/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/201125.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, November 25, 2020, Vol. 24, No. 329 Headlines 511 GROUP: U.S. Trustee Unable to Appoint Committee AGEMY FAMILY: Case Summary & 20 Largest Unsecured Creditors ALANI PROPERTY: U.S. Trustee Unable to Appoint Committee ALKERMES INC: Moody's Affirms Ba3 CFR, Outlook Stable ALTERRA MOUNTAIN: Moody's Downgrades CFR to B2, Outlook Stable ANCHOR PACKAGING: Moody's Upgrades CFR to B2, Outlook Stable ASI CAPITAL: Gets OK to Hire Faegre Drinker as Special Counsel AVON PRODUCTS: Moody's Upgrades Senior Unsecured Notes to B1 BAUSCH HEALTH: Fitch Assigns B Rating on Senior Unsecured Notes BAUSCH HEALTH: Moody's Assigns B3 Rating to New Sr. Unsec. Notes CATALENT PHARMA: Moody's Upgrades CFR to Ba3, Outlook Stable CLEVELAND-CLIFFS INC: Moody's Downgrades CFR to B2, Outlook Stable CNO FINANCIAL: Fitch Assigns BB Rating to $150MM Subordinated Debt CNO FINANCIAL: Moody's Assigns Ba1(hyb) Rating on $150MM Sub. Debt CONCRETE PUMPING: Moody's Affirms B2 CFR, Outlook Stable COSTA HOLLYWOOD: Trustee Hires Nelson Mullins as Legal Counsel DESTINATION HOPE: Sets Bid Procedures for Substantially All Assets DYCOM INDUSTRIES: S&P Ups Unsecured Convertible Note Rating to 'BB' EAGLE PIPE: Proposed Auction of Substantially All Assets Approved EDELMAN FINANCIAL: S&P Affirms 'B' ICR, Alters Outlook to Stable FLORIDA TILT: U.S. Trustee Unable to Appoint Committee FRANCHISE GROUP: Moody's Withdraws Ratings to $650MM Sec. Notes FURNITURE FACTORY: U.S. Trustee Appoints Creditors' Committee GARRETT MOTION: U.S. Trustee Appoints Equity Committee GARRETT MOTION: Wuxi Best Out of Creditors' Committee GUITAR CENTER: Case Summary & 30 Largest Unsecured Creditors HILLIARD CHAPEL: Voluntary Chapter 11 Case Summary IBIO INC: Posts $7.5 Million Net Loss in First Quarter IMPRIVATA INC: Fitch Assigns B+ LT IDR, Outlook Stable INVESTVIEW INC: Posts $1.2-Mil. Net Loss for Sept. 30 Quarter INVO BIOSCIENCE: Says Substantial Going Concern Doubt Exists IOTA COMMUNICATIONS: Posts $12.6M Loss for November 2019 Quarter IPSIDY INC: Reports $1.9M Net Loss for Quarter Ended Sept. 30 IQSTEL INC: Has $970,000 Net Loss for Quarter Ended Sept. 30 J.JILL INC: Has $19.0-Mil. Net Loss for Quarter Ended Aug. 1 JTS TRUCKING: Hearing on Albertville Property Sale Cont. to Dec. 10 LAPEER INDUSTRIES: Dec. 14 Auction of Substantially All Assets LESLIE'S POOLMART: S&P Upgrades ICR to 'B+' on Debt Reduction LINCOLN COUNTY, GA: S&P Withdraws Long-Term Bond Rating LONESTAR RESOURCES: Reports $34.8M Net Loss for Sept. 30 Quarter LOOP MEDIA: Losses Since Inception Cast Going Concern Doubt LSC COMMUNICATIONS: Posts $111M Net Loss for Sept. 30 Quarter MANHATTAN SCIENTIFICS: Has $1.8M Net Income for Sept. 30 Quarter MANNKIND CORP: Has $11.3M Net Loss for Quarter Ended Sept. 30 MASTEC INC: Moody's Upgrades CFR to Ba1, Outlook Stable MERION INC: Management Says Substantial Going Concern Doubt Exists MGBV PROPERTIES: U.S. Trustee Unable to Appoint Committee MICROVISION INC: Posts $2.8-Mil. Net Loss for Sept. 30 Quarter MID-CON ENERGY: Has $3.5M Net Loss for Quarter Ended Sept. 30 MOBILESMITH INC: Reports $2.6M Net Loss for the Sept. 30 Quarter MOBIQUITY TECHNOLOGIES: Has $4.0M Net Loss for Sept. 30 Quarter MTE HOLDINGS: Proposed Auction Sale of Assets Approved MY SIZE: Reports $1.7-Mil. Net Loss for Sept. 30 Quarter MYOS RENS: Posts $815,000 Net Loss for Quarter Ended Sept. 30 NATURALSHRIMP INC: Incurs $590,000 Net Loss in Second Quarter NET ELEMENT: Posts $2.33 Million Net Loss in Third Quarter NORBORD INC: S&P Puts BB ICR on Watch Positive on West Fraser Deal NORTHERN OIL: S&P Lowers ICR to 'SD' on Below-Par Debt Exchanges NORTHWEST BIOTHERAPEUTICS: Has $58M Net Loss for June 30 Quarter NS8 INC: Dec. 10 Auction of Substantially All Assets NS8 INC: U.S. Trustee Unable to Appoint Committee ONE AVIATION: AML Global Buying All Assets for $5.25 Million PPD INC: S&P Upgrades ICR to 'BB-'; Outlook Stable PREMIER ON 5TH: $562K Sale of All Assets to Avant Garde Approved PROFESSIONAL INVESTORS 22: Involuntary Chapter 11 Case Summary PROFESSIONAL INVESTORS 26: Involuntary Chapter 11 Case Summary PROFESSIONAL INVESTORS 27: Involuntary Chapter 11 Case Summary PROFESSIONAL INVESTORS 29: Involuntary Chapter 11 Case Summary PROFESSIONAL INVESTORS 37: Involuntary Chapter 11 Case Summary QUEST PATENT: Posts $49,615 Net Income in Third Quarter RAILWORKS LLC: Moody's Assigns B1 CFR, Outlook Stable RALPH M. BONHAM: WSC Buying 9.5K WSC Shares for $250K RICHARD C. ANGINO: Servant's Buying Harrisburg Property for $129K SCULPTOR CAPITAL: Fitch Affirms B+ IDR; Alters Outlook to Stable SCURRY COUNTY: Moody's Affirms Ba2 GOLT Rating, Outlook Stable SEI HOLDING I: Moody's Withdraws Ratings Following Debt Repayment SERENDIPITY LABS: Sets Bidding Procedures for All Assets SINCLAIR TELEVISION: S&P Rates New $550MM Senior Secured Notes 'BB' STEVEN FELLER: U.S. Trustee Unable to Appoint Committee SUMMIT MIDSTREAM: Moody's Affirms Ca CFR, Outlook Negative TOMMIE BROADWATER, JR: Datcher Buying DC Property for $420K TOUCHPOINT GROUP: Incurs $775K Net Loss in Third Quarter VENUS CONCEPT: Incurs $7.3 Million Net Loss in Third Quarter VERITAS FARMS: Incurs $1.58 Million Net Loss in Third Quarter VORNADO REALTY: S&P Rates New Perpetual Preferred Stock 'BB+' WADE PARK: U.S. Trustee Unable to Appoint Committee WESTERN MIDSTREAM: S&P Cuts ICR to 'BB'; Rating Off Watch Negative YOUFIT HEALTH: U.S. Trustee Appoints Creditors' Committee ********* 511 GROUP: U.S. Trustee Unable to Appoint Committee --------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of 511 Group LLC, according to court dockets. About 511 Group LLC 511 Group LLC, a Miami Beach, Fla.-based limited liability company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-21098) on Oct. 12, 2020. At the time of the filing, the Debtor had estimated assets of between $100,001 and $500,000 and liabilities of the same range. Joel M. Aresty P.A. is the Debtor's legal counsel. AGEMY FAMILY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Agemy Family Corporation d/b/a Quality Plus Dry Cleaners Agemy Family Dry Cleaners, LLC 9945 Race Track Road Tampa, FL 33626 Business Description: Agemy Family Corporation operates in the laundry facilities & dry cleaning services industry. Chapter 11 Petition Date: November 22, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-08608 Debtor's Counsel: David W. Steen, Esq. DAVID W. STEEN, P.A. PO Box 270394 Tampa, FL 33688-0394 Tel: (813) 251-3000 Email: dwsteen@dsteenpa.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Allie Hassan Agemy, president. 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/UD36LTI/Agemy_Family_Corporation_dba_Quality__flmbke-20-08608__0001.0.pdf?mcid=tGE4TAMA ALANI PROPERTY: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Alani Property Source Co., Inc. About Alani Property Source Co. Alani Property Source Co., Inc., a Georgia-based commercial real estate management company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-66885) on June 2, 2020. Judge Lisa Ritchey Craig oversees the case. The Debtor tapped the Law Office of Scott B. Riddle, LLC as its legal counsel. ALKERMES INC: Moody's Affirms Ba3 CFR, Outlook Stable ----------------------------------------------------- Moody's Investors Service affirmed the ratings of Alkermes, Inc., a subsidiary of Alkermes plc. The affirmed ratings include the Ba3 Corporate Family Rating, the Ba3-PD Probability of Default Rating, and the Ba3 senior secured term loan. There is no change to Alkermes' SGL-1 Speculative Grade Liquidity Rating. The outlook remains stable. The affirmation follows the FDA's issuance of a Complete Response Letter (CRL) regarding Alkermes' New Drug Application (NDA) for ALKS 3831, related to certain manufacturing conditions at its Ohio facility. The CRL did not identify or raise any concerns regarding the clinical or non-clinical data in the NDA and Moody's expects the drug to be approved after this problem is resolved. Ratings affirmed: Corporate Family Rating, at Ba3 Probability of Default Rating, at Ba3-PD Senior secured term loan due 2023, at Ba3 (LGD3) The outlook is stable. RATINGS RATIONALE Alkermes' Ba3 Corporate Family Rating reflects its expertise in drug delivery technology and its high gross margins. The rating also reflects the company's niche specialization in conditions of the central nervous system including schizophrenia and substance abuse disorders, which have high societal need. The company's growth prospects are good, driven by rising sales of Vivitrol and Aristada. In addition, growth will be driven by the anticipated launch of ALKS 3831, along with royalties from Biogen Inc.'s recently launched multiple sclerosis drug, Vumerity. The rating also reflects cash levels in excess of debt and the considerable value in Alkermes' existing revenue streams and its pipeline. Risk factors include limited profitability and cash flow until product sales and royalties substantially increase, pipeline execution risks, and revenue concentration in the schizophrenia category and in the US market. In addition, several products including Vivitrol face unresolved patent challenges from generic drug companies. ESG risks are material to Alkermes' credit profile. The company is subject to above-average regulatory risks given its concentration in the US market, where various legislative and regulatory proposals are aimed at drug pricing. These are driven by demographic and societal trends that contribute in escalating healthcare spending and proposals to reduce costs. The company's focus on products that treat schizophrenia and substance abuse disorders results in reliance on government payors including Medicaid, which increases Alkermes's exposure to these risks. Conversely, Alkermes' products treat conditions of high public health need including schizophrenia and opioid dependence. Among governance considerations, the company's financial policies are conservative, with very low debt levels relative to its equity value and strong liquidity. The SGL-1 rating reflects very good liquidity, based on high levels of cash and short-term investments, which totaled $569 on Sept. 30, 2020. This amount is well in excess of any cash needs like capital expenditures and working capital over the next 12 to 18 months. The outlook is stable, reflecting Moody's expectations for good top-line growth driven by Vivitrol and Aristada and the anticipated launch of ALKS 3831. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include strong growth in key products, launches of new drugs from the pipeline, consistently positive earnings and free cash flow, and debt/EBITDA sustained below 4.0 times. Factors that could lead to a downgrade include slow revenue growth due to competitive dynamics or pricing pressure, unexpected generic competition, material pipeline setbacks, incremental debt, or prolonged negative earnings and cash flow. Alkermes, Inc. is a US subsidiary of Dublin, Ireland-based Alkermes plc. Alkermes is a specialty biopharmaceutical company that develops long-acting medications for the treatment of the central nervous system. Revenues in 2019 totaled approximately $1.2 billion. The principal methodology used in these ratings was Pharmaceutical Industry published in June 2017. ALTERRA MOUNTAIN: Moody's Downgrades CFR to B2, Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded Alterra Mountain Company's Corporate Family Rating (CFR) to B2 from B1 and Probability of Default Rating (PDR) to B2-PD from B1-PD. Concurrently, Moody's downgraded the rating for Alterra's first lien revolver and term loan to B2 from B1. At the same time, Moody's assigned a B2 rating to the company's proposed incremental $250 million senior secured first lien term loan due 2026. Proceeds from the term loan will be used for general corporate purposes. The outlook is stable. The downgrade of CFR to B2 reflects Moody's expectation that Alterra's earnings will decline in fiscal year ending July 31, 2021 from already softer levels generated in FY 2020 and that leverage will remain elevated even with an expected recovery in FY 2022. The additional add-on term loan will increase debt-to-EBITDA leverage to slightly above 10x for FY2021 given the expected earnings decline. The upcoming 2020-2021 ski season will be challenging due to social distancing measures and capacity constraints as the result of the ongoing coronavirus pandemic. There is also the possibility of shutdowns in certain locations if the coronavirus situation continues to worsen this winter. Looking past FY 2021, Moody's expects debt-to-EBITDA leverage will decline to a 5.5x-6.5x range with the assumption that earnings will recover in FY 2022 to similar level as FY 2019 and the company will use excess balance sheet cash to repay most or all of the recently issued debt once economic uncertainty diminishes. With the additional $250 million add-on term loan on top of the $400 million term loan issued in June, Alterra's very good liquidity will be beneficial for the company to manage through the uncertain operating environment in FY2021 and this was an important factor in the stable outlook. Moody's took the following actions: Issuer: Alterra Mountain Company Downgrades: LT Corporate Family Rating, downgraded to B2 from B1 Probability of Default Rating, downgraded to B2-PD from B1-PD Senior Secured Bank Credit Facility, downgraded to B2 (LGD 3) from B1 (LGD4) Assignments: Proposed $250 million Senior Secured Term Loan, Assigned B2 (LGD3) Outlook Actions: Issuer: Alterra Mountain Company Outlook, Revised to Stable from Negative RATINGS RATIONALE Alterra's B2 CFR reflects its elevated financial leverage with pro forma Moody's adjusted debt/EBITDA rising to slightly above 10x by end of FY2021. Moody's expects the upcoming 2020-2021 ski season to remain challenging given the ongoing coronavirus pandemic and expect earnings to decline meaningfully vs FY2020. Moody's expects skier visits, effective ticket prices and ancillary revenue to be below normal levels given social distancing measures and capacity constraints. Earnings at CMH will also be down meaningfully because of Canadian border closure impacting travel. Looking past FY21 and over the next 18 months, Moody's projects leverage to decline to a 5.5x-6.5x range with earnings recovering in FY22 and on the assumption that the company will repay some or all of the recent incremental borrowings with excess cash. The rating reflects that Alterra's operating results are highly seasonal and exposed to varying weather conditions and discretionary consumer spending. Governance factors primarily relate to the company's aggressive acquisition strategy with acquisitions funded mainly with incremental debt. Environmental considerations in addition to exposure to adverse weather include the need to access large quantities of water, which may be challenging following periods of severe drought, and the vast amounts of forest land the company is responsible to properly operate and protect. However, the rating is supported by Alterra's strong position as one of the largest operators in the North American ski industry, operating 15 ski resorts in the US and Canada. Alterra benefits from its good geographic diversification, and high local skier customer mix given its mostly regional portfolio of ski properties. Moody's believes skier demand remains strong and that outdoor activities such as skiing will be popular in a social-distancing environment. Constraints on visitation due to ski lift and restaurant/lodge capacity constraints to ensure guest safety will be the primary factor reducing earnings in FY 2021, and Moody's expects visitation to improve as capacity constraints are eased given strong skier demand. The growing penetration of the Ikon Pass provides a stable revenue stream that helps mitigate weather exposure. The North American ski industry has high barriers to entry and has exhibited resiliency even during weak economic periods, including the 2007-2009 recession. The company's very good liquidity reflects its material cash balance of $820 million and access to an undrawn $450 million revolver facility due July 2022, pro forma for the $250 million add-on. Alterra also has flexibility to adjust capital spending to preserve cash if earnings are weak. These liquidity characteristics provide financial flexibility to fund operations for the upcoming 2020-2021 ski season even assuming a severe downside case with minimal revenue. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Its analysis has considered the effect on the performance of Alterra from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. More specifically, the weaknesses in Alterra's credit profile, including its exposure to mandated stay at home orders, increased social distancing measures and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the ongoing coronavirus pandemic and social distancing measures. The action reflects the impact on Alterra of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The stable outlook reflects Moody's expectation that leverage will decline to a 5.5x-6.5x by the end of FY22 (July 2022) with anticipated earnings recovery and some debt paydown using excess cash. The stable outlook also reflects the company's very good liquidity to fund its operations and required debt amortizations over the next year. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if operating performance improves, Alterra maintains solid reinvestment in its properties, Moody's adjusted debt-to-EBITDA is sustained below 5.0x, and the company maintains good liquidity. Ratings could be downgraded should operating performance is weaker than expected or fails to rebound as anticipated, or Moody's adjusted debt-to-EBITDA is sustained above 6.5x. Additionally, should liquidity weaken or more aggressive financial policies be employed, ratings could also come under downward pressure. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Denver, Colorado, Alterra Mountain Company is owned and controlled by an investor group comprised of private equity firm KSL Capital Partners and a minority position held by family office/investment firm Henry Crown & Company. Through its subsidiaries, Alterra is one of North America's premier mountain resort and adventure companies, operating 15 destinations in the US and Canada. The company also owns Canadian Mountain Holidays, a heli-skiing operator and aviation business. Alterra is private and does not publicly disclose its financials. During the twelve months ended July 31, 2020, the company generated revenue of over $1 billion. ANCHOR PACKAGING: Moody's Upgrades CFR to B2, Outlook Stable ------------------------------------------------------------ Moody's Investors Service upgraded the corporate family rating of Anchor Packaging, LLC to B2 from B3 and the probability of default rating to B2-PD from B3-PD. Moody's also affirmed the B2 rating on the first lien senior secured credit facilities. The company is in the process of raising a $155 million add-on senior secured first lien term loan. The proceeds of the add-on term loan will be used to repay a $95 million senior secured second lien term loan (unrated) and together with cash on hand to pay a $151 million distribution to shareholders. The outlook remains stable. "The upgrade reflects strong volume growth and improved credit metrics, which will remain supportive of the rating despite the proposed dividend distribution," said Anastasija Johnson, senior credit officer at Moody's. Upgrades: Issuer: Anchor Packaging, LLC Corporate Family Rating, Upgraded to B2 from B3 Probability of Default Rating, Upgraded to B2-PD from B3-PD Affirmations: Issuer: Anchor Packaging, LLC Gtd Senior Secured 1st lien Bank Credit Facility, Affirmed B2 (to LGD4 from LGD3) Outlook Actions: Issuer: Anchor Packaging, LLC Outlook, Remains Stable RATINGS RATIONALE Anchor Packaging, LLC's B2 Corporate Family Rating reflects the company's small scale relative to most rated plastic packaging peers, high leverage, private equity ownership and ongoing acquisition risk. The proposed add-on term loan issuance, repayment of the second lien term loan and a dividend distribution funded with cash and debt will result in an incremental $60 million increase in absolute debt levels. Pro forma for the proposed transaction, Moody's estimates debt/EBITDA including Moody's standard lease adjustments at 5.2x in the twelve months ended September 30, 2020, slightly higher than the reported 4.7x, but EBITDA/Interest coverage should improve to 3.8x from 3.3x due to the repayment of the second lien debt. The current transaction follows a debt-funded acquisition in July 2020. Anchor Packaging's absolute debt level will be $130 million higher than when Moody's first rated the company in July 2019, but earnings growth and free cash flow had exceeded its original expectations leading to an upgrade. Moody's expects growth in the company's specialized containers for hot food delivery, increase in food delivery in the wake of the coronavirus pandemic and regulatory-driven substitution out of polystyrene food containers to continue to support the company's volumes, earnings and free cash flow growth. However, given completed operational improvements in the legacy business to date, lower margins in the acquired business and some recent cost increases, Moody's does not expect significant further margin expansion and Moody's would also expect the company to increase capital expenditures to support its organic growth in future years. The company could also face competition in its specialized containers for hot food over time as it operates in a fragmented market with much larger competitors. In addition, volume growth in food delivery will likely subside over time with some resumption of in-person dining. Strengths in the credit profile include strong EBITDA margins (over 20%) and free cash flow generation, concentration in mostly stable food packaging and volume growth despite significant exposure to foodservice/restaurant segments. Roughly 86% of the company's sales are driven by rigid thermoformed packaging containers that have seen higher demand due to growth in food delivery and take out. The remaining sales are generated by flexible food wrap film, which was negatively impacted by the pandemic. The company generates over 50% of sales from packaging sold to foodservice/restaurants with focus on take-out containers for both hot and cold food, about 25% from packaging sold to groceries/convenience stores, 17% to distributors and the rest directly to CPGs and other customers. The credit profile is also supported by a fairly diverse customer base and ability to pass through resin costs on the majority of its business, although the company's margins and working capital could be temporarily impacted by rising raw material costs. Anchor Packaging's main raw materials are polypropylene (PP), PET and PVC resins. Approximately 60% of business is under contract with resin pass-throughs with approximately 60-day lags and has increased from 40% at the time of the initial rating as the company continues to focus on adding new business with automatic resin cost pass-throughs. As a plastic packaging manufacturer, Anchor Packaging has moderate environmental risks due to increasing regulatory and consumer concerns about plastic packaging, particularly single-use plastic packaging. Nevertheless, the company has benefited from bans on polystyrene containers in some municipalities because it manufactures substitute PP products. Moody's believes Anchor Packaging has established expertise in complying with environmental and business risks and has incorporated procedures to address them in their operational planning and business models, including using post-consumer recycled resin in its production process. Anchor Packaging has not disclosed any sizeable accrued environmental liabilities. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. In most jurisdictions, food packaging production was deemed an essential service, which allowed Anchor Packaging to continue to supply its customers. Governance risks are heightened given Anchor Packaging's majority private-equity ownership, which often entails a more aggressive financial policy, as evidenced by increases in absolute debt levels. Moody's expects Anchor Packaging, LLC to have good liquidity, supported by availability under its $60 million revolving facility due in 2024 and projected free cash flow generation. Pro forma for the dividend recapitalization, the company is expected to have $10 million of cash on hand and full availability under the revolver. Annual amortization payments are $5.4 million and the credit agreement includes a free cash flow sweep. The revolving credit facility includes a springing first lien net leverage ratio covenant of 8 times if availability is below 40% and there are no covenants on the term loan. The facilities are secured by substantially all assets of the borrower and guarantors. The company has a majority ownership in a film manufacturing facility in Argentina, which could be sold, but it only contributes 6% of sales and Moody's does not view it as a meaningful source of alternative liquidity. First lien credit facilities, including a $60 million five-year revolver, $475 million seven-year term loan and a $70 million delayed-draw term loan, are rated B2, in line with the B2 corporate family rating. The stable outlook reflects expectations of continued volume growth and strong free cash flow generation. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the relatively small size of the company as measured by revenue and concentrated product line (mostly PP containers for food packaging), there is limited upside to the rating at this time. Moody's could upgrade the rating if the company expands its scale and product offering, while maintaining strong EBITDA margins above 20% and improving credit metrics. Specifically, for the upgrade, debt/EBITDA should remain sustainably below 5x and EBITDA/Interest rising above 3.75x with free cash flow to debt approaching 5%. Moody's could downgrade the rating if volumes and operating performance decline with debt/EBITDA rising above 6 times, EBITDA/Interest declining below 3 times and free cash flow falling to low single digits. Headquartered in St. Louis, Missouri, Anchor Packaging, LLC is a manufacturer of polypropylene and PET containers for hot and cold food as well as flexible food wrap film. The company has 5 manufacturing facilities in the US and owns a 68% stake in a meat film manufacturing subsidiary, Packall, in Argentina. One of Anchor Packaging, LLC owners owns another 20% stake in Packall and the remaining 12% are held by outside interests. The Jordan Company acquired a controlling stake in Anchor Packaging in July 2019, and the minority stake is owned by privately-held Hermann Companies, Inc. The company generated sales of $415 million in the twelve months ended September 2020. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers Methodology published in September 2020. ASI CAPITAL: Gets OK to Hire Faegre Drinker as Special Counsel -------------------------------------------------------------- ASI Capital Income Fund, LLC and ASI Capital LLC received approval from the U.S. Bankruptcy Court for the District of Colorado to hire Faegre Drinker Biddle & Reath LLP as special counsel. Faegre Drinker will represent the Debtors in matters involving The Convergence Group under the direction from the Debtors' Equity Member's Conflicts Committee. The attorneys and paralegal who will be providing the services and their respective billing rates are: Bradford E. Dempsey Partner $615 per hour Kyle R. Hosmer Associate $530 per hour Susan M. Haag Senior Paralegal $325 per hour Faegre Drinker is a "disinterested person," as defined under Bankruptcy Code Section 101(14), according to court filings. The firm can be reached through: Bradford E. Dempsey, Esq. Faegre Drinker Biddle & Reath LLP 1144 15th Street, Suite 3400 Denver, CO 80202 Phone: 303-607-3500 Facsimile: 303-607-3600 Email: Brad.Dempsey@faegredrinker.com About ASI Capital ASI Capital Income Fund is an investment company as defined in 15 U.S.C. Section 80a-3. ASICIF holds interests in a number of investments, including interests in hotels. ASI Capital Income Fund and ASI Capital, LLC filed their voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankt. D. Colo. Lead Case No. 20-14066) on June 15, 2020. The petitions were signed by Ryan C. Dunham, chief exe3cutive officer of Convergence Group. At the time of filing, each Debtor estimated $10 million to $50 million in both assets and liabilities. John Cardinal Parks, Esq., at Lewis, Brisbois, Bisgaard & Smith LLP, is the Debtors' legal counsel. The Debtors tapped BKD, LLP to prepare their tax returns. AVON PRODUCTS: Moody's Upgrades Senior Unsecured Notes to B1 ------------------------------------------------------------ Moody's Investors Service upgraded the ratings of the senior unsecured notes issued by Avon Products, Inc. to B1 from B3 and withdrew the instruments' loss given default (LGD) assessment. Avon's B1 corporate family rating (CFR) remains unchanged. The outlook for all ratings is negative. The following rating actions were taken: Ratings Upgraded: Issuer: Avon Products, Inc. 5.000% Senior Unsecured Notes due 2023, Upgraded to B1 from B3, LGD-5 withdrawn 6.950% Senior Unsecured Notes due 2043, Upgraded to B1 from B3, LGD-5 withdrawn Ratings unchanged: Issuer: Avon Products, Inc. Corporate Family Rating, B1 Outlook: Outlook, negative Rating withdrawn: Issuer: Avon Products, Inc. Probability of Default Rating, previously rated B1-PD The outlook for all ratings is negative. RATINGS RATIONALE The upgrade of Avon's senior unsecured ratings to B1 from B3 follows the full redemption of the $900 million senior secured notes due 2022 issued by Avon's wholly-owned subsidiaries Avon International Operations, Inc. (AIO) and Avon International Capital PLC (AIC) concluded on November 2. As a result of the prepayment of the secured notes, Avon's capital structure currently has only one class of debt, being entirely composed of senior unsecured debt instruments -- namely intercompany loans and the senior unsecured notes due 2023 and 2043, which eliminates the previous effective subordination of the unsecured instruments relative to the senior secured notes and to Avon's corporate family rating. The prepayment of the secured notes was funded with proceeds from a $1 billion equity issuance made by Avon's parent, Natura & Co Holding S.A. (Natura). Natura transferred proceeds to Avon through a $960 million promissory note due November 2021, and therefore Avon's adjusted leverage after the prepayment of the secured notes remained unchanged at around 15.6x in the twelve months ended September 2020 (7.4x excluding intercompany loans). Nevertheless, the redemption of Avon's notes reduced Natura's total reported debt/EBITDA to 3.9x from 5.4x and its reported net leverage to 1.4x from 3.0x in the twelve months that ended September 2020, while improving its debt amortization schedule by eliminating a significant debt maturity in 2022. A healthier financial profile for Natura reduces execution and liquidity risks for Avon. Moody's incorporates some degree of financial support from Natura to Avon's credit profile given the company's relevance to the group and Natura's proven track record of financial discipline. Natura is committed to support Avon with liquidity in case of need, and has done so already by providing a $100 million revolving credit facility to Avon available until 2022 - of which $59 million remains undrawn - which reduces risks associated with cash burn at Avon. Although the notes prepayment did not improve Avon's credit metrics and debt amortization schedule, it showed Natura's commitment to Avon and marked another step in Natura's strategy to deleverage its capital structure after Avon's acquisition, while accelerating growth and integration with Avon. Avon's B1 ratings with a negative outlook reflect the execution risk stemming from its ongoing turnaround process. Its 2020 sales and earnings will be hurt by the coronavirus outbreak because social distancing measures have impaired the company's ability to recruit its sales force, as well as the ability of its representatives to meet customers and collect orders. Moody's forecasts that Avon's operating performance will recover in 2021, supported by the benefits from its integration with Natura. Moody's expects its leverage to return to below 5.5x in 2021, after peaking in 2020. However, the visibility into a recovery remains low. Avon's ratings incorporate some degree of support from its parent company, Natura, which has a stronger credit profile on a standalone basis. The ratings also reflect Avon's leading market position and good geographic diversification, although with a high concentration of operations in growing, but potentially volatile, developing markets. Moody's has decided to withdraw the probability of default rating for its own business reasons. RATING OUTLOOK The negative outlook reflects the high execution risks on Avon's turnaround process and the uncertainty on the future financial policy and capital structure of Avon. Failure to rapidly revert the decline in the number of representative and to stabilize sales could hamper the company's ability to reduce the current high leverage, leading to downward pressure on the rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive pressure on the ratings could develop in case of 1) evidence of stronger support from Natura, such as the provision of an explicit guarantee on Avon's debt or if Avon's debt is refinanced at the parent company level; 2) successful execution of Avon's turnaround initiatives leading to material operating performance improvement, with EBIT margin approaching 10%; 3) Moody's-adjusted gross Debt/EBITDA improving to below 4.5x on a sustained basis; 4) materially positive free cash flow on a sustained basis. The ratings could be lowered in case of 1) failure to restore operating performance, with stabilization of sales and recovery in operating margin; 2) Moody's-adjusted gross Debt/EBITDA remaining above 5.5x on a sustained basis; 3) Natura adopting financial policies that are detrimental to Avon's creditors, such as large cash upstreaming. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. Avon is a global beauty product company and one of the largest direct sellers with around five million active representatives. Avon's products are available in over 70 countries and are categorized as color cosmetics, skin care, fragrance, fashion and home. Following the completion of the acquisition in January 2020, Avon is now a fully owned subsidiary of Natura. Avon generated about $3.8 billion in revenue and $124 million in EBITDA (Moody's-adjusted) in the twelve months ended September 2020. Natura & Co is the fourth largest pure cosmetics group globally, with presence across 100 countries and in the skincare, haircare, body care, men care, fragrancies, color, fashion and home segments. The company has a leading market position in several markets, with a particular focus on emerging markets such as Brazil, other Latin American countries and Russia, and operates through a multi-channel strategy through its four brands Avon, Natura, The Body Shop and Aesop. In the twelve months ended September 2020, Natura & Co reported $7.2 billion in revenues and EBITDA margin of 9.5%. BAUSCH HEALTH: Fitch Assigns B Rating on Senior Unsecured Notes --------------------------------------------------------------- Fitch Ratings has assigned a 'B/RR4' rating to Bausch Health Companies Inc.'s senior unsecured notes offering. The net proceeds from the issuance will be used to refinance the company's existing euro-denominated unsecured notes due 2023. The ratings apply to approximately $24.6 billion of debt outstanding at Sept. 30, 2020. The Rating Outlook is Stable. KEY RATING DRIVERS Coronavirus Headwinds: The coronavirus pandemic has adversely affected Bausch's operating performance during 2020. The company's Ortho Dermatologics, Dentistry and Global Surgical businesses, which account for roughly 13% of revenues have been hit the hardest. The operating stress will likely cause gross leverage (total debt/EBITDA) to remain above the 7.0 times (x) level during the near term, which Fitch views to be consistent with the 'B' issuer default rating (IDR). However, Fitch expects that BHC will continue to generate significantly positive FCF and maintain adequate liquidity. Operations should improve in 2021 to pre-coronavirus pandemic levels helping to reduce leverage to below 7.0x. Bausch Spinoff Strategically Constructive: Fitch views Bausch's eye care business planned spinoff as strategically sound, given limited synergies between the branded pharma business and eye care. The proposed transaction's effect on Bausch's credit profile will largely depend on the capital structure and financial strategy post spin. The company is working toward a post-spin leverage profile of the eye care business and the legacy business of roughly 4.0x and 5.5x, respectively. Even though Bausch's business risk profile will be negatively affected by less diversification, greater focus on innovative pharma should improve the company's R&D pipeline's probability of success. The Bausch + Lomb, which consists mostly of eye care, generated $3.7 billion or 43% of Bausch's $8.6 billion of revenue in 2019. The company intends to focus on expanding its leadership in its gastroenterology, aesthetics/dermatology, neurology and international business. Good Progress in Business Turn-around: Bausch Health's 'B' issuer default rating (IDR) reflects progress in stabilizing operations and reducing debt since mid-2016 through the first two months of 2020. Throughout the business turn-around, BHC consistently generated strong FCF relative to the 'B' category rating, pushed its nearest large debt maturity out until 2023, and loosened restrictive secured debt covenants through refinancing transactions. The company's stronger operating profile and consistent cash generation should enable it to further reduce leverage in the near term once the headwinds caused by the pandemic have abated. High Leverage: The negative impact of the coronavirus pandemic has stressed leverage (total debt/EBITDA) during 2020, but Fitch expects the company to reduce leverage to 7.0 times or below in 2021, and even further during the intermediate term. Bausch has made good progress in reducing the absolute level of debt outstanding by approximately $6.2 billion since March 31, 2016 with a combination of internally generated cash flow and proceeds from asset divestitures. Intermediate-Term Growth Potential: Bausch Health operates with a reasonably diverse business model relative to its products, customers and geographies served. Many of the company's businesses comprise defensible product portfolios, which are capable of generating durable margins and cash flows. Post the spinoff of the eye health business, Fitch believes that the expected long-term growth of the gastrointestinal (GI/Salix) businesses support the company's operating prospects. Fitch also expects that the dermatology business will grow in 2021 as BHC successfully commercializes recently launched products. Reliance on New Products: The stabilization of Bausch Health's operating profile has involved an increased focus on developing an internal research and development pipeline, which Fitch believes is constructive for the company's credit profile over the long term. This strategy is not without risk since Bausch Health needs to ramp up the utilization of recently approved products through successful commercialization efforts. These products include Siliq (for the treatment of moderate-to-severe plaque psoriasis, although with safety restrictions), Bryhali (plaque psoriasis), Lumify (red eye) and Vyzulta (glaucoma). The recent approval of Duobrii or IDP-118 (plaque psoriasis) should also help to strengthen the company's dermatology business. In addition, the company recently launched Infuse, its daily silicon hydrogel contact lenses. Near-Term Maturities Manageable: Bausch Health consistently generates significant positive FCF (LTM FCF margin of 8.0%), and the current refinancing will satisfy debt maturities until 2023. Annual amortization requirements on the term loans of about $263 million annually start in 2023. The company has adequate access the credit markets providing the flexibility to further refinance upcoming maturities. Bausch Health Companies Inc.: 4; Exposure to Social Impacts: 4 Bausch Health Companies Inc. has an ESG Relevance Score of 4 for Exposure to Social Impacts due to pressure to contain healthcare spending growth; highly sensitive political environment, and social pressure to contain costs or restrict pricing which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). DERIVATION SUMMARY Bausch Health, rated 'B'/Stable, is significantly larger and more diversified than specialty pharmaceutical industry peers Mallinckrodt plc ('d*') and Endo International plc ('ccc+*'/Outlook Negative). While all three manufacture and market specialty pharmaceuticals and have maturing pharmaceutical products, Bausch Health's Bausch + Lomb (B+L) business meaningfully decreases business concentration risk relative to Mallinckrodt and Endo. B+L offers operational diversification in terms of geographies and payers. Many of its products are purchased directly by customers without the requirement of a prescription. Bausch Health's rating also reflects gross debt leverage that is higher than peers. But unlike its peers, BHC does not face contingent liabilities related to the opioid epidemic. Bausch accumulated a significant amount of debt through numerous acquisitions. In addition, Bausch Health had a number of missteps in the integration process and other operational issues. Management has been focusing on reducing leverage by applying operating cash flow and divestiture proceeds to debt reduction and returning the business to organic growth through internal product development efforts. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - High single-digit to low double-digit percentage revenue contraction in 2020 due to effects of the coronavirus pandemic on operations and returning to growth over 2019 levels in 2021. Fitch expects particular weakness in Global Surgical, Medical Dermatology and Dentistry in 2020; - EBITDA of $3 billion-$3.2 billion in 2020 and increasing thereafter, driven by a return to a more normalized healthcare operating environment, revenue growth, improved sales mix and cost control; - Negative FCF in 2020 due to the $1.38 billion litigation payment and then normalized to at least $1.3 billion of FCF generated annually; - Continued debt reduction utilizing FCF; - Leverage declining to below 7.0x by the end of 2021. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An expectation of gross debt leverage (total debt/EBITDA) durably below 6.0x; -- Bausch Health continues to maintain a stable operating profile and refrains from pursuing large, leveraging transactions including acquisitions; -- Forecasted FCF remains significantly positive; Factors that could, individually or collectively, lead to negative rating action/downgrade: - Gross debt leverage (total debt/EBITDA) durably above 7.0x; - FCF significantly and durably deteriorates; - Refinancing risk increases and the prospect for meaningful leverage reduction weakens. LIQUIDITY AND DEBT STRUCTURE Bausch Health had adequate near-term liquidity at Sept. 30, 2020, including restricted and unrestricted cash on hand of $1.99 billion. The company will use $1.21 billion of the cash to fund pending settlement of the U.S. Securities litigation due in 2020. The company had full availability (excluding letters of credit) under its $1.225 billion revolving credit facility that matures in 2023. The company's most recent refinancing activities have satisfied debt maturities through 2022. Bausch Health consistently generated significantly positive FCF during 2015-2019, despite facing serious operating challenges. Fitch expects the company to maintain adequate headroom under the debt agreement financial maintenance covenants during the 2020-2023 forecast period. Recovery Assumptions The recovery analysis assumes that Bausch Health would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch estimates a going concern enterprise value (EV) of $19.7 billion for Bausch Health and assumes that administrative claims consume 10% of this value in the recovery analysis. The going concern EV is based upon estimates of post-reorganization EBITDA and the assignment of an EBITDA multiple. Fitch's estimate of Bausch Health's going concern EBITDA of $2.63 billion is 25% lower than the LTM 2019 EBITDA, reflecting a scenario where the recent stabilization in the base business is reversed, and the company is not successful in commercializing the R&D pipeline. Fitch assumes Bausch Health will receive a going concern recovery multiple of 7.5x EBITDA. This is slightly higher than the 6.0x-7.0x Fitch typically assigns to specialty pharmaceutical manufacturers, representing Bausch + Lomb's relatively more durable consumer products focus and the company's larger scale and broader product portfolio than peers. The current average forward public market trading multiple of Bausch Health and the company's closet peers is 9.9x. Fitch applies a waterfall analysis to the going concern EV based on the relative claims of the debt in the capital structure, and assumes that the company would fully draw the revolvers in a bankruptcy scenario. The senior secured credit facility, including the term loans and revolver, and senior secured notes ($10.1 billion in the aggregate), have outstanding recovery prospects in a reorganization scenario and are rated 'BB/RR1', three notches above the IDR. The senior unsecured notes ($15.65 billion in the aggregate) have an average recovery and are rated 'B/RR4'. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Bausch Health Companies Inc.: Exposure to Social Impacts: 4 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. BAUSCH HEALTH: Moody's Assigns B3 Rating to New Sr. Unsec. Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the new senior unsecured note offering of Bausch Health Companies Inc. There are no changes to Bausch Health's other ratings including the B2 Corporate Family Rating, the B2-PD Probability of Default Rating, the Ba2 senior secured rating, the B3 senior unsecured rating and the SGL-1 Speculative Grade Liquidity Rating. The outlook remains unchanged at stable. Proceeds of the new senior unsecured notes are intended for the redemption of existing senior notes due in 2023 in a leverage neutral refinancing transaction. The refinancing is credit positive in that it will extend Bausch's debt maturity profile. Rating assigned: Issuer: Bausch Health Companies Inc. Senior unsecured notes, Assigned B3 (LGD5) RATINGS RATIONALE Bausch Health's B2 Corporate Family Rating reflects its high financial leverage with gross debt/EBITDA above 7.0x. Factors inhibiting deleveraging include recent debt incurrence to fund a $1.2 billion legal settlement, and earnings pressure related to the ongoing coronavirus pandemic. However, demand for Bausch Health's products will substantially return once the pandemic ebbs, supported by good progress in an ongoing turnaround prior to the outbreak. In addition, deleveraging will resume consistent with a commitment to debt reduction. The credit profile is supported by good scale with over $8 billion of global revenue, solid product diversity and good free cash flow. The company is evaluating the potential spinoff of its global eyecare business. Such a transaction would increase business risks of the remaining company, including outstanding legal investigations and an unresolved patent challenge on Xifaxan -- the company's largest product. However, the spinoff would also likely result in significant deleveraging based on management's debt/EBITDA target of 5.5x for the remaining entity. ESG considerations are material to the rating. Moody's regards the coronavirus pandemic as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. Beyond the coronavirus outbreak, Bausch Health faces a variety of unresolved legal issues, and the potential for large cash outflows to resolve the matters cannot be ruled out. Other investigations into pharmaceutical companies' practices have taken several years to resolve, and have sometimes resulted in large payments to the US government. The matters that Moody's believes create the most uncertainty relate to the company's former relationship with the specialty pharmaceutical distributor Philidor and those related to pharmaceutical pricing and the patient assistance programs. Other social risks include exposure to regulatory and legislative efforts aimed at reducing drug pricing. However, Bausch Health's product and geographic diversification help mitigate some of that exposure. Approximately 60% of Bausch Health's revenue is derived from medical devices, over-the-counter products, and branded generic products which haven't been a significant focus for pricing legislation. Bausch Health has also pledged to keep average annual price increases for their branded prescription products in the single digits. Among governance considerations, management has had a consistent debt reduction philosophy ever since its troubles involving Philidor escalated. In addition, management has built a steady track record of generating positive organic growth. The stable outlook reflects Moody's expectation that coronavirus-related earnings pressure will subside, resulting in debt/EBITDA declining below 7.5x in 2021. The stable outlook also reflects Moody's view that if the eyecare business is spun off, a weaker business profile will be mitigated by lower leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include improvement in earnings growth, successful commercial uptake of new products, and significant resolution of outstanding legal matters. Quantitatively, sustaining debt/EBITDA below 6.5 times with CFO/debt approaching 10% could support an upgrade, but a spinoff of the eyecare business would result in different thresholds due to reduced scale and diversity. Factors that could lead to a downgrade include significant reductions in pricing or utilization trends of key products, large litigation-related cash outflows, an adverse outcome in the Xifaxan patent challenge, or debt/EBITDA sustained above 7.5 times. Bausch Health Companies Inc. is a global company that develops, manufactures and markets a range of pharmaceutical, medical device and over-the-counter products. These are primarily in the therapeutic areas of eye health, gastroenterology and dermatology. Revenues for the 12 months ended Sept. 30, 2020 totaled approximately $8 billion. The principal methodology used in these ratings was Pharmaceutical Industry published in June 2017. CATALENT PHARMA: Moody's Upgrades CFR to Ba3, Outlook Stable ------------------------------------------------------------ Moody's Investors Service upgraded the ratings of Catalent Pharma Solutions, Inc. including the Corporate Family Rating to Ba3 from B1 and Probability of Default Rating (PDR) to Ba3-PD from B1-PD. Moody's also upgraded the rating on the senior secured credit facilities to Ba1 from Ba2 and the rating on the senior unsecured notes to B1 from B3. There is no change to the Speculative Grade Liquidity Rating at SGL-1, signifying very good liquidity. The outlook is stable. The upgrade of the CFR reflects Catalent's improved business profile mainly driven by greater scale and better diversification. This follows a multi-year acquisition strategy that has resulted in a strong market position in the growing biologics business. The upgrade is also supported by an improvement in profitability and a reduction in leverage driven by earnings growth, with adjusted debt/EBITDA of 4.3x for the twelve months ended Sept. 30, 2020 (vs. 5.2x LTM Sept. 30, 2019). The upgrade is further supported by the company's recently stated public net debt/EBITDA target of 3.0x (as per the company's calculation) and a track record of issuing equity in order to balance shareholder and creditor interests. The Ba1 rating on the senior secured debt instruments is one notch lower than the rating indicated from the Loss Given Default model given Moody's view that Catalent's capital structure will continue to evolve and the company is likely to issue incremental secured debt in the future. The following rating actions were taken Upgrades: Issuer: Catalent Pharma Solutions, Inc. Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Senior Secured Term Loan B2, Upgraded to Ba1 (LGD2) from Ba2 (LGD2) Senior Secured Revolving Credit Facility, Upgraded to Ba1 (LGD2) from Ba2 (LGD2) Senior Unsecured Regular Bond/Debenture, Upgraded to B1 (LGD5) from B3 (LGD5) Outlook Actions: Issuer: Catalent Pharma Solutions, Inc. Outlook, Remains Stable RATINGS RATIONALE Catalent's Ba3 Corporate Family Rating is supported by its track record of delivering strong revenue and earnings growth. It also reflects its good size and scale, breadth of service and strong reputation as one of the largest contract development and manufacturing organizations (CDMOs) globally. The company also maintains a diversified customer base and commands a large library of patents, know-how, and other intellectual property that raise barriers to entry and enhance margins. Strong demand for its services including in oncology and rare diseases, increased outsourcing among its pharma clients and rapid growth in biologics support Moody's expectation for at least high-single-digit earnings growth over the next several years. Near term, the COVID-19 pandemic has presented opportunities to Catalent; the company is involved in over 50 programs to develop treatments and vaccines, including with AstraZeneca and Moderna. Catalent is meeting growing demand for its services by expanding capacity. This is supported by a significant increase in capex and an active M&A policy geared towards building positions in the nascent cell and gene therapy industry. However, this strategy will weigh on free cash flow, which Moody's expects will be minimal over the next 12-18 months. Further, Moody's expects Catalent to remain acquisitive which could lead to temporary increase in leverage. The rating also reflects the risks inherent in the contract manufacturing industry, which is highly competitive, and has high reliance on the pharmaceutical industry. The stable outlook reflects Moody's expectation that leverage will improve over the next 12 to 18 months, and that adjusted debt/EBITDA will generally be maintained in the 3.5x to 4.0x range. The Speculative Grade Liquidity Rating of SGL-1 reflects Moody's expectation that Catalent's liquidity will remain very good over the next 12 to 18 months. Catalent's liquidity will be supported by a strong cash balance ($1.0 billion as of Sept. 30, 2020) and access to a substantially undrawn $550 million revolving credit facility that expires in May 2024. Social and governance considerations are material to Catalent's credit profile. Like other providers of services for the pharmaceutical industry, Catalent faces - albeit indirectly - rising exposure to regulatory and legislative efforts aimed at reducing healthcare costs and in particular drug prices and reimbursement rates. These are fueled in part by demographic and societal trends that are pressuring government budgets because of rising healthcare spending. Turning to governance, Catalent has pursued a financial policy and capital allocation policies that balances both creditor and shareholder interests since its IPO in 2014. While it has increased debt to fund acquisitions, it has also issued equity to repay debt, which is credit positive. For example, Catalent issued equity to repay debt in 2018 several months after the Cook acquisition, and more recently funded the acquisition of MaSTherCell through equity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Catalent reduces financial leverage such that its debt to EBITDA is sustained below 3.5 times. Successful integration of acquisitions and organic growth that results in increased scale and improved business line diversity, would also support an upgrade. Improved free cash flow would also support a higher rating. The ratings could be downgraded if Moody's expects Catalent's financial leverage to be sustained above 4.5 times. The ratings could also be downgraded if Catalent's earnings deteriorate, or if the current elevated capex strategy fails to generate very strong organic revenue growth. The ratings could be downgraded if the company adopts a more aggressive acquisition or shareholder strategy. Catalent Pharma Solutions, Inc. is a leading contract development and manufacturing organization (CDMO) company and a global provider of advanced delivery technologies and development and manufacturing solutions for drugs; protein, cell, and gene therapy biologics; and consumer health products. These include the company's formulation, development and manufacturing of softgels and other products for the prescription drug and consumer health industries. The company reported revenue of approximately $3.3 billion for the twelve months ended Sept. 30, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CLEVELAND-CLIFFS INC: Moody's Downgrades CFR to B2, Outlook Stable ------------------------------------------------------------------ Moody's Investors Service downgraded Cleveland-Cliffs Inc.'s Corporate Family Rating and Probability of Default Rating to B2 from B1 and B2-PD from B1-PD respectively. The guaranteed senior secured note ratings were downgraded to B2 from Ba3, the guaranteed senior unsecured notes were downgraded to B3 from B2 and the senior unsecured notes were downgraded to Caa1 from B3. The Speculative Grade Liquidity Rating is unchanged at SGL-2. The outlook is stable. This concludes the review for downgrade initiated on Sept. 28, 2020. "The downgrade of the CFR to B2 incorporates the weaker than expected debt protection metrics in 2021 and only slow improvement in 2022 as a result not only of increased debt levels from the acquisition of AK Steel but also the pending acquisition of ArcelorMittal USA LLC (ArcelorMittal US), the continued uncertainty of sustainability of improving conditions in the US steel industry and the fragile nature of the economic recovery conditions," said Carol Cowan, Moody's Senior Vice President and lead analyst for Cliffs. "Additionally, the downgrade considers the execution risk associated with two major business transforming acquisitions within a short time period amidst difficult industry and economic conditions" Cowan added. Downgrades: Issuer: Cleveland-Cliffs Inc. Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD Gtd. Senior Secured Regular Bond/Debenture, Downgraded to B2 (LGD3) from Ba3 (LGD3) Gtd. Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD5) from B2 (LGD4) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD6) from B3 (LGD5) Outlook Actions: Issuer: Cleveland-Cliffs Inc. Outlook, Changed to Stable from Rating Under Review RATINGS RATIONALE As anticipated, Cliffs will evidence very weak performance in 2020 given the normal seasonal impact on its iron ore sales and earnings in the first quarter and the impact of the automotive production shutdown from approximately mid-March through mid-May on the acquired AK Steel business (acquisition closed March 13, 2020), given the contracted sales position of AK Steel to the automotive industry (approximately 73% of revenue in the third quarter of 2020). While EBITDA turned sharply positive in the third quarter to roughly $148 million (Moody's adjusted basis) and based upon current momentum in the automotive industry and improvement in other industries, the fourth quarter is expected to evidence further modest strengthening, overall performance will result in the need for a significant turnaround in 2021 and 2022 requiring a material and sustainable improvement in steel industry fundamental as well as the need to reduce steel production costs and achieve anticipated synergies. Debt protection metrics (on a Moody's adjusted basis for pensions and leases) are expected to remain elevated in 2021, with debt/EBITDA of approximately 7.7x, assuming $950 million in EBITDA; this is expected to reduce to around 5.7x in 2022 on further recovery in industry conditions, although still elevated for a B2 CFR. Cliffs liquidity profile and manageable debt maturity profile in 2021 and 2022 support the rating. The B2 CFR considers Cliffs position, post the acquisition of ArcelorMittal US for approximately $1.4 billion (funded by mostly equity and preferred stock to ArcelorMittal, but including a draw under the ABL and the adoption of additional pension liabilities), as the largest US flat-rolled integrated steel producer in the US. Pro forma for the pending acquisition flat-rolled steel production will approximate 17 million tons. Cliffs will also benefit from having Electric Arc Furnace (EAF) capacity once the acquisition closes. The transaction enhances Cliffs position as an integrated steel producer from necessary raw material inputs through the steelmaking and steel finishing process. With the start-up of the HBI facility, expected by the end of 2020, Cliffs will also benefit from the optionality of selling this product either to third party EAF producers, given freight cost savings relative to the purchase of imported pig iron, or to its own mills. Overall, consolidated Cliffs is expected to benefit from an improved cost position and the company expects $150 million in synergy savings by the end of 2021, although this has been discounted in its analysis until demonstrated. The contract position of Cliffs', particularly to the automotive industry, provides for a good earnings base. Although performance won't benefit as much from a high steel price environment due to the nature of the contracts and contract renegotiation periods, it also provides downside mitigants in a falling steel price environment. Cliffs' performance will also benefit, over time and in an improved economic environment, from the higher percentage of value-added steel product sales with 57% coated, 16% cold-rolled and 13% electrical steels mix in the third quarter. The stable outlook reflects Cliffs enhanced footprint in the overall US steel industry, and the consolidation and improved discipline that is expected from its recent steel company acquisitions despite the ongoing uncertainty with respect to the coronavirus and new outbreaks. Also considered in the outlook is the company's focus on maintaining sufficient liquidity to support its operations. Reflected in the outlook are the integration risks associated with two major acquisitions in essentially a one-year period and the need to achieve cost savings and improved EBITDA/ton. Cliffs' SGL-2 Speculative Grade Liquidity rating reflects the company's good liquidity position, which is supported by a $2 billion asset-based lending facility (ABL) and a modest cash position. On Sept. 30, 2020, the full facility was not available due to borrowing base limitations, with $1.7 billion available on a borrowing basis, and $1.1 billion available after considering outstanding borrowings and Letters of Credit. With the anticipated drawdown as part of the acquisition of ArcelorMittal US, and other seasonal and working capital requirements, availability is expected to tighten. The company has reached an agreement with its lending group to exercise the $400 million accordion feature of the facility, prior to the close of the acquisition of ArcelorMittal US. The company is in the process of upsizing the ABL to reflect the inclusion of additional receivable and inventory collateral post the closing of the acquisition, which will enhance the borrowing base. Liquidity is viewed as comfortably covering requirements over the next 12 months including the $505 million cash component of the acquisition and the repayment in 2021 and 2022 of the stub debts outstanding on the AK Steel debt. The B2 rating on the guaranteed senior secured notes reflects their position in the capital structure relative to the sizeable ABL, which has better collateral coverage. The senior guaranteed unsecured (B3) notes have a slightly less favorable position to the guaranteed senior notes but shill benefit from a more favorable position relative to the senior unsecured notes whose Caa1 rating reflects their junior position in the capital structure. The mining industry faces numerous environmental risks across the totality of a company's operations. Companies in the US are subject to numerous regulations, which are likely to become increasingly complex and stringent. Changes in regulations can increase costs, extend project timelines, and add uncertainty to the level of reserves that can be economically mined. All operations, including changes to existing operations require numerous permits and licenses. The risks flow through the entire process from extracting the ore, processing the ore into metal, transporting the mineral or metal and the end use (e.g. -- iron ore for the production of steel). The steel industry also faces numerous environmental risks, the most critical being carbon transition risk. AK Steel and companies who produce steel using the blast furnace process (use primarily coal and iron ore to produce steel) have higher greenhouse gas emissions and face greater challenges than producers who use the electric arc furnace (EAF) production method, which has a greater percentage of scrap (recycled steel) in the raw material mix. AK Steel's third-generation Advanced High- Strength Steel product development provides ability to mitigate against this market erosion and contribute to a reduction in greenhouse gas emissions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade to the CFR would require the company to demonstrate the ability to sustain leverage, as measured by the debt/EBITDA ratio of no more than 5x through various price points, (CFO-dividends)/Debt of at least 12.5% and maintain good liquidity. The CFR could be downgraded should leverage remain elevated at or above 5.5x, beyond the expected time horizon of 2022, (CFO-dividends)/debt be 10% or less and liquidity tighten. The rating could also be downgraded should automotive production again have to be curtailed. Cliffs metrics are expected to be below the downgrade triggers through 2021 but maintenance of a good liquidity position would support. Headquartered in Cleveland, Ohio, Cleveland-Cliffs is the largest iron ore producer in North America with approximately 21.2 million equity tons of annual capacity and with the acquisition of AK Steel a mid-tier integrated steel producer. For the twelve months ended Sept. 30, 2020 Cliffs had revenues of $3.6 billion. The principal methodology used in these ratings was Steel Industry published in September 2017. CNO FINANCIAL: Fitch Assigns BB Rating to $150MM Subordinated Debt ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB' rating to CNO Financial Group, Inc's issuance of up to $150 million in subordinated debentures due 2060. The existing ratings for CNO and its insurance operating subsidiaries are not affected by the rating action, and the Rating Outlook remains Stable. KEY RATING DRIVERS The subordinated debentures rank junior to CNO's existing senior unsecured notes. The company may elect to redeem the debentures beginning in 2025. Under certain limited circumstances, CNO may redeem the debentures earlier than 2025. It may defer interest payments during one or more deferral periods for up to five consecutive years. The rating assigned to the subordinated debentures is three notches below the current 'BBB' Issuer Default Rating of CNO, reflecting two notches for a baseline recovery assumption of 'poor' and one notch for a non-performance risk assessment of 'minimal.' For notching purposes, the regulatory environment of the U.S. is assessed by Fitch as being Effective and classified as following a ring-fencing approach. The notch for minimal non-performance risk is Fitch's baseline in ring-fencing environments. Proceeds from this note issuance will be used for general corporate purposes. As of Sept. 30, 2020, CNO's financial leverage ratio was approximately 23%. Inclusive of this recent issuance, Fitch does not expect the company's financial leverage or coverage metrics to materially deteriorate. On a pro forma basis, Fitch expects financial leverage to be approximately 26%, which is within Fitch's stated rating sensitivities. Fitch expects deterioration in CNO's capital metrics and financial performance due to the coronavirus, including increased credit defaults and ratings migration on the investment portfolio over the near term. However, Fitch's current expectation is that the impact of the coronavirus, while material, is manageable for CNO due to the company's strong capital position. Longer-term, concerns around a potentially lower-for-longer interest rate scenario will negatively affect CNO and peers in terms of pressure on capital and earnings. RATING SENSITIVITIES The ratings remain sensitive to any material change in Fitch's Rating Case assumptions with respect the coronavirus pandemic. Periodic updates to its assumptions are possible given the rapid pace of changes in government actions in response to the pandemic and the pace with which new information is available on the medical aspects of the outbreak. Factors that could, individually or collectively, lead to positive rating action/upgrade: These factors remain predicated upon Fitch's ability to reliably forecast the impact of the coronavirus pandemic on the financial profile of the North American life insurance sectors and CNO, including: -- Profitable, balanced growth across the company's core product offering, augmenting CNO's operating scale and competitive position; -- Maintenance of conservative risk postures associated with new product development and sales initiatives; -- Sustainable financial performance metrics without the presence of one-time accounting charges, consistently reporting a GAAP ROE in excess of 10%; -- Prism capital model assessment approaching the 'Very Strong' threshold with an RBC ratio consistently in excess of 400%; -- Financial leverage consistently below 25% with fixed-charge coverage in excess of 10x. Factors that could, individually or collectively, lead to negative rating action/downgrade include: -- A material adverse change in Fitch's Rating Assumptions with respect to the impact of the coronavirus pandemic; -- Shift in business profile that would lead to a departure from the company's risk postures, expanding into more price sensitive product offerings or new market segments outside of its stated risk tolerances; -- Deterioration in financial performance metrics, resulting in a GAAP ROE below 5%; -- Combined RBC ratio consistently below 325% and a Prism capital model assessment of 'Adequate' threshold; -- Financial leverage consistently above 30% with fixed-charge coverage below 5x; -- Deterioration in investment portfolio quality, leading to increased reporting of credit-related impairments. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. CNO FINANCIAL: Moody's Assigns Ba1(hyb) Rating on $150MM Sub. Debt ------------------------------------------------------------------ Moody's Investors Service assigned a Ba1(hyb) debt rating to the anticipated $150 million of subordinated debentures to be issued by CNO Financial Group, Inc. (CNO, senior debt at Baa3, stable outlook). The notes will be drawn under an existing shelf registration maturing in 2060. The net proceeds of the issuance will be used for general corporate purposes. The outlook on CNO and its insurance subsidiaries remains stable. RATINGS RATIONALE The Baa3 senior unsecured debt rating on CNO and the A3 insurance financial strength (IFS) ratings of its insurance company subsidiaries are based on the CNO's improved financial profile through consistent earnings (both statutory and GAAP), sustained capital adequacy in its three core operating companies, as well as a solid investment portfolio. The ratings also reflect the company's lower risk profile by improving capital adequacy in a severe stress scenario, the lower company tail risk given the capital-intensive nature of the group's LTC business, multiple distribution channels, and lower risk product offering. These strengths are mitigated by the challenges that the company faces in growing its market presence, increasing profitability, developing its distribution systems, managing its retained shorter duration long-term care (LTC) business and interest-sensitive liabilities, as well as balancing capital growth and policyholder needs with shareholder-friendly activities. The Ba1(hyb) rating on the subordinated debentures reflects Moody's typical notching for instruments issued by insurers relative to their IFS and senior debt ratings. Because of equity-like features contained in the subordinated debentures, the security will receive partial equity treatment in Moody's leverage calculation and adjusted financial leverage will improve as a result of the transaction. Moody's believes that the coronavirus-driven economic downturn and ultra-low interest rates will stress most aspects of life insurers' financials, including those of CNO. This includes sales, investment income, reserves and capital adequacy. Most life insurers, including CNO, start with healthy capital and asset quality to weather this storm over the near term, but these conditions will weaken their creditworthiness if they persist. