/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/201221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 21, 2020, Vol. 24, No. 355 Headlines 2017 IAVF WINDY: $42.15M Sale of All Assets to Second City Approved 3301 HO: Seeks Approval to Hire Eric A. Liepins as Counsel 3443 ZEN GARDEN: Jan. 26, 2021 Plan Confirmation Hearing Set 3443 ZEN GARDEN: Unsecureds to Get At Least 40% in Trustee Plan 85 FLATBUSH RHO: Case Summary & 20 Largest Unsecured Creditors 85 FLATBUSH: Tillary Hotel in Chapter 11 Amid Travel Slump ALGY TRIMMINGS: Case Summary & 20 Largest Unsecured Creditors ARMSTEAD RISK: Hires McLoughlin O'Hara as Counsel ATLANTIC PROPERTIES: Seeks to Tap J. Scott Logan as Counsel AUGUSTA INVESTMENTS: Seeks to Hire Aldo G. Bartolone as Counsel B&B AESTHETICS: Case Summary & 3 Unsecured Creditors BC HOSPITALITY: Proposes February Auction for All Assets BLACKJEWEL LLC: Chapter 11 Case Proceeds Despite Ex-CEO Challenge BLACKJEWEL LLC: Kentucky Energy Cabinet Says Plan Not Feasible BLACKJEWEL LLC: UHSI Says Plan Fails to Address Medical Claims BLACKJEWEL LLC: UST Says Advisors Shouldn't Be Paid Ahead of Others BOY SCOUTS OF AMERICA: Bradley, Advise Methodist Churches BRANDED APPAREL: $175K Sale of All Assets to JS Brands Approved BRIGGS & STRATTON: Court Approves Bankruptcy Wind-Down Plan CALIFORNIA PIZZA: Hires New CFO After Exiting Chapter 11 CARLOS H. ORTIZ COLON: $195K Sale of San Juan Property Approved CHESAPEAKE ENERGY: Court Approves Deal With Williams CHESAPEAKE ENERGY: Davis, Vinson 3rd Update on FILO Term Lenders CHINESEINVESTORS.COM INC: Creditors Committee Asks for Trustee CITIUS PHARMACEUTICALS: Incurs $17.5M Net Loss in Fiscal 2020 CLOUDERA INC: Moody's Assigns Ba3 CFR, Outlook Stable COMMERCEHUB INC: Moody's Affirms B3 CFR on Proposed Refinancing COMMUNITY HEALTH: Moody's Assigns Caa2 Rating on Senior Sec. Notes COROTOMAN INC: M. Sheehan Named as Chapter 11 Trustee CRED INC: Investor Says Company on Track for Chapter 11 Sale CREW ENERGY: DBRS Confirms B(low) Issuer Rating, Trend Negative CVR ENERGY: Fitch Affirms BB- LT IDR, Outlook Negative DA VINCI ENGINEERING: Hires Metro Tax as Accountant DESOTO OWNERS: Romspen Says Blalock, NDC Hirings Premature EARLY BIRD FOODS: Unsecured Creditors Will Get 10% in Plan ECOARK HOLDINGS: To Effect 1-for-5 Reverse Stock Split ECS LABS: Case Summary & 5 Unsecured Creditors ENCORE CAPITAL: Fitch Assigns BB+ Rating on EUR415MM Sec. Notes ENERGY FISHING: Proposed Enterprise Auction of 8 Trucks Approved ENLINK MIDSTREAM: Fitch Assigns BB+ Rating on New Unsec. Notes ENLINK MIDSTREAM: Moody's Assigns Ba2 Rating to New Unsec. Notes ERESEARH TECHNOLOGY: Moody's Reviews B3 CFR for Downgrade EUROPCAR MOBILITY: Seeks US Recognition of Restructuring in France EVEREST HOTEL: Seeks to Hire Leasure Gow as Special Counsel EVEREST HOTEL: Selling 2 Hotels & Restaurant for $2.55 Million EVERETT ALLEN LASH: $7K Sale of 2009 Mercedes GL450 Approved EW SCRIPPS: Fitch Assigns BB(EXP) Rating on New Secured Term Loan EXTRACTION OIL: UST Says Plan's Opt-Out Procedure Impermissible FENDER MUSICAL: Moody's Alters Outlook on B1 CFR to Stable FORTOVIA THERAPEUTICS: Aquestive Buying Zuplenz Assets for $25K FOXWOOD HILLS: Correia Buying 6 Westminster Lots for $2.5K Each FUSE GROUP: Incurs $51,411 Net Loss in Fiscal 2020 GARRETT MOTION: Puts Off Start of Bankruptcy Auction to Dec. 21 GENESIS ENERGY: Moody's Rates New Unsecured Notes B1 GFL ENVIRONMENT: Moody's Assigns Ba3 Rating to New $1B Sec. Notes GIBSON ENERGY: DBRS Gives Provisional BB Rating, Trend Stable GL BRANDS: Case Summary & 20 Largest Unsecured Creditors GRANGE ROAD: Voluntary Chapter 11 Case Summary GREEN TREE 1996-03: Moody's Downgrades Class M-1 Debt to C GS MORTGAGE 2013-GC10: Fitch Downgrades Class E Certs to Bsf GTT COMMUNICATIONS: Moody's Downgrades CFR to Caa2, Outlook Neg. GULFPORT ENERGY: Gets Court Approval for $580 Mil. DIP Loan HARSCO CORPORATION: Moody's Downgrades CFR to Ba3, Outlook Neg. HJJ FITNESS: Hires Edwin H. Breyfogle as Counsel HOLLINGSWORTH FARMS: $3M Sale of 836-Acre Lowndes Property Okayed HURDL INC: To Seek Confirmation of Pinnacle-Backed Plan on Jan. 7 IMPRESA HOLDINGS: $10.5M Sale of All Assets to Crestview Approved IN-SHAPE HOLDINGS: Aquiline, Insider Group Has $45.5M Credit Bid INGEVITY CORPORATION: Fitch Affirms BB LT IDR, Outlook Stable INGRAM MICRO: Moody's Reviews Ba1 CFR for Downgrade INNOVATION PET: RS1 Innovation Buying All Assets for $500K INTELLIPHARMACEUTICS INT'L: Changes Venue for Annual Meeting JACOBSON HOTELS: Subchapter V Trustee Hires KenWood as Accountant JAMES M. THOMPSON: Plan Confirmed After Estero Objection Resolved KAYA HOLDINGS: To Effect 1-for-15 Reverse Stock Split KB US HOLDINGS: Bankruptcy Plan Okayed for Creditor Vote LEAFCEAUTICALS INC: Case Summary & 20 Largest Unsecured Creditors LRGHEALTHCARE: Concord Is Sole Bidder for 2 Hospitals MAJESTIC HILLS: Plan Filing Deadline Extended to Feb. 15 MALLINCKRODT PLC: S&L et al. Advise School District Class Claimants MANZANA CAPITAL: Unsecured Creditors to Recover 100% in Plan MEGIDO SERVICE: Lone Creditor Offered Medallions, $250K in Plan MICROCHIP TECHNOLOGY: Fitch Alters Outlook on BB+ LT IDR to Stable MOORE TRUCKING: Agrees to Jan. 18 Deadline to Amend Disclosures MOORE TRUCKING: Walter Questions Funding for Plan MSU ENERGY: Fitch Affirms CCC LT Issuer Default Ratings NABORS INDUSTRIES: Fitch Lowers Issuer Default Rating to 'RD' NEWELL MOWING: Green Man Lawn Hits Chapter 11 NORTHWEST HARDWOODS: Hires Huron Consulting as Financial Advisor NORTHWEST HARDWOODS: Seeks to Hire Gibson Dunn as Attorney NORTHWEST HARDWOODS: Seeks to Hire Young Conaway as Co-Counsel NOSCE TE IPSUM: Feb. 24 Hearing on Disclosure Statement NOSCE TE IPSUM: Unsecureds Unimpaired in Sale Plan OLYMPIC RESTAURANTS: Hires CG Accounting as Accountant OUTERSTUFF LLC: Moody's Ups CFR to Caa2 on Improved Liquidity P8H INC: Trustee Hires Prager Metis as Accountant PACIFIC DRILLING: Reports Overwhelming Acceptance of Plan PBF HOLDING: Moody's Downgrades CFR to B1, Outlook Negative PLUMBING PROFESSIONALS: Case Summary & 9 Unsecured Creditors PPV INC: PWW-Led Auction for All Assets on Dec. 28 PRAIRIE ECI: Moody's Lowers CFR to B1; Alters Outlook to Stable PURDUE PHARMA: Sacklers Deflect Blame for Opioid Crisis QUANTUM HEALTH: Moody's Assigns B3 CFR on Positive Cash Flow ROCKET TRANSPORTATION: Seeks to Hire Jaafar Law as Counsel ROCKIES EXPRESS: Moody's Downgrades CFR to Ba2, Outlook Stable ROCKY MOUNTAIN: Hires Blackwell & Pressley as Accountant RUBY TUESDAY: Bankruptcy Plan Cleared for Creditor Vote RUE21 INC: Opening 15 New Stores 3 Years After Emergence SAEXPLORATION HOLDINGS: Court Okays SEC Accounting Fraud Settlement SAHBRA FARMS: Shelly Says Settlement With Streetsboro Reached SCARISBRICK LAND: Case Summary & 2 Unsecured Creditors SEADRILL LTD: AOD Facility Lenders Use $97.2 Mil. to Repay Debt SENIOR CARE: Amended Second Joint Plan Confirmed by Judge SEP-PRO SYSTEMS: Hires Nelson M. Jones III as Counsel SHELTON BROTHERS: Case Summary & 20 Largest Unsecured Creditors SHERRITT INT'L: DBRS Hikes Issuer Rating to B, Trend Stable SIGNATURE BANK: Fitch Expects to Rate Preferred Stock BB(EXP) SIOUX FALLS: Voluntary Chapter 11 Case Summary SOLARWINDS HOLDINGS: Moody's Reviews B1 CFR for Downgrade SORROEIX INC: Dec. 29 Hearing on $3M Sale of 63 Memphis Houses SPEEDBOAT JV: Dispute With Wilmington Heads to Plan Trial TALOS ENERGY: Fitch Expects to Rate LT IDR B-(EXP) TD HOLDINGS: Jialin Cui Quits as Director TEINE ENERGY: Moody's Affirms B2 CFR, Outlook Stable TEMPLE UNIVERSITY: Fitch Affirms BB+ IDR; Alters Outlook to Pos. TEXAS WELLNESS: Case Summary & 20 Largest Unsecured Creditors TGP HOLDINGS III: Moody's Affirms B3 CFR; Alters Outlook to Pos. THE SCRIPPS: Moody's Assigns Ba3 Rating to New $400MM Sec. Debt THE SCRIPPS: Moody's Rates New $700MM Secured Notes Ba3 THOMAS R. MCCONNELL: $3.5K Payment to IRS from Property Sale Okayed TOWN SPORTS: Court Okays Chapter 11 Bankruptcy Plan TPT GLOBAL: S. Hasan is New Global Marketing and Media Director TRANSOCEAN LTD: Whitebox Default Claim From Debt Swap Denied TRC FARMS: CNH Industrial Says Amended Plan Still Not Feasible TRICORBRAUN HOLDINGS: Moody's Affirms B3 CFR, Outlook Stable US STEEL: Moody's Affirms Caa1 CFR on Weak Debt Protection Metrics VALARIS PLC: RCF Agent Says Plan Patently Unconfirmable VALARIS PLC: Says Amended Disclosures Address RCF Objections VTV THERAPEUTICS: Subsidiary Signs License Deal with Anteris WAVE COMPUTING: Has $57.5M Deal With Confidential Buyer [^] BOND PRICING: For the Week from December 14 to 18, 2020 ********* 2017 IAVF WINDY: $42.15M Sale of All Assets to Second City Approved ------------------------------------------------------------------- Judge Jack B. Schmetterer of the U.S. Bankruptcy Court for Northern District of Illinois authorized 2017 IAVF Windy City Fox Run, LLC and affiliates to sell substantially all assets to Second City Acquisitions, LLC for $42.15 million, on the terms of their Real Estate Purchase and Sale Agreement dated Dec. 7, 2020. The Auction was conducted on Dec. 4, 2020. The offer of Crazy Kids, LLC, in the amount of $41.9 million is the next-highest and second-best bid. Crazy Kids deposited $2,004,000 with the escrow agent pursuant to the Bid Procedures Order. The Sale Hearing was held on Dec. 15, 2020. The sale is free and clear of all Liabilities and Encumbrances. Upon the Closing Date, the sale proceeds, including the Deposit, less all customary closing costs, credits, and amounts to be paid to M&M and the Stalking Horse Bidder, ACG Iowa Acquisitions, LLC, will be deposited in the Debtors' respective DIP bank accounts. The Debtors will cooperate in all aspects to ensure a timely closing of the Sale and promptly turn over possession, custody, and control of the Property to Purchaser on the Closing Date. At Closing, Marcus & Millichap Real Estate Investment Services of Chicago will be paid fees in the amount of $1,264,500 and reimbursement of costs in the amount of $4,992. The M&M Commission will be free and clear of all liens, claims and encumbrances, and paid, at Closing, without further order of the Court. The Debtors are authorized to pay the Break-Up Fee and Bid Protections in an amount up to, and not to exceed, $980,000 to the Stalking Horse Bidder out of the proceeds of the Sale. The Break-Up Fee and Bid Protections will be paid from the proceeds, at Closing, as a superpriority administrative expense claim senior to all other administrative expense claims, and prior to any recovery by the Trustee. The escrow agent is directed to return the remainder of the Stalking Horse Bidder Deposit ($400,000) to the Stalking Horse Bidder. Additionally, at Closing of the sale to the Purchaser, the escrow agent is directed to return the Crazy Kids Deposit to Crazy Kids. The Order will take effect immediately, be immediately enforceable and its provisions will be self-executing. The Order will not be stayed pursuant to Bankruptcy Rules 6004(g), 6006(d), 7062, or otherwise. The Debtors are authorized to close the Sale of the Property to the Purchaser immediately upon the entry of the Order pursuant to the terms of the Agreement. A copy of the Agreement is available at https://tinyurl.com/y9t92d9h from PacerMonitor.com free of charge. About 2017 IAVF Windy City Fox Run On Oct. 7, 2020, 2017 IAVF Windy City Fox Run, LLC (Bankr. N.D. Ill. Case No. 20-18377, Lead Case) and affiliates 2017 IAVF Windy City Parkside LLC (Bankr. N.D. Ill. Case No. 20-18379), 2017 IAVF Windy City Shaddle LLC (Bankr. N.D. Ill. Case No. 20-18380), and 2017 IAVF Windy City Villa Brook LLC (Bankr. N.D. Ill. Case No. 20-18381) sought Chapter 11 protection. The petitions were signed by Andrew Belew, president, Better Housing Foundation, Inc., as manager. Each of the Debtors was estimated to have assets in the range of $10 million to $50 million and $50 million to $100 million in debt. The cases are assigned to Judge Carol A. Doyle. The Debtors tapped Kevin H. Morse, Esq., at Clark Hill PLC as counsel. 3301 HO: Seeks Approval to Hire Eric A. Liepins as Counsel ---------------------------------------------------------- 3301 HO, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Eric A. Liepins, P.C. as its legal counsel. The Debtor needs legal assistance to orderly liquidate its assets, reorganize the claims of the estate, and determine the validity of claims asserted in the estate. Liepins will be paid at these rates: Eric A. Liepins $275 per hour Paralegals and Legal Assistants $30 - $50 per hour The firm received a retainer of $5,000, plus the filing fee. In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Eric Liepins, Esq., disclosed in court filings that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Facsimile: (972) 991-5788 E-mail: eric@ealpc.com About 3301 HO LLC 3301 HO, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-43756) on Dec. 14, 2020. The petition was signed by C. Joseph Gampper, manager. At the time of the filing, the Debtor disclosed $1,402,500 in total assets and $763,550 in total liabilities. Eric A. Liepins, Esq., serves as the Debtor's legal counsel. 3443 ZEN GARDEN: Jan. 26, 2021 Plan Confirmation Hearing Set ------------------------------------------------------------ Gregory Milligan, Chapter 11 Trustee of debtor 3443 Zen Garden, L.P., filed with the U.S. Bankruptcy Court for the Western District of Texas, Austin Division, a motion for order conditionally approving the Disclosure Statement for Compromise Chapter 11 Plan. On December 1, 2020, Judge H. Christopher Mott granted the motion and ordered that: * The Disclosure Statement for Chapter 11 Trustee's Amended Liquidating Plan is approved as having adequate information as required by section 1125 of the Bankruptcy Code. * Jan. 26, 2021 at 10:00 a.m. in the U.S. Bankruptcy Court for the Western District of Texas, Austin Division, 903 San Jacinto Boulevard, Suite 326, Austin, Texas 78701 is the hearing to consider confirmation of the Trustee's Amended Liquidating Plan. * Dec. 31, 2020 at 5:00 p.m. is set as the deadline by which all ballots accepting or rejecting the Plan must be actually received by the Trustee's voting and tabulation agent. * Jan. 7, 2021 is the deadline for the Trustee to file a tabulation of the results of the voting. * Dec. 31, 2020 is the deadline to file objections, if any, to confirmation of the Plan. * Jan. 19, 2021 is the deadline to file any replies to timely filed objections to confirmation of the Plan. About 3443 Zen Garden 3443 Zen Garden, LP is a "single asset real estate" debtor. 3443 Zen Garden was formed to purchase and develop a property in Austin, Texas, as a 109-acre mixed use campus with offices, hotels, and retail spaces and utilize state of the art "green" technology, renewable energy resources and sustainable design. The property purchased by 3443 Zen was the site of a semi conductor plant used in the 1970s by Motorola. In early 2018, Romspen provided a $125 million construction loan to the Debtor to fund the Project. On March 22, 2020, creditors Lyle America, Austin Glass & Mirror, Inc. and ACM Services, LLC filed an involuntary Chapter 11 petition against 3443 Zen Garden (Bankr. W.D. Texas Case No. 20-10410). The petitioning creditors are represented by Kell C. Mercer, Esq., at Kell C. Mercer, PC. Judge H. Christopher Mott oversees the case. Gregory S. Milligan was appointed as Chapter 11 trustee for 3443 Zen Garden. The trustee has tapped Wick Phillips Gould & Martin, LLP as his bankruptcy counsel; HMP Advisory Holdings, LLC as financial advisor; and Gindler, Chappell, Morrison & Co. PC (GCMC) as tax accountant. 3443 ZEN GARDEN: Unsecureds to Get At Least 40% in Trustee Plan --------------------------------------------------------------- Gregory S. Milligan, the Chapter 11 Trustee for 3443 Zen Garden, L.P., is proposing a Liquidating Plan for the Debtor. The Plan provides a recovery to allowed general unsecured claims principally through the settlement of all the Debtor's, the Reorganized Debtor's, the Chapter 11 Trustee's, the Estate's and any of their respective successors' and assigns' potential claims and causes of action against the Debtor's largest creditor, Romspen Mortgage Limited Partnership ("Romspen" or the "Lender"), in exchange for: 1. $600,000 to provide at least a 40 percent recovery to non-priority Allowed General Unsecured Claims (the "Settlement Carve-Out") through a trust (the "Creditor Trust") with the possibility that additional asset recoveries and adjudication of claims objections may increase this distribution; 2. Romspen's subordination of its $56 million unsecured deficiency claim to prevent dilution of and to maximize the recovery to general unsecured creditors; 3. Romspen's successfully obtaining the subordination of the Panache deficiency and other General Unsecured Claims to prevent dilution of and to maximize the recovery to Non-Insider general unsecured creditors; and 4. Romspen's agreement to the Chapter 11 Trustee's continued use of cash collateral on hand to fund the Estate's, the Plan's and the Creditor Trust's administrative expenses; provided that any excess funds that remain on hand for unused surplus will be returned to Romspen upon termination of the Creditor Trust. The Plan places the Settlement Carve-Out, Romspen's remaining cash collateral and all the Debtor's remaining assets into the Creditor Trust which will liquidate the assets and distribute the proceeds to holders of allowed claims in the priority governed by the Bankruptcy Code, subject to the voluntary subordinations set forth in the Plan, however, the Settlement Carve-Out is reserved for non-priority, Non-Insider, General Unsecured Claims. The Chapter 11 Trustee estimates less than $1.5 million in Allowed General Unsecured Claims will share in the $600,000 Settlement Carve-Out, providing these creditors at least a 40% recovery on their claims, which the Creditor Trustee can distribute quickly upon confirmation of the Plan. The Chapter 11 Trustee submits this is a compelling recovery to unsecured creditors in a case that otherwise faces a $56 million unsecured deficiency claim with risky, unliquidated, and hotly contested litigation claims providing the only potential means to achieve substantial creditor recoveries. A full-text copy of the Chapter 11 Trustee's Amended Liquidating Plan dated Nov. 25, 2020, is available at https://bit.ly/3ra5Hxb from PacerMonitor.com at no charge. Counsel for the Chapter 11 Trustee: Jason M. Rudd Scott D. Lawrence Lauren K. Drawhorn Daniella G. Heringer Email: jason.rudd@wickphillips.com scott.lawrence@wickphillips.com lauren.drawhorn@wickphillips.com daniella.heringer@wickphillips.com About 3443 Zen Garden 3443 Zen Garden, LP is a "single asset real estate" debtor. 3443 Zen Garden was formed to purchase and develop a property in Austin, Texas, as a 109-acre mixed use campus with offices, hotels, and retail spaces and utilize state of the art "green" technology, renewable energy resources and sustainable design. The property purchased by 3443 Zen was the site of a semi conductor plant used in the 1970s by Motorola. In early 2018, Romspen provided a $125 million construction loan to the Debtor to fund the Project. On March 22, 2020, creditors Lyle America, Austin Glass & Mirror, Inc. and ACM Services, LLC filed an involuntary Chapter 11 petition against 3443 Zen Garden (Bankr. W.D. Texas Case No. 20-10410). The petitioning creditors are represented by Kell C. Mercer, Esq., at Kell C. Mercer, PC. Judge H. Christopher Mott oversees the case. Gregory S. Milligan was appointed as Chapter 11 trustee for 3443 Zen Garden. The trustee has tapped Wick Phillips Gould & Martin, LLP as his bankruptcy counsel; HMP Advisory Holdings, LLC as financial advisor; and Gindler, Chappell, Morrison & Co. PC (GCMC) as tax accountant. 85 FLATBUSH RHO: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Three affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- 85 Flatbush Rho Mezz LLC 20-23280 c/o GC Realty Advisors, LLC 3284 N 29th Court Hollywood, FL 33020 85 Flatbush Rho Hotel LLC 20-23281 c/o GC Realty Advisors, LLC 3284 N 29th Court Hollywood, FL 33020 85 Flatbush Rho Residential LLC 20-23282 c/o GC Realty Advisors, LLC 3284 N 29th Court Hollywood, FL 33020 Business Description: 85 Flatbush RHO Mezz LLC is the 100% owner of 85 Flatbush RHO Hotel LLC and 85 Flatbush RHO Residential LLC. Hotel and Residential collectively own the property located at 85 Flatbush Extension, Brooklyn, New York. The Property is a 132,641 square foot, twelve- story, mixed use property consisting of a 174 room boutique hotel on the first 6 floors known as the Tillary Hotel Brooklyn, a 58,652 square foot 64-unit luxury multi- family building and a 5,642 square foot parking garage. The residential component of the Property has nine studios, 26 one- bedroom units and 29 two-bedroom units. Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. Robert D. Drain Debtors' Counsel: Fred B. Ringel, Esq. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C. 875 Third Avenue New York, NY 10022 Tel: (212) 603-6300 85 Flatbush Rho Mezz's Estimated Assets: $50 million to $100 million 85 Flatbush Rho Mezz's Estimated Liabilities: $50 million to $100 million 85 Flatbush RHO Hotel LLC's Estimated Assets: $10 million to $50 million 85 Flatbush RHO Hotel LLC's Estimated Liabilities: $50 million to $100 million 85 Flatbush RHO Residential's Estimated Assets: $10 million to $50 million 85 Flatbush RHO Residential's Estimated Liabilities; $50 million to $500 million The petitions were signed by David Goldwasser, chief restructuring officer. Copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/USVBUTQ/85_Flatbush_RHO_Mezz_LLC__nysbke-20-23280__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/HAUZ3CQ/85_Flatbush_RHO_Hotel_LLC__nysbke-20-23281__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/HNYNZMY/85_Flatbush_RHO_Residential_LLC__nysbke-20-23282__0001.0.pdf?mcid=tGE4TAMA 85 Flatbush RHO Mezz LLC stated it has no unsecured creditors. List of 85 Flatbush RHO Hotel LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Akiva Hersh Klein $100,000 2. Chesky Berkowitz $250,000 3. Con Edison $144,699 P.O. Box 1701 New York, NY 10116 4. Duetto Research Inc. $31,076 2001 Gateway Place #520W San Jose, CA 95110 5. Dura-Lift Inc. $29,259 201 Hartle Street Suite B Sayreville, NJ 08872 6. Enercon Technical Service $14,139 1233 McDonald Avenue Brooklyn, NY 11230 7. Greater Shield $369,452 P.O. Box 110836 Brooklyn, NY 11211 8. Green & White $16,344 Boutique Linen 410 Garibaldi Avenue Lodi, NJ 07644 9. Hershy Rubin $100,000 10. House of Kooser $18,142 P.O. Box 3184 New York, NY 10163 11. NYC Department of Finance $239,724 P.O. BOX 5060 Kingston, NY 12402 12. NYS Sales Tax $140,807 Processing P.O. Box 15168 Albany, NY 12212 13. Oracle America, Inc. $20,824 P.O. Box 203448 Dallas, TX 75320 14. Rightway Restoration LLC $34,297 98 Beard St. Brooklyn, NY 11231 15. Shmiel Chaim Brach $250,000 16. Simon's Industrial Supply $33,821 45-02 37th Avenue Long Island City, NY 11101 17. TravelClick Inc. $21,050 P.O. Box 71199 Chicago, IL 60694 18. Yanky Rubin $100,000 19. Yanky Rubin $150,000 20. Yossi Itzkowitz $200,000 List of 85 Flatbush RHO Residential LLC's Two Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Con Edison $0 P.O. Box 1701 New York, NY 10116 2. National Grid $0 P.O. Box 11741 Newark, NJ 07101 85 FLATBUSH: Tillary Hotel in Chapter 11 Amid Travel Slump ---------------------------------------------------------- Allison McNeely of Bloomberg reports that the owner of Brooklyn's Tillary Hotel, the boutique lodging property that briefly became a homeless shelter after being shuttered by the pandemic, has filed for bankruptcy. The firm, 85 Flatbush RHO Mezz LLC, plans to convert the residential portion of the downtown 174-room hotel and 64-unit luxury apartment building into condominiums, according to court papers. The Chapter 11 petition was filed Dec. 18, 2020, in the Southern District of New York. The Tillary, which bills itself as the exemplification of the borough's cool factor, has struggled since the COVID-19 outbreak forced management to close its doors in March 2020, according to the filing. It reopened on May 15, 2020 to provide shelter to homeless people until June 30, 2020, before reopening to the general public on July 15, 2020. Occupancy remains depressed because of the pandemic and the hotel's parent is unable to keep up with its debts due to a "substantially reduced" occupancy rate. Its secured lender gave notice that it intended to force a sale of its assets, according to the filing. With many properties already shuttered for nearly a year, distressed debt investors and restructuring specialists expect that 2021 will lead to a shakeout of the travel and hospitality industry. Lenders are running out of patience and hotels are running out of time, with the rollout of vaccines likely to take months and a return to some measures of pre-Covid travel not expected until the second half of 2021. About Tillary Hotel 85 Flatbush RHO Mezz LLC is the 100% owner of 85 Flatbush RHO Hotel LLC and 85 Flatbush RHO Residential LLC. Hotel and Residential collectively own the property located at 85 Flatbush Extension, Brooklyn, New York. The Property is a 132,641 square foot, twelve-story, mixed use property consisting of a 174 room boutique hotel on the first 6 floors known as the Tillary Hotel Brooklyn, a 58,652 square foot 64-unit luxury multi-family building and a 5,642 square foot parking garage. The residential component of the Property has nine studios, 26 one-bedroom units and 29 two-bedroom units. 85 Flatbush Rho Mezz LLC, 85 Flatbush Rho Hotel LLC, and 85 Flatbush Rho Residential LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 20-23280 to 20-23282) on Dec. 18, 2020. 85 Flatbush Rho Mezz was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Robert D. Drain is the case judge. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C., led by Fred B. Ringel, is the Debtors' counsel. ALGY TRIMMINGS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Algy Trimmings Co., Inc. DBA Algy DBA Algy Team DBA Algy Performs 440 N.E. 1st Ave Hallandale, FL 33009 Business Description: Algy Trimmings Co., Inc. -- https://www.algyteam.com -- manufactures guard uniforms, winter guard uniforms, dance team uniforms, drill team uniforms, majorette, cheer, campwear and warm-ups. Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Southern District of Florida Case No.: 20-23791 Judge: Hon. Peter D. Russin Debtor's Counsel: Thomas L. Abrams, Esq. GAMBERG & ABRAMS 633 S. Andrews Av. Suite 500 Fort Lauderdale, DL 33301 Tel: (954) 523-0900 Email: tabrams@tabramslaw.com Total Assets: $382,483 Total Liabilities: $2,494,623 The petition was signed by Susan Gordon, 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/XYRLHXY/ALGY_TRIMMINGS_CO_INC__flsbke-20-23791__0001.0.pdf?mcid=tGE4TAMA ARMSTEAD RISK: Hires McLoughlin O'Hara as Counsel ------------------------------------------------- Armstead Risk Management, Inc., has filed an amended application with the U.S. Bankruptcy Court for the Eastern District of New York seeking approval to hire McLoughlin O'Hara Wagner & Kendall, LLP, as counsel. Armstead Risk requires McLoughlin O'Hara to: a. perform all necessary services as the Debtor's counsel that are related to the Debtor's reorganization and the bankruptcy estate; b. assist the Debtor in protecting and preserving the estate assets during the pendency of the Chapter 11 case, including the prosecution and defense of actions and claims arising from or related to the estate of the Debtor's reorganization; c. prepare all documents and pleadings necessary to ensure the proper administration of its case; and d. perform all other bankruptcy-related necessary legal services. McLoughlin O'Hara will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Daniel O'Hara, Esq., a name partner, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Daniel M. O'Hara, Esq. McLoughlin, O'Hara, Wagner & Kendall, LLP 250 Park Ave., 7th Fl. New York, NY 10177 Tel: (212) 867-8285 Fax: (917) 382-3934 E-mail: dohara@mowklaw.com About Armstead Risk Management Armstead Risk Management, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-41489) on March 14, 2019. At the time of the filing, the Debtor was estimated to have assets and liabilities of between $1 million and $10 million. The case is assigned to Judge Elizabeth S. Stong. The Law Office of Courtney Davy is the Debtor's legal counsel. ATLANTIC PROPERTIES: Seeks to Tap J. Scott Logan as Counsel ----------------------------------------------------------- Atlantic Properties, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maine to employ the Law Office of J. Scott Logan, LLC to handle its Chapter 11 case. J. Scott Logan has agreed to represent the Debtor on an hourly rate of $225. The law firm received a retainer in the amount of $6,500, of which $1,738 was used to pay the filing fee. Mr. Logan anticipates total fees in the range of $11,500, inclusive of the filing fee. Mr. Logan disclosed in court filings that he and his firm are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. Lang & Klain can be reached at: J. Scott Logan, Esq. Law Office of J. Scott Logan, LLC 75 Pearl Street, Ste. 211 Portland, ME 04101 Telephone: (207)699-1314 About Atlantic Properties Atlantic Properties, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Me. Case No. 20-20444) on Dec. 8, 2020. Judge Michael A. Fagone oversees the case. The Law Office of J. Scott Logan, LLC serves as the Debtor's legal counsel. AUGUSTA INVESTMENTS: Seeks to Hire Aldo G. Bartolone as Counsel --------------------------------------------------------------- Augusta Investments Corporation seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Bartolone Law, PLLC as its legal counsel. The law firm will render these services: (a) advise as to the Debtor's rights and duties in its Chapter 11 case; (b) prepare pleadings related to the case; and (c) take other necessary actions incident to the proper preservation and administration of the estate. The hourly rates charged by the firm's counsel and staff are: Attorneys $375 Junior paraprofessionals $125 Prior to its bankruptcy filing, the Debtor paid a retainer fee of $16,717, of which $4,700.50 was used to pay for pre-bankruptcy services and costs incurred. Aldo G. Bartolone does not represent interests adverse to the Debtor or to the estate and it has no connection with the creditors or any other party-in-interest, according to court filings. The firm can be reached through: Aldo G. Bartolone, Jr., Esq. Bartolone Law, PLLC. 1030 N. Orange Ave., Suite 300 Orlando, FL 32801 Telephone: (407) 294-4440 Facsimile: (407) 287-5544 Email: aldo@bartolonelaw.com About Augusta Investments Corporation Augusta Investments Corporation, a privately held company in the traveler accommodation industry, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06630) on Dec. 1, 2020. The petition was signed by Marco Kozlowski, managing member. At the time of filing, the Debtor disclosed $1 million to $10 million in both assets and liabilities. Bartolone Law, PLLC, led by Aldo G. Bartolone, Jr., Esq., serves as the Debtor's counsel. B&B AESTHETICS: Case Summary & 3 Unsecured Creditors ---------------------------------------------------- Debtor: B&B Aesthetics Labs, LLC Arlington Heights Finance Station PO Box 470458 3101 West 6th Street Fort Worth, TX 76147 Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43815 Debtor's Counsel: Robert A. Simon, Esq. WHITAKER CHALK SWINDLE AND SCHWARTZ 301 Commerce St. Ste 3500 Fort Worth, TX 76102 Tel: 817-878-0500 Email: rsimon@whitakerchalk.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Carlos Frias, chief executive officer. A copy of the Debtor's list of three unsecured creditors is available for free at: https://www.pacermonitor.com/view/DZ3355I/BB_Aesthetics_Labs_LLC__txnbke-20-43815__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/D6N3PCY/BB_Aesthetics_Labs_LLC__txnbke-20-43815__0001.0.pdf?mcid=tGE4TAMA BC HOSPITALITY: Proposes February Auction for All Assets -------------------------------------------------------- BC Hospitality Group, Inc., and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to authorize bidding procedures in connection with the auction sale of substantially all their assets. A hearing on the Motion is slated for Jan. 7, 2021 at 9:30 a.m. (ET). The objection deadline is Dec. 29, 2020 at 4:00 p.m. (ET). As a result of the continued effects on their business caused by the coronavirus disease 2019 pandemic, the Debtors are facing near-term liquidity issues. To address these issues, the Debtors and their professional advisors have determined that the best course of action to maximize the value of the Debtors' estates for the benefit of all stakeholders is to sell their business through these chapter 11 cases. In the weeks leading up to the Petition Date, the Debtors and their professionals promptly reached out to certain of the Debtors' equity investors to determine their interest in providing financing in connection with the filing of the chapter 11 cases and the pursuit of a sale process by the Debtors. The investors offered to provide the Debtors with a DIP facility to support the sale process within the context of a chapter 11 proceeding. The DIP Facility and related documents include certain milestones related to the Debtors' sale process. Among other things, the Case Milestones required the Debtors to file the Motion on the date thereof. The Debtors must also file a plan of reorganization by no later than 21 days after the Petition Date, obtain entry of an order approving the Bidding Procedures by no later than 35 days after the Petition Date, and obtain entry of an order confirming the Plan by no later than 75 days after the Petition Date. The proposed Bidding Procedures provide the Debtors with a cost-effective mechanism to realize value through the Plan through either (a) the sale of their assets or (b) a reorganization through the issuance, and purchase by a plan sponsor, of new common equity interests in the reorganized Debtors and the continued business of the Debtors. The Debtors engaged Ankura Consulting Group, LLC and its affiliates in December 2020 to assist with their marketing process for potential investors or purchasers for their business through a chapter 11 process. The salient terms of the Bidding Procedures are: a. Bid Deadline: Feb. 11, 2021 at 4:00 p.m. (ET) b. Initial Bid: Each Bid must clearly set forth the terms of any proposed Transaction, including identifying any cash and non-cash components of the proposed Transaction consideration, including, for example, certain liabilities to be assumed by the Acceptable Bidder as part of the Plan. c. Deposit: 10% of the aggregate value of the cash and non-cash consideration of the Bid d. Auction: Unless otherwise indicated as provided by the Bidding Procedures Order, the Auction will take place at 10:00 a.m. (ET) on Feb. 16, 2021, either via videoconference or at the offices of Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 N. King Street, Wilmington, Delaware 19801, or such later date and time or location as selected by the Debtors, in consultation with the Consultation Parties. e. Bid Increments: equal to 10% of the Baseline Bid f. Sale Hearing: Feb. 19, 2021 g. Sale Objection Deadline: Feb. 12, 2021 at 4:00 p.m. (ET) h. Credit Bid: Any Secured Creditor will have the right to credit bid all or a portion of the value of such Secured Creditor's claims. i. Bid Protections: Absent further order of the Court, the stalking horse agreement will limit (x) the break-up fee, if any, to an amount that will not exceed 3% of the Purchase Price, and (y) the reimbursement, if any, of the reasonable and documented out-of-pocket fees and expenses in an amount that will not exceed $100,000. j. Consummation of any Transaction will be on an "as is, where is" basis and without representations or warranties of any kind, nature, or description by the Debtors or their estates, except as specifically accepted or agreed to by the Debtors, in consultation with the Consultation Parties. By the Motion, and in connection with the Bidding Procedures, the Debtors are asking authorization, but not direction, to enter into one or more asset purchase agreements with one or more Stalking Horse Bidders, as applicable, and in consultation with the DIP Secured Parties and the Subchapter V Trustee. In the event that the Debtors enter into any Stalking Horse APA, the Debtors will file the Stalking Horse Notice with the Court and serve such notice on the Sale Notice Parties. The Debtors are required to provide creditors with 21 days' notice of the Auction. Finally, the Debtors ask that the Bidding Procedures Order be effective immediately by providing that the 14-day stay under Bankruptcy Rule 6004(h) is waived. About By Chloe By Chloe is a fast-casual vegan restaurant chain based in New York City. BC Hospitality Group Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-13103) on Dec. 14, 2020. BC Hospitality was estimated to have assets of $10 million to $50 million and liabilities of $1 million to $10 million. YOUNG CONAWAY STARGATT & TAYLOR, LLP, is the Debtors' counsel. ANKURA CONSULTING GROUP, LLC is the financial advisor. BLACKJEWEL LLC: Chapter 11 Case Proceeds Despite Ex-CEO Challenge ----------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that the beleaguered Chapter 11 case of Blackjewel LLC will proceed to a future plan confirmation hearing after a bankruptcy judge denied a motion by the coal miner's former CEO to convert the case to a Chapter 7 liquidation. None of the other stakeholders in the case -- including the unsecured creditors committee, the U.S. Trustee, and the Internal Revenue Service -- supported converting the case, Judge Benjamin A. Kahn said Thursday, December 17, 2020, for the U.S. Bankruptcy Court for the Southern District of West Virginia. The evidence put forth by Blackjewel's former CEO, Jeffery Hoops, was only monthly operating reports filed by the debtor. About Blackjewel LLC Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel was estimated to have $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Hon. Frank W. Volk is the case judge. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. The Office of the U.S. Trustee on July 3, 2019, appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Blackjewel LLC. Whiteford Taylor & Preston LLP is the Committee's counsel. BLACKJEWEL LLC: Kentucky Energy Cabinet Says Plan Not Feasible -------------------------------------------------------------- The Commonwealth of Kentucky, Energy and Environment Cabinet submitted an objection to the First Amended Disclosure Statement and First Amended Joint Chapter 11 Plan of Liquidation for Blackjewel L.L.C. and Its Affiliated Debtors. The Cabinet points out that the Plan violates Section 1129(a)(3) of the Bankruptcy Code because it violates applicable non-bankruptcy laws. It says the Plan fails to meet this threshold requirement by providing that permits will be transferred to the Trust without any plan for complying with conditions under Kentucky law for transferring permits, including, filing a joint application by the transferor and transferee, the payment of fees, and the transferee filing a satisfactory bond. The Cabinet claims that the Plan's exculpation of the Trust, Trustee, and others is abhorrent to the basic tenets of surface coal mining and reclamation law for protecting the environment and public health and safety. The Cabinet objects to the Plan because it does not adequately provide for payment of administrative expenses, and the Plan appears to favor professional fees over other administrative expenses, including the costs that will be needed to reclaim the permits. The Cabinet has submitted a claim for administrative expenses to include the costs of reclamation in excess of the bonds. The Cabinet objects to the Plan also as not being feasible because the permits sold but not yet transferred will require Debtors, as transferor, to submit a joint application with the purchasers to transfer the permits. The Cabinet also joins and adopts the objections filed by the United States Internal Revenue Service and Certain Other Federal Creditors and First Surety. The Cabinet objects to the release of any Debtor or non-Debtor party. A full-text copy of the Cabinet's objection dated December 10, 2020, is available at https://bit.ly/37w5Djn from PacerMonitor.com at no charge. About Blackjewel LLC Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel was estimated to have $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. The Office of the U.S. Trustee on July 3, 2019, appointed five creditors to serve on an official committee of unsecured creditors. Whiteford Taylor & Preston LLP is the Committee's counsel. BLACKJEWEL LLC: UHSI Says Plan Fails to Address Medical Claims -------------------------------------------------------------- United HealthCare Services, Inc., objects to the First Amended Disclosure Statement and First Amended Joint Chapter 11 Plan of Liquidation for Blackjewel L.L.C. and Its Affiliated Debtors. "During this case, the Debtors have not dealt with millions of dollars of medical claims that have been submitted to UHSI, as the administrator of their self-funded health plan, but not funded. The failure to authorize UHSI to deny these claims for lack of funding and provide such notice to the members of the health plan and the medical providers that rendered services to such members creates a series of disclosure, as well as notice and due process issues that prevent the approval of the Disclosure Statement or the Plan. In particular, the Disclosure Statement lacks adequate information under 11 U.S.C. Sec. 1125 by failing to address these claims. The failure to address these claims also renders the Plan not confirmable under 11 U.S.C. Secs. 1129(a)(2), (a)(3), (a)(9), and 1123," UHSI said. United HealthCare claims that the Disclosure Statement has failed to provide adequate information to allow the members and medical providers impacted by the Claims Hold, as well as other creditors that may be impacted by such claims, the opportunity to make an informed choice regarding the Plan by failing to provide any process for the submission, reconciliation, and treatment of the claims on the Claims Hold. United HealthCare points out that the Disclosure Statement also fails to provide adequate information under Section 1125 of the Bankruptcy Code because it does not discuss the impact of the allowance of unpaid claims on the Claims Hold on distributions to other creditors under the Plan. United HealthCare states that the Plan also fails to meet the requirement of Section 1123 of the Bankruptcy Code concerning the contents of the Plan by failing to classify the claims on the Claims Hold, identify whether they are impaired, and if they are impaired, describe their treatment. United HealthCare says that nothing in the Disclosure Statement or Plan suggests that the Debtors provided all members and medical providers affected by the Claims Hold with notice of the relief requested in the Plan. United HealthCare asserts that the Debtors must account for the payment of Allowed Claims on the Claims Hold by setting aside an amount the Court finds sufficient to ensure payment in full of Allowed Administrative Expense Claims and Allowed Other Priority Claims to satisfy their obligations under Sec. 1129(a)(9) and in light of the notice issues. A full-text copy of the United HealthCare's objection dated Dec. 10, 2020, is available at https://bit.ly/3mx2FiM from PacerMonitor.com at no charge. Counsel for United HealthCare: Raj A. Shah, Esquire Hendrickson & Long, PLLC 214 Capitol Street Charleston, WV 25301 Tel: 304-720-5516 Fax: 304-346-5515 E-mail: rshah@handl.com - and - Eric S. Goldstein, Esquire Latonia C. Williams, Esquire Jaime A. Welsh, Esquire SHIPMAN & GOODWIN LLP One Constitution Plaza Hartford, CT 06103 Tel: (860) 251-5037 Fax: (860) 251-5218 E-mail: egoldstein@goodwin.com lwilliams@goodwin.com jwelsh@goodwin.com About Blackjewel LLC Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel was estimated to have $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. The Office of the U.S. Trustee on July 3, 2019, appointed five creditors to serve on an official committee of unsecured creditors. Whiteford Taylor & Preston LLP is the Committee's counsel. BLACKJEWEL LLC: UST Says Advisors Shouldn't Be Paid Ahead of Others ------------------------------------------------------------------- John P. Fitzgerald, III, Acting United States Trustee for Region Four, objects to the First Amended Disclosure Statement and First Amended Joint Chapter 11 Plan of Liquidation for Blackjewel L.L.C. and Its Affiliated Debtors. The United States Trustee claims that the Disclosure Statement and Plan contemplate a process whereby holders of certain priority claims and administrative claimants are deemed to consent to treatment of their claim simply by abstaining from returning an election ballot or failing to object to the Amended Plan. The United States Trustee points out that the Plan contemplates the payment of certain professionals before other administrative claimants. The United States Trustee asserts that the provisions could be modified to be consistent with the Bankruptcy Code which would allow the United States Trustee to support confirmation of the Plan and Disclosure Statement. The U.S. Trustee says it is generally supportive of the plan of liquidation but says professionals should get paid under the Plan pari passu with other administrative claimants as classified by the Bankruptcy Code. A full-text copy of the United States Trustee's objection dated December 10, 2020, is available at https://bit.ly/34pupjw from PacerMonitor.com at no charge. About Blackjewel LLC Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel was estimated to have $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. The Office of the U.S. Trustee on July 3, 2019, appointed five creditors to serve on an official committee of unsecured creditors. Whiteford Taylor & Preston LLP is the Committee's counsel. BOY SCOUTS OF AMERICA: Bradley, Advise Methodist Churches --------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Bradley Arant Boult Cummings LLP and Moore & Rutt, P.A., submitted a verified statement to disclose that they are representing the Florida Conference of the United Methodist Church and Various Churches in the Conference in the Chapter 11 cases of Boy Scouts of America and Delaware BSA, LLC. In October 2020, several Conferences of the United Methodist Church and many United Methodist Churches retained Bradley to represent their interests in the Chapter 11 Cases. The addresses and identities of the Conferences of the United Methodist Church that retained Bradley are set forth in Exhibit A. The addresses and identities of the United Methodist Churches that retained by Bradley are attached as Exhibit B. Alaska Annual Conference of the United Methodist Church 1660 Patterson Street Anchorage, AK 99504 Pacific Northwest Annual Conference of the United Methodist Church 816 S. 216th Street Des Moines, WA 98198 New Mexico Annual Conference of the United Methodist Church 11816 Lomas Blvd. NE Albuquerque, NM 87112 Oregon-Idaho Annual Conference of the United Methodist Church 1505 SW 18th Avenue Portland, OR 97201-2524 Western North Carolina Conference of the United Methodist Church 13924 Professional Center Dr. Ste. 200 Huntersville, NC 28078 Peninsula-Delaware Conference of the United Methodist Church 139 N. State Street Dover DE 19901 Virginia Conference of the United Methodist Church 10330 Staples Mill Road Glen Allen, VA 23060 Greater New Jersey Annual Conference of the United Methodist Church 205 Jumping Brook Rd. Neptune, NJ 07753 The North Georgia Conference of the United Methodist Church, Inc., and The Trustees of the North Georgia Conference of the United Methodist Church, Inc. 1700 Century Circle NE Atlanta, GA 30345 The Great Plains Annual Conference of the United Methodist Church 1207 SW Executive Dr. Topeka, KS 66615 Eastern Pennsylvania Conference of the United Methodist Church 980 Madison Ave. Norristown, PA 19403 Central Texas Conference of the United Methodist Church 3200 E. Rosedale St. Fort Worth, TX 76105 Florida Conference of the United Methodist Church 450 Martin L. King Jr. Ave. Lakeland, FL 33815 Each of the United Methodist Churches set forth in Exhibit B is a Chartered Organization and holds a Claim against debtor Boy Scouts of America arising from BSA's obligation to indemnify and hold Chartered Organizations harmless for any injuries or damages arising out of official scouting activities or arising out of BSA membership standards, including, but not limited to, Indirect Abuse Claims and Claims held by scouts or other Persons for Abuse. Each of the United Methodist Churches set forth in Exhibit B also holds a Claim against BSA arising out of BSA's obligation to provide Chartered Organizations primary general liability insurance to cover Chartered Organizations and related entities with respect to Claims arising out of an official scouting activity, including, but not limited to, insurance coverage to cover Claims held by scouts or other Persons for Abuse. As of the date of this filing, the amount of each Claim held by the United Methodist Churches reflected in Exhibit B is unknown. Each of the United Methodist Churches set forth in Exhibit B is a member of one of the Conferences of the United Methodist Church set forth in Exhibit A. Generally, the Conferences of the United Methodist Church provide services to United Methodist Churches within their jurisdictions, including risk management services. Upon information and belief, and after due inquiry, Bradley does not own any claims against or any equity interest in the Debtors. Bradley reserves the right to supplement this disclosure as applicable. Counsel for the Florida Conference of the United Methodist Church and Various Churches in the Conference that are Chartered Organizations can be reached at: Edwin G. Rice, Esq. BRADLEY ARANT BOULT CUMMINGS LLP 100 N. Tampa Street Suite 2200 Tampa, FL 33602 Tel: (813) 559-5500 Fax: (813) 229-5946 E-mail: erice@bradley.com ddecker@bradley.com ebrusa@bradley.com - and - David N. Rutt, Esq. Scott G. Wilcox, Esq. MOORE & RUTT, P.A. 122 N. Market Street PO Box 554 Georgetown, DE 19947 Tel: (302) 856-9568 Fax: (302) 856-4518 E-mail: dnutt@mooreandrutt.com swilcox@mooreandrutt.com ddimaio@mooreandrutt.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/37A8sjF and https://bit.ly/3rdwWHc About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BRANDED APPAREL: $175K Sale of All Assets to JS Brands Approved --------------------------------------------------------------- Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York authorized Branded Apparel Group, LLC's sale of substantially all assets to JS Brands, LLC, for $175,000, on the terms of their Amended and Restated Asset Purchase Agreement, dated as of Dec. 10, 2020. On Nov. 5, 2020, the Court entered an order establishing bidding procedures. The Debtor did not receive any qualified bids (other than the bid submitted by Purchaser) prior to the bid deadline. On Nov. 23, 2020, the Debtor filed a notice cancelling the auction and declaring Purchaser the winning bidder. The sale is free and clear of all liens, claims, interests, and encumbrances, with all such liens, claims, interests, and encumbrances to attach to the proceeds of sale. The Debtor is authorized to assume and assign the contracts set forth on Schedule 2.01(e) to the APA as may be modified by the Purchaser pursuant to Section 6.08 of the APA. Notwithstanding the possible applicability of Fed. R. Bankr. P. 6004(h), 6006(d), 7062 and 9014, the terms and conditions of the Order will be effective immediately and enforceable upon its entry, and no automatic stay of execution will apply to the Order. The Debtor and the Purchaser (if it elects to do so) are authorized to close immediately upon entry of the Order. About Branded Apparel Group Branded Apparel Group, LLC, a family-owned apparel manufacturer that designs, imports, merchandises, and markets men's apparel and accessories under a licensed brand as well as private-label brands. Branded Apparel Group sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-12552-scc) on Oct. 29, 2020. As of Sept. 30, 2020, the Debtor disclosed total assets of $2,065,356 and total liabilities of $7,097,845. Kudman Trachten Aloe Posner LLP is the Debtor's counsel. BRIGGS & STRATTON: Court Approves Bankruptcy Wind-Down Plan ----------------------------------------------------------- Alex Wolf of Bloomberg Law reports that Briggs & Stratton Corp. won court approval to distribute creditor payments as part of a bankruptcy plan centered on a $550 million sale of the engine manufacturer's business. The company's Chapter 11 plan meets the standards for confirmation, Judge Barry S. Schermer of the U.S. Bankruptcy Court for the Eastern District of Missouri ruled during a telephonic hearing Friday, December 18, 2020. According to court filings, the Plan was negotiated at arm's length among representatives of the Debtors, the Creditors' Committee, the Pension Benefit Guaranty Corporation ("PBGC"), the DIP Agent and DIP Lenders, the Purchaser, and representatives of numerous other creditor groups, and their respective professionals. The Plan incorporates an agreement by the PBGC to limit its claim against the Debtors and their estates to a general unsecured claim estimated of no more than $225 million and to support a chapter 11 plan where the first $5 million of amounts the PBGC would otherwise recover under the Plan based on a pro rata distribution shall be waived and subordinated for the benefit of the Debtors' other general unsecured creditors. A copy of the Plan of the Findings of Facts and Order Confirming the Plan is available at http://bankrupt.com/misc/Briggs_1485_Plan_Order.pdf About Briggs & Stratton Corp. Briggs & Stratton Corporation is a producer of gasoline engines for outdoor power equipment and a designer, manufacturer and marketer of power generation, pressure washer, lawn and garden, turf care, and job site products. The Company's products are marketed and serviced in more than 100 countries on six continents through 40,000 authorized dealers and service organizations. Visit https://www.basco.com/ for more information. Briggs & Stratton Corporation and four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Lead Case No. 20-43597) on July 20, 2020. The petitions were signed by Mark A. Schwertfeger, senior vice president and chief financial officer. At the time of the filing, Briggs & Stratton Corporation disclosed total assets of $1,589,398,000 and total liabilities of $1,350,058,000 as of March 29, 2020. Judge Barry S. Schermer oversees the cases. The Debtors tapped Weil, Gotshal & Manges LLP as bankruptcy counsel; Carmody MacDonald P.C. as local counsel; Foley & Lardner LLP as corporate counsel; Houlihan Lokey Inc. as investment banker; Ernst & Young, LLP as restructuring and tax advisor; Deloitte LLP as auditor and tax consultant; and Kurtzman Carson Consultants, LLC as claims and noticing agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. * * * In October 2020, KPS Capital Partners LP, through a newly formed affiliate, acquired substantially all the assets of Briggs & Stratton Corp. and certain of its wholly owned subsidiaries. CALIFORNIA PIZZA: Hires New CFO After Exiting Chapter 11 -------------------------------------------------------- Jane Thier of Restaurant Dive reports that following recent restructuring efforts stemming from a Chapter 11 bankruptcy protection filing this summer of 2020, California Pizza Kitchen on Tuesday, December 15, 2020 named Judd Tirnauer its new CFO. Tirnauer will lead CPK's financial restructuring strategy, focus on growth opportunities, and oversee the accounting and finance teams, the company said in a statement. "What attracted me to CPK was the opportunity to be a part of the re-emergence of a well-known brand and be on the team that is steering it to its next phase of growth," Tirnauer told CFO Dive in an emailed statement. "Post-restructuring, the company has amazing momentum; it's a really exciting time. Tirnauer brings over 25 years of finance and strategic planning leadership experience, mainly in the restaurant and retail business. He arrives from the CFO post at Black Angus Steakhouse. Before that, he was CFO at fashion retailer Wet Seal, and of Real Mex Restaurants, parent company of El Torito, Chevy's Fresh Mex and other Mexican food chains. "With his proven track record in finance with both public and private equity brands, we are confident in Judd's expertise and ability to lead CPK's financial strategy and build on the Company's business momentum," CPK CEO Jim Hyatt said. "I'm excited to be joining such an iconic brand and look forward to working with Jim and the executive team on charting CPK's future growth," Tirnauer said. CPK's global footprint includes more than more than 200 restaurants in 8 countries and U.S. territories. In November, the chain announced it had completed a financial restructuring process following its June file for Chapter 11 bankruptcy protection, Restaurant Dive reported. It completed a debt-for-equity transaction that cut its debt by over $220 million and upped its liquidity. Currently, it is focused on menu innovation, expanding its global franchise footprint and investing in marketing and digital channels, including off-premises channels, Hyatt said, according to Food Business News. About California Pizza Kitchen California Pizza Kitchen, Inc. -- http://www.cpk.com/-- is a casual dining restaurant chain that specializes in California-style pizza. Since opening its doors in Beverly Hills in 1985, CPK has grown from a single location to more than 200 restaurants worldwide. CPK's traditional dine-in locations are full-service restaurants that serve pizza, salads, pastas and other California-inspired fare, alongside a curated selection of wines and a menu of handcrafted cocktails and craft beers. Though the Company's dine-in restaurants are the primary way the Company serves its customers, CPK also has a number of "off-premises" services and licensing agreements that allow customers to get their favorite CPK dishes on the go. California Pizza Kitchen, Inc., filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-33752) on July 29, 2020. The Hon. Marvin Isgur oversees the case. At the time of filing, the Debtors have $100 million to $500 million estimated assets and $500 million to $1 billion estimated liabilities. Kirkland & Ellis is serving as legal counsel to CPK, Guggenheim Securities, LLC is serving as its financial advisor and investment banker, and Alvarez & Marsal, Inc., as restructuring advisor. Gibson, Dunn & Crutcher LLP is acting as legal counsel for the group of first lien lenders and FTI Consulting, Inc. is acting as its financial advisor. Prime Clerk is the claims agent. * * * California Pizza Kitchen in November 2020 emerged from Chapter 11 bankruptcy protection with $220 million less in debt and no lending obligations coming due in the near term. CARLOS H. ORTIZ COLON: $195K Sale of San Juan Property Approved --------------------------------------------------------------- Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the District of Puerto Rico authorized Carlos H. Ortiz Colon and his wife, Maribel Rodriguez, to sell the real property located at Apt. D-302 in Condominio Bayside Cove, San Juan, Puerto Rico, Juan Francisco Rivera Hernandez for $195,000. The funds will be used to pay the following liens: (i) First Rank Mortgage Lien owed to Banco Popular de Puerto Rico ("BPPR"); (ii) Second Mortgage Rank Lien owed to First Bank de Puerto Rico. The following balances will be paid: (i) BPPR - the balance of $67,100, and (ii) First Bank de Puerto Rico - the limit on the mortgage established as per the Registry of Property of Puerto Rico of $78,460 will be paid. The Debtors have to pay $4,900 of closing cost as per Breakdown of Closing Costs. These closing costs are Notary Fees for sales deed and cancellation of liens deeds, stamps and taxes related to both deeds. The total amount of liens to be paid and cost related to the sale are $150,460, the remainder of the funds will be paid to the Debtors and deposited in the DIP account related to the present bankruptcy cases. A copy of the Contract is available at https://tinyurl.com/y559zyyh from PacerMonitor.com free of charge. Carlos H. Ortiz Colon and Maribel Rodriguez Rios (Bankr. D.P.R. Case No. 19-01384-ESL11) and Vaqueria Ortiz Rodriguez, Inc. (Bankr. D.P.R. Case No. 19-01386-ESL11) sought Chapter 11 protection on March 14, 2019. The cases are administratively consolidated under Case No. 19-01384. Homel Mercado Justiniano, Esq. represent the Debtors. CHESAPEAKE ENERGY: Court Approves Deal With Williams ---------------------------------------------------- Williams (NYSE: WMB) on Dec. 17, 2020, announced bankruptcy court approval of the global resolution it reached last month with Chesapeake as part of Chesapeake's Chapter 11 bankruptcy restructuring process. Subsequent to the bankruptcy court's approval, Williams received a payment of $112 million from Chesapeake related to all prepetition and past due receivables associated with midstream expenses per the existing contracts. Key highlights of the approved global resolution include the following: * Chesapeake will pay all prepetition and past due receivables related to midstream expenses, per the existing contracts. * Chesapeake will not attempt to reject Williams’ gathering agreements in the Eagle Ford, Marcellus, or Mid-Con. * In the Haynesville, Williams has agreed to reduce its gathering fees in exchange for gaining ownership of a portion of Chesapeake's South Mansfield producing assets, which consist of approximately 50,000 net mineral acres. In addition, Chesapeake will enter into a long-term gas supply commitment of a minimum 100 Mdth/d and up to 150 Mdth/d for the Transco Regional Energy Access (REA) pipeline currently under development. * The reduced gathering fees are consistent with incentive rates that Williams has offered in the past to attract drilling capital and are therefore expected to promote additional drilling across Chesapeake's prolific Haynesville footprint. * The South Mansfield assets provide an opportunity for Williams to transition the acreage to a strong and well-capitalized operator that will grow production volumes, and drive growth in fee based cash flows on Williams' existing spare midstream capacity, while also enabling Williams to market significant gas volumes for future downstream opportunities. * The commitment to REA provides valuable incremental takeaway capacity for Chesapeake's Marcellus production and the associated Williams gathering systems, while adding a valuable capacity commitment to the Transco project. "Williams has strategically invested in large-scale and essential infrastructure necessary to gather and treat the natural gas that Chesapeake and its joint interest owners produce in the Eagle Ford, Haynesville, and Marcellus," said Alan Armstrong, Williams president and CEO. "Our gathering systems are necessary to realize the full potential of these high value reserves, and we are pleased to have been able to work with Chesapeake toward a mutually beneficial outcome that will put Chesapeake on a clear path to a bright future. Chesapeake is a valuable customer, and this transaction will both strengthen Chesapeake and allow Williams to enhance the value of our significant midstream infrastructure by bringing adequate capitalization to these low-cost gas reserves." About Williams Williams (NYSE: WMB) is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation and storage of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide -- including Transco, the nation's largest volume and fastest growing pipeline -- and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. On the Web: http://www.williams.com/ About Chesapeake Energy Corp. Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as restructuring advisor, Rothschild & Co and Intrepid Financial Partners as financial advisors, and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel, RPA Advisors LLC as financial advisor, and Houlihan Lokey Capital Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc., has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel, FTI Consulting, Inc. as financial advisor, and Moelis & Company LLC as investment banker. On July 9, 2020, the Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The unsecured creditors' committee has tapped Brown Rudnick, LLP and Norton Rose Fulbright US, LLP as its legal counsel, and AlixPartners, LLP as its financial advisor. On July 24, 2020, the bankruptcy watchdog appointed a committee of royalty owners. The royalty owners' committee is represented by Forshey & Prostok, LLP. CHESAPEAKE ENERGY: Davis, Vinson 3rd Update on FILO Term Lenders ---------------------------------------------------------------- In the Chapter 11 cases of Chesapeake Energy Corporation, et al., the law firms of Davis Polk & Wardwell LLP and Vinson & Elkins LLP submitted a third amended verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of Ad Hoc Group of FLLO Term Loan Lenders that that they are representing. In or around April 2020, a group formed by certain lenders under that certain Term Loan Agreement, dated December 19, 2019, by and among Chesapeake Energy Corporation, the subsidiary borrowers party thereto, the lenders and other parties thereto, and GLAS USA LLC, as administrative agent formally engaged Davis Polk to represent it in connection with a potential restructuring of the Debtors. In or around May 2020, the Ad Hoc Group of FLLO Term Loan Lenders engaged Vinson & Elkins LLP to represent it as Texas bankruptcy counsel. In addition to the Ad Hoc Group of FLLO Term Lenders, a separate team of attorneys at Davis Polk represents Williams Company in these Chapter 11 Cases. Davis Polk does not represent or purport to represent any entities other than the Ad Hoc Group of FILO Term Lenders and William Company in connection with the Chapter 11 Cases. Vinson & Elkins represents only the Ad Hoc Group of FLLO Term Loan Lenders. Vinson & Elkins does not represent or purport to represent any entities other than the Ad Hoc Group of FLLO Term Loan Lenders in connection with the Chapter 11 Cases. The Members of the Ad Hoc Group of FLLO Term Loan Lenders, collectively, beneficially own or manage: a. $1,275,727,774 in aggregate principal amount of the loans under the FLLO Credit Agreement; b. $51,088,275 in aggregate principal amount of the loans under that certain amended and restated credit agreement, dated as of September 12, 2018, by and among Chesapeake Energy Corporation, as borrower, the Debtor guarantors party thereto, MUFG Union Bank, N.A., as administrative agent, and the other lender, issuer, and agent parties thereto; c. $457,622,000 in aggregate outstanding amount of the notes issued under that certain indenture for certain 11.5% senior secured notes due 2025 dated as of December 19, 2019; d. $504,574,500 in aggregate outstanding amount of unsecured notes issued by Chesapeake Energy Corporation, including convertible notes e. $54,800,000 in aggregate commitments Revolving DIP Loans under the DIP Facility; f. $67,865,319 in Roll-Up Loans under the DIP Facility. g. (271,492) shares of the common stock; and h. $7,150,000 in aggregate par value of convertible preferred stock issued by Chesapeake Energy Corporation. As of Dec. 14, 2020, members of the Ad Hoc Group FLLO Term Loan Lenders and their disclosable economic interests are: ALTA FUNDAMENTAL ADVISERS LLC 1500 Broadway Suite 704 New York, NY 10036 * $17,000,000.00 in aggregate principal amount of FLLO Term Loans * $16,750,000 in aggregate outstanding amount of Unsecured Notes APPALOOSA LP 51 John F Kennedy Pkwy Short Hills, NJ 07078 * $87,800,000.00 in aggregate principal amount of FLLO Term Loans * $131,168,000 in aggregate outstanding amount of 2L Notes BLACKROCK FINANCIAL MANAGEMENT, INC 55 E. 52nd Street New York, NY 10055 * $126,800,000 in aggregate principal amount of FLLO Term Loans * $68,946,000 in aggregate principal amount of Unsecured Notes CAPITAL RESEARCH AND MANAGEMENT COMPANY 333 South Hope St., 55th Floor Los Angeles, CA 90071 * $84,500,000 in aggregate principal amount of FLLO Term Loans * $113,553,000 in aggregate outstanding amount of 2L Notes * $74,911,000 in aggregate outstanding amount of Unsecured Notes CARVAL INVESTORS, LP 461 5th Ave. New York, NY 10017 * $63,240,000 in aggregate principal amount of FLLO Term Loans CITADEL ADVISORS LLC 601 Lexington Ave. New York, NY 10022 * (220,000) shares of Common Stock * $7,150,000 of Convertible Preferred Stock * $29,170,000 in aggregate principal amount of FLLO Term Loans * $2,500,000 in aggregate outstanding amount of 2L Notes * $3,000,000 in aggregate outstanding amount of Unsecured Notes * (51,492) shares of Common Stock (includes short position) CYRUS CAPITAL PARTNERS, L.P. 65 East 55th St., 35th Floor New York, NY 10022 * $3,381,714 in aggregate principal amount of FLLO Term Loans * $12,712,000 in aggregate outstanding amount of 2L Notes * $3,380,000 in aggregate outstanding amount of Unsecured Notes D.E. SHAW GALVANIC PORTFOLIOS, L.L.C. 1166 Avenue of the Americas 9th Floor New York, NY 10036 * $108,478,000 in aggregate principal amount of FLLO Term Loans * $83,186,000 in aggregate outstanding amount of 2L Notes * $189,679,500 in aggregate outstanding amount of Unsecured Notes FIDELITY MANAGEMENT & RESEARCH 200 Seaport Blvd. Boston, MA 02210 * $230,855,000 in aggregate principal amount of FLLO Term Loans * $44,192,000 in aggregate outstanding amount of 2L Notes * $85,412,000 in aggregate outstanding amount of Unsecured Notes GLENDON CAPITAL MANAGEMENT L.P. 2425 Olympic Blvd. Suite 500E Santa Monica, CA 90404 * $62,785,000 in aggregate principal amount of FLLO Term Loans * $11,746,000 in aggregate outstanding amount of 2L Notes * $29,000,000 in aggregate outstanding amount of Unsecured Notes KEYFRAME CAPITAL PARTNERS, L.P. 65 East 55th St., 35th Floor New York, NY 10022 * $4,404,286 in aggregate principal amount of FLLO Term Loans * $6,288,000 in aggregate outstanding amount of 2L Notes * $6,620,000 in aggregate outstanding amount of Unsecured Notes KING STREET CAPITAL MANAGEMENT, L.P. 299 Park Ave., #40 New York, NY 10171 * $17,382,000 in aggregate principal amount of FLLO Term Loans * $52,277,000 in aggregate outstanding amount of 2L Notes * $25,876,000 in aggregate outstanding amount of Unsecured Notes OAKTREE CAPITAL MANAGEMENT 333 South Grand Ave. 28th Floor Los Angeles, CA 90071 * $225,206,774 in aggregate principal amount of FLLO Term Loans * $51,088,275 in aggregate principal amount of Revolving Credit Facility Loans * $54,800,000 in aggregate commitments Revolving DIP Loans under the DIP Facility * $67,865,319 in Roll-Up Loans under the DIP Facility PALOMA PARTNERS MANAGEMENT COMPANY Two American Lane Greenwich, CT 06836 * $2,000,000 in aggregate principal amount of FLLO Term Loans * $1,000,000 in aggregate outstanding amount of Unsecured Notes PGIM, INC. Prudential Tower 655 Broad Street, 8th Floor Newark, New Jersey 07102 * $212,725,000 in aggregate principal amount of FLLO Term Loans Counsel to the FILO Ad Hoc Group can be reached at: DAVIS POLK & WARDWELL LLP Damian S. Schaible, Esq. Darren S. Klein, Esq. Benjamin S. Kaminetzky, Esq. Aryeh Ethan Falk, Esq. Daniel Rudewicz, Esq. 450 Lexington Avenue New York, NY 10017 Tel: 212-450-4169 Fax: 212-701-5800 Email: damian.schaible@davispolk.com darren.klein@davispolk.com ben.kaminetzky@davispolk.com aryeh.falk@davispolk.com daniel.rudewicz@davispolk.com - and - VINSON & ELKINS LLP Harry A. Perrin, Esq. Emily S. Tomlinson, Esq. 1001 Fannin Street, Suite 2500 Houston, TX 77002-6760 Tel: 713.758.2222 Fax: 713.758.2346 Email: hperrin@velaw.com etomlinson@velaw.