/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/201106.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 6, 2020, Vol. 24, No. 310 Headlines 06-010 GRIDLEY: Durham Pump Objects to Disclosure Statement 1069 RESTAURANT: Seeks to Hire Shuker & Dorris as Counsel 1069 RESTAURANT: U.S. Trustee Appoints Creditors' Committee 2136 FULTON REALTY: Creditors to be Paid in Full from Property Sale 24 HOUR FITNESS: Nov. 12 Hearing on Disclosure Statement 24 HOUR FITNESS: Unsecureds Will Receive Warrants in Plan 2836 WEST REALTY: Say It Has Proposed Unimpaired Plan 2MORROWS SOLUTIONS: Taps Somers Team as Real Estate Broker 4-S RANCH PARTNERS: Hires Macdonald Fernandez as Bankruptcy Counsel 4-S RANCH PARTNERS: Hires McGinley as Hydrogeological Consultant 6TH & CENTER: Seeks to Hire Rental Realty as Property Manager AE BICYCLE: Seeks Court Approval to Hire Litigation Consultant ALPHA ENTERTAINMENT: Unsecureds to Recover 8% to 12% in Plan ALPHA ENTERTAINMENT: Wins OK to Solicit Votes on Plan AMERICAN TIMBER: U.S. Trustee Unable to Appoint Committee APEX PARKS: PLIF Entitled to Rescind Insurance Policy, Court Rules ARTISAN BUILDERS: Hires My Home Group as Real Estate Broker ASARCO LLC: 9th Cir. Upholds ARC Cleanup Liability ASCENA RETAIL: Seeks to Hire Deloitte Tax to Provide Tax Services ASTERIA EDUCATION: Drops Fight vs SBA; To Sell to Lender ATOM INSTRUMENT: 5th Cir. Clears PAC in Infringement Suit AVG WEST: Case Summary & 8 Unsecured Creditors AVIANCA HOLDINGS: Seeks to Hire KPMG LLP as Tax Consultant BAINBRIDGE UINTA: Taps Petrie Partners as Investment Banker BARBARA A. WIGLEY: Spouse's Asset Transfers Fraudulent, Court Says BAUMANN & SONS: Committee Taps Ryniker Consultants as Advisor BAUMANN & SONS: Seeks to Hire Smith & Downey as Special Counsel BLUE EAGLE: Seeks to Hire Hagemore Realty as Real Estate Agent BOY SCOUTS: Seeks to Hire White & Case as Legal Counsel BRONX MIRACLE: Court Junks Emergency Bid for Mandamus BROOKLYN ROASTING: Taps Klestadt Winters as Legal Counsel CALLON PETROLEUM: Posts $680.4 Million Net Loss in Third Quarter CALLON PETROLEUM: Signs Exchange Agreement with Noteholders CASCADES OF GROVELAND: Hires Mateer Harbert as Special Counsel CBL & ASSOCIATES: Moody's Affirms Ca CFR & Alters Outlook to Stable CEC ENTERTAINMENT: Court OKs Creditor Voting on Bankruptcy Plan CEC ENTERTAINMENT: Taps KPMG to Provide Accounting Services CEC ENTERTAINMENT: Unsecureds to Split $5.5 Million in Plan CENTRAL PROCESSING: IRS Not Entitled to Disgorgement of Fees CENTRAL PROCESSING: IRS Waived Right to Seek Reconsideration CHEROKEE PHARMACY: McKesson's Claim Fully Secured, Court Rules CHRISTOPHER RIDGEWAY: $2 Million Sanction Upheld CINEMEX USA: MN Theaters May Seek Extension of Levy Period CLEAR THE WAY: Gets Approval to Hire Saranto Calamas as Accountant CLEARPOINT CHEMICALS: Taps Three Rivers as Financial Advisor COMCAR INDUSTRIES: Austin Buying Low Value Assets for $440 COMCAR INDUSTRIES: DM Allied Buying Low Value Assets for $30K COMCAR INDUSTRIES: Roggen Buying Low Value Assets for $250 COMCAR INDUSTRIES: Zellner Buying Refrigerator for $100 CONRAD WISSEL: Bank's Mortgage Cannot be Modified, Court Rules CORPORATE RESOURCE: SMS Lacks Standing to Enforce Settlement CPI CARD: Reports $5.8 Million Net Income for Third Quarter CUKER INTERACTIVE: Pillsbury Winthrop Objects to Plan & Disclosure CUKER INTERACTIVE: Unescured Claims Are Unimpaired in Plan CUKER INTERACTIVE: Wolfe Legal Objects to Disclosure Statement DAVIS FAMILY TRUST: Plan to be Funded by Rental Payment DELPHI CORP: 6th Cir. Keeps Summary Judgment Ruling in PBGC Case DIOCESE OF BUFFALO: Mediation in Insurers Row Premature DOMINION GROUP: Linquist Suit Transferred to Louisiana Court EAS GRACELAND: Seeks to Hire Glankler Brown as Legal Counsel ELITE TOUR: Seeks to Hire J. Eugene Miles as Legal Counsel ENERGY FISHING: Taps Snow & Green as Special Counsel ENGINEERED PROPULSION: Hires Guinn Vinopal as Financial Advisor EQUINOX HOLDINGS: Moody's Lowers CFR to Caa3, Outlook Negative ESM INC: Dosa Fillmore Closes After Filing Bankruptcy EXACTUS INC: Sells 700,000 Common Shares to Interim CEO FAIRBANKS CO: Court Rejects NUFIC's Reimbursement Claims FARMLAND INDUSTRIES: AELS Bid to Dismiss Certus Suit "Premature" FIGUEROA MOUNTAIN: Taps Lesnick Prince as Bankruptcy Counsel FINGER OIL: Seeks to Hire Dean W. Greer as Legal Counsel FIRST TO THE FINISH: Taps Carmody MacDonald as Legal Counsel FIRSTENERGY SOLUTIONS: District Court Tosses Lee Yeager Suit FITZ LAW GROUP: Taps Travis & Warzala as Accountant FLOAT HORIZEN: Seeks to Hire Lefkovitz & Lefkovitz as Counsel FLORIDA HOMESITE: U.S. Trustee Unable to Appoint Committee FLORIDA TILT: Gets Interim Approval to Hire Sagre Law as Counsel FM COAL: Committee Hires Rumberger Kirk as Counsel FMTB BH: Did Not Default Under Sale Contracts, Court Says FRICTIONLESS WORLD: U.S. Trustee Appoints Creditors' Committee FTS INTERNATIONAL: Seeks to Hire Winston & Strawn as Legal Counsel FURNITURE FACTORY: Case Summary & 30 Largest Unsecured Creditors FURNITURE FACTORY: Sun Capital Owned Company Files for Chapter 11 GARDENS REGIONAL: 9th Cir. Flips Fee-for-Service Payments Ruling GLOBAL ACQUISITIONS: Taps Anyama Law as Bankruptcy Counsel GORHAM PAPER: Case Summary & 30 Largest Unsecured Creditors GORHAM PAPER: Zohar Company in Chapter 11 to Sell Assets GRAN TIERRA: Posts $108 Million Net Loss in Third Quarter GREYSTONE SELECT: Fitch Withdraws BB- on Proposed $400MM Loan GREYSTONE STAFFING: Summary Judgment Reversed in Green Key Row GRUBB & ELLIS: Newmark et al. May Not Produce Privileged Docs GUARDION HEALTH: Stockholders Pass All Proposals at Annual Meeting GYPSUM RESOURCES: Hires Coulthard Law as Special Litigation Counsel HAMPSTEAD GLOBAL: Reaches Settlement With Domain Seller HENRY ANESTHESIA: Hires Huff Powell as Special Counsel HENRY FORD VILLAGE: U.S. Trustee Appoints Creditors' Committee HILLJE MUSIC CENTERS: Yamaha & BGE Object to Plan Disclosures HOOK UP CELLULAR: Unsecureds Get $20,000 With 4% Interest in Plan HOPSTER'S LLC: Boston Brewery in Chapter 11 Bankruptcy HORSEPOWER UNLIMITED: U.S. Trustee Unable to Appoint Committee HOUSTON GRANITE: Unsecured Creditors to be Paid in Full in 5 Years IBIO INC: Appoints Randy Maddux as Chief Operating Officer ICON CONSTRUCTION: United Excel Must Defend Suit IMPRESA HOLDINGS: Taps Holthouse Carlin as Consultant INSPIRED CONCEPTS: Seeks to Hire Andrews Hooper as Tax Accountant INTERSTATE COMMODITIES: Committee Taps Lemery Greisler as Counsel IRIS RAMOS: Court Vacates Default Judgment Against CFS Realty JAI BANGALAMUKHI: Bankr. Administrator Unable to Appoint Committee JOHN OLSON: Court Confirms Chapter 11 Reorganization Plan JW TRUCKING: Taps Stafford Law as Special Counsel K & K TECHNOLOGY: Hires Moss & Murphy as Litigation Counsel K & W CAFETERIAS: Committee Hires Waldrep Wall as Counsel K&W CAFETERIAS: Seeks to Hire John Bosworth as Appraiser KOPIN CORPORATION: Incurs $957K Net Loss in Third Quarter L.L.G. CAB: Reaches Settlement With Primary Creditor LAS UVAS VALLEY: Dona Ana County's Bid to Amend Claim Junked LEGENDS GOLF: Seeks to Hire Accounting Center as Accountant LEHMAN BROTHERS: LBI Unsecureds' Recovery Now at 40.06% LESLIE'S POOLMART: Moody's Upgrades CFR to B1, Outlook Stable LIGADO NETWORKS: Raises Additional $3.85B to Fund L-Band Network LIVE PRIMARY: Hires Rosen & Associates as Bankruptcy Counsel LONESTAR RESOURCES: Fitch Withdraws 'D' IDR Due to Bankruptcy LONG DEI LIU: Counsel's Fee Sharing Deal Unlawful, Court Says LST EXPRESS: Combined Plan & Disclosures Approved by Judge LTC HOLDINGS: Insurer Loses Appeal Over Tax Refund Claim LX AVENUE: U.S. Trustee Says Disclosures Inadequate LX AVENUE: Unsecureds to be Paid in Full With Interest in Plan MAGNUS INDUSTRIES: Taps Fellers Snider as Legal Counsel MALLINCKRODT PLC: Shareholders Ask Court to Appoint Equity Panel MARC L. JORDAN: Court Orders Former Client to Turn Over $12,500 MARIANINA OIL: Taps Bilotta & Santoli as Accountant MARTIN DEVELOPMENT: Seeks to Hire Caputo & Company as Accountant MEDICAL SIMULATION: H. Winklemann Removed as Committee Member MOHAMMAD ZAMAN: Creditors May Pursue State Court Action MOORE TRUCKING: U.S. Trustee Unable to Appoint Committee MOTORS LIQUIDATION: District Court Junks Kelly Harris Suit MPH ACQUISITION: Moody's Hikes Rating on 2023 1st Lien Loan to Ba3 NABORS INDUSTRIES: Reports $161 Million Net Loss for Third Quarter NATIONAL MEDICAL: Court Junks Lyon Financial's Bid to Stay Appeal NEUMEDICINES INC: Taps CBIZ Valuation as Accountant NEW HOPE HARDWARE: First Amended Reorganization Plan Confirmed NIR WEST: Case Summary & 10 Unsecured Creditors NOBLE CORP: Maritime Tort Claimants Object to Disclosure Statement NOBLE CORP: Says Chapter 11 Exit Looms After Paragon Settlement NOBLE CORP: Unsecured Creditors to Get Stock in Plan NORTHBELT LLC: Modified Plan Still Not Feasible, Court Rules NORTHLAND CORPORATION: Committee Taps McClain DeWees as Counsel OAKTREE MEDICAL: Huron Bid to Stay WIFS Suit Nixed OELWEIN HEALTHCARE: Nov. 19 Plan & Disclosure Hearing Set OELWEIN HEALTHCARE: Unsecureds to Be Paid From Surplus Funds ONE AVIATION: Lenders Face Hurdles in $5.2M Bankruptcy Sale OPTION CARE: Swings to $1.7 Million Net Income in Third Quarter OZLM LTD XIII: Moody's Cuts Rating on $8.9MM Class E Notes to Caa2 PAINT THE WIND: U.S. Trustee Unable to Appoint Committee PARK AVENUE: Taps Skolnick Legal Group as Counsel PEAK PROPERTY: Hires Montgomery Little as Litigation Counsel PERMIAN TANK: Has Settlement With Creditors Committee PETTERS COMPANY: 8th Cir. Flips Summary Judgment in Clawback Suits PHARMAGREEN BIOTECH: Chapter 11 Bankruptcy Filing Stays EMA Suit PRO-FIT DEVELOPMENT: Hires Alexander E. Borell as Special Counsel PROFESSIONAL FINANCIAL: Taps Silicon Valley as Auctioneer PROTECTIVE POWER: Seeks to Hire Genova & Malin as Legal Counsel PRYSM INC: Court Approves Chapter 11 Reorganization Plan Unopposed PRYSM INC: Unsecureds to Get $500K in Plan RACING SERVICES: 8th Cir. BAP Rules on North Dakota Claim RADIO CANTICO: Seeks to Hire Alla Kachan as Counsel RAINBOW LAND: H.H. Land Objects to Disclosure Statement RAVN AIR GROUP: Hires Farber Hass as Accountant ROCHESTER DRUG: Class Claimants' Subpoenas vs Insurers Squashed ROYAL ALICE: Court Won't Limit Powers of Chapter 11 Trustee RTW PROPERTIES: Taps Sheehan & Ramsey as Legal Counsel RYFIELD PROPERTIES: Hires McClain Crouse as Accountant SCHOOL DISTRICT: Seeks to Hire Bruner Wright as Legal Counsel SHAWNEE CAB: Reaches Deal With Primary Creditor; IRS Gets 41% SHILOH INDUSTRIES: Committee Hires Foley & Lardner as Counsel SMOKY MOUNTAIN: Property Owners Lack Standing to Appeal SONYA OWENS: Fails in Bid to Revive Bankruptcy Case SRH SOUTHAVEN: Files First Modification to Plan SRH SOUTHAVEN: No Class of Claims Impaired by Plan STEAKHOUSE HOLDINGS: Reaches Deal With Warren; Plan Filed TAILORED BRANDS: Taps Deloitte Tax to Provide Tax Services TBH19 LLC: Hires LeFan Law as Special Counsel TEEWINOT LIFE: Hires Thomas Hobson as Accountant THERMASTEEL INC: Trustee Hires Gentry Locke as Attorney TRUE HEALTH DIAGNOSTICS: Plan Confirmation Order Upheld UCAST LLC: Seeks to Hire DLA Piper as Bankruptcy Counsel UNITED SHORE: Fitch Assigns BB- LT IDR, Outlook Stable UW OSHKOSH: Hires New Director After Bankruptcy Exit VALLEY EQUITIES: Trustee Hires Danning Gill as Counsel VERITY HEALTH: Court Rules on SGM Objection to Confirmation Order WELLFLEX ENERGY: Seeks to Hire Foley & Lardner as Legal Counsel WELLFLEX ENERGY: Seeks to Hire Grey Light as Financial Advisor WHITE'S PLACE: Deal Reached With JAA; Plan Confirmed WHITE'S PLACE: Jacksonville Aviation Says Plan Not Feasible WOODBRIDGE GROUP: SAG Liable for $270,000, Court Says WP REALTY: Seeks to Hire Goldberg Weprin as Bankruptcy Counsel XEUHAI LI: Court Tosses Giantsea Amended Suit with Prejudice ZOHAR CDO 2003: Fails in Bid to Move Suit vs Patriarch to Delaware ZOHAR CDO 2003: Tilton Suit vs MBIA Remanded to NY State Court [*] 8 Key Issues for Hospitality Advisors [*] Big-Name Companies Flock Debtor-Friendly Virginia [*] Changes to Federal Bankruptcy Law Can Help Small Businesses [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ********* 06-010 GRIDLEY: Durham Pump Objects to Disclosure Statement ----------------------------------------------------------- Durham Pump, Inc. objects to the Disclosure Statement filed by Debtor 06-010 Gridley Business Trust which describes the Debtor's Plan of Reorganization. Durham Pump claims that the Disclosure Statement fails to disclose who owns the other 33.07% of the Property, whether the other owners are affiliated with Debtor, and what their respective management rights are with respect to the sale and operation of the Property. Durham Pump states that the Debtor must explain the likelihood of achieving the proposed sales price of the Property and such other information that will allow Durham Pump and the other creditors to make an informed decision with respect to their likely recovery if the Plan is confirmed. Durham Pump points out that the Disclosure Statement provides that Butte County Treasurer holds a secured tax claim of over $1.6M. The Disclosure Statement is devoid of any explanation as to how post-petition and post-effective date taxes will be paid in the up to 5 years it may take to sell the Property. Durham Pump asserts that the Disclosure Statement acknowledges Durham Pump's mechanic's lien and then inexplicably treats Durham Pump's claim as unsecured. Debtor must provide an explanation as to why Durham Pump is not being treated as a secured creditor under the Plan. Durham Pump further asserts that the Disclosure Statement is completely devoid as to how, factually or legally, Butte County Treasurer and Durham Pump's liens can be released on the Effective Date, when the outside date for payment on such claims is up to 5 years after the Effective Date. A full-text copy of Durham Pump's objection to disclosure statement dated Sept. 1, 2020, is available at https://tinyurl.com/y6ptmku4 from PacerMonitor.com at no charge. Attorneys for Durham Pump: GARMAN TURNER GORDON LLP TALITHA GRAY KOZLOWSKI, ESQ. 7251 Amigo Street, Suite 210 Las Vegas, Nevada 89119 About 06-010 Gridley Business Trust 06-010 Gridley Business Trust, based in Las Vegas, NV, filed a Chapter 11 petition (Bankr. D. Nev. Lead Case No. 14-14028) on June 6, 2014. In its petition, the Debtor disclosed $1.21 million in assets, and $694,384 in liabilities. The petition was signed by Peter J. Becker, managing member of Trustee, Mesa Asset Management, LLC. The Hon. August B. Landis oversees the case. The LAW OFFICES OF TIMOTHY P. THOMAS, LLC, serves as bankruptcy counsel to the Debtor. 1069 RESTAURANT: Seeks to Hire Shuker & Dorris as Counsel --------------------------------------------------------- 1069 Restaurant Group, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Shuker & Dorris, PA., as counsel to the Debtor. 1069 Restaurant requires Shuker & Dorris to: a. advise the Debtor as to its rights and duties in the bankruptcy case; b. prepare pleadings related to the bankruptcy case, including a disclosure statement and a plan of reorganization; and c. take any and all other necessary action incident to the proper preservation and administration of the estate. Shuker & Dorris will be paid at these hourly rates: Attorneys $450 to $600 Associates $220 to $350 Paraprofessionals $105 to $160 Prior to the commencement of the bankruptcy case, the Debtor paid an advance fee of $45,068. Shuker & Dorris will also be reimbursed for reasonable out-of-pocket expenses incurred. R. Scott Shuker, partner of Shuker & Dorris, P.A., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Shuker & Dorris can be reached at: R. Scott Shuker, Esq. SHUKER & DORRIS, P.A. 121 S. Orange Avenue, Suite 1120 Orlando, FL 32801 Tel: (407) 337-2060 E-mail: rshuker@shukerdorris.com About 1069 Restaurant Group 1069 Restaurant Group, LLC, is an operator of franchised buffet restaurants. The group is the largest Golden Corral franchisee, with 33 restaurants in Florida and Georgia. 1069 Restaurant Group and its affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-05582) on Oct. 5, 2020. The petitions were signed by Eric A. Holm, manager. 1069 Restaurant Group was estimated to have assets of $10 million to $50 million and liabilities of $50 million to $100 million. The Hon. Lori V. Vaughan is the case judge. The Debtors tapped Shuker & Dorris, P.A., led by R. Scott Shuker, as counsel and Rosenfield and Company, PLLC as financial advisors. 1069 RESTAURANT: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------------- The U.S. Trustee for Region 21 on Nov. 3, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of 1069 Restaurant Group, LLC and its affiliates. The committee members are: 1. Epic Ootdoor Advertising, Inc. Austin Teeter, Owner 8718 Shimmering Pine Place Sanford, FL 32771 Tel: 321-801-7287 Email: Austin.teeter@epicoutdooradvertising.net 2. United Fire Protection Inc. Chad Norris, President 3247 Tech Drive St. Petersburg, FL 33716 Tel: 727-471-0860 Email: CNorris@united-fire.com 3. Kelly's Foods, Inc. Timothy Kelly, Chief Financial Officer 650 Carter Road Winter Garden, FL 34787 Tel: 407-654-0500 Email: Andy.Kelly@kellysfoods.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About 1069 Restaurant Group 1069 Restaurant Group, LLC is an operator of franchised buffet restaurants. The group is the largest Golden Corral franchisee, with 33 restaurants in Florida and Georgia. 1069 Restaurant Group and its affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-05582) on Oct. 5, 2020. Eric A. Holm, manager, signed the petitions. 1069 Restaurant Group was estimated to have assets of $10 million to $50 million and liabilities of $50 million to $100 million. The Hon. Lori V. Vaughan is the case judge. The Debtors have tapped Shuker & Dorris, P.A., led by R. Scott Shuker, as their counsel and Rosenfield and Company, PLLC as their financial advisor. 2136 FULTON REALTY: Creditors to be Paid in Full from Property Sale ------------------------------------------------------------------- 2136 Fulton Realty LLC filed with the U.S. Bankruptcy Court for the Eastern District of New York a Disclosure Statement for Chapter 11 Plan on September 8, 2020. The Debtor's primary asset is a mixed use property consisting of a vacant commercial space and two residential apartments located at 2136 Fulton Street, Brooklyn, New York. Both residential apartments are occupied with a monthly rent of $2,100 for each of the units. The Plan described in this Disclosure Statement provides the Allowed Claims of creditors to be satisfied from the sale of the Debtor's property. The Debtor anticipates that it will seek approval of the sale to a purchaser under a confirmed chapter 11 plan, provided, however, that if the Debtor determines in good faith that it cannot obtain confirmation of a plan so as to close on the sale of the Property prior to confirmation, pursuant to a final and non-appealable order of the Court, the parties will close pursuant to a Section 363 sale. The Debtor submits that the estimated sale value of $950,000 will enable all creditors to be paid in full and equity holders to retain their interests. The Debtor is proposing an Unimpaired Plan which means that all classes of creditors will receive full payment and equity holders will retain their interests. Each holder of an allowed general unsecured claim will receive full payment from the Plan Fund, on the later of the Effective Date and the date on which such general unsecured claim becomes an allowed claim, or as soon as reasonably practical. The holders of allowed existing equity interests shall retain their interests and will share in any funds left over after paying all classes and fees. The Plan will be funded by the cash available in the Plan Fund. The Plan Fund will be substantially funded by the net sale proceeds of the Sale Transaction, and recoveries from Debtor's causes of action. The Debtor estimates the value of the Property to be approximately $950,000. Such amount substantially exceeds all amounts owing to creditors and estimates for fees and costs to consummate the Plan. A copy of the disclosure statement dated September 8, 2020, is available at https://tinyurl.com/y2p6dl8t from PacerMonitor.com at no charge. Proposed Counsel to the Debtor: A.Y. STRAUSS LLC Eric H. Horn, Esq. Heike M. Vogel, Esq. 10 Times Square, Suite 5022 New York, New York 10018 Tel: (646) 374-3020 Fax: (646) 374-2123 About 2136 Fulton Realty 2136 Fulton Realty LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 20-42296) on June 10, 2020. Eric H. Horn, Esq., of A.Y. STRAUSS LLC, is the Debtor's Counsel. 24 HOUR FITNESS: Nov. 12 Hearing on Disclosure Statement -------------------------------------------------------- A hearing will be held before The Honorable Karen B. Owens United States Bankruptcy Judge, in the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 6th Floor, Courtroom 3, Wilmington, Delaware 19801, on Thursday, Nov. 12, 2020 at 2:00 p.m. (prevailing Eastern Time), to consider entry of an order determining, among other things, that the Proposed Disclosure Statement contains "adequate information" within the meaning ascribed to such term in section 1125 of the Bankruptcy Code and approving the Proposed Disclosure Statement of 24 Hour Fitness Worldwide, Inc., et al. The objections, if any, to approval of the Proposed Disclosure Statement must be filed and served no later than Wednesday, November 4, 2020 at 4:00 p.m. (prevailing Eastern Time). Attorneys for the Debtors: Laura Davis Jones Timothy P. Cairns Peter J. Keane PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street 17th Floor Wilmington, Delaware 19801 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 - and - Ray C. Schrock, P.C. Ryan Preston Dahl Kevin Bostel WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 About 24 Hour Fitness Worldwide 24 Hour Fitness Worldwide, Inc., owns and operates fitness centers in the United States. As of March 31, 2017, the company operated 426 clubs serving approximately 3.6 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. For the 12 months ended March 31, 2017, the company generated total revenue of about $1.4 billion. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 24 Hour Fitness Worldwide and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11558) on June 15, 2020. 24 Hour Fitness was estimated to have $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. The Hon. Karen B. Owens is the case judge. The Debtors tapped Weil, Gotshal & Manges, LLP as lead bankruptcy counsel; Pachulski Stang Ziehl & Jones, LLP as local counsel; FTI Consulting, Inc. as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk, LLC as claims agent. 24 HOUR FITNESS: Unsecureds Will Receive Warrants in Plan --------------------------------------------------------- 24 Hour Fitness Worldwide, Inc., et al., submitted a Plan and a Disclosure Statement. The transactions contemplated in the Plan will maximize value and allow for the Debtors' business to reorganize with a substantially reduced debt load and increasing their cash flow on a go-forward basis. Specifically, the proposed restructuring contemplates, among others, things: * A reduction of the Debtors' funded debt as of the Petition Date of approximately $1.2 billion; * A new money rights offering (the "Rights Offering") pursuant to which eligible holders of Allowed DIP Claims will be distributed subscription rights (the "Subscription Rights") to purchase 48,165,893 shares of New Preferred Equity Interests (as defined herein) issued by the Reorganized Parent (the "Rights Offering Shares"). The Rights Offering Shares issuable pursuant to the Plan shall have an aggregate investment amount of $65.0 million; and * Upon emergence from chapter 11, entry into a senior secured term loan facility in an aggregate initial principal amount of up to $200.0 million and an incremental uncommitted facility of up to $200.0 million (collectively, the "Exit Facility"). The Debtors will use the proceeds of the Rights Offering to, among other things, fund the costs and expenses of these Chapter 11 Cases and for working capital after emergence from chapter 11. Class 3 Prepetition Credit Facility Claims totaling $690,784,861 are impaired. Creditors will recover 2.5% of their claims. Each such Holder shall receive, pursuant to the Restructuring Transactions, its Pro Rata share of 5.0% of the New Common Equity Interests, subject to dilution by the DIP Backstop Equity Issuance, the Warrants, the Management Incentive Plan, and the conversion, if any, of New Preferred Equity Interests into New Common Equity Interests. Class 4 General Unsecured Claims will each receive, pursuant to the Restructuring Transactions, its pro rata share of the Warrants. Class 8 Parent Equity Interests are impaired. On the Effective Date, Parent Equity Interests shall be cancelled, released, and extinguished, and be of no further force or effect, whether surrendered for cancellation or otherwise, and there shall be no distributions for holders of Parent Equity Interests on account of such Interests. The Reorganized Company shall fund distributions under the Plan with (i) cash on hand and (ii) the issuance of the new equity interests, the new debt, and the warrants. A full-text copy of the Disclosure Statement dated Oct. 7, 2020, is available at https://tinyurl.com/y4hzfuh3 from PacerMonitor.com at no charge. Attorneys for Debtors: Ray C. Schrock, P.C. Ryan Preston Dahl Kevin Bostel Kyle R. Satterfield WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Laura Davis Jones (No. 2436) Timothy P. Cairns (No. 4228) Peter J. Keane (No. 5503) PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street 17th Floor Wilmington, Delaware 19801 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 About 24 Hour Fitness Worldwide 24 Hour Fitness Worldwide, Inc., owns and operates fitness centers in the United States. As of March 31, 2017, the company operated 426 clubs serving approximately 3.6 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. For the 12 months ended March 31, 2017, the company generated total revenue of about $1.4 billion. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 24 Hour Fitness Worldwide and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11558) on June 15, 2020. 24 Hour Fitness was estimated to have $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. The Hon. Karen B. Owens is the case judge. The Debtors tapped Weil, Gotshal & Manges, LLP as lead bankruptcy counsel; Pachulski Stang Ziehl & Jones, LLP as local counsel; FTI Consulting, Inc. as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk, LLC as claims agent. 2836 WEST REALTY: Say It Has Proposed Unimpaired Plan ----------------------------------------------------- 2836 West Realty LLC filed with the U.S. Bankruptcy Court for the Eastern District of New York a Chapter 11 Plan and a Disclosure Statement. The Debtor's primary asset is a mixed use property consisting of a vacant commercial space and two residential apartments located at 2836 West 19th Street, Brooklyn, New York. The Property is a four family apartment building which is currently vacant. The building is in a state of disrepair and in need of a complete rehabilitation. The Plan described in this Disclosure Statement provides the Allowed Claims of creditors to be satisfied from the sale of the Debtor's Property. The Debtor anticipates that it will seek approval of the sale to a purchaser under a confirmed chapter 11 plan, provided, however, that if the Debtor determines in good faith that it cannot obtain confirmation of a plan so as to close on the sale of the Property prior to confirmation, pursuant to a final and non-appealable order of the Court, the parties will close pursuant to a Section 363 sale. The Debtor submits that the estimated sale value of $350,000 will enable all creditors to be paid in full and equity holders to retain their interests. The Debtor is proposing an unimpaired plan which means that all classes of creditors will receive full payment and equity holders will retain their interests. Each holder of an Allowed General Unsecured Claim shall receive full payment from the Plan Fund, on the later of the Effective Date and the date on which such General Unsecured Claim becomes an Allowed Claim, or as soon as reasonably practical. The holders of allowed existing equity interests will retain their interests and will share in any funds left over after paying all Classes and fees. The Plan will be funded by the cash available in the Plan Fund. The Plan Fund will be substantially funded by the net sale proceeds of the Sale Transaction, and recoveries from Debtor's causes of action. The Debtor estimates the value of the Property to be approximately $350,000. Such amount substantially exceeds all amounts owing to creditors and estimates for fees and costs to consummate the Plan. A full-text copy of the disclosure statement dated September 8, 2020, is available at https://tinyurl.com/yykannl6 from PacerMonitor.com at no charge. About 2836 West Realty 2836 West Realty LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 20-42297) on June 10, 2020. Proposed counsel to the Debtor: A.Y. STRAUSS LLC Eric H. Horn, Esq. Heike M. Vogel, Esq. 10 Times Square, Suite 5022 New York, New York 10018 Tel: (646) 374-3020 Fax: (646) 374-2123 2MORROWS SOLUTIONS: Taps Somers Team as Real Estate Broker ---------------------------------------------------------- 2morrows Solutions 2day LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to hire Somers Team, an affiliate of Keller Williams, as its real estate broker. The firm will market the Debtor's property located at 1420 S. 20th St., Philadelphia, Pa. Somer Team will receive a commission in the amount of 5 percent of the sale price for a buyer that the firm identifies. If the sale is to a buyer previously identified by the Debtor, the commission will be 2.5 percent. The firm neither represents nor holds any interest adverse to the Debtor and its estate, according to a court filing. The firm can be reached through: Darryl Miller The Somers Team 1405 Frankford Ave #C2 Philadelphia, PA 19125 Telephone: (716) 462-5218 About 2morrows Solutions 2day, LLC 2morrows Solutions 2day, LLC, a Philadelphia, Pa.-based company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 20-13870) on September 25, 2020. The petition was signed by Jacky Veasly, member. At the time of the filing, Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. The Hon. Judge Eric L. Frank oversees the case. Jensen Bagnato, P.C. is Debtor's legal counsel. 4-S RANCH PARTNERS: Hires Macdonald Fernandez as Bankruptcy Counsel ------------------------------------------------------------------- 4-S Ranch Partners, LLC received approval from the U.S. Bankruptcy Court for the Eastern District of California to employ Stephen C. Ferlmann of Macdonald Fernandez LLP as its bankruptcy counsel. Macdonald Fernandez will assist with bankruptcy plan formulation, preparing the schedules and the statement of financial affairs, reviewing monthly operating reports, responding to creditor inquiries, evaluating claims and all services usually performed by such counsel. The firm's hourly rates are: Partners $390 Stephen C. Ferlmann $375 Associate Attorneys $290 Paralegals $100 Prior to the petition date, the firm received the sum of $75,000 as a retainer. The firm is a "disinterested person" as defined by 11 U.S.C. Sec. 101(14) and as required by 11 U.S.C. Sec. 327(a), according to court filings. The firm can be reached through: Reno F.R. Fernandez III, Esq. Macdonald Fernandez LLP 914 Thirteenth Street Modesto, CA 95354 Tel: (209) 521-8100 Fax: (209) 236-0172 Email: reno@macfern.com About 4-S Ranch Partners 4-S Ranch Partners, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). 4-S Ranch Partners filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 20-10800) on March 2, 2020. The petition was signed by Stephen W. Sloan, Debtor's managing member. At the time of filing, Debtor was estimated to have $500 million to $1 billion in assets and $50 million to $100 million in liabilities. Judge Rene Lastreto II oversees the case. Reno F.R. Fernandez III, Esq., at Macdonald Fernandez LLP, is Debtor's legal counsel. The Debtor tapped McGinley & Associates, Inc. as hydrogeological rebuttal expert witness. 4-S RANCH PARTNERS: Hires McGinley as Hydrogeological Consultant ---------------------------------------------------------------- 4-S Ranch Partners, LLC, seeks authority from the U.S. Bankruptcy Court for the Eastern District of California to employ McGinley & Associates, Inc., as hydrogeological consultant to the Debtor. 4-S Ranch Partners requires McGinley to assist with a geochemical evaluation as a supporting task for water banking at the Debtor's properties. McGinley will be paid as follows: Subject Matter Experts $250 Sr. 3rd Party Review $200 Principal $180 Sr. Associate $170 Administration $65 On or about May 20, 2020, McGinley received the amount of $8,000 from Sloan Cattle Company, LLC. Sloan Cattle Company, LLC has agreed to pay for all services rendered by McGinley from its assets that are not part of the Debtor in Possession's estate. The agreement to pay for said services is not condition on Sloan Cattle having any control or input as to the services provided to the Debtor in Possession and is without right to reimbursement. As of August 23, 2020, an outstanding balance of $4,564.77 remains after application of the retainer funds paid by Sloan Cattle. Dwight L. Smith, partner of McGinley & Associates, Inc., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. McGinley can be reached at: Dwight L. Smith McGinley & Associates, Inc. 5410 Longley Ln Reno, NV 89511 Tel: (775) 829-2245 About 4-S Ranch Partners 4-S Ranch Partners, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). 4-S Ranch Partners filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 20-10800) on March 2, 2020. The petition was signed by Stephen W. Sloan, Debtor's managing member. At the time of filing, Debtor was estimated to have $500 million to $1 billion in assets and $50 million to $100 million in liabilities. Judge Rene Lastreto II oversees the case. Reno F.R. Fernandez III, Esq., at Macdonald Fernandez LLP, is Debtor's legal counsel. The Debtor tapped McGinley & Associates, Inc. as hydrogeological rebuttal expert witness. 6TH & CENTER: Seeks to Hire Rental Realty as Property Manager ------------------------------------------------------------- 6th & Center, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Arkansas to hire Rental Realty as its property manager. The firm will manage the Debtor's real property located at 527 Center St., Little Rock, Ark., also known as the Mathis Building. The firm will be paid for the management services it provides to owner on a monthly flat fee equal to 5 percent of gross collected rents. Jordan Haas, a broker at Rental Realty, disclosed in a court filing that the firm neither represents nor holds any interest adverse to the Debtor and its estate. The firm can be reached through: Jordan Haas Rental Realty 200 West Capitol Ave., Ste 1650 Little Rock, AR 72201 About 6th & Center LLC 6th & Center is a single asset real estate as defined in 11 U.S.C. Section 101(51B). It owns a building located at 6th & Center St., Little Rock, Ark., having an appraised value of $1.4 million. 6th & Center filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ark. Case No. 20-12694) on June 23, 2020. In the petition signed by Danny Brickey, member and authorized representative, Debtor disclosed $1,475,100 in assets and $906,701 in liabilities. James F. Dowden, P.A. is Debtor's legal counsel. AE BICYCLE: Seeks Court Approval to Hire Litigation Consultant -------------------------------------------------------------- AE Bicycle Liquidation, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Middle District of North Carolina to hire Kenneth Taylor, Jr., a former employee with personal knowledge of the Debtors' business operations, as consultant for the plan administrator. Mr. Taylor will locate relevant documentation and provide insight based upon his personal knowledge, with respect to litigation in connection with the Chapter 11 cases. The consultant will be paid an hourly rate of $150 to assist the plan administrator. About Advanced Sports Enterprises Advanced Sports Enterprises, Inc., now known as AE Bicycle Liquidation Inc., designs, manufactures and sells bicycles and related goods and accessories. Advanced Sports is a wholesale seller of bicycles and accessories. ASI owns the following bicycle brands and is responsible for their design manufacture and worldwide distributions: Fuji, Kestrel, SE Bikes, Breezer, and Tuesday. Performance Direct, Inc., designs, manufactures and sells bicycles and related goods and accessories and operates a national distribution of these goods under the Performance Bicycle brand through an internet website business via the URL http://www.performancebike.com/ Bitech, Inc., operates 104 retail stores across 20 states under the Performance Bicycle brand related to the sale of bicycles and related good and accessories. The businesses of Performance and Bitech operate in conjunction with each other and they share a number of services and a distribution warehouse. Nashbar Direct, Inc. designs, manufactures and sells bicycles and related goods and accessories under the Bike Nashbar brand through an internet website business via the URL http://www.bikenashbar.com/The businesses of Nashbar also operate in conjunction with Performance and share services and a distribution warehouse. Advanced Sports Enterprises and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Lead Case No. 18-80856) on Nov. 16, 2018. Advanced Sports Enterprises estimated assets of $1 million to $10 million and liabilities of $10 million to $50 million while Advanced Sports, Inc., estimated assets of $100 million to $500 million and liabilities of $50 million to $100 million. Judge Benjamin A. Kahn oversees the cases. The Debtors tapped Northen Blue, LLP and Flaster/Greenberg P.C. as their bankruptcy counsel; D.A. Davison & Co. as investment banker; Clear Thinking Group LLC as financial advisor; and Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. William Miller, the bankruptcy administrator for the Middle District of North Carolina, appointed an official committee of unsecured creditors on Nov. 27, 2018. The committee retained Waldrep LLP and Cooley LLP as legal counsel. ALPHA ENTERTAINMENT: Unsecureds to Recover 8% to 12% in Plan ------------------------------------------------------------ Alpha Entertainment LLC submitted a Plan and a Disclosure Statement. The Plan provides for the disposition of the Debtor's assets and the distribution of the proceeds in accordance with the priorities and requirements of the Bankruptcy Code. As of the date of the Disclosure Statement, the assets are largely cash and the retained causes of action. On August 7, 2020, the Court entered an order approving the sale of substantially all of the Debtor's assets to Alpha Opco for (i) a cash purchase price of $15,000,000, (ii) assumption of various and specified liabilities related to the Debtor's business and assets, and (iii) cure amount satisfaction of up to $9,200,000 for contracts assumed and assigned to Alpha Opco in accordance with the Sale Order. The sale of certain causes of action/claims against the Estate, listed on Schedule 2.2(k) to the Alpha Opco asset purchase agreement, were specifically excluded, while other causes of action/claims were included in the purchase of substantially all of the Debtor's assets. The Sale successfully closed on August 21, 2020 and, in connection with the closing of the Sale, proceeds from the sale were used to satisfy the Debtor's obligations under the Prepetition Note. The material terms of the Plan: * All Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Priority Tax Claims, Allowed Secured Claims and Allowed Priority Non-Tax Claims will be paid or otherwise satisfied in full as required by the Bankruptcy Code and provided for in the Plan, unless otherwise agreed to by the Holders of such Claims and the Post-Effective Date Debtor. * Holders of Allowed General Unsecured Claims will receive their pro rata share of the General Unsecured Claim Distribution, unless less favorable treatment is otherwise agreed to by the Post-Effective Date Debtor and the Holders of such Claims. Unsecured claims owed $38 million to $57 million will recover 8 percent to 12 percent in the Plan. * Holders of Subordinated Claims will not be entitled to any distribution or recovery on account of such Claims. * As of the Effective Date, all Interests of any kind will be cancelled, and the Holders thereof will not receive or retain any property, interest in property or consideration under the Plan on account of such Interests. A full-text copy of the Disclosure Statement dated Sept. 30, 2020, is available at https://tinyurl.com/y57px32u from PacerMonitor.com at no charge. A full text copy of the Amended Disclosure Statement filed Nov. 4, 2020, is available at: https://www.pacermonitor.com/view/F5VXGHY/Alpha_Entertainment_LLC__debke-20-10940__0503.0.pdf?mcid=tGE4TAMA A full-text copy of the Notice dated Sept. 30, 2020, is available at https://tinyurl.com/yyeae8ur from PacerMonitor.com at no charge. Counsel to the Debtor: Michael R. Nestor (mnestor@ycst.com) Matthew B. Lunn (mlunn@ycst.com) Kenneth J. Enos (kenos@ycst.com) Shane M. Reil (sreil@ycst.com) Matthew P. Milana (mmilana@ycst.com) YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 About Alpha Entertainment Alpha Entertainment LLC, which does business as the "Xtreme Football League" -- https://www.alphaentllc.com/ -- is a professional American football league. The XFL kicked off with games beginning in February 2020. The XFL offered fast-paced, three-hour games with fewer play stoppages and simpler rules. The XFL featured eight teams, 46-man active rosters, and a 10-week regular season schedule, with a postseason consisting of two semifinal playoff games and a championship game. The eight XFL teams were the DC Defenders, the Dallas Renegades, the Houston Roughnecks, the Los Angeles Wildcats, the New York Guardians, the St. Louis BattleHawks, the Seattle Dragons, and the Tampa Bay Vipers. Alpha Entertainment LLC, based in Stamford, CT, filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-10940) on April 13, 2020. The Hon. Laurie Selber Silverstein presides over the case. In its petition, the Debtor was estimated to have $10 million to $50 million in both assets and liabilities. The petition was signed by John Brecker, independent manager. The Debtor hired Young Conaway Stargatt & Taylor, LLP, as counsel; and Donlin Recano & Company, Inc., as claims agent and administrative advisor. ALPHA ENTERTAINMENT: Wins OK to Solicit Votes on Plan ----------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that XFL's former owner got court approval to solicit creditors' votes on its liquidation plan, one of the last steps to dissolving what remains of the professional football league's bankruptcy estate. The amended Chapter 11 plan would appoint an administrator to liquidate and distribute the remaining assets of Alpha Entertainment LLC. It would pay secured and priority claims in full. Unsecured creditors would recover 8% to 12% of their claims, estimated to be between $38 million and $57 million. Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware, on Wednesday, November 4, 2020, approved Alpha to solicit votes. About Alpha Entertainment Alpha Entertainment LLC, which does business as the "Xtreme Football League" -- https://www.alphaentllc.com/ -- is a professional American football league. The XFL kicked off with games beginning in February 2020. The XFL offered fast-paced, three-hour games with fewer play stoppages and simpler rules. The XFL featured eight teams, 46-man active rosters, and a 10-week regular season schedule, with a postseason consisting of two semifinal playoff games and a championship game. The eight XFL teams were the DC Defenders, the Dallas Renegades, the Houston Roughnecks, the Los Angeles Wildcats, the New York Guardians, the St. Louis BattleHawks, the Seattle Dragons, and the Tampa Bay Vipers. Alpha Entertainment, based in Stamford, CT, filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-10940) on April 13, 2020. The Hon. Laurie Selber Silverstein oversees the case. In its petition, the Debtor was estimated to have $10 million to $50 million in both assets and liabilities. The petition was signed by John Brecker, independent manager. The Debtor hired Young Conaway Stargatt & Taylor, LLP as counsel. Donlin Recano & Company, Inc., is the claims agent and administrative advisor. AMERICAN TIMBER: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The Office of the U.S. Trustee on Nov. 3 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of American Timber Marketing Group, LLC. About American Timber Marketing Group Based in Nallen, W. Va., American Timber Marketing Group, LLC is a privately held company in the hardwood lumber business. American Timber Marketing Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W. Va. Case No. 20-20341) on Sept. 24, 2020. At the time of the filing, the Debtor had total assets of $1,005,279 and liabilities of $1,221,883. Judge B. Mckay Mignault oversees the case. Roop Law Office, LC is the Debtor's legal counsel. APEX PARKS: PLIF Entitled to Rescind Insurance Policy, Court Rules ------------------------------------------------------------------ In the case captioned Protective Life Insurance Company v. Apex Parks Group, LLC, No. 1180508 (Ala.), Protective took an appeal from a judgment entered on a jury verdict rendered in the Jefferson Circuit Court against Protective and in favor of Apex Parks Group, LLC in the amount of $11,495,890.41. Upon review, the Supreme Court of Alabama reversed the judgment and render a judgment for Protective. According to the Court, Protective demonstrated that Apex CEO Alexander Weber made a material misrepresentation and Apex failed to introduce substantial evidence to the contrary. Protective was entitled to rescind the insurance policy, which was a complete defense to Apex's claims of breach of contract. Thus, the trial court erred in denying Protective's motions for a judgment as a matter of law. Apex, a California-based corporation, owns and operates moderately sized amusement parks, water parks, and family-entertainment centers nationwide. Apex's founder and chief executive officer was Weber, who had possessed 43 years' experience in the industry and who was critical to Apex's success. Because of Weber's importance, in early 2016 Apex sought a "key-man" insurance policy on Weber. Protective is a Birmingham-based insurance company owned by the Dai-ichi Corporation. Apex applied for key-man insurance for Weber with Protective in March 2016; Apex used an insurance broker to aid in the application process. At that time, Weber was 64 years old. The initial premium quote provided to Apex on the insurance application was $40,054.33, contingent upon approval by Protective's underwriters. On March 2, 2016, Protective had Weber interviewed by a paramedical professional to gain information about his medical history. Weber answered several detailed questions, and in the process he revealed that he had high blood pressure, high cholesterol, and that he had had a "left bundle branch block" ("LBBB") since childhood. Protective's medical expert, Dr. Vance Plumb explained that if one has an LBBB, "you are more likely to have heart disease. If you have heart disease, you are somewhat more likely to have atrial fibrillation." Both Dr. Plumb and Apex's medical expert, Dr. Hugh McElderry, testified that an LBBB is a serious heart condition. Weber also disclosed that both his father and his mother had died of heart attacks at ages 47 and 56, respectively. On May 18, 2016, Protective issued the insurance policy to Apex for $10 million in coverage at a Table 2 premium; the policy included a cover letter, the policy schedule, policy provisions, endorsements or riders to the policy, and other information. When Protective e-mailed the policy to Apex, it explained that three "delivery" documents were included with the policy that needed to be signed in order "[t]o bind the Key-Man Life Insurance Policy for Al Weber." The first document was an "Amendment to Application with Health Statement" ("amendment") that the e-mail explained would "acknowledg[e] that the premium was increased for underwriting risk factors to be signed by Al Weber and Doug Honey on behalf of Apex." The second document was a notice regarding "save-age" dating in the policy that had to be signed by both Weber and Honey. This document specifically noted that "coverage begins only when the policy is delivered and the first premium is paid." The third document was a policy-delivery receipt to be signed by Honey. Weber and Honey signed the amendment and the notice regarding "save-age" on May 31, 2016. On Nov. 8, 2016, while on vacation with his wife, Weber died. The death certificate listed the cause of death as "sudden cardiac death" due to "ischemic heart disease." All the medical experts agreed at trial that Weber's AFib did not cause his death. Shortly after Weber's death, Apex submitted its claim under the policy for the $10 million benefit. Protective then began a contestable-claim investigation. The investigation was initiated by Protective compliance analyst Janice Wisner, who had a third-party administrator obtain Weber's medical records. Those records included files from several doctors, which revealed Weber's AFib diagnosis and the treatment he received for it. The review of Apex's claim was then submitted to Protective underwriter Edmund Peña, one of two Protective underwriters who were specifically assigned to review contestable claims. On May 16, 2017, Apex sued Protective in the Jefferson Circuit Court asserting claims of breach of contract and bad faith in failing to investigate all bases supporting coverage and in making false promises that the claim would be paid. Protective answered the complaint and asserted a counterclaim seeking rescission of the policy based upon material misrepresentations during the application process. Protective filed several summary-judgment motions, all of which the trial court denied. A two-week trial ensued. At the close of Apex's case, Protective moved for a judgment as a matter of law, contending that it had conclusively demonstrated all the elements of rescission under California law. The trial court denied the motion. Protective moved again for a judgment as a matter of law at the close of all the evidence, and the trial court again denied the motion. After closing arguments, Protective stated that it had an objection to a portion of the trial court's jury instruction on materiality. The trial court determined that it would give the jury instructions and then it would hear any exceptions the parties had to those instructions. After the trial court completed giving its instructions to the jury, Protective registered its objection. On Sept. 21, 2018, the jury rendered its verdict. The jury found Protective liable for breach of contract but not liable for bad faith. The verdict form specified that if the jury found Protective liable for breach of contract, Apex would be "entitled to the policy benefit of $10,000,000." The trial court entered a judgment for $10 million plus applicable prejudgment interest of $1,495,890.41, for a total amount of $11,495,890.41. Protective renewed its motion for a judgment as a matter of law based on rescission. Protective also moved, in the alternative, for a new trial based on its objection to the jury instruction. The trial court denied those motions without comment. Protective appealed. At the trial, Joseph Schlesser, Apex's underwriting expert, testified that he found the amendment confusing and not like other health-statement documents used in the insurance industry. Protective argued that Schlesser's premise is flatly contradicted by Weber's May 2016 medical records. Instead, those medical records show that Weber's doctors were encouraging, and that Weber was seeking, further treatment for his AFib. Weber's notes are certainly corroborative evidence, but the medical records alone -- which Protective would have requested had it been aware of Weber's May 2016 physician consultations -- plainly indicated that Weber's doctors had encouraged, and that Weber was going to seek, further treatment from an AFib subspecialist. In other words, the actions of both Weber and his doctors in May 2016 belied any notion that Weber's AFib had "spontaneously resolved." Based on this information, the only reasonable conclusion is that Protective would have postponed the application to await further developments regarding Weber's AFib condition. Waiting would have revealed the subsequent developments in June 2016 we previously discussed, and Schlesser conceded that information from June and beyond would have required: (1) a postponement of the application and (2) the ultimate reissuance of the policy at a higher rating. Thus, because Schlesser's assessment was based on the erroneous assumption that Weber's May 2016 medical records reflected that his AFib condition had spontaneously resolved, his testimony did not provide substantial evidence that Protective nonetheless would have issued the policy at a Table 2 rating if it had been made aware of Weber's May 2016 physician consultations at that time. Accordingly, Weber's misrepresentation concerning those physician consultations unquestionably was material to Protective. In sum, the Court said the amendment was not ambiguous and the representation in the health statement about physician consultations was separate from the representation that the applicant was in the same health. Therefore, because Weber indisputably knew he had consulted multiple physicians in May 2016 and yet signed the amendment on May 31, 2016, without disclosing those consultations, Weber misrepresented his medical history to Protective. Furthermore, because the May 2016 medical records revealed that both Weber and his doctors believed he needed further treatment for his AFib condition, Weber's misrepresentation clearly was material to Protective's policy offer to Apex. Accordingly, the Alabama Supreme Court concluded that the record unequivocally demonstrated that Weber made a material misrepresentation to Protective by signing the amendment on May 31, 2016, without revealing the fact of his multiple physician consultations during that month. A copy of the Court's Opinion is available at https://bit.ly/3lXfy5V from Leagle.com. About Apex Parks Group and TZEW Holdco TZEW Holdco, LLC -- http://www.apexparksgroup.com-- and its affiliates are privately held owners and operators of amusement parks, resorts, and family entertainment centers across the United States. Founded in 2014, the companies' business strategy focuses on the acquisition, operation, growth, and development of various properties into economical, family-friendly entertainment and amusement venues. The companies locations include year-round family entertainment centers, water parks, and amusement parks in states across the country, including California, Texas, and Florida. Each of the companies' locations provides affordable, family-friendly entertainment to local markets and features numerous attractions, including rides, games, and events. TZEW Holdco and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10910) on April 8, 2020. At the time of the filing, the Debtors had estimated assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. The Debtors tapped Pachulski Stang Ziehl & Jones, LLP as their legal counsel, Imperial Capital, LLC as an investment banker and financial advisor, Paladin Management Group, LLC as restructuring advisor, and Kurtzman Carson, LLC as claims and noticing agent. The Debtors hired Grant Thornton, LLP, to provide tax compliance services. The U.S. Trustee for Regions 3 and 9 appointed a committee of unsecured creditors on April 23, 2020. The committee is represented by Kelley Drye & Warren LLP. ARTISAN BUILDERS: Hires My Home Group as Real Estate Broker ----------------------------------------------------------- Artisan Builders, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Arizona to employ My Home Group Real Esate, LLC, as real estate broker to the Debtor. Artisan Builders requires My Home Group to market and sell the Debtor's real properties known as: i. 3616 N. 12th Street, Phoenix, Arizona ii. 2250 N. 28th Street, Phoenix, Arizona ii. 7047 E. Minnezona, Phoenix, Arizona My Home Group will be paid a commission of 6% of the sales price. Nancie Dion, agent of My Home Group Real Esate, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. My Home Group can be reached at: Nancie Dion MY HOME GROUP REAL ESATE, LLC 8360 E Raintree Dr. Suite 205 Scottsdale, AZ 85260 Tel: (480) 628-2372 About Artisan Builders Artisan Builders, LLC, located at 17916 N. 93rd Street, Scottsdale, Arizona, is a full service general contractor specializing in custom homes. Artisan Builders sought Chapter 11 protection (Bankr. D. Ariz. Case No. 20-07501) on June 24, 2020. In the petition signed by James Guajardo, manager, the Debtor was estimated to have assets and liabilities in the range of $1 million to $10 million. The Debtor tapped Richard W. Hundley, Esq., at The Kozub Law Group, PLC, as counsel. ASARCO LLC: 9th Cir. Upholds ARC Cleanup Liability -------------------------------------------------- In June 2009, ASARCO LLC agreed to settle with the government and enter into a consent decree to clean up environmental contamination at several sites, including a Superfund Site in East Helena, Montana. Asarco then brought a contribution action under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") against Atlantic Richfield Company, LLC. Following a bench trial, the district court entered judgment in favor of Asarco, finding that Asarco had incurred $111.4 million in necessary response costs for the cleanup of the Site and that Atlantic Richfield was responsible for 25% of that sum. Atlantic Richfield appealed. Upon review, the U.S. Court of Appeals for the Ninth Circuit held that the district court erred in its determination of the necessary response costs incurred by Asarco, but the court did not err in allocating 25% liability to Atlantic Richfield. The Ninth Circuit vacated and remanded in part, and affirmed in part. Asarco and its predecessors owned and operated a lead smelting facility at the Site from 1888 to 2001. Asarco's lead smelting facility was the largest operation at the Site. This operation recovered lead and other metals by smelting a variety of foreign and domestic concentrates, ores, fluxes, and other non-ferrous, metalbearing materials and byproducts. Those materials contained arsenic concentrations as high as 190,000 parts per million. The smelting operation produced slag as a waste product, which contained small residual quantities of metals and arsenic. It is undisputed that Asarco "released significant amounts of arsenic into the environment" from its smelting facility. Atlantic Richfield is the successor in interest to Anaconda, which leased a portion of the Site from Asarco to construct and operate a zinc fuming plant. Using a blast furnace fueled with coal, Anaconda reprocessed slag that it purchased from Asarco to recover zinc. Anaconda used and produced several arsenic-bearing materials in its fuming operation, albeit with a lower arsenic concentration than Asarco's primary materials. Anaconda operated the zinc fuming plant from 1927 to 1972, at which point it sold the plant to Asarco. Asarco then operated the zinc fuming plant for another decade. In 1984, the Environmental Protection Agency added the Site to the CERCLA National Priorities List, targeting it for environmental remediation. The primary environmental concern at the Site was arsenic contamination of the groundwater. In the years that followed, Asarco entered into a series of agreements with the EPA to begin the process of remediation. In 1990, Asarco and the EPA finalized a settlement agreement and consent decree in CERCLA litigation concerning the contamination of the process ponds at the Site. Pursuant to the consent decree, Asarco agreed to undertake a cleanup of the process ponds, which it substantially completed by 1997. In 1998, Asarco and the EPA entered into another settlement agreement and consent decree, this time resolving claims brought by the EPA under the Resource Conservation and Recovery Act and the Clean Water Act. The settlement did not raise any claims under CERCLA. On August 9, 2005, Asarco filed a Chapter 11 bankruptcy petition. In connection with the bankruptcy proceedings, the United States, the State of Montana, and the State of Montana Department of Environmental Quality all filed proofs of claim for Asarco's projected liability under CERCLA. Asarco, the United States, and the State of Montana reached two complementary settlement agreements and consent decrees in February and June 2009, resolving Asarco's outstanding environmental liabilities at several Montana sites, including the Site at issue in this case. The June 2009 consent decree established a custodial trust for the affected sites, and the Montana Environmental Trust Group ("METG") was appointed as the custodial trustee for the East Helena Site. The June 2009 consent decree also designated the EPA as the lead agency for the Site, placing it in charge of selecting, approving, and authorizing all work performed and funds expended by METG. Pursuant to the June 2009 consent decree, Asarco paid approximately $111.4 million1 for cleanup of the East Helena Site -- accounting for comprehensive damage done to the Site by all responsible parties. That sum included: (a) $99.294 million into the East Helena Custodial Trust Cleanup Account for a groundwater remedy; (b) $6,403,743 toward the establishment of the Custodial Trust and the funding of the Custodial Administrative Account to be used for trust administration expenses; (c) $706,000 to the U.S. Department of the Interior for natural resource restoration and future oversight costs for the Site; and (d) $5 million to the State of Montana for compensatory natural resource damages at the Site. METG has begun its remediation work at the Site. So far, it has fully implemented three interim measures to curb the spread of contaminants and further environmental degradation at the Site. METG also has implemented institutional controls for the Site and the surrounding areas, designed to prevent property owners from using their domestic water wells to avoid contact with contaminated groundwater. METG proposed one additional future project: capping the portion of the slag pile at the Site that consists of unfumed slag. METG has not instated and does not plan to install a pump-and-treat system. As of the most recent accounting available, METG had spent a little less than half of the trust funds at its disposal, leaving it with approximately $50 million for further remediation efforts. Atlantic Richfield's expert estimated the ongoing costs for operations and maintenance at $9.2 million, and METG estimated the cost of covering the unfumed slag at $3.7 million. Adding those sums to the dollar amount already expended by METG, the total cleanup cost for the Site would approximate $61.4 million. Asarco contends that Atlantic Richfield's expert vastly understates how costly the cleanup would be. Asarco's expert opined that METG's proposed remedies would be insufficient to address the groundwater contamination and that more substantial remediation work would be necessary. In 2012, Asarco brought this contribution action against Atlantic Richfield under CERCLA sections 107 and 113. The district court granted summary judgment in favor of Atlantic Richfield, finding the action barred by the statute of limitations. Asarco appealed, and the Ninth Circuit concluded that Asarco's contribution claim was, in fact, timely. The Ninth Circuit vacated the district court's summary judgment order and remanded for further proceedings before the trial judge. On remand, the district court conducted an eight-day bench trial, weighted heavily toward expert testimony. Following trial, the district court issued detailed findings of fact and conclusions of law and entered judgment in favor of Asarco. The court found that Asarco had expended $111,403,743 in necessary response costs for cleanup of the Site and that Atlantic Richfield was liable for 25% of those costs, i.e., $27,850,936. The court also granted an additional $1 million award to Asarco, based on its findings as to Atlantic Richfield's failure to cooperate with the authorities and its misrepresentations to the EPA and to Asarco. Atlantic Richfield moved to alter or amend the judgment, but the district court denied the motion. The appeal timely followed. Atlantic Richfield argued that the district court erred in finding that Asarco incurred $111.4 million in necessary response costs for the environmental cleanup of the Site, because that sum improperly included (i) costs that had not yet been, and might never be, incurred; and (ii) costs that were not necessary to protect human health and the environment. Atlantic Richfield contends those costs are unrecoverable under CERCLA, and that the response costs eligible for contribution should be limited to the $61.4 million that it represents have been incurred so far to remediate the Site. The district court found the full $111.4 million settlement amount to be necessary response costs eligible for contribution. While the Ninth Circuit does not question the district court's finding that further remedial action may be necessary in the future, its forecast was not adequately tethered to any concrete evidence in the record. According to the Ninth Circuit, if, as the district court concludes, "something more substantial will need to be done," a party in Asarco's position ultimately can recover the corresponding response costs from its fellow responsible parties. But until further information is known about the nature and costs of that "something more," those future costs are not eligible for contribution. In the meantime, the contribution-seeker can pursue (i) contribution for those necessary response costs that have been incurred to date, and (ii) a declaratory judgment to establish liability and a contribution allocation for those costs that have not been incurred yet, but may be incurred in the future. To the extent the parties disagree about whether the costs of a pump-and-treat system (or other yet-to-be-incurred costs) would be "necessary," the Ninth Circuit did not resolve the parties' dispute. Because such costs have not been incurred, they cannot be awarded even if they satisfy the remaining requirements for contribution eligibility. For these reasons, the Ninth Circuit vacated the district court's finding that the full $111.4 million settlement amount was eligible for contribution and remand for further consideration of what necessary response costs were actually incurred within the meaning of CERCLA. On the issue of Atlantic Richfield's responsibility, the Ninth Circuit held that the district court did not err in devising an equitable allocation of liability for the Site cleanup. The Ninth Circuit concluded that the district court did not clearly err in its factual findings supporting its allocation decision. The district court, in a 95-page order, made extensive findings about the historical use and contamination of the Site by Asarco and Atlantic Richfield. It described in detail each party's operations at the Site; their respective uses and releases of arsenic, to the extent knowable from the historical records; their efforts, and failures, to prevent environmental contamination; and their interactions with the government concerning accountability and remediation. The appeals case is in re: ASARCO LLC, a Delaware corporation, Plaintiff-Appellee, v. ATLANTIC RICHFIELD COMPANY, LLC, a Delaware corporation, Defendant-Appellant, and BRITISH PETROLEUM, PLC, a United Kingdom Corporation; AMERICAN CHEMET CORPORATION, a Montana Corporation, Defendants, No. 18-35934 (9th Cir.). A copy of the Court's Opinion is available at https://cutt.ly/2ghSCFl from Leagle.com. Shannon Wells Stevenson (argued), Benjamin B. Strawn , and Kellen N. Wittkop , Davis Graham & Stubbs LLP, Denver, Colorado; Elisabeth S. Theodore and Stephen K. Wirth , Arnold & Porter Kaye Scholer LLP, Washington, D.C.; for Defendant-Appellant. Gregory Evans (argued), McGuireWoods LLP, Los Angeles, California; Benjamin L. Hatch , McGuireWoods LLP, Washington, D.C.; Kris A. McLean , Kris A. McLean Law Firm PLLC, Missoula, Montana; Rachel H. Parkin , Milodragovich Dale & Steinbrenner P.C., Missoula, Montana; for Plaintiff-Appellee. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C. represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Asarco Incorporated and Americas Mining Corporation's Seventh Amended Plan of Reorganization for the Debtors became effective and the ASARCO Asbestos Personal Injury Settlement Trust was created and funded with nearly $1 billion in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated ASARCO LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ASCENA RETAIL: Seeks to Hire Deloitte Tax to Provide Tax Services ----------------------------------------------------------------- Ascena Retail Group, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Deloitte Tax LLP as their tax services provider. Deloitte Tax will provide these tax services for the Debtors: a. Restructuring SOW: Pursuant to the terms of the Restructuring SOW, Deloitte Tax will provide certain services related to debt discharge and other tax issues with respect to the Debtors' potential restructuring and/or potential chapter 11 filing, including: i. Understanding legal entity structure and operations, including active and inactive entities; ii. Preparing an Internal Revenue Code (IRC) Section 382 Ownership Shift Analysis to compute the Debtors' cumulative ownership shift; iii. Computing the net operating losses allocable to consolidated group members pursuant to methodology described in Sec. 1.1502-21(b)(2)(iv); iv. Assisting in the calculation of tax basis in assets by legal entity; v. Assisting in the calculation of tax basis in the stock in each of Debtors' subsidiaries or other entity interests, including understanding any deferred intercompany transactions or excess loss accounts; vi. Preparing an attribute reduction analysis and implications on tax profile, including: (1) Advising the Debtors in consultations with their legal and financial advisors on the cash tax effects of restructuring, bankruptcy, and the post-restructuring tax profile, including transaction costs and/or plan of reorganization tax costs and the cash tax effects of the chapter 11 filing and emergence transaction. This includes obtaining an understanding of the Debtors' financial advisors' valuation model to consider the tax assumptions contained therein; (2) Advising the Debtors regarding the restructuring and bankruptcy emergence process from a tax perspective, including analyzing various structuring alternatives and modification of debt; (3) Advising the Debtors on the cancellation of debt income for tax purposes under IRC section 108, including cancellation of debt income generated from a restructuring, bankruptcy emergence transaction, and/or modification of the debt; (4) Advising the Debtors on post-restructuring tax attributes and post-bankruptcy tax attributes (tax basis in assets, tax basis in subsidiary stock, and net operating loss carryovers) available under the applicable tax regulations and the reduction of such attributes based on the Debtors' operating projections; including a technical analysis of the effects of Treasury Regulation Section 1.1502-28 and the interplay with IRC sections 108 and 1017; (5) Advising the Debtors on net built-in gain or net built-in loss position at the time of 'ownership change' (as defined under IRC section 382), including limitations on use of tax losses generated from post-restructuring or post-bankruptcy asset or stock sales; and (6) If eventually applicable, advising the Debtors on the effects of tax rules under IRC sections 382(l)(5) and (l)(6) pertaining to the post-bankruptcy net operating loss carryovers and limitations on their utilization, and the Debtors' ability to qualify for IRC section 382(l)(5). vii. Advising the Debtors with their evaluation of the proposed emergence structure and tax considerations needed to effectuate efficient go forward structure (e.g., taxable vs. tax-free and state planning), including some required legal entity simplification to effectuate emergence transaction and understanding current intercompany balances between the various entities and potential settlement of such intercompanies via distributions, contributions, cancellations, and forgiveness. b. Strategic Tax Review SOW: Pursuant to the Strategic Tax Review SOW, Deloitte Tax will provide Strategic Tax Review advisory services to the Debtors, including: (i) analyzing the impact of t ax reform items, including the IRC Sec. 163(j) Interest Expense Limitation; and (ii) analyzing the applicability of capitalizing interest expense pursuant to IRC Sec. 266. Deloitte Tax will also provide an interest disallowance study for the Debtors for the 2019 tax year, which may involve, among other things, analyses of the Debtors' debt contracts, inventory, and prepaid expenditures. c. Federal Tax Return SOW: Pursuant to the Federal Tax Return SOW, Deloitte Tax will provide the following services: (i) providing a review of the federal consolidated tax return for the year ended July 27, 2019; (ii) preparing certain international tax forms, including form 5471, form 8858, and form 8865; and (iii) preparing and signing the following year-ended July 27, 2019 state and local tax returns identified in Exhibit A attached to the Federal Tax Return SOW. d. August 2019 Tax Advisory SOW: Pursuant to the terms of the August 2019 Tax Advisory SOW, Deloitte Tax will provide certain tax advisory services during the period through August 27, 2020, including: (i) advising the Debtors related to certain U.S. international tax implications of 'Project Viking;' (ii) advising the Debtors in matters related to updated tax reform regulatory provisions and the related impact on the Debtors' tax profile; (iii) advising the Debtors regarding the U.S. tax implications of contemplated changes to the Debtors' foreign sourcing operations; and (iv) advising the Debtors on matters regarding the Debtors' foreign structure and tax implications of proposed structural changes. e. ASC 842 SOW: Pursuant to the terms of the ASC 842 SOW, Deloitte Tax will perform the following services: (i) providing tax advisory services in connection with the potential tax considerations associated with the Debtors' adoption of ASC 842, Accounting for Leases, for financial accounting purposes; (ii) providing comments and observations as it relates to the Debtors' prepared Form 1128, Application to Adopt, Change, or Retain a Tax Year; (iii) providing tax advisory services for Revenue Recognition with respect to the Debtors' adoption of ASC 606, Revenue From Contracts with Customers, and for the tax year ended August 3, 2019 related to revenue from its Loyalty Program, Territory/Licensee Fees, and Bounty/Financing Fees; (iv) analyzing the Debtors' accounting method related to the recognition of their liability for taxes paid by their foreign Hong Kong entity, AGSHK, and understanding the extent to which taxes are fixed and determinable at year and; and (v) preparing and filing automatic Form(s) 3115, Application for Change in Accounting Method, for the year ending August 3, 2019, to deduct the fixed and determinable portion of the foreign taxes. f. PR Tax Advisory SOW: Pursuant to the PR Tax Advisory SOW, Deloitte Tax shall provide tax advisory services in connection with Puerto Rican income, property, municipal tax, sales and use tax, or any other tax matter on an as-requested basis during the period through December 31, 2020. g. PR Tax Return SOW: Pursuant to the PR Tax Return SOW, Deloitte Tax shall prepare the following Puerto Rican statutory tax returns: (i) 7-27-2019 Puerto Rico Corporation Income Tax Return; (ii) 7-27-2020 Puerto Rico Estimated Tax Calculation; (iii) 2019 Puerto Rico Annual Corporation Report; (iv) 2019 Puerto Rico Personal Property Tax Return; (v) 2020 Puerto Rico Personal Property Estimated Tax; and (vi) 2020-21 Volume of Business Declaration (Barceloneta and San Juan). Deloitte Tax shall also prepare quarterly estimated tax payments for the income tax return and personal property tax return based on 100 percent of prior year tax liability. h. PR Tax Credit SOW: Pursuant to the PR Tax Credit SOW, Deloitte Tax shall provide tax advisory services in connection with assisting the Debtors in attempting to obtain a Tax Credit for Sales and Use Tax of approximately $100,000, as estimated by the Debtors, including the following: (i) meeting and discussing with the corresponding Puerto Rican tax authority office to find out the reason for the tax debt assessed and what supporting evidence must be submitted to clear those debts; (ii) requesting corresponding information to the Debtors; (iii) drafting, and upon management review and approval, submitting, the requested information to the corresponding office; and (iv) following up on processing of evidence submitted. Deloitte Tax will charge the following hourly rates: Restructuring SOW National Tax Specialist $1,016 Partner/Principal/Managing Director $956 Senior Manager $863 Manager $739 Senior Consultant $626 Consultant $518 Junior Consultant $491 Strategic Tax Review SOW and the ASC 842 SOW Partner/Principal/Managing Director $545 Senior Manager $460 Manager $395 Senior $310 Staff $250 Federal Tax Return SOW Partner/Principal/Managing Director $485 Senior Manager $435 Manager $365 Senior $305 Staff $250 August 2019 Tax Advisory Services SOW Partner/Principal/Managing Director $545 Senior Manager $460 Manager $395 Senior $310 Staff $250 Pursuant to the PR Tax Return SOW, unless otherwise agreed to in writing by the Debtors, Deloitte Tax will charge the Debtors a fixed fee of $12,075 for the preparation of the statutory tax returns and at the hourly rates set below for the preparation of minimum residual value, tax depreciation calculation and filing of tax returns: Partner/Principal/Managing Director $610 Senior Manager $545 Manager $460 Senior Consultant/Senior Staff $382 Consultant/Staff $310 Analyst/Associate $290 Other Support/Intern $200 Deloitte Tax's fees in total shall not exceed, but may be less than: (a) $10,000, pursuant to the terms of the PR Tax Advisory SOW; and (b) $15,000, pursuant to the terms of the PR Tax Credit SOW. Partner/Principal/Managing Director $610 Senior Manager $545 Manager $460 Senior Consultant/Senior Staff $382 Consultant/Staff $310 Analyst/Associate $290 Other Support/Intern $200 In the ninety (90) days prior to the Petition Date, the Debtors paid Deloitte Tax approximately $563,650, including retainer amounts, for services performed and/or to be performed prior to such date. Deloitte Tax is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code, according to court filings. The firm can be reached through: Elias Tzavelis Deloitte Tax LLP 30 Rockefeller Plaza New York, NY 10112-0015 Phone: +1 212 436 7815 Email: etzavelis@deloitte.com About Ascena Retail Group Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Visit http://www.ascenaretail.com/for more information. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. On July 23, 2020, Ascena Retail Group and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities. The Hon. Kevin R. Huennekens is the case judge. The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as bankruptcy counsel, Guggenheim Securities, LLC, as financial Advisor, and Alvarez and Marsal North America, LLC as restructuring advisor. Prime Clerk, LLC is the claims agent. ASTERIA EDUCATION: Drops Fight vs SBA; To Sell to Lender -------------------------------------------------------- Patrick Danner of San Antonio Express News reports that San Antonio-area education software developer Asteria Education Inc. has withdrawn its fight with the SBA over a coronavirus relief loan. Despite a failed attempt in April 2020 to challenge the Small Business Administration's policy excluding bankrupt companies from getting a Paycheck Protection Program loan, Asteria Education Inc. didn’t give up on its bid to land a loan. The education software developer received approval for a $457,433 loan from New York-based MBE Capital Partners in July 2020. The lender had teamed up in May with an insurance company majority-owned by basketball legend Earvin "Magic" Johnson to make $100 million in loans to minority- and women-owned businesses through the Paycheck Protection Program. Asteria asked for court authority to borrow the money to pay its September rent and meet its payroll obligations. The SBA, once again, objected, arguing Asteria "sought funding from a program for which it knew it was not eligible." But at a hearing mid-September on the request, Asteria lawyer Paul Keiffer told U.S. Bankruptcy Judge Craig Gargotta the company "made the decision to forgo the fight over the SBA-loan proceeds issue." Asteria was planning to wire the funds back to MBE Capital Partners and then drop its motion for court approval, Keiffer said. One of Asteria's creditors, meanwhile, stands to acquire the company's assets after no third-party bid was accepted by the deadline deadline. Aavin Mezzanine Fund L.P., a private equity fund based in Cedar Rapids, Iowa., submitted an asset purchase agreement for $4.5 million. Asteria owes the fund nearly $6 million. "The business will continue," Keiffer said in an interview after the hearing, which was conducted remotely. "It's not going to go away." About Asteria, Inc. Asteria, Inc., which develops software and other materials for teachers to prepare students for placement exams, filed a Chapter 11 bankruptcy petition (Bankr. D. Ariz. Case No. 17-05457) on May 17, 2017. Charles R. Hyde, Esq., at The Law Offices of C.R. Hyde, PLC serves as bankruptcy counsel. The Debtor's assets and liabilities are both below $1 million. Asteria, which develops software and other materials for teachers to prepare students for placement exams, filed for Chapter 11 reorganization in January 2020 in U.S. Bankruptcy Court in San Antonio. It listed $1.1 million in assets and almost $9.2 million in liabilities. The case was precipitated by a sharp decline in sales and cash flow problems. Asteria had about 25 to 30 employees at the time of the filing. COVID-19 exacerbated Asteria's woes. The pandemic led to school closures in Texas, which cut the company's operating income. Asteria filed two PPP loan applications with two lenders. Both applications were rejected because of Asteria's Chapter 11 case. The company originally sought a roughly $700,000 loan. PPP loans can be fully forgiven if the money is used for payroll and expenses, such as rent and utilities. On ExpressNews.com: Bankrupt San Antonio-area business sues SBA over rejected coronvirus relief loan Asteria sued the SBA in April in bankruptcy court, alleging the agency had overstepped its authority in barring companies in Chapter 11 from participating in the loan program. Similar lawsuits had been filed against the SBA elsewhere. The SBA had told the Wall Street Journal in April that SBA chief Jovita Carranza, in consultation with Treasury Secretary Steven Mnuchin, determined that providing PPP loans to companies in bankruptcy "would present an unacceptably high risk of an unauthorized use of funds or nonrepayment of unforgiven loans." Nothing in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which authorized the loan program for small businesses, prevented a company in bankruptcy from receiving a loan, Asteria said its lawsuit. Congress funded the program with $659 billion. Gargotta, at an April 2020 court hearing on Asteria's request for a temporary restraining order against the SBA, sided with the government. "Sometimes I make decisions I'm not particularly happy about. This is clearly one of them,” Gargotta said in denying Asteria's request. Asteria likely will drop its lawsuit against the SBA, Keiffer said. Still, it may not mark the end of the loan issue for the SBA. "We're still trying to understand how this loan even got approved," Dominique Sinesi, a Justice Department lawyer for the SBA, told the judge at an Aug. 31, 2020 court hearing. "I think once we understand what happened, we will have a clearer position on what we intend to do." About Asteria Education Inc. Founded in 1982 in San Antonio, Texas, Asteria Education, Inc., also known as ECS Learning Systems, Test Smart, LLC and Prepworks -- https://www.staarmaster.ecslearn.com/ -- is an integrated standards prep company and developer of STAAR MASTER. Through its brands, Staar Master, Testsmart, and Prepworks, Asteria Education offers a diverse portfolio of supplementary educational products. Asteria Education filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50169) on Jan. 26, 2020. The petition was signed by David Cumberbatch, president and chief executive officer. At the time of the filing, the Debtor disclosed between $1 million and $10 million in both assets and liabilities. Judge Craig A. Gargotta oversees the case. Rochelle Mccullough, LLP, is the Debtor's legal counsel. ATOM INSTRUMENT: 5th Cir. Clears PAC in Infringement Suit --------------------------------------------------------- In the case captioned ATOM INSTRUMENT CORPORATION, doing business as Excitron Corporation; FRANEK OLSTOWSKI, Plaintiffs-Appellants, v. PETROLEUM ANALYZER COMPANY, L.P., Defendant-Appellee, No. 19-20151, Consolidated with: 19-20371 (5th Cir.), the Plaintiffs appealed the district court's take-nothing judgment and award of fees to the defendant. Olstowski and ATOM argued the district court made two errors: (1) finding that Petroleum Analyzer did not use Olstowski's trade secrets in Petroleum Analyzer's MultiTek and (2) awarding Petroleum Analyzer attorneys' fees under the Texas Theft Liability Act (TLLA). Upon review, the United States Court of Appeals, Fifth Circuit affirmed the district court's judgment. Plaintiff Franek Olstowski once worked for the defendant Petroleum Analyzer Co., L.P., where he was a research and development consultant. While working there in 2002, Olstowski developed an excimer lamp using krypton-chloride to detect sulfur with ultraviolet fluorescence. There is no dispute that Olstowski developed the technology on his own time and in his own laboratory, but he also performed tests and generated data for the technology using Petroleum Analyzer resources. In 2003, and again in 2005, Olstowski and Petroleum Analyzer entered into non-disclosure agreements regarding the technology. The parties never were able to agree on licensing. During the period of the discussions, Olstowski applied for a patent for his technology, then twice amended it. The Patent and Trademark Office rejected his first application and his first amendment but accepted his second amended application. ATOM Instrument Corp. was started in 2004 by Olstowski to assist him in the failed licensing discussions with Petroleum Analyzer. In 2006, Petroleum Analyzer filed a lawsuit in the 269th District Court of Harris County, Texas, seeking a declaratory judgment that Petroleum Analyzer is the owner of the technology Olstowski developed. The state court ordered the claims to arbitration because the 2005 non-disclosure/non-use agreement contained an arbitration clause. In 2009, Petroleum Analyzer partnered with a German company to develop its own sulfur-detecting excimer lamp called a MultiTek, which also used krypton-chloride to detect sulfur with ultraviolet fluorescence. Petroleum Analyzer manufactured and sold the MultiTek between November 2009 and October 2011. In December 2010, upon learning that Petroleum Analyzer was selling the MultiTek, Olstowski and ATOM filed a motion in state court to hold Petroleum Analyzer in contempt because Petroleum Analyzer violated the order enjoining it from using Olstowski's technology. Petroleum Analyzer responded that the confirmation order had ambiguously defined the technology that Petroleum Analyzer was enjoined from using. In August 2011, Olstowski and ATOM again moved to enforce the injunction, and in December 2011 they filed a second contempt motion. The state court granted the motion in part merely to clarify the meaning of the confirmation order. The state court concluded that the phrase "technology developed by Olstowski" as used in the confirmation order "means technology using an excimer light source that uses Krypton-Chloride specifically to measure sulfur using ultraviolet fluorescence." The state court, though, denied the contempt motion due to mootness: Petroleum Analyzer had ceased selling the MultiTek sometime between September and October of 2011. Significantly, the state court never decided whether Petroleum Analyzer's MultiTek used Olstowski's technology as defined by the arbitration panel and confirmation award. In February 2012, ATOM filed for bankruptcy under Chapter 11 of the Bankruptcy Code. Two months later, Olstowski and ATOM initiated an adversary proceeding against Petroleum Analyzer, in which they alleged misappropriation of trade secrets, unfair competition, and civil theft. On the bankruptcy court's recommendation, the district court withdrew the reference to the bankruptcy court and asserted jurisdiction under 28 U.S.C. section 1334. In August 2014, the district court entered partial summary judgment for Olstowski and ATOM, holding that Petroleum Analyzer "will be liable for using the trade secrets of Franek Olstowski and ATOM Instrument, LCC, if it used his technology in its MultiTek." Four years later, the district court held a six-hour bench trial to determine if Petroleum Analyzer had used any of Olstowski's protected technology. The court entered a judgment in favor of Petroleum Analyzer and later awarded attorneys' fees to Petroleum Analyzer. Olstowski and ATOM filed two appeals, which have been consolidated. In one, they argued the district court made a legal error in holding that Petroleum Analyzer did not use Olstowski's technology. In the other, they challenged the district court's award of attorneys' fees to Petroleum Analyzer. Olstowski and ATOM argued that the district court made a legal error by misconstruing what the arbitration panel declared Olstowski's trade secrets included. A proper construction of the arbitration panel's award, they argued, would indicate that the three physical differences highlighted by the district court are irrelevant as a matter of law. According to the arbitration panel's award, Olstowski's trade secrets include the "the technology and methods embodied in the patent applications styled . . . 'Excimer UV Fluorescence Detection.'" Olstowski and ATOM argued that patent application does not narrowly limit Olstowski's protected technology to any specific structural details. Thus, the structural differences in Olstowski's and Petroleum Analyzer's technology are irrelevant. According to Olstowski and ATOM, the only relevant comparison is Petroleum Analyzer's use of krypton-chloride in its MultiTek. Olstowski and ATOM based their entire case on Petroleum Analyzer's use of krypton-chloride in the MultiTek. According to the 5th Circuit, the arbitration panel stated that the technology described in Olstowski's patents is a trade secret. To be sure, the words "krypton" and "chloride" appear in the panel decision. Olstowski and ATOM could have provided expert testimony to show how the use of krypton-chloride is so unique to their device as to make it an integral part of their protected trade secret as opposed to a generic concept of physics, which is unprotected. They did not. The two witnesses they did call merely testified that Petroleum Analyzer's MultiTek used krypton-chloride, a fact Petroleum Analyzer does not contest. The Fifth Circuit concluded that Olstowski and ATOM's proclaimed legal issue is a factual one, and that they failed to carry their burden of proof at trial. After the district court entered its judgment on the merits of this dispute, Petroleum Analyzer moved for an award of attorneys' fees under the TTLA. Olstowski and ATOM argued that the district court erred in failing to segregate Petroleum Analyzer's fees that were not related to Petroleum Analyzer's defense of their claim under the TTLA. As an example of a failure to segregate, Olstowski and ATOM identified billing entries for work totaling $3,498 that occurred two days prior to their first assertion of a claim under the TTLA. The Fifth Circuit found no error as to the billing entries totaling $3,498 used as an example of the need for segregating the billings. Though the fees were billed for work done via mediation prior to the TTLA claims being filed, the work advanced Petroleum Analyzer's attempt to resolve a threatened claim under the TTLA. According to the Fifth Circuit, they saw no failure by the district court to understand how the TTLA works on awarding attorneys' fees. Whether and to what extent legal fees can be segregated is a mixed question of law and fact. A copy of the Fifth Circuit's Ruling is available at https://bit.ly/2GMhq2l from Leagle.com. ATOM Instrument Corporation, dba Excitron Corporation, filed for Chapter 11 bankruptcy (Bankr. S.D. Texas Case No. 12-31184) on Feb. 10, 2012, disclosing under $1 million in both assets and debts. Melissa Anne Haselden, Esq., at Hoover Slovacek LLP, served as the Debtor's bankruptcy counsel. AVG WEST: Case Summary & 8 Unsecured Creditors ---------------------------------------------- Debtor: AVG West, LLC 13901 Midway Road Suite 102-243 Dallas, TX 75244 Business Description: AVG West, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: November 4, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43414 Judge: Hon. Mark X. Mullin Debtor's Counsel: Joyce Lindauer, Esq. JOYCE L. LINDAUER ATTORNEY, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Tel: (972) 503-4033 Email: joyce@joycelindauer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Barton, president. A copy of the Debtor's list of eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/446ZDJA/AVG_West_LLC__txnbke-20-43414__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IYEFE6I/AVG_West_LLC__txnbke-20-43414__0001.0.pdf?mcid=tGE4TAMA AVIANCA HOLDINGS: Seeks to Hire KPMG LLP as Tax Consultant ---------------------------------------------------------- Avianca Holdings S.A. received approval from the U.S. Bankruptcy Court for the Southern District of New York to hire KPMG LLP (US) to provide tax consulting services. Tax Consulting Services that KPMG (US) will provide are: a. review of the Debtors' tax attributes including, but not limited to, net operating losses, tax basis in assets, and tax basis in stock of subsidiaries as relevant to the Proposed Restructuring; b. analyse cancellation of debt income; c. analyse the tax implication of any internal reorganizations and proposal of restructuring alternatives; d. prepare cash tax modeling of the tax benefits or tax costs of restructuring alternatives; e. analyse the tax implications of any dispositions of assets and/or subsidiary stock pursuant to the Proposed Restructuring; f. analyse proposed bad debt, worthless stock, and retirement tax losses associated with the Proposed Restructuring; g. analyse any proof of claims from tax authorities, in which i. KPMG will search the proof of claim register for claims from the taxing authorities at the direction of the Debtors' management; ii. KPMG will summarize the identified tax proof of claims; iii. KPMG will review the tax claims and provide the summarized tax proof of claim summary schedule to the KPMG tax compliance team(s) for additional commentary and support (e.g., filed income/non-income tax returns, etc.), where applicable; and iv. KPMG will provide the tax proof of claim summary schedule, the tax proof of claims, and supporting documentation (e.g., filed income/non-income tax returns, etc.), where applicable, to the Debtors' management for their review and assessment; h. analyse the tax treatment of restructuring related costs; i. provide routine tax advice concerning the federal, state, local, and foreign tax matters related to the preparation of the prior year's federal, state, local, and foreign tax returns; j. provide routine tax advice concerning the federal, state, local, and foreign tax matters related to the computation of Debtors' taxable income for the current year or future years; and k. provide routine dealings with a federal, state, local, or foreign tax authorities (e.g., responding to automated interest and penalty notices, preparing tax computations based upon the taxpayer's concession or settlement of an issue with the relevant tax authority). KPMG (US) will seek compensation for the Tax Consulting Services based upon the hours actually expended by each assigned professional at each professional's hourly billing rate. The majority of fees to be charged for the Tax Consulting Services reflect a reduction of approximately 35 percent from KPMG (US)'s normal and customary rates, depending on the types of services to be rendered. The hourly rates are: Partner/Principal $365 - $897 Managing Director $275 - $832 Senior Manager $193 - $780 Manager $149 - $728 Senior Tax Associate $65 - $559 Tax Associate $45 - $338 Howard Steinberg, a partner at KPMG, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Howard Steinberg, Esq. KPMG LLP 560 Lexington Avenue New York, NY 10022 Telephone: (212) 872-6562 E-mail: hbsteinberg@kpmg.com About Avianca Holdings Avianca -- https://aviancaholdings.com/ -- is the commercial brand for the collection of passenger airlines and cargo airlines under the umbrella company Avianca Holdings S.A. Avianca has been flying uninterrupted for 100 years. With a fleet of 158 aircraft, Avianca serves 76 destinations in 27 countries within the Americas and Europe. Avianca Holdings S.A. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-11133) on May 10, 2020. At the time of the filing, Debtors disclosed $7,273,900,000 in assets and $7,268,700,000 in liabilities. Judge Martin Glenn oversees the cases. The Debtors tapped Milbank LLP as general bankruptcy counsel; Urdaneta, Velez, Pearl & Abdallah Abogados and Gomez-Pinzon Abogados S.A.S. as restructuring counsel; Smith Gambrell and Russell, LLP as aviation counsel; Seabury Securities LLC as financial restructuring advisor and investment banker; FTI Consulting, Inc. as financial restructuring advisor; and Kurtzman Carson Consultants LLC as claims and noticing agent. The U.S. Trustee for Region 2 appointed a committee of unsecured creditors in Debtor's bankruptcy cases on May 22, 2020. BAINBRIDGE UINTA: Taps Petrie Partners as Investment Banker ----------------------------------------------------------- Bainbridge Uinta, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Petrie Partners Securities, LLC as their investment banker. The firm will provide the following services: a. review and analyze the Debtors' business, operations and financial projections; b. assist in the formulation of strategy and structural alternatives in connection with a confirmed plan of reorganization or a sale under Bankruptcy Code; c. assist in the determination of an appropriate capital structure for the Debtors; d. assist the Debtors in identifying and evaluating candidates, preparation of due diligence information and contacting potential interested parties for any potential sale Transaction; e. advise and assist the Debtors in evaluating any potential capital transaction, contact potential sources of capital as the Debtors may designate and assist the Debtors in implementing such financing; f. advise the Debtors on the terms of securities it offers in any potential capital transaction; g. render financial advice to the Debtors and participate in meetings or negotiations; h. assist the Debtors in performing a valuation and determining a range of enterprise values for the Debtors for a plan and disclosure statement; i. provide testimony in any proceeding before the Bankruptcy Court; and j. provide the Debtors with other services within the firm's areas of expertise as may be reasonably requested. The firm will be paid as follows: a. Restructuring Fee. A fee of $500,000, payable upon the earlier of (i) the confirmation and effectiveness of a plan or (ii) the closing of a Restructuring. For the avoidance of doubt, Petrie shall only be entitled to one Restructuring Fee. b. Sale Transaction Fee. A fee equal to the greater of (i) 1.50 percent of the consideration of a sale transaction or (ii) the restructuring fee. c. Capital Transaction Fee. At the closing of any capital transaction (including, for the avoidance of doubt, any Debtors-in-possession (DIP) financing), a non-refundable cash fee of: i. 3 percent of the aggregate gross amount or face value of capital raised in any such capital transaction as equity, equity-linked interests, options, warrants, or other rights to acquire equity interests, plus ii. 1.5 percent of the aggregate gross amount of debt obligations and other interests raised (including a DIP financing); provided, however, that if any such DIP financing raised converts to an exit facility and Petrie has received a capital transaction fee in connection with such DIP financing, no additional capital transaction fee shall be payable except to the extent that the amount raised in such exit facility exceeds the outstanding amount of such DIP financing at the time of such conversion. In the event transaction fees become payable as a result of a credit bid by the secured lender, the transaction fees will be reduced by 20 percent. Petrie Partners will be paid a monthly fee of $35,000 until the earlier of the completion of a restructuring or the termination of Petrie's engagement. John Fossum, a principal at Petrie Partners, disclosed in court filings that the firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: John Fossum Petrie Partners Securities, LLC 600 Travis Street, Suite 6700 Houston, TX 77002 Telephone: (713) 659-0760 Facsimile: (713) 568-3991 About Bainbridge Uinta Bainbridge Uinta, LLC, develops and operates fields to extract crude oil and natural gas. Bainbridge Uinta sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Tex. Case No. 20-42794) on Sept. 1, 2020. In the petition signed by CEO Paul D. Ching, the Debtor was estimated to have assets of between $50 million and $100 million and liabilities of between $50 million and $100 million. Joseph M. Coleman, Esq. of Kane Russell Coleman Logan PC serves as counsel to the Debtors. Oak Hills Securities Inc. has tapped as financial advisor to the Debtors. Stretto is the Debtors' claims and noticing agent. BARBARA A. WIGLEY: Spouse's Asset Transfers Fraudulent, Court Says ------------------------------------------------------------------ In the case captioned Lariat Companies, Inc., Respondent, v. Barbara Wigley, Appellant, Michael Wigley, Defendant, No. A17-0210 (Minn. App.), Wigley appeals from a judgment in favor of Lariat following a court trial on its claims under the Minnesota Uniform Fraudulent Transfer Act (MUFTA). Wigley argued that a lower court abused its discretion by denying her motion (1) for amended findings related to the lower court's determination that the challenged transfers were both constructively fraudulent and made with actual intent to hinder, delay, or defraud respondent and (2) to vacate or reduce the judgment under Minn. R. Civ. P. 60.02. Appellant also filed a motion to supplement the record on appeal. Upon review, the Court of Appeals of Minnesota affirmed the lower court's judgment and denied the motion to supplement the record. The appeal arose from allegedly fraudulent transfers of assets from Michael Wigley (husband) to his wife, appellant Barbara Wigley (wife). The husband is the majority owner of Baja Sol Cantina EP, LLC, an entity operating a restaurant business in Eden Prairie. On Oct. 8, 2008, Baja Sol entered into a commercial lease with respondent Lariat Companies, Inc. The lease term was for 10 years, and husband, as Baja Sol's president, executed it on Baja Sol's behalf. The husband signed a personal guarantee for all of Baja Sol's obligations under the lease. In June 2010, Baja Sol defaulted on the lease and was evicted from the premises. Lariat subsequently sued husband and Baja Sol for breach of contract, and sought judgment, jointly and severally, for unpaid rent and attorney fees and costs. The district court granted Lariat's motion for summary judgment, awarding Lariat $2,224,237 in damages, pre-and-post-judgment interest, and reasonable attorney fees. This court affirmed the district court's judgment in Lariat Companies, Inc. v. Baja Sol Cantina EP, LLC, No. A12-2202. In the meantime, Home Federal Savings Bank sued the husband in December 2010, related to a Baja Sol equipment lease. The husband subsequently entered into assignment and assumption agreements on March 1, 2011, in which he transferred to wife his interests in Spell Capital Partners Fund II, LP, and Spell Capital Funds III, LP to wife. Around the same time, the husband removed his name from a joint U.S. Bank account he held with the wife. The husband had negative equity in real property located on Tonkawa Road in Orono, which was encumbered by a mortgage in favor of Bremer Bank N.A. To resolve that debt, the husband provided a warranty deed to the Tonkawa Road property to Bremer on March 11, 2011, "as a deed in lieu of foreclosure." On Sept. 23, 2011, Indianhead Foodservice Distributer Inc. sued the husband to recover $116,452.20, plus late fees, collection costs, and attorney fees, related to foodservice products provided to Baja Sol. Two months later, on Nov. 21, the husband was forced into involuntary bankruptcy by his creditors, including Lariat. The next day, Lariat, Bremer Bank, and Home Federal commenced this action against wife, alleging certain fraudulent transfers in violation of MUFTA, Minn. Stat. sections 513.41-.51 (2010). The complaint alleged that the husband had fraudulently transferred funds to the wife in an effort to conceal and preserve assets. The husband's bankruptcy was dismissed on March 7, 2012, after he negotiated settlement with many of his creditors that had forced the involuntary bankruptcy proceeding. Shortly thereafter, in May 2012, Bremer Bank and Home Federal settled their fraudulent-transfer claims against wife. Lariat later amended its complaint to specifically allege that husband fraudulently transferred to wife his ownership interests in the following assets to avoid paying the judgment for Lariat: (1) Great Plains Supply of Sidney Inc.; (2) Spell Capital Funds II and III; (3) Fine Wine Appreciation Funds I and II; (4) a coin collection; and (5) checking and savings accounts. Husband and wife testified at trial, as well as expert witnesses for Lariat and the Wigleys. The testimony centered on the alleged transfers of the following assets: (1) Spell Capital Funds II and III; (2) U.S. Bank account; (3) coin collection; (4) wine collection; (5) Wine Funds; and (6) life insurance policies. Evidence was presented that at the time of the transfers, the wife's interest in Spell Capital Fund II was $412,258, and her interest in Spell Capital Fund III was $358,533, for a total of $770,791. The husband claimed that the purpose of transferring Spell Capital Funds II and III was to restore value to the wife's estate due to a decline in real estate values. The husband also acknowledged that in 2011, he removed his name from a joint U.S. Bank account he held with wife. Evidence was presented that the total amount paid to Home Federal and Bremer Bank to settle their claims was $675,000. Lariat's expert witness opined that the husband became insolvent after he transferred Spell Capital Funds II and III and that, after the transfers, the husband's liabilities exceeded his assets by $178,934. The wife's expert witness disagreed with Lariat's expert and claimed that Lariat's expert significantly overstated three of her husband's liabilities and understated two of his assets. Specifically, the wife's expert opined that the husband's liabilities related to the Home Federal claim, Bremer Bank's mortgage on the Tonkawa Road property, and a debt to Wells Fargo related to GPS Hot Springs Partners LLP, were overstated. The wife's expert also opined that Lariat's expert understated husband's interest in two assets: (1) GPS Sidney Equity Interest, and (2) GPS Loan Receivable. The wife's expert testified that, based upon a proper calculation of the husband's assets and liabilities, the husband was solvent at the time of the transfers. Following the trial, the district court determined that Lariat failed to establish its fraudulent-transfer claims with respect to (1) the coin and wine collection; (2) the Wine Funds; and (3) the life insurance policies. But the district court determined that husband transferred his interests in Spell Capital Funds II and III and the U.S. Bank account to wife, "with actual intent to hinder, delay, or defraud Lariat; without receipt of reasonably equivalent value in exchange for the transfers; and at a time when . . . [husband] was insolvent or became insolvent as a result of the transfers." Thus, the district court concluded that Lariat established a presumption of fraudulent transfer as to Spell Capital Funds II and III, and the U.S. Bank account. The district court further concluded that the Wigleys failed to rebut the presumption by clear and convincing evidence. In doing so, the district court found the Wigleys' testimony that the transfers were made for estate planning purposes incredible. The Wigleys moved for amended findings and to vacate the judgment. But their motion was stayed in February 2014, when the husband filed for chapter 11 bankruptcy. After the bankruptcy court confirmed the husband's plan of reorganization, the wife renewed the motion for amended findings and moved to vacate the judgment. In December 2016, the wife's motion for amended findings and to vacate the judgment was granted in part and denied in part. The district court determined that it had erroneously determined the amount of the U.S. Bank account balance at the time of the transfer and therefore amended the findings to reflect a balance of $10,492.06. But after determining that it had properly applied the badges of fraud and the presumption that transfers between spouses are fraudulent, the district court rejected the wife's challenge to the finding that the husband was insolvent at the time of the transfers. In addition, the district court determined that it had properly weighed the equities with respect to the judgment against the wife. Lastly, the district court concluded that the husband's bankruptcy discharge did not merit vacating the judgment against the wife. The wife filed for chapter 11 bankruptcy, and she later appealed the denial of her motion for amended findings and to vacate the judgment. This court stayed the wife's appeal in light of her pending bankruptcy proceeding. On June 20, 2018, the stay of appeal was dissolved. After briefing was complete, the wife filed a motion to supplement the record with a supplemental addendum. Lariat opposed the motion. On Nov. 9, 2018, a bankruptcy appellate panel determined that Lariat's claim against wife must be disallowed. The court subsequently granted the wife's motion to stay the appeal again. In March 2020, the Eighth Circuit Court of Appeals reversed the bankruptcy appellate panel, concluding that the husband's bankruptcy discharge extinguished his liability, but it did not retroactively extinguish the wife's joint-and-several liability for the fraudulent-transfer judgment. On May 1, 2020, this court dissolved the stay and reinstated this appeal. The wife argued that the district court abused its discretion by denying her motion to vacate the judgment because the husband's discharge in the bankruptcy proceedings "bars any further enforcement or collection by [Lariat] under MUFTA." But the Eighth Circuit Court of Appeals concluded that Lariat has a claim against wife because "' [i]n bankruptcy, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.'" The wife argued that the Eighth Circuit Court's decision "ignore[s] the plain language of MUFTA and similar state statutes which afford relief only to collect upon the transferor's underlying liability." The Appeals Court held that Wife's argument is without merit because, as the district court determined, it "ignores the fact that at the time judgment was entered in this case, . . . Lariat was in fact [husband's] creditor." It also ignores the plain language of section 513.47. The wife cited no binding, or otherwise persuasive, authority to support her argument that husband's discharge in the bankruptcy proceedings bars any further enforcement or collection by Lariat under MUFTA. The wife, therefore, failed to show that the district court erred by concluding that the husband's bankruptcy proceeding did not extinguish the wife's liability to Lariat under MUFTA. A copy of the Court of Appeals of Minnesota's Opinion is available at https://cutt.ly/rghIu4j from Leagle.com. Barbara A. Wigley filed for chapter 11 bankruptcy protection (Bankr. D. Minn. Case No. 16-43707)on Dec. 19, 2016, and was represented by Joel D. Nesset, Esq. of Cozen O'Connor. BAUMANN & SONS: Committee Taps Ryniker Consultants as Advisor ------------------------------------------------------------- The official committee of unsecured creditors of the bankruptcy estates of Bauman & Sons Buses, Inc. and its affiliates seeks approval U.S. Bankruptcy Court for the Eastern District of New York to hire Ryniker Consultants LLC as its financial advisors. The firm will render the following professional services: a. analyze the financial document production and information provided by the Debtors and their principals; b. scrutinize cash disbursements for the periods prior to the initial Debtors' petition date and new Debtors' petition date; c. attend conferences with the committee and its professionals; d. assist the committee with any investigation into the pre-petition acts, conduct, transfers of property, liabilities, financial condition of the Debtors, their management, or creditors; e. assist the committee and its counsel in any litigation proceedings against potential adversaries; and f. perform those services that may be deemed necessary by the committee. Ryniker Consultants will seek compensation upon appropriate application to the court for fees and expenses. Brian Ryniker, a member at Ryniker Consultants, disclosed in court filings that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian Ryniker Ryniker Consultants LLC 156 Dubois Avenue, Floor 2 Sea Cliff, NY 11579 Email: brian@rynikerllc.com About Baumann & Sons Buses On May 27, 2020, A&A Auto Glass Plus, Mondial Automotive, Inc., Jenthony Enterprises, Inc., Nesco Bus Maintenance, Bevel Engine Inc. and Bangs Towing filed an involuntary petition under chapter 7 of the Bankruptcy Code against Baumann & Sons Buses, Inc., in the United States Bankruptcy Court for the Eastern District of New York. Also on the Initial Debtors' Petition Date, Nesco Bus Maintenance, Bangs Towing, Acme Radiator & Glass Works Inc. and Jenthony Enterprises Inc. filed an involuntary petition under chapter 7 of the Bankruptcy Code against ACME Bus Corp. in the Bankruptcy Court. On June 18, 2020, the Court entered orders for relief under chapter 7 of the Bankruptcy Code against Sons and ACME. By orders dated July 1, 2020, upon motions of Sons and ACME, the Court converted the chapter 7 cases to cases under chapter 11 of the Bankruptcy Code. On August 3, 2020, ABA, Brookset and Baumann each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The cases are jointly administered with Baumann & Sons Buses, Inc. (Bankr. E.D.N.Y. Case No. 20-72121) as the lead case. Bankruptcy Judge Robert E. Grossman oversees the cases. Klestadt Winters Jurellersouthard & Stevens, LLP, serves as counsel to the Debtors. On July 27, 2020, the United States Trustee appointed an Official Committee of Unsecured Creditors. The committee selected SilvermanAcampora LLP as its general bankruptcy counsel. BAUMANN & SONS: Seeks to Hire Smith & Downey as Special Counsel --------------------------------------------------------------- Baumann & Sons Buses, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Smith & Downey, PA as their special counsel. The firm will render the following services: a. assist the Debtors in winding down the Baumann & Sons Buses Savings Trust, a 401(k) plan; b. assist the Debtors in analyzing and determining any priority claims resulting from the wind down of the plan; c. advise the Debtors with respect to any underfunding issues in connection with the wind down of the plan; d. navigate various levels of governmental regulations applicable to the plan and ensure the Debtors are in compliance therewith; and e. perform such other legal services with respect to ERISA and employee compensation and benefits matters as may be required and/or deemed to be in the interest of the Debtors. Michael Connors, a partner at Smith & Downey, disclosed in court filings that the firm neither represents nor holds any interest adverse to the Debtors or to their estates. The firm can be reached through: Michael Connors Smith & Downey, PA Garden City Center 100 Quentin Roosevelt Boulevard, Suite 210 Garden City, NY 11530 Telephone: (631) 755-0100 Facsimile: (631) 755-0110 About Baumann & Sons Buses On May 27, 2020, A&A Auto Glass Plus, Mondial Automotive, Inc., Jenthony Enterprises, Inc., Nesco Bus Maintenance, Bevel Engine Inc. and Bangs Towing filed an involuntary petition under chapter 7 of the Bankruptcy Code against Baumann & Sons Buses, Inc., in the United States Bankruptcy Court for the Eastern District of New York. Also on the Initial Debtors' Petition Date, Nesco Bus Maintenance, Bangs Towing, Acme Radiator & Glass Works Inc. and Jenthony Enterprises Inc. filed an involuntary petition under chapter 7 of the Bankruptcy Code against ACME Bus Corp. in the Bankruptcy Court. On June 18, 2020, the Court entered orders for relief under chapter 7 of the Bankruptcy Code against Sons and ACME. By orders dated July 1, 2020, upon motions of Sons and ACME, the Court converted the chapter 7 cases to cases under chapter 11 of the Bankruptcy Code. On August 3, 2020, ABA, Brookset and Baumann each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The cases are jointly administered with Baumann & Sons Buses, Inc. (Bankr. E.D.N.Y. Case No. 20-72121) as the lead case. Bankruptcy Judge Robert E. Grossman oversees the cases. Klestadt Winters Jurellersouthard & Stevens, LLP, serves as counsel to the Debtors. On July 27, 2020, the United States Trustee appointed an Official Committee of Unsecured Creditors. The committee selected SilvermanAcampora LLP as its bankruptcy counsel. BLUE EAGLE: Seeks to Hire Hagemore Realty as Real Estate Agent -------------------------------------------------------------- Blue Eagle Farming, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Alabama to hire Hagemore Realty Group as their real estate agent. The firm will provide services to the Debtors related to property listing, real property advertising, purchase contract, and sale of real property. The firm will be compensated as follows: Real Estate Agent Fee. Upon the sale of real property, Hagemore Realty will receive a 6 percent fee if there is both a separate buyer and a seller agent. The fee will be split between the buyer and the seller, with the buyer paying 3 percent, and the seller paying 3 percent. In the event that Charlotte Denney of Hagemore Realty is agent for both the buyer and seller, the fee will be limited to 4.5 percent. Ms. Denney disclosed in court filings that the firm neither represents nor holds any interest adverse to the Debtors or to their estates. The firm can be reached through: Charlotte Denney Hagemore Realty Group 307 Commercial St. SE Hanceville, AL 35077 Telephone: (256) 887-8025 About Blue Eagle Farming Blue Eagle Farming and H J Farming are engaged in the business of cattle ranching and farming. Blue Smash Investments operates in the financial investment industry; War-Horse Properties manages companies and enterprises; Eagle Ray Investments and Forse Investments are lessors of real estate while Armor Light, LLC, is engaged in the business of residential building construction. Blue Eagle Farming, LLC, and its affiliate H J Farming, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case Nos. 18-02395 and 18-02397) on June 8, 2018. On June 9, 2018, five Blue Eagle affiliates filed Chapter 11 petitions: Blue Smash Investments LLC, Eagle Ray Investments LLC, Forse Investments LLC, Armor Light LLC, and War-Horse Properties, LLLP (Bankr. N.D. Ala. Case Nos. 18-81707 to 18-81711). The cases are jointly administered under Case No. 18-02395. In the petitions signed by Robert Bradford Johnson, general partner of Blue Eagle Farming, LLC's sole owner, Blue Eagle was estimated to have $1 million to $10 million in assets and $100 million to $500 million in liabilities as of the bankruptcy filing. Judge Tamara O. Mitchell presides over the cases. Burr & Forman LLP is the Debtors' legal counsel. BOY SCOUTS: Seeks to Hire White & Case as Legal Counsel ------------------------------------------------------- The Boy Scouts of America and Delaware BSA, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire White & Case LLP as their legal counsel. The firm will provide the following legal services: (a) provide legal advice with respect to the Debtors' powers and duties; (b) take all necessary action to protect and preserve the Debtors' estates; (c) prepare legal papers; (d) advise the Debtors concerning, and prepare responses to, legal papers that may be filed by parties in interest; (e) attend meetings and court hearings; (f) take all necessary actions in connection with a Chapter 11 plan and disclosure statement for the Debtors; (g) provide legal advice and perform legal services involving the fiduciary duties of the Debtors and their officers, directors and managers; and (h) perform all other necessary legal services for the Debtors. The hourly rates charged by White & Case are $1,145 to $1,645 for partners, $1,055 for counsel, $595 to $1,025 for associates, and $175 to $535 for paraprofessionals. Jessica C. K. Boelter, Esq., a partner at White & Case, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Ms. Boelter also made the following disclosures in response to the request for additional information set forth in Paragraph D.1 of the U.S. Trustee Guidelines: a. Other than as set forth in White & Case's declaration with respect to professionals who have transitioned their practices to the firm, the firm did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement. b. The hourly rates of the White & Case professionals representing the Debtors are consistent with the rates that White & Case charges other chapter 11 clients, regardless of the geographic location of the chapter 11 case. c. White & Case did not represent the Debtors prepetition or postpetition before October 23, 2020. d. White & Case intends to follow the budget for Sidley's engagement for the postpetition period, which is set forth in Exhibit 1 to the Final Order (I) Authorizing the Debtors to Utilize Cash Collateral Pursuant to 11 U.S.C. Section 363; (II) Granting Adequate Protection to the Prepetition Secured Party Pursuant to 11 U.S.C. Sections 105(a), 361, 362, 363, 503 and 507; and (III) Granting Related Relief [D.I. 433]. Recognizing that unforeseeable events may arise in large chapter 11 cases, the Debtors and White & Case may need to refine and amend the budget and staffing plan as necessary. The budget and staffing plan are intended as estimates and not as caps or limitations on fees or expenses that may be incurred or on the professionals or paraprofessionals who may advise the Debtors in these chapter 11 cases. The firm can be reached through: Jessica C. K. Boelter, Esq. WHITE & CASE LLP 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 819-8200 Email: jessica.boelter@whitecase.com About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets at least $500 million in liabilities as of the bankruptcy filing. The Debtors tapped Sidley Austin LLP as general bankruptcy counsel; Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel; and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. BRONX MIRACLE: Court Junks Emergency Bid for Mandamus ----------------------------------------------------- District Judge Alison J. Nathan denied the Emergency Petition for Writ of Prohibition and Mandamus and Emergency Motion for Order to Show Cause for Preliminary Injunction and Temporary Restraining Order filed by Bronx Miracle Gospel Tabernacle Word of Faith Ministries and affiliates in the case captioned Bronx Miracle Gospel Tabernacle Word of Faith Ministries, et al., Petitioners, v. Hon. Stuart M. Bernstein, et al., Respondents, No. 20-cv-7416 (AJN) (S.D.N.Y.). According to Judge Nathan, the record does not reflect that Petitioners have served the petition and motion on Respondents or otherwise notified Respondents of the petition and motion, and Petitioners have not demonstrated that they are entitled to ex parte relief. The Court also found that extraordinary relief would not be warranted here even on a properly noticed motion. Mandamus is appropriate only where a petitioner's right to relief is "clear and indisputable" and ordinary remedies would be inadequate to protect the petitioner's interests. Petitioners did not timely oppose the appointment of a Chapter 11 trustee before the bankruptcy court. Moreover, they did not seek emergency relief in this Court until nearly a month after the bankruptcy court's ruling on a similar motion. Considering this delay, the balance of equities does not favor emergency relief. A copy of the Court's Order is available at https://bit.ly/2H9bD7j from Leagle.com. * * * Following the Court's Order, an appeal has been taken from the court decision denying the Motion to Stay, Motion for TRO, and Motion to Withdraw Reference. The appeal was filed by Elouise Bacchus, Barbara Bennett, Pearline Boothe-Panton, Alexander Boswell, Bronx Miracle Gospel Tabernacle Word of Faith Ministries, Jeanette Y Brown, Missionary Etta Brown, Murcent Brown, Myrtle Brown, Phillicia Rose Brown, Freddie Campbel, Paulette Campbell, Sharon Campbell, Vangeline Campbell, Marcia Campbell, Barbara Daley, Johanna Daughma, Kemmar Daughma, Kerry-Ann Davis, Deacon Carlington McDonald, Deacon Steve Burton, Deaconess Annie Moore, Deaconness Sharon Burton, Anthony Edwards, Lorna Fagan, Andrea Ferguson, Deaconess Winsome Ferguson, Keith Ferguson, Maxine Ferguson, Missionary Valedericka Fraser, Barbara Goodwin, Sonia Graham, Missionary Ina Griffiths, Horace Hall, Sarah Hall, Marion Sergent Hall, Anthony Hyatt, Jr., Zepheria Illidge, Missionary Norma Johnson, Karen Lindsay, Winsome Maxwell, Nadine McDonald, Yvette McDonald, Lucille Moore, Marie Moore, Susan Moore, Tracey-Ann Moore, Beryl Morrison, Joseph Quanioo, Sharon Redley, Leroy Robinson, Margaret Robinson, Franklyn Robinson, Missionary Dalia Ross, Jennifer Stubbs, Lynden Stubbs, Icymay Thomas, Keith Elijah Thompson, Shalene Thompson, Shavonne Thompson, Yvonne Mae Thompson, Sharice Thompson, Keith Elijah Thompson, Jr., Camille Walton, Deaconess Jean Weise, Cynthia Williams, Harrison Winchester, Marjorie Winchester, Elder William Samuel Wright, and Missonary Hermin Young. About Bronx Miracle Gospel Tabernacle Word of Faith Ministries, Inc. Bronx Miracle Gospel Tabernacle Inc. -- http://www.bronxmiracle.org/-- is a not-for-profit religious corporation in Bronx, New York. The Debtor previously sought bankruptcy protection (Bankr. S.D.N.Y. Case No. 17-11395) on May 22, 2017. The Debtor again sought bankruptcy protection (Bankr. S.D.N.Y. Case No. 19-12447) on July 28, 2019. In the petition signed by Rev. Dr. Keith Elijah Thompson, pastor, the Debtor estimated $1 million to $10 million in both assets and liabilities. Barak P. Cardenas, Esq. at CARDENAS ISLAM & ASSOCIATES, PLLC, serves as the Debtor's counsel. On Jan. 27, 2020, the Court confirmed the appointment of Deborah J. Piazza as the Chapter 11 Trustee. On April 2, 2020, the Court appointed Tamerlain Realty Corp. as the Trustee's real estate broker. BROOKLYN ROASTING: Taps Klestadt Winters as Legal Counsel --------------------------------------------------------- Brooklyn Roasting Works LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Klestadt Winters Jureller Southard & Stevens, LLP as their legal counsel. The firm will render the following services: a. advise the Debtors with respect to their powers and duties; b. advise and consult the conduct of the Subchapter V cases; c. attend meetings and negotiate with the Subchapter V trustee, representatives of creditors and other parties in interest; d. assess the Debtors' assets and financial affairs to whether there are assets or claims that can be administered for the benefit of the estate and its creditors; e. take all necessary actions to protect and preserve the Debtors' estates; f. review, analyze and respond to all applications, motions, orders, and statements; g. take any necessary action on behalf of the Debtors to negotiate, prepare and obtain approval and confirmation of a Chapter 11 plan; h. perform all other necessary legal services for the Debtors; and i. perform such legal services as may be required or deemed to be in the interest of the Debtors. Tracy Klestadt, Esq., a partner at Klestadt Winters, disclosed in court filings that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tracy L. Klestadt, Esq. Klestadt Winters Jureller Southard & Stevens, LLP 200 West 41st Street, 17th Floor New York, NY 10036-7203 Telephone: (212) 972-3000 Facsimile: (212) 972-2245 About Brooklyn Roasting Founded in 2009, Brooklyn Roasting Company is in the homegrown coffee business, operating a handful of cafes in New York City and servicing hundreds of high-end wholesale accounts. The company offers comprehensive wholesale coffee roasting, packaging, delivery, and equipment sourcing services. Brooklyn Roasting Works, LLC, and three affiliates sought Chapter 11 protection on Oct. 21, 2020 (Bankr. E.D.N.Y. Case No. 20-43683). Brooklyn Roasting Works listed total assets of $778,748 and total liabilities of $3,107,230 as of the bankruptcy filing. Klestadt Winters Jureller Southard & Stevens, LLP, led by Tracy L. Klestadt, Esq., is the Debtors' legal counsel. CALLON PETROLEUM: Posts $680.4 Million Net Loss in Third Quarter ---------------------------------------------------------------- Callon Petroleum Company filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $680.38 million on $290.03 million of total operating revenues for the three months ended Sept. 30, 2020, compared to net income of $55.83 million on $155.38 million of total operating revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $2.03 billion on $738.33 million of total operating revenues compared to net income of $91.47 million on $475.48 million of total operating revenues for the same period last year. As of Sept. 30, 2020, the Company had $4.93 billion in total assets, $3.73 billion in total liabilities, and $1.20 billion in total stockholders' equity. Joe Gatto, president and chief executive officer commented, "During the third quarter, our operations team continued to execute on our cost reduction efforts, posting meaningful gains that bolstered our free cash flow generation to approximately $100 million over the last two quarters. These achievements coupled with our recent strategic initiatives to improve liquidity and propel our debt reduction efforts have placed us in a much better position as we look to close out 2020 with the resumption of moderated development across all three of our asset areas." He continued, "Well performance from our modified stacking and spacing program has met or exceeded expectations, confirming the merits of our life-of-field development model that will preserve the future value of our inventory while simultaneously delivering near-term economic returns at current strip prices. Moreover, our focus on cost control and operational efficiency through scaled development is pushing us towards even lower cost thresholds that should generate improved cash flow and lower break-even pricing over time." Mr. Gatto closed by sharing, "Alongside these operational and strategic achievements, we have continued to focus on operating safely, with a clear vision for reducing our environmental impact, maintaining our social awareness and treatment of our workforce, and strengthening our alignment with the needs of our shareholders. The recent issuance of our inaugural Sustainability report provides a clear and well-documented picture of where we stand and the path to continuously improving in each of these three critical areas. As we finalize the details of our 2021 budget and activity levels, our focus will be on our debt reduction efforts, maintaining a low cost development and operations structure, and creating durable and cogent changes that not only enhance shareholder returns but also positively impact our employees, communities, and our broader stakeholder group." Private Debt Exchange Callon also announced another meaningful step in the execution of its deleveraging plan. On November 2nd, the Company entered into a privately negotiated agreement with certain holders of its outstanding unsecured debt securities to exchange $286 million of principal of the Company's existing unsecured senior notes for $158 million aggregate principal of new 9.00% Second Lien Notes due 2025, payable semi-annually, to be issued by Callon at a weighted average exchange ratio of approximately $555 per $1,000 of principal exchanged. Over 60% of the existing Senior Notes to be exchanged are due 2023 and 2024. Upon completion of the exchange, Callon's total net debt will be reduced by approximately $128 million and total cash interest expense by approximately $5 million. In addition, certain other affiliated parties have the option to exchange up to an additional approximately $104 million of principal of Senior Notes under the same exchange terms. At full participation, the estimated total debt reduction and total cash interest expense reduction would be approximately $175 million and $7 million, respectively. Participants in the exchange will also receive between 1.16 and 1.76 million warrants, dependent on final participation levels, with a strike price of $5.60 which is consistent with the strike price for the warrants issued recently in relation to the Company's initial issuance of Second Lien Notes that was announced on October 1st. The private debt exchange is scheduled to close on November 17th. Callon currently expects the borrowing base under its credit facility to remain unchanged at $1.6 billion, and its next scheduled redetermination will take place in May 2021. Operations Update At Sept. 30, 2020, Callon had 1,479 gross (1,305.9 net) horizontal wells producing from established flow units in the Permian Basin and Eagle Ford Shale. Net daily production for the three months ended Sept. 30, 2020 grew 170% to 102.0 Mboe/d (63% oil), as compared to the same period of 2019. For the three months ended Sept. 30, 2020, Callon drilled zero horizontal wells and placed a combined 12 gross (11.4 net) horizontal wells on production, all of which were turned to production late in the quarter. The Company reactivated two completion crews, one each in the Eagle Ford and Delaware Basin, both of which completed previously drilled multi-well projects during September. Subsequently, one of the two completion crews has been released and three drilling rigs have resumed operations, two restarting operations in the Midland and Delaware Basin during September and the third reactivated in the Eagle Ford during October. The Company expects to operate three drilling rigs and a single completion crew during the fourth quarter. Recent project costs and well performance reflect a continuation of the operational efficiency levels achieved during the second quarter of 2020 and support the enhanced stacking and spacing efforts. Some of the highlights include: * The Eagle Ford wells placed on production late in the third quarter averaged over 2,000 feet of completed lateral per day * The combined six wells came in just below $475 per lateral foot with an average completed lateral length of approximately 7,500 feet * In the Delaware, the six-well Amphitheater pad was placed on production during the final days of the third quarter and first week of the fourth quarter, with the project averaging a completion pace of just under nine stages per day or nearly 1,800 lateral feet per day * The Amphitheater project averaged approximately 9,400 feet per well with an average well cost of less than $8 million ($825 per lateral foot) * Initial production from the six-well Amphitheater pad recently reached a per well average of over 1,200 Boe per day (gross, ~84% oil) with total cumulative production of more than 140,000 Boe (gross, ~84% oil) in just over three weeks of production * Over 95% of the volumes sourced for the Amphitheater completions utilized recycled produced water volumes sourced from Callon's own recycling facilities A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/928022/000092802220000166/cpe-20200930.htm About Callon Petroleum Callon Petroleum -- http://www.callon.com/-- is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas. * * * As reported by the TCR on June 25, 2020, S&P Global Ratings raised its issuer credit rating on Callon Petroleum Corp. to 'CCC+' from 'CC' after the company announced the termination of its exchange offer and consent solicitations, which the rating agency viewed as a distressed transaction. CALLON PETROLEUM: Signs Exchange Agreement with Noteholders ----------------------------------------------------------- Callon Petroleum Company entered into an exchange agreement by and among the Company and certain holders of the Company's (i) 6.250% Senior Notes Due 2023, (ii) 6.125% Senior Notes Due 2024, (iii) 8.250% Senior Notes Due 2025, and (iv) 6.375% Senior Notes Due 2026. Pursuant to the Exchange Agreement, the Company has agreed to exchange $286.0 million of aggregate principal amount of 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes held by the Holders for $158.5 million aggregate principal amount of newly issued 9.00% Second Lien Senior Secured Notes due 2025 at exchange ratios of $650, $575, $480 and $460 per $1,000 principal amount of 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes, respectively, tendered. Pursuant to the Exchange Agreement, the Company has also agreed to issue to the Holders approximately 1.16 million warrants exercisable for shares of common stock, par value $0.01, of the Company. The New Notes will be issued under the Company's indenture, dated as of Sept. 30, 2020, among the Company and U.S. Bank National Association, as trustee and collateral agent. Until the fifth business day after the announcement of the debt exchange, the Holders and their affiliates may elect to include in the exchange up to an additional $104.0 million of Senior Unsecured Notes for New Notes at the Exchange Ratios. In the event the aggregate principal amount of Senior Unsecured Notes exchanged for New Notes at Closing is greater than $286.0 million, the Company will increase proportionally the number of Warrants to be issued to the Holders up to a warrant eligibility cap of $375.3 million. The maximum number of Warrants issuable to the Holders at Closing will be approximately 1.76 million. In connection with the issuance of the Warrants at Closing, the Exchange Agreement provides that the Company will enter into a Warrant Agreement with American Stock Transfer & Trust Company, LLC, as warrant agent, which among other things, will authorize and establish the terms of the Warrants, including an initial exercise price per share of $5.59646634, subject to adjustment. The Warrants will be exercisable until the date that is five years after the date of the Closing. The Warrants will only be exercisable on a cashless net exercise basis and will be subject to certain anti-dilution adjustments. In connection with the issuance of the Warrants at Closing, the Exchange Agreement provides that the Holders have the option to request the Company to, subject to certain exceptions, prepare and file a registration statement under the Securities Act of 1933, as amended with the Securities and Exchange Commission to permit the public resale of the Common Stock issuable upon the exercise of the Warrants within 90 days of the Original Indenture and to be declared effective by the Commission as soon as reasonably practicable thereafter. Subject to the satisfaction of the terms and conditions set forth in the Exchange Agreement, the transactions contemplated by the Exchange Agreement are expected to close on the date that is five business days after the Holder Group Close Date or such other date as the parties thereto may mutually agree upon. The New Notes and Warrants will be issued to the Holders pursuant to an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereunder. The New Notes and Warrants will not be registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. Evercore acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to the Company for the debt exchange. About Callon Petroleum Callon Petroleum -- http://www.callon.com/-- is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas. As of Sept. 30, 2020, the Company had $4.93 billion in total assets, $3.73 billion in total liabilities, and $1.20 billion in total stockholders' equity. * * * As reported by the TCR on June 25, 2020, S&P Global Ratings raised its issuer credit rating on Callon Petroleum Corp. to 'CCC+' from 'CC' after the company announced the termination of its exchange offer and consent solicitations, which the rating agency viewed as a distressed transaction. CASCADES OF GROVELAND: Hires Mateer Harbert as Special Counsel -------------------------------------------------------------- The Cascades of Groveland Homeowners' Association, Inc.received approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ the law firm of Mateer Harbert as its special appellate counsel. Mateer Harbert will represent the Debtor in the potential legal malpractice action against Larsen & Associates, P.L., Thomas Slaten, Esq. and Aristides J. Diaz, Esq., as well any lien, set off or counterclaim raised by the defendants. The Firm will render these services: -- reviewing the record from the lawsuit, as needed; -- conferring with the Debtor; -- participating in mediation; -- conducting research; -- drafting pleadings and papers; and -- performing any other legal services that may be appropriate in connection with the appellate case. The firm will be compensated at the its standard hourly rates, which now range from $140 to $495. Richard L. Allen, Jr., the member of the firm who will be supervising the representation, will charge the discounted rate of $250 per hour for his services. The firm is not requiring the Debtor to pay a retainer, but as additional compensation the Debtor has agreed to pay the firm 25 percent of the recovery of the proceeds received in the action against Larsen. The firm can be reached through: Richard L. Allen, Jr., Esq. Mateer & Harbert Landmark Center II 225 East Robinson Street #600 Orlando, FL 32801 Phone: +1 407-425-9044 About The Cascades of Groveland Homeowners' Association The Cascades of Groveland Homeowners' Association, Inc., is a non-profit homeowner's association operating under Chapter 720, Florida Statute's. The Association's homeowners constitute a community known as "Trilogy Orlando" located in Groveland, Fla. The Cascades of Groveland Homeowners' Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-04077) on June 21, 2019. In the petition signed by Brian Feeney, president, the Debtor estimated assets of between $1 million and $10 million and liabilities of the same range. Judge Karen S. Jennemann oversees the case. The Debtor tapped Nardella & Nardella, PLLC as bankruptcy counsel, and Weiss Serota Helfman Cole & Bierman, P.L. and Becker & Poliakoff, P.A. as special counsel. CBL & ASSOCIATES: Moody's Affirms Ca CFR & Alters Outlook to Stable ------------------------------------------------------------------- Moody's Investors Service affirmed the ratings of CBL & Associates Limited Partnership, including the senior unsecured debt rating at C and the corporate family rating at Ca. The speculative grade liquidity rating remains unchanged at SGL-4. The rating outlook was changed to stable from negative. The following ratings were affirmed: Issuer: CBL & Associates Limited Partnership: -- Senior Unsecured Debt Rating at C -- Corporate Family Rating at Ca Outlook Action: Issuer: CBL & Associates Limited Partnership -- Rating outlook to Stable from Negative RATINGS RATIONALE On November 2, 2020, CBL and certain other related entities have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, in Houston, TX in order to implement a plan to recapitalize the company, including restructuring portions of its debt. CBL has an unsustainable capital structure which left the REIT with limited financial flexibility even prior to the disruption caused by COVID-19. Subsequent to the actions, Moody's will withdraw the ratings due to CBL's bankruptcy filing. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in September 2018. CBL & Associates Limited Partnership is the operating partnership of CBL & Associates Properties, Inc. [NYSE: CBL], which is a retail REIT headquartered in Chattanooga, Tennessee. 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 as of June 30, 2020. CEC ENTERTAINMENT: Court OKs Creditor Voting on Bankruptcy Plan --------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that bankrupt CEC Entertainment won court approval to gather votes on its bankruptcy plan, which would hand control of the company to lenders. U.S. Bankruptcy Judge Marvin Isgur ruled in a hearing Wednesday, November 4, 2020, that Chuck E. Cheese parent CEC's disclosure statement contains enough information for creditors to vote on the plan. CEC's proposal calls for handing first-lien lenders most of the equity in the reorganized business while giving unsecured bondholders rights to buy 10% of that stock and setting aside a $5.5m cash pool for general unsecured creditors, Matt Barr of Weil Gotshal & Manges said on behalf of the company. About CEC Entertainment CEC Entertainment is a family entertainment and dining company that owns and operates Chuck E. Cheese and Peter Piper Pizza restaurants. As of Dec. 31, 2019, CEC Entertainment and its franchisees operate a system of 612 Chuck E. Cheese restaurants and 129 Peter Piper Pizza stores, with locations in 47 states and 16 foreign countries and territories. Visit http://www.chuckecheese.comfor more information. CEC Entertainment recorded a net loss of $28.92 million for the year ended Dec. 29, 2019, compared to a net loss of $20.46 million for the year ended Dec. 30, 2018. As of Dec. 29, 2019, CEC Entertainment had $2.12 billion in total assets, $1.90 billion in total liabilities, and $213.78 million in total stockholders' equity. On June 24, 2020, CEC Entertainment and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33163). Judge Marvin Isgur oversees the cases. Debtors have tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel, FTI Consulting, Inc. as financial advisor, PJT Partners LP as investment banker, Hilco Real Estate, LLC as real estate advisor, and Prime Clerk, LLC, as claims, noticing and solicitation agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on July 13, 2020. The committee has tapped Kelley Drye & Warren, LLP and Womble Bond Dickinson (US), LLP as its legal counsel, and Alvarez & Marsal North America, LLC as its financial advisor. CEC ENTERTAINMENT: Taps KPMG to Provide Accounting Services ----------------------------------------------------------- CEC Entertainment, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire KPMG LLP to provide them with valuation, accounting, and financial reporting services. The firm's services are as follows: Valuation Services ASC Topic 805 i. Reorganization value. Read and identify potential issues with reconciling the enterprise value approved by the court and adjustments necessary to arrive at reorganization value, which is a concept under ASC 852. Additionally, determine the reconciliation of enterprise value to the Debtors' reporting units as part of postemergence reporting; ii. Identify assets & liabilities. Obtain and read the Debtors' historical financial statements and detailed financial records, conduct interviews with Debtors' management, and conduct site visits as necessary, to identify assets and liabilities by reporting unit, regardless of whether those assets and liabilities are currently recorded. However, ultimately it is Debtors' responsibility to ensure all assets and liabilities required in accordance with ASC 852 have been identified; iii. Fair values. Discuss the aforementioned assets and liabilities with Debtors' management to determine which assets and liabilities will be valued by KPMG and those that are not within scope. Prepare fair value estimates for each identified asset and liability by reporting unit within our scope as of the date of the Debtors' emergence from bankruptcy; and iv. Goodwill. Determine the difference, if any, between reorganization value and the fair value of the Subject Assets and Liabilities identified and valued by reporting unit. ASC Topic 350 and ASC Topic 718 (if required) i. Goodwill and Indefinite-lived asset Impairment Testing. Assist the Debtors in their impairment testing under ASC Topic 350, Intangibles - Goodwill and Other, related to goodwill and indefinite-lived intangible assets to meet its financial reporting requirements, if required; and ii. Share-based payments. Prepare fair value estimates with respect to option valuation as it relates to the Debtors' accounting for share-based compensation under ASC Topic 718, Compensation - Stock Compensation to meet its financial reporting requirements, if required. As set forth by ASC Topic 718, the premise of value for this analysis is fair value. Fair value is defined in FASB Concepts Statement No. 7, Using Cash Flow Information and Present Value in Accounting Measurements, and is cited in ASC Topic 718 as follows: "The fair value of an asset (or liability) is the amount at which that asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale." KPMG is not a stock plan administrator and thus will not provide stock plan administrative services. Accounting and Financial Reporting Services i. Fresh-Start/Acquisition Accounting Approach and Work Steps: Consideration of the alternatives in qualification, approach, timing, order, and adoption dates for fresh-start reporting, the alternatives for on-going efficient processing of detailed accounting records, and the potential approaches for updating detailed records to reflect changes in values and the new accounting requirements following emergence; ii. Change in ownership. Evaluation of whether the conditions in Financial Accounting Standards Board, ("FASB") Accounting Standards Codification ("ASC") 852 are met to justify adoption of a new, fresh-start basis by determining whether there is a change in ownership before confirmation and after emergence; iii. Issues & documentation. Researching and documenting (memoranda, discussions with the Debtors' independent auditors, Deloitte, as required, etc.) to support the accounting and reporting conclusions reached in accordance with ASC 852; iv. Segregation liabilities. Identification and segregation of liabilities that arose before and after filing to reflect the liabilities subject to the bankruptcy process; v. Claims. Monitoring the bankruptcy proceedings to (i) compare the claims filed, allowed, and existing debtor balances (particularly for trade vendors) to (ii) adjust the existing payables to the allowed claims and (iii) estimate claims to be settled upon emergence (failure to properly estimate the claims to be settled at emergence will impact post-emergence earnings); vi. Reporting classifications. Identification and segregation of pre-emergence expenses, restructuring costs, and losses for classification in a special category called "reorganization items" to properly portray amounts from activities to restructure the operations prior to emergence; vii. Leases. Consideration of the impact of bankruptcy proceedings and landlord negotiations on accounting for lease contracts; viii. Asset Retirement Obligations. Consideration of issues related to the recognizing obligations from the retirement of tangible long-lived assets; ix. Top level reporting. Assessment of the degree to which top side adjustments and disclosures are utilized to report on a fresh-start basis from the date of emergence until such amounts are recorded to your detailed accounting records; x. Detailed accounting records. Developing an approach to repopulating detailed records with new fair values and asset lives providing electronic files and assistance with updating fixed asset and other detailed accounting records with the concluded fair values; xi. Consolidation. Assist with design and testing of journal entries to reflect legal entity reorganization and related consolidation at the parent entity and subordinate levels within the legal entity tree; xii. Develop a planning summary that considers various alternative approaches to timing, effective date, valuation approach, extent of top side versus push down recognition of the new values, and the benefits and implications of each for your consideration of the desired approach on each major asset category; and xiii. Assist the Debtors with documenting its approach to identified assets and liabilities. The hourly rates for valuation, accounting and financial reporting services to be rendered by KPMG as follows: Partners/Principals/Managing Directors $670 Senior Managers/Directors $580 Managers $510 Senior Associates $400 Associates $280 Michael G. Nesta, a partner at KPMG LLP, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael G. Nesta KPMG LLP 2323 Ross Avenue, Suite 1400 Dallas, TX 75201-2721 Telephone: (214) 840-2000 Facsimile: (214) 840-2297 About CEC Entertainment Inc. CEC Entertainment -- http://www.chuckecheese.com-- is a family entertainment and dining company that owns and operates Chuck E. Cheese and Peter Piper Pizza restaurants. As of Dec. 31, 2019, CEC Entertainment and its franchisees operated a system of 612 Chuck E. Cheese restaurants and 129 Peter Piper Pizza stores, with locations in 47 states and 16 foreign countries and territories. As of Dec. 29, 2019, CEC Entertainment had $2.12 billion in total assets, $1.90 billion in total liabilities, and $213.78 million in total stockholders' equity. On June 24, 2020, CEC Entertainment and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33163). Judge Marvin Isgur oversees the cases. The Debtors have tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel, FTI Consulting, Inc. as financial advisor, PJT Partners LP as investment banker, Hilco Real Estate, LLC as real estate advisor, and Prime Clerk, LLC, as claims, noticing and solicitation agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on July 13, 2020. The committee has tapped Kelley Drye & Warren, LLP and Womble Bond Dickinson (US), LLP as its legal counsel, and Alvarez & Marsal North America, LLC as its financial advisor. CEC ENTERTAINMENT: Unsecureds to Split $5.5 Million in Plan ----------------------------------------------------------- CEC Entertainment, Inc., et al., submitted an Amended Joint Chapter 11 Plan. Exit Facility means a $200 million first lien first out term loan facility, subject to increase as necessary to repay the DIP Claims and fund the go-forward liquidity requirements of the Reorganized Debtors to be provided by the Exit Facility Lenders. Class 3: First Lien Debt Claims totaling $864 million are impaired. Each holder of such Allowed First Lien Debt Claim shall receive, in full and final satisfaction of such Allowed First Lien Debt Claim, pursuant to the Restructuring Transactions, its Pro Rata Share of (a) 100% of the New Equity Interests, subject to dilution by the (w) New Warrant Equity (if any), (x) Exit Facility Equity, (y) Exit Facility Put Option Premium, and (z) MIP Equity, and (b) the New Second-Out Term Loan. Class 4: Senior Unsecured Notes Claims totaling $215.7 million are impaired. Each holder of an Allowed Senior Unsecured Notes Claim shall receive, in full and final satisfaction of such Senior Unsecured Notes Claim, pursuant to the Restructuring Transactions, its Pro Rata Share of the New Warrants, subject to dilution by the MIP Equity. Class 5: General Unsecured Claims are impaired. Each holder of an Allowed General Unsecured Claim shall receive a GUC Trust Interest, which shall entitle each holder of an Allowed General Unsecured Claim to receive, in full and final satisfaction of such Allowed General Unsecured Claim, its Pro Rata Share of the GUC Trust Assets after the GUC Trust Expenses have been paid in full or otherwise reserved for. "GUC Trust Assets" means the GUC Cash Pool and any proceeds thereof. "GUC Cash Pool" means cash in an amount of $5.5 million to be transferred to the GUC Trust on the Effective Date and administered by the GUC Trustee for purposes of (i) satisfying the obligations of the GUC Trust, including the GUC Trust Expenses and (ii) making distributions to GUC Trust Beneficiaries in accordance with the GUC Trust Agreement and Section 4.5 and 5.13 of the Plan." Class 7: Subordinated Claims are impaired. All Subordinated Claims, if any, shall be discharged, cancelled, released, and extinguished, and shall be of no further force or effect, and holders of Allowed Subordinated Claims shall not receive any distribution on account of such Allowed Subordinated Claims. Class 8: Existing Queso Interests are impaired. Existing Queso Interests shall be cancelled, released, and extinguished and shall be of no further force or effect, whether surrendered for cancellation or otherwise, and each holder of Existing Queso Interest shall receive no recovery. The Debtors or Reorganized Debtors, as applicable, shall fund distributions and satisfy applicable Allowed Claims under the Plan (other than Allowed General Unsecured Claims) with Cash on hand, the Exit Facility, the New Second-Out Term Loan Facility, the New Equity Interests, and the New Warrants (if applicable). A full-text copy of the Amended Joint Chapter 11 Plan dated October 28, 2020, is available at https://tinyurl.com/y62ccb6n from PacerMonitor.com at no charge. Attorneys for the Debtors: Alfredo R. Pérez Clifford W. Carlson WEIL, GOTSHAL & MANGES LLP 700 Louisiana Street, Suite 1700 Houston, Texas 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 - and - Matthew S. Barr Ryan Preston Dahl Scott R. Bowling Lauren Tauro WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 About CEC Entertainment CEC Entertainment -- http://www.chuckecheese.com-- is a family entertainment and dining company that owns and operates Chuck E. Cheese and Peter Piper Pizza restaurants. As of Dec. 31, 2019, CEC Entertainment and its franchisees operated a system of 612 Chuck E. Cheese restaurants and 129 Peter Piper Pizza stores, with locations in 47 states and 16 foreign countries and territories. As of Dec. 29, 2019, CEC Entertainment had $2.12 billion in total assets, $1.90 billion in total liabilities, and $213.78 million in total stockholders' equity. On June 24, 2020, CEC Entertainment and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33163). Judge Marvin Isgur oversees the cases. The Debtors have tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel, FTI Consulting, Inc. as financial advisor, PJT Partners LP as investment banker, Hilco Real Estate, LLC as real estate advisor, and Prime Clerk, LLC, as claims, noticing and solicitation agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on July 13, 2020. The committee has tapped Kelley Drye & Warren, LLP and Womble Bond Dickinson (US), LLP as its legal counsel, and Alvarez & Marsal North America, LLC as its financial advisor. CENTRAL PROCESSING: IRS Not Entitled to Disgorgement of Fees ------------------------------------------------------------ The United States of America, on behalf of the Internal Revenue Service, requested dismissal of Central Processing Services, LLC's chapter 11 bankruptcy case. The bankruptcy court granted that request. After the case was dismissed, the United States filed a motion to disgorge fees paid to professionals hired by the Debtor to aid it throughout the bankruptcy process. The bankruptcy court denied the motion and the United States appealed. Upon review, District Judge Terrence G. Berg affirmed the bankruptcy court's decision. Judge Berg stated that the IRS would have been entitled to disgorgement in order to receive its fair share of the estate had it converted the case to a Chapter 7 instead of dismissing it. This order by Judge Berg pertains to the first of two appeals from the bankruptcy court case. CPS is in the business of providing printing, mailing, and lockbox services in the fundraising and medical industries. Its customers are primarily charitable organizations. The owners of CPS are Richard T. Cole and Robert W. Burland. Cole and Burland also own other businesses. One of them, Associated Community Services, Inc. ("ACS"), is in the business of soliciting donations for charitable organizations by direct mail and telephone. ACS previously filed its own Chapter 11 case on March 13, 2014, case number 14-44095. The largest creditor in the ACS Case was the IRS. Early in the ACS Case, the IRS filed a proof of claim for more than $15 million of unpaid withholding and other employment-related taxes. ACS objected to the proof of claim. After extensive litigation, ACS and the IRS agreed to an order that allowed the IRS a claim of just under $12 million. As part of the settlement, CPS agreed to guarantee part of ACS's debt to the IRS. On March 6, 2019, CPS filed this Chapter 11 case. The IRS is by far the largest creditor in the case. CPS's schedules list the IRS as holding a claim of more than $9 million, based on the guaranty. The IRS filed an amended proof of claim in the CPS case on June 25, 2019 in the amount of $6,896,267.83. Much like the ACS Case, the predominant issue in the CPS case was the treatment of the IRS's claim. On June 28, 2019, CPS filed an objection to the IRS's proof of claim. The IRS filed a response, and the bankruptcy court heard the objection on August 16, 2019. On Sept. 5, 2019, the bankruptcy court issued an opinion holding that the IRS's allowed claim was entitled to priority under section 507(a)(8) of the Bankruptcy Code. That meant that, under section 1129(a)(9)(C) of the Bankruptcy Code, the IRS would have to receive the total value of its allowed claim on the effective date of any confirmed plan of reorganization. While CPS and the IRS litigated over the allowance and priority of the IRS's proof of claim, the IRS was also active in seeking other relief in this case. On August 1, 2019, the IRS filed a motion to dismiss this Chapter 11 case. The IRS argued in the Dismissal Motion that there was cause for dismissal under section 1112(b)(1) of the Bankruptcy Code for two reasons. First, cause existed under section 1112(b)(4)(A) because of a substantial, continuing loss to the CPS estate and the absence of any reasonable likelihood of rehabilitation. Second, cause existed under section 1112(b)(4)(I) because CPS failed to timely pay post-petition taxes to the IRS. On Sept. 23, 2019, the bankruptcy court entered an order dismissing the case to avoid further delay. The dismissal order states that the dismissal motion is granted and that the Chapter 11 case is dismissed under section 1112(b) of the Bankruptcy Code. The dismissal order grants only the relief requested in the dismissal motion -- i.e., dismissal of the Debtor's Chapter 11 case -- and contains none of the additional provisions that the IRS described in the draft of the revised proposed order that it handed to the bankruptcy judge at the hearing. After the case was dismissed, but within the time set by the court, the IRS filed a motion for an accounting, disgorgement, and other relief. On Nov. 5, 2019, the bankruptcy court issued an opinion and order denying the IRS's motion. The court found that it had jurisdiction over the disgorgement motion because the acts giving rise to the motion occurred while CPS was a debtor. However, the court declined to exercise its jurisdiction. It found that the request for an accounting was a discovery request and that, because there was no pending matter within the bankruptcy case, there would be no bankruptcy-law purpose to granting such discovery. Further, although the court agreed that all administrative expense claims were entitled to pro rata treatment, it declined to order such treatment because there had been no distribution of estate property and would be no distribution of estate property because the case had been dismissed and the property had revested. This appeal followed. According to Judge Berg, the central issue is whether the bankruptcy court erred by declining to exercise jurisdiction to disgorge fees rendered to Debtor's professionals after dismissing this Chapter 11 case. The IRS argued that declining to disgorge the fees was error. It says the bankruptcy court was obligated to disgorge the professionals' fees to ensure that the IRS's administrative claims for taxes owed were paid pro rata with the Debtor's professionals' fees. In support, the IRS said that the claims of the professionals and the post-petition employment taxes owed to the IRS are entitled to the same priority under section 507(a)(2) inasmuch as both classified as administrative claims under section 503(b). As there is nothing that would abrogate that priority order, all the administrative claims should have been paid pro rata. The IRS is correct that equitable distribution of a debtor's assets is a core goal of the Bankruptcy Code, Judge Berg said. The Code is designed to eliminate all special individual priorities and preferences so that creditors may share in the bankrupt estate equally, within their class. However, the goal and requirement of pro rata distribution has no applicability to a dismissed Chapter 11 case where the estate's assets are never distributed. The IRS argued that bankruptcy courts are prohibited from ordering final distributions that violate the priorities set forth in the Bankruptcy Code when dismissing Chapter 11 cases. According to the IRS, there is no reason to believe this ruling is limited to structured dismissals, and that therefore a bankruptcy court cannot circumvent the priority structure of the Code by refusing to rule. However, Judge Berg pointed out, the court in this case did not aim to distribute the estate in any order of priority. Accordingly, it could not have "circumvented the priority structure" set forth in the section 507 of the Code. The court simply dismissed the case and retained jurisdiction to review fee applications or other final matters. The only motion the bankruptcy court decided to retain jurisdiction over was the final fee applications submitted by the Debtor's professionals. The final fee applications had no impact on the IRS's right to any of its own claims paid out pro rata. Judge Berg said the bankruptcy court had a statutory basis entirely separate from section 507 on which to distribute the Debtor's professionals' fees. Payment of professionals' fees is governed by 11 U.S.C. section 330, which states that a professional can be paid on a fairly timely basis, and reasonably expect to be able to retain those fees as long as he or she has not acted in the manner proscribed by section 330. It is significant that there is no reference in this provision to sections 507, 503, 1112, or 726, indicating that the court's ability to review fee petitions is independent of the authority under which it resolves the case. If the IRS wanted a pro rata distribution from the estate, the method to achieve that would have been for the United States to convert the case to a Chapter 7 instead of dismissing it. A Chapter 7 case explicitly provides for liquidation of the estate upon conversion. The appeals case is in re: THE UNITED STATES OF AMERICA, Appellant, v. CENTRAL PROCESSING SERVICES, L.L.C., Appellee, No. 2:19-13427 (E.D. Mich.) A copy of the Court's Order is available at https://bit.ly/3o38JBO from Leagle.com. About Central Processing Services Central Processing Services, LLC, based in Southfield, Mich., is a provider of printing, mailing and lockbox services in the fundraising and medical industries. The Debtor filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 19-43217) on March 6, 2019. The case was pending for just about six months. On August 1, 2019, the United of America, on behalf of the Internal Revenue Service, moved to dismiss the Debtor's case, which the Court granted at a hearing on September 6, 2019. In the petition signed by Richard T. Cole, authorized member, the Debtor estimated $1 million to $10 million in assets, and $10 million to $50 million in liabilities. The Hon. Maria L. Oxholm oversees the case. John J. Stockdale, Jr., Esq., at Schaefer and Weiner, PLLC, serves as bankruptcy counsel, and Harmon Partners, LLC, is the financial advisor. CENTRAL PROCESSING: IRS Waived Right to Seek Reconsideration ------------------------------------------------------------ The United States of America, on behalf of the Internal Revenue Service, requested dismissal of Debtor Central Processing Services, LLC chapter 11 bankruptcy case. The bankruptcy court granted that request. After the case was dismissed, the United States filed a motion to disgorge fees paid to professionals hired by the Debtor to aid it throughout the bankruptcy process. The bankruptcy court denied the motion and the United States appealed. Upon review, District Judge Terrence G. Berg affirmed the bankruptcy court's decision. This order pertains to the second of two appeals from the bankruptcy court case. The first appeal challenged the bankruptcy court's order denying the motion for disgorgement on the merits. This appeal challenged the bankruptcy court's conclusion that the United States waived its opportunity to file a motion for reconsideration of the same order. According to Judge Berg, the bankruptcy court did not err in its judgment that the US waived the right to ask for reconsideration of the accounting/disgorgement motion. The United States did not have a meritorious argument. The Chapter 11 case was dismissed on Sept. 23, 2019. In the order on dismissal, the bankruptcy judge permitted the parties to file any fee applications or other requests for relief no later than Oct. 7, 2019. On Oct. 2, 2019, the Debtor's professionals filed applications for compensation, or fee applications, for their services during the case pursuant to 11 U.S.C. section 330. The IRS also filed a post-dismissal request for relief on Oct. 4. The request was a motion for an accounting and disgorgement of the Debtor's professionals' fees. The Debtor objected. On Oct. 29, 2019, the Court held a hearing and took the disgorgement motion under advisement. While the parties were awaiting the hearing on the fee applications, the bankruptcy court entered an order denying the United States' motion to disgorge on Nov. 5. The United States appealed that order to the District Court on Nov. 20. At the Nov. 22 hearing on the fee applications the United States made an oral motion for reconsideration of the disgorgement motion or, in the alternative, for the bankruptcy court to abstain from ruling on the fee applications. On Dec. 3, the bankruptcy court issued orders granting in part and denying in part the fee applications and denying the United States' oral motion for reconsideration or abstention. The bankruptcy judge found that the United States had waived those arguments because it did not raise them in writing or at any time before the hearing. The bankruptcy judge added that the United States cited no case law in support of its oral requests. This appeal followed. The United States argued that the bankruptcy court erred in holding that the United States waived the right to ask for reconsideration of the accounting/disgorgement motion by waiting until the hearing on the fee applications to make an oral motion. By the time the disgorgement motion was denied, the United States says, the briefing on the fee applications was complete. Accordingly, the fee hearing was the most "logical" time to make the motion. This, however, does not excuse the United States' failure to raise the issue before the hearing, Judge Berg said. It had multiple chances to mount this argument and it failed to do so. The United States could have included this argument in the objection to the fee applications. The United States filed its objections to the fee applications on Oct. 22, 2019. Even though the hearing was not held for another month, the IRS did not raise in its objections to the fee applications its concern about the pending motion on disgorgement. Moreover, the bankruptcy court definitively ruled it would not exercise jurisdiction over the United States' motion to disgorge on Nov. 5, 2019. The hearing on the fee applications was not to take place until Nov. 22, 2019. This means the United States had over two weeks (17 days) to supplement its briefs and incorporate any argument regarding the disgorgement motion, or to ask for additional time to do so, and thereby indicate that it wanted the disgorgement motion ruling to be discussed at the hearing. However, the United States did not ask for additional time, did not supplement its objections, and did not alert the Debtor to these new arguments before the hearing. As the bankruptcy judge stated, "[b]asically, the IRS just showed up and surprised everyone at the hearing by opening its remarks with four entirely new arguments that were not addressed either directly or indirectly in the IRS Objection." According to Judge Berg, it is a well-established procedural rule in the Sixth Circuit that failure to raise an argument in a motion acts as a waiver of that argument. One of the primary purposes of this rule is to give the other party "a fair opportunity to respond to all arguments." The United States did not properly put the motion in writing, pursuant to Local Bankr. R. 9024-1(a)(4), nor did it give any indication to the Debtor that it was going to make this argument before the hearing. Accordingly, the bankruptcy court did not err by deeming it waived. The United States said its oral motion for reconsideration was made at the most "logical" time, given the motion was conditional on the bankruptcy judge's granting of the professionals' fee applications. In other words, the United States suggests that it would have had no reason to file a motion for reconsideration on the disgorgement motion unless and until the bankruptcy judge granted the fee applications. No matter -- a party may not circumvent the procedural rules based on its litigation strategy. According to Judge Berg, the United States was perfectly capable of filing a motion for reconsideration of its disgorgement motion within 14 days of when it was denied, at the very least, to preserve the right to do so. The United States could have also asked the bankruptcy judge for an extension of time to file such a motion in order to assess its options based on what happened with the fee applications. The United States did neither. Instead, it appealed the disgorgement motion to this Court on Nov. 20, 2019, without having made a motion for reconsideration with the bankruptcy court, which would have extended the deadline to file an appeal with this Court. The United States then chose to make an oral motion for reconsideration at the fee application hearing two days later. In addition, as the bankruptcy judge pointed out, the United States cited no law in support of its argument In sum, as much as the United States wants this procedural route to be proper, it is not, Judge Berg said. It has no basis in the Code or procedural rules. The Court declined to remedy the situation caused by counsel's strategic choices at this point in the case. The bankruptcy court did not err in holding the arguments made at the hearing were waived. Moreover, it makes no difference. The United States does not have a meritorious argument. The appeals case is in re: THE UNITED STATES OF AMERICA, Appellant, v. CENTRAL PROCESSING SERVICES, L.L.C., Appellee, No. 2:19-13711 (E.D. Mich.). A copy of the Court's Order is available at https://bit.ly/2TbsDMx from Leagle.com. About Central Processing Services Central Processing Services, LLC, based in Southfield, Mich., is a provider of printing, mailing and lockbox services in the fundraising and medical industries. The Debtor filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 19-43217) on March 6, 2019. The case was pending for just about six months. On August 1, 2019, the United of America, on behalf of the Internal Revenue Service, moved to dismiss the Debtor's case, which the Court granted at a hearing on September 6, 2019. In the petition signed by Richard T. Cole, authorized member, the Debtor estimated $1 million to $10 million in assets, and $10 million to $50 million in liabilities. The Hon. Maria L. Oxholm oversees the case. John J. Stockdale, Jr., Esq., at Schaefer and Weiner, PLLC, serves as bankruptcy counsel, and Harmon Partners, LLC, is the financial advisor. CHEROKEE PHARMACY: McKesson's Claim Fully Secured, Court Rules -------------------------------------------------------------- In the Chapter 11 case of CP Liquidation of Cleveland, Inc., McKesson Corporation on April 23, 2020, filed a motion for determination of secured status. On May 8, 2020, the chapter 11 trustee of Debtors CP Liquidation of Cleveland, Inc., et al., filed an objection to McKesson's proof of claim. With the parties' consent, the court construed McKesson's motion as a motion for summary judgment and the trustee's objection as a cross-motion for summary judgment. Accordingly, Bankruptcy Judge Nicholas W. Whittenburg granted McKesson's motion for summary judgment in part and denied the trustee's motion for summary judgment. Judge Whittenburg held that as a matter of law, McKesson's claim is fully secured under 11 U.S.C. section 506(a). Thus, the Court granted McKesson's motion for determination of secured status in part. The Court overruled the trustee's objection to claim. Dr. Terry Forshee and his wife, Angela Forshee, are the sole shareholders, directors, and officers of Cherokee Pharmacy and Medical Supply of Dalton, Inc., a Georgia corporation. The company operated a retail drug store and pharmacy located in Dalton, Georgia. Dr. and Mrs. Forshee are also the sole shareholders, directors, and officers of Cherokee Pharmacy and Medical Supply, Inc., a Tennessee corporation. It operated a retail drug store and pharmacy located in Cleveland, Tennessee. In early January 2017, the Forshees agreed to sell all of their stock in Cherokee Pharmacy Cleveland and in Cherokee Pharmacy Dalton to Dr. Jonathan Marquess and Pamela Marquess. The Forshees and the Marquesses executed a Stock Purchase Agreement dated Jan. 15, 2017. However, the trustee contends the SPA may have been executed at a later date, perhaps Jan. 20, 2017. The Forshees agreed to sell all of their shares of stock in each company to the Marquesses for a purchase price of $1.6 million plus the cost of the inventory held by the two companies. Closing was to occur on or before January 30, 2017. Although contemplating a later closing date, the SPA expressly provides that "[the Marquesses] shall take possession of the [corporations'] locations on January 16, 2017, and shall begin operations of the businesses under a Power of Attorney signed by Sellers in favor of Purchasers on even date hereof." Both Cherokee Pharmacy Dalton and Cherokee Pharmacy Cleveland, through their president, Dr. Forshee, joined in and consented to the SPA. Although the SPA contemplated that the Forshees would execute the power of attorney simultaneously, they did not do so on Jan. 15, 2017. Instead, Dr. Forshee, as president of Cherokee Pharmacy Cleveland and Cherokee Pharmacy Dalton, executed powers of attorney dated Jan. 26, 2017. The power of attorney for Cherokee Pharmacy Dalton appointed Dr. Marquess as the company's attorney in fact and authorized him to execute all documents relating to the company's pharmaceutical licenses and registrations. Consistent with the SPA's provision for the Marquesses to "take possession of the [corporations'] locations . . . and . . . operations . . . under a Power of Attorney" the power of attorney also authorized Dr. Marquess "[t]o do any other thing or perform any other act . . . which [Cherokee Pharmacy Dalton] might do by and through its officers, it being intended that this shall be a general power of attorney." Before execution of the SPA and the power of attorney, Dr. Marquess submitted a customer application to McKesson on behalf of Cherokee Pharmacy Dalton dated Jan. 11, 2017. McKesson sells pharmaceutical goods and supplies to pharmacies such as Cherokee Pharmacy Dalton. It is undisputed that the customer application, if enforceable, granted McKesson a security interest in all of Cherokee Pharmacy Dalton's personal property. McKesson approved the customer application that Dr. Marquess submitted, and after receiving an executed copy of the power of attorney, accepted and fulfilled orders for pharmaceutical goods from Cherokee Pharmacy Dalton, beginning January 31, 2017. On February 15, 2017, Cherokee Pharmacy Dalton, through Dr. Marquess, executed a promissory note payable to McKesson in the principal amount of $67,997.80 representing the unpaid amount owing at that time for goods delivered to the company. The Forshees and the Marquesses never closed the stock purchase, but the Marquesses did pay $600,000.00 to the Forshees on Feb. 3, 2017, in partial satisfaction of the purchase price. Why closing was not completed is unclear. On April 28, 2017, Cherokee Pharmacy Dalton and Cherokee Pharmacy Cleveland filed voluntary petitions for relief under chapter 11 of the bankruptcy code. On August 25, 2017, McKesson filed proof of claim 6-1 in the Cherokee Pharmacy Dalton case in the total amount of $103,725.94. The claim consists of (i) $56,644.67 for unpaid installments due under the promissory note, and (ii) $47,017.18 for unsatisfied invoices entitled to priority treatment as administrative expenses pursuant to 11 U.S.C. sections 503(b)(2) and (9) and 507(a)(2). McKesson, relying on the security interest provided in the customer application, contends that the entire claim is secured. McKesson sought a determination by the bankruptcy court that its $103,725.94 claim, plus interest, late charges, and legal fees, is a fully secured claim. In his objection to McKesson's claim, the trustee did not dispute that the value of the estate's interest in the property encumbered by any security interest is such that McKesson's claim would qualify as a fully secured claim. Instead, the trustee challenged the validity of the security interest. Specifically, the trustee argued that Dr. Marquess was not Cherokee Pharmacy Dalton's agent with authority to execute the customer application, and therefore, the security interest contained therein is not binding on the company. Although not in the objection to claim, the trustee asserted in his reply to McKesson's motion that Dr. Marquess likewise lacked authority to execute the promissory note on behalf of Cherokee Pharmacy Dalton, so it too is unenforceable. Relying on O.C.G.A. section 14-2-1201(b)(2), the trustee argued that the granting of the security interest is unenforceable. That provision provides that "[a] corporation may, on the terms and conditions and for the consideration determined by the board of directors . . . [m]ortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of its property whether or not in the usual and regular course of business." Because the Forshees, the directors of Cherokee Pharmacy Dalton, did not expressly approve the "terms and conditions" of the pledge to McKesson through a resolution or otherwise, the trustee maintains that the security interest is void as an ultra vires act. It is undisputed that there is no board resolution specifically authorizing Dr. Marquess to encumber the company's assets on any terms. Nevertheless, that defense in not available to the trustee in this case, Judge Whittenburg said. According to Judge Whittenburg, the Forshees, the sole directors of the company, cloaked Dr. Marquess with apparent authority to grant the security interest to McKesson. They executed the SPA that expressly contemplated that the Marquesses would take possession of and begin operating Cherokee Pharmacy Dalton pursuant to a power of attorney. Then, Dr. Forshee, as president of the company, executed the power of attorney authorizing Dr. Marquess to engage in any act that might be done by Cherokee Pharmacy Dalton's officers. Georgia law authorizes corporations to pledge assets to secure its debts. McKesson reasonably and in good faith relied on the power of attorney when it sold goods to Cherokee Pharmacy Dalton on secured credit terms. Under those facts, neither the company nor its bankruptcy trustee may now disavow the terms of the customer agreement. Judge Whittenburg also held that the trustee is estopped from reliance on the ultra vires defense. As stated by the Supreme Court of Georgia, "[n]o application of the doctrine of ultra vires acts will allow a corporation to retain and use the benefits of a contract and at the same time refuse to comply with its part of the contract under which they were obtained." Again, McKesson reasonably honored orders placed by Cherokee Pharmacy Dalton's agent, Dr. Marquess, by delivering the pharmaceutical goods in reliance on the terms of the customer application. McKesson did not begin delivering goods until after receiving the power of attorney executed by the company's president. The scope of authority granted by the power of attorney was entirely consistent with provisions in the SPA signed by the company's sole shareholders and directors. Cherokee Pharmacy Dalton retained the goods delivered and sold some or all of them to its customers. The shareholders, directors, and officers of a company can not expressly delegate authority to Dr. Marquess to operate the company and then challenge the contracts he makes with vendors in reliance on that delegation. Cherokee Pharmacy Dalton and its bankruptcy estate are bound as a matter of law by all of the terms of the customer application, including the security interest granted to McKesson. Thus, McKesson's claim is fully secured under 11 U.S.C. section 506(a). The bankruptcy case is In re: CP Liquidation of Cleveland, Inc., et al., Chapter 11, Debtors, Joint Administration Case No. 1:17-bk-11920-NWW (Bankr. E.D. Tenn.). A copy of the Court's Memorandum is available at https://bit.ly/34TPdz0 froM Leagle.com. CHRISTOPHER RIDGEWAY: $2 Million Sanction Upheld ------------------------------------------------ For the last seven years, Christopher Martin Ridgeway and his former employer have waged scorched-earth lawfare against one another. Ridgeway has lost every battle and incurred millions of dollars in damages, sanctions, and attorney's fees along the way. In the appellate case captioned CHRISTOPHER MARTIN RIDGEWAY, Appellant, v. STRYKER CORPORATION; HOWMEDICA OSTEONICS CORPORATION, Appellees, No. 19-30791 (5th Cir.), Ridgeway sought to void one part of his litigation liabilities -- namely, a $2 million fee award. Upon review, the United States Court of Appeals, Fifth Circuit refused the request and affirmed the district court's decision. Between October 2001 and September 2013, Ridgeway worked for Howmedica Osteonics Corporation, a subsidiary of Stryker Corporation. Stryker believed Ridgeway intended to use its confidential business information at his next job. So Stryker sued Ridgeway in the United States District Court for the Western District of Michigan for breach of contract, breach of fiduciary duty, and misappropriation of trade secrets in violation of Michigan's Uniform Trade Secrets Act, Mich. Comp. Laws sections 445.1901 et seq. ("MUTSA"). A jury found that Ridgeway had breached his contractual obligations, breached his fiduciary duty, and violated MUTSA. The jury found the MUTSA violation was willful and malicious. The Fifth Circuit said the jury's finding is important because MUTSA permits a "court [to] award reasonable attorney's fees to the prevailing party" if "willful and malicious misappropriation [of trade secrets] exists." The Michigan district court entered judgment in Stryker's favor on March 9, 2016. That gave Stryker 14 days -- until the end of March 23 -- to request attorney's fees. On March 23, Ridgeway filed a Chapter 11 bankruptcy petition in the Eastern District of Louisiana. The automatic stay prevented Stryker from making an attorney's fee request in the Michigan proceedings. Instead, Stryker filed a proof of claim for those unliquidated attorney's fees, totaling $2,272,369.54, and supported by hundreds of pages of time entries billed by Stryker's lawyers. But the amount claimed -- and the corresponding time entries -- do not just relate to the lawyers' work on the MUTSA claim. Stryker says that, by virtue of the "Common Core" doctrine, its win on the MUTSA claim entitles it to attorney's fees related to all of its claims against Ridgeway. Ridgeway filed his initial objection to Stryker's proof of claim in December 2016. In that objection, Ridgeway argued that Stryker was entitled to nothing -- not MUTSA-related attorney's fees, and certainly not fees for the other claims. Ridgeway's view is that fee recovery under the Common Core doctrine "is reserved for fee awards in civil rights cases." Also in the December 2016 objection, Ridgeway faulted Stryker's attorneys for writing billing entries that did not sufficiently separate MUTSA work from work on other claims. He also cited 27 time entries that did clearly refer to MUTSA. On April 3, 2017, the bankruptcy court confirmed a plan of reorganization, effective April 13. The plan gave Ridgeway an additional 30 days from the effective date to levy additional challenges to creditors' claims. On April 6, 2017, the court held a scheduling conference with the intent to narrow the issues in dispute. In line with that aim, the court issued an order the following day attempting to focus the dispute over time entries: Purportedly in response to this April 7 order, Ridgeway filed on May 15 a document styled as a "Supplemental Objection" to Stryker's proof of claim. The Supplemental Objection included grounds not raised in the December 2016 objection. But the Supplemental Objection did not include any argument about the Common Core doctrine or a list of time entries. Seizing on this omission, Stryker argued that Ridgeway had violated the April 7 order and moved to strike the portions of Ridgeway's December 2016 objections that related to the Common Core doctrine. Ridgeway's retort was two-pronged: First, he asserted that "[n]owhere in [the April 7] order does the Court command the Debtor to prepare any lists related to its objections concerning the `common core' doctrine." Second, he argued that it was Stryker's job to identify the MUTSA entries. The bankruptcy court explained at a hearing in July 2017 that it had in fact expected to receive a list of time entries with objections -- including Common Core objections -- from Ridgeway by the May 15 deadline. Without that list, the judge was "sitting [t]here three months almost to the day after [the April] status conference with the ball having not moved down the field, perceptibly." Because Ridgeway did not identify specific time entries to which his Common Core objections applied, the court struck those objections. Ridgeway moved for reconsideration, again arguing that he'd complied with the April 7 order. Because the bankruptcy court had already rejected that exact argument, it denied the motion. In July 2018, after a lengthy evidentiary hearing, the bankruptcy court allowed Stryker's proof of claim, including fees claimed under the Common Core doctrine. The district court affirmed. Ridgeway timely appealed. Ridgeway said that only a jury can award MUTSA attorney's fees. He also claimed that the courts erred in striking his Common Core objections. Ridgeway raised a host of objections to the application of that doctrine in this case. Section 105(d) of the Bankruptcy Code permits the bankruptcy court to hold status conferences and issue orders "prescribing such limitations and conditions as the court deems appropriate to ensure that the case is handled expeditiously and economically." The purpose of the April 6 status conference was just that -- to narrow Ridgeway's objections because Ridgeway's Common Core objections were broad -- they included objections to three distinct types of billing entries: 1) Entries that relate solely to non-MUTSA claims (Category 1). 2) Entries that bill for both MUTSA and non-MUTSA claims without indicating how much time was spent for each (Category 2). 3) Entries where it's unclear whether any MUTSA-related work was performed (Category 3 The Fifth Circuit said it would have expedited the bankruptcy court's resolution of the claims if Ridgeway had placed his objections into three categories. That way, if the court concluded that the Common Core doctrine did not apply, it could have decided each claim quickly: It could disallow the Category 1 claims their entirety because they contain no MUTSA work; it could allow the Category 2 claims but only for the MUTSA portion of the work; and it could require Stryker to indicate what, if any, Category 3 work related to MUTSA. The April 7 order that followed the status conference sought to tease out these differences by requiring Ridgeway to "specify[] for each [time] entry [his] basis for claiming that [he] should not be liable." If, after compliance with the order, the court "concluded that Stryker was not entitled to claim the fees under the Common Core Doctrine," the court "could go through the time entries and accordingly allow or disallow amounts of the claim as appropriate. That was the gist of [the] order . . . ." In short, the terms of the April 7 order fell squarely within the bankruptcy court's power to expedite the case. The Fifth Circuit said Ridgeway didn't comply with that order. So the decision to strike the Common Core objections is best understood as a sanction. Just as the bankruptcy court had the authority to issue the April 7 order, so too could it punish Ridgeway for noncompliance. The Fifth Circuit also held Ridgeway has pointed to no lesser sanction that would have been appropriate for his violation of the April 7 order. The bankruptcy court's choice of sanction was therefore not an abuse of discretion. The lower court properly struck the Common Core objections. A copy of the Fifth Circuit's Ruling is available at https://bit.ly/2ImPV02 from Leagle.com. Christopher Martin Ridgeway filed a Chapter 11 bankruptcy petition (Bankr. E.D. La. Case No. 16-10643) on March 23, 2016, and was represented by attorneys at Adams and Reese, LLP. CINEMEX USA: MN Theaters May Seek Extension of Levy Period ---------------------------------------------------------- Chief United States Bankruptcy Judge Laurel M. Isicoff granted the request of MN Theaters 2006 LLC's for relief from the automatic stay in the Chapter 11 cases of Cinemex USA Real Estate Holdings, Inc., Cinemex Holdings USA, Inc., and CB Theater Experience LLC. MN Theaters 2006 LLC is authorized and permitted to seek an extension of the levy period with respect to the exempted property in a district court case to maintain the status quo, but, absent further order from the Court, shall take no other action with respect to the Exempted Property, Judge Isicoff said. MN Theaters sought relief from the automatic stay, to the extent the automatic stay may be implicated, to protect its rights under non-bankruptcy law and maintain the status quo in the litigation in the Southern District of New York between MN Theaters and Grupo Cinemex S.A. de C.V., the majority shareholder of Debtor Cinemex Holdings USA, Inc. and the debtor-in-possession financing lender in the Debtors' bankruptcy proceedings. MN Theaters sought stay relief to move the District Court for an extension of the levy that MN Theaters obtained on Grupo Cinemex's (i) ownership interests in Cinemex Holdings and (ii) right to repayment under the DIP financing. Pursuant to New York law, absent further order from the District Court, the levy could expire on November 2, 2020. MN Theaters does not believe that a request to extend the levy violates the automatic stay. The Exempted Property is not now nor has it ever been property of the Debtors. Rather, it is property of non-debtor Grupo Cinemex. And as such, the automatic stay does not apply to MN Theaters' levy on the property, which the Court recognized in ruling on the Debtors' motion for emergency relief in August. MN Theaters sought stay relief out of an abundance of caution. Prior to the Petition Date, Debtor CB Theater and MN Theaters were parties to two unexpired leases pursuant to which CB Theater, as tenant, leased nonresidential real property from MN Theaters, as landlord. Grupo Cinemex guaranteed CB Theaters' obligations under the Leases. Grupo Cinemex is not a debtor in this or, to MN Theaters' knowledge, any other bankruptcy case. On June 5, 2020, the Bankruptcy Court issued an Order authorizing the rejection of the Leases effective as of April 30, 2020. On July 29, 2020, MN Theaters commenced the District Court Case (Case No. 1:20-cv-05860-PKC) based on Grupo Cinemex's failure to comply with its obligations under the guaranties. On July 30, 2020, the District Court entered an Attachment Order. By the terms of the Attachment Order and New York law, service provided MN Theaters with a levy on Grupo Cinemex's property, including on the Exempted Property. On August 17, 2020, the Debtors commenced an adversary proceeding (Adv. Pro. No. 20-01310) against MN Theaters and filed an emergency motion seeking a declaration that MN Theaters violated the automatic stay by obtaining the Attachment Order and, alternatively, a preliminary injunction temporarily enjoining the District Court Case. On September 28, 2020, the Bankruptcy Court held that "the proceedings in the District Court Case up to and including entry of the Attachment Order did not constitute violations of the automatic stay[.]" The Court ordered further, however, that "any continuation of proceedings in the District Court Case to confirm the Attachment Order or to take any other act that provides MN Theaters with increased rights, in each case with respect to [the Exempted Property], or any other action in the District Court Case to determine what is property of the Debtors' estate is subject to the automatic stay[.]" At oral argument preceding the entry of the Stay Order, the Court explained that part of the basis of its decision to apply the automatic stay to any action providing MN Theaters "with increased rights" regarding the Exempted Property was that, pursuant to New York law, MN Theaters' levy against the Exempted Property would remain in place automatically for a period of at least 90 days from the date the levy was created, i.e., from August 3, 2020 through November 1, 2020. The Court recognized that, during that period, MN Theaters would continue to pursue attachment of the Grupo Cinemex's property, other than the Exempted Property, including seeking delivery of Grupo Cinemex's property to the U.S. Marshal in an amount sufficient to secure MN Theaters' claims in the District Court Case. The Court left open the possibility that, if Grupo Cinemex failed to deliver sufficient property before the Levy Period expired, MN Theaters would be permitted to seek relief from the Stay Order. To comply with the Stay Order, MN Theaters submitted a letter in the District Court Case, asking the District Court to stay a decision with respect to the Exempted Property, but to otherwise proceed, on MN Theaters' then-pending motion to confirm the Attachment Order and to compel delivery of Grupo Cinemex's property to the U.S. Marshal. On September 25, 2020, the District Court held oral argument on that motion and then entered an order confirming the Attachment Order. In the case captioned MN THEATERS 2006 LLC, Plaintiff, v. GRUPO CINEMEX, S.A. de C.V., Defendant, Civil Action No.: 20-cv-5860 (PKC) (S.D.N.Y.), Plaintiff filed a motion to: (i) confirm an ex parte order of attachment entered on July 30, 2020; and (ii) commence delivery and seizure of Defendant Grupo Cinemex, S.A. de C.V.'s property and debt. District Judge P. Kevin Castel granted the motion except that, with respect to (i) Defendant's ownership interest in Cinemex Holdings USA, Inc., an entity incorporated in Delaware; and (ii) Defendant's property rights in debtor-in-possession loans issued to the Debtors in a jointly administered proceeding under chapter 11 of the United States Bankruptcy Code action captioned In re Cinemex USA Real Estate Holdings, Case No. 20-14695-LMI (Bankr. S.D. Fla.) and Defendant's property rights in any additional debtor-in-possession loans that have been made by Defendant in the Bankruptcy Proceeding, or any such loan made in the future, the Motion is stayed pending further Court order. Judge Castel also held that, pursuant to C.P.L.R. section 6214(b), the Defendant must pay, transfer, or deliver any property to the U.S. Marshal -- and execute any document necessary to effect such payment, transfer, or delivery -- as will satisfy an amount worth not less than $56,318,225.94, plus the amount of interest, costs, and U.S. Marshal's fees and expenses, including any property in the possession or custody of Defendant, except for the Exempted Property. All property in which the Defendant is known or believed to have an interest therein and thereafter coming into the possession or custody of such garnishee and all debts of such garnishee, then due and thereafter coming due to the Defendant, except for the Exempted Property, shall be subject to a levy in favor of Plaintiff, and the garnishee shall transfer or deliver all property, and pay debts upon maturity, up to $56,318,225.94 to the U.S. Marshal and execute any document necessary to effect such payment, transfer or delivery. Grupo Cinemex has since made clear it will not comply with the Confirmation Order. Grupo Cinemex has taken the position that delivering its property in Mexico to the United States absent an order from a Mexican court would violate Mexican law. Attorneys for Plaintiff MN Theaters 2006 LLC: MILBANK LLP Scott A. Edelman, Esq. Jed M. Schwartz, Esq. Joseph J. Kammerman, Esq. 55 Hudson Yards New York, NY 10001 Tel: (212) 530-5000 E-mail: SEdelman@milbank.com JSchwartz@milbank.com JKammerman@milbank.com A copy of the District Court's Order is available at https://bit.ly/3lLmLpC from Leagle.com. About Cinemex USA 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. The Debtors have 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. CLEAR THE WAY: Gets Approval to Hire Saranto Calamas as Accountant ------------------------------------------------------------------ Clear The Way Supportive Housing Corp. received approval from the U.S. Bankruptcy Court for the Western District of Tennessee to hire Saranto Calamas, CPA PC as its accountant. The Debtor requires the accountant to: a. advise the debtor with respect to his powers and duties as debtor in possession and the continued management and operation of his business as it pertains to tax issues; b. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on its behalf, the defense of any actions commenced against, negotiations concerning all tax issues in which the debtor is involved; c. prepare on behalf of the debtor all necessary tax documents, reports and paper necessary to the administration of the estate; d. advise the debtor in connection with the sale of assets as they relate to tax issues; and e. perform all other necessary tax services and provide all other necessary and tax advice to the debtor in connection with this Chapter 11 case. The Debtor agrees to compensate Saranto Calamas in the amount of $225 an hour for accounting and $105 for general bookkeeping. Saranto Calamas is a disinterested person within the meaning of 11 U.S.C. Sec. 101(14), according to court filings. The accountant can be reached through: Saranto Calamas Saranto Calamas Office 640 Belle Terre Rd building d Port Jefferson, NY 11777 Phone: +1 631-928-0002 About Clear The Way Supportive Housing Corp Clear The Way Supportive Housing Corp is a non-profit company that owns and operates numerous single family residential units in Memphis, Shelby County, Tennessee. It employs property managers and maintenance personnel. Clear The Way Supportive Housing Corp sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 20-24352) on Sep. 4, 2020. At the time of filing, the Debtor estimated $1,000,001 to $10 million in assets and 100,001 to $500,000 in liabilities. John Edward Dunlap, Esq. represents the Debtor as its legal counsel. CLEARPOINT CHEMICALS: Taps Three Rivers as Financial Advisor ------------------------------------------------------------ Clearpoint Chemicals, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Alabama to hire Three Rivers Capital, LLC as its financial advisor. The Debtor requires the firm to: (1) provide professional analysis and expert advice and opinions on the reasonableness and appropriateness of the Debtor's business plan, budget forecasting, and Debtor-in-possession financing terms; and (2) provide professional advice to the Debtor on strategies and restructuring approaches and alternatives as the case progresses. Three Rivers will be paid by the Debtor based on the time. The rate of Paul Gariepy, Jr. will be $400 per hour. However for depositions and trial work, Mr. Gariepy's rate will be $675 per hour with daily guaranteed four hour minimum, every four hours throughout the day. Other professionals and administrative and technical staff may also assist when appropriate and as needed, with rates ranging from $125 to $450 per hour depending on the services rendered. Mr. Gariepy, a managing member at Three Rivers, disclosed in court filings that the firm does not represent any adverse interest to the Debtor and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Paul T. Gariepy, Jr., CPA Three Rivers Capital, LLC PO Box 4015 Covington, LA 70433 Telephone: (504) 343-8747 Facsimile: (240) 526-4860 E-mail: ptgcpa@3riverscapital.net About Clearpoint Chemicals Clearpoint Chemicals, LLC operates in the specialty chemical services industry. It develops customer-specific chemical solutions, provides in-house last mile logistics, and delivers on-site application and management, and continued communication and project assessment services. Clearpoint Chemicals sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 20-12274) on Sept. 29, 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 Jerry C. Oldshue oversees the case. Silver, Volt & Garrett serves as Debtor's legal counsel. COMCAR INDUSTRIES: Austin Buying Low Value Assets for $440 ---------------------------------------------------------- Comcar Industries, Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the District of Delaware a notice of their proposed sale of the low value assets described in the Bill of Sale (Exhibit A) to Brandon Austin for $440, free and clear of all Liens. On Sept. 2, 2020, the Court entered the Order, which, among other things, established the De Minimis Asset Sale Procedures. Pursuant to the De Minimis Asset Sale Procedures, the Debtors submit the De Minimis Sale Notice in connection with their sale of the Assets to the Purchaser. The total selling price for the Sale to the Purchaser is $440, which is under the limit set forth in the De Minimis Asset Sale Procedures. The Sale does not include payments to be made by the Debtors on account of commission fees to agents, brokers or auctioneers. The Debtors intend to use the proceeds from the Sale to fund the administration of these chapter 11 cases and, if applicable, to distribute funds in accordance with the priority scheme set forth in orders of the Court, their financing documents and/or the Bankruptcy Code. The Purchaser is not an insider of the Debtors. The Objection Deadline is Oct. 28, 2020 at 4:00 p.m. (ET). If no objection to the De Minimis Sale Notice is timely filed and served in accordance with it and the De Minimis Asset Sale procedures, the Debtors may consummate the sale without further notice. Copies of all filings in the Debtors' chapter 11 cases are available for free on the website of the Court-appointed claims and noticing agent in these chapter 11 cases, Donlin Recano & Co., Inc., at https://www.donlinrecano.com/Comcar. A copy of the Exhibit A is available at https://tinyurl.com/y5ztwckk from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. For more information, visit https://comcar.com/ On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc., is the claims agent. COMCAR INDUSTRIES: DM Allied Buying Low Value Assets for $30K ------------------------------------------------------------- Comcar Industries, Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the District of Delaware a notice of their proposed sale of the low value assets described in the Bill of Sale (Exhibit A) to DM Allied for $29,900, free and clear of all Liens. On Sept. 2, 2020, the Court entered the Order, which, among other things, established the De Minimis Asset Sale Procedures. Pursuant to the De Minimis Asset Sale Procedures, the Debtors submit the De Minimis Sale Notice in connection with their sale of the Assets to the Purchaser. The total selling price for the Sale to the Purchaser is $29,900, which is under the limit set forth in the De Minimis Asset Sale Procedures. The Sale does not include payments to be made by the Debtors on account of commission fees to agents, brokers or auctioneers. The Debtors intend to use the proceeds from the Sale to fund the administration of these chapter 11 cases and, if applicable, to distribute funds in accordance with the priority scheme set forth in orders of the Court, their financing documents and/or the Bankruptcy Code. The Purchaser is not an insider of the Debtors. The Objection Deadline is Oct. 28, 2020 at 4:00 p.m. (ET). If no objection to the De Minimis Sale Notice is timely filed and served in accordance with it and the De Minimis Asset Sale procedures, the Debtors may consummate the sale without further notice. Copies of all filings in the Debtors' chapter 11 cases are available for free on the website of the Court-appointed claims and noticing agent in these chapter 11 cases, Donlin Recano & Co., Inc., at https://www.donlinrecano.com/Comcar. A copy of the Exhibit A is available at https://tinyurl.com/y47gls7l from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. For more information, visit https://comcar.com/ On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc., is the claims agent. COMCAR INDUSTRIES: Roggen Buying Low Value Assets for $250 ---------------------------------------------------------- Comcar Industries, Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the District of Delaware a notice of their proposed sale of the low value assets described in the Bill of Sale (Exhibit A) to Trent Roggen for $250, free and clear of all Liens. On Sept. 2, 2020, the Court entered the Order, which, among other things, established the De Minimis Asset Sale Procedures. Pursuant to the De Minimis Asset Sale Procedures, the Debtors submit the De Minimis Sale Notice in connection with their sale of the Assets to the Purchaser. The total selling price for the Sale to the Purchaser is $250, which is under the limit set forth in the De Minimis Asset Sale Procedures. The Sale does not include payments to be made by the Debtors on account of commission fees to agents, brokers or auctioneers. The Debtors intend to use the proceeds from the Sale to fund the administration of these chapter 11 cases and, if applicable, to distribute funds in accordance with the priority scheme set forth in orders of the Court, their financing documents and/or the Bankruptcy Code. The Purchaser is not an insider of the Debtors. The Objection Deadline is Oct. 28, 2020 at 4:00 p.m. (ET). If no objection to the De Minimis Sale Notice is timely filed and served in accordance with it and the De Minimis Asset Sale procedures, the Debtors may consummate the sale without further notice. Copies of all filings in the Debtors' chapter 11 cases are available for free on the website of the Court-appointed claims and noticing agent in these chapter 11 cases, Donlin Recano & Co., Inc., at https://www.donlinrecano.com/Comcar. A copy of the Exhibit A is available at https://tinyurl.com/y3xdw4c8 from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. For more information, visit https://comcar.com/ On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc., is the claims agent. COMCAR INDUSTRIES: Zellner Buying Refrigerator for $100 ------------------------------------------------------- Comcar Industries, Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the District of Delaware a notice of their proposed sale of the refrigerator described in the Bill of Sale (Exhibit A) to Todd Zellner for $100, free and clear of all Liens. On Sept. 2, 2020, the Court entered the Order, which, among other things, established the De Minimis Asset Sale Procedures. Pursuant to the De Minimis Asset Sale Procedures, the Debtors submit the De Minimis Sale Notice in connection with their sale of the Assets to the Purchaser. The total selling price for the Sale to the Purchaser is $100, which is under the limit set forth in the De Minimis Asset Sale Procedures. The Sale does not include payments to be made by the Debtors on account of commission fees to agents, brokers or auctioneers. The Debtors intend to use the proceeds from the Sale to fund the administration of these chapter 11 cases and, if applicable, to distribute funds in accordance with the priority scheme set forth in orders of the Court, their financing documents and/or the Bankruptcy Code. The Purchaser is not an insider of the Debtors. The Objection Deadline is Oct. 28, 2020 at 4:00 p.m. (ET). If no objection to the De Minimis Sale Notice is timely filed and served in accordance with it and the De Minimis Asset Sale procedures, the Debtors may consummate the sale without further notice. Copies of all filings in the Debtors' chapter 11 cases are available for free on the website of the Court-appointed claims and noticing agent in these chapter 11 cases, Donlin Recano & Co., Inc., at https://www.donlinrecano.com/Comcar. A copy of the Exhibit A is available at https://tinyurl.com/y5q6ovqz from PacerMonitor.com free of charge. About Comcar Industries Comcar Industries is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. For more information, visit https://comcar.com/ On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc., is the claims agent. CONRAD WISSEL: Bank's Mortgage Cannot be Modified, Court Rules -------------------------------------------------------------- In the case captioned CONRAD WISSEL IV AND TINA WISSEL, Plaintiffs, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, Defendant, ADV. No. 18-01500 (SLM) (Bankr. D.N. J.), Bankruptcy Judge Stacey L. Meisel denied Conrad and Tina Wissel's motion for partial summary judgment regarding the validity and extent of Deutsche Bank's 2004 Mortgage against the Westfield Property. Judge Meisel held that Deutsche Bank's mortgage is entitled to protection under 11 U.S.C. section 1123(b)(5). The case required the Court to decide the reach of Chapter 11's anti-modification provision, 11 U.S.C. section 1123(b)(5), and the appropriate application of two Third Circuit decisions, In re Ferandos and In re Scarborough. These decisions addressed facts similar to those at issue here. But, they interpreted a statute that has since changed significantly. To resolve the current dispute, the Court interpreted section 1123(b)(5) -- along with the defined terms in 11 U.S.C. sections 101(13A) and 101(27B) -- using the plain language approach mandated by Ferandos and Scarborough. Debtors Conrad and Tina Wissel purchased the property at the center of this dispute -- 955 Lawrence Ave., Westfield, New Jersey 07090 -- in 1998, executing a mortgage to do so. On Nov. 2, 2000, the Wissels incorporated Spacia, a business that offered interior and exterior design advice, and sold home furnishings sourced from vendors or manufactured by Spacia itself. On Oct. 2, 2018, the Debtors filed an adversary complaint. The complaint asked the Court to determine the validity and extent of Creditor's 2004 Mortgage against the Westfield Property pursuant to 11 U.S.C. sections 506(a) and 1123(b)(5). The adversary complaint alleged, among other things, that at the time of loan origination the Debtors provided Washington Mutual with notice that the Westfield Property was both their principal residence and their principal place of business. Additionally, the Debtors asserted that the Westfield Property now has a fair market value of only $750,000 -- significantly less than the $2,100,000 value at the time they received the Creditor's 2004 Mortgage -- and is also subject to a first mortgage in the amount of $150,000. Because the Debtors argued that the Westfield Property is not covered by the anti-modification provision in section 1123(b)(5), they asked the Court to bifurcate the Creditor's mortgage into two claims: (1) a secured claim that is crammed down to the remaining value of the Westfield Property after subtracting the first mortgage, and (2) an unsecured claim for the amount remaining.41 Deutsche Bank answered the Wissels' adversary complaint on Nov. 2, 2018, arguing that the 2004 Mortgage is in fact protected by section 1123(b)(5), and asserting 11 affirmative defenses. Five weeks later, on Dec. 11, 2018, the Creditor filed a proof of claim in the Debtors' Main Case, in the amount of $2,111,751.04. This proof of claim -- which the Creditor later reduced slightly to $2,107,683.85 -- nevertheless represents the entire unpaid balance of the mortgage with interest and fees. The parties attempted to resolve the dispute raised by the Adversary Complaint through mediation. They were not successful. After mediation failed, the Debtors continued with their adversary action and moved for partial summary judgment. The partial summary judgment motion argued that, as a matter of law, the Creditor's 2004 Mortgage is not protected by the anti-modification provision in 11 U.S.C. section 1123(b)(5). In support of their position, the Debtors cited Scarborough, which they interpret as holding that collateralized property must "be only the debtor's principal residence and have no other use" in order to receive the protections of section 1123(b)(5). The Debtors alleged that the Westfield Property had another use -- it was Spacia's principal place of business. The Debtors also argued that Washington Mutual had both actual and constructive notice of the Debtors' use of the Westfield Property. The Debtors primarily relied on the Loan Application, focusing on the fact that it shows that Conrad Wissel was employed at Spacia, whose listed address was the Westfield Property. Deutsche Bank responded by filing opposition to the Debtors' motion for partial summary judgment on August 15, 2019. Deutsche Bank's opposition maintained that the Creditor's 2004 Mortgage falls squarely within the ambit of section 1123(b)(5) and therefore cannot be modified. First, Deutsche Bank argued that there is "no doubt" that the Westfield Property is covered by the anti-modification provision as a "principal residence" as that term is defined at 11 U.S.C. section 101(13A). Second, it denied all of the Debtors' factual assertions relating to the Westfield Property's income generation and the notice allegedly given to Washington Mutual. Third, Deutsche Bank maintained that the Creditor's 2004 Mortgage "is the exact type of loan the anti-modification provision was meant to protect" because the Debtors "repeatedly executed documents evidencing the fact that [the Westfield Property] was their principal residence. Expanding on this argument, Deutsche Bank averred the Wissels applied for a residential rather than commercial mortgage. Deutsche Bank further argued that the legislative history of the anti-modification provision "indicates that it was designed to protect and promote the increased production of homes and to encourage private ownership of homes." The Creditor's opposition also maintained -- in an argument the Creditor later abandoned -- that Scarborough should be distinguished for two reasons. First, the Creditor asserted that Scarborough only addressed a residence with multiple living units, while the Westfield Property is a single-unit residence. Second, it maintained that even if Washington Mutual was aware that Spacia operated out of the Westfield Property, the 2004 Mortgage did not secure any interest in Spacia or any other business. The Creditor asserted that this fact distinguished it from the lender in Scarborough and protects the mortgage. The Debtors replied on Sept. 5, 2019, arguing that Deutsche Bank's reading of Scarborough is simply incorrect. The Debtors argued Scarborough stands for the rule that, for the anti-modification provision to apply, "the collateral at issue must be only the debtor's principal residence at the time of loan origination and have no other use." Additionally, the Debtors maintained that their various factual declarations shifted the burden of production to Creditor. The Debtors asserted that the Creditor subsequently failed to undercut the Debtors' assertions related to notice and the business operations at the Westfield Property. Finally, the Debtors argued that because the Creditor's 2004 Mortgage was a refinance, Congress's aim of encouraging home ownership through the anti-modification provision has no bearing on the disposition of this dispute. According to Judge Meisel, the Wissels' argument is a faithful application of Scarborough. It would be correct if Congress had not stepped in to make changes. But, Congress intervened to add definitions to the Bankruptcy Code that the Third Circuit did not analyze when making its decisions. After the debtors in Scarborough filed for bankruptcy, the changes that Congress made to the Bankruptcy Code became effective, and the changes clarified the scope of section 1123(b)(5). Specifically, Congress added formal definitions of "debtor's principal residence" and "incidental property." In Scarborough, the Third Circuit noted that these changes were enacted but not effective at the time the debtors filed for bankruptcy. As such, the Third Circuit decided to "leave for another day the question of whether, or how, [the changes] altered the scope of the anti-modification provision." Accepting this invitation, the Court held that the definitions Congress added to the Bankruptcy Code plainly extend the reach of section 1123(b)(5). Read with the textual approach of Ferandos and Scarborough, Chapter 11's anti-modification provision now includes a mortgage secured by any property that the debtor uses as a principal residence, as defined by section 101(13A), as well by as any incidental property, as defined by section101(27B). Deutsche Bank's mortgage satisfies these requirements and is entitled to section 1123(b)(5)'s protection. Judge Meisel, therefore, denied the Debtors' motion for partial summary judgment. A copy of the Court's Opinion is available at https://cutt.ly/9ghbNCk from Leagle.com. Jenny R. Kasen, Esq. , Kasen & Kasen PC, Cherry Hill, NJ Douglas J. McDonough, Esq. , Frenkel Lambert Weiss Weisman & Gordon, LLP, West Orange, NJ Conrad Wissel, IV and Tina M. Wissel filed for chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 18-25812) on August 7, 2018, and were represented by Jenny R. Kasen of Kasen & Kasen PC. CORPORATE RESOURCE: SMS Lacks Standing to Enforce Settlement ------------------------------------------------------------ In the case captioned STAFF MANAGEMENT SOLUTIONS, LLC and PEOPLESCOUT MSP, LLC, Appellants, v. JAMES FELTMAN, Chapter 11 Trustee of the Estate of Debtors Corporate Resource Services, Inc., et al., WELLS FARGO BANK, N.A., NOOR STAFFING GROUP, LLC, and NOOR ASSOCIATES, INC., Appellees, No. 19 Civ. 10931 (ER) (S.D.N.Y.), Staff Management Solutions, LLC and PeopleScout MSP LLC appeal from an Oct. 10, 2019 Opinion and Order by the U.S. Bankruptcy Court for Southern District of New York denying their motion to enforce a settlement agreement entered into by James Feltman, chapter 11 trustee of Debtor Corporate Resource Development, Inc. and Noor Staffing Group, LLC and Noor Associates, Inc., on June 2, 2017. Upon review of the case, District Judge Edgardo Ramos affirmed the bankruptcy court's order and dismissed the appeal. Staff Management provides temporary staffing and management services. In order to provide these services, it subcontracts with other staffing providers. Staff Management entered into a written Supplier Non-Exclusive Master Service Agreement with CRD, one such staffing provider, effective Jan. 10, 2015. Pursuant to this contract, CRD would supply temporary staff to Staff Management's client, and Staff Management would process and forward payments from that client to CRD. CRD provided Staff Management with written authorization to make these payments by electronic transfer to an account at Wells Fargo. According to the CRD Contract, Staff Management was to "act as paying agent [to CRD]." Staff Management thereafter made payments to the Wells Fargo Account. On Feb. 26, 2015, CRD entered into an Asset Purchase Agreement to sell its business to Noor. Staff Management then entered into a new Supplier Non-Exclusive Master Agreement with Noor, effective March 21, 2015. Pursuant to this contract, Noor supplied temporary staff to Staff Management's client, and Staff Management processed and forwarded payments from that client to Noor. From May 11, 2015 to Jan. 27, 2016, Staff Management sent these payments to the Wells Fargo Account designated in its contract with CRD. On July 23, 2015, CRD and other related debtors filed Chapter 11 bankruptcy petitions, which were jointly administered as In Re: Corporate Resource Services, Inc. et al., No. 15-12329 (MG) United States Bankruptcy Court, Southern District of New York. On March 4, 2016, the Trustee commenced an adversary proceeding against Noor seeking to recover assets fraudulently transferred from CRD without appropriate consideration and, among other relief, a declaratory judgment that funds held by Wells Fargo were the property of the estate, as both the Trustee and Noor made claims to these funds. Id. Staff Management did not participate in those proceedings. Eventually, Noor and the Trustee entered into a Settlement Agreement, which was approved on July 14, 2017. The Bankruptcy Court retained jurisdiction to hear and determine "any and all matters arising from the interpretation and/or implementation" of the Settlement Agreement. On Jan. 25, 2019, Noor filed a complaint in the United States District Court for the Northern District of Illinois seeking to recover the funds that Staff Management sent to the Wells Fargo account. Staff Management maintains that Noor's claims have been released by the Settlement Agreement. On July 15, 2019, Noor filed a motion seeking to transfer the case to the United States District Court for the Southern District of New York so that it might be referred to the Bankruptcy Court. On August 20, 2019, Staff Management filed a motion to enforce the settlement agreement with the Bankruptcy Court, arguing that the Settlement Agreement released it from any liability it may have had with regards to transferring funds to the Wells Fargo account, and, incidentally, from any liability in the Illinois action. The Trustee, Wells Fargo, and Noor filed responses, and Staff Management filed a Reply. Judge Glenn, who oversaw the bankruptcy proceedings, held a hearing on Staff Management's motion and ultimately denied it on Oct. 10, 2019. Judge Glenn found that, as a threshold matter, Staff Management did not have prudential standing to enforce the Settlement Agreement because it was neither an "agent" nor an "associate" of CRD for purposes of the Settlement Agreement. Even if it did, Judge Glenn found its motion should be denied because the Settlement Agreement did not extend to Staff Management, and rejected its remaining arguments. The day after the Bankruptcy Court entered its Order, on Oct. 11, 2019, Staff Management commenced an adversary proceeding against the Trustee, Noor, and Wells Fargo in that court, seeking to obtain funds from the Trustee to be used to pay any judgment that might be entered against it and in Noor's favor in Illinois. Staff Management filed the appeal on Nov. 26, 2019, arguing it does have standing to enforce the Settlement Agreement and that the Settlement Agreement releases Noor's claims against it. Staff management argued it is entitled to third-party beneficiary status for three reasons: (1) Staff Management is an "agent" or "associate" of CRD; (2) pursuant to the Settlement Agreement, Noor released any claims to the money in the Wells Fargo Account; and (3) the Settlement Agreement was intended to be a final resolution of any and all claims. According to Judge Ramos, Staff Management's contract with CRD provided that Staff Management was to "act as [CRD's] paying agent." This was further evidenced by CRD's authorization of Staff Management to make payments to CRD by electronic transfer to the Wells Fargo Account. However, Staff Management's status as an agent for purposes of the CRD contract does not unambiguously establish that it was CRD's agent for purposes of the Settlement Agreement. It is well-established that "[o]ne may be an agent for some business purposes and not others so that the fact that one may be an agent for one purpose does not make him or her an agent for every purpose." As such, Staff Management's agency relationship with CRD for purposes of the CRD contract is insufficient to confer it with prudential standing to enforce the Settlement Agreement. With respect to Staff Management's second argument, Judge Ramos held that the release applies only to claims that "arise from or otherwise relate to the transactions referenced in the Adversary Proceeding or the Claim or result from any act or omission with respect to the Adversary Proceeding or the Claim to the extent permitted by law." This release in no one way extends, then, to Noor's claims against Staff Management regarding an unrelated contract. On the last argument, Judge Ramos held the Trustee has submitted briefing preserving his rights in the Adversary Proceeding commenced by Staff Management in the Bankruptcy Court against the Trustee, Noor, and Wells Fargo. As the Trustee properly noted, "Staff Management's Motion to Enforce Settlement Agreement did not seek, and the Bankruptcy Court's Order Denying Enforcement did not provide, any relief from the Debtors' estates or the Trustee." As such, any question relating to Staff Management's claims against the Trustee are not properly before the Court. As to Staff Management's argument that this possibility entitles it to third-party beneficiary status, the Court noted that the release only applies to claims between the Trustee and Noor. Staff Management's argument, then, is unpersuasive. As the Bankruptcy Court correctly found, Staff Management lacks prudential standing to bring its motion, Judge Ramos said. Moreover, even if Staff Management were to have standing to enforce the Settlement Agreement, doing so would not afford it the relief it seeks. Even if the Settlement agreement released claims arising out of Staff management's relationship to CRD, it does not release claims arising from Staff Management's relationship to Noor, such as those at issue in Illinois. A copy of the Court's Opinion and Order is available at https://bit.ly/3nAGjir from Leagle.com. About Corporate Resource Services Corporate Resource Services, Inc., was a provider of corporate employment and human resource solutions, headquartered in New York. CRS leased its headquarters and does not own any real property. About 90% of CRS shares were owned by Robert Cassera and the balance were traded OTC. As of Dec. 31, 2014, CRS was one of the largest employment staffing companies in the U.S., providing employment and human resources solutions for corporations with annual sales of about one billion dollars. In February 2015, CRS began an orderly wind down of operations after discovering that TS Employment, Inc., a privately held company owned by Mr. Cassera, failed to remit tens of millions of dollars of the Debtors' withholding taxes to taxing authorities. TS Employment Inc., a professional employer organization that provided payroll-related services for CRS, sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10243) in Manhattan on Feb. 2, 2015. The case was before Judge Martin Glenn. TSE tapped Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York, as counsel. Realization Services Inc. served as the Debtor's consultant. CRS and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-11546) on July 23, 2015, to complete their orderly wind down of operations. The CRS Debtors' cases were transferred to New York (Bankr. S.D.N.Y. Lead Case No. 15-12329), on Aug. 18, 2015, and assigned to Judge Glenn. CRS estimated $10 million to $50 million in assets and $50 million to $100 million in debt. The CRS Debtors tapped Gellert Scali Busenkell & Brown, LLC, as bankruptcy counsel; Wilmer Cutler Pickering Hale & Dorr LLP, as special counsel; Carter Ledyard & Milburn LLP, as special SEC counsel; SSG Capital Advisors as financial advisors and investment bankers; and Rust Omni LLC as claims agent. James S. Feltman was appointed as Chapter 11 trustee for the CRS Debtors and for TS Employment. He tapped Togut, Segal & Segal LLP as counsel; and Jenner & Block LLP and Greenberg Traurig, P.A., as special counsel; Jeffer Mangels Butler & Mitchell LLP, as special litigation counsel. CPI CARD: Reports $5.8 Million Net Income for Third Quarter ----------------------------------------------------------- CPI Card Group Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $5.81 million on $82.70 million of total net sales for the three months ended Sept. 30, 2020, compared to a net loss of $657,000 on $71.68 million of total net sales for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported net income of $8.84 million on $228.05 million of total net sales compared to a net loss of $2.72 million on $205.45 million of total net sales for the same period in 2019. As of Sept. 30, 2020, the Company had $253.69 million in total assets, $399.06 million in total liabilities, and a total stockholders' deficit of $145.37 million. "As we continue to navigate these unprecedented times, we are pleased with our strong third quarter performance," said Scott Scheirman, president and chief executive officer of CPI. "Our 15% top-line growth underscores the resilience of the business, our ability to capitalize on the dual interface card demand in the U.S. and the strong market for our innovative and differentiated products, including our eco-focused solutions. Operating margins also expanded significantly in the quarter, driven by operating leverage and ongoing efficiency initiatives. We continue to win new business with our existing customers, add new customers and pursue opportunities." Scheirman continued, "We remain steadfast and intensely focused on our strategies of deep customer focus, providing market-leading quality products and customer service, delivering innovative solutions and a market-competitive business model." Balance Sheet, Liquidity, and Cash Flow As of Sept. 30, 2020, cash and cash equivalents was $50.3 million. Cash used in operating activities was $1.8 million and capital expenditures were $1.7 million in the third quarter of 2020, yielding Adjusted Free Cash Flow use of $3.5 million. For the first nine months of 2020, cash provided by operating activities was $10.2 million and capital expenditures were $3.3 million, yielding Adjusted Free Cash Flow of $6.9 million. This compares with the first nine months of 2019 when cash used in operating activities was $3.0 million, or a $9.0 million cash usage when excluding the $6.0 million cash received from a litigation settlement, and capital expenditures were $3.3 million, resulting in Adjusted Free Cash Flow use of $12.3 million. For the first nine months of 2020, cash provided by operating activities and Adjusted Free Cash Flow increased $13.2 million and $19.2 million year-over-year, respectively. Total long-term debt principal outstanding, comprised of the Company's $30 million Senior Credit Facility and its $312.5 million First Lien Term Loan, was $342.5 million at Sept. 30, 2020. Net of debt issuance costs and discount, total long-term debt was $335.8 million as of Sept. 30, 2020. The Company's Senior Credit Facility matures in May 2022 and the First Lien Term Loan matures in August 2022. John Lowe, chief financial officer, stated, "Top-line net sales growth and our commitment to operating efficiently resulted in strong year-over-year growth in Net Sales, Net Income, and Adjusted EBITDA. We are sharply focused on continuing to execute on our strategy and capitalizing on market opportunities." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1641614/000155837020012314/pmts-20200930x10q.htm About CPI Card CPI Card Group -- http://www.cpicardgroup.com/-- is a payment technology company and provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps its customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization and fulfillment, and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout the United States, CPI has a large network of high security facilities, each of which is registered as PCI Card compliant by one or more of the payment brands: Visa, Mastercard, American Express, and Discover. CPI Card reported a net loss of $4.45 million for the year ended Dec. 31, 2019, compared to a net loss of $37.46 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $246.50 million in total assets, $396.4 million in total liabilities, and a total stockholders' deficit of $150.0 million. CUKER INTERACTIVE: Pillsbury Winthrop Objects to Plan & Disclosure ------------------------------------------------------------------ Creditor Pillsbury Winthrop Shaw Pittman LLP objects to the Disclosure Statement regarding the Third Amended Plan of Reorganization filed by Debtor Cuker Interactive, LLC. Pillsbury claims that the Plan and the Disclosure Statement are vague about when Pillsbury will be paid. At present, it is unclear who decides when and how much Pillsbury gets paid, whether the Plan, the Bankruptcy Court or the Arbitrators. Pillsbury states that neither the Plan nor the Disclosure Statement says Pillsbury will be paid something different if its claim is unsecured. It seems clear the Debtor wants to pay Pillsbury less if its claim is unsecured, but the Plan and Disclosure Statement do not say that. Clarification is required. Pillsbury points out that the Disclosure Statement and projections do not clearly state how much will be reserved for Pillsbury's claim. The Debtor should clarify in the Disclosure Statement and its exhibits how much will be reserved on account of Pillsbury's claim. Pillsbury asserts that the Plan's specification of the treatment of Class 4 claims does not actually say what Class 4 claim holders will be paid. The Plan and Disclosure Statement should make that clear what will be paid on Class 4 claims, including the rate of post-petition and post-effective date interest. Pillsbury further asserts that the final concern of Pillsbury regarding Cuker's projections is the cost of the Arbitration. The Disclosure Statement projects without evidentiary support that Cuker will spend up to $250,000 for panel fees, experts and other litigation expenses. Pillsbury's counsel believes a more likely estimate is a minimum of $350,000. A full-text copy of Pillsbury's objection dated Sept. 3, 2020, is available at https://tinyurl.com/yyh5hhb4 from PacerMonitor at no charge. Attorneys for Pillsbury: Matthew S. Walker 12255 El Camino Real, Suite 300 San Diego, CA 92130-4088 Telephone: 858.509.4000 Facsimile: 858.509.4010 E-mail: matthew.walker@pillsburylaw.com Andrew M. Troop 31 W 52nd St New York, NY 10019 Telephone: 212.858.1660 Facsimile: 212.858.1500 E-mail: andrew.troop@pillsburylaw.com About Cuker Interactive Cuker Interactive, LLC -- https://www.cukeragency.com/ -- is a digital marketing, design, and eCommerce agency. Based in Carlsbad, Calif., Cuker Interactive filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 18-07363) on Dec. 13, 2018. In the petition signed by CEO Aaron Cuker, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Michael D. Breslauer, Esq., at Solomon Ward Seidenwurm & Smith, LLP, is the Debtor's bankruptcy counsel. CUKER INTERACTIVE: Unescured Claims Are Unimpaired in Plan ---------------------------------------------------------- Cuker Interactive, LLC, submitted a First Amended Disclosure Statement describing a Plan that provides, on the Effective Date to pay, or set aside cash and provide for, full 100% payment of all allowed claims, with postpetition interest. For unsecured and priority creditors, interest accrues and is payable: (i) from the Petition Date at the Federal Judgment Rate applicable as of the Petition Date, 2.69% (the "Federal Rate") until the Effective Date ("Post-Petition Legal Interest"), unless the Bankruptcy Court determines that a higher interest rate is required for an objecting creditor; and (ii) if a claim is objected to prior to the Effective Date, such interest (in addition to Post-Petition interest) is payable from the Effective Date to the day of payment (once allowed) at the Creditor's contract or other applicable rate. For Creditors determined by the Bankruptcy Court to be secured, interest accrues and is payable: (i) at such creditor's contract or otherwise applicable non-bankruptcy rate until the exhaustion of the Creditor's collateral (the "Collateral Exhaustion Date;" (ii) from the Collateral Exhaustion Date until the Effective Date at the Federal Rate, unless the Bankruptcy Court determines that a higher interest rate is required for an objecting creditor; and; (iii) thereafter, if such claim is objected to, until payment at such creditor's contract or otherwise applicable nonbankruptcy rate. Cuker anticipates that that the Effective Date will be earlier than the Collateral Exhaustion Date, in which event the Federal Rate would never apply. The Plan does not alter the legal, equitable or contractual rights to which any creditor is entitled under its agreement with Cuker and applicable law. Class 4 Allowed General Unsecured Claims. This class is unimpaired. On account of the Allowed Class 4 Claims, holders of Class 4 Claims shall be paid in full including Post-Petition Interest, on the later to occur of (i) the Effective Date or (ii) the date such Creditor's Claim is deemed to be an Allowed Claim. As the result of its successful post-petition operations, Cuker now has the funds to pay 100% of all creditors' allowed claims, with interest, and looks forward to having its plan confirmed. A full-text copy of the First Amended Disclosure Statement dated October 14, 2020, is available at https://tinyurl.com/yylxv9dt from PacerMonitor.com at no charge. Co-Counsel for the Debtor: Michael D. Breslauer SOLOMON WARD SEIDENWURM & SMITH, LLP 401 B Street, Suite 1200 San Diego, California 92101 Telephone: (619) 231-0303 Facsimile: (619) 231-4755 E-mail: mbreslauer@swsslaw.com - and - Robert R. Barnes THE BROKEN-BENCH LAW FIRM 10982 Poblado Road, No. 1621 San Diego, California 92127-5327 Telephone: (619) 218-0520 robertbarn@outlook.com About Cuker Interactive Cuker Interactive, LLC -- https://www.cukeragency.com/ -- is a digital marketing, design, and eCommerce agency. Based in Carlsbad, Calif., Cuker Interactive filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 18-07363) on Dec. 13, 2018. In the petition signed by CEO Aaron Cuker, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. Michael D. Breslauer, Esq., at Solomon Ward Seidenwurm & Smith, LLP, is the Debtor's bankruptcy counsel. CUKER INTERACTIVE: Wolfe Legal Objects to Disclosure Statement -------------------------------------------------------------- Creditor Wolfe Legal Group, PC (WLG) objects to the Disclosure Statement filed by debtor Cuker Interactive, LLC. WLG claims that the Debtor's Disclosure Statement fails to explain WLG's rights as a fully secured creditor, nor does it explain the effect on Plan feasibility of WLG's contractual right to a service charge at rate of 1.8% per month, nor does it explain WLG's right to interest given that it conflates the service charge with interest. WLG points out that the Disclosure Statement also fails to recognize that, to the extent WLG is partly unsecured as the Debtor contends, and because the Debtor is solvent, it must pay WLG interest at the California legal rate on any unsecured portion of its Claim. WLG asserts that the Plan impairs WLG, yet the Debtor continues incorrectly to assert that WLG is not impaired. WLG joins in the objections filed by Pillsbury on September 3, 2020 to the extent those objections apply to WLG's secured claim or to any unsecured claim that the Debtor contends WLG holds. A full-text copy of WLG's objection to Disclosure Statement dated September 3, 2020, is available at https://tinyurl.com/y3bet4et from PacerMonitor at no charge. Counsel for Creditor Wolfe Legal: CURRY ADVISORS A Professional Law Corporation K. Todd Curry (149360) 185 West F Street, Ste. 100 San Diego, California 92101 Tel: (619) 238-0004 Fax: (619) 238-0006 About Cuker Interactive Cuker Interactive, LLC -- https://www.cukeragency.com/ -- is a digital marketing, design, and eCommerce agency. Based in Carlsbad, Calif., Cuker Interactive filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 18-07363) on Dec. 13, 2018. In the petition signed by CEO Aaron Cuker, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. Michael D. Breslauer, Esq., at Solomon Ward Seidenwurm & Smith, LLP, is the Debtor's bankruptcy counsel. DAVIS FAMILY TRUST: Plan to be Funded by Rental Payment ------------------------------------------------------- The Davis Family Revocable Trust filed with the U.S. Bankruptcy Court for the District of Columbia an Amended Disclosure Statement in support of its Chapter 11 Plan of Reorganization dated September 4, 2020. The Debtor's sole asset is the Monroe Property. The property is currently vacant and in need of substantial repair and renovation. The Debtor estimates that the current value of the Monroe Property is $850,000. The Monroe Property is encumbered by a deed of trust securing the Debtor's obligations to PNC. PNC has filed a proof of claim in the Bankruptcy Case, indicating that the balance of principal and interest due on its Claim was $1,776,404 on the Petition Date. The Debtor is aware of the Unsecured Claim of the Internal Revenue Service in the amount of $420 as the only one Unsecured Claim which may be entitled to payment in the present case. The Debtor does not believe any amount is due on the Internal Revenue Service Claim. The Debtor has filed income tax returns for the years addressed in the Internal Revenue Service proof of claim, showing that it has no tax obligations for the tax years referenced in the proof of claim. In the event the Debtor has any obligations payable under Class VI, however, the Debtor shall pay the amount of such obligations in full on the Effective Date. Class VII consists of the equity interests in the Debtor. At the time of the commencement of this case, the beneficiaries of the Debtor trust were sisters of the Debtor. Unsecured Claims are receiving payment in full under the Plan, and in addition the Plan does not call for any distributions to holders of equity interests, and no beneficiary of the Trust shall receive any payment as a result of confirmation of the Plan. Accordingly, the Debtor submits that the absolute priority rule is satisfied with respect to the Debtor. The Plan will be funded from the rental of the Monroe Property, and from the rehabilitation loan from Diamond. On the Effective Date, the Debtor shall commence rehabilitation of the Monroe Property. The Debtor estimates such rehabilitation shall be completed over a term of approximately ninety days, permitting the property to be rented four months after the Effective Date. The Debtor anticipates the cost of rehabilitation of the property shall be $10,000. During the time prior to rental of the property, the funds received pursuant to the Diamond loan shall be used to make the payments described under the Plan. Further payments shall be made from proceeds received by the Debtor from rental of the Monroe Property. The Debtor has attached to the Disclosure Statement a sixty month cash flow statement demonstrating sufficient cash flow to make the payments described in the Plan, and it believes it is adequately capitalized to perform under the Plan. A full-text copy of the Disclosure Statement dated September 4, 2020, is available at https://tinyurl.com/y3gb6kzu from PacerMonitor at no charge. The Debtor is represented by: COHEN BALDINGER & GREENFELD, LLC Augustus T. Curtis 2600 Tower Oaks Boulevard, Suite 103 Rockville, Maryland 20852 Tel: (301) 881-8300 About Davis Family Revocable The Davis Family Revocable Trust filed a Chapter 11 petition (Bank. D. Col. Case No. 09-00130) on Feb. 19, 2009. At the time of filing, the Debtor was estimated to have $1 million to $10 million in assets and debt. Hon. S. Martin Teel, Jr. oversees the case. Jeffrey M. Sherman, Esq. of Semmes, Bowen & Semmes is the Debtor's Counsel. DELPHI CORP: 6th Cir. Keeps Summary Judgment Ruling in PBGC Case ---------------------------------------------------------------- In the case captioned DENNIS BLACK; CHARLES CUNNINGHAM; KENNETH HOLLIS; DELPHI SALARIED RETIREE ASSOCIATION, Plaintiffs-Appellants, v. PENSION BENEFIT GUARANTY CORPORATION, Defendant-Appellee, No. 19-1419 (6th Cir.), the United States Court of Appeals, Sixth Circuit affirmed the district court's ruling granting summary judgment in favor of the Pension Benefit Guaranty Corporation, a wholly-owned corporation of the United States government. PBGC terminated the "Salaried Plan," a defined-benefit plan sponsored by Delphi Corporation. The termination was executed through an agreement between PBGC and Delphi pursuant to 29 U.S.C. section 1342(c). The appellants -- retirees affected by termination of the Salaried Plan -- brought several challenges to the termination. The retirees argued that section 1342(c) requires a judicial adjudication before a pension plan may be terminated. They also contended that the termination of the plan violated their due process rights. The retirees further asserted that PBGC's decision to terminate the Salaried Plan was arbitrary and capricious. Delphi Corporation -- an automotive parts supplier and former subsidiary of General Motors Corporation -- was plan administrator and contributing sponsor of several defined-benefit pension plans. The Salaried Plan covered approximately 20,000 members of Delphi's salaried, non-unionized workforce, including appellants Dennis Black, Charles Cunningham, and Kenneth Hollis. In 2005, Delphi filed a voluntary petition for Chapter 11 bankruptcy. As a result, Delphi stopped paying the required contributions to its pension plans, including the Salaried Plan. In 2008, Delphi's first Plan of Reorganization ("2008 POR") provided that all Delphi sponsored pension plans would be frozen but would continue to be reorganized under Delphi. But the 2008 POR failed when Delphi's post-emergence investors refused to fund their investment agreement with Delphi. As a result, Delphi asked former parent General Motors to assume the liabilities of the Salaried Plan. It appears that PBGC was initially in favor of this arrangement. Even so, GM was facing financial struggles of its own as a result of the financial crisis of 2008. An "Auto Taskforce" was appointed to oversee efforts to support and stabilize the auto industry and an "Auto Team" was created by the United States Department of Treasury to evaluate the restructuring plans of automotive companies and to negotiate the terms of any further assistance. Eventually, an agreement was made to save the pension plan of the hourly, unionized Delphi employees ("Hourly Plan") but terminate the Salaried Plan. Pursuant to this agreement, GM would assume the Hourly Plan pension liabilities and PBGC would terminate the Salaried Plan and release any remaining liens and claims on Delphi's assets. In June 2009, Delphi moved to modify its First Amended Plan of Reorganization to reflect the agreement to save the Hourly Plan and terminate the Salaried Plan. The retirees filed an objection to Delphi's Modified Plan in the bankruptcy proceedings. Then, on July 22, 2009, PBGC issued a Notice of Determination to Delphi, notifying Delphi that it had determined that the Salaried Plan must be terminated and that PBGC should be appointed as statutory trustee of the plan. PBGC issued a press release to notify plan participants of its decision. That same day, PBGC initiated an action in district court to adjudicate termination of the Salaried Plan. On July 29, 2009, the retirees argued in support of their objection to the proposed modifications to the First Amended Plan of Reorganization. On July 30, 2009, the bankruptcy court overruled the retirees' objections and confirmed Delphi's Modified Chapter 11 Plan. On August 6, 2009, the retirees sought PBGC's consent to intervene in the termination proceedings in district court. PBGC voluntarily dismissed the termination suit in district court. Then, on August 10, 2009, PBGC and Delphi executed a termination and trusteeship agreement that terminated the Salaried Plan effective July 31, 2009. Subsequently, in September 2009, the retirees filed this lawsuit. After protracted litigation, the district court granted summary judgment in favor of PBGC. This appeal followed. The retirees argued that 29 U.S.C. section 1342(c) requires a judicial adjudication prior to termination of a distressed pension plan. They also argued that their due process rights were violated and that PBGC's decision was arbitrary and capricious. According to the Appeals Court, after a thorough analysis of the facts presented, the District Court held that the retirees have not raised any argument warranting reversal. First, 29 U.S.C. section 1342(c)(1) provides two mechanisms for termination of a distressed pension plan -- including termination by agreement between a plan administrator and the PBGC. Second, the retirees do not have a property interest in their vested, but unfunded, pension benefits because the private contract creating those benefits provides that only funded benefits at the time of termination are nonforfeitable. Third, PBGC's decision to terminate the Salaried Plan was not arbitrary and capricious because there is ample evidence to support PBGC's decision. As a result, the district court's judgment is affirmed. A copy of the Appellate Court's Opinion is available at https://bit.ly/2GT9cFn from Leagle.com. Anthony F. Shelley , Timothy P. O'Toole , Michael N. Khalil , MILLER & CHEVALIER CHARTERED, Washington, D.C., for Appellants. John A. Menke , C. Wayne Owen, Jr. , Craig T. Fessenden , Erin C. Kim , Elisabeth B. Fry , PENSION BENEFIT GUARANTY CORPORATION, Washington, D.C., for Appellee. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed $9.16 billion in assets and $23.7 billion in debt. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide $2.55 billion in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. DIOCESE OF BUFFALO: Mediation in Insurers Row Premature ------------------------------------------------------- The Diocese of Buffalo has moved for the establishment of a claims bar date -- Jan. 15, 2021 -- and the referral of an adversary proceeding to mediation. After careful consideration of the facts presented, Chief Bankruptcy Judge Carl L. Bucki denied the application to refer matters to mediation without prejudice to a future application. Judge Bucki also ordered that the Debtor must effect appropriate notice of a claims bar date of August 14, 2021. On Feb. 14, 2019, New York State enacted the Child Victims Act (the "CVA"). This legislation reopened the statute of limitations to allow victims of child abuse a period of one year from August 14, 2019, to assert claims that were otherwise barred by the passage of time. Thereafter, the state extended this deadline by an additional year to August 14, 2021. By the end of February 2020, the Diocese had been named as a defendant in more than 200 complaints alleging sexual abuse. More claims were anticipated. In response to this situation, the Diocese filed a petition for relief under Chapter 11 of the Bankruptcy Code on Feb. 28, 2020. Then in March 2020, after due solicitation of interest, the Office of the United States Trustee appointed an Official Committee of Unsecured Creditors. The Diocese estimated that more than 400 individuals will eventually make claims for damages arising from child abuse. Prospects for compensation depend significantly upon access to insurance. Even before bankruptcy, various insurance carriers had disclaimed coverage. Consequently, on the same day as the filing of its bankruptcy petition, the Diocese commenced an adversary proceeding for a declaratory judgment to determine the coverage obligations of eight insurance companies. In connection with the adversary proceeding, the Diocese sought to refer the dispute to mediation. The Diocese argued in its papers that insurance represents "a significant source of potential recovery for abuse claimants," that a determination of insurance coverage is an important precondition to the formation of a confirmable plan, and that mediation will "facilitate a global resolution of underlying insurance coverage issues." The Committee accepted the concept of mediation, but asserted the need for a comprehensive process that involves all interested parties and that aims to achieve a full resolution of claims. Several of the insurance companies named as defendants in the adversary proceeding opposed the use of mediation at this time. They argued that mediation should be deferred until the full identification of claims and their receipt of information that they have requested from the Diocese. In a separate motion, the Diocese sought entry of an order establishing a deadline for filing proofs of claim and approving the form and manner of notice. Generally, the Diocese argued that in order to develop a plan of reorganization, it needs to identify all abuse claimants and to collect detailed information about the nature of their injuries. To this end, the Bar Date Motion made four specific requests: -- The Debtor proposes to set Jan. 15, 2021, as the deadline for filing proofs of claim. -- The Diocese requested that the Court approve a form of bar date notice and the manner of its distribution and publication. -- The Diocese asked the Court to direct abuse victims to use a proof of claim form that includes responses to various questions about their injuries. -- The Debtor presented a proposed order that would set protocols for confidentiality of any responses. The Committee objected to the proposed Jan. 15, 2021 bar date, and instead urged a deadline of August 14, 2021. It argued that the later date will avoid confusion to CVA creditors, in that August 14 coincides with the most recent extension of the statute of limitations for certain abuse claims under New York law. The Catholic Mutual Relief Society of America, one of the defendants in the Debtor's adversary proceeding, proposed that additional questions be added to the proof of claim form that the Diocese wishes to disseminate. In the Mediation Motion, the Diocese stated its desire to achieve a "global resolution of underlying insurance coverage issues." According to Judge Bucki, mediation to achieve this "laudatory objective" is premature at this time for at least three independently persuasive reasons. First, the Diocese proposes a mediation in the context of an adversary proceeding that involves only some of the parties whose participation is needed to achieve a comprehensive settlement. At the hearing on the Mediation Motion, the Debtor also brought a motion for authority to retain an insurance archivist. The archivist had previously worked on limited assignments for the Diocese, but had not yet completed a comprehensive review of records. In granting the retention motion, the Court accepted the argument presented by the Debtor's counsel in its moving papers, that "it is essential to this Chapter 11 Case that the full extent and scope of the Diocese's insurance coverage is determined by a professional with extensive experience conducting historic audits of a company's past insurance coverage, particularly those policies issued before July 1, 1973." Even before the start of the archivist's new engagement, the Diocese has already identified insurance carriers other than the eight defendants named in the Adversary Proceeding. Judge Bucki held that legislative efforts to reopen the statute of limitations were ongoing for several years prior to enactment of the CVA. The Diocese has volunteered no compelling explanation for why it only now seeks to initiate a comprehensive archival investigation of insurance coverage. Whatever may have been the reason for this delay, the Court found that mediation is premature until receipt of a complete archival report identifying all of the insurance carriers who might share responsibility for coverage. Mediation is also premature for a second reason, Judge Bucki said, namely that no settlement is likely until such time as the parties can determine the identity and general nature of all abuse claims. To this end, the Court will consider later the Debtor's motion for establishment of a claims bar date. The claims bar process is necessary to determine the potential exposure of each particular insurance company. Knowledge of such exposure constitutes the starting point for any discussion among the Debtor, the Committee, a mediator, insurers and victims. Without a claim, there exists no claim against insurance. Without a claim against insurance, there exists no coverage dispute in need of mediation, Judge Bucki explained. Judge Bucki further held that a matter is ripe for mediation only after litigants have shared the information needed to evaluate their respective rights and defenses. The absence of such exchange, he said, is a third basis for finding that mediation is premature. He explained the present dispute over insurance coverage is complicated. It involves hundreds of abuse claims, some of which allegedly occurred decades ago. The parties report difficulty in locating certain of the insurance policies. Despite these complexities, the litigants have exchanged little information. At the time of the hearing on the Mediation Motion, only three of eight defendants had even filed an answer. None of the litigants had provided the initial disclosures required under Bankruptcy Rule 7026 and Rule 26(a) of the Federal Rules of Civil Procedure. The parties had not even started discovery. Nor does it appear that the parties have completed an informal exchange of the information that each side would need to conduct any meaningful discussion of settlement. With regard to the Bar Date Motion, Judge Bucki said a bankruptcy claims bar date of August 14, 2021, will avoid some of the confusion regarding the deadline for victims to take action. This avoidance of confusion inures to the benefit of both claimants and the Diocese. In the Mediation Motion, the Diocese asserted a desire to work toward a global settlement of claims against both the Diocese and its parishes. The common deadline of August 14, 2021, will reduce the likelihood of the problem that might occur if a plaintiff were to commence a timely action against a parish but file a late claim against the Diocese. A bar date of August 14, 2021, should also not become a cause for delay, particularly because the parties in the insurance litigation can use this time to receive the report of the insurance archivist and to advance exchanges of information needed as a prerequisite for either litigation or mediation. The adversary case is in re: THE DIOCESE OF BUFFALO, N.Y., Plaintiff, v. THE CONTINENTAL INSURANCE COMPANY, EMPLOYERS INSURANCE COMPANY OF WAUSAU (FORMERLY KNOWN AS EMPLOYERS INSURANCE OF WAUSAU A MUTUAL COMPANY FORMERLY KNOWN AS EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN), WAUSAU UNDERWRITERS INSURANCE COMPANY, SELECTIVE INSURANCE COMPANY OF AMERICA (FORMERLY KNOWN AS EXCHANGE MUTUAL INSURANCE COMPANY), NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, FIREMAN'S FUND INSURANCE COMPANY, CATHOLIC MUTUAL GROUP, AND THE NATIONAL CATHOLIC RISK RETENTION GROUP, Defendants, Nos. BK 20-10322 CLB, AP 20-1009 CLB (Bankr. W.D.N.Y.). A full-text copy of the Court's Decision and Order is available at https://bit.ly/3lY98Dx from Leagle.com. Bond, Schoeneck & King, PLLC, Stephen A. Donato, Esq. , Charles J. Sullivan, Esq. , Brian J. Butler, Esq. , Grayson T. Walter, Esq. , of counsel, Syracuse, New York, Attorneys for The Diocese of Buffalo, N.Y. Blank Rome LLP, James R. Murray, Esq. , of counsel, New York, New York, Attorneys for The Diocese of Buffalo, N.Y. Charles Mendolera , Buffalo, New York, Principal. Pachulski Stang Ziehl & Jones LLP, Ilan D. Scharf, Esq. , of counsel New York, New York, Attorneys for Official Committee of Unsecured Creditors. Gleichenhaus, Marchese & Weishaar, PC, Scott Bogucki, Esq. , of counsel, Buffalo, New York, Co-Counsel for Official Committee of Unsecured Creditors. Peter Starks , Kevin Brown , Richard Brownell Members of the Official Committee of Unsecured Creditors. About The Diocese of Buffalo, N.Y. The Diocese of Buffalo, N.Y., is home to nearly 600,000 Catholics over eight counties in Western New York. The territory of the diocese is co-extensive with the counties of Erie, Niagara, Genesee, Orleans, Chautauqua, Wyoming, Cattaraugus and Allegany in New York State, comprising 161 parishes. There are 144 diocesan priests and 84 religious priests who reside in the Diocese. The diocese through its central administrative offices (a) provides operational support to the Catholic parishes, schools and certain other Catholic entities that operate within the territory of the Diocese "OCE"; (b) conducts school operations through which it provides parish schools with financial and educational support; (c) provides comprehensive risk management services to the OCEs; (d) administers a lay pension trust and a priest pension trust for the benefit of certain employees and priests of the OCEs; and (e) provides administrative support for St. Joseph Investment Fund, Inc. Dealing with sexual abuse claims, the Diocese of Buffalo sought Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-10322) on Feb. 28, 2020. The diocese was estimated to have $10 million to $50 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Carl L. Bucki is the case judge. Bond, Schoeneck & King, PLLC, led by Stephen A. Donato, Esq., is the diocese's counsel; Connors LLP is its special litigation counsel; and Phoenix Management Services, LLC is its financial advisor. Stretto is the claims agent, maintaining the page https://case.stretto.com/dioceseofbuffalo/docket. DOMINION GROUP: Linquist Suit Transferred to Louisiana Court ------------------------------------------------------------ District Judge John A. Ross granted Defendants Dominion Proppants, LLC and Wesley Robert's motion to transfer the case captioned LONQUIST FIELD SERVICES, LLC, Plaintiff, v. DOMINION PROPPANTS, LLC, et al., Defendants, Case No. 1:19-cv-00213-JAR (E.D. Miss.) to the United States District Court for the Eastern District of Louisiana. The Plaintiff sought to collect over $300,000 in unpaid invoices and expenses for services provided to Defendants, including through enforcement of a lien on the property of Defendant Cape Quarry, LLC. On Sept. 3, 2019, Defendants Dominion Group, LLC and Cape Quarry, LLC commenced Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the Eastern District of Louisiana. The Defendants subsequently removed the case to the Eastern District of Mississippi, claiming "related to" jurisdiction under 28 U.S.C. sections 1334(b). The Movants now sought to transfer venue to the Eastern District of Louisiana pursuant to 28 U.S.C. section 1412. The Movants argued that the interest of justice or convenience of the parties merits transfer of this case. The granting of a motion to transfer venue is within the Court's discretion. Generally, there is a "strong presumption in favor of placing venue in the district court where the bankruptcy case is pending." According to Judge Ross, when assessing whether transfer is in the interest of justice, courts frequently consider the economics of estate administration; presumption in favor of the venue of the bankruptcy proceeding; judicial efficiency; ability of the parties to receive a fair trial; a state's interest in having local controversies decided within its borders by those familiar with its laws; enforceability of any judgment rendered; and plaintiff's original choice of forum. Judge Ross said that the Movants convincingly argued that transfer of this case promotes the economic administration of the estate and serves judicial efficiency. The Court agreed that it is more efficient for all claims to be handled by common counsel in the Eastern District of Louisiana, where the bankruptcy case is pending. Meanwhile, transfer would not require substantial duplication of judicial efforts at this early stage of litigation. The convenience of the parties factor also favors transfer, as all Defendants are in Louisiana while none of the parties are domiciled in Missouri. The Movants have made a compelling case that both the interests of justice and convenience of the parties favor transfer, while Plaintiff has not offered any assessment of these factors. Plaintiff did note, and the Court recognized, that its choice of forum should be granted some deference. Despite this argument, the balance of interests and strong presumption in favor of placing venue in the same district court as the bankruptcy proceeding demonstrate that transfer is appropriate. Rather than address the substance of the motion to transfer, Plaintiff primarily requested that the Court hold the motion in abeyance while awaiting the outcome of the bankruptcy proceedings. This case has been automatically stayed pursuant to 11 U.S.C. section 362(a). In response to this Court's Show Cause Order, the Plaintiff explicitly stated that the Court can rule on the Movants' pending motion for transfer despite the stay, as "this case need not remain pending in limbo on the Court's docket." Given Plaintiff's prior statements and the clear precedent indicating that transfer is appropriate, the Court saw no reason to hold the motion in abeyance. Judge Ross, therefore, granted the Movants' motion to transfer the case to the United States District Court for the Eastern District of Louisiana. The Plaintiff’s motion for abstention and remand, and alternative motion for severance and Remand was denied without prejudice. A copy of the Court's Memorandum and Order is available at https://bit.ly/36ZdF4s from Leagle.com. About Dominion Group Dominion Group -- https://www.dominiongp.com/ -- is a turn-key bulk materials producer and provider, which operates marine terminals and provides transportation and logistics support serving businesses on the Mississippi River and Gulf Coast. Cape Quarry, a wholly-owned subsidiary of Dominion, owns and operates a limestone quarry in Cape Girardeau County, Missouri. Dominion Group, LLC, based in Baton Rouge, LA, and its debtor-affiliates sought Chapter 11 protection (Bankr. E.D. La. Lead Case No. 19-12366) on Sept. 3, 2019. In the petition signed by Joe William Cline, III, manager, Dominion Group was estimated to have assets and liabilities of $1 million to $10 million; and Cape Quarry LLC was estimated assets of $10 million to $50 million and estimated liabilities of $1 million to $10 million. The Hon. Jerry A. Brown oversees the case. The Debtors hired ADAMS & REESE LLP as counsel; CHIRON ADVISORY SERVICES LLC as financial advisor; and CHIRON FINANCIAL LLC as investment banker. EAS GRACELAND: Seeks to Hire Glankler Brown as Legal Counsel ------------------------------------------------------------ EAS Graceland, LLC seeks authority from the U.S. Bankruptcy Court for the Western District of Tennessee to hire Glankler Brown, PLLC as its legal counsel. The firm's services will include legal advice regarding its duties under the Bankruptcy Code and the preparation of a Chapter 11 plan of reorganization. Glankler Brown's attorneys and paralegals will be paid at hourly rates as follows: Michael P. Coury Member $400 Ricky Hutchens Associate $250 Jeanie R. Bouck Paralegal $195 Glankler Brown neither represents nor holds any interest adverse to Debtor, according to court filings. The firm can be reached through: Michael P. Coury, Esq. Ricky L. Hutchens, Esq. Glankler Brown, PLLC 6000 Poplar Ave, Suite 400 Memphis, TN 38119 Tel: 901-525-1322 Email: mcoury@glankler.com rhutchens@glankler.com About EAS Graceland EAS Graceland, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 20-24484) on Sept. 15, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge David S. Kennedy oversees the case. Glankler Brown PLLC serves as Debtor's legal counsel. ELITE TOUR: Seeks to Hire J. Eugene Miles as Legal Counsel ---------------------------------------------------------- Elite Tour Travel Club, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire the Law Office of J. Eugene Miles, LLC as its legal counsel. The firm's services are as follows: a. advise the Debtor as to its rights, duties and powers; b. prepare and file documents and pleadings necessary to be filed by the Debtor in its Chapter 11 case; c. represent the Debtor at all proceedings in the case; and d. perform other legal services in connection with the case. The firm neither holds nor represents an interest adverse to the Debtor or its estate, according to a court filing. The firm can be reached through: Jason E. Miles, Esq. Law Office of J. Eugene Miles, LLC 711 St. Paul Street Baltimore, MD 21202 Telephone: (410) 727-0406 E-mail: jem3472@gmail.com About Elite Tour Travel Club, LLC Elite Tour Travel Club, LLC is a Temple Hills, Md.-based single asset real estate corporation. Elite Tour Travel Club sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 20-19201) on Oct. 12, 2020. At the time of the filing, Debtor had estimated assets of between $100,001 and $500,000 and liabilities of the same range. Law Office of J. Eugene Miles is Debtor's legal counsel. ENERGY FISHING: Taps Snow & Green as Special Counsel ---------------------------------------------------- Energy Fishing & Rental Services, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Snow & Green LLP as its special counsel. Snow & Green will perform necessary legal services related to Debtor's master services agreements with customers, proof of claim filings, and perfecting lien rights during the course of Debtor's Chapter 11 case. Snow & Green's hourly rates are as follows: Holly Hamm, Shareholder $375 Brenda Brewton, Paralegal $100 Holly Hamm, Esq., a shareholder of Snow & Green, disclosed in court filings that the firm neither holds nor represents any interest adverse to the Debtor's estate. The counsel can be reached through: Holly C. Hamm, Esq. Snow & Green LLP P.O. Box 549 Hockley, TX 77447 Tel: 713-335-4808 Email: holly@snow-green.com About Energy Fishing & Rental Services, Inc. Houston, Texas-based Energy Fishing & Rental Services, Inc. provides fishing and downhole intervention services. The Company offers accumulators, adapters, backoff tools, bailers, bails, bars, baskets, bits, blocks, blowout preventers, bushings, casing patches, couplings, cutters, die collars, rabbits, elevators, extensions, overshots, and accessories. Visit http://www.energyfrs.com for more information. Energy Fishing & Rental Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. SD. Tex. Case No. 20-20299) on September 18, 2020. The petition was signed by Arthur L. Potter, chairman and president. 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 David R. Jones oversees the case. Munsch Hardt Kopf & Harr, P.C. is Debtor's legal counsel. ENGINEERED PROPULSION: Hires Guinn Vinopal as Financial Advisor --------------------------------------------------------------- Engineered Propulsion Systems, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Wisconsin to employ Guinn, Vinopal & Zahradka, LLP as its financial advisor and auditor. The professional services to be rendered by Guinn Vinopal are as follows: 1. audit the consolidated balance sheet, consolidated statement of comprehensive income, consolidated schedule cost of goods sold, and consolidated schedule of operating expenses of the Debtor; and 2. provide an opinion on whether the financial statements of the Debtor are fairly presented, in all material aspects, in conformity with U.S. generally-accepted accounting principles. Guinn Vinopal will be paid at hourly rates as follows: Jason P. Zahradka, Esq. $215 Other Professionals $82 To $170 Guinn Vinopa is a "disinterested person" within the meaning of sections 101(14) and 327 of the Bankruptcy Code, according to court filings. The firm can be reached through: Jason P. Zahradka, Esq. Guinn, Vinopal & Zahradka, LLP 110 E 3rd St. New Richmond, WI 54017 Phone: +1 715-246-6976 About Engineered Propulsion Systems Engineered Propulsion Systems, Inc., a manufacturer of aircraft engines and engine parts in New Richmond, Wis., filed a Chapter 11 petition (Bankr. W.D. Wis. Case No. 20-11957) on July 29, 2020. Engineered Propulsion president Michael Fuchs signed the petition. At the time of the filing, the Debtor was estimated to have $100 million to $500 million in assets and $10 million to $50 million in liabilities. Judge G. Michael Halfenger oversees the case. The Debtor tapped Steinhilber Swanson, LLP as its bankruptcy counsel; Jarchow Law, LLC as its general corporate counsel; and Shaun M. Simma, CPA and Simma Flottemesch & Orenstein, Ltd. as accountants. EQUINOX HOLDINGS: Moody's Lowers CFR to Caa3, Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded Equinox Holdings, Inc.'s ratings, including its Corporate Family Rating to Caa3 from Caa2, and Probability of Default Rating to Caa3-PD from Caa2-PD. Concurrently, Moody's downgraded Equinox's first lien debt instrument ratings to Caa2 from Caa1 and second lien debt instrument ratings to Ca from Caa3. The outlook remains negative. The downgrade reflects Moody's view that the probability of a balance sheet restructuring or distressed exchange transactions over the next 12-18 months has increased to a high level. Equinox's geographic concentration in costal California cities and New York City has materially delayed its ability to return to a normalized operating level relative to its peers. The level of dues paying members continues to lag Moody's projections from May 2020. Given recent performance, Moody's now expects lease adjusted debt-to-EBITDA to remain above 12x through FY 2021 based on projected lease adjusted EBITDA that is close to 30% below the 2019 pre-coronavirus level, and views the company's capital structure as becoming increasingly unsustainable. The downgrade also reflects Equinox's weak liquidity. Moody's expects the company will not have enough cash on hand to satisfy its obligation as a guarantor of SoulCycle's credit agreement coming February 2021. The company's unused capacity on its $150 million revolver is also constrained by the springing maximum leverage ratio, which Moody's believes Equinox would be unable to meet if triggered. The revolver expires in March 2022, and Moody's is concerned with the company's ability to extend or refinance the facility when it becomes current early next year. Moody's took the following ratings actions: Ratings Downgraded: Issuer: Equinox Holdings, Inc. Corporate Family Rating, downgraded to Caa3 from Caa2 Probability of Default Rating, downgraded to Caa3-PD from Caa2-PD Senior Secured First Lien Term Loan, downgraded to Caa2 (LGD3) from Caa1 (LGD3) Senior Secured First Lien Revolving Credit Facility, downgraded to Caa2 (LGD3) from Caa1 (LGD3) Senior Secured Second Lien Term Loan, downgraded to Ca (LGD5) from Caa3 (LGD5) Outlook Actions: Issuer: Equinox Holdings, Inc. Outlook, remains Negative RATINGS RATIONALE Equinox's Caa3 CFR reflects its very high leverage with Moody's lease adjusted debt/EBITDA expected to remain above 12x through FY 2021 due to earnings decline related to coronavirus crisis and a high debt balance. The rating also reflects Equinox's weak liquidity and Moody's believes that company will not have sufficient cash on hand and revolver availability to fund the interim cash burn, club reopening costs and payments due on the SoulCycle guarantee. The rating is also constrained by the highly fragmented and competitive fitness club industry as having high business risk given its low barriers to entry, exposure to cyclical shifts in discretionary consumer spending, and high attrition rates. In addition, the rating considers the company's geographic concentration in New York City and coastal California, both of which are expected to maintain shelter-in-place mandates for a longer period of time relative to other states. An estimated 84 of the company's 105 clubs are open, but at reduced capacity that is leading to paying memberships remaining well below pre-coronavirus levels. However, the credit profile is supported by Equinox's well-recognized brand names and market position among upscale fitness clubs, and investment in assets that support more technology-enabled fitness delivery such as content. 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 Equinox 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. Specifically, the weaknesses in Equinox's credit profile, including its exposure to discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the ongoing coronavirus pandemic and social distancing measures. Multiple governance factors are also credit negative including aggressive financial policies under ownership by Related Companies, management and private equity firm L. Catterton. The SoulCycle debt guarantee is a meaningful governance concern. SoulCycle was spun-off from the company in 2016 and Equinox is entitled to only a modest future fee in exchange for the guarantee in October 2019 on SoulCycle's debt. The negative outlook reflects the increased probability for a balance sheet restructuring or distressed exchange over the next 12 to 18 months given Equinox's very high debt level and weak liquidity. The negative outlook also reflects Moody's view that Equinox remains vulnerable to coronavirus disruptions and unfavorable shifts in discretionary consumer spending that could weaken estimate recovery in a default scenario. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company satisfies its SoulCycle debt guarantee, operating performance improves including a reopening of the clubs and stable to positive membership and pricing trends, and Equinox strengthens credit metrics. A material improvement in liquidity could also lead to an upgrade. The ratings could be downgraded if the clubs remain closed, membership levels remain weak, the potential for a distress exchange or other default increases for any reason, or estimated recovery values weaken. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Equinox Holdings, Inc., headquartered in New York, NY, operates fitness facilities across the US under the Equinox and Pure Yoga brands. Equinox is majority-owned by individuals and entities affiliated with The Related Companies, L.P., a privately held New York real estate firm, with L Catterton and members of management holding a minority interest. Equinox's revenues were approximately $870 million for the trailing twelve months ended June 30, 2020. ESM INC: Dosa Fillmore Closes After Filing Bankruptcy ----------------------------------------------------- Eve Batey of The Eater San Francisco reports that upscale South Indian restaurant Dosa has operated locations in San Francisco for over 15 years, but that came to an end September. The pandemic was the final straw for the struggling company, which filed for bankruptcy in the fall of 2019. It's now turning its attention to a ghost kitchen/delivery model, as well as its three-year-old fast-casual location in Oakland. Things seemed rosy for Dosa at the end of 2017, when it opened Dosa by DOSA, a 3,600-square-foot, 112-seat restaurant and marketplace near 19th Street BART. With a full liquor license and service from breakfast through dinner, it seemed like an ideal complement to the company's San Francisco locations, both of which were oft-packed, sit-down spots serving California-influenced Indian standbys like bondas with Dungeness crab, fresh uttapam, and — of course — a variety of dosas. Less than two years later, Dosa closed its original location on Valencia Street. Speaking with Eater SF in September of 2019, co-owner Anjan Mitra said that a variety of factors ended the 15-year-old spot's run: The restaurant's rent had tripled since its first days in 2005, and labor costs continued to rise. "Rent doesn't tell the whole story," Mitra said at the time. "The rent's an issue because you're spending 45 percent on labor, as opposed to 35 percent.... When you have a neighborhood restaurant working on slim margins, there's no give." By then, Dosa had spent some time investing in a new model, Mitra says, developing a line of retail offerings available at stockists like Whole Foods, and serving meals from satellite kitchens across the Bay Area, part of a partnership with Virtual Kitchen Co., a VC- backed company launched by a pair of former Uber execs. In this model, Dosa's food is prepared in a South San Francisco commissary kitchen, then is picked up by Virtual Kitchen Co. workers, who transport it to its own kitchens, where workers reheat meals then pass them off to delivery drivers from companies like Uber Eats, DoorDash, Postmates, and GrubHub. It's one of the "things that has actually done OK," Mitra says, though "it's a fraction of what we were making" prior to the pandemic. Despite this new revenue stream, in November of 2019, the company had reached a point where it was necessary to file for Chapter 11 bankruptcy. The hope, Anjan Mitra tells Eater SF, was that the filing might provide them some relief with creditors and allow them to get their business "back on track." "The [bankruptcy] happened as a result of an already fragile industry caused by onerous legislative issues and leadership that I raised when we closed Dosa on Valencia," Mitra says. Labor costs continue to rise, he says, citing increases in minimum wage and health care mandates. "These are macro issues you're trying to solve at the micro level," Mitra tells Eater SF, with legislators "trying to make small businesses solve problems they can't," such as health care and the city's high cost of living. "Raising minimum wage from $12 to $15 isn't going to allow anyone to stay in San Francisco," Mitra says, but he argues that the difference can erode a restaurant's margin to the breaking point. And that was before the pandemic, which has placed further burdens on the already struggling industry. "We definitely would not have closed so soon if it weren't for COVID-19," Mitra tells Eater SF about the its last San Francisco restaurant, which had been completely closed since the city's shelter in place began. The high-ceilinged, glamorous spot opened in 2009, and its lease was up. "Given the uncertainty" of the pandemic, Mitra says, "there was no option to renew," so the company had to let its Fillmore spot go, too. But, again, he says that "rent to me is kind of a red herring," and that “if our health care and labor hadn't gone up...there was just no room for us to move." The bankruptcy proceedings have given Dosa a little bit of breathing room, Mitra says, as it "released our debt." And its Oakland location is still open for takeout, though Mitra says that that, too, is "touch and go." "People are leaving already," Mitra says, "and we're getting a look at how things will be post-COVID. What happens when everyone looks around and sees that all the restaurants are gone? What will make them stay?" "If the city," Mitra says, speaking specifically about San Francisco, "really wants to save these neighborhoods, then they've got to support their local restaurants. Unless they relay the laws and help bring labor costs down, it's going to be over. No one will stay." About Dosa Dosa is an upscale Indian restaurant in Fillmore, San Francisco ESM Inc., doing business as Dosa Filmore, sought Chapter 7 bankruptcy petition (Bankr. N.D. Cal. Case No. 19-3128) on Nov. 22, 2019. The Debtor's counsel: Stephen D. Finestone Finestone Hayes LLP Tel: 415-421-2624 E-mail: sfinestone@fhlawllp.com EXACTUS INC: Sells 700,000 Common Shares to Interim CEO ------------------------------------------------------- Exactus, Inc. concluded a private sale and issuance of common stock to its Interim CEO and Director, Emiliano Aloi. Mr. Aloi subscribed for 700,000 shares of common stock at a price of $0.05, for total proceeds of $35,000. The offer and sale of these shares to Mr. Aloi was exempt under Rule 506 of Regulation D under the Securities Act. About Exactus Exactus Inc. (OTCQB:EXDI) -- http://www.exactusinc.com/-- is a producer and supplier of hemp-derived ingredients and feminized hemp genetics. Exactus is committed to creating a positive impact on society and the environment promoting sustainable agricultural practices. Exactus specializes in hemp-derived ingredients (CBD/CBG/CBC/CBN) and feminized seeds that meet the highest standards of quality and traceability. Through research and development, the Company continues to stay ahead of market trends and regulations. Exactus is at the forefront of product development for the beverage, food, pets, cosmetics, wellness, and pharmaceutical industries. Exactus reported a net loss of $10.22 million for the year ended Dec. 31, 2019, compared to a net loss of $4.34 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $6.03 million in total assets, $5.21 million in total liabilities, and $817,142 in total stockholders' equity. RBSM LLP, in Henderson, NV, the Company's auditor since 2014, issued a "going concern" qualification in its report dated May 22, 2020, citing that the Company has recurring losses from operations, limited cash flow, and an accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. FAIRBANKS CO: Court Rejects NUFIC's Reimbursement Claims -------------------------------------------------------- In the case captioned THE FAIRBANKS COMPANY, Objector, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Claimant, Case No. 18-41768-pwb (Bankr. N.D. Ga.), Bankruptcy Judge Paul W. Bonapfel held that National Union is not entitled to reimbursement of: -- indemnity payments or defense costs based on its reservation of rights, and -- overpayments and defense costs based on any subrogation rights it has. National Union provided two policies of insurance to Fairbanks for general commercial liabilities that together covered a period of 13 months, from June 1, 1986, to July 1, 1987. Each policy contains a "Deductible Liability Insurance" endorsement. Claims have been filed against Fairbanks as a result of its manufacture and distribution of products containing asbestos in 2002. National Union began making payments under the policies on account of these claims in 2004. National Union defended under a reservation of rights, set forth in a letter dated June 10, 2004. The reservation of rights does not state "a reservation of rights to recover defense costs or reimbursement of any payments under the policies." In 2005, some of Fairbanks' insurers entered into an interim cost-sharing agreement for defense and indemnity costs. In 2009, National Union began participating in a cost-sharing agreement with the other insurers. Fairbanks did not participate in either agreement. Under these agreements, all of the costs of defending and indemnifying Fairbanks were apportioned among National Union and the other participating insurers. In 2013, one of the participating insurers (commonly referred to as "Lumbermens") entered into a liquidation proceeding in Illinois. Accordingly, it no longer participated in the cost-sharing. In June 2013, Liberty Mutual filed a declaratory judgment action in the Southern District of New York against Fairbanks to obtain a determination of its allocable share of costs and indemnification. Fairbanks then filed a complaint in a Georgia state court against Liberty Mutual, National Union, and other insurers. The state court action asserted breach of contract claims against National Union and Liberty Mutual and sought a declaratory judgment against all insurer defendants regarding its claims for coverage. After removal of Fairbanks's complaint to the United States District Court for the Northern District of Georgia and transfer of it to the United States District Court for the Southern District of New York, both were pending before District Judge John G. Koeltl. On Jan. 27, 2014, and Feb. 18, 2014, National Union sent additional letters to Fairbanks asserting reservations of its rights. These letters included a reservation of National Union's rights to recoup defense and indemnity payments for which it ultimately might be found to have no obligation. On March 22, 2016, the Coverage Court issued the summary judgment order. The cost-sharing agreement ceased in mid-2016 due to a decision by the New York Court of Appeals in In re Viking Pump, Inc., and Warren Pumps, LLC, 27 N.Y.3d 244, 52 N.E.3d 1144 (2016), that made the "all sums" approach applicable to the Liberty Mutual policies. The Coverage Court has stayed the Coverage Action due to the automatic stay of section 362(a) arising as a result of Fairbanks's chapter 11 filing. Fairbanks and Liberty Mutual have agreed to a settlement of their disputes. Fairbanks filed its chapter 11 petition to address present and future asbestos claims through the confirmation of a plan and the issuance of a so-called "channeling injunction" pursuant to 11 U.S.C. section 524(g). Its objective is to confirm a plan that provides for an asbestos personal injury trust funded by approximately $40 million in insurance proceeds from the settlement with Liberty Mutual Insurance Company and the net proceeds from the sale of its business as a going concern. The parties have not yet asked the Court to approve the settlement, and Fairbanks has not yet filed a chapter 11 plan. National Union's proof of claim is for reimbursement for the sums it paid out prior to the chapter 11 filing that it contends are above and beyond its responsibility under the policies. The claim has two components: -- National Union asserted a claim of $985,077.29 as the difference between what it should have paid in indemnity under the pro rata approach to the calculation of its liability and what it did pay. -- The second part of National Union's claim is for overpayment of defense costs. National Union estimates that the difference between what it paid and what it should have paid based on application of the pro rata approach to defense costs is $249,235.03. Fairbanks disputed National Union's calculations. At the evidentiary hearing, the Court stated that it would first determine the liability of Fairbanks on the claims National Union asserts and then conduct further proceedings, if necessary, to determine the amount of the claims. National Union asserted that, under Georgia law, when an insurer defends tort claims under a reservation of rights and pays more than the insurance policy requires, the insurer is entitled to reimbursement based on an unjust enrichment or implied in fact contract theory. National Union argued that Illinois Union Insurance Co. v. NRI Construction, Inc., 846 F.Supp.2d 1366 (N.D. Ga. 2012), establishes this principle. The court discussed the national split of authority on the question of whether an insurer has a right to reimbursement of defense costs when it is later determined that the insurer had no duty to defend. The majority rule, the court explained, permits reimbursement "where the insurer (1) timely and explicitly reserves its rights to recoup the costs; and (2) provides specific and adequate notice of the possibility of reimbursement," even in the absence of an express agreement by the insured. The court noted that the question was a matter of first impression in Georgia, and concluded that Georgia case law supported the majority view. The Illinois Union court concluded that the insurer had timely reserved its right to recoup defense costs and had provided specific and adequate notice of the possibility of reimbursement. The court ruled, therefore, that the insurer was entitled to reimbursement of its defense costs under either an unjust enrichment or implied in fact contract theory. The ruling in Georgia Interlocal Risk Management Agency v. City of Sandy Springs, 337 Ga.App. 340, 788 S.E.2d 74 (2016), controls the question of National Union's rights to reimbursement of indemnity payments and defense costs. National Union began its defense in 2004 under a reservation of rights that did not explicitly reserve its rights to reimbursement of indemnity payments and defense costs. Its later reservation of rights for those items did not occur until 2014. The reservation in 2014 was not timely, and it cannot be effective for any indemnity payments or defense costs, even those that occurred after its issuance. The Court concluded, therefore, that National Union is not entitled to reimbursement of indemnity payments or defense costs based on its reservation of rights. National Union also asserted that its subrogation rights under the policies give rise to a right of reimbursement. The Court held that because nothing has affected National Union's subrogation rights at this time, National Union is not entitled to a reimbursement claim at this point for a related reason: it has not yet suffered any loss. Moreover, at this point the Court has no basis for determining that National Union will suffer any loss if the Liberty Mutual settlement and a plan, in this case, affect the subrogation claim as National Union may fear. National Union can have a loss only if Fairbanks has a meritorious claim against Liberty Mutual. Liberty Mutual disputes it. According to Judge Bonapfel, the Court cannot simply assume for the purpose of claim allowance that Fairbanks will prevail on a claim against Liberty Mutual. The record before the Court establishes only that National Union paid more than its share and its conclusion that Liberty Mutual is liable to Fairbanks for the Excess Amount. The Court will not speculate on the merits of the claim when the parties have not addressed it and the issue is not before the Court. In any event, the Court cannot allow a reimbursement claim because of the subrogated claim against Liberty Mutual based on speculation. The Court concluded, therefore, that National Union is not entitled to reimbursement of overpayments and defense costs based on any subrogation rights it has. A copy of the Court's Order is available at https://bit.ly/3iYmfmu from Leagle.com. About The Fairbanks Company Incorporated in 1891, The Fairbanks Company -- http://www.fairbankscasters.com/-- is a Georgia corporation that manufactures customized material handling equipment in its more than 200,000-square-foot manufacturing and warehousing facility located in Rome, Georgia. The Fairbanks Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-41768) on July 31, 2018. In the petition signed by CEO Robert P. Lahre, the Debtor estimated assets of $1 million to $10 million and liabilities of $100,000 to $500,000. Judge Paul W. Bonapfel oversees the case. The Debtor tapped Reed Smith LLP as its bankruptcy counsel, and Ogier, Rothschild & Rosenfeld, PC, as its local counsel. Cohen & Grigsby, P.C., is the insurance coverage counsel. On Oct. 11, 2018, the U.S. Trustee for Region 21 appointed a committee, which is comprised of creditors who hold unsecured claims against the Debtor for personal injury or wrongful death resulting from exposure to asbestos or asbestos-containing products. The committee tapped Caplin & Drysdale, Chartered as its legal counsel, and Jones & Walden, LLC as its local counsel. On April 17, 2019, the court appointed James L. Patton Jr. as legal representative for persons who may in the future assert an asbestos-related personal injury claim against the Debtor. FARMLAND INDUSTRIES: AELS Bid to Dismiss Certus Suit "Premature" ---------------------------------------------------------------- AELS Administrative Services, LLC moved to dismiss the complaint captioned TARASENT, LLC, a Kansas limited liability company d/b/a Certus Advisory Partners, Plaintiff, v. AELS ADMINISTRATIVE SERVICES, LLC, a Missouri limited liability company, Defendant, No. 4:20-cv-00388-NKL (W.D. Mo.) for failure to join a required party and on the ground that the Court lacks personal jurisdiction over the absent party, the Missouri Department of Natural Resources ("MDNR"). Upon analysis, District Judge Nanette K. Laughrey denied AELS's motion to dismiss but Certus was ordered to amend the complaint to add MDNR as a party. In May 2002, Debtors Farmland Industries, Inc. and certain of its affiliates commenced Chapter 11 bankruptcy proceedings before the U.S. Bankruptcy Court for the Western District of Missouri. The Debtors ultimately pursued liquidation, and pursuant to the Debtors' Second Amended and Restated Plan of Liquidation, as modified, which the Bankruptcy Court confirmed on Dec. 19, 2003, the FI Liquidating Trust was established and a Liquidating Trustee was designated. As part of the Liquidating Trustee's efforts, a resolution was reached with MDNR respecting MDNR's regulatory enforcement order pending against the Debtors. On April 30, 2004, the FI Missouri Remediation Trust was created to resolve the Debtors' liability under the MDNR Order and to implement certain remedial measures undertaken in connection with the MDNR Order. At inception, the FIMR Trust Grantors were the Debtors and the Liquidating Trust; the FIMR Trust corpus was comprised of title to two "trust sites" and $5,509,808; the trustee was SELS Administrative Services, LLC (which later became AELS); and the beneficiaries were MDNR and the Liquidating Trust. Pursuant to the terms of the FIMR Trust Agreement, and on April 30, 2006, the Liquidating Trust contributed an additional $1,882,718, "to pay for the Trust's Administrative Expenses." In or about August 2005, one of the two "trust sites" was sold to a third-party, so that today the FIMR Trust corpus is comprised of, inter alia, a single real estate asset. In or about April 2009, Certus purchased the Liquidating Trust's residual beneficial interest in and to the FIMR Trust, and now stands in the shoes of the Liquidating Trust under the Trust Agreement as the Residual Beneficiary of the FIMR Trust. In the wake of the May 2011 Joplin Tornado and resulting cleanup efforts, the United States Environmental Protection Agency, Region 7, unilaterally determined that the Site should be used as a repository for the disposal of mining waste and residential yard soils from the tornado zone and surrounding area. In order to so utilize the Site, the EPA and the Trustee entered into a series of access agreements starting with a June 12, 2013 Access Agreement and culminating with a March 8, 2016 Administrative Settlement and Order on Consent for Treatability Study, which is currently in effect. The Trustee (AELS) is required to make payments from the FIMR Trust Remediation Funds for all fees and expenses incurred for the purpose of implementing Environmental Actions. The Trustee is precluded from making any payments from Administrative Funds for any purpose other than paying Administrative Expenses, and the term "Administrative Expenses" as defined by the FIMR Trust excludes all fees and expenses associated with Environmental Actions. As of April 30, 2020, in response to MDNR Order No. MO-0053627 and the AOC, the FIMR Trust has expended $7,276,735. The Trustee reports that a total of $5,721,043 in Site Response Costs have been allocated to Environmental Actions and thus are chargeable to Remediation Funds, and that a total of $1,555,692 in Site Response Costs have been allocated as Administrative Expenses chargeable to Administration Funds. The Trustee reports that, as of April 30, 2020, the FIMR Trust accordingly maintained a total of $1,224,375 denominated as Remediation Funds and a total of $1,075,243 denominated as Administrative Funds. In the First Cause of Action, Certus sought (1) a "declaration that the Trustee is authorized to sell the Site in the absence of a No Further Action Letter or a Permission Letter from MDNR, so long as the buyer agrees to assume all of the environmental liabilities associated [with] the Site" and (2) "a declaration that all expenses, fees and costs in any way associated with Environmental Actions are solely allocable to the FIMR Trust's Remediation Funds and may not be allocated to the FIMR Trust's Administrative Funds." Certus alleged that the Trustee paid fees and expenses associated with Environmental Actions from Administrative Funds in violation of the Trust Agreement. In the Second Cause of Action, Certus alleges breach of trust by AELS and seeks a "comprehensive accounting" and injunctive relief as follows: a) compelling the Trustee to perform its duties consistent with Missouri law and the [FIMR Trust]; b) enjoining the Trustee from committing any further breach of trust relative to its administration, management and oversight of the [FIMR Trust]; and c) compelling the Trustee to redress the breaches of trust by paying money, restoring property, or other means. According to Judge Laughrey, the declarations that Certus requests aim to change the status quo with respect to the Site and allocation of fees -- trust property -- and therefore implicate MDNR's interests. Similarly, Certus's requests for a "comprehensive accounting" and injunctive relief implicate MDNR's interests in the trust property. Courts applying Missouri law have routinely held that beneficiaries are necessary parties in actions seeking an accounting or affecting the trust corpus because of their interest in that corpus. Certus's claims, which seek both an accounting and actions affecting the res, thus render MDNR a required party. As a result, Judge Laughrey denied AELS's motion to dismiss on the ground that dismissal of the action for failure to add a required party is premature. However, because MDNR is a required party, Certus is ordered to amend its complaint to add MDNR as a party. Failure to so amend the complaint will result in dismissal of the action without prejudice. A copy of the Court's Order is available at https://cutt.ly/IghFDrs from Leagle.com. About Farmland Industries Farmland Industries, Inc., was one of the largest agricultural cooperatives in North America with about 600,000 members. The firm operates in three principal business segments: fertilizer production; pork processing, packing and marketing; and beef processing, packing and marketing. The company, along with its affiliates, filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W. Venters. The Debtors were represented by lawyers at Bryan Cave LLP. When the Debtors filed for chapter 11 protection, they listed total assets of $2.7 billion and total debts of $1.9 billion. During the Chapter 11 case, the Company sold its businesses, including its pork production and processing business to Virginia-based Smithfield Foods $367.4 million in cash and other consideration. The Bankruptcy Court confirmed the Second Amended Joint Plan of Reorganization filed by Farmland Industries, Inc., and its debtor-affiliates, and that plan was effective on May 1, 2004. FIGUEROA MOUNTAIN: Taps Lesnick Prince as Bankruptcy Counsel ------------------------------------------------------------ Figueroa Mountain Brewing, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Lesnick Prince & Pappas LLP as its bankruptcy counsel. The firm will provide the following professional services: a. advise the Debtor regarding its rights, responsibilities, powers and duties; b. advise the Debtor with respect to the rights and remedies of its bankruptcy estate; c. represent the Debtor in all hearings and proceedings in the Bankruptcy Court involving its estate; d. take all necessary action to protect and preserve the Debtor's estate; e. take any necessary action on behalf of the Debtor to negotiate, prepare on behalf of the Debtor and obtain approval of a Chapter 11 plan; f. prepare employment and fee applications for professionals; g. prepare and file or furnish all pleadings and other court filings; h. represent the Debtor in connection with obtaining authorized use of cash collateral; i. advise the Debtor in connection with any potential sale of its assets or business; j; appear before the court; k. object to claims or interests of creditors or other stakeholders as a situation may necessitate; and l. perform all other necessary or otherwise beneficial legal services for the Debtor. The current hourly rates for the firm's professionals most likely to work on the case are as follows: Matthew A. Lesnick $535 Christopher E. Prince $535 Andrew R. Cahill $395 Debra E. Cardarelli $315 Janet Mack (paralegal) $195 Prior to the petition date, the Debtor provided the firm with the following payments to serve as a retainer to secure payment of fees: September 18, 2020 $5,000 September 25, 2020 $25,000 Total $30,000 Christopher Prince, Esq., a partner at Lesnick Prince, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Christopher E. Prince, Esq. Matthew A. Lesnick, Esq. Debra E. Cardarelli, Esq. Lesnick Prince & Pappas LLP 315 W. Ninth St., Suite 705 Los Angeles, CA 90015 Telephone: (213) 493-6496 Facsimile: (213) 493-6596 Email: cprince@lesnickprince.com matt@lesnickprince.com dcardarelli@lesnickprince.com About Figueroa Mountain Brewing, LLC Founded in 2020, Figueroa Mountain Brewing, LLC is in the business of manufacturing beer with principal place of business in Buellton, Calif. Visit https://www.figmtnbrew.com for more information. Figueroa Mountain Brewing sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11208) on Oct. 5, 2020. Jaime Dietenhofer, the company's manager, signed the petition. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and liabilities of the same range. Judge Martin R. Barash oversees the case. Lesnick Prince & Pappas LLP is Debtor's legal counsel. FINGER OIL: Seeks to Hire Dean W. Greer as Legal Counsel -------------------------------------------------------- Finger Oil & Gas, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire the Law Offices of Dean W. Greer as its legal counsel. The firm will render the following services: (a) advise and consult with the Debtor as to its powers and duties; (b) take actions as may be necessary to preserve and protect the Debtor's assets; (c) prepare legal documents; (d) assist the Debtor in the development, negotiation and confirmation of a plan of reorganization; and (e) perform other legal services for the Debtor. Dean W. Greer, Esq. will be paid an hourly fee of $300. Mr. Greer disclosed in court filings that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Dean W. Greer, Esq. Law Offices of Dean W. Greer 2929 Mossrock, Ste. 117 San Antonio, TX 78230 Telephone: (210) 342-7100 Facsimile: (210) 342-3633 About Finger Oil & Gas, Inc. Finger Oil & Gas, Inc., an oil and gas producer in Castroville, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-51742) on October 13, 2020. Joseph M. Finger, Jr., president of Finger Oil & Gas, signed the petition. At the time of the filing, Debtor had total assets of $1,001,500 and total liabilities of $624,756. The Law Offices of Dean W. Greer is Debtor's legal counsel. FIRST TO THE FINISH: Taps Carmody MacDonald as Legal Counsel ------------------------------------------------------------ First to the Finish Kim and Mike Viano Sports Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Illinois to hire Carmody MacDonald P.C. as its legal counsel. The services Carmody MacDonald will render are as follows: a. advise the Debtor with respect to its rights, power and duties in this case; b. assist and advise Debtor in its consultations with any appointed committee relative to the administration of this case; c. assist the Debtor in analyzing the claims of creditors and negotiating with such creditors; d. assist the Debtor with investigation of the assets, liabilities and financial condition of Debtor and reorganizing Debtor's business in order to maximize the value of Debtor's assets for the benefit of all creditors; e. advise the Debtor in connection with the sale of assets or business; f. assist the Debtor in its analysis of and negotiation with any appointed committee or any third party concerning matters related to, among other things, the terms of a plan of reorganization; g. assist and advise the Debtor with respect to any communications with the general creditor body regarding significant matters in this case; h. commence and prosecute necessary and appropriate actions and/or proceedings on behalf of Debtor; i. review, analyze or prepare, on behalf of Debtor, all necessary applications, motions, answers, orders, reports, schedules, pleadings and other documents; j. represent the Debtor at all hearings and other proceedings; k. confer with other professional advisors retained by Debtor in providing advice to Debtor; l. perform all other necessary legal services in this case as may be requested by Debtor in this Chapter 11 proceeding; and m. assist and advise Debtor regarding pending arbitration and litigation matters in which Debtor may be involved, including continued prosecution or defense of actions and/or negotiations on Debtor's behalf. Carmody MacDonald's hourly rates are: Partners $345 - $450 Associates $240 - $330 Paralegals/Law clerks $200 - $215 Robert E. Eggmann, a principal of the law firm of Carmody MacDonald P.C., disclosed in court filings that the firm is a "disinterested person" within the meaning of Bankruptcy Code section 101(14). The firm can be reached through: Robert E. Eggmann, Esq. Carmody MacDonald P.C. 120 S. Central Avenue, Suite 1800 St. Louis, MO 63105 Telephone: (314) 854-8600 Facsimile: (314) 854-8660 Email: ree@carmodymacdonald.com About First to the Finish Kim and Mike Viano Sports Inc. First to the Finish Kim and Mike Viano Sports Inc. sells sporting goods, hobby, and musical instruments. First to the Finish Kim and Mike Viano Sports Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ill. Case No. 20-30955) on Oct. 7, 2020. The petition was signed by Mike Viano, president. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Robert E. Eggmann, Esq., at Carmody MacDonald P.C. represents the Debtor as counsel. FIRSTENERGY SOLUTIONS: District Court Tosses Lee Yeager Suit ------------------------------------------------------------ District Judge John R. Adams denied the Plaintiff's motion to lift the stay and granted the Defendant's motion to dismiss the case captioned LEE W. YEAGER, Plaintiff, v. FIRSTENERGY GENERATION CORP., Defendant, Case No. 5:15 CV 399 (N.D. Ohio) with prejudice. The Plaintiff filed a charge alleging discrimination on the basis of religion by Defendant with the Ohio Civil Rights Commission on Dec. 11, 2005, alleging that Defendant discriminated against him by the application of its direct deposit policy. The OCRC issued a final decision on the charge on Jan. 29, 2015. The Plaintiff then filed the action seeking to reopen on March 3, 2015. The Action was stayed as a result of Defendant's bankruptcy filing. The Action was included in the bankruptcy proceeding's Plan Supplement as a Cause of Action that the Plan Administrator is authorized to prosecute on behalf of the Debtors under the terms of Article IV.S. of the Plan. On April 16, 2020, the Plaintiff filed a motion to lift the stay with respect to the Action. The Defendant opposed this request as contrary to the terms of the Plan, which was confirmed by order of the United States Bankruptcy Court for the Northern District of Ohio and may be found on the docket in In re First Energy Solutions Corp., Case No. 18-50757 (Bankr. N.D. Ohio). Under Article XII.I. of the Plan, the stay is to remain in effect after the Effective Date of Feb. 27, 2020 for any action based on events that occurred prior to the Petition Date, where the non-Debtor party (i.e., Plaintiff): (1) received notice of the Bar Date and (2) failed to timely file a Proof of Claim. Article XII.I. mandates that the stay remain in place until the Debtor party (i.e., Defendant) is dismissed from the Action. According to Judge Adams, it is undisputed in this Action that the underlying events occurred prior to the Petition Date. It is also undisputed that Plaintiff received notice of the Bar Date and failed to file a Proof of Claim in the bankruptcy court. Therefore, in accordance with Article XII.I. of the Plan, and because the Court gives due deference to the bankruptcy court's Confirmation Order and Plan for purposes of finality, the Court denied the Plaintiff's motion to lift the stay. The Court also dismissed this Action pursuant to applicable bankruptcy law, the Bar Date Order, and the Plan. On July 30, 2018, the Bankruptcy Court entered the Bar Date Order, which set Oct. 8, 2018 as the Bar Date, or the deadline for filing proofs of claim for nongovernmental claimants. The Plaintiff did not contest that he was provided with notice of the Bar Date. However, despite receiving notice of the Bar Date, Plaintiff failed to file a proof of claim by the Bar Date or at any point prior to the Effective Date. Article VII.G. of the Plan provides that any and all proofs of claim filed after the Bar Date are disallowed and expunged as of the Effective Date of the Plan, without any further notice to or action, order or approval of the Bankruptcy Court, and holders of claims may not receive any distributions on account of such claims. Additionally, Bankruptcy Rule 3003(c)(2) requires the timely filing of proofs of claim. Judge Adams said any claims that Plaintiff could have asserted but did not assert in the bankruptcy proceeding against Defendant have been disallowed and expunged as of the Effective Date of the Debtors' Plan, because Plaintiff received notice of the Bar Date but failed to file a proof of claim in violation of the Bar Date Order. Allowing the Action to continue would be a waste of the Court's time and resources because, under the terms of the Bar Date Order, the Plan, and the Confirmation Order, Plaintiff is forever barred from being able to obtain any recovery from Defendant's bankruptcy estate as a pre-petition creditor of Defendant in light of Plaintiff's failure to timely file a proof of claim against Defendant for his alleged damages. Moreover, to allow this action to continue would undermine the purpose of establishing a claims bar date in Chapter 11, which is to allow debtors and their parties in interest to provide finality with respect to the universe of claims. A copy of the Court's Judgment is available at https://bit.ly/31gUvn0 from Leagle.com. About FirstEnergy Solutions Akron, Ohio-based FirstEnergy Solutions, Corp. (FES) is a subsidiary of FirstEnergy Corp (NYSE:FE). FES -- http://www.firstenergycorp.com/-- provides energy-related products and services to retail and wholesale customers; and owns and operates 5,381 MWs of fossil generating capacity through its FirstEnergy Generation subsidiaries. FES also owns 4,048 MWs of nuclear generating capacity through its FirstEnergy Nuclear Generation subsidiary. Nuclear generating plants are operated by FirstEnergy Nuclear Operating Company (FENOC), which is a separate subsidiary of FirstEnergy Corp. On March 31, 2018, FirstEnergy Solutions and 6 affiliates, including FENOC, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 18-50757). The cases are pending before the Honorable Judge Alan M. Koschik and their cases be jointly administered under Case No. 18-50757. Parent company, First Energy Corp. and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process. First Energy Corp. listed $42.2 billion in total assets against $4.07 billion in total current liabilities, $21.1 billion in long-term debt and other long-term obligations and $13.1 billion in non-current liabilities as of Dec. 31, 2017. The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as bankruptcy counsel; Brouse McDowell LPA as co-counsel; Lazard Freres & Co. as investment banker; Alvarez & Marsal North America, LLC, as restructuring advisor and Charles Moore as chief restructuring officer; and Prime Clerk as claims and noticing agent. The Debtors also tapped Willkie Farr & Gallagher LLP, Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan, LLP as special counsel. The U.S. Trustee for Region 9 appointed an official committee of unsecured creditors on April 12, 2018. Milbank, Tweed, Hadley & McCloy LLP and Hahn Loeser & Parks LLP serve as counsel to the committee. FITZ LAW GROUP: Taps Travis & Warzala as Accountant --------------------------------------------------- The Fitz Law Group, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Jeffrey Travis of Travis & Warzala, Ltd. as its accountant. The professional services to be rendered by Travis include the preparation of monthly reports, bookkeeping, bank account reconciliation, handling of receipts and payment of expenses, and other miscellaneous record keeping and business consultation as Debtor requires, other than annual tax returns, which are not due until 2021. All services Travis performs will be billed at $2,975 monthly all inclusive, and $500 of that amount will be allocated to the Chapter 11 case (Case No. 20-3792) of Nicholas Fitz and the remainder to Fitz Law Group's business case. Annual tax returns will be handled as a separate matter at $295 per hour. Travis is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and represents no interest adverse to the Debtor's estate, according to court filings. The firm can be reached through: Jeffrey Travis, CPA Travis & Warzala, Ltd. 666 Dundee Road, Suite 703 Skokie, IL 60008 Phone: (847) 373-6988 Email: jeff@t-wltd.com About The Fitz Law Group The Fitz Law Group, LLC, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 20-07513) on March 16, 2020, listing under $1 million in both assets and liabilities. The case is jointly administered with Nicholas Fitz's Chapter 11 case (Bankr. N.D. Ill. Case No. 20-3792). Paul C. Sheils Attorney at Law serves as Fitz Law Group's legal counsel. FLOAT HORIZEN: Seeks to Hire Lefkovitz & Lefkovitz as Counsel ------------------------------------------------------------- Float Horizen, LLC seeks authority from the U.S. Bankruptcy Court for the Middle District of Tennessee to hire Lefkovitz & Lefkovitz, PLLC as its legal counsel. The firm will provide the following services: a. advise Debtor as to its rights, duties and powers; b. prepare and file statements and schedules, Chapter 11 plan and other documents; c. represent Debtor at hearings, meetings of creditors and other court proceedings; and d. perform other legal services in connection with Debtor's bankruptcy case. Lefkovitz & Lefkovitz will be paid at hourly rates as follows: Steven L. Lefkovitz $555 Associate Attorneys $350 Paralegals $125 Lefkovitz & Lefkovitz received a retainer in the amount of $16,717 from Debtor. Steven Lefkovitz, Esq., a partner at Lefkovitz & Lefkovitz, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Lefkovitz & Lefkovitz can be reached at: Steven L. Lefkovitz, Esq. Lefkovitz & Lefkovitz, PLLC 618 Church Street, Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 Email: slefkovitz@lefkovitz.com About Float Horizen, LLC Float Horizen, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case no. 20-04478) on Oct. 6, 2020. In the petition signed by Robin Ritter, chief manager. the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. FLORIDA HOMESITE: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Florida Homesite Developers, LLC, according to court dockets. About Florida Homesite Developers Florida Homesite Developers, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20890) on Oct. 5, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Mindy A. Mora oversees the case. Sue Lasky, PA serves as Debtor's legal counsel. FLORIDA TILT: Gets Interim Approval to Hire Sagre Law as Counsel ---------------------------------------------------------------- Florida Tilt, Inc. received interim approval from the U.S. Bankruptcy Court for Southern District of Florida to hire Sagre Law Firm, P.A. as its legal counsel. Florida Tilt requires Sagre Law to: a. give advice to the Debtor with respect to its powers and duties as a debtor in possession and the continued management of its business operations; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; c. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; d. protect the interest of the Debtor in negotiation with its creditors in the preparation of a plan; and e. represent the Debtor in connection with its creditors in the preparation of a plan. Ariel Sagre, Esq., the firm's attorney who will be handling the case, disclosed in court filings that he and his firm do not represent any interest adverse to Debtor and its bankruptcy estate. Sagre Law Firm can be reached through: Ariel Sagre, Esq. Sagre Law Firm, P.A. 5201 Blue Lagoon Drive, Suite 892 Miami, FL 33126 Tel: (305) 266-5999 Fax: (305) 265-6223 Email: law@sagrelawfirm.com About Florida Tilt, Inc. Florida Tilt, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20779) on Oct. 1, 2020, listing under $1 million in both assets and liabilities. Judge Robert A. Mark oversees the case. Ariel Sagre, Esq., at Sagre Law Firm, P.A. serves as the Debtor's legal counsel. FM COAL: Committee Hires Rumberger Kirk as Counsel -------------------------------------------------- The Official Committee of Unsecured Creditors of FM Coal, LLC, and its debtor-affiliates seeks authorization from the U.S. Bankruptcy Court for the Northern District of Alabama to retain Rumberger Kirk & Caldwell, P.C., as counsel to the Committee. The Committee requires Rumberger Kirk to: a. represent the Committee in all aspects in this bankruptcy case; b. undertake all actions as the Committee may direct as it relates to the investigation of the Debtor's affairs, acquisition of assets, financing and proposed sales as well as in any pending federal and state court actions or potential claims against the estate; and c. bring actions and assert such claims as the Committee deems appropriate in order to properly protect the interests of creditors. Rumberger Kirk will be paid at these hourly rates: R. Scott Williams $400 Robert H. Adams $400 Frederick D. Clarke $215 Paralegal Services $125 Rumberger Kirk will also be reimbursed for reasonable out-of-pocket expenses incurred. R. Scott Williams, partner of Rumberger Kirk & Caldwell, P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and (a) is not creditors, equity security holders or insiders of the Debtors; (b) has not been, within two years before the date of the filing of the Debtors' chapter 11 petition, directors, officers or employees of the Debtors; and (c) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. Rumberger Kirk can be reached at: R. Scott Williams, Esq. Rumberger Kirk & Caldwell, P.C. 2001 Park Place, Suite 1300 Birmingham, AL 35203 Tel: (205) 327-5550 Fax: (205) 326-6786 About FM Coal LLC FM Coal, LLC and its affiliates are engaged in the business of extracting, processing and marketing metallurgical coal and thermal coal from surface mines. Their customers include steel and coke producers, industrial customers and electric utilities. On Sept. 1, 2020, FM Coal and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case No. 20-02783). Judge Tamara O. Mitchell oversees the cases. At the time of the filing, Debtors had estimated assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. The Debtors have tapped Waller Lansden Dortch & Davis, LLP as their bankruptcy counsel, Aurora Management Partners as financial Advisor, and Donlin Recano & Company, Inc. as claims, solicitation and balloting agent. The U.S. Bankruptcy Administrator for the Northern District of Alabama appointed a committee to represent unsecured creditors in the Chapter 11 cases of FM Coal LLC and its affiliates. The Committee hires Rumberger Kirk & Caldwell, P.C., as counsel. FMTB BH: Did Not Default Under Sale Contracts, Court Says --------------------------------------------------------- FMTB BH LLC commenced the adversary proceeding captioned FMTB BH LLC, Plaintiff, v. 1988 MORRIS AVENUE LLC, 1974 MORRIS AVENUE LLC, 700 BECK STREET LLC, 1143 FOREST AVENUE LLC, 1821 TOPPING AVENUE LLC, Defendants, Adv. Pro. No. 18-1052-CEC (Bankr. E.D.N.Y.) seeking specific performance in connection with five contracts of sale to purchase five parcels of real property from Defendants 1988 Morris Ave LLC, 1974 Morris Ave LLC, 700 Beck St LLC, 1143 Forest Ave LLC, and 1821 Topping Ave LLC. The Defendants asserted counterclaims for breach of contract for failing to tender monthly payments as required under the contracts with 1988 Morris Ave LLC and 1821 Topping Ave LLC. Upon analysis, Chief Bankruptcy Judge Carla E. Craig held that the Plaintiff did not default under the contracts by failing to appear and tender performance on law day because the Defendants breached the contracts and were unable to transfer the properties in compliance with the contracts. Therefore, the Plaintiff may assume the contracts pursuant to 11 U.S.C. section 365 upon a showing that it can cure the nonpayment defaults or provide adequate assurance that such defaults will be cured promptly and that it can close under the contracts. On June 19, 2017, the Plaintiff entered into five separate contracts of sale, as follows: (1) to purchase 1988 Morris Avenue, Bronx, NY from Defendant 1988 Morris Ave LLC for $516,666.67 ("1988 Morris Ave. Contract"); (2) to purchase 1974 Morris Avenue, Bronx, NY from 1974 Morris Ave LLC for $516,666.67 ( "1974 Morris Ave. Contract"); (3) to purchase 700 Beck Street, Bronx, NY from 700 Beck Street LLC for $688,888.89 ("700 Beck St. Contract"); (4) to purchase 1143 Forest Avenue, Bronx, NY from 1143 Forest Ave LLC for $688,888.89 ("1143 Forest Ave. Contract"); and (5) to purchase 1821 Topping Avenue, Bronx, NY ("1821 Topping Ave.," and together with 1988 Morris Ave., 1974 Morris Ave., 700 Beck St., 1143 Forest Ave., the "Properties") from 1821 Topping Ave LLC for $688,888.89. The Plaintiff made the following down payments pursuant to the Contracts: (1) $25,833.33 under the 1988 Morris Ave. Contract; (2) $25,833.33 under the 1974 Morris Ave. Contract; (3) $34,444.44 under the 700 Beck St. Contract; (4) $34,444.44 under the 1143 Forest Ave. Contract; and (5) $34,444.44 under the 1821 Topping Ave. Contract. The Contracts did not contain a mortgage contingency. Each Contract provided that, in the event of a default by the Plaintiff, the remedy of each Defendant was limited to retaining the down payment made under that Contract. The Contracts do not contain a cross-default provision, and therefore, a default under one Contract is not default under the other Contracts. On August 22, 2017, the Defendants' former real estate counsel sent the Plaintiff's counsel a time of the essence letter for each Contract, scheduling closings for Sept. 14, 2017. Those closings did not occur, and on Oct. 27, 2017, the Defendants' counsel sent a second set of time of the essence letters, scheduling closings for Oct. 2, 2017. Those closings also did not occur. On Oct. 4, 2017, the Plaintiff and the Defendants executed an addendum to each Contract, which, among other things, authorized the down payments made under the Contracts to be released to the Defendants, provided for an additional deposit of $169,000 per Contract, and scheduled a third time of the essence closing date of Dec. 18, 2017. The addendum with respect to the 1988 Morris Ave. Contract (the "1988 Morris Addendum") required the Plaintiff to pay the monthly mortgage interest for the property in the amount of $2,957.50 from the date of the addendum through the closing on that property. The addendum for with respect to 1821 Topping Ave. Contract required the Plaintiff to pay the monthly mortgage interest for that property in the amount of $3,920 from the date of that addendum through the closing on that property. The addenda relating to the remaining Contracts did not require monthly payments. The Plaintiff did not make any of the monthly payments required by the 1988 Morris Addendum or the 1821 Topping Addendum. On Oct. 17, 2017, 1988 Morris Ave LLC, 1974 Morris Ave LLC, and the Plaintiff executed a license agreement authorizing the Plaintiff to access 1974 Morris Ave. and 1988 Morris Ave. to perform specified work at those properties. On October 19, 2017, the down payments were released to the Defendants in accordance with the Addenda, and the Plaintiff made the additional $169,000 deposit under each Contract. (JPTO ¶ 5(A)(8).) On Nov. 27, 2017, the Defendants' former real estate counsel informed the Plaintiff's representative, Joseph Riegler, that the Defendants retained new counsel. The Defendants' representative, Jackson Strong, provided Mr. Riegler with the new counsel's contact information on Dec. 3, 2017. On Dec. 6, 2017, the Defendants' new real estate counsel, Brian Hsu, Esq., sent five letters to the Plaintiff's counsel scheduling time of the essence closings for each Contract for Dec. 18, 2017 at 10 a.m. On Dec. 9, 2017, Mr. Riegler requested access to the properties from Mr. Strong. On the morning of Dec. 18, 2017, the Plaintiff's counsel emailed letters dated Dec. 15, 2017 to the Defendants' counsel rejecting the Dec. 18, 2017 closing. The Plaintiff did not appear at the closings. On April 23, 2018, the Plaintiff filed a voluntary chapter 11 petition and commenced this action for specific performance, or alternatively, for damages for breach of contract. On June 27, 2018, the Defendants filed a motion to dismiss the complaint, which was denied on August 2, 2018. On Sept. 7, 2018, the Defendants filed an answer and asserted counterclaims for breach of contract based upon the Plaintiff's failure to pay the monthly amounts owed pursuant to 1988 Morris Addendum and the 1821 Topping Addendum. Thereafter, on August 14, 2019, the Defendants filed a motion for summary judgment, which was denied on Jan. 13, 2020. A trial on the claims and counterclaims was held on June 10, 2020 and June 11, 2020. The Plaintiff sought specific performance under the Contracts, "including an abatement of the purchase prices to take into account the damages sustained by Plaintiff as a result of Defendants' breaches and monies paid to remedy property damage and other pre-closing payments demanded by Defendants." Alternatively, the Plaintiff sought damages sustained from the Defendants' breach of the Contracts, including (a) return of all deposits paid under the Contracts and the Addenda; (b) the amounts expended to improve each property, approximately $230,430; (3) mortgage payments made by the Plaintiff; and (4) attorneys' fees. The Plaintiff also sought use and occupancy of the properties equal to the rental revenue received by the Defendants since Dec. 18, 2017. The Defendants sought dismissal of the complaint. The Defendants argued that the Plaintiff has not shown it was ready, willing, and able to close on Dec. 18, 2017, and sought to retain the deposits made under the Contracts and the Addenda. Defendants 1988 Morris Ave LLC and 1821 Topping Ave LLC also sought judgment on their counterclaims for the unpaid monthly amounts under the 1988 Morris Addendum and the 1821 Topping Addendum. The Plaintiff argued that the Defendants breached each Contract, thereby excusing its appearance at the closings, by: (1) refusing to provide access to the Properties prior to closing; (2) failing to cure violations and other title issues against the Properties; (3) being unable to deliver 700 Beck St., 1821 Topping Ave., and 1143 Forest Ave. vacant of residential tenants; (4) making a material misrepresentation of an existing commercial tenant at 700 Beck St.; and (5) failing to repair the roof at 1988 Morris Ave. After full consideration of the facts presented, Judge Craig held that each of the Defendants breached their respective Contract and were unable to transfer the Properties in accordance with the Contracts. The Plaintiff did not default under the Contracts by failing to appear at the time of the essence closings on Dec. 18, 2017. However, Judge Craig added, the Plaintiff cannot obtain specific performance at this juncture requiring the Defendants to perform under the Contracts, nor can the Defendants seek damages from the Plaintiff's failure to pay the monthly payments required under the 1988 Morris Addendum or the 1821 Topping Addendum. The specific performance claim and the Defendants' counterclaim must be addressed in the context of the Plaintiff's bankruptcy case and the Bankruptcy Code. The Plaintiff has not assumed each Contract pursuant to 11 U.S.C. section 365, and therefore any judgment directing the Defendants to perform under those Contracts is premature. Although the Plaintiff's third claim in this adversary proceeding sought to assume the Contracts, the Plaintiff has not made any showing that it is entitled to assume the Contracts under section 365. A copy of the Court's Decision is available at https://bit.ly/3nEaLbv from Leagle.com. About FMTB BH LLC FMTB BH LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-42228) on April 23, 2018. In the petition signed by Martin Ehrenfeld, managing member, the Debtor disclosed $3.94 million in assets and $1.23 million in liabilities. FMTB BH LLC is under contract to purchase five separate real properties located at 1821 Topping Avenue, Bronx New York, which is owned by 1821 Topping Avenue LLC; 1974 Morris Avenue, Bronx, New York, which is owned by 1974 Morris Avenue LLC; 1988 Morris Avenue, Bronx, New York, which is owned by 1988 Morris Avenue LLC; 770 Beck Street, Bronx, New York, which is owned by 700 Beck Street LLC; and 1143 Forest Avenue, Bronx, New York, which is owned by 1143 Forest Avenue LLC. The five properties have a combined purchase price of $3.10 million. The Debtor's filing was precipitated by its need to close on the contracts of sale for the properties or risk losing its $845,000 deposit, in addition to paying back its creditors, which it cannot do without closing on the properties. Judge Carla E. Craig presides over the bankruptcy case. The Debtor tapped Robinson Brog Leinwand Greene Genovese & Gluck P.C. as its legal counsel. FRICTIONLESS WORLD: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------------- The Office of the U.S. Trustee on Nov. 4 appointed Tiya International as new member of the official committee of unsecured creditors in the Chapter 11 case of Frictionless World, LLC. Agtec Industries Pvt. Ltd., which was appointed on June 9, had been removed from the committee. As of Nov. 4, the committee is composed of the following members: 1. Ningbo NGP Industry Co., Ltd. c/o Jiangang "James" Ou, Esq. 11200 Westheimer Rd., Ste. 120 Houston, TX 77042 Tel: (832) 767-0339 Fax: (832) 767-0669 Email: jou@nguyen-chen.com 2. Intradin (HuZhou) Precision Technology Co., Ltd. Attn: Fu Dengke 118 Duhui Road Minhang District Shainghai China Tel: 0086-021-64908190 Fax: 0086-021-64903411 ext. 8861 Email: felix.fu@intradinchina.com 3. Tiya International Attn: Patrick Harte Snowdonia Business Park Porthmadod, UK Tel: 44 0 1766 771902 Email: patrick.harte@ccicm.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Frictionless World Frictionless World, LLC -- https://www.frictionlessworld.com/ -- provides professional grade outdoor power equipment, replacement parts for tractors, hitches and agricultural implements, gate and fence equipment, lithium ion powered tools, and ice fishing equipment. It offers brands such as Dirty Hand Tools, RanchEx, Redback, Trophy Strike and Vinsetta Tools. Frictionless World sought Chapter 11 protection (Banks. D. Col. Case No. 19-18459) on Sept. 30, 2019. The Hon. Michael E. Romero is the case judge. In the petition signed by CEO Daniel Banjo, the Debtor disclosed total assets of $14,600,503 and total liabilities of $17,364,542. The Debtor tapped Wadsworth Garber Warner Conrardy P.C. as bankruptcy counsel; Thomas P. Howard, LLC as special counsel; r2 Advisors, LLC as financial advisor; and Three Twenty-One Capital Partners, LLC as investment banker. The Office of the U.S. Trustee appointed creditors to serve on the official committee of unsecured creditors on Nov. 20, 2019. JW Infinity Consulting LLC, is the financial advisor to the Committee. Tom Connolly was appointed as Chapter 11 trustee effective as of October 1, 2020. The trustee is represented by Faegre Drinker Biddle & Reath, LLP. FTS INTERNATIONAL: Seeks to Hire Winston & Strawn as Legal Counsel ------------------------------------------------------------------ FTS International, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Winston & Strawn LLP as their legal counsel. The firm will provide the following services: a. advise the Debtors with respect to their powers and duties; b. advise and consult on the conduct of the Chapter 11 cases; c. attend meetings and negotiating with representatives of creditors and other parties in interest; d. take all necessary actions to protect and preserve the Debtors' estates; e. prepare pleadings in connection with the Chapter 11 cases; f. represent the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the court; i. advise the Debtors regarding tax matters; j. take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan; and k. perform all other necessary legal services for the Debtors. The hourly rates charged by Winston & Strawn professionals anticipated to be assigned to the chapter 11 cases are as follows: Daniel J. McGuire Partner $1,085 Charlie Haag Partner $1,025 John Sanders Partner $935 Carrie V. Hardman Partner $930 Mike Gaddis Partner $895 Grant Schmidt Associate $860 Michael Leary Associate $660 Michael Fechner Associate $610 Daniel J. McGuire, Esq., a partner at Winston & Strawn, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. McGuire also made the following disclosures in response to the request for additional information set forth in Paragraph D.1 of the U.S. Trustee Guidelines: a. Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? As stated above, Winston has provided the Debtors with a 15 percent discount since February 1, 2018, which includes work performed in connection with these chapter 11 cases, among others. The hourly rates Winston will bill for this engagement are comparable to the rates that Winston charges other comparable chapter 11 clients, and the rate structure provided by Winston is appropriate and is not significantly different from (a) the rates that Winston charges in other non-bankruptcy representations or (b) the rates of other comparably skilled professionals for similar engagements. b. Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? No. c. If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Pursuant to the Engagement Agreement, Winston represented the Debtors in preparation for these chapter 11 cases at the same billing rates as described in this Application. Winston has represented one or more of the Debtors in other capacities since February 1, 2018. Such rates were subject to the same periodic increases from 2018 to 2020 which, like many of its peer law firms, occurs twice a year in the form of: (i) step increases historically awarded in the ordinary course on the basis of advancing seniority and promotion and (ii) periodic increases within each attorney's and paraprofessional's current level of seniority. The step increases do not constitute "rate increases" (as the term is used in the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. Section 330 by Attorneys in Larger Chapter 11 Cases, effective November 1, 2013). d. Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Although the Debtors and Winston have not prepared a formal budget and staffing plan, Winston provided the Debtors with a good faith estimate of its fees in connection with these chapter 11 cases, which is reflected in the line item for "Restructuring Professional Fees" in the Debtors' interim budget. See Docket No. 108, Schedule 1. The firm can be reached through: Daniel J. McGuire, Esq. WINSTON & STRAWN LLP 2121 N Pearl Street, Suite 900 Dallas, TX 75201 Telephone: (214) 453-6500 Facsimile: (214) 453-6400 About FTS International Headquartered in Fort Worth, Texas, FTS International Inc. -- http://www.FTSI.com/-- is an independent hydraulic fracturing service company and one of the only vertically integrated service providers of its kind in North America. As of March 31, 2020, the Company had $616 million in total assets, $587 million in total liabilities, and $29 million in total stockholders' equity. On Sept. 22, 2020, FTS International and two affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34622) to seek confirmation of a prepackaged plan. Kirkland & Ellis LLP and Winston & Strawn LLP are acting as legal counsel, Lazard Freres & Co., LLC is acting as financial advisor, and Alvarez & Marsal LLP is acting as restructuring advisor to the Company in connection with the restructuring. Epiq is the claims and solicitation agent. FURNITURE FACTORY: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Furniture Factory Ultimate Holding, LP 6500 Jenny Lind Road Space A Fort Smith, AR 72908 Business Description: The Debtors are providers of fashionable and affordable home furniture in South Central and Midwest United States, and were founded in 1984 in Muldrow, Oklahoma around an original concept of providing quality furniture at highly competitive prices with the Company's "lowest price every day" guarantee, a differentiator from the competition. The Company offers products spanning every need for the home, including living room, dining room, and bedroom furniture, mattresses, home decor, and other accessories, and carries prominent furniture brands, including Serta, Jackson Catnapper, and United/Lane, as well as a range of products under its Natural elements brand. For more information, visit https://ffohome.com. Chapter 11 Petition Date: November 5, 2020 Court: United States Bankruptcy Court District of Delaware Eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Furniture Factory Ultimate Holding, LP 20-12816 Furniture Factory Holding, LLC 20-12817 Furniture Factory Intermediate Holding, LLC 20-12818 Furniture Factory Outlet, LLC 20-12819 Furniture Factory Outlet Transportation, Inc. 20-12820 Bedding Holding, LLC 20-12821 Bedding Intermediate Holding, LLC 20-12822 Bedding, LLC 20-12823 Judge: Hon. John T. Dorsey Debtors' General Bankruptcy Counsel: Domenic E. Pacitti, Esq. Michael W. Yurkewicz, Esq. Sally E. Veghte, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 North Market Street, Suite 1000 Wilmington, Delaware 19801 Tel: (302) 426-1189 Fax: (302) 426-9193 Email: dpacitti@klehr.com myurkewicz@klehr.com sveghte@klehr.com Debtors' Investment Banker: FOCALPOINT SECURITIES, LLC Debtors' Financial and Restructuring Advisor: RAS MANAGEMENT ADVISORS, LLC Debtors' Notice, Claims, and Balloting Agent: STRETTO https://cases.stretto.com/FurnitureFactoryOutlet/court-docket/ Estimated Assets (on a consolidated basis): $10 million to $50 million Estimated Liabilities (on a consolidated basis): $10 million to $50 million The petitions were signed by Donald V. Roach, chief financial officer and chief operating officer. A copy of Furniture Factory Ultimate Holding's petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JC7NS3Q/Furniture_Factory_Ultimate_Holding__debke-20-12816__0001.0.pdf?mcid=tGE4TAMA Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. The Springfield News Leader Trade Payable $1,831,961 P.O. Box 677568 Dallas, TX 75201 Tel: 417-836-1100 2. Homestretch Trade Payable $1,739,160 PO Box 379 Nettleton, MS 38858 3. Malouf Trade Payable $1,067,036 1525 West 2960 South Logan, UT 84321 4. Serta Mattress Company Trade Payable $1,009,281 PO Box 75578 Oklahoma City, OK 73147-0578 Tel: 800-517-7179 5. American Furniture/Peak Living Trade Payable $752,985 Dept #142 Charlotte, NC 28201 6. United Furniture Industries Trade Payable $919,792 P.O. Box 519 Verona, MS 38879 7. Carpenter Co Trade Payable $509,952 PO Box 75252 Charlotte, NC 28275 Tel: 405-634-8124 8. GBS Enterprises, LLC Trade Payable $323,645 9240 Prototype Drive Reno, NV 89501 9. Washington Furniture Sales Trade Payable $287,982 10878 Hwy 341 S Randolph, MS 38864 10. Albany Industries Trade Payable $264,067 504 N Glenfield Rd New Albany, MS 38652 11. Elements International Trade Payable $257,931 Group PO Box 890204 Charlotte, NC 28201 12. Steve Silver Co. Trade Payable $255,766 Forney, TX 75126 13. Austin Group Furniture LLC Trade Payable $215,829 441 North Chimney Rock Rd Greensboro, NC 27401 14. Standard Furniture Mfg. Trade Payable $167,291 Co. Inc. P.O. Box 933715 Atlanta, GA 30301 15. Crestview Trade Payable $164,009 4300 Concorde Road Memphis, TN 37501 Tel: 901-547-1198 16. Kith Furniture Trade Payable $151,225 PO Box 336 Haleyville, AL 35565 17. Crowe Chizek LLP Trade Payable $148,050 P.O. Box 71570 Chicago, IL 60290 Tel: 800-559-2216 18. Fields Investment Co. Landlord Claim Undetermined P.O. Box 603 Van Buren, AR 72956 Attn: Lisa Autry Tel: 479-629-0793 19. OP 1, LLC Landlord Claim Undetermined 1313 Riley Industrial Drive Moberly, MO 65270 Attn: Russ Free Tel: 660-269-3477 660-651-3570 Email: rfreed@orscheln.com 20. Gopher Orthopedics, LLC Landlord Claim Undetermined P.O. Box 16787 Jonesboro, AR 72401 Attn: John Perry and Bret Jameson Tel: 870-336-8000 870-926-0900 Email: bhjameson@yahoo.com 21. CV Owasso, LLC Landlord Claim Undetermined c/o Greg Harmon Mesquite, NV 89024 Attn: Greg Harmon Tel: 415-717-4140 915-645-7679 Email: gharmon@gte.net 22. Dixie Legacy Center, LLC Landlord Claim Undetermined 7939 Solution Center Chicago, IL 60677 Attn: Sarah Moberly Tel: 859-335-9663 Email: smoberly@bcwoodproperties.com 23. Brighton Landmark, LLC Landlord Claim Undetermined 870 Corporate Drive, Ste 402 Lexington, KY 40503 Attn: Gerald Mussari (Jerry) Tel: 513-200-1305 Email: mussari.jerry@gmail.com 24. Gregory Realty Marathon Landlord Claim Undetermined Management, LLC P.O. Box 382366 Germantown, TN 38183 Attn: Will Morgan Tel: 901-362-3386 901-568-6860 Email: willmorgan1121@gmail.com will@mymarathonproperty.com 25. Centennial Place Co. Landlord Claim Undetermined 5100 Poplar Ave, Ste 2607 Memphis, TN 38137 Attn: Kathy Hodgkins Tel: 901-685-2220 901-581-7799 Email: dowings@rmsco.net 26. G.M. Properties Landlord Claim Undetermined 2006 Avondale Street Wichita Falls, TX 76308 Attn: Gary Mehan 27. Oak Forest Group, Ltd Landlord Claim Undetermined P.O. Box 3448 Longview, TX 75606 Attn: Cappi Northcutt Tel: 903-235-7398 903-753-2191 Email: cnorthcutt@beerwellseasttexas.com 28. B&F Advertising, Inc. Landlord Claim Undetermined 5708 Warden Rd Sherwood, AR 72120 Attn: Hilda Mayfield or Steve Roberts Tel: 501-565-3561 Ext 333 850-819-6177 29. J.L.O. Enterprises, Inc. Landlord Claim Undetermined 7009 Windham Parkway Prospect, KY 40059 Attn: John Otter Tel: 502-693-3155 Email: jotter8426@aol.com 30. J Dee O Enterprises LLC Landlord Claim Undetermined 5803 River Creek Dr Prospect, KY 40059 Attn: John Otter Tel: 502-693-3155 Email: jotter8426@aol.com FURNITURE FACTORY: Sun Capital Owned Company Files for Chapter 11 ----------------------------------------------------------------- On November 5, 2020, Fort Smith, AR-based Furniture Factory Ultimate Holding, LP, a home furniture retailer operating in the south central and midwestern United States, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware along with several affiliates. Jonathan Randles of Wall Street Journal reports that the private-equity-owned Furniture Factory has filed for bankruptcy with a deal to sell the business to rival American Freight, subject to better offers. Furniture Factory Outlet said plans to turn around the retailer earlier this year were derailed by the coronavirus pandemic. The chain has permanently closed more than half of the 68 stores it had before the pandemic. Sun Capital Partners acquired Furniture Factory Outlet in 2016. About Furniture Factory Outlet Furniture Factory Outlet, LLC retails furniture and accessories products. The Company retails reclining and sectional sofas, chairs, tables, ottomans, recliners, bedroom sets, beds, dressers, mirrors, chests, dining sets, and accessories. Furniture Factory Outlet serves customers in the United States. Furniture Factory was founded in 1984 in Muldrow, Oklahoma around an original concept of providing quality furniture at highly competitive prices with the Company's"lowest price every day" guarantee, a differentiator from the competition. Furniture Factory Ultimate Holding, LP, including Furniture Factory Outlet, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12816) on Nov. 5, 2020. Furniture Factory was estimated to have $10 million to $50 million in assets and liabilities. The Hon. John T. Dorsey is the case judge. The Debtors tapped KLEHR HARRISON HARVEY BRANZBURG LLP as general counsel; FOCALPOINT SECURITIES, LLC as investment banker; and RAS MANAGEMENT ADVISORS, LLC, as restructuring advisor. STRETTO is the claims agent. GARDENS REGIONAL: 9th Cir. Flips Fee-for-Service Payments Ruling ---------------------------------------------------------------- In the case captioned GARDENS REGIONAL HOSPITAL MEDICAL CENTER LIQUIDATING TRUST, Appellant, v. STATE OF CALIFORNIA, AND ITS, DEPARTMENT OF HEALTH CARE SERVICES, Appellees, No. 18-60016 (9th Cir.), the United States Court of Appeals, Ninth Circuit affirmed the judgment of the Ninth Circuit Bankruptcy Appellate Panel insofar as it holds that California's deduction of unpaid Hospital Quality Assurance Fee (HQAF) assessments from the supplemental payments made to Gardens Regional was permissible under the doctrine of equitable recoupment, but reversed the BAP's judgment as to the fee-for-service payments. The Ninth Circuit remanded to the BAP with instructions to remand to the bankruptcy court for further proceedings. Under the Medicaid program, the federal government provides financial support to qualifying state plans that provide "medical assistance" and other services to defined classes of individuals "whose income and resources are insufficient to meet the costs of necessary medical services." California's approved Medicaid program, known as "Medi-Cal," is managed by Defendant Department of Health Care Services and provides benefits to covered individuals through two primary methods -- a "fee-for-service" system and a "managed care" system. Under the "fee-for-service" system -- which is the relevant payment method for purposes of this case -- a covered individual may receive treatment at a participating healthcare provider, and Medi-Cal then directly pays that provider a specified amount for each covered service provided to the individual. The amount paid for each service is determined "in one of two ways: (1) according to a specific contractual rate of payment negotiated between the hospital and an arm of the Department . . .; or (2) for California hospitals that have not negotiated contracts . . ., on the basis of costs, in accordance with various regulatory formulas." Gardens Regional has not negotiated its own schedule of contractual rates and is therefore considered a "noncontract" hospital. Given that Medicaid is a federal-state cost-sharing program, it is not surprising that federal law places limits on how States can raise their share of Medicaid funding. Prior to amendments enacted in 1991, some States engaged in a circular-funding practice in which they "would make payments to hospitals, collect the federal matching funds, and then recover a portion of the payments made to hospitals through the collection of a health care related tax imposed on the hospitals." Under such schemes, the States' lower net payments to hospitals were effectively inflated for purposes of calculating federal matching funds. Congress eliminated this practice by providing that "the amount of federal matching funds provided to a State should be reduced by the amount of any revenues received by the State through a health care related tax that was not broad-based [or] that contained a hold harmless provision." In order to qualify as a "broad-based health care related tax," a state exaction generally must be imposed uniformly on "all non-Federal, nonpublic providers in the State," and not just on Medicaid providers. A broad-based tax will be considered as having an impermissible "hold harmless" provision if, inter alia, the Medicaid payments to a provider "var[y] based only upon the amount of the total tax paid"; the provider receives a waiver or offset of a portion of the tax; or the provider receives payments that "positively correlate[]" to the amount of the tax. Invoking this federal-law exception for certain broad-based healthcare taxes, California in 2009 passed legislation that would lead to the imposition of a HQAF on non-public hospitals in the State. In its current form, the HQAF is imposed on most non-public, "general acute care hospital[s]" without regard to whether they participate in Medi-Cal. If a hospital does not pay its HQAF assessments, the statute allows the State to "immediately begin to deduct the unpaid assessment and interest from any Medi-Cal payments owed to the hospital, or . . . from any other state payments owed to the hospital." The legislatively declared purpose of the HQAF is "to increase federal financial participation in order to make supplemental Medi-Cal payments to hospitals, and to help pay for health care coverage for low-income children." Towards that end, the statute requires that HQAF proceeds be deposited into "segregated funds" that are to be used only for certain enumerated purposes. Id. § 14169.50(f)(2). Those purposes are: (1) supplemental payments to private hospitals based upon their overall provision of outpatient and inpatient services; (2) increased payments for Medi-Cal managed health care plans; (3) direct grants to public hospitals; (4) funding for health coverage for low-income children; and (5) administrative costs, id. Any supplemental payments made to private hospitals under the HQAF program are "in addition to any other amounts payable to hospitals with respect to those services." Gardens Regional was a private nonprofit hospital in Hawaiian Gardens, California, and since at least November 2014 it was a participating Medi-Cal provider. After Gardens Regional began experiencing significant financial difficulties, it stopped paying its HQAF assessments in March 2015, and it ultimately filed for Chapter 11 bankruptcy in June 2016. It ceased operations in February 2017. According to the State, Gardens Regional owed California $699,173 in missed HQAF payments at the time it filed for bankruptcy. Thereafter, the State fully recovered this prepetition debt by withholding a portion of its Medi-Cal payments to the hospital, which included both fee-for-service payments and "supplemental" payments under the HQAF program. As additional HQAF assessments accrued post-petition and were likewise not paid by Gardens Regional, the State continued to deduct a portion of the fee-for-service and supplemental payments to the hospital. All told, the State withheld a total of $4,306,426 from Gardens Regional, and it claims that Gardens Regional still owes $2,550,667 in HQAF debt. In May 2017, as debtor in possession, Gardens Regional filed a motion with the bankruptcy court attempting to compel the State to return the amounts it had withheld, so that those funds would then be available for the benefit of the bankruptcy estate and the hospital's other creditors. Gardens Regional argued that, in withholding the funds, California had violated the Bankruptcy Code's "automatic stay," which generally prohibits creditors from attempting to collect on their claims against the debtor after the filing of a bankruptcy petition. The automatic stay specifically prohibits, inter alia, the "setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor," and Gardens Regional argued that California's withholding of a portion of the payments due to the hospital constituted such an impermissible setoff. The State disagreed, contending that its actions were exempt from the automatic stay under the non-statutory equitable doctrine of "recoupment." The bankruptcy court denied Gardens Regional's motion, holding that California had the right to recoup the funds because there was enough of a "logical relationship" between both the fee-for-service payments and the supplemental payments, on the one hand, and the HQAF assessments, on the other. Gardens Regional appealed to the BAP, which affirmed the bankruptcy court. Gardens Regional appealed to the Ninth Circuit. In this case, California deducted the unpaid HQAF assessments from two separate payment streams: (1) the supplemental payments that the State pays to hospitals out of the fund created by HQAF assessments and (2) the fee-for-service payments that Gardens Regional earned by treating Medi-Cal patients. The bankruptcy court and the BAP found that the deductions from both payment streams qualified as permissible recoupment. The case requires the Ninth Circuit to address the extent to which a creditor can deduct the amounts that a bankrupt debtor owes to that creditor from other payments that the creditor owes to the debtor. The Bankruptcy Code imposes significant limitations on such deductions if they constitute a "setoff," but the courts have consistently recognized an exception to those limitations in the case of deductions that fall within the equitable doctrine of "recoupment." After Gardens Regional filed for bankruptcy, the State of California and its Department of Health Care Services deducted certain "fees" -- which Gardens Regional had failed to pay to the State -- from various payments that the State was obligated to make to Gardens Regional under its Medicaid program. Gardens Regional contended that the deductions were impermissible setoffs, and California argued that there were instead permissible recoupments. The bankruptcy court and the Ninth Circuit Bankruptcy Appellate Panel both agreed with California, but the Ninth Circuit concluded they relied on an overbroad conception of "recoupment." Because some of the deductions claimed by California constituted setoffs, and not recoupments, the Ninth Circuit affirmed in part and reversed in part. A copy of the Ninth Circuit Court's Opinion is available at https://bit.ly/3kcjEqC from Leagle.com. Andrew H. Sherman (argued) , Sills Cummis & Gross P.C., Newark, New Jersey; Samuel R. Maizel , and John A. Moe II , Dentons US LLP, Los Angeles, California; for Appellant. Kenneth K. Wang (argued) , Deputy Attorney General; Jennifer M. Kim , Supervising Deputy Attorney General; Julie Weng-Gutierrez , Senior Assistant Attorney General; Xavier Becerra , Attorney General; Office of the Attorney General; Los Angeles, California; for Appellee. About Gardens Regional Hospital Gardens Regional Hospital and Medical Center, Inc., formerly known as Tri-City Regional Medical Center, doing business as Gardens Regional Hospital and Medical Center, leases a 137- bed, acute care hospital doing business at 21530 South Pioneer Boulevard, Hawaiian Gardens, Los Angeles, California. Gardens Regional filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 16-17463) on June 6, 2016, estimating its assets between $1 million and $10 million, and liabilities between $10 million and $50 million. The petition was signed by Brian Walton, chairman of the Board. Judge Ernest M. Robles presided over the case. Samuel R Maizel, Esq., and John A Moe, Esq., at Dentons US LLP, served as the Debtor's bankruptcy counsel. The Office of the U.S. Trustee appointed an official committee of unsecured creditors in the Debtor's case. On June 22, 2018, the Debtor and the committee filed a joint Chapter 11 plan of liquidation and disclosure statement. GLOBAL ACQUISITIONS: Taps Anyama Law as Bankruptcy Counsel ---------------------------------------------------------- Global Acquisitions Holding Group, Inc. seeks approval from the U.S. District Court for the Central District of California to hire Anyama Law Firm, APC as its bankruptcy counsel. The firm will provide the following services: a. examine the claims of creditors in order to determine their validity; b. give advice and counsel to the Debtor in connection with legal issues; c. negotiate with creditors holding secured and unsecured claims; d. prepare and present a plan of reorganization and disclosure statement; e. object to claims as may be appropriate and, in general, acting as counsel on behalf of the Debtor in any and all bankruptcy law and related matters. The current hourly rates being charged by attorneys and paraprofessionals of the firm are as follows: Onyinye N. Anyama $400 Paralegals $150 Onyinye Anyama, Esq., a principal member at Anyama Law, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Onyinye N. Anyama, Esq. Anyama Law Firm, A Professional Corporation 18000 Studebaker Road Suite 325 Cerritos, CA 90703 Telephone: (562) 645-4500 Facsimile: (562) 645-4494 Email: info@anyamalaw.com About Global Acquisitions Holding Group, Inc. Global Acquisitions Holding Group, Inc. is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51)). The Company is the owner of fee simple title to certain property located at 15816 La Pena Avenue, La Mirada, CA 90638, having an appraised value of $700,000. Global Acquisitions Holding Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C. D. Cal. Case No. 20-18910) on Sept. 30, 2020. Global Acquisitions President Zeferino Luna, Jr. signed the petition. At the time of the filing, Debtor had total assets of $700,000 and total liabilities of $1,220,295. Judge Sheri Bluebond oversees the case. Anyama Law Firm, A Professional Corporation, is Debtor's legal counsel. GORHAM PAPER: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Gorham Paper and Tissue, LLC 20-12814 70 Casade Flats Gorham, NH 03581 White Mountain Tissue, LLC 20-12815 72 Cascade Flats Gorham, NH 03581 Business Description: Founded in 2011, Gorham Paper and Tissue LLC -- http://www.gorhampt.com-- operates a paper mill and manufactures customized tissues, towels and specialty packagings. Chapter 11 Petition Date: November 4, 2020 Court: United States Bankruptcy Court District of Delaware Judge: Hon. Karen B. Owens Debtors' General Bankruptcy Counsel: BERNSTEIN, SHUR, SAWYER & NELSON, P.A. Debtors' Local Bankruptcy Counsel: Christopher A. Ward, Esq. POLSINELLI PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 Tel: 302-252-0920 Email: cward@polsinelli.com Debtors' Investment Banker: B. RILEY SECURITIES Each Debtor's Estimated Assets: $1 million to $10 million Each Debtor's Estimated Liabilities: $50 million to $100 million The petitions were signed by Richard Arnold, chief executive officer. Copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EHVAPGY/Gorham_Paper_and_Tissue_LLC__debke-20-12814__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/FNJ5EMI/White_Mountain_Tissue_LLC__debke-20-12815__0001.0.pdf?mcid=tGE4TAMA Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Recycling Associates Inc. Trade Payable $1,025,170 1 Whipple St Nashua NH 03060 Mike Vellucci Tel: 978-479-0832 Email: mike@recyclingassociates.com 2. Gulf Island Pond Oxygenation Trade Payable $519,401 Project 75 State Street, Suite 2701 Boston MA 02109 Jessica Ramnarace Tel: 819-561-2722 ext. 6631 Email: jessica.ramnarace@brookfieldrenewable.com 3. Solenis LLC Trade Payable $458,603 PO Box 116232 Atlanta GA 30368 Michael Dutil Tel: 207-242-2593 Email: MPDUTIL@SOLENIS.COM 4. Town of Gorham Trade Payable $438,930 20 Park Street Gorham NH 03581-1694 Carol Porter Tel: 603-466-2744 Ext 7 Email: CPorter@GorhamNH.org 5. Brookfield Renewable Trading Trade Payable $429,983 & Marketing LP 41 Victoria Street Gatineau QC J8X 2A1 Canada Mark Scanlan Tel: 646 992 9302 Email: Mark.Scanlan@brookfieldrenewable.com 6. Resolute FP US Inc. Trade Payable $345,947 PO Box 8500 Philadelphia PA 19178 JF Royer Tel: 514-262-9854 Email: jf.royer@resolutefp.com 7. Voith Paper Fabric & Roll Trade Payable $313,578 Systems PO Box 1411 Wilson NC 27894 Bill Aurand Tel: 518 469 9351 Email: Bill.Aurand@Voith.com 8. AVRRDD- Mt. Carberry Trade Payable $247,464 Landfill PO Box 336 Berlin NH 03570 Sharon Gauthier Tel: 603-752-3342 Email: sgauthier@avrrdd.org 9. Select Products Holdings Trade Payable $242,516 1 Arnold Drive Huntington NY 11743 Jamie Roffers Tel: 570-785-2000 Email: jamie@selectph.com 10. Kruger Trade Payable $225,025 5820 Place Turcot Montreal QC H4C 1W3 Canada Paul de Blois Tel: 514-798-4492 Email: Paul.deBlois@kruger.com 11. Albany International Corp Trade Payable $203,090 PO Box 75158 Charlotte NC 28275-0158 Scott W. Graham Tel: 301-616-1003 Email: Scott.Graham@albint.com 12. Monson Paper, LLC Trade Payable $181,166 (Settlement) 121 Memorial Drive Springfield MA 01104 Eric Lombardi Tel: 413- 246-1681 Email: Elombardi@monsonpaper.com 13. City of Berlin Trade Payable $172,010 168 Main Street Berlin NH 03570-2494 Kris Davis Tel: 603-752-6350 Email: kdavis@berlinnh.gov 14. U.S. Department of Labor- Trade Payable $168,510 OSHA 53 Pleasant State-Rm. 3901 J.C. Cleveland Federal Bldg. Concord NH 03301 Rosemarie O. Cole Tel: 603 225-1629 Fax: 603 225-1580 Email: Cole.Rosemarie.O@dol.gov 15. Constellation Trade Payable $131,444 NewEnergy, Inc. 1310 Point St- 8th Floor Baltimore MD 2123 Clayton Picken Tel: 443-994-4033 Email: clayton.picken@constellation.com 16. Vets Securing America Trade Payable $124,874 1125 W. 190th Street Los Angeles CA 90248 Jerry Gregory Tel: 800-441-1808 Email: jerry@vetssecuringamerica.com 17. Woodland Pulp, LLC Trade Payable $123,944 144 Main Street Baileyville ME 04694 Andrew Then Email: Andrew.then@igic.com 18. Valmet Ltd/GL&V USA, Inc. Trade Payable $122,759 PO Box 743104 Atlanta GA 3037 Bob Blanchard Tel: 207-333-1008 Email: bob.blanchard@valmet.com 19. Blind Industries & Trade Payable $102,626 Services of Maryland 3345 Washington Blvd Baltimore MD 21227 Holly Beth Stanley Tel: 410 737-2623 Email: hstanley@BISM.org 20. Axchem USA, Inc. Trade Payable $79,624 PO Box 277832 Atlanta GA 30384 Alison Schott Tel: 336-632-0500 Email: aschott@axchemusa.com 21. IPFS Corporation Trade Payable $77,637 2777 Allen Pkwy Suite 550 Houston TX 77019 Tel: 877-687-9824 Fax: 832-308-7925 22. Anthem Blue Cross & Trade Payable $76,415 BlueShield NH PO Box 1168 Newark NJ 07101-1168 Denise King Email: denise.king@anthem.com 23. Bridge View Paper Co, LLC Trade Payable $62,221 6101 Tacony Street Philadelphia PA 19135 Steven Pollacks Tel: 215-992-8990 Ext.4404 Email: pollack@bridgeviewpaper.com 24. Western Express Inc Trade Payable $58,900 PO Box 935315 Atlanta GA 31193-5315 Candice Lavender Tel: 615-369-8230 Email: Clavender@westernexp.com 25. Portland Natural Gas Trade Payable $57,779 Transmission System 700 Louisiana Street- Suite 700 Houston TX 77002-2700 Rita Homan Tel: 832-320-5449 Email: rita_homan@tcenergy.com 26. Douglas Pipeline Company Trade Payable $55,451 901 Castle Shannon Blvd Pittsburgh PA 15234 Ryan Estabrook Tel: 412-531-2440 Email: restabrook@douglaspipeline.com 27. Berry Dunn Trade Payable $51,055 1000 Elm St- 4th Floor Manchester NH 03101 Mike Jurnak Tel: 603-518-2600 Fax: 603-666-4755 Email: mjunak@berrydunn.com 28. FIS Implanti S.R.L. Trade Payable $49,598 Via Leonardo Da Vinci No. 5 Cassiniade Pecchi 20060 Italy Fabio Malnati Tel: # 39 02 95 44 99 1 Fax: # 39 02 95 34 44 28 Email: commerciale@fisimpianti.it 29. Baker Newman & Noyes, LLC Trade Payable $48,675 280 Fore Street Portland ME 04101-4177 James Boissonneault Tel: 207-879-2100 Fax: 207-774-1793 Email: jboissonneault@bnncpa.com 30. Bancroft Contracting Trade Payable $40,280 Corporation 23 Phillips Road South Paris ME 04281 George Angevine Tel: 207-743-8946 Fax: 207-743-0636 Email: george@bancroftcontracting.com GORHAM PAPER: Zohar Company in Chapter 11 to Sell Assets -------------------------------------------------------- Gorham, New Hampshire-based Gorham Paper & Tissue LLC has filed for bankruptcy protection to clear the way for a planned sale after getting caught up in legal disputes between turnaround manager Lynn Tilton and the Zohar investment funds that control the company. GPT was established in 2011 when, Patriarch Partners, via the Zohar Funds, purchased the then-shuttered Gorham paper mill out of bankruptcy from FP Acquisitions LLC. In 2012, debtor affiliate White Mountain Tissue, LLC was formed as a joint venture between GPT (51%) and Red Shield Acquisitions, LLC ("RSA") (49%). The Zohar Funds foreclosed on certain assets of RSA in 2014, including RSA's 49% membership interest in WMT. As of the Petition Date, Zohar III, Limited, is the sole member and 100% owner of GPT. GPT is the only Class A Member of WMT, and GPT holds a 51% membership interest in WMT in its capacity as Class A Member. The remaining 49% membership interest in WMT is held by the Class B Members, which consist of Zohar I CDO 2003-1, Limited (29.273%); Zohar II 2005-1, Limited (15.714%); and Zohar III (55.013%). The Debtors retained Bradley Scher, the managing member of Ocean Ridge Capital Advisors, LLC, in July 2020, to replace Zohar III as the sole manager of each Debtor. Scher is not an insider of any owner or creditor of the Debtors. A The Debtors manufacture towel and tissue parent rolls for "at-home" and "away-from-home" (i.e., commercial or industrial) markets. The Debtors' site, which encompasses over 60 acres along the Androscoggin River in Gorham, Coos County, New Hampshire, also includes pipelines, warehousing space, multiple boilers, and a waste treatment center. Overall, the mill facility can support more than 150,000 tons of product per year. The Debtors experienced total net sales in FY2019 of $31,900,000 in the at-home market and $23,401,800 in the away-from-home market. Chapter 11 Filing Prior to the Petition Date, the Debtors explored a range of options to address their ongoing challenges related to maintaining sufficient cash flow to satisfy their debt and operational obligations. Ultimately, due to cash flow concerns and the monetization process established under the global settlement agreement entered into the Zohar Funds' chapter 11 cases, the Debtors, together with their advisors and, in particular, their investment banker, B. Riley Securities, expended significant efforts marketing the Debtors' assets in the months leading up to the Petition Date. This marketing process included significant mailings and calls to targeted, industry specific, potential buyers that the Debtors and their advisors believed might be interested in discussing a potential purchase of the assets. Following the Debtors' receipt of indications of interest from several potential buyers, the Debtors began to engage in advanced discussions regarding a potential sale transaction for some or all of the Debtors' assets with such parties, including through a sale under Sec. 363 of the Bankruptcy Code. The Debtors commenced these chapter 11 cases to maximize the value of their estates for the benefit of all parties in interest through a going-concern sale process. The Debtors intend to seek approval from this Court for a bid solicitation and auction process that will play out over the upcoming weeks, with a closing targeted for mid- to late-December 2020. About Gorham Paper Founded in 2011, Gorham Paper and Tissue LLC -- http://www.gorhampt.com-- operates a paper mill and manufactures customized tissues, towels and specialty packagings. Gorham Paper and Tissue, LLC, and affiliate White Mountain Tissue, LLC, sought Chapter 11 protection (Bankr. D.N.H. Case No. 20-12814 and 20-12815) on Nov. 4, 2020. GPT was estimated to have assets of $1 million to $10 million and liabilities of $50 million to $100 million. The Hon. Karen B. Owens is the case judge. BERNSTEIN, SHUR, SAWYER & NELSON, P.A. is the Debtors' general bankruptcy counsel. POLSINELLI PC is the local counsel. B. RILEY SECURITIES is the investment banker. About Zohar III Corp. Zohar III, Corp., and its affiliates are investment funds structured as collateralized loan obligations. The Zohar Funds are structured as collateralized loan obligations ("CLOs") and have issued notes and preference shares to investors and made loans to the Portfolio Companies using the proceeds. Lynn Tilton and her affiliates hold substantial equity stakes in these portfolio companies, which include iconic American manufacturing companies with tens of thousands of employees. Distressed-debt investor Lynn Tilton is the chief executive officer and sole principal of Patriarch Partners, LLC and its affiliated entities, a holding company managing 75 companies. Tilton has faced an avalanche of lawsuits, including allegations from the SEC that her Patriarch Partners improperly valued assets in its Zohar debt funds and extracted about $200 million in excess fees from investors. Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1, Limited, Zohar II 2005-1 Corp., Zohar III, Limited, and Zohar III, Corp. (collectively, the "Zohar Funds"), sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-10512 to 18-10517) on March 11, 2018. In the petition signed by Lynn Tilton, director, the Debtors were estimated to have $1 billion to $10 billion in assets and $500 million to $1 billion in liabilities. Young Conaway Stargatt & Taylor, LLP, is the Debtors' bankruptcy counsel. GRAN TIERRA: Posts $108 Million Net Loss in Third Quarter --------------------------------------------------------- Gran Tierra Energy Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net and comprehensive loss of $107.82 million on $53.14 million of oil sales for the three months ended Sept. 30, 2020, compared to a net and comprehensive loss of $28.83 million on $132.49 million of oil sales for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net and comprehensive loss of $730.09 million on $173.04 million of oil sales compared to a net and comprehensive income of $11.68 million on $443.05 million of oil sales for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $1.21 billion in total assets, $72.06 million in total current liabilities, $835.07 million in total long-term liabilities, and $304.29 million in total shareholders' equity. Gran Tierra stated, "The unprecedented decline in oil prices has materially reduced the Company's forecasted EBITDAX and the estimated value of its oil reserves. Based on current forecasted Brent pricing and production levels, which can change materially in very short time frames, the Company is forecasted to be in compliance with the amended financial covenants contained in the Company's Senior Secured Credit Facility (the "revolving credit facility") for at least the next year from the date of these financial statements. The amount available under the Company's senior secured credit facility is based on the lenders determination of the borrowing base. The borrowing base is determined, by the lenders, based on the Company's reserves and commodity prices. The next renewal of the borrowing base is scheduled for November 2020 and there is risk that the borrowing base may be reduced by the lenders. In addition, the Company's ability to borrow under the credit facility may be limited by the terms of the indentures for the 6.25% Senior Notes and 7.75% Senior Notes. "The risk of non-compliance with the covenants in the lending agreements and the risk associated with maintaining the borrowing base is heightened in the current period of volatility coupled with the unprecedented disruption caused by the COVID-19 pandemic. Management currently expects that the Company will continue to meet the terms of the credit facility or obtain further amendments or waivers if and when required. The Company also expects to be able to maintain the borrowing base at a level in excess of the amount borrowed. However, there can be no assurances that the Company's liquidity can be maintained at or above current levels during this period of volatility and global economic uncertainty. "The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Company is not known at this time. Estimates and judgments made by management in the preparation of the financial statements are increasingly difficult and subject to a higher degree of measurement uncertainty during this volatile period. In the near term, matters in these financial statements that are most subject to be impacted by this volatile period are the Company's assessment of liquidity and access to capital, the carrying value of long-lived assets and the valuation of the deferred tax assets. Key Financial Metrics for the Quarter: * Net loss was $108 million as compared to a net loss of $371 million in the prior quarter, primarily due to a non-cash ceiling test impairment of $105 million on the Company's oil and gas properties during the Quarter compared to a non-cash ceiling test impairment of $398 million in the Prior Quarter; these non-cash ceiling test impairments resulted from the significantly lower prescribed 12-month trailing average oil prices * Adjusted EBITDA was $22 million, compared with $18 million in the Prior Quarter * Funds flow from operations of $8 million ($0.02 per share, basic) increased by 35% compared with the Prior Quarter, as lower production was offset by a 30% increase in the Brent oil price, as well as a narrowing of differentials; capital expenditures totaled $7 million, an increase of 55% compared to the Prior Quarter, but down 83% from first quarter 2020 * Oil sales were $53 million, up 57% from $34 million in the Prior Quarter, as higher Brent prices offset lower production volumes * Operating netback increased 204% from the prior quarter to $17.87 per bbl, largely driven by the 30% increase in Brent oil price; this improvement was partially offset by an increase in royalties to $3.35 per bbl, up from the Prior Quarter's $1.63 per bbl, which was driven by higher oil prices * Operating expenses of $11.27 per bbl were up 20% from $9.40 per bbl in the Prior Quarter due to one-time costs associated with the reactivation of the Suroriente Block and most minor fields during the Quarter; the Quarter's operating expenses were still down 7% from first quarter 2020 despite a reduction in volumes * Workover expenses were $0.62 per bbl, down 13% from $0.71 per bbl in the Prior Quarter, due to lower workover activity, and down 87% from first quarter 2020 * Transportation expenses were $0.74 per bbl, down from $1.68 per bbl in the Prior Quarter due to no volumes being shipped through the OTA pipeline during the Quarter, and an adjustment relating to tariffs previously paid on the OTA pipeline Message to Shareholders Gary Guidry, president and chief executive officer of Gran Tierra, commented: "We are pleased with the progress that Gran Tierra has achieved with the safe restart of operations throughout our extensive Colombian portfolio. The safety of our staff, contractors and the local communities where we operate is always paramount. We commend our teams in Colombia, Canada and Ecuador for their excellent work during the many challenges of 2020 and their diligent management of COVID-19 safety protocols, which has allowed an earlier recommencement of development activities than originally forecast. "We also greatly appreciate the ongoing support that the Colombian government continues to provide the local oil industry, as evidenced by the ongoing payments of VAT and income tax refunds. These refunds have helped Gran Tierra to strengthen the Company's financial position and liquidity profile. "One of our key objectives is to finish 2020 strong to set up Gran Tierra for an exciting 2021. We believe we are well-positioned to withstand the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low cost structure and the safety of our people." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1273441/000127344120000034/gte-20200930.htm About Gran Tierra Headquartered in Calgary, Alberta, Canada, Gran Tierra Energy Inc. (www.grantierra.com), together with its subsidiaries, is an independent international energy company focused on oil and natural gas exploration and production. The Company is focused on its existing portfolio of assets in Colombia and Ecuador and will pursue new growth opportunities throughout Colombia and Latin America, leveraging its financial strength. The Company's common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. GREYSTONE SELECT: Fitch Withdraws BB- on Proposed $400MM Loan ------------------------------------------------------------- Fitch Ratings has withdrawn the expected 'BB-' rating on Greystone Select Financial LLC's (Greystone) proposed $400 million senior secured term loan because the debt issue is no longer expected to proceed in the near term. Greystone's Long-Term Issuer Default Rating (IDR) of 'BB-' was not affected by this withdrawal. Fitch has withdrawn the expected 'BB-' rating on Greystone's senior secured term loan as it is no longer expected to convert to a final rating. KEY RATING DRIVERS Key Rating Drivers do not apply as the rating has been withdrawn. GREYSTONE STAFFING: Summary Judgment Reversed in Green Key Row -------------------------------------------------------------- The plaintiff in the case captioned GREYSTONE STAFFING, INC., Appellant, v. GREEN KEY, LLC, ETC., ET AL., Respondents, 2017-05248, Index No. 4354/2012 (N.Y. App. Div.) took an appeal from an order of the Supreme Court, Nassau County entered April 10, 2017. The order granted separate motions of the defendants Green Key, LLC, Wendy Warner, and Jessa Niemeyer for summary judgment dismissing the amended complaint insofar as asserted against each of them; and awarded summary judgment dismissing the amended complaint insofar as asserted against the defendant Elaine Kawas. Upon review, the Appellate Division of the Supreme Court of New York reversed the judgment, holding that the moving defendants failed to meet their prima facie burdens. Summary judgment should have been denied as to each of them regardless of the sufficiency of the opposition papers. Greystone Staffing, Inc., was "engaged in the highly competitive business of recruiting and providing personnel on temporary and permanent bases to its Customers." Green Key, LLC, is an alleged competitor of Greystone. Defendants Wendy Warner, Jessa Niemeyer, and Elaine Kawas were employees of Greystone, each of whom signed an employment contract which included, inter alia, restrictive covenants that applied during and after their employment with Greystone, and which also included provisions characterizing as "Trade Secret[s]" and "Confidential Information" certain information regarding Greystone's customers, including knowledge of each customer's particular staffing needs. Greystone experienced financial difficulties, and filed for Chapter 11 bankruptcy in March 2009, and again in August 2010. It appears to be undisputed that Greystone is no longer in business, although the record is ambiguous as to when Greystone ceased operations. Information produced during disclosure reflects that Green Key began communicating with Warner in December 2010, and with Niemeyer in "early 2011," about each of them potentially becoming employed by Green Key. Documents produced by Green Key reflect that Warner sent emails to Green Key in September and October 2011, attaching documents and notes relating to her work at Greystone and her intention to begin employment at Green Key. Warner and Niemeyer each resigned from her employment with Greystone on Nov. 15, 2011, and each began working for Green Key on Nov. 21, 2011. Kawas was terminated from her employment with Greystone on Jan. 13, 2012, and she began working for Green Key on Jan. 24, 2012. Green Key represents that its first contact with Kawas regarding Kawas potentially becoming employed by Green Key was "[i]n or about January 2012." Greystone commenced four separate actions against Green Key, Warner, Niemeyer, and Kawas, which were subsequently consolidated. Greystone's amended complaint against Green Key asserts causes of action seeking to permanently enjoin Green Key from employing Kawas, Niemeyer, and Warner, and to enjoin Green Key from utilizing Greystone's confidential information, and alleging tortious interference with Greystone's business relationships with its customers, tortious interference with the employment contracts of Kawas, Niemeyer, and Warner, misappropriation of trade secrets, unjust enrichment, and unfair competition. Greystone's amended complaints against Warner, Niemeyer, and Kawas each asserted causes of action alleging breach of contract based upon "various breaches" of the individual defendants' respective employment contracts, breach of fiduciary duty, unfair competition, breach of duty of loyalty, misappropriation of confidential information, and unjust enrichment, and seeking various forms of injunctive relief, including enjoining the individual defendants from using and retaining Greystone's confidential information, doing business with Greystone's customers, working at Green Key, or enticing Greystone's employees to leave Greystone's employment. Green Key, Warner, and Niemeyer each separately moved for summary judgment dismissing the amended complaint insofar as asserted against each of them. In an order entered April 10, 2017, the Supreme Court, inter alia, granted each moving defendant's motion, and, upon searching the record, awarded summary judgment in favor of the nonmoving defendant, Kawas. Greystone appealed. The Appellate Court disagreed with the Supreme Court's determination that the moving defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the amended complaint insofar as asserted against each of them. The conclusory affidavits submitted by the moving defendants in support of their motions for summary judgment failed to eliminate triable issues of fact as to whether, inter alia, the moving defendants conspired among themselves to "usurp [Greystone's] corporate opportunities" and to "improperly use and disseminate [Greystone's] confidential information and trade secrets," as alleged by Greystone, and the moving defendants failed to articulate any cognizable legal argument which would entitle them to dismissal of Greystone's causes of action asserted against them. Because the moving defendants failed to meet their prima facie burdens, summary judgment should have been denied as to each of them regardless of the sufficiency of the opposition papers. Consequently, the court should not have searched the record and awarded summary judgment to Kawas. A copy of the Court's Decision and Order is available at https://bit.ly/3dDHs47 from Leagle.com. Based in Massapequa, N.Y., GreyStone Staffing, Inc., and three affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 09-71715) on March 16, 2009, listing under $50,000 in assets and $1 million to $10 million in estimated debts. The petition was signed by Phillip Missirlian, CEO of the company. Judge Robert E. Grossman presided over the case. Lawyers at McBreen & Kopko advised the Debtors. GreyStone Staffing again filed for Chapter 11 (Bankr. E.D.N.Y. Case No. 10-76213) on August 6, 2010, with scheduled assets of $2,817,370 and scheduled debts of $5,175,540. The petition was signed by CEO Missirlian. GRUBB & ELLIS: Newmark et al. May Not Produce Privileged Docs ------------------------------------------------------------- Plaintiffs in the case captioned NEWMARK GROUP, INC., G&E ACQUISITION COMPANY, LLC and BGC REAL ESTATE OF NEVADA, LLC Plaintiffs, v. AVISON YOUNG (CANADA) INC.; AVISON YOUNG (USA) INC.; AVISON YOUNG-NEVADA, LLC, MARK ROSE, THE NEVADA COMMERCIAL GROUP, JOHN PINJUV, and JOSEPH KUPIEC; DOES 1 through 5; and ROE BUSINESS ENTITIES 6 through 10, Defendants, Case No. 2:15-cv-00531-RFB-EJY (D. Nev.) filed a Motion for Protective Order seeking protection from having to produce privileged materials in this case; and an order prohibiting the disclosure or use of any Goodwin Procter attorney-client materials that were produced in the Illinois case. Upon analysis, Magistrate Judge ELayna J. Youchah granted the Plaintiffs' motion. This case is one of several filed by Plaintiffs around the country alleging a scheme by Defendants to steal people and supposed highly valuable assets of the Grubb & Ellis Company. Grubb & Ellis filed for Chapter 11 bankruptcy and that the law firm of Goodwin Procter represented BGC Partners Inc. when it acquired substantially all of Grubb & Ellis' assets from the bankruptcy estate. The Defendants argued that New York law does not recognize an attorney-client relationship that occurs between and among Goodwin, Cantor Fitzgerald & Company (CF&Co.), and BGC based solely on the fact that CF&Co. is a subsidiary of CFLP and because, as stated during oral argument by defense counsel, "New York courts would be inclined not to expand the attorney-client privilege to, in this case, apply to affiliates who are not wholly-owned subsidiaries of the same parent, who don't have what New York considers an identical nature of legal interest." The Defendants argued that, because CF&Co. was "an advisor on the [Grubb & Ellis] transaction to BGC" they did not share "a common legal interest" with BGC. Interestingly, while counsel at oral argument stated CF&Co. was an advisor to BGC on the Grubb & Ellis transaction, the Defendants' Supplemental Brief argues the opposite -- that is "CF&Co. was not an agent or adviser to BGC or Cantor Fitzgerald L.P." The Defendants stated that the "Plaintiffs have never once argued that CF&Co. was retained by Goodwin Procter or was necessary or indispensable to its provision of legal advice, let alone offered any competent evidence to that effect." Ultimately, the Defendants stated that BGC and CF&Co. do not operate as a single entity and because CF&Co. is wholly owned by CFLP, but BGC has public ownership, "the companies are not considered the same under all of the case law that addresses the attorney-client privilege within corporations and the corporate structure." In Opposition to the Plaintiffs' Motion for protective order, the Defendants argued judicial estoppel, waiver, and that the court in Illinois, where Plaintiffs filed a separate but substantially related action, "ruled correctly" that communications between Goodwin and BGC's affiliated entity, CF&Co., were not privileged. The Defendants also argued that if the Court grants Plaintiffs' Motion "it would place the case in limbo. On the Defendants' judicial estoppel argument, the Court stated there is no evidence, and Defendants' Opposition points to none, demonstrating Plaintiffs ever argued that documents they contended in the Illinois action, and continue to argue in this action, are protected by the attorney-client privilege should be disclosed to Defendants, used by Defendants for any purpose or, when required to be disclosed by the Illinois court, such privilege was voluntarily waived. The Court found that Plaintiffs' position in the Illinois case is not inconsistent with its position in the instant litigation. There is no evidence that Plaintiffs ever took the position during the Illinois proceedings that documents over which they claim an attorney-client privilege should be produced, used or otherwise available to Defendants pursuant to the protective orders entered in the Illinois action. In fact, what evidence there is, is to the contrary. The Court also held that, while Plaintiffs did take the general position that documents produced in the Illinois case should be useable in the Nevada action, the Plaintiffs' argument in favor of the change to the protective order that would allow such use did not touch on or in any manner implicate attorney-client privileged documents (or those documents over which a privilege is claimed, but denied by the Illinois court). Hence, Plaintiffs did not persuade the Illinois court to allow the cross-jurisdictional use of attorney-client privileged documents and, thus, they are not now taking a contrary position. Because the Plaintiffs are not asserting an inconsistent position, they cannot be said to derive an unfair advantage or an unfair detriment on the Defendants. Not one of the elements of judicial estoppel is met in this case. Judicial integrity is not implicated by allowing Plaintiffs' Motion to proceed. For these reasons, Plaintiffs are not judicially estopped from arguing their Motion for Protective Order before the Court. On the Defendants' waiver argument, the Court said there is no doubt that the disclosure of the Goodwin A-C Materials to Defendants was compelled by the Circuit Court of Cook County, Illinois on Oct. 2, 2019, in part as a sanction and in part because the court found there was insufficient evidence to conclude there was an attorney-client relationship between Goodwin and CF&Co. It is undisputed that the Illinois court entered this order over Plaintiffs' objection. Thus, whether the compelled production is not a waiver for all purposes (as suggested by the decision in Teachers Ins.) or is "not. . . deemed a waiver of privilege for purposes of other lawsuits" (as stated by the decision in Rattner), the end result is the same. Under New York law, the Plaintiffs' production of the Goodwin A-C Materials in the Illinois case did not waive the Plaintiffs' right to assert the attorney-client privilege over the same documents (or additional/different documents) before this Court. In sum, the Court held that the Plaintiffs have presented a sufficient argument and evidence in favor of the protective order they sought. The Court found no basis upon which to conclude that granting this request will upend the litigation pending in Nevada, as Defendants claim. The Court, therefore, granted the Plaintiffs' motion for protective order. No materials produced in the Illinois matter in compliance with the Illinois court's Oct. 2, 2019 order pertaining to documents over which the Plaintiffs claim an attorney-client privilege may be used at this time in the present litigation. No information or deposition testimony derived therefrom may be introduced or used in the present litigation at this time. A copy of the Court's Order is available at https://cutt.ly/qghm1vg from Leagle.com. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- was a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It was one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presided over the case. The Debtors engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor. Kurtzman Carson Consultants served as the claims and notice agent. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, were represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. On March 27, 2012, the Court approved the sale to BCG. An auction was cancelled after no rival bids were submitted. Pursuant to the term sheet signed by the parties, BGC would acquire the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC would also pay $16 million in cash because the sale was approved by the March 27 deadline. Otherwise, the cash component would have been $14 million. Approval of the sale was simplified when BGC settled with unsecured creditors by increasing their recovery. Grubb & Ellis Co. was renamed Newmark Grubb Knight Frank following the sale. Grubb & Ellis filed a liquidating Chapter 11 plan which gives unsecured creditors an expected recovery between 1.7% and 4.7%. The Court approved the explanatory disclosure materials in January 2013, and confirmed the Plan on March 6. The Plan was declared effective early in April 2013. GUARDION HEALTH: Stockholders Pass All Proposals at Annual Meeting ------------------------------------------------------------------ Guardion Health Sciences, Inc. held its annual meeting of stockholders on Oct. 29, 2020, at which the stockholders: (i) re-elected each of Robert N. Weingarten, Mark Goldstone, Donald Gagliano, M.D., David W. Evans, Ph.D., and Kelly Anderson as members of the Company's board of directors; (ii) ratified the appointment of Weinberg & Company, P.A. as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2020; (iii) approved an amendment to the Company's 2018 Equity Incentive Plan to increase the number of shares of common stock issuable thereunder to 10,000,000 from 3,000,000; and (iv) extended the previously granted discretionary authority to the board of directors to (A) amend the Company's certificate of incorporation to combine outstanding shares of the Company's common stock into a lesser number of outstanding shares, or a "reverse stock split," at a specific ratio within a range of no split and 1-for-30, with the exact ratio to be determined by the board of directors in its sole discretion and (B) effect a reverse stock split, if at all, within one year of the date of the Meeting. About Guardion Health Sciences Headquartered in San Diego, California, Guardion -- http://www.guardionhealth.com-- is a specialty health sciences company (i) that has developed medical foods and medical devices in the ocular health marketplace and (ii) that is developing condition-specific nutraceuticals that the Company believes will provide medicinal and health benefits to consumers. Guardion Health reported a net loss of $10.88 million for the year ended Dec. 31, 2019, compared to a net loss of $7.77 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $14.03 million in total assets, $1.34 million in total liabilities, and $12.69 million in total stockholders' equity. Weinberg & Company, P.A., in Los Angeles, California, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has experienced recurring losses and negative operating cash flows since inception. These matters raise substantial doubt about the Company's ability to continue as a going concern. GYPSUM RESOURCES: Hires Coulthard Law as Special Litigation Counsel ------------------------------------------------------------------- Gypsum Resources Materials, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Nevada to employ Coulthard Law PLLC, a professional limited liability company, to replace Hill, Farrer & Burrill LLP, as its special litigation counsel. On May 17, 2019, Debtor filed a complaint, initiating that certain litigation entitled Gypsum Resources, LLC v. Clark County etc. et al., bearing case number 2:19-cv00850, filed in the United States District Court for the District of Nevada. The District Court referred the Action to this Court and it is currently pending as Adversary Proceeding No. 19-01105-mkn. Coulthard Law as special litigation counsel will participate as counsel of record with previously approved counsel Pisanelli Bice PLLC in representing Debtor in the Action pending before this Court. Coulthard Law will provide counsel on Nevada-specific law, as well as in the areas mentioned above, i.e., government, regulatory, land use, inverse condemnation and pre-condemnation claims. This includes all aspects of discovery, pre-trial motion practice, trial, and post-trial services, if necessary. Coulthard Law will be paid a "discounted" hourly rate plus a discounted contingent fee. The rates are: William Coulthard $400 Associates $250 Paralegals $125 Clerks $100 Coulthard Law does not hold or represent any interest adverse to the Debtor, and is a "disinterested person," as defined by section 101(14) and modified by section 1107(b) and used in section 328(c) of the Bankruptcy Code, according to court filings. The firm can be reached through: William L. Coulthard, Esq. COULTHARD LAW, PLLC 3800 Howard Hughes Parkway, 17th Floor Las Vegas, NV 89169 About Gypsum Resources Materials Based in Las Vegas, Gypsum Resources Materials, LLC, a privately held company in the gypsum mining business, and its affiliate Gypsum Resources, LLC filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Lead Case No. 19-14799) on July 26, 2019. The petitions were signed by James M. Rhodes, president of Truckee Springs Holdings, LLC, manager of Gypsum Resources, LLC. At the time of the filing, Gypsum Resources Materials was estimated to have $10 million to $50 million in both assets and liabilities. Gypsum Resources, LLC was estimated to have $50 million to $100 million in both assets and liabilities. The Debtors tapped Fox Rothschild LLP as bankruptcy counsel; Hill Farrer & Burrill LLP as special counsel; and Conway MacKenzie, Inc. as financial advisor. The U.S. Trustee for Region 17 appointed creditors to serve on the official committee of unsecured creditors on Aug. 30, 2019. The committee is represented by Goldstein & McClintoc, LLLP. HAMPSTEAD GLOBAL: Reaches Settlement With Domain Seller ------------------------------------------------------- Andrew Allemann of Domain Name Wire reports that a bankruptcy court settlement sheds more light on the sale of Coins.com. Adam Perzow's firm Hamstead Global bought the domain name for $1.7 million on a payment plan. But Hampstead Global filed for bankruptcy after making the first $300,000 payment. Stack's-Bowers Numismatics, which sold the domain, got into a fight during the bankruptcy case, noting that Hampstead didn't actually "own" the domain; it was still in escrow until all payments were made. The parties ended up entering into a settlement agreement in July 2020, in which Hampstead agreed that it still owed $1.4 million on the domain. According to Perzow, Hamstead Global has now made additional payments on the domain beyond the original $300,000. About Hampstead Global Hampstead Global LLC, a privately held company in Tarrytown, N.Y., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-22721) on March 30, 2019. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Robert D. Drain oversees the case. Kirby Aisner & Curley, LLP is the Debtor's counsel. HENRY ANESTHESIA: Hires Huff Powell as Special Counsel ------------------------------------------------------ Henry Anesthesia Associates, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Huff Powell & Bailey, LLC, as special counsel to the Debtor. Henry Anesthesia requires Huff Powell to represent and assist the Debtor in the litigation styled Arletta Britt, as Executor of the Estate of David Lee Britt, Sr., and Arletta Britt, as Surviving Spouse of David Lee Britt, Sr. v. Sara N. Shakil, PA-AA, James M. Adkins, M.D., and Henry Anesthesia Associates, LLC, Case No. 18EV000478, State Court, Fulton County. Huff Powell will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Michael Frankson, partner of Huff Powell & Bailey, LLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Huff Powell can be reached at: Michael Frankson, Esq. Huff Powell & Bailey, LLC 999 Peachtree Street, NE, Suite 950 Atlanta, GA 30309 Tel: (404) 892-4022 About Henry Anesthesia Associates Henry Anesthesia Associates LLC is a Stockbridge, Ga.-based for-profit limited liability company which provides anesthesiology services. Henry Anesthesia Associates filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 20-68477) on July 28, 2020. It first sought bankruptcy protection (Bankr. N.D. Ga. Case No. 19-64159) on Sept. 6, 2019. In the petition signed by Kenneth Mims, M.D., manager, Debtor was estimated to have assets of $1 million to $10 million and liabilities of the same range. Judge Lisa Ritchey Craig presides over the case. Debtor has tapped Jones & Walden, LLC as its bankruptcy counsel and Moorman and Pieschel, LLC as its corporate counsel. HENRY FORD VILLAGE: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 on Nov. 3 appointed a committee to represent unsecured creditors in the Chapter 11 case of Henry Ford Village, Inc. The committee members are: 1. RehabCare Group East, LLC c/o Marjorie Daniels 7733 Forsyth Blvd., Ste. 1700 Clayton, MO 63105 Phone: 314-659-2106 Email: Marjorie.Daniels@rehabcare.com 2. David A. Plumley, Class Representative 18925 Van Rd. Livonia, MI 48152 Phone: 248-877-9209 Email: dplumley@principal-tcn.com 3. Robert L. Roemer, Successor Trustee of Patricia L. Henry Trust 610 N. York. Dearborn, MI 48128 Phone: 313-563-2175 Email: lbrimer@stroblpc.com 4. Allen C. Rawls for Rawls, John, & Winona 18853 Bretton Dr. Detroit, Mi 48223 Phone: 313-717-6017 Email: allenrawls@outlook.com 5. Kendra Faber, Trustee of Weiser Family Trust 35136 Morlock Ave. Livonia, MI 48152 Phone: 734-751-0165 Email: faberkendra@gmail.com 6. Kenneth J. Cornell, Co-Trustee Estate of Phyllis L. Cornell 26151 Summer Greens Dr. Bonita Springs, FL 34135 Phone: 734-417-0928 Email: cornellkj@gmail.com 7. Marjorie Swanson Trust c/o Angie Choukourian, Trustee Huntington Bank 555 S. Old Woodward, #600 Birmingham, MI 48009 Phone: 248-430-1262 Email: angie.choukourian@huntington.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Henry Ford Village Henry Ford Village, Inc. is a non-profit, non-stock corporation established to operate a continuing care retirement community located at 15101 Ford Road, Dearborn, Mich. It provides senior living services comprised of 853 independent living units, 96 assisted living unites and 89 skilled nursing beds. Henry Ford Village 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. The Debtor has tapped Dykema Gossett PLLC as its legal counsel and FTI Consulting, Inc., as its financial advisor. Kurzman Carson Consultants, LLC is the claims agent. HILLJE MUSIC CENTERS: Yamaha & BGE Object to Plan Disclosures ------------------------------------------------------------- Creditors Yamaha Corporation of America and BGE Financial object to the Disclosure Statement filed by debtor Hillje Music Centers, LLC. The Creditors claim that the Disclosure Statement does not include any reference to the claims of Yamaha. As such, they believe that the Disclosure Statement is inadequate. The Creditors state that how the claim of BGE Financial Corporation is described and listed, based upon testimony at the hearing on its Motion for Adequate Protection, is insufficient in that the amount of the secured claim is lowed than the claim, and the monthly payment proposed is less than the adequate protection ordered by the Court. The Creditors assert that if BGE's interest is unsecured, then the amount to be paid pursuant to the Disclosure Statement is inadequate, particularly in light of the fact that $20,000 per month is being paid to the two insiders, Scott Hillje and Lisa Hillje. The Creditors further assert that the Disclosure Statement sets out that the Plan is risky because the large part of Debtor's income is for new student instrument rentals, which Debtor admits it has not been able to commence due to the pandemic, and as such, the Plan is not feasible. The Creditors point out that the Disclosure Statement and the Plan upon which it is treated does too little to protect the security interests of Yamaha and BGE. A full-text copy of the Creditors' objection dated September 1, 2020, is available at https://tinyurl.com/y3sxrtkt from PacerMonitor.com at no charge. Attorneys for Yamaha and BGE: Rochelle A. Funderburg Meyer Capel, a Professional Corporation 306 W. Church Street P.O. Box 6750 Champaign, IL 61826-6750 Tel: (217)352-1800 Fax: (217)352-1083 E-mail: rfunderburg@meyercapel.com About Hillje Music Centers Hillje Music Centers, LLC -- https://hilljemusic.com/ -- owns and operates music supply stores located throughout the San Antonio area. It provides instrument rentals, service, and repairs. Its music stores also offer lessons for guitar, piano, drum, violin, trumpet, and saxophone. The company filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50074) on Jan. 6, 2020. In the petition signed by Scott M. Hillje, member, the Debtor was estimated to have between $1 million and $10 million in both assets and liabilities. Judge Ronald B. King is assigned to the case. Law Office of H. Anthony Hervol represents the Debtor. HOOK UP CELLULAR: Unsecureds Get $20,000 With 4% Interest in Plan ----------------------------------------------------------------- Hook Up Cellular, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona a Plan of Reorganization and a Disclosure Statement. The Debtor shall pay an amount of $20,000 to Class 4 unsecured creditors with valid and proven claims on a pro-rata basis within 12 months of the date of confirmation. Interest will accrue from the confirmation date of 4%. This Class is impaired by the Plan. The owners, Gerard J. Brown and Jason Brown, will retain full ownership of the Debtor under the Plan. The owners will contribute $5,000.00 each from personal funds to assist the Debtor in satisfying Plan payment requirements not generated by the Debtor. The owners are of the opinion that the contributions of $10,000 are an equivalent value of their interest in the Debtor. Any noncompliance with 11 U.S.C. Sec. 1129(b)(2)(B)(1), which provides that each holder of an unsecured claim in a class receive or retain on account of such claim property of a value, as of the effective date of the Plan, equal to the allowed amount of such claim, shall be resolved by the new money which is being contributed to the Debtor, satisfying the new value exception to the absolute priority rule of the Bankruptcy Code. A copy of the Disclosure Statement dated September 8, 2020, is available at https://tinyurl.com/y2oe6k5y from PacerMonitor.com at no charge. The Debtor is represented by: CARMICHAEL & POWELL, P.C. Donald W. Powell 6225 North 24th Street, #125 Phoenix, Arizona 85016 About Hook Up Cellular Hook Up Cellular, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 19-12995) on Oct. 10, 2019. At the time of the filing, the Debtor had estimated assets of between $50,001 and $100,000 and liabilities of between $100,001 and $500,000. The case is assigned to Judge Daniel P. Collins. The Debtor tapped Donald W. Powell, Esq., at Carmichael & Powell, P.C., as its legal counsel. HOPSTER'S LLC: Boston Brewery in Chapter 11 Bankruptcy ------------------------------------------------------ Marc Hurwitz of Boston Restaurant Talk reports that a local brewery, Hopsters, with two locations in the Boston area has declared bankruptcy. According to a source, Hopsters has filed for Chapter 11 Bankruptcy, with a post within the Newton-Needham Regional Chamber website saying that founder/owner Lee Cooper is looking to reorganize and reinvent the business in able to survive. In the post, Cooper says that "We have a new menu and new leadership and we are trying our damnedest to get people in. Alas, our Newton sales are abysmal, with an older population or younger families, people are too afraid to dine out in Newton, unemployment also doesn't help." His hope is that he will be allowed to hold off from paying vendors until the pandemic lessens, explaining that "It's a novel attempt, however not without precedent....It may be an option for similar independent restaurants to follow if they want to keep their business alive." Hopsters has locations in Newton Corner and Boston's Fort Point neighborhood, with its website being found at https://www.hopstersbrew.com/ About Hopster's LLC Hopster's LLC, a Wayland, Mass.-based brew pub and brewery, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 20-11823) on Sept. 3, 2020. At the time of the filing, the Debtor had estimated assets and liabilities of less than $50,000. Judge Janet E. Bostwick oversees the case. The Debtor tapped Alex R. Hess Law Group as legal counsel and Burke & Raphael, LLC as certified public accountants. HORSEPOWER UNLIMITED: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------------- The Office of the U.S. Trustee on Nov. 3 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Horsepower Unlimited, Inc. About Horsepower Unlimited Inc. Horsepower Unlimited, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 20-50143) on Sept. 15, 2020. At the time of the filing, the Debtor had estimated assets of between $500,001 and $1 million and liabilities of between $100,001 and $500,000. Judge B. Mckay Mignault oversees the case. Caldwell & Riffee, PLLC serves as the Debtor's legal counsel. HOUSTON GRANITE: Unsecured Creditors to be Paid in Full in 5 Years ------------------------------------------------------------------ Houston Granite and Marble Center LLC filed with the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, a Plan of Reorganization and a Disclosure Statement. The Plan will be implemented by the Reorganized Debtor primarily from the Net Sales Revenues generated from post-confirmation sales of inventory in the Reorganized Debtor's ongoing business operations and loans proceeds funded post-confirmation from the SBA Guaranteed Loan upon substantial consummation of the Plan, and potentially from claims asserted in the Lloyd's Insurance Claims. Upon the Vesting Date, the Litigation Claims, including the Lloyd's Insurance Litigation, will vest in the Reorganized Debtor who intends to continue prosecution against all defendants. While the Debtor believes the value of the claims asserted in the Lloyd's Insurance Claims have value, no value has been attributable to such claims in its Schedules due to the inherent risks involved in any litigation. All recoveries on the claims in the Lloyd's Insurance Litigation, after payment of legal fees and expenses, will be distributed first to holders of Class 2 until paid in full and then to holders of other allowed claims on pro rata basis pursuant to the priority and classification of their claims. Under the Plan, Administrative Expense Claimants and Priority Tax Claimants will be paid in full on the earlier date of funding of the SBA Loan Proceeds from the SBA Guaranteed Loan or pro rata in three equal monthly installments commencing on 30 days and 120 days, respectively, after the Effective Date. The Debtor believes that the projected Net Sales Revenues and the SBA Loan Proceeds will fund the Plan to satisfy the holders of Allowed Administrative Claims, Priority Tax Claims, the Secured Claims, and the holders of Allowed Unsecured Claims in full plus accrued interest since the Petition Date. The Internal Revenue Service has filed proof of claims No. 2 in the amount of $24,173.93 for unpaid taxes and penalties. Its claim will be paid in full plus statutory interest within 5 years of the Petition Date, with the first monthly payment being due and payable 210 days after the Effective of the Plan. The payment will be approximately $544.18. Factoring Lenders hold contracts in the aggregate scheduled amount of $151,000.00 for funds advanced by them purportedly to purchase specific pre-petition accounts receivable of the Debtor. No claims have been filed by claimants in Class 7. These claimants will be paid their scheduled amounts in full plus interest at the rate of .15% on a pro rata basis within 5 years of the Petition Date, with the first monthly payment being due and payable 210 days after the Effective of the Plan. The payments will be approximately $2563.03. Vendors will be paid the scheduled amounts of their claims in full plus interest at the legal rate on a pro rata basis within 5 years of the Effective Date. These claimants will be paid the scheduled amounts of their claims in full plus interest at the rate of .15% on a pro rata basis within 5 years of the Effective Date, with the first monthly payment commencing 210 days after the Effective of the Plan. The payment will be approximately $4,193.02. John Sykoudis, who is the sole equity interest holder in the Debtor, will retain his equity interest in the Debtor post-confirmation. He will not receive distributions through the Plan on account of his equity interest. Payments and distributions under the Plan will be funded primarily through future revenues from the operations of the business and loans proceeds from the SBA Guaranteed Loan, and potentially from recoveries on claims asserted in the Lloyd’s Insurance Litigation. A full-text copy of the Disclosure Statement dated August 20, 2020, is available at https://tinyurl.com/yyp56z7z from PacerMonitor at no charge. About Houston Granite Houston Granite and Marble Center LLC is a supplier of granite, marble and other natural stone products. The company first filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 16-31994) on April 16, 2016. The Company again sought Chapter 11 protection (Bankr. S.D. Texas Case No. 19-35315) on Sept. 24, 2019. 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. IBIO INC: Appoints Randy Maddux as Chief Operating Officer ---------------------------------------------------------- iBio, Inc. has appointed Randy J. Maddux as its chief operating officer, effective Dec. 1, 2020. Mr. Maddux has more than 20 years of global biologics drug development and manufacturing, business development and relationship management experience. He was most recently SVP and chief manufacturing officer at Aptevo Therapeutics, where he led the company's quality; process development; analytical development and formulation; engineering and facilities; and supply chain functions. Mr. Maddux was previously VP and Site Director at GlaxoSmithKline, where he led the largest biopharmaceutical development and manufacturing site within the GSK manufacturing network and was instrumental in launching a successful contract development and manufacturing services business. Prior to GSK, he was VP Quality and Operations at Human Genome Sciences and held positions of increasing responsibility within Biogen's Quality organization. During his career, Mr. Maddux has served in key roles supporting the licensure and launch of several products including Avonex (interferon beta-1a), Tysabri (natalizumab), Benlysta (belimumab) and Raxibacumab (Abthrax). He holds an MBA in Operations and Statistics from Duke University, Fuqua School of Business and a BS Professional in Chemistry from East Carolina University "We are delighted to welcome Mr. Maddux as COO," said Tom Isett, Chairman & CEO of iBio. "In addition to his broad operational experience that ranges from site start-ups, to large facilities and manufacturing services, Mr. Maddux brings deep technical expertise and a strategic approach to biologics drug development. His insights and experience should be invaluable as iBio continues to grow its pipeline of proprietary biopharmaceuticals and expand its CDMO services business." Mr. Maddux commented, "I am very much looking forward to bringing my expertise and experience to the team, and helping iBio deploy its unique plant-based manufacturing technologies as a fast, scalable way to advance biologics drug development." Mr. Maddux is entitled to an annual base salary of $390,000, which will accrue starting on the Effective Date. He is also eligible to receive a signing bonus of $160,000 upon the Effective Date, which bonus will be paid within 30 days of the Effective Date. Mr. Maddux is obligated to return the signing bonus to the Company if he resigns without good reason (as defined in the Maddux Employment Agreement) within twelve months of the Effective Date. Mr. Maddux is eligible for a target bonus of 40% of the base salary paid to him during the prior fiscal year based upon the Compensation Committee's assessment of his performance and the performance of the Company during the prior fiscal year. About iBio Inc. iBio, Inc. -- http://www.ibioinc.com/-- is a full-service plant-based expression biologics CDMO equipped to deliver pre-clinical development through regulatory approval, commercial product launch and on-going commercial phase requirements. iBio's FastPharming expression system, iBio's proprietary approach to plant-made pharmaceutical (PMP) production, can produce a range of recombinant products including monoclonal antibodies, antigens forsubunit vaccine design, lysosomal enzymes, virus-like particles (VLP), blood factors and cytokines, scaffolds, maturogens and materials for 3D bio-printing and bio-fabrication, biopharmaceutical intermediates and others, as well as create and produce proprietary derivatives of pre-existing products with improved properties. iBio reported a net loss attributable to the Company of $16.44 million for the year ended June 30, 2020, compared to a net loss attributable to the company of $17.59 million. As of June 30, 2020, the Company had $94.19 million in total assets, $37.58 million in total liabilities, and $56.61 million in total equity. ICON CONSTRUCTION: United Excel Must Defend Suit ------------------------------------------------ District Judge Michael J. McShane denied United Excel Corporation's motion to dismiss the case captioned UNITED STATES OF AMERICA for the Use and Benefit of ICON CONSTRUCTION, INC., a Texas Corporation, Plaintiff, v. UNITED EXCEL CORPORATION and ARCH INSURANCE COMPANY, Defendants, Case No. CIV-19-204-F (W.D. Okla.). The Defendant moved the court to dismiss the plaintiff's complaint with prejudice, alleging the plaintiff's failure to comply with the court's order requiring arbitration of the parties' dispute. Icon Construction, Inc., commenced the action on March 1, 2019, seeking payment from United Excel Corporation, as principal, and Arch Insurance Company, as surety, under a payment bond issued in relation to a federal construction project on Vance Air Force Base in Enid, Oklahoma. The action was filed pursuant to the Miller Act, 42 U.S.C. Sec. 3131, et seq. In response, United Excel moved the court for an order to stay the lawsuit and compel the parties to submit their dispute to binding arbitration. The Defendant also sought an award of attorney's fees. The Plaintiff did not file any opposition to the defendant's motion. On April 24, 2019, the court granted the defendant's motion to the extent that the court ordered the parties' dispute to arbitration and stayed the action pending completion of the arbitration. For statistical purposes, the court directed the court clerk to administratively close the action in her records pending completion of the arbitration proceeding. Also, the court directed the parties to notify the court within 30 days of resolution of the arbitration proceeding so that the court may take such further action as a may be necessary. The Defendant filed a motion to dismiss. According to the defendant, it commenced arbitration with the American Arbitration Association on April 30, 2019, and due to the plaintiff's failure and refusal to participate in the arbitration, despite multiple opportunities to do so, the AAA discontinued further administration of the arbitration on May 12, 2020. The Defendant also pointed out it paid $6,200 in arbitration fees, which cannot be refunded, and that it has been forced to defend multiple lawsuits in multiple venues because of the plaintiff's failure and refusal to arbitrate pursuant to the parties' contract. Federal Rule of Civil Procedure 41(b) authorizes the involuntary dismissal of a civil action "[i]f the plaintiff fails to prosecute or to comply with [the Federal Rules of Civil Procedure] or a court order." Before involuntarily dismissing a civil action with prejudice, the court must evaluate the following factors: (1) "the degree of actual prejudice to the [other party];" (2) "the amount of interference with the judicial process;" (3) "the culpability of the litigant;" (4) "whether the court warned the party in advance that dismissal of the action would be a likely sanction for noncompliance;" and (5) "the efficacy of lesser sanctions." Upon evaluation of the relevant factors, Judge McShane found that, at this time, involuntary dismissal with prejudice is not appropriate. The record does not reflect actual prejudice to the defendant for the plaintiff's failure to arbitrate the dispute as ordered by this court. Although the defendant paid $6,200 to initiate the arbitration proceedings, there is no indication in the record as to why the defendant initiated those proceedings instead of the plaintiff. The court recognized that the plaintiff had previously initiated an arbitration proceeding in August 2018 against the defendant upon order of the state court, which was later closed without resolution. However, there is no showing that the defendant requested the plaintiff to initiate the arbitration proceeding ordered by this court and it refused. There is no showing by the defendant that the plaintiff's failure to arbitrate has resulted in any lost evidence or witnesses for the defendant or has resulted in any inability of the defendant to defend itself from the plaintiff's claims in this action. In addition, Judge McShane found no real interference with the judicial process of this case. This case has been administratively closed since the court's order. The order was entered early in the proceedings and the plaintiff did not oppose the defendant's motion. As to culpability factor, the court is not satisfied that the plaintiff's failure to arbitrate as ordered by this court was caused by any wrongful conduct of the plaintiff. The record reflects that plaintiff assigned its claims to Insight and that assignment was approved by the bankruptcy court shortly after the defendant filed its motion to compel arbitration. The Defendant was aware of the plaintiff's assignment of claims to Insight and the bankruptcy court's approval of that assignment. Those claims have recently been reassigned to the plaintiff since it appears that Insight declined to pursue those claims and the defendant now sought to dismiss them. Further, the court did not warn the plaintiff in advance of the defendant's motion that dismissal of the action with prejudice could be a likely sanction for noncompliance with the court's order. Accordingly, Judge McShane denied the Defendant's motion without prejudice to re-filing. Judge McShane also ordered the parties to submit their dispute to arbitration as required under Section 25 of the Contract for Labor and Material dated April 3, 2017. A copy of the Court's Order is available at https://bit.ly/2H31SI2 from Leagle.com. About Icon Construction Icon Construction -- http://icon-construction.com/ -- is a small business general contractor specializing in design/build of permanent modular and temporary modular buildings. Since April 1, 1998, Icon Construction has been able to meet the space needs of major markets, including military,education, administration facilities, health care, government, commercial and residential manufacturing. Icon Construction, Inc., based in McKinney, Texas, sought Chapter 11 protection (Bankr. E.D. Tex. Case No. 19-40279) on Feb. 1, 2019. In the petition signed by Mansour Khayal, president, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Brenda T. Rhoades oversees the case. Joyce W. Lindauer Attorney, PLLC, serves as bankruptcy counsel to the Debtor. Glast Phillips & Murray, P.C., is the special counsel. IMPRESA HOLDINGS: Taps Holthouse Carlin as Consultant ----------------------------------------------------- Impresa Holdings Acquisition Corporation and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Holthouse Carlin & Van Trigt LLP as their consultant. The firm will render the following transaction advisory consulting services: (a) provide quality of earnings reports associated with any transaction; (b) analyze the Debtors' quality of assets; (c) analyze the Debtors' contingent liabilities; (d) analyze the Debtors' equity accounts, equity ownership, vesting provisions, puts, calls, and the impact of any transaction; and (e) provide Debtor projections during the Chapter 11 cases and beyond. The Debtors may require Holthouse Carlin to perform additional services not contemplated in the initial fee but which are associated with the services. These may include: (a) respond to inquiries made by third parties regarding the services; (b) update quality of earnings reports for subsequent periods; (c) assist with any working capital adjustments; and (d) provide comments on transaction documents in connection with any transaction. The firm's hourly rates are as follows: Partners and Principals $350 - $680 Senior Managers $280 - $440 Managers $240 - $350 Senior/Supervising Senior $180 - $240 Staff/Advanced Associate $105 - $235 The firm received an initial fee of $25,000 as an advance fee for the services and expenses to be incurred in connection with its representation of the Debtors. Mike Thielman, Esq., a partner at Holthouse Carlin, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Mike Thielman, Esq. Holthouse Carlin & Van Trigt LLP 18565 Jamboree Road, 4th Floor Irvine, CA 92612 Telephone: (714) 361-7666 Email: MikeT@hcvt.com About Impresa Holdings Impresa Holdings designs, manufactures, and supplies precision sheet metal parts, CNC-machined components, and assemblies for commercial jets, regional and business aircraft, military aircraft, and civil and military helicopters. The company's services include sheet metal fabrication, hydroform pressing and brake. Impresa began operating in 1973 as Venture Aircraft and expanded through a 2012 acquisition of Swift-Cor Aerospace. It then changed its name Impresa Aerospace. Operating from a production facility in Gardena, Calif., Impresa provides machined parts, fabricated components, assembled parts and tooling for the aerospace and defense industries. In addition to Boeing, the debtor's customers include Spirit AeroSystems, Raytheon, Northrop Grumman, Cessna, Lockheed Martin and Gulfstream. It has provided parts and components for Boeing's major airframes, including the 787, 777 and 747 as well as the Airbus A380 and Gulfstream's G550 and G650 planes. On Sept. 24, 2020, Impresa Holdings Acquisition Corp. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12399). At the time of the filing, Impresa Holdings had estimated assets of less than $50,000 and liabilities of between $10 million and $50 million. Morris Nichols Arsht & Tunnell, LLP and Duff & Phelps Securities, LLC serve as Debtors' legal counsel and investment banker, respectively. Stretto is the claims agent. INSPIRED CONCEPTS: Seeks to Hire Andrews Hooper as Tax Accountant ----------------------------------------------------------------- Inspired Concepts, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire Andrews Hooper Pavlik PLC as its tax accountant. The firm will provide the following tax accounting services: a. review the Debtor's financial statements; b. prepare federal income tax returns; and c. provide the Debtor with accounting assistance for financial statement preparation and depreciation calculations. The firm will charge the Debtor a flat fee of $12,630, plus expenses. Jeffrey J. Fineis, CPA, a partner at Andrews Hooper, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey J. Fineis, CPA Andrews Hooper Pavlik PLC 4295 Okemos Road, Suite 200 Okemos, MI 48864 Telephone: (517) 706-0800 Facsimile: (517) 706-0011 About Inspired Concepts Inspired Concepts LLC, a privately held investment and restaurant management company in Mt. Pleasant, Mich., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 20-20034) on Jan. 10, 2020. At the time of the filing, the Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Daniel S. Oppermanbaycity oversees the case. Jeffrey Grasl, Esq., at Grasl, PLC, was originally the Debtor's legal counsel. The Debtor later hired Wernette Heilman PLLC as substitute counsel. INTERSTATE COMMODITIES: Committee Taps Lemery Greisler as Counsel ----------------------------------------------------------------- The official committee of unsecured creditors appointed in the bankruptcy case of Interstate Commodities, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of New York to hire Lemery Greisler LLC as its legal counsel. The firm will provide the following services: (a) advise the committee with respect to its rights, duties, and powers in the Chapter 11 case; (b) assist the committee in its consultations with the Debtor relative to the administration of the case; (c) assist the committee in analyzing the claims of the Debtor's creditors and the Debtor's capital structure; (d) assist the committee in its investigation of the financial condition of the Debtor; (e) assist the committee in its analysis of, and negotiations with, the Debtor or any third party concerning matters related to the case; (f) assist and advise the committee as to its communications to unsecured creditors; (g) represent the committee at hearings and other proceedings; (h) review and analyze applications, orders, statement of operations, and schedules filed with the court; (i) prepare any pleadings on behalf of the committee; and (j) perform such other legal services to the committee. Lemery Greisler's attorneys who will primarily be working on the case and their hourly rates are as follows: Paul A. Levine, Partner, and other Partners $385 Meghan M. Breen, Principal, and other senior $335 attorneys (generally 14 or more years’ experience) Other associates with less than 14 years’ experience $295 Paralegals $100 Paul Levine, Esq., a member at Lemery Greisler, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Paul A. Levine, Esq. Lemery Greisler LLC 50 Beaver Street, 2nd Floor Albany, NY 12207 Telephone: (518) 433-8800 Facsimile: (518) 433-8823 About Interstate Commodities Interstate Commodities Inc. engages in the merchandise of commodities. It offers whole corn, soybean meal, soybeans, soy hulls, soyhull pellets, corn gluten meal, canola meal, sunflower meal, beet pulp pellets, citrus pulp pellets, and wheat. Interstate Commodities filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Case No. 20-11139) on Aug. 26, 2020. The petition was signed by Michael G. Piazza, chief operating officer. At the time of filing, the Debtor disclosed $12,558,336 in assets and $25,513,305 in liabilities. Gerard R. Luckman, Esq., at Forchelli Deegan Terrana LLP, is the Debtor's counsel. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtor's Chapter 11 case. The committee is represented by Lemery Greisler LLC. IRIS RAMOS: Court Vacates Default Judgment Against CFS Realty ------------------------------------------------------------- Bankruptcy Judge Melvin S. Hoffman vacated the default judgment against Defendant CFS Realty & Management LLC in the case captioned IRIS RAMOS, Plaintiff, v. DWAYNE A. WHITE, and CFS REALTY & MANAGEMENT LLC, Defendants, Adversary Proceeding No. 19-01088-MSH (Bankr. D. Mass.). Ms. Ramos commenced the adversary proceeding on July 27, 2019. On August 19, 2019, she filed a certificate of service, certifying through counsel and counsel's service agent, that copies of the summons and complaint in this matter had been served upon CFS Realty via first class mail at multiple addresses. On Oct. 30, 2019, with CFS Realty having failed to plead or otherwise defend itself, the clerk of court entered that party's default, notice of which was mailed to CFS Realty. On Nov. 19, 2019, Ms. Ramos filed a motion for default judgment against CFS Realty. On Nov. 20, 2019, the Court's notice of default as to CFS Realty was returned as undeliverable. In apparent response, Ms. Ramos filed a notice that provided an updated address for CFS Realty. The docket did not reflect, however, that the notice of default was re-mailed to CFS Realty at the updated address. On April 14, 2020, the Court allowed Ms. Ramos's motion for default judgment and ordered her to file a motion for assessment of damages. On April 24, 2020, a non-attorney acting on behalf of CFS Realty filed a motion to vacate the default judgment. The motion was denied the same day, noting that non-individuals such as CFS Realty are not permitted to appear pro se. On May 4, 2020, Ms. Ramos filed a motion for assessment of damages. At a June 30, 2020 telephonic hearing on the motion, the principal of CFS Realty, Richard Phipps, appeared. He stated that he was having trouble obtaining counsel for CFS Realty. On July 27, 2020, this time through counsel, CFS Realty filed a motion seeking to vacate the default judgment, as well as the default entered against it, citing Rule 7055 of the Federal Rules of Bankruptcy Procedure, which incorporates Rule 55 of the Federal Rules of Civil Procedure. Rule 55(c) permits the court to "set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b)" of the Federal Rules of Civil Procedure. Rule 60(b) provides six limited circumstances in which a party may seek relief from a judgment or order. CFS Realty asserted that it was never served with the summons and complaint, as required, at the address of its principal place of business -- 1539 Blue Hill Avenue in Mattapan, Massachusetts. CFS Realty thus argued that insufficient service of process provides multiple grounds for vacating the default judgment under Rule 60(b) and that the insufficient service likewise provides good cause for vacating the default under Rule 55(c). More specifically as to vacating the default judgment, CFS Realty indicated that three Rule 60(b) circumstances apply here: an opposing party's misrepresentation under Rule 60(b)(3), a void judgment under Rule 60(b)(4), and the catchall "any other reason that justifies relief" under Rule 60(b)(6). In support of "misrepresentation" under Rule 60(b)(3), CFS Realty indicated that Ms. Ramos's August 19, 2019 certificate of service, which does not list the 1539 Blue Hill Avenue address, misrepresented to the court that service upon CFS Realty had been proper at another address listed therein. Referencing Rule 60(b)(4), CFS Realty argued that "any default or default judgment rendered [based upon improper service, is], as a matter of Due Process of Law, void and unenforceable." As to Rule 60(b)(6), CFS Realty appeared to suggest that insufficient service of process fits within this all-encompassing circumstance if not within the other two cited. According to Judge Hoffman, sufficient service of process in this matter required that Ms. Ramos serve the summons and complaint upon CFS Realty in accordance with Rule 7004 of the Federal Rules of Bankruptcy Procedure. Based upon her August 19, 2019 certificate of service, Ms. Ramos appeared to have attempted service under Rule 7004(b)(3) via first class mail at three addresses. Errors and sending in an address that was no longer in use made service of process insufficient, according to Judge Hoffman. Ms. Ramos argued that CFS Realty has waived the defense of insufficient service of process because the defense was not squarely raised in the non-attorney's earlier motion to vacate the default judgment. A party waives the defense of insufficient service of process if the party fails to assert the defense in the first motion or responsive pleading filed. Ms. Ramos overlooked the fact, however, that a non-attorney may not represent a non-individual and that a non-attorney's filings in an attempt to act in such a prohibited capacity are generally considered to be without effect. Thus, because the non-attorney was not permitted to represent CFS Realty, Judge Hoffman found that his actions could not have waived any defense. As CFS Realty has since, through counsel, asserted the defense of insufficient service of process in its motions and responsive pleading, the defense has been preserved. The insufficient service of process renders the default judgment void, requiring that it be vacated under Rule 60(b)(4). Accordingly, Judge Hoffman vacated the default judgment entered against CFS Realty. Judge Hoffman also found no indication that CFS Realty's default was willful, given that service of process was insufficient and there was no indication that CFS Realty was aware of the lawsuit before the default was entered. Judge Hoffman found that setting aside the default should not prejudice Ms. Ramos for the reason, among others, that she has invested only minimal resources in pursuing her claims against this defendant. Judge Hoffman also held that CFS Realty has presented at least one meritorious defense in its proposed answer, including by denying that it was a party to the contract underlying Ms. Ramos's breach of contract claim. Further, the Court found that the insufficient service of process alone provides good cause to vacate the default entered against CFS Realty. Judge Hoffman, therefore, vacated the entry of default. A copy of the Court's Memorandum of Decision is available at https://bit.ly/33RzjG3 from Leagle.com. Iris Ramos sought Chapter 11 protection (Bankr. D. Mass. Case No. 19-10789) on March 12, 2019. The Debtor tapped David G. Baker, Esq., as counsel. JAI BANGALAMUKHI: Bankr. Administrator Unable to Appoint Committee ------------------------------------------------------------------ The U.S. Bankruptcy Administrator for the Southern District of Alabama disclosed in a filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Jai Bangalamukhi Mai, LLC. About Jai Bangalamukhi Mai Jai Bangalamukhi Mai, LLC, a Mobile, Ala.-based limited liability company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 20-12201) on Sept. 14, 2020. At the time of the filing, the Debtor had estimated assets of between $50,001 and $100,000 and liabilities of the same range. Judge Jerry C. Oldshue oversees the case. Galloway, Wettermark & Rutens, LLP is the Debtor's legal counsel. JOHN OLSON: Court Confirms Chapter 11 Reorganization Plan --------------------------------------------------------- Bankruptcy Judge R. Kimball Mosier issued his findings and conclusions regarding the confirmation of Debtors John and Ashley Olson's chapter 11 plan of reorganization dated July 14, 2020. According to Judge Mosier, the Plan establishes five Classes of Claims. Based on a review of the Debtors' Schedules and the Claims Register maintained by the Court, there are no holders of Class 1 Claims. Classes 2, 3, and 4 are impaired and were entitled to vote on the Plan. Class 2 (General Unsecured Claims) overwhelmingly voted to accept the Plan (5/6 accepting votes, representing 98% of total voting Claims), as reflected by the Ballot Tabulation Register filed in the Case. Class 3 (Allowed Secured Claim of Bank of America) accepted the Plan. Class 4 (Allowed Secured Claim of Sean Kunzler) accepted the Plan. The Debtors did not receive any ballots for Class 5 (Miscellaneous Secured Claims). Under the binding precedent of In re Ruti-Sweetwater, Inc., 836 F.2d 1263, 1267-68 (10th Cir. 1988), holders of unimpaired Claims that did not return ballots are deemed to have accepted the Plan. Those Creditors who are impaired, but did not vote, are bound by the Classes that accepted the Plan. Accordingly, the Court found the Debtor meets the voting requirements under 11 U.S.C. sections 1129(a)(8) and (a)(10). The Plan provides for the same treatment for each Claim or Interest in each respective Class, unless the holder(s) of a particular Claim(s) have agreed to less favorable treatment with respect to such Claim, thereby satisfying section 1123(a)(4). The Court also found that the Plan provides adequate and proper means for its implementation, thereby satisfying section 1123(a)(5). Among other things, Articles 5 and 6 of the Plan provide for (a) the vesting of the property of the Debtors and their chapter 11 bankruptcy Estate in the Reorganized Debtors, (b) the Reorganized Debtors' use and retention of property, (c) the continuation of normal business (life) operations by the Reorganized Debtors, and (d) distributions to creditors equal to the Reorganized Debtors' Projected Disposable Income. The Plan was proposed in good faith and not by any means forbidden by law and, therefore, complies with the requirements of section 1129(a)(3). In determining that the Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the filing of the Bankruptcy Case and the formulation of the Plan. In addition, the Court found that the Plan is feasible and complies with section 1129(a)(11) because confirmation is not likely to be followed by a liquidation or the need for further financial reorganization of the Debtors. The Court is satisfied that the Plan offers a reasonable prospect of success and is workable. As such, the requirements of section 1129(a)(11) are satisfied. A copy of the Court's Findings and Conclusions is available at https://bit.ly/349iBlz from Leagle.com. The bankruptcy case is In re: JOHN OLSON and ASHLEY OLSON, Chapter 11, Debtors, Bankruptcy No. 20-23408 (RKM) (Bankr. D. Utah). Jeffrey Trousdale, COHNE KINGHORN, P.C., Salt Lake City, represents the Debtors. JW TRUCKING: Taps Stafford Law as Special Counsel ------------------------------------------------- JW Trucking, LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Stafford Law Firm, P.C. as its special counsel. JW Trucking requires Stafford Law to: a. represent the Debtor in a pre-petition collection claim it has against Concho Resources, Inc.; and b. advise the Debtor regarding preparation of settlement agreements. The firm will receive an initial retainer of $5,000 for its initial services. Upon the resolution of this matter through settlement, adjudication through hearing or trial proceeding, or any other manner, the Debtor and Stafford Law agree that the firm will receive 10 percent of all gross proceeds resulting from the settlement. Paul Stafford, Esq., at Stafford Law Firm, disclosed in court filings that the firm is disinterested and has no connection with creditors or any party adverse to the Debtor. The firm can be reached through: Paul K. Stafford, Esq. Stafford Law Firm, P.C. PO Box 710404 Dallas, TX 75371 Tel: 214-649-3405 Fax: 214-580-8104 About JW Trucking, LLC JW Trucking, LLC is a privately held company that operates in the trucking industry. JW Trucking filed its petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-70100) on August 20, 2020. In the petition signed by Jeffrey Waugh, Jr., member, the Debtor estimated $1 million to $10 million in both assets and liabilities. Max R. Tarbox, Esq. at Tarbox Law, P.C. represents the Debtor as legal counsel. K & K TECHNOLOGY: Hires Moss & Murphy as Litigation Counsel ----------------------------------------------------------- K & K Technology Corp. received approval from the U.S Bankruptcy Court for the Northern District of California to hire Moss & Murphy, Attorneys at Law as its litigation counsel. The Debtor requires the firm to: i) review the timing and other circumstances surrounding the alleged foreclosure sale of Debtor's real property; ii) take all necessary and appropriate legal actions on behalf of the Debtor to have any purported foreclosure sale deemed fraudulent, invalid or violative of the automatic stay in Debtor's Chapter 11 case; iii) coordinating with, but not duplicating services of, other professionals appointed to represent the Debtor, including Law Offices of James Shepherd; and iv) provide other legal services. The firm's services will be provided mainly by Glen L. Moss, Esq., who will be paid at the rate of $400 per hour. Moss & Murphy is a "disinterested person" within the meaning of 11 U.S.C. Sec. 101(14) and as required by 11 U.S.C. Sec. 327(a), according to court filings. The firm can be reached through: Glen L. Moss, Esq. Moss & Murphy 1297 B St Ste A Hayward, CA, 94541-2985 Phone: (510) 583-1155 About K & K Technology Corp. K & K Technology Corp. is a single asset real estate corporation based in Pleasanton, Calif. K & K Technology sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-41366) on August 20, 2020. The petition was signed by Kuldeep Singh, member. At the time of the filing, Debtor had estimated assets of between $1,000,001 and $10 million and liabilities of the same range. K & W CAFETERIAS: Committee Hires Waldrep Wall as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors of K & W Cafeterias, Inc., filed its second amended motion seeking authority from the U.S. Bankruptcy Court for the Middle District of North Carolina to retain the law firm of Waldrep LLP as bankruptcy counsel, effective as of Sept. 18, 2020 through Sept. 30, 2020, and the law firm of Waldrep Wall Babcock & Bailey PLLC as its bankruptcy counsel, effective as of Oct. 1, 2020. The Committee requires Waldrep Wall to: (a) act as bankruptcy counsel for the Committee in the Middle District of North Carolina; (b) provide the Committee with legal advice concerning its duties, powers, and rights in relation to the Debtors and the administration of the Debtor's bankruptcy case; (c) assist the Committee in the investigation of the acts, conduct, assets, and liabilities of the Debtor, and any other matters relevant to the case or to the formulation of a plan of reorganization; (d) assist the Committee and the Debtor in the formulation of a plan of reorganization, or if appropriate, to formulate the Committee's own plan of reorganization; (e) take such action as is necessary to preserve and protect the rights of all of the Debtor's unsecured creditors; (f) investigate potential causes of action against third parties for the benefit of the bankruptcy estate; (g) prepare on behalf of the Committee all necessary applications, pleadings, adversary proceedings, answers, reports, orders, responses, and other legal documents; (h) conduct appropriate discovery and investigations into the Debtor's operations, valuation of assets, lending relationships, management, and causes of action; and (i) perform all other legal services that may be necessary and in the best interests of the unsecured creditors of the Debtor's estate. Waldrep Wall will be paid at these hourly rates: Thomas W. Waldrep, Partner $640 James C. Lanik, Partner $475 Jennifer B. Lyday, Partner $415 Evan A. Lee, Associate $260 John Van Swearingen, Associate $260 Brenda D. Carter, Paralegal $220 Marybeth Ford, Paralegal $220 Waldrep Wall will also be reimbursed for reasonable out-of-pocket expenses incurred. Thomas W. Waldrep, Jr., co-managing partner of Waldrep Wall, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Waldrep Wall can be reached at: Thomas W. Waldrep, Jr., Esq. James C. Lanik, Esq. Jennifer B. Lyday, Esq. WALDREP WALL BABCOCK & BAILEY PLLC 1076 W. Fourth Street Winston-Salem, NC 27101 Tel: (336) 717-1280 Fax: (336) 717-1340 Email: notice@waldrepwall.com About K & W Cafeterias K&W Cafeterias, Inc., a company based in Winston Salem, N.C., filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 20-50674) on Sept. 2, 2020. Judge Benjamin A. Kahn presides over the case. In the petition signed by Dax C. Allred, president, the Debtor disclosed $30,085,274 in assets and $22,189,229 in liabilities. The Debtor has tapped Northen Blue, LLP as its bankruptcy counsel and Bell Davis & Pitt P.A. and Constangy Brooks Smith & Prophete LLP as its special counsel. William Miller, U.S. bankruptcy administrator, appointed a committee to represent unsecured creditors in Debtor's Chapter 11 case. The committee tapped Waldrep Wall Babcock & Bailey PLLC as its bankruptcy counsel. K&W CAFETERIAS: Seeks to Hire John Bosworth as Appraiser -------------------------------------------------------- K&W Cafeterias, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of North Carolina to hire John Bosworth & Associates, LLC, which conducts business under the name Valbridge Property Advisors, as its appraiser. The firm will provide current appraisals for certain real properties owned by affiliates of the Debtor, Allred Investment Company, LLC and DGV, LLC, currently leased to the Debtor for use in its restaurant operations. The firm has agreed to provide the appraisals for a fixed fee of $27,500, pursuant to Section 328 of the Bankruptcy Code, payable upon completion and delivery of such appraisals to the Debtor. The firm does not represent or hold any interest adverse to the Debtor or the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, according to a court filing. The firm can be reached through: John T. Bosworth John Bosworth & Associates, LLC 5950 Fairview Rd, Suite 405 Charlotte, NC 28210 Telephone: (704) 376-5400 Facsimile: (704) 376-1095 About K&W Cafeterias K&W Cafeterias, Inc., a company based in Winston Salem, N.C., filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 20-50674) on Sept. 2, 2020. Judge Benjamin A. Kahn presides over the case. In the petition signed by Dax C. Allred, president, the Debtor disclosed $30,085,274 in assets and $22,189,229 in liabilities. The Debtor has tapped Northen Blue, LLP as its bankruptcy counsel and Bell Davis & Pitt P.A. and Constangy Brooks Smith & Prophete LLP as its special counsel. William Miller, U.S. bankruptcy administrator, appointed a committee to represent unsecured creditors in Debtor's Chapter 11 case. The committee tapped Waldrep Wall Babcock & Bailey PLLC as its bankruptcy counsel. KOPIN CORPORATION: Incurs $957K Net Loss in Third Quarter --------------------------------------------------------- Kopin Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the company of $957,440 on $9.51 million of revenues for the three months ended Sept. 26, 2020, compared to a net loss attributable to the company of $6.62 million on $6.14 million of revenues for the three months ended Sept. 28, 2019. For the nine months ended Sept. 26, 2020, the Company reported a net loss attributable to the company of $5.67 million on $26.21 million of revenues compared to a net loss attributable to the company of $22.22 million on $20.79 million of revenues for the nine months ended Sept. 28, 2019. "Our momentum continued in the third quarter for revenue growth as well as technology development. Total third quarter 2020 revenues increased 55% year- over- year, our strongest year- over- year growth in 10 quarters. We also made further progress in streamlining our cost structure, even as we continue to invest aggressively in next-generation OLED microdisplays," said Dr. John C.C. Fan, CEO of Kopin. "Our business was strong across multiple segments and was led by our defense product revenues which increased 140% in the third quarter of 2020 compared with the third quarter in 2019. This significant increase was driven by two production programs -- the display sub-assembly system for the FWS-I thermal weapon sight program and displays for the F-35 Fighter jet program. As announced in September, we were awarded a $22.9 million follow-on contract for the FWS-I program, with scheduled shipments through 3Q next year. We expect to build on this current defense production business in the coming years with the additional programs that we have in development. These programs include using our products in armored vehicle targeting systems, rotary-wing aircraft helmets, and both automatic and semi-automatic rifle day scopes and targeting systems, among others. "Near the end of Q3, we also observed exciting growth from our Enterprise customers who incorporate our high-resolution displays and modules into their AR products. One trend we are seeing is that the forced remote and socially distanced approach to work during the pandemic has accelerated the adoption by many enterprise organizations in the implementation and roll-out of AR devices to their workforces. We expect the enterprise and consumer markets for AR and VR will continue to gain traction, with Kopin leading the market with the microdisplay technologies and solutions to meet this need. We expect that our current defense and enterprise production programs, including the addition of three of current defense development programs transitioning into production in 2021, will continue driving the revenue momentum." Dr. Fan continued, "On October 28, 2020, we participated in a webinar sponsored by Insight Media which discussed our recent breakthrough results and roadmap of high-brightness color Organic Light Emitting Diode (OLED) microdisplays (To listen to a replay of the webinar, please click here). A major challenge for OLED microdisplays has been achieving high brightness combined with low power (for small battery needs) and wide color gamut. In this webinar we shared the results of high brightness (7,000 nits), 100% sRGB color and low power consumption from our color 720p OLED display using a duo-stack OLED structure and our patent-pending ColorMax™ technology. We also outlined the technical path to achieving even greater brightness (30,000 nits) from color OLED microdisplays. We believe our proprietary ColorMax technology and unique approach to tandem OLED structures will open new opportunities for our defense, enterprise and consumer customers. Our leading microdisplay technologies are well appreciated, which has driven the rapid growth in externally funded development programs for advanced displays." Dr. Fan concluded, "We believe that the long-awaited adoption of AR and VR systems is finally beginning to take hold. As expected, these systems are being adopted first in defense, followed by industrial/enterprise and consumer applications. Almost all of our defense programs in development are related to AR and VR applications. As AR and VR continue to gain traction in the new remote world, Kopin is ideally positioned to meet this demand. With industry leading displays and modules for wearable AR and VR devices, Kopin clearly sees growing opportunities in the defense, industrial and consumer segments. We are making great progress in executing our strategy to improve the performance of the Company and expect strong results in Q4. We are excited about our future." As of Sept. 26, 2020, the Company had $37.66 million in total assets, $11.93 million in total current liabilities, $255,050 in noncurrent contract liabilities and asset retirement obligations, $992,712 in operating lease liabilities (net of current portion), $1.17 million in other long-term obligations, and $23.31 million in total stockholders' equity. The Company incurred net losses of $29.4 million and net cash outflows from operations of $21.0 million for the fiscal year ended 2019. The Company incurred a net loss of $5.8 million and net cash outflows from operations of $6.3 million for the nine months ended Sept. 26, 2020. In addition, the Company has experienced a significant decline in its cash and cash equivalents and marketable debt securities over the last several years, which was primarily a result of funding operating losses, of which a significant component related to the Company's ongoing investments in research and development. The Company had $15.6 million of cash and cash equivalents and marketable debt securities at Sept. 26, 2020. The Company said its historical and current use of cash in operations combined with limited liquidity resources raise substantial doubt regarding its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/771266/000149315220020606/form10-q.htm About Kopin Kopin Corporation -- http://www.kopin.com/-- is a developer and provider of transmissive and reflective active matrix liquid crystal and organic light emitting diode (OLED) micro displays for integration into systems for military, industrial and consumer products. Kopin's technology portfolio includes ultra-small displays, optics, and low-power ASICs. Kopin reported a net loss of $29.47 million for fiscal year 2019, a net loss of $34.48 million for fiscal year 2018, and a net loss of $25.38 million for fiscal year 2017. RSM US LLP, in Stamford, Connecticut, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 11, 2020, citing that the Company has suffered recurring losses from operations and recurring negative operating cash flows that raise substantial doubt about its ability to continue as a going concern. L.L.G. CAB: Reaches Settlement With Primary Creditor ---------------------------------------------------- L.L.G. Cab, Corp. filed with the U.S. Bankruptcy Court for the Eastern District of New York a Plan of Reorganization and a Disclosure Statement. Majority creditor DePalma Acquisition I LLC was paid in accordance with settlement terms reached by the parties in full settlement of the resulting deficiency upon the surrender of the collateral medallions number 5G78 and 5G85. The agreed upon amount of $270,000 was paid in full, in one lump sum payment upon the entry of the signed order approving the settlement agreement. The secured portion of the claim of DePalma Acquisition (Class 1) is deemed settled in full upon the surrender of the referenced medallions, currently held in storage with the TLC. The unsecured non-priority claim of DePalma Acquisition (Class 2) is impaired. DePalma Acquisition has received a 41% dividend of the unsecured deficiency claim, equal to $270,000.00, in one lump sum payment as by the terms of the settlement agreement between the parties. Equity interest holders Oleg Shokin and Gary Shokin retain their interests. The Plan was financed by personal contributions from the personal funds of the two corporate principals. The required proofs of funds and affidavits of contribution, will be duly provided to the Office of the United States Trustee prior to plan confirmation. The claim of the one remaining general unsecured creditor Internal Revenue Service, will be similarly financed by a personal contribution of the two principals of the Debtor. Gary Shokin and Oleg Shokin, as principals and shareholders, will continue to manage the day to day operations of the Debtor to the extent necessary. A full-text copy of the Disclosure Statement dated September 23, 2020, is available at https://tinyurl.com/yxwwruhu from PacerMonitor.com at no charge. A full-text copy of the disclosure statement dated September 1, 2020, is available at https://tinyurl.com/y6tg2zxy from PacerMonitor.com at no charge. The Debtor is represented by: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 3099 Coney Island Avenue, 3rd Floor Brooklyn, NY 11235 Phone: (718) 513-3145 Fax : (347) 342-3156 Email: alla@kachanlaw.com About L.L.G. Cab, Corp. Based in Brooklyn, N.Y., L.L.G. Cab, Corp. owns two taxi medallions, numbered #5G78 #5G85. L.L.G. Cab sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-42956) on May 14, 2019, listing under $1 million in both assets and liabilities. Alla Kachan, Esq., at the Law Offices of Alla Kachan, P.C. is the Debtor's counsel. LAS UVAS VALLEY: Dona Ana County's Bid to Amend Claim Junked ------------------------------------------------------------ In the bankruptcy case captioned In re: LAS UVAS VALLEY DAIRIES, Debtor, Case No. 17-12356-t11 (Bankr. D.N.M.), Dona Ana County filed a motion to amend its proof of claim and application for an administrative expense. Both relate to 2016-2018 personal property taxes assessed on cattle. Robert Marcus, the successor liquidating trustee in the bankruptcy case, objected to the the County's bid. After careful consideration of the facts presented, Bankruptcy Judge David T. Thuma denied the County's bid. Judge Thuma held that the proposed claim amendment is really a new claim and the County did not show the excusable neglect needed to file a very late claim. In New Mexico, assessment and collection of property taxes occur at the county level. While most personal property is not taxed in New Mexico, cattle are. The tax year is the calendar year. Cattle located in New Mexico are valued for tax purposes every year on Jan. 1. For any tax year, half the tax is due Nov. 10 of that year and the other half is due the following April 10. The Debtor operated a dairy in Dona Ana County, New Mexico. It filed the chapter 11 case on Sept. 15, 2017. The County received notice of the filing by Sept. 19, 2017. It promptly suspended billing and collection activity on all of the Debtor's real and personal property tax accounts. The Debtor filed schedules on Oct. 4, 2017. The Debtor's Schedule D listed the County as a secured creditor, with a "Tax Lien on all property in Dona Ana," securing a debt of $216,975.10. The County filed a secured proof of claim for $234,816.03 on Oct. 18, 2017. "Real Property" was the stated basis for the claim, for taxes owed under 11 U.S.C. section 507(a)(8). The proof of claim includes 27 pages of real property tax bills for 2016 and 2017. Each bill is for a separate parcel of real estate. There is no indication that the proof of claim was an estimate. The claim does not mention personal property taxes. The Debtor gave notice to the County and other creditors of a claims bar date. The claims bar date was Jan. 3, 2018, for general creditors and March 14, 2018, for governmental units like the County. The Debtor was not able to reorganize. In June 2018 the Unsecured Creditors Committee and the Debtor's two largest secured creditors, Production Credit Association of Southern New Mexico and Metropolitan Life Insurance Company, filed a plan of liquidation. The plan provided for the sale of the Debtor's assets and the distribution of net proceeds to creditors in accordance with the Bankruptcy Code priority scheme, except that unsecured creditors were guaranteed at least $1,000,000. The Court confirmed the plan on June 14, 2018. Article V of the plan, as amended by the confirmation order, set a deadline of June 29, 2018, for parties to file administrative expense claims. Under the plan, a liquidating trustee was appointed and charged with selling estate assets and distributing the net proceeds to creditors. Robert Marcus is the successor liquidating trustee. Marcus sold nearly all of the Debtor's personal property, including the dairy herd, in the summer of 2018. The Court entered a final decree closing the case on July 27, 2018. Marcus sold the Debtor's real estate in March 2019 and paid all real property taxes, interest, and penalties to the County ($339,611.59). Shortly thereafter, the County notified Marcus by email that the Debtor still owed personal property taxes assessed on the dairy herd. The email is not in the record and the County did not file a claim or seek relief from the Court at that time. After the real estate was sold, Marcus negotiated with MetLife to settle a number of disputes. On May 3, 2019, Marcus filed a motion to approve a settlement with MetLife. Under the deal, MetLife agreed to accept $7,840,081, leaving an unsecured claim of $6,481,297. The settlement was approved on July 24, 2019. Marcus asserts that, had the County timely filed its claims for 2016-2018 personal property taxes, the claim would have materially affected the MetLife settlement. On Nov. 22, 2019, Marcus filed a partial objection to the County's proof of claim, asserting that the claim had been paid except for $8,877.22. Marcus asked for the Court to declare that the estate owed the County $8,877.22 or less. The County responded that it was still owed substantial personal property taxes assessed on the dairy herd. The parties filed cross motions for summary judgment on the issue, with the County arguing, essentially, that it should be allowed to assert claims against the liquidating trust for all unpaid personal property taxes. After reviewing the pleadings and the accompanying affidavits, the Court determined that proper procedure was for the County to seek permission to amend its proof of claim and/or apply for an administrative expense. The County filed the motion/application on June 12, 2020; Marcus timely objected. Both rely on previously filed affidavits. The Court held a hearing on the motion/application on August 6, 2020. The parties made legal arguments and agreed that an evidentiary hearing was unnecessary. The County sought to assert claims totaling $488,358.13 for the personal property taxes on the Debtor's dairy herd that were not part of its proof of claim. There is no dispute that the 2016 taxes are prepetition, nor that the 2018 taxes are post-petition. The County argued, however, that the 2017 tax is a post-petition administrative expense, while Marcus asserts it is a prepetition claim. The County sought leave to tardily amend its proof of claim, tardily apply for payment of an administrative expense, or both. The proposed claim amendment is really a new claim, however, and the County did not show the excusable neglect needed to file a very late claim, Judge Thuma held. Alternatively, equitable factors weigh heavily against allowing the County to file an amended claim long after the bar date and plan confirmation. Finally, the County may not file an administrative expense application so far past the deadline set by the confirmed plan, section 503(b)(1)(D) notwithstanding. A copy of the Court's Opinion is available at https://bit.ly/2T69mfy from Leagle.com. About Las Uvas Valley Dairies Founded in 1998, Las Uvas Valley Dairies operates a dairy farm at 1261 Hilburn Road, Hatch, NM 87937, Dona Ana County. The company filed for chapter 11 bankruptcy protection (Bankr D.N.M. Case No. 17-12356) on Sept. 15, 2017, with estimated assets of $100 million to $500 million and estimated debts of $10 million to $50 million. The petition was signed by Dean Horton, general partner. The Unsecured Creditors Committee and the two largest secured creditors, Production Credit Association of Southern New Mexico and Metropolitan Life Insurance Company, filed a plan of liquidation providing for the sale of the Debtor's assets and the distribution of net proceeds to creditors. Unsecured creditors were guaranteed at least $1,000,000 under the Plan. The Court confirmed the plan on June 14, 2018. Robert Marcus has been named the successor liquidating trustee. The Court entered a final decree closing the case on July 27, 2018. LEGENDS GOLF: Seeks to Hire Accounting Center as Accountant ----------------------------------------------------------- Legends Golf Orlando LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Accounting Center of Orlando, LLC as its accountant. The firm will provide the following services: (a) assist with preparation of monthly operating reports during the course of the bankruptcy proceeding; (b) perform general accounting services; (c) prepare federal and state tax returns; (d) assist the Debtor in preparing documents necessary for confirmation; (e) provide accounting advice to the Debtor; and (f) perform other such functions as requested by the Debtor or its counsel to assist the Debtor in the Chapter 11 case. The firm has agreed to perform the services at the following hourly rates: Staff Accounting/Bookkeeping $35 Accounting and Consulting $90 Attendance and Testimony at Court $125 Alejandro Pichardo, MBA, EA, of Accounting Center, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Alejandro Pichardo, MBA, EA Accounting Center of Orlando, LLC 1706 E. Semoran Blvd., Suite 103 Apopka, FL 32703 About Legends Golf Orlando Legends Golf Orlando, LLC -- https://www.golfsbw.com/ -- owns and operates a golf course in Clermont, Fla. Legends Golf Orlando sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 20-04460) on Aug. 7, 2020. Miguel Angel Vidal, managing member, signed the petition. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and liabilities of the same range. Bartolone Law, PLLC, is the Debtor's legal counsel. LEHMAN BROTHERS: LBI Unsecureds' Recovery Now at 40.06% ------------------------------------------------------- James Giddens, the trustee for the SIPA liquidation of Lehman Brothers Inc., said in an Oct. 29, 2020 report (the Trustee's 23rd interim report) that during the period April 1, 2020, through Sept. 30, 2020, that he has distributed over $70 million to unsecured creditors. In September, the Trustee made a seventh interim distribution to holders of allowed general unsecured creditor claims. On the Trustee's motion, the Court entered the Seventh Interim Distribution Order , on Sept. 8, 2020, the Trustee filed the Notice of $21 Million Increase to the Seventh Interim Distribution Fund (ECF No. 15147) increasing the seventh interim distribution fund to approximately $70 million, a 0.3015 percent distribution on the allowed amount of general unsecured creditor claims. In late September, the Trustee distributed substantially all of the seventh interim distribution fund to LBI's general unsecured creditors holding allowed claims as of the record date of June 30, 2020 "The seventh interim distribution brought general estate distributions to over $9.096 billion – a 40.0605 percent rate of return. While nothing can undo the damage of Lehman's collapse, recoveries of more than forty percent for general unsecured creditors were unthinkable at the time of LBI’s failure and are a testament to the orderly regime for broker-dealer liquidations set forth in the SIPA statute," Giddens said in the report. Resolution of the sole remaining claims litigation also advanced. The Bankruptcy Court granted the Trustee's motion to dismiss the complaint brought by certain of the ESEP claimants. An appeal of that ruling was certified to the Second Circuit for consideration of direct appeal, where it is sub judice. The Trustee said he is prepared to commence the estate closure process within days of the final resolution of the sole claims dispute. A copy of the 23rd report is available at: https://portal-redirect.epiq11.com/LBI/document/GetDocument.aspx?DocumentId=3807959 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers Holdings filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were assigned to Judge James M. Peck. Judge Shelley Chapman took over the case after Judge Peck retired from the bench to join Morrison & Foerster. A team of Weil, Gotshal & Manges, LLP, lawyers led by the late Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., served as the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for the SIPA liquidation of the business of LBI. He is represented by Hughes Hubbard & Reed LLP. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. * * * Lehman Brothers Holdings Inc. ("LBHI"), as Plan Administrator, announced a 21st disribution on October 1, 2020 to holders of allowed claims against LBHI and its various affiliated debtors. Cumulatively through the 21st distribution, Lehman's total distributions to unsecured creditors will amount to approximately $128.2 billion including $95.3 billion of payments on account of third-party claims, which includes non-controlled affiliate claims, and $32.9 billion of payments among the Lehman Debtors and their controlled affiliates. LESLIE'S POOLMART: Moody's Upgrades CFR to B1, Outlook Stable ------------------------------------------------------------- Moody's Investors Service upgraded Leslie's Poolmart, Inc.'s Corporate Family Rating to B1 from B3 and Probability of Default Rating to B1-PD from B3-PD. Concurrently, Leslie's Poolmart, Inc. (Old) senior secured term loan was upgraded to B1 from B2. The ratings outlook for Leslie's remains stable. In addition, Moody's assigned a Speculative Grade Liquidity rating of SGL-2 to Leslie's. The upgrade to B1 reflects governance considerations particularly Leslie's recent repayment of $390 million of debt with the proceeds of its initial public equity offering. The upgrade also reflects its improved EBITDA, which when combined with debt repayment has resulted in a sustained improvement in credit metrics. Assignments: Issuer: Leslie's Poolmart, Inc. Speculative Grade Liquidity Rating, Assigned SGL-2 Upgrades: Issuer: Leslie's Poolmart, Inc. Probability of Default Rating, Upgraded to B1-PD from B3-PD Corporate Family Rating, Upgraded to B1 from B3 Issuer: Leslie's Poolmart, Inc. (Old) Senior Secured Bank Credit Facility, Upgraded to B1 (LGD4) from B2 (LGD3) Outlook Actions: Issuer: Leslie's Poolmart, Inc. Outlook, Remains Stable Issuer: Leslie's Poolmart, Inc. (Old) Outlook, Changed To Stable From No Outlook RATINGS RATIONALE Leslie's Poolmart, Inc.'s B1 CFR rating reflects its moderately high leverage with debt/EBITDA of 4.7x, pro forma as of October 3, 2020 for the recent debt repayment, down from 6.4x. It also reflects that it remains 64% owned by private equity following its public stock offering. Leslie's benefits from the relatively stable demand of pool and spa maintenance products from a large installed base of pools that diminishes its economic sensitivity, despite its weather dependence. Leslie's has also experienced significant tail winds from the pandemic as consumers remain focused on their homes, and sanitation increases in importance. The recent accelerated increase in pool installations will help support demand for its maintenance products in future years. The rating is supported by Leslie's leading market share with approximately 15% of the $11 billion US pool and spa care market which serves residential, professional, and commercial consumers. Despite its strength in the category, its limited absolute scale and geographic concentration constrains the rating. The company reaches its customers through its national physical store footprint of 934 locations as well as its digital platform. The company's good liquidity also supports the rating, including expectations for positive free cash flow, and a lack of near-term debt maturities, despite high seasonality. 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 Leslie's Poolmart, Inc. 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. The stable outlook reflects its expectations for good liquidity, a conservative financial strategy, and stable to increasing revenue and earnings on a weather-adjusted basis as the business normalizes from the tailwinds of the pandemic. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be downgraded if operating performance deteriorates or liquidity weakens. Quantitatively, the ratings could be downgraded if debt/EBITDA is sustained above 5.0x or EBIT/interest expense approaches 2.0x. An upgrade would require that a significant increase in scale while maintaining sustained earnings growth, a meaningful reduction in private equity ownership, and good liquidity. Quantitatively, debt/EBITDA would be sustained below 4.0x and EBIT/interest expense is sustained above 3.0x. The principal methodology used in these ratings was Retail Industry published in May 2018. Leslie's Poolmart, Inc. is a specialty pool supplies retailer that operated 934 stores and commercial centers as of October 2020. Leslie's is a public company trades on the NASDAQ under the symbol "LESL" and is approximately 64% owned by investment funds affiliated with L Catterton and GIC as a result of a leveraged buyout in February 2017. Net sales for the fiscal year ended October 2020 were approximately $1.1 billion. LIGADO NETWORKS: Raises Additional $3.85B to Fund L-Band Network ---------------------------------------------------------------- Via Satellite reported that Ligado Networks that it has raised $3.85 billion in new capital from new and existing investors, led by JPMorgan Chase & Co. This capital raise, announced Oct. 23, will support Ligado as it works to deploy a private L-band network to offer managed network services for enterprise and industrial sectors. Ligado said specifically, this capital raise will fund the company's commercial collaboration with chipset designers, device manufacturers, and network infrastructure providers. The FCC approved Ligado's plan to deploy a low-power terrestrial nationwide network in the L-band to support Internet of Things services (IoT) in April. But Ligado has many detractors. A wide range of stakeholders including the U.S. Department of Defense (DoD), the GPS Innovation Alliance (GPSIA), Iridium, Lockheed Martin and a group representing GPS end users called Keep GPS Working Coalition have opposed the decision, saying Ligado’s network will cause harmful interference to GPS signals. "Today is a great day, and now the fun begins. We've secured our license, we've raised the necessary capital, and we're in a great position to work with the industry to get this spectrum deployed for 5G to support critical industries across the U.S.," said Doug Smith, Ligado President and CEO. About Ligado Networks Ligado Networks, formerly known as LightSquared, is an American satellite communications company. It provides telecommunication services via satellite. The Company conducts business in the United States. * * * The Wall Street Journal reported mid-September 2020 that Ligado Networks LLC is in talks with key creditors and shareholders to restructure about $8 billion in debt and other obligations while buying time to monetize its 5G-network assets. The company faces a large maturity of senior debt which comes due in December. While earlier this year Ligado won Federal Communications Commission approval to use its wireless spectrum licenses to support a ground-based network, the company is a long way off from completing the project and generating revenues from it to help address the debt maturity. According to the Journal, Ligado is discussing a potential set of transactions that would convert its roughly $5.2 billion of junior debt and $2.6 billion of preferred equity into common shares, the people familiar with the matter said. By reducing a substantial portion of debt, it would make it easier for Ligado to refinance the roughly $2.2 billion of senior loans that mature this December. The company is also looking to raise new debt to help provide additional liquidity. LIVE PRIMARY: Hires Rosen & Associates as Bankruptcy Counsel ------------------------------------------------------------ Live Primary, LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to hire Rosen & Associates, P.C., as its bankruptcy counsel. The professional services that Rosen & Associates will render are: a. advising the Debtor with respect to its powers and duties as a debtor and debtor-in-possession in the continued operation of its business and management of its property; b. representing the Debtor before this Court and any appellate courts, on matters pertaining to its affairs as debtor-in-possession, including prosecuting adversary proceedings to recover assets of the estate and defending actions on the Debtor's behalf that may arise during this Chapter 11 Case; c. advising and assisting the Debtor in negotiations with its creditors and the preparation of a plan of reorganization and disclosure statement, and taking any necessary action on behalf of the Debtor to obtain confirmation of such plan; d. preparing, on behalf of the Debtor, all necessary pleadings, motions, applications, answers, orders, reports, documents, and other legal papers necessary for the administration of the Debtor's estate; and e. performing such other legal services for the Debtor that may be appropriate and necessary during the pendency of the Chapter 11 Case. On July 10, 2020, the Debtor paid Rosen & Associates a retainer fee of $75,000. The Debtor has agreed to compensate Rosen & Associates at its usual hourly rates and to reimburse it for its reasonable expenses, charges, and disbursements. Rosen & Associates does not hold or represent an interest adverse to the estate, and is a disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14), according to court filings. The firm can be reached through: Sanford P. Rosen, Esq. Rosen & Associates, P.C. 747 Third Avenue New York, NY 10017-2803 Phone: (212) 223-1100 Email: srosen@rosenpc.com About Live Primary LLC Live Primary dba Primary --https://liveprimary.com -- is a co-working and shared office space featuring an array of amenities designed to help people feel good while working to make their businesses thrive. It sought protection under Chapter 11 of the US Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-11612) on July 12, 2020. At the time of filing it has an estimated assets of $1 million to $10 million and an estimated liabilities of $10 million to $50 million. The case is assigned to Judge Martin Glenn. Sanford P. Rosen, Esq. of Rosen and Associates PC is the Debtor's counsel. David Kirshenbaum as Investor Representative for the Noteholders is represented by Daniel J. Weiner, Esq. at Schafer & Weiner, PLLC. Broadway 26 Waterview, LLC, the Debtor's Landlord, is represented in the case by Jay B. Itkowitz, Esq. at Itkowitz PLLC. LONESTAR RESOURCES: Fitch Withdraws 'D' IDR Due to Bankruptcy ------------------------------------------------------------- Fitch Ratings has withdrawn the following ratings: -- Lonestar Resources America, Inc. and Lonestar Resources US, Inc. 'D' Long-term Issuer Default Ratings (IDR); -- Lonestar Resources America, Inc 'CCC'/'RR1' first lien revolver; -- Lonestar Resources America, Inc. 'C'/'RR5' senior unsecured notes. The ratings were withdrawn due to bankruptcy of the rated entity, debt restructuring or issue/tranche default. KEY RATING DRIVERS Fitch Ratings has withdrawn the ratings as Lonestar has entered into bankruptcy. Accordingly, Fitch will no longer provide ratings or analytical coverage. RATING SENSITIVITIES Rating sensitivities are do not apply, as the ratings are being withdrawn. 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. LONG DEI LIU: Counsel's Fee Sharing Deal Unlawful, Court Says ------------------------------------------------------------- In the appellate case captioned William Hong and Harry Hong through Their Guardian Ad Litem, Yuanda Hong, Appellants, Long-Dei Liu; Smiley Wang-Ekvall, LLP; David A. Kay, Esq.; and Rosenberg, Shpall & Zeigen, APLC, Appellees, Adv. Case No. 8:16-AP-01233-TA, BK Case No. 8:16-BK-11588-TA (C.D. Cal.), Appellants sought reversal of the Bankruptcy Court's Order awarding fees and costs or, alternatively, remand with instructions for the Bankruptcy Court to make specific findings regarding which services were reasonably likely to benefit the estate and/or were necessary to the administration of the estate. Upon review, District Judge Josephine L. Staton affirmed in part, reversed in part, and remanded in part the matter to the Bankruptcy Court for further proceedings. The Court found no abuse of discretion in the award of fees for services incurred in Counsel David A. Kay's pursuit of the appeal, at least up to a certain point. However, the Court also found that Counsel entered into an unlawful fee-sharing agreement with another attorney. On March 14, 2014, Ling-Nie Hong died of blood loss a few days after delivering her second child (Harry) by cesarean section. Debtor/Appellee Long-Dei Liu was her obstetrician. Dr. Liu was sued for malpractice by Ling-Nie's surviving spouse and her two young sons, Appellants/Judgment Creditors Yuanda Hong, William Hong, and Harry Hong. Appellants prevailed, and a California state court entered a multimillion-dollar judgment against Dr. Liu and the hospital where Harry was born. A jury awarded Appellants $9,700,000, consisting of $9,100,000 in economic damages and $600,000 in non-economic damages; the jury apportioned liability as 75% to the hospital and 25% to Dr. Liu. As to the $9,100,000 in economic damages, after taking into account the hospital's pretrial settlement of $3,250,000, and allocating all the remaining economic damages to Dr. Liu by virtue of joint and several liabilities, Dr. Liu's liability to Appellants for economic damages was calculated at approximately $5,900,000. After application of the $250,000 statutory cap on non-economic damages set forth in California Civil Code section 3333 and apportioning those non-economic damages, Dr. Liu's liability for non-economic damages was calculated at $62,500. The court also awarded $35,000 in costs and post-judgment interest beginning Nov. 3, 2015. This judgment was asserted as a claim against Dr. Liu's Chapter 11 bankruptcy estate. Only two other claims were made, and those were for miniscule amounts in comparison to the malpractice judgment. The Chapter 11 petition was pending before the Bankruptcy Court for approximately two-and-a-half years. Three separate sets of counsel were awarded fees and costs, and different issues arise on appeal as to each of the three. Counsel David A. Kay represented Dr. Liu in his unsuccessful appeal of the malpractice judgment. Counsel David Rosenberg and the firm Rosenberg, Shpall and Zeigen represented Dr. Liu in his successful quest to maintain his medical license in the face of the malpractice judgment. Finally, the law firm of Smiley, Wang-Ekvall, LLP ("SWE"), represented Dr. Liu as his general bankruptcy counsel. On Oct. 16, 2019, and after rejecting five plans of confirmation proposed by Dr. Liu, the Bankruptcy Court confirmed a plan proposed by the Judgment Creditors. A month later, the Bankruptcy Court awarded attorney fees totaling $914,325.75, to be paid from the estate. Appellants challenged the fee award as compensating services not reasonably likely to benefit the debtor's estate. By awarding fees in pursuit of the appeal of the malpractice judgment, the Bankruptcy Court impliedly found that the appeal was likely to benefit the estate and that Attorney Kay exercised reasonable billing judgment. According to Judge Staton, the Bankruptcy Court correctly noted that a successful appeal would have benefitted the creditors other than Appellants in that, in light of the assets of the estate, those creditors' recovery rate would have been 100%. The question currently before the Court is whether the Bankruptcy Court abused its discretion in its implicit finding that the appeal was likely to benefit the estate and that Attorney Kay exercised reasonable billing judgment. On the one hand, viewed objectively, the chance of a successful appeal was very low. According to Judge Staton, the trial court's corrections to the amount of judgment were characterized as corrections meant to remedy clerical errors, which are permissible, even where an appeal is pending. Indeed, there was no alteration to the jury's verdict, only clarifications by the trial court as to the amount of judgment enforceable against Dr. Liu, as calculated by operation of California law. Thus, the appeal was ultimately unsuccessful. On the other hand, a successful appeal would yield a big payoff, adding more than $6,000,000 to the value of the estate. All other things being equal, the bigger the potential payoff, the more reasonable it is to expend fees in pursuit of that payoff. Thus, viewed in this context, Judge Staton found no abuse of discretion in the award of fees for services incurred in Attorney Kay's pursuit of the appeal, at least up to a certain point. The Court identified that point as the decision to pursue a petition for rehearing, which had a near-zero chance of success. Appellants also argued no fees should be awarded because Attorney Kay entered into an unlawful fee-sharing agreement with another attorney who was awarded fees in this case. This fee was disclosed to the Bankruptcy Court in the Debtor in Possession's Application to Employ David A. Kay as Special Counsel. Specifically, the Application to Employ, filed by Lei Lei Ekvall and Robert S. Marticello of SWE, disclosed Attorney Kay's terms of employment as including a referral fee to David Rosenberg: "4. Referral Fee. The terms of Mr. Kay's employment include a referral fee to David Rosenberg of 15% of all sums paid for attorneys' fees." According to Judge Staton, the unlawful nature of the fee-sharing agreement could not be any clearer: Fees by attorneys that are subject to approval by the Bankruptcy Court may not be subject to a fee-sharing agreement. Subject to exceptions not implicated here, the Bankruptcy Code prohibits "a person receiving compensation or reimbursement under section 503(b)(2)" (which incorporates by reference section 330) from "shar[ing] or agree[ing] to share" the "compensation or reimbursement with another person." Both the payment of and receipt of shared fees are prohibited, as are any agreements to pay them or receive them. Therefore, Judge Staton said it was unlawful for Attorney Kay to agree to share fees with Attorney Rosenberg, and it was unlawful for Attorney Rosenberg to agree to receive them. This arrangement was not excused or otherwise made lawful or acceptable because it was disclosed in the Application to Employ filed with the Bankruptcy Court, or by the Bankruptcy Court's approval of Attorney Kay's employment. At the hearing, the Bankruptcy Court said its reduction to the fees awarded to Attorney Kay in the "arbitrary" amount of $9,000 was to "make a point regarding" the unlawful fee-sharing arrangement. Given the clearly unlawful nature of this fee-sharing arrangement, Judge Staton said a failure to disallow at least 15% of the entire fee award -- the amount subject to the unlawful fee-sharing agreement -- was an abuse of discretion. Therefore, the Court affirmed in part and vacated in part the fee award as to Attorney Kay. The Court held that the award of fees in excess of $73,060.69 was an abuse of discretion. A full-text copy of the Court's Order is available at https://cutt.ly/6ghEb6W from Leagle.com. Long-Dei Liu sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 16-11588) on April 13, 2016. LST EXPRESS: Combined Plan & Disclosures Approved by Judge ---------------------------------------------------------- Judge Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, has entered an order confirming the Combined Disclosure Statement and Chapter 11 Plan of Reorganization of debtor LST Express Inc. BMO Harris Bank N.A. will be treated per the Consent Order Denying Relief from Stay and Granting Adequate Protection Payments and the BMO Order shall control the relationship between the parties. The Debtor-In-Possession is also ordered to continue paying quarterly U.S. Trustee fees until such time as the case is converted, closed, dismissed, discharged, or a final decree is entered. A full-text copy of the Plan Confirmation Order dated September 1, 2020, is available at https://tinyurl.com/y4nrvdfn from PacerMonitor.com at no charge. The Debtor is represented by: Law Offices of Jason A. Burgess 1855 Mayport Road Atlantic Beach, Florida 32233 Tel: (904) 372-4791 About LST Express Inc. Based in Jacksonville, Florida, LST Express Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-01326) on April 21, 2020, listing under $1 million in both assets and liabilities. Jason A. Burgess, Esq., at THE LAW OFFICES OF JASON A. BURGESS, LLC, represents the Debtor. LTC HOLDINGS: Insurer Loses Appeal Over Tax Refund Claim -------------------------------------------------------- The case captioned INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Appellant, v. ALFRED THOMAS GIULIANO, TRUSTEE and BMO HARRIS BANK, N.A., Appellees, C.A. No. 19-327 (MN) (D. Del.) is an appeal by Insurance Company of the State of Pennsylvania of the Bankruptcy Court's Feb. 4, 2019 decision in In re LTC Holdings, 597 B.R. 565 (Bankr. D. Del. 2019) and accompanying Order entered in the chapter 7 cases of LTC Holdings, Inc. and subsidiaries LTCCORP Government Services-MI, Inc., f/k/a Lakeshore Engineering Services, Inc. and LTCCORP Government Services-OH, Inc. f/k/a Toltest, Inc. By the Summary Judgment Order, Chief Bankruptcy Judge Christopher S. Sontchi denied ICSP's summary judgment motion and granted a summary judgment motion filed by the Debtors' secured creditor BMO Harris Bank, N.A. The Summary Judgment Order resolved a dispute over the Debtors' $5.5 million tax refund and awarded the tax refund to BMO based on (1) BMO's first priority security interest in the tax refund; and (2) a determination that the competing subrogation rights of appellant ICSP derived solely from the setoff rights of the United States, which had been previously released in a court-approved settlement between the United States and the Debtors. Upon review, District Judge Maryellen Noreika affirmed the Summary Judgment Order. Prior to the chapter 7 filing, the Debtors provided general contracting services for large construction projects, both domestic and international, with a primary focus on constructing facilities for various branches of the United States military, with arms of the United States government acting as the owner/contracting party. For some of the United States Contracts, the Debtors were required to post performance and payment bonds, signed by a qualified surety, guaranteeing that the Debtors would perform their contracts with the United States and pay their subcontractors. The Debtors obtained certain performance bonds and payment bonds from ICSP, as surety. As the Bankruptcy Court noted, two of the United States Contracts on which ICSP acted as surety were the National Police Command Center in Afghanistan and the Al Dhafra air base in the United Arab Emirates. LTC Holdings, 597 B.R. at 568-69. Prior to the Petition Date, BMO extended credit to the Debtors, and the Debtors granted to BMO liens on and security interests in substantially all their personal property. Shortly before the Petition Date, the Debtors filed a consolidated tax return for tax year 2013, showing a net operating loss of $28 million for the 2013 tax year ("2013 NOL"). By separate application to the IRS, the Debtors sought to "carryback" the 2013 NOL to 2011 and obtain a refund of $5,628,542 in income taxes previously paid for tax year 2011. In response to the Tax Refund Application, the United States claimed setoffs against the Tax Refund based on damages that the United States asserted were due from the Debtors under certain government contracts. The United States therefore placed an administrative hold on the Tax Refund. The Chapter 7 Trustee negotiated a settlement with the United States, memorialized in a stipulation dated January 12, 2016 between the Trustee and the United States, under which (among other terms) the United States would release the Tax Refund to the Trustee in exchange for the Trustee releasing the Debtors' contract claims against the United States (so-called "REAs" -- Requests for Equitable Adjustment). In testimony given in support of the Tax Refund Settlement Motion, the Trustee testified that the REAs being released had a face value of approximately $51 million. As part of the settlement, the Trustee also agreed to the allowance of the United States' amended proof of claim. On Nov. 6, 2015, the Trustee commenced an adversary proceeding by filing a complaint against ICSP. The complaint alleged claims against ICSP for avoidance of preferential and fraudulent transfers. On July 7, 2016, the Trustee filed an amended complaint. On July 29, 2016, the Trustee commenced a second adversary proceeding against ICSP, seeking a declaratory judgment that the Debtors' estates, not ICSP, were entitled to the Tax Refund. On Sept. 8, 2016, ICSP filed its answer to the amended complaint. ICSP filed its answer to the Amended Complaint in the first adversary proceeding. ICSP filed a counterclaim against the Trustee and joined BMO as an additional counterclaim defendant. ICSP sought a declaratory judgment that ICSP, not the Debtors' estates or BMO, was entitled to the Tax Refund. After discovery, on Dec. 28, 2017, ICSP moved for summary judgment. The ICSP Summary Judgment Motion asked the Bankruptcy Court to grant partial summary judgment and award the Tax Refund to ICSP pursuant to principles of equitable subrogation. ICSP attached exhibits intended to satisfy the "mutuality" requirement of setoff by establishing that (i) the Tax Refund related to $5,628,830 in corporate income taxes paid solely by LTC Holdings from its own funds (as opposed to funds belonging to any of the other Debtors), and (ii) ICSP, as subrogee of the United States, was entitled to setoff ICSP's losses from LTC Holdings' breach of the NPCC Contract against the escrowed Tax Refund. On Dec. 29, 2017, BMO filed its own summary judgment motion requesting that the Bankruptcy Court grant partial summary judgment in its favor on Count I of the Counterclaim filed by ICSP and award the Tax Refund to BMO. On Feb. 4, 2019, the Bankruptcy Court issued the Opinion and Summary Judgment Order. The Bankruptcy Court denied ICSP Summary Judgment Motion based on its conclusion that ICSP's argument, which depended on the asserted premise that Debtor LTC Holdings "owned" the Tax Refund because LTC Holdings purportedly made the tax payments which gave rise to the Tax Refund, presented disputed issues of material fact. After evaluating Appellant ICSP's arguments, as well as Appellee's BMO's competing arguments that the payments were actually made by or on behalf of Debtor LES, Bankruptcy Judge Sontchi stated, "To make a long story short, the issue of whose money was used for the tax payment is fraught with minutia, complexity, and ambiguity." The Bankruptcy Court found no similar obstacles with respect to the BMO Summary Judgment Motion. The facts were undisputed that, at the time the Tax Refund Settlement Order was entered, the United States had unsatisfied claims resulting from the NPCC and Al Dhafra contracts because ICSP had not completed its work on those contracts under its performance bonds. In entering judgment in favor of BMO, the Bankruptcy Court concluded that because the United States retained those claims, and because sec. 509 of the Bankruptcy Code subordinated ICSP's derivative subrogation claims until the United States was paid in full, the United States was entitled to release and did release its claims in the Tax Refund Stipulation. Once the claims of the United States were released, Appellant ICSP's derivative subrogation claims -- the only basis for asserting an interest in the Tax Refund -- were extinguished. On Feb. 14, 2019, ICSP appealed the Summary Judgment Order. ICSP argues that the reservation of rights language added to the Tax Refund Settlement Order requires reversal of the Summary Judgment Order. According to ICSP, "the Stipulation was made subject to, and qualified by the negotiated and unambiguous terms of the [Tax Refund Settlement] Order," which provided that "nothing in this Order or the Stipulation shall waive, estop, or otherwise limit the right of any party claiming an interest in the Tax Refund." Thus, according to ICSP, the Bankruptcy Court's holding is precluded by the plain terms of the Tax Refund Settlement Order. Second, ICSP argues that the Bankruptcy Court misapplied sec. 509 of the Bankruptcy Code, and that the Second Circuit's decision in In re Chateaugay Corp., 94 F.3d 772 (2d Cir. 1996) supports ICSP's argument that its subrogation claims were not subordinated when the Tax Refund Settlement Order was entered, as the United States was then effectively "paid in full." Finally, ICSP argues that the Bankruptcy Court improperly declined to make factual findings based on uncontested evidence that the Tax Refund related to amounts paid exclusively by LTC Holdings from its own funds, and that the ICSP Summary Judgment Motion should have been granted. According to Judge Noreika, the Reservation of Rights did not guarantee or preserve ICSP's subrogation rights because it did not stop the Tax Refund Stipulation from being consummated -- indeed, the Bankruptcy Court's entry of the Tax Refund Settlement Order accomplished just the opposite result. The approved Tax Refund Stipulation has been consummated, as: (1) the setoff release took effect -- evidenced by the payment of the Tax Refund to the Trustee (to be held in escrow); (2) the Debtors dismissed their litigation claims against the United States with prejudice; and (3) the Tax Refund Settlement Order allowed the DOD Claim in the amount of $170,668,300.33. The Reservation of Rights had the effect of "reserv[ing] any and all rights and arguments [ICSP] had" if -- any -- "regarding the ownership of, or [its] interest in [the] Tax Refund prior to the entry of this Order." Contrary to ICSP's "gotcha" argument, the Reservation of Rights did not acknowledge or preserve ICSP's subrogation rights. When the Tax Refund Stipulation was consummated, ICSP's derivative setoff rights were extinguished because the United States released its setoff rights. Judge Noreika explained the Reservation of Rights does not support an interpretation that the settlement approved by the Tax Refund Settlement Order was somehow placed into escrow, pending the outcome of the dispute. Once the Tax Refund Settlement Order was entered, the Trustee and the United States consummated the settlement. The United States' release of its set-off rights against the Tax Refund became effective. A copy of the Court's Memorandum Opinion is available at https://bit.ly/359ZDud from Leagle.com. LTC Holdings filed for Chapter 7 bankruptcy protection on May 2, 2014. Prior to the chapter 7 filing, the Debtors provided general contracting services for large construction projects, both domestic and international, with a primary focus on constructing facilities for various branches of the United States military, with arms of the United States government acting as the owner/contracting party. LX AVENUE: U.S. Trustee Says Disclosures Inadequate --------------------------------------------------- William K. Harrington, the United States Trustee for Region 2 (the "United States Trustee"), respectfully submitted an objection to the approval of the Disclosure Statement relating to the Chapter 11 Plan of LX Avenue Bagels Inc., Tal on 1st Inc. and Amir Ram Bagels Inc. (the "Debtors"). The United States Trustee asserts that the Debtors have not sought court approval to obtain postpetition financing. The United States Trustee points out that a disclosure statement must include sufficient information to apprise creditors of the risks and financial consequences of the proposed plan. The United States Trustee further points out that the Disclosure Statement does not provide sufficient disclosures appropriate to the circumstances of this case, and approval of the adequacy of the Disclosure Statement should be denied until the Debtors amend the Disclosure Statement and Plan to provide adequate information, and obtain Court approval for the post-petition PPP and EIDL Loans. About LX Avenue LX Avenue Bagels, Inc., operates a bagel store located at 1228 Lexington Avenue, New York, NY 10025, Amir Ram Bagels Inc., operates a bagel store located at 1228 Lexington, New York, NY, and Tal on 1st Inc., operates a bagel store located at 333 East 86th Street, New York, NY. LX Avenue filed Chapter 11 Petition (Bankr. E.D.N.Y. Case No. 19-46769) on Nov. 8, 2019. Lawrence Morrison, Esq. of MORRISON TENENBAUM, PLLC, is the Debtors' Counsel. LX AVENUE: Unsecureds to be Paid in Full With Interest in Plan -------------------------------------------------------------- Debtors LX Avenue Bagels, Inc., Amir Ram Bagels Inc., and Tal on 1st Inc. filed with the U.S. Bankruptcy Court for the Eastern District of New York a Joint Plan of Reorganization and a corresponding Disclosure Statement. The insiders of the Debtor are Mohammed Kamal who is the President and 100% owner of LX Avenue and a 50% owner of Tal on 1st and Imanuel Halon who is the 100% owner of Amir Ram and a 50% owner of Tal on 1st. Both insiders work full time at the Debtor's restaurant. All general unsecured claims filed in the LX Avenue case will be paid in full on the effective date plus interest at the rate of 1.58%. The general unsecured claim of JPMorgan Chase Bank, N.A. in the amount of $52,571 filed in the Amir Ram case will be paid in full, with interest, pursuant to the loan documents. The creditor will receive monthly payments of $1,474.52 through April 2, 2023. All general unsecured claims filed in the Tal on 1st case will be paid in full on the effective date plus interest at the rate of 1.58%. Filed claims of the Islam Action plaintiffs will be paid as agreed pursuant to the settlement between the Islam Action plaintiffs and the Debtors. Approval of the settlement is a condition to the plan becoming effective. The Debtors will file a Rule 9019 motion to seek approval of the settlement returnable on or before the confirmation hearing. Equity interest holders will retain their interests. Payments and distributions under the Plan will be funded from cash on hand of the Debtors. Pursuant to the July operating reports, LX Avenue has cash on hand of $752,635.44, Amir Ram has cash on hand of $769,486.70, and Tal on 1st has cash on hand of $158,577.61. A full-text copy of the Disclosure Statement dated September 3, 2020, is available at https://tinyurl.com/y6jarrc3 from PacerMonitor at no charge. Attorneys for the Debtors: LAWRENCE F. MORRISON BRIAN J. HUFNAGEL MORRISON TENENBAUM PLLC 87 Walker Street, Floor 2 New York, New York 10013 Telephone: (212) 620-0938 Facsimile: (646)390-5095 About LX Avenue LX Avenue Bagels, Inc., operates a bagel store located at 1228 Lexington Avenue, New York, NY 10025, Amir Ram Bagels Inc., operates a bagel store located at 1228 Lexington, New York, NY, and Tal on 1st Inc., operates a bagel store located at 333 East 86th Street, New York, NY. LX Avenue filed Chapter 11 Petition (Bankr. E.D.N.Y. Case No. 19-46769) on Nov. 8, 2019. Lawrence Morrison, Esq. of MORRISON TENENBAUM, PLLC, is the Debtors' Counsel. MAGNUS INDUSTRIES: Taps Fellers Snider as Legal Counsel ------------------------------------------------------- Magnus Industries, LLC received approval from the U.S. Bankruptcy Court for Western District of Oklahoma to hire Fellers Snider, A Professional Corporation, as its legal counsel. The professional services the firm will render are: (a) give Debtor legal advice with respect to its powers and duties as debtor-in-possession in the continuing operation of its business and management of their property; (b) prepare on behalf of Debtor as debtor-in-possession all necessary applications, answers, orders, pleadings, reports and other legal papers; and (c) perform all other legal services for Debtor as debtor-in-possession which may be necessary. Stephen Moriarty, Esq., the firm's attorney who will be handling the case, charges an hourly fee of $420. The firm's attorneys do not have connection with creditors or any other party adverse to the interest of the Debtor and its bankruptcy estate, according to court filings. The firm can be reached at: Stephen J. Moriarty, Esq. Fellers, Snider, Blankenship, Bailey & Tippens, P.C. 100 N. Broadway, Suite 1700 Oklahoma City, OK 73102 Tel: (405) 232-0621 Fax: (405) 232-9659 Email: smoriarty@fellerssnider.com About Magnus Industries, LLC Magnus Industries, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No. 20-13301) on Oct. 6, 2020, listing under $1 million in both assets and liabilities. Stephen J. Moriarty, Esq., at Fellers, Snider, Blankenship, Bailey & Tippens, P.C. serves as the Debtor's legal counsel. MALLINCKRODT PLC: Shareholders Ask Court to Appoint Equity Panel ---------------------------------------------------------------- Mallinckrodt plc's shareholders have urged the U.S. Bankruptcy Court for the District of Delaware to direct the Office of the U.S. Trustee to appoint a committee that will represent equity holders in the company's Chapter 11 case. The shareholders, which include Arun Kumar, Shachar Rachmani, Robin Dimentel and Christopher Wooten, expressed concern that the company's management "isn't acting in good faith and even abuses the voluntary bankruptcy process." The shareholders criticized Mallinckrodt's recovery plan, which proposes to void all existing shares while providing the management 10 percent of the new share capital of the restructured company. "The requested plan is actually being done on the back of existing shareholders from the general public who supposed to lose all their holdings, some a result of lifesaving, thus the shareholders will be disproportionately and unfairly harmed by the plan," the shareholders said in court papers. About Mallinckdrodt Mallinckrodt is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor more information. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware in the U.S. (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors have tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. MARC L. JORDAN: Court Orders Former Client to Turn Over $12,500 --------------------------------------------------------------- In the bankruptcy case captioned IN RE: MARC L. JORDAN, Chapter 11, Debtor, Case No. 3:19-bk-0725-JAF (Bankr. M.D. Fla.), Bankruptcy Judge Jerry A. Funk ordered that once the proceeds are obtained, Jonny Tillery's counsel must take $12,500 from the settlement proceeds and turn over that amount to Debtor Marc L. Jordan. Tillery's obligation to pay $12,500 to the Debtor remains outstanding irrespective of Tillery's net recovery from an insurer. In March 2019, the Debtor, a licensed attorney, filed a voluntary petition under Chapter 11 of the Bankruptcy Code. In 2015, the Debtor represented Tillery in a personal injury lawsuit pursuant to a contingency-fee arrangement. The Debtor negotiated a $50,000 settlement on behalf of Tillery. Pursuant to the contingency-fee agreement, the Debtor was entitled to received 25% of the settlement, or $12,500. On Oct. 31, 2019, the Court entered an order directing Tillery to turn over $12,500 as property of the estate. The Court intended for the $12,500 to come from the settlement proceeds because the amount owed was based on the gross recovery in the personal-injury lawsuit. The settlement proceeds were to be paid by Progressive Insurance Company. However, Progressive has withheld the settlement proceeds due to outstanding Medicare claims in the amount of $65,000. The Court found it unlikely that all of the Medicare claims are related to the accident that was the subject of the personal injury suit. Progressive refused to disburse the proceeds until a Medicare release is obtained. The Debtor asked that Tillery be held in contempt for his failure to comply with the Turnover Order. The Debtor argued the claims can be "negotiated down" and that Tillery is trying to delay compliance. Tillery argued he is unable to comply due to Progressive's refusal to disburse the settlement proceeds. According to Judge Funk, Medicare generally will not make a "final" demand until after a settlement (or other right to payment, such as a judgment) has been reached between the tortfeasor and the injured party. Further, Medicare only retains a lien on proceeds for Medicare claims related to the accident covered by the subject settlement/judgment. Most importantly, "federal law does not mandate that a primary payer (or insurer) make payment directly to Medicare; however, an insurer may be liable to Medicare if the beneficiary/payee does not reimburse Medicare for any amounts owed to Medicare within sixty days." Thus, primary payers such as Progressive will sometimes refuse to disburse liability settlement proceeds until a Medicare release has been obtained. Other insurers may release settlement proceeds in exchange for an agreement from the injured party and the injured party's law firm to hold the insurer harmless against any Medicare actions filed against the insurer. However, refusal to rely on a hold-harmless promise is certainly permissible and reasonable. Judge Funk said it is reasonable for Progressive to refuse to disburse the settlement proceeds until Tillery's Medicare claims related to the subject accident are paid and released. The problem is that the Debtor, as Tillery's representative in the personal injury action, would normally identify which conditional payments made by Medicare are related to the subject occurrence. In so doing, the Debtor would ensure that Medicare received only the portion of the settlement proceeds to which it was actually entitled. This would simultaneously maximize Tillery's net recovery and ensure that the Debtor received the compensation to which he was entitled for his representation of Tillery. However, under the present circumstances, the Debtor is adverse to Tillery, and the Debtor has been cut out of the Medicare lien negotiation/payment process. This fact creates a precarious situation, the judge said. Judge Funk further stated it is not clear if Tillery (and his current counsel) have received a final demand letter from Medicare. If Tillery has not begun the process of obtaining a final demand, he is woefully behind in the process. Tillery (and his counsel) shall endeavor to obtain a final demand from Medicare immediately. Tillery shall ensure that only conditional payments related to the subject accident are included therein. Once a final demand is received, Tillery shall pay that demand in accordance with applicable law and obtain a release from Medicare that will allow Progressive to disburse the settlement proceeds to Tillery's counsel. A copy of the Court's Findings is available at https://bit.ly/310t2WD from Leagle.com. Marc L. Jordan filed for chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 19-00725) on March 1, 2019. MARIANINA OIL: Taps Bilotta & Santoli as Accountant --------------------------------------------------- Marianina Oil Corp. received approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Bilotta & Santoli, CPA's PC as its accountant. Marianina Oil requires Bilotta & Santoli to: a. prepare financial statements and other reports as may be required by the Court or under the United States Trustee Guidelines; b. prepare tax returns; c. consult and advise the Debtor with respect to its historical and ongoing business affairs and operations; and d. provide other professional accounting services as may be required by the Debtor in order to comply with the requirements of the Court, the US Trustee and the Bankruptcy Code. Bilotta & Santoli's hourly rates are as follows: Partners $275 Managers $200 Senior Accountants $150 Administrative $125 Bilotta & Santoli is a disinterested person within the meaning of 11 U.S.C. Section 101(14), according to court filings. The firm can be reached through: Lorenzo Santoli, CPA Bilotta & Santoli CPAs, PC 185 Halstead Ave. Harrison, NY 10528 Phone: +1 914-835-4542 About Marianina Oil Corp. Marianina Oil Corp. is engaged in activities related to real estate. The company is the owner of fee simple title to a property located at 34 East Post Road, White Plains, NY 10601, valued at $1.6 million. Marianina Oil Corp. filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-23070) on Sept. 23, 2020. In the petition signed by Frank Codella, president, the Debtor disclosed total assets of $1,600,000 and total liabilities of $14,215,000 as of the filing. The Hon. Robert D. Drain is the case judge. Davidoff Hutcher & Citron LLP, led by Robert L. Rattet, Esq., is the Debtor's legal counsel MARTIN DEVELOPMENT: Seeks to Hire Caputo & Company as Accountant ---------------------------------------------------------------- Martin Development, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Caputo & Company, P.C. as their accountant. The firm will render the following services: a. review the Debtors' 2018 and 2019 business records and bank statements and prepare accounting of the same; and b. prepare the Debtors' 2018 and 2019 federal and Massachusetts income tax returns. The firm will be paid a flat fee of $5,000 for each year's tax returns. As of the petition date, the Debtors owed Caputo & Company the sum of $9,225. The firm's claim against the Debtors shall be treated as a general unsecured claim in the bankruptcy cases. Caputo & Company neither holds nor represents any interest adverse to the Debtors or their estates, according to a court filing. The firm can be reached through: Michael Caputo, CPA Caputo & Company, P.C. 99 Conifer Hill Dr., Ste. 202 Danvers, MA 01923 Telephone: (978) 750-1001 Facsimile: (978) 750-0111 About Martin Development, LLC Martin Development, LLC is a freight shipping broker based in North Andover, Mass. On September 23, 2020 Martin Development and its affiliates filed voluntary Chapter 11 petitions (Bankr. D. Mass. Lead Case No. 20-40935). The petitions were signed by David M. Martin, manager. At the time of the filings, Martin Development had estimated assets of between $1 million and $10 million and liabilities of the same range. Judge Elizabeth D. Katz oversees the case. Debtors are represented by Parker & Lipton. MEDICAL SIMULATION: H. Winklemann Removed as Committee Member ------------------------------------------------------------- The Office of the U.S. Trustee on Nov. 3 announced in a court filing that Herb von Winklemann is no longer a member of the official committee of unsecured creditors in the Chapter 11 case of Medical Simulation Corporation. Mr. Winklemann was removed as committee member after he withdrew his claim against the company. William Younkes and Brett Enlow are the remaining members of the unsecured creditors' committee as of Nov. 3. About Medical Simulation Corp. Medical Simulation Corp., a manufacturer of medical equipment and supplies, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-20101) on Nov. 22, 2019. At the time of the filing, the Debtor had estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. Judge Elizabeth E. Brown oversees the case. Shapiro Bieging Barber Otteson, LLP serve as the Debtor's legal counsel. MOHAMMAD ZAMAN: Creditors May Pursue State Court Action ------------------------------------------------------- Bankruptcy Judge Mindy A. Mora granted in part and denied in part the Motion for Leave to Proceed with Action Against Debtors Mohammad M. Zaman and Nasrin M. Khan based on Post-Petition Dealer Supply Agreement, Lease Agreement and Guarantees of Debtors, filed by Power Petroleum Inc. and M & A Brothers Realty No. 3. The creditors filed their request on May 11, 2019. The Creditors' request for relief came on the heels of an unrelated request by Wells Fargo Bank, N.A. to reopen Debtors Mohammad M. Zaman and Nasrin M. Khan's bankruptcy case, which had been administratively closed for a little over 15 months pending substantial consummation of a confirmed chapter 11 plan. Although the Debtors were able to come to an agreement with Wells Fargo that prevented litigation, they were not so fortunate with the Creditors. The Creditors represented to the Court that (i) they had received inadequate notice of the filing of the Bankruptcy Case, (ii) Debtor Zaman personally guaranteed post-petition agreements for his wholly-owned business entity, Nasrin Oil Corporation ("NOC"), and (iii) Debtor Zaman remained liable for his guarantee of NOC's obligations. Debtors Zaman and Khan are husband and wife. Prior to their bankruptcy filing, the Debtors operated a gas station and convenience store. The physical location of the Station is unclear from the record, but the Debtors' schedules and statements indicate that it provided Debtors' family with its primary source of income for many years. On May 19, 2013, the Debtors jointly filed the Bankruptcy Case, initially disclosing assets of less than $50,000 and obligations of over $1,000,000.The Debtors' schedules reveal that the majority of these obligations related to mortgage debts on two parcels of real property. The Debtors ultimately resolved these obligations either through their confirmed chapter 11 plan or by separate agreement. The Debtors' Bankruptcy Case progressed slowly, taking over three years to arrive at the effective date of the Plan. Although at least some of the delay was likely attributable to causes other than the Debtors, the record reflects a case that generally failed to proceed in a timely manner, compared to other similarly situated individual chapter 11 cases. During this time, other entities owned by or otherwise related to the Debtors filed their own bankruptcy cases. Schedule B of the Debtors' amended schedules lists ownership interests in five business entities: NOC, MN Corporation of US ("MNC"), HNA Corporation, Maha and Ali, Inc., and Ambia Corporation. Two of those entities were also debtors before this Court in their own bankruptcy cases. MNC filed for chapter 11 relief in 2015 (the "MNC Case") approximately two years after the date on which Debtors filed their 2013 individual Bankruptcy Case. NOC filed bankruptcy in 2017, roughly two years after MNC filed (the "NOC Case"). The dockets of the MNC and NOC Cases indicate the Debtors operated gas stations at two locations. The first station, located at 5050 Lake Worth Road, Lake Worth, FL 33463 was operated by MNC. MNC's schedules list a fuel supply agreement with Crystal Petroleum for fuel that was sold at the Lake Worth Station. MNC owned the property for the Lake Worth Station in fee simple but granted Crystal a second mortgage, presumably as collateral for obligations arising out of the FSA. Debtor Zaman testified at an evidentiary hearing on the Motion that Andrew Hrenick owned Crystal. During their 2013 Bankruptcy Case, the Debtors, through NOC, began operating a gas station at 3067 Jog Road, Greenacres, FL 33060. Exactly one week after MNC filed its bankruptcy petition, NOC entered into a lease dated as of April 1, 2015 for the Jog Road Station with Coral Petroleum, Inc. Hrenick, Crystal's owner, was also the president of Coral and executed the Lease for the Jog Road Station in that capacity. Debtor Zaman executed the Lease on behalf of NOC and personally guaranteed NOC's obligations. That same day, April 1, 2015, NOC entered into a dealer supply agreement (the "DSA") with Power Petroleum, Inc. for fuel to be sold at the Jog Road Station. Mike Shehadeh, president of PPI, executed the DSA in that capacity. Debtor Zaman executed the DSA on behalf of NOC and personally guaranteed NOC's obligation under the DSA in favor of PPI, in addition to his guarantee of the Lease with Coral. The docket in the Bankruptcy Case does not reflect that Debtor Zaman sought the Court's approval of either Guarantee. The Motion sought several forms of relief, some of which are contradictory. Because the Motion expresses the Creditors' desire to proceed with the State Court Case, the Court construed the Motion as a request for stay relief. In light of the Court's ruling, the Court declined to address the ancillary requests for "deemed approval" of the DSA and Lease as being in the "ordinary course of business" and for relief from any applicable statutes of limitations to proceed with an adversary proceeding. The primary issue in this dispute is one of adequate notice. "That is the 800-pound gorilla that neither party addressed in a clear fashion, but which must govern the Court's resolution of the Motion," the Court said. To make a very complicated issue quite simple, the Court was confronted with the issue of whether, without the Debtors having provided Creditors with actual notice of this Bankruptcy Case, the Creditors are bound by any documents filed within the case, including the Debtors' Plan and the confirmation order. The answer is "no," the Court said. The record clearly reflects the Creditors were active participants in the NOC Case. According to the Court, the record also shows a certain amount of overlap between the cast of characters involved in the various cases, including Hrenick and Shehadeh. "Debtor Zaman passionately testified that he only executed the Guarantees because he was forced to do so. This is troubling. However, Debtor Zaman also testified that he intentionally failed to disclose his (and Debtor Khan's) personal Bankruptcy Case when he executed the Guarantees because he was afraid of losing his livelihood. This is equally troubling. And, in yet another twist, Debtor Zaman also testified that he was convinced that Shehadeh absolutely knew of the Bankruptcy Case through his (allegedly many) dealings with Hrenick," the Court said. Shehadeh disputed Debtor Zaman's allegation that Hrenick had a personal or professional association with Shehadeh. Moreover, Shehadeh claimed categorically that no business relationship ever existed between Coral and M & A other than as assignor and assignee under the Assignment. Shehadeh's contention, in other words, is that Hrenick's knowledge of Debtors' Bankruptcy Case from the disclosure listed in MNC's chapter 11 case management summary could be imputed to Coral (which Hrenick also controlled), but not to Shehadeh or Creditors. And, simply put, therein lies the rub. It was Debtor Zaman's obligation to prove otherwise. Upon the facts presently in the record, the Court finds and determines that Debtor Zaman has failed to meet his burden of proof. In making this finding, the Court said it specifically declines to opine as to whether Shehadeh or the Creditors had actual knowledge of this Bankruptcy Case. "That fact, unfortunately, is as opaque as the history of the relationships between the parties. What the Court finds and determines is much simpler: Debtor Zaman did not present sufficient evidence to the Court to demonstrate that the Creditors definitively had knowledge of this Bankruptcy Case," the Court pointed out. As a result, the Court held the Creditors are not bound by entry of the Confirmation Order and may pursue litigation against Defendant Zaman in the State Court Case. Although the Court grants stay relief to proceed in that action, the Court cautioned the Creditors that the grant of stay relief should not be construed as a determination that Debtor Zaman remains liable on the Guarantees under applicable state law. The Court also declined to enforce (or find unenforceable) the terms of either agreement. "Those issues are properly before the State Court and should be determined within the State Court Action," the Court said. "What this Court has determined is that the Plan and Confirmation Order do not bar the prospective enforcement of the Guarantees, and that the Plan and Confirmation Order are not binding on Creditors with respect to (a) the injunction set forth in section 7.13 of the Plan, and (b) the executory contract provision set forth in section 6.01 of the Plan." A copy of the Court's Opinion and Order is available at https://bit.ly/36ZumwI from Leagle.com. Mohammad Zaman (Bankr. S.D. Fla. Case No. 13-21648) filed a Chapter 11 Petition on May 19, 2013. Mr. Zaman owned and managed several businesses involved primarily in the gas station ownership and operations business, including Hefaz Enterprises, Inc., a company previously in bankruptcy, as well as MN Corporation USA, Inc., a debtor in Chapter 11 case, Case No. 15-15416-PGH. The Debtor retained as counsel David Lloyd Merrill, Esq., at Merrill PA. MOORE TRUCKING: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee on Nov. 3, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Moore Trucking Inc. About Moore Trucking Inc. Moore Trucking Inc. filed a Chapter 11 bankruptcy petition (Bankr. S.D. W.Va. Case No. 20-20136) on March 31, 2020, disclosing under $1 million in both assets and liabilities. Judge Paul M. Black oversees the case. The Debtor is represented by James M. Pierson, Esq., at Pierson Legal Services. MOTORS LIQUIDATION: District Court Junks Kelly Harris Suit ---------------------------------------------------------- District Judge Thomas S. Zilly granted Defendant General Motors' motion to dismiss the case captioned KELLY HARRIS, individually and on behalf of all others similarly situated, Plaintiff, v. GENERAL MOTORS LLC, a Delaware limited liability company, Defendant, No. C20-257 TSZ (W.D. Wash.). Plaintiff Kelly Harris owned a used 2012 Chevrolet Silverado, which he received in 2012 from his former employer as part of a separation agreement. Harris' vehicle was equipped with a Generation IV 5.3 liter V8 Vortec 5300 LC9 engine. Harris' vehicle soon began to experience engine problems like fouled spark plugs which caused engine misfiring and as a result, in 2014, Harris' vehicle needed a spark plug replacement. In 2015, Harris became aware that oil consumption issues were the cause of the spark plug problems with his vehicle. On an unspecified date, Harris took his vehicle into a Chevrolet dealership to fix the issues with his vehicle's spark plug. Harris was informed that the vehicle was low on oil, had fouled spark plugs, and that the cause of the fouled spark plugs was excessive oil consumption due to an issue with the piston rings. The dealership also told Harris he would need to have his engine replaced. Harris alleges that the primary cause of the alleged excessive oil consumption is that the piston rings in the defective engines do not maintain sufficient tension to prevent oil from being consumed in the combustion chamber, which then fouls spark plugs and creates harmful carbon buildup in the pistons and cylinders. Harris further alleges that GM has been aware of the Oil Consumption Defect but failed to publicly disclose it. In support of this allegation, Harris cites GM's subsequent redesign of the defective engine, public consumer complaints regarding oil consumption problems in the defective engines, Old1 GM's knowledge, and technical service bulletins addressing the oil consumption problem. Harris alleges that the Oil Consumption Defect presents an unreasonable safety risk "to the driver, other passengers of the Class Vehicles, and the public" because the Defect could cause the engine to catch fire and because it could cause an accident or leave drivers and passengers stranded in a variety of unsafe situations. Harris alleges that he "would not have purchased" his vehicle or "would have paid less" for it had the alleged oil consumption defect been disclosed. On behalf of a nationwide class, Harris brings claims for violation of the Magnuson-Moss Warranty Act, 15 U.S.C. sections 2301, et seq. On behalf of a Washington class,3 Harris brings claims for violations of the Washington Consumer Protection Act ("CPA"), breach of express warranty, RCW section 62A.2-313 and 62A.2A-210 ("Count 3"), fraudulent omission ("Count 4"), and unjust enrichment ("Count 5"). Harris sought injunctive relief, as well as costs, restitution, pre and post-judgment interest, and damages, including punitive damages. In addressing some of Harris' claims, Judge Zilly held that Harris' fraudulent concealment claim attempts to force a square peg into a round hole. While Harris characterizes GM's concealment of the Oil Consumption Defect as fraud, the heart of Harris' claims arises out of tort, not contract. Harris' claims relate to exposure to a dangerous product condition that poses an unreasonable risk of harm. Harris' claim is essentially that GM knew about the Oil Consumption Defect, concealed that information from Harris and other putative class members, and that they suffered damages as a result. Washington Product Liability Act (WPLA) provides the exclusive remedy for such a claim. Judge Zilly, therefore, dismissed Harris' fraudulent concealment claim without prejudice to replead as a WPLA claim. Judge Zilly also held that A plaintiff seeking injunctive relief under the Washington Consumer Protection Act (CPA) must satisfy the constitutional standing requirements to sue for such relief, including allegation of a future injury. A plaintiff who lacks the prospect of individual future injury may not seek injunctive relief under the CPA. Harris alleged that he will suffer future injury because "GM never disclosed the Oil Consumption Defect and continues to actively conceal it." Harris is aware of the Oil Consumption Defect and its primary cause. Any future concealment of the Defect by GM cannot cause further injury to Harris. Harris, therefore, has not alleged a future injury. Judge Zilly, therefore, dismissed Harris' CPA claim without prejudice. Further, Judge Zilly stated that a party seeking to recover under a theory of unjust enrichment must show that the plaintiff conferred a benefit upon the defendant. Harris did not dispute that he neither purchased nor leased his vehicle, and he did not otherwise allege that he conferred a benefit upon GM. Instead, Harris responded by stating that courts in Washington have no such requirement. Harris is mistaken. Judge Zilly dismissed Harris' Unjust Enrichment Claim with prejudice. In sum, Judge Zilly granted the motion to dismiss as follows: Count 1 (Magnuson-Moss Warranty Act claim), Count 2 (injunctive relief portion of CPA claim only), Count 3 (breach of express warranty claim), and Count 5 (unjust enrichment claim) are dismissed with prejudice. Count 2 (CPA claim, except the injunctive relief portion) and Count 4 (fraudulent omission claim) are dismissed without prejudice. A copy of the Court's Order is available at https://bit.ly/34QhSEX from Leagle.com. About General Motors With its global headquarters in Detroit, Michigan, General Motors -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government provided financing. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM -- General Motors Corporation -- filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. The Debtors tapped Weil, Gotshal & Manges LLP, Jenner & Block LLP, and Honigman Miller Schwartz and Cohn LLP as counsel; and Morgan Stanley, Evercore Partners and the Blackstone Group LLP as financial advisor. Garden City Group served as claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31, 2011. On Dec. 15, 2011, Motors Liquidation was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. MPH ACQUISITION: Moody's Hikes Rating on 2023 1st Lien Loan to Ba3 ------------------------------------------------------------------ Moody's Investors Service took several actions on debt instruments of MPH Acquisition Holdings LLC's following the company's change in refinancing plans. All other ratings remain unaffected, including Multiplan's B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) that were assigned on October 20, 2020. The outlook is unchanged at stable. Reflecting the change in Multiplan's refinancing plans, Moody's upgraded to Ba3 from B1 the Senior Secured First Lien Term Loan due 2023 that will remain outstanding and assigned a Ba3 rating to the new Senior Secured First Lien Revolving Credit Facility due 2023. Separately, Moody's withdrew the ratings of the previously proposed debt instruments including the $450 million Senior Secured First Lien Revolving Credit Facility due 2025 and the $2.47 billion Senior Secured First Lien Term Loan due 2027. Moody's also withdrew the ratings on the $100 million Senior Secured First Lien Revolving Credit Facility due 2021, and the $1.56 billion Unsecured notes, which have now been refinanced. Rating Actions: Issuer: MPH Acquisition Holdings LLC Upgrade Senior Secured First Lien Term Loan due 2023 to Ba3 (LGD2) from B1 (LGD2) Assign Senior Secured First Lien Revolving Credit Facility due 2023 rating, at Ba3 (LGD2) Withdraw Senior Secured First Lien Revolving Credit Facility due 2021 rating, at B1 (LGD2) Withdraw Senior Secured First Lien Revolving Credit Facility due 2025 rating, at Ba3 (LGD2) Withdraw Senior Secured First Lien Term Loan rating due 2027, at Ba3 (LGD2) Withdraw Senior Global Notes due 2024, at Caa1 (LGD5) Outlook Actions: Issuer: MPH Acquisition Holdings LLC Outlook is unchanged at Stable RATINGS RATIONALE The B2 CFR reflects Multiplan's high financial leverage with pro forma debt/EBITDA of around 7.1x and the company's very high customer concentration, with around half of its revenue from two customers. The B2 is also constrained by the company's track record of aggressive financial policies including numerous debt-funded shareholder distributions. That said, Moody's expects a less aggressive financial policy going forward as Multiplan transitions to public ownership. Multiplan's rating is supported by the company's strong market position in the preferred provider organization (PPO) industry, robust operating margins, and solid free cash flow. The company also benefits from high barriers to entry in the PPO industry and switching costs for its analytics business. While the analytics and payment integrity businesses faced some headwinds in 2019, Moody's believes that they still have good growth prospects going forward though there are some near term revenue challenges due to the impact of the coronavirus outbreak. Moody's expects earnings growth in 2021 together with positive free cash flow to support deleveraging. The Speculative Grade Liquidity Rating of SGL-1 reflects the company's very good liquidity, as Moody's expects MultiPlan will generate ample positive free cash flow in 2020 and 2021. Further, liquidity is supported by access to a $450 million revolving credit facility expiring in 2023, which Moody's expects will remain largely undrawn, and no near-term debt maturities. The company had cash of $179 million at June 30, 2020. The stable outlook reflects Moody's expectation that the company will improve leverage primarily through earnings growth. Specifically, Moody's expects adjusted debt/EBITDA to decline towards 6.0x within 12-18 months of the transaction close. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be upgraded if the company demonstrates less aggressive financial policies and Moody's expects debt to EBITDA to be sustained below 5.5 times. Furthermore, an upgrade would require the company to maintain free cash flow to debt above 10%. The ratings could be downgraded if operating performance weakens, liquidity deteriorates, or if debt to EBITDA is sustained above 6.5x. Any material customer losses or pricing pressure could also result in a downgrade. Governance considerations are material to the rating action. The company's decision to become a public company represents a shift in governance philosophy, subjecting the company to greater financial regulatory oversight. MultiPlan has material exposure to social and regulatory risks, including legislation to curb surprise medical bills as well as proposals to adopt a single-payer that Moody's considers a long-term risk. Risks around these proposals represent a significant headwind for MultiPlan. Similarly, there is a risk that over time more health providers opt to be in-network, which will reduce the size of the business opportunity for MultiPlan's analytics business, which reprices out-of-network bills. Furthermore, the coronavirus pandemic has a negative impact on MultiPlan as its revenues have been adversely impacted by lower claims resulting from patients delaying medical appointments and elective procedures. MultiPlan operates in the healthcare benefits field as a provider of healthcare cost management solutions. Through its Network-Based Solutions (31% of total revenue LTM to June 2020), MultiPlan is one of the largest independent PPOs, providing networks of contracted healthcare providers for health plans to use. It also operates two other segments: Analytics Solutions (58%) and Payment Integrity Solutions (11%). For the analytics business, MultiPlan uses data and technology to determine a fair price for out of network claims. The company delivers savings to payors through contracted discounts with its providers. MultiPlan then applies that price to the claim or uses the information to negotiate the claim. Over 90% of the company's revenues are generated as a percentage of savings realized by their payor customers. MultiPlan is a public company and its largest shareholder is Hellman & Friedman. MultiPlan generates roughly $1 billion in revenue. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. NABORS INDUSTRIES: Reports $161 Million Net Loss for Third Quarter ------------------------------------------------------------------ Nabors Industries Ltd. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to common shareholders of $161.12 million on $437.61 million of total revenues and other income for the three months ended Sept. 30, 2020, compared to a net loss attributable to common shareholders of $123.24 million on $756.64 million of total 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 attributable to common shareholders of $708.36 million on $1.68 billion of total revenues and other income compared to a net loss attributable to common shareholders of $453.14 million on $2.34 billion of total revenues and other income for the same period during the prior year. As of Sept. 30, 2020, the Company had $5.82 billion in total assets, $4.02 billion in total liabilities, $438.48 million in redeemable noncontrolling interest in subsidiary, and $1.35 billion in total equity. Nabors said, "Through the date hereof we have been in compliance with all applicable covenants under the 2018 Revolving Credit Facility. However, the drilling and drilling related services environment ... and the impact it has had on our operations and cash flows, had made our ability to continue to comply with the leverage ratio covenant, had it not been amended or otherwise waived, increasingly uncertain if these conditions were to continue into 2021, and based on our forecasts in place as of the end of the second quarter of 2020, we believed it was possible that we would have been in violation of the leverage ratio covenant at some point in 2021. Failure to comply with this covenant, would have resulted in an event of default under the 2018 Revolving Credit Facility and the acceleration of the outstanding balance, which raised substantial doubt about the Company's ability to continue as a going concern throughout the twelve month period following the issuance of our prior quarter's financial statements as of and for the three and six months ended June 30, 2020." Free Cash Flow and Capital Discipline Capital expenditures were $39 million in the third quarter, and totaled $149 million for the first nine months of 2020. The Company expects capital expenditures of approximately $200 million for the full year. Free cash flow, defined as net cash provided by operating activities less net cash used by investing activities, as presented in the Company's cash flow statement, reached $9 million in the third quarter. These results include the impact of approximately $80 million in semiannual interest payments on senior notes during the third quarter. In September, the Company redeemed $139 million of its 5.00% notes at maturity. Total debt increased by $14 million during the third quarter and net debt, defined as total debt less cash, cash equivalents and short-term investments, declined by $6 million. Cash, cash equivalents and short-term investments closed at $514 million, a $20 million increase over the prior quarter. Subsequent to the end of the third quarter, the Company's indirect wholly owned subsidiary, Nabors Industries, Inc., completed a private transaction in which $115 million in principal amount of its 0.75% Senior Exchangeable Notes due 2024 were exchanged for approximately $50.5 million of new 6.5% Senior Priority Guaranteed Notes due 2025. William Restrepo, Nabors CFO, stated, "The third quarter environment continued to test the strength of our Company. Despite the challenges we face, there were many encouraging signs. Our team in the U.S. continued to deliver robust daily margins for the Lower 48 market and superior HSE performance, while maintaining our relative market share performance. We managed to conclude negotiations with several clients. This will allow us to resume collections of our receivables with these customers. Our activity overall has held up better than we thought, which resulted in strong adjusted EBITDA for the quarter. As promised, we once again delivered positive free cash flow, despite some deterioration in our DSOs and the semiannual interest payments on our notes . As a reminder, interest payments on our notes occur in the first and third quarters. "We reduced overhead costs beginning in the second quarter. We made further progress in the third quarter. G&A, R&E and field support expenses totaled $85.4 million, an improvement versus $89.1 million in the second quarter. We expect those costs to remain at a similar level in the fourth quarter. Our cost and capital discipline has helped us absorb the difficult market trends. "Although Lower 48 activity appears to have troughed, pricing remains weak. The International rig count continues to decline and our smaller segments are not pulling their weight. We expect our adjusted EBITDA to decrease materially in the fourth quarter and consequently will continue to focus on our costs and capital expenditures. Despite lower adjusted EBITDA, we anticipate free cash flow for the fourth quarter of approximately $90 million to $100 million. As we have done these past years, we will continue to use our free cash flow to reduce our debt levels." Mr. Petrello concluded, "While we remain focused on our financial goals, we are positioning the Company for the next upturn. "Digitalization, analytics and automation will be the enabling technologies in the future. These transformations are already underway, and Nabors continues to drive these innovations. "Our recently introduced RigCLOUD digital platform, which is already gaining momentum with multiple major clients, is the central element of our comprehensive digital strategy. Our near-term objective for this leading-edge technology is to expand its penetration into the full range of clients. Further development of this technology and additional scale will be keys to our success." "I would again like to thank our employees for their efforts and sacrifices in this trying environment. We owe our success to the hard work and dedication of the industry's best and safest workforce." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1163739/000155837020012577/nbr-20200930x10q.htm About Nabors Nabors (NYSE: NBR) owns and operates land-based drilling rig fleets and provides offshore platform rigs in the United States and several international markets. Nabors also provides directional drilling services, tubular services, performance software, and innovative technologies for its own rig fleet and those of third parties. Nabors reported a net loss attributable to common shareholders of $720.13 million for the year ended Dec. 31, 2019, compared to a net loss attributable to common shareholders of $653.25 million for the year ended Dec. 31, 2018. * * * As reported by the TCR on Nov. 3, 2020, Fitch Ratings 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. 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'. S&P said 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, the TCR reported on Nov. 3, 2020. NATIONAL MEDICAL: Court Junks Lyon Financial's Bid to Stay Appeal ----------------------------------------------------------------- The District Court of Appeals of Florida denied the motion of Appellee Lyon Financial Services, Inc. d/b/a U.S. Bank Portfolio Services to stay the case captioned National Medical Imaging, LLC, et al., Appellants, v. Lyon Financial Services, Inc., etc., Appellee, Case No. 3D20-730 (Fla. App.) because of bankruptcy petitions filed by appellants National Medical Imaging, LLC and National Medical Imaging Holding Company, LLC. The Appeals Court denied the motion to stay as they are bound by the Court's prior decision in Shop in the Grove, Ltd. v. Union Federal Savings & Loan Ass'n of Miami, 425 So.2d 1138 (Fla. 3d DCA 1982). Shop in the Grove holds that the automatic stay provision in 11 U.S.C. section 362(a)(1) is inapplicable in this Court where the debtor -- who is the defendant and who has filed for federal bankruptcy protection -- is the appellant. The rationale behind Shop in the Grove is simple enough: because the automatic stay acts as a shield, a debtor-defendant who seeks affirmative, appellate relief from the Court should be estopped from benefitting from the stay. Nevertheless, in the Court's view, Shop in the Grove's rationale disregards the plain language of section 362(a)(1) and causes unnecessary confusion and uncertainty. According to the Appeals Court, the federal bankruptcy code's automatic stay provision is clear: the debtor's filing of a bankruptcy petition stays any action or proceeding, including the "continuation" of an "action or proceeding against the debtor." When the debtor is a defendant in an action, it seems to the Court that the debtor-defendant's appeal of an adverse judgment in that action is plainly a "continuation" of a "proceeding" against the debtor-defendant. The Appeals Court also noted that Florida's other district courts of appeal have held that section 362(a)(1) applies when the debtor-defendant is either the appellant or the appellee, making Shop in the Grove an outlier. The Court did not have the benefit of the federal appellate courts' interpretations of the automatic stay provision when Shop in the Grove issued in 1982. Reasonable people can disagree on questions of statutory construction. The Court's isolated statutory interpretation of section 362(a)(1), however, can have significant consequences for multi-jurisdictional bankruptcy practitioners (and their clients), because tough sanctions accompany violations of the automatic stay4 Federal bankruptcy judges are certainly not bound by this Court's interpretation of section 362 when determining whether a party or its counsel has violated the federal code's automatic stay provision. The confusion and potential mischief caused by the Shop in the Grove case is illustrated here, the Appeals Court said. The appellants, the debtor-defendants in the lower court action, filed their notice of appeal to the Court on May 7, 2020, and filed their initial brief on May 19, 2020. Then, on June 12, 2020, the appellants filed separate bankruptcy petitions in the United States Bankruptcy Court for the Eastern District of Pennsylvania. The motion to stay stated that the appellee "does not wish to violate the automatic stay." The appellee understandably fears that filing its answer brief in this Court -- a continuation of its proceeding against the debtors -- may violate the automatic stay. In light of the Court's denial of the appellee's stay motion, it is unlikely that the Pennsylvania bankruptcy court would sanction the appellee or its counsel for violating section 362(a)(1) for filing its answer brief in this Court. Nonetheless, the Pennsylvania bankruptcy court rests in the United States Court of Appeals for the Third Circuit, which has expressly and unequivocally determined that, contrary to Shop in the Grove, "section 362 should be read to stay all appeals in proceedings that were originally brought against the debtor, regardless of whether the debtor is the appellant or appellee." While the panel is bound by the Court's prior precedent, the Appeals Court fears their adherence to Shop in the Grove has needlessly placed the appellee on the horns of a dilemma. The stay motion is, therefore, denied. A copy of the Appeals Court's Decision is available at https://bit.ly/36TrGki from Leagle.com. Genovese Joblove & Battista, P.A., and W. Barry Blum and Jessica Serell Erenbaum , for appellants. Shutts & Bowen, LLP, and Jack C. McElroy , John W. Bustard and Patrick G. Brugger , for appellee. About National Medical National Medical Imaging, LLC and National Medical Imaging Holding Company, LLC provide medical and diagnostic laboratory services with principal place of business located at 1425 Brickell Ave., Apt. 57E, Miami. On June 12, 2020, National Medical Imaging and National Medical Imaging Holding Company filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Penn. Lead Case No. 20-12618). At the time of the filings, each Debtor disclosed assets of $10 million to $50 million and liabilities of the same range. The Debtors have tapped Dilworth Paxson LLP as their bankruptcy counsel and Kaufman, Coren & Ress, P.C. and Karalis P.C. as their special counsel. Prior to the Debtors' voluntary Chapter 11 filing, DVI Receivables Trusts and other creditors filed involuntary Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 05-12714 and 05-12719) against the Debtors on March 3, 2005. In 2014, National Medical Imaging hit U.S. Bank N.A. and eight others with a $50 million lawsuit in Pennsylvania federal court alleging the bank ruined its business by forcing it into involuntary bankruptcy proceedings just as it was beginning to implement a turnaround plan. National Medical Imaging claims the involuntary bankruptcy petitions ultimately destroyed its business even though the cases were ultimately tossed. NEUMEDICINES INC: Taps CBIZ Valuation as Accountant --------------------------------------------------- Neumedicines, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire CBIZ Valuation Group, LLC as its accountant and financial advisor. The firm will provide the following services: i) advise the Debtor of tax consequences derived from the sale of estate assets; ii) analyze the Debtor's books and records and perform any necessary tax and business advisory work required for the estate; iii) analyze and assist the Debtor in the preparation of Debtor's plan, disclosure statement and monthly operating reports; iv) provide litigation support, valuation and expert witness services for the Debtor; v) provide such other financial advisory and consulting services as requested by the Debtor; and vi) advise the Debtor's other professionals, its general bankruptcy counsel, on related financial, tax and advisory issues. CBIZ Valuation will be billed for services rendered at the following hourly rates: Managing Directors $375 to $575 Directors $335 to $575 Managers $210 to $375 Senior Consultants $140 to $285 Paraprofessionals/Staff $115 to $195 Jeffrey L. Sumpter, managing director at CBIZ Valuation, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through Jeffrey L. Sumpter CBIZ Valuation Group, LLC 3101 North Central Avenue, Suite 300 Phoenix, AZ 85012 Telephone: (602) 643-0112 E-mail: jsumpter@cbiz.com About Neumedicines Inc. Neumedicines, Inc. -- https://www.neumedicines.com/ -- is a clinical stage biopharmaceutical company engaged in the research and development of HemaMax, recombinant human interleukin 12 (rHuIL-12), for the treatment of cancer, in combination with standard of care (SOC, radiotherapy, chemotherapy, or immunotherapy); and Hematopoietic Syndrome of Acute Radiation Syndrome (HSARS), as a monotherapy. Neumedicines, Inc., based in Arcadia, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-16475) on July 17, 2020. In the petition signed by Timothy Gallaher, president, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The Hon. Ernest M. Robles presides over the case. The Debtor tapped Weintraub & Seth, APC, as bankruptcy counsel and the law firm of Wilson Sonsini Goodrich & Rosati P.C. as special intellectual property counsel. NEW HOPE HARDWARE: First Amended Reorganization Plan Confirmed -------------------------------------------------------------- Bankruptcy Judge Paul W. Bonapfel issued an order confirming New Hope Hardware, LLC d/b/a Paulding Building Supply, LLC's first amended plan of reorganization. At the confirmation hearing, the Debtor's counsel announced modifications to the Plan to clarify and revise some of its terms in accordance with the Debtor's intent and requested that the modifications be incorporated as part of the confirmation order. The Debtor's counsel reported that, based on these modifications, Class 4 (Paulding County) accepted the Plan and creditors in Classes 6 (State of Georgia) and 9 (creditors secured by motor vehicles) are not impaired. At the hearing, the holders of equity interests accepted the Plan. Based on the changes announced at the hearing and set forth in this Order, the Court concluded that the Plan meets the requirements of 11 USC section 1129(a). The clarifications and revisions to the Plan would properly be the subject of a pre-confirmation modification of it. The clarifications and revisions, however, do not materially and adversely affect any of the classes that accepted the Plan, and the primary effect of the modifications is to provide that creditors in Classes 6 and 9 are not impaired. No further notice or hearing with regard to the modifications is required. In order to avoid the additional professional fees that the Debtor would incur if the Court required the Debtor to file a further pre-confirmation modification, therefore, the Court confirmed the Plan as modified by the provisions of this Order. Class 4 under the plan is the claim of Paulding County, Georgia, for ad valorem taxes on real estate of the Debtor. The Plan provides for this claim to be paid without interest, and it does not expressly state that it will be paid in full within five years of the petition date. Therefore, the Plan did not comply with the requirements of 11 U.S.C. section 1129(a)(9)(c) and section 511. Paulding County did not timely vote on the Plan. Therefore, it had not accepted the Plan, and it had not agreed to the payment of its claim without interest. At the hearing, counsel for the Debtor represented that the Class 4 claimant, Paulding County, Georgia, had submitted an acceptance of the Plan after the Debtor agreed that its Class 4 claim would be allowed in the amount of $67,453.59 (slightly more than the $67,000 amount stated in the Plan). Because Paulding County has accepted the Plan, it has agreed to the treatment of its tax claim. With that change, this provision of the Plan satisfies the requirements of section 1129(a). According to Judge Bonapfel, the Plan provides for quarterly payments to the State of Georgia for unpaid sales taxes. It does not expressly state that the tax claim must be paid within five years from the petition date, and it does not expressly state that the Debtor will pay interest on the claim. The Plan, therefore, does not comply with section 1129(a)(9)(C). At the confirmation hearing, the Debtor agreed that Georgia's tax claim would be paid with interest as applicable Georgia law requires, thus satisfying the requirements of section 511. Further, the Debtor agreed that, if any pre-petition amount remains unpaid June 1, 2025 (five years after the filing of the petition), the remaining balance of such pre-petition claim will be paid in full on that date. This treatment complies with section 1129(a)(9)(C), Judge Bonapfel said. The Plan also provides for the holders of the Debtor's equity interests to retain them and states conditions on making distributions to them on account of their equity interests. Because the conditions on the making of distributions to them appear to alter their legal, equitable, or contractual rights, the Plan impairs their interests. Section 1129(a)(8) requires, "with respect to each class of claims or interests," the class either accept the plan or not be impaired. Absent acceptance by the class of equity interests, the Plan does not meet this requirement. The holders of equity interests participated in the confirmation hearing and through the Debtor's counsel stated that they accepted the Plan. The requirement of section 1129(a)(8) with regard to Class 8, therefore, has been met. In view of the modifications made by the Debtor to the Plan at the confirmation hearing, and with the acceptances of the Plan by Paulding County and the holders of equity interests, the Plan, as modified, complies with all of the applicable requirements of section 1129(a), and the Court confirmed it under section 1191(a). A copy of the Court's Order is available at https://bit.ly/3iYLhBY from Leagle.com. About New Hope Hardware LLC New Hope Hardware LLC is a family owned and operated lumber and hardware supplier. Based in Dallas, Georgia, New Hope Hardware LLC d/b/a Paulding Building Supply filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-40999) on June 1, 2020. In the petition signed by William D. Osteen Jr., manager, the Debtor estimated $558,442 in assets and $3,309,939 in liabilities. The Debtor is represented by Todd E. Hennings, Esq. at MACEY, WILENSKY & HENNINGS, LLP. NIR WEST: Case Summary & 10 Unsecured Creditors ----------------------------------------------- Debtor: NIR West Coast, Inc. dba Northern California Roofing 859 Cotting Court, Ste. A Vacaville, CA 95688 Business Description: NIR West Coast, Inc. dba Northern California Roofing -- https://northerncaliforniaroofing.com -- is a general building contractor that specializes in all phases of the roofing process: from roof repairs to roof replacements, as well as maintenance programs and complete roof overhauls. Chapter 11 Petition Date: November 4, 2020 Court: United States Bankruptcy Court Eastern District of California Case No.: 20-25090 Judge: Hon. Christopher D. Jaime Debtor's Counsel: Julie E. Oelsner, Esq. WEINTRAUB TOBIN 400 Capitol Mall, Fl. 11 Sacramento, CA 95814 Tel: (916) 558-6000 Email: joelsner@weintraub.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Gregory Lynn, president/CEO. A copy of the Debtor's list of 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AP22I7I/NIR_West_Coast_Inc_dba_Northern__caebke-20-25090__0003.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AGNOJZY/NIR_West_Coast_Inc_dba_Northern__caebke-20-25090__0001.0.pdf?mcid=tGE4TAMA NOBLE CORP: Maritime Tort Claimants Object to Disclosure Statement ------------------------------------------------------------------ Jeremy Davis, Timothy Scaife and Michael Eaglin object to the Disclosure Statement with Respect to the Joint Plan of Reorganization of Noble Corporation Plc and its debtor affiliates. Davis, Scaife and Eaglin are maritime tort claimants and assert that: * The Disclosure Statement is unclear whether maritime liens would be included within the administration of the bankruptcy, under the terms of the Plan, and for purposes of satisfying such claims and interests as Other Secured Claims. * To the extent such maritime liens are not addressed or included as secured interests under the Disclosure Statement, Claimants object as the Disclosure Statement fails to provide adequate information as to enable claimants to make informed judgments regarding the Plan. * The Disclosure Statement does not provide specific information concerning the nature and availability of insurance coverage, claims implicating that coverage, SIR and deductible requirements under such coverage, and the sufficiency of coverage. * There are key provisions under the Disclosure Statement that have not yet been disclosed, which include the Liquidation Analysis, Valuation Analysis, Financial Feasibility and Projections, and Rights Offering Procedures. A full-text copy of the Maritime Tort Claimants' objection dated October 2, 2020, is available at https://tinyurl.com/y2s7sbyr from PacerMonitor at no charge. Attorneys for Creditors: Ryan E. Chapple CAIN & SKARNULIS PLLC 400 W. 15th Street, Suite 900 Austin, Texas 78701 Tel: 512-477-5000 Fax: 512-477-5011 E-mail: rchapple@cstrial.com About Noble Corporation Noble Corporation plc -- http://www.noblecorp.com/-- is an offshore drilling contractor for the oil and gas industry. It provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble Corporation focuses on a balanced, high-specification fleet of floating and jackup rigs and the deployment of its drilling rigs in oil and gas basins around the world. On July 31, 2020, Noble Corporation and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33826). Richard B. Barker, chief financial officer, signed the petitions. Debtors disclosed total assets of $7,261,099,000 and total liabilities of $4,664,567,000 as of March 31, 2020. Judge Marvin Isgur oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and Porter Hedges LLP as legal counsel; Smyser Kaplan & Veselka, L.L.P., McAughan Deaver PLLC, and Baker Botts L.L.P. as special counsel; AlixPartners, LLP as financial advisor; and Evercore Group LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NOBLE CORP: Says Chapter 11 Exit Looms After Paragon Settlement --------------------------------------------------------------- Robert Eifler, President and Chief Executive Officer of Noble Corp., said in Noble's Q3 2020 earnings conference call on Nov. 5, 2020, that the company has made steady progress towards finalizing its process and emergence as soon as the end of the year. The Company has filed with a prearranged agreement with largest creditors for a comprehensive restructuring that would convert all of its outstanding bond debt to equity, provide for $200 million of new capital from existing bondholders and provide a new $675 million credit facility from our existing bank group. The plan will wipe out $3.4 billion in debt. Noble Corp. in September reached settlement to resolve its dispute with the Paragon litigation trust. The company has been tied up in litigation surrounding its 2014 spinoff of Paragon Offshore. Paragon creditors, via a litigation trust, sued Noble in 2017 after Paragon completed its own bankruptcy, saying the spinoff was a $2.7 billion fraudulent transfer. "In addition to the great progress with our creditors, we've cleared a critical element of uncertainty by reaching a settlement with the Paragon Litigation Trust. While the timing of several regulatory approvals remains unknown and outside of our control, and could be affected by COVID shutdowns in certain jurisdictions, we maintain our target of emerging prior to year-end or soon thereafter," Mr. Eifler added. "Our decision to pursue a comprehensive restructuring was reached after a thorough review of several potential alternatives. We believe that this path will best position Noble to navigate what remains a very challenging environment, and we are grateful for the broad support we have received from our creditors, customers, vendors and employees. " About Noble Corporation Noble Corporation plc -- http://www.noblecorp.com/-- is an offshore drilling contractor for the oil and gas industry. It provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble Corporation focuses on a balanced, high-specification fleet of floating and jackup rigs and the deployment of its drilling rigs in oil and gas basins around the world. On July 31, 2020, Noble Corporation and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33826). The Debtors disclosed total assets of $7,261,099,000 and total liabilities of $4,664,567,000 as of March 31, 2020. Judge Marvin Isgur oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and Porter Hedges LLP as legal counsel; Smyser Kaplan & Veselka, L.L.P., McAughan Deaver PLLC, and Baker Botts L.L.P. as special counsel; AlixPartners, LLP as financial advisor; and Evercore Group LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NOBLE CORP: Unsecured Creditors to Get Stock in Plan ---------------------------------------------------- Noble Corporation PLC and its debtor affiliates 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 Sept. 4, 2020. The Plan provides for an equitable distribution of recoveries to the Debtors' creditors, preserves the value of the Debtors' business as a going concern, and preserves jobs of certain of the Debtors' employees. The Plan is the result of extensive discussions between and among the Debtors and their creditor constituents. In connection with the Debtors' entry into the Chapter 11 cases, after extensive arms'-length, good-faith negotiations, the Debtors entered into a restructuring support agreement, pursuant to which certain of the Company's Priority Guaranteed Noteholders and Legacy Noteholders agreed to support the general terms of a chapter 11 plan, which is expected to leave the Company with a de-levered balance sheet and sufficient liquidity, and better positioned to compete in the highly competitive offshore drilling industry. The Plan contemplates a restructuring pursuant to which the Company's debt will be reduced from approximately $4.0 billion to approximately $450 million on the Effective Date. To achieve that goal, over $3 billion worth of Priority Guaranteed Notes and Legacy Notes will be equitized, and the Debtors' prepetition revolving credit facility will receive a significant paydown in exchange for the Revolving Credit Facility Lenders providing the Exit Revolving Credit Facility. The Company will also issue $200 million in notes, which will be funded pursuant to a rights offering of Exit Second Lien Notes and shares of common stock in the reorganized Company. The rights offering will be fully backstopped by the Ad Hoc Guaranteed Group and Ad Hoc Legacy Group. Each Holder of an Allowed General Unsecured Claim against Debtor Group A shall receive, on the date that is not more than ten years after the Effective Date, Cash in the aggregate amount of such Allowed General Unsecured Claim against Debtor Group A plus annual payments of Cash interest at the federal judgment rate as of the Petition Date beginning on the date that such Claim becomes Allowed. Each Holder of an Allowed General Unsecured Claim against Debtor Group B shall receive its Pro Rata share of 63.5% of the Reorganized Parent Stock and the Debtor Group B Subscription Rights. Each Holder of an Allowed General Unsecured Claim against Debtor Group C shall receive its Pro Rata share of 4.1% of the Reorganized Parent Stock, the Tranche 1 Warrants, the Tranche 2 Warrants, and the Debtor Group C Subscription Rights, provided that any General Unsecured Claim that is Allowed against both debtor Group B and Debtor Group C shall not receive a distribution with respect to Debtor Group C. Each Holder of an Allowed General Unsecured Claim against Debtor Group D shall receive its liquidation value, while each Holder of a General Unsecured Claim against Debtor Group E and Debtor Group F shall receive no distribution on account of such Claim. Each Holder of an Allowed Interest in Parent shall receive its Pro Rata share of the Tranche 3 Warrants, provided, however, to the extent that any Class of Claims is not an Accepting Class and has not been eliminated pursuant to the Plan, Holders of Allowed Interests in Parent shall receive no distribution on account of such Interest. All Cash required for payments to be made under the Plan on the Effective Date shall be obtained from Cash on hand, proceeds of the Rights Offering, and proceeds of the Exit Revolving Credit Facility. A full-text copy of the Disclosure Statement dated September 4, 2020, is available at https://tinyurl.com/yyhkja32 from PacerMonitor at no charge. Proposed Counsel for the Debtors: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP George N. Panagakis Anthony Joseph 155 N. Wacker Dr. Chicago, Illinois 60606-1720 Tel: (312) 407-0700 Fax: (312) 407-0411 Mark McDermott Jason Kestecher Nicholas Hagen One Manhattan West New York, New York 10001 Tel: (212) 735-3000 Fax: (212) 735-2000 - and - PORTER HEDGES LLP John F. Higgins Eric M. English M. Shane Johnson Megan Young-John Emily D. Nasir 1000 Main St., 36th Floor Houston, Texas 77002 Tel: (713) 226-6000 Fax: (713) 226-6248 About Noble Corporation Noble Corporation plc -- http://www.noblecorp.com/-- is an offshore drilling contractor for the oil and gas industry. It provides contract drilling services to the international oil and gas industry with its global fleet of mobile offshore drilling units. Noble Corporation focuses on a balanced, high-specification fleet of floating and jackup rigs and the deployment of its drilling rigs in oil and gas basins around the world. On July 31, 2020, Noble Corporation and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33826). Richard B. Barker, chief financial officer, signed the petitions. Debtors disclosed total assets of $7,261,099,000 and total liabilities of $4,664,567,000 as of March 31, 2020. Judge Marvin Isgur oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and Porter Hedges LLP as legal counsel, AlixPartners, LLP as financial advisor, and Evercore Group LLC as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NORTHBELT LLC: Modified Plan Still Not Feasible, Court Rules ------------------------------------------------------------ Bankruptcy Judge Eduardo V. Rodriguez denied confirmation of Debtor Northbelt, LLC's modified plan because it failed to meet the requirements of 11 U.S.C. section 1129(a)(7) and (11). On May 29, 2020, the Court issued its Memorandum Opinion and Order that, inter alia, denied confirmation of Northbelt's First Amended Chapter 11 Plan. The Court directed the Debtor to file a modified plan within 45 days that "addresses the Court's feasibility concerns and takes into account treatment of Wilmington Trust's claim." On July 2, 2020, Wilmington Trust, N.A. filed its Motion for Relief from Stay. On July 13, 2020, the Debtor filed its Modified Chapter 11 Plan. On August 24, 2020, Wilmington Trust, N.A. filed its Objection to Confirmation of the Plan. On August 21, 2020, the Court held a hearing on Wilmington Trust, N.A.'s Motion for Relief and the confirmation of the Debtor's Modified Plan. Wilmington Trust, N.A. argued that while the Debtor timely filed the Modified Plan within the 45-day period described in the Court's May 29, 2020 Memorandum Opinion and Order, the Debtor otherwise failed to comply with the Court's instructions that the Debtor file a modified plan that "addresses the Court's feasibility concerns discussed herein and takes into account treatment of Wilmington Trust's claim." Judge Rodriguez agreed with Wilmington Trust, noting that the Debtor took a contradictory position with respect to the valuation of the property in this case. The Court determined in its Memorandum Opinion that the property is valued at $13,200,000. However, at the hearing on August 31, 2020, the Debtor, without any evidentiary support, argued that the property should be valued at $7,600,000. The Court's valuation in this case is wholly ignored. At the August 31, 2020 hearing, Dr. Testa, the Debtor's representative, testified that he stipulated to a $7,600,000 value in August 2019, yet his assertion is unsupported by evidence before the Court and filings by his counsel after the alleged stipulation contradicted his testimony. Moreover, the Debtor's self-help remedies are unavailing. The Court determined that "Debtor may not withdraw funds from the established Wilmington Trust, N.A. Reserves without first curing its Events of Default under the Loan Agreement." The Court detailed findings in its Memorandum Opinion with respect to each Event of Default. Despite this determination, the Debtor failed to provide evidence that any Events of Default have been cured. Instead, Dr. Testa simply refuted the Court's determination. Additionally, Dr. Testa's testimony that the Debtor is permitted some form of forbearance regarding the Wilmington Trust, N.A. loan is wholly unsupported by any evidence in the record. To confirm a proposed plan of reorganization, the plan proponent must demonstrate that the plan meets the requirements of section 1129(a) of the Bankruptcy Code by a preponderance of the evidence. Alternatively, if the requirement of acceptance by all impaired classes -- section 1129(a)(8) -- is not met, confirmation can still be achieved if the plan "does not discriminate unfairly, and is fair and equitable, with respect to each class of claims . . . that is impaired under, and has not accepted, the plan." Here, as Wilmington Trust, N.A., an impaired class, has objected to the Modified Plan, the Modified Plan has not been accepted by all impaired classes. Turning to Wilmington Trust, N.A.'s contention that the Debtor's Modified Plan fails to satisfy to section 1129(a)(7) and (11), Judge Rodriguez said that under section 1129(a)(7), each holder of a claim in a class must either accept the plan or receive at least as much as it would receive in a chapter 7 liquidation. This is referred to as the "best interest of creditors" test. On May 29, 2020, the Court valued the Debtor's property at $13,200,000 and Wilmington Trust N.A.'s secured claim as $13,200,000. In addition, Wilmington Trust, N.A. has an unsecured claim in the amount of $1,440,999.81. The Debtor's Modified Plan proposed to pay Wilmington Trust, N.A. a total of $7,600,000 over 360 months for its secured claim. The Debtor's Modified Plan does not provide for payment of the remaining $5,600,00 of Wilmington Trust, N.A.'s secured claim. If the Debtor intended to treat the remaining portion of Wilmington Trust N.A.'s secured claim as an unsecured claim, Wilmington Trust, N.A. would receive $352,049.99, which is 5% of its total unsecured claim, as proposed in the plan. That would bring the total payment to Wilmington Trust, N.A. to $7,952,049.99. Under a chapter 7 liquidation, however, sale of the Debtor's property would produce $13,200,000, less the expenses of sale. The Court said the Debtor failed to produce persuasive evidence justifying a modification to the Court's valuation. Therefore, the Debtor's current plan proposal would provide Wilmington Trust, N.A. with less than it would receive under a chapter 7 liquidation, failing to meet the requirements of section 1129(a)(7). As such, the Debtor's Modified Plan failed to meet the requirements of section 1129(a)(7). Pursuant to section 1129(a)(11), a debtor's plan is feasible if "[c]onfirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor . . . unless such liquidation or reorganization is proposed in the plan." Under the feasibility standard, a debtor must demonstrate that its plan offers a reasonable possibility of success by a preponderance of the evidence. Here, the Court found that the Debtor failed to establish feasibility in its Modified Plan. The Debtor's Modified Plan disregarded the Court's feasibility concerns in its May 29, 2020 Memorandum Opinion and Order. The Court found the inconsistencies in the Modified Plan set forth by Wilmington Trust, N.A. persuasive. Additionally, while Dr. Testa testified that he would fund any shortfall of payments set forth in the Modified Plan, his promise remains non-binding and illusory. There is no recourse for Dr. Testa's failure to fund the Debtor under the Modified Plan. As such, the Court found that the Debtor's Modified Plan failed to satisfy section 1129(a)(11). A copy of the Court's Memorandum Opinion and Order is available at https://bit.ly/2SPWwSu from Leagle.com. About Northbelt LLC Northbelt, LLC, a lessor of real estate headquartered in Houston, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-30388) on Jan. 28, 2019. At the time of the filing, the Debtor estimated assets of $10 million to $50 million and liabilities of $10 million to $50 million. The case is assigned to Judge Eduardo V. Rodriguez. Joyce W. Lindauer Attorney, PLLC is the Debtor's counsel. NORTHLAND CORPORATION: Committee Taps McClain DeWees as Counsel --------------------------------------------------------------- The unsecured creditor's committee of Northland Corporation seeks authority from the U.S. Bankruptcy Court for the Western District of Kentucky to employ McClain DeWees, PLLC and Louisville Lawyer, PLLC as its counsel. The committee requires McClain DeWees to: a. consult with the Debtor concerning the administration of the Debtor's Chapter 11 case; b. investigate the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of the plan; c. participate in the formulation of a plan, advise committee members of the Committee's determinations as to any plan formulated, and collect and file with the Court acceptances or rejections of a plan; d. request the appointment of a trustee or examiner under section 1104 of the Bankruptcy Code; and e. perform such other services as are in the interest of those represented by the committee. The firms will bill its standard hourly rates of $300 for attorney's time and $150 per hour for paralegal time. The firms neither holds nor represents any interest adverse to the Committee in the matters upon which they are to be engaged, according to court filings. The firms can be reached through: Michael W. McClain MCCLAIN DEWEES, PLLC 6008 Brownsboro Park Blvd., Suite H Louisville, KY 40207 Phone: (502) 749-2388 Email: mmcclain@mcclaindewees.com James D. Ballinger LOUISVILLE LAWYER, PLLC 3610 Lexington Road Louisville, KY 40207 Phone: (502) 426-3215 Email: jim@louisvillelawyer.com About Northland Corporation Northland Corporation -- http://northlandcorp.com/-- is in the primary business of drying, sorting, and grading hardwood lumber. Northland Corporation, a company based in La Grange, Ky., filed a Chapter 11 petition (Bankr. W.D. Ky. Case No. 20-31934) on July 27, 2020. In the petition signed by Orn E. Gudmundsson, Jr., chief executive officer, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Kaplan Johnson Abate & Bird LLP, serves as bankruptcy counsel to the Debtor. OAKTREE MEDICAL: Huron Bid to Stay WIFS Suit Nixed -------------------------------------------------- District Judge Graham C. Mullen denied a third-party defendant's motion to stay the case captioned WEST INVESTMENT FOREIGN SHARES, LLC, FIDUS INVESTMENT CORPORATION, Plaintiffs, v. GROVE 1005, LLC, JOHN SHAW, DANIEL A. McCOLLUM, McCOLLUM BUSINESS, LLC, Defendants, Civil Action No. 3:19-CV-00312-GCM (W.D.N.C.). Huron filed the Motion for Application of the Automatic Bankruptcy Stay due to the pending bankruptcy proceeding captioned In re Oaktree Medical Center, LLC, No. 19-05154-HB (Bankr. D.S.C.). Huron maintained that, although it is not the debtor in the bankruptcy proceeding, there are unusual circumstances that warrant applying the automatic stay to this case. According to Huron, these unusual circumstances largely arise out of the liability and indemnification clause included within an engagement letter between Huron and OMC when Huron was engaged to provide OMC consulting services. Because Defendant McCollum only asserted claims for breach of fiduciary duty, constructive fraud, negligence, and civil conspiracy, Huron argued that the OMC indemnification clause acts to extend the automatic stay in the OMC bankruptcy proceedings to Huron as a third-party defendant. According to Judge Mullen, when determining whether an automatic stay should be extended to a non-debtor, courts often consider the rationale behind the Congressional creation of automatic bankruptcy stays. The rationale is to avoid disrupting repayment or reorganization plans. While some courts do extend the automatic stay to non-debtors in Chapter 7 proceedings, courts also tend to note that the real purpose behind the automatic stay is to protect debtors during reorganization efforts. According to Judge Mullen, it is appropriate to take into account the automatic stay's purpose when determining whether to extend the stay to a non-debtor. The unusual circumstances required to extend the automatic stay to the non-debtor, Huron, do not exist, Judge Mullen said. Despite Huron's argument to the contrary, simply because there is an indemnity agreement between Huron and OMC does not mean the Court must extend the stay. A separate future action will be needed to determine whether OMC must indemnify Huron. Additionally, there is no ascertainable harm that will occur to OMC's creditors if Huron files additional claims for indemnification arising out of this matter. Moreover, it cannot be said that Huron's and OMC's interests are so intimately intertwined that OMC, as the debtor, is the real party in interest where this matter stems from the independent and primary obligations of Huron. There are no unusual circumstances that merit extending the automatic stay to Huron. Where there are no unusual circumstances warranting the extension of an automatic stay, the Court may still use its general equity powers to grant a discretionary stay. Huron, however, has failed to justify a discretionary stay under the Court's general equity powers, according to Judge Mullen. Extending the stay is judicially inefficient and the result would essentially create two civil actions where only one existed before, thus harming Defendant McCollum by forcing him to litigate all of these proceedings twice. Conversely, if the case is not stayed as to Huron, neither Huron nor OMC will be harmed in any material manner. Again, this lawsuit stems from Huron's obligations, and the Court saw little need for OMC to be brought into this lawsuit simply because an indemnification clause, with no defense agreement, exists between the two entities. Further, any discovery required from OMC will harm neither Huron, OMC, nor OMC's creditors since OMC is proceeding with Chapter 7 liquidation and OMC will also be required to participate in discovery as relates to other claims in this litigation. In sum, it is most proper for all Third-Party Defendants to proceed in this matter at the same time. A copy of the Court's Order is available at https://bit.ly/2T13J2g from Leagle.com. Oaktree Medical Centre, LLC, and Oaktree Medical Centre, P.C., filed for Chapter 7 bankruptcy (Bankr. W.D.N.C. Case Nos. 19-31285 and 19-31286) in Charlotte, North Carolina, on Sept. 19, 2019, just a month after shuttering all their Pain Management clinics. Oaktree Medical Center disclosed $8 million in assets against $37.9 million in liabilities. It owes $29.4 million to its major investor, Fidus Investment Corp. The Debtors' counsel: Ethridge B. Ricks McGuireWoods LLP 201 North Tryon Street, Suite 3000 Charlotte, NC 28202 Tel: 704-343-2235 Fax: 704-373-8829 E-mail: bricks@mcguirewoods.com OELWEIN HEALTHCARE: Nov. 19 Plan & Disclosure Hearing Set --------------------------------------------------------- On Aug. 28, 2020, debtor Oelwein Community Healthcare Foundation d/b/a HealthFirst Medical Park and HealthFirst Medical filed with the U.S. Bankruptcy Court for the Northern District of Iowa a Combined Plan of Reorganization and Disclosure Statement. On Sept. 1, 2020, Judge Thad J. Collins ordered that: * Nov. 19, 2020 at 10:00 a.m. at the United States Federal Courthouse, 6th Floor Courtroom, 111 Seventh Avenue SE, Cedar Rapids, IA is the hearing to consider the Combined Plan or Reorganization and Disclosure Statement. * Oct. 27, 2020 is fixed as the last day for filing written acceptances or rejections of the Plan. * Oct. 27, 2020 is fixed as the last day for filing and serving written objections to Disclosure Statement and confirmation of Plan. A full-text copy of the order dated September 1, 2020, is available at https://tinyurl.com/y45gh99c from PacerMonitor.com at no charge. Attorney for Debtor: DAY RETTIG MARTIN, P.C. Ronald C. Martin AT0005050 PO Box 2877 Cedar Rapids, Iowa 52406-2877 Tel: (319) 365-0437 Fax: (319) 365-5866 E-mail: ronm@drpjlaw.com About Oelwein Community Oelwein Community Healthcare Foundation is a non-profit group that provides health care services. It is the owner of a real property located at 2405 Rock Island Road, Oelwein, Iowa, having an appraised value of $3.97 million. Oelwein Community filed for Chapter 11 bankruptcy protection (Bankr. N.D. Iowa Case No. 19-01726) on Dec. 10, 2019. In the petition signed by W. Wayne Saur, president, the Debtor reported $4,024,812 in assets and $7,750,439 total liabilities. The Debtor is represented by Ronald C. Martin, Esq., at Day Rettig Martin, P.C. OELWEIN HEALTHCARE: Unsecureds to Be Paid From Surplus Funds ------------------------------------------------------------ Oelwein Community Healthcare Foundation d/b/a HealthFirst Medical Park and HealthFirst Medical filed with the U.S. Bankruptcy Court for the Northern District of Iowa a Combined Plan of Reorganization and Disclosure Statement. Class 4 consists of former employees with claims for wages and benefits up to the statutory $13,650 earned in the 180 days period prior to June 14, 2019 when the Debtor ceased operations, but not paid. The Debtor shall pay the allowed amount of the Class 4 Claims to the extent that there are surplus funds available after the administrative claims, the unclassified claims, and Classes 1 and 2 have been paid and operating expenses and maintenance reserve have been paid. The Claimants shall receive a pro rata distribution at the end of the fiscal year for five consecutive years until their claims are paid in full or the five-year period expires. Class 4 payments will cease after five years regardless whether the Class has been paid in full. Class 5 consists of all allowed non-priority unsecured creditors, any party to a contract or unexpired lease rejected post-petition and the claims of the Class 3 creditors. The Debtor will pay the allowed amount of the Class 5 Claim to the extent that there are surplus funds available after the administrative claims, the unclassified claims, and Classes 1, 2, and 4 have been paid and operating expenses and maintenance reserve have been paid. Said payment will be made at the end of the five-year period or commencing after the Class 4 claimants are paid in full, any available funds after operating expenses are paid and excluding the maintenance reserve will be paid pro rata to the Class 5 creditors. All Class 5 payments will cease after five years. The Debtor has entered into a lease with Buchanan County Health Center for the use of the Debtor’s facilities. Additionally, Buchan County Health Center bought certain equipment on contract from the Debtor prior to the commencement of the bankruptcy case. Veridian has a security interest in the proceeds from the equipment and the lease. The Debtor will use the income from the lease and the sales contract to fund the Plan. The Debtor also has certain claims that it will attempt to settle for cash payment, and will commit the funds to the Plan. The Debtor has determined that the remaining accounts receivable from its healthcare operations are not economically recoverable. It would cost more to submit the claims again than the anticipated recovery would be. Because of this, no additional receivables are anticipated. A full-text copy of the Combined Plan of Reorganization and Disclosure Statement dated August 28, 2020, is available at https://tinyurl.com/y2j5pag3 from PacerMonitor.com at no charge. Attorney for Debtor: DAY RETTIG MARTIN, P.C. Ronald C. Martin PO Box 2877 Cedar Rapids, Iowa 52406-2877 Tel: (319) 365-0437 Fax: (319) 365-5866 E-mail: ronm@drpjlaw.com About Oelwein Community Oelwein Community Healthcare Foundation is a non-profit group that provides health care services. It is the owner of a real property located at 2405 Rock Island Road, Oelwein, Iowa, having an appraised value of $3.97 million. Oelwein Community filed for Chapter 11 bankruptcy protection (Bankr. N.D. Iowa Case No. 19-01726) on Dec. 10, 2019. In the petition signed by W. Wayne Saur, president, the Debtor reported $4,024,812 in assets and $7,750,439 total liabilities. The Debtor is represented by Ronald C. Martin, Esq., at Day Rettig Martin, P.C. ONE AVIATION: Lenders Face Hurdles in $5.2M Bankruptcy Sale ----------------------------------------------------------- Alex Wolf of Bloomberg Law reports that a senior lender of ONE Aviation Corp. asked a judge to block the company's bid to sell the bankrupt aircraft manufacturing business for $5.25 million, arguing its claim dwarfs the sale amount. Citiking International US LLC's claim against ONE Aviation totals $51 million, according to Citiking's objection filed Tuesday, November 3, 2020, with the U.S. Bankruptcy Court for the District of Delaware. ONE Aviation, which specializes in business aviation aircraft, has a pending deal to sell to AML Global Eclipse LLC. The private sale is necessary "to avoid a value-destructive conversion to Chapter 7 and liquidation of the Debtors' assets," according to ONE Aviation. About ONE Avaiation Corp. Headquartered in Albuquerque, New Mexico, ONE Aviation Corporation -- http://www.oneaviation.aero/-- and its subsidiaries are original equipment manufacturers of twin-engine light jet aircraft. Primarily serving the owner/operator, corporate, and aircraft charter markets, the Debtors are on the forefront of private aviation technology. The Debtors provide maintenance and upgrade services for their existing fleet of aircraft through two Company-owned Platinum Service Centers in Albuquerque, New Mexico and Aurora, Illinois, five licensed, global Gold Service Centers in locations including San Diego, California, Boca Raton, Florida, Friedrichshafen, Germany, Eelde, Netherlands, and Istanbul, Turkey, as well as a research and development center located in Superior, Wisconsin. The Debtors currently employ 64 individuals. ONE Aviation and its affiliates filed for chapter 11 bankruptcy protection (Bankr. D. Del. Case. Nos. 18-12309 - 18-12320) on Oct. 9, 2018, listing its estimated assets at $10 million to $50 million and estimated liabilities at $100 million to $500 million. The petition was signed by Alan Klapmeier, CEO. OPTION CARE: Swings to $1.7 Million Net Income in Third Quarter --------------------------------------------------------------- Option Care Health, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $1.66 million on $781.61 million of net revenue for the three months ended Sept. 30, 2020, compared to a net loss of $42.79 million on $615.88 million of net revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $25.91 million on $2.22 billion of net revenue compared to a net loss of $60.11 million on $1.59 billion of net revenue for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $2.66 billion in total assets, $1.67 billion in total liabilities, and $993.50 million in total stockholders' equity. Comparable revenue growth for the quarter is approximately 13% when considering the impact and timing of the merger as well as harmonization of accounting policies, with chronic therapies growth over prior year in the mid teens and acute therapies flat to prior year. Additionally, the Company continues to make significant progress on merger-related integration efforts and expects to be complete with integration efforts, other than technology harmonization, by the end of the year. John C. Rademacher, chief executive officer, commented, "The third quarter was very productive for Option Care Health as we continue to serve patients relying on us for critical infusion therapies while also laying the foundation for sustained organic growth. Despite a very challenging operating environment, the team continues to rise to the challenge and reinforce the reliability and dedication of the Option Care team." Update on the Impact of the COVID-19 Pandemic The COVID-19 pandemic continues to have a significant impact on the Company's operations. New patient referrals increased relative to the second quarter for both acute and chronic therapies and referral levels overall in the third quarter exceed pre-Covid levels. Chronic patient referrals showed the largest improvement in the quarter, as patient migrations to treatment in the home or alternate site continued and referrals for newer therapies also increased. Option Care Health continues to incur higher expenses related to both the procurement of personal protection equipment and medical supplies as well as with respect to its clinical labor. As previously disclosed, as part of the Coronavirus Aid, Relief, and Economics Security Act, the Company received approximately $11.7 million from the Public Health and Social Services Emergency Fund in the second quarter which it fully returned in the third quarter. The cash receipt was reflected in the second quarter results as a cash inflow from financing activities and subsequently as a cash outflow from financing activities in the third quarter. There was no impact on the Company's results from operations related to the receipt and return of the funds. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1014739/000101473920000041/bios-20200930.htm About Option Care Health Option Care Health is an independent provider of home and alternate site infusion services. With over 5,000 teammates, including approximately 2,900 clinicians, the Company works to elevate standards of care for patients with acute and chronic conditions in all 50 states. Through its clinical leadership, expertise and national scale, Option Care Health is reimagining the infusion care experience for patients, customers and employees. Option Care recorded a net loss of $75.92 million for the year ended Dec. 31, 2019, compared to a net loss of $6.11 million for the year ended Dec. 31, 2018. For the six months ended June 30, 2020, the Company reported a net loss of $27.58 million. OZLM LTD XIII: Moody's Cuts Rating on $8.9MM Class E Notes to Caa2 ------------------------------------------------------------------ Moody's Investors Service has downgraded the rating on the following notes issued by OZLM XIII, Ltd.: US$8,900,000 Class E Secured Deferrable Floating Rate Notes Due 2027 (the "Class E Notes"), Downgraded to Caa2 (sf); previously on Sep 22, 2020 Downgraded to Caa1 (sf) OZLM XIII, Ltd., originally issued in August 2015, and partially refinanced in September 2018, is a managed cashflow CLO. The notes are collateralized primarily by a portfolio of broadly syndicated senior secured corporate loans. The transaction's reinvestment period ended in July 2020. RATINGS RATIONALE The downgrade on the Class E Notes reflects the risks posed by credit deterioration and loss of collateral coverage observed in the underlying CLO portfolio, which Moody's previously noted during its last rating action in September. The action also reflects a correction to Moody's modeling of the transaction. According to the September 2020 trustee report [1], the weighted average rating factor (WARF) was reported at 3267, compared to 3269 reported in the August 2020 trustee report [2]. Moody's also noted that the WARF was failing the test level of 2820 reported in the September 2020 trustee report [3]. Based on Moody's calculation, the proportion of obligors in the portfolio with Moody's corporate family or other equivalent ratings of Caa1 or lower (adjusted for negative outlook or watchlist for downgrade) was approximately 21.4%. Furthermore, Moody's calculated total collateral par balance, including recoveries from defaulted securities, was $482.2 million, or $17.8 million less than the deal's ramp-up target par balance. Moody's also calculated the over-collateralization (OC) ratio for the Class E Notes at 101.52% and noted that the interest diversion test was recently reported [4] as failing, which has resulted in a portion of excess interest collections being diverted towards reinvestment in collateral. The rating action also reflects a correction to Moody's modeling of the transaction. In the previous rating action, collateral defaults were modeled with incorrect default timing profiles. This error has been corrected, and the rating action reflects this change. Moody's modeled the transaction using a cash flow model based on the Binomial Expansion Technique, as described in "Moody's Global Approach to Rating Collateralized Loan Obligations." For modeling purposes, Moody's used the following base-case assumptions: Performing par and principal proceeds balance: $475,464,942 Defaulted Securities: $17,087,745 Diversity Score: 70 Weighted Average Rating Factor (WARF): 3258 Weighted Average Life (WAL): 4.16 years Weighted Average Spread (WAS): 3.33% Weighted Average Recovery Rate (WARR): 47.1% Par haircut in OC tests and interest diversion test: 1.7% In consideration of the current high uncertainties around the global economy and the ultimate performance of the CLO portfolio, Moody's conducted a number of additional sensitivity analyses representing a range of outcomes that could diverge, both to the downside and the upside, from its base case. Some of the additional scenarios that Moody's considered in its analysis of the transaction include, among others: additional near-term defaults of companies facing liquidity pressure; additional OC par haircuts to account for potential future downgrades and defaults resulting in an increased likelihood of cash flow diversion to senior notes; and some improvement in WARF as the US economy gradually recovers in the second half of the year and corporate credit conditions generally stabilize. 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 corporate assets 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 Would Lead to an Upgrade or Downgrade of the Rating: The performance of the rated notes is subject to uncertainty. The performance of the rated notes is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The Manager's investment decisions and management of the transaction will also affect the performance of the rated notes. The principal methodology used in this rating was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in August 2020. PAINT THE WIND: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Paint the Wind, LLC. About Paint the Wind Paint the Wind, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bank. M.D. Pa. Case No. 20-02604) on August 31, 2020. At the time of the filing, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Henry W. Van Eck oversees the case. Lawrence V. Young, Esq., of CGA Law Firm, is the Debtor's legal counsel. PARK AVENUE: Taps Skolnick Legal Group as Counsel ------------------------------------------------- Park Avenue Leather Goods LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Skolnick Legal Group, P.C. as its legal counsel. The firm will provide the following services: (a) prepare legal papers; (b) counsel the Debtor regarding its rights and obligations; (c) provide advice, representation and preparation of necessary documentation and pleadings; (d) take all necessary or appropriate actions to protect and preserve the Debtor's estate; (e) take all necessary or appropriate actions in connection with any Chapter 11 plan; and (f) act as general restructuring counsel for the Debtor and performing all other necessary or appropriate legal services. Skolnick Legal will be paid at the rate of $400 per hour for Scott Bernstein and $350 per hour for other attorneys expected to work in the case. Prior to the petition date, the Debtor provided the firm with retainer in the amount of $39,800, to establish and maintain a retainer, the current balance of which is $21,163. Scott Bernstein, Esq., an attorney at Skolnick Legal, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Scott H. Bernstein, Esq. SKOLNICK LEGAL GROUP, P.C. 103 Eisenhower Parkway, Suite 305 Roseland, NJ 07068 Telephone: (973) 403-0100 Facsimile: (973) 488-7140 E-mail: scott@skolnicklegalgroup.com About Park Avenue Leather Goods Park Avenue Leather Goods LLC, which conducts business under the name T. Anthony, LLC, is a luxury goods company established in New York in 1946 that specializes in luggage and leather goods. Visit https://tanthony.com for more information. Park Avenue Leather Goods sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-12495) on October 22, 2020. The petition was signed by Steven M. Cherniak, the company's chief operating officer. At the time of the filing, Debtor had total assets of $1,378,925 and total liabilities of $3,426,217. Skolnick Legal Group, P.C. is Debtor's legal counsel. PEAK PROPERTY: Hires Montgomery Little as Litigation Counsel ------------------------------------------------------------ Peak Property Group, LLC received approval from the U.S. Bankruptcy Court for the District of Colorado to hire Montgomery Little & Soran, PC as its litigation counsel. Peak Property requires Montgomery Little to represent it and commence adversary proceedings against parties holding liens encumbering its real property which the Debtor alleges are invalid and unenforceable. Montgomery Little will be paid at hourly rates as follows: Nathan G. Osborn $275 Erin C. Nave $200 Paralegal $100 Nathan Osborn, Esq., a shareholder of Montgomery Little, disclosed in court filings that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Montgomery Little can be reached at: Nathan G. Osborn, Esq. Montgomery Little & Soran, PC 5445 DTC Parkway, Suite 800 Greenwood Village, CO 80111 Tel: (303) 773-8100 Fax: (303) 220-0412 About Peak Property Group LLC Peak Property Group LLC owns four properties in Denver, Colo., and La Quinta, Calif., having an aggregate comparable sale value of $1.09 million. Peak Property Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-16088) on Sept. 12, 2020. At the time of the filing, Debtor had total assets of $1,102,686 and total liabilities of $1,685,781. Hon. Judge Kimberley H. Tyson oversees the case. Shilliday Law, P.C. is Debtor's legal counsel. PERMIAN TANK: Has Settlement With Creditors Committee ----------------------------------------------------- Law360 reports that the oil and gas services firm Permian Tank & Manufacturing Inc. received court approval Sept. 15, 2020 in Delaware for a settlement with unsecured creditors that will allow a Chapter 11 sale process to move forward with the creditors' support. During a virtual hearing, debtor attorney M. Blake Cleary of Young Conaway Stargatt & Taylor LLP said the official committee of unsecured creditors would drop its opposition to a proposed sale to New Mountain Finance Corp. in exchange for an increased investigation budget and a pledge from the buyer to leave behind certain causes of action in the estate. About Permian Holdco Permian Holdco 1, Inc. and its affiliates are manufacturers of above-ground storage tanks and processing equipment for the oil and natural gas exploration and production industry. Permian Holdco 1, Inc. and its affiliates, including Permian Tank & Manufacturing, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-11822) on July 19, 2020. The petitions were signed by Chris Maier, chief restructuring officer. Hon. Mary F. Walrath presides over the cases. Permian Tank was estimated to have $10 million to $50 million in assets and liabilities. M. Blake Cleary, Esq., Robert F. Poppiti, Jr., Esq., Joseph M. Mulvihill, Esq., and Jordan E. Sazant, Esq. of Young Conaway Stargatt & Taylor, LLP serve as counsel to the Debtors. Seaport Gordian Energy LLC serves as investment banker to the Debtors and Epiq Corporate Restructuring LLC acts as notice and claims agent. PETTERS COMPANY: 8th Cir. Flips Summary Judgment in Clawback Suits ------------------------------------------------------------------ In the appellate cases captioned Douglas A. Kelley, in his capacity as PCI Liquidating Trustee, for the PCI Liquidating Trust, Appellee, v. Gus Boosalis, Appellant, Douglas A. Kelley, in his Capacity as PCI Liquidating Trustee, for the PCI Liquidating Trust, Appellee, v. Chris M. Kanios and Steve Papadimos, Appellants, Nos. 19-1079, 19-2376, 19-2382, 19-2452 (8th Cir.), the United States Court of Appeals, Eighth Circuit reversed the decisions of the district court granting summary judgment to the PCI Liquidating Trustee. This litigation arose from the financial losses caused by a $3.5 billion Ponzi scheme perpetrated by Thomas Petters from 1994 to 2008 through his company, Petters Company, Inc. PCI "purported to run a 'diverting' business that purchased electronics in bulk and resold them at high profits to major retailers." Petters and his associates persuaded individual investors to make secured loans to finance specific purchases of electronics for resale. In reality, PCI engaged in almost no purchase and sale transactions. Instead, it diverted the loan proceeds and used the proceeds of new loans to repay interest due on outstanding loans -- one of the largest Ponzi schemes ever created. When the scheme collapsed, Petters was convicted of multiple federal offenses and currently serves a 50-year prison sentence. PCI filed for bankruptcy. Douglas A. Kelley is the liquidating trustee for the PCI Liquidating Trust in a consolidated Chapter 11 bankruptcy. He has filed more than 200 cases seeking to recover PCI's interest payments to early PCI lenders for the benefit of later lenders who lost their entire loans to the Ponzi scheme. These appeals involve the Trustee's separate claw back claims against the Defendants -- lenders Gus Boosalis, a former floor trader on the Pacific Exchange, and government attorney Steve Papadimos and his wife, physician Chris Kanios, who live in a Toledo, Ohio suburb. The Trustee asserted claims under 11 U.S.C. section 544(b)(1), which permits a trustee to "avoid any transfer of an interest of the debtor. . . that is voidable under applicable law by a creditor holding an unsecured claim." Here, the "applicable law" is the Minnesota Uniform Fraudulent Transfers Act ("MUFTA"). The principal balances of Defendants' loans were repaid when PCI shifted its borrowing to large institutional lenders some time before it filed for bankruptcy. The Trustee asserted claw back claims under MUFTA seeking only to recover payments of interest to Defendants on their loans to PCI. Between 1995 and 2001, Boosalis was paid over $3.5 million in interest on loans to PCI. After lengthy discovery and a one week jury trial, the jury found that all interest payments were fraudulent transfers under MUFTA, and that Boosalis failed to prove an affirmative defense. Based on this verdict, the district court awarded approximately $3.5 million in damages and $2.9 million in prejudgment interest. Between July 1997 and March 2006, Papadimos loaned PCI $3,297,300 in many separate transactions. PCI paid $3,126,524.37 in interest on annual rates ranging from 12% to 48%. Kanios loaned PCI $690,000 in over 20 promissory note transactions. She was paid $572,500.22 interest at rates ranging from 12% to 39.66%. Following trial of the Trustee's claims against Boosalis, the district court granted the Trustee's motion for summary judgment against Papadimos and Kanios, concluding the record conclusively established that each of PCI's interest payments constituted "actual fraud" under MUFTA and these Defendants failed to establish the statutory affirmative defense to actual fraud. The court awarded the Trustee actual damages and prejudgment interest totaling $5,852,168.36 against Papadimos and $1,071,594.93 against Kanios. All three Defendants appeal, raising numerous issues, many but not all of which overlap. On the major overlapping issue, the Eighth Circuit concluded the district court erred in applying the Supreme Court of Minnesota's controlling MUFTA decision in Finn v. Alliance Bank, 860 N.W.2d 638 (Minn. 2015), and the Minnesota law of void contracts. This requires reversing summary judgment against Papadimos and Kanios. In the Boosalis case, the Eighth Circuit likewise reversed and remanded because the district erred in instructing the jury on the MUFTA elements of "good faith" and "reasonably equivalent value." In both cases, the Eighth Circuit concluded the district court erred in concluding that Minnesota rather than federal law governed the award of prejudgment interest. The majority decision was penned by Circuit Judge James B. Loken. Meanwhile, Circuit Judge Kelly concurred in part and dissented in part. In his dissenting opinion, Judge Kelly opined that the district court properly applied Finn to the unique "facts and circumstances" of these cases. Further, he did not consider the district court's conclusion that the interest payments at issue were not in exchange for reasonably equivalent value to be inconsistent with Finn. The Minnesota Supreme Court left open the possibility that such interest payments, when made in connection with a Ponzi scheme unsupported by any legitimate business transaction, using money siphoned from earlier lenders, are void under Minnesota law. Thus, he dissented as to Section II but otherwise concurred in the court's opinion. A copy of the Eighth Circuit's Ruling is available at https://bit.ly/3k7WuS1 from Leagle.com. About Petters Company Based in Minnetonka, Minn., Petters Group Worldwide LLC was a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., was the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, was indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct.6, 2008. Petters Aviation was a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. The Official Committee of Unsecured Creditors was represented by Fafinski Mark & Johnson, P.A. Trustee Douglas A. Kelley was represented by Lindquist & Vennum LLP. PHARMAGREEN BIOTECH: Chapter 11 Bankruptcy Filing Stays EMA Suit ---------------------------------------------------------------- District Judge Lorna G. Schofield stayed the case captioned EMA FINANCIAL, LLC, Plaintiff, v. PHARMAGREEN BIOTECH INC., Defendant, No. 20 Civ. 5662 (LGS) (S.D.N.Y.) in light of defendant-debtor's bankruptcy case. The Defendant filed a notice of the Debtor's Chapter 11 bankruptcy on August 8, 2020. Judge Schofield ordered that the Defendant file a letter on the status of the bankruptcy proceeding. The Defendant thereafter shall file status letters every 45 days. A copy of the Court's Order is available at https://bit.ly/3lWDoyC from Leagle.com. About Pharmagreen Biotech Pharmagreen Biotech, Inc. (OTC: PHBI), a company specializing in the development of highest quality tissue cultured starter plantlets for the cannabis and hemp industry Pharmagreen Biotech, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 20-13886) on Aug. 7, 2020, disclosing under $1 million in both assets and liabilities. The Debtor hired Thomas E. Crowe, Professional Law Corporation, as counsel. The Debtor tapped Andrew N. Rana as accountant. PRO-FIT DEVELOPMENT: Hires Alexander E. Borell as Special Counsel ----------------------------------------------------------------- Pro-Fit Development, Inc. seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ the Law Offices of Alexander E. Borell as its special counsel. Alexander E. Borell will represent the Debtor in state court litigation against Rainmaker360, LLC and several other parties, and defend the Debtor in the foreclosure action brought against it by Rainmaker360. The firm will charge $350 per hour for work provided by attorneys and $100 per hour for work provided by law clerks and paralegals. The firm has requested a $10,000 retainer. The firm can be reached through: Miriam Sumpter-Richard, Esq. Law Offices of Alexander E. Borell 201 E Kennedy Blvd #1680 Tampa, FL 33602 Tel: (813) 621-6221 About Pro-Fit Development Pro-Fit Development, Inc. filed a chapter 11 petition (Bankr. M.D. Fla. Case No. 16-06717) on Aug. 4, 2016. The Debtor listed total assets of $1.53 million and total liabilities of $1.41 million. The case is assigned to Judge Rodney K. May. The Debtor is represented by Buddy D. Ford, Esq., Jonathan A. Semach, Esq., and J. Ryan Yant, Esq., at Buddy D. Ford, P.A. No official committee of unsecured creditors has been appointed in the case. PROFESSIONAL FINANCIAL: Taps Silicon Valley as Auctioneer --------------------------------------------------------- Professional Financial Investors, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Northern District of California to hire Silicon Valley Disposition, Inc. as their auctioneer. The firm will provide the following services: -- arrange for, advertise, and conduct a public negotiated sale followed by an online auction of the assets; -- consign any assets not sold through negotiated sale into one or more of auctioneer's on-line auctions; -- conduct sales exclusively over the Internet at www.svdisposition.com; -- advertise sales on the Website; -- include any unsold assets in a subsequent auction and/or move and store them at another location; and -- provide the Debtors with a statement listing the assets sold and the purchase price of each sold asset within 20 days of any completed sale or auction. The firm has agreed to waive its standard commission equal to 15 percent of the amount of each winning bid. Instead, the auctioneer agreed to charge each winning bidder its standard buyer's premium equal to 18 percent of the amount of the winning bid or negotiated sale price for each sold asset for its own account as compensation for auction or negotiated sale services provided up to and including the actual auction event. Michael Hogan of Silicon Valley disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael Hogan Silicon Valley Disposition, Inc. 381 Beach Road Burlingame, CA 94010 Telephone: (650) 344-3282 About Professional Financial Investors Professional Financial Investors, Inc., and Professional Investors Security Fund, Inc. are both engaged in activities related to real estate. On July 16, 2020, a group of creditors filed an involuntary Chapter 11 petition (Bankr. N.D. Cal. Case No. 20-30579) against Professional Investors. On July 26, 2020, Professional Financial sought Chapter 11 protection (Bankr. N.D. Cal. Case No. 20-30604). The cases are jointly administered under Case No. 20-30604. At the time of the filing, Professional Financial disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Dennis Montali oversees the cases. Ori Katz, Esq., at Sheppard, Mullin, Richter & Hampton, LLP, is Debtors' legal counsel. Debtors have also tapped Trodella & Lapping LLP as their conflicts counsel and Ragghianti Freitas LLP, Weinstein & Numbers LLP, Wilson Elser Moskowitz Edelman & Dicker LLP, and Nardell Chitsaz & Associates as their special counsel. Michael Hogan of Armanino LLP was appointed as Debtors' chief restructuring officer. FTI Consulting, Inc., as financial advisor. On Aug. 19, 2020, the Office of the U.S. Trustee appointed a committee of unsecured creditors. The committee is represented by Pachulski Stang Ziehl & Jones, LLP. PROTECTIVE POWER: Seeks to Hire Genova & Malin as Legal Counsel --------------------------------------------------------------- Protective Power Systems and Controls, Inc. seeks authority from the United States Bankruptcy Court for the Southern District of New York to hire Genova & Malin as its legal counsel. The firm will render the following services: (a) advise Debtor regarding its powers, duties, financial situation and the management of its property; (b) take necessary actions to void liens against Debtor's property; (c) prepare legal papers; and (d) provide other legal services related to Debtor's Chapter 11 case. Michelle Trier, Esq., a partner at Genova & Malin, disclosed in court filings that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Andrea B. Malin, Esq. Michelle L. Trier, Esq. Genova & Malin Hampton Business Center 1136 Route 9 Wappingers Falls, NY 12590 Telephone: (845) 298-1600 About Protective Power Systems and Controls Protective Power Systems and Controls, Inc. -- https://power-now.net -- is a power generation service company founded in 2002. Protective Power Systems and Controls, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-36029) on Oct. 9, 2020. The petition was signed by Andrea Patierno, president. At the time of filing, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. Michelle L. Trier, Esq. at GENOVA & MALIN serves as the Debtor as counsel. PRYSM INC: Court Approves Chapter 11 Reorganization Plan Unopposed ------------------------------------------------------------------ Law360 reports that big-screen display and software maker Prysm Inc. received approval September 2020 from a Delaware bankruptcy judge for its Chapter 11 plan of reorganization, just five weeks after filing its insolvency petitions as no parties to the case opposed the plan. During a hearing conducted via phone and videoconference, debtor attorney Ronald S. Gellert of Gellert Scali Busenkell & Brown LLC said the pre-packaged plan hadn't changed much since it was filed on Aug. 6, the first day of the case. It calls for senior secured lender ESW Capital to pay $12 million in cash for Prysm's software assets. A full-text copy of the Disclosure Statement dated August 5, 2020, is available at https://tinyurl.com/y55narll from PacerMonitor.com at no charge. About Prysm Inc. Prysm, Inc. -- https://www.prysm.com -- was formed in 2005 to develop, market and sell large-format displays using its proprietary Laser Phosphor Display or LPD technology. It introduced its first generation of tile-based LPD displays in 2010 and its second generation of single panel large-format displays in 2018. Prysm is headquartered in Milpitas California where it conducts product development, testing, service, support, management, and administrative operations. Prysm, Inc., based in Milpitas, CA, filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-11924) on Aug. 5, 2020. The petition was signed by Amit Jain, president, CEO and chairman of the Board. In its petition, the Debtor disclosed $4,636,132 in assets and $273,635,076 in liabilities. The Hon. John T. Dorsey presides over the case. GELLERT SCALI BUSENKELL & BROWN, LLC, serves as bankruptcy counsel to the Debtor. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims and noticing agent. PRYSM INC: Unsecureds to Get $500K in Plan ------------------------------------------ On the eve of the confirmation hearing, Prysm, Inc., submitted a Second Amended Prepackaged Chapter 11 Plan. As set forth in the Disclosure Statement, the Plan provides for (1) the reorganization of the Debtor by retiring, cancelling, extinguishing and/or discharging the Debtor's prepetition Equity Interests and issuing New Equity in the Reorganized Debtor to ESW, in its capacity as the Plan Sponsor or an affiliate and, to the extent that it exercises the Subscription Option, to ESW, in its capacity as the DIP Lender; and (2) the treatment of the holders of Allowed Claims in accordance with the priority scheme established by the Bankruptcy Code or as otherwise agreed. GII Senior Secured Claims (Class 1) are impaired. The GII Election Option, in which case GII shall forgo the GII Cash Recovery and instead receive its Pro Rata Share of the Secured Lenders Recovery and in which case the GII Senior Secured Claim shall be treated pari passu with, and not senior to, the Secured Noteholder Claims and as if it is included in Class 2. Secured Noteholder Claims (Class 2) are impaired. The holder of the GII Claim) against the Debtor shall receive on or about the Effective Date, on account of and in full and complete settlement, release and discharge of, and in exchange for, such Allowed Secured Noteholder Claim, its Pro Rata Share of the Secured Lenders Recovery, subject to GII Election Option. General Unsecured Claims (Class 5) are impaired. On or about the Effective Date, each holder of an Allowed General Unsecured Claim will receive its pro rata share of the GUC Recovery. The class is deemed to reject the Plan. The Disclosure Statement defines "GUC Recovery" as $500,000, less any amount required to pay Allowed Non-Budgeted Committee Professional Compensation Claims. Equity Interests (Class 6) are impaired. No Distributions will be made to holders of Equity Interests. On the Effective Date, all Equity Interests shall be deemed automatically cancelled, released, and extinguished without further action by the Debtor or the Reorganized Debtor, and any and all obligation of the Debtor and the Reorganized Debtor thereunder shall be discharged. The Distribution Trust Assets shall be used by the Distribution Trust to fund all Distribution Trust Plan Distribution Obligations. A full-text copy of the Second Amended Prepackaged Chapter 11 Plan dated September 14, 2020, is available at https://tinyurl.com/yysptmxv from PacerMonitor.com at no charge. Attorneys for Debtor: Charles J. Brown, III Michael Busenkell Ronald S. Gellert Amy D. Brown Holly Megan Smith GELLERT SCALI BUSENKELL & BROWN, LLC 1201 N. Orange St., Suite 300 Wilmington, Delaware 19801 Telephone: (302) 425-5800 Facsimile: (302) 425-5814 Email: cbrown@gsbblaw.com mbusenkell@gsbblaw.com rgellert@gsbblaw.com abrown@gsbblaw.com hmegansmith@gsbblaw.com About Prysm Inc. Prysm, Inc. -- https://www.prysm.com -- was formed in 2005 to develop, market and sell large-format displays using its proprietary Laser Phosphor Display or LPD technology. It introduced its first generation of tile-based LPD displays in 2010 and its second generation of single panel large-format displays in 2018. Prysm is headquartered in Milpitas California where it conducts product development, testing, service, support, management, and administrative operations. Prysm, Inc., based in Milpitas, CA, filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-11924) on Aug. 5, 2020. The petition was signed by Amit Jain, president, CEO and chairman of the Board. In its petition, the Debtor disclosed $4,636,132 in assets and $273,635,076 in liabilities. The Hon. John T. Dorsey presides over the case. GELLERT SCALI BUSENKELL & BROWN, LLC, serves as bankruptcy counsel to the Debtor. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims and noticing agent. RACING SERVICES: 8th Cir. BAP Rules on North Dakota Claim --------------------------------------------------------- The State of North Dakota, ex rel. Wayne Stenehjem, Attorney General, filed a claim against Racing Services, Inc., in its purported representative capacity on behalf of eligible nonprofit organizations and as assignee of Team Makers. Susan Bala, a creditor and sole equity holder of the Debtor, objected to the Claim as did the Chapter 7 Trustee. The Bankruptcy Court denied the State's claim filed on behalf of unnamed charities for lack of standing, and denied the State's claim on behalf of Team Makers on the equitable doctrine of laches. The State appealed. Upon review, the United States Bankruptcy Appellate Panel, Eighth Circuit affirmed in part, and reversed and remanded in part. The Appellate Panel affirmed the Bankruptcy Court's ruling that the State's Claim as filed on behalf of Team Makers and unnamed charities is denied for lack of standing under parens patriae. While the Appellate Court agreed with the Bankruptcy Court that finality is a very important interest, particularly in a case of this duration, the Appellate Court concluded that laches does not apply to tardily-filed claims that are filed in time to permit distribution under 11 USC section 726(a). The Appellate Court, therefore, reversed the Bankruptcy Court's ruling that the Team Maker Claim assigned to the State was barred by laches, and remanded the case to the Bankruptcy Court for reconsideration of the Claim. The Debtor operated a pari-mutuel horse racing technology and service business in North Dakota. It filed its Chapter 11 petition on Feb. 3, 2004. The case was converted to Chapter 7 months later. The major controversy is rooted in a ruling by the District Court, ten years into the case, that the State was not authorized to collect taxes under North Dakota law on account of wagering. As a result, the State owed the Debtor's bankruptcy estate millions of dollars for taxes improperly collected. The parties eventually settled; the State paid the estate over $15 million. Other creditors then asserted new claims for a piece of the large cash infusion. The Bankruptcy Court sustained the objections to these claims (other than one of Bala's claims) after a multiple-day trial. The State filed a new proof of claim over a month after the Bankruptcy Court issued its ruling on the other claims. Its Claim was made "as Representative for the benefit of eligible nonprofit organizations" under the doctrine of parens patriae. The only charity listed by name, however, was Team Makers. Acknowledging that the majority of (if not the only) account wagering activity was conducted through Team Makers, the State subsequently entered into a Consent and Assignment Agreement with Team Makers for the express purpose of eliminating any question regarding its ability to pursue the Claim against the Debtor's estate for the charity's benefit. Bala and the Trustee objected to the Claim on the grounds that the State lacked standing, the Claim lacked merit, and the Claim was untimely. PW Enterprises, Inc., a major creditor, filed a brief in support of the State's Claim. After an evidentiary hearing on the claim objection, the Bankruptcy Court denied the State's Claim for lack of standing. It focused on the State's failure to establish 1) that a substantial segment of the population was injured, and 2) that the Claim belonged to anyone other than Team Makers, and if there were indeed any other identifiable charities that were involved, that they were incapable of bringing an action on their own. The Bankruptcy Court also held that while the State may have standing to represent Team Makers by virtue of the Consent Agreement, the Team Makers Claim was barred by laches. According to Appellate Court, the concept of parens patriae creates a right for a state to sue to prevent or repair harm to quasi-sovereign interests. To have parens patriea standing, a state must prove two elements: a quasi-sovereign interest distinct from that of a particular party, and injury to a substantial segment of the state's population. Regarding the first element, a state's mere assertion of quasi-sovereign interests is not sufficient to grant parens patriae standing if the relief sought is limited to monetary damages for injuries suffered to individual parties; such an award will not compensate the state for any harm done to its quasi-sovereign interest. Regarding the second element, there is no specific number of persons who must be affected for a state to invoke the doctrine, but "more must be alleged than injury to an identifiable group of individual residents." The State dedicated a substantial amount of its briefing to cases and statutes supporting the position that the State's authority to regulate gaming activities and to oversee charitable organizations for the benefit of the public is broad, and that it has a quasi-sovereign interest in protecting the integrity of the system.3 While that position may have merit, it does not speak to the question that the State must address, and that the Bankruptcy Court asked directly at the Evidentiary Hearing: How is the State's interest distinct from Team Makers? The State failed to demonstrate a quasi-sovereign interest distinct from the Team Makers Claim, a necessary element to establish parens patriae standing. It sought monetary damages for one private charitable organization rather than compensation for any damage done to its quasi-sovereign interest in protecting the public from inappropriate gaming activities. Therefore, the Appellate Court affirmed the Bankruptcy Court's holding that the State lacked parens patriae authority in this case. The Bankruptcy Court ruled that to the extent the State had authority to assert Team Makers' Claim by virtue of the Consent Agreement, it was nonetheless barred by laches, and therefore denied. Laches is an equitable defense based on the maxim that equity aids the vigilant, not those who sleep on their rights. It applies when a claimant inexcusably delays in asserting its claim and thereby unduly prejudices the party against whom the claim ultimately is asserted. To successfully assert laches as a defense, a defendant must prove three elements: 1) a delay in asserting a right or claim; 2) that the delay was inexcusable; and 3) undue prejudice to the party against whom the claim is asserted. At the Evidentiary Hearing, the State did not dispute that there was a delay, nor did it dispute that Bala was prejudiced. It claimed that the delay was excusable because many things had changed through the course of the litigation. In addition, the State asserted that the cause of the prejudice was the Bankruptcy Court's earlier ruling. The State argued that laches does not apply to tardily-filed claims that are filed in time to permit distribution under section 726(a). In other words, since the Trustee has not made his final distribution in the Debtor's case, the State's Claim was filed in time to permit payment; pursuant to section 726(a)(3), laches cannot apply. According to the BAP, by enacting section 726(a)(2)(C), Congress intended to permit distribution to late filed claims of known creditors so long as the claims are filed in time to permit the distribution. Because the statutory scheme for claims allowance and priority in Chapter 7 cases is expressly set forth in the Bankruptcy Code it would be improper for a court to employ the doctrine of laches to modify that scheme. As the Supreme Court stated in United States v. Mack, "Laches is not a defense to an action filed within the applicable statute of limitations." One of the principal reasons for this rule is that "separation of powers principles dictate that federal courts not apply laches to bar a federal statutory claim that is timely filed under an express federal statute of limitations." The application of laches is inconsistent with the language of section 726 and its underlying policy. The State also argued that the Bankruptcy Court erred in disallowing its tardily-filed claim, citing section 502(b). According to the BAP, a plain reading of section 502(b) suggests that the bankruptcy court should determine whether a creditor's claim is enforceable against the debtor as of the date the bankruptcy petition was filed. The fact that laches is a recognized defense in North Dakota does not render the Claim unenforceable against the Debtor under "applicable law" as contemplated by section 502(b)(1). By definition, the laches defense was not available as of the date the Debtor's petition was filed. The appellate case is captioned State of North Dakota, ex rel. Wayne Stenehjem, Attorney General, Claimant-Appellant, v. Susan Bala; Kip M. Kaler, Trustee, Objectors-Appellees, No. 20-6002 (8th Cir. BAP). A copy of the BAP's Ruling is available at https://bit.ly/359iPs7 from Leagle.com. Racing Services filed a voluntary Chapter 11 bankruptcy petition (Bankr. D. Del. 04-_____) on Feb. 3, 2004. On Feb. 12, 2004, the case was transferred to the U.S. Bankruptcy Court for the District of North Dakota (Bankr. N.Dak. Case No. 04-30236). On June 15, 2004, RSI's bankruptcy case was converted from Chapter 11 to Chapter 7, and Kip Kaler was appointed as the Chapter 7 trustee. RADIO CANTICO: Seeks to Hire Alla Kachan as Counsel --------------------------------------------------- Radio Cantico Nuevo, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ the Law Offices of Alla Kachan, P.C., as counsel to the Debtor. Radio Cantico requires Alla Kachan to: a) assist the Debtor in administering the bankruptcy case; b) make such motions or taking such action as may be appropriate or necessary under the Bankruptcy Code; c) represent the Debtor in prosecuting adversary proceedings to collect assets of the estate and such other actions as Debtor deem appropriate; d) take such steps as may be necessary for Debtor to marshal and protect the estate's assets; e) negotiate with the Debtor's creditors in formulating a plan of reorganization for Debtor in this case; f) draft and prosecute the confirmation of the Debtor's plan of reorganization in this case; and g) render such additional services as Debtor may require in this case. Alla Kachan will be paid at these hourly rates: Attorneys $475 Paraprofessionals $250 The Debtor paid Alla Kachan a retainer of $8,283. Alla Kachan has drawn down for pre-filing date services the amount of $3,000, and $5,283 was left on the petition date. Alla Kachan will also be reimbursed for reasonable out-of-pocket expenses incurred. Alla Kachan, partner of the Law Offices of Alla Kachan, P.C., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Alla Kachan can be reached at: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 3099 Coney Island Avenue, 3rd Floor Brooklyn, NY 11235 Tel.: (718) 513-3145 About Radio Cantico Nuevo Radio Cantico Nuevo filed a voluntary Chapter 11 petition (Bankr. E.D.N.Y. Case No. 19-47051) on Nov. 21, 2019, listing under $1 million in both assets and liabilities, and is represented by Alla Kachan, Esq., at the Law Offices of Alla Kachan, P.C. RAINBOW LAND: H.H. Land Objects to Disclosure Statement ------------------------------------------------------- Secured Creditor H.H. Land & Cattle Company, a Nevada corporation, objects to the Disclosure Statement of Debtor Rainbow Land & Cattle Company, LLC. H.H. Land claims that the Disclosure Statement does not include adequate information regarding administrative claims. The Disclosure Statement fails to account for how the attorneys' fees and expert fees will be paid, even though Debtor's cash on hand is in the amount of only $3,101.16. H.H. Land points out that the Disclosure Statement does not include adequate information regarding the Debtor's proposed RV resort development. The Debtor provides no information about its experience or the experience of its members in development of any kind. H.H. Land asserts that the Disclosure Statement does not include adequate information regarding the Debtor's proposed marketing or refinance of the non-RV resort land parcels and water rights. H.H. Land further asserts that the Disclosure Statement does not include adequate information regarding the liquidation analysis. The liquidation analysis inexplicably concludes that funds in an amount in excess of the difference between Debtor's assets and liabilities would be available for disbursement to Class 2 and Class 3 creditors. H.H. Land states that Disclosure Statement does not include adequate information regarding the value of Debtor's assets. The Debtor provides no evidence as to how it arrived at the estimated value of its option to purchase land. A full-text copy of H.H. Land's objection to the Disclosure Statement dated Sept. 1, 2020, is available at https://tinyurl.com/yxsvzpdl from PacerMonitor.com at no charge. Attorneys for Secured Creditor H.H. Land: Michael B. Wixom, Esq. Katie M. Weber, Esq. SMITH LARSEN & WIXOM 1935 Village Center Circle Las Vegas, Nevada 89134 Tel: (702) 252-5002 Fax: (702) 252-5006 E-mail: mbw@slwlaw.com kw@slwlaw.com About Rainbow Land & Cattle Company Rainbow Land & Cattle Company, LLC, a privately held company engaged in activities related to real estate, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 19-50627) on May 30, 2019. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The case has been assigned to Judge Bruce T. Beesley. The Debtor is represented by Holly E. Estes, Esq., at Estes Law, P.C. RAVN AIR GROUP: Hires Farber Hass as Accountant ----------------------------------------------- Ravn Air Group, Inc., and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Farber Hass Hurley LLP as their accountant. Ravn Air Group requires Farber Hass to: a. prepare audits of the Debtors' Retirement Plan and Health Care Trust for the 2019 and 2020 tax years; and b. audit supplementary information, including assets, loans, leases in default, reportable transactions, nonexempt transactions, and delinquent participant contributions. The hourly rates charged by Farber Hassares are as follows: Engagement Partner $300 Concurring Partner $250 Senior Audit Manager $235 Audit Senior/Supervisor $150 Audit Senior $120 Intern $75 Farber Hass Hurley has requested a retainer in the amount of $90,000 to cover the expected fees and expenses to be incurred in preparing the audits of the Debtors’ Retirement Plan and Health Care Trust for the 2019 and 2020 tax years. Farber Hass Hurley neither holds nor represents an interest materially adverse to the Debtors or their respective estates, and is a "disinterested person," as defined in section 101(14) of the Bankruptcy Code and as required by section 327(a) of the Bankruptcy Code, according to court filings. The firm can be reached through: Amy Coy Farber Hass Hurley LLP 9301 Oakdale Ave Ste 230 Chatsworth, CA, 91311-6541 Phone: (818) 895-1943 About Ravn Air Group, Inc. Ravn Air Group, Inc. -- https://www.flyravn.com/ -- was formed through the combination of five Alaskan air transportation businesses in 2009, creating the largest regional air carrier and network in the state. Ravn owns and, until the COVID-19-related disruptions, operated 72 aircraft at 21 hub airports and 73 facilities, serving 115 destinations in Alaska with up to 400 daily flights. Until the COVID-19-related disruptions, Ravn Air Group and its affiliates had over 1,300 employees (non-union), and it carried over 740,000 passengers on an annual basis. Ravn Air Group provides air transportation and logistics services to the passenger, mail, charter, and freight markets in Alaska, pursuant to U.S. Department of Transportation approval as three separate certificated air carriers. Two of the carriers (RavnAir ALASKA and PenAir) operate under Federal Aviation Administration Part 121 certificates and the other (RavnAir CONNECT) operates under an FAA Part 135 certificate. In addition to carrying passengers, many of whom fly on Medicaid-subsidized tickets, other key customers include companies in the oil and gas industry, the seafood industry, the mining industry, and the travel and tourism industries. Ravn Air Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10755) on April 5, 2020. At the time of the filing, Debtors was estimated to have assets of between and $100 million to $500 million and liabilities of the same range. Judge Brendan Linehan Shannon oversees the cases. The Debtors tapped Keller Benvenutti Kim LLP as bankruptcy counsel; Blank Rome LLP as special corporate and local bankruptcy counsel; Conway Mackenzie, LLC as financial advisor; and Stretto as claims and noticing agent. ROCHESTER DRUG: Class Claimants' Subpoenas vs Insurers Squashed --------------------------------------------------------------- A group of Private Insurance Class Action Claimants have moved under Rule 9016 FRBP and Rule 45 FRCP for an order compelling Empire Healthcare HMO, Inc., Humana Health Company of New York, Inc. and Aetna Health Inc. to produce documents related to the influence of opioid abuse on health insurance premiums. The Insurers opposed the motions, requesting that the subpoenas be quashed and that sanctions be imposed against the Class Claimants. Upon analysis, Bankruptcy Judge Paul R. Warren denied the Class Claimants' motions to compel and granted the Insurers' cross-motions to quash the subpoenas. The request of the Insurers for the imposition of sanctions, under Rule 45(d)(1) FRCP, was denied, without prejudice to the Insurers seeking relief from the United States District Court for the Northern District of Ohio, the Multi-District Litigation ("MDL") court that issued a stay of discovery in connection with In re National Prescription Opiate Litigation. On July 1, 2020, the Class Claimants filed a motion seeking leave to file a class Proof of Claim. While that motion was awaiting a hearing, on July 6, 2020, the Class Claimants issued subpoenas to the Insurers (non-debtor third parties), demanding the production of documents. The motion concerning the filing of a class Proof of Claim was resolved by a Stipulation and Order, filed on July 31, 2020. On August 10, 2020, the Class Claimants filed a Proof of Claim with the Court-appointed claims agent. Attached to the Proof of Claim is a 27-page "Addendum" describing the basis for the claim, as well as a copy of a 122-page Class Action Complaint filed with the United States District Court for the Northern District of Illinois. In their Proof of Claim, the Class Claimants readily acknowledge that "[b]y order Dated Dec. 14, 2017 (as supplemented by orders dated Jan. 11, 2018 and Febr. 16, 2018), U.S. District Judge Dan Aaron Polster imposed a stay in the MDL against prosecution of almost all opioid-related litigation (including the Private Insurance Class Actions), except for certain bellweather cases." As a result, "Private Insurance Plaintiffs have been precluded from conducting discovery because of the stay imposed in connection with the MDL." The day after filing the Proof of Claim, the Claims Claimants filed motions to compel the production of documents by each of the Insurers. The Class Claimants did not seek leave to conduct an examination under Rule 2004 FRBP prior to issuing the subpoenas. Neither was there any litigation pending (in this Court) involving the Class Claimants and the Insurers, either in the form of an adversary proceeding or contested matter. The Insurers jointly filed lengthy opposition to the motions to compel production. In a nutshell, the Insurers asserted five grounds upon which the subpoenas should be quashed: (1) the subpoenas were issued without authority because they do not relate to a contested matter; (2) the Class Claimants did not seek permission to conduct an examination under Rule 2004 FRBP; (3) the legal theory of the Class Claimants is flawed; (4) the subpoenas are overbroad and unduly burdensome; and (5) the subpoenas seek confidential trade secrets. The Insurers request that sanctions be imposed against the Class Claimants, under Rule 45(d)(1) FRCP. The Class Claimants issued subpoenas under Rule 45, despite the fact that no adversary proceeding or contested matter involving the parties was pending, and despite the absence of a request for authorization to conduct an examination (and receiving permission to do so) under Rule 2004. Faced with similar facts, the Bankruptcy Court for the Northern District of Georgia held that under Rule 45(a)(2), to be proper, a "subpoena must issue from the court where [an] adversary proceeding, contested petition, or proceedings to vacate an order for relief or to determine any other contested matter is pending." In re Patel, No. 16-65074-LRC, 2017 Bankr. LEXIS 216, at *5-6 (Bankr. N.D. Ga. Jan. 26, 2017). The Patel court recognized that, in bankruptcy cases, Rule 2004 provides an exception to Rule 45(a)(2. The Patel court held: "[U]nder a plain reading of Federal Rule 45 and Rules 9002(1), 9016, and 2004, to obtain a subpoena for production of documents, a party in interest must either be a party to an adversary proceeding, contested petition, or contested matter, or, when there is no litigation pending, have obtained a Rule 2004 order." The Court agreed with the holding of the Patel court. Here, because no adversary proceeding or litigated contested matter was pending, and no order authorizing an examination of the Insurers was granted by this Court under Rule 2004, the subpoenas issued by the Class Claimants were improper and invalid. Having resolved the cross-motion on these grounds, the Court need not address the other three grounds asserted by the Insurers in the cross-motion. The motions of the Class Claimants, requesting that the Insurers be compelled to produce documents, are therefore denied. The cross-motion of the Insurers, requesting that the subpoenas be quashed, is granted. In the cross-motion, as a parting shot, the Insurers requested that the Court impose sanctions against the Class Claimants, under Rule 45(d)(1), arguing that the subpoenas subjected them to undue burden and expense. The Court, in the exercise of its discretion, declined to take up that part of the cross-motion claiming that the subpoenas were overbroad or unduly burdensome. Resolution of the overbreadth claim is not necessary to the disposition of the motion to quash. Consequently, the Court declined the invitation to consider the imposition of sanctions under Rule 45(d)(1). A copy of the Court's Decision and Order is available at https://bit.ly/3k5w8jF from Leagle.com. About Rochester Drug Cooperative Rochester Drug Cooperative, Inc., is an independently owned New York cooperative corporation formed in 1905 and incorporated in 1948 with a principal office and place of business located at 50 Jet View Drive, Rochester, New York 14624. Its principal business is to warehouse, merchandise, and then distribute, on a cooperative basis, drugs, pharmaceutical supplies, medical equipment and other merchandise commonly sold in drug stores, pharmacies, health and beauty stores, and durable medical equipment business. It is a wholesale regional drug cooperative that operates as both a buying cooperative and a traditional drug distribution company created for the purpose of helping independent pharmacies compete in the current healthcare environment. Rochester Drug Cooperative sought Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-20230) on March 12, 2020, for the purpose of winding-down the Debtor's operations and liquidating its assets. The Debtor was estimated to have $50 million to $100 million in assets and $100 million to $500 million in liabilities. The Hon. Paul R. Warren is the case judge. The Debtor tapped Bond, Schoeneck & King, PLLC, led by Stephen A. Donato, as counsel and Epiq Corporate Restructuring, LLC as the claims and noticing agent. The Debtor has hired Huron as its financial advisor; Harter Secrest & Emery LLP as its general corporate and litigation counsel; Colliers International NJ, LLC as realtor for the Fairfield facility; and CBRE, Inc. as realtor for the Rochester facility; and Greendyke Jencik & Associates as accountants. An official committee of unsecured creditors has retained Pachulski Stang Ziehl & Jones LLP as its legal advisor and GlassRatner Advisory & Capital Group, LLC as financial advisor. The Debtor filed a Chapter 11 Plan of Liquidation and Disclosure Statement Dated July 21, 2020. A hearing to consider approval of the Disclosure Statement has been set for November 13, 2020. The Plan is predicated on the sales of certain of the Debtor's assets, the liquidation of remaining assets and the collection of accounts receivable. The Plan will be implemented through this process and the Debtor will make Distributions from the proceeds as set forth in the Plan. ROYAL ALICE: Court Won't Limit Powers of Chapter 11 Trustee ----------------------------------------------------------- Royal Alice Properties LLC filed an emergency motion for (a) Reconsideration of the Court's Order Dated Sept. 4, 2020; (b) Authorization To Continue To Prosecute and Defend Adversary Proceedings and/or (c) Stay Pending Appeal. Upon consideration of the facts presented, Bankruptcy Judge Meredith S. Grabill granted the motion in part and denied it in part. The Court declined to limit the Chapter 11 Trustee's powers and duties but modified its Sept. 4 orders to allow the current management and counsel to file an opposition to AMAG, Inc.'s Motion for Summary Judgment and a reply brief in support of the Debtor's Motion for Summary Judgment in the AMAG Adversary. The Court denied the Debtor's request for a stay pending appeal, as neither the law nor the facts support the relief requested. Royal Alice Properties, LLC filed for chapter 11 bankruptcy relief on August 29, 2019. After considering the evidence presented over the course of a four-day trial, applicable law, and the arguments of the parties, on Sept. 4, 2020, the Court issued a Memorandum Opinion and Order, granting the requests of the US Trustee and creditor Arrowhead to appoint a trustee pursuant to 11 USC section 1104(a), among other things, and issued an Order instructing the US Trustee to appoint a case trustee. On behalf of the Debtor, the current management and counsel moved pursuant to Federal Rule of Civil Procedure 59, made applicable by Bankruptcy Rule 9023, and requested the Court to reconsider its Sept. 4 Orders in two major ways: 1. The Debtor requested the Court allow Susan Hoffman, the current member/manager of the Debtor, "to conduct the day-to-day repairs and management" of the Debtor's immovable properties and to limit the powers of the case trustee only to "financial management of the Debtor and supervision of the plan of reorganization." 2. The Debtor requested that current management and counsel be allowed to continue the prosecution of the Debtor's causes of action in the adversary proceeding filed against secured creditor, AMAG, Inc., (Adv. No. 19-1133), and the defense of the adversary proceeding against the Debtor filed by creditor Arrowhead, which sought to hold the Debtor liable for the judgment debts of insiders and non-debtor affiliates of the Debtor under a single-business-enterprise theory, (Adv. No. 20-1022). The Debtor further stated, "[i]f the Court declines to grant in substantial part the relief requested in this Emergency Motion, the Debtor will be constrained to appeal the 9/4 Order." The Debtor asked for a stay pending appeal pursuant to Bankruptcy Rule 8007(a). Stating that "the 9/4 Order is in error to the extent of its appointment of a Chapter 11 trustee with plenary powers," the Debtor asked the Court to bifurcate the chapter 11 trustee's role "to define those matters for which the trustee will have plenary discretion and those matters with which the trustee will cooperate with the Debtor." The Debtor did not explain how the Court's appointment of a trustee to operate the business is a clear error of law, according to Judge Grabill. Judge Grabill explained a trustee was appointed because the evidence showed a lack of transparency and breach of the duties of management in operating the Debtor's business and keeping the Court and creditors informed of the true status and condition of the business, as well as the serious conflicts of interest possessed by current management of the Debtor. The Debtor's creditors, the US Trustee, and the Bankruptcy Court must be accurately informed regarding how much money is actually coming into the estate, the real expenses of the Debtor, and the source of the money is that is being used to pay those expenses. Susan Hoffman asked the Court to allow her to maintain the Debtor's properties without the need to obtain consent from the case trustee for repairs or improvements; however, that would allow Susan Hoffman carte blanche spending on behalf of the Debtor to maintain the properties and would run counter to the Trustee's ability to rehabilitate the Debtor's operations, reconcile the expenses of this Debtor with its income, and perform his duties under section 1106 of the Bankruptcy Code, Judge Grabill said. The Court has reviewed the cases cited by the Debtor. Unlike the businesses in those cases, the operation of the business of this Debtor requires no technical expertise that cannot be provided by the trustee. Therefore, the Court declined to bifurcate or limit the section 1106 powers and duties of the Trustee to operate the Debtor's business here. The current management and counsel for the Debtor also wished to (i) continue prosecuting the AMAG Adversary filed by the Debtor against AMAG challenging the amount owed to AMAG and (ii) continue defending the Arrowhead Adversary. The current management and counsel are concerned that the trustee "will not aggressively prosecute and defend" those adversary proceedings, but do not cite any case law in support of their request, Judge Grabill pointed out. Because the interests of the Debtor and current management are aligned in both of the adversaries, Judge Grabill said she expects the Trustee and current managers of the Debtor will work closely with one another to prosecute the AMAG adversary and defend the Arrowhead adversary efficiently. The parties to the AMAG Adversary believed all claims can be resolved via summary judgment without the need for a trial. If the claims alleged in the AMAG adversary are not resolved through summary judgment, the four-day trial in this matter, previously set to begin Oct. 6, 2020, was slated to instead begin on Oct. 26, 2020. On the Debtor's stay request, the Court held that the Debtor made no argument regarding harm to other parties or service in the public interest and has not met its burden to justify a stay pending any appeal of this Court's Sept. 4 Orders. About Royal Alice Properties Royal Alice Properties, LLC, owns, manages and rents the building and real estate located on the 900 block of Royal Street in the French Quarter, New Orleans, Louisiana. The condominium units are located at 906, 910-12 Royal St. New Orleans, LA 70116. Royal Alice Properties sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 19-12337) on Aug. 29, 2019. In the petition signed by Susan Hoffman, member/manager, the Debtor was estimated $1 million to $10 million in both assets and liabilities. The case is assigned to Judge Meredith S. Grabill. Leo D. Congeni, Esq., at Congeni Law Firm, LLC, represents the Debtor. Dwayne M. Murray has been appointed as Chapter 11 Trustee. He has retained Louis M. Phillips, Esq., at Kelly Hart & Pitre as counsel. RTW PROPERTIES: Taps Sheehan & Ramsey as Legal Counsel ------------------------------------------------------ RTW Properties, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to hire Sheehan & Ramsey, PLLC to handle its Chapter 11 case. Sheehan & Ramsey's hourly rates are as follows: Patrick A. Sheehan $325 Associate Attorneys $250 Paralegals $125 Patrick Sheehan, Esq., member of Sheehan & Ramsey, disclosed in court filings that he and his firm do not have any connection with the Debtor and its bankruptcy estate and that the firm does not have any adverse interest to the estate. The counsel can be reached through: Patrick Sheehan, Esq. Sheehan & Ramsey, PLLC 429 Porter Ave Ocean Springs, MS 39564 Tel: 228-875-0572 Email: Mike@sheehanlawfirm.com About RTW Properties, LLC RTW Properties, LLC filed its voluntary petition for relief under Chapter 11 of the Bankurptcy Court (Bankr. S.D. Miss. Case No. 20-51479) on Oct. 5, 2020. In the petition signed by Paul Chase Pritchard, assistant manager, the Debtor estimated $1 million to $10 million in both assets and liabilities. Patrick Sheehan, Esq. at Sheehan & Ramsey, PLLC serves as the Debtor's legal counsel. RYFIELD PROPERTIES: Hires McClain Crouse as Accountant ------------------------------------------------------ Ryfield Properties, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to employ McClain, Crouse & Co, PS, as its accountant. McClain Crouse will assist the Debtor with monthly operating reports, financial statements, payroll, bookkeeping, tax returns, and any other reasonable duties assigned by the Debtor. The accountant will perform the required services at its customary hourly rates which currently range 35 per hour to $115 hour, depending on the experience and expertise of the individual performing the work. McClain Crouse is disinterested within the meaning of 11 U.S.C. Secs. 327(a) and 101(14), according to court filings. The firm can be reached through: Karen Krouse Mc Clain Crouse & Co 227 W 8th St. Port Angeles, WA 98362 Phone: +1 360-457-3303 About Ryfield Properties Ryfield Properties, Inc., a privately held company in the quarrying business, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-11360) on May 7, 2020. Katy Rygaard, a principal at Ryfield Properties, signed the petition. At the time of the filing, Debtor was estimated to have $1 million to $10 million in assets and liabilities. Judge Christopher M. Alston oversees the case. Debtor has tapped the Law Office of Faye C. Rasch as its bankruptcy counsel and Patrick Irwin Law Firm as its special counsel. SCHOOL DISTRICT: Seeks to Hire Bruner Wright as Legal Counsel ------------------------------------------------------------- School District Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to hire Bruner Wright, P.A. to handle its Chapter 11 case. Bruner Wright's rates for attorneys and paralegals are as follows: Robert C. Bruner $400/hour Thomas B. Woodward $400/hour Byron Wright III $300/hour Paralegal $150/hour The firm was paid $9,217 as a retainer for the proceeding from the Debtor's principal. Of that amount, $1,717 was utilized to pay the filing fee in the case, and $1,520 was utilized in connection with prepetition services. Bruner Wright, P.A. is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Byron Wright III, Esq. Bruner Wright, P.A. 2810 Remington Green Circle Tallahassee, FL 32308 Telephone: (850) 385-0342 Facsimile: (850) 270-2441 About School District Services, Inc. School District Services, Inc. is a licensed and bonded freight shipping and trucking company running freight hauling business from Tallahassee, Fla. School District Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 20-40381) on October 19, 2020. Ivery Luckey, the company's chief executive officer, signed the petition. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $500,001 and $1 million. Bruner Wright, P.A. is Debtor's legal counsel. SHAWNEE CAB: Reaches Deal With Primary Creditor; IRS Gets 41% ------------------------------------------------------------- Shawnee Cab, Corp., filed with the U.S. Bankruptcy Court for the Eastern District of New York a Plan of Reorganization and a Disclosure Statement. Majority creditor DePalma Acquisition I LLC was paid in accordance with settlement terms reached by the parties in full settlement of the resulting deficiency upon the surrender of the collateral medallions number 8L40 and 8L41. The agreed upon amount of $270,000 was paid in full, in one lump sum payment upon the entry of the signed order approving the settlement agreement. The secured portion of the claim of DePalma Acquisition is deemed settled in full upon the surrender of the referenced medallions, currently held in storage with the TLC. The unsecured non-priority claim of DePalma Acquisition is impaired. DePalma Acquisition has received a 41% dividend of the unsecured deficiency claim, equal to $270,000.00, in one lump sum payment as by the terms of the settlement agreement between the parties. The unsecured non-priority claim of Internal Revenue Service shall be paid a 41% dividend (618.87) of their claim, in one lump sum payment on the effective date of the Plan. Equity interest holders Oleg Shokin and Semyon Itskov retain their interests. The Plan was financed by personal contributions from the personal funds of the two corporate principals. The required proofs of funds and affidavits of contribution, will be duly provided to the Office of the United States Trustee prior to plan confirmation. The claim of the one remaining general unsecured creditor Internal Revenue Service, will be similarly financed by a personal contribution of the two principals of the Debtor. Gary Shokin and Semyon Itskov, as principals and shareholders, will continue to manage the day to day operations of the Debtor to the extent necessary. A full-text copy of the Disclosure Statement dated September 1, 2020, is available at https://tinyurl.com/y57ftbkh from PacerMonitor.com at no charge. A full-text copy of the Disclosure Statement dated September 23, 2020, is available at https://tinyurl.com/y3szn7n2 from PacerMonitor.com at no charge. The Debtor is represented by: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 3099 Coney Island Avenue, 3rd Floor Brooklyn, NY 11235 Tel: (718) 513-3145 Fax : (347) 342-3156 Email: alla@kachanlaw.com About Shawnee Cab Shawnee Cab, Corp. filed Chapter 11 Petition (Bankr. E.D.N.Y. Case No. 19-42927) on May 10, 2019. Alla Kachan, Esq. of LAW OFFICES OF ALLA KACHAN, P.C. is the Debtor's Counsel. SHILOH INDUSTRIES: Committee Hires Foley & Lardner as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Shiloh Industries, Inc., and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Foley & Lardner LLP, as counsel to the Committee. Shiloh Industries requires Foley & Lardner to: a. advise the Committee with respect to its rights, powers and duties; b. advise the Committee in its consultations with the Debtors relative to the administration of the Chapter 11 Cases; c. advise the Committee in analyzing the claims of the Debtors' creditors and in negotiating with such creditors; d. advise the Committee with respect to its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operations of the Debtors' businesses and the desirability of the continuance of such businesses, motions filed, assets of the estates and any other matters relevant to the Chapter 11 Cases or to the formulation of a plan; e. advise the Committee with respect to the contemplated sale of the Debtors' assets; f. assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, cash collateral usage or financing to be obtained in these Chapter 11 Cases and the terms of any plans of reorganization or liquidation of the Debtors; g. assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in these cases; h. represent the Committee at hearings and other proceedings; i. review and analyze motions, applications, orders, statements of operations, and schedules filed with the Court and advising the Committee as to their propriety; j. take necessary actions to protect and preserve the interests of the Committee, including: (i) possible prosecution of actions on its behalf, (ii) if appropriate, negotiations concerning all litigation in which the Debtors are involved, and (iii) if appropriate, reviewing and analyzing claims filed against the Debtors' estates; k. appear, as appropriate, before this Court, the appellate courts, and the U.S. Trustee, to protect the interests of the Committee before those courts and before the U.S. States Trustee; l. assist the Committee in preparing pleadings, motions, applications, answers, orders, reports and papers as may be necessary in furtherance of the Committee's interests and objections; and m. perform such other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. Foley & Lardner will be paid at these hourly rates: Partner $850 to $1140 Senior Counsel $700 to $715 Associate $405 to $645 Paralegal $245 to $265 Foley & Lardner will also be reimbursed for reasonable out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the following is provided in response to the request for additional information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Not applicable. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Foley & Lardner has provided a staffing plan to the Committee and expects to develop a budget to reasonably comply with the U.S. Trustee's request for information and additional disclosures, as to which Foley & Lardner reserves all rights. The Committee has approved Foley & Lardner's proposed hourly billing rates. Erika L. Morabito, partner of Foley & Lardner LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and (a) is not creditors, equity security holders or insiders of the Debtors; (b) has not been, within two years before the date of the filing of the Debtors' chapter 11 petition, directors, officers or employees of the Debtors; and (c) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. Foley & Lardner can be reached at: Erika L. Morabito, Esq. Foley & Lardner LLP 3000 K Street, N.W., Suite 600 Washington, DC 20007 Tel: (202) 672-5300 About Shiloh Industries Shiloh Industries, Inc., and its subsidiaries are global innovative solutions providers focusing on lightweighting technologies that provide environmental and safety benefits to the mobility markets. On Aug. 30, 2020, Shiloh Industries and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12024). The petitions were signed by Lillian Etzkorn, authorized person. The Debtors reported total consolidated assets of $664,170,000 and total consolidated debt of $563,360,000 as of April 30, 2020. The Debtors have tapped Jones Day and Richards, Layton & Finger P.A. as their legal counsel; Houlihan Lokey Capital Inc. as financial advisor, Ernst & Young LLP as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. On Sept. 15, 2020, the United States Trustee appointed the five member official committee of unsecured creditors. The committee selected Foley & Lardner LLP as its lead counsel, and Morris James as Delaware counsel. SMOKY MOUNTAIN: Property Owners Lack Standing to Appeal ------------------------------------------------------- The case captioned RONNIE C. HEDGEPETH, JR., SHIRA HEDGEPETH, ROBERT L. YOUNG, and MARY H. YOUNG, Appellants, v. SMOKY MOUNTAIN COUNTRY CLUB PROPERTY OWNERS' ASSOCIATION, INC., and SMCC CLUBHOUSE, LLC, Appellees, Civil Case No. 1:19-cv-00360-MR (W.D.N.C.) is an appeal by Ronnie C. Hedgepeth, Jr., Shira Hedgepeth, Robert L. Young, and Mary H. Young of the Bankruptcy Court's Dec. 19, 2019 Order confirming the Association and SMCC Clubhouse, LLC's joint proposed plan. The Appellees moved to dismiss the appeal. Upon review, Chief District Judge Martin Reidinger held that the Appellants do not have standing to appeal the Bankruptcy Court's order. Accordingly, Judge Reidinger dismissed the Appellants' Notice of Appeal. Smoky Mountain Country Club is a planned community in Swain County, North Carolina that is governed by the North Carolina Planned Community Act, N.C. The Community is also governed by a Declaration, which was recorded in 1999 by the developer, Conleys Creek Limited Partnership to create covenants, conditions, restrictions, and reservations of easements in the Community. Under the Declaration, property owners in the Community must be members of the Smoky Mountain Country Club Property Owners' Association. The Declaration states that CCLP will construct, manage, and operate a clubhouse, swimming pool, and two tennis courts in the Community. The Declaration further states that the Property Owners shall have a perpetual nonexclusive right to use the Community's clubhouse and its amenities; that the Property Owners shall pay monthly "Clubhouse Dues" to the Association; and that the Association shall assess, bill, and collect the Clubhouse Dues from the Property Owners to pay those dues to CCLP. On Jan. 13, 2013, CCLP assigned its right to receive the Clubhouse Dues to SMCC Clubhouse, LLC. SMCC is an Appellee in this appeal. For several years, the Association assessed, billed, and collected the Clubhouse Dues from the Property Owners. In 2014, the Property Owners gained control of the Association following an election of new board members. In September 2014, the Association obtained legal advice that it was not obligated to assess, bill, or collect the Clubhouse Dues and sent written notice informing the Property Owners that it would "no longer bill for or collect the monthly fee for Clubhouse Dues." While some of the Property Owners continued to pay Clubhouse Dues directly to SMCC, others did not pay Clubhouse Dues at all. On Oct. 13, 2014, CCLP, SMCC, and Marshall Cornblum filed an action against the Association in the Superior Court of Swain County, asserting that the Association had breached its contract by failing to collect and pay the Clubhouse Dues. On Jan. 26, 2016, the trial court granted the Association's motion for summary judgment on the breach of contract claim. On Sept. 5, 2017, the North Carolina Court of Appeals reversed the trial court's judgment and remanded the case for further proceedings. In that decision, the Court of Appeals concluded that there was a genuine issue of material fact as to whether the Association breached its contract. While the Court of Appeals did not determine the Property Owners' obligation to pay the Clubhouse Dues because they were not parties to the suit, it noted "that homeowners within a planned community are generally obligated to respect not only real covenants governing their property, but also to pay any dues which are assessed by their association." The Court of Appeals noted, however, that "the Planned Community Act does allow that when homeowners take control of an association board from the developer, the association may relieve itself of obligations made on its behalf by the developer, where it is found that the arrangement was "not bona fide or was unconscionable[.]"As such, the Court of Appeals left open the possibility on remand that the Association could void the Declaration by bringing "forth evidence tending to show that the provisions in the 1999 Declaration are not 'bona fide' or are 'unconscionable.'" On March 26, 2019, the Association adopted a resolution that terminated its obligation to pay Clubhouse Dues on the grounds that the Declaration was unconscionable and was not bona fide under the Planned Community Act. A jury trial was subsequently conducted on the breach of contract claim. The jury returned a verdict against the Association, thus impliedly finding that the Declaration was bona fide and not unconscionable. On May 31, 2019, judgment was entered against the Association on the breach of contract claim in the amount of $5,149,921.94, with an additional $1,921,132.52 in prejudgment interest. The Association appealed. On July 26, 2019, the Association filed a bankruptcy petition pursuant to Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of North Carolina. On Nov. 18, 2019, the Association and SMCC jointly filed a proposed Plan of Reorganization with the Bankruptcy Court which was amended on Dec. 17, 2019. After a hearing on the amended proposed Plan, the Bankruptcy Court entered an Order on Dec. 19, 2019 confirming the Amended Plan over the objections that had been filed by the Appellants as Property Owners. Under the confirmed terms of the Amended Plan, SMCC agreed to stay execution on the Judgment and the Association agreed to: (1) assess, bill, and collect overdue Clubhouse Dues from the Property Owners; (2) assess, bill, and collect future Clubhouse Dues from the Property Owners; (3) pay SMCC $1,500,000 in three annual $500,000 payments; (4) assess each of the Property Owners for their share of the $1,500,000; (5) dismiss the appeal of the Judgment; and (6) reinstate the Declaration that the Association terminated on March 26, 2019. The Appellants had objected to this Plan on the grounds that the provision calling on the Association to undertake to collect the $1,500,000 from the Property Owners subjected them to increased liability. On Dec. 31, 2019, the Property Owners filed a Notice of Appeal of the Confirmation Order. On March 25, 2020, the Appellees filed a "Motion to Dismiss Appeal." On March 26, 2020 Ronnie and Shira Hedgepeth filed a Complaint in Swain County Superior Court seeking a declaration that the Association has no right or authority to collect the Clubhouse Dues from the Property Owners. The Appellees moved to dismiss this appeal on the grounds that the Appellants lack standing. The Appellants argued that they have standing because they are persons aggrieved by the Bankruptcy Court's Order, which purportedly "diminishes their property, increases their burdens, and impairs their rights" by requiring the Association to assess them for their share of the $1,500,000 and the Clubhouse Dues. As such, the Appellants argued that the Bankruptcy Court's Order has a direct and adverse pecuniary effect on them. Judge Reidinger said the Appellants' premise for their assertion of standing is not supported by the record. Whether the Appellants owe the Association for the sums that the Association is charged to collect is the subject of other litigation in another court. As the Appellants aptly stated in their opposition to the present motion to dismiss, "[n]o proper determination has been made by either a state court or Article III federal court as to whether there exists a legal duty by Appellants to pay Clubhouse Dues." Because the Appellants' obligation to pay those sums is yet to be determined, the Bankruptcy Court's Order insufficiently affects the Appellants' interest as to confer standing. The Appellants also asserted they have standing because "[b]y the Confirmation Order, the bankruptcy court . . . creates a new liability on them by imposing an ongoing obligation to pay Clubhouse Dues to the POA which did not exist as of the Petition Date," and "the Confirmation Order imposes by judicial fiat a contractual liability on the Appellants which no court has ever determined is enforceable." Judge Reiginer stated that the Appellants simply misread the Confirmation Order. The Bankruptcy Court confirmed the Plan based on a finding that the Association "would be likely to succeed in any litigation challenging the right to assess Members for amounts required to be paid to SMCC Clubhouse under the Plan." This does not "create a new liability" or "impose . . . a contractual liability on the Appellants." It does not, in any way, dispose of the open question of whether the Appellants and the other Property Owners are liable to the Association. That question is left to the state court to answer in the pending litigation brought by the Appellants. A copy of the Court's Order is available at https://bit.ly/3dFdwEK from Leagle.com. About Smoky Mountain Country Club Property Smoky Mountain Country Club Property Owners Association, Inc., a North Carolina nonprofit corporation, is an association of homeowners of the Smoky Mountain Country Club, a residential planned community, in Whittier, North Carolina. Smoky Mountain Country Club Property Owners Association, Inc. filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 19-10286) on July 26, 2019. In the petition signed by Paul DeCarlo, president, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge George R. Hodges. John R. Miller Jr., Esq. at Rayburn Cooper & Durham, P.A., represents the Debtor. SONYA OWENS: Fails in Bid to Revive Bankruptcy Case --------------------------------------------------- The U.S. District Court for the District of Columbia on April 20, 2020, dismissed Ms. Sonya LaRaye Owens' pro se appeal from decisions by the U.S. Bankruptcy Court for the District of Columbia, finding that the Bankruptcy Court did not clearly err in its finding of facts or abuse its discretion, and because appeals from several of the Bankruptcy Court's orders were moot. Ms. Owens asked the District Court to reconsider that dismissal. Ms. Owens has also included a petition for a writ of error coram nobis pursuant to 28 U.S.C. section 1651(a). Because Ms. Owens has not sufficiently established that she is entitled to relief under Federal Rule of Civil Procedure 60(b) or Section 1651(a), District Judge Rudolph Contreras denied her motion for reconsideration. The motion for reconsideration involved several related proceedings centered around the foreclosure and sale of Ms. Owens' home and subsequent eviction proceedings before the D.C. courts. On Feb. 21, 2017, Ms. Owens' home was foreclosed upon and sold to Reliance Partners LLC. Ms. Owens subsequently filed a bankruptcy petition, which temporarily stayed eviction proceedings, but was later evicted from the property after the bankruptcy petition was dismissed by the Bankruptcy Court. On August 26, 2019, after filing an initial notice of appeal from the Bankruptcy Court, Ms. Owens filed an amended notice of appeal indicating she was broadly challenging "[a]ll orders, judgments, and decrees from July 19, 2019 thru present, including 7-26-19, 8-1-19, 8-6-19, and hereafter." On August 29, 2019, the Bankruptcy Court enjoined Ms. Owens from making any future bankruptcy filings under which an automatic stay would arise and frustrate Reliance's attempts to take possession of the property. On appeal, Ms. Owens asked the Court to "vacate all the decisions of the Bankruptcy court." As a result, the Court understood Ms. Owens to be appealing the following orders of the Bankruptcy Court: (1) a July 29, 2019 order shortening the time Ms. Owens had to respond to Reliance's emergency motion for relief from an automatic stay; (2) an August 1 order granting Reliance's motion and thus relief from the automatic stay; (3) an August 1 order denying Ms. Owens's motion to continue a related hearing; (4) an August 6 order dismissing Ms. Owens's bankruptcy petition; (5) an August 19, 2019 order denying reconsideration of dismissal; and (6) the August 29 order temporarily enjoining Ms. Owens from future bankruptcy filings and granting prospective relief from any automatic stay. On April 20, 2020, the District Court found that Ms. Owens's appeal of Judge Teel's order shortening the time frame to respond to Reliance's emergency motion was equitably and constitutionally moot. Ms. Owens's appeals of Judge Teel's orders granting relief from the automatic stay and the denial of her motion to continue were likewise moot. The District Court also affirmed the dismissal of Ms. Owens's case, Judge Teel's denial of her motion to reconsider the dismissal, and Judge Teel's order enjoining future filings. Ms. Owens moved for reconsideration of the District Court's April 20, 2020 decision, presumably under Rule 60(b). Rule 60(b) motions allow a party to seek relief from a final judgment "within a reasonable time" after entry of the judgment, but only for six enumerated reasons. Such reasons include, among other things, "mistake, inadvertence, surprise, or excusable neglect," "newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b)," and "any other reason that justifies relief." Upon analysis, Judge Contreras held that Ms. Owens failed to establish that she is entitled to relief under Rule 60(b) or any other specified avenues for seeking reconsideration of judicial decisions. Ms. Owens's motion for reconsideration raised a number of claims, none of which are developed or supported by relevant legal authority. She alleged that the District Court erred in its prior decision, demonstrated "animus[] towards the Appellant" and "work[ed] to hide fraud and racial discrimination." Ms. Owens further represented that the "Reliance Group LLC falsely alleged circumstances existed that required the bankruptcy court to grant their emergency motions against [her]," "Reliance Group LLC had no authority to dictate procedures to the bankruptcy court," and that "there is no court order that vacat[ed] or amend[ed] [the Bankruptcy Court's] decisions on July 19, 2019." In any event, she argued that the Bankruptcy Court lacked jurisdiction to issue its decision. Judge Contreras said that none of Ms. Owens's allegations amount to evidence of any "mistake, inadvertence, surprise, or excusable neglect" that would justify relief under Rule 60(b). She likewise does not allege, let alone demonstrate, any new evidence that "could not have been discovered in time to move for a new trial under Rule 59(b)." Instead, she attempted to relitigate old matters, and unconvincingly disputed the jurisdiction of the Bankruptcy court to hear her petition. None of these arguments undermine the District Court's earlier conclusions (1) that most of the appeals of the challenged orders are moot and (2) that the Court has no authority to grant the primary relief Ms. Owens sought, the return of her property. According to Ms. Owens, she also petitioned for a writ of error coram nobis. A petition for a writ of coram nobis is "an extraordinary remedy" that allows defendants to attack their convictions after they are no longer in custody. Because this is a civil matter, as opposed to a criminal prosecution, the District Court lacks any authority to grant a writ of error coram nobis pursuant to the All Writs Act. Regardless, even if the District Court possessed such authority, Ms. Owens provided no basis for it to grant such a writ. A copy of the Court's Memorandum Opinion is available at https://bit.ly/2GY0Jks from Leagle.com. About Sonya Owens Sonya LaRaye Owens filed for chapter 11 bankruptcy protection (Bankr. D.C. Case No. 19-00489) on July 19, 2019. SRH SOUTHAVEN: Files First Modification to Plan ----------------------------------------------- SRH Southaven, LLC. submitted this First Modification to Plan of Reorganization. The Plan, and specifically Article 4, Section 4.1, Class 1 of the Plan, is amended to include the following: Debtor's ongoing post-confirmation payments due under the Lease, Debtor's payment of the Allowed Cure Claim by the Cure Payments during the Cure Period, and Debtor's obligations under the Lease (except any obligations arising out of subparagraphs (c), (d), and (f) of paragraph 10.1) will be guaranteed by Southern Restaurant Operations, LLC in the form of the "Funding Commitment and Guaranty" (attached hereto as Exhibit "A") once an order confirming this Plan becomes a final non-appealable order of the Bankruptcy Court. Attorneys for the Debtor: Leslie M. Pineyro Aaron Anglin JONES & WALDEN, LLC 699 Piedmont Avenue, NE Atlanta, Georgia 30308 Tel: (404) 564-9300 A copy of the First Modification is available at: https://www.pacermonitor.com/view/PSXRUPY/SRH_Southaven_LLC__ganbke-20-40329__0061.0.pdf?mcid=tGE4TAMA About SRH Southaven SRH Southaven, LLC filed a petition for relief under Chapter 11 of Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-40329) on Feb. 20, 2020, listing under $1 million in both assets and liabilities. Leslie Pineyro, Esq., at Jones & Walden, LLC, is the Debtor's legal counsel. SRH SOUTHAVEN: No Class of Claims Impaired by Plan -------------------------------------------------- SRH Southaven, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia, Rome Division, a Plan of Reorganization and a Disclosure Statement. As provided in the Disclosure statement and Plan, Debtor shows that no class of claims is impaired by the Plan. Class 1 shall consist of the Allowed Cure Claim required for Debtor to assume an Assumed Agreement. Landlord holds a claim for prepetition arrearage in the amount of $132,867. The Debtor will cure the Allowed Cure Claim at the rate of $11,333 per month for 12 months or until the Allowed Cure Claim is paid in full with such Cure Period commencing on the last day of the first month following the Effective Date of the Plan, and continuing until paid in full. The membership interests in Debtor are owned by Southern Restaurant Holdings Memphis, LLC. The Member shall retain its Membership interest in Debtor following confirmation of the Plan. The source of funds for the payments pursuant to the Plan is the accounts receivable from Southern Restaurant Operations, LLC. Debtor anticipates recovering all future and past due payments under the Lease from Southern Restaurant Operations, LLC (SRO). Additionally, Southern Restaurant Operations, LLC will contribute funds to pay any administrative expense claim of Jones & Walden LLC. A full-text copy of the Disclosure Statement dated September 1, 2020, is available at https://tinyurl.com/y5e6jz64 from PacerMonitor.com at no charge. Attorneys for Debtor: Leslie M. Pineyro Aaron Anglin Jones & Walden, LLC 699 Piedmont Avenue, NE Atlanta, Georgia 30308 Tel: (404) 564-9300 About SRH Southaven SRH Southaven, LLC filed a petition for relief under Chapter 11 of Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-40329) on Feb. 20, 2020, listing under $1 million in both assets and liabilities. Leslie Pineyro, Esq., at Jones & Walden, LLC, is the Debtor's legal counsel. STEAKHOUSE HOLDINGS: Reaches Deal With Warren; Plan Filed --------------------------------------------------------- Steakhouse Holdings LLC filed with the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, a Plan of Reorganization and a Disclosure Statement. After the COVID-19 pandemic shut down Debtor's business and Debtor received conditional approval of the sale of its assets, the Warren Parties and Debtor, along with others, reached an omnibus settlement agreement that resulted in: * The sale of Debtor's assets to the Warren Parties; * The sale of Persistere's property to the Warren Parties; * A payment to Debtor in the amount of $109,500.00; * A payment to Persistere in the amount of $5,000.00; * Waiver or reduction of certain claims; and * Dismissal of the Warren Litigation. General unsecured claims shall be paid their pro-rata share of Debtor's remaining assets upon the final adjudication of the claims allowance process. The claim of Benjamin Cohen shall be paid his pro-rata share of Debtor's remaining assets upon the final adjudication of the claims allowance process, while claims of the Warren Parties shall be paid after claims in Classes 1 and 2 have been paid in full. The Debtor's equity interests will be retained by Mr. Benjamin Cohen under the terms of the Plan. As the Debtor is liquidating the entirety of its assets pursuant to the Plan and has ceased operations, the equity interests do not have any value. The sole class of equity interests is impaired. All payments due under the Plan will come from cash currently held by the Debtor. A full-text copy of the Disclosure Statement dated September 4, 2020, is available at https://tinyurl.com/yyfxz4cm from PacerMonitor at no charge. Counsel for Debtor: Garrett A. Nail PORTNOY GARNER & NAIL LLC 3350 Riverwood Parkway, Suite 460 Atlanta, Georgia 30339 Tel: (678) 385-9712 E-mail: gnail@pgnlaw.com About Steakhouse Holdings Steakhouse Holdings, LLC, filed a voluntary Chapter 11 petition (Bankr. N.D. Ga. Case No. 19-68250) on Nov. 12, 2019, and is represented by Garrett A. Nail, Esq., at Portnoy Garner & Nail,= LLC. The Debtor reported under $1 million in both assets and liabilities. TAILORED BRANDS: Taps Deloitte Tax to Provide Tax Services ---------------------------------------------------------- Tailored Brands, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte Tax LLP to provide them with tax services. Tailored Brands requires Deloitte Tax to: (i) Tax Advisory Engagement Letter. Deloitte Tax will provide tax advisory services to the Debtors on federal, foreign, state, and local tax matters on an as-requested basis. (ii) Tax Return Preparation Work Order. Deloitte Tax will assist the Debtors with preparing the 2019 federal and state and local income tax returns. Deloitte Tax will also provide tax advisory services to assist the Debtors with analyzing certain federal tax accounting methods to the taxable year ending February 1, 2020, as follows: a. provide tax advice to the Debtors' personnel on the definition of Qualified Improvement Property ("QIP") and expenditures that could potentially be deducted as a repair; b. review the Debtors' analysis of assets that meet the definition of QIP and a repair and calculations of the Internal Revenue Code ("IRC") section 481(a) adjustment and current year book-to-tax difference; c. prepare Form 3115, Application for Change in Accounting Method, for QIP placed in service under the automatic consent procedures for the Debtors' review and approval; d. provide tax advice to the Debtors' personnel on the Debtors' database of tuxedo rental items for Moores the Suit People, Inc. and Men's Wearhouse, Inc. for which tuxedo rental items are considered used and consumed in the current year; e. reconcile the Debtors' data to general ledger and preparing workpapers supporting the calculation of the current year tax return adjustment for the taxable year ending February 1, 2020, subject to Debtors' management review; f. read and analyze Debtor-prepared IRC 481(a) adjustment schedules and provide observations and comments for the Debtors' consideration; and g. prepare Form 3115, Application for Change in Accounting Method, for the domestic consolidated group for the deferral of gift cards under the automatic consent procedures for Debtors' review and approval. (iii) NOL Carryback Work Order. Deloitte Tax will provide tax advisory services to the Debtors in preparing a refund claim for the Debtors' 2014 to 2018 federal income tax payments by a carryback of net operating loss ("NOL") from their 2019 tax return under the amended section 172 of the IRC, as follows: a. prepare the Form 1139 Corporation Application for Tentative Refund for the Debtors, pursuant to the applicable code sections, for the Debtors' review and filing; and b. assist the Debtors with communicating and interfacing with the Internal Revenue Service in order to prosecute the refund claims. (iv) Tax Implementation Work Order. Deloitte Tax will assist with the Debtors' development of tax-related implementation steps intended to facilitate the restructuring of the Debtors with respect to their foreign affiliates, MWUK Holding Company, Ltd, TB UK Holding Limited, Moores Retail Group, Moores the Suit People, Golden Brand Clothing, and Tailored Brands Noborue Limited in tax year 2019. Deloitte Tax's services will include U.S. tax technical analysis and various U.S. calculations that apply to the Restructuring. (v) COVID-19 Retention Credit Work Order. Deloitte Tax will assist the Debtors with substantiating and documenting how its payments to employees qualify for the Retention Credit for Employers Subject to Closure Due to COVID-19 ("CRC"), as follows: a. provide general education to the Debtors regarding the CRC; b. analyze the Debtors' fact pattern by business segment/department and analyzing the Debtors' eligibility for the CRC based on operations being fully or partially suspended due to government orders; c. analyze the Debtors' comparison of gross receipts during calendar quarters of 2020 to the corresponding quarter in calendar year 2019; d. accumulate from the Debtors the records and information necessary to quantify and substantiate the CRC, which will be included in Deloitte Tax's information document request; e. calculate for the Debtors' review their quarterly CRC based on information accumulated and provided by the Debtors; f. advise the Debtors on the delay of payment of payroll taxes under section 2302 of the CARES Act; g. advise the Debtors with respect to the prescribed employment tax returns and forms necessary to report the CRC; h. asssit the Debtors with documenting the local, state, and/or federal mandates for the respective locations provided; i. assist the Debtors with documenting the communication provided to employees and/or received by employees during the impacted time period; j. prepare and organize supporting documentation for eligible employees, wages, and periods of impact; and (i) prepare a memorandum analyzing why the Debtors' fact pattern meets the requirements for the CRC. (vi) Tax Restructuring Work Order. Deloitte Tax will assist the Debtors with their evaluation of the tax consequences and considerations of their restructuring. As described in further detail in the Tax Restructuring Work Order, these services may include the following: (i) advise the Debtors with their efforts to calculate tax basis and/or perform tax basis computations in the stock interests, on a more detailed basis, where relevant and/or perform tax basis computations in domestic or foreign subsidiary investments relevant to the restructuring; (ii) advise the Debtors in their evaluation and modeling of the effects of liquidation, merging, or converting particular entities including the tax treatment of such transactions and impact to model outcomes of the restructuring; (iii) consult and perform supporting computations on the character of various estimated tax gains and losses to consider the impact to the overall restructuring evaluation, from a federal income tax perspective, of agreements or arrangements that can result in modifications of the Debtors' indebtedness not restructured and related planning; (iv) present tax impacts to modifications of unredeemed indebtedness including estimation of temporary or permanent differences between cancellation of indebtedness ("COD") impacts and future interest deductibility; (v) provide general consultations on transaction alternatives, changes to economic terms, and assisting the Debtors with the tax evaluation of alternative valuation outcomes; (vi) asssit the Debtors' management with communication of identified tax outcomes, assumptions, and alternatives; (vii) provide detailed IRC section 382 assistance as appropriate, which may include limitation computations, hypothetical calculations of various transaction alternatives, shareholder interviews, or other relevant assistance; (viii) provide consultations on attributable recovery implications of the restructuring, including application of IRC section 382 under one or more assumed transaction exchange proposals and application of related assumptions as applying under relevant bankruptcy code provisions and differences arising in out of court restructuring exchanges; (ix) provide consultations on the tax qualification of one or more aspects of the restructuring under a given set of tax rules; (x) assist the Debtors during the Debtors' implementation of the restructuring including the evaluation of transaction steps and documentation for U.S. federal income tax purposes; (xi) prepare tax technical memoranda, tax opinions, or other tax return related documentation of tax matters identified during the course of the engagement; (xii) assist the Debtors with other tax aspects of the Proposed Transaction; (xiii) assist the Debtors in evaluating the tax consequences of changes to the Debtors' assumptions, including the prospective recovery of the Debtors' tax attributes; (xiv) advise the Debtors in their evaluation and modeling of the structuring alternatives as part of the restructuring, including the effects on federal and state tax attributes and state apportionment; (xv) assist the Debtors and their counsel on the anticipated tax work plan for the implementation of any desired or recommended legal entity realignment or restructuring resulting from the restructuring; (xvi) advise the Debtors as to the treatment of post-petition or post forbearance interest for state and federal income tax purposes; (xvii) advise the Debtors as to the deductibility of interest for any financing anticipated in connection with the restructuring; (xviii) advise the Debtors as to the state and federal income tax treatment of pre-restructuring and post-restructuring reorganization costs; (xix) advise the Debtors on state income tax treatment and planning for restructuring or bankruptcy provisions in various jurisdictions; (xx) advise the Debtors on responding to tax notices and audits from various taxing authorities; (xxi) assist the Debtors with identifying potential tax refunds and advising the Debtors on procedures for tax refunds from tax authorities; (xxii) advise the Debtors on income tax return reporting of the restructuring and, if relevant, bankruptcy issues and related matters; (xxiii) assist the Debtors in documenting as appropriate, the tax recommendations, observations, and correspondence for any proposed restructuring alternative tax issue or other tax matter; (xxiv) advise the Debtors regarding other state or federal income tax questions that may arise in the course of the engagement, as requested by the Debtors, and as may be agreed to by Deloitte Tax; and (xxv) advise the Debtors on the tax implications of the Debtors' exit from contracts, lease arrangements, or facility locations. The NOL Carryback Work Order, the Tax Implementation Tax Order, and the COVID-19 Retention Credit Work Order, Deloitte Tax will charge the Debtors for such services at the following hourly rates: Professional Level Hourly Rates Hourly Rates for (Non-Specialists) National & Bankruptcy Tax Specialists Tax Partner $710 $895 Tax Managing Director $605 $805 Tax Senior Manager $535 $670 Tax Manager $430 $555 Tax Senior $330 $400 Tax Associate $195 $295 Pursuant to the terms of the Tax Return Preparation Work Order, Deloitte Tax will bill the Debtors in the amount of $305,000 for the preparation of tax returns and $35,000 for tax advisory services performed thereunder. In Tax Restructuring Work Order, Deloitte Tax will charge the Debtors for such services at the following hourly rates: Professional Level Hourly Rates Hourly Rates for (Non-Specialists) National & Bankruptcy Tax Specialists Partner/Principal $650 $835 Managing Director $605 $795 Senior Manager $520 $640 Manager $430 $545 Senior $320 $400 Associate $195 $295 Travis Bridenstine, a managing director at Deloitte Tax, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Travis Bridenstine Deloitte Tax LLP 128 El Camino Real, Suite 600 San Diego, CA 92130 Telephone: (619) 232-6500 About Tailored Brands Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty retailer of menswear, including suits, formal wear and a broad selection of polished and business casual offerings. It delivers personalized products and services through its convenient network of over 1,400 stores in the United States and Canada as well as its branded e-commerce websites at http://www.menswearhouse.com/and http://www.josbank.com.Its brands include Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G. Tailored Brands reported a net loss of $82.28 million for the year ended Feb. 1, 2020, compared to net earnings of $83.24 million for the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had $2.42 billion in total assets, $2.52 billion in total liabilities, and a total shareholders' deficit of $98.31 million. On Aug. 2, 2020, Tailored Brands and its subsidiaries sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900) on Aug. 2, 2020. As of July 4, 2020, Tailored Brands disclosed $2,482,124,043 in total assets and $2,839,642,691 in total liabilities. The Hon. Marvin Isgur is the case judge. The Debtors tapped Kirkland & Ellis LLP as general bankruptcy counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant Ozannes as co-bankruptcy counsel; PJT Partners LP as financial advisor; Alixpartners, LLP as restructuring advisor; and A&G Realty Partners, LLC as the real estate consultant and advisor. Prime Clerk LLC is the claims agent. TBH19 LLC: Hires LeFan Law as Special Counsel --------------------------------------------- TBH19, LLC, seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ LeFan Law, PC, as special litigation counsel to the Debtor. TBH19, LLC requires LeFan Law to represent and provide legal services to the Debtor in relation to the following cases: i. DBD Credit Funding LLC vs. Glorya Kaufman, etc., Case no. 19STCV31137, Los Angeles Superior Court; and ii. TBH19, LLC, et al., vs. Harvey Bookstein Living Trust, etc., Case No. 19STCV32941, pending in the Los Angeles Superior Court. LeFan Law will be paid at the hourly rate of $125 to $250. LeFan Law will also be reimbursed for reasonable out-of-pocket expenses incurred. Kris S. Lefan, shareholder of LeFan Law, PC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. LeFan Law can be reached at: Kris S. Lefan, Esq. LEFAN LAW, PC 1925 Century Park East, Suite 2140 Los Angeles, CA 90067 Tel: (213) 290-1091 About TBH19, LLC TBH19, LLC owns a single-family residential property located at 1011 N. Beverly Hills, Calif., having an appraised value of $125 million. The residence is considered one of the crowning achievements of renowned architect Gordon Kaufmann and was built in 1927 for Milton Getz, executive director of the Union Bank & Trust Company. TBH19 is managed by Lenard M. Ross. TBH19 sought for Chapter 11 protection (Bankr. C.D. Cal. Case No. 19-23823) on Nov. 24, 2019. The Debtor disclosed total assets of $125,042,955 and total liabilities of $75,126,312 as of the bankruptcy filing. Judge Vincent P. Zurzolo oversees the case. The Law Offices of Robert M. Yaspan, is the Debtor's legal counsel. TEEWINOT LIFE: Hires Thomas Hobson as Accountant ------------------------------------------------ Teewinot Life Sciences Corporation seeks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ Thomas Hobson & Company, PLLC, as accountant to the Debtor. Teewinot Life requires Thomas Hobson to prepare the Debtor's 2019 tax returns. Thomas Hobson will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Thomas A. Hobson, partner of Thomas Hobson & Company, PLLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Thomas Hobson can be reached at: Thomas A. Hobson THOMAS HOBSON & COMPANY, PLLC 3403 West Fletcher Ave. Tampa, FL 33618 Tel: (813) 269-2727 About Teewinot Life Sciences Corporation Teewinot Life Sciences Corp. operates as a Tampa, Fla.