrances. After entry of the July 2 Order, the Debtor learned that parties with junior interests in three of those units (Units 815, 1034 and 1534) may not have had their interests properly extinguished via the prior foreclosure. The first is GMAC Mortgage, LLC, which may potentially have an interest in Unit 815 by way of a "rouge" Assignment of Mortgage that appears to have been recorded outside the chain of title. The second is Alvaro Gorrin Ramos, a judgment creditor of the former owner of Unit 1034 with a junior interest who, through inadvertence, was not named in the Debtor's foreclosure lawsuit. The third is Deutche Bank National Trust, which held both a first and second mortgage on Unit 1534 (in its capacity as nominee for two different hedge funds). Although Deutsche Bank was provided with notice of the Plan Unit Motion, it was identified in the Debtor's foreclosure lawsuit in its capacity as nominee for the first mortgagee and therefore, its second mortgage position may not have been properly extinguished. Because those parties were not provided with notice of the Debtor's prior motion, the Motion is being filed to provide such parties with notice of the proposed sale of those units. Unit 213 was previously owned by the same person that owned Unit 1534 (to wit, Alex Rivera) and it is subject to virtually the same liens, claims and encumbrances as that Unit, which are held by the same parties. Specifically, Deutsche Bank holds both a first and second mortgage on Unit 213, in its capacity as "trustee" for two different hedge funds. The first mortgage has a face amount of $102,300, while the second mortgage has a face amount of $12,800. From public records, it appears that neither mortgage has been paid for over a decade and the Secured Lender(s) have abandoned their secured interests in the Unit. Notice of the proposed sale is being provided to Deutsche Bank in its capacity as trustee for both the first and second position certificate/bond holders. Unit 213 is also subject to a Notice of Federal Tax Lien dated June 14, 2016, in favor of the Internal Revenue Service in the amount of $49,523 with respect to federal income taxes claimed due from Mr. Rivera. The Debtor has attempted, unsuccessfully, to contact the IRS to determine its position with respect to the sale of Unit 213 free and clear of the Tax Lien. By the Motion, the Debtor also asks authorization to sell another unit (Unit 213), to which it took title via foreclosure sale on July 15, 2020. The Subject Units are also subject to a perfected security interest in favor of the City of Orlando in connection with liens in connection with various building code violations. Based on the Proofs of Claims filed by the City, it is estimated that each Subject Unit is encumbered by City Liens of at least $17,000. The Buyer(s) intend(s) to take title to the Subject Units subject to the City Liens but may, at its/their sole discretion, satisfy the portion of the City Liens applicable to the Subject Units after closing. The Debtor believes the offers are the highest and best offer it has received for the Subject Units and are in line with current market prices for similarly situated properties in the area. It is especially true given the anticipated decline in fair market value (and overall marketability) of such Subject Units as a result of the COVID-19 outbreak. Accordingly, the Debtor respectfully asks the Court approves the sale of the Subject Units free and clear of all liens, claims and encumbrances (except as otherwise