/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/210222.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, February 22, 2021, Vol. 25, No. 52 Headlines 1401 S. 22ND AVENUE: Voluntary Chapter 11 Case Summary 335 LAKE AVENUE: Black Buying Aspen Property for $9.375 Million 511 GROUP: Court Extends Plan Exclusivity Thru April 25 84 LUMBER: S&P Hikes Issuer Credit Rating to 'BB-', Outlook Stable AAR CORP: S&P Alters Outlook to Stable, Affirms 'BB' ICR AJRANC INSURANCE: Has Cash Collateral Access Until March 22 ALEXANDER D. LEE: Selling 2010 Lexus LX 570 to CarMax for $30K ALGY TRIMMINGS: Seeks to Hire Dannelly Monteleone as Accountant ALL IN JETS: Auction of Substantially All Assets Set for March 4 ALLIED INJURY: Anguizolas Get 70% of Net Proceeds of Collections ALPHABET HOLDING: Moody's Completes Review, Retains B3 CFR AMERICAN CRYOSTEM: Incurs $46K Net Loss for Quarter Ended Dec. 31 AMERICAN GREETINGS: Moody's Completes Review, Retains B2 CFR AMERICANN INC: Incurs $502,284 Net Loss for Quarter Ended Dec. 31 AMERICANN INC: JV Partner Opens Retail Cannabis Dispensary ANASTASIA PARENT: Moody's Completes Review, Retains Caa3 CFR APEX PARKS GROUP: Converts Case to Chapter 7 Liquidation ART VAN FURNITURE: Heirs Buy Back Legal Rights to Name ASP EMERALD: S&P Places 'B' Issuer Credit Rating on Watch Pos. ASTROTECH CORP: Closes $9.25M Registered Direct Offering ASTROTECH CORP: Incurs $1.6M Net Loss for Quarter Ended Dec. 31 AVERY ASPHALT: Case Summary & 20 Largest Unsecured Creditors AVERY EQUIPMENT: Voluntary Chapter 11 Case Summary AVERY HOLDINGS: Voluntary Chapter 11 Case Summary AVIS BUDGET: Moody's Gives B3 Rating on $600MM Sr. Unsecured Notes AVIS BUDGET: S&P Alters Outlook to Stable, Affirms 'B+' ICR AVIVAR HOSPITALITY: Unsecured Creditors to Recover 100% in Plan B-LINE CARRIERS: Court Allows Cash Collateral Use Until March 22 BRACHIUM INC: Gets OK to Hire Macdonald Fernandez as Legal Counsel CALAIS REGIONAL HOSPITAL: Down East Buys Rival Out of Bankruptcy CAMBER ENERGY: Inks Merger Agreement with Viking Energy CAMP CROTEAU: Seeks Cash Collateral Access Thru July 15 CARECENTRIX HOLDINGS: S&P Downgrades ICR to 'B-', Outlook Stable CARVER BANCORP: Incurs $1.3 Million Net Loss in Third Quarter CCRR PARENT: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable CHRISTIAN CARE: Fitch Lowers Series 2014 and 2016 Bonds to 'D' CICI'S HOLDINGS: Court Okays Entire $9-Million Bankruptcy Loan CITIUS PHARMACEUTICALS: Closes $76.5M Registered Direct Offering CLEARPOINT CHEMICALS: Creditors Committee Says Plan Inadequate CLEARPOINT CHEMICALS: Rocky Mountain Says Disclosures Deficient CLEARPOINT CHEMICALS: UMB Capital Opposes to Disclosure Statement COMCAR INDUSTRIES: Has $1.62-Mil. Wind-Down Budget COMMUNITY HEALTH: Board Elects Kevin Hammons as President, CFO COMMUNITY INTERVENTION: $11.85M Sale of All Futures Assets Approved COMMUNITY INTERVENTION: To Submit Proposed Order on Sale of Assets COMSTOCK RESOURCES: Fitch Rates Eight-Year Unsecured Notes 'B+' COMSTOCK RESOURCES: S&P Assigns 'B' Rating on New Sr. Unsec. Debt CONTINENTAL COIFFURES: Amended Small Business Plan Due March 19 CORNUS MONTESSORI: Seeks to Hire RoganMillerZimmerman as Counsel COTY INC: Moody's Completes Review, Retains Caa1 CFR CRED INC: Former CFO Fights Court Ruling to Keep Chapter 11 Alive CRED INC: Quinn Emanuel Agrees to Return Most of $350,000 Fees D.W. TRIM: May Use Cash Collateral Use Thru March 30 DANNY R BARTEL: Can Use Cash Collateral Until Feb. 25 DELL TECHNOLOGIES: Fitch Assigns 'BB+' LongTerm IDR, Outlook Stable DESTILERIA NACIONAL: Court Rejects Debtor's Plan & Disclosures DIVERSITECH HOLDINGS: Moody's Rates $487MM First Lien Loan 'B2' DOLE FOOD: S&P Places 'B' ICR on Watch Pos. on Merger Announcement DRC III: Seeks Approval to Hire Baird Holm as Special Counsel EASTERDAY RANCHES: Seeks to Hire Bush Kornfeld as Local Counsel EASTERDAY RANCHES: Seeks to Hire Davis Wright as Special Counsel EASTERDAY RANCHES: Seeks to Hire Pachulski Stang as Legal Counsel ECOARK HOLDINGS: Julia Olguin Appointed White River CEO EDGEWELL PERSONAL: Moody's Completes Review, Retains Ba3 CFR ELLINGTON 2021-1: S&P Assigns Prelim B (sf) Rating on B-2 Certs ENERGIZER HOLDINGS: Moody's Completes Review, Retains B1 CFR ESPORTS USA: Unsecured Creditors to Recover 100% in Plan EVANGEL INTERNATIONAL: Wins Court Approval of Reorganization Plan EXACTUS INC: 3i Agrees to Settle Pending Litigation FARM-RITE INC: Wins Cash Collateral Access Until March 16 FENCEPOST PRODUCTIONS: March 24 Amended Disclosure Hearing Set FF FUND: April 26 & 27 Plan Confirmation Hearing Set FIELDWOOD ENERGY: Will Pay $2 Mil. to Settle Oil Spill Allegations FIREBALL REALTY: Sargent Buying Manchester Property for $720K FLEX ACQUISITION: S&P Assigns 'B' Rating on New $1.275BB Term Loan FLOYD SQUIRES: Liquidating Agent Files Notice on Property Sale FLOYD SQUIRES: Liquidating Agent Selling Eureka Property for $188K FREEMAN HOLDINGS: $500K Sale of Springdale Property to Arvest OK'd FREEPORT-MCMORAN INC: Fitch Alters Outlook on BB+ IDR to Positive FRONTIER COMMUNICATIONS: Seeks Oct. 14 Plan Exclusivity Extension GALAXY NEXT: Incurs $7.8 Million Net Loss for Quarter Ended Dec. 31 GALLERIA OF ST. MATTHEWS: Case Summary & 15 Unsecured Creditors GB SCIENCES: Incurs $594K Net Loss for Quarter Ended Dec. 31 GLENROY COACHELLA: Lender Asks Court to Appoint Chapter 11 Trustee GRUPO AEROMEXICO: Shareholders May Get "Very Little or No" Value GTT COMMUNICATIONS: Considers Pre-Packaged Chapter 11 to Cut Debt GULFPORT ENERGY: Committee Wants Note Claims in Separate Class GULFPORT ENERGY: UCC Says Disclosures Have Glaring Deficiencies HAJJAR BUSINESS: Can Use Cash Collateral Until May 25 HARGRAY HOLDINGS: S&P Places 'B+' ICR on CreditWach Positive HARLEY-DAVIDSON: Egan-Jones Lowers Senior Unsecured Ratings to BB HCA HEALTHCARE: Egan-Jones Hikes Senior Unsecured Ratings to BB- HERBALIFE NUTRITION: Moody's Completes Review, Retains Ba3 CFR HILLMAN COS: S&P Assigns Prelim 'B+' Rating on $1.035BB Term Loans HILLMAN SOLUTIONS: Fitch Assigns Expected 'BB-(EXP)' LongTerm IDR HOFFMASTER GROUP: Moody's Completes Review, Retains Caa1 CFR HORIZON THERAPEUTICS: Moody's Rates New Sr. Term Loan 'Ba1(LGD3)' HORIZON THERAPEUTICS: S&P Assigns Prelim BB+ Rating on Sec. Loan IBIO INC: Names Robert Lutz as Chief Financial and Business Officer IN-SHAPE HOLDINGS: Court Approves Bankruptcy Sale to Lenders INFINITE BIDCO: Moody's Assigns First Time B3 Corp. Family Rating INNOVATIVE SOFTWARE: Adequate Protection Payments to Begin Feb. 23 IOWA FERTILIZER: S&P Affirms 'BB-' Rating on Senior Secured Bonds IOWA FINANCE: Fitch Hikes Rating on Disaster Area Bonds to 'B+' IQVIA INC: S&P Rates New Euro-Denominated Sr. Unsecured Notes 'BB' ISAGENIX INTERNATIONAL: Moody's Completes Review, Retains Caa2 CFR JP INTERMEDIATE: Moody's Completes Review, Retains Caa3 CFR KNOTEL INC: Digiatech Can File Reply to Bid Procedures for Assets KNOTEL INC: Extends Sale Timeline to Pacify Creditors KNOW LABS: Incurs $5.3 Million Net Loss for Quarter Ended Dec. 31 KNOWLTON DEVELOPMENT: Moody's Completes Review, Retains B3 CFR LADAN INC: Files Projections Ahead of March 9 Hearing LAGO RESORT: S&P Downgrades ICR to 'CCC-', Outlook Negative LAX IN-FLITE: Seeks to Hire G&B Law as Bankruptcy Counsel LBLA VENTURES: Voluntary Chapter 11 Case Summary LEWISBERRY PARTNERS: Selling 3 Lewisberry Properties for $792K LIGHTHOUSE RESOURCES: MBTL Selling Equipment to NWA for $75K LISTO WAY GROUP: Seeks Approval to Hire Bankruptcy Attorneys M/I HOMES: Egan-Jones Hikes Senior Unsecured Ratings to BB+ M/I HOMES: S&P Upgrades ICR to 'BB-' on Increased Profits MALLINCKRODT PLC: Asks Judge to OK $114 Million Loan Prepayment MALLINCKRODT PLC: Says Rival Unlawfully Recruited Its Workers MARY CECILIA RIDGEWAY: Flemisters Buying Corona Property for $838K MATTHEW O'REILLY: Foxtrot Burger Owner in Chapter 7 MBM SAND: March 23 Plan & Disclosure Hearing Set MECHANICAL TECHNOLOGIES: Seeks Aug. 31 Plan Confirmation Extension MEDICAL SIMULATION: Gets OK to Hire SL Biggs as Accountant MERITAGE HOMES: S&P Ups ICR to 'BB+' on Strong 2020 Performance MIDTOWN CAMPUS: Plan Exclusivity Extended Until May 3 MKJC AUTO: Auction of Substantially All Assets Set for March 26 MKJC AUTO: World Imports Buying Assets for $2M, Subject to Overbid MOHEGAN TRIBAL GAMING: S&P Raises 'B-' ICR, Outlook Stable MOREAUX TRANSPORTATION: Seeks Approval to Hire Financial Advisor MTE HOLDINGS: Seeks to Extend Plan Exclusivity Until March 22 NANCY LOUISE HORTON: Winchester Property Sale Voluntarily Dismissed NAVIENT SOLUTIONS: Asks Court to Dismiss 'Unsupported' Ch.11 Filing NEOPHARMA INC: Trustee Hires Polsinelli PC as Legal Counsel NEOPHARMA INC: Trustee Hires Resurgence Financial as Accountant NEUROCARE CENTER: Cash Collateral Use Until Mar. 17 OK'd NEWELL BRANDS: S&P Alters Outlook to Stable, Affirms 'BB+' LTR NORTHERN HOLDINGS: Plan Exclusivity Extended Until June 25 NPC INT'L: Asks Court to Extend Plan Exclusivity Until June 26 ONE AVIATION: Committee Bid for Chapter 7 Approved ORANGE COUNTY BAIL: Global Says Projected Income Illusory ORANGE COUNTY BAIL: Subchapter V Trustee Awaits Plan Changes P&L DEVELOPMENT: Moody's Completes Review, Retains B3 CFR PALM BEACH: Creditors to Get Paid from Liquidation of Receivables PDC BEAUTY: Moody's Completes Review, Retains B3 CFR PERFORMANCE AIRCRAFT: Case Summary & 5 Unsecured Creditors PERFORMANCE FOOD: S&P Alters Outlook to Positive, Affirms 'B+' ICR PETCO HEALTH: S&P Assigns 'B' ICR on Proposed Refinancing PH BEAUTY III: Moody's Completes Review, Retains Caa1 CFR PHILADELPHIA AUTHORITY: S&P Lowers Long-Term ICR to 'CCC (sf)' PHUNWARE INC: Closes Offering of $24.7-Mil. Worth of Common Stock POINCIANA MANAGEMENT: Seeks Feb. 28 Plan Filing Extension PORTOFINO TOWERS: Wins April 25 Plan Exclusivity Extension POTENTIAL DYNAMIX: Amazon Limited Liability Clause Unenforceable PRESTIGE BRANDS: Moody's Completes Review, Retains B1 CFR PSW VENTURE: Case Summary & Unsecured Creditor REGIONAL PAVEMENT: Case Summary & 20 Largest Unsecured Creditors RENAISSANCE HOLDING: Moody's Affirms B3 CFR on Nearpod Acquisition RENAISSANCE HOLDING: S&P Affirms 'B-' ICR, Outlook Stable RENTPATH HOLDINGS: Signs Deal to Sell to Redfin for $608 Million REVLON CONSUMER: Moody's Completes Review, Retains Caa3 CFR REXNORD LLC: S&P Places 'BB' ICR on Watch Neg. on Planned Spin-Off REYNOLDS CONSUMER: Moody's Completes Review, Retains Ba1 CFR ROBERT F. TAMBONE: Hearing on $31K Sale of Boat Set for March 23 ROCKVILLE TAG: Seeks to Hire Richard B. Rosenblatt as Legal Counsel RODAN & FIELDS: Moody's Completes Review, Retains Caa2 CFR RTECH FABRICATIONS: Case Summary & 20 Largest Unsecured Creditors RUBY TUESDAY: Plan Approved After Deal With Landlords S&S HOLDINGS: Moody's Assigns First Time B3 Corp. Family Rating S&S HOLDINGS: S&P Assigns B- Issuer Credit Rating, Outlook Stable SANUWAVE HEALTH: Accounting Error Found in Form 10-Q Report SHREE MADHAV: Selling Laundry Business to Pennington for $325K SIMMONS FOODS: Moody's Affirms B2 CFR & Rates New $750M Notes B3 SIMMONS FOODS: S&P Rates Proposed $750MM Second-Lien Notes 'B' SINALOENCE FOOD: Seeks to Hire Michael Jay Berger as Counsel SOUND HOUSING: Case Summary & 18 Unsecured Creditors SOUTHLAND ROYALTY: $251.7M Sale to Wamsutter to Fund Plan SPANISH HEIGHTS: Seeks to Hire Maier Gutierrez as Special Counsel SPECTRUM BRANDS: Fitch Assigns BB Rating on $400MM Unsecured Notes SPECTRUM BRANDS: S&P Rates New $350MM Senior Sr. Term Loan 'BB-' SUPERIOR PLUS: S&P Affirms 'BB-' ICR, Outlook Stable TEEKAY CORP: S&P Alters Outlook to Negative, Affirms 'B+' ICR THG PROPERTIES: Owners to Contribute $100,000 to Plan TIDEWATER ESTATES: Seeks to Hire Re/Max as Real Estate Broker TOPP'S MECHANICAL: Gets OK to Hire Houghton Bradford as Counsel TOPPS COMPANY: Moody's Completes Review, Retains B2 CFR TRANSPINE INC: Has Until Feb. 25 to File Amended Plan & Disclosures TRI-STATE PAIN: March 25 Disclosure Statement Hearing Set TURNING POINT: Moody's Completes Review, Retains B2 CFR U.S.A. DAWGS: Mojave Substitution as Successor-In-Interest OK UBER TECHNOLOGIES: S&P Upgrades ICR to 'B', Outlook Stable US CONSTRUCTION: Case Summary & 5 Unsecured Creditors USA COMPRESSION: Moody's Completes Review, Retains B1 CFR UTS UNDERGROUND: Has Until March 19 to File Reorganization Plan VAMCO SHEET: Case Summary & 2 Unsecured Creditors VECTOR GROUP: Moody's Completes Review, Retains B2 CFR VERSANT HEALTH: Moody's Hikes CFR From B3 Amid MetLife Acquisition VICTORY CAPITAL: S&P Affirms 'BB-' ICR, Alters Outlook to Positive VILLAS OF WINDMILL: Objectors Say Trustee's Disclosures Ambiguous VISTA OUTDOOR: Moody's Hikes New 8-Yr. Unsecured Notes to B2 VISTA OUTDOOR: S&P Rates New $350MM Senior Unsecured Notes 'B+' VISTA OUTDOOR: S&P Stays 'B+' Rating on Senior Unsecured Notes VMWARE INC: Fitch Affirms 'BB+' LT IDR & Alters Outlook to Stable VOYAGER AVIATION: Moody's Cuts CFR to Caa1, Put on Further Review VOYAGER AVIATION: S&P Cuts ICR to 'CCC-' on Restructuring Plans WALKER RADIO: Gets OK to Hire Media Services Group as Broker WASHINGTON MUTUAL: Griffin Objection Overrule Affirmed by 3rd Cir. WASHINGTON PRIME: Fitch Lowers LongTerm IDR to 'C' WELDED CONSTRUCTION: Court Orders Production of 196 Documents WINDSTREAM HOLDINGS: Too Late to Revisit Vendor Pay, Court Rules WOODMONT 2017-2: S&P Assigns Prelim BB(sf) Rating on Cl. E-R Notes WORLD ACCEPTANCE: S&P Upgrades ICR to 'B', Outlook Stable YC ATLANTA: Seeks to Hire GGG Partners as Financial Advisor YC ATLANTA: Seeks to Hire Stone & Baxter as Legal Counsel YOUFIT HEALTH CLUBS: New CEO Vahaly Takes Helm ZAYO GROUP: S&P Affirms 'B' First-Lien Debt Rating on Loan Add-On ZEST ACQUISITION: S&P Affirms 'B' ICR, Outlook Negative ZOHAR FUNDS: Court OKs $1.1M Sale of Michigan Parcel [^] BOND PRICING: For the Week from February 15 to 19, 2021 ********* 1401 S. 22ND AVENUE: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: 1401 S. 22nd Avenue, LLC 7770 Ventura Street Colorado Springs, CO 80951 Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Colorado Case No.: 21-10802 Debtor's Counsel: David J. Warner, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwarner@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Aaron Avery, manager. The Debtor stated it has no unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/HU2DE4Y/1401_S_22nd_Avenue_LLC__cobke-21-10802__0001.0.pdf?mcid=tGE4TAMA 335 LAKE AVENUE: Black Buying Aspen Property for $9.375 Million --------------------------------------------------------------- 335 Lake Avenue, LLC, asks the U.S. Bankruptcy Court for the District of Colorado to authorize the sale of the real estate located at 335 Lake Avenue, in Aspen, Colorado, to Steven Black for $9.375 million. Pre-petition, on Feb. 12, 2016, the Debtor and Lake Avenue Land, LLC entered into an Agreement to Buy and Sell Real Estate, and subsequently amended the Purchase Agreement and/or the Lease on March 31, 2016, April 28, 2016, May 5, 2016, May 5, 2016, May 7, 2016, March 25, 2019, and Dec. 31, 2019. The Seventh Amendment, entered into on Dec. 31, 2019, assigned the Purchase Agreement from Lake Avenue Land, LLC to Mr. Black, individually. The Purchase Agreement is to sell the Property. On May 15, 2020, Mr. Black filed Adversary Proceeding No. 20-1145-JGR seeking declaratory judgment and specific performance. The Debtor filed its Answer to Mr. Black's Adversary Complaint on July 16, 2020, and on Oct. 30, 2020, filed a Motion to Amend the Answer and Add a Counterclaim. On Sept. 25, 2020, the Debtor filed its Motion to Assume An Unexpired Lease and Executory Contract to assume the Lease and Purchase Agreement. Mr. Black filed his Response In Opposition to Motion to Assume Unexpired Lease and Executory Contract on Oct. 9, 2020. The Debtor's Motion to Assume An Unexpired Lease and Executory Contract and Mr. Black objection thereto is a contested matter currently scheduled for an evidentiary hearing on March 3 and 4, 2021. The Debtor and Mr. Black have entered into a Settlement Agreement which is subject to Court approval of both the Debtor's Motion to Approve Settlement Between the Debtor-In-Possession and Steven Black and the 363 Motion. Under the Settlement Agreement, the Debtor and Mr. Black agree that (1) the Debtor would file the Motion pursuant to Section 363 to sell the subject property to Mr. Black for the total purchase price of $9.375 million, including Mr. Black's previous deposit of $925,000, and (2) following the Closing on the subject property Mr. Black would dismiss with prejudice Adversary Proceeding No. 20-1145-JGR. The U.S. Bank National Association (successor to Bank of America, N.A., successor by merger to LaSalle Bank N.A.), as Trustee, on behalf of the holders of the Thornburg Mortgage Securities Trust 2007-5 Mortgage Loan Pass-Through Certificates, Series 2007-5 filed Proof of Claim 1-1 in the amount of $7,305,478.05, representing a disputed lien against the property in the principal amount of $5,080,497.18. The Debtor asks Court approval to sell the Property to Mr. Black, under the terms of Settlement Agreement, free and clear of any interest in the Property, given that the sale price is greater than the U.S. Bank's lien against the Property, with U.S. Bank's lien attaching to the proceeds of the sale. The Debtor further asks Court approval, in full compliance with Section 345, to place all net proceeds from the sale into an interest-bearing account for the benefit of U.S. Bank, which may not be drawn upon without further order of the Court, except the Debtor will be permitted to withdraw all interest and capital gains earned on the account. The Agreement between the Debtor and Mr. Black however, is not conditioned on any further orders of the Court affecting the escrowing of funds or the Debtor's ability, if granted, to withdraw any accrued interest and capital gains. The account balance of the proceeds will be distributed pursuant to a court order, upon entry of a final, non-appealable order resolving the disputes between the Debtor and U.S. Bank. About 335 Lake Avenue 335 Lake Avenue, LLC is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). On April 1, 2020, 335 Lake Avenue filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-12378). James K. Daggs, Debtor's manager, signed the petition. At the time of the filing, Debtor disclosed total assets of $10 million to $50 million. Judge Joseph G. Rosania Jr. oversees the case. Debtor has tapped Weinman & Associates, P.C. as its bankruptcy counsel and Allen Vellone Wolf Helfrich & Factor, P.C. and Klein Cote Edwards Citron, LLC as its special counsel. 511 GROUP: Court Extends Plan Exclusivity Thru April 25 ------------------------------------------------------- At the behest of the Debtor 511 Group LLC, Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida extended the period in which the Debtor may file and solicit acceptances of a chapter 11 plan through and including April 25, 2021, and June 24, 2021, respectively. The Debtor's case was filed before the Court on February 3, 2021, at 2:00 P.M, and the Court considered the arguments of counsel and the U.S. Trustee, and the Debtor now filed the delinquent Monthly Operating Reports as a condition of the entry of this Order. A copy of the Court's Extension Order is available from PacerMonitor.com at https://bit.ly/3sa9Wsl at no extra charge. About 511 Group LLC 511 Group LLC, a Miami Beach, Fla.-based limited liability company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-21098) on October 12, 2020. In its petition, the Debtor estimated both assets and liabilities to be between $100,001 and $500,000. Judge A. Jay Cristol presides over the case. Joel M. Aresty P.A. is the Debtor's legal counsel. 84 LUMBER: S&P Hikes Issuer Credit Rating to 'BB-', Outlook Stable ------------------------------------------------------------------ S&P Global Ratings raised its ratings on 84 Lumber Co. to 'BB-' from 'B+'. At the same time, S&P assigned its 'BB-' rating on the company's proposed $607 million term loan B-1 due 2026. The recovery rating on the term loan is '3', reflecting its expectation for meaningful recovery (50%-70% range; rounded estimate: 60%) in a payment default. S&P said, "The stable outlook reflects our view that 84 Lumber will continue to benefit from U.S. residential construction growth such that leverage will remain below 3x with EBITDA margins above 5% over the next 12 months, even if lumber prices moderate. "We expect increased demand for residential construction in 2021, which is a key end market for 84 Lumber. 84 Lumber generates about 75%-80% of its revenues from residential construction, which is benefiting from significant growth, especially for single-family dwellings. In 2020, we expect revenues to grow 20%-25% bolstered by higher housing starts and commodity price inflation. S&P Global Ratings forecasts residential construction demand will increase another 5.5% in 2021, supported by higher millennial household formation and low-interest rates." This, along with additional store openings in high-growth areas, should result in 5%-6% revenue growth for 84 Lumber in 2021. Debt leverage likely to remain below 3x over the next 12 months, even if lumber prices moderate. S&P said, "We expect 84 Lumber's leverage to remain below 3x over the next 12 months, primarily due to earnings growth over debt reduction. We expect the company's earnings to benefit from anticipated housing starts of 1.36 million in 2021 and a favorable product mix due to its continued focus on selling more value-added products such as installations that only use its products, as well as custom orders that garner higher margins. 84 Lumber has also worked to streamline expenses through cost-management initiatives and enhanced pricing. As a result of these initiatives as well as volume growth, we expect earnings grew about 40%-42% in 2020 and expect another 8%-9% growth in 2021 even if lumber prices decline. Lumber prices spiked significantly in 2020 because of rising demand from higher residential construction, and increased repair and remodel spending from homeowners coupled with tighter supply due to COVID-related shutdowns, as well has higher import taxes on Canadian lumber. Of 84 Lumber's 14.2% revenue growth in the first nine months of 2020, 9.5% of the increase was due to higher commodity prices, especially for lumber. However, as supply-side issues are resolved we would expect EBITDA margins to improve even as revenues fall, offsetting some of the effect on earnings." S&P said, "We expect 84 Lumber to generate positive free operating cash flow (FOCF) to debt over the next 12 months, and direct the majority of FOCF toward distributions. With low maintenance capital expenditures of less than 1% of annual sales coupled with increasing earnings, 84 Lumber consistently generates positive FOCF. The company is in the process of a growth phase with plans to add six to 10 stores annually, resulting in capital spending of $60 million-$70 million in 2021. However, we forecast 84 Lumber will continue to generate positive free cash flow to debt of above 10% in 2021. 84 Lumber makes distributions to its partners guided by various leverage hurdles. Given lower leverage expectations over the forecast, we anticipate higher distributions with about 40%-45% of it for tax purposes. Despite the higher expected distributions, we expect the company to maintain relatively prudent financial policies targeting leverage below 3x. "The stable outlook reflects our view that 84 Lumber will continue to benefit from U.S. residential construction growth such that leverage will remain below 3x with EBITDA margins above 5% over the next 12 months. "We could lower our ratings on 84 Lumber if the surge in residential construction stalls compared to our expectations of 5.5% growth or the company's own growth initiatives result in higher expenses or require a higher level of investment than we anticipate. We could also lower the rating if higher commodity prices depressed margins or increased working capital requirements reducing FOCF." Specifically, these scenarios would be consistent with the following: -- An expectation of debt to EBITDA above 3x; or -- EBITDA margins below 5%. S&P views an upgrade as unlikely over the next 12 months given the inherent cyclicality and earnings volatility in 84 Lumber's end markets. However, it could raise its ratings on 84 Lumber over the next 12 months if the company reduced earnings volatility while maintaining debt to EBITDA below 2x and EBITDA margins improved toward the 8% area, which is more in line with rated peers. This could occur if: -- The company reduced earnings volatility either by expanding into more stable end markets such as repair and remodel or by expanding its product offering into significantly higher-margin products. -- 84 Lumber directed its free cash flows toward debt reduction. AAR CORP: S&P Alters Outlook to Stable, Affirms 'BB' ICR -------------------------------------------------------- S&P Global Ratings revised its outlook on AAR Corp. to stable from negative and affirmed its 'BB' issuer credit rating. S&P said, "The stable outlook reflects our expectation that the company's credit metrics will remain appropriate for the current rating supported by its improved margins and good free cash flow generation. "AAR's credit metrics will likely improve and exceed our previously forecast levels in fiscal year 2021 (ending May 31, 2021). While the demand for the company's maintenance, repair, and overhaul (MRO) services and spare parts (about 63% of 2020 revenue) declined significantly over the last year due to the effects of the pandemic on global air travel, it hasn't fallen by as much as we previously expected. In addition, the demand for AAR's defense work remains stable. We expect the company's adjusted EBITDA margins to recover to the 8%-9% range in 2021, from 6.1% in fiscal 2020, due to management's cost-cutting actions, lower restructuring charges, and benefits from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. We now expect funds from operations (FFO) to debt of about 30%, debt to EBITDA of 2.4x-2.8x, and free operating cash flow (FOCF) to debt in the mid-20% area in 2021. This compares with our previous expectations for FFO to debt of less than 20%, debt to EBITDA exceeding 5x, and FOCF to debt of 15%-20%." While there is still some uncertainty around the recovery in the demand for commercial aircraft parts and MRO services, the stable outlook on AAR reflects that its credit metrics have improved and now have some cushion at the current rating. Specifically, S&P expects it to have FFO to debt of about 30%, debt to EBITDA of 2.4x-2.8x, and FOCF to debt in the mid-20% area in fiscal year 2021. S&P could lower its rating on AAR in the next 12 months if its debt to EBITDA remains above 4x and its FFO to debt falls below 20% and it expects them to remain at these levels in fiscal year 2022. This could occur if: -- The volume of commercial air travel does not improve due to the coronavirus pandemic; -- The company's cash flow weakens materially; or -- It pursues a more aggressive financial policy. Although unlikely in the next 12 months, S&P could raise its rating on AAR if its FFO to debt improves above 35% and its FOCF to debt exceeds 20% and S&P expects its metrics to remain at these levels. This would likely occur due to: -- A quicker-than-expected recovery in its demand; -- Continued strong free cash flow generation; and -- The company's financial policy remains fairly conservative. AJRANC INSURANCE: Has Cash Collateral Access Until March 22 ----------------------------------------------------------- Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized AJRANC Insurance Agency, Inc. and its affiliated Debtor R.A. Borruso, Inc. to use cash collateral on an interim basis, pending further hearing to be conducted by the Court on March 22, 2021 at 3 p.m. Judge Delano authorized the Debtors to use Cash Collateral including, without limitation, cash, deposit accounts, accounts receivable, and proceeds from their business operations in accordance with the approved budget, as long as the aggregate of all expenses for each week do not exceed the amount in the Budget by more than ten percent for any such week on a cumulative basis. The Debtors, however, were not authorized to pay a car allowance to Anthony Borruso. "As adequate protection with respect to the Lenders' interests in the Cash Collateral, the Lenders are granted a replacement lien in and upon all of the categories and types of collateral in which they held a security interest and lien as of the Petition Date to the same extent, validity and priority that they held as of the Petition Date," Judge Delano held. The Debtors were directed to maintain insurance coverage for the Collateral in accordance with the obligations under the loan and security documents. About AJRANC Insurance Agency AJRANC Insurance Agency, Inc., based in Lutz, Fla., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-06493) on August 27, 2020. In the petition signed by Anthony L. Borruso, president, the Debtor disclosed $1,869,283 in assets and $1,920,494 in liabilities. STICHTER RIEDEL BLAIN & POSTLER, P.A., serves as bankruptcy counsel to the Debtor. ALEXANDER D. LEE: Selling 2010 Lexus LX 570 to CarMax for $30K -------------------------------------------------------------- Alexander Dong Lee asks the U.S. Bankruptcy Court for the Southern District of Florida to authorize the sale of his 2010 Lexus LX 570, a four-door sport utility vehicle, VIN JTJHY7AX3A4049958, to CarMax for $30,000, subject to better and higher offers. The Debtor owns the Vehicle, which he has scheduled as having a value of $24,530. It is located in Breckenridge, Colorado, where it was used by the Debtor as part of his ownership of three condominiums which are being sold. The Debtor asks approval and authorization from the Court to sell the Vehicle to the Buyer for $30,000. He asks approval to pay any necessary and customary closing costs in connection with the sale. The proposed sale prices remain subject to better and higher offers and Court approval. CarMax is a third party, unrelated entity. All negotiations were at arms'-length. The Vehicle is unencumbered. Subject to the terms and conditions of the set forth in the Motion, the Debtor in the sound exercise of his business judgment has concluded that consummation of the sale of the Vehicle to CarMax will best maximize the value of the estate for the benefit of creditors. The Vehicle is no longer used or useful to him. He respectfully asserts that ample business justification exists for the sale. A copy of the Offer is available at https://tinyurl.com/zcwslx4t from PacerMonitor.com free of charge. Alexander Dong Lee sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-21594) on Oct. 23, 2020. The Debtor tapped Robert Furr, Esq., as counsel. ALGY TRIMMINGS: Seeks to Hire Dannelly Monteleone as Accountant --------------------------------------------------------------- Algy Trimmings Co., Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Dannelly Monteleone & Associates, LLC as its accountant. The firm's services include the preparation of tax returns and accounting advice on tax-related issues. The firm will charge a flat fee of 3,000 for its services or $200 per hour for accountants and $100 per hour for staff, whichever is lower. Dannelly Monteleone is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Ray Monteleone, CPA Dannelly Monteleone & Associates, LLC 612 se 5 TH Avenue #6 Fort Lauderdale, FL 33301 Phone: +1 954-973-0040 Fax: (954) 252-2370 About Algy Trimmings Co. Inc. 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. Algy Trimmings filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-23791) on Dec. 18, 2020. Algy Trimmings President Susan Gordon signed the petition. At the time of the filing, the Debtor disclosed $382,483 in assets and $2,494,623 in liabilities. The Debtor tapped Gamberg & Abrams as its legal counsel and Dannelly Monteleone & Associates, LLC as its accountant. ALL IN JETS: Auction of Substantially All Assets Set for March 4 ---------------------------------------------------------------- Judge Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York authorized the bid procedures proposed by All In Jets, LLC, doing business as Jet Ready, relating to the sale of substantially all assets outside the ordinary course of business, to Aviate Jet Group, LLC for $600,000, cash, subject to higher and better offers. Hearings on the Motion were held on Jan. 27, 2021, Feb. 4, 2021, and Feb. 12, 2021. The following dates and deadlines will constitute the Schedule in the Case: a. Overbid Deadline: March 2, 2021, at 5:00 p.m. (EST) b. Notification of Qualified Bidders: March 3, 2021, at 5:00 p.m. (EST) c. Auction: March 4, 2021, at 10:00 a.m. (EST) is the date when the Debtor will conduct an auction via Zoom with the Stalking Horse Bidder and any Qualified Bidders. On March 8, 2021 at 12:00 Noon, the Debtor will file with the Court a Notice of Winning Bid. It will file a report with the Court certifying the results of the auction on March 8, 2021 and, if any bidder was not qualified, the reasons for the non-qualification. Further, the Debtor will advise all non-qualified bidders that each may appear and be heard at the Sale Hearing. d. Deadline to Object to Sale: March 11, 2021, at 12:00 p.m. (EST) e. Sale Hearing: March 17, 2021, at 10:00 a.m. (EST). The Debtor at the Sale Hearing will also ask a waiver of the Rule 6004(h) stay. The Bid Protections are approved on the terms set forth in the Sale and Bidding Procedures as an exercise of their business judgment, without further notice to parties in interest, or action or order by the Court. Notwithstanding the requirements of section 363(k) of the Bankruptcy Code, no credit bidding will be permitted as part of the Sale and Bidding Procedures. The Sale Notice is approved and will be served on all creditors, parties in interest and published in the appropriate trade journals, including without limitation Aviation International News ("AIN") with a request that it be included in the "AIN Alerts," at least 10 days before the Bid Deadline. The Debtor will file an affidavit describing the method of such publication prior to the Sale Hearing. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of the Order are immediately effective and enforceable upon its entry. The salient terms of the bid procedures: a. Deposit: $50,000 b. Bid Increments: 10,000 The sale will include a transfer free and clear of all liens, claims, interests and encumbrances, including those alleged interests asserted by Caliber Jet Charter, LLC and all proceeds of sale will be held by the Debtor or as directed by the Court until a further order approving disposition of proceeds is entered. A copy of the Bidding Procedures is available at https://tinyurl.com/21zt3y1y from PacerMonitor.com free of charge. About All In Jets All In Jets, LLC -- https://www.flyjetready.com/ -- is a private jet charter operator and aircraft management company offering flights worldwide with a floating charter fleet of heavy to midsize jets including Gulfstream GIVSPs, Gulfstream GIVs, Challenger 601s and Hawker 800 models. All In Jets, LLC d/b/a Jet Ready, based in New York, NY, filed a Chapter 11 petition (Bankr. S.D. N.Y. Case No. 20-11831) on Aug. 9, 2020. In the petition signed by Seth Bernstein, member, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Michael E. Wiles presides over the case. CIARDI CIARDI & ASTIN, serves as bankruptcy counsel. ALLIED INJURY: Anguizolas Get 70% of Net Proceeds of Collections ---------------------------------------------------------------- David M. Goodrich, the duly appointed and acting Chapter 11 trustee, for debtor Allied Injury Management, Inc., filed a Chapter 11 Plan of Liquidation and an explanatory Disclosure Statement. The Plan is a liquidation plan that contemplates, among other things, that the Trustee will distribute the funds on hand to creditors and interest holders in accordance with the priorities set forth in the Bankruptcy Code. The Plan also provides for the transfer of the remaining assets of the Debtor to a Liquidating Trust, over which the Trustee will become the Liquidating Trustee. After the assets are transferred to the Liquidating Trust, the Liquidating Trustee will distribute the funds realized by the Liquidating Trust in accordance with the Plan. The Plan was the product of a settlement between the Trustee, the Debtor, the Debtor's largest unsecured creditor, and its only secured creditor. The Effective Date of the Plan will be the date that is three weeks after entry of the Confirmation Order, provided there has been no order staying the effectiveness of the Confirmation Order. Allied's principal assets are its MSA's and receivables owed to it by certain client medical providers. Some of Allied's receivables are disputed. The Debtor previously represented that the face value of the medical receivables that Allied was collecting under its various MSA's exceeded $100 million, of which Allied stands to earn about 40% upon collection. The current face value of the Medical Receivables is currently approximately $36 million, but as the efforts to collect the receivables over the past few years has proven, the actual value of these receivables is unknown but clearly significantly less than the face value. On or about August 24, 2020, the Trustee, the Anguizola Entities, Larson, and Cambridge participated in a mediation, with David Guess serving as the mediator. Pursuant to that mediation, a settlement was reached that resolved among other things, all adversary proceedings and contested matters between Anguizola, the Estate, and Cambridge. The resolution provides the framework for the Plan. Class 1 consists of the claim of Cambridge Medical Funding Group II, LLC ("CMFG"). Claimant will receive 60% of proceeds of collections of OSM and OS Therapy until paid in full, with 40% being retained by the Liquidating Trust to cover costs associated with collecting receivables and administering the Liquidating Trust. In the event that CMFG is paid $725,000 by no later than March 15, 2021, the claim shall be deemed paid in full and CMFG. The Liquidating Trustee shall pay CMFG as funds become available from the collection of the OSM and OS Therapy receivables, but shall not be required to make a distribution more often than every 90 days, or if there is less than $5,000 to distribute to CMFG. Class 2 consists of All General Unsecured Creditors with Allowed Claims except, Dr. Larson, or any of his Affiliates, Dr. Anguizola, OSM, OS Therapy, or NorCal. Class 2 Creditors shall receive a Pro-Rata distribution of the Net Proceeds of Collections from the Liquidating Trust with respect to OSM and OST collections. Class 2 shall receive a Pro-Rata distribution of the Net Proceeds of Collections from the Liquidating Trust with respect to collections from NorCal and other non-Anguizola related providers. Payments shall be made by the Liquidating Trust not more often than every 90 days, and only to the extent the Liquidating Trust has at least $10,000 to distribute. Payments will continue until creditors in this Class are paid in full, without interest. Class 3 consists of the Allowed General Unsecured Claims of Anguizola, OSM, OS Therapy, and NorCal (Anguizola Entities). The Anguizola Entities will receive 70% of the Net Proceeds of Collections with respect to OSM and OST collections. The Anguizola Entities will receive 70% of the Net Proceeds of Collections. Payments shall be made by the Liquidating Trust not more often than every 90 days, and only to the extent the Liquidating Trust has at least $10,000 to distribute. Payments shall continue until creditors in this Class are paid in full, without interest. Class 4 Interest Holder Dr. John Larson shall retain his ownership Interest in the Debtor. Larson will receive 30% of the Net Proceeds of Collections with respect to OSM and OST collections. Larson will receive 30% of the Net Proceeds of Collections with respect to NorCal Collections. Larson will receive 100% of the Net Proceeds of Collections with respect to all collections of non-Anguizola related providers. Payments shall be made by the Liquidating Trust not more often than every 90 days, and only to the extent the Liquidating Trust has at least $10,000 to distribute. Payments shall continue until creditors in this Class are paid in full, without interest. Neither Larson nor any of his affiliates will receive any distribution on account of scheduled or filed Claims. All Distributions to the Holders of Allowed Claims shall be from the Liquidating Trust. The Liquidating Trustee shall liquidate all Assets of the Debtors and the Estate and distribute the Net Proceeds of such liquidation from the Liquidating Trust in accordance with this Plan and the Liquidating Trust Agreement. A full-text copy of Trustee's Disclosure Statement dated Feb. 16, 2021, is available at https://bit.ly/3pBYkwz, from PacerMonitor.com at no charge. Attorneys for David M. Goodrich: Mark S. Horoupian SulmeyerKupetz A Professional Corporation 333 South Grand Avenue, Suite 3400 Los Angeles, California 90071 Telephone: 213.626.2311 Facsimile: 213.629.4520 E-mail: mhoroupian@sulmeyerlaw.com About Allied Injury Headquartered in San Bernardino, California, Allied Injury Management, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 16-14273) on May 11, 2016, estimating assets between $10 million and $50 million and debts between $1 million and $10 million. The petition was signed by John R. Larson, M.D., president. Judge Mark D. Houle presides over the case. Alan W Forsley, Esq., and Marc Liberman, Esq., at Fredman Lieberman Pearl LLP, serve as the Debtor's bankruptcy counsel. The Debtor hired Michael Blue, Esq., at the Blue Law Group, Inc., as special litigation counsel and Grobstein Teeple LLP as accountant. The U.S. Trustee sought and obtained the Court's approval of the appointment of David M. Goodrich as Chapter 11 Trustee. The Chapter 11 trustee retains Mark S. Horoupian at the law firm of SulmeyerKupetz as his general bankruptcy counsel. ALPHABET HOLDING: Moody's Completes Review, Retains B3 CFR ---------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Alphabet Holding Company, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Alphabet Holding Company, Inc.'s (doing business as Nature's Bounty) B3 Corporate Family Rating reflects a portfolio of well-known brands, good channel diversification, diversified customer base, and high industry growth potential that reflects increased health awareness and aging populations. The ratings are challenged by high financial leverage, moderate scale when compared to other corporate issuers within the same industry, a geographic diversity that is skewed towards developed markets, and an operating environment that is expected to remain challenging. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. AMERICAN CRYOSTEM: Incurs $46K Net Loss for Quarter Ended Dec. 31 ----------------------------------------------------------------- American CryoStem Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $46,034 on $126,600 of total revenues for the three months ended Dec. 31, 2020, compared to a net loss of $271,860 on $133,126 of total revenues for the three months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $1.59 million in total assets, $1.95 million in total liabilities, and a total shareholders' deficit of $359,733. The Company has incurred significant losses since its inception which raises substantial doubt about the Company's ability to continue as a going concern. Management has made this assessment for the period one year from Feb. 16, 2021. Management's plans with regard to this matter are to continue to fund its operations through fundraising activities in fiscal 2021 for future operations and business expansion. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1468679/000101905621000132/acryo_1q21.htm About American CryoStem Eatontown, New Jersey-based American CryoStem Corporation (OTC: CRYO) -- http://www.americancryostem.com-- is a developer, marketer and global licensor of patented adipose tissue-based cellular technologies and related proprietary services with a focus on processing, commercial bio-banking and application development for adipose (fat) tissue and autologous adipose-derived regenerative cells (ADRCs). American CryoStem reported a net loss of $1.18 million for the year ended Sept. 30, 2020, compared to a net loss of $1.08 million for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $1.47 million in total assets, $1.90 million in total liabilities, and a total shareholders' deficit of $421,199. Fruci & Associates II, PLLC, in Spokane, Washington, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Jan. 4, 2021, citing that the Company has incurred significant net losses since inception. This factor raises substantial doubt about the Company's ability to continue as a going concern. AMERICAN GREETINGS: Moody's Completes Review, Retains B2 CFR ------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of American Greetings Corporation and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations American Greetings Corporation's credit profile (B2 CFR) broadly reflects its solid position in the US and UK greeting card markets, where the company is one of two leading players, and our expectation the company will remain vigilant with respect to controlling expenses. The company has long-standing relationships with many of its retail customers, supported by the highly profitable nature of greeting cards and its long operating history of over 100 years. American Greetings' benefits from the relatively stable demand for its products, primarily driven by everyday life events and holidays, and its adequate liquidity is supported by its $250 million revolver due in 2023 which provides financial flexibility to fund working capital seasonality. American Greetings' credit profile also reflects its elevated financial leverage, excluding the relatively high dividend preferred equity, risks inherent in the mature and highly competitive greeting card industry, and the company's high customer concentration. The company's revenue has been pressured by net customer losses and sluggish retail traffic both in the US and UK markets, somewhat offset by new contract wins. However, a prolonged coronavirus outbreak will negatively impact demand, because social gatherings will be constrained, somewhat mitigated by its strong presence in the grocery channel. Governance factors include the company's aggressive financial policies under private equity ownership. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. AMERICANN INC: Incurs $502,284 Net Loss for Quarter Ended Dec. 31 ----------------------------------------------------------------- Americann, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $502,284 on $271,585 of total revenues for the three months ended Dec. 31, 2020, compared to net income of $1.02 million on $34,691 of total revenues for the three months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $15.01 million in total assets, $9.64 million in total liabilities, and $5.37 million in total stockholders' equity. The Company had an accumulated deficit of $19,224,836 and $18,722,552 at Dec. 31, 2020 and Sept. 30, 2020, respectively, and had a net loss for the three months ended Dec. 31, 2020. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. The Company said that while it is attempting to increase operations and generate additional revenues, its cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company said its ability to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1508348/000143774921002979/acan20201231_10q.htm About Americann Headquartered in Denver, AmeriCann is a specialized cannabis company that is developing cultivation, processing and manufacturing facilities. Americann reported a net loss of $709,343 for the year ended Sept. 30, 2020, compared to a net loss of $4.90 million for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $14.87 million in total assets, $8.99 million in total liabilities, and $5.87 million in total stockholders' equity. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Dec. 21, 2020, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. AMERICANN INC: JV Partner Opens Retail Cannabis Dispensary ---------------------------------------------------------- AmeriCann's Joint Venture partner, Bask, Inc. announced that it plans to open its adult-use retail cannabis dispensary. AmeriCann has a 15-year Joint-Venture partnership with Bask that provides AmeriCann with a 15 percent Revenue Participation Fee on all Bask revenue generated from sales from AmeriCann's Massachusetts Cannabis Center. The commencement of Adult-Use sales may increase Bask's revenue by 3-5 times which would positively impact AmeriCann's Revenue Participation Fee. Building 1, the initial phase of the MCC, is a 30,000 square foot state-of-the-art cultivation and processing facility, 100% of which is occupied by Bask. In February of 2020, Bask commenced medical cannabis operations at the MCC. The adult-use retail dispensary will operate out of Building 1. The MCC, a planned one million square foot sustainable greenhouse, processing and product manufacturing project in Freetown, Massachusetts, is being developed by AmeriCann. The Massachusetts cannabis market has some of the highest prices in the United States, with wholesale prices exceeding $4,000 per pound and retail prices greater than $7,000 per pound. Adult use cannabis sales in Massachusetts exceeded $1 billion last November since the beginning of the program in 2018. About Americann Headquartered in Denver, Colorado, AmeriCann is a specialized cannabis company that is developing cultivation, processing and manufacturing facilities. Americann reported a net loss of $709,343 for the year ended Sept. 30, 2020, compared to a net loss of $4.90 million for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $14.87 million in total assets, $8.99 million in total liabilities, and $5.87 million in total stockholders' equity. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Dec. 21, 2020, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. ANASTASIA PARENT: Moody's Completes Review, Retains Caa3 CFR ------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Anastasia Parent, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Anastasia's Caa3 Corporate Family Rating reflects its high financial leverage. The company's credit profile also reflects weak operating performance with meaningful sales and earnings declines elevating risk of a debt restructuring. The company's relatively small scale compared to much larger cosmetic competitors, and narrow focus in prestige color cosmetics leaves Anastasia highly exposed to fashion risk when consumer preferences shift away from the company's products. Larger competitors have greater scale, possess more product and geographic diversity, and have greater investment capacity through a range of economic cycles. Anastasia has high specialty retail concentration at Sephora and Ulta given that a significant amount of its revenues are generated from those channels. The company has limited geographic diversity with a significant amount of sales generated in the U.S. Anastasia's credit profile is supported by the company's good brand name recognition in niche markets and product development capabilities. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. APEX PARKS GROUP: Converts Case to Chapter 7 Liquidation -------------------------------------------------------- Daniel Gill of Bloomberg Law reports that Apex Parks converted its Chapter 11 bankruptcy case to Chapter 7 after the water and amusement park operator said it had no assets left and lacks the resources to confirm a liquidation plan. The conversion, ordered Wednesday, February 17, 2021, means a trustee, appointed by the U.S. Trustee, will wrap up the case. It follows a June 2020 asset sale to an entity controlled by a group of secured lenders led by Cerberus Business Finance LLC. The entity, APX Operating Co., bought the assets for $45 million in debt forgiveness and an agreement to pay off in cash Apex's $11.5 million post-bankruptcy loan. About TZEW Holdco and Apex Parks Group TZEW Holdco, LLC, and its affiliates are privately-held owners and operators of amusement parks, resorts, and family entertainment centers across the United States. Founded in 2014, the companies' business strategy focuses on the acquisition, operation, growth, and development of various properties into economical, family-friendly entertainment and amusement venues. The companies locations include year-round family entertainment centers, water parks, and amusement parks in states across the country, including California, Texas and Florida. Each of the companies' locations provides affordable, family-friendly entertainment to local markets and features numerous attractions, including rides, games, and events. On the Web: http://www.apexparksgroup.com/ Big Kahuna's Water and Adventure Park is a water park located in Destin, Florida, which opened in 1986. It is primarily a water park, with more than 40 water attractions like lazy river, water slides, and wave pool. It also has a miniature golf and kids play areas. TZEW Holdco and its affiliates, including Apex Parks Group LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10910) on April 8, 2020. At the time of the filing, the Debtors had estimated assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. The Debtors tapped Pachulski Stang Ziehl & Jones, LLP as legal counsel; Imperial Capital, LLC, as investment banker and financial advisor; Paladin Management Group, LLC, as restructuring advisor; and Kurtzman Carson, LLC as claims and noticing agent. ART VAN FURNITURE: Heirs Buy Back Legal Rights to Name ------------------------------------------------------ Crains (Detroit) reports that the heirs of Archie Van Elslander have bought back legal rights to the Art Van Furniture name, four years after the family patriarch sold the furniture company to a private-equity firm and nearly a year since the company went bankrupt and began closing all of its nearly 200 stores. Gary Van Elslander, son of the company's late founder and acting through a family investment company called VEC, successfully bid $6 million for the naming rights. The sale was approved Feb. 1 by a bankruptcy court judge overseeing Art Van Furniture's still-ongoing liquidation case. A VEC representative declined to give an interview about the family's future plans — if any — for use of the Art Van Furniture brand, but issued a statement: "The Art Van Furniture name was part of the Van Elslander family for decades, from the time Art Van Elslander founded the company in 1959 until he sold it in 2017. The Van Elslander family felt it was important to reclaim the name that was, for so long, synonymous with tremendous value and commitment to Michigan's communities. They look forward to having the Art Van Furniture name back in the family, where it belongs." The last remaining Art Van Furniture stores closed last year with everything-must-go sales that were put on by American Signature, the parent company of Value City Furniture. Many of the old Art Van stores were later reborn in late summer and early fall as Loves Furniture, an entirely new company created by a Texas private-equity firm. But Loves encountered a slew of setbacks, including expensive warehouse and logistical problems, and filed for Chapter 11 bankruptcy Jan. 6, 2021. Gary and David Van Elslander wave to the crowd during the 91st America's Thanksgiving Parade, presented by Art Van on Woodward Avenue in Detroit on Thursday, Nov. 23, 2017. Gary Van Elslander, who is president of VEC, early on bid $2.1 million for the Art Van Furniture naming rights. Then American Signature put in a $2.2 million bid on Jan. 20. VEC countered and ultimately won the auction with its $6 million offer. Gary Van Elslander didn't say in court documents what his plans are for the Art Van Furniture name. However, he did state that as part of the naming rights purchase, his family is released from any past non-compete and non-solicitation agreements. Warren-based Art Van Furniture sold itself in early 2017 to Boston-based private equity firm Thomas H. Lee Partners in a $612.5 million deal that included the sale of Art Van stores' real estate to new landlords, who began to charge the stores rent. Art Van Eslander died a year later at age 87. About Art Van Furniture Art Van is a brick-and-mortar furniture and mattress retailer headquartered in Warren, Michigan. The Company operates 169 locations, including 92 furniture and mattress showrooms and 77 freestanding mattress and specialty locations. The Company does business under brand names, including Art Van Furniture, Pure Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress, and Wolf Furniture. The Company was founded in 1959 and was owned by its founder, Art Van Elslander, until it was sold to funds affiliated with Thomas H. Lee Partners, L.P. in March 2017. As part of this transaction, THL acquired the operating assets of the Company and certain real estate investment trusts, who closed the transaction alongside THL, acquired the owned real estate portfolio of the Company, and entered into long-term leases with Art Van. The proceeds from the sale-leaseback transaction were used to fund the purchase price paid to the selling shareholders. Art Van Furniture, LLC, and 12 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8, 2020. Art Van was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as counsel. Kurtzman Carson Consultants LLC is the claims agent. ASP EMERALD: S&P Places 'B' Issuer Credit Rating on Watch Pos. -------------------------------------------------------------- S&P Global Ratings placed all of its ratings on ASP Emerald Holdings LLC, including its 'B' issuer credit rating, on CreditWatch with positive implications. The CreditWatch placement follows LANXESS' announcement that it has signed a definitive agreement to acquire Emerald for about $1.08 billion. S&P said, "We expect the transaction to close in the next few months. We will likely raise our issuer credit rating on Emerald to match our issuer credit rating on LANXESS and then withdraw all of our ratings on Emerald assuming its debt is fully repaid upon the close of the transaction." S&P said, "We expect to resolve the CreditWatch following the completion of the transaction. We will monitor any developments related to the transaction, including the receipt of the necessary shareholder approvals and regulatory clearances. We expect that the transaction will be credit positive for Emerald given our stronger investment-grade rating on LANXESS and its much larger scale. If the transaction is completed as proposed, we will likely raise our issuer credit rating on Emerald to equalize it with our 'BBB' rating on LANXESS. We will then withdraw all of our ratings on Emerald after the transaction closes and LANXESS pays down all of its debt. "If the transaction is not consummated, we will likely affirm our 'B' issuer credit rating on the company, remove the rating from CreditWatch, and assign a stable outlook assuming its operating performance and credit measures remain in our expected range for the current rating." ASTROTECH CORP: Closes $9.25M Registered Direct Offering -------------------------------------------------------- Astrotech Corporation has closed its previously announced registered direct offering priced at-the-market under Nasdaq rules of 2,845,535 shares of its common stock at an offering price of $3.25 per share for aggregate gross proceeds of approximately $9.25 million. The Company intends to use the net proceeds from this offering for continuing operating expenses and working capital. H.C. Wainwright & Co. acted as the exclusive placement agent for the offering. The shares of common stock were offered by Astrotech pursuant to a "shelf" registration statement on Form S-3 (File No. 333-226060) previously filed with the Securities and Exchange Commission on July 3, 2018 and declared effective by the SEC on Aug. 20, 2018. The offering of the securities was made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the shares of common stock offered was filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained on the SEC's website at www.sec.gov or by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (646) 975-6996 or e-mail at placements@hcwco.com. About Astrotech Astrotech (NASDAQ: ASTC) -- http://www.astrotechcorp.com-- is a science and technology development and commercialization company that launches, manages, and builds scalable companies based on innovative technology in order to maximize shareholder value. 1st Detect develops, manufactures, and sells trace detectors for use in the security and detection market. AgLAB is developing chemical analyzers for use in the agriculture market. BreathTech is developing a breath analysis tool to provide early detection of lung diseases. Astrotech is headquartered in Austin, Texas. Astrotech reported a net loss of $8.31 million for the year ended June 30, 2020, compared to a net loss of $7.53 million for the year ended June 30, 2019. As of Dec. 31, 2020, the Company had $23.58 million in total assets, $4.77 million in total liabilities, and $18.81 million in total stockholders' equity. Armanino LLP, in San Francisco, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Sept. 8, 2020, citing that the Company has suffered recurring losses from operations and has net cash flows deficiencies that raise substantial doubt about its ability to continue as a going concern. ASTROTECH CORP: Incurs $1.6M Net Loss for Quarter Ended Dec. 31 --------------------------------------------------------------- Astrotech Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.62 million on $130,000 of revenue for the three months ended Dec. 31, 2020, compared to a net loss of $2.08 million on $205,000 of revenue for the three months ended Dec. 31, 2019. For the six months ended Dec. 31, 2020, compared to a net loss of $3.73 million on $270,000 of revenue compared to a net loss of $4.15 million on $206,000 of revenue for the six months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $23.58 million in total assets, $4.77 million in total liabilities, and $18.81 million in total stockholders' equity. Since the beginning of the quarter, the Company successfully raised a total of $37.0 million in gross proceeds, strengthening its balance sheet for its future growth and expansion of its business. The financings will allow for continued operating expenses and working capital as the Company increases sales of its TRACER 1000 explosives trace detector (ETD) to DHL (Deutsche Post AG) and other customers in the security market, launch the AgLAB-1000-D2 into the hemp and cannabis industry, and develop, in partnership with The Cleveland Clinic Foundation, the BreathTest-1000 to screen for volatile organic compound (VOC) metabolites found in a person's breath that could indicate they may have an infection, including Coronavirus Disease 2019 (COVID-19) or the resulting disease, pneumonia. On the heels of the capital raises, the Company announced that 1st Detect exceeded $1 million in purchase orders and an additional $1 million in future service & support commitments for its TRACER 1000. In December, the Company also announced that the TRACER 1000 ETD received a Gold Award for the Best CBRNE Detection System category at American Security Today's 'ASTORS' Homeland Security Awards program, the preeminent U.S. Homeland Security Awards Program that highlights the most cutting-edge and forward-thinking security solutions coming onto the market today. The Company also continues to get closer to domestic sales at 1st Detect. Following the successful completion of non-detection testing last quarter with the U.S. Transportation Security Administration (TSA), the Company has entered detection testing, which is the final phase before the TRACER 1000 can be approved for cargo sales in the United States. "We are excited to have our superior technology recognized by a leading voice in the security industry, to have passed the significant $1 million purchase order milestone, and for our progress with TSA. We believe that we offer the most advanced ETD on the market," stated Thomas B. Pickens III, chairman and chief executive officer of Astrotech Corporation. "Our work to bring our Ag solution to the market continues to move forward as we receive positive feedback and much interest from prospective customers. Finally, our breath analysis efforts are progressing with The Cleveland Clinic Foundation and we hope to have an update on our work in the near-term," concluded Pickens. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1001907/000156459021006047/astc-10q_20201231.htm About Astrotech Astrotech (NASDAQ: ASTC) -- http://www.astrotechcorp.com-- is a science and technology development and commercialization company that launches, manages, and builds scalable companies based on innovative technology in order to maximize shareholder value. 1st Detect develops, manufactures, and sells trace detectors for use in the security and detection market. AgLAB is developing chemical analyzers for use in the agriculture market. BreathTech is developing a breath analysis tool to provide early detection of lung diseases. Astrotech is headquartered in Austin, Texas. Astrotech reported a net loss of $8.31 million for the year ended June 30, 2020, compared to a net loss of $7.53 million for the year ended June 30, 2019. As of Sept. 30, 2020, the Company had $3.18 million in total assets, $4.63 million in total liabilities, and a total stockholders' deficit of $1.44 million. Armanino LLP, in San Francisco, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Sept. 8, 2020, citing that the Company has suffered recurring losses from operations and has net cash flows deficiencies that raise substantial doubt about its ability to continue as a going concern. AVERY ASPHALT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Avery Asphalt, Inc. 7770 Venture Street Colorado Springs, CO 80915 Business Description: Avery Asphalt, Inc. is an asphalt paving contractor based in Colorado. Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Colorado Case No.: 21-10799 Debtor's Counsel: David J. Warner, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwarner@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Aaron Avery, CEO. 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/LUYBPZI/Avery_Asphalt_Inc__cobke-21-10799__0004.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LBNDVKY/Avery_Asphalt_Inc__cobke-21-10799__0001.0.pdf?mcid=tGE4TAMA AVERY EQUIPMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Avery Equipment, LLC 7770 Venture Street Colorado Springs, CO 80951 Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Colorado Case No.: 21-10800 Debtor's Counsel: David J. Warner, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwarner@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Aaron Avery, manager. The Debtor stated it has no unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/L24MKLY/Avery_Equipment_LLC__cobke-21-10800__0001.0.pdf?mcid=tGE4TAMA AVERY HOLDINGS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Avery Holdings, LLC 7770 Venture Street Colorado Springs, CO 80951 Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Colorado Case No.: 21-10801 Judge: Hon. Michael E. Romero Debtor's Counsel: David J. Warner, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwarner@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Aaron Avery, manager. The Debtor stated it has no unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/4F53A4Y/Avery_Holdings_LLC__cobke-21-10801__0001.0.pdf?mcid=tGE4TAMA AVIS BUDGET: Moody's Gives B3 Rating on $600MM Sr. Unsecured Notes ------------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Avis Budget Car Rental, LLC's $600 million of senior unsecured notes. All other ratings are unaffected including: at Avis the corporate family rating at B2, senior secured credit at Ba2 and, the senior unsecured at B3; and, at Avis Budget Finance PLC the senior unsecured at B3. The speculative grade liquidity rating is SGL-3. The outlook is negative. The B3 rating of the notes reflect the pari passu ranking with Avis's other senior unsecured debt. Proceeds will be used to redeem the $500 million of 10.5% Senior Secured Notes due 2025 that are rated Ba2, and for fees and expenses. The Ba2 rating of the 10.5% Senior Secured Notes will be withdrawn upon close. The following rating actions were taken: Assignments: Issuer: Avis Budget Car Rental, LLC Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5) RATINGS RATIONALE Avis's B2 CFR and other ratings reflect the still-weak global car rental sector due to the coronavirus outbreak that is likely to weigh meaningfully on business and leisure travel through 2022, along with high financial leverage and high fixed operating costs that limit the margin. The car rental sector will also be weighed by the potential emergence from bankruptcy of major car rental companies in the US and Europe. The ratings also recognize the progress Avis made during 2020 in contending with this environment. The company was able to: 1) achieve a significant reduction in fleet in response to lower demand; 2) maintain positive vehicle residual values while reducing its fleet; and, 3) significantly reduce fixed costs, principally in its on-airport locations. These actions will help the company to better contend with still depressed demand levels. Avis's cash and revolver liquidity position was $1.3 billion, as of December 31, 2020, which is adequate to contend with the corporate and fleet debt maturities in 2021. Avis' principal environmental exposure arises from its storage of petroleum products such as gasoline, diesel fuel and motor and waste oils, and the treatment or discharge of waste waters. Moody's expect that the company will remain in compliance with all related requirements. The company also maintains adequate relationships with its employees, regulatory bodies and the communities in which it operates. The key governance risk is Avis's financial strategy which employs a considerable amount to debt to fund the maintenance and the annual expansion its vehicle fleet. This heavy reliance on debt increases the company's vulnerability to operational stress and to factors that could limit its access to needed funding. The negative outlook reflects the continuing risk of the challenging operating environment as a result of: the scope of the air travel downturn; the possibility of spreading consumer economic weakness; the challenge of accurately matching the pace of fleet expansion with demand levels in the still-uncertain travel market ; and, potential disruption in the used car market pricing structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded in the event of a major misalignment between Avis's fleet size and car rental demand. The rating could also be downgraded if such a fleet vs. demand misalignment were to develop at any major competitor as this could lead to pressure on pricing and on the residual value of vehicles sold in the used car market. Rating pressure would also result from a disruption in the used car market or a resurgence of coronavirus infections. Maintaining a liquidity position that comfortably covers all twelve-month cash requirements will be essential in maintaining the current ratings. The ratings could be upgraded with: demonstrating optimal alignment of the rental fleet with sustainable demand levels; a sustained recovery in air travel; and, financial performance that includes an EBITA margin approximating 4% and EBITA/interest exceeding 2.5x. Avis Budget Group, Inc. is one of the world's leading car rental companies through its Avis and Budget brands. The company's Zipcar brand, is the world's leading car sharing network. The company's revenues for the twelve months through December 2020 were $5.4 billion. The principal methodology used in this rating was Equipment and Transportation Rental Industry published in April 2017. AVIS BUDGET: S&P Alters Outlook to Stable, Affirms 'B+' ICR ----------------------------------------------------------- S&P Global Ratings revised its outlook on Parsippany, N.J.