-based biotechnology pharmaceutical company focused on the biosynthetic production of pure pharmaceutical grade cannabinoids. Teewinot Life Sciences sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06489) on Aug. 27, 2020. Scott Foss-Kilburn, chief restructuring officer, signed the petition. At the time of the filing, Debtor had estimated assets of $25,993,546 and liabilities of $13,671,110. Stichter, Riedel, Blain & Postler, P.A., is the Debtor's legal counsel. THERMASTEEL INC: Trustee Hires Gentry Locke as Attorney ------------------------------------------------------- William E. Callahan, Jr., Trustee for Thermasteel, Inc., seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to retain Gentry Locke Rakes & Moore, LLP as his attorney. The Trustee requires Gentry to: a. provide legal research, review of relevant legal documents, preparation of pleadings, review of responsive pleadings, appearances in court, preparation of orders, preparation of discovery requests and responses, negotiation of legal issues, and other activities related to the administration of the estate and its property, including, without limitation, the sale of property of the estate, the review and objection to claims, the settlement of disputes and the preparation of a disclosure statement and plan for approval; and b. provide such other legal services that may be required to assist the Trustee in the performance of his duties in the case. The standard hourly billing rates for bankruptcy matters for Gentry are $300 to $450 for partners and $125 for paraprofessionals, plus reimbursement of all necessary out-of-pocket expenses at cost. William E. Callahan, Jr., Esq., partner of Gentry, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The firm can be reached through: William E. Callahan, Jr., Esq. Gentry Locke Rakes & Moore, LLP 10 Franklin Road S.E., Suite 900 Roanoke, VA 24011 Phone: 540-983-9300 Toll-Free: 866-983-0866 Fax: 540-983-9400 About Thermasteel Inc. Thermasteel, Inc. -- http://www.thermasteelinc.com/-- is a provider of panelized composite building systems, manufacturing composite foundation, floor, wall, roof and ceiling panels for residential, commercial and industrial applications. Its pre-insulated steel framing has been used in large military housing projects in the USA, Germany and Guantanamo Bay, Cuba. Production facilities are presently located in USA (Virginia, Alaska), and Russia, with products being shipped via container to many other countries. Thermasteel sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 18-71461) on Oct. 26, 2018. At the time of the filing, the Debtor estimated assets of $1 million to $10 million and liabilities of the same range. The case is assigned to Judge Paul M. Black. The Debtor tapped the Law Office of Richard D. Scott as its legal counsel. TRUE HEALTH DIAGNOSTICS: Plan Confirmation Order Upheld ------------------------------------------------------- Appellants in the case captioned ALEX M. AZAR II, in his official capacity as Secretary, United States Department of Health and Human Services; and SEEMA VERMA, in her official capacity as Administrator, Centers for Medicare and Medicaid Services, Appellants, v. THGH LIQUIDATING LLC, et al., Appellees, Civ. No. 19-2215-RGA (D. Del.) have taken an appeal from the plan confirmation order, dated Nov. 27, 2019 entered in the Chapter 11 cases of True Health Diagnostics, LLC and certain of its affiliates. Upon review, District Judge Richard G. Andrews affirmed the confirmation order. On May 30, 2017, True Health received a Notice of Suspension of Medicare Payments dated May 26, 2017, from CMS. The 2017 Suspension Notice informed True Health that CMS had suspended 100% of Medicare payments to True Health as of May 25, 2017 pursuant to 42 C.F.R. section 405.371(a)(2) on the basis of "credible allegations of fraud," which the letter explains can come from "any source" including "fraud hotline complaints." The 2017 Suspension Notice cited eight specific claims submitted over a one-year period that did not comply with Medicare guidelines. The eight claims represent 0.008% of all claims submitted by True Health to Medicare during the relevant time period. On June 13, 2019, True Health received a second suspension notice from CMS imposing another 100% payment suspension of Medicare payments to True Health. This second suspension was based upon five of the same claims -- all with 2017 service dates -- that were reviewed as part of the original 2017 suspension and investigation. On July 30, 2019, True Health and certain affiliates filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. True Health also initiated an adversary proceeding by filing a complaint and moving for a preliminary injunction against the U.S. Government to enforce the automatic stay and to enjoin the Government from withholding Medicare payments for post-petition services rendered by True Health. On August 29, 2019, the Bankruptcy Court granted the motion for preliminary injunction. True Health Diagnostics LLC v. Azar (In re THG Holdings LLC), 604 B.R. 154 (Bankr. D. Del. 2019); (the "Payment Order"). The Bankruptcy Court held it had jurisdiction under the Third Circuit's decision in University Medical Center v. Sullivan (In re University Medical Center), 973 F.2d 1065 (3d Cir. 1992) to enjoin CMS from withholding Medicare payments from True Health in bankruptcy. The Bankruptcy Court further held that "the post-petition Medicare reimbursements are indisputably property of the estate" under section 541(a) of the Bankruptcy Code, and that CMS's withholding of such payments after True Health's bankruptcy filing was a violation of the automatic stay under section 362(a) of the Bankruptcy Code. The Bankruptcy Court rejected the Government's contention that withholding Medicare payments to True Health fit within the police power exception to the automatic stay under section 362(b)(4) of the Bankruptcy Code. Prior to the hearing on the preliminary injunction motion, the Government represented to the Bankruptcy Court that it would not submit any evidence at the hearing. Notwithstanding that agreement, at the hearing the Government asserted that there were post-petition fraud allegations that were being investigated and attempted to introduce declarations. The Court sustained True Health's objection to the introduction of the declarations. Accordingly, the Bankruptcy Court entered the Payment Order, which, among other things, required the Government to continue making Medicare payments owed to True Health on or after the Petition Date ("Ordered Payments"). The Payment Order was set to expire on the earlier of (a) entry of a final judgment in the adversary proceeding, or (b) an order terminating the relief granted under the Order. On Sept. 12, 2019, the Government filed a timely notice of appeal of the Payment Order. The Bankruptcy Court and Judge Andrews both denied stays pending appeal. Judge Andrews later dismissed the interlocutory appeal. The Bankruptcy Court approved sales of substantially all of the Debtors' business on Sept. 20, 2019 and Oct. 30, 2019. In connection with winding down the Debtors' estates, the Debtors engaged in negotiations with their secured lenders and the official committee of unsecured creditors to formulate terms of a liquidating chapter 11 plan. After interim approval by the Bankruptcy Court, votes on the Plan were solicited from creditors, and the Plan was overwhelmingly accepted by all classes of claims entitled to vote. Classes 3 and 4 in the Plan, which represent secured claims against the Debtors entitled to vote, unanimously accepted the Plan. Class 5, which represents holders of unsecured claims, accepted the Plan by a wide margin. On Nov. 26, 2019, the Bankruptcy Court held a hearing to consider final approval of the Debtors' disclosure statement and final confirmation of portions of the Plan to which the Government had objected. Prior to the confirmation hearing, the Debtors and the Government entered into a stipulation governing the evidence to be admitted at the confirmation hearing. Pursuant to the Stipulation, the Government agreed that it would not introduce any evidence challenging the Debtors' evidence that they provided valuable and necessary services in exchange for the Ordered Payments. The Government also stipulated that it would not offer any evidence of misconduct by the Debtors or evidence supporting an administrative expense claim. As noted by the Bankruptcy Court, "The Government, in its closing argument, agreed that it was limiting its objections to feasibility, good faith, and the scope of the releases being provided under the terms of the Plan." Following oral argument, the Bankruptcy Court overruled each of the Government's remaining objections. On Nov. 27, 2019, the Bankruptcy Court entered the Confirmation Order in accordance with its ruling. The Bankruptcy Court stated that it would deny any motion for a stay without a hearing. On Dec. 1, 2019, the Government filed a notice of appeal with respect to the Confirmation Order together with an emergency motion for stay pending appeal. On Dec. 5, 2019, the Court issued an order denying the emergency motion. The Government contended that the Bankruptcy Court erred in confirming the plan because it ignored the Government's argument that the Payment Order was entered in contravention of In re Denby-Peterson, 941 F.3d 115 (3d Cir. 2019), a decision that was issued by the Third Circuit two months after the entry of the Payment Order. The Government further contended that the Bankruptcy Court erred in determining that the Plan was feasible, as required under section 1129(a)(11) of the Bankruptcy Code, and submitted in good faith as required under section 1129(a)(3) of the Bankruptcy Code, because the Debtors will lack funds to return the Ordered Payments in full upon reversal of the erroneously entered Payment Order. Finally, because there was no stay of the Confirmation Order, the Plan became effective and was substantially consummated on Dec. 6, 2019, and True Health argued that the appeal is now equitably moot and should be dismissed. Upon considering the facts presented, Judge Andrews held that the Government failed to explain how it is entitled to the return of the Ordered Payments under the Bankruptcy Code if the Payment Order is reversed. Absent a statutory mechanism to do so, such as proving an entitlement to a secured claim or an administrative expense, the Government has no automatic right to payment if it succeeds in its appeal; while the Government may have a claim against the Debtors' estate, that claim is not entitled to priority under the Bankruptcy Code. Having stipulated not to offer any proof of any administrative expense claim in connection with its objection to the entry of the Confirmation Order, Judge Andrews said the Government cannot now claim that the Plan was not feasible on the basis that it might have an administrative expense claim for the return of the Ordered Payments. The Government did not present evidence, authority, or even a valid legal theory. Thus, the Bankruptcy Court did not err in overruling the Government's plan feasibility objection based on an inadequate administrative claim reserve. A copy of the Court's Memorandum Opinion is available at https://bit.ly/2SVZTay from Leagle.com. Joseph H. Hunt , Assistant Attorney General; David C. Weiss , United States Attorney; Ellen W. Sleights , Assistant United States Attorney, Wilmington Delaware; Ruth A. Harvey , Lloyd H. Randolph , Seth B. Shapiro , Andrew Warner , Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., attorneys for appellant, the United States. Derek C. Abbott , Curtis S. Miller , Daniel B. Butz , Morris Nichols Arsht & Tunnell LLP, Wilmington, Delaware, attorneys for appellees, the TH Liquidating Trust and the Liquidating Debtors. About THG Holdings LLC THG Holdings LLC and its affiliates, including True Health LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11689) on July 30, 2019. THG's business is conducted in large part through True Health -- https://truehealthdiag.com/ -- a laboratory provider of diagnostic and disease-management solutions based in Frisco, Texas. It utilizes proprietary and innovative diagnostic to detect disease indicators that enable early stage and monitoring for a variety of chronic diseases. At the time of the filing, True Health Diagnostics was estimated to have assets of between $10 million and $50 million and liabilities of between $100 million and $500 million. The cases have been assigned to Judge John T. Dorsey. The Debtors tapped Morris, Nichols, Arsht & Tunnell LLP as counsel; Perkins Coie LLP as special counsel; SSG Advisors LLC as investment banker; and Epiq Corporate , LLC as claims, noticing and solicitation agent. Andrew Vara, acting U.S. trustee for Region 3, on Aug. 8, 2019, three creditors to serve on the official committee of creditors in the Chapter 11 cases. The Committee retained Elliott Greenleaf, P.C., and Cooley LLP, as attorneys, and GlassRatner Advisory & Capital Group, LLC as financial advisor. UCAST LLC: Seeks to Hire DLA Piper as Bankruptcy Counsel -------------------------------------------------------- uCast, LLC, QMS Holdings, LLC and Q Media Services, LLC seek authority from the United States Bankruptcy Court for the Southern District of California to hire DLA Piper LLP (US) as their bankruptcy counsel. uCast requires DLA Piper to: (a) investigate and analyze estate assets; (b) commence litigation, if appropriate, to assert avoiding power or other claims owned by the Debtors' estates; (c) investigate and locate any other undisclosed assets of the estates and, if necessary or beneficial to the estates, pursuing adversary proceedings to recover estate property and/or to avoid any other preferential and/or fraudulent pre- or post-petition transfers; (d) investigate liens against the assets of the Debtors' estates; (e) liquidate the estates' interest in any assets; (f) review proofs of claim filed in these cases, and prosecuting claim objections where appropriate; (g) prepare reports, applications, pleadings and orders; (h) prepare, filing, and prosecuting to confirmation a joint plan of liquidation for the Debtors; and (i) perform services related to such other legal matters as may arise in the administration of these estates. The firm's hourly rates are: Eric D. Goldberg, Partner $980 Marina Ahmad, Associate $620 William L. Countryman, Paralegal $360 DLA Piper received a retainer in the amount of $100,000, for all three of the Debtors. Eric Goldberg, Esq., a partner at DLA Piper, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. DLA Piper can be reached through: Eric Goldberg, Esq. DLA Piper LLP (US) 2000 Avenue of the Stars Suite 400 North Tower Los Angeles, CA 90067-4704 Tel: +1 310 595 3085 Fax: +1 310 595 3357 Email: eric.goldberg@dlapiper.com About uCast, LLC uCast, LLC, QMS Holdings, LLC and Q Media Services, LLC filed their voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Lead Case No. 20-04501) on Sep. 2, 2020. The petitions were signed by Neil Davis, chief business officer. At the time of filing, the Debtors each estimated 50,000 in assets and $10 million to $50 million in liabilities. Eric D. Goldberg, Esq., at DLA Piper LLP (US) serves as the Debtors' counsel. UNITED SHORE: Fitch Assigns BB- LT IDR, Outlook Stable ------------------------------------------------------ Fitch Ratings has assigned United Shore Financial Services, LLC a final 'BB-'Long-Term Issuer Default Rating (IDR). The Rating Outlook is Stable. In addition, Fitch has assigned a 'B+' final rating to United Wholesale's $800 million 5.5% senior unsecured notes due Nov. 15, 2025. Proceeds will be used to for general corporate purposes, and to fund a distribution to shareholders. The assignment of the final ratings follows the receipt of documents conforming to information already received by Fitch. The final ratings are the same as the expected ratings assigned to the IDRs and senior unsecured debt on Oct. 26, 2020. KEY RATING DRIVERS The final 'BB-' Long-Term IDR reflects United Wholesale's 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 final Long-Term IDR is also supported by increased funding flexibility following the execution of the senior unsecured note issuance. Rating constraints include the challenging economic environment, 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 to 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, although 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. However, 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. United Wholesale's servicing portfolio's asset-quality performance is considered 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, due to the company's focus on higher credit quality and primarily conventional conforming loans. However, 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 senior unsecured note issuance. Fitch evaluates United Wholesale 's leverage metrics primarily on the basis of 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 senior unsecured note issuance and the planned distribution to shareholders, Fitch estimates 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 the company will maintain leverage of 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 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. Pro forma for the $800 million unsecured issuance, United Wholesale's percentage of unsecured debt to total debt was 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 ratings, given actions already taken to shore up liquidity in response to the coronavirus pandemic, which is further augmented by the unsecured issuance. As of Sept, 30 2020, United Wholesale had approximately $1.3 billion of unrestricted cash, 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, strong and consistent earnings generation, and execution on plans to increase the proportion of committed credit facilities to 35%-40%. Fitch's 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 Factors that could, individually or collectively, lead to negative rating action/downgrade include an inability to execute on an increase in the proportion of committed funding; 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. The senior unsecured debt rating is primarily sensitive to changes in United Wholesale's 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. UW OSHKOSH: Hires New Director After Bankruptcy Exit ---------------------------------------------------- Nathaniel Shuda of Oshkosh Northwestern reports that the University of Wisconsin-Oshkosh's private foundation has hired a new executive director after emerging from bankruptcy as the result of a financial scandal involving two former university executives. Greg Giles started in his new role as head of University of Wisconsin Oshkosh Foundation Inc. September. In his new role, Giles will be responsible for: * Leading foundation fundraising initiatives by collaborating with the university, the Oshkosh community and the UW System. * Setting and enforcing "policies and procedures to ensure the Foundation operates at the highest level of integrity and stewardship" and creating a philanthropic vision for the university. * Overseeing "all major and planned gifts, alumni relations, special events, annual giving, and corporate and donor relations activities designed to raise funds for various university capital and ongoing needs." "It's an exciting time for the UW Oshkosh Foundation and we welcome Greg back to the community," foundation board Chairman Tim Mulloy said in a statement. "With his leadership and expertise, we look forward to the next chapter of the Foundation and advancing our mission of positively impacting students' and faculties' lives." About University of Wisconsin Oshkosh Foundation Established in 1963, the University of Wisconsin Oshkosh Foundation, Inc. -- https://www.uwosh.edu/foundation -- was created to promote, receive, invest and disburse gifts to meet the goals and needs of the University of Wisconsin Oshkosh. Its offices are located in the Alumni Welcome and Conference Center along the Fox River. UW Oshkosh Foundation is a separate and distinct legal entity from UW Oshkosh and qualifies as a tax-exempt 501(c)(3) organization under the United States Internal Revenue Code. It owns a fee simple interest in the Alumni Welcome & Conference Center located at 625 Pearl Avenue, Oshkosh, valued at $11.8 million. It is also a fee simple owner of a residence located at 1423 Congress Avenue, Oshkosh, with a current value of $375,000. UW Oshkosh Foundation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis. Case No. 17-28077) on Aug. 17, 2017. In the petition signed by board chairman Timothy C. Mulloy, the Debtor disclosed $14.84 million in assets and $15.87 million in liabilities. Judge Susan V. Kelley presides over the case. The Debtor hired Steinhilber Swanson LLP as its bankruptcy counsel; Martin Cowie as its chief financial officer; and CliftonLarsonAllen as its accountant. VALLEY EQUITIES: Trustee Hires Danning Gill as Counsel ------------------------------------------------------ Jason M. Rund, the Chapter 11 Trustee of Valley Equities, LLC, seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Danning Gill Israel & Krasnoff, LLP, as counsel to the Trustee. Valley Equities requires Danning Gill to: a. aid the Trustee in investigating the Debtors' financial affairs and transactions; b. prepare a motion to convert the case to Chapter 7, if appropriate; c. assist the Trustee with legal issues relating to the marketing and sale of the real property owned by the Debtor located at 444 North "H" Street, San Bernardino, CA 92410 (the "Property"); d. respond to or oppose motions for relief from stay, where appropriate; e. investigate and locate any undisclosed assets of the estate and, if necessary or beneficial to the estate, to pursue adversary proceedings to recover property of the estate and/or to avoid any preferential and/or fraudulent transfers; f. prosecute claims objections, if appropriate, to the extent that funds are generated for the estate; and g. perform services related to such other legal matters as may arise in the administration of the estate. Danning Gill will be paid at these hourly rates: Attorneys $375 to $695 Paralegals $210 to $280 Danning Gill will also be reimbursed for reasonable out-of-pocket expenses incurred. Brad D. Krasnoff, a partner of Danning Gill Israel, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Danning Gill can be reached at: Brad D. Krasnoff, Esq. DANNING GILL ISRAEL & KRASNOFF, LLP 1901 Avenue of the Stars, Suite 450 Los Angeles, CA 90067-6006 Tel: (310) 277-0077 About Valley Equities Valley Equities, LLC, filed a Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 20-15688) on June 24, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Elder Law Center, P.C. VERITY HEALTH: Court Rules on SGM Objection to Confirmation Order ----------------------------------------------------------------- Bankruptcy Judge Ernest M. Robles sustained in part and overruled in part Strategic Global Management, Inc.'s objection to the form of the order confirming Debtors Verity Health System of California, Inc. and affiliates' modified second amended plan. On August 12, 2020, the Court conducted a hearing on the Debtors' motion to confirm the Modified Second Amended Joint Chapter 11 Plan (Dated July 2, 2020) proposed by the Debtors, the Official Committee of Unsecured Creditors, and the Debtors' Prepetition Secured Creditors. On August 12, 2020, the Court issued a ruling setting forth the reasons why the Plan would be confirmed. On August 14, 2020, the Court entered an order confirming the Plan. Strategic Global Management, Inc. objected to the form of the Confirmation Order, and requested the modification of certain provisions in the Confirmation Order and the inclusion of additional language in the Confirmation Order. On August 16, 2020, the Debtors filed a response to the SGM Objection, in which the Debtors argued that no changes to the Confirmation Order were warranted. On August 20, SGM filed a Notice of Appeal of the Confirmation Order. On August 25, 2020, the Court issued an Order on SGM's Objection. The Order set forth the Court's preliminary findings on the SGM Objection and provided the parties an opportunity to respond thereto. According to Judge Robles, the SGM Objection constituted a Rule 7052 motion to amend or make additional findings within the meaning of Bankruptcy Rule 8002(b)(1)(A). The Confirmation Order contains findings of fact and conclusions of law made pursuant to Bankruptcy Rule 7052. Through the Objection, SGM sought modification of the conclusions of law that are set forth in the Confirmation Order at paragraph 17. Specifically, SGM sought (a) changes to the language in paragraph 17 of the Confirmation Order and (b) the inclusion of additional language in paragraph 17. Because the SGM Objection is a Rule 7052 motion to amend the Confirmation Order, the Notice of Appeal will not take effect until the Court rules upon the SGM Objection. Therefore, the Court found it has jurisdiction to rule upon the SGM Objection. SGM disagreed with the Court's treatment of the Objection as a Rule 7052 motion to amend or make additional findings. Judge Robles held that SGM's opposition to the treatment of the Objection as a Rule 7052 motion cannot be squared with the fact that the Objection sought modifications to the conclusions of law set forth in paragraph 17 of the Confirmation Order. In addition, even after filing the Notice of Appeal, SGM has continued to pursue its attempts to obtain modification of the Confirmation Order. Judge Robles said the Court lacks jurisdiction to rule upon the SGM Objection unless it is treated as a Rule 7052 motion. Therefore, SGM's opposition to treatment of the Objection as a Rule 7052 motion is inconsistent with its continued attempts to obtain modification of the Confirmation Order. For these reasons, SGM's opposition to treatment of the SGM Objection as a Rule 7052 motion is overruled. The Debtors requested that the Court rule upon the SGM Objection by way of a separate order, as opposed to entering an amended Confirmation Order and requiring the filing of an amended Plan. SGM opposed the request, asserting it will create more ambiguity and potentially the need for two appeals. The Court found it appropriate to dispose of the SGM Objection by way of a separate order. First, the Plan and Confirmation Order contemplate modifications to both documents by entry of a separate order if the modifications are not material within the context of the Plan. The issues raised by the SGM Objection are material within the context of the litigation between the Debtors and SGM currently pending before the U.S. District Court for the Central District of California, Case No. 2:19-cv-00613-DSF (the "SGM Action"), but are not material within the context of the Plan, which provides for the distribution of hundreds of millions of dollars to thousands of creditors. Second, requiring entry of an amended Confirmation Order and the filing of an Amended Plan would impose significant costs upon the Debtors without any corresponding benefit to creditors and the estates. As required by the Confirmation Order, the Debtors have served a Notice of Confirmation of Modified Amended Joint Plan of Liquidation (Dated July 2, 2020) of the Debtors, the Prepetition Secured Creditors, and the Committee upon more than 40,000 creditors. The Confirmation Notice refers creditors to the Plan and Confirmation Order. Resolving the SGM Objection by way of an amended Plan and amended Confirmation Order would require the Debtors to re-serve the Confirmation Notice. The Court said that it would be a pointless exercise, given that the amendments addressed are not material to the Plan. Third, requiring entry of an amended Confirmation Order and the filing of an Amended Plan would disrupt the implementation of the Plan. The Plan keys various dates to the date of entry of the Confirmation Order. Fourth, requiring entry of an amended Confirmation Order could generate disputes regarding the finality of the Confirmation Order. The finality of the Confirmation Order is a critical component of the Plan Settlement upon which the entirety of the Plan is predicated. The Debtors did not oppose paragraphs C-D of the Preliminary Findings, which contains proposed language stating that certain injunctive provisions in the Plan shall not prejudice SGM's ability to pursue its claims, defenses, and counterclaims in the SGM Action. SGM noted the Plan provides for the assignment of the Debtors' claims in the SGM Action to the Liquidating Trustee, and on that basis requested that the proposed language be amended to reflect the Liquidating Trustee's role in the SGM Action. The Court found the clarification requested by SGM to be appropriate. Subject to this clarification, the Court adopted paragraphs C-D of the Preliminary Findings. A copy of the Court's Memorandum Decision is available at https://bit.ly/3dkiCGm from Leagle.com. About Verity Health System Verity Health System -- https://www.verity.org/ -- operates as a non-profit health care system in the state of California, with approximately 1,680 inpatient beds, six active emergency rooms, a trauma center, and a host of medical specialties, including tertiary and quaternary care. Verity's two Southern California hospitals are St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles. In Northern California, O'Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach are part of Verity Health. Verity Health also includes Verity Medical Foundation. With more than 100 primary care and specialty physicians, VMF offers medical, surgical and related healthcare services for people of all ages at community-based, multi-specialty clinics conveniently located in areas served by the Verity hospitals. Verity Health System was created in a transaction approved by California Attorney General Kamala Harris and completed in December 2015. Verity Health System of California, Inc., and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition signed by CEO Richard Adcock, Verity Health estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Ernest M. Robles oversees the cases. The Debtors tapped Dentons US LLP as their bankruptcy counsel; Berkeley Research Group, LLC, as financial advisor; Cain Brothers as investment banker; and Kurtzman Carson Consultants as claims agent. The official committee of unsecured creditors formed in the case retained Milbank, Tweed, Hadley & McCloy LLP as counsel. The Debtors, the Official Committee of Unsecured Creditors, and the Debtors' Prepetition Secured Creditors proposed a Modified Second Amended Joint Chapter 11 Plan (Dated July 2, 2020). On August 14, 2020, the Court entered an order confirming the Plan. WELLFLEX ENERGY: Seeks to Hire Foley & Lardner as Legal Counsel --------------------------------------------------------------- Wellflex Energy Partners Fort Worth, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Foley & Lardner, LLP as its legal counsel. The services that the firm will render are as follows: a. advise the Debtor of its powers and duties in the management of its business while under the Bankruptcy Code; b. attend meetings and negotiate with representatives of creditors and other parties-in-interest; c. assist the Debtor in the preparation of all legal documents required; d. assist the Debtor in obtaining court approval for use of cash collateral or financing and other negotiations with secured creditors; e. take such action as is necessary to preserve and protect the Debtor's assets and interests; f. advise the Debtor in connection with any potential sale of assets; g. assist the Debtor in the formulation of a disclosure statement and in the formulation, confirmation, and consummation of a Chapter 11 plan; h. appear before the court; i. consult with the Debtor regarding tax matters; and j. perform any and all other legal services. The firm's current hourly rates for the attorneys that have been designated to represent the Debtor in the case are as follows: Stephen A. McCartin Of Counsel $840 Mark C. Moore Senior Counsel $525 Emily Shanks Associate $370 Janelle Harrison Paralegal $230 Stephan McCartin, Esq., of counsel at Foley & Lardner, disclosed in court filings that the firm is a "disinterested person," as that phrase is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Stephen A. McCartin, Esq. Mark C. Moore, Esq. Emily Shanks, Esq. Foley & Lardner LLP 2021 McKinney Avenue, Suite 1600 Dallas, TX 75201 Telephone: (214) 999-3000 Email: smccartin@foley.com mmoore@foley.com eshanks@foley.com About Wellflex Energy Partners Founded in 2006, Wellflex Energy Partners Fort Worth, LLC manufactures oil & gas field equipment. The Company utilizes the latest in design technology to assist in detailed engineering, fabrication, and project management to provide its customers with most efficient, fit for purpose equipment. Visit https://www.wellflex.com for more information. Wellflex Energy Partners Fort Worth sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-43267) on October 22, 2020. The petition was signed by Nick Klaus, president. 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 Edward L. Morris oversees the case. Foley & Lardner LLP is Debtor's legal counsel. Grey Light Advisory, LLC is Debtor's financial advisor. WELLFLEX ENERGY: Seeks to Hire Grey Light as Financial Advisor -------------------------------------------------------------- Wellflex Energy Partners Fort Worth, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Grey Light Advisory, LLC as its financial advisor. The services that the firm will render are as follows: -- review and assist in connection with the Debtor's Chapter 11 filing; -- review, assist and analyze the Debtor's business plans, cash flow projections, and other reports or analyses prepared by the Debtor or its professionals; -- review and assist the Debtor in preparing statement of financial affairs, schedules, and monthly operating reports; -- review and analyze the financial ramifications of proposed transactions for which the Debtor seeks court approval; -- review, evaluate and analyze the Debtor's internally prepared financial statements and related documentation; -- attend and advise at meetings with the Debtor, its counsel, and representatives of the Creditors Committee; and -- assist and advise the Debtor and its counsel in the development, evaluation and documentation of any plan of reorganization or strategic transaction. The hourly rates of the primary Grey Light advisors are as follows: Josh Holley $425 per hour Coleman Fulcher $200 per hour During the one one year period prior to the petition date, Grey Light received $163,123 in aggregate payments from the Debtor. Joshua Holley, a principal at Grey Light, disclosed in court filings that the firm is a "disinterested person," as that phrase is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Joshua Holley Grey Light Advisory, LLC 1700 W 31st St. Austin, TX, 78703 About Wellflex Energy Partners Founded in 2006, Wellflex Energy Partners Fort Worth, LLC manufactures oil & gas field equipment. The Company utilizes the latest in design technology to assist in detailed engineering, fabrication, and project management to provide its customers with most efficient, fit for purpose equipment. Visit https://www.wellflex.com for more information. Wellflex Energy Partners Fort Worth sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-43267) on October 22, 2020. The petition was signed by Nick Klaus, president. 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 Edward L. Morris oversees the case. Foley & Lardner LLP and Grey Light Advisory, LLC serve as Debtor's legal counsel and financial advisor, respectively. WHITE'S PLACE: Deal Reached With JAA; Plan Confirmed ---------------------------------------------------- Judge Catherine Peek McEwen has entered an order confirming the Chapter 11 Plan of White's Place, LLC, pursuant to Section 1129 Bankruptcy Code. The Court also granted final approval to the Disclosure Statement. The Court will conduct a post confirmation status conference in this Chapter 11 case on December 17, 2020 at 1:30 p.m. EST. The Plan shall be modified to reflect the agreement between the Debtor and Joan W. Tepper, Trustee of the Joan W. Tepper Marital Trust ("Tepper") that beginning on the Effective Datel, the Debtor will make additional monthly payments in the amount of $6,586 each until any post-petition monthly payment obligations have been satisfied or "cured". Pursuant to the Order Granting Debtor's Motion to Approve Post-Petition Financing (Doc. No. 175), creditor PayPal or its associate WebBank shall have an administrative expense claim of $26,457 payable per the terms of the Paycheck Protection Note. The Debtor and the JAA have agreed to fully and finally resolve all issues between them arising out of or in any way relating to the allegations in the Second Amended Complaint (Doc. No. 41), the objection to claim, the counterclaim, and any and all claims that could have been raised therein. The terms of the settlement are as follows: * The Debtor will occupy, use and possess the Property through the end of the current term, which is in the second and final additional period provided for in the Lease. The current term ends on November 30, 2020. * The Debtor is not required to pay, and the JAA has agreed to waive its claim for, the rent that has accrued and will accrue during the period March 1, 2019 through and including November 30, 2020. The Ballot Tabulation as filed on September 18, 2020 reflects that Classes 3, 4, 6 and 7 are unimpaired and therefore deemed to have accepted the Plan; and, Classes 1, 2 and 5 are impaired but affirmatively voted for the Plan. Therefore, the Ballot Tabulation reflects the acceptance by creditors holding the required number and dollar amount of votes with respect to each impaired Class that voted on the Plan. A copy of the Plan Confirmation Order is available at: https://www.pacermonitor.com/view/KYOLXJQ/Whites_Place_LLC__flmbke-19-07777__0189.0.pdf?mcid=tGE4TAMA About White's Place White's Place, LLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 19-07777) on Aug. 16, 2019, disclosing under $1 million in both assets and liabilities. The case is assigned to Judge Catherine Peek McEwen. The Debtor is represented by David S. Jennis, Esq., at Jennis Law Firm. WHITE'S PLACE: Jacksonville Aviation Says Plan Not Feasible ----------------------------------------------------------- Creditor Jacksonville Aviation Authority (JAA) objects to final approval of Disclosure Statement and confirmation of the Plan of Reorganization filed by debtor White's Place, LLC. JAA claims that the Disclosure Statement does not comply with 11 U.S.C. Sec. 1125(a)(1) because it does not provide adequate information regarding the Debtor's current financial circumstances to enable creditors to make an informed judgment about the Plan. JAA points out that the Plan is based upon an assumption regarding a significant on-going expense for which the Debtor has not provided any support, which is that the Debtor's monthly rent expense will remain constant over the life of the Plan. JAA asserts that the Debtor has no assurance that it will obtain an extension of its existing lease, or that if it does, what the monthly rent expense will be, or that it can find an acceptable facility to which it can relocate at the rent expense set forth in the projections. Without proof that the Debtor can achieve stabilized rent at the rate projected, feasibility of the Plan of Reorganization is doubtful. A full-text copy of JAA's objection dated September 3, 2020, is available at https://tinyurl.com/y6zqka8g from PacerMonitor at no charge. Counsel for Jacksonville Aviation: GIBBONS | NEUMAN PATTI W. HALLORAN, ESQUIRE 3321 Henderson Boulevard Tampa, Florida 33609 Tel: (813) 877-9222 E-mail: phalloran@gibblaw.com About White's Place White's Place, LLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 19-07777) on Aug. 16, 2019, disclosing under $1 million in both assets and liabilities. The case is assigned to Judge Catherine Peek McEwen. The Debtor is represented by David S. Jennis, Esq., at Jennis Law Firm. WOODBRIDGE GROUP: SAG Liable for $270,000, Court Says ----------------------------------------------------- In the case captioned SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. SEXTON ADVISORY GROUP, INC., and STEVEN M. SEXTON, Defendants, Case No. 5:20-cv-01806-JGB-KKx (C.D. Cal.), District Judge Jesus G. Bernal ordered that Sexton Advisory Group, Inc. is permanently restrained and enjoined from violating Section 5 of the Securities Act [15 U.S.C. section 77e] and Section 15(a) of the Exchange Act [15 U.S.C. section 78o(a)]. The SEC having filed the Complaint and Defendant Sexton Advisory Group, Inc having entered a general appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment. The Defendant is jointly and severally liable with defendant Steven M. Sexton for disgorgement of $244,653.70, representing profits gained as a result of the conduct alleged in the Securities and Exchange Commission Complaint, together with prejudgment interest in the amount of $27,137.70, for a total of $271,791.40, which shall be partially offset by $251,826.74, the amount that SAG previously paid to the Trustees of the Woodbridge Liquidation Trust, the successor in interest to the Woodbridge Group of Companies, LLC, related to a case pending in the United States Bankruptcy Court of the District of Delaware entitled In re Woodbridge Group of Companies, LLC, el al., No. 17-12560-KJC. The Defendant is also liable for a civil penalty in the amount of $30,000 under Section 20(d) of the Securities Act [15 U.S.C. section 77t(d)]). The Defendant must satisfy this obligation by paying $49,964.66 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. Judge Robles held that the Commission may enforce the Court's judgment for disgorgement and prejudgment interest by moving for civil contempt (and/or through other collection procedures authorized by law) at any time after 30 days following entry of this Final Judgment. The Defendant must pay post-judgment interest on any delinquent amounts. The Commission shall hold the funds, together with any interest and income earned thereon pending further order of the Court. A Fair Fund is established pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended by the Dodd-Frank Act of 2010 [15 U.S.C. section 7246(a)], from the funds deposited with the Commission pursuant to Defendant's final judgment in this matter, plus interest earned on those funds. The funds deposited with the Commission in this matter will be transferred to the Liquidation Trust created by the Chapter 11 Bankruptcy Plan in the In Re Woodbridge Group of Companies, LLC, et al., Case No. 17-12560-KJC (D. DE) (Jointly Administered) bankruptcy proceeding to be distributed in accordance with the Liquidation Plan approved by the Court in the Bankruptcy Case (DE 2903). A copy of the Court's Final Judgment is available at https://bit.ly/2It1Ycb from Leagle.com. About Woodbridge Group Headquartered in Sherman Oaks, California, The Woodbridge Group Enterprise -- http://www.woodbridgecompanies.com/-- was a comprehensive real estate finance and development company. Its principal business was buying, improving, and selling high-end luxury homes. The Woodbridge Group Enterprise also owned and operated full-service real estate brokerages, a private investment company, and real estate lending operations. The Woodbridge Group Enterprise and its management team had been in the business of providing a variety of financial products for more than 35 years, and had been primarily focused on the luxury home business for the past five years. Since its inception, the Woodbridge Group Enterprise has completed more than $1 billion in financial transactions. These transactions involved real estate, note buying and selling, hard money lending, and alternative financial transactions involving thousands of investors. Woodbridge filed for bankruptcy as a result of a massive, multi-year Ponzi scheme perpetrated by Robert Shapiro between (at least) 2012 and 2017. As part of this fraud, Shapiro, through the Woodbridge entities, raised over one billion dollars from approximately 10,000 investors -- as either noteholders or unitholders. Woodbridge Group of Companies and certain of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 17-12560) on Dec. 4, 2017. Woodbridge estimated assets and liabilities at between $500 million and $1 billion. The Chapter 11 cases are being jointly administered. Judge Kevin J. Carey presides over the case. Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq., Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey, Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher, LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J. Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway Stargatt & Taylor, LLP, served as the Debtors' bankruptcy counsel. Homer Bonner Jacobs, PA, served as special counsel; Province, Inc., as expert consultant; and Moelis & Company LLC, as investment banker. The Debtors' financial advisors were Larry Perkins, John Farrace, Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman at SierraConstellation Partners, LLC. Beilinson Advisory Group served as independent management to the Debtors. Garden City Group, LLC, served as the Debtors' claims and noticing agent. An official committee of unsecured creditors was appointed in the Chapter 11 cases on Dec. 14, 2017. Pachulski Stang Ziehl & Jones served as counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., acted as its financial advisor. On Jan. 23, 2018, the Court approved a settlement providing for the formation of an ad hoc noteholder group and an ad hoc unitholder group. Woodbridge Group said that effective as of February 15, 2019, it has emerged from chapter 11 bankruptcy following confirmation of its plan of liquidation. The Plan was confirmed on October 26, 2018. WP REALTY: Seeks to Hire Goldberg Weprin as Bankruptcy Counsel -------------------------------------------------------------- WP Realty Acquistion III, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Goldberg Weprin Finkel Goldstein LLP as bankruptcy counsel. The firm will provide the following services: a. provide the Debtor with necessary legal advice in connection with its responsibilities and duties; b. represent the Debtor in all proceedings; c. prepare all necessary legal papers; d. represent the Debtor's interest in the litigations involving the Debtor; and e. perform all other legal services for the Debtor. The firm is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code, according to a court filing. The firm can be reached through: Kevin J. Nash, Esq. Goldberg Weprin Finkel Goldstein LLP 1501 Broadway New York, NY, 10036 Telephone: (212) 221-5700 About WP Realty Acquisition III WP Realty Acquisition III LLC is engaged in activities related to real estate. It owns a property located in New Rochelle, New York having a current value of $4.1 million (estimated without development). WP Realty Acquisition III filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-23038) on Sept. 11, 2020. The Debtor disclosed $4,177,531 in total assets and total liabilities $4,674,589. Goldberg Weprin Finkel Goldstein LLP, led by Kevin J. Nash, is the Debtor's legal counsel. XEUHAI LI: Court Tosses Giantsea Amended Suit with Prejudice ------------------------------------------------------------ Bankruptcy Judge Michael B. Kaplan granted Chapter 11 Trustee Andrea Dobin's motion to dismiss the amended complaint captioned GIANTSEA NEW ENERGY TECHNOLOGY CO., LTD. Plaintiff, v. LI et al., Defendants, Adv. No. 20-1389 (MBK) (Bankr. D.N.J.). Xuehai Li filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code on March 13, 2020. On July 15, 2020, Andrea Dobin was appointed as the Chapter 11 Trustee for the Debtor's bankruptcy case. On July 24, 2020, Plaintiff filed the Amended Complaint adding the Trustee as a defendant. The Amended Complaint asserted that pursuant to a loan agreement dated Dec. 4, 2013, the Plaintiff loaned the Debtor a total of $2,235,000. Giantsea is a privately-owned company in the People's Republic of China. Giantsea's majority shareholder is Qunbo Li, the father of the Debtor. Qunbo Li holds more than two-thirds of Giantsea's outstanding shares and is the chairman of the board. The Debtor is a minority shareholder and an executive of Giantsea. Pursuant to the Loan Agreement, the Plaintiff was to be secured by a recorded mortgage against any real estate collateral purchased with the proceeds of the Loan, and the Loan was to be repaid on or before Jan. 2, 2017. On Jan. 6, 2014, the Debtor allegedly used the funds from the Loan to purchase the Princeton Property, which was then titled in Debtor's name and the Ex-spouse's name. A mortgage in favor of Plaintiff against the Property was not recorded at this time. The Debtor allegedly failed to timely repay the Loan to the Plaintiff, and consequently, the Plaintiff initiated an action for Breach of the Loan Agreement and Unjust Enrichment in New Jersey Superior Court for Mercer County in August of 2015 captioned Giantsea Instrument and Equipment Company, Limited v. Xuehai Li, Docket No. MER-L-1855-15. On March 15, 2016, the state court entered a default judgment in favor of Plaintiff in the amount of $2,268,065.76, plus interest and other charges. On Dec. 22, 2016, the Plaintiff and the Debtor entered into an agreement to extend the loan repayment, extending the due date for repayment to Jan. 2, 2019. On May 29, 2018, the Debtor executed a mortgage against the Property in favor of the Plaintiff and back-dated the mortgage to Dec. 4, 2013. The Ex-spouse asserted that she did not execute the Mortgage. The Debtor recorded the mortgage the following day. The Debtor failed to make any payments towards the Loan, and thereafter, on March 13, 2020, filed for relief under chapter 11 of the Bankruptcy Code. On July 1, 2020, post-petition, the Plaintiff filed a complaint against the Debtor, the Ex-Spouse, and others. The complaint was subsequently amended on July 24, 2020 to add the Trustee as a defendant. In the Amended Complaint, the Plaintiff wished to determine its interest in the Property for purposes of classification and treatment of creditors for any proposed plan of reorganization. The Plaintiff asserted that because the Property was purchased with the Plaintiff's funds, it is held in a constructive trust for the Plaintiff's benefit, notwithstanding the fact that title is in the names of the Debtor and his Ex-spouse. In the alternative, the Plaintiff asserted it is entitled to a first priority lien and security interest that is superior to all named defendants in the Amended Complaint. According to Judge Kaplan, the Court is concerned primarily about the applicability of the entire controversy doctrine to the claims of the Adversary Complaint. Although the parties have not raised this argument, the Court found an analysis of the doctrine's applicability to be critical for its ruling and has requested the parties to brief whether the entire controversy doctrine bears on this present dispute. As described in Ricketti v. Barry, 775 F.3d 611, 613 (3d Cir. 2015), the entire controversy doctrine is New Jersey's application of res judicata, and is considered an affirmative defense to be applied in federal courts "when there was a previous state-court action involving the same transaction." Today, when considering applicability of the entire controversy doctrine, the Court must be guided by Rule 4:30A when claim joinder has been invoked, and Rule 4:5-1(b)(2) when discussing party joinder. On the issue of claim preclusion, Judge Kaplan said Rule 4:30(A) provides in relevant part that "[n]on-joinder of claims required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine." While Rule 4:30A fails to provide guidance as to which claims must be necessarily joined under the entire controversy doctrine, it does suggest that such claims must arise from related facts or transaction(s), but they need not necessarily be bound by the same legal theories. In determining whether the Plaintiff's claims should be precluded, the Court looks to New Jersey preclusion law, as the state court judgment was entered in New Jersey. Claim preclusion will act as a bar to suit if the following apply -- (1) the judgment in the first action is valid, final and on the merits; (2) the parties in both actions are the same or are in privity with each other; and (3) the claims in the second action must arise from the same transaction or occurrence as the claims in the first one. In addition, res judicata bars not only claims that were brought in the first action, but also claims that should have been brought as well. The Debtor was the primary defendant in the State Court Action with Plaintiff, and presently, the Debtor (as well as the bankruptcy estate) is the primary defendant in this adversary proceeding. The Amended Complaint is comprised of claims that arise from the same facts and relate to the same Loan Agreement that was litigated in the State Court Action. After the Debtor's failure to answer the complaint in the State Court Action, the Plaintiff was awarded a default money judgment, which the Court considered final. Presently, the Plaintiff sought a declaration that the Property was held in constructive trust for its benefit, or in the alternative, that the Plaintiff is entitled to a first priority lien and security interest that is superior to all named defendants. The Court saw these requests for equitable relief as state law constructs that could have been brought in the State Court Action. The Court need not rely on extrinsic evidence to come to this determination. As there is a final judgment entered in the State Court Action arising from the same facts and issues related to the Loan Agreement that is bottomed on the same facts and transaction of issue in this adversary proceeding, and because the Plaintiff failed to assert any rights to equitable remedies in the state court, the Court found that the Plaintiff is barred by claim preclusion, and the entire controversy doctrine, from further litigating these claims in this bankruptcy. The Plaintiff posited that the Debtor and the Ex-spouse were unjustly enriched at the time the Property was acquired because (1) the Debtor and the Ex-Spouse used no other funds to secure the Property, (2) no other valuable consideration was provided in connection with the obligation to repay the loan, and (3) the mortgage in favor of the Plaintiff was not recorded at the time of purchase. Therefore, the Plaintiff asserted it is entitled to a first priority lien and security interest against the Property. Yet, authorities are clear that a claim for unjust enrichment will be dismissed if the complaint alleges an express, enforceable contract that controls the parties' relationship, Judge Kaplan said. According to Judge Kaplan, the Plaintiff's claims for equitable relief cannot be enforced since an express contract -- the Loan Agreement -- exists. Equitable remedies must take a backseat to the contract. The Plaintiff previously opted to pursue a judgment for breach of the Loan Agreement, and indeed secured a default judgment. There is no reason to afford equitable relief at this juncture. A copy of the Court's Memorandum Opinion is available at https://bit.ly/3j4B0o0 from Leagle.com. Xeuhai Li filed for chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 20-14367) on March 13, 2020, and is represented by Albert A. Ciardi III, Esq. ZOHAR CDO 2003: Fails in Bid to Move Suit vs Patriarch to Delaware ------------------------------------------------------------------ Plaintiffs and Counterclaim Defendants Zohar CDO 2003-1, Ltd. ("Zohar I"), Zohar II 2005-1, Ltd. ("Zohar II"), and Zohar III, Ltd. moved to transfer the case captioned ZOHAR CDO 2003-1, LTD., et al., Plaintiffs, v. PATRIARCH PARTNERS, LLC, et al., Defendants, No. 17cv307 (S.D.N.Y.) to the U.S. District Court for the District of Delaware for referral to the Delaware Bankruptcy Court, where Zohar III's Chapter 11 bankruptcy proceedings are pending. Third-Party Defendants MBIA Inc., MBIA Insurance Corporation, Credit Value Partners, LP, Halcyon Capital Management LP, Cooperatieve Rabobank U.A., and Varde Partners, Inc. joined Zohar's motion. Upon analysis, Senior District Judge William H. Pauley, III denied Zohar Funds' motion. Judge Pauley held that Zohar Funds failed to demonstrate clear and convincing evidence that transfer is warranted. The Zohar Funds are three special purpose vehicles created by Lynn Tilton from the sale of collateralized loan obligations. The Zohar Funds in turn use these funds to invest in distressed companies. Due in part to the financial crisis in 2008, the Zohar Funds lost significant value. Since then, the parties have engaged in internecine litigation around the country. In the action at hand, the Zohar Funds and the Patriarch Parties accuse each other of wrongdoing. At bottom, the Zohar Funds alleged that the Patriarch Parties engaged in a wide-ranging conspiracy to enrich themselves by pillaging the Zohar Funds' funds and impairing their assets, ultimately rendering them unable to repay investors. In response, Patriarch accused the Zohar Funds and MBIA of concocting a scheme to wrest control of the portfolio companies from Patriarch and Tilton in an effort to replace lost revenues. On Jan. 16, 2017, the Zohar Funds filed the original complaint commencing this action against Patriarch, seeking declaratory judgment over ownership of the portfolio companies, damages from Patriarch Parties, and a RICO claim against the Patriarch Parties. On Nov. 27, 2017, the Patriarch Parties filed an answer, as well as counterclaims and a third-party complaint. On Dec. 29, 2017, the Court dismissed the Zohar Funds' RICO claim under Federal Rule of Civil Procedure 12(b)(6) and declined to exercise supplemental jurisdiction over the remaining claims. On March 11, 2018, Tilton caused Zohar III to commence chapter 11 in the United States District of Delaware Bankruptcy Court. To quell the sparring in bankruptcy court, the parties entered into a settlement agreement to monetize the Zohar Funds' interests in the portfolio companies. The Settlement Agreement expired on Sept. 30, 2019. The next day, Tilton filed an equitable subordination complaint in the Delaware Bankruptcy Court. Thereafter, the Zohar Funds filed their motion to transfer the case, to which the Third-Party Defendants joined. The Zohar Funds moved to transfer the action to the District of Delaware under 28 U.S.C. section 1412 or, alternatively, under 28 U.S.C. section 1404(a). Section 1412 states that "[a] district court may transfer a case or proceeding under Title 11 to a district court for another district, in the interest of justice or for the convenience of the parties." The text of Section 1412 requires that the district court find that the case arises "under title 11" before addressing the convenience of the parties or the interests of justice. Quoting Delaware Trust Co. v. Wilmington Trust, N.A., the Zohar Funds argued that an action can be transferred under Section 1412 where it is "related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate." But the Zohar Funds cite the standard for invoking bankruptcy jurisdiction as opposed to the standard for transferring the case. A common practice in this District when determining whether a case may be transferred pursuant to Section 1412 is to look to whether the action is "core" or "non-core." The Zohar Funds argued that the congruence between this action and the Bankruptcy render the Patriarch Parties' claims core. While the Zohar Funds do not divide their arguments into such, the Court curates the Zohar Funds' arguments into four general categories. First, the Zohar Funds assert that the factual and legal circumstances are so intertwined that this matter is core. The Zohar Funds pointed to similarities in the Patriarch Complaint and the Subordination Complaint. Paragraphs in the Subordination Complaint are grafted verbatim from the Patriarch Complaint. Moreover, the "steal the equity" themes that pervade the Patriarch Complaint are infused in the Subordination Complaint. Additionally, the Zohar Funds point to numerous claims that the Patriarch Parties also asserted in the Bankruptcy. For example, the Zohar Funds noted that the Patriarch Parties' fraudulent inducement allegations concerning MBIA are also pleaded in the Bankruptcy. According to Judge Pauley, the Zohar Funds' reliance on In re CBI Holdings Co. Inc., 529 F.3d 432 (2d Cir 2008), is misplaced. While the Second Circuit found that the "claims of negligence, breach of contract, and fraud [that were] based upon the same operative facts as the above core proceedings" were core, that was because those claims "were filed in response to [a party's] Proof of Claim." The Court of Appeals characterized those claims as core under Section 157(b)(2)(C) because they "`response[d] to a proof of claim which is, in essence, a counterclaim, [and thus] is a core proceeding.'" However, the Zohar Funds do not rely on Section 157(b)(2)(C). Rather argue that this case is core under Sections 157(b)(2)(A) and 157(b)(2)(O). Nor could the Zohar Funds rely on Section 157(b)(2)(C), as that encompasses "counterclaims by the estate against persons filing claims against the estate." Here, the Patriarch Parties -- not the estate -- bring claims. The Zohar Funds also argued that this litigation adversely impacts the Bankruptcy because it can interfere with the monetization process. Continuing that line of reasoning, the Zohar Funds assert that case is a "proceeding[] affecting the liquidation of the assets," rendering it core under Section 157(b)(2)(O). But any claims against the debtor would be subject to the automatic stay. Moreover, the Zohar Funds fail to explain how this litigation affects the monetization process. Hypothetically, if this Court were to determine that the Patriarch Parties were entitled to damages, that would not impede monetization in the Bankruptcy. Rather, the Patriarch Parties' claims may simply rise in priority. Accordingly, because this action does not arise under Title 11, transfer of venue under Section 1412 is not possible, and this Court applies Section 1404(a) to resolve the Zohar Funds' motion. Courts in the Second Circuit also consider several factors on a motion to transfer venue, including: (1) the plaintiff's choice of forum, (2) the convenience to witnesses, (3) the location of relevant documents and ease of access to sources of proof, (4) the convenience of parties to the suit, (5) the locus of operative facts, (6) the availability of process to compel the attendance of unwilling witnesses, (7) the relative means of the parties, (8) the forum's familiarity with the governing law, (9) trial efficiency, and (10) the interest of justice, based on the totality of the circumstances. After weighing the pertinent factors, Judge Pauley held that the Zohar Funds failed to demonstrate by clear and convincing evidence that transfer is warranted for the convenience of the parties and witnesses and in the interests of justice. A copy of the Court's Opinion and Order is available at https://bit.ly/3lVKHqu from Leagle.com. About Zohar CDO 2003-1 Patriarch Partners XV, LLC, filed involuntary Chapter 11 bankruptcy petitions against Zohar CDO 2003-1, Corp., Zohar CDO 2003-1, Limited and Zohar CDO 2003-1, LLC (Bankr. S.D.N.Y. Case Nos. 15-23681 to 15-23682) on Nov. 22, 2015. Patriarch Partners disclosed that it has filed, through one of its affiliates, an involuntary Chapter 11 petition for Zohar CDO 2003-1, Limited. Patriarch is Zohar I's largest creditor, holding $286.5 million face amount of Zohar I notes. Patriarch has placed Zohar I into Chapter 11 in order to protect Zohar I and Patriarch from the efforts of MBIA Inc. and MBIA Insurance Corporation, another creditor of Zohar I, to obtain Zohar I's assets for itself. Patriarch claimed it has been forced to pursue this route because of MBIA's fraudulent scheme to induce Patriarch XV to spend over $103 million to buy out a third-party noteholder in Zohar-I to facilitate a restructuring of Zohar-I. Lynn Tilton is CEO of Patriarch. Patriarch's restructuring counsel is Skadden, Arps, Slate, Meagher & Flom LLP and its financial advisor is Moelis & Co. ZOHAR CDO 2003: Tilton Suit vs MBIA Remanded to NY State Court -------------------------------------------------------------- Plaintiffs Lynn Tilton and Patriarch Partners XV, LLC sued Defendants MBIA Inc. and MBIA Insurance Corporation in the Supreme Court of the State of New York, Westchester County, alleging state law claims for fraudulent inducement, promissory fraud, and promissory estoppel. MBIA removed the action to the U.S. District Court for the Southern District of New York and moved to transfer the case to the U.S. District Court for the District of Delaware for referral to the Delaware Bankruptcy Court, where a related Chapter 11 bankruptcy proceeding is pending. Tilton moved to remand this action back to the New York State Supreme Court. The case before the New York federal district court is captioned LYNN TILTON, et ano., Plaintiffs, v. MBIA INC., et ano., Defendants, No. 19cv9733 (S.D.N.Y.). Upon analysis, Senior District Judge William H. Pauley III denied MBIA's motion and granted Tilton's motion. Assessing the relevant factors, Judge Pauley held that the factors weigh in favor of equitable remand and permissive abstention. On MBIA's motion, the Court held that this action does not arise under Chapter 11 and the Court lacks the power to transfer this action pursuant to 28 U.S.C. Section 1412. The action arose from a string of lawsuits concerning the Zohar investment vehicles. The Zohar Funds are comprised of three separate investment vehicles: Zohar CDO 2003-1, Limited ("Zohar I"), Zohar II 2005-1, Ltd. ("Zohar II"), and Zohar III, Ltd. The Zohar Funds are collateral loan obligation funds formed by Tilton between 2003 and 2007. The Zohar Funds issued notes to investors to raise capital to then invest in the debt and equity of distressed portfolio companies. The Zohar I Class A notes matured on November 20, 2015 and the Zohar II Class A notes matured on January 20, 2017. In an effort to enhance the credit rating of the notes, MBIA issued financial guaranty policies for the benefit of Zohar I Class A-1 and Class A-2 notes, but not the Zohar I Class A-3 notes and the Zohar II Class A-1, Class A-2 and Class A-3 notes. MBIA did not issue any guarantees for notes offered by Zohar III. If MBIA was required to pay on the guarantees, it acquired certain rights, such as rising in priority in the payment waterfall and gaining voting rights. Tilton is the chief executive officer and owner of Patriarch Partners, LLC and affiliated entities. Affiliates of Patriarch Partners, LLC serve as collateral managers of the Zohar Funds. Tilton beneficially holds preference shares in the Zohar Funds and the Zohar I Class A-3 notes. Tilton is also the sole board member or managing member for most of the portfolio companies. As the 2008 financial crisis took its toll on the portfolio companies, Tilton and MBIA began to believe that the Zohar Funds might default on their notes. Tilton alleges that MBIA had an exposure of approximately $150 million Zohar I and $800 million exposure for Zohar II. In 2012, Tilton attempted to work with MBIA to restructure the funds, primarily by extending the Zohar I maturity date from November 2015 to January 2017. However, in order to effectuate the restructuring, Tilton needed the consent of all of the Zohar I noteholders. An institutional investor held the MBIA-insured Zohar I A-1 notes, MBIA held the Zohar I A-2 notes, and a third party held the non-MBIA-insured Zohar I A-3 notes. In October 2012, Tilton began discussions with an MBIA senior executive about restructuring. Tilton alleged that this executive represented that the Zohar I A-3 noteholder was an "impediment" to the restructuring. Further, she alleges MBIA told her that if she purchased the Zohar I A-3 notes, MBIA would extend the maturities for both Zohar I and Zohar II. On March 26, 2015, Tilton purchased the Zohar I A-3 notes for approximately $100 million. MBIA then refused to extend the maturities for the Zohar Funds. On the eve of Zohar I's maturity, Tilton filed the action in the Supreme Court of the State of New York. Tilton asserted causes of action for fraud, breach of contract, and promissory estoppel. On Feb. 19, 2016, MBIA moved to dismiss the case. The state court dismissed the breach of contract claim but allowed the fraud and promissory estoppel claims to move forward. The parties then began discovery. On Dec. 13, 2017, the parties both moved for summary judgment. The New York State Supreme Court did not rule on the motions. Concurrent with filing the action that was stayed due to the Bankruptcy, Zohar I defaulted on its notes. Pursuant to the guarantees it issued, MBIA paid approximately $149 million to Zohar I noteholders. Because of the payment, MBIA gained rights to liquidate Zohar I's collateral and rose in Zohar I's waterfall, such that MBIA would be made whole before Tilton received distributions. On Nov. 22, 2015, Tilton commenced an involuntary Chapter 11 proceeding against Zohar I in the United States Bankruptcy Court for the Southern District of New York. On Feb. 5, 2016, Tilton withdrew the petition. On March 3, 2016, the Patriarch Entities resigned as the collateral managers of the Zohar funds and were replaced by a third-party. MBIA then began a liquidation auction of the Zohar I collateral. In an effort to halt the auction, Tilton filed another suit in New York State Supreme Court to enjoin the auction. That case was removed to this District. On Oct. 10, 2016, a judge in this District denied Tilton's motion for a preliminary injunction. The auction went forward and MBIA acquired all of Zohar I's collateral through a no-cash credit bid of approximately $150 million. On March 11, 2018, Tilton directed the Zohar Funds to file voluntary Chapter 11 petitions in the Delaware Bankruptcy Court. The Bankruptcy stayed the instant action, as well as the numerous other litigations. To quell the sparring in bankruptcy court, the parties entered into a settlement agreement, to monetize the Zohar Parties' interests in the portfolio companies. The Settlement Agreement expired on Sept. 30, 2019. The next day, Tilton filed an equitable subordination complaint in the Delaware Bankruptcy Court. After receiving a copy of the Subordination Complaint on Oct. 1, 2019, MBIA removed the action that was stayed due to the Bankruptcy to this Court on Oct. 21, 2020 with the intention of moving to transfer the case to Delaware. Tilton argued that even if jurisdiction exists and removal is not barred under Section 1443(b)(3), the Court should equitably remand the case or abstain. Section 1452(b) provides that a court "may remand such claim or cause of action on any equitable ground" and Section 1334(c)(1) provides that "nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11." "The two inquiries are essentially the same and are often analyzed together." The factors courts consider are: (1) the effect on the efficient administration of the bankruptcy estate; (2) the extent to which issues of state law predominate; (3) the difficulty or unsettled nature of the applicable state law; (4) comity; (5) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case; (6) the existence of the right to a jury trial; and (7) prejudice to the involuntarily removed defendants. The Court further found that the factors weigh in favor of equitable remand and permissive abstention. This finding is guided predominantly by the Court's denial of MBIA's motion to transfer this action. MBIA moves under Section 1412 to transfer this case to the district of Delaware. Section 1412 states that "[a] district court may transfer a case or proceeding under title 11 to a district court for another district, in the interest of justice or for the convenience of the parties." The text of Section 1412 requires that a district court find that the action arises "under title 11" before addressing the convenience of the parties or the interests of justice. In addressing this point, MBIA argued that this Court may transfer the case pursuant to Section 1412 even if it is determined to be non-core. In effect, MBIA maintained that "related to" jurisdiction is all that is required for transfer under Section 1412. However, MBIA invoked the wrong standard. The Court noted that a common practice in this District when determining whether a case may be transferred pursuant to Section 1412 is to look to whether the action is "core" or "non-core." MBIA argued that the transfer motion itself renders this case core and transferable under Section 1412. Specifically, MBIA asserted that the motion sub judice concerns the administration of a bankruptcy estate." The Court held that this argument is absurd. Applying MBIA's reasoning, every motion filed under Section 1412 would transform the underlying case to a core proceeding. That would sweep away the language of Section 1412, which is cabined to "proceeding[s] under title 11," and vitiate Congress's intent. The Court concluded that the mere fact that this action could have a tangential effect on the estate is insufficient to render the action core. A copy of the Court's Opinion and Order is available at https://bit.ly/2HdgK6t from Leagle.com. About Zohar CDO 2003-1 Patriarch Partners XV, LLC, filed involuntary Chapter 11 bankruptcy petitions against Zohar CDO 2003-1, Corp., Zohar CDO 2003-1, Limited and Zohar CDO 2003-1, LLC (Bankr. S.D.N.Y. Case Nos. 15-23681 to 15-23682) on Nov. 22, 2015. Patriarch Partners disclosed that it has filed, through one of its affiliates, an involuntary Chapter 11 petition for Zohar CDO 2003-1, Limited. Patriarch is Zohar I's largest creditor, holding $286.5 million face amount of Zohar I notes. Patriarch has placed Zohar I into Chapter 11 in order to protect Zohar I and Patriarch from the efforts of MBIA Inc. and MBIA Insurance Corporation, another creditor of Zohar I, to obtain Zohar I's assets for itself. Patriarch claimed it has been forced to pursue this route because of MBIA's fraudulent scheme to induce Patriarch XV to spend over $103 million to buy out a third-party noteholder in Zohar-I to facilitate a restructuring of Zohar-I. Lynn Tilton is CEO of Patriarch. Patriarch's restructuring counsel is Skadden, Arps, Slate, Meagher & Flom LLP and its financial advisor is Moelis & Co. [*] 8 Key Issues for Hospitality Advisors ----------------------------------------- Julian Gurule of Buchalter wrote an article on JDSupra titled "Hotel Bankruptcies: 8 Key Issues for Hospitality Advisors." The COVID-19 pandemic has forced many hospitality professionals and their clients to confront bankruptcy, insolvency, and loan workout issues for the first time since the Great Recession. Chapter 11 presents a host of unique issues for hotels and other hospitality businesses. This article highlights a few key chapter 11 bankruptcy concepts for non-bankruptcy lawyers and other industry professionals to consider as they advise their distressed clients in the coronavirus environment. Chapter 11 of the Bankruptcy Code. Chapter 11 allows a business to restructure its liabilities and remain as a going concern upon emergence from bankruptcy. In this way, chapter 11 is unlike chapter 7 of the Bankruptcy Code or state law liquidation proceedings where the business's assets are sold off to pay creditors according to a statutory order or priority. Chapter 11 can be filed voluntarily by essentially any type of business in the hospitality industry, including corporations, partnerships, and limited liability companies. Automatic Stay. An immediate benefit for a distressed hotel property upon a chapter 11 filing is the imposition of the automatic stay. Bankruptcy Code section 362(a) triggers the automatic stay upon the debtor's commencement of the bankruptcy case. The automatic stay prohibits all creditors, including secured lenders, from continuing any foreclosure or other proceedings to collect on their debts. The automatic stay similarly halts any existing pre-bankruptcy litigation pending against the hotel debtor, such as personal injury or employee lawsuits. Creditors and litigation parties may request relief from the automatic stay from the Bankruptcy Court, but the stay nonetheless provides a critical "breathing spell" for the debtor to use to formulate a plan for the business to ultimately exit bankruptcy. Use of Cash Collateral and DIP Financing. One of the most critical issues in any chapter 11 case is ensuring that the debtor has sufficient cash to operate as a going concern. The coronavirus pandemic has impacted hotel borrowers' liquidity like never before. Secured lenders will generally hold a security interest in a hotel debtor's bank accounts and the cash generated through the operation of the business. The hotel debtor can only use this "cash collateral" with the secured lender's consent or pursuant to a Bankruptcy Court order. In addition, debtors often require liquidity beyond normal operating revenues in order to meet the increased costs associated with operating as a debtor in chapter 11, including professional fees and fees owed to the U.S. Trustee. Bankruptcy Code section 364 permits debtors to obtain post-petition debtor-in-possession or "DIP" financing during the bankruptcy case from existing lenders or third-parties in the market. The Bankruptcy Court, secured lenders, and other parties in interest will expect the debtor to prepare a detailed 13-week cash flow budget showing projected revenues and expenses. The budgeting process will be instrumental in identifying any DIP financing needs. Single Asset Real Estate. The Bankruptcy Code contains provisions that apply to single asset real estate or "SARE" debtors. A SARE debtor is a business that consists of a single property or project that is responsible for substantially all of the debtor's revenue. Congress enacted the SARE provisions in order to streamline secured lenders’ ability to obtain relief from the automatic stay and foreclose on the property unless the debtor is quickly advancing a plan of reorganization or has resumed making monthly interest payments. From the debtor's perspective, a determination that a hotel constitutes a SARE debtor can have a substantial negative impact on the prospects for a successful chapter 11 case. A hotel debtor can demonstrate that the SARE provisions do not apply by establishing that it conducts operations and provides goods or services beyond simply owning the real property. Guarantees of Hotel Obligations. Hotel owners and sponsors often guarantee the property's debt obligations, frequently in the form of non-recourse carve-out or "bad boy" guarantees. The automatic stay does not extend to non-debtors and, accordingly, the debtor's bankruptcy filing will not stop collection actions against the guarantors. Under certain circumstances, the Bankruptcy Court may enjoin creditors from pursuing guarantors during the chapter 11 case, but the debtor’s bankruptcy case alone will not discharge any guarantee of the property's debt. Guarantees are often a critical business and legal issue in a hospitality bankruptcy case, and the debtor and its advisors should carefully consider the impact of any given course of action on any existing guarantees. Franchise Agreements. The automatic stay prohibits a franchisor from terminating the hotel debtor’s franchise agreement. The Bankruptcy Code also permits the debtor to decide to either assume or reject executory contracts, including any franchise agreement. If the debtor elects to assume a franchise agreement, and keep the franchise agreement intact following emergence from bankruptcy, the debtor is required to cure—or provide adequate assurance that it will promptly cure—any outstanding defaults under the franchise agreement. The franchisor is also entitled to adequate assurance that the debtor will be able to continue to perform under the franchise agreement on a go forward basis. Section 363 Sale vs Plan of Reorganization. There are two routes for a business to exit chapter 11 as a going concern. First, the debtor can attempt to sell substantially all of its assets under Bankruptcy Code section 363(b). Section 363 sales of material operating businesses are nearly always subject to a robust marketing and auction process. The hotel debtor will need to retain advisors, including attorneys and brokers or investment bankers, capable of conducting such a process. The secured lender will have the right to credit bid its secured claim in connection with any sale process. Second, the debtor can elect to attempt to confirm a plan of reorganization. The debtor's existing owners and management have the exclusive right to seek confirmation of a plan at the outset of the chapter 11 case. The plan of reorganization will provide for a comprehensive restructuring of all of the debtor’s liabilities, including secured debt, unsecured debt, and vendor and trade obligations. Chapter 11 imposes extensive substantive and procedural requirements that the plan proponent must satisfy in order to obtain confirmation of the plan. Retention of Professionals. The hotel debtor’s attorneys and financial advisors must file retention applications that are subject to the Bankruptcy Court's approval. If the hotel debtor has existing lawyers that commonly provide advice regarding hospitality issues, such attorneys can continue to represent the debtor during the bankruptcy, with an experienced bankruptcy lawyer serving as co-counsel. Lawyers' and financial advisors' fees and costs are also subject to Bankruptcy Court approval. Some Bankruptcy Courts permit attorneys and other professionals who will not have an active role in the bankruptcy case to serve as an "ordinary course professional" with streamlined retention and payment requirements. The coronavirus pandemic is making hospitality industry lawyers and other advisors confront critical legal and business issues that are challenging the survival of many businesses. Attorneys and other professionals should thoroughly consider the bankruptcy issues presented by this article in order to help their clients formulate a game plan to successfully navigate the chapter 11 process. [*] Big-Name Companies Flock Debtor-Friendly Virginia ------------------------------------------------------ Alex Wolfe of Bloomberg Law reported that a two-judge court in Richmond, Va., increasingly is becoming a venue of choice for large companies seeking bankruptcy protection. The U.S. Bankruptcy Court for the Eastern District of Virginia has developed a reputation among corporate restructuring practitioners as a debtor-friendly venue that issues consistent rulings while running efficient operations. So far in 2020, 9% of large, publicly traded company bankruptcies have been filed in the Eastern District of Virginia, according to the UCLA-LoPucki Bankruptcy Research Database. That's more than double the district’s share of major cases during the previous five years. "Forum shopping is the story and Virginia is the flavor of the week," said attorney Zev Shechtman of Danning, Gill, Israel & Krasnoff LLP. Lord & Taylor, Ascena Retail Group, J. Crew, and Intelsat SA represent the large companies that filed for bankruptcy there this year following U.S. business shutdowns caused by the Covid-19 pandemic. Mega Cases The recent spate of major corporate restructurings, dominated by large retailers, comes on the heels of other big names. Toys "R" Us Inc., Gymboree Corp., and Pier 1 Imports Inc. all headed to Richmond in recent years in an effort to revive their brands in the wake of a "retail apocalypse." Five of the 15 "mega cases" that were filed in the Eastern District of Virginia came just this year, according to the court's website. Mega cases have at least 1,000 creditors and concern more than $100 million in assets, according to the Administrative Office of U.S. Courts. Large struggling companies often file for bankruptcy outside of the state where they're headquartered. Bankruptcy rules are lenient on venue selection, often allowing debtors to undergo restructuring in any region where they conduct business. But the uptick in Richmond is particularly notable, highlighted by some notable firms bringing cases there. Kirkland & Ellis LLP is listed as bankruptcy counsel in the bulk of the Eastern District of Virginia's mega cases, indicating a degree of comfort by one of the nation's premier corporate debtor law firms. Weil Gotshal & Manges LLP, another heavy hitter in the bankruptcy space, is currently representing J. Crew there. Consistency, Reliability Unlike some other major Chapter 11 courts, Richmond operates with only two judges: Kevin Huennekens and Keith Phillips. In comparison, the courts in Wilmington, Del., and New York each have seven. But the number of judges hasn't deterred practitioners who seek massive reorganization efforts on a tight timeline. Many say it’s actually an attractive feature. "The firms that specialize in large corporate cases like that venue because the judges are reliable, somewhat predictable, and consistent," said Richmond-based bankruptcy lawyer Doug Foley of McGuireWoods LLP. The judges also have a track record of handling complex cases, said attorney Richard Kanowitz of Haynes and Boone LLP. "So there's no risk to filing," he said. The court also has adapted to the judicial emergency arising from Covid-19 and embraced procedures for remote participation in court proceedings, said McGuireWoods attorney Sarah Boehm. Consistent, prompt rulings have yielded tangible benefits for clients in Richmond, attorneys say. Kirkland notably shielded Pier 1 Imports Inc. from monthly rent payments during the height of retail business closures earlier this year while the company negotiated a liquidation plan. Judge Huennekens "bent over backwards" to accommodate the company in that circumstance, said Schechtman. "Clearly there is a willingness to do things for debtors that are not landlord-friendly," he said. Ascena Retail Group, the owner of Ann Taylor and Lane Bryant, also asked for a timeout from paying its landlords and eventually resolved the issue. Yet of Ascena's more than 60 related debtor entities, only one is incorporated in Virginia, Shechtman said. Fee Applications The Richmond court is also efficient at approving fees, attorneys say. Bankrupt companies need court authorization for all estate-paid expenses, including legal bills. Some smaller jurisdictions may balk at big firms’ requests to pay more than $1,100 an hour for attorney fees. The Eastern District of Virginia aligns with the large Chapter 11 venues where "nobody blinks at that" fee, said Kenneth Rosen, Lowenstein Sandler LLP's bankruptcy practice chair. And legal advice from the big firms isn’t cheap. Kirkland hauled in almost $56 million in fees for advising Toys "R" Us from September 2017 through December 2018, with some partners charging more than $1,500 an hour for their time. Commercial debtors' attorneys are inclined to go where they’ve had good experiences and where it's "likely that fee applications will be approved promptly and easily," said Schuyler Carroll of Loeb & Loeb LLP. [*] Changes to Federal Bankruptcy Law Can Help Small Businesses --------------------------------------------------------------- Susan M. Cook and Rozanne M. Giunta of the Daily News said in an opinion piece that changes to federal bankruptcy law will make it easier and less expensive for small businesses and family farmers to restructure or shed their debt. COVID-19 continues to rattle the global economy. New numbers from the U.S. Commerce Department show gross domestic product fell 9.5% for the second quarter of the year. By the end of July, new unemployment claims had topped 1 million for 19 straight weeks. In Michigan, bankruptcy filings for Chapter 7 and 13 rose 17 percent in July 2020, outpacing the national increase of 6%. Nationally, Chapter 11 filings for commercial reorganizations were up 79% for the first half of the year compared with 2020. While we might be fatigued by the overuse of unprecedented, it's clear these are unprecedented times. Starting in March 2020, Michigan small businesses were required to shut down or to service only their essential customers. Some sectors remain closed. Others have been forced to operate at 50% of capacity or less, although they face the same – or increasing – fixed costs. Many small businesses and family farms are drowning in their operations. While federal loan and grant programs have been extremely helpful, they won't be enough for businesses that have been shut down for an extended period of time. Many will not be able to recover without restructuring or reducing their debt. The same is true of family farmers, particularly dairy farmers, who were already suffering before the pandemic began. The expenses of milking and maintaining their herds continue even as the national shutdown of schools dried up demand for their product, forcing them to dump milk. As we head into fall, a time when bankruptcy filings traditionally increase in Michigan, we are expecting a significant increase in new filings. Changes to bankruptcy law prompted by the coronavirus will make the restructuring process simpler and easier for both small businesses and family farms. Changes to Chapter 11, 12 For decades, small businesses looking to restructure their operations and debt had the same requirements under Chapter 11 that a mega case had. Bankruptcy was expensive for small business owners, which made filing for Chapter 11 an unrealistic option. The addition of Subchapter V, or SBRA, to Chapter 11 provides significant changes that will expand the number of small businesses eligible, streamline the process and make it easier for owners to retain equity. Prior to COVID-19, a company could have no more than $2.7 million in unsecured debt to be eligible to file under small business rules. The CARES Act has raised the debt limitation to $7.5 million, adding a sunset provision of March 2021. Similar but not identical changes have been made to Chapter 12, which covers restructurings for family farms. The debt limitation here went from $4 million pre-coronavirus to $10 million now, which encompasses a larger percent of family farms. Small businesses and farms must still adhere to many provisions of the bankruptcy code, such as opening new accounts and filing monthly financial statements, significant changes have been made to Chapter 11 and Chapter 12. These include: * Eliminating the creditors' committee in favor of a single trustee who does not operate the business or farm of the debtor, unless there is a finding of fraud or mismanagement. The trustee is paid to oversee the process and ensure the debtor adheres to the rules, unlike a creditors' committee that typically works to maximize the plan for creditors. * Enabling only the debtor to file a reorganization plan. No creditor or competing plan may be filed. There's also no longer a need for a disclosure statement, unless required by the court, making the plan document simpler and less expensive to develop. * Eliminating the absolute priority rule, which indicates that no junior interest can retain or receive property unless all interests of a higher level have been paid in full. In many cases, a creditor may have a secured claim that is a small fraction of the total debt, enabling that one creditor to preclude a reorganization plan from being confirmed. This change enables shareholders to retain stock in the business and smooths the path to confirmation. * Enabling administrative expenses to be paid over the life of plan. In a regular filing, expenses have to be paid on confirmation of the plan, but these can now be stretched three to five years, which gives the debtor additional breathing space. There are numerous other changes to both Chapter 11 and Chapter 12 that are designed to benefit small business owners and family farmers. We now have a window that offers the ability to reorganize less expensively and more easily. [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ---------------------------------------------------------- Grounded: Frank Lorenzo and the Destruction of Eastern Airlines Author: Aaron Bernstein Publisher: Beard Books Softcover: 272 Pages List Price: $34.95 Order a copy today at http://www.beardbooks.com/beardbooks/grounded.html Barbara Walters once referred to Frank Lorenzo as "the most hated man in America." Since 1990, when this work was first published and Eastern Airlines' troubles were front-page news, there have been many worthy contenders for the title. Nonetheless, readers sensitive to labor-management concerns, particularly in the context of corporate restructurings, will find in this book much to support Barbara Walters' characterization. To recap: For a few brief and discordant years, Frank Lorenzo was boss of the biggest airline conglomerate in the free world (Aeroflot was larger), combining Eastern, Continental, Frontier, and People Express into Texas Air Corporation, financing his empire with junk bonds. TAC ultimately comprised a fleet of 451 planes and 50,000 employees, with revenues of $7 billion. But Lorenzo was lousy on people issues, famously saying, "I'm not paid to be a candy ass." The mid-1980s were a bad time to take that approach. Those were the years when the so-called Japanese model of management, which emphasized cooperation between management and labor, was creating a stir. The Lorenzo model was old school: If the unions give you any trouble, break 'em. That strategy had worked for him at Continental, where he'd filed Chapter 11 despite the airline's $60 million in cash reserves, in order to exploit a provision in Bankruptcy Code allowing him to abrogate his contracts with the unions. But Congress plugged that loophole by the time Lorenzo went to the mat with Charles Bryan, I AM chapter president. Lorenzo might have succeeded in breaking the machinists alone, but when flight attendants and pilots honored the picket lines, he should have known it was time to deal. He didn't. Instead he tried again for a strategic advantage through the bankruptcy courts, by filing Chapter 11 in the Southern District of New York where bankruptcy judges were believed to be more favorably disposed toward management than in Miami where Eastern was headquartered. Eastern had to hide behind the skirts of its subsidiary, Ionosphere Clubs, Inc., a New York corporation, in order to get into SDNY. Six minutes later, Eastern itself filed in the same court as a related proceeding. The case was assigned to Judge Burton Lifland, whom Eastern's bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was mistaken if he believed that serendipitous lottery assignment would be his salvation. Judge Lifland a year later declared Lorenzo unfit to run the airline and appointed Martin Shugrue as trustee. Most hated man or not, one wonders whether the debacle was all Lorenzo's fault. Eastern's unions, in particular the notoriously militant machinists, were perpetual malcontents, and Charlie Bryan was an anti-management zealot, to the point of exasperating even other IAM officers. The book provides a detailed account of the three-and-a-half-year period between Lorenzo's acquisition of Eastern in the autumn of 1986 and Judge Lifland's appointment of the trustee in April 1990. It includes the history of Eastern's pre-Lorenzo management, from World War I flying ace Eddie Rickenbacker to astronaut Frank Borman. Aaron Bernstein won numerous awards during his 20-year career as a professional journalist. He is an associated editor for Business Week. Aaron Bernstein is the editor of Global Proxy Watch, a corporate governance newsletter for institutional investors. He is also a non-resident Senior Research Fellow at the Pensions and Capital Stewardship Project at Harvard Law School. He left BusinessWeek magazine in 2006 after a 23-year career as an editor and senior writer covering workplace and social issues. ********* 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 ***