stated) and upon the terms set forth. It also asks the Court approves payment of all Tax Claims and other normal closing costs at closing. A copy of the Contracts is available at https://tinyurl.com/y2f5vdfv from PacerMonitor.com free of charge. About Walden Palms Condominium Association Walden Palms Condominium Association, Inc., is a nonprofit property management company in Orlando, Florida. Walden Palms Condominium Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-07945) on Dec. 24, 2018. At the time of the filing, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of $10 million to $50 million. The case is assigned to Judge Cynthia C. Jackson. The Debtor tapped Shapiro, Blasi, Wasserman & Hermann, P.A., as its bankruptcy counsel; Arias Bosinger PLLC as general association counsel; JD Law Firm; as collections & foreclosure counsel; and Winderweedle, Haines, Ward & Woodman, P.A., as land use counsel. WHITING PETROLEUM: Has Cut Jobs by 16%, Reduces Executives' Pay --------------------------------------------------------------- Carl Surran of Seeking Alpha reports that Whiting Petroleum (NYSE:WLL) says it has reduced its total workforce by 16%, mostly corporate positions, as part of implementing a new corporate structure. Whiting also is reducing the compensation of its officers by 15% to 20% and initiating salary reductions across a broad group of employees. The company says it expects to generate approximately $20 million in annual cost savings from the moves. Whiting also revises guidance for H2, forecasting production of 88,000 to 92,000 boe/day (60% oil) and capital spending of $34 million to $39 million. Whiting exited Chapter 11 bankruptcy at the beginning of this month, leaving existing shareholders with just one share of the reorganized company's new common stock for every ~75 shares previously owned. About Whiting Petroleum Corp. Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. [*] 500 U.S. Companies Have Filed for Bankruptcy Due to COVID-19 ---------------------------------------------------------------- AZ Big Media reports, citing data analytics firm GlobalData, that amid the financial and economic crisis triggered by COVID-19, around 500 businesses have filed for bankruptcy since March 2020 and the trend is only set to persist in the coming months, says GlobalData, a leading data analytics company. Bindi Patel, Economic Research Analyst at GlobalData, says: "An increasing number of US companies are filing for bankruptcy. Various businesses continue to be disrupted, and all companies -- whether big, small or medium-sized enterprises – are feeling the strain. Despite the government's stimulus measures, and the US economy experiencing a further slowdown in recovery, many of these businesses are likely to permanently shut shop." "With businesses shutting down and consequently job growth showing a slowdown, on top of a stoppage of unemployment benefits, consumer spending is bound to be heavily impacted in the months to follow." Some of the largest companies that went bankrupt in the US are JC Penney, which filed for Chapter 11 bankruptcy on May 15 stating it would close 30% of its store base; gym chain 24 Hour Fitness filed for Chapter 11 bankruptcy on June 14, stating it would permanently close down more than 130 gyms; and WorldStrides, a travel company that helps organize educational trips for around thousands of students, which filed for Chapter 11 bankruptcy on July 20. Patel concludes: "Although the US Government's stimulus measures may be helpful to a