-based car renter Avis Budget Group Inc. to stable from negative and affirming the 'B+' issuer credit rating. S&P said, "At the same time, we are raising our issue-level rating on the company's unsecured debt to 'B' from 'B-' and revising our recovery rating to '5'(15%) from '6'(5%). We are also assigning our 'B' issue-level rating and '5'(15%) recovery rating to its proposed $600 million senior unsecured notes due 2029. Finally, we are affirming our 'BB-' issue-level rating on its secured debt and revising our rounded recovery estimate for the '2' recovery rating to 85% from 70%. "We expect Avis Budget's credit metrics to improve in 2021 following the significant decline in its performance in 2020 due to the effects of the coronavirus. This improvement reflects our expectation for an increase in airline travel later in 2021 as the vaccines become more prevalent and the company continues to improve its operating performance. Avis Budget generates the majority of its revenue at airports globally and thus relies on airline passenger travel to support its demand. To offset the steep decline in air travel and the demand for its vehicles, the company has reduced its costs (by over $2.5 billion in 2020) and its fleet through the cancellation of new vehicle orders and the sale of used vehicles. Avis Budget has benefited from strong used car prices that have reduced its vehicle costs (when used car prices are strong, this is reflected in a lower depreciation expense). In 2020, the company's revenue declined by 41% and it lost $684 million, which compares with its profit of $302 million in 2019. However, Avis Budget cut its capital spending to $5.4 billion in 2020 from $12.9 billion in 2019 and reduced its balance sheet debt by $3.4 billion over that period. In addition, its EBIT interest coverage was -0.5x in 2020 (compared with 1.5x in 2019) and its FFO to debt was 8.4% (compared with 18.3% in 2019). We don't expect passenger travel to begin to recover until later in 2021 when the COVID-19 vaccines become more prevalent, although the strong used car prices could moderate somewhat in 2021. However, due to management's ongoing cost initiatives and its smaller fleet, we expect Avis Budget's credit metrics to improve in 2021 and thereafter, with EBIT interest coverage of about 1x and FFO to debt in the low-teens percent area over this period. "We continue to assess Avis Budget's liquidity as adequate. As of Dec. 31, 2020, the company had $692 billion of unrestricted cash, availability of $629 million under its corporate revolving credit facility, and availability of $4.9 billion under its vehicle financing facilities. Avis Budget will use the proceeds from the proposed unsecured notes to redeem the $500 million 10.5% secured notes it issued in May 2020 when its liquidity was more constrained. Combined with our expectation for continued low capital spending relative to before the pandemic, we now expect the company's liquidity sources to cover uses by about 2.5x over the next 12 months. "The revision of our recovery estimates for Avis Budget's debt reflects the planned redemption of its $500 million secured notes. We are revising our recovery rating on the company's existing unsecured debt and our rounded recovery estimate for its secured debt based on its pro forma redemption of the outstanding $500 million 10.5% secured notes it issued in May 2020 with the proceeds from its proposed unsecured notes, which will reduce the amount of secured debt in its capital structure. "The stable outlook on Avis Budget reflects our expectation that its credit metrics will continue to improve in 2021 and thereafter. We expect the volume of airline traffic to begin to recover later in 2021 as the COVID-19 vaccines become more prevalent and the company continues to benefit from the substantial cost reductions and strong used car prices that have reduced its depreciation expense. We expect Avis Budget's credit metrics to improve through 2022 (though not to the same levels as before the pandemic), with EBIT interest coverage of about 1x and FFO to debt in the low teens percent area, which compares with EBIT interest coverage of -0.5x and FFO to debt of 8.4% in 2019. "We could lower our rating on Avis Budget if its FFO to debt remains in the high single-digit percent area for a sustained period or its liquidity becomes constrained. This could occur because of weaker-than-expected air travel or a prolonged decline in used car prices. "We could raise our rating on Avis Budget if airline travel recovers significantly, causing its EBIT interest coverage to rise to at least 1.1x and its FFO to debt to increase to more than 12% for a sustained period." AVIVAR HOSPITALITY: Unsecured Creditors to Recover 100% in Plan --------------------------------------------------------------- Avivar Hospitality, LLC, submitted a First Amended Plan of Reorganization and a corresponding Disclosure Statement on Feb. 16, 2021. The Debtor anticipates increased revenues beginning in calendar year 2021 due to the development of vaccines to control the spread of Covid-19, coupled with increased travel and demand for its facilities. The Debtor expects that revenue per available room will return to prepandemic levels by 2024. The company has obtained a commitment for a new Equity Contribution from Sterling Holdings, LLC of $2,000,000. In return for this contribution, Sterling will own substantially all of the Equity Interests in the Reorganized Debtor. The Debtor projects that it will have sufficient cash on hand on the Effective Date of the Plan to cure the outstanding arrearages owed to its primary secured creditor (which holds two liens against the Debtor's real property and related rents), and to pay all Allowed Administrative Claims and unsecured trade debts in full. A junior loan encumbering the Debtor's real property will be restructured and paid over an amortization period of thirty years (with a ten-year maturity date). A fourth loan, secured only by the Debtor's furniture, fixtures, and equipment, will be restructured and paid over a term of ten years. The Plan also contemplates that, if the Debtor's secured obligations are not sooner satisfied or refinanced, the Hotel Property will be sold in 2028. Remaining claims against the Estate will be paid from the sale proceeds. The Plan encompasses certain agreements among the Debtor, Sterling, the current owner of the Debtor's Equity Interests, and others. The filing of the Plan constitutes a request for approval of these agreements, which include settlement of potential Avoidance Actions. Class 7 consists of all Allowed Unsecured Deficiency Claims. The Debtor estimates that the amount of all Allowed Unsecured Deficiency Claims will be $7,782,600. These Claims shall be treated as unsecured obligations of the Reorganized Debtor. Each holder of an Allowed Unsecured Deficiency Claim will be paid 50% of the amount of such Claim as of the Petition Date in a single distribution on the Sale Closing Date or as soon as practicable thereafter. Class 8 consists of all Allowed Unsecured Claims in amounts of $7,500 or less each. The Debtor estimates that the amount of all Unsecured Convenience Claims will be $23,400. Holders of Unsecured Convenience Claims will be paid in full on account of their respective Unsecured Claims as of the Petition Date (up to a maximum of $7,500 per Creditor) in a single distribution on or before the Effective Date of the Plan. Class 9 consists of the Allowed Unsecured Claim of Sterling. The Debtor estimates that the Allowed Unsecured Claim of Sterling will be $3,000,000. Pursuant to the Sterling-Lotus Settlement as set forth in the Plan, this Claim will be deemed an allowed unsecured Claim against the Estate in the amount of $3,000,000. However, contingent upon occurrence of the Effective Date, no distributions shall be made with respect to the Allowed Unsecured Claim of Sterling. Class 10 consists of all Allowed Unsecured Claims not otherwise classified in the Plan. The Debtor estimates that the amount of all Allowed General Unsecured Claims will be $117,861 with 100% estimated recovery. The holders of Allowed General Unsecured Claims will be paid in full on account of their respective Unsecured Claims as of the Petition Date in a single distribution on or before the Effective Date of the Plan. Class 11 consists of the Allowed Equity Interests in the Debtor, held by Lotus Holdings, LLC (100%). The Equity Interests in the Debtor will be canceled as of the Effective Date, and the holder of the Equity Interests shall receive no distributions or retain any property under the Plan. A full-text copy of the First Amended Disclosure Statement dated Feb. 16, 2021, is available at https://bit.ly/3ucqX77 from PacerMonitor.com at no charge. Counsel for the Debtor: Richard S. Wright, Esq. Caleb Brown, Esq. MOON WRIGHT & HOUSTON, PLLC 121 W. Trade Street, Suite 1950 Charlotte, NC 28202 Tel: (704) 944-6560 Fax: (704) 944-0380 About Avivar Hospitality Avivar Hospitality, LLC, owns and operates a dual-branded hotel, comprised of a Residence Inn by Marriott and a Courtyard by Marriott, located at 9110 Harris Corners Parkway, Charlotte, North Carolina. The hotels offer a combined 188 guest rooms, together with dining, conference, and recreational facilities. Avivar Hospitality, based in Raleigh, NC, filed a Chapter 11 petition (Bankr. W.D.N.C. Case No. 20-30789) on Aug. 27, 2020. In its petition, the Debtor was estimated to have $10 million to $50 million in both assets and liabilities. The petition was signed by Anuj Mittal, manager of Lotus Holdings, LLC. The Hon. Laura T. Beyer presides over the case. Moon Wright & Houston, PLLC, serves as bankruptcy counsel to the Debtor. B-LINE CARRIERS: Court Allows Cash Collateral Use Until March 22 ---------------------------------------------------------------- Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized B-Line Carriers, Inc., to use cash collateral on an interim basis, pending a further hearing on the Debtor's cash collateral motion, which is scheduled for March 22, 2021 at 2 p.m. Judge Delano authorized the Debtor to use Cash Collateral including, without limitation, cash, deposit accounts, accounts receivable, and proceeds from its business operations in accordance with the approved budget, as long as the aggregate of all expenses for each week do not exceed the amount in the Budget by more than 10% for any such week on a cumulative basis. The approved Budget projects total expenses in the amount of $34,714 for the week ending February 20, 2021, $158,397 for the week ending February 27, 2021, $46,338 for the week ending March 6, 2021, $161,755 for the week ending March 13, 2021, $37,513 for the week ending March 20, 2021, and $161,195 for the week ending March 27, 2021. The Debtor is also authorized to make adequate protection payments to BMO Harris, in the amount of $1,423 on the week ending February 20, 2021. In addition, Regions Bank, N.A. and the U.S. Small Business Administration are granted replacement liens in and upon all of the categories and types of collateral in which they held a security interest and lien as of the Petition Date to the same extent, validity and priority that they held as of the Petition Date. Cadence Bank, N.A. is granted a replacement lien on cash to the extent of $35,000.00 with the same validity and priority that it held as of the Petition Date. Regions Bank consented to a carve-out for the replacement lien being granted to Cadence. About B-Line Carriers B-Line Carriers, Inc., a full-service petroleum transportation company, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06034) on Aug. 7, 2020. The petition was signed by Jason L. Baldree, president. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Amy Denton Harris, Esq., at Stichter, Riedel, Blain & Postler, P.A., is serving as the Debtor's counsel. On Jan. 5, 2021, the Court appointed Moecker Auctions, Inc. as Auctioneer. BRACHIUM INC: Gets OK to Hire Macdonald Fernandez as Legal Counsel ------------------------------------------------------------------ Brachium, Inc. received approval from the U.S. Bankruptcy Court for the Northern District of California to employ Macdonald Fernandez LLP as its bankruptcy counsel. The firm's services include the formulation of the Debtor's Chapter 11 plan, the preparation of bankruptcy schedules and statement of financial affairs, the evaluation of claims, reviewing monthly operating reports and responding to creditor inquiries. Macdonald Fernandez will be paid at these rates: Partners $535 to $690 per hour Associate Attorneys $335 to $435 per hour Paralegals $175 per hour The firm received the sum of $25,000 as a retainer. Macdonald Fernandez is a "disinterested person" as defined by Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Iain A. Macdonald, Esq. Macdonald Fernandez LLP 221 Sansome Street, Third Floor San Francisco, CA 94104 Tel: (415) 362-0449 Fax: (415) 394-5544 Email: iain@macfern.com About Brachium Inc. Brachium, Inc. -- http://brachium.com-- is a healthcare technology startup redefining the dental experience using robotics, machine learning and digital augmentation. Brachium filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 21-30047) on Jan. 25, 2021. Yaz Shehab, chief executive officer, signed the petition. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Hannah L. Blumenstiel presides over the case. Iain A. Macdonald, Esq., at Macdonald Fernandez LLP, serves as the Debtor's legal counsel. CALAIS REGIONAL HOSPITAL: Down East Buys Rival Out of Bankruptcy ---------------------------------------------------------------- David Marino Jr. and Matthew Stone of Bangor Daily News report that Down East Community Hospital in Machias said Friday, February 19, 2021, that it plans to purchase the only other hospital in Washington County, Calais Regional Hospital, which has been in bankruptcy since 2019. Calais Regional Hospital, which would become Calais Community Hospital under the new ownership, filed for Chapter 11 bankruptcy in 2019 after several years of operating in the red. The hospital had cut services in recent years, including outpatient cancer care in 2018 and labor and delivery services the year before that. Down East had been looking to purchase Calais Regional for several months, the Machias hospital said Friday, Feb. 19, 2021, in announcing its intention to purchase the Calais hospital. Hospital President Steve Lail said he hopes to bring several services back to the hospital, including full-time general surgery. Down East Community Hospital has been working with many of the Calais hospital's creditors on the acquisition plan. Under that plan, the leadership at Down East Community would oversee both hospitals. Down East hopes to rebuild Calais Regional by improving the hospital’s profits while reducing expenses, Lail said. "We will be two hospitals, with one team, and one focus," Lail said. In 2018, the last year for which financial data are available, Calais Regional Hospital posted a loss of $550,000, down from losing $2.2 million the previous year. In the 13 months after it filed for bankruptcy in September 2019, the hospital posted more than $4 million in losses, according to documents filed in U.S. Bankruptcy Court. The hospital has also incurred more than $800,000 in costs — largely legal expenses — related to its bankruptcy filing, according to those documents. Down East Community Hospital, meanwhile, has operated in the black in recent years, a feat that hasn't been universal among Maine's small hospitals, according to the Maine Health Data Organization. The Machias hospital posted a gain of $426,000 in 2018, the last year for which data are available, down from a $739,000 gain the previous year. Under plans filed in U.S. Bankruptcy court, an entity affiliated with Down East Community Hospital, called Calais Community Hospital, would assume debt to buy the Calais hospital out of bankruptcy and pay some of the largest creditors. The plans filed in bankruptcy court estimate the Calais hospital's assets at $14.2 million. Leaders at Calais Regional Hospital were surprised to see Down East Community Hospital's acquisition plan proposed in bankruptcy court because discussions between the two hospitals had "died off" last year, said Dee Dee Travis, a spokesperson for the Calais hospital. Calais Regional Hospital's board of directors generally supports the plan, Travis said, noting that several details still have to be worked out. The hospital's "ultimate goal is to ensure that the community will continue to have hospital services close to home," she said. Last spring of 2020, as the COVID-19 pandemic forced health care providers to cancel many procedures, depriving them of crucial revenue, Calais Regional Hospital warned it might have to close its doors by the start of summer without more federal aid. It also said it would cut 10 percent of its workforce. The Calais hospital, along with Penobscot Valley Hospital in Lincoln, which was also in bankruptcy, was unable to qualify for a Paycheck Protection Program loan because program rules didn’t allow loans to go to businesses in bankruptcy. At one point, the Calais hospital proposed temporarily exiting bankruptcy so it could qualify for a Paycheck Protection Program loan, but later abandoned those plans. It also unsuccessfully sued the U.S. Small Business Administration to change program rules to allow businesses in bankruptcy to qualify for aid. Until November, the Calais hospital had been in the midst of a prolonged contract dispute with employees, including registered nurses, medical laboratory scientists, laboratory technologists and radiology technologists. Eighty-four percent of the hospital's unionized employees last fall signed a petition of no confidence in Calais Regional's CEO, Rod Boula, demanding that he be fired. The employees later planned to strike, before calling off those plans after reaching a contract agreement with hospital management in mid-November. "We are hopeful that this is a new beginning for our hospital," said Alison Monaghan, a nurse and union steward. "This has been a long road for all of the employees and for the community that we serve. We are ready to help put our hospital on a new path where everyone's voices are heard." The 25-bed Calais hospital has 259 employees, according to bankruptcy filings, and it owed about $25 million to nearly 1,900 creditors. It owed the largest sums to the U.S. Department of Agriculture, Katahdin Trust Company, First National Bank and the Maine Department of Health and Human Services. It owed more than $3 million to vendors, including a medical staffing firm and a Tennessee-based company that previously managed the hospital. If the Down East Community Hospital acquisition is completed by March 31, the Calais hospital -- which would no longer be in bankruptcy -- would apply for a Paycheck Protection Program loan, according to bankruptcy court documents describing the transaction. Calais Regional is also expecting reconciliation payments from the federal Centers for Medicare and Medicaid Services and the Maine Department of Health and Human Services that could also brighten the hospital's financial outlook, according to the court documents. Down East Community Hospital's purchase of Calais Regional needs to be approved by a judge presiding over the bankruptcy before it is finalized. About Calais Regional Hospital Based in Calais, Maine, Calais Regional Hospital operates as a non-profit organization offering cardiac rehabilitation, emergency, food and nutrition, home health, inpatient care unit, laboratory, nursing, radiology, respiratory care and stress testing, surgery, and social services. Visit https://www.calaishospital.org/ for more information. Calais Regional Hospital filed a Chapter 11 petition (Bankr. D. Maine Case No. 19-10486) on Sept. 17, 2019. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Michael A. Fagone oversees the case. Debtor tapped Murray Plumb & Murray as its bankruptcy counsel, Spinglass Management LLC as financial advisor; and Kelly, Remmel & Zimmerman and Norman Hanson Detroy LLC as special counsel. CAMBER ENERGY: Inks Merger Agreement with Viking Energy ------------------------------------------------------- Camber Energy, Inc. and Viking Energy Group, Inc. have entered into a definitive Agreement and Plan of Merger dated as of Feb. 15, 2021, regarding the full combination of the two entities. Camber already owns approximately 62% of Viking's issued and outstanding common shares, and the Merger Agreement contemplates, through a reverse triangular merger structure, Camber issuing newly-issued shares of common stock in exchange for the balance of Viking's common stock on a one-for-one basis. For example, if a Viking shareholder owns 100 shares of common stock of Viking immediately prior to closing of the Merger, the shareholder would receive 100 shares of common stock of Camber on closing of the Merger. James Doris, president and CEO of the two companies, commented, "We are very pleased with the transactions that have been completed between Camber and Viking in the last 60 days, and are excited about this final step to fully combine the two entities, which we believe will put the organization in an even better position to increase stakeholder value." The Merger Agreement also contemplates each outstanding share of Series C Preferred Stock of Viking being exchanged for one share of Series A Preferred Stock of Camber, which will have the characteristics as set out in the Merger Agreement. Completion of the Merger is subject to a number of conditions, including but not limited to receipt of all required regulatory, corporate and third-party approvals, including the approval of the stockholders of each of Viking and Camber, and the fulfillment of all applicable regulatory requirements. A full-text copy of the Agreement and Plan of Merger is available for free at: https://www.sec.gov/Archives/edgar/data/1309082/000147793221000935/cei_ex21.htm About Camber Energy Based in Houston, Texas, Camber Energy -- http://www.camber.energy -- is primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including from the Hunton formation in Lincoln, Logan, Payne and Okfuskee Counties, in central Oklahoma; the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas, in connection with its Panhandle acquisition which closed in March 2018. Camber Energy reported a net loss of $3.86 million for the year ended March 31, 2020, compared to net income of $16.64 million for the year ended March 31, 2019. As of Sept. 30, 2020, the Company had $11.79 million in total assets, $1.61 million in total liabilities, $6 million in preferred stock (series C), and $4.18 million in total stockholders' equity. Marcum LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated June 29, 2020, citing that the Company has incurred significant losses from operations and had an accumulated deficit as of March 31, 2020 and 2019. These factors raise substantial doubt about its ability to continue as a going concern. CAMP CROTEAU: Seeks Cash Collateral Access Thru July 15 ------------------------------------------------------- Camp Croteau, Inc. asks the U.S. Bankruptcy Court for the Central District of California, Riverside Division, for authorization to continue using cash collateral from March 15, 2021 through July 15, 2021. "Debtor has stabilized its operations and has progressed in its reorganization. In the last eight months, Debtor has consolidated its financial records and updated its recordkeeping. The Debtor's principals visit on-site operations more frequently now which has created greater efficiency and has improved Debtor's standard practices. Debtor has reopened its doors for business following the pandemic closure and is now obtaining new clients. Debtor has negotiated with its creditor, Labor Commissioner's Office, has made an offer in compromise to payoff the debt, and has performed under the agreement. Further, Debtor is in the process of negotiating with the creditors whose claims arose based on a contingent repayment guaranty on two USSBA loans secured by the assets of other insolvent entities," the Debtor tells the Court. The Debtor's assets include furniture, fixtures, machinery, equipment, sports equipment, and cash. As of the Petition Date, the Debtor's assets have an approximate value of $140,046. The senior secured creditor U.S. Small Business Administration has blanket security interests over all of the Debtor's assets. The balance of the loan on the Petition Date is $190,000. The Debtor says it needs to use cash collateral to continue to operate. It also says since all of the Debtor's receivables and accounts are security for its loan with the SBA, the Debtor has no income that is not cash collateral. The Debtor explains that if it cannot use the cash collateral, it will either have to seek post-petition financing or close the business. "Any post-petition financing would result in less money for Debtor's creditors because of the additional costs and subordination of liens. Using cash collateral would enable Debtor to continue its business without having to incur more debt. Closing the business would destroy Debtor's chance of reorganization and result in little to no payment to creditors since all its hard assets are subject to purchase money security interests," the Debtor explains. The Debtor's proposed four-month budget projects total expenses in the amount of $35,640.84 for each of the months of April, May, June and July. "To protect the Debtor from fluctuations in its expenses, Debtor requests that it be permitted to have the flexibility to increase expenditures by up to 20% for any line item in the budget and 15% in the aggregate. Some expenses may not be required to be paid each month, and Debtor requests authority to 'carry over' the unused amount to subsequent months when the expense is paid. With this flexibility, Debtor can operate its business with minimal disruption and cost," the Debtor tells the Court. The Debtor says it is willing to offer adequate protection in the form of replacement liens in the same priority and validity as the secured creditors held pre-petition. The Debtor adds it is willing to offer adequate protection in the form of periodic cash payments to the secured creditor in an amount deemed necessary. The Debtor avers that its proposed budget reflects an average monthly surplus of $2,259 that may be used to pay the secured creditor such periodic cash payments. The Debtor says it also has $104,563 in its DIP Bank account as of January 29, 2021. About Camp Croteau Camp Croteau, Inc. filed its chapter 11 petition on June 29, 2020 (Bankr. C.D. Cal. Case No. 20-14458), listing under $500,000 in assets and $500,001 to $1 million in liabilities. The Hon. Scott C. Clarkson oversees the case. Camp Croteau, Inc. is represented by: Todd Turoci, Esq. Dustin Nirschl, Esq. THE TUROCI FIRM 3845 Tenth Street Riverside, CA 92501 Telephone: 888-332-8362 Email: mail@theturocifirm.com The Debtor has filed a Subchapter V plan of reorganization. A hearing to consider confirmation of the Plan has been continued to March 9. CARECENTRIX HOLDINGS: S&P Downgrades ICR to 'B-', Outlook Stable ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on CareCentrix Holdings Inc. to 'B-' from 'B'. The outlook is stable. S&P also lowered the issue-level rating on subsidiary CareCentrix Inc.'s senior debt to 'B-' from 'B'. The '3' recovery rating on this debt indicates expectations for meaningful (50%-70%; rounded estimate: 55%) recovery in a default. S&P said, "We expect credit metrics to deteriorate significantly over the next 12 months due to the near-term impacts the loss of Cigna will have on EBITDA and margins. While CareCentrix was able to increase the scope of existing contracts and win new contracts in recent months, we expect 2021 revenue to contract by about 40% from 2020. Margins will also be compressed as the company works to remove about $100 million of annualized costs associated with the Cigna contract during the year. We expect leverage will exceed 11x in 2021 before falling in 2022. We also expect a free operating cash flow (FOCF) deficit of about $40 million-$50 million in 2021 before it returns to positive in 2022 to about $10 million. "We now view the business as riskier due to mix shift to risk-based contracts from fee-for-service following the loss of Cigna. We expect risk-based contracts to generate about half of the company's revenue for 2021 and increase the potential variability of earnings. We continue to assess the company's business risk profile as weak due to its narrow business focus, high client concentration, and below-average profitability. CareCentrix's client concentration remains high, with its top four customers expected to contribute more than 90% of gross profits. We view the greatest long-term risk to the company as the potential for insurance companies to in-source the services CareCentrix offers, as occurred with the Cigna contract. We also see potential heightened competition for clients and pricing pressure as insurance companies, such as eviCore (a wholly-owned subsidiary of ExpressScripts/Cigna) and naviHealth (a wholly-owned subsidiary of OptumHealth/UnitedHealth Group Inc.), as well as independent providers AIM Specialty Health and myNEXUS, compete for clients. Still, we view CareCentrix as having an established position in the industry, good scale (about $1.2 billion in revenue projected for 2021), limited exposure to government reimbursement, and a successful track record in renewing and expanding contracts with existing customers, as well as attracting new customers. Likewise, we expect many midsize insurance companies will prefer doing business with independent third-party partners such as CareCentrix rather than subsidiaries of larger health insurance companies. "Our assessment of the company's financial risk profile reflects expectations for negative free cash flow in 2021 and heightened leverage following Cigna's departure. Although the company has maintained leverage below 4.5x over the past four years and has a cash balance of over $230 million, we expect the company's debt leverage will rise above 11x over the next 12 months and remain elevated at about 8x-9x in 2022. We expect the company will prioritize growth over debt repayment until EBITDA stabilizes. We expect a free cash flow deficit of about $40 million-$50 million in 2021 before free cash flow grows to about $10 million in 2022 from new contract wins and strong organic growth. We note there is a higher-than-usual degree of uncertainty regarding 2022 cash flow and leverage projections given changes to customer composition, risk-based contract concentration, and the company's cost structure. However, given the company's history of profitable operations and strong cash position, we expect a significant improvement in 2022 regarding both cash flow and leverage. "The stable outlook reflects our view that free cash flow deficits will be manageable in 2021 before meaningfully improving in 2022 through costs savings and new client wins. "We could downgrade the company if we expected free operating cash flow (FOCF) deficits to persist beyond 2021 that led us to conclude the capital structure were unsustainable. This could occur due to substantially higher-than-expected medical costs in risk-based contracts or an unexpected loss of one or more of the company's largest clients. Given contract lengths, revenue visibility, and the flexible cost structure, we do not expect a downgrade over the next 12 months. "We could raise our rating to 'B' if we expected CareCentrix to sustain reported annual free operating cash flow above 3% of debt (about $15 million at the current capital structure), which could materialize through new contract growth, a faster-than-expected recovery in EBITDA margins following the loss of Cigna as a customer, or higher-than-expected profits from risk-based contracts." CARVER BANCORP: Incurs $1.3 Million Net Loss in Third Quarter ------------------------------------------------------------- Carver Bancorp, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.31 million on $5.24 million of total interest income for the three months ended Dec. 31, 2020, compared to a net loss of $1.44 million on $5.49 million of total interest income for the three months ended Dec. 31, 2019. For the nine months ended Dec. 31, 2020, the Company reported a net loss of $2.93 million on $15.10 million of total interest income compared to a net loss of $3.62 million on $16.36 million of total interest income for the nine months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $686.40 million in total assets, $639.99 million in total liabilities, and $46.41 million in total equity. Carver Bancorp said it is closely monitoring its asset quality, liquidity, and capital positions and that its management is actively working to minimize the current and future impact of the COVID-19 pandemic and is making adjustments to operations to help slow the spread of the virus. "In addition, as a result of further actions that may be taken to contain or reduce the impact of the COVID-19 pandemic, the Company may experience changes in the value of collateral securing outstanding loans, reductions in the credit quality of borrowers and the inability of borrowers to repay loans in accordance with their terms. The Company is actively managing the credit risk in its loan portfolio, including reviewing the industries that the Company believes are most likely to be impacted by emerging COVID-19 events. These and similar factors and events may have substantial negative effects on the business, financial condition, and results of operations of the Company and its customers," Carver Bancorp said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1016178/000101617821000007/carv-20201231.htm About Carver Bancorp Carver Bancorp, Inc., is the holding company for Carver Federal Savings Bank, a federally chartered savings bank. The Company is headquartered in New York, New York. The Company conducts business as a unitary savings and loan holding company, and the principal business of the Company consists of the operation of its wholly-owned subsidiary, Carver Federal. Carver Federal was founded in 1948 to serve African-American communities whose residents, businesses and institutions had limited access to mainstream financial services. The Bank remains headquartered in Harlem, and predominantly all of its seven branches and four stand-alone 24/7 ATM centers are located in low- to moderate-income neighborhoods. Carver Bancorp reported a net loss of $5.42 million for the year ended March 31, 2020, compared to a net loss of $5.94 million for the year ended March 31, 2019. As of Sept. 30, 2020, the Company had $672.65 million in total assets, $626.26 million in total liabilities, and $46.39 million in total equity. CCRR PARENT: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned CCRR Parent Inc. its 'B' issuer credit rating. The outlook is stable. S&P also assigned its 'B' issue-level and '3' recovery ratings to the company's term loan B and revolver. S&P's stable rating outlook reflects S&P's expectation that despite EBITDA growth and positive cash flow generation, CCRR Parent Inc. will maintain leverage above 5x given the aggressive financial policy and sponsor ownership. Modest scale and narrow focus within the highly fragmented travel nurse and fast response healthcare staffing market. S&P expects that pro forma for the combination, CCRR will generate annual revenues of approximately $600 million-$700 million within a highly fragmented and cyclical nurse staffing industry. The combined company's segments include traditional travel nurse staffing (about 43% of revenues), fast response nurse staffing (44%), strike staffing (7%), and outsourced cardiology (5%). The company provides staffing through direct channels to hospital or healthcare systems and as a partner to managed service providers (MSPs), including larger healthcare staffing players such as AMN Healthcare, Medical Solutions, and AYA Healthcare. S&P said, "We view CCRR's unique role as a non-MSP affiliate to many larger MSPs favorably, as it reduces the risk of losing positions to dedicated providers and maintains strong relationships across the staffing spectrum. We believe the company's more concentrated focus on nurse staffing to be riskier relative to its healthcare staffing peers due the industry's cyclical nature." The two largest segments relate to nurse staffing, with traditional travel nurse staffing addressing routine travel assignments, and fast response staffing addressing more immediate needs triggered by a sudden imbalance in nurse staffing. The combined company will be the fourth-largest provider of travel nurse staffing services with approximately 9% market share in the travel nurse segment. The company will operate with good geographic diversification, with California (13% of revenues) and New York (11%) contributing the most revenue and no other state representing over 10% of revenues. The company's cost structure is 90% variable, insulating its profitability from potential economic downturns. However, the company does have some customer concentration with its top-two customers. S&P believes the company's diverse offerings provide a modest advantage by enabling the cross-selling of its services and creating incremental economies of scale. Favorable industry dynamics driven by an aging population, persistent shortage of nursing staff, a growing insured population, and increasing industry focus on quality patient care. The contingent labor market has favorable industry dynamics, has been helped by demand during the recent pandemic. The company's fast response and traditional travel nurse segments saw a substantial increase in demand during the pandemic as COVID-19 patients strained hospital staff across the country. S&P expects this demand to remain elevated in the immediate term, but to subside to pre-pandemic levels over the next few quarters. Additionally, an increase in nurse unionization and anticipation of a resumption of more normal staff strikes are tailwinds for the company's small but higher-margin strike preparedness segment over the next 12-18 months. Indeed, as the pandemic moderates, S&P expects healthcare unions to revisit their collective bargaining agreements, which could spur negotiations that may result in labor strikes. S&P said, "We expect good free cash flow generation of $40 million-$50 million annually starting in 2022, despite high leverage over the next 12 months. We expect leverage at transaction close of about 6x, remaining within the 5x-6x range for the next 12 months, driven by continued demand during the pandemic and eventually stabilizing. We expect an aggressive financial policy given the sponsor ownership, and we expect the company to pursue growth through acquisitions. Therefore, we expect adjusted debt leverage to persistently remain above 5x, despite good free cash flow generation. "The stable outlook reflects our expectation that once the pandemic subsides, CCRR Parent will maintain stable EBITDA margins and generate steady cash flow generations. Additionally, we expect revenues to generally grow after 2021, once the pandemic subsides. We expect adjusted debt leverage to remain above 5x due to an aggressive financial policy given the sponsor ownership. "We could lower our rating if the company experiences unforeseen operational disruptions, such as integration challenges, customer losses, or reduced demand during an extended economic downturn. This may result in revenue declines or EBITDA margin contraction of about 450 basis points, resulting in free operating cash flow to debt below 3% and leverage remaining above 7x for an extended period. "Though unlikely given the company's sponsor ownership, we could raise our rating on CCRR Parent if we expect leverage sustained below 5x and a funds from operations (FFO)-to-total-debt ratio of CHRISTIAN CARE: Fitch Lowers Series 2014 and 2016 Bonds to 'D' -------------------------------------------------------------- Fitch Ratings has downgraded to 'D' from 'B+' the series 2014 and 2016 retirement facility revenue bonds issued by Mesquite Health Facilities Development Corporation, TX on behalf of Christian Care Centers (Christian Care). The bonds are removed from Rating Watch Negative. SECURITY The bonds are secured by a gross revenue pledge, mortgage liens on Christian Care's property and debt service reserve funds. KEY RATING DRIVERS PAYMENT DEFAULT: The downgrade to 'D' from 'B+' reflects Christian Care's failure to pay the principal payments on its bonds that were due on Feb. 15, 2021. Failure to make payment of principal under the contractual terms of the rated obligation constitute a default, per Fitch's rating definition. Due to ongoing financial difficulties that have been exacerbated by the coronavirus pandemic, Christian Care has failed to make its payments toward debt service to the trustee since November 2020. Christian Care made the $1.3 million interest payment due on Feb. 15, 2021 from its own funds. About $4.3 million remains in the debt service reserve accounts. ESG - Governance: Christian Care has an ESG Relevance Score of '4' for Management Strategy due to a period of ineffective strategic planning and execution, which has given rise to multiple years of operating losses and declining liquidity levels. Management strategy is relevant to the rating in conjunction with other factors as the failure to address overdue plant updates, implement effective marketing strategies and increase pricing have contributed to the missed principal payment on Feb. 15, 2021. RATING SENSITIVITIES Rating sensitivities are no longer relevant given Christian Care's 'D' rating. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT PROFILE Christian Care serves the Dallas-Fort Worth metroplex with three senior living campuses in Mesquite, Fort Worth and Allen, Texas. Aggregate capacity consists of 410 independent living units, 152 assisted living units, 77 memory care units and 119 skilled nursing beds. Total operating revenue was $36.4 million in 2019. ESG CONSIDERATIONS Christian Care Centers has an ESG Relevance Score of '4' for Management Strategy due to ineffective strategic planning and execution by management, which has a negative impact on the rating in combination with other factors. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). CICI'S HOLDINGS: Court Okays Entire $9-Million Bankruptcy Loan -------------------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that Cici's Holdings Inc. can tap all $9 million of its bankruptcy loan after a court overruled a federal watchdog's objection that too much of the financing was pre-bankruptcy debt. At a hearing Thursday, Feb. 18, 2021, Judge Stacey G. C. Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas found the terms of the financing reasonable in light of the circumstances of the case. The ruling follows her Jan. 27, 2021 order approving interim access to $750,000 of the bankruptcy financing Jan. 27, 2021. About CiCi's Holdings CiCi's Holdings Inc. is the owner, operator and franchisor of family-oriented unlimited pizza restaurants. With 318 locations across 26 states, including 11 owned restaurants and 307 franchise locations owned and operated by 128 franchisees, the CiCi's brand is known as a "go-to" destination for family and other group outings through its wide variety of pizza, pasta, and salad bar items and cost-effective price point. CiCi's Holdings and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 21-30146) on Jan. 25, 2021, with a restructuring support agreement for a plan that would have lender D&G Investors LLC take over ownership. D&G is an affiliate of private investment firm Gala Capital. Cici's Holdings was estimated to have $10 million to $50 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Stacey G. Jernigan is the case judge. The Debtors tapped Gray Reed & McGRAW LLP as bankruptcy counsel and Piper Sandler & Co. as investment banker. Stretto is the claims agent. CITIUS PHARMACEUTICALS: Closes $76.5M Registered Direct Offering ---------------------------------------------------------------- Citius Pharmaceuticals, Inc. has closed its previously announced sale of an aggregate of 50,830,566 shares of its common stock and accompanying warrants to purchase up to an aggregate of 25,415,283 shares of its common stock, at a purchase price of $1.505 per share and accompanying warrant in a registered direct offering priced at-the-market under Nasdaq rules. H.C. Wainwright & Co. acted as the exclusive placement agent for the offering. The warrants have an exercise price of $1.70 per share, are immediately exercisable, and will expire five years from the issue date. The aggregate gross proceeds to the Company from the offering are approximately $76.5 million, before deducting the placement agent fees and other offering expenses payable by the Company. Citius currently intends to use the net proceeds from the offering for general corporate purposes, including pre-clinical and clinical development of the Company's product candidates and working capital and capital expenditures. 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. Citius reported a net loss of $17.55 million for the year ended Sept. 30, 2020, compared to a net loss of $15.56 million for the year ended Sept. 30, 2019. As of Dec. 31, 2020, the Company had $35.31 million in total assets, $9.51 million in total liabilities, and $25.80 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. CLEARPOINT CHEMICALS: Creditors Committee Says Plan Inadequate -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Clearpoint Chemicals, LLC's case objects to the Disclosure Statement explaining the Debtor's Plan. The Committee claims that the Disclosure Statement is inadequate because it provides scant to no information regarding the assets of the Debtor, and facts and evidence supporting non-debtor releases included in the Proposed Chapter 11 Plan. The Committee points out that there is no clear explanation for how the new value has been provided by equity and/or why any such new value is adequate, if allowed at all insofar as the Disclosure Statement and Plan allude to new value provided by equity or affiliates of equity and the Debtor. The Committee says that the Disclosure Statement fails to adequately disclose the relationships among insiders, including relationships between and/or among Debtor; Clearpoint Industries, LLC; Clearpoint Polymers, LLC; Silverback Chemicals, LLC; and related equity. The Committee asserts that the Debtor fails to provide any analysis of the Seaside factors required for approval of such far reaching and sweeping releases of insiders, affiliates, and/or equity. This analysis is especially important given potential claims of the Estate against insiders and equity for preference payments. The Committee further asserts that the Disclosure Statement provides no clear disclosures, much less adequate disclosures, regarding the apparent basis by which equity retains ownership in the Reorganized Debtor when creditors are not paid in full. A full-text copy of the Committee's objection dated Feb. 16, 2021, is available at https://bit.ly/3k1pgEO from PacerMonitor.com at no charge. Attorney for the Creditors' Committee: RICHARD M. GAAL McDOWELL KNIGHT ROEDDER & SLEDGE, LLC Post Office Box 350 Mobile, Alabama 36601 Telephone: (251) 432-5300 Fax: (251) 432-5303 E-mail: rgaal@mcdowellknight.com About Clearpoint Chemicals Clearpoint Chemicals, LLC operates in the specialty chemical services industry. It develops customer-specific chemical solutions, provides in-house last-mile logistics, and delivers on-site application and management, and continued communication and project assessment services. Clearpoint Chemicals sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 20-12274) on Sept. 29, 2020. At the time of the filing, the Debtor estimated assets of between $10 million and $50 million and liabilities of the same range. Judge Jerry C. Oldshue oversees the case. The Debtor tapped Silver, Volt & Garrett as its bankruptcy counsel and R. Tate Young, Esq., an attorney practicing in Houston, as its special counsel. CLEARPOINT CHEMICALS: Rocky Mountain Says Disclosures Deficient --------------------------------------------------------------- Rocky Mountain Transload, Inc. ("RMT") objects to the Disclosure Statement filed by debtor Clearpoint Chemicals, LLC. Rocky Mountain states that the Disclosure Statement should be denied because it fails to provide full and sufficiently detailed information to permit parties in interest in this case to evaluate whether to accept or reject the Plan. Rocky Mountain says that the Disclosure Statement is deficient and further asserts that: * The Disclosure Statement fails to detail how the Debtor is handling its obligations with RMT. * The Disclosure Statement fails to detail how the Debtor is dealing with the storage obligation with RMT. * The Disclosure Statement fails to detail what the Debtor is doing with the hazardous chemicals. * The Disclosure Statement fails to detail how the Debtor will pay the administrative obligation owing to RMT. * The Disclosure Statement fails to detail how the Debtor will deal with the environmental concerns that arise from the storage of the chemicals. A full-text copy of Rocky Mountain's objection dated Feb. 16, 2021, is available at https://bit.ly/3uelFIg from PacerMonitor.com at no charge. Counsel for Rocky Mountain: Paul G. Urtz Miller & Urtz, LLC 1660 Lincoln Street, #1420 Denver, CO 80264 Telephone: (303) 861-1200 E-mail: paulurtz@millerurtz.com About Clearpoint Chemicals Clearpoint Chemicals, LLC operates in the specialty chemical services industry. It develops customer-specific chemical solutions, provides in-house last-mile logistics, and delivers on-site application and management, and continued communication and project assessment services. Clearpoint Chemicals sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 20-12274) on Sept. 29, 2020. At the time of the filing, the Debtor estimated assets of between $10 million and $50 million and liabilities of the same range. Judge Jerry C. Oldshue oversees the case. The Debtor tapped Silver, Volt & Garrett as its bankruptcy counsel and R. Tate Young, Esq., an attorney practicing in Houston, as its special counsel. CLEARPOINT CHEMICALS: UMB Capital Opposes to Disclosure Statement ----------------------------------------------------------------- UMB Capital Finance, a division of UMB Bank, N.A., objects to the Disclosure Statement filed by debtor Clearpoint Chemicals, LLC. UMB says that the information in the Disclosure Statement is inadequate for the following reasons, which are specific to UMB but have broader impact on the treatment of other creditors and on the feasibility of the Debtor's Plan of Reorganization: * The Disclosure Statement makes reference to the financing relationship between UMB and the Debtor, but neither the Disclosure Statement nor the Plan indicates whether the Debtor plans to continue the UMB relationship on a post-confirmation basis. * Other than historical references to UMB in Section 3 of the Disclosure Statement, nothing in either the Disclosure Statement or the Plan addresses: the post-confirmation relationship between UMB and the Debtor; the treatment of UMB's claim; or the assumption or rejection of the executory financing contracts by and between UMB and the Debtor. * Article 4 of the Disclosure Statement and Article 7 of the Plan address the assumption and rejection of executory contracts. UMB's agreements with the Debtor are not identified as being assumed. * UMB has learned that the Debtor wishes to continue financing its invoices through UMB post-confirmation. However, nothing in the Disclosure Statement or the Plan addresses the Debtor's intention. * So as to provide creditors with sufficient information, the Debtor should make clear and unequivocal disclosures regarding its intentions with respect to UMB's treatment under the Plan and the Debtor's post-confirmation financing arrangements with UMB. A full-text copy of UMB's objection dated Feb. 16, 2021, is available at https://bit.ly/37sfPZQ from PacerMonitor.com at no charge. Attorneys for UMB Capital: MAYNARD, COOPER & GALE, P.C. Evan N. Parrott 11 North Water Street RSA Battle House Tower Suite 24290 Mobile, AL 36602 Tel: (251) 432-0001 E-mail: eparrott@maynardcooper.com - and - STINSON LLP Benjamin J. Court 50 South Sixth Street Suite 2600 Minneapolis, MN 55402 (612) 335-1500 benjamin.court@stinson.com About Clearpoint Chemicals Clearpoint Chemicals, LLC, operates in the specialty chemical services industry. It develops customer-specific chemical solutions, provides in-house last-mile logistics, and delivers on-site application and management, and continued communication and project assessment services. Clearpoint Chemicals sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 20-12274) on Sept. 29, 2020. At the time of the filing, the Debtor estimated assets of between $10 million and $50 million and liabilities of the same range. Judge Jerry C. Oldshue oversees the case. The Debtor tapped Silver, Volt & Garrett as its bankruptcy counsel and R. Tate Young, Esq., an attorney practicing in Houston, as its special counsel. COMCAR INDUSTRIES: Has $1.62-Mil. Wind-Down Budget -------------------------------------------------- Comcar Industries, Inc., et al., on Jan. 19, 2021, filed an Amended Combined Disclosure Statement and Chapter 11 Plan of Liquidation. A hearing to consider the adequacy of the Disclosure Statement on a final basis and confirmation of the Plan will be held on March 10, 2021, at 10 a.m. (Eastern Standard Time) before the Honorable Laurie Selber Silverstein. The Plan provides for the creation of a post-confirmation Liquidating Trust to hold and administer certain Liquidating Trust Assets, and distribute the proceeds therefrom to the Holders of certain Allowed Claims. In advance of the hearing on confirmation of the Plan, the Debtors filed a plan supplement, containing a form of liquidating trust agreement, a form of wind-down trust agreement and the wind-down budget. The Wind-Down Budget provides: Wind-Down Items Amount --------------- ------ Cherry Bekaert Fees $95,000 Wind Down Trust Tax Returns 40,000 Tax Contractor Assistance 10,000 Iron Mountain Document Retention/ Destruction Est. 96,000 Final MOR Cost (FTI and RGP) 25,000 Wind Down Trustee Estimated Fees 250,000 Counsel Estimated Fees 200,000 Insurance 20,000 FranchiseTaxes 110,000 Property Taxes 125,000 Other Costs 150,000 Est. 503(b)(9)/Priority/Priority Tax Claims 500,000 --------- Total 1,621,000 A copy of the Plan Supplement filed Feb. 19, 2021, is available at https://bit.ly/3bnRF41 About Comcar Industries Comcar Industries -- https://comcar.com/ -- is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel, FTI Consulting, Inc. as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc. is the claims agent. * * * On June 25, 2020, the Bankruptcy Court entered orders authorizing the Debtors to (i) sell substantially all of the assets of CT to Bulk Transport Company, East, Inc., (ii) sell substantially all of the assets of CTL to Adams Resources & Energy, Inc., and Service Transport Company, and (iii) sell the MCT assets to Contract Freighters, Inc. On Sept. 4, 2020, the Court entered an order authorizing the sale of substantially all of CCC's assets to Bulk Transport Company East, Inc. COMMUNITY HEALTH: Board Elects Kevin Hammons as President, CFO -------------------------------------------------------------- The Board of Directors of Community Health Systems, Inc. elected and appointed Kevin J. Hammons, 55, to the position of president and chief financial officer of the Company. Mr. Hammons previously served as executive vice president and chief financial officer of the Company. The Company did not enter into or amend any compensatory or other plan, contract or arrangement with Mr. Hammons in connection with his appointment. Compensation Arrangements On Feb. 16, 2021, the Board, upon recommendation of the Compensation Committee of the Board, met and approved the following compensation arrangements for 2021 for the Company's named executive officers, as reflected in the Company's definitive proxy statement for its 2020 annual meeting of stockholders. 2021 Cash Incentive Compensation The Board approved performance goals for the Named Executive Officers for fiscal year 2021 under the Company's 2019 Employee Performance Incentive Plan with target opportunities as follows (expressed as a percentage of base salary): Name and Position Target Opportunity ----------------- ------------------ Wayne T. Smith, 225% Executive Chairman of the Board of Directors Tim L. Hingtgen 225% Chief Executive Officer Kevin J. Hammons 125% President and Chief Financial Officer Lynn T. Simon, M.D. 115% President of Clinical Operations and Chief Medical Officer Benjamin C. Fordham 115% Executive Vice President, General Counsel and Assistant Secretary In addition, each Named Executive Officer will have the opportunity to achieve an additional percentage of his or her base salary for the attainment of specific non-financial performance improvements up to a maximum of an additional 40% for Mr. Smith and Mr. Hingtgen; 25% for Mr. Hammons; and 10% for Dr. Simon and Mr. Fordham. Each Named Executive Officer will also have the opportunity to achieve an additional percentage of his or her base salary for overachievement of Company-level goals up to a maximum of an additional 35% for Mr. Smith and Mr. Hingtgen, and an additional 25% for Mr. Hammons, Dr. Simon and Mr. Fordham. The payments made to the Company's 2020 named executive officers under the Cash Incentive Plan in respect of fiscal 2020 incentive compensation targets will be set forth in the definitive proxy statement to be filed by the Company in connection with the Company's 2021 annual meeting of stockholders. 2021 Base Salaries The Board approved the following base salary amounts for the Named Executive Officers for fiscal year 2021: Name and Position 2021 Base Salary ----------------- ---------------- Wayne T. Smith $1,000,000 Executive Chairman of the Board of Directors Tim L. Hingtgen, Chief Executive Officer $1,200,000 Kevin J. Hammons, $700,000 President and Chief Financial Officer Lynn T. Simon, M.D. $625,000 President of Clinical Operations and Chief Medical Officer Benjamin C. Fordham $625,000 Executive Vice President, General Counsel and Assistant Secretary Long-Term Incentive Compensation – Equity Awards Pursuant to the Company's Amended and Restated 2009 Stock Option and Award Plan, the Board approved the following equity grants to the Named Executive Officers, effective March 1, 2021: Performance- Non-Qualified Time Vesting Based Stock Options Restricted Restricted Name Stock Stock ---- ------------- ----------- ----------- Wayne T. Smith 90,000 90,000 180,000 Tim L. Hingtgen 100,000 100,000 200,000 Kevin J. Hammons 75,000 75,000 150,000 Lynn T. Simon, M.D. 40,000 40,000 80,000 Benjamin C. Fordham 26,250 26,250 52,500 The number of performance-based restricted shares granted to each Named Executive Officer is subject to the attainment of certain performance objectives during the three-year period beginning Jan. 1, 2021 and ending Dec. 31, 2023, with the ultimate number of shares vesting in respect of such awards after such three-year period ranging from 0% to 200% of the shares set forth above based on the level of achievement of such performance objectives. Both the non-qualified stock options and the time-vesting restricted stock vest ratably over three years, beginning on the first anniversary of the grant date. About Community Health Systems Inc. Community Health Systems, Inc. -- http://www.chs.net-- is a publicly traded hospital company and an operator of general acute care hospitals in communities across the country. The Company, through its subsidiaries, owns, leases or operates 85 affiliated hospitals in 16 states with an aggregate of approximately 14,000 licensed beds. The Company's headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol "CYH." Community Health reported net income attributable to the Company's stockholders of $511 million for the year ended Dec. 31, 2020, compared to a net loss attributable to the Company's stockholders of $675 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $16.01 billion in total assets, $17.06 billion in total liabilities, $484 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $1.54 billion. * * * As reported by the TCR on Dec. 29, 2020, S&P Global Ratings raised its issuer credit rating on Community Health Systems Inc. to 'CCC+' from 'SD' (selective default) and raised its rating on the company's unsecured debt due 2028 to 'CCC-' from 'D'. S&P said the company's recent financial transactions have improved its maturity profile and lowered interest costs. In November 2020, Fitch Ratings affirmed the Long-Term Issuer Default Ratings (IDR) of Community Health Systems, Inc. (CHS) and subsidiary CHS/Community Health Systems, Inc. at 'CCC'. COMMUNITY INTERVENTION: $11.85M Sale of All Futures Assets Approved ------------------------------------------------------------------- Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the District of Massachusetts authorized Community Intervention Services, Inc., South Bay Mental Health Center, Inc., and Futures Behavior Therapy Center, LLC, to sell substantially all of Futures' assets that it utilized in operating its assets, to FBTC Transitional Sub, LL or its eligible designee for $11.85 million, subject to certain adjustments. The Sale Hearing via Zoom was held on Feb. 16, 2021, at 12:30 p.m. The Debtor designated the bid of Little Leaves Early Learning Therapy and Program, Inc. as the second best offer to acquire the Assets, which Back-Up Bid is embodied in Back-Up Bidder's pre-Auction asset purchase agreement constituting its initial Qualified Bid as deemed modified to reflect the Back-Up Bidder's last Auction bid of $12.1 million. The Sale to the Winning Bidder pursuant to the APA is authorized under Section 363(b) of the Bankruptcy Code. The Assets (including the Assumed Contracts) will be transferred to the Winning Bidder upon and as of the Closing and such transfer will constitute a legal, valid, binding and effective transfer of such Assets and, upon the Debtor's receipt of the Purchase Price, will be free and clear of all Encumbrances, except for the Assumed Obligations and Permitted Liens under the APA. Upon the Closing, the Winning Bidder will take title to and possession of the Assets subject only to the Assumed Obligations and Permitted Liens. Upon the Closing Date, and except as otherwise provided in the Order or in the APA, the Winning Bidder will not bear liability for any liability or other obligation of the Debtor arising under or related to any of the Assets. Subject to and conditioned on the Closing, the Debtor is authorized pursuant to Section 365(a) of the Bankruptcy Code to assume and assign the Assumed Contracts to the Winning Bidder. The proceeds of the Sale will be paid on the Closing Date for distribution as follows: (i) first, the Winning Bidder will pay the Payment Amount to those certain individual or entities identified on the Payment Schedule, (ii) second, the Winning Bidder will pay the D&P Escrow Amount (or, if and to the extent approved by the Court prior to the Closing Date, the D&P Fee), and (iii) third, the remaining proceeds from the Sale will be remitted at the Closing to Agent in partial satisfaction of the Prepetition Secured Parties' secured claims, which are described more fully in the Final Cash Collateral Order and Agent's Proof of Claim. The Debtor and the Winning Bidder may request, and upon reasonable request the Court will enter, a Confirmatory Order, confirming the authorized sale of any specified Assets to the Winning Bidder pursuant to the APA and the Order, or otherwise clarifying or confirming with particularity any matter addressed by the Order, including without limitation as may be reasonably necessary or desired for purposes of establishing or recording evidence of title to specific Assets. The Order is a final order and is enforceable upon entry and to the extent necessary under Bankruptcy Rules 5003, 9014, 9021, and 9022. The Court expressly finds that there is no just reason for delay in the implementation of the Order and expressly directs entry of judgment as set forth herein and the stays imposed by Bankruptcy Rules 6004(h), 6006(d), and 7062 are modified and will not apply to the Order or to the transactions contemplated by the APA. A copy of the Agreement is available at https://tinyurl.com/1642jl4a from PacerMonitor.com free of charge. About Community Intervention Services, Inc. Community Intervention Services, Inc. sought Chapter 11 protection (Bankr. D. Mass. Case No. 21-40002EDK). The case is being jointly administered with the bankruptcy cases of its affilliates Community Intervention Services Holdings, Inc., Futures Behavior Therapy Center, LLC, and South Bay Mental Health Center, Inc. COMMUNITY INTERVENTION: To Submit Proposed Order on Sale of Assets ------------------------------------------------------------------ Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the District of Massachusetts ordered the Counsel to Community Intervention Services, Inc., South Bay Mental Health Center, Inc., and Futures Behavior Therapy Center, LLC, to submit a proposed order granting the Debtors' sale of substantially all of Futures' assets it utilized in operating its assets, to FBTC Transitional Sub, LL or its eligible designee for $7.5 million, subject to certain adjustments, free and clear or liens, claims, and interests, subject to overbid. A hearing on the Motion was held on Feb. 16, 2021. The Motion is granted. The Counsel will submit the proposed order to EDK@mab.uscourts.gov, in Word format, memorializing the remarks made during the hearing held. About Community Intervention Services, Inc. Community Intervention Services, Inc. sought Chapter 11 protection (Bankr. D. Mass. Case No. 21-40002EDK). The case is being jointly administered with the bankruptcy cases of its affilliates Community Intervention Services Holdings, Inc., Futures Behavior Therapy Center, LLC, and South Bay Mental Health Center, Inc. COMSTOCK RESOURCES: Fitch Rates Eight-Year Unsecured Notes 'B+' --------------------------------------------------------------- Fitch Ratings has assigned a 'B+'/'RR3' rating to Comstock Resources Inc.'s (CRK) eight-year senior unsecured notes. Proceeds are intended to refinance a portion of the senior unsecured notes due 2025 and 2026. The rating Outlook is Positive. Comstock's rating reflects the company's position as the largest producer of natural gas in the Haynesville Shale Basin, its industry low operating and drilling cost structure, the company's ability to generate positive FCF under base and strip pricing assumptions, relatively low differentials due to its proximity to the Henry Hub and its deep drilling inventory. In addition, CRK took actions in 2020 to materially enhance liquidity by refinancing revolver borrowings. This is offset by the company's modestly higher leverage relative and less robust hedging program relative to its peers. The Positive Outlook reflects Fitch's expectation of positive FCF, which would be applied to reduce debt and lead to improved credit metrics over the next 12-18 months. KEY RATING DRIVERS Low Cost Operator: Comstock has one of the lowest operating cost structures among its natural gas peers due to its low lease operating costs and gathering and transportation costs. Fitch believes the company's scale in the Haynesville will allow CRK to further reduce gathering and transportation costs as current contracts lapse. In addition, margins are similar to some of the best Permian oil-based operators, as CRK's proximity to Henry Hub allows the company to achieve minimal differentials and premium pricing for its natural gas. Drilling costs have also declined over time as the company has achieved scale through acquisitions. Fitch anticipates further drilling cost reductions in the current low commodity price environment. Improving Liquidity: Comstock issued $800 million of senior unsecured notes in 2020 and used proceeds primarily to refinance bank debt. Overall liquidity improved to $930 million from $166 million and usage on the revolver was reduced to 36% from 89%. The proposed note issuance helps to materially address unsecured maturities in 2025 and 2026, which combined with additional refinancings, should help to extend the maturity of the revolver that is due in 2024. Largest Haynesville Producer: Following the acquisition of Covey Park in 2019, Comstock is now the largest producer in the Haynesville shale basin. The scale provides for significantly lower operating, gathering and transportation, and drilling costs. The Haynesville is located close to the Henry Hub and other major natural gas buyers, which provides for lower differentials and higher realized gas prices. Comstock has approximately 1,953 net drilling locations in the Haynesville with 73% of the locations with laterals greater than 5,000 feet. Approximately 93% of the acreage is held by production, and the company operates 91% of its position. The basin also benefits from favorable differentials owing to its proximity to the Henry Hub and Gulf Coast, lower midstream costs and deep inventory. FCF Despite Low Prices: Fitch believes Comstock can generate FCF in its Base and Strip case scenarios, which reflect historically low commodity prices, given its low operating and drilling cost structure. The company is currently operating six rigs, down from nine upon closing the Covey Park acquisition, with 2021 developmental capex expected in the $510 million-$550 million range leading to low single-digit growth over the next several years. Fitch believes this number is conservative given that oilfield service costs are rapidly declining as those providers are scrambling for business. The certainty of the FCF over the next two years is enhanced by the company's hedging program. Solid Hedging Program: Comstock aims to hedge approximately 50%-60% of its forward 12-month gas production. The company has hedged approximately 65% of its 2021 expected production at an average price floor of $2.51 with 39% of its 2021 hedges in the form of collars. Preferred No Equity Credit: Fitch does not apply its Corporate Hybrids Treatment and Notching Criteria as the new preferred stock will be held by existing equity investors, or affiliates. Instead, Fitch uses its Corporate Rating Criteria on applying equity credit for shareholder and affiliated loans. The preferred stock contains a provision for a mandatory cash redemption upon a change of control. As a result, Fitch is not allowing equity credit for the preferred stock. KEY ASSUMPTIONS -- Base case West Texas Intermediate (WTI) oil prices of $42 in 2021, $47 in 2022, and long-term price of $50; -- Base case Henry Hub natural gas price of $1.85 in 2020, $2.45 in 2021, $2.45 in 2022, and long-term price of $2.45; -- Production growth of 11% in 2021 and mid-single digit growth throughout the forecasted period; -- Five to six-rig program resulting in capex of $543 million in 2021. Capex increasing to approximately $600 million for the remainder of the forecasted period; -- No incremental acquisitions, divestitures or equity issuance. Any FCF is assumed to be used to reduce debt. Fitch expects the company to be a consolidator but is not projecting any acquisitions given current industry and capital markets environment. RECOVERY ASSUMPTIONS: The recovery analysis assumes that Comstock Resources would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach Comstock's GC EBITDA assumptions reflects Fitch's projections under a stressed case price deck, which assumes Henry Hub natural gas prices of USD1.65 in 2021, USD2.00 in 2022 and USD2.25 in 2023. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation (EV). The GC EBITDA assumption uses 2023 EBITDA, which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. The model was adjusted for reduced production and varying differentials given the material decline in the prices from the previous price deck. An EV multiple of 3.75x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of the multiple considered the following factors: -- The historical case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.6x and median of 6.1x; -- Comstock's $2.2 billion acquisition of Covey in 2019 had an approximate EBITDA multiple of 4.0x. Given that Comstock is the only consolidator in the basin, Fitch believes higher multiples are unlikely; -- No value is assigned for the Bakken assets as there are no plans for further drilling and the wells are being run down. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch considers valuations such as SEC PV-10 and M&A transactions for each basin including multiples for production per flowing barrel, proved reserves valuation, value per acre and value per drilling location. The senior secured revolver is expected to be fully drawn given the current draw. The revolver is senior to the senior unsecured bonds in the waterfall. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' recover for the senior secured revolver ($1.4 billion) and a recovery corresponding to 'RR3' for the senior unsecured notes ($2.3 billion pro forma for the notes offering). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Executable plan to enhance liquidity greater than $500 million through application of FCF, asset sales or equity to reduce the revolver; -- Demonstrated execution of generating positive FCF; -- FFO increasing above $850 million; -- Mid-cycle Gross Debt/EBITDA below 3.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A change in terms of financial policy that is debt holder unfriendly, including not applying a material portion of FCF to debt reduction; -- Inability to enhance liquidity over next 12-18 months; -- Material reduction in the borrowing base that further limits liquidity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Improving Liquidity and Runway: Comstock had $30 million of cash on hand and availability under its $1.4 billion revolver of $900 million as of Dec. 31, 2020. In addition, Fitch anticipates the company will generate positive FCF over the next several years, with proceeds to be used to further reduce the revolver. Comstock's next maturity is the revolver in 2024, followed by two senior note maturities with $244 million due in 2025 and $1,326 million due in 2026 with both amounts pro forma for the note issuance. The revolver has two financial covenants: a leverage ratio of less than 4.0:1.0 and a current ratio of at least 1.0:1.0. The company complied with both as of Dec. 31, 2020. Although Comstock has been acquisitive, the financing structure of the acquisitions has been conservative with strong equity components to lighten the debt load. Fitch's expectation is that Comstock will continue to be a consolidator of the Haynesville basin but will limit the leverage component given the lack of access to debt capital markets and material draw on the revolver. 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. COMSTOCK RESOURCES: S&P Assigns 'B' Rating on New Sr. Unsec. Debt ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '4' recovery rating to U.S.-based natural gas producer Comstock Resources Inc.'s new senior unsecured debt offering. The '4' recovery rating indicates its expectation for average (30%-50%; rounded estimate: 40%) recovery in the event of a default. S&P said, "We expect the company will primarily use the proceeds from this offering to fund a tender for a portion of its existing notes due 2025 and 2026 (with priority given to the shorter-dated paper). The refinancing will reduce Comstock's cost of debt capital and extend part of its maturity profile to 2029. We do not expect the transactions to materially affect our forecast financial metrics for Comstock, thus our 'B' issuer credit rating and stable outlook on the company are unchanged." CONTINENTAL COIFFURES: Amended Small Business Plan Due March 19 --------------------------------------------------------------- In the chapter 11 case of Continental Coiffures Ltd., a Confirmation Hearing was held on the Chapter 11 Sub-Chapter V Plan dated Dec. 28, 2021, and the Objection filed by Sub-Chapter V Trustee on Feb. 18, 2021. On Feb. 19, 2021, Judge Gregory L. Taddonio ordered that: (1) The Plan Confirmation Hearing on Debtor's Chapter 11 subchapter V plan is CONTINUED to April 1, 2021, at 11:00 a.m. via Zoom. (2) On or before March 19, 2021, the Debtor will file an Amended Chapter 11 Plan. About Continental Coiffures Ltd. Continental Coiffures, Ltd., a McMurray, Pa.-based hair and styling salon company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 20-22808) on Sept. 29, 2020. At the time of the filing, Debtor disclosed $100,001 and $500,000 in both assets and liabilities. Jackson Kelly PLLC and Colleran & Company, CPA PC serve as the Debtor's legal counsel and accountant, respectively. CORNUS MONTESSORI: Seeks to Hire RoganMillerZimmerman as Counsel ---------------------------------------------------------------- Cornus Montessori, LLC seeks authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire RoganMillerZimmerman, PLLC as its legal counsel. The firm's services include: (a) preparing and filing the Debtor's schedules, statements of financial affairs, motions and other pleadings required in its Chapter 11 case; (b) advising the Debtor as to its responsibilities under the Bankruptcy Code; (c) evaluating and preparing a plan of reorganization; (d) negotiating with creditors with respect to the Debtor's reorganization efforts; (e) evaluating and, to the extent necessary, objecting to the various claims against the Debtor's estate; (f) reviewing and preparing monthly reports; and, (g) other legal services necessary to administer the Debtor's estate. The firm received an initial retainer in the amount of $30,000. Christopher Rogan, Esq., a principal at Roganmillerzimmerman, will lead the firm in the Chapter 11 proceedings. He will charge $425 an hour for his services. Mr. Rogan disclosed in a court filing that his firm is "disinterested" as that term is defined in Section 101(41) of the Bankruptcy Code. The firm can be reached through: Christopher L. Rogan, Esq. Rogan Miller Zimmerman, PLLC 50 Catoctin Cir NE #333 Leesburg, VA 20176 Phone: +1 703-777-8850 Fax: (703) 777-8854 Email: crogan@RMZLawFirm.com About Cornus Montessori Cornus Montessori owns a Montessori school and daycare business in Chantilly, Va. Cornus Montessori sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case no. 21-10213) on Feb. 11, 2021, listing $50,000 in assets and $100,001 to $500,000 in liabilities. Christopher L. Rogan, Esq. at Roganmillerzimmerman, PLLC, serves as the Debtor's legal counsel. COTY INC: Moody's Completes Review, Retains Caa1 CFR ---------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Coty Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Coty's Caa1 Corporate Family Rating reflects high financial leverage and weak free cash flow, continued weak demand in the company's consumer beauty products, concentration in volatile fragrance and color cosmetic categories, a need for constant innovation driven by portfolio composition, and a global diversification that is skewed toward slower growth mature developed markets. These factors have been exasperated by store closures, reduced store traffic and weak demand amid the coronavirus pandemic. The company's rating is supported by its large scale, its well-recognized brands in several beauty categories, and a strong public commitment to reducing net leverage to near 5.0x. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. CRED INC: Former CFO Fights Court Ruling to Keep Chapter 11 Alive ----------------------------------------------------------------- Law360 reports that the former chief financial officer (CFO) of bankrupt cryptocurrency investment firm Cred Inc. on Feb. 19, 2021, told a Delaware bankruptcy court he will appeal both an order blocking him from transferring cryptocurrency and the denial of his motion to dismiss part of the Chapter 11 case. James Alexander filed a notice of appeal with the court saying he intends to challenge U.S. Bankruptcy Court Judge John Dorsey's decisions to reject his claim to be the sole person authorized to take a Cred subsidiary into Chapter 11 and grant a request by the unsecured creditors' committee for a restraining order barring him from transferring cryptocurrency. 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. The committee tapped McDermott Will & Emery LLLP as counsel and Dundon Advisers LLC as financial advisor. CRED INC: Quinn Emanuel Agrees to Return Most of $350,000 Fees -------------------------------------------------------------- Law360 reports that Quinn Emanuel Urquhart & Sullivan LLP has agreed to return most of a $350,000 postpetition payment by bankrupt cryptocurrency venture Cred Inc., originally reported as having been issued as legal fee advancements for the debtor's former general counsel. Under the agreement reached between the law firm, Cred and its official committee of unsecured creditors, Quinn will retain $33,500. Along with the return, the parties agreed to releases of claims and a reservation of rights regarding claims or potential actions against the former counsel, Daniel F. Wheeler. 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://www.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. The committee tapped McDermott Will & Emery LLP as counsel, and Dundon Advisers LLC as financial advisor. D.W. TRIM: May Use Cash Collateral Use Thru March 30 ---------------------------------------------------- Judge Mark Houle of the U.S. Bankruptcy Court for the Central District of California, Riverside Division, granted, in part, D.W. Trim, Inc.'s motion to use cash collateral on an interim basis. The Debtor is authorized to use Cash Collateral for the period from February 15, 2021, through March 30, 2021, pursuant to the terms of a budget. The Debtor is authorized to deviate from the amounts set forth in the budget as follows: As to any category with spending projected to be over $2,000, the Debtor may deviate from the budget by as much as 15% per week and without notice to the secured creditors. As to any category with spending projected to be under $2,000, the Debtor may deviate from the budget by as much as 20% per week and without notice to the secured creditors. The Debtor has identified entities as asserting interests in the cash collateral, including the U.S. Small Business Administration. Should the Debtor believe it necessary to exceed the approved amounts by a greater percentage, the Debtor will need to obtain approval from the SBA only of the proposed variance. If it does not object to the variance within 48 business hours, then the variance will be deemed approved. If the SBA does not approve the proposed variance, then the Debtor may request a hearing on shortened notice regarding the proposed variance. The Debtor may rollover unused costs of goods sold only (and for no other expense category) on a two-week rolling basis by as much as $40,000 per week, or as much as $80,000 in total. For the interim period, the request to approve excess gross revenues to costs of goods sold is denied without prejudice to the Debtor renewing the request at future hearings. As further adequate protection, the secured creditors are granted replacement liens in all post-petition assets of the Debtor, other than avoidance power actions and recoveries. The replacement liens granted to the secured creditors here shall have the same extent, validity and priority (and shall be subject to the same defenses) as were their respective liens and security interests in prepetition collateral. The replacement liens provided shall be deemed valid and perfected with the priority as provided in the Interim Order, without any further notice or act by any party that may otherwise be required under any law. The Interim Order does not affect the power of any party-in-interest to challenge the validity, extent, amount, or nature of the liens, recorded in favor of the secured creditors. The continued hearing will be held on March 30, 2021, at 2 p.m. in Courtroom 303, of the U.S. Bankruptcy Court, Riverside Division. The hearing will be held remotely and interested parties should check the Court's website for instructions on how to appear remotely. The last day for the Debtor to serve and file a supplement to the Motion, including any revised budget for use of cash collateral, is March 2. The revised budget shall contain a breakdown of costs of goods sold. Any written opposition must be filed not later than March 16. The Debtor may file a reply not later than March 23rd and may include revised financial reports on the Debtor's financial condition. The Debtor is authorized to operate its business in the ordinary course of business. A copy of the Interim Order is available at https://bit.ly/3qGCDN3 from PacerMonitor.com. About D.W. Trim, Inc. Riverside, California-based D.W. Trim, Inc. provides labor and materials as a finish carpentry sub-contractor on tract home projects, largely in the Inland Empire. It was incorporated in 2008 and operates its business from a leased office location. Prior to 2008, its principal, Christopher S. De Mint, had worked in the same line of work after a short period of time in college. Its primary focus in construction is on doors and mouldings (crown molding, door casing, baseboards), decorative wall wood treatment, door hardware, bathroom hardware like bars and medicine cabinets, closet shelving. The firm's work is in tract single family residences and not often in other type of construction, e.g. apartments and condominiums. DW employs approximately 19 full-time employees in the field at construction sites, 6 mill employees who cut and package materials for jobs and 9 people in administration, project management and in management. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-10758) on February 15, 2021. In the petition signed by Christopher S. De Mint, as president, the Debtor disclosed up to $10 million in both assets and liabilities. THE FOX LAW CORPORATION, INC. is the Debtor's counsel. DANNY R BARTEL: Can Use Cash Collateral Until Feb. 25 ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Danny R. Bartel, M.D., P.A. to use cash collateral on an interim basis until February 25, 2021. The Debtor may use the alleged cash collateral of Fidelity Bank to pay the budgeted items under the approved 15-Day Budget, with the exception of payments in relation to the category "Legal & Accounting", which payments are subject to court-approved employment of professionals and court approval for the payment of professionals. The Debtor's 15-Day Budget provided for total expenses in the amount of $64,043.51, while its 90-Day Budget provided for total expenses in the amount of $404,137.06. As adequate protection of Fidelity Bank's alleged interest in cash collateral, Fidelity Bank was granted a replacement lien in all existing and after-acquired equipment, inventory and accounts receivable of the Debtor to the extent of the diminution in the value of Fidelity Bank's interest in cash collateral resulting from the Debtor's use of cash collateral. The final hearing on the Debtor's motion to use cash collateral is scheduled on February 24, 2021 at 1:30 p.m. About Danny R. Bartel, M.D., P.A. Danny R. Bartel, M.D., P.A. is a corporation located at 1722 Ninth Street, Wichita Falls, Texas. The Debtor filed its voluntary petition for Chapter 11 on February 9, 2021 (Bankr. N.D. Tex. Case No. 21-40285). The petition was signed by its President, Danny R. Bartel. In its Petition, the Debtor estimated its assets at $0 to $50,0000 and liabilities at $50,001 to $100,000. The Debtor is represented by Craig D. Davis, Esq., at Davis, Ermis & Roberts, P.C. DELL TECHNOLOGIES: Fitch Assigns 'BB+' LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed the ratings for Dell Technologies, Inc. and its wholly owned subsidiaries, including the Long-Term Issuer Default Ratings (IDR) at 'BB+'. Fitch has also revised the Rating Outlook to Stable from Negative. Fitch's actions affect $54.9 billion of total debt, including the undrawn $4.5 billion first-lien senior secured revolving credit facility (RCF). The ratings and Outlook reflect Dell's strengthened credit profile, driven by better than expected operating performance enabling achievement of its debt-reduction targets in each of the past two fiscal years. Fitch believes Dell ended the fiscal year with core leverage (core debt to core EBITDA) below 3.5x and is positioned to trigger Fitch's positive 3.0x core leverage rating sensitivity in the near term if Dell remains focused on using substantially all cash flow for permanent debt reduction. This view excludes likely significant debt reduction in connection with a potential spinoff of VMware, Inc. Fitch expects modest positive revenue growth on average and over the long term for Dell, excluding VMware. Share consolidation and peripherals penetration will drive personal computer (PC) growth, while Dell's large and diversified installed base will moderate cyclical on-premise infrastructure spending growth. Fitch expects stronger than previously forecasted operating performance over the near term, driven by a continuation of coronavirus-driven momentum in PCs through 1H22 and recovering infrastructure spending beginning in 2H22. Fitch expects Dell's profitability and cash flow will moderate from record fiscal 2Q21 and 3Q21 levels, with lower operating expenses and savings initiatives related to the coronavirus normalizing and offsetting the resumption of growth in Dell's higher margin infrastructure businesses. Fitch forecasts Dell's FCF adjusted for the change in finance receivables (excluding VMware) for fiscal 2021 was roughly flat from fiscal 2020 at $4.5 billion. This should also moderate to the $3 billion-$4 billion range through the forecast period, but should provide ample capacity for substantial incremental debt reduction. KEY RATING DRIVERS Deleveraging Remains Focus: Following two consecutive years of more than $5 billion of targeted debt reduction, Dell's previously articulated goal of achieving investment grade (IG) ratings implies further deleveraging through at least some debt reduction. Fitch forecasts $3 billion-$4 billion of Dell adjusted FCF (excluding VMware), providing capacity to meet a portion of the company's roughly $1.5 billion of debt maturities in fiscal 2022. Fitch also anticipates any contemplated spinoff transaction would be accompanied by a dividend sufficient to ensure IG capital structures for both Dell and VMware. PC Outperformance: Fitch expects Dell, along with other top-three PC makers, continuing to take market share from increasingly subscale players as core to Dell's intermediate- to long-term PC growth opportunity. Strengthening sales mix and increasing penetration of peripherals should also enable Dell to outgrow the broader market, despite reaching the end of the Win10 PC refresh cycle. Fitch nonetheless forecasts moderating revenue growth in Dell's PC business following significant outperformance in fiscal 2021, driven by work-from-home dynamics related to the coronavirus. Secular ISG Headwinds: Fitch expects the ongoing consolidation of hardware spending by service providers should result in mature and cyclical growth rates for small- to medium-size business (SMB) and enterprise spending, and thus for Dell's infrastructure solutions group (ISG). Dell's large and diversified installed base should enable modest revenue growth on average, assuming execution on product roadmaps and go-to-market strategies. ISG should begin recovering in fiscal 2022 following two consecutive years of midsingle-digit negative revenue growth as customers digested robust U.S. tax reform-fueled spending during fiscal 2020 and were constrained by the coronavirus in fiscal 2021. Moderating Profitability: Fitch forecasts moderating profitability for standalone Dell due to the normalization of operating expenses following lower variable costs and expense-reduction steps taken at the beginning of the coronavirus pandemic. Fitch expects core EBITDA margins for standalone Dell to decline from a Fitch-estimated 9.4% in fiscal 2021, but to remain in the high single digits with the alleviation of supply constraints and recovering infrastructure sales, which carry higher operating income margins than PCs, in the second half of fiscal 2022. Continued VMware Strength: Fitch expects a continuation of strong operating performance from VMware, driven by robust adoption of the company's full infrastructure stack solutions and growing mix of recurring revenue and cash flow. Software-as-a-service and support revenue increased to three-quarters of the total in fiscal 2021, up from just half roughly a year ago. After stronger than expected coronavirus-driven organic revenue growth in fiscal 2021, VMware should grow by mid to high single digits overall and generate nearly $3 billion of annual FCF by leveraging the company's large and diversified installed base. DERIVATION SUMMARY Dell's 'BB+' rating reflects the company's flexibility to meet aggressive debt-reduction targets on its deleveraging path, with more than $4 billion of adjusted FCF forecast for fiscal 2021. The rating also reflects the company's leadership positions in PCs, which should enable the company and its market-leading peers to grow via share gains from increasingly subscale competitors. Finally, the rating also considers Dell's significant installed base in SMBs through legacy Dell and large enterprises via its acquisition of EMC Corp., which enabled, among other things, strong cross-selling execution across Dell, VMware and Dell's captive finance unit Dell Financial Services (DFS). These factors position Dell's business profile in line with higher rated IT hardware providers, such as Hewlett Packard Enterprise Company (BBB+/Negative). Dell's financial structure strengthened considerably, but remains less conservative than those of competitors. Fitch also assesses the linkage between Dell and 80.4% owned VMware as moderate under Fitch's parent-subsidiary linkage criteria, and therefore equalizes the companies' Long-Term IDRs. VMware is an unrestricted subsidiary in Dell's credit agreements and indentures, and provides for no upstream guarantees, cross-default provisions, or management or Treasury team overlap. While VMware has an independent related party transaction committee in place, Fitch believes the special dividend in fiscal 2019 to consolidate the VMware tracking stock VMware supports Fitch's assessment of moderate linkage and contingent liquidity for Dell. KEY ASSUMPTIONS -- Revenue growth averages in the low single digits through the forecast period with the continuation of PC momentum through the first half of fiscal 2022 and recovery of infrastructure in the second half; -- Profitability moderates in fiscal 2022, but a higher mix of infrastructure sales sustains Dell's standalone core EBITDA margins in the high single digits and roughly flat VMware profit margins; -- The majority of FCF is used for debt reduction through fiscal 2022; -- Excess Dell cash is used for share repurchases and the company manages debt levels to sustain core leverage of 2.5x-3.0x. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Greater than expected debt reduction from FCF, resulting in the expectation core leverage will be sustained below 3.0x and adjusted FCF (adjusted for the change in financing receivables) to debt below 5.0x in the near term; -- Positive revenue growth from profitable market share gains, despite challenging ISG demand dynamics. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Pre-dividend FCF margin sustained below 2%, from lower than anticipated revenue; -- Expectations for core leverage sustained above 3.5x and FCF (adjusted for the change in financing receivables) to debt approaching the high single digits from weaker than expected profitability or lower than anticipated debt reduction. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch believes Dell's liquidity is adequate. As of Oct. 30, 2020, it was supported by $11.3 billion of cash and cash equivalents -- $7.4 billion excluding VMware, the majority of whose cash Fitch considers contingent liquidity. Dell's undrawn $4.5 billion of first-lien senior secured RCF expiring on December 2023 also supports liquidity, as does Fitch's expectation for $3 billion-$4 billion of Dell standalone adjusted FCF. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch applies a maximum allowable debt-to-equity ratio of 3:1 to Dell's financing receivables to allocate a portion of total debt to DFS, which Fitch excludes from measuring core debt. Fitch similarly excludes DFS profitability from total EBITDA to calculate core EBITDA, as well as the change in financing receivables from FFO in calculating adjusted FCF. 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. DESTILERIA NACIONAL: Court Rejects Debtor's Plan & Disclosures -------------------------------------------------------------- Judge Enrique S. Lamoutte Inclan on Feb. 19, 2021, entered a ruling denying confirmation of Destileria Nacional, Inc.'s Chapter 11 Small Business Plan. "Upon Debtor's admittance that the Chapter 11 Small Business plan dated January 13, 2021 cannot be confirmed as no class of creditors has accepted the plan, confirmation of the plan is hereby denied," the judge ruled. Judge Lamoutte also rejected the Debtor's explanatory Disclosure Statement. "The disclosure statement filed by the Debtor (dkt. #147) is not finally approved as it fails to disclose the value of the Debtor's business and fails to address the impact of this court's decision entered on February 5, 2021 concluding that the amounts owed to BPPR are an administrative claim (dkt. #233)." On Feb. 12, 2021, the Court held a hearing to consider two competing plans -- the Plan filed by the Debtor, and the competing plan filed by Miramar Brewing LLC. At the hearing various legal issues and controversies were discussed. The Court on Feb. 19, 2021, issued the minutes of the hearing and incorporated his rulings rejecting the Debtor's Plan and Disclosure Statement. A copy of the Feb. 18 filing is available at https://bit.ly/3ukYzQc The Court has not yet issued an order approving Miramar's Plan. About Destileria Nacional Destileria Nacional, Inc., a beer manufacturer headquartered in Guaynabo, P.R., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-01247) on March 6, 2020. At the time of the filing, the Debtor estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor hired Isabel Fullana-Fraticelli & Asoc. PSC as its legal counsel. DIVERSITECH HOLDINGS: Moody's Rates $487MM First Lien Loan 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to DiversiTech Holdings, Inc., $487 million first lien term loan maturing December 2024 and revolving credit facility expiring in June 2024. There is no effect on the company's existing ratings, including the B3 Corporate Family Rating and B3-PD Probability of Default Rating. The outlook is stable. The first lien term loan proceeds will be used to repay the existing first lien term loan and fund, in conjunction with cash on the balance sheet, two acquisitions within the HVAC sector. Moody's view this transaction as a credit positive since debt maturities are extended and the company further diversifies its product offering. Pro forma for the transaction, Moody's expect year end December 2020 debt to EBITDA to improve to 5.8x reflecting the planned acquisitions and improved company performance. Free cash generation in 2021 and 2022 is expected to be used to fund future acquisitions and reduce debt. The B2 ratings assigned to the proposed first lien term loan and revolver are one notch above the CFR, benefitting from the loss absorption provided by a $120 million second lien term loan maturing in 2025. The Caa2 rating on the company's second lien term loan is not affected by the current transaction. The ratings on the existing first lien term loan and revolver will be withdrawn upon the close of the transaction. Assignments: Issuer: DiversiTech Holdings, Inc. Gtd. Senior Secured Revolving Credit Facility, Assigned B2 (LGD3) Gtd. Senior Secured Term Loan, Assigned B2 (LGD3) RATINGS RATIONALE DiversiTech's B3 CFR reflects high leverage, relatively small scale with revenue near $500 million, and a financial policy that includes acquisitions given the fragmented market in which the company competes. Integration risk is elevated as the company implements a growth through acquisition strategy. DiversiTech's broad parts offering is a benefit that provides a one-stop-shop opportunity for its customers and solid supply source. As a result, the company realizes a high level of reoccurring revenue, given its broad customer base and non-discretionary nature of the HVAC repair and replacement business. Furthermore, the company's limited capital expenditure requirements enable free cash generation that will be allocated toward future acquisitions and debt reduction. The stable outlook reflects Moody's expectation DiversiTech continues to generate organic revenue growth, supplemented by acquisitions, in a disciplined manner. The senior secured term loan is expected to contain certain covenant flexibility for transactions that can adversely affect creditors. The documents governing the company's senior secured term loan give DiversiTech the ability to incur incremental indebtedness so long as after closing: first lien net leverage ratio does not exceed 4.75x (for pari passu indebtedness); and total net leverage does not exceed 6.5x. However, DiversiTech is obligated to prepay loans with 100% of asset sale proceeds. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if debt to EBITDA is expected to be sustained above 6.25x and there is a deterioration in liquidity. The ratings could be upgraded if debt to EBITDA is expected to be sustained below 5.0x and good liquidity is maintained. DiversiTech Holdings, Inc., established in 1971 and headquartered in Duluth, Georgia, is a manufacturer and distributor of engineered components for residential and light commercial heating, ventilation and air conditioning ("HVAC") and refrigeration. With operations across the US, Canada, and U.K., the company provides over 17,000 product SKUs to more than 4,500 customers through a wholesale distribution channel. Since May 2017, DiversiTech has been owned by private equity sponsor Permira Funds. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. DOLE FOOD: S&P Places 'B' ICR on Watch Pos. on Merger Announcement ------------------------------------------------------------------ S&P Global Ratings placed all of its ratings on U.S.-based Dole Food Co., including its 'B' issuer credit rating, on CreditWatch with positive implications. S&P plans to resolve the CreditWatch once the transaction closes and Dole's existing rated debt has been repaid. The CreditWatch placement follows the announcement from fresh produce provider Total Produce PLC that it will be merging with Dole Food under a newly created company, Dole plc. As per the agreement, Total Produce shareholders will receive 82.5% of Dole plc shares, and current Dole majority owners will receive 17.5% of Dole plc shares. S&P said, "The closing of the transaction, which we expect in the second or third quarter of 2021, will be contingent on the combined entity completing an IPO. We expect Dole plc will use target proceeds of $500 million to $700 million to repay Dole's and Total Produce's outstanding debt." S&P said, "We expect leverage at the newly formed entity will be between 3x and 3.5x, significantly lower than Dole's trailing-12-month leverage of 5.4x as of Oct. 3, 2020, because of lower debt levels and a larger EBITDA base. Additionally, we expect the combined entity to benefit from increased scale, greater geographic diversity, and more expansive product offerings compared with standalone Dole Food." DRC III: Seeks Approval to Hire Baird Holm as Special Counsel ------------------------------------------------------------- DRC III, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Nebraska to hire Baird Holm, LLP as their special counsel. The firm's services include: a. advising and assisting the Debtors in determining whether they have causes of action under the Bankruptcy Code and applicable non-bankruptcy law, and prosecuting such actions if it appears that doing so may benefit the Debtors' estate; b. preparing legal papers necessary to address any causes of action; and c. other necessary legal services. The firm will be paid at these rates: T. Randall Wright $395 per hour Brandon Tomjack $335 per hour Jeremy Hollembeak $305 per hour Nick Buda $250 per hour Legal assistants $185 to $200 per hour Associates $190 to $235 per hour The retainer fee is $15,000. Thomas Ashby, Esq., at Baird Holm, disclosed in a court filing that the firm does not have any connection with the Debtor or any of its creditors. The firm can be reached through: Thomas O. Ashby, Esq. Baird Holm LLP 1700 Franam Street, Suite 1500 Omaha, NE 68102-2068 Tel: 402-344-0500 / 402-636-8280 Fax: 402-344-0588 Email: tashby@bairdholm.com About DRC III DRC III and affiliates own and operate the Dismal River Club or DRC in Mullen, Neb. Established in 2006, the DRC has attracted golfers from across the country and around the globe to the hills of Western Nebraska to experience the Debtors' world class hunting, fishing outdoor excursions, lodging amenities, five-star dining, spa services and two highly rated golf courses. It is a vitally important part of the economy of Mullen, Nebraska. DRC III and affiliates filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No. 21-80011) on Jan. 7, 2021. At the time of the filing, DRC III disclosed assets of between $10,000,001 and $50 million and liabilities of the same range. Judge Brian S. Kruse oversees the cases. Turner Legal Group, LLC and Baird Holm, LLP serve as the Debtors' bankruptcy counsel and special counsel, respectively. EASTERDAY RANCHES: Seeks to Hire Bush Kornfeld as Local Counsel --------------------------------------------------------------- Easterday Ranches, Inc. and Easterday Farms seek approval from the U.S. Bankruptcy Court for the Eastern District of Washington to hire Bush Kornfeld LLP as their local counsel. The firm's services include: (a) advising the Debtors of their rights, duties, responsibilities and powers in their Chapter 11 cases; (b) assisting, advising and representing the Debtors relative to the administration of the cases; (c) serving as conflicts counsel in the event a conflict of interest arises in matters where the attorneys at Pachulski Stang Ziehl & Jones LLP cannot provide that representation; (d) attending meetings and conferences and otherwise communicating and negotiating with representatives of creditors and other parties in interest; (e) assisting the Debtors and Pachulski in the formulation, preparation, drafting, negotiating and obtaining approval of a plan of reorganization or liquidation and corresponding disclosure statement; (f) assisting the Debtors in the review, analysis, negotiation and approval of any financing or funding agreements; (g) taking all necessary actions to protect and preserve the interests of the Debtors, their business operations and their bankruptcy estates including, without limitation, the prosecution of actions against third parties; (h) assisting Pachulski to generally prepare legal papers; (i) appearing before the bankruptcy court, appellate courts, and other courts or regulatory bodies; and (j) other legal services. The firm's billing rates for attorneys range from $350 to $565 per hour. Its rates for clerks and paralegals range from $95 to $115 per hour. Thomas Buford, Esq., the firm's attorney who will be handling the cases, charges an hourly fee of $450. As disclosed in court filings, Bush Kornfeld is a disinterested person as defined by Bankruptcy Code Section 101(14). The firm can be reached through: Thomas A. Buford, Esq. Bush Kornfeld LLP 601 Union St., Suite 5000 Seattle, WA 98101 Tel: 206-292-2110 / 206-521-3855 Fax: 206-292-2104 Email: tbuford@bskd.com About Easterday Ranches and Easterday Farms Easterday Ranches, Inc. is a privately held company in the cattle ranching and farming business. Easterday Ranches sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Case No. 21-00141) on Feb. 1, 2021. Its affiliate, Easterday Farms, a Washington general partnership, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 21-00176) on Feb. 8, 2021. The cases are jointly administered under Case No. 21-00141. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Whitman L. Holt oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their lead bankruptcy counsel, Bush Kornfeld LLP as local counsel, and Davis Wright Tremaine LLP as special counsel. T. Scott Avila and Peter Richter of Paladin Management Group serve as restructuring officers. The U.S. Trustee for Region 18 appointed an official committee of unsecured creditors on Feb. 16, 2021. EASTERDAY RANCHES: Seeks to Hire Davis Wright as Special Counsel ---------------------------------------------------------------- Easterday Ranches Inc. and Easterday Farms seek approval from the U.S. Bankruptcy Court for the Eastern District of Washington to hire Davis Wright Tremaine LLP as their special counsel. The Debtors need the firm's legal assistance in responding to government inquiries and investigations, including but not limited to, a subpoena issued by the U.S. Department of Justice. The attorneys who are expected to be principally involved in these cases are Matthew Diggs, Esq., and Mark Bartlett, Esq., who will charge $635 per hour and $790 per hour, respectively. Davis Wright is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Matthew Diggs, Esq. Mark Bartlett, Esq. Davis Wright Tremaine LLP 920 Fifth Avenue, Suite 3300 Seattle, WA 98104-1610 Tel: 206-622-3150 Fax: 206-757-7700 Email: matthewdiggs@dwt.com About Easterday Ranches and Easterday Farms Easterday Ranches, Inc. is a privately held company in the cattle ranching and farming business. Easterday Ranches sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Case No. 21-00141) on Feb. 1, 2021. Its affiliate, Easterday Farms, a Washington general partnership, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 21-00176) on Feb. 8, 2021. The cases are jointly administered under Case No. 21-00141. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Whitman L. Holt oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their lead bankruptcy counsel, Bush Kornfeld LLP as local counsel, and Davis Wright Tremaine LLP as special counsel. T. Scott Avila and Peter Richter of Paladin Management Group serve as restructuring officers. The U.S. Trustee for Region 18 appointed an official committee of unsecured creditors on Feb. 16, 2021. EASTERDAY RANCHES: Seeks to Hire Pachulski Stang as Legal Counsel ----------------------------------------------------------------- Easterday Ranches, Inc. and Easterday Farms seek approval from the U.S. Bankruptcy Court for the Eastern District of Washington to hire Pachulski Stang Ziehl & Jones LLP as their bankruptcy counsel. The firm's services include: (a) advising the Debtors of their rights, duties, responsibilities and powers in their Chapter 11 cases; (b) assisting, advising and representing the Debtors relative to the administration of their cases; (c) attending meetings and conferences and otherwise communicating and negotiating with representatives of creditors and other parties in interest as to matters arising in or related to the cases; (d) assisting the Debtors in formulating, preparing, drafting, negotiating and obtaining approval of a plan of reorganization or liquidation and corresponding disclosure statement; (e) assisting the Debtors in the review, analysis, negotiation and approval of any financing or funding agreements; (f) taking all necessary actions to protect and preserve the interests of the Debtors, their business operations and their bankruptcy estates, including, without limitation, the prosecution of actions against third parties; (g) reviewing, analyzing, evaluating and (where appropriate) filing objections to claims filed or asserted against the Debtors; (h) assisting the Debtors in the review, analysis, negotiation and approval of any transactions as an alternative to confirmation of a plan of reorganization or liquidation; (i) preparing legal papers; (j) appearing before the bankruptcy court, appellate courts, and other courts or regulatory bodies in which matters may be heard in connection with the cases; and (k) other legal services. The firm will be paid at these rates: Richard M. Pachulski $1,595 per hour Alan J. Kornfeld $1,395 per hour Jeffrey W. Dulberg $1,025 per hour Maxim B. Litvak $1,125 per hour Paul J. Labov $1,095 per hour Jason H. Rosell $845 per hour Karen B. Dine $1,195 per hour Benjamin L. Wallen $750 per hour Patricia Jeffries $460 per hour (paraprofessional) The billing rates for the firm's attorneys range from $695 to $1,695 per hour. Clerks and paraprofessionals charge between $375 and $460 per hour. Richard Pachulski, Esq., a partner at Pachulski Stang, disclosed in a court filing 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: Richard Pachulski, Esq. Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd., 13th Floor Los Angeles, CA 90067-4003 Tel: 310-277-6910 Fax: 310-201-0760 Email: rpachulski@pszjlaw.com About Easterday Ranches and Easterday Farms Easterday Ranches, Inc. is a privately held company in the cattle ranching and farming business. Easterday Ranches sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Case No. 21-00141) on Feb. 1, 2021. Its affiliate, Easterday Farms, a Washington general partnership, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 21-00176) on Feb. 8, 2021. The cases are jointly administered under Case No. 21-00141. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Whitman L. Holt oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their lead bankruptcy counsel, Bush Kornfeld LLP as local counsel, and Davis Wright Tremaine LLP as special counsel. T. Scott Avila and Peter Richter of Paladin Management Group serve as restructuring officers. The U.S. Trustee for Region 18 appointed an official committee of unsecured creditors on Feb. 16, 2021. ECOARK HOLDINGS: Julia Olguin Appointed White River CEO ------------------------------------------------------- Julia Olguin was appointed as the chief executive officer of White River Holdings Corp, a wholly owned indirect subsidiary of Ecoark Holdings, Inc. Julia Olguin, 52, had previously served as the executive vice president, Business Development, Trading & Marketing and Strategy, at Meridian Energy Group Inc., an oil and gas exploration and development company, from January 2014 until July 2020. The Company has entered into an employment agreement with Ms. Olguin, effective Feb. 4, 2021. The initial term of the Employment Agreement is three years, subject to automatic renewal for successive one-year terms upon the expiration of the initial term, unless terminated by either party. Pursuant to her Employment Agreement, Ms. Olguin will be paid an annual base salary of $150,000, subject to an automatic increase to $250,000 upon achievement of certain strategic goals as provided for in the Employment Agreement, and will be eligible to earn for each fiscal year a performance bonus of up to 100% of her annual base salary, based on achievement of certain individual and White River performance targets. In addition, Ms. Olguin has received 15,000 Restricted Stock Units of the Company as an inducement to become an employee of White River. The RSUs will vest in equal annual increments over a three-year period with the first portion vesting on Feb. 4, 2022, subject to continued employment on each applicable vesting date and execution of the Company's standard Restricted Stock Unit Agreement. 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 Dec. 31, 2020, the Company had $39.32 million in total assets, $15.46 million in total liabilities, and $23.86 million in total stockholders' equity. EDGEWELL PERSONAL: Moody's Completes Review, Retains Ba3 CFR ------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Edgewell Personal Care Co. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Edgewell's Ba3 Corporate Family Rating reflects the company's challenging industry operating environment. Edgewell will continue to face intense competition from much larger, well diversified competitors in its wet shave, skin care and feminine care businesses. The company's credit profile also reflects its concentration in mature, highly promotional categories that present a strategic growth challenge. Edgewell's credit profile is supported by the company's portfolio of well-known consumer product brands including Schick, Playtex, and Banana Boat. The company also generates good free cash flow. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. ELLINGTON 2021-1: S&P Assigns Prelim B (sf) Rating on B-2 Certs --------------------------------------------------------------- S&P Global Ratings assigned its preliminary ratings to Ellington Financial Mortgage Trust 2021-1's mortgage pass-through certificates. The certificate issuance is an RMBS transaction backed by U.S. residential mortgage loans. The preliminary ratings are based on information as of Feb. 17, 2021. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The pool's collateral composition; -- The credit enhancement provided for this transaction; -- The transaction's associated structural mechanics; -- The representation and warranty (R&W) framework for this transaction; -- The mortgage aggregator, Ellington Financial Inc.; -- The impact that the economic stress brought on by COVID-19 is likely to have on the performance of the mortgage borrowers in the pool and liquidity available in the transaction. S&P Global Ratings believes there remains high, albeit moderating, uncertainty about the evolution of the coronavirus pandemic and its economic effects. Vaccine production is ramping up and rollouts are gathering pace around the world. Widespread immunization, which will help pave the way for a return to more normal levels of social and economic activity, looks to be achievable by most developed economies by the end of the third quarter. However, some emerging markets may only be able to achieve widespread immunization by year-end or later. S&P said, "We use these assumptions about vaccine timing in assessing the economic and credit implications associated with the pandemic. As the situation evolves, we will update our assumptions and estimates accordingly." Preliminary Ratings Assigned Ellington Financial Mortgage Trust 2021-1 Class A-1, $188,702,000: AAA (sf) Class A-2, $13,470,000: AA (sf) Class A-3, $28,324,000: A (sf) Class M-1, $9,442,000: BBB (sf) Class B-1, $6,797,000: BB (sf) Class B-2, $3,777,000: B (sf) Class B-3, $1,258,835: not rated Class A-IO-S, notional(ii): not rated Class X, notional(ii): not rated Class R, not applicable: not rated (i)The preliminary ratings address S&P's expectation for the ultimate payment of interest and principal. (ii)The notional amount equals the loans' stated principal balance. ENERGIZER HOLDINGS: Moody's Completes Review, Retains B1 CFR ------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Energizer Holdings, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Energizer's B1 Corporate Family Rating reflects its concentration in the declining battery category that is facing a slow secular decline as consumer products are increasingly evolving toward rechargeable technologies. The credit profile also reflects high event risk as Energizer has chosen to expand outside of the battery business -- through debt financed acquisitions -- into totally unrelated businesses. The company's high pro-forma financial leverage, following the acquisition of the Spectrum assets in January 2019, also limits financial flexibility to invest and sustain the dividend. Energizer's credit profile is supported by its leading market position in the single use and specialized battery market, and portfolio of well-known brands in the battery and consumer car maintenance segments, and solid operating cash flow. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. ESPORTS USA: Unsecured Creditors to Recover 100% in Plan -------------------------------------------------------- Esports USA Holdings, Inc., filed an Amended Plan of Reorganization on Feb. 19, 2021. The Plan proposes to pay creditors of Esports from new capital raised and revenue from operations. Holders of small non-priority unsecured claims in Class 2 - comprised of unsecured claims that each does not exceed $1,000 - are unimpaired under the Plan. The only Class 2 creditor is Cintas which shall receive a lump sum payment of $527. Holders of other general unsecured claims in Class 3 will be paid in full. The only creditor falling within this class is a claim filed by JP Morgan Chase Bank with respect to a credit card. This class shall receive monthly payments of $500 per month beginning on the Effective Date with a balloon payment of the remaining Allowed Claim on or before Dec. 31, 2022. The Debtor anticipates that unsecured creditors would receive 8% in a liquidation scenario. Holders of equity interests will retain their equity in the Debtor. A copy of the Plan filed Feb. 19, 2021, is available at https://bit.ly/3duOcmV About Esports USA Holdings ESports USA Holdings, Inc., owns and operates Valhalla Esports Lounge, an esports bar and restaurant in Austin, Texas. On Oct. 14, 2020, ESports USA Holdings sought Chapter 11 protection (Bankr. W.D. Tex. Case No. 20-11125). The Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Tony M. Davis is the case judge. The Debtor tapped Barron & Newburger, P.C., led by Stephen W. Sather, Esq., as bankruptcy counsel and Whitley LLP Attorneys at Law as securities counsel. EVANGEL INTERNATIONAL: Wins Court Approval of Reorganization Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas on Feb. 19, 2021, entered an order confirming Evangel International Foods, Inc.'s Second Amended Plan of Reorganization. The Debtor's Plan is confirmed subject to this modification: "The Debtor shall pay the SBA $20,000 by the effective date of the plan (which is the 15th business day following entry of the confirmation order), and then the balance of the SBA loan shall be repaid over a period of 24 months at 3.5% interest." The Debtor on Jan. 26, 2021, filed a Second Amended Plan that proposes to pay general unsecured creditors in full over time. The Bank of America claim is allowed for $14,000 and the Dominion African Food Store claim is allowed for $5,000. Bank of America will be paid in 60 equal monthly payments of $234, and Dominion African Food Store will be paid in 60 equal monthly payments of $84. There will be no interest paid on these claims. The Plan will be funded by the Reorganized Debtor through its future business income. The current management will remain in control. A copy of the Second Amended Plan dated Jan. 26, 2021, is available at https://bit.ly/37vRnXy A copy of the Plan Confirmation Order dated Feb. 19, 2021, is available at https://bit.ly/3bpApLN About Evangel International Foods Evangel International Foods, Inc., filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (Bankr. S.D. Tex. Lead Case No. 20-31480) on March 2, 2020, listing under $1 million in both assets and liabilities. The Debtor tapped Margaret M. McClure as a legal attorney. EXACTUS INC: 3i Agrees to Settle Pending Litigation --------------------------------------------------- Exactus, Inc. entered into a securities purchase agreement with 3i, LP and an institutional investor under which the Investor agreed to purchase and 3i agreed to sell that certain 8% senior secured convertible note dated Nov. 27, 2019 and all of the Company's warrants previously issued to 3i and 3i agreed settle and release all claims asserted against the Company. As a result, 3i agreed to dismissal of all pending litigation against the Company. As a result, the Subsidiary Guaranty, IP Security Agreement and Registration Rights Agreement with 3i were also terminated. In addition, the Company entered into an exchange agreement with the Investor and filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations for Series A Preferred Stock under which the Note in the original principal amount of $750,000 would be exchanged for $500,000 of a new series of the Company's preferred stock designated 0% Series A Convertible Preferred Stock with a stated value of $1,000 per share. The Company authorized the issuance of a total of 1,000 ($1,000,000) of its Series A Preferred for issuance. Each share of Series A Preferred is convertible at the option of the Holder, into that number of shares of the Company's common stock, par value $0.0001 per share) (subject to certain limitations on beneficial ownership) determined by dividing the Stated Value by $0.05 per share, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications or similar transactions that proportionately decrease or increase the Common Stock. The Company is prohibited from effecting the conversion of the Series A Preferred to the extent that, as a result of such conversion, the holder beneficially owns more than 4.99% (which may be increased to 9.99% upon 61 days' written notice to the Company), in the aggregate, of the issued and outstanding shares of the Common Stock calculated immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series A Preferred. Holders of the Series A Preferred shall be entitled to vote on all matters submitted to the Company's stockholders and shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Series A Preferred Stock are convertible, subject to applicable beneficial ownership limitations. The Series A Preferred Stock provides a liquidation preference equal to the Stated Value, plus any accrued and unpaid dividends, fees or liquidated damages. The Series A Preferred can be redeemed at the Company's option upon payment of a redemption premium between 120% to 135% of the Stated Value of the outstanding Series A Preferred redeemed. The Company is not obligated to file a registration statement under the Securities Act of 1933, as amended, with respect to the shares of Common Stock into which Series A Preferred may be converted however the Investor will be deemed to have held the Series A Preferred on the original issue date to 3i for the purposes of the availability of an exemption from registration provided by Rule 144 under the Act. On Feb. 16, 2021 the Company filed a Certificate of Cancellation and Withdrawal with the Secretary of State of the State of Nevada cancelling its previous Certificate of Designation of Preferences, Rights and Limitations for Series A Preferred Stock, all of which has been converted to Common Stock. Unregistered Sales of Equity Securities On Feb. 16, 2021, the Company's board of directors authorized the issuance of up to 1,000 shares of its Series A Preferred. The Company also has offered to its Series B-1 and Series B-2 preferred stock inducements to voluntarily convert preferred shares into the Company's Common Stock and expect to file a Certificate of Cancellation and Withdrawal with the Secretary of State of the State of Nevada cancelling its previous Certificate of Designation of Preferences, Rights and Limitations for Series B-1, B-2, C. D and E Preferred Stock upon conversion or cancellation of all such Series. Strategic Alternatives Committee Formation On Jan. 22, 2021, the Company's Board of Directors formed a Strategic Alternatives Committee, for the purpose of evaluating potential acquisitions, mergers, and other strategic business combinations. The new committee consists of Directors Larry Wert and Julian Pittam, with Mr. Wert serving as its chairman. During January and February 2021, the Strategic Alternatives Committee reviewed various business combination proposals and entered into separate negotiations to acquire two companies with existing business and operations in the electric vehicle industry. Ongoing due diligence is continuing with respect to one of the two companies. As previously reported, on Jan. 22, 2021, the Company's Board of Directors authorized a possible reverse split of its common stock at a ratio of between 1 share for every 40 shares held and 1 share for every 50 shares held, to be determined in the further discretion of the Board. The reverse split is subject to approval by the Company's shareholders unless the number of authorized shares of the Company's capital stock is reduced proportionately in accordance with Nevada law, and may be authorized, if at all, in connection with a recapitalization required in connection with an acquisition or similar event. In connection with a potential acquisition, the Company is continuing its recapitalization efforts through, among other things, cancellation and exchange of existing indebtedness for equity, cancellation of its outstanding series of preferred stock, and a reverse split. Under the terms under discussion for the possible acquisition of a company in the electric vehicle industry, the Company believes that a reverse split of its Common Stock of approximately 1:40 may be authorized by its Board of Directors. About Exactus Exactus Inc. (OTCQB:EXDI) -- http://www.exactusinc.com/-- is a producer and supplier of hemp-derived ingredients and feminized hemp genetics. Exactus is committed to creating a positive impact on society and the environment promoting sustainable agricultural practices. Exactus specializes in hemp-derived ingredients (CBD/CBG/CBC/CBN) and feminized seeds that meet the highest standards of quality and traceability. Through research and development, the Company continues to stay ahead of market trends and regulations. Exactus is at the forefront of product development for the beverage, food, pets, cosmetics, wellness, and pharmaceutical industries. Exactus reported a net loss of $10.22 million for the year ended Dec. 31, 2019, compared to a net loss of $4.34 million for the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $3.11 million in total assets, $5 million in total liabilities, and a total stockholders' deficit of $1.89 million. RBSM LLP, in Henderson, NV, the Company's auditor since 2014, issued a "going concern" qualification in its report dated May 22, 2020, citing that the Company has recurring losses from operations, limited cash flow, and an accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. FARM-RITE INC: Wins Cash Collateral Access Until March 16 --------------------------------------------------------- Judge Jerrold N. Poslusny, Jr. of the U.S. Bankruptcy Court for the District of New Jersey authorized Farm-Rite, Inc. to use cash collateral on an interim basis until March 16, 2021. The Debtor was authorized to use cash collateral with a 20% cushion allowed to the Debtor over and above the amount stated in the Debtor's budget. In addition to the adequate protection granted to secured creditor Farm Credit in the Court's Initial Orders, the Court ordered, among others, that: (a) a report be provided to Farm Credit, as of January 31, 2021, showing the inventory and accounts receivable in the format used by the Debtor and Farm Credit for the Debtor's "Borrowing Base Certificate." The report should have all exhibits and schedules, including accounts receivable report, accounts receivable ageing report, schedule of new units owned, schedule of used units owned, and parts inventory; (b) a replacement perfected security interest under 11 U.S.C. Section 361(2) be granted to the extent that each of Secured Creditors TCFIF, WFCDF, Land Pride-Division of Great Plains Mfg. Inc. and Kubota's cash collateral liens are respectively validated pursuant to further proceedings, to the extent and with the same priority in all of the Debtor's post-petition collateral, and proceeds thereof, that each of TCFIF, WFCDF, Land Pride and Kubota respectively held in the Debtor's pre-petition property, subject to payments due under 28 U.S.C. Section 1930(a)(6); (c) to the extent that adequate protection provided for proves insufficient to protect the interests of each of TCFIF, WFCDF, Land Pride and Kubota in and to the cash collateral, as set forth in the Motion, each of TCFIF, WFCDF, Land Pride and Kubota respectively shall have a super priority administrative expense claim, pursuant to 11 U.S.C. Section 507(a), in the same validity and priority to which they were entitled as of the Petition Date, whether in this proceeding or in any superseding proceeding, subject to payments due under 28 U.S.C. Section 1930 (a)(6). Excluded from this super-priority administrative claim are any causes of action arising under Chapter 5 of the Bankruptcy Code. (d) within 10 days of the entry of the Ninth Interim Order, the Debtor shall produce the unadjusted year to date profit and loss statement through January 31, 2021 to TCFIF, WFCDF, Land Pride, and Kubota; and (e) the Debtor shall provide TCFIF, WFCDF, Land Pride, CNH Industrial Capital America LLC, and Kubota all other reports required by the pre-petition loan documents and any other reports reasonably required by TCFIF, WFCDF, Land Pride and Kubota, as well as copies of the Debtor's monthly United States Trustee Operating Reports. Upon appointment of an Official Committee of Unsecured Creditors, the Debtor shall submit a copy of the monthly United States Trustee Operating Reports to Committee counsel if counsel has been appointed, and until counsel is retained, to the Chairman of the Committee. A final hearing on the Debtor's motion to use cash collateral is set for March 16, 2021 at 11 a.m. The deadline for the filing of objections to the Court's Ninth Interim Order is March 9. About Farm-Rite Inc. Farm-Rite Inc. offers agriculture, construction, commercial irrigation, and commercial landscaping equipment. Bridgeton, N.J.-based Farm-Rite filed for Chapter 11 bankruptcy (Bankr. D.N.J. Case No. 20-19379) on August 7, 2020. The case is assigned to Judge Jerrold Poslusny. Arthur J. Abramowitz, Esq., at Sherman Silverstein Kohl Rose & Podolsky, serves as the Debtor's counsel. The Debtor hired Karpac & Company as an accountant. In its petition, the Debtor estimated $10 million to $50 million in both assets and liabilities. The petition was signed by Donald C. Strang, president. FENCEPOST PRODUCTIONS: March 24 Amended Disclosure Hearing Set -------------------------------------------------------------- On Feb. 12, 2021, debtors Fencepost Productions, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Kansas an Amended Disclosure Statement. On Feb. 16, 2021, Judge Dale L. Somers ordered that: * March 24, 2021, at 2:30 p.m., at 210 United States Courthouse, 444 SE Quincy, Topeka, KS 66683 is the hearing to consider the approval of the amended disclosure statement. * March 22, 2021, is fixed as the last day for filing and serving written objections to the amended disclosure statement. A full-text copy of the order dated Feb. 16, 2021, is available at https://bit.ly/3sdjgvy from PacerMonitor.com at no charge. About Fencepost Productions Fencepost Productions, Inc. -- http://www.fencepostproductions.com/ -- is a designer and distributor of men's, women's, and youth outdoor apparel under its brands Staghorn River, Willow Trails, and Northern Outpost. Fencepost Productions and its affiliates, NPB Company Inc. and Old Dominion Apparel Corporation, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Lead Case No. 19-41545) on Dec. 18, 2019. At the time of the filing, Fencepost Productions was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Dale L. Somers oversees the cases. The Debtor has tapped Mcdowell Rice Smith & Buchanan as its legal counsel and Hovey Williams, LLP, as its special counsel. FF FUND: April 26 & 27 Plan Confirmation Hearing Set ---------------------------------------------------- On Feb. 4, 2021, the U.S. Bankruptcy Court for the Southern District of Florida conducted a hearing to consider approval of the second amended disclosure statement filed by FF Fund I, L.P. and F5 Business Investment Partners, LLC. On Feb. 16, 2021, Judge Laurel M. Isicoff approved the second amended disclosure statement and ordered that: * April 26 and 27, 2021, at 9:30 a.m. via Zoom Video Conference is the hearing to consider confirmation of the plan. * April 12, 2021, is the last day for filing and serving fee applications. * April 12, 2021, is the last day for filing and serving objections to confirmation of the plan. * April 12, 2021, is the last day for filing a ballot accepting or rejecting the plan. * March 17, 2021, is the last day for filing and serving objections to claims. A full-text copy of the order dated Feb. 16, 2021, is available at https://bit.ly/3bsCdmW from PacerMonitor at no charge. Counsel for the Debtors: Paul J. Battista, Esq. Florida Bar No. 884162 Heather L. Harmon. Esq. Florida Bar No. 013192 GENOVESE JOBLOVE & BATTISTA, P.A. 100 SE 2nd Street, 44th Floor Miami, FL 33131 Telephone: (305) 349-2300 Facsimile: (305) 349-2310 About FF Fund FF Fund I, L.P., is a limited partnership that was formed in August 2010. FF Fund's general partner is FF Management. FF Fund's offering documents identified a broad range of investment strategies to achieve its stated objectives of "capital appreciation and current income." FF Fund has 13 subsidiaries and affiliates that FF Management set up and routinely evolved over the roughly 10 years since FF Fund's formation for various accounting, tax, audit, insurance, regulatory, liquidity, operational, and administrative reasons. F3 Real Estate Partners, LLC, was established to invest in real estate primarily from 2011 through 2019. Prior to the CRO's appointment, F3 purchased and then sold a residential complex containing 87 condominium units in West Palm Beach, FL, which sale transaction closed in May 2019. F5 Business Investment Partners, LLC, held and currently owns the majority of the current investments made by FF Fund with monies received from the Limited Partners. The investments made by the F5 consisted mainly of (i) illiquid, non-tradeable privately held shares in early-stage or start-up companies, (ii) minority interests in real estate partnerships, or (iii) unsecured promissory notes. F6 Standard Securities Partners, LLC, held liquid hedge fund investments. The remainder of the subsidiaries had nominal investments. On Sept. 24, 2019, FF Management retained Soneet R. Kapila to manage FF Fund. FF Management was and is controlled by Andrew Franzone. FF Fund I L.P., an investment company based in Miami, Fla., filed a voluntary petition for relief under Chapter 11 of Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the petition signed by CRO Soneet R. Kapila, the Debtor estimated $50 million to $100 million in assets and $1 million to $10 million in liabilities. On Jan. 24, 2020, F5 Business Investment Partners, LLC, an affiliate of FF Fund, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-10996). The case is jointly administered with that of FF Fund. At the time of the filing, F5 Business estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. Chief Judge Laurel M. Isicoff oversees the cases. Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., is serving as the Debtors' legal counsel. No creditors' committee has been appointed in the case. In addition, no trustee or examiner has been appointed. FIELDWOOD ENERGY: Will Pay $2 Mil. to Settle Oil Spill Allegations ------------------------------------------------------------------ Leslie A. Pappas of Bloomberg Law reports that bankrupt offshore oil driller Fieldwood Energy LLC has agreed to pay $2 million to resolve federal criminal allegations related to oil spills in the Gulf of Mexico. The agreement between Fieldwood and the U.S. Attorney's Office for the Eastern District of Louisiana, which still requires bankruptcy court approval, would resolve the company's criminal liabilities over oil spills that occurred in 2015 and 2018. Houston-based Fieldwood will admit that its employees and third-party contractors committed certain crimes, including falsifying inspection records and overriding safety systems, Michael T. Dane, the company's senior vice president and CFO, said in a court declaration Thursday, February 18, 2021. About Fieldwood Energy Fieldwood Energy LLC -- http://www.fieldwoodenergy.com/-- is a portfolio company of Riverstone Holdings focused on acquiring and developing conventional assets, primarily in the Gulf of Mexico region. It is the largest operator in the Gulf of Mexico owning an interest in approximately 500 leases covering over two million gross acres with 1,000 wells and 750 employees. Fieldwood Energy and its 13 affiliates previously sought Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 18-30648) on Feb. 15, 2018, with a prepackaged plan that would deleverage $3.286 billion of funded debt by $1.626 billion. Mike Dane, senior vice president, and chief financial officer signed the petitions. At the time of the filing, Debtors disclosed $1 billion to $10 billion in both assets and liabilities. Judge David R. Jones oversees the cases. The Debtors have tapped Weil, Gotshal & Manges LLP as their legal counsel, Houlihan Lokey Capital, Inc., as an investment banker, and AlixPartners, LLP as financial advisor. Prime Clerk LLC is the claims, noticing, and solicitation agent. The first-lien group has employed O'Melveny & Myers LLP as its legal counsel and Houlihan Lokey Capital, Inc. as its financial advisor. The RBL lenders have employed Willkie Farr & Gallagher LLP as their legal counsel and RPA Advisors, LLC as their financial advisor. The cross-holder group has tapped Davis Polk & Wardwell LLP as its legal counsel and PJT Partners LP as its financial advisor. On Aug. 18, 2020, the Office of the U.S. Trustee appointed a committee of unsecured creditors. Stroock & Stroock & Lavan, LLP, and Conway MacKenzie, LLC serve as the committee's legal counsel and financial advisor, respectively. On Nov. 30, the Committee received approval to hire Mani Little & Wortmann, PLLC as its legal counsel. FIREBALL REALTY: Sargent Buying Manchester Property for $720K ------------------------------------------------------------- Fireball Realty, LLC, asks the U.S. Bankruptcy Court for the District of New Hampshire to authorize the private sale of the real property located at 16 South Willow Street, in Manchester, New Hampshire, to Charles Sargent, Sr. and/or assigns for $720,000 pursuant to the terms of their Purchase and Sale Agreement. A hearing on the Motion is set for March 9, 2021, at 10:00 a.m. The Property consists of a commercial building, said deed is recorded in the Hillsborough County Registry of Deeds in Book 8988, Page 0609. The Debtor believes that the Property is worth approximately $720,000 in its current state. The City of Manchester has the property assessed at $326,600. The Subject Property is the last real property owned by the Debtor. The Debtor owes Primary Bank approximately $720,000. Primary has agreed to accept $720,000 in exchange for releasing the Subject Property from the mortgages that secure the payment of the loan. Primary will release the remaining unsecured amount of its claim for $1. From the beginning of the case, the Debtor intended to sell the Subject Property in the ordinary course of its business. Its title to the Property is encumbered by a real estate tax lien held by the City of Manchester, New Hampshire for unpaid real estate taxes in the approximate amount of $8,400.91 and the past due real estate taxes for 2020, for a total as of Feb. 5, 2021 of $17,319.30 and the Primary Bank liens, which secure the payment of approximately $870,000. The Buyer is an insider with respect to the Debtor; however, in the arms'-length transaction, the Debtor is receiving more than fair market value for the Subject Property. The Contract is a standard New Hampshire Realtor form. The purchase price for the Property is $720,000. It has no contingencies other than (a) good, clear record and marketable title on the closing date; (b) financing by Primary Bank for the amount of $720.000; and (c) the approval of the Court. In the opinion of the Debtor, the Purchase Price exceeds the fair market value of the Property as it sits and the other terms of the Contract are fair, reasonable and generally consistent those prevailing in the marketplace. The Debtor will pay the real estate taxes due City of Manchester and recording fees and expenses estimated to be less than $250. Following payment of real estate taxes and closing costs, the balance of the sale proceeds and escrow funds currently held by Primary Bank will be remitted to Primary Bank for application to the Primary Loans. The Debtor, which is engaged in the business of developing, leasing and selling real residential real estate believes that the Purchase Price is reasonably equivalent to the fair market value of the Subject Property. Primary has agreed to and accepts the terms of the purchase and sale. The Purchase Price will not be reduced by a broker's commission, as no broker brought about the transaction. There are no conditions precedent to the Contract Buyer's obligation to close the transaction other than (a) good, clear record and marketable title; (b) financing by Primary Bank of the total purchase price of $720,000; and (c) the approval of the Court. In the Debtor's business judgment, the other terms of the Contract are fair, reasonable and consistent with those prevailing in the marketplace. Continuing to own the Subject Property will cause the Debtor to incur liabilities for debt service to Primary, insurance premiums, and real estate taxes. The Sale will close within 10 days of the date on which the order approving the Sale becomes final. The Sale proceeds will reduce significantly the Primary debt and the interest accruing thereon. As a result, the Sale is in the best interests of the estate. The Debtor expects the Local Government to consent to the Sale given the fact that any real estate taxes due the Local Government will be paid from the Sale proceeds. Primary has consented to the Sale. A copy of the Agreement is available at https://tinyurl.com/k65cxgh6 from PacerMonitor.com free of charge. About Fireball Realty, LLC Fireball Realty LLC is a real estate agency in Manchester, New Hampshire. The Debtor sought Chapter 11 protection (Bankr. D. N.H. Case No. 19-10922) on June 28, 2019. The Debtor estimated assets and liabilities in the range of $1 million to $10 million. The Debtor tapped William S. Gannon, Esq., at William S. Gannon PLLC as counsel. The petition was signed by Charles R. Sargent, Jr., member. FLEX ACQUISITION: S&P Assigns 'B' Rating on New $1.275BB Term Loan ------------------------------------------------------------------ S&P Global Ratings assigned its 'B' issue-level rating and '3' recovery rating to Flex Acquisition Co. Inc.'s proposed $1.275 billion first-lien term loan (due 2028). The '3' recovery rating indicates its expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default. The company is issuing the $1.275 billion first-lien term loan to fully redeem its remaining 2023 first-lien term loan outstanding ($1.276 billion as of Dec. 31, 2020). The company is also seeking to extend the maturity on its $500 million revolving credit facility to February 2026. S&P views the proposed transaction as debt leverage neutral, given the dollar-for-dollar refinancing. As such, the transaction does not affect its 'B' issuer credit rating and stable outlook on the parent company Flex Acquisition Holdings Inc. Flex Acquisition Holdings is a leading U.S. manufacturer of paper food packaging, plastic, and paper carry bags, institutional can liners, and plastic films, primarily for the grocery, food service, retail, and commercial end markets. The company operates through three segments: plastics (35% of 2019 sales), paper (40%), and Waddington (25%). Flex generated about $3.4 billion in sales and $623 million in adjusted EBITDA for the 12-months-ended Sept. 30, 2020. Financial sponsor The Carlyle Group owns the company. Issue Ratings—Recovery Analysis Key analytical factors -- S&P is assigning its 'B' issue level rating and '3' recovery rating to Flex's proposed $1.275 billion first-lien term loan. The '3' recovery rating indicates its expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default. -- S&P's recovery analysis assumes Flex's underlying business would continue to have considerable value and expects the company would emerge from bankruptcy rather than pursue liquidation in a default scenario. -- S&P's simulated default scenario assumes a payment default in 2024 stemming from deteriorating economic conditions and declining sales volumes on weak end-market demand. At the same time, it assumes competition intensifies and rising raw material costs pressure Flex's margins and cash flows. Furthermore, S&P expects market conditions to limit the company's ability to pass rising input costs to customers. -- Therefore, cash flow would be insufficient to cover its interest expense, required amortization on the term loan, working capital, and maintenance capital outlays. -- Eventually, the company's liquidity and capital resources would become strained to the point it could not continue to operate without filing for bankruptcy. -- S&P assumes Flex would seek covenant amendments on its path to default--resulting in higher interest costs--and higher obligation on its $500 million revolving credit facility, which is 80% drawn. Simulated default assumptions -- Simulated year of default: 2024 -- Emergence EBITDA: $369.6 million -- EBITDA multiple: 5.5x Simplified waterfall -- Net enterprise value (after 5% in administrative costs): $1.9 billion -- Obligor/nonobligor valuation split: 95%/5% -- Collateral value available to first-lien debt claims: $1.89 billion -- Estimated first-lien claim: $2.97 billion --Recovery expectations: 50%-70% (rounded estimate: 60%) -- Value available for unsecured claim: $33.8 million -- Unsecured claim: $1.16 billion --Recovery range: 0%-10% (rounded estimate: 0%) All debt amounts at default include six months of accrued prepetition interest. FLOYD SQUIRES: Liquidating Agent Files Notice on Property Sale -------------------------------------------------------------- Janina M. Hoskins, the Liquidating Agent of the estate of the Floyd E. Squires III and Betty J. Squires, filed with the U.S. Bankruptcy Court for the Northern District of California a notice of her proposed sale of the estate's partial interest in the real property located at 1606 Koster Street, in Eureka, California, an improved parcel, to Rory A. Hanson and Jo Ann Hanson Trustees of the Rory and Jo Ann Hanson 2020 Revocable Trust, dated April 21, 2020, or its designee, for $187,500, all cash. Objections, if any must be filed within 21 days of mailing the notice. In the event of a timely objection or request for hearing, the initiating party will give at least seven days written notice of the telephonic hearing to the objecting or requesting party, and to any trustee or committee appointed in the case. The Property generates $975 a month in revenue. The Property is currently vested in the Buyer. The Debtors' scheduled value of the Property at $375,000, with their partial interest valued at $187,500. The Debtors are currently utilizing a portion of the Property to operate their rental business and/or for storage. The Liquidating Agent has been informed that the portion of the Property occupied by the Debtors was, at one time, rented for $1,500 per month. The Debtors have been put on notice that under the terms of Bankruptcy Code Section 542, they are required to turn over the Property to the Liquidating Agent so the Property can be sold. The Debtors have indicated that they will vacate the Property no later than March 15, 2021. If the Debtors do not vacate the Property as indicated, the Trustee will ask the Court, on an ex parte basis, for a turnover of the Property and ask a writ of assistance if required. Based upon written communication between the Buyer and the Liquidating Agent, through her counsel, the Liquidating Agent has agreed to accept the sum of $187,500 in consideration for the purchase of the estate's partial interest in the Property. The Buyer is purchasing the Property on an "as is, where is" basis, with no warranties or representations. The Property, as noted, is occupied. The Liquidating Agent has agreed that the Debtors will be removed from the Property prior to closing of the sale. Any dispute over the terms of the sale agreement will be resolved by the Court. At the time of closing of the sale, the Liquidating Agent will provide a quitclaim deed transferring all right, title and interest of the estate to the Buyer. The Liquidating Agent has concluded that the sale of the partial interest in the Property for the sum of $187,500 to the Buyer is in the best interest of the estate and will avoid what otherwise could be delays, the incurring of expenses to file an adversary proceeding and other potential risks. Absent a sale to a co-owner, the Liquidating Agent would need to pursue an action under Bankruptcy Code Section 363(h) (11 U.S.C. Section 363(h)), asking to allow the sale of the Property. The Property needs repair, and generates inadequate revenue to make necessary repairs and pay all expenses. The Liquidating Agent asks that the order approving this proposed sale of the Property provide as follows: "This Order is effective upon entry, and the stay otherwise imposed by Rule 62(a) of the Federal Rules of Civil Procedure and/or Bankruptcy Rule 6004(h) will not apply." About the Squires Floyd E. Squires, III, and Betty J. Squires filed for chapter 11 protection (Bankr. N.D. Cal. Case No. 16-10828) on Nov. 8, 2017, and are represented by David N. Chandler, Esq. of the Law Offices of David N. Chandler. Janina M. Hoskins was appointed as examiner of the Debtors on April 23, 2018. DENTONS US LLP, led by Michael A. Isaacs, is the examiner's counsel. FLOYD SQUIRES: Liquidating Agent Selling Eureka Property for $188K ------------------------------------------------------------------ Janina M. Hoskins, the Liquidating Agent of the estate of the Floyd E. Squires III and Betty J. Squires, asks the U.S. Bankruptcy Court for the Northern District of California to authorize the sale of partial interest in the real property located at 1606 Koster Street, in Eureka, California, an improved parcel, to Rory A. Hanson and Jo Ann Hanson Trustees of the Rory and Jo Ann Hanson 2020 Revocable Trust, dated April 21, 2020, or its designee, for $187,500, all cash. The Property generates $975 per month in revenue. The Property is currently vested in Rory A. Hanson and Jo Ann Hanson. The Debtors' schedules valued the Property at $375,000, with their half interest valued at $187,500. The Liquidating Agent moves to sell the estate's partial interest in the Property to the Buyer. Subject to Court approval, the Liquidating Agent has agreed to accept an offer from the Buyer for the estate's right, title and interest in the Property for the sum of $187,500, all cash, payable within 14 days of entry of an order approving the proposed sale unless the time period is extended in writing by the Liquidating Agent. Based upon written communication between the Buyer and the Liquidating Agent, through her counsel, the Liquidating Agent has agreed to accept the sum of $187,500 in consideration for the purchase of the estate's right, title and interest in the Property. The Buyer is purchasing the Property on an "as is, where is" basis, with no warranties or representations. The Property is occupied by a tenant that pays $975 per month; the balance of the Property is occupied by the Debtors, who use the space for storage and to run their business. The Debtors pay no rent. Prior to the Debtors' occupancy, their portion of the Property was rented for $1,500 per month. The Liquidating Agent has no obligation to remove the existing tenant other than the Debtors. As described in the Declaration of Michael A. Isaacs in Support of the Motion, the Debtors have been notified that they need to vacate the Property and have agreed to do so. If they fail to vacate as agreed, an ex parte request under Bankruptcy Code Section 542 will be filed. The Debtors have agreed to vacate the Property no later than March 31, 2021. Any dispute over the terms of the sale agreement will be resolved by the Court. The are no consensual liens or encumbrances on the Property. The Liquidating Agent asks that the sale provide that the order is effective upon entry and the stay otherwise imposed under Rule 62(a) of the Federal Rules of Civil Procedure and/or Bankruptcy Rule 6004(h) will not apply. About the Squires Floyd E. Squires, III, and Betty J. Squires filed for chapter 11 protection (Bankr. N.D. Cal. Case No. 16-10828) on Nov. 8, 2017, and are represented by David N. Chandler, Esq. of the Law Offices of David N. Chandler. Janina M. Hoskins was appointed as examiner of the Debtors on April 23, 2018. DENTONS US LLP, led by Michael A. Isaacs, is the examiner's counsel. FREEMAN HOLDINGS: $500K Sale of Springdale Property to Arvest OK'd ------------------------------------------------------------------ Judge Scott M. Grossman of the U.S. Bankruptcy Court for the Southern District of Florida authorized Freeman Holdings, LLC and its affiliates to sell the 11,350 sq. ft. single-story medical office building located at 803 Quandt Ave., in Springdale, Arkansas, 0.4-acre lot, legally described as Lot 30 Block 1, RL Hayes Park Addition, City of Springdale, County of Washington, Parcel No. 815-22544-000, to Arvest Bank for $500,000 credit bid and the reasonable administrative expense claims incurred by the Debtors' estate associated with the sale of the Property. Any remaining objections to the Motion asserted prior to or at the Final Sale Hearing are overruled too. The parties are authorized to immediately close and effectuate the sale of the Property and all transactions set forth therein. The sale is free and clear of all liens, claims, interests or encumbrances of any kind or nature whatsoever. Any liens, claims, interests, or encumbrances which may exist, will attach to the net proceeds of the sale of the Property. The Debtor will immediately serve a copy of the Order pursuant to Bankruptcy Rules 6004(a), and 2002(a)(2) upon: a) the Office of the United States Trustee; b) all creditors of the Debtor; c) all Interest Holders asserting a claim, lien, encumbrance or interest on or in the Debtors' assets; and d) all parties who have requested notices pursuant to Rule 2002. The Court expressly waives the stay requirement enumerated in Federal Rule of Bankruptcy Procedure 6004(h) such that entry of the Order will not be subject to an automatic 14-day stay and such that this Order is effective immediately. About Freeman Holdings Freeman Holdings, LLC, and FWP Realty Holdings, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-15410 and 20-15412) on May 17, 2020. At the time of the filing, the Debtors each had estimated assets of between $500,001 and $1 million and liabilities of between $1 million to $10 million. Judge Scott M. Grossman oversees the cases. Wernick Law, PLLC is the Debtor's legal counsel. On June 25, 2020, the U.S. Trustee said it was unable to appoint an Official Committee of Unsecured Creditors. FREEPORT-MCMORAN INC: Fitch Alters Outlook on BB+ IDR to Positive ----------------------------------------------------------------- Fitch Ratings has affirmed Freeport-McMoRan Inc.'s (FCX) Issuer Default Rating (IDR) at 'BB+'. The Rating Outlook is revised to Positive from Stable. FCX's senior unsecured debt ratings were affirmed at 'BB+'/'RR4'. Fitch has also affirmed the IDR for Freeport Minerals Corporation (FMC) at 'BBB-' with a Stable Rating Outlook, and its senior unsecured debt at 'BBB-'. FCX's Positive Outlook reflect Fitch's expectations that FCF will be generally positive, net debt (excluding noncontrolling interest share of cash) will be about $6.5 billion on average and total debt/operating EBITDA to trend below 2.5x after 2022. The ratings reflect FCX's high-quality assets, strong liquidity and improved capital structure. Substantial advancement of underground mining at Grasberg provides comfort in the remaining ramp-up and cash flows to FCX once their economic interest in PT Freeport Indonesia (PT-FI) drops to about 49% from about 80% beginning in 2023. The cadence and quantum of spending to satisfy the Indonesian smelter requirement are important variables in analyzing future consolidated financial leverage and calls on PT-FI cash flows. An alternative that alleviates PT-FI's need to build a greenfield smelter in Indonesia could be credit positive depending on the treatment and refining charges agreed. The Rating Outlook could be revised to Stable if Fitch expects total debt/EBITDA to be sustained in the 2.3x to 3.0x range on a consolidated basis. KEY RATING DRIVERS Credit Conscious Financial Policies: On Feb. 2, 2021, FCX announced a financial policy to allocate cash flows consistent with its strategic objectives of maintaining a strong balance sheet, increasing shareholder returns and advancing growth opportunities. The policy would be implemented after achieving a net debt target in the range of $3 billion to $4 billion (excluding smelter project debt) and calls for allocating 50% of available cash flows, after planned capex and distributions to noncontrolling interests, to shareholder returns and the balance to debt reduction and investments in growth projects. FCX also announced reinstatement of common dividends at an annual rate of $0.30/share (roughly $437 million per year) with the initial dividend expected to be paid on May 1, 2021. Net debt was $6.1 billion and Fitch estimates total debt/operating EBITDA at 2.7x as of Dec. 31, 2020. Fitch does not expect net debt to reduce further under its rating case but does expect total debt/operating EBITDA to fall to below 2.5x on a consolidated basis after 2022. Fitch views the company's net debt target, strategic objectives and capital allocation policy as supportive of an investment grade financial profile. Grasberg Underground Ramp-up Visibility: In 4Q20, ore extracted and milled from the Grasberg underground mines was 109,300 tonnes per day up 86% from 4Q19 and 4Q20 annualized metals sales from Grasberg underground mining were 68% of post ramp-up targets. FCX expects metals sales to approach 90% of post ramp-up targets by mid-2021. Spending on the project was about $1 billion in 2020 and is guided to $1.3 billion in 2021 and $0.9 billion in 2022 of which PT Indonesia Asahan Aluminum (Inalum) is responsible for contributing $0.2 billion. Fitch believes the projects are substantially de-risked and remaining execution risk is manageable. FCX guides to PT-FI sales volumes of 1.7 billion pounds of copper and 1.8 million ounces of gold in 2023 when FCX's economic interest drops to about 49% from about 80% compared with 0.8 billion pounds of copper and 0.8 million ounces of gold in 2020. Smelter Debt/Capex: PT-FI committed to construct a new smelter in Indonesia by Dec. 21, 2023. The preliminary capital cost for the project was estimated at $3 billion and was expected to be financed with bank loans at the PT-FI level and consolidated at FCX. PT-FI has notified the Indonesian government of delays in achieving completion of the new green field smelter in Gresik as a result of mobility constraints from pandemic mitigation measures. Fitch does not expect the delay to impact PT-FI's ability to have its concentrate export license extended when it expires on March 15, 2021. PT-FI is in discussion with the majority owner of the existing smelter in Gresik, Indonesia (25% owned by PT-FI) to increase concentrate treatment capacity by 30%. Such an expansion would reduce PT-FI's smelter development commitment to 1.7 million tonnes from 2 million tonnes of concentrate per year and likely reduce the capital required. PT-FI would provide the estimated $250 million to finance the expansion and completion would be expected in 2023. Third Party Alternative: PT-FI is also in discussion with a third party to develop new smelter capacity at an alternate location in partnership with PT-FI. This alternative would not require capital from PT-FI and would satisfy the smelter commitment but would require PT-FI to agree to supportive treatment and refining charges. This smelter would provide the third party with sulfuric acid for its nickel operations and potentially some downstream battery operations. Fitch believes this alternative could be credit positive depending on the treatment and refining charges agreed. A decision concerning this option is likely in 1H21. Copper Price Exposure: Copper accounted for 80% of consolidated revenues in 2020. FCX estimates that a $0.10/pound change in the price of copper would change operating cash flow by $380 million in 2021. FCX's average realized price per pound of copper was $2.95 in 2020 compared with $2.73 in 2019. Current spot prices are around $3.76/pound which compares to Fitch's assumptions of $2.72/pound in 2021, $2.81/pound in 2022 and $2.90/pound in 2023 published Aug. 28, 2020. FCX guides to EBITDA of about $8 billion and operating cash flows of $5.5 billion in 2021 based on FCX's volume outlook, estimated unit site production and delivery costs of $1.78/pound of copper and assuming prices of $3.50/pound of copper, $1,850/ounce of gold and $9/pound molybdenum. Favorable Copper Markets: As of Feb. 4, 2021, CRU forecasts the London Metal Exchange (LME) three-month copper price will average $7,500/tonne ($3.40/pound) in 2021, which is $2,500/tonne above cash costs net of by-products for the 90th percentile mine. CRU expects the market will move to surplus during 2022 through 2024 before moving to deficit in 2025. CRU forecast the LME 3-month copper price will average $6,700/tonne ($3.04/pound) in 2022 and $6,875/tonne ($3.12/pound) in 2023. DERIVATION SUMMARY FCX's closest operational peer is Southern Copper Corporation (SCC; BBB+/Stable), given the spread of its copper assets. FCX is less profitable than SCC and expected to have higher leverage in 2021 as underground mining at Grasberg continues to ramp up but would generally have a financial profile consistent with SCC's longer-term. FCX's financial profile is expected to be broadly in line with 'BBB' category peers, beginning in 2022 including Anglo American plc (BBB/Stable), Teck Resources Ltd. (BBB-/Negative), Agnico Eagle Mines Limited (BBB/Stable) and Kinross Gold Corporation (BBB-/Positive). The bulk of debt is at the FCX level or benefits from FCX's guarantees, with the exception of the $525 million Cerro Verde loan (not rated) and any future smelter loan at PT-FI. FMC does not provide upstream guarantees, its notes have no cross-default to FCX debt, and it is lightly levered, with minimal debt (Cerro Verde is consolidated at the FMC level). KEY ASSUMPTIONS Fitch's key assumptions within the Agency's rating case for the issuer include: -- Copper sales at 3.7 billion pounds in 2021 and about 4.2 billion pounds in 2022 and 2023; -- Copper prices at $2.72/lb., $2.81/lb. and $2.90/lb. in 2021, 2022 and 2023, respectively; -- Gold prices at $1,400/oz in 2021 and $1,200/oz, thereafter; -- Unit site cost at $1.88/lb. on average in 2021-2023; -- Capex at FCX guidance in 2021; -- $500 million, and $1 billion of debt financed green field Indonesia smelter expenditure in 2022 and 2023, respectively; -- Dividends and capital allocation as announced on Feb. 2, 2021. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Visibility on cadence and quantum of capex or treatment and refining charge support to satisfy Indonesian smelter requirement; -- Expectations of FFO leverage below 2.8x on a sustained basis; -- Total debt/EBITDA sustained below 2.3x; The Rating Outlook could be changed to Stable if Fitch expects total debt/EBITDA to be sustained in the 2.3x to 3.0x range on a consolidated basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Failure to maintain approval to export concentrate on reasonable terms from Indonesia; -- FFO leverage above 3.5x on a sustained basis; -- Total debt/EBITDA sustained above 3.0x; -- Expectations of negative FCF on average. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Robust Liquidity: Fitch expects roughly $500 million of FCF burn in 2021 before contributions from Inalum. Available cash (net of noncontrolling interest share) was $3.3 billion, and nearly $3.5 billion was available under the revolving credit facility ($10 million utilization for LOCs) at Dec. 31, 2020. Fitch expects smelter spending to be financed at the PT-FI level and for FCF, excluding smelter capex, to be generally positive. Of the $3.5 billion revolver commitment, $3.28 billion matures in April 2024 and the remaining $220 million matures in April 2023. Financial covenants under the revolver include a maximum net debt/EBITDA ratio of 5.25x reverting to 3.75x beginning with the period ending Sept. 30, 2021 once the Covenant Reversion Notice is delivered (required prior to declaring dividends). There is also a minimum interest coverage ratio of 2.25x. Fitch expects the company to comply with its financial covenants under Fitch's rating case. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. FRONTIER COMMUNICATIONS: Seeks Oct. 14 Plan Exclusivity Extension ----------------------------------------------------------------- Debtors Frontier Communications Corporation and its affiliates ask the U.S. Bankruptcy Court for the Southern District of New York, to extend the Debtors' exclusive period to file a plan of reorganization and to solicit acceptances through and including October 14, 2021, and December 14, 2021, respectively. The Debtors have made substantial progress throughout these chapter 11 cases and remain focused on their goal of emerging from chapter 11 prior to the end of the first quarter of 2021. As part of this process, the Debtors have completed the regulatory approval process in seventeen states and with the FCC, with approval pending in one final state. The Debtors have been heavily engaged with their stakeholders throughout these chapter 11 cases and remain focused on working collaboratively to ensure a smooth path to emergence. Also, since the Petition Date, the Debtors have paid their vendors in the ordinary course of business or as otherwise provided by orders of the Court. Moreover, throughout these chapter 11 cases, the Debtors have met their post-petition obligations in the ordinary course. The Debtors are seeking the extension of the Exclusivity Periods, solely out of an abundance of caution in the event that unforeseen issues arise prior to emergence. Maintaining the status quo at this critical juncture is of utmost importance as the Debtors and their stakeholders work toward consummating the Plan, which every impaired creditor class voted to support and accepted. The requested extension is appropriate to protect the value and consensus that has been built by the Debtors and their stakeholders and will not prejudice any parties in interest. A copy of the Debtors' Motion to extend is available from primeclerk.com at https://bit.ly/39X0Qc8 at no extra charge. About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC as financial advisor; and UBS Securities LLC as an investment banker. GALAXY NEXT: Incurs $7.8 Million Net Loss for Quarter Ended Dec. 31 ------------------------------------------------------------------- Galaxy Next Generation, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $7.77 million on $798,793 of revenues for the three months ended Dec. 31, 2020, compared to a net loss of $2.82 million on $876,529 of revenues for the three months ended Dec. 31, 2019. For the six months ended Dec. 31, 2020, the Company reported a net loss of $20.90 million on $1.98 million of revenues compared to a net loss of $4.84 million on $1.50 million of revenues for the six months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $5.62 million in total assets, $13.31 million in total liabilities, and a total stockholders' deficit of $7.68 million. "The pandemic has not had a substantial net impact to our consolidated operating results or our liquidity position so far in fiscal year 2021. However, we have experienced supply chain delays due to the pandemic. In addition, increased product demand has resulted in our increased need for additional funding. We continue to meet our short-term liquidity needs from revenue derived from product sales supplemented with proceeds from issuances of debt and equity, and we expect to maintain access to the capital markets. To date in fiscal year 2021, we have not observed any impairments of our assets or a significant change in the fair value of assets due to the pandemic. We intend to continue to work with our employees and customers to implement safety measures to ensure that we are able to continue manufacturing and installing our products," Galaxy Next said. "However, given the global economic slowdown, and the other risks and uncertainties associated with the pandemic, our business, financial condition, results of operations and growth prospects could be materially adversely affected. The extent to which the COVID-19 pandemic impacts our business, the business of our suppliers and other commercial partners, our corporate development objectives, our ability to access capital and the value of and market for our common stock par value $0.001 per share ... will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States and other countries, and the effectiveness of actions taken globally to contain and treat the disease," Galaxy Next said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1127993/000109181821000020/gaxy02122021form10q.htm About Galaxy Next Generation Headquartered in Toccoa, Georgia, Galaxy Next Generation, Inc. -- http://www.galaxynext.us-- is a manufacturer and distributor of interactive learning technologies and enhanced audio solutions. It develops both hardware and software that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy Next reported a net loss of $14.03 million for the year ended June 30, 2020, compared to a net loss of $6.66 million for the year ended June 30, 2019. As of Sept. 30, 2020, the Company had $5.21 million in total assets, $11.34 million in total liabilities, and a total stockholders' deficit of $6.13 million. Somerset CPAs PC, in Indianapolis, Indiana, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 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. GALLERIA OF ST. MATTHEWS: Case Summary & 15 Unsecured Creditors --------------------------------------------------------------- Debtor: Galleria of St. Matthews, LLC 173 Sears Avenue Suite 180 Louisville, KY 40207 Business Description: Galleria of St. Matthews, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the owner of a fee simple title to a property located at 4101-4127 Oechsli Avenue Louisville, Kentucky valued at $1.75 million. Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court Western District of Kentucky Case No.: 21-30360 Judge: Hon. Charles R. Merrill Debtor's Counsel: Charity S. Bird, Esq. KAPLAN JOHNSON ABATE & BIRD LLP 710 West Main Street Fourth Floor Louisville, KY 40202 Tel: (502) 540-8285 Fax: (502) 540-8282 E-mail: cbird@kaplanjohnsonlaw.com Total Assets: $1,817,376 Total Liabilities: $4,024,374 The petition was signed by Enrique L. Pantoja, manager. A copy of the petition containing, among other items, a list of the Debtor's 15 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FOZAWHI/Galleria_of_St_Matthews_LLC__kywbke-21-30360__0001.0.pdf?mcid=tGE4TAMA GB SCIENCES: Incurs $594K Net Loss for Quarter Ended Dec. 31 ------------------------------------------------------------ GB Sciences, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $593,984 on zero sales revenue for the three months ended Dec. 31, 2020, compared to net income of $984,147 on zero sales revenue for the three months ended Dec. 31, 2019. For the nine months ended Dec. 31, 2020, the Company reported a net loss of $3.25 million on zero sales revenue compared to a net loss of $4.48 million on zero sales revenue for the nine months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $10.25 million in total assets, $12.74 million in total liabilities, and a total stockholders' deficit of $2.49 million. The Company has sustained net losses since inception, which have caused an accumulated deficit of $(100,650,610) at Dec. 31, 2020. The Company had a working capital deficit of $(6,135,112) at Dec. 31, 2020, net of working capital of $969,498 classified as discontinued operations, compared to $(3,884,877) at March 31, 2020, net of working capital of $349,195 classified as discontinued operations. In addition, the Company has consumed cash in its operating activities of $(1,253,180) for the nine months ended Dec. 31, 2020, including $21,098 provided by discontinued operations, compared to $(4,248,291) including $(1,533,341) used in discontinued operations for the nine months ended Dec. 31, 2019. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. "Management has been able, thus far, to finance the losses through a public offering, private placements and obtaining operating funds from stockholders. The Company is continuing to seek sources of financing. There are no assurances that the Company will be successful in achieving its goals. "Furthermore, Management believes the COVID-19 pandemic may have a significant impact on the Company's business. The pandemic presents a risk to the global economy, and it is possible that it could have an impact on the operations of the Company in the near term that could materially impact the Company's financials and ability to continue as a going concern. Management has not been able to measure the potential financial impact on the Company and continues to monitor the impact of the pandemic closely, although the extent to which the COVID-19 outbreak will impact our operations, financing ability or future financial results is uncertain. "In view of these conditions, the Company's ability to continue as a going concern is dependent upon its ability to obtain additional financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern," GB Sciences said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1165320/000143774921002961/gblx20201231_10q.htm About GB Sciences GB Sciences, Inc. seeks to be a biopharmaceutical research and cannabinoid-based drug development company whose goal is to create patented formulations for safe, standardized, cannabinoid therapies that target a variety of medical conditions in both the pharmaceutical and wellness markets. The Company is engaged in the research and development of cannabinoid medicines and plans to produce cannabinoid therapies for the wellness markets based on its portfolio of intellectual property. GB Sciences reported a net loss of $13.11 million for the year ended March 31, 2020, compared to a net loss of $24.68 million for the year ended ended March 31, 2019. As of Sept. 30, 2020, the Company had $14.25 million in total assets, $16.60 million in total liabilities, and a total stockholders' deficit of $2.35 million. Assurance Dimensions, in Margate, Florida, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Aug. 27, 2020, citing that the Company has suffered recurring losses. For the year ended March 31, 2020 the Company had a net loss, had net cash used in operating activities of $4,479,713, and had negative working capital of $3,884,877. These factors raise substantial doubt about its ability to continue as a going concern. GLENROY COACHELLA: Lender Asks Court to Appoint Chapter 11 Trustee ------------------------------------------------------------------ Allison McNeely of Bloomberg News reports that the lender to a bankrupt Coachella hotel project is asking the court to appoint a neutral party to oversee the restructuring amid allegations of fraud and mismanagement, including diverting funds for a cannabis dispensary. Stuart Rubin, manager of Glenroy Coachella, and investor Elliot Lander allegedly induced U.S. Real Estate Credit Holdings III-A LP to provide a $24.4 million construction loan for the luxury hotel, but understated the budget by about $20 million and misused project funds for personal gain, according to the motion filed by the lender, which is managed by Calmwater Asset Management. About Glenroy Coachella Glenroy Coachella LLC is the owner of the unfinished Hotel Indigo Coachella, a lavish hotel development in Coachella, California. Hotel Indigo Coachella was billed as a luxe, 35-acre resort close to the site of Coachella, the famous California music festival. The hotel was to have a DJ stage, catwalk, 10,000-square-foot (3,049 square meter) pool, casitas and 250 guest rooms. Construction on the project began in early 2017 but the project faced delays. Stuart Rubin, manager of the project, has been hit with a lawsuit from his business partner, Gary Stiffelman, for $50 million amid allegations of "incompetence and fraud." Glenroy Coachella sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 21-11188) on Feb. 15, 2021. In the petition signed by Stuart Rubin, manager, the Debtor estimated assets of $50 million to $100 million and debt of $10 million to $50 million. The Hon. Sheri Bluebond is the case judge. WEINTRAUB & SELTH, APC, led by David J. Weintraub, is the Debtor's counsel. GRUPO AEROMEXICO: Shareholders May Get "Very Little or No" Value ---------------------------------------------------------------- Grupo Aeroméxico, S.A.B. de C.V. (BMV: AEROMEX) warned shareholders that they may recoup very little or no value once that the company confirms its restructuring plan in the U.S. "The price of our common stock has been volatile following the commencement of our Chapter 11 process and may significantly decrease in value in the future. Therefore, any trading in our common stock during the pendency of our Chapter 11 process is highly speculative and involves substantial risks to buyers of our stock. Future recoveries in our Chapter 11 process for our shareholders will depend upon our ability to negotiate and confirm a Plan of Reorganization, the terms of such Plan, the recovery of our business from the COVID-19 pandemic and the future value of our assets upon conversion of our liabilities. Although at this stage we cannot predict how our common stock will eventually be treated under a Plan, we believe that it is unlikely that stockholders would receive a recovery through aPlan since it is expected that the holders of unsecured indebtedness will not be paid in full and will need to convert their claims into new stock to be issued by the Company. Consequently, there is a significant risk that our stockholders may receive no recovery, or a nominal recovery, under our Chapter 11 process," the airline said in its Feb. 19 press release. The Company announced in its Feb. 19 press release that as a follow up to its previous relevant events regarding (a) securing the commitment of a US$1,000 million senior secured superpriority multi-tranche debtor in possession term loan facility (the "DIP Facility"), (b) the initial funding of US$100 million of Tranche 1 loans under the DIP Facility, (c) the final approval of the DIP Facility by Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York (the "Chapter 11 Court"), and (d) the second disbursement of the undrawn portion of the Tranche 1 facility (US$100 million) and of the initial funding of US$175 million of Tranche 2 loans, the Company announces that the conditions to drawing the remaining undrawn commitments of the Tranche 2 facility (US$625million) have been met and, accordingly, the Company has requested such final disbursement. Andres Conesa, CEO of Aeromexico, commented: "The funding of the final disbursement is a key milestone in Aeromexico's ongoing, voluntary restructuring process that will provide us with sufficient liquidity to support our continued operations during this time and with the flexibility to continue our orderly restructuring process with the objective of emerging stronger. We recognize and appreciate the continuing support from my fellow co-workers, Board of Directors, authorities and all stakeholders." The Tranche 2 DIP Facility may be converted, at the lenders' option, into shares of reorganized Aeromexico, subject to certain conditions and the applicable corporate and regulatory approvals (including at the Aeromexico's shareholders meeting) for the issuance of the corresponding shares. In order to effectuate (i) the debt-into-equity conversion of the allowed unsecured claims recognized in our Chapter 11 process at a to-be-determined ratio, and (ii) the conversion of the Tranche 2 DIP Facility, the shareholders meeting of the Company would need to approve a capital increase. As it had anticipated, if the lenders exercise the option to convert the Tranche 2 DIP Facility, following the corresponding capital increase, the shareholders will be almost fully diluted so that their remaining equity stake will likely be minimal (if any), provided that shareholders (other than those that have agreed not to exercise preemptive rights pursuant to the Shareholder Support Agreement) will be allowed to exercise their preemptive rights subject to several conditions that are yet to be determined. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. -- https://www.aeromexico.com/ -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Grupo Aeromexico and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. Timothy Graulich, Esq., of Davis Polk and Wardell LLP, serves as counsel to the Debtors. GTT COMMUNICATIONS: Considers Pre-Packaged Chapter 11 to Cut Debt ----------------------------------------------------------------- GTT Communications is reported to be considering a bankruptcy filing to solve its debt woes. Katherine Doherty and Allison McNeely of Bloomberg News report that GTT Communications Inc. is considering filing for bankruptcy with a pre-negotiated restructuring plan to help it trim its more than $3 billion debt load. Bloomberg, citing people with knowledge of the matter, said that the telecommunications company hasn't yet made formal plans but is likely to file for Chapter 11 court protection after it closes the sale of its infrastructure unit later this 2021. The Company has been shifting to the cloud and announced the sale of its infrastructure business to I Squared Capital for $3.15 billion in October 2020. GTT Communications in December announced it has entered into a commitment letter through which certain of GTT's existing lenders and noteholders have committed to providing the company with a new $275 million delayed-draw term loan facility About GTT Communications Based in Tysons, Virginia, GTT Communications Inc. (NYSE:GTT) operates a global communications network, providing telecommunications services to large, multinational enterprises, carriers, and governments across five continents. On the Web: HTTP://www.gtt.net/ GULFPORT ENERGY: Committee Wants Note Claims in Separate Class -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Gulfport Energy Corporation and its affiliated debtors filed on Feb. 16, 2021, an emergency motion for entry of an order determining that classifying notes claims in Class 4A and 4B under the Debtors' RSA Plan is impermissible under 11 U.S.C. Sec. 1122. On Nov. 24, 2020, the Debtors filed their proposed RSA Plan and related Disclosure Statement. The RSA Plan contemplates just two separate classes of general unsecured creditors: (1) Class 4A which includes General Unsecured Claims against Gulfport Parent, and (2) Class 4B, which includes General Unsecured Claims against Gulfport Subsidiaries. The Plan contemplates that general unsecured creditors of the subsidiary debtors will receive the $550 million take-back notes, rights offering subscription rights, and 94% of new common stock of the reorganized Gulfport parent entity, while general unsecured creditors of the parent debtor will receive only 6% of the new common stock. The Notes Claims have agreed to waive recoveries on account of their claims against Gulfport Parent once they receive 94% of the New Common Stock. While the filed version of the Disclosure Statement does not include any estimates of General Unsecured Claims in Classes 4A and 4B, the Committee says information from the Debtors indicates that (i) the Notes Claims of approximately $1.824 billion are estimated to represent essentially the entirety of allowed General Unsecured Claims against the Gulfport Subsidiaries, and (ii) the Debtors currently estimate, in addition to the $1.8 billion in Notes Claims, other General Unsecured Claims against Gulfport Parent of between $350 to $800 million. Thus, if allowed to vote their claims in full, the Notes Claims will constitute approximately 70% to 84% of all voting claims in Class 4A and 100% of the voting claims in Class 4B. According to the Committee, the Debtors' proposed RSA Plan violates the straightforward requirement under Sec. 1122(a), placing notes claims and other general unsecured claims in the same class despite their material differences. Both sets of claims are unsecured, but that is where the similarities end, the Committee says, pointing out that: * Holders of Notes Claims have guaranty claims against the Gulfport Subsidiaries -– other general unsecured creditors do not. * Noteholders are slated to receive both equity (preferred and common) and debt primarily on account of their claims against the subsidiaries -- other general unsecured creditors of the parent will receive only equity, taking priority behind the Noteholders' recoveries. * Members of the ad hoc noteholder group, comprising over two-thirds of the Notes Claims, have agreed to the broad estate and third-party releases contained in the Debtors' RSA Plan -- other general unsecured creditors have not. * Ad Hoc Group members have received material inducements to support the Debtors' RSA Plan in the form of payment of professional fees and participation in the backstop of the Rights Offering and the Rights Offering itself -- other general unsecured creditors have not. "The Debtors' motivations for their classification scheme are transparent: they know that by lumping all general unsecured claims together, the votes of the noteholders that are party to the restructuring support agreement (the "RSA") will almost certainly be sufficient to carry the unsecured creditor classes. This would appear to be an attempt to limit arguments that unsecured creditors not party to the RSA may raise at confirmation. The disenfranchisement of non-noteholder general unsecured creditors, while undoubtedly convenient for the Debtors and the parties to the RSA, is barred by the Bankruptcy Code. Accordingly, before wasting the time and the limited estate resources soliciting a non-confirmable plan, the Committee brings this motion pursuant to Bankruptcy Rule 3013 seeking an order compelling the Debtors to properly classify the claims of non-noteholder general unsecured creditors," Jason L. Boland, Esq., at Norton Rose Fulbright US LLP tells the Court. About Gulfport Energy 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. As of Sept. 30, 2020, Gulfport had $2,375,559,000 in assets and $2,520,336,000 in liabilities. Gulfport and its subsidiaries 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 their 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; and PricewaterhouseCoopers LLP as tax services provider. Epiq Corporate Restructuring LLC is the claims agent. Wachtell, Lipton, Rosen & Katz is counsel for the special committee of Gulfport's Board of Directors while 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 while M III Partners, LP is the financial advisor. The Office of the U.S. Trustee formed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Committee is represented by Norton Rose Fulbright US LLP and Kramer Levin Naftalis & Frankel, LLP. GULFPORT ENERGY: UCC Says Disclosures Have Glaring Deficiencies --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Gulfport Energy Corporation and its affiliated debtors objects to the Debtors' motion seeking entry of an order approving the adequacy of the Disclosure Statement. The Committee claims that the Debtors' Disclosure Statement contains glaring deficiencies and misleading statements regarding the proposed treatment for unsecured creditors under the RSA Plan. The deficiencies would appear to be just the example of the Debtors' unwillingness or inability to provide their stakeholders with information necessary to make informed judgments. The Committee points out that it would appear the Debtors made no public disclosure of the 2019 Dropdown Transaction either prior to or at the time of its consummation, and subsequently made only passing reference to the billion dollar transaction in their Form 10-Q based on the Committee's investigation. The Committee asserts that the Disclosure Statement is entirely devoid of any description of the estate claims and the impact of their purported settlement and release through the Plan. Nor does the Disclosure Statement adequately inform unsecured creditors of what they could receive if any of these claims were successfully pursued. The Committee further asserts that the RSA Plan improperly classifies the unsecured claims of the noteholders together with the other general unsecured claims of the Parent in a single class, Class 4A, in violation of 11 U.S.C. Sec. 1122(a). The Committee states that parent-only unsecured creditors are limited to receiving only up to 6% of the reorganized equity, an equity whose value is diminished by the issuance of unsecured notes and preferred shares. Unless the RSA Plan is revised to address this blatant engineering of votes, the Disclosure Statement should not be approved. Finally, Parent creditors must be told what they will actually receive under the proposed Plan, as opposed to eliding the issue of disparate treatment by saying only in general terms that Parent creditors will receive a share of the consideration to be provided to all unsecured creditors. Absent inclusion of such information, the Disclosure Statement contains inadequate information and should not be approved. Counsel for the Official Committee of Unsecured Creditors: NORTON ROSE FULBRIGHT US LLP William R. Greendyke Jason L. Boland Kristian W. Gluck 1301 McKinney, Suite 5100 Houston, TX 77010-3095 Telephone: (713) 651-5151 E-mail: william.greendyke@nortonrosefulbright.com jason.boland@nortonrosefulbright.com kristian.gluck@nortonrosefulbright.com - and - KRAMER LEVIN NAFTALIS & FRANKEL LLP Douglas H. Mannal, Esq. P. Bradley O'Neill, Esq. Rachael L. Ringer, Esq. David E. Blabey Jr. 1177 Avenue of the Americas New York, NY 10036 Telephone: (212) 715-9100 E-mail: dmannal@kramerlevin.com boneill@kramerlevin.com rringer@kramerlevin.com dblabey@kramerlevin.com 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. As of Sept. 30, 2020, Gulfport had $2,375,559,000 in assets and $2,520,336,000 in liabilities. Gulfport and its subsidiaries 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 their 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; and PricewaterhouseCoopers LLP as tax services provider. Epiq Corporate Restructuring LLC is the claims agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Nov. 27, 2020. The committee tapped Norton Rose Fulbright US, LLP and Kramer Levin Naftalis & Frankel, LLP as its legal counsel, and Conway MacKenzie, LLC, as its financial advisor. Wachtell, Lipton, Rosen & Katz is counsel for the special committee of Gulfport's Board of Directors while 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 while M III Partners, LP is the financial advisor. HAJJAR BUSINESS: Can Use Cash Collateral Until May 25 ----------------------------------------------------- Judge John K. Sherwood of the U.S. Bankruptcy Court for the District of New Jersey authorized Hajjar Business Holdings, LLC and its affiliated Debtors to use cash collateral on an interim basis until May 25, 2021. The Court held that the Debtors' use of cash collateral should not exceed any line item on the Budget by an amount exceeding 5% of each such line item. The Court added the Debtors may make expenditures up to 5% in excess of the total budgeted expenses for that month in the Budget so long as actual disbursements do not exceed 105% of the budgeted total expenses for such month of the Budget. The approved Budget provided for total operating expenses in the amount of $265,150.33 for the month of February, $248,486.80 for the month of March, and $250,800.33 for the month of April. Wells Fargo Commercial Mortgage Trust 2016 C34, Commercial Mortgage Pass Through Certificates, Series 2016 C34, was named as Secured Lender in the Debtors' original cash collateral motion, taking over from Natixis Real Estate Capital, LLC, which originally issued an $81,500,000 commercial loan back in 2016. Wilmington Trust, National Association, serves as Trustee for the Benefit of the Registered Holders of Wells Fargo Commercial Mortgage Trust 2016-C34, Commercial Mortgage Pass-Through Certificates Series 2016-C34. Wilmington Trust as a secured creditor has challenged the Debtors' continued use of cash collateral on several occasions. "Since the last Cash Collateral Order, there is a small shortfall of $11,284.62 plus a small tax shortfall of $12,559.29 for the Adequate Protection Payments that were due and owing for the months of November, December, and January. As a condition to the Debtors' use of Cash Collateral, the Secured Creditor needs these shortfalls, in the aggregate amount of $23,843.91, to be paid. The Debtors have requested (and the Secured Creditor has agreed) that this shortfall can be paid from the proceeds from the sale of the Wayne Property. In addition, the Debtors have requested (and the Secured Creditor has agreed) to pay the Debtors' upcoming insurance premium... as the Debtors' current insurance policies expire on April 29, 2021. Within five business days of the entry of this Order, subject to Secured Creditor's receipt of an appropriate invoice evidencing the cost of the Annual Renewal Premium, Secured Creditor will pay the Annual Renewal Premium directly to the Debtors' insurer (the "Direct Insurance Payment") from the proceeds of the sale of the Wayne Property," Judge Sherwood said. The Secured Lender was granted adequate protection of its interest in the collateral securing the Debtors' obligations under the Loan Documents, including the Cash Collateral, for and equal in amount to the amount of Cash Collateral used from and after the Petition Date, and the aggregate diminution in the value of the Secured Lender's interests in the Prepetition Collateral from and after the Petition Date, including any such diminution resulting from (a) the use of Cash Collateral, (b) the sale, lease, or use by the Debtors (or other decline in value) of the Prepetition Collateral, and (c) the imposition of the automatic stay under section 362 of the Bankruptcy Code. As adequate protection, the Secured Lender will receive (i) the monthly tax escrow due and owing under the Loan Documents in the approximate amount of $138,300.21; plus (ii) the Secured Lender's monthly interest payment in the amount of $341,482.41 per month representing interest at the non-default rate due and owing to the Secured Lender under the Loan Documents, after application of the proceeds resulting from the sale of the Debtors' property located in Wayne, New Jersey. The Adequate Protection Payments will be due no later than the 15th of each month, beginning on February 15, 2021. The Secured Lender was granted an allowed, superpriority administrative expense claim under section 507(b) of the Bankruptcy Code with respect to the Adequate Protection Obligations. The Superpriority Claim shall have priority over all administrative expenses of the kind specified in, or ordered pursuant to, any provision of the Bankruptcy Code, including, without limitation, those specified in, or ordered pursuant to, sections 326, 328, 330, 503(b), 506(c), 507(a), 507(b), 546(c), 726, and 1114 of the Bankruptcy Code. A final hearing or a further interim hearing on the Debtors' continued use of cash collateral will be conducted by the Court on May 18, 2021 at 10:00 a.m. The deadline for the filing of objections to the Debtors' use of cash collateral is scheduled on May 11, 2021 at 4 p.m. A copy of the Court's order is available at https://bit.ly/2ZNu7Ah from PacerMonitor.com. Wilmington Trust is represented by: Sommer L. Ross, Esq. DUANE MORRIS LLP 222 Delaware Avenue, Suite 1600 Wilmington, DE 19801-1659 Telephone: (302) 657-4900 Facsimile: (302) 657-4901 E-mail: slross@duanemorris.com - and - Lawrence J. Kotler, Esq. DUANE MORRIS LLP 30 S. 17th Street Philadelphia, PA 19103 Telephone: (215) 979-1514 Facsimile: (215) 689-2746 E-mail: ljkotler@duanemorris.com About Hajjar Business Holdings Hajjar Business Holdings, LLC and 12 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 20-12465) on Feb. 13, 2020. At the time of the filing, Hajjar Business Holdings was estimated to have assets of between $100,000 to $500,000 and liabilities of between $50 million to $100 million. Judge John K. Sherwood oversees the Debtors' cases. Anthony Sodono, III, Esq. and Sari B. Placona, Esq., of McManimon, Scotland & Baumann, LLC, serve as counsel to the Debtors. HARGRAY HOLDINGS: S&P Places 'B+' ICR on CreditWach Positive ------------------------------------------------------------ S&P Global Ratings placed the ratings on Hilton Head, S.C.-based Hargray Holdings LLC, including the 'B+' issuer credit rating, on CreditWatch with positive implications. The CreditWatch placement reflects S&P's view that the transaction could improve Hargray's credit profile because Cable One is rated higher. The CreditWatch placement follows Cable One's (BB/Positive/--) offer to acquire the remaining 85% stake in Hargray it does not already own. Cable One plans to finance the transaction with a combination of balance sheet cash, revolving credit facility capacity, and proceeds from new debt and/or equity capital. While specific funding plans were not disclosed, Cable One will enter into a $900 million bridge loan. S&P said, "We expect the transaction to close in the second quarter of 2021. While Hargray's existing secured debt has change-of-control provisions, if Cable One gets a waiver and the debt is rolled over, we would notch it off the equalized issuer-credit rating." The acquisition of Hargray will expand Cable One's footprint in the southeastern U.S. and penetration of commercial customers. Hargray also has limited competition across its incumbent service territories. S&P expects to resolve the CreditWatch when the acquisition closes, most likely in the second quarter, and will likely raise the ratings on Hargray equal to our ratings on Cable One. HARLEY-DAVIDSON: Egan-Jones Lowers Senior Unsecured Ratings to BB ----------------------------------------------------------------- Egan-Jones Ratings Company, on February 11, 2021, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Harley-Davidson Incorporated to BB from BB+. Headquartered in Milwaukee, Wisconsin, Harley-Davidson, Inc. designs, manufactures, and sells motorcycles. HCA HEALTHCARE: Egan-Jones Hikes Senior Unsecured Ratings to BB- ---------------------------------------------------------------- Egan-Jones Ratings Company, on February 11, 2021, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by HCA Healthcare to BB- from B+. Headquartered in Nashville, Tennessee, HCA Inc/Old. HCA Inc. of Delaware owns, manages, and operates hospitals. HERBALIFE NUTRITION: Moody's Completes Review, Retains Ba3 CFR -------------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Herbalife Nutrition Ltd. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Herbalife's Ba3 Corporate Family Rating reflects its niche product and service offering and its history of debt financed share buybacks. The rating is further constrained by the inherent challenges of operating a multi-level marketing organization. The company's long term rating is supported by good profitability and cash flow, relatively modest financial leverage, and excellent geographic diversification. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. HILLMAN COS: S&P Assigns Prelim 'B+' Rating on $1.035BB Term Loans ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary 'B+' issue-level rating and '2' recovery rating to The Hillman Cos. Inc.'s proposed $1.035 billion senior secured facility due 2028 consisting of an $835 million first-lien term loan and $200 million first-lien delayed-draw term loan (assumed undrawn at close). S&P said, "The '2' recovery rating indicates our expectation for substantial recovery (70%-90%; rounded estimate: 80%). We assume the $200 million delayed-draw term loan will be undrawn at close, and we have not factored the proposed $150 million first-lien term loan B-2 into our analysis because we do not expect it to be funded at close. We would reassess the ratings if either the $200 million delayed-draw term loan or $150 million term loan B-2 are drawn. The latter facility will only be funded in the event special-purpose acquisition company (SPAC) redemptions well exceed expectations. We expect redemptions to be minimal and instead likely funded with cash from the balance sheet." Hillman will use the $835 million net proceeds to fully refinance existing debt in connection with its planned merger with SPAC Landcadia Holdings III Inc. The new term loan B-1, about $500 million SPAC cash held in trust, $375 million in private investment in public equity proceeds, and $22 million cash will fund $1.5 billion in debt paydown, $91 million in fees, and put about $96 million cash to the balance sheet. The existing sponsor owners will roll over $911 million in common equity. S&P said, "We are affirming our existing issue-level ratings. The 'B-' issuer credit rating remain on CreditWatch with positive implications. We will withdraw our existing issue-level ratings upon the close of the transaction. If the SPAC merger closes in accordance with our expectations, resulting in a $710 million net debt reduction, we estimate pro forma leverage to decline to 4.5x from around 8x for the fiscal year ended Dec. 31, 2020. Subsequently, we expect leverage to decline to about 4x in fiscal 2021 as we revised our forecast adjusted EBITDA margin expansion to 16%-16.5% from 15%-15.5% in 2020 from stronger product mix. "Upon close of the SPAC merger, we expect to raise the issuer credit rating to 'B' due to deleveraging. Our 'B+' preliminary ratings on the proposed debt is notched off those expectations. If we expect the final capital structure to materially differ or the company to issue debt under the proposed $200 million delayed-draw or $150 million facilities, we could reassess our preliminary ratings on the senior secured debt." ISSUE RATINGS - RECOVERY ANALYSIS The company's capital structure includes: -- $250 million asset-based lending (ABL) facility due in 2026, -- $835 million first-lien term loan B-1 facility due in 2028; and -- $200 million first-lien delayed-draw term loan tranche with availability expiring in 2023, assumed undrawn at close. Key analytical factors -- Hillman is a U.S.-based company, and substantially all its assets and operations are in the U.S. In the event of payment default, S&P believes a bankruptcy protection filing would be in the U.S. under the administration of the U.S. Bankruptcy Court system, while entities abroad, if any, remain out of insolvency proceedings with respect to local jurisdictions. -- S&P believes creditors would receive maximum recovery in a payment default scenario if the company reorganized instead of liquidated. This is because of the company's scale and leading market positions in its categories and brands, which are well recognized by retailers and industry trade customers. Therefore, in evaluating recovery prospects for debtholders, we assume the company continues as a going concern and arrive at its emergence enterprise value (EV) by applying a multiple to our assumed emergence EBITDA. -- The first-lien term loan facility has a perfected first-priority security interest in substantially all assets of the borrower and guarantors and second-priority lien on ABL collateral. The ABL has perfected first-priority liens on cash, accounts receivable, inventory, and general intangibles, and a second-priority lien on term loan collateral. Guarantors under both facilities are all existing and future wholly-owned and domestic subsidiaries of the borrower. Simulated default assumptions S&P's simulated default scenario contemplates a default in 2024, reflecting the loss of revenue due to the loss of one or more top customers. At the same time, difficulties could result from a severe downtown in the macroeconomic environment and U.S. housing market. These factors ultimately would lead to lower revenue, cash flow, and liquidity, and a default in 2024. Calculation of EBITDA at emergence -- Debt service assumption: $60.3 million (assumed default year interest and amortization) -- Minimum capital expenditures assumption: $20.2 million -- Preliminary emergence EBITDA: $80.5 million -- Cyclicality adjustment: $4 million (5%) -- Operational adjustment: $71.9 million (85%) -- Gross valuation: $860.2 million, assuming a 5.5x EBITDA multiple given the company's niche product categories Simplified waterfall -- Emergence EBITDA: $156.4 million -- Multiple: 5.5x -- Gross recovery value: $860.2 million -- Net recovery value for waterfall after administrative expenses (5%): $817.2 million -- Obligor/nonobligor valuation split: 90%/10% -- Collateral value available to secured first-lien debt: $635.4 million -- First-lien secured debt claims: $816.1 billion --Recovery range for senior secured debt: 70%-90% (rounded estimate: 80%) All debt amounts include six months of prepetition interest. HILLMAN SOLUTIONS: Fitch Assigns Expected 'BB-(EXP)' LongTerm IDR ----------------------------------------------------------------- Fitch Ratings has assigned Hillman Solutions Corp. (HLMN) an Expected Long-Term Issuer Default Rating (IDR) of 'BB-(EXP)'. The Rating Outlook is Stable. Fitch has also assigned an expected rating of 'BB(EXP)'/'RR2(EXP)' to The Hillman Group, Inc's proposed $835 million senior secured term loan and $200 million senior secured delayed draw term loan. Fitch has assigned expected ratings in connection with the acquisition of HLMN by the special purpose acquisition company Landcadia III Holdings, Inc. HLMN plans to use proceeds from the transaction and a new credit facility to refinance its existing debt structure. The transaction is expected to be completed in 2Q2021. Fitch currently rates The Hillman Companies, Inc and The Hillman Group, Inc's LT IDRs 'CCC+'/Rating Watch Positive (RWP). Ratings for the existing first-lien secured term loan (B-/RR3) and senior unsecured bonds (CCC-/RR6) are also on RWP. KEY RATING DRIVERS Ratings and Transaction: Fitch's ratings assume that The Hillman Companies, Inc. and The Hillman Group, Inc's existing debt structure will be entirely replaced at the time of the transaction, resulting in debt at closing of around $835 million. At that time, Fitch would upgrade the LT IDR of The Hillman Group, Inc. to be in line with the Hillman Solutions. Corp's final LT IDR. The final ratings will be dependent on the success of the transaction and the amount of share redemptions, which could, in turn, drive an incremental $150 million of debt, based on lender's current backstopping support. Should the transaction be completed with part or full utilization of the $150 million of backstop funding, the IDR and debt ratings could be lowered one notch. Meaningfully Lower Leverage: Provided the transaction is completed as planned, Fitch expects leverage (debt/EBITDA) to decline to the mid-3.0x range in 2021 from the 6.8x expected at fiscal year-end 2020. In addition, Fitch expects the company to maintain more moderate financial leverage going forward. Fitch anticipates an ongoing level of bolt-on acquisitions that could limit further deleveraging but should not push leverage materially higher. Strengthening FCF: Cash flow generation and financial flexibility will also improve with substantially lower interest costs. Fitch believes FCF margins (excluding anticipated transaction costs) could improve to the mid-single-digits compared with negative to break-even FCF over 2018-2019, assuming steady EBITDA margins around 16%. FFO interest coverage is also expected to meaningfully improve to the mid-4x range compared to the low 2x range in 2020. Strong Performance Through the Pandemic: HLMN has performed better than previously expected, reflecting strength in home repair and remodeling markets driving growth in fasteners and personal protective supplies, leading to low double-digit revenue growth in 2020. Growth in these markets may moderate in 2021 even as other businesses that were negatively impacted by the pandemic such as HLMN's full-service key replication would likely improve. Historically Muted Cyclicality: Fitch believes the company's cyclicality will be relatively muted compared to other diversified manufacturers. The company benefits from significant exposure to home remodeling and renovations rather than new construction. Its products are also low cost and subject to less price sensitivity in a downturn. This is underscored by healthy top-line growth in 2020 and only a moderate decline of about 5% in 2009. Customer Concentration: The company has a concentrated retail customer base, and there is risk that the loss of all or part of a large customer could meaningfully reduce its scale with limited opportunity to recoup lost volumes elsewhere. This risk is mitigated by the company's track record of maintaining long-standing relationships with core remodeling hardware retailers. Home Depot, Lowes and Walmart represented 24%, 21% and 8% of HLMN's fiscal 2019 revenue, respectively. These customers regularly undertake product line reviews of their vendors every few years to determine whether and to what extent they will continue to purchase products from a particular vendor. Commodity-like Products: HLMN has a fairly commoditized product mix across the majority of its business, particularly as it relates to much of its fasteners, hardware, and personal protective products, which account for more than three-fourths of revenue. Its key cutting and kiosk offerings have a relatively higher technology component, although there are competing offerings in the market. In addition, HLMN sets itself apart with the service it provides managing its categories for its key retailers DERIVATION SUMMARY HLMN's ratings consider its operating stability, adequate financial flexibility and liquidity. These factors are weighed against high leverage, a high degree of customer concentration and a fairly commoditized product line. The ratings also consider the need to refinance the $330 million of notes maturing in July 2022. The Positive Rating Watch reflects the potentially significant deleveraging with the planned sale of the company and an expected intention to manage with lower leverage going forward. Fitch compares HLMN to Park River Holdings (IDR B), a building products distributor. The two companies have commodity-like products and have a high degree of customer concentration, primarily to big box retail stores. However, HLMN's leverage, after considering the transaction, is expected to be significantly below Park River's, which is expected to end 2021 around 6.3x and decline under 6.0x during 2022. KEY ASSUMPTIONS -- The transaction occurs as currently planned, without any redemptions, resulting in debt at closing of around $835 million, and the existing debt structure is fully repaid; -- Organic growth is particularly strong in 2020 due to high repair and remodeling tailwinds. Fitch assumes these tailwinds significantly slow driving low-single digit growth in the medium term; -- EBITDA margins of 16% in 2020 which remain fairly steady thereafter; -- Significantly lower interest costs support FCF margins in the mid-single digits; -- The company prioritizes deleveraging while balancing an appetite for M&A. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- The expected ratings outlined above would be assigned assuming the transaction is completed consistent with Fitch's assumptions. Should the transaction not be completed, the following factors would support a positive rating action: -- Commitment to a financial policy supporting maintenance of debt/EBITDA below 6.5x. -- FCF margins sustained in the low-to-mid-single-digits. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- An inability to deleverage as near-term debt maturities drive higher refinancing risk. -- FFO interest coverage consistently below 1.3x. -- Sustained negative FCF generation that strains liquidity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE As of Sept. 26, 2020, HLMN had total liquidity of $166 million, composed of $32 million of cash and equivalents, and $134 million of availability under its ABL facility, which expires in 2024. The company's capital structure consisted of $97 million of ABL facility borrowings, $1.0 billion of senior secured term loan borrowings, $330 million of 6.375% senior unsecured notes due 2022, and $105 million of 11.6% junior subordinated debentures. The term loan amortizes at 1% per year and matures in 2025. The junior subordinated debentures were created in 1997 during the conversion from partnership to corporation and were lent by holding entity Hillman Group Capital Trust. Fitch has assigned 50% equity credit to the debentures. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. 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. HOFFMASTER GROUP: Moody's Completes Review, Retains Caa1 CFR ------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Hoffmaster Group, Inc. (New) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Hoffmaster Group, Inc.'s credit profile (Caa1 CFR) broadly reflects its high financial leverage and weak interest coverage. The company has customer concentration in the foodservice/restaurant and specialty retail sectors that are experiencing unit closures and reduced operations in response to the coronavirus outbreak. These operating headwinds will continue to negatively impact sales and earnings at least through the current outbreak. Hoffmaster has relatively small scale with annual revenue well below $1.0 billion, a narrow product focus and limited geographic diversification. The credit profile also reflects the company's good market position in the foodservice channel and in the more fragmented consumer channel, specifically in the club and grocery sectors. Hoffmaster's lack of channel conflict in the consumer channel and its strategic position in foodservice provide a competitive advantage. Governance factors include the company's aggressive financial policies under private equity ownership. Hoffmaster's adequate liquidity reflects our expectation for muted free cash flows over the next 12 months, and relatively healthy cash balance and low capital expenditure requirements. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. HORIZON THERAPEUTICS: Moody's Rates New Sr. Term Loan 'Ba1(LGD3)' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 (LGD3) rating to the new senior secured term loan of Horizon Therapeutics USA, Inc., a subsidiary of Horizon Therapeutics plc (collectively "Horizon"). There are no changes to Horizon's existing ratings including the Ba2 Corporate Family Rating, the Ba2-PD Probability of Default Rating, the Ba1 senior secured rating, the Ba3 senior unsecured rating and the SGL-1 Speculative Grade Liquidity Rating. The loss given default assessment for the senior secured rating is modified to LGD3 from LGD2. The outlook remains unchanged at stable. Proceeds of the new term loan, together with cash on hand, are to fund Horizon's previously announced acquisition of Viela Bio, Inc. for approximately $3.05 billion. Ratings assigned: Horizon Therapeutics USA, Inc. Senior secured bank credit facility, at Ba1 (LGD3) LGD adjustments: Senior secured bank credit facilities, LGD Adjusted to (LGD3) from (LGD2) RATINGS RATIONALE Horizon's Ba2 Corporate Family Rating reflects its niche position in the global pharmaceutical industry with annual revenue of slightly more than $2 billion. Horizon's drugs for rare diseases have high price points, good growth opportunities, and generally high barriers to entry. Thyroid eye disease treatment Tepezza has high sales potential based on significant unmet medical need and its very successful initial launch. Horizon's efficient operating structure and high profit margins will drive solid cash flow. Risk factors include declining trends in the inflammation segment, R&D execution risk, and unresolved legal exposures. Product concentration is somewhat high, with the top three drugs generating over half of sales for the foreseeable future. Financial leverage incorporating the Viela acquisition is moderately high, with pro forma debt/EBITDA of 4.4x as of September 30, 2020 using Moody's calculations. However, high earnings growth will drive deleveraging, absent additional debt-financed acquisitions. Pro forma cash on hand will decline to about $600 million, which together with solid cash flow provides some flexibility for acquisitions. Viela Bio's autoimmune drug, Uplizna, received FDA approved in June 2020 for neuromyelitis optica spectrum disorder (NMOSD), a rare disease that leads to vision and paralysis. Moody's anticipates solid uptake in this indication. However, the success of the acquisition will depend on the outcomes of various other clinical studies, including the use of Uplizna and various pipeline compounds in a wide range of autoimmune and severe inflammatory diseases. ESG considerations are material to the rating. Horizon faces exposure to regulatory and legislative efforts aimed at reducing drug prices. These are fueled in part by demographic and societal trends that are pressuring government budgets because of rising healthcare spending. Due to a niche focus in rare diseases, Horizon's products tend to carry very high gross prices. That being said, orphan drugs are somewhat less likely to be affected by drug pricing reform than traditional and specialty oral products that have very high spending within the Medicare Part D population. Among governance considerations, Horizon underwent substantial deleveraging transactions in 2019, repaying a material amount of debt with public equity offering proceeds and balance sheet cash, in order to align its financial leverage with companies in its defined biopharmaceutical peer group. Moody's viewed this favorably, but notes that the company's M&A strategy will still result in moderate financial leverage over time. The Ba3 rating on Horizon's senior unsecured notes, which remains unchanged, reflects a one-notch positive over-ride from Moody's Loss Given Default model. The addition of senior secured debt in the form of the new $1.3 billion term loan increases the level of subordination to unsecured creditors. However, the Ba3 rating on the unsecured notes incorporates Moody's expectation that the mix of secured and unsecured debt in Horizon's capital structure will continue to fluctuate over time and that the level of subordination will remain moderate. Horizon's liquidity will remain strong, reflected in the SGL-1 Speculative Grade Liquidity Rating. This is due to high cash on hand, positive free cash flow, no financial maintenance covenants in the term loan and minimal debt amortization requirements. The rating outlook is stable, reflecting Moody's expectation for strong earnings growth combined with adherence to the company's stated debt/EBITDA targets. These include gross debt/EBITDA of roughly 2.0x (on the company's basis), or 3.0x for an opportunistic acquisition, to be followed by deleveraging. On Horizon's basis, gross debt/EBITDA will rise to 2.8x after the acquisition of Viela. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include: significant expansion in scale, improving product diversity, and resolution of the outstanding Department of Justice subpoena into marketing and commercialization practices. Specifically, debt/EBITDA sustained below 3.0x using Moody's definitions could support an upgrade. Factors that could lead to a downgrade include erosion in cash flow that may arise from declining volumes, significant pricing pressure, or generic competition for key products. Debt-financed acquisitions, or an escalation of legal risks could also pressure the ratings. Specifically, debt/EBITDA sustained above 4.0x using Moody's definitions could lead to a downgrade. Headquartered in Deerfield, Illinois, Horizon Therapeutics USA, Inc., is an indirect wholly-owned subsidiary of Dublin, Ireland-based Horizon Therapeutics plc (collectively "Horizon"). Horizon is a publicly-traded pharmaceutical company focused on developing and commercializing innovative medicines that address unmet treatment needs for rare and rheumatic diseases. Annual net sales in 2020 were approximately $2.1 billion. The principal methodology used in these ratings was Pharmaceutical Industry published in June 2017. HORIZON THERAPEUTICS: S&P Assigns Prelim BB+ Rating on Sec. Loan ---------------------------------------------------------------- Horizon Therapeutics USA Inc. is proposing a $1.3 billion senior secured term loan to fund, together with cash on hand, the $2.7 billion acquisition of Viela Bio Inc. S&P assigned a preliminary 'BB+' issue-level rating to the loan with a '2' recovery rating, indicating our expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default. S&P will finalize the rating at the close of the acquisition. S&P said, "The proposed incremental secured term loan significantly increases the proportion of secured debt, eroding recovery prospects on the secured and unsecured debt, in our view. Our issue-level ratings on the outstanding debt is on CreditWatch with negative implications, as we expect to lower our ratings on the secured tranche to 'BB+' with a '2' recovery rating and the unsecured tranche to 'B+' with a '6' recovery rating. "Our 'BB' long-term issuer credit rating and stable outlook are unchanged. The 'BB' rating reflects Horizon's long life cycle for its largest products, especially Tepezza, and improving product depth and research and development capabilities. The rating also reflects our expectations for adjusted debt to EBITDA to generally remain in the 2x-3x range." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- Horizon's pro forma capital structure consists of a $275 million secured revolving credit facility (assumed 85% drawn at hypothetical default), $1.718 billion of senior secured term loans, and $600 million of senior unsecured notes. -- The senior secured term loan is issued by Horizon Therapeutics USA Inc. -- The unsecured notes are issued by Horizon Therapeutics USA Inc. and guaranteed by Horizon Therapeutics PLC and its other operating subsidiaries. -- S&P estimates the company's EBITDA at emergence from a hypothetical default would likely be significantly lower than its expected 2020 EBITDA. S&P believes significant pricing pressure or competition for several of Horizon's lead products would most likely lead to a default. -- Given Horizon's patented branded products, S&P has applied a 7x EBITDA multiple, in line with the multiples it uses for similar pharmaceutical companies, to arrive at an estimated enterprise value at emergence from default. Simulated default assumptions -- Contemplated year of default: 2026 -- Expected jurisdiction of default: U.S. -- EBITDA at emergence: $217 million -- EBITDA multiple: 7x -- Unadjusted gross enterprise value: $1.521 billion Simplified waterfall -- Net enterprise value (after 5% administrative costs): $1.445 billion -- Valuation split (obligors/nonobligors): 100%/0% -- Collateral value available to secured creditors: $1.445 billion -- Senior secured debt claim: $1.933 billion --Recovery expectations: 70%-90% (rounded estimate: 70%) -- Value available to unsecured creditors: $0 -- Unsecured debt claim: $617 million -- Pari passu deficiency claims: $488 million --Recovery expectations: 0%-10% (rounded estimate: 0%) IBIO INC: Names Robert Lutz as Chief Financial and Business Officer ------------------------------------------------------------------- iBio, Inc. has appointed Robert M. Lutz as its chief financial and business officer, effective March 4, 2021. "I am pleased to welcome Rob to iBio where we expect he will make an immediate impact on our business during this transformative time," said Tom Isett, chairman & CEO of iBio. "His deep experience across corporate finance and business development functions, breadth of public company experience, and demonstrated expertise in building product portfolios is a tremendous fit for iBio as we seek to execute on our new business model." Mr. Lutz brings more than 25 years of experience to the Company, joining most recently from Strongbridge Biopharma plc, a Nasdaq-listed, commercial-stage biopharmaceutical company focused on rare diseases. He served as CFO since August 2019, and prior to that, as chief business officer since October 2014. During his tenure, he led the search, evaluation, contracting, and financing of multiple assets which proved to be critical growth drivers for Strongbridge. Before joining Strongbridge, Mr. Lutz spent more than a decade at Shire Pharmaceuticals in leadership positions with global responsibilities, including identifying opportunities for acquisition, licensing, partnership and development for Shire's largest business unit (Neuroscience) and the financial management of approximately $5 billion in revenue for its Specialty Pharmaceuticals division. Prior to joining Shire, Mr. Lutz served in a variety of financial, strategic and executive positions after having started his career at Goldman Sachs & Company. He holds an MBA from the Kellogg School of Management and a BA in Economics and Computer Science from Amherst College. "It is an exciting time to be joining iBio," Mr. Lutz commented. "There is a unique opportunity to leverage the strengths of the Company's high-speed, plant-based biopharmaceutical production capabilities across multiple product categories and therapeutic areas. I look forward to working with the team to expand the product pipeline, accelerate growth, and enhance value for our shareholders." As CFBO, Mr. Lutz will lead iBio's finance organization and be responsible for building strong licensing capabilities and the financial planning & analysis function, as well as supporting iBio's relationships with the investment community. Mr. Lutz is entitled to an annual base salary of $425,000, which will accrue starting on the Effective Date. Mr. Lutz is eligible for a target bonus of 40% of the base salary paid to him during the prior fiscal year based upon the Compensation Committee's assessment of his performance and the performance of the Company during the prior fiscal year. About iBio Inc. iBio, Inc. -- http://www.ibioinc.com-- is a full-service plant-based expression biologics CDMO equipped to deliver pre-clinical development through regulatory approval, commercial product launch and on-going commercial phase requirements. iBio's FastPharming expression system, iBio's proprietary approach to plant-made pharmaceutical (PMP) production, can produce a range of recombinant products including monoclonal antibodies, antigens forsubunit vaccine design, lysosomal enzymes, virus-like particles (VLP), blood factors and cytokines, scaffolds, maturogens and materials for 3D bio-printing and bio-fabrication, biopharmaceutical intermediates and others, as well as create and produce proprietary derivatives of pre-existing products with improved properties. iBio disclosed a net loss attributable to the Company of $16.44 million for the year ended June 30, 2020, compared to a net loss attributable to the Company of $17.59 million for the year ended June 30, 2019. As of Dec. 31, 2020, the Company had $145.41 million in total assets, $38.08 million in total liabilities, and $107.32 million in total equity. IN-SHAPE HOLDINGS: Court Approves Bankruptcy Sale to Lenders ------------------------------------------------------------ Alex Wolf of Bloomberg Law reports that In-Shape Holdings LLC will sell its chain of California fitness centers to former CEO Paul Rothbard, Aquiline Capital Partners LLC, and other investors after getting court approval for the deal. The transaction, approved Feb. 19, 2021, eliminates $45.3 million of debt owed to the purchasers and keeps In-Shape's gyms in business for the foreseeable future. The company sought approval from Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware after no other interested parties came forward to top Rothbard and Aquiline's offer. The sale leaves unsecured creditors without a cash recovery, but will preserve jobs. 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. INFINITE BIDCO: Moody's Assigns First Time B3 Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a first-time B3 Corporate Family Rating and a B3-PD Probability of Default Rating to Infinite Bidco LLC (dba Infinite Electronics; "Infinite"). Moody's also assigned a B2 rating to the proposed $740 million first lien credit facilities ($100 million revolver and $640 million term loan) and a Caa2 rating to the proposed $240 million second lien term loan. The outlook is stable. Net proceeds from the proposed credit facilities, rollover equity, and new sponsor equity will be used to fund the acquisition of Infinite Electronics by Warburg Pincus LLC. In addition, Infinite will be provided with a privately-placed $55 million delayed draw, first lien term loan and a privately-placed $20 million delayed draw, second lien term loan. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. The rating actions are summarized as follows: Assignments: Issuer: Infinite Bidco LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD3) Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured Delayed Draw 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5) Senior Secured Delayed Draw 2nd Lien Term Loan, Assigned Caa2 (LGD5) Issuer: Infinite Bidco LLC Outlook, Assigned Stable RATINGS RATIONALE Infinite's B3 CFR reflects very high debt to EBITDA of 8.2x (including Moody's standard adjustments) at closing and a track record for maintaining adjusted leverage above 7x reflecting historical debt funded acquisitions or growth investments. High leverage leaves Infinite with limited financial flexibility in the event heightened competition or other factors lead to unexpected revenue declines or pressure on profit margins. Ratings are supported, however, by Infinite's solid position as a global supplier of electronic components and assemblies to the "availability" subsegment of the production market. This availability subsegment meets the urgent, unplanned, and low volume demands which are non-discretionary and mission critical to customers, primarily engineers. The essential nature supports Infinite's pricing power, which paired with the absence of manufacturing operations, sustains EBITDA margins (including Moody's standard adjustments) above 30%, compared to 2% to 9% adjusted EBITDA margins for typical technology distributors. Despite macroeconomic headwinds caused by ongoing trade disputes and COVID-19 since the beginning of 2020, Infinite achieved 4%-5% topline gains in each of 2019 and 2020. Moody's expects Infinite will grow revenues in the mid-single digit percentage range with stable to improving gross margins supported by customary price increases. As a result, Infinite should be able to maintain adjusted free cash flow to debt in the mid singled digit percentage range with debt to EBITDA (including Moody's standard adjustments) improving below the mid 7x range within one year. Ratings are also supported by secular trends in the availability segment including the ongoing 5G rollout, increased demand for IoT-connected devices, and growth in automation, all of which will drive R&D spend by Infinite's engineer-base of customers. Governance risk and financial policies are key considerations given that financial sponsors typically look to enhance equity returns through debt funded acquisitions or distributions. Moody's views Infinite's financial policies to be somewhat aggressive given private-equity ownership, the potential for debt funded transactions, and proposed adjusted leverage in the low 8x range at closing. Lack of public financial disclosure and the absence of board independence are also incorporated in the B3 CFR. 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. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Liquidity is good reflecting Moody's expectation for the proposed $100 million revolver being largely undrawn and annual adjusted free cash flow to debt in the mid-single digit percentage range over the next year. Liquidity is supported by Infinite's asset-lite business model with minimal seasonality. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation for mid-single digit percentage topline gains over the next year, stable adjusted EBITDA margins, and improving free cash flow generation. Moody's expects adjusted leverage and free cash flow will improve as excess cash is applied to reduce debt balances. The outlook also incorporates organic growth investments and future tuck-in acquisitions being funded primarily with excess cash. To the extent a portion or all of the delayed draw term loans are funded (up to $75 million available) or other additional debt is issued, Moody's expects adjusted debt to EBITDA will remain below 8x upon funding and key credit metrics, including adjusted debt to EBITDA and free cash flow to debt, will return to levels prior to the new funding within two fiscal quarters. Ratings could be upgraded if revenues grow consistently with stable adjusted EBITDA margins and debt to EBITDA (Moody's adjusted) being sustained below 6x. Good liquidity would need to be maintained including adjusted free cash flow to debt above the mid-single digit percentage range. Infinite's ratings could be downgraded if adjusted debt to EBITDA is expected to be sustained above 7.5x or if adjusted free cash flow to debt were to fall below 2%. There could be downward pressure on ratings if organic revenue growth decelerates to the low-single digit percentage range or if adjusted EBITDA margins were to fall below 27% reflecting market pressure, poor execution, or other challenges. Deterioration in liquidity could also cause downward rating pressure. As proposed, the new first lien term loan is expected to provide covenant flexibility for transactions that could adversely affect creditors including a privately placed $55 million first lien delayed draw facility; a privately placed $20 million delayed draw second lien term loan; as well as incremental facility capacity equal to (i) the greater of $120 million and (ii) 100% of Consolidated EBITDA, plus additional pari passu credit facilities so long as the first lien net leverage ratio does not exceed 5.25x. Additional debt is permitted for incremental facilities that are secured on a junior lien basis (subject to a 7.25x senior secured leverage ratio limit and 1.75x interest coverage) or are unsecured (subject to a 7.5x total leverage ratio limit and 1.75x interest coverage). Proposed terms related to the release of subsidiary guarantees and collateral leakage through transfers to unrestricted subsidiaries have not been disclosed. Summary term sheet indicates a 100% net asset sale prepayment requirement stepping down to 50% when the first lien net leverage ratio is 4.75x, and then 0% when ratio is 4.25x, subject to a 540-day reinvestment window. Infinite Electronics, Inc., with headquarters in Irvine, CA, is a global supplier of electronic components and assemblies for the urgent, unplanned, and last-minute demand of engineers during their R&D, repair, and design activities. Infinite will be majority owned by funds associated with Warburg Pincus upon closing of the transaction. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. INNOVATIVE SOFTWARE: Adequate Protection Payments to Begin Feb. 23 ------------------------------------------------------------------ Judge Scott M. Grossman of the U.S. Bankruptcy Court for the Southern District of Florida gave Innovative Software Solution, Inc. until February 17, 2021 to use cash collateral. A final hearing on the Debtor's use of cash collateral was scheduled to take place on February 17 at 2 p.m. The Debtor was authorized to use cash collateral with a provision for adequate protection payments to On Deck Capital in the amount of $100 monthly, and no provision for adequate protection payments to the United States Small Business Administration. Adequate protection payments are set to begin 7 days after the entry of the Court's February 16, 2021 Order, or on February 23. The approved budget provided for total expenses of $14,369.34 for the month of January and $20,419.34 for the month of February. On February 16, 2021, the Debtor filed its amended motion which sought the use of the cash collateral of On Deck Capital. On Deck Capital is the first in priority recorded UCC-1. The Debtor owes On Deck $70,000. The Debtor said that On Deck is a fully secured creditor and that while the Debtor is not required to pay adequate protection payments to On Deck, the Debtor proposed to continue to pay On Deck monthly adequate protection payments in the amount of $100. The Debtor related that "the United States Small Business Administration also has a recorded UCC. SBA alleges a claim in the amount of $150,000. The value of the collateral securing the SBA's claim is approximately $83,021.26. As a result, the SBA has a partially secured claim." The Debtor proposed to pay the SBA monthly adequate protection payments in the amount of $200. The Debtor further related that the current value of all its assets, in the opinion of Natalie Frazier, its Co-President is $153,021.26. The Debtor said it needed access to all of the cash collateral, until a final order is entered, to continue its business operations. About Innovative Software Solution Innovative Software Solution, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-10538) on Jan. 20, 2021. Natalie Frazier, its president, signed the petition. Debtor estimated assets at $0 to $50,000 and liabilities at $100,001 to $500,000. Judge Scott M. Grossman oversees the case. Van Horn Law Group, PA serves as the Debtor's legal counsel. IOWA FERTILIZER: S&P Affirms 'BB-' Rating on Senior Secured Bonds ----------------------------------------------------------------- On Feb. 17, 2021, S&P Global Ratings affirmed its 'BB-' rating on Iowa Fertilizer Co. LLC's (IFCo) senior secured tax-exempt bonds. The '1' recovery rating is unchanged, indicating a very high recovery expectation (90%-100%) under a hypothetical payment default scenario. S&P said, "The outlook is stable, reflecting our expectation that IFCo's robust operational performance will continue and fertilizer prices will improve. We forecast IFCo's DSCR will be above 2x in 2021 and expect a minimum DSCR of 1.45x in 2025." The Wever nitrogen fertilizer facility began commercial operations in mid-2017. The plant has ammonia production capacity of 2,425 short tons per day (STPD), but is capable of achieving up to 2,820 STPD because the equipment installed has a higher design margin. The upstream part of the plant produces ammonia and urea solution (urea in liquid form produced from ammonia and carbon dioxide), and the downstream part converts either ammonia or urea solution into other products like granular urea, urea ammonium nitrate (UAN), or diesel exhaust fluid (DEF). IFCo is strategically located in southeastern Iowa, near the Iowa-Illinois border and in the center of the Midwest Corn Belt. The Midwest Corn Belt is the largest market in the U.S. for direct application of nitrogen fertilizer products. Iowa and Illinois rank highest in the consumption of nitrogen products for corn production. The company's nitrogen fertilizer products are usually sold within a 250-mile radius. It is generally more expensive for customers to buy fertilizers from New Orleans (the entry point of imported fertilizers) and have the products delivered to the Midwest. Nitrogen fertilizer prices are sensitive to changes in fundamental supply and demand factors, such as weather patterns, field conditions, crop prices, population changes, and trade policies related to agricultural products. S&P expects the U.S. will remain a net importer of nitrogen fertilizers and there are currently no new large-scale domestic plants under construction. Natural gas is the major feedstock for U.S. ammonia production, and typically represents a large portion of a producer's total cost. S&P believes this risk is reduced because IFCo procures natural gas from ANR SW Oklahoma, which has consistently been trading below Henry Hub. Fertilizer prices are expected to recover from below mid-cycle prices of 2020. Globally, fertilizer prices were depressed during 2020. This was largely due to oversupply, spurred by low prices for feedstock such as natural gas, as opposed to significantly weaker demand. Therefore, less-efficient producers were able to get adequate margins for their output due to lower variable costs. S&P anticipates prices will continue the recovery that started in late 2020, mostly due to improved demand. Crop prices are much higher, largely fueled by strong demand globally, including corn demand from China as feedstock. Improved crop prices are positive for nitrogen product demand, as they incentivize farmers to apply more fertilizer to increase yields. The U.S. pricing discount to global benchmarks is expected to narrow. The depressed pricing was further exacerbated in the U.S. market, with local fertilizer prices trading at a discount to global benchmarks. This can be attributed to import dynamics and the resultant overproduction from domestic players. Due to higher tariffs in Europe, Russian and Trinidadian UAN supply was redirected to the U.S. In response, local suppliers lowered their prices to protect their market share. Overall, as IFCo sells its product on a merchant basis, its cash flow generation and DSCRs in 2020 were below our expectations, reaching a low of 1.3x in the second quarter. S&P expects that fertilizer pricing in the U.S. should also recover and that the gap between U.S. and global prices will continue to narrow. On the supply side, some Russian supply is now being redirected to the European market despite tariffs, due to depressed U.S. UAN prices. On the demand side, U.S. farmers are benefiting from generous government subsidies, put in place to offset damaging tariffs implemented before the COVID-19 pandemic. Combined with improved crop prices, this will likely result in higher spending on supply. Continued growth in the DEF business should provide more cash flow diversity. IFCo continues to build on its DEF growth strategy. This product is used to reduce the air pollution caused by diesel engine and allows automotive manufacturers to meet carbon emissions requirements. IFCo has established an advantageous position, with about 20%-25% market share in the U.S. DEF volume sales for 2020 increased to about 711,000 short tons, an increase of about 30,000 short tons compared with 2019. Despite DEF still representing a fairly modest proportion of the company's cash flows, S&P views this diversification as credit positive because DEF is not cyclical or seasonal and has attractive margins. More recently, demand for DEF has increased significantly with the rebound in road traffic. S&P believes that demand should also benefit from a more permanent recovery in mileage driven. Redemption of the series 2016 notes modestly improves the company's DSCR ratios. S&P said, "In our opinion, the redemption of about $147 million of 5.875% series 2016 notes due 2026 and 2027 is credit positive because it will result in lower cash debt service of about $9 million annually. However, given the amortizing feature of the bonds, the higher principal payments required between 2023 and 2025 associated with the series 2013 notes still support our minimum DSCR of 1.45x in 2025. Although we are not modeling a refinancing of the series 2013 in our base-case scenario, DSCRs could improve if IFCo were to launch an opportunistic debt exchange." S&P said, "Under our base-case scenario, DSCRs for 2021 are projected to be above 2x, with average DSCR of about 5.60x during the life of the project. Overall, the minimum DSCR remains commensurate with a 'BB-' rating for a project-financed asset and provides sufficient cushion to support the rating. "The stable outlook reflects our view that IFCo will maintain good operational performance and that U.S. fertilizer prices will recover in 2021, as demand is forecast to outpace supply. We forecast IFCo's DSCR will be above 2x in 2021 and expect a minimum DSCR of 1.45x in 2025 when we expect senior debt service to be higher. "We could lower the rating if IFCo's operating performance deteriorates such that DSCRs fall below 1.3x on a sustained basis. This could stem from unforeseen operational issues that require a full plant shutdown for an extended period or adverse market conditions, such as weakened nitrogen fertilizer pricing in the U.S. Midwest. "We could raise the rating if we believed that, given the volatile nature of nitrogen fertilizer prices, IFCo could consistently achieve debt service coverage exceeding 2x in all years of our base-case projection. This could stem from systemic changes in nitrogen fertilizer production economics that lead to sustained improvement of U.S. nitrogen fertilizer prices but without an increase in natural gas feedstock costs." IOWA FINANCE: Fitch Hikes Rating on Disaster Area Bonds to 'B+' --------------------------------------------------------------- Fitch Ratings has upgraded the Iowa Finance Authority's outstanding Midwestern Disaster Area revenue bonds (series 2013, 2018A, 2018B and 2019) to 'B+' from 'B'. The Rating Outlook is Stable. The Iowa Finance Authority has issued a total of $1.185 billion of revenue bonds on behalf of Iowa Fertilizer Company LLC (IFCo). RATING RATIONALE The upgrade reflects demonstrated improvement in the project's financial profile, largely due to early repayment of $147.2 million series 2016 revenue bonds, with limited remaining margin of safety for repayment of the bonds under Fitch's rating case scenario. The project has maintained its strong production rate and is operationally positioned to achieve stable margins, assuming it can sustain its operating profile and control costs while product pricing levels remain stable. The facility remains vulnerable to extended operational shortfalls and a historically volatile and potentially weak product pricing environment. Favorably, access to abundant and advantageously priced natural gas feedstock partially mitigates margin risk. The project has sufficient liquidity available in the form of various reserve funds and a working capital facility to mitigate short-term liquidity issues. KEY RATING DRIVERS Nitrogen Market Price Exposure - Revenue Risk: Weaker IFCo sells its nitrogen products to farmers, distributors, wholesalers, cooperatives, truck stop operators and blenders at market prices. The project's main products have historically exhibited considerable price volatility. The project enjoys some geographical product pricing advantages but remains exposed to long-term market supply and demand risks. Advantageous Access to Natural Gas - Supply Risk: Midrange Fitch expects the U.S. gas market to provide the project with an ample supply of natural gas. The project procures its natural gas feedstock via an existing pipeline at prices linked to the ANR SW Oklahoma index, which has historically been at discount to Henry Hub prices and is an important advantage compared with some domestic and foreign competitors. IFCo has entered into natural gas call swaptions through 2023 to moderate the risk of a reversal in gas pricing trends. In addition, the project will fund a hedging reserve account or enter into further call swaptions to help mitigate price risk during the non-hedged period through 2025, which would also dispense with the requirement to fund a reserve. Improving Operating Profile - Operation Risk: Midrange The project has demonstrated a strong and improving production rate and lower outages. Non-feedstock O&M and maintenance cost projections have not been tested over an extended period of time, and the project may require several years of operations to establish a stable cost profile. The use of commercially proven technologies and a plant design with oversized capacity should help mitigate operating performance risk. Standard Debt Structure - Debt Structure: Midrange Fixed-rate, fully amortizing debt structure with some refinance risk is consistent with other project financings. Relatively high equity distribution triggers and a debt service reserve equivalent to six months of maximum senior bond payments support debt repayment during periods of low operating cash flow. Operating and major maintenance reserves help shield the project from cash flow shortfalls and can be tapped to meet debt service, if needed. Financial Summary The project's ability to meet ongoing mandatory debt payments is vulnerable to product pricing remaining at currently depressed levels on a sustained basis. Fitch's rating case debt service coverage ratios (DSCRs) are averaging 2.01x with a minimum of 1.38x through debt maturity using prices that are higher than 2020 actual market prices. The project's coverage profile demonstrates significant volatility partially driven by its turnaround schedule, but the project should have enough liquidity to mitigate any short-term cash flow deficiencies and can adjust its turnaround schedule to manage its financial profile. Relatively high equity distribution triggers help the project retain cash balances during low cash flow periods. PEER GROUP IFCo's peer group includes merchant project financings in which product sales are susceptible to the inherent volatility of commodity markets. Merchant projects in the 'B' rating category or lower typically are exposed to price and volume risk, and operate in a business environment with highly volatile margins. Merchant projects that have achieved ratings in the 'BB' category have demonstrated some combination of long-term margin protection, materially lower leverage, structural enhancements, or a proven, quasi-monopolistic competitive advantage. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Production and margin levels that lead to a revised rating case DSCR profile at or above 1.7x; -- Successful refinancing of 2023-2025 bond maturities leading to a stronger financial profile; -- Continued deleveraging that leads to a materially improved financial profile. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Operational performance below expectations or weakening in near-term product prices; -- A fundamental shift in the supply-demand balance or global producer cost curve that results in materially lower operating margins expected to persist over a long period; -- Failure to refinance 2023-2025 bond maturities leading to a heightened risk of payment default; -- Inability to effectively manage operating costs or failure to reach and sustain projected capacity and utilization rates. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT UPDATE In 2020 the project's Fitch calculated actual DSCR was 1.58x, higher than Fitch's base and rating case expectation of 1.15x. The EBITDA was lower than the budget due to a weak pricing environment that followed a decrease in commodity prices. However, the project's fixed production costs and most other costs have been lower than budget, making up for some of the lost revenues. In February of 2021 the project redeemed $147.2 million of outstanding bonds using liquidity from its parent, OCI NV, in the form of equity. This transaction reduces the project's debt burden and interest costs by $9 million annually, leading to an improvement in its financial profile. In 2020 the project maintained its strong production rate, well above nameplate capacity. Its actual production for upstream products exceeded Fitch's base case expectations, and the project experienced only modest outages all of which have been satisfactorily resolved. The Covid-19 pandemic did not have a major impact on operations. However, the pandemic and low commodity prices led to a significant decline in nitrogen fertilizer prices. The realized 2020 prices were lower than 2019 prices and 2018 prices. The prices started to recover at the end of 2020, with early 2021 prices higher by 30-55% depending on the product. IFCo's operating margins remain dependent on favorable market pricing for nitrogen products. The pricing of nitrogen products is somewhat correlated to the price of feedstock, which may be oil, coal or natural gas depending on the region and producer. In recent years, the substantial declines in oil and natural gas prices have driven nitrogen prices to levels approaching 10-year lows. Although the prices have seen significant recovery compared to their lows in 2017, they continue to be highly volatile. It remains to be seen if positive pricing trends materialize, which will drive the project's future credit profile now that it has reached full operational phase. Favorably, U.S. natural gas prices trade at a significant discount to global energy prices and are close to 50% of what was projected in 2013, providing the project with a competitive advantage. U.S. gas prices are expected to remain low into the foreseeable future. The project has access to abundant natural gas feedstock at prices currently below Henry Hub. It has put in place forward purchases to crystalize some of this upside. Interior U.S. premiums such as in the Cornbelt states have largely remained intact as there remains insufficient regional supply to meet demand, benefitting the project. The project team believes that a lack of new U.S. capacity, continued regional demand in the Midwest and substantial transportation advantage will continue to support ammonia price premiums enjoyed by the Cornbelt producers. FINANCIAL ANALYSIS Fitch's rating case has been revised to reflect updated product prices in 2021 based on management projections, feedstock prices and assumptions regarding planned future refundings. Relative to Fitch's base case, for the rating case Fitch additionally assumes 10% non-feedstock cost stress, 7.5% production level stress and average 2018 product prices with 2% annual escalation after 2021. Based on discussions with the project management team, Fitch incorporated assumptions regarding several refundings to achieve lower interest payments and to improve the debt amortization profile, most significant of which is a partial refunding of 2023 to 2025 maturities. The rating case scenario puts increased pressure on the financial profile and suggests that IFCo may face substantial volatility in its coverage profile, partially due to its turnaround schedules. The rating case DSCRs average 2x with 1.38x minimum. Fitch anticipates that the project will have sufficient liquidity to mitigate any short-term cash flow deficiency and can adjust its turnaround schedule to manage its financial profile. 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. IQVIA INC: S&P Rates New Euro-Denominated Sr. Unsecured Notes 'BB' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB' rating and '5' recovery rating to IQVIA Inc.'s proposed senior unsecured notes due 2026 and 2029. The '5' recovery rating indicates its expectation for modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. S&P said, "We expect the company to use the proceeds from these notes to redeem its 3.25% senior unsecured notes due 2025 and to pay fees and expenses related to this offering, since the transaction is leverage neutral. "Our 'BB+' long-term issuer credit rating and stable outlook on the company's parent, IQVIA Holdings Inc., remain unchanged." The business benefits from sizable scale (2020 revenue of $11.4 billion), strong market positions in both its Technology & Analytics Solutions and Research & Development Solutions segments, and recurring revenue in its information business. The company also benefits from favorable industry dynamics of increasing outsourcing penetration and a healthy environment for pharmaceutical research and development. However, leverage remains elevated for the rating. S&P Global Ratings-adjusted debt to EBITDA was approximately 5x as of Dec. 31, 2020. S&P said, "We expect revenue and EBITDA to increase at a brisk rate in 2021, recovering from 2020 lows, and for the company to generate solid free cash flow of about $1 billion. In addition, the company has stated its intention to reduce leverage over the next two years, and we expect debt to EBITDA to decline to about 4.4x-4.7x in 2021." ISAGENIX INTERNATIONAL: Moody's Completes Review, Retains Caa2 CFR ------------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Isagenix International, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Isagenix's CFR Caa2 reflects Moody's concern that competitive, economic, and structural headwinds, and senior management turnover will continue to create challenges for the company to stem revenue declines and quickly execute a turnaround strategy. Moody's view liquidity as weak. Moody's also believe that certain social elements, including changes to consumer shopping patterns and the attractiveness of individuals serving as sales representatives at Isagenix, may negatively impact the company's "multi-level marketing" business model. The company's multi-level marketing structure also increases the risk of adverse regulatory and/or legal actions, and the potential for actions by regulatory authorities can't be ruled out. The company will face difficulty mitigating revenue and earnings declines. This will impact Isagenix's credit metrics, constrain its ability to repay debt, and pressure the company's liquidity. Isagenix's credit profile is supported by the company's broad product suite, and a variable cost structure given the outsourced manufacturing model, as well as sales commissions and marketing expenses that fluctuate with sales volume. Moody's expect the company's variable cost structure will lead to modestly positive free cash flow in 2020 despite continued revenue declines. Social factors driven by an aging population and obesity trends that support demand for health, wellness and weight loss products also benefit the credit profile. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. JP INTERMEDIATE: Moody's Completes Review, Retains Caa3 CFR ----------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of JP Intermediate B, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations JP Intermediate B, LLC's (indirect parent company of The Juice Plus Company LLC) Caa3 Corporate Family Rating reflects the company's high financial leverage, elevated risk of a distressed exchange or other restructuring, weak liquidity, aggressive financial policies, inherent risks of a direct selling business model, narrow product line of nutritional supplements, and high turnover of new members. The rating is supported by a variable cost structure and social factors driven by an aging population and obesity trends which support demand for health, wellness, and weight loss products. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. KNOTEL INC: Digiatech Can File Reply to Bid Procedures for Assets ----------------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware granted Digiatech, LLC, leave to file amended and restated statement in support of Knotel, Inc. and its affiliates' proposed bidding procedures in connection with the sale of substantially all assets to Digiatech, LLC or its designee for $70 million, subject to overbid. Digiatech is permitted to file the Reply attached to the Motion for Leave as Exhibit B. A copy of the Bid Procedures and APA is available at https://tinyurl.com/26m35wjz from PacerMonitor.com free of charge. About Knotel Inc. Knotel -- http://www.Knotel.com/-- is a flexible workspace platform that matches, tailors, and manages space for customers. New York-based Knotel offers workspace properties such as desks, open, and private spaces on rent for companies in 20 global markets. In the U.S., Knotel primarily serves in the New York City and San Francisco areas. Knotel, founded in 2015, raised hundreds of millions of dollars from investors. It expanded rapidly for years and was one of the more aggressive competitors in the co-working and flexible office space sector, becoming one of WeWork's fiercest rival. As the COVID-19 pandemic upended the co-working industry, Knotel, Inc., and its U.S. subsidiaries sought Chapter 11 protection (Bankr. D. Del. Case No. 21-10146) on Jan. 30, 2021, to pursue a sale of the assets to Newmark Group. Knotel estimated $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. Morris, Nichols, Arsht & Tunnell LLP is serving as the Company's counsel. Moelis & Company is the investment banker. Omni Agent Solutions is the claims agent. KNOTEL INC: Extends Sale Timeline to Pacify Creditors ----------------------------------------------------- Law360 reports that workspace provider Knotel Inc. told a Delaware bankruptcy judge Thursday, Feb. 19, 2021, that it had reached a deal with unsecured creditors to add two weeks to its Chapter 11 sale timeline after those creditors argued that the plan was moving too quickly. During a virtual hearing, debtor attorney Mark Shinderman of Milbank LLP said Knotel understood the concerns raised by the official committee of unsecured creditors about the originally proposed sale timeline and engaged in fruitful negotiations to resolve the opposition. "We understood the request for more time," Shinderman told the court. About Knotel Inc. Knotel -- http://www.Knotel.com/-- is a flexible workspace platform that matches, tailors, and manages space for customers. New York-based Knotel offers workspace properties such as desks, open, and private spaces on rent for companies in 20 global markets. In the U.S., Knotel primarily serves in the New York City and San Francisco areas. Knotel, founded in 2015, raised hundreds of millions of dollars from investors. It expanded rapidly for years and was one of the more aggressive competitors in the co-working and flexible office space sector, becoming one of WeWork's fiercest rival. As the COVID-19 pandemic upended the co-working industry, Knotel, Inc., and its U.S. subsidiaries sought Chapter 11 protection (Bankr. D. Del. Case No. 21-10146) on Jan. 30, 2021, to pursue a sale of the assets to Newmark Group. Knotel estimated $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. Judge Mary F. Walrath oversees the cases. The Debtors tapped Milbank LLP as their bankruptcy counsel, Morris Nichols Arsht & Tunnell LLP as Delaware bankruptcy co-counsel, Fenwick & West LLP as corporate counsel, and Moelis & Company LLC as investment banker and financial advisor. The Debtors also hired Ernst & Young LLP to provide tax services. Omni Agent Solutions is the claims agent and administrative agent. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Potter Anderson & Corroon, LLP and Lowenstein Sandler, LLP. KNOW LABS: Incurs $5.3 Million Net Loss for Quarter Ended Dec. 31 ----------------------------------------------------------------- Know Labs, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $5.30 million on zero revenue for the three months ended Dec. 31, 2020, compared to a net loss of $3.01 million on $117,393 of revenue for the three months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $3.22 million in total assets, $7.87 million in total current liabilities, $14,602 in total non-current liabilities, and a total stockholders' deficit of $4.66 million. Net cash used in operating activities was $1,421,000, $3,913,803 and $3,104,035 the three months ended Dec. 31, 2020 and the years ended Sept. 30, 2020 and 2019, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of Dec. 31, 2020, the Company's accumulated deficit was $61,265,612. The Company has limited capital resources. These conditions raise substantial doubt about its ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to its consolidated financial statements for the year ended Sept. 30, 2020 includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. "The Company believes that its cash on hand will be sufficient to fund our operations until July 31, 2021. The Company may need additional financing to implement our business plan and to service our ongoing operations and pay our current debts. There can be no assurance that we will be able to secure any needed funding, or that if such funding is available, the terms or conditions would be acceptable to us. If we are unable to obtain additional financing when it is needed, we will need to restructure our operations, and divest all or a portion of our business. We may seek additional capital through a combination of private and public equity offerings, debt financings and strategic collaborations. Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. Equity financing, if obtained, could result in dilution to the Company's then-existing stockholders and/or require such stockholders to waive certain rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, the Company may be required to delay, scale back, eliminate the development of business opportunities and our operations and financial condition may be materially adversely affected," Know Labs said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1074828/000165495421001737/knwn_10q.htm About Know Labs Know Labs, Inc., was incorporated under the laws of the State of Nevada in 1998. Since 2007, the Company has been focused primarily on research and development of proprietary technologies which can be used to authenticate and diagnose a wide variety of organic and non-organic substances and materials. The Company's Common Stock trades on the OTCQB Exchange under the symbol "KNWN." Know Labs reported a net loss of $13.56 million for the year ended Sept. 30, 2020, compared to a net loss of $7.61 million for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $4.68 million in total assets, $6.57 million in total current liabilities, $23,256 in total non-current liabilities, and a total stockholders' deficit of $1.91 million. BPM LLP, in Walnut Creek, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 29, 2020, citing that the Company has sustained a net loss from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. KNOWLTON DEVELOPMENT: Moody's Completes Review, Retains B3 CFR -------------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Knowlton Development Corporation Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Knowlton Development Corporation, Inc.'s ("KDC/ONE") B3 Corporate Family Rating reflects the company's high financial leverage, aggressive appetite for partially debt financed acquisitions and partially debt financed shareholder distributions, revenue and earnings volatility based on customer volume and product development, and some customer concentration. The rating is supported by the company's growing presence as a global manufacturer specializing in custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands, supported by solid innovation capabilities, and long standing customer relationships, and raw material pass-through arrangements that minimize exposure to volatile input prices. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. LADAN INC: Files Projections Ahead of March 9 Hearing ----------------------------------------------------- Ladan Inc. filed its five-year projections in connection with its Combined Plan of Reorganization and Disclosure Statement. A hearing is scheduled for March 9, 2021, at 1:30 p.m. According to the plan projections, the Debtor will pay general unsecured creditors $25,127 per quarter throughout the five-year term of the Plan. On Feb. 18, 2021, the Debtor filed a Plan that provides for holders of undisputed general unsecured claims to share in a fund totaling $502,544, which will likely result to a 10% recovery. The Debtor will pay $25,127 per quarter for a period of 20 quarters to finance the GUC fund. In the prior iteration of the Plan, unsecured creditors were to receive a total of $401,890, for a recovery of 8%. A full-text copy of the combined plan and disclosure statement dated Feb. 18, 2021, is available at https://bit.ly/3pAYqEJfrom PacerMonitor.com at no charge. A copy of the Feb. 19, 2021 plan projections is available at https://bit.ly/2Zz0hz1 About Ladan Inc. Ladan, Inc. -- http://ludwigsfinewine.com/-- is a privately held company that owns and operates wine, beer, and liquor stores. Ladan, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30130) on Feb. 6, 2020. The case is assigned to Judge Dennis Montali. In the petition signed by Magid Nazari, president, the Debtor had $258,503 in assets and $7,672,414 in liabilities. Jeffrey Goodrich, Esq., at GOODRICH & ASSOCIATES, is the Debtor's counsel. LAGO RESORT: S&P Downgrades ICR to 'CCC-', Outlook Negative ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on New York casino operator Lago Resort & Casino to 'CCC-' from 'CCC', its issue-level rating on its first-lien debt to 'CCC+' from 'B-', and its issue-level rating on its second-lien term loan to 'C' from 'CC'. The negative outlook reflects S&P's belief that a restructuring of some form is increasingly likely in the next six months given the elevated likelihood of a covenant violation in the first quarter of 2021 and the company's sizable debt maturities due in September. The downgrade reflects Lago's increasing likelihood of default because of its weak liquidity and sizable near-term debt maturities. S&P said, "The company has minimal excess cash on hand and we expect its cash flow generation will be insufficient to fund all of its cash fixed charges this year. Additionally, Lago's $10 million revolver and a $20 million term loan (unrated) mature in September 2021. We do not expect the company to be able to meet these debt maturities absent some form of capital raise, which we believe could be challenging given our view that its credit measures were unsustainable prior to the emergence of COVID-19. This increases the risk that it will experience a payment default or engage in a restructuring transaction that provides its lenders with less than they were originally promised, which we would view as a distressed exchange." S&P said, "We expect Lago to violate its financial maintenance covenants when testing resumes in the March 2021 quarter. In 2020, the company's lenders agreed to suspend covenant testing for the June, September, and December 2020 quarters. Absent an additional waiver or amendment from its lenders, its covenant testing will resume in the first quarter of 2021. Although the 2020 amendment modified how its EBITDA is calculated for the purposes of measuring its covenant compliance and will annualize its first-quarter 2021 EBITDA in measuring its first-quarter covenants, we expect Lago's EBITDA to be significantly impaired in the first quarter relative to 2019 given the material operating restrictions due to COVID-19, including an early closure requirement. The company's credit agreement contains an equity cure provision, whereby equity contributions are treated as EBITDA for the purposes of calculating its covenant compliance. "Lago's owners have provided it with material equity support in the past to enable it to maintain its covenant compliance, facilitate its amendments, and repay debt. However, we believe there are limits to the amount of support its owners will be willing to provide, given the entity's already unsustainable capital structure prior to the COVID-19 pandemic and our view that the significant operating restrictions related to the pandemic are exacerbating Lago's inability to service its capital structure and meet its future debt obligations. We expect the company's operating performance to remain weak at least through the first half of 2021 because of significant COVID-19 operating restrictions and its long closure in 2020, which we believe may have led its customers to frequent other nearby casinos." Lago's nearest competitors are both Native American gaming operators. Because they operate on sovereign land, both casinos reopened sooner than Lago and are not subject to the same state-imposed operating restrictions. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety S&P said, "The negative outlook on Lago reflects our expectation that it will likely engage in a debt exchange or restructuring that we consider to be distressed given its limited access to the capital markets and weak liquidity, which is compounded by the upcoming maturities of $30 million of its debt in September 2021 as well as our forecast for a covenant violation as of the March 2021 measurement date absent an equity cure or further waiver from its lenders. "We could lower our rating on Lago if it completes an exchange offer, restructuring, or other action (including maturity extensions) that we view as distressed because it provides its lenders with less than they were originally promised, misses an interest or principal payment, or files for bankruptcy. "We could raise our rating on Lago if we no longer believe it will engage in a distressed transaction in the near term. This would most likely occur if the company's cash flow recovers sufficiently such that we believe it would cover its cash fixed charges and it is able to access the capital markets to address its 2021 maturities in a manner that we don't view as distressed." LAX IN-FLITE: Seeks to Hire G&B Law as Bankruptcy Counsel --------------------------------------------------------- LAX In-Flite Services, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire G&B Law, LLP as its bankruptcy counsel. The firm will provide these services: a. advise Debtor as to its duties, rights and powers; b. represent the Debtor, with respect to bankruptcy issues, in the context of its pending Chapter 11 case and represent the Debtor in contested matters that would affect the administration of the case; c. assist the Debtor in negotiating and seeking court approval to sell substantially all its assets and in formulating and confirming a Chapter 11 plan; d. render services for the purpose of pursuing, litigating or settling litigation; e. other legal services. The firm received a total of $100,000 as a pre-banruptc retainer. Jeremy Rothstein, Esq., a partner at G&B Law, disclosed in a court filing that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeremy Rothstein, Esq. G&B LAW, LLP 16000 Ventura Boulevard, Suite 1000 Encino, CA 91436 Tel: 818-382-6200 Fax: 818-986-6534 Email: jrothstein@gblawllp.com About LAX In-Flite Services LAX In-Flite Services, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-10956) on Feb. 5, 2021. Mark Berlin, authorized representative, signed the petition. In the petition, the Debtor disclosed $212,676 in assets and $6,532,846 in liabilities. Judge Neil W. Bason oversees the case. G&B LAW, LLP serves as the Debtor's legal counsel. LBLA VENTURES: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: LBLA Ventures, Inc. 7770 Venture Street Colorado Springs, CO 80951 Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Colorado Case No.: 21-10805 Judge: Hon. Joseph G. Rosania Jr. Debtor's Counsel: David J. Warner, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwarner@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Aaron Avery, CEO. The Debtor stated it has no unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OZX4QNY/LBLA_Ventures_Inc__cobke-21-10805__0001.0.pdf?mcid=tGE4TAMA LEWISBERRY PARTNERS: Selling 3 Lewisberry Properties for $792K -------------------------------------------------------------- Lewisberry Partnership, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for the entry of an Order: (i) granting expedited consideration, shortened time and limited notice; (ii) granting the Debtor authority to sell at private sales the Real Properties located at (a) 2 Kingswood Drive, in Lewisberry, Pennsylvania 17339, to Andrew J. Kaehler and Peggy A. Kaehler for $257,000; (b) 8 Kingswood Drive, in Lewisberry, Pennsylvania 17339, to Kristine Fischer and Jamie T. Fischer for $265,000; and (c) 16 Kingswood Drive, in Lewisberry, Pennsylvania 17339, to Bobby Hile and Sara Hile for $270,000; and (iii) to assume certain Prepetition Agreements of Sale ("Prepetition Agreements of Sale") for the Real Properties and the purchasers. Since 2018, the Debtor has been in the business of buying, leasing, and selling single-family residential real property located in Lewisberry, Pennsylvania. On June 26, 2019, it acquired 30 improved townhomes located in Lewisberry, York County, Pennsylvania ("Lewisberry Properties") in the community commonly known as Glenbrook Townhomes at Pleasant View. The Debtor acquired the Lewisberry Properties from Eastern Development & Planning, Inc., for a purchase price of $4 million. The Lewisberry Properties were approved for development in the Final Subdivision Plan for Phases 2 & 3 of Revised Pleasant View Planned Residential Development, recorded in the Office of the Recorder of Deeds in and for York County, Pennsylvania in Plan Book SS, Page 709. The Real Properties are part of the Lewisberry Properties. Each of the lots contained within the Project consists of a residential dwelling. In addition to offering the residential dwellings for sale, the Debtor also leases certain of the Lewisberry Properties. Prior to the Petition Date, on June 26, 2019, and in order to fund the purchase of the Lewisberry Properties, the Debtor borrowed funds from Loan Funders LLC, Series 7693 ("Lender") in the original principal amount of $8.025 million ("Loan") as memorialized in that certain Commercial Promissory Note and that certain Loan and Security Agreement each dated June 26, 2019. As security for its obligations to the Lender, also on June 26, 2019, the Debtor, as mortgagor, executed and delivered a Purchase Money Mortgage to the Lender, as mortgagee, in which the Debtor granted the Lender a first mortgage on the Lewisberry Properties as well as a security interest, inter alia, in and to all of its present and future fixtures, rents, profits, and income from the Lewisberry Properties and to the extent that it is determined after trial on the Debtor's claims, that Lender holds a valid, perfected and non-avoidable security interest, which the Debtor disputes, the Lender's security interest in the Lewisberry Collateral or in the proceeds thereof constitutes the cash collateral of Lender. In addition to the Lewisberry Mortgage and as additional security for the Debtor's obligation to Lender, and also on June 26, 2019, certain members of the Debtor, Richard J. Puleo and Lorraine B. Puleo, as mortgagors, executed and delivered a Purchase Money Mortgage to the Lender, as mortgagee, in which the Puleos pledged a first priority mortgage on 20 improved townhomes located in Lewisberry, Pennsylvania ("Puleo Properties") also located in Glenbrook, but owned solely in the name of the Puleos. The Puleo Properties are located at Lots 59 through 78 Scully Place, Fairview Township, York County, PA. As of the petition date, the Lender had asserted a secured claim against the Debtor in the amount of $8.6 million. The Debtor disputes the liens and claims of the Lender and will be scheduling the claim of the Lender as "Disputed" in its Schedules of Assets and Liabilities. The Debtor intends to immediately institute an Adversary Proceeding asserting claims against the Lender and its servicer Fay for, inter alia, breach of the Duty of Good Faith and Fair Dealing, Breach of Contract, and for Equitable Subordination pursuant to Section 510 of the Bankruptcy Code. Since the date of the Note, the Lender has turned over servicing of the Loan Documents to Fay Servicing, LLC, which has repeatedly and intentionally interfered with the operations and contracts of the Debtor in violation of the Loan Documents and applicable law by, inter alia, attempting to change the agreed-upon release prices to the sale of certain of the Lewisberry Properties, thereby preventing the closing on the sale of the Real Properties. Pursuant to Section 2.21(d)(vii) of the Lewisberry Mortgage, the release price for the sale of any of the individual Lewisberry Properties equals 120% of the allocated loan amount for each of the Released Properties. The Release Prices for the Real Properties are calculated as: (i) 2 Kingswood Drive - $223,177.57; (ii) Kingswood Drive - $218,714.01; and (iii) 16 Kingswood Drive - $223,177.57. After weeks of delay, the Debtor was then told "committee" review was being undertaken, which it believes was and is false. The repeated delays have frustrated and prejudiced any efforts of the Debtor to sell the Real Properties and to refinance the Loan. The Debtor avers that Fay administers loans with the purpose of manufacturing and/or forcing a default. The Lender's refusal to accept the agreed-upon Release Price is a breach of the Loan Documents, its duty of Good Faith And Fair Dealing, implied in every contract under Pennsylvania law, and being taken in bad faith. The Debtor has had a number of opportunities to refinance, to which Fay and the Lender have never responded. As a consequence, the Debtor avers that the lien and claim of the Lender are subject to a bonafide dispute. Prior to the filing of the Petition, the Debtor had the Real Properties under Prepetition Agreements of Sale at private sales. The Debtor first put 2 Kingswood on the market in September 2020 and negotiated with the Kaehlers, for the sale of 2 Kingswood by private sale. Prior to the Petition date, it was able to reach an agreement in principle for the sale of 2 Kingswood for $257,000 without contingencies as set forth in greater detail in the Agreement of Sale. The Debtor believes that a sale of 2 Kingswood, was negotiated in the ordinary course of business, at full price, and will best serve the interests of creditors by procuring the almost instant cash infusion of $257,000, and by preventing the further loss and diminution in value to 2 Kingswood by continued operation in an undercapitalized state. The Debtor first put 8 Kingswood on the market in September 2020 and negotiated with the Fischers for the sale of 8 Kingswood by private sale. Prior to the Petition Date, it was able to reach an agreement in principle for the sale of 8 Kingswood for $265,000 without contingencies as set forth in greater detail in the Agreement of Sale. The Debtor believes that a sale of 8 Kingswood was negotiated in the ordinary course of business, at full price, and will best serve the interests of creditors by procuring the almost instant cash infusion of $265,000, and by preventing the further loss and diminution in value to 8 Kingswood by continued operation in an undercapitalized state. As indicated, in order to preserve the sale of 8 Kingswood, the Debtor had to offer the Fischers a Pre-Settlement Possession Addendum to Agreement of Sale because the Fischers sold their prior house and moved from Ohio to Pennsylvania in reliance on their ability to obtain possession of 8 Kingswood. The Debtor first put 16 Kingswood on the market in September 2020 and negotiated with the Hiles, for the sale of 16 Kingswood by private sale. Prior to the Petition Date, it was able to reach an agreement in principle for the sale of 16 Kingswood for $270,000 without contingencies as set forth in greater detail in the Agreement of Sale. The Debtor believes that a sale of 16 Kingswood was negotiated in the ordinary course of business, at full price, and will best serve the interests of creditors by procuring the almost instant cash infusion of $270,000, and by preventing the further loss and diminution in value to 16 Kingswood by continued operation in an undercapitalized state. The Debtor now asks to sell by private sale the Real Properties under Section 363(b),(f), and (m), and to assume at settlement, the Prepetition Sales Agreements pursuant to Section 365(a). In order to close the Sales pursuant to the Prepetition Agreements of Sale, the Debtor must assume the contracts. The Debtor will cure any default in the Prepetition Agreements of Sale by closing on the Sales, and delivery of the Real Properties free and clear of all liens claims and encumbrances, with all respective liens attaching to the proceeds of the Sale. The Real Properties are in good condition and the Debtor has invested in the maintenance and upkeep of the residences on the Real Properties, but the Debtor asks approval of a sale of the Real Properties at private sales, on an "as-is" and "where-is" basis, without any warranty, either express or implied, with all defects, except that the Real Properties are to be sold free and clear of all liens, claims, and encumbrances, with liens, if any are ultimately allowed, tracing to the proceeds. In other words, the Real Properties are being sold subject to all known and unknown conditions. The Debtor intends to retain all net proceeds from the sale of the Real Properties until such time as the Lien of the Lender is deemed Allowed and the value of its real property can be determined. It avers that the Lender is undersecured. The Debtor employed Valerie Taylor designated agent of Keller Williams of Central PA as the broker for the Real Properties. The Purchasers employed brokers to facilitate the sale of the Real Properties as follows: (i) Kaehlers employed George Park and Shawn McGeehan of BHHS Homesale Realty for the purchase of 2 Kingswood, (ii) Fischers employed David Leister of Country Home Real Estate Inc. for the purchase of 8 Kingswood, and (iii) Hiles employed Kelly Kosh of Century 21 Realty Services for the purchase of 16 Kingswood. The names and addresses of the brokers were disclosed to both the Debtor and Purchasers prior to the signing of the Agreement of Sale. The Debtor asks that the Sale Order be effective immediately by providing that the 14-day stay under Bankruptcy Rules 6004(h) is waived. Finally, in accordance with Local Bankruptcy Rules 5070-1(f) and 9014-1, the Trustee asks expedited consideration of the Motion. Expedited consideration is required in order to allow the Debtor to sell the Real Properties, to reduce costs associated with the sale as set forth above. The Debtor asks approval of the request for expedited consideration pursuant to Local Bankruptcy Rule 9014-2 on or before on the earliest possible date available to the Court. A copy of the Agreements is available at https://tinyurl.com/du2ujy42 from PacerMonitor.com. The Purchasers: Kristine Fischer and Jamie T. Fischer 3420 Kingston York, PA 17402 Bobby Hile and Sara Hile 3628 Petre Road Springfield, OH 45502 About Lewisberry Partners, LLC Lewisberry Partners, LLC is primarily engaged in renting and leasing real estate properties. It sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-10327) on February 9, 2021. In the petition signed by Richard J. Puleo, managing member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Eric L. Frank oversees the case. Edmond M. George, Esq. at OBERMAYER REBMANN MAXWELL & HIPPEL LLP is the Debtor's counsel. LIGHTHOUSE RESOURCES: MBTL Selling Equipment to NWA for $75K ------------------------------------------------------------ Lighthouse Resources, Inc. and affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize the sale of Millennium Bulk Terminals-Longview, LLC ("MBTL")'s interests in certain furniture, fixtures, equipment, machinery, vehicles, apparatus, appliances, implements, supplies, tools and various other tangible personal property more fully set forth on Exhibit B, utilized in connection with the operation of a dock facility on the Columbia River in Longview, Washington, to Northwest Alloys, Inc.