/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/201109.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, November 9, 2020, Vol. 24, No. 313 Headlines 24 HOUR FITNESS: Plan Unfair as It Favors Lenders, Says Committee 2MORROWS SOLUTIONS: $252K Philly Property Sale Denied w/o Prejudice ALPHATEC HOLDINGS: Incurs $15.7 Million Net Loss in Third Quarter ANTERO MIDSTREAM: S&P Rates New $400MM Senior Unsecured Notes 'B-' APOLLO ENDOSURGERY: Incurs $2.6 Million Net Loss in Third Quarter ASARCO INC: 9th Cir Limits Recoverable in CERCLA Contribution Claim ASCENA RETAIL: Gets Approval to Hire Deloitte & Touche as Auditor AT HOME GROUP: Martin Eltrich Quits as Director BASS PRO: S&P Hikes ICR to 'B+' on Resilient Operating Performance BLITMAN SARATOGA: Case Summary & 20 Largest Unsecured Creditors BOY SCOUTS OF AMERICA: Court Stays Simpson Suit vs LHCI et al. BROOKLYN ROASTING: Hires Klestadt Winters as Counsel CADIZ INC: Reports $4.5 Million Net Loss for Third Quarter CAESARS ENTERTAINMENT: Young Suit Won't Go to Trial, Court Says CANNABICS PHARMACEUTICALS: Swings to $7.5M Net Loss in Fiscal 2020 CARNIVAL CORP: S&P Lowers ICR to 'B'; Outlook Negative CAROL ROSE: Court Trims Weston's Attorney Fees CBL PROPERTIES: Ch. 11 Filing Will Not Affect Green Tree Operations CENTURY ALUMINUM: Incurs $58.2 Million Net Loss in Third Quarter CHARITY TOWING: Seeks Court Approval to Hire TL Reedy as Accountant CHASE MERRITT: Hires Compass California as Real Estate Agent CHESAPEAKE OPERATING: March Status Hearing in Bugg Desoto Suit COMCAR INDUSTRIES: K&K Truck Buying Low Value Assets for $1.5K COMCAR INDUSTRIES: KC Industries Buying Low Value Assets for $13.1K COMCAR INDUSTRIES: Megamix/Kater Buying Low Value Assets for $2.5K COMSTOCK RESOURCES: Posts $130.9 Million Net Loss in Third Quarter COSMOLEDO LLC: Ch.11 Filing of Maison Kayser Chain Stays Suit CYTOSORBENTS CORP: Posts $840K Net Loss in Third Quarter DE'ANGELEO REVOCABLE: Seeks to Tap Albert Van Cleave III as Counsel DELTA AIR: New Circuit Judge Doubt Pilots' Pension Case DESERT LAKE: Court Confirms Ch. 11 Plan Under Subchapter V EAGLE MANUFACTURING: Case Summary & 20 Largest Unsecured Creditors EAGLE PRESSURE: Case Summary & 20 Largest Unsecured Creditors EMERALD GRANDE: Disallowance of $139,000 Bank Claim Upheld ENRIQUE V. GREENBERG: Bid to Stay Case Dismissal Order Nixed EP TECHNOLOGY: Sale of EP Tech Goods to ShenZhen Approved ESSEX CONSTRUCTION: Englander Wins Clawback Suit vs Blunt et al. EXTRACTION OIL: Court OKs Agreement for $200M Backstop EXTRACTION OIL: Plan to Raise $200M Could be Okayed by Court FALCON V: Surety Bond Program Not Executory Contract, Court Says FIC RESTAURANTS: Seeks to Hire Carl Marks Advisory, Appoint CRO FIC RESTAURANTS: Seeks to Hire Womble Bond Dickinson as Counsel FIC RESTAURANTS: Taps Donlin Recano & Co. as Administrative Advisor FINANCE OF AMERICA: Fitch Assigns B+ LongTerm IDR, Outlook Stable FIVE STAR: Swings to $3.7 Million Net Income in Third Quarter FOREVER 21: Reviving Chapter 11 Is Good for Creditors FRANCESCA'S HOLDINGS: Seeks Rent Relief to Avoid Bankruptcy FREDERICK D. FEIGL: Fairlane Loan Dischargeable, Court Says FRONTIER COMMUNICATIONS: Court Tosses Hwa's Emergency Bid for Stay FRONTLINE TECHNOLOGY: Seeks Approval to Hire Bush Ross as Counsel FTS INTERNATIONAL: Court Confirms Debt-Equity Swap Plan FTS INTERNATIONAL: Lenders to Get 90.1% of Company Under Plan FURIE OPERATING: Deutsche Oel Suit vs ECP Moved to Delaware Court GATEWAY CASINOS: S&P Affirms 'CCC+' ICR After LEEFF Funding GATEWAY FOUR: Trustee Hires Levene Neale as Counsel GATEWAY FOUR: Trustee Taps Sherwood Partners as Financial Advisor GLEN THOMAS PASAK: CCG's Objection to Property Sale Sustained GUEST STARS: Seeks to Hire Markus Williams as Counsel HARTSHORNE HOLDINGS: Nov. 9 Hearing on Sale of Assets to Frozen HERTZ CORP: Dismissed from Denicolo Suit in Light of Bankruptcy HERTZ GLOBAL: Chooses Apollo Global to Loan $4B for Car Purchases HRI HOLDING: Court OKs Ch. 11 Plan With Creditor Deal HUMANIGEN INC: Signs Research and Development Deal with DoD HYSTER-YALE MATERIALS: S&P Affirms 'B' ICR; Outlook Positive IFS SECURITIES: Liquidating Plan Confirmed by Judge IFS SECURITIES: U.S. Trustee's Plan Objection Overruled IMERYS TALC: Arnold & Itkin Says Confirmation Schedule Not Feasible IMERYS TALC: J&J Says Deficient TDPs Make Plan Unconfirmable IMERYS TALC: J&J Slams Objection to $20-Mil. Ch. 11 Claim IMERYS TALC: U.S. Trustee Says Disclosures Inadequate INTEGRATED DENTAL: Dec. 1 Auction of Substantially All Assets J.C. PENNEY: Lenders Want to Slow Down Property Sale J.C. PENNEY: Says Shareholders' DIP Loan Challenges 'Ludicrous' J.C. PENNEY: Unsecured Creditors to Get Less Than 1% in Plan JOHN PALCZUK: Wins Summary Judgment Bid Against Conways JOHNS MANVILLE: Order Enjoining Berry's Asbestos Claims Upheld KB US HOLDINGS: Unsecureds to Receive Nothing in Sale Plan KIMBALL HILL: Bankruptcy Court Keeps Civil Contempt Ruling v F&D LCF LABS: Hires Grobstein Teeple as Financial Advisor LEHMAN BROTHERS: 2nd Cir. Affirms Ruling on Guarantee Claims LIVE WELL: Court Dismisses Pending Bankruptcy Claims LONESTAR RESOURCES: Cole, Stroock Represent Noteholders Group MALLINCKRODT PLC: Bielli, et al. Update List of NAS Committee MALLINCKRODT PLC: Law Firm of Russell Represents Utility Companies MARKHAM, IL: S&P Affirms 'B' GO Bond Rating; Outlook Stable MCQUILLEN PLACE: C&RI Fails in Bid to Halt Property Sale MD AMERICA ENERGY: Parkins Lee Represents Waller, Wilson MD AMERICA ENERGY: Vinson & Elkins Represents Term Lender Group MICHAEL K. HERRON: $240K Sale of Pittsburgh Property Confirmed MICHAEL K. HERRON: $400K Sale of Pittsburgh Property Confirmed NATIONAL CINEMEDIA: S&P Lowers ICR to 'CCC+'; Outlook Negative NEFFGEN FAMILY: Nov. 17 Hearing on Liquidation of Inventory NEPHROS INC: Appoints Dan D'Agostino as CFO NEPHROS INC: Incurs $1 Million Net Loss in Third Quarter NINE ENERGY: S&P Lowers ICR to 'SD' on Below-Par Debt Repurchases NINE WEST: Court Narrows Claims in Trustee's Securities Suit NPC INTERNATIONAL: Bell Nunnally Represents CenturyLink, BVMC NSA INTERNATIONAL: S&P Alters Outlook to Developing OASIS PETROLEUM: Ch. 11 Bankruptcy Filing Stays GEM Razorback Suit PAPER STORE: G2 Capital Helped Execute 363 Sale Process PAPER STORE: WS Development Acquires Business PAUL OLIVA PARADIS: Nov. 9 Hearing on $3.6M Sand Dune Property Sale PBF HOLDING: S&P Lowers ICR to 'B+'; Outlook Negative PEPITA BAYSA MILLAN: Time Close Newark Property Sale Not Extended PHARMHOUSE INC: Canopy Rivers to Write Down CA$82.8 Million PORTOFINO TOWERS: Seeks to Hire Joel M. Aresty as Legal Counsel PROMISE HEALTHCARE: Court Confirms Chapter 11 After Long Talks RAYONIER ADVANCED: Posts $29 Million Net Income in Third Quarter REALOGY GROUP: S&P Upgrades ICR to 'B+'; Outlook Stable REGUS CORP: 2% of Locations Sent to Chapter 11 REMINGTON OUTDOOR: Ordered to Continue Retirees Health Payments ROBERT ALLEN: Description of Sold Pocatello Properties Corrected RTI HOLDING: Hires Johnson Associates as Compensation Advisor SAEXPLORATION HOLDINGS: Settles SEC's Fraud Claims SCI DIRECT: Ohio Judge Says UST Quarterly Fee Hike Okay SCIENTIFIC GAMES: Incurs $111 Million Net Loss in Third Quarter SCREENVISION LLC: S&P Downgrades ICR to 'CCC+'; Outlook Negative SIMPLY GOOD FOODS: S&P Alters Outlook to Stable, Affirms 'B+' ICR SMARTOURS LLC: Winston, Young Represent Secured Parties SOCO REAL ESTATE: Ruling on Little City Investments' Claim Flipped SOURCE ENERGY: DBRS Lowers Issuer Rating to Selective Default SPI ENERGY: Issues $2.1 Million 10% Convertible Promissory Note SUPERIOR PLUS: DBRS Confirms BB(high) Issuer Rating, Trend Stable TITAN INTERNATIONAL: Incurs $12.6 Million Net Loss in Third Quarter TOP THAT COMMERCIAL: Case Summary & 20 Largest Unsecured Creditors TOWN SPORTS: Sale of All Assets to New TSI Approved TRANSOCEAN LTD: Posts $359 Million Net Income in Third Quarter TRIBUNE CO: 3rd Cir. Upholds Cramdown Terms of Exit Plan TRICKLING SPRINGS: Trustee Selling Remnant Assets to Oak for $5K TUPPERWARE BRANDS: S&P Raises ICR to CCC; Ratings on Watch Positive U.S.A. PARTS: Bankr. Court Agrees to Subject Matter Jurisdiction UNITED BANCSHARES: Late 10-Q Shows $115K Net Loss for Q2 2017 UNITED BANCSHARES: Late 10-Q Shows $203K Net Loss for Q1 2017 UNITED BANCSHARES: Late 10-Q Shows $29K Net Income for Q3 2017 UNITED ROAD: Sale Order Bars Strong-Davis Discrimination Suit VALLEY EQUITIES: Hires Lee & Associates as Real Estate Broker VIVUS INC: Reaches Deal That Paves Way for Icahn's Ownership W.F. GRACE: Hires William S. Gannon as Bankruptcy Counsel WAYSIDE SCHOOLS, TX: S&P Lowers Bond Ratings to 'BB' WEINSTEIN CO: Gets Court's Approval for Chapter 11 Plan Vote WESTMORELAND COAL: McKinsey Trial on Hold Until 2021 WINDSTREAM HOLDINGS: Investor's Claims vs General Counsel Rejected YOGAWORKS INC: Hires Force 10 Partners as Financial Advisor YOGAWORKS INC: Hires Force 10 Partners as Financial Advisor [*] Commercial Bankruptcy Filings Rose by 30% YTD in October [*] Note of Environmental Obligations When Filing for Bankruptcy [^] BOND PRICING: For the Week from November 2 to 6, 2020 ********* 24 HOUR FITNESS: Plan Unfair as It Favors Lenders, Says Committee ----------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that bankrupt 24 Hour Fitness Worldwide Inc.'s Chapter 11 plan would unfairly give most of the gym operator's value to post-bankruptcy lenders, according to the committee of unsecured creditors. Post-bankruptcy debtor-in-possession lenders are "poised to recover a multiple of the value of their claims," the committee said Wednesday in a filing with the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 plan "all but ensures" that unsecured creditors will recover nothing, it said. The chain’s "businesses are far more valuable than the Debtors conclude," the committee added in its objection to 24 Hour Fitness' disclosure statement filed with the. 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. 2MORROWS SOLUTIONS: $252K Philly Property Sale Denied w/o Prejudice ------------------------------------------------------------------- Judge Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania denied without prejudice 2morrows Solutions 2day, LLC's sale of the real property located at 2452 Kimball Street, Philadelphia, Pennsylvania to JS Property Brothers 1, LLC for $252,000, subject to overbid, for failure to file any documents demonstrating compliance with L.B.R 9014-3(c), (e) and (g). The Debtor's Schedules reflect, among other things, that it is the fee owner of two separate parcels of improved real estate, including (a) 1452 Kimball Street, Philadelphia, PA 19146 and (b) the Property, and that the Properties are subject to various mortgages, liens and judgments. The Debtor financed a significant amount of the acquisition of a third parcel of improved real estate located at 3837 N. 17th Street, Philadelphia, PA 19140 but the property is held by Bass, LLC. The Bass Property also serves as collateral for the mortgages on the other Properties. About Solutions 2day Solutions 2day, LLC, sought Chapter 11 protection (Bankr. E.D. Pa. Case No. 20-13870) on Sept. 25, 2020. In the petition signed by Jacky Veasly, member, the Debtor was estimated to have assets in the range of $500,000 to $1 million and $1 million to $10 million in debt. The Debtor tapped Jeffrey M. Carbino, Esq., at Jensen Bagnato, P.C. as counsel. ALPHATEC HOLDINGS: Incurs $15.7 Million Net Loss in Third Quarter ----------------------------------------------------------------- Alphatec Holdings, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $15.67 million on $41.16 million of total revenue for the three months ended Sept. 30, 2020, compared to a net loss of $14.57 million on $29.20 million of total revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $52.19 million on $100.91 million of total revenue compared to a net loss of $39.97 million on $81.07 million of total revenue for the same period during the prior year. As of Sept. 30, 2020, the Company had $154.68 million in total assets, $48.16 million in total current liabilities, $65.76 million in long-term debt (less current portion), $56,000 in operating lease liability (less current portion), $9.04 million in other long-term liabilities, $23.60 million in redeemable preferred stock, and $8.05 million in total stockholders' equity. "We have built the foundation for long-term success," said Pat Miles, chairman and chief executive officer. "This marks our eighth consecutive quarter of double-digit revenue growth. Our recently completed follow-on offering will fuel the Organic Innovation Machine and continue to drive clinical distinction. We thank those who have invested in our mission to revolutionize the approach to spine surgery. I could not be more confident in ATEC's future. Our best is yet to come." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1350653/000156459020051493/atec-10q_20200930.htm About Alphatec Holdings Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC architects and commercializes approach-based technology that integrates seamlessly with the SafeOp Neural InformatiX System to provide real-time, objective nerve information that can enhance the safety and reproducibility of spine surgery. Alphatec reported a net loss of $57 million for the year ended Dec. 31, 2019, compared to a net loss of $28.97 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $161.13 million in total assets, $42.79 million in total current liabilities, $66.07 million in long-term debt, $191,000 in operating lease liability, $9.65 million in other long-term liabilities, $23.60 million in redeemable preferred stock, and $18.82 million in total stockholders' equity. ANTERO MIDSTREAM: S&P Rates New $400MM Senior Unsecured Notes 'B-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'B-' issue-level rating and '3' recovery rating to Antero Midstream Partners L.P.'s proposed $400 million senior unsecured notes due 2026. The '3' recovery rating indicated S&P's expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The company intends to use the net proceeds from these notes to repay outstanding borrowings under its $2.1 billion revolving credit facility. APOLLO ENDOSURGERY: Incurs $2.6 Million Net Loss in Third Quarter ----------------------------------------------------------------- Apollo Endosurgery, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.60 million on $12.83 million of revenues for the three months ended Sept. 30, 2020, compared to a net loss of $8.66 million on $11.26 million of revenues for the three months ended Sept. 30, 2019. "The third quarter rebound in elective procedures in our direct markets was both quicker and stronger than our early expectations," stated Todd Newton, Apollo's chief executive officer. "We also took steps in the third quarter to lower our annual operating expenses and improve our liquidity position. As a result, we believe our liquidity provides sufficient runway through 2021 and through the COVID-19 pandemic, completion of the MERIT trial, and launch of X-Tack." For the nine months ended Sept. 30, 2020, the Company reported a net loss of $19.11 million on $29.19 million of revenues compared to a net loss of $20.24 million on $38.72 million of revenues for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $80.69 million in total assets, $70.27 million in total liabilities, and $10.42 million in total stockholders' equity. Cash, cash equivalents and restricted cash were $38.2 million as of Sept. 30, 2020. The Company has experienced operating losses since inception and expects its negative cash flows from operating activities to continue. To date, the Company has funded its operating losses through equity offerings and the issuance of debt instruments. The Company's ability to fund operations and meet debt covenant requirements will depend on its level of future revenue and operating cash flow and its ability to access additional funding through either equity offerings, issuances of debt instruments or both. At Dec. 31, 2019 and March 31, 2020, substantial doubt existed about the Company's ability to continue as a going concern due to the temporary reduction in sales resulting from the COVID-19 pandemic and the uncertainty regarding how long COVID-19 would impact the Company's business. As a result, the auditor's opinion on the Company's audited financial statements for the year ended Dec. 31, 2019 includes an explanatory paragraph stating that losses and negative cash flows from operations and uncertainty in generating sufficient cash to meet operations raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1251769/000125176920000112/apen-20200930.htm About Apollo Endosurgery Apollo Endosurgery, Inc. -- http://www.apolloendo.com-- is a medical technology company focused on less invasive therapies to treat various gastrointestinal conditions, ranging from gastrointestinal complications to the treatment of obesity. Apollo's device-based therapies are an alternative to invasive surgical procedures, thus lowering complication rates and reducing total healthcare costs. Apollo's products are offered in over 75 countries and include the OverStitch Endoscopic Suturing System, the OverStitch Sx Endoscopic Suturing System, and the ORBERA Intragastric Balloon. Apollo Endosurgery incurred a net loss of $27.43 million in 2019 compared to a net loss of $45.78 million in 2018. As of June 30, 2020, the Company had $60.09 million in total assets, $70.67 million in total liabilities, and a total stockholders' deficit of $10.58 million. KPMG LLP, in Austin, Texas, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 26, 2020 citing that the Company has suffered recurring losses from operations, cash flow deficits and debt covenant violations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. ASARCO INC: 9th Cir Limits Recoverable in CERCLA Contribution Claim ------------------------------------------------------------------- The National Law Review reports that in ASARCO v. Atlantic Richfield, No. 18-35934 (9th Cir. Sept. 14, 2020), ASARCO entered into a consent decree under which ASARCO agreed to pay $111.4 million. ASARCO then sought contribution from Atlantic Richfield. The district court found Atlantic Richfield to be responsible for 25% of ASARCO's response costs. The Ninth Circuit upheld the district court's allocation but rejected the court's finding that all $111 million could, at present, be considered necessary costs of response recoverable in contribution by ASARCO. Although certain costs have already been expended, the Ninth Circuit considered whether the full settlement could be considered necessary response costs eligible for contribution. The cleanup method had not been determined. Nevertheless, the district court was “convinced that the balance of the approximate $50 million in the trust will most likely be expended to achieve the mandated remediation results.” Under that reasoning, the district court found all $111 million was eligible to be recovered in contribution by ASARCO. The Ninth Circuit disagreed. The Court found that the expert opinion offered by ASARCO, which did not identify the final remedy but instead opined that "something at some point is going to have to be done," was too speculative and based on conjecture to allow a finding that all $111 million were necessary costs of response recoverable – at present – in contribution. Under the Court's holding, ASARCO is able to recover those necessary costs of response that have been incurred and also is entitled to a declaratory judgment that "establishes liability and an allocation for those costs that have not been incurred yet, but may be incurred in the future." As with the Third Circuit opinion we recently posted about, this settlement was in the context of a bankruptcy, and the Ninth Circuit acknowledges that the unique facts here make the holding "a narrow one." The settlement here was a global settlement for several contaminated sites. In 2005, ASARCO filed a Chapter 11 bankruptcy petition and in 2009, ASARCO, the United States, and the state of Montana reached two settlement agreements and two consent decrees, which resolved ASARCO's liabilities at several Montana sites, including the one at issue in this case. One of those consent decrees created a custodial trust for the sites, and identified EPA as the lead agency responsible for authorizing all work performed and funds expended from the trust. Any unused funds from remediated sites are diverted to other sites, so the Ninth Circuit's concern that not all $111 million would be expended at this site was based on the terms of the settlement itself. In addition, the projected costs of the remediation at the site were based on a pump-and-treat remedy, which "now appears extremely unlikely to come to fruition." For those reasons, the Ninth Circuit emphasized the narrowness of its holding. Although the Ninth Circuit's holding is a narrow one, it emphasizes again the need for specificity in settlement agreements. That may not always be possible in the context of a global settlement like the one in ASARCO v. Atlantic Richfield. This case is another in a long series of cases that demand care in the accounting that supports or defends a CERCLA contribution claim. Parties may want to devote attention early to what costs are at issue, whether those costs are sufficiently concrete to be reallocated, who incurred those costs, and whether the contribution plaintiff has or will incur more than its fair share of those costs under at least someone's theory of the case. 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: Gets Approval to Hire Deloitte & Touche as Auditor ----------------------------------------------------------------- Ascena Retail Group, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Deloitte & Touche LLP as their independent auditor. Deloitte & Touche will perform an audit for Ascena, in accordance with the auditing standards of the Public Company Accounting Oversight Board and express opinions on the fairness of the presentation of Ascena's financial statements for the year ending August 1, 2020, in conformity with accounting principles generally accepted in the United States of America. In addition, Deloitte & Touche will perform a review of Ascena's condensed interim financial information in accordance with the PCAOB standards of each of the quarters in the year ending August 1, 2020. Deloitte & Touche will charge periodically for its audit services, excluding the "out-of-scope" services. The remaining payments to be made are: Invoice Date Amount June 2020 $343,750 July 2020 $343,750 August 2020 $343,750 September 2020 $343,750 Out-of-scope services will be billed at the following rates: Partner/Principal/Managing Director $500 per hour Senior Manager $430 per hour Manager $375 per hour Analyst $300 per hour Staff $200 per hour Deloitte & Touche 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: Jonathan S. Rothman Deloitte & Touche LLP 30 Rockefeller Plaza New York, NY 10112-0015 Phone: +1 212 436 6580 Email: jrothman@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. AT HOME GROUP: Martin Eltrich Quits as Director ----------------------------------------------- Mr. Martin C. Eltrich, III resigned from the Board of Directors of At Home Group Inc. effective on Oct. 29, 2020. Mr. Eltrich's decision to resign is not the result of any disagreement with the Company. About At Home Group Inc. At Home (NYSE: HOME), is a home decor retailer offering more than 50,000 on-trend home products to fit any budget or style, from furniture, mirrors, rugs, art and housewares to tabletop, patio and seasonal decor. At Home is headquartered in Plano, Texas, and currently operates 219 stores in 40 states. At Home recorded a net loss of $214.4 million for the year ended Jan. 25, 2020, compared to net income of $48.99 million for the year ended Jan. 26, 2019. As of July 25, 2020, the Company had $2.33 billion in total assets, $1.98 billion in total liabilities, and $343.44 million in total shareholders' equity. As reported by the TCR on Aug. 18, 2020, S&P Global Ratings raised its issuer credit rating on U.S.-based home decor retailer At Home Group Inc. to 'B-' from 'CCC+' and removed its ratings on the company from CreditWatch, where it placed them with positive implications on Aug. 3, 2020. BASS PRO: S&P Hikes ICR to 'B+' on Resilient Operating Performance ------------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on Springfield, Mo.-based sporting goods retailer Bass Pro Group LLC to 'B+' from 'B'. The upgrade reflects Bass Pro's accelerated deleveraging supported by its good operating performance and expected debt repayment. The company saw strong demand for its products amid the COVID-19 pandemic as consumers shifted their purchases toward gear for socially distanced entertainment options and hobbies. Bass Pro's latest third-quarter and year-to-date 2020 results exceeded S&P's previous expectations as its sales increased by more than 9% while its adjusted EBITDA rose by 34% on a trailing-12-month basis through the end of September. This performance, in addition to working capital inflows, bolstered the company's free cash flow, increasing significantly for the first nine months of the year. Bass Pro used its cash flow generation, in part, to reduce its leverage. This includes fully redeeming the remaining $284 million of preferred shares that we considered debt in S&P's adjusted credit metrics and paying down the outstanding borrowings under its asset-based lending (ABL) revolver. In addition, the company maintained significant balance sheet cash after the debt redemption, which led to a further improvement in its S&P-adjusted credit protection metrics relative to the rating agency's prior estimates. Incorporating its improved operations and debt reduction, S&P projects Bass Pro will have adjusted leverage in the mid-4x area in 2020, which compares with the 6.2x area as of year-end 2019. S&P said, "We estimate the company's adjusted leverage metrics will weaken somewhat to the low 5x area due to a normalization in its demand trends and operating results in 2021." "In our opinion, Bass Pro's recent performance trends not only benefited from its market position as a destination-oriented retailer but also from pull-forward demand in many of its product verticals. This includes higher consumer spending on outdoor products, sporting goods, and firearms this year. However, we expect these product categories to experience lower demand levels in 2021 and project that the company's sales and profitability may moderate. We believe the normalization in its demand will cause Bass Pro's sales to decline by the low single digit percent area while its adjusted EBIDTA contracts by about 10% in 2021 relative to 2020. That said, we expect the company's leverage to remain in low-5x area in fiscal year 2021, which is commensurate with our expectations for a 'B+' rating. We view these projections as being toward the stronger end of the range for our financial risk profile assessment. The company's planned deleveraging, in combination with the recent performance trends supported by its leading market position, led us to revise our comparable ratings analysis modifier on Bass Pro to neutral from negative." Bass Pro Group will maintain its leading market position in the highly competitive sporting goods and outdoor recreation market. The company's profitability has historically benefitted from its good penetration of private-label brands and its fast-growing, vertically integrated recreational boat business. S&P said, "We believe Bass Pro's large destination store format (which we view as being less concerning for its customers than the smaller locations operated by its peers), compelling in-store experiences, and recently enhanced e-commerce platform will support its results despite the shift in consumer shopping behaviors due to the pandemic. We believe this position provides it with good insulation against online competitors that cannot replicate the same experience without material investments. In addition, the company generates a sizable proportion of its revenue from products and services that are not easily replicable or not typically sold online. These include boats, firearms and ammunition, lodging and outdoor excursions, and personal vehicles, in addition to the company's private-label brands." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety S&P said, "The stable outlook reflects our expectation that its performance may likely moderate over the next year amid the uncertain economic climate and the unclear trends in the sporting industry, which we envision will lead it to report adjusted leverage in the low 5x area in 2021." "We could raise our rating on Bass Pro if it sustains its good operating performance through 2021 underscored by continued operational improvements in a post-pandemic environment. We believe this could occur if we expect it to sustain positive comparable sales and EBITDA margins in the high teens percent area over the coming 12 months. Under this scenario, we would also expect Bass Pro to sustain adjusted leverage of less than 5x supported by its financial policy." "We could lower the rating on Bass Pro if we expect its operating performance to become more volatile in 2021, potentially due to materially reduced demand for sporting goods and increased promotional activity because of heightened competition. This scenario would likely lead to a significant contraction in the company's sales and adjusted margins such that we expect it to sustain leverage in the 6x area or above. This could also occur if Bass Pro adopts a more aggressive financial policy that leads to a higher outstanding debt balance than we currently assume." BLITMAN SARATOGA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Blitman Saratoga LLC 222 Bloomingdale Rd White Plains, NY 10605-1513 Business Description: Blitman Saratoga LLC was formed in 2012 to develop and build a residential community consisting of at least 77 single-family homes spread over approximately 149 acres on Geyser Road in Saratoga County, New York. Chapter 11 Petition Date: November 6, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-23177 Judge: Hon. Robert D. Drain Debtor's Counsel: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway 22nd Floor New York, NY 10036 Tel: (212) 221-5700 Email: knash@gwfglaw.com Total Assets: $5,857,288 Total Liabilities: $2,755,584 The petition was signed by Thomas P. Keany, managing member. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KNQ6Q4Y/Blitman_Saratoga_LLC__nysbke-20-23177__0001.0.pdf?mcid=tGE4TAMA BOY SCOUTS OF AMERICA: Court Stays Simpson Suit vs LHCI et al. -------------------------------------------------------------- Magistrate Judge Colin H. Lindsay granted the motion of Non-Stayed Defendants Lincoln Heritage Council, Inc.; Jason Pierce; and David Sikes to stay all proceedings pending resolution of Boy Scouts of America's bankruptcy. The Plaintiff filed his Complaint on Dec. 2, 2019, alleging numerous causes of action including discrimination; retaliation; defamation; breach of contract; and violations of Title VII of the Civil Rights Act of 1964, the Fair Labor Standards Act, and the Kentucky Civil Rights Act, among other statutes. The Plaintiff's Complaint named multiple Defendants, including the Non-Stayed Defendants and Defendant Boy Scouts of America. The Plaintiff generally alleged that the Defendants unlawfully discriminated and retaliated against him as a result of his sexual orientation. On Feb. 18, 2020, the Boy Scouts filed a petition for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware and filed its Suggestion of Bankruptcy in this action. The Boy Scouts' Suggestion of Bankruptcy notified this Court and the Plaintiff that its chapter 11 bankruptcy filing triggered an injunction staying the continuation of this proceeding against it. On March 16, 2020 the Non-Stayed Defendants filed the instant Motion to Stay all Proceedings Pending Resolution of Bankruptcy or, in the Alternative, Stay for Ninety Days. In their Motion, the Non-Stayed Defendants urged the Court to stay all proceedings pending resolution of the Boy Scouts' bankruptcy or, in the alternative, stay all proceedings for ninety days. The Non-Stayed Defendants argued that granting this stay would further the purposes of the automatic stay by relieving the Boy Scouts of the financial pressure that drove it into bankruptcy (pending lawsuits) and permitting the Boy Scouts to formulate a plan with respect to its reorganization in the Bankruptcy Action. The Non-Stayed Defendants asserted that granting their Motion would not prejudice the Plaintiff as his claims against both the Boy Scouts and the Non-Stayed Defendants arise from the same facts. Rather, denying their Motion would prejudice both parties as neither would be able to conduct discovery of the Boy Scouts and Plaintiff's full requested relief would not be available. Further, denying the Motion would substantially burden the Boy Scouts, whose pre-bankruptcy insurance covered the Non-Stayed Defendants' legal fees, and who, before the bankruptcy, participated in the Non-Stayed Defendants' defense. The Non-Stayed Defendants pointed out they comprise an organization chartered by the Boy Scouts and two employees of the organization. The Plaintiff opposed a stay of proceedings but agreed to a ninety day stay to allow the Boy Scouts time to formulate a reorganization plan. The Plaintiff argued the discovery process should commence between him and the Non-Stayed Defendants as their legal fees are covered under their insurance policy, thus no substantial burden would be placed on the Boy Scouts by participating in the Non-Stayed Defendants' defense. Further, the Non-Stayed Defendants maintain local counsel thus alleviating any burden on the Boy Scouts. The Plaintiff argued that the purpose of the automatic stay is for the benefit of the debtor, not solvent codefendants, and a stay pending bankruptcy could extend proceedings by an undeterminable amount of time. According to Judge Lindsay, the Non-Stayed Defendants are not wholly separate and distinct from the Boy Scouts. Rather, the Non-Stayed Defendants compromise an organization chartered by the Boy Scouts and two employees of said organization. Adding to this entanglement, the Boy Scouts was participating in the legal defense of the Non-Stayed Defendants pre-bankruptcy and carried an insurance policy for the Non-Stayed Defendants' legal fees. Further, the Court agreed with the Non-Stayed Defendants, that advancing discovery between themselves and Plaintiff would indirectly involve and burden the Boy Scouts. The Court also found it likely that if the case continued against the Non-Stayed Defendants, the Boy Scouts would be forced to participate in the legal defense of the Non-Stayed Defendants. Given the entanglement of the Non-Stayed Defendants and the Boy Scouts, the Court found granting the requested stay as to the Non-Stayed Defendants would further the purpose of the automatic stay -- allowing the Boy Scouts a breathing spell and permitting time to formulate a reorganization plan. The Court also found that the Non-Stayed Defendants have demonstrated sufficient unusual circumstances to justify a stay of proceedings. Thus, Judge Lindsay stayed all Proceedings as to Defendants Lincoln Heritage Council, Inc.; Jason Pierce; and David Sikes pending the resolution of the bankruptcy proceedings filed by Defendant Boy Scouts of America or further order from the Court. The Plaintiff and Defendants Lincoln Heritage Council, Inc.; Jason Pierce; and David Sikes must file a joint status report on Dec. 22, 2020, and every 90 days thereafter regarding the status of the bankruptcy proceedings. The case is in re: JOSHUA SIMPSON, Plaintiff, v. LINCOLN HERITAGE COUNCIL, INC., et al., Defendants, Civil Action No. 3:19-CV-879-RGJ-CHL (W.D. Ky.). A copy of the Court's Memorandum Opinion and Order is available at https://bit.ly/35d1kHy from Leagle.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 lvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. BROOKLYN ROASTING: Hires Klestadt Winters as Counsel ---------------------------------------------------- Brooklyn Roasting Works LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ Klestadt Winters Jureller Southard & Stevens, LLP, as counsel to the Debtors. Brooklyn Roasting requires Klestadt Winters to: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operate of their business and properties; b. advise and consult on the conduct of these Subchapter V Cases, including all of the legal and administrative requirements of operating in Subchapter V of Chapter 11; c. attend meetings and negotiating 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 and/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, including appearing before the Court to represent the interests of the Debtors' estates; f. review, analyze and respond, as necessary, to all applications, motions, orders, and statements, and scheduled filed with the Court in these cases; g. take any necessary action on behalf of the Debtors to negotiate, prepare and obtain approval and confirmation of a chapter 11 plan and all documents related thereto; h. perform all other necessary legal services for the Debtors in connection with the prosecution of these cases, including (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of claims against the Debtors; and (iii) advising the Debtors on corporate and litigation matters, as necessary or appropriate; and i. perform such legal services as may be required and/or deemed to be in the interest of the Debtors in accordance with their powers and duties as set forth in the Bankruptcy Code. Klestadt Winters will be paid based upon its normal and usual hourly billing rates. The Debtors advanced $58,858 to Klestadt Winters. A total of $8,585 of that amount was for payment of the filing fees associated with the Debtors' five related petitions. A balance of $3,732.83 was remaining and unused as of the Petition Date. Klestadt Winters will also be reimbursed for reasonable out-of-pocket expenses incurred. Tracy L. Klestadt, partner of Klestadt Winters Jureller Southard & Stevens, 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 does not represent any interest adverse to the Debtors and their estates. Klestadt Winters can be reached at: Tracy L. Klestadt, Esq. KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP 200 West 41st Street, 17th Floor New York, NY 10036-7203 Tel: (212) 972-3000 Fax: (212) 972-2245 About Brooklyn Roasting Works 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. CADIZ INC: Reports $4.5 Million Net Loss for Third Quarter ---------------------------------------------------------- Cadiz Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss and comprehensive loss applicable to common stock of $4.49 million on $139,000 of total revenues for the three months ended Sept. 30, 2020, compared to a net loss and comprehensive loss applicable to common stock of $7.44 million on $110,000 of total revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss and comprehensive loss applicable to common stock of $29.80 million on $401,000 of total revenues compared to a net loss and comprehensive loss applicable to common stock of $22.18 million on $330,000 of total revenues for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $73.37 million in total assets, $95.89 million in total liabilities, and a total stockholders' deficit of $22.52 million. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/727273/000143774920022803/cdzi20200930c_10q.htm About Cadiz Founded in 1983 and headquartered in Los Angeles, California, Cadiz Inc. -- http://www.cadizinc.com-- is a natural resources development company dedicated to creating sustainable water and agricultural opportunities in California. The Company owns approximately 45,000 acres of land with high-quality, naturally recharging groundwater resources in three areas of Southern California's Mojave Desert. Cadiz reported a net loss and comprehensive loss of $29.53 million for the year ended Dec. 31, 2019, compared to a net loss and comprehensive loss of $26.27 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $74.07 million in total assets, $93.76 million in total liabilities, and a total stockholders' deficit of $19.68 million. Cadiz said in its Annual Report for the period ended Dec. 31, 2019, that limitations on the Company's liquidity and ability to raise capital may adversely affect it. "Sufficient liquidity is critical to meet the Company's resource development activities. Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can be no assurance that its liquidity requirements will continue to be satisfied. If the Company cannot raise needed funds, it might be forced to make substantial reductions in its operating expenses, which could adversely affect its ability to implement its current business plan and ultimately impact its viability as a company." CAESARS ENTERTAINMENT: Young Suit Won't Go to Trial, Court Says --------------------------------------------------------------- In the case captioned HATTIE YOUNG, Plaintiff, v. BL DEVELOPMENT CORP. D/B/A HARRAH'S CASINO TUNICA AND VERANDA HOTEL, Defendant, Civil Action No. 3:19CV034-NBB-RP (N.D. Miss.), District Judge Neal B. Biggers, Jr. granted the Defendant's motion for summary judgment and denied the Plaintiff's motion to exclude testimony of Monica Fuess and the motion for adverse inference based upon spoliation of evidence. The court found no genuine issue of material fact in dispute in this case. Accordingly, the defendant's motion for summary judgment is granted. On May 12, 2013, Hattie Young and her husband were guests at the Veranda Hotel on the premises of Harrah's Casino in Robinsonville, Mississippi. At some point during her stay, the plaintiff attempted to take a shower. She alleged that a rubber mat was located on the floor of the tub beneath the shower and was located there when she first arrived to her guest room. She asserted that she placed one foot in the tub without incident, but as she placed her second foot in, the mat slid, causing her to fall and sustain injuries. She alleged she examined the mat after her fall and noticed it had suction cups on the bottom. She found no defect in the mat and testified that she does not know why the mat slid except for the alleged fact that it was apparently not affixed to the floor of the tub which, she surmises, allowed it to slip. The plaintiff stated that there was no way to look at the mat and know that it was going to slip. It is undisputed that the mat itself was in good condition and not defective. It is also undisputed that the plaintiff was a business invitee of the defendant at all relevant times. After the plaintiff's incident but prior to her filing suit, the defendant filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Illinois, and an automatic stay went into effect. The automatic stay was lifted on Oct. 6, 2017, and replaced by an injunction order entered by the bankruptcy court which, pursuant to its own terms, had the same effect as the automatic stay. The bankruptcy court entered an order modifying this injunction on Jan. 28, 2019, allowing the plaintiff to bring the present action within 30 days of the date of the order. The plaintiff filed her complaint for negligence against the defendant in this court on Feb. 20, 2019, invoking the court's diversity of citizenship jurisdiction pursuant to 28 U.S.C. section 1332, and alleging that the defendant's negligence caused the injuries she sustained as a result of her fall. The defendant moved to dismiss arguing that the plaintiff was required to file her complaint within 30 days after the automatic stay was lifted and asserting that the plaintiff therefore filed outside the applicable statute of limitations. This court disagreed and denied the motion to dismiss but granted the defendant's motion to certify the issue for interlocutory appeal. The Fifth Circuit Court of Appeals, however, declined to hear the interlocutory appeal. The defendant then moved for summary judgment, and the plaintiff moved to exclude the testimony of one of the defendant's witnesses and moved for an adverse inference based on alleged spoliation of evidence on the part of the defendant. It is undisputed that the plaintiff was a business invitee at all times relevant to this lawsuit. Under Mississippi law, "[t]he owner or operator of a business premises owes a duty to an invitee to exercise reasonable care to keep the premises in a reasonably safe condition and, if the operator is aware of a dangerous condition, which is not readily apparent to the invitee, he is under a duty to warn the invitee of such condition." It is, however, axiomatic that "the operator of a business is not an insurer against all injuries." Indeed, "[t]hat the proprietor of a . . . place of business is not an insurer of the safety of persons who come upon the business premises is a principle of law of negligence so familiar and so well established as to obviate the necessity of citing supporting authority. "Proof merely of the occurrence of a fall on a floor within a business is insufficient to show negligence on the part of the proprietor . . . and the doctrine of res ipsa loquitur is inapplicable in cases of this kind." In Stanley v. Boyd Tunica, Inc., 29 So.3d 95, 97 (Miss. Ct. App. 2010), it was stated that "Strict liability is not imposed on business owners in premises liability cases." To establish the business owner or operator's negligence, the plaintiff must show either (1) that the owner or operator caused the unreasonably dangerous condition or (2) in the event the dangerous condition was caused by a third party unconnected to the business operation, that the owner or operator had either actual or constructive knowledge of said dangerous condition. It is also undisputed in this case that the rubber bath mat was in good condition and not defective. In Stanley v. Boyd Tunica, Inc., the Mississippi Court of Appeals affirmed the trial court's grant of summary judgment finding that a non-defective rubber mat that twists or slips and causes a person to fall is not a dangerous condition and cannot be the basis for premises liability. The plaintiff attempted to distinguish Stanley on the basis that the defendant there was not in exclusive control of the shower mat, as the plaintiff's wife had taken a shower without incident just prior to the plaintiff's fall. In the present case, the plaintiff was the first to shower. As the defendant correctly notes, however, the Stanley court examined that fact within the context of the plaintiff's res ipsa loquitur argument. Exclusive control of the instrumentality causing damages is a required element of a res ipsa loquitur theory. "The doctrine of res ipsa loquitur is inapplicable in cases of this kind," however; thus, the plaintiff's argument regarding the defendant's exclusive control of the premises is misplaced, Judge Biggers said. Judge Biggers held that as in Stanley, the plaintiff here has presented no evidence to support her allegations of the defendant's negligence. The plaintiff has offered no proof as to why the mat slipped other than her conclusory allegation and speculation that it slipped because it was not affixed to the bottom of the bathtub. Further, she testified that there was no way to look at the mat and know it was going to slip. A copy of the Court's Memorandum Opinion is available at https://bit.ly/2Hgy7Dl from Leagle.com. About Caesars Entertainment Las Vegas, Nevada-based Caesars Entertainment Corp. (NASDAQ:CZR) -- http://www.caesars.com/-- is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., announced that holders of more than 60% of claims in respect of CEOC's 11.25% senior secured notes due 2017, CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 have signed the Amended and Restated Restructuring Support and Forbearance Agreement, dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and the Consenting Creditors. As a result, the RSA became effective pursuant to its terms as of Jan. 9, 2015. Appaloosa Investment Limited, et al., owed $41 million on account of 10% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case No. 15-10047) on Jan. 12, 2015. The bondholders were represented by Young, Conaway, Stargatt & Taylor LLP. CEOC and 172 other affiliates -- operators of 38 gaming and resort properties in 14 U.S. states and 5 countries -- filed Chapter 11 bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and total debt of $19.8 billion as of Sept. 30, 2014. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings would proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. Kirkland & Ellis served as the Debtors' counsel. AlixPartners acted as the Debtors' restructuring advisors. Prime Clerk LLC acted as the Debtors' notice and claims agent. Judge Benjamin Goldgar presided over the cases. The U.S. Trustee appointed an official committee of second priority noteholders and an official unsecured creditors' committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. The examiner retained Winston & Strawn LLP, as his counsel; Alvarez & Marsal Global Forensic and Dispute Services, LLC, as financial advisor; and Luskin, Stern & Eisler LLP, as special conflicts counsel. CANNABICS PHARMACEUTICALS: Swings to $7.5M Net Loss in Fiscal 2020 ------------------------------------------------------------------ Cannabics Pharmaceuticals Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $7.47 million on $7,157 of net revenue for the year ended Aug. 31, 2020, compared to net income of $1.13 million on $9,843 of net revenue for the year ended Aug. 31, 2019. As of Aug. 31, 2020, the Company had $2.22 million in total assets, $454,787 in total current liabilities, and $1.76 million in total stockholders' equity. Weinstein International. C.P.A., in Tel - Aviv, Israel, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Nov. 4, 2020, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1343009/000168316820003686/cannabics_10k-083120.htm About Cannabics Cannabics Pharmaceuticals Inc., based in Bethesda, Maryland, is dedicated to the development and licensing of personalized cannabinoid-based treatments and therapies. The Company's main focus is development and marketing innovative bioinformatic delivery systems for cannabinoids, personalized medicine therapies and procedures based on cannabis originated compounds and bioinformatics tools. The parent Company Cannabics Inc was founded by a group of Israeli researchers from the fields of cancer research, pharmacology and molecular biology. CARNIVAL CORP: S&P Lowers ICR to 'B'; Outlook Negative ------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Carnival Corp. by two notches to 'B', from 'BB-'. S&P also lowered all issue-level ratings on the company by two notches, in line with the downgrade of the company. At the same time, S&P removed the ratings from CreditWatch, where they were initially placed with negative implications on March 10, 2020. S&P said, "The downgrade reflects our forecast for credit measures and operating cash flow generation through fiscal 2021 (Carnival's fiscal year ends Nov. 30) to be even weaker and more negative than our already anticipated very weak levels. This is because we now anticipate a more protracted return to service for the majority of the company's fleet and significantly lower occupancy levels compared with 2019, particularly for sailings in the first half of 2021. These weaker measures, along with the potential for further suspensions of operations or delays in the resumption of operations in 2021 in response to rising virus cases, translates, in our view, to a greater risk that Carnival would be able to significantly improve its 2022 adjusted leverage to a more manageable level from what we view as unsustainable levels in 2021." "Our updated 2021 forecast reflects a longer period of cash burn than we previously expected, since we now believe operations will resume later and more slowly and capacity and occupancy will remain well below 2019 levels throughout the year. We updated our 2021 forecast to reflect our expectation for a more extended period of capacity introduction and significantly lower occupancy levels compared with 2019, particularly for sailings in the first half of 2021. This translates to a longer period of cash burn and less revenue and EBITDA in our forecast for 2021. Our forecast incorporates further extensions of suspensions in operations in various of Carnival's brands and itineraries since our previous analysis, including the recent extension of the suspension, through Dec. 31, 2020, of Carnival's North American brands. These five brands represent about 60% of Carnival's total capacity." "Our forecast is also notwithstanding the recent expiration of the Centers for Disease Control and Prevention's (CDC) no-sail order and subsequent guidance for the resumption of cruising. This is because the guidance calls for a very gradual return to service for U.S.-based cruises. Operators will first have to bring crews back to the ships and test them for coronavirus, then run multiple test cruises with very minimal levels of volunteer passengers to ensure health and safety protocols are met and are effective, and then apply for and receive the CDC's conditional sailing certificate before resuming passenger operations." "While we believe that resuming operations in a phased manner might help Carnival better align supply and demand, target easily accessible homeports, and better manage itineraries, customers might find the itineraries less desirable since we believe destinations and the length of the itineraries operators are able to offer might be limited due to continued port closures and local government and health authority restrictions. This could pressure pricing, particularly on initial voyages where pricing will already be negatively affected by short booking windows, as tickets will also likely be sold close to sailing. In September and October, Carnival reintroduced a small portion of its capacity with the launch of three of its Costa ships in Italy, and in October, the company launched limited capacity under its AIDA brand. The recent Costa and AIDA sailings operated at materially reduced capacity to ensure proper social distancing and health and safety protocols were met, and we believe pricing was likely low given these itineraries were sold close to the sailing dates and there was minimal advertising for these sailings. Further, following an increase in coronavirus cases in Germany and subsequent tightening of restrictions in that country, AIDA announced a further pause in its operations for the month of November. We believe this illustrates that cruise operators will continue to face heightened risks of additional suspensions even once they are allowed to resume operations in the absence of a widely available vaccine or effective treatment, which could be around mid-calendar-year 2021 under our base case assumptions." "As a result, we continue to forecast very weak credit measures through 2021 after a significant deterioration in 2020, due to the temporary suspension of operations that began in mid-March." S&P's fiscal 2021 forecast assumes: -- Net revenue yields could be about 20%-30% below 2019 levels because of lower occupancy and expected weaker demand, particularly in the first half of the year. -- Total revenue could remain meaningfully below 2019 by 50%-60%, because of a gradual reintroduction of capacity that materially reduces available lower berth days in 2021 compared with 2019, and S&P's expectation that Carnival will operate at much lower occupancy as it resumes operations, and anticipated lower ticket pricing (including the impact of future cruise credits, FCCs). Carnival has stated that as of Sept. 30, 2020, its bookings for capacity in the second half of 2021 are at the higher end of historic ranges. -- S&P believes 2021 capacity will remain well (about 30% or more) below 2019 levels (adjusted for ship disposals in 2020) because of the phased return to service as Carnival tries to manage supply with demand and available itineraries. S&P believes this phased return of capacity, along with the company's accelerated ship disposal schedule (the company expects to dispose of 18 ships by the end of fiscal 2020, 10 of which have been disposed as of Aug. 31, 2020), will offset any incremental capacity from the delivery of five ships between the fourth quarter of 2020 and the end of 2021. -- S&P believes cruise operators will implement social distancing and other health and safety measures on ships to reduce the risk of spread of the virus. It believes these social distancing measures might reduce the maximum potential occupancy on ships, reducing profitability and cash flow. S&P also believes lower demand and lingering travel fears will depress occupancy, particularly in the first half of the year. -- S&P assumes net cruise costs per available lower berth day (ALBD), excluding fuel, might remain elevated above 2019 levels into 2021, given incremental expenses associated with ships remaining out of service, and expenses associated with bringing ships back online. It also believes expenses might be heightened in scenarios where ships that return to service are then temporarily laid up because of tightening government restrictions due to spikes in COVID-19 cases. S&P expects these instances to further reduce profitability since presumably the crew for these ships would have already returned to work, and there would be incremental payroll costs at a time when the ship was not sailing and generating revenue. S&P's assumption is notwithstanding modest expected operating efficiencies from the disposal of older less efficient ships. -- S&P believes, however, Carnival might be able to limit margin compression as it ramps up its fleet. S&P believes the company could maintain reduced levels of marketing and selling expenses, particularly given there will be fewer ships to market, and the rating agency believes Carnival could manage certain ship level expenses like fuel, food, and crew payroll, to align with potential reduced ship occupancy. -- These assumptions would translate into EBITDA that is 85%-95% below 2019 levels. S&P said, "Our forecast for materially lower EBITDA in 2021, and the potential for further suspensions, heightens the risk that Carnival can significantly reduce adjusted leverage and improve cash flow generation in 2022. We believe substantial uncertainty remains as to Carnival's ultimate recovery path, given the potential for further suspensions in operations and uncertainty as to how consumers might respond to continued flare-ups or waves of the virus in the absence of an effective treatment or vaccine that is widely available. Therefore, risks remain as to Carnival's ability to ramp up its EBITDA generation through 2022 to a level that would support meaningful deleveraging and drive sufficient cash flow to help address large calls on cash in 2022, which include about $2.5 billion in debt maturities, maintenance capital spending across its fleet of ships, and a total of six ship deliveries- four large ships and two small ships. Carnival has committed financing for about 80% of the cost of the ship deliveries." "We believe, however, that in a scenario where demand begins to recover in 2022, supporting growth in net yields closer to 2019 levels, and net cruise costs per ALBD, excluding fuel, decrease closer to 2019 levels, EBITDA might be supportive of reducing adjusted leverage below 7x, which would provide some cushion relative to our 7.5x downgrade threshold. However, this would require EBITDA recovering to at least 70% of 2019 levels." Carnival is vulnerable to credit measure volatility given the industry's high capital intensity and the need to take delivery of ships regardless of the operating environment. The cruise industry is highly capital intensive and operators generally must commit to deliveries at least a few years in advance. While operators generally obtain financing commitments for ships before delivery, which provides liquidity support should cash flow decline, incremental debt to finance ship deliveries can result in significant deterioration of credit measures during periods of operating weakness because debt balances are increasing while EBITDA is declining. S&P said, "Before the pandemic, we believed that Carnival benefitted from its large scale in terms of cash flow generation because it could internally fund at least four to five large ships each year with its cash flow. Given very negative EBITDA this year and our expectation that it will likely take multiple years for Carnival's cash flow to recover to pre-pandemic levels, we believe Carnival's planned ship orders will materially slow the recovery in its credit measures because we believe capital expenditures (capex) for new ships will exceed EBITDA through 2022. That being said, ship deliveries across the industry are likely to be delayed by at least a few months, in part due to the temporary closure of shipyards to prevent the spread of the coronavirus. For fiscals 2020 through 2022, we now expect two fewer ship deliveries compared with our previous forecast." Further, in periods of steep declines in demand, incremental capacity from new ships often exacerbates pricing pressure as operators try to match supply and demand. In this current pandemic, it is possible that, despite new ship deliveries, ship disposals coupled with reduced capacity available for sale on ships due to health and safety limitations, could temporarily help to better align supply with demand, which could support pricing later on in 2021. Carnival has accelerated its ship disposal program to help manage its capacity and improve its cost structure since the company is disposing of older, less efficient ships. S&P said, "For fiscal 2020, we expect the company to dispose of 18 ships, compared with Carnival's historic trend of disposing of just a couple of ships each year. Operators can also take ships out of service to manage capacity, but those ships still incur expenses such as minimal levels of fuel expense and labor to keep them compliant with various safety and environmental regulations. Although these expenses are relatively small on a per-ship basis, for Carnival, which has a large fleet even adjusted for ship disposals, the expenses associated with keeping ships out of service weigh on profitability." "Since we believe the cruise industry might face an extended period of weak demand, we believe the efforts to manage supply and demand might translate into lower than historical EBITDA margin for a few years. We believe Carnival's EBITDA margin might remain under its historic level (mid- to high-20% area) for an extended period." Environmental, Social, and Governance (ESG) Credit Factors For This Credit Rating Change -- Health and safety factors The negative outlook reflects a high degree of uncertainty as to Carnival's recovery path given the potential for a slower restart of cruises in many markets, the potential for further suspensions even once operations resume, and the possibility the pandemic could alter consumers' demand for travel and cruising over the longer term because of concerns around contracting the coronavirus. S&P said, "We could lower our rating at any time if we believed the recovery would be more prolonged or weaker than we are expecting or if we anticipated any strain to Carnival's liquidity position. We could also lower ratings if we did not believe Carnival were on a path to improve adjusted leverage well below 7.5x or if we did not believe Carnival could generate positive free operating cash flow (net of committed ship financing) in 2022." "It is unlikely we will revise our outlook to stable or raise ratings over at least the next year given the high level of uncertainty around Carnival's recovery path, particularly in the absence of a widely available vaccine or effective treatment for COVID-19. Nevertheless, we could revise our outlook to stable once we are confident the company will be able to build capacity and occupancy closer to pre-pandemic levels (after adjusting for ship disposals), net revenue yields recover significantly, net cruise costs per ALBD excluding fuel improve closer to 2019 levels, and leverage declines well below 7.5x on a sustained basis. We could consider raising our ratings on Carnival once its operations recover if we expect adjusted leverage to be sustained under 6.5x." CAROL ROSE: Court Trims Weston's Attorney Fees ---------------------------------------------- The case captioned EQUIS EQUINE, LLC AND ELIZABETH WESTON, Plaintiffs, v. CAROL ALISON RAMSAY ROSE, CAROL ROSE, INC., LORI AARON, PHILLIP AARON, AARON RANCH, AND AARON'S RANCH, INC., Defendants, Adv. Proc. No. 17-4131 (Bankr. E.D. Tex.) was before the Court on the Post-Trial Application for Attorneys' Fees by Equis Equine, LLC and Elizabeth Weston. Carol Rose and Carol Rose, Inc. objected to the allowance of the amount requested in the application. In her original application, Weston sought an award of attorneys' fees and costs incurred by Davis & Santos, P.C and Baker Botts, LLP. In the original application, Weston sought an award for 3,690.6 hours billed by timekeepers at D&S from Oct. 7, 2014 through Jan. 31, 2019 for a total charge of $885,132.17; its blended rate was $240.6 Weston also seeks an award for 729.9 hours billed by timekeepers at BB for a total charge of $447,586.82; its blended rate was $613.7 Counsel stated in affidavits supporting the application that the legal serves rendered, and tasks performed, advanced all of Weston's claims, and segregation of their attorneys' fees between the Texas Theft Liability Act (TTLA) claim and her other claims is not practicable or required by Texas law. On May 13, 2019, Weston filed a supplemental brief and application for attorneys' fees. In the supplemental application, Weston sought an award for $71,945 billed by timekeepers at D&S from Feb. 1, 2019 through the date of the application as well as estimated fees in the amount of $20,985 through the conclusion of the hearing on the application. Weston also sought an award of $52,053 for hours billed by timekeepers at BB as well as estimated fees in the amount of $688 through the conclusion of the hearing on the application. Thus, as supplemented, Weston requests a total award of $1,537,143.44 in reasonable and necessary attorneys' fees and costs. Upon review of the records, Bankruptcy Judge Brenda T. Rhoades concluded that Weston is not entitled to her attorneys' fees relating to purely bankruptcy matters or for admitted billing errors. With respect to the balance of her requested attorneys' fees, the Court concluded that only 80% of those fees were reasonable and necessary and advanced her TTLA claim. Weston has established reasonable and necessary attorneys' fees in the amount of $1,074,305.19. In addition, Weston has established reasonable and necessary court costs in the total amount of $45,247.06. Weston is awarded reasonable and necessary attorneys' fees in the amount of $1,074,305.19 plus reasonable and necessary court costs in the total amount of $45,247.06. The underlying litigation began when the Rose Parties sued Lori Aaron, Phillip Aaron and Aaron Ranch in Texas state court on Oct. 3, 2013. In various iterations of their state court complaint, the Rose Parties sought between $2.6 million and $12.2 million in damages arising out of the Aarons' alleged breaches of contract as well as the Aarons' alleged (1) fraudulent inducement to enter into an agreement with respect to certain horses; (2) fraudulent inducement to enter into a lease her horse ranch in Gainesville, Texas (the "Gainesville Ranch"); (3) invasion of solitude; and (4) defamation. The Aarons filed counterclaims seeking between $5 million and $20 million in damages for (1) statutory fraud, common law fraud, and fraudulent misrepresentation; (2) breach of fiduciary duty; (3) invasion of privacy; (4) tortious interference with contracts and prospective business relations; (5) business disparagement; (6) specific performance and constructive trust; (7) trespass to real property; (8) breach of contract; (9) accounting; (10) declaratory judgment; (11) civil conspiracy; (12) violations of the TTLA; and (13) equitable subrogation and constructive trust. Two additional lawsuits were filed after the Aaron Ranch Lawsuit commenced. The first was a lawsuit filed in state court on July 16, 2014 by Rose against her ex-horse trainer, Jay McLaughlin, who was later employed by the Aarons. That action was consolidated with the Aaron Ranch Lawsuit in state court on Sept.25, 2015. The second lawsuit was filed in state court on August 7, 2015 by Weston against the Aarons, Rose, and others. Weston filed the lawsuit after unsuccessfully attempting to intervene in the Aaron Ranch Lawsuit. In the Weston Lawsuit, Weston asserted claims against the Rose Parties for (1) violations of Texas Business and Commerce Code section 2-328; (2) common law fraud, fraudulent inducement, and fraud by nondisclosure; (3) negligence and negligent misrepresentation; (4) violations of the TTLA, (5) violations of the Texas Deceptive Trade Practices Act ("TDTPA"); and (6) conspiracy, aiding, and abetting. These are the same claims Weston asserted in her attempted intervention in the Aaron Ranch Lawsuit. If Weston had succeeded on all her claims against the Rose Parties, her actual money damages would have been approximately $450,000 plus exemplary damages and attorneys' fees. Weston's claims against the Rose Parties centered around a "complete dispersal sale" conducted by Rose in August 2013. Weston contended that Rose had violated Texas law by using the Aarons as "puff" bidders during the auction of her horses. Weston also contended that the auction was tainted by Rose's secret use of reserves. Weston raised various fraud claims with respect to the dispersal sale catalogue, the misrepresentations of the auctioneers and announcers during the auction, and the false bidding by the Aarons during the auction. Finally, Weston contended that Rose violated the TTLA by inducing her to buy several horses and embryos at the auction through deception, material omissions, and false representations. (Weston withdrew her claim for violations of the TDPA prior to trial.) The discovery process was contentious and went on for years in state court. Although Weston agreed to be deposed several times, the other parties fought over depositions and the production of documents. The eventual document production was massive, and the documents produced to Weston required analysis by her attorneys. The litigation was novel inasmuch as Weston's claims relating to "puff" bidding and the dispersal sale are rarely litigated in Texas courts. Weston also had to defend herself against a claim by the Aarons for tortious interference with their relationship with Rose. Rose's decision to file for bankruptcy prior to trial added more complexity and necessitated Weston's retention of counsel with bankruptcy experience. Weston employed two law firms during the course of the Weston Lawsuit. D&S, a San Antonio-based law firm, represented Weston in connection with the state court litigation prior to bankruptcy. Weston retained BB after the Rose Parties filed for bankruptcy to represent her in bankruptcy matters and assist with the trial of her claims in bankruptcy court. D&S and BB jointly represented Weston during the Rose Parties' bankruptcies. The Rose Parties filed petitions for relief under chapter 11 of the Bankruptcy Code in September 2017. The Rose Parties removed all the pending litigation to bankruptcy court on Oct. 25, 2017, which commenced several adversary proceedings. The Aarons and McLaughlin moved to remand the Rose Parties' lawsuits against them back to state court. Rose and Weston objected, arguing that the parties' claims against the Rose Parties were "core" claims against the bankruptcy estate that this Court would necessarily decide as part of the claims allowance process. The Court denied the motions to abstain following a hearing on Feb. 13, 2018. Prior to the hearing on the motion to abstain, in January 2018, the Aarons, McLaughlin and Weston filed proof of their claims against the Rose Parties. They stated that the amounts of their claims were unknown and attached materials relating to the state court litigation to their proofs of claim. Weston's complaint did not seek damages in a specific amount but asserted ten claims against the Rose Parties, the Aarons, and certain other alleged co-conspirators for alleged fraud relating to a pre-petition auction and other violations of Texas law. Weston also sought a declaration that Carol Rose, individually, could not discharge her debt to Weston in bankruptcy. The Court administratively consolidated the claim objections with the adversary proceedings for purposes of trial. The parties agreed that this Court should try some, but not all, of the state law claims between the parties. Despite the (relatively) limited nature of the trial, the parties submitted a 92-page joint pre-trial order along with a 294-page exhibit list. The Rose Parties included 368 exhibits on their original exhibit list, the Aarons included 762 exhibits, and Weston included 592 exhibits. The Court tried the parties' claims and counterclaims over nine days in May and June 2018. Much of the trial was focused on the Aaron Ranch Lawsuit. At the conclusion of trial, the Court invited the parties to submit proposed findings and conclusions for the Court's consideration as well as written closing arguments. In addition, the Court scheduled a hearing on July 6, 2018, for oral closing arguments. The parties filed closing briefs and proposed findings on or before presenting their closing arguments on July 6, 2018. For the reasons explained in the Court's memorandum opinion entered on Jan. 23, 2019 (and amended on Sept. 27, 2019), the Court found in favor of Weston on the following claims: (i) violations of TEX. BUS. & COM. CODE section 2-328 (prohibiting "puff" bidding); (ii) violations of TEX. ADMIN. CODe section 67.70 (prohibiting false advertising of an auction); (iii) common law fraud; (iv) fraudulent inducement; (v) fraud by non-disclosure; (vi) negligence; (vii) negligent misrepresentation; (viii) violations of the TTLA; (ix) equitable subrogation; and (x) as to Rose, individually, a determination of non-dischargeability under 11 U.S.C. section 523(a)(2)(A).4 The Court awarded Weston actual damages in the amount of $437,918.12, plus pre-judgment interest in the amount of $68,807.13, as well as post-judgment interest and the remedy of rescission with respect to her purchase of SHINERS LENA DOC at the auction. The Court also awarded Weston her attorneys' fees for prevailing on the TTLA claim and ordered Weston to file an application for attorneys' fees and court costs within thirty days. In this case, both the fee documentation and the objections are voluminous. The records supporting the fee application include thousands of individual entries by timekeepers D&S and BB totaling more than 4,800 professional hours. The Rose Parties object to many of these entries on multiple grounds for a total of approximately 7,000 individual objections. The Court conducted its own review of the evidence presented at the May 16th fee application hearing, including the time records submitted by Weston. Reviewing the records, the Court held that Weston is not entitled to her attorneys' fees relating to purely bankruptcy matters or for admitted billing errors. With respect to the balance of her requested attorneys' fees, the Court concludes that only 80% of those fees were reasonable and necessary and advanced her TTLA claim. A copy of the Court's Memorandum Opinion and Order dated Sept. 30, 2020 is available at https://bit.ly/31pZF0f from Leagle.com. Carol Alison Ramsay Rose filed for chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case No. 17-42053) on Sept. 18, 2017, and is represented by Katherine T. Hopkins, Esq. of Kelly Hart Hallman. CBL PROPERTIES: Ch. 11 Filing Will Not Affect Green Tree Operations ------------------------------------------------------------------- Brooker McAfee of Mews and Tribune reports that a spokesperson for CBL properties, the company that manages the Green Tree Mall, says the Clarksville mall's operations will not be affected by CBL's recent bankruptcy filing. CBL Properties, a Chattanooga-based real estate investment trust that invests in shopping centers across the country, recently filed for Chapter 11 bankruptcy protection. A prearranged financial restructuring is expected to lower CBL's debts by $1.5 billion, according to a Nov. 2, 2020, news release. CBL owns two area malls, including Jefferson Mall on Outer Loop in Louisville and the Outlet Shoppes of the Bluegrass in Simpsonville, Kentucky, but it only manages the Green Tree Mall. A private group called GIV Green Tree Mall Investors LLC owns the mall. CBL spokesperson Stacey Keating declined an interview request from the News and Tribune but provided an emailed statement about the financial restructuring: "There will be no impact on operations at Green Tree Mall," Keating said. "All CBL's properties will continue to operate as normal and customers can expect business as usual throughout this process. We expect this process to facilitate our financial restructuring, allowing CBL to emerge in a stronger financial position to continue to serve our communities for years to come." Chris Cullen, general manager at Green Tree Mall, also said the mall will not see any changes in operations amid CBL’s restructuring. Despite challenges presented by COVID-19, she thinks the mall is doing well. Sears, a longtime anchor of the Green Tree Mall, closed in 2017, and the space remains vacant. Cullen said although there are a couple of vacancies, there are several businesses that have opened there or are planning to open amid the pandemic. A new hair salon also will be opening in the mall, she said. At Home, a home decor superstore, is preparing to open a Clarksville location on the Green Tree property between the mall and Bass Pro Shops in spring 2021. The store will be on Green Tree Boulevard in the space formerly home to Burlington Coat Factory and Shoe Carnival. Within the Green Tree Mall, new businesses that opened this year include CBD Botanica, Cozy Cloud and Grub Nation. A number of seasonal holiday shops and vendors will also be open soon in the mall. About 60 businesses are listed on the Green Tree Mall’s website, including current and upcoming businesses. Cullen said there has been one closure in the mall amid the COVID-19 pandemic — the clothing store Justice closed, but it was replaced by the retailer Cozy Cloud. "It's good to see things open," Cullen said. "I think it shows that people are optimistic about the future." Amid the pandemic, both the mall and its retailers have implemented a number of safety protocols for sanitation, mask-wearing and social distancing, as well as prohibiting gatherings of more than 10 people in the common area. Green Tree Mall will be working with retailers for a plan to maintain social distancing during the holiday shopping season, Cullen said. The mall will not be open on Thanksgiving this year, and extended holiday shopping hours probably will not be as late as they were in previous years. "Definitely, safety is our first concern, and we’re always trying to look at that,” Cullen said. "This year, we've all had to adapt." About CBL & Associates CBL & Associates Properties, Inc. -- http://www.cblproperties.com/ -- is a self-managed, self-administered, fully integrated real estate investment trust ("REIT") that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers, and office properties. CBL's portfolio is comprised of 107 properties totaling 66.7 million square feet across 26 states, including 65 high-quality enclosed, outlet and open-air retail centers and 8 properties managed for third parties. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. CBL & Associates Properties, Inc., CBL & Associates Limited Partnership, and certain other related entities filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Houston, TX, on Nov. 1, 2020 (Bankr. S.D. Tex. Lead Case No. 20-35226). Weil, Gotshal & Manges LLP is serving as legal counsel to the Company and Moelis & Company is serving as restructuring advisor. Berkeley Research Group, LLC, is the Debtors' financial advisor. Epiq Corporate Restructuring, LLC, is the claims agent. CENTURY ALUMINUM: Incurs $58.2 Million Net Loss in Third Quarter ---------------------------------------------------------------- Century Aluminum Company filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $58.2 million on $392.9 million of total net sales for the three months ended Sept. 30, 2020, compared to a net loss of $20.7 million on $438 million of total net sales for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $87.8 million on $1.22 billion of total net sales compared to a net loss of $76 million on $1.40 billion of total net sales for the same period in 2019. As of Sept. 30, 2020, the Company had $1.40 billion in total assets, $201.2 million in total current liabilities, $611.8 million in total noncurrent liabilities, and $592.4 million in total shareholders' equity. Century's cash position at quarter end was $81.4 million and revolver availability was $88.0 million. "Our operations have remained resilient in the face of the continuing challenging environment," commented Michael Bless, president and chief executive officer. "Safety performance has been good during the last several months; such a result is only achieved, especially during demanding times, through mutual commitment and vigilance. Given our success operating the plants sustainably through the health crisis, we have taken steps to return to a more typical operating profile. For example, we are now relining cells when required at all plants except Mt. Holly and have begun to implement projects with a longer-term view." "The industry, in the U.S. and Europe, has continued to recover," added Mr. Bless. "Order rates are improving, and our customers are showing increasing confidence regarding the balance of this year as well as 2021. Product premiums have generally returned to the levels of early 2020. The metal price has strengthened, though it has continued to be buffeted by the volatility impacting all risk assets." Mr. Bless concluded, "Financial performance for the quarter was consistent with the estimates we provided several months ago; of course, these results manifest the very low aluminum price levels which persisted from April through June. At current commodity prices, consolidated earnings and cash flow would be robust. We were surprised and disappointed to read the decision of the state court in South Carolina regarding Mt. Holly's right to receive electric power service from the newly formed Goose Creek municipal utility. This development puts the plant at genuine risk of full curtailment by the end of the year. We are in discussions with all relevant constituencies with the singular aim of preserving this excellent business, and most importantly the jobs and economic activity it supports." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/949157/000094915720000136/exhibit99120200930q3ea.htm About Century Aluminum Company Century Aluminum Company -- http://www.centuryaluminum.com-- is a global producer of primary aluminum and operates aluminum reduction facilities, or "smelters," in the United States and Iceland. The Company reported a net loss of $80.8 million for the year ended Dec. 31, 2019, compared to a net loss of $66.2 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $1.52 billion in total assets, $249.6 million in total current liabilities, $625.7 million in total noncurrent liabilities, and $648.7 million in total shareholders' equity. * * * As reported by the TCR on April 17, 2020, Moody's Investors Service downgraded the Corporate Family Rating of Century Aluminum Company to Caa1 from B3. "The ratings downgrade reflects Moody's expectations of further deterioration in Century's credit profile due to the impact of the coronavirus outbreak on the global aluminum demand, prices and regional premiums, which have declined materially since the beginning of 2020," said Botir Sharipov, vice president and lead analyst for Century Aluminum. CHARITY TOWING: Seeks Court Approval to Hire TL Reedy as Accountant ------------------------------------------------------------------- Charity Towing & Recovery, LLC seeks approval from the U.S. Bankruptcy Court for the District of Arizona to employ TL Reedy, PLLC as accountant. The Debtor desires to employ TL Reedy to provide assistance in the preparation of necessary tax returns, financial statements, monthly operating reports, and any other accounting matters that may require assistance during the Chapter 11 proceeding. TL Reedy's services are billed monthly at the rate of $450 per month. Tim Reedy, an authorized agent of TL Reedy, disclosed in court filings that neither him nor the firm have connection with the Debtor, any creditor in this case, any other party-of-interest, their respective attorneys or accountants, the U.S. Trustee or any person employed in the office of the U.S. Trustee. The firm can be reached through: Tim Reedy TL Reedy, PLLC 6909 West Ray Road Building 15, Suite 103 Chandler, AZ 85226 Telephone: (480) 526-7770 Email: tim@tlreedypllc.com About Charity Towing & Recovery Charity Towing & Recovery, LLC is a family-owned and operated business that provides the following services: 24/7 towing, local towing, motor home towing, flatbed towing, roadside assistance, winch-out service, lock out service, light & medium-duty towing, auto repair, and off-road recovery. Charity Towing & Recovery filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-11598) on October 20, 2020. The petition was signed by Kelly Guerra, member. At the time of the filing, the Debtor estimated total assets of $119,038 and total liabilities of $1,462,646. Judge Paul Sala oversees the case. The Debtor has tapped Allan D. NewDelman, Esq., at Allan D. NewDelman, P.C. as legal counsel and TL Reedy, PLLC as accountant. CHASE MERRITT: Hires Compass California as Real Estate Agent ------------------------------------------------------------ Chase Merritt Global Fund LLC, seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Compass California, Inc., as real estate agent. Chase Merritt requires Compass California to market and sell the Debtor's real properties located at 19362 Fisher Ln, Santa Ana, CA 92705 ("Fisher"), and 10332 Mira Vista Dr., Santa Ana, CA 92705 ("Mira Vista"). Compass California will be paid a commission of 4.5% of the sales price. Christopher Kwon, partner of Compass California, 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. Compass California can be reached at: Christopher Kwon COMPASS CALIFORNIA, INC. 9454 Wilshire Blvd Suite 100 Beverly, CA 90212 Tel: (949) 427-1101 About Chase Merritt Global Fund Chase Merritt Global Fund LLC is engaged in activities related to real estate. The Company is the owner of fee simple title to a single-famiy residence located at 19362 Fisher Ln Santa Ana, CA 92705, having a current value (lender appraisal) of $2.19 million. It also owns an improved vacant land in Santa Ana, California having a current value of $760,000. Chase Merritt Global Fund LLC, based in Santa Ana, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-12328) on Aug. 19, 2020. The petition was signed by Paul Nguyen, manager. In its petition, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Law Offices Of Thomas C Nguyen, APC, serves as bankruptcy counsel to the Debtor. CHESAPEAKE OPERATING: March Status Hearing in Bugg Desoto Suit -------------------------------------------------------------- About Chesapeake Energy Corp. Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as restructuring advisor, Rothschild & Co and Intrepid Financial Partners as financial advisors, and Reevemark as communications advisor. Epiq Global is the claims agent. Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel, RPA Advisors LLC as financial advisor, and Houlihan Lokey Capital Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc., has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel, FTI Consulting, Inc. as financial advisor, and Moelis & Company LLC as investment banker. On July 9, 2020, the Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The unsecured creditors' committee has tapped Brown Rudnick, LLP and Norton Rose Fulbright US, LLP as its legal counsel, and AlixPartners, LLP as its financial advisor. On July 24, 2020, the bankruptcy watchdog appointed a committee of royalty owners. The royalty owners' committee is represented by Forshey & Prostok, LLP. COMCAR INDUSTRIES: K&K Truck Buying Low Value Assets for $1.5K -------------------------------------------------------------- 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 K&K Truck Parts for $1,500, 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 $1,500, 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/y62p9ugg 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: KC Industries Buying Low Value Assets for $13.1K ------------------------------------------------------------------- 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 KC Industries for $13,085, 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 $13,085, 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/yy7tdjfk 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: Megamix/Kater Buying Low Value Assets for $2.5K ------------------------------------------------------------------ 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 Megamix/Kater Corp. for $2,500, 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 $2,500, 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/y3m3tby3 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. COMSTOCK RESOURCES: Posts $130.9 Million Net Loss in Third Quarter ------------------------------------------------------------------ Comstock Resources, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss available to common stockholders of $130.90 million on $178.01 million of total oil and gas sales for the three months ended Sept. 30, 2020, compared to a net loss available to common stockholders of $1.34 million on $224.44 million of total oil and gas sales for the three months ended Sept. 30, 2019. The loss was primarily related to a $155.6 million unrealized loss on the mark-to-market value of the Company's derivative financial instruments that are held to hedge oil and natural gas prices as future natural gas prices have improved substantially since the end of the second quarter of 2020. The adjusted net loss available to common stockholders excluding the unrealized loss on the hedge contracts and other non-recurring items for the third quarter of 2020 was $13.8 million or $0.06 per diluted share. For the nine months ended Sept. 30, 2020, the Company reported a net loss available to common stockholders of $160.94 million on $583.42 million of total oil and gas sales compared to net income available to common stockholders of $33.64 million on $479.44 million of total oil and gas sales for the same period during the prior year. As of Sept. 30, 2020, the Company had $4.50 billion in total assets, $3.14 billion in total liabilities, $175 million in Series B 10% convertible preferred stock, and $1.18 billion in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/23194/000002319420000006/crk-20200930.htm About Comstock Resources Comstock Resources, Inc. -- http://www.comstockresources.com/-- is an independent energy company based in Frisco, Texas engaged in oil and gas acquisitions, exploration and development, and its assets are primarily located in Texas, Louisiana and North Dakota. The Company's stock is traded on the New York Stock Exchange under the symbol CRK. As of June 30, 2020, the Company had $4.53 billion in total assets, $3.04 billion in total liabilities, $175 million in mezzanine equity, and $1.32 billion in total stockholders' equity. COSMOLEDO LLC: Ch.11 Filing of Maison Kayser Chain Stays Suit ------------------------------------------------------------- Magistrate Judge Robert W. Lehrburger stayed the case captioned S.D. RYAN LIEBLE, on behalf of himself and others similarly situated, Plaintiff, v. MAISON KAYSER, LLC, et al., Defendants, No. 18-CV-11150 (RWL) (S.D.N.Y.) due to the Defendants' chapter 11 bankruptcy filing. On Sept. 17, 2020, the Defendants filed a letter indicating they recently filed for Chapter 11 Bankruptcy and requested a stay of the case pursuant to the automatic stay imposed by the Bankruptcy Code. Based on the automatic stay imposed under the Bankruptcy Code, and no opposition having been filed within the time permitted by the Court's individual rules of practice, Judge Lehrburger stayed the case. Within 14 days of termination of the Defendants' bankruptcy proceedings or other event terminating the automatic stay, the Defendants must so notify the Court. Lieble, on behalf of himself and others similarly situated, sought to recover from Defendants unpaid overtime, compensation for retaliation, liquidated damages, statutory penalties and attorneys' fees and costs pursuant to the New York Labor Law and the Fair Labor Standards Act. A copy of the Court's Order is available at https://bit.ly/3dFJWPs from Leagle.com. About Cosmoledo LLC Cosmoledo, LLC and affiliates own and operate 16 fine casual bakery cafes in New York City under the trade name "Maison Kayser." Maison Kayser -- https://maison-kayser-usa.com/ -- a global brand, is an authentic artisanal French boulangerie that has been doing business in New York since 2012. Cosmoledo and its affiliates, including Breadroll, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y Lead Case No. 20-12117) on Sept. 10, 2020. In the petitions signed by CEO Jose Alcalay, Debtors were estimated to have assets in the range of $10 million to $50 million, and $50 million to $100 million in debt. The Debtors have tapped Mintz & Gold LLP as their bankruptcy counsel, and CBIZ Accounting, Tax and Advisory of New York LLC as their financial advisor, accountant and consultant. Donlin Recano & Co., Inc., is the claims agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Hahn & Hessen LLP. * * * Bloomberg Law reports Aurify Brands, a restaurant operator that's buying Maison Kayser's U.S. bakeries in a bankruptcy liquidation, won preliminary court approval of its $8.4 million acquisition and revealed plans to reopen some, if not all, of the 16 locations under another brand. A prior Bloomberg report says an Aurify affiliate bought the right to collect nearly $73 million owed by the bakery. That debt will be used as currency in a forthcoming bankruptcy auction, effectively canceling the obligation. Should no higher offer come in, Aurify would add Maison Kayser to its growing list of New York restaurants, the report said. CYTOSORBENTS CORP: Posts $840K Net Loss in Third Quarter -------------------------------------------------------- Cytosorbents Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to common shareholders of $839,729 on $10.55 million of total revenue for the three months ended Sept. 30, 2020, compared to a net loss attributable to common shareholders of $6.88 million on $6.09 million of total revenue 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 $7.16 million on $29.05 million of total revenue compared to a net loss attributable to common shareholders of $15.32 million on $17.52 million of total revenue for the same period during the prior year. As of Sept. 30, 2020, the Company had $104.28 million in total assets, $24.05 million in total liabilities, and $80.23 million in total stockholders' equity. Dr. Phillip Chan, MD, PhD, chief executive officer of CytoSorbents stated, "We believe we are in an excellent position for continued growth and success, with another outstanding quarter of record sales and cumulative treatments delivered. These results were driven by steady growth in our core markets of critical care and cardiac surgery, and robust global sales to help treat critically-ill patients stricken with COVID-19. Product gross margins also improved sequentially from Q2 2020 to 74%, reflecting our improved manufacturing efficiencies and a reduction in ramp-up costs related to COVID-19." "With our strong financial performance and solid cash position, coupled with strong current and anticipated demand for CytoSorb, we are aggressively executing upon our clinical trial and sales growth strategy to continue our momentum into 2021 and beyond." Dr. Chan concluded, "I am extremely proud of our CytoSorbents team, executing very well in a challenging healthcare environment dominated by COVID-19, and am grateful to the medical community for continuing to embrace CytoSorb for many different applications. We are very excited about the potential for continued growth in 2021." Liquidity and Capital Resources Since inception, the Company's operations have been primarily financed through the issuance of debt and equity securities. At Sept. 30, 2020, the Company had current assets of approximately $96,803,000 including cash on hand of approximately $87,978,000 and current liabilities of approximately $17,356,000. On July 24, 2020, the Company closed the sale of approximately 6,052,631 shares of its Common Stock and received gross proceeds of approximately $57.5 million and, after deducting the underwriting discounts and commissions and expenses related to the offering, received total net proceeds of approximately $53.8 million. In early July 2020, the Company received approximately $2,414,000 in proceeds related to the sale of shares pursuant to the Open Market Sale Agreement with Jefferies LLC and B. Riley FBR, Inc. On July 31, 2019, the Company executed an Amendment to its Loan Agreement with Bridge Bank and, simultaneous with this Amendment, received $5 million in proceeds from an additional term loan. In addition, the Amendment extended the interest-only period of the loan through October 2020. Monthly principal payments of approximately $833,000 commence in November 2020. The Company believes that it has sufficient cash to fund its operations well into the future. COVID-19 Impact on Financial Results The Company stated, "The COVID-19 pandemic has, on the whole, been a positive driver for the Company's financial performance during the past several quarters. Though difficult to quantitate, we estimate that approximately $2.7 million of our third quarter 2020 revenues and $6.9 million of our year-to-date revenues at September 30, 2020 were directly or indirectly related to COVID-19. Given the order patterns we are currently experiencing, we expect that the COVID-19 pandemic will continue to have a positive impact on product revenues in the fourth quarter of 2020 and potentially into the first quarter of 2021. These expectations may change depending on the severity of the illness associated with COVID-19, or containment of the pandemic." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1175151/000110465920121349/ctso-20200930x10q.htm About CytoSorbents Based in Monmouth Junction, New Jersey, CytoSorbents Corporation is engaged in critical care immunotherapy, specializing in blood purification. Its flagship product, CytoSorb is approved in the European Union with distribution in 66 countries around the world, as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause massive inflammation, organ failure and death in common critical illnesses. These are conditions where the risk of death is extremely high, yet no effective treatments exist. As of March 31, 2020, the Company had $44.23 million in total assets, $22.91 million in total liabilities, and $21.31 million in total stockholders' equity. WithumSmith+Brown, PC, in East Brunswick, New Jersey, the Company's auditor since 2004, issued a "going concern" qualification in its report dated March 5, 2020 citing that the Company sustained net losses for the years ended Dec. 31, 2019, 2018 and 2017 of approximately $19.3 million, $17.2 million and $8.5 million, respectively. Further, the Company believes it will have to raise additional capital to fund its planned operations for the 12 month period through March 2021. These matters raise substantial doubt regarding the Company's ability to continue as a going concern. DE'ANGELEO REVOCABLE: Seeks to Tap Albert Van Cleave III as Counsel ------------------------------------------------------------------- De'Angeleo Revocable Trust seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ the Law Office of Albert W. Van Cleave III, PLLC as its legal counsel. The firm will render these professional services to the Debtor: (a) give the Debtor legal advice with respect to its duties and powers in its Chapter 11 case; and (b) handle all matters which come before the court in this case. The customary hourly rates of the firm's attorneys and professionals are as follows: Gregory T. Van Cleave $300 Albert W. Van Cleave III $350 Office Staff $50 The firm has estimated that a retainer in the amount of $5,000 will be required in the case. The Law Office of Albert W. Van Cleave III neither holds nor represents an interest adverse to the estate and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Gregory T. Van Cleave, Esq. Albert W. Van Cleave III, Esq. The Law Office of Albert W. Van Cleave III, PLLC 1520 W. Hildebrand Ave. San Antonio, TX 78201 Telephone: (210) 341-6588 De'Angeleo Revocable Trust De'Angeleo Revocable Trust filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-51801) on October 26, 2020. At the time of the filing, the Debtor had estimated assets of between $1,000,001 and $10,000,000 and liabilities of between $500,001 and $1,000,000 million. The Law Office of Albert W. Van Cleave III, PLLC serves as the Debtor's counsel. DELTA AIR: New Circuit Judge Doubt Pilots' Pension Case ------------------------------------------------------- Law360 reports that the newly minted D.C. Circuit Judge Justin R. Walker on Sept. 16, 2020, challenged claims leveled by retired Delta Air Lines pilots at oral arguments that the Pension Benefit Guaranty Corp. shortchanged more than a thousand of them by misallocating assets from their insolvent retirement plan after the company's 2005 bankruptcy. Roughly 1,700 Delta pilots sued PBGC in 2014 over the way it allocated the Delta Pilots Retirement Plan's $3 billion in assets. They claimed that PBGC, which assumed responsibility for delegating the plan's assets after it officially folded following Delta's bankruptcy protection filing, robbed the retired pilots of $544 million over their lifetimes. About Delta Air Lines Atlanta, Georgia-based Delta Air Lines provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. Northwest and 12 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. On Dec. 31, 2009, Northwest Airlines, Inc., merged with and into Delta. DESERT LAKE: Court Confirms Ch. 11 Plan Under Subchapter V ---------------------------------------------------------- The Honorable Judge Kevin R. Anderson issued his findings and conclusions regarding the confirmation of Debtor Desert Lake Group, LLC's bankruptcy-exit plan under Subchapter V of Chapter 11 of the Bankruptcy Code. The Plan establishes five Classes of Claims and one Class of Interests. All impaired Classes of Claims and Interests have accepted the Plan. No Class of Claims or Interests has rejected the Plan. All other Classes of Claims or Interests in which ballots were returned -- Classes 2, 3 and 5 -- voted unanimously to accept the Plan. Classes 1, 4 and 6 neither returned any ballots nor objected to confirmation. As such, they are deemed to have accepted the Plan. In summary, all Classes of Claims and Interests either have accepted by affirmative vote, or are deemed to have accepted the Plan. According to Judge Anderson, the Debtor filed the Bankruptcy Case in good faith and for a valid bankruptcy purpose. Additionally, the Plan is proposed in good faith and not by any means forbidden by law, and therefore complies with the requirements of 11 U.S.C. section 1129(a)(3). The Plan was accepted by all Classes of Claims and Interests. Further and in any event, the Plan provides that each holder of a Claim will receive or retain under the Plan on account of its Claim property of a value, as of the Effective Date of the Plan, that is not less than the amount such holder would receive or retain if the Case were converted to chapter 7, and the Estate were liquidated by a chapter 7 trustee. Judge Anderson also held that the Confirmed Plan is feasible and complies with section 1129(a)(11). The Plan does not contemplate that the Debtor will continue in business. Rather, the Plan contemplates that the Debtor's assets will be liquidated, collected and distributed to the holders of Allowed Claims. In short, complete liquidation of the Debtor already is proposed in the Plan. Accordingly, confirmation is not likely to be followed by a liquidation or the need for further financial reorganization of the Debtor, except as expressly provided for in the Plan. To the extent section 1191(b) applies, the Plan is fair and equitable and does not discriminate unfairly as to any Class of Claims or Interests, except as otherwise stipulated or agreed upon by the particular holder, the Court said. A copy of the Court's Findings is available at https://bit.ly/2HmCMUz from Leagle.com. About Desert Lake Group Desert Lake Group, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No. 20-22496) on April 24, 2020, listing under $1 million in both assets and liabilities. Judge Kevin R. Anderson oversees the case. Matthew M. Boley, Esq., at Cohne Kinghorn, P.C., is the Debtor's legal counsel. EAGLE MANUFACTURING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Eagle Manufacturing, Inc. f/k/a Northwest Manufacturing, Inc. 600 Polk Ave SW Red Lake Falls, MN 56750 Case No.: 20-60555 Business Description: Eagle Manufacturing, Inc. manufactures outdoor furnaces offering a range of furnaces to heat homes, garages, pools and spas; radiant floor heating systems; and replacement parts for all outdoor furnaces brands. Chapter 11 Petition Date: November 6, 2020 Court: United States Bankruptcy Court District of Minnesota Debtor's Counsel: Kenneth C. Edstrom, Esq. SAPIENTIA LAW GROUP 120 S 6th Ste 100 Minneapolis, MN 55402 Tel: 612-756-7100 Fax: 612 756 7101 Email: kene@sapientialaw.com Total Assets: $5,496,035 Total Liabilities: $3,117,376 The petition was signed by Ronald Gagner, CFO. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IQ6QHLY/Eagle_Manufacturing_Inc__mnbke-20-60555__0001.0.pdf?mcid=tGE4TAMA EAGLE PRESSURE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Eagle PCO LLC 20-35474 5808 FM 3455 Navasota, TX 77868 Eagle Pressure Control LLC 20-35475 8795 Ralston Rd Ste 233 Arvada, CO 80002 Business Description: Eagle Pressure Control -- https://eaglepressurecontrol.com -- is a Houston-based provider of comprehensive pressure control support to the oil & gas field services industry. Chapter 11 Petition Date: November 6, 2020 Court: United States Bankruptcy Court Southern District of Texas Judge: Hon. David R. Jones Debtors' Counsel: Leonard Simon, Esq. PENDERGRAFT & SIMON LLP 2777 Allen Parkway Suite 800 Houston, TX 77019 Tel: 713-528-8555 Email: lsimon@pendergraftsimon.com Eagle PCO's Estimated Assets: $1 million to $10 million Eagle PCO's Estimated Liabilities: $1 million to $10 million Eagle Pressure's Estimated Assets: $0 to $50,000 Eagle Pressure's Estimated Liabilities: $1 million to $10 million The petitions were signed by Jennifer Black, chief financial officer. A copy of Eagle PCO's petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DLQ7INI/Eagle_PCO_LLC__txsbke-20-35474__0001.0.pdf?mcid=tGE4TAMA A copy of Eagle PCO's list of 20 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DW7QJQQ/Eagle_PCO_LLC__txsbke-20-35474__0001.1.pdf?mcid=tGE4TAMA A copy of Eagle Pressure's petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IFOC4RA/Eagle_Pressure_Control_LLC__txsbke-20-35475__0001.0.pdf?mcid=tGE4TAMA EMERALD GRANDE: Disallowance of $139,000 Bank Claim Upheld ---------------------------------------------------------- In the case captioned PREMIER BANK, LLC, Appellant, v. EMERALD GRANDE, LLC, Appellee, Civil Action No. 1:19CV143 (N.D.W.V.), Premier Bank took an appeal from a March 27, 2019 Memorandum Opinion and July 17, 2019 Order entered by the U.S. Bankruptcy Court for the Northern District of West Virginia, which sustained in part the objection of Emerald Grade LLC and disallowed $139,406.712 in attorney's fees and expenses in Premier's amended proof of claim. Premier alleged that, in making its decision, the Bankruptcy Court erroneously construed and narrowed the attorney's fee provisions of the governing loan documents. It further argued that the Bankruptcy Court erred when it determined that not all of Premier's actions were necessary to protect its interests in the enforcement and collection of the loans. Finally, it argued that the Bankruptcy Court erred in admitting into evidence Emerald's summary of Premier's attorney's fees by task. Upon review, District Judge Irene M. Keeley held that the Bankruptcy Court correctly disallowed fee reimbursement for activities unrelated to enforcement or collection. Judge Keeley affirmed. In 2009 and 2014, Premier made two loans to Emerald to fund the construction of two restaurants and a retail store in the Kanawha City area of Charleston, West Virginia. Premier issued two promissory notes in connection with the loan agreements, and its interest was secured by two first-lien credit line deeds of trust in Emerald's real property and improvements. On June 23, 2016, flood waters destroyed a culvert bridge that connected the Crossings Mall in Elkview, West Virginia, owned by Tara Retail Group, LLC and the La Quinta Inn hotel, owned by Emerald, to the public road. Between June 23, 2016, and Jan. 11, 2017, Emerald and Tara unsuccessfully attempted to arrange financing to rebuild the bridge and reestablish public access to the La Quinta Inn and the Crossings Mall. On Jan. 11, 2017, Emerald sought Chapter 11 protection under 11 U.S.C. Sec. 1101 et seq. in response to another creditor's notice of a foreclosure sale on two hotels owned by Emerald. Premier timely filed a proof of claim against Emerald, asserting a secured claim in the amount of $1,983,878.77, the principal amount outstanding under its two loans as of the date of the commencement of the Chapter 11 case. After seeking bankruptcy protection, Emerald discovered and reported to Premier that it had failed to collect real estate taxes, insurance, and common area maintenance funds from its tenants at the Kanawha City property. In order to remedy this oversight, Premier made a post-petition loan to Emerald and earmarked the funds to pay the real estate taxes. From January 2017 to December 2017, Emerald voluntarily agreed to and entered into eight stipulations and interim cash collateral orders with Premier governing Emerald's use of Premier's cash collateral. Tara also filed for bankruptcy protection on Jan. 24, 2017. During the pendency of its case, Tara obtained approval for post-petition financing to rebuild the culvert bridge to the Crossings Mall and Emerald's La Quinta Inn. Following this, on Oct. 30, 2017, Tara filed an administrative priority claim for $556,332.25 in Emerald's bankruptcy case. This claim was based on Tara's expenditure of $1,112,664.50 to engineer and construct a bridge and restore access to the Crossings Mall. Tara sought to collect half of that cost from Emerald. Premier objected, arguing that Tara's claim would deplete the assets available to it in Emerald's bankruptcy estate. Notably, however, the La Quinta Inn at the Crossings Mall was not Premier's collateral, but that of Carter Bank & Trust, which later joined in Premier's objection. On March 12, 2018, Premier amended its proof of claim to include attorney's fees and expenses in the amount of $154,961.21. Emerald objected, contending that Premier's claim included unnecessary attorney's fees not reimbursable under Premier's loan documents. Premier not only amended its claim to include its attorney's fees, it also moved to convert Emerald's bankruptcy case from Chapter 11 to Chapter 7. At the hearing on the motion to convert, counsel for Premier -- not Carter Bank's counsel -- took the lead, presenting evidence related to the collateral and claim belonging to Carter Bank. The Bankruptcy Court denied Premier's motion to convert on June 4, 2018, and later held an evidentiary hearing on Emerald's objection to Premier's amended fee claim on July 26, 2018. By that time, Premier's attorney's fees and expenses had ballooned to $296,920. During the evidentiary hearing, the Bankruptcy Court heard testimony from William Abruzzino, Emerald's CEO; Marvin Ralston, an appraiser; and Anthony Marks, Premier's executive vice president. In its March 27, 2019 Opinion, the Bankruptcy Court sustained in part Emerald's objection to Premier's proof of claim, and disallowed $111,467.11 of Premier's attorney's fees and expenses associated with its challenge to Tara's administrative expense claim and its own motion to convert Emerald's case to Chapter 7. In its Opinion, the Bankruptcy Court construed certain provisions within nine loan documents that entitled Premier to reimbursement of certain attorney's fees and expenses and concluded that, when taken as a whole, these provisions allowed Premier to recover attorney's fees and expenses incurred to enforce its agreements with Emerald or to collect on the Notes. On May 29, 2019, the Bankruptcy Court held a telephone hearing to complete the record regarding the specific amount of fees and expenses to be disallowed from Premier's proof of claim for monitoring the Tara bankruptcy case and performing certain clerical work. Finally, on July 17, 2019, the Bankruptcy Court entered an order disallowing $139,406.71 of the total fees and expenses sought by Premier. Premier contended that the Bankruptcy Court erred by narrowing its rights to reimbursement of fees and expenses to include only those related to the enforcement and collection of the loans. Premier also contended that the Bankruptcy Court substituted its own judgment as to what constitutes proper enforcement and collection of the loans by disallowing certain categories of fees and costs it concluded were unrelated to the enforcement and collection of the loans. Premier argued the Bankruptcy Court erred by failing to conclude that Premier was entitled to reimbursement of all fees which "in its opinion" were necessary to protect its interest. According to Judge Keeley, Premier's argument is a red herring. As the documents themselves make clear, all the relevant attorney's fee provisions tie Premier's right to reimbursement of its attorney's fees to actions taken "in connection with the enforcement [of its loan] agreements" or to "collect on [its] Note[s] if [Emerald] does not pay." Several provisions further require these fees to be "reasonable" and "subject to limitation under applicable law." Pursuant to this unambiguous limitation on Premier's right to reimbursement, the Bankruptcy Court correctly narrowed Premier's claim for attorney's fees and costs to those activities related to enforcement or collection of its loans. Premier also objected to the Bankruptcy Court's disallowance of attorney's fees related to: 1) monitoring Tara's bankruptcy case and to the actions taken on Tara's administrative expense claim, 2) Premier's motion to convert, and 3) for clerical work. Premier argues that, "[e]ven accepting the Bankruptcy Court's findings as correct, those facts do not defeat the Bank's right to monitor the Tara bankruptcy case or participate in litigation regarding Tara's administrative expense claim." Judge Keeley said it is undisputed the Bankruptcy Court carefully examined the substance of Premier's participation in Tara's bankruptcy case to determine whether to reimburse attorney's fees incurred to monitor that case and for associated clerical work. Ultimately, the Bankruptcy Court concluded that the fees were not reimbursable because the focus of such monitoring and clerical work did not center on enforcement of the loan documents or collection. According to Judge Keeley, Premier's argument appears to be that the Bankruptcy Court lacks discretion to question any claim for attorney's fees and expenses that Premier deemed necessary and reasonable. Such an argument, however, ignores the plain language of the attorney's fee provisions governing this issue, and appears to seek a ruling permitting essentially limitless fees. In the Bankruptcy Court's view, Premier's aggressive pursuit of conversion and its speculative opposition to an administrative claim were neither reasonably undertaken nor necessary to enforce or collect on its loans. This decision is not clearly erroneous and the Court declined to reverse the Bankruptcy Court's well-reasoned opinion, Judge Keeley said. A copy of the Court's Memorandum Opinion is available at https://bit.ly/3m1S5Aw from Leagle.com. About Emerald Grande Emerald Grande, LLC, owns and operates two hotel properties, the La Quinta Inn and Suites adjacent to the Elkview Crossings Shopping Mall, in Elkview, West Virginia; and the La Quinta Inn and Suites adjacent to the Merchants Walk Shopping Mall, in Summersville, West Virginia. It also owns a real estate development in Charleston (Kanawha City), West Virginia. Emerald Grande sought Chapter 11 protection (Bankr. N.D. W.Va. Case No. 17-00021) on Jan. 11, 2017. In the petition signed by William A. Abruzzino, managing member, the Debtor was estimated to have assets and liabilities at $10 million to $50 million at the time of the filing. The case is assigned to Judge Patrick M. Flatley. The Debtor engaged Steven L. Thomas, Esq., at Kay, Casto & Chaney PLLC as bankruptcy counsel. The Debtor also tapped Woomer, Nistendirk & Associates PLLC as accountant; and Realcorp, LLC as broker, with Jon Cavendish serving as the listing agent, to market and sell its property in Kanawha County, West Virginia. No official committee of unsecured creditors has been appointed in the case. ENRIQUE V. GREENBERG: Bid to Stay Case Dismissal Order Nixed ------------------------------------------------------------ In the case captioned ENRIQUE V. GREENBERG, Appellant, v. CHAMPION MORTGAGE COMPANY, Appellee, Case No. 20-cv-01532-GPC-MDD (S.D. Cal.), Greenberg took an appeal from an order of the U.S. Bankruptcy Court dismissing his Chapter 11 bankruptcy case. On August 11, 2020, the Appellant filed an Emergency Motion to Stay Dismissal of the Case, Reinstate the Case, and Reinstate the Automatic Stay Pending Appeal. Upon review, District Judge Gonzalo P. Curiel denied the Appellant's motion. The District Court cannot find that the bankruptcy court abused its discretion in denying Appellant's motion for an emergency stay of his bankruptcy dismissal. The District Court likewise found that, in view of the stay factors considered, a stay is not warranted. The bankruptcy appeal, in this case, arose out of proceedings in the Chapter 11 bankruptcy case filed on Feb. 20, 2020, the Appellant's fourth bankruptcy case in the Southern District of California. The Appellant listed Appellee as the only secured creditor in the case. The Appellee holds a claim fully secured by the Appellant's property located in Temecula, California, which is his principal residence. The Property formerly belonged to the Appellant's mother, Antonia Cortes, who was the borrower and sole signer of the adjustable rate note and deed of trust that granted the Appellee its security interest in the Property. The note provided a reverse mortgage to Cortes and provided that "[a]ll amounts advanced by Lender, plus interest, if not paid earlier, are due and payable on Jan. 17, 2087." The note alternatively required immediate payment in full upon the occurrence of a specified event, including if "A Borrower dies and the Property is not the principal residence of at least one surviving Borrower." On Dec. 29, 2010, Cortes passed away, leaving no other borrowers. The Appellee filed a proof of claim in the Appellant's bankruptcy case, to which Appellant objected. The bankruptcy court overruled that objection, and the Appellant appealed that decision to the Court. Proceedings continued in the bankruptcy court. On April 28, 2020, the Appellant filed his motion to approve the Fourth Amended Individual Chapter 11 Combined Plan of Reorganization and Disclosure Statement to which Appellee objected. The Plan did not provide for repayment of Appellee's loan on the effective date of the Plan, but rather repayment at a variable interest rate over the course of 30 years. On May 26, 2020, Appellee filed a motion to dismiss Appellant's bankruptcy case. On August 6, 2020, the bankruptcy court granted Appellee's motion to dismiss. On August 7, 2020, Appellant appealed to this Court. On August 7, 2020, the Appellant filed an emergency motion with the bankruptcy court to (1) stay the order of dismissal in the case, (2) reinstate the case, and (3) reinstate the automatic stay pending appeal. The bankruptcy court denied the Appellant's motion. On August 11, 2020, the Appellant filed the instant Motion, seeking to stay the dismissal order in his underlying bankruptcy case, reinstating the bankruptcy case, and reinstating the automatic stay pending appeal of his bankruptcy case, on the grounds that he has a substantial case for relief on the merits and that absent a stay he would have little or no time to protect his interest in the property by means of refinancing or selling to pay off the Appellee. In determining whether to grant a stay pending appeal, a court must consider (1) whether the movant has made a "strong showing that he is likely to succeed on the merits;" (2) whether the movant will suffer irreparable injury absent a stay; (3) whether a stay would result in substantial harm to non-moving parties; and (4) whether a stay is in the public interest. On the first factor, Judge Curiel stated that the bankruptcy court found cause to dismiss the Appellant's case on the grounds that there has been a "substantial or continuing loss to or diminution of the estate and [an] absence of a reasonable likelihood of rehabilitation." The bankruptcy court found the estate was suffering continuing losses because the Appellant has not been making payments to Appellee. The bankruptcy court further found that the Appellant had not formulated a confirmable plan, and had not shown a willingness to formulate a confirmable plan. These two findings show that the bankruptcy estate is experiencing losses and that the Appellant has "nothing to reorganize" as he has not expressed a willingness or ability to pay Appellee in full through his reorganization. The District Court thus found the Appellant has not put forth a substantial case for demonstrating that the bankruptcy court abused its discretion in finding this basis to dismiss. On the second factor, the District Court recognized that the prospect of losing one's home would be irreparable injury. But the Appellant has not demonstrated that he is at imminent risk of losing his home, given his ability to seek refinancing, and instead only raises concerns about a potential refinancing delay. The possibility of irreparable harm here thus does not outweigh the District Court's finding that the Appellant has presented little likelihood of success on the merits of his appeal. Regarding the third and fourth factor, the Appellant argued that the Appellee will not be harmed if the dismissal is stayed pending appeal because there is equity in the property and there are no missed monthly payments. The Appellee asserted it will be substantially harmed because the Appellant continues to engage in bad-faith litigation across multiple cases, running up costs and fees, and because the value and related equity of the property may decline. The Appellant further asserted that the public interest would be served by a stay because public policy favors homeownership and protecting homeowner equity. The Appellee argued that the public interest favors preventing the Appellant from continuing to use the bankruptcy courts for an improper purpose. The Appellant has the burden of showing that the balance of equities, considering both the interests of the opposing party and the public, tips in his favor. The District Court recognized that litigation related to the Property and loan has been ongoing for years, and that the bankruptcy court has found that the Appellant has no valid bankruptcy purpose. The borrower on the note, Cortes, passed away nearly ten years ago, and Appellee and its predecessors-in-interest have thus far been unable to collect the full amount due as a result of the ongoing bankruptcy cases. The Court, therefore, agreed with the bankruptcy court, which found that the equities weigh in favor of denying a stay. Thus, the Court found that a stay would both harm the Appellee and be contrary to the public interest. A copy of the Court's Order is available at https://bit.ly/37nMfFF from Leagle.com. Enrique Victor Greenberg filed for chapter 11 bankruptcy protection (Bankr. S.D. Cal. Case No. 19-00878) on Feb. 20, 2019, and is represented by the Law Office of David T. Egli. EP TECHNOLOGY: Sale of EP Tech Goods to ShenZhen Approved --------------------------------------------------------- Judge Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinois authorized EP Technology Corp. USA's sale of the equipment listed in Appendix B to Exhibit 1, which is comprised of surveillance systems with CCTV cameras, to ShenZhen DC Times Technology Co. Ltd. In exchange, ShenZhen agreed to produce new products as described in Appendix A to Exhibit 1 in exchange for the EP Tech Goods. ShenZhen is responsible for retrieving the EP Tech Goods from customs in China. It will produce the New Goods by the end of November 2020. Pursuant to 11 U.S.C. Sections 363(b) and (f), and upon completion of the exchange of the EP Tech Goods and the receipt by the Debtor of the New Goods, the transfer of the EP Tech Goods to ShenZhen free and clear of all interests and the transactions contemplated thereby are approved in all respects. For the avoidance of doubt, UPS Capital Corp. retains a security interest in the EP Tech Goods until completion of the exchange of the EP Tech Goods and Debtor’s receipt and acceptance of the New Goods, and UPS obtains a security interest in the New Goods upon delivery to the Debtor in the same validity, extent and priority as existed in the EP Tech Goods immediately prior to the sale and exchange. Further, any and all claims, liens, interests and encumbrances of UPS with respect to the New Goods will attach to the proceeds of any sale of the New Goods. Except as specifically provided in the Agreement, ShenZhen will not be liable for any claims against the Debtor or any of its predecessors or affiliates or any other third party whatsoever. The Order will be effective and enforceable immediately upon entry, and any stay of orders provided for in Bankruptcy Rules 6004(h) and any other provision of the Bankruptcy Code or Bankruptcy Rules will not apply. A copy of the Agreement and the Exhibit 1 is available at https://tinyurl.com/y6kxy5j5 from PacerMonitor.com free of charge. About EP Technology Corporation USA Founded in 1997, EP Technology Corporation U.S.A. is a developer and manufacturer of video surveillance products, digital video recorders, security cameras. EP Technology Corporation sought Chapter 11 protection (Bankr. C.D. Ill. Case No. 19-90927) on Sept. 23, 2019 in Urbana, Illinois. In the petition signed by Kevin Wan, president, the Debtor was estimated to have assets at $10 million to $50 million and liabilities within the same range. Judge Mary P. Gorman oversees the Debtor's case. FactorLaw is the Debtor's counsel. ESSEX CONSTRUCTION: Englander Wins Clawback Suit vs Blunt et al. ---------------------------------------------------------------- In a multiple-count complaint captioned Bradford F. Englander, Plaintiff. v. Roger Blunt, Sr., et al. Defendants, Adversary No. 18-00406 (Bankr. D. Md.), Englander as the Chapter 11 Trustee of the estate of Essex Construction, LLC, sued General Roger R. Blunt, Vivian W. Bowers, Victoria Westbury and Eric Westbury seeking avoidance of transfers to or for the benefit of the Defendants and recovery of the value of the transfers. He also sought to avoid transfers to General Blunt under the Maryland Uniform Fraudulent Conveyance Act. Finally, the Trustee brought claims for violation of the automatic stay, breach of fiduciary duty, common law claims of conversion, and civil conspiracy. Upon analysis, Bankruptcy Judge Thomas J. Catliota entered judgment in favor of the Trustee. Among other things, Judge Catliota held that transfers to General Blunt in the amount of $508,250 made in the three-year period prior to the petition date are avoidable and recoverable from him under 11 U.S.C. section 550, including the transfer in the amount of $125,000 that is also avoided. The Court also held that the Pre-Petition Transfers related to Jemal's Mellwood are avoidable preferences under section 547 as to General Bunt and recoverable from him pursuant to section 550(a)(1) in the amount of $51,060.71. General Blunt and Vivian Bowers violated the automatic stay by obtaining possession of and exercising control over the Talisman Transfers and punitive damages are awarded in favor of the Trustee in the amount of $25,000. The Debtor is a Maryland limited liability company that provided contractor and subcontractor services for construction projects. It filed a voluntary Chapter 11 petition on Nov. 4, 2016. General Blunt was the Chairman of the Debtor. He owned 51% of the Debtor from May 2013 until Oct. 30, 2016 and owned at least 80% of the Debtor from Oct. 31, 2016 forward. General Blunt signed the Corporate Resolution filed with the court authorizing the bankruptcy filing. Beginning in 2010, General Blunt's son, Jonathan Blunt, was made President of the Debtor. General Blunt continued to be the Chairman. Jonathan ceased serving as President and transferred his stock to General Blunt pursuant to a Separation Agreement dated October 30, 2016. During the time Jonathan was President, General Blunt continued to sign checks and "was retiring" according to the testimony he gave at a Rule 2004 Examination. Bowers, General Blunt's wife, acted as the treasurer/secretary of the Debtor. General Blunt and Bowers were two of the three signatories on the Debtor's accounts leading up to, and after, the Petition Date until the Trustee was appointed. Bowers owned and controlled the entity Vertical Placement Solutions, LLC, a business engaged in executive recruitment and placement. General Blunt was the Chairman of VPS beginning in October 2016. Westbury served as a consultant to General Blunt on matters concerning the Debtor and its business operations. He was ordered off the Debtor's premises by Court Order entered on March 10, 2017. The Debtor affirmatively stated in case filings that, post-petition, Westbury was General Blunt's personal assistant and did not work for the Debtor. After being ordered not to visit the Debtor's offices, Mr. Westbury continued to serve as a personal consultant to General Blunt. Mrs. Westbury is the spouse of Mr. Westbury. She did not work for the Debtor during the relevant period of this action. Prior to filing the petition, the Debtor maintained bank accounts at M&T Bank and Industrial Bank. At M&T Bank, the Debtor maintained an operating account and a payroll account. At Industrial Bank, the Debtor maintained an operating account. After filing, the Debtor opened and maintained two debtor-in-possession bank accounts at M&T Bank, an operating account and a payroll account. After the Petition Date, the Debtor filed an Emergency Motion for Interim and Final Use of Cash Collateral, Emergency Motion for Authority to Use Pre-Petition Bank Accounts, and an Emergency Motion to Pay Pre-Petition Wages. A series of Cash Collateral Orders followed, each allowing for payment of specific expenses identified in a budget. On Dec. 5, 2016, the United States Trustee filed a Motion to Appoint Chapter 11 Trustee or, in the alternative, to Convert Case to Chapter 7. The UST alleged the Debtor had transferred to General Blunt, then President of the Debtor, in excess of $300,000 in the 90 days before the petition. The UST argued a trustee was necessary to investigate and recover, if appropriate, the transfers because General Blunt had a conflict of interest and would not investigate himself. By March 2017 the parties were embroiled in litigation that involved, among other things, Rule 2004 examinations, motions for adequate protection and oppositions, objections to debtor's professional fees and a request by the Internal Revenue Service to suspend the interim cash collateral orders and to direct the debtor to segregate and/or turnover funds. Ultimately, however, the Debtor consented to the appointment of a Chapter 11 Trustee. Englander was appointed Trustee by order dated March 21, 2017 and brought the adversary proceeding on Oct. 27, 2018. During the period from Nov. 13, 2013 until the Petition Date, the Debtor transferred substantial amounts to General Blunt. The Trustee assessed the transfers and seeks to recover $456,22 from General Blunt for transfers made from the M&T PR Acct., including a $125,000 wire transfer on Oct. 20, 2016, only two weeks prior to the instant bankruptcy filing. The Trustee also sought to recover from General Blunt transfers from the M&T OP Acct., totaling $61,111.71, and from the Industrial OP Acct. totaling $22,600. Prior to filing the petition, on or about May 19, 2013, the Debtor entered into an Office Lease Agreement with Jemal's Ikon, LLC, as landlord, for premises located in Oxon Hill, Maryland. General Blunt guaranteed the Debtor's obligations under the Oxon Hill Lease. On or about January 22, 2014, the Debtor entered into an Office Lease Agreement with Jemal's Mellwood, LLC as landlord, for premises located in Upper Marlboro, Maryland. The Debtor breached the Oxon Hill Lease and the Mellwood Lease. As a result, on January 26, 2015, the Jemal Parties filed suits against the Debtor in Prince George's County Circuit Court for unpaid rent. In June 2016, to resolve the litigation, the Debtor and the Jemal Parties entered into a Settlement Agreement. The Jemal Settlement obligated the Debtor to pay $525,000 in 72 installments of $7,29167, commencing April 15, 2016. General Blunt, along with his son, Jonathan Blunt, personally guaranteed the Debtor's obligations under the Settlement Agreement. As additional consideration, the Debtor, General Blunt and Jonathan Blunt consented to judgment in favor of the Jemal Parties. As contemplated by the Jemal Settlement, on June 10, 2016, two consent judgments were entered in state court, one in the principal amount of $561,681.80 against the Debtor in favor of Jemal's Ikon, LLC, and the other in the principal amount of $99,204.20 against the Debtor in favor of Jemal's Mellwood, LLC. Under the Jemal Settlement, the Debtor paid $51,060.71 pre-petition -- Jemal's Pre-Petition Transfers -- and $29,796.68 post-petition. On Sept. 30, 2016, the Debtor submitted a Bid/Performance Bond Request to Talisman Casualty and/or Talisman SV, requesting immediate issuance of a payment and performance bond in the amount of $655,000. The Debtor requested the bonding program to support work orders under a Master Agreement for work to be performed for Corvias Prince George's County Stormwater Partners, LLC. The requested bond related to a statement of work under the Master Agreement for the Potomac Business Park Pond project. To obtain the bond, the Debtor paid $79,729 to Talisman on October 26, 2016 -- $19,729 as a premium and $60,000 as collateral. Following the Petition Date, Talisman learned of the Debtor's bankruptcy case and determined it would not issue the bond. In an email message to Mr. Westbury on Dec. 6, 2016, Talisman asked for the Debtor's "bank account and routing #, so we can start the process of returning monies." Mr. Westbury, acting as assistant to General Blunt and in conjunction with Ms. Bowers, sent an email to Talisman instructing that the funds should be wire-transferred to the bank account of Essex Holdings, Inc. Holdings had been recently formed, and Ms. Bowers and/or General Blunt were owners. The Holdings' bank account had been recently opened by Ms. Bowers, who was identified as "Key Executive with Control of the Entity." On Dec. 13, 2016, Talisman transferred $2,413 to the Holdings' account and on Dec. 14, 2016, transferred $74,816.00 to the Holdings' account, for a total of $77,229. The Talisman Transfers to Holdings were intended by Ms. Bowers and Mr. Westbury to divert the funds from the Debtor. On Oct. 1, 2016, the Debtor entered into a Recruiting and Management Consulting Agreement with VPS. The Recruiting Agreement was not disclosed in the Debtor's bankruptcy schedules nor did the Debtor seek or obtain court authority to assume the Recruiting Agreement or to use property of the estate to make payments under the Recruiting Agreement. The Debtor made five post-petition payments. The VPS Transfers were not authorized by the court or allowed by the cash collateral orders. Addressing the VPS Transfers claim, the Court said that the evidence established that some of the VPS Transfers made by Ms. Bowers from VPS to her personal checking accounts were used to make payments to Jemal's Ikon under the Jemal Settlement. General Blunt was the "entity for whose benefit such [transfers were] made" under section550(a)(1) because he was obligated to the Jemal Parties under the Jemal Settlement and the payments were applied toward that obligation. Here, the court concluded that Bowers is jointly liable with General Blunt for the "Jemal's Post-Petition Transfers." Regarding the Talisman Transfers, the Court held there is no doubt that these Transfers were avoidable transfers under the Bankruptcy Code. The funds being returned to the Debtor by Talisman were funds the Debtor paid to apply for the bond. Once Talisman denied the application, the Debtor, and only the Debtor, was entitled to receive the refund, which was property of the estate. Mr. Westbury, acting on behalf of General Blunt and at the instruction of Ms. Bowers, diverted the Talisman Transfers outside the reach of the Debtor. The Talisman Transfers were a post-petition transfer of estate property made without authority under the Bankruptcy Code or approval of the court. Indeed, the actions of Mr. Westbury and Ms. Bowers were intentionally designed to divert funds away from the Debtor. On the automatic stay violation, the Court awarded $25,000 punitive damages against Ms. Bowers and General Blunt for their willful violation of the stay. Their actions resulted in loss to the estate and caused the Trustee to expend considerable effort to recover the transfers. Further, the transfers were made for the express purpose of diverting funds from the estate. Punitive damages are appropriate. A copy of the Court's Memorandum of Decision is available at https://bit.ly/3jhuD0y from Leagle.com. About Essex Construction, LLC Essex Construction, LLC, filed a Chapter 11 petition (Bankr. D. Md. Case No. 16-24661) on Nov. 4, 2016. The petition was signed by Roger R. Blunt, president and chief executive officer. The case is assigned to Judge Thomas J. Catliota. At the time of filing, the Debtor estimated assets to be less than $50,000 and liabilities at $1 million to $10 million. The Debtor hired Kim Y. Johnson, Esq., at the Law Offices of Kim Y. Johnson, and N. William Jarvis, Esq., as legal counsel. The Office of the U.S. Trustee appointed Bradford F. Englander, Esq., as Chapter 11 trustee on March 17, 2017. The court confirmed the appointment on March 21, 2017. The Chapter 11 trustee was represented by Bradford F. Englander, Esq. at Whiteford, Taylor & Preston, LLP. The Trustee hired Protiviti Inc., as financial advisor. EXTRACTION OIL: Court OKs Agreement for $200M Backstop ------------------------------------------------------ Law360 reports that Colorado-based Extraction Oil & Gas got a half-nod in Delaware bankruptcy court Thursday, November 10, 2020, for a Chapter 11 agreement that would backstop a $200 million new equity offering, with final judgment awaiting a decision on the drilling company's disclosure statement and tentative plan confirmability. U.S. Bankruptcy Judge Christopher S. Sontchi ruled that the backstop terms, to be available under a deal reached with participating noteholders, are "approvable" despite objections from other creditors to proposed participation limits, a lack of a market check, and features that include a 10% commitment premium and equivalent termination fee. About Extraction Oil & Gas Inc. Denver-based Extraction Oil & Gas, Inc. -- http://www.extractionog.com/-- is an independent energy exploration and development company focused on exploring, developing, and producing crude oil, natural gas, and NGLs primarily in the Wattenberg Field in the Denver-Julesburg Basin of Colorado. Extraction Oil & Gas and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11548) on June 14, 2020. At the time of the filing, the Debtors disclosed $1 billion to $10 billion in both assets and liabilities. Judge Christopher S. Sontchi oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Whireford, Taylor & Preston, LLC as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; and Moelis & Company and Petrie Partners Securities, LLC as investment banker and financial advisor. Kurtzman Carson Consultants, LLC is the claims and balloting agent and administrative advisor and PricewaterhouseCoopers LLP (PwC) is the Debtors' independent audit services provider. EXTRACTION OIL: Plan to Raise $200M Could be Okayed by Court ------------------------------------------------------------ Extraction Oil & Gas Inc.'s plan to raise $200 million through an equity rights offering backstopped by its secured noteholders is "eminently reasonable" and could be approved at the company's next hearing, a bankruptcy judge said. Judge Christopher Sontchi overruled objections from creditors who opposed the fee arrangement and their exclusion from the deal, which would pay a 9.5% premium and other fees to investors supporting the capital raise, guarding against the potential of an undersubscribed offering. "This company has a lot of risk," the judge said during a telephonic hearing Thursday, November 5, 2020, in the U.S. Bankruptcy Court for the District. About Extraction Oil & Gas Denver-based Extraction Oil & Gas, Inc. -- http://www.extractionog.com/-- is an independent energy exploration and development company focused on exploring, developing, and producing crude oil, natural gas, and NGLs primarily in the Wattenberg Field in the Denver-Julesburg Basin of Colorado. Extraction Oil & Gas and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11548) on June 14, 2020. At the time of the filing, the Debtors disclosed $1 billion to $10 billion in both assets and liabilities. Judge Christopher S. Sontchi oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Whireford, Taylor & Preston, LLC as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; and Moelis & Company and Petrie Partners Securities, LLC as investment banker and financial advisor. Kurtzman Carson Consultants, LLC is the claims and balloting agent and administrative advisor and PricewaterhouseCoopers LLP (PwC) is the Debtors' independent audit services provider. FALCON V: Surety Bond Program Not Executory Contract, Court Says ---------------------------------------------------------------- Bankruptcy Judge Douglas D. Dodd denied Argonaut Insurance Company's motion for declaratory relief relating to Debtors Falcon V and affiliates' confirmed chapter 11 plan. Argonaut argued an agreement instituting the surety bond program was an executory contract deemed assumed through the confirmed plan. Judge Dodd disagreed and held that the surety bond program is not an executory contract; and even if it were executory, as a financial accommodation it cannot be assumed, whether or not Argonaut consented. Debtors Falcon V, L.L.C., and its affiliated debtors engage in oil and gas exploration and development and operate and provide services for oil and gas properties. They filed chapter 11 in May 2019. Argonaut Insurance Company provided performance bonds to fulfill the Debtors' obligations under numerous oil and gas leases, carrying premiums Debtors obtained expedited permission to pay early in the reorganization. The jointly administered Debtors promptly proposed a plan that was confirmed, after amendments, in October 2019. Argonaut filed proofs of claim but did not object to confirmation of the plan; indeed, it did not make an appearance in the case until more than six months after confirmation. Six months after confirmation, Argonaut demanded that reorganized Falcon V provide additional collateral to maintain the surety bonds Argonaut had posted prepetition. Falcon V refused, prompting Argonaut to move essentially for declaratory relief relating to the confirmed chapter 11 plan. Argonaut argued the agreement instituting the surety bond program was an executory contract deemed assumed through the confirmed plan. Falcon V responded that the surety bond program was not an executory contract; and that even if it were, it was not assumable. It also argued that Argonaut's claims were discharged on confirmation and that its request for additional collateral violates the discharge injunction. After an evidentiary hearing, the parties sought time to negotiate and later agreed to try to resolve their differences through mediation. When those efforts proved unsuccessful, they renewed their request for a ruling. Falcon V maintained that the bond program is not an executory contract because Argonaut already has posted the bonds and owes Debtors no further performance, though Argonaut remains liable to the third party obligees on the bonds. According to the Court, this dispute bears similarity to that in In re James River Coal Co. where the debtor had procured four bonds from XL Specialty Insurance Co. to secure its worker compensation obligations to the Commonwealth of Kentucky. The debtor filed chapter 11 and confirmed a plan assuming only specified executory contracts, not including the XL bonds or the accompanying indemnity agreement. The bankruptcy court denied XL's motion for payment of accrued bond premiums as an administrative expense. On appeal, the district court affirmed the lower court's ruling that the bond was not an executory contract and that XL was not entitled to an administrative expense claim. It applied the Countryman test, reasoning that XL had performed its only obligation to the debtor by posting the bonds prepetition and owed a continuing duty only to Kentucky. The Countryman test is named for the late Professor Vernon Countryman, author of Executory Contracts in Bankruptcy: Part I, 57 Minn. L. Rev. 439, 460 (1973). As in James River, Argonaut posted bonds prepetition and owes no further performance to Falcon V. Judge Dodd said Fifth Circuit jurisprudence applying the Countryman test supports the conclusion that because Argonaut owed no continuing performance to Falcon V, the surety bond program is not an executory contract. Because the surety bond program is not an executory contract, discussion of the Debtors' alternative arguments is unnecessary. However, even if the surety bond program were an executory contract, 11 U.S.C. section 365(c)(2) bars its assumption. The Debtors alternatively argued that the surety bond program is not capable of assumption because it is a financial accommodation within the meaning of section 365(c)(2). That Code provision bars assumption of an executory contract if "such contract is a contract to make a loan, or extend other debt financing or financial accommodations, to or for the benefit of the debtor, or to issue security of the debtor." The surety bond program is indeed a financial accommodation within the meaning of that section, as Argonaut's proofs of claim contend. According to the Court, although the Fifth Circuit has not yet addressed the application of section 365(c)(2) to surety contracts, the majority of courts considering the issue have held that surety contracts are financial accommodations. Argonaut has cited no authority supporting its contention that the surety bond program is not a financial accommodation. Thus, even if the surety bond program were an executory contract, it is a financial accommodation that cannot be assumed under section 362(c)(2). A copy of the Court's Memorandum Opinion is available at https://bit.ly/3kc812H from Leagle.com. About Falcon V Falcon V and ORX Resources are engaged in the oil and gas extraction business. Falcon V and ORX Resources filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. La. Case No. 19-10547 and 19-10548) on April 10, 2019. The petitions were signed by James E. Orth, president and chief executive officer. At the time of filing, Falcon V estimated $10 million to $50 million in assets and $50 million to $100 million in liabilities and ORX Resources estimated $100,000 to $500,000 in assets and $10 million to $50 million in liabilities. Louis M. Phillips, Esq., at Kelly Hart & Pitre, served as the Debtor's counsel. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on May 21, 2019. HELLER, DRAPER, PATRICK, HORN & MANTHEY, L.L.C., served as the Committee's counsel. The Court confirmed a Chapter 11 plan in October 2019. FIC RESTAURANTS: Seeks to Hire Carl Marks Advisory, Appoint CRO --------------------------------------------------------------- FIC Restaurants, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Carl Marks Advisory Group LLC and appoint Marc Pfefferle, a partner at the firm, as chief restructuring officer. Mr. Pfefferle and other Carl Marks personnel will render these professional services to the Debtors: (a) Assist with ongoing operations; (b) File, comply, and administer the Chapter 11 Cases; (c) Prepare for and consummate a sale transaction; (d) Confirm and consummate a chapter 11 plan; (e) Establish a claims deadline and claims reconciliation process; (f) Prepare and support actions associated with the filing of the Chapter 11 Cases; and (g) Assist with accomplishing the Debtors' overall goals in these Chapter 11 Cases. In addition to the roles and responsibilities noted above for the CRO, the firm will work with the Debtors and assist with the coordination and timeline of pre-filing and post-filing administrative tasks as directed by the Debtors and their counsel, at all times attempting to avoid duplication of efforts with counsel and other advisors to the Debtors. The firm's professionals will be billed at the following discounted rates: Partners $825 per person, per hour Managing Directors $675 per person, per hour Directors/Vice Presidents $550 per person, per hour Associates/Analysts $400 per person, per hour The firm will also seek reimbursement for actual and necessary expenses incurred in connection with this representation. During the one-year period prior to the commencement of the Debtors' Chapter 11 cases, the firm has received $435,582.50 from the Debtors for compensation for services performed and $96.26 for reimbursement of expenses incurred prior to the petition date. In addition, the firm received a retainer in the aggregate amount of $300,000 to be applied against unpaid fees and expenses, if any. Any unused portion of the retainer will be returned to the Debtors. Mr. Pfefferle disclosed in court filings that the firm and its professionals neither hold nor represent any interests adverse to the Debtors' estates. The firm can be reached through: Marc L. Pfefferle CARL MARKS ADVISORY GROUP LLC 900 Third Avenue New York, NY 10022 Telephone: (212) 909-8400 Email: mpfefferle@carlmarks.com About FIC Restaurants FIC Restaurants, Inc. and its debtor affiliates operate a casual dining restaurant chain in the United States known as Friendly's. The Debtors have approximately 60 corporate restaurants and serve as franchisor on another approximately 86 locations. Visit https://www.friendlysrestaurants.com for more information. FIC Restaurants and its four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12807) on November 1, 2020. The petitions were signed by T. Todd Schwendenmann, chief financial officer, treasurer, secretary. At the time of the filing, FIC Restaurants disclosed estimated assets of $10 million to $50 million and liabilities of $50 million to $100 million. Judge Christopher S. Sontchi oversees the cases. The Debtors have tapped Womble Bond Dickinson (US) LLP as counsel; Duff & Phelps Securities, LLC as mergers and acquisition advisor; Carl Marks Advisory Group LLC as financial consultant and advisor; and Donlin, Recano & Company, Inc. as claims, noticing, solicitation agent and administrative advisor. FIC RESTAURANTS: Seeks to Hire Womble Bond Dickinson as Counsel --------------------------------------------------------------- FIC Restaurants, Inc. and its affiliated debtors seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Womble Bond Dickinson (US) LLP as their legal counsel. The firm will render these professional services to the Debtors: (a) advise the Debtors with respect to their powers and duties in the continued management and operation of their businesses and properties; (b) attend meetings and negotiate with representatives of creditors, interest holders, and other parties-in-interest; (c) analyze proofs of claim filed against the Debtors and potential objections to such claims; (d) take necessary action on behalf of the Debtors to negotiate, obtain approval of and consummate the sale(s) of the Debtors' assets; (e) analyze executory contracts and unexpired leases and potential assumptions, assignments, or rejections of such contracts and leases; (f) take all necessary action to protect and preserve the Debtors' estates; (g) prepare motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estates; (h) take necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a plan of reorganization; (i) advise the Debtors in connection with any potential sale of assets or stock and take necessary action to guide the Debtors through such potential sale; (j) appear before this Court or any Appellate Courts and protect the interests of the Debtors' estates before those Courts and the United States Trustee for the District of Delaware; (k) advise on corporate, litigation, environmental, finance, tax, employee benefits, and other legal matters; and (l) perform all other necessary legal services for the Debtors in connection with the Chapter 11 Cases. The hourly rates of the firm's professionals are as follows: Partner $325 - $950 Of Counsel $330 - $925 Associate $280 - $685 Senior Counsel $125 - $650 Counsel $100 - $675 Paralegal $50 - $495 As of the petition date, the Debtors did not owe the firm any amounts for legal services rendered before the Petition Date. Matthew Ward, Esq., a partner at Womble Bond, disclosed in court filings that the firm and its professionals are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Matthew P. Ward, Esq. Ericka F. Johnson, Esq. Morgan L. Patterson, Esq. Nicholas T. Verna, Esq. 1313 North Market Street, Suite 1200 Wilmington, DE 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 Email: matthew.ward@wbd-us.com ericka.johnson@wbd-us.com morgan.patterson@wbd-us.com nick.verna@wbd-us.com About FIC Restaurants FIC Restaurants, Inc. and its debtor affiliates operate a casual dining restaurant chain in the United States known as Friendly's. The Debtors have approximately 60 corporate restaurants and serve as franchisor on another approximately 86 locations. Visit https://www.friendlysrestaurants.com for more information. FIC Restaurants and its four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12807) on November 1, 2020. The petitions were signed by T. Todd Schwendenmann, chief financial officer, treasurer, secretary. At the time of the filing, FIC Restaurants disclosed estimated assets of $10 million to $50 million and liabilities of $50 million to $100 million. Judge Christopher S. Sontchi oversees the cases. The Debtors have tapped Womble Bond Dickinson (US) LLP as counsel; Duff & Phelps Securities, LLC as mergers and acquisition advisor; Carl Marks Advisory Group LLC as financial consultant and advisor; and Donlin, Recano & Company, Inc. as claims, noticing, solicitation agent and administrative advisor. FIC RESTAURANTS: Taps Donlin Recano & Co. as Administrative Advisor ------------------------------------------------------------------- FIC Restaurants, Inc. and its affiliated debtors seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Donlin, Recano & Company, Inc. as administrative advisor. The firm will render these professional services to the Debtors: (a) Assist with, among other things, any required solicitation, balloting, and tabulation and calculation of votes, as well as prepare any appropriate reports, as required in furtherance of confirmation of a plan of reorganization; (b) Generate an official ballot certification and testify, if necessary, in support of the ballot tabulation results; (c) In connection with the Balloting Services, handle requests for documents from parties-in-interest; (d) Gather data in conjunction with the preparation, and assist with the preparation, of the Debtors' schedules of assets and liabilities and statements of financial affairs; (e) Provide a confidential data room, if requested; and (f) Manage and coordinate any distributions pursuant to a confirmed chapter 11 plan. The Debtors provided the firm a retainer in the amount of $50,000. In addition to the retainer and prior to the Petition Date, the firm received $4,451.50 in the aggregate for services performed for the Debtors. The hourly rates of the firm's professionals are as follows: Executive Management No charge Senior Bankruptcy Consultant $175 - $205 Case Manager $160 - $175 Consultant/Analyst $130 - $155 Technology/Programming Consultant $95 - $120 Clerical $35 - $45 Nellwyn Voorhies, the president of Donlin Recano, disclosed in court filings that the firm and its professionals are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Nellwyn Voorhies DONLIN, RECANO & COMPANY, INC. 6201 15th Avenue Brooklyn, NY 11219 Telephone: (212) 481-1411 About FIC Restaurants FIC Restaurants, Inc. and its debtor affiliates operate a casual dining restaurant chain in the United States known as Friendly's. The Debtors have approximately 60 corporate restaurants and serve as franchisor on another approximately 86 locations. Visit https://www.friendlysrestaurants.com for more information. FIC Restaurants and its four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12807) on November 1, 2020. The petitions were signed by T. Todd Schwendenmann, chief financial officer, treasurer and secretary. At the time of the filing, FIC Restaurants disclosed estimated assets of $10 million to $50 million and liabilities of $50 million to $100 million. Judge Christopher S. Sontchi oversees the cases. The Debtors have tapped Womble Bond Dickinson (US) LLP as counsel; Duff & Phelps Securities, LLC as mergers and acquisition advisor; Carl Marks Advisory Group LLC as financial consultant and advisor; and Donlin, Recano & Company, Inc. as claims, noticing, solicitation agent and administrative advisor. FINANCE OF AMERICA: Fitch Assigns B+ LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has assigned final long-term Issuer Default Ratings (IDRs) of 'B+' to Finance of America Companies Inc., Finance of America Equity Capital LLC, and Finance of America Funding LLC (together, FOA). The Rating Outlook is Stable. Concurrently, Fitch has assigned a final rating of 'B/RR5' to Finance of America Funding LLC's $350 million, 7.875% senior unsecured debt due November 2025. Proceeds will be used to fund a distribution to owners and for general corporate purposes. The assignment of the final ratings follows the receipt of documents conforming to information already received. 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 IDRs AND SENIOR DEBT The ratings reflect FOA's moderate franchise and historical track record as a U.S. nonbank mortgage originator and lender, experienced senior management team with extensive industry background, appropriate risk controls and underwriting standards, sufficient reserves to cover potential repurchase claims, modest valuation risk associated with mortgage servicing rights (MSRs), good historical asset quality performance in the servicing portfolio, increased funding flexibility following the inaugural senior unsecured bond issuance, and sufficient earnings coverage of interest expense. Rating constraints include the challenging economic backdrop, which Fitch believes may pressure asset quality over the medium term, particularly as COVID-related government benefits begin to expire, modestly higher leverage relative to peers, continued reliance on secured, short-term, wholesale funding facilities, elevated key person risk related to its founder and Chairman, Brian Libman, who exercises significant control over the company as a major shareholder, and private equity ownership through an affiliated investment vehicle of The Blackstone Group Inc. (Blackstone), which could impact the strategic and financial targets of the firm. Fitch believes the highly cyclical nature of the mortgage origination business and the capital intensity and valuation volatility of MSRs within the mortgage servicing business represent primary rating constraints for non-bank mortgage companies, including FOA. However, Fitch expects FOA will experience less MSR volatility compared to peers as the company has only recently begun to retain MSRs. Furthermore, the mortgage business is subject to intense legislative and regulatory scrutiny, which further increases business risk, and the imperfect nature of interest rate hedging can introduce liquidity risks related to margin calls and/or earnings volatility. These industry constraints typically limit ratings assigned to non-bank mortgage companies to below investment-grade levels. Fitch believes FOA's multi-product origination approach is well positioned relative to peers, as the scalability of the platform has allowed the company to take advantage of increased mortgage demand, which has resulted in improved earnings in 2020. The company emphasizes purchase origination volume over refinancing, the former of which can yield more consistent origination volume through different interest rate environments but is also sensitive to broader macroeconomic factors. FOA historically sold the majority of its MSR portfolio to manage its balance sheet and raise liquidity but began to retain MSRs more recently given reduced sale economics. While the sale of MSRs made FOA more reliant on gain on sale revenue, which can be volatile over time, the retention of MSRs will expose the firm to incremental valuation risks, which will also contribute to earnings volatility, albeit at a lower level than most peers. FOA is not subject to material asset quality risks because nearly all originated loans are sold to investors shortly after origination. However, FOA has exposure to potential losses due to repurchase or indemnification claims from investors under certain warranty provisions. Fitch expects FOA will continue to build reserves for loan production to account for this risk. FOA's historic repurchase claims have been minimal and the company has had sufficient reserves to cover these charges, which Fitch expects to continue. The asset quality performance of FOA's servicing portfolio is considered to be solid, as delinquencies have been low relative to peers and the overall market in recent years. Additionally, the amount of FOA's loans in COVID-19 related forbearance programs is below the broader market, which is attributed to the company's disciplined underwriting approach and focus on agency, regulatory and/or investor guidelines. Still, Fitch expects delinquencies to remain above historic averages for some time as forbearance programs cease and the macroeconomic effects of COVID-19 continue. The company's earnings have been strong in 2020, driven by growing origination volume and an increase in gain on sale margins. Annualized pre-tax return on average assets amounted to 5.5% during the first half of 2020 (1H20), which compared favorably to the historical average of 2.2% from 2016-2019. Low interest rates are expected to continue to drive higher origination volume, which should benefit FOA's earnings, but Fitch expects profitability metrics to moderate from current levels, with the normalization of gain on sale margins, incremental valuation hits on MSRs and higher interest expense on the contemplated senior unsecured note issuance. Fitch evaluates FOA's leverage metrics primarily on the basis of gross debt to tangible equity, excluding the liabilities associated with the firm's agency and private label reverse mortgage securitizations. On this basis, leverage amounted to 5.9x, as of June 30, 2020, down from 7.9x at Dec. 31, 2019 due to increased net income and growth in retained earnings. Pro forma for the contemplated senior unsecured debt issuance of $350 million, Fitch expects FOA's leverage will increase to 6.6x, which is within Fitch's 'bb' category capitalization and leverage benchmark range of 5.0x-7.5x for balance sheet heavy finance & leasing companies with an 'a' category operating environment score. Consistent with other mortgage companies, FOA is reliant on the wholesale debt markets to fund operations. Secured debt, which was 100% of total debt at June 30, 2020, comprises limited duration warehouse facilities, securities repurchase facilities, and lines of credit used to fund originations and operations. Although FOA's lenders are diverse, comprising 18 domestic and international banks and specialty finance companies, just 48.1% of FOA's facilities were committed at June 30, 2020, which is consistent with peers but below that of finance and leasing companies more broadly. FOA's funding tenor is short-duration and most of its facilities mature within one year, well-below that of other non-bank financial institutions, which exposes FOA to increased liquidity and refinancing risk. Fitch would view an extension of the firm's funding duration favorably. Based on FOA's execution of its inaugural unsecured issuance, Fitch estimates that the percentage of unsecured debt to total debt will increase to 12.8%, which is at the lower end of Fitch's 'bb' category funding, liquidity and coverage benchmark range of 10% to 40% for finance and leasing companies with an 'a' category operating environment score. Fitch would view a further increase in the unsecured funding component favorably as it would increase unencumbered assets and enhance the firm's funding flexibility, particularly in times of stress. On April 21, 2020, the Federal Housing Finance Agency (FHFA), which is the regulator of Fannie Mae and Freddie Mac (Fannie and Freddie, collectively the GSEs), announced that GSE mortgage servicers will not have to advance principal and interest (P&I) for more than four months of missed payments for borrowers in forbearance. This timeframe is consistent with the policy before COVID-19, when the GSEs generally purchased loans out of mortgage-backed security pools after being delinquent for four months. Fitch views this development positively as it limits the potential liquidity strain on FOA from the Fannie and Freddie portions of its MSR portfolio, which comprised approximately 84.4% of the MSR portfolio (by unpaid balance) at June 30, 2020. Fitch views FOA's liquidity profile as adequate for the ratings. As of June 30, 2020, FOA had approximately $130.9 million of unrestricted cash, which is expected to increase with the unsecured issuance. At June 30, 2020, FOA also had available borrowing capacity of $2.1 billion on its funding facilities, which Fitch believes is sufficient to fund originations and operations. Additionally, FOA has a $25 million sublimit under its $50 million committed MSR facility, which could be utilized to fund servicing advances on Fannie and Freddie MSRs, if necessary, which Fitch views favorably. FOA's management team has strong industry experience, but Fitch believes that a moderate degree of key person risk is present with founder and Chairman Brian Libman, who is actively involved in the day-to-day operations of the company. However, the executive management team at FOA has significant depth and experience in the mortgage and lending industry. Still, the absence of an independent board and the concentration of control with Brian Libman and Blackstone demonstrates a weaker-than-peer governance structure and represents a rating constraint. The Stable Rating Outlook reflects Fitch's expectations that FOA will maintain good asset quality and continued generation of strong earnings, while maintaining access to diversified funding and sufficient liquidity. Fitch also expects FOA's leverage will decline over time given management's strategy to increase retained earnings over the outlook horizon. The rating of the senior unsecured debt of 'B/RR5' is one notch below the Long-Term IDR, reflecting the subordination to secured debt in the capital structure and limited pool of unencumbered assets, which translates into weaker relative recovery prospects in a stressed scenario. RATING SENSITIVITIES IDRs AND SENIOR DEBT Factors that could, individually or collectively, lead to negative rating action/downgrade include a sustained increase in leverage above 7.5x over the next 12 to 18 months, an inability to refinance maturing funding facilities and maintain sufficient liquidity to effectively manage elevated servicer advances or to meet margin call requirements. Regulatory scrutiny resulting in FOA incurring substantial fines that negatively impact its franchise or operating performance, or the departure of Brian Libman, who has led the growth and direction of the company, could also drive negative rating actions. Fitch believes positive rating momentum is limited over the near term given the economic backdrop, but factors that could, individually or collectively, lead to positive rating action/upgrade include a clearer understanding of the uptake on forbearance programs, peak delinquency rates and liquidity requirements in light of a potential for a second wave of COVID-19, a sustained reduction in leverage at or below 5.0x over the outlook horizon, on a gross debt to tangible equity basis, an improvement in funding flexibility, including an extension of funding duration, an increase in the proportion of committed facilities, and/or an increase in unsecured debt and unencumbered assets, and an enhancement of the liquidity profile. Positive rating actions could also be driven by demonstrated effectiveness of corporate governance policies and the maintenance of consistent operating performance. The unsecured debt rating is primarily sensitive to any changes in the Long-Term IDR and would be expected to move in tandem. However, a material increases in unencumbered assets and/or an increase in the proportion of unsecured funding could result in a narrowing of the notching between FOA's Long-Term IDR and the unsecured debt. ESG CONSIDERATIONS FOA has an ESG Relevance Score of '4' for Governance Structure due to elevated key person risk related to its founder and Chairman, Brian Libman, who has led the growth and strategic direction of the company. An ESG Relevance Score of '4' means Governance Structure is relevant to FOA's rating but not a key rating driver. However, it does have an impact to the rating in combination with other factors. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entities, either due to their nature or to the way in which they are being managed by the entities. FIVE STAR: Swings to $3.7 Million Net Income in Third Quarter ------------------------------------------------------------- Five Star Senior Living Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $3.71 million on $295.32 million of total revenues for the three months ended Sept. 30, 2020, compared to a net loss of $7.07 million on $355.01 million of total revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $10.49 million on $877.85 million of total revenues compared to a net loss of $36.10 million on $1.07 billion of total revenues for the same period in 2019. As of Sept. 30, 2020, the Company had $444.31 million in total assets, $171.91 million in total current liabilities, $64.84 million in total long-term liabilities, and $207.65 million in total shareholders' equity. Katherine Potter, president and chief executive officer, made the following statement regarding the third quarter 2020 results: "Five Star's third quarter significant positive cash flow and year-over-year growth in Adjusted EBITDA and net income reflect the benefits of the restructuring of our business arrangements with Diversified Healthcare Trust, effective January 1, 2020, particularly in light of the ongoing adverse effects across the senior living industry from the COVID-19 pandemic. Additionally, our rehabilitation and wellness services division grew operating income over 170% as compared to the same period last year and continues to meaningfully contribute to our overall positive performance. Our balance sheet remains strong with $95.8 million of unrestricted cash and no amounts outstanding on our revolving credit facility. "Operationally, we continue to adapt to the evolving impact of the pandemic. I remain inspired by the dedication of our team members. As always, our priority continues to be the health and wellness of our residents, clients and team members." Overview and Results for the Quarter Ended Sept. 30, 2020: * During the third quarter of 2020, FVE continued with a phased re-opening plan for its senior living communities consistent with federal, state and local regulations and internal criteria. At Sept. 30, 2020, 96% of senior living communities were accepting new residents in at least one service line of business (independent living, assisted living, skilled nursing or memory care). Occupancy declines at the communities FVE owns, operates and manages have decelerated compared to the second quarter of 2020. Despite this deceleration, FVE continued to experience declines in average monthly senior living revenue per available unit (RevPAR) throughout the quarter due to occupancy challenges. In contrast, FVE's rehabilitation and wellness services segment grew by adding three net new outpatient rehabilitation clinics and experienced a 6.3% increase in average daily clinic visits in the quarter compared to the second quarter of 2020. Overall, FVE continues to experience increased costs associated with the impact of the COVID-19 pandemic that are expected to continue throughout the remainder of 2020. * Combined senior living revenues and management fees for communities FVE leased from Diversified Healthcare Trust, or DHC, prior to Jan. 1, 2020, and now manages on behalf of DHC, for the quarter ended September 30, 2020, decreased to $33.8 million from $261.7 million for the same period in 2019, primarily due to the conversion of the formerly leased senior living communities to managed communities as a result of the Restructuring Transactions, as described in the Selected Pro Forma Condensed Consolidated Financial Information and Other Data in the Supplemental Information of this press release. Additionally, the decline in revenues as compared to the same period of the prior year are impacted by the sale of 15 communities in the third quarter of 2019 that FVE previously leased from DHC. Senior living revenues at communities FVE leased or owned continuously since July 1, 2019 were $18.5 million, which represents a $2.0 million or 9.8% decrease from the same period in 2019, primarily due to a decline in occupancy as a result of the COVID-19 pandemic. * Rehabilitation and wellness services revenues for the third quarter of 2020 increased to $21.1 million from $12.4 million for the same period in 2019, primarily due to the impact of $5.8 million of inpatient rehabilitation clinic revenue at communities FVE previously leased from DHC during the third quarter of 2019, which was previously eliminated in consolidation accounting prior to the Restructuring Transactions, as well as the opening of 36 net new outpatient clinics since the third quarter of 2019. Revenues increased $2.9 million compared to the Sept. 30, 2019 pro forma results primarily attributable to opening 35 net new clinics since July 1, 2019. * Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the third quarter of 2020 was $7.1 million compared to $7.3 million for the Sept. 30, 2019 pro forma results. Adjusted EBITDA was $6.8 million for the third quarter of 2020 compared to $7.2 million for the Sept. 30, 2019 pro forma results. EBITDA and Adjusted EBITDA are non-GAAP financial measures. Reconciliations of net income determined in accordance with GAAP to EBITDA and Adjusted EBITDA, both actual and pro forma results, for the quarters ended Sept. 30, 2020 and 2019 are presented later in this press release. * As of Sept. 30, 2020, FVE had unrestricted cash and cash equivalents of $95.8 million, of which $12.9 million related to funds received from DHC to fund working capital obligations. In addition, FVE had no amounts outstanding on its revolving credit facility and $7.3 million outstanding on one mortgage note. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1159281/000115928120000056/a9302020-10qxdocument.htm About Five Star Senior Headquartered in Newton, Massachusetts, Five Star Senior Living Inc. -- http://www.fivestarseniorliving.com-- is a senior living and rehabilitation and wellness services company. As of Sept. 30, 2020, FVE operated 263 senior living communities (30,544 living units) located in 31 states, including 239 communities (28,232 living units) that it managed and 24 communities (2,312 living units) that it owned or leased. FVE operates communities that include independent living, assisted living, continuing care retirement and skilled nursing communities. Additionally, FVE's rehabilitation and wellness services segment includes Ageility Physical Therapy SolutionsTM, or Ageility, a division of FVE, which provides rehabilitation and wellness services within FVE communities as well as to external customers. As of Sept. 30, 2020, Ageility operated 209 outpatient rehabilitation clinics and 40 inpatient rehabilitation clinics. FVE is headquartered in Newton, Massachusetts. Five Star Senior reported a net loss of $19.99 million for the year ended Dec. 31, 2019, compared to a net loss of $74.08 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $345.8 million in total assets, $164.30 million in total current liabilities, $61.51 million in total long-term liabilities, and $119.98 million in total shareholders' equity. FOREVER 21: Reviving Chapter 11 Is Good for Creditors ----------------------------------------------------- Law360 reports that bankrupt retailer Forever 21 estimated Thursday that administrative claim creditors could see as much as a 90% higher recovery from a planned Chapter 11 wind-down than the Chapter 7 liquidation it avoided after a Delaware bankruptcy judge reconsidered conversion of the case. The difference appeared in amended Chapter 11 disclosure and plan documents filed with the court after U. S. Bankruptcy Judge Mary F. Walrath's order on Oct. 26, 2020, reversing her agreement with Chapter 7 conversion recommendations from the Office of the U.S. Trustee. About Forever 21 Inc. Founded in 1984 by South Korean husband and wife team Do Won Chang and Jin Sook Chang and headquartered in Los Angeles, Calif., Forever 21, Inc. -- http://www.forever21.com/-- is a fast fashion retailer of women's, men's and kids clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. Forever 21 delivers a curated assortment of new merchandise brought in daily. Forever 21, Inc. and seven of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12122) on Sept. 29, 2019. According to the petition, Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion against assets of the same range. As of the bankruptcy filing, the Debtors operated 534 stores under the Forever 21 brand in the U.S. and 15 stores under beauty and wellness brand, Riley Rose. The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez & Marsal as restructuring advisor; and Lazard as investment banker; and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. Prime Clerk is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Oct. 11, 2019. The committee is represented by Kramer Levin Naftalis & Frankel LLP and Saul Ewing Arnstein & Lehr LLP. Counsel to the administrative agent under the Debtors' prepetition revolving credit facility and the Debtors' DIP ABL financing facility are Morgan, Lewis & Bockius LLP and Richards, Layton & Finger, PA. Counsel to the administrative agent under the Debtors' DIP term loan facility is Schulte Roth & Zabel LLP. * * * In February 2020, the company was purchased by a consortium that includes Authentic Brands Group, Simon Property Group and Brookfield Property Partners for $81.1 million. As part of the deal, ABG and Simon will each own 37.5% of the fast-fashion retailer, while Brookfield controls the remaining 25% of Forever 21's operating and intellectual property businesses. FRANCESCA'S HOLDINGS: Seeks Rent Relief to Avoid Bankruptcy ----------------------------------------------------------- Boutique women's clothing chain, Francesca's, which previously warned of a possible Chapter 11 filing, said in a 10-Q filing it owes $14.6 million in deferred rent obligations as of Aug. 1, 2020 and it's asking landlords for more breaks. "[I]n connection with the COVID-19 pandemic, many federal, state and local governmental authorities or individual landlords have granted, or may potentially grant, rent relief or other relief or enact amnesty programs applicable to the leases for our boutiques, corporate headquarters and distribution facility. As a result of such relief, we stopped lease payments on all of our boutiques, corporate headquarters and distribution facility for the months of April, May, and June of fiscal year 2020 and, as of August 1, 2020, we substantially completed negotiations with our landlords to secure rent abatements and / or deferrals for such months. The terms of rent abatements and / or deferrals vary by landlord; however, most rent deferrals are payable in equal monthly installments over a twelve month period beginning on January 1, 2021. We resumed full lease payments for the month of July of fiscal year 2020, and we payed approximately 50% and 40% of our total lease obligations for the months of August and September of fiscal year 2020, respectively. We currently expect to make partial lease payments for substantially all of our boutique locations for the remainder of the fiscal year, subject to negotiations with landlords and cash flows. We are currently in negotiations with our landlords to secure additional lease abatements and / or deferrals for our partial lease payments for August and September of fiscal year 2020 and will continue to engage in such negotiations for any partial lease payments made for the remainder of the fiscal year," parent Francesca's Holdings Corp. said in a SEC filing. "Even if we are successful in obtaining further rent relief from our landlords, we have significant obligations to begin repaying deferred rent over the twelve months beginning on January 1, 2021. As of August 1, 2020, we have approximately $14.6 million in deferred rent obligations and related deferred real estate taxes and insurance that we are obligated to repay for deferred lease payments on all of our boutiques, corporate headquarters and distribution facility for the months of April, May, and June of fiscal year 2020, and these obligations will increase if we obtain further rent relief from our landlords. Additionally, as of August 1, 2020, we had $1.0 million of combined borrowing base availability under the Amended ABL Credit Agreement and the Term Loan Credit Agreement, subject to compliance with the covenants under the ABL Credit Agreement and First JPM Letter Agreement, including that no loans will be made under the ABL Credit Agreement unless our aggregate amount of cash and cash equivalents is less than $3.0 million. As a result, we currently expect to rely primarily on our cash on hand and operating income to make timely repayments of deferred rent." Francesca's Holdings Corporation (NASDAQ: FRAN) operates as a holding company. The Company, through its subsidiary, retails women's apparel products. Fracesca's offers dresses, tops, sweaters, vests, jeans, bottoms, jewelry, accessories, and gifts. Francesca's serves customers in the United States. FREDERICK D. FEIGL: Fairlane Loan Dischargeable, Court Says ----------------------------------------------------------- Fairlane Fixed Income Fund, LLC on Jan. 30, 2020, filed a complaint initiating the adversary proceeding captioned Fairlane Fixed Income Fund, LLC, Plaintiff, v. Frederick Douglas Feigl, Defendant, Adv. Proc. No. 20-3011 (Bankr. N.D. Tex.) against Feigl, a former 50% owner and CEO of SafeBuy, LLC, a used car dealership in Texas, who personally guaranteed a $1 million loan the Plaintiff made to SafeBuy. Through the Complaint, the Plaintiff sought a finding that the Defendant should be denied a bankruptcy discharge or, in the alternative, that certain debts owed to it by the Defendant are nondischargeable. Upon analysis, Bankruptcy Judge Harlin DeWayne Hale held that the Plaintiff has not satisfied its burden to except its debt from discharge under 11 U.S.C. sections 523(a)(2)(A) or 523(a)(6), nor has the Plaintiff shown the Defendant should be denied his discharge under sections 727(a)(5) or 727(a)(7). The Plaintiff was not able to show by a preponderance of the evidence that the Defendant made false representations with the intent to deceive. Jason Dodd is the founder and managing partner of Fairlane. Mr. Dodd is also the sole decision-maker for the Plaintiff and authorized the Fairlane Loan. SafeBuy was formed in April 2010 and operated on a "buy here, pay here" model. The Defendant originally formed SafeBuy with another partner, William Plaster, but Leeman Stiles later came to own the other 50% of SafeBuy. While Mr. Stiles managed the day to day operations of SafeBuy, the Defendant attended auctions to purchase inventory and worked behind the scenes with the accounting department. In early 2018, the Plaintiff began looking to grow its fund. Mr. Dodd approached the Defendant and offered to loan money to SafeBuy even though the Plaintiff had never loaned money to the Defendant or a used car business before. The Defendant told Mr. Dodd that SafeBuy would use the Fairlane Loan proceeds to purchase inventory for resale and that the inventory would be aimed at a "higher end" consumer. The Dodd Forecast showed projections based on a fleet of 280 vehicles being purchased using the Fairlane Loan proceeds (the "Fund II Automobiles"). At trial, Mr. Dodd testified that while SafeBuy's purchase of 280 Fund II Automobiles was possible, he did not think it was likely. Mr. Dodd testified that he understood Fund II Automobiles would be purchased with funds from the Fairlane Loan, and the notes from the Fund II Automobiles would also serve as collateral. The Defendant testified that the Dodd Forecast was only a high-level model, early on in his discussions with Mr. Dodd, of how a potential portfolio could operate. On June 1, 2018, the Plaintiff and SafeBuy entered into the Fairlane Loan Documents, which the Defendant executed on behalf of SafeBuy. The Defendant simultaneously executed the Guaranty in his personal capacity. It is undisputed the Plaintiff knew SafeBuy had other lenders at the time the Fairlane Loan Documents were executed. The Plaintiff loaned SafeBuy the full $1 million under the Loan Agreement in tranches of $250,000. The Plaintiff funded its first tranche on June 1, 2018, and the next on August 1, 2018. During this time, the Plaintiff appeared to have purchased some Fund II Automobiles, but very few. Instead, the Plaintiff took pre-existing automobile notes and placed them in a segregated safe to serve as Replacement Collateral for the Fairlane Loan. After the first two tranches of the Fairlane Loan were funded, the Plaintiff had its accountants perform an audit to verify compliance with the Fairlane Loan Documents. Pursuant to that audit, a memorandum was generated on Sept. 18, 2018 (the "Mosel Memo"). The Mosel Memo noted that SafeBuy was not in compliance with the Loan Agreement. The Mosel Memo ultimately recommended that the Plaintiff stop funding until SafeBuy made changes to comply with the Loan Agreement. Despite the information and recommendations contained in the Mosel Memo, the Plaintiff funded another tranche of $250,000 on Oct. 1, 2018. At trial, Mr. Dodd testified that the Plaintiff continued to fund because the Mosel Memo indicated SafeBuy had 89 car notes listed as Fund II Auto Paper. Mr. Dodd understood this to mean (i) SafeBuy must have already purchased and sold Fund II Automobiles with Fairlane Loan proceeds before the Mosel Memo was created and (ii) accordingly, the Plaintiff was collateralized with the Fund II Auto Paper. Sometime in mid-October, however, the Plaintiff received a collateral report from SafeBuy. The October Collateral Report showed that nearly all of the Plaintiff's collateral was purchased before SafeBuy received any funds from the Fairlane Loan. Mr. Dodd testified that he received the October Collateral Report but did not interpret it to mean that most of the Plaintiff's collateral was not purchased with Fairlane Loan proceeds. Mr. Dodd maintained the Fairlane Loan was only intended to be used to purchase Fund II Automobiles. At trial, the Defendant agreed the Fairlane Loan was intended to be used to purchase Fund II Automobiles. However, he also believed the funds could be used to pay for SafeBuy's general operating expenses, to the extent that Fairlane was adequately collateralized with Fund II Auto Paper or Replacement Collateral under the Loan Agreement. While the Mosel Memo showed SafeBuy was undercollateralized by $7,609 in September 2018, SafeBuy's collateral reports from October 2018 to February 2019 showed Fairlane was adequately collateralized pursuant to the Loan Agreement. On Nov. 30, 2018, the Plaintiff funded the remaining $250,000 of the Fairlane Loan to SafeBuy. The Plaintiff generally argued that the Defendant never intended to perform under the terms of the Loan Agreement and Guaranty and that SafeBuy failed to (i) use the Fairlane Loan proceeds solely to purchase automobiles and (ii) keep the proceeds in a segregated account, which it was contractually required to do. The Plaintiff also alleged the Defendant withheld material information as to the pre-existing debts and obligations of SafeBuy and the concerns of other lenders. The Plaintiff ultimately sought a determination that its claim against the Defendant is nondischargeable pursuant to Bankruptcy Code sections 523(a)(2)(A) and 523(a)(6). In addition, the Plaintiff sought a global denial of the Defendant's discharge pursuant to sections 727(a)(5) and 727(a)(7). The Plaintiff frames this case as one of fraud, false pretenses, and willful and malicious injury. The Defendant frames this case as a failure to perform -- not fraud. According to Judge Hale, there are a few problems with the Plaintiff's claims. The first is that the Plaintiff tends to conflate the Defendant and SafeBuy with regard to both representations that were made and with responsibility for business records. SafeBuy was not a small operation run by a single person. SafeBuy had dozens of employees, including several that were responsible for accounting and finance. And critically, the Defendant is no longer in control of SafeBuy or its business records. The second problem, Judge Hale says, is that the Fairlane Loan Documents were not well-designed for the used car business and did not lend themselves to literal compliance. The Defendant testified he understood that he was to construct a portfolio for the Plaintiff that could include Fund II Automobiles, Fund II Auto Paper, or Replacement Collateral, as long as the collateral was sufficient. While the Loan Agreement states that the Fairlane Loan was only to be used to purchase Fund II Automobiles, Mr. Dodd acknowledged that, at least initially, the collateral pool would have to include pre-existing notes for automobiles that were not purchased with the Fairlane Loan proceeds. This was how the portfolio had to begin, both because SafeBuy could not immediately purchase enough Fund II Automobiles with the proceeds of the Fairlane Loan, and because of the requirement in the Loan Agreement that the Plaintiff's collateral coverage needed to be 125% of the outstanding principal balance. Unfortunately, the portfolio never evolved into what Mr. Dodd envisioned, with new Fund II Automobiles being purchased and replaced by performing Fund II Auto Paper. This probably had to do with SafeBuy's declining sales volume and the Defendant's understanding that the collateral pool could be composed of Fund II Automobiles, Fund II Auto Paper, or Replacement Collateral, which it was. Nevertheless, the Defendant did not appear to have made any secret of SafeBuy's noncompliance under the Loan Documents. SafeBuy did not obstruct the Plaintiff's audits and continued to provide monthly collateral reports to the Plaintiff, and the Plaintiff did not seem to have a problem continuing to advance additional funds even after discovering the noncompliance. The Defendant appeared to have genuinely intended to continue to operate SafeBuy and perform all payment obligations under the Fairlane Loan. Ultimately, like many dischargeability trials, this case came down to the burden of proof, and the Plaintiff did not satisfy its burden on several elements of each of its causes of action. The Plaintiff was not able to show by a preponderance of the evidence that the Defendant made false representations with the intent to deceive or that the Plaintiff relied on the false representations. In addition, the Court believed the Defendant has satisfactorily explained the losses and deficiencies of both his and SafeBuy's assets under the standard in this Circuit. A copy of the Court's Findings is available at https://bit.ly/3kdUQyo from Leagle.com. Frederick Douglas Feigl sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 19-34156) on Dec. 18, 2019. The Debtor tapped Areya Holder, Esq., as counsel. FRONTIER COMMUNICATIONS: Court Tosses Hwa's Emergency Bid for Stay ------------------------------------------------------------------ In the case captioned TSUEI YIH HWA, Appellant, v. FRONTIER COMMUNICATIONS. CORPORATION, et al., Appellees, No. 20-CV-6268-CM (S.D.N.Y.), Hwa took an appeal from an order of the United States Bankruptcy Court of the Southern District of New York which denied a motion by Summer Ridge Group Ltd. to dismiss the Frontier Communications Corporations chapter 11 case, and denied Hwa's motions for the appointment of either a chapter 11 trustee or an examiner. Hwa then filed an emergency motion for a stay of the bankruptcy proceedings. Upon analysis, District Judge Colleen McMahon denied Hwa's emergency motion, saying Hwa has not demonstrated he will suffer irreparable injury if the court denied him a stay. Summer Ridge Group Ltd., a Taiwanese-based entity, filed several pro se motions asking the Bankruptcy Court to dismiss Frontier's chapter 11 case. Hwa, a resident of Singapore, filed a pro se motion asking the Bankruptcy Court to appoint a trustee or examiner "to investigate Frontier" pursuant to 11 U.S.C. section 1104. While Hwa relied on Summer Ridge's arguments in support of his application for appointment of a trustee or examiner, he did not join in Summer Ridge's motion or make his own motion to dismiss the chapter 11 proceeding. Frontier opposed the motions. On June 29, 2020, the Bankruptcy Court held a teleconference hearing on "all related pleadings and proceedings" of the motions brought by Summer Ridge and Hwa. The Bankruptcy Court denied Summer Ridge's motion to dismiss the chapter 11 case because "of the movant's failure to appeal through counsel." Summer Ridge did not take an appeal from this decision. Hwa did not appear at the Bankruptcy Court's teleconference hearing. Nonetheless, the Bankruptcy Court considered and denied Hwa's motion "for appointment of a chapter 11 trustee for the Debtors pursuant to 11 U.S.C. section 1104(a)(1) and (2)," on the ground that the movant [] failed to carry his burden of proof" and that it was not in the public interest or the interest of any party to appoint a trustee. The Bankruptcy Court denied Hwa's motion "for the appointment of an examiner pursuant to 11 U.S.C. section 1104(c)(1)" for the same reason. However, the Bankruptcy Court adjourned Hwa's motion for appointment of an examiner so that it could hold an additional hearing on the scope of the examiner request. The Bankruptcy Court did not set a specific hearing date but ordered Hwa to get his motion on the calendar on an omnibus hearing date by filing a notice with the court's Deputy Clerk, pursuant to the Case Management Order. On August 10, Hwa filed a notice of appeal with the Clerk of Court. The appeal purports to be from all of the rulings. On August 28, he filed a motion for a stay pending appeal. On Sept. 11, 2020, Frontier argued Hwa has not made the showing needed to obtain a stay pending appeal, for numerous reasons. It pointed out that Hwa lacks standing to take an appeal from the motion to dismiss, because he was not a party to that motion. Insofar as he is appealing from rulings on his motions, it argued that he is neither likely to succeed on the merits not did he suffer any irreparable injury. Frontier also advised the court that Hwa had filed an emergency motion for a stay in the Bankruptcy Court. Judge McMahon said Hwa's motion for a stay is denied for substantially the reasons set forth in Frontier's brief. In particular, Hwa has not demonstrated that he will suffer irreparable injury if the court denied him a stay. Hwa also lacks standing to appeal from the denial of another party's motion, so he has no likelihood of succeeding on the appeal from the motion to dismiss, which he did not make. Hwa still has a live motion for the appointment of an examiner pending in the Bankruptcy Court, so no appeal lies from that motion, and this court does not interfere with a Bankruptcy Court's decision on when to hear motions. Finally, Hwa is neither likely to succeed on the merits of his appeal from the denial of an order appointing a trustee, nor has he demonstrated irreparable injury, again for the reasons set forth in Frontier's brief And Hwa has most definitely not shown that a stay would be in the public interest. A copy of the Court's Order is available at https://bit.ly/354cwG8 from Leagle.com. About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as investment banker. FRONTLINE TECHNOLOGY: Seeks Approval to Hire Bush Ross as Counsel ----------------------------------------------------------------- Frontline Technology Solutions, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Bush Ross, P.A. as its legal counsel. Bush Ross will render these legal services to the Debtor: (a) render legal advice with respect to the Debtor's powers and duties as debtor-in-possession; (b) prepare on behalf of the Debtor necessary motions, applications, orders, reports, pleadings, and other legal papers; (c) appear before the Court and the United States Trustee to represent and protect the interests of the Debtor; (d) assist with and participate in negotiations with creditors and other parties-in-interest in formulating a chapter 11 plan, drafting such a plan, and taking necessary steps to confirm such a plan; (e) represent the Debtor in all adversary proceedings, contested matters, and matters involving the administration of this case; and (f) perform all other legal services that may be necessary for the proper preservation and administration of this chapter 11 case. Bush Ross requested a retainer for services rendered or to be rendered in connection with this case of $15,000.00, to be advanced by the Debtor from existing cash on hand. The hourly rates of the firm's professionals are as follows: Attorneys $225 - $500 Paralegals $125 - $145 Kathleen DiSanto, Esq., at Bush Ross, 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: Kathleen L. DiSanto, Esq. Bush Ross, P.A. Post Office Box 3913 Tampa, FL 33601-3913 Telephone: (813) 224-9255 Facsimile: (813) 223-9620 Email: kdisanto@bushross.com About Frontline Technology Solutions Founded in 2012, TraveTab (Frontline Technology Solutions) -- http://traveltab.com-- is a mobile technology-focused company providing robust products for the travel industry. Headquartered in Winter Park, FL, TravelTab has successfully partnered with world-renowned brands including Advantage, Avis/Budget, Dollar/Thrifty, Enterprise Holdings, Inc., Hertz, and others to offer products, technology and service solutions focused on making travel easier. Frontline Technology Solutions sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06077) on Oct. 30, 2020. The petition was signed by Al LaLonde, chief financial officer. At the time of filing, the Debtor estimated to have $1 million to $10 million in both assets and liabilities. Bush Ross, P.A. serves as the Debtor's legal counsel. FTS INTERNATIONAL: Court Confirms Debt-Equity Swap Plan ------------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that fracking services provider FTS International Inc. is poised to exit bankruptcy under new ownership after a court approved the company's Chapter 11 plan. The Plan would transfer 90.1% of equity in the new company to a group of secured creditors in exchange for debt forgiveness. Existing FTS equity owners will receive their pro rata share of 9.9% of the new company's equity. The Fort Worth, Texas-based company filed for bankruptcy in September with a pre-packaged plan to restructure and shed $437 million of debt. The company announced just ahead of its filing that it had reached a restructuring support agreement. 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. FTS INTERNATIONAL: Lenders to Get 90.1% of Company Under Plan ------------------------------------------------------------- FTS International, Inc., et al. submitted a refined version of their Joint Prepackaged Chapter 11 Plan of Reorganization on Oct. 28, 2020. Holders of Class 3 secured debt claims (term loan claims in an amount of $29.2 million and secured notes claims in an amount of $163.8 million) will receive 90.1% of the new stock of the reorganized FTS. Class 4 unsecured claims (includes $38.4 million term loan claims, and $215.3 million secured notes deficiency claims) are impaired under the Plan. Each Holder will receive, as applicable, its pro rata share of and interest in the Unencumbered Plan Recovery. "Unencumbered Plan Recovery" means a percentage of such New FTS Equity, subject to dilution on account of the Management Incentive Plan and the Warrants, that is distributed on account of Allowed Other Unsecured Claims equal to the value of any Unencumbered Asset Value minus Administrative Claims against the applicable Debtor,including, for the avoidance of doubt, any adequate protection claims. Unsecured claims classified as Ongoing Business Claims in Class 5 are unimpaired under the Plan. Existing Equity holders in Class 8 will receive 9.9 percent of the new FTS equity, subject to dilution. A full-text copy of the Joint Prepackaged Chapter 11 Plan Of Reorganization dated October 28, 2020, is available at https://tinyurl.com/y6frxhgn from PacerMonitor.com at no charge. Proposed Co-Counsel for the Debtors: Brian Schartz, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 609 Main Street Houston, Texas 77002 Telephone: (713) 836-3600 Facsimile: (713) 836-3601 E-mail: brian.schartz@kirkland.com - and - Joshua A. Sussberg, P.C. Emily E. Geier Alexander Nicas 601 Lexington Avenue) New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: jsussberg@kirkland.com emily.geier@kirkland.com alexander.nicas@kirkland.com Proposed Co-Counsel for the Debtors: Katherine A. Preston WINSTON & STRAWN LLP 800 Capitol Street, Suite 2400 Houston, Texas 77002 Telephone: (713) 651-2600 Facsimile: (713) 651-2700 Email: kpreston@winston.com - and - Daniel J. McGuire 35 W Wacker Drive Chicago, IL 60601 Telephone: (312) 558-5600 Facsimile: (312) 558-5700 Email: dmcguire@winston.com 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. FURIE OPERATING: Deutsche Oel Suit vs ECP Moved to Delaware Court ----------------------------------------------------------------- Deutsche Oel & Gas S.A. filed an action in the Supreme Court of New York, alleging that Energy Capital Partners Mezzanine Opportunities Fund A, LP; Energy Capital Partners Mezzanine Opportunities Fund, LP; Energy Capital Partners Mezzanine Opportunities Fund B, LP; Energy Capital Partners Mezzanine (Alaska Midstream Co-Invest), LP; and Energy Capital Partners Mezzanine (Alaska Midstream Co-Invest) II, LP ("ECP"), mismanaged an oil and gas company and drove it to file for Chapter 11 bankruptcy in the U.S Bankruptcy Court for the District of Delaware. ECP timely removed the action to federal court, asserting that the action falls within the Court's bankruptcy and simultaneously moved to transfer the action to the United States District Court for the District of Delaware for automatic referral to the Delaware Bankruptcy Court. Soon thereafter, DOGSA filed a motion to remand the action to the Supreme Court of New York for lack of bankruptcy jurisdiction. Upon deliberation, District Judge Ronnie Abrams denied the Plaintiff's motion to remand and granted Defendants' motion to transfer. The Court thus transfers the action to the U.S. District Court for the District of Delaware for automatic referral to the Delaware Bankruptcy Court. The Court found that judicial economy and the interest of justice are best served by transferring this action. Furie Operating Alaska, LLC, together with certain of its affiliates is a Delaware limited liability company that holds mineral rights to explore and produce crude oil and natural gas in a development region in Southcentral Alaska. Plaintiff invested hundreds of millions of dollars in equity capital in Furie in order to obtain mineral rights, drill exploration and production wells, as well as to build the infrastructure necessary to extract, process, and sell natural gas, for the purpose of creating a business selling natural gas to customers. DOGSA asserted four state law causes of action: (i) gross negligence, (ii) fraudulent inducement, (iii) civil conspiracy to commit fraud, and (iv) breach of the implied covenant of good faith and fair dealing. DOGSA alleged that ECP is liable for gross negligence because it failed to exercise a "reasonable level of care when making decisions," including by "insist[ing] on maintaining Ankura and Pinsonnault's retention to oversee Furie's operations even after they displayed a shocking degree of incompetence and mismanagement," which purportedly "led to Furie's bankruptcy." DOGSA further claimed that it was subject to fraudulent inducement when it reasonably relied on ECP's fraudulent misrepresentations and omissions of material information with respect to retaining Ankura, which it again alleges "drove Furie into bankruptcy." DOGSA next argued that ECP engaged in civil conspiracy to commit fraud by making false statements of material fact and failing to disclose material facts with respect to retaining Ankura, which "enable[d] ECP to exercise total control over Furie" and "driv[e] Furie to insolvency and bankruptcy." Finally, DOGSA maintained that ECP breached the implied covenant of good faith and fair dealing by "enter[ing] into the [Pledge Agreement] knowing they were going to destroy the value of [DOGSA's] pledge and equity in Furie." On Dec. 2, 2019, ECP filed a timely Notice of Removal, asserting federal bankruptcy jurisdiction under 28 U.S.C. sections 1334, 1446, 1452 and Fed. R. Bankr. P. 9027. On the same day, ECP filed a motion to transfer the action to the United States District Court for the District of Delaware, pursuant to 28 U.S.C. sections 1404(a) and 1412, for referral to the Delaware Bankruptcy Court. On Jan. 2, 2020, in addition to filing an opposition to the motion to transfer, DOGSA filed a motion to remand the case back to the New York Supreme Court. On Jan. 9, 2020, ECP filed its reply in support of the motion to transfer, and opposition to the motion to remand. On Jan. 16, 2020, DOGSA filed its reply in support of the motion to remand and a sur-reply on the motion to transfer. The parties periodically filed letters regarding developments in the Furie Bankruptcy. ECP argued that the Court has "arising in" jurisdiction over this case. While the meaning of "arising in" jurisdiction "is not entirely clear" from the statutory language, courts in this Circuit have found that "arising in" jurisdiction exists in a matter where the claims "are not based on any right expressly created by [T]itle 11, but nevertheless, would have no existence outside the bankruptcy." The Court agreed with ECP and held that it has "arising in" jurisdiction over the action because (1) DOGSA challenged ECP's actions during the bankruptcy proceeding -- specifically, its act of "encumbering Furie with debtor-in-possession financing" through the DIP Order, (2) at least one of DOGSA's claims is in fact a derivative claim that implicates the releases in the DIP Order and Plan, and (3) DOGSA's claims implicated an indemnity provision and thus the administration of the bankruptcy estate. ECP also argued that regardless of whether the Court has "arising in" jurisdiction over DOGSA's claims, it plainly has "related to" jurisdiction. The Court agreed. "Congress did not delineate the scope of `related to' jurisdiction, but its choice of words suggests a grant of some breadth." On DOGSA's remand bid, the Court held that DOGSA has failed to satisfy its burden to establish that either permissive abstention or an equitable remand is appropriate here. Principles of comity are not offended by declining to remand or abstain from this action. This action is closely related to the Furie Bankruptcy, and abstention may negatively impact the efficient administration of the estate. Remand would create judicial inefficiencies in light of the Delaware Bankruptcy Court's deep familiarity with the factual allegations and claims at the heart of this action. On ECP's bid to transfer, the Court considered the following factors: "(1) the plaintiff's choice of forum; (2) the locus of operative facts; (3) convenience factors, such as the location of parties, witnesses, and evidence; (4) familiarity of the court with the applicable law; and (5) interests of justice, including trial efficiency." According to the Court, the first factor -- DOGSA's choice of forum -- weighs against transfer. DOGSA argued that it filed the action in the New York Supreme Court pursuant to the forum selection clause in the Pledge Agreement. ECP, by contrast, argued that the forum selection clause should not dictate venue under these circumstances, as courts in this district have held that "when a proceeding is core, the public interest in centralizing bankruptcy proceedings always outweighs the public and private interests in enforcing a forum-selection clause." While the Court found that DOGSA's selection of the New York forum pursuant to the Pledge Agreement's forum selection clause weighs against transfer, it is not dispositive. The second and third factors -- the locus of operative facts and convenience factors, such as the location of parties, witnesses, and evidence -- neither favors nor disfavors transfer, as the operative facts are geographically dispersed and neither DOGSA nor ECP are located in New York or Delaware. The fourth factor -- the familiarity of the court with the applicable law -- does not weigh heavily on the Court's analysis. "[B]ecause the relevant law is not particularly complex, there is no reason to think that the Delaware court will be less capable of applying that law than the New York court." The fifth factor -- the interests of justice, including trial efficiency -- weighs heavily in favor of transfer, and is ultimately dispositive. The allegations and claims in DOGSA's Draft Complaint are remarkably similar to those in the Standing Motions filed by the Furie Creditors, which also alleged that ECP engaged in gross negligence. The Delaware Bankruptcy Court held evidentiary hearings and heard from eight witnesses regarding the Standing Motions, and also approved the settlement of those Motions. The Delaware Bankruptcy Court also gained familiarity with DOGSA's claims. Moreover, the Delaware Bankruptcy Court is best positioned to analyze its own DIP Order and the Plan it has approved, which, for the reasons described above, are implicated in both the substance of DOGSA's claims and ECP's potential defenses regarding the releases. Finally, transfer to the Delaware Bankruptcy Court will enable it to promptly resolve any of ECP's potential claims for indemnification that could impact the administration of the estate. On balance, the fifth factor weighs heavily in favor of transfer and predominates over the first. The case is In re: DEUTSCHE OEL & GAS S.A., Plaintiff, v. ENERGY CAPITAL PARTNERS MEZZANINE OPPORTUNITIES FUND A, LP; ENERGY CAPITAL PARTNERS MEZZANINE OPPORTUNITIES FUND, LP; ENERGY CAPITAL PARTNERS MEZZANINE OPPORTUNITIES FUND B, LP; ENERGY CAPITAL PARTNERS MEZZANINE (ALASKA MIDSTREM CO-INVEST), LP; and ENERGY CAPITAL PARTNERS MEZZANINE (ALASKA MIDSTREAM CO-INVEST) II, LP, Defendants, No. 19-CV-11058 (RA) (S.D.N.Y.). A copy of the Court's Opinion and Order is available at https://bit.ly/3jgDKia from Leagle.com. About Furie Operating Alaska Headquartered in Anchorage Alaska, Furie Operating Alaska LLC and its affiliates operate as independent energy companies primarily focused on the acquisition, exploration, production, and development of offshore oil and gas properties in the State of Alaska's Cook Inlet region. They hold a majority working nterest in 35 competitive oil and gas leases in the Cook Inlet. Additionally, they wholly own and operate an offshore production platform in the middle of the Cook Inlet to extract natural gas under the oil and gas leases. Furie Operating Alaska and its affiliates, Cornucopia Oil & Gas Company LLC, and Corsair Oil & Gas LLC, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 19-11781 to 19-11783) on Aug. 9, 2019. In the petitions signed by Scott M. Pinsonnault, interim COO, the Debtors were estimated to have $10 million to $50 million in assets and $100 million to $500 million in liabilities. The Debtors tapped Womble Bond Dickinson (US) LLP and McDermott Will & Emery LLP as legal counsel; Seaport Global Securities LLC as investment banker; and Ankura Consulting Group as financial advisor. Prime Clerk LLC is the claims and noticing agent, and administrative advisor. GATEWAY CASINOS: S&P Affirms 'CCC+' ICR After LEEFF Funding ----------------------------------------------------------- S&P Global Ratings affirmed its 'CCC+' long-term issuer credit rating on Gateway Casinos & Entertainment Ltd. and removed the company from CreditWatch, where it was placed with negative implications April 14. The outlook is negative. The rating affirmation comes after Gateway closed a C$200 million large employer emergency financing facility (LEEFF) loan, which should provide the company with sufficient liquidity to fund operations and capital expenditures (capex) for the next 12 months. S&P also revised its liquidity assessment on Gateway to adequate from less than adequate. Finally, S&P lowered its issue-level rating on the company's first-lien secured debt to 'B-' from 'B' and revised its recovery rating on the debt to '2' from '1', reflecting the potential additional secured debt associated with the LEEFF loan. The negative outlook reflects S&P's view that although the company will have sufficient liquidity for the next 12 months, it is unclear when normal operations will resume. Gateway's adequate liquidity reflects the C$200 million LEEFF loan the company received from the Government of Canada. S&P said, "We have revised the company's liquidity to adequate to reflect the recent funding Gateway received from the Canada Enterprise Emergency Funding Corp. Large Canadian employers are provided bridge financing from LEEFF to help preserve employment, operations, and investment activities until the companies can access the capital markets. We expect Gateway will use the proceeds to fund ongoing operating expenses as Ontario casinos ramp up operations, British Columbia (B.C.) casinos reopen, and fund capex for its properties in Ontario and B.C. The company has the ability to borrow against the facility through third-quarter 2021, and S&P Global Ratings forecasts that the company will draw down the full amount to fund operations. Since the LEEFF debt matures in 2025 and the majority of the interest will likely be treated as payment-in-kind (PIK) with no amortization requirements, we do not expect this loan to increase Gateway's cash financing expenses significantly in the near term." The reopening of Gateway properties should support EBITDA, albeit at a lower level than pre-pandemic operations. With the exception of Casino Rama, Gateway's gaming operations in Ontario reopened in early-October; select food and beverage operations had already resumed in the summer. However, the Ontario government has ruled a 50-patron cap for indoor venues, which is significantly lower than full capacity at these properties. In addition, it is unclear when the B.C. venues will reopen. Given the current capacity limits in Ontario and unpredictability as to when they will be lifted, uncertainty on the reopening of B.C. properties, and the potential for a second closure in Ontario, there is a risk that revenue generation could be weaker than S&P forecasts. S&P said, "Even though we expect that Gateway will benefit from various government programs that will subsidize costs and support EBITDA growth, we still don't expect revenues to recover enough to bring back EBITDA to pre-pandemic levels in 2021." Gateway will require significant financing in 2022. GTWY Holdings Ltd. (a holding company that owns a 100% equity interest in Gateway) has an US$150 million loan in place, due April 2022. The bridge loan is secured by GTWY Holdings' equity interest in Gateway. S&P said, "We include this debt in our leverage metric calculation because GTWY Holdings has no operating assets and fully depends on Gateway for servicing this debt obligation. Although debt will be amortized significantly through December 2021, the interest is PIK and, as a result, we forecast about US$130 million will need to be refinanced before April 2022. We expect the company to have a refinancing plan for its holdco debt at least six months before maturity. If delayed, the company could experience refinancing risks if it faces a higher interest rate or an uncertain credit market environment. The amortization of the holdco loan already limits Gateway's financial flexibility and, based on current operations, we do not believe Gateway would be able to repay the holdco loan through organic cash flow and existing liquidity." The negative outlook reflects S&P Global Ratings' view that although the LEEFF funding has provided the company with sufficient liquidity for the next 12 months, the operational risk remains. Given the currently high balance-sheet debt, and the company's lower projected revenues after the casinos reopen, S&P believes Gateway's highly leveraged capital structure could eventually prove unsustainable. At the same time, the company's holdco loan will mature in the next 18 months, which could also be a source of additional refinancing risk. S&P said, "We could lower the rating within the next 12 months if Gateway's liquidity diminishes, either due to lower-than-expected revenue generation or higher-than-expected costs. We would also consider a negative action if the company is unable to demonstrate a satisfactory refinancing plan for its holdco loan at least six months before its maturity. Our negative outlook also reflects the risk that if the pace of recovery is slower than expected, financial sponsor Catalyst Capital Group Inc. might pursue a debt restructuring in the next six-to-12 months that we might deem as a default." "It is unlikely that we would revise our outlook to stable or raise our ratings on Gateway until the B.C. properties reopen and we can assess the recovery paths in Ontario and B.C. It is also unlikely that we would consider raising our ratings until the company has a credible plan to refinance the 2022 holdco loan maturity. If Gateway addresses the 2022 debt maturity and properties recover such that the company can begin to build liquidity organically and reduce its debt, and we conclude that its capital structure shows sustainable improvement, we could consider revising our outlook to stable or raising our ratings." GATEWAY FOUR: Trustee Hires Levene Neale as Counsel --------------------------------------------------- David K. Gottlieb, the Chapter 11 Trustee of Gateway Four, LP, and its debtor-affiliates, seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Levene Neale Bender Yoo & Brill L.L.P., as counsel to the Trustee. The Trustee requires Levene Neale to: a. advise the Trustee with regard to the requirements of the Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules and the OUST as they pertain to the Debtors' bankruptcy estates; b. advise the Trustee with regard to certain rights and remedies of the Debtors' bankruptcy estates and the rights, claims and interests of creditors; c. represent the Trustee in any proceeding or hearing in the Bankruptcy Court involving the Debtors' bankruptcy estates unless the Trustee is represented in such proceeding or hearing by other special counsel; d. conduct examinations of witnesses, claimants or adverse parties and represent the Trustee in any adversary proceeding except to the extent that any such adversary proceeding is in an area outside of Levene Neale's expertise or which is beyond Levene Neale's staffing capabilities; e. prepare and assist the Trustee in the preparation of reports, applications, pleadings and orders including, but not limited to, applications to employ professionals, pleadings with respect to the use, sale or lease of property outside the ordinary course of business, objections to claims, settlements and other matters relating to the Debtors' bankruptcy cases; f. represent the Trustee with regard to negotiating, documenting, seeking Bankruptcy Court approval of, implementing and enforcing any transactions outside the ordinary course of business; g. assist the Trustee in any asset recovery, sale or liquidation process; h. assist the Trustee in the negotiation, formulation, preparation and confirmation of a plan of reorganization or liquidation and the preparation and approval of a disclosure statement in respect of the plan; i. investigate, evaluate, and prosecute objections to claims as may be appropriate; and j. perform any other services that may be appropriate in Levene Neale's representation of the Trustee during the Debtors' bankruptcy cases. Levene Neale will be paid at these hourly rates: Attorneys $495 to $635 Paraprofessionals $250 Levene Neale will also be reimbursed for reasonable out-of-pocket expenses incurred. Ron Bender, partner of Levene Neale Bender Yoo & Brill L.L.P., 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. Levene Neale can be reached at: Ron Bender, Esq. Krikor J. Meshefejian, Esq. LEVENE NEALE BENDER YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: rb@lnbyb.com kjm@lnbyb.com About Gateway Four Gateway Four LP and its affiliates Gateway Two LP and Gateway Five LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 20-11581) on August 31, 2020. In the petition signed by its president, James Acevedo, Gateway Four disclosed assets ranging between $50 million to $100 million and liabilities ranging between $10 million to $50 million. Judge Martin R. Barash oversees the case. Daniel M. Shapiro, Attorney at Law serves as the Debtors' counsel, and the Law Office of Sevan Gorginian as co-counsel. GATEWAY FOUR: Trustee Taps Sherwood Partners as Financial Advisor ----------------------------------------------------------------- David K. Gottlieb, the Chapter 11 Trustee of Gateway Four, LP, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the Central District of California to employ Sherwood Partners, Inc., as financial advisor to the Trustee. The Trustee requires Sherwood Partners to: a. assist the Trustee to evaluate the Debtors' and the Debtors' bankruptcy estates' assets and debts, including, without limitation, assisting the Trustee in connection with analyzing the Debtors' financial affairs, business operations, and financial performance, tracing the Debtors' assets, providing forensic accounting and related services to the Trustee, and providing forensic and financial analysis support to the Trustee in these cases, including with respect to any adversary proceedings or contested matters pending now or in the future; b. assist the Trustee to review and to prepare operating and dip financing budgets for the Debtors' properties; c. work with the Trustee's bankruptcy counsel and the Trustee to insure compliance with the requirements of the Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules and the OUST as they pertain to the Debtors' bankruptcy estate; d. represent the Trustee as his financial advisor, as appropriate, in any proceeding or hearing before the Bankruptcy Court or the OUST or otherwise in these cases; e. work with the Trustee's bankruptcy counsel and the Trustee to prepare and assist the Trustee in the preparation of reports, applications, pleadings and orders including, but not limited to, case status reports and Monthly Operating Reports; f. work with the Trustee's bankruptcy counsel and the Trustee in connection with any transactions outside of the ordinary course of business, including but not limited to any efforts to sell or liquidate some or all of the Debtors' assets, evaluating the prospects of confirming a plan in these cases, and negotiating, formulating, and preparing, to the extent appropriate, a plan of reorganization or liquidation and corresponding disclosure statement and seeking to confirm the plan; g. provide expert testimony and related analysis in connection with any contested matter or adversary proceeding in these cases; and h. perform any other services that may be appropriate in connection with its role as financial advisor for the Trustee. Sherwood Partners will be paid at these hourly rates: Andrew De Camara $540 Jarod Wada $475 Sherwood Partners will also be reimbursed for reasonable out-of-pocket expenses incurred. Andrew De Camara, partner of Sherwood Partners, 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 Debtors and their estates. Sherwood Partners can be reached at: Andrew De Camara Sherwood Partners, Inc. 3945 Freedom Cir Suite 560 Santa Clara, CA 95054 Tel: (650) 454-8001 About Gateway Four LP Gateway Four LP and its affiliates Gateway Two LP and Gateway Five LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 20-11581) on Aug. 31, 2020. In the petition signed by its president, James Acevedo, Gateway Four disclosed assets ranging between $50 million to $100 million and liabilities ranging between $10 million to $50 million. Judge Martin R. Barash oversees the case. Daniel M. Shapiro, Attorney at Law serves as the Debtors' counsel, and the Law Office of Sevan Gorginian as co-counsel. GLEN THOMAS PASAK: CCG's Objection to Property Sale Sustained ------------------------------------------------------------- Judge Christopher Lopez of the U.S. Bankruptcy Court for the Southern District of Texas sustained Commercial Credit Group, Inc. ("CCG")'s objection to Glen Thomas Park's sale of the real property located and improvements. The Debtor's sale free and clear of Liens is approved pending CCG receiving (i) a breakdown of the sale and proceeds to be generated and amounts deducted, (ii) escrow of any net proceeds, and (iii) a written explanation from the Debtor on the varying valuations previously provided. The 2018-19 taxes will be paid in full at the closing. The 2020 taxes will be prorated in accordance with the Purchase Agreement, but if not paid in full at closing, will become the responsibility of the Purchaser and the year 2020 ad valorem tax liens will be retained against the subject property until said taxes are paid in full. The property tax liens of Wharton County for the 2020 tax year will be expressly retained until the payment of the taxes, plus any penalties and interest that may accrue thereon, in the ordinary course, until said taxes are paid in full. The bankruptcy case is In re Glen Thomas Pasak, (Bankr. S.D. Tex. Case No. 20-60025). GUEST STARS: Seeks to Hire Markus Williams as Counsel ----------------------------------------------------- Guest Stars, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Colorado to employ Markus Williams Young & Hunsicker LLC, as counsel to the Debtor. Guest Stars requires Markus Williams to: a. assist in reviewing and amending, if necessary, the Debtor's schedules and statement of financial affairs and other initial and necessary pleadings for its chapter 11 case; b. respond to the Order to Show Cause; c. assist in the formulation and preparation of the Debtor's reorganization plan under subchapter V; d. assist or prepare on behalf of the Debtor all necessary applications, complaints, answers, motions, orders, reports, and other legal papers; e. represent the Debtor in adversary proceedings and contested matters related to the Debtor's bankruptcy case; f. represent the Debtor at the meeting of creditors, initial debtor interview and all conferences and hearings set by the Court; g. provide legal advice with respect to the Debtor's rights, powers, obligations and duties as chapter 11 small business debtor-in-possession in the continuing operation of the Debtor's business and the administration of the estate; and h. provide other legal services for the Debtor as necessary and appropriate for the administration of the Debtor's estate. Markus Williams will be paid at these hourly rates: Attorneys $275 to $380 Paralegals $125 Markus Williams will be paid a retainer in the amount of $25,000. Markus Williams will also be reimbursed for reasonable out-of-pocket expenses incurred. Matthew T. Faga, partner of Markus Williams Young & Hunsicker 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. Markus Williams can be reached at: Matthew T. Faga, Esq. MARKUS WILLIAMS YOUNG & HUNSICKER LLC 1775 Sherman Street, Suite 1950 Denver, CO 80203-4505 Tel: (303) 830-0800 Fax: (303) 830-0809 E-mail: mfaga@markuswilliams.com About Guest Stars Guest Stars, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Colo. Case No. 20-16659) on October 8, 2020, disclosing under $1 million in both assets and liabilities. The Debtor hires Markus Williams Young & Hunsicker LLC, as counsel. HARTSHORNE HOLDINGS: Nov. 9 Hearing on Sale of Assets to Frozen --------------------------------------------------------------- Judge Alan C. Stout of the U.S. Bankruptcy Court for the Western District of Kentucky will convene a hearing on Nov. 9, 2020 at 10:00 a.m. (ET) to consider the private sale by Hartshorne Holdings, LLC and its affiliates of the following assets to Frozen Star Holdings II, LLC for $4.5 million credit bid: (a) their coal washing structures and material handling structures, all apparatus, equipment, and appliances used in connection with the operation or occupancy of the coal washing facilities and material handling facilities, and the related plate and frame press building and contents located in McLean County, Kentucky; and certain associated personal property, intangible property, and the applicable plans and studies; (b) their cash and other assets pledged as collateral for their reclamation and similar obligations, including, without limitation, all obligations under SMCRA, to the extent such cash or other assets are released to the Debtors; and (c) all cash or other funds held, deposited, or otherwise retained in connection with the Debtors’ workers’ compensation insurance policies, to the extent such cash or other funds are released to the Debtors. The Debtors proposed to sell the Assets free and clear of any liens, claims, and encumbrances. The Parties are to contact the Court at 1-888-684-8852 with the Access Code 2390218#. They are to choose the prompt to bypass the security code since there is no security code required for the conference call. They are also directed to put their call on mute until their case is called. The Debtors are authorized to take all steps necessary or appropriate to carry out the terms of the Order. A copy of the Agreement is available at https://tinyurl.com/y5kytmte from PacerMonitor.com free of charge. About Hartshorne Holdings Hartshorne Holdings, LLC and affiliates are engaged in the production and sale of thermal coal through the operation of the Poplar Grove Mine, which is part of the Buck Creek Complex located in the Illinois Coal Basin in Western Kentucky. The Buck Creek Complex includes two mines: (i) the operating Poplar Grove Mine, and (ii) the permitted, but not constructed, Cypress Mine. On Feb. 20, 2020, Hartshorne Holdings, LLC and three affiliates sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Lead Case No. 20-40133). Hartshorne Holdings was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Thomas H. Fulton is the case judge. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Frost Brown Todd LLC as local counsel; FTI Consulting, Inc. as financial advisor; and Perella Weinberg Partners LP as investment banker. Stretto is the claims agent, maintaining the page https://cases.stretto.com/hartshorne The Office of the U.S. Trustee appointed a committee of unsecured creditors on March 10, 2020. The committee is represented by Dentons Bingham Greenebaum LLP and Whiteford Taylor Preston, LLP. HERTZ CORP: Dismissed from Denicolo Suit in Light of Bankruptcy --------------------------------------------------------------- In the case captioned RONALD G. DENICOLO, JR., and MICHAEL G. FOX, on behalf of themselves and others similarly situated, Plaintiffs, v. THE HERTZ CORPORATION and VIKING CLIENT SERVICES, INC., d/b/a VIKING BILLING SERVICE, Defendants, Case No. 4:19-cv-00210-YGR (N.D. Cal.), District Judge Yvonne Gonzalez Rogers granted The Hertz Corporation's motion to sever the plaintiffs' claims against it in light of the pendency of its chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the District of Delaware and the filing of a Notice of Suggestion of Bankruptcy. Judge Rogers severed Plaintiffs' claims against Hertz and dismissed it from the suit. The Court agreed that any new action bringing the severed claims should be related back to Judge Rogers pursuant to Local Rule 3-12 in the interest of judicial efficiency and given Court's familiarity with the claims. A copy of the Court's Order is available at https://bit.ly/3dLOhkg from Leagle.com. About Hertz Corp. Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. They also operate a vehicle leasing and fleet management solutions business. The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware (Bankr. D. Del. Case No. 20-11218) on May 22, 2020. Judge Mary F. Walrath oversees the cases. The Debtors tapped White & Case LLP as their bankruptcy counsel, Richards, Layton & Finger, P.A. as local counsel, Moelis & Co. as investment banker, and FTI Consulting as financial advisor. Prime Clerk LLC is the claims agent. The U.S. Trustee for Regions 3 and 9 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee has tapped Kramer Levin Naftalis & Frankel LLP as its bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as Delaware counsel, UBS Securities LLC as investment banker, and Berkeley Research Group, LLC as financial advisor. Ernst & Young LLP provides audit and tax services to the committee. HERTZ GLOBAL: Chooses Apollo Global to Loan $4B for Car Purchases ----------------------------------------------------------------- Steven Church of Bloomberg News reports that bankrupt car rental company Hertz Global Holdings Inc. is seeking approval for a $4 billion loan package put together by affiliates of Apollo Global Management Inc. that will help buy new vehicles. The stock jumped after the disclosure. The short-term, asset-backed debt would pay lenders 3.75% and a $20 million upfront fee, plus fees worth millions over the life of the loan, Hertz said in court papers filed Wednesday night. The deal needs approval from the judge overseeing the bankruptcy. The company is seeking to set up a new, bankruptcy-remote entity that would borrow the money and own the cars. About Hertz Global Holdings Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. The Company also operates a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court (Bankr. D. Del. Case No. 20-11218). The Hon. Mary F. Walrath is the presiding judge. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor. Richards, Layton & Finger, P.A., is the local counsel. Prime Clerk LLC is the claims agent, maintaining the page https://restructuring.primeclerk.com/hertz HRI HOLDING: Court OKs Ch. 11 Plan With Creditor Deal ----------------------------------------------------- Law360 reports that the bankrupt parent company of restaurant chain Houlihan's received court approval in Delaware Thursday, November 5, 2020, for a Chapter 11 plan that embodies a settlement with creditors that will likely provide some recovery for unsecured claims. During a virtual hearing, debtor attorney Kimberly A. Brown of Landis Rath & Cobb LLP told the court the Chapter 11 plan calls for the liquidation of HRI Holding Corp.'s remaining assets following the December 2019 sale of its restaurant assets to Landry's LLC. About HRI Holding Corp. Formed in September 1992 under the name "Gilbert/Robinson, Inc.," and headquartered in Leawood, Kansas, HRI Holding Corp. and its affiliated debtors own and operate 47 restaurants in 14 states (Connecticut, Florida, Illinois, Indiana, Kansas, Michigan, Missouri, Nebraska, New Jersey, New York, Ohio, Pennsylvania, Texas, and Virginia). It owns Houlihan's Restaurant + Bar, J. Gilbert's Wood-Fired Steak + Seafood, Bristol Seafood Grill, and Devon Seafood Grill restaurants. As of the petition date, HRI and its affiliates had 3,450 employees. HRI Holding and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12415) on Nov. 14, 2019. At the time of the filing, Debtors disclosed assets of between $50 million and $100 million and liabilities of the same range. The Debtors have tapped Landis Rath & Cobb, LLP as legal counsel, Piper Jaffray & Co. as investment banker, Hilco Real Estate LLC as real estate advisor, and Kurtzman Carson Consultants, LLC as claims and noticing agent and administrative agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Nov. 22, 2019. The committee is represented by Kelley Drye & Warren, LLP. HUMANIGEN INC: Signs Research and Development Deal with DoD ----------------------------------------------------------- Humanigen, Inc., and the Department of Defense (DoD) Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (JPEO-CBRND or JPEO) have entered into a Cooperative Research and Development Agreement (CRADA) in collaboration with the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response (ASPR) at the U.S. Department of Health and Human Services (HHS), in support of Operation Warp Speed (OWS) to assist in the development of lenzilumab in advance of a potential Emergency Use Authorization (EUA) for COVID-19. The CRADA complements Humanigen's development efforts, providing access to a full-scale, integrated team of OWS manufacturing and regulatory subject matter experts, leading decision makers and statistical support in anticipation of applying for EUA and subsequently a Biologics License Application for lenzilumab as a potential treatment for COVID-19. The CRADA also provides that OWS regulatory experts will work hand in hand with the Company on U.S. Food and Drug Administration (FDA) communications, meetings and regulatory filings. The CRADA aims to support the ongoing lenzilumab Phase 3 clinical trials, focusing on efficiently generating EUA and BLA submissions. In addition to providing access under EUA, a goal of the CRADA is to ensure lenzilumab receives the benefits provided by Public Law 115-92. Humanigen's investigational treatment lenzilumab, a proprietary Humaneered anti-human granulocyte macrophage-colony stimulating factor (GM-CSF) monoclonal antibody, is designed to prevent and treat an immune hyper-response called 'cytokine storm', a complication considered to be a leading cause of COVID-19 death. Data show that up to 89 percent of patients hospitalized with COVID-19 are at risk of this immune hyper-response, which is believed to trigger the acute respiratory distress syndrome in severe cases of COVID-19. Cameron Durrant, MD, MBA, chief executive officer of Humanigen said, "We are honored to be part of Operation Warp Speed, receive this CRADA, and collaborate with JPEO to advance lenzilumab as a potential response treatment and seek a potential EUA. We have been working tirelessly to advance lenzilumab for COVID-19 and are excited to have the integrated expert team at OWS prioritize lenzilumab research and development during this critical time." Lenzilumab was also selected by the National Institutes of Health (NIH) to be evaluated among the promising COVID-19 agents for its ACTIV-5 "Big Effect Trial" (ACTIV-5/BET) which will enroll patients at up to 40 sites in the U.S. About Humanigen Based in Brisbane, California, Humanigen, Inc. (OTCQB: HGEN), formerly known as KaloBios Pharmaceuticals, Inc. -- http://www.humanigen.com/-- is a clinical stage biopharmaceutical company, developing its clinical stage immuno-oncology and immunology portfolio of monoclonal antibodies. The Company is focusing its efforts on the development of its lead product candidate, lenzilumab, its proprietary Humaneered anti-human GM-CSF immunotherapy, through a clinical research agreement with Kite Pharmaceuticals, Inc., a Gilead company to study the effect of lenzilumab on the safety of Yescarta, axicabtagene ciloleucel including cytokine release syndrome, which is sometimes also referred to as cytokine storm, and neurotoxicity, with a secondary endpoint of increased efficacy in a multicenter Phase Ib/II clinical trial in adults with relapsed or refractory large B-cell lymphoma. Humanigen reported a net loss of $10.29 million for the 12 months ended Dec. 31, 2019, compared to a net loss of $12 million for the 12 months ended Dec. 31, 2018. As of June 30, 2020, the Company had $42.57 million in total assets, $10.97 million in total liabilities, and $31.60 million in total stockholders' equity. Horne LLP, in Ridgeland, Mississippi, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 16, 2020, citing that the Company has suffered recurring losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. HYSTER-YALE MATERIALS: S&P Affirms 'B' ICR; Outlook Positive ------------------------------------------------------------ S&P Global Ratings revised the outlook on Cleveland, Ohio-based lift truck manufacturer Hyster-Yale Materials Handling Inc. to positive from negative and affirmed its 'B' issuer credit and 'BB-'issue-level ratings. S&P said, "Hyster-Yale's profitability, though still depressed, will likely be stronger than we previously anticipated in 2020, driven by a rebound in end markets and cost actions taken by the company. Hyster-Yale was adversely affected by the COVID-19 pandemic and related economic restrictions that resulted in reduced demand in the global lift truck markets and for the company's products, leading to decreases in shipments, bookings, and backlog. The company's supply chain was also impacted by delivery disruptions from coronavirus related shutdowns resulting in some material and component shortages in early second quarter. After reporting a decline in revenues of 24% in the second quarter, revenue declines were roughly 15% for the third quarter as economic activity and bookings began to increase. This was largely driven by improved demand in the European markets and an increase in booking activity in the recent months. The company has also taken cost containment actions targeted to achieve $60 million-$75 million in cost savings in 2020 to offset the impact of the volume declines. These actions include reducing discretionary spending and employee compensation as well as workforce adjustment to match volumes with demand at manufacturing plants. These actions are expected to continue through the remainder of the year resulting in EBITDA decline in the low teens percentage range, matching revenue declines in the same range in 2020. We expect leverage to remain below 4x through the balance of 2020 before improving to less than 3x by end of 2021." Hyster-Yale's volumes and profitability experienced significantly less volatility then the 2009 recession. During the recession in 2009, Hyster-Yale experienced volatility of profitability at a higher rate than the rest of the industry, resulting in a revenue decline of about 50% and negative operating profit for the year. While the duration of the pandemic and the scale of its economic impact remains uncertain, the company has been able to maintain revenue and EBITDA declines in the low teens percentage range, beating our previous base case forecast. The cost containment actions taken by the company, matched with material growth in e-commerce, have supported warehouse orders and, to some extent, has mitigated a more pronounced decline in volumes and profitability this year. Manageable debt maturities and ample liquidity sources are expected to provide additional support during this period of stress. The company's current cash position of about $90 million and $235 million of availability under its ABL facility should provide ample cushion in the near term to fund capex and necessary cash outlays. In addition, debt maturities are manageable, given its nearest maturity in 2022 when the company's ABL facility matures. The company has also, to some extent, bolstered liquidity through effective working capital management of inventory and receivables. Furthermore, S&P believes it is unlikely that the ABL revolver covenant will be tested over the next few quarters providing further flexibility in the next few quarters. S&P said, "The positive outlook reflects the possibility we could raise our ratings on Hyster-Yale over the next 12 months if strong demand continued through fiscal 2021 enabling the company to improve leverage toward 3x and maintain funds from operations (FFO)-to-adjusted-debt ratio above 20%." S&P could raise its ratings if: -- Operating performance prospects improve and S&P expects the company's leverage to trend towards 3x and remain at that level on a sustained basis; and -- S&P expects the company to generate solid free operating cash flow generation of at least $25 million for the next 12 months. S&P could revise the outlook to stable if: -- Operating results weaken and we expect adjusted debt to EBITDA to trend towards 4x; or -- Liquidity becomes constrained due to an increasing cash flow deficit; or -- Hyster-Yale adopted a more aggressive financial policy and undertook a large-scale debt-funded acquisition that weighed on its financial risk profile. IFS SECURITIES: Liquidating Plan Confirmed by Judge --------------------------------------------------- Judge Lisa Ritchey Craig has entered findings of fact, conclusions of law and order granting final approval of Disclosure Statement and confirming Plan of Liquidation of IFS Securities, Inc. There is adequate and proper means for the implementation of the Plan, including the Debtor's cash and assets which together are adequate to make the distributions and reserves required under the Plan and fund the Trust, thereby satisfying section 1123(a)(5) of the Bankruptcy Code. The Debtor's good faith is evident from the facts and record of these Chapter 11 Case, the Disclosure Statement, the Service Affidavit and the record of the Confirmation Hearing and other proceedings held in these Chapter 11 Case. The Plan and all documents necessary to effectuate the Plan were negotiated at arms' length among representatives of the Debtor, certain other parties, and their respective professionals. Further, the Plan's classification, indemnification, exculpation, and injunction provisions have been negotiated in good faith and at arms' length, are consistent with sections 105, 1122, 1123(b)(3)(A), 1123(b)(6), 1125(e), 1129, and 1142 of the Bankruptcy Code, and are each necessary for the Debtor's successful liquidation. A full-text copy of the order dated September 22, 2020, is available at https://tinyurl.com/yy8d2m9h from PacerMonitor at no charge. Counsel for the Debtor: GREENBERG TRAURIG, LLP John D. Elrod 3333 Piedmont Road, Suite 2500 Atlanta, Georgia 30305 Telephone: 678.553.2259 Facsimile: 678.553.2269 E-mail: elrodj@gtlaw.com About IFS Securities IFS Securities, Inc., an Atlanta-based broker and dealer, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 20-65841) on April 24, 2020. At the time of filing, IFS was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. John D. Elrod, Esq., of Greenberg Traurig, LLP, is the Debtor's counsel. IFS SECURITIES: U.S. Trustee's Plan Objection Overruled ------------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that Atlanta broker-dealer IFS Securities Inc. won approval of its liquidation plan less than five months after filing for bankruptcy triggered by an employee's unauthorized fixed income trade. Judge Lisa Ritchey Craig of the U.S. Bankruptcy Court for the Northern District of Georgia confirmed the Chapter 11 plan Thursday after overruling objections from the U.S. Trustee's Office, the Justice Department's bankruptcy watchdog. The U.S. Trustee argued that the plan released too many company officers, directors, and affiliates from liability. "This case has been incredibly contentious and heavily litigated," Craig said at a hearing. "The court believes the expeditious finality this plan. About IFS Securities IFS Securities, Inc., an Atlanta-based broker and dealer, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 20-65841) on April 24, 2020. At the time of filing, IFS was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. John D. Elrod, Esq. of Greenberg Traurig, LLP, is the Debtor's counsel. IMERYS TALC: Arnold & Itkin Says Confirmation Schedule Not Feasible ------------------------------------------------------------------- Arnold & Itkin LLP, on behalf of more than two thousand holders of Talc Personal Injury Claims on whose behalf Arnold & Itkin has filed proofs of claim against the Debtors, and will be identified in a statement to be filed under Bankruptcy Rule 2019 (the "Objectors"), submitted a supplemental objection to the Imerys Talc America, Inc., et al.' Solicitation Motion in connection with the Amended Disclosure Statement, and in further support of the Objection of Arnold & Itkin LLP to Debtors' Solicitation Motion and Disclosure Statement for Third Amended Joint Chapter 11 Plan of Reorganization of Imerys Talc America, Inc. and Its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code. Arnold & Itkin point out that: * The proposed confirmation schedule is still too compressed given the number of confirmation issues that must be addressed. * The proposed confirmation schedule also fails to take into account the time needed to resolve discovery disputes. * The proposed confirmation schedule is unworkable because it contemplates that all fact depositions be taken before document production is completed. * The Debtors' proposed confirmation schedule is simply not feasible given the enormity and complexity of the issues in the case and the lack of information (including unshared information in the Plan Proponents' possession) various objecting parties have to even start any quantitative analysis of the confirmability of a plan. Special Bankruptcy Counsel to Arnold & Itkin LLP: Laura Davis Jones Debra I. Grassgreen John A. Morris Peter J. Keane PACHULSKI STANG ZIEHL & JONES LLP 919 N. Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 (Courier 19801) Telephone: (302) 652-4100 Facsimile: (302) 652-4400 Email: ljones@pszjlaw.com dgrassgreen@pszjlaw.com jmorris@pszjlaw.com pkeane@pszjlaw.com -and- Counsel to the Objectors: Jason A. Itkin ARNOLD & ITKIN LLP 6009 Memorial Drive Houston, TX 77007 Main: 713.222.3800 Fax: 713.222.3850 Email: jitkin@arnolditkin.com About Imerys Talc America Imerys Talc and its subsidiaries--https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent. IMERYS TALC: J&J Says Deficient TDPs Make Plan Unconfirmable ------------------------------------------------------------ Johnson & Johnson and Johnson & Johnson Consumer Inc. filed a second supplemental objection to the motion of Debtors for entry of order approving the Disclosure Statement and setting a hearing to consider confirmation of the Amended Joint Chapter 11 Plan of Reorganization of Imerys Talc America, Inc. and its debtor affiliates. The cornerstone of the Debtors' Plan has always been a channeling injunction that sends Talc Personal Injury Claims to a trust (the "Talc Personal Injury Trust" or "Trust") for resolution under trust distribution procedures (the "TDPs"). Yet, the Debtors did not include these critical TDPs with their initial Plan and Disclosure Statement, filed on May 15, 2020, or their Amended Plan and Revised Disclosure Statement, filed on August 12, 2020. J&J points out that: * The Revised Disclosure Statement should not be approved because the Amended Plan is patently unconfirmable. * The Amended Plan, Revised Disclosure Statement, and TDPs are based on an order that will not be entered. * The TDPs inflate claim values and provide recovery for meritless claims. As to the TDPS, J&J further avers that the TDPs fail to adequately protect against double recovery or fraud, provide for disparate treatment among creditors by cutting off all of J&J rights as an indirect claimant, and leave holes in the Amended Plan. J&J adds that the TDPs do not contain fundamental information necessary to evaluate the Amended Plan and the TDPs fail to explain how certain claims will be handled. "The cornerstone of the Debtors' Plan has always been a channeling injunction that sends Talc Personal Injury Claims to a trust (the "Talc Personal Injury Trust" or "Trust") for resolution under trust distribution procedures (the "TDPs"). Yet, the Debtors did not include these critical TDPs with their initial Plan and Disclosure Statement, filed on May 15, 2020, or their Amended Plan and Revised Disclosure Statement, filed on August 12, 2020. Numerous parties, including J&J, objected to the Debtors' two Disclosure Statements because of the missing TDPs and that the Debtors had surrendered to the Tort Claimants Committee ("TCC") and the Future Claimants' Representative ("FCR") all rights to draft or influence them; giving the very parties that would file claims under the TDPs complete control over the drafting process. Now that the Debtors have finally filed the TDPs (see [D.I. 2184-1]), it is clear that those TDPs are the product of the moral hazard J&J has warned about throughout the Debtors' bankruptcy. Neither the Revised Disclosure Statement nor the TDPs provide any detail regarding how the TCC and FCR determined any of the inflated claim values proposed to be paid under the TDPs, or what support exists for such valuation. And, there are potential disparities in claims awards, and information gaps in the application of the TDPs. These many deficiencies in the TDPs make the Debtors' Amended Plan patently unconfirmable," J&J said in court filings. Attorneys for Johnson & Johnson: Patrick A. Jackson FAEGRE DRINKER BIDDLE & REATH LLP 222 Delaware Ave., Suite 1410 Wilmington, Delaware 19801 Telephone: (302) 467-4210 E-mail: patrick.jackson@faegredrinker.com - and - Diane P. Sullivan Gary T. Holtzer Ronit J. Berkovich Theodore E. Tsekerides WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 About Imerys Talc America Imerys Talc and its subsidiaries --https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent. IMERYS TALC: J&J Slams Objection to $20-Mil. Ch. 11 Claim --------------------------------------------------------- Law360 reports that Johnson & Johnson asked a Delaware bankruptcy judge Wednesday, November 4, 2020, to reject debtor Imerys Talc America's objection to the consumer products giant's $20 million claim for talc injury liability, saying Imerys can't concede its own liability while denying J&J's claim. In its motion, J&J said that Imerys' objection was an attempt to cut J&J out of participation in the bankruptcy case with an argument that Imerys' liability for the talc it supplied for J&J's products has not been proven in court. But at the same time, Imerys is proposing a Chapter 11 plan that would create a trust fund. About Imerys Talc America Imerys Talc and its subsidiaries--https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent. IMERYS TALC: U.S. Trustee Says Disclosures Inadequate ----------------------------------------------------- Andrew R. Vara, the United States Trustee for Region 3 submitted an objection to the Imerys Talc America, Inc., et al.'s motion for approval of Disclosure Statement and establishment of solicitation procedures and to the Disclosure Statement for the Third Amended Joint Chapter 11 Plan, and in support thereof states as follows: U.S. Trustee points out that: * The disclosure statement must inform the average creditor what it is going to get and when, and what contingencies there are that might intervene. * The Disclosure Statement here does not include any substantive information regarding the contents of the recently filed TDPs and Trust Agreement, or what will be included in the unfiled Cooperation Agreement. * The Plan Proponents are asking the Court to approve a Disclosure Statement that does not describe how Talc Personal Injury Claims will be valued or paid, and which does not identify the Trustees or the TAC members. * The TDPs do not contain adequate safeguards for preventing fraud and minimizing the number of non-meritorious claims that are paid. According to the U.S. Trustee, the Disclosure Statement does not provide adequate information sufficient to meet the requirements of section 1125 of the Bankruptcy Code and the Motion should therefore be denied. The Third Amended Plan lacks an adequate means for implementation because the procedures governing the Trust contain inadequate safeguards to prevent the payment of fraudulent claims, including both claims submitted to the Trust and claims in other proceedings. About Imerys Talc America Imerys Talc and its subsidiaries -- https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC, as financial advisor; and Prime Clerk LLC as claims agent. INTEGRATED DENTAL: Dec. 1 Auction of Substantially All Assets ------------------------------------------------------------- Judge John K. Sherwood of the U.S. Bankruptcy Court for the District of New Jersey authorized Integrated Dental Systems, LLC's bidding procedures in connection with the sale of substantially all assets to Biotech Dental, LLC, in accordance with the terms of their Asset Purchase Agreement dated as of Oct. 16, 2020, for $3.2 million, subject to adjustment, subject to overbid. A hearing on the Motion was held on Oct. 28, 2020. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 27, 2020 at 10:00 a.m. (ET) b. Initial Bid: The sum of (i) the Purchase Price, (ii) the Expense Reimbursement, and (iii) $50,000 c. Deposit: 10% of the Purchase Price d. Auction: If an Auction is held, it will take place on Dec. 1, 2020 at 10:00 a.m. (ET) at the offices of Sills Cummis & Gross, P.C., One Riverfront Plaza, Newark, New Jersey 07102, or such other place and time and manner (including via video, Zoom or any similar manner) as the Debtor will notify all Qualified Bidders that have submitted Qualified Bids (including the Stalking Horse Bidder) and the Consultation Parties. Otherwise, the Debtor will promptly submit the Stalking Horse Bid to the Court for approval at the Sale Hearing. e. Bid Increments: $50,000 f. Sale Hearing: Dec. 2, 2020 at 10:00 a.m. (ET) g. Sale/Cure Objection Deadline: Nov. 27, 2020 at 5:00 p.m. (ET) h. Expense Reimbursement: $150,000 If the Successful Bidder is not the Stalking Horse Bidder, the Debtor will be authorized, and directed, to pay an amount equal to the Expense Reimbursement to the extent due to the Stalking Horse Bidder under the terms of the Stalking Horse Agreement to the Stalking Horse Bidder from the proceeds the sale from the Successful Bidder in accordance with the terms of the Stalking Horse Agreement, without the need for a further Order of the Court. The Sale Notice is approved. Within three business days following the entry of the Order, or as soon as reasonably practicable thereafter, the Debtor will cause the Sale Notice to be served on the Sale Notice Parties. The procedures regarding the assumption and assignment of the executory contracts and unexpired leases proposed to be assumed by the Debtor and assigned to the Stalking Horse Bidder (or other Successful Bidder, if any) in connection with the Sale are approved to the extent set forth in the Order. The Assumption and Assignment Service Deadline is seven calendar days prior to the Sale Objection Deadline. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of the Order are immediately effective and enforceable upon its entry. A copy of the Agreement and the Bidding Procedures is available at https://tinyurl.com/y3swf36y from PacerMonitor.com free of charge. About Dental Systems Integrated Dental Systems, LLC is an integrated dental systems that was established to provide dentists with a full suite of tooth replacement systems, and supporting products, educational resources, and clinical support. Integrated Dental sought Chapter 11 protection (Bankr. D.N.J. Case No. 20-21423) on Oct. 7, 2020. In the petition signed by Carey Lyons, CEO, the Debtor had total assets of $7,041,242 and $11,572,479 in total debt. The Debtor tapped S. Jason Teele, Esq., at Sills Cummis & Gross P.C., as counsel. J.C. PENNEY: Lenders Want to Slow Down Property Sale ---------------------------------------------------- Shannon D. Harrington and Eliza Ronalds-Hannon of Bloomberg News reports that a group of creditors to J.C. Penney Co. is seeking to slow the sale of the bankrupt retailer's real estate to another group of lenders, saying that it provides the buyers an undeserved windfall and reeks "of not only greed but abhorrent bad faith." The objecting creditors, led by Aurelius Capital Management, say they submitted a $750 million competing bid for J.C. Penney's properties that would provide $600 million more to the bankrupt estate and more evenly distribute proceeds among creditors. They're asking Judge David Jones to order a separate process for the property sale to the so-called DIP. About J.C. Penney Co. Inc. J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors have tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney A committee of unsecured creditors has been appointed in Debtors' Chapter 11 cases. The committee is represented by Cole Schotz, P.C., and Cooley, LLP. J.C. PENNEY: Says Shareholders' DIP Loan Challenges 'Ludicrous' --------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that a request from J.C. Penney Co. shareholders to invalidate the retailer's bankruptcy loan is "not merely frivolous -- it is ludicrous," lawyers for the bankrupt company argue in court papers. J.C. Penney is asking U.S. Bankruptcy Judge David Jones to deny the motion from shareholders to undo a $900 million bankruptcy financing package. The shareholders argue the financing was unnecessary in light of better-than-expected revenue, meaning the milestones attached to financing needlessly constrained J.C. Penney's restructuring options. J.C. Penney argues that its sales over-performance is no reason to undo the financing because the cash was crucial to stabilizing operations. About J.C. Penney Co. Inc. J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors have tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney A committee of unsecured creditors has been appointed in Debtors' Chapter 11 cases. The committee is represented by Cole Schotz, P.C., and Cooley, LLP. J.C. PENNEY: Unsecured Creditors to Get Less Than 1% in Plan ------------------------------------------------------------ J. C. Penney Company, Inc., et al. submitted at the end of October 2020 submitted a proposed solicitation version of the Disclosure Statement explaining their proposed Chapter 11 Plan.. The core terms of the restructuring support agreement ("RSA") will be implemented through (i) the Sale Order which will approve entry into the Asset Purchase Agreement, and (ii) the Plan, which contemplates, among other things: * Each Holder of Other Priority Claims shall receive payment in full in Cash on the later of the Effective Date and such date such Other Priority Claim becomes an Allowed Other Priority Claim or such other treatment rendering such Holder's Allowed Other Priority Claim Unimpaired; * Each Holder of Other Secured Claims shall receive, at the option of the applicable Debtor or Plan Administrator, as applicable: (i) payment in full in Cash; (ii) delivery of the collateral securing any such Claim and payment of any interest required under section 506(b) of the Bankruptcy Code; (iii) Reinstatement of such Claim; or (iv) such other treatment rendering such Claim Unimpaired; * To the extent their claim has not already been satisfied, Holders of an Allowed ABL Claim or Allowed Secured Swap Claim shall receive payment in full, in Cash; * Each Holder of First Lien Claims shall receive (a) pursuant to the Sale Transaction, on account of the Aggregate Bid, its Credit Bid Pro Rata share of the Credit Bid Distribution, subject to dilution under the Plan and (b) its Pro Rata share of any cash remaining in the Wind-Down Reserve, Professional Fee Escrow, and Administrative / Priority Claims Reserve once all Allowed Claims entitled to payment therefrom have been satisfied and no Disputed Claims that may be entitled to payment from such sources remain to be adjudicated. Class 4 First Lien Claims are projected to recover 0% to 6.4% of their claims. * Each Holder of Second Lien Notes Claims shall receive its Pro Rata share (taken together with the Unsecured Notes Claims, General Unsecured Claims, and Key Go Forward Supplier Claims) of any cash remaining in the Wind-Down Reserve once all Allowed Claims entitled to payment therefrom have been satisfied, no Disputed Claims that may be entitled to payment from such sources remain to be adjudicated, and all First Lien Claims have been satisfied in full. Class 6 Second Lien Notes Claims will recover less than 1% of their claims. * Each Holder of Unsecured Notes Claims shall receive its Pro Rata share (taken together with the Second Lien Notes Claims, General Unsecured Claims, and Key Go Forward Supplier Claims) of any cash remaining in the Wind-Down Reserve once all Allowed Claims entitled to payment therefrom have been satisfied, no Disputed Claims that may be entitled to payment from such sources remain to be adjudicated, and all First Lien Claims and Second Lien Notes Claims have been satisfied in full. Class 7 Unsecured Notes Claims will recover less than 1% of their claims. * Each Holder of General Unsecured Claims shall receive its Pro Rata share of its Pro Rata share (taken together with the Second Lien Notes Claims, Unsecured Notes Claims, and Key Go Forward Supplier Claims) of any cash remaining in the Wind-Down Reserve once all Allowed Claims entitled to payment therefrom have been satisfied, no Disputed Claims that may be entitled to payment from such sources remain to be adjudicated, and all First Lien Claims and Second Lien Notes Claims have been satisfied in full. Class 8A General Unsecured Claims totaling $710,090,918 will recover less than 1% of claims. * Each Holder of Key Go Forward Supplier Claims shall receive (i) its Pro Rata share (taken together with the Second Lien Notes Claims, Unsecured Notes Claims, and General Unsecured Claims) of any cash remaining in the Wind-Down Reserve once all Allowed Claims entitled to payment therefrom have been satisfied, no Disputed Claims that may be entitled to payment from such sources remain to be adjudicated, and all First Lien Claims have been satisfied in full; and (ii) a waiver of any preference actions arising under section 547 of the Bankruptcy Code or any comparable "preference" action arising under applicable non-bankruptcy law. Class 8B Key Go Forward Supplier Claims totaling $629,423,595 will recover less than 1% of claims plus the value of preference waiver. A full-text copy of the Disclosure Statement dated October 26, 2020, is available at https://tinyurl.com/yyr6ze6w from PacerMonitor.com at no charge. Co-Counsel to the Debtors: Joshua A. Sussberg, P.C. Christopher J. Marcus, P.C. Aparna Yenamandra KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: joshua.sussberg@kirkland.com christopher.marcus@kirkland.com aparna.yenamandra@kirkland.com - and - Matthew D. Cavenaugh Jennifer F. Wertz Kristhy M. Peguero Veronica A. Polnick JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: mcavenaugh@jw.com jwertz@jw.com kpeguero@jw.com vpolnick@jw.com About J.C. Penney Co. Inc. J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors have tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney A committee of unsecured creditors has been appointed in Debtors' Chapter 11 cases. The committee is represented by Cole Schotz, P.C., and Cooley, LLP. JOHN PALCZUK: Wins Summary Judgment Bid Against Conways ------------------------------------------------------- In the case captioned JOHN JEROME PALCZUK and KAREN ELIZABETH PALCZUK, Plaintiffs, v. STEVE CONWAY, LORI CONWAY, LORCON, LLC#1, and LORCON, LLC #4, Defendants, Adversary Proceeding No. 19-00001-8-SWH (Bankr. E.D.N.C.), Bankruptcy Judge Stephani W. Humrickhouse allowed the Plaintiffs' motion for summary judgment and denied the Defendants' cross-motion for summary judgment. This case is the most recent installment in over a decade of litigation between the parties, the genesis of which was a failed 2004 investment between plaintiffs, defendants Steve and Lori Conway, and various limited liability companies in which the Palczuks and the Conways held ownership interests. In 2004, plaintiffs John and Karen Palczuk formed Johns Folly Ocean Villas, LLC, a real estate development company, with another couple, Richard and Jennifer Heyl. JFOV planned to construct and then rent luxury, high-end villas on an oceanfront lot in St. Johns, United States Virgin Islands. Defendants also invested in JFOV in 2004. In 2007, defendants invested in Heyl Partners Station Plaza a company owned by Richard Heyl; they later transferred that interest from HPSP to JFOV. The Defendants also fulfilled multiple JFOV capital calls in addition to these two investments. Eventually, JFOV failed, and defendants' lost investment in that company forms the basis of their many claims against the plaintiffs. On August 31, 2009, the Heyls filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of Missouri. The Defendants filed an adversary proceeding in that case, seeking to have debts related to the JFOV investment declared nondischargeable. The Missouri Bankruptcy Court entered judgment for the Heyls, after which a series of appeals ensued. Having failed to prevail at any level, defendants also filed motions to reconsider the decisions of both appellate courts, both of which were denied. On August 14, 2017, defendants filed a complaint against the Heyls and the plaintiffs in the United States District Court for the Eastern District of Missouri ("2017 District Court Action"), seeking to have the court declare the debt nondischargeable under 11 U.S.C. section 523(a)(19). In their complaint in the 2017 District Court Action, defendants acknowledge the Palczuks' 2011 bankruptcy petition filed in this court, and state further that Palczuks "acknowledged and listed their debt to [the Conways, Lorcon, LLC #1, and Lorcon, LLC #4]." With respect to defendants' claims against the Heyls, the matter was referred to the Missouri bankruptcy court; as to the Palczuks, the claims were dismissed by the district court, with that court specifically noting this bankruptcy court's continuing jurisdiction over the plaintiffs' closed bankruptcy case. The Missouri bankruptcy court ultimately dismissed the defendants' claims against the Heyls. The Defendants filed a motion to reconsider the dismissal of these claims against the Heyls, which was denied. Defendants appealed the dismissal to the Bankruptcy Appellate Panel for the Eight Circuit, which affirmed the Missouri bankruptcy court's ruling. The Defendants again petitioned the panel for a rehearing, which was again denied. Meanwhile, back in North Carolina, in 2017 the Conways filed a complaint against plaintiffs with the North Carolina Secretary of State regarding the defendants' investment in JFOV, which ultimately resulted in each plaintiff entering an Alford Plea. Each plaintiff pled guilty to one charge of selling unregistered securities. Defendants sought to ensure that plaintiffs were both charged with and convicted of felony security fraud, and sentenced to pay restitution, in hopes of improving their position. To this end, they opposed the Palczuks' entry of the Alford Pleas and, in their victim impact statement dated July 27, 2018 and presented to Wake County District Court Judge Monica Bousman prior to sentencing. In a judgment entered on July 30, 2018, the state court made no written findings but sentenced the Palczuks to unsupervised probation and imposed a fine of $1000 each and court costs of $180 each, payable to the Wake County Clerk of Court. The court did not order either of the Palczuks to pay restitution. On Oct. 24, 2018, the defendants sued plaintiffs in Guilford County Superior Court ("the North Carolina lawsuit"), which was thereafter referred to the North Carolina Business Court. The North Carolina lawsuit asserted nine counts related to the defendants' investment in JFOV. They include breach of fiduciary duty; breach of duty of loyalty and care under U.S. Virgin Island law; constructive fraud; fraudulent concealment; nondischargeability of debt pursuant to section 523(a)(19)(A)(I); nondischargeability of debt pursuant to section 523(a)(19)(A)(iii); violations of N.C. Gen. Stat. section 78A-1 et seq.; negligent misrepresentation; and equitable estoppel. In response to the North Carolina lawsuit, on Nov. 8, 2018, the plaintiffs filed a motion to reopen their chapter 11 case. On Nov. 21, 2018, plaintiffs filed a motion with the Business Court asking it to stay any further activity in the North Carolina lawsuit "pending resolution of the Bankruptcy Proceeding," to which defendants consented. The Business Court, in granting plaintiffs' motion, concluded that a stay "would serve judicial economy and is in the interest of justice." The bankruptcy court reopened the plaintiffs' case by order dated Feb. 5, 2019. On April 4, 2019, the plaintiffs filed the instant adversary proceeding. In it, the plaintiffs asked the court to declare that all debts to defendants arising prior to confirmation were discharged, determine that no debts claimed by the defendants in the North Carolina lawsuit are nondischargeable pursuant to section 523(a)(19), and to sanction defendants for willfully violating the terms of the discharge injunction. In response, defendants filed a motion to dismiss for lack of subject matter jurisdiction or, in the alternative, to stay the adversary proceeding. The matter was set for hearing on August 22, 2019. The court subsequently denied the defendants' motion to dismiss in a short order entered on August 25, 2019, which was supplemented on Sept. 5, 2019. In the complaint, the plaintiffs alleged that each and every claim for relief in the 2017 District Court Action and in the North Carolina lawsuit arose prior to confirmation of the Palczuks' chapter 11 plan, and prior to entry of discharge on Nov. 29, 2012, such that defendants' institution and prosecution of these actions violates the discharge injunction. The Defendants objected, contending that "the debts owed to the Defendants arise out of violations of securities law and fraud in connection with same. Therefore, Section 523(a)(19) holds these claims to be non-dischargeable." Under Rule 56 of the Federal Rules of Civil Procedure, a court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Here, both the plaintiffs and defendants have moved for summary judgment on the question of whether defendants can show that the plaintiffs are obligated to them for debts that are nondischargeable under 11 U.S.C. section 523(a)(19). After careful consideration of the facts presented, the District Court stated that though defendants have pursued plaintiffs in multiple forums in two states, they do not have a pre-discharge securities judgment to show for it. Under the plain language of the statute, there is no debt of the kind specified as nondischargeable under section 523(a)(19). Accordingly, the plaintiffs' first claim for relief, which sought a determination that there is no debt owed by plaintiffs to defendants that is nondischargeable pursuant to 11 U.S.C. section 523(a)(19), was allowed. The Plaintiffs' second cause of action alleges that defendants' efforts to recover their financial losses constitute not just violations of the discharge injunction, but also were knowingly undertaken in willful disregard of that discharge injunction and warrant sanctions in an amount not less than the sum of the attorneys' fees incurred by plaintiffs in reopening the bankruptcy case to address the violations, and in defending both the 2017 District Court Action in Missouri and the North Carolina lawsuit. The District Court held that in this matter, it is abundantly clear that defendants initiated and engaged in litigation against plaintiffs in violation of the discharge injunction, thus plaintiffs' second claim for relief also was allowed. A copy of the Court's Order is available at https://bit.ly/3kdspRb from Leagle.com. John Palczuk filed for chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 11-04017) on May 25, 2011. JOHNS MANVILLE: Order Enjoining Berry's Asbestos Claims Upheld -------------------------------------------------------------- In the case captioned LYDIA BERRY, Appellant, v. GRAPHIC PACKAGING INTERNATIONAL, INC., Appellee, Case No. 82 Br. 11659 (CGM) (S.D.N.Y.), Lydia Berry appealed from a June 30, 2016 order of the U.S. Bankruptcy Court for the Southern District of New York, enjoining her claims against Graphic Packaging International, Inc. in her state court action then pending in the Fourth Judicial District for the Parish of Ouachita in Louisiana. District Judge Paul G. Gardephe found that the Appellant's arguments are without merit, and affirmed the decision of the Bankruptcy Court. The appeal is dismissed in its entirety. In the Louisiana Action, the Appellant brought asbestos-related personal injury claims against several Defendants, including Graphic Packaging, seeking to recover for her exposure to asbestos from her husband's work at a mill owned by the Appellee from 1973 until 2010. The Appellant testified in the Louisiana Action that her exposure was to asbestos fibers that travelled from the Mill to her home on Mr. Berry's work clothes, which she laundered. The Appellant alleged that due to her exposure to asbestos, she "contracted malignant mesothelioma . . . diagnosed on or around March 10, 2015." The Appellee was the only "premises defendant" in the Louisiana Action. The Mill is located in West Monroe, Louisiana, and at the time Mr. Berry started working there, it was owned by OlinKraft, Inc. As a result of a 1979 merger and 1980 name change, Manville Forest Products Corporation ("MFP") became the owner of the Mill. In 1982, MFP, its parent company Johns-Manville Corporation, and their affiliates filed a Chapter 11 bankruptcy petition in this District. On March 26, 1984, the Bankruptcy Court confirmed MFP's Plan of Reorganization, and on Dec. 22, 1986, the Bankruptcy Court confirmed Manville's Second Amended and Restated Plan of Reorganization. In 1991, MFP changed its name to Riverwood International Corporation. In 2003, the Appellee merged with Riverwood, with Riverwood as the surviving entity. Upon the completion of the merger, Riverwood changed its name to "Graphic Packing International, Inc." Manville was "a diversified manufacturing, mining and forest products company," and by the 1970s had become "the world's largest miner, processor, manufacturer and supplier of asbestos and asbestos-containing products." The primary reason for the MFP and Manville bankruptcies was asbestos litigation. A 1982 study commissioned by Manville projected that 45,000 asbestos-related cases might be filed against the company. While Manville had $600 million in insurance coverage through approximately 100 policies issued by 25 insurers, these insurers "by and large refused to provide defense and indemnity to Manville in asbestos cases." The Louisiana Action was filed on August 24, 2015, in the Fourth Judicial District for the Parish of Ouachita in Louisiana. On Feb. 29, 2016, Appellee filed the instant action, an emergency motion to enforce the MFP and Manville confirmation orders, and to enjoin the claims against it in the Louisiana Action. At that point in time, the Louisiana Action was set for trial on April 4, 2016, with a number of deadlines and depositions soon approaching. On March 14, 2016, Chief Bankruptcy Judge Cecilia G. Morris granted a stay of the claims against Appellee in the Louisiana Action, pending a decision on the motion. On June 30, 2016, Chief Judge Morris issued a memorandum opinion and an order granting Appellee's motion and enjoining the claims against Appellee in the Louisiana Action. On July 21, 2016, the Appellant filed a notice of appeal, which was assigned to the District Court. The Appellant argued that the Bankruptcy Court erred in "finding that Mrs. Berry's asbestos injury arose as the result of pre-petition and not post-petition exposure to asbestos." The Appellant argued that, under 11 U.S.C. section 524(g), a bankruptcy court may enjoin "claims against a third party" and channel them into the bankruptcy only in specific circumstances that are not present here. In this regard, the Appellant argued that MFP's liability "is not derivative of Manville's," but is independent. According to the Appellant, "MFP's liability is for premises liability and sounds in negligence," whereas Manville's liability is based on "manufacturing and placing into the stream of commerce toxic asbestos and asbestos-containing products." As an initial matter, Judge Morris did not enjoin the Appellant's claim pursuant to 11 U.S.C. section 524(g). Instead, Judge Morris discharged the Appellant's claim noting that "[t]he discharge operates to void a judgment of personal liability against the debtor at any time obtained where that judgment is for a dischargeable debt." Accordingly, it is irrelevant whether a discharge of MFP's liability is permitted by Section 524(g). Moreover, MFP's liability is in fact derivative of Manville's. As explained above, for channeling purposes, all that matters is that the Appellant's claim "arise[s] directly or indirectly" from Manville's acts or omissions. The particular theory of liability is irrelevant to this analysis as long as Manville's manufacture and placement of asbestos products indirectly led to Appellant's injuries. Accordingly, for purposes of the Appellant's claim, MFP's liability is derivative of Manville's liability, Judge Gardephe said. The Appellant also argued that the MFP Plan made "[n]o provision . . . for individuals who would later develop injuries for which MFP was liable as a result of exposure to asbestos before MFP's bankruptcy case." The Appellant again relies on Motors Liquidation. According to Judge Gardephe, this analogy does not hold, because the Manville Plan provides a mechanism to represent and pay future asbestos claimants. Given the intertwined nature of the two bankruptcies, and the fact that the Manville Plan channeled claims against MFP such as Appellant's claim, there is no requirement that the MFP Plan provide its own mechanism to pay future asbestos claimants such as Appellant. The Appellant argued that the Bankruptcy Court improperly relied "on Manville's funding of the Manville Asbestos Trust through the sale of MFP's stock" in deciding that the claims should be channeled. The Bankruptcy Court did in fact note MFP's contributions. The Bankruptcy Court also concluded that, "[e]ven if MFP were somehow considered a non-debtor subsidiary of Manville, Manville did not use MFP to shield its assets." However, MFP is clearly a subsidiary of Manville. As such, it is an entity that can have Other Asbestos Obligations channeled through the Manville Plan. The Bankruptcy Court's decision makes this point as further evidence that the MFP and Manville bankruptcies were intertwined. Judge Gardephe saw no error in that analysis. A copy of the District Court's Order is available at https://bit.ly/3jhBYgC from Leagle.com. About Johns-Manville Johns-Manville Corp. was, by most sources, the largest manufacturer of asbestos-containing products and the largest supplier of raw asbestos in the United States from the 1920s until the 1970s. Manville sold raw asbestos to manufacturers of asbestos-based products in 58 countries and distributed its own asbestos-based products "across the entire spectrum of industries and employment categories subject to asbestos exposure." As a result of studies linking asbestos with respiratory disease, Manville became the target of a growing number of products liability lawsuits in the 1960s and 1970s. Buckling under the weight of its asbestos liability, Manville filed for Chapter 11 protection on August 26, 1982, before Judge Burton Lifland. To avoid the uncertainty of insurance litigation and to fund its plan of reorganization, Manville sought to settle its insurance claims. Manville obtained in excess of $850,000,000 from settlements with its insurers. The U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Debtors' Second Amended and Restated Plan of Reorganization on Dec. 22, 1986. KB US HOLDINGS: Unsecureds to Receive Nothing in Sale Plan ---------------------------------------------------------- KB US Holdings, Inc. and its debtor affiliates filed the Disclosure Statement for the Amended Joint Plan to resolve the affairs of a debtor and distribute the proceeds of the Debtors' estate. The Debtors intend to effectuate the sale transaction on or before the Effective Date, followed by the wind-down of any remaining affairs of the Debtors after the Effective Date. The primary objective of the Plan is to maximize the value of recoveries to all holders of allowed claims and to distribute all property of the Debtors' estates that is or becomes available for distribution. The Plan is designed to accomplish this objective, and the Debtors believe that the Plan does, in fact, accomplish this objective. The Debtors believe that the Plan and transactions contemplated therein are in the best interest of the Debtors' Estates. Therefore, the Debtors seek to confirm the Plan. The Debtors anticipate that the sale transaction will close, the acquired assets will be transferred to Acme Markets Inc., and Acme will pay the sale proceeds to the Debtors. The Plan proposes that on the Effective Date, the Debtors shall fund the Effective Date plan payments from the Debtors' cash on hand, the sale proceeds, and any other liquid assets of the Debtors. In the event that excess cash remains in the Administrative and Priority Claims Reserve, the Wind-Down Trust, or the Professional Fee Reserve after payment of all Allowed Claims to be paid therefrom pursuant to the terms of the Plan, such Excess Cash shall be paid in ratable shares to the Holders of Allowed Class 3 Claims. Class 3 Prepetition Secured Loan Claims will each receive an amount equal to its ratable share of the (i) Sale Proceeds remaining after deducting the Effective Date Cash Amount and payment of the DIP Claims and (ii) Excess Cash. Class 4 General Unsecured Claims will be cancelled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Allowed General Unsecured Claims will not receive any distribution on account of such Allowed General Unsecured Claims. On the Effective Date, all interests in Holdings will be cancelled, released, and extinguished, and will be of no further force or effect. A full-text copy of the Disclosure Statement dated October 30, 2020, for the Amended Plan is available at https://www.pacermonitor.com/view/7NCJU2I/KB_US_Holdings_Inc__nysbke-20-22962__0332.0.pdf?mcid=tGE4TAMA Attorneys for Debtors: Vincent Indelicato Timothy Q. Karcher PROSKAUER ROSE LLP Eleven Times Square New York, New York 10036 Charles A. Dale PROSKAUER ROSE LLP One International Place Boston, MA 02110 Steve Y. Ma PROSKAUER ROSE LLP 2029 Century Park East, Suite 2400 Los Angeles, CA 90067-3010 About KB US Holdings, Inc. KB US Holdings, Inc., is the parent company of King Food Markets and Balducci's Food Lover's Market. Headquartered in Parsippany, N.J., Kings Food Markets has been a specialty and gourmet food market across the East Coast. In 2009, Kings Food Markets acquired specialty gourmet retail grocer, Balducci's Food Lover's Market. As of the petition date, the Debtors operate 35 supermarkets across New York, New Jersey, Connecticut, Virginia, and Maryland. KB US Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22962) on Aug. 23, 2020. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Sean H. Lane oversees the cases. The Debtors tapped Proskauer Rose LLP as their legal counsel, Peter J. Solomon as investment banker, Ankura Consulting Group LLC as financial advisor, and Prime Clerk LLC as claims, noticing and solicitation agent. KIMBALL HILL: Bankruptcy Court Keeps Civil Contempt Ruling v F&D ---------------------------------------------------------------- The U.S. District Court for the Northern District of Illinois vacated, in part, and remanded the bankruptcy court's determination of the Purchaser's Motion for Entry of an Order (I) Enforcing Confirmation Order; (II) Directing Dismissal of State Court Claims; (III) Awarding Damages and (IV) Granting Related Relief filed by TRG Venture Two, LLC in the Chapter 11 case of Kimball Hill, Inc. The District Court asked the bankruptcy court on remand to determine whether the bankruptcy court's prior determination of contempt and damages stands in light of the standards espoused in the subsequently issued opinion of the United States Supreme Court in Taggart v. Lorenzen, 139 S.Ct. 1795 (2019). In the Motion, TRG alleged that the bankruptcy court should find Fidelity and Deposit Company of Maryland in contempt for violation of the Plan confirmation order in Kimbal Hill's case. Having considered the arguments of the parties at the Hearing in light of the Supreme Court's decision in Taggart, and in accordance with the evidence of this case, Bankruptcy Judge Timothy A. Barnes concluded that the bankruptcy court's previous finding of civil contempt and award of damages in relation thereto remains the appropriate result. The dispute over F&D's claims began in April 2013 and has involved multiple claim objections by the Plan Administrator and an appeal by F&D of the court's determinations on F&D's claims. While F&D disputed issues in this case, it at the same time interplead TRG, a purchaser of the assets of Debtors Kimball Hill, Inc. and related debtors, on liability suits brought against F&D in the state courts. F&D's attempt to pursue TRG were unsuccessful and TRG obtained dismissal from the State Court Lawsuits. F&D, however, obtained reversal in part after appealing the dismissals in two cases -- the Elgin and Montgomery Lawsuits. As a result, TRG filed the Motion asking the bankruptcy court to enforce the Confirmation Order and the injunction therein. In taking up the Motion, the court first determined that F&D had acted in contempt of the Confirmation Order (Kimball I). After F&D's request to alter Kimball I was denied and the court had held a trial on August 27, 28 and 29, 2018, and Sept. 18, 2018 on the propriety and quantification of TRG's damages stemming from F&D's contempt, the court determined the measure of damages stemming from such contempt, thereby fully adjudicating all remaining issues raised in the Motion (Kimball II). F&D thereafter appealed Kimball I and II and, following briefing and oral argument in the District Court, the Appellate Opinion was decided. The Appellate Decision remanded the matter to the bankruptcy court on the limited question of whether F&D's contempt rises to the level of the standard articulated in Taggart. In Taggart, the issue before the Supreme Court was what standard applied "when a court may hold a creditor in civil contempt for attempting to collect a debt that a discharge order has immunized from collection." In Taggart, a prepetition creditor of a chapter 7 debtor whose debts had been discharged revived its suit against the debtor after the bankruptcy case was closed. The debtor, in turn, sought a finding of contempt from the bankruptcy court for violation of the statutory injunction of the debtor's discharge. Following a successful appeal of the debtor, the bankruptcy court found the creditor in civil contempt for violating the discharge injunction and awarded damages. The bankruptcy court applied a standard analogous to "strict liability" where civil contempt sanctions are appropriate, regardless of the creditor's beliefs, where the creditor was "aware of the discharge" injunction and intended the actions that violated the discharge. The Court of Appeals for the Ninth Circuit, however, disagreed. Applying instead a subjective standard, the Ninth Circuit concluded that a court cannot hold a creditor in civil contempt if the creditor has a "good faith belief" that the discharge order "does not apply to the creditor's claim." That is so, the Court of Appeals held, "even if the creditor's belief is unreasonable." On certiorari, the Supreme Court considered the effect and application of two Bankruptcy Code provisions, sections 524 and 105. Under section 524, "a discharge order `operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset' a discharged debt." Section 105, in turn, "authorizes the court to 'issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.'" In considering each, the Supreme Court said its conclusions rest on this "longstanding interpretive principle: When a statutory term is 'obviously transplanted from another legal source,' it 'brings the old soil with it.'" As the language in section 524(a)(2) brings with it "old soil" that has governed how courts enforce injunctions, neither section 105(a) nor the Bankruptcy Code would give courts "unlimited authority to hold creditors in civil contempt." The Supreme Court asserted that the Ninth Circuit's standard of a "creditor's good faith belief" in that the discharge order "does not apply to the creditor's claim . . . even if the creditor's belief is unreasonable" is inconsistent with traditional civil contempt principles. This standard, the Court explained, relies on "difficult-to-prove" states of mind and will lead creditors to collect discharged debt on "shaky legal ground." On the other hand, the Supreme Court explained that a standard of "strict liability" employed by the bankruptcy court would lead risk-averse creditors to seek an advance determination in bankruptcy court even where there is only slight doubt as to whether a debt has been discharged, stating that "[b]ecause discharge orders are written in general terms and operate against a complex statutory backdrop, there will often be at least some doubt as to the scope of such orders." The use of the "strict liability" standard would alter who decides whether a debt has been discharged and move litigation from state courts into federal courts, risking additional federal litigation, additional costs and additional delays. This procedure may interfere with the purpose of bankruptcy law, "to secure a prompt and effectual" resolution of bankruptcy cases "within a limited period." As a result, the Supreme Court held that the proper standard in the case before it should be a subjective one, but different than the Ninth Circuit's, stating that "[a] court may hold a creditor in civil contempt for violating a discharge order where there is not a 'fair ground of doubt' as to whether the creditor's conduct might be lawful under the discharge order." This "fair ground of doubt" standard is now referred to as the Taggart standard. According to Judge Barnes, upon assessment of the Taggart standard, the bankruptcy court finds that the evidence, in this case, is sufficient to allow the court to determine whether F&D's violation of the Confirmation Order satisfies the standards for contempt set forth by the Supreme Court in Taggart. The bankruptcy court, therefore, found no cause to reopen evidence in this case in order to determine the Motion under the Taggart standard. Further, the court found that F&D's violation of the injunction set forth in the Joint Plan of Reorganization of Kimball Hill, Inc. and Its Debtor Subsidiaries Pursuant to Chapter 11 of the Bankruptcy Code and memorialized in the Confirmation Order satisfies that standard. As a result, the damages set forth in Kimball II remain the proper determination of the damages stemming from F&D's contempt. This resolves fully the issue on remand and concludes the matter before the court, Judge Barnes ruled. A copy of the Court's Memorandum Decision is available at https://bit.ly/3o5GVNf from Leagle.com. About Kimball Hill Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- was one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues, before filing for bankruptcy. The company operated within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc., and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represented the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007, reflected total assets of $795,473,000 and total debts $631,867,000. Kimball Hill filed a Chapter 11 plan of liquidation on Dec. 2, 2008, which provides for the winding down of the Debtors' business through a liquidation trust. With the support of the official committee of unsecured creditors and the company's senior lenders (estimated to recover 37% to 48% of their claims), the plan was confirmed on March 12, 2009, and took effect 12 days later. U.S. Bank National Association was appointed as trustee for the Liquidation Trust. LCF LABS: Hires Grobstein Teeple as Financial Advisor ----------------------------------------------------- LCF Labs, Inc., seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Grobstein Teeple LLP, as financial advisor to the Debtor. LCF Labs requires Grobstein Teeple to: a. obtain and evaluate financial records; b. evaluate assets and liabilities of the Debtor and Estate; c. evaluate tax issues related to the Debtor and Estate; d. prepare tax returns; e. provide litigation consulting if required; and f. provide accounting and consulting services requested by the Debtor and its counsel. Grobstein Teeple will be paid at these hourly rates: Partners/Principals $315 to $505 Managers/Directors $275 to $350 Staffs/Senior Accountants $150 to $225 Paraprofessionals $85 to $125 Grobstein Teeple will be paid a retainer in the amount of $10,000. Grobstein Teeple will also be reimbursed for reasonable out-of-pocket expenses incurred. Howard B. Grobstein, a partner of Grobstein Teeple, 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. Grobstein Teeple can be reached at: Howard B. Grobstein GROBSTEIN TEEPLE LLP 6300 Canoga, Suite 1500W Woodland Hills, CA 91367 Tel: (816) 532-1020 About LCF Labs LCF Labs Inc., based in Ontario, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-14295) on June 22, 2020. The petition was signed Qusay Al Qaza, CEO. In its petition, the Debtor was estimated to have $1 million to $10 million in assets. The Law Offices Of Neil C. Evans, serves as bankruptcy counsel to the Debtor. LEHMAN BROTHERS: 2nd Cir. Affirms Ruling on Guarantee Claims ------------------------------------------------------------ In the case captioned ATTESTOR LIMITED, DEUTSCHE BANK AG, Appellants, v. LEHMAN BROTHERS HOLDINGS INC., Appellee, Nos. 19-2952-bk, 19-2957-bk (2nd Cir.), Attestor Capital LLP and Deutsche Bank AG appeal from the August 16, 2019 opinion and order of the United States District Court for the Southern District of New York affirming the bankruptcy court's judgment denying certain recovery from Lehman Brothers Holdings Inc. Upon review, the United States Court of Appeals, Second Circuit affirmed the District Court's ruling. On Sept. 15, 2008, LBHI filed for protection from its creditors under Chapter 11 of the United States Bankruptcy Code. On the same day, Lehman Brothers International (Europe), LBHI's subsidiary, began administration proceedings in the United Kingdom pursuant to the English Insolvency Act of 1986. Before filing for bankruptcy, LBHI guaranteed certain obligations of LBIE. Attestor Capital LLP and Deutsche Bank AG hold both (1) contractual claims against LBIE and (2) contractual claims flowing from LBHI's guarantee of the Primary Claims. There is no dispute as to the amount of the Primary and Guarantee Claim. LBIE was deemed solvent enough by April 2014 to pay each Admitted Claim in the full. Pursuant to English law, the value of Appellants' claims were converted from U.S. dollars to British pounds at the exchange rate in effect on the commencement date of the insolvency proceedings. Because the British pound weakened against the U.S. Dollar between 2008, when the claims were initially converted, and 2014, when the currency of the claims were converted back, the ultimate recover by Appellants in U.S. dollars was $12.89 short for every $100 owed by LBIE. The Appellants argued this means the Admitted Claims were paid in full, but the corresponding Guarantee Claims were not. When LBIE found itself with a surplus in the English insolvency proceedings, English courts determined that the creditors were entitled to be paid statutory interest, which "replaces all prior rights, including contractual rights," and that the payment of statutory interest "does not discharge the earlier unpaid debt." LBIE eventually paid out to each creditor no less than an additional 38.43% recovery on their claims against LBIE, meaning for every claim of GBP100, the creditor received at least GBP138.43. LBHI moved for a declaration in U.S. bankruptcy court that the Appellant's Guarantee Claims were deemed satisfied in full under the Plan. Appellants entered objections. The bankruptcy court granted LBHI's motion on the basis that the statutory interest payments are a "other consideration provided on the corresponding Primary Claim" within the meaning of Section 8.13 of the Plan (the "Maximum Distribution Provision"). The district court affirmed the bankruptcy court's decision to grant LBHI's motion. Appellants argued that the lower courts erred in finding that the statutory interest payments were consideration because (1) as used in the Maximum Distribution Provision, "consideration" refers not just to any payments made, but to payments that have been bargained for; and (2) the phrase "provided on" means "paid in satisfaction of." Appellants argued that the Plan's drafters intended "consideration," as used in the Maximum Distribution Provision, to reflect that legal meaning of consideration, that is, a "bargained for gain or advantage to the promisee or a bargained for legal detriment or disadvantage to the promisor." Because the statutory interest payments made in the English insolvency proceeding were not bargained for, but rather were made unilaterally and pursuant to an obligation under English law, Appellants argue, the statutory interest payments cannot constitute "consideration" sufficient to satisfy LBHI's Guarantee Claims. The Second Circuit held that the plain language of the Plan supports the lower courts' determination that the statutory interest constitutes "other consideration . . . provided on" the Primary Claim. The phrase "Distributions or other" in the Maximum Distribution Provision Section comes before "consideration," which implies that a distribution is a form of consideration. "Other consideration" is thus best read to include any payments that are paid on Primary Claims. Case law that speaks of "consideration" in its technical contract law meaning inapposite where, as here, the Plain's plain language indicates that a broader interpretation of the term is intended. Appellants next argued that the statutory interest payments are meant to address the delay in payment in the U.K. insolvency proceedings, and thus are not "provided on" the Primary Claims. They argued "[t]he plain and natural reading of 'consideration provided on the corresponding Primary Claim in the [Maximum Distribution Provision] . . . is 'consideration in satisfaction of the corresponding Primary Claim.'" According to the Second Circuit, as the district court correctly determined, there is nothing in the agreement that suggests "provided on" must be read so narrowly. The lower courts properly concluded that a plain reading of "provided on" would credit payments made, like the statutory interest payments, that are sufficiently related to the Primary Claims. A copy of the Court's Summary Order is available at https://bit.ly/2HgtWHs from Leagle.com. 