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The following factors could lead to an upgrade of the ratings: 1) Steady profitability with a return on capital of at least 8% on a consistent basis excluding one-time items; 2) Consistent earnings coverage of 6x; 3) Sustained combined NAIC RBC ratio (Company Action Level, without diversification benefit) of at least 400%; 4) Profitable sales growth and well balanced between life insurance and annuities; and 5) Increased market share in life insurance and annuity businesses, without increasing the risk profile of the liabilities Conversely, the following factors could lead to a downgrade of the ratings: 1) Return on Capital of less than 4%; 2) Adjusted financial leverage consistently over 30%; 3) Earnings coverage of less than 4x; and 4) Combined NAIC RBC ratio (Company Action Level, without diversification benefit) of less than 350%. AFFECTED RATINGS The following rating was assigned: CNO Financial Group, Inc.: subordinated debentures, assigned Ba1(hyb) The outlook on CNO and its affiliates remains stable. The principal methodology used in this rating was Life Insurers Methodology published in November 2019. CONCRETE PUMPING: Moody's Affirms B2 CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service affirmed Concrete Pumping Holdings, Inc.'s ratings, including the B2 Corporate Family Rating, B2-PD Probability of Default Rating (PDR), and the B2 rating on the company's senior secured term loan. Moody's has also assigned an SGL-3 Speculative Grade Liquidity Rating (SGL). The outlook remains stable. Affirmations: Issuer: Concrete Pumping Holdings, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Gtd. Senior Secured Term Loan, Affirmed B2 (LGD4) Assignments: Issuer: Concrete Pumping Holdings, Inc. Speculative Grade Liquidity Rating, Assigned SGL-3 Outlook Actions: Issuer: Concrete Pumping Holdings, Inc. Outlook, Remains Stable RATINGS RATIONALE CPH's B2 Corporate Family Rating reflects the company's robust EBITDA margin, service capability, geographic footprint, variable cost structure, limited working capital requirements, and free cash generation. While the company employs a growth through acquisition strategy, in addition to growing organically, management is focused on maintaining a strong balance sheet and directing free cash to debt reduction given the opportunity. Moody's is forecasting free cash flow and adjusted debt to EBITDA for 2021 and 2022 of $40 million and 3.7x and $43 million and 3.2x, respectively. The rating also reflects CPH's small scale, although the company is larger than its competitors in the fragmented concrete pumping industry. In addition, CPH serves cyclical end markets in the residential and non-residential construction space, which can result in volatile operating results. The stable outlook reflects Moody's expectation of steady growth in revenue and earnings, in conjunction with, prudent balance sheet management and adequate liquidity. The SGL-3 Speculative Grade Liquidity rating reflects Moody's expectation that the company will maintain adequate liquidity. Moody's expects that CPH will continue to rely on its revolver, but maintain an average of 40% availability over the next twelve months. The company had $4 million of cash on hand on July 31, 2020 and approximately $40 million of availability under its ABL facility (unrated), which expires in December 2023. The company's ABL facility is governed by a springing fixed charge ratio covenant that is triggered if (i) an Event of Default has occurred, or (ii) minimum excess availability is below the greater of 10% of the ABL Line cap (lesser of Borrowing Base or ABL commitment), $5 million, or 12.5% of the UK borrowing base. Moody's expects CPH to remain in compliance over the next 12- 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if debt-to-EBITDA is maintained below 3.5x and EBITA-to-interest expense above 3.0x on a sustained basis. Moody's could also upgrade the ratings with an increase in the company's scale. Moody's could downgrade the ratings if debt-to-EBITDA rises above 4.5x and EBITA-to-interest expense falls below 1.0x for a sustained period of time, or if there is a deterioration in the company's liquidity profile. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Concrete Pumping Holdings, Inc. is a leading provider of concrete pumping services and concrete environmental waste management solutions in the United States and the United Kingdom. In the United States, the company operates across approximately 90 locations in 22 states in the Pacific, Rocky Mountain, Central, South Central, and Southeastern regions. CPH also operates a concrete pumping business in the United Kingdom through approximately 30 branch locations. Eco-Pan, a subsidiary of CPH, operates a route-based business model in the US providing custom metal pans and containers to construction sites in which waste concrete is placed, picked up, and disposed of at concrete recycling centers. Revenue was $309 million for the twelve months ended July 31, 2020. COSTA HOLLYWOOD: Trustee Hires Nelson Mullins as Legal Counsel -------------------------------------------------------------- Maria Yip, the official administering the Costa Hollywood Property Owners, LLC Liquidating Trust, received approval from the U.S. Bankruptcy Court for the Southern District of Florida to retain Nelson Mullins Broad and Cassel as her legal counsel. The firm will assist the liquidating trustee in carrying out her duties under the trust agreement and the Debtor's Chapter 11 plan of liquidation, which was confirmed on Aug. 25, 2020. Nelson Mullins will charge for its services in accordance with its ordinary and customary rates in effect at the time the services are rendered. Michael Lessne, Esq., a partner at Nelson Mullins, disclosed in court filings that he and his firm neither hold nor represent any interest adverse to the Debtor's bankruptcy estate. The firm can be reached at: Michael D. Lessne, Esq. Nelson Mullins Broad and Cassel 100 S.E. 3rd Avenue, Suite 2700 Ft. Lauderdale, FL 33394 Phone: 954-764-7060 Email: michael.lessne@nelsonmullins.com About Costa Hollywood Property Owner Costa Hollywood Property Owner, LLC is a privately held company in the traveler accommodation industry. It owns and operates Costa Hollywood Beach Resort, a resort hotel in Hollywood Beach, Fla. Costa Hollywood Beach Resort offers rooms and suites featuring an elevated design aesthetic and luxe decor. Visit https://www.costahollywoodresort.com for more information. Costa Hollywood sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-22483) on Sept. 19,2019. In the petition signed by Moses Bensusan, manager and sole member, the Debtor disclosed assets of between $50 million and $100 million and liabilities of the same range. Judge A. Jay Cristol is the case judge. Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., is the Debtor's bankruptcy counsel. The bankruptcy court confirmed the Debtor's Chapter 11 plan of liquidation on Aug. 25, 2020. Maria M. Yip is the official appointed to administer the Costa Hollywood Property Owners, LLC Liquidating Trust. Nelson Mullins Broad and Cassel and Yip Associates serve as the liquidating trustee's legal counsel and financial advisor, respectively. DESTINATION HOPE: Sets Bid Procedures for Substantially All Assets ------------------------------------------------------------------ Destination Hope, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida to authorize the bidding procedures in connection with the auction sale of substantially all assets. The Assets are listed and described as follows: a. The real property leasehold interests as to the Debtor's two locations: 6460 NW 5th Way, Fort Lauderdale, FL, 33309 and 8301 W. McNab Road, Tamarac, FL, 33321. b. The personal property located at the Ft. Lauderdale Location and the Tamarac Location, as listed in Schedule A/B of the Debtor’s bankruptcy schedules, except for the Excluded Assets, including but not limited to: Security deposits; 4 Ford vans; Accounts receivable; Licenses, permits, and accreditations; Trademarks and service marks; Goodwill; URLs and websites; and Unexpired leases and executory contracts as listed in Schedule 2.1(B) of the attached APA. As of the filing date of the chapter 11 proceeding, the Debtor has the following indebtedness, in addition to general unsecured claims: (i) G Credit Partners, Inc. - $1,798,228 (Secured); (ii) Newtek Small Business Finance, LLC - $2,891,177 (Secured); and c. Internal Revenue Service - $1,083,502 (Priority). The Debtor intends to sell the Assets pursuant to an Asset Purchase Agreement, to be entered into between the Debtor and the Successful Bidder. To date, the Debtor, and particularly the CRO, has been involved in extensive marketing efforts, and those efforts are continuing. In the Debtor's business judgment, the proposed Sale is in the best interest of all creditors and the Estate as a whole. By consolidating with another behavioral health center, the sum will be greater than the parts, as the Debtor will be more valuable due to greater efficiencies and economies of scale. As collectability of medical receivables, particularly in the behavioral health field, is notoriously difficult, by merging with another provider/operator, the Debtor will be able to realize greater net revenue, and it should translate into a higher realized value than what the Debtor is currently encountering. Saddled with a large amount of debt (approximately $13 million of which approximately $5 million is secured and $1 million is priority) coupled with low collections percentage rates may lead to a lower recovery for creditors, assuming that the contemplated Sale leads to a robust bidding process. In order to ensure the highest possible recovery for the Debtor’s estate, the Debtor proposes a competitive Auction of the Assets, as contemplated in the Bidding Procedures. The salient terms of the Bidding Procedures are: a. Bid Deadline: Dec. 4, 2020 b. Initial Bid: An amount equal to or greater than the sum of (i) $100,000 more than the Stalking Horse Bid plus (ii) the Breakup Fee c. Deposit: 10% of the bid price but not less than $250,000 d. Auction: The Debtor proposes to sell the Assets at an auction to take place on Dec. 10, 2020 or as otherwise determined by the Court. e. Bid Increments: $100,000 f. Sale Hearing: Dec. 10, 2020 g. Sale Objection Deadline: h. Closing: Dec. 21, 2020 i. Break-up Fee: 2% of the Stalking Horse Bid, plus reimbursement of expenses not to exceed $25,000 j. The Assets will be transferred on an "as is" and "where is" basis. k. The sale will be free and clear of all liens, claims and encumbrances, and any valid liens will attach to the net sale proceeds. l. The Debtor will notify all Qualified Bidders, no later than 5:00 p.m. (ET) three days before the Auction that they may participate in the Auction. SG Credit and Newtek will each be deemed to be a Qualified Bidder pursuant to their credit bid rights. As of the filing of the Motion, which was due to be filed no later than Oct. 20, 2020 pursuant to Court order, the Debtor has not designated a Stalking Horse Bidder. In addition, given the Debtor's and the Bidders' interest in proceeding expeditiously, the Debtor asks that the Court waives the 14-day stay of the effectiveness of the Sale Approval Order consistent with Rule 6004(h) of the Federal Rules of Bankruptcy Procedure. A copy of the Bidding Procedures and the form of the APA is available at https://tinyurl.com/y5z7cznl from PacerMonitor.com free of charge. About Destination Hope Inc. Based in Fort Lauderdale, Fla., Destination Hope, Inc., offers comprehensive drug rehab and mental health programs, with a special focus on dual diagnosis while providing clients with the knowledge and tools to overcome their addiction. Visit https://destinationhope.com/ for more information. Destination Hope sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-19402) on Aug. 28, 2020. The petition was signed by Benjamin Brafman, the company's president. At the time of the filing, Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $10 million and $50 million. Judge Peter D. Russin oversees the case. Wernick Law, PLLC is the Debtor's legal counsel. DYCOM INDUSTRIES: S&P Ups Unsecured Convertible Note Rating to 'BB' ------------------------------------------------------------------- S&P Global Ratings raised its rating on Palm Beach Gardens, Fla.-based Dycom Industries Inc.'s senior unsecured convertible notes due 2021 to 'BB' from 'BB-'. The '3' recovery rating indicates its expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a payment default. S&P expect Dycoms to benefit from solid demand and believe its debt to EBITDA will remain below 3x in fiscal 2021. The company's cash flows have experienced material volatility, although S&P assumes company's free operating cash flow will remain positive in fiscal 2021. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- Given Dycom's position as a specialty engineering and construction contractor competing in the cyclical telecommunications end market, S&P's distressed scenario envisions a period of delays and outright cancellations of cable- and telecom-related capital spending programs, with Dycom's key customers reducing their capital expenditure budgets in line with the broader industry. -- S&P's analysis further assumes the revolver is 85% drawn at default. -- S&P has valued the company on a going-concern basis using a 5x multiple of its projected emergence EBITDA, which is in line with the multiples it uses for its engineering and construction peers. -- Although S&P's estimate recovery for Dycom's convertible notes would indicate a higher recovery rating, the rating agency has capped the recovery rating at '3' (50%-70%) because it caps its recovery ratings on unsecured debt of issuers in the 'BB' category at '3'. This cap addresses that these creditors' recovery prospects are at greater risk of being impaired by the issuance of additional priority or pari passu debt prior to default. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $222 million -- EBITDA multiple: 5x Simplified waterfall -- Net enterprise value (after 5% administrative costs): $1.06 billion -- Senior secured claims: $926 million -- Total value available to unsecured convertible noteholders: $132 million -- Senior convertible unsecured notes: $59 million -- Recovery expectations: 50%-70% (rounded estimate: 65%) Note: All debt amounts include six months of prepetition interest. Ratings List Dycom Industries Inc. Issuer Credit Rating BB/Stable/-- BB/Stable/-- Ratings Raised; Recovery Ratings Revised To From Dycom Industries Inc. Senior Unsecured BB BB- Recovery Rating 3(65%) 5(20%) EAGLE PIPE: Proposed Auction of Substantially All Assets Approved ----------------------------------------------------------------- Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas has entered an amended order authorizing the bidding procedures proposed by Eagle Pipe, LLC in connection with the sale of substantially all of assets to Marco International Corp., subject to overbid. The Court granted the Bid Procedures Motion, except that it is modified by the Order to provide clarity around the Debtor's ability to market and sell its disputed interest in certain pipe that is claimed to be owned or previously sold by Boomerang Tube, LLC and/or Centric Pipe, LLC, and in which the Administrative Agent claims a security interest. Within three business days after entry of the Order, the Debtor will serve the Bid Package upon the Bid Notice Parties. The Sale Notice will include and prominently display the Disputed Asset Notice. On Nov. 4, 2020, the Debtor will file with the Court the Potential Assumed Contracts. Concurrently therewith, the Debtor will serve the Cure Notice upon each counterparty to the Potential Assumed Contracts. Prior to the commencement of the Sale Hearing and no later than Nov. 24, 2020, the Debtor will file with the Court the Assumed Contract Schedule of the Assumed Contracts. The Cure Amount Objection Deadline is 4:00 p.m. (CT) on Nov. 18, 2020. Any other objections to the Cure Notice or proposed assumption and assignment of Potential Assumed Contract will be filed no later than 4:00 p.m. (CT) on Nov. 27, 2020. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 16, 2020 at 4:00 p.m. (CT) b. Initial Bid: At the Auction, to the extent a Stalking Horse Bidder has been named, the initial overbid must exceed such Stalking Horse Bid by the amount of the Break-Up Fee plus an additional $100,000. c. Deposit: 10% of the aggregate value of the cash and non-cash consideration of the bid d. Auction: If the Debtor receives more than one Qualified Bid, an auction will be conducted, upon notice to all Qualified Bidders who have submitted Qualified Bids, at 10:00 a.m. (CT) on Nov. 20, 2020, virtually and/or at the offices of Gray Reed, 1300 Post Oak Boulevard, Suite 2000, Houston, Texas 77056, in accordance with the terms of the Bidding Procedures. e. Bid Increments: $100,000 f. Sale Hearing: Nov. 30, 2020 at 9:00 a.m. (CT) g. Sale Objection Deadline: Nov. 18, 2020 at 4:00 p.m. (CT) h. Closing: Dec. 11, 2020 i. Any Proposed Sale(s) entered into with the Debtor will be on an "as is, where is" basis and without representations or warranties of any kind, nature, or description, free and clear of all Claims and Interests, with such Claims and Interests attaching to the net proceeds of the sale. j. Break-Up Fee: $200,000 The Court has sustained, in part, the Stalking Horse Objection. There will be no adjustment to the Purchase Price, under Section 3.4(d) of the APA or otherwise, based on any Accounts owed by Marco or any of its affiliates. Marco is approved as the Stalking Horse Bidder. The Court further approved a Break-Up Fee for actual out-of-pocket expenses incurred by Marco, not to exceed $289,134, which is 2.5% of the Purchase Price set forth in Schedule 3.1 of the APA. For the avoidance of doubt, no Break-Up Fee will be payable to Marco in the event that the Administrative Agent is deemed the Successful Bidder as a result of a Credit Bid. The Court ordered mediation among the Debtor, the Secured Parties, the Committee, Boomerang and Centric (the “Mediation Parties”) pursuant to Section R of the Procedures for Complex Cases in the Southern District of Texas regarding the nature and ownership of the Disputed Assets as well as any claims or causes of action arising out of such disputes. The Mediation Parties will appear in good faith efforts to mediate on Nov. 13, 2020, subject to availability of the Mediation Parties and the mediator. Prior to the mediation, the Debtor, the Secured Parties and Boomerang will endeavor in good faith to enter into a settlement concerning the ownership of the Disputed Assets within five business days after entry of the order. If such a settlement is reached within the period of time, the Debtor, the Secured Parties and Boomerang contemplate that, subject to the Boomerang Asset Determination in the Rule 9019 settlement order, the Boomerang Disputed Assets will be removed from the Bidding Procedures process and not offered for sale under the Bidding Procedures. If such settlement is reached among the Debtor, Boomerang and the Secured Parties, Boomerang will be excused from mediation. All time periods set forth in the Order or the Bid Procedures will be calculated in accordance with Bankruptcy Rule 9006(a). A copy of the Bidding Procedures is available at https://tinyurl.com/y3cjlxyx from PacerMonitor.com free of charge. About Eagle Pipe LLC Eagle Pipe, LLC is a full-service distribution company supplying tubular products and a wide variety of equipment and services to the upstream, midstream, municipal and industrial industries. It distributes a full-range of OCTG, line pipe, poly pipe (HDPE), concrete pipe, PVC pipe, valves and fittings, and offers associated products and services. For more information, visit https://www.eaglepipe.net/ Eagle Pipe sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 20-34879) on Oct. 5, 2020. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Marvin Isgur oversees the case. Gray Reed & McGraw, LLP and Glassratner Advisory & Capital Group, LLC serve as the Debtor's legal counsel and financial advisor, respectively. EDELMAN FINANCIAL: S&P Affirms 'B' ICR, Alters Outlook to Stable ---------------------------------------------------------------- S&P Global Ratings said it affirmed its 'B' issuer credit rating on Edelman Financial Engines Center LLC. S&P revised the outlook to stable from negative, reflecting its expectation that leverage will remain comfortably below 8.0x over the next 12 months. At the same time, S&P affirmed its 'B' rating on the firm's first-lien term loan and 'CCC+' rating on its second-lien term loan. The recovery rating of the first-lien term loan remains '3', indicating a meaningful (55%) recovery in the event of default; the recovery rating on the second-lien term loan remains '6', indicating a negligible (0%) recovery. Edelman has reduced its debt to adjusted EBITDA significantly after issuing $1.875 billion in 2018 to fund the acquisition of Financial Engines. S&P expects leverage of 5.5x-6.5x in 2020, and for leverage to continue to decline over the next 12 months, supported by continued strong assets under management (AUM) and earnings growth, a reduction in expenses following the completion of the Financial Engines integration in 2020, and the company making mandatory amortization payments on its first-lien term loan. The company had $231 billion AUM as of Sept. 30, 2020, up 8.5% year-over-year. S&P said, "While the AUM base is somewhat vulnerable to market volatility, we think the company's relationship-driven business model and the tax-advantaged nature of retirement savings accounts makes for a stickier AUM base than peers. We expect net flows in the retail financial planning segment to remain positive in 2020 and potentially improve over 2019 despite continued planner departures and slowed new client inflows as the company adjusts to virtual meetings and marketing due to COVID-19. Despite a sharp uptick in voluntary cancellations at the height of the market volatility, we expect net flows to be positive for full-year 2020 in the workplace segment, as well. Assuming continued net inflows and steady markets, we forecast modest AUM and revenue growth in 2020. We anticipate higher margins than in 2019 due to reduced live events and travel expenses, as well as lower integration costs. We also expect margins to remain strong over the next 12 months considering integration-related expenses are largely completed as of Sept. 30, 2020." "We do not assume any further debt issuance. However, if the company issues further debt (to fund further acquisitions or distributions to the financial sponsor, Hellman & Friedman) such that leverage rises to near 8.0x, we could lower our ratings." "The stable outlook reflects our expectation that leverage will remain 5.0x-8.0x over the next 12 months." "We could lower the ratings if leverage increases to near 8.0x due to weakening earnings or rising debt; or if its business materially weakens as shown by sustained net outflows or an increase in planner departures or sponsor cancellations." "We could raise the rating if leverage declines sustainably below 5.0x." FLORIDA TILT: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Florida Tilt Inc., according to court dockets. About Florida Tilt Inc. Florida Tilt, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20779) on Oct. 1, 2020, listing under $1 million in both assets and liabilities. Judge Robert A. Mark oversees the case. Ariel Sagre, Esq., at Sagre Law Firm, P.A., serves as the Debtor's legal counsel. FRANCHISE GROUP: Moody's Withdraws Ratings to $650MM Sec. Notes --------------------------------------------------------------- Moody's Investors Service has withdrawn Franchise Group, Inc.'s ratings, including its B1 corporate family rating, B1-PD probability of default rating, SGL-2 speculative grade liquidity rating, and B1 rating to its previously proposed $650 million senior secured notes. The stable outlook was also withdrawn. Withdrawals: Issuer: Franchise Group, Inc. Probability of Default Rating, Withdrawn, previously rated B1-PD Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 Corporate Family Rating, Withdrawn, previously rated B1 Senior Secured Regular Bond/Debenture, Withdrawn, previously rated B1 (LGD3) Outlook Actions: Issuer: Franchise Group, Inc. Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Franchise Group announced on November 4, 2020 [1] that it decided not to proceed with its previously announced offering of $650 million of senior secured notes due 2025 due to unfavorable market conditions. Moody's has withdrawn Franchise Group's ratings because the obligation is no longer outstanding. Franchise Group, Inc. (NASDAQ: FRG), through its subsidiaries, operates franchised and franchisable businesses including Liberty Tax Service (tax-preparation services), American Freight (value furniture and appliance retailer), Buddy's Home Furnishings (rent-to-own retailer) and The Vitamin Shoppe (specialty health supplement retailer). On a combined basis, Franchise Group currently operates over 4,000 locations predominantly located in the US and Canada that are either Company-run or operated pursuant to franchising agreements. Pro-forma revenue exceeds $2.0 billion. FURNITURE FACTORY: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed a committee to represent unsecured creditors in the Chapter 11 cases of Furniture Factory Ultimate Holding, L.P. and its affiliates. The committee members are: 1. Carpenter Co. Attn: David Sayre 5016 Monument Ave. Richmond, VA 23230 Phone: (804) 301-0592 Fax: (804) 257-5482 Email: david.sayre@carpenter.com 2. Elements International Group, LLC Attn: Richard Frankl 2250 Skyline Dr. Mesquite, TX 75149 Phone: (469) 627-7823 Email: rfrankl@elementsgrp.com 3. Austin Group Furniture, LLC Attn: Steven Lim 441 N. Chimney Rock Rd. Greensboro, NC 27410 Phone: (336) 285-0199 Email: steven.austingroup@gmail.com 4. CV Owasso LLC Attn: Greg Harmon 1200 Waterfall View Mesquite, NV 89034 Phone: (415) 717-4140 Email: gharmon@gte.net 5. Gregory Realty, GP Attn: Hulet T. Gregory P.O. Box 382366 Germantown, TN 38183 Phone: (901) 260-3122 Fax: (901) 260-3133 Email: hulet@memphiscashflow.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Furniture Factory Outlet Furniture Factory Outlet, LLC retails furniture and accessories Products and serves customers in the United States. It was founded in 1984 in Muldrow, Okla., around an original concept of providing quality furniture at highly competitive prices with its "lowest price every day" guarantee. Furniture Factory and its affiliates, including Furniture Factory Outlet, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12816) on Nov. 5, 2020. Furniture Factory was estimated to have $10 million to $50 million in assets and liabilities. The Hon. John T. Dorsey is the case judge. The Debtors tapped Klehr Harrison Harvey Branzburg LLP as legal counsel, Focalpoint Securities LLC as investment banker, and RAS Management Advisors LLC as restructuring advisor. Stretto is the claims agent. GARRETT MOTION: U.S. Trustee Appoints Equity Committee ------------------------------------------------------ The U.S. Trustee for Region 2 appointed a committee to represent equity security holders in the Chapter 11 cases of Garrett Motion Inc. and its affiliates. The committee members are: 1. Gem Partners LP 92 Chester Place Englewood, New Jersey 07631 Attention: Daniel Lewis, Managing Member Email: dlewis@gemasset.com Telephone: (201) 500-4095 2. S. Muoio & Company LLC 509 Madison Avenue, Suite 406 New York, New York 10022 Attention: Salvatore Muoio, Managing Member Email: smuoio@sminvestors.com Telephone: (212) 297-2555 3. Mountaineer Master Fund, Ltd. c/o Mountaineer Partners Management, LLC 150 East 58th Street, 14th Floor New York, New York 10155 Attention: Gregory S. Williams, Partner Email: gwilliams@mountaineerpartners.com Telephone: (646) 459-7064 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Garrett Motion Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs, manufactures and sells highly engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers and the global vehicle and independent aftermarket. Garrett Motion and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020. Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in liabilities as of June 30, 2020. The Debtors have tapped Sullivan & Cromwell LLP as counsel, Quinn Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg Partners and Morgan Stanley & Co. LLC as investment bankers, and AlixPartners LP as restructuring advisor. Kurtzman Carson Consultants LLC is the claims agent. On Oct. 5, 2020, the U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in the Debtors' Chapter 11 cases. White & Case LLP and Conway MacKenzie, LLC serve as the committee's legal counsel and financial advisor, respectively. GARRETT MOTION: Wuxi Best Out of Creditors' Committee ----------------------------------------------------- The U.S. Trustee for Region 2 disclosed in a notice filed with the U.S. Bankruptcy Court for the Southern District of New York that these creditors are the remaining members of the official committee of unsecured creditors in the Chapter 11 cases of Garrett Motion Inc. and its affiliates: 1. Trustee of the Garrett Motion Ireland Defined Benefit Plan Care of: Ray Clarke, Aon Building 5200 Cork Airport Business Park Cork, T12 FDN3 Ireland Attention: Michael Morrissey Email: michael.morrissey@garrettmotion.com Telephone: +353 51 301 367 2. Pierburg GMBH 975 S. Opdyke Road â€“ Suite 100 Auburn Hills, MI 48326 Attention: Christina I. Nassar, General Counsel Email: christina.nassar@rheinmetall-americas.com Telephone: (947) 252-4083 Wuxi Best Precision Machinery Co.'s name did not appear in the notice. The company was appointed as committee member on Oct. 5, court filings show. About Garrett Motion Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs, manufactures and sells highly engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers and the global vehicle and independent aftermarket. Garrett Motion and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020. Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in liabilities as of June 30, 2020. The Debtors have tapped Sullivan & Cromwell LLP as counsel, Quinn Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg Partners and Morgan Stanley & Co. LLC as investment bankers, and AlixPartners LP as restructuring advisor. Kurtzman Carson Consultants LLC is the claims agent. On Oct. 5, 2020, the U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in the Debtors' Chapter 11 cases. White & Case LLP and Conway MacKenzie, LLC serve as the committee's legal counsel and financial advisor, respectively. GUITAR CENTER: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Guitar Center, Inc. 5795 Lindero Canyon Road Westlake Village, CA 91362 Business Description: The Debtors, known for their iconic Hollywood, California, Guitar Center music store and their family of brands, Guitar Center, Music & Arts, Musician's Friend, and Woodwind and Brasswind, are retailers of musical instruments and related products and services. Chapter 11 Petition Date: November 21, 2020 Court: United States Bankruptcy Court Eastern District of Virginia Eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Guitar Center, Inc. (Lead Debtor) 20-34656 Guitar Center Holdings, Inc. 20-34657 Guitar Center Stores, Inc. 20-34658 GTRC Services, Inc. 20-34659 GC Business Solutions, Inc. 20-34660 Guitar Center Gift Card Company, LLC 20-34655 Music & Arts Instructor Services, LLC 20-34661 AVDG, LLC 20-34662 Judge: Hon. Kevin R. Huennekens Debtors' General Bankruptcy Counsel: Dennis F. Dunne, Esq. Andrew M. Leblanc, Esq. Michael W. Price, Esq. Lauren C. Doyle, Esq. MILBANK LLP 55 Hudson Yards New York, New York 10001 Tel: (212) 530-5000 Fax: (212) 530-5219 Email: ddunne@milbank.com aleblanc@milbank.com mprice@milbank.com ldoyle@milbank.com - and - Thomas R. Kreller, Esq. MILBANK LLP 2029 Century Park East 33rd Floor Los Angeles, California 90067 Tel: (424) 386-4000 Fax: (213) 629-5063 Email: tkreller@milbank.com Debtors' Local Bankruptcy Counsel: Tyler P. Brown, Esq. Justin F. Paget, Esq. Jennifer E. Wuebker, Esq. HUNTON ANDREWS KURTH LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, Virginia 23219 Tel: (804) 788-8200 Fax: (804) 788-8218 Email: tpbrown@HuntonAK.com jpaget@HuntonAK.com jwuebker@Hunton.com Debtors' Restructuring Advisor: HOULIHAN LOKEY, INC. Debtors' Operational & Financial Advisor: BERKELEY RESEARCH GROUP, LLC Debtors' Notice & Claims Agent: PRIME CLERK LLC https://cases.primeclerk.com/guitarcenter Debtors' Sole and Exclusive Lead Underwriter, Placement Agent or Initial Purchaser and Bookrunner: UBS SECURITIES LLC Debtors' Compensation Consultant and Advisor: LYONS, BENENSON & COMPANY INC. Estimated Assets (on a consolidated basis): $1 billion to $10 billion Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petitions were signed by Tim Martin, executive vice president and chief financial officer. A copy of Guitar Center, Inc.'s petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/3RRBAUI/Guitar_Center_Inc__vaebke-20-34656__0001.0.pdf?mcid=tGE4TAMA Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Wilmington Savings Fund Note Payable $379,306,000 Society FSB Patrick J. Healy 3028887420 500 Delaware Wilmington, DE 19801 Patrick Healy: PHealy@wsfsbank.com Jose Verdejo: JVerdejo@wsfsbank.com Geoffrey Lewis: GLewis@wsfsbank.com Andrew Silverstein: silversteina@sewkis.com John Ashmead: ashmead@sewkis.com 2. Yamaha Music Corporation Merchandise $13,098,680 Tom Sumner Email: tsumner@yamaha.com 7142353270 PO Box 100348 Pasadena, CA 91189-0348 3. Fender Corp Merchandise $10,683,035 Tammy VanDonk Email: tvandonk@fender.com 4804311118 P.O. Box 743545 Los Angeles, CA 90074-3545 4. Ningbo Tonwel Audio Merchandise $6,671,432 Equipments Co. Ltd Yan Jun Email: yanjun@tonwel.com 8613906686923 No. 60 Renming Midroad Jiangshan Town Ningbo, CHN 315191 5. The Bank Of New York Note Payable $5,782,000 Mellon Trust Company, N.A. Raymond Torres Tel: (213) 630-6175 Email: Raymond.Torres@bnymellon.com 2 N. Lasalle Street Suite 700 Chicago, IL 60602 David Kerr: david.m.kerr@bnymellon.com Larry Kusch: lawrence.kusch@bnymellon.com Liz Taraila: ETaraila@EMMETMARVIN.COM Edward Zujkowski: EZUJKOWSKI@EMMETMARVIN.COM 6. Gibson Guitar Corp Merchandise $5,044,945 Tom Gordon Email: tgordon@gibson.com 8059075895 P.O. Box 936739 Atlanta, GA 31193-6739 7. Reliance Musical Ltd Merchandise $4,534,067 Jerry Chen Email: JerryChen@reliancemusical.com 886227368151 P.O. Box 96-140, Taipei 106-3rd FL NO. 175 SEC. 2, AN HO Rd. Taiwan, TW 8. Nektar Technology Inc. Merchandise $3,745,180 Zhao Ping Email: zhaopingringway@gmail.com 8188243388 655 N. Central Ave, 17th Floor Glendale, CA 91203 9. Alphatheta Music Americas Inc. Merchandise $2,841,982 Matt Pekmezian Email: matthew.pekmezian@pioneerdj.com 7148518093 2050 W 190th St #109 Torrance, CA 90504 10. Roland Corp US Merchandise $2,655,000 Tony Price Email: tony.price@roland.com 4803133781 Attn: Accounts Receivable P.O. Box 512959 Los Angeles, CA 90051-0959 11. Cf Martin & Co Merchandise $2,564,249 Mitchell Nollman Email: mnollman@martinguitar.com 5089512780 436 Sharon DR Rochester, NY 14626-1951 12. Bosch Security Systems Inc. Merchandise $2,409,104 Tom Hansen Email: Thomas.Hansen@us.bosch.com 9528875567 33902 Treasury Center Chicago, IL 60694-3900 13. Inmusic Brands Inc Merchandise $2,407,387 Pat Sullivan Email: pat@inmusicbrands.com 4016583131 P.O. Box 414040 Boston, MA 02241-4040 14. Google Inc. Marketing $2,065,834 Brian Crocker Email: bcrocker@google.com 3104604086 5626 Ponderosa Dr Columbus, OH 43231-3151 15. Taylor Guitars Marchandise $2,023,377 Keith Brawley Email: keith.brawley@taylorguitars.com 6197298370 P.O. Box 848999 Los Angeles, CA 90084-8999 16. Ernie Ball Merchandise $1,740,066 Brian Ball Email: brian@ernieball.com 7604490928 P.O. Box 877 Coachella, CA 92236 17. Khs America Merchandise $1,699,734 Jerry Goldenson Email: jerry.goldenson@khsmusic.com 6155061730 12020 Eastgate Blvd MT Juliet, TN 37122 18. Marigold Enterprises Ltd Merchandise $1,598,642 Florance Chan Email: FLORENCE@MARIGOLD.COM.HK 85292888393 Room 713-4, Tower A, Hung Hom Comm. CTR. 39 Ma Tau Wai Rd Hung Hom, -- Hongkong 19. Korg Usa Merchandise $1,534,703 Joe Castronovo Email: joec@korgusa.com 5162339716 PO Box 9675 Uniondale, NY 11555-9675 20. Dunlop Manufacturing Merchandise $1,463,913 Jimi Dunlop Email: reachjimi@me.com 7073309463 Attn: Acct. Rec. PO Box 846 Benicia, CA 94510 21. Shure Incorporated Merchandise $1,376,117 Abby Kaplan Email: Kaplan_Abby@shure.com 8475337621 P.O. Box 99265 Chicago, IL 60693 22. Drum Workshop Inc Merchandise $1,350,145 Jim DeStefano Email: jimd@dwdrums.com 8056510099 Attn: Accounts Receivable 3450 Luna Ct. Oxnard, CA 93030 23. D'Addario & Company Inc Merchandise $1,329,411 John D'Addario Email: jd3@daddario.com 5162366372 P.O. Box 27910 New York NY 10087-7910 24. Jbl Professional Merchandise $1,133,617 Mike Schoen Email: Mike.Schoen@harman.com 8188953350 PO Box 4438 Church Street Station New York, NY 10261-4438 25. S&H - Hzsamko Merchandise $1,108,568 Technologies Co Ltd Steve Shi Email: hzsamko@gmail.com NO. 8 Jiaqi Road Xianlin Town Yuhang District Hangzhou, CHN 31112 26. Dragon Audio Merchandise $1,056,732 Industrial Limited Ricardo Gong Email: riccardogong@yahoo.com 6F, Building 6th, Hongfa Hi-Tech Industrial Park NO.1152 Nanhuan Avenue, Guangming District Shenzhen CHN 518132 27. Schecter Guitar Research Merchandise $1,033,379 Michael Ciravolo Email: michael@schecterguitars.com 8187315760 10953 Pendleton St Sun Valley, CA 91352 28. Ace Products Group Merchandise $1,032,616 Alan Poster Email: APosterACE@aol.com 9167997389 3920 Cypress Dr, Suite B Petaluma, CA 94954 29. Guangzhou Bourgade Merchandise $1,014,044 Musical Instruments Jocelin Zhoung Email: JOCELIN@BAOJIAMUSIC.COM 17/F N TOWER SUNTEC PLAZA #197 Gugnazhou Dadao AV. N. Dongshan Dist. Guangzhou CHN 510075 30. Yamaha Guitar Group Merchandise $913,103 Steve Bartkoski Email: sbartkoski@line6.com 6263539459 DBA Line 6 Inc. P.O. Box 847028 Los Angeles, CA 90084 HILLIARD CHAPEL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Hilliard Chapel AME Zion Chuch 209 South "C" Street Stockton, CA 95205 Business Description: Hilliard Chapel AME Zion Chuch is a tax- exempt religious organization. Chapter 11 Petition Date: November 23, 2020 Court: United States Bankruptcy Court Eastern District of California Case No.: 20-25294 Judge: Hon. Christopher M. Klein Debtor's Counsel: David C. Johnston, Esq. DAVID C. JOHNSTON 1600 G Street, Suite 102 Modesto, CA 95354 Tel: (209) 579-1150 Email: david@johnstonbusinesslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Lamont D. Brown, pastor. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/YXJV72I/Hilliard_Chapel_AME_Zion_Chuch__caebke-20-25294__0001.0.pdf?mcid=tGE4TAMA IBIO INC: Posts $7.5 Million Net Loss in First Quarter ------------------------------------------------------ iBio, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the company of $7.53 million on $410,000 of revenues for the three months ended Sept. 30, 2020, compared to a net loss attributable to the company of $4.46 million on $108,000 of revenues for the three months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $117.25 million in total assets, $37.21 million in total liabilities, and $80.04 million in total equity. "In the past, the history of significant losses, the negative cash flow from operations, the limited cash resources and the dependence by the Company on its ability to obtain additional financing to fund its operations after the current cash resources are exhausted raised substantial doubt about the Company's ability to continue as a going concern. Based on the total cash and cash equivalents plus debt securities of approximately $83.6 million as of September 30, 2020, combined with subsequent sales of the Company's common stock through the date of the filing of this report totaling approximately $3.0 million, management believes the Company has adequate cash to support the Company's activities through fiscal year 2022." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1420720/000110465920125818/tm2035984-1_10q.htm About iBio Inc. iBio, Inc. -- http://www.ibioinc.com-- is a full-service plant-based expression biologics CDMO equipped to deliver pre-clinical development through regulatory approval, commercial product launch and on-going commercial phase requirements. iBio's FastPharming expression system, iBio's proprietary approach to plant-made pharmaceutical (PMP) production, can produce a range of recombinant products including monoclonal antibodies, antigens forsubunit vaccine design, lysosomal enzymes, virus-like particles (VLP), blood factors and cytokines, scaffolds, maturogens and materials for 3D bio-printing and bio-fabrication, biopharmaceutical intermediates and others, as well as create and produce proprietary derivatives of pre-existing products with improved properties. iBio reported a net loss attributable to the Company of $16.44 million for the year ended June 30, 2020, compared to a net loss attributable to the company of $17.59 million. As of June 30, 2020, the Company had $94.19 million in total assets, $37.58 million in total liabilities, and $56.61 million in total equity. IMPRIVATA INC: Fitch Assigns B+ LT IDR, Outlook Stable ------------------------------------------------------ Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR) of 'B+' to Imprivata, Inc. The Rating Outlook is Stable. Fitch has assigned a 'BB'/'RR2' rating to Imprivata's senior secured credit facilities, comprised of a $40 million revolving credit facility and a $715 million term loan B. Proceeds from the transaction will fund a pending acquisition, refinance existing debt and a $422 million distribution to equity holders. The ratings and Stable Outlook are supported by Imprivata's strong market position within identity governance and multi-factor authentication (MFA) for healthcare providers as well as secular growth trends for data security and access management within a complex regulatory environment. At the IT security industry level, Fitch believes the heightened awareness of IT security risks arising from high profile security breaches in recent years provides support for the secular growth of the industry. Imprivata offers both on-premise and cloud-based solutions to over 3,000 customers across 39 countries. Its gross revenue retention rates of high 90s and growing share-of-wallet with customers are reflective of the strong use case for the company's solutions. Fitch expects a continued shift to subscription-based revenues will provide greater predictability and visibility of earnings over the rating horizon, while EBITDA margins should benefit from cost rationalization efforts at the target. Fitch expects Imprivata's leverage to remain in the 5x-5.5x range over the rating horizon and free cash flow margins to sustain in the high-teens. KEY RATING DRIVERS Sizeable and Growing Market Opportunity: Digitization of care delivery, proliferation of healthcare systems and devices, pivoting to telehealth, increased cybersecurity threats, HIPAA requirements and increased regulation of licensed prescribers are all driving the demand for identity governance, MFA and endpoint security. Additionally, awareness of cybersecurity is accelerating, given the breach of 32 million patient records in the first half of 2019 alone. Finally, Imprivata has strong market share amongst U.S. hospitals that deploy a digital identity solution, with significant greenfield opportunities as only a third of U.S.-based hospital systems have adopted an SSO solution thus far. Diversified Customer Base with High Retention Rates: Imprivata serves 3,000 customers including 400 non-healthcare customers, with over 8 million providers on its platform across 39 geographies. No customer accounts for more than 10% of revenues. Additionally, over 50% of the company's revenue stream is recurring, and it enjoys a high-90s gross customer retention rate amongst its healthcare customers and has a strong track record of expanding its share of wallet over time. While licenses renew annually, they are secured under longer-term multi-year agreements providing strong revenue visibility. Strong Use Case Supports Long-Term Growth: Imprivata's solutions are purpose-built for the healthcare industry, in compliance with regulatory requirements, and integrated with hospitals legacy on-prem solutions and with the largest EHR providers and diagnostic systems. Estimates suggest that the implementation of virtual desktop access and a single sign-on solution saves roughly 10,300 to 13,250 hours annually across a hospital system, driving efficiencies and improved margins for the providers. The efficacy of Imprivata's solutions is reflected in its expanding share-of-wallet with its customers. Additionally, Imprivata's solutions minimize liability arising from unauthorized access and inadequate license authentication and reimbursement losses due to poor patient verification. Attractive Margin and FCF Profile: Despite Imprivata's limited scale, its margin profile is in line with best in class and much higher rated software peers like Oracle. Imprivata's EBITDA margin profile also compares favorably to its horizontal peers like Okta and Sailpoint. Minimal capex and working capital requirements result in FCF margins in the high teens, despite the interest burden. Niche Player with Limited Scale: While Imprivata occupies a leading market position within the healthcare vertical, its ratings are limited by its scale and lack of end-market diversification. Imprivata's purpose-built software product has gained some traction in non-healthcare settings, but it competes with horizontal peers like Okta and SailPoint, which have much larger scale, sizeable installed base and more established cloud offerings. DERIVATION SUMMARY Imprivata's industry expertise, revenue scale, profitability and leverage profile are consistent with the 'B' rating category. The company has a smaller revenue scale as a result of its narrow end-market focus relative to its larger and more diversified horizontal peers like Okta and Sailpoint. Imprivata also competes with Identity Automation, which is vertically focused on the healthcare segment, albeit smaller in scale and with a narrower service offering. Imprivata has market-leading EBITDA and FCF margins, well in excess of its larger peers, demonstrating its superior value proposition. Imprivata's operating profile benefits from its deep integration with other healthcare IT providers, its comprehensive product offering, as well as the growing cybersecurity threats faced by the healthcare industry. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Double-digit revenue growth in FY2021, reflecting the full-year impact of the pending acquisition. Organic revenue growth in the low single digits over the rating horizon - EBITDA margins expected to sustain above 40%, reflecting the realization of the 2020-2021 cost optimization efforts at both Imprivata and the target. - Normalized free cash flow in the mid-teens - Fitch's rating case expects the company will remain acquisitive over the rating horizon. The recovery analysis assumes a going concern EBITDA that is in line with pro forma LTM Sept. 30, 2020 EBITDA, excluding any cost savings. Fitch applies a 6.5x multiple to arrive at an enterprise value (EV) of $615 million. The multiple is higher than the median Telecom, Media and Technology EV multiple but is in line with other similar companies that exhibit strong FCF characteristics. In the 21st edition of Fitch's Bankruptcy Enterprise Values and Creditor Recoveries case studies, Fitch noted nine past reorganizations in the Technology sector with recovery multiples ranging from 2.6x to 10.8x. Of these companies, only three were in the software sector: Allen Systems Group, Inc.; Avaya, Inc.; and Aspect Software Parent, Inc., which received recovery multiples of 8.4x, 8.1x and 5.5x, respectively. The 6.5x multiple reflects the niche nature of Imprivata's offering, its strong FCF profile and highly recurring revenue base. Median trading multiples for the sector are in the double-digit range. - Fitch assumes a fully drawn revolver in its recovery analysis since credit revolvers are tapped as companies are under distress. Fitch assumes a full draw on Imprivata's $40 million revolver. - Fitch estimates strong recovery prospects for the senior secured credit facilities and rates them 'BB'/'RR2', or two notches above Imprivata's 'B+' IDR. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Gross Leverage sustained below 4x; - (CFO-Capex) / Debt sustained near 10%; - End market or product diversification. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Gross Leverage sustained above 5.5x; - (CFO-Capex) / Debt sustained below 7.5%; - FFO interest coverage ratio sustained below 2.5x. LIQUIDITY AND DEBT STRUCTURE Pro forma for the transaction, Imprivata will have $72 million of cash on its balance sheet along with full availability of its $40 million revolving credit facility. The company benefits from modest capex and low working capital requirements, resulting in significant free cash flow generation over the rating horizon and margins sustaining in the high teens. Fitch expects the company to generate pre-dividend free cash flows in excess of $200 million over the rating horizon. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). INVESTVIEW INC: Posts $1.2-Mil. Net Loss for Sept. 30 Quarter ------------------------------------------------------------- Investview, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1,187,760 on $7,753,337 of total net revenue for the three months ended Sept. 30, 2020, compared to a net loss of $1,753,566 on $7,242,124 of total net revenue for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $9,713,000, total liabilities of $29,322,235, and $19,609,235 in total stockholders' deficit. The Company said, "We have incurred significant recurring losses, which have resulted in an accumulated deficit of $52,536,063 as of September 30, 2020, along with a net loss of $6,101,547 for the six months ended September 30, 2020. Additionally, as of September 30, 2020, we had cash of $583,955 and a working capital deficit of $18,383,173. These factors raise substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available at: https://bit.ly/331mTud Investview, Inc., through its subsidiaries, operates as a diversified financial technology organization. The Company provides education and technology designed to assist individuals in navigating the financial markets. Its services include tools and research, newsletter alerts, and live education rooms that comprise instruction on the subjects of equities, options, FOREX, ETF's, and binary options. In addition, the Company offers education and technology applications to assist individuals in debt reduction, enhanced savings, budgeting, and proper tax expense management. The Company was formerly known as Global Investor Services, Inc. and changed its name to Investview, Inc. in March 2012. Investview, Inc. is headquartered in Salt Lake City, Utah. INVO BIOSCIENCE: Says Substantial Going Concern Doubt Exists ------------------------------------------------------------ INVO Bioscience, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1,771,827 on $336,071 of total revenue for the three months ended Sept. 30, 2020, compared to a net loss of $710,334 on $303,571 of total revenue for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $1,688,992, total liabilities of $5,590,936, and $3,901,944 in total stockholders' deficiency. The Company said, "For the nine months ended September 30, 2020 and 2019, the Company had net losses of $4,539,100 and $1,410,456, respectively. The Company had a working capital deficit of $510,693 as of September 30, 2020, compared to working capital of $42,330 as of December 31, 2019. As of September 30, 2020, the Company's stockholder's deficiency was $3,901,944 compared to $3,713,595 as of December 31, 2019 and cash used in operations was $2,954,823 for the nine months ended September 30, 2020 compared to cash provided by operations of $2,141,607 for the nine months ended September 30, 2019. Those factors raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at: https://bit.ly/3kFBKRa INVO Bioscience, Inc., is a medical device company focused on creating simplified, lower cost treatments for patients diagnosed with infertility. The INVO Procedure is a disruptive new technology. The INVO Procedure is a revolutionary in vivo method of vaginal incubation that offers patients a more natural and intimate experience. IOTA COMMUNICATIONS: Posts $12.6M Loss for November 2019 Quarter ---------------------------------------------------------------- On Nov. 6, 2020, Iota Communications, Inc., filed its amended quarterly report on Form 10-Q/A, disclosing a net loss of $12,597,382 on $33,710 of net sales for the three months ended Nov. 30, 2019, compared to a net loss of $17,118,897 on $835,869 of net sales for the same period in 2018. At Nov. 30, 2019, the Company had total assets of $26,753,806, total liabilities of $115,690,317, and $88,936,511 in total deficit. Iota Communications said, "The Company has incurred net losses of $138,380,793 since inception, including a net loss attributable to Iota Communications of $19,571,886 for the six months ended November 30, 2019. Additionally, the Company had negative working capital of $20,022,573 and $23,638,461 at November 30, 2019 and May 31, 2019, respectively, and has negative cash flows from operations of $6,639,508 for the six months ended November 30, 2019. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable." A copy of the Form 10-Q/A is available at: https://bit.ly/3pMiipt Newark, New Jersey-based Iota Communications, Inc., formerly known as Solbright Group, Inc. -- https://www.iotacommunications.com/ -- is a wireless network carrier system and software applications provider dedicated to the Internet of Things. Iota sells recurring-revenue solutions that optimize energy usage, sustainability and operations for commercial and industrial facilities both directly and via third-party relationships. Iota also offers important ancillary products and services which facilitate the adoption of its subscription-based services, including solar energy, LED lighting, and HVAC implementation services. IPSIDY INC: Reports $1.9M Net Loss for Quarter Ended Sept. 30 ------------------------------------------------------------- Ipsidy Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $1,918,239 on $515,692 of total net revenues for the three months ended Sept. 30, 2020, compared to a net loss of $2,358,236 on $552,761 of total net revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $11,279,745, total liabilities of $9,567,115, and $1,712,630 in total stockholders' equity. Ipsidy said, "There is no assurance that the Company will ever be profitable or be able to secure funding or generate sufficient revenues to sustain operations. As such, there is substantial doubt about the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern." A copy of the Form 10-Q is available at: https://bit.ly/35LG8dd Ipsidy Inc. (formerly ID Global Solutions Corporation) operates an Identity as a Service (IDaaS) platform that delivers a suite of secure, mobile, biometric identity solutions, available to any vertical, anywhere. The Company was founded in 2009 and is headquartered in Long Beach, New York. IQSTEL INC: Has $970,000 Net Loss for Quarter Ended Sept. 30 ------------------------------------------------------------ iQSTEL Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $970,225 on $13,291,698 of revenues for the three months ended Sept. 30, 2020, compared to a net loss of $3,517,171 on $4,172,547 of revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $5,324,255, total liabilities of $8,367,525, and $3,043,270 in total stockholders' deficit. iQSTEL said, "The Company does not have significant cash, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. In addition, the Company incurred a net loss of US$3,501,963 for the nine months ended September 30, 2020 and has negative working capital as of September 30, 2020. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. "The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations. "During the next year, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and marketing expenses. The Company may experience a cash shortfall and be required to raise additional capital. "Historically, the Company has relied upon funds from its stockholders. Management may raise additional capital through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company's failure to do so could have a material and adverse effect upon its operations and its stockholders." A copy of the Form 10-Q is available at: https://bit.ly/36OvBND iQSTEL Inc., through its subsidiary, Etelix.com USA, LLC, operates as a technology company worldwide. The company provides international long-distance voice services (ILD wholesale) for telecommunications operator; and submarine fiber optic network capacity for data carriers and Internet service providers, including land-based and mobile services, such as 4G and 5G. It offers its services through approximately 200 interconnections with telecommunication carriers, PSTNs, PTTs, mobile operators, mobile virtual network operators, long distance operators, and long distance wholesale carriers. The company also provides network-monitoring services through two network operation centers located in the United States and Europe. iQSTEL Inc. is based in Coral Gables, Florida. J.JILL INC: Has $19.0-Mil. Net Loss for Quarter Ended Aug. 1 ------------------------------------------------------------ J.Jill, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss and total comprehensive loss of $19,034,000 on $92,636,000 of net sales for the 13 weeks ended Aug. 1, 2020, compared to a net loss and total comprehensive loss of $96,735,000 on $180,744,000 of net sales for the same period ended August 3, 2019. At Aug. 1, 2020, the Company had total assets of $574,650,000, total liabilities of $624,247,000, and $49,597,000 in total shareholders' deficit. The Company said, "As a result of the COVID-19 pandemic, the Company's revenues, results of operations, and cash flows have been materially adversely impacted, and resulted in a failure by us to comply with the financial covenants contained in our ABL Facility and Term Loan agreements for the period ended August 1, 2020. This has led to substantial doubt about the Company's ability to continue as a going concern. The inclusion of substantial doubt about the Company's ability to continue as a going concern in the report of our independent registered public accounting firm on our accompanying financial statements for the fiscal year ended February 1, 2020 resulted in a violation of affirmative covenants under our ABL Facility and Term Loan agreements. As a result of the violation of affirmative covenants, lenders could exercise available remedies including, declaring the principal of and accrued interest on all outstanding indebtedness immediately due and payable and terminating all remaining commitments and obligations under the credit facilities." A copy of the Form 10-Q is available at: https://bit.ly/3pL95hm J.Jill, Inc. operates as an Omni channel retailer women's apparel under the J.Jill brand name in the United States. The company offers knit and woven tops, bottoms, and dresses, as well as sweaters and outerwear; and complementary footwear and accessories, including scarves, jewelry, and hosiery for misses, petites, and women. Its customers comprise women in 40-65 age range. The company markets its products through retail stores, Website, and catalogs. J.Jill, Inc., is headquartered in Quincy, Massachusetts. JTS TRUCKING: Hearing on Albertville Property Sale Cont. to Dec. 10 ------------------------------------------------------------------- Judge James J. Robinson of the U.S. Bankruptcy Court for the Northern District of Alabama continued the hearing on JTS Trucking, LLC's proposed private sale of the real property located at 940 Portwood Drive, Albertville, Alabama to Elite Millwright and Fabrication, LLC for $325,000, to Dec. 10, 2020 at 9:30 a.m. The hearing will be held via an AT&T call-in number. Parties can find the call-in number and passcode on the Court's webpage at www.alnb.uscourts.gov. If they cannot locate the dial-in number on the website, they may call the Clerk's office at (205) 714-4000). Parties should call in five minutes prior to the start of the hearing. The Debtor proposed to sell its interest in the Property free and clear of any and all mortgages, liens, interests, and/or other encumbrances. The Property is being sold "as is, where is" with no warranty of any type whatsoever. From the proceeds, the Debtor proposed to pay Vantage Bank the amount necessary to satisfy its mortgage. A copy of the Agreement is available at https://tinyurl.com/y5wn5k6d from PacerMonitor.com free of charge. About JTS Trucking JTS Trucking LLC, a trucking company based in Albertville, Alabama, sought protection under Chapter 11 of the Bankruptcy Court (Bankr. N.D. Ala. Case No. 20-40423) on March 6, 2020, listing under $1 million in both assets and liabilities. The petition was signed by Susan M. Lowden, its member. The Debtor tapped Harry P. Long, Esq., at the Law Offices of Harry P. Long, LLC as its counsel; Bill Massey and MDA Professional Group, PC as its accountants; and Kevin Lowery and RE/MAX The Real Estate Group as broker and property manager for the Debtor's estate. LAPEER INDUSTRIES: Dec. 14 Auction of Substantially All Assets -------------------------------------------------------------- Judge Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan authorized Lapeer Industries, Inc.'s proposed bidding procedures in connection with the auction sale of substantially all assets. The salient terms of the Bidding Procedures are: a. Bid Deadline: Dec. 2, 2020 at 5:00 p.m. (ET) b. Initial Bid: $1.25 million. If a Stalking Horse Bidder is selected, the purchase price in the APA will be no less than $1.25 million plus any outstanding DIP loan amount. If a Stalking Horse Bidder is selected the minimum bid at any auction will be increased to the amount set forth in the APA plus the minimum bid amount described in the Bidding Procedures order. c. Deposit: $100,000 d. Auction: If one or more Qualified Bids is received (in addition to the possible Stalking Horse Bid) by the Qualified Bid Deadline, the Auction will be conducted at the offices of Winegarden, Haley, Lindholm, Tucker, and Himelhoch, PLC or such other place as may be designated by the Debtor, on Dec. 14, 2020, commencing at 10:00 a.m. (ET). Qualified Bidders may attend the Auction via remote video connection, provided that they contact the attorney for the Debtor by email to ztucker@winegarden-law.com at least seven days prior to the auction to make arrangements for a remote appearance. e. Bid Increments: $50,000 f. Sale Hearing: Dec. 16, 2020 at 3:00 p.m. (ET) g. Sale Objection Deadline: Dec. 15, 2020 at 3:00 p.m. (ET) h. Closing: Jan. 8, 2021 The Notice of Auction and Sale, and the Assumption and Assignment Notice are approved. By no later than three days after entry of the Bidding Procedures Order, the Debtor will file the Cure Schedule. Upon the filing of the Cure Schedule, the Debtor will serve the Cure Schedule and the Assumption and Assignment Notice on each of the non-debtor counterparties listed on the Cure Schedule. The Cure/Assignment Objection Deadline is Nov. 30, 2020 at 5:00 p.m. (ET) and the Adequate Assurance Objection Deadline is Dec. 15, 2020 at 3:00 p.m. (ET). Any timely filed and unresolved Cure/Assignment Objection and/or Adequate Assurance Objection will be heard at the Sale Hearing. The Debtor will provide notification pursuant to Section 2 of the Bidding Procedures by no later than three days after entry of this Order. Nothing in the Order or otherwise will affect any right which may exist in favor of any entity holding a valid and enforceable Lien from exercising any right afforded to such holder; provided however that if the Debtor receives an unconditional offer for the Assets that is equal to or greater than $2.5 million in cash, then Trion Solutions, Inc. and Trion Staffing Solutions, Inc. waive their respective rights to credit bid. The Debtor will make no further rent payments with respect to 3140 John Conley Drive Lapeer, MI 48446 until the closing of a sale of substantially all of the Debtor's assets in accordance with the Order. It will make no further payments to Daniel Schreiber whether in the form of salary or otherwise until the closing of a sale of substantially all of its assets in accordance with the Order and any payments due between the date of the Order and the closing are waived except for any ordinary course salary payments due to Mr. Schreiber on account of work performed prior to the date of the Order. If (1) the CRO makes a good faith determination that their work is essential to the Debtor's current operations and the compensation is fair in relation to the work provided and (2) their pay is consistent with their past history, then (a) Ryan Schreiber, an hourly employee of the Debtor may continue to receive $28 per hour for the time he works for the Debtor up to 40 hours a week and (b) Stephanie Bland may continue to receive $18 per hour for the time she works for the Debtor up to 40 hours a week. The Committee, Trion Solutions, Inc., Trion Staffing Solutions, Inc., and Manufacturers Capital, a division of Commercial Credit Group, Inc., reserve all rights and objections with respect to the approval of the Sale Motion, including without limitation, an objection based on the grounds that the contemporaneously filed Motion to Approve Compromise under Bankruptcy Rule 9019 was not approved by the Court. About Lapeer Industries Lapeer Industries, Inc., is a design, machining and fabrication company serving the automotive and defense industries. It provides fabrication, automated welding, machining, painting, assembly and kitting services. Lapeer Industries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 20-31375) on Aug. 5, 2020. The case was initially assigned to Judge Joel D. Applebaum. On Aug. 13, 2020, the case was reassigned to Judge Phillip Shefferly and was assigned a new case number (Case No. 20-48744). At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $10 million and $50 million. Winegarden, Haley, Lindholm, Tucker & Himelhoch P.L.C., is the Debtor's legal counsel. LESLIE'S POOLMART: S&P Upgrades ICR to 'B+' on Debt Reduction ------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S. specialty pool supply retailer Leslie's Poolmart Inc. to 'B+' from 'B' and removed its ratings on the company from CreditWatch, where the rating agency placed them with positive implications on Oct. 29, 2020. The upgrade reflects the material improvement in Leslie's credit metrics following debt paydown using the proceeds from the IPO. The company generated total net proceeds of $465 million and used a portion of the proceeds to fully repay its $390 million senior unsecured notes. This represents a roughly one-third reduction in Leslie's total funded debt, which has improved S&P-adjusted leverage by roughly one and a half turns. S&P said, "Therefore, we now forecast the company's leverage will be about 4x as of the end of fiscal year 2021 before improving modestly thereafter to the high-3x area. Given the substantial improvement in Leslie's leverage and our belief that it will sustain this improvement, we are revising our assessment of its financial risk profile to aggressive from highly leveraged." Pro forma for the IPO, the company's financial sponsors (L Catterton and GIC) own roughly 64% of its equity. S&P said, "Given the sponsors maintain a majority ownership stake, we consider Leslie's to be at greater risk of a future leveraging event or potentially aggressive financial policies, including potential shareholder returns, than non-sponsor owned peers. However, we believe there is minimal likelihood that such an event would increase leverage by more than one turn. Therefore, we are revising our financial policy assessment on the company to FS-5 from FS-6." Leslie's performance has improved during the coronavirus pandemic due to consumers' elevated focus on their homes. The company's comparable sales increased by 19.4% for the third quarter, which is a dramatic acceleration from historical results, and it has issued guidance for comparable sales in the fourth quarter of 22.4%-23.1%. S&P said, "In our view, Leslie's has benefited substantially from consumers' increased time spent at home and the reallocation of their discretionary spending away from experiences and travel due to the pandemic. This has led to dramatically elevated usage of residential pools as well as a faster pace of above- and in-ground pool installations, which we view as directly supporting the heightened demand for pool maintenance products. Furthermore, we believe that Leslie's sales are unlikely to decline substantially even if a vaccine or effective treatment becomes available in 2021 because the purchase of pool maintenance products is somewhat non-discretionary. We anticipate the company's sales will return to historical growth levels in the low- to mid-single digit percent area in fiscal year 2021 as the pace of new pool installations normalizes and consumers slowly shift their spending back to experiences and travel." S&P views the company as a leading pool supply retailer, though its overall scale remains limited. Leslie's provides customers with a differentiated experience through its service offerings, which include free water testing at all locations. S&P said, "We believe that these services create a level of customer stickiness that benefits the company and provides an elevated customer proposition compared to big-box (Wal-Mart Inc.) and online (e.g. Amazon Inc.) retailers. However, Leslie's is a relatively small niche retailer with roughly $1.1 billion of anticipated total sales for fiscal year 2020. The company is also sensitive to weather trends, which have historically led to volatility in credit metrics that we expect will continue. Because of these factors, we apply a negative one-notch comparable ratings analysis adjustment to our anchor on Leslie's." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The stable outlook on Leslie's reflects S&P's expectation that performance will remain positive with modest EBITDA expansion on growing sales and consistent margins, leading to leverage sustained in the high-3x to 4x range. S&P could raise its ratings on Leslie's Poolmart if: -- It expands its scale while maintaining positive same-store sales and stable margins such that S&P believes the company's competitive positioning has materially improved and it will consistently generate at least $100 million in free cash flow; -- Its leverage improves to, and remains in, the mid-3x area; and -- Its financial sponsor further reduces its ownership stake, leading S&P to believe that the risk of a releveraging event is minimal. S&P could lower its rating on Leslie's Poolmart if: -- S&P expects its leverage to approach 5x and remain at that level, which could occur if sales and EBITDA margins are materially pressured. Under this scenario, S&P would likely view the company's competitive positioning as weakened; -- S&P does not expect that Leslie's would be able to absorb the year-to-year seasonal volatility caused by poor weather trends without leading to material volatility in its credit metrics; or -- The company adopts a more aggressive financial policy. LINCOLN COUNTY, GA: S&P Withdraws Long-Term Bond Rating ------------------------------------------------------- S&P Global Ratings withdrew its long-term rating on Lincoln County, Ga.'s series 2015 water and sewerage system revenue refunding bonds due to its inability to gather additional information from management to understand if any plans exist for improving financial margins in the water and sewerage system fund. Without additional information, S&P cannot maintain the rating because it is not possible to determine the credit fundamentals of the water and sewerage system revenue pledge. If the rating on the bonds is reinstated, S&P will incorporate any additional information from management to determine the credit rating, which could be different from the 'BB+' rating resulting from the downgrade on Sept. 3, 2020. LONESTAR RESOURCES: Reports $34.8M Net Loss for Sept. 30 Quarter ---------------------------------------------------------------- Lonestar Resources US Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $34,802,000 on $32,109,000 of total revenues for the three months ended Sept. 30, 2020, compared to a net income of $16,217,000 on $53,145,000 of total revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $545,971,000, total liabilities of $610,996,000, and $65,025,000 in total stockholders' deficit. The Company said, "The filing of the Chapter 11 Cases constituted an event of default under our 11.25% Senior Notes and Credit Facility, which resulted in the automatic and immediate acceleration of all of our debt outstanding with the exception of the building loans held by our subsidiary, Boland Building, LLC and certain small financing loans. We project that we will not have sufficient cash on hand or available liquidity to repay such debt. These conditions and events, along with uncertainties associated with the bankruptcy process, raise substantial doubt about our ability to continue as a going concern. "Our ability to continue as a going concern is contingent upon, among other things, our ability to implement the Restructuring Plan, successfully emerge from the Chapter 11 Cases and generate sufficient liquidity from the Restructuring to meet our obligations and operating needs on an ongoing basis. As a result of risks and uncertainties related to the effects of disruption from the Chapter 11 Cases making it more difficult to maintain business, financing and operational relationships, we have concluded that our plans do not alleviate substantial doubt regarding the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at: https://bit.ly/3lT1Rpc Lonestar Resources US Inc., an independent oil and gas company, engages in the acquisition, development, and production of unconventional oil, natural gas liquids, and natural gas properties in the United States. It primarily focuses on Eagle Ford Shale properties that cover an area of 53,831 net acres in Texas counties. The company was incorporated in 2015 and is headquartered in Fort Worth, Texas. LOOP MEDIA: Losses Since Inception Cast Going Concern Doubt ----------------------------------------------------------- Loop Media, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $1,641,972 on $626,785 of total revenue for the three months ended Sept. 30, 2020, compared to a net loss of $735,403 on $834,681 of total revenue for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $5,305,823, total liabilities of $4,149,524, and $1,156,299 in total stockholders' equity. The Company said, "As of September 30, 2020, the Company had cash of US$1,971,923 and an accumulated deficit of US$35,660,199. During the nine months ended September 30, 2020, the Company used net cash in operating activities of US$3,606,632. The Company has incurred net losses since inception. These conditions raise substantial doubt about the Company's ability to continue as a going concern within one year from the issuance date of these unaudited condensed consolidated financial statements. "The Company's primary source of operating funds since inception has been cash proceeds from debt and equity financing transactions. The ability of the Company to continue as a going concern is dependent upon its ability to generate sufficient revenue and its ability to raise additional funds by way of its debt and equity financing efforts. "Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. "The spread of a novel strain of coronavirus (COVID-19) around the world in the first half of 2020 has caused significant volatility in U.S. and international markets. The Company experienced a 17% decline in revenues in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019, which was directly related to business closures of key customers." A copy of the Form 10-Q is available at: https://bit.ly/3nHPzQY Based in Glendale, California, Loop Media, Inc., owns 100% of the capital stock of two companies that make up ScreenPlay. ScreenPlay is a combination of ScreenPlay, Inc., a state of Washington corporation incorporated in 1991, and SPE, Inc., a state of Washington corporation incorporated in 2008. ScreenPlay provides customized audiovisual environments that support integrated brand strategies for clients in the retail, hospitality, and business services markets, and for online content providers. LSC COMMUNICATIONS: Posts $111M Net Loss for Sept. 30 Quarter ------------------------------------------------------------- LSC Communications, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $111 million on $628 million of net sales for the three months ended Sept. 30, 2020, compared to a net income of $23 million on $834 million of net sales for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $1,473 million, total liabilities of $1,650 million, and $177 million in total deficit. The Company said that it believes there is substantial doubt about its ability to continue as a going concern. The Company further stated, "Our ability to continue as a going concern is contingent upon our ability to comply with the covenants of the Debtor-in-Possession Credit Agreement, and our ability to implement, subject to the Bankruptcy Court's approval, a plan of reorganization, among other factors. "While operating as debtors-in-possession under Chapter 11, we may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business (and subject to restrictions in our debt agreements), for amounts other than those reflected in the accompanying condensed consolidated financial statements. Further, the plan of reorganization could materially change the amounts and classifications of assets and liabilities reported in the condensed consolidated financial statements." A copy of the Form 10-Q is available at: https://bit.ly/3pQGzuM LSC Communications, Inc., together with its subsidiaries, provides various traditional and digital print, print-related services, and office products in North America, Europe, and Mexico. It operates through Magazines, Catalogs and Logistics; Book; Office Products; Mexico; and Other segments. The company was founded in 2016 and is based in Chicago, Illinois. MANHATTAN SCIENTIFICS: Has $1.8M Net Income for Sept. 30 Quarter ---------------------------------------------------------------- Manhattan Scientifics, Inc., filed its quarterly report on Form 10-Q, disclosing net income of $1,761,000 on $0 of revenue from royalties for the three months ended Sept. 30, 2020, compared to a net loss of $1,229,000 on $22,000 of revenue from royalties for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $4,024,000, total liabilities of $2,390,000, and $576,000 in total stockholders' equity. The Company said, "As of September 30, 2020, the Company has cumulative losses totaling US$67,638,000 and negative working capital of US$1,513,000. The Company had a net income of US$1,557,000 for the nine months ended September 30, 2020. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. Because of these conditions, the Company will require additional working capital to develop business operations. Management's plans are to raise additional working capital through the continued licensing of its technology as well as to generate revenues for other services. There are no assurances that the Company will be able to achieve the level of revenues adequate to generate sufficient cash flow from operations to support the Company's working capital requirements. To the extent that funds generated are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations." A copy of the Form 10-Q is available at: https://bit.ly/331V7O7 Manhattan Scientifics, Inc., a technology incubator, develops and commercializes life-enhancing technologies in the United States. It develops technologies in the areas of nano-technologies and nano-medicine. The company was formerly known as Grand Enterprises, Inc. Manhattan Scientifics was founded in 1992 and is based in New York. MANNKIND CORP: Has $11.3M Net Loss for Quarter Ended Sept. 30 ------------------------------------------------------------- MannKind Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $11,255,000 on $15,352,000 of total revenues for the three months ended Sept. 30, 2020, compared to a net loss of $10,370,000 on $14,595,000 of total revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $95,681,000, total liabilities of $282,101,000, and $186,420,000 in total stockholders' deficit. The Company said, "We are not currently profitable and have rarely generated positive net cash flows from operations. In addition, we expect to continue to incur significant expenditures for the foreseeable future in support of our manufacturing operations, sales and marketing costs for Afrezza, and collaboration and development costs for product candidates in our pipeline. As of September 30, 2020, we had an accumulated deficit of US$3.0 billion and US$122.6 million of total principal amount of outstanding borrowings, with limited capital resources of US$52.4 million in cash and cash equivalents. These financial conditions raise substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available at: https://bit.ly/3nLSyYI MannKind Corporation is a biopharmaceutical company focused on the development and commercialization of inhaled therapeutic products for patients with diseases such as diabetes and pulmonary arterial hypertension. The company is based in Westlake Village, California. MASTEC INC: Moody's Upgrades CFR to Ba1, Outlook Stable ------------------------------------------------------- Moody's Investors Service upgraded MasTec, Inc.'s Corporate Family Rating to Ba1 from Ba2, Probability of Default Rating (PDR) to Ba1-PD from Ba2-PD and senior unsecured rating to Ba2 from Ba3. Moody's also maintained the company's Speculative Grade Liquidity Rating at SGL-2. The outlook remains stable. The ratings upgrade reflects Moody's expectation for continued improvement in MasTec's credit profile, higher predictability in free cash flow, good liquidity and on-going solid execution. The Ba2 rating on the company's senior unsecured notes is one notch below MasTec's CFR reflecting the notes' contractual subordination to the $1.35 billion secured revolver and $400 million term loan facility (both unrated). "MasTec's management team has remained focused on execution, successfully integrated acquisitions, improved profitability, re-invested free cash flow back in the business, and limited dividend distributions as well as share repurchases thereby balancing the interests of the company's creditors with the interest of its shareholders," said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Upgrades: Issuer: MasTec, Inc. Corporate Family Rating, Upgraded to Ba1 from Ba2 Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD Senior Unsecured Notes, Upgraded to Ba2 (LGD5) from Ba3 (LGD4) Outlook Actions: Issuer: MasTec, Inc. Outlook, Remains Stable RATINGS RATIONALE MasTec's Ba1 Corporate Family Rating reflects the company's strong market position as one of the top leading specialty contractors (by revenue) servicing the communications, clean energy/renewables, oil & gas pipelines and other industrial end markets in North America, its attractive and broad customer base, and large market opportunity. In addition, Moody's rating is supported by the company's strong operating performance, modest leverage, disciplined financial policy and good liquidity profile. At the same time, Moody's rating takes into consideration the company's vulnerability to cyclical end markets, the competitive nature of the business it operates in and revenue exposure to AT&T (19% of total revenue). Moody's projects MasTec's debt-to-EBITDA (inclusive of Moody's adjustments) will be 2.0x at year-end 2021. The stable outlook reflects Moody's expectation that during this uncertain economic environment MasTec will maintain a continued conservative approach to balance sheet management and liquidity and that its backlog and demand drivers will provide relative operating stability. MasTec's SGL-2 Speculative Grade Liquidity rating reflects Moody's expectation of a good liquidity profile over the next 12 to 18 months. On Sept. 30, 2020, the company had approximately $238 million in cash and $1,195 million in availability under its revolving credit facility that expires in September 2024. In addition, Moody's expects MasTec to generate more than $350 million in free cash flow in 2021. MasTec's $1.75 billion senior secured credit facility (unrated) consists of a $1.35 billion revolver and a $400 million term loan. Both tranches mature in September 2024. Moody's does not expect MasTec to have significant utilization under its revolver in the next 12-18 months, with possible intra-quarter borrowings for working capital needs and modest usage in letters of credit. The credit facility requires that MasTec maintain a maximum consolidated leverage ratio of 3.5x and a minimum consolidated interest coverage ratio of 3.0x. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if: -- The company attains a capital structure that allows for maximum financial flexibility -- The company displays a commitment to attaining and maintaining an investment-grade rating -- Adjusted debt-to-EBITDA is approaching 2.0x -- Adjusted EBITA-to-Interest expense is above 6.0x for a sustained period of time -- The company improves its liquidity and free cash profile The ratings could be downgraded if: -- Adjusted debt-to-EBITDA is above 2.5x for a sustained period of time -- Adjusted EBITA-to-Interest expense is below 5.0x for a sustained period of time -- The company's liquidity and operating performance deteriorates The principal methodology used in these ratings was Construction Industry published in March 2017. Headquartered in Coral Gables, FL, MasTec, Inc. is a leading infrastructure construction company operating mainly throughout North America across a range of industries. The company's primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; pipeline infrastructure; electrical utility transmission and distribution; power generation, including from clean energy and renewable sources; heavy civil; and industrial infrastructure. MasTec, Inc. is a publicly-traded company on the NYSE with the ticker symbol MTZ. Insiders including the Mas family control approximately 24% of the shares outstanding. MERION INC: Management Says Substantial Going Concern Doubt Exists ------------------------------------------------------------------ Merion, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $442,621 on $41,697 of total sales for the three months ended Sept. 30, 2020, compared to a net loss of $556,074 on $97,811 of total sales for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $1,538,966, total liabilities of $7,216,033, and $5,677,067 in total shareholders' deficit. The Company said, "Management has determined there is substantial doubt about our ability to continue as a going concern as a result of our lack of significant revenues, significant recurring losses, and negative working capital. If we are unable to generate significant revenue or secure additional financing, we may be required to cease or curtail our operations. Our financial statements do not include adjustments that might result from the outcome of this uncertainty. "Management is trying to alleviate the going concern risk by: engaging external sales representatives to sell the Company's products, investigating and securing various financing resources, including but not limited to borrowing from the Company's major shareholder, private placements, and the possibility of raising funds through a future public offering." A copy of the Form 10-Q is available at: https://bit.ly/3fnsfoQ Merion, Inc., manufactures and provides health and nutritional supplements and personal care products currently sold on the internet through its websites, www.dailynu.com and www.merionus.com, and to wholesale distributors. The Company also provides Original Equipment Manufacturer and packaging services of hard capsules, tablets, solid beverage (sachet packaging), teabags, powder, granules, dietary supplements for export, softgel capsules and health food. The Company is headquartered in West Covina, California. MGBV PROPERTIES: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of MGBV Properties, Inc., according to court dockets. About MGBV Properties Inc. MGBV Properties, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02901) on Sept. 30, 2020. At the time of the filing, the Debtor had estimated assets and liabilities of less than $50,000. Judge Jerry A. Funk oversees the case. The Adam Law Group P.A. is the Debtor's legal counsel. MICROVISION INC: Posts $2.8-Mil. Net Loss for Sept. 30 Quarter -------------------------------------------------------------- MicroVision, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $2,826,000 on $639,000 of total revenue for the three months ended Sept. 30, 2020, compared to a net loss of $6,141,000 on $1,190,000 of total revenue for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $8,961,000, total liabilities of $13,154,000, and $4,193,000 in total shareholders' deficit. The Company disclosed factors that raise substantial doubt regarding its ability to continue as a going concern. The Company said, "We have incurred significant losses since inception. We have funded operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales, and licensing activities. At September 30, 2020, we had US$5.0 million in cash and cash equivalents. "Based on our current operating plan that includes anticipated future proceeds from the sale of shares under our existing Purchase Agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park"), we anticipate that we have sufficient cash and cash equivalents to fund our operations through the first quarter of 2021. We will require additional capital to fund our operating plan past that time. We plan to seek additional capital through the issuance of equity or debt securities, and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include further reductions in our production capacities, research and development projects, staff, operating costs, and capital expenditures." A copy of the Form 10-Q is available at: https://bit.ly/3fjI1kt MicroVision, Inc., develops PicoP scanning technology that provides high-resolution miniature projection, and three-dimensional sensing and image capture solutions in the United States. It was founded in 1993 and is headquartered in Redmond, Washington. MID-CON ENERGY: Has $3.5M Net Loss for Quarter Ended Sept. 30 ------------------------------------------------------------- Mid-Con Energy Partners, LP, filed its quarterly report on Form 10-Q, disclosing a net loss of $3,539,000 on $8,750,000 of total revenues for the three months ended Sept. 30, 2020, compared to net income of $5,961,000 on $21,752,000 of total revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $186,870,000, total liabilities of $108,665,000, and $78,205,000 in total equity. The Company said, "At March 31, 2020, the Partnership was not in compliance with the leverage ratio covenant of our credit agreement. On June 4, 2020, Amendment 15 to the credit agreement was executed, decreasing the borrowing base of the revolving credit facility from US$95.0 million to US$64.0 million, establishing a repayment schedule for the borrowing base deficiency and waiving the March 31, 2020, leverage ratio noncompliance. At September 30, 2020, the Partnership was in compliance with the financial covenants required by the credit agreement. Our ability to continue as a going concern is dependent on the re-negotiation of our revolving credit agreement that matures May 1, 2021, or other measures such as the sale of assets or raising additional capital. There can be no assurance, however, that such discussions will result in a refinancing of the credit facility on acceptable terms, if at all, or provide any specific amount of additional liquidity. These factors raise substantial doubt over the Partnership's ability to continue as a going concern for at least one year from the date that these financial statements are issued, and therefore, whether we will realize our assets and extinguish our liabilities in the normal course of business and at the amounts stated in the unaudited condensed consolidated financial statements." A copy of the Form 10-Q is available at: https://bit.ly/3kRuAcF Mid-Con Energy Partners, LP, acquires, explores, develops, and produces oil and natural gas properties in North America. The company's properties are located in the Southern Oklahoma, Northeastern Oklahoma, parts of Oklahoma, Colorado and Texas within the Hugoton, and Texas Gulf Coast and Texas within the Eastern Shelf of the Permian in the Mid-Continent and Permian Basin regions of the United States. The company was founded in 2011 and is headquartered in Dallas, Texas. Mid-Con Energy GP LLC serves as the general partner of Mid-Con Energy Partners LP. MOBILESMITH INC: Reports $2.6M Net Loss for the Sept. 30 Quarter ---------------------------------------------------------------- MobileSmith, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $2,605,038 on $511,411 of total revenue for the three months ended Sept. 30, 2020, compared to a net loss of $2,854,707 on $646,255 of total revenue for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $1,234,629, total liabilities of $55,838,068, and $54,603,439 in total stockholders' deficit. The Company said, "During the nine months ended September 30, 2020 and 2019, the Company incurred net losses as well as negative cash flows from operations and has negative working capital of US$2,089,721 as of September 30, 2020. These factors raise substantial doubt about the Company's ability to continue as a going concern. "The Company's continuation as a going concern depends upon its ability to generate sufficient cash flows to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations and positive cash flows. Since November 2007, the Company has been funding its operations, in part, from the proceeds from the issuance of notes under a convertible secured subordinated note purchase agreement facility which was established in 2007 (the "2007 NPA"), and an unsecured convertible subordinated note purchase agreement facility established in 2014 (the "2014 NPA"), and subordinated promissory notes to related parties. "As of September 30, 2020, the Company had notes with US$49,274,660 of combined face value outstanding principal which were issued under the 2007 NPA and 2014 NPA (collectively, the "Notes"). The Company is entitled to request additional notes in an amount not exceeding US$9,481,750, subject to the terms and conditions specified in these facilities. The Notes under the 2007 NPA and 2014 NPA and subordinated promissory notes to related parties mature in November of 2022. Additionally, the Company has a Loan and Security Agreement with Comerica Bank ( the "Comerica LSA") which matures in June of 2022. There can be no assurance that the Company will in fact be able to raise additional capital through these facilities or even from other sources on commercially accepted terms, if at all. Additionally, the disruption to capital markets caused by the pandemic may adversely affect the Company's ability to obtain funding to continue operations in the future. As such, there is substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at: https://bit.ly/3fxws9z MobileSmith, Inc. provides procedure management assistance and operational improvement patient/member-facing mobile application services to the healthcare industry in the United States. The company's suite of e-health mobile solutions provides a catalog of ready to deploy mobile app solutions and support services. It operates Peri, a cloud-based surgical and clinical procedure application. The company was formerly known as Smart Online, Inc. and changed its name to MobileSmith, Inc. in July 2013. MobileSmith, Inc. was incorporated in 1993 and is headquartered in Raleigh, North Carolina. MOBIQUITY TECHNOLOGIES: Has $4.0M Net Loss for Sept. 30 Quarter --------------------------------------------------------------- Mobiquity Technologies, Inc., filed its quarterly report on Form 10-Q, disclosing a net comprehensive loss of $3,961,170 on $1,429,696 of revenue for the three months ended Sept. 30, 2020, compared to a net comprehensive loss of $4,215,079 on $2,800,174 of revenue for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $13,250,267, total liabilities of $6,666,979, and $6,583,288 in total stockholders' equity. The Company said, "The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. As of September 30, 2020, the Company had an accumulated deficit of US$182,116,945. These factors raise substantial doubt regarding the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. We may continue to incur operating and net losses in future periods. These losses may increase, and we may never achieve profitability for a variety of reasons, including increased competition, decreased growth in the unified advertising industry and other factors. If we cannot achieve sustained profitability, our stockholders may lose all or a portion of their investment in our company." A copy of the Form 10-Q is available at: https://bit.ly/3nKWN6D Mobiquity Technologies, Inc. operates as a mobile advertising technology company primarily in the United States. It provides location-based data and insights on consumer's real-world behavior and trends for use in marketing and research; and accurate and scaled solution for mobile data collection and analysis. The company was formerly known as Ace Marketing & Promotions, Inc., and changed its name to Mobiquity Technologies, Inc. in September 2013. Mobiquity Technologies was founded in 1998 and is headquartered in New York, New York. MTE HOLDINGS: Proposed Auction Sale of Assets Approved ------------------------------------------------------ MTE Holdings, LLC and affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a notice of their approved bidding procedures relating to the sale of substantially assets. On Sept. 11, 2020, the Debtors filed with the Court motion asking seeking, among other things, entry of an order: (i) approving the proposed bid procedures by which they will solicit and select the highest or otherwise best offer for sale(s) of their Assets and related contracts and other assets through one or more sale transactions; (ii) scheduling the auction of the Assets and the Sale Hearing; (iii) approving the form and manner of notice for sale of the Assets, the Auction, and the Sale Hearing; (iv) approving procedures for the assumption or assumption and assignment of the Executory Contracts; (v) authorizing the Sale Transaction(s) including, but not limited to, the assumption and assignment of the Desired Executory Contracts; and (vi) granting related relief. On Oct.14, 2020, the entered the Order Establishing Bid Procedures Relating to the Sale of the Debtors' Assets. The Debtors will offer for sale the Assets, including (i) the upstream oil and gas assets, including the operating water assets, and (ii) the greenfield water infrastructure business, in accordance with the Bid Procedures, through one or more Sale Transactions pursuant to a purchase agreement ("APA"). For the avoidance of doubt, any bidder who wishes to bid on the Assets can but is not required to separately bid for the Oil and Gas Assets and Greenfield Water Business Assets. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 6, 2020 at 5:00 p.m. (ET) b. Auction: The Auction, if required, will commence at 9:00 a.m. (ET) on Nov. 13, 2020 and will be held either in person at the New York office of Kasowitz Benson Torres LLP (or such other reasonable location as the Debtors may hereafter designate on reasonable notice) or remotely via Zoom (or employing other similar technologies), and of which the Debtors will notify the Auction Participants. c. Sale Hearing: Nov. 25, 2020 at 10:00 a.m. (ET) d. Sale Objection Deadline: Nov. 20, 2020 at 11:59 p.m. (ET) e. The sale will be free and clear of all liens, claims, interests, and encumbrances. The Debtors, in consultation with the Consultation Parties, are authorized to enter into one or more Stalking Horse Agreements with one or more Stalking Horse Bidders to establish a minimum bid at the Auction. In the event the Debtors, in consultation with the Consultation Parties, select a party to serve as Stalking Horse Bidder(s), upon such selection, the Debtors will ask Court approval of such Stalking Horse Bidder(s) and any bid protections. The Executory Contracts proposed to be assumed or assumed and assigned to the Successful Bidder(s) or its designee in connection with the Sale Transactions will be identified in the Notice of Desired Executory Contracts. About MTE Holdings MTE Holdings LLC is a privately held company in the oil and gas extraction business. MTE sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-12269) on Oct. 22, 2019. In the petition signed by its authorized representative, Mark A. Siffin, the Debtor disclosed assets of less than $50 billion and debts of $500 million. Judge Karen B. Owens has been assigned to the case. The Debtor tapped Kasowitz Benson Torres LLP as its bankruptcy counsel; Morris, Nichols, Arsht & Tunnell, LLP as its local counsel; Greenhill & Co., LLC, as financial advisor and investment banker; Ankura Consulting LLC, as chief restructuring officer; and Stretto as its claims and noticing agent. MY SIZE: Reports $1.7-Mil. Net Loss for Sept. 30 Quarter -------------------------------------------------------- My Size, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $1,674,000 on $88,000 of revenues for the three months ended Sept. 30, 2020, compared to a net loss of $1,350,000 on $6,000 of revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $4,983,000, total liabilities of $1,506,000, and $3,477,000 in total stockholders' equity. The Company said, "We expect to continue to generate losses and negative cash flows from operations for the foreseeable future and expect to need to obtain additional funds in the future. Based on the projected cash flows and cash balances as of September 30, 2020, management is of the opinion that our existing cash will be sufficient to fund operations until the end of second quarter 2021. As a result, there is substantial doubt about the Company's ability to continue as a going concern. However, we will need to raise additional capital, which may not be available on reasonable terms or at all." A copy of the Form 10-Q is available at: https://bit.ly/395y5ty My Size, Inc. develops unique measurement technologies based on algorithms with applications in a variety of areas, including the apparel e-commerce market, the courier services market and the Do It Yourself smartphone and tablet apps market. The technology is driven by proprietary algorithms which are able to calculate and record measurements in a variety of novel ways. The Company has two subsidiaries, My Size Israel 2014 Ltd. and Topspin Medical (Israel) Ltd., both of which are incorporated in Israel. The Company is based in Airport City, Israel. MYOS RENS: Posts $815,000 Net Loss for Quarter Ended Sept. 30 ------------------------------------------------------------- MYOS RENS Technology Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $815,000 on $485,000 of net revenues for the three months ended Sept. 30, 2020, compared to a net loss of $921,000 on $350,000 of net revenues for the same period in 2019. At Sept. 30, 2020, the Company had total assets of $3,281,000, total liabilities of $1,259,000, and $2,022,000 in total stockholders' equity. MYOS RENS said, "The Company has suffered recurring losses from operations and incurred a net loss of $2,452 thousand for the nine months ended September 30, 2020. The accumulated deficit as of September 30, 2020 was $41,777 thousand. The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that its operating expenses will continue to increase and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability. These conditions indicate that there is substantial doubt about the Company's ability to continue as a going concern within one year after the condensed consolidated financial statement issuance date." A copy of the Form 10-Q is available at: https://bit.ly/37dsu27 MYOS RENS Technology Inc. focuses on the discovery, development, and commercialization of nutritional ingredients, functional foods, and other technologies that enhance muscle health and performance. The company was formerly known as MYOS Corporation and changed its name to MYOS RENS Technology Inc. in March 2016. MYOS RENS Technology was founded in 2007 and is based in Cedar Knolls, New Jersey. NATURALSHRIMP INC: Incurs $590,000 Net Loss in Second Quarter ------------------------------------------------------------- NaturalShrimp Incorporated filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $589,879 on $0 of sales for the three months ended Sept. 30, 2020, compared to a net loss of $856,711 on $0 of sales for the three months ended Sept. 30, 2019. For the six months ended Sept. 30, 2020, the Company reported a net loss of $1.07 million on $0 of sales compared to a net loss of $1.65 million on $0 of sales for the same period a year ago. As of Sept. 30, 2020, the Company had $4.09 million in total assets, $4.31 million in total liabilities, and a total stockholders' deficit of $215,012. For the six months ended Sept. 30, 2020, the Company had a net loss available for common stockholders of approximately $2,394,000. At Sept. 30, 2020, the Company had an accumulated deficit of approximately $48,821,000 and a working capital deficit of approximately $3,088,000. The Company said these factors raise substantial doubt about its ability to continue as a going concern, within one year from the issuance date of this filing. NaturalShrimp said, "The Company's ability to continue as a going concern is dependent on its ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the six months ended Sept. 30, 2020, the Company received net cash proceeds of $2,500,000 from the sale of 2,500 Series B Preferred shares. Subsequent to Sept. 30, 2020, the Company received $250,000 from the sale of Series B Preferred shares. Management believes that private placements of equity capital and/or additional debt financing will be needed to fund the Company's long-term operating requirements. The Company may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of its current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. The Company continues to pursue external financing alternatives to improve its working capital position. If the Company is unable to obtain the necessary capital, the Company may have to cease operations." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1465470/000165495420012419/shmp_10q.htm About Natural Shrimp NaturalShrimp, Inc. is a publicly traded aqua-tech Company, headquartered in Dallas, with production facilities located near San Antonio, Texas. The Company has developed a commercially viable system for growing shrimp in enclosed, salt-water systems, using patented technology to produce fresh, never frozen, naturally grown shrimp, without the use of antibiotics or toxic chemicals. NaturalShrimp systems can be located anywhere in the world to produce gourmet-grade Pacific white shrimp. NaturalShrimp recorded a net loss of $4.81 million for the year ended March 31, 2020, compared to a net loss of $7.21 million for the year ended March 31, 2019. As of June 30, 2020, the Company had $3.08 million in total assets, $4.14 million in total liabilities, and a total stockholders' deficit of $1.06 million. Turner, Stone & Company, L.L.P., in Dallas, Texas, issued a "going concern" qualification in its report dated June 26, 2020, citing that Company has suffered significant losses from inception and has a significant working capital deficit. These conditions raise substantial doubt about its ability to continue as a going concern. NET ELEMENT: Posts $2.33 Million Net Loss in Third Quarter ---------------------------------------------------------- Net Element, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the Company's stockholders of $2.33 million on $16.73 million of total revenues for the three months ended Sept. 30, 2020, compared to a net loss attributable to the Company's stockholders of $1.01 million on $16.82 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 attributable to the Company's stockholders of $4.02 million on $46.29 million of total revenues compared to a net loss attributable to the Company's stockholders of $3.67 million on $48.35 million of total revenues for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $22.57 million in total assets, $19.71 million in total liabilities, and $2.86 million in total stockholders' equity. The Company has an accumulated deficit of approximately $182.8 million and a negative working capital of approximately $0.3 million at Sept. 30, 2020. Net Element said, "The continuing spread of the novel coronavirus pandemic ("COVID-19") is currently impacting countries, communities, supply chains and markets, global financial markets, as well as, the largest industry group serviced by our Company. The Company cannot predict, at this time, whether COVID-19 will continue to have a material impact on our future financial condition and results of operations due to understaffing in the service sector and the decrease in revenues and profits, particularly restaurants, and any possible future government ordinances that may further restrict restaurant and other service or retail sectors operations. Going Concern On Aug. 4, 2020, Net Element entered into an Agreement and Plan of Merger with Mullen Technologies, Inc., a California corporation, and Mullen Acquisition, Inc., a California corporation and wholly owned subsidiary of the Company ("Merger Sub"). Pursuant to, and on the terms and subject to the conditions of, the Merger Agreement, Merger Sub will be merged with and into Mullen, with Mullen continuing as the surviving corporation in the Merger. After Mullen's completion and delivery to the Company, of the audited financial statements for Mullen and its subsidiaries and affiliates required to be included in a registration statement, the Company intends to prepare and file with the Commission a registration statement on Form S-4 in which the proxy statement will be included as a part of the prospectus, in connection with the registration under the Securities Act of the shares of Parent Shares to be issued in connection with the transactions contemplated in the Merger Agreement. The Merger Agreement contains termination rights for each of the Company and Mullen, including, among others, (i) in the event that the Merger has not been consummated by Dec. 31, 2020, (ii) in the event that the requisite approval of the Company's stockholders is not obtained upon a vote thereon, (iii) in the event that any governmental authority shall have taken action to restrain, enjoin or prohibit the consummation of the Merger, which action shall have become final and non-appealable and (iv) in the event that there is a breach by the other party of any of its representations, warranties, covenants or agreements, which breach is sufficiently material and not timely cured or curable. In addition, Mullen may terminate the Merger Agreement if, prior to receipt of the requisite approval of the Company's stockholders, the Company's board of directors shall have changed their recommendation in respect of the Merger. Further, the Company may terminate the Merger Agreement prior to receipt of the requisite approval of the Company's stockholders to enter into a definitive agreement with respect to a Superior Proposal (as such term is defined in the Merger Agreement). As contemplated by the Merger Agreement, on Aug. 11, 2020, the Company's Company as lender, entered into an unsecured Promissory Note, dated Aug. 11, 2020, with Mullen. Pursuant to the Note, Mullen borrowed from the Company $500,000. Prior to maturity of the loan, the principal amount of the loan will carry an interest rate of 14% per annum compounded monthly and payable upon demand. This loan will mature on the earlier of (i) the date that the Merger Agreement is terminated for any reason by any party thereto and (ii) the Merger Effective Time. On Sept. 14, 2020, an advance of $141,000 which was previously borrowed by the Company from RBL, was sent to Mullen