certain extent, it might not be enough to prevent further bankruptcy filings in the near future. Although the government has eased down on lockdowns and certain social distancing measures, many Americans are still hesitant to go to malls or restaurants in the fear of contracting the virus." "If the pandemic is not controlled, it will not only continue to dampen the US economy as a whole, but the filing of increasing number of bankruptcy cases, revival of businesses and increase in consumer spending will be huge challenges to address for the months to come." [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re TWNS 2007 Inc Bankr. C.D. Cal. Case No. 20-18243 Chapter 11 Petition filed September 9, 2020 See https://www.pacermonitor.com/view/2BR2GRA/TWNS_2007_Inc__cacbke-20-18243__0001.0.pdf?mcid=tGE4TAMA represented by: Joshua R. Engle, Esq. TRAN & ENGLE LAW, APC E-mail: josh@tran-engle-law.com In re Sheila Coffin Harshman Bankr. D. Mass. Case No. 20-11843 Chapter 11 Petition filed September 9, 2020 represented by: David Madoff, Esq. MADOFF & KHOURY LLP E-mail: madoff@mandkllp.com In re Alexandre Catteau Bankr. E.D.N.Y. Case No. 20-43260 Chapter 11 Petition filed September 9, 2020 represented by: Lawrence Morrison, Esq. In re Alain Denneulin Bankr. E.D.N.Y. Case No. 20-43261 Chapter 11 Petition filed September 9, 2020 represented by: Lawrence Morrison, Esq. In re Samuel Festinger Bankr. E.D.N.Y. Case No. 20-43272 Involuntary Chapter 11 Petition filed September 9, 2020 In re Charnie Rosenbaum Bankr. E.D.N.Y. Case No. 20-43271 Involuntary Chapter 11 Petition filed September 9, 2020 In re Tracy Aaron Malone Bankr. D. Oregon Case No. 20-62104 Chapter 11 Petition filed September 9, 2020 represented by: Keith Boyd, Esq. In re SNL Williamson Group, LLC Bankr. E.D. Pa. Case No. 20-13633 Chapter 11 Petition filed September 9, 2020 See https://www.pacermonitor.com/view/3FERDKI/SNL_Williamson_Group_LLC__paebke-20-13633__0001.0.pdf?mcid=tGE4TAMA represented by: John A. DiGiamberardino, Esq. CASE & DIGIAMBERARDINO, P.C. In re Willie C. Bryant and Betty J. Bryant Bankr. M.D. Ala. Case No. 20-11126 Chapter 11 Petition filed September 10, 2020 represented by: Kaz J Espy, Esq. Collier H. Espy, Jr., Esq. In re Altra Mortgage Capital LLC Bankr. C.D. Cal. Case No. 20-11653 Chapter 11 Petition filed September 10, 2020 See https://www.pacermonitor.com/view/D3SL3FI/Altra_Mortgage_Capital_LLC__cacbke-20-11653__0001.0.pdf?mcid=tGE4TAMA represented by: Michael J. Berger, Esq. LAW OFFICES OF MICHAEL JAY BERGER E-mail: michael.berger@bankruptcy power.com In re Accessorama, LLC Bankr. S.D. Fla. Case No. 20-19840 Chapter 11 Petition filed September 10, 2020 See https://www.pacermonitor.com/view/OXRIF4I/Accessorama_LLC__flsbke-20-19840__0001.0.pdf?mcid=tGE4TAMA represented by: Brian S. Behar, Esq. BEHAR, GUTT & GLASER, P.A. E-mail: bsb@bgglaw.com In re Karl P. Scheufler Bankr. D.N.J. Case No. 20-20443 Chapter 11 Petition filed September 10, 2020 In re Shree Madhav Laundry, LLC Bankr. D.N.J. Case No. 20-20449 Chapter 11 Petition filed September 10, 2020 See https://www.pacermonitor.com/view/X4HDC6I/Shree_Madhav_Laundry_LLC__njbke-20-20449__0001.0.pdf?mcid=tGE4TAMA represented by: Andrew J. Kelly, Esq. THE KELLY FIRM, P.C. E-mail: akelly@kbtlaw.com In re Radio Cantico Nuevo, Inc. Bankr. E.D.N.Y. Case No. 20-43281 Chapter 11 Petition filed September 10, 2020 See https://www.pacermonitor.com/view/AMGOXOI/Radio_Cantico_Nuevo_Inc__nyebke-20-43281__0001.0.pdf?mcid=tGE4TAMA represented