("NWA") for $75,000, free and clear of liens, claims, encumbrances and interests. A hearing on the Motion is set for March 9, 2021, at 1:00 p.m. (ET). The Objection Deadline is March 2, 2021, at 4:00 p.m. (ET). As set forth more fully in the Debtors' Motion for Entry of an Order (I) Approving the Transition Services Agreement between Millennium Bulk Terminals-Longview, LLC and Northwest Alloys, Inc., (II) Authorizing Rejection of the Millennium Ground Lease and Certain Related Agreements Effective as of January 8, 2021, and (III) Granting Related Relief, MBTL and Northwest Alloys, Inc., a Delaware corporation ("NWA"), entered into a Transition Services Agreement, dated Dec. 23, 2020, as amended and restated by the parties, in which MBTL and NWA agreed to transition control from MBTL to NWA of certain of MBTL's operations conducted in Cowlitz County, Washington ("Millennium Operations"). An order approving the relief was entered on Jan. 4, 2021, and the Millennium Operations were transferred to NWA pursuant to the TSA on Jan. 9, 2021. The Equipment constitutes property of the MBTL, and title thereto is vested in MBTL within the meaning of section 541(a) of the Bankruptcy Code. As MBTL no longer controls the Millennium Operations, it has no further use for the Equipment and desires to sell the Equipment to NWA, free and clear of all liens, claims, encumbrances and interests, for use in the Millennium Operations. Consequently, MBTL asks authorization from the Court to sell its interest in the Equipment to NWA for $75,000 and to enter into an Agreement for Purchase and Bill of Sale. The sale of the Equipment from MBTL to NWA will be an "as is" and "where is" sale, with NWA waiving all warranties of any kind relating to the Equipment. As set forth above, MBTL no longer needs the Equipment. As the current operator of the Millennium Operations, NWA is the logical purchaser of the Equipment. The proposed sale of the Equipment from MBTL to NWA is an arm'-length transaction. MBTL believes the Sales Price is fair and reasonable and that auctioning or liquidating the Equipment would not result in a greater benefit to Debtors or the Debtors' estates and instead would result in additional costs related to marketing, sales commissions, and additional attorney fees both in connection with completing the sale in the time required to extend the case to complete such a sale. Consequently, the Debtors submit that the sale of the Equipment to NWA as set forth in the Motion is a sound exercise of their business judgment. A copy of the Bill of Sale is available at https://tinyurl.com/4u8cmao8 from PacerMonitor.com free of charge. About Lighthouse Resources Lighthouse Resources Inc., is an owner and operates two coal mines located in Wyoming and Montana, delivering low sulfur, subbituminous coal to both domestic and export customers. It also owns and operates the Millennium Bulk Terminal in Longview, Washington.The Company is widely recognized for its extraordinary performance in both safety and environmental stewardship.Its flagship project is the development of a trade route for coal from the Rocky Mountain region of the United States to demand centers in Asia. Utah-based Lighthouse Resources and 13 subsidiaries, including Decker Coal Company, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 20-13056) on Dec. 3, 2020. Lighthouse Resources was estimated to have $100 million to $500 million in assets and liabilities as of the filing. The Debtors tapped JACKSON KELLY PLLC as general bankruptcy counsel and BDO USA LLP as restructuring advisor. POTTER ANDERSON & CORROON LLP is the local bankruptcy counsel. LANG LASALLE AMERICAS, INC. is the marketer and seller of assets related to the dock facility owned by Millennium Bulk Terminals-Longview, LLC. ENERGY VENTURES ANALYSIS is the marketer and seller of Debtors' coal mining assets. STRETTO is the claims agent. LISTO WAY GROUP: Seeks Approval to Hire Bankruptcy Attorneys ------------------------------------------------------------ Listo Way Group, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Louisiana to hire H. Kent Aguillard, Esq., and Caleb Aguillard, Esq., attorneys practicing in Eunice, La., to handle its Chapter 11 case. The attorneys will be paid at these rates: H. Kent Aguillard, Esq. $400 and $475 per hour Caleb Aguillard, Esq. $300 per hour The Debtor paid the attorneys an initial retainer of $25,000. Both attorneys do not represent or hold any interest adverse to the Debtor's estate in the matters upon which they are to be engaged, according to court filings. The attorneys can be reached through: H. Kent Aguillard, Esq. Caleb K. Aguillard, Esq. H. Kent Aguillard 141 S. 6th Street Eunice, LA 70535 Tel: 337-457-9331 Fax: 337-457-2917 Email: kent@aguillardlaw.com About Listo Way Group Listo Way Group, a restaurant franchisee in Louisiana, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 21-50075) on Feb. 12, 2021. Jason Trotter, managing member, signed the petition. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge John W. Kolwe oversees the case. The Debtor is represented by H. Kent Aguillard, Esq., and Caleb Aguillard, Esq. M/I HOMES: Egan-Jones Hikes Senior Unsecured Ratings to BB+ ----------------------------------------------------------- Egan-Jones Ratings Company, on February 11, 2021, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by M/I Homes Incorporated to BB+ from BB. Headquartered in Columbus, Ohio, M/I Homes, Inc. builds single-family homes. M/I HOMES: S&P Upgrades ICR to 'BB-' on Increased Profits --------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Ohio-based M/I Homes Inc. to 'BB-' from 'B+'. S&P said, "At the same time, we are affirming our rating on the company's senior unsecured notes at 'BB-', and we are also revising our recovery rating to '3' from '2' to reflect the application of the unsecured debt cap as we assume the size and ranking of debt and nondebt claims will change prior to a hypothetical default. "Our stable outlook on M/I Homes is based on our view that its EBITDA stays at about 2x debt, EBITDA covers interest by more than 10x, and that debt to capital trends below 40%. "The upgrade reflects significant ongoing profitability improvement at M/I Homes. We forecast EBITDA will increase by about 20% in 2021, after jumping 50%-plus this past year. These gains are partly volume-driven, as we anticipate a second straight year of double-digit-percentage growth in closings in 2021. Indeed, sales improvements are, in our opinion, balanced across all of M/I's 15 markets. This broad-based demand facilitates margin improvements, and we expect gross margin to have risen by more than 200 basis points from 2019 to 2021. "We think benefits will accrue throughout the housing cycle from ongoing market share gains. Though the company operates in only 15 markets, we believe 2020 order growth of almost 40% is faster than the bulk of its competitors (including unrated builders) across most, if not all, of these locales. In our estimation, no other production builder's margin improvement in the second half matched M/I's 250 basis point jump over the six months to December 2020. More importantly, when the housing cycle turns, we would expect less profit diminution for M/I as compared to that of builders with smaller presences in these locales, which we think points to M/I's superior record, brand, and financial strength." The company's Smart Series is driving margins, returns, and discretionary cash flows. Despite an average sales price (ASP) estimated at just $330,000, these more-affordable units generate higher gross margins than M/I's traditional move-up product--priced firmly above its $381,000 overall average (in 2020). Moreover, Smart Series' relatively fast sales pace translates to higher returns on capital, which S&P now pegs in the high-teens percents overall. As such, a larger portion of these quicker-returning profits is further bolstering free operating cash flows, now forecast at more than $100 million for 2021. S&P said, "Our stable outlook on the company is based on our view that during the next 12 months, debt stays at or below 2x EBITDA, that EBITDA covers interest by more than 10x, and that debt to capital trends below 40%. We think M/I's profitability will continue to trend firmly upward over the next year, due to the company's strategic and operational initiatives, further aided by the tailwind of strong broader demand across most U.S. housing markets. Significantly higher sales backlog levels to start 2021 should help ensure what we assume will be a more than 10% increase in closings--and at adjusted gross margin levels that continue to trend higher at almost 25%. Spending this year for new communities beyond 2021 will be financed via operating cash flows, with debt unchanged at $900 million. "We consider these to be two separate routes for M/I Homes to merit the next higher rating of 'BB'. The first would be to achieve revenues of about $4 billion, which would approximate or approach the level for two of the three existing 'BB'-rated builders (KB Home and Mattamy Group), though much smaller than the third (Taylor Morrison). Alternatively, the company would need to sustainably bring debt to EBITDA at or below 2x. "We expect the company to maintain stronger credit ratios than typically associated with the rating while the housing industry remains relatively healthy and stable. Therefore: "In a healthy market, we would lower our rating on M/I Homes if we expected it to sustain its debt to EBITDA at more than 3x. We would anticipate this could occur if the company added almost $500 million in debt for further growth. "In a weaker-than-expected housing market, we would expect the current cushion in credit ratios to deteriorate and we would look to a 4x debt-to-EBITDA threshold for a downgrade. The latter scenario could occur if EBITDA came in at under $250 million, or nearly 50% below our 2021 forecast, through say a 10% drop in revenues and about a 300 basis point decline in EBITDA margins from 2020 levels." MALLINCKRODT PLC: Asks Judge to OK $114 Million Loan Prepayment --------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that Mallinckrodt PLC has asked its bankruptcy judge to sign off on a $114 million prepayment of term loan principal to avoid conflict with those lenders, court papers show. The prepayment is required under a credit agreement, and failing to make it could expose Mallinckrodt to costly default claims, the drug maker argues in its motion. Mallinckrodt's bankruptcy plan calls for the reinstatement of its term loans, although some holders of those loans have said they don't support the deal. "In the exercise of their business judgment, the Debtors believe that making the Mandatory Prepayment is in the best interests of their estates. As indicated in previous filings, the Restructuring Support Agreement provides for the reinstatement of the Term Loans as part of the Debtors' contemplated plan of reorganization. Making the Mandatory Prepayment will avoid potentially creating an argument that a Default or an Event of Default has occurred under the Credit Agreement as a result of the non-payment, eliminate the possibility that the Debtors might be required to pay default interest on any unpaid amount of the Mandatory Prepayment, and best position the Debtors in any litigation over reinstatement. In addition, as with other cases in which oversecured debt has been repaid outside of a plan, making the Mandatory Prepayment will allow the estates to capture direct economic benefits from using cash earning a lower rate of interest to repay oversecured debt accruing interest at a higher rate. And because the Term Loans are expected to recover in full, making the Mandatory Prepayment at this time simply advances to the Term Lenders funds that would otherwise become due to them at a later date, without risking the incurrence of default interest or other penalties that would reduce the recoveries of other stakeholders," Michael J. Merchant, of RICHARDS, LAYTON & FINGER, P.A., explained in court filings. About Mallinckrodt PLC Mallinckrodt is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. Visit http://www.mallinckrodt.com/for more information. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware in the U.S. (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley LLP as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon Advisers LLC as its financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid related claimants. The OCC tapped Akin Gump Struss Hauer & Feld LLP as its lead counsel, Cole Schotz as Delaware co-counsel, Province Inc. as financial advisor, and Jefferies LLC as investment banker. MALLINCKRODT PLC: Says Rival Unlawfully Recruited Its Workers ------------------------------------------------------------- Mallinckrodt PLC commenced an adversary proceeding on Feb. 17, 2021, in Delaware bankruptcy court accusing a competitor of unlawfully recruiting its employees and causing millions of dollars of harm to the company. Law360 reports that in the court filings, Mallinckrodt said Dendreon Pharmaceuticals hired two Mallinckrodt employees to senior executive positions last summer of 2020 and since then has been recruiting other Mallinckrodt workers to resign and join Dendreon in violation of their employment agreements. The suit also names several individuals who Mallinckrodt said took jobs at Dendreon while still employed with the debtor and used their "dual employment" status to induce others to leave Mallinckrodt. "The ongoing harm to Mallincrodt due to the Defendants' unlawful activities is substantial and irreparable. Although it is not possible to quantify the impact of Dendreon's unfair competition at this time, these employee departures will likely cost the Company millions of dollars in lost sales, onboarding costs to hire and train replacement employees, and harm to customer relationships and company goodwill," the Complaint said. Millinckrodt seeks, among other things: (1) preliminary and permanent injunctive relief to enjoin further tortious conduct and contractual breaches by the Defendants; (2) damages stemming from the Defendants' unlawful and unfair competition; (3) a declaratory judgment declaring the parties' rights and obligations under applicable contracts; and (4) the recovery and withholding of salary, incentive compensation, and/or benefits fraudulently obtained by the Individual Defendants. The case is Mallinckrodt Enterprises LLC et al v. Kurt Brushaber, Alan Killick, Douglas Gill, Andrew Winecoff, Joseph Smith, and Dendreon Pharmacueticals LLC, a wholly-owned subsidiary of Sanpower Group Co., Ltd. Adv. Proc. Case No. 21-50139, In re Mallinckrodt PLC, et al. (Bankr. D. Del. Case No. 20-12522). About Mallinckrodt PLC Mallinckrodt is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On the Web: http://www.mallinckrodt.com/ On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware in the U.S. (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley LLP as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon Advisers LLC as its financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid related claimants. The OCC tapped Akin Gump Struss Hauer & Feld LLP as its lead counsel, Cole Schotz as Delaware co-counsel, Province Inc. as financial advisor, and Jefferies LLC as investment banker. MARY CECILIA RIDGEWAY: Flemisters Buying Corona Property for $838K ------------------------------------------------------------------ Mary Cecilia Ridgeway asks the U.S. Bankruptcy Court for the Central District of California to authorize the sale of the residential real property located at 1121 Hummingbird Lane, in Corona, Riverside County, California, APN 102-192-015, to Clayton and Amy Flemister for $838,000, subject to overbid. A hearing on the Motion is set for March 11, 2021, at 1:30 p.m. Objections, if any, must be filed no later than 14 days prior to the hearing date. Shortly after the Petition Date, Agent Hugo Balarezo began working with the Debtor to get the Residence ready for listing. The Debtor filed an application to employ the Agent as the Estate's real estate agent on Jan. 25, 2021. No opposition has been filed to the application to employ Agent and an order on the employment is pending before the Court. The U.S. Trustee requested a supplemental declaration be filed by the Agent before the Debtor submits a proposed order. The supplemental declaration is forthcoming. The Debtor owns the Residence with a scheduled value of $845,000 which is her residence. There is a first deed of trust ("1st DOT") recorded against the Residence owed approximately $670,000 in favor of Select 24 Portfolio Servicing, Inc. based on the Notice of Trustee Sale that was sent to the Debtor just a couple weeks before filing the Case. There is a Riverside County Tax Collector ("RCTC") statutory lien against the Residence owed approximately $3,150.27. There is also a judgment lien recorded against the Residence owed approximately $4,606.38 in favor of American Express Bank, FSB ("AMX") and recorded on Nov. 16, 2011 as Instrument No. 2011-0511112 in Riverside County. The Debtor filed a previous Chapter 7 and received a discharge. She was unaware of the AMX Lien at the time of filing. AMX's counsel has agreed to enter into a stipulation to allow AMX's claim to be treated as wholly unsecured and will not receive payment from the sale. On Schedule C, the Debtor claimed a homestead exemption as to the equity in the Residence in the amount of $488,250. She has discussed the value, condition and market conditions with the Agent and has determined the Value to be an accurate value. The estimated Value of the Residence is based on market conditions in the area and both an interior and exterior inspection of the Residence completed by the Agent. The Debtor estimates that there will be net proceeds from the sale of approximately $105,000 if the Residence is sold for the Value estimated. The Residence is to. be sold and the proceeds will be enough to pay all the administrative costs in the case and all of the claims in the case as well as allow the Debtor to reinvest her homestead exemption in something more economically feasible for her going-forward budget. The Debtor has conducted a search of all known liens, claims, and interests in the Residence as set forth in the Preliminary Title Report, there are no other claims against the Residence for which she is aware. Title to the Residence is held as Mary C Ridgeway, married woman, who previously took title as Mary C Ridgeway, an unmarried woman. A Trustee Sale was set by her lender for Jan. 6, 2021. The Debtor retained counsel to file an emergency voluntary petition under Chapter 11 of the Bankruptcy Code on Jan. 5, 2021. She now proposes to sell the Residence free and clear of all liens, claims and interests. On Jan. 9, 2021, the Debtor received an offer from the Buyers for $845,000, and she and the Buyers entered into a Real Estate Purchase Agreement ("REPA") which required the Buyers to make an initial deposit with escrow of $25,200. However, after inspections and an appraisal, the Buyers requested various concessions and the Debtor conceded to some after negotiations ensued. These concessions are discussed in Request for Repairs 1 and 2 ("Addendums") which are attached to the REPA and found at pages 26 through 30 of Exhibit 2. Based on the Addendums, the Buyers' are offering to buy the Residence for $845,000 and receiving total credits of $7,000 at the closing of escrow. The Agent has agreed, upon consummation of a sale, to a real estate agent's commission in an amount equal to 5% of the purchase price, provided that the Estate nets at least such like amount. This makes the Offer Price the equivalent of a sale price of $838,000 ("Initial Bid") by anyone else making an offer where they would be receiving no credits. The Buyer's offer is the highest and best offer received by the Debtor to date. The Debtor has determined that it is in the best interest of the Estate to proceed with the sale of the Residence to the Buyers for the Offer Price under the terms contained in the REPA. In connection with the sale, the Debtor anticipates paying the First DOT, all real property taxes owed to the Riverside County Tax Collector and secured against the Residence, in full in connection with the sale. She also anticipates paying all costs of sale in accordance with the REPA which includes the real estate agent commission in the amount of 5% of the Offer Price of the Residence. Assuming a purchase price of $845,000, the amount of $42,250 will be paid to Agent when the sale is completed. The Debtor proposes to distribute the sale proceeds, from the sale, in the amounts estimated below and in the following manner: Sale Price $845,000 1St DOT ($670,000) Riverside County Property Taxes ($ 3,200) Brokers’ Commissions (5% ofnet sales price) ($ 42,250) Title, escrow, taxes, recording charges ($ 16,900) (approximately 2%) Credits to Buyers Per Addendums to REPA ($ 7,000) Estimated "Net Proceeds" from Escrow $105,650 Homestead Exemption $488,250 The Net Proceeds are to be paid to the Debtor's Counsel's trust account, with the AMX Lien and the Debtor's Homestead Exemption attaching to the Net Proceeds if a stipulation is not filed with the Court prior to the hearing on the Motion, and no further distribution/use of those funds will be made until further order of the Court. The proposed sale is subject to overbids. The initial deposit will be refundable only if the conditions to the sale are not satisfied or the Buyers are not the successful bidders in the event overbids are received. The proposed sale will be "as is, where is," "with all faults," and with no warranties, and the transfer of the Residence will be by grant deed. The Bid Deadline is March 10, 2021, at 5:00 p.m. Any Overbid must provide for a minimum purchase price of at least $845,000 based on the exact terms of the Offer Price or $838,000 if the Bidder is not seeking credits of $7,000 like the Buyers do. Any Overbid must not contain any financing, due diligence, or any other contingency fee, termination fee, or any similar fee or expense reimbursement. Any Overbid must be accompanied by a deposit of $25,200. If the Debtor receives a timely, conforming Overbid for the Residence, the Court will conduct an auction of such Residence at the hearing, in which all Qualified Bidders may participate. The increments for bidding (after an initial Overbid of $10,000) is in $1,000 increments or more. The bidding will commence at $848,000 ($10,000 over the Buyers' Initial Bid of $838,000 taking into account their credit) or $855,000 based on the same terms as the Offer Price. The Court will determine which of the bids is the best bid. The Successful Bidder must pay, at the closing, all amounts reflected in the Best Bid in cash and such other consideration as agreed upon. In compliance with Rule 6004(f)(1), the Debtor will provide a copy of the escrow closing statement to the Office of the United States Trustee within 10 days of the close of escrow. The Debtor asks that the Court authorizes the sale to be effectuated immediately upon entry of the order approving the Motion, waiving the 14-day stay required under Rule 6004(h). A copy of the REPA is available at https://tinyurl.com/1kowp6lk from PacerMonitor.com free of charge. The Purchasers: Clayton and Amy Flemister 835 E Sandpoint Ct Carson, CA Mary Cecilia Ridgeway sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 21-10018) on Jan. 5, 2021. The Debtor tapped Summer Shaw, Esq., as counsel. MATTHEW O'REILLY: Foxtrot Burger Owner in Chapter 7 --------------------------------------------------- Patrick Rehkamp of Minneapolis / St. Paul Business Journal reports that Matty O'Reilly, the man behind St. Paul's Foxtrot Burger Spot, Bar Brigade and Minneapolis' Republic, has filed for personal bankruptcy protection. Those restaurants closed amidst the Covid-19 pandemic and government-mandated shutdowns and restrictions. His restaurant consultancy business, Banner Year Advisors, also closed in 2020, according to a Business Journal story. O'Reilly lists liabilities of more than $3 million and assets of roughly $643,000 in the filing. Among the biggest creditors that appear to be business-related from the November filing: * Rick Guntzel, O'Reilly's business partner in several ventures, has a $803,000 non-priority unsecured claim related to a partnership buyout. * Sarasota, Fla.-based Preston Properties has a $447,344 non-priority unsecured claim related to a personal guaranty or commercial lease. It's unclear which property that involves. * St. Paul-based Firstborne Properties has a $337,999 non-priority unsecured claim related to a personal guaranty or commercial lease. It's unclear which property that involves. The U.S. Small Business Administration has a $266,000 non-priority unsecured claim related to a Paycheck Protection Program loan. There's also a similar item listing the SBA for $210,000. Marc Maslow has a $110,000 non-priority unsecured claim related to a seller-financed business sale from 2017. Mr.Maslow owned Dan Kelly's Bar & Grill in downtown Minneapolis. O'Reilly and Guntzel bought the bar in 2015. O'Reilly told the Business Journal he had to shut everything down when his Paycheck Protection Program money ran out. "It has been a tough year for myself and my industry," O'Reilly said in an email to the Business Journal. "A number of things have happened within and beyond my control... Without investors and partners, my company was left in a very vulnerable position... I'm owning everything that has happened and truly grateful for my health, my family and friends, and all of the things I've learned over this past year to be a better human." He predicted at least part of his problems back in March, when he told the Business Journal, "Businesses will go under. I'll be 100% transparent: At least one of my businesses won't make it." O'Reilly filed for Chapter 7 bankruptcy protection, which typically provides for the liquidation of assets to satisfy creditor claims, while Chapter 11 protection is typically about restructuring creditor obligations. When small business owners go through personal bankruptcy, their business interests, personal guarantees and household financed are often intertwined in the filing, according to attorney Dennis Monroe, co-founder and chairman of Monroe Moxness Berg. Monroe added he's a friend of O'Reilly. About Matt O'Reilly According to PacerMonitor.com, Matthew H. O'Reilly filed a Chapter 7 petition (Bankr. D. Minn. Case No. 20-32639) on Nov. 13, 2020. Mr. O'Reilly lists liabilities of more than $3 million and assets of roughly $643,000 in the filing. He owns the Foxtrot Burger Spot restaurant in St. Paul, Minnesota. MBM SAND: March 23 Plan & Disclosure Hearing Set ------------------------------------------------ On Feb. 12, 2021, debtor MBM Sand Company, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas, Houston, a Combined Plan of Reorganization and Disclosure Statement. On Feb. 16, 2021, Judge Eduardo Rodriguez conditionally approved the Disclosure Statement and ordered that: * March 16, 2021, is the deadline for filing and serving written objections to confirmation of the Plan. * March 19, 2021, is the deadline for filing ballots accepting or rejecting the Plan. * March 23, 2021, at 1:30 p.m., is fixed for the hearing on confirmation of the Plan and final approval of the Disclosure Statement which shall be conducted electronically before the United States Bankruptcy Court, Southern District of Texas, Houston Division. A full-text copy of the order dated Feb. 16, 2021, is available at https://bit.ly/3ub07Mp from PacerMonitor.com at no charge. Counsel for the Debtor: Pendergraft & Simon, LLP Leonard H. Simon William P. Haddock Texas Bar No. 00793875 S.D. Tex. Adm. No. 19637 2777 Allen Parkway, Suite 800 Houston, TX 77019 Tel. (713) 528-8555 Fax. (713) 868-1267 About MBM Sand Company MBM Sand Company, LLC, which is primarily engaged sand mining business, sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 20-32883) on June 1, 2020. At the time of the filing, the Debtor disclosed assets of $1 million to $10 million and estimated liabilities of the same range. Judge Eduardo V. Rodriguez oversees the case. The Debtor has tapped Pendergraft & Simon LLP, led by Leonard Simon, Esq., as its legal counsel. MECHANICAL TECHNOLOGIES: Seeks Aug. 31 Plan Confirmation Extension ------------------------------------------------------------------ Mechanical Technologies Corp., dba Alpine Air, asks the U.S. Bankruptcy Court for the District of Nevada to extend the time in which it may obtain confirmation of a Plan of Reorganization, from March 31, 2021 to August 31, 2021. The Debtor filed its Disclosure Statement and its Plan of Reorganization on March 24, 2020. The Debtor says that a hearing for approval of the Disclosure Statement is currently scheduled for March 18, 2021 at 10 a.m. The Debtor tells the Court it intends to file a stipulation and order to continue the March 18 hearing date to sometime in June 2021. The Debtor relates that after the Disclosure Statement is approved, it can schedule a hearing to consider confirmation of its Plan. The Debtor further relates that the confirmation hearing cannot take place within the 45-day time period provided under 11 U.S.C. Section 1129(e), and that the Debtor needs a 154-day extension from March 31 or up to August 31. "The Debtor's Plan is feasible and the Debtor has made good-faith efforts to resolve its creditor claims. A compromise and settlement pursuant to Rule 9109 was reached between the Debtor and J.W. McClenahan Co., one of the Debtor's largest unsecured creditors, and was approved by this Court on January 21, 2021. Additionally, the Debtor has employed a forensic accountant, whose duties include but are not limited to reviewing the Debtor's books and records, valuing the equipment, machinery, leasehold improvements, vehicles and trucks retained and transferred from Debtor, and determining if the Debtor is owed any accounts receivables from certain parties. The Debtor is awaiting the forensic accountant's final report," the Debtor explains. About Mechanical Technologies Mechanical Technologies d/b/a Alpine Air -- http://alpineheatingandair.com/-- specializes in offering single-source contracting for all residential and commercial design/build needs. The Company services and installs residential heating and air conditioners. Alpine Air has designed, installed, and serviced projects including computer rooms, environmental chambers, manufacturing facilities, biotech laboratories, burn-in rooms, and dry rooms. Alpine Air was established in 1987. Mechanical Technologies Corp. d/b/a Alpine Air, based in Reno, Nevada, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 19-51146) on Sept. 26, 2019. In the petition signed by John Donovan, president, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Honorable Bruce T. Beesley oversees the case. Stephen R. Harris, Esq., at Harris Law Practice LLC, serves as bankruptcy counsel and Robison Sharp Sullivan & Brust, is special counsel. MEDICAL SIMULATION: Gets OK to Hire SL Biggs as Accountant ---------------------------------------------------------- Medical Simulation Corporation received approval from the U.S. Bankruptcy Court for the District of Colorado to employ SL Biggs as its accountant. The firm will provide professional tax and accounting services, which include evaluating and assisting with resolving proofs of claim from various authorities and preparing tax returns. Mark Dennis, a certified public accountant, will be in charge of the Debtor's account. SL Biggs will be paid at these rates: Mark Dennis, CPA $250 per hour Staff $125 per hour Senior Managers $250 - $450 per hour Associates $145 per hour The firm received a retainer in the amount of $10,000. As disclosed in court filings, SL Biggs is a "disinterested person" as such term is defined under Section 101(14) of the Bankruptcy Code. The firm can be reached through: Mark D. Dennis, CPA SL Biggs, A Division of SingerLewak LLP 2000 South Colorado Boulevard Tower II, Suite 200 Denver, CO 80222 Tel: (303) 694-6700 Fax: (303) 694-6761 About Medical Simulation Corp. Medical Simulation Corp., a manufacturer of medical equipment and supplies, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-20101) on Nov. 22, 2019. Thomas M. Kim, director, signed the petition. In the petition, the Debtor estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. Judge Elizabeth E. Brown oversees the case. The Debtor tapped Shapiro Bieging Barber Otteson, LLP and Wadsworth Garber Warner Conrardy, P.C. as its legal counsel. The U.S. Trustee appointed an official committee of unsecured creditors in the Debtor's Chapter 11 case on Feb. 11, 2020. The committee is represented by Kutner Brinen, P.C. MERITAGE HOMES: S&P Ups ICR to 'BB+' on Strong 2020 Performance --------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based homebuilder Meritage Homes Corp. to 'BB+' from 'BB'. S&P also raised its rating on the company's unsecured notes to 'BB+' from 'BB'. The '3' recovery rating is unchanged. The stable outlook reflects its expectations that Meritage's adjusted leverage will remain below 1.5x over the next 12 months. S&P also expects debt to capital of 20%-25%. The upgrade reflects Meritage's strong operating performance over the past 12 months. Adjusted leverage declined to less than 1x as of year-end 2020 from 1.6x as of year-end 2019, well below the 3x upside threshold S&P had set for the 'BB' ratings. S&P said, "We expect adjusted leverage (net of cash) to remain below 1.5x over the next 12 months, with any increase in leverage coming from a lower cash balance--the company's $745 million cash balance year-end was more than double its typical year-end cash balance. We do not expect Meritage to keep this much balance sheet cash in 2021 as it aggressively pursues community count growth." Better economic conditions and Meritage's shift to more affordable homes position the company to grow and to maintain a stronger financial risk profile. Since 2016, Meritage has been transitioning almost exclusively to the first-time and first-time move-up segments of the housing market (the average sales price dropped to $377,000 in 2020--down 3% from 2019). Entry-level composed almost 70% of total orders for the fourth quarter, up from 55% in fourth-quarter 2019. Entry-level represented 67% of the average active communities during the fourth quarter compared to 45% the year before, indicating strong demand in this market segment. This product is also typically built on less-expensive lots, can be constructed more quickly than larger homes with more complicated floor plans, and sells more quickly (the fourth-quarter absorption pace of 5.3 homes per month per community improved 87% year over year). This business model is less capital intense and should enable Meritage to support organic growth without increasing gross debt levels much above the approximately $1 billion reported as of year-end 2020. The strategic pivot to entry-level homes helps Meritage offset cost inflation and maintain gross margins. The first-time and first-time move-up communities typically have higher margins because of the streamlining of the construction process and the increase in speculative (spec) builds. As part of this strategy, management has reduced the variety of its floor plans and design styles, which we view as favorable because simplification enables the company to better rationalize construction and lower average construction time. This is particularly notable in the labor-challenged market. It should help Meritage achieve operating efficiencies through a higher proportion of spec builds and offset any margin degradation from higher labor and material costs. This strategy is bearing fruit: S&P's saw a 420-basis-point improvement in homebuilder gross margins to 24% in the fourth quarter from 19.8% the prior year. The margin reflects price increases achieved throughout the year, the additional leveraging of fixed costs from higher closing volumes, and operational efficiency. Because of the consistent purchasing volumes on a limited number of stock keeping units, Meritage has been able to negotiate lower pricing in bulk purchasing discounts from its vendors. To date, the company has not experienced any elongated cycle times from shortages in the labor pool. In addition, Meritage mitigated lumber cost inflation with price increases in 2020. Although lumber inflation retreated toward the end of 2020 from highs earlier in the year, these costs remain elevated as lumber prices have hit new records. S&P said, "The stable outlook reflects our expectation that Meritage's adjusted debt to EBITDA will remain below 1.5x over the next 12 months. We also expect debt to capital of 20%-25%. This scenario contemplates a gradual economic recovery and sustained low mortgage rates over the next 12 months. It also assumes Meritage will expand its platform and emphasize entry-level product while maintaining steady debt levels and gross margin at about 22%. "We expect the company to maintain stronger credit ratios than typically associated with the 'BB+' rating while the housing industry remains relatively healthy and stable. Therefore: "In a healthy market, we would lower our rating on Meritage if we expected its debt to EBITDA to be sustained at more than 1.5x. This could occur if the company adds at least $300 million or more in debt in anticipation of further growth. "In a weaker-than-expected housing market, we would expect the cushion in credit ratios to deteriorate, and we would look to a 3x debt-to-EBITDA threshold for a downgrade. The latter scenario could occur if the U.S. experiences a prolonged recession such that EBITDA declines to the $300 million area as gross margins decline to below 16%, compared to our expectation of about 22%. We could upgrade Meritage during the next year if the company expands its platform such that overall market share significantly improves without material diminution of its financial risk profile." This could occur if: -- Homebuilding revenue approaches $7 billion; and -- EBITDA margin stays above 15%. MIDTOWN CAMPUS: Plan Exclusivity Extended Until May 3 ----------------------------------------------------- Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division extended the periods within which Midtown Campus Properties, LLC has the exclusive right to file a plan of reorganization from February 2, 2021, to and including May 3, 2021, and to solicit acceptances of the plan from April 5, 2021, to and including July 2, 2021. The additional time will allow the Debtor to focus on obtaining approval of the new DIP Loan, finalizing construction of the Project, and developing a feasible Plan with its creditor body that will allow it to emerge from bankruptcy. The extensions granted are without prejudice to the Debtor's right to request further extensions of the deadlines to file a plan and/or solicit acceptances of a plan for cause shown, upon notice and a hearing. The Court shall retain jurisdiction over any and all matters arising from or related to the interpretation or implementation of this Order. A copy of the Court's Extension Order is available from PacerMonitor.com at https://bit.ly/37q54aA at no extra charge. About Midtown Campus Properties, LLC Midtown Campus Properties, LLC, is a single asset real estate that owns the Midtown Apartments. The Midtown Apartments is a 310-unit student housing apartment complex currently under construction at 104 NW 17th St in Gainesville Florida, just across from the University of Florida. It consists of a six-story main building, a parking garage for resident and public use, and commercial retail space. Each unit includes a full-size kitchen, carpet, tile, and hardwood floors and be fully furnished. It is located near several Midtown bars and restaurants frequented by students, and just a couple of minutes' walk from Ben Hill Griffin Stadium. On May 8, 2020, Midtown Campus Properties sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-15173). The Debtor was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Honorable Robert A. Mark is the presiding judge. The Debtor tapped Genovese Joblove & Battista, P.A., as bankruptcy counsel; and The Bosch Group, Inc., as construction consultants. No creditors' committee has been appointed in this case. In addition, no trustee or examiner has been appointed. MKJC AUTO: Auction of Substantially All Assets Set for March 26 --------------------------------------------------------------- Judge Jil Mazer-Marino of the U.S. Bankruptcy Court for the Eastern District of New York authorized MKJC Auto Group, LLC's bidding procedures in connection with the sale of substantially all of its tangible and intangible assets, to World Imports, LLC for $2 million, on the terms of the Asset Purchase Agreement, dated as of December 2020, subject to overbid. The salient terms of the Bidding Procedures are: a. Bid Deadline: March 18, 2021, at 4:00 p.m. (EST) b. Initial Bid: $2,075,000 c. Deposit: 5% of the cash consideration of such Bidder's bid, not to exceed $125,000, made payable to the Debtor and to be held in an escrow account at Shafferman & Feldman LLP d. Auction: In the event at least one Qualified Bid for the Purchased Assets in addition to the Stalking Horse Bid is received by the Debtor, the Debtor will conduct an Auction for the Purchased Assets on March 26, 2021, at 10:00 a.m. (EST). The Auction will be held at the offices of the Debtor's special counsel, Paul Solda, Esq., at 60 East 42nd Street, 46th Floor, New York, 10165 or such other location designated by the Debtor prior to the scheduled auction. e. Bid Increments: $50,000 f. Sale Hearing: April 7, 2021, at 2:00 p.m. (EST) g. Sale Objection Deadline: April 1, 2021, at 5:00 p.m. (EST) h. Bid Protection: $50,000 Any sale of Purchased Assets will be on an "as is, where is" basis and without representations or warranties of any kind, nature or description, free and clear of all Claims, with such Claims to attach to the proceeds of the sale. A copy of the Bidding Procedures Order is available at https://tinyurl.com/ys63gzbs from PacerMonitor.com free of charge. About MKJC Auto Group, LLC MKJC Auto Group, LLC owns and operates the automobile dealership out of Long Island, New York, known as Hyundai of Long Island City, selling and leasing new and pre-owned Hyundai automobiles to consumers. MKJC Auto Group, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-42283) on June 8, 2020. The petition was signed by Ryan Kaminsky, Executor of The Estate of Mitchell Kaminsky. At the time of filing, the Debtor estimated $10,319,999 in assets and $10,034,320 in liabilities. The Honorable Carla E. Craig is the presiding judge. Joel M. Shafferman, Esq. at SHAFFERMAN & FELDMAN LLP represents the Debtor as counsel. The Debtor has hired the Law Offices of Paul J. Solda, Esq. as its special corporate and real estate counsel. MKJC AUTO: World Imports Buying Assets for $2M, Subject to Overbid ------------------------------------------------------------------ Judge Jil Mazer-Marino of the U.S. Bankruptcy Court for the Eastern District of New York authorized MKJC Auto Group, LLC's bidding procedures in connection with the sale of substantially all of its tangible and intangible assets to World Imports, LLC, for $2 million, on the terms of the Asset Purchase Agreement, dated as of December 2020, subject to overbid. The Sale Motion, to the extent it seeks to establish Bidding Procedures with respect to a proposed sale of the Purchased Assets and procedures for the assumption and assignment of the Assumed Contracts, is granted as set forth in the Order. All of the Objections, to the extent not addressed herein, are overruled. The Debtor is authorized to solicit bids for the sale of the Purchased Assets and to conduct, in the event qualified bids are received, an auction in accordance with the Bidding Procedures, which reflect, among other things, the procedure for selling the Purchased Assets for the purpose of entertaining qualified competing bids and selecting the highest or otherwise best offer for the Purchased Assets, pursuant to that certain Asset Purchase Agreement by and between the Debtor and Major World. The Debtor is authorized to take any and all actions necessary and appropriate to implement the Bidding Procedures and is authorized to designate Shafferman & Feldman LLP, the counsel for the Debtor, as the Escrow Agent as further described in the Bidding Procedures. Notwithstanding any other provision of the Order, or any provision of the Sales Procedure Notice, or any provision of any Proposed Asset Purchase Agreement or any provision of the Asset Purchase Agreement, the terms and conditions set forth in Section 5 of the Bidding Procedures will apply with respect to any proposed sale or assignment of the Debtor's Hyundai franchise. The terms and conditions of Section 5 of the Bidding Procedures will govern any proposed assumption and assignment of the Dealer Agreement, and the Manufacturer will have at least seven business days before any hearing to file any objection or response to any proposed assumption and assignment of the Dealer Agreement. The Sale Procedures Notice is approved in all respects. The Notice of Assumption and Assignment of Executory Contracts and Unexpired Leases in Connection with Proposed Sale of Certain Assets of the Debtor, is also approved. The Debtor shall, within five business days of the entry of the Sale Procedures Order, serve the Cure Notice upon each non-Debtor counterparty to each Executory Contract or Unexpired Lease to which the Debtor is a party that may be assumed and assigned to the Stalking Horse Bidder. The Cure Objection Deadline is 20 days after service of the Cure Notice or Supplemental Cure Notice. The salient terms of the Bidding Procedures are: a. Bid Deadline: March 18, 2021, at 4:00 p.m. (EST) b. Initial Bid: $2,075,000 c. Deposit: 5% of the cash consideration of such Bidder's bid, not to exceed $125,000, made payable to the Debtor and to be held in an escrow account at Shafferman & Feldman LLP d. Auction: In the event at least one Qualified Bid for the Purchased Assets in addition to the Stalking Horse Bid is received by the Debtor, the Debtor will conduct an Auction for the Purchased Assets on March 26, 2021 at 10:00 a.m. (EST). The Auction will be held at the offices of the Debtor's special counsel, Paul Solda, Esq., at 60 East 42nd Street, 46th Floor, New York, 10165 or such other location designated by the Debtor prior to the scheduled auction. e. Bid Increments: $50,000 f. Sale Hearing: April 7, 2021, at 2:00 p.m. (EST) g. Sale Objection Deadline: April 1, 2021, at 5:00 p.m. (EST) h. Bid Protection: $50,000 The counsel for the Debtor will serve a copy of the Order and the Sale Procedures Notice, on Feb. 17, 2021. The Debtor will cause a copy of the Sale Procedures Notice to be published one time in an automotive trade journal no later than Feb. 18, 2021. Any sale of Purchased Assets will be on an "as is, where is" basis and without representations or warranties of any kind, nature or description, free and clear of all Claims, with such Claims to attach to the proceeds of the sale. A copy of the Bidding Procedures Order is available at https://tinyurl.com/w3xr4hsy from PacerMonitor.com free of charge. About MKJC Auto Group, LLC MKJC Auto Group, LLC owns and operates the automobile dealership out of Long Island, New York, known as Hyundai of Long Island City, selling and leasing new and pre-owned Hyundai automobiles to consumers. MKJC Auto Group, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-42283) on June 8, 2020. The petition was signed by Ryan Kaminsky, Executor of The Estate of Mitchell Kaminsky. At the time of filing, the Debtor estimated $10,319,999 in assets and $10,034,320 in liabilities. The Honorable Carla E. Craig is the presiding judge. Joel M. Shafferman, Esq. at SHAFFERMAN & FELDMAN LLP represents the Debtor as counsel. The Debtor has hired the Law Offices of Paul J. Solda, Esq. as its special corporate and real estate counsel. MOHEGAN TRIBAL GAMING: S&P Raises 'B-' ICR, Outlook Stable ---------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on casino operator Mohegan Tribal Finance Authority (MTFA) to 'B-' from 'CCC+', raising the rating on MTGA's senior unsecured notes to 'CCC+' from 'CCC', and removing the ratings from CreditWatch, where they were placed with positive implications on Jan. 13, 2021. At the same time, S&P is raising its issuer credit rating on MTFA to 'B-' from 'CCC+'. S&P said, "The stable outlook reflects our expectation that MTGA and MTFA will maintain adequate liquidity through at least 2021 and that MTGA will maintain healthy EBITDA coverage of interest of about 2x, excluding project financing related to Inspire Korea. We believe MTGA will generate sufficient operating cash flow to fund maintenance-related capital expenditures (capex), distributions to the tribe, and modest debt repayment." The upgrade reflects MTGA's improved maturity profile, as the recent refinancing eliminated near-term refinancing risk and increased liquidity. MTGA recently refinanced its senior secured credit facility with $1.175 billion of new senior secured notes due 2026, and a new $263 million revolving credit facility due 2023. The refinancing eliminated near-term refinancing risk and improved MTGA's liquidity, including cash and revolver availability. S&P said, "As such, we are revising MTGA's liquidity assessment to adequate from less than adequate because MTGA has refinanced its sizable debt maturities that were due in October 2021. Pro forma for the transaction, we estimate MTGA had an unrestricted cash balance and revolver availability of approximately $260 million (pro forma for the refinancing transactions) as of Dec. 31, 2020. This does not include about $29 million of restricted cash at Inspire Korea, which is not available to fund debt service or operating expenses in the U.S. Furthermore, aside from the new revolver's maturity in April 2023, MTGA will have relatively modest debt maturities until October 2024, when its $500 million unsecured notes mature. "Although we expect Inspire Korea will weaken MTGA's consolidated leverage in 2021, we believe its liquidity, the debt service reserves in the project financing, and its interest coverage support a 'B-' rating. We believe Inspire Korea is a key component of MTGA's expansion and diversification strategy and view its full ownership of the project, as well as its past willingness to incur incremental debt to support it and increase its stake, as demonstrating Inspire Korea's strategic importance. MTGA plans to secure project financing for Inspire Korea over the near term and we expect these debt agreements to include debt service reserve provisions to support MTGA's liquidity through the project's opening and for at least a reasonable ramp-up period, which will reduce the risk to MTGA's cash flow and liquidity over the next several years. Additionally, MTGA's partnership agreement with Hanwha Group, a Korean conglomerate with both an engineering and construction division and a hotels and resorts division, includes a general contractor construction agreement, a completion guarantee, and up to $100 million investment in the project from Hanwha. Despite its long-term strategic importance, MTGA will be limited in its capacity to provide additional support to Inspire Korea if needed because MTGA will not be able to guarantee Inspire Korea's debt beyond the $150 million guarantee allowed under the revolver. "We forecast MTGA's consolidated lease-adjusted net leverage will remain above 13x in 2021 largely due to incremental debt to fund Inspire Korea-related capital expenditures and partly because of weaker-than-normal visitation until the COVID-19 vaccines are widely distributed, which we believe could occur by the end of the third quarter (MTGA's fiscal year-end). Our measure of leverage includes the cash flow and related debt of all of its subsidiaries, including the subsidiaries that own the operations of the Niagara properties and the Korea project. Excluding the project financing and capital expenditures related to Inspire Korea, we forecast MTGA's lease-adjusted leverage will be around 9x and expect EBITDA interest coverage of about 2x in 2021 with no material debt maturities. Our estimate incorporates our expectation that MTGA's EBITDA will increase over the next several quarters due to a modest improvement in its EBITDA margin relative to 2019 stemming from cost cuts implemented over the past few months, particularly related to its labor and marketing expenses. Additionally, we expect many of MTGA's lower-margin or loss-leading amenities, such as buffets, to remain closed for some time to comply with health and safety measures intended to limit the spread of the coronavirus, which will further support an improvement in its margin. "The upgrade of MTFA to 'B-' reflects reduced liquidity risk, given MTFA's reliance on MTGA for its cash flows and for debt service and MTGA's improved liquidity. Despite our expectation for MTGA's consolidated leverage to remain weak in 2021 as a result of MTGA's development project in Korea, we believe it has adequate liquidity to pay base rent expense to MTFA. Furthermore, despite property closures in 2020 and weaker hotel operating results upon reopening, MTGA continued to pay rent to MTFA. MTFA relies on this base rent payment in order to service its outstanding bonds. MTFA leases the Earth Hotel Tower at Mohegan Sun Connecticut to MTGA. The lease agreement is structured in such a way that base rent payments from MTGA fully cover MTFA's debt service and its minimal operating expenses without additional cushion. MTFA maintains minimal cash on the balance sheet given that it is a pass-through entity. Additionally, in the event that rent payments from MTGA are insufficient to cover MTFA's debt service, the tribe has pledged the hotel occupancy tax revenue it receives from Mohegan Sun as an additional source of liquidity. Hotel occupancy tax revenue is lower than normal because hotel occupancy is lower as a result of the pandemic. Thus, the pledge of this tax revenue provides minimal additional cash flow cushion. However, we believe the most likely scenario under which MTGA would not make the full rent payment would be one in which Mohegan Sun is experiencing significantly weaker operating performance and faces liquidity challenges. We believe this scenario is less likely now that the property is open and MTGA has completed its refinancing transaction but could occur if recovery is much slower than we currently expect. "The stable outlook reflects our expectation that MTGA and MTFA will maintain adequate liquidity through at least 2021 and that the ongoing operating recovery will support healthy EBITDA coverage of interest of about 2x at MTGA, excluding project financing related to Inspire Korea. We believe MTGA will generate sufficient operating cash flow to fund maintenance-related capex, distributions to the tribe, and modest debt repayment. "We could lower ratings if MTGA underperformed our EBITDA expectations such that adjusted EBITDA coverage of interest fell toward 1.5x or if MTGA sustained negative discretionary cash flow (excluding project-related spending at Inspire Korea) as this could lead MTGA to begin to deplete excess cash balances and revolver availability. We could lower ratings on MTFA if we lose confidence MTGA would not continue making its lease payments. "We are unlikely to raise the ratings prior to the opening of Inspire Korea given our forecast for credit measures to weaken significantly from incremental debt and capex related to the project. Nevertheless, we could consider raising the rating one notch if we believed interest coverage would stay above 2x and discretionary cash flow generation remained positive. We are unlikely to raise MTFA's ratings because we expect base rent payments to just meet debt service costs, and we expect EBITDA coverage of fixed charges to remain at about 1x." MOREAUX TRANSPORTATION: Seeks Approval to Hire Financial Advisor ---------------------------------------------------------------- Moreaux Transportation Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Meggen Rhodes of Stout Risius Ross, LLC as its financial advisor. Ms. Rhodes' services include: (a) assistance with record keeping and preparation of financial statements; (b) review of financial information; (c) preparation of filings required by the bankruptcy court, the Office of the U.S. Trustee and the Subchapter V trustee, including, but not limited to, schedules of assets and liabilities, statements of financial affairs and monthly operating reports; (d) financial advisory services including the preparation of a liquidation analysis and a monthly analysis of financial information; (e) assistance with the preparation of the proposed business plan and financial projections; (f) assistance with the preparation or review of documents necessary for Chapter 11 plan confirmation; (g) assistance with claims resolution procedures, including, but not limited to, analyses of creditors' claims by type and entity; and (h) other financial advisory services. The Debtor has agreed to pay the financial advisor an hourly fee of $250 for her services. Ms. Rhodes disclosed in a court filing that she neither holds nor represents any adverse interest to the Debtor or its estate. Ms. Rhodes can reached at: Meggen Rhodes Stout Risius Ross, LLC 1000 Main Street, Suite 3200 Houston, TX 77002 Phone: 713-225-9580 Fax: 713-225-9588 Email: mrhodes@stout.com About Moreaux Transportation Services Moreaux Transportation Services, Inc., a trucking company in Texas, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 20-20384) on Sept. 21, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Bradley Drell, Esq., of Gold Weems Bruser Sues & Rundell, and Meggen Rhodes of Stout Risius Ross, LLC serve as the Debtor's legal counsel and financial advisor, respectively. MTE HOLDINGS: Seeks to Extend Plan Exclusivity Until March 22 ------------------------------------------------------------- Debtors MTE Holdings LLC and its affiliates request the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive periods during which the Debtors may file a plan or plans and solicit acceptances until March 22, 2021, and May 21, 2021, respectively. This is the Debtors' sixth request to extend their Exclusive Periods. The Debtors are now in the final stages of the bankruptcy emergence process. After scheduling the Auction for the sale of substantially all of the Debtors' assets for January 29, 2021, the Debtors continued to receive investor interest up-to and beyond the bid deadline of January 15, 2021, due to the encouragement of the Debtors and their professionals. On January 27, 2021, Natixis, New York Branch and BMO Harris Bank N.A. submitted a credit bid for the Debtors' assets. As a result of the Credit Bid and the ongoing efforts of the Debtors to negotiate with all the interested parties, it became apparent that the Auction would need to be rescheduled. Therefore, with the consent of Natixis and BMO, and after consulting Riverstone Credit Management, LLC and the Ad Hoc Committee of Service Providers, the Debtors adjourned the Auction to February 5, 2021. During the intervening week, the Debtors continued their negotiations with several interested parties. These negotiations yielded additional firm bids. In addition, two parties provided the Debtors with term sheets for a proposed plan of reorganization. Once again, on February 4, 2021, the Debtors determined that an adjournment of the Auction to February 16, 2021, was in the best interest of all parties in interest. Concurrently with undertaking the plan process, the Debtors negotiated an updated budget, extending their use of cash collateral through April 2, 2021, and updated milestones. In general, the updated milestones provide for the following emergence process deadlines: i. February 16, 2021, at 9:00 a.m. (EST): Commencement of Auction; ii. February 22, 2021: Announcement of Winning Bidder(s) and Back-Up Bidder(s); iii. March 1, 2021: The Debtors must either (a) file a plan of reorganization and related disclosure statement or (b) obtain court approval of the sale of substantially all of their assets. The updated budget and milestones were filed with the Court concurrently with the filing of this Motion; and iv. April 5, 2021: unless the Court has already approved the sale of substantially all of the Debtors' assets, the Debtors shall obtain Court approval of their Disclosure Statement and shall obtain the earliest available confirmation hearing date based on the Court's schedule for confirmation of an acceptable plan. In connection with the Revised Milestones, the Debtors require an additional extension of the Exclusive Periods to preserve the Debtors' exclusive right to complete their ongoing processes to finalize a stand-alone reorganization plan or, in the alternative, to sell substantially all of their assets. This proposed extension will benefit the Debtors' estates, as upending the Debtors' control of their exit strategy now risks jeopardizing the last six months of efforts of all parties in interest. To date, the Debtors have received (i) five bids that either constitutes Qualified Bids or are close to being qualified under the Bid Procedures Order and (ii) two separate plan proposals. Three of the proposed bidders have submitted Good Faith Deposits to fulfill one of the conditions for participating in the Auction. Others are actively working with the Debtors to negotiate the final form of their respective asset purchase agreements. In addition, the Debtors, Natixis, and those statutory lienholders that have filed adversary proceedings asserting the priority of their lien claims over Natixis' security interest continue to participate in mediation overseen by the Honorable Steven A. Felsenthal (retired) as Mediator to resolve pending disputes regarding the validity, priority, and/or extent of certain priority statutory liens. These negotiations are critical to resolving the claims of the Priority Lienholders and to achieving the Debtors' goal of a consensual exit from the Chapter 11 Cases. Even with the rise in oil prices providing stability to the Debtors' operations, time is of the essence to emerge from bankruptcy. Given the previously limited time periods for extension of exclusivity, another is necessary to ensure proper time to develop the plan construct. With the Debtors' clear progress towards developing a viable exit from the Chapter 11 Cases through their work on the sale process, the Debtors submit that cause exists to extend the Exclusive Periods. The Debtors are hopeful that, with the cooperation of their key creditor constituencies, the additional time requested will result in a confirmable plan of reorganization and allow the Debtors to exit these Chapter 11 Cases. A copy of the Debtors' Motion to extend is available from stretto.com at https://bit.ly/2Ne0k0A at no extra charge. About MTE Holdings MTE Holdings LLC is a privately held company in the oil and gas extraction business. MTE sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-12269) on October 22, 2019. In the petition signed by its authorized representative, Mark A. Siffin, the Debtor disclosed assets of less than $50 billion and debts of $500 million. Previously, Judge Karen B. Owens has been assigned to the case. Now, Judge Christopher S. Sontchi oversees the case. The Debtor tapped Kasowitz Benson Torres LLP as its bankruptcy counsel; Morris, Nichols, Arsht & Tunnell, LLP as its local counsel; Greenhill & Co., LLC, as financial advisor and investment banker; Ankura Consulting LLC, as a chief restructuring officer; and Stretto as its claims and noticing agent. NANCY LOUISE HORTON: Winchester Property Sale Voluntarily Dismissed ------------------------------------------------------------------- Nancy Louise Horton filed with the U.S. Bankruptcy Court for the Western District of Virginia a notice that her proposed sale of the real property known as 908-910 Cedar Creek Grade, in Winchester, Virginia, 