by the Company in connection with expenses incurred by the Company on behalf of Mullen. Subsequent to Sept. 30, 2020, the Company received $55,000 from Mullen, as a payment towards this advance. The Company said that onsummation of the Merger, the Divestiture, the Private Placement and the other transactions contemplated in the Merger Agreement, is subject to customary conditions including, among others, the approval of the Company's stockholders. There is no guarantee that the Merger, the Divestiture, the Private Placement or the other transactions contemplated in the Merger Agreement will be completed. These conditions 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/1499961/000143774920023901/nete20200930b_10q.htm About Net Element Headquartered in North Miami Beach, Florida, Net Element, Inc. (NASDAQ: NETE) -- http://www.NetElement.com/-- operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise ("SME") in the U.S. and selected emerging markets. In the U.S. it aims to grow transactional revenue by innovating SME productivity services using blockchain technology solutions and Aptito, its cloud-based, restaurant and retail point-of-sale solution. Internationally, Net Element's strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions. Net Element recorded a net loss attributable to the company's stockholders of $6.46 million for the year ended Dec. 31, 2019, compared to a net loss attributable to the company's stockholders of $4.94 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $21.68 million in total assets, $19.09 million in total liabilities, and $2.59 million in total stockholders' equity. Daszkal Bolton LLP, in Fort Lauderdale, Florida, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has sustained recurring losses from operations and has working capital and accumulated deficits that raise substantial doubt about its ability to continue as a going concern. NORBORD INC: S&P Puts BB ICR on Watch Positive on West Fraser Deal ------------------------------------------------------------------ S&P Global Ratings placed its 'BB' issuer credit rating on Toronto-based oriented strand board (OSB) producer Norbord Inc. and its 'BB+' issue-level rating on the company's secured debt on CreditWatch with positive implications. The '2' recovery rating on the debt, reflecting substantial (70%-90%; rounded estimate: 75%) recovery, is unchanged. The CreditWatch placement follows Vancouver-based West Fraser Timber Co. Ltd.'s announcement that it plans to acquire all of the common shares of Norbord Inc. in an all-share transaction. Norbord shareholders will receive 0.675 of a West Fraser share for each Norbord share, which represents a 13.6% premium to the latest closing price of Norbord's shares. On closing, current West Fraser shareholders will own 56% of the company, with current Norbord shareholders owning 44%. CreditWatch S&P plans to resolve the CreditWatch following the close of the transaction, at which time it would raise the issuer credit rating on Norbord in line with that on West Fraser. It also expects to align issue-level rating on Norbord's senior secured notes with the rating on West Fraser's secured debt. However, more details regarding the resulting debt structure are still required. NORTHERN OIL: S&P Lowers ICR to 'SD' on Below-Par Debt Exchanges ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S. based exploration and production (E&P) company Northern Oil and Gas Inc. to 'SD' (selective default) from 'CCC+'. At the same time, S&P lowered its issue-level rating on the company's secured notes due 2023 to 'D' from 'B'. S&P expects to reassess its issuer credit rating on Northern Oil and Gas in the near term, while it could keep the issue-level rating on the company's secured notes at 'D' until it views the chance of future exchanges as remote. The downgrade reflects the company's recently disclosed debt exchanges, which cumulatively over the past few quarters represent a meaningful amount of the original principal. Since the beginning of 2020, secured debtholders have received 95% of par, on average, in the form of cash, preferred stock, and common equity for $130 million of secured notes due 2023. Accordingly, S&P views these cumulative exchanges as a selective default because investors received less than they were originally promised under the notes without adequate compensation. In addition, Northern Oil and Gas's liquidity remains tight and it faces a 2023 maturity wall. NORTHWEST BIOTHERAPEUTICS: Has $58M Net Loss for June 30 Quarter ---------------------------------------------------------------- Northwest Biotherapeutics, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $57,952,000 on $2,000 of total revenues for the three months ended June 30, 2020, compared to a net income of $219,000 on $581,000 of total revenues for the same period in 2019. At June 30, 2020, the Company had total assets of $14,906,000, total liabilities of $96,223,000, and $81,317,000 in total stockholders' deficit. The Company said that there is substantial doubt about its ability to continue as a going concern within one year from the date of the Form 10-Q filing, citing recurring operating losses and operating cash flow deficits. A copy of the Form 10-Q is available at: https://bit.ly/3nR5jkv Northwest Biotherapeutics, Inc., is focused on developing personalized immunotherapy products to treat cancers in the United States and Europe. The Company has a broad platform technology for DCVax dendritic cell-based vaccines. The Company is headquartered in Bethesda, Maryland. NS8 INC: Dec. 10 Auction of Substantially All Assets ---------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized NS8, Inc.'s bidding procedures relating to the auction sale of substantially all assets. The salient terms of the Bidding Procedures are: a. Bid Deadline: Dec. 7, 2020, at 5:00 p.m. (ET) b. Initial Bid: The Bid is not subject to any bidding, break-up fee, termination fee, transaction fee, expenses reimbursement or any similar type of reimbursement and does not include a waiver of any substantial contribution administrative expense claim related to bidding for the Assets. c. Deposit: 10% of the cash consideration of the Bid d. Auction: If at least two Qualified Bids are received by the Bid Deadline with regard to any particular Assets, the Debtor will conduct the Auction. The Auction will take place virtually on Dec. 10, 2020, starting at 9:00 a.m. (ET) or such other time as the Debtor, with the consent of the DIP Agent and DIP Lenders, will designate and notify to all Qualified Bidders. Professionals and principals for the Debtor, each Qualified Bidder (including, its representative(s), if any), each of the Consultation Parties, and any creditor of the Debtor that has provided notice in writing of its intent to observe the Auction at least one day prior to the start of the Auction will be able to attend and observe the Auction, along with any other parties the Debtor deems appropriate, through a Zoom link that the Debtor will distribute to all such parties prior to the commencement of the Auction. e. Bid Increments: Each Subsequent Bid at the Auction will provide net value to the estates in an amount to be announced at or prior the Auction over the Starting Bid or the Leading Bid, as the case may be, as determined by the Debtor. f. Sale Hearing: Dec. 14, 2020, at 1:00 p.m. (ET) g. Sale Objection Deadline: Dec. 7, 2020 at 4:00 p.m. (ET) h. Closing: Dec. 15, 2020 The Debtor will file a form of Sale Order no later than 14 days before the Sale Hearing. Within three business days of the entry of the Order, the Debtor will file an Assumption and Assignment Notice. Objections to (y) the Cure Costs set forth in the Cure Schedule or (z) the assumption and assignment of any Assumed Contracts identified in the Cure Schedule must be be filed with the Court, and be served on the Notice Parties so as to be actually received by no later than 4:00 p.m. (ET) on the date that is 14 days from the date of service of the Assumption and Assignment Notice. The Assumption/Assignment Hearing is set for Dec. 14, 2020 at 1:00 p.m. (ET). The form of the Sale Notice and the Assumption and Assignment Notice are approved and appropriate and sufficient for all purposes and no other or further notice will be required. Notwithstanding any applicability of Bankruptcy Rule 6004(h), 6006(d), 7052 or9014, the Order will be immediately effective and enforceable upon its entry. All time periods set forth in the Order will be calculated in accordance with Bankruptcy Rule 9006(a). A copy of the Bidding Procedures is available at https://tinyurl.com/y67lmntc from PacerMonitor.com free of charge. About NS8 Inc. Las Vegas-based NS8 Inc. -- https://www.ns8.com/ -- is a developer of a comprehensive fraud prevention platform that combines behavioral analytics, real-time scoring, and global monitoring to help businesses minimize risk. NS8 Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 20-12702) on Oct. 27, 2020. The petition was signed by Daniel P. Wikel, the chief restructuring officer. The Debtor was estimated to have $10 million to $50 million in assets and $100 million to $500 million in liabilities. The Hon. Christopher S. Sontchi is the case judge. The Debtor tapped BLANK ROME LLP and COOLEY LLP as counsel; and FTI CONSULTING, INC. as financial advisor. STRETTO is the claims agent. NS8 INC: U.S. Trustee Unable to Appoint Committee ------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of NS8 Inc. About NS8 Inc. Las Vegas-based NS8 Inc. is a developer of a comprehensive fraud prevention platform that combines behavioral analytics, real-time scoring, and global monitoring to help businesses minimize risk. Visit https://www.ns8.com for more information. NS8 sought Chapter 11 protection (Bankr. D. Del. Case No. 20-12702) on Oct. 27, 2020. The petition was signed by Daniel P. Wikel, the chief restructuring officer. The Debtor was estimated to have $10 million to $50 million in assets and $100 million to $500 million in liabilities. The Hon. Christopher S. Sontchi is the case judge. The Debtor tapped Blank Rome LLP and Cooley LLP as its legal counsel, and FTI Consulting Inc. as its financial advisor. Stretto is the claims agent. ONE AVIATION: AML Global Buying All Assets for $5.25 Million ------------------------------------------------------------ ONE Aviation Corp. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize their Asset Purchase Agreement with AML Global Eclipse, LLC in connection with the private sale of all assets or $5.25 million, subject to certain adjustments. Once more, the Debtors have been forced to adapt their restructuring strategy due to the failure of a transaction counterparty to perform its obligations. Just two months ago, the Debtors were asking the Court's approval with respect to a proposed sale and financing transaction ("August 2020 Transaction") that was intended to revive their restructuring efforts following the failure by the Debtors’ prior plan proponent and lender, Citiking International US, LLC, to fulfill its obligations under the prior confirmed chapter 11 plan. Unfortunately, the proposed purchaser in the August 2020 Transaction, SEF OA, LLC ("SE Falcon") failed to fulfill its funding and other obligations under its sale and financing agreements with the Debtors and, accordingly, the Debtors were forced to terminate those agreements and, yet again, they found themselves pursuing an alternative transaction for the benefit of their estates. To avoid a value-destructive conversion to chapter 7 and liquidation of their assets, the Debtors have continued to market their assets to potential purchasers, despite the significant challenges imposed by the prior failures of Citiking and SE Falcon. As a result of these efforts, the Debtors are pleased to be able to present to the Court a sale transaction that they believe will maximize the value of their estates for the benefit of all stakeholders. Accordingly, the Debtors ask that the Court approves the sale transaction. The Debtors and the Buyer have agreed to the terms of the Sale set forth in the Purchase Agreement, which is subject to higher and better offers and the Court's approval. The salient terms of the Agreement are: a. Buyer: AML Global Eclipse, LLC b. Credit Bid/Consideration: The aggregate consideration for the sale and transfer of the Purchased Assets is $5.25 million, subject to certain adjustments in accordance with the Purchase Agreement. c. Assets: The Buyer agrees to purchase, acquire, and accept all of the Debtors' right, title, and interest in the Purchased Assets. In addition, the Buyer will assume and pay, perform, and discharge the Assumed Liabilities. d. The Debtors are asking approval of a private sale without an auction process. The Purchase Agreement does not limit shopping of the Purchased Assets. e. Closing: Oct. 30, 2020 f. Use of Proceeds: The cash proceeds from the Sale will be used to pay Administrative Expense Claims and other amounts related to the Debtors' estates and/or make distributions pursuant to order of the Court. Pursuant to the Motion, the Debtors intend to transfer the Purchased Assets to the Buyer and wind down their operations. g. Record Retention Prior to the Closing, the Debtors will provide the Buyer with reasonable access to business records, and, after the Closing, the Buyer will provide the Debtors with reasonable access to business records. h. The sale of the Purchased Assets and the assignment of the Assigned Contracts will be free and clear of any and all Liens (other than the Permitted Encumbrances that the Buyer has agreed to assume). i. The Sale Order will provide for a waiver of the 14-day stay thereof, arising under Bankruptcy Rules 6004(h) and 6006(d), including the parties’ ability to close the Sale and assign the Assigned Contracts in connection therewith. The Debtors intend to provide the Sale Notice upon the Notice Parties. In light of the prior notices that were provided in connection with the August 2020 Transaction, the Debtors believe that such notice is appropriate under the circumstances. The Debtors intend to provide notice to non-Debtor counterparties the Assumption and Assignment Notice. To implement the foregoing successfully, the Debtors ask a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the 14-day stay of an order authorizing the use, sale, or lease of property under Bankruptcy Rule 6004(h). A copy of the Agreement is available at https://tinyurl.com/y5toekhr from PacerMonitor.com free of charge. About ONE Aviation Headquartered in Albuquerque, New Mexico, ONE Aviation Corporation -- http://www.oneaviation.aero-- and its subsidiaries are original equipment manufacturers of twin-engine light jet aircraft. Primarily serving the owner/operator, corporate, and aircraft charter markets, the Debtors are on the forefront of private aviation technology. The Debtors provide maintenance and upgrade services for their existing fleet of aircraft through two Company-owned Platinum Service Centers in Albuquerque, New Mexico and Aurora, Illinois, five licensed, global Gold Service Centers in locations including San Diego, California, Boca Raton, Florida, Friedrichshafen, Germany, Eelde, Netherlands, and Istanbul, Turkey, as well as a research and development center located in Superior, Wisconsin. The Debtors currently employ 64 individuals. ONE Aviation and its affiliates filed for chapter 11 bankruptcy protection (Bankr. D. Del. Case. Nos. 18-12309 - 18-12320) on Oct. 9, 2018, listing its estimated assets at $10 million to $50 million and estimated liabilities at $100 million to $500 million. The petition was signed by Alan Klapmeier, CEO. The Debtors tapped Paul Hastings LLP as their bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel of Paul Hastings; Ernst & Young LLP as financial advisor; Duff & Phelps Securities, LLC as investment banker; and Epiq Corporate Restructuring, LLC as its claims and noticing agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Oct. 22, 2018. The committee tapped Lowenstein Sandler LLP as its legal counsel; Landis Rath & Cobb LLP as the firm's co-counsel; and Conway MacKenzie, Inc. as financial advisor. PPD INC: S&P Upgrades ICR to 'BB-'; Outlook Stable -------------------------------------------------- S&P Global Ratings raised all of its ratings on U.S.-Based PPD Inc., including its issuer credit rating, to 'BB-' from 'B+'. PPD Inc. has reduced its leverage below 5.5x and S&P believes it will continue to deleverage over the next year. The one-notch upgrade primarily reflects the company's deleveraging through strong year-to-date EBITDA growth as well as management's public statements about its future deleveraging goals. Recall at the time of the IPO in February 2020, a key concern was the financial policy, especially given the large stock ownership by financial sponsors (nearly 80% immediately following the IPO). According to the company's definition, its net leverage was 4.17x for the 12 months ended Sept. 30, 2020 (down about 0.5x since the IPO). Importantly, PPD's management has publicly stated that it plans to further reduce its net leverage (as it defines it) to the 3x area in 2021. S&P said, "We do not net the company's cash against its debt when calculating its leverage, thus our measure of its gross leverage declined by roughly 0.3x to 5.29x since the IPO in February 2020. We expect PPD's leverage to continue to decline and be comfortably below 5x in 2021." Importantly, the company has achieved this deleveraging despite the COVID-19 pandemic. PPD's strong positioning in vaccine trials and laboratory business have allowed it to increase its revenue and EBITDA year over year while many of its peers reported modest declines. In addition, the company has not repurchased its shares since the IPO even after its financial sponsors sold 43.7 million shares in September 2020. S&P said, "PPD's short track record as a publicly-traded company and still significant financial-sponsor ownership limit our rating. While we fully expect PPD to reduce its S&P-adjusted leverage well into the 4x range in 2021 through increased EBITDA, we note that it has a limited track record of reducing its leverage as a public company. Its financial-sponsor ownership is also still very high (approximately 67%), which could lead PPD to allocate more capital for share repurchases or acquisitions that would slow its pace of deleveraging." "In our base-case scenario, we assume PPD deploys some capital each year for tuck-in acquisitions and/or share repurchases. We further expect M&A activity to increase in 2021, for the CRO industry as a whole, as the COVID-19 pandemic not only demonstrates the resiliency of the industry, but also accelerated the adoption of some trends such as virtual trials and remote monitoring." PPD will likely benefit from favorable industry dynamics. S&P believes large, global CROs like PPD will continue to benefit from increases in trial complexity and outsourcing penetration and a modest expansion in pharmaceutical research and development (R&D) spending. The CRO industry is very fragmented and dominated by a small number of large, full-service global CROs in addition to several hundred smaller providers that compete for more specialty services. S&P thinks PPD will continue to benefit from the industry's favorable growth prospects and estimate that the CRO industry will expand by the mid- to high-single-digit percent range on a normalized basis fueled by the healthy biotech funding environment and increased outsourcing trends. CROs are exposed to cancellation risk as well as scrutiny regarding drug pricing. Cancellation risk is a major concern for all CROs. PPD is exposed to contract cancellation due to external factors like customer consolidation or pipeline rationalizations that are beyond the company's control. Most CRO contracts can be terminated by the customers upon 30-90 days' notice. It is common for CROs to have customer concentration — PPD's top customer generated less than 10% of total revenue in 2019 – a profile that S&P views as largely consistent with other CROs. The stable outlook reflects S&P's expectation that PPD will continue to increase its revenue and reduce its leverage in 2021. S&P said, "We would consider lowering our rating on PPD if management engages in large-scale share repurchases or acquisitions that increase its leverage back above 5.5x. This would lead us to conclude that its financial policy is more aggressive than we previously expected. We estimate that the company has $2.3 billion of capacity for share repurchases and acquisitions." "We would consider raising our rating on PPD in the next 12 months if we gain more confidence that management will balance shareholder-friendly activities with maintaining leverage of generally below 4.5x over the long term." PREMIER ON 5TH: $562K Sale of All Assets to Avant Garde Approved ---------------------------------------------------------------- Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida authorized Premier on 5th, LLC's sale of substantially all assets to Avant Garde Design Group, Inc. or its assigns for $562,240, which includes the high bid in the amount of $502,000 plus the buyer's premium of 12% of the purchase price equal to $60,240, on the terms of their Purchase Agreement. From the closing proceeds, the closing agent will disburse the Buyer's premium in the amount of $60,240 to the Auctioneer, Tranzon Driggers and will further pay in full the secured claim filed by Rubin Peacock. The Sale of the Property is free and clear of all Encumbrances, but in all other respects will be "as is, where is," without representations, recourse, or warranty of any kind. Any Encumbrances will attach exclusively to the proceeds of the Sale with the same priority, validity, force and effect that it had before the Sale. The Debtor will be entitled to any and all rights and benefits that may be afforded to them by Section 1146(a) of the Bankruptcy Code. Upon entry of the Order, the counsel for the Debtor will serve a copy of the Order upon all parties served with the Motion and thereafter file a certificate of service with the Court. The Court registers Rubin Peacock as the Backup Bidder. If the Backup Bidder becomes the purchaser of the Property, it will have all the protections afforded the Purchaser under the Order. In the event that the closing to transfer the Property to the Purchaser does not occur within 28 days from the date of the Order, the Debtor is authorized to transfer the Property to the Backup Bidder, Rubin Peacock. After payment of standard closing costs and disbursement of the sales proceeds as outlined, the remaining Sale proceeds will be held in an escrow account by the counsel of the Debtor, pending further order of the Court. The 14-day stay period set forth in Rule 6004(h) of the Federal Rules of Bankruptcy Procedure is waived, for good cause shown, and the Order will be immediately enforceable, and the closing of the sale of the Property may occur immediately following the entry of the Order. A copy of the Agreement is available at https://tinyurl.com/y62lqjl9 from PacerMonitor.com free of charge. About Premier on 5th, LLC Premier on 5th, LLC, owns in fee simple a real property in Sarasota, Fla. Premier on 5th sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-12098) on Dec. 27, 2019. At the time of the filing, the Debtor disclosed $1,195,000 in assets and $494,132 in liabilities. Timothy W. Gensmer, P.A., is the Debtor's legal counsel. PROFESSIONAL INVESTORS 22: Involuntary Chapter 11 Case Summary -------------------------------------------------------------- Alleged Debtor: Professional Investors 22, LLC 350 Ignacio Blvd. Suite 300 Novato, CA 94949 Type of Business: Professional Investors 22, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Involuntary Chapter 11 Petition Date: November 19, 2020 Court: United States Bankruptcy Court Northern District of California Case Number: 20-30922 Name of Petitioner: Professional Financial Investors, Inc. 350 Ignacio Blvd., Suite 300 Novato, CA 94949 Nature of Claim & Claim Amount: Intercompany Loan, $92,000 Petitioner's Counsel: Ori Katz, Esq. Barret J. Marum, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Franciso, CA 94111 Tel: 415-434-9100 Email: okatz@sheppardmullin.com/ bmarum@sheppardmullin.com A copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FEXMU7Y/Professional_Investors_22_LLC__canbke-20-30922__0001.0.pdf?mcid=tGE4TAMA PROFESSIONAL INVESTORS 26: Involuntary Chapter 11 Case Summary -------------------------------------------------------------- Alleged Debtor: Professional Investors 26, LLC 350 Ignacio Blvd. Suite 300 Novato, CA 94949 Type of Business: Professional Investors 26, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Involuntary Chapter 11 Petition Date: November 20, 2020 Court: United States Bankruptcy Court Northern District of California Case Number: 20-30927 Name of Petitioner: Professional Financial Investors, Inc. 350 Ignacio Blvd., Suite 300 Novato, CA 94949 Nature of Claim & Claim Amount: Intercompany Loan, $731,429 Petitioner's Counsel: Ori Katz, Esq. Barret J. Marum, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Franciso, CA 94111 Tel: 415-434-9100 Email: okatz@sheppardmullin.com bmarum@sheppardmullin.com A copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MAQL3VI/Professional_Investors_26_LLC__canbke-20-30927__0001.0.pdf?mcid=tGE4TAMA PROFESSIONAL INVESTORS 27: Involuntary Chapter 11 Case Summary -------------------------------------------------------------- Alleged Debtor: Professional Investors 27, LLC 350 Ignacio Blvd. Suite 300 Novato, CA 94949 Type of Business: Professional Investors 27, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Involuntary Chapter 11 Petition Date: November 20, 2020 Court: United States Bankruptcy Court Northern District of California Case Number: 20-30928 Name of Petitioner: Professional Financial Investors, Inc. 350 Ignacio Blvd., Suite 300 Novato, CA 94949 Nature of Claim & Claim Amount: Intercompany Loan, $5,286,167 Petitioner's Counsel: Ori Katz, Esq. Barret J. Marum, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Franciso, CA 94111 Tel: 415-434-9100 Email: okatz@sheppardmullin.com bmarum@sheppardmullin.com A copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MOBPYMQ/Professional_Investors_27_LLC__canbke-20-30928__0001.0.pdf?mcid=tGE4TAMA PROFESSIONAL INVESTORS 29: Involuntary Chapter 11 Case Summary -------------------------------------------------------------- Alleged Debtor: Professional Investors 29, LLC 350 Ignacio Blvd. Suite 300 Novato, CA 94949 Type of Business: Professional Investors 29, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Involuntary Chapter 11 Petition Date: November 20, 2020 Court: United States Bankruptcy Court Northern District of California Case Number: 20-30929 Name of Petitioner: Professional Financial Investors, Inc. 350 Ignacio Blvd., Suite 300 Novato, CA 94949 Nature of Claim & Claim Amount: Intercompany Loan, $168,000 Petitioner's Counsel: Ori Katz, Esq. Barret J. Marum, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Franciso, CA 94111 Tel: 415-434-9100 Email: okatz@sheppardmullin.com bmarum@sheppardmullin.com A copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MJWI5QA/Professional_Investors_29_LLC__canbke-20-30929__0001.0.pdf?mcid=tGE4TAMA PROFESSIONAL INVESTORS 37: Involuntary Chapter 11 Case Summary -------------------------------------------------------------- Alleged Debtor: Professional Investors 37, LLC 350 Ignacio Blvd. Suite 300 Novato, CA 94949 Type of Business: Professional Investors 37, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Involuntary Chapter 11 Petition Date: November 20, 2020 Court: United States Bankruptcy Court Northern District of California Case Number: 20-30939 Name of Petitioner: Professional Financial Investors, Inc. 350 Ignacio Blvd., Suite 300 Novato, CA 94949 Nature of Claim & Claim Amount: Intercompany Loan, $353,000 Petitioner's Counsel: Ori Katz, Esq. Barret J. Marum, Esq. SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Franciso, CA 94111 Tel: 415-434-9100 Email: okatz@sheppardmullin.com bmarum@sheppardmullin.com A copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KRQ4CKY/Professional_Investors_37_LLC__canbke-20-30939__0001.0.pdf?mcid=tGE4TAMA QUEST PATENT: Posts $49,615 Net Income in Third Quarter ------------------------------------------------------- Quest Patent Research Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $49,615 on $3.40 million of revenues for the three months ended Sept. 30, 2020, compared to a net loss of $144,534 on $640,000 of revenues for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $1 million on $5.49 million of revenues compared to a net loss of $1.18 million on $2.03 million of revenues for the same period in 2019. As of Sept. 30, 2020, the Company had $4.29 million in total assets, $10.83 million in total liabilities, and a total deficit of $6.53 million. the Company has an accumulated deficit of approximately $20,974,000 and negative working capital of approximately $7,520,000 as of Sept. 30, 2020. Quest Patent said, "Because of our continuing losses, our working capital deficiency, the uncertainty of future revenue, our obligations to Intellectual Ventures and Intelligent Partners, as transferee of United Wireless, our low stock price and the absence of a trading market in our common stock, our ability to raise funds in equity market or from lenders is severely impaired. These conditions together with the effects of the COVID-19 pandemic and the steps taken by the state to slow the spread of the virus and its effects on our business raise substantial doubt as to our ability to continue as a going concern. Although we may seek to raise funds and to obtain third party funding for litigation to enforce our intellectual property rights, the availability of such funds, particularly in view of the COVID-19 pandemic, is uncertain. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. We are in default on payment of principal and interest on our convertible notes due September 30, 2020 in the principal amount of $4,672,812. Accrued interest on the notes was $117,780. We obtained a standstill agreement of the noteholder until November 13, 2020. In connection with the standstill agreement, we paid the $117,780 interest accrued at September 30, 2020, and, in connection with an extension of the standstill to November 13, 2020, we paid additional interest through the standstill period of $20,000. Although we are in negotiation with the noteholder with respect to a restructure of the note and other payment agreements between the noteholder and us, we can give no assurance that the negotiations will result in a revised agreement. Our failure to negotiate an acceptable restructure of the agreement could materially and adversely affect our ability to continue in business and it may be necessary to seek protection under the Bankruptcy Act. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/824416/000121390020037387/f10q0920_questpatentresearch.htm About Quest Patent Quest Patent Research Corporation -- http://www.qprc.com/-- is an intellectual property asset management company. The Company's principal operations include the development, acquisition, licensing and enforcement of intellectual property rights that are either owned or controlled by the Company or one of its wholly owned subsidiaries. The Company currently owns, controls or manages eleven intellectual property portfolios, which principally consist of patent rights. Quest Patent reported a net loss attributable to the Company of $1.31 million for the year ended Dec. 31, 2019, compared to a net loss attributable to the company of $2.11 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $3.35 million in total assets, $10.26 million in total liabilities, and a total stockholders' deficit of $6.90 million. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2013, issued a "going concern" qualification in its report dated March 27, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. RAILWORKS LLC: Moody's Assigns B1 CFR, Outlook Stable ----------------------------------------------------- Moody's Investors Service assigned a B1 corporate family rating, a B1-PD probability of default rating and a B1 senior secured rating to RailWorks LLC, a provider of construction and maintenance services to rail infrastructure systems in North America. RailWorks plans to arrange a $50 million revolving credit facility and a $230 million term loan, primarily to refinance its existing indebtedness and to fund an $80 million dividend. The rating outlook is stable. The B1 CFR balances the company's leading market position, relatively stable end-markets and moderate financial leverage, as well as the risks stemming from fixed-price contracts and potential fluctuations in cash flows due to project delays and joint venture arrangements. RATINGS RATIONALE RailWorks is a leading provider of construction and maintenance services for rail infrastructure systems in North America. Benefiting from well-established relationships in the New York, Toronto and Los Angeles transit markets, the company derives a majority of revenues from transit customers, and the remainder from rail freight and industrial customers. Moody's considers the market for rail infrastructure services relatively stable, given the essentiality of maintenance and rehabilitation services and the committed funding arrangements of expansion projects by transit systems. Nonetheless, the fall in ridership during the coronavirus pandemic causes considerable budgetary constraints at transit agencies, increasing the risk of project deferrals. Moody's expects operating margins to remain at approximately 7% in the next 12 to 18 months, subject to the risk that RailWorks effectively bids for and executes fixed-price contracts. Financial leverage is moderate. Adjusted debt/EBITDA will be slightly above 4 times in 2021, according to Moody's projections, which includes an estimated debt adjustment of $165 million in connection with RailWorks' participation in multiemployer pension plans. Liquidity is adequate. Still, cash flows can fluctuate meaningfully at times due to project delays and deferred cash receipts from projects structured through joint venture arrangements with other contractors. Moody's expects free cash flow in 2021 to be about break-even, before increasing considerably in 2022 when RailWorks expects substantial distributions from project joint ventures. Cash and committed revolver availability of around $100 million in aggregate can help manage cash fluctuations, if needed. The B1 senior secured rating reflects the very sizeable proportion of the capital structure that the planned $50 million revolving credit facility and $230 million secured term loan will represent, each of which will be secured with substantially all of the company's assets. In its Loss Given Default ("LGD") analysis, Moody's included an estimated $165 million of unsecured multiemployer pension plan liabilities but applied an override to the LGD model outcome because Moody's does not expect that these liabilities will increase the recovery of secured debt in a bankruptcy and the capital structure will likely change if business conditions weaken. Preliminary terms and conditions indicate that the senior secured revolving credit facility will have a maximum total net leverage ratio with step-downs after the initial year. In addition, RailWorks can add incremental facilities in an aggregate amount not to exceed the greater of $50 million and 50% of EBITDA, plus, among others, an unlimited amount subject to an agreed-upon maximum first lien net leverage ratio and maximum total net leverage ratio, calculated on a pro forma basis. The credit agreement permits collateral leakage through transfers of assets to unrestricted subsidiaries, subject to blocker protections that limit the percentage of total assets and EBITDA of such unrestricted subsidiaries, as well as prohibiting such unrestricted subsidiaries from owning any material license, material IP or any other property necessary in the operation of the business. Only wholly-owned domestic subsidiaries must provide guarantees; partial dividend of ownership interest could jeopardize guarantees. All of the net cash proceeds from the non-ordinary course sale of assets will be applied to prepay the term loan, subject to reinvestment rights. Final terms and conditions of the secured credit facilities can differ materially from the preliminary terms and conditions. The stable ratings outlook reflects Moody's expectation of robust revenue growth, stable operating margins and prospects of substantially improving cash flows after 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if RailWorks increases its scale through consistent contract wins, widens its operating margins to the upper single-digit level while maintaining debt/EBITDA of less than 3.5 times. Additional considerations for an upgrade include improved liquidity and a demonstrated ability to manage fluctuations in cash flows more effectively such that free cash flow including joint venture distributions is at least $50 million per annum. The ratings could be downgraded if Moody's expects that operating margins decrease to 5% or less, possibly due to an inability to effectively bid for and execute fixed price contracts or a major project deferral, debt/EBITDA approaches 5 times, or that prospects for a substantial increase in free cash flow including joint venture distributions diminish. The ratings could also be pressured if the cash balance and committed revolver availability decrease to less than $85 million in aggregate. The following rating actions were taken: Assignments: Issuer: RailWorks LLC Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured Bank Credit Facility, Assigned B1 (LGD4) Outlook Actions: Issuer: RailWorks LLC Outlook, Assigned Stable RailWorks LLC is a leading provider of construction and maintenance services to transit, freight and industrial rail infrastructure systems in North America. RailWorks LLC is a subsidiary of RailWorks Corporation, owned by Wind Point Partners. Revenues for the last 12 months ended June 30, 2020 were approximately $940 million. The principal methodology used in these ratings was Construction Industry published in March 2017. RALPH M. BONHAM: WSC Buying 9.5K WSC Shares for $250K ----------------------------------------------------- Ralph M. Bonham asks the U.S. Bankruptcy Court for the District of Colorado to authorize the sale of his 9,500 shares of Whitlock Service Corp. ("WSC") to WSC for $250,000. Mr. Bonham owns the Stock. The shares owned by Mr. Bonham equal 95% of the equity in WSC. The remaining 500 shares and 5% equity are owned by Mr. Bonham's granddaughter Emily Bonham. WSC owns 100% of H.E. Whitlock, Inc. ("HEW"). HEW is one of the oldest operating general contracting companies in the state of Colorado, with business operations commencing in 1892. It is a family owned and run business. The president of the company is Emily Bonham. Mr. Bonham started working at HEW in 1969 as a laborer. Over the years, he worked his way up to owning the company. HEW is one of the most reputable general contractors in the state, having completed hundreds of projects. However, its continued survival has been greatly compromised by the chapter 11 case. Most of HEW's projects require bonding. As the 95% owner of HEW (through WSC), bonding companies historically relied upon HEW's and Mr. Bonham's financial condition in determining whether to issue bonds. After Mr. Bonham's chapter 11 bankruptcy filing, bonding companies would not issue bonds going forward because of Mr. Bonham's bankruptcy filing and HEW's current financial condition. To both preserve HEW as a going concern and generate cash for the estate, on Nov. 15, 2019, Mr. Bonham filed a motion asking authorization to sell his 95% interest in the company to its president Emily Bonham for the sale price of $811,000. The Special Conservator of the Estate of Robert D. Buchanan objected to the sale motion primarily based upon the contention that the sale price was too low. On Jan. 10, 2020, after much consideration, Mr. Bonham elected to withdraw the initial sale motion rather than incur the substantial expense of litigating the matter through an evidentiary hearing teed-up by the Conservator's objection to the sale. Unfortunately, in the nine months since that withdrawal, circumstances have made further postponement of the sale impossible. Because of delays in the appeal of the underlying state-court judgment obtained by the Conservator as well as the Conservator's interference with Mr. Bonham's divorce proceeding, there remain multiple unresolved contingencies preventing the submission of a plan. More critically, the predictions of HEW's slide were proven true. HEW has continued to operate on a shoestring throughout 2020 but the inability to bond has greatly threatened its income stream and decimated its value. Even if the company is able to survive its connections with Mr. Bonham as owner, it will likely be faced with terminating his employment to further cut costs. That result would be disastrous for Mr. Bonham and his creditors. Anticipating the possibility of a renewed sale proposal, HEW engaged another appraiser during the summer of 2020 to value Mr. Bonham's equity interest in WSC. The value Mr. Bonham's equity in the company is now a small fraction of the pre-Petition Date $811,000 valuation contested by the Conservator. Nevertheless, WSC is prepared to redeem Mr. Bonham's stock at a price substantially higher than market value, pursuant to a transaction that benefits all creditors. Subject to Court approval, Mr. Bonham, WSC and HEW have agreed to the following terms in connection with the sale of Mr. Bonham's stock interest in WSC: a. Pursuant to a Stock Redemption Agreement, WSC will pay $250,000 to redeem Mr. Bonham's 9,500 shares of WSC stock paid as follows: i. $60,000 paid one business day after entry of a final and nonappealable order approving the sale; ii. $190,000 paid pursuant to a promissory note, which note will accrue interest at the rate of 5% per annum and be payable in monthly installment payments of $3,958 until paid in full; b. HEW will enter an employment agreement with Mr. Bonham providing for two years' employment at the annual base salary of $140,000, use of an HEW-owned vehicle, and the right to participate in all medical, dental, and similar plans made available to HEW management; c. The salary due Mr. Bonham under the employment agreement will be owed regardless of whether his employment is terminated prior to the expiration of the two-year period and will be paid to his heirs if the termination results from his death; and, d. HEW will reimburse Mr. Bonham his reasonable attorneys' fees incurred in in connection with the sale transaction. Mr. Bonham sasks authority to sell the WSC stock to WSC on the terms and conditions set forth in the Agreements. The WS Stock is owned free and clear of liens, claims and interests. Finally, Mr. Bonham asks the Court to suspend the operation of the 14-day stay under Fed.R.Bankr.P. 6004(h) and 6006(g). A copy of the Agreements and the Appraisal is available at https://tinyurl.com/y2hxvqyr from PacerMonitor.com free of charge. Ralph M. Bonham sought Chapter 11 protection (Bankr. D. Colo. Case No. 19-18679) on Oct. 7, 2019. The Debtor tapped David Wadsworth, Esq., at Wadsworth Garber Warner Conrardy, P.C. as counsel. RICHARD C. ANGINO: Servant's Buying Harrisburg Property for $129K ----------------------------------------------------------------- Richard C. Angino and Alice K. Angino ask the U.S. Bankruptcy Court for the Middle District of Pennsylvania to authorize the sale of the real estate located at and known as 2040 Fishing Creek Valley Road, Harrisburg, Dauphin County, Pennsylvania to Servant's Oasis for $1.6 million, subject to various costs of sale. The Debtors have entered into an Agreement of Sale with the Buyer for the sale of the Real Property. The Agreement was obtained through the efforts of the real estate broker, Howard Hanna Company - Harrisburg. The sale is not subject to any financing contingencies. The sale is subject to a 15-day due diligence period. The Debtors are selling the Real Property free and clear of any lien, claim, encumbrance, or interest so long as all secured liens attach to the sale proceeds. The Debtors have been actively marketing the Real Property for a considerable period of time to various parties for sale. The Real Property has been listed for sale with Howard Hanna. It is believed that the consideration payable under Agreement is fair and reasonable. The Real Property may be subject to the following liens of record: a. A mortgage lien granted by the Debtors to Wells Fargo Bank, N.A. in the original amount of $2,188,845. Wells Fargo has filed a Claim in the Debtors' case in the amount of $2,760,961. b. Liens entered by the Pennsylvania Department of Revenue against the Debtors as follows: (i) Judgment No 074044 in the amount of $22,017, filed in the Dauphin County Court of Common Pleas at Docket No. 2019CV-9232; (ii) Judgment No R61268 in the amount of $17,515.33, filed in the Dauphin County Court of Common Pleas as Docket No. 2019-CV-4375; and c. A judgment filed by Truist Bank, formerly Branch Banking and Trust, for which a Proof of Claim was filed in the amount of $85,396. It is believed that there may be real estate taxes owed on the Real Property which constitute liens on the Real Property. Pursuant to the Agreement, the Debtors, as the "Sellers," will pay costs and expenses associated with the sale of the Real Property at closing as follows: a. Any notarization or incidental filing charges required to be paid by the Debtors as the Sellers. b. All other costs and charges apportioned to the Debtors as the Sellers; c. All costs associated with the preparation of the conveyance instruments and normal services with respect to closing, including payment of $60,000 on account of legal fees and expenses owed to Cunningham, Chernicoff & Warshawsky, P.C., professionals, in connection with implementation of the sale, the presentation and pursuit of this Motion consummation of closing and otherwise in connection with this case. All fees and expenses payable to Cunningham, Chernicoff & Warshawsky, P.C. will be subject to such approval as the Bankruptcy Court may require. d. Past due real estate taxes and present real estate taxes pro-rated to the date of closing on the sale. e. Any municipal charges and liens, pro-rated to the date of closing on the sale. f. One-half of all transfer taxes which may be owed on account of the transaction. g. A commission at the rate of 6% payable to Howard Hanna, to be co-brokered. h. Payment of United States Trustee's Fees resulting from the transaction, which are believed to be in the amount of $16,000. Subsequent to the payment of costs of sale as set forth, the Debtors propose to pay the net proceeds to Wells Fargo Bank, N.A. in an amount no higher than the loan which is secured by the first mortgage lien on the Real Property by Wells Fargo Bank, N.A. It is believed that there will be no additional proceeds available for payment to Truist Bank on account of the loan secured by Truist Bank's judgment lien. In the event there is a dispute as to the disposition of the proceeds net of the aforesaid costs of sale, the Debtors ask approval of the sale with any disputed proceeds to be held in trust by the Debtor's counsel, Cunningham, Chernicoff & Warshawsky, P.C. As noted, the transaction will convey the interest which the Debtor has in the Real Property. The consideration for the Real Property is fair and reasonable and is believed to be equivalent to the fair market value thereof. Thus, the sale is in the Debtors' and their estate's best interests. The Debtors ask that any order approving the sale transaction be effective immediately by declaring inapplicable the 14-day stay provided in Bankruptcy Rules 6004(h) and 6006(d). A copy of the Agreement is available at https://tinyurl.com/y4tx9rul from PacerMonitor.com free of charge. Richard C. Angino and Alice K. Angino sought Chapter 11 protection (Bankr. M.D. Pa. Case No. 20-00031) on Jan. 6, 2020. The Debtors tapped Robert Chernicoff, Esq., as counsel. SCULPTOR CAPITAL: Fitch Affirms B+ IDR; Alters Outlook to Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Sculptor Capital Management, Inc. and its related entities' Long-Term Issuer Default Rating (IDR) at 'B+'. The Rating Outlook has been revised to Stable from Negative. Fitch has also withdrawn the existing senior secured debt rating at 'BB-/RR3'. RATING WITHDRAWALS The senior secured debt ratings are being withdrawn due to the paydown and termination of the existing facility as part of the recently completed recapitalization. KEY RATING DRIVERS IDRs AND SENIOR DEBT The Outlook revision reflects the execution of a recapitalization transaction, which reduced Sculptor's outstanding borrowings and improved its leverage metrics. The Stable Rating Outlook reflects Fitch's view that the impact of any potential future performance volatility given the market backdrop (and the resultant impacts on flows, assets under management [AUM] and fee-related EBITDA [FEBITDA]), has been lessened by the just-completed recapitalization transaction with Delaware Life Insurance Company (Delaware Life) and the fact that the company has finalized the settlement with respect to the restitution claim brought by certain parties (Africo) related to the activities of OZ Africa. The current rating incorporates Fitch's belief that the above settlement and the expected termination of the Deferred Prosecution Agreement has brought a final closure to the legal issues stemming from the company's legacy dealings in Africa. The rating affirmation reflects Sculptor's long-term performance track record and franchise, particularly in its core multi-strategy hedge fund business and continued expansion into credit and real estate products, which have committed capital structures and generate more consistent fee revenue, as well as the stabilization of its assets under management (AUM) and management fees since 1Q 2020, which result in improved fee-related EBITDA (FEBITDA) prospects. Key rating constraints include the business model's sensitivity to market risk due to the still meaningful amount of net asset value-based management fees, weak FEBITDA margins, leverage and interest coverage metrics, and less diversified, albeit improving, AUM relative to higher-rated alternative IMs. Reduced investor appetite for hedge funds as an asset class has pressured fund flows and fees for the hedge fund industry as a whole. Sculptor has seen significant declines in AUM and management fees in the last few years as the firm moved through a leadership transition and legal issues. AUM and management fees seemed to have stabilized year-to-date in 2020, but an improvement in management fees from here is dependent on inflows, especially into the master fund and other higher fee strategies. While the firm's legal issues have now been resolved, Fitch believes the fundraising outlook for the master fund remains uncertain. Sculptor's FEBITDA margin was 5.4% for the trailing 12 months (TTM) ended Sept. 30, 2020, which is well below Sculptor's longer-term historical range of 35% to 45%. Using Sculptor's expense guidance for 2020, its AUM as of Sept. 30, 2020, existing management fee rates and considering the recapitalization transaction, Fitch estimates that Sculptor's FEBITDA margin could recover modestly by YE20 and approach high single digits within the Rating Outlook horizon, which would still be weak relative to the peer group and historical performance. In its analysis of Sculptor, Fitch uses FEBITDA as a proxy for cash flow, which consists of management fees, less compensation expenses (including salary and a minimum level of bonus assumed to be the higher of 25% of management fees or management guidance), less operating expenses, plus depreciation and amortization. The calculation excludes incentive income and incentive-related compensation, which is approximated based on company disclosures. On Nov. 13, 2020, Sculptor closed on the credit agreement that it entered into with Delaware Life to provide a $320 million senior secured term loan facility and a $25 million senior secured revolving credit facility. Proceeds of the term loan as well existing cash on hand were used to repay the existing term loan, subordinated credit facility and preferred units in full. Sculptor has also issued to Delaware Life, 10-year warrants enabling it to purchase up to 4.3 million of its class A shares. The recapitalization transaction has reduced outstanding debt from $415.5 million including the accrued preferred dividends at Sept. 30, 2020, to $320.0 million at close, by capturing the available prepayment discounts of $62.3 million on the existing debt and by partially drawing down on existing cash reserves. The new term loan also has an incentive to pay down $100 million by May 2021 and a cash flow sweep is in place, above a minimum free cash balance of $75 million, for the first $112.5 million of paydowns. Fitch views the reduction in debt positively, but gross debt/FEBITDA will remain elevated for the rating level until AUM and FEBITDA improves more meaningfully. Sculptor's leverage was over 31x for the TTM ended Sept. 30, 2020, which is well above the peer group and the firm's historical metrics. Considering Sculptor's completed recapitalization transaction and cash sweep requirements, expense guidance for 2020, AUM as of Sept. 30, 2020, and existing management fee rates, Fitch expects Sculptor's leverage could fall within a range of 24x-26x by YE20 and further improve to below 10x within the Rating Outlook horizon. However, a decline in AUM could slow the recovery in FEBITDA and keep the leverage ratio elevated, despite the planned debt reduction. Interest coverage was 1.0x for the TTM ended Sept. 30, 2020. Based on Sculptor's expense guidance for 2020, its AUM as of Sept. 30, 2020, existing management fee rates, and considering the recapitalization transaction and its higher interest payment obligations, Fitch expects interest coverage to decline below 1.0x at YE20 before recovering along with an improvement in FEBITDA. Sculptor's liquidity profile offsets the weak leverage and interest coverage ratios. On Sept. 30, 2020, the company had $290.3 million in unrestricted cash and equivalents and $152.2 million in long term U.S. Government obligations. Sculptor's minimum free cash balance requirement under the Delaware Life facility reduces to approximately $75 million while the cash flow sweep remains in place. The company has other balance sheet investments and also obtained a new $25.0 million revolving credit facility as part of the recapitalization transaction, which would add a contingent liquidity source. Fitch believes the lower liquidity levels going forward should be manageable given the reduction in uncertainty related to the Africo liabilities as well as lower overall debt levels and the extension of maturities. The withdrawal of the senior secured debt rating of 'BB-/RR3' reflects the paydown and termination of the existing senior credit facilities. SUBSIDIARIES AND AFFILIATED COMPANIES Sculptor is a publicly traded holding company, and its primary assets are ownership interests in the operating group entities (Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP), which earn management and incentive fees and are directly held through one intermediate holding company. Sculptor conducts substantially all of its business through the operating group entities. The IDRs assigned to Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP are equalized with the ratings assigned to Sculptor, reflecting the joint and several guarantees among the entities. Sculptor Capital LP serves as the debt-issuing entity for Sculptor's secured debt and benefits from joint and several guarantees from the management and incentive-fee generating operating group entities. RATING SENSITIVITIES IDRs AND SENIOR DEBT Factors that could, individually or collectively, lead to a negative rating action/downgrade include: -- an inability to achieve the ongoing reduction in debt as planned, specifically reducing the leverage ratio to below 10X and improving interest coverage above 1x by the end of 2021; -- a material increase in outflows out of the master fund or performance deterioration leading to a decline in AUM and FEBITDA from current levels that would prevent the firm from improving margins, interest coverage and leverage towards Fitch's expectations; -- a reduction in the firm's liquidity position or impairment of the firm's fundraising capabilities, resulting from significant reputational damage, could also yield negative rating action; -- any further material adverse impact on the company's franchise or financial profile arising from the restitution claim related to the activities of OZ Africa could also have a negative rating impact. Factors that could, individually or collectively, lead to a positive rating action/upgrade, include: -- a reduction in leverage below 5.0x and increase in interest coverage over 3.0x on a sustained basis; -- positive ratings momentum would also be predicated on improved fundraising, enhanced AUM diversity, maintenance of investment performance and continued fee generation, along with expense reduction, which yields improvement in the FEBITDA margin above 15%. SUBSIDIARIES AND AFFILIATED COMPANIES The ratings of Sculptor Capital LP, Sculptor Capital Advisors LP, and Sculptor Capital Advisors II LP are linked to the IDR of Sculptor and are therefore expected to move in tandem. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Sculptor has an ESG Relevance Score of '4' for Management Strategy due to the importance of management on the operational implementation of its strategy, which has had a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. SCURRY COUNTY: Moody's Affirms Ba2 GOLT Rating, Outlook Stable -------------------------------------------------------------- Moody's Investors Service has affirmed Scurry County Hospital District, TX's issuer and general obligation limited tax (GOLT) ratings at Ba2, affecting $365,000 of rated debt. Concurrently, the outlook has been revised to stable from negative. RATINGS RATIONALE The Ba2 rating reflects the district's small size and narrow financial flexibility despite some improvement in recent years. The rating also incorporates the district's moderately-sized tax base that remains subject to significant volatility given oil and gas exposure, elevated debt profile and manageable pension liability. The most immediate social risk is the coronavirus outbreak, which resulted in the suspension of non-essential services and has reduced revenue during 2020. There is a high degree of uncertainty around the full effects of the suspension, the sustainability of the recent recovery of volume following reactivation of elective services, and the lingering effects on the economy. The lack of distinction between the issuer and GOLT ratings reflects the district's ample taxing headroom, which offsets the limitation under the property tax cap, lack of full faith and credit pledge, and inability to override the constitutional tax cap. RATING OUTLOOK The revision of the outlook to stable from negative reflects material improvement in the district's liquidity in fiscal 2020 which ends December 31, aided by material federal support provided in response to the pandemic. In addition, the hospital has made operational improvements, added some services, and is currently expanding its clinic to generate additional revenue which should help to stabilize the hospital's finances going forward. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Substantially improved liquidity - Trend of favorable operating margins FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Further decline in liquidity and/or operating margins - Material increase in balance sheet leverage - Material tax base contraction or significant reduction of tax rate margin LEGAL SECURITY The outstanding GOLT bonds represent direct obligations of the district, payable from the levy and collection of a direct and continuing ad valorem tax, limited to $5.00 per $1,000 of value, on all taxable property within the district's boundaries. USE OF PROCEEDS Not applicable PROFILE Scurry County Hospital District is a political subdivision of the State of Texas (Aaa stable), coterminous with Scurry County. The hospital district operates the Cogdell Memorial Hospital located in the City of Snyder, as well as other health and wellness facilities. The hospital is a Critical Access Hospital with 25 licensed beds and provides inpatient, outpatient and emergency care services. METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in July 2020. SEI HOLDING I: Moody's Withdraws Ratings Following Debt Repayment ----------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings of SEI Holding I Corporation, including the Caa1 corporate family rating and senior secured first lien debt rating, and the Caa3 rating on the second lien debt. The negative outlook was also withdrawn. RATINGS RATIONALE The ratings withdrawal follows SBP's recent debt refinancing in October 2020 that resulted in the full repayment of the company's rated debt. Ratings withdrawn on SEI Holding I Corporation: Corporate Family Rating, Caa1; Probability of Default Rating, Caa1-PD; Senior Secured First Lien Term Loan, Caa1 (LDG3); Senior Secured Second Lien Term Loan, Caa3 (LGD5); Negative outlook withdrawn. SEI Holding I Corporation and Bishop Lifting Products, Inc., are intermediate subsidiaries of the ultimate holding company: SBP Holding LP. The company, based in Pearland, Texas, distributes industrial rubber, wire rope & rigging equipment, and provides related services including testing, installation, inspection, and equipment rental. Revenues approximated $514 million for the fiscal year ended May 31, 2020. SERENDIPITY LABS: Sets Bidding Procedures for All Assets -------------------------------------------------------- Serendipity Labs, Inc., asks the U.S. Bankruptcy Court for the Northern District of Georgia to authorize the bidding procedures in connection with the sale of substantially all assets to Bay Point Capital Partners II, LP for $1.1 million credit bid, pursuant to their Asset Purchase Agreement, subject to overbid. The Debtor engaged an investment banker at the outset of 2020 to market the Debtor. However, due to the outbreak of the COVID-19 pandemic, these efforts were fruitless, as investors shied away from the shared office industry during uncertain and volatile times. After the Petition Date, the Debtor continued to market itself to various entities and individuals in the industry and capital markets. Throughout the marketing process the Debtor contacted various potential investors to sponsor an exit from Chapter 11. However, for different reasons, none of these parties signed a definitive commitment, other than the Stalking Horse Bidder. The Stalking Horse Bidder's offer contemplated that it would provide the DIP Loan to supplement the Debtor's cash flow in supporting the costs of operations and administration of the chapter 11 case and credit bid the DIP Loan to acquire the Acquired Assets, subject to higher and better bids. No other offers were received. Should the Court approve Bid Procedures, the bid of the Staking Horse Bidder will serve as the floor against which all other interested parties will bid to purchase the Acquired Assets. If the Stalking Horse Bidder is the Successful Bidder and closes on the acquisition of the Acquired Assets, it is contemplated that the Stalking Horse Bidder will hire substantially all of the Debtor's current employees (including certain members of the Debtor's management team) to continue to operate the Debtor's business. After the anticipated approval of the Bid Procedures, GlassRatner Advisory & Capital Group, LLC, doing business as B. Riley Advisory Services, and the Debtor will conduct a 60-day, fulsome, postpetition marketing process funded by the Stalking Horse Bidder's proposed DIP Loan to qualify any additional buyers and sell the Acquired Assets to the highest and best bidder through a court-approved process as set forth in the Bid Procedures. The 60-day process will commence 14 days after entry of the Order, during which time B. Riley will prepare marketing materials for dissemination and prepare the data room. The salient terms of the APA are: a. Acquired Assets: Section 1(a) of the APA describes the Acquired Assets, which are comprised of substantially all of the Debtor's assets. b. Assumed Liabilities: The Stalking Horse Bidder will not assume or have any responsibility with respect to any liability of the Debtor or the Debtor's customers, other than the Assumed Seller Liabilities, which will be described in Section 1.1(c) of the APA. c. Purchase Price: $1.1 million consisting of a credit bid of the outstanding balance of the DIP financing to be provided by the Stalking Horse Bidder as approved by the Court and with the right to credit bid any additional amounts of the DIP Loan. d. Good Faith Deposit: There is no deposit requirement under the APA because the Stalking Horse Bidder is also providing the DIP Loan for the Debtor. e. Breakup Fee: $100,000 f. Sale Free and Clear of Unexpired Leases: None The Debtor asks approval to sell the Acquired Assets to a Qualified Bidder that makes the highest or otherwise best offer for the Assets, after an approximately 60-day solicitation period to begin approximately 14 days after the entry of the Bid Procedures Order, in order to provide B. Riley with time to sufficient prepare the CIM, during which information will be provided to any party in interest purchasing the Debtor's assets, subject to appropriate confidentiality greements. The Debtor will utilize the services of B. Riley and its legal counsel to help move forward the sale process. The salient terms of the Bidding Procedures are: a. Bid Deadline: March 9, 2021 at 4:00 p.m. (ET) b. Initial Bid: Not be less than the amount of $1.3 million, which is the sum of the purchase price in the Stalking Horse Bidder's APA, the Breakup Fee of $100,000, and the initial bid increment of $100,000 c. Deposit: 10% of the cash purchase price of bid d. Auction: The Auction will commence at 10:00 a.m. (ET) on March 12, 2021. The Acquired Assets will be sold free and clear of all liens, claims, encumbrances, and interests. e. Bid Increments: $100,000 f. Sale Hearing: March 17, 2021 at (TBD) (ET) g. Closing: March 17, 2021 h. The Stalking Horse Bidder serves as the Debtor's post-petition secured lender in the Bankruptcy Case. The Stalking Horse Bidder will be entitled to credit bid up to the full value of its postpetition secured claims in its capacity as DIP lender, in the Stalking Horse Bidder's sole discretion. Within two days after the Bid Deadline, the Debtor will file a notice of potential assumption, assignment and/or transfer of executory contracts and unexpired leases identified by each Qualified Bidder, and serve such notice on all non-debtor parties to the Designated Executory Contracts. The Debtor further asks approval of the APA, subject to the auction process. The APA provides the framework for consummating the transactions negotiated between the Debtor and the Stalking Horse Bidder. The DIP Loan procured by the Debtor has a term of 15 months with an interest reserve of four months, prepaid interest. The Debtor is a party to a certain Note and Warrant Purchase Agreement dated March 14, 2019, with Hall Phoenix/Inwood Ltd., a Texas limited partnership, and the other parties thereto. It issued the following notes to the following persons and entities under the Note Purchase Agreement: a. Hall Los Angeles WTS, LLC, a Texas limited liability company, which is an affiliate of Hall Inwood, in the principal amount of $3 million; b. K Investments VIII, L.L.C., in the principal amount of $250,000; c. Arthur Robinson, in the principal amount of $35,000; d. Gerry Murray, in the principal amount of $165,000; e. Kenneth L. Maxon, in the principal amount of $25,000; and f. Gregory R. Maxon, in the principal amount of $25,000. The holders of the Notes would allege that the indebtedness evidenced and governed by the Notes and Note Purchase Agreement is secured by security interests granted pursuant to that certain Security Agreement dated March 14, 2019, by and among the Debtor and Michael J. Jaynes, an individual resident of Texas, as collateral agent thereunde. The Security Agreement purports to grant security interests and lines in the following property: a. All interests held by the Debtor in (i) any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity which is wholly-owned by Debtor, and (ii) SLW-Frisco, LLC (subject to rights of Debtor contained in Section 8.1 (Sale of Assets for Working Capital) of the Purchase Agreement). b. The Significant Accounts (as defined in the Note Purchase Agreement). The Note Purchase Agreement, Notes and Security Agreement were amended by that certain Omnibus Amendment to Security Agreement and Notes dated as of May 20, 2020, by and among the Debtor, Hall WTS, and Michael J. Jaynes, which, among other things, appoints Hall WTS as the collateral agent under the Security Agreement. The Alleged Pre-Petition Liens in the Alleged Pre-Petition Collateral granted by the Security Agreement would be perfected by a UCC-1 financing statement filed June 29, 2020 with the Delaware Department of State, UCC Filing Number 2020 4494409, naming the Debtor as debtor and Hall WTS, in its individual capacity, as secured party. The Financing Statement was filed within the 90 days prior to the Petition Date. The Debtor, Hall Agent and Wells Fargo Bank, National Association are also parties to a certain Deposit Account Control Agreement dated May 28, 2020 ("DACA"), covering certain bank accounts of the Debtor with numbers ending 3852 and 8754. The DACA was signed within the Preference Period. On the Petition Date, the Debtor sought permission from the Court to use the Alleged Cash Collateral, and the Court granted the request. On Oct. 6, 2020, the Debtor commenced an adversary proceeding in the Court against Hall Inwood and Hall WTS (Adversary Proceeding No. 20-06187) asking, among other things, to avoid as preferential transfers the perfection of the alleged liens allegedly granted to Hall Agent. The Adversary Proceeding is currently pending and presents a bona fide dispute regarding the validity of the alleged liens held by Hall Agent. The Debtor has shown that cause exists such that the Hall Agent should not be permitted to credit bid at the Auction. The Debtor has determined that a sale of its assets in accordance with the APA after an approximately 75-day sale process will be the most effective way to maximize the value of its estate for the benefit of its creditors in view of the prepetition marketing and the Debtor's limited resources. It will also preserve the employment for the Debtor's employees. The Debtor believes that the proposed Bid Procedures will bring the highest and best offer for its assets under the circumstances. It believes that the assumption of the APA, the implementation of the Bid Procedures and the timeline proposed will further achieve that goal. As such, the Debtor believes that it has demonstrated a sound business justification for the relief it sought. A copy of the Bidding Procedures is available at https://tinyurl.com/y39tpjkf from PacerMonitor.com free of charge. About Serendipity Labs Serendipity Labs, Inc. is a workplace-as-a-service company that offers co-working, shared offices and team suites. It has over 35 locations in urban, suburban and secondary markets across the United States. Serendipity Labs filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-68124) on July 15, 2020. John Arenas, chairman and chief executive officer, signed the petition. At the time of filing, the Debtor was estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Sage M. Sigler oversees the case. Nelson Mullins Riley & Scarborough, LLP is the Debtor's legal counsel. SINCLAIR TELEVISION: S&P Rates New $550MM Senior Secured Notes 'BB' ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level and '2' recovery rating to Sinclair Broadcast Group Inc. (SBGI) subsidiary Sinclair Television Group's (STG) proposed $550 million senior secured notes due 2030. The '2' recovery rating indicated its expectation for substantial (70%-90%; rounded estimate: 80%) recovery for lenders in the event of a payment default. The company will use the proceeds to redeem its $550 million 5.625% senior unsecured notes due 2024. STG also plans to extend the maturity of its $650 million revolving credit facility to 2025 from 2024. At the same time, S&P lowered its issue-level rating on STG's existing senior secured debt to 'BB' from 'BB+' and revised the recovery rating to '2' from '1'. These actions reflect the increased amount of secured debt in the company's capital structure in S&P's default scenario following the proposed transaction. S&P rates STG (and evaluate its credit metrics) at the ultimate parent, SBGI, which consolidates the operations of both STG (owner of the broadcast television stations) and Diamond Sports Group (DSG; owner of the regional sports networks). S&P said, "We expect SBGI's adjusted leverage will remain in the mid-5x area in 2020 due primarily to pandemic and recession-driven advertising revenue declines at STG and DSG as well as DISH Network Corp.'s decision to drop carriage of DSG's regional sports networks in 2019. While we expect core advertising will largely bounce back in 2021 as the economy recovers, our negative outlook on SBGI continues to reflect the risk that a weaker-than-expected economic recovery could hurt advertising, a prolonged resurgence of the pandemic could result in additional cancellations of sporting events, and pay-TV subscriber churn could remain elevated or accelerate further. These factors could delay SBGI reducing leverage below 5.5x by the end of 2021. In addition, we are increasingly concerned about the secular pressures on DSG, in particular the mismatch between programming expense growth and revenue growth." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors STG is the borrower of a $650 million senior secured revolving credit facility maturing in 2025, a $1.37 billion senior secured term loan B maturing in 2024, a $1.3 billion senior secured term loan B maturing in 2026, $550 million of new senior secured notes, and about $1.25 billion of senior unsecured notes with maturities ranging from 2026 through 2030. STG's senior secured debt is guaranteed by SBG, designated subsidiaries of SBG (excluding Diamond Sports Holdings LLC and its subsidiaries), and STG's material subsidiaries. The senior secured debt is secured by substantially all of STG's assets and those of its guarantors (with certain exceptions including Federal Communications Commission licenses). Simulated default assumptions -- S&P's simulated default scenario contemplates a default occurring in 2024 due to a combination of the following factors: a larger-than-expected drop in EBITDA in a nonelection year, increased competition from alternative media, a prolonged decline in advertising revenue due to economic weakness, a failure to generate retransmission revenue commensurate with its local market and relevant television networks, and pressure from affiliated networks to remit a significant portion of its retransmission fees. -- Other default assumptions include an 85% draw on the revolving credit facility, LIBOR is 2.5%, the spread on the revolving credit facility rises to 5% as covenant amendments are obtained, and all debt includes six months of prepetition interest. -- S&P has valued STG on a going-concern basis using a 7x multiple of its projected emergence EBITDA, which is in line with the multiples it uses for the other large television broadcasters it rates. Simplified waterfall -- EBITDA at emergence: $470 million -- EBITDA multiple: 7x -- Gross recovery value: $3.1 billion -- Net recovery value for waterfall after administrative expenses (5%): $3 billion -- Value available for senior secured debt claims: $3.1 billion -- Estimated senior secured debt claims: $3.7 billion -- Recovery range: 70%-90% (rounded estimate: 80%) -- Value available for senior unsecured debt claims: $0 -- Estimated senior unsecured debt claims: $1.3 billion -- Recovery range: 0%-10% (rounded estimate: 0%) STEVEN FELLER: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Steven Feller PE PL, according to court dockets. About Steven Feller PE PL Steven Feller PE, an engineering design services company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-21341) on Oct. 17, 2020. The petition was signed by Steven Feller, authorized representative. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $500,000 and $1 million. Judge Scott M. Grossman oversees the case. Behar, Gutt & Glazer, P.A. is the Debtor's legal counsel. SUMMIT MIDSTREAM: Moody's Affirms Ca CFR, Outlook Negative ---------------------------------------------------------- Moody's Investors Service downgraded Summit Midstream Partners Holdings, LLC's Probability of Default Rating (PDR) to D-PD from Ca-PD. SMP Holdings' other ratings were affirmed, including its Ca Corporate Family Rating (CFR) and Ca senior secured term loan rating. The rating outlook remains negative. These actions follow the closing of SMP Holdings' term loan restructuring on Nov. 17, 2020. Under the restructuring agreement, the term loan was fully discharged in exchange for a certain cash payment and approximately 2.3 million Summit Midstream Partners, LP (SMLP, B3 negative) common units held by SMP Holdings and pledged as collateral under the term loan. Downgrades: Issuer: Summit Midstream Partners Holdings, LLC Probability of Default Rating, Downgraded to D-PD from Ca-PD Affirmations: Issuer: Summit Midstream Partners Holdings, LLC Corporate Family Rating, Affirmed Ca Senior Secured Bank Credit Facility, Affirmed Ca (LGD4) Outlook Actions: Issuer: Summit Midstream Partners Holdings, LLC Outlook, Remains Negative RATINGS RATIONALE The term loan restructuring has resulted in a downgrade of SMP Holdings' PDR to D-PD. Moody's affirmed SMP Holdings' Ca CFR and Ca senior secured term loan rating, reflecting Moody's view on the potential recoveries. Shortly following this rating action, Moody's will withdraw all SMP Holdings' ratings since the rated debt has been restructured and no longer exists. The principal methodology used in these ratings was Midstream Energy published in December 2018. SMP Holdings is Summit Midstream Partners, LP's unrestricted subsidiary without any operating assets. SMLP is a publicly-traded master limited partnership primarily engaged in natural gas, crude oil and produced water gathering and/or processing in the Utica Shale, Williston Basin, Piceance Basin, DJ Basin, Barnett Shale, Delaware Basin and Marcellus Shale. TOMMIE BROADWATER, JR: Datcher Buying DC Property for $420K ----------------------------------------------------------- Tommie Broadwater, Jr. asks the U.S. Bankruptcy Court for the District of Maryland to authorize the short sale of the real property located at 4324 Alabama Avenue SE, Washington, DC to John Datcher for $420,000, free and clear of any interests. The Debtor's Broker, Theodore Meginson and M & M Real Estate Properties, L.L.C., has procured a contract of sale for the Property”) for $420,000 to the Buyer. The Contract demonstrates on page 1 it is lot 4 only being sold. The Contract was ratified on Oct. 4, 2020, although an Addendum states the Contract date is Oct. 6, 2020 addressing short sale, financing, Court approval, and home inspection and short sale approval by Wells Fargo, NA ("WF") the lienor of record. The Buyer's broker is Tiffany Moore and Own Real Estate and the Seller's Broker is Theodore Megginson. The Contract by addendum calls for a closing settlement on Dec.9, 2020 by extension through addendum from Nov. 3, 2020. There is a $3,000 deposit from the Buyer held by Home First Title Group, LLC. The purchase of the Property under the Contract is "as is." The Contract requires a 3.5% down payment by Buyer and the remainder is financed. The Contract requires a 96.50% financing level under FHA loan program and financing of $405,300 to the Buyer. The Buyer has "pre-qualified" and the contingency for financing expires 30 days from ratification; namely, Nov. 3, 2020. There is a home inspection which expired seven days after Contract ratification. It has now expired. The Buyer is to apply for lender required insurance, and this has too expired as a contingency. There was a disclosures contingency; however, that has been satisfied. There was a lead based paint contingency; however, that too has been satisfied. There is a short sale contingency with WF as the Debtor's secured lender on the Property that requires approval, the Debtor noting that it was already resolved in connection with thw Property and a prior purchaser and reduced to a Consent Order. It is anticipated that there will be a short sale agreement arrived by further Consent Order between Debtor and WF once the contingencies are deemed waived or satisfied. The Debtor therefore intends the sale of the Property if conducted through a confirmed Plan under Section 1129 of the Code which is anticipated to be sold in a manner that excludes any tax in the nature of a real property transfer tax or stamp tax or similar tax as provided for by Section 1146 of the Code. There is a 4% commission on the Property sale to be split between the Debtor''s realtor and the Buyer's realtor as provided for by the listing agreement. It is anticipated that the Debtor's further Amended Plan to be filed on Nov. 6, 2020 will be confirmed expediently, and thus to the extent the sale will close under a confirmed Plan it is specifically preserved that any transfer taxes or stamp or recordation taxes may be excluded and non-recognized in connection with the closing of the Contract. The secured claimants on the Property are U.S. Bank, NA (serviced by WF) and the payoff through July 1, 2020 was $446,298, with per diem thereafter such that the anticipated closing on Dec. 9, 2020 will result in a payoff quote in excess of the sum due on July 1, 2020. As the U.S. Bank claim is undersecured by the totality of the collateral (ie; the Property) it is a short sale thus any payoff is only remotely relevant. Secondly, the IRS holds a secured claim on the Property and it is of little practical importance here given that U.S. Bank will receive all net proceeds of the sale of the Property after reasonable closing costs and commissions and similar charges. By reference, the Debtor's Amended Schedules A/B reference the Property (i.e.; 4324 Alabama Avenue, SE Washington D.C. only) as $391,982. The BPO prepared by the authorized Realtor, Ross Levin, demonstrates that the Property a value of $310,000. Accordingly, by any measure of valuation in the case, the Property DC in and of itself is a fair market sale at $420,000. Finally, waiver of the 14-day period under Fed. R. Bankr. P. 6004(h) is sought and incorporated to the Order so as to permit closing. So as to avoid any irregularities given the existence of an IRS claim -- albeit secured -- the Debtor asks that the Court requires the IRS to file a Line of no opposition or consent, unless of course the IRS has a substantive objection. A hearing on the Motion is set for Nov. 23, 2020 at 11:00 a.m. Objections, if any, must be filed within 21 days of the notice. A copy of the Contract is available at https://tinyurl.com/yxfypp7v from PacerMonitor.com free of charge. Tommie Broadwater, Jr., sought Chapter 11 protection (Bankr. D. Md. Case No. 18-11460) on Feb. 2, 2018. The Debtor filed Pro Se. The Court appointed Theodore Meginson and M & M Real Estate Properties, L.L.C. as Broker. TOUCHPOINT GROUP: Incurs $775K Net Loss in Third Quarter -------------------------------------------------------- Touchpoint Group Holdings, Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $775,000 on $100,000 of revenue for the three months ended Sept. 30, 2020, compared to a net loss of $3.92 million on $82,000 of revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $1.62 million on $290,000 of revenue compared to a net loss of $5.76 million on $130,000 of revenue for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $4.14 million in total assets, $3.35 million in total liabilities, $605,000 in temporary equity, and $191,000 in total stockholders' equity. Historically, the Company has incurred net losses and negative cash flows from operations which raise substantial doubt about the Company's ability to continue as a going concern. The Company has principally financed these losses from the sale of equity securities and the issuance of debt instruments. Touchpoint said, "The Company will be required to raise additional funds through various sources, such as equity and debt financings. While the Company believes it is probable that such financings could be secured, there can be no assurance the Company will be able to secure additional sources of funds to support its operations, or if such funds are available, that such additional financing will be sufficient to meet the Company's needs or on terms acceptable to us." At Septe. 30, 2020, the Company had cash of approximately $131,000. Together with the Company's current operational plan and budget, and expected financings, the Company believes that it is probable that it will have sufficient cash to fund its operations into at least the first quarter of 2021. However, actual results could differ materially from the Company's projections. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/225211/000121390020037338/f10q0920_touchpointgroup.htm About Touchpoint Touchpoint Group Holdings, Inc., headquartered in Miami, Florida, -- http://www.touchpointgh.com/-- is a media and digital technology acquisition and software company, which owns Love Media House, a full-service music production, artist representation and digital media business. The Company also and holds a majority interest in 123Wish, a subscription-based, experience marketplace, as well as majority interest in Browning Productions & Entertainment, Inc., a full-service digital media and television production company. Touchpoint Group reported a net loss of $6.63 million for the year ended Dec. 31, 2019, compared to a net loss of $14.58 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $4.63 million in total assets, $3.06 million in total liabilities, $605,000 in temporary equity, and $966,000 in total stockholders' equity. Cherry Bekaert LLP, in Tampa, Florida, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 24, 2020 citing that the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. VENUS CONCEPT: Incurs $7.3 Million Net Loss in Third Quarter ------------------------------------------------------------ Venus Concept Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $7.32 million on $20.68 million of revenue for the three months ended Sept. 30, 2020, compared to a net loss of $8.98 million on $26.15 million of revenue for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $67.78 million on $52.18 million of revenue compared to a net loss of $19.56 million on $78.55 million of revenue for the nine months ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $147.01 million in total assets, $110.37 million in total liabilities, and $36.65 million in total stockholders' equity. The Company has had recurring net operating losses and negative cash flows from operations. As of Sept. 30, 2020 and Dec. 31, 2019, the Company had an accumulated deficit of $142,707,000 and $75,686,000 respectively. The Company was in compliance with all required covenants as of Sept. 30, 2020 and as of Dec. 31, 2019. Management Commentary "While our third quarter revenue performance continued to be impacted by the COVID-19 global pandemic, we have many reasons for optimism," said Domenic Serafino, chief executive officer of Venus Concept. "We experienced a notable improvement in the operating environment in our key markets as evidenced by the strong procedure-related activity in both our aesthetics and hair restoration businesses during the third quarter. Importantly, while the recovery in capital equipment demand in the aesthetics and hair restoration markets remains challenged, our focused commercial strategy is helping us maximize our opportunities to drive adoption. Third quarter system sales results benefitted from strong sales of our Venus Bliss in the U.S. and strong adoption of our ARTAS iX in EMEA." Mr. Serafino continued: "Our efforts to reduce the operating expense profile of the combined company are progressing well. We continue to expect our restructuring program, combined with previously announced synergies and cost reductions, to result in cost savings of approximately $38 million in 2020 and continuing into 2021. We are investing prudently in our R&D initiatives focused on the compelling opportunity to introduce new minimally invasive robotic solutions, beyond hair restoration, for medical aesthetic procedures that are currently treated by surgical intervention. While the near-term outlook has been challenged by this global pandemic, we continue to believe the long-term opportunity remains compelling for us as a leading player in both the global minimally invasive/non-invasive medical aesthetics market and the minimally invasive surgical hair restoration market." Going Concern Venus Concept said, "The Company's recurring losses from operations and negative cash flows raise substantial doubt about the Company's ability to continue as a going concern within 12 months from the date that the condensed consolidated financial statements are issued. In addition, the coronavirus pandemic ("COVID-19" or "pandemic") has had a significant negative impact on the Company's condensed consolidated financial statements as of Sept. 30, 2020 and for the nine months then ended, and management expects the pandemic to continue to have a negative impact in the foreseeable future, the extent of which is uncertain and largely subject to whether the severity of the pandemic worsens, or duration lengthens. In the event that the COVID-19 pandemic and the economic disruptions it has caused continue for an extended period of time the Company cannot assure that it will remain in compliance with the financial covenants in its credit facilities. "Given the COVID-19 pandemic, the Company cannot anticipate the extent to which the current economic turmoil and financial market conditions will continue to adversely impact the Company's business and the Company may need additional capital to fund its future operations and to access the capital markets sooner than planned. There can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, it may be compelled to reduce the scope of its operations and planned capital expenditures or sell certain assets, including intellectual property assets. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the uncertainty. Such adjustments could be material." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1409269/000156459020054021/vero-10q_20200930.htm About Venus Concept Toronto, Ontario-based Venus Concept Inc. is an innovative global medical technology company that develops, commercializes, and delivers minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related practice enhancement services. The Company's aesthetic systems have been designed on a cost-effective, proprietary and flexible platform that enables the Company to expand beyond the aesthetic industry's traditional markets of dermatology and plastic surgery, and into non-traditional markets, including family and general practitioners and aesthetic medical spas. In the years ended Dec. 31, 2019 and in 2018, a substantial majority of its systems delivered in North America were in non-traditional markets. Venus Concept incurred a net loss of $42.29 million in 2019 following a net loss of $14.21 million in 2018. As of March 31, 2020, Venus Concept had $155.26 million in total assets, $108.68 million in total liabilities, and $46.57 million in stockholders' equity. MNP LLP, in Toronto, Canada, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 30, 2020, citing that the Company has reported recurring net losses and negative cash flows from operations, which raise substantial doubt about the Company's ability to continue as a going concern. VERITAS FARMS: Incurs $1.58 Million Net Loss in Third Quarter ------------------------------------------------------------- Veritas Farms, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.58 million on $1.47 million of sales for the three months ended Sept. 30, 2020, compared to a net loss of $3.59 million on $1.21 million of sales for the three months ended Sept. 30, 2019. For the nine months ended Sept. 30, 2020, the Company reported a net loss of $5.13 million on $4.83 million of sales compared to a net loss of $6.75 million on $5.71 million of sales for the same period during the prior year. As of Sept. 30, 2020, the Company had $13.49 million in total assets, $4.42 million in total liabilities, and $9.07 million in total stockholders' equity. Net cash used in operating activities was $2,470,841 for the nine months ended Sept. 30, 2020, as compared to $7,815,686 for the nine months ended Sept. 30, 2019. The decrease is largely attributable to the reduction of net losses and decrease in inventory. Net cash used in investing activities was $77,423 for the nine months ended Sept. 30, 2020 as compared to net cash used of $1,338,069 for the nine months ended Sept. 30, 2019, reflecting reduced capital expenditures in 2020 and a buildout of the new manufacturing line in 2019. Net cash provided by financing activities was $1,535,472 for the nine months ended Sept. 30, 2020 as compared to $14,588,420 for the nine months ended Sept. 30, 2019. The 2020 number reflects the net proceeds of a $200,000 convertible loan received in March, net proceeds of $803,994 from the PPP loan received in May, net proceeds of $159,900 from the EIDL loan received in June and net proceeds from initial closings under a private placement, while the 2019 number reflects the net proceeds from initial closings under a separate private placement. The Company's primary sources of capital to develop and implement its business plan and expand its operations have been the proceeds from private offerings of its equity securities, capital contributions made by members prior to completion of the September 2017 acquisition of 271 Lake Davis Holdings, LLC by the Company and loans from shareholders. In March 2020, the Company secured a $200,000 loan from a single investor, evidenced by a one-year convertible promissory note. The Convertible Note bears interest at the rate of 10% per annum, which accrues and is payable together with principal at maturity. Principal and accrued interest under the Convertible Note may, at the option of the holder, be converted in its entirety into shares of its common stock at a conversion price of $0.40 per share, subject to adjustment for stock splits, stock dividends and similar recapitalization transactions. In September 2020, the Company commenced a $4.0 million private offering of up to 8,000,000 Units at a price of $0.50 per Unit. Each Unit consists of (ii) two shares of the Company's common stock; and (i) one warrant, entitling the holder to purchase one share of its common stock at an exercise price of $0.50 at any time through Aug. 31, 2025. In its discretion Veritas Farms may increase the size of the offering up to $6.0 million (12,000,000 Units). As of Sept. 30, 2020, the Company has sold $500,000 (1,000,000 Units) in the private offering. The Company believes that it will require additional financing to fund its growth and achieve profitability. The Company anticipates that such financing, will be generated from subsequent public or private offerings of its equity and/or debt securities. While the Company believes additional financing will be available to it as needed, there can be no assurance that equity financing will be available on commercially reasonable terms or otherwise, when needed. Moreover, any such additional financing may dilute the interests of existing shareholders. The absence of additional financing, when needed, could substantially harm the Company, its business, results of operations and financial condition. Going Concern The Company has sustained substantial losses from operations since its inception. At Sept. 30, 2020, the Company had an accumulated deficit of ($24,207,818), and a net loss of ($5,133,210) for the nine months ended Sept. 30, 2020. The Company said these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. Continuation as a going concern is dependent on the ability to raise additional capital and financing, though there is no assurance of success. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Veritas said, "The adverse public health developments and economic effects of the current COVID-19 pandemic in the United States, could adversely affect the Company's customers and suppliers as a result of quarantines, facility closures, closing of "brick and mortar" retail outlets and logistics restrictions imposed or which otherwise occur in connection with the pandemic. More broadly, the high degree unemployment resulting from the pandemic could potentially lead to an extended economic downturn, which would likely decrease spending, adversely affect demand for our products and services and harm our business, results of operations and financial condition. At this time, we cannot accurately predict the effect the COVID-19 pandemic will have on the Company. "The Company's rebranded line of hemp oil and extract product allowed market penetration into large retail chains vastly increasing brand exposure and awareness. The initial rollouts have been successful in creating opportunities for thousands of new retail outlets across the country. The shift from smaller order fulfillment to larger "big box store" orders creates an economy of scale and increased profitability. In addition to the volume transactions of the large retail stores, the Company has also found success with a direct to consumer approach on their E-Commerce site. "Currently, the Company incorporates an aggressive marketing plan to compete in the Cannabinoid industry. To become market leaders in the market, the Company will use three primary departments to market its products including: web-based marketing, traditional marketing, and medical marketing departments. "Management's plans include but are not limited to the following areas. Over $800,000 of current liabilities are likely to be forgiven with the proper documentation and usage per the Paycheck Protection Program. The Company anticipates that funding will be generated from subsequent public or private offerings of its equity and/or debt securities. Financial statements are already reflecting general and administrative expense rebalancing, including a reduction in personnel and 20% pay cuts taken by management and other senior staff in response to the COVID-19 outbreak. Large "Big Box" orders are to be fulfilled in the third quarter in addition to continued new and reorder sales to large retailers. Ecommerce continues to grow and provide improved margins and with the addition of hand sanitizer all sales platforms are likely to reflect growth." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1669400/000121390020038258/f10q0920_veritasfarmsinc.htm About Veritas Farms Veritas Farms is a vertically-integrated agribusiness focused on producing, marketing, and distributing whole plant, full spectrum hemp oils and extracts containing naturally occurring phytocannabinoids. Veritas Farms owns and operates a 140-acre farm in Pueblo, Colorado, capable of producing over 200,000 proprietary full spectrum hemp plants containing naturally occurring phytocannabinoids which can potentially yield a minimum annual harvest of over 200,000 pounds of outdoor-grown industrial hemp. Veritas Farms reported a net loss of $11.15 million for the year ended Dec. 31, 2019, compared to a net loss of $3.83 million for the year ended Dec. 31, 2018. As of June 30, 2020, the Company had $14.02 million in total assets, $4.36 million in total liabilities, and $9.65 million in total stockholders' equity. Prager Metis CPA's LLC, in Hackensack, New Jersey, the Company's auditor since 2018, issued a "going concern" qualification in its report dated May 14, 2020 citing that the Company has sustained substantial losses from operations since its inception. As of and for the year ended Dec. 31, 2019, the Company had an accumulated deficit of $19,074,608, and a net loss of $11,147,608. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. VORNADO REALTY: S&P Rates New Perpetual Preferred Stock 'BB+' ------------------------------------------------------------- S&P Global Ratings said it assigned its 'BB+' issue-level rating to Vornado Realty Trust's (VNO's) proposed $150 million noncallable five-year cumulative fixed-rate series N perpetual preferred stock. The company intends to use the net proceeds for general business purposes. The series N preferred stock will rank pari passu with all existing and future preferred shares. The preferred stock rating is two notches below the issuer credit rating to reflect subordination risk and the risk of partial or untimely payment. S&P views this issuance as slightly leveraging to the company given that S&P considers preferred equity akin to debt. As of Sept. 30, 2020, VNO's operating and financial performance was in line with S&P's expectations. The company's same-property cash net operating income (NOI) at share decreased by 7.7%, and its S&P Global Ratings-adjusted debt to EBITDA rose to 9.9x from 8.2x one year ago. Under S&P's base case for 2020, it expects VNO's full year NOI to decline approximately 10%-12% and debt to EBITDA to end the year in the 9.5x to 10x area. As of the third quarter of 2020, VNO collected 93% of rent due from tenants, comprising 95% from office tenants and 82% from retail tenants (up from 93% and 72%, respectively, in the second quarter) and wrote off $71.4 million of receivables year to date. In addition, VNO executed several refinancing transactions that smooths its scheduled debt maturities including a new $500 million package for PENN11 due in 2025 and the extension of a $700 million mortgage loan on 770 Broadway through 2022. S&P said, "The outlook is negative and incorporates our expectation for operating disruption that will deteriorate credit metrics, largely because of contracting EBITDA. We estimate adjusted debt to EBITDA will increase to the 9x to 10x area in 2020 and recover somewhat in 2021, but remain above 9x." S&P could lower the ratings on Vornado if debt to EBITDA increases above 9.5x and remains there for more than three consecutive quarters. This could result from: -- Additional or prolonged lockdown measures that result in higher-than-anticipated rent deferrals or abatements that deteriorate the performance of the retail portfolio beyond S&P's base case; -- Deeper-than-anticipated impact from the pandemic, including widespread adoption of work-from-home policies which results in reduced demand for office space, that weakens the company's office portfolio from higher vacancies and/or mounting pressure on rent growth; -- Higher-than-anticipated debt-financed development spending, or unanticipated acquisitions; -- In addition, S&P could lower Vornado's issue-level rating if the company's secured debt to total assets exceeds its 35% threshold. As of Sept. 30, 2020 this ratio was 33%. S&P said, "We could revise the outlook to stable if the impact from the lockdown and the resulting rent suspension and deferrals bottom in 2020, with the ensuing economic recovery improving the company's debt to EBITDA back below 9.0x. We could also revise the outlook back to stable if management takes additional measures, such as increasing asset sales, to restore credit metrics to near pre-pandemic levels." WADE PARK: U.S. Trustee Unable to Appoint Committee --------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 cases of Wade Park Land Holdings, LLC and Wade Park Land, LLC. About Wade Park Land Holdings Wade Park Land Holdings, LLC and Wade Park Land, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 20-11192) on Aug. 26, 2020. The petitions were signed by Stanley E. Thomas, authorized representative. At the time of the filing, Wade Park Land Holdings had estimated assets of between $100 million and $500 million and liabilities of between $100 million and $500 million. Wade Park Land had an estimated assets of between $100 million and $500 million and liabilities of between $50 million and $100 million. Stone & Baxter, LLP is Debtors' legal counsel. WESTERN MIDSTREAM: S&P Cuts ICR to 'BB'; Rating Off Watch Negative ------------------------------------------------------------------ S&P Global Ratings lowered the issuer credit rating on Western Midstream Operating L.P. to 'BB' from 'BB+' and removed it from CreditWatch, where the rating agency placed it March 26, 2020, with negative implications. The outlook is negative, which mirrors the outlook on the company's main counterparty, Occidental Petroleum Corp. (OXY), which was downgraded two notches to 'BB-'. S&P also lowered the rating on the senior unsecured debt to 'BB' from 'BB+', which continues to reflect the '3' recovery rating. OXY, Western's main customer, was downgraded two notches to 'BB-' from 'BB+'. OXY was downgraded based on S&P's expectation that it will remain highly leveraged over the next two years amid industry headwinds and a challenging market for divestitures while it looks to address its cumbersome near-term debt maturity schedule. This indicates counterparty risk has increased at Western, which relies on OXY for about 60% of its volumes and revenue. S&P said, "OXY's creditworthiness will continue to be an important factor for the rating on Western, but we now think Western can be rated one notch higher under certain conditions. Historically, the rating on OXY constrained the rating on Western because the companies were in the same corporate group. However, we think continued financial outperformance at Western, the partnership's integration with OXY's business that limits downside volumetric risk, the meaningful third party customers, and the fact we now consider them separate entities allows us to rate Western one notch higher than OXY." "We think OXY lacks control of Western for several reasons. We no longer think OXY has a majority on the board of directors at Western's general partner, Western Gas Holdings, LLC. OXY owns slightly over 50% of the limited partnership units, but plans to sell down over time. Finally, the minority limited partnership unitholders have some rights that limit OXY's ability to determine financial policy, including the ability to replace the general partner without OXY's consent. We think the distribution cut this year shows that OXY's influence has waned. The management teams are completely separate." "Western has substantially outperformed our financial expectations for the last several quarters, and we expect it to end 2020 with about $2 billion in EBITDA. Given the upstream stress and price volatility this year, we previously expected EBITDA generation to be lower when we took a more conservative view of the forecast in March 2020. In addition, Western's prudent financial policy has successfully preserved liquidity and enhanced cash flows. Specifically, the company cut distribution in half and lowered its growth spending budget about 55% from its original guidance. We forecast EBITDA declining slightly in 2021 toward the $1.8 billion area based on some volume regression. Even so, we expect Western to maintain leverage of about 4x while cash flows remain positive." "The company's buyback plan does not change our view of the rating on Western given its relatively moderate size and opportunistic nature. The $250 million share buyback plan announced for 2021 is predicated on the company's ability to maintain leverage below 4x. Given that we expect positive cash flow and leverage below 4x at year-end, the buyback plan does not greatly affect our view of creditworthiness. We expect Western to return cash to shareholders as long as leverage remains below 4x." "The negative outlook on Western reflects the negative outlook on OXY because we would downgrade Western if we downgrade OXY given OXY's importance as a material contributor of volumes and revenue. We expect debt to EBITDA at the midstream company to average close to 4x over the next two years while volumes and rates remain somewhat stable." S&P could lower the rating on Western if: -- S&P lowered the rating on OXY. It could downgrade OXY if the upstream company fails to meaningfully reduce debt in the next 12 months. This could occur if the company does not meet S&P's cash flow expectations and is unable to execute accretive asset sales. S&P could also lower the rating on OXY if, contrary to its expectations, it believes the company has become overly reliant on capital markets, aggressively spends capital, or favors shareholder returns over debt reduction. -- Credit metrics at Western were elevated over the next few years, such that debt to EBITDA were sustainably above 5x; or -- Business risk at Western were to weaken due to greatly reduced scale or operational issues. S&P said, "We could revise the outlook on Western to stable if we revised OXY's outlook to stable. We could revise OXY's outlook to stable if the upstream company's financial metrics improve relative to our base case scenario, such that debt/EBITDA decreases to comfortably below 7x with FFO/debt closer to 12%." The company would also need to continue addressing near-term debt maturities, maintain at least adequate liquidity, and have a plausible path to further deleveraging. This would most likely occur if commodity prices improve or if asset sales exceed our expectations." YOUFIT HEALTH: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------- The U.S. Trustee for Region 3 appointed a committee to represent unsecured creditors in the Chapter 11 cases of YouFit Health Clubs, LLC and its affiliates. The committee members are: 1. Gator Flower Mound, LLC Attn: Mark Shandler 7850 NW 146th Street, 4th Floor Miami Lakes, Florida 33016 Phone: 305-949-9049 mshandler@gatorinv.com . 2. DF Lexington Properties, LLC Attn: Kristie Hall 650 S. Hwy 27, Suite 5, PMB 312 Somerset, Kentucky 42501 Phone: 859-200-0928 kristiehall@donfranklinauto.com . 3. Hulen Pointe Retail, LLC Attn: Bo Avery 4801 Harbor Drive Flower Mound, Texas 75022 Phone: 972-480-1788 bo@trimarsh.com 4. Westwood Plaza, LLC Attn: Steven Leoni 2020 West Pensacola Street, Suite 285 Tallahassee, Florida 32304 Phone: 850-580-0000 5. Jason Blank c/o Joshua Eggnatz Eggnatz Pascucci 7450 Griffin Road, Suite 230 Davie, Florida 33314 Phone: 954-889-3359 jeggnatz@JusticeEarned.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About YouFit Health Clubs YouFit Health Clubs, LLC, and its affiliates own and operate 85 fitness clubs in Alabama, Arizona, Florida, Georgia, Louisiana, Maryland, Pennsylvania, Rhode Island, Texas, and Virginia. Visit https://www.youfit.com/ for more information. On Nov. 9, 2020, YouFit Health Clubs and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12841). YouFit was estimated to have $50 million to $100 million in assets and $100 million to $500 million in liabilities as of the filing. The Hon. Mary F. Walrath is the case judge. The Debtors tapped Greenberg Traurig LLP as their legal counsel, FocalPoint Securities LLC as investment banker, Red Banyan Group LLC as communications consultant, and Hilco Real Estate LLC as real estate advisor. Donlin Recano & Company, Inc. is the claims agent. ********* 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. 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