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3raGRNE About Chesapeake Energy Corp. Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as restructuring advisor, Rothschild & Co and Intrepid Financial Partners as financial advisors, and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy's Board of Directors. MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel, RPA Advisors LLC as financial advisor, and Houlihan Lokey Capital Inc. as investment banker. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group's investment bankers. Franklin Advisers, Inc., has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel, FTI Consulting, Inc., as financial advisor, and Moelis & Company LLC as investment banker. On July 9, 2020, the Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The unsecured creditors' committee has tapped Brown Rudnick, LLP and Norton Rose Fulbright US, LLP as its legal counsel, and AlixPartners, LLP as its financial advisor. On July 24, 2020, the bankruptcy watchdog appointed a committee of royalty owners. The royalty owners' committee is represented by Forshey & Prostok, LLP. CHINESEINVESTORS.COM INC: Creditors Committee Asks for Trustee -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Chineseinvestors.com, Inc., is asking the U.S. Bankruptcy Court for the Central District of California to appoint a chapter 11 trustee to take over management of the Debtor According to the Committee, the appointment of a trustee under Section 1104(a)(2) of the bankruptcy code is in the best interest of creditors of the estate. A Chapter 11 Trustee is needed to recover the Wang Overpayments, not just the $345,649.57 disclosed for the two years prior to the bankruptcy filing, but reaching back a full four years. Moreover, the Committee noted that the continued business losses for the six months are independent grounds to appoint a Chapter 11 trustee for the best interests of creditors and the estate. In the alternative, the Committee also seeks for the conversion of the case to Chapter 7. The Unsecured Creditors Committee is represented by: Daniel J. Weintraub, Esq. James R. Selth, Esq. Crystle J. Lindsey, Esq. WEINTRAUB & SELTH, APC 11766 Wilshire Boulevard, Suite 1170 Los Angeles, CA 90025 Tel: (310) 207-1494 Fax: (310) 442-0660 E-mail: jim@wsrlaw.net A full-text copy of the Motion is available at http://bit.ly/3mv3BnVfrom PacerMonitor.com for free. About Chineseinvestors.com Chineseinvestors.com, Inc., was established as an 'in language' (Chinese) financial information web portal that provides information about US Equity and Financial Markets, as well as other financial markets. Chineseinvestors.com, Inc., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-15501) on June 18, 2020. In the petition signed by Wei Warren Wang, CEO, the Debtor disclosed $2,655,736 in assets and $11,574,081 in liabilities. Rachel M. Sposato, Esq., at The Hinds Law Group, is the Debtor's counsel. CITIUS PHARMACEUTICALS: Incurs $17.5M Net Loss in Fiscal 2020 ------------------------------------------------------------- Citius Pharmaceuticals, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $17.55 million on $0 of revenues for the year ended Sept. 30, 2020, compared to a net loss of $15.56 million on $0 of revenues for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $43.77 million in total assets, $10.10 million in total liabilities, and $33.67 million in total stockholders' equity. Boston-based Wolf & Company, P.C., the Company's auditor since 2014, issued a "going concern" qualification in its report dated Dec. 16, 2020, citing that the Company has suffered recurring losses and negative cash flows from operations and has a significant accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1506251/000121390020043004/f10k2020_citiuspharma.htm About Citius Headquartered in Cranford, NJ, Citius Pharmaceuticals, Inc. -- http://www.citiuspharma.com-- is a specialty pharmaceutical company dedicated to the development and commercialization of critical care products targeting unmet needs with a focus on anti-infectives, cancer care and unique prescription products. CLOUDERA INC: Moody's Assigns Ba3 CFR, Outlook Stable ----------------------------------------------------- Moody's Investors Service assigned to Cloudera, Inc. a Ba3 Corporate Family Rating and a Ba3-PD Probability of Default Rating. Concurrently, Moody's assigned a Ba3 rating to Cloudera's proposed $500 million term loan B. Net proceeds from the issuance are expected to be funded to the company's balance sheet and used to repurchase $500 million of outstanding Cloudera shares. The outlook is stable. Assignments: Issuer: Cloudera, Inc. Corporate Family Rating, Assigned Ba3 Probability of Default Rating, Assigned Ba3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Secured Term Loan B, Assigned Ba3 (LGD3) Issuer: Cloudera, Inc. Outlook, Assigned Stable RATINGS RATIONALE Cloudera's Ba3 CFR reflects the company's leading position within the unstructured data management and analytics software market where Cloudera's product can be deployed on premises, within public or private clouds, data centers or in a hybrid model. The company benefits from its long-term subscription contracts (typically up to 3 years in length) with large enterprise customers, which are highly diversified across industry and geography. The rating also considers Cloudera's very high Moody's adjusted leverage levels of over 10x based on estimated results as of the LTM period ended October 31, 2020, pro forma for the proposed debt issuance. However, when adjusting for stock-based compensation and change in deferred revenue, Cloudera's pro forma Moody's cash adjusted leverage is much more moderate at approximately 3x. Moody's expects a near-term improvement in Cloudera's profitability levels which will produce robust free cash flow (FCF), with annualized FCF to gross adjusted debt in the mid to high teens percentage range over the next 12-18 months. The credit profile also reflects Cloudera's moderate scale relative to certain larger competitors and the limited track-record of profitability following the company's acquisition of Hortonworks. In addition, Cloudera operates in an evolving technology landscape within the highly competitive data management and analytics software market, which is dominated by 'legacy' providers such as Teradata, Oracle, and IBM. Though Cloudera partners with major public cloud service providers, Amazon, Microsoft and Google are also competitors within the data management and analytics market. To retain or expand its market position, Cloudera may have to engage in higher levels of sales and R&D investments or acquisition activity which could require substantial liquidity. As a software company, Cloudera's exposure to environmental risk is considered low. Social risks are considered low to moderate, in line with the software sector. Broadly, the main credit risks stemming from social issues are linked to data security, diversity in the workplace and access to highly skilled workers. Cloudera is a publicly traded company with an independent board of directors and is expected to maintain a moderately conservative financial strategy. Over time, Moody's expects that Cloudera could pursue further shareholder returns or M&A activity but would continue to maintain management adjusted gross leverage levels at or below 4x. The stable outlook reflects Moody's expectation that Cloudera will grow revenues organically in the high single-digit percent range and maintain cash adjusted leverage levels at or below 4x over time. In addition, Moody's expects that Cloudera will continue to generate free cash flow to debt in the mid to high teens percentage range while pursuing balanced financial policies that will protect debt holder interests. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Cloudera's ratings could be upgraded if the company were to continue to grow revenues organically in the high single digit percent range while maintaining a financial strategy that balanced shareholder and creditor interests, with Moody's cash adjusted leverage sustained around 3x and FCF to gross debt in the mid to high teens percent range. Cloudera's ratings could be downgraded if Moody's cash adjusted leverage is expected to approach 4.5x, organic revenue and EBITDA were to decline, or the company were to pursue a more aggressive shareholder return strategy including debt funded M&A, special dividends or further share repurchase activity. Cloudera has a good liquidity profile, reflected by its SGL-2 Speculative Grade Liquidity Rating, which is supported by Moody's expectation for cash and liquid investment balances of at least $300 million over the next 12-18 months (and after an anticipated share repurchase of $500 million) and annual free cash flow generation in excess of $100 million. However, the company does not have an external liquidity facility. There are no financial maintenance covenants on the proposed term loan B. Cloudera, headquartered in Santa Clara, California is a provider of data management and analytics software to enterprise customers. The company generated revenues of approximately $854 million in the LTM period ended October 31, 2020. The principal methodology used in these ratings was Software Industry published in August 2018. COMMERCEHUB INC: Moody's Affirms B3 CFR on Proposed Refinancing --------------------------------------------------------------- Moody's Investors Service affirmed CommerceHub, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also assigned a B2 rating to the new first lien credit facilities, which comprises of a $50 million revolving credit facility and a $530 million term loan facility, and a Caa2 rating to the $210 million second lien term loan facility. The outlook is stable. Net proceeds from the new debt issuance along with $606 million of new cash equity from Insight Partners and $609 million of rollover equity from the company's existing sponsors, GTCR LLC and Sycamore Partners, will be used to refinance existing debt, partially fund a dividend payment to the existing sponsors, and pay fees and expenses related to the transaction. Pro forma for the transaction, Insight will own 49.9% of the company through preferred equity with GTCR and Sycamore each retaining a 25% stake of common equity. The rating on the existing first lien credit facility that will be repaid as part of this refinancing will be withdrawn upon repayment. The rating affirmation reflects Moody's view that although CommerceHub's leverage (Moody's adjusted) will increase materially to 8.8x pro forma for the LTM period ended Sept. 30, 2020 as a result of this transaction, the continued secular shift of retail sales into E-commerce will drive CommerceHub drop-shipping order growth over the next several years and supports Moody's expectation of at least 10% revenue growth and deleveraging towards 6.5x over the next 12 months. The company's high proportion of recurring revenue and strong retention rates also support the rating profile. Assignments: Issuer: CommerceHub, Inc. Gtd Senior Secured 1st Lien Term Loan B, Assigned B2 (LGD3) Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD3) Gtd Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5) Affirmations: Issuer: CommerceHub, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Outlook Actions: Issuer: CommerceHub, Inc. Outlook, Remains Stable RATINGS RATIONALE CommerceHub's B3 CFR reflects its established market position as a third-party drop shipping provider to top US retailers, the company's mission critical role within the retailer and supplier network, a high recurring revenue stream supported by high order retention and subscription fees, and the company's deep retailer integration and high switching costs. The credit is constrained by CommerceHub's high financial leverage, small scale and limited operating scope in the retail e-commerce industry. Moody's expects CommerceHub to maintain revenue growth of at least 10% over the next 2 years supported by retailers' increasing reliance on CommerceHub's drop ship software to increase inventory availability, reduce warehousing costs and minimize delivery times to end consumers. CommerceHub's platform enables brick-and-mortal retailers to effectively compete with online-only e-commerce companies. The ongoing retail shift to online channels was further driven in 2020 by the coronavirus pandemic, resulting in 77% order-volume growth and over 50% revenue growth year-over-year for 3Q20. For 2021, Moody's expects annual revenue growth of at least 10%, driven by drop ship volume growth from existing and new retail customers, and strong EBITDA margins of at least 55%. Moody's expects that debt leverage (Moody's adjusted) will approach 6.5x by FYE2021 and free cash flow to adjusted debt will increase towards 5%. Moody's expects good liquidity over the next 12 months, supported by at least $50 million of free cash flow and a fully available revolver. Moody's expects that the company will use most of its free cash flow to invest into growing the business, which may include small tuck-in acquisitions, rather than voluntarily paying down debt. CommerceHub is subject to governance risk as the business is owned by private equity investors and is expected to maintain an aggressive financial strategy prioritizing shareholders as evidenced by the dividend recap and the high leverage levels associated with the proposed transaction. The ratings for CommerceHub's debt instruments reflect both the overall Probability of Default of the company, to which Moody's has assigned a B3-PD, and a loss given default assessment of the individual debt instruments. The B2 ratings on the $530 million first lien term loan maturing 2027 and $50 million first lien revolver expiring 2025, one notch above CommerceHub's CFR, reflects the facility's priority position in the capital structure, ahead of the $210 million second lien loan maturing 2028. The Caa2 rating on the second lien loan reflects its contractual subordination to the first lien credit facility. The first lien debt has precedence of payments, relative to the second lien loan, from the proceeds of any default- or bankruptcy-related liquidation. The first lien credit facility is secured by a first lien pledge of substantially all the assets of CommerceHub, Inc. and its domestic subsidiaries. The first lien credit facility and second lien term loan also have a guarantee from Great Dane Parent, LLC, an intermediate holding company. The stable outlook reflects Moody's expectation for leverage (Moody's adjusted) to decrease below 7x and the maintenance of good liquidity supported by full revolver availability and positive free cash flow over the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade CommerceHub's ratings if strong revenue growth along with debt repayment and margin expansion lead to leverage (Moody's adjusted) sustained below 6x and free cash flow to debt remaining above 5%. Moody's could downgrade CommerceHub's ratings if organic revenue growth slows to low single-digits, reflecting increased competition, customer losses, or shifts in the e-commerce business model, or if leverage (Moody's adjusted) is sustained above 7x. EBITDA margin declines or free cash flow to debt sustained below 2%, and deterioration in liquidity, including negative working capital trends or limited revolver availability, could also result in a downgrade. CommerceHub, Inc., with headquarters in Albany, NY, provides SaaS cloud-based software that integrates retailers with suppliers to expand their e-commerce-based drop-shipping programs primarily in the U.S. and Canada. The company reported net revenue of $141 million for the LTM period ended September 30, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. COMMUNITY HEALTH: Moody's Assigns Caa2 Rating on Senior Sec. Notes ------------------------------------------------------------------ Moody's Investors Service assigned a Caa2 rating to CHS/Community Health Systems, Inc.'s new senior secured notes. There is no change to Community's existing ratings, including its Caa3 Corporate Family Rating. The outlook is stable. Proceeds from the new senior secured note issuance will be used to repay a portion of the company's 6.25% senior secured first lien notes due March 2023. Moody's views the transaction as being credit positive because it lengthens the Community's maturity profile. That said, the company will continue to face significant refinancing risk as it pertains to the remaining maturity wall in 2023 post-transaction. Ratings assigned: CHS/Community Health Systems, Inc. Senior secured notes due 2027 at Caa2 (LGD3) RATINGS RATIONALE Community's Caa3 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with very high financial leverage in the mid-to-high 7 times. The rating is also constrained by Moody's expectation for negative free cash flow over the next 12-18 months because of Community's high-interest costs, the significant capital requirements of the business, and the need to begin repaying the accelerated Medicare payments over the April 2021-September 2022 timeframe. The rating is constrained by industry-wide operating headwinds which will limit operational improvement despite Community's turnaround initiatives. The rating is supported by the Community's large scale, geographic diversity and the successful execution of its divestiture program. Proceeds from divestitures are expected to be used to repay debt and reinvest in the business. Despite the negative effects of the COVID-19 pandemic on volumes, Community's liquidity has been significantly helped by substantial government aid to hospitals. The stable outlook reflects Moody's view that the current ratings adequately reflect the Community's weak operating performance and elevated probability of default as demonstrated by the distressed exchange announced earlier this month. With respect to governance, the Community has been unable to demonstrate a consistent track record for meeting its own financial guidance. As a for-profit hospital operator, Community also faces high social risk. The affordability of hospitals and the practice of balance billing has garnered substantial social and political attention. Hospitals are now required to publicly provide the list price of all of their services, although compliance and practice is inconsistent across the industry. Additionally, hospitals rely on Medicare and Medicaid for a substantial portion of reimbursement. Any changes to reimbursement to Medicare or Medicaid directly impacts hospital revenue and profitability. Further, as Community is focused on non-urban communities, slow population growth tempers the company's capacity to grow admissions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade the ratings if there is any further deterioration in Community's earnings, if liquidity weakens or if, for any other reason, the probability of default rises or recovery prospects weaken. Moody's could upgrade the ratings if operational initiatives result in improved volume growth and margin expansion. If leverage declines or free cash flow improves materially, such that the company's ability to refinance future debt maturities and sustain the current capital structure becomes more assured, the ratings could be upgraded. An upgrade would also require improved liquidity. CHS/Community Health Services, Inc., headquartered in Franklin, Tennessee, is an operator of general acute care hospitals in non-urban and mid-sized markets throughout the US. Revenues in the last twelve months ended Sept. 30, 2020 were approximately $12 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. COROTOMAN INC: M. Sheehan Named as Chapter 11 Trustee ----------------------------------------------------- John P. Fitzgerald, III, the Acting United States Trustee, seeks approval from the Bankruptcy Court of the appointment of Martin P. Sheehan as the Chapter 11 trustee for Corotoman Inc. The U.S. Trustee consulted thees parties regarding the appointment of the Trustee: * John F. Leaberry, counsel for the Debtor * Stephen L. Thompson, counsel for Katherine Forbes Wellman About Corotoman Inc. Corotoman Inc. sought Chapter 11 protection (Bankr. S.D. W.Va. Case No. 19-20134) on March 29, 2019. In the petition signed by John H. Wellford, III, president, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. The Debtor is represented by the Law Office of John Leaberry, PLLC. CRED INC: Investor Says Company on Track for Chapter 11 Sale ------------------------------------------------------------ Law360 reports that cryptocurrency investment platform Cred Inc. told a Delaware bankruptcy judge on Thursday, December 17, 2020, that it has reached an agreement with its unsecured creditors for a Chapter 11 liquidation plan and that it is already entertaining bids for a going-concern sale. At a virtual hearing on motions ranging from requests to turn the firm over to a trustee to its own request to set up sale procedures, Cred board member Grant Lyon said the firm has begun marketing itself and has received prospective stalking horse bids "in the $2 million range." About CRED Inc. Cred Inc. is a cryptocurrency platform that accepts loans of cryptocurrency from non-U.S. persons and pays interest on those loans. Cred -- https://mycred.io -- is a global financial services platform serving customers in over 100 countries. Cred is a licensed lender and allows some borrowers to earn a yield on cryptocurrency pledged as collateral. Cred Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12836) on Nov. 7, 2020. Cred was estimated to have assets of $50 million to $100 million and liabilities of $100 million to $500 million as of the bankruptcy filing. The Debtors tapped Paul Hastings LLP as their bankruptcy counsel, Cousins Law LLC as local counsel, and MACCO Restructuring Group, LLC as financial advisor. Donlin, Recano & Company, Inc., is the claims agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Dec. 3, 2020. CREW ENERGY: DBRS Confirms B(low) Issuer Rating, Trend Negative --------------------------------------------------------------- DBRS Limited confirmed the Issuer Rating of Crew Energy Inc. at B (low). DBRS Morningstar also confirmed Crew's Senior Unsecured Notes rating at B (low) with a Recovery Rating of RR4. All trends are Negative. The ratings are underpinned by the Company's (1) current size (2020 production estimated to average (at the midpoint of guidance) 21,500 barrels of oil equivalent (boe) per day); (2) capital and operational flexibility, as the Company operates the majority of its production and owns interests in the related processing facilities; and (3) significant inventory of drilling locations that provides a source of future production growth. The ratings are constrained by the Company's heavy concentration of reserves and production in Northeastern British Columbia (NEBC) in the Montney play and the current higher weighting of production toward lower-valued natural gas (71% on a boe basis for year-to-date (YTD) September 30, 2020), although DBRS Morningstar notes that the Company has been able to attain better pricing relative to spot gas prices in western Canada because of its diversified exposure to multiple gas markets and successful hedging program. As a result of the significant weakness in liquids prices this year and the continued weakness in natural gas prices, the Company's key financial metrics over the last twelve months (LTM) ended September 30, 2020 (LTM 2020) are well below the B range. Crew's lease-adjusted debt-to-cash flow for the LTM 2020 has risen to 8.30 times (x), compared with 4.49x for F2019 and 3.91x for F2018. Furthermore, the lease-adjusted EBIT interest coverage has deteriorated to -0.42x for the LTM 2020 from 0.77x in 2019 and 1.16x in 2018. After spending $45 million on capital expenditures (capex) during the first nine months of 2020, due to the extreme weakness in commodity markets, Crew has guided for capex of $40 to $45 million for Q4 2020 with the recent strengthening in natural gas prices as supply/demand fundamentals in North American markets improve. During 2021, the Company expects to align capex with an anticipated improvement in natural gas and liquids pricing with spending targeted to higher natural gas weighted development activities in the Montney region of NEBC. Crew has managed its liquidity position reasonably well. As a result of a strategic infrastructure transaction involving interests in its two natural gas processing facilities in 2020, the Company has received total net proceeds of $58 million that have been used to reduce debt and fund capex. As part of the transaction, Crew committed to multiyear natural gas processing agreements. The Company also has an option (between June 2021 and June 2023) to enter into a 20-year natural gas processing agreement and convert an additional 11.43% interest in the two facilities for up to $37.5 million. At the end of Q3 2020, Crew had drawn $42.1 million on its banking facility, with $12.1 million in letters of credit also backed by the facility. A semiannual borrowing base review has recently been completed and the bank facility was reconfirmed at $150 million after a reduction from $235 million at the last semiannual borrowing base review in early June. The Company's Senior Unsecured Notes do not mature until March 2024 and do not have any financial maintenance covenants. Based on DBRS Morningstar's revised commodity price forecast, the Company's credit metrics are expected to be very weak for 2020 before recovering in 2021 and strengthening further in 2022, supported by expectations of stronger natural gas price realizations through 2021 and 2022 and expected stronger liquids pricing by 2022. In assessing Crew's credit risk profile, DBRS Morningstar's approach is to rate through the cycle and give due weight to projected credit metrics when DBRS Morningstar anticipates a return to a more normal operating and pricing environment by 2022. On this basis, and considering DBRS Morningstar's base-case pricing scenario, the Company's credit profile supports a B (low) rating. The risk, in DBRS Morningstar's view, is that a recovery in liquids and natural gas prices could fall well short of DBRS Morningstar's base-case price assumptions. The Negative trends are a reflection of this risk, which DBRS Morningstar currently deems to be elevated. DBRS Morningstar will likely change the trends to Stable if the demand/supply fundamentals in liquids and natural gas markets continue to improve, leading to greater confidence that commodity prices and, consequently, the Company's key credit metrics recover in line with DBRS Morningstar's base-case assumptions. Conversely, should liquids and natural gas price realizations fall well below DBRS Morningstar's base-case expectations and, as a result, the Company's key credit metrics do not support a B (low) rating, DBRS Morningstar will likely take a negative rating action. Notes: All figures are in Canadian dollars unless otherwise noted. CVR ENERGY: Fitch Affirms BB- LT IDR, Outlook Negative ------------------------------------------------------ Fitch Ratings has affirmed CVR Energy, Inc.'s (CVI) Long-Term Issuer Default Rating at 'BB-'. Fitch also affirmed the rating of the unsecured notes at 'BB-'/'RR4'. The Rating Outlook is Negative. CVI's ratings reflect its medium-sized operations with capacity of 206,500 barrels per day, an average complexity rating of 10.8, high product yield of 97% compared with its regional peers, and relatively low operating costs. The company has approximately $858 million in liquidity as of Sept. 30, 2020 and no near-term maturities (excluding nonrecourse Nitrogen Fertilizer debt), which should provide for more than adequate ability to service near-term FCF deficits until the sector recovers. These factors are offset by the company's relatively small size, exposure to volatile crack spreads and oil differentials, and historically, high shareholder distributions. The Negative Outlook reflects the dramatic deterioration in refining conditions stemming from the coronavirus pandemic in the U.S., which have created unprecedented declines in refined product demand. The Outlook also reflects risks that are specific to CVI's business profile, including the company's inland refinery footprint, which could also prove more vulnerable given the lack of export options and limited revolver capacity. The Outlook could be revised if conditions normalize and liquidity has not been materially compromised. Although refiners have historically shown an ability to adjust quickly to drops in demand, a key consideration is the unknown duration of the current downturn, which if sustained, has the potential to keep leverage metrics elevated and drain liquidity for an extended period. KEY RATING DRIVERS Impact of the Coronavirus: The material reduction in refined product demand since the onset of the coronavirus resulted in significantly lower crack spreads, refinery margins and utilization rates. The company responded by deferring the majority of its growth capital spending and turnarounds at the Wynnewood refinery and the Coffeyville fertilizer facility, lowering maintenance capex spending, and reducing operating and general and administrative costs. CVI generated a FCF deficit of $197 million for September YTD 2020, which includes $158 million of turnaround costs. The company has cash of approximately $624 million and $116 million of availability on its asset-backed loan (ABL) facility as of Sept. 30, 2020. In addition, CVI has $119 million of available for sale securities representing its holdings of Delek common stock that was purchased during 1Q20. Fitch believes the company has sufficient liquidity to service its obligations even under an assumption of a slow recovery in the refining sector. Weak Refinery Sector Environment: Demand for gasoline and some diesel products have nearly recovered to pre-pandemic levels, although jet fuel demand remains weak. Crack spreads remain well below mid-cycle levels with the PADD (Petroleum Administration for Defense Districts) II 2-1-1 crack spreads currently in the $6-$7 range compared with the $16-$17 range in 4Q19. Fitch expects petroleum product demand and crack spreads to increase throughout 2021 compared with 2020 helped by spread of COVID vaccinations although mid-cycle crack spreads are unlikely to return until 2022-2023. Size and Regional Concentration: CVI ratings reflect the business risk associated with its medium-sized operations and location concentration. CVI's combined crude oil processing capacity is 206,500 bpd with an average complexity of 10.8, and its plants are located in Group 3 of PADD II. The company's two refineries are strategically located near Cushing, OK, with access to over 250,000 bpd of production across Midwest. CVI has a high distillate yield relative to its peers that allows it to produce a higher mix of diesel fuel which is a higher value product given the decline in automobile driving during the coronavirus crisis. This is somewhat offset by the fact that CVI is an inland refiner with limited options to export its product. The company has strong asset portfolio of over 430 miles of owned and JV pipelines with over 7 million barrels of crude oil and product storage capacity of 39 LACT units. Reduced Liquidity Requirement: CVI's next bond maturity is in 2025, which excludes the debt related to CVR Partners, which is nonrecourse to CVI's other obligations. The ABL facility is currently undrawn and matures in 2022. The ABL has borrowing capacity of $400 million and is reduced by outstanding LOC ($7 million as of Sept. 30, 2020) and the calculated amount of cash that is included in the borrowing base ($277 million). Fitch anticipates the company will generate a FCF deficit in 2021, however, liquidity should be more than sufficient to fund operational and financing obligations in the near term. CVI has historically had an aggressive shareholder return capital structure, including an annual dividend policy at the beginning of 2020 that assumed $320 million of dividends and a $300 million share repurchase program. The company has temporarily suspended both the dividend and share repurchase program. Potential Renewable Diesel Project: CVI is exploring the conversion of its 19,000 barrels per day (bpd), Wynnewood hydrocracker to process 100 million gallons per year of washed and bleached soybean oil to produce renewable diesel and renewable naphtha. The project has not been fully approved by the board of directors, but CVR hopes to have the facility in-service by June 30, 2021. The estimated cost is $100 million and the company believes it can recoup a significant portion of its investment by the end of 2022 through credits from the Blended Tax Credit (BTC) and Low Carbon Fuel Standard, and the generation of Renewable Identification Numbers (RINs). CVI would have the flexibility to return the unit to hydrocarbon processing if the margin differential between renewables and hydrocarbons changes, which could depend in part on whether the BTC expires at the end of 2022. CVR has also identified similar renewable opportunities at its Coffeyville refinery. Nitrogen Fertilizer Segment Refinancing: The nitrogen fertilizer segment is nonrecourse to the debt issued at CVR Energy and CVR Refining, LP. CVR Partners, LP, which CVR Energy Inc. has a 35% ownership in, has $645 million of senior unsecured notes due in 2023. Fitch does not expect CVR Energy will provide credit support to CVR Partners. Unfavorable Regulations: U.S. refiners face a number of unfavorable regulatory headwinds that will cap long-term demand for U.S. refined product, including rising renewable requirements under the renewable fuel standard (RFS) program, higher corporate average fuel economy standards and regulation of greenhouse gases on the federal and state levels as a pollutant. These are expected to limit growth in domestic product demand and keep the industry reliant on exports to maintain full utilization. The industry has seen regulatory relief under the current administration, including small refinery waivers for the RFS programs, which resulted in a significant drop in RIN prices that benefited all refiners. CVI has been reducing its RIN exposure through increased biodiesel blending and is pursuing establishing a wholesale and retail business. The potential renewable diesel project would further reduce its RINs exposure. High-Volatility Sector: Refining remains one of the most cyclical corporate sectors, and is subject to periods of boom and bust, with sharp swings in crack spreads over the cycle. The last major bust period was 2009, when collapsing oil prices and lagging costs led industry margins to collapse. The rebound in market conditions was also relatively quick, however, as the industry tends to adjust rapidly. However, historical experiences may not apply given there is a great deal of uncertainty as to the depth and the timing from the impact of the coronavirus. The sector has benefited in recent years by lower crude oil prices as well as rapid increase in U.S. crude oil production, which has widened the WTI-Brent price differential as a result of transportation constrains. CVR has an ESG Relevance Score of '4' for Governance Structure as Mr. Carl C. Icahn owns approximately 71% of the voting power of the common stock. The substantial ownership concentration has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY CVI's ratings reflect its status as a medium-sized Mid-Continent complex refiner with two refineries and approximately 206,500bpd of nameplate capacity. The company's refining capacity is smaller than peers Valero Energy Corporation (BBB/Negative) with 2.6 million barrels per day (mmbpd), Marathon Petroleum Corporation (BBB/Negative) with 3.0mmbpd and Phillips 66 with 1.9mmbpd. CVI is also smaller than peers PBF Holdings Inc. (B+/Negative) with 1.04mmbpd and HollyFrontier Corporation (BBB-/Negative) with 457,000 barrels of oil equivalent per day (boepd). The company's refining asset quality is strong and advantaged in several ways, such as geographically with a concentration of price-advantaged capacity in the Mid-Continent and operationally with flexibility to take advantage of light, heavy and sour crude. CVI also has leverage with IMO 2020 and ongoing access to low-cost U.S. natural gas and power prices. Gross leverage, defined as total debt/EBITDA, for 2019 is 1.4x, and generally in line with 'BB' to 'BBB' peers with leverage in the 1.4x-2.0x range. The major differentiator between 'BB' issuers such as CVI and PBF versus 'BBB' peers is primarily size, geographic diversification and business line diversification. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Agency's Rating Case for the Issuer -- WTI oil prices of $38/bbl in 2020, $42.00/bbl in 2021, $47 in 2022, and $50 for the long-term; -- PADD II 2-1-1 crack spreads averaging $9 in 2020 and increasing to $10-$15 over the forecasted period; -- Operating expenses of $4.50 per barrel in 2021; -- Shareholder distributions of $120 million/year in 2020 and 2021 and increasing as refinery economics improve; -- Total capex of $133 million in 2020 and $100-$125 million thereafter; -- No assumptions for acquisition, divestitures, stock repurchases, or equity offerings over the forecasted period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Greater earnings diversification or evidence of lower cash flow volatility; -- Sustained debt/EBITDA leverage at or below 2.0x. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Material reduction in liquidity over a sustained period; -- Sustained debt/EBITDA leverage above approximately 3.5x; -- A disproportionate increase in dividends and the share repurchase program to cash flow generation. The Negative Rating Outlook will be removed upon improvement in the product markets and if liquidity has not been materially compromised. LIQUIDITY AND DEBT STRUCTURE Sufficient Near-Term Liquidity: CVI had $624 million of cash and $116 million of availability under credit facilities as of Sept. 30, 2020. CVR Refining, LP has a $400 million senior secured asset-based lending (ABL) credit facility due in November 2022. The ABL facility is based on cash and current assets and the amount available could shrink if oil prices were to fall sharply. Fitch believes that existing liquidity should allow CVI to support operational and debt obligations in 2021 with the expectation that improving refining economics will provide more than adequate liquidity over the forecasted time horizon. The next bond maturity is not until 2025. The undrawn revolver matures in 2022 and Fitch does not anticipate material borrowings under its forecasted time horizon. CVI needs to address a $645 million bond maturity due in 2022 at its CVR Partners subsidiary, of which CVI has a 35% interest. Fitch does not expect CVI to support the credit through a cash infusion, however, a change in financial policy could result in a negative ratings action. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS CVR has an ESG Relevance Score of '4' for Governance Structure as Mr. Carl C. Icahn owns approximately 71% of the voting power of the common stock, creating substantial ownership concentration. This has 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. DA VINCI ENGINEERING: Hires Metro Tax as Accountant --------------------------------------------------- Da Vinci Engineering & Consulting, LLC, seeks authority from the U.S. Bankruptcy Court for the Eastern District of Wisconsin to employ Metro Tax & Accounting, as accountant to the Debtor. Da Vinci Engineering requires Metro Tax to: -- assist with the compilation of monthly reports; -- perform projection and financial analysis, as may be appropriate, including any analysis or report required under any cash collateral order in effect; -- prepare payroll; and -- work on all financial aspects of the Debtor's reorganization, including but not limited to, preparing any tax returns required to be filed. Metro Tax will be paid at the hourly rate of $150. Metro Tax will also be reimbursed for reasonable out-of-pocket expenses incurred. Dan Bacon, a partner of Metro Tax & Accounting, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Metro Tax can be reached at: Dan Bacon Metro Tax & Accounting, Inc. 1238 Porlier Street Green Bay, WI 54301 Tel: (920) 544-4000 About Da Vinci Engineering & Consulting Founded in 2011, Da Vinci Engineering -- https://davinciec.com/ -- is a product design firm specializing in contract-based engineering services. Da Vinci Engineering & Consulting, LLC, filed its voluntary petition for relief under Chapter 11, Subchapter V (Bankr. E.D. Wis. Case No. 20- 27785) on Dec. 3, 2020. The petition was signed by David Gruenwald, co-managing member. At the time of the filing, the Debtor disclosed total assets of $243,976 and total liabilities of $1,104,736 as of July 31, 2020. Murphy Desmond S.C. serves as the Debtor's counsel. DESOTO OWNERS: Romspen Says Blalock, NDC Hirings Premature ---------------------------------------------------------- Desoto Owners LLC has refiled with the U.S. Bankruptcy Court for the Eastern District of New York its applications seeking approval to hire (i) Blalock Walters P.A. as special counsel to the Debtor and (ii) NDC Development Company as development consultants to the Debtor. Blalock Walters is representing the Debtor in the proposed redevelopment of the Desoto Square Mall, which is located at 303 301 Blvd W., Bradenton, Fla. and is situated on a 58 acre parcel of land. NDC Development is providing pre-development services in connection with the project. The Debtor filed the Applications on Nov. 24, 2020, but did not notice the applications for hearing. The Debtors refiled the applications Dec. 11, and notified that the hearing for the applications will be held before the Honorable Jil Mazer-Marino, United States Bankruptcy Judge for the Eastern District of New York, Alfonse M. D'Amato U.S. Courthouse, 271-C Cadman Plaza East, Courtroom 3529, on January 13, 2021 at 11:00 a.m. Romspen US Master Mortgage, LP, filed a limited objection to the applications. Romspen notes that the motions and orders approving the $500,000 financing and use of cash collateral do not reference a budget for professionals. Romspen in mid-October filed its motion dismissing the Chapter 11 case. Although a scheduling order has yet to be entered, it is anticipated that an evidentiary hearing on the Motion to Dismiss will be held on February 17-18, 2021. Although Romspen acknowledges that debtors are entitled to retain competent professionals to assist them in carrying out their duties under the Bankruptcy Code and their businesses, Romspen believes the Debtor's proposed retention of the Professionals is premature given that the course and outcome of this chapter 11 case presently is unclear. "Critically, if either aspect of the Motion to Dismiss is granted, the Debtor's proposed redevelopment of the premises commonly known as the Desoto Square Mall, for which the lion's share of the services proposed to be provided by the Professionals is focused, will not materialize. Indeed, as discussed in previous filings by Romspen, the Debtor's ability either to fund the proposed redevelopment or confirm a plan that would permit the redevelopment and not violate Section 1129 of the Bankruptcy Code, is highly suspect in the context of this case. Both of those issues are being litigated in connection with the Motion to Dismiss. Accordingly, Romspen submits that the hearing on the Applications should not be held until, at the earliest, the Court rules on the Motion to Dismiss," Romspen said. Romspen's counsel: COLE SCHOTZ P.C. Michael R. Yellin Leo V. Leyva, Esq. James T. Kim, Esq. Michael R. Yellin, Esq. Jacob S. Frumkin, Esq. Telephone: (646) 563-8930 Facsimile: (646) 563-7930 Email: LLeyva@coleschotz.com JKim@coleschotz.com MYellin@coleschotz.com JFrumkin@coleschotz.com The firms can be reached through: Scott E. Rudacille, Esq. Blalock Walters P.A. 802 11th Street West Bradenton, FL 34205 Tel: (941) 748-0100 Fax: (941) 745-2093 - and - Ronald J. Allen NDC Development Company 1001 3rd Avenue West, Suite 600 Bradenton, FL 34205 Telephone: (941) 782-0330 E-mail: rallen@ndcassetmanagement.com About Desoto Owners Desoto Owners LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)), owning a real property commonly known as the Desoto Square Mall, which is located at 303 301 Blvd W., Bradenton, Fla. and is situated on a 58 acre parcel of land. Desoto Owners LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-43387) on Sep. 22, 2020. The petition was signed by Moshe Fridman, chief executive officer. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. Isaac Nutovic, Esq. at NUTOVIC & ASSOCIATES represents the Debtor as counsel. EARLY BIRD FOODS: Unsecured Creditors Will Get 10% in Plan ---------------------------------------------------------- Early Bird Foods & Co., LLC filed with the U.S. Bankruptcy Court for the Eastern District of New York a Chapter 11 Small Business Plan and an explanatory Disclosure Statement on Dec. 10, 2020. The allowed secured claim held by the New York Business Development Corporation and in the amount of $335,104 will be paid in full pursuant to the following terms: * Re-amortization of principal balance of $311,559 with fixed interest rate of 6%. This will result in a monthly payment of $3,753 for the Debtor. * Extension of the loan maturity date to 12/15/2029 * Initial payment of $13,000 applied to unpaid interest on the Effective Date; * Balloon payment of $37,000 of existing unpaid interest upon loan maturity date. Holders of Class 2 General Unsecured Claims will each receive three distributions totaling 10% of the amount of such claim payable on the first, second and third anniversaries of the Effective Date. The actual distributions that will be made will be determined based upon claims that have been allowed or disallowed. The Reorganized Debtor will remit to the distributing agent its disposable income for a period of 3 to 5 years subsequent to the Effective Date, for the distribution by the distributing agent to creditors pursuant to the terms of the Plan. The funding of the distributions under the Plan will be made from a combination of cash on hand as of the Effective Date; and revenues generated by the Debtor on and after the Effective Date. The Debtor believes that these sources are sufficient to implement the Plan and make all distributions. A full-text copy of the Disclosure Statement dated December 10, 2020, is available at https://bit.ly/2KA307o from PacerMonitor.com at no charge. Attorneys for the Debtor: KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP Tracy L. Klestadt Christopher Reilly 200 West 41st Street, 17th Floor New York, New York 10036 Tel: (212) 972-3000 Fax: (212) 972-2245 About Early Bird Foods & Co. Early Bird Foods & Co., LLC, is a privately held New York limited liability company established around 2008. Early Bird filed a voluntary Chapter 11 petition (Bankr. E.D.N.Y. Case No. 19-45669) on Sept. 19, 2019, and is represented by Tracy L. Klestadt, Esq. and Christopher J. Reilly, Esq., at Klestadt Winters Jureller Southard & Stevens, LLP. The Debtor listed under $1 million in assets and liabilities. ECOARK HOLDINGS: To Effect 1-for-5 Reverse Stock Split ------------------------------------------------------ Ecoark Holdings, Inc. filed with the Nevada Secretary of State a Certificate of Change to effect a one-for-five reverse stock split of the issued and outstanding, and treasury shares of the Company's common stock, par value $0.001 per share and a proportionate reduction of the number of shares of Common Stock the Company is authorized to issue. The Board of Directors of the Company had previously approved the Certificate of Change and the Reverse Split. The Certificate of Change was effective upon filing. The Reverse Split was effected without obtaining stockholder approval, as permitted by Section NRS 78.207 of the Nevada Revised Statutes. The Common Stock begins trading on a reverse split-adjusted basis at the open of business on Dec. 17, 2020. In connection with the Reverse Split, the CUSIP number for the Common Stock has changed. The Company's trading symbol remains unchanged. Reason for the Reverse Split The Reverse Split was effected in order to meet the initial listing requirements of a national securities exchange. While the Company has applied to list its Common Stock on a national securities exchange, the application has not been approved and there can be no assurance that it will be approved or that the market price per new share of Common Stock after the Reverse Split will remain unchanged or increase in proportion to the reduction in the number of old shares of Common Stock outstanding before the Reverse Split. Principal Effects of the Reverse Split The Reverse Split had the following principal effects: * the number of issued and outstanding shares of Common Stock was decreased based on the one-for-five ratio; * the total number of shares of Common Stock the Company is authorized to issue was reduced proportionally based on the one-for-five ratio and Article Four of the Articles of Incorporation of the Company is deemed amended accordingly; * appropriate adjustments have been made to stock options, restricted stock and other securities convertible into or exercisable for shares of the Company's Common Stock granted under its plans to maintain the economic value of such awards; * the number of shares reserved for issuance under the Company's 2013 Incentive Stock Option Plan and 2017 Omnibus Stock Plan, has been reduced proportionally based on the one-for-five ratio (and any other appropriate adjustments or modifications have been made under the plans); and * the exercise price of outstanding warrants to purchase the Company's Common Stock and the number of shares reserved for issuance upon exercise of such warrants has been adjusted in accordance with their terms based on the one-for-five ratio. The Reverse Split did not affect the Company's authorized preferred stock. After the implementation of the Reverse Split, the Company continues to have 5,000,000 shares of authorized preferred stock, par value $0.001 per share. There are no shares of the Company's preferred stock outstanding. Each stockholder's percentage ownership in the Company and proportional voting power remain virtually unchanged as the result of the Reverse Split, except for minor changes and adjustments resulting from rounding up fractional shares. The rights and privileges of the holders of shares of Common Stock are not materially affected by the Reverse Split. Effect on Beneficial Owners The shares held by stockholders through a bank, broker, custodian or other nominee are intended to be treated in the same manner as registered stockholders whose shares are registered in their names in connection with the Reverse Split. Banks, brokers, custodians or other nominees are instructed to effect the Reverse Split for their beneficial holders holding our Common Stock in "street name." However, these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing the Reverse Split. Stockholders who hold Common Stock in "street name" and who have any questions in this regard are encouraged to contact their respective banks, brokers, custodians or other nominees. Effect on Registered Holders of Certificated and Non-Certificated Shares Certain registered holders may hold some or all of their shares of Common Stock electronically in book-entry form with Philadelphia Stock Transfer, Inc., its transfer agent. These stockholders do not hold stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. Stockholders who hold shares electronically in book-entry form with the Transfer Agent will not need to take action. The Reverse Split will automatically be reflected in the Transfer Agent's records and on such stockholders' next account statement. Stockholders holding paper certificates may (but are not required to) exchange their stock certificates for new certificates giving effect to the Reverse Split. No new certificates will be issued to a stockholder until that stockholder has surrendered the stockholder's outstanding certificates. For instructions on how a stockholder should surrender his, her or its certificates representing pre-split shares of Common Stock to the Transfer Agent in exchange for certificates representing post-split shares, please contact the Transfer Agent at (484) 416-3124. About Ecoark Holdings Rogers, Arkansas-based Ecoark Holdings, Inc., founded in 2011, Ecoark is a diversified holding company. Ecoark Holdings has four wholly-owned subsidiaries: Ecoark, Inc., a Delaware corporation which is the parent of Zest Labs, Inc., 440IoT Inc., Banner Midstream Corp., and Trend Discovery Holdings Inc. Through its subsidiaries, the Company is engaged in three separate and distinct business segments: (i) technology; (ii) commodities; and (iii) financial. Ecoark reported a net loss of $12.14 million for the year ended March 31, 2020, compared to a net loss of $13.65 million for the year ended March 31, 2019. As of Sept. 30, 2020, the Company had $33.50 million in total assets, $15.71 million in total liabilities, and $17.79 million in total stockholders' equity. ECS LABS: Case Summary & 5 Unsecured Creditors ---------------------------------------------- Debtor: ECS Labs, LLC Arlington Height's Finance Station PO Box 470458 3101 West 6th Street Fort Worth, TX 76147-9998 Business Description: ECS Labs, LLC, together with its wholly- owned operating subsidiaries, collectively constitute the "Green Lotus" premium hemp oil CBD products brand. Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43806 Debtor's Counsel: Robert A. Simon, Esq. WHITAKER CHALK SWINDLE AND SCHWARTZ 301 Commerce St. Ste 3500 Fort Worth, TX 76102 Tel: 817-878-0500 E-mail: rsimon@whitakerchalk.com Total Assets: $1,024,813 Total Liabilities: $7,472,638 The petition was signed by Carlos Frias, chief executive officer. A copy of the Debtor's list of five unsecured creditors is available for free at: https://www.pacermonitor.com/view/QLGAHPY/ECS_Labs_LLC__txnbke-20-43806__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QGCO34I/ECS_Labs_LLC__txnbke-20-43806__0003.0.pdf?mcid=tGE4TAMA ENCORE CAPITAL: Fitch Assigns BB+ Rating on EUR415MM Sec. Notes --------------------------------------------------------------- Fitch Ratings has assigned Encore Capital Group, Inc.'s (BB+/Stable) EUR415 million issue of floating rate senior secured notes due January 2028 (ISINs: XS2271247251, XS2271247178) a final rating of 'BB+'. The final rating is in line with the expected rating Fitch assigned to Encore's initially planned EUR275 million issue of 2027 notes on December 7, 2020. The notes will bear interest at three-month EURIBOR (subject to a 0% floor) plus 4.25% per year. As a result of the increased size of the issue, the new notes are being used to redeem subsidiary Cabot Financial (Luxembourg) II S.A.'s EUR400 million senior secured floating rate notes due 2024 in full rather than in part as originally planned, as well as to pay associated fees. KEY RATING DRIVERS Under Encore's recently implemented global funding structure, the senior secured notes are guaranteed by most Encore subsidiaries and rank equally with other senior secured obligations. Their rating is equalised with Encore's Long-Term Issuer Default Rating (IDR), reflecting the prior claim on available security of a higher-ranking super-senior debt level. This results in Fitch expecting average rather than above-average recoveries for Encore's senior secured notes. Encore's Long-Term IDR reflects its leading franchise in the debt purchasing sector in its chosen markets, its strong recent profitability and its low leverage by the standards of the sector. The rating also takes into account the concentration of Encore's activities within debt purchasing and the potential for a prolonged Covid-19-driven economic downturn to weaken collections performance and portfolio asset quality. It further factors in the need over the longer term for debt purchasers to maintain adequate access to funding with which to replenish their stocks. RATING SENSITIVITIES The notes' rating is primarily sensitive to changes in Encore's Long-Term IDR. However, a downgrade of Encore's IDR would not automatically lead to negative rating action on the notes, depending on Fitch's view of the likely impact on recoveries of the circumstances giving rise to the downgrade. Changes to Fitch's assessment of relative recovery prospects for senior secured debt in a default (e.g., as a result of a material shift in the proportion of Encore's debt that is either unsecured or super-senior secured) could also result in the senior secured debt rating being notched up or down from the IDR. Factors that could, individually or collectively, lead to positive rating action/upgrade: Given the current economic backdrop, an upgrade of Encore's IDR is unlikely in the short term. Over the medium to long term, positive rating action would be subject to: - Maintenance of gross debt/adjusted EBITDA consistently below 2.5x, while also developing a significant tangible equity position via retention of profits; and - Demonstration of collections and earnings resilience throughout the current global economic dislocation. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A sustained fall in earnings generation, particularly if leading to a weakening in key debt service ratios or other financial efficiency metrics; - Failure to adhere to management's public leverage guidance of maintaining a net debt-to-adjusted EBITDA of 2x-3x; - A weakening in asset quality, as reflected in acquired debt portfolios significantly underperforming anticipated returns or requiring material write-downs in expected recoveries; or - An adverse operational event or significant disruption in business activities (for example arising from regulatory intervention in key markets adversely impacting collection activities), thereby undermining franchise strength and business-model resilience. 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 Encore Capital Group, Inc.: Customer Welfare - Fair Messaging, Privacy & Data Security: 4, Financial Transparency: 4 Fitch has assigned Encore an ESG relevance score of '4' in relation to 'Customer Welfare - Fair Messaging, Privacy & Data Security', in view of the importance of fair collection practices and consumer interactions and the regulatory focus on them. Fitch has also assigned an ESG relevance score of '4' for 'Financial Transparency', in view of the significance of internal modeling to portfolio valuations and associated metrics such as estimated remaining collections. These factors have negative influences on the rating, but their impacts are only considered moderate, and they are features of the debt purchasing sector as a whole, and not specific to Encore. 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. ENERGY FISHING: Proposed Enterprise Auction of 8 Trucks Approved ---------------------------------------------------------------- Judge David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas authorized Energy Fishing & Rental Services, Inc.'s auction sale of the following trucks: (i) 2013 GMC Sierra 2500HD, VIN 1GT02ZCGXDZ129338, (ii) 2015 Chevrolet Silverado 2500HD, VIN 1GC1KVEG1FF137035, (iii) 2021 Ford F-350 Chassis, VIN 1FDRF3HT6CEB38683, (iv) 2014 Ford F-250, VIN 1FT7W2B64EEB45854, (v) 2012 Chevrolet Silverado 1500, VIN 3GCPCREA1CG169763, (vi) 2013 Ford F-250, VIN 1FT7W2BT5DEB72226, (vii) 2012 GMC Sierra 1500, VIN 3GTP1VE09CG196487, and (viii) 2014 Chevrolet Silverado 1500, VIN 3GCUKREC2EG39993. Enterprise Fleet Management is authorized to serve as the auctioneer for the sale pursuant to the terms of the Agreement. The Debtor is immediately authorized to sell the Vehicles at auction through Enterprise. The Vehicles will be sold at auction free and clear of all liens, claims, interests, and encumbrances, and that all such liens, claims, interests, and encumbrances that exist in, to, or against the Vehicles will attach to the net proceeds. Except for any reimbursement of expenses and the payment of its compensation as described in the Motion or the Agreement, Enterprise will pay the net proceeds from the Vehicles obtained at the auction to the Debtor. Within three business days of receipt of the net proceeds, the Debtor will pay these secured creditors pro rata up to the full amount of their claim: Ector County: 70%; Harris County: 23%; and Cypress-Fairbanks ISD: 7%. A copy of the Agreement is available at https://tinyurl.com/yyzkbr47 from PacerMonitor.com free of charge. About Energy Fishing & Rental Houston, Texas-based Energy Fishing & Rental Services, Inc., provides fishing and downhole intervention services. The Company offers accumulators, adapters, backoff tools, bailers, bails, bars, baskets, bits, blocks, blowout preventers, bushings, casing patches, couplings, cutters, die collars, rabbits, elevators, extensions, overshots, and accessories. Visit http://www.energyfrs.com/for more information. Energy Fishing & Rental Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-20299) on Sept. 18, 2020. The petition was signed by Arthur L. Potter, chairman and president. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge David R. Jones oversees the case. Munsch Hardt Kopf & Harr, P.C., is the Debtor's legal counsel. ENLINK MIDSTREAM: Fitch Assigns BB+ Rating on New Unsec. Notes -------------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR4' rating to EnLink Midstream, LLC's (ENLC) proposed offerings of senior unsecured notes. The proceeds are expected to be used to partially repay the $850 million term loan that is due in December of 2021. The Rating Outlook remains Negative. The ratings reflect a revenue stream that is mostly fee-based, as well as management's demonstrated commitment to credit quality, including liquidity. The Outlook reflects volumetric uncertainty primarily in the Oklahoma segment, and secondarily in the company's operating territories in the Permian basin and Barnett shale. The Outlook also captures uncertainty regarding the upcoming roll-off of Devon Energy Corporation's (DVN; BBB/Rating Watch Positive) Minimum Volume Commitment (MVC) in the STACK region of Oklahoma at the end of 2020. In 2021, ENLC approaches its first year (since Fitch's coverage inception) without MVCs from its historically most important customer. ENLC's Long-Term Issuer Default Rating and senior unsecured rating are reflective of ENLC's 100% common units ownership of EnLink Midstream Partners, LP (ENLK; BB+/Negative). ENLC is the parent of ENLK. The ratings are also based on the debt guarantees (not cross-guarantees) that are in place between ENLK and ENLC for ENLC's senior unsecured debt. The senior unsecured notes under ENLC are guaranteed by ENLK and are ranked pari passu with all existing and future senior unsecured debt under ENLK. Additionally, the existing ENLK Series B and Series C preferred units at ENLK are subordinated to ENLK's debt and ENLC's senior unsecured credit facility, term loan and proposed notes KEY RATING DRIVERS Leverage Remains Elevated: As of 3Q20, ENLC's leverage (Debt w/ Equity Credit/Adj. EBITDA) was approximately 5.0x. Fitch forecasts ENLC's leverage (total debt with equity credit to adjusted EBITDA) to be above 5.0x at YE20 and YE21, but below the negative rating sensitivity of 5.8x. During 2020, ENLC was able to execute on credit enhancement items, such as distribution cuts, capex reduction, and cost savings, and posed great 3Q20 results (including stronger natural gas volume in the Permian). However, in 2021 ENLC's earnings remain vulnerable to the declining performance of its main operating segment, Oklahoma. As such, Fitch forecasts ENLC's leverage to remain elevated at above 5.0x through YE21. Though the Fitch forecast is for leverage below 5.8x, the Negative Outlook also captures the large changes that have occurred and are occurring in the natural gas market (low prices since about mid-2019), and the crude oil market (the fragility of OPEC+ that was evident in March 2020). Oklahoma Headwind Remains: Fitch believes that the Oklahoma segment will remain challenged for ENLC driven by the decreased drilling activities. The lingering effects of production activity will weigh on ENLC's production volume in 2021. Further, ENLC's near-term volume growth in Oklahoma is also projected to be largely propelled by single basin producers, whose drilling activities are more prone to swing in commodities prices. While in 2020 ENLC is expected to receive $55 million-$65 million under its MVC contracts with DVN in Oklahoma, the MVC is rolling off at the end of 2020, heightening the volumetric risk in the Oklahoma segment thereafter. Permian and Louisiana Assets Growth: The Permian and Louisiana segment remain as the two bright spots for ENLC, as ENLC's diversification in these regions allows the company to offset declining operating results in Oklahoma and Barnett. ENLC's completion of the Tiger plant will boost the Permian throughput volumes. ENLC also has long-term contracts with high-quality producer customers that have a focus in allocating capital in the Permian in the near term. Within Louisiana, ENLC has built an integrated gas and NGL pipeline network that has interconnectivity to key export markets near the Gulf Coast. Fitch also expects ENLC to benefit from the Cajun-Sibon pipeline system, which should provide additional volume to the fractionators in the region. Customer Exposures and Volumetric Risk: Customer risk is a concern for ENLC and generally across most G&P operators in the midstream sector, given the exposure to non-IG producer customers, some of which are small. One of ENLC's customers, WhiteStar Petroleum (NR), filed for bankruptcy in 2Q19, and there was no recovery under a contract that originally was a multi-year MVC. However, Fitch continues to view the counterparty risk for ENLC as limited, given that ENLC is largely exposed to IG-quality counterparties. Another key risk that ENLC faces given its contract structure is volumetric risk. This risk further increases starting in 2021 as the MVC with DVN expires at the end of 2020. While ENLC also holds some MVC with other producer customers as part of the fixed-fee contracts, Fitch expects that there is an immaterial amount of deficiency payment across those customers under its rating case. Acreage Dedication: ENLC's term periods for dedications are all long term; however, some of those expiry years are relevant for consideration of credit strength. The increased competitive landscape at the Permian is also likely to pressure these contracts to be renewed at a less favorable rate that could result in much lower cash flow. Fee-Based Cash Flow: Fitch expects ENLC will continue to generate 90% of its gross margin from fee-based services in 2020 and 2021. G&P operations in the Permian and Oklahoma are further underpinned by long-term, fee-based contracts. ENLC has historically exhibited a strong focus on fee-based contracts to mitigate commodity price volatility. Private Equity Sponsor Relationship: There are some uncertainties around ENLC's future capital structure under the new executive leadership, particularly in relation to pursuing future growth opportunities in its partnership with private equity sponsor Global Infrastructure Partner (GIP). Projects or acquisitions that require sizable funding would put further stress on ENLC's balance sheet in the absence of a balanced funding mix between debt and equity. The Duty of ENLCs Managing Member: ENLC's managing member, under the operating agreement of EnLink Midstream, LLC, is required to act in good faith. However, this agreement puts any acts as outside any other standard in Delaware law. The managing member has initiated in the past, and may initiate in the future (given the challenges facing ENLC) actions that affect credit quality at ENLC. Parent Subsidiary Linkage: Fitch considers the consolidated credit profile of ENLC and ENLK under its Parent Subsidiary Ratings Linkage Criteria for the existing ratings of these two entities. ENLK exhibits a stronger credit profile considering that it is the operating subsidiary where the assets are located and cash flow is generated. The existing ENLC's unsecured revolver, term loan and proposed notes are guaranteed by ENLK and are ranked pari passu to the existing debt at ENLK. Accordingly, Fitch also views the legal and operational ties to be strong between the two entities. DERIVATION SUMMARY Western Midstream Partners, LP (WES; BB/Stable) is a G&P comparable for ENLC. Both companies have similar degree of geographic diversification (moderate diversification) and customer concentration. Fitch views that WES is better positioned financially relative to ENLC given WES's larger size (by EBITDA size) and lower leverage of 4.6x-4.8x at YE21 (versus ENLC's above 5.0x). However, WES's overall counterparty risk is somewhat greater than ENLC's, as WES is largely exposed to non-investment grade E&P producer customers. WES's largest counterparty, Occidental Petroleum Corp. (OXY; BB/Stable), is expected to contribute approximately 60%-65% of WES's revenue in 2020. ENLC has a customer concentration (greater than 10% of revenue) from higher-quality customers, including Devon Energy (BBB/Stable). Relative to other single basin Private Equity-backed G&P peers in the Permian such as Lucid Energy (B-/Negative), ENLC is much larger in size and is more geographically diversified. These single basin G&P companies operate at much higher leverage in the near term and have a concentrated stream of cash flow under limited scale of operation and geographic presence. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer -- Declining operating results in Oklahoma and Barnett to be offset by strong performance in the Permian and Louisiana; -- 2020 total capex aligns with management guidance of $190 million-$250 million; -- Distribution remains level in forecast years; -- Fitch current commodity price deck: Henry Hub prices at $2.10/mcf and $2.45 in 2020 and 2021; WTI oil price of $38 and $42 in 2020 and 2021. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Leverage and distribution coverage sustained below 4.8x and above 1.1x underpinned by stable segment performances; Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A significant change in cash flow stability, including a move away from the current profile of fee-based profits that could lead to a negative rating action; -- Leverage above 5.8x on a sustained basis and/or distribution coverage consistently below 1.1x. LIQUIDITY AND DEBT STRUCTURE Liquidity Adequate: Fitch expects ENLC's debt maturity profile to improve following the proposed senior unsecured notes issuance, as the proceeds of the offerings are expected to fund the partial redemption of the existing $850 million term loan that comes due in December of 2021, leaving approximately $350 million term loan outstanding. As of Sept 30, 2020, the company had $300 million borrowings outstanding under its $1.75 billion revolving credit facility that matures in January 2024. This facility contains a leverage covenant maximum of 5.0x for consolidated indebtedness to consolidated EBITDA (each term as defined, and where EBITDA includes EBITDA from certain capital expansion projects) and consolidated indebtedness excludes the existing and currently contemplated preferred securities. The maximum leverage level may rise from 5.0x to 5.5x for four quarters following an acquisition (with the rise subject to limitations). In October 2020, ENLC also entered into a $250 million Accounts Receivable Securitization Facility, creating additional financial flexibility to reduce its revolver borrowings. ENLC was in compliance with its covenant as of Sept. 30, 2020 and is expected to remain in compliance under Fitch's forecast period. Fitch expects ENLC will continue to largely fund its modest capex program with its internally generated cash flow in the near term. Following the redemption, ENLC's nearest debt maturities is the expected $350 term loan due in December 2021 and $225 million borrowings outstanding under its accounts receivables securitization facility that terminates in October 2023. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch applied 50% equity credit to ENLK's preferred convertibles. 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 ENLC has a relevance score of '4' for Group Structure and Financial transparency given their complex group structure, with private levered holding company owning its general partner. This has 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. ENLINK MIDSTREAM: Moody's Assigns Ba2 Rating to New Unsec. Notes ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to EnLink Midstream, LLC's (ENLC) proposed offering of senior unsecured notes. ENLC's subsidiary is EnLink Midstream Partners, LP. ENLC and ENLK's other ratings and stable rating outlooks remain unchanged. Net proceeds from the offering are expected to be used to repay a portion of the term loan due 2021. "The proposed notes issuance is opportunistically repaying existing debt while improving financial flexibility," commented Amol Joshi, Moody's Vice President and Senior Credit Officer. Assignments: Issuer: EnLink Midstream, LLC Senior Unsecured Notes, Assigned Ba2 (LGD4) RATINGS RATIONALE ENLC's new senior unsecured notes have been rated Ba2, the same as ENLC's Ba2 Corporate Family Rating, and consistent with the ratings of the existing senior unsecured notes at ENLC and ENLK. ENLC has a $1.75 billion unsecured revolving credit facility maturing in January 2024, $850 million unsecured term loan maturing in December 2021 and $498.7 million senior unsecured notes due 2029. In addition, ENLK has over $3 billion of senior unsecured notes outstanding. An indirect subsidiary of ENLC also has an accounts receivable securitization facility of up to $250 million. The new notes are unsecured and benefit from an upstream guarantee from ENLK, and are pari passu with ENLC's existing unsecured debt. ENLC's revolver, term loan and unsecured notes benefit from an upstream guarantee from ENLK. However, ENLK's unsecured notes do not benefit from downstream guarantees from ENLC or upstream guarantees from operating subsidiaries. EnLink intends to have all its assets at ENLK, and no assets are expected to be held at ENLC, allowing pari passu consideration for obligations at ENLC and ENLK. Furthermore, the obligations of ENLK's subsidiaries are not material in size relative to the unsecured notes to warrant notching below the CFR. The unsecured notes are therefore rated in-line with the Ba2 CFR. However, if the company holds material assets at ENLC, ENLC's obligations will have a priority claim to those assets which will pressure the ratings of ENLK's unsecured notes. ENLC's Ba2 CFR reflects its high proportion of fee-based revenue with cash flow visibility, but subject to increased volume risk. In March 2020, ENLC announced a significant unit distribution cut, boosting its distribution coverage while aiming to self-fund its 2020 capital spending needs. Good distribution coverage implies that EnLink will retain a higher proportion of cash flow, alleviating the pressure of seeking third party debt and dilutive equity to finance capital spending. EnLink also has a diversified gathering & processing (G&P) asset base, but the company has meaningfully cut capital spending and cash flow should decline in 2021, likely increasing leverage. EnLink receives significant revenue and has a sizable customer concentration risk with Devon Energy Corporation (Devon, Ba1 stable), its largest counterparty. The company has a large exposure to the STACK, where it faces volume risk due to a substantial reduction in 2020 drilling activity by Devon. EnLink also has significant exposure to the mature Barnett Shale, where volumes have been declining. EnLink will need to offset this volume and cash flow decline through capital intensive growth in other regions such as the Permian, which entails execution risk. EnLink's curtailed 2020 capital spending will largely be focused in the Permian Basin, followed by spending to enhance its Louisiana assets. ENLC's and ENLK's outlooks are stable reflecting good liquidity and distribution coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS ENLC's rating could be downgraded if debt/EBITDA increases to exceed 5x, or leverage consolidated with its controlling owners GIP III Stetson I, L.P.'s and GIP III Stetson II, L.P.'s (collectively GIP III Stetson) debt exceeds 6x, or distribution coverage significantly deteriorates. Additional weakness in GIP III Stetson's credit profile would pressure ENLC's rating. ENLC's rating could be upgraded if the company maintains debt/EBITDA comfortably below 4.5x and consolidated leverage (inclusive of GIP III Stetson debt) below 5x, while maintaining strong distribution coverage. For an upgrade, ENLC should successfully grow cash flow to more than offset expected decline within its mature assets and GIP III Stetson's credit profile should be supportive. The principal methodology used in this rating was Midstream Energy published in December 2018. EnLink Midstream, LLC is a publicly-traded company engaged in midstream energy services through its subsidiary EnLink Midstream Partners, LP, including the gathering, processing, fractionation, transportation and marketing of natural gas, natural gas liquids and crude oil in several US regions, including in the STACK, Cana and Arkoma Woodford Shales, Barnett Shale, Permian Basin and Louisiana. ERESEARH TECHNOLOGY: Moody's Reviews B3 CFR for Downgrade --------------------------------------------------------- Moody's Investors Service placed eResearch Technology, Inc.'s B3 Corporate Family Rating, B3-PD Probability of Default Rating and B2 senior secured first lien credit facility ratings on review for downgrade. Moody's revised the outlook to ratings under review from stable. The review for downgrade is prompted by the company's agreement to merge with BioClinica Holding I, LP's ("BioClinica;" Caa1 Corporate Family Rating, positive outlook). The details of the financing have not yet been disclosed. However, Moody's expects the transaction will result in a significant addition of debt and interest burden to ERT's current financial profile. Governance is a key consideration for the action, reflected in aggressive financial policies. The review for downgrade also reflects integration risk, as this will be the largest transaction in ERT's history. However, Moody's considers the merger to be strategically sensible, as it will increase the company's scale and broaden its commercial offerings and technology capabilities. ERT expects to close the transaction in 2021, subject to customary closing conditions, including approval by regulatory agencies. On Review for Downgrade: Issuer: eResearch Technology, Inc. Probability of Default Rating, Placed on Review for Downgrade, currently B3-PD Corporate Family Rating, Placed on Review for Downgrade, currently B3 Senior Secured First Lien Revolving Credit Facility, Placed on Review for Downgrade, currently B2 (LGD3) Senior Secured First Lien Term Loan, Placed on Review for Downgrade, currently B2 (LGD3) Outlook Actions: Issuer: eResearch Technology, Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Prior to the review for downgrade, eResearch Technology, Inc.'s ("ERT") B3 Corporate Family Rating reflects its very high financial leverage with pro forma adjusted debt-to-EBITDA above 8x. The rating also reflects the elevated financial risk associated with private equity ownership evidenced by aggressively high initial debt levels following the 2020 leveraged buy-out, as well as a track record of growth through debt-funded acquisitions. Social risks for ERT include a data breach event, where intellectual property and other internal types of sensitive records could be subject to legal or reputational issues. The rating is also constrained by ERT's significant customer concentration (albeit across a number of different clinical trials), as well as the risk that larger better-capitalized companies could choose to pursue developing their own electronic clinical outcome assessments. However, the rating is supported by the company's strong market position in the niche electronic-based clinical outcome assessment market, solid growth prospects driven by favorable industry fundamentals (expansion in ERT's bookings combined with growth in clinical trials), solid EBITDA margins and high revenue visibility provided by contract backlog The ratings review will focus on the impact of the merger on ERT's business profile and financial profile. Business profile considerations will include greater scale, broader commercial offerings and technology capabilities, as well as integration risks as this merger will increase ERT's revenues by around 50%. The review will also focus on ERT's plans and ability to reduce leverage following merger. In addition, instrument ratings could be subject to change depending on the mix of debt in the company's capital structure at closing. ERT is a provider of centralized cardiac safety, respiratory efficacy services, and electronic clinical outcome assessment solutions to biopharmaceutical sponsors and contract research organizations involved in the clinical trials of new drugs. The company is owned by private equity firms Nordic Capital and Astorg Partners with Novo holding a minority stake. ERT generated revenue of approximately $530 million for the twelve months ended June 30, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. EUROPCAR MOBILITY: Seeks US Recognition of Restructuring in France ------------------------------------------------------------------ French auto-rental company Europcar Mobility Group SA filed for Chapter 15 bankruptcy protection to seek U.S. recognition of its restructuring process in France. Paris-based Europcar filed its Chapter 15 petition in New York on Dec. 17, 2020. The foreign representative, CFO Luc Peligry, is seeking recognition of its Sauvegarde financiere acceleree (expedited financial safeguard) in France as foreign main proceeding. Chapter 15 shields foreign debtors from lawsuits by U.S. creditors while they reorganize in another country. The company reached an agreement in late November 2020 to cede control to creditors in exchange for cutting debt by 1.1 billion euros, or about $1.35 billion. The firm reeled under the impact of coronavirus restrictions that curbed international travel, according to Bloomberg News. About Europcar Mobility Group Europcar Mobility Group is a French car rental company founded in 1949 in Paris. The head office of the holding company, Europcar Group S.A., is in the business park of Val Saint-Quentin at Voisins-le-Bretonneux, France. Europcar's 4 major brands being are Europcar - the European leader of car rental and light commercial vehicle rental, Goldcar - the low-cost car-rental leader in Europe, InterRent - 'mid-tier' car rental and Ubeeqo - one of the European leaders of round-trip car-sharing (BtoB, BtoC). Europcar delivers its mobility solutions worldwide solutions through an extensive network in over 140 countries. The Company reached agreement in principle with some of its creditors on Nov. 25, 2020, for a restructuring under which the Company would cede control to creditors in exchange for cutting debt by 1.1 billion euros. To implement the deal, Europcar on Dec. 14, 2020, announced the opening of accelerated financial safeguard proceedings in France. Paris-based Europcar filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 20-12878) on Dec. 17, 2020, to seek U.S. recognition of the safeguard proceedings. The Debtor's counsel in the U.S. case: David R. Seligman Kirkland & Ellis LLP Tel: 312-862-2463 E-mail: david.seligman@kirkland.com EVEREST HOTEL: Seeks to Hire Leasure Gow as Special Counsel ----------------------------------------------------------- The Everest Hotel Group LLC seeks authority from the U.S. Bankruptcy Court for the Northern District of New York to employ Leasure Gow Munk & Rizzuto Attoreys at Law, as special counsel to the Debtor. Everest Hotel requires Leasure Gow to assist and provide legal services in relation to the real estate transactions involving the Debtor's 2 hotels and 1 restaurant. The firm will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. To the best of the Debtor's knowledge the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Leasure Gow can be reached at: Leasure Gow Munk & Rizzuto Attoreys at Law 101 Jefferson Ave. Endicott, NY 13760 Tel: (607) 748-7351 About The Everest Hotel Group The Everest Hotel Group, LLC, is a part of the motels, hotels, and resort industry. The Everest Hotel Group, based in Apalachin, NY, filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 20-31222) on Dec. 1, 2020. In its petition, the Debtor disclosed $2,550,265 in assets and $7,472,633 in liabilities. The petition was signed by Khanzada Amin Khan, sole & managing member. HARRIS BEACH PLLC, serves as bankruptcy counsel to the Debtor. Leasure Gow Munk & Rizzuto Attoreys at Law, is special counsel. EVEREST HOTEL: Selling 2 Hotels & Restaurant for $2.55 Million -------------------------------------------------------------- The Everest Hotel Group, LLC, asks the U.S. Bankruptcy Court for the Northern District of New York to authorize the private sales of the real property located 7666 State Route 434, Apalachin, New York as follows: (a) the two hotels, namely the former Comfort Inn and Suites Apalachin ("Hotel") and the former Quality Inn Apalachin ("Closed Hotel"), to Kishan Patel for $2.5 million pursuant to an Asset Purchase Agreement dated Nov. 20, 2020; and (b) the former Perkins Restaurant and Bakery to Rackley S. Wren for $50,000 pursuant to the Contract to Purchase dated Nov. 23, 2020. The Debtor owns the Hotel. The Inn was-built in 2013, with 52 rooms and is currently operating as an independent Apalachin Hotel. Prior to COVID-19, the Hotel has historically been an inn for business travelers, casino guests and long-term tenants from local Lockheed Martin as well as for nearby oil and gas curators through direct billing. The Debtor also owns the Closed Hotel. It was built in 2009 with 51 rooms, lost its flag after a water line froze and extensively damaged the property. After repairs and de-flagging the Closed Hotel, it continued to operate for long term rentals until its closure in late 2018. The Debtor also the Restaurant which was built in 2017. The Restaurant is operated by Rajumaanar Enterprises Corp., a company formerly owned by the Debtor's principal, Amin Khan and Beth Ann Smith, now Mr. Khan's. Rajumaanar, Ms. Smith and Mr. Khan invested the funds to build the Restaurant and also provided funding for the equipment to operate it. Rajumaanar is now owned 100% by Ms. Smith. While Rajumaanar recognizes the Debtor owns the land underlying the Restaurant, it claims it owns the Restaurant and improvements and is able to operate it pursuant to an unrecorded lease with the Debtor. The Restaurant is currently operating on a limited capacity due to COVID restrictions. Prior to the bankruptcy filing, the Debtor's first lien holder, Visions Federal Credit Union, commenced a foreclosure action seeking to foreclose on its mortgage and UCC liens. Before the foreclosure and during its pendency, the Debtor sought to market and sell its assets either as a group or separately. While the Hotel, the Closed Hotel, and the Restaurant operate separately, they all remained part of the same parcel of land owned by the Debtor. The Restaurant is attached to the Hotel and shares a common wall. In October 2019, the Debtor hired Marcus & Millichap to market and sell the Property, leeaded by agent Alex Fifner. Marcus & Millichap broadly advertised the Property and obtained an offer for $4 million for the Two Hotels only. While the Debtor made significant progress in that regard, it was unable to obtain one of the releases necessary to allow a closing on the sale. Prior to the listing with Marcus & Millichap, the Debtor had listed the Property with Bridgeway Commercial Real Estate through Karen Klecar. During the period, no viable offers were received for either the Hotels or the Restaurant. After approximately two years of extensive, national and international marketing, the Debtor proposes to sell the Two Hotels and the Restaurant free and clear of all liens and encumbrances with the consent and certain carve outs for the estate of $50,000 and $70,000 for professionals from Visions' proceeds. Visions has also consented to a carve out for a reduced 5% commission on the Two Hotel sales to Marcus Millichap. The Two Hotels have a contract for $2.5 million from an unrelated third party. The land under the Restaurant has a contract for $50,000 from an entity to be formed by Ms. Smith's son. The sale proceeds are not close to sufficient to pay Visions the full balance due of approximately $3.9 million. As a result, the Debtor believes the two sale transactions are in the best interest of the estate and its creditors, providing for the Estate Carve Out and preventing the permanent closure and deterioration of the Property and ofthe businesses. On Nov. 20, 2020, the Debtor entered into an Asset Purchase Agreement with the Hotel Purchaser of 25 Douglas Street, Rock Hill, New York, to sell the Two Hotels for $2.5 million. The Hotel Contract remains subject to Court approval, and provides for a closing no later than Jan. 31, 2021. On Nov. 23, 2020, the Debtor entered into a Contract to Purchase with the Restaurant Purchaser, to sell the land underlying the Restaurant for $50,000. The Restaurant Purchaser is the son of Ms. Smith, who will take title to the underlying real estate. As noted, Ms. Smith and/or Rajumaanar, along with Mr. Khan, provided the funding for the building of the Restaurant on the Property. The sale of the Property on which the Restaurant sits will avoid litigation in connection with that funding, and resolve competing claims to that real estate, providing a significant benefit to the Debtor's estate. The Restaurant Contract remains subject to Court approval, and provides for a closing no later than Jan. 31, 2021. By the Motion, the Debtor asks authority from the Court to assume the Sales Contracts and sell the Two Hotels and the Restaurant by private sales. The assumption of the Sales Contracts will allow the Debtor to proceed with the sale of the Two Hotels and the Restaurant, as such, represents the sound exercise of its business judgment. The Debtor submits that the facts in the case warrant approval of the private sales to the Hotel Purchaser and the Restaurant Purchaser, and special circumstances exist to approve those sales. It is no longer in a position to maintain the utilities for the Property, which would result in a termination of their services, and significant damage may occur as a result of the winter climate. In addition, the current depressed market in the hospitality industry in light of the COVID concerns warrant a prompt approval of the sales. Lastly, the Debtor submits that the contents of the Motion comply with Local Rule of Bankruptcy Procedure 6004-1(c). It states that the proceeds are not subject to any exemption by the Debtor. The proposed attorneys' fees and costs for closing are estimated at $20,000, subject to Court approval. All real estate taxes have been paid by Visions. A copy of the Contract is available at https://bit.ly/3p14WEP from PacerMonitor.com free of charge. About The Everest Hotel Group The Everest Hotel Group, LLC, is a part of the motels, hotels, and resort industry. The Everest Hotel Group, based in Apalachin, NY, filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 20-31222) on Dec. 1, 2020. In its petition, the Debtor disclosed $2,550,265 in assets and $7,472,633 in liabilities. The petition was signed by Khanzada Amin Khan, sole and managing member. HARRIS BEACH PLLC, serves as bankruptcy counsel to the Debtor. EVERETT ALLEN LASH: $7K Sale of 2009 Mercedes GL450 Approved ------------------------------------------------------------ Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern District of Texas authorized the private sale by Everett Allen Lash and Yvonne Kay Lash of their 2009 Mercedes GL450, VIN 4JGBF71E59A520835 for an estimated sale price of $7,000, free and clear of all liens. The Debtors will retain the proceeds from the sale. They are authorized to execute any and all documents necessary to effectuate the transfer of title. All other relief not specifically sought is denied. Everett Allen Lash and Yvonne Kay Lash sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 20-50157) on Aug. 21, 2020. The Debtors tapped David Langston, Esq., as counsel. EW SCRIPPS: Fitch Assigns BB(EXP) Rating on New Secured Term Loan ----------------------------------------------------------------- Fitch Ratings has maintained the Negative Rating Watch on EW Scripps' Long-term Issuer Default Rating and Issue Level Ratings. Fitch intends to downgrade the Long-Term IDR of The E.W. Scripps Company to 'B' from 'B+' at close of the ION Media transaction. Existing issue-level ratings will also be downgraded by one notch if the ION transaction closes. Fitch has assigned a 'BB(EXP)'/'RR1' rating to Scripps' new senior secured term loan and proposed issuance of senior secured notes and has assigned a 'B-(EXP)'/'RR5' rating to the company's proposed issuance of unsecured notes. The expected ratings on Scripps' conditional acquisition funding are based off an IDR of 'B' and not the existing 'B+' IDR and will be converted to final ratings upon close of the ION Media acquisition. Conversely, if the ION Media acquisition does not close, Fitch expects to affirm the existing IDR and issue-level ratings, resolve the Negative Rating Watch, and remove the expected ratings on the acquisition funding. The expected downgrade upon close of the ION transaction is primarily driven by Fitch's inclusion of the $600 million of preferred equity as debt. The transaction will result in pro forma last eight quarters average (L8QA) gross leverage of 6.2x, which is above Fitch's negative leverage sensitivity of 5.5x. Fitch does not expect Scripps to return L8QA leverage below 5.5x until the 2023 fiscal year. KEY RATING DRIVERS ION Media Acquisition: Scripps announced on Sept. 23 that it entered into a definitive agreement to purchase ION Media, Inc. for $2.65 billion in cash. Fitch recognizes the positive attributes of the acquisition, including the addition of ION's national television household reach. ION owns 71 broadcast television stations in 62 designated market areas (DMAs) and reaches nearly 100 million households or 96% with its affiliates. The acquisition is transformative and Scripps will generate pro forma revenues and EBITDA of approximately $2.5 billion and $700 million, respectively. ION also presents a significant opportunity to achieve operational efficiencies for Scripps' National Media segment. The company has outlined roughly $500 million in synergies, which will be achieved over six years ($120 million on an annual run-rate basis). These operating savings include a meaningful reduction from carriage fees for the Scripps' Katz digital networks as distribution transitions over to the ION network portfolio over time. The transaction is subject to regulatory review and approval and Scripps has entered into a purchase agreement with a buyer to divest 23 of the ION stations to comply with the existing national ownership and in-market regulatory rules. Highly Levered: Scripps intends to fund the transaction with a mix of more than $300 million in cash generated from asset sale proceeds, $1.85 billion in incremental secured and unsecured debt and $600 million in preferred equity from Berkshire Hathaway. Previously Fitch anticipated the application of the asset sale proceeds from the podcasting business and WPIX toward debt reduction. Fitch expects the most recent acquisition to elevate total leverage over the near term. Management has estimated pro forma gross leverage of 5.3x at acquisition close, but does not include the balance of the $600 million in preferred equity in the leverage calculation. Fitch calculates total leverage including the preferred to be 6.2x, which is above Fitch's 5.5x negative leverage sensitivity. Fitch does not expect two-year average leverage to decline below the 5.5x negative sensitivity until fiscal year 2023. Improving Asset Portfolio: Fitch recognizes that ION improves Scripps' revenue and cash flow diversification and bolsters the company's National Media segment reach. Scripps remains acquisitive and has been on a trajectory to improve the quality of its asset portfolio over the last several years. Scripps on a standalone basis owns 59 television stations across 41 markets and is the fourth largest broadcaster in the U.S. Scripps has number one or number two ranked stations in approximately 38% of its markets. Scripps acquired station assets from Cordillera and Nexstar (regulatory solution to close the Tribune Media acquisition) in 2019. The legacy Cordillera stations are ranked number one in their markets, with the exception of one station that is ranked number two. While the legacy Nexstar stations increased Scripps' presence in political battleground states and larger markets, they consist mostly of CW affiliates. Weak, Albeit Improving, EBITDA Margins: Fitch expects that Scripps' Local Media EBITDA margins will continue to lag peers for the foreseeable future owing to the still-high concentration of lower-rated stations in Scripps' television portfolio. Fitch sees drivers for Local Media margin improvement. The extended Comcast retransmission contract (commenced January 2020) and upcoming distributor negotiations (approximately 42% of subscribers in 2020 and 18% in 2021) will support meaningful retransmission growth. While some distributor contract negotiations have been more challenged recently owing to accelerated video subscriber losses, Fitch believes that coronavirus pandemic will strengthen the value of local news content over the near-term as it provides a necessary public service. Retransmission revenues approximated 37% of Local Media revenues in 2019, as compared with mid-40% for the television broadcast peer group on average. Scripps benefits from a high proportion of 'Big Four' affiliates in its station portfolio. Scripps has modest contract renewals with the networks in 2020 (just two ABC stations), with a more meaningful number of renewals in 2021 (22 stations) and 2022 (31). As such, Fitch expects net retransmission fees will also experience growth over the near term. Scripps' National Media segment provides diversification away from the local television business, but also is generally less profitable. The podcasting divestiture will result in improved National Media segment profit as the segment was a drag on margins. The addition of ION will additionally positively benefit margins owing to ION's strong profitability profile. ION generated $534 million in revenues and $305 million in EBITDA for LTM September 2020, representing a roughly 57% margin. ION's margins have generally been in the low to mid 50% range over the last few years. Coronavirus Headwinds: The coronavirus pandemic and resulting ad recession have negatively affected Scripps' financial performance in 2020. However, Fitch believes that Scripps' Local Media business is better positioned for a pull-back in advertising spend owing to significant political advertising revenues in 2020. In addition, Scripps' retransmission revenues are poised for strong yoy growth stemming from the new Comcast retransmission contract which commenced on January 2020 (+$60 million in incremental annual retransmission revenues with step-ups) and other upcoming distributor retransmission negotiations. Local television and other news content providers provide a vital public service during the Coronavirus pandemic. Fitch expects television viewership trends will benefit as consumers increase usage of in-home entertainment. Scripps' National Media businesses experienced robust revenue growth and improving profitability in FY2019. The weak advertising environment has affected these businesses, including the Katz digital networks; however, the impact to EBITDA has been less material given the relatively smaller contribution to overall profitability. Improving FCF: Fitch expects that Scripps will generate positive FCF even with a pullback in advertisers' marketing budget. Scripps and other local broadcasters benefit from having a more material cushion from retransmission and political advertising revenues than prior economic downturns. The addition of ION will further expand Scripps' FCF generation. Advertising Revenue Exposure: Advertising revenues accounted for roughly 55% of Scripps' Local Media revenues (two-year average, excluding political). Advertising revenues, especially those associated with TV, are becoming increasingly hyper cyclical and represent a significant risk to all TV broadcasters. Scripps' largest advertising categories include autos and other service categories. In an economic downturn some of these smaller advertisers may go out of business or not return. Fitch expects this poses a higher risk for television broadcasters given the preponderance of local advertising revenues. The ION transaction will increase advertising revenue exposure; however, Fitch expects national advertising to be more resilient than local advertising through the cycle. Viewer Fragmentation: Scripps continues to face the secular headwinds present in the TV broadcasting sector, including declining audiences amid increasing programming choices, with further pressures from OTT internet-based television services. However, it is Fitch's expectation that local broadcasters, particularly those with higher-rated stations, will remain relevant and capture audiences that local, regional and national spot advertisers seek. Fitch also views positively the increasing inclusion of local broadcast content in OTT offerings. Growth in OTT subscribers will continue to provide incremental revenues and offset declines of traditional MVPD subscribers. DERIVATION SUMMARY Scripps' 'B+' IDR reflects its smaller scale and higher leverage relative to the larger and more diversified media peers, like ViacomCBS, Inc. (BBB/Stable) and Discovery Communications (BBB-/Stable). Fitch views the enhanced scale and diversification presented by the planned ION acquisition as credit positives. However, pro forma total leverage will be 6.2x, which exceeds Fitch's negative 5.5x leverage sensitivity, and is expected to remain elevated through year-end 2022. Scripps has a similar leverage profile as Gray Television Inc. (BB-/Negative). However, Gray benefits from a local television station portfolio with stations ranked number one or number two in 92% of its markets and has significant exposure in political battleground geographies. Gray's EBITDA margins, in the high 30% range (two-year average), lead the peer group. By comparison, Fitch expects Scripps' EBITDA margins will remain in the mid-to-high 20% range (even-odd year average). HYBRIDS TREATMENT AND NOTCHING Fitch treats the $600 million of preferred shares issued to Berkshire Hathaway as 100% debt, and does not apply any equity credit. The 100% debt treatment is based on the below: -- The preferred shares are subordinated to all other debt instruments in Scripps' capital structure, and senior only to equity; -- Scripps' has an unconstrained ability to defer coupon payments, and instead accrue interest at a rate which is 100 bps above the cash dividend rate; -- The preferred shares are perpetual, and there is no issuer call option for five years; -- The preferred shares lack material covenants. However, the preferred shares' documentation contains a Change of Control clause. The Change of Control must be settled via cash redemption of the preferred shares at 105% of par, unless the preferred shareholder chooses to exercise its warrant, in which case the preferred shares will convert to common equity. Because Scripps does not have discretion in whether it settles the change of control in cash or equity, equity credit is negated and Fitch treats the shares as 100% debt. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer Local Media -- 2020 results reflect the acquisition of the Cordillera stations (closed May 2019) and Nexstar stations (closed September 2019). In addition, Scripps divests WPIX to Mission Broadcasting for $75 million. Core advertising declines in high-single digits in 2020, rebounding in 2021. Core advertising returns to flat to low single-digit growth thereafter. -- Political advertising revenues of roughly $260 million in 2020 with strong presidential cycle -- Retransmission revenues of roughly $580 million in 2020, +30% year-over-year pro forma for Comcast contract (+60 million in incremental retransmission revenues). Scripps has a large number of subscribers up for renegotiation (approximately 42% in 2020 and approximately 18% in 2021). Retransmission revenue growth decelerates to the high single digits thereafter. -- EBITDA margins are soft in 2020 owing to declining core advertising revenues and high degree of fixed costs. EBITDA also fluctuates reflecting even year political revenues and margins will improve on average due to the mix shift towards higher-margin retransmission revenues. National Media -- Scripps divests Stitcher for $325 million in 2020 ($265 million in cash up-front, $30 million earnout in 2020 and 2021 with cash received early the following year). -- Pull-back in advertising spending will also decelerate revenue growth at Scripps' National Media properties. Delayed profitability improvements for this segment in 2020 and 2021. -- Thereafter, revenue growth and improved profitability incorporate the better operating profile of the Katz digital multicast networks and Triton Digital. Newsy benefits primarily from growth in OTT advertising revenues and increased carriage arrangements with traditional multichannel programming distributors. Aggregate -- Scripps utilizes its net operating loss carryforwards (NOLs) to shield the anticipated tax liabilities from the sale of Stitcher and WPIX. Fitch assumes Scripps exhausts its NOLs and pays more meaningful cash taxes in 2022. -- Fitch assumes the ION Media acquisition is closed and funded in early 2021. Fiscal year 2021 reflects a full year of ION media financial results. -- Roughly $30 million in pension contributions in 2020 and thereafter $10 million annually over the forecast period. -- Capex at roughly $50 million annually. -- Dividends suspended into 2021 due to issuance of Berkshire Hathaway preferred shares. -- Scripps allocates asset sale proceeds and excess cash flow to term loan repayment. -- Two-year average leverage remains above 5.5x through year-end 2022. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Scripps would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. EBITDA: Scripps' going-concern EBITDA is based on the pro forma LQ8A EBITDA of $711 million, which includes the EBITDA contribution of ION Media. Fitch then stresses EBITDA by assuming that an economic downturn results in a severe cyclical decline in advertising revenues. Scripps' Local Media (television) core advertising revenues decline by roughly 15%. Additionally, the National Media business (ION Media, Newsy, Katz) also experience ad declines. Fitch expects traditional mediums (like television broadcasting) will be disproportionately affected by pullback in advertisers' budgets. Scripps benefits from its higher proportion of subscription revenues (retransmission revenues) relative to the previous recessionary period. In addition, Fitch does not expect political ad revenues to be impacted by economic pressure. Given the high degree of operating leverage in the business, LQ8A EBITDA declines to $550 million. Multiple: Fitch employs a 6x distressed enterprise value multiple reflecting the value present in the company's FCC licenses in small and medium-sized U.S. markets. This multiple is roughly in-line with median TMT emergence enterprise value/EBITDA multiple of 5.5x. It also incorporates the following: (1) Current public trading EV/EBITDA multiples range from 8x-11x; (2) Recent transaction multiples in a range of 7x-9x. Nexstar Media Group announced its planned acquisition of the Tribune Media Company in December 2018 for $6.4 billion including the assumption of Tribune's debt which represents a 7.5x purchase price multiple (including $160 million in outlined synergies). Gray Television acquired Raycom Media for $3.6 billion in January 2019, representing a 7.8x purchase price multiple (including $80 million of anticipated synergies). Scripps announced its acquisition of 15 television stations from Cordillera Communications in October 2018 for $521 million, representing an 8.3x purchase price multiple (including $8 million in outlined synergies). Scripps incrementally announced its acquisition of eight stations from Nexstar in March 2019 for $580 million. The purchase price represented an 8.1x multiple of average two-year EBITDA excluding the New York City CW affiliate, WPIX. Fitch estimates an adjusted, distressed enterprise valuation of roughly $3.4 billion. Debt: Fitch assumes a fully drawn revolver ($400 million) in its recovery analysis since credit revolvers are tapped as companies are under distress. Pro forma for the ION Media transaction, Scripps will have approximately $2.4 billion in senior secured term loans and notes, $1.4 billion in unsecured debt, and $600 million of preferred equity. The recovery analysis results in a 'RR1' recovery rating for the company's secured first lien debt reflecting Fitch's belief that 91%-100% expected recovery is reasonable. The 'RR1' recovery rating will result in a 2-notch uplift from the expected IDR of 'B', which results in a 'BB' issue-level rating. The recovery analysis results in an 'RR5' recovery rating for the senior unsecured notes, reflecting 11-30% expected recovery. The 'RR5' recovery rating will result in a rating 1-notch below the expected IDR of 'B-', which results in a 'B-' issue-level rating. Fitch does not rate the preferred equity. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Fitch will resolve the Negative Rating Watch with an affirmation of the existing ratings if the ION Media transaction does not close. Factors that could, individually or collectively, lead to negative rating action/downgrade: Fitch will downgrade the IDR and existing issue-level ratings by one-notch upon closing of the ION Media transaction and attribution of the acquisition financing. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Pro forma for the ION transaction, Scripps expects to have $113 million in balance sheet cash and will upsize its revolver from $210 million to $400 million. The revolver will remain undrawn. The Company has no material maturities until 2024, and annual term loan amortization will be limited at approximately $17 million per year. Scripps previously guided to FCF in a range of $225-250 million for FY2020 owing to growth in retransmission fees, anticipated robust political revenues, improving National Media profitability and lower capital spending. The Coronavirus pandemic and the resultant recession have weighed on the overall advertising environment. However, Fitch expects that Scripps will generate positive FCF even with a pullback in advertisers' marketing budget. Scripps and other local broadcasters benefit from having a more material cushion from retransmission and political advertising revenues than prior economic downturns. The company's revolving credit facility has a 4.25x maximum first lien net leverage covenant, which is tested only when there are revolver borrowings outstanding (springing covenant). Fitch forecasts sufficient cushion relative to the covenant level in its base case which incorporates the impact of the Coronavirus pandemic and the acquisition of ION Media. 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. EXTRACTION OIL: UST Says Plan's Opt-Out Procedure Impermissible --------------------------------------------------------------- Andrew R. Vara, the United States Trustee for Regions 3 and 9, objects to the Third Amended Joint Plan of Reorganization of Extraction Oil & Gas, Inc., and its Debtor Affiliates. The United States Trustee objects to the confirmation of the Third Amended Plan because it improperly provides for the payment of certain fees and expenses with complying with applicable law. The U.S. Trustee claims that the Proposed Opt-Out Procedure is Impermissible under Applicable Law. He says the opt-out procedures should be rejected for the Class 6 through Class 8 claimants as the public shareholders and general unsecured creditors will be bound by the third-party releases if they do not return a ballot, which, in all instances would include those who do not return a ballot or opt-out form because they never received the same. The U.S. Trustee further points out that the third-party provisions of the Plan do not meet the requirements of nonconsensual third-party releases. In these cases, the Released Parties include their "Related Parties" who are a broadly defined and extensive list. The U.S. Trustee states that the Debtors, Senior Noteholders and Indenture Trustees must comply with Section 503(b) and provide evidence of a substantial contribution so that the Court can determine whether a substantial contribution has been made and whether the compensation sought is reasonable. Moreover, the U.S. Trustee says that the Exculpation Clause in the Third Amended Plan is impermissibly broad because it is not limited to actions taking place during the bankruptcy case, but also includes prepetition activity such as the formulation, preparation, dissemination, negotiation, or filing of the Restructuring Support Agreement, related prepetition transactions, prepetition contracts, agreements and documents. A full-text copy of the U.S. Trustee's objection dated Dec. 10, 2020, is available at https://bit.ly/2LV2BNz from PacerMonitor.com at no charge. About Extraction Oil & Gas Inc. Denver-based Extraction Oil & Gas, Inc. -- http://www.extractionog.com/-- is an independent energy exploration and development company focused on exploring, developing, and producing crude oil, natural gas, and NGLs primarily in the Wattenberg Field in the Denver-Julesburg Basin of Colorado. Extraction Oil & Gas and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11548) on June 14, 2020. At the time of the filing, the Debtors disclosed $1 billion to $10 billion in both assets and liabilities. Judge Christopher S. Sontchi oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Whireford, Taylor & Preston, LLC as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; and Moelis & Company and Petrie Partners Securities, LLC as investment banker and financial advisor. Kurtzman Carson Consultants, LLC is the claims and balloting agent and administrative advisor and PricewaterhouseCoopers LLP (PwC) is the Debtors' independent audit services provider. FENDER MUSICAL: Moody's Alters Outlook on B1 CFR to Stable ---------------------------------------------------------- Moody's Investors Service revised the rating outlook of Fender Musical Instruments Corporation to stable from negative. The company's B1 Corporate Family Rating, B1-PD Probability of Default Rating, and B2 $200 million outstanding senior secured term loan rating were affirmed. The company's $85 million asset-based credit facility is not rated. "The revision to a stable outlook and rating affirmation considers that customer demand across all of Fenders product lines has improved on a quarterly year-over-year basis. Moody's expects sustained good demand for guitars and related products into 2021 with more individuals pursuing leisure activities close to home, and that as a result the company will continue to generate positive free cash flow and maintain moderate leverage and very good liquidity," stated Keith Foley, a Senior Vice President at Moody's. Despite the continued challenges related to the coronavirus pandemic and bankruptcy of Guitar Center, Inc. (B3 stable), Fender's largest customer, Fender's results have improved in each of the first three quarters of 2020 in terms revenue and EBITDA, both on an absolute and margin basis. As a result, the company has been able to maintain debt/EBITDA on a Moody's adjusted basis at just below 3.0x. Based on Moody's assumption that Fender will generate free cash flow of between $45 million and $51 million in 2021, the company will be able to maintain its relatively low leverage and very good liquidity as well as maintain unrestricted cash in excess of $50 million and full availability under its $85 million revolver which expires in December 2023. The revision to stable also consider that there are no material debt maturities until the term loan matures in 2025, and Fender will continue to be well within the 5.5x consolidated total leverage covenant required under its term loan agreement. Guitar Center's (B3 stable) post-bankruptcy capital structure will have lower leverage that better positions the company to contend with demand volatility, maintain its market position and invest in the business. While it does not appear that Guitar Center's bankruptcy has had any direct negative operational or financial impact on Fender, a financially more stable Guitar Center, as a large customer, will reduce lingering concerns about any negative impact on Fender. Ratings Affirmed: Issuer: Fender Musical Instruments Corporation Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Secured Term Loan B, Affirmed B2 (LGD4) Outlook Actions: Issuer: Fender Musical Instruments Corporation Outlook, Changed To Stable From Negative RATINGS RATIONALE Fender's B1 Corporate Family Rating reflects the company's strong brand awareness. The Fender name is supported by the long-standing reputation and quality of its guitars and product innovation. This provides strong brand name recognition and significant barriers to entry for guitars, its flagship product. Fender is also one of the largest musical instrument companies in the world. Approximately half of the company's net sales are generated outside of North America, with about a third coming from Europe and remainder of approximate 15% coming from Asia. Fender's financial policy reflects use of moderate financial leverage to provide flexibility given its high sensitivity to economic downturns and periodic use of debt to finance acquisitions. In addition to the uncertainty caused by the coronavirus pandemic, key credit risks include the nonessential, highly discretionary nature of consumer spending on musical instruments, Fender's relatively narrow product focus, and significant customer concentration. Guitar Center, Inc. the largest private retailer of music products in the United States represents about 17% of Fender's net sales. 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 Fender and its discretionary products 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. Moody's expects Fender will continue to maintain a modest financial policy in terms of leverage and dividends. Debt-to-EBITDA has consistently remained below 4.0x and Moody's projects leverage will be in a 3x or lower range over the next year. Additionally, the company has not paid dividends following a $100 million debt-financed dividend that occurred at the end of fiscal 2018. The company also repaid $50 million that was borrowed on the term loan as a precautionary measure to bolster liquidity at the start of the pandemic. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely given the continuing uncertainty related to the coronavirus. An upgrade would require a high degree of confidence on Moody's part that consumer demand for musical instrument products has returned to a period long-term stability, and that Fender continue to demonstrate the ability and willingness to generate strong positive free cash flow, maintain good liquidity, and continue to operate with a debt/EBITDA level at below 3.0x. Ratings could be downgraded if Moody's anticipates that any earnings decline or liquidity deterioration because of actions to contain the spread of the virus or reductions in discretionary consumer spending. Separate from general operating conditions, Fenders ratings could be downgraded if debt-to-EBITDA is sustained above 4.0x or the company decides to pursue a more aggressive financial policy for any reason. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Fender develops, manufactures and distributes musical instruments to wholesale and retail outlets throughout the world. The company's product portfolio includes fretted instruments (comprised of electric, acoustic and bass guitars and ukuleles), guitar amplifiers, audio systems, guitar pedals, other guitar accessories, and digital applications centered around musical education. Portfolio of brands include Fender, Squier, Bigsby, Jackson, and Charvel. The company also is a licensee of the Gretsch and Eddie Van Halen brands. Fender is majority-owned by Servco Pacific Capital and Yamano, a Tokyo-based company with various music-related operations. The company generated $656 million of net sales for the latest 12-month period ended Sep. 27, 2020. FORTOVIA THERAPEUTICS: Aquestive Buying Zuplenz Assets for $25K --------------------------------------------------------------- Fortovia Therapeutics, Inc., asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to authorize the sale of Zuplenz-related assets to Aquestive Therapeutics, Inc. In exchange, Aquestive will pay the Debtor $25,000 and will forgive all, will waive all claims against the Debtor, which Aquestive asserts total in excess of $400,000 (however, regardless of actual amount, Aquestive has agreed to waive any and all amounts owing by the Debtor other than claims connected with insurance coverage). The Debtor sells the following four product lines, each designed to make the treatment on cancer more tolerable: Gelclair, Zuplenz, Oravig, and Soltamox. It has previously received authority to sell, and has closed sales on, the Zuplenz, Oravig, and Soltamox lines. The Debtor filed the Chapter 11 case in order to sell these product lines in an effort to both assure the continued availability of these products to pharmacies and patients and to maximize the return to its creditors. It is unable to continue operations in the ordinary course of business and needs to consummate the sale of the Zuplenz line in an expedited manner in order to avoid an interruption in the availability of its products to patients as well as a diminution in value. The Debtor marketed these lines both before and after its Chapter 11 filing. The most favorable offer for the Zuplenz line was made by Aquestive. Aquestive held the rights to market Zuplenz and Aquestive licensed certain of those rights to a predecessor of the Debtor. Aquestive now wishes to terminate its License and Supply Agreement with the Debtor. The Debtor believes that Aquestive's proposal is more favorable than other proposals for the Zuplenz line that it has received. A Transaction Term Sheet between the Debtor and Aquestive has been executed. The material terms of the Term Sheet are: A. The Debtor will sell its Zuplenz Assets to Aquestive (or its designee) free and clear of all liens, claims, interests, and encumbrances. These assets include the Zuplenz related inventory, the NDA, the IND, business records, and marketing and branding materials. B. The Debtor and Aquestive will terminate the existing License and Supply Agreement between the parties. C. Aquestive will pay the Debtor $25,000 and will forgive all, will waive all claims against the Debtor, which Aquestive asserts total in excess of $400,000 (however, regardless of actual amount, Aquestive has agreed to waive any and all amounts owing by the Debtor other than claims connected with insurance coverage). The Debtor is not aware of any liens, claims, interests, and encumbrances, but it asks that any liens, claims, interests, and encumbrances attach to the proceeds of the proposed sale. It does not seek authority to transfer "Personally Identifiable Information" as defined in section 101 of the Bankruptcy Code. It does not seek to alter any rights of recoupment or setoff against the Debtor. The Debtor does not ask to sell or transfer and accounts receivable. Finally, the Debtor asks the Court to waive the 14-day stay provided for in Bankruptcy Rule 6004(h) so that the sale order will be immediately effective. Objections, if any, must be filed within 21 days of the date of the Notice. The Purchaser: AQUESTIVE THERAPEUTICS Attn: Managing Agent 30 Technology Drive Warren, NJ 07059 About Fortovia Therapeutics Fortovia Therapeutics, Inc., is an oncology supportive care pharmaceutical and medical device company headquartered in Raleigh, North Carolina. Fortovia Therapeutics filed a voluntary petition pursuant to Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 20-02970) on Aug. 31, 2020. The petition was signed by Ernest De Paolantonio, CFO. The Debtor was estimated to have between $1 million to $10 million in assets and liabilities. William P. Janvier, Esq. at JANVIER LAW FIRM, PLLC, is the Debtor's counsel. FOXWOOD HILLS: Correia Buying 6 Westminster Lots for $2.5K Each --------------------------------------------------------------- Foxwood Hills Property Owners Association, Inc. ("POA") asks the U.S. Bankruptcy Court for the District of South Carolina to authorize the sale of Lots 6, 7, 8, 11, 33 and 34 it owns located in Section M Shannandoah, Westminster, Oconee County, South Carolina to Gatlin Correia for $2,500 per lot. The Association is the property owner association responsible for the maintenance, operation and management of roadways, certain real estate and amenities for the Community, a development located on Lake Hartwell in Oconee County, South Carolina, comprised of approximately 4,100 lots currently owned by approximately 3,300 lot owners. The real property owned by the Association includes a clubhouse, a pool, tennis courts, a parking area, other improvements, substantial common areas and certain residential lots. On the Petition Date, the Association owned 605 lots in the Community. Also on the Petition Date, the Association had 484 of these lots available for sale. Some of these lots have been owned by the Association since 1993, when the last developer of the Community, Foxwood Corp., deeded all remaining unsold lots to the Association. Other lots were purchased by the Association at tax sales, foreclosure sales and from the Oconee County Forfeited Land Commission, or deeded to the Association by owner delinquent on their annual fees, dues and assessments. The vast majority of the residential lots owned by the Association are vacant and slow or difficult to sell for various reasons, including the location of the lots and some of the issues that led to the filing of the Chapter 11 case. The Association would like to sell most of these lots. The sale proceeds would be income to the Association, usable by it to meet its annual approved budget. However, perhaps most importantly, the change from the Association's ownership to new owners both saves the Association continued costs of ownership (ad valorem taxes, maintenance, utility minimum charges, and other costs) and improves collection of assessments and dues by the Association, as the new owners become responsible for payment of assessments like other lot owners in the Community. Accordingly, the Association rarely turns down a reasonable offer made by a prospective purchaser. To the best of the Association's knowledge, none of the lots it owns are subject to mortgages, liens or any other encumbrances. On July 30, 2020, the Association filed its First Sales Authorization Motion. It recently obtained the Court's authorization for the sale of two other lots, Lots 219 and 220 of the Kinston Section, by sale motion and notice, and use of the process under the Sale Process Order. The Association now has six new contracts for the sale of the Lots for which it asks authorization. The Association uses the realtor services of Susan Mangubat of Red Hot Homes @ Keller Williams Upstate for the listing and sale of the lots the Association owns. Ms. Mangubat is to receive a commission on the sale of lots in the greater amount of 10% of the sale price of the lot or $500, subject to entry of an Order authorizing her employment by the Association. The Association has proposed sales of the Lots as follows: a. Lot 6 in the M Section of the Community to Gatlin Correia for the sale price of $2,500. It has the street address of 6 Shannandoah Drive, Westminster, South Carolina. It is identified more particularly as TMS 316-01-01-039. The Association will pay the Relator a commission of $500 at the closing of the sale. The property is not subject to any mortgage or lien. b. Lot 7 in the M Section of the Community to Gatlin Correia for the sale price of $2,500. It has the street address of 7 Shannandoah Drive, Westminster, South Carolina. It is identified more particularly as TMS 316-01-01-040. The Association will pay the Relator a commission of $500 at the closing of the sale. The property is not subject to any mortgage or lien. c. Lot 8 in the M Section of the Community to Gatlin Correia for the sale price of $2,500. It has the street address of 8 Shannandoah Drive, Westminster, South Carolina. It is identified more particularly as TMS 316-01-01-041. The Association will pay the Relator a commission of $500 at the closing of the sale. The property is not subject to any mortgage or lien. d. Lot 11 in the M Section of the Community to Correia for the sale price of $2,500. It has the street address of 11 Shannandoah Drive, Westminster, South Carolina. It is identified more particularly as TMS 316—01-01-044. The Association will pay the Relator a commission of $500 at the closing of the sale. The property is not subject to any mortgage or lien. e. Lot 33 in the M Section of the Community to Gatlin Correia for the sale price of $2,500. It has the street address of 33 Shannandoah Drive, Westminster, South Carolina. It is identified more particularly as TMS 316-01-02-009. The Association will pay the Relator a commission of $500 at the closing of the sale. The property is not subject to any mortgage or lien. f. Lot 34 in the M Section of the Community to Gatlin Correia for the sale price of $2,500. It has the street address of 34 Shannandoah Drive, Westminster, South Carolina. It is identified more particularly as TMS 316-01-02-009. The Association will pay the Relator a commission of $500 at the closing of the sale. The property is not subject to any mortgage or lien. Gatlin Correia is not a member of the Association's Board of Directors, he is not an officer or employee of the Association, and, upon information and belief, he has no special connection or relationship with the Association. The Association is informed and believes that these six proposed sales are in the best interest of the Association, its creditors and parties in interest in the case. The Association also moves for a provision in the Order authorizing these sales (if authorization is granted) directing that the 14-day stay under Rule 6004(11) of the Federal Rules of Bankruptcy Procedure will not apply to these sales. The Buyer has already extended the time for closing through Feb.5, 2021. If authorization is granted under an Order entered Jan. 22, 2021 or later, absent the waiver of the stay, the Association would be at risk of losing the sales. A hearing on the Motion is set for Jan. 26, 2021, at 10:30 a.m. Objections, if any, must be filed within 21 days of service of the notice. About Foxwood Hills Property Owners Association Foxwood Hills Property Owners Association, Inc., is an organization of owners of Foxwood Hills -- a lake front community of primary and vacation homes nestled in the northwest corner of Oconee County, S.C. Foxwood Hills Property Owners Association filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 20-02092) on May 8, 2020. At the time of the filing, Debtor disclosed $4,253,427 in assets and $219,780 in liabilities. Judge Helen E. Burris oversees the case. Nexsen Pruet, LLC is the Debtor's legal counsel. FUSE GROUP: Incurs $51,411 Net Loss in Fiscal 2020 -------------------------------------------------- Fuse Group Holdings Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $51,411 on $750,000 of revenue for the year ended Sept. 30, 2020, compared to a net loss of $79,656 on $1.22 million of revenue for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $1.24 million in total assets, $191,102 in total liabilities, and 1.05 million in total stockholders' equity. El Segundo, Calif.-based Prager Metis, CPA's LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 16, 2020, citing that the Company had recurring losses from operations and an accumulated deficit. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1636051/000118518520001756/fuseent20200930_10k.htm About Fuse Group Headquartered in Arcadia, CA, Fuse Group provides consulting services to mining industry clients to find acquisition targets within the parameters set by the clients, when the mine owner is considering selling its mining rights. The services of Fuse Group and Fuse Processing, Inc. include due diligence on the potential mine seller and the mine, such as ownership of the mine and whether the mine meets all operation requirements and/or is currently in operation. GARRETT MOTION: Puts Off Start of Bankruptcy Auction to Dec. 21 --------------------------------------------------------------- Steven Church of Bloomberg News reports that Garrett Motion Inc. put off the start of a bankruptcy court auction until Monday, Dec. 21, 2020, according to court papers filed late Thursday, Dec. 17, 2020. The auto parts maker said the delay was needed "in light of the ongoing competitive process." Garrett had been fighting shareholders in court to sell itself to private equity firm KPS Capital Partners for more than $2 billion, unless another bidder tops that offer at the auction. Shareholders Centerbridge Partners and Oaktree Capital Group have argued that management should instead reorganize and exit bankruptcy by cutting a deal with its former owner Honeywell International Inc. 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 ("OEMs") 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 tapped SULLIVAN & CROMWELL LLP as counsel; QUINN EMANUEL URQUHART & SULLIVAN LLP as co-counsel; PERELLA WEINBERG PARTNERS as investment banker; MORGAN STANLEY & CO. LLC as investment banker; and ALIXPARTNERS LLP as restructuring advisor. KURTZMAN CARSON CONSULTANTS LLC is the claims agent. GENESIS ENERGY: Moody's Rates New Unsecured Notes B1 ---------------------------------------------------- Moody's Investors Service assigned a B1 rating to Genesis Energy LP's proposed senior unsecured notes due 2027. Proceeds from the new note's issuance will be used to refinance the company's 2023 notes and partially repay borrowings under its revolving credit facility. GEL's existing ratings are unchanged, including the Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, B1 ratings on the existing senior unsecured notes and the SGL-3 Speculative Grade Liquidity Rating. The rating outlook is stable. "Genesis Energy's proposed notes issuance will refinance existing debt, improving its maturity profile," stated James Wilkins, Moody's Vice President. "While the financing will be largely leverage neutral, the company is increasing its proportion of term debt." Assignments: Issuer: Genesis Energy LP Senior Unsecured Notes, Assigned B1 (LGD4) RATINGS RATIONALE The proposed senior unsecured notes, which are rated B1, rank pari passu with and are rated the same as GEL's existing senior unsecured notes. The senior unsecured rating is one notch below the Ba3 CFR and reflects the lower priority ranking compared to obligations under the company's $1.7 billion senior secured revolving credit facility (unrated) that has a first lien on all assets. The large size of the secured claims relative to the unsecured notes results in the notes being rated one notch below the Ba3 CFR. GEL's Ba3 CFR reflects its scale, meaningful proportion of fee-based cash flow, and a high degree of business line diversification for a company of its size with offshore pipelines, sodium minerals and sulfur services, marine transportation, and onshore facilities & transportation operations. The company is a large US producer of natural soda ash, which enjoys cost advantages over synthetic soda ash production and generates relatively steady cash flow, despite depressed selling prices in 2020. GEL has high leverage for the rating following years of heavy capital spending in 2014--2019 and acquisitions (6x as of September 30, 2020). However, the company cut its distribution in 2020, saving approximately $200 million per year in cash, and allowing it to repay debt with free cash flow. It has also shown a willingness to issue common equity and preferred equity to fund acquisitions and projects, limiting the impact of growth investments on its leverage. GEL's revenue has declined materially in 2020 during the coronavirus pandemic, resulting from a dramatic fall in demand for oil and gas, as well as for midstream energy services. Soda ash revenue has been depressed due to the general slowdown in the global economy. Moody's expects demand from its end market and revenue to improve in 2021, but there is considerable uncertainty regarding the nature of the recovery and the level of GEL's profitability. However, GEL expects to generate positive free cash flow after cutting capital spending and distributions in 2020. The free cash flow, when applied toward debt reduction, should provide sufficient cushion under its revolving credit facility financial covenants and limit the weakness in its credit metrics. The SGL-3 Speculative Grade Liquidity Rating reflects Moody's expectation GEL will have adequate liquidity through 2021 supported by cash flow from operations and unused availability under its $1.7 billion revolving credit facility due in May 2022. There was approximately $714.1 million of available borrowing capacity as of September 30, 2020, after considering the outstanding balance of $984.8 million and $1.1 million of letters of credit. Commitments under the secured revolver total $1.7 billion (with an accordion feature allowing an additional $300 million increase in commitments). The company's borrowings under the revolver have been elevated on an ongoing basis. The revolver has three financial covenants: (1) a maximum Debt to EBITDA ratio of 5.75x through March 31, 2021, after which time it reverts back to 5.5x; (2) a maximum Senior Secured Debt to EBITDA ratio of 3.25x; and (3) a minimum interest coverage ratio (EBITDA / Interest Expense) of 2.75x through March 31, 2021, after which time it reverts back to 3x. Moody's expects the EBITDA cushion under the covenants to remain comfortable through year-end 2021. The company's next debt maturity is the senior secured revolver's maturity in May 2022. Substantially all of GEL's assets are currently pledged as security under the revolver which limits the extent to which asset sales could provide a source of additional liquidity, if needed. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Debt/EBITDA remains above 5.25x on a sustained basis or core business fundamentals weaken. An upgrade is unlikely at this time given the high leverage, but the CFR could be upgraded if Moody's expects GEL's businesses to exhibit steady earnings growth, Debt to EBITDA trends towards 4.0x and liquidity is good. The principal methodology used in this rating was Midstream Energy published in December 2018. Genesis Energy, L.P., headquartered in Houston, Texas, is a master limited partnership (MLP) with midstream assets located in the US Gulf Coast region and soda ash operations in Wyoming. The company conducts a wide variety of operations through four different business segments: offshore pipeline transportation, sodium minerals & sulfur services, onshore facilities & transportation, and marine transportation. GFL ENVIRONMENT: Moody's Assigns Ba3 Rating to New $1B Sec. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to GFL Environmental Inc.'s proposed new $1 billion senior secured notes due December 2028. The B1 corporate family rating, B1-PD probability of default rating, Ba3 ratings on GFL's existing first lien term loan and senior secured notes and B3 ratings on its existing senior unsecured notes remain unchanged. The Speculative-Grade Liquidity rating also remains unchanged at SGL-2. The outlook remains stable. The proceeds from the senior secured notes will be used to prepay a portion of the existing term loan due May 2025. This is a debt-for-debt transaction and will not materially affect GFL's leverage. Assignments: Issuer: GFL Environmental Inc. Senior Secured Regular Bond/Debenture, Assigned Ba3 RATINGS RATIONALE GFL's B1 CFR is constrained by: 1) its history of aggressive debt-financed acquisition growth strategy; 2) Moody's expectation that leverage will remain above 4x in the next 12 to 18 months (about 4.8x pro forma for recent acquisitions); 3) the short time frame between acquisitions which increases the potential for integration risks and creates opacity of organic growth; and 4) GFL's majority ownership by private equity firms, which may continue to hinder deleveraging. However, GFL benefits from: 1) the company's diversified business model; 2) high recurring revenue supported by long term contracts; 3) its good market position in the stable Canadian and US non-hazardous waste industry; 4) EBITDA margins that compare favorably with those of its investment grade rated industry peers; and 5) good liquidity. The stable outlook reflects Moody's view that GFL will sustain a leverage that will remain below 5x and maintain its stable margins and good liquidity in the next 12 to 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if GFL demonstrates consistent and visible organic revenue growth, maintains good liquidity and sustains adjusted debt/EBITDA below 4.0x (4.8x pro forma 2021E) and EBIT/Interest above 2.0x (1.6x pro forma 2021E). The ratings could be downgraded if liquidity weakens, possibly caused by negative free cash flow, if there is a material and sustained decline in margins due to challenges integrating acquisitions or if adjusted Debt/EBITDA is sustained above 5.0x (4.8x pro forma 2021E) and EBIT/Interest falls below 1.5x (1.6x pro forma 2021E). GFL has good liquidity (SGL-2). Sources are approximately C$900 million with no mandatory debt repayments over the next 12 months. After the closing of the acquisitions of WCA Waste Corporation and the Waste Management assets in October, GFL has limited cash on its balance sheet. Sources of liquidity for GFL include over C$600 million of availability (as at Sept. 30, 2020) under its C$628 million and $40 million revolving credit facilities, both due August 2023, and Moody's expected free cash flow of about C$300 million over the next 12 months to December 2021. GFL's revolver is subject to a net leverage covenant, which Moody's expects will have at least a 40% cushion over the next four quarters. GFL has limited flexibility to generate liquidity from asset sales as its assets are encumbered. Environmental risks considered material are the various regulations and requirements that GFL is subjected to for the collection, treatment and disposal of waste. GFL has a long track record of adhering to the requirements for the proper handling of the waste materials encountered. The governance considerations Moody's makes in GFL's credit profile include the majority ownership by private equity firms as well as its history of debt-financed acquisitions and aggressive financial policies, which may be reversed after the completion of the IPO earlier this year. Moody's also considered GFL's track record of successfully integrating its acquisitions for the expansion of its business as well as the management team's experience in the amalgamation of the businesses. The Ba3 ratings on the senior secured notes and term loan are one notch above the CFR due to the senior debt's first priority access to substantially all of the company's assets as well as loss absorption cushion provided by the senior unsecured notes. The B3 rating on the senior unsecured notes is two notches below the CFR due to the senior unsecured notes' junior position in the debt capital structure. The principal methodology used in this rating was Environmental Services and Waste Management Companies published in April 2018. GFL Environmental Inc., headquartered in Toronto, provides solid waste and liquid waste collection, treatment and disposal solutions and soil remediation services to municipal, industrial and commercial customers in Canada and the US. Pro forma for acquisitions, annual revenue is approximately C$5.0 billion. GFL is publicly traded on the Toronto Stock Exchange and New York Stock Exchange. GIBSON ENERGY: DBRS Gives Provisional BB Rating, Trend Stable ------------------------------------------------------------- DBRS Limited assigned a provisional rating of BB with a Stable trend to Gibson Energy Inc.'s (Gibson or the Company; rated BBB (low) with a Stable trend by DBRS Morningstar) $250 million 5.25% Fixed-to-Fixed Rate Subordinated Notes (the Notes) due December 22, 2080. DBRS Morningstar also assigned an equity weight of 50% to the Notes until December 22, 2040; 25% after December 22, 2040, until December 22, 2045; and on and after December 22, 2045, the Notes will be treated as 100% debt. The equity weight is based on the currently applicable "DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers" released on November 2, 2020. Gibson intends to use the net proceeds from the offering to fund the previously announced redemption of its outstanding 5.25% convertible unsecured debentures due July 15, 2021, to reduce outstanding indebtedness under its revolving credit facility, and for general corporate purposes. Notes: All figures are in Canadian dollars unless otherwise noted. GL BRANDS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: GL Brands, Inc. FDBA Freedom Leaf Arlington Heights Finance Station PO Box 470458 3101 West 6th Street Fort Worth, TX 76147-9998 Business Description: GL Brands Inc. -- https://glbrands.com/ -- is a global hemp consumer packaged goods company that creates brands engaged in the development and sale of cannabis-derived wellness products. Chapter 11 Petition Date: December 17, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43800 Debtor's Counsel: Robert A. Simon, Esq. WHITAKER CHALK SWINDLE AND SCHWARTZ 301 Commerce St., Suite 3500 Fort Worth, TX 76102 Tel: 817-878-0500 E-mail: rsimon@whitakerchalk.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Carlos Frias, chief executive officer. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RC5GTQY/GL_Brands_Inc__txnbke-20-43800__0003.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IKKNMTY/GL_Brands_Inc__txnbke-20-43800__0001.0.pdf?mcid=tGE4TAMA GRANGE ROAD: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Grange Road Port Wentworth, LLC 100 Industrial Blvd. Winter Have, FL 33880 Business Description: Grange Road Port Wentworth, LLC is a privately held company whose principal assets are located at 322 Grange Road Port Wentworth, GA 31407. Chapter 11 Petition Date: December 17, 2020 Court: United States Bankruptcy Court Middle District of Louisiana Case No.: 20-10826 Debtor's Counsel: William H. Patrick, III, Esq. FISHMAN HAYGOOD LLP 20 St. Charles Ave. 46th Floor New Orleans, LA 70170 Tel: (504) 556-5252 Email: wpatrick@fishmanhaygood.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Richard E. Staughn, manager. The Debtor stated it has no unsecured creditors. https://www.pacermonitor.com/view/KHHU6SQ/Grange_Road_Port_Wentworth_LLC__lambke-20-10826__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/F2SWDNA/Grange_Road_Port_Wentworth_LLC__lambke-20-10826__0001.0.pdf?mcid=tGE4TAMA GREEN TREE 1996-03: Moody's Downgrades Class M-1 Debt to C ---------------------------------------------------------- Moody's Investors Service downgraded the rating of Cl. M-1 from Green Tree Financial Corporation MH 1996-03. The collateral backing this deal consists of manufactured housing loans. Complete rating actions are as follows: Issuer: Green Tree Financial Corporation MH 1996-03 M-1, Downgraded to C (sf); previously on Mar 30, 2009 Downgraded to Caa3 (sf) RATINGS RATIONALE The rating downgrade is primarily due to the weak performance of the underlying collateral and an increase in the bond's under-collateralization level. The rating action also reflects the recent performance as well as Moody's updated loss expectations on the underlying pool. In light of the current macroeconomic environment, Moody's reviewed loss expectations based on the extent, if any, of performance deterioration of the underlying loans, resulting from a slowdown in economic activity and increased unemployment due to the coronavirus outbreak. In Manufactured Housing (MH) transactions, servicers typically provide payment deferrals to delinquent borrowers and will generally defer the forborne amount as a non-interest-bearing balance, due at maturity of the loan as a balloon payment. Its analysis of such collateral thus incorporates assumptions around the current and historical proportion of borrowers granted payment deferral. As per its MH loan surveillance methodology, Moody's assumes that approximately 40%-50% of borrowers in its rated-universe of MH pools have received one or more such deferrals, and this assumption remains unchanged in the current environment. 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 residential mortgage loans 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. Principal Methodologies The principal methodology used in this rating was "US RMBS Surveillance Methodology" published in July 2020. In addition, Moody's publishes a weekly summary of structured finance credit ratings and methodologies. Factors that would lead to an upgrade or downgrade of the rating: Up Levels of credit protection that are higher than necessary to protect investors against current expectations of loss could drive the ratings of the subordinate bonds up. Losses could decline from Moody's original expectations as a result of a lower number of obligor defaults or appreciation in the value of the mortgaged property securing an obligor's promise of payment. Transaction performance also depends greatly on the US macro economy and housing market. Down Levels of credit protection that are insufficient to protect investors against current expectations of loss could drive the ratings down. Losses could rise above Moody's expectations as a result of a higher number of obligor defaults or deterioration in the value of the mortgaged property securing an obligor's promise of payment. Transaction performance also depends greatly on the US macro economy and housing market. Other reasons for worse-than-expected performance include poor servicing, error on the part of transaction parties, inadequate transaction governance and fraud. Finally, performance of RMBS continues to remain highly dependent on servicer procedures. Any change resulting from servicing transfers or other policy or regulatory change can impact the performance of these transactions. GS MORTGAGE 2013-GC10: Fitch Downgrades Class E Certs to Bsf ------------------------------------------------------------ Fitch Ratings has downgraded two classes and affirmed nine classes of Goldman Sachs Mortgage Company's GS Mortgage Securities Trust (GSMS) commercial mortgage pass-through certificates, series 2013-GC10. RATING ACTIONS GS Mortgage Securities Trust 2013-GC10 Class A-4 36192CAD7; LT AAAsf Affirmed; previously at AAAsf Class A-5 36192CAE5; LT AAAsf Affirmed; previously at AAAsf Class A-AB 36192CAF2; LT AAAsf Affirmed; previously at AAAsf Class A-S 36192CAH8; LT AAAsf Affirmed; previously at AAAsf Class B 36192CAL9; LT AAsf Affirmed; previously at AAsf Class C 36192CAN5; LT Asf Affirmed; previously at Asf Class D 36192CAQ8; LT BBB-sf Affirmed; previously at BBB-sf Class E 36192CAS4; LT Bsf Downgrade; previously at BB+sf Class F 36192CAU9; LT CCCsf Downgrade; previously at Bsf Class X-A 36192CAG0; LT AAAsf Affirmed; previously at AAAsf Class X-B 36192CAJ4; LT Asf Affirmed; previously at Asf KEY RATING DRIVERS Increased Loss Expectations: Loss expectations have increased since Fitch's last rating action for the largest loan in the pool, Empire Hotel & Retail (15.8%), a mixed-use hotel/retail property on the Upper West Side of Manhattan, which is designated as a Fitch Loan of Concern (FLOC) and the primary driver of loss expectations for the pool. Prior to the coronavirus pandemic, the property experienced declining performance metrics due to renovations that took one-half of the hotel rooms off line from 2014 through year-end 2016 (YE 2016). Upon completion of renovations, performance metrics did not stabilize as expected due to the soft hotel market in New York City. As of October 2020, the hotel is closed until March 2021. While the retail portion of the property remains operational, most of the property's cash flow is generated by the hotel's operations. The loan has been delinquent twice in the past twelve months. Per the June 2020 financials, the NOI debt service coverage ratio (DSCR) was 0.54x, down from 0.91x at YE 2019 and 0.98x at YE 2018. Minimal Changes to Credit Enhancement: As of the September 2020 distribution date, the pool's aggregate balance has been paid down by 22.3% to $668 million from $859 million at issuance. Eight loans, representing 11.8% of the balance at securitization, have repaid, one loan, which was previously designated as a FLOC, repaid since the last rating action (2.6% of the pool at the last rating action). One loan representing 5.2% of the pool is interest only. 17 loans (19.6% of the pool) are covered by fully defeased collateral, one of which (0.29% of the pool) defeased since the last rating action. Defeased collateral fully covers the class A-4 certificate and partially covers (19.6%) the A-5 certificate. Fitch Loans of Concern: Seven loans (27.14% of the pool) have been designated as a FLOC including five loans in the top 15. The FLOCs in the top 15 include the previously mentioned mixed-use Empire Hotel & Retail loan as well as four underperforming office properties (One Technology Plaza, 701 Technology Drive, One Castle, Hill and 601 West Main; combined 23.08%) with recent occupancy declines and upcoming tenant rollover and one hotel loan (Hyatt Place Seattle, 3.39% of the pool). Fitch's base case analysis included additional NOI haircuts to address the potential for further performance decline. Additionally, Fitch applied sensitivity stresses to One Technology Plaza (75% loss assumed) and 701 Technology Drive (25% loss assumed) to reflect the potential for outsized losses based on upcoming tenant rollover at the properties and their respective locations in soft submarkets. This has contributed to the downgrades and Negative Rating Outlooks. Coronavirus Exposure: The hotel sector as a whole is expected to experience significant declines in RevPAR in the near term due to travel disruptions from the coronavirus pandemic. Additionally, retail properties are expected to face cash flow disruption as tenants may not be able to pay rent or as leases with upcoming expiration dates are not renewed given significant declines in foot traffic. Within the pool, there are two non-defeased loans secured by hotel properties (4.06% of pool), with a weighted average NOI DSCR of 1.38x. This excludes the mixed-use Empire Hotel & Retail (15.8% of the pool) with an NOI DSCR of 0.54x as of June 2020. There are 17 non-defeased loans secured by retail properties (30.7%), with a weighted average NOI DSCR of 2.16x. Fitch's base case analysis included additional stresses to two hotel loans (4.1% of the pool), one mixed-use hotel/retail property (15.8% of the pool), and four retail loans (6.7% of the pool) related to ongoing performance concerns in light of the coronavirus pandemic. RATING SENSITIVITIES Factors that lead to upgrades would include stable to improved asset performance coupled with paydown and/or defeasance. Upgrades of classes B, C and X-B may occur with additional improvement in credit enhancement and/or defeasance but would be limited should the deal be susceptible to a concentration whereby the underperformance of FLOCs could cause this trend to reverse. An upgrade to class D would also take into account these factors, but would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is a likelihood for interest shortfalls. An upgrade to classes E and F is not likely until the later years in a transaction and only if the performance of the remaining pool is stable and if there is sufficient credit enhancement, which would occur if the non-rated class G is not eroded, the senior classes payoff, and if the Empire Hotel & Retail loan is paid off or liquidated without an outsized loss. While coronavirus-related stresses continue to impact the pool, upgrades are unlikely. Factors that lead to downgrades include an increase in pool level losses from underperforming or specially serviced loans. Factors that lead to downgrades include an increase in pool level losses from underperforming loans. Downgrades to the classes rated 'AAAsf' are not considered likely due to the position in the capital structure, but may occur at 'AAAsf' or 'AAsf' should interest shortfalls occur. Downgrades to classes C and D are possible should additional defaults occur or loss expectations increase. Downgrades to class E and F are possible should pool performance decline and/or properties vulnerable to the coronavirus experience losses greater than expected. In addition to its baseline scenario, Fitch also envisions a downside scenario where the health crisis is prolonged beyond 2021; should this scenario play out, Fitch expects that a greater percentage of classes may be assigned a Negative Rating Outlook or those with Negative Rating Outlooks will be downgraded one or more categories. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. GTT COMMUNICATIONS: Moody's Downgrades CFR to Caa2, Outlook Neg. ---------------------------------------------------------------- Moody's Investors Service downgraded GTT Communications, Inc's corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD, the rating on the company's senior secured facilities to Caa1 from B3 and the rating on the company's 2024 senior unsecured notes to Ca from Caa2. The company's SGL-4 speculative grade liquidity rating (SGL) is maintained. The outlook is negative. The downgrade reflects the continued delays in the company reaching an agreement with its lenders over a long-term cure of its reporting requirements which GTT is in breach of due to recently discovered accounting issues which have led to the company being unable to file its Q2 and Q3 financial reports. The timing of a potential resolution remains uncertain and the downgrade reflects Moody's uncertainty over the ongoing sustainability of GTT's current capital structure. These issues are a key driver of the current rating action. Given that there is inadequate information to monitor the ratings, Moody's will withdraw GTT's ratings in accordance with Moody's Investors Service's Policy for Withdrawal of Credit Ratings as soon as practical. Downgrades: Issuer: GTT Communications BV Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD3) from B3 (LGD3) Issuer: GTT Communications, Inc. Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD3) from B3 (LGD3) Senior Unsecured Regular Bond/Debenture, Downgraded to Ca (LGD6) from Caa2 (LGD6) Outlook Actions: Issuer: GTT Communications, Inc. Outlook, Changed to Negative from Rating Under Review RATINGS RATIONALE The Caa2 CFR reflects Moody's concerns over the long-term sustainability of GTT's capital structure. The company is still reviewing accounting issues that came to light in August 2020 and which Moody's expected would be resolved by now. GTT and its lenders are currently in a forbearance agreement, which has now been extended three times and is now set to expire on December 28. Moody's does not expect the company to be in a position to resolve its accounting issues by then which will require a further extension or for GTT to negotiate alternate solutions with its lenders. The outcome of these discussions is uncertain given the large debt quantum and the subordinated nature of the $575 million 2024 senior noteholders, behind c.$2.7 billion of first lien debt. While GTT is in the process of divesting its infrastructure assets for $2.15 billion, the sale remains subject to closing conditions and there is uncertainty over the timing of such closing. The doubt cast by the accounting issues over the actual level of historical EBITDA make any estimate of pro-forma leverage uncertain at the moment and the effect of the sale of the infrastructure business on the underlying credit profile remains unclear. GTT's SGL-4 reflects the weak liquidity given the heightened risk of an imminent potential payment default. The negative outlook reflects Moody's concerns over a potential default in the next few weeks or months as a result of either a liquidity shortfall or a restructuring of some or all of GTT's capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the ongoing accounting review and Moody's expectation that these are unlikely to be resolved in the near future, Moody's will aim to withdraw GTT's ratings as soon as practical in line with Moody's Policy on the Withdrawal of Credit Ratings when there is incorrect, insufficient or otherwise inadequate information to maintain ratings. The principal methodology used in these ratings was Telecommunications Service Providers published in January 2017. GULFPORT ENERGY: Gets Court Approval for $580 Mil. DIP Loan ----------------------------------------------------------- Allison McNeely of Bloomberg News reports that Gulfport Energy Corp. received court approval for its final debtor-in-possession order, allowing it to access $580 million in financing that will help it exit from bankruptcy. The company continues to negotiate with its official unsecured creditors committee around approval of its cash management system, a lawyer for the oil and gas firm said in a hearing Friday, December 18, 2020. About Gulfport Energy Corp. Gulfport Energy Corporation (NASDAQ: GPOR) -- http://www.gulfportenergy.com/-- is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and a producer of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds non-core assets that include an approximately 22% equity interest in Mammoth Energy Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. Gulfport Energy reported net loss of $2.0 billion for the year ended Dec. 31, 2019 as compared to net income of $430.6 million for the year ended Dec. 31, 2018. As of June 30, 2020, Gulfport had $2.58 billion in total assets, $2.35 billion in total liabilities, and $231.34 million in total stockholders' equity. As of Sept. 30, 2020, Gulfport had $2,375,559,000 in assets and $2,520,336,000 in liabilities. Gulfport Energy Corporation and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35562) on Nov. 13, 2020. The Hon. David R. Jones is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER L.L.P. as local bankruptcy counsel; ALVAREZ & MARSAL NORTH AMERICA, LLC as restructuring advisor; and PERELLA WEINBERG PARTNERS L.P. and TUDOR, PICKERING, HOLT & CO. as financial advisor. PRICEWATERHOUSECOOPERS LLP is the tax services provider. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims agent. WACHTELL, LIPTON, ROSEN & KATZ is counsel for the Special Committee of Gulfport Energy's Board of Directors of Gulfport Energy Corporation and CHILMARK PARTNERS is the financial advisor. KATTEN MUCHIN ROSENMAN LLP is counsel for the Special Committee of the Governing Body of each Debtor other than Gulfport Energy Corporation, and M-III PARTNERS, LP is the financial advisor. HARSCO CORPORATION: Moody's Downgrades CFR to Ba3, Outlook Neg. --------------------------------------------------------------- Moody's Investors Service downgraded Harsco Corporation's Corporate Family Rating to Ba3 from Ba1 and Probability of Default Rating to Ba3-PD from Ba1-PD. Moody's also downgraded Harsco's senior secured bank credit facility to Ba2 from Baa3 and the senior unsecured notes to B1 from Ba2. The Speculative Grade Liquidity rating was also downgraded to SGL-3 from SGL-2. The outlook remains negative. "Harsco's operations and credit metrics have underperformed relative to our initial expectations and is the main driver of the downgrade," said Griselda Bisono, Moody's Vice President-Analyst. "The company's weak performance is further exacerbated by the debt-financed acquisition of Stericycle, Inc.'s Environmental Solutions Business (ESOL) in April 2020," said Bisono. The downgrade of the SGL rating reflects Moody's expectation of increased capital expenditures within the company's environmental services segments over the next 18 months, which will constrain free cash flow. The negative outlook reflects Harsco's limited cushion to absorb any additional debt or earnings underperformance at the current rating level, given its already weak credit metrics. Downgrades: Issuer: Harsco Corporation Corporate Family Rating, Downgraded to Ba3 from Ba1 Probability of Default Rating, Downgraded to Ba3-PD from Ba1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Senior Secured 1st Lien Term Loan due 2024, Downgraded to Ba2 (LGD2) from Baa3 (LGD3) Senior Secured 1st Lien Delayed Draw Term Loan due 2024, Downgraded to Ba2 (LGD2) from Baa3 (LGD3) Senior Secured Revolving Credit Facility due 2024, Downgraded to Ba2 (LGD2) from Baa3 (LGD3) Senior Unsecured Notes due 2027, Downgraded to B1 (LGD5) from Ba2 (LGD5) Outlook Actions: Issuer: Harsco Corporation Outlook, Remains Negative RATINGS RATIONALE Harsco's Ba3 CFR is supported by improving fundamentals within its key end markets including rising capacity utilization and demand within the steel industry following a slowdown in steel production in Q1 and Q2 due to COVID-19, as well as strong volume growth in several waste categories including healthcare, retail and certain industrial segments which were also impacted by lower volume growth due to COVID. Harsco's rating also reflects its long-standing customer relationships, which is reflected in its sizeable order backlog and provides some revenue visibility for services under contract. Harsco's rating is constrained by Moody's expectation of declining, but still high leverage, with adjusted debt to EBITDA projected to be maintained above 4x through the end of 2022. The rating also incorporates cyclicality in the Harsco Environmental segment, where sales are largely driven by steel production volumes and can be impacted by prolonged slowdowns in steel mill production or excess production capacity. In addition, Moody's expects a protracted recovery in Harsco's rail segment, which is reliant on the capital expenditure budgets of its customers and is currently being affected by reduced ridership. Moody's ratings also consider environmental risks including the various laws and regulations relating to the protection of the environment that Harsco is subject to. Many of these laws and government standards require Harsco to incur significant compliance costs and impose substantial monetary fines and/or criminal sanctions for violations. These risks are partially offset by the industry's high barriers to entry, including the high cost and complexity of obtaining regulatory permits, required in-house expertise on hazardous and radioactive waste laws and regulations and high initial capital spending. The speculative grade liquidity rating of SGL-3 reflects Moody's expectation of adequate liquidity for Harsco over the next 12-18 months, which incorporates $84 million of cash at the end of Q3 2020, ample revolver availability, anticipated positive free cash flow starting in 2022 and no near-term debt maturities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely given the negative outlook, however, longer term would reflect adjusted debt to EBITDA at or below 3.5x, EBIT to interest expense at or above 2.5x and EBIT margin at or above 7.5%, all on a sustained basis. An upgrade would also require consistent positive free cash generation. The ratings could be downgraded should the company fail to reduce adjusted debt to EBITDA below 4.5x, improve EBIT to interest expense above 2x or should the company's EBIT margin fall below 5%. A ratings downgrade could also occur should the company experience any deterioration in liquidity. Harsco Corporation, headquartered in Camp Hill, PA, is a diversified industrial service company focused on global markets for outsourced services to metal industries, metal recovery & mineral-based products, railway track maintenance and certain industrial equipment. Inclusive of the ESOL business pro forma revenues for the 12 months ended September 30, 2020 totaled approximately $2.0 billion. The principal methodology used in these ratings was Environmental Services and Waste Management Companies published in April 2018. HJJ FITNESS: Hires Edwin H. Breyfogle as Counsel ------------------------------------------------ HJJ Fitness, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Ohio to employ Edwin H. Breyfogle, as counsel to the Debtor. HJJ Fitness requires Edwin H. Breyfogle to: a. advise and consult with the Debtor concerning questions arising in the conduct and administration of the estate and concerning the Debtor's rights and remedies with regard to the estate's assets and the claims of secured, preferred, and unsecured creditors and other parties in interest; b. appear for, prosecute, defend and represent the Debtor's interest in suits arising in or related to the bankruptcy case; c. investigate and prosecute preference and other actions arising under the debtor-in-possession's avoiding powers; and d. assist in the preparation of such pleadings, motions, notices and orders as are required for the orderly administration of the Debtor. Edwin H. Breyfogle will be paid at the hourly rate of $200. Edwin H. Breyfogle will be paid a retainer in the amount of $3,000. Edwin H. Breyfogle will also be reimbursed for reasonable out-of-pocket expenses incurred. Edwin H. Breyfogle assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Edwin H. Breyfogle can be reached at: Edwin H. Breyfogle, Esq. 108 3rd St. NE Massillon, OH 44646 Tel: (330) 837-9735 About HJJ Fitness HJJ Fitness, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ohio Case No. 20-61828) on Dec. 14, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Edwin H. Breyfogle, Esq. HOLLINGSWORTH FARMS: $3M Sale of 836-Acre Lowndes Property Okayed ----------------------------------------------------------------- The U.S. Bankruptcy for the Middle District of Alabama authorized Hollingsworth Farms, LLC's sale of its fee simple interest in/to approximately 836 acres Lowndes County, Alabama real property along with all fixtures/structures attached thereto and certain personal property, to Catherine Hunter for $2.95 million, cash. The sale is free and clear of encumbrances. The Debtor together with the Alabama Ag Credit, FLCA, have reached an agreement that the mortgage balance(s) in favor of Alabama Ag, be fully satisfied as of the date of closing. A hearing on the Motion was held on Dec. 10, 2020 at 1:45 p.m. About Hollingsworth Farms Hollingsworth Farms, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ala. Case No. 20-31975) on Sept. 16, 2020. The petition was signed by James W. Hollingsworth, sole member of Port Royal Medical Investments LLC. At the time of the filing, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Judge William R. Sawyer oversees the case. Espy, Metcalf & Espy, P.C. serves as the Debtor's legal counsel. HURDL INC: To Seek Confirmation of Pinnacle-Backed Plan on Jan. 7 ----------------------------------------------------------------- Hurdl Inc. has won approval from the U.S. Bankruptcy Court for the Southern District of New York of its proposal to seek confirmation of its Plan of Reorganization and final approval of the Disclosure Statement on Jan. 7, 2021 at 10:00 a.m. (prevailing Eastern Time). The judge has granted conditional approval of the Disclosure Statement. Any objections to final approval of the Disclosure Statement and confirmation of the Plan are due Dec. 30, 2020 at 5:00 p.m. (prevailing Eastern Time). The Debtor executed the Restructuring Support Agreement ("RSA") on Nov. 12, 2020 that provided for terms of a Prepackaged Plan of Reorganization. It commenced solicitation on Nov. 24, 2020. Pinnacle Bank, the Holder of Class 1 First Lien Claims, immediately returned its ballot. Because of the Debtor's dire financial condition (there is less than $10,000 of cash in the Debtor's business operating account), the commencement of the chapter 11 case could not wait for the voting deadline to pass, which the Debtor notified voting parties was scheduled to occur on Monday, Dec. 28, 2020. The Debtor filed its voluntary petition promptly after receiving Pinnacle's voting ballot to facilitate, among other things, the infusion of working capital through the Debtor's proposed debtor in possession financing, and to halt creditor efforts to collect on past due amounts. Plan Deal After hard-fought negotiations with Pinnacle and other parties, the Debtor was able to reach an agreement with the holders of First Lien Claims and the requisite number of voting Bridge Loan Claims for confirmation regarding the terms of a consensual restructuring. Those terms were memorialized in the Amended and Restated Restructuring Support Agreement (the "RSA") and the Debtor's proposed chapter 11 plan reflecting the RSA's terms. Among other things, the restructuring contemplates: partial payment for the First Lien Claims; a seven cent recovery to Bridge Loan Claims and a 1.5% interest, in the aggregate, of the Reorganized Debtor; and a five cent recovery to General Unsecured Claims if that class votes in favor of the Plan, which is expected to occur. The Plan contemplates a complete deleveraging of the Debtor's approximately $4.7 million of liabilities, working capital to fund the Debtor's ongoing operations during this chapter 11 case and upon emergence, and enables the Debtor to maintain its critical business relationships with customers and vendors. The Plan contemplates, among other things, the following: * Pinnacle Bank, the Holder of Allowed Class 1-First Lien Claims, will receive a ten-cent recovery on account of its secured claim against the Debtor; * Holders of Allowed Class 2-Bridge Loan Claims will receive a seven-cent recovery on account of their respective Allowed Bridge Loan Claims, plus their respective pro rata share of the 1.5% in New Common Stock of the Reorganized Debtor; * Holders of Allowed Class 3-General Unsecured Claims, if the class votes in favor of the Plan, which is expected, will receive a five-cent recovery on account of their respective Allowed General Unsecured Claims; * All DIP Lenders will receive their pro rata share of 3.5% of the New Common Stock of the Reorganized Debtor; and * the Plan Sponsor, in exchange for his financial contribution to the Debtor through the DIP Loan, will receive 95% of the New Common Stock of the Reorganized Debtor. About Hurdl Inc. Hurdl Inc. is in the business of live event data capture and personalized SMS marketing. Hurdl Inc. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-12768) on Nov. 30, 2020. Hurdl disclosed total assets of $484,613 and total liabilities of $4,877,677 as of the bankruptcy filing. The Hon. Shelley C. Chapman is the case judge. PACK LAW, P.A., is the Debtor's counsel. GLASSRATNER ADVISORY & CAPITAL GROUP, LLC, is the financial advisor. IMPRESA HOLDINGS: $10.5M Sale of All Assets to Crestview Approved ----------------------------------------------------------------- Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized Impresa Holdings Acquisition Corp., et al., to sell substantially all assets to Crestview Aerospace, LLC, for $10.5 million cash plus the assumption of certain liabilities. An auction was held and conducted pursuant to the terms of the court-approved bidding procedures on Dec. 7, 2020. The Debtors identified the Asset Purchase Agreement by Crestview as the highest or otherwise best bid for the Assets. The Court conducted the sale hearing on Dec. 11, 2020. According to the APA, the aggregate consideration for the sale and transfer of the assets will be: (i) $10,500,000; plus (ii) the assumption of certain liabilities including payment of the cure amounts, and plus (iii) the amount of any paid time off payable to employees of the Debtors (provided, in no event shall the amount under this item (iii) exceed $350,000). Counsel to the Successful Bidder: Fredrikson & Byron, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402 Clinton E. Cutler (ccutler@fredlaw.com) James C. Brand (jbrand@fredlaw.com) - and - Klehr Harrison Harvey Branzburg LLP 919 N. Market Street, Suite 1000 Wilmington, Delaware 19801 Richard M. Beck (rbeck@klehr.com) Sally E. Veghte (sveghte@klehr.com) About Impresa Holdings Impresa Holdings designs, manufactures, and supplies precision sheet metal parts, CNC-machined components, and assemblies for commercial jets, regional and business aircraft, military aircraft, and civil/military helicopters. The company's services include sheet metal fabrication, hydroform pressing, brake. Impresa began operating in 1973 as Venture Aircraft and expanded through a 2012 acquisition of Swift-Cor Aerospace. It then changed its name Impresa Aerospace. Operating from a production facility in Gardena, California, Impresa provides machined parts, fabricated components, assembled parts and tooling for the aerospace and defense industries. In addition to Boeing, the debtor's customers include Spirit AeroSystems, Raytheon, Northrop Grumman, Cessna, Lockheed Martin and Gulfstream. It has provided parts and components for Boeing's major airframes, including the 787, 777 and 747 as well as the Airbus A380 and Gulfstream's G550 and G650 planes. On Sept. 24, 2020, Impresa Holdings Acquisition Corp. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12399). At the time of the filing, Impresa Holdings had estimated assets of less than $50,000 and liabilities of between $10 million and $50 million. Robert J. Dehney, Matthew B. Harvey, Paige N. Topper and Taylor M. Haga of Morris Nichols Arsht & Tunnell LLP serve as counsel to Impresa. Duff & Phelps Securities, LLC, is the investment banker. Stretto is the claims agent. IN-SHAPE HOLDINGS: Aquiline, Insider Group Has $45.5M Credit Bid ---------------------------------------------------------------- In-Shape Holdings, LLC, and affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize bidding procedures in connection with the sale of substantially all assets to In-Shape Acquisition 2021, LLC, on the terms of the Asset Purchase Agreement dated as of Dec. 16, 2020, subject to overbid. According to court filings, In-Shape Acquisition is an affiliate of private equity firm Aquiline Capital Partners. On Oct. 30, 2020, Aquiline purchased first lien claims from the original prepetition lenders. An equity sponsor for In-Shape Acquisition is Paul Rothbard, one of the Debtors' landlords, beneficially owns less than 15% of the Debtors' equity and was on the Board of In-Shape Holdings, LLC until September 10, 2020. In-Shape Acquisition is purchasing the Debtors' assets via a credit bid of the first lien obligations and the DIP financing. $30 Million Financing The goal of the chapter 11 cases is to consummate a sale of the Debtors' assets that will maximize recoveries for their estates, maintain a viable business, and ensure the continued employment of dozens of current employees of their facilities. The Debtors engaged in a robust prepetition marketing process, led by their investment banker and financial advisors, Chilmark Partners LLP. In August 2020, Chilmark initiated a marketing and sale process by contacting over one hundred potentially interested strategic and financial parties. Ultimately, as a result of the prepetition marketing process and the sale of the Prepetition First Lien Obligations to the Pre-Petition Secured Lenders, the Debtors negotiated the terms of a sale to the Purchaser, subject to higher and better bids and Court approval, as well as the terms of DIP financing to fund the administrative expenses and certain other expenses associated with the filing of these chapter 11 cases. In order to provide the Debtors with the liquidity needed to accomplish a sale of substantially all of their assets, the Pre-Petition Secured Lenders agreed to provide DIP financing to the Debtors in an amount up to $30 million, including $15 million in new-money loans pursuant to the terms and conditions in the DIP Agreement. $45.3M Credit Bid Pursuant to the terms of the APA, the Purchaser has agreed to purchase the Purchased Assets for a purchase price of (i) $45.3 million credit bid (in the form of a credit against the obligations arising under the DIP Agreement and the Prepetition Credit Facility), plus (ii) a cash payment of $250,000 to cover certain of the Debtors' post-closing wind-down costs, and an additional amount of cash to cover certain other specified obligations, and (iii) assumption of all cure amounts for all purchased contracts and certain other liabilities of the Debtors. The Purchaser, in making the offer, has relied on representations by the Debtors that they would ask the Court's approval of (i) a $1 million break-up fee, which is less than 3% of the aggregate Purchase Price, and (ii) expense reimbursement not to exceed in the aggregate $500,000. February Auction The Debtors ask the Court to approve the Bidding Procedures. The salient terms of the Bidding Procedures are: a. Bid Deadline: Feb. 8, 2021 at 4:00 p.m. (ET) b. Initial Bid: The Purchase Price will include (a) cash in an amount not less than $48.05 million; and (b) assumption of Assumed Liabilities, on terms no less favorable than the APA. c. Deposit: 10% of the Purchase Price d. Auction: If the Debtors receive at least one qualified bid other than the APA, they will conduct an auction, at 11:00 a.m. (ET) on Feb. 11, 2021, at the offices of Troutman Pepper LLP, located at 1313 Market Street, Suite 5100, Wilmington, Delaware 19801, or such other location, including by virtual meeting, as will be timely communicated to all entities entitled to attend the auction. e. Bid Increments: $500,000 f. Sale Hearing: Feb. 16, 2021 g. Sale Objection Deadline: Feb. 5, 2021 at 4:00 p.m. (ET) h. A secured creditor is allowed to credit bid the amount of its claims in a sale of assets in which it has a security interest. The successful bidder will pay all Cure Amounts, if any, necessary to cure all defaults, if any, and to pay all actual or pecuniary losses that have resulted from such defaults under the Purchased Contracts assumed at Closing. The Debtors will serve the cure notice upon each counterparty to an initial purchased contract by no later than two business days following entry of the Bidding Procedures Order. The assumption objection Deadline is Feb. 5, 2021 at 4:00 p.m. (ET). In light of their financial constraints and because of the potentially diminishing value of the Debtors' assets, the Debtors must close the sale promptly after all closing conditions have been met or waived. Thus, waiver of the 14-day stay imposed by Rules 6004(h) and 6006(d) is appropriate in the circumstance. A copy of the APA and the Bidding Procedures is available at https://tinyurl.com/ybhlyz2z from PacerMonitor.com free of charge. The Purchaser: IN-SHAPE ACQUISITION 2021, LLC c/o Paul Rothbard 28128 Pacific Coast Highway, Space 172 Malibu, CA 90265 E-mail: prothbard@hotmail.com The Purchaser is represented by: Gregg Galardi, Esq. Robb Tretter, Esq. ROPES & GRAY LLP 1211 Avenue of the Americas New York, NY 10036 C E-mail: gregg.galardi@ropesgray.com robb.tretter@ropesgray.com About In-Shape Health In-Shape is a regional health club operator. Before the outbreak of COVID-19, In-Shape operated 65 clubs with over 470,000 members. Its clubs offer premium amenities and member-focused community club experiences at tiered pricing levels in secondary markets around California. Visit https://www.inshape.com/ for more information. In 2012, Fremont Group purchased 78% of the Company from the Rothbards and their co-investors. Fremont Group remains the majority equity owner of ISHC. In-Shape Holdings, LLC, and two affiliates, including In-Shape Health Clubs, LLC, sought Chapter 11 protection (Bankr. D. Del. Case No. 20-13130) on Dec. 16, 2020. In-Shape Holdings was estimated to have $50 million to $100 million in assets and $100 million to $500 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein oversees the cases. The Debtors tapped KELLER BENVENUTTI KIM LLP as bankruptcy counsel; TROUTMAN PEPPER HAMILTON SANDERS LLP as local bankruptcy co-counsel; and CHILMARK PARTNERS, LLC as investment banker. B. RILEY FINANCIAL, INC., is the real estate advisor. Stretto is the claims agent. INGEVITY CORPORATION: Fitch Affirms BB LT IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating of Ingevity Corporation at 'BB.' Fitch has also affirmed the company's senior secured term loan and revolving credit facility at 'BB+'/'RR1' and its senior unsecured notes at 'BB'/'RR4'. Fitch has also withdrawn its rating on the company's term loan due 2022. The Rating Outlook is Stable. The ratings reflect the company's relatively modest size, strong margins owing to technological and market leadership in activated carbon for auto emissions control, elevated exposure to cyclical end-markets and its generally modest leverage. The company has shown its ability to reduce expenditures in a weakened environment and preserve its profit margins owing to its improving diversification, which allows for consistent strong FCF. The Stable Outlook reflects Fitch's expectations total debt/EBITDA will peak in 2020 around 3.5x but will trend to below 3.0x by 2022. Fitch believes that Ingevity will continue to allocate capital toward share repurchases and seek additional growth opportunities to boost scale and diversification but that the company will continue to do so in a balanced manner to remain within its targeted net leverage metrics of 2.0x-2.5x. Fitch assumes that any leveraging transaction will be followed up with a prioritization toward gross debt reduction back within management's targeted range. Fitch has withdrawn the company's term loan due 2022 as a result of repayment using proceeds from the October 2020 notes offering. KEY RATING DRIVERS Emissions Standards Benefit Materials: Gasoline vapor emissions regulation drives volume in the Performance Materials segment. Ingevity's high market share and technological leadership should enable the segment to sustain EBITDA margins over 40%. Recent U.S. and Canadian regulations will phase in control systems that better utilize higher margin activated carbon. Other regions are implementing increasingly stringent emission regulations, including Euro 6, China 6 and others. Fitch believes the increase in global emission regulations more than offsets reduced auto sales and the long-term threat of continued electric vehicle use. Ingevity's '844 patent' which covers certain canister systems designed to achieve gasoline vapor emissions levels that comply with the most stringent emission regulations is set to expire in March 2022. The company intends to defend its market position through short and long-term supply agreements and leveraging its global position and existing reputation with customers for reliability and driving innovation within emission control. This is highlighted by a newer family of patents that Ingevity holds, which are designed to reduce emissions in new, emerging "low purge" engines. Performance Chemicals Segment: Some of Ingevity's Performance Chemical (PC) segment products compete with petroleum and gum rosin products. Fitch's oil price outlook remains relatively modest through 2023, resulting in the potential for limited price appreciation for some PC products. However, the company has become more insulated from substitutes as it has continued to push toward more specialized product offerings through innovation and acquisitions, which is highlighted by improving segment EBITDA margins to 23% in 2019 from 13% in 2016. Fitch projects that segment revenue declines between 15%-20% in 2020, as resiliency in volumes into pavement technologies, agriculture and bioplastics somewhat offsets declines across oilfield technologies and general industrial but that overall segment margins remain around 23%. This highlights the company's shift toward higher-value applications. Fitch projects segment revenue will improve sequentially to 2019 levels by around 2022. Longer term, Fitch believes the segment maintains the potential for strong growth prospects, given the global shift toward sustainability and the renewable sources of Ingevity's products versus those based from petroleum, which could help deliver the sustainability initiatives of customers. Strong FCF Generation: Fitch's base case forecasts Ingevity generates approximately $150 million-$200 million of FCF through the ratings horizon. This is the result of strong EBITDA margins, limited working capital risk from supply agreements and relatively low capital intensity, with capital spending over the past four years averaging approximately 7% of sales. If the company is within its 2.0x-2.5x net leverage target, Fitch expects FCF to be allocated toward growth projects, both organic and inorganic, and share repurchases. Fitch believes the company will prioritize debt repayment to reach its target, following any additional leveraging transactions. Share Repurchase Program: In March 2020, the board authorized the repurchase of up to $500 million of common stock. The company repurchased approximately $32.4 million, as of Sept. 30, 2020, which leaves $467.6 million remaining available for repurchase. The program is fully discretionary and Fitch believes purchases will be modest until there is a clearer line of sight on economic recovery and while gross leverage is above 3.0x. DERIVATION SUMMARY Ingevity is smaller than specialty chemical peers with operational and financial profiles generally consistent with the 'BB' category, such as Axalta Coatings Systems Ltd., HB Fuller Company (BB/Stable) and W.R. Grace & Co. (BB+/Stable). Ingevity generally maintains a conservative capital structure with total debt/EBITDA generally around 3.0x compared with around 5.0x for HB Fuller and Axalta, and around 4.0x for WR Grace. Fitch expects Ingevity's total debt/EBITDA will be at around 3.5x in 2020 and trend to below 3x thereafter, consistent with management's pre-acquisition leverage target. Ingevity's EBITDA margins are forecast to be approximately 30% throughout the forecast, which compares with margins for WR Grace in the mid-high-20% range and Fuller and Axalta in the low-mid teens range. This is primarily due to Ingevity's market position in its Performance Materials segment, which consistently sees margins above 40%. However, Fitch believes the company's PF segment has a higher degree of exposure to cyclical end markets compared with peers. The company is strategically shifting towards higher value product offerings within its PC segment to reduce earnings volatility, as exemplified by recent acquisitions and product developments. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include -- Revenues decline around 13% in 2020 with sequential growth toward 2019 levels on a consolidated basis through 2022 and around 4% thereafter. -- Operating EBITDA margins around 30%-31% on average. -- Capex at guidance. -- Acquisitions of $100 million annually in 2021 and 2022. -- $150 million of 2026 notes redeemed in 2021. -- Excess cash flow applied to share repurchases when net leverage is within management target. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Adherence to a financial policy demonstrating a clear commitment to deleveraging to a total debt/EBITDA sustained below 2.5x; -- Increase in size and scale through organic and inorganic investments that further enhance the business profile and reduce cash flow risk through increased customer stickiness. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Deviation from financial policy resulting in total debt/EBITDA sustained above 3.5x. -- Capital allocation prioritization toward additional acquisitions or stock repurchases in favor of debt repayments. -- Substantial sustained EBITDA margin deterioration signaling increased cash flow risk or integration risk associated with future investments. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Pro forma for the note's issuance, Fitch expects the company to have approximately $198 million of cash and cash equivalents and full availability of its new $500 million revolving credit facility due 2025. Additionally, Fitch projects annual FCF generation to average over $150 million throughout the forecast, which should provide the company with adequate liquidity over the ratings horizon. 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 Environmental, Social and Corporate Governance (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. INGRAM MICRO: Moody's Reviews Ba1 CFR for Downgrade --------------------------------------------------- Moody's Investors Service placed all ratings of Ingram Micro Inc., including the Ba1 Corporate Family Rating, under review for downgrade. This action follows the announcement that Ingram Micro has entered into a definitive agreement to be acquired by funds of Platinum Equity. The transaction is valued at roughly $7.2 billion and is expected to close in the first half of 2021 subject to customary regulatory (antitrust, foreign investment) and shareholder approvals. Terms for the transaction have yet to be disclosed. On Review for Downgrade: Issuer: Ingram Micro Inc. Corporate Family Rating, Placed on Review for Downgrade, currently Ba1 Probability of Default Rating, Placed on Review for Downgrade, currently Ba1-PD Issuer: Ingram Micro Inc (old) Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently Ba1 (LGD4) Outlook Actions: Issuer: Ingram Micro Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings review will focus on the sources of funding, financial leverage, and ultimate capital structure resulting from the leveraged buy-out. Financial policy, liquidity, the company's business strategy, and deleveraging plans will also be key considerations. The review for downgrade is based on the expectation that Ingram Micro will have higher financial leverage following the acquisition given the private equity buyout. Moody's expects existing unsecured notes will be fully repaid upon transaction closing. Ingram Micro benefits from its market position as the world's largest broadline technology distributor by revenue. Typical of IT distributors, Ingram Micro's low margin business necessitates maintaining a conservative financial policy and very good liquidity to fund growth investments, including new solutions offerings, as well as to maintain favorable commercial terms with the largest IT vendors. Moody's expects revenues will grow in the low single digit percentage range or better over the next year. Operating margins of 1.9% and adjusted debt to EBITDA of 1.7x as of September 2020 are improved compared to last year. Ingram Micro, with projected annual revenues of roughly $47 billion, is the largest global information technology wholesale distributor (by revenue) providing sales, marketing, and supply chain solutions. The company operates in 60 countries and offers various IT products, including peripherals, systems, networking, software, logistics, data capture, point-of-sale, and high-end home technology products, mostly focused on the small and medium-size business market. HNA Technology, a subsidiary of HNA Group (less than 100% owned), acquired Ingram Micro in December 2016. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. INNOVATION PET: RS1 Innovation Buying All Assets for $500K ---------------------------------------------------------- Innovation Pet, Inc., asks the U.S. Bankruptcy Court for the Central District of California to authorize the sale of substantially all assets to RS1 Innovation Pet, Inc. or its affiliate pursuant to the Asset Purchase Agreement, for $500,000 or to such other person or entity submitted the highest or otherwise best qualified bid for the assets. Prior to the Petition Date, all efforts were made to sell the Debtor's business through brokers, investment firms and directly to competitors. The shareholders of the Debtor, having already contributed over $500,000 in capital to the Debtor, were not willing or able to contribute additional capital given the financial condition of the Debtor. By July 2020, the Debtor felt it had exhausted its options to find a buyer or investor and had resigned itself to the notion that the business was not salvageable and had no choice but to wind down and dissolve. It was working in that direction when the Stalking Horse Bidder emerged as a potential buyer and presented an opportunity to preserve the Debtor's going concern value. In August 2020, the Stalking Horse Bidder submitted a letter of intent for a purchase price of $250,000 subject to completing its due diligence. The Debtor was able to negotiate an increase in the purchase price to $500,000. The Debtor will post the sale of the Assets on the Court's website. It will also provide information on the sale to 20 or more other contacts that the Debtor believes might have an interest in the sale. Finally, the Debtor will post information on the sale on DailyDAC, which is a company that advertises the sale of distressed companies, and is contemplating advertising the sale in the LA Times or other news publication. The Secured Creditors have approved an advertising budget of $5,000. In addition to the foregoing, the Debtor's counsel has posted the sale opportunity on its website and sent an email to its entire data base of clients and others which is over 2,000 parties including several financial institutions, lenders, investors, private equity firms and professionals. At least seven days prior to the hearing on the Sale Motion, the Debtor will file a supplement regarding its further marketing efforts along with copies of the various emails, postings and advertisements. On April 15, 2014, Plaza Bank which was later acquired by Pacific Premier Bank, as lender, and Victoria M. Coopman, Timothy S. Taft, Raymon A. Clubb and Antoinette P. Clubb, as borrower, entered into a Promissory Note and Commercial Security Agreement in the principal amount of $150,000 which was guaranteed and secured by the assets of the Debtor. On April 17, 2014, the Bank filed a UCC-1 financing statement as Document No. 147408153922 and on Nov. 21, 2018, filed a Continuation of such UCC-1 financing statement as Document No. 1876839231. On Jan. 27, 2015, the Bank, as lender, and the Debtor, as borrower, entered into a Promissory Note and Commercial Security Agreement in the principal amount of $250,000. On Jan. 30, 2015, the Bank filed a UCC-1 financing statement as Document No. 157448171149 and on Aug. 6, 2019, filed a Continuation of such UCC-1 financing statement as Document No. 1977267429. The Bank has first priority valid and perfected liens in substantially all assets of the Debtor. On Dec. 21, 2015, CapFlow Funding Group Managers, LLC and the Debtor entered into a Factoring and Security Agreement pursuant to which CapFlow agreed to finance certain of the Debtor's receivables. As part of such Factoring and Security Agreement, CapFlow and the Debtor entered into a Purchase Order Assignment Agreement on Dec. 21, 2015. CapFlow filed its UCC-1 financing statement on Dec. 16, 2015. The Debtor believes that CapFlow has been paid in full but CapFlow continues to collect its receivables and asserts it is owed at least $1 million. Further, it believes that CapFlow has failed to pay PMW as it is obligated to do under the November 2019 Intercreditor Agreement. Capital 2 Thrive ("C2T") asserts a lien against certain of the Debtor's assets pursuant to a Purchase Order Finance Agreement between the Debtor and C2T dated Oct. 19, 2016 and UCC-1 financing statement filed on Oct. 19, 2016 as Document No. 167551592900 and amended on Oct. 25, 2016 as Document No. 1675526303. C2T asserts it is owed approximately $20,000. On June 17, 2019, the Debtor and PMW, LLC entered into a Purchase Order Finance Agreement. PMW filed its UCC-1 financing statement filed on Aug. 22, 2019 as Document No. 197729283139. As a result of PMW's agreement with the Debtor, the Bank, CapFlow, and PMW entered into an Amended and Restated Intercreditor Agreement dated Aug. 21, 2019. The Bank, CapFlow and PMW then entered into an Intercreditor Agreement dated Nov. 12, 2019. Pursuant to the terms of the Intercreditor Agreement, when certain of the Debtor's purchase orders (which are financed by PMW) turn into a receivable, CapFlow must pay PMW the amount of the purchase order and then CapFlow takes the receivable as a factor. In turn, the Bank agreed that its security interest in the collateral of CapFlow and PMW specified in the Intercreditor Agreement would be subordinate to such security interests of CapFlow and PMW. Finally, the Internal Revenue Service asserts a secured lien against the Debtor's assets. The Debtor believes the IRS is owed approximately $5,000. As such, the IRS has a fifth priority security interest in the Debtor's assets. The Debtor intends to sell substantially all of the Debtor's assets to the Stalking Horse Bidder. The sale will be of all of the Estate's right, title, and interest in all of the Debtor's inventory, furniture, fixtures, equipment, machinery, furnishings, patents, trademarks, all intangible assets and all other assets necessary to and part of the Debtor's business. Under the APA, the Stalking Horse Bidder will purchase the Purchased Assets for a purchase price of $500,000. The only remaining assets that will not be sold to the Stalking Horse Bidder include very specific intellectual property rights owned by a shareholder of the Debtor, avoidance actions, receivables and any claims against CapFlow. On Nov. 20, 2020, the Debtor filed its Sale Procedure Motion, whereby it sought approval of the bidding procedures. At the hearing on Nov. 24, 2020, the Court granted the Sale Procedure Motion. On Dec. 3, 2020, the Court entered the Bidding Procedures Order. The Debtor will conduct the auction pursuant to the Bidding Procedures and break-up fee already approved by the Court as set forth in the Bidding Procedures Order, which will govern the bidding on the Assets. The Debtor asks authority to sell the Assets free and clear of any and all liens, with any Liens and Encumbrances against the Assets to attach to the sale proceeds. It expects that prior to the hearing on the Sale Motion, it will have the consent of all or most of the Secured Creditors to the sale free and clear of their liens. The Debtor also asks authority to assume executory contracts and unexpired leases identified in the APA, and assign such Assumed Contracts to the Successful Bidder as part of the orderly transfer of the Assets. It asks the Court approves a surcharge of the Secured Creditors' collateral for the fees and costs expended by the Debtor and its professionals, the Subchapter V Trustee, and to advertise the sale, to preserve the Assets for the benefit of the Secured Creditors. Finally, the Debtor believes that the exigent circumstances which require a prompt closing of the sale provide cause to eliminate or shorten the time for the effectiveness of the order under Rules 6004(g) and 6006(d). The circumstances of the case militate in favor of allowing the transaction contemplated by the APA to close as soon as possible. Accordingly, the Debtor asks that the Court orders that the sale may be effectuated immediately upon entry of the order. A hearing on the Motion is set for Jan. 7, 2020 at 1:30 p.m. Objections, if any, must be filed 14 days prior to the hearing date. A copy of the APA is available at https://bit.ly/3aov0FW from PacerMonitor.com free of charge. The Purchaser: RS1 INNOVATION PET, INC. 1732 Wazee Street, Suite 202 Denver, CO 80202 Attn: Ingrid Alongi E-mail: ingrid@restagefund.com The Purchaser is represented by: SK&S LAW GROUP LLP 1616 17th St., Suite 564 Attn: Thomas Codevilla E-mail: Codevilla@skandslegal.com About Innovation Pet Innovation Pet, Inc. -- https://www.innovationpet.com/ -- is a pet products company that offers innovative products that meet the needs and solves problems for pets and their caring guardian. The Company's products include chicken coops, coop odor eliminator, coop nesting & cleaning, dog houses, hutches & cottontails, hutch odor eliminator, duck houses, and cat & dog treats, toys & litter treatment. Innovation Pet, Inc. sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 20-13223) on Nov. 19, 2020. In the petition signed by Victoria Coopman, CEO, the Debtor disclosed total assets of $1,085,209 and and total debt of $3,364,179. The case is assigned to Judge Scott C. Clarks. The Debtor tapped James C. Bastian, Jr., Esq., and Melissa Davis Lowe, Esq., at Shulman Bastian Friedman & Buii LLP, as counsel. INTELLIPHARMACEUTICS INT'L: Changes Venue for Annual Meeting ------------------------------------------------------------ Intellipharmaceutics International Inc. announced that, due to the ongoing COVID-19 pandemic, it is changing the venue for its Annual General Meeting scheduled to be held on Dec. 23, 2020, beginning at 11.30 a.m. (Toronto time). The change in venue of the AGM is due to increased government public health restrictions on the number of persons permitted in an indoor meeting in Halton Region where the original venue (the Holiday Inn Oakville) is located. The new venue for the AGM is the Casablanca Hotel, located at 4 Winward Drive, Grimsby, Ontario, L3M 4E8, Canada. The time and date of the AGM remains unchanged. All municipal, provincial and federal restrictions relating to social gatherings will be adhered to in connection with the AGM and, as a result, the meeting format or venue may change, attendees may not be permitted to enter the meeting if the applicable limit is reached, or the meeting may be postponed or canceled depending on conditions at the time of the meeting. As a result of the uncertainties and public health risks relating to the ongoing COVID-19 pandemic, management urges shareholders to vote by proxy and to not plan on attending the AGM in person. Registered shareholders of record as of Nov. 9, 2020 must submit their duly completed proxies to its transfer agent, AST Trust Company (Canada) by 11:30 a.m. (Toronto time) on Monday, Dec. 21, 2020, or 48 hours (excluding Saturdays, Sundays and statutory holidays) before the commencement of any adjourned or postponed meeting. About Intellipharmaceutics Intellipharmaceutics International Inc. is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs. The Company's patented Hypermatrix technology is a multidimensional controlled-release drug delivery platform that can be applied to a wide range of existing and new pharmaceuticals. Intellipharmaceutics has developed several drug delivery systems based on this technology platform, with a pipeline of products (some of which have received FDA approval) in various stages of development. The Company has ANDA and NDA 505(b)(2) drug product candidates in its development pipeline. These include the Company's abuse-deterrent oxycodone hydrochloride extended release formulation ("Oxycodone ER") based on its proprietary nPODDDS novel Point Of Divergence Drug Delivery System (for which an NDA has been filed with the FDA), and Regabatin XR (pregabalin extended-release capsules). MNP LLP, in Toronto, Ontario, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Feb. 28, 2020, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. JACOBSON HOTELS: Subchapter V Trustee Hires KenWood as Accountant ----------------------------------------------------------------- Jarrod B. Martin, the Subchapter V Trustee of Jacobson Hotels, Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ KenWood & Associates, P.C., as accountant to the Trustee. The Trustee requires KenWood & Associates to: a) prepare any necessary federal and state income, payroll, sales, franchise and excise tax returns and reports of the bankruptcy estate; b) provide evaluations and advice to Trustee on tax matters which may arise, including the determination of the tax basis of estate assets and the evaluation of the tax effects of the sale of assets of the estate; c) locate, obtain, inventory and preserve the accounting, business and computer records of the Debtors for use in performing the tasks assigned to the Firm and in Trustee's administration of the estate; d) analyze the Debtor's books and records and financial transactions regarding possible fraudulent, post-petition and/or preferential transfers to which the estate may be entitled to a recovery; e) analyze the books and records and financial transactions of entities and individuals to which the Debtors are related, may be related or may have been related at some prior date to determine the value of any assets and existence of possible fraudulent transfers to which the estate may be entitles to a recovery; f) assist with the preparation of monthly, quarterly, or other U.S. Trustee reports, as required; and g) assist the Trustee as an accountant and/or expert witness in litigation of the estate, assist in examinations and discovery under Federal Rule of Bankruptcy Procedure 2004 and the Federal Rules of Civil Procedures and to prepare any required expert reports related to litigation matters. KenWood & Associates will be paid at these hourly rates: Accountants $130 to $285 Staffs $80 KenWood & Associates will also be reimbursed for reasonable out-of-pocket expenses incurred. David E. Bott, a partner of KenWood & Associates, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. KenWood & Associates can be reached at: David E. Bott KenWood & Associates, PC 14090 Southwest Freeway, Suite 200 Sugar Land, TX 77478 Tel: (281) 243-2300 About Jacobson Hotels Jacobson Hotels, Inc., based in Shenandoah, TX, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-33957) on Aug. 4, 2020. In the petition signed by Grace L. Jacobson, director, the Debtor disclosed $5,757,149 in assets and $3,850,120 in liabilities. The Hon. Jeffrey P. Norman presides over the case. DEVINE LAW FIRM, PC, serves as bankruptcy counsel to the Debtor. JAMES M. THOMPSON: Plan Confirmed After Estero Objection Resolved ----------------------------------------------------------------- Judge Caryl E Delano has entered an order confirming James M. Thompson Enterprises, Inc., et al.'s Revised Amended Joint Plan of Reorganization and approving the Revised Amended Joint Disclosure Statement on a final basis. The only objection to the Plan, filed by Estero Ridge, LLC, has been resolved as set forth in the Order Granting Motion To Assume Unexpired Leases of Nonresidential Real Property, whereby the Debtors are directed to satisfy Estero Ridge's Cure Claim (in the amount of $54,644) 90 days of the Effective Date of the Plan. Class 12, the General Unsecured Impaired Claims Class, voted to accept the Plan. Huntington Bank initially voted to reject the Plan as part of its participation in Class 12, but withdrew its ballot on the record at the hearing. The only other class that voted on the Plan (Huntington's Secured Claim in Class 2), voted to reject the Plan. Pursuant to Section 1126(f) of the Bankruptcy Code, any class of claims which is unimpaired under the Plan are deemed to have accepted the Plan and the votes of those parties need not be solicited. The Debtors will make distributions under the Plan to their creditors in accordance with the distribution schedule, annexed as Exhibit A to the Plan Confirmation order. A copy of the Plan Confirmation Order is available at https://bit.ly/3muDgXk About James M. Thompson Enterprises James M. Thompson Enterprises, Inc., is the parent company of several entities. James M. Thompson, Jr. controls the majority ownership in all of the companies by way of his ownership of JMTE. On Oct. 1, 2019, JMTE and five affiliates filed Chapter 11 bankruptcy petitions (Bankr. M.D. Fla. Lead Case No. 19-09351) in Fort Myers, Florida. JMTE was estimated to have assets of not more than $50,000 and liabilities of between $500,000 and $1 million. The affiliates are James M. Thompson One, LLC (Case No. 19-09353); James M. Thompson Two, LLC (Case No. 19-093540; James M. Thompson Three, LLC (Case No. 19-09355); James M. Thompson Four, LLC (Case No. 19-093570; and James M. Thompson Cape Coral, LLC (Case No. 19-09358). Dal Lago Law is the Debtor's legal counsel. KAYA HOLDINGS: To Effect 1-for-15 Reverse Stock Split ----------------------------------------------------- Kaya Holdings, Inc. announced that FINRA has approved a 1-for-15 Reverse Split of the Company's common stock. As a result, every 15 pre-Reverse Split shares of common stock outstanding will automatically combine into one new share of post-Reverse Split common stock without any action on the part of the holders. Craig Frank, CEO of KAYS, commented, "We have taken this positive step to reduce the number of outstanding shares of KAYS common stock which we anticipate will help to enhance liquidity, maximize valuation, and make the Company more attractive to potential investors of all sizes, particularly institutional and international investors." The Company's common stock begins trading on a post-Reverse Split basis at the opening of trading on Tuesday, Dec. 15, 2020. In connection therewith, the Company's ticker symbol will be KAYSD for 20 trading days to designate that it is trading on a post-Reverse Split basis. In addition, the Company's post-Reverse Split common stock will trade under the new CUSIP Number 486567 209. Following the Reverse Split, the number of shares of the Company's issued and outstanding common stock will have been reduced from 213,960,112 to approximately 14,264,008. The Reverse Split will also apply to shares of common stock issuable upon the exercise of outstanding warrants and stock options and the conversion of outstanding promissory notes and shares of Series C Preferred Stock. No fractional shares will be issued as a result of the Reverse Split. Any fractional shares resulting from the Reverse Split will be rounded up to the nearest whole share on a per stockholder basis. The Company expects that stockholders holding shares of KAYS common stock at registered brokerage firms or at the transfer agent will have the Reverse Split transaction processed automatically in their accounts over the next few days. Stockholders holding physical stock certificates may request new certificates evidencing their post-Reverse Split shares by contacting the Company's transfer agent, Pacific Stock Transfer, at either info@pacificstocktransfer.com or 1-800-785-7782. About Kaya Kaya Holdings, Inc. -- http://www.kayaholdings.com-- is a vertically integrated legal marijuana enterprise that produces, distributes, and/or sells a full range of premium cannabis products including flower, oils, vape cartridges and cannabis infused confections, baked goods and beverages through a fully integrated group of subsidiaries and companies supporting highly distinctive brands. As of Sept. 30, 2020, the Company had $2.54 million in total assets, $30.73 million in total liabilities, and a total stockholders' deficit of $28.18 million. M&K CPAS, PLLC, in Houston, TX, the Company's auditor since 2018, issued a "going concern" qualification in its report dated May 13, 2020, citing that the Company has suffered net losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. KB US HOLDINGS: Bankruptcy Plan Okayed for Creditor Vote -------------------------------------------------------- Alex Wolf of Bloomberg Law reports that KB US Holdings Inc. won court approval to circulate a bankruptcy liquidation plan stemming from a $96.4 million sale of the company. Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York approved the adequacy of disclosures in KB's Chapter 11 plan during a telephonic hearing Dec. 17, 2020. The company has proposed to liquidate by distributing proceeds from its sale of grocery chains Balducci's Food Lover's Market and Kings Food Markets to ACME Markets Inc. Secured lenders, owed about $111 million, are the only creditors voting on the wind-down proposal. About KB US Holdings KB US Holdings, Inc. is the parent company of King Food Markets and Balducci's Food Lover's Market. Headquartered in Parsippany, N.J., Kings Food Markets has been a specialty and gourmet food market across the East Coast. In 2009, Kings Food Markets acquired specialty gourmet retail grocer, Balducci's Food Lover's Market. As of the petition date, the Debtors operate 35 supermarkets across New York, New Jersey, Connecticut, Virginia, and Maryland. KB US Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22962) on Aug. 23, 2020. The petitions were signed by CEO Judith Spires. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Sean H. Lane oversees the cases. The Debtors tapped Proskauer Rose LLP as their legal counsel; PJ Solomon, L.P. and PJ Solomon Securities, LLC, as investment banker; Ankura Consulting Group LLC as financial advisor; and Prime Clerk LLC as claims, noticing and solicitation agent. LEAFCEAUTICALS INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Leafceauticals, Inc. Arlington Heights Finance Station PO Box 470458 3101 West 6th Street Fort Worth, TX 76147-9998 Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43816 Debtor's Counsel: Robert A. Simon, Esq. WHITAKER CHALK SWINDLE AND SCHWARTZ 301 Commerce St. Ste 3500 Fort Worth, TX 76102 Tel: 817-878-0500 Email: rsimon@whitakerchalk.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Carlos Frias, chief executive officer. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5OYYVBQ/Leafceauticals_Inc__txnbke-20-43816__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5C3YH7A/Leafceauticals_Inc__txnbke-20-43816__0001.0.pdf?mcid=tGE4TAMA LRGHEALTHCARE: Concord Is Sole Bidder for 2 Hospitals ----------------------------------------------------- Rick Green of The Laconia Daily Sun reports that Concord Hospital is the sole health care institution interested in acquiring Lakes Region General Hospital, Franklin Regional Hospital and the hospitals' ambulatory sites through Chapter 11 bankruptcy proceedings, LRGHealthcare President and CEO Kevin Donovan said Tuesday, December 15, 2020. "While LRGHealthcare received significant interest from other parties, no other party submitted a bid by the deadline," Donovan said. "We have always felt that Concord Hospital is a natural fit to ensure the continued provision of excellent care in the Lakes and Three Rivers Region, and we are excited about this step forward." LRGHealthcare has filed a motion in federal bankruptcy court to cancel a bankruptcy auction set for Wednesday, December 16, 2020. Multiple bidders present offers at such an auction, but it will not be needed as Concord Hospital has emerged as the only bidder. The next step will be a sale hearing where a final order will be issued by the court. Once the parties are granted a final order, they can begin the process of seeking approval from regulatory agencies, including the New Hampshire Attorney General’s office and the New Hampshire Department of Health and Human Services. "We are encouraged by the prospect of preserving access to local, high-quality health care for years to come. As we continue to move forward with the necessary approvals, nothing changes for LRGHealthcare employees or patients. There is still more work to be done to finalize Concord Hospital’s acquisition, but we are moving forward in the right direction," said Donovan. President and CEO Robert P. Steigmeyer said the fact that there are no additional bidders for the assets of LRGHealthcare is positive news for the creation of a sustainable community health system for the region. "Today, Concord Hospital is one step closer to assuring community-based care for people in the Lakes and Three Rivers regions," he said. "We look forward to completing the purchase and getting to work on that goal." LRGHealthcare and Concord Hospital expect to complete this process in 2021. LRGHealthcare filed for Chapter 11 protection under federal bankruptcy laws on Oct. 19, 2020 citing more than $100 million in debt. The move came after two years of efforts by LRGH to solve its financial problems through a merger or acquisition. The health care system has 1,400 full- and part-time employees and is the largest employer in the Lakes Region. Even before the impact of COVID-19, LRGHealthcare was on an unsustainable path, consistently losing $1 million a month and hindered by the burden of servicing its large debt. The court will approve a plan for relieving debt, chiefly a $111 million facility mortgage owed to Key Bank and insured by the U.S. Department of Housing and Urban Development. Concord Hospital has made an initial bid of $30 million for these assets, including the two hospitals and the system’s ambulatory care centers. That bid was less than half of the $72 million assessed value of Lakes Region General Hospital and Franklin Regional Hospital. A sale hearing was set in U.S. Bankruptcy Court for Dec. 21, 2020. Concord Hospital and LRGHealthcare arrived at an asset purchase agreement that was filed in bankruptcy court on Oct. 19 and set the purchase price at $30 million. Concord Hospital was the so-called "stalking horse." LRGHealthcare and Concord Hospital are both not-for-profit institutions. They already collaborate in various health care areas. Steigmeyer said that under the proposed acquisition, Concord Hospital's Board of Trustees would include representatives from the Three Rivers and Lakes Region. He also said that Concord Hospital would assume pension liability and staffing would be maintained. About LRGHealthcare LRGHealthcare -- http://www.lrgh.org/-- is a not-for-profit healthcare charitable trust operating Lakes Region General Hospital, Franklin Regional Hospital, and numerous other affiliated medical practices and service programs. LRGH is a community based acute care facility with a licensed bed capacity of 137 beds, and FRH is a 25-bed critical access hospital with an additional 10-bed inpatient psychiatric unit. In 2002, Lakes Region Hospital Association and Franklin Regional Hospital Association merged, with the merged entity renamed LRGHealthcare. LRGHealthcare offers a wide range of medical, surgical, specialty, diagnostic, and therapeutic services, wellness education, support groups, and other community outreach services. LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No. 20-10892) on October 19, 2020. The petition was signed by Kevin W. Donovan, president and chief executive officer. At the time of the filing, the Debtor estimated to have $100 million to $500 million in both assets and liabilities. Judge Bruce A. Harwood oversees the case. The Debtor tapped Nixon Peabody LLP as counsel; Deloitte Transactions and Business Analytics LLP and Kaufman, Hall & Associates, LLC as financial advisors; and Epiq Corporate Restructuring, LLC as claims, noticing, solicitation, and administrative agent. MAJESTIC HILLS: Plan Filing Deadline Extended to Feb. 15 -------------------------------------------------------- Debtor Majestic Hills, LLC. filed with the U.S. Bankruptcy Court for the Western District of Pennsylvania a motion for order extending the deadline to file a Disclosure Statement and Confirming a Plan of Reorganization and Disclosure Statement. On Dec. 3, 2020, Judge Gregory L. Taddonio granted the motion and ordered that: * The deadline to file a Disclosure Statement is extended to Feb. 15, 2021. * The Debtor's exclusive right to file a chapter 11 plan is extended to Feb. 15, 2021. * The Debtor's exclusive right to obtain acceptance of said plan is extended to April 16, 2021. A full-text copy of the order dated Dec. 3, 2020, is available at https://tinyurl.com/y26dut62 from PacerMonitor at no charge. The Debtor is represented by: Donald R. Calaiaro, Esq. Calaiaro Valencik 938 Penn Avenue, 5th Fl., Suite 501 Pittsburgh, PA 15222 Tel: 412-232-0930 E-mail: dcalaiaro@c-vlaw.com About Majestic Hills Majestic Hills, LLC, a privately held company based in Bridgeville, Pa., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 20-21595) on May 21, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Gregory L. Taddonio oversees the case. The Debtor is represented by Calaiaro Valencik. MALLINCKRODT PLC: S&L et al. Advise School District Class Claimants ------------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Stevens & Lee, P.C., Hughes Socol Piers Resnick & Dym, Ltd., Mehri & Skalet, PLLC, Terell Hogan, P.A., and Henrichsen Law Group, PLLC submitted a verified statement to disclose that they are representing the School District Class Claimants in the Chapter 11 cases of Mallinckrodt PLC, et al. S&L and its Cocounsel represent The Board of Education of Chicago Public Schools, District No. 299, the other public school districts identified in Exhibit A hereto, and such other school districts as may subsequently join this action as parties, in their individual and representative capacities in their putative class action pending in the United States District Court for the Northern District of Ohio as Case No. 1:19- op-46042-DAP, which has been and remains stayed in connection with In re National Prescription Opiate Litigation, No. 1:17-md-2804. The School District Class Action seeks to hold manufacturers and distributors of opioids, as well as pharmacies, liable for their role in creating the opioid epidemic. As a result, School Districts will be asserting claims in one or more of the Debtors' cases under the Bankruptcy Code on behalf of the School District Class Claimants. The School Districts seek to represent a class of approximately 13,000 public school districts nationwide in asserting claims against the Opioid Defendants to recover damages for the cost of providing special education services to students who were exposed to opioid in utero. Children who are exposed to opioids in utero—including those born with Neonatal Abstinence Syndrome (NAS)—often suffer permanent physiological and cognitive injuries. These children face a lifetime of difficulties, particularly because they are at a significantly heightened risk of developing serious—and permanent—behavioral and cognitive disabilities. Since the onslaught of the opioid epidemic, the rates of hospital NAS diagnoses—which severely undercount the number of children who are born with prenatal opioid exposure—have been exponentially rising. Rates of children diagnosed with prenatal opioid exposure more than quadrupled between 1999 and 2014. These rates show no signs of slowing, especially because the Covid-19 pandemic has effectively erased any previous progress in ameliorating ramped opioid use. The first birth cohorts of children born during the onslaught of the opioid epidemic more than twenty years ago have now made their way through school, and public schools throughout the nation have seek the impact. Public schools will continue to suffer damages well into the future. Indeed, a child born today with prenatal opioid exposure will attend public school from approximately 2025-2043. The School Districts have a vital role to play in addressing the opioid crisis by providing special education to children born with prenatal opioid exposure. Indeed, by statutory mandate, they have been providing special education and related services since the passage of the Education for all Handicapped Children Act of 1975. School Districts are in a superior position to provide direct, remediating services to abate the devastating effects of the opioid epidemic on children None of the School Districts has any "disclosable economic interest" other than as disclosed in the preceding paragraphs. The Board of Education of Chicago Public Schools District No. 299 Miami-Dade County Public School District Baltimore Public School District Rochester Public School District Minnetonka Public School District Illinois * East Aurora Public Schools, District 131 * Thornton High Schools, District 205 * Thornton Fractional High Schools, District 215 * Joliet Public Schools, District 86 Kentucky * Fayette County Public Schools * Larue County Public Schools * Bullitt County Public Schools * Breathitt County Public Schools * Estill County Public Schools * Harrison County Public Schools * Hart County Public Schools * Jefferson County Public Schools * Johnson County Public Schools * Lawrence County Public Schools * Martin County Public Schools * Menifee County Public Schools * Owsley County Public Schools * Wolfe County Public Schools Maine * Bangor School Department * Cape Elizabeth School District * Maine Regional School Unit 10 * Maine RSU 13 * Maine RSU 25 * Maine RSU 26 * Maine RSU 29 * Maine RSU 34 * Maine RSU 40 * Maine RSU 50 * Maine RSU 57 * Maine RSU 60 * Maine RSU 71 * Maine RSU 9 * Maine School Administrative District 11 * Maine SAD 15 * Maine SAD 28/Five Town Central School District * Maine SAD 35 * Maine SAD 44 * Maine SAD 53 * Maine SAD 55 * Maine SAD 6 * Maine SAD 61 * Maine SAD 72, 9 * Portland School District * Scarborough School District * South Portland School District * St. George Municipal School District * Waterville School District * Ellsworth School Department New Hampshire * Goshen School District * Kearsarge RSU School -- Administrative Unit 65 * Lebanon School District * Pittsfield School District * Tamworth School District New Mexico * Eunice Public Schools * Gallup-Mckinley Public Schools S&L and different cocounsel currently represent a putative class of purchasers of and participants in private health insurance plans who have asserted claims against the Opioid Defendants. See D. I. 29. S&L and both sets of its cocounsel believe that there is no conflict presented by representing both putative classes, and both classes will benefit from counsel's extensive experience in the bankruptcies of several of the Opioid Defendants. Those representations have been disclosed to the lead plaintiffs for both cases and they do not object to this representation. Other than as disclosed herein, S&L and its Cocounsel do not currently represent or claim to represent any other entity with respect to any of the Debtors' cases under the Bankruptcy Code and do not hold any claim against or interest in any of the Debtors or any of the Debtors' estates. Counsel to the School Districts in their Individual Capacities and as Representatives of the Putative Class of the "School District Class Claimants" that They Propose to Represent can be reached at: Joseph H. Huston, Jr., Esq. David W. Giattino, Esq. STEVENS & LEE, P.C. 919 North Market Street, Suite 1300 Wilmington, DE 19801 Tel: (302) 425-3310 (302) 425-2608 Fax: (610) 371-7972 (610) 371-7988 E-mail: jhh@stevenslee.com dwg@stevenslee.com Nicholas F. Kajon, Esq. STEVENS & LEE, P.C. 485 Madison Avenue, 20th Floor New York, NY 10022 Tel: (212) 537-0403 (212) 537-0409 Fax: (610) 371-1223 (610) 371-1237 E-mail: nfk@stevenslee.com cp@stevenslee.com Matthew J. Piers, Esq. Charles D. Wysong, Esq. Emily R. Brown, Esq. Margaret Truesdale, Esq. HUGHES SOCOL PIERS RESNICK & DYM, LTD. 70 W. Madison Street, Suite 4000 Chicago, IL 60602 Tel: (312) 580-0100 Fax: (312) 580-1994 E-mail: mpiers@hsplegal.com cwysong@hsplegal.com ebrown@hsplegal.com mtruesdale@hsplegal.com Cyrus Mehri, Esq. Steve Skalet, Esq. Aisha Karsh, Esq. MEHRI & SKALET, PLLC 1250 Connecticut Ave., NW Washington, D.C. 20036 Tel: (202) 822-1500 Fax: (202) 822-4997 E-mail: cmehri@findjustice.com sskalet@findjustice.com jkarsh@findjustice.com arich@findjustice.com Wayne Hogan, Esq. Leslie Goller, Esq. TERELL HOGAN, P.A. 233 E. Bay Street, #804 Jacksonville, FL 32202 Tel: (904) 722-2228 Fax: E-mail: hogan@terrellhogan.com lgoller@terrellhogan.com Neil Henrichsen, Esq. Dawn Stewart, Esq. HENRICHSEN LAW GROUP, PLLC 1440 G. Street, NW Washington, D.C. 20005 Tel: (202) 423-3649 Fax: (202) 379-9792 E-mail: nhenrichsen@hslawyers.com dstewart@hslawyers.com A copy of the Rule 2019 filing is available at https://bit.ly/37BThGK at no extra charge. About Mallinckdrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. As of March 27, 2020, the Company had $10.17 billion in total assets, $8.27 billion in total liabilities, and $1.89 billion in total shareholders' equity. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware in the U.S. (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against the Company. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Latham & Watkins LLP, Ropes & Gray LLP and Wachtell, Lipton, Rosen & Katz are serving as counsel to the Company, Guggenheim Securities, LLC is serving as investment banker and AlixPartners LLP is serving as restructuring advisor to Mallinckrodt. Hogan Lovells is serving as counsel with respect to the Acthar Gel matter. Prime Clerk LLC is the claims agent. MANZANA CAPITAL: Unsecured Creditors to Recover 100% in Plan ------------------------------------------------------------ Manzana Capital, Inc., filed with the U.S. Bankruptcy Court for the Southern District of California a Plan of Reorganization and a Disclosure Statement on Dec. 10, 2020. Class 3 consists of General Unsecured Claims of Non-Affiliates totaling $32,490. In full satisfaction of their respective claims, each holder of an allowed Class 3 claim will receive payment in full immediately following the Effective Date. Class 4 consists of General Unsecured Claim of the State Tax Board. In full satisfaction of this claim, the claimant will receive monthly payments of $920.56 for a maximum of 60 months, the first to be paid one month following the Effective Date. Class 5 consists of General Unsecured Claim of Alberto Castanares. Mr. Castanares will receive a note for the full amount of the claim, $75,000, payable in 8 quarterly installments of $9,375, the first to be paid 3 months following the Effective Date. Mr. Arturo Castanares is the sole principal of the Debtor and also the sole officer and director of the Debtor. Alberto Castanares, a creditor, is the father of Arturo. Arturo will continue to be the sole officer and director of the reorganized debtor upon confirmation of the Plan. Since all creditors are to be paid in full, the equity interest holder will retain his current interest under the Plan. The Debtor has filed a motion to sell the real property located at 2504 C Street, San Diego, California for $900,000 subject to overbid. The hearing on the Motion is set for Jan. 14, 2021 at 2:00 p.m. These funds will be used to make all payments contemplated by the Plan except for payments to the Class 4 and Class 5 General Unsecured Creditors. Assuming the Motion to sell C Street is approved, and assuming the sale closes timely, the Debtor will have sufficient cash on hand to make all of the payments required under the Plan, except for the payments to the Class 4 and Class 5 creditors which will come from cash flow from consulting operations. A full-text copy of the Disclosure Statement dated Dec. 10, 2020, is available at https://bit.ly/2LPVKEX from PacerMonitor.com at no charge. Attorney for the Debtor: Daniel Masters P.O. Box 66 La Jolla, CA 92038 Telephone: (858) 459-1133 About Manzana Capital Manzana Capital, Inc., was incorporated in the State of Nevada on Dec. 30, 2010. It was incorporated to act as a holding company for real estate investments and to provide marketing consulting services to clients. Manzana Capital filed a Chapter 11 bankruptcy petition Bankr. S.D. Cal. Case No. 20-04045) on Aug. 10, 2020, disclosing under $1 million in both assets and liabilities. Daniel Masters, Esq., is the Debtor's legal counsel. MEGIDO SERVICE: Lone Creditor Offered Medallions, $250K in Plan --------------------------------------------------------------- Megido Service, Corp., submitted a Plan and a Disclosure Statement. The only creditor in the case, Pentagon Federal Credit Union, has been offered a surrender of the collateral and a $250,000 lump sum payment on the effective date of the Plan. The sole assets of the Debtor are the medallions numbers 1 Y 81 and 1 Y 82, the current estimated market value of which is $370,000. The Class 1 secured claim of PFCU in the amount of $370,000 will be deemed satisfied in full by the surrender of two NYC Taxi Medallions # 1 Y 81, 1 Y 82, the collateral for the loan. The Class 2 unsecured non-priority claim of PFCU in the amount of $548,976 will be paid as follows: a lump sum payment of $250,000 will be paid to PFCU on the Effective Date of the Plan in full settlement of the said deficiency claim. The Plan will be financed by a personal contribution, from the personal funds of the principal of the corporation. A full-text copy of the Disclosure Statement dated December 7, 2020, is available at https://bit.ly/37eXbFg from PacerMonitor.com at no charge. Attorney for the Debtor: ALLA KACHAN, ESQ. 3099 Coney Island Ave, 3rd Floor NY 11235 Tel: (718) 513-3145 Fax: (347) 342-315 E-mail: alla@cachanlaw.com About Megido Service Megido Service, Corp., sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 19-44944) on Aug. 15, 2019, estimating less than $1 million in both assets and liabilities. The LAW OFFICES OF ALLA KACHAN, P.C., is the Debtor's counsel. MICROCHIP TECHNOLOGY: Fitch Alters Outlook on BB+ LT IDR to Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB+' ratings on Microchip Technology, Inc.'s ratings, including the Long-Term Issuer Default Rating, and revised the Outlook to Stable from Negative. At the same time, Fitch has assigned a 'BBB-' rating with a Recover Rating of 'RR1' to Microchip's proposed senior secured notes, which will rank pari passu with its existing senior secured debt. Fitch expects the issuance to be leverage neutral, with Microchip using net proceeds to repay its higher-cost senior secured debt. This rating action affects $11.5 billion of total debt, including undrawn amounts under a revolving credit facility. The affirmation and Stable Outlook reflect Fitch's belief that Microchip is positioned for near-term revenue and profit growth, supported by strong bookings and backlog. This should enable sufficient free cash flow for debt reduction and lower leverage metrics to below Fitch's negative rating sensitivity. Microchip's end-market diversification allows it to benefit from a recovery in the automotive, industrial and consumer markets, which declined sharply during the early stages of the Covid-19 pandemic, and continued solid cloud and edge infrastructure demand. Fitch expects operating EBITDA margins are likely to stay flat but near-record levels in the mid-40% for the current and next fiscal year, with the normalization of operating expenses and investments to offset operating leverage, ongoing assembly and test internalization and footprint optimization. Fitch forecasts FCF margins will remain in the mid-20% as capital intensity returns to long-term target levels of 3%-4% of revenue after subdued capex as Microchip integrated Microsemi's footprint and amidst a weaker demand environment. KEY RATING DRIVERS Continued Deleveraging Priority: Microchip's public guidance that it will use almost all of its FCF to reduce debt until it achieves its 2.5x leverage target leads Fitch to forecast debt reduction of around $1.5 billion in each FY21 and FY22. Combined with its forecast for annual operating EBITDA of $2.5 billion over the two years on strong bookings and backlog, Fitch estimates that total debt/operating EBITDA will decline to roughly 3.5x within the next four quarters, from 4.5x in the 12 months to end September 30, 2020. Microchip used $2.9 billion of cumulative FCF since its 2018 acquisition of Microsemi Corporation to cut debt, reducing total debt to roughly $9.6 billion as of September 30, 2020. Nonetheless, deleveraging remains behind schedule due to the U.S./China trade war and the pandemic, leading to negative revenue growth in FY20 and 1HFY21. Fitch believes Microchip should achieve its 2.5x total leverage target in FY23. Pandemic Moderate Recovery Prospects: Fitch expects a recovery in the cyclical automotive, industrial and consumer markets, following a 1HFY21 drop in supply and demand due to the pandemic, and for cloud and edge infrastructure spending to remain solid after a short pause to digest robust 1HFY21 spending. Lingering supply constraints should support growth across end markets for at least the next two quarters. Nonetheless, the recent virus resurgence raises the risk of prolonged and intensified lockdowns, which moderates otherwise solid recovery prospects. Reduced Acquisition Activity: Fitch expects limited acquisitions, given Microchip's product breadth that enables total system solutions as a result of historical deals. Meanwhile, the company is focused on debt reduction, organic growth and optimizing its assembly and test and fabrication facilities. It also plans to use cash flow on shareholder returns upon achieving its 2.5x target leverage rather than industry consolidation, which continues unabated despite intensified regulatory scrutiny and expanded transaction multiples. Rich Revenue Diversification: Fitch expects Microchip's meaningful end market, product and customer diversification to drive steady operating results, despite still-cyclical end markets. The Microsemi acquisition increased communications, data center, computing, aerospace and defense end-market exposure, and added to already significant industrial end-market sales. The deal also strengthened Microchip's solution systems capabilities, high voltage-power management, high-reliability discretes, storage and field programmable gate array products, while reducing customer concentration. Comparatively High Operating Leverage: Fitch believes Microchip's higher mix of in-house manufacturing and assembly and test than peers drives comparatively higher operating leverage; as a result, Fitch expects profit-margin expansion with positive top-line growth. However, for the resumption of revenue growth in FY21, Fitch expects operating leverage to be offset by the normalization of operating expenses. Nonetheless, the realization of Microsemi acquisition-related cost synergies from the elimination of redundancies, integration of historical Microsemi deals and internalization of Microsemi's outsourced production has structurally boosted the profit margin. Recovery Rationale: Fitch notches up Microchip's secured debt by one notch to 'BBB-'/'RR1' due to its expectation of superior recoveries for first-lien debt, as the company's senior secured revolving credit facility, term loan and bonds are secured by substantially all assets of Microchip and its subsidiaries. DERIVATION SUMMARY Fitch believes Microchip is strongly positioned for its rating from an operating-profile perspective, given its leading share in growth markets, broad product set, which enables a long product life cycle, customized solutions and diversified customer base. This leads Fitch to expect top-line growth that exceeds the broader market and profitability that is more in-line with the 'BBB' category. A number of competitors are more highly rated, including Samsung Electronics Co., Ltd. (AA-/Stable) and NXP Semiconductors N.V. (BBB-/Stable), due to greater FCF scale and more conservative financial policies, including a greater focus on organic growth. Fitch expects Microchip to improve its credit-protection measures over the long term on higher annual FCF and the resumption of top-line growth, at which point Microchip should be positioned to migrate to investment grade. Fitch does not expect Microchip to meaningfully participate in industry consolidation, but to use cash flow for shareholder returns, given its full set of capabilities, elevated multiples and a less accommodative regulatory environment. KEY ASSUMPTIONS -- Revenue in 3QFY21 in-line with the company's mid-point of management's guidance and mid-single digit growth in 4QFY21, driven by strong bookings in spite of typical seasonality. -- Mid-single-digit revenue growth through to at least FY22, driven by a recovery in the more cyclical end markets, a resumption of growth in infrastructure spending as well as share gains. -- Longer-term growth in the low- to mid-single -digits on average. -- Gradual expansion of the gross profit margin as the company internalizes Microsemi's outsourced assembly and test and optimizes its manufacturing footprint. -- A normalization in opex in 2HFY21 to $1.3 billion-$1.4 billion over the medium term, up from the $1.2 billion annual run rate in the last two quarters due to salary reductions and other discretionary cost-saving measures. -- Capex to normalize to 3%-4% of revenue beginning in FY22. -- Substantially all FCF used for debt reduction until Microchip achieves its 2.5x leverage target, after which it will use cash flow for shareholder returns. -- Only small tuck-in acquisitions representing less than $50 million annually over the medium term. -- Low- to mid-single -digit dividend growth until the company achieves its leverage target. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Total debt/operating EBITDA at or below 2.5x in the near-term from continued use of FCF for debt reduction and revenue-growth-fueled profit-margin expansion. - Top line growth exceeding that of underlying markets, supporting the case for share gains and, therefore, faster profitability and cash flow growth from considerable operating leverage. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Microchip does not use substantially all of its FCF for debt reduction, resulting in expectations for total debt/operating EBITDA to remain above 3.5x. - Top line growth rate lags that of core end-market growth, resulting in slower than anticipated profitability and cash flow growth from considerable operating leverage in the company's model. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch expects Microchip's liquidity to remain adequate, which, as of September 30, 2020, was supported by $370 million of cash, cash equivalents and short-term investments and approximately $1.7 billion of remaining availability under the company's $3.6 billion revolving credit facility. Fitch's expectation for $1.0 billion-$1.5 billion of annual FCF also supports liquidity, although Microchip's FCF is slated for debt reduction until the company achieves its 2.5x total leverage target. ESG Considerations Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3. ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch made no material adjustments to Microchip's published financial statements. 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. MOORE TRUCKING: Agrees to Jan. 18 Deadline to Amend Disclosures --------------------------------------------------------------- In the Chapter 11 case of Moore Trucking, Inc., the U.S. Bankruptcy Court for the Southern District of West Virginia entered on Dec. 11, 2020, an agreed order denying a motion to dismiss the Chapter 11 case, and setting a Jan. 18 deadline for the Debtor to file an Amended Disclosure Statement and Plan of Liquidation. The U.S. Trustee filed a motion to convert the Chapter 11 case to one under Chapter 7 of the Bankruptcy Code or dismiss the Chapter 11 case. Following the preliminary hearing before the Court on the motion, counsel for the U.S. Trustee provided to the Debtor a list of basic administrative requirements that were meant to represent the minimum elements necessary for the United States Trustee to withdraw its motion to convert. The Debtor has complied with all of those requirements with the exception of the acquisition of insurance to protect estate property. However, while the obligation to have estate assets properly insured remains, counsel for the U.S. Trustee acknowledges that the Debtor and the Debtor's counsel have worked diligently to acquire the requisite insurance. Further, in addition to the Debtor's inability to meet the basic administrative responsibilities as expressed in the pending Motion, the U.S. Trustee has more general concerns about the lack of progress in the case and the potential that the lack of progress could prejudice estate constituents. Accordingly, because the issues complained of by the U.S. Trustee in the Motion to Convert have been substantially resolved, the United States Trustee and the Debtor agree and the Court finds the motion to dismiss to be MOOT and the United States Trustee's Motion to Dismiss is DENIED. However, in conjunction with this denial, the United States Trustee and the Debtor agree to these terms: 1. The Debtor will make arrangements to have the estate assets covered by adequate insurance to protect the value of the estate and shall provide proof of such insurance to the United States Trustee within three weeks of entry of this order. 2. On or before Jan. 11, 2021, the Debtor shall file either a) an agreement with A.R. Walters Inc. that resolves the dispute between the parties as to the title of certain assets that the Debtor references in its Disclosure Statement or b) a legal action that presents this dispute to the Court for adjudication. 3. On or before Jan. 18, 2021, the Debtor will file an Amended Disclosure Statement and Plan of Liquidation that includes, inter alia, all referenced exhibits, a liquidation analysis, and a complete description of the dispute with A.R. Walters Inc. along with contingency plans for both successful and unsuccessful outcomes of that dispute (if that dispute is not previously resolved). 4. If the Debtor does not meet any of the above deadlines, the Debtor acknowledges that the United States Trustee will be filing a new motion to convert or dismiss based on either, as applicable, the lack of insurance, 11 U.S.C. Sec. 1112(b)(4)(C), or the failure to file a disclosure statement and/or plan within a time fixed by order of the Court, 11 U.S.C. Sec. 1112(b)(4)(J). The Debtor agrees that this agreed order shall constitute a time fixed by the Court to file a disclosure statement and/or plan. 5. The Debtor further acknowledges that should the Court find that the Amended Disclosure Statement and Plan of Liquidation are not confirmable, the United States Trustee will immediately move to convert or dismiss this case. About Moore Trucking Moore Trucking Inc. filed a Chapter 11 bankruptcy petition (Bankr. S.D. W.Va. Case No. 20-20136) on March 31, 2020, disclosing under $1 million in both assets and liabilities. Judge Paul M. Black oversees the case. The Debtor is represented by James M. Pierson, Esq., at Pierson Legal Services. MOORE TRUCKING: Walter Questions Funding for Plan ------------------------------------------------- Debtor Moore Trucking, Inc., on Nov. 6, 2020, filed its Disclosure Statement. As of Dec. 7, 2020, Debtor has not filed its chapter 11 plan A.R. Walters Trucking, LLC and Arthur Randy Walters filed an objectiong to the Disclosure Statement. Walters points out that: * The Disclosure Statement is not proper under Section 1125 because it provides no information whatsoever to explain how the Debtor plans to fund its plan if this Court finds that Debtor has no ownership interest in the A.R. Walters Equipment. Although the Disclosure Statement does not expressly say so, Debtor presumably intends to rely entirely on the sale of the A.R. Walters Equipment, of which Debtor has no ownership interest. * The Disclosure Statement fails to include an administrative expense carve-out for A.R. Walters Trucking. * The Debtor has not filed its chapter 11 plan. In any event, "[a]llowing a facially non-confirmable plan to accompany a disclosure statement is both inadequate disclosure and a misrepresentation. * Since the Debtor has no ongoing business, A.R. Walters Trucking and Mr. Walters's debt can be paid only by liquidating the A.R. Walters Equipment. The obvious problem with this proposal is that there is no realistic prospect of funding the plan based on the established assets of the Debtor. Additionally, the plan presumably purports to liquidate at least five assets that are not properly identified in the Equipment Sales Agreements. * The purported sources of funding for the plan, as stated in the Disclosure Statement, are entirely speculative, rendering the plan unfeasible. A.R. Walters Trucking, LLC and Arthur Randy Walters: Julia A. Chincheck Zachary J. Rosencrance BOWLES RICE LLP 600 Quarrier Street Post Office Box 1386 Charleston, West Virginia 25325-1386 Telephone: (304) 347-1100 Facsimile: (304) 343-3058 E-mail: jchincheck@bowlesrice.com E-mail: zrosencrance@bowlesrice.com About Moore Trucking Moore Trucking Inc. filed a Chapter 11 bankruptcy petition (Bankr. S.D. W.Va. Case No. 20-20136) on March 31, 2020, disclosing under $1 million in both assets and liabilities. Judge Paul M. Black oversees the case. The Debtor is represented by James M. Pierson, Esq., at Pierson Legal Services. MSU ENERGY: Fitch Affirms CCC LT Issuer Default Ratings ------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings of MSU Energy S.A. at 'CCC' and the rating of its USD600 million senior secured notes due 2025 at 'CCC'/'RR4'. Similar to Argentine peers, the ratings reflect the company's exposure to the uncertain local operating and regulatory environment for generation companies along with the electricity system's high dependence on government subsidies. Fitch expects MSU Energy's 2020 leverage to be 6.5x with a deleveraging trend to 3.1x by 2023 due to the completion of three combined cycle projects, which added 300MW of capacity and are expected to nearly double the company's EBITDA on a pro-forma basis to more than USD200 million. MSU Energy's ratings continue to reflect its dependence on the country's off-taker and electricity market coordinator, Compania Administradora del Mercado Mayorista Electrico (CAMMESA). Fitch believes MSU Energy is vulnerable to significant payment delays from CAMMESA, given its expected tight FFO debt service coverage over the next two years and approximately USD100 million in remaining commercial debt obligations arising from its recently completed combined cycle conversions. Fitch believes MSU would also be vulnerable to significant remuneration changes to Resolutions 21/2016 or 287/17 or the pesification of these payment schemes, similar to what occurred with Base Energy. KEY RATING DRIVERS Combined Cycle Conversions Completed: Fitch believes the completion of MSU Energy's combined cycle conversions, two of which went online in August 2020 and one in October 2020, considerably lower the company's execution risk and will nearly double EBITDA on a pro-forma basis to more than USD200 million beginning in 2021. Fitch expects the conversions to improve the plants' efficiency by 25% and increase average dispatch to 90% from 16% with simple cycle capacity only. The conversions added 300MW of capacity at a total after-tax cost of USD490 million. Fitch incorporates an installed capacity of 750MW into its base case beginning in October 2020. Stable Cash Flow: MSU Energy's cash flow generation is relatively stable and predictable if CAMMESA payments are received in a timely fashion and power purchase agreement (PPA) terms are not significantly altered. Fitch estimates 60% of the company's EBITDA is related to Res. 21/2016, as of 4Q20, which is U.S. dollar-denominated for a 10-year period ending in 2027, with the remaining 40% attributable to Resolution 287/17 for 15 years. Given that the company began operations in 2017, it is not expected to have exposure to changes in Base Energy, the country's regulatory framework for generators not under a PPA, until 2027. Deleveraging Trajectory: Fitch estimates MSU Energy's total debt/EBITDA for 2020 will be 6.5x but will fall to 3.6x and 3.1x, respectively in 2022 and 2023. The expected deleveraging can be attributed to MSU's EBITDA nearly doubling to more than USD200 million in 2021 due the combined cycle conversions and as the company's USD250 million notes due 2024 begin to amortize in 4Q21. Fitch expects 2020 FFO-interest coverage of 1.7x, indicating a majority of cash flow will be dedicated to interest payments with an improvement to 3.3x by 2023, due to the aforementioned increased cash flow and debt reduction over time. Heightened Counterparty Exposure: MSU Energy depends on payments from CAMMESA, which acts as an agent for an association representing electricity generators, transmission, distribution and large consumers or the wholesale market participants known as Mercado Mayorista Electrico. CAMMESA is currently paying invoices within 80 days, which is higher than the contracted payment period of 42 days. Fitch expects payment delays from CAMMESA to begin to normalize given that it is now paying around 95% of equivalent monthly invoices on schedule. Despite project completion, MSU continues to be vulnerable to significant delays from CAMMESA due its USD100 million commercial debt to General Electric Company (GE; BBB/Stable) due within 12 months. Uncertain Regulatory Environment: Argentina's current economic and political environment remains highly uncertain and Fitch believes that a material change in the company's PPAs would adversely affect its capital structure and pesification would create a currency mismatch between its cash flow source and debt service obligations. The sector is highly strategic where the government has a role as the price/tariff regulator and also controls subsidies for industry players. Fitch's base case assumes that Resolution 21 and 287 PPAs remain in their current form although a reduction in terms and pesification of contracts are risks under the new Fernandez administration. Short Operating History: MSU Energy's ratings reflect a short operating history, which remains a concern. The company hired experienced personnel to manage its operations and entered into an operations and maintenance agreement with GE for the life of the PPAs to supervise operations and train MSU staff, which mitigates the short operating track record. This concern is also mitigated by the plants' proven technology and access to fuel supply. The rating reflects the assumption the issuers will retain GE through the life of the PPAs. DERIVATION SUMMARY MSU Energy's FC and LC IDRs of 'CCC' is in line with those of local Argentine peers, all of which are exposed to Argentina's regulatory risk and operating environment as electricity generation companies' dependent upon the electricity market coordinator, CAMMESA, as their counterparty. MSU Energy's rated Argentine utility peers are AES Argentina Generacion S.A. (CCC), Albanesi S.A. (CCC), Capex S.A. (CCC+), Pampa Energia S.A. (CCC) and Genneia S.A. (CCC). The ratings also reflect the Argentina electricity sector's increased reliance on government subsidies primarily due to Argentine peso depreciation, which increases counterparty risk for the country's generation companies. Fitch believes with the securing of MSU Energy's successful completion of its combined-cycle expansions in August and October 2020 under Resolution 287 will provide a significant bolster to the company's cash flow generation. Fitch estimates MSU Energy's 2020 leverage, measured as gross debt/EBITDA, will be 6.5x, which is weaker than peers such as Capex at 4.9x, AES Argentina at 3.2x, Pampa Energia at 2.7x, Genneia at 3.9x and Albanesi at 3.6x. Fitch expects MSU Energy to deleverage to 3.6x and 3.1x in 2022 and 2023, respectively, as increased cash flow from the expansions is used to pay down amortizing debt. Similar to MSU Energy, Albanesi is contemplating combined-cycle expansions awarded under Resolution 287, but has yet to secure the funding for the projects. MSU Energy's and Albanesi's working capital is vulnerable to delays in payments from CAMMESA. Albanesi currently has a weaker liquidity structure and debt profile compared with MSU Energy, which has USD250 million amortizing between 2021 and 2024 with its main financial obligation and a USD600 million bond due 2025. Genneia is close to completing its USD1 billion four-year 2017-2021 expansion plan, which is concentrated on renewable projects, under the RenovAR program where select projects ultimately have a guarantee from the World Bank. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include - Installed capacity of 750MW beginning in October 2020. - Simple cycle PPAs granted under SEE 21/2016. A fixed payment rate of USD/MW-month of USD20,900 for General Rojo and USD19,900 for Villa Maria and Barker; - A variable payment rate of USD/MWh of USD8.50 for natural gas and USD12.50 for fuel oil. - General Rojo and Villa Maria combined-cycle conversion expansions of 100MW completed in mid-August 2020 and Barker adds 100MW in October 2020 at a cost of USD1.5 million/MW. - Capacity payments will be received from CAMMESA within 80 days. Recovery Rating Assumptions: In the event of a default by the issuer, Fitch assumes a (-30%) EBITDA change, a 6.0x going-concern enterprise value multiple and 10% administrative claims. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Given the issuer's high dependence on the subsidies by CAMMESA from the Argentine Treasury, any further regulatory developments leading to a more independent market less reliant on support from the Argentine government could positively affect the company's collections/cash flow. - A positive sovereign rating action coupled with sustained gross leverage of 5.8x or lower and sustained FFO-interest coverage of 2.0x or greater. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Sustained leverage above 7.3x over the rated horizon after expansion. - A reversal of government policies that result in a significant increase in subsidies and/or a delay in payments for electricity sales. - A significant deterioration of credit metrics and/or significant payment delays from CAMMESA. LIQUIDITY AND DEBT STRUCTURE Improving Liquidity: Fitch believes MSU Energy's liquidity position is improved following a refinancing of its amortizing USD250 million notes due 2024 and anticipated payment schedule with GE to settle commercial debt for equipment used in the combined-cycle expansions under Resolution 287. Fitch believes the payment schedule for both of these obligations is well-timed to coincide with the increased cash flow the company will receive beginning in 2H20. Fitch does not anticipate the company will require additional debt to meet these obligations. MSU Energy had cash and equivalents of approximately USD28 million and available credit lines of between USD20 million and USD25 million with local and regional banks as of September 2020. Despite its improving liquidity, MSU remains vulnerable to significant payment delays from its main off-taker, CAMMESA, which is currently settling invoices within 80 days, above the contractually agreed upon 42 days. 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 Environmental, Social and Corporate Governance (ESG) Credit Relevance is a Score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. NABORS INDUSTRIES: Fitch Lowers Issuer Default Rating to 'RD' ------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) for Nabors Industries, Ltd. and Nabors Industries, Inc. (collectively, Nabors) to 'RD' from 'C' upon the completion of the company's exchange of senior unsecured notes for new senior unsecured priority guaranteed notes. Fitch has deemed the exchange as a distressed debt exchange (DDE) under its criteria. Following the exchange, Fitch has upgraded Nabors' IDR to 'CCC+'. In addition, Fitch has downgraded the revolving credit facility to 'B+'/'RR1' from 'BB-'/'RR1' and assigned a 'B'/'RR2' to the new senior unsecured priority guaranteed notes. Fitch has also affirmed the senior unsecured guaranteed notes at 'B-', revised the recovery rating to 'RR3' from 'RR4' and removed the Negative Ratings Watch. The senior unsecured notes were also upgraded to 'CCC-'/'RR6' from 'C'/'RR6'. The revised IDR reflects the material reduction in near-term maturities, which should provide sufficient runway to meet debt obligations in the near term. Fitch expects Nabors to be FCF neutral to slightly positive in the near term with the expectation that rig activity will slowly improve over time. The rating also reflects Nabors high quality rig portfolio, its strong customer relationships with major independents and supermajors, and international diversification. This is offset by the relatively high leverage profile, minimal availability on the revolver, limited access to capital markets, and continued weakness in the drilling sector. Fitch believes the sector has bottomed, but the recovery is likely to be weak and of a longer duration than prior downturns. KEY RATING DRIVERS Exchange Addresses Pending Maturities: The completed exchange transaction eliminates material bond maturities until 2024, although the revolver will need to be extended upon its maturity in 2023. In addition, approximately $90 million remains outstanding on the company's 2021 senior unsecured notes. This should position Nabors in hopes of a recovery in the drilling sector, although Fitch does not expect a significant improvement over the next 12-18 months, and Nabors leverage metrics will remain weak. In addition, Fitch expects Nabors will have difficulty accessing capital markets given the complication of the capital structure with securities having varying degrees of guarantees. Weak Liquidity Levels: Nabors has a $1.013 billion 2018 guaranteed revolver due in October 2023 with approximately $752 million outstanding and $27 million of LOC outstanding. The revolver has a financial maintenance covenant requiring minimum liquidity of $160 million. Due to the minimal liquidity requirement, Nabors available borrowing capacity was reduced by $50.6 million as of September 2020. Fitch believes refinancing the revolver could be challenging given its high outstanding amount combined with significant bond maturities starting in 2024-2026. Cash stood at $505 million on Sept. 30, 2020, although $381 million is in the Saudi Aramco joint venture (JV) and not available to Nabors. Fitch expects Nabors will be FCF positive in 2020 based on YTD and projected fourth quarter operations. Nabors reduced 2020 capital expenditures to $200 million from its previous forecast of $240 million. Fitch expects Nabors to be FCF neutral to slightly positive over the next few years, although this will depend not only on a slowly recovering drilling sector, but also the need to increase capex spending in order to bring idled rigs back to operations. U.S. Activity Has Weakened: Nabors' U.S. lower 48 rig count declined to 48 in 3Q20 from an average of 108 for third-quarter 2019, although overall rig activity appears to have bottomed over the past few months. During the last commodity price downturn, Nabors' total U.S. daily gross margins declined to $5,324/day from $12,670/day in 2015 with total U.S. EBITDA declining to $161 million in 2017 from $513 million in 2015. Dail gross margins in 3Q20 were $9,527 and are expected to decline to the $8,500 to $9,000 range in 4Q20. Fitch believes further margin declines are likely in 2021 under its base case West Texas Intermediate (WTI) oil price of $42 and as existing working rigs come off contract. Nabors is somewhat buffered by having some of the best U.S. pad-capable rigs providing for relatively resilient utilization and day rates. Super-spec rigs, which include ancillary technological offerings and other value-added services, continue to have high utilization within the industry. Nabors has strong market share with supermajors and large independent exploration and production (E&P) operators, which are better able to sustain drilling during lower oil prices. Nabors claims to have a 48% market share with the supermajors in 3Q20 with the next closest competitor at 26%. International Segment Provides Stability: Nabors' international drilling segment exhibited resilience through-the-cycle and results consistent with the average international rig count. Rig counts are less sensitive to commodity price changes due to longer contract terms and a customer base of generally large public and sovereign oil companies. This segment acts as a favorable hedge to the more volatile U.S. rig count. International margins are slightly higher than U.S. margins and the longer term of the contracts provide for more clarity on future utilization. The International segment has also been affected by lower oil prices with the rig count declining by 11 rigs in the third quarter with the expectation of further declines in the fourth quarter. Gross margins have also been affected with fourth quarter margins expected to be in the low to mid-$10,000 range compared with $13,000-$14,000 for the first nine months of the year. Fitch expects rigs will be added throughout 2021, particularly in Saudi Arabia and Latin America, where activity levels appear to be improving. DERIVATION SUMMARY Fitch compares Nabors with Precision Drilling (B+/Negative), which is also an onshore driller with exposure to the U.S. and Canadian markets. Nabors is estimated to have the third-largest market share in the U.S. at 12% compared with Precision at 8%. Nabors' gross margins in the U.S. are higher than Precision. This is aided by its offshore and Alaskan rig fleet, which operates at significantly higher margins. Precision has the highest market share in Canada, while Nabors has a smaller position. Nabors has a significant international presence, which typically has longer-term contracts, partially negating the volatility of the U.S. market. Precision has slightly better credit metrics than Nabors with debt/EBITDA of 3.8x compared with Nabors at 4.2x. Nabors does have more liquidity than Precision due to its larger revolver and higher availability. Both companies are expected to generate FCF over their respective forecast periods and use cash to reduce debt. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Agency's Rating Case for the Issuer -- WTI oil prices of $38 per barrel (bbl) in 2020 increasing to $42/bbl in 2021, $47/bbl in 2022 and $50/bbl thereafter; -- Henry Hub natural gas prices of $2.10 per thousand cubic feet (mcf) in 2020 and $2.45/mcf thereafter; -- Revenue declines by 31% in 2020 and 6% in 2021 due to reduction in E&P capital spending; -- Capex of $200 million in 2020 and $275 million in 2021 to maintain equipment given the view that there are no upgrades or expansions until utilization increases when prices are well above the base case price deck; -- FCF is expected to be slightly negative to positive with the expectation that any FCF proceeds will be used to reduce debt. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Material enhancement in liquidity to at least $500 million; -- Successful extension of the revolving credit facility; -- Mid-cycle debt/EBITDA of below 3.5x on a sustained basis; -- Mid-cycle lease-adjusted FFO-gross leverage less than 4.5x. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- Inability to access the revolving credit facility or other material reductions in liquidity; -- Mid-cycle debt/EBITDA greater than 4.5x on a sustained basis; -- Mid-cycle lease-adjusted FFO-gross leverage greater than 5.5x. LIQUIDITY AND DEBT STRUCTURE Declining Liquidity: Nabors had $505 million of cash on hand as of Sept. 30, 2020, although $381 million is tied up at the Saudi Aramco JV, which is not available to the company. Nabors has a $1.014 billion revolving credit facility due October 2023 with $752 million outstanding as of Sept. 30, 2020. The only financial covenant is a minimum liquidity requirement of $160 million, which reduced availability by $50.6 million. Extending the revolving credit maturity is a concern given the high amount currently outstanding and the heavy debt maturities in 2024 and 2025. Fitch expects the company to operate at FCF neutral to slightly positive over the next few years with proceeds expected to be used to reduce revolver borrowings. Nabors has also stated in a SEC filing that it expects to meet all obligations over the next 12 months. Fitch notes that in an improving drilling environment, Nabors may require increased capex spending and working capital needs to fund bringing idle rigs back to service. SUMMARY OF FINANCIAL ADJUSTMENTS No material financial adjustments. 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. NEWELL MOWING: Green Man Lawn Hits Chapter 11 --------------------------------------------- The Newell Mowing Co., a Longmont, Colorado-based firm that does business as Green Man Lawn & Landscape, filed for Chapter 11 protection. The firm has $238,381.92 in assets and $966,064.31 in liabilities, court documents show, according to TimesCall.com. According to its website, Green Man provides a variety of landscaping and lawn care services from commercial mowing to roof garden installatio A meeting of creditors under 11 U.S.C. Sec. 341(a) will be held Jan. 21, 2021, at 9:30 a.m. Joli A. Lofstedt has been appointed as Subchapter V Trustee. About Newell Mowing Co. The Newell Mowing Co., doing business as Green Man Lawn & Landscape, is a Longmont, Colorado-based company that provides lawn mowing and landscaping services. On the Web: http://www.greenmancares.com/ Newell Mowing filed a Chapter 11 Subchapter V petition (Bankr. D. Colo. Case No. 20-17988) on Dec. 16, 2020. The Debtor was estimated to have less than $500,000 in assets and $500,000 to $1 million in liabilities as of the bankruptcy filing. The Debtor's counsel: Joshua Sheade Berken Cloyes, PC 1159 Delaware Street Denver, CO 80204 Tel: 303-623-4357 E-mail: joshua@berkencloyes.com NORTHWEST HARDWOODS: Hires Huron Consulting as Financial Advisor ---------------------------------------------------------------- Northwest Hardwoods, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Huron Consulting Services LLC as financial advisor to the Debtors. Northwest Hardwoods requires Huron Consulting to: a. provide bankruptcy case management activities, including (i) leading preparation and review of required financial reporting; (ii) assisting in preparation and review of the Debtors' financial information; (iii) managing request and direct inquiries from the U.S. Trustee; and (iv) assisting in preparation of documents necessary for plan confirmation and completion of the bankruptcy cases; b. provide financial planning services, including (i) assisting with liquidity management, forecasting, and reporting, (ii) assisting with analysis, tracking, and reporting regarding cash collateral arrangements and budgets, and (iii) maintaining the 5-year business plan and monthly 3-statement financial model through emergence from the Chapter 11; c. provide accounting support, including (i) assisting with Chapter 11 accounting procedures, (ii) assisting with tax planning issues, and (iii) assisting with claims resolution procedures, if necessary; and d. provide estimates of the value of the Reorganized Debtors and other valuation services requested by the Debtors. Huron Consulting will be paid at these hourly rates: Managing Director $825 to $1,195 Senior Director $750 to $835 Director $460 to $745 Manager $425 to $580 Associate $400 to $460 Analyst $300 In the 90 days prior to the petition date, Huron Consulting received retainers and payments of $1,934,378. The Firm applied the retainers for expenses and fees incurred leaving a balance of $301,437. Huron Consulting will also be reimbursed for reasonable out-of-pocket expenses incurred. Aaron Kibbey, a managing director of Huron, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Huron Consulting can be reached at: Aaron Kibbey HURON CONSULTING SERVICES LLC 1166 Avenue of the Americas, Suite 300 New York, NY 10036 Tel: (212) 785-1900 About Northwest Hardwoods Headquartered in Tacoma, Wash., Northwest Hardwoods, Inc., is the largest United States manufacturer of North American hardwood lumber based on sawmill capacity, with a current estimated annual hardwood lumber capacity of approximately 320 million board feet. Its North America operations include 20 facilities that produce over 20 species of domestic hardwoods. Northwest Hardwoods serves more than 2,000 active customers across over 60 countries. Northwest Hardwoods and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-13005) on Nov. 23, 2020. The Debtors were estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Christopher S. Sontchi is the case judge. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as co-bankruptcy counsel; and Huron Consulting Services LLC as financial advisor. Prime Clerk is the claims agent. The secured noteholders are represented by Willkie Farr & Gallagher LLP as legal counsel and Guggenheim Securities, LLC, as financial advisor. NORTHWEST HARDWOODS: Seeks to Hire Gibson Dunn as Attorney ---------------------------------------------------------- Northwest Hardwoods, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Gibson Dunn & Crutcher LLP, as attorney to the Debtors. Northwest Hardwoods requires Gibson Dunn to: a) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b) advise and consult on the conduct of the Chapter 11 Cases, including all of the legal and administrative requirements of operating in chapter 11; c) attend meetings and negotiating with representatives of creditors and other parties in interest; d) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; e) prepare pleadings in connection with the Chapter 11 Cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f) represent the Debtors in connection with obtaining authority to continue using cash collateral and postpetition financing; g) advise the Debtors in connection with any potential sale of assets; h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates; i) advise the Debtors regarding tax matters; j) take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; k) prepare organizational documents and other corporate documents in connection with the Debtors' restructuring efforts; and l) perform all other necessary legal services for the Debtors in connection with the prosecution of the Chapter 11 Cases, including, but not limited to: (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. Gibson Dunn will be paid at these hourly rates: Partners $1,095 to $1,550 Counsel $985 to $1,045 Associates $585 to $1,025 Paraprofessionals $285 to $645 On Oct. 5, 2020, the Debtors provided Gibson Dunn with an advance payment retainer in the amount of $500,000. As of the Petition Date, there was a residual retainer estimated to total approximately $118,497. Gibson Dunn will also be reimbursed for reasonable out-of-pocket expenses incurred. David M. Feldman, a partner of Gibson Dunn, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Gibson Dunn can be reached at: David M. Feldman, Esq. J. Eric Wise, Esq. Matthew K. Kelsey, Esq. Alan Moskowitz, Esq. GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166 Telephone: (212) 351-4000 Facsimile: (212) 351-4035 E-mail: dfeldman@gibsondunn.com ewise@gibsondunn.com mkelsey@gibsondunn.com amoskowitz@gibsondunn.com About Northwest Hardwoods Headquartered in Tacoma, Wash., Northwest Hardwoods, Inc., is the largest United States manufacturer of North American hardwood lumber based on sawmill capacity, with a current estimated annual hardwood lumber capacity of approximately 320 million board feet. Its North America operations include 20 facilities that produce over 20 species of domestic hardwoods. Northwest Hardwoods serves more than 2,000 active customers across over 60 countries. Northwest Hardwoods and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-13005) on Nov. 23, 2020. The Debtors were estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Christopher S. Sontchi is the case judge. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as co-bankruptcy counsel; and Huron Consulting Services LLC as financial advisor. Prime Clerk is the claims agent. The secured noteholders are represented by Willkie Farr & Gallagher LLP as legal counsel and Guggenheim Securities, LLC, as financial advisor. NORTHWEST HARDWOODS: Seeks to Hire Young Conaway as Co-Counsel -------------------------------------------------------------- Northwest Hardwoods, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Young Conaway Stargatt & Taylor, LLP, as co-counsel to the Debtors. Northwest Hardwoods requires Young Conaway to: a. provide legal advice and services regarding Local Rules, practices and procedures and providing substantive and strategic advice on how to accomplish the Debtors' goals in connection with the prosecution of the Chapter 11 Cases, bearing in mind that the Court relies on co-counsel such as Young Conaway to be involved in all aspects of each bankruptcy proceeding; b. review, comment, and prepare drafts of documents to be filed with the Court as co-counsel to the Debtors; c. appear in Court and at any meeting with the U.S. Trustee for the District of Delaware and any meeting of creditors at any given time on behalf of the Debtors as their co- counsel; d. perform various services in connection with the administration of the Chapter 11 Cases, including (1) preparing agenda letters, certificates of no objection, certifications of counsel, notices of fee applications and hearings, and hearing binders for documents and pleadings; (ii) monitoring the docket for filings and coordinating with Gibson Dunn on pending matters that need responses; (iii) prepare and maintain critical dates memoranda to monitor pending applications, motions, hearing dates and other matters and the deadlines associated with the same; (iv) handling inquiries and calls from creditors and counsel to interested parties regarding pending matters and the general status of the Chapter 11 Cases; and (v) coordinate with Gibson Dunn or any necessary responses; e. prepare for and pursue confirmation and approval of the Plan and Disclosure Statement; and f. perform all other services assigned by the Debtors, in consultation with Gibson Dunn, to Young Conaway as co- counsel to the Debtors. Young Conaway will be paid at these hourly rates: Attorneys $375 to $870 Paralegals $305 Young Conaway received a retainer in the amount of $100,000 on Oct. 23, 2020. On Nov. 20, 2020, Young Conaway received an additional advice of $104,169 for the Chapter 11 filing fee. After deducting expenses and fees, Young Conaway is holding the balance retainer of $92,844. Young Conaway will also be reimbursed for reasonable out-of-pocket expenses incurred. Sean M. Beach, a partner of Young Conaway, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Young Conaway can be reached at: Sean M. Beach, Esq. Jacob D. Morton, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: sbeach@ycst.com jmorton@ycst.com About Northwest Hardwoods Headquartered in Tacoma, Wash., Northwest Hardwoods, Inc. is the largest United States manufacturer of North American hardwood lumber based on sawmill capacity, with a current estimated annual hardwood lumber capacity of approximately 320 million board feet. Its North America operations include 20 facilities that produce over 20 species of domestic hardwoods. Northwest Hardwoods serves more than 2,000 active customers across over 60 countries. Northwest Hardwoods and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-13005) on Nov. 23, 2020. The Debtors were estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Christopher S. Sontchi is the case judge. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as co-bankruptcy counsel; and Huron Consulting Services LLC as financial advisor. Prime Clerk is the claims agent. The secured noteholders are represented by Willkie Farr & Gallagher LLP as legal counsel and Guggenheim Securities, LLC, as financial advisor. NOSCE TE IPSUM: Feb. 24 Hearing on Disclosure Statement ------------------------------------------------------- Judge Mildred Caban Flores has entered an order setting a hearing on approval of disclosure statement of Nosce Te Ipsum Inc is scheduled for Feb. 24, 2021 at 9:00 a.m. via Microsoft Teams. Objections to the form and content of the disclosure statement should be filed and served not less than 14 days prior to the hearing. About Nosce Te Ipsum Nosce Te Ipsum, Inc. classifies its business as single asset real estate (as defined in 11 U.S.C. Section 101(51B)). It owns in fee simple a five-story building with office and commercial spaces for lease, and adjacent parking lot structure in Guaynabo, P.R., valued at $7 million. Nosce Te Ipsum filed a Chapter 11 petition (Bankr. D.P.R. Case No. 19-05155) on Sept. 9, 2019. In the petition signed by Maria De Los A. Ubarri, general manager, the Debtor disclosed $7,046,991 in assets and $5,210,939 in liabilities. The Hon. Brian K. Tester oversees the case. Andrew Jimenez Cancel, Esq., at Andrew Jimenez Law Offices, is the Debtor's bankruptcy counsel. NOSCE TE IPSUM: Unsecureds Unimpaired in Sale Plan -------------------------------------------------- According to its Amended Disclosure Statement, Nosce Te Ipsum, Inc., is proposing a Plan of Reorganization that contemplates the sale of its real property in Guaynabo, Puerto Rico, to pay off claims. Considering the health crisis created by the COVID-19 pandemic, the government mandated restrictions, and its overall effect on the economy, the sale should take place in 2021 to guaranty that enough value is realized in the transaction to pay all allowed claims. According to the Disclosure Statement, the Debtor's real property has enough value to pay all secured and unsecured claims. The Debtor owns a real property containing 8,337.03 square meters of land situated at Metro Office Park, #3 Calle 1, Guaynabo, Puerto Rico. The property is a five-story office building comprising 62,457 square feet of total Gross Leasable Area. The Debtor has valued the property at $7,000,000. The last appraisal of the property performed on December 9, 2019, shows a value of $7,400,000. The Plan provides: * Class 3 secured claims of CRIM and Metro Office park Property Owners Association will be paid in full on the effective date of the Plan. Any postpetition amount owed to creditors in this class will be paid from the proceeds of the sale of the property on the effective date of the Plan. * Class 5 General Unsecured Claims will be paid in full on the Effective Date of the Plan. This class is not impaired. * Class 7 Equity Security and Other Interest Holders will not receive payment until senior classes are paid in full their allowed claims. This class is not allowed to vote. A full-text copy of the First Amended Disclosure Statement dated December 7, 2020, is available at https://bit.ly/3gJwbkl from PacerMonitor.com at no charge. Counsel for Nosce Te Ipsum: Andrew Jiménez Cancel ANDREW JIMENEZ LLC USDC-PR # 226510 P.O. Box 9023654 San Juan, PR 00902-3654 Tel: (787) 638-4778 E-mail: ajimenez@ajlawoffices.com About Nosce Te Ipsum Nosce Te Ipsum, Inc. classifies its business as single asset real estate (as defined in 11 U.S.C. Section 101(51B)). It owns in fee simple a five-story building with office and commercial spaces for lease, and adjacent parking lot structure in Guaynabo, P.R., valued at $7 million. Nosce Te Ipsum filed a Chapter 11 petition (Bankr. D.P.R. Case No. 19-05155) on Sept. 9, 2019. In the petition signed by Maria De Los A. Ubarri, general manager, the Debtor disclosed $7,046,991 in assets and $5,210,939 in liabilities. The Hon. Brian K. Tester oversees the case. Andrew Jimenez Cancel, Esq., at Andrew Jimenez Law Offices, is the Debtor's bankruptcy counsel. OLYMPIC RESTAURANTS: Hires CG Accounting as Accountant ------------------------------------------------------ Olympic Restaurants LLC seeks authority from the U.S. Bankruptcy Court for the Northern District of Ohio to employ CG Accounting, as accountant to the Debtor. Olympic Restaurants requires CG Accounting to provide general accounting and tax preparation services and production of related documents including operating reports. CG Accounting will be paid at these hourly rates: Accountants $125 to $175 Support Staffs $45 to $125 The Debtor owed CG Accounting the amount of $6,582.50 on a prepetition claim but not for services to be rendered in the bankruptcy case. CG Accounting will also be reimbursed for reasonable out-of-pocket expenses incurred. Brian Greene, a partner of CG Accounting, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. CG Accounting can be reached at: Brian Greene CG ACCOUNTING 7840 Mayfield Road Chesterland, OH 44026 Tel: (440) 729-8284 About Olympic Restaurants Olympic Restaurants LLC is a Greek restaurant based in Solon, Ohio, which conducts business under the name Simply Greek. Olympic Restaurants sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 20-14537) on Oct. 8, 2020. At the time of the filing, Debtor had estimated assets and liabilities of less than $50,000. Judge Arthur I. Harris oversees the case. Frederic P. Schwieg Attorney at Law is the Debtor's legal counsel. OUTERSTUFF LLC: Moody's Ups CFR to Caa2 on Improved Liquidity ------------------------------------------------------------- Moody's Investors Service upgraded Outerstuff LLC's corporate family rating to Caa2 from Ca and assigned a Caa3 rating to the company's senior secured term loan due December 2023. At the same time, Moody's upgraded Outerstuff's probability of default rating to Caa2-PD from Ca-PD/LD. The ratings outlook was changed to positive from negative. As part of an October 2020 amendment, Outerstuff extended the maturity of its senior secured term loan to December 31, 2023 from July 28, 2021, and repaid all principal and interest that was due through September 2020. As a result of the successful maturity extension and resolution of the missed payments, Moody's removed the limited default indicator from the Ca-PD/LD PDR. The upgrade reflects Outerstuff's improved liquidity following the October 2020 amendment to its senior secured term loan. The amendment 1) extended the company's senior secured term loan maturity to December 2023 from July 2021; 2) added a company option to pay interest in kind for up to two quarters through December 31, 2021 provided that the company cannot make such election two quarters in a row; and 3) added a minimum liquidity covenant of $10 million, tested at the end of each month, and a minimum EBITDA covenant that begins in the first quarter of 2022. At the same time, Outerstuff renewed most of its league licensing contracts at current market rates, substantially eliminating minimum royalty shortfall payments going forward. This should reduce the drag on earnings that has occurred over the past several years as a result of large royalty shortfalls. While significant operating risks still exist, Moody's expects Outerstuff's profitability to improve in 2021 as a result of these renegotiated contacts, as well as improved apparel retail business conditions, continued ramp up of new licensing businesses, and the resumption of major professional and college sporting events. The company's margins should also benefit from recent cost reduction and SKU rationalization initiatives. Upgrades: Issuer: Outerstuff LLC Probability of Default Rating, Upgraded to Caa2-PD from Ca-PD/LD Corporate Family Rating, Upgraded to Caa2 from Ca Assignments: Issuer: Outerstuff LLC Senior Secured Bank Credit Facility, Assigned Caa3 (LGD4) Withdrawals: Issuer: Outerstuff LLC Senior Secured Bank Credit Facility, Withdrawn, previously rated Ca (LGD4) Outlook Actions: Issuer: Outerstuff LLC Outlook, Changed to Positive from Negative RATINGS RATIONALE Despite the recent term loan maturity amendment and maturity extension, Outerstuff's Caa2 CFR reflects its very weak credit metrics and unsustainable capital structure at current levels of performance. The company needs to demonstrate that it can sustainably improve performance in order to reduce financial leverage to more tenable levels. The rating also reflects the company's small revenue scale, narrow product concentration primarily in licensed children's sports apparel in North America with a small, but growing, adult and international presence, and reliance on licensing arrangements from several sports leagues for a significant majority of revenue. The rating is supported by the company's diversification across retail channels, its entrenched market position related to exclusive license contracts with the NFL, NBA, NHL, MLB, MLS, and U.S.A. Olympics, which allow it to sell virtually all children's apparel with the teams' logos, and Moody's view that the children's licensed sports apparel market is relatively stable because of its low fashion risk, natural replenishment cycle and consumers' steady interest in team sports. Outerstuff's liquidity is adequate, supported by Moody's expectation that balance sheet cash, cash flow and revolver availability, though all very modest, will be sufficient to cover cash flow needs over the next twelve months, including working capital needs and minimal capital expenditures. The positive outlook reflects the potential for operating improvement in 2021 due to the successful renegotiation of sports league contracts, improved apparel retail business conditions, the continued ramp up of new license contracts, and benefits of recent cost savings actions. The Caa3 rating assigned to Outesrtuff's senior secured term loan reflects its junior position to the $100 million ABL. The term loan benefits from a first lien on substantially all of the company's tangible and intangible assets except the ABL collateral, in which the term loan has a second priority interest. The term loan and ABL are guaranteed by the parent and all wholly-owned subsidiaries. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require the company to significantly improve operating performance and credit metrics, while maintaining adequate liquidity through positive free cash flow and maintaining ample revolver availability and covenant cushion. Specific metrics include lease-adjusted debt/EBITDAR sustained below 6.5 times and EBITA/Interest above 1.1 times. Ratings could be downgraded if Outerstuff is unable to improve operating performance over the very near term, with improved in revenue, earnings, cash flow, and credit metrics, or if liquidity weakens in any way, such as through negative free cash flow or covenant violations. Outerstuff is a designer, manufacturer and marketer of licensed children's sports apparel. The company generates the majority of its revenues from products sold under exclusive licenses with the NFL, NBA, NHL, MLB, MLS, U.S.A. Olympics, Umbro as well as licenses with over 200 NCAA colleges and universities, and sells to team shops, specialty sports chain stores, department stores, and mass merchants mainly in the United States. The company is majority owned by company management, including founder and CEO, Sol Werdiger. Annual revenue is less than $300 million. The principal methodology used in these ratings was Apparel Methodology published in October 2019. P8H INC: Trustee Hires Prager Metis as Accountant ------------------------------------------------- Megan E. Noh, the Chapter 11 Trustee of P8H, Inc. d/b/a Paddle 8, seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Prager Metis CPAs LLC, as accountant to the Trustee. The Trustee requires Prager Metis to: (a) prepare tax returns, forms and reports requested to be filed by the Trustee including, but not limited to, corporate income tax returns for the Debtor; (b) review previously filed Federal, state and local income tax returns, if necessary, to facilitate the filing of further required tax returns; (c) review and analyze tax issues that may arise, if any, for which the Trustee may request assistance; (d) review notices received from the Internal Revenue Service and other state or local authorities, if requested by the Trustee; and (e) perform such other accounting services as the Trustee deems necessary for the effective administration of the Debtor's estate. Prager Metis will be paid at these hourly rates: Partner/Principal $410 to $510 Manager $315 to $315 Staff Accountant $275 to $275 Prager Metis and the Trustee have agreed, subject to the approval of the Bankruptcy Court, that the accounting fees for the accounting services will be $6,000 for year ending December 31, 2019, and $4,800 for the years ending December 31, 2020 and 2021, respectively. Prager Metis will also be reimbursed for reasonable out-of-pocket expenses incurred. Corey H. Neubauer, a partner at Prager Metis, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Prager Metis can be reached at: Brian A. Serotta, CPA Corey H. Neubauer, CPA Prager Metis CPAs, LLC 401 Hackensack Ave, 4 th Floor Hackensack, NJ 07601 Tel: (201) 342-7753 About P8H, Inc. d/b/a Paddle 8 Paddle8 was founded in 2011 by Alexander Gilkes, Aditya Julka, and Osman Khan. It is one of the first online auction house that specialized in the art world's "middle market." It announced a high-profile merger with the Berlin-based online auction house Auctionata in 2016, but the partnership was dissolved in 2017 when Auctionata filed for insolvency. P8H, Inc., doing business as Paddle 8, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-10809) on March 16, 2020. At the time of the filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of between $50,001 and $100,000. Judge Stuart M. Bernstein oversees the case. The Debtor is represented by Kirby Aisner & Curley, LLP. Megan E. Noh is the Debtor's Chapter 11 trustee. The Trustee is represented by Pryor Cashman, LLP. PACIFIC DRILLING: Reports Overwhelming Acceptance of Plan --------------------------------------------------------- Pacific Drilling S.A. (OTC: PACDQ) announced on Dec. 16, 2020 the final voting results on the First Amended Joint Plan of Reorganization of Pacific Drilling S.A. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (the "Plan"). The voting results indicate overwhelming acceptance of the Plan by the two classes entitled to vote on the Plan. The Company has received votes in favor of the Plan from (a) 97.87% in number of the holders of Class 3 First Lien Notes Claims that voted and 99.98% in amount of Class 3 First Lien Notes Claims that voted and (b) 100% in number and amount of the Holders of Class 4 Second Lien Notes Claims that voted. Based on the voting results, the Company believes that it remains on track for Plan confirmation at or shortly following the Plan confirmation hearing currently scheduled for Dec. 21, 2020 in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") and for emergence from the Chapter 11 proceedings by year-end. The Plan, if confirmed by the Bankruptcy Court, will de-lever the Company's balance sheet by eliminating over $1 billion of funded debt obligations and provide the Company with access to additional liquidity to operate going forward through an $80,000,000 senior secured delayed draw term loan exit facility. The Company expects to emerge by year-end with approximately $180 million of liquidity, consisting of new capital in the form of the exit facility and approximately $100 million of cash and cash equivalents on hand. Voting on the Plan ended on December 14, 2020. Prime Clerk LLC, the Company’s claims, noticing, and solicitation agent, has certified and filed the final voting results with the Bankruptcy Court on December 16, 2020. Additional information regarding the restructuring and Chapter 11 proceedings, including the Plan, can be found (i) on our website at www.pacificdrilling.com/restructuring, (ii) on a website administered by Prime Clerk, at http://cases.primeclerk.com/PacificDrilling2020,or (iii) via our dedicated restructuring information line at: +1 877-930-4314 (toll free) or +1 347-897-4073 (international). Advisors Greenhill & Co. is acting as financial advisor, Latham & Watkins LLP and Jones Walker LLP are serving as legal counsel, and AlixPartners is acting as restructuring advisor to Pacific Drilling in connection with the restructuring. Houlihan Lokey is acting as financial advisor and Akin Gump Strauss Hauer & Feld LLP is acting as legal advisor to an ad hoc group of noteholders. About Pacific Drilling Pacific Drilling (NYSE: PACD) provides deepwater drilling services. Pacific Drilling's fleet of seven drillships represents one of the youngest and most technologically advanced fleets in the world. On the Web: http://www.pacificdrilling.com/ On Nov. 12, 2017, Pacific Drilling S.A. along with affiliates each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 17-13193). In that case, Pacific tapped Togut, Segal & Segal LLP as counsel; Evercore Partners International LLP as investment banker; and AlixPartners, LLP, as restructuring advisor. Pacific Drilling S.A. and its affiliates returned to Chapter 11 bankruptcy (Bankr. S.D. Tex. Lead Case No. 20-35212) on Oct. 30, 2020, to seek approval of a bankruptcy-exit plan that will cut debt by $1.1 billion. As of June 30, 2020, Pacific Drilling had $2,166,943,000 in assets and $1,142,431,000 in liabilities. In the present case, Greenhill & Co. is acting as financial advisor to the Debtors, Latham & Watkins LLP and Jones Walker LLP are serving as legal counsel, and AlixPartners is acting as restructuring advisor to Pacific Drilling in connection with the restructuring. Prime Clerk LLC is the claims agent. Houlihan Lokey is acting as financial advisor and Akin Gump Strauss Hauer & Feld LLP is acting as legal advisor to the noteholders. PBF HOLDING: Moody's Downgrades CFR to B1, Outlook Negative ----------------------------------------------------------- Moody's Investors Service downgraded PBF Holding Company LLC's corporate family rating to B1 from Ba3, Probability of default to B1-PD from Ba3-PD, senior secured notes to Ba3 from Ba2 and senior unsecured notes to B3 from B1 The Speculative Grade Liquidity rating SGL-3 is unchanged. The outlook on all ratings remains negative. "The downgrade of PBF's ratings reflects Moody's expectation that a slow recovery in refining margins will delay recovery in the company's earnings, cash flow and leverage profile to beyond 2021," said Elena Nadtotchi, Moody's Senior Vice President. "We expect that PBF's proactive measures in optimizing its asset footprint and cost savings achieved in 2020, as well as its significant cash balance will support the company's credit profile in the near term." Downgrades: Issuer: PBF Holding Company LLC Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Corporate Family Rating, Downgraded to B1 from Ba3 Senior Secured Notes, Downgraded to Ba3 (LGD3) from Ba2 (LGD3) Senior Unsecured Notes, Downgraded to B3 (LGD5) from B1 (LGD5) Assignments: Issuer: PBF Holding Company LLC Senior Secured Notes, Assigned Ba3 (LGD3) Outlook Actions: Issuer: PBF Holding Company LLC Outlook, Remains Negative RATINGS RATIONALE The B1 CFR reflects Moody's expectation of an extended period of weakness in PBF's financial profile resulting from a sharp decline in demand for refined products caused by the spread of coronavirus in 2020. The company increased its debt prior to the downturn to fund its acquisition of the Martinez refinery in January 2020 and then raised additional debt to finance its operations amid a decline in operating cash flow. In response to exceptional weakness in refining market, PBF reduced operating expenses, capital investment and has also closed some refining capacity in the North East region in 2020. While significant, these operating measures will not be sufficient to fully offset the negative impact on the leverage profile of the sharp decline in refining margins and the company's earnings and cash flow generation, as well as the impact of the additional borrowing. Assuming a steady improvement in market activity, Moody's expects PBF's leverage metrics to start to improve in 2021 from trough levels reached in 2020, but remain relatively weak. The negative outlook reflects high financial and operating risks pending a recovery in refining margins and operating cash flow, as well as risks to PBF's liquidity position. PBF maintains adequate liquidity, as reflected by its SGL-3 liquidity rating. This assessment is supported by the expectation that the company will continue to have good access to credit from its trading partners and will be able to manage proactively its sizable working capital requirements. PBF needs to finance a significant inventory of crude oil, intermediates, and refined products. Pending a substantial recovery in refining margins, the company will also rely on its cash balances and committed liquidity sources to fund a portion of its operating and capital expenses in 2021. At September 30, 2020, the company had $1,253 million of cash on hand and total available liquidity of $1.9 billion, including funding available under its $3.4 billion senior secured revolving facility. The revolver expires in May 2023. The maximum utilization under the revolver is governed by the borrowing base. The facility has a single maintenance covenant, a minimum fixed charge coverage ratio of 1.0x, that's applicable only when availability drops below a certain level. The senior secured notes are rated Ba3, one notch above PBF's B1 CFR, reflecting the secured position of the holders of the secured notes relative to unsecured lenders. The B3 rating on the senior unsecured notes, two notches below the B1 CFR, reflects the size and strong collateral package of the revolving credit facility, which holds a priority claim to the assets over the unsecured notes, as well as the priority treatment of the secured notes. The revolver is secured by liquid assets, including deposit accounts, accounts receivable, and all hydrocarbon inventory to which PBF holds title (excluding inventory covered by the inventory intermediation facility with J. Aron & Company). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Weaker operating performance or weaker liquidity, including as a result of larger working capital outflows or one-off costs, could lead to the downgrade of PBF's ratings. While not likely in the near term, the ratings may be upgraded amid sustained operating improvement and a broader recovery in the refining sector leading to improved cash flow generation with RCF/debt maintained above 15%. Good liquidity and sustained improvement in profitability would also be required to support an upgrade of the ratings. The principal methodology used in these ratings was Refining and Marketing Industry published in November 2016. PBF Holding Company LLC is an independent refining and wholesale marketing company. It operates six large scale refineries in the US. PLUMBING PROFESSIONALS: Case Summary & 9 Unsecured Creditors ------------------------------------------------------------ Debtor: Plumbing Professionals of Florida, Inc. 1212 Windy Bay Shoal Tarpon Springs, FL 34689 Business Description: Plumbing Professionals of Florida, Inc. -- https://plumbingpfl.com -- is a locally owned and operated company that operates in the plumbing industry. It offers all types of plumbing services to its residential and commercial clients including, plumbing repair; emergency services; hot water heater; repair and installation; septic tank repair, pumping and maintenance; and drain cleaning and rodding. Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-09227 Debtor's Counsel: Amy Denton Harris, Esq. STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 E. Madison St., Suite 200 Tampa, FL 33602 Tel: 813-229-0144 Email: aharris@srbp.com Total Assets: $689,299 Total Liabilities: $1,241,081 The petition was signed by Ryan J. Penna, president. A copy of the Debtor's list of nine unsecured creditors is available for free at: https://www.pacermonitor.com/view/YDYXSWY/Plumbing_Professionals_of_Florida__flmbke-20-09227__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/32GUHXI/Plumbing_Professionals_of_Florida__flmbke-20-09227__0001.0.pdf?mcid=tGE4TAMA PPV INC: PWW-Led Auction for All Assets on Dec. 28 -------------------------------------------------- Judge Peter C. McKittrick of the U.S. Bankruptcy Court for the District of Oregon authorized PPV, Inc.'s bidding procedures in connection with the sale of substantially all assets and, to the extent any assets of Bravo Environmental NW, Inc. are used in PPV's business, such assets of Bravo, to PWW Portland, LLC for $10 million, cash, subject to overbid. A hearing on the Motion was held on Dec. 16, 2020. The salient terms of the Bidding Procedures are: a. Bid Deadline: Dec. 16, 2020 at 4:00 p.m. (PT) b. Initial Bid: The minimum opening bid from any Acceptable Bidder must (a) include a cash purchase price that is at least $10.55 million (i.e., the sum of the Expense Reimbursement plus an initial bid increment of $200,000 greater than the cash purchase price set forth in the APA), and (b) must include total consideration, including all cash, non-cash consideration and assumed liabilities, that is at least $600,000 greater than in the APA. c. Deposit: $250,000 or 2.5% of the proposed gross purchase price d. Auction: Any Auction for the Transferred Assets will be held on Dec. 28, 2020, at 1:30 p.m. (PT), at the offices of Vanden Bos & Chapman, LLP, 319 SW Washington St., Ste. 520, Portland, OR 97204, or conducted virtually. e. Bid Increments: $75,000 f. Sale Hearing: Dec. 30, 2020 at 1:30 p.m. (PT) by video conference. The Video Hearing General Instructions are located on the Court’s website at: https://www.orb.uscourts.gov/video-hearings. g. Sale Objection Deadline: Dec. 28, 2020 The Debtors are authorized to pay the Expense Reimbursement up to $350,000 to compensate the Purchaser for its reasonable out-of-pocket expenses paid to third parties and reasonable amounts incurred by the Purchaser (including overhead expenses) in pursuing a purchase of the Transferred Assets. Further, the Expense Reimbursement will be paid as a cost of sale from the proceeds at closing and set aside in escrow or a trust account pending notice and an opportunity to object. Notice of the amount sought, including an itemization of the expenses, will be provided to the Debtors and the U.S. Trustee. Absent any objection received with seven days of such notice, the amount requested will be paid from the escrow or trust account. As provided by Bankruptcy Rules 6004(h) and 6006(d), the Order will not be stayed for 14 days after the entry thereof and will be effective and enforceable immediately on its entry on the docket. About PPV Inc. PPV, Inc. -- https://www.ppvnw.com/ -- is a waste management services provider in Portland, Oregon. The company offers industrial cleaning, recycling, treatment, and technical waste management services. PPV, Inc. filed a petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Lead Case No. 19-34517) on Dec. 10, 2019. In the petition signed by Joseph J. Thuney, president, the Debtor was estimated to have between $1 million and $10 million in both assets and liabilities. Affiliate Bravo Environmental NW, Inc., also filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case 19-34518) on Dec. 10, 2019. The cases are jointly administered before the Honorable David W. Hercher. Douglas R. Ricks, Esq. at Vanden Bos & Chapman, LLP, is the Debtors' counsel. No creditors' committee has been appointed in this case. PRAIRIE ECI: Moody's Lowers CFR to B1; Alters Outlook to Stable --------------------------------------------------------------- Moody's Investors Service downgraded Prairie ECI Acquiror LP's Corporate Family Rating to B1 from Ba3 and Probability of Default Rating to B1-PD from Ba3-PD. Concurrently, Moody's affirmed Tallgrass Energy Partners, LP's (TEP) B1 senior unsecured notes rating. Moody's also downgraded Prairie's senior secured term loan rating to B3 from B2. The rating outlook for Prairie and TEP was changed to stable from negative. "Prairie's ratings downgrade reflects the company's elevated debt leverage and low likelihood of significant debt reduction or cash flow growth in the near-term" commented Sreedhar Kona, Moody's Senior Analyst. "Predictable cash flow from the company's existing long-term firm transportation contracts and some earnings diversification contribute to the stable outlook." Downgrades: Issuer: Prairie ECI Acquiror LP Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Corporate Family Rating, Downgraded to B1 from Ba3 Senior Secured Term Loan, Downgraded to B3 (LGD6) from B2 (LGD5) Affirmations: Issuer: Tallgrass Energy Partners, LP Senior Unsecured Notes, Affirmed B1 (LGD4) Outlook Actions: Issuer: Prairie ECI Acquiror LP Outlook, Changed to Stable from Negative Issuer: Tallgrass Energy Partners, LP Outlook, Changed to Stable from Negative RATINGS RATIONALE Prairie's downgrade to B1 CFR reflects the company's elevated debt leverage on a consolidated basis, and limited prospects for reducing debt or enhancing cash flow. When Prairie completed the acquisition of Tallgrass Energy, LP's (TGE, Prairie's parent, unrated) remaining public ownership in early 2020, the company expected to reduce the acquisition leverage by growing cash flow through incremental growth projects and successfully recontracting expiring contracts at attractive tariffs. The onset of the coronavirus pandemic and corresponding negative effect on commodity prices and oil and gas production volumes has raised headwinds to the company's recontracting efforts and limited opportunities for growth projects. The challenging environment for its exploration and production customer base has also increased counterparty risk at it pipeline assets. Prairie's B1 CFR is constrained by the company's high financial leverage including Prairie's term loan, debt at TEP and pro-rata share of Rockies Express Pipeline LLC's (REX, Ba2 stable) debt vis-a-vis the cash flow generated by the operating assets at TEP and its share of REX. Prairie's consolidated financial leverage (debt/EBITDA ratio) at year-end 2020 will be significantly above 7x. Moody's sees little chance for the leverage to improve significantly in 2021, as growth projects are challenged. Commodity price stress in 2020 presents a challenging environment for midstream companies' growth options as oil and gas production volume will not grow significantly in 2021. Prairie benefits from its meaningful size, its predominantly interstate pipeline asset base with cash flow from long-term firm transportation contracts and some earnings diversification. Prairie's financial sponsors include Blackstone Infrastructure Partners, and the ratings in corporate governance considerations including the sponsors aggressive financial policies with respect to financial leverage and distributions. TEP's senior unsecured notes are rated B1, the same as Prairie's B1 CFR. Although the notes are subordinated to TEP's $2.25 billion senior secured revolving credit facility (unrated), which has a senior secured priority claim to TEP's assets, the notes are in a structurally superior position within the capital structure and have a priority claim to the assets compared to Prairie's $1.5 billion senior secured term loan. Prairie's term loan is rated B3, two notches below Prairie's B1 CFR reflecting its structural subordination to TEP's revolving credit facility and unsecured notes. The term loan is secured only by Prairie's equity ownership interests in TEP and its General Partner and is the most junior debt in the capital structure. Moody's expects Prairie to maintain adequate liquidity through 2021. TEP has a $2.25 billion senior secured revolving credit facility that matures in June 2022. As of September 30, 2020, TEP had $814 million outstanding on the revolver. TGE has approximately $200 million of cash that can be used for Prairie's liquidity needs. The company's cash flow from operations will be sufficient to meet its working capital needs, maintenance capital spending, and debt servicing. The revolving credit facility contains three financial covenants including a maximum debt / EBITDA of 5.5x, a senior secured leverage covenant of 3.75x, and a minimum EBITDA / interest of 2.5x (all covenants determined at the TEP level, excluding Prairie debt). Moody's expects the company to remain in compliance with these covenants. TEP's dividends to Prairie will adequately cover its debt service requirements. The Term Loan has amortization of 1% per annum, paid quarterly beginning December 31, 2023, as well as a required excess cash flow sweep. Prairie's term loan requires the company to maintain a stand-alone Prairie debt service coverage ratio in excess of 1.1x, and there is solid headroom for compliance with this covenant. Prairie's stable rating outlook reflects the predictable cash flow from the company's existing long-term firm transportation contracts and some earnings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS If Prairie's debt leverage is increased through weaker than expected earnings, aggressive distribution policies or debt-funded growth then its ratings could be downgraded. Consolidated Debt/EBITDA sustained above 7.5x could result in a ratings downgrade. Prairie's ratings could be upgraded if the company reduces debt and enhances its contracted revenue position and counterparty risk. Consolidated Debt/EBITDA below 7x could be supportive of a ratings upgrade. The principal methodology used in these ratings was Midstream Energy published in December 2018. Prairie, though its ownership of TEP, provides crude oil transportation, natural gas transportation and storage, processing and water business services for customers in the Rocky Mountain, Appalachian and Midwest regions of the United States. TEP's operating segments consist of natural gas transportation, crude oil transportation, and gathering, processing & terminalling. TEP's assets include 100% ownership in PONY, 75% ownership in REX, and 100% ownership in TIGT, Trailblazer, Tallgrass Midstream (TMID), Tallgrass Terminals and Tallgrass Water. Post the Take-Private transaction closing in the second quarter of 2020, Prairie controls and indirectly owns 100% of TEP. The total debt outstanding across the corporate structure will be supported by the cash flow generated by the operating assets under TEP, including its 75% ownership of REX. PURDUE PHARMA: Sacklers Deflect Blame for Opioid Crisis ------------------------------------------------------- Law360 reports that the lawmakers on both sides of the aisle ripped members of the Sackler family at a congressional hearing Thursday, Dec. 17, 2020, with one congressman calling the Purdue Pharma LP owners "evil" for their role in the opioid crisis. David Sackler and his cousin Kathe Sackler expressed remorse but deflected responsibility for the addiction epidemic, which has claimed the lives of hundreds of thousands of Americans who became hooked on painkillers such as Purdue's OxyContin. During a three-and-a-half-hour teleconference hearing, lawmakers on the House Oversight Committee tore into the pair, asking blistering questions about $10 billion that was moved from the pharmaceutical company to the family. According to The Guardian, the Democrat Jim Cooper of Tennessee, a member of the House of Representatives oversight committee questioning the two at the online hearing, said that watching the pair testify made his "blood boil". "I'm not sure I know of any family in America that is more evil than yours," Congressman Cooper said. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell LLP and Dechert LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Prime Clerk LLC as claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in Debtors' bankruptcy cases. David M. Klauder, Esq., was appointed as fee examiner. The fee examiner is represented by Bielli & Klauder, LLC. QUANTUM HEALTH: Moody's Assigns B3 CFR on Positive Cash Flow ------------------------------------------------------------ Moody's Investors Service assigned first-time ratings to Quantum Health, Inc. including a B3 Corporate Family Rating, a B3-PD Probability of Default Rating and a B3 senior secured rating. The outlook is stable. Proceeds from a $300 million term loan will be used with equity from current sponsor Great Hill Partners and new equity sponsor Warburg Pincus LLC to recapitalize the company. Ratings assigned: Issuer: Quantum Health, Inc.: Corporate Family Rating, assigned B3 Probability of Default Rating, assigned B3-PD Senior secured term loan, assigned B3 (LGD4) Senior secured revolving credit facility, assigned B3 (LGD4) Outlook action: Assigned, stable outlook RATINGS RATIONALE Quantum's B3 rating reflects its leading position in the healthcare benefits navigation industry, its track record of profitability and positive cash flow, and its strong growth outlook due to rising customer demand. Moody's anticipates that the company will continue to grow its client base of large employers, resulting in significant expansion in revenue and earnings. Quantum offers a compelling value proposition in helping employers reduce employee benefit costs and complexity while improving member satisfaction. These strengths are tempered by very high financial leverage as measured by debt/EBITDA, which Moody's anticipates will remain above 8x over the next 12 to 18 months. Although customer diversity is strong, Quantum's business model diversity is low with a narrow service offering. In addition, the benefits navigation industry remains somewhat nascent, with overall low penetration among large employers and high market fragmentation. As such, Quantum's ability to competitively differentiate itself over the long-term is uncertain. Moody's anticipates that Quantum will maintain good liquidity over the next 12 to 18 months, reflecting cash on hand of over $10 million, positive operating cash flow, and full availability under the $60 million revolving credit facility. Expansion in the company's headquarters will constrain free cash flow for the next 6 to 12 months. There are no financial maintenance covenants in the term loan, and the revolver has a springing net leverage covenant (under 9.5x) if 40% of the revolver is drawn. Term loan amortization is modest at $3 million per year. Moody's anticipates good cushion under the covenant, if tested. The first lien credit facility is expected to contain covenant flexibility for transactions that could adversely affect creditors, including: incremental facility capacity up to the greater of $60 million and 100% of EBITDA plus any unused general debt basket capacity (up to the greater of $36 million and 60% of EBITDA); the ability to transfer assets to unrestricted subsidiaries, subject to carve-out capacity, with no additional "blocker" protections; the ability to release a guarantee when a subsidiary ceases to be wholly owned; and step downs in the asset sale prepayment requirement to 50% and 0% if the leverage ratio is equal to or less than 5.0x and 4.5x, respectively. ESG considerations are material to the rating. Social factors are significant for companies operating in the employee benefits and care coordination areas. Demographics and societal trends favor increasing demand for these services, given rising medical costs and employers' goals of providing attractive but efficient healthcare benefits. However, social risks stem from the handling of confidential patient information, exposure to security breaches, litigation risks, and various regulatory risks that could change the nature of employer-provided healthcare benefits. With respect to legal risks, Quantum may be exposed to claims arising from a determination that the company acts in the capacity of a healthcare provider, or exercise undue influence or control over a healthcare provider. Among governance considerations, Quantum's private equity ownership creates risk of aggressive financial policies and shareholder distributions. The stable outlook incorporates Moody's expectation that operating cash flow will remain positive and that new business wins will result in declining debt/EBITDA. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include a sustained track record of solid growth through new customer wins and high customer retention, and greater diversity in the company's business model and service offerings. Quantitatively, debt/EBITDA sustained below 5x would support an upgrade. Factors that could lead to a downgrade include significant client terminations, business disruptions or client servicing issues stemming from high growth. In addition, an erosion in the company's liquidity could cause a downgrade. Headquartered in Columbus, Ohio, Quantum Health, Inc. provides healthcare coordination and navigation services to large US employers offering health benefits to employees. Quantum is privately-owned by Great Hill Partners, Warburg Pincus LLC and company management. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. ROCKET TRANSPORTATION: Seeks to Hire Jaafar Law as Counsel ---------------------------------------------------------- Rocket Transportation, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Michigan to employ Jaafar Law Group PLLC, as counsel to the Debtor. Rocket Transportation requires Jaafar Law to: a. assist in the preparation of petition, schedules and statements and any amendments; b. assist in the preparation of client for duties while in a Chapter 11 bankruptcy; c. attend at Initial Debtor Interview ("IDI") scheduled by the Office of the United States Trustee and facilitation of Debtor's requirements for the IDI meeting, attendance at any initial status conference as directed by the court, and attendance at the Sec. 341 meeting of creditors; d. draft and prepare first day motions, employment applications, and other related pleadings; e. attend at the 60 day status conference and all other hearing appurtenant to Subchapter V of Chapter 11; f. manage the receipt, review, and filing of Monthly Operating Reports and any other documents, reports, or filings that Debtor is required to submit; g. assist in the preparation of applications for compensation of Jaafar Law and any other professionals that may be employed by the estate; h. prepare pleadings related to sale applications or valuation motions, if any; i. attend at hearings and meetings not otherwise designated above; j. negotiate with creditors regarding critical aspects of the Chapter 11 proceeding and the confirmation process; k. consultat with the Debtor regarding the Chapter 11 proceeding and advising the responsible party regarding various aspects of the matter; l. consult with professionals who the estate may need to hire; m. prepare the Combined Plan and Disclosure Statement and ballots and service upon creditors; and n. file and represent during any adversary proceedings that may arise; and o. provide all other responsibilities and duties of counsel not specified here will also be undertaken by Jaafar Law. Jaafar Law will be paid at these hourly rates: Attorneys $250 Paralegals $85 Jaafar Law received an initial retainer of $15,000 and as of the filing date there was a balance of $8,980 remaining on hand. Jaafar Law will also be reimbursed for reasonable out-of-pocket expenses incurred. David Ross Ienna, a partner of Jaafar Law Group PLLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Jaafar Law can be reached at: David Ross Ienna, Esq. JAAFAR LAW GROUP PLLC 1 Parklane Blvd., Ste 729E Dearborn, MI 48124 Tel: (888) 324-7629 E-mail: david@fairmaxlaw.com About Rocket Transportation Rocket Transportation, Inc., is a privately held company in the general freight trucking industry. Rocket Transportation, Inc., based in Taylor, MI, filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 20-52337) on Dec. 14, 2020. In the petition signed by Amar Al Hadad, president, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Maria L. Oxholm presides over the case. JAAFAR LAW GROUP PLLC, serves as bankruptcy counsel. ROCKIES EXPRESS: Moody's Downgrades CFR to Ba2, Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded Rockies Express Pipeline LLC's (REX) Corporate Family Rating to Ba2 from Ba1, its Probability of Default Rating to Ba2-PD from Ba1-PD and the unsecured notes rating to Ba2 from Ba1. REX's rating outlook is stable. "REX's ratings downgrade reflects the weakened counterparty credit strength of its customer base and the high financial leverage and fundamental challenges faced by its 75% owner, Prairie ECI Acquiror LP," commented Sreedhar Kona, Moody's senior analyst. "REX's still moderate debt leverage and strong east to west contract coverage backed by Appalachian production supports its stable outlook." Debt List: Issuer: Rockies Express Pipeline LLC Corporate Family Rating, Downgraded to Ba2 from Ba1 Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD Senior Unsecured Notes, Downgraded to Ba2 (LGD4) from Ba1 (LGD4) Outlook Actions: Issuer: Rockies Express Pipeline LLC Outlook, Remains Stable RATINGS RATIONALE REX's CFR downgrade to Ba2 is driven by the sustained overall deterioration of its counterparty average credit profile. The bankruptcy filings by REX's west-to-east counterparty Ultra Resources Corp (ratings withdrawn) and its east-to-west counterparty Gulfport Energy Corporation (ratings withdrawn) put some portion of REX's cash flow at risk. The downgrade of REX's parent Prairie ECI Acquiror LP (B1 stable), which indirectly owns 75% of REX was also a factor in REX's downgrade. While REX is 25% owned by Phillips 66 Company, a subsidiary of Phillips 66 (A3 negative), and that company has important participatory rights in key financial decisions, Prairie's dependence on REX's cash flows has only increased and Prairie's ability to take supportive actions like reducing debt at REX is unlikely for the medium term. REX's Ba2 CFR benefits from its fully contracted east-to-west capacity, and partially contracted west-to-east capacity, which will enable the company to maintain its cash flow coverage of its moderate debt burden. While REX's credit metrics are relatively strong, its credit profile is constrained by its customer base and their credit quality. The pipeline's customers are almost entirely comprised of E&P companies, or 'supply-push' customers, that are directly exposed to commodity prices. The credit quality of this customer base, specifically the east-to-west customers, has declined significantly through 2020 due to challenged natural gas fundamentals. While natural gas prices and fundamentals have rebounded recently, the average customer credit quality of REX's customers has durably declined and is still lower than REX's Ba2 ratings. REX's relatively low debt leverage, good customer diversification, connectivity to the prolific Appalachian Basin and reasonably priced transportation contracts provide some offset to the risks from its customer credit quality. Moody's forecasts REX's debt/EBITDA at the end of 2020 to be 3.7x and improving slightly through 2021, attributable to modestly improved cash flow from higher throughput volumes and cash flow due to Cheyenne hub gas volumes. REX's stable outlook reflects the company's predictable cash flow, strong east-to-west contract coverage and low debt leverage. It is also supported by the stable outlook on Prairie. REX will maintain good liquidity, reflecting consistent cash flow generation and no near-term debt maturities. As of September 30, 2020, the company had a cash balance of $4 million and $9 million outstanding under its $150 million senior unsecured revolving credit facility maturing in November 2024. Based on capital spending guidance, REX should generate positive free cash flow after covering interest expense and capital spending. The revolving credit facility contains one financial covenant consisting of a maximum debt / EBITDA set at 4.5x. The company will remain in compliance with this covenant. The REX limited liability company agreement provides that cash in excess of that required to operate the business is distributed to owners, leaving the company with nominal cash balance. REX first maturity after its revolver is $400 million of senior notes maturing in 2025. REX's senior unsecured notes are rated Ba2, the same as the company's Corporate Family Rating (CFR). The senior unsecured notes are rated at the same level as the CFR because the company's long-term debt, which includes a $150 million revolving credit facility, is all unsecured. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS REX's ratings could be considered for an upgrade if the company's customer credit quality improves significantly and a higher portion of its west-to-east capacity is re-contracted with creditworthy counterparties for longer terms. In addition to REX's stand-alone credit profile improving, an upgrade of Prairie would be supportive of considering an upgrade at REX. An increase in financial leverage or a meaningful decrease in interest coverage could lead to a ratings downgrade. If Debt/EBITDA is sustained above 5x or there is a significant deterioration in customer credit quality then the ratings could be downgraded. A downgrade of Prairie could also pressure REX's ratings. The principal methodology used in these ratings was Natural Gas Pipelines published in July 2018. REX owns a 1,712-mile interstate natural gas pipeline system that reaches from the Rocky Mountains area of Wyoming and Colorado to Ohio. REX is owned 75% by Tallgrass Energy Partners (TEP) and 25% by Phillips 66 Company, a subsidiary of Phillips 66 (A3 negative). ROCKY MOUNTAIN: Hires Blackwell & Pressley as Accountant -------------------------------------------------------- Rocky Mountain Trails, LLC, seeks authority from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Blackwell & Pressley, CPAs, PLLC, as accountant to the Debtor. Rocky Mountain requires Blackwell & Pressley to assist the Debtor in the preparation of monthly operating reports and related statements, federal income tax returns and related schedules, and, if necessary, periodic financial statements. Blackwell & Pressley will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Phillip B. Presley, a name partner at Blackwell & Pressley, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Blackwell & Pressley can be reached at: Phillip B. Presley Blackwell & Pressley, CPAs, PLLC 100 S. 15 th Street Corsicana, TX 75110 Tel: (903) 874-1040 About Rocky Mountain Trails Rocky Mountain Trails, LLC, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Tex. Case No. 20-60306) on June 1, 2020, disclosing under $1 million in both assets and liabilities. The Debtor's counsel is Gordon Mosley, Esq. RUBY TUESDAY: Bankruptcy Plan Cleared for Creditor Vote ------------------------------------------------------- Daniel Gill of Bloomberg Law reports that Ruby Tuesday won court clearance to seek creditor votes on its bankruptcy plan. Ruby Tuesday can seek votes for its bankruptcy plan that would swap debt for equity if the casual restaurant chain can't reach a better deal by selling its business. The official unsecured creditors committee is recommending its constituents to reject the plan, according to the disclosure statement approved Friday, Dec. 18, 2020, by Judge John T. Dorsey of the U.S. Bankruptcy Court for the District of Delaware. Under the current version of the plan, such creditors stand to share from a $3 million pool and would receive between 2.5% and 2.7% of claims between $111 million and $120 million. About Ruby Tuesday Founded in 1972 in Knoxville, Tennessee, Ruby Tuesday, Inc. -- http://www.rubytuesday.com/-- is dedicated to delighting guests with exceptional casual dining experiences that offer uncompromising quality paired with passionate service every time they visit. From signature handcrafted burgers to the farm-grown goodness of the Endless Garden Bar, Ruby Tuesday is proud of its long-standing history as an American classic and international favorite for nearly 50 years. The Company currently owns, operates and franchises casual dining restaurants in the United States, Guam, and five foreign countries under the Ruby Tuesday brand. On Oct. 7, 2020, Ruby Tuesday, Inc., and 50 affiliates sought Chapter 11 protection. The lead case is In re RTI Holding Company, LLC (Bankr. D. Del. Lead Case No. 20-12456). Ruby Tuesday was estimated to have $100 million to $500 million in assets as of the bankruptcy filing. The Hon. John T. Dorsey is the case judge. Ruby Tuesday is advised by Pachulski Stang Ziehl & Jones LLP as legal counsel, CR3 Partners, LLC, as financial advisor, FocalPoint Securities, LLC, as investment banker, and Hilco Real Estate, LLC, as lease restructuring advisor. Epiq is the claims agent, maintaining the page https://dm.epiq11.com/RubyTuesday RUE21 INC: Opening 15 New Stores 3 Years After Emergence -------------------------------------------------------- Ben Unglesbee of Retail Diver reports that Rue21 plans to open 15 new brick-and-mortar stores starting in January 2021, a little more than three years after emerging from bankruptcy. Chief Financial Officer Michele Pascoe said in a press release that the women's apparel retailer has been beating expectations and increasing its comparable sales year over year. It recently opened three new stores, in addition to those planned for 2021r. Rue21's performance and financial position allowed it to retire debt while increasing availability under its asset-based facility with Bank of America, leaving it with $100 million in total liquidity. By its own account, Rue21 is outperforming many of its peers in the apparel space, which was struggling pre-pandemic and has suffered even deeper traffic and sales losses in the COVID-19 era. The retailer filed for bankruptcy in 2017 amid a wave of filings by specialty retailers, many of them private equity-owned and as a result overburdened with debt. Chapter 11 gave the company a chance to shrink its footprint, by more than 400 stores, and shed millions in debt. It also changed hands, with lenders taking over the company from private equity firm Apax Partners. Once with a footprint of around 1,200, today Rue21 has nearly 700 stores spanning most of the country and promises "quality styles at accessible price." According to the company, the retailer is " significantly outperforming the apparel market trends" in the pandemic era. Rue21 has been busy this year, bringing on former HSN President Bill Brand as its next CEO. It has also launched a loyalty program, "rue rewards," that has 2.8 million members. Additionally, it has expanded plus-sized apparel to more of its stores. Like several other apparel retailers at the time, and many more in the years since, Rue21 fell into bankruptcy as its debt load ran into changing shopping trends, namely a continuing decline in mall traffic. Its journey through bankruptcy was relatively swift and smooth, allowing for a quick reorganization. Other retailers from that bankruptcy class haven't turned out so lucky. Gymboree and Payless, which also both filed and exited bankruptcy in 2017 with lender-driven reorganizations, both filed for bankruptcy again last year. Both liquidated their U.S. footprints in bankruptcy. (Payless has since planned to open new stores in North America.) Today, apparel retailers make up an outsized share of 2020 bankruptcies and distressed companies as the pandemic weighs on mall traffic and consumers, stuck at home, shift spending away from clothing. About rue21 rue21 -- http://www.rue21.com/-- is a teen specialty apparel retailer. For over 37 years, rue21 has been famous for offering the latest trends at an affordable price point. It has core brands in girls' apparel (rue21), intimate apparel (true), girls' accessories (etc!), girls' cosmetics (ruebeaute!), guys' apparel and accessories (Carbon), girls' plus-size apparel (rue+), and girls' swimwear (ruebleu). The company is headquartered in Warrendale, Pennsylvania and have one distribution center located in Weirton, West Virginia. Headquartered just north of Pittsburgh, Pennsylvania, rue21 had 1,179 stores in 48 states in shopping malls, outlets and strip centers, and on its website. In April, Company began the process of closing approximately 400 underperforming stores in its 1,179 store fleet in order to streamline operations. On May 15, 2017, rue21, inc., and affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Lead Case No. 17-22045). Todd M. Lenhart, the Company's senior vice president, treasurer, chief financial officer, and chief accounting officer, signed the petitions. The Debtors have sought joint administration of the Chapter 11 cases. The Honorable Gregory L. Taddonio is the case judge. The Debtors tapped Reed Smith LLP as local counsel; Kirkland & Ellis LLP as bankruptcy counsel; Rothschild Inc., as investment banker; Berkeley Research Group, LLC, as financial advisor; A&G Realty Partners, LLC, as real estate advisor and consultant; and Kurtzman Carson Consultants LLC as claims and notice agent. rue21 estimated $1 billion to $10 billion in assets and liabilities. Counsel to the DIP Term Loan Agent, DIP Term Loan Lenders, Prepetition Term Loan Agent and Term Loan Steering Committee are Scott J. Greenberg, Esq., Michael J. Cohen, Esq., and Jeffrey J. Bresch, Esq., at Jones Day. Counsel to the DIP ABL Agent and the Prepetition ABL Agent are Julia Frost-Davies, Esq., and Amelia C. Joiner, Esq., at Morgan Lewis & Bockius LLP; and James D. Newell, Esq., and Timothy Palmer, Esq., at Buchanan Ingersoll & Rooney PC. The Sponsor Lenders are represented by Simpson Thacher & Bartlett's Elisha D. Graff, Esq. An Ad Hoc Cross-Holder Group is represented by Milbank, Tweed, Hadley & McCloy's Gerard Uzzi, Esq., and Eric Stodola, Esq. Andrew R. Vara, Acting U.S. Trustee for Region 3, on May 23, 2017, appointed seven creditors to serve on the official committee of unsecured creditors. The Committee has tapped Cooley LLP as counsel; and Fox Rothschild LLP as local counsel. SAEXPLORATION HOLDINGS: Court Okays SEC Accounting Fraud Settlement ------------------------------------------------------------------- Jennifer Bennett of Bloomberg Law reports that SAExploration Holdings Inc. secured a final judgment approving an injunction-only settlement to end SEC accounting fraud allegations in federal court in New York. The seismic oil field mapper and its former executives faced Securities and Exchange Commission accusations of artificially and materially inflating reported revenue. SAE didn't admit wrongdoing as part of the final judgment in the U.S. District Court for the Southern District of New York. SAE is permanently enjoined from violating certain federal securities laws, Judge Paul G. Gardephe's judgment said. The judgment didn't resolve allegations against four of the company's former executives. About SAExploration Holdings Based in Houston, Texas, SAExploration Holdings, Inc., and affiliates are full-service global providers of seismic data acquisition, logistical support and processing services to their customers in the oil and natural gas industry that operate through wholly-owned subsidiaries, branch offices and variable interest entities in North America, South America, Asia Pacific, West Africa and the Middle East. For more information, visit https://www.saexploration.com/ SAExploration Holdings, Inc. and affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-34306) on Aug. 27, 2020. The petitions were signed by Michael Faust, chairman, CEO, and president. At the time of the filing, Debtors had estimated assets of between $1 million to $10 million and liabilities of between $100 million to $500 million. Judge Marvin Isgur oversees the case. The Debtors have tapped Porter H Edges LLP as their bankruptcy counsel, Imperial Capital, LLC and Winter Harbor LLC as financial advisors, and Epiq Corporate Restructuring, LLC as claims, noticing, solicitation and administrative agent. SAHBRA FARMS: Shelly Says Settlement With Streetsboro Reached ------------------------------------------------------------- Shelly Materials, Inc., a creditor of debtor Sahbra Farms, Inc., says a settlement has been reached with the City of Streetsboro that would allow it to resume mining on the Debtor's property. Shelly has been involved in active litigation with the City of Streetsboro, Ohio Planning and Zoning Commission ("City") since 2016 with respect to the issuance of a conditional use permit to allow Shelly to conduct surface mining on certain real property ("Property") owned by the Debtor pursuant to a mineral lease between Shelly and Debtor. At the time the Debtor filed its proposed Disclosure Statement, the Debtor described Shelly as having reached an agreement in principle with the City to resolve the litigation and, further, that a "mining permit" would be issued in the next several months, a statement that was, from Shelly's perspective, an inaccurate recitation of the state of negotiations as they then existed. Accordingly, Shelly filed on Oct. 14, 2020, its limited objection to the adequacy of the Disclosure Statement. Subsequently, circumstances have changed since the filing of the Limited Objection. According to a Dec. 4, 2020 filing by Shelly, as a result of significant time, effort, and determined negotiation from the parties, Shelly and the City have reached a compromise resolution that will terminate the litigation relating to the conditional use permit and allow Shelly to mine on Debtor's property in accordance with the terms of an Amended Stipulated Judgment Entry to be filed in the Portage County Court of Common Pleas and its Mineral Lease, as amended. Notably, although the City approved and executed the Settlement Agreement, its effectiveness is conditioned upon Debtor's (a) dismissal of the action captioned as State of Ohio Ex Rel Sahbra Farms, Inc. v. City of Streetsboro, Ohio and City of Streetsboro Planning and Zoning Commission, case number 2020CV0051 pending on the docket of the Portage County Common Pleas Court ("Sahbra Litigation"); and (b) approval of the mining plan appended to the Settlement Agreement, a copy of which Shelly previously submitted in draft to Debtor, through its counsel, on Nov. 18, 2020. Pursuant to the express terms of the Mineral Lease, although the Debtor is entitled to review and approve the mining plan, its approval may not be unreasonably withheld. Assuming the Debtor provides prompt written approval of the mining plan and dismisses the Sahbra Litigation, Shelly will have a clear path to obtain necessary mining permits from the Ohio Department of Natural Resources, a process which takes, on average 6 or so months. Because mining operations do not occur between the months of November and April, assuming prompt satisfaction of the conditions and the issuance of its mining permits, Shelly anticipates it could commence mining beginning in April of 2022. In light of the changed circumstances, Shelly submits that a copy of the Settlement Agreement should be included with Disclosure Statement to ensure that the disclosures contain "adequate information" within the meaning of 11 U.S.C. Sec. 1125(a)(1). Attorney for Shelly Materials: EASTMAN & SMITH LTD. Mark W. Sandretto One SeaGate, 24th Floor P.O. Box 10032 Toledo, OH 43699-0032 Telephone:(419) 241-6000 Fax:(419) 247-1777 E-Mail: mwsandretto@eastmansmith.com About Sahbra Farms Sahbra Farms Inc. -- a horse breeder in Streetsboro, Ohio -- sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 19-51155) on May 16, 2019. In the petition signed by its president, David Gross, the Debtor disclosed $3,286,476 in assets and $2,684,224 in debt. The Hon. Alan M. Koschik is the case judge. Thomas W. Coffey, Esq. at Coffey Law LLC, is the Debtor's lead counsel. Kenneth J. Fisher Co., L.P.A., has been tapped as special counsel. SCARISBRICK LAND: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: Scarisbrick Land Holdings, LLC SLH, LLC c/o Jon Bowerbank 20529 Rich Valley Rd Abingdon, VA 24210-1787 Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Western District of Virginia Case No.: 20-71134 Judge: Hon. Paul M. Black Debtor's Counsel: Scot S. Farthing, Esq. SCOT S. FARTHING, ATTORNEY AT LAW, PC PO Box 1296 Abingdon, VA 24212-1296 Tel: (276) 628-9295 Email: scotf@sfarthinglaw.com Total Assets: $5,498,205 Total Liabilities: $2,338,323 The petition was signed by Jon Bowerbank, sole member/manager. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/W3ZUSFA/Scarisbrick_Land_Holdings_LLC__vawbke-20-71134__0001.0.pdf?mcid=tGE4TAMA SEADRILL LTD: AOD Facility Lenders Use $97.2 Mil. to Repay Debt --------------------------------------------------------------- Seadrill Limited (OSE: SDRL, OTCQX:SDRLF) said in a Dec. 16, 2020, statement that its board has been informed that the lenders in the AOD facility (under which Asia Offshore Rig 1 Limited, Asia Offshore Rig 2 Limited and Asia Offshore Rig 3 Limited are borrowers) have utilised $97.2 million of AOD's cash contained in restricted accounts secured against their facility to repay a corresponding amount of the $210 million debt outstanding as of Dec. 16. This leaves $112.8 million of such debt outstanding going forward. The AOD facility maintains sufficient cash to support AOD's operations and this event will have no impact to continued operations. The face value of the net debt on the balance sheet remains unchanged as a result of this action and Seadrill maintains its strong liquidity position as it progresses in discussions with the broader group of lenders. The Company's cash balance remains sufficient to manage liquidity requirements through a formal restructuring process. At the close of third quarter 2020, Seadrill had a total cash balance of $851 million including the cash in the AOD companies. The Company continues constructive dialogue with its lenders and maintains its readiness to carry out a comprehensive restructuring of its balance sheet which may involve the use of a court-supervised process. It is expected that potential solutions will lead to significant equitization of debt which is likely to result in minimal or no recovery for current shareholders. About Seadrill Ltd. Seadrill Limited (OSE:SDRL, OTCQX:SDRLF) -- http://www.seapdrill.com/-- is a deepwater drilling contractor providing drilling services to the oil and gas industry. As of March 31, 2018, it had a fleet of over 35 offshore drilling units that include 12 semi-submersible rigs, 7 drillships, and 16 jack-up rigs. On Sept. 12, 2017, Seadrill Limited sought Chapter 11 protection after reaching terms of a reorganization plan that would restructure $8 billion of funded debt. It emerged from bankruptcy in July 2018. Demand for exploration and drilling has fallen further during the COVID-19 pandemic as oil firms seek to preserve cash, idling more rigs and leading to additional overcapacity among companies serving the industry. In June 2020, Seadrill wrote down the value of its rigs by $1.2 billion and said it planned to scrap 10 rigs. Seadrill is presently in talks with lenders on a restructuring of its $5.7 billion bank debt. Seadrill announced Dec. 14, 2020 that that the forbearance agreements entered into by the Company with certain creditors in respect of the group's senior secured credit facility agreements and leasing arrangements expired Dec. 14, 2020. About Seadrill Partners Seadrill Partners LLC (NYSE: SDLP) is a limited liability company formed by deepwater drilling contractor Seadrill Ltd. (OTCMKTS:SDRLF), to own, operate and acquire offshore drilling rigs. Seadrill Partners was founded in 2012 and is headquartered in London, the United Kingdom. Seadrill Partners, set up as an asset-holding unit, owns four drillships, four semi-submersible rigs and three so-called tender rigs which are all operated by Seadrill Ltd. Seadrill Partners LLC and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on Dec. 1, 2020. Seadrill Partners disclosed $4,579,300,000 in assets and $3,122,300,000 in total debts of June. 30, 2020. JACKSON WALKER L.L.P., led by Matthew D. Cavenaugh, is the Debtors' counsel. SENIOR CARE: Amended Second Joint Plan Confirmed by Judge --------------------------------------------------------- Judge Catherine Peek McEwen has entered an order confirming the Amended Second Joint Plan of Liquidation of Senior Care Group, Inc., Key West Health and Rehabilitation Center, LLC, and The Bridges Nursing and Rehabilitation, LLC. At the confirmation hearing, it was announced that the Debtor and The Home Association, Inc. ("THA") had agreed to settle and resolve the THA Objection with the Reorganized Debtor paying $38,500 to THA as a cure claim in full and final satisfaction of amounts in the THA Objection. No party objected to any of the statements in Michaelle Vaughan's confirmation affidavit or sought to cross-examine Michelle Vaughan at the Confirmation Hearing. SeaCoast Elite Management, LLC, also filed an affidavit in support of confirmation of the Plan. The Court finds that the Plan and the Confirmation Order are fair, equitable, reasonable, and proper; are in the best interests of the Debtors' estates; and are binding upon all creditors and holders of interests. The Plan has been proposed in good faith and not by any means forbidden by law by the Debtors. The Plan treatment of holders of claims specified in 11 U.S.C. Sec. 507(a)(3)-(7) complies with the requirements of 11 U.S.C. Sec. 1129(a)(9). The Plan treatment of Holders of Allowed Priority Tax Claims to be paid by Key West, complies with the requirements of 11 U.S.C. Sec. 1129(a)(9). As reported in the Troubled Company Reporter, according to the Disclosure Statement, SeaCoast Elite Management will acquire control of Senior Care through the designation of all of the board members of Senior Care on the Effective Date, will fund the cash contribution required to consummate the Plan, and to pay certain allowed claims, including any allowed secured claims. The Bankruptcy Court earlier authorized the Debtors to sell the Key West operations to Orchid Cove Health Group, LLC. The closing of the Key West Sale occurred on Oct. 15, 2020 and the Key West Net Sale Proceeds, being $1,571,433, are being held in the Debtors' Bankruptcy Counsel's trust account. Regal Healthcare Acquisitions LLC was the stalking horse in the Key West Sale and filed a Motion For Payment of Break-Up Fee as Super-Priority Administrative Claim of $100,000 From Proceeds of Key West Sale. The Committee, along with the Debtor, filed an objection. Pursuant to the Regal Motion, Regal claims a super priority claim as a charge on the proceeds of the Key West Sale. The Court will resolve the dispute. Counsel to the Debtors, counsel to the Committee and the Reorganized Debtors have agreed to escrow the sum of $773,000 on the Effective Date on account of projected Allowed Professional Administrative Expense Claims to be paid by the Reorganized Debtors, with the other one-third of the Allowed Professional Administrative Expense Claims to be paid by the Liquidation Trust from the Key West Liquidation Trust Assets. A full-text copy of the Plan Confirmation Order dated Dec. 10, 2020, is available at https://bit.ly/34vQlcK from PacerMonitor.com at no charge. Attorneys for the Debtors: Scott A. Stichter STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 East Madison Street, Suite 200 Tampa, Florida 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: sstichter@srbp.com About Senior Care Group Senior Care Group, Inc., is a non-profit corporation which, through its wholly-owned subsidiaries, provides residents and patients with nursing and long-term health care services. Senior Care Group and its six affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 17-06562) on July 27, 2017. In the petition signed by David R. Vaughan, chairman of the Board, Senior Care Group estimated asset and liabilities of $1 million to $10 million. Judge Catherine Peek Mcewen oversees the cases. Stichter Riedel Blain & Postler, P.A., is the Debtors' bankruptcy counsel. Akerman LLP is the special healthcare counsel. Holliday Fenoglio Fowler, LP, was hired as broker. The U.S. Trustee for Region 21 appointed Mary L. Peebles as the patient care ombudsman for Key West Health and Rehabilitation Center LLC, SCG Baywood LLC, SCG Gracewood LLC, and SCG Laurellwood, LLC. On Aug. 18, 2017, the U.S. trustee appointed an official committee of unsecured creditors. The Committee retained Stevens & Lee, P.C., as its bankruptcy counsel; and Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., as co-counsel. SEP-PRO SYSTEMS: Hires Nelson M. Jones III as Counsel ----------------------------------------------------- Sep-Pro Systems, Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ the Law Firm of Nelson M. Jones III, as counsel to the Debtor. Sep-Pro Systems requires Nelson M. Jones III to: a. assist the Debtor with the resolution of all contested claims; b. assist the Debtor with the proposing, prosecuting and consummating the plan of reorganization; c. advise the Debtor with regard to any litigation matters that exist or might arise prior to confirmation of the plan of reorganization; d. prepare all appropriate pleadings to be filed in this case; and e. perform any other legal services that may be appropriate in connection with this reorganization case. Nelson M. Jones III will be paid at these hourly rates: Attorneys $250 to $400 Paralegals $125 to $150 Nelson M. Jones III will also be reimbursed for reasonable out-of-pocket expenses incurred. Nelson M. Jones III, the firm's founding partner, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Nelson M. Jones III can be reached at: Nelson M. Jones III, Esq. Law Firm of Nelson M. Jones III 440 Louisiana Street, Suite 1575 Houston, TX 77002 Tel: (713) 236-8736 Fax: (713) 236-8990 Fax E-mail: njoneslawfirm@aol.com About Sep-Pro Systems Sep-Pro Systems, Inc., is engaged in the the design, engineering, and fabrication of oil and gas processing equipment. Sep-Pro Systems, based in Houston, TX, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-35858) on Dec. 9, 2020. In the petition signed by John Tyson, president, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The LAW OFFICE OF NELSON M. JONES III, serves as bankruptcy counsel to the Debtor. SHELTON BROTHERS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Shelton Brothers, Inc. 205 Ware Road Belchertown, MA 01007 Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court District of Massachusetts Case No.: 20-30606 Debtor's Counsel: Andrea M. O'Connor, Esq. FITZGERALD ATTORNEYS AT LAW, P.C. 46 Center Square East Longmeadow, MA 01028 Tel: (413) 486-1110 Email: amo@fitzgeraldatlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Daniel W. Shelton, president. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PWLCXOA/Shelton_Brothers_Inc__mabke-20-30606__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PKENKNI/Shelton_Brothers_Inc__mabke-20-30606__0001.0.pdf?mcid=tGE4TAMA SHERRITT INT'L: DBRS Hikes Issuer Rating to B, Trend Stable ----------------------------------------------------------- DBRS Limited upgraded Sherritt International Corporation's Issuer Rating to B with a Stable trend from Selective Default (SD) and removed the Under Review/Positive Implications status following the release of the Company's Q3 2020 results and discussions with management. DBRS Morningstar also assigned a Recovery Rating of RR6 and a rating of CCC (high) (or two notches below the Issuer Rating), also with a Stable trend, to Sherritt's new Second Lien Notes. Despite the pending expiry of the Puerto Escondido/Yumurí production sharing contract (PSC), the upgrade to B is because Sherritt's business risk profile is in the BB category, supported by its relatively long reserve life and lower operating cost structure at its nickel operations, partially offset by its pending smaller size. The Stable trend reflects expectations that nickel prices will remain at approximately USD 7 per pound over the next three years, based on Bloomberg consensus nickel price forecasts (as of November 23, 2020), underpinned by the ongoing shift to electric vehicles in many economies, especially in China. DBRS Morningstar's Recovery Rating analysis was based on an enterprise valuation that included a portion of the Company's reclamation obligations and both Sherritt's forecast EBITDA and expected dividend stream from its Moa nickel joint-venture (JV) and that resulted in assigning the RR6 recovery rating. Please refer to "DBRS Morningstar Criteria: Recovery Ratings for Non-Investment-Grade Corporate Issuers" for the full details of this approach. On August 31, 2020, Sherritt completed its Balance Sheet Initiative (the Transaction), which resulted in the Company exchanging its outstanding unsecured debt for a total of $433 million of new Second Lien Notes and Junior Notes (please refer to the DBRS Morningstar press release published on September 1, 2020, for full details of the Transaction). While the Transaction reduced the Company's debt, the pending expiry at the end of Q1 2021 of the Puerto Escondido/Yumurí PSC will effectively leave Sherritt with no oil production, which will put further pressure on EBITDA and operating cash flow because the oil operations are fully consolidated into Sherritt's financials. While both the current spot nickel prices and Bloomberg consensus nickel price forecast should result in attractive operating margins, Sherritt's investment in the Moa JV is equity-accounted and the Company only receives dividends. DBRS Morningstar notes that in Q3 2020, Sherritt and its Cuban partner, General Nickel Company (GNC), agreed to convert the Moa Expansion loans into equity, meaning that while the 50/50 JV ownership structure is unchanged but all future distributions will be in the form of dividends. The Company continues to have significant cash balances and outstanding receivables at its Cuban operations. The cash balance of $165.1 million at the end of Q3 2020 included $82.1 million of cash held at the Company's Power operations; the total outstanding Oil and Gas and Power receivables were $159.1 million at the end of Q3 2020. That said, Sherritt continues to receive both dividends from its Moa JV and receivables despite the negative impact of the Coronavirus Disease (COVID-19) pandemic on Cuba's foreign currency reserves. In Q3 2020, Sherritt received USD 16.3 million in overdue energy payments, USD 14.0 million of which was received in Canada. USD 2.3 million was used to fund its oil operations. Also in Q3 2020, the Moa JV declared USD 15 million in dividends that were subsequently paid in Q4 2020 with Sherritt receiving its USD 7.5 million share of the dividend plus GNC's USD 7.5 million share due to the lag in the receipt of the Power receivables under the enhanced June 2019 agreement with Energas S.A.. DBRS Morningstar notes that the sustained payment of outstanding receivables and Moa dividends would mitigate the risk of a potential default in 2026 of the Second Lien Notes and could result in a positive rating action. Conversely, the sustained suspension of either the repayment of the outstanding energy receivables or ongoing Moa dividends could lead to a negative rating action. Notes: All figures are in Canadian dollars unless otherwise noted. SIGNATURE BANK: Fitch Expects to Rate Preferred Stock BB(EXP) ------------------------------------------------------------- Fitch expects to rate Signature Bank's (SBNY) upcoming preferred stock issuance 'BB(EXP)'. The intended use of proceeds is for general corporate purposes, but Fitch also notes that management intends to use the proceeds to support balance sheet growth in light of recent strong deposit growth trends. KEY RATING DRIVERS SBNY's assigned preferred stock rating of 'BB(EXP)' is four notches below SBNY's Long-Term Issuer Default Rating (LT IDR) of 'BBB+', in accordance with Fitch's Bank Rating Criteria (Feb. 28, 2020). The preferred stock rating includes two notches for loss severity given the securities' deep subordination in the capital structure, and two notches for nonperformance given that the coupon of the securities is noncumulative and fully discretionary. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: SBNY's preferred stock rating is sensitive to a negative change in SBNY's LT IDR. Fitch communicated in May 2020 that pressure on SBNY's LT IDR would be the result of a more prolonged economic downturn related to the coronavirus, if operating profit to risk-weighted assets were to deteriorate to below 0.5% over a period of 12 months, or if the company's common equity Tier 1 capital ratio were to drop below 9% without a credible plan to build the ratio back up. For more details on the most recent review of the LT IDR, refer to the release "Fitch Affirms Signature at 'BBB+'; Outlook Revised to Negative on Expected Coronavirus Impact" that was published to fitchratings.com on May 11, 2020. Factors that could, individually or collectively, lead to a negative rating action/downgrade: SBNY's preferred stock rating is sensitive to a positive change in SBNY's LT IDR. However, positive rating momentum for SBNY is limited at present, given the broader economic backdrop and uncertainty related to the coronavirus pandemic. SIOUX FALLS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Sioux Falls, LLC 100 Industrial Blvd. Winter Haven, FL 33880 Chapter 11 Petition Date: December 17, 2020 Court: United States Bankruptcy Court Middle District of Louisiana Case No.: 20-10829 Debtor's Counsel: William H. Patrick, III, Esq. FISHMAN HAYGOOD LLP 20 St. Charles Ave. 46th Floor New Orleans, LA 70170 Tel: (504) 556-5252 E-mail: wpatrick@fishmanhaygood.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Richard E. Straughn, manager. The Debtor stated it has no unsecured creditors. https://www.pacermonitor.com/view/IRDJYII/Sioux_Falls_LLC__lambke-20-10829__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IW3HMZQ/Sioux_Falls_LLC__lambke-20-10829__0001.0.pdf?mcid=tGE4TAMA SOLARWINDS HOLDINGS: Moody's Reviews B1 CFR for Downgrade --------------------------------------------------------- Moody's Investors Service placed all ratings of SolarWinds Holdings, Inc., including the B1 Corporate Family Rating, under review for downgrade. The company's SGL-1 Speculative Grade Liquidity (SGL) Rating is unchanged. This action follows the announcement that SolarWinds has been made aware of a cyberattack that inserted a vulnerability within its Orion monitoring products. SolarWinds also announced that the company has evidence that the vulnerability was inserted within the Orion products and existed in updates released between March and June 2020. SolarWinds has said that it has retained third-party cybersecurity experts to assist in an investigation into the matter and in the development of mitigation and remediation plans and that it is cooperating with government agencies in investigations relating to the cyberattack [1]. On Review for Downgrade: Issuer: SolarWinds Holdings, Inc. Corporate Family Rating, Placed on Review for Downgrade, currently B1 Probability of Default Rating, Placed on Review for Downgrade, currently B1-PD Senior Secured Bank Credit Facility, Placed on Review for Downgrade, currently B1 (LGD4) Outlook Actions: Issuer: SolarWinds Holdings, Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings review will focus on the potential negative credit implications resulting from the reported cyberattack. To the extent the cyberattack results in reputational damage, a material loss of customers, slowdown in business performance, or high remediation and legal costs, such factors could weaken SolarWinds' credit profile. For the nine months ended September 30, 2020, total revenue from the Orion products was approximately $343 million, or approximately 45% of total revenue [2]. SolarWinds initial comments indicated the cyberattack was limited to a certain customer subset and the company is taking steps to address the vulnerability. The full impact of the security incident has not been disclosed however, as the investigation is on-going. While SolarWinds' other products do not appear to be affected by the incident, new customers may pause purchases until there is more clarity. Its review will also assess the company's future liquidity requirements as the costs to address the incident and any potential fallout could be substantial. SolarWinds' liquidity profile was very good at September 30, 2020, with $425 million of cash and cash equivalents. For the LTM period ended September 30, 2020, Moody's adjusted Debt to EBITDA was about 4.8x and Moody's adjusted EBITDA less Capex to Interest Expense was about 4.4x. SolarWinds benefits from its robust free cash flow generation, increasing scale as measured by revenues and very high adjusted EBITDA margins. Occasional M&A activity and transaction-related expenses are likely to result in modest, periodic reductions in EBITDA margins and cash flow. SolarWinds is constrained to some degree by the company's moderate but improving scale relative to several much larger and better-capitalized peers within the IT infrastructure software market in addition to many smaller point product vendors. Though SolarWinds is still majority-owned by Silver Lake Partners and Thoma Bravo, it is publicly traded, and Moody's expects the company to maintain a more balanced financial strategy than typical of private equity-owned firms. SolarWinds' SGL-1 rating is supported by high cash balances and revolver availability of about $425 million and $118 million, respectively, at September 30, 2020. In addition, the company produced strong free cash flow of approximately $332 million in the LTM period ended September 30, 2020. SolarWinds (NYSE: SWI) is a provider of IT systems infrastructure management software. The company is publicly traded with significant ownership by Silver Lake Partners and Thoma Bravo. SolarWinds, headquartered in Austin, Texas, had non-GAAP total revenues of approximately $1,008 million as of the LTM period ended September 30, 2020. The principal methodology used in these ratings was Software Industry published in August 2018. SORROEIX INC: Dec. 29 Hearing on $3M Sale of 63 Memphis Houses -------------------------------------------------------------- Judge Jimmy L. Croom of the U.S. Bankruptcy Court for the Western District of Tennessee will convene a hearing on Dec. 31, 2020, at 9:30 a.m., to consider Sorroeix, Inc.'s private sale of the real property located in Memphis, Shelby County, Tennessee, consisting of 63 single-family houses, to Zoe Asher, LLC for $3,011,750. The objection deadline is Dec. 29, 2020. The sale will be free and clear of liens, claims, interests and encumbrances. A copy of the Offer Letter is available at https://tinyurl.com/y8zpwtgo from PacerMonitor.com free of charge. About Sorroeix Inc. Sorroeix, Inc., sought Chapter 11 protection (Bankr. W.D. Tenn. Case No. 20-11492) on Nov. 25, 2020. The petition was signed by Matthew Jones, president/CEO. The Debtor was estimated to have assets in the range of $0 to $50,000 and $1 million to $10 million in debt. The case is assigned to Judge Jimmy L. Croom. The Debtor tapped Steven N. Douglas, Esq., at Harris Shelton, PLLC, as counsel. SPEEDBOAT JV: Dispute With Wilmington Heads to Plan Trial --------------------------------------------------------- Speedboat JV Partners LLC said in a Nov. 30, 2020 filing that with the exception of Wilmington Savings Fund Society FSB d/b/a/ Christiana Trust as trustee for PNPMS Trust II, every class of creditors has either affirmatively accepted its Plan or is conclusively deemed to accept the Plan. Wilmington has filed an objection to confirmation which raises, among other things, factual disputes which must be resolved at trial. In 2007, Paula Turtletaub obtained a long-term, low interest fully amortized loan secured by a first deed of trust on the Debtor's property; in 2013, the loan was acquired by Capital One. Speedboat commenced litigation against Cap One shortly thereafter in the Superior Court for Placer County (the "State Court Action") seeking redress for Cap One's misconduct. Wilmington acquired the Cap One Loan after the litigation had commenced and an injunction against foreclosure had been entered. Treatment of Wilmington Claim The Debtor's Plan proposes to restructure Wilmington's secured debt and to pay it over time on terms consistent with Section 1129(b)(2)(A). Specifically, it proposes an interest rate, amortization rate, and term consistent with the original promissory note, except that the term is extended for the 4 years that the loan has been non-performing and in litigation; this treatment is also consistent with the law governing secured creditor cram-down generally. Wilmington will retain its lien, which it can enforce in the event of a Plan default. Wilmington contends that the amount currently owed is $4,881,015 (the "Asserted Principal"). The Plan structure is completely consistent with repaying the Asserted Principal over time consistent with Section 1129(b)(2)(A)(i). The Debtor, on the other hand, believes that the Superior Court will significantly reduce the Asserted Principal based on the misconduct of Wilmington's predecessor in interest. The Debtor will present compelling evidence to the Superior Court that Wilmington's predecessor in interest encouraged and caused the default, and should therefore be estopped from asserting a claim for default interest. Thereafter, in 2017, the Debtor sought to pay off the loan, but Wilmington's predecessor in interest wrongfully refused to submit a payoff demand. Only a few months remain before the Superior Court renders its decision on these issues. The Plan accommodates the resolution of this dispute with two phases. In the initial phase, until the Superior Court makes its ruling, Wilmington receives "adequate protection" for its interest, ensuring that the status quo is preserved and protected, at a cost of about $30,000 a month to Speedboat. When the Superior Court renders its ruling, the net amount owed to Wilmington -- whether the Asserted Principal, or something much less –- will be amortized and paid according to the cram-down formula in the Plan. Issues for Confirmation Trial Consistent with many contested real estate confirmation cases, the Debtor believes that there are three key issues of fact and law to be decided at the Confirmation Trial : * VALUATION. The Debtor has submitted a 37-page appraisal which valued the Property, in 2018, at $17 million. Wilmington has submitted a drive-by broker's opinion of value which argues that the Property is worth $6.9 million. * FEASIBILITY. The Plan provides that Speedboat "shall" obtain necessary funding, whether it is from capital contributions or a junior secured debt. The Debtor contemplates presenting that evidence in the form of a pretrial declaration and submitting to an appropriate pretrial examination by Wilmington. * INTEREST RATE / TERMS. The Plan essentially provides the terms to which the lender previously agreed: full amortization over the remaining 20.5 years of the original 30 year loan term. In any event, however, these "fair and equitable" treatment issues are for the Court to evaluate at trial, after it is informed by having reached conclusions regarding the value of the Property and the feasibility of the Plan. A copy of the Debtor's Statement dated Nov. 30, 2020, is available at https://bit.ly/2J1fg06 Debtor's Plan Speedboat JV Partners LLC submitted Plan of Reorganization for Small Business under Chapter 11. No non-priority unsecured creditors have been identified by the Debtor, but should any exist, they will be paid in full on the 60th day following the Effective Date or the date on which the claim is allowed, whichever is later. Class 3 Non-priority unsecured creditors are unimpaired. A full-text copy of the Amended Plan of Reorganization for Small Business Under Chapter 11 dated October 21, 2020, is available at https://bit.ly/3h1mJJ7 from PacerMonitor.com at no charge. About Speedboat JV Partners Speedboat JV Partners, LLC, was formed to take title of the property -- located at 77 Speedboat Avenue, Kings Beach, CA -- and rescue the property from foreclosure. The sole asset of Speedboat's estate is a 30+ room mansion on the north shore of Lake Tahoe. Over the past several years, the property has consistently appraised in the $15 to $17 million range. Speedboat JV Partners filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30731) on Sept. 17, 2020. Marc Shishido, Debtor's manager, signed the petition. At the time of filing, the Debtor disclosed $17.016 million in assets and $2.3 million in liabilities. St. James Law, P.C. and Beckman Feller & Chang P.C. serve as the Debtor's bankruptcy counsel and special counsel, respectively. TALOS ENERGY: Fitch Expects to Rate LT IDR B-(EXP) -------------------------------------------------- Fitch Ratings expects to assign a Long-Term Issuer Default Rating of 'B-(EXP)' to Talos Energy Inc. and Talos Production Inc. Fitch also assigned a 'BB-(EXP)'/'RR1' rating to the first-lien revolver and a 'B(EXP)'/'RR3' rating to Talos' proposed senior second-lien notes. The Rating Outlook is Stable. Talos' expected ratings reflect its relatively small, higher-margin, liquids focused asset profile with 2020 exit production guidance of 71 thousand barrels of oil equivalent per day (mboepd) to 73mboepd including 71% oil and the premium pricing to West Texas Intermediate (WTI) per barrel (bbl) received for its offshore liquids production. The ratings also consider a neutral to slightly positive FCF profile; relatively conservative balance sheet; manageable capital program; attractive exploitation and exploration inventory; and the potentially transformative Zama field offshore Mexico, which Fitch believes may provide potential growth prospects that could enhance the company's valuation. Talos has adequate liquidity with $435 million of availability on completion of the transaction, not including increased liquidity from proceeds of recent stock offering, although the revolver matures in May 2022. Talos faces significant environmental remediation costs, which are high relative to U.S. onshore peers and require the need to post surety bonds to guarantee the obligations and longer-term M&A funding risks. Fitch believes management demonstrated an ability to manage its decommissioning obligations efficiently. The expected ratings also reflect successful execution of the proposed second-lien notes issuance and associated debt refinance. This eliminates the refinancing risks associated with the existing notes due 2022 and the springing maturity date on the revolving credit facility and materially reduce the liquidity risks associated with above-average revolver borrowings as the facility comes due in 2022. Fitch recognizes that debt capital market access challenges for high-yield upstream oil & gas issuers are further heightened given the coronavirus pandemic and regulatory uncertainties. Failure to execute the second-lien bond issuance will result in the withdrawal of the expected ratings. KEY RATING DRIVERS Offshore E&P: Talos' focus as a smaller competitor in the offshore Gulf of Mexico results in an asset profile that is different from the typical shale-driven onshore exploration and production (E&P) issuer. Differences include relatively low asset acquisition costs, which may potentially be offset by higher plugging and abandonment (P&A) obligations; lower decline rates; and typically, higher oil-priced realizations. Challenges associated with the business model include execution risk associated with new exploration projects, including substantial capital requirements; longer spud to first oil times; dry-hole potential; materially higher environmental remediation costs; the need to post significant financial assurances to third parties to guarantee remediation work; and the additional tail risks from hurricane activity and potential oil spills. Adequate Liquidity, Refinancing Risk: Fitch expects Talos to have solid credit metrics for a 'B-' rating with a relatively conservative leverage profile of 2.0x to 2.5x in the near term with credit metrics further declining over time. The company had outstanding borrowings of $650 million of its committed $985 million credit facility as of Sept. 30, 2020. Talos issued 8.25 million shares of its common stock on Dec. 9, 2020 for gross proceeds of $73.4 million before fees and expenses. Proceeds are expected to be used to reduce borrowings on the revolver. After including LOC, Talos had effectively utilized 67% of its credit facility commitment. Fitch notes the company historically operated with FCF slightly negative to slightly positive but FCF, under Fitch's base case scenarios, is not material to make a significant reduction in revolver borrowings until WTI oil is $50/bbl or above. Fitch believes refinancing risk is significant given the upcoming May 2022 revolver maturity and the challenges of single 'B' E&P issuers to access debt capital markets. FCF Neutrality: Talos historically is able to operate close to FCF neutral. The company had a slight deficit in 2019 due to expanding it development program and in 2020 due to lower oil prices driven by the pandemic. However, FCF is slightly positive historically and Fitch expects the same over its forecast horizon as informed by its price deck assumptions. The 2020 increase in revolver borrowings was a result of an acquisition. The low decline rate of its wells provides for enhanced capital efficiency that somewhat offsets the effects during a period of low oil prices and helps protect cash flow. Talos' hedging program also provides for FCF stability. Balanced Operational Strategy: Talos' operational footprint and strategy are strategically aligned, appropriately balancing the cash flow profile and asset base development. The company's normalized unit-economics, coupled with lower capital-intensive projects, such as asset management, in-field drilling and exploitation, result in a cash flow profile that supports discretionary, exploratory capital, which may potentially transform the longer-term asset base, in better commodity price environments. However, Fitch believes, in lower pricing environments, management will reduce exploratory and other discretionary spending to support through-the-cycle neutral-to-positive FCF. Fitch believes Talos' capital program is measured proportionately to the company's inventory of development, exploitation and exploration projects. The capital program should support low, single-digit near-term production growth, on average through the forecast, while maintaining longer-term exploration upside. Future asset base development is likely to be driven by the company's five key infrastructure assets of Pampano, Ram Powell, Amberjack, Phoenix Complex and Green Canyon along with third-party owned Delta House. Available capacity at all of Talos' key assets supports longer-term organic growth and likely drives future M&A activity, while providing marginal upside from production handling fees associated from third-party produced volumes to offset fixed costs. Substantial Decommissioning Costs: Due to the company's focus on mature offshore assets and an active M&A strategy, Talos' environmental remediation costs for P&A are elevated compared with onshore peers. Talos' asset retirement obligations (AROs), as of Sept. 30, 2020, including the 2020 acquisitions totaled $431 million. Fitch expects P&A to range between $45 million to $65 million over the next few years. Fitch believes there is potential for reduced outlays to the degree it is able to extend the lives of fields through recompletions and workovers and as the company continues to work off legacy Stone abandonment requirements. Hedge Program: Talos has a hedging philosophy, with a target of hedging about 70% of production on a rolling 12-18-month basis. The company's credit facility agreement limits hedged proved developed producing (PDP) volumes to 65% during hurricane season and 90% the rest of the year. The company's current hedge book indicates that management started layering on additional hedges in recent months given prices in the $30/bbl-$45/bbl range. The company has minimal 'legacy' hedges of 5mboepd in the $50/bbl-$60/bbl range for the remainder of 2020. Consistent hedging, over the longer-term, should be positive to the credit profile as it supports development funding and reduces cash flow risk. Zama Provides Long-Term Potential: Talos' offshore Mexico acreage includes the Zama discovery in Block 7. The company drilled four total wells, including three appraisal wells completed in 2019. Results were generally better than expected. Talos has a 35% working interest in the reservoir, which Netherland Sewell & Associates estimates has 670 million barrels of oil equivalent to (mmboe) to 1,010 mmboe of recoverable resource and approximately 94% oil. Progress toward a final investment decision (FID) was delayed by a dispute with Mexican state oil company Petroleos Mexicanos (PEMEX; BB-/Stable) over operating rights based on claims that both Talos and PEMEX hold the majority of the Zama deposit. Fitch believes first oil can be achieved in 30-36-months following FID, which is targeted for 2H21. Once online, the project should add meaningful daily production, substantial positive FCF and improve scale-linked unit economics adding financial and operational flexibility. Fitch believes the project could further accelerate inorganic and organic growth opportunities, however, capital to fund the project remains a concern. DERIVATION SUMMARY Talos' positioning against the Fitch-rated offshore, independent E&P sector is mixed. Its production size, management guided a 2020 exit rate of 72mboepd (71% oil) is smaller than Murphy Oil Corporation (BB+/Negative) at 180mboepd or 67 % liquids. Talos' production size is smaller than similarly rated, onshore operators, such as SM Energy Company (SM; CCC+) at 123mboepd or 61% liquids and Baytex (B/Negative) at 80mboepd or 82% liquids, and in line with MEG Energy Corp. (MEG; B/Stable) at 76mboepd or 100% liquids. Talos' pro forma adjusted debt/EBITDA of 2.2x is better than peers, including SM at 2.4x, Baytex at 3.2x and MEG at 4.6x. Both Baytex and MEG have better liquidity profiles with lesser amounts outstanding on their credit facilities and longer-dated maturities. The company's offshore footprint exposes it to significantly higher remediation, or P&A costs, than onshore shale-based single 'B' peers. Operational risks are also higher, given potentially adverse effects of any oil spills or hurricane activity on a company of Talos' size. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include - WTI oil prices of $38/bbl in 2020, $42/bbl in 2021, $47/bbl in 2022, and $50/bbl in the long-term. - Henry Hub natural gas prices of $2.10 per thousand cubic feet (mcf) in 2020 and $2.45/mcf thereafter. - Premium differentials to WTI through the forecast. - Production growth of 6% in 2020 and +20% in 2021 from production of new developments and acquisitions. - Capex including P&A of $400 million 2020, $325 million in 2021 and $390 million in 2022. - FCF allocated toward paydown of revolver. - Successful execution of the second lien notes transaction. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Extension of the revolving credit maturity. - Consistent generation of material FCF with a majority of proceeds to reduce outstanding borrowings on the revolver. - Increased size and scale evidenced by production trending above 75mboepd-100mboepd. - Demonstrated ability to manage P&A obligations and reduced AROs per flowing barrel or proved reserves. - Mid-cycle debt/EBITDA sustained below 2.5x and FFO adjusted leverage below 3.0x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Unsuccessful execution of the second-lien transaction. - Loss of operational momentum evidenced by production trending below 45mboepd. - Implementation of a more aggressive growth strategy operating outside of FCF. - Inability to manage P&A obligations. - Mid-cycle debt/EBITDA above 3.5x on a sustained basis and FFO-adjusted leverage above 4.0x. - Unfavorable regulatory changes, such as increased bonding requirements, or accelerated P&A spending. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity, Clear Maturities: The second-lien notes issuance would extend the next bond maturity to 2025, while reducing borrowings under the credit facility. The reserve-based loan (RBL) matures in May 2022 and Fitch believes Talos' strong asset coverage should allow for an extension. However, there is a risk of bank commitment reductions as some lenders are reducing exposure to the energy sector. Availability under the RBL will be approximately 60% on the company's $985 billion borrowing base, which Fitch believes provides substantial financial and operational flexibility through-the-cycle and should support continued asset development, contingent on commodity price movements. Downward borrowing base redeterminations and/or weaker than expected FCF will negatively impact liquidity and may support negative rating actions. SUMMARY OF FINANCIAL ADJUSTMENTS No material financial adjustments were made. SOURCES OF INFORMATION ESG CONSIDERATIONS ESG Considerations: Talos has an Environmental, Social and Corporate Governance (ESG) Relevance Score of '4' for waste and hazardous materials management/ecological impacts, due to the enterprise-wide solvency risks that an offshore oil spill poses for an E&P company. This factor has 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. TD HOLDINGS: Jialin Cui Quits as Director ----------------------------------------- Mr. Jialin Cui resigned from his position as a director of the board of directors and chairman of the nominating and governance committee of the Board of TD Holdings, Inc. effective immediately. Mr. Cui's resignation is not as a result of any disagreement with the Company relating to its operations, policies or practices. Appointment of Xiangjun Wang Effective Dec. 14, 2020, the Board appointed Mr. Xiangjun Wang as a director of the Board and chairman of the Nominating Committee to fill the vacancy created by the resignation of Mr. Xiangjun Wang. Mr. Wang, age 47, has served as a partner and practicing lawyer of Beijing Junzejun (Shenzhen) Law Firm since 2010. From 2008 to 2010, he practiced as a lawyer of Guangdong Shenpeng Law Firm. Mr. Wang served as the managing director of Shenzhen Investment Banking Department of Pacific Securities Co., Ltd. from 2006 to 2008. He served as the deputy general manager of Ruigu Technology (Shenzhen) Co., Ltd. from 2003 to 2006. From 1999 to 2003, Mr. Wang worked in the supply chain management department and legal department of Huawei Technologies Co., Ltd. He is a licensed attorney and also a Certified Public Accountant in China. Mr. Wang obtained his Bachelor's Degree in Theory of Mechanical System and Applied Mechanics from Lanzhou University and his Master's Degree in Solid Mechanics from Lanzhou University in 1999. Mr. Wang also entered into a director offer letter with the Company, which sets his annual compensation at $10,000 and establishes other terms and conditions governing his service to the Company. About TD Holdings Headquartered in Beijing, People's Republic of China, TD Holdings, Inc., (formerly known as Bat Group, Inc.) operates a luxurious car leasing business as well as a commodities trading business operating in China. For the year ended Dec. 31, 2019, the Company incurred net loss from continuing operations of approximately $6.94 million, and reported cash outflows of approximately $2.17 million from operating activities. These factors caused concern as to the Company's liquidity as of Dec. 31, 2019. TEINE ENERGY: Moody's Affirms B2 CFR, Outlook Stable ---------------------------------------------------- Moody's Investors Service affirmed Teine Energy Ltd.'s Corporate Family Rating of B2, Probability of Default Rating of B2-PD, and the B3 senior unsecured notes rating. The rating outlook remains stable. "The affirmation reflects our expectation that Teine's credit metrics will remain strong for its rating despite a modest decline in production in 2021" stated Jonathan Reid, Moody's Analyst. Affirmations: Issuer: Teine Energy Ltd. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Outlook Actions: Issuer: Teine Energy Ltd. Outlook, Remains Stable RATINGS RATIONALE Teine Energy Ltd.'s B2 corporate family rating (CFR) is supported by: (1) strong credit metrics despite a challenging industry environment, with retained cash flow to debt of around 40%, EBITDA to interest around 6.5x and LFCR around 1.7x over the next 12-18 months; (2) a high percentage of light oil (about 70%) of total production; and (3) good liquidity supported by its expectation that Teine will generate positive free cash flow over the next 12 to 18 months. Teine is challenged by: (1) concentration risk, with 80% of production coming from conventional oil in a single formation, the Viking, in southwestern Saskatchewan; (2) high corporate decline rate (about 34%); and (3) modest production volume, which will decline slightly: to around 25,000 boe/d (net of royalties) in 2021 from around 27,000 boe/d in 2020. In accordance with Moody's Loss Given Default for Speculative-Grade Companies (LGD) Methodology, the US$350 million senior unsecured notes are rated B3, one notch below the B2 CFR, reflecting the priority ranking of the C$475 million senior secured borrowing base revolving credit facilities in Teine's capital structure. Teine's liquidity is good over the next year, with total sources of around C$430 million and no mandatory debt amortization over that period. Teine has around C$27 million in cash on its balance sheet (as of Sept/20) and around C$375 million of availability under its C$475 million of credit facilities (comprised of a C$50 million operating facility and a C$425 million revolving credit facility). Moody's expects the company to generate around C$30 million in free cash flow over the next four quarters. Teine's operating credit facility and revolving credit facility term out in May 2021 with any drawings due May 2022, and the company's US$350 million senior unsecured notes (equivalent to around C$385 million after hedges) mature in September 2022. Alternate sources of liquidity are somewhat limited as its assets are pledged as collateral to the secured revolving credit facility. The stable outlook reflects its expectation that Teine will maintain strong leverage and coverage metrics and good liquidity over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be upgraded if Teine can grow its production towards 35,000 boe/d net of royalties (around 28,000 boe/d as of LTM 9/30/2020), while maintaining retained cash flow to debt above 50% (51% as of LTM 9/30/2020) and an LFCR above 1.5x (2.1x as of LTM 9/30/2020). The rating could be downgraded if production approached 20,000 boe/d (around 28,000 boe/d as of LTM 9/30/2020), if retained cash flow to debt falls below 30% or if liquidity deteriorates. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Teine Energy Ltd. is a private Calgary, Alberta-based independent exploration and production company with a focus on the Viking light oil play in southwestern Saskatchewan. The Canadian Pension Plan Investment Board (CPPIB) is the majority owner of Teine. TEMPLE UNIVERSITY: Fitch Affirms BB+ IDR; Alters Outlook to Pos. ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' Issuer Default Rating and 'BB+' revenue bond rating on the following bonds issued by the Hospital and Higher Education Facilities Authority of Philadelphia on behalf of Temple University Health System (TUHS): -- $228.8 million hospital revenue bonds series 2017; and -- $219.2 million hospital revenue bonds series 2012A. The Rating Outlook has been revised to Positive from Stable. SECURITY Pledge of obligated group gross receipts, mortgages on certain obligated group properties, and debt service reserve funds. The obligated group accounted for 92% of fiscal 2020 (year-end June 30) consolidated system assets and 92% of consolidated system revenues. ANALYTICAL CONCLUSION TUHS's 'BB+' revenue bond rating and IDR are based on weak revenue defensibility and operating risk assessments that reflect its challenging business environment, which is characterized by a highly restrictive payor mix and a competitive landscape. The Positive Outlook recognizes the material improvement in financial results that started with the mid-2018 restructuring, which has been continued by the new management team. The Outlook also reflects the system's leverage metrics, which are now more consistent with an investment-grade rating in Fitch's forward-looking scenario analysis. Fiscal 2020 results reflected stronger operating performance and improved liquidity, even as the system functioned under stressed pandemic conditions starting in mid-March. Operating EBITDA margin was 7.3% through June 30, boosted by $90.1 million of CARES Act funding, and cash to adjusted debt was at 112%, excluding the $158.6 million of accelerated Medicare reimbursement; both metrics at the highest level in several years. Through the 1Q21, the system continues to generate positive operating income, and liquidity has slightly improved. An additional $75.4 million of CARES funds have been received, but not recorded to date, and remain available against coronavirus-related expenses in the 2021 fiscal year. An upgrade to investment grade will require evidence of an operating and financial profile consistent with investment-grade ratings for the next 12-18 months. Fitch believes this is possible, given management's ongoing streamlining of operations and tight expense control. However, given the uncertainty created by the pandemic and Fitch's expectation of a slower economic recovery trajectory, Temple's operations may experience further volatility than seen in its 2020 audit and 1Q21. Fitch continues to monitor the severity and duration of the coronavirus and its impact on the sector and the economy, assessing key risks and revising expectations as necessary. KEY RATING DRIVERS Revenue Defensibility: 'b' Challenging Service Area with a Constrained Payor Mix TUHS's revenue defensibility is weak, given its position in a highly competitive service area coupled with overall weak demographics and poor economic factors. TUHS's revenue source characteristics are very restrictive, as governmental payors account for 76% of gross revenues with Medicaid and self-pay accounting for a very high 34% of gross revenues. Operating Risk: 'bb' Improved Operating Performance and Manageable Capital Needs TUHS's operating performance has shown material improvement in the FYE June 30, 2020, despite the impact of the coronavirus, which affected the last quarter of the fiscal year. The 7.3% operating EBITDA margin was the highest in recent history, and additional operational improvement initiatives implemented under the new leadership, promise to help maintain improved operations going forward. A detailed capital plan is being prepared, but is not yet available. In its absence, Fitch assumes capital spending of about 120% of depreciation expense in the forward-looking scenario analysis, which is significantly higher than the historical trend, but may be necessary for TUHS to continue to successfully compete in this market and to address the increasing age of plant. Financial Profile: 'bb' Materially Improved Financial Profile Expected to be Consistent with Investment Grade Rating in Outer Years Fitch's Forward-Looking Scenario Analysis TUHS's liquidity profile and leverage metrics have materially improved over the past two years. The financial profile continues to improve through the forward-looking scenario and is consistent with investment-grade rating by the second year of the forward look. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS There are no asymmetric risk considerations affecting this rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Evidence of sustainable operating EBITDA margin closer of 6% or higher; -- Maintenance of liquidity with cash to adjusted debt at 120% or better. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Sustained failure to maintain the stronger operating results achieved in fiscal 2020 resulting in operating EBITDA margins of roughly 5% or less; -- Significant decline in supplemental payments; -- Cash flow deterioration, capital spending or borrowings that results in a weakened net leverage position with cash to adjusted debt of less than 120%. CREDIT PROFILE TUHS is a Philadelphia based healthcare system, whose flagship medical center is Temple University Hospital (TUH), a 576-bed teaching hospital in North Philadelphia. TUHS's main hospital is located on Temple University's (University) health science center campus, along with Temple University's medical school (Lewis Katz School of Medicine; SOM) and its other research and educational facilities. The other major components of TUHS include Temple University Hospital - Jeanes campus (Jeanes; 146 beds), Episcopal Campus (139 beds), American Oncologic Hospital dba Fox Chase Cancer Center (Fox Chase; 98 beds), one of only 47 National Cancer Institute-designated Comprehensive Cancer Centers in the nation, Temple Faculty Practice Plan (TFPP), Temple Health System Transport Team, Temple Physicians, Inc. (TPI), Temple University Health System Foundation, a captive insurance company and various other affiliated entities that provide health care services. In addition, the American Oncologic Hospital is the sole member of the Institute for Cancer Research dba The Research Institute of Fox Chase Cancer Center (ICR), Fox Chase Network (Network), Fox Chase Cancer Center Medical Group, Inc. (MGI). The system reported revenues of $2.27 billion at 2020 fiscal year-end. As of July 1, 2019, a new subsidiary of TUHS, Temple Faculty Practice Plan, Inc., acquired the assets of Temple University Physicians, which had been a division of the SOM. Effective Feb. 1, 2020, Jeanes was merged into TUH with the goal to achieve better coordination of services and to eliminate duplication of functions, and its acute care hospital became a second campus of TUH. The obligated group includes TUHS, TUH, Inc. (TUH, TUH-Jeanes campus, Fox Chase, ICR, Network, MGI, Temple Transport, and TPI. REVENUE DEFENSIBILITY TUHS operates in the highly competitive southeastern Pennsylvania healthcare market, with its flagship medical center - TUH, located in the economically challenged north Philadelphia. Operating challenges include a high number of Medicaid and self-insured in its primary service area (PSA). TUHS's payor mix is restrictive as it is concentrated with governmental payors that accounted for about 76% of gross revenues in fiscal 2020, but slightly lower than 81% in 2018. Medicaid and self-pay represented a high 34% of gross revenues in 2020, in line with Fitch's weak' revenue source characteristics assessment. TUHS's partial ownership interest in a not-for-profit HMO, Health Partners Plans, Inc. (HPP), provides strategic and financial benefits, particularly in the Medicaid HMO market. Given TUHS's large medical assistance population and critical community-based clinical programs, the organization receives additional financial support in the form of supplemental payments from the Commonwealth of Pennsylvania. The supplementary payments are essential to supporting the organization's position as a safety net provider in North Philadelphia. TUHS has historically worked closely with the Commonwealth of Pennsylvania for the supplemental payments, and while there continues to be concern regarding the level and sources of the supplemental funding, the funding stream has remained relatively stable over the last several years ($171 million in 2020). TUHS operates in the highly competitive southeastern Pennsylvania healthcare market, with its flagship hospital (TUH) located in the economically challenged north Philadelphia area for which TUH serves as the safety net hospital. TUH has been effective at expanding its high-end surgical and transplant programs throughout its entire five-county service area and beyond. As a result of this growth strategy and strong physician relations, especially with the University's faculty practice plan, patient volumes have been relatively stable despite declining inpatient use rates in the region. The southeastern Pennsylvania healthcare continues to experience consolidation, and is dominated by a few commercial health insurers. TUHS's market share is in the single digits, but none of the competing systems is dominant. The main competitors with relatively large market shares include Main Line Health System (AA/Stable), University of Pennsylvania Health System, and the rapidly growing Jefferson Health, which has a pending affiliation with Einstein Healthcare Network (BB+/Stable) that has so far been opposed by the FTC. In its more narrowly defined PSA, where TUHS generates 75% of its admissions, inpatient market share increased to 19.9% in 2020 from 18.8% in fiscal 2019. The service area's median household income, poverty levels, and unemployment rates, particularly in the area near TUH, are all weaker than state and national averages. However, TUHS has experienced some business growth in the surrounding five suburban counties that are benefiting from population gains and above average median household income levels. OPERATING RISK In 2018 the system initiated a restructuring with the assistance of management consultants needed to address the historically weak operating performance. The initiatives formulated in the restructuring plan continue to be implemented under the leadership of a new CEO appointed in March 2019. TUHS's operating income, which was breakeven in 2017, gradually increased to $96.1 million in fiscal 2020 ended June 30 (Fitch excludes from operating expenses the $14.5 million asset impairment), exceeding budget and equal to an operating EBITDA margin of 7.3%. TUHS's results for fiscal 2020 included $90.1 million of CARES Act funding; an additional $95.7 million had been received, with $20.3 recorded as of Sept. 30 and $75.4 million received but not recorded, remain available for the remainder of the current fiscal year. The solid results reflect a combination of focus on costs controls and the ability to manage the COVID-19 census (220 patients at the peak) in a clinically and financially sound manner, with treatment results that were better than the national averages and driving a solid operating margin. The Temple University Hospital (TUH) flagship's ability to segregate its COVID-19 population in a separate ambulatory facility across from the main hospital (220 beds, half ICU) has enabled TUH to continue to keep the main facility coronavirus free and perform a higher number of transplants than in the prior year and a 3.3% increase in acute discharges as compared to the prior year. Discharges further increased by 6% in the first quarter of fiscal 2021 ended Sept. 30. However, due to the pandemic disruption, both inpatient and outpatient surgeries were lower in fiscal 2020 compared to the prior year, a trend that has continued through Sept. 30. In February 2020, Michael Young was appointed CEO of TUHS, after serving as CEO of TUH since March 2019. Previously, he was President and CEO at Pinnacle Health System (Harrisburg, now part of UPMC Health) for six years and at Grady Health System (Atlanta) for three years. Following his appointment, Temple merged Jeanes Hospital, which is a community hospital physically connected to Fox Chase, into TUH, with anticipated material positive gains stemming from rationalization of resource management between Jeanes and TUH. The plan to sell Fox Chase Cancer Center to Thomas Jefferson University, which preceded the new CEO's appointment, and would have provided significant liquidity to TUHS, was scuttled by the pandemic, as Jefferson Health decided to focus on their own system operations during the crisis. A proposed sale of a portion of TUHS's interest in HPP to Jefferson may proceed by the end of calendar 2021. HPP is financially sound, and TUHS would retain HPP's long-term Medicaid risk contract for a period of seven years (will yield approximately $7 million annual operating profit). Fox Chase, which has a valued NCI designation, will need significant capital investments over time. Management has taken several decisive steps to improve the efficiency of operations at both Fox Chase and the TUH -Jeanes campus. The steps included appointing a new leadership team; integration of several functions, such as IT, research and operations where there was duplication, with a goal of reducing expenses by $9 million-10 million annually; and getting Fox Chase included in TUHS's 340 B pharmacy program, which could potentially generate savings of $20 million-30 million. A decision to transfer the cancer infusion service line from Fox Chase to TUH, while reducing Fox Chase's revenues, will be financially accretive to the system. Capital Spending Capital expenditure spending had been curtailed in the last three years after averaging 80% in the prior several years, as the system focused on clinical growth and expenses management. Capital expenditures as percent of depreciation were less than 40% between 2018 and 2020, driving the average age of plant to over 17 years. Capital investment for 2021 is projected at $67 million, which equals approximately 140% of depreciation. In absence of a detailed capital plan, Fitch assumes spending at about 120% of depreciation expense through the remaining four years of Fitch's forward-looking scenario. No new debt plans are contemplated at this time. FINANCIAL PROFILE TUHS reported $607.1 million of cash and unrestricted investments at June 30, 2020, up from $398.1 million in 2018, which translates to 112% of cash to adjusted debt and net adjusted debt to adjusted EBITDA (NADAE) of negative 0.3x, both materially better than the 2018 metrics of 72% and 1.3x, respectively. Fitch does not include the $158.6 million of the advance Medicare payments in the liquidity metrics, which management considers as restricted and which will need to be repaid. Fitch's adjusted debt in fiscal 2020 includes a five-time multiple of TUHS's operating lease expense; no additional debt liability is included for the system's defined benefit pension plan, which meets the 80% funding requirement threshold. Applying Fitch's investment portfolio stress in a scenario that incorporates a drop in GDP, and using TUHS's fairly moderate asset allocation risk profile, results in a modest 7.4% decline in the liquidity position in year one of Fitch's scenario analysis. While at this time TUHS's financial profile is assessed as weak (bb), Fitch's forward-looking scenario shows cash to adjusted debt at 122% by year two and NADAE in a favorably negative position throughout the entire five year forward look, and at negative 1.6x by the fourth year (2024), consistent with Fitch's midrange (bbb) financial profile assessment. Fitch's analytical expectation includes capital spending at about 120% of depreciation expense, which management views as conservatively high. Operating EBITDA margin, after a small boost in 2022, when the pandemic effect is expected to subside, resulting in return of stronger volumes, is assumed at a conservatively low range of above 5% through the outer years of the forward-looking scenario analysis. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS There are no asymmetric risk considerations affecting the rating determination. TUHS had $473.4 million of long-term debt, capitalized leases and various loans outstanding at close of fiscal 2020, all in fixed rate. In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. TEXAS WELLNESS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: The Texas Wellness Center, LLC DBA Green Lotus Hemp Arlington Heights Finance Station PO Box 470458 3101 West 6th Street Fort Worth, TX 76147-9998 Business Description: The Texas Wellness Center, LLC -- https://greenlotushemp.com -- is a subdiary of GL Brands that was formed on March 16, 2016. Texas Wellness conducts sales, market and administrative functions for the Company. Chapter 11 Petition Date: December 18, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-43804 Debtor's Counsel: Robert A. Simon, Esq. WHITAKER CHALK SWINDLE AND SCHWARTZ 301 Commerce St. Ste 3500 Fort Worth, TX 76102 Tel: 817-878-0500 Email: rsimon@whitakerchalk.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Carlos Frias, chief executive officer. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at: https://www.pacermonitor.com/view/2M5BS5A/The_Texas_Wellness_Center_LLC__txnbke-20-43804__0002.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2DKNIEI/The_Texas_Wellness_Center_LLC__txnbke-20-43804__0001.0.pdf?mcid=tGE4TAMA TGP HOLDINGS III: Moody's Affirms B3 CFR; Alters Outlook to Pos. ---------------------------------------------------------------- Moody's Investors Service affirmed TGP Holdings III LLC's B3 Corporate Family Rating, B3-PD Probability of Default Rating, B2 first lien term loan rating, B2 delayed-draw first lien term loan rating and Caa2 second lien term loan rating. Concurrently, Moody's changed Traeger's outlook to positive from negative. These actions follow Traeger's improved operating performance and credit metrics as well as continued strong momentum that Moody's expects will continue into 2021. The positive outlook reflects Traeger's strong operating performance for nine-months ending Sept. 30, 2020 and Moody's expectation that this higher level of performance will continue in 2021 as the company grows its direct distribution business and continues to expand its customer base with large national retailers and through e-commerce. Moody's expects the company's leverage will be maintained at around 4.0x debt to EBITDA over the next 12 to 18 months barring any dividend payments or acquisitions. However, given the uncertainty that persists with the pandemic and any pullback that may follow, the company will need to demonstrate sustained operating profits and a disciplined financial policy in a post-pandemic environment. The affirmation of the CFR reflects the uncertainty that the improvement in credit metrics will be sustained because an uneven economic recovery could lead to volatility in consumer spending on discretionary grills and related products, and there is event risk given the private equity ownership. Traeger generated strong operating performance in 2020 and Moody's expects that the company will maintain earnings near this level of performance over the next 12 to 18 months as the company continues to grow its direct-to-consumer business and expands its relationships with large national retailers and e-commerce companies. Demand for the company's grills and pellets increased during the coronavirus pandemic as consumers cooked more at home and spent less of their income on dinning out and travel. Further increasing demand for Traeger's products is a migration of consumers to suburban areas where grilling is more prevalent. Traeger is on pace to improve sales by approximately 49% in 2020 to $540 million. Moody's expects Traeger to maintain this level of sales in 2021 as it continues to expand its presence with large national retailers and through e-commerce. The company's debt to EBITDA was 4.1x at September 30, 2020 and Moody's expects that leverage will remain at around 4.0x over the next 12 to 18 months. However, there is some uncertainty if Traeger can maintain this higher level of operating performance in 2021 similar to that seen in 2020 as the pandemic tailwinds subside and a broader array of away-from-home activities resume. Elevated unemployment could also reduce the demand for high-priced discretionary products. Moody's expects the company to maintain very good liquidity supported by cash on hand of $26 million as of September 30, 2020, $30-35 million of projected free cash flow in 2021, and a $67 million unused revolving credit facility that expires in September 2022 and a committed $30 million accounts receivable facility that also expires in 2022. The accounts receivable facility increases to $45 million between March and August of each year. The cash resources provide capacity to manage what is likely to be an elevated level of working capital usage because the company will build inventory given indications of strong orders from retailers to prepare for the spring selling season. The following ratings/assessments are affected by the action: Affirmations: Issuer: TGP Holdings III LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3) Senior Secured Delayed Draw Term Loan, Affirmed B2 (LGD3) Senior Secured Revolving Credit Facility, Affirmed B2 (LGD3) Senior Secured 2nd Lien Term Loan, Affirmed Caa2 (LGD6) Outlook Actions: Issuer: TGP Holdings III LLC Outlook, Changed to Positive from Negative RATINGS RATIONALE Traeger's B3 Corporate Family Rating reflects the company's moderate leverage, modest scale, narrow product focus and risks associated with being owned by a private equity firm and limited product and geographic diversification. The discretionary nature of the company's relatively expensive grills and accessory products is also a constraint. Traeger's credit profile benefits from its leading share within the niche wood pellet grill industry and solid brand strength driven by high product quality and strong liquidity. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Its analysis has considered the effect on the company's performance from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around its forecasts is unusually high leading to wide potential variations in demand for high-priced discretionary consumer durables products. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company can sustain the improvement in profitably, improve its product and geographic diversification, generates comfortably positive free cash flow with good levels of reinvestment, and sustain debt to EBITDA below 5.0x. Ratings could be downgraded if the company's operating performance or liquidity deteriorates for any reason, or if debt to EBITDA increases above 6.5x. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. TGP Holdings III LLC owns Traeger Pellet Grills, LLC. Headquartered in Salt Lake City, Utah, Traeger Pellet Grills, LLC is a designer and marketer of wood pellet grills and grilling accessories primarily to consumers in the U.S. market. The company is principally owned and controlled by private equity firm AEA Investors following a 2017 leveraged buyout. Revenue for the last twelve-month period ended September 2020 was about $487 million. THE SCRIPPS: Moody's Assigns Ba3 Rating to New $400MM Sec. Debt --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to The Scripps (E.W.) Company's new $400 million senior secured revolving credit facility and $650 million senior secured term loan B. EW Scripps' B2 corporate family rating, B2-PD probability of default rating, the SGL-2 speculative grade liquidity (SGL) rating and all existing instrument ratings were unchanged. The outlook remains stable. The proceeds from the new term loan will be used, along with cash, preferred equity, and $700 million of secured and $500 million of unsecured debt, to finance the company's $2.65 billion acquisition of ION Media Networks, Inc. (ION Media, B1 stable) announced in September 2020 and expected to close in H1 2021. Assignments: Issuer: Scripps (E.W.) Company (The) Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3) LGD Adjustments: Issuer: Scripps (E.W.) Company (The) Senior Secured Bank Credit Facility, adjusted to (LGD3) from (LGD2) RATINGS RATIONALE EW Scripps' B2 CFR reflects the company's high leverage, with pro-forma debt/EBITDA (2-year average and Moody's adjusted) expected around 6x through 2021. The acquisition of ION Media will lead to an even higher exposure to core advertising as the large majority of ION Media's revenue come from ad sales at a time when the timing of the ad market's recovery from COVID-19 remains uncertain. The company's B2 CFR also reflects the company's enhanced scale with the combined company expected to generate nearly $2.5 billion of revenues and about $750 million of EBITDA. With the addition of ION Media's channels, EW Scripps will compete for national advertising, which has proven more resilient than local advertising. The B2 CFR is also supported by expectations that the company will maintain good liquidity in the coming 18 months. On September 24, 2020, EW Scripps announced that it had reached an agreement to acquire ION Media for $2.65 billion. The financing of the transaction includes about $336 million of cash, $600 million of perpetual preferred equity from Berkshire Hathaway and $1.85 million of secured and unsecured debt. The preferred shares will incur interest of 8% if paid in cash and 9% if paid in kind (at the option of the company) and have been treated as equity under Moody's methodology. Moody's regards the current pandemic as a social risk under its ESG framework, given the substantial implications for health and safety. The response to the coronavirus outbreak with stay-at-home orders, rapid unemployment increases and a deteriorating economic outlook will lead to advertising demand -- which is correlated to the economic cycle and consumer confidence -- declining materially in 2020. While the COVID-19 related lockdowns had a profound negative impact on advertising in Q2, EW Scripps has seen month on month improvement since April. While there is still very little visibility as to whether this improvement can be sustained in the face of increasing Coronavirus infections in the US, EW Scripps has also benefitted during a contested election year when on-the-ground events could not take place and budgets were shifted to local TV advertising instead. Following the acquisition, EW Scripps is expected to maintain a good liquidity profile, as reflected by its SGL-2 rating. ION Media's acquisition is expected to be accretive to the company's free cash flow generation. Also, concurrent to the acquisition, EW Scripps will increase its revolving credit facility to $400 million from $210 million. Moody's expects the company to retain adequate headroom under its covenants. The stable outlook reflects Moody's expectations that EW Scripps' leverage will remain at or around 6x in 2021. While at the high end of Moody's guidance for the issuer at this rating level, the increase in scale and reach of the company post-ION Media acquisition mitigates the weakening of this metric. The stable outlook also reflects the potential for the company to reduce leverage through optional debt repayment. The Ba3 (LGD3) rating on the company's senior secured facilities reflects their priority ranking ahead of the Caa1 (LGD5) rated senior notes. The instrument ratings reflect the probability of default of the company, as reflected in the B2-PD PDR, an average expected family recovery rate of 50% at default given the mix of secured and unsecured debt in the capital structure, and the particular instruments' rankings in the capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the ongoing disruption caused by the coronavirus pandemic, the lack of visibility over a sustained recovery, and the increase in leverage from the ION Media acquisition, an upgrade is unlikely in the near term. Ultimately, any ratings upgrade would require EW Scripps to return to revenue and EBITDA growth as well as a run-rate leverage below 5.25x. The ratings could be downgraded should the company's free cash flow deteriorate putting pressure on the company's liquidity profile or should leverage be sustained materially above 6.25x. ION Media Networks, Inc., launched in 2007, owns the ION Television network through a geographically diversified group of 70 owned & operated broadcast stations in the U.S. as well as through carriage agreements with pay television providers covering over 100 million TV households. ION Media also owns and operates the Qubo and ION Life television networks. The company maintains headquarters in West Palm Beach, FL, and generated revenues of approximately $535 million for the twelve months ended September 30, 2020. Black Diamond Capital Management's affiliates are the primary indirect owners of ION Media through their ownership of Media Holdco, whose primary asset is an 86% equity interest in ION Media. Headquartered in Cincinnati, OH and founded in 1878, Scripps (E.W.) Company (The) is one of the largest pure-play television broadcasters based on US household coverage of nearly 30%. Broadcasting operations consist of 59 television stations in 41 markets. The company's operations also include a collection of national journalism and content businesses, including Newsy, a national news network; and fast-growing national broadcast networks Bounce, Grit, Escape and Laff, and Triton, the global leader in digital audio technology and measurement services. The company is publicly traded with the Scripps family controlling effectively all voting rights (93%) and an estimated 28% economic interest with remaining shares being widely held. The company reported approximately $1.8 billion in revenue in the last twelve months ended Sept. 30, 2020. The principal methodology used in these ratings was Media Industry published in June 2017. THE SCRIPPS: Moody's Rates New $700MM Secured Notes Ba3 ------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to The Scripps (E.W.) Company's (EW Scripps) new $700 million senior secured notes and a Caa1 rating to the company's new $500 million senior unsecured notes. Concurrently, Moody's affirmed EW Scripps' B2 corporate family rating, B2-PD probability of default rating, Ba3 senior secured credit facility rating and the Caa1 rating on the company's existing senior unsecured notes. The SGL-2 speculative grade liquidity (SGL) rating was maintained. The outlook remains stable. The proceeds from the new notes will be used, along with cash, preferred equity, and the proceeds from the company's $650 million term loan B, to finance the company's $2.65 billion acquisition of ION Media Networks, Inc. (ION Media, B1 stable) announced in September 2020 and expected to close in H1 2021. Affirmations: Issuer: Scripps (E.W.) Company (The) Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5) Assignments: Issuer: Scripps (E.W.) Company (The) Senior Secured Regular Bond/Debenture, Assigned Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD5) Outlook Actions: Issuer: Scripps (E.W.) Company (The) Outlook, Remains Stable RATINGS RATIONALE EW Scripps' B2 CFR reflects the company's high leverage, with pro-forma debt/EBITDA (2-year average and Moody's adjusted) expected around 6x through 2021. The acquisition of ION Media will lead to an even higher exposure to core advertising as the large majority of ION Media's revenue come from ad sales at a time when the timing of the ad market's recovery from COVID-19 remains uncertain. The company's B2 CFR also reflects the company's enhanced scale with the combined company expected to generate nearly $2.5 billion of revenues and about $750 million of EBITDA. With the addition of ION Media's channels, EW Scripps will compete for national advertising, which has proven more resilient than local advertising. The B2 CFR is also supported by expectations that the company will maintain good liquidity in the coming 18 months. On September 24, 2020, EW Scripps announced that it had reached an agreement to acquire ION Media for $2.65 billion. The financing of the transaction includes about $336 million of cash, $600 million of perpetual preferred equity from Berkshire Hathaway and $1.85 million of secured and unsecured debt. The preferred shares will incur interest of 8% if paid in cash and 9% if paid in kind (at the option of the company) and have been treated as equity under Moody's methodology. EW Scripps intends to combine ION Media with its other national network businesses, Katz and Newsy. Following the acquisition, the company will reach the maximum allowed 39% (including UHF discount) of US Households and be the largest holder of broadcast spectrum. The company expects to derive cost synergies - ramping up to more than $120 million by year six - a large proportion of which will come from reductions in Katz networks' costs as it will no longer need to lease multicast stations from third party broadcasters. Unlike EW Scripps, ION Media uses the must-carry rule which means it does not charge retransmission fees and is widely distributed for free on MVPDs. While the company reaches more than 100 million homes, its revenue is almost fully exposed to advertising which is cyclical and in a low structural decline as viewing habits change. However, ION Media's margins have been high historically and resilient through 2020 even in the face of the COVID-19 related steep decline in core TV advertising spend Moody's regards the current pandemic as a social risk under its ESG framework, given the substantial implications for health and safety. The response to the coronavirus outbreak with stay-at-home orders, rapid unemployment increases and a deteriorating economic outlook will lead to advertising demand -- which is correlated to the economic cycle and consumer confidence -- declining materially in 2020. While the COVID-19 related lockdowns had a profound negative impact on advertising in Q2, EW Scripps has seen month on month improvement since April. While there is still very little visibility as to whether this improvement can be sustained in the face of increasing Coronavirus infections in the US, EW Scripps has also benefitted during a contested election year when on-the-ground events could not take place and budgets were shifted to local TV advertising instead. Following the acquisition, EW Scripps is expected to maintain a good liquidity profile, as reflected by its SGL-2 rating. ION Media's acquisition is expected to be accretive to the company's free cash flow generation. Also, concurrent to the acquisition, EW Scripps will increase its revolving credit facility to $400 million from $210 million. Moody's expects the company to retain adequate headroom under its covenants. The stable outlook reflects Moody's expectations that EW Scripps' leverage will remain at or around 6x in 2021. While at the high end of Moody's guidance for the issuer at this rating level, the increase in scale and reach of the company post ION Media acquisition mitigates the weakening of this metric. The stable outlook also reflects the potential for the company to reduce leverage through optional debt repayment. The Ba3 (LGD3) rating on the company's senior secured facilities reflects their priority ranking ahead of the Caa1 (LGD5) rated senior notes. The instrument ratings reflect the probability of default of the company, as reflected in the B2-PD PDR, an average expected family recovery rate of 50% at default given the mix of secured and unsecured debt in the capital structure, and the particular instruments' rankings in the capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the ongoing disruption caused by the coronavirus pandemic, the lack of visibility over a sustained recovery, and the increase in leverage from the ION Media acquisition, an upgrade is unlikely in the near term. Ultimately, any ratings upgrade would require EW Scripps to return to revenue and EBITDA growth as well as a run-rate leverage below 5.25x. The ratings could be downgraded should the company's free cash flow deteriorate putting pressure on the company's liquidity profile or should leverage be sustained materially above 6.25x. ION Media Networks, Inc., launched in 2007, owns the ION Television network through a geographically diversified group of 70 owned & operated broadcast stations in the U.S. as well as through carriage agreements with pay television providers covering over 100 million TV households. ION Media also owns and operates the Qubo and ION Life television networks. The company maintains headquarters in West Palm Beach, FL, and generated revenues of approximately $535 million for the twelve months ended September 30, 2020. Black Diamond Capital Management's affiliates are the primary indirect owners of ION Media through their ownership of Media Holdco, whose primary asset is an 86% equity interest in ION Media. Headquartered in Cincinnati, OH and founded in 1878, Scripps (E.W.) Company (The) is one of the largest pure-play television broadcasters based on US household coverage of nearly 30%. Broadcasting operations consist of 59 television stations in 41 markets. The company's operations also include a collection of national journalism and content businesses, including Newsy, a national news network; and fast-growing national broadcast networks Bounce, Grit, Escape and Laff, and Triton, the global leader in digital audio technology and measurement services. The company is publicly traded with the Scripps family controlling effectively all voting rights (93%) and an estimated 28% economic interest with remaining shares being widely held. The company reported approximately $1.8 billion in revenue in the last twelve months ended Sept. 30, 2020. The principal methodology used in these ratings was Media Industry published in June 2017. THOMAS R. MCCONNELL: $3.5K Payment to IRS from Property Sale Okayed ------------------------------------------------------------------- Judge Jeffrey J. Graham of the U.S. Bankruptcy Court for the Southern District of Indiana approved the agreement between creditor United States of America (on behalf of the Internal Revenue Service) and the Debtors, Thomas R. McConnell and Susan K. McConnell, in regard to the Debtors' private sale of the parcel of real property located at 2113 W. Washington Street, Muncie, Indiana to Vishal Viswam for $147,000, free and clear of all Liens. The parties agreed that, because the amounts attributable to the Debtors' exemption are liable during the case to the United States' tax claims, the $3,500 of the proceeds of sale attributable to the Debtors' exemption should also be paid into the IOLTA account of their counsel, earmarked for payment of the United States' secured and/or priority claims after resolution of Adv. Pro. 20-50031. Thomas R. McConnell and Susan K. McConnell sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 19-07217) on Sept. 26, 2019. The Debtors tapped John Woodrow Nelson, Esq., at Law Offices of John Nelson as counsel. On Oct. 21, 2020, the Court confirmed the Debtor's Amended Plan of Reorganization. TOWN SPORTS: Court Okays Chapter 11 Bankruptcy Plan --------------------------------------------------- Josh Saul of Bloomberg News reports that bankrupt New York Sports Clubs owner Town Sports International Holdings saw its Chapter 11 bankruptcy plan approved by federal judge Christopher Sontchi in an order Friday, December 18, 2020. "The plan shall be, and hereby is, confirmed under section 1129 of the Bankruptcy Code," Judge Sontchi wrote in his order. An impaired class has accepted the Plan. As evidenced by the Voting Report, Class 5 (General Unsecured Claims) voted to accept the Plan at nearly all Debtors and Class 4 (Prepetition Loan Claims) voted to reject the Plan. A copy of the Findings of Fact, Conclusions of Law and Order confirming the Second Amended Plan is available at PacerMonitor.com at https://bit.ly/38n2jGy About Town Sports International Town Sports International, LLC and its subsidiaries are owners and operators of fitness clubs in the United States, particularly in the Northeast and Mid-Atlantic regions. As of Dec. 31, 2019, Town Sports operated 186 fitness clubs under various brand names, collectively serving approximately 605,000 members. Town Sports owns and operates brands such as New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs, Lucille Roberts and Total Woman. Town Sports and several of its affiliates filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 20-12168) on Sept. 14, 2020. The petitions were signed by Patrick Walsh, chief executive officer. The Debtors were estimated to have $500 million to $1 billion in consolidated assets and consolidated liabilities. The Hon. Christopher S. Sontchi presides over the cases. The Debtors have tapped Kirkland & Ellis and Young Conaway Stargatt & Taylor, LLP as their bankruptcy counsel, and Houlihan Lokey, Inc. as their financial advisor and investment banker. Epiq Corporate Restructuring, LLC serves as claims and noticing agent and administrative advisor. TPT GLOBAL: S. Hasan is New Global Marketing and Media Director --------------------------------------------------------------- TPT Global Tech, Inc. reports that Sheeraz Hasan has accepted the position of Director of Global Marketing and Media for the San Diego Technology Company. Sheeraz will focus his Global Marketing and Media strategies to launch the company's four corporate sectors Telecom, Media, Medical and SaaS over the next 12 months. His initial focus will be on the company's fund raising activities and the companies End to End Covid 19 testing, monitoring, "Check and Verify" and Vaccination Technology solutions "Quiklab", "SaniQuik" and "QuikPass" initiative to get students back in schools, fans back in stadiums, concert venues and help get people back to work. The company has developed its "QuikPass" Check and Verify and Vaccination monitoring platform for Schools, Airlines, Hospitals, Sports Venues, Restaurants, Hotels and Nightclubs to check and verify if an individual has been tested for Covid 19 or given the Vaccination and that individual is virus free to gain access to a particular venue with the idea that everyone in that venue would be Covid Free. The "QuikPass" platform also works with third party testing labs or organizations to participate on the "QuikPass" Network. Sheeraz Hasan has began creating media miracles for some of the biggest brands and most famous stars in the world for the past 20 years. The largest meet and greet of all time with Logan Paul, 250,000 people showing up at the Dubai Mall to see Kim Kardashian, disrupting a $93 billion dollar industry with Paris Hilton, or even securing $2 million for Jennifer Lopez to perform for 20 minutes. These are just a few of the campaigns that have made Sheeraz Hasan the one of the biggest fame dealers in the world. He has worked Zendaya, Priyanka Chopra, Justin Bieber, Ricky Martin, Selena Gomez and many of the biggest influencers in the world as well as Procter & Gamble, AB InBev, Johnson & Johnson, Pantene and Gillette. Sheeraz's expert disruption and bold strategies have created over $3 billion in earned media. In 2005 Sheeraz launched a celebrity and entertainment news website, HOLLYWOOD.TV. Within a year, HOLLYWOOD.TV became a top rated celebrity news outlet and its content has been seen by over two billion viewers worldwide. HOLLYWOOD.TV supplies daily content to CBS, CNN, FOX, ABC, NBC, ET, The Insider, SKY, BBC, RTL, AP, REUTERS, TV GUIDE, E!, Today Show, The Early Show, Good Morning America, YouTube, Facebook and Perez Hilton. Now after nearly two decades of dominating news cycles, making small time brands massive players in their industry and becoming known as the one of the greatest star creator in Los Angeles Sheeraz has launched the "FAME by Sheeraz Masterclass" focused on showing you the truth on how Hollywood really works and implementing bold strategies that produce guaranteed results. "In life I never focus on the problem, I focus on the solution. I am so excited to work with TPT. With the economy being shut down, TPT aims to become the solution to reopen the economy, Sporting events, Hollywood and get our kids back to school and their parents back to work" said Sheeraz. "We are excited to have Sheeraz as the Director of Global Marketing and Media. His years of Media experience and extensive contacts will help us achieve our goals in product expansion both domestically and internationally" said Stephen Thomas, CEO. About TPT Global Tech TPT Global Tech Inc. (OTC:TPTW) based in San Diego, California, is a Technology/Telecommunications Media Content Hub for Domestic and International syndication and also provides technology solutions to businesses domestically and worldwide. TPT Global offers Software as a Service (SaaS), Technology Platform as a Service (PAAS), Cloud-based Unified Communication as a Service (UCaaS) and carrier-grade performance and support for businesses over its private IP MPLS fiber and wireless network in the United States. TPT's cloud-based UCaaS services allow businesses of any size to enjoy all the latest voice, data, media and collaboration features in today's global technology markets. TPT's also operates as a Master Distributor for Nationwide Mobile Virtual Network Operators (MVNO) and Independent Sales Organization (ISO) as a Master Distributor for Pre-Paid Cellphone services, Mobile phones Cellphone Accessories and Global Roaming Cellphones. TPT Global reported a net loss of $14.03 million for the year ended Dec. 31, 2019, compared to a net loss of $5.38 million for the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $15.96 million in total assets, $36.86 million in total liabilities, $4.79 million in total mezzanine equity, and a total stockholders' deficit of $25.69 million. Sadler, Gibb & Associates, LLC, in Salt Lake City, UT, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 14, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency which raise substantial doubt about its ability to continue as a going concern. TRANSOCEAN LTD: Whitebox Default Claim From Debt Swap Denied ------------------------------------------------------------ Transocean Ltd. (NYSE: RIG) announced Dec. 17, 2020, that the United States District Court for the Southern District of New York granted Transocean Ltd. and Transocean Inc.'s motion for summary judgment with respect to Transocean's counterclaims against funds managed by, or affiliated with, Whitebox Advisors LLC seeking declaratory relief regarding the allegations contained in the purported notice of alleged default (the "2027 Notes Notice") with respect to Transocean's 8.00% Senior Notes due 2027 (the "2027 Guaranteed Notes"). In granting Summary Judgment, the Court held that Transocean's previously announced exchange transactions and internal reorganization (the "Transactions") did not violate the applicable provisions of the indenture governing the 2027 Guaranteed Notes (the "2027 Notes Indenture"), that the purported events of default described in the 2027 Notes Notice do not constitute an actual default under the 2027 Notes Indenture, and that any associated rights and remedies sought by Whitebox, including acceleration of the 2027 Guaranteed Notes, are unavailable. As Transocean previously disclosed, Transocean has maintained that the claims of default alleged in 2027 Notes Notice delivered by Whitebox and certain funds managed by, or affiliated with, Pacific Investment Management Company LLC ("PIMCO") and certain other advisors and holders, in connection with the 2027 Guaranteed Notes, are baseless. The Court's order for Summary Judgment in favor of Transocean Dec. 17 has confirmed that no default has occurred. In addition, the facts underlying the alleged default under the 2027 Guaranteed Notes are the same as the facts underlying the previously disclosed alleged notice of default (the "2025 Notes Notice" and, together with the 2027 Notes Notice, the "Notices") in respect of Transocean Inc.'s 7.25% Senior Notes due 2025 (the "2025 Guaranteed Notes") delivered by Whitebox, PIMCO and certain other advisers and holders of 2025 Guaranteed Notes. Accordingly, following Transocean's announcement on December 1, 2020 that it executed amendments to certain of its financing documents and implemented certain internal reorganization transactions that resolved the allegations in the Notices, and today's ruling in favor of Transocean from the Court confirming that the indenture was not breached as a result of the Transactions, the incorrect and erroneous allegations of default set forth in the Notices are without merit and have been mooted and resolved. Transocean has and will continue to take any necessary steps to vigorously and proactively protect its and its stakeholders' interests. About Transocean Ltd. Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services. Transocean recorded a net loss of $1.25 billion for the year ended Dec. 31, 2019, compared to a net loss of $2 billion for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $23.45 billion in total assets, $1.59 billion in total current liabilities, $10.38 billion in total long-term liabilities, and $11.47 billion in total equity. * * * As reported by the TCR on April 29, 2020, S&P Global Ratings lowered its issuer credit rating on Transocean Ltd. to 'CCC' from 'CCC+'. "The collapse in oil prices has led to a sharp drop in demand for oilfield services, and we expect offshore activity to take a substantial hit. The recent material drop in oil prices -- kicked off by the Saudi-Russian price war and worsened by the unprecedented drop in demand as a result of the coronavirus pandemic -- has led to sharp reductions in oil producers' capital spending plans for 2020. This will significantly reduce demand for the oilfield services sector. We expect offshore activity to be hit particularly hard, given the higher costs, higher operating risk, and longer payback periods for offshore projects relative to onshore plays," S&P said. TRC FARMS: CNH Industrial Says Amended Plan Still Not Feasible -------------------------------------------------------------- CNH Industrial Capital America LLC ("CNH") objects to the First Amended Disclosure Statement and First Amended Plan of Reorganization filed by debtor TRC Farms, Inc. CNH claims that the Debtor proposes to fund its obligations under the Plan through continuing income from its hog finishing and row crop farming operations, yet the Disclosure Statement does not provide a basis for the Debtor's income or expense estimations, nor does it disclose the Debtor's past performance in prior years. CNH points out that the Debtor's projections do not disclose the Debtor's plans for the approximately $1.4 million in crop revenue it expects to generate between October and December 2020, and do not appear to make provision for repayment of the ARM credit facility the Debtor previously obtained as post-petition financing. CNH asserts that the Plan does not provide for the payment in full of CNH's claims, including its attorneys' fees and post-petition interest. CNH further asserts that the extends the terms of payment on CNH's claims without providing for the continued depreciation in value of the Collateral securing those claims. CNH contends that the Plan is not economically feasible, as required by 11 U.S.C. Sec. 1129(a)(11). It asserts that the Plan does not satisfy Sec. 1129(a)(1) because it does not provide adequate means for its implementation. A full-text copy of CNH Industrial's objection dated December 3, 2020, is available at https://tinyurl.com/y3vjrdj8 from PacerMonitor at no charge. Counsel for CNH Industrial: Caren D. Enloe Landon G. Van Winkle SMITH DEBNAM NARRON SAINTSING & MYERS, LLP P.O. Box 176010 Raleigh, North Carolina 27 619 -6010 Telephone: (919) 250-2000 Facsimile: (919) 250-2100 E-mail: cenloe@ smithdebnamlaw. com lvanwinkle@smithdebnamlaw. com Hearing Continued to Jan. 14 The Court has entered an order continuing the hearing to consider confirmation of the Plan to Jan. 14, 2021 at 10:00 a.m. Counsel for Truist Bank moved for a continuance due to a scheduling conflict. Counsel for the Debtor and other parties consented to the continuance. About TRC Farms Inc. TRC Farms, Inc., a privately held company in the livestock farming industry, filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. N.C. Case No. 20-00309) on Jan. 23, 2020. In the petition signed by Timmy R. Cox, president, the Debtor disclosed $3,846,275 in assets and $5,412,282 in liabilities. Judge Joseph N. Callaway oversees the case. The Debtor tapped Ayers & Haidt, PA as its legal counsel, and Carr Riggs & Ingram, LLC as its accountant. TRICORBRAUN HOLDINGS: Moody's Affirms B3 CFR, Outlook Stable ------------------------------------------------------------ Moody's Investors Service affirmed TricorBraun Holdings, Inc's B3 Corporate Family Rating, B3-PD Probability of Default Rating, the B2 rating on the company's first lien term loan, and the Caa2 rating on the second lien notes. The outlook is stable. The affirmation of the rating and stable outlook reflects Moody's expectation of continued strong EBITDA margin and a measured approach to the company's growth through acquisition strategy without compromising credit metrics. Affirmations: Issuer: TricorBraun Holdings, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured 1st Lien Revolving Credit Facility, Affirmed B2 (LGD3) Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3) Senior Secured 2nd Lien Notes, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: TricorBraun Holdings, Inc. Outlook, Remains Stable RATINGS RATIONALE TricorBraun's B3 CFR reflects the company's value-added services and large scale relative to competitors in its fragmented packaging industry. Moody's expects the company to continue to generate steady EBITDA margins in the range of 12-13.5%. TricorBraun's asset light business model requires minimal capital expenditures affording the company the ability to consistently generate free cash that can be used to fund acquisitions or be directed toward debt reduction. The B3 CFR is constrained by TricorBraun's high leverage, aggressive financial policy and acquisitiveness, exposure to commodity products, and potential disintermediation. At some point TricorBraun's customers may gain scale and attempt to go directly to the manufacturer cutting out the services of the company. The company will also have to address the expiration of its revolver in November 2021. With leverage at its lowest point since the LBO by AEA in 2016, Moody's believes there is a risk the company increases gross leverage with a recapitalization that includes a dividend distribution. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if debt to EBITDA is below 5.5x for a sustained period of time, EBITDA to interest expense reaches 3.0x, free cash flow to debt exceeds 4.5%, and the company implements a more conservative financial policy. The ratings could be downgraded if debt to EBITDA exceeds 6.5x for a sustained period of time, EBITDA to interest expense falls below 2.0x, free cash flow to debt below 1%, and the company executes significant debt-financed acquisitions or dividends. Based in St. Louis, Missouri, TricorBraun Holdings, Inc. is a distributor of rigid packaging, with capabilities in package design and engineering, logistics, and international sourcing. The product line includes plastic and glass bottles, sprayers, dispensers, closures, pails, tubes, drums and other items. End markets include personal care, healthcare, food, industrial and household chemicals, and wine. Revenue for the twelve months ended Sept. 30, 2020 were approximately $1.4 billion. TricorBraun is a portfolio company of AEA investors and does not publicly disclose financial information. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers Methodology published in September 2020. US STEEL: Moody's Affirms Caa1 CFR on Weak Debt Protection Metrics ------------------------------------------------------------------ Moody's Investors Service changed United States Steel Corporation's outlook to stable from negative. At the same time, Moody's affirmed all ratings including the Caa1 Corporate Family rating and the Caa1-PD Probability of Default rating. The Speculative Grade Liquidity Rating remains unchanged at SGL-3. "The change in outlook to stable acknowledges the improving fundamentals in most of the end markets to which U. S. Steel sells, both in the US and in Europe, as well as the strong recovery in flat-rolled and other steel prices, which, while potentially overheated, are nonetheless likely to remain at favorable levels for continued performance improvement through the balance of 2020 and in 2021," said Carol Cowan, Moody's Senior Vice President and lead analyst for U. S. Steel. "The outlook change also acknowledges U. S. Steel's announcement that it is exercising its option to acquire the remaining equity of Big River Steel for $774 million from available cash, and the expected strategic benefits and lower cost production profile that full ownership will bring. However, a level of caution is incorporated with respect to the execution and timing of achieving the expected business strategic objectives," Cowan added. Affirmations: Issuer: United States Steel Corporation Corporate Family Rating, Affirmed Caa1 Probability of Default Rating, Affirmed Caa1-PD Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD2) Senior Unsecured Conv./Exch. Bond/Debenture, Affirmed Caa2 (LGD5) Senior Unsecured Regular Bond/Debenture, Affirmed Caa2 (LGD5) Issuer: Allegheny County Industrial Dev. Auth., PA Senior Unsecured Revenue Bonds, Affirmed Caa2 (LGD5) Issuer: Bucks County Industrial Development Auth., PA Senior Unsecured Revenue Bonds, Affirmed Caa2 (LGD5) Issuer: Hoover (City of) AL, Industrial Devel. Board Senior Unsecured Revenue Bonds, Affirmed Caa2 (LGD5) Issuer: Indiana Finance Authority Senior Unsecured Revenue Bonds, Affirmed Caa2 (LGD5) Issuer: Ohio Water Development Authority Senior Unsecured Revenue Bonds, Affirmed Caa2 (LGD5) Issuer: Southwestern Illinois Development Authority Senior Unsecured Revenue Bonds, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: United States Steel Corporation Outlook, Changed To Stable From Negative RATINGS RATIONALE The Caa1 CFR reflects U. S. Steels weak debt protection metrics and high leverage as the impact of the coronavirus on its sales, revenues and earnings, particularly in the second quarter of 2020, which represents the trough of deterioration, compounded a weak performance in 2019. The most segment impacted was the North American flat-rolled products segment where for the nine months ended September 30, 2020 shipments of 6.5 million tons were down 21% from the comparable period in 2019. With the resumption of automotive production in May and improving trends in other end markets, with the exception of the Oil Country Tubular Goods (OCTG) markets, where drilling activity remains depressed, the third quarter evidenced a pick-up in tons shipped in the North American segment as well as in the U. S. Steel Europe segment and a turnaround from the steep losses incurred in the first two quarters of 2020. Nonetheless EBITDA is expected to remain negative for the full year 2020. Fundamentals in the steel industry have continued to show improvement in the back half of 2020 with better capacity utilization, longer lead times, and strengthened pricing (hot-rolled coil currently around $875/short ton from a bottom in the low $400's/short ton in May. The recent run-up in scrap prices are a contributing factor to the increased hot-rolled coil prices and together with elevated iron ore prices will restrain the degree of metal margin advancement that can be achieved. Nonetheless, given the current spread, metal margins will strengthen materially. Although the run-up in prices appears to be somewhat over heated given demand not expected to grow materially beyond pre coronavirus levels, prices are still expected to remain at healthy levels. The strengthening price environment will be more reflected in U. S. Steel's performance in 2021 given the lag nature on its spot and adjustable contract business. Despite the improved operating environment, recovery in metrics to levels commensurate with the rating is expected to be slow but steady. Based upon third quarter run rates and improvement in EBITDA/ton, EBITDA in 2021, on a standalone basis for U. S. Steel is expected to be around $600 million (unadjusted - approximately $750 million with Moody's standard adjustments) versus an EBITDA loss in 2020 anticipated at roughly negative $70 million (including Moody's standard adjustments). On this basis, leverage is expected to remain elevated at just under 8x in 2021. With the full ownership of Big River Steel (3.3 million net tons following completion of its Phase II-A expansion) in 2021 and the Fairfield EAF (1.6 million net tons) having started up -- shipments and lower costs on this production will benefit earnings performance although the inclusion of Big River Steel's debt (around $1.9 billion -- its capital structure will remain in place) will contribute to leverage remaining elevated despite EBITDA from Big River. Free cash flow is expected to be moderately negative given currently planned capital expenditures in 2021 of around $675 million. The exercise of the option to acquire the balance of Big River represents an important part of U. S. Steels' strategic objective to be the "Best of Both" with respect to steelmaking capacity from EAF's and blast furnaces. Key priorities in this strategy beyond Big River include the endless casting and rolling project at Mon Valley, the upgrades to the Gary Hot Strip Mill and the Dynamo line project as USSK, which is currently delayed. The SGL-3 speculative grade liquidity rating reflects U. S. Steels adequate liquidity position as evidenced by its cash position of $1.7 billion at September 30, 2020 (excluding restricted cash held as long-term). The company has a $2 billion asset based revolving credit facility (ABL- matures in October 2024), which contains a $150 million first in -- last out tranche. $500 million was outstanding under the ABL at September 30, 2020. The facility requires the company to maintain a fixed charge coverage ratio for the most recent four consecutive quarters should availability be less than the greater of 10% of the total aggregate commitment and $200 million. The fixed charge ratio allows for certain exclusions such as certain capital expenditures. As U. S. Steel would not be able to meet the fixed charge coverage ratio the availability block is in effect reducing total availability by $200 million at September 30, 2020. Additionally, due to the levels of receivables and inventory qualifying for inclusion in the borrowing base being less than the facility total, availability was reduced by a further $294 million. Consequently, availability at September 30, 2020 was $1.0 billion. The facility can be accelerated 91 days prior to the maturity of any senior debt outstanding if certain liquidity conditions are not met. With the company's debt repayments in recent years, there are no senior note maturities until 2025, subsequent to the maturity date of the ABL. There is also a Euro 460 million ($539 million equivalent at September 30, 2020) secured credit facility (receivables and inventory) at the company's U. S. Steel Kosice (USSK) subsidiary in Europe, which matures in December 2024. Euro 350 million (roughly $410 million) was outstanding at September 30, 2020). The facility contains a net debt/EBITDA covenant for which the first measurement date is June 30, 2021 and a further covenant requiring that total equity be no less than 40% of total assets. Structural considerations The B2 rating on the senior secured notes reflects their priority position in the capital structure. The Caa2 ratings on the convertible notes, senior unsecured notes and IRB's reflects their effective subordination to the secured ABL and secured notes as well as priority payables. U. S. Steel, like all producers in the global steel sector faces pressure to reduce greenhouse gas and air pollution emissions, among a number of other sustainability issues and will likely incur costs to meet increasingly stringent regulations. As such, the company faces longer term secular challenges in the ongoing shift away from blast furnace steelmaking to EAFs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Should the improvement in market conditions be sustainable and the strategic business objectives of the "best of both" strategy be achieved with the acquisition of the remaining percentage of Big River, positive momentum on the rating could occur. Quantitatively, should U. S. Steel be able to sustain leverage of no more than 4.5x through varying price points on the downside and (CFO-dividends) in excess of 10%, ratings could be positively impacted. Should debt protection metrics and leverage not evidence and improving trend or the degree of cash burn exceed expectations and the liquidity runway deteriorate more rapidly than anticipated the ratings could be downgraded. Headquartered in Pittsburgh, Pennsylvania, United States Steel Corporation is the second largest flat-rolled producer in the US in terms of production capacity. The company manufactures and sells a wide variety of steel sheet, tubular and tin products across a broad array of industries, including service centers, transportation, appliance, construction, containers, and oil, gas and petrochemicals. Revenues for the twelve months ended September 30, 2020 were $10.0 billion. The principal methodology used in these ratings was Steel Industry published in September 2017. VALARIS PLC: RCF Agent Says Plan Patently Unconfirmable ------------------------------------------------------- Citibank, N.A., objects to the Valaris plc, et al.'s motion for an order approving the adequacy of the latest iteration of the Disclosure Statement, approval of which will allow the Debtors to solicit votes on the Plan. Citibank is the administrative agent (the "RCF Agent") under that Fourth Amended and Restated Credit Agreement, dated as of May 7, 2013 (the "RCF Credit Agreement"), by and among Debtors Valaris plc and Pride International LLC, as Borrowers, the RCF Agent and the financial institutions party (collectively, the "RCF Lenders" and together with the RCF Agent, the "RCF Parties"). Citibank claims that the Motion is another step in the Debtors' unwavering pursuit of their fatally flawed prepetition deal with the ad hoc group of holders of the Debtors' Senior Notes (the "Ad Hoc Group"). Citibank asserts that the motion should be denied because the Proposed Plans are patently unconfirmable and proceeding to solicit votes on them would be futile. Even if the Court were to determine that the Proposed Plans were not patently unconfirmable, the Motion should be denied because the Disclosure Statement does not to meet the requirements of Section 1125 of the Bankruptcy Code, as it not only fails to contain adequate information, but also is replete with misleading information, the RCF Agent tells the Court. Citibank further asserts that the Proposed Plans proclaim that they are separate plans of reorganization for each Debtor, yet, beyond that window dressing, it is readily apparent that the Proposed Plans actually improperly ignore the separateness of the Debtors. Citibank points out that the Proposed Plans function as a single plan in a manner that completely ignores the guarantee claims that the RCF Parties have against the various Debtors that guaranteed the RCF Credit Agreement despite the unambiguous language to the contrary in both the Disclosure Statement and the Proposed Plans. Citibank states that a proposed recovery to the RCF Parties solely in the form of PostEmergence Parent Equity not only ignores the separateness of the Debtors (including the RCF Guarantor Debtors), but also would result in the RCF Parties losing the structural seniority that they currently have as a result of the RCF Guarantees without just compensation. Citibank says that the Disclosure Statement also neglects to describe how, if a class of creditors of a specific Debtor were to reject that Debtor's Proposed Plan, non-consensual confirmation would be pursued by that specific Debtor. A full-text copy of Citibank's objection dated Dec. 10, 2020, is available at https://bit.ly/2WusIwG from PacerMonitor at no charge. Attorneys for Citibank: Lauren Randle SHEARMAN & STERLING LLP 2828 North Harwood Street, 18th floor Dallas, Texas 75201 Telephone: 214.271.5777 E-mail: lauren.randle@shearman.com Fredric Sosnick Daniel H.R. Laguardia Ned S. Schodek Grace J. Lee SHEARMAN & STERLING LLP 599 Lexington Avenue New York, New York 10022 Telephone: 212.848.4000 E-mail: fsosnick@shearman.com ned.schodek@shearman.com daniel.laguardia@shearman.com grace.lee@shearman.com About Valaris plc Valaris plc (NYSE: VAL) provides offshore drilling services. It is an English limited company with its corporate headquarters located at 110 Cannon St., London. On the Web: http://www.valaris.com/ On Aug. 19, 2020, Valaris and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34114). The Debtors had total assets of $13,038,900,000 and total liabilities of $7,853,500,000 as of June 30, 2020. The Debtors tapped Kirkland & Ellis LLP and Slaughter and May as their bankruptcy counsel, Lazard as investment banker, and Alvarez & Marsal North America LLC as their restructuring advisor. Stretto is the claims agent, maintaining the page http://cases.stretto.com/Valaris Kramer Levin Naftalis & Frankel LLP and Akin Gump Strauss Hauer & Feld LLP serve as legal advisors to the consenting noteholders while Houlihan Lokey Inc. serves as their financial advisor. VALARIS PLC: Says Amended Disclosures Address RCF Objections ------------------------------------------------------------ Valaris PLC and its debtor affiliates filed a Second Amended Chapter 11 Plan of Reorganization and a corresponding Disclosure Statement on Dec. 15, 2020. According to the Debtors, the Disclosure Statement contains adequate information, including detailed descriptions of the Debtors, the chapter 11 cases, the Plan, and its potential tax consequences for the Debtors and stakeholders. It also includes five-year financial projections, a valuation analysis, and a hypothetical liquidation analysis. The Debtors' motion for approval of the Disclosure Statement is affirmatively supported by over 72% of the Debtors' bondholders (holding over $4.8 billion of debt across all 15 tranches of debt), which are by far the Debtors' largest creditor group, and the Official Creditors' Committee does not object to the Motion. "There is no question that these chapter 11 cases have been incredibly consensual among the Debtors and every creditor constituency other than the RCF Lenders, and, if the Plan is confirmed, the Debtors would have the best capital structure in the industry. The Debtors have continued the hearing on the Motion twice, but it is time to move these cases along. Not surprisingly, the only party that objects to the Motion is the RCF Agent. The Court should overrule that Objection. Together with the filing of this Reply, the Debtors are filing an amended Disclosure Statement intended to address all of the RCF Agent's purported disclosure concerns. The rest of the assertions in the Objection are irrelevant to the Disclosure Statement hearing and do not come close to demonstrating that the Plan is patently unconfirmable. Because the RCF Agent has been previewing its confirmation objections since the Petition Date, the Debtors address some of these issues today," the Debtors said. The Debtors have filed the Second Amended Disclosure Statement to address every reasonable informational request from the RCF Agent. Specifically, the Debtors added the following to the Disclosure Statement in response to the Objection: * an entity-by-entity liquidation analysis with respect to the RCF Obligors; * further disclosure regarding the RCF claim amount, including the undrawn letters of credit; * computations regarding MIP dilution; * disclosures regarding general unsecured claims against the RCF Obligors; * disclosures regarding the marketing process for the exit financing; * trading prices of debt; and * miscellaneous other facts and allegations that the RCF Agent requested to be disclosed. A full-text copy of the Second Amended Disclosure Statement dated Dec. 15, 2020, is available at https://bit.ly/3p6LQNy from PacerMonitor at no charge. Co-Counsel to the Debtors: JACKSON WALKER L.L.P. Matthew D. Cavenaugh Kristhy M. Peguero Genevieve Graham 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Email: mcavenaugh@jw.com kpeguero@jw.com ggraham@jw.com - and - KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP Anup Sathy, P.C. Ross M. Kwasteniet, P.C. Spencer A. Winters 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 E-mail: anup.sathy@kirkland.com ross.kwasteniet@kirkland.com About Valaris plc Valaris plc (NYSE: VAL) provides offshore drilling services. It is an English limited company with its corporate headquarters located at 110 Cannon St., London. Visit http://www.valaris.com/for more information. On Aug. 19, 2020, Valaris and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34114). The Debtors had total assets of $13,038,900,000 and total liabilities of $7,853,500,000 as of June 30, 2020. The Debtors tapped Kirkland & Ellis LLP and Slaughter and May as their bankruptcy counsel, Lazard as investment banker, and Alvarez & Marsal North America LLC as their restructuring advisor. Stretto is the claims agent, maintaining the page http://cases.stretto.com/Valaris Kramer Levin Naftalis & Frankel LLP and Akin Gump Strauss Hauer & Feld LLP serve as legal advisors to the consenting noteholders while Houlihan Lokey Inc. serves as their financial advisor. VTV THERAPEUTICS: Subsidiary Signs License Deal with Anteris ------------------------------------------------------------ vTv Therapeutics LLC, a controlled subsidiary of vTv Therapeutics Inc., entered into a license agreement with Anteris Bio, Inc., under which Anteris obtained a worldwide, exclusive and sublicensable license to develop and commercialize vTv LLC's Nrf2 activator, HPP971. Under the terms of the Anteris License Agreement, Anteris will pay vTv LLC an initial license fee of $2.0 million. vTv LLC is eligible to receive additional potential development, regulatory, and sales-based milestone payments totaling up to $151 million. Anteris is also obligated to pay vTv royalty payments at a double digit rate based on annual net sales of licensed products. Such royalties will be payable on a licensed product-by-licensed product basis until the latest of expiration of the licensed patents covering a licensed product in a country, expiration of data exclusivity rights for a licensed product in a country, or a specified number of years after the first commercial sale of a licensed product in a country. In addition, vTv LLC received a minority ownership interest in Anteris. Under the terms of the Anteris License Agreement, Anteris will be responsible for the development and commercialization of the licensed products, at its cost, and is required to use commercially reasonable efforts with respect to such development and commercialization efforts. The Anteris License Agreement, unless terminated earlier, will continue until expiration of all royalty obligations of Anteris to vTv LLC. Either party may terminate the Anteris License Agreement for the other party's uncured material breach. Anteris may terminate the Anteris License Agreement at will upon prior written notice. Either party may terminate the Anteris License Agreement for the other party's insolvency. About vTv Therapeutics vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company focused on developing oral small molecule drug candidates. vTv has a pipeline of clinical drug candidates led by programs for the treatment of type 1 diabetes, Alzheimer's disease, and inflammatory disorders. vTv's development partners are pursuing additional indications in type 2 diabetes, chronic obstructive pulmonary disease (COPD), and genetic mitochondrial diseases. vTv Therapeutics reported a net loss attributable to common shareholders of $17.91 million for the year ended Dec. 31, 2019 compared to a net loss attributable to common shareholders of $8.65 million for the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $7.05 million in total assets, $12.83 million in total liabilities, $45.59 million in redeemable noncontrolling interest, and a total stockholders' deficit attributable to the Company of $51.37 million. Ernst & Young LLP, in Raleigh, North Carolina, the Company's auditor since 2000, issued a "going concern" qualification in its report dated Feb. 20, 2020 citing that to date, the Company has not generated any product revenue, has not achieved profitable operations, has insufficient liquidity to sustain operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. WAVE COMPUTING: Has $57.5M Deal With Confidential Buyer ------------------------------------------------------- Wave Computing, Inc., and affiliates ask the U.S. Bankruptcy Court for the Northern District of California to authorize the sale of substantially all assets for $57.5 million cash, plus assumption of certain liabilities and obligations, subject to overbid. The identity of the Stalking Horse Bidder will remain confidential until the commencement of the Auction. For months prior to the Petition Date, the Debtors investigated various strategic alternatives, ranging from raising or financing capital to selling some or all of their assets. Ultimately, they did not receive a satisfactory offer prepetition. Since the commencement of the Chapter 11 cases, the Debtors have pursued a dual-track strategy involving either a refinancing of the company's current capital structure, as described in more detail in the Plan, or a sale of substantially all of the Assets to one or more a third parties. In furtherance of the sale track of this strategy, the Debtors retained Armory Securities, LLC as its investment banker in August 2020. Despite Armory Securities' exhaustive efforts to market the Debtors' Assets in a value-maximizing manner within the time constraints posed by the Debtors' liquidity crunch, by the end of November, none of the IOIs met the $52.5 million minimum bid required for an auction as set forth in the Fifth Amended Disclosure Statement for the Joint Chapter 11 Plan of Reorganization. Accordingly, the Debtors determined it was in the best interest of the estates to move forward with the restructuring. It was not until after the hearing to approve the Disclosure Statement that a certain potential purchaser began discussions in earnest with Armory Securities regarding a proposed competitive bid to purchase the Debtors' Assets. The Stalking Horse Bidder signed a non-disclosure agreement on Nov. 26, 2020 and submitted its initial bid to purchase substantially all of the Assets during the first week of December. The Debtors determined that the Stalking Horse Bidder offered terms superior to those of the Restructuring and that an Auction would be conducted as described in the Disclosure Statement. The parties entered into the Purchase Agreement dated Dec. 10, 2020, pursuant to which the Stalking Horse Bidder proposes to acquire the Debtors' Assets for approximately $57.5 million. In connection with the competitive offer, the Debtors determined it was in the best interest of the estates to proceed with an auction, which is currently set for Dec. 21, 2020, to solicit higher or otherwise better bids. Accordingly, the Debtors formulated their Bidding Procedures, which, subject to Court approval, will allow them to continue to market the Assets for sale to potential purchasers other than the Stalking Horse Bidder and solicit Qualified Bids from Qualified Bidders to obtain the highest or otherwise best value of the Assets for the estates. Pursuant to the Bidding Procedures, each Qualified Bid is required to be accompanied by a clean purchase agreement signed by such Bidder, along with a redline reflecting the Bidder's proposed changes to the Stalking Horse Agreement. Further, as a condition to submitting a Qualified Bid, each such Bidder will be committed to consummating and funding the sale of the Assets proposed in the Modified Agreement within three Business Days after satisfaction of the respective conditions to closing. Likewise, if the Stalking Horse Bidder is the Successful Bidder, the full Stalking Horse Agreement will go into effect immediately upon entry of the Sale Order. The time periods set forth and in the Bidding Procedures were negotiated by the Stalking Horse Bidder and the Debtors to progress with the Sale in an expedient yet optimal manner to ensure a swift close to these Chapter 11 Cases. Failure to adhere to such time periods could jeopardize the closing of the Sale, which the Debtors believe is the best means of maximizing the value of their Assets. Accordingly, the Debtors intend to proceed with the Sale immediately upon the closing of the Auction and believe that approval of the Sale in the manner set forth herein and in accordance with the Bidding Procedures is in the best interest of the Debtors' estates. The salient terms of the APA are: a. Purchase Price: $57.5 million in cash plus the assumption of the Assumed Liabilities b. If the Debtors receive a Qualified Bid other than the Stalking Horse Agreement, the Debtors will conduct an open public Auction in connection with the Sale. c. Either the Purchaser or the Sellers may terminate the Stalking Horse Agreement if the Closing will not have occurred by the close of business on March 1, 2021. d. The Closing of the Sale and transfer of the Assets is an important component of, and is authorized by the terms of the Plan. Accordingly, Debtors and the Stalking Horse Bidder intend for any Transfer Taxes to be exempt under section 1146 of the Bankruptcy Code. To the extent section 1146 of the Bankruptcy Code does not exempt a Transfer Tax, however, the Debtors and the Stalking Horse Bidder will each be responsible for 50% of any such Tax. e. The Debtors seek to sell the Assets to the Stalking Horse Bidder free and clear of all Liens, claims and encumbrances, including any claims of successor liability. f. Nothing in the Agreement will be deemed to either limit or expand any rights of a Secured Creditor, if any, to credit bid all or a portion of such Secured Creditor's claim. g. The Debtors ask a waiver of the 14-day stays under Bankruptcy Rules 6004(h) and 6006(d). h. The Stalking Horse Bidder has agreed to accept no breakup fees, expense reimbursement or any other bid protections. The Debtors ask that the Court schedules the Sale Hearing on or as soon as reasonably practicable after Jan. 15, 2021, to ensure compliance with the deadlines set forth in the Stalking Horse Agreement and provide sufficient time for the Debtors to obtain sufficient consents required by law or otherwise. Additionally, if the Plan is the Successful Bid or the Successful Bidder, with the consent of the Debtors after consultation with the Committee, prefers to consummate a cash sale of the Assets through confirmation of the Plan, the Debtors ask confirmation of the Plan at the hearing currently scheduled for Jan. 27, 2021 at 10:15 a.m. (PT). To facilitate and effect the Sale of the Assets, the Debtors ask authority to assume and assign certain of the Debtors' contracts and unexpired leases consistent with the procedures established in the Bidding Procedures Motion. As soon as reasonably practicable after the Court enters the Order, the Debtors will file and serve the Assumption and Assignment Notice on all non-Debtor parties to the agreements listed therein. The Contract Objection Deadline is Jan. 7, 2021 at 4:00 p.m. (PT). The Debtors ask that the Bidding Procedures Order be made effective immediately by providing that the 14-day stays under Bankruptcy Rules 6004(h) and 6006(d) are waived. A videoconference on the Motion is set for Jan. 15, 2021 at 10:15 a.m. (PT). About Wave Computing Wave Computing, Inc. -- https://wavecomp.ai -- is a Santa Clara, Calif.-based company that revolutionizes artificial intelligence (AI) with its dataflow-based solutions. Wave Computing and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Lead Case No. 20 50682) on April 27, 2020. At the time of the filing, Debtors had estimated assets of between $1 million and $10 million and liabilities of between $50 million and $100 million. Judge Elaine M. Hammond oversees the cases. The Debtors have tapped Sidley Austin, LLP as their bankruptcy counsel, Affeld Grivakes LLP as conflict counsel, Paul Weiss Rifkind Wharton & Garrison LLP as special counsel. Lawrence Perkins, chief executive officer of SierraConstellation Partners LLC, is the Debtors' chief restructuring officer. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 18, 2020. The committee is represented by Hogan Lovells US, LLP. On Nov. 20, 2020, the Court approved the Fifth Amended Disclosure Statement for the Joint Chapter 11 Plan of Reorganization for Wave Computing, Inc. and its Debtor Affiliates. [^] BOND PRICING: For the Week from December 14 to 18, 2020 ----------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- AMC Entertainment Holdings AMC 5.750 13.694 6/15/2025 AMC Entertainment Holdings AMC 6.125 14.945 5/15/2027 AMC Entertainment Holdings AMC 5.875 14.419 11/15/2026 Acorda Therapeutics Inc ACOR 1.750 55.000 6/15/2021 American Energy- Permian Basin LLC AMEPER 12.000 1.250 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 1.012 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 1.012 10/1/2024 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Basic Energy Services Inc BASX 10.750 21.500 10/15/2023 Basic Energy Services Inc BASX 10.750 18.427 10/15/2023 Briggs & Stratton Corp BGG 6.875 8.625 12/15/2020 Bristow Group Inc/old BRS 6.250 6.250 10/15/2022 Bristow Group Inc/old BRS 4.500 6.250 6/1/2023 Buffalo Thunder Development Authority BUFLO 11.000 50.125 12/9/2022 CBL & Associates LP CBL 5.250 38.228 12/1/2023 Calfrac Holdings LP CFWCN 8.500 8.644 6/15/2026 Calfrac Holdings LP CFWCN 8.500 8.644 6/15/2026 Chesapeake Energy Corp CHK 11.500 15.250 1/1/2025 Chesapeake Energy Corp CHK 11.500 16.000 1/1/2025 Chesapeake Energy Corp CHK 5.500 6.250 9/15/2026 Chesapeake Energy Corp CHK 6.625 6.188 8/15/2020 Chesapeake Energy Corp CHK 5.750 6.313 3/15/2023 Chesapeake Energy Corp CHK 8.000 6.500 6/15/2027 Chesapeake Energy Corp CHK 4.875 6.250 4/15/2022 Chesapeake Energy Corp CHK 8.000 5.875 1/15/2025 Chesapeake Energy Corp CHK 6.875 4.812 11/15/2020 Chesapeake Energy Corp CHK 8.000 5.750 3/15/2026 Chesapeake Energy Corp CHK 7.500 6.063 10/1/2026 Chesapeake Energy Corp CHK 8.000 5.563 3/15/2026 Chesapeake Energy Corp CHK 6.875 5.643 11/15/2020 Chesapeake Energy Corp CHK 8.000 5.673 1/15/2025 Chesapeake Energy Corp CHK 8.000 6.341 6/15/2027 Chesapeake Energy Corp CHK 8.000 5.673 1/15/2025 Chesapeake Energy Corp CHK 7.000 6.250 10/1/2024 Chesapeake Energy Corp CHK 8.000 6.341 6/15/2027 Chesapeake Energy Corp CHK 8.000 5.563 3/15/2026 Chinos Holdings Inc CNOHLD 7.000 0.332 N/A Chinos Holdings Inc CNOHLD 7.000 0.332 N/A Dean Foods Co DF 6.500 0.625 3/15/2023 Dean Foods Co DF 6.500 0.750 3/15/2023 Diamond Offshore Drilling DOFSQ 7.875 10.550 8/15/2025 Diamond Offshore Drilling DOFSQ 5.700 13.000 10/15/2039 Diamond Offshore Drilling DOFSQ 3.450 7.875 11/1/2023 ENSCO International Inc VAL 7.200 5.750 11/15/2027 Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 1.036 0.072 1/30/2037 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 29.726 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 29.624 7/15/2023 Extraction Oil & Gas Inc XOG 7.375 18.500 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 18.500 2/1/2026 Extraction Oil & Gas Inc XOG 7.375 17.788 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 17.840 2/1/2026 Federal Farm Credit Banks Funding FFCB 0.520 99.685 9/11/2023 Federal Farm Credit Banks Funding FFCB 0.350 99.866 8/11/2022 Federal Home Loan Banks FHLB 2.620 99.126 12/24/2029 Federal Home Loan Banks FHLB 0.330 99.845 3/22/2024 Federal Home Loan Mortgage FHLMC 0.350 99.860 9/22/2022 Federal Home Loan Mortgage FHLMC 2.000 99.659 12/23/2025 Federal Home Loan Mortgage FHLMC 1.000 99.762 12/23/2026 Federal Home Loan Mortgage FHLMC 0.330 99.737 6/22/2022 Federal Home Loan Mortgage FHLMC 0.380 99.885 6/22/2022 Federal Home Loan Mortgage FHLMC 2.010 99.717 12/23/2024 Federal Home Loan Mortgage FHLMC 2.150 99.661 12/23/2026 Federal Home Loan Mortgage FHLMC 1.800 99.506 6/23/2023 Federal Home Loan Mortgage FHLMC 1.950 99.704 12/23/2024 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp FGP 8.625 20.000 6/15/2020 Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011 Foresight Energy LLC / Foresight Energy Finance Corp FELP 11.500 0.469 4/1/2023 Foresight Energy LLC / Foresight Energy Finance Corp FELP 11.500 0.469 4/1/2023 Frontier Communications FTR 10.500 51.250 9/15/2022 Frontier Communications FTR 7.125 47.563 1/15/2023 Frontier Communications FTR 6.250 47.500 9/15/2021 Frontier Communications FTR 8.750 46.000 4/15/2022 Frontier Communications FTR 9.250 44.500 7/1/2021 Frontier Communications FTR 10.500 51.181 9/15/2022 Frontier Communications FTR 10.500 51.181 9/15/2022 GNC Holdings Inc GNC 1.500 1.250 8/15/2020 GTT Communications Inc GTT 7.875 34.864 12/31/2024 GTT Communications Inc GTT 7.875 35.221 12/31/2024 General Electric Co GE 5.000 93.000 N/A Goodman Networks Inc GOODNT 8.000 53.000 5/11/2022 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 57.897 9/30/2021 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 57.897 9/30/2021 Guitar Center Inc GTRC 13.000 49.500 4/15/2022 HD Supply Inc HDSUPP 5.375 106.301 10/15/2026 Hertz Corp/The HTZ 6.250 53.057 10/15/2022 Hi-Crush Inc HCR 9.500 0.051 8/1/2026 High Ridge Brands Co HIRIDG 8.875 4.344 3/15/2025 High Ridge Brands Co HIRIDG 8.875 4.344 3/15/2025 HighPoint Operating Corp HPR 7.000 41.373 10/15/2022 ION Geophysical Corp IO 9.125 68.938 12/15/2021 ION Geophysical Corp IO 9.125 64.251 12/15/2021 ION Geophysical Corp IO 9.125 64.251 12/15/2021 ION Geophysical Corp IO 9.125 64.251 12/15/2021 International Wire Group ITWG 10.750 89.120 8/1/2021 J Crew Brand LLC / J Crew Brand Corp JCREWB 13.000 52.124 9/15/2021 JC Penney Corp Inc JCP 5.875 9.000 7/1/2023 JC Penney Corp Inc JCP 5.875 5.850 7/1/2023 JCK Legacy Co MNIQQ 6.875 0.309 3/15/2029 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 0.603 10/15/2025 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 0.416 10/15/2025 K Hovnanian Enterprises Inc HOV 5.000 12.289 2/1/2040 K Hovnanian Enterprises Inc HOV 5.000 12.289 2/1/2040 LSC Communications Inc LKSD 8.750 14.824 10/15/2023 LSC Communications Inc LKSD 8.750 14.900 10/15/2023 Liberty Media Corp LMCA 2.250 47.600 9/30/2046 MAI Holdings Inc MAIHLD 9.500 15.901 6/1/2023 MAI Holdings Inc MAIHLD 9.500 15.901 6/1/2023 MAI Holdings Inc MAIHLD 9.500 15.901 6/1/2023 MF Global Holdings Ltd MF 9.000 15.625 6/20/2038 MF Global Holdings Ltd MF 6.750 15.625 8/8/2016 Mashantucket Western Pequot Tribe MASHTU 7.350 16.250 7/1/2026 Men's Wearhouse LLC/The TLRD 7.000 1.750 7/1/2022 Men's Wearhouse LLC/The TLRD 7.000 2.832 7/1/2022 NWH Escrow Corp HARDWD 7.500 32.500 8/1/2021 NWH Escrow Corp HARDWD 7.500 32.553 8/1/2021 Neiman Marcus Group LLC/The NMG 7.125 4.535 6/1/2028 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.203 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 5.163 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 27.250 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 27.250 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.203 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 5.163 10/25/2024 Nine Energy Service Inc NINE 8.750 43.847 11/1/2023 Nine Energy Service Inc NINE 8.750 43.017 11/1/2023 Nine Energy Service Inc NINE 8.750 40.298 11/1/2023 Northwest Hardwoods Inc HARDWD 7.500 33.000 8/1/2021 Northwest Hardwoods Inc HARDWD 7.500 32.536 8/1/2021 OMX Timber Finance Investments II LLC OMX 5.540 1.250 1/29/2020 Peabody Energy Corp BTU 6.000 58.865 3/31/2022 Peabody Energy Corp BTU 6.000 56.819 3/31/2022 Pride International LLC VAL 6.875 7.784 8/15/2020 Pride International LLC VAL 7.875 8.000 8/15/2040 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products REV 6.250 31.127 8/1/2024 Rolta LLC RLTAIN 10.750 3.729 5/16/2018 SESI LLC SPN 7.125 32.000 12/15/2021 SESI LLC SPN 7.750 31.750 9/15/2024 SESI LLC SPN 7.125 32.000 12/15/2021 SESI LLC SPN 7.125 31.984 12/15/2021 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.125 0.771 11/1/2020 Sears Holdings Corp SHLD 8.000 2.020 12/15/2019 Sears Holdings Corp SHLD 6.625 1.149 10/15/2018 Sears Holdings Corp SHLD 6.625 1.149 10/15/2018 Sears Roebuck Acceptance SHLD 7.500 0.870 10/15/2027 Sears Roebuck Acceptance SHLD 7.000 0.626 6/1/2032 Sears Roebuck Acceptance SHLD 6.500 0.839 12/1/2028 Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014 Senseonics Holdings Inc SENS 5.250 30.063 1/15/2025 Senseonics Holdings Inc SENS 5.250 42.885 2/1/2023 Summit Midstream Partners SMLP 9.500 25.000 N/A TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Toys R Us Inc TOY 7.375 1.317 10/15/2018 Transworld Systems Inc TSIACQ 9.500 27.000 8/15/2021 Ultra Resources Inc/US UPL 11.000 5.125 7/12/2024 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 9.000 54.738 8/15/2021 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 9.000 55.368 8/15/2021 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. 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