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 was 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. LIVE WELL: Court Dismisses Pending Bankruptcy Claims ---------------------------------------------------- Holly Barker of Bloomberg Law reports that a proposed class action over allegedly improper payments made by Live Well Financial, Inc. for borrowers' property taxes has been closed indefinitely after the U.S. District Court for the Eastern District of New York dismissed all claims against the only viable defendants. If Live Well emerges from ongoing involuntary bankruptcy proceedings, and plaintiff Margaret Shakespeare can articulate a plausible claim against the reverse mortgage lender, the court will reopen proceedings, Judge Sandra J. Feuerstein said in one of three related orders issued Sept. 15, 2020. Each order adopted findings and recommendations made by Magistrate Judge Anne Y. Shields, without modification, dismissing claims. About Live Well Financial Live Well Financial Inc. was a Richmond, Virginia-based company that originated, serviced, and securitized government-guaranteed reverse mortgages known as Home Equity Conversion Mortgages ("HECMs"). In 2015 to 2019, Live Well Financial engineered a $140 million fraud by inflating the value of its bonds, in what he called a "self-generating money machine." In early May 2019, the company suddenly shut its doors, leaving employees and those it does business with searching for answers. Flagstar Bank, Mirae Asset Securities, and Industrial and Commercial Bank of China Financial Services -- creditors collectively owed more than $130 million -- filed a petition for an involuntary Chapter 7 bankruptcy (Bankr. D. Del. Case No. 19-11317) for Live Well on June 10, 2019. On June 14, 2019, Live Well retained Getzler Henrich & Associates as its financial advisor and Edward Phillips as its chief restructuring officer. Bayard PA is the Debtor's counsel. The creditors group was successful in their bid to push the company into bankruptcy after the company consented to entry of an order for relief under Chapter 7, and Judge Laurie Selber Silverstein entered an order for relief in July 2019. David W. Carickhoff was appointed as Chapter 7 trustee. The Trustee can be reached at: David W. Carickhoff ARCHER & GREINER, P.C. 300 Delaware Ave, Suite 1100 Wilmington, DE 19801 Tel: 302-777-4350 The Trustee's attorneys are: Bryan J Hall, Esq. BLANK ROME LLP 1201 Market Street, Suite 800 Wilmington, DE 19801 Tel: 302-425-6400 Fax: 302-425-6464 E-mail: bhall@blankrome.com - and - Alan Michael Root ARCHER & GREINER P.C. 300 Delaware Avenue, Suite 1100 Wilmington, DE 19801 Tel: 302-356-6623 Fax: 302-428-5109 E-mail: aroot@archerlaw.com - and - Kevin F. Shaw, Esq. ARCHER & GREINER, P.C. 300 Delaware Ave., Suite 1100 Wilmington, DE 19801 Tel: 302-356-6632 Fax: 302-777-4352 E-mail: kshaw@archerlaw.com LONESTAR RESOURCES: Cole, Stroock Represent Noteholders Group ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Cole Schotz P.C. and Stroock & Stroock & Lavan LLP submitted a verified statement to disclose that they are representing the Ad Hoc Noteholders Group in the Chapter 11 cases of Lonestar Resources US Inc., et al. In April 2020, the Ad Hoc Noteholders Group retained Stroock & Stroock & Lavan LLP as counsel in connection with a potential restructuring of the Debtors. The Ad Hoc Noteholders Group subsequently retained Cole Schotz P.C. as co-counsel and local counsel when it was determined that the Debtors would pursue a reorganization in the United States Bankruptcy Court for the Southern District of Texas. Stroock represents only the Ad Hoc Noteholders Group and does not represent or purport to represent any persons or entities other than the Ad Hoc Noteholders Group in connection with the Debtors' chapter 11 cases. Furthermore, as of the filing of this Verified Statement, Cole Schotz represents only the Ad Hoc Noteholders Group and does not represent or purport to represent any persons or entities other than the Ad Hoc Noteholders Group in connection with the Debtors' chapter 11 cases. In addition, as of the date of this Verified Statement, the Ad Hoc Noteholders Group, both collectively and through its individual members, does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. As of Nov. 5, 2020, members of the Ad Hoc Noteholders Group and their disclosable economic interests are: Argonaut Insurance Company 175 E. Houston Street Suite 1300 San Antonio, TX 78205 * $1,000,000.00 principal amount of Senior Notes Argo Group US, Inc. 175 E. Houston Street Suite 1300 San Antonio, TX 78205 * $1,000,000.00 principal amount of Senior Notes Argo Re, Ltd 175 E. Houston Street Suite 1300 San Antonio, TX 78205 * $2,000,000.00 principal amount of Senior Notes Colony Insurance Company 175 E. Houston Street Suite 1300 San Antonio, TX 78205 * 2,370,000.00 principal amount of Senior Notes Rockwood Casualty Insurance Company 175 E. Houston Street Suite 1300 San Antonio, TX 78205 * $1,000,000.00 principal amount of Senior Notes FS Energy and Power Fund c/o FS/EIG Management Company, LLC 600 New Hampshire Ave NW Suite 1200 Washington, DC 20037 * $22,500,000.00 principal amount of Senior Notes Hotchkis and Wiley Capital Management, LLC 601 South Figueroa Street 39th Floor Los Angeles, CA 90017 * $21,245,000.00 principal amount of Senior Notes * 260,000 warrants to purchase Class A Voting common stock of Lonestar Resources US Inc. Kruco, LLC 1340 S. Main Street Suite 300 Grapevine, TX 76051 * $22,250,000.00 principal amount of Senior Notes Loomis, Sayles & Company, L.P. One Financial Center Boston, MA 02110 * $47,273,000.00 principal amount of Senior Notes Manning & Napier Advisors, LLC 290 Woodcliff Drive Fairport, NY 14450 * $7,035,000.00 principal amount of Senior Notes David Matlin P.O. Box 63 New York, NY 10014 * $62,117,000.00 principal amount of Senior Notes MSD Partners, L.P. 645 Fifth Avenue, 21st Floor New York, NY 10022 * $10,000,000.00 principal amount of Senior Notes Neither Stroock nor Cole Schotz owns, nor has Stroock or Cole Schotz ever owned, any claims against or interests in the Debtors except for claims for services rendered to the Ad Hoc Noteholders Group, nor do Stroock or Cole Schotz own any equity securities of the Debtors. However, each of Stroock and Cole Schotz has sought to have its fees and disbursements paid by the Debtors' estates pursuant to title 11 of the United States Code or as otherwise permitted in the Debtors' chapter 11 cases. The information set forth in Exhibit A and herein is intended only to comply with Bankruptcy Rule 2019 and is not intended for any other purpose. Nothing contained in this Verified Statement should be construed as a limitation upon, or waiver of, the rights of any individual member of the Ad Hoc Noteholders Group, including, without limitation, the right to assert, file and/or amend its claims in accordance with applicable law and any orders entered in the Debtors' chapter 11 cases. The Ad Hoc Noteholders Group, through its undersigned counsel, reserves the right to amend and/or supplement this Verified Statement in accordance with the requirements set forth in Bankruptcy Rule 2019 at any time in the future. Counsel for the Ad Hoc Noteholders Group can be reached at: Michael D. Warner, Esq. Ayala A. Hassel, Esq. Benjamin L. Wallen, Esq. COLE SCHOTZ P.C. 301 Commerce Street, Suite 1700 Fort Worth, TX 76102 Telephone: (817) 810-5250 Facsimile: (504) 810-5255 E-mail: mwarner@coleschotz.com ahassel@coleschotz.com bwallen@coleschotz.com - and - STROOCK & STROOCK & LAVAN LLP Kristopher M. Hansen, Esq. Erez E. Gilad, Esq. Jason M. Pierce, Esq. 180 Maiden Lane New York, NY 10038 Telephone: (212) 806-5400 Facsimile: (212)-806-6006 180 Maiden Lane Email: khansen@stroock.com egilad@stroock.com jpierce@stroock.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/2IbaFYI About Lonestar Resources Headquartered in Fort Worth, Texas, Lonestar -- http://www.lonestarresources.com/-- is an independent oil and natural gas company, focused on the development, production, and acquisition of unconventional oil, natural gas liquids, and naturalgas properties in the Eagle Ford Shale in Texas, where the Company has accumulated approximately 72,642 gross (53,831 net) acres in what it believes to be the formation's crude oil and condensate windows, as of Dec. 31, 2019. Lonestar Resources reported a net loss attributable to common stockholders of $111.56 million for the year ended Dec. 31, 2019, compared to net income attributable to common stockholders of $11.53 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $616.35 million in total assets, $586.73 million in total current liabilities, $19.28 million in total long-term liabilities, and $10.34 million in total stockholders' equity. Lonestar Resources US Inc. and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34805) on Sept. 30, 2020. The Hon. David R. Jones is the case judge. Latham & Watkins LLP and Hunton Andrews Kurth LLP serves the Debtors' counsel; Intrepid Partners LLC, and Rothschild & Co US Inc. are the investment bankers; and AlixPartners, LLP, is the financial advisor. Prime Clerk LLC is the claims agent. MALLINCKRODT PLC: Bielli, et al. Update List of NAS Committee ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Bielli & Klauder, LLC, Martzell, Bickford & Centola and Law Offices of Kent Harrison Robbins, P.A. submitted an amended verified statement to disclose an updated list of the Ad Hoc Committee of NAS Children that they are representing in the Chapter 11 cases of Mallinckrodt PLC, et al. In and about July 2020 the NAS Committee was formed and, thereafter, retained counsel, Bielli & Klauder LLC, to represent the NAS Committee in the Debtor's chapter 11 cases, in September 2020. On October 12, 2020, the Debtor filed the above-captioned chapter 11 case. Since the Filing Date, B&K has provided bankruptcy related advice to the undersigned counsel-members to the NAS Committee. B&K represents only the NAS Committee. B&K does not represent nor purport to represent any of the entities or individuals in connection with these chapter 11 cases. B&K does not represent the NAS Committee as a "committee" and does not represent the interests of, and is not a fiduciary for, any creditor, party in interest, or other entity that has not signed a retention agreement with B&K. In addition, the NAS Committee does not represent nor purport to represent any other individuals or entities in connection with the above-captioned chapter 11 case. As of Nov. 3, 2020, members of the NAS Committee and their disclosable economic interests are: L.E. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring K.L. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring T.H. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring G.T. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring M.B. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring B.O. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring C.K. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring A.D. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring A.F. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring T.F. c/o Donald E. Creadore The Creadore Law Firm, P.C. 450 Seventh Avenue - Suite 1408 New York, NY 10123 c/o Scott R. Bickford, Esq. Martzell, Bickford & Centola 338 Lafayette Street New Orleans, LA 70130 c/o Kent Harrison Robbins, Esq. 242 NE 27th Street Miami FL 33137-4522 * Unsecured; Unliquidated Claim for personal injuries; economic loss; and medical monitoring Nothing contained in this Verified Statement should be construed as a limitation upon, or waiver of, any rights of any member of the NAS Committee to assert, file and/or amend their claims in accordance with applicable law and any orders entered in these chapter 11 cases. The NAS Committee reserves the right to amend and/or supplement this Verified Statement in accordance with Bankruptcy Rule 2019. The Firm can be reached at: BIELLI & KLAUDER, LLC David M. Klauder, Esq. 1204 N. King Street Wilmington, DE 19801 Telephone: (302) 803-4600 Email: dklauder@bk-legal.com MARTZELL, BICKFORD & CENTOLA Scott R. Bickford, Esq. Spencer R. Doody, Esq. 338 Lafayette Street New Orleans, LA 70130 Telephone: 504-581-9065 Facsimile: 504-581-7635 Email: sbickford@mbfirm.com srd@mbfirm.com LAW OFFICES OF KENT HARRISON ROBBINS, P.A. 242 Northeast 27th Street Miami, FL 33137 Telephone: (305) 532-0500 Facsimile: (305) 531-0150 Email: khr@khrlawoffices.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/36dAS0R and https://bit.ly/35aNuXr 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.com/for 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. MALLINCKRODT PLC: Law Firm of Russell Represents Utility Companies ------------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the Law Firm of Russell R. Johnson III submitted a verified statement that it is representing the utility companies in the Chapter 11 cases of Mallinckrodt PLC, et al. The names and addresses of the Utilities represented by the Firm are: a. Constellation NewEnergy, Inc. Attn: Mark J. Packel Assistant General Counsel 2301 Market Street, 23rd Floor Philadelphia, PA 19103 b. Jersey Central Power & Light Company Attn: Kathy M. Hofacre FirstEnergy Corp. 76 S. Main St., A-GO-15 Akron, OH 44308 c. New York State Electric and Gas Corporation Attn: Kelly Potter James A. Carrigg Center Bankruptcy Department 18 Link Drive Binghamton, NY 13904 The nature and the amount of claims of the Utilities, and the times of acquisition thereof are as follows: a. The following Utilities have unsecured claims against the above-referenced Debtors arising from prepetition utility usage: Constellation NewEnergy, Inc., Jersey Central Power & Light Company and New York State Electric and Gas Corporation. b. For more information regarding the claims and interests of the Utilities in these jointly-administered cases, refer to the Objection of Constellation NewEnergy, Inc., Jersey Central Power & Light Company and New York State Electric and Gas Corporation To the Motion of Debtors For Interim and Final Orders (A) Prohibiting Utilities From Altering, Refusing, or Discontinuing Service, (B) Approving the Debtors' Proposed Form of Adequate Assurance of Payment To Utilities, and (C) Establishing Procedures For Resolving Requests For Additional Adequate Assurance filed in the above-captioned, jointly-administered, bankruptcy cases. The Law Firm of Russell R. Johnson III, PLC was retained to represent the foregoing Utilities in October 2020. The circumstances and terms and conditions of employment of the Firm by the Companies is protected by the attorney-client privilege and attorney work product doctrine. The Firm can be reached at: Russell R. Johnson III, Esq. LAW FIRM OF RUSSELL R. JOHNSON III, PLC 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Telephone: (804) 749-8861 Facsimile: (804) 749-8862 E-mail: russell@russelljohnsonlawfirm.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/38iTWgJ 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. MARKHAM, IL: S&P Affirms 'B' GO Bond Rating; Outlook Stable ----------------------------------------------------------- S&P Global Ratings revised its outlook to stable from negative and affirmed its 'B' rating on Markham, Ill.'s outstanding general obligation (GO) bonds. "The outlook revision to stable reflects our view that the city's history of general fund deficits has come to an end due to management's efforts to stabilize the budget," said S&P Global Ratings credit analyst Helen Samuelson. "We further expect that fiscal 2020 could potentially show a surplus," Ms. Samuelson added. S&P's rating incorporates its view regarding the social risk posed by the COVID-19 pandemic, which could have adverse impacts on the city's various revenue streams. It views Markham's governance and environmental risks as being generally in line with those of its peers. Markham has an estimated population of 12,523 and is located about 24 miles south of Chicago. MCQUILLEN PLACE: C&RI Fails in Bid to Halt Property Sale -------------------------------------------------------- In the case captioned CORNICE & ROSE INTERNATIONAL, LLC, Appellant, v. CHARLES L. SMITH; FIRST SECURITY BANK & TRUST CO.; FOUR KEYS, LLC; CITY OF CHARLES CITY; and IOWA ECONOMIC DEVELOPMENT AUTHORITY, Appellees, No. 20-CV-2040-CJW-KEM (N.D. Iowa), Cornice & Rose International, LLC sought a stay or injunction of McQuillen Place Company, LLC's sale of a partially constructed building in Charles City, Floyd County, Iowa, which was sold to First Security Bank & Trust Company. District Judge C. J. Williams denied C&RI's motion. Judge Williams held that the Appellant did not satisfy the injunction requirements established in Federal Rule of Bankruptcy Procedure 8007. The relevant stay factors also did not favor granting the motion. This matter arose out an appeal from the United States Bankruptcy Court for the Northern District of Iowa's April 9, 2020 Order Authorizing and Approving Sale Pursuant to section 363 of the Bankruptcy Code and Providing Related Relief, and the Bankruptcy Court's May 15, 2020 Proceeding Memo and Order denying the Motions to Reconsider and Motion for Partial Withdrawal of the Reference. McQuillen Place Company, LLC filed for Chapter 11 Bankruptcy in April 2019 in the Bankruptcy Court. Charles Thomson and James Gray own McQuillen Place. Before it sought Chapter 11 bankruptcy protection, McQuillen Place was constructing a building in Charles City, Iowa. Appellant is the architectural firm hired to design the building. Gray owns the appellant. When it filed for bankruptcy, McQuillen Place owned a parcel of real estate and a partially constructed building in Charles City, Floyd County, Iowa. On March 23, 2020, the bankruptcy trustee, Charles L. Smith moved for the Bankruptcy Court to approve a sale of the Charles City property to First Security Bank & Trust Company. In his motion, the Trustee asserted that First Security had a perfected mortgage against the Charles City property. The Trustee admitted he was aware that the appellant might assert an interest in some of the personal property located within the building on the Charles City property and also claim it was the licensor of design drawings used by McQuillan Place to construct the building. The Trustee, however, asserted that he solicited bids for the property from various interested parties and received two bids in response. First Security submitted the highest and best offer. On April 7, 2020, the appellant objected to the Trustee's motion for sale of the property. On April 9, 2020, the Bankruptcy Court granted the Trustee's motion and approved the sale under 11 U.S.C. Section 363. The Bankruptcy Court's order overruled any remaining objections. The order also found the sale was contemplated and undertaken without collusion and in good faith and thus, Bankruptcy Code Section 363(m) applied. The Court also required $25,000 from the sale be set aside to satisfy any outstanding claims asserted against personal property located within the building that could be sold as part of the sale. On April 23, 2020, the appellant filed a motion in the Bankruptcy Court asking the Bankruptcy Court to reconsider its order authorizing the sale. On the same day, the appellant filed a Motion for Partial Withdrawal of the Reference in which the appellant asked the Bankruptcy Court to withdraw portions of the sale order relating to its copyright. The Appellant also filed a motion for a stay pending the determination of the Motion for Partial Withdrawal of the Reference. The Bankruptcy Court denied each of these motions. On May 29, 2020, the appellant filed a notice of appeal of the order authorizing the sale. On July 30, 2020, a Thursday, the appellant filed its Motion for a Stay or Injunction of Sale of Personal Property which concerned an auction scheduled for the following Monday, August 3, 2020. Under Federal Rule of Bankruptcy Procedure 8007 "a party must move first in the bankruptcy court for . . . an order suspending, modifying, restoring, or granting an injunction while an appeal is pending[.]" A motion for an injunction, while an appeal is pending, requires the motion first be made in the Bankruptcy Court or include a showing why it was impracticable to file in the Bankruptcy Court. The motion must also be supported by affidavits or sworn statements and the movant must give reasonable notice of the motion to all parties. According to Judge Williams, an appellant seeking a stay must also satisfy several other factors. A party seeking a stay pending appeal must demonstrate that it is likely to succeed on the merits, that it will suffer irreparable injury unless the stay is granted, that no substantive harm will come to the other interested parties, and that the stay will do no harm to the public interest. Judge Williams found that the appellant did not satisfy the requirements established under Rule 8007. First, there is no evidence that the appellant "move[d] first in the bankruptcy court" for the relief sought. The Appellant did not indicate anywhere in its motion that it has already moved for relief in the Bankruptcy Court and there is nothing on the docket that shows the appellant moved for such relief. Second, the motion is not supported by affidavits or sworn statements supporting facts subject to dispute. Third, there is no evidence that the appellant provided each of the parties with reasonable notice of the motion. Thus, the appellant's motion failed to satisfy the procedural requirements established by the Federal Rules of Bankruptcy Procedure. With regard to the four stay factors, Judge Williams found that there is not a threat of irreparable harm because there is an adequate remedy for any sale of the personal property, namely the $25,000 set aside for this purpose, and there is no evidence the value of the property will exceed the $25,000. The Court has also found the appellant is unlikely to succeed on the merits of its claim to return the personal property. Further, the Court has found the public interest favors resolving these claims quickly so necessary apartment construction can continue. Thus, these three factors weigh in favor of denying the motion. As to the fourth factor, the Court found the balance of harms to not be a significant factor that weighs heavily for either side here. Having found the balance of all factors does not favor granting the motion, the Court found an injunction or stay would be unnecessary and improper. A copy of the Court's Order is available at https://bit.ly/2HnIkxx from Leagle.com. About McQuillen Place Company McQuillen Place Company, LLC, was formed in 2013 to develop the McQuillen Place Development in Charles City, Iowa. Due to the rural character of the Charles City residential and commercial real estate market, development of the project was contingent on significant state, Federal and local economic assistance. When McQuillen and its lenders were unable to reach an agreement to provide for the completion of construction, a foreclosure action was commenced against McQuillen's interest in the development in March 2018. McQuillen sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Iowa Case No. 19-00507) on April 25, 2019. In the petition signed by its member, Charles M. Thomson, the company disclosed assets ranging between $1 million to $10 million and liabilities of the same range. The Hon. Thad J. Collins is assigned to the case. The Law Office of Charles M. Thomson serves as its counsel. MD AMERICA ENERGY: Parkins Lee Represents Waller, Wilson -------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Parkins Lee & Rubio LLP submitted a verified statement that it is representing the following parties in the Chapter 11 cases of MD America Energy, LLC, et al.: a. Eric Waller b. Wilson Family Heirs, LLC As of Nov. 2, 2020, the parties listed and their disclosable economic interests are: Eric Waller c/o Parkins Lee & Rubio, LLP * Eric Waller is a creditor with claims against the MD America Energy, LLC and MD America Energy Holdings, LLC arising from an employment agreement and other contracts with one or more Debtors. Mr. Waller is investigating whether he has any other claims against any of the Debtors or other parties-in-interest in these chapter 11 cases. Eric Waller also owns 3,000 series B Units in MD Energy, LLC. Finally, Mr. Waller is the 100% member owner of Wilson Family Heirs, LLC, and has an indirect interest in the claims and property interests asserted by such entity. * Eric Waller currently believes that his claim at is least $4,611,575.34, of which $13,650.00 is entitled to priority under 11 U.S.C. § 507(a)(4). * Eric Waller acquired his direct economic interests pursuant to the Amended Employment Agreement dated, January 1, 2017, and the claim became fixed and determined on or about October 10, 2020. Wilson Family Heirs, LLC * Wilson Family Heirs, LLC is the grantee under that certain Surface Use Agreement, dated February 15, 2019, as may be amended. * WFH asserts that it has an easement and rights pursuant to real covenants granted by the Surface Use Agreement. * WFH acquired its interests on or about February 15, 2019. Eric Waller arranged for representation by PLR to pursue his individual interests in this case. Upon review of the relevant pleadings and information, the representation was expanded to include Wilson Family Heirs, LLC, in which Waller owns 100% of the equity interests. Counsel to Eric Waller and Wilson Family Heirs, LLC can be reached at: PARKINS LEE & RUBIO LLP Kyung S. Lee PLLC, Esq. R. J. Shannon, Esq. Pennzoil Place 700 Milam Street, Suite 1300 Houston, TX 77002 Tel: 713-715-1660 Email: klee@parkinslee.com rshannon@parkinslee.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/38knE5e About MD America MD America is a Texas based oil and gas operating company engaged in the acquisition, development, exploitation and production of crude oil and natural gas properties in East Texas. Assets currently consist of approximately 71,000 net acres with over 300 drilled and operated wells. MD America Energy, LLC, which is the principal operating entity, currently owns approximately 64,683 net acres with 256 operated wells, focused in the Brazos Valley in East Texas and over 100 miles of low-pressure natural gas gathering lines owned and operated by MD America's subsidiary, MD America Pipeline LLC. For more information, visit https://www.mdae.com/ On Oct. 12, 2020, MD America Energy, LLC, and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 20-34966) to seek confirmation of their prepackaged Chapter 11 plan. The Company is being advised by the law firm of Porter Hedges LLP, and Paladin Management Group, as CRO, and FTI Consulting, Inc., as financial advisor. Prime Clerk LLC is the claims agent. MD AMERICA ENERGY: Vinson & Elkins Represents Term Lender Group --------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Vinson & Elkins LLP submitted a verified statement to disclose that it is representing the Ad Hoc Group of Prepetition Term Loan Lenders in the Chapter 11 cases of MD America Energy, LLC, et al. On or about June 1, 2020, the Ad Hoc Group of Prepetition Term Loan Lenders retained Vinson & Elkins LLP as counsel in connection with a potential restructuring of the Debtors. The Ad Hoc Group of Prepetition Term Loan Lenders includes all Lenders under the Prepetition Credit Agreement. V&E represents only the Ad Hoc Group of Prepetition Term Loan Lenders in connection with the Debtors' chapter 11 cases and does not represent or purport to represent any persons or entities other than the Ad Hoc Group of Prepetition Term Loan Lenders in connection with the Debtors' chapter 11 cases. Furthermore, as of the filing of this Verified Statement, the Ad Hoc Group of Prepetition Term Loan Lenders, both collectively and through its individual members, does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. As of Oct. 12, 2020, members of the Ad Hoc Group of Prepetition Term Loan Lenders and their disclosable economic interests are: Term Loan --------- MC Credit Fund I LP $16,941,571.46 2200 Atlantic Street Suite 501 Stamford, CT 06902 MC Credit Fund IA (Cayman Master) LP $3,682,098.81 2200 Atlantic Street Suite 501 Stamford, CT 06902 MC Credit Fund II LP $8,838,715.83 2200 Atlantic Street Suite 501 Stamford, CT 06902 MC Credit Fund III (Delaware) LP $3,171,354.89 2200 Atlantic Street Suite 501 Stamford, CT 06902 MC Credit Fund III-U (Delaware) LP $2,039,550.31 2200 Atlantic Street Suite 501 Stamford, CT 06902 MC Credit Fund III (Cayman Master) LP $3,627,810.63 2200 Atlantic Street Suite 501 Stamford, CT 06902 Sixth Street Specialty Lending, Inc. $17,677,431.66 2100 McKinney Avenue Dallas, TX 75201 TAO Talents, LLC $29,462,386.10 2100 McKinney Avenue Dallas, TX 75201 The Prudential Insurance $3,240,862.47 Company of America 655 Broad Street, 16th Floor Newark, NJ 07102 Prudential Legacy Insurance $17,382,807.80 Company of New Jersey 655 Broad Street, 16th Floor Newark, NJ 07102 Arena Limited SPV, LLC $11,784,954.44 405 Lexington Avenue, 59th Floor New York, NY 10174 The information set forth in Exhibit A and herein is intended only to comply with Bankruptcy Rule 2019 and is not intended for any other purpose. Nothing contained in this Verified Statement should be construed as a limitation upon, or waiver of the right of any individual member of the Ad Hoc Group of Prepetition Term Loan Lenders, including, without limitation, the right to assert, file, and/or amend its claims in accordance with applicable law and any orders entered in the Debtors' chapter 11 cases. The Ad Hoc Group of Prepetition Term Loan Lenders, through its undersigned counsel, reserves the right to amend and/or supplement this Verified Statement in accordance with the requirements set forth in Bankruptcy Rule 2019 at any time in the future. Counsel for the Ad Hoc Group of Prepetition Term Loan Lenders be reached at: Harry A. Perrin, Esq. VINSON & ELKINS LLP 1001 Fannin Street, Suite 2500 Houston, TX 77002 Tel: (713) 758-2222 Fax: (713) 758-2346 E-mail: hperrin@velaw.com - and - David S. Meyer, Esq. Steven M. Abramowitz, Esq. Steven Zundell, Esq. VINSON & ELKINS LLP The Grace Building 1114 Avenue of the Americas, 32nd Floor New York, NY 10036-7708 Tel: (212) 237-0000 Fax: (212) 237-0100 E-mail: dmeyer@velaw.com sabramowitz@velaw.com szundell@velaw.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/356jdZz About MD America MD America is a Texas based oil and gas operating company engaged in the acquisition, development, exploitation and production of crude oil and natural gas properties in East Texas. Assets currently consist of approximately 71,000 net acres with over 300 drilled and operated wells. MD America Energy, LLC, which is the principal operating entity, currently owns approximately 64,683 net acres with 256 operated wells, focused in the Brazos Valley in East Texas and over 100 miles of low-pressure natural gas gathering lines owned and operated by MD America's subsidiary, MD America Pipeline LLC. For more information, visit https://www.mdae.com/ On Oct. 12, 2020, MD America Energy, LLC, and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 20-34966) to seek confirmation of their prepackaged Chapter 11 plan. The Company is being advised by the law firm of Porter Hedges LLP, and Paladin Management Group, as CRO, and FTI Consulting, Inc., as financial advisor. Prime Clerk LLC is the claims agent. MICHAEL K. HERRON: $240K Sale of Pittsburgh Property Confirmed -------------------------------------------------------------- Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania confirmed Michael K. Herron's sale of the real property located at 3700 Orpwood Street, Pittsburgh, Pennsylvania to Oakland Planning and Development Corp. for $240,000. The Sale Hearing was held on Oct. 8, 2020. The sale is free and divested of liens and claims, with all such liens and claims to attach to the proceeds of sale. The expenses/costs will immediately be paid at the time of closing. Failure of the Closing Agent to timely make and forward the disbursements required by the Order will subject the closing agent to monetary sanctions, including among other things, a fine or the imposition of damages, after notice and hearing, for failure to comply with the terms of the Order. Except as to the distribution specifically authorized in the Order, all remaining funds will be held by the Counsel for the Movant pending further Order of the Court after notice and hearing. The expenses/costs are: (1) The following lien(s)/claim(s) and amounts: the first mortgage lien claim of Wells Fargo Bank, N.A. in the amount of $165,328 (good through Nov. 27, 2020, with interest thereafter accruing at $15 per diem); (2) Delinquent real estate taxes, if any; (3) Current real estate taxes, pro-rated to the date of closing; (4) The costs of local newspaper advertising in the amount of $430 reimbursed to the Debtor's counsel, Robleto Kuruce, PLLC; (5) The costs of legal journal advertising in the amount of $248 reimbursed to the Debtor's counsel, Robleto Kuruce, PLLC; (6) The Court approved realtor commission in the amount of $7,200; (7) Attorney fees/administrative expenses in the amount of $35,000, to be held in trust by the Counsel for the Movant pending a later Order of the Court's authorizing such attorney fees/administrative expenses; (8) The balance of funds realized from the within sale will be held by the Attorney for the Movant/Plaintiff until further Order of Court, after notice and hearing; and (9) Other: The relevant transfer taxes. Within seven days of the date of the Order, the Movant/Plaintiff will serve a copy of the within Order on each Respondent/Defendant (i.e., each party against whom relief is sought) and its attorney of record, if any, upon any attorney or party who answered the motion or appeared at the hearing, the attorney for the debtor, the Closing Agent, the Purchaser, and the attorney for the Purchaser, if any, and file a certificate of service. The Closing will occur within 30 days of the Order. Within seven days following closing, the Movant/Plaintiff will file a Report of Sale which will include a copy of the HUD-1 or other Settlement Statement. Michael K. Herron sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 19-24527) on Nov. 21, 2019. The Debtor tapped Aurelius P. Robleto, Esq., at Robleto Kuruce, PLLC, as counsel. MICHAEL K. HERRON: $400K Sale of Pittsburgh Property Confirmed -------------------------------------------------------------- Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania confirmed Michael K. Herron's sale of the real property located at 340 Roup Avenue Pittsburgh, Pennsylvania to Lin Yuan Sophia Wang for $400,000. The Sale Hearing was held on Oct. 8, 2020. The sale is free and divested of liens and claims, with all such liens and claims to attach to the proceeds of sale. The expenses/costs will immediately be paid at the time of closing. Failure of the Closing Agent to timely make and forward the disbursements required by the Order will subject the closing agent to monetary sanctions, including among other things, a fine or the imposition of damages, after notice and hearing, for failure to comply with the terms of the Order. Except as to the distribution specifically authorized in the Order, all remaining funds will be held by the Counsel for the Movant pending further Order of the Court after notice and hearing. The expenses/costs are: (1) The following lien(s)/claim(s) and amounts: the first mortgage lien claim of Wells Fargo Bank, N.A. in the amount of $213,109 (good through Nov. 4, 2020, with interest thereafter accruing at $18 per diem); (2) Delinquent real estate taxes, if any; (3) Current real estate taxes, pro-rated to the date of closing; (4) The costs of local newspaper advertising in the amount of $490 reimbursed to the Debtor's counsel, Robleto Kuruce, PLLC; (5) The costs of legal journal advertising in the amount of $276 reimbursed to the Debtor's counsel, Robleto Kuruce, PLLC; (6) The Court approved realtor commission in the amount of $12,000; (7) Attorney fees/administrative expenses in the amount of $35,000, to be held in trust by the Counsel for the Movant pending a later Order of the Court's authorizing such attorney fees/administrative expenses; (8) The balance of funds realized from the within sale will be held by the Attorney for the Movant/Plaintiff until further Order of Court, after notice and hearing; and (9) Other: The relevant transfer taxes. Within seven days of the date of the Order, the Movant/Plaintiff will serve a copy of the within Order on each Respondent/Defendant (i.e., each party against whom relief is sought) and its attorney of record, if any, upon any attorney or party who answered the motion or appeared at the hearing, the attorney for the debtor, the Closing Agent, the Purchaser, and the attorney for the Purchaser, if any, and file a certificate of service. The Closing will occur within 30 days of the Order. Within seven days following closing, the Movant/Plaintiff will file a Report of Sale which will include a copy of the HUD-1 or other Settlement Statement. Michael K. Herron sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 19-24527) on Nov. 21, 2019. The Debtor tapped Aurelius P. Robleto, Esq., at Robleto Kuruce, PLLC, as counsel. NATIONAL CINEMEDIA: S&P Lowers ICR to 'CCC+'; Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based theatre advertising company National CineMedia Inc. (NCM) to 'CCC+' from 'B'. The coronavirus pandemic will continue to affect theater attendance and consumer behavior well into 2021. S&P said, "We anticipate U.S. cinema attendance will not begin to recover until 2021, which is later than we had previously expected. This is due to the ongoing pandemic, continued delays of film releases by major studios, and the risk that global authorities could impose stricter lockdown measures to limit local resurgences of the virus. We think cinema attendance will remain constrained by consumers' health and safety concerns and social-distancing measures until an effective treatment or vaccine becomes widely available--which could be around mid-2021--and will not recover to 2019 levels (on a per-film basis) until 2022. Large tentpole films likely won't be released until a vaccine or treatment is readily available and films will likely continue to be delayed until then." NCM's revenue is directly tied to theater attendance as it is paid by advertisers based on the number of impressions it can deliver. S&P said, "Without a substantial improvement in attendance, we expect the company will continue to generate modestly negative EBITDA and cash flow. We expect NCM's leverage will remain elevated in the double-digits in 2020 and 2021 and will not decline back below 5x until revenue returns to roughly 85%-90% of 2019 levels. We do not expect this to happen in 2021 and believe there is now a considerable risk that revenue will not recover to that level by 2022 if audiences are permanently down or if advertisers are unwilling to pay pre-pandemic rates for in-theater advertising." NCM has enough liquidity to withstand a low attendance environment through all of 2021, but its liquidity could become constrained by its covenants. The company obtained a waiver on both its 4.5x net senior secured leverage covenant and its 6.25x total net leverage covenant that provides relief through the quarter ended July 1, 2021. As part of the waiver agreement, NCM LLC (the operating subsidiary) will need to maintain a minimum of $55 million of unencumbered cash on its balance sheet. It also will not be able to distribute any of its cash flows to its parent (National CineMedia Inc.) or founding members (including Cinemark and Cineworld) unless it meets minimum EBITDA thresholds. The company had about $137.5 million of cash at NCM LLC as of Oct. 30, 2020, and roughly $7.5 million in remaining accounts receivables that can be collected. The company's cost structure is mostly variable, and it has reduced its fixed costs 50% since theaters closed in March. Including debt service, the company's cash burn will be roughly $11 million per month until theater attendance materially improves from current levels. S&P said, "We expect the company to have enough cash even if theater attendance remains weak through mid-2021 before violating the $55 million minimum liquidity requirement. Additionally, we believe there is a risk that when the waiver expires, the company will not be able to maintain compliance with its covenants because they are calculated on a trailing 12-month basis. We believe the company will need to obtain an extension to its covenant waiver to maintain enough liquidity until theater attendance returns, and to fund its working capital needs when revenue growth and costs return but there is a delay in collecting receivables from its advertisers." Potential exhibitor bankruptcies present an overarching risk to NCM's business model. S&P said, "With AMC Entertainment Holdings Inc. ('CCC-/Negative') and Cineworld Group plc ('CCC-/Negative') facing considerable financial stress, we believe it is likely that one or potentially two of NCM's three founding members could seek bankruptcy protection over the next 12 months. Of the two, we believe AMC is more at risk of a bankruptcy. This presents a significant threat to NCM's operating model because AMC or any of the founding members could reject or restructure the exhibitor service agreement (ESA) between the three founding members and NCM LLC in a bankruptcy. We believe that there are incentives for AMC to do this as it was forced to sell its ownership of NCM LLC as part of its acquisition of Carmike Cinemas. AMC no longer participates in cash distributions from NCM LLC, which means the theater access fees it receives are less attractive than they were when AMC held equity. AMC also has to pay NCM LLC compensation for its theaters that are served by Screenvision LLC. At a minimum, we believe AMC would seek to renegotiate theater access fees and its requirement to compensate NCM LLC for theaters outside its network." In a worst-case scenario, AMC could leave NCM and move its theaters fully to Screenvision, where it maintains a small ownership stake. Either scenario could result in significant impairments to NCM's EBITDA and cash flow and keep leverage elevated even when attendance returns to theaters." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety factors The negative outlook reflects the uncertainty around a recovery in theater attendance and the potential that a slower recovery in theater attendance, or a more prolonged impact on national advertising than S&P currently expects, could cause the company's cash balance to deteriorate over the next 12 months. S&P could lower its rating under any of the following scenarios: -- If S&P expects theater attendance will remain weak into the second half of 2021 such that NCM LLC's liquidity sources decline below $55 million -- If S&P does not believe the company will obtain an extension of its covenant waiver beyond July 1, 2021. -- If AMC or Regal file for bankruptcy and S&P believes a restructuring of the ESA is likely within the next 12 months. -- If S&P expects NCM to pursue a distressed debt exchange or restructuring. S&P could revise its outlook to stable if: -- Theater attendance returns in early 2021 to a level that allows NCM to return to positive free cash flow. -- S&P believes the company has no near-term liquidity or covenant risks. -- S&P believes neither AMC or Regal will file for bankruptcy, or that the ESA will not be altered as a result of a bankruptcy. NEFFGEN FAMILY: Nov. 17 Hearing on Liquidation of Inventory ----------------------------------------------------------- Judge Helen E. Burris of the U.S. Bankruptcy Court for the District of South Carolina continued the hearing on Neffgen Family Stores, LLC's proposed employment of Terry Howe & Associates as its Liquidator to liquidate the inventory and other assets in the Hendersonville, North Carolina store and the warehouses on Bramlett Road and Rutherford Road in South Carolina, to Nov. 17, 2020 at 10:30 a.m. The Debtor owns a number of Family Stores that contain approximately 1.3 million items of inventory. Both prior to the filing of its bankruptcy petition, and subsequent thereto, it closed certain of its stores, and moved all assets from those closed stores to a warehouse and/or stores that remained open. It decided to maintain the following stores, which remained open: Greenville, Spartanburg, and Duncan, South Carolina, plus a store in Hendersonville, North Carolina. It also decided to close one of two warehouses in Greenville, South Carolina, and maintain the larger warehouse in that city. The Debtor proposed hire Terry Howe to liquidate the inventory and other assets in the Hendersonville, North Carolina store and the warehouses on Bramlett Road and Rutherford Road in South Carolina. It has filed a separate Application to Employ Terry Howe & Associates as professionals. About Neffgen Family Stores Neffgen Family Stores, LLC is a seller of home goods with various locations in upstate South Carolina. Neffgen Family Stores sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. S.C. Case No. 20-00571) on Feb. 1, 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 Helen E. Burris oversees the case. The Debtor is represented by The Cooper Law Firm. NEPHROS INC: Appoints Dan D'Agostino as CFO ------------------------------------------- Nephros, Inc., has appointed Dan D'Agostino as the Company's chief financial officer, effective Nov. 6, 2020. "We have known Dan for years, and are very pleased to announce his addition to the team," said Andy Astor, chief executive officer of Nephros. "Dan brings deep experience and knowledge of the microcap life sciences environment, having served as CFO in a microcap firm and in other senior roles at several investment banks. Dan also provided financial advice to Nephros during the 2018 capital raise for our subsidiary, Specialty Renal Products ("SRP")." "I have been impressed with Nephros's turnaround over the past few years and am excited to join the team," said Dan D'Agostino. "With nearly four years of continuous revenue growth prior to the COVID-19 pandemic, I believe Nephros is strongly positioned to return to high growth rates in 2021, and I look forward to help drive the company forward." Dan D'Agostino brings 30 years of financial leadership to Nephros, with experience at firms including Synergy Pharmaceuticals, where he served as CFO, as well as R.W. Pressprich, AmeriTech Advisors, ThinkEquity, Punk Ziegel, Gerard Klauer Mattison, Deutsche Bank, and Wasserstein Perella. About Nephros Inc. River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which are generally classified as ultrafilters, are primarily used in hospitals for the prevention of infection from water-borne pathogens, such as legionella and pseudomonas, and in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate. Nephros reported a net loss of $3.18 million for the year ended Dec. 31, 2019, compared to a net loss of $3.33 million for the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $15.24 million in total assets, $3.80 million in total liabilities, and $11.44 million in total stockholders' equity. NEPHROS INC: Incurs $1 Million Net Loss in Third Quarter -------------------------------------------------------- Nephros, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.01 million on $2.12 million of total net revenues for the three months ended Sept. 30, 2020, compared to a net loss of $744,000 on $3.09 million of total net revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $3.77 million on $6.23 million of total net revenues compared to a net loss of $3.03 million on $7.17 million of total net revenues for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $15.24 million in total assets, $3.80 million in total liabilities, and $11.44 million in total stockholders' equity. Adjusted EBITDA for the quarter ended Sept. 30, 2020 was ($1.0 million), compared with ($0.2 million) in 2019. Cost of goods sold for the quarter ended Sept. 30, 2020 was $0.9 million, compared with $1.3 million in 2019, a decrease of 30%. Gross margins for the quarter ended Sept. 30, 2020 were 58%, compared with 59% in 2019. Management expects future gross margins to continue in the range of 55% to 60%. Research and development expenses for the quarter ended Sept. 30, 2020 were $0.75 million, compared with $0.78 million in 2019, a decrease of 3%. Depreciation and amortization expenses for the quarter ended Sept. 30, 2020 were approximately $49,000, compared with approximately $44,000 in 2019, an increase of 11%. Selling, general and administrative expenses for the quarter ended Sept. 30, 2020 were $1.5 million, compared with $1.8 million in 2019, a decrease of 14%. As of Sept. 30, 2020, Nephros had cash and cash equivalents of $5.2 million. On October 16, Nephros raised an additional $5 million from existing shareholders at $6.00 per share. "We are pleased that third quarter performance was significantly stronger than the second quarter, with sequential growth at 34%," said Mr. Astor. "While our year-over-year revenues declined due to the COVID-19 pandemic, our recurring revenues remained strong, in spite of interruptions in new customer acquisitions and in emergency response revenues. We continue to believe that strong recurring revenues and high customer retention rates are two of the best indicators of the underlying strength of our business." Mr. Astor continued, "During the remainder of 2020, we will stay focused on expanding our commercial filtration business, further productizing our pathogen detection products, including PluraPath, DialyPath, and SequaPath, and assisting SRP in submitting its second-generation HDF product for FDA clearance." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1196298/000149315220020593/form10-q.htm About Nephros Inc. River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which are generally classified as ultrafilters, are primarily used in hospitals for the prevention of infection from water-borne pathogens, such as legionella and pseudomonas, and in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate. Nephros reported a net loss of $3.18 million for the year ended Dec. 31, 2019, compared to a net loss of $3.33 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $16.65 million in total assets, $4.37 million in total liabilities, and $12.27 million in total stockholders' equity. NINE ENERGY: S&P Lowers ICR to 'SD' on Below-Par Debt Repurchases ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Nine Energy Service Inc. to 'SD' (selective default) from 'CCC+'. At the same time, S&P lowered its issue-level rating on the company's unsecured notes due 2023 to 'D' from 'CCC+'. S&P expects to reassess its issuer credit rating and unsecured issue-level ratings on Nine Energy in the near term. The downgrade reflects the company's recent open market debt repurchases, under which it repurchased a total of more than $50 million of its unsecured notes principal year-to-date at less than 30 cents on the dollar. S&P said, "Accordingly, we view these repurchases as a selective default because investors received less than they were originally promised under the notes without receiving adequate compensation. We still view Nine Energy's capital structure as unsustainable amid the current industry environment and expect its business to remain very challenging for the balance of this year and into 2021 due to the subdued level of drilling and completion activity." NINE WEST: Court Narrows Claims in Trustee's Securities Suit ------------------------------------------------------------ District Judge Jed S. Rakoff dismissed all fraudulent conveyance and unjust enrichment claims with respect to payments made in connection with common shares, restricted shares, share equivalent units, and accumulated dividends against the Defendants in the case captioned IN RE: NINE WEST LBO SECURITIES LITIGATION, No. 20 MD. 2941 (JSR) (S.D.N.Y.). This multidistrict litigation arose from the 2014 leveraged buyout of The Jones Group, Inc. Plaintiffs -- consisting of Marc Kirschner, as trustee for the Nine West Litigation Trust representing unsecured creditors, and Wilmington Savings Fund Society, FSB as successor indenture trustee for various notes issued by Nine West -- brought these consolidated actions against officers, directors, and shareholders of Jones Group, claiming breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraudulent conveyance, unjust enrichment, and other assorted state law claims arising out of the bankrupting, and bankruptcy, of the company in connection with the LBO. Specifically, plaintiffs alleged that the defendant officers and directors arranged for the company to merge with an affiliate of Sycamore Partners Management, L.P., a private equity company, and sold off valuable "crown jewel" businesses to other Sycamore affiliates for a fraction of their real price. The result was to leave what remained, now called Nine West Holding Inc., bereft of its most successful product lines and with over $1.5 billion in debt, of which more than $1 billion was prior Jones Group debt. The Court addressed two motions to dismiss -- one on behalf of the shareholder defendants and the other on behalf of the director and officer defendants -- relating to those claims arguably affected by the safe harbor found in 11 U.S.C. section 546(e). Both the shareholder defendants and the D&O defendants argued that certain payments made to them in connection with the LBO are shielded from the fraudulent conveyance and unjust enrichment claims under the section 546(e) "safe harbor." Prior to the merger, Jones Group was a publicly traded global footwear and apparel company. In 2014, Sycamore, a private equity firm, acquired Jones Group through an LBO transaction. Sycamore effectuated the transaction by creating a new subsidiary -- Jasper Parent -- into which Jones Group was merged and ultimately renamed Nine West Holdings, Inc. As part of the LBO, several payments were made to Jones Group shareholders, directors, and officers. First, shares of common stock were cancelled and converted into the right to receive $15 in cash; in total, Nine West paid Jones Group's public shareholders $1.105 billion for the common shares. Second, shares of restricted stock and stock equivalent units, held by directors and officers, were likewise cancelled and converted into the right to receive $15 in cash, plus any unpaid dividends that had accumulated on those restricted shares; in total, Nine West paid Jones Group's directors and officers $78 million in connection with those shares. In addition, Nine West paid approximately $71 million in change in control payments to certain directors and officers. In the Complaint, plaintiffs referred to the mentioned payments, including common shares, restricted shares, share equivalent units, and unpaid dividends, as "shareholder transfers." They alleged that the $1.105 billion common share payments, made to the public shareholders, were effectuated through a different mechanism than were the payments in connection with the restricted stock, stock equivalent units, accumulated dividends, and change in control payments made to the directors and officers. With respect to the common shares, plaintiffs alleged the payments "were made by a non-agent contractor that performed the ministerial function of processing share certificates and cash, and whose rights and obligations were governed solely by contract." However, the merger agreement that governed the transaction specified that such payments were to be made by a "paying agent" and "pursuant to a paying agent agreement in customary form." The Paying Agent Agreement, in turn, identifies the paying agent as Wells Fargo. The PAA was signed by three parties: Nine West, Jasper Parent, and Wells Fargo. While it empowers Wells Fargo to "act as [Nine West's] special agent for the purpose of distributing the Merger Consideration," it also tasks Jasper Parent with key roles in the effectuation of the payments, including depositing with Wells Fargo the money to complete the transaction. And the PAA assigns Nine West different responsibilities depending on whether the payments were for book-entry securities or certificate securities. As for the restricted shares, share equivalent units and unpaid dividends, the Complaint alleged that the payments "were processed through the payroll and by other means." The Merger Agreement further specifies that, upon the completion of the merger, the restricted shares and the share equivalent units would be cancelled, and the holder of each share would be entitled to $15 in cash, "plus any unpaid dividends that have accumulated on such Restricted Share." Judge Rakoff noted that the motions are litigated in the shadow of In re Tribune Company Fraudulent conveyance Litigation, 946 F.3d 66 (2d Cir. 2019), a recent Second Circuit opinion that examined the scope of the section 546(e) safe harbor in the context of a leveraged buyout. In Tribune, the Second Circuit held that when a bank serves as a paying agent to help a company effectuate payments to its shareholders in connection with a securities contract, all payments made in connection with that securities contract are safe harbored from a bankruptcy trustee's avoidance powers with respect to certain fraudulent conveyance claims. Despite plaintiffs' best efforts to distinguish Tribune's holding from the issues presented by the instant motions, the Court held that the Tribune ruling largely controls these issues, and therefore granted both motions to dismiss. Judge Rakoff said the relevant inquiry under Tribune and in light of Merit Management Group, LP v. FTI Consulting, Inc., 138 S.Ct. 883, 888 (2018) is not whether the bank had a role in a specific payment or transfer but whether that bank was acting as an agent in connection with a securities contract. When, as in the Nine West matter, a bank is acting as an agent in connection with a securities contract, the customer qualifies as a financial institution with respect to that contract, and all payments made in connection with that contract are therefore safe harbored under section 546(e). For that reason, the payments made to the D&O defendants -- viz., payments in connection with restricted shares, share equivalent units, and accumulated dividends -- are safe harbored under section 546(e), even if, as plaintiffs alleged, they were not themselves processed by Wells Fargo. Because the payments made in connection with the restricted shares, share equivalent units, and accumulated dividends are safe harbored under section 546(e), Judge Rakoff dismissed the Litigation Trustee's unjust enrichment claims as to those payments. The Court noted, however, that the unjust enrichment claims are not dismissed with respect to the change in control payments, which, the D&O defendants have not yet moved to dismiss. A copy of Judge Rakoff's Opinion and Order is available at https://bit.ly/36gZ18s from Leagle.com. About Nine West Nine West Holdings Inc. is a footwear, accessories, women's apparel, and jeanswear company. In April 2014, Sycamore Partners Management, L.P., acquired The Jones Group Inc. for $2.2 billion via leveraged buyout. As part of the transaction, The Jones Group merged with several affiliates, and the newly merged company was renamed as Nine West Holdings. On April 6, 2018, Nine West Holdings, Inc., and 10 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-10947) to right size their balance sheet, sell the Nine West Group's assets, and execute on their turnaround strategy to concentrate exclusively on their One Jeanswear Group, Kasper Group, The Jewelry Group, and Anne Klein businesses. In addition to the chapter 11 cases, Jones Canada, Inc., and Nine West Canada LP commenced foreign insolvency proceeding under the Bankruptcy and Insolvency Act in Canada. The Hon. Shelley C. Chapman is the U.S. case judge. The Debtors tapped Kirkland & Ellis LLP as counsel; Lazard Freres & Co. as investment banker; Alvarez & Marsal North America LLC as interim management and financial advisory services provider; Consensus Advisory Services LLC and Consensus Securities LLC as investment banker in connection with the sale of intellectual property associated with the Nine West and Bandolino brands; Deloitte Tax LLP as tax services provider; and BDO USA, LLP, as auditor and accountant. Munger, Tolles & Olson LLP acted as the company's independent counsel, rendering services at the direction of independent directors Alan Miller and Harvey Tepner. Berkeley Research Group served as independent financial advisor, rendering professional services at the direction of the Independent Directors. Prime Clerk LLC served as the claims and noticing agent. The Ad Hoc Group of Secured Term Loan Lenders tapped Davis Polk & Wardwell LLP as counsel; and Ducera Partners LLC as financial advisor. The Ad Hoc Crossover Group of Secured and Unsecured Term Loan Lenders tapped King & Spalding LLP as counsel and Guggenheim Securities, LLC, as financial advisor. Brigade Capital Management, LP, a party to the RSA tapped Kramer Levin Naftalis & Frankel LLP as counsel. The Official Committee of Unsecured Creditors tapped Akin Gump Strauss Hauer & Feld LLP as counsel; Houlihan Lokey Capital, Inc., as investment banker; and Protiviti Inc. as financial advisor and forensic accountant. Sycamore Partners Management, L.P., owner of 90.2% of the equity interests in the debtors, tapped Proskauer Rose LLP as counsel. Authentic Brands, which bought Nine West's IP assets, tapped DLA Piper Global Law Firm as counsel. * * * In March 2019, Nine West emerged from bankruptcy under the name Premier Brands Group Holdings LLC, which is majority owned by CVC Credit Partners and Brigade Capital. The Company's exit plan slashed pre-bankruptcy debt obligations by more than $1 billion. The Company sold its Nine West and Bandolino footwear and handbag businesses at a court auction to Authentic Brands Group for $340 million in June 2018. Premier Brands Group oversees the One Jeanswear Group, the Jewelry Group, Kasper Group and Anne Klein businesses. NPC INTERNATIONAL: Bell Nunnally Represents CenturyLink, BVMC ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Bell Nunnally & Martin, LLP provided notice that it is representing CenturyLink, Inc. n/k/a Lumen Technologies and BVMC Lufkin, LLC in the Chapter 11 cases of NPC International, Inc., et al. On July 1, 2020, NPC International, Inc., et al filed a voluntary petition under Chapter 11 of the Bankruptcy Code. BNM has written contracts of engagement with CenturyLink and BV. BNM was employed after the Petition Date as counsel for the Parties in the Bankruptcy Case. BNM does not hold any claims or equity interests in the Debtors. BNM has not filed a proof of claim on its own behalf in the case. BNM reserves the right to supplement this Statement. Counsel for CenturyLink Communications, LLC and BVMC LUFKIN, INC. can be reached at: BELL NUNNALLY & MARTIN, LLP Russell W. Mills, Esq. David A. Walton, Esq. 2323 Ross Avenue, Suite 1900 Dallas, TX 75201 Tel: 214.740.1400 Fax: 214.740.1499 Email: rmills@bellnunnally.com dwalton@bellnunnally.