22601, Tax Map Number 249-01-1 for the City of Winchester, to Randall L. Mitchell for $1.1 million filed on Jan. 17, 2021, is voluntarily dismissed, without prejudice. Nancy Louise Horton sought Chapter 11 protection (Bankr. W.D. Va. Case No. 20-50646) on Aug. 28, 2020. The Debtor tapped David Cox, Esq., at Cox Law Group, PLLC as counsel. NAVIENT SOLUTIONS: Asks Court to Dismiss 'Unsupported' Ch.11 Filing ------------------------------------------------------------------- Law360 reports that student loan servicer Navient Solutions has asked a New York bankruptcy court to stop an attempt by a trio of student loan borrowers to send it into Chapter 11, saying the claims it is facing insolvency are "unsupported and defamatory. "In a filing Wednesday, Feb. 17, 2021, Navient said the borrowers' petition provides no proof the company is insolvent or that their claims against it are legitimate, and that it is an attempt to damage the company's reputation and influence litigation filed against it by the borrowers' counsel. "The involuntary case and accompanying papers are replete with unsupported and defamatory accusations," said Navient. About Navient Solutions Navient Solutions is the servicing unit of student loan giant Navient Corp. (Nasdaq:NAVI). Navient Solutions is a wholly-owned subsidiary of Navient Corp. and acts as the principal management company for most of Navient's business activities. Navient Solutions' servicing division manages and operates the loan servicing functions for Navient and its affiliates. According to PacerMonitor.com, Sarah Bannister, Brandon Hood, and LaBarron Tate have filed an involuntary Chapter 11 petition against Navient Solutions, LLC (Bankr. S.D.N.Y. Case No. 21-10249) on Feb. 8, 2021, saying they were owed a combined $45,684 in "overpayments" that they say the servicer illegally collected. The Petitioners reportedly had their private student debts discharged in bankruptcy but have been hounded and lied to for more than a decade to repay discharged debts. The Petitioners' counsel: Austin C. Smith, Esq. Smith Law Group LLP 95 Cove Hollow Rd East Hampton, NY 11937 E-mail: acsmithlawgroup.com aconnellsmith@gmail.com NEOPHARMA INC: Trustee Hires Polsinelli PC as Legal Counsel ----------------------------------------------------------- Gary Murphey, the Chapter 11 trustee for Neopharma, Inc. and Neopharma Tennessee LLC, seeks approval from the U.S. Bankruptcy Court for the Eastern District of Tennessee to employ Polsinelli PC as his legal counsel. The firm's services include: a. advising the trustee regarding his powers and duties and the continued operation of the Debtors' business; b. taking all necessary actions to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the estates; c. preparing legal papers; d. appearing in court; e. assisting with any disposition of the Debtors' assets by sale or otherwise; f. taking all necessary actions in connection with any plan of liquidation or reorganization; g. reviewing all pleadings filed in the Debtors' Chapter 11 cases; and h. other legal services. The firm will be paid at these rates: Shareholders $380 - $925 per hour Associates $290 - $560 per hour Paraprofessionals $165 - $375 per hour David Gordon, Esq., shareholder of Polsinelli, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: David E. Gordon, Esq. Polsinelli PC 401 Commerce Street, Suite 900 Nashville, TN 37219 Phone: 615-259-1510 Fax: 615-259-1573 About Neopharma Inc. Neopharma Inc. and Neopharma Tennessee, LLC, manufacturers of pharmaceutical and medicinal products, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Lead Case No. 20-52015) on Dec. 22, 2020. At the time of the filing, the Debtors disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Shelley D. Rucker oversees the cases. Hunter, Smith & Davis, LLP and Province LLC serve as the Debtors' legal counsel and financial advisor, respectively. On Jan. 14, 2021, the U.S. Trustee for Region 8 appointed an official committee of unsecured creditors. The committee tapped Buchalter P.C. as its lead bankruptcy counsel, Woolf McClane Bright Allen & Carpenter PLLC as Tennessee counsel, and Province LLC as financial advisor. Gary M. Murphey is the Debtors' Chapter 11 trustee. He is represented by Polsinelli PC. NEOPHARMA INC: Trustee Hires Resurgence Financial as Accountant --------------------------------------------------------------- Gary Murphey, the Chapter 11 trustee for Neopharma, Inc. and Neopharma Tennessee LLC, seeks approval from the U.S. Bankruptcy Court for the Eastern District of Tennessee to hire Resurgence Financial Services as his accountant. The firm will provide tax, accounting and bookkeeping services. The firm will be paid at these rates: Senior Manager $250 - $350 per hour Staff $90 - $200 per hour Gary Murphey of Resurgence Financial Services disclosed in court filings that his firm neither holds nor represents any interest adverse to the Debtor's bankruptcy estate. The firm can be reached at: Gary Murphey Resurgence Financial Services, LLC 3330 Cumberland Blvd., Suite 500 Atlanta, GA 30339 Phone: (770) 933-6855 About Neopharma Inc. Neopharma Inc. and Neopharma Tennessee, LLC, manufacturers of pharmaceutical and medicinal products, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Lead Case No. 20-52015) on Dec. 22, 2020. At the time of the filing, the Debtors disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Shelley D. Rucker oversees the cases. Hunter, Smith & Davis, LLP and Province LLC serve as the Debtors' legal counsel and financial advisor, respectively. On Jan. 14, 2021, the U.S. Trustee for Region 8 appointed an official committee of unsecured creditors. The committee tapped Buchalter P.C. as its lead bankruptcy counsel, Woolf McClane Bright Allen & Carpenter PLLC as Tennessee counsel, and Province LLC as financial advisor. Gary M. Murphey is the Debtors' Chapter 11 trustee. He is represented by Polsinelli PC. NEUROCARE CENTER: Cash Collateral Use Until Mar. 17 OK'd -------------------------------------------------------- Judge Russ Kendig of the U.S. Bankrutpcy Court for the Northern District of Ohio, Eastern Division, authorized Neurocare Center, Inc. to use cash collateral until March 17, 2021. Before the Debtor's Chapter 11 case was filed, Key Bank made loans and advances to the Debtor under promissory notes and security agreements which were executed on January 15, 2016, and November 25, 2019, under which the Debtor borrowed approximately $500,000 and $200,000, respectively. On the Petition Date, the current balances on the Key Debt were $494,942.06 and $157,323.14, respectively. Key Bank holds a first priority security interest in all of the Debtor's assets with the exception of certain pharmaceutical products sold by ADS Specialty Healthcare in which Key holds a second priority security interest. ADS Specialty Healthcare sells pharmaceutical goods to the Debtor under a prepetition agreement, security agreement, and UCC filings, on credit terms secured by a first priority purchase money security interest in the goods sold and a second priority security interest in the remainder of the Debtor's assets. Judge Kendig found that "the Debtor has demonstrated adequate protection for the Debtor's use of Cash Collateral by granting a replacement lien on the Debtor's post-petition assets, including, but not limited to, raw materials, work-in-process, inventory, accounts receivable, and cash, and continuing payments to the Lenders pursuant to the terms of their respective prepetition agreements in the amounts of $1,385.00 and $374.85 to Key, plus any administrative fees, including an administrative fee of $1,250.00 currently due and owing on the $500,000 promissory note with Key, and the amounts invoiced by ADS to the Debtor from time to time." Judge Kending added that "the Debtor has stated that it desires to pursue a financial restructuring in cooperation with the Lenders and that the Debtor believes that the best method to effectuate such a financial restructuring is by means of a chapter 11 case for the Debtor. Based upon the record presented to the Court by the Debtor, the relief requested in the Motion is necessary, essential, and appropriate for the continued operation of the Debtor's business and the management and preservation of the Debtor's assets and properties and is in the best interests of the Debtor, its estate, and creditors." Further requests for the additional use of Cash Collateral as may be made by the Debtor, if any, will be heard telephonically at 2 p.m. on March 16, 2021. Objections are to be filed no later than March 12, 2021 at 4 p.m. KeyBank National Association is represented by: Chrysanthe E. Vassiles, Esq. BLACK, MCCUSKEY, SOUERS & ARBAUGH, LPA 220 Market Ave., South, Suite 1000 Canton, OH 44702 Telephone: 330-456-8341 Email: cvassiles@bmsa.com About Neurocare Center Inc. Founded in 1995, Neurocare Center Inc. -- http://www.neurocarecenter.com-- provides health care services to patients with neurological, rehabilitative and sleep disorders. Neurocare Center filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 21-60030) on Jan. 12, 2021. Neurocare Center President Andrew Stalker MD signed the petition. At the time of filing, the Debtor disclosed $597,245 in assets and $2,128,274 in liabilities. Judge Russ Kendig oversees the case. Anthony J. DeGirolamo, Attorney at Law serves as the Debtor's legal counsel. NEWELL BRANDS: S&P Alters Outlook to Stable, Affirms 'BB+' LTR -------------------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based consumer goods company Newell Brands Inc. to stable from negative and affirmed all its ratings, including its 'BB+' long-term and 'B' short-term ratings on the company. The stable outlook reflects S&P's expectation that Newell will continue to improve its financial metrics through its business simplification initiatives and reduce leverage to 4x or below in the next 12 months as it continues to contractually repay debt. Newell's product offering benefited from pandemic-related consumer shifts leading to better than previously expected financial metrics. S&P previously forecasted that Newell would be negatively affected by the pandemic-related lockdowns and ongoing economic recession due to the discretionary nature of its products. Although the company's results reflected these constraints primarily during the initial months, its core sales for the year were down only 1.1% (reported sales down 3.4%). This compares with our previous expectation of double-digit declines. Newell began to see benefits as the duration of the pandemic and lockdowns influenced consumers' buying behaviors and consumers shifted spending toward home-related products from travel and dining. Newell directly benefited from this shift resulting in fourth quarter year-over-year core sales growth of 4.2% in its appliance and cookware segment and 12.4% in home solutions segment. Newell's commercial business, which offers cleaning solutions, also benefited steadily throughout the year and posted fourth-quarter core sales growth of 13.8%. Its outdoor and recreation segment is still in decline but improving from negative 20% in the early stages of the pandemic to now high-single-digit declines. Its learning and development segment, which is its largest and most profitable segment and includes its writing business, has been negatively affected by the continued remote working and homeschooling trends. Learning and development was down 2.2% in the fourth quarter as a result of an increase in baby product sales after facing double-digit declines in the onset of the pandemic. S&P believes this segment will be a driver of growth in fiscal 2021 as vaccines continue to be deployed and consumers return to work and school in the second half of the year. S&P said, "We forecast low-single-digit revenue growth, reflecting a more focused portfolio as pandemic buying behavior pivots to away-from-home purchases in combination with the ongoing recession. Overall, we do not expect the company to sustain the aforementioned 2020 mid-single-digit growth as consumers return to more normalized buying behavior. For example, we believe the company will not post growth in segments such as appliances because some sales were likely pulled forward and the replacement cycle for these products is longer than a year. Even if the economy grows against an easy 2020 comparable, we believe it will remain in a fragile state and exposed to inflation risk. The company has made changes to its operating segment leadership and continues to focus on its product offering which we believe could stem historical revenue declines. The company's business simplification initiative has reduced SKU counts and focused on the company's product offering, which we believe better positions the portfolio as the economic recession persists. "We expect leverage to be 4x or below over the next 12 months. We estimate Newell ended fiscal 2020 with adjusted leverage near 4x, after peaking at 5x for the trailing-12-months ended June 2020, which included the highest level of pandemic restrictions and uncertainty. The improvement reflects EBITDA margin strengthening of 70 basis points year over year. Additionally, the company reduced debt by about $100 million by using the net proceeds from the issuance of 4.875% $500 million notes due 2025 and cash on hand to repay its 4.7% $305 million senior notes due 2020 and $300 million of its 3.85% notes due 2023. Newell has also tendered for its 3.15% $93.8 million notes to be repaid in March 2021 (rating will be discontinued upon redemption). We believe the company will continue to repay debt as it becomes due as it strives toward its management-stated leverage target of 3x. The company has $351.6 million of 3.75% euro notes maturing in October 2021 which we expect to be repaid as the company ended the year with $1 billion of cash. Its largest upcoming maturity wall is the remaining 3.85% $1 billion notes in April 2023 which we forecast will be redeemed with an equal-size new issuance. "Although leverage will likely be below 4x in fiscal 2021, we believe there is risk to the company's ability to sustain leverage at these levels given the uncertainty in the macro-environment, including the fragile and uneven economy, inflation, and shifting consumer-buying behavior. "The outcome of the SEC investigation is uncertain but we expect the company will be able to manage any potential financial impact. Newell is subject to a subpoena from the SEC related to its sales practices and accounting going back to January 2016, and we are uncertain if any potential findings would require the company to pay penalties. However, we believe the cash outlays for potential penalties will be manageable. We note that annual internal controls will be tested with its 2020 annual filing. "The stable outlook reflects our expectation for the company to improve its operating performance over the next 12 months through its business simplification initiatives and by repaying contractual debt maturities. We expect leverage to be 4x or below over the next 12 months." S&P could raise its ratings on Newell if it: -- Continues to strengthen its profitability by increasing its sales, and its margins benefit from further cost-savings initiatives and management's business simplification efforts. -- Improves its debt leverage toward the mid-3x area. -- Consistently demonstrates a financial policy with respect to acquisitions and shareholder returns such that we believe it will sustain its leverage in the mid-3x. S&P could lower its ratings on Newell if: -- Leverage is above 4.25x. -- It faces top-line or margin challenges, potentially stemming from increased competition in the industry, prolonged economic weakness that reduces consumer spending, or higher-than-expected commodity or tariff pressures that it cannot offset with price increases or productivity improvements. -- It prioritizes shareholder returns ahead of paying down debt, leading its leverage at or above our downgrade trigger. NORTHERN HOLDINGS: Plan Exclusivity Extended Until June 25 ---------------------------------------------------------- At the behest of Debtor Northern Holdings, LLC, Judge Mark S. Wallace of the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, extended the period in which the Debtor may file a chapter 11 plan from February 25, 2021, through and including June 25, 2021, and to solicit acceptances for a plan from April 26, 2021, through and including September 23, 2021. A hearing took place at Courtroom 6C, 411 West Fourth Street, Santa Anna, CA 92701 on February 8, 2021, at 2:00 p.m., to consider the Debtor's motion of exclusivity periods extension. The Court having considered the Motion, the Objection filed by secured creditor Farm Credit West, FLCA, the Debtor's Reply thereto and the declarations submitted in support thereof; and good cause appearing therefore granted the Debtor's request of exclusivity extensions. A copy of the Court's Extension Order is available from PacerMonitor.com at https://bit.ly/2ZsWKT1 at no extra charge. About Northern Holdings LLC Northern Holdings, LLC is a Minnesota LLC created on April 30, 2012, for the purpose of acquiring and restructuring a wine importer and distribution company in St. Paul, Minn. Northern Holdings, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-13014) on October 28, 2020, to stop a foreclosure sale of its real properties by lienholder Farm Credit and so that it can reorganize its financial affairs. In the petition signed by Leroy Codding, managing member, the Debtor estimated $10 million to $50 million in both assets and liabilities. Judge Mark S. Wallace oversees the case. Matthew D, Resnik, Esq., at Resnik Hayes Moradi, LLP, is the Debtor's legal counsel. NPC INT'L: Asks Court to Extend Plan Exclusivity Until June 26 -------------------------------------------------------------- Debtors NPC International Inc. and its affiliates request the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division to extend the exclusive periods during which the Debtors may file a Chapter 11 plan from February 26, 2021, to June 26, 2021, and obtain acceptances for the plan from April 27, 2021, to August 25, 2021. These chapter 11 cases have been significantly consensual to date and all that remains is for the Debtors to continue to work productively with their key stakeholders as they move toward the sale closing and emergence from these chapter 11 cases. Under the respective Purchase Agreements, the Closing Date(s) may not occur prior to March 24, 2021, or after May 14, 2021, meaning that the earliest the Debtors could close the Sale Transaction would still be after the Exclusive Filing Period terminates. To facilitate these efforts, the Debtors seek—largely as a precautionary measure—a 120-day extension of their Exclusive Periods to permit consummation of the Plan. Prior to filing this Motion, the Debtors shared a copy with counsel for the Creditors' Committee and the Ad Hoc Priority/1L Group, and each of these constituents supports the requested extension of the Exclusive Periods. No trustee or examiner has been appointed in these chapter 11 cases. Since the Petition Date, the Debtors have paid their undisputed post-petition debts in the ordinary course of business or as otherwise provided by court order. The Debtors request an extension of the Exclusive Periods not to pressure creditors, but to provide a sufficient, flexible window in which the Debtors can implement the Sale Transaction and other transactions contemplated by the confirmed Plan, without the disruption and distraction created by competing plan proposals. A copy of the Debtors' Motion to extend is available from epiq11.com at https://bit.ly/3jXNako at no extra charge. About NPC International NPC International, Inc., is the largest franchisee of both Pizza Hut and Wendy's as well as the second-largest restaurant franchisee overall in the U.S., operating over 1,300 restaurants in 30 states and the district of Columbia. The Company, which is headquartered in Leawood, Kansas, and has a shared services center located in Pittsburg, Kansas, generates $1.5 billion in sales and has more than 30,000 full and part-time employees. NPC International and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33353) on July 1, 2020. At the time of the filing, the Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy counsel; Alixpartners, LLP as financial advisor; Greenhill & Co., LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims, noticing, and solicitation agent and administrative advisor. ONE AVIATION: Committee Bid for Chapter 7 Approved -------------------------------------------------- Alex Wolf of Bloomberg Law reports that a bankruptcy judge ordered ONE Aviation Corp.'s Chapter 11 case to be turned over to a Chapter 7 liquidator, saying the time is right for a court-appointed trustee to resolve remaining disputes after an asset sale. Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware granted in a telephonic hearing Thursday, February 18, 2021, an unsecured creditors' committee's uncontested request for the conversion. A fiduciary with fresh eyes needs to take over the company's wind-down process and sort out disputes related to professional fees and asset sales, said Judge Sontchi. About ONE Aviation Corporation Headquartered in Albuquerque, New Mexico, ONE Aviation Corporation -- http://www.oneaviation.aero/-- and its subsidiaries were original equipment manufacturers of twin-engine light jet aircraft. ONE Aviation and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case. Nos. 18-12309 to 18-12320) on Oct. 9, 2018, listing its estimated assets at $10 million to $50 million and estimated liabilities at $100 million to $500 million. The petition was signed by Alan Klapmeier, CEO. The Debtors tapped Paul Hastings LLP as their bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel of Paul Hastings; Ernst & Young LLP as financial advisor; Duff & Phelps Securities, LLC as investment banker; and Epiq Corporate Restructuring, LLC as its claims and noticing agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Oct. 22, 2018. The committee tapped Lowenstein Sandler LLP as its legal counsel; Landis Rath & Cobb LLP as the firm's co-counsel; and Conway MacKenzie, Inc. as financial advisor. ORANGE COUNTY BAIL: Global Says Projected Income Illusory --------------------------------------------------------- Legal Services Bureau, Inc., d/b/a Global Fugitive Recovery, on Feb. 19, 2021, submitted an opposition to debtor Orange County Bail Bonds Inc.'s brief in support of confirmation of the Debtor's Second Amended Chapter 11 Plan of Reorganization dated January 5, 2021. The Debtor Brief's asserts its Second Amended Plan complies with all requirements for confirmation set forth under 11 U.S.C. Sec. 1191 and therefore should be confirmed notwithstanding the Subchapter V Trustee's and Global's objections to confirmation. The Debtor "disputes Trustee's standing to raise substantive objections at Plan Confirmation," and asserts that "Trustee's objection as to whether the Plan satisfies the cramdown requirements of section 1191(c) is easily met." Similarly, the Debtor asserts that Global's challenge to the feasibility of the Plan, "is satisfied." "[T]he Debtor's Brief, which attempts to dismiss the Subchapter V Trustee's objections, and ignores or otherwise glosses over Global's objections, does little to show that Debtor has satisfied its burden of proof to establish that the Plan is "fair and equitable" under 11 U.S.C. 1191(c) or that feasibility has been met under 11 U.S.C. 1129(a)(11). Therefore, the Court should deny confirmation of Debtor's Plan and grant Global's motion to dismiss," counsel to Global, D. Edward Hays, Esq., at Marshack Hays LLP, tells the Court. According to Global, the Debtor has not specifically addressed or agreed to correct the deficiencies noted in the Trustee's Objection. Global notes that unsecured creditors may receive no distribution should Debtor have no "actual disposable income." As demonstrated in Global's objection, the Plan does not meet the "fair and equitable" requirement of Sec. 1191(c) because the Debtor is operating at a loss, has operated throughout this entire case at a substantial loss, and its projected disposable income is illusory. "Unless Debtor commits to making the Plan 'fair and equitable' to unsecured creditors by pledging specific amounts, confirmation should be denied. Debtor's substantial losses incurred in this case have already drained the vast majority of the Saddozai proceeds which should have been available to pay unsecured creditors. The Debtor may not continue to put all risk of receiving any benefit from continued operations on creditors," Global asserts. A copy of the objection filed Feb. 19, 2021, is available at https://bit.ly/37zRVf5 About Orange County Bail Bonds Orange County Bail Bonds Inc. -- http://www.bailall.com/-- is a bail bond service headquartered in Santa Ana, Calif. The company is family owned and operated, and specializes in bail bonds for drug-related and drunk driving DUI offenses, spousal abuse and domestic violence charges, prostitution solicitation charges, felonies, and misdemeanors. Starting in 1963, the company has been servicing Orange County, Los Angeles, Riverside, San Bernardino, and San Diego. Orange County Bail Bonds sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12411) on June 21, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $1 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Erithe A. Smith. Marc Forsythe, Esq., at Goe & Forsythe, LLP, is the Debtor's counsel; and Griffiths Diehl & Company, Inc., is the accountant to the Debtor. ORANGE COUNTY BAIL: Subchapter V Trustee Awaits Plan Changes ------------------------------------------------------------ Mark M. Sharf, the Subchapter V Trustee appointed in Orange County Bail Bonds Inc.'s small business case, submitted a response to the Debtor's brief in support of confirmation of the Debtor's Second Amended Chapter 11 Plan of Reorganization dated January 5, 2021. According to the Subchapter V Trustee, the Debtor's counsel has indicated the the Debtor will be amending its plan to provide that the Debtor not receive a discharge unless it: a) pays all actual disposable income over five years; and b) at a minimum the Debtor pays unsecured creditors -- in addition to the initial estimated $121,000 to $142,000 distribution from the Saddozai residence -- another $181,000 over five years. This $181,000 figure roughly represents base 5YRPDI plus one year's worth of a large bond sale. While the Debtor may in fact pay substantially more to unsecured creditors (as more large bond sales may be realized), the Debtor is willing to commit to at least one year's increased income based on this assumption. The Subchapter V Trustee believes the Debtor's willingness to pay actual disposable income while guaranteeing a minimum payment of $181,000 (over and above the initial Saddozai distribution to unsecured creditors) are signs of good faith. That is particularly true because $181,000 represents a reasonable estimate of three years' worth of projected disposable income (the minimum requirement of 11 U.S.C. Sec. 1191(c)(2)(A)). The Trustee is willing to recommend confirmation if and only if: 1. The Debtor amends its plan to incorporate the guaranteed minimum payment referenced above (in addition to the distribution of the Sadozzai proceeds to unsecured creditors already provided for in the Plan); and 2. The Debtor amends the Plan to incorporate these two provisions contained in the Disclosure Statement (but which are now missing from the plan): a. assets will not revest in the Debtor upon confirmation (as discussed in the Disclosure Statement at p. 42 of 56 of Doc. 243, lns 27-28) but rather upon entry of the discharge; and b. the Debtor's related persons/entities execute a tolling agreement currently regarding potential avoidance power actions (as mentioned in Doc. 243, p. 42 of 56 at lines 21-26). In fact the tolling agreements should be drafted, executed and filed with the court prior to and as a condition of confirmation. A copy of the Trustee's response filed Feb. 19, 2021, is available at https://bit.ly/3dyU8ez About Orange County Bail Bonds Orange County Bail Bonds Inc. -- http://www.bailall.com/-- is a bail bond service headquartered in Santa Ana, Calif. The company is family owned and operated, and specializes in bail bonds for drug-related and drunk driving DUI offenses, spousal abuse and domestic violence charges, prostitution solicitation charges, felonies, and misdemeanors. Starting in 1963, the company has been servicing Orange County, Los Angeles, Riverside, San Bernardino, and San Diego. Orange County Bail Bonds sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12411) on June 21, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $1 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Erithe A. Smith. Marc Forsythe, Esq., at Goe & Forsythe, LLP, is the Debtor's counsel; and Griffiths Diehl & Company, Inc., is the accountant to the Debtor. P&L DEVELOPMENT: Moody's Completes Review, Retains B3 CFR --------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of P&L Development, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations P&L Development's ("PLD") B3 Corporate Family Rating reflects its high financial leverage and its more moderate scale, as compared to other larger and better capitalized competitors. PLD has limited geographic diversity, with the majority of its revenues derived from US markets, where the competitive landscape for store brand over-the-counter products is intense. Partially offsetting these risks are PLD's attractive growth prospects for nicotine replacement therapy products and other OTC marketed products in an environment where health care costs will continue to be a focus for consumers. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. PALM BEACH: Creditors to Get Paid from Liquidation of Receivables ----------------------------------------------------------------- Palm Beach Brain & Spine, LLC, ("PBBS") Midtown Outpatient Surgery Center, LLC ("MOSC"), and Midtown Anesthesia Group, LLC ("MAG") submitted a Chapter 11 Plan and a Joint Disclosure Statement dated Feb. 16, 2021. Prior to the filing of the cases, to increase cash flow, the Debtors' Manager, Dr. Amos Dare, decided to sell the Letters of Protection ("LOPs") to various receivable factoring companies (the "Purchasers"). Since Dr. Dare is no longer the Manager of the Debtors, it is difficult to ascertain the exact date he began to sell the LOPs. Upon information and belief, it likely began in 2017. Throughout this Disclosure Statement, the purchased LOPs will be referred as Purchased Receivables. In March 2020, the Debtors sold MOSC to a non-insider third party, which proved to be a complex transaction. Also, in March 2020, RIPA, LLC sold the medical office condominium where PBBS was located to a non-insider third party. As a result, these cases became pure liquidating cases. The Debtors' Plan is a liquidating plan, meaning that a Liquidating Agent will be appointed to collect and liquidate the sole remaining assets of the Debtors, the Unsold Receivables for the benefit of the Creditors. Class Five consists of General Unsecured Claims. The General Unsecured Claims include all other allowed claims of Unsecured Creditors of the Debtors, subject to any objections that are filed and sustained by the Court. The general unsecured creditors shall be paid on a pro rata basis from the collection and liquidation of the Unsold Receivables. The dividend to this class shall not commence until the Administrative claims and Classes 1-3 are paid in full. The dividend to this class of creditors is subject to change upon the determination of objections to claims and the collection and liquidation of the Unsold Receivables. These claims are impaired. The Debtors believe that the risk of non-payment of the percentage distribution to the unsecured creditors in the Chapter 11 is greatly outweighed by the more substantial risk of non-payment should this Bankruptcy be converted to a Chapter 7 Liquidation, wherein the unsecured creditors would receive a distribution of 0%. Creditors of Class Six consist of the Purchasers of Purchased Receivables having purchased existing accounts receivables from the Debtors related to medical treatment provided pursuant to a patient lien and/or letter of protection. These Purchasers shall continue to collect the Purchased Receivables subject to any rights to any residual that the Debtors may have and any setoff/recoupment rights that Purchasers may have. To the extent the Purchaser is not paid in full, the Purchaser shall be entitled to a General Unsecured Claim in Class 5. This treatment is without prejudice to any interests that Northern Trust has in the Purchased Receivables. There shall be no distribution to the equity holders of the Debtors under the confirmed Plan and no dividends to this class of claimants. The equity shareholders shall retain their currently held equity interest in the Debtors. This claim is impaired. The source for payments under the Plan shall be the cash proceeds derived from the liquidation of the Debtors' collection of Unsold Receivables for each Debtor and any other assets of the Debtor that may be liquidated. A full-text copy of the Joint Disclosure Statement dated Feb. 16, 2021, is available at https://bit.ly/3sa71zM from PacerMonitor.com at no charge. Attorneys for Debtors: KELLEY, FULTON & KAPLAN, P.L. Craig I. Kelley, Esquire Florida Bar No.: 782203 1665 Palm Beach Lakes Blvd. The Forum - Suite 1000 West Palm Beach, Florida 33401 Telephone: (561) 491-1200 Facsimile: (561) 684-3773 About Palm Beach Brain and Spine Palm Beach Brain & Spine -- http://www.pbbsneuro.com/-- is a medical practice providing neurosurgery, minimally invasive spine surgery, and treatment for cancer of the brain and spine. Palm Beach Brain & Spine and two affiliates, Midtown Outpatient Surgery Center, LLC and Midtown Anesthesia Group, LLC, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 19-20831) on Aug. 15, 2019. The petitions were signed by Dr. Amos O. Dare, manager. Palm Beach Brain disclosed $13,412,202 in assets and $2,685,278 in liabilities. Midtown Outpatient disclosed $6,857,558 in assets and $2,920,846 in liabilities while Midtown Anesthesia listed $5,081,861 in assets and under $50,000 in liabilities. Judge Mindy A. Mora is the case judge. Dana L. Kaplan, Esq. and Craig I. Kelley, Esq., at Kelley Fulton & Kaplan, P.L. are the Debtors' counsel. PDC BEAUTY: Moody's Completes Review, Retains B3 CFR ---------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of PDC Beauty & Wellness Co. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations PDC Wellness & Personal Care Co.'s B3 Corporate Family Rating reflects its high financial leverage, small scale relative to larger and better capitalized competitors, aggressive acquisition strategy, and event risk related to its majority ownership by a financial sponsor. Demand for the company's products are also vulnerable to shifts in consumer preferences, weakness in household income, retailers' shelf space allocation and marketing support. The mass fragrance, bath, multicultural hair care and beauty segments are also highly competitive and Parfums faces steep competition from branded product companies that are significantly larger, more diverse, financially stronger, and which have much greater investment capacity. These factors are partially balanced by the company's projected ability to generate free cash flow, good geographic and product diversification and solid historical organic growth in several of the company's key product categories. Parfum's credit profile is also supported by good liquidity, good brand name recognition in niche markets, and our expectation that continued distribution gains and product development will support the company's operating performance over the next 12 to 18 months. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. PERFORMANCE AIRCRAFT: Case Summary & 5 Unsecured Creditors ---------------------------------------------------------- Debtor: Performance Aircraft Leasing, Inc. 801 Asbury Drive Buffalo Grove, IL 60089 Business Description: Performance Aircraft Leasing, Inc. owns a 1976 Lear 35 serial #95 aircraft valued at $225,000. Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court Northern District of Illinois Case No.: 21-02211 Debtor's Counsel: Robert R. Benjamin, Esq. GOLAN CHRISTIE TAGLIA LLP 70 W. Madison Suite 1500 Chicago, IL 60602 Tel: (312) 263-2300 E-mail: rrbenjamin@gct.law Total Assets: $327,921 Total Liabilities: $3,684,754 The petition was signed by Edward H. Wachs, president. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DTDPFWQ/Performance_Aircraft_Leasing_Inc__ilnbke-21-02211__0001.0.pdf?mcid=tGE4TAMA PERFORMANCE FOOD: S&P Alters Outlook to Positive, Affirms 'B+' ICR ------------------------------------------------------------------ S&P Global Ratings revised its rating outlook on U.S.-based Performance Food Group Inc. (PFG) to positive from negative. At the same time, S&P affirmed its 'B+' issuer credit rating on the company and its 'B' issue-level rating on the senior unsecured notes, with a '5' recovery rating. The positive outlook reflects the potential for a higher rating over the next year if adjusted leverage improves comfortably below 5x, which may result if PFG's business continues to recover, driven by improving sales trends, share gains, and cost controls. The outlook revision reflects the company's recent better-than-expected operating performance and our expectation for continued recovery in fiscal 2021. Although the trajectory of the virus is still uncertain, PFG's business showed resilience during the pandemic and continued to navigate through the challenging market conditions. The company's sales trends continued to improve sequentially from the significant decline earlier last year driven by COVID-19. Despite a modest slowdown in December due to greater away-from-home dining restrictions, fewer holiday parties, and some impact on outdoor dining in colder weather states, sales trends in the food service business have shown a modest rebound in January, which was more in line with year-over-year comparisons in October and November. PFG's independent restaurant channel has continued to outperform the category, driven by Pizza and Mexican concepts, and independent case volume declines improved sequentially despite a challenging December. S&P said, "We expect continued recovery in operating performance in fiscal 2021 as the rollout of vaccines presents a pathway to improving demand for the company's services. Moreover, several large U.S. states and municipalities have eased restrictions or expressed a willingness to do so. Operating performance should also benefit over the near term due to the seasonally warmer spring and summer months. We expect the company to continue to gain market share, driven by its sales force investment and business mix. We believe PFG is well positioned due to its diversified portfolio and channels and expect continued strong performance in the Pizza, Mexican, and Italian categories." The pace of PFG's recovery has outpaced that of other large broadline food service distributors because of its business mix and skew toward the Pizza and Mexican categories, which performed well. S&P said, "We believe PFG's business mix should limit downside pressure on its credit metrics if there are future meaningful lockdowns in the U.S. in response to worsening virus conditions (which is not assumed in our base case scenario). That said, although we believe PFG would benefit from a more rapid return to normal conditions, its level of improvement would probably trail that of other large food service distributors, which we believe are over-indexed to independent restaurants that are still a long way from recovery." S&P said, "We expect some channels in the Vistar segment to remain challenged and have a slower recovery. Several of Vistar's channels were significantly affected by COVID-19. It remains uncertain when the occupancy in movie theatres, professional office, and travel will return to normal levels. We continue to expect a slower recovery in theatres, office coffee services, travel, and hospitality and not expect a rebound until the vaccination plan is fully executed. Despite the weakness in some channels, the convenience store channel has performed relatively well. The Vistar segment is about 30% of the overall EBITDA, and we estimate about 25% of the channels within Vistar to have a slower recovery." Adequate liquidity should enable the company to withstand meaningful industry headwinds. PFG has about $1.9 billion of liquidity as of the fiscal second quarter, including $417 million of cash and nearly $1.5 billion of availability on its asset-based lending (ABL) revolving credit facility. S&P said, "We expect PFG to use cash on hand to pay off its $110 million junior term loan and reduce its outstanding balance on its ABL revolver. We forecast liquidity will be sufficient to weather industry headwinds through 2021." The positive outlook reflects the potential for a higher rating over the next year if PFG's business continues to recover, driven by improving sales trends, share gains, and cost controls. S&P said, "We could raise the rating over the next year if PFG's operating performance continued to improve and adjusted leverage were sustained comfortably below 5x. This could happen if recovery were on track and sales and EBITDA approached pre-coronavirus levels. An upgrade would also be predicated on the company maintaining its current financial policies and not transacting debt-financed acquisitions or share repurchases that result in any meaningful increase in leverage. "We could revise the outlook to stable if unfavorable industry trends remained and we believed that the company would be unable to reduce sustained leverage to below 5x. Industry demand and cash flows could remain well below pre-coronavirus levels if efforts to contain the virus failed, potentially due to adverse mutations resulting in sustained government-imposed capacity restrictions on restaurants or consumer hesitation to visit restaurants. It's also possible that profitability could deteriorate if there were widespread permanent restaurant closures or if there were a deep protracted economic downturn. We also believe potential food and labor cost inflation could weigh on margins and hurt prospects for credit ratio improvement." PETCO HEALTH: S&P Assigns 'B' ICR on Proposed Refinancing --------------------------------------------------------- S&P Global Ratings assigning a 'B' issuer credit rating to Petco Health and Wellness, the proposed issuer of the new debt. S&P currently rates the existing issuer, Petco Holdings Inc., and will discontinue its rating at this entity when the transaction is completed. S&P said, "We are also assigning our 'B' issue-level rating and '3' recovery rating to the company's proposed $1.2 billion term loan due in 2028. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a hypothetical default. "The stable outlook reflects our expectation Petco's performance will continue to benefit beyond the pandemic as increased pet adoption and fostering provide some tailwinds, leading to sustained positive same-store sales, stable margins, and leverage in the mid-4x range over the next 12 months. "The rating reflects our expectation that Petco will complete the refinancing, extending debt maturities with no material impact to leverage, which is currently in the mid-4x area. The new capital structure will consist of a $500 million ABL due 2026 (not rated), a $1.2 billion term loan B due 2028, and $500 million of other senior secured debt. This refinancing with longer-term maturities addresses issues in the company's capital structure, which currently contains fast-approaching maturities (October 2022 for the existing ABL and January 2023 for the term loan). As a result, we are revising our view of its capital structure to neutral from negative. The refinancing is on the back of a successful IPO, through which the company raised about $1 billion of proceeds and reduced debt, improving leverage by roughly two turns to the mid-4x area. "Higher pet adoption rates through the pandemic have provided revenue tailwinds, though we are monitoring competitive threats. Pet ownership has increased during the COVID-19 pandemic and contributed to solid sales growth during the past few quarters. In addition, as consumers spend more time at home and reduce spending on out-of-home entertainment, they have reallocated discretionary income toward products that improve their lives at home. In our view, this contributed to higher sales of pet hardgoods in 2020. We expect sales growth in 2021, albeit at lower rate year over year, as sales of hardgoods and specialty merchandise (such as leashes and pet beds) moderate in the weaker consumer spending environment. We believe Petco's performance has benefited from its heightened emphasis on business investments. "Online competition from Chewy and Amazon, as well as mass merchants, remain a formidable threat. We do not believe Petco has a solid online presence relative to these peers, and we consider competitive pressures from larger peers as risks to the company's business. According to Petco's recent SEC filing, the pet care industry has grown at a compounded annual growth rate of 5%. However, we believe Petco's average growth will be below the industry average, given the onslaught of online competitors and mass merchants, which will continue to change the competitive landscape. "Petco's business investments are increasing and they should help defend against imminent market threats. Over the past few years, Petco has invested about $300 million in business transformation initiatives, which we think helped the company record good top-line growth. We believe these initiatives, such as leveraging its brick-and-mortar stores as mini distribution centers (to supplement its omni-channel operations) and its commitment to offer healthy food and general merchandise, should drive foot traffic. Additional services, such as broader veterinary care and tele-vet, can also provide future growth opportunities. Petco has indicated that its stores are within three miles of 54% of its customers, and customers who engage across its multiple-channel approach spend 3x-6x more than the single-channel customer. We believe that if Petco can offer competing products and services at attractive prices as well as fast delivery speeds, it could sustain decent sales growth over the next two to three years." In conjunction with the IPO transaction, $450 million (of $750 million) of Petco's senior unsecured notes were exchanged for Scooby Aggregator L.P.'s notes (a holding company owned by the financial sponsors CVC Capital Partners Advisory (U.S.) Inc. and Canada Pension Plan Investment Board). The company paid the remaining portion at par. Scooby will hold the financial sponsors' remaining ownership of the public company (about 80%), which will secure the new notes issued at Scooby. S&P said, "We viewed this exchange as opportunistic. Through Scooby Aggregator L.P., we believe the sponsors have influence on corporate decision making. We anticipate that the holding company debt paydown will be completed through secondary share sales of the equity. However, we note the potential for future dividends from Petco to pay down debt or service interest, though we believe the risk of this is low because of public minority interest ownership and our view that the sponsor will gradually reduce its ownership. Still, we include the Scooby obligations ($450 million of debt) in our calculation of credit metrics to reflect the obligation of the holding company." The stable outlook reflects S&P's expectation that leverage will remain in the mid-4x area over the next 12 months, improving modestly on same-store sales growth and stable profit margins. S&P could raise its rating on Petco if: -- S&P believes it is successfully navigating the risks of competitive threats in the pet supply industry, which would be evidenced by Petco achieving consistently positive same store sales, expansion of e-commerce and service revenues, and maintenance of EBITDA margins. Under this scenario, its view of the company's competitive positioning could improve; and -- S&P expects debt to EBITDA will decline to and remain below 4x with minimal risk of a leveraging event, likely requiring the exit of the sponsors. S&P could take a negative rating action if: -- S&P anticipates debt to EBITDA will rise to and remain above 5.5x, which could occur if same-store sales are meaningfully negative and EBITDA margins decline by more than 200 bps; or -- The company is unsuccessful in its refinancing attempt, failing to address the near-term maturities in its capital structure. PH BEAUTY III: Moody's Completes Review, Retains Caa1 CFR --------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of pH Beauty Holdings III, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations ph Beauty's Caa1 Corporate Family Rating reflects the company's high financial leverage, small scale as compared to larger competitors, and event risk related to its majority ownership by a financial sponsor. The cosmetic accessories and facial skin care industries are also highly competitive, and demand for these products is vulnerable to weakness in household income, retailers' shelf space allocation and marketing support. pH Beauty faces steep competition from branded product companies that are significantly larger, more diverse, financially stronger, and which have much greater investment capacity. Leverage is high and Moody's expects aggressive financial policies under private equity ownership. The company's credit profile is supported by pH Beauty's strong brand name recognition in niche markets. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. PHILADELPHIA AUTHORITY: S&P Lowers Long-Term ICR to 'CCC (sf)' -------------------------------------------------------------- S&P Global Ratings lowered its long-term ratings to 'CCC (sf)' from 'BB- (sf)' and 'B+ (sf)' on Philadelphia Authority for Industrial Development's series 2016A and subordinate 2016B senior housing revenue bonds (The Pavilion), respectively. The outlook is negative. "The rating action reflects our opinion of Pavilion Apartments Penn LLC's default on various covenants, announced in a disclosure report filed by the trustee, Wilmington Trust, on Electronic Municipal Market Access, posted Feb. 17, 2021," said S&P Global Ratings credit analyst Daniel Pulter. These included covenant defaults under the loan agreement pertaining to basic loan payments, the rate covenant, failure to retain a management consultant, and failure to submit a report from an insurance consultant. The downgrade also reflects our view that additional, specific default scenarios are envisioned within the next 12 months without an unforeseen positive development. PHUNWARE INC: Closes Offering of $24.7-Mil. Worth of Common Stock ----------------------------------------------------------------- Phunware, Inc. has closed its previously announced underwritten public offering of common stock, effective Feb. 12, 2021. Phunware sold a total of 11,761,111 shares of its common stock in the offering, after the underwriter's partial exercise of its overallotment option. Net proceeds to Phunware from the offering were approximately $24.7 million, after deducting underwriting discounts and commissions and other estimated offering expenses. Northland Securities Inc. and Roth Capital Partners acted as joint book-running managers for the offering. A registration statement relating to the securities being sold in the offering was declared effective by the Securities and Exchange Commission on Feb. 11, 2021. A final prospectus supplement related to the offering was filed with the SEC on Feb. 12, 2021 and is available on the SEC's website located at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained, when available, from Northland Securities, Inc., Attention: Heidi Fletcher, 150 South Fifth Street, Suite 3300, Minneapolis, MN 55402, or by calling (612) 851-4918, or by emailing hfletcher@northlandcapitalmarkets.com; Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, (800) 678-9147 or by accessing the SEC's website, www.sec.gov. About Phunware Headquartered in Austin, Texas, Phunware, Inc. -- http://www.phunware.com-- is a Multiscreen-as-a-Service (MaaS) company, a fully integrated enterprise cloud platform for mobile that provides companies the products, solutions, data and services necessary to engage, manage and monetize their mobile application portfolios and audiences globally at scale. Phunware incurred a net loss of $12.87 million in 2019 compared to a net loss of $9.80 million in 2018. As of Sept. 30, 2020, the Company had $29.35 million in total assets, $34.16 million in total liabilities, and a total stockholders' deficit of $4.81 million. Marcum LLP, in Houston, TX, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. POINCIANA MANAGEMENT: Seeks Feb. 28 Plan Filing Extension --------------------------------------------------------- Poinciana Management Group, LLC asks the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, to extend its exclusive plan filing and solicitation periods from February 18 to February 28, 2021. The Debtor says it owns residential real estate in Miami-Dade County which has fallen delinquent on its obligations to its sole mortgage lender, Barreto Capital, LLC as well as to the Miami-Dade Tax Collector for delinquent property taxes. The Debtor says the bankruptcy filing was triggered by the imminent sale of the property by Barreto. "The Debtor intends to file a plan of reorganization that will provide for the complete payoff Barreto's lien and the delinquent real estate taxes. The Debtor seeks an extension of the exclusive period within which it may file a disclosure statement and plan of reorganization and ultimately solicit acceptances of any such plan by ten days, up through and including February 28, 2021. T[he extension] request is being made to ensure the Debtor's continued management of its financial affairs and continued negotiation with its creditors, as well as to preserve the Debtor's possibility of reorganization," Poinciana explains. About Poinciana Management Group Poinciana Management Group LLC is a Miami. Fla.-based registered investment advisory firm serving individuals, families and institutions. Poinciana Management Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-21528) on October 21, 2020. At the time of the filing, the Debtor had estimated assets of between $100,001 and $500,000 and liabilities of the same range. Peter Spindel, Esq. P.A. is the Debtor's legal counsel. PORTOFINO TOWERS: Wins April 25 Plan Exclusivity Extension ---------------------------------------------------------- Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida extended the periods within which Portofino Towers 1002 LLC has the exclusive right to file a Chapter 11 plan through and including April 25, 2021, and to solicit acceptances through and including June 24, 2021. The Court considered the arguments of counsel and the U.S Trustee, and the Debtor has filed the delinquent Monthly Operating Reports as a condition of the entry of this Order. A copy of the Court's Extension Order is available from PacerMonitor.com at https://bit.ly/2M1ZiEB at no extra charge. About Portofino Towers 1002 LLC Portofino Towers 1002 LLC owns a condo at 300 S Pointe Dr. Unit 1002, Miami Beach FL 33139. Portofino Towers 1002 LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20446) on September 27, 2020. The petition was signed by Laurent Benzaquen, authorized member (AMBR). At the time of filing, the Debtor estimated $1 million to $10 million in assets and liabilities. The cases are assigned to Judge A. Jay Cristol. Joel M. Aresty, Esq. at JOEL M. ARESTY P.A. represents the Debtor as counsel. Until further notice, the United States Trustee said it will not appoint a committee of creditors pursuant to 11 U.S.C. Section 1102. POTENTIAL DYNAMIX: Amazon Limited Liability Clause Unenforceable ---------------------------------------------------------------- Judge Daniel P. Collins of the United States Bankruptcy Court for the District of Arizona denied Amazon Services LLC's Motion for Partial Summary Judgement, that requested the Court to enforce the limiation of liability clause in the Amazon Services Business Solutions Agreement. Chapter 11 Trustee Timothy H. Shaffer filed a complaint against Amazon, which sought, among other things, damages due to Amazon's alleged breach of its Agreement with Debtor Potential Dynamix, LLC. In its Motion, Amazon argues that, even if the Trustee can prove his claims at trial, the damages are limited to $2,206,369. In support of this proposition, Amazon cites the last sentence of the Clause which states: "FURTHER, OUR AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED WILL NOT EXCEED AT ANY TIME THE TOTAL AMOUNTS DURING THE PRIOR SIX MONTH PERIOD PAID BY YOU TO AMAZON IN CONNECTION WITH THE PARTICULAR SERVICE GIVING RISE TO THE CLAIM." Relying on Delaware case law, Amazon suggested that limitation of liability clauses between two business like Amazon and the Debtor are routinely enforced when they are clearly written, where damages were uncertain at the time of contracting, and when the limitation is reasonable. Amazon argued that the Clause was clear, and it was written in all capital letters. Amazon also suggested any potential claimed damages were uncertain at the time of the Agreement "because the parties could not predict the amount of any claims that might arise, given the thousands of inventory units and transactions involved and the many years that have passed." Finally, Amazon contended the damage limitation in the Clause "is reasonable because the Trustee now seeks to recover far more than the amount he alleged in the Complaint." The Trustee responded arguing: (1) the general terms of the Clause do not override Amazon's specific duties and liabilities under Section F-4 of the Agreement and that the Agreement does not contain a liability limitation; and (2) the damage limitation is unreasonable and unconscionable. Judge Collins found that Washington law, not Delaware law, governs the enforceability of the Clause. "The Clause is a part of the Agreement and the Agreement explicitly states elsewhere that 'the laws of the State of Washington. . . .' govern the Agreement," he explained. The Trustee argued the Clause is a general provision which conflicts with, and must be read as subordinate to, the specific language of Section F-4 of the Agreement. That provision states: "Payment of the Replacement Value is [Amazon's] total liability for any duties or obligations [Amazon] or [its] agents or representatives may have as a bailee or warehouseman, and [Debtor's] only right or remedy that [Debtor] may have as a bailor." The Trustee contends this specific language overrides the general language of the Clause and its limitation of damages. The Court disagreed. "Section F- 4 tells this Court the Debtor's damages are measured by Replacement Value when Amazon loses, destroys, misplaces, etc. Debtor's inventory. The Clause, however, indicates that damages claimed by Debtor, however measured, are limited to 6 months' worth of fees paid to Amazon," Judge Collins said. The Trustee's second argument points to the Restatement (Second) of Contracts, Section 208, which the Trustee asserts Washington courts follow. The Trustee contended that, under the Restatement, the damage limitation is unconscionable because the Agreement was a standardized form, was not negotiated, not signed by either party, binds a party merely by use of the services, and has a damage limitation that is one sided, unreasonably restrictive and unilaterally limits only Amazon's liability. Judge Collins said that "Washington courts apply a 6-factor balancing test to determine whether a contract provision violates public policy. 22 If more of the 6 factors appear in a given exculpatory agreement, the agreement is more likely to be declared invalid on public policy grounds." Washington's 6-factor balancing test is as follows: (1) the agreement concerns an endeavor of a type generally thought suitable for public regulations; (2) the party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public; (3) such party holds itself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards; (4) because of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks the services; (5) in exercising a superior bargaining power, the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence; and (6) the person or property of members of the public seeking such services must be placed under the control of the furnisher, subject to the risk of carelessness on the part of the furnisher, its employees, or agents. The Court found that the Clause satisfied a majority of the factors, specifically: 1. Amazon operates in a regulated industry and must comply with a myriad of statutory and regulatory requirements. 2. Amazon is the dominant online platform for internet sales of most any product one can imagine. One can argue that Amazon provides an essential or necessary public service, especially during the current pandemic. 3. Amazon holds itself out to the general public as willing to sell its services to any member of the public who seeks it, subject to certain limitations. 4. Whether or not Amazon's platform is considered essential, it does possess a decisive advantage of bargaining strength. Although the Debtor could have taken its business elsewhere if they disagreed to the provisions found in the Agreement, there really is no comparable internet-based channel it could have used to sell its tens of thousands of products. In the world of e-commerce, Amazon is THE go-to online shopping platform. That said, the Debtor did nominally have the option of taking its business elsewhere. 5. The Agreement was a standardized form that bound a customer to its terms merely by using Amazon's services. There was no possibility or hope of Debtor modifying any terms or provisions in the Agreement, there could be no negotiation, and no signatures were required. The Agreement was truly a "take it or leave it" proposition. The Agreement is an adhesion contract. 6. Under the Agreement, Amazon gained exclusive control over the Debtor's inventory. This fact placed the Debtor under the tight control of Amazon. "At least 5, and possibly 6, of the Washington factors point towards recognition that its public policy is violated by the liability limitation contained in the subject Clause of the parties' Agreement. Accordingly, this Court finds the Clause is unenforceable as violative of Washington's public policy and violates the 3rd requirement if the Clause were to be enforceable. In summary, none of the legal perquisites found in Washington's case law are present for this Court to enforce the terms of the Clause," Judge Collins held. The case is In re: POTENTIAL DYNAMIX LLC, Debtor. TIMOTHY H. SHAFFER, Chapter 11, Trustee, Plaintiff, v. AMAZON SERVICES LLC, Defendant, Case No. Case No. 2:11-bk-28944-DPC, Adversary No. 2:13-ap-00799 (Bankr. D. Ariz.). A full-text copy of the Under Advisement Order Re Limitation of Liability Clause, dated February 15, 2021, is available at https://tinyurl.com/y93373x9 from Leagle.com. About Potential Dynamix Potential Dynamix LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 11-28944) on Oct. 13, 2011. In the petition signed by Daniel Bellino, its managing member, the Debtor estimated assets and liabilities of $1,000,001 to $10,000,000. Judge Daniel P. Collins presides over the case. James F. Kahn, P.C., was the Debtor's legal counsel. On Jan. 27, 2012, Timothy H. Shaffer was appointed as Chapter 11 trustee. The trustee hired Schian Walker P.L.C. as bankruptcy counsel. An official committee of unsecured creditors was appointed in the Debtor's case. Allen Barnes & Jones, PLC represents the committee as legal counsel. PRESTIGE BRANDS: Moody's Completes Review, Retains B1 CFR --------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Prestige Brands, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Prestige Consumer Healthcare's B1 Corporate Family Rating reflects its strong and stable free cash flow from diverse over-the-counter branded products. The company's products are generally among the leading brands in their respective niche categories and largely allow consumers to treat common, recurring ailments. Prestige's branded products typically have long commercial histories and have built broad appeal and trust among consumers. The company's outsourced manufacturing creates a variable cost structure and limits the need for sizable capital spending, which favorably contributes to cash flow stability. That said, the company operates in mature categories with flat-to-low single-digit organic growth. Prestige's sales have declined following the divestiture of noncore brands. More recently, sales in certain categories related to travel and sports activities have declined due to reduced consumption, reflecting headwinds related to the coronavirus. That said EBITDA margins will remain relatively steady given the company's continued productivity improvements and cost reduction initiatives. The company's modest scale as compared to large diversified consumer peers and OTC business focus create greater relative exposure to category competition and concentrated retail distribution. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. PSW VENTURE: Case Summary & Unsecured Creditor ---------------------------------------------- Debtor: PSW Venture LLC 180 E Grapeview Point Allyn, WA 98524 Business Description: PSW Venture is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: February 18, 2021 Court: United States Bankruptcy Court Western District of Washington Case No.: 21-40280 Judge: Hon. Brian D. Lynch Debtor's Counsel: David C. Smith, Esq. LAW OFFICES OF DAVID SMITH, PLLC 201 Saint Helens Ave Tacoma, WA 98402 Tel: 253-272-4777 Fax: 253-461-8888 E-mail: david@davidsmithlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Patricia Williams, the managing member. The Debtor lists Chase as its sole unsecured creditor holding a claim of $11,000. A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VMZA7RY/PSW_Venture_LLC__wawbke-21-40280__0001.0.pdf?mcid=tGE4TAMA REGIONAL PAVEMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Regional Pavement Maintenance of Arizona, Inc. 7770 Venture Street Colorado Springs, CO 80951 Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Colorado Case No.: 21-10808 Judge: Hon. Joseph G. Rosania Jr. Debtor's Counsel: David J. Warner, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street, Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwarner@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Aaron Avery, CEO. 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/2ZF2WQA/Regional_Pavement_Maintenance__cobke-21-10808__0004.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/P5PWWXA/Regional_Pavement_Maintenance__cobke-21-10808__0001.0.pdf?mcid=tGE4TAMA RENAISSANCE HOLDING: Moody's Affirms B3 CFR on Nearpod Acquisition ------------------------------------------------------------------ Moody's Investors Service affirmed Renaissance Holding Corp.'s (dba Renaissance Learning) B3 Corporate Family Rating and B3-PD Probability of Default Rating following the company's proposed acquisition of Nearpod. Moody's also affirmed the B2 rating for the company's first lien senior credit facilities including revolver and term loan, and affirmed the Caa2 rating for the second lien term loan. Additionally, Moody's assigned a B2 rating to the proposed $140 million of new revolver (upsized and extended from the existing $80 million revolver due 2023). The outlook remains stable. The $650 million acquisition of Nearpod along with related fees and expenses will be financed with an additional $358 million first lien term loan and $135 million second lien term loan, as well as equity contribution from its equity sponsor, Francisco Partners. Moody's views this primarily debt funded acquisition as very aggressive financial policy because it will increase Moody's adjusted debt-to-EBITDA leverage to in excess of 10.0x pro forma for the transaction (vs low 9.0x for the trailing twelve months ended September 30) due to the high acquisition multiple the company is paying for Nearpod. Given the very high pro forma leverage, Moody's views the company as weakly positioned in the B3 category. However, Moody's affirmed the ratings based on the expectation that Renaissance Learning will be able to de-lever to below 9.0x debt-to-EBITDA by year end 2022 with solid earnings growth including realization of synergies from the Nearpod acquisition. The affirmation also reflects the company's track record of successfully integrating acquisitions in the past. Pro forma for the transaction, the company will have good liquidity with $71 million cash on balance sheet to fund seasonal working capital needs and is expected to generate positive free cash flow of over $30 million over the next year, which also supports the affirmation of the B3 CFR. The company is upsizing its revolver from $80 million to $140 million, which Moody's expects will primarily be used to fund working capital needs for the year. The acquisition will further increase Renaissance Learning's scale with Nearpod's content delivery platform as well as additional content from the existing learning products on Nearpod's platform. Additionally, the educational technology industry is experiencing high growth accelerated by the coronavirus pandemic and the increase in distance learning. Moody's took the following ratings actions: Issuer: Renaissance Holding Corp. Ratings Affirmed: Corporate Family Rating, affirmed at B3 Probability of Default Rating, affirmed at B3-PD Gtd Senior Secured First Lien Revolving Credit Facility, affirmed at B2 (LGD3) Gtd Senior Secured First Lien Term Loan, affirmed at B2 (LGD3) Gtd Senior Secured Second Lien Term Loan, affirmed at Caa2 (LGD5) Ratings Assigned New $140 million Gtd Senior Secured first lien revolver, assigned B2 (LGD3) Outlook Actions: Outlook, Remains Stable Moody's expects to withdraw the B2 rating on the existing revolver expiring in 2023 once the transaction closes and the new revolver is in place. RATINGS RATIONALE Renaissance Learning's B3 CFR broadly reflects its very high leverage as the result of aggressive growth strategy with debt funded acquisition. Pro forma Moody's adjusted debt-to-EBITDA exceeds 10.0x (after deducting software development costs). Debt-to-EBITDA leverage would be in the 8.0x range if the change in deferred revenue is included in the calculation of EBITDA. Although Moody's expects leverage will decline to below 9.0x due to earnings growth over the next 12 to 18 months including through the realization of synergies, Renaissance Learning's leverage is expected to remain high over the longer term given its private equity ownership and a growth strategy that incorporates strategic debt funded acquisitions. The leverage weakly positions the company within the rating category. The rating is also constrained by the competitive nature of the industry with other participants in the relatively fragmented K-12 digital learning and assessment market. High investment needs will consume cash as the company continues to enhance content and product features to maintain competitiveness. However, the rating is supported by Renaissance Learning's established brand name with a portfolio of well-recognized product offerings in the digital education market, and solid growth prospects driven by favorable industry fundamentals such as the transition of educational services to more digital-oriented delivery. The rating also benefits from the company's relatively stable cash generating capability due to a high level of recurring revenue and good margins. Moody's views Renaissance Learning's governance risk as high due to its private equity ownership by Francisco Partners. Given this, Moody's expects an aggressive financial and acquisition strategy that tends to favor shareholders. 