by: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. E-mail: alla@kachanlaw.com In re Enchanted Acres Farm, Inc. Bankr. E.D. Pa. Case No. 20-13639 Chapter 11 Petition filed September 10, 2020 See https://www.pacermonitor.com/view/S2VCEBA/Enchanted_Acres_Farm_Inc__paebke-20-13639__0001.0.pdf?mcid=tGE4TAMA represented by: George M. Lutz, Esq. HARTMAN, VALERIANO, MAGOVERN & LUTZ, P.C. E-mail: glutz@hvmllaw.com In re Eugene Uritsky Bankr. E.D. Pa. Case No. 20-13659 Chapter 11 Petition filed September 10, 2020 represented by: Erik Jensen, Esq. In re Philadelphia School of Massage & Bodywork Inc. Bankr. E.D. Pa. Case No. 20-13642 Chapter 11 Petition filed September 10, 2020 See https://www.pacermonitor.com/view/G4FL2OQ/PHILADELPHIA_SCHOOL_OF_MASSAGE__paebke-20-13642__0001.0.pdf?mcid=tGE4TAMA represented by: Mark S. Danek, Esq. DANEK LAW FIRM, LLC E-mail: msd@daneklawfirm.com In re Michael Marion Snider and Michele Jean Snider Bankr. W.D. Tex. Case No. 20-60620 Chapter 11 Petition filed September 10, 2020 represented by: Reese Baker, Esq. BAKER & ASSOCIATES E-mail: reese.baker@bakerassociates.net In re Charles Brian Gross Bankr. D. Wyo. Case No. 20-20476 Chapter 11 Petition filed September 10, 2020 represented by: Mark Macy, Esq. In re Sukhjit S. Bhatti Bankr. M.D. Ala. Case No. 20-31945 Chapter 11 Petition filed September 11, 2020 In re Put R' Up, Inc. Bankr. N.D. Fla. Case No. 20-50116 Chapter 11 Petition filed September 11, 2020 See https://www.pacermonitor.com/view/2OVZYJQ/Put_R_Up_Inc__flnbke-20-50116__0001.0.pdf?mcid=tGE4TAMA represented by: Robert C. Bruner, Esq. BRUNER WRIGHT, P.A. E-mail: rbruner@brunerwright.com In re John L. Collins Bankr. N.D. Fla. Case No. 20-50117 Chapter 11 Petition filed September 11, 2020 represented by: Michael J. Hooi, Esq. In re George Andrew Sprague Bankr. W.D. Ky. Case No. 20-40566 Chapter 11 Petition filed September 11, 2020 represented by: Scott Bachert, Esq. KERRICK BACHERT PSC Email: sbachert@kerricklaw.com In re Church of the Disciples Bankr. D. Md. Case No. 20-18368 Chapter 11 Petition filed September 11, 2020 See https://www.pacermonitor.com/view/RPWXG6Q/Church_of_the_Disciples__mdbke-20-18368__0001.0.pdf?mcid=tGE4TAMA represented by: Gary S. Poretsky, Esq. PHOENIX LAW GROUP, LLC E-mail: gary@plgmd.com In re Drew Picon Bankr. D.N.J. Case No. 20-20471 Chapter 11 Petition filed September 11, 2020 represented by: Leonard Walczyk, Esq. WASSERMAN, JURISTA & STOLZ, P.C. E-mail: lwalczyk@wjslaw.com In re Douglas Allen Jernigan and Aileen King Jernigan Bankr. E.D.N.C. Case No. 20-03105 Chapter 11 Petition filed September 11, 2020 represented by: David Mills, Esq. In re Jeorgine Maree Trevithick Bankr. E.D.N.C. Case No. 20-03097 Chapter 11 Petition filed September 11, 2020 represented by: Danny Bradford, Esq. In re Broken Road, Inc. Bankr. S.D. Tex. Case No. 20-34513 Chapter 11 Petition filed September 11, 2020 See https://www.pacermonitor.com/view/MANFTLQ/Broken_Road_Inc__txsbke-20-34513__0001.0.pdf?mcid=tGE4TAMA represented by: Reese Baker, Esq. BAKER & ASSOCIATES E-mail: reese.baker@bakerassociates.net In re David P. Taylor Bankr. W.D. Pa. Case No. 20-22657 Chapter 11 Petition filed September 11, 2020 represented by: Robert Lampl, Esq. In re Gregory Kent Quinn Bankr. M.D. Tenn. Case No. 20-04138 Chapter 11 Petition filed September 11, 2020 In re DBL Check, LLC Bankr. W.D. Tex. Case No. 20-11029 Chapter 11 Petition filed September 13, 2020 See https://www.pacermonitor.com/view/KDN7IJY/DBL_Check_LLC__txwbke-20-11029__0001.0.pdf?mcid=tGE4TAMA represented by: Frank