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/2U4usvw About NPC International NPC International, Inc. -- https://www.npcinternational.com/ -- is a franchisee company with over 1,600 franchised restaurants across two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states and the District of Columbia. NPC International and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33353) on July 1, 2020. At the time of the filing, Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy counsel; Alixpartners, LLP as financial advisor; Greenhill & Co., LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims, noticing and solicitation agent and administrative advisor. NSA INTERNATIONAL: S&P Alters Outlook to Developing --------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based multi-level marketing, direct sales company NSA International LLC (Juice Plus) to developing from negative and affirmed its 'CCC' issuer credit rating on the company. S&P said, "At the same time, we are affirming our 'CCC' issue-level rating on the company's senior secured credit facility. The recovery rating is unchanged at '3', indicating our expectation for meaningful (50%-70%, rounded estimate 65%) recovery in the event of default." "Juice Plus' operating performance was better than our prior expectation and we believe the potential for a covenant violation in fiscal 2021 has declined. The improvement in operating performance reflected the increasing value proposition of the company's products, as well as various initiatives. The increasing focus on health and nutrition during the pandemic spurred demand for the company's products. In addition, part-time income in a work-from-home model also encouraged new distributors to join. The number of both customers and distributors increased across the U.S. and international markets. In addition, the company took pricing up earlier this year and benefited from various initiatives that rolled out in the fiscal fourth quarter of 2020, including new digital tools and compensation plan changes. Sales in the most recent quarter were up more than 20% and adjusted EBITDA was up in the high-single-digit area year over year. We have revised our forecast and now expect both topline and EBITDA to grow in low-teens percentage area in fiscal 2021 (ending April 30, 2021). We expect EBITDA cash interest coverage around 2x by the end of fiscal 2021. We expect the company to remain in compliance with its maintenance financial covenants and project about 10% cushion by the end of fiscal 2021, but cushion could tighten if demand falls short of our expectations." "Nevertheless, we could view further debt repurchases below par as selective default if we deem the cumulative amount to be significant. The company repurchased about $19 million face value of its term loan at around $0.50 to $0.55 cents on a dollar in fiscal 2020 and about $11 million face value at around $0.82 to $0.84 in the second quarter of fiscal 2021. The total amount represents about 7% of the initial term loan commitment, and about 8% of the outstanding balance as of the end of July. We believe that all repurchases have been done anonymously through a bank. We view the total amount repurchased so far as not significant. Therefore, we do not treat these repurchases as a debt restructuring that would be akin to a selective default. Nevertheless, if the company makes further debt repurchases below par, we could consider such transactions as constituting a selective default, particularly if we deem the cumulative amount to be significant." "We continue to view Juice Plus's capital structure as unsustainable. We expect adjusted debt to EBITDA of slightly below 8x and EBITDA cash interest coverage of around 2x by the end of fiscal 2021. We expect the company to generate discretionary cash flow after tax distribution around $20 million in fiscal 2021. Juice Plus has no near-term maturities, with its revolver due November 2023 and term loan due November 2025. However, with its high interest and amortization expenses, we believe Juice Plus is dependent on favorable business, financial, and economic conditions to meet its financial obligations over the long term." The developing outlook reflects the potential for a higher or lower rating over the next 12 months depending on the company's operating performance and the possibility of further debt repurchases below par. S&P said, "We could lower our ratings if the company makes further debt repurchases below par, particularly if we deem the cumulative amount to be significant. We could also lower our ratings if the company's operating performance starts to deteriorate due to an inability to retain distributors, leading to weaker discretionary free cash flow generation and EBITDA cash interest coverage at or below 1.5x, or if there is an increased likelihood of a near-term default including a covenant violation." "We could raise our ratings if the risk of a near-term default is clearly reduced. This could happen if Juice Plus continues to improve its operating performance while retaining its customer and distributor base, coupled with a reduced risk of further debt repurchases, such that EBITDA cash interest coverage is sustained around 2x and the company maintains double-digit forecasted covenant cushion." OASIS PETROLEUM: Ch. 11 Bankruptcy Filing Stays GEM Razorback Suit ------------------------------------------------------------------ Magistrate Judge Clare R. Hochhalter stayed the case captioned GEM Razorback, LLC, Plaintiff, v. Oasis Petroleum North America LLC, Defendant, Case No. 1:19-cv-236 (D.N.D.) due to Defendant Oasis Petroleum North America LLC filing of bankruptcy. On Oct. 1, 2020, Oasis filed a "Suggestion of Bankruptcy." In that notice, it requested any further legal proceedings in this matter, or execution on any judgment entered, be stayed pursuant 11 U.S.C. section 362(a)(1). Section 362(a)(1) provides that, upon the filing of a bankruptcy petition, all judicial and other proceedings are stayed. A copy of the Court's Order dated Oct. 2, 2020 is available at https://bit.ly/3eG1Oua from Leagle.com. About Oasis Petroleum Headquartered in Houston, Texas, Oasis -- http://www.oasispetroleum.com/-- is an independent exploration and production company focused on the acquisition and development of onshore, unconventional crude oil and natural gas resources in the United States. Its primary production and development activities are located in the Williston Basin in North Dakota and Montana, with additional oil and gas properties located in the Delaware Basin in Texas. On Sept. 30, 2020, Oasis Petroleum Inc. and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34771). As of June 30, 2020, the Company had $2.62 billion in total assets, $3.21 billion in total liabilities, and a total stockholders' deficit of $589.91 million. The Hon. Marvin Isgur is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP as counsel; JACKSON WALKER L.L.P. as co-bankruptcy counsel; TUDOR, PICKERING, HOLT & CO. and PERELLA WEINBERG PARTNERS LP as investment banker; and ALIXPARTNERS LLP as financial advisor. KURTZMAN CARSON CONSULTANTS LLC is the claims agent. PRICEWATERHOUSECOOPERS is the external auditor and DELOITTE TOUCHE TOHMATSU LIMITED is the tax advisor. Evercore is acting as financial advisor and Paul, Weiss, Rikind, Wharton & Garrison LLP and Porter Hedges LLP are acting as legal advisors to the Ad Hoc Committee of Senior Noteholders. PAPER STORE: G2 Capital Helped Execute 363 Sale Process ------------------------------------------------------- G2 Capital Advisors served as Chief Restructuring Officer and Restructuring Advisor for The Paper Store Culminating in an Expedited 363 Process in Chapter 11 Resulting in the Going Concern Sale of its Operations to prior members of the management team and an Investor Group. At its inception more than 55 years ago, the original vision of The Paper Store was to serve as a local retailer offering newspapers, magazines, greeting cards and school supplies. Since then, The Paper Store has expanded beyond its original vision and has grown organically from a "mom-and-pop" shop to a regionally renowned specialty retailer. Today, The Paper Store is one of the leading specialty gift chains in the Northeast with 86 locations in 7 states. G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors. (PRNewsfoto/G2 Capital Advisors) G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors. SITUATION TPS had experienced a significant decline in store traffic and related consumer spending, as well as numerous operational challenges as a result of the COVID-19 pandemic, especially on account of actions taken in response to the public health crisis. Mandated store closures significantly contributed to missed sales targets, unsold inventory, and depressed profit margins. The Company could no longer cover its pre-bankruptcy debt service and was facing an impending liquidity crisis given working capital requirements leading in to the holiday season. Prior to filing, TPS pursued several strategic alternatives to address the liquidity need and balance sheet challenges but was not able to reach concensus across the interested parties. ENGAGEMENT TPS engaged G2 Capital Advisors, LLC ("G2") as its restructuring advisor in June 2020, following the liquidity and operational challenges to examine strategic alternatives and stabilize operations. Following an inability to reach an out-of-court solution with the key stakeholders, TPS expanded G2's role by appointing Don Van der Wiel as Chief Restructuring Officer ("CRO"). The Company subsequently filed for Chapter 11 bankruptcy to facilitate a going concern sale of the Company. Through the CRO role, G2 became the chief fiduciary tasked with creating sufficient runway to preserve going concern value and maximizing potential recovery for all stakeholders. Through the CRO role, G2 actively navigated complex stakeholder dynamics, during a time when market instability was at an all-time high due to the continued pandemic. G2 developed and executed liquidity management tactics to maximize strategic options for the Company, as well as managed all transactional and bankruptcy proceeding timelines. With a long-term focus on maximizing value, G2 supported TPS's sale process, leading to efficient and expeditious transaction execution. Tom Anderson, President & CEO of The Paper Store said, "G2 was a true partner for The Paper Store as we navigated the highly disruptive impacts of Covid 19 across our business. The G2 team, with its operational and financial advisory capabilities, quickly understood our Company and situation, developed a set of strategic alternatives, and then assisted us in executing the strategy, resulting in a stabilization of day-to-day operations and the long term survival of the Company." OUTCOME G2 provided day-to-day liquidity and process management support throughout the bankruptcy proceedings, including leading a tailored transaction process resulting in the signing of an asset purchase agreement in August 2020 and an eventual going concern sale of TPS on September 1, 2020 under Section 363 of the Bankruptcy Code for $22MM in cash consideration, plus the assumption of certain liabilities.The highly efficient court case process took 49 days from the petition filing date to the closing of the transaction. About The Paper Store The Paper Store, LLC is a family-owned and family-operated specialty gift retailer, with 86 stores in seven states and an e-commerce business. The retail locations feature merchandise comprising fashion, accessories, spa, home decor, stationery, jewelry, sports and more from well-regarded brands such as Vera Bradley, Lilly Pulitzer, Godiva, 47 Brands, Alex and Ani, Life is Good, Vineyard Vines, and Sugarfina. Visit http://www.thepaperstore.com/for more information. Paper Store and its affiliate TPS Holdings, LLC sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-40743) on July 14, 2020. In the petition signed by CRO Don Van der Wiel, Paper Store was estimated to have assets of $10 million to $50 million and debt of $50 million to $100 million. Judge Christopher J. Panos oversees the cases. Debtors have tapped Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as their legal counsel, G2 Capital Advisors as restructuring advisor, SSG Capital Advisors as investment banker, Verdolno & Lowet, P.C. as accountant, and Donlin, Recano & Co., Inc. as claims and noticing agent. PAPER STORE: WS Development Acquires Business --------------------------------------------- Eric Smookler of Real Estate Weekly reports that WS Development, one of the largest privately-held retail developers in the country, has acquired specialty gift retailer, The Paper Store. The Paper Store is a 55-year-old family-run and operated gift retailer with 86 locations and roughly 2,000 employees across the north east. It will continue to serve its guests and has "aspirations" for growth over the coming months and years, according to a statement. "Our relationship with The Paper Store goes back many years and we have great respect for the business and its leadership," said Eric Smookler, CFO and Co-CIO at WS Development. "Its community-centric focus, diversified and evolving assortment and strong fundamentals make it the type of retailer we believe is well positioned to not only successfully navigate the future but grow in it." In mid-July, The Paper Store pursued a Chapter 11 financial restructuring due to the impact of COVID-19 regulations shuttering their 86 stores, which average between 8,000 and 9,000 S/F, for months. In September, the business successfully emerged from bankruptcy with the aid of a group of strategic investors led by principals of WS Development, the retail-led real estate development firm that owns, manages and leases an extensive portfolio of over 95 properties totaling more than 27 million square feet. During the progression of the Chapter 11 events, the Company continued to operate the business and worked with its stakeholders to ensure ongoing obligations were met and services were uninterrupted – allowing The Paper Store customers to continue enjoying their neighborhood specialty gift store. "The Paper Store could not have successfully navigated this process without the support of our dedicated, hardworking, and motivated staff, as well as principals of WS Development who made a meaningful commitment to our future and have allowed for our family-run business to continue serving our communities," said Tom Anderson, CEO and President of The Paper Store. "We also cannot express enough appreciation for our beloved customers – they have stuck by us for years and continued to do so during these uncertain times." Anderson added, "We understand our customers have choices and we are encouraged and flattered that they choose The Paper Store. As our business grows in the coming months, it's these same customers who will continue to help shape our brand. The product offerings and trends that we bring into our stores and online at thepaperstore.com are fueled by what our customers need and how they prefer to shop for it. We are honored to be their one-stop-shop for the 'new normal' essentials and more." About The Paper Store The Paper Store, LLC is a family-owned and family-operated specialty gift retailer, with 86 stores in seven states and an e-commerce business. The retail locations feature merchandise comprising fashion, accessories, spa, home decor, stationery, jewelry, sports and more from well-regarded brands such as Vera Bradley, Lilly Pulitzer, Godiva, 47 Brands, Alex and Ani, Life is Good, Vineyard Vines, and Sugarfina. Visit http://www.thepaperstore.comfor more information. Paper Store and its affiliate TPS Holdings, LLC sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-40743) on July 14, 2020. In the petition signed by CRO Don Van der Wiel, Paper Store was estimated to have assets of $10 million to $50 million and debt of $50 million to $100 million. Judge Christopher J. Panos oversees the cases. The Debtors have tapped Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as their legal counsel, G2 Capital Advisors as restructuring advisor, SSG Capital Advisors as investment banker, Verdolno & Lowet, P.C. as accountant, and Donlin, Recano & Co., Inc. as claims and noticing agent. PAUL OLIVA PARADIS: Nov. 9 Hearing on $3.6M Sand Dune Property Sale ------------------------------------------------------------------- Judge Paul Sala of the U.S. Bankruptcy Court for District of Arizona will convene an expedited telephonic hearing on Nov. 9, 2020 at 11:00 a.m. (877-402-9757, access code 4376956) to consider Paul Oliva Paradis' sale of the residential property located at 40365 Sand Dune Rd., Rancho Mirage, California to Karen A. McDonald Trust for $3.6 million, cash. Axos Bank is the holder of a lien of a deed of trust encumbering the Property. Through its Agent, Keller Williams Realty Encino-Sherman Oaks, the Debtor has received a California Residential Purchase Agreement and Joint Escrow Instructions from the Buyer to purchase the Property for the sum of $3.6 million. The Purchase Price is payable in cash at closing including a $108,000 initial earnest money deposit. The proposed sale is "as is, where is" in the Property's present physical condition and does not require repairs or credits. The closing date is Nov. 13, 2020. The sale transaction is not subject to any contingencies. The closing will take place at WonderLand Escrow at 13325 Ventura Blvd, Sherman Oaks, CA 91425 (Gaby Thompson Escrow Officer; 818-659-8954; gthompson@wonderlandescrow.com) with Lawyers Title as the title company (Sarineh Yedgarian; 818-303-4130; sarineh.yedgarian@ltic.com). The Debtor proposes to sell the Property free and clear of all liens, claims, interests, and encumbrances with all liens attaching to sale proceeds including, without limitation, the following: a. The claim of Lender equal to $2,341,775 as of the Petition Date secured by the lien of a Deed of Trust dated May 4, 2018 and recorded May 15, 2018 as Instrument No. 2018-0189949 official records of Riverside County, California. A current payoff statement has been requested from the Lender. b. A lien for any and all unpaid all real estate taxes including, without limitation, a lien in favor of the Riverside County Tax Collector estimated in the amount of $47,153 for real property taxes from 2017 to present which includes the sum of $22,205 which represents taxes for the period July 1, 2020 through Dec. 1, 2020 and will be prorated to closing. c. A lien in favor of the Thunderbird Property Owners Association. The Debtor estimates that the lien secures a claim of approximately $5,000 to $10,000. The Debtor proposes to pay all applicable liens, claims, interests, and encumbrances, including without limitation, the liens specified, in full from the Purchase Price at closing together with Debtor's share of all closing costs, transfer fees, and escrow fees and the real estate commissions owed to the Debtor's Agent and the Buyer's agent. Pursuant to their employment, the Agent is entitled to a commission equal to 6% of the purchase price. In the case, the commission to be paid will be split between the agents for the Seller and the Buyer with 3.5% to Agent ($126,000) and 2.5% to the Buyer's agent ($90,000). The Buyer has indicated that it wishes to proceed expeditiously based on a 14-day closing date which is approximately Nov. 13, 2020. The Debtor asks that the 14-day stay of Fed. R. Bankr. Proc. 6004(h) be waived in order that the sale may timely close on Nov. 13, 2020. The objection deadline is Nov. 6, 2020. A copy of the Agreement is available at https://tinyurl.com/y62l8ljb from PacerMonitor.com free of charge. Paul Oliva Paradis sought Chapter 11 protection (Bankr. D. Ariz. Case No. 20-06724) on June 3, 2020. The Debtor tapped Allan D. Newdelman, Esq., at Allan D Newdelman P.C. as counsel. On July 10, 2020, the Court appointed Armine Amy Oganyan and Anna Barkhoudarian of Keller Williams Realty Encino-Sherman Oaks as real estate agents. PBF HOLDING: S&P Lowers ICR to 'B+'; Outlook Negative ----------------------------------------------------- S&P Global Ratings lowered the issuer credit rating and senior unsecured debt ratings on PBF Holding Co. LLC (PBF Holdings) to 'B+' from 'BB'. At the same time, S&P lowered the issue-level ratings on the senior secured debt to 'BB' from 'BBB-'. The '1' recovery rating on the secured debt and '3' recovery rating on the unsecured notes are unchanged. S&P is also lowering its issuer credit rating and senior unsecured debt ratings on PBF Logistics L.P. (PBFX) to 'B+' from 'BB-'. The '3' recovery rating is unchanged. S&P said, "Though demand for certain refined products has slowly recovered from earlier this year, we expect margins to remain depressed and no longer assume a mid-cycle price environment in 2021. The rating action reflects a slower path-to-recovery than previously forecast. Though refined product demand has recovered from levels during the national lockdown, margins remain depressed, and we no longer forecast PBF Holdings to generate positive cash flow for the full-year 2020. As a result, we now forecast PBF Holdings to have worse credit metrics, including an adjusted debt-to-EBITDA ratio above 5x in 2021, before returning to the 3x area in 2022." The deterioration in demand for refined products has kept inventory levels above multiyear averages and refining margins for the entire sector under significant stress. As a result, PBF Holdings--like many of its peers--has been operating at a loss, and S&P forecasts it to continue to do so until margins improve. The company continues to focus on reducing costs and improving efficiency of its assets. The company has announced a reconfiguration of its East Coast refineries, Paulsboro and Delaware City, which will allow it to run a more efficient asset base. The Paulsboro refinery will be idling certain units, allowing Delaware City and the remaining Paulsboro units to operate at higher utilization and efficiency. These changes will allow PBF Holdings to save approximately $100 million and could help it preserve liquidity in the near term. S&P expects the reconfiguration to be completed by year-end 2020. The company has sufficient liquidity and no near-term debt maturities. Ultimate parent PBF Energy Inc. announced it had approximately $1.9 billion of liquidity as of Sept. 30, based on approximately $1.3 billion of cash and availability under its asset-based lending facility. Under current refining conditions, the company is forecasting a cash burn between $50 million-$75 million or even up to $100 million a month. S&P said, "If the refining margin environment continues to be stressed over the next several months, we expect that the company will need to take further actions to preserve its balance sheet. That said, PBF Holdings does not have any upcoming debt maturities until 2025, somewhat mitigating any refinancing risk in the near term. We believe the company could issue an add on to its senior secured debt offering if necessary, in addition to a sale-leaseback transaction, among other things to improve liquidity." Roughly two-thirds of the company's refining capacity is concentrated on the East and West Coasts and has faced weak crack spreads compared to the Gulf Coast. S&P said, "We expect that a more substantial recovery in refined product demand will depend greatly on the widespread availability of a vaccine. Health experts believe that COVID-19 will remain a threat until a vaccine or effective treatment becomes widely available, which could be around mid-2021. As a result, we now forecast a return to a mid-cycle refining environment in 2022. That said, we believe PBF Holdings has sufficient liquidity through 2021." "Assuming a better recovery in the second half of 2021, we expect average utilization will continue to remain at current levels for the remainder of 2020, before improving to the 750,000-775,000 barrels per day (bpd) range in 2021, and up to the 900,000-1,000,000 bpd range in 2022. We forecast an average gross margin per barrel (bbl), excluding special items, to improve to the $6-$7/bbl range in 2021, and $8-$9/bbl in 2022. This results in an adjusted debt-to-EBITDA ratio above 5x in 2021, improving to the 3x-3.5x range in 2022." "The rating action on PBFX reflects that on PBF Holdings, it's most significant customer in terms of revenues and volumes. On a stand-alone basis, we expect PBFX will maintain a weighted-average adjusted debt-to-EBITDA ratio in the mid- to high-3x range through 2022. It has been reducing outstanding leverage and we expect it to continue to do so in the immediate term." "We also expect PBFX to continue paying distributions to its ultimate parent, PBF Energy Inc. We continue to assess PBF Holdings as a core subsidiary of PBF Energy since it often generates most of PBF Energy's cash flows." "The negative outlook reflects our expectation that 2021 adjusted leverage will remain above 5x, given the poor market dynamics of the refining sector, and that the down-cycle margin environment will limit the amount of free cash flow being generated. Without any further improvements to margin, PBF will continue to operate at a loss, reducing its liquidity position. That said, we expect PBF Holdings to maintain adequate liquidity over the next 12 months." S&P could lower the rating if: -- The refining sector remains challenging for longer than expected, such that its liquidity becomes less than adequate and the company does not take additional steps to improve its liquidity position. -- The company maintains adjusted debt to EBITDA in the mid-to high-single-digits in 2022 and beyond. S&P could revise the outlook to stable if: -- The refining sector improves quicker than anticipated, resulting in a stabilization of the business and producing positive free cash flow. -- Adjusted leverage falls below 4x and the company uses excess cash to repay outstanding debt. PBFX: S&P said, "The negative outlook reflects that of PBF Holdings, its most significant customer. On a stand-alone basis, we expect PBFX will maintain an adjusted debt-to-EBITDA ratio in the mid- to high-3x range through 2022 and that its cash flows will continue to benefit from minimum volume commitments from its parent." "We could take a negative ratings action if we take a similar action on PBF Holdings. We could also consider lowering the stand-alone credit profile (SACP) if PBFX's credit measures deteriorate such that its stand-alone adjusted debt to EBITDA remains above 4x or if its liquidity becomes constrained." "We could revise the outlook to stable if we took a similar action on PBF Holdings. This could occur if the refining sector improves more quickly than expected and its business stabilizes and generates positive free cash flow." PEPITA BAYSA MILLAN: Time Close Newark Property Sale Not Extended ----------------------------------------------------------------- Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the Northern District of California denied without prejudice Pepita Baysa Millan's request to extend the date to complete the sale of the real property located at 5105 Dupont, Newark, California for $893,000 from Nov. 1, 2020 to Feb. 20, 2021. A notice was not provided to affected creditors. Section 6.a. of the Debtor's Third Amended Combined Plan of Reorganization and Disclosure Statement dated June 20, 2020 does not contemplate an extension on an ex parte basis. The Court will consider a motion that is properly served on the affected creditors with an opportunity to respond in accordance with FRBP 9014-1. Pepita Baysa Millan sought Chapter 11 protection (Bankr. N.D. Cal. Case No. 19-51884) on Sept. 17, 2019. The Debtor tapped John G. Downing, Esq., at John G. Downing, APC, as counsel. PHARMHOUSE INC: Canopy Rivers to Write Down CA$82.8 Million ----------------------------------------------------------- Law360 reports that Cannabis giant Canopy Growth's venture capital arm on Wednesday, September 16, 2020, said it expects to write down up to CA$82.8 million (US$62.9 million) in investments as a partially owned joint venture entered restructuring and creditor protection in Canada. Canopy Rivers Inc. said it will provide a CA$7.2 million debtor-in-possession loan to cannabis cultivator PharmHouse as it undergoes insolvency proceedings through Canada's Companies' Creditors Arrangement Act, which automatically pauses recent litigation over the company's financial woes. Canopy Rivers expects a full writedown on its CA$32.6 million equity investment in PharmHouse, as well aimpairment charges in respect of all or a portion of the balances relating to shareholder loans advanced by Canopy Rivers to PharmHouse, which were recorded at $50.2 million as of June 30, 2020. Canopy Rivers owns 49% in the joint venture of PharmHouse, which was formed in May 2018. The company partnered with Canopy Growth Corporation (CGC) and TerrAscend Canada Inc. which provided strong support for the company's significant investment in PharmHouse's automated production facility, as well as its guarantee of the PharmHouse Credit Facility. About Canopy Rivers Canopy Rivers Inc is a venture capital investment firm and operating platform structured to pursue investment opportunities in the global cannabis sector. The investments take the form of production-linked royalties, secured debt, newly formed joint ventures, and a variety of equity and equity-linked instruments. About PharmHouse Inc. PharmHouse Inc. operates as a pharmaceutical company. PharmHouse Inc. commenced court-supervised restructuring proceedings under the CCAA. Ernst & Young Inc. has been appointed as monitor for the Company's CCAA proceedings pursuant to the Order of the Ontario Superior Court of Justice (Commercial List) made on Sept. 15, 2020. PORTOFINO TOWERS: Seeks to Hire Joel M. Aresty as Legal Counsel --------------------------------------------------------------- Portofino Towers 1002 LLC seeks authority from the United States Bankruptcy Court for the Southern District of Florida to hire Joel M. Aresty, P.A. as its counsel. The professional services Joel Aresty will render are: (a) give advice to the debtor with respect to its powers and duties as a debtor in possession and the continued management of its business operations; (b) advise the debtor with respect to its responsibilities in complying with the U.S. trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; (d) protect the interest of the debtor in all matters pending before the court; (e) represent the debtor in negotiation with its creditors in the preparation of a plan. Joel Aresty, Esq., disclosed in court filings that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Joel M. Aresty, Esq. Joel M. Aresty, P.A. 309 1st Ave S Tierra Verde, FL 33715 Tel: (305) 904-1903 Fax: (800) 899-1870 Email: Aresty@Mac.com About Portofino Towers 1002 LLC Portofino Towers 1002 LLC owns a condo at 300 S Pointe Dr. Unit 1002, Miami Beach FL 33139. Portofino Towers 1002 LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20446) on Sept. 27, 2020. The petition was signed by Laurent Benzaquen, authorized member (AMBR). At the time of filing, the Debtor estimated $1 million to $10 million in assets and liabilities. Joel M. Aresty, Esq. at JOEL M. ARESTY P.A. represents the Debtor as counsel. PROMISE HEALTHCARE: Court Confirms Chapter 11 After Long Talks -------------------------------------------------------------- Law360 reports that former hospital owner Promise Healthcare Group breezed through its Chapter 11 confirmation Thursday, September 17, 2020, seeing a consensual plan approval after months of negotiations with unsecured creditors. During the virtual hearing, attorneys for the debtor and the official committee of unsecured creditors said the plan addressed the committee's concerns about $300 million in intercompany loans in a settlement that arose from the negotiations and a critical mediation session with retired bankruptcy Judge Kevin Carey. "Judge Carey's efforts in one afternoon of mediation were somewhat herculean in that he brought together parties who had significant factual and legal disputes," committee attorney Andrew H. Sherman said. About Promise Healthcare Group Established in 2003, Promise Healthcare is a specialty post-acute care health company headquartered in Boca Raton, Florida. Promise Healthcare Group, LLC, and its affiliates sought bankruptcy protection on Nov. 4, 2018 (Bankr. D. Del. Lead Case No. 18-12491). In the petition signed by Andrew Hinkelman, CRO, the Debtors estimated assets of up to $50,000 and liabilities of $50 million to $100 million. The Debtors tapped DLA Piper LLP and Waller Lansden Dortch & Davis, LLP, as general counsel; FTI Consulting, as financial and restructuring advisor; Houlihan Lokey and MTS Health Partners, L.P., as investment bankers; and Prime Clerk LLC as claims agent. RAYONIER ADVANCED: Posts $29 Million Net Income in Third Quarter ---------------------------------------------------------------- Rayonier Advanced Materials Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income attributable to the company of $28.86 million on $423.92 million of net sales for the three months ended Sept. 26, 2020, compared to a net loss attributable to the company of $14.22 million on $416.13 million of net sales 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 $8.13 million on $1.23 billion of net sales compared to a net loss attributable to the company of $51.18 million on $1.31 billion of net sales for the nine months ended Sept. 28, 2019. As of Sept. 26, 2020, the Company had $2.49 billion in total assets, $300.67 million in total current liabilities, $1.06 billion in long-term debt, $160.11 million in long-term environmental liabilities, $218.70 million in pension and other postretirement benefits, $22.89 million in deferred tax liabilities, $26.02 million in other long-term liabilities, and $700.14 million in total stockholders' equity. Year-to-date net loss from continuing operations for the nine months ended Sept. 26, 2020 was $9 million, or $0.14 per diluted common share, compared to a net loss of $62 million, or $1.36 per diluted common share for the same prior year period. The decrease in the diluted loss per share was due to the significant improvements in Forest Products as well as from the conversion of the Company's preferred stock into approximately 13 million shares of common stock in August of 2019. "Driven by strong lumber prices, better reliability in High Purity Cellulose and an ongoing focus of reducing costs, third quarter results were positive," said Paul Boynton, president and chief executive officer. "Despite the challenges brought on by COVID-19, the organization capitalized on near-term opportunities and is starting to see signs of an economic recovery in viscose and high-yield pulp markets." Cash Flows & Liquidity For the nine months ended Sept. 26, 2020, the Company's operations provided cash flows of $63 million. Year-to-date working capital increased $56 million, primarily due to an increase in the income tax receivable as a result of the CARES Act. For the nine months ended Sept. 26, 2020, the Company invested $43 million in capital expenditures, which included approximately $14 million of strategic capital year-to-date. The Company ended the third quarter of 2020 with $196 million of liquidity globally, including $83 million of cash, $97 million revolver availability in the U.S. and $16 million of availability on a factoring facility in France. Liquidity for the quarter improved $30 million, due to an increase in cash driven by positive operational results. The Company remains well within compliance with its third quarter covenants, including a Gross Secured Leverage Ratio of 4.0 times compared to a requirement of less than 6.65 times and an Interest Coverage Ratio of 2.4 times compared to a requirement of 1.4 times. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1597672/000159767220000047/ryam-20200926.htm About Rayonier Advanced Headquartered in Jacksonville, Florida, Rayonier Advanced Materials Inc. -- http://www.rayonieram.com/-- is a producer of cellulose-based technologies, including high purity cellulose specialties, a natural polymer commonly found in filters, food, pharmaceuticals and other industrial applications. The Company also manufactures products for lumber, paper and packaging markets. The Company has manufacturing operations in the U.S., Canada, and France. Rayonier Advanced reported a net loss available to common stockholders of $31.03 million for the year ended Dec. 31, 2019. * * * As reported by the TCR on March 6, 2020 S&P Global Ratings lowered its issuer credit rating on Rayonier Advanced Materials Inc. (RYAM) to 'CCC+' from 'B-' and lowered its issue-level rating on its senior unsecured notes to 'CCC' from 'CCC+'. The downgrade reflects the severe deterioration in RYAM's margins, which caused its leverage to rise to more than 10x as of Dec. 31, 2019, from 3.6x as of Dec. 31, 2019 and 7.4x as of Sept. 30, 2019. REALOGY GROUP: S&P Upgrades ICR to 'B+'; Outlook Stable ------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Realogy Group LLC to 'B+' from 'B', its issue-level ratings on its unsecured debt and senior secured second-lien notes to 'B-' from 'CCC+', and its issue-level rating on its senior secured first-lien debt to 'BB' from 'BB-'. The U.S. real estate market rebound was faster than anticipated as low-rate financing and strong consumer demand drove home sales volumes and prices up, though the sustainability of these trends remains uncertain heading into 2021. Following the April/May bottom, home sales followed a V-shaped rebound as low interest rates and COVID-influenced consumer behavior fueled demand, while low on-market inventory continued to drive up home prices in almost all U.S. metro markets. Amidst this strong selling environment, Realogy was able to take market share during the third quarter as its volume growth (up 28% year over year) exceeded the National Realtor Association's (NAR) reported 23% market growth. While agent sales commissions continue to increase with high volume activity, the company's ability to continue to grow its agent count and sustain its productive agent retention rates extends a steady reversal of competitive recruitment pressures that have challenged Realogy in recent years. The sustainability of these current housing trends remains uncertain moving forward. Extenuating macroeconomic uncertainty and potential for further COVID-related market disruption cloud visibility into transaction volume in 2021. Stagnating, high unemployment and concerns around job security pose key risks as home prices continue to appreciate causing affordability to remain a concern, particularly as the financial disparity between high-income and low-income households continues to intensify. Still, tailwinds are abound, including low new construction inventory, attractive interest rates and mortgage financing, and quicker transaction closing times. In the third quarter, solid free cash flow generation enabled Realogy to repay debt and maintain its strong liquidity position, which supports the rating despite the uncertain sustainability of the current housing market boom. Since suspending its share repurchases and dividend policy in 2019, Realogy's capital priorities have been to repay debt and invest in its business, which it demonstrated by fully repaying its revolving credit facility balance ($815 million as of June 30, 2020) in October 2020. S&P expects Realogy to continue deleveraging toward its target consolidated total net debt leverage ratio of less than 4x. Given the full availability under the company's $1.4 billion revolving credit facility, its solid cash position, and the additional flexibility under its senior secured net leverage covenant (expanded to 6.50x in July from 4.75x), S&P believes Realogy's liquidity is well positioned to remain competitive with ample operating flexibility in 2021. S&P said, "Our stable outlook on reflects our expectation that Realogy will sustain debt leverage in the 5x area through 2021 while generating good free cash flow to support its strong liquidity position." "Over the next 12 months, we could lower our rating on Realogy if we expect its leverage to remain above 6x due to a sustained economic downturn, unfavorable housing trends, or competitive pressures. We could also consider lowering our rating if the company signaled a change in its financial policy, including prioritizing substantial share repurchases or dividend payments over debt reduction." "Although unlikely over the next 12 months, we could raise our rating on Realogy if the company demonstrates sustained momentum in expanding its earnings while refraining from borrowing incremental debt such that it sustains leverage in the mid-4x area and free cash flow to debt of more than 10%." REGUS CORP: 2% of Locations Sent to Chapter 11 ---------------------------------------------- Rich Bockmann of TRD New York reports that short-term office company Regus put half a dozen of its New York City workcenters into bankruptcy as the company seeks Chapter 11 protection for upwards of 100 locations across the country. Regus, which went through a bankruptcy restructuring in 2003 after the dot-com bubble burst, has put roughly 90 locations into Chapter 11 over the past six weeks, filings show. The company has filed for six workcenters in Manhattan, Brooklyn and Long Island City in the past week. Four of the locations are in Midtown: Paramount Group's 1325 Sixth Avenue at 53rd Street, Levin Properties' 1501 Broadway in Times Square, Brookfield Properties’ 424-434 West 33rd Street in Manhattan West and EQ Office's 1740 Broadway at 56th Street. The other centers are at Normandy Real Estate Partners' 175 Pearl Street in Dumbo and Jamestown Properties' Falchi Building at 31-00 47th Avenue in Long Island City. A representative for Regus declined to comment. But in the half-year update from its parent company, Switzerland-based IWG, CEO Mark Dixon said the firm will be accelerating its plan to trim 4 percent of its global portfolio in response to Covid-19. "Whilst the Covid-19 pandemic continues, we expect our third quarter to be particularly challenging. We therefore remain sharply focused on maximising further cost savings in the coming months," he wrote in the August report, noting the company is working to build a large cash buffer. Regus is the largest flex-office provider in the world, with about 10 times as many locations as WeWork. The company, founded in 1989, is largely seen as a barometer for the short-term office market, which has grown significantly in the past few years with WeWork's expansion driven largely by SoftBank. As recently as last fall, Dixon was crowing that Regus was thriving as its younger, upstart rival was experiencing growing pains. But the coronavirus has had a severe impact on the short-term office market, with a number of smaller players fizzling out. Regus' bankruptcy filings are the most significant indicator yet that the pandemic pain may start to reach the industry's highest levels. The majority of the sites Regus put into bankruptcy are in urban cores including New York, Chicago and San Francisco -- areas hard hit by the virus. The number of centers in Chapter 11 represent about 2 percent of the 1,000 locations the company has in the United States and Canada. The company believes its clients will want to work in suburban offices closer to home, rather than in dense business centers. Nearly $13 billion worth of commercial-mortgage backed securities loans have exposure to Regus locations, according to a recent report from Kroll Bonds Ratings Agency. About Regus Corp. Headquartered in Chertsey, UK, Regus Group Plc was founded by the current CEO Mark Dixon in 1989 and is the world's largest provider of serviced offices and videoconferencing facilities. Following the acquisition of HQ Global Workplaces in 2004, it runs a network of approximately 80,000 workstations in 55 countries around the world. RGN-Group Holdings, LLC and its affiliates are primarily engaged in renting and leasing real estate properties in the U.S. On Aug. 17, 2020, RGN-Group Holdings and and other U.S. affiliates of Regus Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11961). At the time of the filing, RGN-Group Holdings disclosed total assets of $1,005,956,000 and total liabilities of $946,016,000. Judge Brendan Linehan Shannon oversees the cases. The Debtors have tapped Faegre Drinker Biddle & Reath LLP as their bankruptcy counsel, Alixpartners as financial advisor, Duff & Phelps LLC as restructuring advisor, and Epiq Corporate Restructuring LLC as claims and noticing agent. REMINGTON OUTDOOR: Ordered to Continue Retirees Health Payments --------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that bankrupt Remington Outdoor Co. Inc. will have to make retiree health care payments at least through the end of the year, a bankruptcy judge ruled. Judge Clifton R. Jessup Jr. of the U.S. Bankruptcy Court for the Northern District of Alabama Wednesday ordered the payments after denying the United Mine Workers of America's request to appoint a retirees committee in the gunmaker's bankruptcy case. The union failed to prove that the committee was necessary, especially because the time to object to a proposed company sale has already passed, he said. About Remington Outdoor Co. Remington Outdoor Company, Inc. and its affiliates are manufacturers of firearms, ammunition and related products for commercial, military, and law enforcement customers throughout the world. They operate seven manufacturing facilities located across the United States. The companies' principal headquarters are located in Huntsville, Alabama. Remington Outdoor Company and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020. At the time of the filing, Remington disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Clifton R. Jessup Jr. oversees the cases. The Debtors have tapped O'Melveny & Myers LLP as their bankruptcy counsel, Burr & Forman LLP as local counsel, M-III Advisory Partners LP as financial advisor, Ducera Partners LLC as investment banker, and Prime Clerk LLC as notice, claims and balloting agent. The U.S. Bankruptcy Administrator for the Northern District of Alabama appointed a committee of unsecured creditors on Aug. 6, 2020. The committee is represented by Fox Rothschild, LLP and Baker Donelson Bearman Caldwell & Berkowitz, PC. ROBERT ALLEN: Description of Sold Pocatello Properties Corrected ---------------------------------------------------------------- Judge Joseph M. Meier of the U.S. Bankruptcy Court for the District of Idaho has entered a Stipulate Order correcting error in the legal description of the lots he authorized Robert Allen Auto Group, Inc. to sell to Land Quest Development, Inc. for $49,000 and for $25,000, respectively: (i) the 6th Street Lot (Legal description of Lots 7 & W70' Lots 9 & 10, Block 270, Pocatello Townsite); and (ii) the Lander Street Lot (Legal of Lots 1 & 2, Block 269, Pocatello Townsite). The legal description in connection with the Motion is corrected to that specified in the Notice of Errata. A copy of the Notice of Errata is available for free at https://tinyurl.com/y2atyspp from PacerMonitor.com free of charge. About Robert Allen Auto Group Robert Allen Auto Group, Inc., is a dealer of automobiles based in Pocatello, Idaho. Robert Allen Auto Group filed a Chapter 11 petition (Bankr. D. Idaho Case No. 20-40163) on March 2, 2020. In the petition signed by Robert Allen, president, the Debtor disclosed $4,312,279 in assets and $2,097,927 in liabilities. Steven L. Taggart, Esq., at MAYNES TAGGART PLLC, serves as bankruptcy counsel to the Debtor. Shawn Perry is the real estate agent for the estate. RTI HOLDING: Hires Johnson Associates as Compensation Advisor ------------------------------------------------------------- RTI Holding Company, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Johnson Associates, Inc., as compensation advisor to the Debtor. RTI Holding requires Johnson Associates to perform the advisory and other services that will be necessary during these cases with regard to testimony and other work in connection with the Debtors' request for approval of the Incentive Plan pursuant to the Incentive Plan Motion. Johnson Associates will be paid at these hourly rates: Alan Johnson $715 Prasuna Tanchuk $270 Johnson Associates will also be reimbursed for reasonable out-of-pocket expenses incurred. Alan M. Johnson, partner of Johnson 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 Debtors and their estates. Johnson Associates can be reached at: Alan M. Johnson JOHNSON ASSOCIATES, INC. 19 West 44th Street, Suite 511 New York, NY 10036 Tel: (212) 221-7400 About RTI Holding Company RTI Holding Company, LLC and its affiliates develop, operate, and franchise casual dining restaurants in the United States, Guam, and five foreign countries under the Ruby Tuesday brand. The company-owned and operated restaurants (i.e., non-franchise) are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest regions of the United States. RTI Holding Company and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12456) on October 7, 2020. The petitions were signed by Aziz Hashim, managing member of Manager, NRD Capital Management II, LLC. At the time of the filing, RTI Holding Company had estimated assets of between $100 million and $500 million and liabilities of the same range. Judge John T. Dorsey oversees the case. Pachulski Stang Ziehl & Jones LLP is the Debtors' legal counsel. CR3 Partners, LLC is Debtors' financial advisor; Epiq Corporate Restructuring, LLC is their claims, noticing, solicitation agent and administrative advisor. SAEXPLORATION HOLDINGS: Settles SEC's Fraud Claims -------------------------------------------------- Law360 reports that bankrupt oilfield services company SAExploration Holdings Inc. on Thursday, November 5, 2020, agreed to settle claims from the U.S. Securities and Exchange Commission that the company and its former executives committed fraud, including by inflating its revenue by $141 million. The Oct. 8, 2020 complaint alleges that since 2015, SAE's former executives inflated the company's revenue, misleading shareholders about the company's financial health and artificially inflating its stock. The settlement — which only applies to the company, not the former executives — doesn't carry a civil penalty or requirement to disgorge funds, but restrains and enjoins SAE from committing violations of related securities laws. About SAExploration Holdings Based in Houston, Texas, SAExploration Holdings, Inc. and affiliates are full-service global providers of seismic data acquisition, logistical support and processing services to their customers in the oil and natural gas industry that operate through wholly-owned subsidiaries, branch offices and variable interest entities in North America, South America, Asia Pacific, West Africa and the Middle East. For more information, visit https://www.saexploration.com/ SAExploration Holdings, Inc. and affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-34306) on August 27, 2020. The petitions were signed by Michael Faust, chairman, chief executive officer, and president. At the time of the filing, Debtors had estimated assets of between $1 million to $10 million and liabilities of between $100 million to $500 million. Judge Marvin Isgur oversees the case. The Debtors have tapped Porter H Edges LLP as their bankruptcy counsel, Imperial Capital, LLC and Winter Harbor LLC as financial advisors, and Epiq Corporate Restructuring, LLC as claims, noticing, solicitation and administrative agent. SCI DIRECT: Ohio Judge Says UST Quarterly Fee Hike Okay ------------------------------------------------------- SCI Direct, LLC and Suarez Corporation Industries and their affiliates are the reorganized debtors in the chapter 11 case, In re SCI Direct, LLC, No. 17-61735 (Bankr. N.D. Ohio). They filed an adversary proceeding captioned SCI DIRECT, LLC and SUAREZ CORPORATION INDUSTRIES, Plaintiffs, v. ANDREW R. VARA, United States Trustee for Region 9, Defendant, Case No. 17-61735, Adv. No. 19-06056 (Bankr. N.D. Ohio) on Nov. 6, 2019, seeking a determination that a 2017 amendment to 28 U.S.C. section 1930(a)(6)(B) -- which significantly increased U.S. Trustee quarterly fees for chapter 11 debtors -- is unconstitutional as applied to them in their jointly administered chapter 11 case. The Plaintiffs and Defendant have filed cross-motions for summary judgment. After careful consideration of the facts presented, Bankruptcy Judge Russ Kendig granted the Defendant's motion for summary judgment. Judge Kendig held that the 2017 amendment is constitutional and applicable to the Plaintiffs' case. The UST Program, a division of the Department of Justice, was established by Congress in 1978. USTs are tasked with numerous administrative functions in bankruptcy cases, including appointing private trustees and monitoring cases for abuse and fraud. USTs are involved in chapter 11 cases, as they conduct initial debtor interviews under 11 U.S.C. section 341, appoint committees under 11 U.S.C. section 1102, and litigate various other matters. USTs also collect graduated, quarterly fees from chapter 11 debtors, which are based on the size of the disbursements made in the case. These quarterly fees, and a portion of all bankruptcy petition filing fees, are deposited into the UST System Fund established in the United States Treasury and are used to fund the UST Program. Not every federal judicial district is part of the UST Program. The UST Program was initially created as a pilot program in certain districts. In 1986, the program was instituted across the country, with the exception of the districts in North Carolina and Alabama. "Those districts initially were required to opt in by 1992. Eventually, however, this opt-in requirement was removed altogether. In those districts, the functions of the Trustee are performed by Bankruptcy Administrators, who are employees of the Judicial Branch." Unlike UST Program Districts, quarterly fees were originally not imposed in the Bankruptcy Administrator Districts. However, in 2000 Congress enacted 28 U.S.C. section 1930(a)(7), which provides that in BA Districts "the Judicial Conference of the United States may require the debtor in a case under chapter 11 of title 11 to pay fees equal to those imposed by paragraph (6) of this subsection." Soon after 28 U.S.C. section 1930(a)(7)'s enactment, the Judicial Conference mandated the imposition of quarterly fees in BA Districts "in the amounts specified in 28 U.S.C. section 1930, as those amounts may be amended from time to time." The Plaintiffs and their affiliates filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on August 7, 2017. Their cases were procedurally consolidated and jointly administered in Case No. 17-61735. The plaintiffs' joint plan of reorganization was confirmed on Feb. 25, 2019 and became effective on April 18, 2019. The Plan provided that the Plaintiffs would pay all quarterly fees until their chapter 11 case was closed, converted, or dismissed. On the Petition Date, the maximum quarterly fee that could be charged under 28 U.S.C. section 1930(a)(6) was $30,000, or $120,000 annually. However, due to a decline in bankruptcy filings and a projected budget shortfall for the UST Program, Congress enacted the Bankruptcy Judgeship Act of 2017 on Oct. 26, 2017. Among other things, the Bankruptcy Judgeship Act amended 28 U.S.C. section 1930(a)(6) by adding subparagraph (B). The 2017 amendment significantly increased quarterly fees for chapter 11 debtors in UST Program Districts. During the first three quarters of 2019, the Plaintiffs made payments and cash disbursements in the approximate amount of $6,500,000 each quarter. If the prior version of 28 U.S.C. section 1930(a)(6) had applied, Plaintiffs would have only paid $13,000 per quarter, or $39,000 total in UST fees for the first three quarters of 2019. But Defendant, applying the 2017 amendment, submitted invoices to Plaintiffs in the amount of $64,919 per quarter, or $194,757 total for the first three quarters of 2019. When this adversary proceeding was filed, the Plaintiffs had an estimated outstanding balance of $183,242 in quarterly fees. The Plaintiffs claimed that the 2017 amendment: (1) is impermissibly retroactive pursuant to the Supreme Court's decision in Landgraf v. USI Film Products, 511 U.S. 244 (1994); (2) violates the Due Process Clause of the Fifth Amendment of the U.S. Constitution; (3) violates the Uniformity and Bankruptcy Clauses of the U.S. Constitution; and (4) violates the Takings Clause of the Fifth Amendment of the U.S. Constitution. The Plaintiffs sought a declaratory judgment stating that the 2017 amendment does not apply to them. The Defendant maintained that the 2017 amendment is constitutional and applicable to the Plaintiffs' case. The 2017 amendment became effective after the Petition Date. Plaintiffs argue that Congress did not clearly express an intent to apply the 2017 amendment to pending cases. Judge Kendig, however, held that Congress intended the 2017 amendment to apply to new and pending chapter 11 cases where qualifying disbursements were made on or after Jan. 1, 2018, including the Plaintiffs' case. But even if Congress' intent was ambiguous, the Defendant's application of the 2017 amendment to this case is not an impermissible retroactive application. Thus, the presumption against retroactivity does not apply. The Plaintiffs argued that Congress did not clearly express an intent to apply the 2017 amendment to pending cases. The Court disagreed. It is clear from the language of the 2017 amendment, the specific context in which it is used, and the broader context of the statute as a whole, that Congress intended the 2017 amendment to apply to new and pending cases where qualifying disbursements were made on or after Jan. 1, 2018, including Plaintiffs' case. Even if Congress' intent regarding the applicability of the 2017 amendment to pending cases was ambiguous, the Defendant's application of the 2017 amendment is not an impermissible retroactive application. Thus, the court need not apply the presumption against retroactivity by construing the 2017 amendment as inapplicable to the Plaintiffs' case. The Plaintiffs claim that the Defendant's application of the 2017 amendment violates their rights under the Due Process Clause. The Plaintiffs also argued that their due process rights were violated because they lacked adequate notice of the 2017 amendment when they decided to file for bankruptcy. According to the Court, the Plaintiffs' due process claim fails for several reasons. The 2017 amendment is not retroactive under Landgraf. Second, the Plaintiffs had adequate notice of the 2017 amendment, given that it went into effect more than a year before the Confirmation Date and before any qualifying disbursements were made. Third, even if the 2017 amendment was retroactive, the 2017 amendment is supported by a legitimate legislative purpose furthered by rational means. The court is sympathetic to the fact that the Plaintiffs are ultimately required to pay a much larger amount in UST fees than what they expected prior to seeking bankruptcy relief. The court also recognizes that dramatically increasing quarterly fees for chapter 11 debtors in pending cases may ultimately hinder one of the chief purposes of chapter 11, which is to preserve going concerns. But whatever the wisdom of Congress' decision, the 2017 amendment is constitutional and applicable to the Plaintiffs' case. Therefore, the court granted the Defendant's motion for summary judgment. A copy of the Court's Memorandum of Opinion is available at https://bit.ly/347KHxC from Leagle.com. About SCI Direct Suarez Corporation Industries -- http://www.suarez.com/-- is a direct marketing company currently offering hundreds of diversified products around the world. From heaters, food services, jewelry, body and skin care, collectible coins, and health products, SCI continues to lead the way through product innovation and multi-channel marketing. The Company offers services through mail, phone and internet, television, newspaper, and magazines. The company started in business in 1968 when Benjamin Suarez started a small business from his home which eventually became Suarez Corporation Industries. Suarez Corporation Industries is an operating entity involved in direct marketing products to consumers, and Retail Partner Enterprises, LLC, markets the same products on a wholesale basis to retail stores. SCI Direct, LLC, holds certain patents, trademarks, and other intellectual property used by Suarez Corporation Industries, and Retail Partner Enterprises, LLC. The entities are owned by Suarez Enterprises Holding Company. Each of SCI Direct LLC, Suarez Corporation Industries, and two affiliates filed separate voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio Case Nos. 17-61735 to 17-61738) on Aug. 7, 2017. The cases were jointly administered before the Honorable Russ Kendig under SCI Direct's Case No. 17-61735. Anthony J. DeGirolamo served as the Debtors' bankruptcy counsel. The Phillips Organization served as the Debtors' accountant. Craig T. Conley, Esq., acted as the Debtors' special counsel. Kurtzman Carson Consultants LLC served as the claims and noticing agent. Daniel M. McDermott, U.S. Trustee Region 9, appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of SCI Direct, LLC, and its debtor affiliates. The Committee tapped McDonald Hopkins LLC to represent them as bankruptcy counsel. The Debtors' joint plan of reorganization was confirmed on Feb. 25, 2019 and became effective on April 18, 2019. SCIENTIFIC GAMES: Incurs $111 Million Net Loss in Third Quarter --------------------------------------------------------------- Scientific Games Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $111 million on $698 million of total revenue for the three months ended Sept. 30, 2020, compared to net income of $18 million on $855 million of total revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $464 million on $1.96 billion of total revenue compared to a net loss of $87 million on $2.53 billion of total revenue for the same period during the prior year. As of Sept. 30, 2020, the Company had $8.10 billion in total assets, $10.64 billion in total liabilities, and a total stockholders' deficit of $2.54 billion. Barry Cottle, president and chief executive officer of Scientific Games, said, "As a result of our team's focus on our strategy, our diverse portfolio and our commitment to cost management, we delivered strong cash flow in the third quarter. I really am excited around all the great games, products and solutions we have to help our partners navigate the current environment and provide innovative solutions for the future. I'd also like to welcome the proven industry leaders to our board who will augment our focus on de-levering our balance sheet and will help the company prudently and thoughtfully shape our corporate strategy." Michael Eklund, executive vice President, chief financial officer of Scientific Games, added, "The team did a great job driving cash flow improvements this quarter, and we will continue to diligently evaluate additional opportunities to increase cash flow and de-lever. Looking ahead, our team will remain highly focused on driving operational efficiencies, further bolstering our liquidity and strengthening our balance sheet. My overarching focus is to improve the balance sheet through operational and business process improvements." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/750004/000075000420000132/sgms-20200930.htm About Scientific Games Based in Las Vegas, Nevada, Scientific Games Corporation (NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer of technology-based products and services and associated content for the worldwide gaming, lottery, social and digital gaming industries. Its portfolio of revenue-generating activities primarily includes supplying gaming machines and game content, casino-management systems and table game products and services to licensed gaming entities; providing instant and draw-based lottery products, lottery systems and lottery content and services to lottery operators; providing social casino solutions to retail consumers and regulated gaming entities, as applicable; and providing a comprehensive suite of digital RMG and sports wagering solutions, distribution platforms, content, products and services. Scientific Games reported a net loss of $118 million for the year ended Dec. 31, 2019, compared to a net loss of $352 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $7.84 billion in total assets, $10.32 billion in total liabilities, and a total stockholders' deficit of $2.48 billion. SCREENVISION LLC: S&P Downgrades ICR to 'CCC+'; Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based theater advertising company Screenvision LLC to 'CCC+' from 'B'. The coronavirus pandemic will continue to affect theater attendance and consumer behavior well into 2021. S&P said, "We anticipate U.S. cinema attendance will not begin to recover until 2021, which is later than we previously expected. This is due to the ongoing pandemic, the continued delays of film releases by major studios, and the risk that global authorities may impose stricter lockdown measures to limit local resurgences of the virus. Specifically, we believe cinema attendance will remain constrained because of consumers' health and safety concerns around returning to theaters and the imposition of social-distancing measures until an effective treatment or vaccine becomes widely available, which could occur around mid-2021, and will not recover to 2019 levels (on a per-film basis) until 2022. The studios will likely avoid releasing large tentpole films until a vaccine or treatment is readily available, which suggests that they will probably continue to delay major releases until that occurs." Screenvision's revenue is directly tied to theater attendance because it is paid by advertisers based on the number of impressions it can deliver. S&P said, "Without a substantial increase in its audience, we expect the company to generate modestly negative EBITDA and cash flow. We expect Screenvision's leverage to remain elevated in the 6x-7x range through 2021 and remain above 5x until its revenue rebounds above 70% of its 2019 levels. We do not expect this to occur in 2021 and believe there is now some risk that it will be unable to return its revenue to that level by 2022 if its audience numbers remain permanently impaired due to a reduction in its number of screens, reduced film content in 2022 due to production halts, or if advertisers are unwilling to pay pre-pandemic rates for in-theater advertising." Screenvision has enough liquidity to withstand a low attendance environment through mid-2021, though its incremental borrowing will be limited by the springing covenant on its revolver. The company had about $45 million cash, including a $10 million draw on its revolving credit facility and $14 million in remaining accounts receivable, as of June 30, 2020. Screenvision's cost structure is mostly variable and it has been able to significantly reduce its fixed costs through wage and staff reductions. S&P said, "Including its debt service, we expect the company to burn about $4 million of cash per month until its attendance materially improves from current levels. We expect Screenvision to have enough cash to remain solvent until attendance picks up in mid-2021 but believe it will likely need to access its revolver to fund its working capital because of a delay in collecting receivables from its advertisers as its revenue growth and costs return. The company has borrowed $10 million of its $30 million first-lien credit facility, though any further borrowings will be limited by the 5.5x net first-lien leverage covenant, which takes effect if it draws on at least 35% of the revolver's commitment. The company would need to obtain a covenant waiver to draw further on its revolver." Screenvision has a higher exposure to midsize and smaller theater circuits than its key peer National CineMedia Inc. and S&P believes these smaller theaters are more likely to permanently close in a bankruptcy scenario. The company also has significant exposure (roughly 15%-20% of its revenue) to AMC Entertainment Inc., which is facing considerable financial stress. In a bankruptcy scenario, all of Screenvision's exhibitor clients could potentially reject or restructure their contracts with the company. However, we do not believe any of Screenvision's major clients have an incentive to reject their contracts and expect midsize and larger exhibitors to operate as a going concern and restructure their debt obligations in a bankruptcy scenario. The bigger risk comes from Screenvision's exposure to smaller circuits that may be forced to permanently close in a bankruptcy scenario. If a significant number of smaller chains are forced to close and this pushes an even greater share of theater patrons toward the three largest theater chains, which are primarily serviced by National CineMedia Inc., it could permanently impair Screenvision's audience. Significant client losses could also cause the company's capital structure to become unsustainable over the long term. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety factors The negative outlook reflects the uncertainty around whether consumers will return to theaters and incorporates the potential that a slower recovery in theater attendance or a more prolonged drop in national advertising than S&P currently expects would cause the company's cash balance to deteriorate over the next 12 months. S&P could lower its ratings on Screenvision under the following scenarios: -- If S&P expects theater attendance to remain weak into the second half of 2021 such that the company will not have enough liquidity to operate through 2021; -- If S&P does not believe the company will be able to fund its working capital obligations when theater attendance begins to recover; or -- If there are widespread bankruptcies of small- to midsize theater chains such that S&P expects Screenvision's audience will be permanently impaired. S&P said, "We could revise our outlook on Screenvision to stable if theater attendance recovers in the first half of 2021 and reaches a level that enables the company to generate positive free cash flow and we believe it does not face any near-term liquidity risks. Before revising our outlook to stable, we would also likely require confirmation that small to midsize theaters will not face widespread bankruptcies or permanent closures and Screenvision's audience will remain stable." SIMPLY GOOD FOODS: S&P Alters Outlook to Stable, Affirms 'B+' ICR ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' issuer credit rating on U.S.-based The Simply Good Foods Co. and revised its outlook to stable from negative because the company is on track with the Quest Nutrition LLC integration and is paying down debt. S&P said, "We are raising our issue-level ratings on the senior secured credit facilities to 'BB-' from 'B+' and revising the recovery rating to '2' (rounded recovery: 70%) from '3'. The higher issue rating and revised recovery rating reflect the company's debt reduction on the first-lien debt, improving the recovery prospects on the facilities." "The outlook revision reflects the company's on-track integration of Quest, debt reduction, and ability to maintain profits, despite recent headwinds from the pandemic. We estimate debt leverage declined to roughly 4.1x for the fiscal year ended Aug. 29, 2020, from nearly 5x at close of the deal. During fiscal 2020, the company paid down $50 million of its term loan and $25 million that it had preemptively drawn on its revolver. For fiscal 2020, the legacy Atkins business managed to grow 1.2% organically or 3.2% excluding the impact of the 53rd week last year. The growth reflected gains in e-commerce and club channels and pantry loading at the start of the pandemic. This gain occurred despite declines in bars and ready-to-drink (RTD) shakes as consumers remained less mobile, which hurt away-from-home consumption as well as reflected consumers' reduced focus on weight management. Quest continues to post growth, especially in its snack products. We estimate pro forma S&P Global Ratings-adjusted EBITDA of about $152 million, slightly below our original forecast last year due to the pandemic, but enough to reduce leverage and generate good cash flow. The company has successfully completed the first phase of the Quest integration and is on pace to realize the remaining $20 million in synergies by fiscal 2022. The company completed its ERP integration, which was in our view, the largest risk of the integration, and is on target in consolidating the remainder of the supply chain." "We expect financial policy to remain prudent, with management maintaining its stated long-term target of leverage between 3x-4x (S&P Global Ratings' adjusted about 4x-5x). Management initially funded over 55% of the Quest acquisition with equity and cash, supporting a more rapid deleveraging. We also believe this decision illustrates management's commitment to keep leverage within the lower bounds of its stated target range, but potentially rise temporarily for acquisitions. We expect the company to seek smaller acquisitions, primarily in the better-for-you snacking and health and wellness categories. We do not expect larger deals over the next 12 months as it continues to integrate Quest." "COVID-19 shopping patterns could continue to pressure operating performance and we believe the largest risk to our forecast is a continued rise in COVID-19 cases and increased restrictions. Stay-at-home orders and store closures have led to changes in consumer buying patterns, which reduced demand for on-the-go products such as bars and RTD shakes. Consumers are purchasing staples to create meals at home because that is where most meal consumption is taking place; this has lowered the demand for Simply Good Foods' on-the-go and meal replacement products. In addition, consumers are going into retail locations with specific items in mind and are being more efficient as they go through the store to decrease their exposure to others. This trend lowered the amount of people shopping in the health and wellness aisle where the company's products are sold, which was previously considered a competitive advantage. As restrictions eased, nutritional snacking trends have improved. However, a second surge in cases and additional restrictions in the winter months could hurt demand. Still, we expect the company to be able to offset some of the declines in the mass channel with greater e-commerce sales and growth in its snacking categories, especially with the Quest brand. We also believe that consumers will eventually refocus on weight management." "The company's strong brands and asset-light model supports strong cash flow generation, positioning it well despite near-term headwinds. Simply Good Foods holds a strong market position in the nutritional snacking category, despite competing in a highly crowded space. The company's sales are concentrated with the Atkins and Quest brand names, which leaves it vulnerable to reputational damage or changing consumer tastes and preferences. The company operates an asset-light business model, limiting its fixed overhead. This provides greater flexibility and downside protection if demand remains soft. The company's marketing budget is a significant portion of operating expenses, though it has been effective and is necessary to communicating and positioning Atkins as a lifestyle brand. The Quest brand, which caters to a younger demographic, utilizes more social media marketing but is expected to be supported with marketing to drive growth as well. We expect the company to continue to invest heavily in its brands, especially as head into the new year as consumers have historically focused on weight loss and nutrition. We forecast the company will generate at least $80 million free operating cash flow for fiscal 2021. We expect capital expenditures to remain low, at about $5 million to $6 million for fiscal 2021, driven by equipment at its new consolidated warehouse." "The stable outlook reflects our expectation that the company will maintain debt leverage of around 4x and below during the next year, despite potential weakness for its weight management and on-the-go products as consumers continue to experience limited mobility. The company's favorable market position in the health and wellness industry and asset-light model should support its ability to continue to generate solid cash flows. We also believe that the company can achieve the remainder of its synergy targets from the Quest acquisition. Going forward, we expect the company to only reduce debt by its required debt amortization and will use discretionary cash flow for its acquisition growth strategy and if it uses debt to fund a portion of acquisitions it will return adjusted leverage below 5.0x within 12 months of the acquisition close." "We could lower the ratings if the company's operating performance deteriorates, resulting in leverage rising above 5x." This could happen if: -- The pandemic worsens, resulting in more restrictions on consumer mobility and lower demand for bars and RTD beverages; -- The company loses market share to private label or other competitors; or -- It makes another large, debt-financed acquisition. While unlikely, S&P could consider raising the rating if: -- The company increases its scale and product diversity while demonstrating less-aggressive financial policies, such that S&P views event risk as a lesser issue and leverage is maintained under 3x. SMARTOURS LLC: Winston, Young Represent Secured Parties ------------------------------------------------------- In the Chapter 11 cases of Smartours, LLC, et al., the law firms of Winston & Strawn LLP and Young Conaway Stargatt & Taylor, LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that they are representing the Secured Parties. The Secured Parties are comprised of the following institutions or funds, accounts and entities managed by the following institutions: First Eagle Alternative Capital Agent, Inc., First Eagle Alternative Capital BDC, Inc., First Eagle Direct Lending Fund III, LLC, First Eagle Direct Lending Fund III (A), LLC, First Eagle Direct Lending Co-Invest III, LLC, and First Eagle Direct Lending Co-Invest III (E), LLC. In or around October 2020, the Secured Parties retained Young Conaway to represent them in their respective capacities as administrative and collateral agent and as holders of term loans advanced under the Credit Agreement. As of Nov. 2, 2020, each of the Secured Parties and their disclosable economic interests are: First Eagle Alternative Capital BDC, Inc. 500 Boylston Street, 12th Floor Boston, MA 02116 * Revolving Loan Holdings: $183,453.31 * Term Loan Holdings: $5,141,411.89 * Equity Interests: $215,827.00 First Eagle Direct Funding III, LLC 500 Boylston Street, 12th Floor Boston, MA 02116 * Revolving Loan Holdings: $418,605.57 * Term Loan Holdings: $6,786,064.50 * Equity Interests: $492,477.00 First Eagle Direct Funding III (A), LLC 500 Boylston Street, 12th Floor Boston, MA 02116 * Revolving Loan Holdings: $195,735.33 * Term Loan Holdings: $3,173,087.04 * Equity Interests: $230,277.00 First Eagle Direct Funding Co-Invest III, LLC 500 Boylston Street, 12th Floor Boston, MA 02116 * Revolving Loan Holdings: $19,578.90 * Term Loan Holdings: $317,393.20 * Equity Interests: $23,034.00 First Eagle Direct Funding Co-Invest III (E), LLC 500 Boylston Street, 12th Floor Boston, MA 02116 * Revolving Loan Holdings: $32,626.89 * Term Loan Holdings: $528,918.37 * Equity Interests: $38,385.00 Each of First Eagle and the DIP Lenders separately requested that Counsel represent it in connection with these chapter 11 cases in their respective capacities under the Credit Agreement. Counsel represents only the interests of the certain DIP Lenders listed on Exhibit A hereto and does not represent or purport to represent any other entities or interests in connection with these chapter 11 cases, except that Counsel represents First Eagle in its separate capacities as administrative agent and collateral agent under the Credit Agreement. In addition, each of the DIP Lenders does not purport to act, represent, or speak on behalf of any entity in connection with the Debtors' chapter 11 cases other than itself. Counsel does not hold claims against or interests in the above-captioned Debtors or their estates. Nothing in this Statement shall be construed as (i) a limitation upon, or waiver of, the rights of each of the DIP Lenders or First Eagle to assert, file, or amend its or their claims in accordance with applicable law and any orders entered in these cases, or (ii) an admission with respect to any fact or legal theory. Neither Winston nor Young Conaway hold any disclosable economic interests in relation to the Debtors. Counsel reserves the right to supplement or amend this Statement at any time for any reason. Co-Counsel to the Secured Parties can be reached at: YOUNG CONAWAY STARGATT & TAYLOR, LLP M. Blake Cleary, Esq. Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Email: mbcleary@ycst.com - and - Gregory M. Gartland, Esq. Samantha Ruppenthal, Esq. WINSTON & STRAWN LLP 200 Park Avenue New York, NY 10166-4193 Telephone: (212) 294-6700 Facsimile: (212) 294-4700 Email: ggartland@winston.com sruppenthal@winston.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/354RqbT About Smartours LLC smarTours LLC is a travel company that offers tour packages with airfare, hotels, and more included. Founded in 1996, smarTours is a provider of direct-to-consumer, value-oriented travel experiences to a variety of domestic and global destinations. It offers both pre-packaged tours with pre-set departure dates for individual travelers and customized private tours for passenger groups consisting of more than 20 persons. smarTours, LLC and an affiliate sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12625) on Oct. 19, 2020. The Hon. Karen B. Owens is the case judge. The Debtors have tapped Nixon Peabody LLP as its bankruptcy counsel, Cross & Simon, LLC as local Delaware counsel, and Ariste Advisors LLC as financial advisor. Prime Clerk LLC is the claims agent. SOCO REAL ESTATE: Ruling on Little City Investments' Claim Flipped ------------------------------------------------------------------ In the appellate case captioned Gerald McMillan, Appellant, v. Little City Investments, LLC, Appellee, No. 03-19-00430-CV (Tex. App.), McMillan appealed from a summary judgment in favor of Little City Investments, LLC. McMillan sought to set aside the foreclosure and sale of the Austin Property to Little City. Upon review, the Court of Appeals of Texas reversed the district court's judgment finding that the fifth notice of lis pendens constituted a fraudulent lien and awarding Little City damages under section 12.002 of the Civil Practice and Remedies Code; and rendered judgment that Little City takes nothing on its claim for a fraudulent lien. The district court's judgment was otherwise affirmed. In October 2014, Little City loaned money to SOCO Real Estate, LLC, to purchase real property located at 808 Avondale Road in Austin. McMillan and his wife own SOCO. On SOCO's behalf, McMillan executed a promissory note in the original principal amount of $960,000. The note was secured by a deed of trust. Approximately one year later SOCO defaulted, and Little City declared the note due on Nov. 1, 2015. Rather than proceed with foreclosure, Little City and SOCO entered into a Reinstatement Agreement, extending the maturity date of the note and providing for new payment terms. The note matured on the extended date of Dec. 31, 2016. Little City declared SOCO in default for nonpayment. In February 2017, McMillan filed suit in Travis County district court, seeking a restraining order to prevent foreclosure. The trial court granted a temporary ex parte restraining order preventing the sale, after which McMillan voluntarily dismissed the suit. In March 2017, McMillan filed a second suit in Travis County district court, again seeking to restrain Little City from foreclosing on the Property. McMillan alleged various causes of action, including fraud, negligent misrepresentation, and breach of contract. The district court granted Little City's no-evidence motion for summary judgment and dismissed the suit in November 2017 on the ground that McMillan failed to present evidence sufficient to show that he had standing. Meanwhile, SOCO had filed for Chapter 11 bankruptcy protection in April 2017. In July 2017, the US Bankruptcy Court for the Western District of Texas lifted the bankruptcy stay to allow Little City to foreclose on the Property. Substitute trustee Robert Black conducted the foreclosure sale in October 2017 on the steps of the Travis County courthouse. After the foreclosure, McMillan refused to vacate the Property, and Little City filed a forcible detainer action in a Travis County justice court. The justice of the peace rendered judgment granting Little City possession of the Property. This judgment was appealed to a Travis County court at law, which awarded possession of the Property to Little City. McMillan appealed the county court judgment to the Court of Appeals for the Fourteenth Judicial District, which dismissed the appeal on McMillan's motion in July 2018. In December 2017, McMillan filed a third lawsuit in Travis County district court, seeking to set aside the foreclosure and sale of the Property. According to McMillan, that suit alleged that Little City "orchestrat[ed] chilled bidding in concert with the substitute trustee, Robert Black[,] for failing to accept the bid of an investor." Little City filed a plea to the jurisdiction, asserting, among other things, that McMillan lacked standing to challenge the foreclosure because he was not the mortgagor on the deed of trust pursuant to which Little City foreclosed on the Property. The district court granted the plea to the jurisdiction in March 2018, and McMillan appealed. This Court modified the district court's judgment to reflect that McMillan's claims were dismissed without prejudice and affirmed the judgment as modified. To cure the jurisdictional defect, McMillan purchased from SOCO's bankruptcy trustee "the Bankruptcy Estate's potential cause(s) of action against Little City Investments, LLC resulting from the foreclosure of [the Property]." McMillan then filed the underlying proceeding in January 2019, seeking to set aside the foreclosure sale on the same ground he alleged in the third lawsuit -- that Little City's substitute trustee took actions that "led to chilled bidding, and there is a direct and evident causal connection between this sale defect and the grossly inadequate selling price of the Property." Over the course of the litigation concerning the Property, McMillan has filed five notices of lis pendens against the Property, four of which were expunged in previous lawsuits. On the same day that Little City answered this underlying suit, it also filed a no-evidence and traditional motion for summary judgment and an application for an anti-suit injunction. In addition, Little City filed a motion to expunge McMillan's fifth notice of lis pendens. A hearing on Little City's motion for summary judgment, application for injunction, and motion to expunge lis pendens was scheduled for March 14, 2019, at 2:00 p.m. Before starting that hearing, the district court noted that at 5:05 a.m. that morning, McMillan sent an email to Little City advising of his intent to appear before the duty judge at 9:30 a.m. to seek a continuance of the hearing on Little City's motions. The district court read the duty judge's docket note from earlier that morning, stating that although counsel for Little City appeared at the continuance docket, McMillan did not. Because McMillan had not appeared as of 11:00 a.m. and had not filed any written motion for a continuance, the duty judge took no action to postpone the 2:00 p.m. hearing. McMillan told the district court that he decided not to attend the continuance docket that morning because he was hesitant the court won’t accept his testimony. McMillan further stated that he attempted to contact Little City's counsel by calling his office at 9:45 a.m., while counsel was in the duty judge's courtroom. McMillan said he spoke to a legal assistant, who, after speaking to Little City's counsel, informed McMillan that he could try to make an oral motion. McMillan told the legal assistant he had to think about it. Seventeen minutes before the scheduled hearing on Little City's motions, McMillan filed a written motion for continuance. The motion specified that McMillan sought a continuance because Little City had engaged in "deception" to prevent McMillan from timely responding to Little City's motions. The record showed that McMillan had notice of the hearing but his response to the summary-judgment motion was filed late. Counsel for Little City waived "any objection" to the untimeliness of McMillan's response, and McMillan replied that they don't have an issue. McMillan's response to Little City's motion for summary judgment referred to attachments to his response. The court observed that the response on file did not contain all the referenced attachments. In fact, McMillan's response contained cover pages for sixteen exhibits, but included only four actual exhibits. McMillan stated that this was an error on the part of the person who helped him file the documents. The court allowed McMillan until midnight following the hearing to file the twelve missing exhibits. Little City waived any objection to the timeliness of those documents but did not waive evidentiary objections. Little City also requested that the court take judicial notice of the court's file, which contained information regarding McMillan's previous lawsuits, and the court did so. McMillan filed several exhibits, and Little City filed objections to some of McMillan's evidence. After ruling on Little City's evidentiary objections, the district court entered an order granting Little City summary judgment on both no-evidence and traditional grounds, expunging the lis pendens and finding that it constituted a fraudulent lien, and granting an anti-suit injunction against McMillan to prohibit him and his successors and assigns from filing any lawsuits against Little City related to the Property or filing any notices of lis pendens against the Property. McMillan appeals, asserting that the district court erred in (1) granting summary judgment, (2) expunging the fifth notice of lis pendens on the Property and finding that it constituted a fraudulent lien, and (3) granting the injunction. The Court held that the affidavits proffered by McMillan did not provide more than a scintilla of evidence that there was a defect in the foreclosure sale proceedings. Accordingly, the Court overruled McMillan's first issue and need not consider whether the motion should have been granted under the standard for traditional summary judgment. In pursuing his claims against Little City, McMillan recorded a fifth notice of lis pendens regarding the Property in the Official Public Records of Travis County. After granting Little City's motion for summary judgment, the district court ordered the notice of lis pendens expunged. The district court's expunction of the notice of lis pendens conformed to the Property Code's requirement that a court order a notice of lis pendens expunged if it determines that the claimant fails to establish by a preponderance of evidence "the probable validity of the real property claim." The district court also determined that the fifth notice of lis pendens constituted a fraudulent lien on the Property. Because the fifth notice of lis pendens was filed in relation to a different suit and after McMillan had acquired standing to assert a claim for wrongful foreclosure of the Property, the Appeals Court concluded Little City has not carried its burden on this record to show that McMillan had knowledge that the fifth notice of lis pendens was fraudulent. The Court reversed the district court's determination that the fifth notice of lis pendens constituted a fraudulent lien and rendered judgment that Little City recover no damages under section 12.002 of the Civil Practice and Remedies Code based on the fifth notice of lis pendens. A copy of the Court's Memorandum Opinion is available at https://bit.ly/37ycqcG from Leagle.com. About SOCO Real Estate Based in Austin, Texas, SOCO Real Estate, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 17-10393) on April 4, 2017. The petition was signed by Gerald McMillan, managing member. At the time of the filing, the Debtor estimated its assets and debt at $1 million to $10 million. Mark A. Castillo, Esq., and Bryan C. Assink, Esq., at Curtis | Castillo PC, served as counsel to the Debtor. The case was converted to Chapter 7 in November 2017. SOURCE ENERGY: DBRS Lowers Issuer Rating to Selective Default ------------------------------------------------------------- DBRS Limited downgraded Source Energy Services Canada LP and Source Energy Services Canada Holdings Ltd.'s (together, the Co-Issuers) Issuer Rating to Selective Default (SD) from CCC (low) and Senior Secured First Lien Notes (the Senior Notes) rating to Default (D) from CCC (low). Additionally, DBRS Morningstar discontinued the Recovery Rating on the Senior Notes. The rating actions remove the ratings from Under Review with Negative Implications, where they were placed on March 26, 2020. The downgrades follow the announcement by the ultimate holding company of the Co-Issuers, Source Energy Services Ltd. (Source or the Company), that the Court of Queen's Bench of Alberta has issued an interim order with respect to Source's proposed recapitalization transaction (the Transaction) announced on October 7, 2020 (see "DBRS Morningstar Comments on Source Energy Services Ltd.'s Proposed Recapitalization Transaction" dated October 9, 2020). The Transaction involves, among other things, exchanging the Senior Notes issued by the Co-Issuers in the aggregate principal amount of approximately $157.71 million due December 15, 2021, along with all accrued and unpaid interest, for a combination of (1) new senior secured first lien notes (New Senior Notes) of $125 million due March 15, 2025, plus accrued interest on the Senior Notes to and including June 15, 2020; and (2) the issuance of new common shares of Source, constituting approximately 62.5% of the common shares outstanding on a fully diluted basis, immediately following completion of the Transaction. DBRS Morningstar considers the proposed terms of the exchange under the Transaction as disadvantageous to the Senior Note holders. As a result, based on the assumption of approval, the exchange for New Senior Notes is considered a distressed exchange and the ratings of the Senior Notes have been downgraded to D. Given that the proposed transaction does not affect any other obligations of the Company, and Source will continue to satisfy its obligations to customers, suppliers, employees, and governmental authorities in the ordinary course of business, DBRS Morningstar has downgraded the Issuer Rating to SD. The proposed Transaction will be implemented through a corporate Plan of Arrangement under the Canada Business Corporations Act with the shareholder's and Senior Note holder's meeting scheduled for November 27, 2020. Source has entered into support agreements pursuant to which approximately 74% of the Senior Noteholders and approximately 45% of the common shareholders have agreed to support the Transaction. DBRS Morningstar notes that the Transaction, if successfully completed, will improve the Company's credit profile with improved liquidity and more financial flexibility. DBRS Morningstar will likely reassess the Issuer Rating at close of the Transaction based on the Company's revised capital structure and business plan. Notes: All figures are in Canadian dollars unless otherwise noted. SPI ENERGY: Issues $2.1 Million 10% Convertible Promissory Note --------------------------------------------------------------- SPI Energy Co., Ltd. issued a $2.1 million 10% convertible promissory note to Streeterville Capital, LLC, a Utah limited liability company. The convertible promissory note, which was approved by SPI's board of directors, bears interest at 10% and has a maturity date of Nov. 2, 2021. All or any portion of the note is convertible into shares of SPI common stock at $26.00 per share. The convertible promissory note was issued pursuant to Rule 506 under Regulation D promulgated under the Securities Act of 1933, as amended. About SPI Energy Co., Ltd. SPI Energy -- http://www.spigroups.com/-- is a global provider of photovoltaic solutions for business, residential, government and utility customers, and investors. The Company develops solar PV projects that are either sold to third party operators or owned and operated by the Company for selling of electricity to the grid in multiple countries in Asia, North America and Europe. The Company's subsidiary in Australia primarily sells solar PV components to retail customers and solar project developers. The Company has its operating headquarter in Hong Kong and its U.S. office in Santa Clara, California. The Company maintains global operations in Asia, Europe, North America, and Australia. SPI Energy reported a net loss attributable to shareholders of the Company of $15.26 million for the year ended Dec. 31, 2019, compared to a net loss attributable to shareholders of the Company of $12.28 million for the year ended Dec. 31, 2018. Marcum Bernstein & Pinchuk LLP, in Beijing China, the Company's auditor since 2018, issued a "going concern" qualification in its report dated June 29, 2020, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SUPERIOR PLUS: DBRS Confirms BB(high) Issuer Rating, Trend Stable ----------------------------------------------------------------- DBRS Limited confirmed the Issuer Rating of Superior Plus LP at BB (high) and the Senior Unsecured Debentures rating at BB based on the unchanged recovery rating of RR5. Both trends are Stable. The rating confirmations reflect DBRS Morningstar's expectation that Superior Plus' leverage will remain at a level commensurate with the current ratings in the near term while the Company continues its strategy to execute tuck-in acquisitions. The rating confirmations also consider Brookfield Asset Management Inc.'s (Brookfield; rated A (low) with a Stable trend by DBRS Morningstar) $350 million investment in Superior Plus in July 2020, providing the Company with funds and flexibility in an environment in which acquisition opportunities may be more attractive. The rating confirmations are also driven by the Company's proven track record of successfully integrating acquisitions and their relative similarity in terms of business model and geography, and leading position in the Canadian propane distribution market. Finally, the rating confirmations also take into account the disruptions from Coronavirus Disease (COVID-19) that led to somewhat lower demand for propane and specialty chemicals because of the overall lower economic activity across the sector that Superior Plus services. Since the Brookfield investment in the form of preferred shares, the Company announced three acquisitions. On September 1, 2020, Superior Plus closed the acquisition of U.S.-based retail propane and heating oil distribution company Rymes Propane & Oil for $210 million, the largest acquisition this year. Superior Plus has spent nearly $300 million on four separate acquisitions in 2020. DBRS Morningstar expects Superior Plus' debt-to-EBITDA for the end of 2020 and in 2021 to be below 4.0 times and cash-flow-to-debt to be slightly above 20%, levels that remain commensurate with the current rating, based on the Brookfield investment, acquisitions, effect of warmer-than-usual weather in the first part of the year, as well as coronavirus-related disruptions. DBRS Morningstar anticipates no change in Superior Plus' strategy to make tuck-in acquisitions funded through revolver drawings in particular in the propane distribution sector in the United States; these acquisitions help the Company grow into the higher-margin retail propane market and reduce exposure to the lower-margin wholesale refined fuel business. In addition, DBRS Morningstar continues to expect Superior Plus to manage its credit metrics within levels consistent with the ratings, as acquired assets contribute earnings and synergies are realized with somewhat of a lag versus the debt funding of these acquisitions. In addition to its proven track record of successfully integrating acquisitions, the Company has also shown that it can improve leverage in a relatively short time frame following a large debt-funded acquisition. The ratings remain well supported by Superior Plus' excellent brand strength and reputation for outstanding customer service. The importance of the Company's propane and chemical products to clients and the relatively well-diversified customer base help to ensure a steady level of demand for Superior Plus' products. The economic drivers of propane demand are generally different from those underlying demand for the Company's specialty chemicals products, offering some diversification benefits over the long term. The Company's position as a leading distributor of propane in Canada and emergence as a significant player in the northeastern U.S. propane market also help to support the ratings. Challenges include external factors beyond the Company's control, such as seasonal and cyclical drivers in its end markets and volatile raw material costs in the specialty chemicals business, which may have a negative impact on earnings and cash flow. The Company also faces structural challenges, such as the fragmented nature of the propane distribution market as well as the financial and integration risks associated with its current acquisition strategy. Overall, Superior Plus' operating performance and business risk profile continue to support the current ratings. DBRS Morningstar expects the Company to remain acquisitive and, given the fragmented nature of the propane distribution sector, there is no shortage of tuck-in acquisition targets available. However, if financial policy shifts, significant debt-financed acquisitions (especially during a period of notable market weakness), negative free cash flow, or difficulties and delays in integrating newly acquired businesses cause leverage metrics to deteriorate beyond what is considered commensurate with the ratings for an extended period of time, DBRS Morningstar could consider a negative rating action. Conversely, DBRS Morningstar would likely consider a positive rating action only if the Company demonstrated a commitment to a materially stronger financial profile over a longer period. Notes: All figures are in Canadian dollars unless otherwise noted. TITAN INTERNATIONAL: Incurs $12.6 Million Net Loss in Third Quarter ------------------------------------------------------------------- Titan International, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the Company of $12.64 million on $304.77 million of net sales for the three months ended Sept. 30, 2020, compared to a net loss attributable to the company of $19.14 million on $345.90 million of net sales for the three months ended Sept. 30, 2019. The third quarter of 2020 results include an expense of $5.0 million for a contingent legal accrual related to an anticipated litigation settlement. For the nine months ended Sept. 30, 2020, the Company reported a net loss attributable to the Company of $43.17 million on $932.40 million of net sales compared to a net loss attributable to the Company of $23.59 million on $1.14 billion of net sales for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $1.01 billion in total assets, $822.13 million in total liabilities, $25 million in redeemable noncontrolling interest, and $169.21 million in total equity. Paul Reitz, president and chief executive officer commented, "We're proud that we again produced very solid financial results this quarter on almost all fronts despite an environment filled with uncertainty and challenges. In many aspects the third quarter financial results were a continuation of what we achieved during the second quarter as we again had strong margin performance, good working capital management, and improvements in our balance sheet leading the way to another solid quarter. During the quarter, we increased our cash balance by more than $18 million while also continuing to lower our debt. At $366 million, our net debt represents the lowest level since Q3 2018 and has improved $85 million over the past twelve months. During the course of the pandemic, we have outlined several steps we would take to weather the uncertainty and position Titan for the future, and I am very pleased with the accomplishments we have made thus far both operationally and financially. We now anticipate full year adjusted EBITDA to be in the range of $40 million to $44 million. "We are currently in the midst of our planning process for 2021 and believe next year has plenty of reasons to be optimistic. Latin American Ag has seen a strong jump in orders with good visibility into next year for that growth to continue. The North American harvest season is going well as corn prices are in that important $4 range and soybean prices have reached a multi-year high. As a result, farmer income is expected to increase over 20 percent with farmer sentiment and dealer expectations significantly improving in recent polls. As everyone knows, the age of fleet in the large Ag segment is well above the replacement trend lines, and inventory levels are also at relatively low levels. Couple that with higher commodity prices and government support programs, and the catalysts are there for market growth. We are optimistic for what that will mean for demand in North American Ag in upcoming months. "Our Earthmoving & Construction business has done an exceptional job managing margins within a difficult sales environment. In the third quarter, our segment gross margin percentage grew 180 basis points to 10.1 percent as compared to 8.3 percent last year despite a drop in net sales of more than 20 percent. While market conditions remain tough, there are some market signals that bode well for next year as dealer inventories are low and global housing continues to show growth, plus the possibility that governments will provide support for infrastructure spending as a mechanism for demand to rebound from the pandemic. "Titan's third quarter financial results and our impressive improvements in our balance sheet and liquidity position demonstrate that we continue to navigate the pandemic challenges quite well; positioning ourselves for a stronger 2021 and ultimately for refinancing our bonds which mature in 2023. Our team has and will continue to remain diligently focused on making good, timely decisions and taking swift actions to adjust to an evolving world while we have our eyes on a future that continues to look better." Financial Condition The Company ended the third quarter of 2020 with total cash and cash equivalents of $98.8 million, compared to $66.8 million at Dec. 31, 2019. Long-term debt at Sept. 30, 2020, was $431.8 million, compared to $438.5 million at Dec. 31, 2019. Short-term debt was $32.6 million at September 30, 2020, compared to $61.3 million at Dec. 31, 2019. Net debt (total debt less cash and cash equivalents) was $365.7 million at Sept. 30, 2020, compared to $432.9 million at Dec. 31, 2019. Net cash provided by operating activities for the first nine months of 2020 was $47.4 million, compared to net cash provided by operations of $31.2 million for the comparable prior year period. Capital expenditures were $13.4 million for the first nine months of 2020, compared to $26.3 million for the comparable prior year period. Capital expenditures during the first nine months of 2020 and 2019 represent critical equipment replacement and improvements, along with new tools, dies and molds related to new product development. The overall capital outlay for 2020 is being suppressed as a direct response to cash preservation activities as a result of the impact of the COVID-19 pandemic on the business. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/899751/000089975120000065/twi-20200930.htm About Titan Titan International, Inc. -- http://www.titan-intl.com-- is a global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products. Headquartered in Quincy, Illinois, the Company globally produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. Titan reported a net loss of $51.52 million for the year ended Dec. 31, 2019, compared to net income of $13.04 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $1.06 billion in total assets, $856.33 million in total liabilities, $25 million in redeemable noncontrolling interest, $178.92 million in total equity. * * * As reported by the TCR on June 23, 2020, S&P Global Ratings affirmed its ratings on Titan International Inc., including the 'CCC+' issuer credit rating. S&P expects weak demand to lower Titan's profitability, causing negative free operating cash flow (FOCF) generation in 2020. As reported by the TCR on May 11, 2020, Moody's Investors Service downgraded its ratings for Titan International, including the company's corporate family rating to 'Caa3' from 'Caa1'. The downgrades reflect expectations for challenging industry conditions through 2020 to pressure Titan's earnings and cash flow, resulting in the company's capital structure remaining unsustainable with excessive financial leverage above 10x debt/EBITDA likely into 2021 and a weak liquidity profile reliant on external and alternative funding sources. TOP THAT COMMERCIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Top That Commercial Roofing Inc. 7076 S. Alton Way, Bldg. E-2 Englewood, CO 80112 Business Description: Top That Commercial Roofing Inc. -- http://topthatroofing.com-- locally owned roofing and construction company, based in the Denver Metro area serving Centennial, Lakewood, Aurora, Boulder, Lafayette, Louisville, Thornton, Westminster, Castle Rock, Littleton, Englewood, Lone Tree, Greenwood Village, Parker, Franktown, Elizabeth, Fort Collins, Greeley, Loveland, Longmont, Colorado Springs and the entire front range of Colorado. Chapter 11 Petition Date: November 6, 2020 Court: United States Bankruptcy Court District of Colorado Case No.: 20-17282 Judge: Hon. Thomas B. Mcnamara Debtor's Counsel: Aaron J. Conrardy, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 Email: aconrardy@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Phil Theriault, president/sole shareholder. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KDWD5BQ/Top_That_Commercial_Roofing_Inc__cobke-20-17282__0006.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FUXRBNA/Top_That_Commercial_Roofing_Inc__cobke-20-17282__0001.0.pdf?mcid=tGE4TAMA TOWN SPORTS: Sale of All Assets to New TSI Approved --------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized Town Sports International, LLC and affiliates to sell substantially all assets to New TSI Holdings, Inc. and its designees. The consideration for the Acquired Assets will be (a) the assumption of the Assumed Liabilities, (b) the credit bid in an amount then-outstanding under the Prepetition Senior Secured Debt, in an amount equal to $80 million, and (c) the amount, paid in cash, equal to $1 million) payable to general unsecured creditors; and (d) an amount, paid in cash (in an amount not to exceed $3.185 million), equal to the Cash Shortage to be used solely in connection with the Wind-Down. The sale is free and clear of all Liens and Claims. The Asset Purchase Agreement and all other ancillary documents, and all of the terms and conditions thereof, including the Credit Bid Claim, are approved. The Debtors are authorized and directed to (a) assume and assign to the Buyers, in accordance with the terms of the APA, the Designated Contracts free and clear of all Liens, Claims, and other interests of any kind or nature whatsoever (other than Contract Liabilities), and (b) execute and deliver to the Buyers such documents or other instruments as the Buyers deem necessary to assign and transfer the Designated Contracts to the Buyers in accordance with the APA. Pursuant to section 2.5(c) of the APA, in full and final satisfaction of the DIP Obligations, on the Closing Date, the Buyers will assume all DIP Obligations outstanding as of the Closing Date and thereupon such DIP Obligations will become Assumed Liabilities under the APA. For the avoidance of doubt, nothing in the Sale Order will be deemed to alter or modify the parties' obligations under section 5.28 of the DIP Order. Notwithstanding the provisions of Bankruptcy Rule 6004(h) and Bankruptcy Rule 6006(d), and pursuant to Bankruptcy Rules 7062(g) and 9014, the Sale Order will not be stayed, will be effective immediately upon entry, and the Debtors and the Buyers are authorized to close the Sale immediately upon entry of the Sale Order. Time is of the essence in closing the transactions referenced, and the Debtors and the Buyers intend to close the Sale as soon as practicable. A copy of the APA is available at https://tinyurl.com/y3o4pn45 from PacerMonitor.com free of charge. About Town Sports Town Sports International, LLC and its subsidiaries are owners and operators of fitness clubs in the United States, particularly in the Northeast and Mid-Atlantic regions. As of Dec. 31, 2019, the Company operated 186 fitness clubs under various brand names, collectively serving approximately 605,000 members. Town Sports owns and operates brands such as New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs, Lucille Roberts and Total Woman. Town Sports and several of its affiliates filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 20-12168) on Sept. 14, 2020. The petitions were signed by Patrick Walsh, chief executive officer. The Debtors were estimated to have $500 million to $1 billion in consolidated assets and consolidated liabilities. The Hon. Christopher S. Sontchi presides over the cases. Young Conaway Stargatt & Taylor, LLP, and Kirkland & Ellis LLP have been tapped as bankruptcy counsel to the Debtors. Houlihan Lokey, Inc., serves as financial advisor and investment banker to the Debtors, and Epiq Corporate Restructuring LLC acts as claims and noticing agent to the Debtors. TRANSOCEAN LTD: Posts $359 Million Net Income in Third Quarter -------------------------------------------------------------- Transocean Ltd. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $359 million on $773 million of contract drilling revenues for the three months ended Sept. 30, 2020, compared to a net loss of $825 million on $784 million of contract drilling revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $529 million on $2.46 billion of contract drilling revenues compared to a net loss of $1.20 billion on $2.29 billion of contract drilling revenues for the same period in 2019. As of Sept. 30, 2020, the Company had $22.47 billion in total assets, $1.55 billion in total current liabilities, $9.52 billion in total long-term liabilities, and $11.40 billion in total equity. Contract drilling revenues for the three months ended Sept. 30, 2020, decreased sequentially by $157 million, primarily due to $177 million of revenues recognized in second quarter 2020 as a result of a legal settlement agreement with a customer for performance disputes, partially offset by higher revenues from increased utilization and an additional operating day. Additionally, a non-cash revenue reduction of $57 million, was recognized in the third quarter as a result of contract intangible amortization associated with the Songa and Ocean Rig acquisitions. This compared to $53 million in the prior quarter. Operating and maintenance expense was $470 million, compared with $525 million in the prior quarter. The sequential decrease was the result of decreased activity, lower costs related to the COVID-19 pandemic, and lower legal fees due to the aforementioned settlement in the third quarter, partially offset by higher in-service maintenance costs across the Company's fleet. General and administrative expense was $45 million, in line with the second quarter of 2020. Interest expense, net of amounts capitalized, was $145 million, compared with $153 million, in the prior quarter. Interest income was $6 million, compared with $4 million in the previous quarter. The Effective Tax Rate was (7.0)%, down from (6.8)% in the prior quarter. The decrease was primarily due to tax benefits for the carryback of net operating losses in the U.S. as a result of the Coronavirus Aid, Relief, and Economic Security Act, which included the release of valuation allowances previously recorded, settlements and expirations of uncertain tax positions, and adjustments to the Company's deferred taxes for operating structural changes in the U.S. offset by tax expense for an increase in the withholding tax rate in Angola and an increase in pre-tax book income. The Effective Tax Rate excluding discrete items was (45.6)% compared to (15.0)% in previous quarter. Net cash provided by operating activities were $81 million, compared to $87 million in the prior quarter. Third quarter 2020 capital expenditures of $65 million were primarily related to the Company's newbuild drillships under construction coupled with capital upgrades for certain rigs in its fleet. This compares with $46 million in the previous quarter. "Despite the challenges associated with COVID-19 and an active storm season in the Gulf of Mexico, we continued to operate at a high level in the third quarter, with strong uptime performance driving revenue efficiency in excess of 96%, resulting in quarterly Adjusted Revenue of $830 million," said Jeremy Thigpen, president and chief executive officer. "Importantly, through the efficient conversion of our industry leading $8.2 billion backlog, we delivered Adjusted EBITDA Margins of 41%, which enabled us to generate $81 million in Operating Cash Flows." Thigpen added, "With our backlog, strong operating performance, and our recent liability management transactions, we have sufficient liquidity to continue to invest in our workforce, our assets and the development of new and differentiating technologies. As we approach the end of the year, we are growing increasingly encouraged by the contracting activity that could unfold in the second half of 2021. Our high-specification fleet and our reputation for delivering safe, reliable and efficient operations will enable us to build upon our position as the leader in ultra-deepwater and harsh environment drilling." Transocean said that certain bondholders have commenced litigation and issued notices of default with respect to certain of the Company's debt securities, which, if not successfully defended, dismissed or withdrawn, would have a material adverse impact on its liquidity, its financial position and may raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1451505/000145150520000106/rig-20200930x10q.htm About Transocean Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services. Transocean recorded a net loss of $1.25 billion for the year ended Dec. 31, 2019, compared to a net loss of $2 billion for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $22.82 billion in total assets, $1.58 billion in total current liabilities, $10.25 billion in total long-term liabilities, and $10.98 billion in total equity. * * * As reported by the TCR on Oct. 19, 2020, S&P Global Ratings lowered its issuer credit rating on Switzerland-based offshore drilling contractor Transocean Ltd. to 'CC' from 'CCC-'. The negative outlook reflects that S&P expects to lower its issuer credit rating on Transocean to 'SD' (selective default) upon the completion of the transactions. TRIBUNE CO: 3rd Cir. Upholds Cramdown Terms of Exit Plan -------------------------------------------------------- The U.S. Court of Appeals for the Third Circuit affirmed the Bankruptcy Court and the District Court's decision regarding the cramdown provisions of Tribune Co.'s plan of reorganization. Senior noteholders of the Tribune Company claim Tribune's plan of reorganization misapplied their rights under the Bankruptcy Code by not according them the full benefit of their subordination agreements with other Tribune creditors. The Bankruptcy Court confirmed the Plan over the Senior Noteholders' dissenting votes. In bankruptcy parlance, they were "crammed down." During the bankruptcy proceedings, several groups of stakeholders proposed plans to reorganize Tribune's debt. The Bankruptcy Court's 2011 opinion on competing plans coalesced support around the Plan sponsored by Tribune, its Official Committee of Unsecured Creditors, and certain lenders. It settled many of the Creditors' Committee's claims against the lenders involved in the Company's leveraged buyout, directors and officers of the old Tribune, real estate investor Samuel Zell -- who orchestrated the LBO -- and others, for $369 million paid to Tribune's estate. The Plan organized Tribune's unsecured creditors into distinct classes. The Senior Noteholders, which comprise Class 1E, argue that the Plan favored Class 1F, which is made up of the Swap Claim, the Retirees, and the Trade Creditors. Collectively, Class 1F includes over 700 unsecured creditors. The Plan paid both Class 1E and Class 1F creditors 33.6% of their outstanding claims from the initial distributions under the Plan. These payments included monies from the subordination of the PHONES and EGI Notes. The Senior Noteholders argued that the Plan allocated more than $30 million of their recovery from the subordinated PHONES and EGI Notes to Class 1F when only the Senior Noteholders in Class 1E qualified as Senior Obligations, and thus they alone should benefit from those subordination agreements. Specifically, they asserted that the Plan violated the Bankruptcy Code's standards for confirmation because it did not fully enforce the subordination provisions per 11 USC section 510(a). In the alternative, they claimed that the allocation of subordination payments to Class 1F unfairly discriminated against their Class 1E. To resolve these and other intercreditor claims, the Bankruptcy Court established an allocation dispute process, which called for extensive briefing followed by a hearing on the Senior Noteholders' objections. As a starting point, the creditors stipulated to their initial recovery percentages under the Plan depending on which creditors ultimately qualified as Senior Obligations under the PHONES and EGI indentures. It was undisputed that the Class 1E Senior Notes were Senior Obligations and thus entitled to payments from the subordinated creditors. A principal dispute concerned whether other creditors also qualified; if so, they would recover additional payment from the subordination provisions in the PHONES and EGI Notes. Thus the Senior Noteholders stood to increase their recovery by limiting which, if any, other creditors qualified as Senior Obligations. In its Allocation Opinion, the Bankruptcy Court determined that section 1129(b)(1) does not require that the subordination agreements be strictly enforced for a plan to be confirmed. It also rejected the Senior Noteholders' unfair-discrimination claim, explaining that it failed even if the Court "assume[d] (without deciding) that[ ] none of the [Class 1F creditors] are Senior [Obligations] [ ] and are not entitled to the benefit of either subordination agreement." The Senior Noteholders appealed the Plan's confirmation to the District Court, renewing their argument that it violated section 1129(b)(1) by not exactly enforcing the subordination agreements. In the alternative, they challenged the particulars of the Bankruptcy Court's unfair-discrimination analysis, arguing that it erred, first, by including the recoveries due them from the subordination agreements in their Plan distributions, and second, by failing to compare their recovery under the Plan to that of Class 1F. While the appeal was pending, Tribune consummated the Plan by making the distributions called for in it. The Third Circuit nonetheless held that the Senior Noteholders' arguments could proceed. They still came up short on remand, and appeal to the Third Circuit again. The Third Circuit noted that the Bankruptcy Court compared Class 1E's recovery under the Plan (33.6%) to its recovery if it and the Swap Claim were the only creditors to benefit from the subordination agreements (34.5%). The Senior Noteholders pointed out that typically a court will compare the recovery percentages of the dissenting and preferred classes and ask whether the difference in recovery, if any, is material. If that analysis had been applied here, the Third Circuit would have needed to resolve the relative priority of all the creditors in Classes 1E and 1F to determine which creditors qualified as Senior Obligations under the PHONE and EGI Notes before comparing the treatment of the two classes under the Plan. According to the Third Circuit, neither the text of 11 U.S.C. section 1129(b)(1) nor the rebuttable presumption test explicitly limits the unfair-discrimination analysis to only a class-to-class comparison. As the Bankruptcy Court noted, unfair discrimination requires that a court evaluate whether "there was a materially lower percentage recovery for the dissenting class." In cases where a class-to-class comparison is difficult—for instance, here 57% of Class 1F (the Swap Claim) is entitled to benefit from the subordination of the PHONES and EGI Notes, while the Trade Creditors (and perhaps the Retirees) are not -- a court may opt to be pragmatic and look to the discrepancy between the dissenting class's desired and actual recovery to gauge the degree of its different treatment. Either way the perspective remains that of the dissenting class. The Senior Noteholders argued that the Third Circuit should have compared their recovery from the estate absent subordination (21.9%) to the Trade Creditors' recovery under the Plan with the reallocated subordination payments (33.6%). According to the Third Circuit, to measure discrimination this way is to ignore that the Plan brought into the Tribune estate not only the subordinated sums distributed to non-beneficiaries of that subordination, but all payments from the subordinated creditors (and indeed it allocated the overwhelming majority of those sums to the Senior Noteholders and the Swap Claim). In this context, the Bankruptcy Court did not necessarily err when it compared the Senior Noteholders' desired recovery to their actual recovery under the Plan (33.6%), the Third Circuit said. To repeat, this is not the preferred way to test whether the allocation of subordinated amounts under a plan to initially non-benefitted creditors unfairly discriminates. It may, however, be an appropriate metric (or cross-check) given the circumstances of a case. Tribune is such a case. Because the claims of the Retirees ($105 million) and Trade Creditors ($8.8 million) are so substantially smaller than the Senior Noteholders' claims ($1.283 billion), the increases in the recovery percentage for the Retirees' and Trade Creditors' claims from reallocated subordinated amounts result in only a minimal reduction of the recovery percentage for the Senior Noteholders. Specifically, the subordinated sums allocated to the Retirees and Trade Creditors comprised 11.7 percentage points toward their 33.6 percentage recovery, but only reduced the Senior Noteholders' recovery by nine-tenths of a percent. Thus, the Third Circuit agreed with the Bankruptcy and District Courts that this difference in the Senior Noteholders' recovery is not material. Although the Plan discriminates, it is not presumptively unfair when understood, as ruled above, that a cramdown plan may reallocate some of the subordinated sums. In sum, the Third Circuit agreed with the Bankruptcy and District Courts that the text of section 1129(b)(1) supplants strict enforcement of subordination agreements. Instead, when cramdown plans play with subordinated sums, the comparison of similarly situated creditors is tested through a more flexible unfair-discrimination standard. Applying that standard in this case, the Third Circuit affirmed the result determined by those Courts. The case is In re: TRIBUNE COMPANY, et al., Debtors. DELAWARE TRUST COMPANY, as successor indenture trustee for certain series of Senior Notes and DEUTSCHE BANK TRUST COMPANY AMERICAS, solely in its capacity as successor Indenture Trustee for certain series of Senior Notes, Appellants, No. 18-2909 (Third Circuit). A copy of the Court's Opinion is available at https://bit.ly/3mKzbiT from Leagle.com. Roy T. Englert, Jr. (Argued) Matthew M. Madden , Mark T. Stancil , Robbins Russell Englert Orseck Untereiner & Sauber, 2000 K Street, N.W., 4th Floor Washington, DC 20006 Counsel for Appellant, Delaware Trust Company. David J. Adler , McCarter & English, 825 Eighth Avenue Worldwide Plaza, 31st Floor New York, NY 10019 Counsel for Appellant. Deutsche Bank Trust Co Americas, as Successor Indenture Trustee , Kenneth P. Kansa , Sidley Austin, One South Dearborn Street Chicago, IL 60603. James O. Johnston (Argued) Jones Day, 555 South Flower Street, 50th Floor Los Angeles, CA 90071. J. Kate Stickles , Cole Schotz, 500 Delaware Avenue, Suite 1410, Wilmington, DE 19801, Counsel for Appellee. Tribune Co. Adam Hiller , Hiller & Arban, 1500 North French Street 2nd Floor Wilmington, DE 19801. Jay Teitelbaum , (Argued) Teitelbaum Law Group, 1 Barker Avenue, Third Floor White Plains, NY 10601 Counsel for Appellee, TM Retirees. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TRICKLING SPRINGS: Trustee Selling Remnant Assets to Oak for $5K ---------------------------------------------------------------- Steven M. Carr, the Chapter 7 Trustee for the bankruptcy estate of Trickling Springs Creamery, LLC, asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania to authorize the sale of all remnant assets to Oak Point Partners, LLC for $5,000. The Trustee is now in the process of winding down the administration of the case. To that end, he is engaged in efforts to ensure that the maximum value of the Estate's remaining assets is realized, which efforts include pursuing the sale of any remaining assets. He has determined that there might exist property of the Debtor's Estate, consisting of known or unknown assets or claims, which have not been previously sold, assigned, or transferred ("Remnant Assets"). Potential unknown assets might include unscheduled refunds, overpayments, deposits, judgments, claims, or other payment rights that would accrue in the future. The Trustee has conducted due diligence and remains unaware of the existence of any Remnant Assets, and certainly none that could return value to the Estate greater than the Purchase Price. Accordingly, he has determined that the cost of pursuing the Remnant Assets will likely exceed the benefit that the Estate would possibly receive on account of the Remnant Assets. The Remnant Asset sales have become commonplace at the close of commercial bankruptcy cases because they allow for additional funds to be brought into the estate, while simultaneously avoiding the expense and burdens associated with reopening cases for later-discovered assets. Such sales provide a prudent way to fully and finally administer all assets of a debtor's estate. The Trustee and Oak Point have negotiated a Purchase Agreement for the sale of the Remnant Assets free and clear of all liens, claims, interests, and encumbrances. The Purchase Agreement generally provides for a purchase price of $5,000 for all Remnant Assets to be paid by Oak Point to the Trustee for the benefit of the Debtor's Estate. In accordance with the Purchase Agreement, the Remnant Assets do not include (a) cash held at the time of the Purchase Agreement in the Trustee's fiduciary bank account for the Debtor's case; (b) any returned or undeliverable creditor claim distribution checks; (c) any and all Goods1 (e.g., office furniture) of the Debtor; and (d) the Purchase Price for the Remnant Assets. The Trustee believes that the cost of pursuing the Remnant Assets will likely exceed the benefit that the Estate would possibly receive. Contemporaneously with the Motion, the Trustee has filed a notice of the Motion, which establishes a deadline by which objections or responses to this Motion must be filed with the Court. While he is prepared to consummate the sale of the Remnant Assets to Oak Point pursuant to the terms set forth herein and in the Purchase Agreement, in the event a party other than Oak Point wishes to purchase the Remnant Assets, the Trustee asks that the Court approves the following overbid procedures: a. Each Competing Bidder who wants to participate in the overbid process must notify the Trustee of their intention to do so in accordance with the Notice on or before the Response Deadline; b. the first overbid for the Remnant Assets by a Competing Bidder must be at least $2,000 more than the Purchase Price, or a total of $7,000; c. each Competing Bidder must submit a Cashier's Check to the Trustee in the amount of such Competing Bidder's first overbid at the time such overbid is made; d. each subsequent overbid for the Remnant Assets must be in additional increments of $1,000, unless otherwise agreed by the parties or directed by the Court; e. the bidder must purchase the Remnant Assets under the same terms and conditions set forth in the Purchase Agreement, other than the purchase price; and f. in the event of an overbid that meets the foregoing conditions, the Trustee will schedule an auction of the Remnant Assets in advance of the hearing date and will request that the Court approve the winning bidder at the auction as the purchaser at the hearing on the Motion. The Trustee believes that the sale of the Remnant Assets in accordance with the terms of the Purchase Agreement, and as provided herein, serves the best interests of the Debtor's Estate and creditors, as the sale will allow the Trustee to realize additional funds for the benefit of the Estate. Accordingly, the sale to Oak Point should be approved as requested. To successfully implement the Purchase Agreement, the Trustee also asks a waiver of the 14-day stay under Bankruptcy Rule 6004(h). Trickling Springs Creamery, LLC, sought Chapter 7 protection (Bankr. M.D. Pa. Case No. 19-05202) on Dec. 6, 2019. On the same day, Steven M. Carr, was appointed by the Court as the Chapter 7 Trustee. The Trustee's counsel: Ream, Carr, Markey, Woloshin & Hunter, LLP Steven M. Carr, Esquire 119 East Market Street York, PA 17401 Tel: (717) 843-8968 TUPPERWARE BRANDS: S&P Raises ICR to CCC; Ratings on Watch Positive ------------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based Tupperware Brands Corp. to 'CCC' from 'CCC-'. S&P also raised its issue-level rating on the senior unsecured notes to 'CCC-' from 'D' based on the company's intention to fully repay the remaining balance before maturity. The recovery rating remains '5'. S&P said, "At the same time, we are placing all ratings on CreditWatch with positive implications, indicating we could raise or affirm them following our review. If Tupperware completes the proposed refinancing with reasonable terms, maintains adequate liquidity, and continues to improve operating performance, we could raise the ratings to 'B' or 'B+'. The resolution of the CreditWatch will depend on the company's ability to close the transaction and refinance its notes." The term loan facility would address the near-term maturity of the notes. During the past several months, Tupperware struggled to refinance its $600 million senior unsecured notes due June 1, 2021, with suitable terms as it worked on turning around the business. In July, the company completed a tender offer for about $97.6 million of the notes and subsequently continued open market purchases of the debt, resulting in a $380 million balance as of Sept. 26. S&P believes the proposed transaction would address the near-term maturity and provide greater balance sheet and financial flexibility. Under the proposed facilities, Tupperware will not have any near-term debt maturities until 2023. There will be no annual amortization requirements. The interest rate will increase substantially to over 9% from 4.75% with the notes, but total interest cost should remain manageable given S&P's expectation for lower debt. S&P believes the refinancing improves the capital structure and allows management to focus on its business turnaround. Operating performance has improved and debt to EBITDA has declined, exceeding S&P's expectations. During the third quarter ended Sept. 26, reported revenues increased 14% and EBITDA climbed to about $100 million from about $57 million in the prior-year quarter. Increased food-at-home consumption, a weaker macroeconomic environment that helped Tupperware attract and retain representatives, and the greater use of digital tools boosted sales representatives and overall revenues. Cost reductions and improved revenues drove the profitability improvements. Management achieved about $120 million of its planned $180 million in cost savings through the third quarter. Its active sales force expanded 10%, with the largest gains in North and South America, partially offset by declines in Asia-Pacific. While S&P anticipates some weakness to persist in more retail-driven markets such as China, demand will remain solid in other markets if consumers continue to eat at home and more representatives enter because of a weaker job market caused by the coronavirus pandemic. Tupperware is still in the early stages of executing its turnaround and the sustainability of improvements is yet to be proved. Still, leverage substantially declined sequentially. S&P estimates debt to EBITDA improved to about 3.8x for the 12 months ended Sept. 26 from 5.1x in the prior quarter ended June 27. Pro forma for the proposed transaction, S&P estimates leverage in the 3.5x area or below by the end of fiscal 2020. Tupperware's cash flow generation should support its new capital structure with sufficient liquidity. Through the first nine months of 2020, the company generated nearly $112 million in operating cash flow, largely through profitability and working capital improvements. S&P said, "We expect Tupperware to continue to generate at least $100 million in free operating cash flow, after factoring in capital expenditures (capex) of about $40 million this year, increasing to about $75 million annually thereafter. We have not factored in the resumption of dividends or any other shareholder returns. At the end of the quarter, the company had $259 million available on its $650 million revolving credit facility due in 2024. It was also in compliance with its leverage covenant at quarter-end with 29% EBITDA cushion. We expect Tupperware to remain in compliance even with step-downs in upcoming quarters as it repays debt. Asset sales such as land sales will generate over $80 million in net proceeds, of which the company has already received approximately $40 million, and other potential sales of noncore assets could generate additional proceeds that could be used for further debt reduction." "We expect to resolve the CreditWatch listing following our review of the final capital structure, operating outlook, liquidity position, and discussion of management's financial policies. Upon completion of our review, we could affirm the issuer credit rating on Tupperware or raise it to 'B' or 'B+'." U.S.A. PARTS: Bankr. Court Agrees to Subject Matter Jurisdiction ---------------------------------------------------------------- Judgment Creditors Michael Chiacchieri and Christopher Corrado sought dismissal of the chapter 11 bankruptcy case captioned IN RE: U.S.A. PARTS SUPPLY, CADILLAC U.S.A. AND OLDSMOBILE U.S.A. LIMITED PARTNERSHIP, Chapter 11, Debtor, Case No. 3:20-bk-00241 (Bankr. N.D. W.Va.) arguing that the court lacks subject matter jurisdiction. By a separate but related motion, the Judgment Creditors alternatively sought relief from the automatic stay to permit an election of a new managing partner for the Debtor. In opposition, the Debtor argued that the court has subject matter jurisdiction, saying the Debtor's general partner, CUSAPS, Inc. either had or retroactively obtained authority to file the Debtor's Chapter 11 bankruptcy petition. Furthermore, the Debtor argued that the Judgment Creditors may not seek relief from the automatic stay to hold an election of a new managing partner. Upon analysis, Bankruptcy Judge David L. Bissett denied the Judgment Creditors' motions to dismiss and for relief from stay. The Debtor is a Maryland limited partnership with its principal place of business in Kearneysville, West Virginia. The Certificate and Agreement of Limited Partnership dated May 30, 1990 named CUSAPS as the Debtor's general partner and several other limited partners. Notably, the Partnership Agreements states that "[t]he general partner shall cease to be such upon the happening of the events listed in Md. Corporations and Associations Art., Sec. 10-402 (3) or (4)." Additionally, in Section 8 of the Partnership Agreement, it states that "[i]f the general partner withdraws, the limited partners shall select a substitute general partner by majority vote." Furthermore, Section 11 states that "[i]f a general partner withdraws, the limited partners may elect a new general partner by a majority vote. In failing to do so, the limited partnership shall be dissolved and its assets distributed among the limited partners in the proportion of their limited partnership interest." CUSAPS holds a 65% interest in the Debtor. Michael Cannan is the sole shareholder of CUSAPS. He also holds a 12.5% limited partnership interest in the Debtor. The Judgment Creditors also purported to be limited partners of the Debtor. Together, they hold a 10% limited partnership interest. All other limited partners collectively hold a 12.5% limited partnership interest in the Debtor. Notably, Maryland's State Department of Assessments & Taxation forfeited CUSAPS's corporate charter on Oct. 1, 2013. Nevertheless, on March 22, 2020, CUSAPS allegedly authorized the filing of the Debtor's Chapter 11 bankruptcy petition via a corporate resolution signed by Mr. Cannan and dated March 20, 2020. On August 31, 2020, the Judgment Creditors filed their second motion to dismiss the Debtor's case. On the same day, they also filed a motion for relief from the automatic stay. Accordingly, the court took both matters under advisement on Sept. 23, 2020. Since Sept. 23, 2020, CUSAPS filed Articles of Revival with the Department for its Maryland Charter. The Department received CUSAPS's payment and related forms; however, the status of CUSAPS's revival remains uncertain to the court.1 Also, the Judgment Creditors seemingly held a Special Meeting of Limited Partners on Sept. 22. The notice for the meeting, which the Judgment Creditors distributed on Sept. 18, and filed with the court, states that the attendees would discuss both (1) the removal of CUSAPS as the general partner and (2) CUSAPS's potential replacement by appointing a new general partner. Importantly, the notice does not indicate that a vote would occur. The Judgment Creditors argued that the Debtor lacked the proper authorization to file its Chapter 11 bankruptcy petition; therefore, the court does not have subject matter jurisdiction in this case. Specifically, they argued that when CUSAPS forfeited its corporate charter seven years ago, CUSAPS's status as general partner ceased, and it lost the proper authorization to file a bankruptcy petition on the Debtor's behalf. The Debtor countered that the forfeiture of CUSAPS's corporate charter did not cause it to withdraw as the Debtor's general partner. Even if the forfeiture did cause CUSAPS to withdraw, the Debtor said the subsequent inaction by the limited partners constitutes an agreement and acquiescence to the Debtor carrying on its business as if dissolution never occurred. Additionally, the Debtor argued CUSAPS's revival with the state necessarily ratifies the Debtor's bankruptcy filing. Finally, the Debtor argued the Judgment Creditors' contentions are precluded under the doctrine of approbation and reprobation. According to Judge Bissett, CUSAPS ceased to exist as an entity approximately seven years ago when the Department forfeited its corporate charter. Judge Bisset interpreted the Partnership Agreement to determine if forfeiture of the corporate charter caused CUSAPS to lose its status as the Debtor's general partner. After interpreting its plain text, the court found the Partnership Agreement supplants Maryland law by specifically excluding MD CODE ANN. CORPS. & ASS'NS section 10-402(8). Therefore, CUSAPS did not lose its status as general partner when it forfeited its corporate charter. Judge Bissett also said CUSAPS provided all the required forms and tendered all necessary payments to the Department so that its charter may be revived. Once revived, if not already, all prior acts made by CUSAPS would be retroactively validated, including its Resolution which undoubtably authorized the Debtor's voluntary petition. Furthermore, the Resolution authorized Mr. Cannan to execute and deliver all documents necessary to perfect the filing of its petition and allowed him to appear at all of the Debtor's subsequent bankruptcy proceedings. Pursuant to MD CODE ANN. CORPS. & ASS'NS Sec. 3-512(1), CUSAPS's revival relates back to the date of forfeiture. Thus, it retroactively gained the authority to file the Debtor's Chapter 11 bankruptcy petition on March 22, 2020. Having found that CUSAPS had the authority to institute the Debtor's bankruptcy proceedings, the court, therefore, found that it possesses subject matter jurisdiction. In the alternative, the Judgment Creditors sought relief from the automatic stay to elect a new managing partner for the Debtor in accordance with the Partnership Agreement. They argued that common law provides that the election of a managing partner is not a violation of the automatic stay. Judge Bissett said the motion for relief from stay is non-justiciable. Importantly, a meeting of limited partners appears to be an act outside of the penumbra of the automatic stay. At the Sept. 22, 2020 Special Meeting of Limited Partners, it is believed that the attendees would discuss both (1) the removal of CUSAPS as the general partner of the Debtor and (2) CUSAPS's potential replacement by appointing a new general partner. While the court has no knowledge of specifically what the attendees discussed at the meeting or if it occurred at all, a discussion between limited partners of these topics appears to be outside the penumbra of the automatic stay. In any event and notwithstanding the parties' arguments regarding the application of the automatic stay, the Partnership Agreement expressly provides that "[i]f the general partner withdraws, the limited partners shall select a substitute general partner by majority vote." CUSAPS has not withdrawn and it is still the Debtor's general partner. A copy of the Court's Memorandum Opinion is available at https://bit.ly/2GEDlbT from Leagle.com. About U.S.A. Parts Supply U.S.A. Parts Supply, Cadillac U.S.A. and Oldsmobile U.S.A. LP (formerly doing business as Cadillac U.S.A. Parts Supply LP) is an auto parts supplier in Kearneysville, W. Va. U.S.A. Parts Supply filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D. W.Va. Case No. 20-00241) on March 22, 2020. The petition was signed by Michael Cannan, sole shareholder and officer of general partner CUSAPS, Inc. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. James P. Campbell, Esq. at Campbell Flannery, P.C., is the Debtor's legal counsel. UNITED BANCSHARES: Late 10-Q Shows $115K Net Loss for Q2 2017 ------------------------------------------------------------- United Bancshares, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $115,297 on $583,336 of total interest income for the three months ended June 30, 2017, compared to net income of $315,016 on $737,615 of total interest income for the three months ended June 30, 2016. For the six months ended June 30, 2020, the Company reported a net loss of $317,918 on $1.22 million of total interest income compared to net income of $116,035 on $1.33 million of total interest income for the six months ended June 30, 2016. As of June 30, 2017, the Company had $55.63 million in total assets, $52.58 million in total liabilities, and $3.05 million in total shareholders' equity. The Company has entered into Consent Orders with the Federal Deposit Insurance Corporation and the Department which, among other provisions, require the Bank to increase its tier one leverage capital ratio to 8.00% and its total risk based capital ratio to 12.50%. As of June 30, 2017, the Bank's tier one leverage capital ratio was 5.30% and its total risk based capital ratio was 9.79%. Assuming no change in average assets, the Bank's capital would need to decline by $718,000 to be less than adequately capitalized. The Bank's failure to comply with the terms of the Consent Orders could result in additional regulatory supervision and/or actions. The ability of the Bank to continue as a going concern is dependent on many factors, including achieving required capital levels, earnings and fully complying with the Consent Orders. The Consent Orders raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/944792/000109690620000178/usbi_10q.htm About United Bancshares United Bancshares, Inc. is a holding company for United Bank of Philadelphia. UBS was incorporated under the laws of the Commonwealth of Pennsylvania on April 8, 1993. United Bancshares became the bank holding company of the Bank, pursuant to the Bank Holding Company Act of 1956, as amended, on Oct. 14, 1994. The Bank commenced operations on March 23, 1992. UBS provides banking services through the Bank. The principal executive offices of UBS and the Bank are located at The Graham Building, 30 S 15th Street, Suite 1200, Philadelphia, Pennsylvania 19102. As of Dec. 23, 2019, UBS and the Bank had a total of 18 employees. UNITED BANCSHARES: Late 10-Q Shows $203K Net Loss for Q1 2017 ------------------------------------------------------------- United Bancshares, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $202,621 on $633,373 of total interest income for the three months ended March 31, 2017, compared to a net loss of $198,981 on $593,319 of total interest income for the three months ended March 31, 2016. As of March 31, 2017, the Company had $54.31 million in total assets, $51.17 million in total liabilities, and $3.14 million in total shareholders' equity. The Company reported net income of $25,000 for the year ended 2016 and a net loss of $495,000 for the year ended 2015. Further, the Company has entered into Consent Orders with the Federal Deposit Insurance Corporation and the Department which, among other provisions, require the Bank to increase its tier one leverage capital ratio to 8.00% and its total risk based capital ratio to 12.50%. As of March 31, 2017, the Bank's tier one leverage capital ratio was 5.53% and its total risk based capital ratio was 9.74%. The Bank's failure to comply with the terms of the Consent Orders could result in additional regulatory supervision and/or actions. The ability of the Bank to continue as a going concern is dependent on many factors, including achieving required capital levels, earnings and fully complying with the Consent Orders. The Consent Orders raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/944792/000109690620000177/usbi_10q.htm About United Bancshares United Bancshares, Inc. is a holding company for United Bank of Philadelphia. UBS was incorporated under the laws of the Commonwealth of Pennsylvania on April 8, 1993. United Bancshares became the bank holding company of the Bank, pursuant to the Bank Holding Company Act of 1956, as amended, on Oct. 14, 1994. The Bank commenced operations on March 23, 1992. UBS provides banking services through the Bank. The principal executive offices of UBS and the Bank are located at The Graham Building, 30 S 15th Street, Suite 1200, Philadelphia, Pennsylvania 19102. As of Dec. 23, 2019, UBS and the Bank had a total of 18 employees. UNITED BANCSHARES: Late 10-Q Shows $29K Net Income for Q3 2017 -------------------------------------------------------------- United Bancshares, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $28,623 on $674,373 of total interest income for the three months ended Sept. 30, 2017, compared to a net loss of $99,641 on $642,470 of total interest income for the three months ended Sept. 30, 2016. For the nine months ended Sept. 30, 2017, the Company reported a net loss of $289,295 on $1.89 million of total interest income compared to net income of $16,394 on $1.97 million of total interest income for the nine months ended Sept. 30, 2016. As of Sept. 30, 2017, the Company had $61.59 million in total assets, $57.25 million in total liabilities, and $3.33 million in total shareholders' equity. The Company has entered into Consent Orders with the Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking that, among other provisions, require the Bank to increase its tier one leverage capital ratio to 8.00% and its total risk based capital ratio to 12.50%. As of Sept. 30, 2017, the Bank's tier one leverage capital ratio was 5.74% and its total risk based capital ratio was 10.11%. Assuming no change in average assets, the Bank's capital would need to decline by $1,011,000 to be less than adequately capitalized. The Bank's failure to comply with the terms of the Consent Orders could result in additional regulatory supervision and/or actions. The ability of the Bank to continue as a going concern is dependent on many factors, including achieving required capital levels, earnings and fully complying with the Consent Orders. The Consent Orders raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/944792/000109690620000181/usbi_10q.htm About United Bancshares United Bancshares, Inc., is a holding company for United Bank of Philadelphia. UBS was incorporated under the laws of the Commonwealth of Pennsylvania on April 8, 1993. United Bancshares became the bank holding company of the Bank, pursuant to the Bank Holding Company Act of 1956, as amended, on Oct. 14, 1994. The Bank commenced operations on March 23, 1992. UBS provides banking services through the Bank. The principal executive offices of UBS and the Bank are located at The Graham Building, 30 S 15th Street, Suite 1200, Philadelphia, Pennsylvania 19102. As of Dec. 23, 2019, UBS and the Bank had a total of 18 employees. UNITED ROAD: Sale Order Bars Strong-Davis Discrimination Suit ------------------------------------------------------------- TANYA STRONG-DAVIS, Plaintiff, v. UNITED ROAD TOWING, INC. et al., Defendants, Case No. 18-cv-02426 (N.D. Ill.) alleges claims of race and sex discrimination under Title VII of the Civil Rights Act, 42 U.S.C. section 2000e et seq., and age discrimination under the Age Discrimination in Employment Act, 29 U.S.C. section 621 et seq. The Defendant filed motion for summary judgment and motion to strike Plaintiff's Local Rule 56.1 (b)(3)(C) Statement of Additional Facts. Upon deliberation, District Judge Mary M. Rowland granted the Defendant's motion for summary judgment but denied the Defendants' motion to strike. The Court held that the claims amount to an impermissible collateral attack on the finality of the Bankruptcy Court's Sale Order approving the sale of URT's assets to Defendants "free and clear of all Liens, Claims, Encumbrances and other interests. . ." under Section 363(f) of the Bankruptcy Code. This case is an unusual employment case because Strong-Davis never worked for the Defendants. Instead, she was employed by United Road Towing, Inc., d/b/a E&R Towing between 2002 and 2017 URT managed auto pounds under contract with the City of Chicago. Strong-Davis is an African American woman who was over the age of 40 when she was terminated by her employer, URT. Prior to 2012, the City assigned its own employees to work at URT to input information about impounded vehicles into LEADS, a State Police data base, in order to determine the ownership of a vehicle. Beginning in 2012, the City asked URT to operate LEADS with its own employees. This required URT employees, including Strong-Davis, to undergo a background check in order to be authorized to access LEADS. Based on the results of her background check, Strong-Davis was denied authorization to use LEADS. Nevertheless, Strong-Davis repeatedly used LEADS between 2013 and 2017. The parties dispute whether Strong-Davis did so at her supervisor's direction and with his knowledge. Strong-Davis was terminated from URT on Jan. 3, 2017, purportedly for her repeated unauthorized use of LEADS despite being instructed otherwise. The Plaintiff alleged non-Black, male, and/or younger employees who used LEADS in an unauthorized manner and with the supervisor's knowledge were not terminated. On Jan. 13, 2017, Strong-Davis filed a Charge of Discrimination with the Equal Employment Opportunity Commission ("EEOC") alleging race, sex, and age discrimination in connection with her termination from URT. On Feb. 6, 2017, URT filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. section 101 et seq. On April 13, 2017, Defendants entered into a Purchase Agreement to acquire URT's assets. On the same day, the United States Bankruptcy Court for the District of Delaware approved the asset purchase by entering Sale Order. Pursuant to Bankruptcy Code Section 363(f), the Sale Order allowed Defendants to acquire URT's assets "free and clear of all Liens, Claims, Encumbrances and other interests of any kind or nature whatsoever," other than those explicitly assumed by Defendants, including "claims relating to any employment with [URT]. . . ." On May 2, 2017, the Defendants completed the purchase of URT and notice was sent to all named creditors, directing them to file any objections with the Bankruptcy Court on or before May 24, 2017. Strong-Davis was not a named creditor and was not sent notice. However, on Dec. 21, 2017, the EEOC sent Strong-Davis a letter informing her that URT had filed for bankruptcy and directing her to file a proof of claim in bankruptcy court to protect her interest against URT. The letter enclosed a copy of a blank proof of claim form. Strong-Davis did not file a proof of claim or motion to appeal the finality of the Bankruptcy Court's Order. A few weeks later, on January 3, 2018, the EEOC issued Strong-Davis a notice of right to sue explaining that it was dismissing her Charge of Discrimination because URT had filed for bankruptcy. On April 4, 2018, Strong-Davis filed a complaint in this Court against Defendants on claims of race, sex, and age discrimination under Title VII of the Civil Rights Act, 42 U.S.C. section 2000e et seq., and the Age Discrimination in Employment Act, 29 U.S.C. section 621 et seq. under a theory of successor liability. The Defendants argued that Strong-Davis' claims: (1) are prohibited by collateral estoppel and (2) amount to an impermissible collateral attack on the finality of the Bankruptcy Court's Sale Order approving the sale of URT's assets to Defendants "free and clear of all Liens, Claims, Encumbrances and other interests. . ." under Section 363(f) of the Bankruptcy Code. Strong-Davis argued that the Sale Order did not dispose of her claims because she did not receive notice of the sale of URT pursuant to section 363 (b) & (f). The Court agreed with Strong-Davis that the evidence failed to establish that the Plaintiff had notice of the bankruptcy sale prior to its finalization. As she filed her EEOC Charge prior to the bankruptcy sale, Defendants should have been aware of her claims against URT and listed her as a creditor. Yet, Strong-Davis was not listed as a creditor and did not receive notice of the sale until Dec. 21, 2017, nearly seven months after the Bankruptcy Court's deadline to challenge the Sale Order and well after the deadline to appeal the Sale Order under Federal Rule of Bankruptcy Procedure 8002. Because Plaintiff did not have notice and, thus, was not a party to the bankruptcy proceedings, her claims are not barred by collateral estoppel. However, the fact that Strong-Davis did not have notice of the bankruptcy sale does not render that Sale Order void or upset its finality, the Court said. Strong-Davis did not object to the sale within the deadline imposed by the bankruptcy court or appeal the Sale Order within the allotted 14-day time period. The Sale Order is thus final and applicable to her claims. Application of this rule to a plaintiff like Strong-Davis who was unable to pursue these remedies by reason of untimely notice seems harsh, but the Seventh Circuit has stressed that "[t]he policy [of finality] would mean rather little if years after the sale a secured creditor could undo it by showing that through some slip-up he hadn't got notice of it." The importance of the policy of finality is only more significant when faced with an unsecured creditor, like Strong-Davis, showing "years after the sale . . . through some slip-up [s]he hadn't got notice of" the Sale Order. Moreover, even after Strong-Davis received notice of the sale several months later, she was not without remedy. After the time for appeal has expired, a sale order may still be challenged via Federal Rule of Civil Procedure 60(b). A Rule 60 motion allows a party to seek relief from a final judgment for reasons such as mistake or inadvertence and must generally be filed within one year of the final judgment. On Dec. 21, 2017, the EEOC notified Strong-Davis that URT's bankruptcy could extinguish her claims unless she took certain actions in bankruptcy court. The EEOC also proceeded to reject her discrimination claims because of URT's bankruptcy. Thus, nearly four months prior to the expiration of the Rule 60 motion deadline, Strong-Davis had notice of the adverse effect of the bankruptcy sale on her discrimination claims. She nonetheless failed to pursue that remedy, opting instead to pursue her claims on the merits in the Court, disregarding the impact of the Sale Order. The Court held it lacks authority to review Strong-Davis' claims and is bound by the Sale Order's injunction against "commencing or continuing any action, in any manner or place, that does not comply or is inconsistent with the provisions of this Sale Order. . . ." A copy of the Court's Memorandum Opinion and Order is available at https://bit.ly/3klB04f from Leagle.com. About United Road Towing Headquartered in Mokena, Illinois, United Road Towing, Inc., dba Good Buy Auto Auction, UR Vehicle Management Solutions, Quality Towing, United Road Vehicle Management Solutions, and dba United Road Towing-San Antonio -- and its affiliates provide towing, recovery, impound, and vehicle management solutions services to both the private and public sector. Through a portfolio of local and regional brands operating across 10 different regions in eight different states, the Company dispatches approximately 500,000 tows, manage over 200,000 impounds and sell over 38,000 vehicles annually across the U.S. United Road Towing, Inc., along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 17-10249) on Feb. 6, 2017. The petitions were signed by Michael Mahar, chief financial officer. United Road estimated assets between $10 million and $50 million and debt between $50 million and $100 million. Judge Laurie Selber Silverstein presided over the cases. Daniel J. McGuire, Esq., Grace D. D'Arcy, Esq., and Carrie V. Hardman, Esq., at Winston & Strawn LLP, served as Debtors' general counsel. M. Blake Cleary, Esq., Ryan M. Bartley, Esq., and Andrew Magaziner, Esq., at Young Conaway Stargatt & Taylor, LLP, served as the Debtors' Delaware counsel. Getzler Henrich & Associates LLC served as the Debtors' financial advisor, and SSG Advisors LLC acted as the Debtors' investment banker. Rust Consulting/Omni Bankruptcy acted as the Debtors' noticing, claims and balloting agent. Andrew R. Vara, Acting U.S. Trustee for Region 3, on Feb. 16, 2017, appointed five creditors to serve on the official committee of unsecured creditors appointed in the Chapter 11 cases of United Road Towing, Inc., and its affiliates. The Committee retained Pachulski Stang Ziel & Jones LLP as counsel, and Gavin/Solmonese LLC as financial advisor. VALLEY EQUITIES: Hires Lee & Associates as Real Estate Broker ------------------------------------------------------------- Jason M. Rund, the Chapter 7 Trustee of Valley Equities, LLC, seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Lee & Associates Commercial Real Estate Services, Inc. - Riverside, as real estate broker to the Trustee. Valley Equities requires Lee & Associates to list and sell the free standing industrial building owned by the Debtor located at 444 North H Street, San Bernardino, California. Lee & Associates will be paid a commission of 5.5% of the purchase price. Rocky Moran, Vice President of Lee & Associates Commercial Real Estate Services, Inc. - Riverside, 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. Lee & Associates can be reached at: Rocky Moran Lee & Associates Commercial Real Estate Services, Inc. 3240 Mission Inn Avenue Riverside, CA 952507 Tel: (951) 276-3681 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. VIVUS INC: Reaches Deal That Paves Way for Icahn's Ownership ------------------------------------------------------------ Leslie A. Pappas of Bloomberg Law reports that VIVUS Inc. has reached a settlement that would put the bankrupt drugmaker on track for confirmation of a Chapter 11 plan and deliver company ownership to an Icahn Enterprises subsidiary. The settlement, reached with an equity-holder committee and IEH Biopharma LLC, the Icahn subsidiary, includes a new royalty agreement and a $1 million boost to a stock payout, Vivus' attorney, Gabriel Morgan of Weil Gotshal & Manges LLP, said at a status conference Thursday. With the settlement, expected to be filed next week, Vivus will be in position to resuscitate a prepackaged plan originally proposed in July when it filed bankruptcy protection. About Vivus Inc Vivus Inc -- https://www.vivus.com/ -- is a biopharmaceutical company committed to the development and commercialization of innovative therapies that focus on advancing treatments for patients with serious unmet medical needs. VIVUS has three approved therapies and one product candidate in clinical development. Qsymia (phentermine and topiramate extended release) is approved by FDA for chronic weight management. The Company commercializes Qsymia in the U.S. through a specialty sales force supported by an internal commercial team and license the commercial rights to Qsymia in South Korea. VIVUS was incorporated in 1991 in California and reincorporated in 1996 in Delaware. As of the Petition Date, VIVUS is a publicly traded company with its shares listed on the Nasdaq Global Market LLC under the ticker symbol "VVUS." The Company maintains its headquarters in Campbell, California. Vivus Inc and three of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del., Case No. 20-11779) on July 7, 2020. The petitions were signed by Mark Oki, chief financial officer. Hon. Laurie Selber Silverstein presides over the cases. As of May 31, 2020, the Debtors reported total assets of $213,884,000 and total liabilities of $281,669,000. Weil Gotshal & Manges LP serves as general counsel to the Debtors, while Richards, Layton & Finger, P.A. acts as local counsel to the Debtors. Ernst & Young is the Debtors' financial advisor, and Piper Sandler Companies acts as investment banker. Stretto is claims and noticing agent to the Debtors. On Sept. 22, 2020, the United States Trustee appointed the official committee of equity security holders. The equity committee is represented by Morris, Nichols, Arsht & Tunnell LLP. W.F. GRACE: Hires William S. Gannon as Bankruptcy Counsel --------------------------------------------------------- W.F. Grace Construction, LLC seeks authority from the United States Bankruptcy Court for the District of New Hampshire to hire William S. Gannon, PLLC as its bankruptcy counsel. The professional services to be rendered by the firm are: a. advising the Debtor with respect to its powers and duties as debtor-in-possession and the continued management and operation of its businesses and properties; b. attending meetings and negotiating with representatives of creditors and other parties in interest, responding to creditor inquiries, and advising and consulting on the conduct of the case, including all of the legal and administrative requirements of operating in Chapter 11; c. negotiating and preparing on behalf of the Debtor a plan or plans of reorganization, and all related documents, and prosecuting the plan or plans through the confirmation process; d. representing the Debtor in connection with any adversary proceedings or automatic stay litigation that may be commenced in the proceedings and any other action necessary to protect and preserve the Debtor's estates; e. advising the Debtor in connection with any sale of assets; f. representing and advising the Debtor regarding post-confirmation operations and consummation of a plan or plans of reorganization; g. appearing before this Court, any appellate courts, and administrative hearings conducted by the Office of the United States Trustee and protecting the interests of the Debtor and the estate before such courts and the UST; h. preparing necessary motions, applications, answers, orders, reports, and papers necessary to the administration of the estate; and i. performing all other legal services for and providing all other legal advice to the Debtor that may be necessary and proper in these proceedings, including, without limitation, services or legal advice relating to applicable state and federal laws and securities, labor, commercial, and real estate laws. William S. Gannon is disinterested within the meaning of 11 U.S.C. Secs. 101(14) and 1107, according to court filings. The firm can be reached through: William S. Gannon, Esq. WILLIAM S. GANNON PLLC 889 Elm Street, 4th Floor Manchester, NH 03101 Tel: 603-621-0833 Email: bgannon@gannonlawfirm.com About W.F. Grace Construction, LLC W.F. Grace Construction, LLC is part of the residential construction contractors industry. W.F. Grace Construction, LLC filed its voluntary petition for relief under Chapter 11 of the Bnakruptcy Code (Bankr. D. N.H. Case No. 20-10844) on Sept. 28, 2020. The petition was signed by William F. Grace, Jr., sole member. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. William S. Gannon, Esq. at WILLIAM S. GANNON PLLC represents the Debtor as counsel. WAYSIDE SCHOOLS, TX: S&P Lowers Bond Ratings to 'BB' ---------------------------------------------------- S&P Global Ratings lowered its rating to 'BB' from 'BB+' on Travis County Cultural Educational Facilities Corp., Texas' series 2012 qualified zone academy bonds and Arlington Higher Education Finance Corp., Texas' series 2016 bonds outstanding, issued for Wayside Schools. The outlook is stable. "The downgrade reflects our view that Wayside Schools' recent trend of enrollment declines, coupled with recent weak financial operations in fiscal 2019, which are more reflective of a 'BB' rating despite the school's size and projected financial improvement in fiscal 2020 and budgeted for in fiscal 2021," said S&P Global Ratings credit analyst Brian Marshall. A longer trend of positive operations that reflects and ability to maintain solid liquidity and coverage more consistent with higher-rated peers, coupled with stabilized enrollment trends could improve S&P's overall view of Wayside Schools compared with those of higher-rated peers. Because of the COVID-19 pandemic and broader safety concerns, Wayside Schools converted to virtual learning in March through the end of the 2019-2020 school year. All of the organization's campuses will continue to use virtual learning instruction to begin the 2020-2021 school year. Wayside Schools offers three instruction paths: asynchronous, synchronous, and face-to-face instruction. Based on the school's education plan, families can choose to continue learning remotely or in-person every nine weeks. The 'BB' rating reflects S&P's view of the school's: -- Enrollment declines in recent years due in part to high competition in the Austin market, although management continues to work with a marketing firm and coaches to improve academics to stabilize enrollment; -- Lower liquidity than that of similarly rated peers, bolstered by a recent paycheck protection program (PPP) loan in the near term, with management projecting moderate improvement over the next two years due to healthy state funding; -- Significant deficit operating margins posted for fiscal 2019 primarily due to construction cost overruns, which led to the coverage just above 1x and the engagement of a consultant per bond documents which is tempered in part by the projection of a surplus in fiscal 2020 and a break even adopted budget in fiscal 2021 following healthy state funding and significant Coronavirus Aid Relief and Economic Security Act funding and the approval of a PPP loan. -- High debt burden; and -- Risk, as with all charter schools, that Wayside Schools' charter could be revoked for nonperformance of its terms or for financial distress before the final maturity of the bonds. Partially offsetting these weaknesses, in S&P's opinion, are the school's: -- Size, with nearly 2,000 students within a fast-growing market, with room to expand, and supported by satisfactory academic performance and steady demand, although certain demand metrics have materially softened in recent years; -- Experienced management team, with a recently elevated COO/CFO intent on implementing policies and setting targets routinely tracked in conjunction with consultant recommendations; and -- Good relationship with charter authorizer Texas Education Agency, with two successful 10-year charter renewals. As of November 2020, Wayside Schools has approximately $36 million in debt outstanding, which includes about $1.5 million in notes payable. The school's revenues, consisting primarily of per-pupil funding from Texas, secure the bonds. Wayside Schools is a prekindergarten through grade 12 public charter school in its 19th year of operations. Its mission is to educate the whole student and foster a collegial program that challenges each learner with rigorous academics, which includes components of the International Baccalaureate program, and innovative strategies. The school currently operates three campuses and plans to leverage facilities to support organic growth and matriculation across all of its facilities in the Austin metropolitan statistical area. S&P said, "The stable outlook reflects our expectation that, in the next year, Wayside Schools will continue to work to shore up operations and liquidity following a weak financial performance in fiscal 2019 toward generating positive revenue over expenses, and keeping its maximum annual debt service (MADS) and debt service coverage in line with those of peers, while working to build its liquidity position. We anticipate the school's demand profile will continue to reflect improving overall academics, a very thin waitlist, and management's effort to stabilize enrollment trends." "We could lower the rating if enrollment declines significantly, operations produce deficits due to unexpected operating costs tied to the opening of the Bradshaw campus, MADS coverage weakens, or cash on hand decreases significantly below current levels. Although we believe the organization has taken steps to address COVID-19, and we understand the coronavirus to be a global risk, we could consider a negative rating action during the outlook period should unforeseen pressures related to the pandemic materially affect the organization's reserves, demand, or trajectory." A positive rating action is unlikely over the one-year outlook horizon, given recently softened margins due to construction delays leading to lower MADS coverage during the same time period. However, S&P could raise the rating outside the outlook horizon if the school demonstrates a trend of higher MADS coverage and liquidity that is more consistent with that of a higher rating category while maintaining its enrollment and demand profile. WEINSTEIN CO: Gets Court's Approval for Chapter 11 Plan Vote ------------------------------------------------------------ Law360 reports that a Delaware bankruptcy judge on Thursday overrode objections from women accusing Harvey Weinstein of sexual assault to send his movie studio's Chapter 11 plan for a vote, provided creditors can opt out of the third-party legal releases. During a phone hearing, U.S. Bankruptcy Judge Mary Walrath agreed with the U.S. Trustee's Office that The Weinstein Co.'s unsecured creditors should be allowed to choose whether to release third parties from liability. But she said the objecting victims were not being disenfranchised by receiving an equal vote with parties with potentially less serious or less valid claims. About The Weinstein Company The Weinstein Company (TWC) -- http://www.WeinsteinCo.com/-- is a multimedia production and distribution company launched in 2005 in New York by Bob and Harvey Weinstein, the brothers who founded Miramax Films in 1979. TWC also encompasses Dimension Films, the genre label founded in 1993 by Bob Weinstein. During Harvey and Bob's tenure at Miramax and TWC, they have received 341 Oscar nominations and won 81 Academy Awards. TWC dismissed Harvey Weinstein in October 2017, after dozens of women came forward to accuse him of sexual harassment, assault or rape. The Weinstein Company Holdings LLC and 54 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-10601) on March 19, 2018 after reaching a deal to sell all assets to Lantern Asset Management for $310 million. The Weinstein Company Holdings estimated $500 million to $1 billion in assets and $500 million to $1 billion in liabilities. The Hon. Mary F. Walrath is the case judge. Cravath, Swaine & Moore LLP is the Debtors' bankruptcy counsel, with the engagement led by Paul H. Zumbro, George E. Zobitz, and Karin A. DeMasi, in New York. Richards, Layton & Finger, P.A., is the local counsel, with the engagement headed by Mark D. Collins, Paul N. Heath, Zachary I. Shapiro, Brett M. Haywood, and David T. Queroli, in Wilmington, Delaware. The Debtors also tapped FTI Consulting, Inc., as restructuring advisor; Moelis & Company LLC as investment banker; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The Office of the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on March 28, 2018. The Committee tapped Pachulski Stang Ziehl & Jones, LLP as its legal counsel, and Berkeley Research Group, LLC, as its financial advisor. WESTMORELAND COAL: McKinsey Trial on Hold Until 2021 ---------------------------------------------------- Rick Archer of Law360 reports that a Texas bankruptcy judge in mid-September 2020 said the half-done trial over consulting giant McKinsey & Co.'s disclosures in Westmoreland Coal Co.'s Chapter 11 will stay on hold until January 2021 to wait out COVID-19 restrictions on in-person court appearances. At a remote status conference, U.S. Bankruptcy Judge David Jones said his "conservative" expectations were that coronavirus restrictions on the court would stay in place through the end of the year, but that live testimony and argument were important enough to wait before longtime McKinsey foe Jay Alix puts on his case against the firm. "I have a very strong preference to finish this in person," he said. Acting through the purpose-built entity Mar-Bow Value Partners LLC, Alix -- the retired founder of turnaround consultancy and McKinsey competitor AlixPartners LLP -- is contesting McKinsey's request for court approval of Westmoreland's November 2018 application to hire McKinsey to assist in its now-completed $1.4 billion restructuring. Alix has filed actions in multiple bankruptcy cases accusing McKinsey of failing to disclose business and financial connections to interested parties in the cases. In the trial, which opened Feb. 5, McKinsey claimed it disclosed every relevant connection the firm has to parties with an interest in the Westmoreland case, while Alix and the U.S. Trustee's Office repeated their allegations that McKinsey was still holding back information from the court. On March 18, following eight days of testimony from and cross-examination of witnesses called by McKinsey, both sides asked Judge Jones to adjourn the trial until April, citing COVID-19 travel restrictions. In April McKinsey asked that the trial be resumed electronically, but Judge Jones ruled that that would be unfair to Alix, as McKinsey had made the bulk of its case conventionally. A combination in-person and remote hearing was held June 5 on Mar-Bow's motion for judgment on partial findings, which Judge Jones denied. Last week Alix — who had argued against conducting the trial remotely in April — filed a status report telling the court he planned to ask to resume the trial remotely in the beginning of October, noting the case has been delayed six months with "no end in sight." In McKinsey's response it agreed the trial should be restarted but disagreed with Alix's proposed procedures. Judge Jones, however, said that given the importance of the case he had a "very strong preference to finish the way we started," and would go forward when in-person testimony and argument became possible. He said he expects the current COVID-19 orders will be extended through Dec. 31, 2019, but not after that. He said he had set aside the first week of January and the first week of February to finish the trial. Mar-Bow counsel Sean O'Shea said Mar-Bow's own "strong preference" had been to proceed in person, and that it expects it will need nine days to put on its case. McKinsey is represented by Faith E. Gay, Jennifer M. Selendy, Maria Ginzburg and David S. Flugman of Selendy & Gay PLLC, Zack A. Clement of Zack A. Clement PLLC and M. Natasha Labovitz, Winston M. Paes and Erica Weisgerber of Debevoise & Plimpton LLP. Mar-Bow is represented by Sean O'Shea, Michael E. Petrella and Amanda Devereux of Cadwalader Wickersham & Taft LLP, Steven Rhodes of Steven Rhodes Consulting LLC, Daniel L. Lemisch of Lakeview Capital Inc. and Christopher R. Murray and Erin E. Jones of Jones Murray & Beatty LLP. The U.S. Trustee's Office is represented in-house by Diane G. Livingstone and Hugh M. Bernstein. About Westmoreland Coal Based in Englewood, Colorado, Westmoreland Coal Company (otcmkts:WLBA) -- http://www.westmoreland.com/-- is an independent coal company based in the United States. The Company produces and sells thermal coal primarily to investment grade utility customers under long-term, cost-protected contracts. Its focus is primarily on mine locations which allow it to employ dragline surface mining methods and take advantage of close customer proximity through mine-mouth power plants and strategically located rail transportation. At Dec. 31, 2017, the Company's U.S. coal operations were located in Montana, Wyoming, North Dakota, Texas, New Mexico and Ohio, and its Canadian coal operations were located in Alberta and Saskatchewan. The Company sold 49.7 million tons of coal in 2017. Westmoreland Coal reported a net loss applicable to common shareholders of $71.34 million for the year ended Dec. 31, 2017, a net loss applicable to common shareholders of $27.10 million for the year ended Dec. 31, 2016, and a net loss applicable to common stockholders of $213.6 million for the year ended Dec. 31, 2015. As of June 30, 2018, the Company had $1.45 billion in total assets, $2.14 billion in total liabilities and a total deficit of $686.2 million. Westmoreland Coal Company and 36 affiliates filed voluntary Chapter 11 petition (Bankr. S.D. Tex. Case No. 18-35672) on Oct. 9, 2018. The Debtors tapped Jackson Walker LLP and Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their legal counsel; Centerview Partners LLC as financial advisor; Alvarez & Marsal North America, LLC as restructuring advisor; PricewaterhouseCoopers LLP as consultant; and Donlin, Recano & Company, Inc. as notice and claims agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Oct. 19, 2018. The Committee tapped Morrison & Foerster LLP and Cole Schotz P.C. as its legal counsel. Judge David Jones of the Bankruptcy Court for the Southern District of Texas on March 2, 2019, confirmed the Amended Joint Chapter 11 Plan. Pursuant to the Confirmation Order, debtor Westmoreland Mining LLC was renamed to Old Westmoreland Mining LLC effective as of March 8, 2019. WINDSTREAM HOLDINGS: Investor's Claims vs General Counsel Rejected ------------------------------------------------------------------ Law360 reports that a Delaware federal judge Wednesday, November 4, 2020, dismissed all claims brought against telecommunications company Windstream Holdings' general counsel and Uniti Fiber by an investor alleging a "multifaceted financial fraud" arose out of the now-bankrupt Windstream's spinoff of Uniti, saying the allegations don't plausibly allege anyone hid the spinoffs' risks. The 11-count complaint includes various fraud-based claims against defendants Uniti Fiber Holdings Inc. , Uniti Group Inc. , Uniti CEO Kenneth Gunderman and Windstream's general counsel, John P. Fletcher. But U. S. District Judge Leonard P. Stark dismissed all of the claims with prejudice. About Windstream Holdings Windstream Holdings, Inc., and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as its financial advisor, and Perella Weinberg Partners LP as investment banker. YOGAWORKS INC: Hires Force 10 Partners as Financial Advisor ----------------------------------------------------------- YogaWorks, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Shulman Bastian Friedman & Bui LLP, as counsel to the Debtors. YogaWorks, Inc. requires Shulman Bastian to: (a) advise the Debtors with respect to their rights, powers, duties and obligations as debtors in possession in the administration of the Cases, the management of their business affairs and the management of their property; (b) advise the Debtors regarding their legal rights and responsibilities under the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; (c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; (d) advise and assist the Debtors with respect to compliance with the requirements of the Office of the United States Trustee; (e) assist the Debtors with the sale of all or substantially all of their assets pursuant to section 363 of the Bankruptcy Code; (f) advise the Debtors regarding matters of bankruptcy law, including the rights and remedies of the Debtors with respect to their assets and with respect to the claims of creditors; (g) take all necessary or appropriate actions in connection with a chapter 11 plan(s) and related disclosure statement(s) and all related documents, and such further actions as may be required in connection with the administration of the Debtors' estates; (h) appear at hearings before the Court on behalf of the Debtors; and (i) perform all other necessary legal services that are desirable and necessary for the efficient and economic administration of these chapter 11 cases. Shulman Bastian will be paid at these hourly rates: Alan J. Friedman, Partner $675 Melissa Davis Lowe, Partner $495 Lori Gauthier, Paralegal $250 Prior to the Petition Date, the Debtors paid Shulman Bastian retainers in the total amount of $199,490.76. Prior to the commencement of the Cases, Shulman Bastian incurred total fees and costs of $197,743.19, leaving a pre-petition balance of $1,747.57 remaining in the Firm's trust account. Shulman Bastian will also be reimbursed for reasonable out-of-pocket expenses incurred. Alan J. Friedman, partner of Shulman Bastian Friedman & Bui 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 does not represent any interest adverse to the Debtors and their estates. Shulman Bastian can be reached at: Alan J. Friedman, Esq. Melissa Davis Lowe, Esq. SHULMAN BASTIAN FRIEDMAN & BUI LLP 100 Spectrum Center Drive; Suite 600 Irvine, CA 92618 Tel: (949) 427-1654 Fax: (949) 340-3000 E-mail: afriedman@shulmanbastian.com mlowe@shulmanbastian.com About YogaWorks Inc. YogaWorks, Inc. is a leading provider of progressive and quality yoga that promotes total physical and emotional well-being. It caters to students of all levels and ages with both traditional and innovative programming. YogaWorks is also an international teaching school, cultivating the richest yoga talent from around the globe and setting the gold standard for teaching. For more information on YogaWorks, visit http://www.yogaworks.com/ YogaWorks and Yoga Works, Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12599) on Oct. 14, 2020. In the petition signed by CEO Brian Cooper, YogaWorks was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Debtors have tapped Shulman Bastian Friedman & Bui LLP as restructuring counsel, Cozen O'Connor as Delaware restructuring counsel, and Force Ten Partners, LLC as financial advisor. BMC Group, Inc., is the claims agent. YOGAWORKS INC: Hires Force 10 Partners as Financial Advisor ----------------------------------------------------------- YogaWorks, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Force 10 Partners LLC, as financial advisor to the Debtors. YogaWorks, Inc. requires Force 10 Partners to: a. assist in the preparation of first day motions and developing procedures and processes necessary to implement such motions; b. assist with monthly operating reports, schedules, statements of financial affairs, UST packages and other financial information and disclosures required during the pendency of these cases; c. assist the Debtors and their legal counsel with preparation of all case motions requiring financial information or analysis; d. assist with the development and maintenance of a creditor matrix, claims and other parties in interest information; e. assist with developing accounting and operating procedures to segregate post-petition business transactions; f. assist with monitoring of all cash disbursements according to the DIP budget; g. assist with the preparation of DIP/cash collateral budgets and weekly monitoring and compliance thereof; h. assist with business operating activities as necessary; i. assist the Debtors in identifying and evaluating parties interested in facilitating Transactions either through purchasing the Debtors' securities, providing post- petition financing or purchasing the Debtors' assets; j. advise the Debtors on tactics and strategies for negotiating with potential parties to a transaction, creditors, and other stakeholders, and participate in such negotiations; k. assist the Debtors in preparing materials describing the Debtors for distribution and presentation to parties that might be interested in a Transaction; l. advise the Debtors on the timing, nature, and terms of new securities, other consideration, or other inducements to be offered pursuant to any Transaction; m. assist in the Debtors' over-bid process related to the proposed Section 363 sale of the Debtors' assets by seeking parties interested in over-bidding the stalking horse bid and facilitating due diligence and their incorporation into the process per the Debtors' bid procedures; n. render financial advice to the Debtors related to a Transaction and participate in meetings or negotiations with creditors, stakeholders, or other appropriate parties; n. render general financial advice, financial analytics, and modeling; o. assist in preparing the plan and disclosure statement; p. assist with the review, classification, and quantification of claims against the estates under the plan; q. assist in the identification of executory contracts and unexpired leases and performing the cost/benefit evaluations with respect to the assumption or rejection of each, as needed; r. assist in effectuating the plan; and s. render such other general business consulting or such additional assistance as Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals. Force 10 Partners will be paid at these hourly rates: Partners $550 to $750 Associates $350 to $595 Analysts $225 to $350 Staffs $100 to $225 Force 10 Partners will also be reimbursed for reasonable out-of-pocket expenses incurred. Adam Meislik, a partner of Force 10 Partners 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 Debtors and their estates. Force 10 Partners can be reached at: Adam Meislik FORCE 10 PARTNERS 20341 SW Birch, Suite 220 Newport Beach, CA 92660 Tel: (949) 357-2360 About YogaWorks Inc. YogaWorks, Inc. is a leading provider of progressive and quality yoga that promotes total physical and emotional well-being. It caters to students of all levels and ages with both traditional and innovative programming. YogaWorks is also an international teaching school, cultivating the richest yoga talent from around the globe and setting the gold standard for teaching. For more information on YogaWorks, visit http://www.yogaworks.com/ YogaWorks and Yoga Works, Inc. sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12599) on Oct. 14, 2020. In the petition signed by CEO Brian Cooper, YogaWorks was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Debtors have tapped Shulman Bastian Friedman & Bui LLP as restructuring counsel, Cozen O'Connor as Delaware restructuring counsel, and Force Ten Partners, LLC as financial advisor. BMC Group, Inc., is the claims agent. [*] Commercial Bankruptcy Filings Rose by 30% YTD in October ------------------------------------------------------------ Abla Advisor reports that year to date, Commercial Chapter 11 filings are up year-over-year by 30 percent with a total of 6,081 new filings, compared to 4,677 in the same period last year, according to Epiq. However, new Commercial Chapter 11 filings in October were down 26.5 percent compared to September, with a total of 550 new filings compared to the previous month's 749 filings. Epiq, a global leader in legal services, released its October 2020 bankruptcy filing statistics from its AACER business. "The lull in corporate filings is due to abundant liquidity which has enabled distressed companies to stabilize in the short term. Companies will need to assess the longer-term impact of a slower recovery with a more significant disruption to their business," said Deidre O'Connor, Managing Director at Epiq corporate restructuring." Overall, bankruptcy filings across all chapters were down 40.7 percent for October over the same period last year. There was a total of 40,209 new filings, which is down from 67,857 a year ago. So far in 2020, bankruptcy filings across all chapters are down 29 percent over the same period last year. There was a total of 460,269 new filings compared to the same period last year of 648,525 new filings. "Non-commercial bankruptcy filing activity continues its steep decline due to the COVID-19 pandemic," said Chris Kruse, Senior Vice President of Epiq AACER. “The various stimulus programs put in place earlier in the year created enough liquidity to stave off normal bankruptcy activity." So far in 2020, new Chapter 13 and Chapter 7 filings were down 44 percent and 21 percent, respectively. Chapter 13 Non-Commercial filings were 128,700 compared to 231,688 in the same period last year. Year-to-date Chapter 7 non-commercial filings was 302,745, compared to 382,625 in the same period last year. [*] Note of Environmental Obligations When Filing for Bankruptcy ---------------------------------------------------------------- Maria de la Motte and Dianne Phillips of Holland & Knight LLP wrote an article on JDSupra titled "When Considering Bankruptcy, Don't Forget About Environmental Obligations." In light of the economic downturn caused by the COVID-19 pandemic, bankruptcy and restructuring considerations are a reality for many organizations. Debtors reorganizing under Chapter 11 of the U.S. Bankruptcy Code should be aware that environmental obligations may be exempt from the automatic stay and that some environmental obligations will not be dischargeable in bankruptcy. This Holland & Knight alert provides an overview of common issues arising at the intersection of bankruptcy and environmental law. With economic downturn comes bankruptcy. It is often observed that the intersections between the U.S. Bankruptcy Code and environmental law can create conflict, because while many federal and state environmental statutes seek to hold parties responsible for contamination, in some cases, many years after a release has occurred, the Bankruptcy Code seeks to offer debtors a fresh start. There is little U.S. Supreme Court case law to guide courts in this area, and these matters are often highly fact-dependent, leading to variation in how different jurisdictions will treat similar issues. Depending on the concerns facing your organization, it may be important to bring environmental attorneys into the conversation early in the Chapter 11 process. This alert highlights a number of key topics, but by no means represents an exhaustive summary of the challenges that can arise in this complex area of the law. Not All Environmental Obligations Are Subject to the Automatic Stay One important consideration is whether an environmental claim or obligation will be subject to the automatic stay. Section 362(a) of the Bankruptcy Code mandates that pre-petition claims of creditors are automatically stayed, triggered by the filing of the bankruptcy petition.1 There is an exception to the automatic stay for a governmental entity's commencement or continuation of an action within its police or regulatory power.2 An action to collect a monetary judgment, however, will be stayed.3 A Chapter 11 debtor must comply with environmental laws prior to filing its plan of reorganization – and afterwards, if it remains in possession.4 Analysis of the police and regulatory power exception to the automatic stay is not only highly fact-dependent, but similar facts are sometimes analyzed differently by courts in counterintuitive ways, highlighting the importance of engaging counsel familiar with this area of the law in your jurisdiction.5 Generally, the automatic stay will not be effective against proceedings to fix penalty amounts, natural resource damage amounts or involving the share of costs to be allocated to a "Potentially Responsible Party" (PRP) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).6 In considering whether such claims fall within the police and regulatory power exception to the automatic stay, most courts will employ one or both of two tests – the pecuniary purpose test and public policy test.7 Under the pecuniary purpose test, reviewing courts focus on whether the proceeding relates primarily to the government's pecuniary interest or to matters of public safety, with matters of public safety falling within the exception to the automatic stay. Under the public policy test, courts except proceedings effectuating public policy from the stay, whereas those adjudicating private rights (for example, a government agency's suit to recover from a contractor who failed to deliver goods) will be stayed.8 The automatic stay will, however, be effective against the enforcement of monetary judgments, even if such enforcement is in furtherance of the government's regulatory powers, because otherwise, the government would receive unfair treatment compared with other creditors.9 For example, efforts to collect a PRP's share of CERCLA cleanup costs will be stayed.10 Not All Environmental "Claims" Are Dischargeable Chapter 11 allows debtors to discharge all claims arising before the bankruptcy petition.11 The Bankruptcy Code defines a "claim" as a "right of payment" or "right to an equitable remedy for breach of performance if such breach gives rise to a right of payment."12 The meaning of this definition in the context of environmental obligations has been the subject of considerable – and at times inconsistent – interpretation by courts. Compliance with Environmental Laws and Regulations After a Chapter 11 debtor has reorganized, the organization will still need to comply with environmental laws.13 Accordingly, orders addressing ongoing pollution will often not be dischargeable.14 There are cases where courts have refused to confirm a reorganization plan because the debtor did not satisfactorily demonstrate that it could comply with environmental laws if allowed to remain in possession after reorganization.15 Courts are sometimes skeptical, however, of attempts by government agencies to collect a monetary claim arising from a pre-petition act of the debtor by characterizing the claim as a regulatory action to address ongoing pollution.16 Monetary claims related to pre-petition releases, including natural resources damages, are generally dischargeable in bankruptcy.17 This includes claims brought by the government 18 and those brought by private parties.19 Fines and Penalties Fines or penalties payable to a government agency, however, may not be dischargeable in bankruptcy.20 There is noteworthy variation in how different courts have treated fines and penalties. A recent Delaware case found that pre-petition penalties for air emission violations were dischargeable claims.21 In contrast, other courts have not only refused to allow penalties to be discharged, but have granted them first priority payment as administrative expenses that are "actual, necessary costs and expenses of preserving the estate."22 These courts have characterized fines and penalties,23 or even administrative and legal costs incurred by a state agency in arranging remediation efforts,24 as part of the "cost of doing business" for the debtor, and therefore benefiting the estate, while other courts have found that penalties that seek to "punish and deter" do not benefit the estate and therefore should not receive administrative expense priority.25 Pre-Petition Monetary Claims vs. Injunctions Another common issue is whether an environmental injunction, consent order, or other such obligation related to pre-petition activities of the debtor constitutes a pre-petition claim dischargeable in bankruptcy. Factors courts examine include (1) whether the debtor is capable of performing the cleanup, (2) whether the pollution is ongoing, and (3) whether the environmental agency has an option under the applicable environmental statute and regulations to remedy the problem itself and seek reimbursement from the debtor.26 In considering whether the debtor is capable of performing the cleanup, some courts focus on whether the debtor has access to the property, with the ability of the debtor to access the property weighing towards finding a non-dischargeable obligation rather than a dischargeable monetary claim.27 Other courts consider whether the debtor can personally complete the actions required by the injunction, reasoning that any expenditure of money makes an injunction the equivalent of a monetary claim.28 Most courts, however, recognize that almost all injunctions require some money to be spent,29 and one court even found that a requirement to pay a performance bond did not constitute a monetary claim, because the purpose of the bond was to ensure the debtor's performance under the order, not to reimburse costs incurred by the state.30 The issue of whether pollution is ongoing can sometimes be dispositive, as courts are reluctant to allow an ongoing threat to human health or the environment.31 For example, where a debtor's predecessor had improperly drained wetlands, and a state agency sought to require the debtor to build new replacement wetlands in another location, the court found that the agency was, in essence, seeking "compensation for past misconduct," not seeking an order ameliorating ongoing pollution.32 The court distinguished these facts from cases where hazardous waste is continuing to migrate into waterways unabated. 33 In another case, an injunction requiring a debtor to remove asbestos from buildings was dischargeable, because the asbestos would create a hazard only if removed or disturbed, and therefore, its presence did not qualify as ongoing pollution.34 Cases discussing whether the U.S. Environmental Protection Agency (EPA) or a state agency could opt to complete the desired action itself and seek reimbursement highlight the importance of understanding the underlying environmental statutes. For example, under CERCLA, EPA has the option to remediate a contaminated site and then sue PRPs for response costs, so an order to clean up a site, to the extent that it imposes obligations beyond any obligation to stop ongoing pollution, will be a dischargeable claim.35 In contrast, under other statutes, such as the Clean Water Act or the Resource Conservation and Recovery Act (RCRA), where the government has no such option to seek payment, an injunction will not likely be found to be a dischargeable claim. 36 Courts conduct a similar analysis of state statutes.37 Determining When a Claim Arises A further wrinkle is that the threshold question of whether a claim arose pre-petition, and is therefore even potentially dischargeable, can be complicated for environmental claims, especially for contingent claims, such as claims seeking future response costs and future natural resource damage costs. Different jurisdictions apply different tests to determine when a claim arose, with many endorsing the "fair contemplation" approach.38 In In re Jensen, the U.S. Court of Appeals for the Ninth Circuit held that all future response and natural resource damage costs based on pre-petition conduct that can be "fairly contemplated by the parties" at the time of the debtors' bankruptcy are dischargeable claims under the Bankruptcy Code.39 Relevant factors include "knowledge by the parties of a site in which there may be liability, notification by the creditor to the debtor of potential liability, commencement of investigation and cleanup activities, and the incurrence of response costs."40 Other courts hold that an environmental claim arises "when a potential claimant can tie the bankruptcy debtor to a known release of a hazardous substance,"41 look to when the acts giving rise to the liability occurred42 or consider when there was a relationship in which liability could arise.43 Ability to Abandon Property May Be Limited Another issue that can arise at the intersection of bankruptcy and environmental law is whether contaminated property can be abandoned. Under Section 544(a) of the Bankruptcy Code, a trustee can abandon property which is burdensome or of inconsequential value to the estate.44 However, in Midlantic National Bank v. New Jersey Department of Environmental Protection, the U.S. Supreme Court held that "a trustee may not abandon property in contravention of a state statute or regulation that is reasonably designed to protect the public or safety from identified hazards."45 Cases following Midlantic have interpreted this holding with varying degrees of breadth. On the narrow end of the spectrum, an Oklahoma court allowed abandonment where it "will not aggravate the existing situation, create a genuine emergency nor increase the likelihood of disaster or intensification of polluting agents."46 A Minnesota court, taking a more moderate approach, laid out a balancing test considering "(1) the imminence of danger to the public health and safety, (2) the extent of probable harm, (3) the amount and type of hazardous waste, (4) the cost to bring the property into compliance with environmental laws, and (5) the amount and type of funds available for cleanup."47 Some courts have taken a still-broader reading, holding that a property cannot be abandoned without full compliance with all applicable environmental law.48 Purchasers in 363 Sales Should Still Conduct All Appropriate Inquiries Section 363(f) of the Bankruptcy Code allows a debtor, upon notice to all creditors and with bankruptcy court approval, to sell assets free and clear of claims and interests.49 Potential purchasers of such a property should be cautioned that real property is not really "free and clear" with respect to contamination, because while a purchaser in a 363(f) sale is not liable for claims and interests as a successor of the debtor, it can still be held liable as a current owner or operator under CERCLA. Therefore, purchasers at a 363(f) sale will still want to establish an available landowner liability defense, such as qualifying as a Bona Fide Prospective Purchaser. For more information about available landowner liability defenses and conducting All Appropriate Inquiries as part of establishing such a defense, see Holland & Knight's previous alert: "Environmental Due Diligence in the Wake of Atlantic Richfield," May 27, 2020. Conclusion and Considerations For legal guidance on bankruptcy and restructuring issues, contact a member of Holland & Knight's Bankruptcy, Restructuring and Creditors' Rights Group. Holland & Knight's Environmental Team is a multidisciplinary team of lawyers and professionals who are well informed on emerging environmental issues and well positioned to assist with the environmental concerns that may arise throughout the bankruptcy process. For questions about this alert or for legal counsel about a specific situation involving your organization, please contact the authors. Notes 1 11 U.S.C. § 362(a). 2 11 U.S.C. § 362(b)(4). 4 See In re Commonwealth Oil Refining Co., 805 F.2d 1175 (5th Cir. 1986) (U.S. EPA's RCRA enforcement action not stayed; before filing its plan of reorganization, debtor was required to cease treating, storing and disposing of waste without EPA permit and submit closure and post-closure plans for its disposal facilities). 5 Compare In re Goodwin, 163B.R. 825 (Bankr. D. Idaho 1993) (Idaho Department of Health and Welfare's suit seeking injunction stayed as a pre-petition claim because under the applicable statute, the state could have sought money damages instead) and City of New York v. Exxon Corp., 932 F.2d 1020 (2d Cir. 1991) (New York City's suit for CERCLA recovery not stayed, which sought reimbursement of waste removal costs, natural resource damages, and a declaratory judgment that debtor was liable for future costs). 6 See U.S. v. Jones & Laughlin Steel Corp., 804 F.2d 348 (6th Cir. 1986) (Judicial proceeding to fix the amounts debtor owed to various government entities not stayed, as resolution represented a regulatory action and would not affect the assets available to other creditors). See also City of New York v. Exxon Corp., 932 F.2d 1020 (2d Cir. 1991); U.S. v. Nicolet, Inc., 857 F.2d 202 (3d Cir. 1988); In re Commerce Oil Co., 847 F.2d 291 (6th Cir. 1988); U.S. v. Sugarhouse Realty, 162 B.R. 113 (E.D. Pa. 1993); U.S. v. Alsol Corp., 2014 WL 46775 (D.N.J. Jan. 2, 2014). 7 See In re Commerce Oil Co., 847 F.2d 291, 295 (6th Cir. 1988). 9 See U.S. v. Nicolet, Inc., 857 F.2d 202 (3d Cir. 1988); In re Commonwealth Oil Refining Co., 805 F.2d 1175, 1183 (5th Cir. 1986); Penn Terra Ltd. v. Dep't of Envtl. Res., 733 F.2d 267, 272 (3d Cir. 1984); U.S. v. Sugarhouse Realty, 162 B.R. 113, 117 (E.D. Pa. 1993). 10 See U.S. v. Nicolet, Inc., 857 F.2d 202 (3d Cir. 1988); U.S. v. Alsol Corp., 2014 WL 46775 (D.N.J. Jan. 2, 2014). 11 11 U.S.C. § 1141(d). 12 11 U.S.C. § 101(5)(A-B). 13 See Ohio v. Kovacs, 469 U.S. 274, 285 (1985); In re CMC Heartland Partners, 966 F.2d 1143, 1146 (7th Cir. 1992); In re Industrial Salvage, Inc., 196 B.R. 784, 790 (Bankr. S.D. Ill. 1996). 14 See generally U.S. v. Apex Oil Co., 579 F.3d 734 (7th Cir. 2009); In re Torwico Electronics, Inc. v. N.J. Dep't of Envtl. Prot., 8 F.3d 146 (3d Cir. 1993); In re Chateaugay Corp., 944 F.2d 997 (2d Cir. 1991); In re Taylor, 572 B.R. 592 (Bankr. E.D.N.C. 2017); Mark IV Industries Inc. v. N.M. Env't Dep't, 438 B.R. 460 (Bankr. S.D.N.Y. 2010); In re Industrial Salvage, Inc., 196 B.R. 784 (Bankr. S.D. Ill. 1996). 15 See, e.g., In re Jager, 609 B.R. 156 (Bankr. W.D. Penn. 2019); In re Lewis, 215 B.R. 880 (Bankr. D. Alaska 1997). 16 See, e.g., In re Peabody Energy Corp., 958 F.3d 717 (8th Cir. 2020) (state statutory and common law tort claims discharged in bankruptcy as claims to recover money, not claims brought under the police or regulatory power of the state); In re G-I Holdings Inc., 654 Fed. Appx. 571, 574 (3d Cir. 2016) (New York City Housing Authority's claims seeking asbestos removal discharged in bankruptcy as a monetary claim for property damage, not a regulatory action to abate ongoing pollution). For further discussion of the Eighth Circuit's recent decision in In re Peabody Energy Corp., see Holland & Knight's Energy and Natural Resources Blog: "U.S. Court of Appeals Holds That Climate Change Tort Claims Are Dischargeable in Bankruptcy," Aug. 21, 2020. 17 See generally Ohio v. Kovacs, 469 U.S. 274 (1985); In re Nat. Gypsum Co., 139 B.R. 397 (Bankr. N.D. Tex. 1992). 18 See, e.g., Ohio v. Kovacs, 469 U.S. 274, 283-85 (1985); In re Peabody Energy Corporation, 958 F.3d 717, 724 (8th Cir. 2020); In re Chateauguay Corp., 944 F.2d 997, 1008 (2d Cir. 1991); In re G-I Holdings Inc., 654 Fed. Appx. 571, 572 (3d Cir. 2016); In re Jimmo, 204 B.R. 655, 660 (Bankr. D. Conn. 1997). 19 See, e.g., In re Chemtura Corp., 439 B.R. 561, 570 (Bankr. S.D.N.Y. 2010); In re Texaco Inc., 182 B.R. 937, 953-54 (Bankr. S.D.N.Y. 1995). 20 See, e.g., Cumberland Farms v. Fla. Dep't of Envtl. Prot., 116 F.3d 16, 20 (1st Cir. 1997); In re Jimmo, 204 B.R. 655, 659 (Bankr. D. Conn. 1997). 21 See In re Exide Technologies, 613 B.R. 79, 81 (Bankr. D. Del. 2020), appeal docketed, No. 20-8023 (3d Cir. April 23, 2020). 22 11 U.S.C. §§ 507(a), 503(b)(1)(A); see In re Chateaugay Corp., 944 F.2d 997, 1009-10 (2d Cir. 1991). 23 See Cumberland Farms v. Fla. Dep't of Envtl. Prot., 116 F.3d 16, 22 (1st Cir. 1997) ("The payment of a fine for failing, during bankruptcy, to meet the requirements of Florida environmental protection laws is a cost 'ordinarily incident to operation of a business' in light of today's extensive environmental regulations."). 24 See Com. of Pa. Dep't of Env. Res. v. Conroy, 24 F.3d 568, 569-71 (3d Cir. 1994). 25 See In re Exide Technologies, 613 B.R. 79, 89 (Bankr. D. Del. 2020), appeal docketed, No. 20-8023 (3d Cir. April 23, 2020). 26 Mark IV Industries Inc. v. N.M. Env. Dep't, 438 B.R. 460, 467-68 (Bankr. S.D.N.Y. 2010). 27 See, e.g., Ohio v. Kovacs, 469 U.S. 274, 283 (1985); In re Torwico Electronics, Inc. v. N.J. Dep't of Envtl. Prot., 8 F.3d 146, 151 (3rd Cir. 1993); In re Taylor, 572 B.R. 592, 603 (Bankr. E.D.N.C. 2017); Mark IV Industries Inc. v. N.M. Env. Dep't, 438 B.R. 460, 469 (Bankr. S.D.N.Y. 2010). 28 See, e.g., U.S. v. Whizco, Inc., 841 F.2d 147, 151 (6th Cir. 1988); Gable v. Borges Const., Inc., 792 F. Supp. 2d 117, 123 (D. Mass. 2011). 29 See, e.g., U.S. v. Apex Oil Co., 579 F.3d 734 (7th Cir. 2009); In re Torwico Electronics, Inc. v. N.J. Dep't of Envtl. Prot., 8 F.3d 146 (3d Cir. 1993); In re Commonwealth Oil Refining Co., 805 F.2d 1175, 1186 (5th Cir. 1986); Mark IV Industries Inc. v. N.M. Env. Dep't, 438 B.R. 460, 467 (Bankr. S.D.N.Y. 2010); In re Industrial Salvage, Inc., 196 B.R. 784, 789 (Bankr. S.D. Ill. 1996). 30 See U.S. v. Hubler, 117 B.R. 160, 164-65 (W.D. Pa. 1990). 31 See generally In re Torwico Electronics, Inc. v. N.J. Dep't of Envtl. Prot., 8 F.3d 146, 151 (3rd Cir. 1993). 32 See In re IT Group, Inc., Co. 339 B.R. 338, 342-43 (D. Del. 2006). 34 In re G-I Holdings Inc., 654 Fed. Appx. 571, 574 (3d Cir. 2016). 35 In re Chateaugay Corp., 944 F.2d 997, 1008 (2d Cir. 1991). 36 U.S. v. Apex Oil Co., 579 F.3d 734, 736-37 (7th Cir. 2009); In re Taylor, 572 B.R. 592, 603 (Bankr. E.D.N.C. 2017). 37 See, e.g., Mark IV Industries Inc. v. N.M. Env. Dep't, 438 B.R. 460, 469 (Bankr. S.D.N.Y. 2010) (where New Mexico Water Quality Act did not allow the state to conduct the cleanup itself and recover costs, injunction was not a dischargeable claim). 38 See, e.g., In re Crystal Oil Co., 158 F.3d 291, 298 (5th Cir. 1998); In re Jensen, 995 F.2d 925, 930 (9th Cir. 1993); In re Nat. Gypsum Co., 139 B.R. 397, 409 (N.D. Tex. 1992); In re Motors Liquidation Co., 598 B.R. 744, 756 (S.D.N.Y. 2019). 39 In re Jensen, 995 F.2d 925, 930 (9th Cir. 1993) (internal citation omitted). 40 United Artists Theatre Circuit, Inc. v. Cal. Regional Water Quality Control Bd., 255 Cal. Rptr. 3d 796, 831 (2019). 41 In re Crystal Oil Co., 158 F.3d 291, 298 (5th Cir. 1998). 42 See, e.g., In re Parker, 313 F.3d 1267, 1269-70 (10th Cir. 2002); Grady v. A.H. Robins Co., 839 F.2d 198, 203 (4th Cir. 1988). 43 See In re Motors Liquidation Co., 598 B.R. 744, 755 (S.D.N.Y. 2019). 44 11 U.S.C. § 554(a). 45 Midlantic Nat. Bank v. N.J. Dep't of Envtl. Prot., 474 U.S. 494, 507 (1986). 46 In re Oklahoma Refining Co., 63 B.R. 562, 565 (Bankr. W.D. Okla. 1986). See also In re Smith-Douglass, Inc., 856 F.2d 12, 16 (4th Cir. 1988); In re Brio Refining, Inc., 86 B.R. 487, 489 (N.D. Tex. 1988). 47 In re Franklin Signal Corp., 65 B.R. 268, 272 (Bankr. D. Minn. 1986). 48 See, e.g., In re Peerless Plating Co., 70 B.R. 943, 946-47 (Bankr. W.D. Mich. 1987). 49 11 U.S.C. § 363(f). [^] BOND PRICING: For the Week from November 2 to 6, 2020 --------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 24 Hour Fitness Worldwide HRFITW 8.000 1.344 6/1/2022 24 Hour Fitness Worldwide HRFITW 8.000 1.344 6/1/2022 AMC Entertainment Holdings AMC 5.750 5.939 6/15/2025 AMC Entertainment Holdings AMC 6.125 5.296 5/15/2027 AMC Entertainment Holdings AMC 5.875 5.069 11/15/2026 Ally Financial Inc ALLY 3.450 99.426 11/15/2020 Ally Financial Inc ALLY 3.800 99.427 11/15/2020 American Airlines 2013-1 Class B Pass Through Trust AAL 5.625 92.000 1/15/2021 American Energy- Permian Basin LLC AMEPER 12.000 1.384 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 1.384 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 1.384 10/1/2024 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Basic Energy Services Inc BASX 10.750 21.500 10/15/2023 Basic Energy Services Inc BASX 10.750 20.204 10/15/2023 Blue Ridge Bankshares Inc BRBS 6.750 95.736 12/1/2025 Blue Ridge Bankshares Inc BRBS 6.750 95.736 12/1/2025 Bristow Group Inc/old BRS 4.500 6.125 6/1/2023 Bristow Group Inc/old BRS 6.250 6.071 10/15/2022 Buffalo Thunder Development Authority BUFLO 11.000 50.125 12/9/2022 CBL & Associates LP CBL 5.250 37.400 12/1/2023 CEC Entertainment Inc CEC 8.000 5.000 2/15/2022 Calfrac Holdings LP CFWCN 8.500 9.000 6/15/2026 Calfrac Holdings LP CFWCN 8.500 9.000 6/15/2026 Callon Petroleum Co CPE 6.250 41.853 4/15/2023 Callon Petroleum Co CPE 6.375 27.165 7/1/2026 Callon Petroleum Co CPE 6.125 37.480 10/1/2024 Callon Petroleum Co CPE 8.250 29.687 7/15/2025 Callon Petroleum Co CPE 6.125 38.000 10/1/2024 Callon Petroleum Co CPE 6.125 37.500 10/1/2024 Chesapeake Energy CHK 11.500 15.500 1/1/2025 Chesapeake Energy CHK 5.500 5.625 9/15/2026 Chesapeake Energy CHK 6.625 4.875 8/15/2020 Chesapeake Energy CHK 8.000 5.000 6/15/2027 Chesapeake Energy CHK 5.750 5.813 3/15/2023 Chesapeake Energy CHK 4.875 5.875 4/15/2022 Chesapeake Energy CHK 11.500 14.280 1/1/2025 Chesapeake Energy CHK 7.000 5.000 10/1/2024 Chesapeake Energy CHK 8.000 5.500 1/15/2025 Chesapeake Energy CHK 7.500 5.938 10/1/2026 Chesapeake Energy CHK 8.000 5.390 3/15/2026 Chesapeake Energy CHK 8.000 5.390 3/15/2026 Chesapeake Energy CHK 8.000 5.492 1/15/2025 Chesapeake Energy CHK 8.000 5.469 6/15/2027 Chesapeake Energy CHK 8.000 5.390 3/15/2026 Chesapeake Energy CHK 8.000 5.469 6/15/2027 Chesapeake Energy CHK 8.000 5.492 1/15/2025 Chinos Holdings Inc CNOHLD 7.000 0.332 N/A Chinos Holdings Inc CNOHLD 7.000 0.332 N/A Corning Inc GLW 7.000 118.448 5/15/2024 Dean Foods Co DF 6.500 1.000 3/15/2023 Dean Foods Co DF 6.500 0.911 3/15/2023 Diamond Offshore Drilling DOFSQ 7.875 7.250 8/15/2025 Diamond Offshore Drilling DOFSQ 5.700 7.000 10/15/2039 Diamond Offshore Drilling DOFSQ 4.875 5.018 11/1/2043 Diamond Offshore Drilling DOFSQ 3.450 7.000 11/1/2023 ENSCO International Inc VAL 7.200 5.400 11/15/2027 EnLink Midstream Partners ENLK 6.000 46.500 N/A Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 1.006 0.072 1/30/2037 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 30.369 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 30.348 7/15/2023 Extraction Oil & Gas Inc XOG 7.375 25.000 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 25.000 2/1/2026 Extraction Oil & Gas Inc XOG 7.375 24.000 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 24.000 2/1/2026 FTS International Inc FTSINT 6.250 33.000 5/1/2022 Federal Farm Credit Banks Funding FFCB 2.430 99.443 11/13/2028 Federal Farm Credit Banks Funding FFCB 2.640 99.013 11/12/2030 Federal Home Loan Mortgage FHLMC 0.700 99.679 8/12/2025 Federal Home Loan Mortgage FHLMC 0.650 99.228 2/10/2025 Federal Home Loan Mortgage FHLMC 1.750 98.895 11/12/2024 Federal Home Loan Mortgage FHLMC 0.700 99.629 2/12/2025 Federal Home Loan Mortgage FHLMC 0.350 99.887 11/10/2022 Federal Home Loan Mortgage FHLMC 1.740 99.680 2/12/2024 Ferrellgas Partners LP / Ferrellgas Partners Finance FGP 8.625 18.000 6/15/2020 Ferrellgas Partners LP / Ferrellgas Partners Finance FGP 8.625 20.000 6/15/2020 Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011 Foresight Energy LLC / Foresight Energy Finance FELP 11.500 0.469 4/1/2023 Foresight Energy LLC / Foresight Energy Finance FELP 11.500 0.469 4/1/2023 Fortive FTV 2.350 101.169 6/15/2021 Frontier Communications FTR 10.500 45.000 9/15/2022 Frontier Communications FTR 7.125 40.500 1/15/2023 Frontier Communications FTR 8.750 42.000 4/15/2022 Frontier Communications FTR 6.250 42.750 9/15/2021 Frontier Communications FTR 9.250 41.750 7/1/2021 Frontier Communications FTR 10.500 44.575 9/15/2022 Frontier Communications FTR 10.500 44.575 9/15/2022 GNC Holdings Inc GNC 1.500 1.250 8/15/2020 General Electric Co GE 5.000 85.930 N/A Global Eagle Entertainment GEENQ 2.750 0.500 2/15/2035 Global Marine Inc GLBMRN 7.000 20.035 6/1/2028 Goodman Networks Inc GOODNT 8.000 53.000 5/11/2022 Great Western Petroleum LLC / Great Western Finance GRTWST 9.000 58.250 9/30/2021 Great Western Petroleum LLC / Great Western Finance GRTWST 9.000 55.501 9/30/2021 Guitar Center Inc GTRC 13.000 46.318 4/15/2022 Hertz Corp/The HTZ 6.250 39.750 10/15/2022 Hi-Crush Inc HCR 9.500 3.954 8/1/2026 Hi-Crush Inc HCR 9.500 7.180 8/1/2026 High Ridge Brands Co HIRIDG 8.875 2.914 3/15/2025 High Ridge Brands Co HIRIDG 8.875 2.914 3/15/2025 HighPoint Operating HPR 7.000 24.014 10/15/2022 HighPoint Operating HPR 8.750 20.760 6/15/2025 ION Geophysical IO 9.125 66.976 12/15/2021 ION Geophysical IO 9.125 71.727 12/15/2021 ION Geophysical IO 9.125 71.727 12/15/2021 ION Geophysical IO 9.125 71.727 12/15/2021 Inn of the Mountain Gods Resort & Casino INNMTN 9.250 97.125 11/30/2020 International Wire Group Inc ITWG 10.750 88.578 8/1/2021 International Wire Group Inc ITWG 10.750 88.578 8/1/2021 J Crew Brand LLC / J Crew Brand JCREWB 13.000 54.097 9/15/2021 JC Penney Corp Inc JCP 6.375 0.150 10/15/2036 JC Penney Corp Inc JCP 7.400 0.625 4/1/2037 JC Penney Corp Inc JCP 5.875 30.625 7/1/2023 JC Penney Corp Inc JCP 7.625 0.685 3/1/2097 JC Penney Corp Inc JCP 8.625 2.250 3/15/2025 JC Penney Corp Inc JCP 5.875 30.489 7/1/2023 JC Penney Corp Inc JCP 8.625 2.500 3/15/2025 JCK Legacy Co MNIQQ 6.875 0.592 3/15/2029 JCK Legacy Co MNIQQ 7.150 0.592 11/1/2027 Jonah Energy LLC / Jonah Energy Finance JONAHE 7.250 2.507 10/15/2025 Jonah Energy LLC / Jonah Energy Finance JONAHE 7.250 2.452 10/15/2025 K Hovnanian Enterprises Inc HOV 5.000 11.016 2/1/2040 K Hovnanian Enterprises Inc HOV 5.000 11.016 2/1/2040 LSC Communications Inc LKSD 8.750 16.063 10/15/2023 LSC Communications Inc LKSD 8.750 15.039 10/15/2023 Liberty Media LMCA 2.250 46.625 9/30/2046 Lonestar Resources America LONE 11.250 7.750 1/1/2023 Lonestar Resources America LONE 11.250 7.313 1/1/2023 MAI Holdings Inc MAIHLD 9.500 16.269 6/1/2023 MAI Holdings Inc MAIHLD 9.500 16.269 6/1/2023 MAI Holdings Inc MAIHLD 9.500 16.269 6/1/2023 MBIA Insurance MBI 11.497 28.829 1/15/2033 MBIA Insurance MBI 11.497 28.829 1/15/2033 MF Global Holdings Ltd MF 9.000 15.625 6/20/2038 MF Global Holdings Ltd MF 6.750 15.625 8/8/2016 Mashantucket Western Pequot Tribe MASHTU 7.350 16.359 7/1/2026 Men's Wearhouse Inc/The TLRD 7.000 1.750 7/1/2022 Men's Wearhouse Inc/The TLRD 7.000 1.461 7/1/2022 NWH Escrow HARDWD 7.500 40.435 8/1/2021 NWH Escrow HARDWD 7.500 40.435 8/1/2021 Nabors Industries Inc NBR 5.750 28.703 2/1/2025 Nabors Industries Inc NBR 0.750 26.250 1/15/2024 Nabors Industries Inc NBR 5.500 46.193 1/15/2023 Nabors Industries Inc NBR 5.750 28.936 2/1/2025 Nabors Industries Inc NBR 5.750 28.968 2/1/2025 Neiman Marcus Group LLC/The NMG 7.125 4.341 6/1/2028 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.750 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 5.161 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 27.250 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 27.250 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.141 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 5.161 10/25/2024 Nine Energy Service Inc NINE 8.750 28.092 11/1/2023 Nine Energy Service Inc NINE 8.750 28.474 11/1/2023 Nine Energy Service Inc NINE 8.750 28.742 11/1/2023 Northwest Hardwoods Inc HARDWD 7.500 35.625 8/1/2021 Northwest Hardwoods Inc HARDWD 7.500 35.250 8/1/2021 OMX Timber Finance Investments II LLC OMX 5.540 0.573 1/29/2020 Oasis Petroleum Inc OAS 6.875 22.625 3/15/2022 Oasis Petroleum Inc OAS 6.875 25.000 1/15/2023 Oasis Petroleum Inc OAS 2.625 23.000 9/15/2023 Oasis Petroleum Inc OAS 6.250 21.500 5/1/2026 Oasis Petroleum Inc OAS 6.500 23.125 11/1/2021 Oasis Petroleum Inc OAS 6.250 20.750 5/1/2026 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 65.250 6/1/2021 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 66.692 6/1/2021 Owens & Minor Inc OMI 3.875 100.595 9/15/2021 Party City Holdings Inc PRTY 6.125 39.462 8/15/2023 Party City Holdings Inc PRTY 6.125 39.462 8/15/2023 Peabody Energy BTU 6.000 40.909 3/31/2022 Peabody Energy BTU 6.375 28.728 3/31/2025 Peabody Energy BTU 6.375 29.144 3/31/2025 Peabody Energy BTU 6.000 44.097 3/31/2022 Pride International LLC VAL 7.875 8.150 8/15/2040 Pride International LLC VAL 6.875 6.263 8/15/2020 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products REV 5.750 36.466 2/15/2021 Revlon Consumer Products REV 6.250 11.310 8/1/2024 Rolta LLC RLTAIN 10.750 4.456 5/16/2018 SESI LLC SPN 7.125 26.579 12/15/2021 SESI LLC SPN 7.750 22.191 9/15/2024 SESI LLC SPN 7.125 26.000 12/15/2021 Sable Permian Resources Land LLC / AEPB Finance AMEPER 7.125 0.771 11/1/2020 SandRidge Energy Inc SD 7.500 0.500 2/15/2023 Sears Holdings SHLD 6.625 3.848 10/15/2018 Sears Holdings SHLD 6.625 3.848 10/15/2018 Sears Roebuck Acceptance SHLD 7.500 0.583 10/15/2027 Sears Roebuck Acceptance SHLD 6.500 0.689 12/1/2028 Sears Roebuck Acceptance SHLD 6.750 0.415 1/15/2028 Sempra Texas Holdings TXU 5.550 13.500 11/15/2014 Senseonics Holdings Inc SENS 5.250 30.063 1/15/2025 Senseonics Holdings Inc SENS 5.250 45.750 2/1/2023 Summit Midstream Partners LP SMLP 9.500 16.000 N/A TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Toys R Us Inc TOY 7.375 1.628 10/15/2018 Transworld Systems Inc TSIACQ 9.500 27.000 8/15/2021 Ultra Resources Inc/US UPL 11.000 5.125 7/12/2024 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 9.000 47.020 8/15/2021 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 9.000 47.057 8/15/2021 ********* 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 ***