/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/201103.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, November 3, 2020, Vol. 24, No. 307 Headlines 27 PUTNAM AVE: Unsecureds to Get 97% if Claims Objection Successful 2MORROWS SOLUTIONS: JS Property Buying Philly Property for $252K ACADEMY LTD: Moody's Rates New $400MM Senior Secured Notes 'B2' ADVANTAGE SALES: S&P Raises ICR to 'B'; Ratings Off Watch Positive AKCEL CONSTRUCTION: $75K Construction Eqpt. Sale to Wasserman OK'd AKORN INC: Court Extends Plan Exclusivity Thru December 16 AKOUSTIS TECHNOLOGIES: Incurs $11.9-Mil. Net Loss in First Quarter AKOUSTIS TECHNOLOGIES: Stockholders Pass All Proposals at Meeting ALBERTSONS COS: S&P Upgrades ICR to 'BB-' on Debt Reduction ALICE'S SCHOOL: Plan to be Funded by Continued Business Operation ALLIED FINANCIAL: $34K Sale of Aguadilla Property to Barreto Okayed ALLIED FINANCIAL: Proposed $46K Sale of Aguadilla Property Approved AMAZING ENERGY: DeCoria Michel & Teague Resigns as Auditor AMERICAN BLUE: Creditors' Committee Backs Plan, Releases AMERICAN BLUE: Franchisee Objects to Plan Confirmation AMKOR TECHNOLOGY: Moody's Affirms Ba3 CFR, Outlook Stable ANDES INDUSTRIES: Seeks to Hire Perkins Coie as New Legal Counsel ANDES INDUSTRIES: Unsec. to Get 26% in Petitioning Creditors' Plan ANNAGEN LLC: Trustee Seeks Approval to Hire Legal Counsel ARCHDIOCESE OF SANTA FE: Selling Sandia Park Property for $152K AUTHENTIKI LLC: Case Summary & 20 Largest Unsecured Creditors AVANTOR FUNDING: Fitch Assigns BB+ Rating on Sec. Term Loan AVANTOR FUNDING: Moody's Rates New EUR550MM First Lien Notes Ba2 AVERY'S USED CARS: Wins Confirmation of Plan BANK 2017-BNK9: Fitch Cuts Rating on Class X-F Certs to 'CCC' BARTLETT TRAYNOR: Wins Confirmation of Reorganization Plan BAY INN: Seeks Approval to Hire Buddy D. Ford as Legal Counsel BENJA INCORPORATED: Busey Bank Seeks Appointment of Trustee BIOSTAGE INC: Appoints James Mastridge as Interim VP of Finance BJ SERVICES: Creditors Plan to Sue Lenders to Recover $50M+ BLACK IRON: Court Confirms 2nd Amended Plan BLVCK BVLLED: Plan Hearing Rescheduled to Nov. 16 BOMBARDIER REC: Moody's Alters Outlook on B1 CFR to Positive BRANDED APPAREL: Nov. 5 Hearing on Bid Procedures for All Assets BULL SHIRTS: Court Confirms Reorganization Plan BW GAS: Moody's Affirms B2 CFR & Alters Outlook to Positive CALLAWAY GOLF: Moody's Affirms B1 CFR & Alters Outlook to Negative CARS.COM INC: Moody's Assigns B1 CFR & B3 Rating on Proposed Notes CARVANA CO: Incurs $7.1 Million Net Loss in Third Quarter CBL & ASSOCIATES: Case Summary & 30 Largest Unsecured Creditors CBL & ASSOCIATES: In Chapter 11 With Plan to Cut Debt by $1.5-Bil. CCM MERGER: Moody's Rates $275MM 5-Year Term Loan B 'Ba3' CEL-SCI CORP: Extends Shareholders Rights Agreement Until 2025 CENOVUS ENERGY: Fitch Alters Outlook on BB+ Rating to Positive CENOVUS ENERGY: Moody's Puts Ba2 CFR on Review for Upgrade CERENCE INC: S&P Withdraws 'B' Issuer Credit Rating CHESTER COUNTY IDA: Moody's Cuts 2013A Revenue Bonds to Ba2 CHF COLLEGIATE HOUSING: S&P Affirms 'BB+' Rating on Revenue Bonds CHICAGO PARK: Moody's Affirms Ba1 on Tax Debt, Outlook to Negative CHRISTIAN CARE: Fitch Cuts Series 2014 $29.1MM Revenue Bonds to B+ CINEMEX HOLDINGS: CineBistro Closes Brookhaven, Atlanta Location CINEMEX USA: Khan Parties Object to Plan & Disclosures CINEMEX USA: Unsecureds to Recover 15% in 3rd Amended Plan CLAAR CELLARS: Nov. 9 Plan Confirmation Hearing Set COASTAL INTERNATIONAL: Court to Confirm Plan COMMERCIAL METALS: Egan-Jones Hikes Sr. Unsecured Ratings to BB+ CONCHO RESOURCES: Egan-Jones Hikes Sr. Unsecured Ratings to BB- CONFLUENT HEALTH: Moody's Alters Outlook on B3 CFR to Positive CONUMA RESOURCES: Moody's Lowers CFR to B3, Outlook Stable CRC MEDIA: Unsecureds Will be Paid From Liquidation of Estate Asset DEVCH LP: Austin Housing Buying Austin Property for $1.35 Million DEXKO GLOBAL: S&P Alters Outlook to Stable, Affirms 'B-' ICR DIAMONDBACK INDUSTRIES: Drurys Sought Changes to 3rd Am Disclosures DIAMONDBACK INDUSTRIES: Nov. 12 Plan Confirmation Hearing Set DIAMONDBACK INDUSTRIES: UMB Says Plan Unconfirmable DIAMONDBACK INDUSTRIES: Unsecureds Recover 100% in Settlement Plan DM WORLD: Amended Plan of Reorganization Confirmed by Judge DM WORLD: Creditors' Committee Objects to 0% Plan DOMICIL LLC: Plan Confirmation Hearing Deferred to Nov. 18 DOMICIL LLC: Says In Talks With Parties to Resolve Plan Issues E MECHANIC: Court Approves Disclosures and Confirms Plan EAGLE PIPE: Boomerang's Time to Object to Pending Motions Extended EAGLE PIPE: Nov. 20 Auction of Substantially All Assets EASTERN NIAGARA: Maintains Satisfactory Patient Care, PCO Says EKSO BIONICS: Posts $2.5 Million Net Income in Third Quarter ENOVA INTERNATIONAL: Moody's Confirms B2 CFR, Outlook Negative EPR PROPERTIES: Fitch Lowers IDR to BB+, Outlook Negative EQM MIDSTREAM: Moody's Affirms Ba3 CFR, Outlook Negative EQT CORP: Fitch Assigns BB Rating to New 8-Yr. Sr. Unsecured Notes EQT CORP: Moody's Alters Outlook on Ba3 CFR to Positive EQT CORP: Moody's Rates New $300MM Unsec. Notes Due 2029 'Ba3' FANNIE MAE: Posts $4.2 Billion Net Income in Third Quarter FIC RESTAURANTS: Friendly's Files for Chapter 11 to Sell to Amici FINANCE OF AMERICA: Fitch Gives 'B+' LongTerm IDR, Outlook Stable FINANCE OF AMERICA: Moody's Rates $350MM Senior Unsec. Bond 'B3' FIORES MOTORS: Wins Confirmation of Plan FIRSTENERGY CORP: S&P Lowers ICR to 'BB+' on Termination of CEO FORT DEARBORN: Moody's Affirms B3 CFR & Alters Outlook to Stable FOURTH QUARTER: Coweta County Buying Newnan Property for $6.5M FRANCHISE GROUP: Moody's Assigns B1 CFR, Outlook Stable FRIENDS OF CHESTER: Fitch Affirms B- Issuer Default Rating FRONTIER COMMUNICATIONS: 5th Amended Plan Confirmed by Judge GENOCEA BIOSCIENCES: Incurs $4.5 Million Net Loss in Third Quarter GNC HOLDINGS: Completes Chapter 11 Plan Process GNC HOLDINGS: Court Enters Plan Confirmation Order GRADE A HOME: Delays Disclosures Hearing to Nov. 23 GULFPORT ENERGY: Lenders Extend Forbearance Period to Nov. 13 HALLIBURTON COMPANY: Egan-Jones Lowers Unsecured Debt Ratings to B HAWAIIAN AIRLINES: Fitch Lowers Series 2020-1 Cl. B Certs to BB- HENG CHEONG: Ruling on $1.5M Sale of Rivercliff Property Deferred HENRY FORD VILLAGE: Searches for Buyer for Facility HERTZ GLOBAL: Delisted by the NYSE As It Struggles to Survive HILL CONCRETE: Court Confirms Plan Over the Line's Objections HOUSTON GRANITE: Wins Approval of Chapter 11 Plan IMERYS TALC: Wins Court OK for $223M Magris Stalking Horse Bid INTEGRATED DENTAL: Sets Bidding Procedures for All Assets INTERRA INNOVATION: Court Approves Disclosure Statement INTERRA INNOVATION: Unsecureds to Get 38%, Liens in Plan J.C. PENNEY: Works Out Deal with Creditors Who Objected to Plan JAGUAR HEALTH: Has Until Dec. 23 to Regain Nasdaq Compliance JEFFERIES GROUP: Egan-Jones Hikes Senior Unsecured Ratings to BB JFG HOLDINGS: Case Summary & 5 Unsecured Creditors JOHN F. HOGAN: $850K Sale of Berkeley Lake Property to Howard OK'd KAIROS HOMES: Court Confirms Corrected Plan KHAN AVIATION: Trustee Selling LLC Interest to PMG for $45K L.S.R. INC: To Amend Plan; Hearing Continued to Dec. 8 LE TOTE: Cigna Says Disclosures Have Insufficient Information LE TOTE: Disclosure Statement Hearing Deferred to Nov. 24 LENTZE MARINA: Unsecured Creditors to Get Full Payment Over 4 Years LENTZE MARINA: Unsecureds to Get More; Plan Confirmed LONE STAR HOTELS: Court Denies Confirmation of Plan LONE STAR HOTELS: Plan Offers Unsecureds $2.5K/ Month for 5 Years LORD & TAYLOR: Wilmington Trust Loses Bid to Force Rent Payment LRGHEALTHCARE: $30 Million Sale of 2 Hospitals Wins Court Approval LRGHEALTHCARE: Asks Court to Dispense Appointment of PCO MARINE BUILDERS: Proposes Elite Auction of Vessel Jenny Lynne MARKPOL DISTRIBUTORS: Court Approves Disclosure Statement MARKPOL DISTRIBUTORS: Markpol Unsecureds to Recover 8.8% in Plan MASSACHUSETTS DEVELOPMENT: Moody's Cuts $132MM Bonds to Ba1 MAVERICK RESTORATION: Claims to be Paid From Continued Operations MCAFEE LLC: Fitch Assigns BB- LongTerm IDR, Outlook Stable MCAFEE LLC: Moody's Upgrades CFR to B1, Outlook Stable MEDICAL ASSOCIATES: MVMA Buying All Assets for $700K Cash MEMENTO MORI: Pellegrini Buying Interest in Mt. Charleston for $2K MICHAEL'S GOURMET: Reaches Deal With TD Bank; Plan Approved MOBIQUITY TECHNOLOGIES: Posts $4 Million Net Loss in Third Quarter MODA INGLESIDE: S&P Raises Long-Term ICR to 'BB'; Outlook Stable MOMBO LLC: Lent Investments Buying All Assets for $150K MURRAY-CALLOWAY COUNTY: Moody's Affirms Ba2 on $22MM Bonds NABORS INDUSTRIES: Fitch Lowers IDR to C on Debt Exchange NABORS INDUSTRIES: S&P Cuts ICR to 'SD' on Completed Tender Offer NATIONAL CINEMEDIA: Moody's Lowers CFR to Caa1, Outlook Stable NEPHROS INC: Paul Mieyal Resigns from Board NPC INT'L: Franchisor Wendy's Might Bid for Restaurants OWENS PRECISION: Gieseke Named as Chapter 11 Trustee OWENS-ILLINOIS GROUP: Moody's Lowers CFR to B1, Outlook Stable P&L DEVELOPMENT: Fitch Rates 5-Year Secured Notes 'B(EXP)' PENNSYLVANIA REIT: Files for Chapter 11 With Prepackaged Plan PESCRILLO NEW YORK: DOL Says Plan Unconfirmable PESCRILLO NEW YORK: UST Wants Financial Info of Each Debtor POPULUS FINANCIAL: S&P Downgrades ICR to 'B-'; Outlook Negative PRIME HEALTHCARE: Fitch Lowers Rating on Secured Notes to B PROGRESSIVE SPINE: Maximum Buying Equipment for $5.5K Cash QUEST PATENT: May File for Bankruptcy if Restructuring Talks Fail QUIKRETE HOLDINGS: Moody's Hikes CFR to Ba3, Outlook Stable RAYNOR SHINE: Identifies Leases to Be Assumed in Plan RAYNOR SHINE: In Sale Talks; Plan Hearing Moved to Nov. 19 ROCKPORT DEVELOPMENT: Caputos Buying Los Angeles Property for $2.2M RTI HOLDING: Gibson, Holifield Represent Hunt Claimants RTI HOLDING: Law Firm of Russell Represents Utility Companies S.A.S.B. INC: Wins Confirmation of Chapter 11 Plan SCREENVISION LLC: Moody's Lowers CFR to Caa1 SILGAN HOLDINGS: Egan-Jones Hikes Sr. Unsecured Debt Ratings to BB SLM CORP: Fitch Assigns BB+ Rating on $500MM Unsec. Notes SM ENERGY: Incurs $98.3 Million Net Loss in Third Quarter SMYRNA READY: Moody's Withdraws B1 Rating on Secured Credit Loans SOUTHERN TIER HEMP: Skips Payments on $1 Million Debt STEM HOLDINGS: Arthur Kwan Quits as Director SUNOPTA INC: Posts $2.8 Million Net Loss in Third Quarter THIRD COAST: Moody's Hikes Senior Unsecured Notes to 'Caa1' TIME DEFINITE: Court Confirms Plan After Modifications TK SKOKIE: Extends Plan Deadline to March 2021 TOLL ROAD II: Fitch Affirms 'BB-' on $1BB Series 1999/2005 Bonds TOPGOLF INTERNATIONAL: Moody's Reviews Caa1 CFR for Upgrade TOWER HEALTH, PA: S&P Lowers Long-Term Bond Rating to 'BB+' TOWER HEALTH: Fitch Cuts LongTerm Rating to BB+ TRI MECHANICAL: Springer Appointment as Chapter 11 Trustee Okayed TTK RE ENTERPRISE: Disla Buying Somers Point Property for $129K UAL CORP: Egan-Jones Lowers Sr. Unsecured Ratings to B- UNITED SHORE: Fitch Assigns 'BB-' LT IDR, Outlook Stable UNITED SHORE: Moody's Assigns 'Ba3' CFR, Outlook Stable V.S. INVESTMENT: Moffett Buying Seattle Property for $760K WALDEN PALMS: Sale of 4 Orlando Condo Units for $154K Approved WILDBRAIN LTD: Fitch Affirms B+ LongTerm IDR, Outlook Negative WYNTHROP PARTNERS: Sets Bidding Procedures for Real Estate YAMANA GOLD: S&P Alters Outlook to Positive, Affirms 'BB+' ICR [^] Large Companies with Insolvent Balance Sheet ********* 27 PUTNAM AVE: Unsecureds to Get 97% if Claims Objection Successful ------------------------------------------------------------------- The Court on Sept. 8 approved 27 Putnam Ave LP, et al.'s Amended Disclosure Statement and fixing an Oct. 29 hearing to consider confirmation of the Debtors' Plan. The Oct. 29 hearing has been adjourned to Nov. 24, 2020 at 10:00 a.m. 27 Putnam Ave LP, 90 Downing St LP, 423 Grand Ave LP, and 429 Grand Ave LP filed the Amended Joint Disclosure Statement in connection with their Joint Plan of Reorganization dated August 28, 2020. Each Class 4 General Unsecured Claimant shall be paid its pro-rata share of the available Cash up to Allowed Amounts of all Class 4 Claims plus interest at the Legal Rate through the payment date. The available Cash will be Cash left over after payment of the Allowed Amounts of Administrative Claims, Unclassified Priority Claims and Class 1 through Class 3 Claims. If the available Cash is less than $100,000, each holder of a Class 4 Claim shall be paid its pro-rata share of a $100,000 distribution fund. To the extent necessary, such fund will be funded by the Class 2 Claimant, as set forth in the Class 2 treatment section of the Plan. Since the sale of the Properties will be delayed due to restrictions imposed by pandemic conditions, the Class 2 Claimant shall make a $100,000 protective advance to the Debtors to be used to make an initial distribution to Class 4 Claimants on about the day the Confirmation Order is entered. If the Debtors are successful in their prosecution of pending Claims objections, the Debtors project that the $100,000 distribution fund will yield a 97 percent distribution to Creditors. If the Debtors' Claims objections are denied in full, the Debtors project that the $100,000 distribution fund will yield a 10% distribution to Creditors. Effective Date payments under the Plan will be paid from the sale of the Properties. To effectively market the Properties, the following contingencies must be resolved: (a) declaratory relief relating to the substantial rehabilitation of the Properties under the OAG Agreement, (b) determination of allowed rents following the termination of restrictions imposed by financing under the so-called "HOME" regulatory agreement, (c) substantial resolution of outstanding claims against the Debtors, and (d) improvement of residential rent collections to 90% or better. A full-text copy of the Amended Joint Disclosure Statement dated August 28, 2020, is available at https://tinyurl.com/y49u34vv from PacerMonitor.com at no charge. The Debtors are represented by: Mark Frankel Backenroth Frankel & Krinsky, LLP 800 Third Avenue, Floor 11 New York, New York 10022 Tel: (212) 593-1100 About 27 Putnam Ave LP 27 Putnam Ave LP and three affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-13412) on Oct. 25, 2019. The petitions were signed by David Schieble, Clinton Hill GP LLC, authorized signatory. At the time of the filing, each Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. The cases are assigned to Judge Mary Kay Vyskocil. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, is the Debtors' legal counsel. 2MORROWS SOLUTIONS: JS Property Buying Philly Property for $252K ---------------------------------------------------------------- 2morrows Solutions 2day, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to authorize the sale of the real property located at 2452 Kimball Street, Philadelphia, Pennsylvania to JS Property Brothers 1, LLC for $252,000, subject to overbid. The Debtor's Schedules reflect, among other things, that it is the fee owner of two separate parcels of improved real estate, including (a) 1452 Kimball Street, Philadelphia, PA 19146 and (b) the Property, and that the Properties are subject to various mortgages, liens and judgments. The Debtor financed a significant amount of the acquisition of a third parcel of improved real estate located at 3837 N. 17th Street, Philadelphia, PA 19140 but the property is held by Bass, LLC. The Bass Property also serves as collateral for the mortgages on the other Properties. Through the Motion, the Debtor is asking the sale of the Property. Contemporaneously with the filing of the Motion, the Debtor is filing (i) a Motion to Employ a Real Estate Agent to market the Debtor's other Properties and (ii) a Motion Authorizing and Approving Bidding Procedures for (a) the Sale of the Debtor's Properties, (b) Authorizing the Stalking Horse Protections Including the Breakup Fee, (c) Scheduling a Hearing to Approve the Results of the Auction that Arises Therefrom, (d) Approving the Manner and Extent of Notice of the Auction Approval Hearing, the Bidding Procedures, and Fixing Certain Notice and Objection Procedures Relating Thereto; and (e) Entry of an Order Pursuant to Sections 105(a) and 363(b) Authorizing and Approving a Sale ofthe Properties Free and Clear ofLiens, Claims, Encumbrances Interests or Otherwise, with the Proceeds of the Sale with the Encumbrances Attaching to Such Sale Proceeds. In the event that the Purchase Offer is not approved, the Property would be sold in accordance with the Auction Procedures Motion. Prior to the Petition Date, the Debtor had not listed the Properties with a real estate agent. It did, however, enter into a Standard Agreement for the Sale of Real Estate with the Buyer on April 13, 2020. That sale could not be consummated because there is a judgment lien held by Toni Smith in the amount of $253,000 of record in Philadelphia County against all of the Debtor's Properties. While the Debtor attempted to obtain Smith's consent, Smith would not cooperate to allow the sale to go forward. On Sept. 21, 2020, the Debtor and the Buyer entered into a Contract for Purchase of the Property for a purchase price of $252,000. On the Petition Date, the Debtor filed the case to effectuate the sale of the Property so that the accrual of additional expenses for interest, taxes and costs related to a foreclosure action could be avoided for the benefit of the Debtor, its creditors and all other parties in interest. The Properties are encumbered by mortgages and various liens in favor of taxing and/or other municipal authorities. The amount of the Encumbrances is more than the sale proceeds to be derived from the sale of the Property. By separate motion contemporaneously filed with the Motion, the Debtor is asking to sell each of its Properties free and clear of Encumbrances with all such Encumbrances attaching exclusively to the proceeds of the sales as expeditiously as possible to avoid the accrual of additional interest, taxes and to satisfy, at least, in part, the judgment held by Smith. Finally, the Debtor asks the Court to waive the 14-day stay imposed by Bankruptcy Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/y3og45c8 from PacerMonitor.com free of charge. About Solutions 2day Solutions 2day, LLC, sought Chapter 11 protection (Bankr. E.D. Pa. Case No. 20-13870) on Sept. 25, 2020. The petition was signed by Jacky Veasly, member. The Debtor was estimated to have assets in the range of $500,000 to $1 million and $1 million to $10 million in debt. The Debtor tapped Jeffrey M. Carbino, Esq., at Jensen Bagnato, P.C. as counsel. ACADEMY LTD: Moody's Rates New $400MM Senior Secured Notes 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Academy, Ltd.'s new $400 million senior secured notes due 2027. All other ratings and outlook remain unchanged. Proceeds from the new senior secured notes along with the company's $400 million new senior secured term loan and cash from the balance sheet will be used to refinance the company's $1,434 million outstanding term loan due 2022 and pay for fees and expenses. The notes rank pari passu with the company's new senior secured term loan. Assignments: Issuer: Academy, Ltd. Senior Secured Regular Bond/Debenture, Assigned B2 (LGD4) RATINGS RATIONALE Academy's B1 CFR reflects the company's moderately high lease-adjusted gross leverage and the competitive nature of sporting goods retail, including the increased focus of major apparel and footwear brands on direct-to-consumer distribution and the shift to online shopping. Moody's projects a modest increase in leverage to 3.8 times in 2021 compared to 3.4 times as of August 1, 2020 pro-forma for the transaction. In Moody's view, the large-scale shift in consumer spending towards the sporting goods category in 2020 and away from travel and leisure will likely partially reverse once health and safety concerns abate. As a result, Moody's expects revenue and earnings to decline in 2021 following strong growth in 2020, and there is significant uncertainty about a more normalized earnings level. In addition, as a retailer, Academy needs to make ongoing investments in its brand and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy, and data protection. Academy's ongoing offering of firearms and ammunition at a time when several large retailers have reduced their offerings in the category also represents a social consideration. At the same time, Academy's ratings positively consider the company's very good liquidity, scale, and solid market position in its regions. The turnaround strategy put in place by the current management team, including initiatives in merchandising, private label credit card and omnichannel investment, has started yielding results since the back half of 2019. Moody's also expects Academy to benefit from its value price points and diversified product assortment, which tend to result in resilient performance during economic downturns. In addition, the rating considers governance factors, including the expectation for more conservative financial strategies following the public equity offering. Specifically, although the company remains majority-owned by private equity sponsor KKR, Moody's views re-leveraging transactions as unlikely following the equity filing and the over 40% reduction in gross debt following the refinancing. The stable outlook reflects Moody's expectation that the company will continue its solid performance and maintain a very good liquidity profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE The ratings could be upgraded if the company demonstrates continued growth in revenue and operating profit and maintains very good liquidity and conservative financial policies. Quantitatively, the ratings could be upgraded with expectations for Moody's-adjusted debt/EBITDA to be maintained below 3.75 times and EBIT/interest expense above 2.75 times. The ratings could be downgraded if earnings or liquidity significantly deteriorate or the company experiences material execution missteps. Aggressive financial strategy actions could also result in a downgrade. Quantitatively, the ratings could be downgraded if Moody's-adjusted debt/EBITDA is maintained above 4.5 times and EBIT/interest expense declines below 2.25 times. Academy, Ltd. is a US sports, outdoor and lifestyle retailer with a broad assortment of hunting, fishing, and camping equipment, along with footwear, apparel, and sports and leisure products. The company operates 259 stores under the Academy Sports + Outdoors banner, which are primarily located in Texas and the southeastern United States, and its website. Academy generated approximately $5.3 billion of revenue for the twelve months ended August 1, 2020. The company is publicly traded following the October 2020 IPO but controlled by affiliates of Kohlberg Kravis Roberts & Co L.P. The principal methodology used in these ratings was Retail Industry published in May 2018. ADVANTAGE SALES: S&P Raises ICR to 'B'; Ratings Off Watch Positive ------------------------------------------------------------------ S&P Global Ratings raised its issuer credit ratings on Advantage Sales & Marketing Inc. (ASM) and Advantage Solutions Inc. to 'B' from 'CCC+' and removed them from CreditWatch, where they were placed with positive implications on Sept. 10, 2020. The outlook is stable. The upgrade comes after Advantage Solutions Inc., the parent of ASM, successfully completed its merger with special-purpose acquisition company Conyers Park II Acquisition Corp. and refinanced ASM's debt. The final debt capital structure of the merged company has changed from S&P's previous assumption and is now comprised of a $1.325 billion first-lien term loan and $775 million of senior secured notes. Interest rates are also higher than previously contemplated; neither affect the rating agency's view of ASM's overall credit quality. Meanwhile, S&P assigned its 'B' ratings to ASM's $1.325 billion first-lien term loan and $775 million of senior secured notes. The recovery rating is '3', indicating the rating agency's expectation for meaningful recovery for secured creditors in the event of a payment default. The upgrade reflects the successful refinancing of a large amount of debt maturing in 2021 and substantial improvement in credit metrics, despite slight changes to the original deal structure. The substantial equity contribution from Conyers Park and ASM's existing financial sponsors used to complete the merger and refinancing helped the company reduce debt to about 4.9x, pro forma for the transaction, from about 7.3x on June 30, 2020. This is slightly above S&P's previous estimate of 4.7x. ASM upsized its senior secured notes to $775 million from $500 million and downsized its first-lien term loan to $1.325 billion from $1.6 billion. The changes to the debt capital structure have not affected S&P's view of the company's credit quality. Pricing also widened on both facilities--resulting in higher projected annual interest payments than S&P initially anticipated--but the company's solid cash flow generation more than adequately covers the modestly higher debt service costs. S&P said, "We assume ASM will operate with more conservative financial policies as a public company, though its majority financial sponsor ownership will constrain upside ratings potential." "We expect the company will look to operate at lower leverage levels as a public company than it has in recent years (historically well above 6x). Nevertheless, the financial sponsors still own over 60% of the company, and we believe management will continue to aggressively pursue mergers and acquisitions (M&A) as it has in the past. Although we expect the majority of management's focus will be on tuck-in acquisitions, we believe the company will maintain an appetite for larger M&A opportunities that could result in leverage spiking above 5x. We also believe the company would eventually consider shareholder remuneration if S&P Global Ratings' adjusted leverage falls meaningfully below 4x and it cannot identify attractive M&A opportunities." "We expect continued steady performance in ASM's sales services segment and a slow recovery in its marketing services segment." The sales services segment generally performed well through the early stages of the pandemic due to increased consumer spending at retail. S&P said, "We generally believe this business will remain steady, particularly given the company's growing digital commerce business should help mitigate the continued consumer shift to ecommerce spending. The marketing services segment has faced more significant challenges, as its instore demo business was fully suspended in the early stages of the pandemic. Certain retailers are beginning to resume demos on a limited basis but we assume a gradual recovery of this business over the next couple of years as the virus dissipates and consumers slowly gain comfort with sampling. Though the business is sequentially improving, we expect credit metrics to temporarily weaken in the next couple quarters (including leverage in the mid-5x area) because of year-over-year comparisons, especially given reemerging virus risk. Thereafter, we expect leverage will improve to the low-4x area (notwithstanding the risk of a leveraging acquisition) as the business gradually recovers." S&P's ratings incorporate ASM's leading position but narrow business focus in the outsourced sales and marketing industry. S&P said, "ASM is the largest and strongest player in the industry, and we view its scale as a competitive advantage. We also believe the company provides a beneficial and necessary service to many of its clients, particularly smaller consumer packaged goods (CPG) companies that rely on third-party firms for cost-effective sales and marketing support. Sales and marketing agencies faced very challenging conditions in recent years because of CPG's focus on cost cutting amid changes in consumer purchasing behavior (including weak center-of-store traffic), which contributed to the eventual bankruptcy/restructuring of ASM's closest competitors, Acosta and CROSSMARK. We believe conditions were improving prior to the COVID-19 outbreak, as CPGs began to increase sales and marketing investment after years of cost cutting. CROSSMARK and Acosta have both emerged from bankruptcy with much stronger balance sheets, and their reduced debt burdens could allow them to compete more effectively on price. Nevertheless, we expect ASM will leverage its scale and capabilities to maintain its market-leading position. We also assume CPGs will continue to view ASM's services as critical even after the virus dissipates and consumer traffic at retail potentially moderates because they will be focused on maintaining market share." "The stable outlook reflects our expectation for a gradual recovery of ASM's marketing services business complemented by continued steady performance in its sales business, leading to steady profit growth. It also reflects our expectation that the company will remain acquisitive but maintain generally more conservative financial policies as a publicly held company, including managing leverage below 5x." "We could lower our ratings if the company is unable to improve profitability or it pursues aggressive debt-financed M&A, resulting in leverage sustained above 6x. The company could experience sustained profit pressure if the virus lingers and retailers maintain longer-than-expected restrictions on sampling activities; if price competition intensifies from ASM's largest competitors; if retail customers cut spending on outsourced sales and marketing functions; if the company loses business due to customer consolidation; or it cannot pass on wage inflation to its customers." "We could raise our ratings if the financial sponsor owners significantly reduce their ownership stake and we feel the company is highly unlikely to make a debt-financed acquisition resulting in leverage exceeding 5x." AKCEL CONSTRUCTION: $75K Construction Eqpt. Sale to Wasserman OK'd ------------------------------------------------------------------ Judge Lori V. Vaughan of the U.S. Bankruptcy Court for the Middle District of Florida authorized Akcel Construction, LLC's sale of construction equipment it no longer needs for its business operations listed on Exhibit A, consisting of tooling and other construction related equipment, to Wasserman & Associates, Inc. for $75,000, cash. A hearing on the Motion was held on Oct. 27, 2020 at 3:30 p.m. As set forth in the Motion, the sale of the Property is on an "as is, where is" basis with no representations or warranties of any nature whatsoever. Notwithstanding the provisions of Bankruptcy Rules 6004(h) and 6006(d), the Order will be effective and enforceable immediately upon entry and its provisions will be self-executing. The sale approved by the Order is not subject to avoidance pursuant to section 363(n) of the Bankruptcy Code. A copy of the Exhibit A is available at https://tinyurl.com/yyjkaz9r from PacerMonitor.com free of charge. About Akcel Construction Akcel Construction, LLC is a privately held company that specializes in providing shell construction services to builders across Florida and the Southeastern region. Akcel Construction, LLC and its debtor affiliate, Alpha Building Group, Inc., sought Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 20-03210) on June 8, 2020. The petitions were signed by Rubi Akooka, managing member. At the time of the filing, each Debtor disclosed estimated assets of $1 million to $10 million and estimated liabilities of the same range. The Debtors are represented by Latham, Luna, Eden & Beaudine, LLP. AKORN INC: Court Extends Plan Exclusivity Thru December 16 ---------------------------------------------------------- At the behest of Akorn Inc. and its affiliates, Judge Karen G. Owens extended by 90 days the Debtors' exclusivity period to file a chapter 11 plan through and including December 16, 2020, and to solicit acceptances through and including February 14, 2021. The Debtors already won confirmation of their Chapter 11 Plan, which provides a wind-down of their estates, in September and declared that Plan effective on October 1. Several entities have taken an appeal from the Confirmation Order: * Provepharm, Inc.; * AFSCME District Council 47 Health and Welfare Fund; * 1199SEIU National Benefit Fund; * 1199SEIU Greater New York Benefit Fund; * 1199SEIU National Benefit Fund for Home Care Workers; * 1199SEIU Licensed Practical Nurses Welfare Fund; and * Sergeants Benevolent Association Health and Welfare Fund The extension request was filed prior to the Plan effective date. In their request, the Debtors noted they continue to operate their business in a highly competitive pharmaceutical industry and amidst the unprecedented COVID-19 global pandemic. Additionally, the Debtors had more than $861 million in funded debt obligations as of the Petition Date. The Debtors said they have a wide variety of parties in interest, from various vendors and contractual and litigation counterparties to local and state agencies -- many of whom have been active in these chapter 11 cases. The Debtors also have countless reporting obligations with respect to local, state, and federal taxing and regulatory agencies that the Debtors have continued to comply with, to the extent required by the Bankruptcy Code. The Debtors stated they have undertaken significant steps to move towards a swift consummation of the Plan and orderly wind-down of their estates, including: (a) conducting a comprehensive marketing and sale process; (b) filing a plan supplement and First Amended Plan supplement; (c) obtaining approval of the disclosure statement explaining their exit plan; and (d) obtaining entry of the Plan confirmation order on September 4. The Debtors said that despite confirmation of their Plan, they are continuing to negotiate the necessary documentation for the Plan to become effective. While the Debtors anticipate that the effective date will occur in the near term, the current exclusivity period -- set to expire on September 17, 2020 -- could potentially expire prior to the Plan becoming effective. Accordingly, the Debtors seek entry of an order maintaining their exclusive right to file and solicit a plan of reorganization solely out of an abundance of caution. Maintaining the status quo at this juncture is critical as the Debtors and their stakeholders work towards consummating the Plan. A 90-day extension is therefore appropriate to protect the value and consensus that has been built by the Debtors and their stakeholders, and will not prejudice any parties in interest. "We have been engaged in hard-fought, good-faith negotiations with our stakeholders around the sale of substantially all of our assets," the Debtors added. A copy of the Debtor's Motion to Extend is available from PacerMonitor.com at https://bit.ly/37yzKXW at no extra charge. A copy of the Court's Extension Order is available from PacerMonitor.com at https://bit.ly/37y6j8i at no extra charge. 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. Previously, the cases were assigned to Judge John T. Dorsey, but Judge Karen B. Owens now oversees the Debtors' case. 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. AKOUSTIS TECHNOLOGIES: Incurs $11.9-Mil. Net Loss in First Quarter ------------------------------------------------------------------ Akoustis Technologies, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $11.95 million on $636,000 of revenue for the three months ended Sept. 30, 2020, compared to a net loss of $8.97 million on $543,000 of revenue for the three months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $64.35 million in total assets, $29.16 million in total liabilities, and $35.18 million in total stockholders' equity. As of Sept. 30, 2020, the Company had cash and cash equivalents of $37.2 million and working capital of $35.1 million. The Company has historically incurred recurring operating losses and experienced net cash used in operating activities of $7.9 million for the three months ended Sept. 30, 2020, which raises substantial doubt about the Company's ability to continue as a going concern within one year after the issuance date. As of Oct. 22, 2020, the Company had $34.5 million of cash and cash equivalents, which the Company expects to be sufficient to fund its operations beyond the next twelve months from the date of filing of this Form 10-Q. These funds will be used to fund the Company's operations, including capital expenditures, R&D, commercialization of its technology, development of our patent strategy and expansion of its patent portfolio, as well as to provide working capital and funds for other general corporate purposes. Except pursuant to its ATM Equity OfferingSM Sales Agreement with BofA Securities, Inc. and Piper Sandler & Co., the Company has no commitments or arrangements to obtain any additional funds, and there can be no assurance such funds, including under the ATM Equity OfferingSM Sales Agreement, will be available on acceptable terms or at all. The Company stated that if it is unable to obtain additional financing in a timely fashion and on acceptable terms, its financial condition and results of operations may be materially adversely affected and it may not be able to continue operations or execute its stated commercialization plan. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1584754/000121390020034252/f10q0920_akoustistech.htm About Akoustis Technologies Headquartered in Huntersville, NC, Akoustis is focused on developing, designing, and manufacturing innovative RF filter products for the mobile wireless device industry, including for products such as smartphones and tablets, cellular infrastructure equipment, and WiFi premise equipment. Akoustis reported a net loss of $36.14 million for the year ended June 30, 2020, compared to a net loss of $29.25 million for the year ended June 30, 2019. As of June 30, 2020, the Company had $71.43 million in total assets, $29.94 million in total liabilities, and $41.49 million in total stockholders' equity. AKOUSTIS TECHNOLOGIES: Stockholders Pass All Proposals at Meeting ----------------------------------------------------------------- Akoustis Technologies, Inc., held its 2020 Annual Meeting of Stockholders on Oct. 29, 2020, at which the stockholders: (a) elected Steven P. DenBaars, Arthur E. Geiss, J. Michael McGuire, Jeffrey K. McMahon, Jerry D. Neal, Suzanne B. Rudy, and Jeffrey B. Shealy to the Company's board of directors to serve one-year terms expiring at the 2021 annual meeting of stockholders and until their successors are duly elected and qualified, or until their earlier resignation or removal; (b) approved, on a non-binding, advisory basis, the compensation paid to the Company's named executive officers; and (c) ratified the appointment of Marcum LLP as the Company's independent public accounting firm for the fiscal year ending June 30, 2021. About Akoustis Technologies Headquartered in Huntersville, NC, Akoustis is focused on developing, designing, and manufacturing innovative RF filter products for the mobile wireless device industry, including for products such as smartphones and tablets, cellular infrastructure equipment, and WiFi premise equipment. Akoustis reported a net loss of $36.14 million for the year ended June 30, 2020, compared to a net loss of $29.25 million for the year ended June 30, 2019. As of Sept. 30, 2020, the Company had $64.35 million in total assets, $29.16 million in total liabilities, and $35.18 million in total stockholders' equity. ALBERTSONS COS: S&P Upgrades ICR to 'BB-' on Debt Reduction ----------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Albertsons Cos. Inc. (ACI) to 'BB-' from 'B+'. At the same time, S&P affirmed its rating on the company's unsecured notes at 'BB-', and revised the recovery rating to '3' from '2' and the recovery percentage is capped at 50%-70% (rounded estimate: 65%) in the event of a payment default or bankruptcy. S&P said, "For subordinated debtholders Safeway Inc. and New Albertsons LP (NALP), we are raising the issue-level rating to 'B' from 'B-', in line with the corporate credit rating. The recovery rating of '6' is unchanged on those instruments, indicating our expectation of 0%-10% recovery (rounded estimate: 0%) in the event of a payment default or bankruptcy." "The positive outlook reflects our view that ACI could sustain customer demand continues to remain strong for ACI's essential grocery merchandise against the backdrop of the COVID-19 pandemic." "We see continued credit metric upside for ACI over the next year, given strong top line trends (+13.8 identical sales growth in the latest quarter) and its transition from a highly leveraged privately held entity to a public company with a more conservative balance sheet." "Before the pandemic, we projected the company would maintain leverage in the mid-5x area on an S&P Global Ratings' lease-adjusted basis in fiscal 2020. However, that figure has already declined to 4.6x for the 12 months ending Sept. 12, 2020. Albertson's has reduced about $2 billion in funded debt from 2018 levels and is growing adjusted EBITDA through an increase in identical (ID) sales, improvements in shrink expense, and higher fuel margins." "We expect leverage to remain in the mid-4x area over the next year through a combination of continued higher-margin private label assortment growth, store upgrades and rapidly expanding Drive Up & Go (DUG) capabilities. As a result we are revising our financial risk profile to aggressive from highly leveraged." "We believe reduced financial sponsor ownership amid this year's IPO and a commitment to continued deleveraging as the CEO stated in the company's latest earnings call are all credit positive." "When the company went public in June 2020, it diversified to more nonfinancial sponsor holders that we believe will help drive a more conservative capital structure. We are revising our financial policy score to neutral from FS-6 to account for this change in ownership." "We expect ACI to continue to direct excess cash flow to the business and modest shareholder initiatives, with the company recently authorizing a new share repurchase program that allows it to repurchase up to $300 million of common stock. The company's Acme Markets plans to acquire 27 Kings Food Markets and Balducci's Food Lover's Markets for almost $100 million in cash this fiscal year, but we do not expect any further material acquisitions in our base case over the next 12 months." New strategies taking aim at discounters, supercenters, and online grocers should benefit identical sales and margins even beyond elevated COVID-19-related demand. S&P said, "We project ACI will generate continued double-digit-percent positive ID sales this year even as stock-up buying from the early phase of the pandemic rolls off. We expect online grocery penetration to accelerate, as ACI has allocated more of its capital spending toward its digital and e-commerce strategy, resulting in a 243% jump in digital sales in the quarter ending Sept. 12, 2020." "We also expect higher private-label penetration to drive higher EBITDA margins for the full-year 2020. The company says its Own Brands portfolio offer a 1,000 basis point gross margin advantage compared to national brands, and has rolled out another 650 items this year. Lastly, it is rapidly growing its DUG locations from 950 recently to 1,400 by the end of the fiscal year to 1,800 by the end of fiscal 2021." "We expect ACI's strong liquidity position will remain in place over the coming year." "Albertsons has a high cash balance of more than $2 billion and full availability under its $4 billion asset-based lending (ABL) facility aside from letters of credit. We also note improved incremental cash flows given higher inventory turns and lower inventory levels amid large grocery demand this year. This is offset with manageable debt maturities over the next two years and about $1.9 billion in forecast capital spending over the coming year. Lastly, we note the company said net cash provided by operating activities was $2.7 billion during the first 28 weeks of fiscal 2020 compared to $1.1 billion during the first 28 weeks of fiscal 2019, significantly ahead of our expectations." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety. S&P said, "The positive outlook reflects our belief that profitability will increase throughout fiscal 2020 as continued high food-at-home levels and improved online and store-level execution result in modest earnings growth. We expect continued elevated free operating cash flow generation in fiscal 2020, with potential for reduction in multi-employer pension plan (MEPP) exposure." S&P could raise the rating if: -- S&P expects sustained adjusted leverage of about 4.5x or less from positive ID sales and margin expansion beyond its expectations. -- The company prioritizes its available cash and free operating cash flow toward $1 billion in debt reduction. -- ACI maintains a sustained financial policy aimed at capital allocations for business improvement rather than shareholder returns or M&A. S&P could revise the outlook to stable if: -- S&P expects leverage will be sustained above 4.5x in 2021 and beyond due to either a more aggressive financial policy or a more significant reversion of operating results to a lower level following the sales surge in 2020 that impacts EBITDA. -- Adjusted debt increases are not offset by EBITDA growth, for instance if the company does not reduce exposure to multi-employer pension plans (MEPP) or meaningfully increases lease exposure. -- If operating performance or strategic initiatives are weak and lead to a deteriorating view of Albertson's competitive position. ALICE'S SCHOOL: Plan to be Funded by Continued Business Operation ----------------------------------------------------------------- Alice's School, Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Plan of Reorganization and a Disclosure Statement on August 28, 2020. Class 2(a)-CRIM's unsecured portion in the amount of $3,292 plus annual interest rate of 4.25% for 120 months in total since filing date, will be paid on and after month 51 since the Effective Date of the Plan, commencing on month 51, and shall be paid in full in monthly installments of not less than $68.00 for 60 months, after the first 50 months period of the Plan since the Effective Date has elapsed. The Debtor will pay a total of $4,080, which includes 100% of the unsecured liability and annual interest rate of 4.25% calculated for 120 months in total since filing date. Class 2(b)-INTERNAL REVENUE SERVICES (IRS)'s unsecured portion in the amount of $55,864 plus annual interest rate of 4.25% for a total amount of $68,700 to be paid on and after month 51 since the Effective Date of the Plan, commencing on month 51 since the Effective Date of the Plan, and shall be paid in full in monthly installments of not less than $1145 for 60 months, after the initial 50-months period after Effective Date. The funds required to implement the Plan will come from income derived by Debtor from its continued business operation. A full-text copy of the Disclosure Statement dated August 28, 2020, is available at https://tinyurl.com/y59f7dgf from PacerMonitor at no charge. Attorney for Alice's School: Moreno Law Office, LLC Rosana Moreno Rodríguez P.O. Box 679 Trujillo Alto, Puerto Rico 00977 Telephone: (787) 750-8160 Facsimile: (787) 750-8243 E-mail: rmoreno@morenolawpr.com About Alices School Inc. Based in Carolina, Puerto Rico, Alices School Inc. filed its petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 19-05929) on Oct. 15, 2019, listing under $1 million in both assets and liabilities. Rosana Moreno Rodriguez, Esq., at Moreno & Soltero Law Office, LLC, represents the Debtor. ALLIED FINANCIAL: $34K Sale of Aguadilla Property to Barreto Okayed ------------------------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico authorized Allied Financial, Inc.'s sale of the lot of land located at Barrio Aguacate in Aguadilla, Puerto Rico, Registered as Property Num. 30,066, of Vol. 558 in Aguadilla Property Registry, to Sandro Escobar Barreto for $34,000. The sale is free and clear of all liens, claims, interest and encumbrances. About Allied Financial Allied Financial, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 16-00180) on Jan. 15, 2016. At the time of the filing, Debtor disclosed total assets of $10.3 million and total debt of $9.14 million. Judge Mildred Caban Flores oversees the case. C. Conde & Assoc. is the Debtor's legal counsel. ALLIED FINANCIAL: Proposed $46K Sale of Aguadilla Property Approved ------------------------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico authorized Allied Financial, Inc.'s sale of the lot of land located at Barrio Aguacate in Aguadilla, Puerto Rico, Registered as Property Num. 30,074, of Vol. 558 in Aguadilla Property Registry, to Jorge L. Cruz Acevedo and Jacqueline Tirade Gonzalez for $46,000. The sale is free and clear of all liens, claims, interest and encumbrances. About Allied Financial Allied Financial, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 16-00180) on Jan. 15, 2016. At the time of the filing, Debtor disclosed total assets of $10.3 million and total debt of $9.14 million. Judge Mildred Caban Flores oversees the case. C. Conde & Assoc. is Debtor's legal counsel. AMAZING ENERGY: DeCoria Michel & Teague Resigns as Auditor ---------------------------------------------------------- Effective Sept. 30, 2020, DeCoria Michel & Teague, P.S. has resigned as the auditor for Amazing Energy Oil & Gas, Co. On Aug. 28, 2020, Mr. Ed Devereaux resigned as a member of the Company's Board of Directors. About Amazing Energy Amazing Energy Oil and Gas, Co. -- http://www.amazingenergy.com-- is an independent oil and gas exploration and production company headquartered in Plano, Texas. The Company's primary leasehold is in the Permian Basin of West Texas. The Company controls over 75,000 acres between their rights in Pecos County, Texas and assets in Lea County, New Mexico, and Walthall County, Mississippi. The Company primarily engages in the exploration, development, production and acquisition of oil and natural gas properties. Amazing Energy's operations are currently focused in the Permian Basin and Gulf Coast regions. Amazing Energy reported a net loss of $8.05 million for the year ended July 31, 2019, compared to a net loss of $6.51 million for the year ended July 31, 2018. As of Jan. 31, 2020, the Company had $14.63 million in total assets, $15.73 million in total liabilities, and a total stockholders' deficit of $1.1 million. DeCoria, Maichel & Teague, P.S., in Spokane, Washington, the Company's auditor since 2014, issued a "going concern" qualification in its report dated Nov. 13, 2019, citing that the Company has limited financial resources, negative working capital, recurring losses and an accumulated deficit at July 31, 2019. These factors raise substantial doubt about its ability to continue as a going concern. AMERICAN BLUE: Creditors' Committee Backs Plan, Releases -------------------------------------------------------- The Official Committee of Unsecured Creditors (the “Committee”) of American Blue Ribbon Holdings, LLC, et al., (collectively, the “Debtors”), files this statement in support of the Second Amended Combined Disclosure Statement and Chapter 11 Plan of Reorganization and Plan Supplement. According to Committee, the Plan contains meaningful benefits for unsecured creditors and should be confirmed. The Committee submits that the Debtors have made this showing in the Debtors’ Memorandum and will not repeat the requirements of 11 U.S.C. Section 1129 here. Instead, the Committee will demonstrate that the Plan contains significant benefits for unsecured creditors and should be confirmed. The Committee points out that the releases should be approved. The ballots for creditors in Class 3 provided the explicit right to opt out of the Releases by checking the box on the ballot. Based on the Voting Declaration, 23 creditors, comprising 15% of the voting creditors, elected to opt out of the releases. Clearly, creditors read the ballot, understood the directive, and were able to and did opt out of the Releases. Counsel to the Official Committee of Unsecured Creditors: G. David Dean, Esq. Patrick J. Reilley, Esq. COLE SCHOTZ P.C. 500 Delaware Avenue, Suite 1410 Wilmington, Delaware 19801 Telephone: (302) 652-3131 Facsimile: (302) 652-3117 E-mail: ddean@coleschotz.com preilley@coleschotz.com - and - James S. Carr, Esq. Maeghan J. McLoughlin, Esq. KELLEY DRYE & WARREN LLP 101 Park Avenue New York, New York 10178 Tel: (212) 808-7800 Fax: (212) 808-7897 E-mail: jcarr@kelleydrye.com mmcloughlin@kelleydrye.com About American Blue Ribbon 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 was estimated to have 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 AMERICAN BLUE: Franchisee Objects to Plan Confirmation ------------------------------------------------------ Verlander Enterprises, Inc., a franchisee of debtor American Blue Ribbon Holdings, LLC ("ABRH"), objects to Debtors' Second Amended Combined Disclosure Statement and Chapter 11 Plan of Reorganization. Verlander states that the Court should deny confirmation of the Plan because the Debtors have failed to comply with the terms of their own Plan. Alternatively, the Confirmation Hearing should be postponed and the Debtors should be required to issue a new combined Disclosure Statement and Plan providing full and proper notice of the Debtors' intentions regarding assumption. Verlander claims that the provision in section and paragraph (XII. A. 2) is vague and contradictory, and fails to give the Franchisees adequate notice of the Debtors' intentions and the effect of the Plan. Verlander points out that the Debtors have no authority to alter or modify an executory contract through the assumption process. Nevertheless, the Debtors are attempting, illegitimately, to cloak themselves with such authority in the Plan. Verlander asserts that the officers, managers, and employees of Debtor ABRH have engaged in a species of fraud in connection with the payment of prepaid royalties. Specifically, they induced Verlander to prepay 2020 royalties early, shortly before the petition date, by misleading Verlander about the financial condition of the Debtors and by failing to provide any prior notice or warning to Verlander that the Debtors required the protection of the Bankruptcy Code. Verlander further asserts that the Debtors are not entitled to assume Verlander’s Franchise Agreements. Not only is the Debtors’ cure claim estimate grossly undervalued, but the Debtors also have not—and cannot—provide adequate assurance of future performance. A full-text copy of Verlander's objection to plan and disclosure dated August 28, 2020, is available at https://tinyurl.com/y6p86bss from PacerMonitor.com at no charge. Counsel for the Verlander Enterprises: REED SMITH LLP Kurt F. Gwynne (No. 3951) Jason D. Angelo (No. 6009) 1201 North Market Street, Suite 1500 Wilmington, Delaware 19801 Telephone: (302) 778-7500 Facsimile: (302) 778-7575 E-mail: kgwynne@reedsmith.com E-mail: jangelo@reedsmith.com - and - Robert R. Feuille SCOTTHULSE, P.C. P.O. Box 99123 El Paso, Texas 79999-9123 Telephone: (915) 533-2493 Facsimile: (915) 546-8333 E-mail: bfeu@scotthulse.com About American Blue Ribbon 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. AMKOR TECHNOLOGY: Moody's Affirms Ba3 CFR, Outlook Stable --------------------------------------------------------- Moody's Investors Service affirmed the credit ratings of Amkor Technology, Inc., including the Ba3 Corporate Family Rating and the B1 Senior Unsecured Notes rating, following the company's initiation of a quarterly cash dividend. The SGL-2 Speculative Grade Liquidity Rating is unchanged. The outlook remains stable. Although the cash dividend represents a fixed obligation and is thus credit negative, the size of the dividend is modest, consuming less than 10% of cash flow from operations, reducing adjusted free cash flow to debt (latest twelve months ended June 30, 2020) from 16.6% to 14.4% (proforma for the new dividend). Ratings Affirmation: Issuer: Amkor Technology, Inc. Corporate Family Rating of Ba3 Probability of Default Rating of Ba3-PD Senior Unsecured Bonds, Affirmed B1 (LGD5) Outlook Actions: Issuer: Amkor Technology, Inc. Outlook, remains Stable RATINGS RATIONALE The Ba3 CFR reflects Amkor's business position as the second largest outsourced semiconductor assembly and test ("OSAT") company in the world after market leader Advanced Semiconductor Engineering ("ASE"). Amkor has a broad portfolio of advanced manufacturing technologies for semiconductor chip finishing and testing, and benefits from exposure to end markets with increasing semiconductor content, such as the communications (38% of revenues for the twelve months ended June 30, 2020) and automotive & industrial (23%) sectors. Due to its large scale, Amkor should continue to benefit from the secular outsourcing trend in semiconductor production, as semiconductor companies increasingly outsource manufacturing as part of their "fabless" or "fab-lite" manufacturing models. Nevertheless, the assembly and test segment of the semiconductor industry is capital intensive and cyclical. Amkor goes through long periods of very high capital spending which usually leads to pressured free cash flow. Moreover, Amkor has high customer revenue concentration, which Moody's believes limits Amkor's leverage in contract negotiations. The stable outlook reflects Moody's expectation that revenues will increase over the next 12 to 18 months due to the recovery in the Global Automotive market, as well as further growth in the communications and consumer markets. With the increasing revenues, Moody's expects that Amkor's EBITDA margin will also improve such that debt to EBITDA (Moody's adjusted) will decline towards 1.4x over the period. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Amkor's ratings could be upgraded if: -- Amkor's EBITDA margin (Moody's adjusted) is sustained above 25% and -- FCF to debt (Moody's adjusted) is sustained above 15% and -- Amkor maintains a very good liquidity profile and balanced financial policies Amkor's ratings could be downgraded if: -- Its expectation that the EBITDA margin (Moody's adjusted) will be sustained at less than 17%, or -- if FCF to debt (Moody's adjusted) will be sustained below 5%. The SGL-2 Speculative Grade Liquidity rating reflects Amkor's good liquidity profile. Moody's expects Amkor to maintain over $500 million of unrestricted cash ($1.1 billion of cash and short-term investments as of June 30, 2020). Additionally, liquidity support is provided by a $250 million secured ABL revolving credit facility available to Amkor Technology Singapore (maturing July 2023, full availability as of June 30, 2020) and borrowing capacity under other foreign revolvers and term facilities totaling $86 million. Still, the maintenance of a large cash balance is prudent given the capital intensity of Amkor's business and the initiation of the quarterly cash dividend, which will reduce FCF. The Senior Notes are rated B1, which is one notch lower than the Ba3 CFR. The Senior Notes, which are unsecured obligations of Amkor, are structurally subordinated to the Revolver and the other debt issued by Amkor's foreign subsidiaries with respect to the foreign assets which secure the debt of these borrowers. The credit profile is impacted by governance considerations. Amkor's ownership is concentrated, with the Kim Family owning 58.9%. Amkor's board has a large share of independent directors (7 of the 11 directors), with the remainder of the board comprised of the CEO, the former General Counsel, and the Kim Family. Amkor Technology, Inc., based in Tempe, Arizona, is one of the largest providers of outsourced semiconductor assembly and test (OSAT) services for both integrated semiconductor device manufacturers (IDM) and fabless semiconductor companies. The principal methodology used in these ratings was Semiconductor Industry Methodology published in July 2018. ANDES INDUSTRIES: Seeks to Hire Perkins Coie as New Legal Counsel ----------------------------------------------------------------- Andes Industries, Inc. and PCT International, Inc. seek approval from the U.S. Bankruptcy Court for the District of Arizona to employ Perkins Coie LLP as substitute restructuring counsel. The firm will render these services to the Debtors: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and property; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest and advise and consult on the conduct of these chapter 11 cases; (c) advise the Debtors in connection with any contemplated sales of assets or business combinations, formulate and implement appropriate procedures with respect to the closing of any such transactions, and counsel the Debtors in connection with such transactions; (d) advise the Debtors in connection with any post-petition financing arrangements and negotiate and draft related documents, provide advice and counsel with respect to prepetition financing agreements and their possible restructuring; (e) advise the Debtors on matters relating to the assumption, rejection, or assignment of unexpired leases and executory contracts; (f) advise the Debtors with respect to legal issues arising in or relating to the Debtors' ordinary course of business; (g) take all necessary action to protect and preserve the Debtors' estates; (h) prepare, on the Debtors' behalf, all motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; (i) take any necessary action on the Debtors' behalf to obtain confirmation of a chapter 11 plan proposed by the Debtors, as well as object to confirmation of any competing plans; (j) attend meetings with creditors and other third parties and participate in negotiations with respect to the above matters; (k) appear and advance the Debtors' interests before this Court, any appellate courts, and the US Trustee; and (l) perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with these chapter 11 cases not provided by Debtors' special counsel. Perkins Coie LLP's hourly rates are as follows: Lawyers $360 - $1,015 Paralegals $260 - $385 The attorneys primarily responsible for this matter will be Brad Cosman and Jordan Kroop, whose respective hourly rates are $650 and $780. In addition, the firm will seek reimbursement for charges and disbursements incurred in the rendition of legal services. Bradley A. Cosman, an attorney of Perkins Coie LLP, disclosed in court filings that the firm represents no interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Bradley A. Cosman, Esq. Jordan A. Kroop, Esq. Benjamin C. Calleros, Esq. PERKINS COIE LLP 2901 North Central Avenue, Suite 2000 Phoenix, AZ 85012-2788 Telephone: (602) 351-8000 E-mail: BCosman@perkinscoie.com JKroop@perkinscoie.com BCalleros@perkinscoie.com About Andes Industries Creditors EZconn Corporation, Crestwood Capital Corporation, and Devon Investment Inc. filed involuntary bankruptcy petitions against Andes Industries, Inc. and PCT International, Inc. under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Arizona. On Dec. 4, 2019, the Chapter 7 cases were converted to cases under Chapter 11 (Bankr. D. Ariz. Lead Case No. 19-14585). Judge Paul Sala oversees the cases. Debtors have tapped Perkins Coie LLP as legal counsel, Beus Gilbert McGroder PLLC as special counsel, and Keegan Linscott & Associates, PC as financial consultant. The Office of the U.S. Trustee appointed a committee of unsecured creditors on Jan. 29, 2020. The committee is represented by Allen Barnes & Jones, PLC. Debtors filed their joint Chapter 11 plan and disclosure statement on June 8, 2020. ANDES INDUSTRIES: Unsec. to Get 26% in Petitioning Creditors' Plan ------------------------------------------------------------------ EZconn Corporation, eGTran Corporation, Devon Investment, Inc., and Crestwood Capital Corporation (the "Proponents" or "Petitioning Creditors") filed a First Amended Plan of Reorganization and a corresponding Disclosure Statement for debtors Andes Industries, Inc. and PCT International, Inc. dated August 28, 2020. The Plan is based on a simple purchase of the stock of PCT and PCT Vietnam Co., Ltd. from Andes in exchange for an immediate cash infusion of $3.8 million into the combined estates. After the Plan Effective Date, PCT and PCT Vietnam Co., Ltd. will remain in business and retain all employees. Under the Petitioning Creditors' Plan, after payment of any and all allowed administrative and priority expenses, the Petitioning Creditors estimate that the allowed unsecured creditors are to receive their pro rata share of approximately a $1.96 million total cash distribution on the Plan Effective Date or, if claims are contested, after the effective date. Additionally, on the Plan Effective Date, a Litigation Trust will be established to provide an additional source of recovery to Allowed Holders of General Unsecured Claims. The Petitioning Creditors will waive their claims totaling approximately $22.7 million, significantly reducing the pool of unsecured creditors. The Petitioning Creditors' Plan is confirmable on its face, and guarantees a significant and immediate return to legitimate, third-party creditors. The Petitioning Creditors believe that the Petitioning Creditors' Plan will provide all Creditors with the most value. Because of the Debtors' ten-year payment plan, the success of which is based on the Debtors' dubious projections, the net present value of the Debtors' proposed payments to the Allowed Holders of General Unsecured Claims is less than the recovery to Allowed Holders of General Unsecured Creditors under the Petitioning Creditors' Plan. The net present value of the Debtors' proposed payments over ten years to the Allowed Holders of General Unsecured Claims is $1,844,854, which is approximately a 24% recovery. The Petitioning Creditors, on the other hand, propose to pay Allowed Holders of General Unsecured Claims at least $1.96 million on the Plan Effective Date, which would provide at least a 26% recovery to Allowed Holders of General Unsecured Claims. Under the Petitioning Creditors' Plan, the Allowed Holders of General will also receive Pro Rata annual distributions from the proceeds of the Litigation Trust. If the total Allowed Administrative Claims, and Claims in Classes 1, 3, 4, and 6 are less than anticipated, the $1.96 million payment to Allowed Holders of General Unsecured Claims will increase. A full-text copy of the Petitioning Creditors' First Amended Disclosure Statement dated August 28, 2020, is available at https://tinyurl.com/y3n8xoou from PacerMonitor at no charge. Attorneys for Petitioning Creditors: Christopher H. Bayley Benjamin W. Reeves SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren, Suite 1900 Phoenix, Arizona 85004-2202 Telephone: 602.382.6000 E-mail: cbayley@swlaw.com breeves@swlaw.com mkjartanson@swlaw.com Greer N. Shaw HAGENS BERMAN SOBOL SHAPIRO LLP 301 N. Lake Ave., Suite 920 Pasadena, California 91101 Telephone: 213-330-7145 E-mail: greers@hbsslaw.com About Andes Industries and PCT International Creditors EZconn Corporation, Crestwood Capital Corporation, and Devon Investment Inc. filed involuntary bankruptcy petitions against Andes Industries, Inc., and PCT International, Inc., under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Arizona. On Dec. 4, 2019, the Chapter 7 cases were converted to cases under Chapter 11 (Bankr. D. Ariz. Lead Case No. 19-14585). Judge Paul Sala oversees the cases. Sacks Tierney P.A. is the Debtors' legal counsel. ANNAGEN LLC: Trustee Seeks Approval to Hire Legal Counsel --------------------------------------------------------- Lawrence Frank, the appointed trustee in the Chapter 11 case of Annagen, LLC, seeks approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ his own firm, the Law Office of Lawrence G. Frank, to provide legal services in connection with Debtor's Chapter 11 case. The firm's services are as follows: (a) assist the trustee in monitoring the progress of the business to determine whether a sale or continuation of business is in the best interest of creditors; (b) if continuation of business is in the best interest of creditors, formulate a plan of reorganization; (c) assist the trustee in determining whether any preferential or fraudulent transfers have taken place; (d) review claims to determine their validity; (e) handle any and all legal problems which may arise during the course of the administration of the estate. The firm will be paid at $350 per hour, plus costs for services rendered. Mr. Frank disclosed in court filings that he has no connection with the Debtor, its creditors or any other party-in-interest and he represents no interest adverse to the trustee in matters upon which he is to be engaged, and his employment would be in the best interest of the estate. The attorney can be reached at: Lawrence G. Frank, Esq. LAW OFFICE OF LAWRENCE G. FRANK 100 Aspen Drive Dillsburg, PA 17019 Telephone: (717) 234-7455 E-mail: lawrencegfrank@gmail.com About Annagen LLC Annagen, LLC is a privately held corporation that provides colocation, infrastructure and application hosting services that work side by side with a large variety of industries including healthcare, financial, education, transportation and government to accelerate their technology evolution from the ground to the cloud. It operates a data center in Harrisburg, Pa. Visit https://www.netrepid.com for more information. Annagen filed a Chapter 11 petition (Bankr. M.D. Pa. Case No. 19-03631) on Aug. 27, 2019. The petition was signed by Annagen President Samuel D. Coyl. At the time of the filing, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Henry W. Van Eck oversees the case. The Debtor has tapped Purcell, Krug & Haller and the Law Offices of John M. Hyams as its bankruptcy counsel; Thomas, Thomas & Hafer, LLC as its special counsel; and RSB & Associates, P.C. as its accountant. On October 14, 2020, Lawrence G. Frank, Esq., was appointed as trustee in Debtor's Chapter 11 case. ARCHDIOCESE OF SANTA FE: Selling Sandia Park Property for $152K --------------------------------------------------------------- Roman Catholic Church of The Archdiocese of Santa Fe asks the U.S. Bankruptcy Court for the District of New Mexico to authorize the sale of approximately 10 acres of vacant land on La Madera Road, Sandia Park, New Mexico to David and Jennifer Soule for $152,000. The Debtor is the owner of the Property. It hired Liz McGuire, associate broker with Coldwell Banker Legacy as its real estate broker to market the Property on behalf of the Estate. Pursuant to the terms of the Listing Agreement, the Broker will be paid 10% of the sales price plus applicable tax. The commission due to the Broker should be paid to Broker at closing, as should all other costs of sale. The net proceeds will be delivered to the Debtor. On September 30, 2020, the Debtor and the Buyers executed a Purchase Agreement. Pursuant to the terms of the Contract, which are subject to the approval of the Court, the Buyers have agreed to purchase, and the Debtor has agreed to sell the Property for $152,000. The Debtor asks that the sale of the Property be free and clear of all liens, claims, and interests with any such liens, claims, and interests to attach to the net sale proceeds. The Debtor has determined that, in its business judgment, the proposed sale of the Property to the Buyers in accordance with the terms of the Contract is for fair and reasonable consideration, is in good faith, does not unfairly benefit any party in interest, will maximize the value of the Estate, and should be authorized. Finally, the Debtor asks that the Court waives the 14-day stay of an order resulting from the Motion otherwise required by Fed. R. Bankr. P. 6004(h). A copy of the Agreement is available at https://tinyurl.com/yy5dovzc from PacerMonitor.com free of charge. About Roman Catholic Church of The Archdiocese of Santa Fe The Roman Catholic Church of the Archdiocese of Santa Fe -- https://www.archdiosf.org/ -- is an ecclesiastical territory or diocese of the southwestern region of the United States in the state of New Mexico. At present, the Archdiocese of Santa Fe covers an area of 61,142 square miles. There are 93 parish seats and 226 active missions throughout this area. The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr. D.N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse claims. It reported total assets of $49,184,579 and total liabilities of $3,700,000 as of the bankruptcy filing. Judge David T. Thuma oversees the case. The archdiocese tapped Elsaesser Anderson, Chtd. and Walker & Associates, P.C., as bankruptcy counsel; Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A as special counsel; and REDW, LLC as accountant. Liz McGuire, associate broker with Coldwell Banker Legacy, is the real estate broker. AUTHENTIKI LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Authentiki, LLC (Lead Debtor) 20-03322 58 Ionia Ave. SW Grand Rapids, MI 49503 MSSH, LLC 20-03323 DBA Max's South Seas Hideaway 58 Ionia Ave SW Grand Rapids, MI 49503 Business Description: Authentiki was established in July 2018 to own and operate tiki-themed restaurants through wholly owned subsidiaries. Authentiki owns 100% of the outstanding member units of MSSH, LLC dba Max's South Seas Hideaway, which was formed in April 2019 and has its principal place of business at 58 Ionia Avenue SW, Grand Rapids, Michigan. Chapter 11 Petition Date: October 29, 2020 Court: United States Bankruptcy Court Western District of Michigan Judge: Hon. James W. Boyd Debtors' Counsel: Joseph K. Grekin, Esq. Howard M. Borin, Esq. John J. Stockdale, Jr. SCHAFER AND WEINER, PLLC 40950 Woodward Ave., Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: jgrekin@schaferandweiner.com HBorin@schaferandweiner.com JStockdale@schaferandweiner.com Authentiki's Total Assets: $79,691 Authentiki's Total Liabilities: $2,049,539 MSSH, LLC's Total Assets: $2,545,740 MSSH, LLC's Total Liabilities: $987,390 The petitions were signed by Mark A. Sellers, III, authorized and managing member. Copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XTDTJ5Y/Authentiki_LLC__miwbke-20-03322__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/VVDTXUI/MSSH_LLC__miwbke-20-03323__0001.0.pdf?mcid=tGE4TAMA AVANTOR FUNDING: Fitch Assigns BB+ Rating on Sec. Term Loan ----------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR1' rating to Avantor Funding Inc.'s senior secured term loan and secured note issuance. Fitch expects proceeds to help fund the redemption of the 4.75% EUR500 million secured notes due 2024 and the 6.0% $1.5 billion secured notes due 2024 and for the transaction to be leverage neutral. This transaction is expected to reduce overall cash interest expense, and help extend the company's maturity schedule beyond its 2024 maturity wall. The Rating Outlook is Stable. The ratings apply to $6.1 billion of debt at June 30, 2020. KEY RATING DRIVERS Manageable Coronavirus Effects: Fitch expects some near-term demand softness for Avantor's products as a result of business disruption related to the coronavirus influencing the company's customers. However, the business profile is relatively resilient because of good end market diversification and non-cyclical demand for healthcare products. Avantor's biopharma end markets have held up fairly well and have benefited from COVID-19-related testing demand. The industrials end markets have seen more significant business disruption effects from the pandemic, but because of the diversity of the customers served in the advanced technologies and applied materials businesses, demand for the company's products has remained relatively stable. Fitch anticipates some EBITDA margin pressure in the near term due to weaker demand but expects this to be partially offset by the company's ability to reduce operating expenses and continued synergy realization from the VWR, Inc. acquisition. Fitch's forecast incorporates roughly $220 million of annual cost synergies by YE 2020. Ample Liquidity during Pandemic: Fitch expects Avantor to maintain a comfortable liquidity cushion throughout the business disruption related to the pandemic. Between cash on hand, ongoing cash generation and committed lines of revolving credit, Fitch expects the company to have adequate liquidity to support operations, capital spending needs, preferred dividends and required term loan amortization during 2020. Avantor's good level of FCF generation is supportive of the 'BB-' Issuer Default Rating (IDR) and could exceed $300 million annually in 2020-2023, even though 2020 will face operational headwinds related to the coronavirus, representing a FCF margin of 5%-6%. Leverage Continues to Decline: Avantor's gross debt/EBITDA was 4.7x at June 30, 2020, and Fitch forecasts leverage of 5.0x at the end of 2020, assuming some pressure related to the coronavirus on EBITDA and limited debt reduction as the company prioritizes maintaining liquidity in the near term. The company has successfully reduced debt since the merger with VWR, from a Fitch-calculated nearly 10x following the close of the transaction. This is the result of the combined effects of EBITDA growth and debt reduction, which was partly funded through the proceeds of an initial public offering. Good Progress Realizing Cost Synergies: EBITDA growth has been helped by the realization of cost synergies since the VWR merger. Continued progress will help to offset coronavirus-related pressure on operating margins during 2020. Since the closing of the transaction the company has realized $300 million of synergies on a run-rate basis as of March 31, 2020, and Fitch's forecast incorporates roughly $220 million of annual cost synergies by YE 2020. Fitch believes revenue synergies should also continue to be achievable going forward but does not incorporate this in its forecast. Strong Competitive Position and Good Diversification: Avantor is well diversified through end markets and product categories, with biopharma representing about 50% of total sales. Advanced technologies and applied materials end markets represent roughly 25% of sales and includes a mix of more cyclical end markets that benefit from highly recurring consumable sales. Consistent cash generation is supported through highly diversified consumables- and service-focused revenues representing roughly 85% of sales, and more limited exposure to equipment and instrumentation (15% of sales) versus peers. Strength and diversification in high-growth end markets should offset slower growth and cyclical end markets, resulting in single-digit revenue growth above the average life sciences industry. DERIVATION SUMMARY Avantor's strongest competitors are significantly larger, with leading positions in the broader life sciences industry and greater financial flexibility. Thermo Fisher (BBB/Stable) is Avantor's closest peer within the lab products industry. Thermo Fisher, a direct distribution competitor, is materially larger than Avantor, has an industry-leading manufacturing business, and is much more conservatively capitalized. Other 'BB-' rated healthcare companies operating in different industry subsectors typically have leverage sensitivities in the 4.0x-5.0x range. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Coronavirus affects 2Q20 revenue the most, but strengths in biopharma and the expected return to work for Avantor's customers in 2H20 will aid recovery in the second half of the year. As a result, Fitch forecasts flat revenue growth for 2020. EBITDA margins see some compression of roughly 30 bps, but variable cost structure and continued cost synergies from VWR acquisition somewhat offset dampened revenue pull-through; -- 2021-2023 organic revenue growth in the low- to mid-single-digits; -- 2021-2023 EBITDA margins of 17.75% to 18%. Fitch's EBITDA forecast includes $220 million of cost synergies by the third year after the Avantor acquisition; -- Capex is forecasted to be around 1.5% of revenues; -- FCF exceeding $300 million in 2020-2023; -- Gross debt/EBITDA is maintained around 5.0x in 2020 and maintained between 4.5x-5.0x through 2022. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Operating with gross debt/EBITDA sustained below 4.5x; -- Continued operational strength that results in (cash flow from operations - capex)/total debt around or above 7.5%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Operating with gross debt/EBITDA sustained above 5.0x; -- Pressures to profitability or increased expenses that result in (cash flow from operations - capex)/total debt sustained below 6%. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Liquidity was supported by cash on hand of $415 million and availability of $248 million under a $250 million first lien secured revolver due 2022 as of June 30, 2020. The revolver was upsized to $515 million in July 2020. Avantor's senior secured credit facility does not include financial maintenance covenants aside from a springing first lien net leverage covenant of 7.35x if 35% of the revolver is drawn. Additionally, working capital needs are supported by a $300 million accounts receivable securitization facility, of which $287 million was unused at June 30, 2020. Debt Maturities Manageable: The company's debt maturities and amortizations are manageable. The refinancing transaction will push out the 2024 maturity wall, leaving the nearest term maturity to be the receivables facility maturing in March 2023. Senior Unsecured Notes Notched Up: Fitch rates the senior unsecured notes 'BB'/'RR2', one notch above the IDR of 'BB-'. While the debt structure is weighted toward secured debt at roughly 60% of total, Fitch estimates superior recovery for both the secured and unsecured. 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. AVANTOR FUNDING: Moody's Rates New EUR550MM First Lien Notes Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Avantor Funding, Inc. proposed EUR550 million of new senior first lien notes due 2025. There are no changes to Avantor's existing ratings including the B1 Corporate Family Rating, B1-PD Probability of Default Rating, Ba2 senior secured rating, and SGL-1 Speculative Grade Liquidity rating. The outlook remains positive. Proceeds of the offering, along with the net proceeds from an incremental term loan financing, borrowings under Avantor's existing A/R facility and cash on hand, will be used to redeem all of its 6% Senior First Lien Notes due 2024 and 4.75% Senior First Lien Notes due 2024, and to pay related fees and expenses. Moody's views the transaction as credit positive as it will lower interest costs and extend Avantor's debt maturity profile. Moody's anticipates that Avantor's refinancing strategy will be leverage-neutral, with pro forma debt/EBITDA of close to 5.0x. Ratings assigned: Issuer: Avantor Funding, Inc. Senior Secured First Lien Notes due 2025, Assigned Ba2 (LGD2) RATINGS RATIONALE Avantor's B1 CFR reflects moderately high financial leverage with adjusted debt/EBITDA of 5.0x as of June 30, 2020. The rating is supported by the steady and largely recurring nature of around 85% of revenue, as well as high customer switching costs associated with the ultra-high purity materials business. It also reflects good scale with revenues just over $6 billion and good customer, geographic, and product diversification. Moody's expects Avantor will generate strong free cash flow over the next 12-18 months despite headwinds resulting from the coronavirus pandemic. The Speculative Grade Liquidity Rating of SGL-1 reflects Moody's expectation that Avantor's liquidity will remain very good over the next 12 to 18 months. Avantor's liquidity is supported by $415 million of cash as of June 30, 2020. Moody's estimates that Avantor will generate over $500 million of free cash flow over the next 12 months, aided by working capital management and lower interest expense, and reduced corporate restructuring and integration costs. External liquidity is supported by a $515 million senior secured revolving credit facility expiring in July 2025. Furthermore, the company has an accounts receivable securitization facility (unrated) that provides for borrowings of up to $300 million, which expires in March 2023. The positive outlook reflects Moody's expectation that Avantor will reduce adjusted debt/EBITDA to the 4.5 -- 5.0 times range over the next 12-18 months, primarily through debt repayment and to a lesser extent earnings growth. Avantor faces some degree of environmental risk due to the handling of, manufacturing, use or sale of substances that are or could be classified as toxic or hazardous materials. From a governance standpoint, Avantor has had a publicly stated debt/EBITDA target range of 2.0 - 4.0 times since its IPO in July 2019; however, it is currently above that range. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Avantor can sustain revenue and earnings growth despite business headwinds arising from the ongoing coronavirus outbreak. Specifically, debt to EBITDA sustained below 5.0 times would support an upgrade. The ratings could be downgraded if Avantor is unable to consistently produce positive free cash flow. A downgrade could also occur if debt to EBITDA is sustained above 5.75 times. Avantor is a global provider of mission critical products and services to the life sciences and advanced technologies & applied materials industries. Headquartered in Pennsylvania, the company generates revenue of roughly $6 billion annually. The principal methodology used in this rating was Distribution & Supply Chain Services Industry published in June 2018. AVERY'S USED CARS: Wins Confirmation of Plan -------------------------------------------- Judge Michael G. Williamson has ruled that the Disclosure Statement of Avery's Used Cars & Trucks, Inc., complies with Section 1125 of the Bankruptcy Code and is finally approved as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Plan of Reorganization filed on April 3, 2019 is confirmed pursuant to Section 1129(a) of the Bankruptcy Code. The Court will conduct a post-confirmation status conference in this case on December 16, 2020 at 9:30 a.m. in Courtroom 8A, Sam M. Gibbons United States Courthouse, 810 N. Florida Avenue, Tampa, FL 33602. The Objection to Confirmation is overruled. Copies of a Solicitation Package containing the Disclosure Statement, the Plan, the Disclosure Statement Order, and the Ballot were served on all creditors entitled to vote on the Plan. The Debtor filed a Second Amended Ballot Tabulation which reflects the acceptance of all impaired classes of creditors. About Avery's Used Cars & Trucks Inc. Avery's Used Cars & Trucks Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-10428) on Dec. 4, 2018. At the time of the filing, the Debtor estimated assets of less than $1 million and liabilities of less than $500,000. The case has been assigned to Judge Michael G. Williamson. BANK 2017-BNK9: Fitch Cuts Rating on Class X-F Certs to 'CCC' ------------------------------------------------------------- Fitch Ratings has downgraded four and affirmed 12 classes of BANK 2017-BNK9 Commercial Mortgage Pass-Through Certificates, Series 2017-BNK9. In addition, Fitch has revised the Rating Outlook on two classes to Negative from Stable. RATING ACTIONS BANK 2017-BNK9 Class A-1 06540RAA2; LT AAAsf Affirmed; previously at AAAsf Class A-2 06540RAB0; LT AAAsf Affirmed; previously at AAAsf Class A-3 06540RAD6; LT AAAsf Affirmed; previously at AAAsf Class A-4 06540RAE4; LT AAAsf Affirmed; previously at AAAsf Class A-S 06540RAH7; LT AAAsf Affirmed; previously at AAAsf Class A-SB 06540RAC8; LT AAAsf Affirmed; previously at AAAsf Class B 06540RAJ3; LT AA-sf Affirmed; previously at AA-sf Class C 06540RAK0; LT A-sf Affirmed; previously at A-sf Class D 06540RAU8; LT BBB-sf Affirmed; previously at BBB-sf Class E 06540RAW4; LT Bsf Downgrade; previously at BB+sf Class F 06540RAY0; LT CCCsf Downgrade; previously at B+sf Class X-A 06540RAF1; LT AAAsf Affirmed; previously at AAAsf Class X-B 06540RAG9; LT AA-sf Affirmed; previously at AA-sf Class X-D 06540RAL8; LT BBB-sf Affirmed; previously at BBB-sf Class X-E 06540RAN4; LT Bsf Downgrade; previously at BB+sf Class X-F 06540RAQ7; LT CCCsf Downgrade; previously at B+sf KEY RATING DRIVERS Increased Loss Expectations Driven by Fitch Loans of Concern: The downgrades and Negative Outlook revisions reflect increased loss expectations for the pool, driven primarily by a greater number of Fitch Loans of Concerns (FLOCs) and higher loss expectations since the prior rating action on the specially serviced Orland Square loan (1% of pool) and the hotel and retail FLOCs that have been impacted by the slowdown in economic activity related to the coronavirus pandemic. Nine loans (31.1%), including three specially serviced loans (3.5%), were identified as FLOCs. The largest increase in loss since the prior rating action is the fourth largest loan, Marriott at Legacy Town Center (7.7%), which is secured by a 404-key, full-service hotel located in Plano, TX. The servicer-reported TTM June 2020 NOI DSCR fell to 1.47x from 2.73x at YE 2019. The loan converted to principal and interest payments in December 2019. As of TTM June 2020, occupancy, ADR and RevPAR were 48%, $191 and $91, respectively, compared to 72%, $185 and $134 around the time of issuance (as of TTM August 2017). In April 2019, the property completed a $17.7 million PIP, which renovated guestrooms and the lobby. The hotel, which faces significant market competition, is located adjacent to the Legacy West development that houses the headquarters for Toyota, FedEx Office and Liberty Mutual. The BWI Airport Marriott loan (4.4%), which has the next largest increase in loss since the prior action, is secured by a 315-key, full-service hotel located just north of the Baltimore/Washington International Thurgood Marshall Airport (BWI). Property-level NOI had already fallen 7.7% between 2018 and 2019 due to higher operating expenses. TTM June 2020 is 17.8% below YE 2019 due to lower room and food and beverage revenues as a result of the pandemic. TTM June 2020 occupancy, ADR and RevPar were 61.5%, $124 and $76, respectively, compared to 79.1%, $128 and $101 for TTM June 2019 and 75%, $135 and $101 around the time of issuance (as of TTM September 2017). The servicer-reported TTM March 2020 NOI DSCR was 1.41x, down from 1.63x at YE 2019 and 1.74x for TTM June 2019. The specially serviced Orland Square loan (1.0%), which is secured by a 163,466-sf retail property that was previously anchored by a Carson's Furniture Gallery (44.0% of NRA) located in Orland Park, IL, has suffered significant occupancy declines. Current occupancy is only 40% and YE 2019 NOI is 43% below 2018. Carson's closed its store at the property in connection with its parent company Bon-Ton's 2018 bankruptcy filing. The space has not been backfilled. In addition, Charter Fitness (11.1%) announced it was ceasing operations in May 2020 and requested to terminate its lease. Remaining tenants include Orland Park FEC (d/b/a Gizmos Fun Factory; 22.6%) and Sky Zone (17.5%). The loan was transferred to special servicing in March 2020 due to Imminent monetary default at borrower's request as a result of the COVID-19 pandemic. The borrower is no longer interested in owning the asset; the title is being transferred back to the lender. The Warwick Mall is an approximately 588,000 sf regional mall located in Warwick, RI. Non-collateral anchors include Macy's and Target. Major collateral tenants include JCPenney (23.4% of collateral NRA; lease expiry in March 2030), Jordan's Furniture (19.3%, December 2021), Showcase Cinema (9.7%; April 2021), Nordstrom Rack (6.4%, November 2022), and Old Navy (3.8%, January 2021). The property was 93% occupied as of the June 2020 rent roll. Near-term lease rollover is concentrated in 2021, with 35% of the collateral NRA, including Jordan's Furniture, Showcase Cinema and Old Navy; an additional 10% rolls in 2022 and 7.5% in 2023. The mall reopened in June 2020 after closing in March due to the pandemic; all major tenants are open for business, except for the theater. The sponsorship, which has developed and managed the property since inception, consists of the Bliss family, the Lane family, and the Brennan family. The Laguna Cliffs Marriott (8.2%), which is a 378-key, full-service hotel located in Dana Point, CA, has been closed since March 2020 due to the pandemic. The property is expected to re-open in mid-November 2020. The property reflects high barriers to entry, stringent development restrictions, a lack of new supply and the irreplaceable location proximate to the Pacific Ocean. In September 2018, the property completed an $18.5 million PIP, which renovated all guestrooms and the restaurant. Per STR's June 2019 report, the TTM June 2019 occupancy penetration was 88.2%; ADR penetration was 102.6%; and RevPar penetration was 90.5%. Additional Stresses Applied due to Coronavirus Exposure: Fitch expects significant economic impacts to certain hotels, retail, and multifamily properties from the pandemic due to the related reductions in travel and tourism, temporary property closures and lack of clarity at this time on the potential duration of the impacts. Five loans (22%) are secured by hotel properties and 21 loans (28.6%) are secured by retail properties. The non-specially serviced hotel loans have a weighted average (WA) NOI DSCR of 2.41x and can sustain an average NOI decline of 56.9% before the DSCR would fall below 1.0x. The non-specially serviced retail loans have a WA NOI DSCR of 2.30x and can sustain an average NOI decline of 53.6% before the DSCR would fall below 1.0x. Fitch's base case analysis applied additional stresses to three hotel loans and six retail loans to account for potential cash flow disruptions due to the coronavirus pandemic; this analysis contributed to the downgrades and Negative Outlooks. Alternative Loss Consideration: Fitch performed an additional sensitivity on the Warwick Mall loan (2.9%) which factored in a potential outsized loss of 25% to the balloon balance to reflect refinance concerns, the secondary location and non-institutional sponsorship of the regional mall and significant upcoming lease rollover of the major collateral tenants over the next two years; this drove the Negative Outlooks on classes D and E. Minimal Change in Credit Enhancement (CE): As of the October 2020 remittance reporting, the pool's aggregate principal balance has been paid down by 1.3% to $1.04 billion from $1.05 billion at issuance. The pool is scheduled to amortize by 7.0% of the initial pool balance prior to maturity. Of the current pool, approximately 58% consists of full term, interest-only loans and 23% have a partial, interest-only component. One loan (0.2%) has been defeased. RATING SENSITIVITIES The Negative Outlooks on classes D and E reflect the potential for downgrades should performance of the FLOCs deteriorate further and concerns of the overall negative impact stemming from reduced economic activity as a result of the coronavirus pandemic. The Stable Outlooks on classes A-1 through C reflect the generally stable performance of the remainder of the pool and expected continued amortization. Factors that could, individually or collectively, lead to positive rating action/upgrade: Sensitivity factors that lead to upgrades would include stable to improved asset performance, particularly on the FLOCs, coupled with additional paydown and/or defeasance. Upgrades to classes B and X-B would only occur with significant improvement in CE and/or defeasance; however, are not likely unless the FLOCs stabilize. Upgrades to the class C are also not likely until FLOCs stabilize, but would be limited based on sensitivity to loan concentrations. Classes would not be upgraded above 'Asf' if interest shortfalls are likely. Upgrades to classes D, X-D, E and X-E are not likely until the later years in the transaction and only if the performance of the remaining pool is stable and/or properties vulnerable to the coronavirus return to pre-pandemic levels, and there is sufficient CE. Upgrades to classes F and X-F are extremely unlikely to be upgraded absent significant performance improvement on the FLOCs and substantially higher recoveries than expected on the specially serviced loans/assets. Factors that could, individually or collectively, lead to negative rating action/downgrade: Sensitivity factors that lead to downgrades include an increase in pool level losses from underperforming or specially serviced loans/assets. Downgrades to the 'AAAsf' and 'AAsf' category classes are not likely due to their high credit enhancement and position in the capital structure, but may occur should interest shortfalls affect these classes. A downgrade to the 'Asf' category is possible should expected losses for the pool increase significantly and/or should all the loans susceptible to the coronavirus pandemic suffer losses. Downgrades to classes D, X-D, E and X-E are possible should performance of the FLOCs continue to decline, should additionally loans transfer to special servicing and/or should loans susceptible to the coronavirus pandemic not stabilize. A downgrade to class F would occur as losses are realized or become more certain. In addition to its baseline scenario related to the coronavirus, Fitch also envisions a downside scenario where the health crisis is prolonged beyond 2021; should this scenario play out, Fitch expects additional negative rating actions, including downgrades of a category or more and Negative Outlook revisions. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. BARTLETT TRAYNOR: Wins Confirmation of Reorganization Plan ---------------------------------------------------------- Bartlett Traynor & London, LLC, in September 2020 won confirmation of its Fourth Amended Plan of Reorganization. Of the classes of Claims, Class 5B, Class 6 and Class 7 are permitted to vote on the Plan: * The Class 5B Claim holders, a Fulton Bank Subrogated Claims, have affirmatively voted to accept the Plan. Three (3) Class 5B Claim holders have voted to accept the Plan. * The Class 6 Claim holder, McCoy Brothers, has affirmatively voted to accept the Plan. * The Class 7 Claim holders, the General Unsecured Creditors, have affirmatively voted to accept the Plan in that more than two-third in amount of those voting in each such class, and more than one-half in number of those voting in each such class have accepted the Plan. All Class 7 Claim holders that voted on the Plan, have voted to accept the Plan. Because the Class 7 Claim holders, the General Unsecured Creditors, have voted to accept the Plan, the Plan meets the requirements of Section 1129(b) of the Bankruptcy Code as to confirmation and confirmation can occur without resulting to a cram down as to such class of unsecured creditors. Pursuant to the provisions set forth in Section 1129(b) of the Bankruptcy Code, the Plan can be accepted because the provisions of Section 1129(b) are met, particularly with respect to the fact that the equity holders receive nothing under the Plan and the Class 7 unsecured Claim holders are receiving all that they would otherwise receive in a liquidation. A copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/6WATIPI/Bartlett_Traynor__London_LLC__pambke-18-03520__0254.0.pdf?mcid=tGE4TAMA About Bartlett Traynor & London Bartlett Traynor & London, LLC, which conducts business under the name Harrisburg Midtown Arts Center, is a music and arts center at 1110 N. Third St., Harrisburg, Pennsylvania. Bartlett Traynor & London sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 18-03520) on Aug. 23, 2018. In the petition signed by John Traynor, member, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Henry W. Van Eck presides over the case. The Debtor tapped Cunningham Chernicoff & Warshawsky, P.C., as counsel. BAY INN: Seeks Approval to Hire Buddy D. Ford as Legal Counsel -------------------------------------------------------------- Bay Inn & Suites of Loxley, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Buddy D. Ford, P.A. as its legal counsel. The firm will render these professional services to the Debtor: (a) analyze the financial situation, and render advice and assist the Debtor in determining whether to file a petition under Title 11, United States Code; (b) advise the Debtor with regard to the powers and duties of the Debtor and as debtor-in-possession in the continued operation of the business and management of the property of the estate; (c) prepare and file the petition, schedules of assets and liabilities, statement of affairs, and other documents required by the Court; (d) represent the Debtor at the Section 341 Creditors' meeting; (e) give the Debtor legal advice with respect to its powers and duties as Debtor and as debtor-in-possession in the continued operation of its business and management of its property; if appropriate; (f) advise the Debtor with respect to its responsibilities in complying with the United States Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (g) prepare, on behalf of the Debtor, necessary motions, pleadings, applications, answers, orders, complaints, and other legal papers and appear at hearings thereon; (h) protect the interest of the Debtor in all matters pending before the court; (i) represent the Debtor in negotiation with its creditors in the preparation of the Chapter 11 Plan; and (j) perform all other legal services for Debtor as debtor-in-possession which may be necessary herein, and it is necessary for Debtor as debtor-in-possession to employ this attorney for such professional services. The firm's standard hourly rates are as follows: Buddy D. Ford $425 Senior Associate Attorneys $375 Junior Associate Attorneys $300 Senior Paralegal Services $150 Junior Paralegal Services $100 In addition, the firm will be reimbursed for actual and necessary expenses incurred in connection with this representation. Prior to the commencement of this case, the Debtor paid an advance fee of $11,800.00, which consists of $2,000.00 pre-filing fee retainer, $8,083.00 post-filing fee/cost retainer, and $1,717.00 filing fee. Buddy D. Ford, P.A. represents no interest adverse to the Debtor or the estate in the matters upon which it is to be engaged. The firm's employment would be in the best interests of the estate. The firm can be reached through: Buddy D. Ford, Esq. Jonathan A. Semach, Esq. Heather M. Reel, Esq. BUDDY D. FORD, P.A. 9301 West Hillsborough Avenue Tampa, FL 33615-3008 Telephone: (813) 877-4669 E-mail: Buddy@tampaesq.com Jonathan@tampaesq.com Heather@tampaesq.com About Bay Inn & Suites of Loxley Bay Inn & Suites of Loxley, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-07944) on October 26, 2020. At the time of the filing, Debtor disclosed assets of between $1 million to $10 million and liabilities of the same range. Buddy D. Ford, P.A. serves as the Debtor's legal counsel. BENJA INCORPORATED: Busey Bank Seeks Appointment of Trustee ----------------------------------------------------------- Busey Bank asks the U.S. Bankruptcy Court for the Northern District of California for the appointment of a chapter 11 trustee for the bankruptcy estate of Benja Incorporated. In the alternative, the Bank requests conversion of the Benja's case to a case under chapter 7. The Bank contends that Benja has committed extensive fraudulent actions against it, against other lenders and investors by and through Andrew J. Chapin, the Benja's purported CEO and director. The Bank asserts that Chapin has engaged, and has caused Benja to engage, in an extensive pattern of malfeasance and fraud which necessarily requires investigation by a trustee. The Bank tells the Court that it has discovered that Chapin put forth fake financial documents of Benja to support his false representations to lenders and investors. The Bank alleges that, among other things, Chapin fraudulently doctored Busey Bank Statements of Benja's deposit account to reflect numerous large and fictitious deposits to inflate Benja's bank balances to raise capital. The Bank further discloses that Chapin corresponded with investors using a fictitious Benja e-mail account for Benja's purported bookkeeper as well as a fake email account for a large firm lawyer he falsely presented as representing the Debtor in an investment transaction. The Bank alleges that Benja's bankruptcy filing is a desperate attempt to forestall the disclosure of Chapin's extensive fraudulent and deceitful actions ostensibly in furtherance of Benja's business, to the detriment of the Bank and other creditors and investors. The Bank asserts that the only way to protect the interests of creditors and investors is the immediate appointment of an independent fiduciary to oversee the administration of Benja's estate and to investigate and pursue claims and causes of action against Chapin and those persons and entities that received the benefit of the loans and investments he fraudulently obtained from the Bank, other lenders and investors. Attorneys for Busey Bank: Randye B. Soref, Esq. Tanya Behnam, Esq. POLSINELLI LLP 2049 Century Park East, Suite 2900 Los Angeles, CA 90067 Telephone: (310) 556-1801 Facsimile: (310) 556-1802 Email: rsoref@polsinelli.com tbehnam@polsinelli.com -- and -- Jerry L. Switzer, Jr., Esq. Jean Soh, Esq. POLSINELLI PC 150 North Riverside Plaza, Suite 3000 Chicago, IL 60606 Telephone: (312) 819-1900 Facsimile: (312) 819-1910 Email: jswitzer@polsinelli.com jsoh@polsinelli.com About Benja Incorporated Benja Incorporated -- https://benja.co -- operates a shoppable media network. Benja sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30819) on October 15, 2020. The petition was signed by Andrew J. Chapin, president and CEO. The case is assigned to Judge Dennis Montali. The Debtor is represented by Paul S. Manasian, Esq. At the time of filing, the Debtor had estimated both assets and liabilities between $1 million to $10 million. BIOSTAGE INC: Appoints James Mastridge as Interim VP of Finance --------------------------------------------------------------- Biostage, Inc. appointed James Mastridge as interim vice president of finance. In such role, Mr. Mastridge will be the Company's principal accounting officer and principal financial officer. In connection with Mr. Mastridge's appointment, the Company determined that Peter Chakoutis, the Company's former vice president of finance, who has been on temporary leave of absence for personal reasons, would not be returning to the Company at this time. Mr. Mastridge, age 54, is a Director of Accounting and Reporting, at Danforth Advisors, LLC and has over twenty five years of experience as a finance professional in accounting and reporting roles. Prior to joining Danforth, Mr. Mastridge served as Director of Accounting of Osmotica Pharmaceuticals plc from July 2018 through September 2020, and Director of Accounting & Reporting at Eli Lilly and Company from 2008 to 2017. Mr. Mastridge graduated from Rutgers University with a B.S. in Accounting and is a licensed Certified Public Accountant in New Jersey. The Company entered into a Consulting Agreement with Danforth, executed on Oct. 6, 2020, pursuant to which Danforth will provide strategic advisory, finance, accounting, human resources and administrative functions to the Company, including the services to be provided by Mr. Mastridge. The Company will pay Danforth an hourly rate of $225.00 per hour for such services and will reimburse Danforth for expenses. The Consulting Agreement's term continues until either party gives notice of termination. The Consulting Agreement may be terminated by the Company or Danforth with cause, upon 30 days written notice and without cause, upon 60 days written notice. About Biostage Inc. Headquartered in Holliston, Massachusetts, Biostage -- http://www.biostage.com-- is a bio-engineering company that is developing next-generation esophageal implants. The Company's Cellspan technology combines a proprietary, biocompatible scaffold with a patient's own cells to create an esophageal implant that could potentially be used to treat pediatric esophageal atresia and other conditions that affect the esophagus. The Company's esophageal implant leverages the body's inherent capacity to heal itself as it is a "living tube" that facilitates regeneration of esophageal tissue and triggers a positive host response resulting in a tissue-engineered neo-conduit that restores continuity of the esophagus. These implants have the potential to dramatically improve the quality of life for children and adults. Biostage reported a net loss of $8.33 million for the year ended Dec. 31, 2019, compared to a net loss of $7.53 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $1.38 million in total assets, $1.15 million in total liabilities, and $230,000 in total stockholders' equity. RSM US LLP, in Boston, Massachusetts, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations, has an accumulated deficit, uses cash flows in operations, and will require additional financing to continue to fund operations. This raises substantial doubt about the Company's ability to continue as a going concern. BJ SERVICES: Creditors Plan to Sue Lenders to Recover $50M+ ----------------------------------------------------------- Daniel Gill of Bloomberg Law reports that the creditors of bankrupt fracking company BJ Services are asking a judge to allow them to sue to invalidate some pre-bankruptcy liens and recover more than $50 million. BJ Services has "irrevocably waived and relinquished" its rights to sue its asset-backed lenders under prior bankruptcy court orders, the unsecured creditors committee said in an Oct. 30 court filing. The creditors therefore want permission to sue the lenders—including JPMorgan Chase Bank N.A., Wells Fargo Bank N.A., Canadian Imperial Bank of Commerce, Credit Suisse AG, Goldman Sachs Lending Partners LLC, and UBS AG—on the bankrupt company’s behalf. About BJ Services LLC BJ Services, LLC -- https://www.bjservices.com/ -- provides hydraulic fracturing and cementing services to upstream oil and gas companies engaged in the exploration and production of North American oil and natural gas resources. Based in Tomball, Texas, BJ Services operates in every major basin throughout U.S. and Canada. BJ Services and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-33627) on July 20, 2020. At the time of the filing, the Debtors disclosed assets of between $500 million and $1 billion and liabilities of the same range. Judge Marvin Isgur oversees the cases. The Debtors have tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Gray Reed & McGraw LLP as their legal counsel, PJT Partners LP as investment banker, Ankura Consulting Group, LLC, as restructuring advisor, PricewaterhouseCoopers LLP as tax consultant, and Donlin, Recano & Company, Inc., as claims agent. The Debtors have also tapped a number of professionals to assist in the marketing and sale of their assets. The Office of the U.S. Trustee appointed a committee of unsecured creditors on July 28, 2020. The committee is represented by Squire Patton Boggs (US), LLP. BLACK IRON: Court Confirms 2nd Amended Plan ------------------------------------------- The U.S. Bankruptcy Court for the District of Utah entered an order confirming Black Iron, LLC's Second Amended Combined Chapter 11 Plan of Reorganization and Disclosure Statement. On Aug. 31 and Sept. 1, 2020, Judge Kevin. R. Anderson conducted a hearing to consider among other things confirmation of the Plan. During the Confirmation Hearing the Court accepted the direct testimony of Steve Gilbert in support of confirmation of the Plan; heard the cross-examination of Mr. Gilbert by Matec Italia and Matec America's counsel and Mr. Gilbert's re-direct questioning; admitted two exhibits in connection with the cross-examination of Mr. Gilbert (i.e., the Gilbert Declaration and the Plan and Disclosure Statement); accepted comments from the attorney for Wells Fargo (Troy Aramburu) regarding the proposed confirmation of the Plan; and heard the arguments of Debtor's and Matec's counsel for and against confirmation of the Plan. At the conclusion of the Confirmation Hearing on Sept. 1, the Court granted final approval of the Disclosure Statement, overruled the Matec Objection for the reasons stated on the record, and stated that it would confirm the Plan pursuant to the terms of the Proposed Confirmation Order following conforming revisions to the same by Debtor's counsel and approval of the changes by Matec's attorneys. All Allowed Claims that are not Insider Claims are to be Paid in Full under the Plan and, as shown by the Notice of Revised Ballot, all Ballots cast by creditors holding Classes 1, 2, 3 (including all subclasses thereof), and 4 Claims have voted to "accept" the Plan. Although Black Iron believes that there are no impaired creditors entitled to vote on the Plan because all creditors other than holders of Insider Claims will be paid in full, Debtor solicited ballots from all holders of Class 1 through Class 4 Claims as a precautionary measure, and in an attempt to demonstrate creditors' support for the Plan. The Court finds that the forms of the Ballot adequately addressed the particular needs of the Chapter 11 Case and are appropriate for the holders of Claims in Classes 1, 2, 3A, 3B, 3C, 3D, and 3E (the "Voting Classes"), all of which will receive under the Plan payment in full of their Allowed Claims (if any), with payment of such claims assumed by Utah Iron, and for the holders of Claims in Class 4, whose Claims also will be assumed by Utah Iron pursuant to the Plan. Judge William T. Thurman has ordered that the Disclosure Statement of BLACK IRON, LLC is approved on a final basis as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. A copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/OMY5IRI/Black_Iron_LLC__utbke-17-24816__0574.0.pdf?mcid=tGE4TAMA Counsel for Black Iron: David J. Jordan David B. Levant Mark E. Hindley Ellen E. Ostrow STOEL RIVES LLP 201 S Main Street, Suite 1100 Salt Lake City, UT 84111 Telephone: 801.328.3131 Facsimile: 801.578.6999 E-mail: david.jordan@stoel.com david.levant@stoel.com mark.hindley@stoel.com ellen.ostrow@stoel.com About Black Iron Black Iron, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No. 17-24816) on June 1, 2017. In the petition signed by Steve L. Gilbert, its manager, the Debtor was estimated to have its assets and debt at $1 million to $10 million. The Hon. William T. Thurman is the case judge. The Debtor hired Adelaide Maudsley, Esq., and Ralph R. Mabey, Esq., at Kirton McConkie P.C., as bankruptcy counsel. The Debtor tapped Stoel Rives LLP as legal counsel; Durham Jones as special litigation counsel; WSRP, LLC as accountant; and Alysen Tarrant as environmental consultant. BLVCK BVLLED: Plan Hearing Rescheduled to Nov. 16 ------------------------------------------------- On August 21, 2020, Blvck Bvlled Investments, LLC filed with the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, a Disclosure Statement with regard to Chapter 11 Plan. On August 28, 2020, Judge Paul Baisier conditionally approved the Disclosure Statement and set Oct. 5, 2020 at for the hearing on final approval of the conditionally approved Disclosure Statement and for confirmation of the Plan. According to the case docket, the hearing on the Plan has been rescheduled for Nov. 16, 2020 at 2:00 p.m. At the Nov. 16 hearing, the Court will also consider a motion by the U.S. Trustee to dismiss the case on account of the Debtor to file the required monthly operating reports. About Blvck Bvlled Investments Blvck Bvlled Investments, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-62128) on Feb. 3, 2020, listing under $1 million in both assets and liabilities. Judge Paul Baisier oversees the case. Will B. Geer, Esq., at Wiggam & Geer, LLC, is the Debtor's legal counsel. BOMBARDIER REC: Moody's Alters Outlook on B1 CFR to Positive ------------------------------------------------------------ Moody's Investors Service changed the rating outlook of Bombardier Rec Products, Inc. to positive from negative, while affirming all existing ratings, including its B1 Corporate Family Rating (CFR), B1-PD Probability of Default Rating (PDR), its first lien senior secured revolver at Ba1 and the B1 ratings on its senior secured term loans. The Speculative Grade Liquidity (SGL) rating was upgraded to SGL-1 from SGL-2. "The positive outlook reflects BRP's stronger than expected second quarter results, as consumers bought outdoor recreational vehicles despite the lockdown measures driven by the coronavirus outbreak. We expect this demand to remain strong as consumers continue to explore different outdoor recreational activities during the pandemic," said Louis Ko, VP-Senior Analyst with Moody's. Affirmations: Issuer: Bombardier Rec Products, Inc. Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Secured Term Loan, Affirmed B1 to (LGD3) from (LGD4) Senior Secured First Lien Revolving Credit Facility, Affirmed Ba1 (LGD1) Upgrades: Issuer: Bombardier Rec Products, Inc. Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Outlook Actions: Issuer: Bombardier Rec Products, Inc. Outlook, Changed to Positive from Negative RATINGS RATIONALE BRP's rating is constrained by: (1) the moderate negative impact that the coronavirus crisis will have on its revenues and EBITDA over the next 12 to 18 months; (2) gross debt leverage that will remain at approximately 4x over the next 12 months; and (3) the company's focus on high-priced, discretionary consumer products, which could have a longer recovery period even after the current challenging economic conditions improve. However, BRP benefits from: (1) an apparent desire by consumers to buy BRP's outdoor recreational vehicles during the pandemic; (2) good market positions in snowmobiles, personal watercraft, all-terrain vehicles and side-by-side vehicles, defended with diversified product profile and well-recognized global brands; (3) BRP's demonstrated ability to successfully launch new products and increase revenue channels; (4) a proven track record of maintaining conservative financial policies and (5) a very good liquidity position, in part due to an increase in debt, which raised gross debt leverage by over a turn. BRP has very good liquidity (SGL-1). Sources are approximately C$1.9 billion compared to about C$25 million of cash usage from term loan amortization over the next 12 months. BRP's liquidity is supported by cash of more than C$1 billion as at July 31, 2020, full availability under its C$700 million revolver due May 2024, and its expected free cash flow of around C$170M in the next four quarters. BRP's strong cash position is bolstered by its issuance of an additional $600 million term loan in May which has increased BRP's leverage by a turn (despite the full repayment of the outstanding amounts under its revolver) as it improved its liquidity at the expense of leverage to support its operations during the pandemic. BRP's revolver is subject to a minimum fixed charge ratio covenant at 1.1x if its revolver availability falls below a certain threshold. Moody's does not expect this covenant to be applicable in the next four quarters, but there would be good cushion for the covenant should it become applicable. BRP has limited flexibility to boost liquidity from asset sales. The positive outlook reflects Moody's expectations that BRP's operating results will continue to be marginally impacted by the ongoing coronavirus pandemic, with leverage expected to reduce to below 4x by FY2023. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if BRP maintains its strong operating results through the pandemic, adjusted debt/EBITDA is sustained below 4.0x (projected to be 3.9x for FY2022E), EBIT/Interest is sustained above 2.5x (projected to be 4.3x for FY2022E), and it maintains at least good liquidity. The ratings could be downgraded if leverage is sustained above 5x (projected to be 3.9x for FY2022E), if EBIT/Interest falls below 1.5x (projected to be 4.3x for FY2022E), or if there is significant deterioration of its liquidity position, possibly due to negative free cash flow generation on a consistent basis. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Its analysis has considered the effect on the performance of consumer assets from the current weak global economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. More specifically, BRP's credit profile is susceptible to shifts in market sentiment in these unprecedented operating conditions and the continued weakening of the economy which could lower demand for luxury consumer products. However, this is partially offset by stronger demand in the powersports segment as consumers look for new recreational activities during the pandemic driven lockdown. The action reflects the demonstrated strong demand for BRP's products, which is expected to persist despite a possibility of an extension to the pandemic lockdown period. Governance risks are moderate as BRP is publicly traded on the Toronto Stock Exchange and NASDAQ and has consistently demonstrated its strong financial oversight and data transparency. Governance considerations include the company's track record of maintaining conservative financial policies as demonstrated by its history of low leverage (around 3x) prior to the coronavirus outbreak. Bombardier Recreational Products Inc., headquartered in Valcourt, Quebec, Canada, is a global manufacturer and distributor of powersports vehicles and marine products. Revenue for the last 12 months ended July 31, 2020 was C$5.7 billion. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. BRANDED APPAREL: Nov. 5 Hearing on Bid Procedures for All Assets ---------------------------------------------------------------- Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Nov. 5, 2020 at 10:00 a.m. (ET) to consider the bidding procedures proposed by Branded Apparel Group, LLC in connection with the sale of substantially all assets to JS Brands, LLC for $175,000, subject to overbid. Objections to the Sale Motion, if any, need not be filed and may be stated on the record of the Hearing. Since 2014, Merchant Factors Corp., doing business as Merchant Financial Group ("MFG"), has served as the Debtor's principal lender pursuant to a revolving factoring facility comprised of the Prepetition Credit Agreements. On March 9, 2018, the Debtor and MFG worked out the then outstanding obligations under the Prepetition Credit Agreements pursuant to a Binding Term Sheet to establish (i) a Factoring Facility, providing the Debtor the ability to borrow 90% of accounts receivable and 50% of the landed-duty paid cost of eligible inventory; (ii) a Term Note with a principal value, as of March 9, 2018, of $1.25 million; and (iii) a Limited Recourse Loan with a principal value, as of March 9, 2018, of $1.3 million. As of the Petition Date, MFG claims that it is owed the principal amount of $3,455,671 under the Factoring Facility; $950,191 under the Term Note; and $1.3 million under the Limited Recourse Loan. MFG purports to have a perfected security interest by having filed a UCC-1 Financing Statement with the Delaware Secretary of State. The Debtor has no ability to fund the production of the Spring 2021 season. Absent consummation of the Proposed Sale within the timeline contemplated by the Sale Motion, the Debtor believes that it may not be able to realize the maximum value of its assets for the benefit of all stakeholders. A prompt sale is necessary to ensure that the Debtor's assets are sold at going concern values and that the value of the Spring 2021 orders and customer and vendor relationships are preserved for the benefit of its creditors. The salient terms of the Stalking Horse APA are: a. Purchase Price: $175,000 b. Purchased Assets: Subject to the terms and conditions set forth in the APA, JS Brands will purchase all of the rights, properties and assets (of any description, kind or nature whatsoever, tangible or intangible, however denominated and wherever located) that are used, held for use or useable in connection with, or otherwise related to, the Business, as more particularly described in Section 2.1(a) of the Stalking Horse APA. c. Assumed Liabilities: JS Brands will assume that certain trademark license agreement dated as of July 19, 2013, as amended and assigned to S&S IP Holdings Limited pursuant to that certain trademark assignment, dated as of Sept. 4, 2014, and the Accrued Royalties owed pursuant to that agreement, except only in an amount not to exceed $400,000. In connection with the Proposed Sale, the Debtor asks approval of the Bidding Procedures, which it submits are designed to maximize the value of the Purchased Assets. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 23, 2020 at 4:00 p.m. (ET) b. Initial Bid: A Bid for the Purchased Assets will not be less than $200,000 (the sum of the Stalking Horse Offer ($175,000) plus the maximum Expenses Reimbursement ($25,000) c. Deposit: 10% of the Offer d. Auction: If the Debtor receives at least two Qualified Bids for the Purchased Assets, the Debtor will conduct an auction at the offices of Kudman Trachten Aloe Posner LLP, 800 Third Avenue, 11th Floor, New York, New York 10022, or at such alternative location as the Debtor may determine, after consultation with the Consultation Parties and after providing notice to the Notice Parties. The Auction will commence on Nov. 30, 2020, at 10:00 a.m. (ET). e. Bid Increments: $10,000 f. Sale Hearing: Dec. 4, 2020 at 4:00 p.m. (ET) g. Sale Objection Deadline: Dec. 12, 2020 at 10:00 a.m. (ET) h. Closing: Dec. 13, 2020 (time of the essence) i. Expenses Reimbursement: $25,000 j. Any secured creditor, including MFG, holding an allowed secured claim against the Debtor will have the right, subject to the provisions of the Bankruptcy Code, applicable law, and any agreement of such secured creditor, to credit bid such claims to the extent of such secured party’s interest in or lien on the Purchased Assets. JS Brands is an insider of the Debtor. The Debtor proposes that, within three business days of entry of the Bidding Procedures Order, it will serve a copy of the Sale Motion, the Bidding Procedures Order, the Bidding Procedures Notice, and Potential Assigned Contracts Notice upon the Sale Notice Parties. Within three business days after the entry of the Bidding Procedures Order, the Debtor will serve on the Notice Parties, including each Counterparty to the Potentially Assigned Contracts, the Potential Assigned Contract Notice. The Cure Objection Deadline is Dec. 4, 2020, at 4:00 p.m. (ET). Finally, to preserve the value of the assets and limit the costs of administering and preserving the assets, it is very important that the Debtor close on the Proposed Sale as soon as possible after all closing conditions have been met or waived. Accordingly, it asks that the Court waives the stay periods under Bankruptcy Rules 6004(g) and 6006(d). A copy of the Stalking Horse APA and the Bidding Procedures is available at https://tinyurl.com/y2fsjxdr from PacerMonitor.com free of charge. About Branded Apparel Group Branded Apparel Group, LLC, a family-owned apparel manufacturer that designs, imports, merchandises, and markets men's apparel and accessories under a licensed brand as well as private-label brands. Branded Apparel Group sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-12552-scc) on Oct. 29, 2020. Counsel for the Debtor: Paul H. Aloe, Esq. David N. Saponara, Esq. KUDMAN TRACHTEN ALOE POSNER LLP 800 Third Avenue, 11th Floor New York, NY 10022 Telephone: (212) 868-1010 Facsimile: (212) 868-0013 E-mail: paloe@kudmanlaw.com dsaponara@kudmanlaw.com BULL SHIRTS: Court Confirms Reorganization Plan ----------------------------------------------- Judge Jeffrey P. Norman on Oct. 27, 2020, has confirmed Bull Shirts Inc. and Bull Shirts I Ltd.'s First Amended Joint Chapter 11 Plan of Reorganization. The Court earlier conditionally approved the Disclosure Statement and set an Oct. 27 hearing on the Plan. The Plan confirmation order also provides: "Ad Valorem Taxes: Debtors shall pay tax year 2019 real and personal property taxes owing to Harris County and Cypress-Fairbanks Independent School District (the "Taxing Authorities") on the Effective Date, together with postpetition interest at the rate of 12% per annum. Debtors shall pay tax year 2020 real and personal property taxes owing to the Taxing Authorities in the ordinary course of business as such tax debts come due and prior to said ad valorem taxes becoming delinquent. In the event the 2020 taxes are not paid prior to the delinquency date as set forth in the Texas Property Tax Code, interest will begin to accrue until the taxes are paid in full. The Taxing Authorities shall retain their statutory liens securing their pre and post-petition tax debts until such time as the tax debts are paid in full. In the event of a default in the payment of the taxes owed to the Taxing Authorities as provided herein, the Taxing Authorities shall provide notice to counsel for the Debtors who shall have 30 days from the date of such notice to cure the default. If the default is not cured, the Taxing Authorities shall be entitled to pursue collection of all amounts owed pursuant to state law outside this Court." About Bull Shirts Bull Shirts, Inc. -- https://www.bull-shirts.com/ -- is a full service advertising specialty company offering a wide range of promotional items to promote its clients' companies. Bull Shirts, Inc. filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31746) on March 13, 2020. In the petition signed by Joseph Dottenweich, president, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Matthew Hoffman, Esq. at HOFFMAN & SAWERIS, P.C. serves as the Debtor's counsel. BW GAS: Moody's Affirms B2 CFR & Alters Outlook to Positive ----------------------------------------------------------- Moody's Investors Service revised the outlook of BW Gas & Convenience Holdings, LLC to positive from stable following the announcement of an equity raise that will be used in part to reduce debt. The company's ratings were affirmed, including its B2 Corporate Family Rating, B3-PD Probability of Default Rating, and B2 senior secured bank credit facility rating. The change in outlook to positive reflects governance considerations particularly the financial strategy decision to use a portion of the equity proceeds to repay a portion of its existing term loan B. The proceeds of the announced $235 million equity raise will also be used to fund Yesway's raze-and-rebuild and store remodel campaign as well as for additional acquisitions. Yesway acquired the Allsup's Convenience Stores chain, which consisted of 304 convenience stores in Texas, New Mexico, and Oklahoma, in late 2019. Its planned raze-and-rebuild strategy will increase the average store size to over 4,800 square feet from 2,400 square feet which allows these stores to offer a better selection of in-store merchandise and private label product offerings. Moody's view positively the ability to offer additional higher margin products in-store and private label offerings as it reduces the reliance on volatile fuel sales. Affirmations: Issuer: BW Gas & Convenience Holdings, LLC Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) Outlook Actions: Issuer: BW Gas & Convenience Holdings, LLC Outlook, Changed To Positive From Stable RATINGS RATIONALE Yesway's credit profile is constrained by its small scale in terms of number of stores and absolute levels of EBITDA. With just over 400 stores, the company is one of the smaller rated convenience stores. The company's small size and concentration in Texas, New Mexico and Oklahoma exposes it to regional economic swings. While less of a concern than at the time of the acquisition in 2019, the company is still exposed to some degree of integration risk as it integrates the Allsup's stores onto its operating platforms. The rating also reflects governance considerations, particularly the private equity ownership and potential for continued acquisition activity in a consolidating industry. The company's credit profile benefits from its modest leverage and good interest coverage following the planned debt repayment. Merchandise gross profit margins at Allsup's have remained consistently high -- at around 30% -- driven by a strong foodservice platform and good fuel margins on a cents per gallon basis (CPG) relative to the industry. Allsup's exposure to the growth in the Permian Basin is beneficial to both total gallon volumes as well as CPG due to a favorable mix shift toward higher margin diesel. The mix of merchandise vs fuel gross profit for the combined entity is weighted more towards merchandise at about 60% vs 40% from fuel which Moody's expects will provide more stability in gross profit margins going forward. The combined company also benefits from its very good liquidity and a significant portion of owned real estate in its portfolio of stores. The positive outlook reflects its expectation that Yesway's leverage, which will be below its upgrade trigger at approximately 3.8x at the end of 2020 including the planned debt repayment, will likely increase over time as the company continues to grow through acquisitions. The company has stated its intentions to grow its store base by 25% over the next several years. Yesway has very good liquidity including cash balances of about $200 million and revolver availability of about $75 million following the equity raise. The company's $75 million committed revolving credit facility expires in November 2024. The credit agreement contains a senior secured net leverage financial maintenance covenant (as defined) of 6.25x. Moody's expects the company will maintain adequate cushion to meet this covenant over the next 12 to 18 months. The company also owns a significant portion of its convenience store real estate portfolio providing them with a material source of alternate liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Yesway's financial strategies supported debt/EBITDA sustained below 5.0x and EBIT/interest expense sustained above 2.0x. An upgrade would also require the company maintain at least good liquidity. A downgrade could occur if it appears the company is unable to maintain debt/EBITDA above 6.5x or EBIT/interest at or below 1.25x. Fort Worth, Texas-based BW Gas & Convenience Holdings, LLC, through its operating subsidiaries, operates just over 400 convenience stores in 9 states primarily in the midwest and southern US under the Yesway and Allsup's banners. It is privately owned by Brookwood Financial Partners, LLC. Pro forma for a full year of the Allsup's acquisition, the combined company is expected to generate annual revenue of about $1.8 billion. The principal methodology used in these ratings was Retail Industry published in May 2018. CALLAWAY GOLF: Moody's Affirms B1 CFR & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service affirmed Callaway Golf Company's Corporate Family Rating at B1 and Probability of Default Rating at B1-PD. Moody's additionally affirmed the company's senior secured term loan B rating at B1. The company's Speculative Grade Liquidity is unchanged at SGL-2. The outlook was changed to negative from stable. Callaway announced plans to acquire the remaining 86% of outstanding equity of Topgolf International, Inc. ("Topgolf") that it does not already own in an all-stock transaction valued at $1.7 billion [1]. Callaway plans to issue 90 million of its common shares in exchange for all outstanding shares of Topgolf, making Topgolf a 100% wholly owned subsidiary. The transaction is subject to both Callaway and Topgolf shareholder approval as well as regulatory approvals and other customary closing conditions. Callaway also plans to invest approximately $325 million over the next few years to expand Topgolf locations both in the US and abroad. The negative outlook reflects Callaway's diminishing ability to deleverage to below 5.0x debt/EBITDA within the next 12 to 18 months as the company plans to invest in the expansion of Topgolf venues rather than reduce debt. Based on the company's initial investment plans, Moody's expects Callaway's debt to EBITDA to remain elevated at around 5.5x by the end of 2021 and only decline to below 5.0x by 2022. Additionally, there is increased operational risk as Callaway seeks to enter into yet another business related to the capital intensive, volatile and high-risk casual dining and entertainment industry during a global pandemic. This follows a previous divergence to its core business model of golf equipment when it acquired several apparel brands over the past few years which have not been performing as originally planned. Although Topgolf is golf-related, its business focuses mostly on the casual consumer seeking entertainment and it is unclear how many of such consumers would convert to benefit Callaway's core business. Topgolf has been materially and negatively impacted in 2020 due to the coronavirus and Callaway expects this business not to be cash flow accretive until 2024. The development of new venues elevates business risk as the 61 existing Topgolf locations have thus far resulted in modest same-store-sales growth pre-covid. The timing of the resolution of the coronavirus outbreak and Callaway's success in executing its plan will continue to inflict high risk in this business investment. Additionally, the weak environment may limit the amount of outside funding that Topgolf can receive from landlords, potentially requiring additional upfront investment by Callaway to expand by about 10 new locations per year. Although Callaway will not be providing a guarantee for the debt at Topgolf, Moody's believes there will be implied support from Callaway over the near term given the significant investment Callaway will be making in terms of equity purchase and additional future cash investment for expansion. However, the affirmation of Callaway's existing ratings reflects Moody's view that Callaway will have the ability to curtail new investment if operating conditions at Topgolf turn negative. Moody's CFR factors in the assumption that the company will curtail expansion if business conditions deteriorate at Topgolf. Moody's also believes the combination of these two companies will help to broaden the Callaway brand and further promote the sport of golf to the casual customer. Callaway will have direct access to potential first-time golfers and the ability to sell or promote at Topgolf venues its equipment and apparel. Callaway will also be able to provide Topgolf with the ability for international venue expansion and promote its Toptracer Range expansion through Callaway's existing partnerships. The following ratings/assessments are affected by the action: Ratings Affirmed: Issuer: Callaway Golf Company Corporate Family Rating, affirmed at B1 Probability of Default Rating, affirmed at B1-PD Senior Secured Bank Credit Facility, affirmed at B1 (LGD4) Outlook Actions: Issuer: Callaway Golf Company Outlook, changed to negative from stable RATINGS RATIONALE Callaway's B1 CFR reflects the negative impact of the coronavirus on the company's revenue and earnings resulting in elevated leverage, as well as the company's concentration in a niche, highly discretionary and cyclical consumer product segment. Callaway's credit profile is also constrained by the risks associated with its non-golf-related apparel products, an industry with very different and more challenging competitive dynamics than its traditional golf business. The company is expanding into the casual dining and entertainment sector, which creates higher operational risk and requires significant investment outside of Callaway's traditional golf equipment business. Callaway's credit profile is supported by its leading market position and strong brand name in the golf industry. The credit profile also reflects Callaway's good liquidity and solid scale with revenue around $1.5 billion for the last-twelve-month period ending June 30, 2020, and the meaningful improvement in the golf equipment business in the second half of 2020 driven by increased golfing rounds played as a socially-distant activity. Moody's views Topgolf as a wholly-owned investment with separate financing, and not as a consolidated credit. Moody's nevertheless views as potential credit strains the planned investment into Topgolf as well as the potential support for a wholly-owned subsidiary in which the company has acquired with a significant amount of equity. This risk is partially mitigated by Callaway's flexibility to adjust the level of investment in Topgolf. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Its analysis has considered the effect on the company's performance from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if operating performance weakens, liquidity deteriorates, or investment in Topgolf detracts from reducing financial leverage from current high levels. Leverage maintained above 5x debt to EBITDA could result in a downgrade. A credit combination between Callaway and Topgolf could also lead to a downgrade if there is a negative effect on Callaway's credit metrics. Ratings could be upgraded with continued recovery in the company's golf equipment business and a return to pre-coronavirus levels for the company's apparel business, including Jack Wolfskin. Successful execution of the Topgolf investment would also be required for an upgrade. Additionally, an upgrade would require Debt to EBITDA to be sustained below 4x with good liquidity. Callaway Golf Company, headquartered in Carlsbad, CA, manufactures and sells golf clubs, golf balls, and golf and lifestyle apparel and accessories. The company's portfolio of global brands includes Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin. Revenue for the publicly-traded company for the last twelve-month period ended June 30, 2020 was approximately $1.5 billion. Topgolf International, Inc. currently owns and operates 61 golfing centers (58 in the US and 3 in the UK) as of September 2020 with additional facilities under construction in the US. There are also 2 international franchise venues located in Australia and Mexico. The company has a Swing Suites offering that provides a simulated golf experience, its Toptracer golf tracking technology for traditional driving ranges, courses and broadcasters as well as its Media division. The company is privately owned by a group of investors including 14% ownership by Callaway. Reported revenue the last twelve-month period ended June 30, 2020 was approximately $800 million. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. CARS.COM INC: Moody's Assigns B1 CFR & B3 Rating on Proposed Notes ------------------------------------------------------------------ Moody's Investors Service assigned a first-time B1 Corporate Family Rating (CFR) and a B1-PD Probability of Default Rating (PDR) to Cars.com Inc. In connection with the proposed debt issuance, Moody's also assigned a B3 instrument rating to the new senior unsecured notes. The outlook is stable. Net proceeds from the new notes and proposed credit facility (unrated) will be used primarily to refinance just under $600 million of existing funded debt and pay related expenses. Rating assignments remain subject to Moody's review of final transaction terms and conditions. The rating actions are summarized: Assignments: Issuer: Cars.com Inc. Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5) Outlook Actions: Issuer: Cars.com Inc. Outlook, Assigned Stable RATINGS RATIONALE Car.com's B1 CFR reflects the company's position as a leading digital automotive marketplace and solutions provider to North American dealerships and OEMs with a well-known brand and substantial consumer traffic. Despite revenue declines since the beginning of 2019 reflecting declining dealership count for Cars.com, weak demand for national advertising, and more recently, the impact of the coronavirus pandemic, Cars.com has been able to reduce debt balances and generate good cash flow with 12% -13% adjusted free cash flow to debt. Looking forward, Moody's expects Cars.com will grow revenues in the low single digit percentage range over the next year with improved EBITDA margins, supported by recent growth in dealership count and organization right-sizing. As a result, Cars.com is expected to expand adjusted free cash flow to debt to greater than 15% with adjusted debt to EBITDA (less capitalized software) migrating to less than 5x followed by continued deleveraging given the company's reported net leverage target of 3x-4x (or roughly 3.5x--4.5x on a Moody's adjusted basis, less capitalized software). Nevertheless, ratings are pressured by economic weakness and social distancing practices in North America as a result of the impact of COVID-19 which has led to reduced demand for advertising and IT services, as well as a significant decline in customer traffic to new and used car dealer locations. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody's analysis has considered the effect on the performance of consumer assets and corporate assets from the current weak North American economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around Moody's forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. There are further downside risks in the event the economy remains weak or demand for advertising continues to be soft beyond 2020 in a scenario in which COVID-19 is not contained. Ratings reflect Moody's expectation that revenues will decline 12% in 2020, followed by low single digit percentage topline growth in 2021 supported by an increase in dealership count and good acceptance of newer offerings including Dealer Inspire which has been rolled out across hundreds of GM franchises this year, followed by the rollout across certain Honda and Nissan franchises. Good free cash flow generation, even during periods of declining revenues, provides Cars.com with the ability to reduce debt balances and maintain credit metrics in line with Moody's base case. Given recent operating results for Cars.com and Moody's forecast for growth in North American auto sales of 10.2% and 5.8% in 2021 and 2022, respectively, Moody's expects sustained demand for Cars.com offerings as dealers in North America embrace online solutions including home delivery, virtual dealer appointments, and support for virtual test-drives. Moody's believes that beyond next year, Cars.com will benefit from its leading position and brand recognition which better positions the company when car buying rebounds from currently reduced levels. Cars sales in North America are already seeing an uplift in demand for new or used vehicles reflecting in part consumer preference for the safety of private transportation as opposed to mass transit. Moody's also expects Cars.com will adhere to prudent financial policies which will partially mitigate pressure on near-term revenues and profit margins caused by COVID-19 and uncertainties in the North American economic outlook. The online auto marketplace is highly competitive with a few digital platforms that compete directly with Cars.com. Demonstrating effective ROI to the dealer and OEM customer base is critical to retaining dealer and OEM customers. In addition, there are broader advertising alternatives that will continue to take a share of advertising spend from dealers and OEMs, including programmatic platforms. There is also the potential need for Cars.com to allocate capital to fund investments and M&A to accelerate revenue growth in a rapidly evolving online industry. Despite these competitive pressures, Moody's expects Cars.com will be able to maintain its market share over the next year supported by improvements in dealer retention (highest level since the spin-off in 2017) with less than 2% monthly churn and leading brand awareness. In response to COVID-19 and revenue declines, Cars.com cut operating costs by initiating furloughs and benefits for a portion of employees, executing a 10% initial pay reduction to include director fees, putting a freeze on hiring, suspending merit and promotion pay increases, and reducing marketing and travel expenses. These actions help Cars.com maintain adjusted EBITDA margins, and Moody's believes the company could further reduce expenses, if needed, to preserve liquidity. Governance risk is another key consideration with ownership and control, board oversight and effectiveness, and management being key elements of Moody's assessment of creditworthiness. Cars.com is publicly traded with Vanguard, Ninety-One UK, Dimensional Fund Advisors, BlackRock, and Greenvale Capital owning roughly 6%-9% of common shares each, followed by other investment management companies holding less than 4%. Good governance is supported by a board of directors with nine of the company's ten board seats being held by independent directors. Despite pressure from an activist shareholder through 2019, Cars.com has not issued debt to fund share repurchases or dividends. The SGL-2 short term liquidity rating reflects Moody's expectation that Cars.com will maintain good liquidity supported by estimated cash balances of $33 million at closing and adjusted free cash flow of more than $80 million per year, or 14% of debt. The current suspension of share buybacks will allow the company to accumulate excess cash, a portion of which can be used to further reduce debt balances. Cars.com's liquidity is supplemented by the proposed $230 million revolving credit facility (unrated, undrawn at closing) maturing in 2025. Moody's expects Cars.com will maintain good EBITDA cushion to proposed credit agreement maintenance covenants, including a maximum 3.5x senior secured leverage ratio (as defined) and a minimum 2.75x interest coverage ratio (as defined) with a step-up to 3.0x at a time to be determined. The maximum senior secured leverage ratio may be increased by 0.5x for 12 months to accommodate a material acquisition. The B3 instrument rating for the senior unsecured notes is two notches below the B1 CFR, given their position behind the senior secured credit facility (unrated) consisting of the proposed revolver and term loan. The notes and credit facility are provided with subsidiary guarantees. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Notwithstanding significant uncertainty regarding the duration of the current decline in North American GDP and weak demand for advertising and IT services, the stable outlook reflects Moody's expectation that revenues for Cars.com will grow in the low single-digit percentage range over the next year supported by an increase in dealership count and continued gains for newer solutions offerings. The stable outlook also incorporates Cars.com's track record for generating low double-digit percentage adjusted free cash flow to debt even at reduced revenue levels which supports liquidity and debt repayment. Moody's expects adjusted EBITDA (less capitalized software) margins will improve above the current 22% level (or 25% with capitalized software), as a result of recent actions to control costs. Adjusted debt to EBITDA (less capitalized software) is expected to trend towards 4.75x driven by adjusted EBITDA growth and debt repayment. The outlook assumes Cars.com will not fund share buybacks or other distributions until adjusted debt to EBlTDA (less capitalized software) falls below 4x. Ratings could be upgraded if sustained top line growth leads to increased scale and revenue diversity. Cars.com would also need to grow adjusted free cash flow, maintain very good liquidity, and adhere to conservative financial policies resulting in Moody's adjusted debt to EBITDA (less capitalized software) being sustained below 3x. Ratings could be downgraded if Cars.com adopts more aggressive financial policies leading Moody's to expect that adjusted debt to EBITDA (less capitalized software) would be sustained above 4.5x. Competitive pressures or weak demand for new offerings resulting in declining revenues or adjusted EBITDA (less capitalized software) margins approaching 15% could also lead to a downgrade. There would be downward rating pressure if deterioration in liquidity results in adjusted free cash flow to debt falling below 10% or a meaningful reduction in cash and revolver availability. Cars.com Inc., founded in 1998 and headquartered in Chicago, IL, is a leading digital automotive marketplace and solutions provider to dealerships and OEMs in North America. Customers include more than 18,000 dealerships, ranging from independent businesses to large franchises, plus nearly all OEMs. Moody's expects Cars.com will generate revenues of roughly $550 million over the next year. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CARVANA CO: Incurs $7.1 Million Net Loss in Third Quarter --------------------------------------------------------- Carvana Co. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the company of $7.08 million on $1.54 billion of net sales and operating revenues for the three months ended Sept. 30, 2020, compared to a net loss attributable to the company of $30.09 million on $1.09 billion of net sales and operating revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss attributable to the company of $107.80 million on $3.76 billion of net sales and operating revenues compared to a net loss attributable to the company of $73.53 million on $2.84 billion of net sales and operating revenues for the same period last year. As of Sept. 30, 2020, the Company had $2.73 billion in total assets, $1.77 billion in total liabilities, and $961.57 million in total stockholders' equity. "Third quarter results were incredible. We delivered another quarter of strong growth and crossed many financial milestones," said Ernie Garcia, founder and CEO of Carvana. "This was only made possible by our incredible team, their relentless focus on delivering the best customer experiences available when buying a car, and all the progress that focus has generated since launching the company 7 years ago. We can't thank them enough." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1690820/000169082020000265/cvna-20200930.htm About Carvana Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com/-- is a holding company that was formed as a Delaware corporation on Nov. 29, 2016. Carvana is an e-commerce platform for buying and selling used cars. The Company owns and operates Carvana.com, which enables consumers to quickly and easily shop vehicles, finance, trade-in or sell the ir current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana's patented, automated Car Vending Machines. Carvana reported a net loss of $364.6 million in 2019, a net loss of $254.74 million in 2018, and a net loss of $164.32 million in 2017. As of June 30, 2020, the Company had $2.47 billion in total assets, $1.50 billion in total liabilities, and $973.08 million in total stockholders' equity. * * * As reported by the TCR on May 24, 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Carvana Co. to reflect the company's improved liquidity after it raised $480 million by issuing about $230 million of common stock and a $250 million add-on to its existing senior unsecured notes due 2023. CBL & ASSOCIATES: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: CBL & Associates Properties, Inc. 2030 Hamilton Place Blvd. CBL Center, Suite 500 Chattanooga Tennessee 37421 Business Description: CBL & Associates Properties, Inc. -- www.cblproperties.com -- is a self- managed, self-administered, fully integrated real estate investment trust ("REIT") that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers, and office properties. Chapter 11 Petition Date: November 1, 2020 Court: United States Bankruptcy Court Southern District of Texas One hundred and seventy-seven affiliates that concurrently filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- CBL & Associates Properties, Inc. (Lead Debtor) 20-35226 Akron Mall Land, LLC 20-35267 Alamance Crossing II, LLC 20-35268 Alamance Crossing, LLC 20-35269 APWM, LLC 20-35270 Arbor Place Limited Partnership 20-35231 Asheville, LLC 20-35271 Brookfield Square Joint Venture 20-35272 Brookfield Square Parcel, LLC 20-35273 CBL & Associates Limited Partnership 20-35229 CBL & Associates Management, Inc. 20-35230 CBL Eagle Point Member, LLC 20-35274 CBL Holdings I, Inc. 20-35227 CBL Holdings II, Inc. 20-35228 CBL HP Hotel Member, LLC 20-35275 CBL RM-Waco, LLC 20-35232 CBL SM-Brownsville, LLC 20-35233 CBL Statesboro Member, LLC 20-35276 CBL Walden Park, LLC 20-35277 CBL/Brookfield I, LLC 20-35278 CBL/Brookfield II, LLC 20-35279 CBL/Cherryvale I, LLC 20-35282 CBL/Citadel I, LLC 20-35283 CBL/Citadel II, LLC 20-35284 CBL/EastGate I, LLC 20-35285 CBL/EastGate II, LLC 20-35286 CBL/EastGate Mall, LLC 20-35287 CBL/Fayette I, LLC 20-35288 CBL/Fayette II, LLC 20-35295 CBL/GP Cary, Inc. 20-35296 CBL/GP II, Inc. 20-35307 CBL/GP V, Inc. 20-35309 CBL/GP VI, Inc. 20-35311 CBL/GP, Inc. 20-35314 CBL/Gulf Coast, LLC 20-35316 CBL/Imperial Valley GP, LLC 20-35234 CBL/J I, LLC 20-35318 CBL/J II, LLC 20-35320 CBL/Kirkwood Mall LLC 20-35235 CBL/Madison I, LLC 20-35236 CBL/Monroeville Expansion I, LLC 20-35321 CBL/Monroeville Expansion II, LLC 20-35324 CBL/Monroeville Expansion III, LLC 20-35326 CBL/Monroeville Expansion Partner, L.P. 20-35280 CBL/Monroeville Expansion, L.P. 20-35289 CBL/Monroeville I, LLC 20-35291 CBL/Monroeville II, LLC 20-35292 CBL/Monroeville III, LLC 20-35293 CBL/Monroeville Partner, L.P. 20-35298 CBL/Monroeville, L.P. 20-35299 CBL/Nashua Limited Partnership 20-35300 CBL/Old Hickory I, LLC 20-35301 CBL/Old Hickory II, LLC 20-35302 CBL/Parkdale Crossing GP, LLC 20-35303 CBL/Parkdale Crossing, L.P. 20-XXXX69 CBL/Parkdale Mall GP, LLC 20-35305 CBL/Parkdale, LLC 20-35306 CBL/Penn Investments, LLC 20-35310 CBL/Richland G.P., LLC 20-35237 CBL/Sunrise Commons GP, LLC 20-35312 CBL/Sunrise Commons, L.P. 20-35225 CBL/Sunrise GP, LLC 20-35238 CBL/Sunrise Land, LLC 20-35313 CBL/Sunrise XS Land, L.P. 20-XXXX79 CBL/Westmoreland I, LLC 20-35239 CBL/Westmoreland II, LLC 20-35240 CBL/Westmoreland, L.P. 20-35241 CBL-840 GC, LLC 20-35317 Charleston Joint Venture 20-XXXX89 CherryVale Mall, LLC 20-35242 Coolsprings Crossing Limited Partnership 20-XXXX91 Cross Creek Anchor S GP, LLC 20-35323 Cross Creek Anchor S, LP 20-XXXX93 CW Joint Venture, LLC 20-35243 Dakota Square Mall CMBS, LLC 20-35328 Development Options, Inc. 20-XXXX97 D'Iberville CBL Land, LLC 20-35327f Dunite Acquisitions, LLC 20-XXXX99 East Towne Parcel I, LLC 20-XXX100 EastGate Anchor S, LLC 20-XXX101 EastGate Company 20-XXX102 Eastland Anchor M, LLC 20-XXX103 Eastland Holding I, LLC 20-XXX104 Eastland Holding II, LLC 20-XXX105 Eastland Mall, LLC 20-XXX106 Eastland Member, LLC 20-XXX107 Fayette Middle Anchor, LLC 20-XXX108 Fayette Plaza CMBS, LLC 20-XXX109 Frontier Mall Associates Limited Partnership 20-35244 GCTC Peripheral IV, LLC 20-XXX111 Gunbarrel Commons, LLC 20-XXX112 Hamilton Place Anchor S, LLC 20-XXX113 Hammock Landing/West Melbourne, LLC 20-XXX114 Hanes Mall Parcels, LLC 20-XXX115 Harford Mall Business Trust 20-XXX116 Henderson Square Limited Partnership 20-XXX117 Hickory Point Outparcels, LLC 20-XXX118 Hixson Mall, LLC 20-35245 Imperial Valley Commons, L.P. 20-XXX120 Imperial Valley Mall GP, LLC 20-35246 Imperial Valley Mall II, L.P. 20-35247 Imperial Valley Mall, L.P. 20-35248 Imperial Valley Peripheral L.P. 20-XXX124 IV Commons, LLC 20-XXX125 IV Outparcels, LLC 20-XXX126 Jefferson Anchor M, LLC 20-XXX127 Jefferson Anchor S, LLC 20-XXX128 Jefferson Mall Company II, LLC 20-XXX129 JG Gulf Coast Town Center LLC 20-XXX130 JG Winston-Salem, LLC 20-35249 Kirkwood Mall Acquisition LLC 20-35251 Kirkwood Mall Mezz LLC 20-35250 Laurel Park Retail Holding LLC 20-XXX134 Laurel Park Retail Properties LLC 20-XXX135 Layton Hills Mall CMBS, LLC 20-35252 Lexington Joint Venture 20-XXX137 LHM-Utah, LLC 20-XXX138 Madison Joint Venture, LLC 20-35254 Madison/East Towne, LLC 20-35256 Madison/West Towne, LLC 20-35257 Mall del Norte, LLC 20-35258 Mayfaire GP, LLC 20-35253 Mayfaire Town Center, LP 20-35255 MDN/Laredo GP, LLC 20-35259 Meridian Mall Limited Partnership 20-XXX146 Mid Rivers Land LLC 20-XXX147 Mid Rivers Mall CMBS, LLC 20-XXX148 Monroeville Anchor Limited Partnership 20-XXX149 Montgomery Partners, L.P. 20-XXX150 Mortgage Holdings, LLC 20-35261 Multi-GP Holdings, LLC 20-35265 North Charleston Joint Venture II, LLC 20-XXX153 Northgate SAC, LLC 20-XXX154 Northpark Mall/Joplin, LLC 20-XXX155 Old Hickory Mall Venture 20-XXX157 Old Hickory Mall Venture II, LLC 20-XXX158 Parkdale Anchor M, LLC 20-XXX159 Parkdale Crossing Limited Partnership 20-XXX160 Parkdale Mall Associates, L.P. 20-XXX161 Parkdale Mall, LLC 20-XXX162 Parkway Place Limited Partnership 20-XXX162 Parkway Place SPE, LLC 20-XXX163 Pearland Ground, LLC 20-35266 Pearland Town Center GP, LLC 20-35264 Pearland Town Center Limited Partnership 20-35260 Pearland-OP Parcel 8, LLC 20-XXX167 POM-College Station, LLC 20-35262 Port Orange Holdings II, LLC 20-XXX169 Seacoast Shopping Center Limited Partnership 20-XXX170 Shoppes at St. Clair CMBS, LLC 20-XXX171 South County Shoppingtown LLC 20-XXX172 Southaven Town Center, LLC 20-XXX173 Southaven Towne Center II, LLC 20-XXX173 SouthPark Mall, LLC 20-XXX174 SouthPark Mall-DSG, LLC 20-XXX175 St. Clair Square GP I, LLC 20-XXX176 St. Clair Square Limited Partnership 20-XXX177 St. Clair Square SPE, LLC 20-XXX178 Stroud Mall, LLC 20-XXX179 Tenn-GP Holdings, LLC 20-XXX180 The Courtyard at Hickory Hollow Limited Partnership 20-XXX181 The Landing at Arbor Place II, LLC 20-XXX183 The Pavilion at Port Orange, LLC 20-XXX184 TN-Land Parcels, LLC 20-XXX185 Turtle Creek Limited Partnership 20-35263 TX-Land Parcels, LLC 20-XXX187 Valley View Mall SPE, LLC 20-XXX188 Volusia Mall GP, Inc. 20-XXX189 Volusia Mall Limited Partnership 20-XXX190 Volusia SAC, LLC 20-XXX192 Volusia-OP Peripheral, LLC 20-XXX193 West Towne District, LLC 20-XXX194 Westgate Crossing Limited Partnership 20-XXX195 WestGate Mall II, LLC 20-XXX196 WestGate Mall Limited Partnership 20-XXX197 WI-Land Parcels, LLC 20-XXX198 York Galleria Limited Partnership 20-XXX199 Judge: Hon. Marvin Isgur Debtors' Counsel: Alfredo R. Perez, Esq. WEIL, GOTSHAL & MANGES LLP 700 Louisiana Street, Suite 1700 Houston, Texas 77002 Tel: (713) 546-5000 Fax: (713) 224-9511 Email: Alfredo.Perez@weil.com - and - Ray C. Schrock, P.C. Garrett A. Fail, Esq. Moshe A. Fink, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: Ray.Schrock@weil.com Garrett.Fail@weil.com Moshe.Fink@weil.com Debtors' Investment Banker: MOELIS & COMPANY 399 Park Avenue, 5th Floor New York, NY 10022 Debtors' Financial Advisor: BERKELEY RESEARCH GROUP, LLC 99 High Street, 27th Floor Boston, MA 02110 Debtors' Claims Agent: EPIQ CORPORATE RESTRUCTURING, LLC 777 Third Avenue, 12th Floor New York, New York 10017 https://dm.epiq11.com/case/cblproperties/info Estimated Assets (on a consolidated basis): $1 billion to $10 billion Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petitions were signed by Jeffery V. Curry, chief legal officer and secretary. A copy of CBL & Associates Properties' petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/632KSDI/CBL__Associates_Properties_Inc__txsbke-20-35226__0001.0.pdf?mcid=tGE4TAMA Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- -------------- 1. Delaware Trust Company as Unsecured Notes $1,381,900,000 Indenture Trustee Attn.: Michelle Dreyer, Corporate Trust Administration 251 Little Falls Drive Wilmington, Delaware 19808 Tel: (866) 403‐5272 Fax: (302) 636 5454 Email: michelle.dreyer@cscgfm.com 2. Husch Blackwell LLP Legal Services $126,807 Attn.: Ron Feldman P.O. Box 790379 St. Louis, Missouri 63179 Tel: (423) 266‐5500 Email: remit@huschblackwell.com 3. CCI Construction of SC Inc. Trade Payable $93,596 Attn.: Derick Owens 130 Venture Boulevard., Suite 1 Spartanburg, South Carolina 29306‐3801 Tel: (864) 587‐0852 Email: cciderek@yahoo.com 4. ERMC LLC Trade Payable $58,865 Attn.: Tamie Morgan 2226 Encompass Drive, Suite 116 Chattanooga, Tennessee 37421‐1576 Tel: (423) 899‐2753 Email: tamie.morgan@ermc2.com 5. Recycling & Waste Solutions LLC Trade Payable $50,789 Attn.: Nancy Settle 3 Dickinson Drive, Suite 103 Brandywine 4 Building Chadds Ford, Pennsylvania 19317 Tel: (484) 849‐7027 Email: nsettle@rwsfacilityservices.com 6. SecurAmerica LLC Trade Payable $37,158 Attn.: Tamie Morgan 3399 Peachtree Road, NE, Suite 1500 Atlanta, Georgia 30326‐1151 Tel: (404) 926‐4222 Email: tamie.morgan@ermc2.com 7. Charleston County Trade Payable $35,231 Attn.: Mary Tinkler 4045 Bridge View Drive North Charleston, South Carolina 29405 Tel: (843) 202‐6080 Email: stormwater@charlestoncounty.org 8. Subway Real Estate LLC Trade Payable $30,000 Attn.: Christopher Ferguson 325 Sub Way Milford, Connecticut 06461‐3081 Tel: (800) 888‐4848 Email: Ferguson_c@subway.com 9. Miller‐McCoy, Inc. Trade Payable $23,861 Attn.: R. Wayne McCoy 915 Creekside Road Chattanooga, Tennessee 37406 Tel: (423) 698‐2661 Email: rmccoy@millermccoy.com 10. Jones Lang LaSalle Trade Payable $23,848 Brokerage Inc. Attn.: Marti Johnson 200 E. Randolph Street, Suite 4300 Chicago, Illinois 60601‐6519 Tel: (251) 301‐7248 Email: Marti.Johnson@am.jll.com 11. Boen Plumbing Inc. Trade Payable $19,173 Attn.: Stephanie Boen P.O. Box 21803 Waco, Texas 76702 Tel: (254) 757‐2500 Email: boenplumbing@sbcglobal.net 12. KONE Inc. Trade Payable $16,477 Attn.: Paula Royer P.O. Box 3491 Carol Stream, Illinois 60132‐3491 Tel: (877) 276‐8691 Email: Paula.Royer@kone.com 13. Western Specialty Contractors Trade Payable $15,435 Attn.: Carter Pogue 7401 Alabama Avenue St. Louis, Missouri 63111 Tel: (314) 773‐8813 Email: daveec@westerngroup.com 14. Piedmont Property Services, Inc. Trade Payable $12,827 Attn.: P. Smaatt 404 Old Thomasville Road High Point, North Carolina 27260 Tel: (336) 886‐6393 Email: ppsmatt@northstate.net 15. Palmetto Door Controls Trade Payable $12,353 & Glass LLC Attn.: Heather Latshaw 1284 Surfside Industrial Park Surfside, South Carolina 29575 Tel: (843) 839‐0923 Email: heather@palmettodoorcontrols.com 16. Brite Ideas Contracting, LLC Trade Payable $12,062 Attn.: John Gingow 2156 Fineview Drive York, Pennsylvania 17406 Tel: (717) 575‐9402 Email: johnsbriteideas@gmail.com 17. Trane U.S. Inc. Trade Payable $10,526 Attn.: Sam Shore P.O. Box 406469 Tel: (423) 296‐1506 Email: smshore@trane.com 18. Champions Real Estate Group LLC Trade Payable $10,466 Attn.: Lin Teng 6117 Richmond Avenue, Suite 120 Houston, Texas 77057‐6267 Tel: (713) 847‐6666 Email: lin@bellairefoodstreet.com 19. Trimmers Holiday Decor Trade Payable $9,643 Attn.: Dale Norwine 2650 59th Street Sarasota, Florida 34243 Tel: (941) 355‐6655 Email: dale@trimmershd.com 20. Foxhill Construction LLC Trade Payable $9,000 Attn.: Joe Jones 139 Dogwood Lane Hampstead, North Carolina 28443 Tel: (919) 384‐6535 Email: joe@foxhillconstruction.com 21. Florida Bulb & Ballast Inc. Trade Payable $8,109 Attn.: Karen Jones 1617 Cooling Street Melbourne, Florida 32935‐5905 Tel: (321) 259‐7882 Email: customerservice@flabulb.com 22. Schindler Elevator Corporation Trade Payable $7,855 Attn.: David O'Brien P.O. Box 93050 Chicago, Illinois 60673‐3050 Tel: (864) 627‐5332 Fax: (412) 578‐6600 23. A & H Mechanical Trade Payable $6,765 Contracting, Inc. Attn.: Cindy P.O. Box 38 Collinsville, Illinois 62234 Attn.: Cindy Tel: (618) 874‐5588 Email: cindy@ahmech.com 24. SoCo Services, LLC Trade Payable $6,363 Attn.: Chris 1001 Springwood Avenue, Unit #2 Gibsonville, North Carolina 27249 Tel: (336) 446‐1334 Email: socoservices@yahoo.com 25. AFL Network Services Inc. Trade Payable $6,300 Attn.: Carolyn Price P.O. Box 896112 Charlotte, North Carolina 28283 Tel: (800) 368‐1034 Email: carolyn.price@aflglobal.com 26. DCO Construction LLC Trade Payable $5,500 Attn.: Eladio Cuellar 50 E. Elizabeth Street Brownsville, Texas 78520 Tel: (956) 521‐2578 Email: Ecuellardesigns@yahoo.com 27. The Wilbert Group Trade Payable $5,250 Attn.: M. Braykovich 1718 Peachtree Street, Suite 1048 Atlanta, Georgia 30309‐2422 Tel: (404) 343‐4080 Email: mbraykovich@thewilbertgroup.com 28. JennMack Group LLC Trade Payable $5,230 Attn.: Jennifer Irving 1327 Brewer Road Winston Salem, North Carolina 27127 Tel: (412) 953‐9827 Email: brisbanegroup99@yahoo.com 29. Gettle Incorporated Trade Payable $5,142 Attn.: Elizabeth Bair 325 Busser Road P.O. Box 337 Emigsville, Pennsylvania 17318‐0337 Tel: (717) 843‐1231 Email: ebair@gettle.com 30. Nauman Mechanical Inc. Trade Payable $4,850 Attn.: Nicole Foleno P.O. Box 407 Stroudsburg, Pennsylvania 18360 Tel: (570) 476‐7606 Email: nicole@naumaninc.com CBL & ASSOCIATES: In Chapter 11 With Plan to Cut Debt by $1.5-Bil. ------------------------------------------------------------------ Mall operator CBL Properties (NYSE:CBL) announced that CBL & Associates Properties, Inc., CBL & Associates Limited Partnership, and certain other related entities filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Houston, TX, on Nov. 1, 2020. Through this process, all day-to-day operations and business of the Company's wholly owned, joint venture and third-party managed shopping centers will continue as normal. The Company intends to use the Chapter 11 process to implement terms outlined in the Restructuring Support Agreement (the "RSA") that it entered into on August 18, 2020, with certain beneficial owners and/or investment advisors or managers of discretionary funds, accounts, or other entities (the "noteholders") representing in excess of 62% (including joinders) of the aggregate principal amount of the Operating Partnership's 5.25% senior unsecured notes due 2023 (the "2023 Notes"), the Operating Partnership's 4.60% senior unsecured notes due 2024 (the "2024 Notes") and the Operating Partnership's 5.95% senior unsecured notes due 2026 (the "2026 Notes" and together with the 2023 Notes and the 2024 Notes, the "Unsecured Notes"). The RSA contemplates agreed-upon terms of a pre-arranged comprehensive restructuring of the Company's balance sheet (the "Plan"). The Plan will provide the Company with a significantly stronger balance sheet by reducing total debt and preferred obligations by approximately $1.5 billion, extending debt maturities and increasing liquidity while maintaining operational consistency. "After months of discussions and consideration of a number of alternatives, CBL's management and the Board of Directors firmly believe that implementing the comprehensive restructuring as outlined in the RSA through a Chapter 11 voluntary bankruptcy filing will provide CBL with the best plan to emerge as a stronger and more stable company," said Stephen D. Lebovitz, Chief Executive Officer of CBL. "With an aggregate of approximately $1.5 billion in unsecured debt and preferred obligations eliminated and a significant increase to net cash flow, upon emergence, CBL will be in a better position to execute on our strategies and move forward as a stable and profitable business." Mr. Lebovitz added, "We have continued negotiations with the lenders under our secured credit facility since the signing of the RSA and expect further discussions in an effort to reach a tri-party consensual agreement between the Company, noteholders and credit facility lenders during the bankruptcy process." As of September 30, 2020, CBL had approximately $258.3 million in unrestricted cash on hand and available-for-sale securities. The Company's cash position, combined with the positive cash flow generated by ongoing operations, is expected to be sufficient to meet CBL's operational and restructuring needs. The Company has filed various customary motions with the Court seeking several types of relief to allow CBL to meet necessary obligations and fulfill its duties during the restructuring process, including authority to continue payment of employee wages and benefits, honor certain customer and vendor commitments and otherwise manage its day-to-day operations as usual. Certain subsidiaries, including CBL's joint ventures and the majority of CBL's special purpose entities holding properties that secure mortgage loans, were not included as part of the in-court process. Subject to Court approval, CBL anticipates continuing to meet all debt service and other obligations, as required, under its property level secured loans and joint venture partnerships. The latest information on CBL's restructuring, including news and frequently asked questions, can be found at cblproperties.com/restructuring. * * * Reuters reports that CBL became the latest mall operator seeking to restructure its operations as the COVID-19 crisis caused prolonged closures. Mall operators in the U.S. have been strapped for cash amid the pandemic as people have stayed indoors and resorted to online shopping. Retailers, including J.C. Penney Co Inc, one of CBL's biggest renter, already grappling with customers' abandonment of traditional stores for online shopping have also resorted to bankruptcy filings. CBL's filing follows that of Pennsylvania Real Estate Investment Trust earlier on Sunday, November 1, 2020, which filed a chapter 11 petition to execute a prepackaged financial restructuring plan. About CBL & Associates Properties Inc. CBL & Associates Properties, Inc. -- http://www.cblproperties.com/ -- is a self-managed, self-administered, fully integrated real estate investment trust ("REIT") that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers, and office properties. CBL's portfolio is comprised of 107 properties totaling 66.7 million square feet across 26 states, including 65 high-quality enclosed, outlet and open-air retail centers and 8 properties managed for third parties. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. CBL & Associates Properties, Inc., CBL & Associates Limited Partnership, and certain other related entities filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Houston, TX, on Nov. 1, 2020 (Bankr. S.D. Tex. Lead Case No. 20-35226). Weil, Gotshal & Manges LLP is serving as legal counsel to the Company and Moelis & Company is serving as restructuring advisor. Berkeley Research Group, LLC is the Debtors' financial advisor. Epiq Corporate Restructuring, LLC, is the claims agent. CCM MERGER: Moody's Rates $275MM 5-Year Term Loan B 'Ba3' --------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to CCM Merger, Inc.'s $275 million 5-year term loan B and a Ba3 rating to the company's proposed $45 million 5-year revolving credit facility. A Caa1 rating was assigned to the company's proposed $275 million 5.5-year senior unsecured notes. Moody's affirmed CCM's B2 Corporate Family Rating and the B2-PD Probability of Default Rating, and changed the rating outlook to stable from negative. The existing Ba3 ratings on CCM's current revolver and term loan B due 2021 and the existing Caa1 rating on its $200 million 6% senior unsecured due March 2022 remain unchanged and will be withdrawn once the transaction closes. Proceeds from the offerings along with $22 million of balance sheet cash, will be used to refinance the company's existing $282 million term B loan and fully drawn $15 million revolver debt, refinance its $200 million 6% senior unsecured notes due 2022, and pay a $60 million dividend to its owner. "The outlook revision to stable and rating affirmation considers the proposed transaction benefits, including the elimination of a significant near-term debt maturity and revised financial covenants that push covenant compliance testing to the fourth quarter of next year," stated Keith Foley, a Senior Vice President at Moody's. There will be a slight reduction in balance sheet cash on a pro forma basis, however, revolver availability will increase to $45 million and more than offset the reduction in cash. As a result, pro forma cash plus revolver availability will increase to $82 million from $59 million. The revision to stable outlook and rating affirmation also considers that, despite the continued challenges related to the coronavirus pandemic and slight increase in leverage, CCM has performed well in terms of EBITDA on both an absolute and margin basis once the MotorCity Casino Hotel reopened in early August and will be positive on a free cash flow basis. This will provide the company with the opportunity to repay debt and reduce leverage over time. Moody's expects debt/EBITDA, which was about 6.5x on a 30 June 2020 latest 12-month basis, to rise slightly on a pro forma basis to about 7x, but then drop to closer to the company's pre-corona virus debt/EBITDA level of about 4x by the end of fiscal 2021. Moody's also assumes in the stable outlook that CCM's casino will continue to operate without interruption and that capacity restrictions will be eased over time. Moody's took the following rating actions on CCM Merger, Inc.: New Assignments: Issuer: CCM Merger, Inc. Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba3 (LGD2) Senior Secured 1st Lien Term Loan B, Assigned Ba3 (LGD2) Senior Unsecured Notes, Assigned Caa1 (LGD5) Ratings Affirmed: Issuer: CCM Merger, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Ratings unaffected and to be withdrawn at closing: Issuer: CCM Merger, Inc. $15 million revolver due 2021, Ba3 (LGD 2) $282 (outstanding amount) million term loan B due 2021, Ba3 (LGD 2) $200 million 6% senior unsecured due 2022, Caa1 (LGD 5) Outlook Actions: Issuer: CCM Merger, Inc. Outlook, Revised to Stable from Negative RATINGS RATIONALE CCM's B2 CFR reflects the demonstrated stability and favorable characteristics of the Detroit gaming market, history of financial support from its owner, and limited capital expenditure plans. Also supporting CCM's credit profile is Moody's expectation that the company will continue to use its free cash flow to repay date above and beyond scheduled required amortization amounts. Key credit concerns include the company's high leverage, small, single asset profile, credit pressure from efforts to contain the coronavirus, potential for a slow recovery, and long-term fundamental challenges facing regional gaming companies. Corporate governance in terms of financial policy is good. Marian Ilitch has supported the company with cash infusions to support liquidity when necessary, and the company has consistently paid down debt. The proposed $60 million dividend is negative but is moderate in relation to the more than $220 million of debt repayment over the preceding four years. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely in the near-term given the weak operating environment and continuing uncertainty related to the coronavirus. An upgrade would require a high degree of confidence on Moody's part that the gaming sector has returned to a period long-term stability, and that CCM demonstrate the ability to generate positive free cash flow, maintain good liquidity, and operate at a debt/EBITDA level at 4.0x or lower. A downgrade could occur if Moody's anticipates that CCM's earnings decline will be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. Ratings could also be lowered if for any reason, the company is unable to refinance its existing debt in a manner that alleviates near-term deb maturity concerns. The principal methodology used in these ratings was Gaming Methodology published in October 2020. CCM, through its subsidiary Detroit Entertainment L.L.C, owns and operates the MotorCity Casino Hotel in Detroit, Michigan, one of only three commercial casinos allowed to operate in the Detroit area. CCM is owned by Marian Ilitch and generated approximately $348 million in net revenue in the last twelve months ended June 30, 2020. The company is privately held and does not publicly disclose detailed financial information. CEL-SCI CORP: Extends Shareholders Rights Agreement Until 2025 -------------------------------------------------------------- The Board of Directors of CEL-SCI Corporation amended its Shareholder Rights Agreement, originally adopted on Nov. 7, 2007, to provide that the Shareholder Rights Agreement will now expire on Oct. 30, 2025. In November 2007, the Company declared a dividend of one Series A Right and one Series B Right, or collectively the Rights, for each share of its common stock which was outstanding on Nov. 9, 2007. When the Rights become exercisable, each Series A Right will entitle the registered holder, subject to the terms of a Rights Agreement, to purchase from the Company one share of its common stock at a price equal to 20% of the market price of its common stock on the exercise date, although the price may be adjusted pursuant to the terms of the Rights Agreement. If after a person or group of affiliated persons has acquired 15% or more of the Company's common stock or following the commencement of a tender offer for 15% or more of the Company's outstanding common stock (i) the Company is acquired in a merger or other business combination and it is not the surviving corporation, (ii) any person consolidates or merges with the Company and all or part of its common shares are converted or exchanged for securities, cash or property of any other person, or (iii) 50% or more of the Company's consolidated assets or earning power are sold, proper provision will be made so that each holder of a Series B Right will thereafter have the right to receive, upon payment of the exercise price of $100 (subject to adjustment), that number of shares of common stock of the acquiring company which at the time of such transaction has a market value that is twice the exercise price of the Series B Right. About CEL-SCI Corporation CEL-SCI -- http://www.cel-sci.com/-- is a clinical-stage biotechnology company focused on finding the best way to activate the immune system to fight cancer and infectious diseases. The Company's lead investigational therapy Multikine is currently in a pivotal Phase 3 clinical trial involving head and neck cancer, for which the Company has received Orphan Drug Status from the FDA. The Company has operations in Vienna, Virginia, and near Baltimore, Maryland. CEL-SCI reported a net loss of $22.13 million for the year ended Sept. 30, 2019, compared to a net loss of $31.84 million for the year ended Sept. 30, 2018. As of June 30, 2020, the Company had $42.03 million in total assets, $23.02 million in total liabilities, and $19.01 million in total stockholders' equity. BDO USA, LLP, in Potomac, Maryland, the Company's independent accounting firm, issued a "going concern" qualification in its report dated Dec. 16, 2019, citing that the Company has suffered recurring losses from operations and expects to incur substantial losses for the foreseeable future that raise substantial doubt about its ability to continue as a going concern. CENOVUS ENERGY: Fitch Alters Outlook on BB+ Rating to Positive -------------------------------------------------------------- Fitch Ratings has affirmed Cenovus Energy Inc.'s (CVE) ratings at 'BB+' and revised the Rating Outlook to Positive from Negative following its plan to combine with Husky Energy Inc. (HSE) in an all stock deal valued at CAD23.6 billion, including assumed debt. The combined company will be the third largest upstream producer in Canada at approximately 750,000 boepd, and the largest Canadian-based refiner with total North American upgrading and refining capacity of approximately 660,000 bpd, including approximately 350,000 bpd of heavy oil conversion capacity. The company will also have more than 265,000 bpd of takeaway capacity on Alberta's existing pipelines, and about 305,000 bpd on future planned pipelines. The deal is subject to shareholder approval and other customary closing conditions. The Positive Outlook reflects several credit enhancing features of the transaction, including the economic benefits of higher downstream integration, and the potential for up to CAD1.2 billion in synergies, which should boost CVE's netbacks and FCF, as well as increase the company's ability to organically lower its gross debt balances. Fitch believes the company will not require asset sales to reach its de-levering targets under our base case assumptions; however, the speed of de-levering will depend on underlying oil prices and refined product margins, and the extent to which the company realizes stated synergies. CVE's stand-alone ratings are supported by its size and scale; the benefits of a partially integrated business model, which includes two U.S. joint-venture (JV) refineries; its relatively low sustaining capital; the moderate decline rates associated with the oil sands; and its commitment to defending the balance sheet, including a track record of significant debt reductions prior to the coronavirus pandemic. Stand-alone rating concerns include the lower realizations associated with oil sands operations, the higher volatility seen with Western Canadian Select (WCS) differentials and prices, the material gross debt additions made by the company in 1H20; and the risk that a second wave of coronavirus infections could depress oil demand and prices and slow company plans to reduce leverage, resulting in prolonged weaker credit metrics. KEY RATING DRIVERS Credit Friendly Transaction: As contemplated, the transaction is expected to be credit friendly, with elements including a stock-for-stock exchange between Cenovus and Husky at an exchange ratio of 0.7845 CVE share plus 0.0651 CVE warrants in exchange for each Husky share, representing a premium of 21% excluding warrants and 23% including warrants as of Oct. 23; the lack of asset sales required to de-lever the joint balance sheet post close; and the lower expected level of cash flow volatility stemming from increased downstream integration. Fitch anticipates the company will seek to reduce gross balance sheet debt using FCF following the close of the transaction. As calculated by Fitch, at June 30, 2020, CVE's debt/EBITDA leverage was 5.2x, while HSE's was 4.3x. Increased Downstream Integration: A key rationale for the merger is the increased cash flow resilience of the combined companies through higher integration. For CVE, this translates into increased downstream integration and lower exposure to WCS differentials, which have historically added a layer of volatility to CVE's results that most U.S. peers lack. On a pro forma basis, CVE's refining and upgrading capacity will triple from 250,000 bpd to 660,000 bpd, and its ability to process blended heavy oil will more than double to 350,000 bpd as it adds the 110,000 bpd Lloydminster complex, 175,000 bpd Lima, OH and 160,000 bpd (gross) Toledo JV refineries, and the 45,000 bpd Superior, WI Refinery (currently being rebuilt but expected online 2022). Post-merger across all sources (refining integration, currently committed pipeline capacity, and rail), Cenovus will cover around 2/3rds of heavy oil exports, with less than 20% coming from the highest cost option, rail. Merger Synergies: The company has outlined CAD1.2 billion in run rate synergies, split among corporate and operating synergies (CAD600 million), and capital program efficiencies (CAD600 million). Of the corporate and operating synergies, a significant portion will be achieved through workforce reduction, IT savings, and procurement savings. Capital efficiencies of CAD600 million stem from prioritizing capital into the company's best prospects (Foster Creek, Christina Lake and Lloyd Thermal), while allowing lower netback properties to run off (Deep Basin and Sunrise). If realized, this would lower the company's joint sustaining capital from CAD3.0 billion to CAD2.4 billion. High Initial leverage: As calculated in Fitch's base case, CVE's initial debt/EBITDA leverage in 2021 will be 4.4x, reflecting the lingering impacts of pandemic on hydrocarbon pricing, as well as the impact of transition/severance costs incurred in 2021. Fitch anticipates leverage will decline relatively quickly thereafter, as the company dedicates increased FCF generation to debt repayment over the next few years, but will be influenced by oil prices, refining margins, and the extent of realized synergies. Higher ARO: CVE will inherit HSE's Asset Retirement Obligation (ARO) of CAD2.78 billion, which is largely driven by its offshore positions in Atlantic Canada and in the Pacific. While the high netback Asian projects economics are protected by long-term fixed price contracts, offshore Atlantic projects have been negatively impacted by the pandemic, particularly when considering incremental go-forward project spending. In September, Husky asked the federal and provincial governments of Newfoundland and Labrador for direct investments in its partly completed CAD2.2 billion West White Rose offshore project following a one-year construction delay. The federal government so far has not yet chosen to participate in this project. Early abandonment of this project could shorten the field life of White Rose and accelerate the ARO. Dividend Manageable: While Cenovus suspended its dividend at the beginning of the pandemic, the new combined entity expects to initiate a quarterly dividend of $0.0175 per share, pending approval of the new board. Fitch notes the dividend is modest in dollar terms, at only about half the size of CVE's stand-alone dividend (CAD307 million), and in line with HSE's current dividend. 50% Equity Credit (EC) for Preferreds: Under our corporate hybrids criteria, Fitch assigned Husky's preferreds 50% EC for purposes of calculating leverage. The decision to assign 50% EC was based on the instrument's cumulative coupon deferral, features subordination to other debt instruments, lack of material covenant restrictions and events of default, lack of call dates or step up features, and the fact that interest deferrals does not trigger events that create incentives to redeem. DERIVATION SUMMARY On a pro forma basis, at approximately 750,000 barrels of oil equivalent per day (boed) before royalties, CVE will be one of the larger independent E&Ps in the North American universes, smaller only than peers ConocoPhillips (A/Stable) and Occidental Petroleum (BB/Stable) in the U.S. In terms of its direct Canadian peers, CVE will be the third largest producer, behind only Canadian Natural Resources Limited (1.1 mmboed) and Suncor Energy Inc. (777,000 boed), and will be the second largest Canadian producer on a proved reserve basis (6.5 billion boe 1p). With approximately 660,000 bpd of refining and upgrading capacity, the company's post-merger integration is expected to increase significantly, although it will still require committed pipeline capacity and rail to move its product to market. In terms of diversification, CVE picks up modest incremental benefits by picking up Husky's offshore properties in Asia. As calculated by Fitch, CVE's stand-alone cash margins are low compared with peers, which led to notable debt increases at the beginning of the pandemic. Fitch expects the post-merger company CVE will see meaningful uplift to its netbacks due to integration impacts, the inclusion of several higher margin Husky properties (including fixed price Asian gas contracts), and, to the extent realized, the announced CAD1.2 billion in integration synergies. CVE's initial debt/EBITDA leverage in 2021 will be 4.4x but is expected to improve beginning in 2022. KEY ASSUMPTIONS Key Assumptions for Base Case -- Merger assumed effective as of January 2021; -- Base case WTI oil prices of USD42/bbl in 2021, USD47 in 2022, and USD50 in 2023; -- WCS differential of USD12.50 in 2021, USD16.00 in 2022, and USD16.50 in 2023; -- Production of approximately 750,000 boepd over the next few years; -- Company initiates dividend in 2021 which is kept flat across the forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Demonstrated progress in integrating Cenovus and Husky assets; -- Demonstrated progress in executing on deal synergies resulting in higher netbacks; -- Trend towards increased FCF generation with expectation that FCF will be used for debt reduction; -- Mid-cycle debt/EBITDA at or below 2.7x on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Failure of the transaction to close; -- Unexpected difficulties in integrating Cenovus and Husky assets, resulting in limited synergy gains and netback improvements, and a reduced ability to make gross debt reductions; -- Mid-cycle debt/EBITDA at or above 3.4x on a sustained basis; -- Inadequate liquidity. LIQUIDITY AND DEBT STRUCTURE At closing, Cenovus expects to retain the committed credit facilities of both merger partners totalling CAD8.5 billion, as well as separate uncommitted demand facilities. Revolving committed facilities at both stand-alone entities consist of CVE's CAD3.3B tranche A revolver (matures 2023). CVE's CAD1.2 billion tranche B revolver (matures 2022), Husky's CAD2.0 billion revolver (matures 2022) and HSE's second CAD2billion revolver (matures 2024). Separately, CVE has a CAD 1.1. billion committed facility in place (matures 2021). Collectively the companies had short-term borrowings of CAD2.2 billion at June 30, 2020, in addition to LOCs outstanding. 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 Cenovus' ESG Relevance Score for Exposure to Social Impacts was lowered from '4' to '3' following the merger announcement with Husky, given the Husky acquisition is expected to materially increase the company's integration profile. Post-merger, around 2/3rds of CVE's heavy oil production exports will be covered. As a result, CVE should not be as exposed to volatile WCS prices which have been pressured by ongoing social resistance to new pipelines in Canada. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. CENOVUS ENERGY: Moody's Puts Ba2 CFR on Review for Upgrade ---------------------------------------------------------- Moody's Investors Service placed the ratings of Cenovus Energy Inc. on review for upgrade, including its Ba2 Corporate Family Rating, Ba2 senior unsecured notes rating and Not Prime commercial paper rating. The review of Cenovus' ratings follows the announcement [1] that Cenovus and Husky Energy Inc. (Husky) have reached an agreement to merge in an all-stock transaction valued at C$23.6 billion, inclusive of debt. The combined company will operate as Cenovus and remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of both Cenovus and Husky. The transaction is expected to close in Q1 2021, subject to the timing of customary closing conditions, regulatory approvals, and the approval of shareholders of both Cenovus and Husky. On Review for Upgrade: Issuer: Cenovus Energy Inc. Corporate Family Rating, Placed on Review for Upgrade, currently Ba2 Probability of Default Rating, Placed on Review for Upgrade, currently Ba2-PD Senior Unsecured Shelf, Placed on Review for Upgrade, currently (P)Ba2 Senior Unsecured Commercial Paper, Placed on Review for Upgrade, currently NP Senior Unsecured Regular Bond/Debenture, Placed on Review for Upgrade, currently Ba2 (LGD4) Outlook Actions: Issuer: Cenovus Energy Inc. Outlook, Changed to Rating Under Review from Negative RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The review will focus on the likelihood of closing, the final terms of the merger and its forward view of the merged company's business and financial risks, including how downstream integration mitigates Canadian heavy oil differentials, the ability to generate free cash flow and de-lever, the dividend policy, and management's longer-term targets for financial metrics. Its current assumptions, which are subject to confirmation, include: -- All of Cenovus' and Husky's senior unsecured notes will be pari passu -- Financial policies are expected to be conservative, given that the management teams and boards of Cenovus and Husky both have conservative financial policies, demonstrated by the rapid reduction of dividends and capex during oil price shocks -- The combined asset base will have an investment grade profile with significant downstream integration - a sizable, long-lived, low decline, and low-cost production and reserve base -- stable and significant cash flow from the well-priced contracts for offshore China natural gas production -- The merged company will have the ability to generate significant free cash flow at low oil prices with the proceeds largely used to reduce debt, improving the weak 2021 leverage metrics Should the merger close on the conditions and structure Moody's currently expects, and its forward view of its business and financial risk remains unchanged, it is likely that the merged company's senior unsecured debt would be assigned a Baa3 rating. The rating outlook would likely be negative, reflecting the uncertainty around the successful integration of the combined assets, and the pace of deleveraging and commodity price improvement. Cenovus is a Calgary, Alberta-based exploration, and production company with interests in downstream refinery assets. Cenovus had approximately 3.8 billion barrels of oil equivalent of net proved reserves, and produced about 465 thousand boe/d (gross) in Q2 2020. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. CERENCE INC: S&P Withdraws 'B' Issuer Credit Rating --------------------------------------------------- S&P Global Ratings withdrew its 'B' issuer credit rating on Burlington, Mass.-based Cerence Inc. at the issuer's request, as it has paid off its term loan B. Cerence is a voice-assistant solutions provider for automobiles. CHESTER COUNTY IDA: Moody's Cuts 2013A Revenue Bonds to Ba2 ----------------------------------------------------------- Moody's Investors Service has downgraded the rating of Chester County Industrial Development Authority's (PA) Student Housing Revenue Bonds (University Student Housing, LLC Project at West Chester University of Pennsylvania), Series 2013A to Ba2 from Baa3, and assigns a negative outlook. This action concludes the review for possible downgrade initiated on October 1, 2020. RATINGS RATIONALE The downgrade to Ba2, and the removal of the rating from Watchlist review, is based on the expected and significant contraction in financial resources precipitated by COVID-related campus restrictions put into effect in March 2020, resulting in the demand-driven closure of Commonwealth Hall for the current academic year. The rating action incorporates the operating and fiscal ramifications of West Chester University's (WCU) recent announcement to continue in a primarily on-line instruction format through the spring 2020 semester, thereby eliminating all 2020-2021 rental revenue supporting the Series 2013A bonds. Moody's now expects a material drawdown of trustee-held and project reserves, including a projected 74% of debt service reserve funds, in order to meet debt service requirements through August 1, 2021. Current year declines in project fundamentals will burden future budgets as USH replenishes the debt service reserve fund to required levels, restores fund balance draws, and incorporates payment deferrals into upcoming financial plans. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The rating downgrade incorporates the pandemic's impact on housing occupancy and overall project performance. Additionally, near-term changes in student preferences stemming from a prolonged interruption of campus activities could result in longer-term shifts in overall student demand. Offsetting these challenges are a track record of consistently strong pre-COVID housing demand that often exceeded 100% occupancy, and the expectation that revenue performance will rebound to prior levels once campus restrictions are lifted. Additionally, the strategic and operating coordination between the university and project owner (University Student Housing, LLC/West Chester University Foundation) remains an important credit support factor. RATING OUTLOOK The negative outlook reflects expectations that the diminished level of available reserves and budgetary flexibility could further decline over the outlook period in the event of a weaker-than-anticipated rebound in fall 2021 lease-up. This could lead to further negative rating action absent indications of explicit or direct project support by the university or State System of Higher Education, PA (PASSHE, Aa3/stable). Conversely, restoration of strong occupancy and revenue performance which supports a rebuilding of reserves next year could lead to positive rating outcomes. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Timely restoration of historical financial performance that supports replenishment of reserve funds and restores project financial flexibility FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Extension of COVID-mandated restrictions that impede the ability to re-establish occupancy levels, and results in continued draws on remaining reserves LEGAL SECURITY The bonds are secured by project revenues consisting primarily of housing rental charges. The bond trustee has a security interest in various funds, such as the Bond Fund, Debt Service Reserve Fund, and the Repair and Replacement Fund, as provided by the Indenture. PROFILE University Student Housing, LLC, is a Section 501(c)(3) limited liability company whose sole member is West Chester University Foundation. The Company is governed by a Board of Managers that consists of no fewer than 15, and up to 39, members who serve by virtue of their positions as Trustees of the Foundation. The Foundation's Board of Trustees consists of five members who serve by virtue of their respective positions within the University. USH owns six on-campus residence halls at West Chester University, with a total of 2,962 beds, inclusive of Commonwealth Hall. METHODOLOGY The principal methodology used in this rating was Global Housing Projectst published in June 2017. CHF COLLEGIATE HOUSING: S&P Affirms 'BB+' Rating on Revenue Bonds ----------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' long-term rating on New Hope Cultural Education Finance Corp., Texas' series 2017A and taxable series 2017B student housing revenue bonds (the bonds) issued on behalf of CHF Collegiate Housing Island Campus LLC (CHF-Island Campus or the project). At the same time, S&P Global Ratings removed the rating from CreditWatch with negative implications, where it had been placed on Aug. 5, 2020. The outlook is negative. "The negative outlook and CreditWatch removal reflects our view of the additional risk and uncertainty the COVID-19 pandemic places on the CHF-Island Campus as well as Texas A&M University-Corpus Christi," said S&P Global Ratings credit analyst Ruchika Radhakrishnan. "The project faces additional rating pressure from the university's declining undergraduate enrollment trend and the competitive landscape with other housing options for students in the area," Ms. Radhakrishnan added. On Aug. 5, 2020, S&P placed its rating on CHF-Island Campus on CreditWatch with negative implications, along with many other U.S. higher education privatized (off-balance sheet) student housing projects, in the wake of the COVID-19 pandemic and the uncertainties surrounding the economic fallout. 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 2021 enrollment and occupancy levels. S&P views the risks posed by COVID-19 to public health and safety as a social risk under the rating agency's environmental, social, and governance (ESG) factors. In addition, given the location of the project in southern Texas, the environmental risk is also elevated when compared to the sector given the potential for severe weather events and sea level rise. Despite the elevated social and environmental risks, S&P believes CHF-Island Campus' governance risk is in line with the rating agency's view of the sector. A&M-Corpus Christi is one of 11 universities that make up the Texas A&M University System, with two campuses in Corpus Christi. The university has three on-campus housing options, including two other projects rated by S&P Global Ratings, for a collective 2,832 total beds. CHICAGO PARK: Moody's Affirms Ba1 on Tax Debt, Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service has affirmed the Ba1 rating on Chicago Park District (CPD), IL's general obligation unlimited tax (GOULT) debt and general obligation limited tax (GOLT) debt. Concurrently, the outlook has been revised to negative from stable. As of fiscal 2019, the district had $312 million in rated debt. The pledge supporting the limited tax bonds is limited by the amount of the district's debt service extension base (DSEB), but ultimately secured by an all funds pledge. RATINGS RATIONALE The Ba1 rating on CPD's GO bonds aligns the rating closely to the rating on the City of Chicago's GO debt to reflect the close political and governance relationship with the city and coterminous economic base that supports extensive leverage of overlapping governments. The district's pension burden is moderate but may become more burdensome as the cost to fend off the depletion of plan assets rises. Without material increases in employer plan contributions, which may be even more difficult in the current environment, the system is on pace to deplete its assets within the next decade, forcing the district to finance benefits directly from operations on a pay-go approach. The rating also incorporates the district's large tax base, moderate bonded debt burden and healthy reserve levels despite an expected draw in the current year driven by coronavirus related revenue declines. The absence of distinction between the Ba1 rating on the district's GOULT debt and GOLT is based upon the presence of an all available funds pledge. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The economic and fiscal consequences of the coronavirus crisis is a key driver for this rating action. RATING OUTLOOK The outlook was revised to negative to mirror the negative outlook on the City of Chicago's GO bonds, reflecting the close political and governance relationship with the park district. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Stabilization or upgrade of the rating on City of Chicago's GO bonds given the two entities' governance ties and conterminous tax base - Improved pension funding framework that strengthens the plan's funding trajectory without impairing operating reserves and liquidity FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Downward movement in the rating on City of Chicago's GO debt - Significant increase in overlapping debt and pension leverage - Substantial reduction in the district's fund balance or liquidity LEGAL SECURITY Debt service on outstanding GOULT bonds is secured by the district's full faith and credit pledge and authorization to levy property taxes unlimited as to both rate and amount. The district has also pledged certain alternate revenue to repayment of certain GOULT bonds. The levy can be abated if the district determines that sufficient legally available revenues from other sources have been collected. CPD's outstanding GOLT DSEB bonds are secured by the authorization to levy a dedicated property tax unlimited as to rate but limited by the amount of the district's debt service extension base and any funds legally available for such purpose. PROFILE The Chicago Park District was created in 1934 by the Park Consolidation Act. The district is coterminous with the City of Chicago and is the largest municipal park manager in the nation. METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in July 2020. CHRISTIAN CARE: Fitch Cuts Series 2014 $29.1MM Revenue Bonds to B+ ------------------------------------------------------------------ Fitch Ratings has downgraded the ratings assigned to the following bonds issued by Mesquite Health Facilities Development Corporation, TX on behalf of Christian Care Centers (Christian Care) to 'B+' from 'BB-': -- $22.3 million retirement facility revenue bonds, series 2016; -- $29.1 million retirement facility revenue bonds, series 2014. The ratings have been placed on Rating Watch Negative. SECURITY The bonds are secured by a gross revenue pledge, mortgage liens on Christian Care's property, and debt service reserve funds. KEY RATING DRIVERS CORONAVIRUS PRESSURES: The downgrade to 'B+' reflects the significant pressure experienced by Christian Care's operations from the coronavirus pandemic. Overall occupancy has fallen in all service lines, as seen in a drop in independent living, assisted living, memory care and skilled nursing occupancy from an average of 89.4%, 92.7%, 94.3% and 75.8% in 2019, to an average of 84.8%, 90.8%, 87.8% and 64.3% through the 2020 eight-month interim period. Despite the receipt of $1.241 million in HHS stimulus funds, Christian Care's total revenue decreased by 5% in the 2020 eight-month interim period compared to the 2019 eight-month interim period, primarily due to reduced nursing revenue and investment income. Expenses have also increased in 2020 compared to 2019 because of pandemic related supply costs and bonus pay provided to employees. POTENTIAL COVENANT VIOLATION: Christian Care's current forbearance agreement for a combination of debt service coverage under 1.2x and days cash on hand (DCOH) under 160 is expected to expire on Jan. 22, 2021. The placement of the 'B+' rating on Rating Watch Negative reflects the possibility of an event of default at FYE 2021, due to light debt service coverage (0.24x according to the issuer's Aug. 31, 2020 interim disclosure) and DCOH that remains well below 160 days. The issuer's Aug. 31, 2020 debt service coverage calculation does not include a $4.5 million Payment Protection Program (PPP) loan received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that management expects to be forgiven. Even if the loan is forgiven, the PPP loan funds may not be sufficient enough to offset the loss of revenues and negative net entrance fees realized through the eight-month interim period to produce 1.2x coverage by the end of the year. Fitch will monitor the outcome of the potential event of default and look to resolve the Watch once more details become available. Any outcome or remedy enforcement that negatively affects Christian Care's ability to repay its debt obligations would result in a downgrade. WEAK LIQUIDITY and PROFITABILITY: Christian Care's unrestricted cash and investments remain weak, which limits the margin of safety against default. In its unaudited Aug. 31 financial statements, Christian Care reported $9.9 million in liquidity (including PPP loan funds), which is slightly above the $9.6 million level at Dec. 31, 2019. This amount translates into a very low 100 DCOH and 18.9% cash to debt. The downgrade reflects the expectation for further liquidity erosion as a result of Christian Care's on-going capital projects and the pressured profitability stemming from occupancy, marketing and skilled nursing admission challenges. Though the operating ratio of 101.6% and net operating margin (NOM) of 5.2% produced through the interim period are on par with the below investment grade medians of 101.2% and 4.8%, Fitch views this level of profitability as poor given Christian Care's predominantly rental independent living contracts and fee-for-service arrangements. ELEVATED LONG-TERM LIABILITY PROFILE: Christian Care's total debt measured a very elevated 57x of annualized 2019 net available because of depressed core operating profitability and negative $769 thousand of net entrance fee receipts through the interim period. Maximum annual debt service (MADS) of $4 million is a moderate 11.2% of annualized eight-month revenues. ASYMMETRIC RISK FACTORS: There are no asymmetric risk considerations affecting the rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Notably improved liquidity ratios, particularly cash-to-debt of approximately 30% or better and significantly increased DCOH; -- The rating would be removed from Rating Watch Negative if Christian Care is able to achieve 1.2x debt service coverage by FYE 2020 or obtain an extended/new forbearance agreement. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Debt service coverage covenant violation and failure to obtain a new/extended forbearance agreement; -- A failure to improve profitability that leads to reduced liquidity and/or debt service coverage that remains below 1.2x. CREDIT PROFILE Christian Care serves the Dallas-Fort Worth metroplex with three senior living campuses in Mesquite, Fort Worth and Allen, Texas. Aggregate capacity as of Aug. 30, 2020 consists of 410 independent living units, 152 assisted living units, 77 memory care units and 119 skilled nursing beds. Total operating revenue was $36.4 million in 2019. The recent coronavirus pandemic and related government containment measures have created a more uncertain environment for the entire LPC sector. Top-line revenue pressure and added expenses started to affect Christian Care in March 2020 and could persist depending on the degree and longevity of the pandemic and related economic challenges. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in the sector as a result of the virus outbreak as it relates to severity and duration, and incorporate revised expectations for future performance and assessment of key risks. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. CINEMEX HOLDINGS: CineBistro Closes Brookhaven, Atlanta Location ---------------------------------------------------------------- Caleb J. Spivak of What Now Atlanta reports that after nearly a decade of showing flicks, CinéBistro has shuttered its TOWN Brookhaven location, at 1004 Town Blvd. in Atlanta, Georgia. News of the closure arrives several months after CinéBistro's parent company filed for Chapter 11 bankruptcy. The "dinner and a movie" concept temporarily closed its doors in February 2020 after a fire and remained closed through the pandemic. The 760 seat, seven-screen theatre, has since been removed from the company's website and with the closure two Georgia locations remain in Alpharetta and Peachtree Corners. Reps for CinéBistro in April said the bankruptcy filing was a result of "the economic crisis precipitated by the coronavirus pandemic." At the time, Cinemex Holdings USA, Inc. and Cinemex USA Real Estate Holdings, Inc., which own and operate several CMX Cinemas, CinéBistro, and Cobb Theatres in Georgia, did not announce plans to close any of its theatres. About Cinemex Holdings Cinemex operates 41 upscale dine-in movie theaters in 12 U.S. states under the CMX Cinemas brand. Cinemex, which is jointly owned by Mexican companies Grupo Cinemex and Operadora de Cinemas SA de CV, filed for Chapter 11 protection in April, was affected by the government-mandated closures of theaters during the COVID-19 pandemic. Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, the Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP serve as the Debtors' bankruptcy counsel. CINEMEX USA: Khan Parties Object to Plan & Disclosures ------------------------------------------------------ Omar Khan, et al (the "Khan Parties"), and file their objections to (I) Disclosure Statement for Second Amended Joint Plan of Reorganization of Cinemex USA Real Estate Holdings, Inc., Cinemex Holdings USA, Inc. and CB Theater Experience, LLC, and (II) Emergency motion to shorten deadlines regarding confirmation hearing to be scheduled for Nov. 17, 2020, and state as follows: Khan Parties point out that: * These Chapter 11 cases have been pending since late April 2020. For the most part, the Debtors have not operated their businesses during such time. * The Debtors filed the Notice of Designation of Stalking Horse Bid on October 1, 2020 (Doc. No. 681) (the "Stalking Horse Designation"). Attached to the Stalking Horse Designation was a letter of intent from Wine and Roses, S.A. de C.V. ("W&R") dated September 25, 2020. Neither the Stalking Horse Designation nor the Disclosure Statement reveal that W&R was an insider of the Debtors. * At a minimum, the Plan most likely violates the absolute priority rule. Under the Plan, Cinemex Holdings USA, Inc. will retain its equity interests in the remaining Debtors (in addition to non-Debtor subsidiaries). This retention of equity violates the absolute priority rule since the Plan does not provide for satisfaction of unsecured claims asserted against the subsidiary Debtors absent the affirmative vote of the holders of allowed GUC Claims. The Khan Parties submit that the Disclosure Statement (and Plan) are devoid of "adequate information" within the meaning of section 1125(a)(1). Specifically, the Khan Parties note the following: * The Plan provides that holders of "Syndicated Bank Loan Claims" shall receive their Pro Rata share of the "Syndicated Bank Loan Claims Allocation" – however, the Disclosure Statement does not quantify the amount of the "Syndicated Bank Loan Claims Allocation". * The Plan provides for an "impaired" "convenience class" – there is no information in the Disclosure Statement providing whether the vote of the "convenience class" will be (it should not) counted for cramdown purposes under 11 U.S.C. §§ 1129(b). * The Disclosure Statement provides no information as to the value of any equity (or assets) of any non-Debtor subsidiaries, including, without limitation, and in particular, those non-Debtor subsidiaries owned by Cinemex Holdings USA, Inc. * The liquidation analysis attached to the Disclosure Statement provides no breakdown of the separate estates; rather, the information appears on a consolidated basis. * The Disclosure Statement does not reveal that creditors who opt out of the extensive third-party releases shall not be entitled to receive distributions on account of the TLCF Note -- moreover, the Plan may unfairly discriminate since holders of Allowed GUC Claims may be treated separately and discriminately under the Plan. * The Disclosure Statement estimates that the DIP Loan Claims will be approximately $11,000,000 through confirmation; however, there is no detail provided as to how this amount is comprised, including, without limitation, distribution dates. * Neither the Plan nor the Disclosure Statement are executed by the Debtors. Both the Plan and Disclosure Statement contain the word "draft" on the signature line for the Debtors. Attorneys for the Khan Parties: Michael D. Seese SEESE, P.A. 101 N.E 3rd Avenue Suite 1270 Fort Lauderdale, FL 33301 Telephone: (954) 745-5897 mseese@seeselaw.com About Cinemex Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. The Debtors tapped Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP as bankruptcy counsel; Province, Inc. as financial advisor; and Omni Agent Solutions as noticing, balloting and administrative agent. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors. The committee is represented by Pachulski Stang Ziehl & Jones, LLP and Berger Singerman, LLP. CINEMEX USA: Unsecureds to Recover 15% in 3rd Amended Plan ---------------------------------------------------------- Cinemex USA Real Estate Holdings, Inc., Cinemex Holdings USA, Inc. and CB Theater Experience LLC submitted a Disclosure Statement for their Third Amended Joint Chapter 11 Plan of Reorganization. Pursuant to the Plan, unless a creditor agrees to less favorable treatment: * Holders of Allowed Secured Claims will receive, at the applicable Debtor's option, (i) payment in full in Cash; (ii) delivery of the collateral securing any such claim; (iii) payment of any interest required under section 506(b) of the Bankruptcy Code; (iv) reinstatement of such claim; or (v) such other treatment rendering such Claim Unimpaired. The Debtors have few to no secured claims and anticipate distributions to this class to be negligible. * Each Holder of Allowed Syndicated Bank Loan Claims will receive its pro rata share of the Syndicated Bank Loan Claims Allocation consisting of the compromise amount of $1,000,000. The Syndicated Bank Loan Claims are Allowed, under the Plan, in the amount, as of the Petition Date, of $159,113,879. * Each Holder of an Allowed GUC Claim in Class 4 will receive its Pro Rata share of the GUC Claims Trust Net Assets consisting of approximately $5.3 million plus a variable note equal to 8% of theater-level cash flow or "TLCF" (similar to operating cash flow) for the next three years net of amounts paid to Allowed Convenience Claims (approximately $190,000) and amounts paid to the GUC Trustee to administer the GUC Trust (approximately $350,000); provided that to the extent such GUC Claim is a Convenience Claim, such Holder will receive its Pro Rata share of the Convenience Claims Distribution. This allocation, subject to highly variable estimated totals of Claims in Class 4 and the speculative value of the TLCF Note, is projected to yield approximately 15% to Holders in this Class. * Each Holder of an Allowed Convenience Claim (Holders of Claims that equal $15,000 or less or that elect to reduce their Claim to $15,000) will receive, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Convenience Claim, a Cash distribution equal to 12% of its Allowed Convenience Claim, on or after the Effective Date. The Class 4 estimated allowed claims under the Amended Plan is $50-60 million and the estimated percentage recovery under the Amended Plan is 11.4% to 15.3%. Holders of Allowed GUC Claims will receive their Pro Rata share of approximately $5.3 million in cash plus a variable note from the Reorganized Debtors equal to 8% of theater-level cash flow or "TLCF" (similar to operating cash flow) for the next three years net of amounts paid to Allowed Convenience Claims (approximately $190,000) and amounts paid to the GUC Trustee to administer the GUC Trust (approximately $350,000). For Class 5 Convenience Claims, the estimated percentage recovery under the Amended Plan is 12.0 percent. Claimants with Allowed Convenience Claims that are $15,000 or less or that elect to reduce their Allowed Claims to $15,000 will receive 12% of such Allowed Claims in cash on the Effective Date. A full-text copy of the Disclosure Statement dated September 2, 2020, is available at https://tinyurl.com/y4wq6fdg from PacerMonitor.com at no charge. A full-text copy of the Disclosure Statement for Third Amended Joint Chapter 11 Plan of Reorganization dated October 28, 2020, is available at https://tinyurl.com/y6l2o496 from PacerMonitor.com at no charge. Co-Counsel to the Debtors: Patricia B. Tomasco QUINN EMANUEL URQUHART & SULLIVAN LLP 711 Louisiana Street, Suite 500 Houston, Texas 77002 Telephone: 713-221-7000 Facsimile: 713-221-7100 Email: pattytomasco@quinnemanuel.com and Juan P. Morillo (FBN 135933) 1300 I Street, NW, Suite 900 Washington, D.C. 20005 Telephone: 202-538-8000 Facsimile: 202-538-8100 Email: juanmorillo@quinnemanuel.com Jeffrey P. Bast (FBN 996343) Brett M. Amron (FBN 148342) BAST AMRON LLP One Southeast Third Avenue, Suite 1400 Sun Trust International Center Miami, Florida 33131 Telephone: 305-379-7904 Facsimile: 305-379-7905 Email: jbast@bastamron.com Email: bamron@bastamron.com About Cinemex Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. The Debtors tapped Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP as bankruptcy counsel; Province, Inc. as financial advisor; and Omni Agent Solutions as noticing, balloting and administrative agent. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors. The committee is represented by Pachulski Stang Ziehl & Jones, LLP and Berger Singerman, LLP. CLAAR CELLARS: Nov. 9 Plan Confirmation Hearing Set --------------------------------------------------- Debtors Claar Cellars, LLC, and RC Farms, LLC; and HomeStreet Bank filed with the U.S. Bankruptcy Court for the Eastern District of Washington motions for approval of their joint disclosure statement in support of their plan of reorganization. On August 27, 2020, Judge Whitman L. Holt approved the Disclosure Statement filed by the Debtors and HomeStreet and ordered that: * Sept. 30, 2020 is fixed as the last day to submit written ballots for accepting or rejecting either or both plans. * Oct. 9, 2020 is fixed as the last day for the Counsel for the Committee to file the report of balloting. * Oct. 12, 2020 at 4:30 p.m. is fixed as the last day for Parties in interest who wish to object to the confirmation of either or both plans to file a written objection to confirmation. * Nov. 9, 2020 at 9:30 a.m. at the United States Bankruptcy Court for the Eastern District of Washington, located at 402 East Yakima Avenue, Second Floor, Yakima, Washington 98901 is the confirmation hearing. A full-text copy of the order dated August 27, 2020, is available at https://tinyurl.com/y63z3qm2 from PacerMonitor.com at no charge. Counsel for RC Farms: ROGER W. BAILEY Bailey & Busey PLLC Counsel for Claar Cellars: STEVEN H. SACKMANN Sackmann Law Offices Counsel for HomeStreet: TARA J. SCHLEICHER JASON M. AYRES Foster Garvey PC About Claar Cellars LLC and RC Farms LLC Claar Cellars LLC -- https://www.claarcellars.com/ -- is a family-owned estate winery. It offers a selection of wines, including Riesling, Cabernet Sauvignon, Merlot, Chardonnay, Sauvignon Blanc, Syrah, Sangiovese, and newly planted Pinot Gris, Viognier, Malbec and Petite Sirah. Claar Cellars and its affiliate, RC Farms LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Lead Case No. 20-00044) on Jan. 9, 2020. At the time of the filing, the Debtors each had estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. Judge Whitman L. Holt oversees the cases. The Debtors are represented by Steven H. Sackmann, Esq., at Sackmann Law, PLLC; Toni Meacham, Esq., Attorney at Law; and Roger W. Bailey, Esq., at Bailey & Busey, PLLC. A committee of unsecured creditors has been appointed in Claar Cellars' bankruptcy case. The committee is represented by Southwell & O'Rourke, P.S. COASTAL INTERNATIONAL: Court to Confirm Plan -------------------------------------------- On August 14, 2020, Debtor Coastal International Inc. filed with the U.S. Bankruptcy Court for the Northern District of California, San Francisco Division, a Fourth Amended Disclosure Statement. On August 28, 2020, Judge Hannah L. Blumenstiel approved the Disclosure Statement and set Oct. 15, 2020 as the hearing date to consider confirmation of the Plan. According to the case docket, "Hearing Held [Oct. 15, 2020]/ For reasons stated on the record, the plan is confirmed. Mr. Golden shall upload an order attaching the plan agent agreement." As of Nov. 2, 2020, the judge has not yet entered findings of facts and order confirming the Plan. Attorneys for the Debtor: Jeffrey I. Golden Reem J. Bello WEILAND GOLDEN GOODRICH LLP 650 Town Center Drive, Suite 600 Costa Mesa, California 92626 Telephone 714-966-1000 Facsimile 714-966-1002 E-mail: jgolden@wgllp.com rbello@wgllp.com About Coastal International Coastal International, Inc., is a Nevada corporation formed in 1984, which provides trade show installation and dismantling services in the exhibit and event industry. Its operations extend into major cities across the United States, and the Company maintains a staff of trained, full-time employees to handle most any installation and dismantling project from start to finish. Coastal generated approximately $24 million in revenues during 2018. Coastal International sought creditor protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.19-13584) on Sept. 15, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. The case has been assigned to Judge Theodor Albert. The Debtor tapped Weiland Golden Goodrich LLP as counsel; and Finestone Hayes LLP, as co-counsel. COMMERCIAL METALS: Egan-Jones Hikes Sr. Unsecured Ratings to BB+ ---------------------------------------------------------------- Egan-Jones Ratings Company, on October 20, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Commercial Metals Company to BB+ from BB. Headquartered in Irving, Texas, Commercial Metals Company and its subsidiaries, manufactures, recycles, and markets steel and metal products and related materials. CONCHO RESOURCES: Egan-Jones Hikes Sr. Unsecured Ratings to BB- --------------------------------------------------------------- Egan-Jones Ratings Company, on October 19, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Concho Resources Inc. to BB- from B. Headquartered in Midland, Texas, Concho Resources Inc. acquires, develops, and explores for oil and natural gas properties. The Company operates in the Permian Basin area of Southeast New Mexico and West Texas. CONFLUENT HEALTH: Moody's Alters Outlook on B3 CFR to Positive -------------------------------------------------------------- Moody's Investors Service, changed Confluent Health, LLC's outlook to positive from negative and affirmed its B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating, B3 Senior secured first lien revolving credit facility rating, and B3 senior secured first lien term loan. Proceeds from the incremental first lien term loan will be used to fund thirteen identified tuck-in acquisitions. The affirmation of the B3 CFR reflects Moody's view that, in the face of the pandemic, Confluent has successfully reduced variable costs and constrained growth capital expenditures in order to preserve cash flow and maintain liquidity. Despite lower physical therapy volumes in the second quarter, volumes have mostly returned to pre-pandemic levels and will continue to improve as demand for physical therapy services will continue to normalize. Further, the rating also reflects Confluent's good business stability relative to other providers, given its education services and occupational health and safety segments. Growth in these segments have been able to partially offset softness in its physical therapy segment. The change in outlook to positive reflects the credit positive impact of the planned acquisitions. The acquisitions will further expand Confluent's national footprint, adding eleven new states. The acquisitions will also increase scale, adding nearly $80 million in revenue (about a 30% increase), and an incremental 100 clinics and 350 clinicians. Further, Moody's expects these acquisitions to be leverage neutral. That said, the transactions increase integration risk at a time when the company still faces some operating uncertainty due to the coronavirus pandemic. Moody's took the following rating actions: Issuer: Confluent Health, LLC Corporate Family Rating, affirmed at B3 Probability of Default Rating, affirmed at B3-PD Senior secured first lien revolving credit facility expiring 2024, affirmed at B3 (LGD3) Senior secured first lien term loan due 2026, affirmed at B3 (LGD3) Outlook Actions: Issuer: Confluent Health, LLC Outlook, Changed to Positive from Negative RATINGS RATIONALE Confluent's B3 Corporate Family Rating reflects its small scale relative to peers and relatively low barriers to entry in the physical therapy business. There is risk of market oversaturation given the rapid expansion of Confluent and many of its competitors. The rating also reflects the risks associated with the company's rapid expansion strategy as it grows, both organically and through acquisitions. The rating is supported by Confluent's track record of good profit margins, low working capital requirements, and low capital expenditure needs. Leverage is moderately high with adjusted debt/EBITDA of 5.0x pro forma for the transaction. Moody's expects that the demand for physical therapy will continue to grow given it is relatively low-cost and can prevent the need for more expensive treatments or opioid pain management. Moody's considers Confluent to have good liquidity. The company has historically had positive free cash flow, though limited by growth and acquisition spending. Moody's expects free cash flow to be modestly positive over the next 2 years. Liquidity is supported by the company's approximately $28 million of cash as of September 30, 2020, and $50 million of availability on the company's revolving credit facility. Moody's considers coronavirus to be a social risk given the risk to human health and safety. Aside from coronavirus, Confluent faces other social risks such as the rising concerns around the access and affordability of healthcare services. However, Moody's does not consider the physical therapy providers to face the same level of social risk as many other healthcare providers. Further, Confluent benefits from positive social considerations, as physical therapy can be a less expensive and a safer alternative to surgery or opioid usage. From a governance perspective, Moody's views Confluent's growth strategy to be aggressive given its history of debt-funded new clinic openings and clinic acquisitions. Given the company's private equity ownership, Moody's considers there to be additional risks for debt-funded transaction as evidenced by the current transaction. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if the company's liquidity weakens or if the company fails to effectively manage its rapid growth. Further, if the company pursues more aggressive financial policies, the ratings could be downgraded. An upgrade is possible if Confluent materially increases its size and scale and demonstrates stable organic growth at the same time it effectively executes on its expansion strategy. Additionally, adjusted debt/EBITDA sustained below 5.0 times could support an upgrade. Confluent Health, LLC, headquartered in Louisville, Kentucky, is a provider of physical rehabilitation services which includes outpatient physical therapy, workplace injury prevention programming, and advanced education courses and degrees for physical therapists. The company's financial sponsor is Partners Group, a Swiss-based private equity firm with a regional headquarters in Denver, CO. The company's pro forma revenues (including contributions from recent acquisitions) are approximately $300 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CONUMA RESOURCES: Moody's Lowers CFR to B3, Outlook Stable ---------------------------------------------------------- Moody's Investors Service downgraded Conuma Resources Limited's corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD and its speculative grade liquidity rating to SGL-4 from SGL-2. The senior secured notes rating has been affirmed at B2. The ratings outlook remains stable. "The downgrade of Conuma's ratings reflects weak liquidity and increased leverage because of lower metallurgical coal prices and incremental debt largely needed to develop a replacement deposit" said Jamie Koutsoukis, Moody's analyst. Downgrades: Issuer: Conuma Resources Limited Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Affirmations: Issuer: Conuma Resources Limited Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD3) Outlook Actions: Issuer: Conuma Resources Limited Outlook, Remains Stable RATINGS RATIONALE Conuma's credit profile (B3 corporate family rating) is constrained by 1) material free cash flow sensitivity to price (about $4.5 million per $1 change in met coal price in 2020) 2) the volatility of met coal pricing, which has swung between $90/t and $300/t in recent years, 3) the concentration risk of one product (met coal) at three mine sites and 4) relatively small production base (4.4 million tonnes in 2019). Conuma benefits from 1) a favorable mining jurisdiction (Canada), 2) the mine's location near rail and port infrastructure, allowing it to easily sell on the seaborne market, and a 3) a good cost position ($75 C1 mine site costs per tonne in Q2/20). Conuma has produced weaker operating results year to date 2020, caused by a decline in metallurgical coal prices: Conuma's adjusted EBITDA declined by about 70% for the twelve months ending June 2020 compared to the same time period in 2019. Moody's expects Conuma's operating results to continue to remain weak through the remainder of 2020 and into the first half of 2021 as the blast furnaces in Asia, Conuma's key consumers, continue to operate at reduced capacity, although there has been some improvements in recent months. In October Conuma closed a CAD120 million credit facility (the Large Employer Emergency Financing Facility "LEEFF Facility") with Canada Enterprise Emergency Funding Corporation, a federal government agency. The company intends to use the proceeds to manage short term working capital and to fund capital expenditures to develop the Hermann Development Area at the Wolverine mine site. The development of the Hermann deposit will enable Conuma to replace the Perry Creek deposit, also at the Wolverine mine site, which is expected to be mined out in the second quarter of 2021. Conuma has weak liquidity (SGL-4) over the next twelve months to September 2021, with about CAD130 million of available liquidity sources versus Moody's estimate of about CAD120 million of free cash flow usage and minimal debt maturities. Liquidity sources are comprised of cash of about CAD10 million and CAD120 million available under the LEEFF facility (matures 2025). Uses of liquidity are Moody's expectation of CAD120 million of free cash flow usage which includes capital to fund the development of the Hermann deposit. Conuma's US$25 million senior secured revolving credit facility (matures 2022) is fully drawn and is therefore not a source of liquidity. Conuma has received a temporary suspension of its revolver covenants through the end of 2021, following which covenants will include maximum leverage of 3x and minimum EBITDA interest coverage of 2.5x. The company's debt matures in 2023. Liquidity is considered weak because Conuma has no excess cushion to absorb either cost overruns or timing delays in starting production and cash flow from the Hermann deposit by late 2021, although as the deposit is part of the existing Wolverine mine, execution risk should be manageable. The stable outlook reflects its expectation that Conuma will likely develop the Hermann deposit as planned and there is some growth in blast furnace steel production in Asia, which will reduce leverage below 4x past 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Conuma's cash consumption is in excess of its expectations and the company faces a liquidity shortfall, likely because of operating challenges in its development of the Herman deposit, or if leverage is expected to be maintained above 4x (2.9x at Q2/20). The ratings could be upgraded if the Herman Deposit is developed successfully, the company is able to generate sustained positive free cash flow, in part due to a sustained recovery in metallurgical coal prices, and adjusted debt/EBITDA is maintained at or below 3x (2.9x at Q2/20). The principal methodology used in these ratings was Mining published in September 2018. Conuma Resources Limited is a producer and exporter of premium seaborne metallurgical coal from the Peace River Coalfield in British Columbia. The company has three surface mines (Willow Creek, Brule and Wolverine) which produce premium hard coking coal (HCC), mid-vol metallurgical coal and ultra-low-vol pulverized coal injection (PCI). Production in 2019 was 4.4 million tonnes and revenues were CAD797 million. CRC MEDIA: Unsecureds Will be Paid From Liquidation of Estate Asset ------------------------------------------------------------------- CRC Media West, LLC submitted a Plan and a Disclosure Statement. The Debtor has continued to operate its business despite lower gross revenues due to COVID-19 issues. The Secured Claim of Desert Financial Credit Union (Class 2) is impaired. Desert Financial Credit Union is secured by a first position lien on all of the Debtor's assets as set forth in its UCC-1 Financing Statement in the total amount of $1,477,963.67 for Claim 4. The secured claim of $1,477,963.67 shall be paid as provided for in the Chapter 11 Plan of CRC Broadcasting Company however, to the extent possible, the proceeds of the sale of the Debtor's assets shall be used to reduce the claim of this creditor. General Unsecured Claims (Class 7) are impaired. All allowed and approved claims under this Class shall, to the extent available, be paid on a pro rata basis, from the liquidation of estate assets after payment of Riverside County property taxes, secured creditor, Desert Financial Credit Union and unpaid Administrative Claims. The Debtor makes no representation that funds will be available to this claims from the liquidation of Estate Assets. The funds needed to comply with the Debtor's Plan of Reorganization, until such time as the business is sold, shall come from the Debtor's business revenues. A full-text copy of the Disclosure Statement dated September 2, 2020, is available at https://tinyurl.com/y4wdgc9q from PacerMonitor.com at no charge. Attorney for the Debtor: Allan D. NewDelman, Esq. ALLAN D. NEWDELMAN, P.C. 80 East Columbus Avenue Phoenix, Arizona 85012 (602) 264-4550 anewdelman@adnlaw.net About CRC Media West, LLC CRC Media West, LLC, is a broadcast media company based out of 8145 E Evans Rd, Scottsdale, Arizona. CRC Media West, LLC, filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02352) on March 6, 2020, listing under $1 million in both assets and liabilities. Allan D. NewDelman, Esq. at ALLAN D. NEWDELMAN, P.C., is the Debtor's counsel. DEVCH LP: Austin Housing Buying Austin Property for $1.35 Million ----------------------------------------------------------------- DEVCH, LP asks the U.S. Bankruptcy Court for the Western District of Texas to authorize the sale of the real property located at 4011 Convict Hill Rd., Austin, Texas to Austin Housing Finance Corp. or assigns for $1.35 million, free and clear of all liens, claims and interests, subject to higher and better offers. The bankruptcy estate owns the Real Property. Title to 4011 Convict Hill Road is held by the Debtor. The property contains 2.986 acres. The improvements consist of a structure containing 2,496 sq. ft. The improvements were originally constructed in 1997. The Debtor and the Buyer have entered into a Purchase and Sale Agreement, subject to the Court's approval, for $1.35 million. The Travis County Appraisal District has valued the property at $413,366. There is a 5% broker's commission to Devora Realty, LLC ($67,500) in the transaction. The Seller will also pay for a title policy, preparation of the deed and bill of sale, one-half of any escrow fee and costs to record any documents to cure title objections that Seller must cure. Additionally, taxes will be pro-rated. The Debtor does not anticipate owing any taxes as a result of the sale. A preliminary title search and review of the Schedules and proofs of claim filed in the case indicate the following liens, judgments, and other claims may exist against the Real Property: (i) unpaid property taxes for 2020; (ii) affidavit Claiming Engineering Services recorded at 2020076260 in the amount of $28,906; and (iii) deed of trust in favor of VSCII Convict Hill Holding, LLC recorded at 2019161654 securing a debt in the original amount of $800,000. The 2020 ad valorem taxes will be pro-rated between the Estate and the purchaser. The Real Property and personal property will be sold subject to such taxes. The Debtor will pay the claim of VSCII Convict Hill Holding, LLC at closing if a payoff can be agreed to. If a payoff cannot be agreed to, the Debtor will pay the undisputed portion at closing. All other liens, claims, interests and encumbrances (including any disputed amounts owed to VSCII Convict Hill Holdings, LLC will attach to the proceeds from the sale. The sale will be subject to higher and better offers. If the Debtor receives any higher and better offers prior to the date set for the hearing on the Motion, the Debtor will sell the Real Property to the highest bidder. The Debtor reserves the right to conduct the sale by means of sealed bids or an auction in open court, whichever will be calculated to bring the best price in its opinion. A copy of the Agreement is available at https://tinyurl.com/y2ne37e9 from PacerMonitor.com free of charge. The Purchaser: AUSTIN HOUSING FINANCE CORP. 1000 E. 11th Street, 2nd floor Austin, TX 78701. Counsel for Debtor: Stephen W. Sather, Esq. BARRON & NEWBURGER, P.C. 7320 N. MoPac Expwy., Suite 400 Austin, TX 78731 Telephone: (512) 649-3243 Facsimile: (512) 476-9253 DEVCH, LP, sought Chapter 11 protection (Bankr. W.D. Tex. Case No. 20-11123-hcm) on Oct. 13, 2020. DEXKO GLOBAL: S&P Alters Outlook to Stable, Affirms 'B-' ICR ------------------------------------------------------------ S&P Global Ratings revised the outlook on U.S.-based trailer axle, chassis, and other engineered component manufacturer DexKo Global Inc. to stable from negative and affirmed its 'B-' issuer credit rating on the company and its subsidiary, Dexter Axle Co. S&P said, "At the same time, we are affirming our 'B-' and 'CCC' ratings on the company's first- and second-lien credit facilities. The respective '3' and '6' recovery ratings are unchanged." "The stable outlook reflects our view that the company will improve its debt leverage to the 7x area over the next 12 months and maintain its good free cash flow generation." "DexKo's profitability will likely be stronger than we previously anticipated in 2020, supported by better-than-expected demand for its recreation-exposed products." "We now estimate a single-digit revenue decline compared to our prior forecast of a double-digit decline in 2020. Due to cost reductions, pricing actions and the roll off of acquisition-related expenses, we expect the company will improve its S&P Global Ratings-adjusted EBITDA margins to the mid-teen-percent area and decrease its adjusted debt to EBITDA to the 7x area over the next 12 months. While the risk of an unstainable capital structure has abated, we still view the company's leverage as relatively high compared to 'B' rated peers." Demand for the company's recreation-related products (recreational vehicles [RVs], light trailers, and marine accessories) remained resilient as outdoor recreation activity spiked during the summer of 2020. S&P expects consumer-driven demand for outdoor activities will remain healthy and help partially offset weaker sales for products tied to the more challenged industrial markets (e.g. construction and oil and gas). S&P expects cost-reduction efforts and the benefit of pricing initiatives will help DexKo to weather pandemic-related headwinds. In response to falling sales in the second quarter, DexKo leveraged its highly variable cost structure and modestly grew its gross margins. S&P said, "Additionally, we expect EBITDA margin accretion as expenses related to previously completed acquisitions roll off in the second half of 2020. For 2021, anticipated pricing initiatives should help to offset wage pressure as some labor-related costs return in line with improving business conditions. To that end, we expect the company will sustain S&P-adjusted EBITDA margins in the 16% area over the next 12-18 months." S&P believes the company will maintain adequate liquidity and sufficient covenant headroom over the next 12 months. The company generated about $70 million in free cash flow in the first half of 2020 and repaid the entire $143 million it had borrowed as a precaution under its $150 million revolver. S&P said, "We do not anticipate DexKo will test its springing net first-lien leverage ratio covenant over the next 12 months. However, if tested, we believe DexKo will be able to maintain greater than 15% EBITDA headroom through 2021." The stable outlook on DexKo reflects S&P's forecast that despite soft industrial end market conditions, DexKo's operating performance will support S&P Global Ratings-adjusted debt to EBITDA in the 7x area over the next 12 months. S&P could lower its rating on DexKo over the next 12 months if DexKo's operating performance is significantly worse than it expects, such that: -- S&P expects the company's debt leverage to remain very high beyond the next 12 months, causing S&P to view its capital structure as unsustainable; -- There is a significant reduction in the company's liquidity sources (including cash and revolver availability), raising concerns around covenants or the ability to refinance the revolver due 2022 in a timely fashion; or -- The company cannot generate positive annual free cash flow. S&P could raise its rating on DexKo if: -- Demand for RV and other outdoor recreation-related products remains solid and industrial markets show signs of improvement in 2021, causing S&P to believe adjusted leverage will remain well below 7x through a cycle; -- Free cash flow generation is not meaningfully worse than S&P expects; and -- S&P believes the company would employ a financial policy such that credit measures are not stretched beyond 7x over a sustained period. DIAMONDBACK INDUSTRIES: Drurys Sought Changes to 3rd Am Disclosures ------------------------------------------------------------------- Derrek Drury and Laura Drury filed a limited objection to the Third Amended Disclosure Statement to Joint Chapter 11 Plan of Reorganization filed by Diamondback Industries, Inc. and its affiliated debtors. The Drurys point out that language contained in the Plan and Disclosure Statement should authorize and require UMB to release all liens that it has against all collateral when UMB is paid in full. The Drurys have been in communication with the Debtor through counsel and understand that the Debtor will modify the Plan and Disclosure Statement accordingly. Counsel to the Drurys: Mark J. Petrocchi GRIFFITH, JAY & MICHEL, LLP 2200 Forest Park Blvd. Fort Worth, TX 76110 Tel: (817) 926-2500 Fax: (817) 926-2505 E-mail: mpetrocchi@lawgjm.com About Diamondback Industries Diamondback Industries is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. For more information, visit https://diamondbackindustries.com/ On April 21, 2020, Diamondback Industries and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504). The petitions were signed by Benton Cantey, president. Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. The Debtors tapped Foley & Lardner LLP as their bankruptcy counsel, Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone LLP as special counsel, and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on June 23, 2020. DIAMONDBACK INDUSTRIES: Nov. 12 Plan Confirmation Hearing Set ------------------------------------------------------------- Judge Edward L. Morris in September 2020 approved the Second AMended Disclosure Statement explaining the proposed Joint Chapter 11 Plan of Reorganization for Diamondback Industries, Inc. The Court set an Oct. 14 hearing to consider confirmation of the Plan. Thereafter the Debtors filed changes to the Disclosure Statement, having filed, among others the Third Amended Disclosure Statement. On Oct. 21, 2020, the Court entered an order directing that: * The hearing to consider the confirmation of the Plan is fixed and will be held on Nov. 12, 2020, at 9:30 a.m. (prevailing Central Time) before the Honorable Edward L. Morris, United States Bankruptcy Judge for the Northern District of Texas, at Room 204, U.S. Courthouse, 501 W. Tenth Street, Fort Worth, Texas 76102, which hearing may be adjourned or continued to a different date; * The deadline for the receipt of completed and duly-executed Ballots by the counsel to the Debtors is fixed as Nov. 6, 2020, at 4:00 p.m. (prevailing Central Time). * The deadline for filing and serving objections to confirmation of the Plan is fixed as Nov. 6, 2020, at 4:00 p.m. (prevailing Central Time) pursuant to Federal Rule of Bankruptcy Procedure 3020(b)(1) and all comments or objections not timely filed and served by such deadline will be deemed waived; and * The record date for determining the identity of holders of claims entitled to vote on the Plan is established as Oct. 16, 2020. A copy of the order is available at: https://www.pacermonitor.com/view/L3NB2OA/Diamondback_Industries_Inc__txnbke-20-41504__0575.0.pdf?mcid=tGE4TAMA Counsel to the Debtors: Marcus A. Helt Paul V. Storm C. Ashley Ellis Emily F. Shanks FOLEY & LARDNER LLP 2021 McKinney Avenue, Suite 1600 Dallas, TX 75201 Telephone: 214.999.3000 Facsimile: 214.999.4667 About Diamondback Industries Diamondback Industries -- https://diamondbackindustries.com/ -- is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. On April 21, 2020, Diamondback Industries and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504). Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. The Debtors tapped Haynes and Boone, LLP as counsel and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ DIAMONDBACK INDUSTRIES: UMB Says Plan Unconfirmable --------------------------------------------------- UMB Bank, N.A. ("UMB"), a secured creditor of bankruptcy cases of Diamondback, Discerner Holdings, and Discerner Investments, in mid-October 2020 filed an objection to the approval of the Third Amended Disclosure Statement to the Joint Chapter 11 Plan of Reorganization filed by Diamondback Industries, Inc. and its affiliated debtors. UMB points out that: * The Plan confirmation would require the Settlement Agreement to become effective. But because the effective Settlement Agreement would breach UMB's contracts between the Debtors, the Drurys, and the Trusts; and because the parties to the Settlement Agreement are meaningfully participating in the conduct that they know constitutes a breach, the Plan is fatally flawed and cannot be confirmed as a matter of law. * A disclosure statement that supports an unconfirmable plan should not be approved as it would result in "a wasteful and fruitless exercise" that would "further delay a debtor's attempts to reorganize." * The Plan cannot be confirmed because it is proposed by unlawful means: -- The Plan cannot be confirmed without effectuating unlawful contract breaches by the Debtors and non-debtors. The Plan cannot be confirmed without the Settlement Agreement parties unlawfully aiding and abetting such breaches, and unlawfully intentionally interfering with UMB's contract rights. -- Confirmation of the Plan will result in Indemnification Obligation breaches by the Debtors and non-debtor guarantors. -- Confirmation of the Plan will result in the Trusts' breach of their asset preservation obligations. -- Confirmation of the Plan will give rise to aiding and abetting breach of contract and intentional interference claims against non-debtor parties. * Any UMB Treatment Besides Option 1(b) Is Not Feasible: -- The treatment summary of the UMB claim in Class 2, Option 2, has contradicting language. -- The summary of events leading up to the bankruptcy filing ignore the Debtors' prepetition default of its obligations owed to UMB. -- There is no discussion whatsoever about the litigation on exclusivity. -- There is no disclosure of the source of the Drury 9019 Payment in order to evaluate the feasibility of this proposed resolution. -- The section on causes of action should discuss the termination of the estate's right to challenge the UMB claim pursuant to the Cash Collateral Orders. -- The description of causes of action should clearly state that any estate causes of action against UMB and challenges to the UMB claim have been waived in connection with the Cash Collateral Orders, and that no such causes of action or challenges are resurrected or otherwise reinstated as a result of Plan confirmation. Attorneys for UMB Bank, N.A.: Tricia W. Macaluso BRYAN CAVE LEIGHTON PAISNER LLP 2200 Ross Ave., Suite 3300 Dallas, Texas 75201 Telephone: (214) 721-8100 Facsimile : (214) 721-8100 E-mail: tricia.macaluso@bclplaw.com - and - Kyle S. Hirsch Two North Central Avenue, Suite 2100 Phoenix, Arizona 85004 Telephone: (602) 364-7000 Facsimile: (602) 364-7070 E-mail: kyle.hirsch@bclplaw.com About Diamondback Industries Diamondback Industries is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. For more information, visit https://diamondbackindustries.com/ On April 21, 2020, Diamondback Industries and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504). The petitions were signed by Benton Cantey, president. Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. The Debtors tapped Foley & Lardner LLP as their bankruptcy counsel, Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone LLP as special counsel, and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on June 23, 2020. DIAMONDBACK INDUSTRIES: Unsecureds Recover 100% in Settlement Plan ------------------------------------------------------------------ Diamondback Industries, Inc., et al. submitted changes to the Disclosure Statement explaining their Chapter 11 Plan of Reorganization. The latest iteration -- the Fourth Amended Disclosure Statement -- says that The Full Payment Settlement Plan will implement Chapter 11's stated goal of allowing a debtor time to rehabilitate itself, compromise and settle creditor disputes where possible, and pay creditors within a reasonable time. The Full Payment Settlement Plan will accomplish chapter 11's goal with the sale of the Business Assets to DBK Industries, the Repeat Settlement, the Drury Settlement and the fair and equitable treatment of UMB Bank. The Drury 9019 Payment, the Exit Financing, and the post-confirmation business operations of DBK Industries will provide the following to Creditors: (a) repayment of the UMB Allowed Claim ; (b) stabilize and reinvigorate (stalled) business operations in harmony with Repeat; and (c) Allowed Class 8 Claims will be paid in full on the Effective Date. The Repeat Settlement will (a) provide for the satisfaction in full of the Allowed Class 9 Claim; (b) dismiss the Patent Judgment Appeal, and (c) define the parameters of the mutually beneficial future business relationship between the Debtors and Repeat Precision. Pursuant to the terms of the Full Payment Settlement Plan: a) UMB. The UMB Allowed Claim will be paid in full pursuant to the terms and conditions of this Plan. b) Equipment Lenders. Allowed Secured Claims of each Equipment Lender will be paid (a) pursuant to an agreement between the Debtors/DBK Industries and each Equipment Lender on terms consistent with prepetition agreement(s), or (b) if no agreement is reached, at the Debtors/DBK Industries’ sole and absolute option, (i) the net proceeds from the liquidation of collateral after payment of all fees incurred and expenses reimbursed related to the liquidation of such collateral, or (ii) surrender of collateral. c) Other Secured Claims. At the Debtors' election, Other Secured Claims will receive either (a) Cash equal to the full Allowed amount of its Other Secured Claim on the later of (x) the Effective Date and (y) the date payment on account of such Claim is due, (b) Reinstatement of such Holder's Allowed Other Secured Claim, (c) the return or abandonment of the collateral securing such Allowed Other Secured Claim to such Holder, or (d) such other treatment as may be agreed to by such Holder and the Debtors. d) Allowed Administrative Expenses. Allowed Administrative Claims will be paid at or before the Effective Date, or on such terms as the Debtors and the Holder of an Allowed Administrative Claim may otherwise agree. e) Allowed General Unsecured Claims Other than the Judgment Creditors' Asserted General Unsecured Claim. Allowed General Unsecured Claims do not include the unsecured claims asserted by the Judgment Creditors. All Allowed Class 8 Claims will be paid from the Class 8 Payment Fund on the Effective Date, with an estimated 100% distribution percentage. f) Judgment Creditors' Allowed Unsecured Claim. The Judgment Creditors' Allowed Unsecured Claim will be paid pursuant to the terms and conditions of the Repeat Settlement. g) Interest Holder. All prepetition interests will be canceled on the Effective Date. A full-text copy of the Second Amended Disclosure Statement dated September 2, 2020, is available at https://tinyurl.com/y2nuv25j PacerMonitor.com at no charge. A redlined copy of the Third Amended Disclosure Statement dated October 12, 2020, is available at https://tinyurl.com/yyf7ndve from PacerMonitor.com at no charge. A full-text copy of the Fourth Amended Disclosure Statement dated October 21, 2020, is available at https://www.pacermonitor.com/view/FFQZFYI/Diamondback_Industries_Inc__txnbke-20-41504__0572.0.pdf?mcid=tGE4TAMA About Diamondback Industries Diamondback Industries is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. For more information, visit https://diamondbackindustries.com/ On April 21, 2020, Diamondback Industries and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504). The petitions were signed by Benton Cantey, president. Judge Edward L. Morris presides over the cases. Diamondback was estimated to have $10 million in assets and $10 million to $50 million in liabilities. The Debtors tapped Foley & Lardner LLP as their bankruptcy counsel, Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone LLP as special counsel, and CR3 Partners, LLC as financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ The Debtors filed their initial joint Chapter 11 plan of reorganization and disclosure statement on June 23, 2020. DM WORLD: Amended Plan of Reorganization Confirmed by Judge ----------------------------------------------------------- Judge Lori V. Vaughan has entered findings of fact, conclusions of law and order confirming the Plan of Reorganization, as Modified, of debtor DM World Transportation LLC. The Reorganized Debtor will remain obligated to make payments to holders of allowed claims as required pursuant to the Plan, and the Debtor's members, managers or executive officers will not be relieved or released from any personal liability except as otherwise provided in the Plan. The Court determined that the requirements of 11 U.S.C. Section 1125 and 11 U.S.C. Section 1129 have been satisfied upon consideration of the Plan, the Modifications, the Disclosure Statement, the Ballot Tabulation, the Confirmation Affidavit, and the testimony of Mr. Beck Tokahtev, and noting that Committee withdrew the Objection. A full-text copy of the order dated September 17, 2020, is available at https://tinyurl.com/y266mrer from PacerMonitor.com at no charge. About DM World Transportation DM World Transportation, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02684) on May 12, 2020. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Lori V. Vaughan oversees the case. The Debtor has tapped the Law Firm of Shuker & Dorris, P.A. as its legal counsel and David M. Cole, CPA, LLC as its tax accountant. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors on June 2, 2020. The committee is represented by Greenberg Traurig, P.A. DM WORLD: Creditors' Committee Objects to 0% Plan ------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the chapter 11 case of DM World Transportation, LLC, objects to (i) Disclosure Statement Pursuant to 11 U.S.C. Sec. 1125 for DM World Transportation, LLC; and (ii) confirmation of the Amended Plan of Reorganization for DM World Transportation. The Committee points asserts that * The Plan cannot be confirmed because it is not fair and equitable. * The Plan unfairly discriminates against unsecured creditors. * The release under the Plan deprives unsecured creditors of value. * The Plan cannot be confirmed because there is a lack of good faith. * The proposed liquidating trust is not feasible and not designed to serve its constituency. * The Debtor has intentionally depressed its financials. * The Debtor has failed to maximize the value of the estate. * The Plan cannot be confirmed because it impermissibly releases a non-debtor from liability. * The Debtor has manipulated the unsecured creditor class for voting purposes. "Despite the Committee's cautious optimism that the Debtor would propose a plan of reorganization that was fair and equitable to all constituents, the Plan filed by the Debtor does not come close. Instead, having locked up the Debtor's secured creditors and their unsecured deficiency claims, the Debtor proposes a Plan that provides for no recovery whatsoever to general unsecured creditors. Worse, the Debtor sets up a Plan structure -- with a liquidating trust feature -- that gives false hope to less sophisticated unsecured creditors who may not recognize that the Debtor is (i) not providing any seed money for the liquidating trust, (ii) not transferring any avoidance actions to the liquidating trust for the benefit of unsecured creditors, (iii) retaining the ability to object to claims, and (iv) proposing a full release for the Debtor's primary principal, Mr. Dilshod Mikmahnov (the "Principal"), who is believed to have received millions of dollars in distributions in the years prior to the bankruptcy filing and was at the helm when the Debtor suffered a catastrophic decline in revenue," the Committee's counsel, Ari Newman of GREENBERG TRAURIG, P.A., said in court filings. Counsel for the Official Committee of Unsecured Creditors: John B. Hutton Ari Newman Reginald Sainvil GREENBERG TRAURIG, P.A. 333 S.E. 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 579-0500 Facsimile: (305) 579-0717 Email: huttonj@gtlaw.com Email: newmanar@gtlaw.com Email: sainvilr@gtlaw.com About DM World Transportation DM World Transportation, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02684) on May 12, 2020. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Lori V. Vaughan oversees the case. The Debtor has tapped the Law Firm of Shuker & Dorris, P.A. as its legal counsel and David M. Cole, CPA, LLC as its tax accountant. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors on June 2, 2020. The committee is represented by Greenberg Traurig, P.A. DOMICIL LLC: Plan Confirmation Hearing Deferred to Nov. 18 ---------------------------------------------------------- Judge Scott M. Grossman on Oct. 19, 2020, entered an amended order conditionally approving Domicil, LLC's Disclosure Statement and setting a hearing on the Plan. In the original order, Judge Grossman set a hearing on the Debtor's Plan for Oct. 21, 2020. In the new order, the Court set these dates and deadlines: * Hearing on final approval of the Disclosure Statement, confirmation of the Plan and consideration of the fee applications: Nov. 18, 2020 at 2:30 p.m. * Deadline for filing objections to claims: Nov. 4, 2020 * Deadline for filing fee applications: Nov. 4, 2020 * Deadline for filing ballots accepting or rejecting the Plan: Nov. 9, 2020 * Deadline for filing objections to confirmation to the Plan and final approval of the Disclosure Statement: Nov. 12, 2020 Counsel for the Debtor: Robert F. Reynolds SLATKIN & REYNOLDS, P.A. One East Broward Boulevard, Suite 609 Fort Lauderdale, Florida 33301 Telephone: 954.745.5880 Facsimile: 954.745.5890 E-mail: rreynolds@slatkinreynolds.com About Domicil LLC Based in Fort Lauderdale, Fla., Domicil, LLC filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-17449) on June 4, 2019. Judge Scott M. Grossman oversees the case. Robert F. Reynolds, Esq. at Slatkin & Reynolds, P.C., represents the Debtor. DOMICIL LLC: Says In Talks With Parties to Resolve Plan Issues -------------------------------------------------------------- Judge Scott M. Grossman in September 2020 entered an order conditionally approving the Disclosure Statement of Domicil, LLC, and setting a hearing on the Debtor's Plan for Oct. 21, 2020. The Debtor moved for a continuance of the Plan hearing, noting that the Court currently has hearings scheduled on Oct. 21, 2020 on (1) United States Trustee's Motion to Dismiss or Convert Case; (2) Domicil, LLC's Chapter 11 Plan of Reorganization and Disclosure Statement for Debtor's Plan of Reorganization; (3) Domicil, LLC's Objection to Claim No. 5 Filed by Oakland Manors Apartments, LLC; and (4) Final Fee Application of Furr Cohen, P.A., Domicil requested the Court continue the hearings as Domicil has been negotiating with Oakland Manors Apartments, LLC ("Oakland Manors") and Domicil is hopeful the parties will be able to work out the issues between them, which would resolve one of the remaining issues with the Plan. Furthermore, issues have arisen with respect to Domicil's proposed treatment of the claims of Ralph and Amanda Ellison as well as the proposed resolution of the alleged lien rights of the Village of Sea Ranch Lakes. Attorneys for Domicil, LLC: Robert F. Reynolds, Esq. SLATKIN & REYNOLDS, P.A. One East Broward Blvd., Suite 609 Fort Lauderdale, FL 33301 Telephone: 954.745.5880 Facsimile: 954.745.5890 E-mail: rreynolds@slatkinreynolds.com About Domicil LLC Based in Fort Lauderdale, Fla., Domicil, LLC filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-17449) on June 4, 2019. Judge Scott M. Grossman oversees the case. Robert F. Reynolds, Esq. at Slatkin & Reynolds, P.C. represents the Debtor as counsel. E MECHANIC: Court Approves Disclosures and Confirms Plan -------------------------------------------------------- Judge Michael G. Williamson has ordered that the Disclosure Statement of E Mechanic Plus Inc. is finally approved as containing adequate information within the meaning of that section of the Bankruptcy Code. The judge also ordered that the Plan is confirmed pursuant to 11 U.S.C. Sec. 1129. The Debtor filed an Amended Ballot Tabulation, which reflected the acceptance of Classes 1 and 4. Class 2 orally voted to accept the Plan at the Confirmation Hearing. Therefore the Debtor has at least one impaired class voting in favor of the Plan. The Court finds that the Plan does not discriminate unfairly and is fair and equitable as to non-accepting impaired classes, specifically, the Class 3 claimants will either (1) retain their liens and receive deferred cash payments totaling at least the allowed amounts of their claims, or (2) receive the indubitable equivalent of their claims. Therefore, 11 U.S.C. § 1129(b)(2)(A) is satisfied. A copy of the Plan Confirmation Order is available at: https://cdn.pacermonitor.com/pdfserver/GIDTQEA/130923043/E_Mechanic_Plus_Inc__flmbke-19-10891__0073.0.pdf About E Mechanic Plus Based in Tampa, Fla., E Mechanic Plus Inc. is engaged in the ownership and operation of a mechanic repair shop. In addition, it leases out a portion of its real estate to two separate tenants. The company operates from its location at 8616 N. Nebraska Avenue, Tampa, Florida 33604. E Mechanic Plus Inc. filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 19-10891) on Nov. 15, 2019. At the time of the filing, the Debtor disclosed assets of between $100,001 and $500,000 and liabilities of the same range. Judge Michael G. Williamson oversees the case. Buddy D. Ford, P.A., is the Debtor's legal counsel. EAGLE PIPE: Boomerang's Time to Object to Pending Motions Extended ------------------------------------------------------------------ Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas approved Debtor and Boomerang Tube, LLC's Stipulation and Agreed Order extending the time for Boomerang to object to the Debtor's pending Bidding Procedures Motion and the Cash Collateral Motion to 11:59 p.m. (CT) on Oct. 28, 2020. The Debtor and Boomerang are in negotiations regarding potential mediation of their respective claims and defenses. The parties have not yet reached final agreement regarding certain conditions required as a prerequisite to mediation, including whether Boomerang will file an objection to the Sale and Bidding Procedures Motion and/or the Cash Collateral Motion. Both parties believe that a short extension of the Objection Deadline for the Sale and Bidding Procedures Motion and Cash Collateral Motion, as it applies to Boomerang, will increase the likelihood that they will successfully reach an agreement to mediate their respective claims and defenses. Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h), 6006(d), 7062, or 9014, or any other Bankruptcy Rule, any Local Rule, or Rule 62(a) of the Federal Rules of Civil Procedure, the Stipulation and Agreed Order will be immediately effective and enforceable upon its execution and there will be no stay of execution or effectiveness of the Stipulation and Agreed Order. The Debtor is authorized to take such actions as may be necessary or appropriate to implement the terms of the Stipulation and Agreed Order. About Eagle Pipe LLC Eagle Pipe, LLC is a full-service distribution company supplying tubular products and a wide variety of equipment and services to the upstream, midstream, municipal and industrial industries. It distributes a full-range of OCTG, line pipe, poly pipe (HDPE), concrete pipe, PVC pipe, valves and fittings, and offers associated products and services. For more information, visit https://www.eaglepipe.net/ Eagle Pipe sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-34879) on Oct. 5, 2020. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Marvin Isgur oversees the case. Gray Reed & McGraw, LLP and Glassratner Advisory & Capital Group, LLC serve as the Debtor's legal counsel and financial advisor, respectively. EAGLE PIPE: Nov. 20 Auction of Substantially All Assets ------------------------------------------------------- Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas authorized the bidding procedures proposed by Eagle Pipe, LLC in connection with the auction sale of substantially all of assets. The Bid Procedures Motion is granted, except that it is modified by the Order to provide clarity around the Debtor's ability to market and sell its disputed interest in certain pipe that is claimed to be owned or previously sold by Boomerang Tube, LLC and/or Centric Pipe, LLC, and in which the Administrative Agent claims a security interest ("Disputed Assets"). Within three business days after entry of the Order, the Debtor will serve the Bid Package upon the Bid Package Parties. The Sale Notice will include and prominently display the Disputed Asset Notice. On Nov. 4, 2020, the Debtor will file with the Court the Potential Assumed Contracts. Concurrently therewith, the Debtor will serve the Cure Notice upon each counterparty to the Potential Assumed Contracts. Prior to the commencement of the Sale Hearing and no later than Nov. 24, 2020, the Debtor will file with the Court the Assumed Contract Schedule of the Assumed Contracts. The Cure Amount Objection Deadline is 4:00 p.m. (CT) on Nov. 18, 2020. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 16, 2020 at 4:00 p.m. (CT) b. Initial Bid: At the Auction, to the extent a Stalking Horse Bidder has been named, the initial overbid must exceed such Stalking Horse Bid by the amount of the Break-Up Fee plus an additional $100,000. c. Deposit: 10% of the aggregate value of the cash and non-cash consideration of the bid d. Auction: If the Debtor receives more than one Qualified Bid, an auction will be conducted, upon notice to all Qualified Bidders who have submitted Qualified Bids, at 10:00 a.m. (CT) on Nov. 20, 2020, virtually and/or at the offices of Gray Reed, 1300 Post Oak Boulevard, Suite 2000, Houston, Texas 77056, in accordance with the terms of the Bidding Procedures. e. Bid Increments: $100,000 f. Sale Hearing: Nov. 30, 2020 at 9:00 a.m. (CT) g. Sale Objection Deadline: Nov. 18, 2020 at 4:00 p.m. (CT) h. Closing: Dec. 11, 2020 i. Any Proposed Sale(s) entered into with the Debtor will be on an "as is, where is" basis and without representations or warranties of any kind, nature, or description, free and clear of all Claims and Interests, with such Claims and Interests attaching to the net proceeds of the sale. j. Break-Up Fee: $200,000 The Court orders mediation among the Debtor, the Secured Parties, the Committee, Boomerang and Centric regarding the nature and ownership of the Disputed Assets as well as any claims or causes of action arising out of such disputes. The Mediation Parties will appear in good faith efforts to mediate on Nov. 13, 2020, subject to availability of the Mediation Parties and the mediator. Prior to the mediation, the Debtor, the Secured Parties and Boomerang will endeavor in good faith to enter into a settlement concerning the ownership of the Disputed Assets within five business days after entry of this order, which settlement will be subject to a Bankruptcy Rule 9019 Motion. If such a settlement is reached within that period of time (with a Rule 9019 motion to be filed and approval sought thereafter), the Debtor, the Secured Parties and Boomerang contemplate that, subject to the Boomerang Asset Determination in the Rule 9019 settlement order, the Boomerang Disputed Assets will be removed from the Bidding Procedures process and not offered for sale under the Bidding Procedures. If such settlement is reached among the Debtor, Boomerang and the Secured Parties, Boomerang will be excused from mediation. All time periods set forth in the Order or the Bid Procedures will be calculated in accordance with Bankruptcy Rule 9006(a). A copy of the Bidding Procedures is available at https://tinyurl.com/y562uaro from PacerMonitor.com free of charge. About Eagle Pipe LLC Eagle Pipe, LLC is a full-service distribution company supplying tubular products and a wide variety of equipment and services to the upstream, midstream, municipal and industrial industries. It distributes a full-range of OCTG, line pipe, poly pipe (HDPE), concrete pipe, PVC pipe, valves and fittings, and offers associated products and services. For more information, visit https://www.eaglepipe.net/ Eagle Pipe sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 20-34879) on Oct. 5, 2020. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Marvin Isgur oversees the case. Gray Reed & McGraw, LLP and Glassratner Advisory & Capital Group, LLC serve as the Debtor's legal counsel and financial advisor, respectively. EASTERN NIAGARA: Maintains Satisfactory Patient Care, PCO Says -------------------------------------------------------------- Michele McKay, the court-appointed patient care ombudsman for Eastern Niagara Hospital, Inc., filed a first report regarding the quality of patient care during the period August 3 to October 2, 2020. The PCO disclosed that for the period covering the report, Eastern Niagara continues to focus on the needs of the patients and staff and make operational changes that provide patients with satisfactory care. The PCO determined that patient census remains at or near capacity on all inpatient units and outpatient units, except for surgical cases at the hospital. The PCO also had a chance to interview patients and their family members, who praised the nursing staff for the care they received and did not express any complaints or concerns -- revealing that Eastern Niagara continues to provide exceptional nursing care to their patients. The PCO also noted COVID-19 safety measures were in place on all inpatient and outpatient units. The PCO was informed that during the interruption of the bankruptcy case for the PPP filing, there was a suicide attempt by a chemical dependency unit patient. An investigation was conducted by state health department authorities and measures have been taken to ensure that the avenue for this attempt has been remedied. Also, the PCO learned that Eastern Niagara passed a survey conducted by NY State Infection Control. A copy of the PCO's First Report dated October 16, 2020 is available at PacerMonitor.com at https://bit.ly/3meASUU at no extra charge. 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. EKSO BIONICS: Posts $2.5 Million Net Income in Third Quarter ------------------------------------------------------------ Ekso Bionics Holdings, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $2.45 million on $2.89 million of revenue for the three months ended Sept. 30, 2020, compared to net income of $206,000 on $3.32 million of revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $11.85 million on $6.63 million of revenue compared to a net loss of $9.41 million on $10.19 million of revenue for the same period during the prior year. As of Sept. 30, 2020, the Company had $23.48 million in total assets, $15.08 million in total liabilities, and $8.40 million in total stockholders' equity. Cash on hand at Sept. 30, 2020 was $14.5 million, compared to $10.9 million at Dec. 31, 2019. The Company raised net proceeds of $10.4 million from the issuance of common stock and the exercise of the warrants. "The strength of our commercial strategy enabled us to achieve solid sequential revenue growth in the third quarter despite COVID-related challenges," said Jack Peurach, president and chief executive officer of Ekso Bionics. "By leveraging virtual engagement strategies and offering flexible acquisition options, we continue to gain traction with customers for our innovative EksoNR exoskeleton. The recent launch of EVO, our next generation upper body exoskeleton for industrial use, has already received an encouraging response in the form of several new customer orders and pilots. Going forward, we remain focused on continued commercial sales execution through active customer engagement while optimizing our cost structure to deliver value to Ekso Bionics shareholders." Gross profit for the quarter ended Sept. 30, 2020 was $1.8 million, unchanged from the same period in 2019, representing a gross margin of approximately 63% in the third quarter of 2020, compared to a gross margin for the same period in 2019 of 53%. The increase in gross margins was primarily due to higher average selling prices for EksoNR, an increased proportion of medical device sales in overall revenue composition, lower unit production costs, the introduction of EVO and higher service margins. Sales and marketing expenses for the quarter ended Sept. 30, 2020 were $1.7 million, a decrease of $1.1 million, or approximately 38%, compared to the same period in 2019. The decrease was primarily due to lower employee expenses and lower general marketing and trade show expenses. Research and development expenses for the quarter ended Sept. 30, 2020 were $0.6 million, compared to $1.1 million for the same period in 2019, a decrease of $0.6 million, or approximately 48%. The decrease was primarily due to lower employee expenses and lower patent and licensing costs. General and administrative expenses for the quarter ended Sept. 30, 2020 were $1.7 million, compared to $1.6 million for the same period in 2019, an increase of $0.1 million, or approximately 8%. The increase was primarily due to higher legal expenses associated with the termination of the Company's China joint venture. Gain on warrant liabilities for the quarter ended Sept. 30, 2020 was $4.5 million due to the revaluation of warrants issued in 2015, 2019 and 2020, compared to a $4.4 million gain associated with the revaluation of warrants issued in 2015 and May 2019 for the same period in 2019. Net income applicable to common stockholders for the quarter ended Sept. 30, 2020 was $2.5 million, or $0.30 per basic share and a loss of $0.01 per diluted share, compared to net income of $0.2 million, or $0.04 per basic and diluted share, for the same period in 2019. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1549084/000154908420000041/ekso-20200930.htm About Ekso Bionics Ekso Bionics -- http://www.eksobionics.com/-- is a developer of exoskeleton solutions that amplify human potential by supporting or enhancing strength, endurance and mobility across medical and industrial applications. Founded in 2005, the Company continues to build upon its expertise to design some of the most cutting-edge, innovative wearable robots available on the market. The Company is headquartered in the Bay Area and is listed on the Nasdaq CapitalMarket under the symbol EKSO. Ekso Bionics reported a net loss of $12.13 million for the year ended Dec. 31, 2019, compared to a net loss of $26.99 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $22.35 million in total assets, $22.38 million in total liabilities, and a total stockholders' deficit of $28,000. OUM & CO. LLP, in San Francisco, California, the Company's auditor since 2010, issued a "going concern" qualification in its report dated Feb. 27, 2020, citing that Company has incurred significant recurring losses and negative cash flows from operations since inception and an accumulated deficit. This raises substantial doubt about the Company's ability to continue as a going concern. ENOVA INTERNATIONAL: Moody's Confirms B2 CFR, Outlook Negative -------------------------------------------------------------- Moody's Investors Service confirmed Enova International, Inc.'s B2 long-term senior unsecured and corporate family ratings; the outlook is negative. The announcement concludes the review for downgrade commenced on July 29, 2020, following the company's announcement to acquire fintech business lender On Deck Capital, Inc. List of affected ratings: Confirmations: Issuer: Enova International, Inc. Corporate Family Rating, Confirmed at B2 Senior Unsecured Regular Bond/Debenture, Confirmed at B2 Outlook Actions: Issuer: Enova International, Inc. Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE The ratings confirmation reflects Moody's unchanged view of Enova's standalone credit assessment following the 13 October 2020 announcement that the firm completed the acquisition of OnDeck Capital (OnDeck), an online small business lender, which it announced on 28 July. Moody's considers the acquisition as transformative for Enova, given that small business loans represented just 12% of Enova's loan portfolio at 30 September 2020. Pro-forma for the OnDeck acquisition, small business loans will account for over half of the receivables of the combined entity; gross receivables pro-forma for the combination were $2.4 billion at 30 June 2020, compared to $1.2 billion for Enova as a standalone entity, as of the same reporting date. While the integration presents near term operational risks, including integration risk, Moody's believes these will be mitigated by Enova's greater business diversification and lower reliance on deep subprime consumer lending, an industry with a very high degree of regulatory risk. Enova's management team has experience executing prior acquisitions, albeit not at the scale of the OnDeck acquisition since Enova became a public company in 2014. Moody's does not expect the transaction to lead to an immediate meaningful change in Enova's leverage profile; the ratio of tangible common equity to tangible managed assets stood at approximately 19.7% at 30 June 2020, and has improved significantly in the past three years, although is unlikely to remain at such high levels given the current low-origination environment as a result of the ongoing coronavirus pandemic. The negative outlook reflects the risks to creditors from remaining operational risks associated with integrating the OnDeck business, particularly during a period of substantial economic volatility stemming from the coronavirus pandemic. Somewhat mitigating these risks is Enova's strong liquidity, which included $490 million in unrestricted cash and $124 million in revolver capacity at the legacy Enova business at 30 September 2020, which should allow the firm to fund its operations until well into 2021 without needing to access the capital markets. Moody's regards the coronavirus outbreak as a social risk under its environmental, social and governance (ESG) framework, given the substantial implications for public health and safety. The rating action reflect the negative effects on Enova of the breadth and severity of the shock, and the risk of deterioration in credit quality, profitability, capital and liquidity it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, an upgrade of the ratings is unlikely over the next 12-18 months. However, the outlook could be revised to stable if Enova is able to achieve its synergy targets associated with the OnDeck acquisition, and if net income to average managed assets (NI/AMA) is expected to be 5% or above, with tangible common equity to tangible managed assets above 15%. The ratings could be downgraded if Moody's expects Enova's NI/AMA to remain below 4% for a protracted period, or if leverage and liquidity meaningfully deteriorate, or if the firm experiences a material operational failure. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. EPR PROPERTIES: Fitch Lowers IDR to BB+, Outlook Negative --------------------------------------------------------- Fitch Rating has downgraded the ratings of EPR Properties, including the Issuer Default Rating (IDR), to 'BB+' from 'BBB-'. The Rating Outlook is Negative. The ratings reflect revised Fitch assumptions under which EPR's theater tenancy requires more substantial rent relief than Fitch originally contemplated in April 2020 to weather the effects of the coronavirus pandemic. EPR's experiential real estate portfolio has been disproportionately impacted by health safety measures put in place to maintain social distancing and limit large gatherings, with theaters (approximately 45% of 4Q19 annualized revenue) among the tenant industries most severely impacted due to the coronavirus' amplification of in-place secular trends that are highlighted by the disintermediation of theater screens as a distribution source for film content. While Fitch believes theaters still retain value in the distribution of big budget films once the pandemic subsides, the weak credit profiles of several top operators in the industry increases the likelihood that landlords, such as EPR, will need to negotiate reduced lease rates for their assets either before or during a bankruptcy/restructuring event. EPR has already negotiated a material lease modification with AMC to reduce annualized rents by $26 million, or 21%, and Fitch believes the likelihood of further lease rate reductions for Regal, Southern, and other local/regional theater operators has increased substantially. The credit profiles of the three major U.S. theater operators have continued to deteriorate as attendance has remained subdued following reopening at limited capacity in most cities/states across the country. The slower pace of recovery is at least partially explained by the delay of big budget movie releases by studios that have the ability to hold content until they believe it will generate acceptable box office revenue, with theater operators having limited-to-no control over supply. While Fitch believes these delays do illustrate the current importance of theaters in the distribution chain, the dependence of theater operators on partners increasingly motivated to bypass theater screens, through growing direct-to-consumer (DTC) offerings, presents a long-term risk that Fitch believes limits the ability of a theater-focused real estate portfolio to support investment-grade credit ratings. As the pandemic continues, new premium video on demand (PVOD) or accelerated VOD offerings are being tested and increasing the risk of a more permanent shift in the film studios' theatrical windowing strategy. Exacerbating this risk, the traditional media peer set is even more reliant on making their DTC offerings the focal point of their operating strategy as the weakened economy, the acceleration in cord-cutting and the inability of out of home entertainment to fully operate highlights the importance of over-the-top programming. Fitch has assumed total reductions in EPR's annualized theater rental revenues of $79.2 million, inclusive of the completed AMC lease modification. This, combined with stress in other experiential tenant categories such as "eat & play" and fitness and substantial deferred rents that Fitch believes will remain uncollected, results in the company's leverage increasing to and sustaining in the mid-6x range through the forecast period, even when assuming no further common share distributions in fiscal 2020 and a reset of distributions to approximately 70% of AFFO in fiscal 2021 (40% cut from fiscal 2019 levels). Fitch considers EPR's liquidity position to be comfortable, with more than $1 billion in cash and equivalents on balance sheet at June 30, 2020, an additional $250 million available in remaining revolver capacity, and no debt maturities or amortization before the revolver in 2022. However, Fitch believes the company's options to delever and balance expected cash flow deterioration are limited largely to dilutive equity issuance. The company has repurchased just over $100 million in equity YTD through June 30, 2020. The Negative Outlook reflects Fitch's concerns on theater operators' ability to navigate the long-term risks related to changing consumer behavior. Fitch believes that even after entities like AMC and Regal undergo restructuring of their balance sheets significant challenges remain in retaining competitive positioning in a marketplace increasingly geared towards in-home and on-demand entertainment. Further evidence of the disintermediation of the theater exhibition model through alternative distribution channels, particularly for big budget film product, would increase downward pressure on EPR's ratings. KEY RATING DRIVERS Significant Tenant/Industry Concentrations: EPR generated 45.4% of its 4Q19 revenue from theater operators, including AMC Theaters (17.7%), Regal Entertainment (12.4%), Cinemark (5.7%) and VSS Southern (2.3%). AMC and Regal entered the pandemic with high leverage and weak financial profiles that have continued to deteriorate and are expected to result in bankruptcy filings or major restructuring events by the end of fiscal 2020 or early in fiscal 2021. Fitch expects these events to result in rejection of existing leases and/or substantial lease rate reductions, significantly impacting the cash flow profiles of landlords such as EPR. Fitch downgraded Cineworld/Regal to 'CCC-' on Oct. 5 due to the rapidly depleting liquidity due to lower-than-expected cinema attendance that resulted in the company suspending all U.S. and UK operations. Fitch's base case forecast indicates that the company's current liquidity may only be sufficient until November or December 2020. Fitch downgraded Cinemark to 'B+' on April 9 due to heightened uncertainty, but highlighted the company's strong available liquidity that should support run-rate operating losses through the end of fiscal 2021. EPR's top 10 tenants accounted for 69.3% of 1H20 revenue, well above the Fitch net lease REIT peer average in the mid-20% range. Topgolf, a private company featuring golf driving ranges paired with food and beverage offerings, represented 18.9% of 2Q20 revenue and is now EPR's largest tenant following the AMC Theaters lease modification and shift to cash accounting. Fitch generally views individual tenant revenue exposure exceeding 10% as high. Portfolio Strategy: EPR's portfolio strategy consists primarily of experiential property types and has been supported by consumer trends that have placed greater value on experiences. Alternative uses of EPR's assets are generally more limited than traditional property types and can require significant capital investment to suit new tenants. In addition, the mortgage financeability and depth of the asset transaction market of these asset classes are less robust than that of other real estate sectors. DERIVATION SUMMARY EPR's historical credit metrics, long-term leases and low near-term debt maturities compare well to peers. EPR's high tenant and industry concentrations, along with its focus on property types that have fewer mortgage financing options and weaker contingent liquidity, are credit concerns relative to peers. EPR's closest peers in the net-lease space with higher individual sector concentrations include Getty Realty Corp. (BBB-/Stable; gas stations) and Four Corners Property Trust (BBB-/Stable; restaurants). KEY ASSUMPTIONS -- Fitch assumes theater leases with EPR's top four operators (AMC, Regal, Cinemark and Southern) and local theater operators are modified, in bankruptcy or otherwise, to reduce rents by $79.2 million in total revenue (12% of fiscal 2019 total revenue and 28% of fiscal 2019 theater revenue). -- Fitch has included $26 million of this reduction in fiscal 2020 to reflect the already completed AMC lease modification, and has assumed the remainder of this reduction occurs in fiscal 2021 as theater operators' liquidity expires and bankruptcy events become more likely in early 2021; -- Fitch assumes additional occupancy loss of 250bps related to the other half of EPR's tenancy that consists of tenants in the entertainment industry, promote family/large gatherings, or generally pose a health risk (i.e. fitness, early childhood education, "eat & play" category) and are likely to experience continued stress until a viable vaccine or other treatment is developed; -- Fiscal 2020 rent deferrals represent approximately 48% of fiscal 2019 revenues. -- Rent deferrals are based on reported and forecast rental collection rates of 21% in 2Q20, 40% in 3Q20 and 45% in 4Q20: 2Q20: 79% of rent uncollected (25% assumed collected in fiscal 2021, 75% written off as uncollectible) 3Q20: 60% of rent uncollected (25% collected fiscal 2021, 75% uncollectible) 4Q20: 55% of rent uncollected (25% collected fiscal 2021, 75% uncollectible) -- Recurring capex of $10 million per annum in fiscal 2020 and fiscal 2021, higher than historical levels to account for additional tenant turnover expenses; -- Development capex of $75 million in fiscal 2020 to complete active build-to-suit and committed mortgage note receivable projects; Yield of 6% on cost; -- No material acquisition or disposition activity in the forecast period; -- No equity issuance in the forecast period; no further share repurchases activity ($105 million YTD); -- Dividend cut by 40% from fiscal 2019 level to balance permanent reduction in theater lease rates. No growth in dividend in following years. Approximately $2.70/share/year. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch's expectation of net debt to recurring operating EBITDA sustaining below 5.0x; -- Material reduction in tenant concentrations - reduction of top 10 tenant exposure to less than 50% of annual revenues and no one tenant representing more than 20% of rental revenues; -- Fitch's expectation of fixed-charge coverage sustaining above 2.5x; -- Increased mortgage lending activity in the experiential property sectors, demonstrating contingent liquidity for the asset classes. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continued secular pressure in the theater industry, measured by sustained declines in box office revenues and attendance even after the coronavirus-related health risk has subsided; -- Fitch's expectation of net debt to recurring operating EBITDA sustaining above 6.5x; -- Fitch's expectation of fixed-charge coverage sustaining below 2.0x. LIQUIDITY AND DEBT STRUCTURE Fitch estimates EPR's base case liquidity coverage at 12.8x through fiscal 2021, which is robust for the rating. EPR's liquidity is supported by more than $1.0 billion in cash and $250 million in remaining revolver availability. The company has no debt maturities until 2022. The company took defensive action in drawing down revolver capacity in the event the current environmental stress persists for an extended period. The company's available cash is not currently earmarked for specific uses, but the board approved a $150 million share repurchase program on March 24. The company has utilized approximately $105 million of that program capacity through 2Q20. Fitch defines liquidity coverage as sources of liquidity (readily available unrestricted cash, availability under the unsecured revolving credit facility and projected retained cash flows from operating activities after dividends and distributions) divided by uses of liquidity (debt maturities, projected recurring capex and committed (re) development expenditures). 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. EQM MIDSTREAM: Moody's Affirms Ba3 CFR, Outlook Negative -------------------------------------------------------- Moody's Investors Service affirmed EQM Midstream Partners, LP's (EQM) Ba3 Corporate Family Rating (CFR), its Ba3-PD Probability of Default Rating (PDR) and Ba3 unsecured notes rating. The Speculative Grade Liquidity (SGL) rating SGL-3 is unchanged. The rating outlook remains negative. This action follows Moody's ratings affirmation of EQM's largest customer EQT Corporation's (EQT) Ba3 ratings and its outlook change to positive on October 28, 2020. "EQT's credit quality shows improvement, which lessens the pressure on EQM," commented Sreedhar Kona, Moody's senior analyst. "However, EQM's Mountain Valley Pipeline (MVP) project's completion and EQM's ability to reduce its debt leverage continues to remain uncertain." Affirmations: Issuer: EQM Midstream Partners, LP Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Senior Unsecured Notes, Affirmed Ba3 (LGD4) Unchanged: Issuer: EQM Midstream Partners, LP Speculative Grade Liquidity Rating, Unchanged SGL-3 Outlook Actions: Issuer: EQM Midstream Partners, LP Outlook, Remains Negative RATINGS RATIONALE The affirmation of EQM's Ba3 CFR follows Moody's affirmation of EQT's Ba3 ratings and the change in its rating outlook to positive. With about 70% of EQM's 2019 revenues derived from EQT, EQM's credit profile is closely tied to that of EQT and the improvement in EQT's credit profile is credit positive for EQM. However, EQM is constrained by the ongoing delays and significant cost overruns at its MVP project. The most recent setback is the temporary stay issued by the Fourth Circuit Court of Appeals, pending review on the use of Nationwide 12 (NWP 12) permit. The Army Corp of Engineers' NWP 12 permit that permits MVP to cross streams and water bodies has been effectively stayed, albeit temporarily at this time, potentially both delaying the pipeline completion and marginally increasing the budget. MVP's cash flow starting in the second quarter of 2021 would have moderated EQM's debt leverage, but that timing is now more uncertain. EQM is supported by its close proximity to high production volumes in the Marcellus Shale and the critical nature of its pipelines for moving natural gas within the region to long haul pipelines. In early 2020, EQM renegotiated the majority of its Pennsylvania and West Virginia gathering contracts with EQT to enter into a new 15-year gas gathering agreement with longer-term and higher minimum volume commitments. The new contract will enhance EQM's long-term cash flow profile. EQM's negative outlook reflects the MVP completion uncertainty and consequent potential for debt leverage to increase significantly. EQM should have adequate liquidity, as reflected in its SGL-3 rating. As of June 30, 2020, the company had $115 million of cash and $1.9 billion of availability under its $3 billion unsecured revolving credit facility due October 2023. EQM's capital spending through 2021 will include capital contributions dedicated to its Mountain Valley Pipeline (MVP) project and other growth projects. EQM will fund its liquidity needs through its operating cash flow and revolver draws. There is one financial covenant governing the credit facility -- a maximum consoli.dated Debt/EBITDA ratio of 5.75x, stepping down in periodic decreases to 5.0x for the quarter ending on March 31, 2023 and after. The company will maintain compliance with its covenant requirements. There are no debt maturities until August 2022 when the term loan matures. EQM has a $3 billion revolving credit facility due October 2023 ($485 million of outstanding borrowings as June 30, 2020), $1.4 billion of term loan due 2022 and $5.1 billion of senior unsecured notes with staggered maturities, as of June 30, 2020. EQM's revolver, term loan and senior notes are unsecured and are pari passu. Accordingly, the senior notes are rated Ba3, the same as the CFR. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS EQM's ratings could be downgraded if MVP is not likely to be online through 2021 and if EQM's debt leverage approaches 6x and is likely to remain at that level. An upgrade of EQM is unlikely given MVP's completion uncertainty. EQM's ratings could be considered for an upgrade if MVP is completed and the project's cash flow strengthens EQM's standalone credit profile by reducing its Debt/EBITDA to below 5x. EQT's ratings would have to be upgraded to consider an upgrade of EQM's ratings. EQM Midstream Partners, LP is an indirect, wholly owned subsidiary of Equitrans Midstream Corporation that owns and operates interstate pipelines, gathering lines and water assets primarily serving Marcellus Shale production. The principal methodology used in these ratings was Midstream Energy published in December 2018. EQT CORP: Fitch Assigns BB Rating to New 8-Yr. Sr. Unsecured Notes ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB'/'RR4' rating to EQT Corporation's (EQT) eight-year senior unsecured notes. Proceeds are intended to fund approximately half of the acquisition cost of Chevron's Marcellus assets. The remaining was funded by a prior equity issuance. The Rating Outlook is Positive. The ratings reflect Fitch's belief that the Chevron acquisition is credit accretive, the company's ability to address upcoming debt maturities, expected free cash flow generation that Fitch expects will be used for debt reduction, and a hedging program that locks in near-term expected returns. Concerns include volatility in natural gas prices, particularly the wide disparity in strip versus spot prices, the fragility of debt capital markets in lending to high yield energy issuers, and the negative impact the company's letters of credit (LOCs) facilities may have on liquidity, especially if gas prices were to experience another downturn. The Positive Outlook considers EQT's ability to generate FCF to reduce debt, the expectation that leverage will decline below 2.5x over the mid-cycle range, and a solid hedging program that locks in expected returns over the near term to achieve these metrics. KEY RATING DRIVERS Low Risk Transaction: EQT is acquiring Chevron's Marcellus Basin assets for $735 million, which will likely decline to less than $700 million following post-closing adjustments. The acquisition multiple is approximately 2.6x EBITDA. EQT is planning to fund the acquisition with $300 million of new debt and $300 million of equity, with the remainder funded with the revolver and FCF generation. The assets include 550 gross producing wells within 335,000 net Marcellus acres with current production at approximately 450 mmcfe/d (75% gas). The acquisition also includes interests in a gas gathering asset and a water pipeline system. The company has already hedged 75% of 2021 gas production, 65% of 2022, and 55% of 2023 of these assets. Fitch estimates the acquisition will be slightly accretive on a debt/EBITDA and FCF basis. Debt Reduction Management: EQT had one of the heavier maturity walls among E&P peers heading into the downturn, but has since made substantial progress taking it down. In January, EQT issued $1.75 billion in 6.125% 2025 and 7.0% 2030 notes, followed by $500 million in 1.75% 2026 convertible notes at the end of April. Together these issuances, along with proceeds from asset sales and FCF, were used to refinance all of the company's 2020 and most of its 2021 maturities. The company has also applied $392 million in tax refunds (with another $48 million forthcoming) and $125 million non-core asset sales to debt reduction. Only $168 million is due in 2021 and Fitch believes the company can meet its 2022 maturities through a combination of FCF, potential asset sales, and revolver availability. More importantly, EQT has demonstrated the ability to access capital markets. Modest Asset Sales: The environment for asset sales remains challenging, but has eased somewhat as the gas outlook has improved. In May, EQT sold non-strategic assets in West Virginia and Pennsylvania to Diversified Gas and Oil PLC for $125 million, including 80 Marcellus wells in Cameron, Clarion, Clearfield, Elk, Indiana, Jefferson, and Tioga counties with associated production of 50mmcfe/d and 809 conventional wells in West Virginia with production of 3mmcf/d. Since these sales, the company has pulled back as there is no longer an urgent need to sell assets given their ability to access capital markets. Nevertheless, Fitch expects EQT to target additional asset sales in 2021 as transaction prices improve given the recent upward movement in natural gas prices. The company's liquid stake in Equitrans Midstream Corporation (ETRN) also recently increased in value and is now worth approximately $215 million. Solid Hedging Strategy: EQT continues to opportunistically add hedges as pricing improves. The company has hedged approximately 72% of its expected 2021 production. Fitch believes management will look to increase its hedging program and begin to move to multi-years hedges beyond 2022. LOCs Reduce Liquidity: EQT's current liquidity is adequate. Since its downgrade to sub-investment grade, EQT had a maximum LOC exposure of $1.1 billion as of Sept. 30, 2020 at current ratings (down from a potential of $1.6 billion after negotiations with EQM Midstream Partners, LP [EQM] and the elimination of 400mmcf/d of firm transportation commitments). EQT posted approximately $800 million in LOCs as of Sept. 30, 2020. Fitch does not anticipate these LOCs are likely to be converted into debt for non-performance and the company has substantial availability of its revolver; however, they still represent a material use of the company's liquidity. Relatively High FT Costs: EQT's firm transportation (FT) costs are relatively high compared with other Appalachian natural gas producers. However, the company has taken steps to improve its firm transportation portfolio, such as its plan to sell more production to the Gulf Coast and Southeastern U.S. EQT is negotiating to sell potentially all of its capacity on the Mountain Valley Pipeline, while maintaining access to the pipeline, before the end of the year. Leading Size and Acreage: EQT is the largest gas producer in the U.S. with 3Q20 average daily sales volume of 3,980 million cubic-foot equivalent per day (mmcfe/d), 87% in the Marcellus and 13% in the Ohio Utica, and estimated proved reserves of 17.5 trillion cubic feet equivalent (Tcfe), significantly higher than gas-weighted E&P peers. The company has one of the best land positions in the Marcellus, given its extensive contiguous acreage position (1.2 million net acres in Appalachia, including 630,000 net acres in the core of the Marcellus and 60,000 net acres in the core of the Ohio Utica). EQT estimates it has 1,565 core undeveloped drilling locations in the Marcellus and 120 locations in the Ohio Utica, providing 15-20 years of Tier 1 inventory without the need for material land acquisition. DERIVATION SUMMARY With total 3Q20 production of 3,980 mmcfe/d (663 mboepd), EQT is the largest natural gas E&P company in the U.S., larger than Antero Resources (AR; B/Negative 3,521 MMCFE/d), Range Resources (RRC; NR, 2,349 mmcfe/d), Southwestern Energy (SWN; BB/Negative, 2,210 mmcfe/d), and CNX (BB/Positive, 1,258 mmcfe/d). EQT's 1P proved reserve base is 17.5 Tcfe. Given its dry gas orientation, EQT's liquids mix is low at just 4% versus more liquids-oriented peers like AR (32%), RRC (30%), and SWN (22%). However, a dry gas orientation remains an advantage in the current pricing environment. EQT's cash netbacks at June 30, 2020 were slightly above average at $(0.08)/mcfe, higher than liquids-oriented names such as RRC at $(0.14)/mcfe and SWN at $(0.33)/mcfe), but below peers like CNX Resources Corp. at CNX; $0.29/mcfe), given CNX's lower G&T costs. EQT's market access is above average for its peer group. Following 2020 capital markets activity and related debt repayment, EQT's refinancing risk has dropped significantly. KEY ASSUMPTIONS -- Henry Hub prices of $2.10/mcf in 2020, and $2.45/mcf from 2021 to the end of the forecast; -- WTI oil price of $38/bbl in 2020, $42/bbl in 2021, $47/bbl in 2022, and $50/bbl in 2023 and the long erm; -- Capex of approximately $1.075 billion held flat across the forecast; -- Production dipping to 4,082 mmcfe/d in 2020 in line with deferrals, and increasing to approximately 4,584 mmcfe/d pro forma for the Chevron acquisition; -- Asset sales of $165 million in 2020 and net acquisition price less than $700 million for Chevron net for post-closing adjustments; -- Existing hedge positions incorporated into forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Repayment of remaining 2021 maturities, resulting in gross debt declining to approximately $4.5 billion; -- Maintenance of a conservative financial policy, including continued FCF generation, debt repayment, hedging, and an adequate liquidity runway; -- Mid-cycle debt/EBITDA below 2.5x or FFO-adjusted leverage below 2.7x on a sustained basis; -- Increased size, scale, or diversification with continued credit-neutral funding policies; -- Further sustained improvement in gas market fundamentals and pricing, and company margins. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Sustained erosion in natural gas fundamentals and pricing, leading to the need for additional adjustments; -- Mid-cycle debt/EBITDA above 3.0x on a sustained basis; -- Mid-cycle FFO adjusted leverage above 3.2x on a sustained basis; -- Impaired liquidity. LIQUIDITY AND DEBT STRUCTURE Adequate Current Liquidity: At Sept, 30, 2020, EQT's liquidity was adequate and was comprised of cash on hand of $13.7 million, and availability of approximately $1.5 billion on the company's $2.5 billion senior unsecured revolver after accounting for LOCs of $800 million and borrowings on the facility of $244.5 million. The revolver is due July 2022 and has a one-time expansion option up to $3.0 billion, subject to lenders' approval. The only financial covenant on EQT's revolver is a maximum debt-to-capitalization ratio of 65% which has a carve-out for the effects other comprehensive income (OCI). 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. EQT CORP: Moody's Alters Outlook on Ba3 CFR to Positive ------------------------------------------------------- Moody's Investors Service affirmed EQT Corporation's (EQT) Ba3 Corporate Family Rating (CFR), its Ba3-PD Probability of Default Rating (PDR) and its Ba3 unsecured notes rating. The Speculative Grade Liquidity (SGL) rating SGL-2 is unchanged. The rating outlook was changed to positive from negative. "EQT's refinancing risk has been substantially mitigated by the company's actions in partially fulfilling its debt reduction target and through the improved macro natural gas outlook. Yet, the company's weak capital efficiency and the need for further debt reduction constrain the company's credit profile," commented Sreedhar Kona, Moody's senior analyst. "Acquisition of Chevron's Marcellus assets and its well-hedged 2021 production will aid the company's efforts to address further debt reduction through free cash flow and contribute to the positive outlook." Affirmations: Issuer: EQT Corporation Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Senior Unsecured Medium-Term Note Program, Afirmed (P)Ba3 Senior Unsecured Notes, Affirmed Ba3 (LGD4) Senior Unsecured Shelf, Affirmed (P)Ba3 Outlook Actions: Issuer: EQT Corporation Outlook, Changed To Positive From Negative RATINGS RATIONALE EQT's positive ratings outlook reflects the potential for the company to be upgraded through further debt reduction in 2021 from significant free cash flow generation and by achieving additional operating cost optimization to improve its capital efficiency. The affirmation of EQT's Ba3 CFR is driven by the significant improvement in the company's access to the capital markets since the second quarter of 2020. The 2021 natural gas pricing outlook and the macro fundamentals have strengthened, giving EQT an opportunity to generate free cash flow and further reduce debt through 2021. The company has reduced debt by about $800 million since year-end 2019, and has strengthened its commodity hedge book for 2021 adding some certainty to 2021 cash flow. Moreover, the restrained capital spending in 2020 allowed the company to generate significant free cash flow. Moody's expects the company to exercise similar restraint on 2021 capital spending and prioritize debt reduction over reserves and production growth. EQT is constrained by its weak capital efficiency as measured by its Leveraged Full Cycle Ratio (LFCR) and will only improve with incremental cost optimization and natural gas pricing improvement. Debt reduction will also aid the company's cash margin as interest expense will be lowered. The execution risk involved in these measures constrains EQT's ratings. EQT is supported by its size and scale, high quality acreage position and the acquisition of Chevron Corporation's (Chevron, Aa2 stable) assets increases EQT's size and scale, and is also somewhat deleveraging. EQT will acquire approximately 335,000 net Marcellus acreage with 450 MMcfe per day of production from Chevron for a purchase price of $735 million. The transaction is expected to close late in the fourth quarter of 2020. EQT's senior unsecured notes are rated Ba3, the same as the company's CFR, because all of the company's long-term debt, which includes a $2.5 billion revolving credit facility (unrated), is unsecured. However, should the company's revolving credit facility become a secured facility the unsecured notes ratings could be downgraded. EQT will have good liquidity consistent with its SGL-2 Speculative Grade Liquidity (SGL) Rating. As of September 30, 2020, EQT had $13.7 million of cash and $245 million of outstanding borrowings under the revolving credit facility maturing in July 2022. The revolver borrowings were primarily used for collateral and margin deposits associated with the company's over the counter derivative instrument contracts and exchange traded natural gas contracts. The company also has approximately $800 million of letters of credit posted from the revolver. EQT's credit facility contains a debt to capital limitation of 65%. The company will remain in compliance with the covenant. EQT also has substantial natural gas reserves and acreage which could be sold or borrowed against to provide additional liquidity if necessary. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS EQT's ratings could be upgraded if RCF/debt is sustained above 30% and the leveraged full cycle ratio (LFCR) approaches 1.5x. The company must also execute on its debt reduction targets. EQT's ratings could be downgraded if the company fails to meaningfully reduce debt or if the Retained Cash Flow (RCF) to debt ratio falls below 20%. The ratings could also be downgraded if the company is unable to refinance or repay its near-term maturities. EQT Corporation is an independent exploration and production (E&P) company focused in the Appalachian Basin. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. EQT CORP: Moody's Rates New $300MM Unsec. Notes Due 2029 'Ba3' -------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to EQT Corporation's proposed new $300 million senior unsecured notes due 2029. The proceeds of the notes will be used to partially fund EQT's acquisition of Chevron Corporation's (Chevron, Aa2 stable) Appalachia assets. EQT will acquire approximately 335,000 net Marcellus acreage with 450 MMcfe per day of production from Chevron for a purchase price of $735 million. The transaction is expected to close in November 2020. All other ratings for the company, including its Ba3 Corporate Family Rating (CFR), remain unchanged. The outlook remains positive. Assignments: Issuer: EQT Corporation Senior Unsecured Notes, Assigned Ba3 (LGD4) RATINGS RATIONALE Moody's views the Chevron transaction as a credit positive event and the new $300 million issuance will not weaken EQT's credit metrics. Additionally, EQT has concurrently launched a tender offer for up to $150 million combined aggregate principal of its 2021 and 2022 notes. Together these two transactions are largely leverage neutral. EQT's senior unsecured notes including the proposed $300 million unsecured notes due 2029 are rated Ba3, the same as the company's CFR, because all of the company's long-term debt, which includes a $2.5 billion revolving credit facility (unrated), is unsecured. However, should the company's revolving credit facility become a secured facility the unsecured notes ratings could be downgraded. EQT's positive ratings outlook reflects the potential for the company to be upgraded through further debt reduction in 2021 from significant free cash flow generation and by achieving additional operating cost optimization to improve its capital efficiency. EQT's Ba3 CFR reflects the significant improvement in the company's access to the capital markets since the second quarter of 2020. The 2021 natural gas pricing outlook and the macro fundamentals have strengthened, giving EQT an opportunity to generate free cash flow and further reduce debt through 2021. The company has reduced debt by about $800 million since year-end 2019, and has strengthened its commodity hedge book for 2021 adding some certainty to 2021 cash flow. Moreover, the restrained capital spending in 2020 allowed the company to generate significant free cash flow. Moody's expects the company to exercise similar restraint on 2021 capital spending and prioritize debt reduction over reserves and production growth. EQT is constrained by its weak capital efficiency as measured by its Leveraged Full Cycle Ratio (LFCR). EQT's weak LFCR is also partly caused by the negative reserves revision the company experienced due to its strategic shift to combo development. Moody's expects the LFCR to improve through the more capital efficient drilling strategy and natural gas pricing improvement. Debt reduction will also aid the company's cash margin as interest expense will be lowered. The execution risk involved in these measures constrains EQT's ratings. EQT is supported by its size and scale, high quality acreage position and the acquisition of Chevron Corporation's (Chevron, Aa2 stable) assets increases EQT's size and scale. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING EQT's ratings could be upgraded if RCF/debt is sustained above 30% and the leveraged full cycle ratio (LFCR) approaches 1.5x. The company must also execute on its debt reduction targets. EQT's ratings could be downgraded if the company fails to meaningfully reduce debt or if the Retained Cash Flow (RCF) to debt ratio falls below 20%. The ratings could also be downgraded if the company is unable to refinance or repay its near-term maturities. EQT Corporation is an independent exploration and production (E&P) company focused in the Appalachian Basin. The principal methodology used in this rating was Independent Exploration and Production Industry published in May 2017. FANNIE MAE: Posts $4.2 Billion Net Income in Third Quarter ---------------------------------------------------------- Federal National Mortgage Association aka Fannie Mae filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $4.23 billion on $26.05 billion of total interest income for the three months ended Sept. 30, 2020, compared to net income of $3.96 billion on $29.75 billion of total interest income for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported net income of $7.23 billion on $82.77 billion of total interest income compared to net income of $9.79 billion on $90.67 billion of total interest income for the same period during the prior year. As of Sept. 30, 2020, the Company had $3.86 trillion in total assets, $3.84 trillion in total liabilities, and $20.69 billion in total stockholders' equity. Fannie Mae expects the impact of the COVID-19 pandemic to continue to negatively affect its financial results, contributing to lower net income in 2020 than in 2019. Hugh R. Frater, chief executive officer commented, "Fannie Mae has helped more than 1.2 million homeowners with forbearance plans so far in 2020, while providing record levels of critical liquidity to the mortgage market through one of the most severe and sudden economic shocks in a century. Our performance this year demonstrates our ability to support the mortgage market in a safe and sound manner even during these uniquely challenging times. To continue meeting these challenges, we believe our company and the broader housing finance system would be best served by a responsible end to Fannie Mae's conservatorship, consistent with FHFA's goals." Fannie Mae Response to COVID-19 Fannie Mae is taking a number of actions to help borrowers, renters, lenders, and its employees manage the negative impact of the COVID-19 pandemic. Borrowers and Renters * Fannie Mae has implemented new policies to enable the company's single-family and multifamily loan servicers to better assist borrowers and renters impacted by COVID-19, including to: - provide forbearance to single-family borrowers reporting they are experiencing a financial hardship due to the COVID- 19 pandemic for up to 180 days, and at the borrower's request, extend the forbearance period up to a maximum of 12 months total; approximately 703,000 single-family loans in the company's book of business were in forbearance as of Sept. 30, 2020; () as of Sept. 30, 2020, Fannie Mae estimates that the company had provided forbearance on approximately 96% of those single-family loans in its book of business that were negatively impacted by COVID-19 (that is, were current as of March 1, 2020 and were 60 days or more delinquent as of Sept. 30, 2020). - offer options following forbearance, including a repayment plan, payment deferral, or a loan modification that aims to reduce a borrower's monthly payment; - suspend foreclosures and foreclosure-related activities for single-family properties through at least Dec. 31, 2020, other than for vacant or abandoned properties; - report as current to credit bureaus homeowners who receive a forbearance plan or other form of relief as a result of the COVID-19 pandemic during the covered period if they were current before the accommodation and make payments as agreed under the accommodation in accordance with the Fair Credit Reporting Act, as amended by the CARES Act, and provide that no late fees are charged for homeowners in a forbearance plan; and - provide forbearance to multifamily borrowers experiencing a financial hardship due to the COVID-19 pandemic for up to 6 months on the condition that the borrower suspend all renter evictions for nonpayment of rent during the forbearance period, through the 120-day eviction moratorium under the CARES Act, which ended on July 25, 2020, or any longer period required by federal, state or local law, including the order issued by the Centers for Disease Control and Prevention, effective Sept. 4, 2020 through Dec. 31, 2020, which halts residential evictions for nonpayment of rent for tenants who qualify for protection under the order. * Fannie Mae created the #HeretoHelp educational effort and updated the company's KnowYourOptions.com website to help keep people in their homes, providing information and resources on relief options for borrowers and renters impacted by COVID-19. The website includes the Renters Resource Finder, an online tool that allows renters to enter their building address to determine whether they live in a Fannie Mae-financed property and learn what resources they can access for help. Resources include access to Fannie Mae's Disaster Response Network, which offers free assistance to renters in Fannie Mae-financed rental properties, such as HUD-approved housing counselors that can help create a personalized action plan, offer financial coaching and budgeting, and provide other support. Lenders * Fannie Mae provided more than $860 billion in liquidity to the single-family and multifamily mortgage markets from the beginning of March 2020 through September 2020, including more than $460 billion through the company's whole loan conduit, which primarily supports small- to mid-sized lenders, including community lenders, fulfilling Fannie Mae’s mission to stabilize the housing finance market and provide liquidity, support, and access to affordable mortgage financing in all U.S. markets in all economic cycles. * Fannie Mae limited the duration of single-family servicers' obligations to advance principal and interest payments on delinquent loans to four months, and allows servicers to automatically receive reimbursement for advanced payments of principal and interest on a delinquent loan after four missed payments. Multifamily servicers can be reimbursed for advanced payments of principal and interest on a delinquent mortgage loan after paying the fourth of four continuous months of advances. * Fannie Mae continues to build its digital mortgage capabilities, enabling the company to adapt quickly to lenders' needs. In addition, the company is offering measures to help ensure lenders have the clarity and flexibility to continue to lend in a prudent and responsible manner during the COVID-19 pandemic. These measures include: offering additional methods of obtaining verbal verification of borrower employment; using the company's digital tools to offer flexibilities related to the lender's process for obtaining inspections and appraisals; and allowing remote online notarization options. Employees * Fannie Mae has taken steps to help protect the safety and resiliency of its workforce. From mid-March through early October 2020, the company required nearly all of its workforce to work remotely. In early October, the company began allowing employees, on a voluntary basis, to request approval to return to work at some of its office locations and has established mandatory COVID-19 safety protocols for these locations. Fannie Mae expects a significant majority of its employees will continue to work remotely for the foreseeable future. * To date, the company's business resiliency plans and technology systems have effectively supported its telework arrangement, allowing Fannie Mae to continue its critical function of supporting mortgage market liquidity. * Fannie Mae offers support services and resources for employees and their families affected by COVID-19, including the company's Employee Assistance Program, which provides a helpline number to support loved ones who may not be covered otherwise. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/310522/000031052220000418/fnm-20200930.htm About Fannie Mae and Freddie Mac Federal National Mortgage Association (OTCQB: FNMA), commonly known as Fannie Mae -- http://www.FannieMae.com-- is a government-sponsored enterprise (GSE) that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. The Company partners with lenders to create housing opportunities for families across the country. A brother organization of Fannie Mae is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac Freddie Mac (OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. About Fannie Mae's Conservatorship and Agreements with Treasury Fannie Mae has operated under the conservatorship of FHFA since Sept. 6, 2008. Treasury has made a commitment under a senior preferred stock purchase agreement to provide funding to Fannie Mae under certain circumstances if the company has a net worth deficit. Pursuant to this agreement and the senior preferred stock the company issued to Treasury in 2008, the conservator has declared and directed Fannie Mae to pay dividends to Treasury on a quarterly basis for every dividend period for which dividends were payable since the company entered conservatorship in 2008. FIC RESTAURANTS: Friendly's Files for Chapter 11 to Sell to Amici ----------------------------------------------------------------- FIC Restaurants, Inc., the restaurant company operating under the iconic brand name Friendly's Restaurants, announced on Nov. 1, 2020, an agreement to sell substantially all of its assets to Amici Partners Group, LLC ("Amici"), an entity comprised of experienced restaurant investors and operators who have been involved with some of the most well-known QSR and casual dining chains for more than 25 years. Amici is currently affiliated with BRIX Holdings, a multi-brand franchising company with national and international experience in the restaurant industry. Nearly all of Friendly's 130 corporate-owned and franchised restaurant locations are expected to remain open subject to COVID-19 limitations, and the transaction is expected to preserve thousands of corporate-owned restaurant team member and franchisee jobs. To facilitate an efficient sale process, Friendly's has filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code, as well as a motion seeking approval of the sale to Amici and a chapter 11 plan that contemplates payment of all allowed claims. Friendly's has asked the Bankruptcy Court for a hearing in mid-December to approve the sale and confirm the chapter 11 plan, with the closing and plan taking effect concurrently as soon as possible thereafter. Friendly's has sufficient cash on-hand to continue operations, meet its obligations to employees, franchisees and vendors, and ensure a seamless transition. Upon the sale closing, Amici expects to retain substantially all employees at Friendly’s corporate-owned restaurant locations. "Over the last two years, Friendly's has made important strides toward reinvigorating our beloved brand in the face of shifting demographics, increased competition, and rising costs," said George Michel, CEO of FIC Restaurants. "We achieved this by delivering menu innovation, re-energizing marketing, focusing on take-out, catering and third-party delivery, establishing a better overall experience for customers, and working closely with our franchisees and restaurant teams. Unfortunately, like many restaurant businesses, our progress was suddenly interrupted by the catastrophic impact of COVID-19, which caused a decline in revenue as dine-in operations ceased for months and re-opened with limited capacity." "We believe the voluntary bankruptcy filing and planned sale to a new, deeply experienced restaurant group will enable Friendly's to rebound from the pandemic as a stronger business, with the leadership and resources needed to continue to invest in the business and serve loyal patrons, as well as compete to win new customers over the long-term," he added. "Importantly, it is also expected to preserve the jobs of Friendly's restaurant team members, who are the heart and soul of our enterprise and have been critical to the progress we have made in transforming this iconic brand." About FIC Restaurants FIC Restaurants, Inc. is a restaurant company that operates under the iconic brand name "Friendly's Restaurants," which, for more than 80 years have delighted generations of guests by serving signature sandwiches, burgers and ice cream desserts. On the Web: http://www.friendlysrestaurants.com/ FIC Restaurants, Inc., et al., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12807) on Nov. 1, 2020. The Hon. Christopher S. Sontchi is the case judge. Womble Bond Dickinson LLP is serving as Friendly's legal counsel. Duff & Phelps is serving as investment banker, and Carl Marks Advisors as financial advisor. Donlin Recano & Co. is the claims agent, maintaining the site https://www.donlinrecano.com/friendlys About Amici Partners Group Amici Partners Group, LLC is an experienced investor group with a national and international franchisor background specializing in the restaurant industry. Amici is an entity affiliated with BRIX Holdings, which focuses on brands that are both attractive to the single-unit and multi-unit owner/operator franchisee and have the potential to grow into national and international award-winning chains. The current BRIX Holdings franchise portfolio includes Red Mango Yogurt Cafe Smoothie & Juice Bar, Smoothie Factory Juice Bar, RedBrick Pizza Kitchen Cafe and Souper Salad chains. FINANCE OF AMERICA: Fitch Gives 'B+' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has assigned expected Long-Term Issuer Default Ratings (IDRs) of 'B+' to Finance of America Companies Inc., Finance of America Equity Capital LLC, and Finance of America Funding LLC (together, FOA). The Rating Outlook is Stable. Concurrently, Fitch has assigned an expected rating of 'B'/'RR5' to Finance of America Funding LLC's proposed $350 million senior unsecured debt issuance. Proceeds will be used to fund a distribution to owners and for general corporate purposes. KEY RATING DRIVERS IDRs AND SENIOR DEBT The expected ratings reflect FOA's moderate franchise and historical track record as a U.S. nonbank mortgage originator and lender, experienced senior management team with extensive industry background, appropriate risk controls and underwriting standards, sufficient reserves to cover potential repurchase claims, modest valuation risk associated with mortgage servicing rights (MSRs), good historical asset quality performance in the servicing portfolio, increased funding flexibility following the inaugural senior unsecured bond issuance, and sufficient earnings coverage of interest expense. Rating constraints include the challenging economic backdrop, which Fitch believes may pressure asset quality over the medium term, particularly as COVID-related government benefits begin to expire, modestly higher leverage relative to peers, continued reliance on secured, short-term, wholesale funding facilities, elevated key person risk related to its founder and Chairman, Brian Libman, who exercises significant control over the company as a major shareholder, and private equity ownership through an affiliated investment vehicle of The Blackstone Group Inc. (Blackstone), which could impact the strategic and financial targets of the firm. Fitch believes the highly cyclical nature of the mortgage origination business and the capital intensity and valuation volatility of MSRs within the mortgage servicing business represent primary rating constraints for non-bank mortgage companies, including FOA. However, Fitch expects FOA will experience less MSR volatility compared to peers as the company has only recently begun to retain MSRs. Furthermore, the mortgage business is subject to intense legislative and regulatory scrutiny, which further increases business risk, and the imperfect nature of interest rate hedging can introduce liquidity risks related to margin calls and/or earnings volatility. These industry constraints typically limit ratings assigned to non-bank mortgage companies to below investment grade levels. Fitch believes FOA's multi-product origination approach is well positioned relative to peers, as the scalability of the platform has allowed the company to take advantage of increased mortgage demand, which has resulted in improved earnings in 2020. The company emphasizes purchase origination volume over refinancing, the former of which can yield more consistent origination volume through different interest rate environments but is also sensitive to broader macroeconomic factors. FOA historically sold the majority of its MSR portfolio to manage its balance sheet and raise liquidity but began to retain MSRs more recently given reduced sale economics. While the sale of MSRs made FOA more reliant on gain on sale revenue, which can be volatile over time, the retention of MSRs will expose the firm to incremental valuation risks, which will also contribute to earnings volatility, albeit at a lower level than most peers. FOA is not subject to material asset quality risks because nearly all originated loans are sold to investors shortly after origination. However, FOA has exposure to potential losses due to repurchase or indemnification claims from investors under certain warranty provisions. Fitch expects FOA will continue to build reserves for loan production to account for this risk. FOA's historic repurchase claims have been minimal and the company has had sufficient reserves to cover these charges, which Fitch expects to continue. The asset quality performance of FOA's servicing portfolio is solid, as delinquencies have been low relative to peers and the overall market in recent years. Additionally, the amount of FOA's loans in COVID-19 related forbearance programs is below the broader market, which is attributed to the company's disciplined underwriting approach and focus on agency, regulatory and/or investor guidelines. Still, Fitch expects delinquencies to remain above historic averages for some time as forbearance programs cease and the macroeconomic effects of COVID-19 continue. The company's earnings have been strong in 2020, driven by growing origination volume and an increase in gain on sale margins. Annualized pre-tax return on average assets amounted to 5.5% during the first half of 2020 (1H20), which compared favorably to the historical average of 2.2% from 2016-2019. Low interest rates are expected to continue to drive higher origination volume, which should benefit FOA's earnings, but Fitch expects profitability metrics to moderate from current levels, with the normalization of gain on sale margins, incremental valuation hits on MSRs and higher interest expense on the contemplated senior unsecured note issuance. Fitch evaluates FOA's leverage metrics primarily based on gross debt to tangible equity, excluding the liabilities associated with the firm's agency and private label reverse mortgage securitizations. On this basis, leverage amounted to 5.9x, as of June 30, 2020, down from 7.9x at Dec. 31, 2019 due to increased net income and growth in retained earnings. Pro forma for the contemplated senior unsecured debt issuance of $350 million-$400 million, Fitch expects FOA's leverage will increase to a range of 6.6x-6.8x, which is within Fitch's 'bb' category capitalization and leverage benchmark range of 5.0x-7.5x for balance sheet heavy finance & leasing companies with an 'a' category operating environment score. Consistent with other mortgage companies, FOA is reliant on the wholesale debt markets to fund operations. Secured debt, which was 100% of total debt at June 30, 2020, is comprised of limited duration warehouse facilities, securities repurchase facilities, and lines of credit used to fund originations and operations. Although FOA's lenders are diverse; comprised of 18 domestic and international banks and specialty finance companies, just 48.1% of FOA's facilities were committed at June 30, 2020, which is consistent with peers but below that of finance and leasing companies more broadly. FOA's funding tenor is short-duration and most of its facilities mature within one year, well-below that of other non-bank financial institutions, which exposes FOA to increased liquidity and refinancing risk. Fitch would view an extension of the firm's funding duration favorably. Should FOA execute on its unsecured issuance, Fitch estimates that the percentage of unsecured debt to total debt will increase to within a range of 12.8%-14.6%, which is at the lower end of Fitch's 'bb' category funding, liquidity, and coverage benchmark range of 10% to 40% for finance and leasing companies with an 'a' category operating environment score. Fitch would view a further increase in the unsecured funding component favorably as it would increase unencumbered assets and enhance the firm's funding flexibility, particularly in times of stress. On April 21, 2020, the Federal Housing Finance Agency (FHFA), which is the regulator of Fannie Mae and Freddie Mac (Fannie and Freddie, collectively the GSEs), announced that GSE mortgage servicers will not have to advance principal and interest (P&I) for more than four months of missed payments for borrowers in forbearance. This timeframe is consistent with the policy before COVID-19, when the GSEs generally purchased loans out of mortgage-backed security pools after being delinquent for four months. Fitch views this development positively as it limits the potential liquidity strain on FOA from the Fannie and Freddie portions of its MSR portfolio, which comprised approximately 84.4% of the MSR portfolio (by unpaid balance) at June 30, 2020. Fitch views FOA's liquidity profile as adequate for the ratings. As of June 30, 2020, FOA had approximately $130.9 million of unrestricted cash, which is expected to increase with the unsecured issuance. At June 30, 2020, FOA also had available borrowing capacity of $2.1 billion on its funding facilities, which Fitch believes is sufficient to fund originations and operations. Additionally, FOA has a $25 million sublimit under its $50 million committed MSR facility, which could be utilized to fund servicing advances on Fannie and Freddie MSRs, if necessary, which Fitch views favorably. FOA's management team has strong industry experience, but Fitch believes that a moderate degree of key person risk is present with founder and Chairman Brian Libman, who is actively involved in the day-to-day operations of the company. However, the executive management team at FOA has significant depth and experience in the mortgage and lending industry. Still, the absence of an independent board and the concentration of control with Brian Libman and Blackstone demonstrates a weaker-than-peer governance structure and represents a rating constraint. The Stable Rating Outlook reflects Fitch's expectations that FOA will maintain good asset quality, continued generation of strong earnings, while maintaining access to diversified funding and sufficient liquidity. Fitch also expects FOA's leverage will decline over time given management's strategy to increase retained earnings over the outlook horizon. The expected rating on the senior unsecured debt of 'B'/'RR5' is one notch below the Long-Term IDR, reflecting its subordination to secured debt in the capital structure and limited pool of unencumbered assets, which translates into weaker relative recovery prospects in a stressed scenario. RATING SENSITIVITIES IDRs AND SENIOR DEBT Upon execution of an unsecured debt issuance of $350 million-$400 million, Fitch would expect to convert FOA's expected IDR to a final IDR of 'B+'. Factors that could, individually or collectively, lead to negative rating action/downgrade include an inability to execute on the unsecured debt issuance, a sustained increase in leverage above 7.5x over the next 12 to 18 months, an inability to refinance maturing funding facilities and maintain sufficient liquidity to effectively manage elevated servicer advances or to meet margin call requirements. Regulatory scrutiny resulting in FOA incurring substantial fines that negatively impact its franchise or operating performance, or the departure of Brian Libman, who has led the growth and direction of the company, could also drive negative rating actions. Fitch believes positive rating momentum is limited over the near term given the economic backdrop, but factors that could, individually or collectively, lead to positive rating action/upgrade include a clearer understanding of the uptake on forbearance programs, peak delinquency rates and liquidity requirements in light of a potential for a second wave of COVID-19, a sustained reduction in leverage at or below 5.0x over the outlook horizon, on a gross debt to tangible equity basis, an improvement in funding flexibility, including an extension of funding duration, an increase in the proportion of committed facilities, and/or an increase in unsecured debt and unencumbered assets, and an enhancement of the liquidity profile. Positive rating actions could also be driven by demonstrated effectiveness of corporate governance policies and the maintenance of consistent operating performance. The expected unsecured debt rating is primarily sensitive to any changes in the Long-Term IDR and would be expected to move in tandem. However, a material increases in unencumbered assets and/or an increase in the proportion of unsecured funding could result in a narrowing of the notching between FOA's Long-Term IDR and the unsecured debt. ESG CONSIDERATIONS FOA has an ESG Relevance Score of '4' for Governance Structure due to elevated key person risk related to its founder and Chairman, Brian Libman, who has led the growth and strategic direction of the company. An ESG Relevance Score of '4' means Governance Structure is relevant to FOA's rating but not a key rating driver. However, it does have an impact to the rating in combination with other factors. Except for the matters discussed above, 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). For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg. 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. FINANCE OF AMERICA: Moody's Rates $350MM Senior Unsec. Bond 'B3' ---------------------------------------------------------------- Moody's Investors Service has assigned a first-time B2 corporate family rating to Finance of America Funding LLC (FOA) along with a B3 senior long-term unsecured rating to the company's planned $350 million senior unsecured bond issuance maturing 2025. The rating outlook is stable. Assignments: Issuer: Finance of America Funding LLC LT Corporate Family Rating, Assigned B2 Senior Unsecured Regular Bond/Debenture, Assigned B3 Outlook Actions: Outlook, Assigned Stable RATINGS RATIONALE The B2 corporate family rating reflects the benefits to creditors from FOA's growing franchise in the residential mortgage, reverse mortgage, and commercial mortgage markets in the US. The company is one of the top three largest originators of reverse mortgages, a top 20 retail originator of residential mortgages, and a leading originator of fix and flip residential and single-family investor mortgages. The company has a multipronged origination strategy including distributed branch retail, third party brokers as well as an online, direct call center channel. While the company's three business segments provide a modest level of business diversification, a credit positive, Moody's believes that the positive credit attribute is more than offset by the challenges resulting from the complexity of its businesses and financial reporting, compared to the average rated non-bank mortgage peers. In addition, the company's senior leadership team is geographically distributed creating some potential operational challenges. The company's profitability has improved materially in 2020, with the increase in residential mortgage origination volumes as a result of the decline in interest rates. However, the company's leverage is high, even after adjusting for the low risk the company retains on its reverse mortgage securitizations. In addition, the company's liquidity position is somewhat weaker than other rated peers given its exposure to non-agency and non-government loans, which are less liquid during periods of market stress than agency and government insured mortgages. Moreover, virtually all its assets are encumbered, reducing the company's ability to access alternative funding sources. The company announced on 13 October it had entered into an agreement to affect a business combination transaction with Replay Acquisition Corp, a special purpose acquisition company, that values Finance of America at around $1.9 billion. Entities managed by Finance of America's founder, Brian Libman, funds managed by Blackstone Tactical Opportunities, together with management equity holders will own approximately 70% of the combined company, assuming no redemptions by Replay's public stockholders. The transaction is expected to close in the first half of 2021. Moody's considers the public listing as a credit positive because of the additional disclosure and market discipline associated with being a public company. The benefits of going public will be somewhat offset by the pressure on management from the quarterly earnings and market share growth expectations of public investors. On October 26, the company announced the planned issuance of $350 million of senior unsecured bonds. Management has indicated that approximaely $300 million of the proceeds from the proposed $350 million unsecured bond offering will be used to fund an equity distribution, which Moody's believes is credit negative. Moody's has rated the proposed senior unsecured notes maturing in 2025 B3, based on Finance of America's B2 corporate family rating and reflects the application its Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company is able to maintain its solid profitability and materially reduce its leverage for example, sustained profitability with net income excluding mortgage servicing right (MSR) fair value marks to adjusted assets (assumes securitization assets where the company only retains very nominal risk have a 10% risk weight) above 3.0% and tangible common equity to adjusted tangible assets above 15%. In addition, increasing the level of unencumbered assets, back-up committed liquidity, and the 364-day tenor of its warehouse facilities would be viewed positively. The ratings could be downgraded if the company's financial performance deteriorates for example, sustained profitability with net income excluding MSR fair value marks to adjusted assets (assumes securitization assets where the company only retains very nominal risk have a 10% risk weight) below 1% and tangible common equity to adjusted tangible assets prior to 2021 below 6.0% and thereafter below 7.5% or tangible common equity to tangible assets falls below 1.5%. In addition, the ratings on the unsecured debt could be downgraded if the ratio of secured corporate debt to unsecured corporate debt increase above 50% from the current level of around 42%. Negative ratings pressure could also develop if the asset quality of the loans that the company originates deteriorates. For example, with respect to residential mortgage originations, if the percentage of non-government sponsored enterprise and non-government loan origination volumes grows to more than 10% of its total originations without a commensurate increase in alternative liquidity sources and capital to address the riskier liquidity and asset quality profile that such an increase would entail. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. FIORES MOTORS: Wins Confirmation of Plan ---------------------------------------- Judge Jeffery A. Deller has approved on a final basis the Disclosure Statement dated August 14, 2020, filed by Fiores Motors, LLC. The court also confirmed by order dated Oct. 13, 2020, the Chapter 11 Plan proposed by the Debtor dated August 14, 2020. The Plan was amended by a Stipulation between Fiores Motors, LLC and Allegheny County, City of Pittsburgh, and the Pittsburgh School District which was filed with Court on Sept. 29, 2020. A copy of the Disclosure Statement filed Aug. 14, 2020, is available at: https://www.pacermonitor.com/view/G4UREFY/Fiores_Motors_LLC__pawbke-19-22212__0217.0.pdf?mcid=tGE4TAMA About Fiores Motors Fiores Motors, LLC, filed as a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Fiores Motors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 19-22212) on May 31, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of the same range. The case is assigned to Judge Thomas P. Agresti. Gary W. Short, Esq., is the Debtor's counsel. FIRSTENERGY CORP: S&P Lowers ICR to 'BB+' on Termination of CEO --------------------------------------------------------------- S&P Global Ratings downgraded FirstEnergy Corp. (FE) and its subsidiaries including its issuer credit rating to 'BB+' from 'BBB'. S&P also lowered its issuer credit rating on Allegheny Generating Co. to 'BB' from 'BBB-'. S&P said, "At the same time, we lowered the senior unsecured issue level rating on FE and FirstEnergy Transmission to 'BB+' from 'BBB-' and assigned our '3' recovery ratings, indicating meaningful (50% to 70%; rounded estimate: 65%) recovery in the event of a payment default. The recovery rating on this debt is capped at '3' consistent with our approach for assigning recovery ratings to unsecured debt issued by 'BB' category corporate entities because recovery prospects are highly vulnerable to impairment before default by additional debt issuance. We also lowered the senior unsecured issue ratings on American Transmission Systems Inc., Jersey Central Power & Light Co., Metropolitan Edison Co., Mid-Atlantic Interstate Transmission, Ohio Edison Co, Pennsylvania Electric Co., and Trans-Allegheny Interstate Line Co., to 'BBB-' from 'BBB' and assigned our '2' recovery ratings indicating substantial (70% to 90%; rounded estimate: 85%) recovery in the event of a payment default. The recovery rating on this debt is capped at '2' consistent with our approach for assigning recovery ratings to unsecured debt issued by 'BB' category regulated utilities because recovery prospects are somewhat vulnerable to impairment before default by additional debt issuance." "We lowered the senior unsecured issue ratings on Cleveland Electric Illuminating Co. to 'BBB-' from 'BBB' and assigned our '2' recovery rating, indicating substantial (70% to 90%; rounded estimate: 75%) recovery in the event of a payment default. We lowered the senior secured issue ratings on Cleveland Electric, Ohio Edison Co., Toledo Edison Co., and Monongahela Power Co. to 'BBB+' from 'A-', reflecting a '1+' recovery rating." The ratings on FE and its subsidiaries remain on CreditWatch with negative implications. The CreditWatch placement reflects the probability that we could lower our issuer credit rating on the companies again within the next three months, subject to additional disclosures related to the ongoing investigations. The two-notch downgrade reflects the termination of the company's CEO, Chuck Jones and two other executives, for violating company policies and its code of conduct. S&P said, "We view the severity of these violations at the highest level within the company as demonstrative of insufficient internal controls and a cultural weakness. We view these violations as significantly outside of industry norms and, in our view, represent a material deficiency in the company's governance. To account for these deficiencies, we revised our assessment of the company's Management & Governance (M&G) score downward to weak from fair, which lowers the issuer credit rating by two notches." The actions follow the July 2020 announcement and CreditWatch listing of FE and its subsidiaries related to a U.S. government criminal complaint against the Speaker of the Ohio House of Representatives and four associates for participating in an approximately $60 million racketeering scheme. The complaint alleges that the participants were bribed from March 2017-March 2020 in exchange for help in passing House Bill 6. House Bill 6 was enacted during 2019 and established support for nuclear energy supply in Ohio and a decoupling mechanism for Ohio electric utilities. Although FirstEnergy has not been named as a defendant in the criminal complaint, we believe the severity of the charges outlined in the compliant, and the allegation that bribery payments began as early as March 2017, prior to Energy Harbor's emergence from bankruptcy under its new ownership, could possibly implicate FirstEnergy Corp in some manner. Environmental, social, and governance (ESG) credit factors for this credit rating change. -- Risk management and internal controls S&P said, "We expect to resolve the CreditWatch placement in the coming months, pending the outcomes of multiple investigations, criminal allegations, and civil lawsuits. Depending on the various outcomes, business risk could increase and financial measures could materially weaken reflecting penalties, fines, financial settlements, and a potential weakening of the company's ability to manage its regulatory risk effectively. Any of the above determinations would likely result is a downgrade of one or more notches. We could remove the ratings from CreditWatch with negative implications and affirm the ratings if the violations are limited to the three executives already identified, management takes material steps to strengthen internal controls, criminal complaints are not brought against it, and it manages the shareholder lawsuits in a manner that preserves credit quality." FORT DEARBORN: Moody's Affirms B3 CFR & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating and B3-PD Probability of Default Rating of Fort Dearborn Holding Company, Inc. and all instrument ratings. Moody's also assigned a B2 rating on the extended $75 million revolver due in July 2023 and withdrew the rating on the existing revolver. Moody's also changed the outlook to stable from negative following improved operating performance and extension of the revolving credit facility until 2023. Assignments: Issuer: Fort Dearborn Holding Company, Inc. Senior Secured Bank Credit Facility, Assigned B2 (LGD3) Affirmations: Issuer: Fort Dearborn Holding Company, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured Bank Credit Facility, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: Fort Dearborn Holding Company, Inc. Outlook, Changed To Stable From Negative Withdrawals: Issuer: Fort Dearborn Holding Company, Inc. Senior Secured Bank Credit Facility, Withdrew B2 (LGD3) RATINGS RATIONALE Fort Dearborn's B3 Corporate Family Rating reflects the company's modest scale in a fragmented labels industry, weak credit metrics (Debt/EBITDA as adjusted by Moody's at 7.9x in the twelve months ended June 30, 2020) and limited free cash flow generation due to reinvestment into business and history of debt-funded acquisitions that require one-time costs to achieve synergies. The affirmation of the rating reflects Moody's expectation of continued top line growth due to expected stable demand for consumer staples, onboarding of new business won in 2020 and realization of projected synergies, some of which were delayed due to the pandemic. The rating also reflects expectations that free cash flow should turn positive in 2021 and the company would be able to lower leverage below 7x. The rating benefits from high exposure to the relatively stable end markets (about 90% from food and beverage, spirits and household/personal care and less than 10% from more cyclical paint and coatings) and long-standing relationships with customers and national footprint with 20 facilities. Fort Dearborn benefits from its strong market position in cut and stack labels, but this segment has low organic growth and substitution pressures from other label technologies where the company has less presence. As a label manufacturer, Fort Dearborn faces modest environmental risks due to increasing regulatory and consumer concerns about plastic packaging, particularly single-use applications. In addition, many packaged goods companies have adopted various sustainability targets including recyclability and recycled content in their products. Moody's believes Fort Dearborn has established expertise in complying with environmental and business risks and has incorporated procedures to address them in its operational planning and business models, including offering customers labels made from substrates that could be recycled or easily separated during the recycling process. However, labels are generally disposed after use and not recycled, which could result in some environmental damage. The company has not disclosed any material accrued environmental liabilities. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. In most jurisdictions production of consumer staples packaging was deemed an essential service, which allowed Fort Dearborn to continue to operate and supply its customers. Consumer trends away from plastic packaging can marginally pressure demand over time, however, the company's labels can be applied to various types of packaging including glass and metal. Governance risks are heightened given Fort Dearborn private-equity ownership, which carries the risk of an aggressive financial policy, including debt-funded acquisitions or dividends. The stable outlook reflects expectations of continued top line and earnings growth and improvement in free cash flow generation that should allow the company to improve its credit metrics ahead of earliest maturities in 2023. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS For an upgrade, adjusted debt-to-EBITDA needs to decline below 5.5 times and the company needs to established a track record of free cash flow generation and also of debt repayment. Moody's can also upgrade the company if EBITDA to interest improves above 3 times and free cash flow to debt improves above 3%. The rating could be downgraded if earnings growth continues to fall short of the company's projections and expectations such that Moody's adjusted debt/EBITDA remains above 7 times. The ratings could also be downgraded if its liquidity deteriorates, free cash flow remains negative and EBITDA/Interest remains below 2 times. Fort Dearborn is expected to have adequate liquidity over the next 12-18 months, supported mostly by the availability under its revolver and expected improvement in free cash flow in 2021. The company has extended its $75 million five-year revolver until July 20, 2023. The company had $28 million of borrowings and approximately $47 million of availability under the revolver as of June 30, 2020. The term loan amortization is 1% per year and the facility has an excess cash flow sweep. Term loans are due in 2023 and 2024. The revolving credit facility has a springing first lien net leverage covenant which applies whenever the outstanding balance on the revolver is greater than 35% of the aggregate principal amount of the revolving commitments of all lenders. The covenant is set at 7.25 times with no steps downs and the company has sufficient headroom under the covenant. All assets are encumbered by the secured credit facilities. Fort Dearborn Holding Company, Inc., headquartered in Elk Grove Village, Illinois, is a supplier of product labels to a wide variety of consumer products and packaged food end markets. Revenues for the twelve months ended June 30, 2020 were $540 million. Fort Dearborn is a portfolio company of Advent International. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers Methodology published in September 2020. FOURTH QUARTER: Coweta County Buying Newnan Property for $6.5M -------------------------------------------------------------- Fourth Quarter Properties XXXVIII, LLC, asks the U.S. Bankruptcy Court for the Northern District of Georgia to authorize the sale of approximately 8.1 acres property within the confines of the Newnan Coweta County Airport, and comprised of: (i) an undeveloped land area located to the northwest of 45, 47 and 49 Ansley Drive at the Airport; and (ii) land located at 45, 47, and 49 Ansley Drive at the Airport upon which the Debtor constructed aircraft hangars, office space, and related site improvements and a taxi-way easement to the Airport, to Coweta County, Georgia for $6.5 million. The Debtor owns and leases approximately 28.39 acres of real property at the Newnan-Coweta County Airport. Approximately 20.81 acres of the real property is owned by the Debtor in fee simple, of which approximately 9.17 acres has a maintenance facility with attached office, a warehouse, and an equipment storage building. Approximately 11.64 acres (comprised of two lots) of the Real Property are vacant, but are "pad-ready." The Debtor leases the remaining 7.58 acres from the Newnan-Coweta County Airport Authority, also known as Newnan-Coweta Airport Authority, under a 99-year lease signed in 2002. The Leased Premises contains three aircraft hangers with attached tenant offices, and a through the fence taxi-way easement to the airport. The Debtor has prepaid all rent owing under the Lease. The Debtor currently subleases hanger and office buildings on the Leased Premises to Thomas Land & Development, LLC and TEMCO, LLC. On Sept. 29, 2020, the Debtor filed its Motion to Assume Unexpired Lease of Nonresidential Real Property regarding assumption of the Lease. A hearing on such motion before the Court is currently scheduled for Nov. 12, 2020. On Oct.7, 2020, the Debtor and the Subtenants executed their Sale and Purchase Agreement with the Buyerrelating to the purchase and sale of the Property. The Contract is currently awaiting execution by the Purchaser. The Purchaser is a public entity and subject to the Georgia Open Meetings Act. The Purchaser has approved the Contract in Executive Session and has articulated that the Contract will be approved at the next public meeting of the Purchaser on Oct. 20, 2020, with a similar meeting to follow on the next day for the Authority. In pertinent part, and as more particularly stated in Contract, the Contract provides that the Debtor will sell the Property to the Purchaser for a purchase price of $6.5 million. Out of the Purchase Price, $1.5 million will be paid to the Subtenants as termination payments for their respective subleases. The closing date is set for the later of (i) 30 days after final execution of the Contract; (ii) the Court's order approving the sale; or (iii) such other date as the parties may mutually agree. Respondent Cornerstone Commercial Mortgages, LLC, 530 A West Thomas Street, Milledgeville, Georgia, asserts a claim in the case of $3,734,110. Cornerstone asserts the claim on behalf of itself (or an affiliate) and four other participating banks. It asserts that its claim is secured by, among other things, (a) the Real Property, pursuant to a Deed to Secure Debt dated April 9, 2004 and (b) the Debtor's leasehold rights under the Lease, pursuant to a Leasehold Deed to Secure Debt and an Assignment of Leases and Rents, each dated April 9, 2004, such that it claims an interest in the Property. Respondent NCA Note Acquisition, LLC, 2859 Paces Ferry Road SE, Suite 1140, Atlanta, Georgia, assets a claim in the case. Respondent South State Bank, N.A., formerly known as CenterState Bank, N.A., 520 Gervais Street, Columbia, South Carolina, asserts a disputed claim in the case of $491,484. South State asserts that its claim is secured by, among other things, some portion of the Real Property owned by the Debtor. South State does not assert a security interest in the Lease or the Property that Debtor proposes to sell. Upon information and belief, South State also holds the largest participant share in the participating loan upon which Cornerstone's claim is based. To the extent that South State asserts a secured claim against the Lease or the Property, it has been added as a Respondent. Contemporaneously with the filing of the Motion, or shortly thereafter, the Debtor will be filing an adversary proceeding to challenge the extent, validity, and priority of South State’s claim of lien, including its claim of lien, if any, against the Property. Respondent John D. Phillips, 4230 Glen Devon Drive, Atlanta, Georgia, assets a claim in the case of $4,828,160. His claim is secured by, among other things, (a) the Real Property, pursuant to a Deed to Secure Guaranty (Fee) dated effective Nov. 22, 2017 and (b) the Debtor's leasehold rights under the Lease, pursuant to a Deed to Secure Guaranty (Leasehold) dated effective Nov. 22, 2017, such that he claims an interest in the Property. Respondent Hudland Holdings, LLC, 2859 Paces Ferry Road SE, Suite 1140, Atlanta, Georgia, asserts a disputed claim in the case of $21.75 million, which is debt alleged to arise in connection with a guaranty by the Debtor of a debt of one or more of the Debtor's affiliates/insiders. Hudland asserts that its claim is secured by, among other things, (a) the Real Property, pursuant to a Deed to Secure Guaranty (Fee) dated as of Nov. 22, 2017 and (b) the Debtor's leasehold rights under the Lease, pursuant to a Deed to Secure Guaranty (Leasehold) dated as of Nov. 22, 2017, such that it claims an interest in the Property. The Debtor disputes Hudland's claim and its claim of lien. Contemporaneously with the filing of the Motion, or shortly thereafter, the Debtor will be filing an adversary proceeding to challenge Hudland's claim and the extent, validity, and priority of its claim of lien, including its claim of lien against the Property. Respondent Benjamin Carl Owen, 1735 Cashtown Road, Bremen, Georgia, asserts a claim in the case of $2.82 million, which debt is alleged to arise in connection with a guaranty by the Debtor of a debt of one or more of the Debtor’s affiliates/insiders. Owen asserts his claim is secured by, among other things, the Real Property and leasehold rights under the Lease, pursuant to a Commercial Deed to Secure Debt and Security Agreement dated Sept. 23, 2019, such that he claims an interest in the Property. Respondent Honorable Robi Brook, Coweta County Tax Commissioner, 22 East Broad Street, County Administrative Building, Newnan, Georgia, may claim an interest in the Property for ad valorem taxes owing on the Leased Premises or the Property. Respondent Newnan-Coweta County Airport Authority, also known as Newnan-Coweta Airport Authority, 22 East Broad Street, Newnan, Georgia, has been named as a Respondent to the Motion in an abundance of caution and the Debtor is not aware of any claim against it. The Debtor asks for the entry of an Order: (a) authorizing its sale of the Property in accordance with the Contract, free and clear of liens, claims, and interests, with such liens, claims, and interests, if any, to attach to the net proceeds of such sale; (b) authorizing disbursal of the proceeds of the sale as follows: i) pay liens for unpaid ad valorem taxes assessed against the Property, if any, through the closing of the sale; ii) pay all usual, customary, and reasonable costs associated with the sale (including payments to the Subtenants) as agreed in the Contract; iii) pay all additional United States Trustee fees incurred by the Debtor on account of distributions required to close the sale; iv) pay to Cornerstone or its Court-determined successor, if any, at closing the net proceeds necessary to satisfy the Cornerstone indebtedness; and v) deposit any remaining proceeds into the Debtor's DIP Account, pending confirmation of the Debtor's First Amended Plan of Reorganization dated Aug. 31, 2020, pending a resolution of the described adversary proceedings and claim/lien disputes, and pending further order of the Court; (c) determining the value of the Property being sold securing the liens; (d) to the extent provided in the Contract, authorizing the Debtor's assumption or rejection of executory contracts or leases; and (e) granting other relief as set in the Motion. The Debtor believes that time is of the essence in closing the transactions by the contemplated Closing Date. Therefore, it asks that the Court waives the 14-day stay of any order approving the Motion pursuant to F.R.B.P. 6004(h) and 6006(d). A full-text copy of the Contract is available at https://tinyurl.com/yxvbf2nm from PacerMonitor.com free of charge. About Fourth Quarter Properties XXXVIII Fourth Quarter Properties XXXVIII, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)), whose principal assets are located at 45, 47 and 49 Ansley DriveNewnan, Ga. Fourth Quarter Properties filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 20-10883) on June 1, 2020. The Debtor previously sought bankruptcy protection (Bankr. N.D. Ga. Case No. 13-10585) on March 5, 2013. Judge W. Homer Drake oversees the case. In the petition signed by Stanley E. Thomas, manager, the Debtor was estimated $10 million to $50 million in both assets and liabilities. David L. Bury, Jr., Esq., at Stone & Baxter, LLP, is the Debtor's bankruptcy counsel. FRANCHISE GROUP: Moody's Assigns B1 CFR, Outlook Stable ------------------------------------------------------- Moody's Investors Service assigned first time ratings to Franchise Group, Inc., including a B1 corporate family rating, B1-PD probability of default rating and B1 rating to its proposed $650 million senior secured notes. At the same time, Moody's assigned an SGL-2 speculative grade liquidity rating, reflecting its expectation for good liquidity. The outlook is stable. Proceeds from the proposed notes will be used to refinance Franchise Group's existing indebtedness, raise additional capital for general corporate purposes and pay transaction related fees and expenses. The ratings are subject to review of final documentation. Assignments: Issuer: Franchise Group, Inc. Probability of Default Rating, Assigned B1-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Corporate Family Rating, Assigned B1 GTD Senior Secured Regular Bond/Debenture, Assigned B1 (LGD3) Outlook Actions: Issuer: Franchise Group, Inc. Outlook, Assigned Stable RATINGS RATIONALE Franchise Group's B1 CFR reflects its moderate financial leverage, with estimated lease-adjusted debt/EBITDAR of around 3x and EBIT/Interest of around 2x for the latest twelve months ended June 30, 2020, pro forma for the full year effect of recent acquisitions and the proposed refinancing transaction. The rating also reflects the company's industry and product diversification resulting from its operating in four separate segments with demonstrated economic resilience. The company has material sales and earnings concentrations within American Freight and Vitamin Shoppe segments, which together generated around 90% and 80% of estimated latest twelve-month revenue and EBITDA. Its two other segments, Liberty Tax and Buddy's, while smaller from a revenue and EBITDA perspective, have much higher penetration of franchised locations, the royalty streams of which typically generate much higher margins and more stable revenue and cash flows. The rating is constrained by governance factors including the company's policy to use a significant amount of free cash flow to pay a growing dividend over time, and an acquisitive growth strategy. However, this is balanced against a track record of issuing equity to help fund acquisitions. While Moody's expects the company to maintain moderate leverage over the longer term, potential future acquisitions could temporarily increase leverage above current levels. Franchise Group's limited consolidated operating history is also a key consideration. Given that the company has rapidly grown through four successive acquisitions since being formed in July 2019, it has yet to prove that its business strategies and financial policies are sustainable over the longer term. Franchise Group's SGL-2 Speculative Grade Liquidity Rating reflects its good liquidity, supported by positive, yet seasonal, free cash flow, pro forma balance sheet cash exceeding $140 million, full availability under its $225 million ABL revolving credit facilities pro forma for the proposed note offering, lack of financial maintenance covenants other than a minimum availability test, and access to alternate liquidity sources such as potential future store franchising opportunities. The B1 rating on Franchise Group's proposed $650 million senior secured notes is the same as the B1 CFR. The notes will be secured by a first lien on substantially all assets of the borrower and guarantors, other than receivables and inventory, on which it will have a second lien position behind the company's two unrated ABL revolving credit facilities totaling $225 million. The notes will be guaranteed by Franchise Group, Inc., and each material wholly-owned domestic subsidiary that is a guarantor under the ABL revolving credit facilities. The stable outlook reflects Moody's expectation that Franchise Group will maintain moderate leverage while maintaining dividends and pursuing organic and acquisitive growth over the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded over time if Franchise Group demonstrates steady revenue and profit growth, successful acquisition integration and synergy realization, and positive free cash flow. An upgrade would also require a balanced financial policy that allows the company to maintain debt/EBITDA below 3x and EBIT/Interest above 2.5x. Ratings could be downgraded if the company's operating performance or credit metrics deteriorate through sales or profit declines or encounter acquisition integration issues. A deterioration in liquidity or more aggressive financial policies, such as maintaining higher leverage through significant debt funded shareholder returns or acquisitions, could also lead to a downgrade. Specific metrics include debt/EBITDA maintained above 4x or EBIT/interest below 2x. Franchise Group, Inc. (NASDAQ: FRG), through its subsidiaries, operates franchised and franchisable businesses including Liberty Tax Service (tax-preparation services), American Freight (value furniture and appliance retailer), Buddy's Home Furnishings (rent-to-own retailer) and The Vitamin Shoppe (specialty health supplement retailer). On a combined basis, Franchise Group currently operates over 4,000 locations predominantly located in the US and Canada that are either Company-run or operated pursuant to franchising agreements. Pro-forma revenue exceeds $2.0 billion. The principal methodology used in these ratings was Retail Industry published in May 2018. FRIENDS OF CHESTER: Fitch Affirms B- Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed the following revenue bonds issued by the Delaware County Industrial Development Authority, PA on behalf of Friends of Chester Community Charter School (FOCCS) at 'B-': -- $49.1 million charter school revenue bonds [Chester Community Charter School (CCCS) project], series 2010A. In addition, Fitch has affirmed CCCS's Issuer Default Rating (IDR) at 'B-'. The Revenue Bond and IDR Rating Outlook is Stable. SECURITY The series 2010A bonds are payable by a lien and pledge of gross revenues derived from a lease of the facilities to CCCS, backed by a mortgage on the property. Additionally, there is a debt service reserve (DSR) cash-funded to transaction maximum annual debt service (TMADS), defined as maximum annual debt service excluding the transaction's final double principal payment of about $4.1 million. CCCS management fee payments to CSMI, LLC are subordinate to the payment of debt service and DSR replenishment. ANALYTICAL CONCLUSION The 'B-' IDR and bond rating reflect the school's weak financial profile despite midrange revenue defensibility characteristics and operating risk assessments. The rating also reflects CCCS's weak liquidity profile, reliance on management fee write-offs, short-term borrowing practices, and continued waivers due to covenant violations. The rating also incorporates Fitch's expectation that CCCS's operating cash flow will improve gradually over time to a sustainable level (that does not require any management fee write-offs) as CCCS manages its budget to account for lower special education per-pupil funding from Chester Upland School District (CUSD) going forward. KEY RATING DRIVERS Revenue Defensibility - Midrange: The midrange assessment reflects CCCS's solid demand and enrollment history despite weaker academic performance compared to the state. Operating Risk - Midrange: Fitch believes the school has midrange flexibility to vary cost with enrollment shifts and expects fixed carrying costs to remain low. Financial Profile - 'b': CCCS's leverage metrics are elevated. CCCS has relied on management fee concessions to achieve positive operating results and support finances. Asymmetric Additional Risk Considerations: Fitch views the school's liquidity cushion as minimal. The school has been previously reliant on market access to maintain liquidity during the fiscal year. In addition, the school has requested waivers from bondholders in order to avoid financial covenant violations related to working capital cash reserves and the timing of financial reporting for fiscals 2016, 2017, 2018 and 2019. However, in fiscal 2020, the school chose not to issue revenue anticipation notes (RANS) and instead issued a 10-year revenue note to repay the remaining balance on the 2019 RANS. The school held the excess proceeds from the note sale as cash and the liability moved from being classified as a current liability to a long-term liability, effectively increasing the school's working capital ratios. As a result, management does not expect that it will need another waiver for fiscal 2020 as working capital and unrestricted cash amounts should be sufficient to meet covenant requirements. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- A sustained decline in leverage metrics to below 12.0x in Fitch's base case due to improved margins and cash flow as well as improved coverage metrics and increased available cash and equivalents; -- Ability to generate sustainable recurring positive cash flow from operations without the use of management fee write-offs. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- A decline in per-pupil funding that is more significant than what Fitch currently anticipates in its base case scenario without additional offsetting expenditure measures taken by the schools; -- Enrollment declines that reduce revenues and weaken the financial condition of the school; -- Inability of CCCS to obtain or renew cash-flow facilities at an affordable interest rate or a need for increased cash flow borrowing; -- The failure to obtain waivers from bondholders associated with the covenant violations would result in a technical default and would lead to a rating downgrade. -- The loss of the school's charter. CREDIT PROFILE CCCS is a K-8 charter school located in the Chester-Upland School District (CUSD), PA, which serves the city of Chester, Chester Township, and the borough of Upland. CCCS opened in 1998 with an initial enrollment of 97 students in grades K-4. The school has experienced significant growth and expansion since then and currently serves over 4,400 students in grades K-8 across four campuses, making it the largest K-8 brick-and-mortar charter school in the state. Following an initial three-year charter, the school has received consistent five-year renewals. Recently, the court-appointed receiver of CUSD granted an additional five-year renewal only 1.5 years into the current charter, effectively extending the charter through 2026. CURRENT DEVELOPMENTS Sector-Wide Coronavirus Implications The outbreak of coronavirus and related government containment measures worldwide has created an uncertain global environment for U.S. state and local governments and related entities. Fitch's ratings are forward-looking in nature, and Fitch will monitor the severity and duration of the budgetary impact on state and local governments and incorporate revised expectations for future performance and assessment of key risks. While the initial phase of economic recovery has been faster than expected, GDP in the U.S. is projected to remain below its 4Q19 level until at least 4Q21. In its baseline scenario, Fitch assumes continued strong GDP growth in 3Q20 followed by a slower recovery trajectory from 4Q20 onward amid persisting social distancing behavior and restrictions, high unemployment and a further pullback in private-sector investment. Additional details, including key assumptions and implications of the baseline scenario and a downside scenario, are described in the report entitled, "Fitch Ratings Coronavirus Scenarios: Baseline and Downside Cases - Update". Chester Community Charter School Coronavirus Update Following the statewide school closure orders in March and April, CCCS hired a Director of Virtual Learning and transitioned to a remote learning environment. The school purchased Chromebooks (allowing for a 1:1 student-device ratio), set-up mobile hotspots for those without access, and made several investments in virtual learning platforms and software. CCCS received $2.5 million from the Elementary and Secondary School Emergency Relief (ESSER) Education Stabilization Fund and $90,000 through the state's COVID-10 School Health and Safety grant program. Management reports that approximately $1.1 million of the combined federal and state funds they received have been spent. The school anticipates fiscal 2020 results to be on par with the enacted budget (assumed balance operations) and the school did not experience any abnormal enrollment changes as a result of the pandemic. The school's fiscal 2021 budget is balanced, with revenue growth predominately driven by increased revenue from federal sources and other funding sources related to the coronavirus. The state's 2020-2021 enacted budget holds basic education and special education funding flat from fiscal 2020, with allocations being identical to the prior year. As of August 2020, the school reports it has access to $15.6 million in unrestricted cash. Revenue Defensibility CCCS's midrange revenue defensibility reflects the school's strong enrollment growth, offset by limited demand flexibility and weak academic performance. Typical of the charter school sector, revenue defensibility is limited by the inability to control pricing as the school's main revenue source is derived from per pupil revenue from the sending districts. CCCS's academic results are weak compared to statewide averages. Despite the weaker academic performance, CCCS has had solid demand and enrollment growth. CCCS attracts students from about 10 different school districts including Philadelphia. CCCS enrolls the majority of K-8 students in CUSD. CCCS's solid demand is evidenced by growth in fall enrollment in 13 out of the last 14 academic years, including double-digit growth over academic years 2016-2017 and 2017-2018. An increase in out of district students from the Philadelphia area enrolling and the addition of a fourth facility (Aston Campus) in 2017, has driven the recent higher rate of growth. In March 2020, the U.S. Department of Education granted waivers to all 50 states that allow states to bypass all testing requirements included in the Every Student Succeeds Act for the 2019-2020 academic year. As a result, there were no statewide assessments administered in Pennsylvania. CCCS's fall 2019 enrollment was approximately 4,460 (a 3% increase year-over-year) and the school's 2021 budget assumes enrollment of an average daily attendance of 4,425 (on par with 2020) for the current 2020-2021 school year. On a combined basis, the school's four facilities have a capacity of over 4,800 students, allowing for some additional enrollment flexibility if needed. There are no charter caps or limits on the number of students that can be enrolled by CCCS. The ultimate impact of the coronavirus pandemic on school funding is ongoing and is likely to be to be affected as coronavirus mitigation efforts continue to impact state revenues. Over the longer term, Fitch expects per-pupil funding to grow at approximately the rate of inflation, consistent with school districts in the state. Operating Risk Fitch considers the school's operating risk profile to be midrange, based on its low fixed carrying costs and flexibility to control other expenditures. The school has well-identified cost drivers that have some potential volatility. Adequate expenditure flexibility is provided by management's strong degree of control in managing its workforce costs, which are not governed by collective bargaining agreements. However, practical limitations include the limited ability to reduce teacher headcount, since doing so could impair the school's already weak academic performance and potentially reduce student demand. Fitch recognizes that management can control salaries and reduce some other costs in a recessionary period, supporting the midrange operating risk assessment. A 2015 10-year settlement agreement among the PA Department of Education, the CUSD school board, the CUSD receiver, and CCCS establishes a minimum special education per-pupil funding (PPF) rate for CCCS from CUSD, held harmless in the event of future changes in state charter school laws. As part of the agreement, CCCS wrote off a $5.6 million tuition receivable from CUSD in fiscal 2015. Beginning in fiscal 2016, special education PPF payments are based on the regular education tuition rate that cannot fall below $27 thousand for each CCCS/CUSD special education student. While providing a stable funding floor, this represented a decline from the previous CUSD special education funding rate of $40 thousand per student and contributed to poor operating results in fiscal 2015 and 2016. However, fiscal 2017, 2018 and 2019 ended with positive operating results primarily because CCCS began waiving management fees in fiscal 2017. In the event CUSD's monthly PPF distributions are delayed, per PA Charter School Law, CCCS may request direct funding from the PA Department of Education (PDE). CCCS's fixed carrying costs for transactional maximum annual debt service and lease obligations are low, at less than 15% of total governmental expenditures. The school does not participate in a defined benefit pension plan. CCCS reports they will be making significant upgrades to their security and phone systems, as well as installing a new roof on the East C building. The security upgrades, which is the largest and most significant of these projects will be funded through a grant from the Pennsylvania Commission on Crime and Delinquency Agency. Financial Profile CCCS's leverage is consistent with a 'b' assessment given the school's midrange revenue defensibility and operating risk assessments. The 'b' financial profile assessment incorporates the school's volatile operating margins, slim unrestricted cash balances, and elevated leverage. Based on audited fiscal 2019 results, net debt to cash flow available for debt service (CFADS) was approximately 9.0x, primarily due to higher cash flow from the write-off of a portion of the management fee. However, if management fees were to be fully paid, the school's CFADS would have been significantly less, resulting in extremely high leverage metrics. Fitch's net debt calculation includes the principal amount outstanding on the 2010A bonds, the school's outstanding notes and capital leases, and CCCS's three facility-operating leases. Fitch capitalizes the operating lease charges using an 8.0x multiple to create a debt-equivalent figure. The 8.0x multiple reflects assets with a remaining useful life of 15 years in a 6% interest rate environment. In addition, Fitch assumes that the school's facility operating leases are renewed at expiration and continue through the life of the bonds. While the impact of the coronavirus pandemic on school funding continues to evolve, Pennsylvania's 2020-21 fiscal year enacted budget holds education funding flat from the prior year level for both regular and special education. As such, Fitch's base case scenario assumes flat revenue growth in year one. Given the uncertainty of the impact the coronavirus pandemic will have on state revenues, Fitch assumes state education funding will decline by 5% in year two, followed by gradual growth of around inflation in year three. Fitch assumes the school will also be able to control spending pressures and make moderate expenditure reductions to offset declines in state aid. In addition, Fitch's base case assumes the school will continue to require a portion of its management fee to be written off annually in order to maintain sufficient cash flow. The scenario assumes enrollment levels remain constant over the period. In this scenario, CCCS's net debt-to-CFADS remains elevated, although the magnitude depends on the amount of management fees that will be written off annually. Assuming no management fee write-off, unrestricted cash is quickly depleted as CFADS is not sufficient to cover annual lease-adjusted debt service. Fitch expects CCCS to continue to use management fee write-offs to support operations and fulfill annual lease obligation payments in the near term. Given the low rating level, Fitch does not believe a rating case would provide additional insight into the risk of default. Fitch believes the margin of safety remains satisfactory for a 'B-' rating given the demonstrated willingness of the management organization to waive a portion of the management fee in order to provide financial support. However, Fitch does not consider the waiver of management fees to be a sustainable solution over the long-term. Asymmetric Additional Risk Considerations Fitch views CCCS's liquidity as weak, with a ratio of unrestricted cash to annual governmental fund expenditures of only about 7% in fiscal 2019. Audited financials are not yet available but management reports that unrestricted cash levels improved over fiscal 2020 and total approximately $15.6 million as of August 2020. However, this amount is still less than 33% of annual expenditures. CCCS has relied on short-term borrowing to support cash flow timing mismatches during the fiscal year. In fiscal 2019, CCCS borrowed $7.5 million in revenue anticipation notes due to mature on June 30, 2019, with $2.5 million of the note principal repaid on Jan. 30, 2019. In May 2019, CCCS reached an extension agreement with noteholders to extend the maturity of the remaining $5.0 million to Dec. 31, 2019. In 2020, CCCS issued 10-year revenue notes in the amount of $7.5 million to repay the outstanding revenue anticipation notes. The borrowing amount was down from $30 million in fiscal 2016 and $16.3 million in fiscal 2017; these amounts were higher partially due to delayed state payments that resulted from a late state budget. Fitch views the school's use of short-term financing as part of the asymmetric risk since an inability to obtain financing could result in significant cash flow pressures and likely result in the depletion or near depletion of unrestricted liquid resources. CCCS has requested and received waivers from bondholders associated with violating its reserve and working capital financial covenants in fiscal 2016, 2017, 2018 and 2019. Management expects that it will not need to request a similar waiver for fiscal 2020. In addition to the sources of information identified in Fitch's applicable criteria specified, this action was informed by information from Lumesis. 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. FRONTIER COMMUNICATIONS: 5th Amended Plan Confirmed by Judge ------------------------------------------------------------ Judge Robert D. Drain has entered findings of fact, conclusions of law and order confirming the Fifth Amended Joint Plan of Reorganization of Frontier Communications Corporation and its Debtor Affiliates. The Debtors have proposed the Plan in good faith and not by any means forbidden by law. In determining that the Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases and the formulation of the Plan. The Plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtors' Estates and to effectuate a successful restructuring of the Debtors. The Plan was the product of extensive negotiations conducted at arm's length among the Debtors and their key stakeholders. The Plan's classification, indemnification, settlement, discharge, exculpation, release, and injunction provisions have been negotiated in good faith and at arm's length, are consistent with Sections 105, 1122, 1123(b)(6), 1129, and 1142 of the Bankruptcy Code, and are each necessary for the Debtors to consummate their value-maximizing Plan. Accordingly, the requirements of Section 1129(a)(3) of the Bankruptcy Code are satisfied. A full-text copy of the order dated August 27, 2020, is available at https://tinyurl.com/yxqnxn26 from PacerMonitor.com at no charge. The Debtors are represented by: Stephen E. Hessler, P.C Mark McKane, P.C. Patrick Vente KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 - and - Chad J. Husnick, P.C. Benjamin M. Rhode KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. 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. GENOCEA BIOSCIENCES: Incurs $4.5 Million Net Loss in Third Quarter ------------------------------------------------------------------ Genocea Biosciences, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $4.55 million on $453,000 of license revenue for the three months ended Sept. 30, 2020, compared to a net loss of $7.53 million on $0 of license revenue for the same period during the prior year. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $28.73 million on $1.36 million of license revenue compared to a net loss of $29.59 million on $0 of license revenue for the same period during the prior year. As of Sept. 30, 2020, the Company had $106.20 million in total assets, $85.99 million in total liabilities, and $20.20 million in total stockholders' equity. Net cash used in operating activities increased $3.3 million for the nine months ended Sept. 30, 2020 compared to the nine months ended Sept. 30, 2019. The increase in cash used in operations is attributed to an increase in our research and development expenses due to the advancement of GEN-009 and GEN-011. Net cash used by investing activities was for the purchases of property and equipment in both periods ending Sept. 30, 2020 and 2019, respectively. Net cash provided by financing activities increased $30.4 million for the nine months ended Sept. 30, 2020 compared to the nine months ended Sept. 30, 2019. In the nine months ended Sept. 30, 2020, the 2020 Private Placement generated net proceeds of $74.5 million, the Company sold shares of common stock to LPC for net proceeds of approximately $3.5 million and it sold shares under its ATM program and received net proceeds of approximately $2.7 million. In the nine months ended Sept. 30, 2019, the 2019 Private Placement generated net proceeds of $13.8 million and the 2019 Public Offering generated net proceeds of $38.4 million, offset by the repayment of long-term debt of $1.4 million. Genocea said, "We will need to obtain substantial additional funding in order to complete clinical trials and receive regulatory approval for GEN-009, GEN-011 and our other product candidates. To the extent that we raise additional capital through the sale of our common stock, convertible securities, or other equity securities, the ownership interests of our existing stockholders may be materially diluted and the terms of these securities could include liquidation or other preferences that could adversely affect the rights of our existing stockholders. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back, or discontinue the development of GEN-009, GEN-011 or our other product candidates, seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available, and relinquish or license, potentially on unfavorable terms, our rights to GEN-009, GEN-011 or our other product candidates that we otherwise would seek to develop or commercialize ourselves." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1457612/000145761220000170/gnca-20200930.htm About Genocea Biosciences Headquartered in Cambridge, Massachusetts, Genocea -- http://www.genocea.com-- is a biopharmaceutical company developing personalized cancer immunotherapies. The Company uses its proprietary discovery platform, ATLAS, to profile CD4+ and CD8+T cell (or cellular) immune responses to tumor antigens. Genocea reported a net loss of $38.95 million for the year ended Dec. 31, 2019, compared to a net loss of $27.81 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $40.52 million in total assets, $32.48 million in total liabilities, and $8.04 million in total stockholders' equity. Ernst & Young LLP, in Boston, Massachusetts, the Company's auditor since 2009, issued a "going concern" qualification in its report dated Feb. 13, 2020 citing that the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. GNC HOLDINGS: Completes Chapter 11 Plan Process ----------------------------------------------- GNC Holdings, LLC, a leading global health and wellness brand, on Oct. 30, 2020, announced that the previously confirmed Chapter 11 Plan of Reorganization of its predecessors has been consummated and became effective. Under the Plan, an appointed Plan Administrator will, among other things, wind-down the affairs of the remaining bankruptcy estates, pay allowed claims and resolve disputed claims, and make distributions to creditors in accordance with the terms of the Plan. Thereafter, the Plan Administrator will close any remaining bankruptcy cases, and dissolve and liquidate the remaining debtors in accordance with the Plan. This announcement follows the acquisition of substantially all of the Company's assets by Harbin Pharmaceutical Group Holding Co., Ltd. (Harbin) on October 7, 2020, marking GNC's next step in its brand evolution. Through the restructuring and court-approved sale to Harbin, GNC has optimized its store footprint, improved its financial standing and is now better positioned to meet the strong consumer demand for health and wellness products under Harbin's leadership. GNC will continue to advance its omnichannel and brand strategies, positioning the Company to provide innovative wellness solutions to customers, wherever they are, for the long term. The Chapter 11 Plan process and Harbin sale transaction provide GNC with the platform, capital structure, and opportunity to expand internationally and capitalize on the strong GNC brand in new markets around the globe. About GNC Holdings GNC Holdings Inc. -- http://www.gnc.com/-- is a global health and wellness brand with a diversified omni-channel business. In its stores and online, GNC Holdings sells an assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink, and other general merchandise, featuring innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC Holdings. GNC Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on June 23, 2020. The Debtors disclosed $1,415,957,000 in assets and $895,022,000 in liabilities as of March 31, 2020. Judge Karen B. Owens oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; Evercore Group, LLC as investment banker and financial advisor; FTI Consulting, Inc., as financial advisor; and Prime Clerk as claims and noticing agent. Torys LLP is the legal counsel in the Companies' Creditors Arrangement Act case. GNC HOLDINGS: Court Enters Plan Confirmation Order -------------------------------------------------- Judge Karen B. Owens on Oct. 14, 2020, entered findings of fact and an an order confirming the Seventh Joint Chapter 11 Plan of Reorganization of GNC Holdings Inc. and its affiliates. On Aug. 20, 2020, the Bankruptcy Court entered an order, which, among other things, approved the Disclosure Statement and set Oct. 14, 2020, as the hearing to consider confirmation of the Plan. On Sept. 18, 2020, the Court entered an order approving the $780 million sale of 1,400 of the Debtors' stores to Harbin Pharmaceutical Group Holding Co. The Debtors closed, on Oct. 7, 2020, the sale of substantially all their assets to Harbin. The Debtors filed, on Oct. 7, 2020, the Sixth Amended Joint Chapter 11 Plan of Reorganization. As set forth in the Plan, holders of claims in Classes 3 and 4 (the "Voting Classes") for each of the Debtors were eligible to vote on the Plan. I Subsequent to the filing of the Solicited Plan (Plan filed Aug. 20, 2020), the Debtors made certain modifications thereto, including to document the global settlement among the Debtors, the Buyer, the Ad Hoc Group of Crossover Lenders, the Committee, and the Ad Hoc Group of Convertible Notes (the "Global Settlement"), which required amendments to the Solicited Plan and is summarized in the Motion of Debtors for Order Approving (A) Global Settlement, (B) Stalking Horse Agreement Amendment, and (C) Plan Support Agreement [Docket No. 1235] and reflected in the Plan. The Debtors filed, on Oct. 13, 2020, the Seventh Amended Joint Chapter 11 Plan of Reorganization which includes modifications to the Solicited Plan related to the Global Settlement. A copy of the Seventh Amended Plan is available at: https://www.pacermonitor.com/view/UZ33DFQ/GNC_Holdings_Inc__debke-20-11662__1398.0.pdf?mcid=tGE4TAMA The Plan itself and the arms' length negotiations among the Debtors, the Consenting Creditors, the Committee, the Ad Hoc Group of Convertible Notes and the Debtors' other constituencies leading to the Plan’s formulation, as well as the overwhelming support of creditors for the Plan, provide independent evidence of the Debtors’ good faith in proposing the Plan. A copy of the Plan Confirmation Order is available at: https://cdn.pacermonitor.com/pdfserver/QAV4XGA/132998801/GNC_Holdings_Inc__debke-20-11662__1415.0.pdf About GNC Holdings GNC Holdings Inc. -- http://www.gnc.com/-- is a global health and wellness brand with a diversified omni-channel business. In its stores and online, GNC Holdings sells an assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink, and other general merchandise, featuring innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC Holdings. GNC Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on June 23, 2020. The Debtors disclosed $1,415,957,000 in assets and $895,022,000 in liabilities as of March 31, 2020. Judge Karen B. Owens oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; Evercore Group, LLC as investment banker and financial advisor; FTI Consulting, Inc., as financial advisor; and Prime Clerk as claims and noticing agent. Torys LLP is the legal counsel in the Companies' Creditors Arrangement Act case. GRADE A HOME: Delays Disclosures Hearing to Nov. 23 --------------------------------------------------- Judge Eduardo V. Rodriguez has previously ordered an Oct. 15, 2020 hearing to consider the approval of the Disclosure Statement of Grade A Home LLC. The Debtor's filed an emergency motion to continue the hearing. At the behest of the Debtor, the Court has entered an order continuing the hearing. The hearing on the Disclosure Statement as a result has been continued to Nov. 23, 2020, at 4:00 p.m. Grade A Home requested additional time to supplement its Chapter 11 Plan and Disclosure Statement in order to accurately depict its ability to fund the plan payments, and to ensure the plan will be feasible with its current financial conditions. Counsel for Grade A Home has been in contact with the office of the United States Trustee and counsel for Cohen Financial who are unopposed to the continuance. A full-text copy of the Plan of Reorganization and Disclosure Statement dated August 31, 2020, is available at https://tinyurl.com/y2yfx9ky from PacerMonitor.com at no charge. About Grade A Home Grade A Home, LLC, a privately held company in Houston, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31556) on March 2, 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 Eduardo V. Rodriguez oversees the case. The Debtor is represented by Corral Tran Singh, LLP. GULFPORT ENERGY: Lenders Extend Forbearance Period to Nov. 13 ------------------------------------------------------------- As previously disclosed, Gulfport Energy Corporation is party to that certain Amended and Restated Credit Agreement, dated as of Dec. 27, 2013, by and among the Company, as borrower, The Bank of Nova Scotia, as administrative agent, sole lead arranger and sole bookrunner, Amegy Bank National Association, as syndication agent, KeyBank National Association, as documentation agent, and the other lenders party thereto. On Oct. 26, 2020, the Company executed the Second Forbearance Agreement and Amendment to Amended and Restated Credit Agreement, which extends that certain First Forbearance Agreement and Amendment to Amended and Restated Credit Agreement, dated as of Oct. 26, 2020 among the Company, the Guarantors named therein, the lenders party thereto, each swap lender party thereto, each cash management party thereto and the Bank of Nova Scotia. Pursuant to the Second Forbearance Agreement, the Lender Parties have agreed to (i) temporarily waive any default in connection with the Specified Default prior to its occurrence without any further action, (ii) expand the definition of "Specified Default" to include the failure to make the interest payment that becomes due on Nov. 1, 2020 with respect to the 6.625% senior unsecured notes due 2023 while the Company continues ongoing constructive discussions with its lenders and certain other stakeholders regarding a potential comprehensive financial restructuring to strengthen the Company's balance sheet and financial position; and (iii) extend their agreement to forbear from exercising certain of their default-related rights and remedies against the Company and the other Loan Parties with respect to any default in connection with the Specified Default, in each case, until the earlier of Nov. 13, 2020 or another event that would trigger the end of the forbearance period. In addition, pursuant to the Second Forbearance Agreement, the Credit Agreement was amended to modify the anti-cash hoarding provisions. About Gulfport Gulfport Energy Corporation (NASDAQ: GPOR) -- http://www.gulfportenergy.com-- is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and a producer of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds non-core assets that include an approximately 22% equity interest in Mammoth Energy Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. Gulfport Energy reported net loss of $2.0 billion for the year ended Dec. 31, 2019 as compared to net income of $430.6 million for the year ended Dec. 31, 2018. As of June 30, 2020, Gulfport had $2.58 billion in total assets, $2.35 billion in total liabilities, and $231.34 million in total stockholders' equity. * * * As reported by the TCR on Oct. 21, 2020, S&P Global Ratings lowered its issuer credit rating on U.S.-based exploration and production company Gulfport Energy Corp. to 'D' from 'CCC-'. The downgrade reflects Gulfport's decision to not make the Oct. 15, 2020, interest payment on its 6% senior unsecured notes due Oct. 15, 2024. As reported by the TCR on March 4, 2020, Moody's Investors Service downgraded Gulfport Energy Corporation's Corporate Family Rating to Caa1 from B2. "The downgrade reflects rising financial risks amid low natural gas prices and limited hedging protection in place for Gulfport in 2020. This required the company to significantly reduce investment and allow production to fall significantly in 2020 in order to avoid new borrowings," commented Elena Nadtotchi, Moody's vice president - senior credit officer. HALLIBURTON COMPANY: Egan-Jones Lowers Unsecured Debt Ratings to B ------------------------------------------------------------------ Egan-Jones Ratings Company, on October 21, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Halliburton Company to B from BB-. EJR also downgraded the rating on commercial paper issued by the Company to B from A3. Headquartered in Houston, Texas, Halliburton is one of the world's largest providers of products and services to the energy industry. HAWAIIAN AIRLINES: Fitch Lowers Series 2020-1 Cl. B Certs to BB- ---------------------------------------------------------------- Fitch has downgraded multiple tranches of Hawaiian Airlines' enhanced equipment trust certificates (EETCs). The Hawaiian Airlines Pass through Certificates Series 2020-1 class B certificates have been downgraded to 'BB-' from 'BB+'. The Hawaiian Airlines 2013-1 Class A certificates have been downgraded to 'BB' from 'BBB-', and the class B certificates have been downgraded to 'BB-' from 'BB+'. Fitch has affirmed the Hawaiian Airlines 2020-1 class A certificates at 'A-'. The rating actions are being driven by the combined effects of Fitch's recent downgrade of Hawaiian's Issuer Default Rating (IDR) to 'B-' from 'B+', increased value stress assumptions utilized in Fitch's models, which reflect the ongoing pressure on the airline industry, and updated appraisal values that show declining levels of overcollateralization for certain transactions. The HA 2020-1 senior tranche rating has been affirmed at 'A-', reflecting strong levels of overcollateralization and attractive underlying collateral that continue to support the existing rating. KEY RATING DRIVERS HA 2020-1 Class A Certificates: Fitch has affirmed Hawaiian's 2020-1 class A certificates at 'A-'. The ratings on the class A certificates are driven by a top-down analysis incorporating a series of stress tests that simulate the rejection and repossession of the aircraft in a severe aviation downturn. The 'A-' rating on the senior certificates is supported by overcollateralization (OC) sufficient for the tranche to pass Fitch's 'A' level stress scenario and high-quality collateral supporting Fitch's expectations that senior tranche holders should receive full principal recovery prior to default, even in a severe stress scenario. This level of OC provides a sufficient amount of protection for the senior tranche holders. Fitch's maximum stress case LTV using its 'A' stress scenario is 84.1% when stresses are applied one year in the future. The HA 2020-1 transaction features a shorter tenor and weighted average life than most comparable EETC transactions. The senior certificates have a 7.1-year tenor and a WAL of 4.5 years, compared to many EETCs that are structured with a 12-year tenor and nine-year WAL. The shorter average life leads the transaction to de-lever quickly through its forecast period. The balloon payment for this transaction is relatively small, at 25.3% of the original principal balance which compares to the 35-45% range that is typical for many similar transactions. HA 2013-1 Class A Certificates: Fitch has downgraded Hawaiian's 2013-1 class A certificates to 'BB' from 'BBB-'. The rating action is driven by the recent two notch downgrade of Hawaiian's IDR to 'B-' from 'B+'. The sharp decline in appraised values for the A330-200 over the past year has caused the transaction to fail to pass Fitch's 'A' or 'BBB' level stress test. In such cases Fitch's EETC criteria state that the rating achieved through the bottom-up approach can act as a ratings floor. The 'BB' rating represents a four-notch uplift, driven by a medium/high affirmation factor, presence of a liquidity facility and solid recovery prospects. HA 2013-1 and HA 2020-1 Class B Certificates: Fitch has downgraded Hawaiian's B tranches to 'BB-' in line with the recent downgrade of Hawaiian's corporate rating to 'B-' from 'B+'. Notching consists of +2 notches for the affirmation factor (maximum is +3 for a 'B' category issuer) and +1 notch for the presence of a liquidity facility. The class B certificate ratings are based on Fitch's bottom-up approach which notches the class B ratings off of the underlying airline rating. Subordinated tranches receive notching uplift based on three factors, 1) affirmation factor (0-3 notches for airlines rated in the 'B' category), 2) benefit of a liquidity facility (+1 notch), and 3) recovery prospects in a 'B' stress scenario (typically 0-1 notches for class B certificates). HA 2020-1 PIK Interest Feature: Both tranches in the HA 2020-1 transaction incorporate a PIK feature in place of a standard liquidity facility. Even though PIK Interest defers delinquent interest payments until the underlying aircraft are remarketed and monetized, Fitch views it as roughly equivalents to the credit protection provided by a typical LF for the senior tranche. However, the PIK feature is less favorable to creditors due to the cash flow implications during the deferred payment period. The inclusion of the PIK feature does negatively weigh on the senior tranche rating outcome. There is also an 'A' rating cap for transactions that feature a PIK. The PIK Interest feature may slightly reduce recovery prospects for subordinated tranches in an EETC transaction. A typical EETC waterfall contemplates a priority of interest payments ahead of principal payments. The PIK feature shifts the priority of payments by converting interest payments to principal during the deferral period, thereby resulting in potentially lower recovery prospects for the subordinated tranches. Hence, Fitch views PIK Interest as slightly credit negative for the subordinated tranches and will analyze recovery prospects for these tranches accordingly. In addition, Fitch generally considers a PIK feature to be qualitatively less favorable than cash servicing instruments; this qualitative perspective can result in lower ratings than would be achieved with more traditional structures that utilize liquidity facilities. Affirmation Factor Fitch considers the affirmation factor for both pools of aircraft to be moderate/high as both the A330-200 and A321NEO make up a significant portion of Hawaiian's fleet, making it unlikely that the aircraft in either pool would be rejected in the case of a bankruptcy. For the HA 2020-1 transaction, the eight aircraft make up 17% of Hawaiian's owned fleet. The six A321NEO account for 43% of Hawaiian's owned A321NEO fleet (6 of 14). Fitch considers the A321NEO a strong tier 1 aircraft that has been integral to allowing HA to initiate service to mid-sized routes on the U.S. West Coast that are too small to support service with A330 fleet and broaden service from Maui Hub to key cities on the West Coast. The A330-200 aircraft in the transaction account for 17% of Hawaiian's owned A330 fleet (2 of 12) and 50% of Hawaiian's owned A330 fleet (6 of 12) for both the HA 2020-1 transaction and the HA 2013-1 transaction, respectively. Hawaiian retired the last of its 767s in the first quarter of 2019 meaning that the A330 is the only aircraft in its fleet that can serve Asia and Australia. Additionally, Hawaiian has illustrated the importance of widebody aircraft to its business plan through previous downturns. The widebody 767s were an important part of the fleet even through Hawaiian's bankruptcy in 2003 and long-haul routes consistently provide roughly two-thirds of Hawaiian's revenue. The affirmation factor is also being negatively affected by HA's plan to bring in 10 Boeing 787-9 "Dreamliner" aircraft with purchase rights for an additional 10 aircraft with scheduled deliveries starting in late 2022. These fuel-efficient, long-range aircraft will compete with, and are a stronger substitute to, existing A330-200 aircraft. Additionally, A330-200 values have come under increased pressure as long-haul travel has effectively stalled due to the coronavirus. Assuming the company were to cut long-haul capacity in the event of a restructuring it would be more likely to reject its leased A330s, since Hawaiian has no equity in those planes and the cost of financing is likely higher. As of June 30, 2020, Hawaiian operated 12 A330s under operating leases. DERIVATION SUMMARY The 'A-' rating on the HA 2020-1 class A certificates is one notch below the rating on many comparable class A certificates issued by other airlines. The one notch differential is driven by the inclusion of A330 aircraft in the transaction, the uncertainty surrounding aircraft valuations, high coupon, and HA's low corporate credit rating relative to other airlines. The 'BB-' rating on the class B certificates represents a three-notch uplift from Hawaiian's IDR of 'B-' (maximum uplift is five notches). The rating is in line with the B tranche ratings of certain American Airlines class B certificates, which Fitch views as having similar affirmation factors and recovery prospects. American Airlines is also rated 'B-'. The class B certificates are rated one notch below certain class B certificates in certain other American airlines EETCs where recovery prospects are higher. KEY ASSUMPTIONS Key assumptions within the rating case for the issuer include a harsh downside scenario in which Hawaiian declares bankruptcy, chooses to reject the collateral aircraft, and where the aircraft are remarketed in the midst of a severe slump in aircraft values. A Hawaiian Airlines bankruptcy is hypothetical, and is not Fitch's current expectation as reflected in Hawaiian's 'B-' IDR. Fitch's models also incorporate a full draw on liquidity facilities and include assumptions for repossession and remarketing costs. Fitch's models incorporate a 20% 'A' level value stress for Hawaiian's A321 NEOs and a 40% stress for the A330s. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: The HA 2020-1 class A certificates are primarily based on a top-down analysis based on the value of the collateral. Positive rating actions are unlikely in the near-term due to current pressures on aircraft values related to coronavirus. Subordinated tranches and the HA 2013-1 class A certificates are linked to Hawaiian Airlines' corporate rating. Positive actions are unlikely in the near term. Factors that could, individually or collectively, lead to negative rating action/downgrade: The HA 2020-1 class A certificates could see negative rating action driven by greater than expected decline in collateral values. The senior tranche ratings could also be affected by a perceived change in the affirmation factor or deterioration in the underlying airline credit. Subordinated tranche ratings and the HA 2013-1 class A certificates are based off of the underlying airline IDR. Fitch will downgrade in line with any future downgrades of Hawaiian Airlines' ratings. Subordinate tranches are also subject to changes in Fitch's view of the likelihood of affirmation for the underlying collateral. LIQUIDITY AND DEBT STRUCTURE HA 2020-1: Both classes of certificates benefit from PIK features that cover up to 18 months of missed interest payments. HA 2013-1: Both classes of certificates feature an 18-month liquidity facility provided by Natixis (A+/F1/Outlook Negative). HENG CHEONG: Ruling on $1.5M Sale of Rivercliff Property Deferred ----------------------------------------------------------------- Judge Brian K. Tester of the U.S. Bankruptcy Court for the District of Puerto Rico deffered ruling on the proposed sale by Cosimo Borrelli and Meade Malone, as foreign representatives of Heng Cheong Pacific Limited, World-Wide Investment Services Limited, and New Century Properties Limited, of the real property located at 35701 NE Chamberlain Road, Corbett, Oregon, with legal description Sec 27 1N 4E, TL 400 47.73 Acres Property ID# R32230, to Masayuki Yamakawa and/or assigns for $1.525 million, cash. A hearing on the Motion was held on Sept. 29, 2020 at 9:30 a.m. To the extent not otherwise addressed by the relief awarded by the Order, the Court deferred ruling on the merits of both the Stay Relief Motion and Motion to Sell because of the pending issues associated with whether the Rivercliff Property constitutes property of Borrelli and Malone, as the Foreign Representatives in these Chapter 15 cases. The United States and the Foreign Representatives and in agreement the Rivercliff Property should be sold. Pillar Properties, LLC, the Receiver, a licensed real estate broker in Oregon and the court-appointed receiver in United States v. Rivercliff Farm, Inc., et al., No. 3:16-cv- 01248-SI (D. Or.) will be tasked with soliciting offers for the Rivercliff Property. The Receiver will list the Rivercliff Property for sale in the Oregon real estate market and solicit offers and receive offers on the Rivercliff Property for four consecutive weeks in order to obtain the highest and best offer. Any offer that is submitted will be shared promptly with the United States and the Foreign Representatives. Any offer submitted by a real estate broker will be considered with the broker's reasonable commission being honored, alongside any offers submitted without a broker. The third-party buyers whose July 30, 2020 offer was previously attached to the Stay Relief Motion and the Motion to Sell will be given an opportunity to submit a revised offer for consideration. Yamawaka, whose Sept. 6, 2020 offer was previously attached to the Motion to Sell, will also be given an opportunity to submit a revised offer for consideration. The Receiver, the United States, and the Foreign Representatives will review all offers received in order to determine the highest and best offer, taking into account at least the following list of factors: (i) price, (ii) any contingencies, (iii) cash/financing components, (iv) any necessary commission, and (v) net proceeds from such sale. Both the United States and the Foreign Representative may depose any of the prospective buyers who have submitted an offer -- including Yamakawa -- to inquire into the full terms of their offer, as well as any modifications to an initial offer, and to determine whether their offer is in good faith, consistent with applicable law. The deposition of Yamakawa may be combined with his Fed. R. Bankr. P. 2004 examination that has been authorized by the Court. After four consecutive weeks of soliciting offers, the Receiver, the United States, and the Foreign Representatives will review the pending offers and they will either agree as to the highest and best offer or submit multiple offers to this Court to review and approve. If Multiple offers are submitted to the Court, then after notice to all parties in interest and all buyers who have submitted offers, the Court will hold a hearing and conduct an auction of the Rivercliff Property. The Court, either by agreement of the Receiver, the United States, and the Foreign Representatives, or at a hearing set on notice, will approve the highest and best bid, along with a backup bidder (if appropriate), after evaluating the terms of each bidder's offer and whether it was submitted in good faith. It will approve a sale of the Rivercliff Property with the gross sales proceeds to be deposited into and held by it in its registry, pending its further Order. The Receiver may file an appropriate application for fees, costs, or commissions incurred in connection with the sale, subject to notice and an opportunity for hearing on any objections to the same as well as Court approval for reasonableness. The Court made no ruling on right, entitlement or reasonableness of the same. The Foreign Representatives may file an appropriate application for fees or costs incurred in connection with the sale, subject to notice and an opportunity for hearing on any objections to the same as well as Court approval for reasonableness. The Court made no ruling on right, entitlement or reasonableness of the same. The sale of the Rivercliff Property, along with any attendant actions, may proceed immediately as of the entry of the Order. The 14-day stay normally afforded by Fed. R. Bankr. P. 6004(h), or any other similar provision, will not apply to the sale of the Rivercliff Property as authorized by the Order. On Aug. 26, 2019, Creditors Masayuki Yamakawa, BioReplace Corp., Synapse Investment, Ltd., and Megumi Matsuzawa, filed three involuntary petitions under Chapter 7 of the U.S. Bankruptcy Code with the Court. The Court administratively consolidated all three Involuntary Petitions, Heng Cheong Pacific Limited (Bankr. D. P.R. Case No. 3:19-bk-04895-BKT15), World-Wide Investment Services Limited (Bankr. D. P.R. Case No. 3:19-bk-04898-BKT15), New Century Properties Limited (Bankr. D. P.R. Case No. 3:19-bk-04897-BKT15) under one case style (Bankr. D. P.R. Case No. 2:19-bk-04895-BKT7) on Sept. 27, 2019. On Oct. 22, 2019, the British Virgin Islands Court appointed Cosimo Borrelli and Meade Malone as Foreign Representatives. On March 5, 2020, the Court converted the jointly-administered cases to cases under Chapter 15 of the Bankruptcy Code. HENRY FORD VILLAGE: Searches for Buyer for Facility --------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that the Henry Ford Village, a bankrupt continuing care retirement community in Dearborn, Mich., intends to sell the 1,083-bed facility to pay off its debts. A sale process "is the current anticipated plan" for restructuring under Chapter 11, Henry Ford Village's attorney, Sheryl L. Toby of Dykema Gossett PLLC, said Friday, October 30,2020, at the nonprofit's first day hearing in the U.S. Bankruptcy Court for the Eastern District of Michigan. The continuing care community filed for bankruptcy Thursday, October 29, 2020, triggered in part by a $800,000 payment due in settlement of a class action. About Henry Ford Village Henry Ford Village, Inc. -- https://henryfordvillage.com/ -- is a not for profit, non-stock corporation established to operate a continuing care retirement community located at 15101 Ford Road, Dearborn, Michigan. The Debtor provides senior living services comprised of 853 independent living units, 96 assisted living unites and 89 skilled nursing beds. Henry Ford Village, Inc., sought Chapter 11 protection (Bankr. E.D. Mich. Case No. 20-51066) on Oct. 28, 2020. In the petition signed by CRO Chad Shandler, Henry Ford Village was estimated to have $50 million to $100 million in assets and $100 million to $500 million in liabilities. The Hon. Mark A. Randon is the case judge. DYKEMA GOSSETT PLLC, led by Sheryl Toby, is the Debtor's counsel. FTI CONSULTING, INC., is the financial advisor. KURTZMAN CARSON CONSULTANTS, LLC, is the claims agent. HERTZ GLOBAL: Delisted by the NYSE As It Struggles to Survive ------------------------------------------------------------- Laura Layden of Fort Myers News-Press reports that Hertz can no longer be found on the New York Stock Exchange. Trading for shares in its financially troubled parent company, Estero-based Hertz Global Holdings, has ended on the world's largest exchange. Company shares traded on the exchange for the last time Thursday, closing up 3 cents at $1.78, on higher-than-usual volume. In a news release, the New York Stock Exchange announced that it suspended trading on the rental car company's shares after a review committee upheld an earlier decision by its staff to delist the stock. Staff found Hertz's stock was "no longer suitable for listing" on the exchange in May after the company filed for bankruptcy protection. In case you missed it:Hertz secures new financing to steer it out of bankruptcy More:'Offensive.' Bankruptcy judge rejects Hertz employee incentive plans, executives would get second bonuses In a news release, however, the company announced its shares can now be found on the over-the-counter market, under a new symbol: HTZGQ. The market — also known as the pink sheets — is designed for smaller companies, with fewer regulations. It's for companies with so-called penny stocks, or stocks that trade for less than five dollars per share. The new listing on the Over-the-Counter Bulletin Board makes the risks involved in buying the stock known, stating: "Warning! This company is in bankruptcy!" Hertz challenged the New York Stock Exchange staff's decision to delist its stock, which spurred a review by a special committee — and allowed company shares to continue trading on the exchange for months, while the review was in process. The New York Stock Exchange began delisting proceedings on May 26, a few days after Hertz Global filed for Chapter 11 bankruptcy protection. At the time, the exchange said it took the action because of uncertainty over the bankruptcy filing's effect on the value of the company’s common stock. On June 12,2020, the exchange announced Hertz had requested a review of its decision, putting the delisting in limbo. Hertz Corp., which has its headquarters in Estero, is facing a lawsuit over unpaid overtime. Brianne Gale, a former manager associate for the car rental giant in Pinellas County, has filed a collective action against the company in U.S. District Court in Tampa. With the review committee's work done, the exchange said it would now file a delisting application with the U.S. Securities and Exchange Commission. More:Hertz reports huge second-quarter losses amid coronavirus pandemic In case you missed it:Ex-CEO of Hertz agrees to pay back nearly $2 million in compensation after charges filed. The continued trading of Hertz's shares has raised some eyebrows, due to its financial woes. In June 2020, the Securities and Exchange Commission halted the trading of Hertz's stock two days in a row, raising concerns about the cash-strapped company's sale of more stock. As a result, Hertz nixed its plans to sell up to $500 million in new shares, but not before selling $29 million worth. The decision to end the sale of new shares came a day after SEC Chairman Jay Clayton told CNBC that the company went ahead with the risky stock offering despite his regulatory agency's concerns. Since Hertz's bankruptcy filing, company shares have been volatile. In regulatory filings, Hertz has repeatedly warned that its shares could become "worthless" in the Chapter 11 bankruptcy process and raised doubts about its ability to continue as a "going concern." The company has taken a huge financial blow from the coronavirus pandemic — and continues to suffer from it. At the time of its Chapter 11 filings, the company had nearly $20 billion in debt. The Hertz headquaretrs in Estero. After the earnings announcement, its shares declined more than 30 percent in after market trading. Earlier this month, Hertz Global announced it had received commitments for $1.65 billion in new financing to drive itself out of bankruptcy. Hertz announced it would move its global headquarters from New Jersey to Estero in May 2013. The decision by the then-Fortune 500 company followed its acquisition of the Dollar Thrifty Automotive Group. Hertz's new multimillion-dollar headquarters opened in 2015. Since the move, the company has traveled a bumpy road that has included an accounting scandal and the resignation of three CEOs. In July 2015, Hertz had to restate its earnings results for 2012 and 2013, as well as some results for 2011. Just as it appeared the company had turned the corner on an ambitious turnaround plan, the coronavirus pandemic hit in March, stopping the rental car giant in its tracks. Hertz lost most of its revenue when travel shut down due to COVID-19. The company has taken many steps to preserve its cash and cut its costs, including reducing its capital spending, canceling new fleet orders and shrinking its employee count. In late April 2020, Hertz announced 10,000 layoffs across its North America operations after most of the job cuts had already happened, including ones at its local headquarters. As tourism continued to suffer, the number of layoffs and furloughs grew to 20,000 employees, or more than half of Hertz's entire workforce. Before the pandemic hit, the company had roughly 38,000 employees worldwide, with about 1,100 of them based in Southwest Florida. About Hertz Global Holdings Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. The Company also operates a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court (Bankr. D. Del. Case No. 20-11218). The Hon. Mary F. Walrath is the presiding judge. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor. Richards, Layton & Finger, P.A., is the local counsel. Prime Clerk LLC is the claims agent, maintaining the page https://restructuring.primeclerk.com/hertz HILL CONCRETE: Court Confirms Plan Over the Line's Objections ------------------------------------------------------------- Judge Mark S. Wallace entered findings of fact, conclusions of law, and order in support of confirmation of Second Amended Chapter 11 Plan of Reorganization of Hill Concrete Structures. The general unsecured creditors in the case, and every creditor in the case will receive at least the same as if this case were converted to one under Chapter 7. Therefore, the Plan satisfies the requirements of Section 1129(a)(7) of the Bankruptcy Code. As reflected in the Plan and Disclosure Statement, there were thirteen (13) classes of claims eligible to vote on the Plan: Class 2D, Class 2E, Class 2F, Class 2G, Class 2H, Class 2I, Class 2J, Class 4A, Class 4B, Class 4C, Class 5, Class 8. Classes 4A, 4B, and 4C have all voted to accept the Plan. None of the secured classes voted-- Class 2D, Class 2E, Class 2F, Class 2G, Class 2H, Class 2I, Class 2J- - but all of them are paid in full in the plan. Class 6 members do not have allowed claims and are therefore not permitted to vote. Class 8 has already been paid in full, is not affected in any way by the plan and are therefore presumed to have accepted the plan under 11 U.S.C. 1126(f). There were no ballots cast rejecting the plan. A late ballot was received by the balloting agent for Class 5 that was also in favor of confirmation of the Chapter 11 Plan, and if it had been allowed, would have been the fourth class of creditors to accept the plan. Because at least three impaired classes, representing $1,054,889.27 of debt, voted to accept the plan, the Debtor sought confirmation of the Plan pursuant to the "cram down" provisions of Bankruptcy Code Section 1129(b)(1) and (2). There was one objection to the plan filed by The Line SA Investors, LLC ("The Line"). The Debtor in this case is a concrete contractor of large commercial construction contracts. The basis of the objection from The Line was that the Debtor's proposed plan may not be feasible because The Line is disputing payment to the general contractor on a job for which the Debtor had performed work and was expecting a large payment to fund the Plan. The Debtor responded to the objection by stating that The Line was not a creditor or interest holder in the case, and thus did not have standing to object to confirmation of the Plan. Additionally, the Plan contains provisions that convert the reorganization plan to more of a liquidating plan if funding is not realized, making a feasibility objection improper. The objection raised by The Line does not merit not confirming the Plan. Instead, the Court finds that the Debtor's plan does conform to the requirements of Title 11 of the United States Code for confirmation of a Chapter 11 plan in all regards, including feasibility, due to the liquidating provisions that are incorporated into the plan. The Line's objection was therefore overruled, and the Plan confirmed. There were 13 classes of claims eligible to vote on the Plan: Class 2D, Class 2E, Class 2F, Class 2G, Class 2H, Class 2I, Class 2J, Class 4A, Class 4B, Class 4C, Class 5, Class 8. Classes 4A, 4B, and 4C have all voted to accept the Plan. None of the secured classes voted-- Class 2D, Class 2E, Class 2F, Class 2G, Class 2H, Class 2I, Class 2J-- but all of them are paid in full in the plan. Class 6 members do not have allowed claims and are therefore not permitted to vote. Class 8 has already been paid in full, is not affected in any way by the plan and are therefore presumed to have accepted the plan under 11 U.S.C. 1126(f). There were no ballots cast rejecting the plan. A late ballot was received by the balloting agent for Class 5 that was also in favor of confirmation of the Chapter 11 Plan, and if it had been allowed, would have been the fourth class of creditors to accept the plan. The Court finds that the Plan meets the “cram-down” requirements of Section 1129(b)(1) and (2) finding that the Plan does not discriminate unfairly and is fair and equitable with respect to each Class in the Plan. Attorney for Debtor / Debtor in Possession: Michael Jones, California Bar # 271574 M. Jones & Associates, PC 505 N Tustin Ave, Ste 105 Santa Ana, California 92705 Telephone: (714) 795-2346 Facsimile: (888) 341-5213 E-mail: mike@MJonesOC.com About Hill Concrete Structures Hill Concrete Structures is a privately held company in La Verne, CA, that offers concrete and cinder building products. Hill Concrete Structures sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 19-10212) on Jan. 21, 2019. The case is assigned to Mark S. Wallace. In the petition signed by James A. Hill, president, the Debtor disclosed total assets at $997,122 and $1,964,669 in debt. The Debtor tapped Michael Jones, Esq., at M Jones & Associates, PC, as counsel. HOUSTON GRANITE: Wins Approval of Chapter 11 Plan ------------------------------------------------- Judge David R. Jones on Oct. 9, 2020 entered an order confirming the Chapter 11 Plan of Houston Granite and Marble Center LLC On August 28, 2020, Judge David R. Jones conditionally approved the Disclosure Statement and set an Oct. 6 hearing on the Plan. As set forth in the Ballot Summary, Class 7 (Allowed General Unsecured Claims - Factoring Lenders) and Class 8 (Allowed General Unsecured Claims - Vendors) were solicited. Class 8 voted to accept the Plan. Class 7 did not vote on the Plan. A confirmation hearing on the Plan was called and held by the Court on Oct. 6. According to the Plan Confirmation Order, the deadline for filing proofs of claim was Jan. 27, 2020. Any proof of claim filed after January 27, 2020, shall be of no force and effect, shall be deemed disallowed, and will not require objection. Any and all objections to confirmation of the Plan that have not been withdrawn or are not cured, are hereby overruled and denied, and all withdrawn objections are hereby deemed withdrawn, with prejudice subject to the agreements among the Debtor, Harris County, and the Texas Comptroller of Public Accounts on treatment and payment of their respective claims as follows: (a) Secured Claims of Texas Comptroller of Public Accounts and the Texas Workforce Commission-Notwithstanding anything to the contrary in the Plan or this Confirmation Order, the Texas Comptroller of Public Accounts (the "Comptroller") is the holder of a pre-petition claim for franchise and sales taxes in the amount of $97,773.06, and the Texas Workforce Commission (the "TWC") is the holder of a pre-petition claim for unemployment taxes in the amount of $15,196.88.The Debtor shall pay the Texas Comptroller and the TWC's pre-petition claims in equal monthly payments plus statutory interest with such interest beginning on the petition date and continuing until the Texas Comptroller and the TWC's claims are paid in full. The Texas Comptroller and the TWC shall retain any statutory liens securing their respective prepetition claims, if applicable, and postpetition taxes, until such time as the Allowed amount of such pre-petition tax claims and postpetition taxes is paid in full. The Texas Comptroller reserves the right to assert the following: (1) any statutory or common law setoff rights of the Comptroller in accordance with 11 U.S.C. Sec. 553; (2) any rights of the Comptroller to pursue any non-debtor third parties for tax debts or claims; (3) the payment of interest on the Comptroller's administrative expense tax claims, if any; (4) to the extent that interest is payable with respect to any administrative expense, priority or secured tax claim of the Comptroller, the statutory rate of interest pursuant to Texas Tax Code 111.060; and (5) the Comptroller is not required to file a motion or application for payment of administrative expense claims pursuant to 11 U.S.C. Sec. 503(b)(1)(D) and such post-petition tax claim(s) may instead be paid as and when they arise in the ordinary course of the Debtors' business. All rights of the Debtor to dispute any assertions by the Comptroller as indicated above are reserved. In the event of any failure of the reorganized debtor to timely make it required plan payments to the Comptroller or the TWCor any failure to pay post-petition franchise or sales taxes owed to the Comptroller or the TWC prior to delinquency, either of which shall constitute an event of default under the Plan as to the Comptroller or the TWC, the Comptroller or TWC shall send notice of such default to the reorganized debtor. If the default is not cured within 20 days of the date of such notice, the Comptroller or TWC may proceed to collect all amounts owed pursuant to state law without further order of the Bankruptcy Court. The Comptroller or TWC arerequired to send two (2) notices of default, and upon the third event of default, the Comptroller or TWC may proceed to collect all amounts owed under state law without further order of the Bankruptcy and without further notice. (b) Secured Claim of Harris County - Notwithstanding any other provisions contained herein, Harris County is the holder of a pre-petition claim for ad valorem personal property taxes for tax year 2019, as well as an administrative expense claim for the 2020 ad valorem taxes. The Debtor shall pay the 2020 taxes in the ordinary course of business pursuant to applicable non-bankruptcy law. In the event the 2020 taxes are not paid prior to the state law delinquency date, penalties and interest will accrue until the taxes are paid in full. It is not necessary that Harris County file an administrative expense claim or request for payment in order for the 2020 taxes to be deemed an allowed administrative expense. The administrative expense taxes are not discharged by entry of the confirmation order. The Debtor shall pay Harris County's pre-petition claim in equal monthly payments plus statutory interest with such interest beginning on the petition date and continuing until Harris County's prepetition claim is paid in full. Commencing on the Effective Date, the first six monthly installments will be interest only payments and thereafter payments will include principal and interest with all payments being made within 5 years of the Effective Date. The monthly payment will be $662.03 for months 1 through 6 and $1,918 commencing in month 7 until paid in full. Harris County shall retain its liens for pre-and post-petition taxes with the same validity, extent and priority until all taxes and related interest, penalties, and fees (if any) have been paid in full. In the event of a default under the plan, Harris County shall send notice of default to the Debtor and counsel for the Debtor via first class mail or electronic mail, and the Debtor shall have 15 days from the date of such notice to cure said default. In the event of failure to cure the default timely, Harris County shall be entitled to pursue collection of all amounts owed pursuant to applicable non-bankruptcy law without further recourse to the Bankruptcy Court. Harris County shall only be required to send two notices of default; upon a third event of default, Harris County may proceed to collect all amounts owed pursuant to applicable non-bankruptcy law without further notice. A full-text copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/HQJGJ3I/Houston_Granite_and_Marble_Center__txsbke-19-35315__0142.0.pdf?mcid=tGE4TAMA About Houston Granite Houston Granite and Marble Center LLC, a supplier of granite, marble and other natural stone products, sought Chapter 11 protection (Bankr. S.D. Texas Case No. 19-35315) on Sept. 24, 2019. The company first filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 16-31994) on April 16, 2016. In the petition signed by John Sykoudis, member, Houston Granite was estimated to have assets between $1 million and $10 million and liabilities of the same range. Judge David R. Jones oversees the case. Cage, Hill Niehaus LLP is the Debtor's legal counsel. IMERYS TALC: Wins Court OK for $223M Magris Stalking Horse Bid -------------------------------------------------------------- Law360 reports that a Delaware bankruptcy judge has given her approval for a $223 million stalking horse bid for the assets of talc supplier Imerys Talc America from Canadian mining investment company Magris Resources. U.S. Bankruptcy Judge Laurie Selber Silverstein issued an order Thursday, October 29, 2020, approving the bid by Magris Resources Canada Inc. and the proposed bid protections after Imerys said it had received no objections to the proposal. Toronto-based Magris and Imerys announced they had reached an agreement on the bid two weeks ago. About Imerys Talc America Imerys Talc and its subsidiaries--https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent. INTEGRATED DENTAL: Sets Bidding Procedures for All Assets --------------------------------------------------------- Integrated Dental Systems, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey to authorize the bidding procedures in connection with the sale of substantially all assets to Biotech Dental, LLC, in accordance with the terms of their Asset Purchase Agreement dated as of Oct. 16, 2020, for $3.2 million, subject to adjustment, subject to overbid. The Debtor's proposed investment banker, Three Twenty-One Capital Partners, was retained on July 24, 2020. Upon its retention, 3-21 took immediate action to conduct a broad, robust and fair marketing process. To date, 29 non-disclosure agreements have been executed by parties potentially interested in acquiring the Debtor's assets, including the Stalking Horse Bidder. The Debtor believes that the transaction negotiated with the Stalking Horse Bidder is fair, reasonable, and represents the highest and best offer available to the Debtor at this time, subject to higher and better offers received during the auction and sale process contemplated by the Bidding Procedures. In this regard, 3-21 continues to work to attract overbids and will continue to market the Debtor's assets to promote a robust, value-maximizing auction process. The Stalking Horse Agreement contemplates the sale of the Acquired Assets to the Stalking Horse Bidder on the term set forth therein. The Acquired Assets will be conveyed free and clear of all liens, claims and encumbrances except for Assumed Liabilities. The consideration for the Acquired Assets will be (i) an aggregate dollar amount equal to the sum of $3.2 million, subject to adjustment as set forth in Section 2.10 of the Stalking Horse Agreement; (ii) performance of the obligations set forth in Section 2.6 of the Stalking Horse Agreement (including paying Buyer Cure Costs, if any, in connection with the assumption or assignment of executory contracts or leases), and (iii) the Buyer's assumption of the Assumed Liabilities. For the avoidance of doubt, the Purchase Price is inclusive of a Wind Down Amount and the Buyer will have no obligation with respect thereto. The Debtor believes the Bidding Procedures afford a sufficient opportunity to maximize the value of a sale of the Acquired Assets to its estate. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 16, 2020 at 4:00 p.m. (ET) b. Initial Bid: The sum of (i) the Purchase Price, (ii) the Expense Reimbursement, and (iii) $50,000 c. Deposit: 10% of the Purchase Price d. Auction: If the Debtor receives one or more Qualified Bids, in addition to the Stalking Horse Agreement, the Debtor will conduct the Auction for the Acquired Assets. If an Auction is held, it will take place on Nov. 19, 2020 at 10:00 a.m. (ET) at the offices of Sills Cummis & Gross, P.C., One Riverfront Plaza, Newark, New Jersey 07102, or such other place and time and manner (including via video, Zoom or any similar manner) as the Debtor will notify all Qualified Bidders that have submitted Qualified Bids (including the Stalking Horse Bidder) and the Consultation Parties. Otherwise, the Debtor will promptly submit the Stalking Horse Bid to the Court for approval at the Sale Hearing. e. Bid Increments: $50,000 f. Sale Hearing: Nov. 23, 2020 at 10:00 a.m. (ET) g. Sale Objection Deadline: Nov. 16, 2020, at 4:00 p.m. (ET) h. Expense Reimbursement: $150,000 Within three business days after the entry of the Bidding Procedures Order, or as soon thereafter as practicable, the Debtor will cause the Sale Notice upon the Sale Notice Parties. The Debtor is also asking approval of the Assumption Procedures to facilitate the fair and orderly assumption and assignment of certain executory contracts and unexpired leases in connection with the Sale. No less than seven calendar days before the Sale Objection Deadline, the Debtor will serve the Contract/Lease Assumption Notice on all counterparties to all potential Transferred Contacts and Assumed Leases and provide a copy of the same to the Stalking Horse Bidder and the Consultation Parties. The Cure Objection Deadline is seven days before the Sale Hearing. The Debtor submits that ample cause exists to justify the waiver of the 14-day stay imposed by Bankruptcy Rules 6004(h) and 6006(d), to the extent each such rule applies. A copy of the Agreement and the Bidding Procedures is available at https://tinyurl.com/y44yfpsr from PacerMonitor.com free of charge. About Dental Systems Integrated Dental Systems, LLC, is an integrated dental systems that was established to provide dentists with a full suite of tooth replacement systems, and supporting products, educational resources, and clinical support. Integrated Dental sought Chapter 11 protection (Bankr. D.N.J. Case No. 20-21423) on Oct. 7, 2020. The petition was signed by Carey Lyons, CEO. The Debtor had total assets of $7,041,242 and $11,572,479 in total debt. The Debtor tapped S. Jason Teele, Esq., at Sills Cummis & Gross P.C., as counsel. INTERRA INNOVATION: Court Approves Disclosure Statement ------------------------------------------------------- Judge Frank J. Bailey has entered an order approving the Disclosure Statement of Interra Innovation, Inc. as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code All persons and entities entitled to vote to accept or reject the Plan shall deliver their Ballots by electronic mail, first-class mail, hand delivery or overnight courier so as to be received no later than 5:00 p.m. Eastern Standard Time on Nov. 25, 2020 (the "Voting Deadline") to Debtor's counsel. The hearing to consider confirmation of the Plan is scheduled for Dec. 1, 2020 at 11:30 a.m. Eastern Prevailing Time, at the United States Bankruptcy Court, District of Massachusetts, Five Post Office Square, Boston, Massachusetts, 02109, 12th Floor, Courtroom 1. Any objection to confirmation of the Plan must be filed and served no later than 4:30 p.m., Eastern Prevailing Time, on or before Nov. 25, 2020. Replies to any objection to confirmation of the Plan shall be filed with the Clerk of the Bankruptcy Court, United States Bankruptcy Court, 5 Post Office Square, Boston, Massachusetts, 02109, together with proof of service, no later than 4:30 p.m., Eastern Prevailing Time, on or before Nov. 30, 2020. About inTerra Innovation InTerra Innovation, Inc. -- http://www.interra-innovation.com/-- is a specialty construction materials company focused on providing innovative solutions for the design, manufacture, delivery and installation of products for the construction industry throughout the United States. It offers mobile mixing, specialty grouting, thermal grouting, lightweight cellular concrete, and concrete and specialty pumping. InTerra sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 19-13469) on Oct. 11, 2019. In the petition signed by Frederick P. Hooper, president, the Debtor was estimated to have assets ranging between $1 million to $10 million and debts of the same range. The Hon. Frank J. Bailey is the case judge. InTerra tapped Ruberto, Israel & Weiner, P.C., serves as the Debtor's counsel. CRS Capstone Partners, LLC, is the investment banker. INTERRA INNOVATION: Unsecureds to Get 38%, Liens in Plan -------------------------------------------------------- InTerra Innovation, Inc., filed a First Amended Disclosure Statement with respect to its First Amended Plan of Reorganization on October 16, 2020. The Debtor estimates that holders of allowed general unsecured Claims will receive at least their pro-rata share of $1,225,000, subject to potential increase from proceeds of certain post-confirmation finance transactions, payable in an initial installment of $75,000 on the Effective Date, and thereafter in 28 quarterly installments of $41,071 over a period of seven years. The Debtor estimates that this will result in a distribution of at least 38% to the holders of allowed general unsecured claims. The payments to the holders of allowed general unsecured claims shall be secured by a first-priority lien in the GUC Collateral, which includes a pledge of the equity interests. While the Debtor would prefer to pay a larger dividend to Unsecured Creditors, the level of secured debt makes that impossible if the Debtor is to stay in business. Moreover, the Debtor believes that the great majority of Unsecured Creditors will benefit by continuing to do business with the Reorganized Debtor. Many Creditors have continued to do business with the Debtor since the Petition Date, in some cases on terms more favorable to such Creditors than existed prior to the Petition Date. A full-text copy of the First Amended Disclosure Statement dated Oct. 16, 2020, is available at https://tinyurl.com/yy8kc8g7 from PacerMonitor.com at no charge. The Debtor is represented by: James C. Fox Rion M. Vaughan RUBERTO, ISRAEL & WEINER, P.C. 255 State Street, 7th Floor Boston, Massachusetts 02109 Tel: (617) 742-4200 Fax: (617) 742-2355 E-mail: jcf@riw.com rmv@riw.com About inTerra Innovation InTerra Innovation, Inc. -- http://www.interra-innovation.com/-- is a specialty construction materials company focused on providing innovative solutions for the design, manufacture, delivery and installation of products for the construction industry throughout the United States. It offers mobile mixing, specialty grouting, thermal grouting, lightweight cellular concrete, and concrete and specialty pumping. InTerra sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 19-13469) on Oct. 11, 2019. In the petition signed by Frederick P. Hooper, president, the Debtor was estimated to have assets ranging between $1 million to $10 million and debts of the same range. The Hon. Frank J. Bailey is the case judge. InTerra tapped Ruberto, Israel & Weiner, P.C., serves as the Debtor's counsel. CRS Capstone Partners, LLC, is the investment banker. J.C. PENNEY: Works Out Deal with Creditors Who Objected to Plan --------------------------------------------------------------- Law360 reports that a Texas bankruptcy judge Monday, November 2, 2020, postponed a hearing on J. C. Penney's proposed Chapter 11 sale after the retail chain told him it had struck a deal with noteholders and unsecured creditors that had voiced objections to the plan. U.S. Bankruptcy Court Judge David Jones was scheduled to hear arguments on J. C. Penney's $1. 75 billion sale plan Monday, November 2, 2020, afternoon, but adjourned the hearing for a week after a Monday-morning filing by the retailer saying it had reached separate agreements in principle with the unsecured creditors committee and a noteholder group that had put forward an alternative sale proposal. About J.C. Penney Co. Inc. J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors have tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney A committee of unsecured creditors has been appointed in Debtors' Chapter 11 cases. The committee is represented by Cole Schotz, P.C., and Cooley, LLP. JAGUAR HEALTH: Has Until Dec. 23 to Regain Nasdaq Compliance ------------------------------------------------------------ Jaguar Health, Inc. received on Oct. 28, 2020, formal notice that the Nasdaq Hearings Panel granted Jaguar an extension through Dec. 23, 2020 to evidence compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. In order to comply with the Rule, the Company must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days by Dec. 23, 2020. As previously disclosed, the Company earlier received notice from the Listing Qualifications Staff of The Nasdaq Stock Market LLC indicating that the Company no longer satisfied the Rule and was therefore subject to delisting. In response, the Company timely requested a hearing before the Panel, which request stayed any further action by the Staff. The hearing was held on Oct. 22, 2020. "We are pleased that the Panel has provided us this positive Nasdaq listing determination," Lisa Conte, Jaguar's president and CEO, said. "We believe our efforts since the second quarter of 2020 to implement our expanded patient access programs for Mytesi, and our focus on long-term investors and non-dilutive financings, including our recent royalty-based capital infusion of $6.0 million, are improving our long-term financial prospects. Additionally, with the initiation earlier this month by our wholly owned subsidiary, Napo Pharmaceuticals, Inc., of the pivotal Phase 3 clinical trial of crofelemer (Mytesi) for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy ("cancer therapy-related diarrhea" (CTD)), we believe the value generated in the Company will be realized as we plan to regain compliance with the Nasdaq minimum bid price requirement." About Jaguar Health Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial stage pharmaceuticals company focused on developing novel, sustainably derived gastrointestinal products on a global basis. The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc., focuses on developing and commercializing proprietary human gastrointestinal pharmaceuticals for the global marketplace from plants used traditionally in rainforest areas. Its Mytesi (crofelemer) product is approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Jaguar reported a net loss of $38.54 million for the year ended Dec. 31, 2019, compared to a net loss of $32.15 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $37.58 million in total assets, $25.16 million in total liabilities, $10.88 million in Series A redeemable convertible preferred stock, and $1.54 million in total stockholders' equity. Mayer Hoffman McCann P.C., in San Francisco, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 2, 2020 citing that the Company has experienced losses since inception, significant cash used in operations, and is dependent on future financing to meet its obligations and fund its planned operations. These conditions raise substantial doubt about its ability to continue as a going concern. JEFFERIES GROUP: Egan-Jones Hikes Senior Unsecured Ratings to BB ---------------------------------------------------------------- Egan-Jones Ratings Company, on October 20, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Jefferies Group LLC to BB from BB-. Headquartered in New York, New York, Jefferies Group LLC provides institutional brokerage services. JFG HOLDINGS: Case Summary & 5 Unsecured Creditors -------------------------------------------------- Debtor: JFG Holdings, Inc. P.O. Box 470471 Fort Worth, TX 76107 Business Description: JFG Holdings, Inc. is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: November 2, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43378 Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS 12770 Coit Road Suite 1100 Dallas, TX 75251 Tel: 972-991-5591 Fax: 972-991-5788 Email: eric@ealpc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Janice Grimes, president. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SKTYJHY/JFG_Holdings_Inc__txnbke-20-43378__0001.0.pdf?mcid=tGE4TAMA JOHN F. HOGAN: $850K Sale of Berkeley Lake Property to Howard OK'd ------------------------------------------------------------------ Judge Jeffery W. Cavender of the U.S. Bankruptcy Court for the Northern District of Georgia authorized John Francis Hogan's sale of the real property located at 4239 River District Drive, Berkeley Lake, Georgia to Howard Gottlieb Revocable Trust dated July 11, 2005 for $850,000. The Purchase Agreement, including any amendments, supplements, and modifications thereto, and all of the terms and conditions therein, is approved. The sale is free and clear of all liens, claims and encumbrances. Upon closing of the Sale, all liens, claims, and encumbrances on the Property will attach to the Debtor's proceeds of the Sale. The half of the proceeds of the Sale that belong to the Debtor's non-filing spouse will be distributed to her at closing. The Debtor is authorized to take all actions necessary to close the Sale and to comply with the Purchase Agreement. Notwithstanding any rule to the contrary, the provisions of the Order will be immediately effective and enforceable upon its entry. The counsel for the Debtor will serve the Order upon all interested parties and will file a certificate of service within three days of the entry of the Order. John Francis Hogan sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 20-67418) on June 22, 2020. The Debtor tapped William Rountree, Esq., as counsel. KAIROS HOMES: Court Confirms Corrected Plan ------------------------------------------- The Hon. Mark X. Mullin entered an order confirming Kairos Homes, LLC's corrected Second Amended Plan of Reorganization. The Plan complies with Section 1122 of the Bankruptcy Code insofar as the classification scheme contained in the Plan does not classify administrative and undisputed secured and wage claims, but does classify all disputed secured, priority and general unsecured creditors in separate class from one another in Classes 1, 2, and 3, with equity holders in Class 4. Valid business, factual and legal reasons exist for separately classifying the various classes of Claims and Interests created under the Plan; the classifications were not done for any improper purpose; and such classes do not unfairly discriminate between or among holders of Claims or Interests. All classes of creditors are impaired under the Plan. Classes 1, 2 and 3 voted to accept the Plan. No creditor in Class 4 voted to accept or reject the Plan Therefore the Plan satisfies Section 1129(a)(8) of the Bankruptcy Code. Judge Mark X. Mullin has ordered that the Kairos Homes, LLC's Plan is confirmed. All holders of a Claim against the Debtor arising prior to the date of entry of the Plan Confirmation Order are permanently enjoined from collecting Claims from the Debtor in any manner other than as provided for in the Plan or this Order. Attorneys for the Debtor: Lyndel Anne Vargas CAVAZOS HENDRICKS POIROT, P.C. Suite 570, Founders Square 900 Jackson Street Dallas, TX 75202 Phone: (214) 573-7344 Fax: (214) 573-7399 Email: LVargas@chfirm.com About Kairos Homes Kairos Homes, L.L.C. -- http://www.kairoshomesllc.com/-- is a home builder in Fort Worth, Texas. Kairos Homes filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 18-43969) on Oct. 3, 2018. In the petition signed by Brian Frazier, president, the Debtor disclosed $3,006,914 in assets and $1,116,717 in liabilities. The Hon. Mark X. Mullin oversees the case. John Park Davis, Esq., at Davis Law Firm, serves as bankruptcy counsel to the Debtor. KHAN AVIATION: Trustee Selling LLC Interest to PMG for $45K ----------------------------------------------------------- Kelly M. Hagan, the Chapter 11 trustee for Khan Aviation, Inc., and its affiliates, asks the U.S. Bankruptcy Court for the Western District of Michigan to authorize the sale of interest in Private Motorsports Group, LLC ("PMG") to PMG for $45,000, subject to any better offers. Among the assets of the estate is are a 1.992841% interest in PMG along with a Platinum Membership interest as set forth in the Founders/Platinum Membership Agreement dated the Dec. 1, 2016 ("LLC Interest"). The Trustee asks approval to sell the LLC Interest free and clear of all liens, interests and encumbrances with liens and encumbrances attaching to the proceeds of the sale. The LLC Interest is allegedly encumbered by a security interest granted to KeyBank National Association dated July 19, 2019 securing obligations in excess of $140 million. The Security Agreement is in dispute and is subject to an adversary proceeding being prosecuted by the Trustee, being Adversary Proceeding 19-80119-swd. The Adversary Proceeding asserts that the Security Agreement should be voided on various grounds including 11 U.S.C. Sections 547 and 548. The granting of the Security Agreement was done within the 90 days of the Petition Date to secure obligations of separate entities referred to as the Interlogic Borrowers. The Trustee does not believe that the LLC Interest is encumbered by any other obligation except the obligation, if any, owed to KeyBank. The Trustee has accepted an offer for the LLC Interest in the amount of $45,000 pursuant to the Purchase and Sale Agreement. She has been marketing the LLC Interest for almost a year and has been investigating the value of the privately held interest. After discussions with several entities that have knowledge of the LLC Interest as well as the review of financial information and the business documents regarding the LLC Interest, she believes that the purchase price for the LLC Interest is fair and reasonable. All valid liens, interests and encumbrances attaching to the LLC Interest will attach to the net proceeds from the sale of the LLC Interest. The Trustee will not utilize the net proceeds from the sale without the consent of KeyBank or further order of the Court. The transfer of the LLC Interest will be "as is, where is" and free and clear of all liens, interests and encumbrances. The sale is subject to Court approval and any better offers submitted to the Trustee up until the deadline to object to the sale. Better offers may be submitted to Kevin M. Smith, attorney for the bankruptcy estate by mail or email at ksmith@bbssplc.com. Bidding will be in increments of $5,000 with the next offer starting at $50,000. In the event that there arecompeting bidders, the Trustee will establish bidding procedures to obtain the highest purchase price. The sale proceeds will be held by the Trustee subject to a determination of the validity and extent of the attachment of the Security Agreement to the LLC Interest and its proceeds. The Trustee believes that a sale of the LLC Interest is in the best interest of the estate and creditors. Finally, the Trustee asks a waiver of the 14-day stay period set forth in Federal Rules of Bankruptcy Procedure, Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/y65u7zdp from PacerMonitor.com free of charge. About Khan Aviation Khan Aviation, Inc. and its affiliates, GN Investments LLC, KRW Investments Inc., NJ Realty LLC, NAK Holdings LLC, and Sarah Air LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mich. Case Nos. 19-04261, 19-04262, 19-04264, 19-04266, 19-04267 and 19-04268) on Oct. 8, 2019. The cases are jointly administered with that of Najeeb Ahmed Khan (Bankr. W.D. Mich. Case No. 19-04258), which is the lead case. Judge Scott W. Dales presides over the cases. The Debtors are represented by Robert F. Wardrop, II, Esq., at Wardrop & Wardrop, P.C. Kelly Hagan was appointed as Chapter 11 trustee for the Debtors' bankruptcy estates. The trustee is represented by Hagan Law Offices, PLC. At the time of the filing, the Debtors' estimated assets and liabilities are as follows: Debtors Assets Liabilities ------- -------------------- ---------------------- Khan Aviation $1-mil. to $10-mil. $1-mil. to $10-mil. GN Investments $1-mil. to $10-mil. $100-mil. to $500-mil. KRW Investments $10-mil. to $50-mil. $100-mil. to $500-mil. NJ Realty $1-mil. to $10-mil. $100-mil. to $500-mil. NAK Holdings $1-mil. to $10-mil. $100-mil. to $500-mil. Sarah Air $500,000 to $1-mil. $100-mil. to $500-mil. L.S.R. INC: To Amend Plan; Hearing Continued to Dec. 8 ------------------------------------------------------ On Aug. 21, 2020, Debtor L.S.R., Inc. filed with the U.S. Bankruptcy Court for the Southern District of West Virginia an Amended Disclosure Statement and Chapter 11 Plan. On Aug. 28, 2020, Judge Frank W. Volk conditionally approved the Amended Disclosure Statement and and set a Sept. 30, 2020 as the hearing for final approval of the Amended Disclosure Statement and confirmation of the Plan. The Sept. 30 hearing was cancelled pending the reassignment of the case. The case was reassigned to Judge Paul M. Black effective Oct. 6, 2020. A hearing on the Plan and Disclosure Statement was held before Judge Black on Oct. 16. According to the minutes of the hearing, counsel of the Debtor will send notice of non-material amendment to the Plan. Parties will have 28 days to object. The Court has continued the matter to Dec. 8, 2020, at 11:00 a.m. About L.S.R. Inc. L.S.R., Inc. owns a motel building with improvements located at 201 West 2nd Avenue Williamson, West Virginia. L.S.R. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 18-20221) on May 2, 2018. In the petition signed by Doyle R. VanMeter II, president, the Debtor disclosed $1.02 million in assets and $1.55 million in liabilities. The Debtor is represented by: James M. Pierson, Esq. Pierson Legal Services P.O. Box 2291 Charleston, WV 25328 Tel: (304) 925-2400 E-mail: jpierson@piersonlegal.com LE TOTE: Cigna Says Disclosures Have Insufficient Information ------------------------------------------------------------- Cigna Health and Life Insurance Company ("CHLIC"), certain Cigna Dental Health entities, and Cigna HealthCare of Connecticut, Inc. (collectively with CHLIC and Cigna Dental Health, "Cigna") object to the Disclosure Statement for the Joint Chapter 11 Plan of Le Tote, Inc. and its Debtor Affiliates. Cigna points out that the Disclosure Statement cannot be approved because it contains insufficient information regarding the treatment of the Employee Benefits Agreements under the Plan. Cigna further points out that the Disclosure Statement and Plan provide Cigna with no opportunity to object and be heard with respect to the ultimate treatment of the Employee Benefits Agreements under the Plan. According to Cigna, the Plan and Disclosure Statement fail to account for the Run-Out Claims Obligations in the event that the ASO Agreement is rejected under the Plan. Cigna complains that the Debtors must pay the full cure amounts based upon the actual amounts that are due on the date that any of the Employee Benefits Agreements are assumed and assigned by the Debtors. Cigna asserts that the Plan must provide for: (i) the proper use, cross-account linkage, and disposition of the Plan Bank Account through which Employee Healthcare Claims are funded; (ii) maintenance of any required imprest balance in the Plan Bank Account; and (iii) funding of all amounts necessary to process and pay all eligible Employee Healthcare Claims incurred by eligible employees and their eligible dependents prior to the Effective Date, that have not been submitted, processed and paid (check issued and cleared) as of the Effective Date. Counsel for Cigna Health and Life Insurance Company, Cigna Dental Health, and Cigna Healthcare of Connecticut, Inc.: Andrew B. Buxbaum TROUTMAN PEPPER HAMILTON SANDERS LLP 1001 Haxall Point, 15th Floor Richmond, VA 23219 Telephone: (804) 697-1436 Facsimile: (804) 697-1339 E-mail: andrew.buxbaum@troutman.com - and - Jeffrey C. Wisler CONNOLLY GALLAGHER LLP 1201 North Market Street, 20th Floor Wilmington, DE 19801 Telephone: (302) 757-7300 Facsimile: (302) 658-0380 Email: jwisler@connollygallagher.com About Le Tote Inc. Le Tote, Inc. and its affiliates operate both an online, subscription-based clothing rental service and a full-service fashion retailer with 38 brick-and-mortar locations and a robust e-commerce platform. In response to the COVID-19 pandemic, Le Tote temporarily closed all retail locations in March 2020, although they continue to operate the Le Tote and Lord & Taylor websites. Le Tote and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-33332) on Aug. 2, 2020. In the petitions signed by CRO Ed Kremer, the Debtors disclosed between $100 million and $500 million in both assets and liabilities. Judge Keith L. Phillips oversees the cases. Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their legal counsel; Kutak Rock LLP and Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin Rosenman LLP as special counsel; Berkeley Research LLC as financial advisor; and Nfluence Partners as investment banker. Stretto is the notice, claims and balloting agent, and administrative advisor. On August 12, 2020, the U.S. Trustee appointed the official committee of unsecured creditors in the chapter 11 cases. The committee tapped Cooley LLP as its counsel and BDO Consulting Group, LLC as financial advisor. LE TOTE: Disclosure Statement Hearing Deferred to Nov. 24 --------------------------------------------------------- The hearing on the disclosure statement of Le Tote, Inc., et al. has been postponed to Nov. 24, 2020, at 1:00 p.m., prevailing Eastern Time, to be held in the United States Bankruptcy Court, 701 East Broad Street, Courtroom 5100, Richmond, Virginia 23219 or by electronic means, including telephone or video conference, as directed by the Court. On Aug. 2, 2020, the Le Tote Inc., et al., filed a Joint Chapter 11 Plan and a Disclosure Statement. A hearing on the Disclosure Statement was originally scheduled for Sept. 14, 2020. But the hearing has been delayed three times. The Revised Disclosure Statement Order will seek to establish, among other things, the following deadlines: * The Disclosure Statement objection deadline will be on November 17, 2020, at 5:00 p.m., prevailing Eastern Time. * The voting record date will be on November 20, 2020. * The solicitation launch date will be on December 1, 2020 (or as soon as reasonably practicable thereafter). * The publication deadline will be on December 8, 2020 (or as soon as reasonably practicable thereafter). * The voting deadline will be on January 5, 2021, at 5:00 p.m., prevailing Eastern Time. * The Plan objection deadline will be on January 5, 2021, at 5:00 p.m., prevailing Eastern Time. * The deadline to file confirmation brief will be on January 12, 2021, at 5:00 p.m., prevailing Eastern Time. * The Plan objection response deadline will be on January 12, 2021, at 5:00 p.m., prevailing Eastern Time. * The deadline to file voting report will be on January 12, 2021, at 5:00 p.m., prevailing Eastern Time. * The confirmation hearing date will be on January 14, 2021, at 1:00 p.m., prevailing Eastern Time. Co-Counsel to the Debtors: Steven N. Serajeddini, 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 - and - David L. Eaton Jaimie Fedell KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North La Salle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 - and - Michael A. Condyles Peter J. Barrett Jeremy S. Williams Brian H. Richardson KUTAK ROCK LLP 901 East Byrd Street, Suite 1000 Richmond, Virginia 23219-4071 Telephone: (804) 644-1700 Facsimile: (804) 783-6192 About Le Tote Inc. Le Tote, Inc. and its affiliates operate both an online, subscription-based clothing rental service and a full-service fashion retailer with 38 brick-and-mortar locations and a robust e-commerce platform. In response to the COVID-19 pandemic, Le Tote temporarily closed all retail locations in March 2020, although they continue to operate the Le Tote and Lord & Taylor websites. Le Tote and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-33332) on Aug. 2, 2020. In the petitions signed by CRO Ed Kremer, the Debtors disclosed between $100 million and $500 million in both assets and liabilities. Judge Keith L. Phillips oversees the cases. Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their legal counsel; Kutak Rock LLP and Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin Rosenman LLP as special counsel; Berkeley Research LLC as financial advisor; and Nfluence Partners as investment banker. Stretto is the notice, claims and balloting agent, and administrative advisor. On August 12, 2020, the U.S. Trustee appointed the official committee of unsecured creditors in the chapter 11 cases. The committee tapped Cooley LLP as its counsel and BDO Consulting Group, LLC as financial advisor. LENTZE MARINA: Unsecured Creditors to Get Full Payment Over 4 Years ------------------------------------------------------------------- Lentze Marina, Inc., filed with the U.S. Bankruptcy Court for the District of New Jersey a Combined Plan of Reorganization and Disclosure Statement dated September 1, 2020. The Debtor's Plan proposes to use the net earnings from business operations to pay creditors. The Debtor intends to pay its past due, secured tax claims over time and pay unsecured creditors in full over the course of four years in quarterly installments beginning on the Effective Date. Class 4 General Unsecured Class has $5,559.72 total amount of claims. This Class shall be paid in full in 16 equal quarterly installments of $348 beginning on the Effective Date. Equity Interest holders will retain their interests. The Debtor shall make the payments required under the Plan from its ongoing cash flow over the 60 months commencing on the Effective Date. The Debtor's principal is planning to contribute $100,000 in cash to be used for capital improvements to restore the marina to its pre-Sandy appearance and functionality. Combined with a devoted advertising budget to attract new customers, the Debtor believes that it can easily meet the revenue projections. A full-text copy of the disclosure statement dated September 1, 2020, is available at https://tinyurl.com/y2gtaas9 from PacerMonitor.com at no charge. Counsel for the Debtor: Ellen M. McDowell, Esq. McDowell Law, PC 46 West Main Street Maple Shade, NJ 08052 Tel: (856) 482-5544 E-mail: emcdowell@mcdowelllegal.com About Lentze Marina Lentze Marina, Inc. filed Chapter 11 Petition (Bankr. D.N.J. Case No. 19-32740) on December 5, 2020. Ellen M. McDowell, Esq. of MCDOWELL LAW, PC is the Debtor's counsel. LENTZE MARINA: Unsecureds to Get More; Plan Confirmed ----------------------------------------------------- Judge Michael B. Kaplan on Oct. 22, 2020, entered an order confirming the Plan of Reorganization of Lentze Marina, Inc. No objections to confirmation of the Plan were filed. The Debtor requested that the Plan be modified to reflect total payments to unsecured creditors be increased from $5,560 to $9,600 and quarterly payments increased to $600 each. All claimants for professional fees and expenses that, in accordance with the Plan and Disclosure Statement, have filed appropriate applications or Claims, as the case may be, by the date of the Confirmation Hearing will be paid in accordance with the provisions of the confirmed Plan upon approval of their applications or claims by the Court. A copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/DL4EPTI/Lentze_Marina_Inc__njbke-19-32740__0046.0.pdf Lentze Marina, Inc., sought Chapter 11 protection (Bankr. D.N.J. Case No. 19-32740) on Dec. 5, 2019. Ellen M. McDowell, at McDOWELL LAW, PC, is the Debtors' counsel. LONE STAR HOTELS: Court Denies Confirmation of Plan --------------------------------------------------- Judge Jeffrey P. Norman on Oct. 27, 2020, denied confirmation of the Chapter 11 Plan of Lone Star Hotels LLC and Caremore Managers Inc. On Sept. 2, 2020, the judge granted conditional approval of the Disclosure Statement and set an Oct. 27 hearing on the Plan. On Oct. 27, 2020, hearing was held on plan confirmation and final approval of the Debtors' Disclosure Statement. For the reasons stated on the record the Amended Disclosure Statement (ECF No 76) is not approved and confirmation of the Debtors' proposed Chapter 11 Plan (ECF No. 50) is denied. The Debtors will file a new Disclosure Statement and Chapter 11 Plan not later than Dec. 30, 2020. Should the Debtors fail to file either a Disclosure Statement or Chapter 11 Plan in conformity with this order, this case is subject to sua sponte dismissal. About Lone Star Hotels Based in Bay City, Texas, Lone Star Hotels LLC is a privately held company in the traveler accommodation industry. It conducts business under the name Comfort Suites. Lone Star Hotels sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-32450) on May 4, 2020. The petition was signed by Kulwant Kaur Sandhu, Debtor's managing member. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Jeffrey P. Norman oversees the case. Joyce W. Lindauer Attorney, PLLC is Debtor's legal counsel. LONE STAR HOTELS: Plan Offers Unsecureds $2.5K/ Month for 5 Years ----------------------------------------------------------------- Debtors Lone Star Hotels, LLC d/b/a/ Comfort Suites and Caremore Managers, Inc. filed with the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, a Joint Plan of Reorganization and a Disclosure Statement on September 1, 2020. The Plan will be funded by the Debtors through the profits the Debtors will earn through the continuation of the Debtors' hotel business. Future management of the Debtors shall consist of the Debtors and their Managing Member Kulwant K. Singh. The Debtor Caremore Managers, Inc. will continue to manage the day to day affairs of the Debtors at the Hotel and of the jointly administered Debtors. The Debtors shall pay Class 6 Allowed Unsecured Claims a total of $2,500 per month, to be distributed pro rata among the Class 6 Claimants, payable in equal monthly installments for 6 months, beginning on the first day of the first month following the Effective Date and continuing on the first day of each month thereafter. All equity interests shall be retained on the confirmation date. Provided, however, if Class 6 Unsecured Claims vote against the Plan then in the interest of ensuring the Plan provides the greatest benefit to the Debtors' creditors and equity interest holders, the Debtors shall cancel all existing equity interest in Debtors, and shall issue new equity interests and auction them off at the Confirmation Hearing. All interested parties shall have the opportunity to purchase the Reorganized Debtors' interests at the auction. A full-text copy of the Disclosure Statement dated September 1, 2020, is available at https://tinyurl.com/y4vpdjhr from PacerMonitor.com at no charge. Attorneys for the Debtors: Joyce W. Lindauer Kerry S. Alleyne-Simmons Guy H. Holman Joyce W. Lindauer Attorney, PLLC 1412 Main St., Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 E-mail: joyce@joycelindauer.com kerry@joycelindauer.com About Lone Star Hotels d/b/a Comfort Suites Based in Bay City, Texas, Lone Star Hotels LLC is a privately held company in the traveler accommodation industry. It conducts business under the name Comfort Suites. Lone Star Hotels sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-32450) on May 4, 2020. The petition was signed by Kulwant Kaur Sandhu, the Debtor's managing member. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Jeffrey P. Norman oversees the case. Joyce W. Lindauer Attorney, PLLC is Debtor's legal counsel. LORD & TAYLOR: Wilmington Trust Loses Bid to Force Rent Payment --------------------------------------------------------------- Law360 reports that a Virginia bankruptcy judge has ruled that the mortgage lender to a group of landlords of bankrupt retail chain Lord & Taylor can't compel the retailer to make at least $30 million in rent payments directly to the lender, saying the lender has no authority to demand such action. In a 13-page memorandum opinion Friday, October 30, 3030, U. S. Bankruptcy Judge Keith L. Phillips denied Wilmington Trust NA's motion seeking standing "to compel payment of rent and to assert related rights under and with respect to [a] master lease. "Wilmington Trust holds an $848 million commercial mortgage-backed securities loan made to, among other parties. About Le Tote Inc. Le Tote, Inc. and its affiliates operate both an online, subscription-based clothing rental service and a full-service fashion retailer with 38 brick-and-mortar locations and a robust e-commerce platform. In response to the COVID-19 pandemic, Le Tote temporarily closed all retail locations in March 2020, although they continue to operate the Le Tote and Lord & Taylor websites. Lord & Taylor LLC -- http://www.lordandtaylor.com/-- is a New York-based luxury department store that offers luxury products or women such as belts, shoes, clothes, handbags as well as accessories. Founded in 1826, the oldest department store in the country grew to beyond 50 locations and 66,000 employees nationwide. The chain had 38 stores that were in operation before the Covid-19 outbreak. Lord & Taylor's parent Le Tote and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-33332) on Aug. 2, 2020. At the time of the filing, Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their legal counsel, Kutak Rock LLP as local counsel, Berkeley Research LLC as financial advisor, and Nfluence Partners as investment banker. Stretto is the notice, claims and balloting agent and administrative advisor. LRGHEALTHCARE: $30 Million Sale of 2 Hospitals Wins Court Approval ------------------------------------------------------------------ Daniel Gill of Bloomberg Law reports that LRGHealthcare, the bankrupt owner of two New Hampshire hospitals, won approval of its sale procedures, clearing the way for an auction that will kick off Dec. 16 with a starting bid of $30 million. Concord Hospital Inc. submitted the stalking horse bid for the auction to sell Lakes Region General Hospital, Franklin Regional Hospital, and the hospitals' ambulatory sites. As the stalking horse, Concord will be entitled to a break-up fee of $1.35 million if another purchaser wins the auction, according to the procedures approved by Judge Michael A. Fagone of the U.S. Bankruptcy Court for the District of New Hampshire. About LRGHealthcare LRGHealthcare -- http://www.lrgh.org/-- is a not-for-profit healthcare charitable trust operating Lakes Region General Hospital, Franklin Regional Hospital, and numerous other affiliated medical practices and service programs. LRGH is a community based acute care facility with a licensed bed capacity of 137 beds, and FRH is a 25-bed critical access hospital with an additional 10-bed inpatient psychiatric unit. In 2002, Lakes Region Hospital Association and Franklin Regional Hospital Association merged, with the merged entity renamed LRGHealthcare. LRGHealthcare offers a wide range of medical, surgical, specialty, diagnostic, and therapeutic services, wellness education, support groups, and other community outreach services. LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No. 20-10892) on October 19, 2020. The petition was signed by Kevin W. Donovan, president and chief executive officer. At the time of the filing, the Debtor estimated to have $100 million to $500 million in both assets and liabilities. Judge Bruce A. Harwood oversees the case. The Debtor tapped Nixon Peabody LLP as counsel; Deloitte Transactions and Business Analytics LLP and Kaufman, Hall & Associates, LLC as financial advisors; and Epiq Corporate Restructuring, LLC as claims, noticing, solicitation, and administrative agent. LRGHEALTHCARE: Asks Court to Dispense Appointment of PCO -------------------------------------------------------- LRGHealthcare requests the U.S. Bankruptcy Court for the District of New Hampshire to waive and dispense with the appointment of a patient care ombudsman as required under LBR 7102(b)(2). The Debtor contends that the bankruptcy filing was not "precipitated by concerns relating to the quality of patient care or privacy matters." Rather, the Debtor sought relief primarily due, among other things, severe liquidity constraints. The Debtor anticipates selling substantially of all its assets to another hospital facility in the very short run. The Debtor points out that any input by an ombudsman probably would be rendered moot before it could have any meaningful impact. In addition, the Debtor contends that it has been subject to extensive oversight by multiple government agencies and professional associations. The Debtor mentions that it is subject to a comprehensive oversight by the New Hampshire Department of Health and Human Services; its operations are overseen by the Center for Medicare and Medicaid Services through deemed status provided to DNV GL -- a world-leading certification body with objectives to safeguard life, property and the environment; and the Debtor is an active participant in the Leapfrog Hospital Survey which is a voluntary, annual patient safety and quality survey for hospitals in the United States. Thus, the Debtor asserts that any appointment of such an ombudsman would duplicate its existing patient care quality management procedures at substantial cost and without increasing the quality of care for their patients. About LRGHealthcare LRGHealthcare -- www.lrgh.org -- is a not-for-profit healthcare charitable trust operating Lakes Region General Hospital, Franklin Regional Hospital, and numerous other affiliated medical practices and service programs. LRGH is a community based acute care facility with a licensed bed capacity of 137 beds, and FRH is a 25-bed critical access hospital with an additional 10-bed inpatient psychiatric unit. In 2002, Lakes Region Hospital Association and Franklin Regional Hospital Association merged, with the merged entity renamed LRGHealthcare. LRGHealthcare offers a wide range of medical, surgical, specialty, diagnostic, and therapeutic services, wellness education, support groups, and other community outreach services. LRGH sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.H. Case No. 20-10892) on October 19, 2020. In the petition signed by Kevin W. Donovan, president and chief executive officer, the Debtor estimated $100 million to $500 million in assets and liabilities with the same range. Judge Bruce A. Harwood oversees the case. The Debtor tapped NIXON PEABODY LLP, as bankruptcy, reorganization, and outside corporate counsel; DELOITTE TRANSACTIONS AND BUSINESS ANALYTICS LLP, as financial and restructuring advisor and valuation expert; KAUFMAN HALL, as investment banker and financial advisor; and EPIQ CORPORATE RESTRUCTURING, LLC, as claims, noticing, solicitation and administrative agent. MARINE BUILDERS: Proposes Elite Auction of Vessel Jenny Lynne ------------------------------------------------------------- Marine Builders, Inc. and Marine Industries Corp. ask the U.S. Bankruptcy Court for the Southern District of Indiana to authorize their Stipulation with Lender WesBanco Bank, Inc. with respect to the potential auction sale of vessel Jenny Lynne by Elite Auctions in accordance with the terms of their Commercial Exclusive Right to Sell/Lease Contract. Prior to the Petition Date, Marine Builders, as Borrower, and WesBanco, as Lender, entered into that certain promissory note, dated Jan. 25, 2012, in the original principal amount of $955,000 ("MBI Note"). On Jan. 25, 2012, to secure repayment of the MBI Note, Marine Builders executed and delivered to WesBanco a Preferred Ship Mortgage and a Commercial Security Agreement, granting WesBanco a security interest in, among other things, all of Marine Builders's inventory, equipment, and accounts, now existing and hereafter arising and acquired, including the vessel the Jenny Lynne, and all proceeds thereof ("MBI Cash Collateral"). On Sept. 29, 2015, WesBanco filed a UCC-1 Financing Statement in the Office of the Secretary of State of Kentucky as File No. 2015-2792086-21.01 perfecting its security interest in the MBI Personal Property and MBI Cash Collateral. As of the Petition Date, there is at least $881,197 due on the MBI Note. On April 7, 2005, Marine Industries executed and delivered to WesBanco a Promissory Note ("MIC Note"), in the original principal amount of $250,000. The principal amount was later increased to $600,000. On April 7, 2005, to secure repayment of the MIC Note, Marine Industries executed and delivered to WesBanco a Commercial Security Agreement ("MIC Commercial Security Agreement"), granting WesBanco a security interest in, among other things, all of its personal property, now existing and hereafter acquired and wherever located, and all proceeds thereof ("MIC Cash Collateral"). On April 11, 2005, WesBanco filed a UCC-1 Financing Statement, in the Office of the Secretary of State of Indiana as File No. 200500003271080 perfecting its security interest in the MIC Personal Property and MIC Cash Collateral. As of the Petition Date, there is at least $602,176 due on the MIC Note. WesBanco filed proofs of claim (MBI Claim No. 7 and MIC Claim No. 4) that are secured by the Debtors' collateral, including the vessel the Jenny Lynne. As adequate protection, WesBanco was granted a lien on the Jenny Lynne to secure the obligations owed under the MBI Claim and the MIC Claim. As of Dec. 20, 2019, the outstanding principal of the MBI Note was $757,645, and the outstanding interest was $65,597.19, plus other fees and costs. The outstanding principal of the MIC Note is $557,589, with interest of at least $23,621, plus other fees and costs. WesBanco and the Debtors have entered into good-faith, arms'-length negotiations concerning the sale or other disposition of the Jenny Lynne and related matters and have reached certain agreements in principle that the Parties have memorialized in the Stipulation and Agreed Entry. The principal terms of the proposed Stipulation and Agreed Entry are: A. The Parties will cooperate in good faith and use commercially reasonable efforts to pursue the sale of the Jenny Lynne in accordance with the terms of the Stipulation and Agreed Entry and such additional terms as are mutually agreeable to the Parties. The Property Sale will occur Nov. 16, 2020. WesBanco will have the right to credit bid at the Property Sale in accordance with Section 363(k) of the Bankruptcy Code. B. WesBanco consents to the Debtors' retention of Elite Auctions as well as Werth Avenue Yacht Sales and Jonathan Chapman, as Broker, on the terms set forth in the Auctioneer Agreement and Brokerage Agreement. The Debtors' employment of the Auctioneer and Broker upon the terms set forth in the Auctioneer Agreement and Brokerage Agreement will be authorized and approved effective as of the date of the Court’s approval of the Stipulation and Agreed Entry. C. In connection with any Property Sale, the proceeds of the Property Sale will be distributed as follows: a. First, the following obligations will be reserved for, reimbursement or paid, as applicable, from the gross sale proceeds of a Property Sale: (A) the Auctioneer's and Broker's commissions in accordance with the terms of the Auctioneer Agreement and Brokerage Agreement or the costs associated with the auction, as applicable; (B) any buyer's broker fees that the Debtors, after consultation with WesBanco, agree with the purchaser to pay from the gross sale proceeds in connection with a Property Sale; and (C) any transfer taxes. b. Second, the Net Sale Proceeds will be allocated as follows: (i) the remaining principal owed on the Promissory Notes; (ii) outstanding pre-petition interest on the Promissory Notes; (iii) outstanding post-petition interest on the Promissory Notes; and (iv) outstanding attorney’s fees, costs, and expenses recoverable under the Promissory Notes which arose pre- and post-petition. c. Third, the remainder of the Net Sale Proceeds leftover after paying obligations will be allocated exclusively to the Debtors to pay outstanding administrative expense claims, specifically, U.S. Trustee fees, and allowed fees of the Debtors' attorneys, Dentons Bingham Greenebaum LLP and Bob Herre. d. Fourth, if there are additional Net Sale Proceeds after the payment of the claims set forth, then they will be applied to reduce the secured claim of New Washington State Bank. D. The automatic stay of section 362 of the Bankruptcy Code is deemed modified solely to the extent necessary to facilitate the remittance to WesBanco of the Net Sale Proceeds agreed to be allocated to it and for WesBanco's application of such Net Sale Proceeds to the Promissory Notes, all in accordance with the terms of the Stipulation and Agreed Entry. E. Promptly upon the payment in full of the obligations owing under the Promissory Notes, WesBanco will file on the docket of the Bankruptcy Cases a notice that MBI Claim No. 7 and MIC Claim No. 4 have been satisfied. F. For the avoidance of doubt, the entry of an order by the Court approving the Stipulation and Agreed Entry will constitute approval by the Court to enter into a sale of the Jenny Lynne, and no other Court approval of a sale is required. G. For the avoidance of doubt, all rights, claims, and objections of the respective Parties are reserved in connection with MBI Claim No. 7 and MIC Claim No. 4 and the calculation of the payoff amount for the Promissory Notes. H. Notwithstanding anything to the contrary in the Bankruptcy Code or the Bankruptcy Rules, the Stipulations and Agreed Entry will be immediately effective in accordance with its terms upon the entry on the docket of the Chapter 11 Cases and the Court's approval thereof. Subject to Court approval of the Stipulation and Agreed Entry, the Debtors, after consultation with WesBanco, have entered into that certain Commercial Exclusive Right to Sell/Lease Contract with Elite Auctions, as the auctioneer for the sale of the Jenny Lynne, as well as the Brokerage Agreement with the Broker. The Debtors believe that the terms of the Auctioneer Agreement are commercially reasonable and, while providing the Auctioneer with fair compensation for its auctioneer services, will help them maximize the value that can be realized for their estates from the sale of the Jenny Lynne. Similarly, the Debtors also believe that the terms of the Brokerage Agreement are commercially reasonable and will help them maximize the value of their assets. Based on their investigation and the information available to the Debtors, the Debtors believe the Auctioneer and the Broker to both be reputable, highly qualified, and well established within this specialized maritime market. The Debtors respectfully ask that the Court (i) authorizes their entry into, and approve, the Stipulation and Agreed Entry attached hereto as a proposed Agreed Entry; (ii) approve their engagement and compensation of the Auctioneer in accordance with the terms of the Auctioneer Agreement; and (iii) approve the potential sale of the Jenny Lynne without further leave from the Court. A copy of the Agreement is available at https://tinyurl.com/y6kef476 from PacerMonitor.com free of charge. About Marine Builders Marine Builders -- http://www.marinebuilders.net/-- is a family-owned and operated company in the boat building business. With 26-acre site and 14,000-square-foot of fabrication shop, Marine Builders has both new construction and repair capabilities. Founded in 1972, Marine Builders manufactures custom vessels, ranging from work boats and barges to dry docks and excursion vessels. Its subsidiary, Marine Industries Corporation, primarily operates in the marine supplies business. Marine Builders and Marine Industries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bank. S.D. Ind. Lead Case No. 19-90632) on April 25, 2019. In the petitions signed by David A. Evanczyk, president and CEO, the Debtors were estimated $1 million to $10 million in both assets and liabilities. The cases are assigned to Judge Basil H. Lorch III. James R. Irving, Esq., at Bingham Greenebaum Doll LLP, represents the Debtors as counsel. MARKPOL DISTRIBUTORS: Court Approves Disclosure Statement --------------------------------------------------------- Judge A. Benjamin Goldgar has entered an order that the Second Amended Disclosure Statement of Markpol Distributors, Inc., et al. is approved. Paragraph V(C)(14) of the First Amended Disclosure Statement is amended to add the following at the end: "and the Debtors and the Fifth Third Guarantors shall be deemed to have released, waived, and discharged Fifth Third from any and all liabilities, obligations, actions, suits, judgments, claims, causes of action and demands, known or unknown, whatsoever at law or in equity arising from, related to, or in connection with the Fifth Third Guarantees and this Plan." According to the docket, the ballots accepting and rejecting the Plan are due Nov. 30, 2020. A confirmation hearing is slated to be held on Dec. 21, 2020 at 10:00 a.m. Objection to confirmation are due by Nov. 30, 2020. About Markpol Distributors Markpol Distributors, Inc. -- http://markpoldistributors.com/-- is a food distributor specializing in European grocery merchandise imported from European exporters. The Company's customers may select an offering of 4 to 24 feet selection of assorted grocery merchandise appealing to the American and European consumer. Markpol is headquartered in Wood Dale, Ill. Markpol Distributors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 18-06105) on March 2, 2018. On May 30, 2018, Vistula Development, Incorporated and Kozyra Holdings, LLC - 955 Lively, LLC each filed Chapter 11 petitions (Bankr. N.D. Ill. Case Nos. 18-15604 and 18-15605). In the petition signed by CEO Mark Kozyra, Markpol estimated assets and liabilities at $1 million to $10 million. Judge Benjamin A. Goldgar is the case judge. Shelly A. DeRousse, Esq., at Freeborn & Peters LLP, is the Debtors' counsel. Rally Capital Services, LLC is the financial advisor. Patrick S. Layng, U.S. Trustee for the Northern District of Illinois, appointed an official committee of unsecured creditors on March 15, 2018. The committee retained Goldstein & McClintock LLLP as its counsel. MARKPOL DISTRIBUTORS: Markpol Unsecureds to Recover 8.8% in Plan ---------------------------------------------------------------- Debtors Markpol Distributors, Inc., Kozyra Holdings, LLC – 955 Lively LLC, and Vistula Development, Incorporated, and the Official Committee of Unsecured Creditors have proposed a plan of reorganization for the Debtors. According to the Second Amended Disclosure Statement for the Third Amended Plan, the Debtors intend to reorganize their businesses under the Plan by, among other things, (1) paying administrative expenses with the Debtor's operating income, (2) compensating Fifth Third by a combination of providing a deed to the Vistula Property, selling, refinancing or providing a deed to the 955 Lively Property, Markpol making a cash payment of $150,000 shortly after confirmation, and making monthly payments until Fifth Third's claim is satisfied, (3) paying general unsecured creditors of Markpol $300,000 over time from the proceeds of Markpol's operations, and (4) paying the general unsecured creditors of Vistula and 955 Lively over a short period from cash on hand and proceeds of Markpol's operations. The equity holders of Markpol will also provide an equity pledge to guarantee the payments to general unsecured creditors owed pursuant to the Plan, which will be monitored by a collateral trustee. Class 3(a) consists of the Allowed General Unsecured Claims against Markpol totaling $3.408 million. The estimated distribution for Class 3(a) is 8.8% of the Allowed Claims. Allowed Class 3(a) General Unsecured Claims against Markpol will be paid their ProRata share of $300,000 in Cash from the proceeds of Markpol's post-confirmation operations (the “Contributed Proceeds from Operations”). Allowed Class 3(b) General Unsecured Claims Against Vistula -- totaling $25,333-- will be paid in full in Cash from Markpol's post-confirmation operations. The Debtors estimate that the Allowed General Unsecured Claims against Vistula will not exceed $25,633.41 as of the Effective Date. The estimated percentage of recovery of the Allowed General Unsecured Claims against Vistula is 100% over time. Allowed Class 3(c) General Unsecured Claims Against 955 Lively -- totaling $26,300 -- will be paid in full in Cash from Markpol's post-confirmation operations. The Debtors estimate that the Allowed General Unsecured Claims against 955 Lively will not exceed $26,300 as of the Effective Date. The estimated percentage of recovery of the Allowed General Unsecured Claims against 955 Lively is 100%. The Equity Security Holders will contribute up to $50,000 in "New Capital Contribution," which shall be paid either as needed to fund Allowed Administrative Claims or within the first year of the Effective Date (if not needed to fund Allowed Administrative Claims. Allowed Class 5 Equity Securities shall revest in each Post-Effective Date Debtor as of the Effective Date in exchange for the New Capital Contribution and the continuing guarantees of equity holder Tadeusz Kozyra and Mark Kozyra, and the Equity Pledge of a controlling number of shares of Markpol voting stock in favor of the Collateral Trust to provide security for payment of Class 3(a) Claims. The Plan will be funded by Markpol's business operations, the New Capital Contribution, the deed to the Vistula Property, and the sale, refinancing or deed to the 955 Lively Property. A copy of the Second Amended Disclosure Statement for the Third Amended Joint Plan of Reorganization dated Oct. 28, 2020 is available at: https://www.pacermonitor.com/view/D25TU5Y/Markpol_Distributors_Inc__ilnbke-18-06105__0392.0.pdf?mcid=tGE4TAMA Counsel for the Debtors: FREEBORN & PETERS LLP Shelly A. DeRousse Elizabeth L. Janczak 311 South Wacker Drive, Suite 3000 Chicago, Illinois 60606-6677 Telephone: (312) 360-6000 Facsimile: (312) 360-6250 E-mail: sderousse@freeborn.com ejanczak@freeborn.com Counsel to the Official Committee of Unsecureds: GOLDSTEIN &MCCLINTOCK LLLP Matthew E. McClintock Eric W. Garavaglia 111 W. Washington Street, Suite 1221 Chicago, Illinois 60602 Tel: (312) 337-7700 Fax: (312) 277-2305 E-mail: mattm@goldmclaw.com About Markpol Distributors Markpol Distributors, Inc. -- http://markpoldistributors.com/-- is a food distributor specializing in European grocery merchandise imported from European exporters. The Company's customers may select an offering of 4 to 24 feet selection of assorted grocery merchandise appealing to the American and European consumer. Markpol is headquartered in Wood Dale, Illinois. Markpol Distributors filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 18-06105) on March 2, 2018. In the petition signed by CEO Mark Kozyra, the Debtor estimated assets and liabilities at $1 million to $10 million. Judge Benjamin A. Goldgar is the case judge. Shelly A. DeRousse, Esq., at Freeborn & Peters LLP, is the Debtor's counsel. Rally Capital Services, LLC, is the financial advisor. Patrick S. Layng, U.S. Trustee for the Northern District of Illinois, on March 15, 2018, appointed five creditors to serve on an official committee of unsecured creditors. The Committee retained Goldstein & McClintock LLLP as counsel. MASSACHUSETTS DEVELOPMENT: Moody's Cuts $132MM Bonds to Ba1 ----------------------------------------------------------- Moody's Investors Service downgraded to Ba1 from Baa3 the rating of approximately $132.185 million of outstanding Massachusetts Development Finance Agency's Revenue Bonds, Provident Commonwealth Education Resources II Issue, UMass Dartmouth Student Housing Project, Series 2018. Moody's has also revised the outlook to negative from ratings under review. This rating action concludes the review for downgrade initiated on September 1, 2020. RATINGS RATIONALE The Ba1 rating reflects the weakened financial position of the project due to reduced rental revenue resulting from a COVID-related 20% occupancy rate for the inaugural Fall 2020 semester and an upcoming April 1, 2021 debt service of approximately $3.3 million that will be covered by remaining capitalized interest funds of approximately $2 million, Moody's-projected net operating income, and a sufficient but to-date tentative source of liquidity that would serve as an alternative to the debt service reserve fund (DSRF) should the project remain at 20% occupancy into the Spring 21' semester. Project ownership has identified potential sources of trustee-held funds that could be used for debt service however plans have not yet been finalized and there remains a modest chance the project will require a DSRF tap in order to meet April's debt service. The project is experiencing reduced occupancy due to a shift to mostly online instruction (with the exception of clinics, studio and laboratory classes) at the affiliated university and a conversion of all dormitory rooms into single capacity due to the coronavirus pandemic. A total of 246 beds have been leased out of a total of 1,210 and current occupancy is below the Moody's projected break-even occupancy, which incorporates capitalized interests' funds, of approximately 30%. The project is a stand-alone housing project financing that is non-recourse to the University. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The action reflects the impact of the crisis on the student housing project and consequently the bonds. RATING OUTLOOK The negative outlook incorporates the unknown length of the COVID outbreak and its effect on project occupancy. If the current project occupancy of 20% were to extend into the Fall 2021 semester or decline further, a significant drawdown of the DSRF may be required, thus further weakening the credit. Conversely, if project occupancy were to recover next year, the outlook could return to stable. Project ownership, management and the affiliated university have not yet decided whether to slightly ease single-capacity social distancing protocols and increase occupancy for the spring 21' semester. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Strong and direct support from the University that materially increases liquidity and/or cash flow available for debt service FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Taps to the debt service reserve fund that impair the long-term credit profile of the project LEGAL SECURITY Project revenues will constitute the primary source of revenue for the rated debt. The bond trustee will also have a security interest in various funds, such as the Bond Fund, Debt Service Reserve Fund, and the Repair and Replacement Fund, as provided by the Trust Agreement. PROFILE Provident Commonwealth Education Resources II Inc. formed in 2018 for the purpose of developing, constructing, owning and operating student housing on behalf of the University. METHODOLOGY The principal methodology used in this rating was Global Housing Projects published in June 2017. MAVERICK RESTORATION: Claims to be Paid From Continued Operations ----------------------------------------------------------------- Maverick Restoration & Waterproofing, LLC, submitted a Chapter 11 Plan of Reorganization. The primary assets of the bankruptcy estate on the Filing Date, its estimated values $60,450. Class 1 Secured Claims are comprised of the Allowed Claims Secured on Debtor's vehicle by Ally Bank. Holders of Allowed Secured Claims in Class 1, which shall include Ally Bank, shall receive payment of their Claims in accordance with Exhibit B, with payments commencing 30 days after the Effective Date. Holders of Allowed Secured Claims in Class 1 shall retain their liens until paid in full. Class 2 Secured Claims are comprised of the Allowed Claims Secured on Debtor's fixtures and accounts by Mulligan Funding, LLC. Holders of claims in Class 2 will receive payment of their claims in accordance with Exhibit B, with payments commencing 30 days after the Effective Date. Holders of Allowed Secured Claims in Class 2 shall retain their liens until paid in full. Class 6 General Unsecured Claims are comprised of Allowed General Unsecured Claims against MRW. Class 6 will receive payment of their claims in accordance with Exhibit B¸ pro rata based on all General Unsecured Claims. Holders of General Unsecured Claims in Class 6 against the Debtor shall have a threshold amount of $100 before any payment is to be made, save and except the final payment where the full amount owed to creditor shall be paid in full, according to the terms of the Plan. Class 8 is comprised of Allowed Equity Interests in MRW. Effective as of the filing of this Plan, no claims which would otherwise fall into this class have been identified by the Debtor. Notwithstanding the foregoing, should a claim arise under this class, payments to Holders of Allowed Equity Interest Holder Claims would, commencing 60 days from the Effective Date and continuing every month thereafter, be paid pro rata from the Debtor’s disposable income. Payments and distributions under the Plan will be funded from the continued operations of the Debtor. A full-text copy of the Chapter 11 Plan of Reorganization dated September 2, 2020, is available at https://tinyurl.com/y4kxs7xl from PacerMonitor.com at no charge. A full-text copy of the Exhibit B dated September 2, 2020, is available at https://tinyurl.com/y5lfcmar from PacerMonitor.com at no charge. Attorneys for the Debtor: Susan Tran Brendon Singh TRAN SINGH LLP 1010 Lamar, Suite 1160 Houston TX 77002 Ph: (832) 975-7300 Fax: (832) 975-7301 BSingh@ts-llp.com About Maverick Restoration & Waterproofing Maverick Restoration & Waterproofing, LLC, a restoration and waterproofing contractor based in Santa Fe, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-32528) on May 7, 2020, listing under $1 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. Judge Jeffrey P. Norman oversees the case. Debtor has tapped Corral Tran Singh, LLP as its legal counsel. MCAFEE LLC: Fitch Assigns BB- LongTerm IDR, Outlook Stable ---------------------------------------------------------- Fitch Ratings assigns a First-Time Long-Term (LT) Issuer Default Rating (IDR) of 'BB-' with a Stable Outlook to McAfee, LLC and a rating of 'BB'/'RR2' to the company's senior secured credit facility. In arriving at the rating, Fitch considered the company's strong profitability, with EBITDA margins in the mid-30% range, positive FCF profile, high recurring revenues, leading market position supported by positive brand reputation, weaker leverage metrics relative to peers, and tailwinds in the cybersecurity segment as IT security threats become increasing complex. The rating action converts the expected ratings that Fitch assigned on Oct. 22, 2020, in contemplation of the company closing its planned October 2020 IPO, with the proceeds being used to repay the outstanding $511 million on its second lien term loan. McAfee, LLC completed its IPO on Oct. 22, 2020 and the repayment of the second-lien term loan was confirmed in an 8-k, filed Oct. 26, 2020. Fitch regards the transaction positively as Fitch calculated pro forma gross leverage declined meaningfully to 4.4x from 4.9x. Fitch also believes that public ownership of the company will encourage a more conservative financial policy than private equity ownership, reducing a potential overhang on the credit. Fitch recognizes the potential for shareholder returns in the form of both dividends and share repurchases. The Stable Outlook incorporates Fitch's view that the company occupies a leading market position in the cybersecurity market and continues to execute on its core growth strategy. Fitch expects the company to maintain its leading market position, supported by high brand awareness and a competitive product portfolio. Fitch believes that McAfee's positive FCF profile will allow continued investment in its core suite of products across the both Enterprise and Consumer segments. KEY RATING DRIVERS Moderate Leverage Profile: Fitch calculated current leverage at McAfee, as measured by total debt with equity credit-to-operating EBITDA, stands at 4.4x, pro forma for paydown of the second lien debt. Since being spun off from Intel, the company has issued new debt to fund the LBO, acquisitions, and to pay a dividend to sponsors. Fitch believes the company is likely to manage its leverage profile more conservatively following the IPO. Fitch is projecting leverage to trend downwards to 3.3x over the rating horizon, consistent with other 'BB'-rated corporations. Secular Cyber-Security Tailwinds: McAfee's exposure to the IT security industry is a positive for the company's credit profile. McAfee expects continued growth in its Enterprise segment as corporations invest in cloud-based technology, which will increase the complexity of their security needs. Growth within McAfee's consumer segment is expected to continue as McAfee's strong brand awareness and suite of products positions the company to protect a variety of devices in a consumers IoT ecosystem, while high recurring revenues provide a solid base to build upon. IT Security Threats Increasingly Complex: IT security threats have evolved from PC-centric to mobile devices, networks and user identities. The evolving threats enable a continuous stream of niche solutions to develop, addressing threats beyond the traditional PC-centric security to protect users, data and networks at various levels of the internet. While some of these solutions were developed by legacy cybersecurity providers, many were created by suppliers with narrow expertise. McAfee has recently placed an increased emphasis on providing security to mobile devices in order to align its product offerings to modern computing habits. Fragmented Industry: The cybersecurity market is highly fragmented, but only a limited number of providers have the scale, breadth of offerings and technical capabilities to deliver a platform-based security approach. A number of smaller providers provide security services in an ad-hoc manner to businesses but lack the scale to be a full-service provider. McAfee has the scale and breadth of offering to be the sole security provider for many enterprises. The fragmented market also provides a wealth of acquisition targets for a competitor of McAfee's size. Reliance of distributors: The company relies on distributors for a substantial proportion of its sales and the loss of a significant relationship could substantially impact revenue. For the fiscal year ended Dec. 28, 2019, the company had three distributors which exceed 5% of revenues or accounts receivable. The largest distributor relationships are with Ingram Micro Inc. (BBB-), Arrow Electronics, Inc. (BBB-) and Tech Data Corporation (BB+), which accounted for 15%, 7% and 6% of total revenue, respectively. Ingram Micro Inc., Arrow Electronics, Inc. and Tech Data Corporation account for 29%, 4% and 3% of accounts receivable, respectively. DERIVATION SUMMARY The 'BB-' rating for McAfee is supported by consistently positive FCF, adequate liquidity and pro forma gross leverage of 4.4x. Fitch expects the company to maintain EBITDA in the mid-30% range, driven by high 40% margins in the Consumer Segment and mid-20% margins in the Enterprise segment. The lower overall margins at McAfee than pure play consumer cybersecurity competitors, specifically NortonLifeLock, Inc. (BB+/Stable), primarily reflect lower margins in the Enterprise segment, rather than and underlying weakness in the McAfee's business. Relative to technology peers Constellation Software (BBB+/Stable), Citrix Systems (BBB/Stable) and Cadence Design Systems (BBB+/Stable), McAfee has similar profitability but a weaker financial structure. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer -- Mid-single-digit revenue growth in 2020 driven by Consumer segment as Enterprise segment experience headwinds related to the coronavirus pandemic; -- Revenue growth continues in low single digits through 2023; -- EBITDA margins in mid-30% range, increasing to high-30% range as the Enterprise segment continues to take share and benefits from operating leverage, and Consumer segment margins are stable at approximately 50%; -- FCF margins in high teens to low-20% range over rating horizon; -- Shareholder returns of 20% of FCF annually; -- No substantial acquisitions over rating horizon. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Fitch's expectation of Gross Leverage as estimated by Total Debt with Equity Credit/Operating EBITDA below 3.5x; -- Mid-single-digits organic revenue growth implying stable market position; -- Sustained Fitch-defined EBITDA margins in the high 30% range. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Fitch's expectation of Gross Leverage as estimated by Total Debt with Equity Credit/Operating EBITDA above 4.5x; -- Sustained erosion of EBITDA and FCF margins; -- Negative revenue growth implying weakening market position. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: As of 2Q20, liquidity at McAfee consisted of approximately $257 million in cash and cash equivalents as well as an undrawn $500 million revolving credit facility. Fitch expects positive FCF in the mid-teens to low 20% range over the rating horizon. Fitch believes the company has adequate liquidity to fund continued growth throughout the rating horizon. Maturity Profile: As of 2Q20, debt at the company consisted of a $500 million revolver due 2022 with no current borrowings, $3.009 billion outstanding on a first-lien USD term loan due September 2024, $1.199 billion outstanding on a first-lien, EUR term loan due September 2024, and a $511 million outstanding on a second-lien term loan due September 2025. In October 2020, the company prepaid the entire amount outstanding on the second-lien term loan with the proceeds of the October IPO and extended the maturity on the $500 million revolver to September 2024. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material financial adjustments SOURCES OF INFORMATION 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). MCAFEE LLC: Moody's Upgrades CFR to B1, Outlook Stable ------------------------------------------------------ Moody's Investors Service upgraded McAfee, LLC's Corporate Family Rating (CFR) to B1 from B2; first lien debt rating to B1 from B2 and Probability of Default Rating (PDR) to B1-PD from B2-PD. The upgrade was driven by the transition to a publicly traded company and payoff of the second lien debt with proceeds from the IPO. This action concludes the ratings review initiated on October 15, 2020 when McAfee launched its IPO process. The ratings outlook is stable. RATINGS RATIONALE As a result of the debt paydown, leverage decreased to approximately 5x from just under 6x and pro forma free cash flow to debt increased to 6% from 4%. Moody's also expects the introduction of public shareholders (albeit limited to around 10% initially) and independent Board members will drive a more conservative approach to leverage and shareholder distributions than under full private ownership. The B1 CFR reflects McAfee's leading position across the consumer and enterprise endpoint security markets, track record of steady revenue growth, solid liquidity position offset by moderately high leverage and modest free cash flow. McAfee has grown at modest rates since 2014 and Moody's expects low to mid-single digit growth rates over the next several years. The majority of McAfee's sales come from the company's significant installed base which reflects relatively strong renewal rates. The consumer business is the largest and most profitable segment of McAfee and is expected to grow at mid-single digit rates. The consumer business is however, less "sticky" than traditional enterprise software and more susceptible to free alternatives and changes in the popularity of PC's. Though McAfee has diversified its enterprise business, its core endpoint business continues to face challenges from new market entrants while profitability lags behind many of its security industry peers. Moody's expects the company will make acquisitions to supplement its positions and occasionally use debt for full or partial funding. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation of low to mid-single digit revenue growth and leverage trending towards 4.5x over the next 12-18 months in the absence of debt funded acquisitions. The ratings could be upgraded if leverage is sustained below 4.5x, free cash flow to debt is sustained above 10% and the company continues to diversify its ownership base. The ratings could be downgraded if leverage is greater than 5.5x or free cash flow to debt falls below 3% on other than a temporary basis. The Speculative Grade Liquidity (SGL) rating of SGL-1 reflects very good liquidity based on an estimated $250 million of cash on hand post IPO and debt paydown, an undrawn $500 million revolving credit facility and positive free cash flow over the next 12-18 months. Moody's expects free cash flow of over $300 million after a newly initiated dividend over the next year. Similar to most security software providers, McAfee has limited environmental or social risk. McAfee likely benefited from work from home trends as a result of the recent pandemic. Moody's views the impact from COVID-19 as a social risk. Moody's views governance as improving with the addition of public shareholders and independent directors. Moody's expects McAfee's financial policies will be less aggressive with leverage declining over time. However, Intel and private equity firms, TPG, Thoma Bravo and GIC will still control around 90% of voting shares and retain the ability to appoint the majority of Board members. Although Moody's expects financial policies will be less aggressive post IPO, the current ownership makeup tempers upwards ratings movement. Upgrades: Issuer: McAfee, LLC Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Senior Secured 1st Lien Bank Credit Facility, Upgraded to B1 (LGD3) from B2 (LGD3) Assignments: Issuer: McAfee, LLC Speculative Grade Liquidity Rating, Assigned SGL-1 Outlook Actions: Issuer: McAfee, LLC Outlook, Changed To Stable From Rating Under Review McAfee is a leading security software provider to consumer and corporate customers. The company is headquartered in Santa Clara, CA. Revenue for the last twelve months ended June 30, 2020 was approximately $2.7 billion. The company is publicly listed but remains majority owned by Intel and private equity firms TPG and Thoma Bravo. The principal methodology used in these ratings was Software Industry published in August 2018. MEDICAL ASSOCIATES: MVMA Buying All Assets for $700K Cash --------------------------------------------------------- Medical Associates of Mt. Vernon, P.C., asks the U.S. Bankruptcy Court for the Eastern District of Virginia to authorize its Asset Purchase Agreement with Mount Vernon Medical Associates, P.C. ("MVMA") in connection with the private sale of substantially all assets for $700,000 cash, plus the assumption by the Buyer of all administrative expenses. The Debtor has determined that a prompt sale of its business assets used in connection with the daily operation of its business and the assumption and assignment of certain executory contracts of the Debtor are necessary to obtain the maximum value for the creditors. It has determined in its business judgment that cash flow from its business operations is likely to remain somewhat flat over the coming months, and that current levels of income and cash flow do not provide for monthly surplus necessary to fund a full repayment of federal tax claims over a projected repayment period and under a traditional Chapter 11 plan. Challenges to the Debtor's requirement to fully establish feasibility of a reorganization plan are such that it has been forced to consider alternatives to the filing and prosecution of such a plan. Ultimately, the Debtor has determined that a sale of substantially all assets to a newly capitalized entity to be formed and funded by current principals and physicians affiliated with its medical practice will provide a materially greater return than in a liquidation setting, and that such a sale is feasible, provides for the maintenance of existing jobs and the continuation of medical services provided to the local Northern Virginia community. Its determinations have resulted in a purchase offer from MVMA to acquire the Assets and the Assigned Contracts on the terms substantially set forth in the proposed APA. The Debtor believes, in its reasonable business judgment, that the MVMA offer is the highest and best offer available for the Assets and Assigned Contracts, and that the proposed sale of the Assets and assignment of the Assigned Contracts to MVMA is in the best interests of the Debtor and the creditors of the estate. It estimates that the purchase price provided for under the APA exceeds any likely recovery for the Assets in a Chapter 7 liquidation by more than $200,000, and that the only likely or potential purchasers are physicians currently affiliated with its medical practice. The Debtor has filed schedules in the bankruptcy proceeding which provide information relating to the Debtor's assets sought to be sold pursuant to this Sale Motion. At the time of filing, MAMV scheduled total assets of $637,319. However, the valuation likely overstates actual value of accounts receivable and other assets used by the Debtor in operation of is business. Liabilities of the Debtor as of the Petition Date are identified on the Schedules filed in the case and include over $4 million in secured claims alleging liens against the Debtor's assets. The Debtor believes and represents that the Internal Revenue Service holds a first position/priority lien against all of its assets, securing pre-petition tax claims in an amount of not less than $1.8 million. The Debtor additionally lists over $13 million in general unsecured claims herein, but over $12 million of these claims are related party or "insider" claims. Upon determination of the allowed amount of any Lien, the Debtor proposes to effect payment of such Lien in cash, from proceeds of sale, effecting a money satisfaction of any bona fide Liens as determined and allowed by the Court. Accordingly, the Debtor submits that the sale of the Assets free and clear of encumbrances satisfies the statutory prerequisites of section 363(f) of the Bankruptcy Code. The APA provides for an assignment to the Buyer of all of the Debtor's rights, title and interest in and to the following leases of medical office space: (a) Lease of office space at 8988 Lorton Station Boulevard, Suite 100, Lorton, Virginia from Laurel Hill Site Center, LLC. (b) Lease of office space at 6128 Brandon Avenue, Suite 201, Springfield, Virginia from Springfield Development Group. (c) Lease of office space at 8109 Hinson Farm Road, Alexandria, Virginia from SL Hinson Assoc., LLLP, as the same will be amended by agreement with lessor prior to assignment and assumption at Closing. (d) Lease of office space at 8109 Hinson Farm Road, Alexandria, Virginia from Beal Lowen, as the same will be amended by agreement with lessor prior to assignment and assumption at Closing. Any lease of medical equipment, including leases of x-ray equipment and laser machines and equipment, will not be assigned as part of the proposed transaction. The Debtor believes that MVMA is proceeding in good faith in the purchase of the Assets and assignment of the Assigned Contracts, and therefore is entitled to the protection of section 363(m) of the Bankruptcy Code. The Buyer is a newly formed Virginia professional corporation which has been formed and is owned by Dr. Albert Herrera and Dr. Stephanie Carter. Drs. Herrera and Carter are the Debtor's principal owners and have accessed funding from family assets and personal retirement accounts in order to capitalize the Buyer sufficiently to effect the payment of the purchase price as set forth in the APA. Because the physicians engaged in the Debtor's medical practice typically engage in long term relationships with their patients, the only likely purchaser of the Debtor’s medical practice would be the medical practitioners currently providing services through the Debtor. Because the transaction proposed herein was negotiated privately, there are no brokerage fees or other costs of sale associated with the proposed transaction. Through the Motion, the Debtor asks the entry of an order or orders as follows: (a) authorizing and approving the APA with MVMA; (b) authorizing the sale of the Assets and the assumption and assignment of the Assigned Contracts pursuant to the APA or any Modified Agreement free and clear of all liens, claims, interests and encumbrances, with any such liens that may be determined to attach to the proceeds of sale; (c) finding that the buyer is a good faith purchaser of the Assets within the meaning of section 363(m) of the Bankruptcy Code; (d) approving the Debtor's assumption of the Assigned Contracts and the assignment thereafter to MVMA, pursuant to the terms and conditions of the APA; (e) making certain findings of fact and conclusions of law in connection with the foregoing; (f) providing for hearing the proposed sale of the Debtor's business assets; and (e) granting other and related relief and making such other findings that are consistent with the Motion. A copy of the APA is available at https://tinyurl.com/y6jp5ql2 from PacerMonitor.com free of charge. About Medical Associates of Mt. Vernon Medical Associates of Mt. Vernon, P.C. is a medical practice with locations in Alexandria, Lorton and Springfield. Its internal medicine care includes, but is not limited to, physical examinations, routine and sick appointments, pre-operative examinations, immunizations, well-woman examinations, and annual wellness visits for medicare. Medical Associates of Mt. Vernon sought Chapter 11 protection (Bankr. W.D. Va. Case No. 20-11615) on July 10, 2020. Medical Associates President Albert Herrera signed the petition. At the time of the filing, the Debtor was estimated to have assets of $500,000 to $1 million and estimated liabilities of $10 million to $50 million. Judge Klinette H. Kindred oversees the case. The Debtor has tapped Henry & O'Donnell, P.C. as its legal counsel and Rubino & Company as its accountant. MEMENTO MORI: Pellegrini Buying Interest in Mt. Charleston for $2K ------------------------------------------------------------------ Memento Mori, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Norther Carolina to authorize the sale of its 26.58% interest in Mt. Charleston Landlord, LLC to Jim Pellegrini for $2,000. The Debtor has determined that it is in the best interests of the Estate for it to liquidate certain personal property. Specifically, the Debtor asks authority to sell the Interest to the Buyer for $2,000. The sale of the Interest will be in the best interest of the Estate, and will be made for a sound business purpose. The Debtor asks that the sale of the Interest be made free and clear of any and all liens, encumbrances, claims, rights and other interests, including but not limited to the following: Any and all property taxes due and owing to any City, County or municipal corporation, including without limitation any such taxes owing to the Wake County and/or Durham County Tax Collectors. The proceeds of the sale will be subject to payment of all reasonable administrative costs of the proceeding as the Court may allow. Objections, if any, must be filed within 21 days from the date of Notice service. About Memento Mori Based in Cary, North Carolina, Memento Mori, LLC, d/b/a Tonic Remedies, f/d/b/a Mayton Landlord, LLC, d/b/a The Verandah, fdba King's Daughter Landlord, LLC, d/b/a The King's Daughters Inn, f/d/b/a Kings Daughter Tenant, LLC, fdba DMC Historic Restoration, LLC, dba Rhea Hospitality, d/b/a The Mayton Inn, filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 18-04661) on Sept. 20, 2018. The case is assigned to Hon. David M. Warren. The petition was signed by Colin Crossman, manager. At the time of filing, the total assets of the Debtor is $24,198,540, while total liabilities is $20,809,509. MICHAEL'S GOURMET: Reaches Deal With TD Bank; Plan Approved ----------------------------------------------------------- Michael's Gourmet Coffee's, Inc., won court approval of its Chapter 11 Plan of Reorganization. On Aug. 25, 2020, Michael's Gourmet Coffee's filed with the U.S. Bankruptcy Court for the Southern District of Florida a Disclosure Statement with respect to a Plan. On Aug. 28, 2020, Judge Scott M. Grossman conditionally approved the Disclosure Statement and set Oct. 20, 2020 as the hearing on final approval of the Disclosure Statement and confirmation of the Plan. The Debtor's cash on hand will be available for the payment in whole or in part of the Allowed Administrative Expense Claims, Priority Tax Claims, the United States Trustee Fees, and the amounts due to creditors as set for in the Proponent's Certificate. The Debtor estimates that Class 5 creditors will receive a distribution of approximately 2% on account of the Allowed General Unsecured Claims On Oct. 28, 2020, the Court ordered that: 1. The Debtor's Disclosure Statement (DE 79) is APPROVED. 2. The Debtor's Plan of Reorganization (DE 80) is CONFIRMED. The Plan Confirmation Order provides that pursuant to an agreement between Debtor and TD Bank, N.A., the treatment of TD Bank's claim is as follows: (a) TD Bank will retain a secured claim in the amount of $28,000 to be paid over 60 months, with interest at the rate of 5%, resulting in monthly principal and interest payments in the amount of $528.39, with the first payment to commence Nov. 1, 2020, and continuing each month thereafter until paid in full. Payments shall be made to: TD Bank, N.A. c/o Vance Talsma, VP SBA Workout 2130 Centrepark West Drive West Palm Beach FL 33409 Account # ending 9001 (b) TD Bank also holds general unsecured claim for the difference between the agreed balance set forth in paragraph (a) above of $99,882.72 and the agreed value and payment of $28,000.00 for a general unsecured claim of $71,883. After applying the adequate protection payments received of $3,500, TD Bank shall have a total general unsecured claim of $68,383 regardless of the original classification in any proof of claim that may be filed. The general unsecured claim of $68,382.72 will be paid pursuant to treatment for general unsecured creditors as set forth in the Plan. (c) The Debtor shall be responsible for maintaining insurance on the Assets, and any failure to do so shall constitute a default of the terms set forth in this Order. (d)If TD Bank alleges a default, counsel for TD Bank shall serve both Debtor and Debtors' counsel of record with written notice of the specific facts of the delinquency. TD Bank shall have the right to file an Affidavit of Default with the Court. The Debtor shall then have 10 business days within which to cure the default -- or otherwise file a counter affidavit contesting the default. If the default is not cured -- or no counter affidavit is filed by the Debtor, TD Bank shall be entitled to submit an order granting relief from the automatic stay in rem as to the related collateral. If a counter affidavit has been filed, the Court will either schedule a hearing on the alleged default, or rule from the written record at its discretion. TD Bank will be entitled to seek recovery of the full amount of the prepetition claim, plus the contractual postpetition interest rate and fees, less any payments received. Debtor acknowledges the validity of TD Bank's claim and the right of TD Bank to obtain a judgment in the event of a plan default. (e) Should the Debtor fail to complete all plan payments, fail to obtain a discharge, or this case is dismissed or converted to a Chapter 7, the original lien shall remain in full effect. A copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/C2KJSXQ/Michaels_Gourmet_Coffees_Inc__flsbke-19-25705__0113.0.pdf?mcid=tGE4TAMA About Michael's Gourmet Coffee's Based in Pompano Beach, Florida, Michael's Gourmet Coffee's, Inc. sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 19-25705) on Nov 21, 2019. In the petition signed by Joseph Mistretta, president, the Debtor was estimated to have under $1 million in both assets and liabilities. Chad T. Van Horn, Esq., represents the Debtor. MOBIQUITY TECHNOLOGIES: Posts $4 Million Net Loss in Third Quarter ------------------------------------------------------------------ Mobiquity Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net comprehensive loss of $3.96 million on $1.43 million of revenue for the three months ended Sept. 30, 2020, compared to a net comprehensive loss of $4.21 million on $2.80 million of revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net comprehensive loss of $10.98 million on $3.03 million of revenue compared to a net comprehensive loss of $34.61 million on $6.65 million of revenue for the same period last year. As of Sept. 30, 2020, the Company had $13.25 million in total assets, $6.67 million in total liabilities, and $6.58 million in total stockholders' equity. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. As of Sept. 30, 2020, the Company had an accumulated deficit of $182,116,945. These factors raise substantial doubt regarding the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1084267/000168316820003615/mobiquity_10q-093020.htm About Mobiquity Headquartered in Shoreham, NY, Mobiquity Technologies, Inc. owns 100% of Advangelists, LLC and 100% of Mobiquity Networks, Inc. as wholly owned subsidiaries. Advangelists is a developer of advertising and marketing technology focused on the creation, automation, and maintenance of an advertising technology operating system (or ATOS). Advangelists' ATOS platform blends artificial intelligence (or AI) and machine learning (ML) based optimization technology for automatic ad serving that manages and runs digital advertising inventory and campaigns. Mobiquity Networks has evolved and grown from a mobile advertising technology company focused on driving Foot-traffic throughout its indoor network, into a next generation location data intelligence company. Mobiquity recorded a net loss of $43.75 million for the year ended Dec. 31, 2019, compared to a net loss of $58.51 million for the year ended Dec. 31, 2018. BF Borgers CPA PC, in Lakewood, CO, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 24, 2020 citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. MODA INGLESIDE: S&P Raises Long-Term ICR to 'BB'; Outlook Stable ---------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Moda Ingleside Energy Center LLC (Moda) to 'BB' from 'BB-'. S&P also raised its issue-level rating on the company's senior secured debt to 'BBB-' from 'BB+'. The recovery rating is unchanged at '1' and indicated very high recovery (90%-100%; rounded estimate 95%) on the company's senior secured first-lien term loan in the event of default. S&P said, "The stable outlook reflects our expectation that Moda's adjusted debt to EBITDA will be 2.5x-3.0x on a sustained basis. In addition, we expect that the company will at least maintain, or expand, its contractual profile of long-term fixed-fee contracts with creditworthy counterparties." "We no longer view EnCap Flatrock Midstream as a financial sponsor. Moda's parent has been wholly owned by EnCap Flatrock Midstream since 2015. We initially assessed EnCap Flatrock as a financial sponsor, as we expected it to implement aggressive policies, such as using leverage to generate high returns on an investment within a short holding period. We have revised this designation because EnCap Flatrock has demonstrated a more conservative approach in the portfolio companies that we rate, despite having a relatively short holding period of three-five years." Moda's credit metrics are improving as growth projects are contributing meaningfully to free cash flows. Over the past two years, Moda has been undergoing a significant capital spending program, which resulted in weaker credit metrics because the assets had yet to generate cash flows. Most of the buildout is now completed, including additional storage capabilities totaling about 15.6 million barrels (bbl) of capacity. The company has also acquired Occidental Petroleum Corp.'s (OXY; BB+/Watch Neg/B) remaining stake in Cactus II, bringing Moda's total ownership in the pipeline to 20%. S&P sees the execution risk of upcoming projects, such as the second very large crude carrier (VLCC) berth upgrade, as mitigated given the company's track record of execution. S&P said, "We project Moda's EBITDA will be above $200 million, which leaves significant discretionary cash flow. At this stage, we believe Moda would prioritize new projects that complement its asset base in its capital allocation decisions over large dividend payments to EnCap Flatrock. This results in a weighted-average debt to EBITDA of 2.5x-3.0x over our forecast horizon." Moda has limited scale, scope, and diversification, given its focus on the Permian basin, and faces some customer concentration risk. Moda has established itself as the leading export facility in the U.S., largely driven by its first-mover advantage in terms of VLCC capabilities and its location at Ingleside near the Permian. The company's configuration allows shippers to load at a rate of up to 160,000 bbl per hour across its three crude berths. This loading capacity is much higher than that of peers and generates material cost savings for the company's counterparties. This has resulted in Moda acquiring additional take-or-pay contracts with new investment-grade counterparties. The impact of the downturn in commodity prices, which has resulted in the cancellation of many VLCC projects, further reinforces Moda's position. Currently, LOOP LLC (BBB+/Stable/A-2) is the only company with full VLCC loading capabilities. However, Moda's proximity to the Permian and Eagle Ford is an advantage compared with LOOP in terms of pipeline transportation fees. However, Moda's diversity remains fairly limited, given that it operates out of only one basin, is exposed mostly to crude oil, and does not offer a wide range of services. While its counterparties' profile is improving in terms of diversity and credit quality as Moda is acquiring new contracts, it remains heavily weighted toward OXY, which is now rated non-investment-grade. Finally, although the company has increased in scale, it remains limited compared with other midstream peers that are much larger in terms of EBITDA. S&P said, "The stable outlook reflects our view that Moda will maintain debt to EBITDA at 2.5x-3.0 x on a sustained basis as it pursues additional expansion initiatives. We also expect the company will maintain its robust contractual profile as it acquires terminaling contracts with creditworthy counterparties." "We could consider a negative rating action if adjusted debt to EBITDA were sustained above 3.5x. This could result from counterparty nonpayment or operational difficulties. Any aggressive acquisition plans that increase leverage materially could also lead to a lower rating." "Although unlikely, we would consider taking a positive rating action if Moda's business risk profile improved, which would likely coincide with an expansion in its scale, scope, and diversification, while it maintains a similar level of leverage." MOMBO LLC: Lent Investments Buying All Assets for $150K ------------------------------------------------------- Mombo, LLC, asks the U.S. Bankruptcy Court for the District of New Hampshire to authorize the sale of substantially all assets to Lent Investments, LLC for $150,000, cash, free and clear of liens, claims, interests and encumbrances, all in accordance with the terms and conditions of their Asset Purchase and Sale Agreement and Assignment of Leases dated Oct. 6, 2020, subject to overbid. Prior to the bankruptcy filing, the Debtor owns and operates an upscale restaurant known as "Mombo" located in the Strawberry Banke section of Portsmouth, New Hampshire. Mombos was one of the top 4 or 5 restaurants in Portsmouth. It is attached to the Strawberry Banke Museum and has parking. So it is very desirable. The Debtor leases the real estate. By all accounts, the Debtor's restaurant was successful. When Covid hit, the restaurant, like all restaurants, struggled with curbside delivery. During that period, the Debtor faced a fatal event, its owner, Thomas Perron died suddenly in June, 2020. According to Perron's estate plan, the ownership of the restaurant was held in an inter vivos trust. Upon Perrons death, the trustee became Attorney David Mullhern of Portsmouth, New Hampshire, who has 100% authority to act on behalf of the Debtor. The Trustee immediately secured the restaurant premises and used the restaurant's cash on hand to maintain the premises while at the same time soliciting buyers for the restaurant. The Trustee attempted to hire business brokers but they were not interested in attempting to sell a restaurant in this market. The Trustee did obtain 6 or 7 interested parties in the restaurant. During the time the Trustee was soliciting offers, creditors kept calling for their money, particularly consumer deposit creditors that booked events and gave deposits. There are also gift card creditors and general creditors. There are no secured creditors at the time. The Trustee also paid off the 1% owner of the restaurant at the time. The Trustee accepted an offer from the Buyer to buy the Assets. Based upon the Trustee's desire to maximize value and create an orderly liquidation of the Debtor, the Trustee chose to put the company into Chapter 11 and solicit bids for the Assets through the 363 process. In the Chapter 11, the restaurant remains closed. The Trustee is only paying post-petition bills that he needs to pay to maintain the Assets. The lease on the property is believed to be current. The creditors consist of trade debt of approximately $270,779 and consumer deposit claims of known individuals of $55,775. There are also approximately $30,000 of gift cards on the balance sheet. The Sale will be approved independently of a plan of liquidation. It will be approved first and then a plan will be pproved. The Creditors can expect payments when a plan is approved. A plan is expected to be approved approximately 60 days after sale. The Debtor negotiated a P&S with the Buyer. The basic terms of the Sale to the Buyer are: A. Assets to Be Purchased by Buyer: The Buyer will acquire substantially all of the Assets except Excluded Assets B. Assets Excluded From Sale: Cash on hand, Chapter 5 Claims C. Purchase Price: $150,000, payable by wire transfer in USD at closing D. Deposit: $10,000 E. Closing: The P&S requires a closing 60 days after execution of the P&S F. Contingencies: Court approval; approval of the break-up fee The Assets are not subject to any liens at this time. The Trustee has "put the word out" and has solicited 6 or 7 interested parties in the restaurant. The Trustee did not obtain a broker, but tried. The broker would not get involved in the sale of a closed restaurant. The Debtor will solicit offers from competing bidders and has submitted a Bid Procedures Motion with accompanying detailed documentation of the proposed Sale. The Assets will be sold, "as is, where is," with no representations or warranties of any kind except as otherwise provided in the P&S. The Debtor asks that it be allowed to sell the Assets free and clear of all liens, claims, encumbrances and interests, if any. All liens, claims, encumbrances or interests, if any, will attach to the sales proceeds. The executory contracts Debtor intends to assume and assign include the lease of the premises and the VEND lease for certain restaurant equipment. The Sale is, in the business judgment of the Debtor, the only way to preserve the value of the Debtor for any creditor. There is simply no other viable option. Anyone may make a qualified counter-offer under the approved Bid Procedures by submitting such offer by the counter offer deadline of Nov. 11, 2020 at 5:00 p.m. (EST). To be a qualified Counter-Offer a Counter-Offer must: (1) offer at least $10,000 more than the existing offer from the Buyer or $160,000 dollars; (2) the Counter-Offeror must make a deposit of $10,000 to be held by the Debtor's counsel; (3) the Counter-Offeror must execute a P&S in the form of the existing P&S and agree to all terms of the P&S; (4) the Counter-Offeror must assume and take assignment of all Executory Contracts identified in the P&S; and (5) the Counter-Offeror must demonstrate the financial ability to close and fund the transaction. To the extent there are qualified Counter-Offers, the Debtor and other parties will determine what is the highest and best offer after further procedures are established by the Court. In the event that the Buyer is not the successful bidder for the Assets, then the Buyer will be entitled to a break-up fee of $10,000. Notwithstanding the P&S, the estate will retain Chapter 5 claims, not the Buyer. A hearing on the Motion is set for Nov. 18, 2020 at 9:00 a.m. The Objection Deadline is Nov. 11, 2020 at 5:00 p.m. (EST). A copy of the P&S is available at https://tinyurl.com/y4psl79a from PacerMonitor.com free of charge. Mombo, LLC, sought Chapter 11 protection (Bankr. D.N.H. Case No. 20-10868) on Oct. 6, 2020. MURRAY-CALLOWAY COUNTY: Moody's Affirms Ba2 on $22MM Bonds ---------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 rating assigned to Murray-Calloway County Public Hospital Corporation (KY), affecting $22 million of outstanding bonds. The outlook has been revised to stable from negative. RATINGS RATIONALE The revision of Murray-Calloway County Public Hospital Corporation's (MCCH) outlook to stable reflects expectations that the organization will sustain recent operational improvement demonstrated in fiscal 2020 following weaker performance in 2019. Affirmation of the Ba2 rating reflects that expected improvement in operating cash flow will allow MCCH to meet its growing long-term capital needs without material dilution of MCCH's absolute and relative liquidity measures. The affirmation will also reflect moderate debt structure risks, manageable levels of indirect debt and the organization's strong leading market position. To date, financial losses related to the COVID-19 shutdown outbreak have been offset by strong expense controls, the recognition of a settlement with Kentucky Medicaid, and federal grant funding. Ongoing physician recruitment and clinical program expansion, while requiring continued investments, are expected to drive favorable volume trends, stemming some outmigration of services and supporting market share. MCCH will remain challenged by its small size and the high reliance on governmental reimbursement. Longer-term economic impact will include an unfavorable shift in the payor mix with rising Medicaid and Medicare. RATING OUTLOOK The revision of the outlook to stable from negative reflects the expectation that recent margin improvement will be maintained at 2021 budgeted levels and liquidity will be maintained at current levels, even with the expected rise in capital spending. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Significant expansion of service lines or geographic reach resulting in enterprise growth and revenue diversification - Strengthened and sustained operating performance - Maintenance of strong balance sheet measures FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Inability to sustain financial and debt service coverage improvement as demonstrated in 2020; narrowing to covenants - Decline in cash reserves and relative liquidity metrics - Increase in debt or equivalents absent commensurate growth in cash flow - Further operating disruption or severe downturn in the economy associated with COVID-19 cases absent additional federal support LEGAL SECURITY The bonds are secured by a pledge of gross revenues and a first mortgage lien on MCCH's facilities. Financial covenants include minimum 1.25 times annual debt service coverage and a minimum 65 days cash on hand, measured at the obligated group at the end of each fiscal year. The obligated group includes all divisions of the MCCH including the physician enterprise division. As of September 30, 2020, MCCH reported to be in compliance with all debt covenants, with MCCH reporting 5.51 times debt service coverage and 224 days cash on hand (adjusted to 149 days after removal of CMS accelerated payments and potential CARES Act stimulus payback). PROFILE MCCH is an independent acute care public hospital with 152 licensed beds located in a rural area of southwest Kentucky. In FY 2019, MCCH generated $127 million of operating revenue and saw over 3,900 inpatient admissions. The hospital is jointly owned by the city of Murray, KY and Calloway County, but it does not receive any tax revenue or direct financial support from the city or county. METHODOLOGY The principal methodology used in this rating was Not-For-Profit Healthcare published in December 2018. NABORS INDUSTRIES: Fitch Lowers IDR to C on Debt Exchange --------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) for Nabors Industries, Ltd. and Nabors Industries, Inc. to 'C' from 'B-' following the company's announcement of an offer to exchange a series of senior unsecured notes for senior unsecured guaranteed notes. The downgrade results from Fitch viewing the transaction as a distressed debt exchange (DDE). Per Fitch's criteria, the IDR will be downgraded to Restricted Default (RD) upon the completion of the DDE. The IDR will subsequently be re-rated to reflect the post-DDE credit profile. Fitch has also downgraded the affected senior unsecured notes to 'C'/'RR6' from 'CCC'/'RR6'. Fitch has affirmed the rating on the Nabors Industries Inc. unsecured priority guaranteed revolving credit facility at 'BB-'/'RR1'. The 'B-'/'RR4' Nabors Industries Ltd. senior unsecured guaranteed notes are placed on Ratings Watch Negative to reflect potential notching implications caused by the proposed guaranteed notes. The Negative Outlook is removed. The transaction contemplates a tender offer to exchange certain senior unsecured notes for up to $300 million aggregate principal amount of newly issued 9.00% senior priority guaranteed notes due 2025. The notes will be guaranteed by each of the subsidiaries that guarantee the existing 7.25% senior guaranteed notes due 2026 and the 7.5% senior guaranteed notes due 2028 and certain subsidiaries that guarantee the company's revolving credit facility but that does not guarantee the existing guaranteed notes. The latter guarantees are expressly subordinate to the guarantees provided to the revolving credit facility. The acceptance priority level of the senior unsecured notes is governed by maturity with the nearest maturing notes having the highest priority. In addition, Nabors announced that it completed a private exchange in which $115 million of aggregate principal amount of its 0.75% notes due 2024 were exchanged for $50.485 million of newly issued senior priority guaranteed notes due 2025. These notes have similar guarantees to the proposed newly issued 9% senior priority guaranteed notes. Upon completion of the DDE, Fitch will assign ratings to the exchanged notes. It is not relevant to the ratings that the new securities will be the products of a DDE. KEY RATING DRIVERS Exchange Addresses Pending Maturities: The terms of the proposed transaction would address certain near-term debt maturities and, if successful, would provide Nabors with significant runway in hopes of benefitting from an increase in commodity prices from current historic lows. The transaction is structured to incentivize holders of notes with near-term maturities to accept the exchange. While a successful exchange would eliminate any significant maturities until 2025, Fitch does not expect a significant improvement for the drilling industry over the next 12-18 months and Nabors leverage metrics will remain weak until a recovery ensues. In addition, the complication of the capital structure with securities having varying degrees of guarantees will make it challenging for Nabors to access capital markets. U.S. Activity Has Weakened: Nabors' U.S. lower 48 rig count declined to 57 in June 2020 from an average of 108 for third-quarter 2019, although overall rig activity appears to have bottomed over the past several weeks. During the last commodity price downturn, Nabors' total U.S. margins declined to $5,324/day from $12,670/day in 2015 with total U.S. EBITDA declining to $161 million in 2017 from $513 million in 2015. Gross margins in second-quarter 2020 were $10,449 and are expected to decline to the $9,000 to $9,500 range in second-half 2020, although Fitch believes margins could materially decline in 2021 under its base case West Texas Intermediate (WTI) oil price of $42. Nabors is somewhat buffered by having some of the best U.S. pad-capable rigs providing for relatively resilient utilization and day rates. Super-spec rigs, which include ancillary technological offerings and other value-added services, continue to have high utilization within the industry. Nabors has strong market share with supermajors and large independent E&P operators, which are better able to sustain drilling during lower oil prices. International Segment Provides Stability: Nabors' international drilling segment exhibited resilience through-the-cycle and results consistent with the average international rig count. Rig counts are less sensitive to commodity price changes due to longer contract terms and a customer base of generally large public and sovereign oil companies. This segment acts as a favorable hedge to the more volatile U.S. rig count. International margins are slightly higher than U.S. margins and the longer term of the contracts provide for more clarity on future utilization. The company's international rig count remained steady over the past several years, although gross margins declined from a combination of sales of higher margin jack-ups, the expiration of a couple of high margin rigs, reactivation costs and operational challenges in Latin America. Nabors has seen new contracts in Mexico and Kuwait while the Colombia market has improved, but is also realizing weakness in Saudi Arabia and Kazakhstan, where some rigs have come off contract. Looming Maturity Wall: Nabors issued $1 billion of notes in January 2020 that materially reduced the maturity wall, although there are still significant maturities to address. The company has $154 million is due in 2021 and $193 million is due in 2023 as of June 30, 2020. The proposed exchange is expected to address these near-term maturities and provide sufficient runway until 2023 when the revolver matures. Adequate Near-Term Liquidity: Nabors has a $1.013 billion 2018 guaranteed revolver due in 2023. The revolver has a financial maintenance covenant requiring minimum liquidity of $160 million and matures in October 2023. Fitch believes refinancing the revolver could be challenging given its high outstanding amount combined with significant bond maturities starting in 2024-2026. Cash stood at $494 million on June 30, 2020, although $355 million is in the Saudi Aramco joint venture (JV) and not available to Nabors. Convertible Note Put: Nabors received a notice of delisting from the NYSE in April 2020 as its stock failed to maintain an average closing share price of at least $1 over a consecutive 30-day trading period. Nabors completed a reverse stock split, which resulted in the stock maintaining well above $1. However, due to weak conditions in the drilling market, equity valuations could move lower again. If the stock is delisted, this would result in a fundamental change under the senior exchangeable notes bond indenture. Under the terms of the indenture, noteholders would have the ability to put the bonds to Nabors at par. There is approximately $460 million outstanding following the recent private exchange transaction. Nabors could use a combination of FCF and revolver availability to refinance the notes, although waivers may be required under the credit facility. This would materially reduce liquidity at a time business conditions are worsening. DERIVATION SUMMARY Fitch compares Nabors with Precision Drilling (B+/Negative), which is also an onshore driller with exposure to the U.S. and Canadian markets. Nabors is estimated to have the third-largest market share in the U.S. at 12% compared with Precision at 8%. Nabors' gross margins in the U.S. are higher than Precision. This is aided by its offshore and Alaskan rig fleet, which operates at significantly higher margins. Precision has the highest market share in Canada, while Nabors has a smaller position. Nabors has a significant international presence, which typically has longer-term contracts, partially negating the volatility of the U.S. market. Precision has slightly better credit metrics than Nabors with debt/EBITDA of 3.8x compared with Nabors at 4.2x. Nabors does have more liquidity than Precision due to its larger revolver and higher availability. Both companies are expected to generate FCF over their respective forecast periods and use cash to reduce debt. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - West Texas Intermediate (WTI) oil prices of $38 per barrel (bbl) in 2020 increasing to $42/bbl in 2021, $47/bbl in 2022 and $50/bbl thereafter. - Henry Hub natural gas prices of $2.10 per thousand cubic feet (mcf) in 2020 and $2.45/mcf thereafter. - Revenue declines by 19% in 2020 and 14% in 2021 due to reduction in E&P capital spending. - Capex of $240 million in 2020 and $275 million in 2021 to maintain equipment given the view that there are no upgrades or expansions until utilization increases when prices are well above the base case price deck. - FCF is expected to be slightly negative to positive with the expectation that any FCF proceeds will be used to reduce debt. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Per Fitch's criteria, Nabors IDR will be downgraded to Restricted Default (RD) upon the completion of the debt exchange. The IDR will subsequently be re-rated to reflect the post-DDE credit profile. Relative to the prior 'B-' IDR, factors that would support a positive rating action include the following: -- Ability to address potential senior convertible bond put without weakening liquidity. -- Mid-cycle debt/EBITDA of below 3.5x on a sustained basis. -- Lease-adjusted FFO-gross leverage less than 4.5x. -- A demonstrated ability to address the upcoming maturity wall without reducing overall liquidity. Factors that could, individually or collectively, lead to negative rating action/downgrade: A post-DDE IDR that is lower than the previous 'B-' would reflect an expectation that the company will struggle to refinance upcoming maturities or liquidity materially weakens, leading Fitch to expect either another DDE or a more comprehensive restructuring. LIQUIDITY AND DEBT STRUCTURE Declining Liquidity: Nabors had $494 million of cash on hand as of June 30, 2020, although a significant amount is tied up at the Saudi Aramco JV. Nabors has a $1.013 billion 2018 guaranteed revolver due in 2023. The only financial covenant is a minimum liquidity requirement of $160 million. There was $560 million outstanding on the revolver and availability of $450 million as of June 30, 2020. The revolver matures in October 2023. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes Nabors would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern Approach: Nabors' going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. The going-concern EBITDA assumption for commodity sensitive issuers at a cyclical peak reflects the industry's move from top of the cycle commodity prices to mid-cycle conditions and intensifying competitive dynamics. The going-concern EBITDA assumption equals EBITDA estimated for 2022, which represents the emergence from a prolonged commodity price decline. Fitch assumes WTI oil prices of $38/bbl in 2020, $42/bbl in 2021, $47/bbl in 2022 and $50/bbl for the long term. This represents a 23% decline to fiscal 2019 EBITDA. The going-concern EBITDA assumption reflects a loss of customers and lower margins, as E&P companies pressure oil service firms to reduce operating costs. The assumption reflects corrective measures taken in the reorganization to offset adverse conditions that triggered default, such as cost-cutting and optimal deployment of assets. An enterprise value multiple of 4.0x EBITDA is applied to going-concern EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: The historical bankruptcy case study exit multiples for peer energy oilfield service companies have a wide range with a median of 7.2x and an average of 8.5x. The oil field service sub-sector ranges from 2.2x to 26.8x due to the more volatile nature of EBITDA swings in a downturn. Seventy-Seven Energy Inc., a strong comparison, emerged from bankruptcy in August 2016 with a midpoint enterprise value of $800 million resulting in a post-emergence EBITDA multiple of 5.6x based on 2017 forecast EBITDA of $144 million. The company was subsequently acquired by Patterson-UTI Energy Inc. for $1.76 billion, resulting in a 12.0x multiple based on 2017 forecast EBITDA. At that point in the cycle, commodity prices were increasing and the oilfield service companies were believed to be moving in an upward trend. Fitch used a multiple of 4.0x to estimate a value for Nabors because of concerns of a downturn with a longer duration and a high mix of international rigs that are not easily mobilized. 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 assigns a liquidation value to each rig based on management discussions, comparable market transaction values, and upgrades and new build cost estimates. Different values were applied to top of the line super spec rigs, lower-value super spec rigs, non-super spec rigs, and higher value international rigs. The going-concern value was estimated at $2.22 billion, or approximately $5 million per rig. The guaranteed credit facility is assumed to be fully drawn upon default and is super senior in the waterfall. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' for the guaranteed credit facility of $1.013 billion, a recovery of 'RR3' for the guaranteed notes subordinated to the guaranteed credit facility of $1.0 billion and the assumption Nabors would likely use capacity under the guaranteed notes covenants to issue additional debt at this level of $1.5 billion, and a recovery of 'RR6' for the senior unsecured guaranteed notes of $1.837 billion. SUMMARY OF FINANCIAL ADJUSTMENTS No material adjustments were made. 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. NABORS INDUSTRIES: S&P Cuts ICR to 'SD' on Completed Tender Offer ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based onshore drilling contractor Nabors Industries Ltd. to 'SD' (selective default) from 'CCC+', its issue-level rating on its 0.75% exchangeable notes due 2024 to 'D', and its issue-level ratings on the notes involved in the tender offers to 'CC'. At the same time, S&P is affirming its 'CCC-' issue-level rating on the company's 4.625% notes maturing in 2021 because the early tender offer is at par, the company has liquidity under its credit facility to fund the maturity, and the new notes would rank higher in the capital structure and receive a higher coupon The downgrade follows Nabors' completion of a private exchange, whereby it exchanged $115 million of the principal amount of its 0.75% exchangeable bonds due 2024 for $50.485 million of new senior priority guaranteed notes due 2025. S&P said, "In our view, the higher interest rate and additional guarantees are insufficient compensation to offset the extended maturity and significant discount to par. Therefore, we consider the transaction to be a distressed exchange and tantamount to a default." Additionally, Nabors Industries Ltd. announced cash tender offers for the following debt securities: -- 4.625% senior notes due 2021--for $1,000 per $1,000 of principal, including a $50 early tender premium; -- 5.5% senior notes due 2023--for $600 per $1,000 of principal; -- 5.10% senior notes due 2023--for $600 per $1,000 of principal; -- 5.75% senior notes due 2025--for $375 per $1,000 of principal; -- 0.75% senior exchangeable notes due 2024--for $350 per $1,000 of principal; -- Senior guaranteed notes due 2026--for $525 per $1,000 of principal; and -- Senior guaranteed notes due 2028--for $525 per $1,000 of principal. The tender offers are for any and all of its notes maturing in 2021, 2023, and 2025. The 0.75% senior exchangeable notes maturing in 2024 have a cap of $200 million and the guaranteed notes maturing in 2026 and 2028 each have a cap of $50 million. The early tender period ends as of 5:00 p.m. Eastern Standard Time (EST) on Nov. 12, 2020, and the tender offer period ends as of 11:59 p.m. EST on Nov. 27, 2020. If consummated as proposed, S&P would view the repurchases as distressed debt exchanges because they offer the debtholders less than they were originally promised under the securities and the company has an unsustainable capital structure, a high debt burden, and is facing weak industry fundamentals. S&P has lowered its issue-level ratings on the debt securities as follows: -- 5.5% senior notes due 2023 to 'CC' from 'CCC-'; -- 5.10% senior notes due 2023 to 'CC' from 'CCC-'; -- 5.75% senior notes due 2025 to 'CC' from 'CCC-'; -- 0.75% senior exchangeable notes due 2024 to 'D' from 'CCC-'; -- Senior guaranteed notes due 2026 to 'CC' from 'CCC+'; and -- Senior guaranteed notes due 2028 to 'CC' from 'CCC+'. S&P said, "We intend to review our ratings on Nabors after the close of the tender offer. At that time, we will incorporate its new capital structure and our forward-looking opinion of its creditworthiness when determining our rating." NATIONAL CINEMEDIA: Moody's Lowers CFR to Caa1, Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded National CineMedia, LLC's ratings, including the Corporate Family Rating to Caa1 from B2 and changed the rating outlook to stable from negative. The two-notch downgrade reflects Moody's expectation for weak operating performance over the next year as a result of prolonged theater closures in certain markets triggered by the coronavirus pandemic and uncertainty as to the timing and extent of a recovery in attendance levels. Absent a sharp rebound in attendance levels, Moody's expects the company to burn cash over at least the next two quarters, which will reduce the company's cash position. Assuming that by the end of 2021 movie attendance level will gradually recover to roughly 70%-80% of the 2019 level, Moody's projects that NCM's FY2021 leverage will be very high, in the 8x-12x range, up from 4.2x at the end of 2019 (all ratios are Moody's adjusted). A number of factors create uncertainty about the extent of a recovery in attendance levels. The willingness of audiences to attend movies amid the pandemic, even with its assumption for improving conditions in 2021, is unclear. Furthermore, the acceleration of transformative social trends, such as rapidly growing competition from streaming video-on-demand platforms and shrinking theatrical windows, will likely further reduce movie attendance even after the outbreak is contained. Also, the sharp deterioration in financial health of the company's exhibitor partners could lead to a reduction in their theatre footprints over time. The coronavirus outbreak, the government measures put in place to contain it, and the weak economic outlook continue to disrupt economies and credit markets across sectors and regions. Its analysis has considered the effect on the performance of cinema advertisers from the restrictions on leisure and entertainment activities in public spaces and a gradual recovery for the coming year. The entertainment, leisure and media sectors have been significantly affected by the shock given state and federal restrictions to contain the pandemic and the industry's sensitivity to consumer sentiment. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. A summary of the rating actions is as follows: Downgraded: Issuer: National CineMedia, LLC Probability of Default Rating, downgraded to Caa1-PD from B2-PD Corporate Family Rating, downgraded to Caa1 from B2 Senior Secured Bank Credit Facility, downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured Regular Bond/Debenture, downgraded to B3 (LGD3) from B1 (LGD3) Senior Unsecured Regular Bond/Debenture, downgraded to Caa3 (LGD6) from Caa1 (LGD6) Outlook Actions: Issuer: National CineMedia, LLC Outlook, Revised to Stable from Negative RATINGS RATIONALE National CineMedia's Caa1 corporate family rating reflects the expected deterioration in operating performance because of temporary theater closings and uncertainty about the timing of a rebound in attendance and a limited liquidity cushion. The rating is also constrained by secular trends within the cinema industry that may continue to lead to declining attendance, the need to continue to invest in digital offerings, and a concentrated revenue base. The company's leverage was moderate prior to the coronavirus outbreak at 4.2x (including Moody's standard adjustments) at the end of 2019, but will likely increase to the 8x-12x range (Moody's adjusted) by the end of 2021 assuming theaters reopen across the country and activity resumes starting in April-July 2021. These credit challenges are counterbalanced by NCM's good competitive position within its niche market for on-screen advertising at movie theaters which historically supported strong EBITDA margins of roughly 50%. NCM's business benefits from its long-term contracts with the largest cinema owners in the US, who are also major shareholders. These contracts provide some stability to future cash flows once operations normalize following theater closures. Importantly, the pandemic has led to the temporary closure of movie theaters and a decline in the creditworthiness of NCM's exhibitor partners, including the founding members Regal (owned by Crown UK Holdco Limited (Caa3 negative) a subsidiary of CineWorld Group plc), Cinemark (CineMark USA, Inc., B3 negative), AMC (AMC Entertainment Holdings, Inc., Caa3 negative), which elevates the risk of business and structural disruptions if those companies need to restructure their operations or capital structures. Furthermore, the deterioration of the exhibitor partners' financial health elevates the risk of permanent closures of less productive theaters. A reduction in the number of theatres could lead to reduced attendances and lower advertising revenues for the company, but this risk is mitigated by the excess theatre capacity within the industry. The founding members' theaters represent the lion's share of the company's network -- 80% of NCM's total screens and 83% of total attendance in 2019. If a bankruptcy case were commenced by a founding member, it is possible that the exhibitor services agreement between NCM and that founding member could be restructured as part of the proceeding. The social trends within the cinema industry characterized by declining attendance are exacerbated by health safety concerns in public places due to the coronavirus pandemic. Entertainment shifted to the home during the outbreak, and there is a risk of a longer-term shift in customer behavior away from cinema. Competition from streaming services, which have increased their subscriber bases during the outbreak, is intensifying. Competition has expanded to include direct-to-consumer streaming platforms that are increasingly releasing movies directly to view-on-demand. The movie industry, and hence cinema advertisers, will be hurt if customary theatrical release windows continue to shorten as film studios increasingly release movies to online platforms concurrently with their theatrical release or very soon thereafter. Combined, these factors present substantial risks to the company over the next 12-18 months. The governance risk Moody's considers in NCM credit profile includes a shareholder-friendly financial strategy, which includes a requirement to distribute its "available cash" to its owners. Outside of the covenant suspension period (until July 1, 2021), NCM's credit facilities permit distributions at leverage levels up to 5x, as defined in the credit agreement. When the covenant suspension period ends and recovery is under way, NCM's distribution flexibility would allow the company to increase leverage meaningfully to return capital to shareholders and poses risks to lenders. The credit facility amendment that NCM secured in May has eased immediate pressure on the company's liquidity at that time by waiving its financial covenants through July 1, 2021. However, based on a weaker than anticipated recovery in the second half of 2020 and 2021, Moody's estimates that the company may need to seek covenant relief beyond July 1, 2021 and might also may need a waiver for the $55 million minimum liquidity requirement under its latest amendment. As of June 30, 2020, NCM had $168 million in cash (this excludes $68.5 million cash at holdco NCM, Inc) and $30 million in accounts receivable. With a monthly cash burn of approximately $10-$11 million, the company has sufficient liquidity to sustain itself for the next year without material in-theater advertising revenue. Moody's assumes that NCM will take the necessary pro-active steps to ensure its continued compliance with the credit facility covenants. The stable outlook reflects its expectation that the company will obtain a covenant waiver that covers the full year 2021 and for a gradual recovery of operations in 2021, with revenue in the $300-$350 million range (or 70%-80% of 2019 level). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS NCM's rating could be downgraded if there is a sharp deterioration in liquidity, a higher than anticipated cash burn or a slower than expected rebound in attendance levels in 2021. The ratings could also be pressured by a continued deterioration in the creditworthiness of the exhibitor partners or a growing number of permanent movie theaters closures that are likely to pressure the company's operations. The ratings could be upgraded if NCM improves its earnings and cash flow such that Debt-to-EBITDA is expected to be sustained under 6x (Moody's adjusted), the company improves its liquidity, and the demand environment is supportive of revenue and earnings growth. The principal methodology used in these ratings was Media Industry published in June 2017. National CineMedia, LLC (NCM), headquartered in Centennial, Colorado, is a privately held joint venture operator of a leading digital in-theater advertising network in North America. National CineMedia, Inc. is NCM's publicly traded managing owner and held a 48% ownership interest in NCM as of March 26, 2020. The remaining 52% interest is collectively held by founding member theaters including Cinemark Holdings, Inc. (25.1%), and Regal CineMedia Holdings, LLC (26%). AMC Entertainment Inc. (0.9%). NEPHROS INC: Paul Mieyal Resigns from Board ------------------------------------------- Paul A. Mieyal resigned from the Board of Directors of Nephros, Inc., effective Oct. 28, 2020. Mr. Mieyal's resignation was not due to a disagreement with the Company. Mr. Mieyal was one of two directors nominated to the Company's Board of Directors pursuant to the 2007 investor rights agreement between the Company and certain entities affiliated with Wexford Capital LP. Wexford has the right to nominate Mr. Mieyal's successor and, until Wexford nominates such successor, one seat on the Company's Board of Directors will remain vacant. About Nephros Inc. River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which are generally classified as ultrafilters, are primarily used in hospitals for the prevention of infection from water-borne pathogens, such as legionella and pseudomonas, and in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate. Nephros reported a net loss of $3.18 million for the year ended Dec. 31, 2019, compared to a net loss of $3.33 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $16.65 million in total assets, $4.37 million in total liabilities, and $12.27 million in total stockholders' equity. NPC INT'L: Franchisor Wendy's Might Bid for Restaurants ------------------------------------------------------- RESTAURANT Business Online reports that Wendy's is considering a bid for the nearly 400 restaurants operated under its name by bankrupt franchisee NPC International, according to a federal securities filing on Monday. The burger chain, eager to have a say in the sale of those Wendy's restaurants, said it is considering making a bid as part of a consortium with a group of pre-qualified franchisees. The franchisor said "several existing and new franchisees" would ultimately purchase the restaurants -- though it could acquire "at most one or two markets" in the process. The filing is indicative of the steps Wendy's is willing to take to ensure that the restaurants are sold to franchisees it prefers. About NPC International Inc. NPC International, Inc. -- https://www.npcinternational.com/ -- is a franchisee company with over 1,600 franchised restaurants across two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states and the District of Columbia. NPC International and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33353) on July 1, 2020. At the time of the filing, the Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy counsel; Alixpartners, LLP as financial advisor; Greenhill & Co., LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims, noticing and solicitation agent and administrative advisor. OWENS PRECISION: Gieseke Named as Chapter 11 Trustee ---------------------------------------------------- The U.S. Trustee for Region 17 has appointed W. Donald Gieseke, as the chapter 11 trustee for the bankruptcy estate of Owens Precision, Inc. About Owens Precision Owens Precision, Inc. -- http://owensprecision.com/-- is a Carson City, Nevada-based CNC machining shop that provides contract manufacturing services to the aerospace, defense, semiconductor, and process control industries. Owens Precision filed a Chapter 11 petition (Bankr. D. Nev. Case No. 19-51323) on Nov. 12, 2019 in Reno, Nevada. In the petition signed by James Mayfield, president and director of Owens Precision, Inc., the Debtor was estimated with assets $1 million to $10 million, and liabilities within the same range. Judge Bruce T. Beesley oversees the case. The Verstandig Law Firm, LLC, is the Debtor's counsel. OWENS-ILLINOIS GROUP: Moody's Lowers CFR to B1, Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Owens-Illinois Group, Inc. (OI Group) to B1 from Ba3 and the Probability of Default Rating (PDR) to B1-PD from Ba3-PD. Moody's also downgraded the rating on the company's existing senior unsecured notes at subsidiary OI European Group B.V. to B1 from Ba3 and the senior unsecured notes at subsidiary Owens-Brockway Glass Container, Inc. to B3 from B1. The Speculative Grade Liquidity rating is SGL-2. The ratings outlook is revised to stable from negative. The downgrade of the CFR to B1 reflects Moody's expectation that credit metrics will improve, but remain weak over the next 12 months as the company continues to struggle with sluggish end markets and the consequent low fixed cost absorption. Moody's expects debt to LTM EBITDA to improve to 5.2x and free cash flow to debt to be over 3.5% by the end of 2021. The company is expected to benefit from the dedication of free cash flow to debt reduction, some recovery in the beer end market from the coronavirus pandemic and cost cutting. OI Group is also expected to benefit from some new business in food and other beverages and some asset sales. However, the beer end market is expected to remain weak given ongoing social distancing regulations in bars and restaurants and continued weakness in mainstream beer as consumers prefer other alcoholic beverages. The downgrade of the senior unsecured notes at subsidiary Owens-Brockway Glass Container, Inc. to B3 from B1 reflects the increased incremental utilization of the revolver in the Loss Given Default Methodology (LGD) at the B1 CFR and the decline in the asbestos-related liability. The stable rating outlook reflects an expectation that the company will dedicate free cash flow to debt reduction, realize the improvements in sales and margins, and achieve the projected improvements in credit metrics. OI Group has some exposure to industries that may be negatively affected by the rapid and widening spread of the coronavirus outbreak, mainly bars and restaurants. However, the company has exposure to those that are expected to benefit, including food and beverage. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Governance risks are low given that OI Group is a public company and all 12 of its board members are independent. The company recently suspended its dividend and share repurchases in order to improve its credit profile. Downgrades: Issuer: Owens-Illinois Group, Inc. Corporate Family Rating, Downgraded to B1 from Ba3 Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Issuer: OI European Group B.V. Gtd. Global Notes, Downgraded to B1 (LGD4) from Ba3 (LGD4) Issuer: Owens-Brockway Glass Container, Inc. Global Notes, Downgraded to B3 (LGD5) from B1 (LGD5) Gtd. Senior Global Notes, Downgraded to B3 (LGD5) from B1 (LGD5) Outlook Actions: Issuer: OI European Group B.V. Outlook, Changed To Stable From Negative Issuer: Owens-Brockway Glass Container, Inc. Outlook, Changed To Stable From Negative Issuer: Owens-Illinois Group, Inc. Outlook, Changed To Stable From Negative Withdrawals: Issuer: OI European Group B.V. Gtd. Senior Global Notes, Withdrawn , previously rated Ba3 (LGD4) RATINGS RATIONALE Weaknesses in OI's credit profile include high leverage, a high product concentration of sales, and potential volatility in cash flow from the asbestos-related liabilities. The company has high fixed costs given the energy required to run the furnaces and the majority of sales are from developed markets where growth is low. Strengths in the company's credit profile include a high exposure to food and beverage end markets, long-term relationships with blue-chip customers and geographic diversity. The company also benefits from the good competitive equilibrium in the industry and good liquidity. The speculative grade liquidity rating of SGL-2 reflects the company's good liquidity profile including large cash balances, an expectation of good positive free cash flow and good external liquidity. OI Group generally holds a significant cash balance of approximately $400 million, but is expected to hold approximately $700 million over the next 12 months to enhance liquidity in case of a second wave of the coronavirus pandemic. OI Group has a $300 million revolver and a $1,200 million multicurrency revolver which both expire June 2024 and are more than sufficient to cover working capital, capex and interest expense. The revolver and term loan (not rated by Moody's) have one financial covenant, a maximum net leverage ratio of 5.0x which decreases to 4.75x at the end of 2Q21 and 4.5x at the end 4Q21. Cushion under the covenant is not expected to be sufficient to allow a full draw on the revolver, but availability is expected to be well more than needed through the peak working capital period in 1Q21. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if there is deterioration in the credit metrics or competitive environment or if the final settlement for the asbestos-related liability is greater than the $471 million currently reserved. Specifically, the rating could be downgraded if: -- Total adjusted debt to EBITDA is above 5.5 times -- EBITDA to interest coverage is below 3.0 times -- Free cash flow to debt is below 3.0% The ratings could be upgraded if there is evidence of a sustainable improvement in credit metrics within the context of a stable competitive environment. Specifically, the ratings could be upgraded if: -- Total adjusted debt to EBITDA is below 4.7 times -- EBITDA to interest coverage is above 4.5 times -- Free cash flow to debt is above 6.0% Headquartered in Perrysburg, Ohio, Owens-Illinois Group, Inc. is one of the leading global manufacturers of glass containers. OI Group primarily serves the beverage and food industry. Revenue for the 12 months ended June 30, 2020 was approximately $6.3 billion. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers Methodology published in September 2020. P&L DEVELOPMENT: Fitch Rates 5-Year Secured Notes 'B(EXP)' ---------------------------------------------------------- Fitch Ratings has assigned a 'B(EXP)'/'RR3' rating to P&L Development, LLC's five-year senior secured notes (co-borrowed by PLD Finance Corp.) and affirmed the Issuer Default Ratings (IDRs) of P&L Development Holdings, LLC (PLD) and P&L Development, LLC at 'B-' with Positive Rating Outlooks. The Positive Outlook reflect expected deleveraging through growth in EBITDA as the company onboards new contracts and benefits from pandemic-related demand for products. Fitch also affirmed the rating of the Term Loan at 'B+'/'RR2', which will expire upon issuance of the senior secured notes. KEY RATING DRIVERS The $415 million of proceeds will be used to repay outstanding Asset-Based Lending revolver borrowings and to refinance the existing first-lien term loan and other outstanding Avema debt. PLD intends to upsize its existing ABL revolving facility to $85 million from $60 million. The refinancing is expected to moderately increase leverage, with PLDH expected to have approximately $519 million of debt outstanding after the refinancing, including $87 million of preferred equity. Coronavirus Tailwinds: PLD has benefited financially from the coronavirus pandemic. The company reported strong demand for products, with rubbing alcohol, hand sanitizer, analgesics, cough, and cold products being the most impacted. As a result of the pandemic, PLD also took advantage of an opportunity to fill and package 52 million bottles of hand sanitizer over the next 12 months at expected favorable margins. Teva Fully Integrated: PLD has fully integrated the Teva product portfolio, and Fitch expects meaningful growth contributions from its nicotine replacement therapy (NRT) products, private-label Voltaren gel and the continued growth of docosanol. The company has attracted Walgreens, CVS, Walmart, Rite Aid and others as customers. Avema Addition: The Singer family combined its majority stake Avema Pharma Solutions (Avema) to PLD. Avema is a contract development and manufacturing organization (CDMO). Previously, it was part of PLD, but was ultimately spun-out from the company in 2013. Avema provides PLD the capability of developing and manufacturing complex over-the-counter (OTC) formulations. The only cash involved in the transaction is $39 million raised by the secured debt issuance that will be used to pay down Avema's debt. Deleveraging Requires Profitable Growth: Fitch assumes that the company will deleverage primarily through EBITDA growth. The company will need to execute on its legacy business, as well as successfully build the Teva OTC business. Recent business wins for the Teva business and the hand sanitization category will help to support profitable growth. Cost Control: PLD is working towards improving operating efficiency through headcount reductions, seeking less costly employee health insurance programs, improved sourcing, stock keeping units (SKU) rationalization and other operating initiatives. These cost saving efforts should more than offset the negative impact from increased wages and costs. The addition of the Teva portfolio, Abbott's Pedialyte, hand sanitizer, advancing sales of OTC liquids and abbreviated new drug application guaifenesin also helps to support intermediate growth, despite the moderately negative effect on sales from SKU rationalization. Revenue Concentration: PLD has significant customer revenue concentration, while its product revenue concentration is less concerning, as its top 20 products account for roughly 21% of total firm sales. The acquisition of Teva OTC did not materially change the company's customer concentration but it modestly reduced product concentration. The company generates 100% of its revenues in the U.S. Dependable Demand: Consumer health care products benefit from relatively reliable demand. Sales tend to be recession-resistant as most people prioritize health care needs. They can be purchased without a physician's prescription and offer relief for some noncritical medical issues. In addition, private label brands offer less costly alternatives to brand-name products, attracting cost-conscious consumers, while at the same time offering higher margins to retailers. No Third-Party Payers: In contrast to generic prescription drug manufacturers, consumer OTC products makers do not face pricing pressure from large third-party payers. However, they still must contend with customers that are tough negotiators because of their operational scale, such as Walmart, Kroger, Walgreens, and CVS. Nevertheless, there is significantly less focus by lawmakers, activists, and the public on private-label consumer OTC product pricing. Quality Track Record: Product quality and reliability of supply are also important to PLD's customers. PLD stated that it has never lost a customer or had a major quality issue. The company emphasizes that it focuses on the three most important factors that its customers consider - quality, reliability of supply and providing a backup to the overwhelmingly dominant supplier in the market, Perrigo. Pricing in the segment is important but appears rational, given the overwhelming dominance of the largest player, Perrigo, and the much smaller second-largest player, PLD. Small Scale: PLD is significantly smaller than its largest competitor, Perrigo, which generates more than ten times the revenue that PLD generates. Scale is important in terms of cost, distribution capabilities and retail shelf space. Nevertheless, the company appears to have carved out a niche in the space. However, targeted acquisitions and collaborations will likely be necessary longer-term to generate profitable growth. Expected Consistently Positive FCF: Fitch forecasts that PLD will generate meaningfully positive annual FCF during the forecast period. The year 2019 saw some shortfalls including FDA-delayed Abbreviated new Drug Application (ANDA) approvals, customer pushback of key product launches and customer transition of certain TEVA items on the revenue side. Fitch expects PLD to build inventory in 2020, advancing revenue, and relatively stable margins, reduced capex requirements and cost control support an expectation of positive FCF going forward. DERIVATION SUMMARY PLD's rating of 'B-'/Positive Outlook is significantly smaller in scale and operates with much lower margins relative to peers - Mallinckrodt 'd*', Endo 'c*' and Bausch Health 'B'/Stable Outlook. The company is particularly smaller (by a factor greater than 10x) than its nearest competitor, Perrigo (not rated by Fitch). However, the pricing environment for PLD is much less onerous than that of prescription drug manufacturers (Mallinckrodt, Endo, Bausch Health). Given the large differences in scale partly offsetting the relatively benign pricing environment, Fitch views the leverage sensitivities for PLD as being somewhat tighter than its three larger peers. KEY ASSUMPTIONS Recovery Analysis In accordance with Fitch's Recovery Rating (RR) methodology, issue ratings are derived from the Issuer Default Rating (IDR) and the relevant RR, Fitch's recovery analysis assumes a going-concern enterprise value for a reorganized firm of approximately $344 million. The alternative is a liquidation value of $120.6 million. Fitch uses the greater of the two in its recovery analysis. The analysis employs a restructured EBITDA of $63.7 million, represents a reorganization scenario that incorporates some of the expected benefits of the recent manufacturing agreement with a company that owns a branded hand sanitizer, the capture of 70% of the isopropyl alcohol market, the recent national launch of a private-label substitute for Voltaren gel, significant progress making inroads with its nicotine replacement therapy products and docosanol, a substitute for Abreva. Fitch assumes the scenario would include a reduction in ongoing cost structure and select, but not significant, asset sales since the company would likely exit or shutter small unprofitable business lines. An EBITDA multiple of 6.0x is used to calculate the enterprise value. This is in-line with the average historical corporate exit multiple of 6x and at the lower end of the 6.0x-7.0x range observed for smaller, high-yield pharmaceutical firms. This may be slightly conservative, given the relatively less scrutinized pricing environment and less onerous litigation profile compared to prescription drug manufacturers. However, PLD is significantly smaller in scale than its largest peer, Perrigo. Acquisition multiples in the sector range from mid-single digits to mid-teens, depending on the attractiveness of the asset in terms of the exclusivity, diversity, and growth potential of the target's product portfolio. However, PLD acquired the Teva OTC business for roughly 3x EBITDA. This is likely due to Teva viewing this business as noncore and focusing on its other segments. The ABL revolver has outstanding recovery prospects in a reorganization scenario, which maps to a 'BB-'/'RR1' rating, three notches above the IDR. Availability for borrowings is governed by leverage, and Fitch assumes the revolver is 70% drawn at $59.5 million in reorganization. The recovery analysis assumes the company upsizes the capacity of the ABL to $85 million as planned. The new secured notes have above-average recovery prospects in a reorganization scenario, which maps to a 'B'/'RR3' rating, one notch above the IDR. The subordinated notes are considered to have no recovery prospects, which corresponds to a 'CCC'/RR6*' rating, two notches below the IDR. The preferred equity (PIK) is rated 'CCC-'/'RR6*', three notches below the IDR, given their structural subordination to the subordinated notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade to a 'B' rating: -- Solid execution on PLD's legacy business and continued advancement of the Teva portfolio, accompanied by strong FCF; -- Gross leverage (total debt/EBITDA) to remain durably at or below 6.0x. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Pressure on the credit profile stemming from operational stress, leading to increasing leverage without the prospect of a timely turnaround; -- Persistently negative operational trend that would strain FCF, making it difficult to execute on business development activities; Resulting leverage (total debt/EBITDA) expected to remain durably above 7.0x. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity, Light Maturities: Negative FCF of $35.2 million in 2019 was the result of efforts to rebuild the company's inventory following a disruption with a key supplier that Fitch believes is resolved. Fitch anticipates a return to positive cash generation in 2020 and after, owing primarily to contributions from the Teva OTC acquisition, normalized lower capital spending and other new contract wins. Debt maturities are light, with the current transaction expected to push out major maturities until later than 2024. SOURCES OF INFORMATION ESG Considerations: Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg. 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. PENNSYLVANIA REIT: Files for Chapter 11 With Prepackaged Plan ------------------------------------------------------------- PREIT (NYSE: PEI), a leading operator of diverse retail and experiential destinations, today announced it has taken the next step to execute its prepackaged financial restructuring plan (the "Prepackaged Plan") under which the Company will be recapitalized and its debt maturities extended. Consistent with the Company's previously announced Restructuring Support Agreement (the "RSA"), PREIT has filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware to implement its Prepackaged Plan. As previously announced on October 14, 2020, PREIT entered into the RSA with its bank lenders. The banks have committed to provide an additional $150 million to recapitalize the business and extend the Company's debt maturity schedule, supporting PREIT's operations and the continued execution of its strategic priorities. Subsequent to executing the RSA, PREIT solicited acceptances of its Prepackaged Plan, which received overwhelming support from 95% of its creditors. The filing will ensure that PREIT can continue all business operations without interruption while it obtains necessary approvals of its financial restructuring plan. The Company's primary focus remains creating compelling retail and experiential destinations while prioritizing the health and safety of its employees, partners, customers and communities. "We are pleased to be moving forward with strengthening the Company's balance sheet and positioning it for long-term success through our prepackaged plan. We are grateful for the significant support we have received from a substantial majority of our lenders, which we expect will enable us to complete our financial restructuring on an expedited basis," said Joseph F. Coradino, CEO of PREIT. "Today's announcement has no impact on our operations – our employees, tenants, vendors and the communities we serve –and we remain committed to continuing to deliver top-tier experiences and improving our portfolio. With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multi-use ecosystems throughout our portfolio." Not only will PREIT pay all vendors, suppliers and employees during the course of the Chapter 11, but pursuant to the terms of the Prepackaged Plan, which will also be subject to court approval, the prepetition claims of suppliers and other trade creditors and business partners will be unimpaired. The financial restructuring is not expected to have any impact on the Company's shareholders, and PREIT common and preferred shares are expected to continue to trade in the normal course. PREIT has filed a number of customary first day motions with the court to support its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption. The Company expects to receive court approval for these requests. About PREIT PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages innovative properties at the forefront of shaping consumer experiences through the built environment. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in densely-populated, high barrier-to-entry markets with tremendous opportunity to create vibrant multi-use destinations. On the Web: http://www.preit.com/ PREIT and certain of its affiliates filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware (Bankr. D. Del. Case No. 20-12737) on Nov. 1, 2020, to implement its Prepackaged Plan. DLA Piper LLP (US) LLP and Wachtell, Lipton, Rosen & Katz are serving as legal counsel and PJT Partners LP is serving as financial advisor to PREIT. PREIT's claims agent is Prime Clerk, maintaining the page https://cases.primeclerk.com/PREIT. PESCRILLO NEW YORK: DOL Says Plan Unconfirmable ----------------------------------------------- The New York State Department of Labor (DOL) objects to the First Amended Disclosure Statement and Joint Plan of Reorganization of Debtors Ralph T. Pescrillo, Pescrillo New York, LLC and Pescrillo Niagara, LLC. The DOL objects to the Disclosure Statement and Proposed Plan because the Disclosure Statement does not clearly and accurately describe the background, the Debtors' financial circumstances or the Proposed Plan. The DOL claims that Despite the U.S. Trustee's objection, the Disclosure Statement still lists claims against the Debtors, not against each individual Debtor, and even the amalgamated discussion remains both confusing and inaccurate. The discussion of priority tax and secured tax claims is especially confusing. The DOL points out that the Proposed Plan appears unconfirmable under Bankruptcy Code Sec. 1129(a)(1), requiring that a Chapter 11 reorganization plan comply with applicable Code provisions. The plan is likely to be followed by the liquidation or need for further financial reorganization of the Debtors -- just as all Mr. Pescrillo's previous bankruptcy filings were -- in violation of Sec. 1129(a)(11). The DOL states that the Plan appears to breach Sec. 1129(a)(7)(A)'s requirement that holders of impaired claims, unless they accept a plan, receive at least the value they would receive the debtor were liquidated under chapter 7. Impaired claimants including the DOL would apparently fare much better in a Chapter 7 liquidation; only Mr. Pescrillo would come out less well. The DOL asserts that even if the Plan or a modified version of the Plan could somehow be confirmable, a disclosure statement as full of shortcomings as this one could not be considered. The DOL further asserts that the Disclosure Statement does not delineate the consequences of the proposed plan in simple and clear language, nor does it contain the kind of clarity nor realism required by the adequate information standard of Code § 1125. A full-text copy of DOL's objection dated Oct. 15, 2020, is available at https://tinyurl.com/yy7qr82y from PacerMonitor.com at no charge. About Pescrillo New York Pescrillo New York, LLC, a real estate lessor, is the fee simple owner of 113 real properties in Niagara Falls and Buffalo New York, having an aggregate value of $1.71 million. Pescrillo New York sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-10656) on April 9, 2018. The Debtor first sought bankruptcy protection (Bankr. W.D.N.Y. Case No. 15-74305) on Oct. 8, 2015. In the petition signed by Ralph T. Pescrillo, managing member, the Debtor disclosed $1.72 million in assets and $1.84 million in liabilities. Judge Michael J. Kaplan presides over the case. PESCRILLO NEW YORK: UST Wants Financial Info of Each Debtor ----------------------------------------------------------- William K. Harrington, the United States Trustee for Region 2 submitted a limited objection to the Disclosure Statement Describing Reorganization Chapter 11 Plan proposed by debtors Pescrillo New York, LLC, Ralph T. Pescrillo and Pescrillo Niagara, LLC. The United States Trustee points out that the Disclosure Statement does not provide any discussion of the separate assets and liabilities of each Debtor. The United States Trustee further points out that the body of the Disclosure Statement should contain a discussion of the financial performance of each Debtor. The United States Trustee asserts that the Disclosure Statement does not describe whether Mr. Pescrillo will personally be contributing any money to the Plan. The United States Trustee complains that the Disclosure Statement and Plan appear to function as if these cases have been substantively consolidated. The United States Trustee believes voting and confirmation should be kept track on a separate basis for each debtor. About Pescrillo New York Pescrillo New York, LLC, a real estate lessor, is the fee simple owner of 113 real properties in Niagara Falls and Buffalo New York, having an aggregate value of $1.71 million. Pescrillo New York sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-10656) on April 9, 2018. The Debtor first sought bankruptcy protection (Bankr. W.D.N.Y. Case No. 15-74305) on Oct. 8, 2015. In the petition signed by Ralph T. Pescrillo, managing member, the Debtor disclosed $1.72 million in assets and $1.84 million in liabilities. Judge Michael J. Kaplan presides over the case. POPULUS FINANCIAL: S&P Downgrades ICR to 'B-'; Outlook Negative --------------------------------------------------------------- S&P Global Ratings said it lowered its issuer credit rating on Populus Financial Group Inc. to 'B-' from 'B'. The outlook is negative. S&P said, "At the same time, we lowered our issue rating on the company's senior secured notes due 2022 to 'B-' from 'B'. The recovery rating remains '3', indicating our expectation for meaningful recovery in the event of a payment default." "The downgrade reflects our view that there is a heightened risk that Populus Financial could face a conventional default over the next two years, especially if the company has difficulty refinancing its secured notes due in Dec. 2022 on economically favorable or viable terms. On Oct. 28, Populus reported its third quarter financial results and disclosed that it repurchased $60 million of its senior secured notes for $42 million (70% of par) over the past two quarters. We believe these repurchases raise doubts about management's willingness to honor its obligations on the remaining $255 million of senior secured notes. Financial sponsor JLL Partners is a majority owner of the company." "We view the $60 million of repurchases as opportunistic, and not distressed, because we believe the company's recent financial performance has been satisfactory, the company has a relatively solid amount of cash on hand currently, and that leverage remains manageable on a debt-to-EBITDA basis. Although revenue fell 20% to $388 million over the 12 months ended Sept. 30, adjusted EBITDA fell a more modest 10% to $118 million for the same period (S&P makes a favorable $35 million operating lease adjustment). Debt to EBITDA ended the period at 3.1x. Moreover, the company demonstrated the capacity to build cash in a tough operating environment. Cash ended the quarter at $65 million ($42 million of which is free and available) compared with $63 million a year ago. Cash was further bolstered immediately following the quarter by a $30 million renewal bonus from NetSpend. We do not consider our 'CCC' criteria at this time because we do not believe Populus' financial commitments are unsustainable in the long-term." "Notwithstanding the above, we could view future transactions at amounts below those originally promised as distressed exchanges, tantamount to a default, if we believed Populus was doing so to avoid a conventional default. This would most likely occur if the company's EBITDA and liquidity came under pressure, causing debt-to-EBITDA to rise or interest coverage to fall. EBITDA coverage of interest fell to 2.4x for the 12 months ended Sept 30 from 2.6x a year earlier. Increasing regulatory pressure from a new administration could also weaken the company's ability to refinance its bonds in 2022, as investor sentiment weakens further." "We expect Populus' earnings to remain under pressure over the next 12 months, as the shape and timing of economic recovery remain uncertain. Additionally, the regulatory risk surrounding payday lenders remains a threat to earnings at both the federal and select state-levels as political conditions are unclear." "The negative outlook reflects our view that there is a heightened risk that Populus could face a conventional default over the next two years, especially if business conditions were to worsen and we to the company has difficulty refinancing its notes due in 2022 on economically viable terms." "We could lower the rating within the next 12 months if the company announces a tender offer at prices less than originally promised or if EBITDA coverage of interest falls below 1.5x." "An upgrade is unlikely at this time. We could revise the outlook to stable over the next 12 months if we gain confidence in the company's financial position (interest coverage comfortably above 2x, debt to EBITDA below 3x) and a willingness to repay debt at originally promised terms." PRIME HEALTHCARE: Fitch Lowers Rating on Secured Notes to B ----------------------------------------------------------- Fitch Ratings has downgraded the senior secured notes issued by Prime Healthcare Services, Inc. (PHSI) to 'B'/'RR4(EXP)' from 'B+'/'RR3(EXP)' upon the unanticipated upsizing of the issuance to $700 million from $610 million. Fitch affirmed the 'B(EXP)' Long-Term Issuer Default Rating (IDR) to Prime Healthcare Services, Inc. (PHSI), a privately held operator of 31 for-profit hospitals in the United States and to the 'BB(EXP)'/'RR1' to the ABL. PHSI's strategy is to acquire and improve the operations of underperforming hospitals typically located in areas surrounding larger MSAs. Fitch expects to convert the Expected Ratings to Final Ratings upon completion of the debt transactions and receipt of the final documentation. The Rating Outlook is Stable. KEY RATING DRIVERS Durable Cashflows Relative to Typical Corporate: Hospital operators such as PHSI tend to exhibit more durable revenues and EBITDA than the typical corporate issuer due to the generally less economically cyclical and non-discretionary demand for care. Cash conversion is fairly predictable with high-quality receivable counterparties (i.e. Medicare, state Medicaid programs and commercial insurers) and good visibility into future capital expenditure requirements. Growth via Acquisitions and Operational Improvements: PHSI has been highly acquisitive since its formation and could remain so. PHSI currently operates 31 hospitals (plus an additional 15 on behalf of a related party, Prime Healthcare Foundation [PHF], in exchange for a management fee) up from two in 2005 and one in 2001. PHSI's acquisition strategy focuses on targeting underperforming emergency department-centered hospitals and improving their operating and financial performance. Recent, albeit anecdotal, examples indicate PHSI is largely successful in executing this strategy as measured by quality-of-care statistics, cost reductions and, to a lesser extent, revenue improvements. The influence of the latter going forward is unclear as Fitch is unable to ascertain the degree to which previous improvements in case mix were attributable to fixing suboptimal billing practices (e.g. avoidable claim denials) by the previous owners of the acquired hospital or whether it was due to less justifiable billing and admissions practices such as those alleged in disputes with payors. Continued successful execution of the turnaround strategy for acquisitions will have a large influence on trends in margins and cashflows given the company's smaller scale. Potential for More Volatility than Peers: Fitch expects that PHSI could exhibit more volatile EBITDA and cashflows through-the-cycle than its for-profit hospital peers due to a few factors including geographic concentration, smaller scale, its focus on the emergency department and the significant impact programs such as California's Hospital Quality Assurance Fees (QAF) have on margins. Fitch is not assuming any meaningful changes to PHSI's cashflows in the short-to-medium term as the QAF program was made permanent in CA and threats such as the Medicaid Fiscal Accountability Rule (MFAR), which could have reduced funding, have been rescinded. However, the MFAR proposal is emblematic of the potential for impactful changes that could result in lower cashflows at hospitals such as PHSI's. The emergency department focus has offsetting implications for PHSI. Patient volumes should be fairly durable in the short-term, because demand is less-discretionary than other service lines. This is offset in part by lower margins due to the payor mix skewing toward Medicare and Medicaid, which pay at lower rates than commercial insurers for the same care delivered. This turnaround emergency department strategy compares with that of its larger for-profit peers, which tend to focus on improving their share in each market to strengthen negotiating power with commercial payors and achieve cost synergies from economies of scale. Peers tend to use a hub-and-spoke approach in each market with the hospital at the center and lower cost or more convenient settings such as referring physician groups, ambulatory surgery centers and free-standing emergency departments and urgent care centers as the spokes. These settings allow peers to capture higher-margin elective surgeries and longer-term services (e.g. oncology) and hedge against the volume loss from payors incentivizing volumes to migrate to lower-cost settings. Over the longer term, PHSI may face volume and margin pressure as payors seek to reduce healthcare expenditure growth by incentivizing care that can safely occur in lower cost settings to do so (i.e. away from higher cost settings such as the emergency department). For the proportion of volumes that, by definition, are an emergency and best cared for in that setting, payors may ration their financial resources, thus pressuring rate growth. Prime's operating statistics indicate it has not been immune to these volume pressures. PHSI's emergency room volumes have declined in each of the past three years, in contrast to public peers that have seen slightly positive growth in adjusted admissions. PHSI's relative underperformance has been less significant when measured by revenues per adjusted admission. These trends may continue as more patients are covered by managed care programs rather than directly by Medicaid or Medicare. Conservative Financial Policies: Fitch expects PHSI will operate with leverage around 4x through 2022 which is among the lowest for for-profit providers, generally and for-profit hospitals, specifically. Fitch expects PHSI will generate durably positive FCF through the forecast though it will be volatile in 2020 and 2021 due to the timing of grants and advances received under the CARES Act. The ratings and forecast consider the potential that leverage could trend higher than management's expectations given the acquisitive history and likelihood of more acquisition opportunities. There could be negative momentum in the ratings and/or Outlook if Fitch expected acquisitions and/or weaker than forecasted EBITDA would result in leverage sustaining above 5x. Governance Increases Potential Risk: PHSI is a privately held company with concentrated ownership that can influence decisions through its senior management position(s) and its position on and rights related to changes to members of the Board of Directors. PHSI has a history of related-party transactions (including donation of hospitals from PHSI to PHF), a more complex corporate structure, and impairments and covenant waivers during benign economic and operating environments. Moreover, financial and operational disclosures are less robust than public peers making it incrementally more challenging to assess operating performance and the merits of certain related-party transactions. Fitch also notes the company's legal disputes and settlements with the government and payors (including two active Department of Justice [DOJ] investigations) have focused on alleged behaviors that, if true, would undermine some but not all of the operational and financial improvements. Fitch notes PHSI (along with PHF and Prime's founder and CEO) entered into a settlement agreement with the DOJ in 2018 for $65 million and has an outstanding judgement against it related to a dispute with Kaiser Permanente for $46 million. These factors, while not individually unique to PHSI, are more prevalent with PHSI and, in the aggregate, constrain the ratings but do not explicitly have a negative impact. Fitch is not asserting that the company's actions heretofore have been untoward but simply that, to the extent possible under the debt documents, the company may take actions that may be to the benefit of ownership and to the detriment of creditor recoveries in the event of a default or restructuring. Moreover, Fitch also notes the potential for non-recurring, but material cash outflows related to these items. Coronavirus Pandemic Affecting Operations: Depressed volumes of elective patient procedures have weighed on PHSI's revenue and operating margins in 2020. PHSI's emergency department focused volumes were not immune from the broader trends of healthcare providers generally cancelling elective procedures in both inpatient and outpatient settings to increase capacity for COVID-19 patients, and in response to government orders. Fitch believes PHSI has sufficient headroom in the 'B(EXP)' rating to absorb these effects, which is predicated on an assumption that the recovery in patient volumes experienced beginning in 2Q20 will be durable. There could be downward pressure on the rating if the business disruption depresses cash flow more than Fitch currently anticipates. This could be as a result of a patient preference to avoid elective care or because the healthcare services segment proves more economically sensitive than during past U.S. economic recessions. DERIVATION SUMMARY Compared with rated for-profit healthcare providers, Prime Healthcare Services, Inc. (B[EXP]/Stable) is smaller in terms of revenue and more geographically concentrated, which increases the potential for volatility in EBITDA and FCF. Moreover, its hospitals tend to be more reliant on government payors and emergent care volumes than elective procedures, which provides some durability to revenues in exchange for lower margins due to the relative payment rates and lower acuity mix. This can be seen in its lower level of revenues and EBITDA compared with Universal Health Services despite a similar number of hospitals. PHSI offsets some of the aforementioned risks by operating with leverage toward the low end of the range compared with that of publicly traded hospitals. Universal Health Services (BB+) typically maintains leverage in the 2x-3x range, HCA, Inc. (BB) in the 3x-4x range, Tenet Healthcare Corp. (B), which has been around 7x in recent years and Community Health Systems, Inc. (CCC), which has had leverage exceeding 9x. Compared with the other hospital peers, Prime has relationships with a number of related entities, including contributing hospitals to and managing on behalf of PHF. The company is also private and its disclosures are adequate but below the standard of public filers. Combined, these factors introduce governance, group transparency, and financial transparency risks, which are less relevant in the analysis of its public peers. Fitch does not consider there to be a parent/subsidiary relationship between Prime Healthcare Services, Inc. and Prime Healthcare Foundation (BBB-/Stable) as they are independent entities, PHF is not owned by PHSI nor Prime Healthcare Holdings, Inc., the debt is not nor expected to be guaranteed or cross defaulted and Fitch does not expect that PHSI would provide financial support to PHF. However, there is some operational overlap as PHSI manages hospitals on behalf of PHF. In assessing PHSI, Fitch has considered PHSI's real estate lease liabilities to be debt rather than non-debt liabilities, which is a variation from the Corporate Rating Criteria. The variation is based on their materiality (i.e. the largest obligation that are crossed and act as one obligation), their ability to trigger a default as guaranteed by PHSI, the fact that the leased real estate is core to the operating strategy and that use of sale leasebacks has been the strategy to fund acquisitions. The variation did not result in a different rating category outcome. No country ceiling, operating environment or parent and rating subsidiary analysis influenced the ratings. KEY ASSUMPTIONS -- Leverage (as measured by gross debt including lease liabilities to recurring operating EBITDA) sustains around the 3.5x-4.0x range as a result of: -- The acquisition of St. Francis in 2H20 with realization of identified cost synergies; -- Low-single digit top line growth thereafter; -- Operating margins decline by approximately 300bp in 2020 as a result of the coronavirus pandemic and recover in 2021 but do not grow thereafter assuming the economic consequences of the pandemic result in fewer commercially insured volumes thereafter; -- FCF is volatile in 2020 and 2021 due to the recognition and partial repayment of grants and advances received through the CARES Act and is durably positive thereafter; -- FCF also assumes no material changes to the company's capex or dividend payments, some litigation payments and no significant acquisitions/dispositions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Demonstrated improvement in operating fundamentals (i.e. volumes) and Fitch's expectation that the improvement is sustainable, or; - PHSI successfully pivoting its portfolio away from the emergency room and thereby better aligning its volume growth with secular trends; - Positive momentum would further be governed by one of the items above occurring in conjunction with improvements in its governance structure such that it is no longer a constraint on the rating(s). Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch's expectation of a deterioration in FCF from 'durably positive' toward break-even and/or with greater volatility; - Fitch's expectation of leverage sustaining above 5x; - Further evidence of weak corporate governance as described in Fitch's Corporate Rating Criteria such that it warrants a lower rating in and of itself. LIQUIDITY AND DEBT STRUCTURE Debt Structure: Pro forma for the debt transactions, PHSI's capitalization will be comprised of a $400 million ABL, $700 million of senior secured notes, approximately $860 million of lease liabilities, approximately $150 million of mortgages and hospital-level debt and $18 million of other debt. The senior secured notes have an equity interest in the collateral pledged to the lease liabilities and mortgages and hospital-level debt. Liquidity Sufficient: Pro forma for the debt transactions, PHSI's liquidity will be comprised of the undrawn $450 million ABL facility and approximately $360 million of cash. Fitch also generally expects positive FCF sufficient to cover operating needs, though choppy in 2020-2021 as a result of government stimulus funding, Medicare advances, and the associated repayment of those advances. Uses of liquidity are manageable through the rating horizon and are comprised largely of committed capex and potential payments on contingent liabilities. Derivation of Recovery Ratings and Debt-Level Ratings: The 'BB(EXP)'/'RR1' and 'B(EXP)'/'RR4' ratings for PHSI's ABL facility and the senior secured first-lien notes, respectively, reflect Fitch's expectation of recovery for the ABL facility in the 91% to 100% range and recovery for the first lien secured notes in the 31%-50% range under a bankruptcy scenario. The instrument ratings for PHSI's debt are notched from its 'B(EXP)' IDR based on a bespoke analysis. The recovery analysis assumes that Prime Healthcare Services, Inc. would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch estimates an enterprise value (EV) on a going-concern basis of $1.2 billion for PHSI. The EV assumption is based on post-reorganization EBITDA after dividends to associates and minorities of approximately $220 million and a 6.25x multiple and a deduction of 10% for administrative claims. Fitch projects a post-restructuring sustainable cash flow, which assumes both depletion of the current position to reflect the distress that provoked a default, and a level of corrective action that Fitch assumes either would have occurred during restructuring, or would be priced into a purchase price by potential bidders. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. Fitch assumes a scenario in which PHSI could default or restructure if EBITDA were to decline toward $300 million, which would imply elevated refinancing risk due to the leverage multiple nearing the acquisition multiples for the hospitals and the company operating at a meaningful FCF deficit, which would not be sustainable. EBITDA at these levels could occur in a scenario where there was a meaningful reduction in per treatment Medicaid and/or Medicare reimbursement rates, changes to provider fee programs and/or if there were negative impacts to the fees received from the non-profit foundation. Fitch assumes that upon entering bankruptcy/default, PHSI would be unable to improve EBITDA as a unilateral reduction in government rates would likely have limited cost offsets, particularly for a hospital operator that has already improved the financial and operating results of the acquired hospitals by reducing redundant costs. Fitch expects the going concern EBITDA would be below the EBITDA upon entering bankruptcy as Fitch assumes the potential loss of the management fees it earns from the hospitals owned by Prime Healthcare Foundation given contractual rights afforded to PHF and financial incentives for ownership that could conflict with creditors. Fitch also assumes that were the senior secured note lenders to enforce their rights related to the hospitals for which they have a first-lien, they would incur additional operating expenses and general and administrative expenses reflecting the loss of economies of scale. The EV multiple of 6.25x EBITDA considers the historical bankruptcy case study exit multiples for peer companies with a median of 6.0x-6.5x, the recent emergence of Quorum Health Corporation, a rural hospital operator at 6.3x, recent acquisition multiples for hospitals acquired by PHSI, trading multiples for publicly-traded hospitals that have fluctuated between approximately 6.5x and 9.5x since 2011 and the privatization multiple for LifePoint Health of 7.5x. In applying the distributable proceeds, Fitch assumes $375 million is drawn against the ABL, which would recover 100%. Fitch applied the post-ABL distributable proceeds proportionally between the $700 million of senior secured notes and the $1.0 billion of mortgages, notes and other debt based on Fitch's estimate of the amount of EBITDA generated by each group's collateral. Fitch has not assumed any material collateral leakage via dispositions, contributions, restricted payments, etc. ahead of a restructuring/bankruptcy though notes the possibility for such, particularly via restricted payments, based on the draft terms of the debt agreements. CRITERIA VARIATION Amounts of sale-leaseback liabilities were judged to be debt-like and included as debt, for which a variation was approved. ESG Considerations PHSI has an ESG Relevance Score of '4' for Exposure to Social Impacts due to pressure to contain healthcare spending growth, highly sensitive political environment, and social pressure to contain costs or restrict pricing, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. PHSI has an ESG Relevance Score of '4' for Governance Structure due to the significant control the Reddy family has via its ownership, its senior management position(s) and the ability to influence the composition of the Board of Directors. Disclosure regarding relevant expertise and successful oversight by the Board of Directors is limited. PHSI has an ESG Relevance Score of '4' for Group Structure due to the degree to which there have been related party transactions where benefits to the ownership have been clearer than the benefits to other stakeholders. For example, the contribution of PHSI hospitals to PHF could have had positive tax consequences for ownership but moved 15 assets out of the borrower group (approximately one-third). PHSI retains some of the hospitals' cashflows through management fees. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. PROGRESSIVE SPINE: Maximum Buying Equipment for $5.5K Cash ---------------------------------------------------------- Progressive Spine and Sports Medicine, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey to authorize the sale of its fitness and physical therapy equipment used in the course of its business to Maximum Performance Physical Therapy and Sports Rehabilitation for $5,455, cash. The Debtor owns the Equipment. The Equipment was secured by a loan from PNC Bank, N.A.as demonstrated by the UCC Certification. The Debtor moved for approval to pay PNC's lien in its entirety and an order granting approval was entered. The Equipment does not need to be sold free and clear of any encumbrances or liens as it is no longer subject to PNC's lien and is not encumbered by any additional liens. The Debtor's landlord or its assignee may perfect its interest in its personal property located on the leased premises by exercising the right of distraint, codified at N.J.S.A. 2A:33-1 et seq. Neither the Debtor's landlord nor its assignee have taken the necessary steps to enforce the statutory right. Furthermore, none of the equipment is affixed to the premises. Accordingly, neither the Debtor's landlord nor its assignee have an interest in the equipment. Subject to Court authorization, the Debtor has entered into an all cash contract for the sale of the Equipment to the Purchaser for a purchase price of $5,455. The transaction was negotiated at arms'-length and there have been no allegations that there was any misconduct by the parties related to the Purchase Agreement. Given the goal by the parties in the case to sell the Equipment and bring the case to conclusion in the short term, the Debtor asks that upon approval of the sale, the 14-day period pursuant to Rule 6004(h) be waived by the Court. A hearing on the Motion is set for Nov. 3, 2020 at 10: 00 a.m. A copy of the is available at https://tinyurl.com/y6pv6m4a from PacerMonitor.com free of charge. About Progressive Spine and Sports Medicine Progressive Spine and Sports Medicine, LLC, sought Chapter 11 protection (Bankr. D. N.J. Case No. 20-19043) on July 30, 2020. The Debtor tapped David L. Stevens, Esq., at Scura, Wigfield, Heyer, Stevens & Cammarota, LLP as counsel. QUEST PATENT: May File for Bankruptcy if Restructuring Talks Fail ----------------------------------------------------------------- Pursuant to a securities purchase agreement dated Oct. 22, 2015 between the Company, certain of its subsidiaries and United Wireless Holdings, Inc., Quest Patent Research Corporation issued its 10% secured convertible promissory notes due Sept. 30, 2020 to United Wireless. The notes are currently held by Intelligent Partners, LLC, as transferee of United Wireless. Intelligent Partners is an affiliate of United Wireless. At Sept. 30, 2020, promissory notes in the aggregate principal amount of $4,672,810 were outstanding and, at Sept. 30, 2020, accrued interest on the notes was $117,780. The notes became due by their terms on Sept. 30, 2020, and the Company did not make any payment on account of principal of and interest on the notes on that date. As previously reported, on Oct. 1, 2020, the Company entered into a standstill agreement with Intelligent Partners pursuant to which: * Intelligent Partners agreed that, provided that the Company pays Intelligent Partners $117,780 of accrued interest on the note by Oct. 2, 2020 (which payment was timely made), for a period commencing on Oct. 1, 2020 until the earlier of (i) Oct. 22, 2020 or (ii) the date of any action by any person (other than Intelligent Partners and its affiliates) relating to the assertion of a breach or default by the Company or any of its subsidiaries under any agreement to which the Company or any of its subsidiaries is a party, Intelligent Partners and any person acting on behalf of Intelligent Partners will forebear from taking any action to enforce any of the rights they have or may have under the Agreements between the Company and Intelligent Partners or under applicable law or otherwise in respect of or arising out of the failure by the Company to pay the principal on the notes on the maturity date thereof or as a result of any defaults or alleged defaults by the Company or any subsidiary of the Company under any of the agreement between the Company and Intelligent Partners or under any applicable law or otherwise. * During the Standstill Period, the Company and Intelligent Partners will seek to negotiate a mutually agreeable restructure agreement which provides for restructure of the Company's obligations under the notes and a modification of its obligations under the Company's Agreements with Intelligent Partners. On Oct. 22, 2020, the Standstill Period was extended to Oct. 27, 2020, and, on Oct. 27, 2020, the Standstill Period was further extended to Oct. 31, 2020. The Company intends to negotiate in good faith with respect to a restructuring of its obligations to Intelligent Partners. However, the Company cannot give any assurance that it will be successful in negotiating a restructure. In the event the Company is not able to negotiate a restructure, it may not be able to continue in business and may be necessary for the Company to seek protection under the Bankruptcy Act. About Quest Patent Quest Patent Research Corporation -- http://www.qprc.com-- is an intellectual property asset management company. The Company's principal operations include the development, acquisition, licensing and enforcement of intellectual property rights that are either owned or controlled by the Company or one of its wholly owned subsidiaries. The Company currently owns, controls or manages eleven intellectual property portfolios, which principally consist of patent rights. Quest Patent reported a net loss attributable to the Company of $1.31 million for the year ended Dec. 31, 2019, compared to a net loss attributable to the company of $2.11 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $3.35 million in total assets, $10.26 million in total liabilities, and a total stockholders' deficit of $6.90 million. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2013, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. QUIKRETE HOLDINGS: Moody's Hikes CFR to Ba3, Outlook Stable ----------------------------------------------------------- Moody's Investors Service upgraded Quikrete Holdings, Inc.'s Corporate Family Rating (CFR) to Ba3 from B1, Probability of Default Rating (PDR) to Ba3-PD from B1-PD and senior secured rating to Ba3 from B1. The outlook remains stable. The ratings upgrade reflects Moody's expectation for continued improvement in Quikrete's credit profile, higher predictability in free cash flow and on-going solid execution. The Ba3 rating on the company's senior secured credit facility is on par with Quikrete's CFR reflecting its position as the preponderance of debt in Quikrete's capital structure. At the same time Moody's upgrade(s) take into consideration the company's vulnerability to cyclical end markets and the competitive nature of the business it operates in. At year-end (December 31) 2021, Moody's projects total debt-to-EBITDA will be 3.5x. "Regardless of Quikrete's acquisitive nature, the management team has successfully integrated acquisitions, remained focused on execution, re-invested most of the free cash flow back in the business, and limited dividend distributions to its shareholders balancing the interests of the company's creditors with the interest of its shareholders." said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Upgrades: Issuer: Quikrete Holdings, Inc. Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-D Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD4) from B1 (LGD4) Outlook Actions: Outlook, Remains Stable RATINGS RATIONALE Quikrete's Ba3 CFR reflects the company's market position as one of the largest manufacturers of packaged concrete and cement mixes in North America, its nationwide footprint, diversified end markets and large market opportunity. Moody's rating is also supported by the company's solid operating performance, predictable free cash flow and very good liquidity profile. At the same time, Moody's rating takes into consideration the company's vulnerability to cyclical end markets and the competitive nature of the business it operates in. Governance characteristics considered for Quikrete include the company's acquisitive strategy and elevated leverage. This is partially mitigated by Quikrete's historical focus on execution, reinvesting in the business, and balancing the interests of creditors and shareholders. The stable outlook reflects Moody's expectations that Quikrete will steadily grow its revenues organically, improve its profitability and generate significant free cash flow that can be used to de-lever its balance sheet. This is largely driven by Moody's views that the US economy will improve and US construction industry will remain stable. Quikrete enjoys a very good liquidity profile, supported by its $400 million ABL revolving credit facility (unrated) expiring in February 2024 of which $334 million is available and $5 million in cash on hand. The company has no significant debt maturities due until January 2027 when its $2.5 billion first lien senior secured term loan becomes due. The principal financial covenant in Quikrete's ABL revolving credit facility agreement is based on revolver availability. If revolver availability falls below 12.5% of total revolver commitment, Quikrete will be required to maintain a minimum fixed-charge coverage ratio of 1:1 until minimum availability is achieved again. For 2020 and 2021, Moody's projects Quikrete will maintain more than sufficient availability under its revolving credit facility and that the fixed-charge covenant will not be triggered. The term loan facility does not have any financial maintenance covenants. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if: -- Debt-to-EBITDA is below 3.75x for a sustained period -- EBITA-to-Interest expense is above 6.0x for a sustained period -- The company maintains its free cash flow and very good liquidity profile -- The company demonstrates a conservative financial policy The ratings could be downgraded if: -- Debt-to-EBITDA is above 4.75x for a sustained period -- EBITA-to-Interest expense is below 4.5x for a sustained period -- The company's liquidity and profitability deteriorate The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Headquartered in Atlanta, Georgia, Quikrete is a North American manufacturer and distributor of packaged concrete, cement mixes, segmental concrete, and ceramic tile installation products. In addition, Quikrete is a leading designer, manufacturer, and distributor of engineered water infrastructure solutions for domestic construction. The company is privately owned by the Winchester family. RAYNOR SHINE: Identifies Leases to Be Assumed in Plan ----------------------------------------------------- Raynor Shine Services, LLC and Raynor Apopka Land Management, LLC submitted on Sept. 21, 2020, a First Amendment to the Joint Plan of Reorganization filed August 26, 2020 to amend Article VII of the Plan as follows: ARTICLE VII -- EXECUTORY CONTRACTS AND UNEXPIRED LEASES In addition to executory contracts and unexpired leases previously assumed or rejected by the Debtor pursuant to Final Order of the Bankruptcy Court, the Plan constitutes and incorporates any motion by the Debtor to: A. Assume. Debtor will assume the following executory contracts and unexpired leases: Name Contract/Lease Ocoee Lease Lease of nonresidential property located at 850 Ocoee-Apopka Road, Ocoee, FL Nichols Road Property Lease of land located Northwest of the rail line in the Southwest Corner of Parcel 23-30- 08-0000- 012020, Mulberry, FL C.R. 640 Property Lease of 3000 CR 640, Mulberry FL B. Reject. Debtors shall reject all executory contracts and unexpired leases not listed in subparagraph A. or assumed pursuant to Final Order of the Bankruptcy Court. Attorneys for Debtors and Debtors in Possession: Frank M. Wolff, Esq. LATHAM, LUNA, EDEN & BEAUDINE, LLP 111 N. Magnolia Avenue, Suite 1400 Orlando, Florida 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: fwolff@lathlamluna.com bknotice1@lathamluna.com About Raynor Shine Services Raynor Shine Services, LLC, is an environmental recycling company based in Apopka, Florida. It offers mulch installation, grapple truck services, recycle yard disposal, land clearing, grinding services, storm recovery services. Raynor Shine Services, LLC, and Raynor Apopka Land Management, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-00577) on Jan. 30, 2020. The petitions were signed by Henry E. Moorhead, CRO. At the time of filing, Raynor Shine Services was estimated to have $10 million to $50 million in both assets and liabilities and Raynor Apopka Land Management was estimated to have $1 million to $10 million in both assets and liabilities. Frank M. Wolff, Esq. at Latham Luna Eden & Beaudine LLP, serves as the Debtors' counsel. Moss, Krusick & Associates, LLC, has been tapped as accountant. RAYNOR SHINE: In Sale Talks; Plan Hearing Moved to Nov. 19 ---------------------------------------------------------- Judge Lori V. Vaughan on Sept. 2, 2020, ordered that the Disclosure Statement of Raynor Shine Services, LLC and Raynor Apopka Land Management, LLC is conditionally approved, and the hearing to consider confirmation of the Plan is scheduled for Oct. 7. According to a court filing, the hearing to consider confirmation of the Plan is now scheduled for Nov. 19, 2020, at 2:00 p.m. before the Honorable Lori V. Vaughan. The Debtor sought a continuance of of the hearing in order for the Debtors to complete negotiations with regard to the sale of real estate and refinancing of equipment. About Raynor Shine Services Raynor Shine Serv ices, LLC, is an environmental recycling company based in Apopka, Florida. It offers mulch installation, grapple truck services, recycle yard disposal, land clearing, grinding services, storm recovery services. Raynor Shine Services, LLC, and Raynor Apopka Land Management, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-00577) on Jan. 30, 2020. The petitions were signed by Henry E. Moorhead, CRO. At the time of filing, Raynor Shine Services was estimated to have $10 million to $50 million in both assets and liabilities and Raynor Apopka Land Management was estimated to have $1 million to $10 million in both assets and liabilities. Frank M. Wolff, Esq. at Latham Luna Eden & Beaudine LLP, serves as the Debtors' counsel. Moss, Krusick & Associates, LLC, has been tapped as accountant. ROCKPORT DEVELOPMENT: Caputos Buying Los Angeles Property for $2.2M ------------------------------------------------------------------- Rockport Development, Inc. asks the U.S. Bankruptcy Court for the Central District of California to authorize the sale of the real property located at and commonly known as 3500 Moore Street, Los Angeles, California, APN 4246-001-001, to Ken Kook and Angela Caputo for $2,165,000, subject to overbid. The Property is directly owned by the Debtor. Its Real Estate Agent, Sierus Erdelyi, agreed to list the Property with an initial asking price of $2.095 million. The Property has multiple liens, including, but not limited to a first deed of trust in favor of Anchor Loans LP in the approximate principal amount of $1.78 million (the amount owing is higher due to unpaid interest and fees on the underlying note), and a second deed of trust in favor of SC Development Fund, LLC filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code i in the amount of $780,000. On July 15, 2020, Anchor filed a relief from stay against the Property. The Debtor filed an opposition. The Court granted the Relief Motion, and on Aug. 13, 2020, the Court entered an order granting the Relief Motion. Since the entry of the Relief Order, Anchor has changed their position(s), in part, because of the relentless efforts of the Agent. Recently, Anchor and the Debtor have agreed to the Anchor Stipulation, which facilitated the instant Motion. In light of the Agent's efforts, and Anchor changed position, the CRO has negotiated a carve-out with Anchor, that provides a $31,000 carve-out to the Estate to allow the Property to be sold, and provides Anchor's consent to the sale free and clear of their first priority lien. The Anchor Stipulation will be filed with the Court concurrently with the filing of the Motion. IT provides the Estate a $31,000 carve out, to cover administrative expense(s) and provide a distribution to unsecured creditors for filing and prosecuting the Motion. On July 7, 2020, SC Fund filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California, Case No. 8:20-bk-11977-ES. On July 7, 2020, SC Development Fund IV filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California, Case No. 8:20-bk-11978-ES. Weneta Kosmala is the duly appointed chapter 7 trustee in the SC Cases. On Aug. 5, 2020, the Debtor and the SC Trustee entered into a Stipulation under which SC Development is providing the Estate with a carve-out from its collateral so that the Property may be sold. The order approving the SC Stipulation was entered on Aug. 7, 2020. Under the SC Stipulation and SC Order the parties agreed that Debtor will sell the Property and, after payment of the Anchor Lien and all customary costs of sale, Debtor will split any remaining amounts with SC Development with 65% going to Debtor and 35% going to the SC Trustee. The SC Stipulation helped pave the way for the sale contemplated in the Motion. The Agent has been marketing the Property since July 7, 2020. Ultimately, the efforts of the Agents resulted in two offers to purchase the Property. Among those, Debtor received an offer from the Buyers for $2,165,000, pursuant to their Purchase and Sale Agreement and Escrow Instructions, including addendums. The Buyers provided the Debtor with proof of funds, and made the initial deposit of $63,300, which is held in trust pending court approval and closing of the sale. Their offer is the highest and best offer received by the Debtor. The Debtor proposed to distribute the sale proceeds in the amounts estimated and in the following manner: Sale Price $2,165,000 Real Estate Commissions (3% of Sale Price) ($ 97,400) Title, escrow, transfer taxes, ($ 20,300) recording charges (estimated) Prorated Property Taxes ($ 9,000) Delinquent Property Taxes ($ 26,500) Anchor Lien ($1,981,000) (minimum payment per stipulation)3 Carveout to Estate ($ 30,800) Estimated Net Proceeds $ 0 While Debtor is prepared to accept the offer for the Property as set forth in the Motion, it is also interested in obtaining the maximum price for the Property. Accordingly, the Debtor asks that the Court authorizes it to implement an overbid procedure regarding the sale of the Property. The salient terms of the Bidding Procedures are: a. Bid Deadline: No later than the commencement of the auction b. Initial Bid: Any Overbid must provide for a minimum purchase price of at least $2,273,250 (the Purchase Price plus 5%). c. Deposit: $63,000 d. Auction: The Property will be sold subject to overbid at an open auction to be conducted by the Debtor before the Court at the time that the Motion is heard. e. Bid Increments: $25,000 f. Any Overbid must be for the Property "as is, where is," and "with all faults" and will not contain any financing, due diligence, or any other contingency fee, termination fee, or any similar fee or expense reimbursement. Finally, the Debtor asks the Court to waive the 14-day stay period of the order approving the sale. A telephonic hearing on the Motion is set for Nov. 5, 2020 at 11:00 a.m. About Rockport Development Rockport Development, Inc., a company based in Irvine, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11339) on May 7, 2020. On June 11, 2020, Rockport's affiliate Tiara Townhomes LLC filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-11683). Judge Scott C. Clarkson oversees the cases, which are jointly administered under Case No. 20-11339. At the time of the filing, Rockport was estimated to have $10 million to $50 million in both assets and liabilities. Tiara Townhomes LLC disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor has tapped Marshack Hays, LLP as its legal counsel, and Michael VanderLey of Force Ten Partners, LLC as its chief restructuring officer. RTI HOLDING: Gibson, Holifield Represent Hunt Claimants ------------------------------------------------------- In the Chapter 11 cases of RTI Holding Company, LLC, et al., the law firms of Gibbons P.C. and Holifield & Janich, PLLC submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that they are representing the ad hoc group of plan participants. As of Oct. 29, 2020, members of the Ad Hoc Group and their disclosable economic interests are: Pfilip G. Hunt Kimberly Grant J. Russell Mothershed Marguerite Duffy Scarlett May Daniel Bettis Lee Wallace Danny Koontz Jeffrey Van Horne Ronald & Priscilla Vilord Robert Leboeuf Marcelino R. Largel Veronica Shannon Hepp Andrew Hepp Eric Paul Tamara and Kirk Cunningham E.E. Bishop Collin Cope Craig Nelson Robert McClenagan Ronnie Tatum Perry Brownlee Nicolas Ibrahim Patrick Cowley Sandra Herrington Ronald Harman Henry/Karen Grau Belinda Sharp (Kitts) David Cline James/Erin Buettgen Joe/Betty Byrum Larry Davis Gene/Vickie Gruver Mike Roder Chuck McGuff Rick Eldridge David Schmidt Max Piet Mark Young Ray Manning Rebecca Martin Ed Crofton John Doyle Bob Baldini E.J. Bueche Fred Kuhlemann Ross Jackson Bertha Taylor (April Carlton) Gene Bishop Bob Brown Ross Jackson Ed Rehm Eubie Stacey Larry Thompson Barry Timmons Danny Weinberg Sherry Turner James Holland Mark Potter Teresa McConnell No member of the Ad Hoc Group represents or purports to represent any other member of the Ad Hoc Group in connection with the Debtors' Chapter 11 Cases. In addition, each member of the Ad Hoc Group (a) does not assume any fiduciary or other duties to any other member of the Ad Hoc Group and (b) does not purport to act or speak on behalf of any other member of the Ad Hoc Group in connection with these Chapter 11 Cases. Further, neither Gibbons nor Holifield, nor the Ad Hoc Group's financial adviser Dundon Advisers LLC, represents or acts for or purports to represent or act for any members of the Group in their individual capacity. The Ad Hoc Group, each individual member thereof, Gibbons, Hollifield, and Dundon each disclaims any representation of, authority or duty to act or speak for, and fiduciary or other duty to, any plan participant or plan beneficiary who is not a member of the Ad Hoc Group, and for any of the plans' respective trustees, administrators, agents or fiduciaries or professionals. Neither Gibbons nor Holifield hold any disclosable economic interests in relation to the Debtors. This verified statement is being submitted out of an abundance of caution, and nothing herein should be construed as an admission that the requirements of Bankruptcy Rule 2019 apply to Counsel's representation of the Ad Hoc Group. The information contained herein is based upon information provided by the Ad Hoc Group to Counsel and is provided for the purposes of Bankruptcy Rule 2019 and for no other use or purpose, and is subject to change, correction or supplementation. Nothing contained herein is or shall be construed (i) as a limitation or waiver of any rights of any member of the Ad Hoc Group, (ii) a waiver or release of any claims or interests against the Debtors by any member of the Ad Hoc Group, (iii) an admission with respect to any fact or legal theory, and (iv) an amendment to, or restatement of, any proof of claim or interest in the Debtors. Nothing herein should be construed as a limitation upon, or a waiver of, any members' right to assert, file, and/or amend a proof of claim in accordance with applicable law and any orders entered in these Chapter 11 cases. Counsel to the Ad Hoc Group can be reached at: GIBBONS P.C. Howard A. Cohen, Esq. 300 Delaware Ave., Suite 1015 Wilmington, DE 19801-1671 Telephone: (302) 518-6300 Facsimile: (302) 429-6294 Email: hcohen@gibbonslaw.com Robert K. Malone, Esq. One Gateway Center Newark, NJ 07102-5310 Telephone: (973) 596-4500 Facsimile: (973) 596-0545 Email: rmalone@gibbonslaw.com - and - HOLIFIELD & JANICH, PLLC Al Holifield, Esq. 1107 Kingston Pike, Ste. 201 Knoxville, TN 37934 Telephone: (856) 566-0115 Facsimile: (856) 566-0119 Email: aholifield@holifieldlaw.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3jUPabK About RTI Holding Company RTI Holding Company, LLC and its affiliates develop, operate, and franchise casual dining restaurants in the United States, Guam, and five foreign countries under the Ruby Tuesday brand. The company-owned and operated restaurants (i.e., non-franchise) are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest regions of the United States. RTI Holding Company and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12456) on Oct. 7, 2020. The petitions were signed by Aziz Hashim, managing member of Manager, NRD Capital Management II, LLC. At the time of the filing, RTI Holding Company had estimated assets of between $100 million and $500 million and liabilities of the same range. Judge John T. Dorsey oversees the case. Pachulski Stang Ziehl & Jones LLP is the Debtors' legal counsel. CR3 Partners, LLC is the Debtors' financial advisor; Epiq Corporate Restructuring, LLC is their claims, noticing, solicitation agent and administrative advisor. RTI HOLDING: Law Firm of Russell Represents Utility Companies ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the Law Firm of Russell R. Johnson III, PLC submitted a verified statement that it is representing the utility companies in the Chapter 11 cases of RTI Holding Company, LLC, et al. The names and addresses of the Utilities represented by the Firm are: a. Florida Power & Light Company Gulf Power Company Attn: Gloria Lopez Revenue Recovery Department RRD/LFO 4200 W. Flagler St. Coral Gables, Florida 33134 b. Georgia Power Company Attn: Daundra Fletcher 2500 Patrick Henry Parkway McDonough, GA 30253 c. Virginia Electric and Power Company d/b/a Dominion Energy Virginia Attn: Sherry Ward 600 East Canal Street, l0th floor Richmond, VA 23219 d. Tampa Electric Company TECO Peoples Gas System Attn: Barbara Taulton FRP, CAP Florida Registered Paralegal Tampa Electric Company 702 N. Franklin Street Tampa, FL 33602 e. American Electric Power Attn: Dwight C. Snowden American Electric Power 1 Riverside Plaza, l3th Floor Columbus, Ohio 43215 f. Constellation NewEnergy - Gas Division, LLC Constellation NewEnergy, Inc. Attn: Mark J. Packel Assistant General Counsel 2301 Market Street, 23rd Floor Philadelphia, PA 19103 g. The Connecticut Light & Power Company Yankee Gas Services Company Attn: Honor S. Heath, Esq. Eversource Energy 107 Selden Street Berlin, CT 06037 h. Delmarva Power & Light Company PECO Energy Company The Potomac Electric Power Company Baltimore Gas and Electric Company Attn: Lynn R. Zack, Esq. Assistant General Counsel Exelon Corporation 2301 Market Street, S23-1 Philadelphia, PA 19103 i. Ohio Edison Company Monongahela Power Company Metropolitan Edison Company Jersey Central Power & Light Company Pennsylvania Electric Company Pennsylvania Power Company Potomac Edison Company Attn: Kathy M. Hofacre FirstEnergy Corp. 76 S. Main St., A-GO-15 Akron, OH 44308 The nature and the amount of claims of the Utilities, and the times of acquisition thereof are as follows: a. The following Utilities have unsecured claims against the above-referenced Debtors arising from prepetition utility usage: American Electric Power, Constellation NewEnergy, Inc., Constellation NewEnergy - Gas Division, LLC, Florida Power Florida Power & Light Company, Gulf Power Company, The Connecticut Light & Power Company, Yankee Gas Services Company, Delmarva Power & Light Company, PECO Energy Company, The Potomac Electric Power Company, Ohio Edison Company, Metropolitan Edison Company, Jersey Central Power & Light Company, Pennsylvania Electric Company, Pennsylvania Power Company, Potomac Edison Company, Monongahela Power Company and TECO Peoples Gas System. b. The following Utilities held surety bonds that secured prepetition debt: Baltimore Gas and Electric Company, Georgia Power Company, Tampa Electric Company and Virginia Electric and Power Company d/b/a Dominion Energy Virginia. c. For more information regarding the claims and interests of the Utilities in these jointly-administered cases, refer to the Objection of Certain Utility Companies To the Motion of Debtors For Interim and Final Orders (a) Approving the Debtors' Proposed Adequate Assurance of Payment For Future Utility Services, (b) Prohibiting Utility Companies From Altering, Refusing, or Discontinuing Services, (c) Approving the Debtors' Proposed Procedures For Resolving Adequate Assurance Requests, and (d) Granting Related Relief (Docket No. 152) filed in the above-captioned, jointly-administered, bankruptcy cases. The Law Firm of Russell R. Johnson III, PLC was retained to represent the foregoing Utilities in October 2020. The circumstances and terms and conditions of employment of the Firm by the Companies is protected by the attorney-client privilege and attorney work product doctrine. The Firm can be reached at: Russell R. Johns III LAW FIRM OF RUSBELL R. JOHNSON III, PLC 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Telephone: (804) 749-8861 Facsimile: (804) 749-8862 E-mail: russell@russelljohnsonlawfirm.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3egoQra About RTI Holding Company, LLC RTI Holding Company, LLC and its affiliates develop, operate, and franchise casual dining restaurants in the United States, Guam, and five foreign countries under the Ruby Tuesday brand. The company-owned and operated restaurants (i.e., non-franchise) are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest regions of the United States. RTI Holding Company and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12456) on October 7, 2020. The petitions were signed by Aziz Hashim, managing member of Manager, NRD Capital Management II, LLC. At the time of the filing, RTI Holding Company had estimated assets of between $100 million and $500 million and liabilities of the same range. Judge John T. Dorsey oversees the case. Pachulski Stang Ziehl & Jones LLP is the Debtors' legal counsel. CR3 Partners, LLC is Debtors' financial advisor; Epiq Corporate Restructuring, LLC is their claims, noticing, solicitation agent and administrative advisor. S.A.S.B. INC: Wins Confirmation of Chapter 11 Plan -------------------------------------------------- S.A.S.B. Corporation won confirmation of its Plan of Reorganization. On July 16, 2020, Debtor S.A.S.B., Inc. filed with the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, a Plan and a Disclosure Statement. Judge Mindy A. Mora set a hearing for Sept. 30, 2020, to consider approval of the Disclosure Statement and confirmation of the Plan. The Disclosure Statement including any amendments via interlineations filed therewith is APPROVED; and the Plan of Reorganization including any amendments via interlineations filed therewith is CONFIRMED. A copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/WSUCFPY/SASB_Corporation__flsbke-19-23357__0166.0.pdf?mcid=tGE4TAMA The Court will conduct a post-confirmation status conference on Nov. 17, 2020 at 1:30 p.m. in the U.S. Bankruptcy Court, 1515 N. Flagler Drive, Courtroom A, West Palm Beach, Florida 33401. If hearings have not resumed at the courthouse, the hearing will be conducted telephonically and all parties in interest must arrange to appear solely telephonically via CourtSolutions (https://www.court-solutions.com/signup). To participate through CourtSolutions, you must make a reservation in advance no later than 3:00 p.m., one business day before the date of the hearing. Reservations should be arranged online at https://www.court-solutions.com/. If a party is unable to register online, a reservation may also be made by telephone at (917) 746−7476, to determine: (I) compliance with the provisions of the Order, and (ii) whether the disbursing agent and the plan proponent have timely filed the required Final Report of Estate and Motion for Final Decree Closing Case. About S.A.S.B. Corp. Based in Okeechobee, Fla., S.A.S.B. Corporation, doing business as Okeechobee Discount Drug, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-23357) on Oct. 4, 2019, listing under $1 million in both assets and liabilities. The case has been assigned to Judge Erik P. Kimball. Craig I. Kelley, Esq., at Kelley, Fulton & Kaplan, P.L., is the Debtor's legal counsel. SCREENVISION LLC: Moody's Lowers CFR to Caa1 -------------------------------------------- Moody's Investors Service downgraded Screenvision, LLC's ratings, including its Corporate Family Rating (CFR) to Caa1 from B2, and changed the rating outlook to stable from negative. The two-notch downgrade reflects Moody's expectation for weak operating performance over the next year as a result of prolonged theater closures in certain markets triggered by the coronavirus pandemic and uncertainty as to the timing and extent of a recovery in attendance levels. Absent a sharp rebound in attendance levels, Moody's expects the company to burn cash over at least the next two quarters, which will reduce the company's cash position. Assuming that by the end of 2021 movie attendance will gradually recover to roughly 70%-80% of the 2019 level, Moody's projects that Screenvision's FY2021 leverage will be high, at around 5-8x range, up from 2.5x at the end of 2019 (all ratios are Moody's adjusted). A number of factors create uncertainty about the extent of a recovery in attendance levels. The willingness of audiences to attend movies amid the pandemic, even with Moody's assumption for improving conditions in 2021, is unclear. Furthermore, the acceleration of transformative social trends, such as rapidly growing competition from streaming video-on-demand platforms and shrinking theatrical windows will likely further reduce movie attendance even after the outbreak is contained. Also, the sharp deterioration in financial health of the company's exhibitor partners could lead to a reduction in their theater footprints over time. The coronavirus outbreak, the government measures put in place to contain it, and the weak economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody's analysis has considered the effect on the performance of cinema advertisers from the restrictions on leisure and entertainment activities in public spaces and a gradual recovery for the coming year. The entertainment, leisure and media sectors have been significantly affected by the shock given state and federal restrictions to contain the pandemic and the industry's sensitivity to consumer sentiment. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. A summary of the rating actions is as follows: Downgrades: Issuer: Screenvision, LLC Probability of Default Rating, Downgraded to Caa1-PD from B2-PD Corporate Family Rating, Downgraded to Caa1 from B2 Senior Secured first lien revolver due 2023, Downgraded to from Caa1 (LGD3) from B2 (LGD3) Senior Secured first lien term loan due 2025, Downgraded to from Caa1(LGD3) from B2 (LGD3) Outlook Actions: Issuer: Screenvision, LLC Outlook, Changed to Stable from Negative RATINGS RATIONALE Screenvision's Caa1 corporate family rating reflects the expected deterioration in operating performance because of temporary theater closings and uncertainty about the timing of a rebound in attendance and a limited liquidity cushion. The rating is also constrained by secular trends within the cinema industry that may continue to lead to declining attendance and a concentrated revenue base. The company leverage was modest prior to the coronavirus outbreak at 2.5x and 2.8x (including Moody's standard adjustments) as of FY2019 and LTM 3/2020, but will likely increase to the 5x-8x range (all metrics are Moody's adjusted) by the end of 2021 assuming theaters reopen across the country and activity resumes starting in April-July 2021. Nevertheless, Screenvision garners support from its well-established market position for on-screen cinema advertising and its long-term contracts with cinema owners, which provide some stability to cash flows when theaters reopen. Screenvision's highly variable cost structure has enabled the company to reduce costs quickly to limit cash burn to about $3 million a month during the outbreak. The company continues to aggressively manage costs to preserve liquidity. Importantly, the pandemic has led to the temporary closure of movie theaters and a decline in the creditworthiness of Screenvision's exhibitor partners, including its largest - AMC Entertainment Holdings, Inc., (AMC, Caa3 negative), elevating the risk of business disruptions should AMC need to restructure its operations or capital structure. AMC contributed 17% of the company's FY2019 revenue. The remaining 83% of revenue Screenvision generates from roughly 170 exhibitors that are smaller, privately held, with less visibility into their financial position relative to AMC and potentially more vulnerable to theater closures during the pandemic. According to the National Association of Theater Owners, about 69% of small- to mid-size theater owners will be forced to shut theaters permanently or file for bankruptcy in the absence of federal relief [1]. If a bankruptcy case were commenced by an exhibitor partner, it is possible that the exhibitor services agreement between Screenvision and that partner could be restructured as part of the proceedings. Furthermore, the deterioration of the exhibitor partners' financial health elevates the risk of permanent closures of less productive theaters. A reduction in the number of theatres could lead to reduced attendances and lower advertising revenues for the company, but this risk is mitigated by the excess theatre capacity within the industry. As cinema business has slowed, Screenvision pivoted to representing inventory of other out-of-home screens. While still in the early stages currently, the company expects that this diversification strategy should bolster the company's operating performance over time. The social trends within the cinema industry characterized by declining attendance are exacerbated by health safety concerns in the public places due to the coronavirus pandemic. Entertainment shifted to the home during the outbreak, and there is a risk of a longer-term shift in customer behavior away from cinema. Competition from streaming services, which have increased their subscriber bases during the outbreak, is intensifying. Competition has expanded to include direct-to-consumer streaming platforms that are increasingly releasing movies directly to view-on-demand. The movie industry, and hence cinema advertisers, will be hurt if customary theatrical release windows continue to shorten as film studios increasingly release movies to online platforms concurrently with their theatrical release or very soon thereafter. Combined, these factors present substantial risks to Screenvision over the next 12-18 months. LIQUIDITY Screenvision's liquidity is adequate. The company does not face near-term debt maturities, with the $175 million term loan ($143.7 million outstanding as of 6/30/20) due in July 2025 and $30 million revolver (with $10 million balance as of 6/30/20) expiring in July 2023. Screenvision's $30 million revolving credit line is small relative to Screenvision scale, and is subject to a springing maximum net first lien leverage ratio of 5.5x tested when the facility is at least 35% used, which affords only $10.5 million availability before the covenant is triggered. Since Screenvision's net leverage exceeds the springing maximum covenant, the company does not have additional borrowing capacity in the absence of an amendment. Screenvision reduced its cash burn to roughly $3 million a month following the theater shut down in March and no longer has to make term loan amortization payments until the term loan maturity in 2025, having prepaid all amortization through maturity last year. With $45 million of cash and a $14 million accounts receivable balance as of June 30, 2020, Moody's believes Screenvision has sufficient liquidity to meet its basic cash needs next year, but the liquidity cushion will weaken significantly without a meaningful rebound in attendance levels over the course of 2021. The stable outlook reflects Moody's expectation for gradual recovery of operations in 2021, with revenue in the $170-$200 million range (or 70%-80% of 2019 level), and adequate liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Screenvision's rating could be downgraded if there is a sharp deterioration in liquidity, a higher than anticipated cash burn or a slower than expected rebound in attendance levels in 2021. The ratings could also be pressured by a continued deterioration in the creditworthiness of the exhibitor partners, or a growing number of permanent movie theaters closures that are likely to pressure the company's operations. The ratings could be upgraded if Screenvision improves its earnings and cash flow such that Debt-to-EBITDA is expected to be sustained under 6x (Moody's adjusted), the company improves its liquidity, and the demand environment is supportive of revenue and earnings growth. The principal methodology used in these ratings was Media Industry published in June 2017. Screenvision, headquartered in New York City, is a privately owned operator of a leading in-theater advertising network in the United States. The company is majority-owned by affiliates of Abry (about 74%), with ownership stakes also held by AMC Entertainment and the company's management. SILGAN HOLDINGS: Egan-Jones Hikes Sr. Unsecured Debt Ratings to BB ------------------------------------------------------------------ Egan-Jones Ratings Company, on October 23, 2020, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Silgan Holdings Incorporated to BB from BB-. Headquartered in Stamford, Connecticut, Silgan Holdings Inc. and its subsidiaries manufacture consumer goods packaging products. SLM CORP: Fitch Assigns BB+ Rating on $500MM Unsec. Notes --------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB+' to SLM Corporation's (SLM) issuance of $500 million, 4.2% senior unsecured notes maturing in October 2025. Proceeds from the senior unsecured debt issuance are expected to be used to fund a tender offer for up to 2,000,000 shares (50% of outstanding shares) of its Series B non-cumulative preferred stock, and for general corporate purposes, which may include the repayment of debt and future share repurchase programs. SLM has a long-term Issuer Default Rating (IDR) of 'BB+' with a Negative Outlook. KEY RATING DRIVERS The unsecured debt rating is equalized with the ratings assigned to SLM's existing senior unsecured debt, as the new notes will rank equally in the capital structure. The alignment of the unsecured debt rating with that of the long-term IDR reflects solid unencumbered collateral coverage. The Negative Outlook reflects the significant downside risk to its financial profile metrics, particularly asset quality and capitalization, resulting from wide-ranging impact of the coronavirus pandemic on the U.S. higher education sector and the broader economy, particularly the sharp rise in unemployment. While federal government programs, including loans/grants to small businesses, enhanced unemployment insurance payments, and one-time payments to low- and middle-income households combined with SLM's extension of borrower payment deferrals or forbearance have helped mitigate the financial implications from the pandemic, the degree to which the financial implications (most notably borrower defaults) have been delayed rather than mitigated remains uncertain at this stage. RATING SENSITIVITIES SLM's senior unsecured debt ratings are primarily linked to changes in its long-term IDR. However, an increase in secured debt as a proportion of total funding longer term, which reduces recovery prospects for unsecured creditors, could result in the unsecured debt rating being notched down from the Long-Term IDR. Factors that could, individually or collectively, lead to a negative rating action/downgrade include a significant erosion in SLM's CET1 ratio below 11% (excluding CECL-related effects), meaningful deterioration in portfolio credit quality, a greater emphasis on brokered deposits and secured funding, or legislative actions aimed at reducing demand for private education loans. It should be noted that SLM's fully phased-in CET1 ratio of 9% (inclusive of CECL related impacts) is considerably below its reported CET1 ratio of 12.7% at 3Q20. While the outsized impact of CECL on SLM's loan loss reserves and equity capital is incorporated into Fitch's analysis of the issuer's capital strength, loan loss reserves are segregated to absorb future credit losses and are therefore unavailable to absorb losses from other events such as regulatory, litigation, or operational risks. Negative ratings momentum could also be driven by significant erosion in the importance of the school financial aid office channel for student loan originations that could be detrimental to SLM's franchise, or further increases in loans being refinanced from SLM that would result in meaningful margin pressure and/or weaker credit performance. Factors that could, individually or collectively, lead to a positive rating action, including a revision of the Outlook back to Stable, include improved visibility of the company's credit performance and profitability outlook such that there is an increased level of confidence that SLM's performance relative to Fitch's benchmark metrics will remain within cyclical norms over the Outlook horizon, and the ability to demonstrate capital resiliency through the current severely adverse economic environment. Longer-term, positive rating momentum could develop from meaningful improvements in core fee-business growth and operating performance, a demonstrated ability to successfully grow new businesses that enhance SLM's earnings capacity and a moderation in shareholder distributions. 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 SLM has an ESG Relevance Score of '4' for Exposure to Social Impacts due to its exposure to shifts in social or consumer preferences as a result of an institution's social positions or social and/or political disapproval of core activities. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. SM ENERGY: Incurs $98.3 Million Net Loss in Third Quarter --------------------------------------------------------- SM Energy Company filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $98.29 million on $281.01 million of total operating revenues and other income for the three months ended Sept. 30, 2020, compared to net income of $42.23 million on $390.32 million of total operating revenues and other income for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $599.44 million on $806.38 million of total operating revenues and other income compared to a net loss of $84.95 million on $1.14 billion of total operating revenues and other income for the same period during the prior year. As of Sept. 30, 2020, the Company had $5.12 billion in total assets, $377.28 million in total current liabilities, $2.56 billion in total noncurrent liabilities, and $2.18 billion in total stockholders' equity. Chief Executive Officer Jay Ottoson comments: "Exceptional third quarter results are due to continued capital discipline, aggressive cost management, better than expected well performance and adherence to strict financial objectives to generate free cash flow and reduce absolute debt. The entire SM Energy team is working diligently toward our common 2020 goals and objectives and we congratulate our employees on our success year-to-date, especially during a particularly challenging time. "As we look ahead, we intend to stay-the-course and continue to prioritize generating free cash flow and reducing leverage." On Sept. 30, 2020, the outstanding principal amount of the Company's long-term debt was $2.42 billion, down from $2.77 billion at year-end 2019. Long-term debt was comprised of $1.73 billion in unsecured senior notes, $446.7 million in secured senior notes, $65.5 million in secured senior convertible notes, plus $178.0 million drawn on the Company's senior secured revolving credit facility. On Sept. 30, 2020, the Company's borrowing base and commitments under its senior secured revolving credit facility were $1.1 billion. The Company's available liquidity was $880 million, which includes $178.0 million drawn and a $42 million letter of credit. The cash balance was approximately zero. The Company expects to complete its fall redetermination process in November 2020. Capital expenditures before capital accruals for the third quarter of 2020 were $121.1 million. During the third quarter 2020, the Company drilled 19 net wells and added 24 net flowing completions. For the nine months of 2020 the Company drilled 72 net wells and added 54 net flowing completions. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/893538/000089353820000140/sm-20200930.htm About SM Energy SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in the state of Texas. SM Energy recorded a net loss of $187 million for the year ended Dec. 31, 2019. As of June 30, 2020, the Company had $5.27 billion in total assets, $307.90 million in total current liabilities, $2.68 billion in total noncurrent liabilities, and $2.28 billion in total stockholders' equity. * * * As reported by the TCR on June 26, 2020, S&P Global Ratings raised its issuer credit rating on U.S.-based oil and gas exploration and production (E&P) company SM Energy Co. to 'CCC+' from 'SD' (selective default). As reported by the TCR on May 5, 2020, Moody's Investors Service downgraded SM Energy Company's Corporate Family Rating to Caa1 from B3. The downgrade reflects the company's intention to issue new secured debt to exchange for up to $1,681 million of its senior unsecured notes at a 35% to 50% discount to par, a transaction Moody's views as a distressed exchange and thus, a default. Also in May 2020, Fitch Ratings downgraded SM Energy Company's Issuer Default Rating to 'C' from 'B-' following the company's announcement of an offer to exchange a series of senior secured notes for new second lien notes. SMYRNA READY: Moody's Withdraws B1 Rating on Secured Credit Loans ----------------------------------------------------------------- Moody's Investors Service withdrawn the B1 rating on Smyrna Ready Mix Concrete, LLC's senior secured credit facility. All other ratings for the company remain unchanged. The outlook is stable. The rating action follows the cancelation of the proposed $315 million senior secured credit facility. Instead, the company has increased the size of its proposed senior secured notes to $830 million from $515 million. The proceeds from the senior secured notes due 2028, will be used to refinance the company's existing term loan facility and fund several already entered into bolt-on acquisitions across the company's footprint, which will further strengthen Smyrna's market position in the ready-mix concrete business. Pro forma for the bolt-on acquisitions and the proposed financing, Moody's projects the company's leverage will be 3.9x at December 31, 2020 (including Moody's adjustments). Withdrawals: Issuer: Smyrna Ready Mix Concrete, LLC Gtd. Senior Secured Term Loan, Withdrawn, previously rated B1 (LGD4) RATINGS RATIONALE Smyrna's B1 Corporate Family Rating reflects the company's market position as a one of the leading regional producers of construction materials in Tennessee, Florida, Georgia and Kentucky, its vertically integrated asset base and broad customer base. In addition, Moody's rating is supported by the company's strong EBITDA margins, commitment to reduce leverage and to maintain a good liquidity profile. At the same time, Moody's rating takes into consideration the company's vulnerability to cyclical end markets, the competitive nature of its ready-mix concrete business, and material revenue exposure to Tennessee and Florida. Governance risks considered for Smyrna include the company's acquisitive strategy, its financial policy, family control, and lack of independent board members. This is partially mitigated by Smyrna's historical focus on execution, reinvestment in the business, and commitment towards a disciplined financial policy. The stable outlook reflects Moody's expectation that Smyrna will steadily grow its revenues, maintain its strong operating performance, generate solid free cash flow, and remain committed to reducing its debt leverage. This is largely driven by Moody's view that the US economy will improve sequentially and remain supportive of the company's underlying growth drivers. Moody's expects Smyrna to maintain a good liquidity profile over the next 12-18 months. Pro forma for the transaction, Smyrna's liquidity position is supported by approximately $15 million of cash (at December 31, 2020), a $100 million asset based revolving credit facility (unrated), which will remain mostly undrawn and Moody's expectation that the company will generate more than $50 million in free cash flow in 2021. The asset based revolving credit facility, which expires in 2025, is governed by a springing fixed-charge coverage ratio of 1.0x, that comes into effect if availability under the asset based revolving credit facility is less than 15% of the total revolver availability. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if: -- Debt-to-EBITDA is below 3.5x for a sustained period of time -- EBIT-to-Interest expense is above 2.0x for a sustained period of time -- The company maintains its strong operating performance and improves its liquidity profile -- The company demonstrates a conservative financial policy The ratings could be downgraded if: -- Debt-to-EBITDA is above 4.5x for a sustained period of time -- EBIT-to-Interest expense is below 2.0x for a sustained period of time -- The company's operating performance and liquidity profile deteriorates Smyrna Ready Mix Concrete, LLC is a manufacturer and retailer of ready-mixed concrete in Tennessee, Florida, Kentucky, Ohio, Indiana, Texas, Georgia, Alabama, Arkansas, Michigan, South Carolina and Virginia. The company operates within two primary segments: (i) ready-mixed concrete, which accounts for more than 90% of revenue, and (ii) aggregate products. The company currently owns and operates 203 active plants, 162 of which have daily yardage volumes ranging from 100 - 2,000 yards per day per plant. Most of Smyrna's plants are located within a 50-minute driving time of multiple metropolitan areas. Pro forma for recent and planned acquisitions, revenue and adjusted EBITDA for the last twelve months ended June 30, 2020, would have been approximately $1.1 billion and $222 million, respectively. SOUTHERN TIER HEMP: Skips Payments on $1 Million Debt ----------------------------------------------------- Law360 reports that a New York hemp grower says CBD company Southern Tier Hemp has skipped out on a bill for nearly $1 million, adding to litigation accusing the company of failing to pay debts on hemp plants and products. NG Growers, which operates as Nanticoke Gardens, opened its case Oct. 28, 2020 with a motion for summary judgment asking a Broome County, New York, judge to order Southern Tier to pay $936,660, plus interest and fees, after it allegedly failed to pay the full amounts it owed on two payment deadlines. About Southern Tier Hemp Based in New York, the agriculture technology company will offer a suite of branded wellness products and superfoods for the whole home. Southern Tier Hemp is a vertically-integrated agriculture technology company that is one of the first enterprises in New York State to develop, manufacture and sell hemp cannabidiol based products directly to consumers. The company is headquartered in Johnson City, New York and has an office in New York, New York. On the Web: http://www.southerntierhemp.com/ STEM HOLDINGS: Arthur Kwan Quits as Director -------------------------------------------- Arthur Kwan advised Stem Holdings, Inc. on Oct. 28, 2020, that he was resigning from the Company's Board of Directors with immediate effect. The Company does not intend to replace Mr. Kwan at this time About Stem Holdings Headquartered in Boca Raton, Florida, Stem Holdings, Inc. -- http://www.stemholdings.com/-- is a multi-state, vertically integrated, cannabis company that purchases, improves, leases, operates and invests in properties for use in the production, distribution and sales of cannabis and cannabis-infused products licensed under the laws of the states of Oregon, Nevada, California, and Oklahoma. Stem Holdings reported a net loss of $28.98 million for the year ended Sept. 30, 2019, compared to a net loss of $8.70 million for the year ended Sept. 30, 2018. As of June 30, 2020, the Company had $46.39 million in total assets, $17.72 million in total liabilities, and $28.67 million in total shareholders' equity. LJ Soldinger Associates, LLC, in Deer Park, IL, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 1, 2020, citing that the Company and its affiliates reported net losses of $28.985 million and $8.698 million, negative working capital of $2.635 million and $2.273 million and accumulated deficits of $37.082 million and $11.533 million as of and for the year ended Sept. 30, 2019 and 2018, respectively. In addition, the Company has commenced operations in the production and sale of cannabis and related products, an activity that is illegal under United States Federal law for any purpose, by way of Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970, otherwise known as the Controlled Substances Act of 1970. These factors raise substantial doubt as to the Company's ability to continue as a going concern. SUNOPTA INC: Posts $2.8 Million Net Loss in Third Quarter --------------------------------------------------------- SunOpta, Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a loss attributable to common shareholders of $2.75 million on $314.98 million of revenues for the quarter ended Sept. 26, 2020, compared to a loss attributable to common shareholders of $13.76 million on $295.94 million of revenues for the quarter ended Sept. 28, 2019. "A 6.4% increase in revenue combined with our best gross margin percentage in over eight years, produced a 129% gain in adjusted EBITDA versus the prior year. We are proud of the fact that we have doubled adjusted EBITDA four quarters in a row. With this accomplishment as a backdrop, and the momentum we feel we have going forward, we believe it is safe to say that SunOpta is no longer a turnaround story, we are quite simply a sustainable growth story. We are having a great year. For three consecutive quarters, all three of our business segments have delivered topline growth and margin expansion, led once again by the very strong performance of our plant-based business unit. The execution of our plan is showing in our results, and we are investing for future growth to ensure consistent, sustainable results," said Joe Ennen, chief executive officer of SunOpta. "Consumer demand in our core categories continues to be impressive. Our focus and investment in plant-based foods continues to be a source of strength and recent investments that come on-line during the fourth quarter set us up for continued strong growth over the coming years. With a strong pipeline of new business opportunities, strong consumer demand and a continued focus on execution, we are confident in our ability to continue to drive growth and shareholder value." For the three quarters ended Sept. 26, 2020, the Company reported a loss attributable to common shareholders of $3.02 million on $961.87 million of revenues compared to a loss attributable to common shareholders of $1.16 million on $894.22 million of revenues for the three quarters ended Sept. 28, 2019. As of Sept. 26, 2020, the Company had $921.36 million in total assets, $672.14 million in total liabilities, $86.95 million in series A preferred stock, $27.47 million in series B preferred stock, and $134.80 million in total equity. During the third quarter of 2020, cash generated by operating activities was $20.2 million, compared to $4.3 million during the third quarter of 2019. The $15.9 million improvement in operating cash flow primarily reflects the improved year-over-year operating results. Cash used in investing activities in the third quarter of 2020 was $11.8 million, compared with $7.6 million in the third quarter of 2019, an increase in cash used of $4.2 million, mainly related to the expansion of plant-based manufacturing capacity. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/351834/000106299320005269/form10q.htm About SunOpta Inc. Headquartered in Ontario, Canada, SunOpta Inc. is a global company focused on plant-based foods and beverages, fruit-based foods and beverages, and organic ingredient sourcing and production. SunOpta specializes in the sourcing, processing and packaging of organic, natural and non-GMO food products, integrated from seed through packaged products; with a focus on strategic vertically integrated business models. SunOpta reported a loss attributable to common shareholders of $8.78 million for the year ended Dec. 28, 2019, compared to a net loss attributable to common shareholders of $117.11 million for the year ended Dec. 29, 2018. As of March 28, 2020, the Company had $894.42 million in total assets, $676.39 million in total liabilities, $84.55 million in series A preferred stock, $and $133.47 million in total equity. * * * As reported by the TCR on June 2, 2020, S&P Global Ratings raised its issuer credit rating on Mississauga, Ont.-based food and beverage manufacturer SunOpta Inc. to 'CCC+' from 'CCC'. "We forecast SunOpta's operating performance to improve meaningfully in fiscal 2020. The upgrade reflects our favorable view of the company's execution on its turnaround initiatives across its business divisions, particularly the growth in its plant-based foods and beverages segments," S&P said. THIRD COAST: Moody's Hikes Senior Unsecured Notes to 'Caa1' ----------------------------------------------------------- Moody's Investors Service affirmed Third Coast Midstream, LLC's Corporate Family Rating (CFR) at B3 and Probability of Default Rating (PDR) at B3-PD. Concurrently, Moody's upgraded Third Coast's senior unsecured notes rating to Caa1 from Caa2. The outlook was changed to stable from negative. "The upgrade of Third Coast's senior unsecured notes to one notch below the CFR follows the extension of the secured revolver and reduction in size and secured debt outstanding," said Jonathan Teitel, a Moody's analyst. "Ratings are constrained by the bond maturity in 2021 but Third Coast's significant debt reduction, supported by non-core asset sales since being taken private, better positions the company for refinancing." Upgrades: Issuer: Third Coast Midstream, LLC Senior Unsecured Notes, Upgraded to Caa1 (LGD4) from Caa2 (LGD5) Affirmations: Issuer: Third Coast Midstream, LLC Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Withdrawals: Issuer: Third Coast Midstream, LLC Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-4 Outlook Actions: Issuer: Third Coast Midstream, LLC Outlook, Changed to Stable from Negative RATINGS RATIONALE Third Coast's B3 CFR is constrained by the need to address debt that matures in 2021. Third Coast is small and has asset and geographic concentration, offset by moderate financial leverage of about 3x and minimal capital spending needs that supports free cash flow generation. Since being taken private in 2019, the company has simplified its business to focus on its Gulf of Mexico and Gulf Coast assets. It sold non-core onshore assets, significantly reduced debt and lowered its corporate expenses. The company's long-term fixed fee contracts remove direct commodity price exposure. Volume risks are mitigated by the sizable cash flow attributable to producing wells. The company benefits from the sizable portion of operating margin that it generates from ship-or-pay, firm transportation and other similar contracts. Also, much of the margin is attributable to customer contracts that extend through the life-of-lease. A substantial portion of Third Coast's cash flow comes from distributions from investments in unconsolidated affiliates and several assets in particular account for a majority of cash flow. This raises concentration and idiosyncratic risks from its assets having larger than expected downtime or curtailed production volumes in given time periods which could result from maintenance activities (including on connecting infrastructure) or hurricanes. Moody's considers Third Coast's liquidity as weak because all its debt matures in 2021. Nevertheless, the company's credit profile has become increasingly supportive of refinancing. In October 2020, the company extended its revolver and reduced lender commitments. The company's $125 million revolver matures in September 2021 (extended from December 2020). The revolver size steps down to $100 million at the end of 2020, $75 million at the end of the first quarter of 2021 and $50 million at the end of the second quarter of 2021. As of October 1, 2020, the revolver had $90 million drawn and $5 million in letters of credit outstanding. The revolver has three financial covenants comprised of a maximum secured leverage ratio, a maximum total leverage ratio and a minimum interest coverage ratio. Moody's expects the company to maintain compliance with these covenants. Third Coast's $425 million of senior unsecured notes due December 2021 are rated Caa1, one notch below the CFR. These notes are effectively junior to the secured revolver's (unrated) priority claim to the assets. The stable outlook reflects Third Coast's significant debt reduction and correspondingly moderate financial leverage and solid free cash flow generation that has better positioned the company to refinance its debt that matures in 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS If the company can refinance its upcoming debt maturities on reasonable terms, factors that could lead to an upgrade include maintaining debt/EBITDA around 3x and adequate liquidity. Factors that could lead to a downgrade include Moody's view that there are rising risks to refinancing debt maturing in 2021, other weakening of liquidity, or EBITDA/interest approaching 1.5x. Third Coast, headquartered in Houston, Texas, is a privately-owned midstream energy company with assets focused on the Gulf of Mexico and Gulf Coast. The company is owned by affiliates of ArcLight Capital Partners, LLC. The principal methodology used in these ratings was Midstream Energy published in December 2018. TIME DEFINITE: Court Confirms Plan After Modifications ------------------------------------------------------ Judge Michael G. Williamson in early September 2020 entered an order approving Time Definite Services, Inc. and Time Definite Leasing, LLC's Second Joint Disclosure Statement and confirming Debtors' Fourth Joint Plan as modified. During the hearing, the parties informed the Court that the parties had reached various agreements to resolve their disputes regarding confirmation issues, as set forth below (collectively, the "Modification"): Plan amendments made on the record in open court: i. The treatment of Class 3 shall be modified as follows: Wells Fargo Equipment Finance, Inc. filed proof of claim (TDS Claim #21) in the total amount of $530,013.40 based upon a lease with a terminal rental adjustment clause. The lease shall be rejected and treated pursuant to this Court’s Order at Doc. No. 568. Wells Fargo Equipment Finance, Inc. will have a general unsecured claim for any rejection damages which will be paid pursuant to Class 28. ii. The treatment of Class 5 shall be modified as follows: JPMorgan Chase Bank, N.A., filed a proof of claim (TDS Claim #30) in the total amount of $7,491,996 which is secured by a first position lien on cash collateral, various rolling stock, and the Debtor's litigation with Navistar. Chase also filed a second proof of claim (TDS Claim #59) in the TDS case and two additional claims in the TDL case (TDL Claim #s 2 and 13). Upon information and belief, TDS Claim #59 and TDL Claim #s 2 and 13 are duplicates of TDS Claim #30 and will be treated as such under the Plan. Chase's claim shall be treated in accordance with the terms of the Mediated Settlement Agreement dated June 22, 2020, and which is attached to the Motion to Approve Compromise and Settlement Agreement with Chase, Debtors, and Related Parties of Debtors (TDS Docket #529) as Exhibit "A" (the "Chase Agreement"), and was approved by the Court in full at Docket #561. The entirety of the Chase Agreement and its terms and conditions are fully incorporated herein, with full force and effect as if specifically stated in this Plan. However, the parties have agreed to modify the Chase Agreement solely to permit the Effective Date of the Plan to be contemporaneous with Chase’s confirmation of receipt of the Takeout Payment (as that term is defined in the Chase Agreement). iii. The treatment of Classes 6 – 10 shall be modified as follows: VFS Leasing Co. filed secured proofs of claim in the total amount of $3,479,982.85 (the "VFS Claims"). Each claim was separately classified under the Plan. Pursuant to the Settlement Term Sheet (the “VFS Leasing Agreement”) entered into as of August 11, 2020, and attached to the VFS Leasing Settlement Notice, by and between Time Definite Services, Inc., and Time Definite Leasing, LLC, as debtors and debtors in possession, VFS Leasing Co. and Volvo Financial Services, a division of VFS US LLC , and Michael A. Suarez, TDST, LLC, Time Specialized Brokerage, Inc., and Time Definite Services Transportation, LLC, VFS Leasing shall have an allowed unsecured claim in the amount of $1,664,111, and shall have all the other benefits of the Settlement Agreement, including the new lease described therein. The entirety of the VFS Leasing Agreement and its terms and conditions are fully incorporated herein, with full force and effect as if specifically stated in the Plan. iv. The treatment of Class 21 shall be modified as follows: Signature Financial LLC filed a proof of claim (TDS Claim #53) in the total amount of $606,614 which is secured by various vehicles. This claim will be treated pursuant to the Agreed Order and Amended Stipulation (1) Resolving Signature Financial, LLC's Motion for Relief From the Automatic Stay Pursuant to 11 U.S.C. Sec. 362(d), (II) Providing for Adequate Protection and (III) Granting Related Relief (Docket #532, the "Agreed Signature Order"). After the Debtor pays Signature's allowed administrative expense claim of $40,000, Signature will have an allowed secured claim of $486,139, plus any additional attorneys' fees and costs incurred by Signature from and after April 30, 2020, less any adequate protection payments not otherwise captured in the Agreed Signature Order. Signature's allowed secured claim will be amortized over 48 months at 5.25% interest with monthly payments commencing 30 days from the entry of the Confirmation Order. As a secured creditor, Signature will retain its secured claim in that amount. Withdrawal of objections/changes of votes made orally on the record in open court: i. Withdrawals of Objections. 1. BMO Harris Bank. N.A withdrew the BMO Objection, in accordance with the Agreed Motion to Approve Compromise and Settlement Agreement filed in Adv. Pro. No. 8-ap-90-MGW (Doc. 31) and the Settlement Agreement dated as of August 27, 2020 (the “BHB Settlement”) attached thereto. 2. Webster Capital Finance, Inc. withdrew the Webster Objection. 3. VFS Leasing Co. withdrew the VFS Objection. 4. The United States withdrew the SBA Objection. 5. Wells Fargo Equipment Finance, Inc. withdrew the Wells Fargo Objection. ii. Vote Changes. 1. People's Capital & Leasing Corporation voted its Class 1 and 28 claims to accept the Plan as modified. 2. Based on the Modification, Wells Fargo Equipment Finance, Inc. voted its Class 2, 3, 4, and 28 claims to accept the Plan as modified. 3. Based on the Mediated Settlement Agreement, JPMorgan Chase Bank, N.A. voted its Class 5 and 28 claims to accept the Plan as modified. 4. Based on the Modification, VFS Leasing Co. voted its Class 6, 7, 8, 9, and 28 claims to accept the Plan as modified. 5. Based on the Modification, Volvo Financial Services, a division of VFS US LLC voted its Class 10 and 28 claims to accept the Plan as modified. 6. Based on the Agreed Motion to Approve Compromise and Settlement Agreement filed in Adv. Pro. No. 8-ap-90-MGW (Doc. 31) and the BHB Settlement, BMO Harris Bank, N.A. voted its Class 11, 12, 13, 14, 15, 16, 17, 18, 19, and 28 claims to accept the Plan as modified. 7. Sumitomo Mitsui Finance and Leasing Company, Limited voted its Class 20 claim to accept the Plan as modified. 8. Based on the Modification, Signature voted its Class 21 and 22claims to accept the Plan as modified. The Disclosure Statement of Time Definite Services, Inc. and Time Definite Leasing, LLC complies with 11 U.S.C. Sec. 1125 and is, therefore, finally approved as containing adequate information within the meaning of that section of the Bankruptcy Code. The Plan is confirmed pursuant to 11 U.S.C. Sec. 1129. About Time Definite Services Time Definite Services, Inc., is a provider of refrigerated trucking and individualized logistics. Its affiliate Time Definite Leasing LLC provides truck renting and leasing services. Time Definite Services and Time Definite Leasing filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 19-06564) on July 12, 2019. In the petition signed by Michael Suarez, president, Time Definite Services disclosed $21,898,781 in assets and $22,555,177 in liabilities. Judge Michael G. Williamson oversees the case. Buddy D. Ford, P.A., is the Debtors' counsel. TK SKOKIE: Extends Plan Deadline to March 2021 ---------------------------------------------- TK Skokie, LLC, sought and obtained an order extending date by which it must its Plan and Disclosure Statement to March 22, 2021. The Debtor filed its Voluntary Chapter 11 Petition on November 30, 2019. Debtor's counsel's calculation of the Section 1121(e)(2) time limit was Sept. 23, 2020. In seeking an extension, the Debtor said it does not expect to be able to meet the deadline primarily due to the total shut-down of its operations due the Coronavirus, thereby leaving the debtor with zero income for four months. Now that limited operations have been restored, the Debtor is reporting income, but revenues still remain at approximately fifty percent of its monthly income pre-petition. The Debtor is asking for a 180-day extension to allow for the continued build-up of business revenues, and hopefully the further relaxing of Coronavirus regulations. The Debtor's counsel: Timothy C. Culbertson P.O. Box 56020 Harwood Heights, Illinois 60656 Tel: (847) 913-5945 E-mail: tcculb@gmail.com TK Skokie, LLC, sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 19-33898) on Nov. 29, 2019, listing assets and liabilities of less than $1 million. Timothy C. Culbertson, Esq., at the LAW OFFICES OF TIMOTHY C. CULBERTSON, is the Debtor's counsel. TOLL ROAD II: Fitch Affirms 'BB-' on $1BB Series 1999/2005 Bonds ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' rating for Toll Road Investors Partnership II (TRIP II, the partnership) Dulles Greenway project's approximately $1 billion in outstanding revenue bonds (series 1999 and 2005). The Rating Outlook remains Negative. RATING RATIONALE The 'BB-' rating reflects Dulles Greenway's commuter traffic base in the metropolitan Washington DC area, which has experienced volatility from economic downturns, toll-free alternate routes, and the impact of the coronavirus. The rating also reflects the limited visibility into TRIP II's short-term, rate-making predictability following expiration of the previously approved schedule. Debt structural features are protective, with a cash funded debt reserve, and a somewhat flexible repayment profile. Financial metrics under Fitch's rating case remain pressured with high leverage and narrow debt service coverage ratios (DSCRs) in the 1.1x range, driven by the escalating debt service profile (0.9% CAGR from 2019-2056), including a step-up in 2022. The Negative Outlook reflects the possible use of cash on hand to meet scheduled debt service payments in the event of a slower recovery in traffic over the near to medium term. The coronavirus has had a severe impact on TRIP II's traffic, with yoy revenue declines of -42.5% for the year through September 30, lagging many peer facilities in Fitch's portfolio. Fitch has analyzed a range of scenarios for a recovery in traffic over the near- to medium term. TRIP II can withstand a sustained decline in traffic, a slow recovery in traffic or low toll rate increases over the long-term and still breakeven on debt due to the significant restricted cash balance of approximately $160 million at June 30, 2020. Despite narrow coverage and an increasing debt schedule, TRIP II retains a modest degree of flexibility if cash flows are insufficient to make scheduled early redemption payments. Resolution of the Negative Outlook will depend on the traffic recovery post-coronavirus in conjunction with clarity into near-term toll increases necessary to maintain adequate coverage levels and financial flexibility. KEY RATING DRIVERS Revenue Risk - Volume: Midrange Strong Service Area, Some Competition: Dulles Greenway benefits from a primarily commuter base with minimal exposure to commercial traffic within the economically strong metro Washington DC service area. Historical traffic volatility is elevated, with a peak-to-trough decline of -32% as a result of the Great Recession, and a degree of elasticity to toll increases. Recent improvements to toll-free alternative routes led to softer traffic performance in 2017-2019, which could lead to a slower recovery in traffic levels after the coronavirus pandemic than other facilities rated by Fitch. The Greenway's toll rates are slightly higher than local peers at around $0.41 peak per mile, though comparable to privately-owned peers within similar, healthy service areas. Revenue Risk - Price: Midrange Limited Visibility into Rate-Setting: Following expiration of the legislative toll rate schedule in FY 2019, there is limited visibility into TRIP II's future toll rates. TRIP II has submitted a rate schedule to the Virginia SCC, which is less predictable than the prior legislative solution (formulaic approach resulting in annual toll increases of approximately 3.0% per year). TRIP II's rate-making has historically increased at above inflationary levels, but could be subject to political interference moving forward, with increasing importance of timely rate increases in advance of the debt service spike in FY 2022. Infrastructure Development & Renewal: Midrange Manageable Near-Term Capital Works: Dulles Greenway's capital plan is adequate to meet the needs of the road, mainly focusing on roadway maintenance and congestion relief projects. TRIP II's 10-year plan is funded with annual deposits from cash flow; over the longer-term, as the asset ages and capital needs increase, the ability to recover capital expenses may be constrained by the current rate-setting framework. TRIP II recently completed a $20 million project to expand the connection to the neighboring Dulles Toll Road with funds held in the distribution lock-up account, which are not viewed as available for capex over the long-term. Debt Structure: Midrange Back-loaded Debt, Sound Covenants: TRIP II's debt structure features fixed-rate, senior debt with several bullet maturities which have been smoothed into an amortizing structure with mandatory early redemption features, escalating at a CAGR of 0.9% from 2020-2056. The legal final maturity date on the series 2005A and 2005B bonds provides a significant tail relative to the early redemption schedule, though the 2005A and 2005B are only a modest portion of the overall capital structure. Missing an early redemption payment is not an event of default, though deferral of planned early redemptions could cause debt obligations to balloon. Cash reserves of nearly 1x maximum annual debt service (MADS) (on a scheduled basis) and a dual-prong distribution lock-up test of 1.25x DSCR and 1.15x (net of deposits for capex) are additional enhancements against the back-loaded and long-dated structure. Financial Summary Reflecting the significant declines from the coronavirus pandemic, Fitch's rating case projects a recovery in traffic to 2019 levels by 2023, with average annual rate increases of 2.5% through 2023 and 1.5% rate increases over the long term. TRIP II's financial profile under Fitch's rating case is narrow, with a 10-year average DSCR of 1.1x through 2029, increasing to the 1.4x range after 2036. Unrestricted cash balances at June 30, 2020 remain strong due to historical cash trapping, with over $78 million of distributable cash held in the early redemption reserve fund in addition to $82 million of restricted cash in debt reserves (nearly 1x MADS). Under a slower recovery in traffic, Fitch forecasts multiple years of DSCR below 1.0x after debt service steps up in 2022, with shortfalls expected to be fully covered through trapped cash and no deferral of scheduled debt service. PEER GROUP Dulles Greenway's peers from a volume perspective include U.S. commuter-based facilities with strong and growing service areas, however these U.S. facilities tend to exhibit investment-grade DSCR levels under Fitch's rating case of 1.4x or better. Fitch has also compared TRIP II to other toll roads globally in the 'BB' category, which exhibit a similar combination of factors, including narrower rating case DSCR of 1.1x over the next 10 years, and additional volatility in traffic along with uncertainty around future toll rates. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Positive rating action is not expected soon given substantial uncertainty in relation to the coronavirus crisis with knock-on effects on economic growth, traffic, and revenues; -- Over the medium term, a well-defined framework to provide adequate rate increases to accommodate the ascending debt service obligations in 2022 and thereafter; -- DSCR metrics (calculated net of capex) above 1.1x on a sustained basis. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Inability to implement adequate rate increases to accommodate the ascending debt service obligations in 2022 and thereafter; -- Further narrowing of DSCR metrics; -- Continued declines in traffic leading to a decline in EBITDA. CREDIT UPDATE Performance Update Traffic and revenue remained soft in fiscal 2019 (year ending December 31), marking the third consecutive year of traffic decline. Traffic fell by -1.6% in FY 2017, -4.5% in FY 2018 and -2.9% in FY 2019, as network changes in the corridor that went into effect in 2016-17 (Routes 7 and 28 widening and removal of stoplights) continued to drive higher traffic on toll-free alternative routes. In addition, a sizable January 2019 toll increase on the Dulles Toll Road (DTR), which connects at the Greenway's eastern terminus, has increased the overall cost for a trip to Washington, D.C., and could be demonstrating a degree of price elasticity by Greenway users. YTD performance through September 2020 has suffered greatly from the coronavirus pandemic, with traffic down -42.8% yoyand revenue down -42.5%. Commuter traffic historically represented a large portion of traffic, and the shift to remote work for this high-income region has been a driver of reduced Greenway volumes. In addition, many schools are holding remote learning, further dampening traffic. The preexisting trends of faster speeds along free alternative routes and some price sensitivity to toll increases further contribute to the slow YTD recovery. The Greenway was unable to obtain a legislative solution with the Commonwealth of Virginia for toll rate increases beginning in 2020, the first year beyond the window covered by legislation. As a result, the future toll-rate setting process involves a petition to the Virginia State Corporation Commission (SCC). An SCC hearing examiner issued a report in October 2020 recommending SCC approval of TRIP II's proposed off-peak toll rates for 2021-2023, but recommended not approving the proposed peak period increases. The final SCC decision is expected in the coming months. Fitch expects that rate increases will factor in the potential for elasticity of demand balanced by the need for TRIP II to increase revenues in order to meet its increasing debt schedule. FINANCIAL ANALYSIS Fitch Cases Fitch's base case assumes some improvement in 4Q20 traffic volumes for an overall decline of -28% for the year, with a quick rebound in 2021 and a recovery to 2019 traffic volumes by 2022. Thereafter, growth is staggered and gradually declines from 0.8% per year down too little to no growth through maturity. Toll rates increase by approximately 2.5% per year from 2021-2023, then shifting to a lower 1.5% growth rate over the long term. Expenses are cut by 10% in 2020, tracking YTD performance, and then grow by 2.75% per year. Under the base case, DSCR reaches a minimum of 1.1x in 2022, and remains narrow through 2035, then increases to above 1.4x through final maturity. Fitch's rating case (coronavirus downside case) has a slower recovery in traffic over the near term, with traffic back to 2019 levels by 2023, and thereafter 0.5% annual growth stepping down to zero over the debt tenor. The rating case adopts the same rate increases as the base case. The minimum DSCR is 1.1x with a 10-year average of 1.1x through 2029. From 2034 onward, the DSCR hovers just below 1.4x. Fitch also prepared several sensitivity and breakeven scenarios to assess the impact of a slower recovery in traffic or lower toll rate increases. Fitch ran a permanent downward shift in traffic in 2021 whereby traffic in 2021 remains -25% below 2019 levels (approximately 13.3 million vehicles) and then grows at base case levels through final maturity. Under this scenario, toll rate increases of 1.5% per year from 2024 would be sufficient to allow the project to breakeven while drawing down all current restricted cash for debt service. If toll rates are increased at 3%, then traffic can withstand a -31% decline relative to 2019 levels, with inflationary growth thereafter, and still breakeven, without using any debt deferability. While these scenarios involve drawing down the restricted cash balance, they demonstrate some resilience to a severe decline in traffic or to a prolonged period of low toll increases, which are supportive of the current rating in the 'BB' category. Fitch recognizes the financial flexibility embedded in the debt structure's early redemption schedule with some deferability, as well as the protections to bondholders through the legal structure, including distribution lock-ups and protections against additional leverage. Going forward, Fitch will closely monitor the impact of competing alternatives on TRIP II's traffic performance, including the expected opening of the Silver Line and the local route improvements implemented in recent years, as well as the rate-setting process through the SCC. SECURITY Asset Description TRIP II is the special purpose company that owns the Dulles Greenway. The Dulles Greenway is a six-lane, 14-mile, limited access toll highway in Loudoun County, Virginia, connecting Dulles International Airport with US-15 in Leesburg. It serves as an extension of the state-owned Dulles Toll Road, which connects Dulles Airport and other high-density employment centers in the corridor to the rest of the Washington, D.C. metropolitan area. The two toll roads connect near the entrance of Dulles Airport. Security The senior bondholders have a priority lien on the security interest within the Trust Estate, which includes all the rights to net revenue, real estate interest, rights under the easements and rights, title, and interest in the equipment. 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. TOPGOLF INTERNATIONAL: Moody's Reviews Caa1 CFR for Upgrade ----------------------------------------------------------- Moody's Investors Service placed Topgolf International, Inc.'s ratings on review for upgrade, including the Caa1 Corporate Family Rating, Caa2-PD Probability of Default Rating, and Caa1 first lien credit facility ratings (including a senior secured revolver and term loan). On October 27, 2020, Callaway Golf Company (Callaway) announced that the company has entered into an agreement to increase their equity ownership in Topgolf to 100% subject to shareholder approval.[1] If the acquisition is approved, Topgolf will become an unrestricted subsidiary of Callaway. Topgolf's existing debt is expected to remain outstanding and not be guaranteed by Callaway. The review for upgrade will focus on the benefits from being 100% owned by Callaway including the implicit support provided by the acquisition, Topgolf's liquidity position, leverage level, and business plan going forward. The rating outlook was changed from stable to ratings under review for an upgrade. On Review for Upgrade: Issuer: Topgolf International, Inc. Corporate Family Rating, Placed on Review for Upgrade, currently Caa1 Probability of Default Rating, Placed on Review for Upgrade, currently Caa2-PD Senior Secured Bank Credit Facility, Placed on Review for Upgrade, currently Caa1 (LGD3) Outlook Actions: Issuer: Topgolf International, Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The review for upgrade reflects the potential for improved liquidity and growth prospects following Callaway's ownership of 100% of the company as well as the conversion of outstanding preferred equity into common stock of Callaway. The pandemic has had a substantial impact on Topgolf and led to negative LTM EBITDA levels and very high leverage levels, but Moody's expects results to improve in 2021 and 2022. The large number of pro forma add backs to EBITDA for one-time startup costs and run rate operating performance of new locations is also a negative. Topgolf has expanded the number of locations over the past several years which increases the company's scale and geographic diversity. The venues are high quality and typically significant in size which provides a unique experience to its guests and materially differentiates it from basic driving ranges and golf courses. While revenue generated from Topgolf's venues account for most of its revenue, the company also has several other smaller divisions including Media, Swing Suite, Toptracer, and an international licensing division. Moody's does not anticipate a downgrade of the rating given the review for upgrade and an upgrade is dependent upon the implicit support from Callaway which is expected to provide an improved liquidity position and growth prospects following completion of the transaction. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody's analysis has considered the effect on the performance of consumer entertainment spending from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Topgolf International, Inc. currently owns and operates 61 golfing centers (58 in the US and 3 in the UK) as of September 2020 with 8 additional facilities under construction in the US. There are also 2 international franchise venues located in Australia and Mexico. The company has a Swing Suites offering that provides a simulated golf experience, its Toptracer golf tracking technology for traditional driving ranges, courses and broadcasters as well as its Media division. The company is privately owned by a group of investors that include WestRiver Group, Providence Equity Partners, Dundon Capital Partners, Callaway Golf and Fidelity Research and Management. Reported revenue LTM as of Q2 2020 was over $800 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. TOWER HEALTH, PA: S&P Lowers Long-Term Bond Rating to 'BB+' ----------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'BB+' from 'BBB+' on the taxable and tax-exempt bonds outstanding issued for Tower Health, Pa. The outlook remains negative. Tower Health had $1.3 billion of long-term debt outstanding at June 30, 2020. "The three-notch downgrade reflects the significant deterioration in Tower Health's financial profile in the fiscal year ended June 30, 2020, including a severe loss from operations and negative cash flow resulting in inadequate debt service coverage ratios," said S&P Global Ratings credit analyst Kenneth Gacka. The losses resulted from underlying operating issues that were further exacerbated by the COVID-19 pandemic. S&P Global Ratings' coverage calculation, which accounts for system-level results and assumes maximum annual debt service, shows negative coverage, based on 2020's performance. Tower Health's coverage covenant pursuant to its master trust indenture (MTI) reflects obligated group financials. According to this calculation, coverage is less than the 1x event of default threshold in the MTI, excluding any adjustments related to COVID-19. Tower Health, in consultation with its advisors and outside counsel, indicated in an Oct. 28, 2020, disclosure that an event of default has not occurred, based on its interpretation of the provisions of the indenture, and that it also plans to engage a restructuring consultant in early November. S&P's downgrade fully factors in its view of the multiyear credit deterioration that underlies the results that led to the coverage outcome, regardless of whether it was considered an event of default. "The rating action also reflects our weakening assessment of the enterprise profile," Mr. Gacka added. "In our view, the continued lack of intended results, including financially, from recent-year acquisitions lessens our view of the strength of recent-year growth." The negative outlook reflects our view of Tower Health's much weaker financial position and our expectation that operating losses will persist in fiscal 2021. While S&P understands that management has initiatives underway to improve operations, the rating agency believes the magnitude of the losses creates a difficult path to recovery, particularly given that volumes are not yet at prepandemic levels. Also, S&P believes continued investments to build out Tower Health's nascent, evolving system, along with likely losses at the Chester Montgomery Philadelphia hospitals, will weigh on the financial profile in the near term until certain strategies take hold. TOWER HEALTH: Fitch Cuts LongTerm Rating to BB+ ----------------------------------------------- Fitch Ratings has downgraded its long-term rating two notches on Tower Health System, PA (Tower) to 'BB+' from 'BBB'. In addition, Fitch has downgraded the Issuer Default Rating (IDR) and long-term ratings to 'BB+' from 'BBB' on the following series of bonds: -- $160,065,000 The Berks County Municipal Authority (Reading Hospital & Medical Center Project) series 2012A; -- $590,500,000 The Berks County Industrial Development Authority revenue bonds series 2017; -- $44,660,000 The Berks County Municipal Authority fixed rate revenue bonds series 2020A; -- $64,565,000 The Berks County Municipal Authority fixed rate revenue put bonds series 2020B-1; -- $82,450,000 The Berks County Municipal Authority fixed rate revenue put bonds series 2020B-2; -- $72,920,000 The Berks County Municipal Authority fixed rate revenue put bonds series 2020B-3; -- $190,720,000 Tower Health taxable fixed rate revenue bonds series 2020. The Rating Outlook is revised to Negative from Stable. SECURITY A pledge of gross revenues of the obligated group (OG). The OG consists of Tower Health, Reading Hospital and the five acquired CHS hospitals. The OG does not include St. Christopher's. All Tower debt is fixed rate. ANALYTICAL CONCLUSION The long-term 'BB+' rating and Outlook revision to Negative on Tower Health System's debt reflects the system's significant financial challenge as a result of the coronavirus pandemic, on top of concurrent challenges in integrating the five acute care hospitals Tower acquired from Community Health Systems (CHS) in the fall of 2017, which are collectively referred to in this rating commentary as the CMP hospitals, referring to (Chester/Montgomery/Philadelphia). The two financial strains combined to result in an operating income loss of almost $400 million in fiscal 2020 (unaudited full year results through June 30, 2020). While improvement is expected in 2021, the system still expects an operating loss of approximately $115 million even under their most optimistic scenario. Despite Tower's size, scale, strong regional presence, and prior successful track record, the coronavirus impact, on top of prior operational challenges have placed Tower's operations and balance sheet in a significantly more sensitive position than the prior year, despite balance sheet gains made through the monetization of certain assets. Tower has employed extensive mitigation strategies during the coronavirus surge, and continues to do so with a program known as 'Transformation Excellence (TE)'. Over time, Tower should return to a stable operational position that once again imparts gradual balance sheet improvement, however, the current financial situation can best be described as a turnaround situation. Fitch expects that Tower will remain in this more exposed position for the near term. Tower's recent financial performance (unaudited three-month results through Sept. 30, 2020) is at budgeted levels, which while still showing a loss, is encouraging, however, given the uncertainty of the current operating environment, Fitch does expect that material changes in revenue and cost profiles will continue to occur across the sector as economic and clinical conditions continue to evolve. Fitch's Negative Rating Outlook means that Tower's rating could deteriorate from current levels, given the significant uncertainty regarding Tower's long-term operational performance, and the ability to execute on or moderate from their current strategy. Fitch notes that further rating movement could be more than one notch. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in the sector as a result of the virus outbreak as it relates to severity and duration, and incorporate revised expectations for future performance and assessment of key risk. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Leading Inpatient Market Share; Growing System Tower's revenue defensibility is mid-range, and reflects Tower's leading inpatient market share in its primary service area (PSA) of Reading, Pennsylvania, as well as the counties of Berks, Montgomery, Chester and the northwest portion of the city of Philadelphia. Their demographically strong population in the immediate service area has only moderate levels of Medicaid and self-pay patients. The CMP acquisition did broaden Tower's market position and service offerings, although successful integration remains an operational challenge. Operating Risk: 'bb' Significant Deterioration to Operating Margins Tower's operating risk profile assessment is revised to 'weak' and is based on the system's most recent operating EBITDA margin in fiscal 2020 and what is expected in 2021. While much of the financial disruption in fiscal 2020 can be attributed to the impact of the coronavirus, residual integration and volume challenges continue to hamper the organization. Fitch does expect gradual improvement in operating EBITDA margins over the longer term, not only from Tower's historically strong Reading Hospital business, but also from the further integration of their CMP hospitals, and the development of new service lines, most notably Tower's transplant services. Financial Profile: 'bb' Deteriorating Liquidity Cushion Tower's leverage and liquidity are currently weak for the rating category, and until operational issues are successfully resolved, negative pressure remains. With even break-even operating income levels, limited capital spending and borrowing, could lead to more favorable net adjusted debt-to-adjusted EBITDA ratios, and improve cash-to-adjusted debt. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS No asymmetric risk considerations were considered in this rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A higher rating activity over the outlook period would be limited to only exceptionally positive impacts to Tower's operational and unrestricted liquidity position over the next year; -- A higher rating over the longer term would largely be based on Tower's operating EBITDA margins becoming more commensurate with a 'strong' operating risk assessment of at least 8%; and -- Improved overall unrestricted cash and investment position, which will then compare more favorably to long-term debt and debt-equivalents outstanding of at least 75% cash to adjusted debt. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Tower must follow through with their expectation of improved operating margins after fiscal 2020's results and expected results in fiscal 2021. Failure to maintain operating EBITDA margins of approximately 6%, could result in further pressure on Tower's current rating; -- Balance sheet dilution from either incremental debt or capital spending, such that cash to adjusted debt falls to levels below 35% could also further pressure the rating; and -- Tower's fiscal 2020 showed obvious impairment to operating margins due to the disruption from the coronavirus outbreak, which affected volume derived revenues and elevated costs. Fitch expects a slow economic recovery trajectory with high unemployment levels and the U.S. GDP remaining below the fourth quarter 2019 GDP level through most of 2021. Should economic conditions decline below these expectations or should subsequently wave of infections trigger a further drop-in economic activity, Fitch would expect to see an even weaker economic recovery in 2021, which could pressure Tower's rating. CREDIT PROFILE As of Oct. 1, 2017, Reading Health System was renamed to Tower Health. Concurrent with the rebranding, Tower acquired five acute care hospitals from CHS (Brandywine Hospital in Coatesville, Chestnut Hill Hospital in Philadelphia, Jennersville Regional Hospital in West Grove, Phoenixville Hospital in Phoenixville, and Pottstown Memorial Medical Center in Pottstown - adding 753 beds). Tower currently consists of six acute care hospitals (1,468 licensed beds), Tower Health Medical Group, Tower Health/UPMC Health Plan and a foundation, as well as numerous other non-obligated affiliates. Tower had over $1.96 billion in revenues in fiscal 2020. Four of the five acquired entities are located in Chester and Montgomery Counties, between the Reading Hospital campus and Northwestern Philadelphia. Chestnut Hill Hospital is located in Philadelphia. The acquisition significantly expanded Tower's PSA allowing it to serve a larger population. The transaction increased Tower's revenue base by over 60% and favorably positions the organization for population health and value-based payment arrangements, as well as its joint venture (JV) with UPMC Health Plan. Tower Health and Drexel University announced a joint branch school of medicine campus within a half-mile of the main Reading Hospital campus. Given the relationship with Drexel, Tower has entered into a 50/50 JV with Drexel and has acquired St. Christopher's Hospital for Children, whereby Tower will be responsible for management. Tower has also successfully recruited the entire liver and kidney transplant team from Hahnemann University Hospital, and performed its first transplant surgeries. REVENUE DEFENSIBILITY Combined Medicaid and self-pay volumes accounted for around 18% of fiscal 2020, well below Fitch's threshold of 25%; which is consistent with the prior year, but improved from previous years. It is Fitch's opinion that there is no immediate threat of payor mix deterioration in the service area, and in fact, some slight additional improvement should continue to occur over the near to intermediate term. The expansion of Tower's service area is still generally viewed favorably from a market position strategy, although it does place the organization into a more competitive operating environment associated with Philadelphia and its surrounding areas. Historically, Reading Hospital held around a two-thirds inpatient market share in its immediate PSA; post-acquisition, Tower has a stable 44% market share in its geographically expanded PSA. Fitch believes that the ability to integrate the CMP facilities into an organization that operates as an integrated large-scale healthcare system, will ultimately determine the longer-term financial stability of the organization. Tower's inpatient service area of Reading and surrounding areas are growing and demographically favorable compared with state and national levels. Based on U.S. Census Bureau and U.S. Bureau of Labor Statistics data, population growth trends and median household income levels in Berks, Chester and Montgomery Counties are better than both state and national averages. Similarly, the unemployment rate is below the state and national averages. OPERATING RISK Tower's cost flexibility is now assessed as 'weak', as the system's operating EBITDA margin has been very restricted the last two fiscal years. Tower's operating EBITDA margin averaged -4.6% over fiscal 2019 and fiscal 2020. Weaker operations over the last several years are attributed to multiple factors, including extra expenses related to an Epic installation, the challenged integration after the acquisition of the CMP hospitals and most recently the impact from the coronavirus in regards to lower volumes and additional expenses. Tower, even with stimulus funding, saw margins decreased due to the disruption from the coronavirus pandemic, which resulted in both the temporary loss of elective surgeries and procedures as well as elevating costs primarily in the form of supplies. Tower's financials show a sizeable loss for fiscal 2020, despite significant expense mitigation efforts (including staffing furloughs and even FTE reductions), and stimulus funding of approximately $98.0 million. Looking forward, Tower's operating and operating EBITDA margins are expected to improve, but only gradually, with significant operational losses in fiscal 2021 expected. Fitch expects Tower's operating EBITDA margin to remain, at best, below 3%. Tower has received just under $100 million in federal stimulus grant funding to help offset losses in fiscal 2020. In addition, Tower has transitioned their prior operational improvement initiatives into a broader transformation plan in order to improve operations across the system. Transformation Excellence (TE) has a heightened goal of $230 million (up from the prior $147 million) to be realized through multiple initiatives. Tower's capital spending requirements are necessarily curtailed at this time. The average age of plant is adequate at approximately 12 years, and Tower has spent 150% of annual depreciation over the last four audited years. Fitch expects that the system will spend about $400 million of capital planned between fiscal 2021 and fiscal 2025, or about $80 million per year on average, at what are effectively minimal levels for only absolutely necessary capital (break/fix or coronavirus related) initially, but growing over time as operational performance improves. Tower does not anticipate a year end coverage violation for fiscal 2020, even with a traditional coverage ratio calculation of 0.5x. Per Tower's amended master trust indenture (MTI), Tower is able to exclude extraordinary items, which in the case of the coronavirus, incudes lost revenue due to the cessation of elective surgeries/procedures, resulting in an expectation of maximum annual debt service coverage of around 1.6x. Tower has hired legal counsel and will also hire external consultants to assist Tower's operational efforts and strategic decisions going forward. FINANCIAL PROFILE Tower had just under $1.3 billion of long-term debt outstanding at audited fiscal year-end 2020 (unaudited results through June 30, 2020). At YE 2020, the system had $735 million of unrestricted cash and investments as calculated by Fitch. Despite the operational dislocation suffered due to the coronavirus, Tower's balance sheet saw gains both from the equities market and also realized an increase of approximately $205 million in unrestricted cash from a real estate monetization and sale/leaseback of 23 properties. Fitch does not include the approximately $160 million in advance and accelerated payments for Medicare in Tower's unrestricted cash figures. The end result being that unrestricted cash and investment levels at fiscal year-end in 2020 are largely unchanged over the prior year's levels. Additional debt equivalents include an unfunded pension liability of approximately $148 million. Adjusted debt includes all long-term debt (and long-term lease expenses) and unfunded pension liability up to the 80% funding level. As a result, the system's net adjusted debt position (adjusted debt minus unrestricted cash and investments) in fiscal 2020 is elevated at $853 million, which translates to cash-to-adjusted debt of about 46%. Through Fitch's new baseline scenario, or Fitch's best estimate of the most likely scenario of financial performance over the next five years given the current economic and coronavirus challenges, Fitch expects that Tower will see gradual operational improvement after another challenging year in fiscal 2021, with a best-case scenario budgeting less than a 3% operating EBITDA margin. Fitch's forward-looking analysis reflects an issuer-specific portfolio sensitivity analysis based on Tower's portfolio asset allocation for the current fiscal year, and is consistent with Fitch's current expectations for economic contraction. With so much depending on the progress of the virus, there is a large degree of uncertainty around its scenarios. Fitch expects a slow economic recovery trajectory with high unemployment levels and the U.S. GDP remaining below the fourth quarter 2019 GDP level through most of 2021. Under Fitch's current assumptions, and not using Tower's best-case scenario, Tower's leverage metrics do not recover to current levels in its out years, which is indicative of the currently precarious financial position Tower is in, and is one reason for the current downgrade. Significant operational improvements will be needed to rebuild balance sheet strength over the longer term. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS No asymmetric risk considerations were relevant to the rating determination. In addition to the sources of information identified in Fitch's applicable criteria specified, this action was informed by information from Lumesis. 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 Tower Health (PA): Management Strategy. Tower Health has an Environmental, Social and Governance (ESG) relevance score of '4' to incorporate Tower's strategic deviation from its historic market and more localized strategy that has resulted in significant cash flow deterioration and liquidity degradation. This approach has given rise to multiple years of operating losses and declining liquidity levels. Fitch is of the opinion that Tower Health's board will ultimately find secure financial footing; however, recent operational and financial results have put the organization in a more precarious position than originally anticipated due to the CMP acquisition Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. TRI MECHANICAL: Springer Appointment as Chapter 11 Trustee Okayed ----------------------------------------------------------------- Judge A. Benjamin Goldgar of the U.S. Bankruptcy Court for the Northern District of Illinois approved the appointment of Thomas Springer as chapter 11 trustee for the bankruptcy estate of Tri Mechanical LLC. About Tri Mechanical Tri Mechanical LLC is a full-service contracting company that provides design and build services, equipment, installations, replacement and upgrade of current systems, and retrofitting services. Tri Mechanical sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 20-11762) on May 31, 2020. The petition was signed by Rodd Duff, manager. At the time of the filing, Debtor disclosed total assets of $157,155 and total liabilities of $2,551,893. Judge Jacqueline P. Cox oversees the case. David P. Lloyd, Esq. is Debtor's legal counsel. TTK RE ENTERPRISE: Disla Buying Somers Point Property for $129K --------------------------------------------------------------- TTK RE Enterprises, LLC filed with the U.S. Bankruptcy Court for the District of New Jersey a notice of its proposed sale of the real property located at 107 W. Glendale Avenue, Pleasantville, New Jersey to Merilyn Grisel Disla for $129,000, on the terms of their Contract for Sale. The Property is a three-bedroom and one full bathroom, single family home. The Comparative Market Analysis dated July 6, 2020 set the value of the Property at $129,000. The Court previously approved the Debtor's proposed sale of the property to Mellisa Miranda for $129,000, but said buyer was unable to close on that purchase of the property due to a recent drop in her income. As of the Petition Date, the Debtor was indebted to Fay Servicing, LLC, as servicer for U. S. Bank Trust National Assn., in its capacity as trustee of HOF I Grantor Trust 5 in the original amount of $4,405,944 (Proof of Claim #1-1). The Loan Funder Claim was secured by a commercial mortgage against 28 of the Debtor's real properties, including the Property as of the Petition Date. The Loan Funder mortgage against the Property dated May 14, 2019 was recorded on June 4, 2019 in the Atlantic County Clerk's Office in Instrument #2019027956. The Loan Funder Claim is also secured by the rents from the real properties against which Loan Funder possesses a mortgage(s), including the Property. According to the Title Report, the Property is also subject to the (a) Tax Sale Certificate of FIG Cust FIGNJ19 LLC recorded on Jan. 28, 2020, in Instrument #2020005649 in the approximate amount of $5,671, (b) UCC-1 Financing Statement #2018030086 in favor of VU and Associates, filed on June 8, 2018, and (c) UCC-1 Financing Statement #2019027821 in favor of Loan Funder LLC filed on June 3, 2019. The balance owed to Loan Funder and secured by the Loan Funder Mortgage UCC-1 Financing Statement against the Property is far in excess of the value of the Property. The Property was listed for sale with Century 21 Alliance, 1333 New Road, Suite 1, Northfield, New Jersey and has been actively marketed by Century 21. On March 25, 2020, the Debtor filed an Application for Authority to Retain Century 21 to list a number of Debtor's properties for sale, including the Property. As the result of the efforts of Century 21, the Debtor has entered into a Contract for Sale of the Property with the Buyer for the sum of $129,000, subject to the approval of the Court, which would entitle Century 21 to a commission of 5% of the gross sale price or $6,450. The Debtor believes the $129,000 purchase price for the Property is the highest and best offer which it will receive for the Property and that it is in its best business judgment to proceed with the sale of the Property to the Purchaser, especially because the Purchaser's offer does not include a mortgage contingency. By the Motion, the Debtor asks the Court to approve the sale of the Property free and clear of the Liens, which such Liens to attach to the proceeds of such sale pursuant to the terms of the Contract for Sale, and for the net proceeds of the sale of the Property, after normal costs attendant with closing and any specific items as set forth in the Motion and proposed form of Order, to be paid to Loan Funder on account of the Loan funder Mortgage in exchange for Loan Funder's release of the Loan Funder Mortgage against the Property. Except for all transfer Taxes associated with the sale or as otherwise provided for in the Agreement and all normal, customary cost of closing, all other costs relating to the sale and settlement of the Property, will be the sole obligation of the Purchaser at the time of closing, including all searches and title search fees, all survey fees, all title company settlement charges and title insurance costs, all of the Purchaser's closing expenses (including legal fees), all settlement fees and any other and all other costs associated with the transfer of the Property. All property taxes, all public utility charges, rents and like charges, if any, relating to the Property will be pro-rated as of settlement. The appropriate pro-rated taxes and other charges with net balances owed will be paid by either Party at the time of closing. The Debtor submits that at the time of closing the proceeds of the sale of the Property should be paid as follows: a. Normal costs attendant with closing on the sale of the Property (real estate, taxes, utilities, et.); b. 5% of the Purchase Price ($6450 to Century 21, to be split equally with any participating/cooperating broker in connection with the sale of the Property; c. The Tax Sale Certificate; and d. All remaining proceeds to Loan Funder on account of the Loan Funder Secured Claims (Loan Funder Mortgage against the Property and UCC-1 Financing Statement. Pursuant to the terms of the Listing Agreement, Century 21 is entitled to receive 5% of the Purchase Price ($6,450) as its commission, which would be split with any participating/cooperating broker. The Debtor respectfully asks that the 5% commission be permitted to be paid at the time of closing. Finally, the Debtor asks that the stay of an order granting the Motion under Bankruptcy Rule 6004(h) be waived for cause because the Purchaser intends to close as soon as practical after an Order Approving Sale is entered the Debtor is concerned that the Purchaser will refuse to close if he cannot do so by that date. A hearing on the Motion is set for Nov. 17, 2020 at 11:00 a.m. A copy of the Contract is available at https://tinyurl.com/y3ookah from PacerMonitor.com free of charge. About TTK RE Enterprise TTK RE Enterprise LLC is a privately held company in Somers Point, New Jersey. The Company is the 100% owner of 48 real estate properties in New Jersey having a total current value of $9,265,000. TTK RE Enterprise sought Chapter 11 protection (Bankr. D.N.J. Case No. 19-30460) on Oct. 29, 2019 in Camden, New Jersey. In the petition signed by Emily K. Vu, president, the Debtor disclosed total assets of $9,269,950, and total liabilities of $6,432,457. Judge Jerrold N. Poslusny Jr. oversees the case. FLASTER GREENBERG PC - CHERRY HILL is the Debtor's counsel. UAL CORP: Egan-Jones Lowers Sr. Unsecured Ratings to B- ------------------------------------------------------- Egan-Jones Ratings Company, on October 19, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by UAL Corporation to B- from B. Headquartered in Chicago, Illinois, UAL Corporation is a holding company. The Company, through its subsidiaries, transports persons, property and mail throughout the United States and abroad. UNITED SHORE: Fitch Assigns 'BB-' LT IDR, Outlook Stable -------------------------------------------------------- Fitch Ratings has assigned an expected Long-Term Issuer Default Rating (IDR) of 'BB-' to United Shore Financial Services, LLC (United Wholesale). The Rating Outlook is Stable. Concurrently, Fitch assigned an expected rating of 'B+' to United Wholesale's proposed unsecured debt issuance. Proceeds are expected to be used to for general corporate purposes and to fund a distribution to shareholders. KEY RATING DRIVERS The expected IDR reflects United Shore Financial Services, LLC's (United Wholesale) solid franchise, with leading market share in the wholesale U.S. residential mortgage segment, solid asset quality performance in the servicing portfolio, strong earnings generation, improving capitalization, sufficient earnings coverage of interest expenses, a sufficiently robust and integrated technology platform, and experienced management team with extensive industry background. The expected IDR is also supported by Fitch's expectation for increased funding flexibility following the execution of the planned senior unsecured note issuance. Rating constraints include the challenging economic backdrop, which Fitch believes may pressure asset quality over the medium term, continued reliance on secured, short-term wholesale funding facilities, with relatively limited duration, the breach of financial covenants during the early part of the coronavirus pandemic, and elevated keyperson risk related to the CEO and president, Mat Ishbia, who, together with the Ishbia family, exercise significant control over the company as majority shareholders. Additionally, the company's exclusive focus on the wholesale mortgage channel acts as a rating constraint, as earnings may be more volatile through various interest rate and economic cycles. Fitch believes the highly cyclical nature of the mortgage origination business and the capital intensity and valuation volatility of mortgage servicing rights (MSRs) within the servicing business represent rating constraints for non-bank mortgage companies more broadly, including United Wholesale. However, Fitch expects United Wholesale will experience less MSR volatility compared with peers due to the company's use of "lower of cost or market" valuation accounting on its MSR portfolio. Furthermore, the mortgage business is subject to intense legislative and regulatory scrutiny, which further increases business risk, and the imperfect nature of interest rate hedging can introduce liquidity risks related to margin calls and/or earnings volatility. These industry constraints typically limit ratings assigned to non-bank mortgage companies to below investment-grade levels. Fitch believes United Wholesale's established wholesale mortgage origination platform is well positioned relative to peers, as the scalability of the platform has allowed the company to take advantage of increased mortgage demand, which has resulted in strong earnings in recent years. The company has regularly sold portions of its MSR portfolio to manage its balance sheet and raise liquidity, though additional sales are not expected until after 2021. While MSR sales and United Wholesale's use of "lower of cost or market" accounting has mitigated some of the valuation risk typically associated with MSRs, it has also led to an increased reliance on gain on sale revenue, which can be more volatile. Still, the company emphasizes purchase origination volume over refinancing activity, which can yield more consistent origination volume through different interest rate environments, but remains sensitive to broader macroeconomic factors. As a result, the company's earnings may be less durable relative to peers with broader servicing operations and may underperform peers through various rate and economic cycles. United Wholesale is not subject to material asset quality risks because nearly all originated loans are government or agency eligible and sold to investors shortly after origination. However, the company has exposure to potential losses due to repurchase or indemnification claims from investors under certain warranty provisions. Fitch expects United Wholesale to continue to build reserves for new loan production to account for this risk. The company's historic repurchase and indemnification claims have been minimal and the company has had sufficient reserves to cover these charges, which Fitch expects to continue. The asset-quality performance of United Wholesale's servicing portfolio is solid, as delinquencies have been low relative to peers and the overall market in recent years. Additionally, the amount of United Wholesale's loans in coronavirus-related forbearance programs is below the broader market, which is attributed to the company's focus on higher credit quality and primarily conventional conforming loans. Still, Fitch expects delinquencies to remain above historic averages for some time as forbearance programs cease and the macroeconomic effects of the pandemic continue. The company's 2020 earnings are strong thus far, driven by growing origination volume and an increase in gain on sale margins. Between 2016 and 2019, United Wholesale generated an average pretax return on average assets of 6.7%, which compares favorably with peers. Low interest rates are expected to continue to drive higher origination volume, which should benefit earnings, although this will also yield higher amortization of MSRs. Fitch expects the company's profitability metrics to moderate from current levels, with the normalization of gain on sale margins, incremental valuation hits on MSRs and higher interest expenses associated with the contemplated senior unsecured note issuance. Fitch evaluates United Wholesale 's leverage metrics primarily based on gross debt to tangible equity, which amounted to 2.6x as of Sept. 30, 2020, down materially from 8.5x at Dec. 31, 2019 due to increased net income and growth in retained earnings. Pro forma for the contemplated senior unsecured note issuance and the planned distribution to shareholders, Fitch expects United Wholesale's leverage will increase to 3.5x. This falls within Fitch's 'bbb' category capitalization and leverage benchmark range of 3.0x-5.0x for balance sheet heavy finance and leasing companies with an 'a' category operating environment score. Fitch expects leverage to be maintained around 4.0x over the Outlook horizon, as occasional shareholder distributions would be sufficiently offset by the retention of strong earnings. Corporate tangible leverage, which excludes the balances under warehouse facilities from gross debt, was below the net debt incurrence covenant of 2.0x expected to be set forth under United Wholesale's new senior unsecured notes. Fitch believes the cushion on this covenant provides sufficient operating flexibility. Consistent with other mortgage companies, United Wholesale remains reliant on the wholesale debt market to fund operations. Secured debt, which was 100% of total debt at June 30, 2020, is comprised of warehouse facilities and secured bank lines of credit. Although United Wholesale's warehouse lenders are diverse, comprised of 12 global and regional banks, just 2.7% of United Wholesale's facilities were committed at June 30, 2020, which is well below peers and finance and leasing companies more broadly. Fitch views the company's plans to convert 35%-40% of total warehouse capacity to committed facilities in the coming months favorably. United Wholesale's funding tenor is also short duration and 93.1% of facilities mature within one year, well above that of other non-bank financial institutions, which exposes United Wholesale to increased liquidity and refinancing risk. Fitch would view an extension of the firm's funding duration favorably. Should United Wholesale execute on the unsecured issuance of $800 million, Fitch estimates that the percentage of unsecured debt to total debt would increase to 13.3%, as of Sept. 30, 2020, which is at the lower end of Fitch's 'bb' category funding, liquidity and coverage benchmark range of 10% to 40% for balance sheet heavy finance and leasing companies with an 'a' category operating environment score. Fitch would view further increases in the unsecured funding component favorably as it would increase unencumbered assets and enhance the firm's funding flexibility, particularly in times of stress. On April 21, 2020, the Federal Housing Finance Agency (FHFA), which is the regulator of Fannie Mae and Freddie Mac (Fannie and Freddie, collectively the GSEs), announced that GSE mortgage servicers will not have to advance principal and interest for more than four months of missed payments for borrowers in forbearance. This timeframe is consistent with the policy before the onset of the coronavirus pandemic, when the GSEs generally purchased loans out of mortgage-backed security pools after being delinquent for four months. Fitch views this development positively as it limits the potential liquidity strain on United Wholesale from the Fannie and Freddie portions of the MSR portfolio, which comprised approximately 73.6% of the MSR portfolio at June 30, 2020. Fitch views United Wholesale's liquidity profile as adequate for the expected ratings given actions already taken to shore up liquidity in response to the coronavirus pandemic, which would be further augmented by the expected unsecured issuance. As of Sept, 30 2020, United Wholesale had approximately $756 million of unrestricted cash, which is expected to increase to $1.3 billion, pro forma for the unsecured issuance. At June 30, 2020, United Wholesale also had available borrowing capacity of $1.8 billion on uncommitted warehouse facilities, $109.8 million on committed warehouse facilities, $40.6 million on its committed Goldman Sachs Bank USA MSR line of credit, and $3.1 billion on other uncommitted secured facilities. The liquidity position would be further enhanced if United Wholesale is able to execute on its plans to increase committed funding to 35%-40% of total warehouse capacity and excess capacity under its MSR secured facility. The Stable Rating Outlook reflects Fitch's expectation that United Wholesale will maintain sufficient liquidity to address potential increases in servicing advances due to consumer mortgage forbearance programs in the event of a second wave of the pandemic. The Outlook also reflects expectations for relatively stable leverage, following the issuance of the unsecured notes, strong and consistent earnings generation, and execution on plans to increase the proportion of committed credit facilities to 35%-40%. Fitch's expected rating on United Wholesale's senior unsecured debt is one notch below the Long-Term IDR, given its subordination to secured debt in the capital structure, a limited pool of unencumbered assets and, therefore, weaker relative recovery prospects in a stressed scenario. RATING SENSITIVITIES Upon execution of an unsecured debt issuance of $800 million, Fitch would expect to convert United Wholesale's expected IDR to a final IDR of 'BB-'. Factors that could, individually or collectively, lead to negative rating action/downgrade include an inability to execute on the unsecured debt issuance, an inability to execute on an increase in the proportion of committed funding, and an inability to maintain sufficient liquidity to effectively manage elevated servicer advance levels stemming from an increase in forbearance by borrowers and the potential for higher delinquencies following the lapse of forbearance programs. Leverage sustained above 5.0x over the Outlook horizon, increased utilization of secured funding that constrains the company's funding flexibility, regulatory scrutiny resulting in United Wholesale incurring substantial fines that negatively impact its franchise or operating performance, or the departure of Ishbia, who has led the growth and direction of the company, could also drive negative rating actions. Factors that could, individually or collectively, lead to positive rating action/upgrade include an improvement in funding flexibility, including a continued extension of funding duration, further increases in the proportion of committed facilities beyond the current plan, and/or an increase in unsecured debt and unencumbered assets. Demonstrated effectiveness of corporate governance policies, the maintenance of consistent operating performance, enhanced liquidity, and leverage maintained at or below 4.5x on a gross debt to tangible equity basis could also contribute to positive rating actions. If the expected rating assigned to the unsecured debt were converted to final rating, it would thereafter be sensitive to changes in the Long-Term IDR and would be expected to move in tandem. However, a material increases in unencumbered assets and/or an increase in the proportion of unsecured funding could result in a narrowing of the notching between United Wholesale 's Long-Term IDR and the unsecured notes. ESG CONSIDERATIONS United Wholesale has an ESG Relevance Score of '4' for Governance Structure due to elevated key person risk related to its president and chief executive officer, Ishbia, who has led the growth and strategic direction of the company. An ESG Relevance Score of '4' means Governance Structure is relevant to United Wholesale's rating but not a key rating driver. However, it does have an impact on the rating in combination with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3' - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. 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. UNITED SHORE: Moody's Assigns 'Ba3' CFR, Outlook Stable ------------------------------------------------------- Moody's Investors Service, has assigned a first-time Ba3 corporate family rating to United Shore Financial Services, LLC (United Shore) and a Ba3 long-term unsecured debt rating to the company's planned $800 million senior unsecured bond offering maturing in 2025. The outlook is stable. Assignments: Issuer: United Shore Financial Services, LLC LT Corporate Family Rating, Assigned Ba3 Senior Unsecured Regular Bond/Debenture, Assigned Ba3 Outlook Actions: Outlook, Assigned Stable RATINGS RATIONALE The ratings reflect United Shore's strong franchise in the United States of America (Government of, Aaa stable) mortgage market as the third-largest overall mortgage originator year-to-date in 2020, and the largest wholesale broker originator for the last several years. The company's profitability is very strong with net income to average assets (ROAA) averaging 5.5% from 2017 to 2019. Exceptionally strong origination volumes and gain-on-sale margins have led the company to report extraordinary levels of profitability, with ROAA soaring to around 15% for the first half of 2020 from around 5.5% from 2017 to 2019. As the company has been growing very rapidly, its capitalization, as measured by tangible common equity to tangible assets (TCE to TMA), has been modest at around 10% over the last several years. However, with the exceptional profitability year-to-date in 2020, TCE to TMA has risen to 15.9% as of 30 June, a credit positive. With interest rates likely to remain low well into 2021, Moody's expects very strong profitability to continue to be driven by very strong origination volumes, particularly refinance volumes, and solid gain-on-sale margins. With the strong projected future profitability, Moody's expects that TCE to TMA will reach 20% by the end of 2020 in line with the historic levels of similarly-rated non-bank mortgage company peers. The company has grown very rapidly over the last several years. The rapid growth is credit negative due to the associated operational risks, which may lead to stress on liquidity, management, controls, and system resources. In addition, Moody's believes that sacrificing profitability or increasing operating risks to continue rapid growth or to defend current market share could further increase credit risks. United Shore's funding structure is developing, in Moody's view. The company has primarily relied on short-term (mostly one-year maturities) repurchase facilities to finance new originations. As the company has historically not retained a high percentage of its mortgage servicing rights (MSR), its additional financing needs have been modest. The company announced on 22 September 2020 it had entered into an agreement to merge with Gores Holding IV, a special purpose acquisition company, that values United Wholesale Mortgage at $16 billion. The Ishbia family will continue to own 94% of the company and retain voting control. The transaction is expected to close in Q4. Moody's considers the public listing as a credit positive development because of the additional disclosure and market discipline associated with being a public company. The IPO's benefits will be somewhat offset by the pressure on management from the quarterly earnings and market share growth expectations of public investors. In addition, the Ishbia family, will continue to control the company as the company's principal stockholders. Finally, only three of the seven board members will be required to be independent directors, a credit negative with respect to corporate governance compared to most independent directors. The issuance of the unsecured bond is credit positive because it will materially increase the company's liquidity and allow it to retain a higher percentage of its MSRs on balance sheet. By not fully encumbering the MSRs, company will have greater funding options, particularly during times of stress. Moody's has rated the planned senior unsecured notes maturing in 2025 Ba3, based on United Shore's Ba3 corporate family rating and the application of its Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage. The stable outlook reflects Moody's expectation that United Shore will maintain its strong franchise and strong profitability over the next 12-18 months and that by the end of the year TCE to TMA will increase to and remain around 20%. The stable outlook also incorporates Moody's expectation that by the end of the year, the company will have obtained committed warehouse facilities equal to or greater than 35% of its total warehouse capacity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the very rapid growth of the company over the last several years along with the current market volatility and economic weakness as a result of the coronavirus virus pandemic, a ratings upgrade over the next 12 to 18 months is not likely. However, over time the company's ratings could be upgraded if it is able to maintain 1) strong profitability such as net income to assets in excess of 5.0%, 2) a strong capital position such as its ratio of tangible common equity (TCE) to tangible managed assets (TMA) increasing to and remaining above 20%, 3) modest financial flexibility by maintaining a secured debt to gross tangible assets ratio of less than 50%; and, 4) modest refinance risk on its warehouse facilitates with at least 25% of its warehouse lines being two year or longer facilities. The company's ratings could be downgraded if its financial profile or franchise position weaken. Negative ratings pressure may develop if United Shore's 1) profitability weakens with net income to assets falling below 3.0% for an extended period of time, 2) TCE to TMA ratio remaining below 17.5%, 3) the company increases its use of secured MSR funding facilities beyond current modest levels, 4) percentage of non-GSE and non-government loan origination volumes grow to more than 5.0% of its total originations without a commensurate increase in alternative liquidity sources, and capital to address the risker liquidity and asset quality profile that such an increase would entail, or 5) the committed warehouse facilities remain below 35% of the company's total warehouse capacity. In addition, negative ratings pressure may develop if operational or regulatory risks increase. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. V.S. INVESTMENT: Moffett Buying Seattle Property for $760K ---------------------------------------------------------- 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 463 S College Street, Seattle, Washington to Robert Moffett and/or assigns for $760,000, free and clear of all liens, subject to higher and better offers. The Debtor engaged the services of Shawn Perry with Windemere Real Estate North, Inc. to list the property for sale and on July 2, 2020. The property was listed for sale on July 2, 2020. On Sept. 28, 2020, an offer to purchase the property for $760,000 was received. The offer is $45,000 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 four units are encumbered by liens in the following priority and amounts: (i) BRMK Lending, LLC (4/21/2016) - $3,561,425, (ii) Paul Greben (1/16/2020, amended 1/21/2020) - $598,500, and (iii) Ecocline Exc. & Utilities LLC (1/30/2020) - $137,205. 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 the property. Finally, it asks waiver of the 14-day period under Bankruptcy Rule 6004(h). A telephonic hearing on the Motion is set for Oct. 30, 2020 at 9:30 a.m. The objection deadline is Oct. 23, 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. Shawn Perry at Windemere Real Estate North, Inc., is the real estate agent for the estate. WALDEN PALMS: Sale of 4 Orlando Condo Units for $154K Approved -------------------------------------------------------------- Judge Karen S. Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida authorized Walden Palms Condominium Association, Inc.'s sale of the following four residential condominium units: a. 4772 Walden Circle, Unit 213, Orlando, FL 32811-7242 [PIN 1723298957-02130] to Douglas Rouillard for $38,000; b. 4748 Walden Circle, Unit 815, Orlando, FL 32811-7242 [PIN 1723298957-08150] to Waldar, LLC for $44,256; c. 4740 Walden Circle, Unit 1034, Orlando, FL 32811-7242 [PIN 1723298957-10340] to Waldar, LLC for $40,148; and d. 4724 Walden Circle, Unit 1534, Orlando, FL 32811-7242 [PIN 1723298957-15340] to Waldar, LLC for $31,515. A hearing on the Motion was held on Oct. 19, 2020 at 10:00 a.m. The sale of the Subject Units is free and clear of all Encumbrances. The Lenders, the Tax Lien Holders, and Orange County, Florida, and each of them, will not retain any Encumbrances or any other interest in the Plan Units being conveyed to Buyer pursuant to the terms of the Order. At or prior to closing on the sale of the Plan Units to the Buyer the Seller will pay all real estate taxes owed to Orange County, Florida, that have accrued and became due on Dec. 31, 2019 with respect to each of the Plan Units. In addition, the Seller and the Buyer will prorate the 2020 real estate taxes as of the date of Closing based upon the real estate taxes due for 2019 with respect to each of the Plan Units. The gross proceeds from the sale of the Plan Units will be indefeasibly paid, distributed and/or retained by Debtor, as follows: (i) such amounts needed to fully satisfy the Orange County Tax Collector and/or the holders of tax lien certificates for unpaid real estate taxes for tax years 2017-2019, as identified in Exhibit C; (ii) amounts to be paid for recording costs; (iii) amounts to be paid for document stamp taxes; (iv) the Debtor's closing costs incurred in connection with the sale of the Plan Units; and (v) the remainder of the Purchase Price will be retained by the estate and/or otherwise disbursed to the Debtor. After Closing, the Debtor will either file a copy of the Final Closing Statement Notice with the Court or attach a copy of said Final Closing Statement to the corresponding Monthly Operating Report. Notwithstanding Rules 6004(h), or any other applicable Rule, the Order is effective and enforceable immediately upon entry, no stay applies, and Debtor may complete the sale of the Plan Units forthwith. A copy of the Exhibit A is available at https://tinyurl.com/y6x7sut4 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 estimated 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. WILDBRAIN LTD: Fitch Affirms B+ LongTerm IDR, Outlook Negative -------------------------------------------------------------- Fitch Ratings has affirmed WildBrain, Ltd.'s Long-Term Issuer Default Rating (IDR) at 'B+'. Fitch has also affirmed the 'BB+'/'RR1' ratings on WildBrain's senior secured debt. The Rating Outlook remains Negative. The affirmation reflects Fitch's expectation for WildBrain to resume deleveraging toward Fitch's negative sensitivity as near-term coronavirus-related headwinds subside. Prior to the onset of the pandemic, WildBrain had been focusing on reducing leverage through a combination of debt repayment and EBITDA improvement. Debt had peaked at CAD1.109 billion as of June 30, 2017 following the debt-funded acquisition of an 80% interest in the 'Peanuts' brand (20% continues to be owned by members of the Charles Schulz family who maintain final strategic input) and 100% of the 'Strawberry Shortcake' brand for CAD466 million, or 12x EBITDA. Soon after completing the acquisition, weak operating performance caused by operational headwinds led to a strategic review that resulted in significant structural, operational and senior management actions with a focus on reducing debt. The primary outcome of the strategic review involved the sale of 49% of WildBrain's 80% interest in the 'Peanuts' brand to Sony Music Entertainment (Japan) Inc. (Sony) for CAD236 million, or 14x the company's interest in 'Peanuts', with CAD214 million of net proceeds repaying debt. Fitch notes WildBrain continues to maintain management control over the 'Peanuts' brand. Additional outcomes included eliminating the annual dividend (CAD10 million savings), reducing annual operational costs by approximately CAD11 million, voluntarily delisting from NASDAQ and signing a new marketing agreement in China and Asia. The company also replaced several senior executives including the CEO and CFO and added five independent board members. The new CEO completed a CAD60 million rights offering and sold a building in Toronto, with net proceeds of both used to repay debt, and completed a reorganization that reduced annual operating costs by an additional CAD10 million. The actions discussed above, combined with a reduced reliance on interim production facilities (IPF) and other operating improvements, allowed WildBrain to reduce debt by CAD499 million to CAD610 million at June 30, 2020 from CAD1.109 billion at June 30, 2017, or a 45% reduction. The combination of nominal debt reduction and EBITDA improvement drove a decline in Fitch-calculated Total Debt with Equity Credit/Operating EBITDA to 6.6x at Dec. 31, 2019, from a peak of 9.3x at June 2018, running ahead of Fitch's prior expectations. However, the combination of the coronavirus pandemic and changes in YouTube's advertising algorithm methodology increased leverage to 7.5x at June 30, 2020. Fitch notes this is only slightly ahead of its previous expectations of 7.0x at June 30, 2020. Fitch has adjusted its leverage calculations to account for the treatment of leases as required under IFRS 16. While the accounting change did not directly impact WildBrain's cash flow profile, its increased Fitch-calculated leverage at June 30, 2020 to 9.2x, from 7.5x if it were calculated as it was prior to the lease treatment change. Accordingly, Fitch has revised the sensitivities to be more consistent with Fitch's new treatment of operating leases, placing greater emphasis on cash flow-based metrics. Fitch will revisit the rating over the next 12 months to assess management's deleveraging progress in the context of the existing rating and outlook. KEY RATING DRIVERS Coronavirus Impact: The coronavirus pandemic has had a targeted, but material, impact on WildBrain's operating performance. The pandemic primarily impacted the WildBrain Spark and Consumer Products segments. The pandemic's impact on the overall advertising market, coupled with recent changes to YouTube's Made for Kids advertising policies resulted in a 10% revenue decline in fiscal 2020. WildBrain's consumer products segment declined 4% in 2020, as widespread restrictions on movement and commerce limited consumer discretionary spending. WildBrain had minimal business continuity interruptions as the company successfully transitioned its content production capabilities to a remote work environment. Excluding the impact of IFRS 16 and the 'Peanuts'-related minority interest distributions, fiscal 2020 EBITDA only declined CAD4.5 million, or 6%. Fitch expects WildBrain to return to revenue and EBITDA growth as economic conditions normalize, driven by increasing value for children's programming and expanding viewership via AVOD and SVOD platforms. Significant Debt Repayment: WildBrain has reduced debt from a peak of CAD1.109 billion at June 30, 2017 to CAD610 million at June 30, 2020. Reductions in debt have been primarily financed by non-core asset sale net proceeds and free cash flow. Although leverage as previously defined declined to 7.3x at June 30, 2020 from a peak of 9.3x at June 30, 2018, it remains elevated above Fitch's prior 6.0x negative leverage sensitivity. Although term loan prepayments have eliminated required amortization through maturity, the company has publicly committed to using FCF to continue further debt prepayments. Vertically Integrated Platform: WildBrain develops and creates content for itself and others, delivering between 175 to 225 half hours annually to more than 500 global broadcasters and streaming services. This fresh content expands the world's largest independent children's programming library, with more than 13,000 half hours of children's programming. The company distributes programming globally to linear and digital video outlets, including WildBrain, the largest proprietary network of children's content on YouTube, and four pay-TV Canadian channels. 'WildBrain' grew total watch time by a 112% five-year CAGR through 2018. It also provides licensing and merchandising for intellectual property (IP) it both owns and represents. Strong Defensible Brand Recognition: WildBrain owns some of the industry's most iconic children's programming brands representing unique IP with global exposure that is virtually impossible to recreate. Brands include 'Strawberry Shortcake', 'Caillou', 'Yo Gabba Gabba!', and 'Inspector Gadget'. WildBrain also holds a 41% interest in 'Peanuts', the world's sixth largest character brand. WildBrain's vertically integrated platform provides diversification across a broad product and content offering, expansive geographic reach and deep customer base. Children's Programming Growth: WildBrain is well-positioned to capitalize on continued growth in spending on children's programming by linear and digital platforms. Spending on children's/family programming by U.S. linear cable networks grew at a 7.9% four-year CAGR through 2016, exceeding overall total content growth of 6.3%. Over-the-top (OTT) networks have also made significant children's programming investments as part of their destination branding efforts; the company has relationships with several, including Netflix and Apple TV+. Finally, children are increasingly directly accessing content on the internet with YouTube becoming a centralized destination for online children's viewing. Content Production Costs: Many competitors have deeper funding access as they are part of larger better-capitalized conglomerates. However, while WildBrain has increased content production to refresh and expand its library, the company aims to cover 85% of hard production costs with government tax credits, only available to Canadian content producers, and licensing contract receivables. To account for cash variances, the company uses IPFs to fund shortfalls until the tax credits are collected and the IPF is repaid as required. IPF's are nonrecourse subordinated loans made to special purpose vehicles (SPVs) specifically created for each show's season and are secured by tax credits associated with the season. WildBrain has reduced its overall reliance on IPFs, which has further reduced debt. As of June 30, 2020, the company had CAD66.7 million of IPFs, secured by CAD81.6 million of licensing contract and tax credit receivables, which Fitch includes in its leverage calculations. This compares to the company's historical IPF levels that have ranged from approximately CAD90 million to CAD110 million. Leverage Exceeds Sensitivities: Fitch-defined total leverage, calculated as Total Debt with Equity Credit/Operating EBITDA, at June 30, 2020 was 9.2x, which represents an increase from pro forma leverage of 7.5x as of June 30, 2019. However, Fitch notes the increase is primarily attributable to Fitch's revised treatment of leases under IFRS 16 and that Fitch-calculated leverage excluding the lease change is 7.5x, only slightly ahead of Fitch's previous expectations of 7.0x at June 30, 2020. Regardless, Fitch has revised the rating sensitivities to reflect the impact of the accounting change on Fitch-calculated credit protection metrics, adding additional cash flow-based metrics. DERIVATION SUMMARY WildBrain is weakly positioned against major global peers on most comparatives given its relative lack of scale and elevated leverage. Many of its competitors have deeper access to production funding as part of larger, better capitalized diversified conglomerates. However, the company benefits from its broad collection of iconic global brands, diverse revenue sources and customer base, strong industry position within its business segments and vertically integrated platform. In addition, as a Canadian company, WildBrain uses access to Canadian incentive programs and tax credits to fund a significant portion of their content production costs. Fitch believes the company is well positioned overall to continue exploiting the ongoing positive growth characteristics of the children's programming subsector. No country-ceiling or parent/subsidiary aspects impact the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Fitch assumes flat revenue growth in fiscal year 2021, as a recovery in digital advertising and growth from new distribution deals is offset by continued weakness in broadcasting revenue and consumer products sales. - Beyond fiscal 2021, Fitch assumes mid- to high-single digit revenue growth driven by: 1) high single digit growth in Distribution driven by focus on continued growth at WildBrain Spark; 2) owned IP Consumer Products benefitting from Sony's ownership interest in 'Peanuts'; 3) mid-single digit Production increase driven by strategic focus on premium content production for internal and external use; 4) mid-single digit declines in Broadcasting as overall softness in Cable Networks more than offsets the increased commercial load. - Margin improvement driven by cost cutting efforts and increased economies of scale. - Mid-to-high single digit FCF margins supported by a stable EBITDA margin profile and limited capital investment requirements. Fitch assumes a significant portion of FCF will be used for additional debt repayment, in line with management's strategic review and public comment - No new M&A over the rating horizon. - Fitch assumes debt is refinanced at maturities KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that WildBrain would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. Fitch's recovery analysis estimates a going concern enterprise value for a reorganized firm of approximately CAD504 million. Fitch assumes a mid-single-digit decline in revenues driven by the loss of a major OTT contract and a decline in consumer product sales driven by a recession. Fitch also assumes the company is unable to reduce costs fast enough leading to a 150bp margin decline to 21%. As such, EBITDA after minority interests declines to CAD63million. Fitch assumes WildBrain will receive a going concern multiple of 8x EBITDA and considered several factors. WildBrain owns some of the industry's most iconic children's programing brands representing unique intellectual property with global exposure that is virtually impossible to recreate. Brands include 'Strawberry Shortcake', 'Caillou', 'Yo Gabba Gabba!', and 'Inspector Gadget'. WildBrain also has a 41% interest in 'Peanuts', the world's sixth largest character brand. Fitch notes the company initially purchased an 80% interest in 'Peanuts' at an 11x multiple in 2017 and sold 49% of its interest in 'Peanuts' to Sony for 14x in 2018. Content creators have been acquired at lofty multiples, especially if their IP is difficult to recreate. Children's programming creators are especially valuable as spending on children's/family programming by U.S. linear cable networks grew at a 7.9% four-year CAGR through 2016, exceeding overall total content growth of 6.3%. In addition, OTT networks have made significant investments in children's programming as part of their destination branding efforts. Content acquisition examples include several by The Walt Disney Company: 1) Pixar for USD7.4 billion (23x Fitch-calculated EBITDA) in 2006; 2) Marvel Entertainment, Inc. for USD4 billion (high teens market multiple estimates) in 2009; 3) Lucasfilm Limited for USD4.1 billion (low teens estimates) in 2012 and; 4) certain Twenty-First Century Fox assets, primarily content creation, for USD85 billion (low teens estimates) in 2018. Comcast acquired DreamWorks Animation SKG, Inc. for USD4.1 billion (mid-twenties estimates) in 2016 (the NBCUniversal acquisition is excluded as it included broadcast and cable channels and the NBC network along with Universal Studios' content creation arm). Finally, Fitch includes the two recent 'Peanuts' brand acquisitions: WildBrain's initial acquisition of an 80% interest for USD345 million (12x) in 2017 and Sony's acquisition of 49% of WildBrain's 80% ownership for USD185 million (14x) in 2018. The 8x multiple also incorporates the fact that children are increasingly directly accessing content on the internet with YouTube becoming a centralized destination for online children's programming viewing. To that end, 'WildBrain', the company's digital network and studio, is one of YouTube's largest children's programming networks and grew total watch time by a 112% five-year CAGR through 2018. Fitch assumes a fully drawn revolving credit facility (CAD40 million) in its recovery analysis since credit revolvers are tapped as companies are under distress. As of June 30, 2020, the company had $10 million outstanding borrowings under its revolving facility, CAD377 million in secured term loan debt, CAD140 million of unsecured debentures and CAD16.6 million of exchangeable debentures. Fitch excludes WildBrain's IPFs (CAD67 million) from the recovery analysis as they are secured by assets directly related to specific programming content. IPFs are nonrecourse subordinated loans made to SPVs specifically created for each show's season that are used to fund content creation cash shortfalls until associated tax credits are collected and the IPF is repaid as required. Each IPF is secured by assets associated with that particular season including Canadian federal and provincial tax credits and licensing contract receivables covering approximately 85% of WildBrain's content creation cash outlays, along with any restricted cash held in the SPV. The recovery analysis results in a 'BB+' and 'RR1' issue and recovery rating for the company's secured credit facilities, implying expectations for 100% recovery. Fitch does not rate the IPFs or the unsecured debentures. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- (Cash Flow from Operations-Capex)/Total Debt sustained near or above 7.5%; -- The Negative Outlook could be stabilized if the company demonstrates significant progress in moving Fitch-calculated total leverage (Total Debt with Equity Credit/Operating EBITDA) towards 6.0x; -- Favorable sector tailwinds leading to strong revenue growth and EBITDA and FCF expansion as the Company benefits from economies of scale. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- (Cash Flow from Operations-Capex)/Total Debt below 5%; -- Fitch-calculated total leverage not moving towards 6.0x over the next 12 months; -- Sustained weakness of the operating profile, particularly within the WildBrain Spark segment, evidence by continued revenue declines and limited margin expansion. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of June 30, 2020, the company had CAD48 million of cash and CAD30 million of capacity under its CAD41 million (USD30 million) revolver. Since acquiring Peanuts in 2017, the company has prepaid CAD500 million of debt, reducing interest payments and eliminating required term loan amortization through maturity. The lower interest payments, coupled with low capex requirements of less than 2.0% of revenues and the elimination of the dividend, generates improved FCF conversion metrics. Fitch believes the company will generate enough cash over the ratings case to cover internal operating and investment needs and repay additional debt. 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. WYNTHROP PARTNERS: Sets Bidding Procedures for Real Estate ---------------------------------------------------------- Wynthrop Partners, LP, asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania to authorize the bidding procedures in connection with the sale of real estate located in Windsor Borough, York County, Pennsylvania to NVR, Inc., also known as Ryan Homes, for $2.5 million, subject to overbid. The Assets of the Debtor are comprised of the following: A. Real Estate: The Debtor owns three contiguous undeveloped agricultural land tracts located in Windsor Borough, York County, Pennsylvania. The three tracts are generally described in the tax mapping data generally described in Exhibit A and are described as follows: a. Tract #1. Approximately 54.28 acres located on Schoolhouse Lane, Windsor, York County, Pennsylvania (Parcel No. 89000030001A000000). Deed recorded in deed book 1953-1880. b. Tract #2. Approximately .44 acres is identified as Parcel No. 890000301020000000. The deed is recorded at Book 1953, Page 1880. The parcel contains a single family home on Heindel Avenue. c. Tract #3. Approximately .06 acres and is identified as Parcel ID 89000020228A000000) and borders North Avenue. Deed recorded at Book 1953, Page 1880. B. Real Estate Development Rights: The Debtor is the owner of certain development rights associated with the Real Estate, specifically, an unrecorded subdivision plan containing 154 individual residential real estate units generally known as "Walnut Creek." The subdivision plans were prepared by Site Design Concepts Land Development Consultants, 127 West Market Street, Suite 200, York, Pennsylvania 17401. The Walnut Creek Plan was conditionally approved by Windsor Borough in 2016, but was not recorded because of the ongoing dispute with the Rutt Family Sonshine Limited Partnership. C. Equipment: The Debtor owns three pieces of earth moving equipment, as set forth by its schedules, specifically, a SEC 754 Step up backhoe, a SEC step up skid loader and a SEC 754 Step Up wheel loader. The scheduled value of all three pieces of Equipment collectively totals $89,400. Since the filing of the Petition, the Debtor has diligently sought to find a buyer for the Assets. Early in the case, it located potential purchaser, the Noble Group for $1.25 million. On Aug. 28, 2020, the Noble Group notified the Debtor that it was withdrawing its letter of intent and was no longer interested in serving as the stalking horse purchaser. The Debtor made extensive efforts to locate prospective purchasers after the withdrawal of Noble Group's letter of intent. About the same time the Noble Group withdrew its letter of intent, the Debtor received notice from the Rutt Family Limited Partnership that it no longer wished to dispute ownership of the Walnut Creek Plans. As such, it was able to generate significantly more interest in the Real Estate and Real Estate Development Rights. It had by then also made its final determination that it is in the best interest of the Bankruptcy Estate to sell its Real Estate and Real Estate Development Rights to a cash buyer "as is," without the Debtor incurring additional debt or developmental responsibilities who will buy the Real Estate as raw land. Accordingly, the Debtor decided not to pursue the sale of its assets to a real estate developer which would require either the Debtor or its principals to invest further capital in order to bring complete the necessary infrastructure improvements and to sell lots in a fully developed state. As a result of several weeks of marketing efforts by the Debtor, two letters of intent to purchase the Real Estate and Real Estate Development Rights were received for $2.5 million. Each letter of intent provided for payment of the purchase price on slightly different payment terms, with payments being generally tied to final subdivision approval and bonding considerations. After extensive discussion and negotiation with each prospective purchaser having submitted a letter of intent, the Debtor selected NVR, Inc., also known as Ryan Homes, as the stalking horse purchaser based upon its letter of intent dated Oct. 9, 2020. The Debtor counter-signed the letter of intent on Oct. 14, 2020 indicating its intent to move forward with the sale to NVR, subject to approval by the Court of these Bidding Procedures. The Ryan Homes LOI provides for the purchase price of $2.5 million for the Debtor's Real Estate based on having 154 lots as set forth in the approved subdivision. The Purchase Price will be paid in two installments, described as follows: (i) The initial payment of $1.5 million will occur before the expiration of 30 days after the Final Subdivision Plan Approval and "Ready for Bonding," but in no event later than 24 months following the expiration of the Study Period. The second payment of $1 million will occur no later than 90 days following the initial payment. The Ryan LOI further provides that within five business days of contract execution, the Purchaser will post an Initial Deposit of $50,000 in escrow. The Initial Deposit will be released to Seller within five business days after the expiration of the Study Period. Within 12 months after the expiration of the Study Period, the Purchaser will deliver to the Seller an additional deposit of $200,000, which together with the initial deposit will become non-refundable. The Ryan Homes LOI contains a 60 day study period which will run contemporaneously with the time period when the Debtor will receive competing bids. The competing letter of intent received by the Debtor is from homebuilder J.A. Myers Homes, which offered the purchase price of $2,504,810 based upon a purchase price of $16,265 per lot. While the LOI offers a slightly higher price, it does so based upon the number of lots being conveyed being 154, and the Debtor's understanding that the prospective purchaser did not intend to use the existing Walnut Creek Plans, which would have resulted in a longer time frame for payment. The Bidding Procedures are designed to maximize value for the Debtor's estate while ensuring an orderly and efficient sale process. The salient terms of the Bidding Procedures are: a. Bid Deadline: Jan. 5, 2021 at 12:00 p.m. (EST) b. Initial Bid: Equal to or greater than the sum of: (i) the purchase price set forth in the stalking horse Purchase Agreement; (ii) the Break-Up Fee; and (iii) $10,000 c. Deposit: $50,000 made out to CGA Law Firm PC d. Auction: The Auction will take place on Jan. 7, 2021 at 1:00 p.m. (EST) at the office of the Debtor's counsel, CGA Law Firm, 135. N. George St., York, Pennsylvania 17401, or such other place and time as the Debtor will notify all Qualified Bidders. e. Bid Increments: $10,000 f. Sale Hearing: Jan. 26, 2021 at 9:30 a.m. (EST) g. Sale Objection Deadline: Jan. 19, 2021 at 5:00 p.m. (EST) h. Break-Up Fee: $25,000 The sale will be free and clear of all liens, claims, interests, and encumbrances. Within five days after the entry of the Bidding Procedures Order or as soon as reasonably practicable thereafter, the Debtor will serve the Sale Notice, the Bidding Procedures Order, and the Bidding Procedures upon the Notice Parties. The Debtor believes in its business judgment that an absolute sale of the Assets to NVR or the party deemed to be the Successful Bidder is in the best interest of the Estate and creditors. A copy of the Bidding Procedures is available at https://tinyurl.com/yxgx392a from PacerMonitor.com free of charge. About Wynthrop Partners LP Wynthrop Partners, LP, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It owns three real estate properties located in Windsor Borough, Pennsylvania, having a total current value of $2.25 million. Wynthrop Partners sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 19-00197) on Jan. 17, 2019. At the time of the filing, the Debtor disclosed $2,345,811 in assets and $640,696 in liabilities. The case is assigned to Judge Henry W. Van Eck. The Debtor tapped CGA Law Firm as its legal counsel. YAMANA GOLD: S&P Alters Outlook to Positive, Affirms 'BB+' ICR -------------------------------------------------------------- S&P Global Ratings revised its outlook on Toronto-based Yamana Gold Inc. to positive from stable, and affirmed its 'BB+' long-term issuer credit and issue-level ratings on the company. The positive outlook reflects the increased potential for an upgrade based primarily on the prospective strength in Yamana's credit measures, and increased financial flexibility to manage future gold price downturns. S&P said, "Cash flow and leverage are trending stronger than our previous expectations for the next several years. Yamana is on track to generate credit measures much stronger than our previous estimates over the next few years. We estimate the company's adjusted debt-to-EBITDA ratio at about 1x this year, and below this level in 2021 and 2022. Over this period, we assume the company's earnings and cash flow generation will remain above historical levels, even when considering past asset sales. In addition, we believe a corresponding increase in free cash flow will contribute to sustainably lower adjusted debt." "We assume deleveraging will be facilitated primarily by higher estimated cash levels. The increase in cash is underpinned principally by strong gold prices and will likely remain cyclical. However, we expect the company will repay gross debt, namely its unsecured notes due 2022. In our view, a reduction in Yamana's debt quantum will temper the volatility of the company's credit measures and profitability associated with gold margin fluctuations." In addition, sustainably lower debt should position Yamana to maintain its net leverage target of below 1x (before S&P Global Ratings adjustments) at much lower points in the gold price cycle." Yamana is poised to generate significant free cash flow, in contrast to past deficits mainly related to development spending. S&P said, "We assume the company will generate free cash flow well above historical levels over the next few years. We believe Yamana could generate free cash flow in the US$500 million area in 2021 based on our average gold price assumption of US$1,700 per ounce (/oz). In our view, cash flow generation of this magnitude provides significant financial flexibility, notably when compared with the company's reported net debt position that is approaching US$600 million." "If prices do not decline as we expect and instead remain near the current US$1,900/oz area in 2021, we believe the company could generate free cash flow of about US$700 million (all else being equal). By comparison, Yamana has generated a cumulative free cash flow deficit of a little more than US$100 million in the past six years to 2019, notably because of heightened growth-related capital expenditures (capex) and comparatively low gold prices. Conversely, in the unlikely event that gold prices drop precipitously and average US$1,300/oz in 2021, we estimate Yamana could still generate more than US$100 million in positive free cash flow. Therefore, our forecasts mark a step-change in the company's capacity for free cash flow beyond what we have contemplated (and witnessed) in the past." "Our estimates are subject to several uncertainties, but we expect Yamana will remain focused on its balance-sheet strength. Yamana's free cash flow generation and net debt are sensitive to several factors beyond gold margins. In particular, higher-than-expected capital outlays related to future development projects are possible, and would likely reduce our free cash flow expectations. Project-related investments (the most recent being Yamana's Cerro Moro mine construction) amid a lengthy period of subdued gold prices (just over US$1,200/oz) contributed to the company's free cash flow deficits and weak returns on capital in the past. Yamana's most likely growth prospects include the phase 2 expansion of the company's Jacobina mine and underground development of its Canadian Malartic mine (a 50% joint venture with Agnico Eagle Mines Ltd.; not rated). The latter would represent a significant capital-intensive multiyear project. Moreover, Yamana recently implemented a large increase in its annual dividend (to about US$100 million annually), and it is uncertain if incremental payouts will follow." "Nevertheless, we assume Yamana will generate cumulative free cash flow of more than US$900 million from 2021-2023, which is close to its total amount of reported debt. Our estimates are also based on a steadily declining average gold price assumption over the next few years, to US$1,300/oz in 2023. Furthermore, we estimate the company's year-end 2020 cash on hand at close to US$500 million. With respect to Yamana's credit measures, there is significant downside buffer. For example, all else being equal, we estimate that gold prices would have to decline and average about US$1,350/oz in 2021 for Yamana's adjusted debt-to-EBITDA to increase to 1.5x, our upside rating threshold." Clearly, there is considerable flexibility for the company to maintain credit measures commensurate with a higher rating, and this is exclusive of possible divestitures." A multiyear track record of production and cost stability is likely required for an upgrade. S&P said, "We expect to be patient with a potential rating upside to investment-grade. Gold prices are volatile and we can't rule out a steeper or sooner-than-expected (and protracted) decline, especially if this follows heightened spending beyond what we currently contemplate. While Yamana's forecast credit measures are consistent with a stronger financial risk assessment, they incorporate the impact of near-peak gold prices. In addition, the company has not yet established a track record of sustainable free cash flow. Therefore, we account for these factors in our assessment, which is unchanged." "We believe an investment grade-rated gold mining company should be able to withstand material price fluctuations over a long time horizon without sustained weakness in its credit measures. In our view, this typically requires a conservative financial risk profile highlighted by low debt and associated interest costs, but also a favorable view of asset quality. In our opinion, Yamana has a portfolio of generally lower-cost mines mostly in mining-friendly jurisdictions (with its largest in Canada), with a history of margin outperformance relative to many of its closest comparable companies. However, its operating breadth is less than that of similarly rated gold-producing companies, mainly due to Yamana's limited number of mines (five) that are mostly smaller-scale gold producers. In our view, more diversified peers are generally less exposed to unexpected operating disruptions." "A track record of relatively stable unit costs is likely required for us to contemplate an upgrade. In doing so, this could indicate a lower risk of operating setbacks, resulting in greater capacity to manage future gold price weakness and improve historically low returns on capital. In addition, maintaining steady output and reserves requires ongoing or heightened investment given the depletion that accompanies production. Lower output, which can notably result from unexpected operating disruptions or lower grades, adds pressure to unit costs due to the high fixed-cost nature of mining." "The positive outlook reflects the at least one-in-three chance we could upgrade Yamana over the next two years. We expect the company will generate an adjusted debt-to-EBITDA ratio of about 1x in 2020 and lower in the next two years. Over this period, we expect its adjusted debt position to improve, underpinned by strong average gold prices and relative stability of production and unit costs. Nevertheless, we believe credit measures are vulnerable to gold price volatility, higher-than-expected unit costs, and future discretionary spending." "We could raise the rating on Yamana to investment-grade if, over the next 24 months, we expect the company will generate an adjusted debt-to-EBITDA ratio of about 1.5x and a free operating cash flow-to-debt ratio above 15% on a sustained basis. The company is tracking well within these thresholds. However, an upgrade is also contingent on our view of Yamana maintaining relatively stable long-term production, with sustainable free cash flow and low debt that help reduce the volatility of its credit measures at trough gold prices." "We could revise the outlook to stable if, over the next 12-24 months, we expect Yamana's adjusted debt-to-EBITDA ratio to move back toward 2x or its free operating cash flow-to-debt ratio to drop below 15%. In our view, this could follow operating setbacks that weaken our view of the company's asset profile and expected gold margins. In addition, higher-than-expected shareholder returns and/or acquisitions could weaken our view of Yamana's financial capacity to manage periods of market weakness and future growth spending." [^] Large Companies with Insolvent Balance Sheet ------------------------------------------------ Total Share- Total Total Holders' Working Assets Capital Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABST CN 130.2 (43.1) (16.9) ABSOLUTE SOFTWRE OU1 GR 130.2 (43.1) (16.9) ABSOLUTE SOFTWRE ABST US 130.2 (43.1) (16.9) ABSOLUTE SOFTWRE ABT2EUR EU 130.2 (43.1) (16.9) ACCELERATE DIAGN 1A8 GR 114.8 (37.0) 92.4 ACCELERATE DIAGN AXDX US 114.8 (37.0) 92.4 ACCELERATE DIAGN AXDX* MM 114.8 (37.0) 92.4 ACUTUS MEDICAL AFIB US 72.0 (3.4) 15.1 ADAPTHEALTH CORP AHCO US 739.3 (6.8) 6.5 AGENUS INC AJ81 GR 185.8 (199.0) (37.5) AGENUS INC AGEN US 185.8 (199.0) (37.5) AGENUS INC AJ81 TH 185.8 (199.0) (37.5) AGENUS INC AGENEUR EU 185.8 (199.0) (37.5) AGENUS INC AJ81 QT 185.8 (199.0) (37.5) AGENUS INC AJ81 GZ 185.8 (199.0) (37.5) AMC ENTERTAINMEN AMC* MM 11,271.6 (1,575.4) (1,031.5) AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERICAN AIR-BDR AALL34 BZ 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE AAL11EUR EU 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE AAL AV 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE AAL TE 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE A1G SW 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE A1G GZ 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE A1G QT 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE AAL US 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE AAL* MM 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE A1G GR 62,773.0 (5,528.0) (4,244.0) AMERICAN AIRLINE A1G TH 62,773.0 (5,528.0) (4,244.0) APACHE CORP APA GR 12,999.0 (44.0) (52.0) APACHE CORP APA US 12,999.0 (44.0) (52.0) APACHE CORP APA* MM 12,999.0 (44.0) (52.0) APACHE CORP APA TH 12,999.0 (44.0) (52.0) APACHE CORP APA GZ 12,999.0 (44.0) (52.0) APACHE CORP APA1 SW 12,999.0 (44.0) (52.0) APACHE CORP APAEUR EU 12,999.0 (44.0) (52.0) APACHE CORP APA QT 12,999.0 (44.0) (52.0) APACHE CORP- BDR A1PA34 BZ 12,999.0 (44.0) (52.0) AQUESTIVE THERAP AQST US 63.5 (21.4) 29.0 ARYA SCIENCES AC ARYBU US - - - ASCENDANT DIG -A ACND US 0.4 (0.0) (0.4) ASCENDANT DIGITA ACND/U US 0.4 (0.0) (0.4) AUDIOEYE INC AEYE US 10.0 (0.5) (1.9) AURANIA RESOURCE ARU CN 4.4 (0.5) (0.6) AUTOZONE INC AZO US 14,423.9 (878.0) 528.8 AUTOZONE INC AZ5 GR 14,423.9 (878.0) 528.8 AUTOZONE INC AZ5 TH 14,423.9 (878.0) 528.8 AUTOZONE INC AZ5 GZ 14,423.9 (878.0) 528.8 AUTOZONE INC AZO AV 14,423.9 (878.0) 528.8 AUTOZONE INC AZ5 TE 14,423.9 (878.0) 528.8 AUTOZONE INC AZO* MM 14,423.9 (878.0) 528.8 AUTOZONE INC AZOEUR EU 14,423.9 (878.0) 528.8 AUTOZONE INC AZ5 QT 14,423.9 (878.0) 528.8 AUTOZONE INC-BDR AZOI34 BZ 14,423.9 (878.0) 528.8 AVID TECHNOLOGY AVID US 261.4 (144.2) 11.7 AVID TECHNOLOGY AVD GR 261.4 (144.2) 11.7 AVIS BUD-CEDEAR CAR AR 19,596.0 (76.0) 469.0 AVIS BUDGET GROU CUCA GR 19,596.0 (76.0) 469.0 AVIS BUDGET GROU CAR US 19,596.0 (76.0) 469.0 AVIS BUDGET GROU CUCA TH 19,596.0 (76.0) 469.0 AVIS BUDGET GROU CAR* MM 19,596.0 (76.0) 469.0 AVIS BUDGET GROU CUCA QT 19,596.0 (76.0) 469.0 AVIS BUDGET GROU CAR2EUR EU 19,596.0 (76.0) 469.0 B RILEY PRINCIPA BMRG/U US 177.5 177.4 0.7 B. 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FRONTDOOR IN FTDR US 1,361.0 (125.0) 161.0 FRONTDOOR IN 3I5 GR 1,361.0 (125.0) 161.0 FRONTDOOR IN FTDREUR EU 1,361.0 (125.0) 161.0 GODADDY INC-A 38D TH 6,092.1 (254.5) (1,667.8) GODADDY INC-A GDDY* MM 6,092.1 (254.5) (1,667.8) GODADDY INC-A 38D GR 6,092.1 (254.5) (1,667.8) GODADDY INC-A 38D QT 6,092.1 (254.5) (1,667.8) GODADDY INC-A GDDY US 6,092.1 (254.5) (1,667.8) GOGO INC GOGO US 1,064.8 (569.0) 98.9 GOGO INC GOGOEUR EU 1,064.8 (569.0) 98.9 GOGO INC G0G GR 1,064.8 (569.0) 98.9 GOGO INC G0G QT 1,064.8 (569.0) 98.9 GOGO INC G0G SW 1,064.8 (569.0) 98.9 GOGO INC G0G TH 1,064.8 (569.0) 98.9 GOGO INC G0G GZ 1,064.8 (569.0) 98.9 GOLDEN STAR RES GS51 GR 381.3 (21.9) (31.0) GOLDEN STAR RES GS51 TH 381.3 (21.9) (31.0) GOLDEN STAR RES GSC CN 381.3 (21.9) (31.0) GOLDEN STAR RES GSS US 381.3 (21.9) (31.0) GOLDEN STAR RES GS51 QT 381.3 (21.9) (31.0) GOLDEN STAR RES GSC1EUR EU 381.3 (21.9) (31.0) GOLDEN STAR RES GS51 GZ 381.3 (21.9) (31.0) GOODRX HOLDIN-A GDRX US 502.4 (289.7) 140.4 GOOSEHEAD INSU-A GSHD US 120.0 (49.4) 25.2 GOOSEHEAD INSU-A 2OX GR 120.0 (49.4) 25.2 GOOSEHEAD INSU-A GSHDEUR EU 120.0 (49.4) 25.2 GORES HOLDINGS I GHIVU US 426.9 411.8 0.6 GORES HOLDINGS-A GHIV US 426.9 411.8 0.6 GRAFTECH INTERNA EAF US 1,533.4 (574.7) 482.8 GRAFTECH INTERNA G6G GR 1,533.4 (574.7) 482.8 GRAFTECH INTERNA EAFEUR EU 1,533.4 (574.7) 482.8 GRAFTECH INTERNA G6G TH 1,533.4 (574.7) 482.8 GRAFTECH INTERNA G6G QT 1,533.4 (574.7) 482.8 GRAFTECH INTERNA G6G GZ 1,533.4 (574.7) 482.8 GREEN PLAINS PAR GPP US 105.3 (69.2) (36.9) GREENPOWER MOTOR GPV CN 19.7 (3.3) (1.0) GREENPOWER MOTOR GP US 19.7 (3.3) (1.0) GREENSKY INC-A GSKY US 1,326.8 (196.9) 645.3 GS ACQ HDS CO II GSAH/U US 1.0 (0.0) (0.0) GS ACQUISITION-A GSAH US 1.0 (0.0) (0.0) GS ACQUISITION-A 55I GR 1.0 (0.0) (0.0) GS ACQUISITION-A GSAHEUR EU 1.0 (0.0) (0.0) HARMONY BIOSCIE HRMY US 163.1 (49.7) 74.0 HERBALIFE NUTRIT HOO GR 3,567.4 (264.8) 1,304.9 HERBALIFE NUTRIT HLF US 3,567.4 (264.8) 1,304.9 HERBALIFE NUTRIT HOO TH 3,567.4 (264.8) 1,304.9 HERBALIFE NUTRIT HOO GZ 3,567.4 (264.8) 1,304.9 HERBALIFE NUTRIT HLFEUR EU 3,567.4 (264.8) 1,304.9 HERBALIFE NUTRIT HOO QT 3,567.4 (264.8) 1,304.9 HEWLETT-CEDEAR HPQ AR 34,244.0 (1,986.0) (4,757.0) HEWLETT-CEDEAR HPQC AR 34,244.0 (1,986.0) (4,757.0) HEWLETT-CEDEAR HPQD AR 34,244.0 (1,986.0) (4,757.0) HILTON WORLDWIDE HLT* MM 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HLTW AV 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HI91 TE 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HLT US 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HLTEUR EU 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HI91 QT 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HI91 GR 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HI91 TH 17,126.0 (1,291.0) 2,271.0 HILTON WORLDWIDE HI91 GZ 17,126.0 (1,291.0) 2,271.0 HOME DEPOT - BDR HOME34 BZ 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HD TE 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HDI TH 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HDI GR 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HD US 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HD* MM 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HD AV 63,349.0 (414.0) 7,162.0 HOME DEPOT INC 0R1G LN 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HD CI 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HDUSD SW 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HDI GZ 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HD SW 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HDEUR EU 63,349.0 (414.0) 7,162.0 HOME DEPOT INC HDI QT 63,349.0 (414.0) 7,162.0 HOME DEPOT-CED HDD AR 63,349.0 (414.0) 7,162.0 HOME DEPOT-CED HDC AR 63,349.0 (414.0) 7,162.0 HOME DEPOT-CED HD AR 63,349.0 (414.0) 7,162.0 HOVNANIAN ENT-A HOV US 1,805.7 (479.5) 773.7 HOVNANIAN ENT-A HO3A GR 1,805.7 (479.5) 773.7 HOVNANIAN ENT-A HOVEUR EU 1,805.7 (479.5) 773.7 HP COMPANY-BDR HPQB34 BZ 34,244.0 (1,986.0) (4,757.0) HP INC HPQ* MM 34,244.0 (1,986.0) (4,757.0) HP INC HPQ TE 34,244.0 (1,986.0) (4,757.0) HP INC 7HP TH 34,244.0 (1,986.0) (4,757.0) HP INC 7HP GR 34,244.0 (1,986.0) (4,757.0) HP INC HPQ US 34,244.0 (1,986.0) (4,757.0) HP INC HPQ AV 34,244.0 (1,986.0) (4,757.0) HP INC HPQ CI 34,244.0 (1,986.0) (4,757.0) HP INC HPQUSD SW 34,244.0 (1,986.0) (4,757.0) HP INC HPQEUR EU 34,244.0 (1,986.0) (4,757.0) HP INC 7HP GZ 34,244.0 (1,986.0) (4,757.0) HP INC HPQ SW 34,244.0 (1,986.0) (4,757.0) HP INC 7HP QT 34,244.0 (1,986.0) (4,757.0) IAA INC IAA US 2,273.5 (67.4) 292.9 IAA INC 3NI GR 2,273.5 (67.4) 292.9 IAA INC IAA-WEUR EU 2,273.5 (67.4) 292.9 IMMUNOGEN INC IMU GR 269.7 (24.5) 150.5 IMMUNOGEN INC IMGN US 269.7 (24.5) 150.5 IMMUNOGEN INC IMU TH 269.7 (24.5) 150.5 IMMUNOGEN INC IMGNEUR EU 269.7 (24.5) 150.5 IMMUNOGEN INC IMGN* MM 269.7 (24.5) 150.5 IMMUNOGEN INC IMU GZ 269.7 (24.5) 150.5 IMMUNOGEN INC IMU QT 269.7 (24.5) 150.5 INFRASTRUCTURE A IEA US 783.9 (83.8) 71.7 INHIBRX INC INBX US 21.3 (67.0) (21.0) INHIBRX INC 1RK GR 21.3 (67.0) (21.0) INHIBRX INC INBXEUR EU 21.3 (67.0) (21.0) INHIBRX INC 1RK QT 21.3 (67.0) (21.0) INSEEGO CORP INO GZ 211.9 (41.9) 46.8 INSEEGO CORP INSG US 211.9 (41.9) 46.8 INSEEGO CORP INO GR 211.9 (41.9) 46.8 INSEEGO CORP INSGEUR EU 211.9 (41.9) 46.8 INSEEGO CORP INO TH 211.9 (41.9) 46.8 INSEEGO CORP INO QT 211.9 (41.9) 46.8 INSU ACQUISITION INAQU US 0.0 (0.0) (0.0) INTERCEPT PHARMA ICPT* MM 637.5 (78.8) 443.1 INTERCEPT PHARMA I4P QT 637.5 (78.8) 443.1 INTERCEPT PHARMA ICPT US 637.5 (78.8) 443.1 INTERCEPT PHARMA I4P GR 637.5 (78.8) 443.1 INTERCEPT PHARMA I4P TH 637.5 (78.8) 443.1 INTERCEPT PHARMA I4P GZ 637.5 (78.8) 443.1 IRONWOOD PHARMAC I76 TH 443.5 (36.9) 347.6 IRONWOOD PHARMAC IRWD US 443.5 (36.9) 347.6 IRONWOOD PHARMAC I76 GR 443.5 (36.9) 347.6 IRONWOOD PHARMAC I76 QT 443.5 (36.9) 347.6 IRONWOOD PHARMAC IRWDEUR EU 443.5 (36.9) 347.6 JACK IN THE BOX JBX GR 1,886.7 (827.0) (42.7) JACK IN THE BOX JACK US 1,886.7 (827.0) (42.7) JACK IN THE BOX JBX GZ 1,886.7 (827.0) (42.7) JACK IN THE BOX JBX QT 1,886.7 (827.0) (42.7) JACK IN THE BOX JACK1EUR EU 1,886.7 (827.0) (42.7) JOSEMARIA RESOUR JOSES I2 15.7 (38.0) (49.1) JOSEMARIA RESOUR JOSE SS 15.7 (38.0) (49.1) JOSEMARIA RESOUR NGQSEK EU 15.7 (38.0) (49.1) JOSEMARIA RESOUR JOSES IX 15.7 (38.0) (49.1) JOSEMARIA RESOUR JOSES EB 15.7 (38.0) (49.1) JUST ENERGY GROU JE US 1,112.0 (413.0) (298.0) JUST ENERGY GROU JE CN 1,112.0 (413.0) (298.0) JUST ENERGY GROU 1JE GR 1,112.0 (413.0) (298.0) JUST ENERGY GROU 1JE1 TH 1,112.0 (413.0) (298.0) L BRANDS INC LTD GR 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LB US 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LTD TH 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LBRA AV 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LB* MM 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LTD QT 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LBEUR EU 10,880.0 (1,904.0) 1,072.0 L BRANDS INC LTD SW 10,880.0 (1,904.0) 1,072.0 L BRANDS INC-BDR LBRN34 BZ 10,880.0 (1,904.0) 1,072.0 LENNOX INTL INC LXI GR 1,981.2 (115.7) 353.0 LENNOX INTL INC LII US 1,981.2 (115.7) 353.0 LENNOX INTL INC LXI TH 1,981.2 (115.7) 353.0 LENNOX INTL INC LII1EUR EU 1,981.2 (115.7) 353.0 LENNOX INTL INC LII* MM 1,981.2 (115.7) 353.0 MADISON SQUARE G MSG1EUR EU 1,233.8 (203.4) (162.0) MADISON SQUARE G MS8 GR 1,233.8 (203.4) (162.0) MADISON SQUARE G MSGS US 1,233.8 (203.4) (162.0) MARRIOTT - BDR M1TT34 BZ 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAQ GR 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAR US 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAQ TH 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAR AV 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAR TE 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAREUR EU 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAQ GZ 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAQ QT 25,680.0 (79.0) (2,005.0) MARRIOTT INTL-A MAQ SW 25,680.0 (79.0) (2,005.0) MCDONALD'S CORP TCXMCD AU 49,938.9 (9,463.1) (636.7) MCDONALDS - BDR MCDC34 BZ 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MDO TH 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCD SW 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCD US 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MDO GR 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCD* MM 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCD TE 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCD AV 49,938.9 (9,463.1) (636.7) MCDONALDS CORP 0R16 LN 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCD CI 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCDUSD SW 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MCDEUR EU 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MDO GZ 49,938.9 (9,463.1) (636.7) MCDONALDS CORP MDO QT 49,938.9 (9,463.1) (636.7) MCDONALDS-CEDEAR MCD AR 49,938.9 (9,463.1) (636.7) MCDONALDS-CEDEAR MCDC AR 49,938.9 (9,463.1) (636.7) MCDONALDS-CEDEAR MCDD AR 49,938.9 (9,463.1) (636.7) MERCER PARK BR-A MRCQF US 411.4 (9.5) 2.9 MERCER PARK BR-A BRND/A/U CN 411.4 (9.5) 2.9 MICHAELS COS INC MIKEUR EU 3,923.3 (1,509.9) 385.4 MICHAELS COS INC MIM TH 3,923.3 (1,509.9) 385.4 MICHAELS COS INC MIK US 3,923.3 (1,509.9) 385.4 MICHAELS COS INC MIM GR 3,923.3 (1,509.9) 385.4 MICHAELS COS INC MIM QT 3,923.3 (1,509.9) 385.4 MICHAELS COS INC MIM GZ 3,923.3 (1,509.9) 385.4 MILESTONE MEDICA MMD PW 0.7 (15.4) (15.5) MILESTONE MEDICA MMDPLN EU 0.7 (15.4) (15.5) MONEYGRAM INTERN MGI US 4,494.0 (249.1) (94.5) MONEYGRAM INTERN 9M1N GR 4,494.0 (249.1) (94.5) MONEYGRAM INTERN 9M1N TH 4,494.0 (249.1) (94.5) MONEYGRAM INTERN MGIEUR EU 4,494.0 (249.1) (94.5) MONEYGRAM INTERN 9M1N QT 4,494.0 (249.1) (94.5) MOTOROLA SOL-CED MSI AR 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MTLA GR 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MOT TE 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MSI US 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MTLA TH 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MOSI AV 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MSI1EUR EU 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MTLA GZ 10,361.0 (740.0) 659.0 MOTOROLA SOLUTIO MTLA QT 10,361.0 (740.0) 659.0 MSCI INC MSCI US 4,111.7 (386.6) 1,008.2 MSCI INC 3HM GR 4,111.7 (386.6) 1,008.2 MSCI INC 3HM GZ 4,111.7 (386.6) 1,008.2 MSCI INC MSCI* MM 4,111.7 (386.6) 1,008.2 MSCI INC 3HM QT 4,111.7 (386.6) 1,008.2 MSCI INC 3HM TH 4,111.7 (386.6) 1,008.2 MSG NETWORKS- A MSGN US 850.8 (552.8) 258.6 MSG NETWORKS- A MSGNEUR EU 850.8 (552.8) 258.6 MSG NETWORKS- A 1M4 QT 850.8 (552.8) 258.6 MSG NETWORKS- A 1M4 TH 850.8 (552.8) 258.6 MSG NETWORKS- A 1M4 GR 850.8 (552.8) 258.6 NATHANS FAMOUS NATH US 102.2 (65.3) 76.4 NATHANS FAMOUS NFA GR 102.2 (65.3) 76.4 NATHANS FAMOUS NATHEUR EU 102.2 (65.3) 76.4 NAVISTAR INTL IHR GR 6,675.0 (3,828.0) 1,577.0 NAVISTAR INTL NAV US 6,675.0 (3,828.0) 1,577.0 NAVISTAR INTL IHR TH 6,675.0 (3,828.0) 1,577.0 NAVISTAR INTL NAVEUR EU 6,675.0 (3,828.0) 1,577.0 NAVISTAR INTL IHR QT 6,675.0 (3,828.0) 1,577.0 NAVISTAR INTL IHR GZ 6,675.0 (3,828.0) 1,577.0 NESCO HOLDINGS I NSCO US 783.2 (40.2) 47.6 NEW ENG RLTY-LP NEN US 294.8 (37.7) - NKARTA INC NKTX US 43.6 (24.1) (37.4) NORTONLIFEL- BDR S1YM34 BZ 6,405.0 (503.0) (598.0) NORTONLIFELOCK I NLOK US 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYM TH 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYM GR 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYMC TE 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYMC AV 6,405.0 (503.0) (598.0) NORTONLIFELOCK I NLOK* MM 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYMCEUR EU 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYM GZ 6,405.0 (503.0) (598.0) NORTONLIFELOCK I SYM QT 6,405.0 (503.0) (598.0) NUTANIX INC - A 0NU GZ 1,768.5 (275.0) 333.8 NUTANIX INC - A 0NU GR 1,768.5 (275.0) 333.8 NUTANIX INC - A NTNXEUR EU 1,768.5 (275.0) 333.8 NUTANIX INC - A 0NU TH 1,768.5 (275.0) 333.8 NUTANIX INC - A 0NU QT 1,768.5 (275.0) 333.8 NUTANIX INC - A NTNX US 1,768.5 (275.0) 333.8 NUTANIX INC - A 0NU SW 1,768.5 (275.0) 333.8 OMEROS CORP OMER US 70.7 (161.3) 0.9 OMEROS CORP 3O8 GR 70.7 (161.3) 0.9 OMEROS CORP 3O8 QT 70.7 (161.3) 0.9 OMEROS CORP OMEREUR EU 70.7 (161.3) 0.9 OMEROS CORP 3O8 TH 70.7 (161.3) 0.9 ONTRAK INC OTRK US 25.0 (30.0) 2.6 ONTRAK INC HY1N GZ 25.0 (30.0) 2.6 ONTRAK INC HY1N GR 25.0 (30.0) 2.6 ONTRAK INC CATSEUR EU 25.0 (30.0) 2.6 ONTRAK INC HY1N TH 25.0 (30.0) 2.6 OPEN LENDING C-A LPRO US 186.5 (464.3) - OPTIVA INC OPT CN 91.1 (49.6) 4.5 OPTIVA INC RKNEF US 91.1 (49.6) 4.5 OTIS WORLDWI OTIS US 10,473.0 (3,383.0) (20.0) OTIS WORLDWI 4PG GR 10,473.0 (3,383.0) (20.0) OTIS WORLDWI 4PG GZ 10,473.0 (3,383.0) (20.0) OTIS WORLDWI OTISEUR EU 10,473.0 (3,383.0) (20.0) OTIS WORLDWI OTIS* MM 10,473.0 (3,383.0) (20.0) OTIS WORLDWI 4PG TH 10,473.0 (3,383.0) (20.0) OTIS WORLDWI 4PG QT 10,473.0 (3,383.0) (20.0) PAPA JOHN'S INTL PP1 GR 757.7 (33.4) (3.4) PAPA JOHN'S INTL PZZA US 757.7 (33.4) (3.4) PAPA JOHN'S INTL PZZAEUR EU 757.7 (33.4) (3.4) PAPA JOHN'S INTL PP1 GZ 757.7 (33.4) (3.4) PARATEK PHARMACE PRTK US 227.1 (63.5) 188.3 PARATEK PHARMACE N4CN GR 227.1 (63.5) 188.3 PARATEK PHARMACE N4CN TH 227.1 (63.5) 188.3 PHILIP MORRI-BDR PHMO34 BZ 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PM US 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN 4I1 GR 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PM1CHF EU 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN 4I1 TH 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PM1 TE 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PM1EUR EU 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PMI SW 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN 0M8V LN 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PM* MM 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PMIZ IX 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PMIZ EB 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN 4I1 GZ 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN 4I1 QT 39,129.0 (10,245.0) 1,928.0 PHILIP MORRIS IN PMOR AV 39,129.0 (10,245.0) 1,928.0 PLANET FITNESS-A PLNT1EUR EU 1,800.0 (721.7) 446.9 PLANET FITNESS-A 3PL QT 1,800.0 (721.7) 446.9 PLANET FITNESS-A PLNT US 1,800.0 (721.7) 446.9 PLANET FITNESS-A 3PL TH 1,800.0 (721.7) 446.9 PLANET FITNESS-A 3PL GR 1,800.0 (721.7) 446.9 PLANTRONICS INC PLT US 2,201.5 (145.0) 193.1 PLANTRONICS INC PTM GR 2,201.5 (145.0) 193.1 PLANTRONICS INC PLTEUR EU 2,201.5 (145.0) 193.1 PLANTRONICS INC PTM GZ 2,201.5 (145.0) 193.1 PPD INC PPD US 6,041.5 (915.2) 203.0 PRIORITY TECHNOL PRTHU US 449.7 (133.5) (4.8) PROGENITY INC 4ZU TH 111.0 (84.8) 9.5 PROGENITY INC 4ZU GR 111.0 (84.8) 9.5 PROGENITY INC 4ZU QT 111.0 (84.8) 9.5 PROGENITY INC PROGEUR EU 111.0 (84.8) 9.5 PROGENITY INC 4ZU GZ 111.0 (84.8) 9.5 PROGENITY INC PROG US 111.0 (84.8) 9.5 PSOMAGEN INC-KDR 950200 KS - - - QUANTUM CORP QMCO US 164.9 (195.5) (0.9) RADIUS HEALTH IN RDUS US 175.1 (109.4) 94.2 RADIUS HEALTH IN 1R8 TH 175.1 (109.4) 94.2 RADIUS HEALTH IN 1R8 QT 175.1 (109.4) 94.2 RADIUS HEALTH IN RDUSEUR EU 175.1 (109.4) 94.2 RADIUS HEALTH IN 1R8 GR 175.1 (109.4) 94.2 REC SILICON ASA RECO IX 258.4 (19.2) 47.9 REC SILICON ASA REC NO 258.4 (19.2) 47.9 REC SILICON ASA REC SS 258.4 (19.2) 47.9 REC SILICON ASA RECO S1 258.4 (19.2) 47.9 REC SILICON ASA RECO TQ 258.4 (19.2) 47.9 REC SILICON ASA REC EU 258.4 (19.2) 47.9 REC SILICON ASA RECO EB 258.4 (19.2) 47.9 REC SILICON ASA RECO I2 258.4 (19.2) 47.9 REC SILICON ASA RECO QX 258.4 (19.2) 47.9 REC SILICON ASA RECO PO 258.4 (19.2) 47.9 REC SILICON ASA RECO B3 258.4 (19.2) 47.9 REC SILICON ASA RECO S2 258.4 (19.2) 47.9 REC SILICON ASA RECO L3 258.4 (19.2) 47.9 REVLON INC-A REV US 2,999.3 (1,548.5) 28.9 REVLON INC-A RVL1 GR 2,999.3 (1,548.5) 28.9 REVLON INC-A REVEUR EU 2,999.3 (1,548.5) 28.9 REVLON INC-A RVL1 TH 2,999.3 (1,548.5) 28.9 REVLON INC-A REV* MM 2,999.3 (1,548.5) 28.9 RIMINI STREET IN RMNI US 201.8 (89.8) (91.5) SALLY BEAUTY HOL S7V GR 3,198.1 (69.1) 825.6 SALLY BEAUTY HOL SBH US 3,198.1 (69.1) 825.6 SALLY BEAUTY HOL SBHEUR EU 3,198.1 (69.1) 825.6 SBA COMM CORP 4SB GR 9,390.5 (4,290.6) 71.4 SBA COMM CORP SBAC US 9,390.5 (4,290.6) 71.4 SBA COMM CORP SBAC* MM 9,390.5 (4,290.6) 71.4 SBA COMM CORP 4SB GZ 9,390.5 (4,290.6) 71.4 SBA COMM CORP 4SB TH 9,390.5 (4,290.6) 71.4 SBA COMM CORP SBACEUR EU 9,390.5 (4,290.6) 71.4 SBA COMM CORP 4SB QT 9,390.5 (4,290.6) 71.4 SBA COMMUN - BDR S1BA34 BZ 9,390.5 (4,290.6) 71.4 SCIENTIFIC GAMES SGMS US 7,844.0 (2,479.0) 847.0 SCIENTIFIC GAMES TJW GR 7,844.0 (2,479.0) 847.0 SCIENTIFIC GAMES TJW TH 7,844.0 (2,479.0) 847.0 SCIENTIFIC GAMES TJW GZ 7,844.0 (2,479.0) 847.0 SERES THERAPEUTI MCRB1EUR EU 100.7 (65.6) 28.5 SERES THERAPEUTI MCRB US 100.7 (65.6) 28.5 SERES THERAPEUTI 1S9 GR 100.7 (65.6) 28.5 SERES THERAPEUTI 1S9 SW 100.7 (65.6) 28.5 SERES THERAPEUTI 1S9 TH 100.7 (65.6) 28.5 SHELL MIDSTREAM SHLX US 2,394.0 (414.0) 311.0 SIRIUS XM HO-BDR SRXM34 BZ 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN SIRI US 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN RDO GR 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN RDO TH 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN SIRI AV 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN RDO GZ 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN SIRIEUR EU 10,702.0 (911.0) (2,185.0) SIRIUS XM HOLDIN RDO QT 10,702.0 (911.0) (2,185.0) SIX FLAGS ENTERT 6FE GR 2,865.0 (532.7) (46.8) SIX FLAGS ENTERT SIXEUR EU 2,865.0 (532.7) (46.8) SIX FLAGS ENTERT 6FE QT 2,865.0 (532.7) (46.8) SIX FLAGS ENTERT 6FE TH 2,865.0 (532.7) (46.8) SIX FLAGS ENTERT SIX US 2,865.0 (532.7) (46.8) SLEEP NUMBER COR SNBR US 780.1 (102.8) (348.2) SLEEP NUMBER COR SL2 GR 780.1 (102.8) (348.2) SLEEP NUMBER COR SNBREUR EU 780.1 (102.8) (348.2) SOCIAL CAPITAL IPOC/U US 829.2 800.2 1.1 SOCIAL CAPITAL IPOB/U US 415.4 400.7 1.2 SOCIAL CAPITAL-A IPOB US 415.4 400.7 1.2 SOCIAL CAPITAL-A IPOC US 829.2 800.2 1.1 SONA NANOTECH IN SONA CN 1.7 (2.2) (2.4) STARBUCKS CORP SBUX* MM 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SRB GR 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SRB TH 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX AV 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUXEUR EU 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX TE 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX IM 29,374.5 (7,799.4) 459.6 STARBUCKS CORP TCXSBU AU 29,374.5 (7,799.4) 459.6 STARBUCKS CORP USSBUX KZ 29,374.5 (7,799.4) 459.6 STARBUCKS CORP 0QZH LI 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX CI 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUXUSD SW 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SRB GZ 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX US 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX PE 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SBUX SW 29,374.5 (7,799.4) 459.6 STARBUCKS CORP SRB QT 29,374.5 (7,799.4) 459.6 STARBUCKS-BDR SBUB34 BZ 29,374.5 (7,799.4) 459.6 STARBUCKS-CEDEAR SBUX AR 29,374.5 (7,799.4) 459.6 STARBUCKS-CEDEAR SBUXD AR 29,374.5 (7,799.4) 459.6 SUNPOWER CORP S9P2 GR 1,449.3 (7.1) 107.0 SUNPOWER CORP SPWR US 1,449.3 (7.1) 107.0 SUNPOWER CORP S9P2 TH 1,449.3 (7.1) 107.0 SUNPOWER CORP SPWREUR EU 1,449.3 (7.1) 107.0 SUNPOWER CORP S9P2 GZ 1,449.3 (7.1) 107.0 SUNPOWER CORP S9P2 QT 1,449.3 (7.1) 107.0 SUNPOWER CORP S9P2 SW 1,449.3 (7.1) 107.0 TAUBMAN CENTERS TU8 GR 4,591.4 (274.8) - TAUBMAN CENTERS TCO US 4,591.4 (274.8) - TAUBMAN CENTERS TCO2EUR EU 4,591.4 (274.8) - TRANSDIGM - BDR T1DG34 BZ 18,179.0 (4,179.0) 5,120.0 TRANSDIGM GROUP TDG US 18,179.0 (4,179.0) 5,120.0 TRANSDIGM GROUP T7D GR 18,179.0 (4,179.0) 5,120.0 TRANSDIGM GROUP T7D TH 18,179.0 (4,179.0) 5,120.0 TRANSDIGM GROUP TDGEUR EU 18,179.0 (4,179.0) 5,120.0 TRANSDIGM GROUP T7D QT 18,179.0 (4,179.0) 5,120.0 TRANSDIGM GROUP TDG* MM 18,179.0 (4,179.0) 5,120.0 TRIUMPH GROUP TGI US 2,266.3 (1,047.4) 383.3 TRIUMPH GROUP TG7 GR 2,266.3 (1,047.4) 383.3 TRIUMPH GROUP TG7 TH 2,266.3 (1,047.4) 383.3 TRIUMPH GROUP TGIEUR EU 2,266.3 (1,047.4) 383.3 TUPPERWARE BRAND TUP GR 1,191.4 (244.0) (655.5) TUPPERWARE BRAND TUP US 1,191.4 (244.0) (655.5) TUPPERWARE BRAND TUP TH 1,191.4 (244.0) (655.5) TUPPERWARE BRAND TUP1EUR EU 1,191.4 (244.0) (655.5) TUPPERWARE BRAND TUP GZ 1,191.4 (244.0) (655.5) TUPPERWARE BRAND TUP QT 1,191.4 (244.0) (655.5) TUPPERWARE BRAND TUP SW 1,191.4 (244.0) (655.5) UBIQUITI INC UI US 737.5 (295.5) 322.4 UBIQUITI INC 3UB GR 737.5 (295.5) 322.4 UBIQUITI INC 3UB GZ 737.5 (295.5) 322.4 UBIQUITI INC UBNTEUR EU 737.5 (295.5) 322.4 UNISYS CORP USY1 TH 2,407.4 (200.3) 549.4 UNISYS CORP USY1 GR 2,407.4 (200.3) 549.4 UNISYS CORP UIS US 2,407.4 (200.3) 549.4 UNISYS CORP UIS1 SW 2,407.4 (200.3) 549.4 UNISYS CORP UISEUR EU 2,407.4 (200.3) 549.4 UNISYS CORP UISCHF EU 2,407.4 (200.3) 549.4 UNISYS CORP USY1 GZ 2,407.4 (200.3) 549.4 UNISYS CORP USY1 QT 2,407.4 (200.3) 549.4 UNITI GROUP INC 8XC TH 4,816.2 (2,217.1) - UNITI GROUP INC 8XC GR 4,816.2 (2,217.1) - UNITI GROUP INC UNIT US 4,816.2 (2,217.1) - VALVOLINE INC VVVEUR EU 3,051.0 (76.0) 994.0 VALVOLINE INC 0V4 GR 3,051.0 (76.0) 994.0 VALVOLINE INC 0V4 QT 3,051.0 (76.0) 994.0 VALVOLINE INC VVV US 3,051.0 (76.0) 994.0 VECTOR GROUP LTD VGR US 1,531.7 (669.2) 300.6 VECTOR GROUP LTD VGR GR 1,531.7 (669.2) 300.6 VECTOR GROUP LTD VGREUR EU 1,531.7 (669.2) 300.6 VECTOR GROUP LTD VGR TH 1,531.7 (669.2) 300.6 VECTOR GROUP LTD VGR QT 1,531.7 (669.2) 300.6 VECTOR GROUP LTD VGR GZ 1,531.7 (669.2) 300.6 VERISIGN INC VRS TH 1,764.3 (1,386.2) 228.1 VERISIGN INC VRSN US 1,764.3 (1,386.2) 228.1 VERISIGN INC VRS GR 1,764.3 (1,386.2) 228.1 VERISIGN INC VRSN* MM 1,764.3 (1,386.2) 228.1 VERISIGN INC VRS GZ 1,764.3 (1,386.2) 228.1 VERISIGN INC VRSNEUR EU 1,764.3 (1,386.2) 228.1 VERISIGN INC VRS QT 1,764.3 (1,386.2) 228.1 VERISIGN INC VRS SW 1,764.3 (1,386.2) 228.1 VERISIGN INC-BDR VRSN34 BZ 1,764.3 (1,386.2) 228.1 VERISIGN-CEDEAR VRSN AR 1,764.3 (1,386.2) 228.1 VERY GOOD FOOD C VERY CN 6.8 3.0 2.2 VITASPRING BIOME VSBC US 0.0 (0.1) (0.1) VIVINT SMART HOM VVNT US 2,829.9 (1,404.9) (218.0) WARNER MUSIC-A WMG US 6,148.0 (21.0) (943.0) WARNER MUSIC-A WMGEUR EU 6,148.0 (21.0) (943.0) WARNER MUSIC-A WA4 GZ 6,148.0 (21.0) (943.0) WARNER MUSIC-A WA4 GR 6,148.0 (21.0) (943.0) WARNER MUSIC-A WMG AV 6,148.0 (21.0) (943.0) WARNER MUSIC-A WA4 TH 6,148.0 (21.0) (943.0) WARNER MUSIC-BDR W1MG34 BZ 6,148.0 (21.0) (943.0) WATERS CORP WAZ GR 2,679.3 (41.6) 569.5 WATERS CORP WAT US 2,679.3 (41.6) 569.5 WATERS CORP WAZ TH 2,679.3 (41.6) 569.5 WATERS CORP WAT* MM 2,679.3 (41.6) 569.5 WATERS CORP WAZ QT 2,679.3 (41.6) 569.5 WATERS CORP WATEUR EU 2,679.3 (41.6) 569.5 WAYFAIR INC- A W US 4,379.5 (787.4) 595.6 WAYFAIR INC- A W* MM 4,379.5 (787.4) 595.6 WAYFAIR INC- A 1WF GZ 4,379.5 (787.4) 595.6 WAYFAIR INC- A 1WF QT 4,379.5 (787.4) 595.6 WAYFAIR INC- A 1WF GR 4,379.5 (787.4) 595.6 WAYFAIR INC- A 1WF TH 4,379.5 (787.4) 595.6 WAYFAIR INC- A WEUR EU 4,379.5 (787.4) 595.6 WHITING PETROLEU WLL1* MM 3,732.2 (178.3) (478.8) WHITING PETROLEU WLL US 3,732.2 (178.3) (478.8) WHITING PETROLEU WHT2 GR 3,732.2 (178.3) (478.8) WHITING PETROLEU WLL1EUR EU 3,732.2 (178.3) (478.8) WHITING PETROLEU WHT2 GZ 3,732.2 (178.3) (478.8) WHITING PETROLEU WHT2 TH 3,732.2 (178.3) (478.8) WHITING PETROLEU WHT2 QT 3,732.2 (178.3) (478.8) WIDEOPENWEST INC WOW US 2,494.4 (238.6) (95.8) WIDEOPENWEST INC WU5 GR 2,494.4 (238.6) (95.8) WIDEOPENWEST INC WU5 QT 2,494.4 (238.6) (95.8) WIDEOPENWEST INC WOW1EUR EU 2,494.4 (238.6) (95.8) WINGSTOP INC WING1EUR EU 201.1 (192.7) 19.9 WINGSTOP INC WING US 201.1 (192.7) 19.9 WINGSTOP INC EWG GR 201.1 (192.7) 19.9 WINGSTOP INC EWG GZ 201.1 (192.7) 19.9 WINMARK CORP WINA US 35.8 (8.8) 10.4 WINMARK CORP GBZ GR 35.8 (8.8) 10.4 WORKHORSE GROUP WKHSEUR EU 55.5 (70.5) (70.0) WORKHORSE GROUP 1WO TH 55.5 (70.5) (70.0) WORKHORSE GROUP 1WO GZ 55.5 (70.5) (70.0) WORKHORSE GROUP WKHS US 55.5 (70.5) (70.0) WORKHORSE GROUP 1WO GR 55.5 (70.5) (70.0) WORKHORSE GROUP 1WO QT 55.5 (70.5) (70.0) WW INTERNATIONAL WW US 1,503.0 (581.2) (42.9) WW INTERNATIONAL WW6 GR 1,503.0 (581.2) (42.9) WW INTERNATIONAL WTW AV 1,503.0 (581.2) (42.9) WW INTERNATIONAL WW6 GZ 1,503.0 (581.2) (42.9) WW INTERNATIONAL WTWEUR EU 1,503.0 (581.2) (42.9) WW INTERNATIONAL WW6 QT 1,503.0 (581.2) (42.9) WW INTERNATIONAL WW6 TH 1,503.0 (581.2) (42.9) WYNDHAM DESTINAT WYND US 7,822.0 (993.0) 1,562.0 WYNDHAM DESTINAT WD5 GR 7,822.0 (993.0) 1,562.0 WYNDHAM DESTINAT WD5 TH 7,822.0 (993.0) 1,562.0 WYNDHAM DESTINAT WD5 QT 7,822.0 (993.0) 1,562.0 WYNDHAM DESTINAT WYNEUR EU 7,822.0 (993.0) 1,562.0 YRC WORLDWIDE IN YRCW US 1,936.6 (466.9) 57.0 YRC WORLDWIDE IN YEL1 GR 1,936.6 (466.9) 57.0 YRC WORLDWIDE IN YEL1 QT 1,936.6 (466.9) 57.0 YRC WORLDWIDE IN YRCWEUR EU 1,936.6 (466.9) 57.0 YRC WORLDWIDE IN YEL1 TH 1,936.6 (466.9) 57.0 YUM! BRANDS -BDR YUMR34 BZ 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC TGR TH 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC TGR GR 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC YUM AV 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC TGR TE 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC YUMUSD SW 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC TGR GZ 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC YUM US 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC YUMEUR EU 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC TGR QT 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC YUM SW 6,061.0 (7,919.0) 477.0 YUM! BRANDS INC YUM* MM 6,061.0 (7,919.0) 477.0 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***