B. Lyon, Esq. FRANK B LYON E-mail: chris@franklyon.com In re Jai Bangalamukhi Mai, LLC Bankr. S.D. Ala. Case No. 20-12201 Chapter 11 Petition filed September 14, 2020 See https://www.pacermonitor.com/view/FJC6NLA/Jai_Bangalamukhi_Mai_LLC__alsbke-20-12201__0001.0.pdf?mcid=tGE4TAMA represented by: Robert M. Galloway, Esq. GALLOWAY, WETTERMARK & RUTENS, LLP In re Javier Caceres Bankr. C.D. Cal. Case No. 20-11671 Chapter 11 Petition filed September 14, 2020 represented by: Onyinye Anyama, Esq. In re Marguerite Benward Bankr. S.D. Cal. Case No. 20-04600 Chapter 11 Petition filed September 14, 2020 In re Julio Antonio Garcia and Bonnie Louise Garcia Bankr. M.D. Fla. Case No. 20-06885 Chapter 11 Petition filed September 14, 2020 represented by: Buddy Ford, Esq. In re Kelly Joe Copeland Bankr. S.D. Ohio Case No. 20-12506 Chapter 11 Petition filed September 14, 2020 represented by: Eric W. Goering, Esq. GOERING & GOERING In re Oliyan Tacos, LLC Bankr. E.D. Tex. Case No. 20-41942 Chapter 11 Petition filed September 14, 2020 See https://www.pacermonitor.com/view/RCN3QDI/Oliyan_Tacos_LLC__txebke-20-41942__0001.0.pdf?mcid=tGE4TAMA represented by: Robert T. DeMarco, Esq. DEMARCO MITCHELL, PLLC E-mail: robert@demarcomitchell.com In re H2 Beverages, Inc. Bankr. E.D. Tex. Case No. 20-41948 Chapter 11 Petition filed September 14, 2020 See https://www.pacermonitor.com/view/YTPLZCY/H2_Beverages_Inc__txebke-20-41948__0001.0.pdf?mcid=tGE4TAMA represented by: Eric A. Liepins, Esq. ERIC A. LIEPINS E-mail: eric@ealpc.com In re George J. Baer, Jr. Bankr. W.D. Pa. Case No. 20-70476 Chapter 11 Petition filed September 14, 2020 represented by: James R. Walsh, Esq. LAW FIRM OF JAMES R. WALSH, ESQ. E-mail: WalshJim255@gmail.com In re Pierre Pinsonnault Bankr. S.D. Fla. Case No. 20-19915 Chapter 11 Petition filed September 14, 2020 represented by: Alan Crane, Esq. In re Douglas Lunsford Frongillo Bankr. S.D. Fla. Case No. 20-19923 Chapter 11 Petition filed September 14, 2020 represented by: Thomas Abrams, Esq. In re Steve Chou Bankr. N.D. Cal. Case No. 20-41504 Chapter 11 Petition filed September 15, 2020 represented by: Lars Fuller, Esq. In re Benjamin F. Picone Bankr. E.D. La. Case No. 20-11616 Chapter 11 Petition filed September 15, 2020 represented by: Leo Congeni, Esq. In re Arthur J. Picone Bankr. E.D. La. Case No. 20-11617 Chapter 11 Petition filed September 15, 2020 represented by: Leo Congeni, Esq. In re Edom E. Lyatuu Bankr. W.D. Mich. Case No. 20-02937 Chapter 11 Petition filed September 15, 2020 In re Weldon Eugene Holtzclaw, Jr. Bankr. D.S.C. Case No. 20-03558 Chapter 11 Petition filed September 15, 2020 In re Victor Anthony Donisi Bankr. M.D. Tenn. Case No. 20-04178 Chapter 11 Petition filed September 15, 2020 In re David M. Mullins and Kirsten S. Mullins Bankr. W.D. Wash. Case No. 20-12377 Chapter 11 Petition filed September 15, 2020 represented by: Thomas D. Neeleman, Esq. In re West Virginia Powersports LLC d/b/a Horsepower Unlimited Inc. Bankr. S.D. W.Va. Case No. 20-50143 Chapter 11 Petition filed September 15, 2020 See https://www.pacermonitor.com/view/LJU7BHI/West_Virginia_Powersports_LLC__wvsbke-20-50143__0001.0.pdf?mcid=tGE4TAMA represented by: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE E-mail: joecaldwell@frontier.com & chuckriffee@frontier.com In re Richard Talmadge Blackburn Bankr. S.D. W.Va. Case No. 20-50144 Chapter 11 Petition filed September 15, 2020 ********* 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. 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