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. 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 our 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. Renaissance Learning is experiencing positive demand growth from school districts related to societal trends toward digital learning tools that is being bolstered by distance learning during the pandemic. This is more than offsetting the drag the company's orders and sales from pressure on school budgets from lower tax revenues. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that the company will be able to de-lever rapidly with solid earnings growth over the next 12 to 18 months as well as maintain good liquidity with free cash flow generation of about $30 million over the next year. The ratings could be downgraded if growth is weaker than expected and leverage is not declining rapidly, market share declines, EBITA-to-interest expense less than 1.0x, free cash flow to debt is below 1%, or liquidity deteriorates The ratings could be upgraded if the company delivers sustained organic revenue and earnings growth, with Moody's adjusted debt-to-EBITDA maintained well below 6.5x and free cash flow as a percentage of debt sustained above 5%. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Renaissance Learning is a provider of subscription-based educational practice and assessment software and school improvement programs for kindergarten through senior high (K-12) schools. The company has been owned by private equity firm Francisco Partners since 2018. Pro forma for the acquisition, total billings (revenue proxy) is expected to be about $400 million in 2020. RENAISSANCE HOLDING: S&P Affirms 'B-' ICR, Outlook Stable --------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on Renaissance Holding Corp. The outlook is stable. S&P said, "We are affirming our 'B-' issue-level rating on the company's existing first-lien debt and revolver. The recovery rating is '3', reflecting our expectation of meaningful (50%-70%, rounded estimate: 65%) recovery in the event of default. "We are also affirming our 'CCC' issue-level rating on the company's existing second-lien. The recovery rating is '6', reflecting our expectation of negligible (0%-10%, rounded estimate: 0%) recovery in the event of default. "Nearpod's growth justifies the purchase price. We view the Nearpod acquisition as a growth play because Nearpod has done well, increasing billings by almost 100% in the past year. Nearpod's annual billings have grown to $86 million in 2020 from $33 million in 2018, and 2021 is shaping up to be another strong year. Nearpod focuses on digital learning tools and interactive content across multiple platforms. Its catalog of more than 3,500 standards-aligned lessons spans every K-12 topic, from digital citizenship to algebra and incorporates interactive assessments. "We expect Renaissance to generate revenue growth and positive free cash flow in 2021, despite the high debt load. Notwithstanding the estimated leverage, which we expect to be above 10x over the next year, we expect the pro forma company to generate positive free cash flow, with fiscal 2021 free cash flow to debt in the 2%-3% range. We expect pro forma 2020 revenue of about $400 million, with the high-single revenue growth supported by the strong billings in fiscal 2020. Recurring revenue, strong retention rates, above-average profitability, and moderate capital expenditure (capex) also support our free cash flow estimates. We expect Nearpod's content and teacher-focused experiences to integrate well with Renaissance's delivery platform content and provide value to the company's end users. We expect additional draws on the revolver during the first half of the calendar year, given both companies will display similar seasonality in cash flows, but the revolver upsize should support the company's cash needs. "We expect COVID-19 tailwinds to continue for Ed-Tech companies. We view ed-tech to be one of the beneficiaries of the pandemic, with classroom technology investments by school districts likely to remain in a post-pandemic world. The strong billing performance by both companies shows that investments aren't stopping despite many schools being partly opened in early 2021. There is some uncertainty around school budget funding levels, but we view that to be somewhat negated by the COVID-19 stimulus packages announced. School budgets historically have been resilient to past economic cycles, notably during 2008-2010. There may be delays in buying decisions if administrators feel budget constraints but that hasn't played out so far. "The stable outlook reflects Renaissance's highly recurring and profitable revenue base, and our expectation that the company will successfully integrate the Nearpod assets into its product ecosystem and will generate sufficient FOCF to meet its high debt load. "We could lower the rating if the education software industry landscape evolved and the company were unable to maintain its market position or if we saw school funding challenges, leading to a rise in customer attrition, negative operating cash flow, and weakening liquidity. "Although we are unlikely to do so at this time, we could consider an upgrade if Renaissance were able to increase its revenue while maintaining its profitability, leading to a higher EBITDA base and leverage declining to the 7x area." RENTPATH HOLDINGS: Signs Deal to Sell to Redfin for $608 Million ---------------------------------------------------------------- Redfin (NASDAQ: RDFN) said Jan. 19, 2021, it has entered into an agreement to acquire RentPath, the Atlanta-based owner of ApartmentGuide.com, Rent.com, and Rentals.com, for $608 million in cash. The acquisition will bring together a leading site for buying a home with a leading site for renting a home, giving anyone trying to move a complete view of her options. "RentPath has more than 20,000 apartment buildings on its rental websites, and grew its traffic more than 25% last year," said Redfin CEO Glenn Kelman. "We can almost double that audience, as one in five of Redfin.com's 40+ million monthly visitors also wants to see homes for rent. Together with RentPath, we can create an online destination for every North American to find a home." "We are energized by the transformational potential of this combination to help more consumers find the right home and help property managers find residents," said Dhiren Fonseca, RentPath's CEO. "RentPath's customers experienced all-time highs in traffic and leads from us last year and our value proposition to multifamily property managers has never been better. By acquiring RentPath, Redfin will be as committed as we are to the rental market. As part of the Redfin family, our platform will be well positioned to lead the market in the quality and value of our products, while giving our current and future customers access to many more high-intent renters through Redfin's extensive network." Redfin, the technology-powered real estate brokerage, operates the #1 nationwide brokerage search site. The company uses a combination of local real estate agents and technology to make it easier, faster and less costly to buy or sell a home. RentPath simplifies the apartment search experience for millions of consumers, connecting property-management companies with qualified prospective renters. The RentPath network of websites reached 16 million monthly visitors on average in 2020, and recorded full year 2020 revenue of $194 million. Strategic Rationale * Better Search Experience: More than a third of North American adults currently rent, so showing rentals is an important expansion of Redfin's mission. When consumers think of home, they'll think of Redfin, whether they are hoping to rent or buy, sell, or find a tenant. Redfin expects RentPath's rental listings to be on Redfin.com in late 2022. * Better Value for Advertisers: Redfin will increase RentPath's reach, creating more rental opportunities for the rental properties promoted on RentPath sites. Redfin estimates that 10 million of Redfin's 40+ million monthly online visitors may also be interested in rental properties. * Traffic Growth: Both Redfin and RentPath grew traffic by over 20% in 2020 and have powerful channels for meeting customers and marketing listings directly to consumers. Together with RentPath, Redfin will aim to compete with the largest portals on every front, for every visitor. * Improving the Rental Experience: While Redfin does not expect to hire real estate agents to represent renters, the company is excited about the opportunities to make the whole process of renting an apartment better. Additional commentary from Glenn Kelman about the expected benefits of the acquisition is available at https://www.redfin.com/news/rentpath-acquisition. Key Business Metrics Redfin RentPath ------ -------- Headquarters Seattle Atlanta Employees (as of 12/31) ~4,000 ~700 Avg Monthly Visitors 39 million 16 million Organic Visitors YoY Growth 23% 26% Total Revenue $875 million $194 million *Reflects trailing 12 months ended Sept. 30, 2020, for Redfin, and full-year 2020 for RentPath. Transaction Details The Boards of Directors of both companies have approved the transaction, which is subject to customary closing conditions, including antitrust approval and approval from a bankruptcy court. The closing of the transaction is not contingent on financing. Further details around closing will be forthcoming, at which time additional organizational and operational details will be announced. About Redfin Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. It integrates every step of the home buying and selling process and pairing its own agents with its own technology, creating a service that is faster, better and costs less. Redfin offers brokerage, iBuying, mortgage, and title services, and it also runs the country's #1 nationwide brokerage website, offering a host of online tools to consumers, including the Redfin Estimate. Redfin represents people buying and selling homes in over 90 markets in the United States and Canada. Since its launch in 2006, Redfin has saved customers over $800 million and it has helped them buy or sell more than 235,000 homes worth more than $115 billion. About RentPath Holdings RentPath is a digital marketing solutions company that empowers millions nationwide to find apartments and houses for rent. RentPath operates the Rent.com and ApartmentGuide.com, and Rentals.com online rental listing platforms. RentPath Holdings, Inc., and 11 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10312) on Feb. 12, 2020. RentPath Holdings was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities as of the bankruptcy filing. Weil, Gotshal & Manges LLP and Richards Layton & Finger are serving as legal counsel, Moelis & Company LLC is serving as a financial advisor, and Berkeley Research Group, LLC is serving as restructuring advisor to RentPath. Prime Clerk LLC is the claims agent. * * * Rentpath signed a deal to sell its business to real-estate data provider CoStar Group Inc. for $600 million but was forced to terminate the deal in December 2020 after the deal was blocked by federal antitrust regulators. REVLON CONSUMER: Moody's Completes Review, Retains Caa3 CFR ----------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Revlon Consumer Products Corporation and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Revlon's Caa3 Corporate Family Rating reflects its very high financial leverage and our belief that high leverage remaining over the next year elevates risk of a debt restructuring. The rating is further constrained by weak operating performance, weak liquidity, potential difficulty in achieving cost cutting initiatives, and ongoing event risk related to M&F Worldwide/Ron Perelman control. These constrains have been further exasperated by the coronavirus pandemic. The rating is supported by a diverse portfolio of well-known global beauty brands and good geographic diversification. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. REXNORD LLC: S&P Places 'BB' ICR on Watch Neg. on Planned Spin-Off ------------------------------------------------------------------ S&P Global Ratings placed all of its ratings on Wisconsin-based multiplatform industrial company Rexnord LLC, including its 'BB' issuer credit rating, on CreditWatch with negative implications. Rexnord announced that it plans to spin-off its process and motion control (PMC) business and merge it with Regal Beloit Corp. while retaining its water management (WM) business. S&P said, "The CreditWatch placement reflects the possibility that we will lower our ratings on Rexnord because we believe the transaction will weaken its credit profile given the significant reduction in its scale, scope, and business diversity, as well as its heightened exposure to cyclical new commercial and institutional construction markets. "The CreditWatch placement reflects our view that the spin-off of PMC could negatively affect our view of Rexnord's overall credit quality. We believe the company could face heightened credit risks due to its significantly smaller scale (revenue and EBITDA will be reduced by more than half) and reduced scope and product diversity following the transaction because it will be solely focused on its WM solutions business. The remaining WM segment will also have an increased exposure to new nonresidential construction end markets (close to 47% of segment revenue), which we think can be cyclical. These risks are balanced by the WM segment's good performance through the COVID-19 related recession, including an increase in its sales supported by the demand for the company's expanded touchless and hygienic products and solutions offerings, as well as its material proportion of recurring replacement revenue (close to 35%). "The spin-off of the PMC business and its subsequent merger with Regal Beloit will be completed via a tax-efficient Reverse Morris Trust transaction. We expect that Rexnord will redeem all of its existing debt at the close of the transaction with a combination of cash from its operations and a dividend from the combined Regal Beloit/PMC. We expect the company to operate its remaining WM business under a new capital structure and estimate that Rexnord LLC will have S&P Global Ratings-adjusted debt leverage of close to its current levels of 2x–3x following the transaction. "We expect to resolve the CreditWatch negative placement when we have fully assessed the transaction's effects on the company's business, its financial position, and the likelihood that it will close as proposed (currently expected to close in the fourth quarter of calendar year 2021). Our review will focus on the remaining business' competitive position, including its scale and diversity, our expectations for its cash flow and leverage volatility through a cyclical downturn, as well as its post-transaction capital structure and financial policy. We expect to affirm or lower our ratings by one notch. If the transaction is not consummated, we would most likely affirm our existing ratings on Rexnord and remove them from CreditWatch." REYNOLDS CONSUMER: Moody's Completes Review, Retains Ba1 CFR ------------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Reynolds Consumer Products LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Reynolds' Ba1 CFR reflects its solid market position, strong brand name and mature product categories with stable demand. The company also has good operating performance, strong free cash flow and very good liquidity. These strengths are partially offset by the company's exposure to raw material prices, particularly aluminum and resin, which can be volatile. Additionally, the company has limited geographic diversity and high customer concentration. Reynolds' financial flexibility is constrained by the fully secured nature of its capital structure. The company's credit profile also takes into account positive social trends regarding convenience and negative impact from social trends in reducing waste from resin-derived products, as well as corporate governance factors relating to the company's majority ownership by a private investor. The rating further reflects Moody's expectation that the company's financial policy will be aggressive with large dividend payments. Reynolds will have moderately-high financial leverage (debt to EBITDA). That said, Moody's expects a reasonably conservative leverage target to guide the use of free cash flow such that debt-to-EBITDA leverage declines within the next 12 -18 months, reflecting both debt repayment and modest earnings growth. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. ROBERT F. TAMBONE: Hearing on $31K Sale of Boat Set for March 23 ---------------------------------------------------------------- Robert F. Tambone filed with the U.S. Bankruptcy Court for the District of Massachusetts a notice of his private sale of all of his right, title, and interest in a certain 2018 Boston Whaler 170 Montauk and related personal property ("Boat") to Scott Hohmann or his nominee for $31,000, subject to higher and better offers. A telephonic hearing on the Motion is set for March 23, 2021, at 10:45 a.m. (Telephone: (877) 336-1839, Access Code: 1378281#). The Objection Deadline is March 10, 2021. The Boat consists of a 2018 Boston Whaler Montauk 17, a 2018 Mercury Engine and a 2018 Gray Kara Utility Trailer. Included with the Boat are various items of personal property, listed as Exhibit A to the Agreement, with no meaningful value separate from the Boat, including anchors, chains, ropes, seats and cushions and a Garmin Echomap. The Debtor asks Court approval to convey the Boat to the Purchaser. He intends to sell the Boat free and clear of liens, claims, encumbrances and interests. The Boat is to be sold in "as is" and "where is" condition. Further, the Debtor is not making any representations or warranties whatsoever, either express or implied, with respect to the Boat. In accordance with the terms of the Sale Agreement, the Purchaser will pay to the Debtor on the closing date, which will be approximately two weeks following the entry of an order approving the sale, the Purchase Price for the Boat, in the amount of$31,000 be paid as follows: (i) $1,000 paid as a deposit; and (ii) $30,000 paid at the time of delivery of the title. There is a lien by Workers' Credit Union against the Boat and the trailer. Any contested liens, claims or encumbrances will attach to the proceeds of the sale of the Boat. The validity and enforceability of any contested lien will be determined by the Bankruptcy Court after due notice and hearing. Any and all counteroffers must be in an amount not less than $34,100. All counteroffers must be accompanied by a deposit equal to $3,410, made payable to the Debtor and delivered to the counsel to the Debtor by March 10, 2021. The Deposit will be forfeited to the estate if the highest bidder fails to complete the sale by the date ordered by the Court. The Debtor has requested that, if the sale is not completed by the highest bidder, the Court approves the sale of the Boat to the next highest bidder. A copy of the Agreement is available at https://tinyurl.com/5bdowqve from PacerMonitor.com free of charge. Robert F. Tambone sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-11378) on June 22, 2020. The Debtor tapped Kathleen Cruickshank, Esq. ROCKVILLE TAG: Seeks to Hire Richard B. Rosenblatt as Legal Counsel ------------------------------------------------------------------- Rockville Auto Tag & Title, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ the Law Offices of Richard B. Rosenblatt, PC., as its legal counsel. The firm's services will include advising the Debtor regarding its powers and duties under the Bankruptcy Code and preparing a Chapter 11 plan of reorganization and other legal papers. The firm will be paid at these rates: Richard B. Rosenblatt $350 per hour Linda M. Dorney $350 per hour Attorneys $295 per hour Paralegal $150 per hour Richard Rosenblatt, Esq., disclosed in court filings that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard B. Rosenblatt, Esq. Linda M. Dorney, Esq. The Law Offices of Richard B. Rosenblatt, P.C. 30 Courthouse Square, Suite 302 Rockville, MD 20850 Phone: (301) 838-0098 Email: rrosenblatt@rosenblattlaw.com About Rockville Auto Tag & Title Rockville, Md-based Rockville Auto Tag & Title, LLC is a private, MVA licensed company that issues Maryland auto tag and auto title registrations for all vehicles. Rockville Auto Tag & Title filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-10879) on Feb. 12, 2021. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. The Law Offices of Richard B. Rosenblatt is the Debtor's legal counsel. RODAN & FIELDS: Moody's Completes Review, Retains Caa2 CFR ---------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Rodan & Fields, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Rodan + Fields' Caa2 CFR reflects its narrow focus in skin care, high and increasing competition from larger and better capitalized competitors, and limited geographic diversity. Products are somewhat discretionary and vulnerable to consumer spending pullbacks and focused largely within the skin care segment. The company's credit profile is also vulnerable to the fundamental risks related to the direct selling business model, such as declines in enrollment of new independent sales consultants. Adding new distribution channels provides potential expansion opportunities for the company's products, but also the need to execute any such initiatives while maintaining the attractiveness of the current independent sales model. The company's credit profile is supported by its good brand name recognition in niche markets and moderate financial leverage prior to recent operating difficulties and the coronavirus outbreak. Moody's also view skin care as a more resilient subsector of the beauty category relative to other products such as cosmetics and fragrances. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. RTECH FABRICATIONS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Rtech Fabrications, LLC 520 W Dalton Avenue Coeur D Alene, ID 83815 Business Description: Rtech Fabrications, LLC -- https://www.rtechfabrications.com -- is a restoration shop specializing in 67-72 GM trucks. Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court District of Idaho Case No.: 21-20048 Judge: Hon. Noah G. Hillen Debtor's Counsel: Bruce A. Anderson, Esq. ELSAESSER ANDERSON, CHTD. 320 East Neider Avenue Suite 102 Coer D Alene, ID 83815 Tel: (208) 667-2900 Fax: (208) 667-2150 Email: brucea@eaidaho.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Randall T. Robertson, managing member. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/WY2GZWY/Rtech_Fabrications_LLC__idbke-21-20048__0001.0.pdf?mcid=tGE4TAMA RUBY TUESDAY: Plan Approved After Deal With Landlords ----------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that Ruby Tuesday's bankrupt parent won court approval of its Chapter 11 reorganization plan after resolving last-minute objections from its landlords over how the plan would affect their leases. The amended plan approved Feb. 17, 2021, transfers equity in the company to two of its secured lenders, units of TCW Group Inc. and Goldman Sachs Group Inc. TCW will assume a majority ownership stake in the restaurant business and will manage 210 Ruby Tuesday restaurants that will remain open. Goldman Sachs will get an indirect ownership interest in the RT Lodge, a restaurant and corporate event venue located on the campus of Maryville. About RTI Holding Company RTI Holding Company, LLC and its affiliates develop, operate, and franchise casual dining restaurants in the United States, Guam, and five foreign countries under the Ruby Tuesday brand. The company-owned and operated restaurants (i.e. non-franchise) are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest regions of the United States. On Oct. 7, 2020, RTI Holding Company and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12456). At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge John T. Dorsey oversees the cases. Pachulski Stang Ziehl & Jones LLP and CR3 Partners LLC serve as the Debtors' legal counsel and financial advisor respectively. Epiq Corporate Restructuring LLC is the claims, noticing and solicitation agent and administrative advisor. On Oct. 26, 2020, the U.S. Trustee for the District of Delaware appointed an official committee of unsecured creditors in the chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP and Cole Schotz P.C. as counsel and FTI Consulting, Inc. as financial advisor. S&S HOLDINGS: Moody's Assigns First Time B3 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service assigned first time ratings to S&S Holdings, LLC ("S&S", initially "Orange Merger Sub, LLC") including a B3 corporate family rating and a B3-PD probability of default rating. In addition, Moody's assigned a B2 rating to S&S' proposed $600 million first lien term loan and a Caa1 rating on the proposed $200 million second lien term loan. The outlook is stable. The proceeds will be used to complete the acquisition of S&S by Clayton, Dubilier & Rice. Moody's ratings and outlook are subject to receipt and review of final documentation. The B3 CFR assignment incorporates governance considerations given the company's private equity ownership and high pro forma leverage post-acquisition with debt/EBITDA greater than 7x for the LTM period ending November 30, 2020. Private equity owners tend to have aggressive financial strategies favoring high leverage with a higher potential for dividend recapitalizations and the pursuit of debt financed acquisitions. The rating also reflects the competitive nature of the apparel distribution industry which is also exposed to macroeconomic cycles and Moody's view of high supplier concentration. However, the rating is supported by the company's growing market position, geographic footprint in the United States and Canada and low customer concentration. Assignments: Issuer: S&S Holdings, LLC Probability of Default Rating, Assigned B3-PD Corporate Family Rating, Assigned B3 Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured 2nd Lien Term Loan, Assigned Caa1 (LGD5) Outlook Actions: Issuer: S&S Holdings, LLC Outlook, Assigned Stable RATINGS RATIONALE S&S' B3 CFR is constrained by its high pro forma leverage following the close of the transaction, high supplier concentration and the competitive nature of the apparel distribution industry. The rating is also constrained by the company's exposure to cyclicality in the industry and its private equity ownership which tend to have aggressive financial strategies. The rating is supported by S&S' strong and growing market position in a niche category, low customer concentration and broad geographic footprint in the United States and Canada which allows its product to reach the vast majority of the US in 1 to 2 business days. The rating is also supported by the company's good interest coverage and asset-lite business model. The company has significantly increased its sales since 2017 due to increased volumes as well as its acquisition of Techno Sport in January 2020 which expands its footprint to Canada. The company has also recently enhanced its margins with management implemented initiatives. S&S has also implemented strategies that allow for optimized inventory investment. The company expects to sustain the margin and working capital enhancements which should improve earnings and free cash flow. The stable outlook reflects the expectation of adequate liquidity and that S&S will deleverage through earnings growth as it benefits from sales growth and enhanced margins. S&S' adequate liquidity reflects its low cash balance and its proposed $225 million ABL revolving credit facility which is expected to be undrawn at close but will be utilized for working capital needs. Free cash flow in 2020 was positive after prior periods with negative free cash flow due to investments made in the business. 2020 free cash flow was also enhanced by lower than normal inventory levels at year end due to manufacturer supply constraints. 2021 cash flow is expected to be negative as the company builds its inventory back to normal levels. The majority of the inventory build will be funded by selling shareholders either prior to transaction close or at transaction close as stipulated in the transaction agreement. The free cash flow volatility is expected to be reduced going forward as management has implemented inventory efficiency initiatives which will result in a lower level of working capital investment. The credit facility contains a minimum fixed charge coverage ratio of 1x that is tested when the revolver availability is less than 10% of the line cap. The company is expected to remain in compliance with the covenant. The credit facilities are expected to contain covenant flexibility for transactions that could adversely affect creditors, including incremental first lien facility capacity up to the sum of (a) the greater of $130 million and 100% of pro forma consolidated adjusted EBITDA plus (b) 4.65x total first lien secured net leverage (for first lien secured debt); and incremental second lien facility capacity up to the sum of (a) the greater of $35 million and 25% of pro forma consolidated adjusted EBITDA, plus (b) 6.15x total secured net leverage. Alternatively, the ratio tests can all be satisfied so long as leverage does not increase on a pro forma basis if incurred in connection with a permitted acquisition or investment. An amount up to the greater of $65 million and 50% of pro forma EBITDA may be incurred with an earlier maturity than the existing debt. The credit facilities also include: provisions allowing the transfer of assets to unrestricted subsidiaries, with no additional "blocker" provisions restricting such transfers; the requirement that only wholly-owned subsidiaries act as subsidiary guarantors, raising the risk that guarantees may be released following a partial change in ownership; step downs for first lien loans in the asset sale prepayment requirement to 50% and 0% based on achieving reductions to the first lien net leverage ratio of 4.15x and 3.65x, respectively; and step downs for second lien loans in the asset sale prepayment requirement to 50% and 0% based on achieving reductions to the total secured net leverage ratio of 5.65x and 5.15x, respectively. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if S&S' liquidity, operating performance or vendor relationships deteriorate. Quantitatively, the ratings could be downgraded if debt/EBITDA is maintained above 6.5x or EBITA/interest expense declines below 1.25x. The ratings could be upgraded if revenues and earnings improve materially, resulting in solid positive free cash flow. Quantitatively, the ratings could be upgraded if the company maintains debt/EBITDA below 5.5x, and EBITA/interest expense above 2x. Headquartered in Bolingbrook, Illinois, S&S is a distributor of blank apparel from retail brands to imprintable apparel customers. Revenue for the LTM period ending September 30, 2020 was approximately $1.3 billion. Following the close of the transaction, Clayton, Dubilier & Rice will be the majority owner. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. S&S HOLDINGS: S&P Assigns B- Issuer Credit Rating, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to S&S Activewear (S&S), a Bolingbrook, Ill.-based distributor of imprintable apparel serving decorators and promotional product distributors, the borrower of the proposed debt. S&P also assigned its 'B-' issue-level and '3' recovery ratings to the proposed first-lien debt facilities and its 'CCC' issue-level rating and '6' recovery rating to the second-lien term loan. The stable outlook reflects S&P's expectation that, over the next 12 months, S&S will benefit from good operating performance as supported by volume growth, increased market share, and expansion of the brand portfolio leveraging its fulfillment expertise. This should allow the company to improve its S&P Global Ratings-adjusted debt to EBITDA to the 6x area in fiscal 2021, from the mid-8x expected pro forma for the transaction at fiscal year-end 2020. S&P's rating on S&S incorporates the following key risks and strengths. Key rating risks: -- High starting debt leverage (forecast at about the mid-8x area as of fiscal 2020), pro forma for the transaction and S&P's expectation that leverage will remain elevated over the next 12-18 months. -- Narrow business focus and high revenue concentration in the cyclical U.S. imprintable apparel industry, which is characterized by high price-competition and fragmentation. -- Risk of re-leveraging through a consolidation growth strategy and the potential for changing U.S. tariff policies or other input, commodity, and freight cost headwinds. -- Threat of disintermediation from industry participants remains a tail risk. Key strengths include: -- A strong market position within the U.S. imprintable apparel sub-sector that enables the company to meet unique customer stock-keeping unit (SKU) specifications. -- Well-established sourcing model and distribution footprint that is positioned for growth leveraging its proprietary information technology (IT) infrastructure. -- Long-tenured customer relationships with recurring demand patterns; and -- Good free operating cash flow (FOCF) generation forecast at about $30 million-$40 million over the next 12 months despite intra-year working capital needs, which can be up to about $20 million-$25 million, related to potential inventory builds. S&P said, "Our rating reflects our view that S&S Activewear will maintain S&P Global Ratings-adjusted debt leverage well above 5x over the next 12 months. Given the fragmented nature of the market, sticky customer relationships, and distribution network, industry consolidation is an attractive path for S&S to scale its platform and earnings, though acquisitions have the potential to delay the company's deleveraging trajectory. S&S has increased its scale over the past few years by strategically acquiring entities to develop its distribution network across the U.S., with the most recent acquisition in 2020 providing access to the Canadian market. The company's historical investments in its infrastructure offers the capability to handle much greater volume, thereby further increasing the benefits of a consolidating growth strategy. Due to the uncertainty of the timing and size of acquisitions, we do not incorporate any into our base case forecast. We expect S&P Global Ratings-adjusted debt to EBITDA to be in the 6x area, with free operating cash flow (FOCF) to debt in the mid-single-digit area for fiscal 2021. "We expect S&S will maintain stable operating performance as it leverages its IT infrastructure to scale the business. The company has a relatively small scale and narrow service offering within the imprintable apparel industry, which is characterized by low barriers to entry. The market is highly fragmented, mostly comprising of smaller, regional firms that highlight the competitive industry dynamics. However, the company does compete with large service providers such as SanMar and Alphabroder, and we expect competition to increase as the industry consolidates." While S&S has grown from a small regional apparel distributor only serving the U.S. Midwest to one of the three largest U.S. providers in the about $9 billion imprintable apparel industry, about 80% of total sales are concentrated in the t-shirt and fleece categories. However, the company does benefit from limited fashion risk as the inventory has a low risk of obsolescence with products that are not customized or decorated. S&S's vast product line (more than 80,000 SKUs) from over 100 brand manufacturers, along with a diversified customer base with the top 10 customers accounting for less than 15% of sales for the last 12 months ended Nov. 30, 2020, along with its brand equity displayed by its high net promoter score (NPS) compared with its peers, partially offset the niche focus of the business. Despite the commoditized nature of the products, the company successfully expanded gross margins in 2020, leveraging its ability to offer a faster turnaround time on order fulfillment. S&S offers 1-2 day shipping nationwide--a notable factor in the customer's decision-making process as its clients do not hold any inventory and rely on industry participants like S&S as sourcing partners. The company's logistics capabilities, including inventory optimization using real-time sales, forecasting supply and demand by product and channel, and facility automation to enhance efficiency should further drive margin expansion as the business scales. S&P expects S&P Adjusted EBITDA margins to expand to the high-single-digit area, partially attributed to low double-digit revenue growth in 2021 as it laps a slower fiscal 2020, affected by the COVID-19 pandemic on both the sales and supply side in the second quarter. Despite the softening in the second quarter of fiscal 2020, sales rebounded in the third and fourth quarter, with revenue growth for fiscal 2020 expected to be in the low double-digit area, partially offset by the softer sales rebound from S&S's Canadian subsidiary Technosport (acquired in 2020). The industry's exposure to cyclical changes in the economy, along with a threat of disintermediation, are key risks. S&P said, "We view the imprintable apparel industry as cyclical because nearly 65% of the end-user demand is attributable to corporate discretionary spending. In periods of uncertainty, or economic declines, marketing spending is often one of the first expense categories that is curtailed. Although a meaningful amount of the end-user demand is attributable to individual customers--a growing segment that is catered by e-decorators and e-retailers, spurred by the recent e-commerce trends--we believe that macroeconomic factors such as high unemployment and inflation can affect demand prospects. In the last recession, sales declined by the low single digits, albeit S&S was a much smaller business with limited distribution capabilities." Partially offsetting this factor is the size of the business, which insulates it from periods of lower demand compared with smaller regional participants. S&S's role in the value chain has been cemented over the past few years, largely due to the limited ability of manufacturers to efficiently pick up small orders and offer delivery on a cost-effective basis. Despite a direct to consumer model being attractive from a margin perspective compared with the wholesale distribution model, this would require a structural shift by certain manufacturers (for example Columbia and Adidas--S&S suppliers) to present a meaningful risk to S&S. However, larger distributors or decorators--S&S' current customer base--could integrate backwards and hold inventory in certain situations depending on the order size and expected margin. The likes of Amazon--while not currently engaging in the aforementioned initiative, could very well do so given its distribution capabilities. That being said, S&P sees the threat of disintermediation from well-capitalized players, a tail risk to the industry. S&P said, "The stable outlook reflects our expectation that, over the next 12 months, S&S will benefit from good operating performance as supported by volume growth, increased market share, and expansion of the brand portfolio leveraging its fulfillment expertise. This should allow the company to improve its S&P Global Ratings-adjusted debt to EBITDA to the 6x area in fiscal 2021, down from about the mid-8x area expected pro forma for the transaction at fiscal year-end 2020. "Although unlikely, over the next 12 months, we could lower our rating if operating performance declined such that operating cash flow turned negative and its liquidity position weakened. We estimate this could occur if the macroeconomic environment worsened or the company experienced increased competition or logistical issues in the fulfillment of orders. In addition, we could lower our rating if we deemed the capital structure to be unsustainable. "More likely, over the next year, we could raise our ratings if the company were to apply excess cash flow toward debt reduction such that adjusted debt to EBITA declined and remained below 6x, along with an FOCF-to-debt ratio in the mid- to high-single digits on a sustained basis. An upgrade would also be contingent on our belief that the financial sponsor would maintain a conservative financial policy, allowing the company to maintain leverage at these levels with minimal risk of releveraging. We could also raise our ratings if the company were to build scale and improve diversity and barriers to entry to an extent material enough to result in a better business risk profile." SANUWAVE HEALTH: Accounting Error Found in Form 10-Q Report ----------------------------------------------------------- The audit committee of the board of directors was made aware of and with management of SANUWAVE Health, Inc., concluded that the Company's previously issued unaudited condensed consolidated financial statements for the quarter ended Sept. 30, 2020, should no longer be relied upon because of an error in the Company's accounting relating to the Company's warrant derivative liability for such quarter. In the Company's Form 10-Q for the quarter ended Sept. 30, 2020, the Company reported a total non-current warrant derivative liability amount of approximately $2.8 million. As a result of the accounting error, the Company underreported the amount of such liability, and the Company will file its Form 10-Q to correct the total non-current warrant derivative liability amount for such quarter and to establish a current warrant derivative liability amount for such quarter. The Company is in the process of analyzing and quantifying the adjustments that will be reflected in such Form 10-Q/A. The error relates to the determination of the number of shares of common stock subject to a warrant issued by the Company in June 2020 as previously reported by the Company, which warrant contains certain anti-dilution adjustment provisions with respect to subsequent issuances of securities by the Company at a price below the exercise price of such warrant In the Company's Form 10-Q for the quarter ended Sept. 30, 2020, the Company's financial statements reflected that the number of shares underlying such warrant was 1.75 million shares and the exercise price of such warrant was $0.20 per share, but as a result of certain dilutive issuances during the third quarter of 2020, the Company's financial statements should have reflected that the number of shares underlying such warrant was 35 million shares and the exercise price of such warrant was $0.01 per share as of quarter ended Sept. 30, 2020. The accounting error is non-cash and does not impact the Company's revenue, operating expenses, operating income, cash flows or cash and cash equivalents as previously reported. The audit committee of the board of directors and management of the Company have discussed the foregoing matter with the Company's independent registered public accounting firm, Marcum LLP. The Company will file a Form 10-Q/A for the quarter ended Sept. 30, 2020 to correct the error in the financial statements as soon as practicable. The Company's management, the Audit Committee and the full Board of Directors intend to review the effectiveness of the Company's internal controls over financial reporting and its disclosure controls and procedures in the course of completing the restatement process. The Company will amend any disclosures pertaining to its evaluation of such controls and procedures as appropriate in connection with future filings. About SANUWAVE Health Headquartered in Suwanee, Georgia, SANUWAVE Health, Inc. (OTCQB:SNWV) -- http://www.SANUWAVE.com-- is a shockwave technology company initially focused on the development and commercialization of patented noninvasive, biological response activating devices for the repair and regeneration of skin, musculoskeletal tissue and vascular structures. SANUWAVE's portfolio of regenerative medicine products and product candidates activate biologic signaling and angiogenic responses, producing new vascularization and microcirculatory improvement, which helps restore the body's normal healing processes and regeneration. SANUWAVE applies its patented PACE technology in wound healing, orthopedic/spine, plastic/cosmetic and cardiac conditions. Its lead product candidate for the global wound care market, dermaPACE, is US FDA cleared for the treatment of Diabetic Foot Ulcers. The device is also CE Marked throughout Europe and has device license approval for the treatment of the skin and subcutaneous soft tissue in Canada, South Korea, Australia and New Zealand. SANUWAVE researches, designs, manufactures, markets and services its products worldwide, and believes it has demonstrated that its technology is safe and effective in stimulating healing in chronic conditions of the foot (plantar fasciitis) and the elbow (lateral epicondylitis) through its U.S. Class III PMA approved OssaTron device, as well as stimulating bone and chronic tendonitis regeneration in the musculoskeletal environment through the utilization of its OssaTron, Evotron and orthoPACE devices in Europe, Asia and Asia/Pacific. In addition, there are license/partnership opportunities for SANUWAVE's shockwave technology for non-medical uses, including energy, water, food and industrial markets. SANUWAVE reported a net loss of $10.43 million for the year ended Dec. 31, 2019, compared to a net loss of $11.63 million for the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $32.87 million in total assets, $33.74 million in total liabilities, and a total stockholders' deficit of $873,002. Marcum LLP, in New York, NY, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SHREE MADHAV: Selling Laundry Business to Pennington for $325K -------------------------------------------------------------- Shree Madhav Laundry, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey to authorize the sale of its laundromat business located at 359 Pennington Avenue, in Trenton, New Jersey, to Pennington Laundry Depot, LLC, for $325,000, under the terms of the Agreement of Purchase and Sale dated Feb. 12, 2021. A hearing on the Motion is set for March 11, 2021, at 10:00 a.m. The sale will be free and clear of all liens, claims and encumbrances, with valid liens to attach to proceeds of sale. A copy of the Agreement is available at https://tinyurl.com/1b63zb3x from PacerMonitor.com free of charge. About Shree Madhav Laundry Shree Madhav Laundry, LLC, is a laundromat with a primary business address of 359 Pennington Avenue, Trenton, New Jersey. Shree Madhav Laundry, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 20-20449) on Sept. 10, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by The Kelly Firm, P.C. SIMMONS FOODS: Moody's Affirms B2 CFR & Rates New $750M Notes B3 ---------------------------------------------------------------- Moody's Investors Service, Inc. affirmed the ratings of Simmons Foods, Inc., including the B2 Corporate Family Rating, B2-PD Probability of Default Rating, B1 secured first-lien debt and B3 secured second-lien debt ratings. Moody's also assigned a B3 rating to Simmons' new $750 million 8-year second-lien notes being offered. Finally, Moody's revised the outlook to stable from negative. The proposed $750 million notes due 2029 will be used to partially fund the redemption of the company's $250 million 7.75% first-lien notes due January 2024 and $550 million 5.75% second-lien notes due November 2024. The remaining amount of the refinancing, including a $25 million call premium and other transaction fees, will be funded through borrowing $88 million under an upsized, previously undrawn ABL revolving credit facility. As part of the transaction, the ABL facility is being increased in size from $195 million to $350 million and the tenor is being extended by three years from a 2023 to a 2026 maturity. Separately, the company will draw an additional $25 million under the ABL facility to fund a dividend, resulting in ABL loans totaling $113 million at closing. Notwithstanding the resulting approximate $60 million increase in debt, the proposed transactions are a credit positive overall because they will reduce the company's annual cash interest costs, increase external sources of liquidity and materially extend debt maturities. The outlook revision to stable from negative reflects, in part, the successful completion last year of the two-year construction and startup of the company's $225 million poultry processing facility in Benton County, Arkansas that replaced a near-by aging facility. The new plant, along with other capital projects, caused debt/EBITDA (based on Moody's analytic adjustments) to rise as high as 6.5x in 2018 and resulted in negative free cash flow for two years. Simmons has since reduced debt/EBITDA to approximately 4.5x at the end of 2020 and should be able to make further improvement in 2021. However, Moody's expects that free cash flow will be negligible at best over the next few years as the company is likely to reinvest all of its operating cash flow, internally and externally, to fund growth investments. The stable outlook also reflects the solid growth and increasing earnings stability contributed in recent years by Simmons' pet food operations, which currently represent 47% of sales and 66% of EBITDA. Over the past year, stronger performance in pet food has mostly offset weakness in the poultry business that has suffered due to coronavirus-related disruptions and shutdowns. Moody's expects that these two core segments, which have partially integrated supply chains, will continue to provide complementary diversification benefits, including enhanced earnings stability. Moody's took the following rating actions on Simmons Foods, Inc.: New Assignments: Issuer: Simmons Foods, Inc. Senior Secured 2nd Lien Notes, Assigned B3 (LGD4) Ratings Affirmed: Issuer: Simmons Foods, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured 1st Lien Notes, Affirmed B1 (LGD3) Senior Secured 2nd Lien Notes, Affirmed B3 (LGD5) Outlook Actions: Issuer: Simmons Foods, Inc. Outlook, Changed To Stable From Negative Simmons' liquidity is good. As of the end of fiscal 2020, Simmons' had near-full availability under its $195 million ABL revolver and Moody's expects that the company will have at least $210 million of availability under the proposed upsized ABL over the next 15 months. The B3 rating on the proposed $750 million senior secured second-lien notes is one notch below the B2 Corporate Family Rating. This reflects the lien subordination of these instruments to collateral pledged to the company's proposed $350 million senior secured ABL revolving credit facility. RATINGS RATIONALE Simmons' B2 Corporate Family Rating reflects the high (>50%) sales concentration in the earnings volatile poultry processing sector, high financial leverage and a recent history of negative free cash flow due to heavy capital spending. Moody's believes that the company has flexibility to pull back on capital spending and to generate positive free cash if needed to support liquidity, but that the preference is reinvestment to bolster growth and enhance profitability. The rating is supported by Simmons' good liquidity and the increasingly effective natural hedge provided by its integrated pet food and chicken processing operations. Simmons' exposure to environment risk is moderate. Moody's consider environmental risk to be material to the overall credit profile of companies within the protein sector. Moody's incorporate risks of direct environmental hazards — the impacts of pollution, water shortages, climate change and natural or human-caused disasters -- and Moody's may consider such aspects as liability, clean-up costs, capital costs, and carbon regulations to prevent or remediate these risks. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Simmons is moderately exposed to social risk. Rising consumer concerns about health and wellness, animal welfare, sustainable farming practices, and labor conditions can cause demand shifts in protein categories, which are also prone to episodes of product contamination and animal disease. Simmons' governance profile is relatively weak, characterized by concentrated ownership and executive control by the Simmons family, sustained high financial leverage, and a mixed track record of meeting company forecasts. Unfavorable variances against plans reflect inherent sector volatility that the company has not consistently anticipated, a mixed track record in implementing large-scale capital projects, and an aggressive growth strategy that partly relies on speculative investments. Positively, Moody's believe that the Simmons family is committed to protecting and sustainably growing its highly valued enterprise and significant generational wealth, which is largely in line with creditors' interests. In addition, cash distributions are generally limited to tax related shareholder needs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Simmons' ratings could be lowered if overall operating performance deteriorates significantly or if future major capital projects and acquisitions fail to translate into commensurately stronger earnings and operating cash flow. Quantitatively, if debt/EBITDA is likely to be sustained above 4.5x, or the company's liquidity deteriorates, the ratings could be downgraded. Simmons' ratings could be upgraded if the company is able to establish a track record of stable operating performance and positive free cash flow. Additionally, debt/EBITDA would have to approach 3.0x before Moody's would consider a rating upgrade. The principal methodology used in these ratings was Protein and Agriculture published in May 2019. Simmons Foods, Inc. and affiliates, headquartered in Siloam Springs, Arkansas, is a vertically integrated poultry processor, and the largest private label manufacturer of canned pet food in North America. The company generates sales through three primary business groups: Poultry (53% before eliminations); Pet Food (38%); and Animal Nutrition (9%). The company is principally owned and controlled by members of the Simmons family. Net sales reported for fiscal year 2020 totaled approximately $2 billion. SIMMONS FOODS: S&P Rates Proposed $750MM Second-Lien Notes 'B' -------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level and '4' recovery ratings to the proposed $750 million senior secured second-lien notes maturing 2029 to be issued by Simmons Foods Inc., Simmons Prepared Foods Inc., Simmons Pet Food Inc.,Simmons Feed Ingredients Inc. and Simmons Foods intends to upsize its asset-based lending revolving credit facility (ABL revolver) to $350 million from $195 million (maturing in 2026; not rated). The proposed second-lien notes, combined with $113 million of borrowings on its proposed upsized ABL revolver, will redeem the company's existing 7.750% senior secured notes due 2024 and 5.750% second-lien senior secured notes due 2024, pay a $25 million distribution to shareholders, and pay other transaction-related expenses. S&P estimates pro forma leverage for this transaction will be near 5x (including its adjustments for operating leases). S&P's 'B' issuer credit rating and stable outlook on Simmons Foods are unchanged. Issue Ratings--Recovery Analysis Key analytical factors S&P said, "We are revising our recovery analysis to include the company's proposed debt issuances. We are increasing our enterprise valuation, given the company's successful integration of previously acquired businesses and the completion of growth-oriented capital expenditure (capex) programs. Our analysis also reflects the favorable demand outlook in the company's pet segment. This more favorable business outlook is underpinned by the significant increase in the U.S. pet population, which we believe will lead to a permanent increase in the addressable market." The debt capital structure consists of: -- $350 million ABL revolver due 2026 (not rated); and -- $750 million proposed second-lien term loan due 2029. Simulated default assumptions Simmons Foods is organized in Siloam Springs, Ark., and substantially all of its obligations, assets, and operations are located in the U.S. In the event of a payment default, we believe the company would file for bankruptcy protection under the administration of the U.S. bankruptcy court system, while entities abroad, if any, would remain out of any insolvency proceedings with respect to local jurisdictions. S&P said, "We believe creditors would receive maximum recovery in a payment default scenario if the company reorganized instead of liquidated. This is because of the company's position as the sixth-largest private-label pet food producer in North America. Therefore, in evaluating the recovery prospects for debtholders, we assume the company continues as a going concern. We arrive at our emergence enterprise value by applying a 5.5x multiple to our assumed emergence EBITDA. "Our simulated default scenario assumes a payment default in the second half of 2024 as the result of a steep decline in operating performance because of a combination of very high feed costs, excess poultry supplies, and a significant manufacturing disruption. The company may have to fund cash flow shortfalls with available cash. Under such a scenario, its EBITDA would decline such that the company could not meet its maintenance capex and debt service obligations, leading to a payment default and bankruptcy filing. "As such, we have valued the company based on an enterprise value to derive recovery and applied an assumed distressed emergence EBITDA of $111 million against a 5.5x multiple to estimate a gross recovery value of $610.7 million. To determine net recovery value available for distribution to creditors, we reduced our estimate of gross recovery value by 5% to account for estimated bankruptcy administrative expenses. This results in net recovery value of about $580 million that is available for distribution to the ABL revolver and then to the senior secured second-lien notes." Calculation of EBITDA at emergence: -- Debt service: $58.9 million (default-year interest) -- Maintenance capex: $37.3 million -- Default EBITDA proxy: $96.1 million -- Cyclicality adjustment/operational adjustment: 10%/5% -- Emergence EBITDA: $111 million Simplified waterfall -- Emergence EBITDA: $111 million -- Multiple: 5.5x -- Net enterprise value (after 5% administrative costs): $580.1 million -- Obligor/nonobligor valuation split: 95%/5% -- Collateral value available to secured debt claims: $570 million -- Priority debt claims: $218 million -- Collateral value available to senior secured second-lien debt claims: $352.1 million --Second-lien recovery: 30%-50%; rounded estimate: 45% SINALOENCE FOOD: Seeks to Hire Michael Jay Berger as Counsel ------------------------------------------------------------ Sinaloence Food Products & Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire the Law Offices of Michael Jay Berger as its legal counsel. The firm will render these legal services: (a) communicate with creditors of the Debtor; (b) review the Debtor's bankruptcy schedules; (c) advise the Debtor of its legal rights and obligations in a bankruptcy proceeding; (d) work to bring the Debtor into full compliance with reporting requirements of the Office of the United States Trustee; (e) prepare status reports as required by the court; and (f) respond to any motions filed in the Debtor's bankruptcy proceeding. The firm will be paid at these rates: Michael Jay Berger $595 per hour Sofya Davtyan $495 per hour Mark Domeyer $495 per hour Debra Reed $435 per hour Carolyn M. Afari $435 per hour Samuel Boyamian $350 per hour Senior Paralegals and Law Clerks $225 per hour Bankruptcy Paralegals $200 per hour In addition, the firm will seek reimbursement for its expenses. The retainer fee is $18,000. Michael Jay Berger, 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: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Blvd., 6th Floor Beverly Hills, CA 90212-2929 Telephone: (310) 271-6223 Facsimile: (310) 271-9805 Email: michael.bergerbankruptcypower.com About Sinaloence Food Products & Services Sinaloence Food Products & Services, Inc. is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). Sinaloence Food Products & Services filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-10255) on Jan. 14, 2021. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Judge Sheri Bluebond oversees the case. Joanne P. Sanchez, Esq., at JD Law, serves as the Debtor's legal counsel. SOUND HOUSING: Case Summary & 18 Unsecured Creditors ---------------------------------------------------- Debtor: Sound Housing LLC 520 10th Ave Kirkland, WA 98033 Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court Western District of Washington Case No.: 21-10341 Judge: Hon. Marc Barreca Debtor's Counsel: Jacob D DeGraaff, Esq. HENRY & DEGRAAFF, P.S. 787 Maynard Ave S Seattle, WA 98104 Tel: (206) 330-0595 E-mail: jacobd@hdm-legal.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Tatiana Gershanovich, managing member. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EQPUDLI/Sound_Housing_LLC__wawbke-21-10341__0001.0.pdf?mcid=tGE4TAMA SOUTHLAND ROYALTY: $251.7M Sale to Wamsutter to Fund Plan --------------------------------------------------------- Southland Royalty Company LLC filed with the U.S. Bankruptcy Court for the District of Delaware a Chapter 11 Plan of Reorganization and a corresponding Disclosure Statement on Feb. 16, 2021. The Debtor's Restructuring Committee has approved the Plan and believes it is in the best interests of the Debtor's estate. As such, the Debtor recommends that all holders of claims entitled to vote accept the Plan by returning their ballots no later than April 26, 2021, at 4:00 p.m. Assuming the requisite acceptances to the Plan are obtained, the Debtor will seek the Court's approval of the Plan at the confirmation hearing on May 12, 2021, at 10:00 a.m. If consummated, the Plan provides for the Debtor to sell substantially all of its assets to Wamsutter E&P, LLC (the "Purchaser") in exchange for approximately $251.7 million in aggregate consideration, comprised of (a) a cash purchase price of approximately $148.0 million, subject to certain adjustments described in the Purchase Agreement, (b) assumption by the Purchaser of certain liabilities associated with plugging and abandonment with an estimated PV10 value of approximately $102.4 million, and (c) payment of any third party cure costs for those agreements the Purchaser elects to have assumed and assigned to it, anticipated to be approximately $1.3 million, all as set forth in the Purchase and Sale Agreement between the Debtor and the Purchaser and related documents. Approximately $48 million of the cash purchase price will be applied to pay Cure Costs arising from the assumption of certain midstream agreements with affiliates of the Purchaser. The net cash proceeds of the Sale Transaction will be used to fund distributions under the Plan. The primary objective of the Plan is to maximize the value of recoveries to all Holders of Allowed Claims and to distribute all property of the Debtor's Estate that is or becomes available for distribution, in accordance with the priorities established by the Bankruptcy Code and applicable law. Generally speaking, the Plan provides for: * consummation of the Sale Transaction; * the full and final resolution of all pre- and post-petition funded debt obligations of the Debtor; * estimation of the total potential amount of secured M&M Claims; * full payment to Holders of Allowed General Administrative Claims, Priority Tax Claims, DIP Facility Claims, Professional Fee Claims, Other Priority Claims and Other Secured Claims; * distribution to Holders of General Unsecured Claims of the GUC Guaranteed Distribution Amount, 16% of the Sage Grouse Lease Proceeds, and 100% of Proceeds of Retained Causes of Action; * implementation of the RBL Plan Settlement pursuant to which the Holders of Prepetition RBL Claims are agreeing to waive certain claims resulting from the diminution in value of collateral, and subordinate the Prepetition RBL Deficiency Claim to the GUC Guaranteed Distribution Amount and GUC Sage Grouse Proceeds in order to resolve and settle any and all challenges to the Prepetition RBL Claims and related liens, including those asserted in the Committee Lien Avoidance Complaint; * a Liquidating Trust to hold and liquidate certain assets for the benefit of creditors; and * a Wind-Down Amount and designation of a Plan Administrator to wind down the Debtor's business and affairs; pay and reconcile Claims as provided in the Plan; and administer the Plan and the Reorganized Debtor, including certain assets vesting in the Reorganized Debtor to be liquidated for the benefit of creditors, in an effective and efficient manner. The Plan still has blanks as to the projected percentage recovery for holders of Class 3 Prepetition RBL Secured Claims totaling $485.3 million and Class 4 General Unsecured Claims totaling $77 million. The Plan provides for the Sale Transaction, the liquidation of all assets thereafter remaining, and the distribution of the proceeds of the foregoing to the Holders of Allowed Claims. A full-text copy of the Disclosure Statement dated Feb. 16, 2021, is available at https://bit.ly/3s6LnfK from PacerMonitor.com at no charge. Counsel to the Debtor: M. Blake Cleary Sean M. Beach Elizabeth S. Justison S. Alexander Faris Rodney Square 1000 North King Street Wilmington, DE 19801 Phone: (302) 571-6600 Fax: (302) 571-1253 E-mail: mbcleary@ycst.com sbeach@ycst.com afaris@ycst.com ejustison@ycst.com - and – C. Luckey McDowell Ian E. Roberts 2828 N. Harwood Street, Suite 1800 Dallas, TX 75201 Phone: (214) 271-5777 E-mail: luckey.mcdowell@shearman.com ian.roberts@shearman.com - and – Sara Coelho Jonathan M. Dunworth 599 Lexington Avenue New York, NY 10022 Phone: (212) 848-4000 Email: sara.coelho@shearman.com jonathan.dunworth@shearman.com About Southland Royalty Southland Royalty Company LLC -- http://www.southlandroyaltyco.com/ -- is a privately held independent exploration and production company engaged in the acquisition and development of hydrocarbons. Headquartered in Fort Worth, Southland Royalty Company conducts its business across four states, with the majority of operations in Wyoming and New Mexico. Southland Royalty Company was formed principally to produce and extract hydrocarbons in the Wamsutter field of the Green River Basin and in the San Juan Basin. Southland Royalty Company sought Chapter 11 protection (Bankr. D. Del. Case No. 20-10158) on Jan. 27, 2020. In the petition signed by CRO Frank A. Pometti, the Debtor was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. The Debtor tapped Shearman & Sterling LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as Delaware counsel; AP Services, LLC as interim management services provider; PJT Partners Inc. as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. SPANISH HEIGHTS: Seeks to Hire Maier Gutierrez as Special Counsel ----------------------------------------------------------------- Spanish Heights Acquisition Company, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Maier Gutierrez & Associates as its special counsel. The firm's services include: a. representing the Debtor in the state court litigation entitled Spanish Heights Acquisition Company, LLC et al. v. CBC Partners I, LLC, et al. (Case No. A-20-813439-B); b. representing the Debtor in other potential litigation matters; c. advising the Debtor in connection with the investigation of potential causes of action and the litigation thereof; d. representing the Debtor in any appropriate proceeding or hearing; e. conducting examinations of witnesses, claimants or adverse parties and assisting in the preparation of pleadings, motions and orders; f. representing the Debtor in the formulation of a plan of reorganization and disclosure statement; and g. other legal services. The firm will be paid on an hourly basis at its standard rates. As disclosed in court filings, Maier Gutierrez neither holds nor represents any interest adverse to the Debtor and its estate. The firm can be reached through: Joseph Gutierrez, Esq. Maier Gutierrez & Associates 8816 Spanish Ridge Ave. Las Vegas, NV 89148 Phone: +1 702-629-7900 About Spanish Heights Acquisition Company Spanish Heights Acquisition Company, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 21-10501) on Feb. 3, 2021. Jay Bloom, manager and owner of SJC Ventures Holdings, LLC, signed the petition. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of less than $50,000. Greene Infuso, LLP and Maier Gutierrez & Associates serve as the Debtor's bankruptcy counsel and special counsel, respectively. SPECTRUM BRANDS: Fitch Assigns BB Rating on $400MM Unsecured Notes ------------------------------------------------------------------ Fitch Ratings has assigned a 'BBB-'/'RR1' rating to Spectrum Brands, Inc.'s proposed $350 million of secured term loans due February 2028 and has assigned a 'BB'/'RR4' rating to its unsecured notes offering, which Fitch expects to be around $400 million. Proceeds from the term loan and notes issuances will be used to repay the company's $250 million of unsecured notes due December 2024 and $500 million of its $1 billion in unsecured notes due July 2025. As such, Fitch expects the transaction to be leverage-neutral. Fitch has also affirmed Spectrum's existing ratings, including the Long-Term Issuer Default Rating (IDR) of 'BB' for both Spectrum and SB/RH Holdings, LLC. The Rating Outlook is Stable. Spectrum's 'BB' rating reflects the company's diversified portfolio across products and categories with well-known brands, and commitment to maintaining leverage (net debt/EBITDA) between 3.0x and 4.0x, which equates to a similar gross debt/EBITDA target assuming $100 million-$150 million in cash longer term, compared with approximately $225 million as of Jan. 3, 2021. The rating also reflects expectations for modest organic revenue growth over the long term, reasonable profitability with EBITDA margins near 15% and positive FCF. These positive factors are offset by recent profit margin pressures across segments and the company's acquisitive posture, which could cause temporary leverage spikes following a transaction. KEY RATING DRIVERS Proposed Refinancing: Spectrum is proposing a leverage-neutral refinancing transaction to extend some of its near-term maturities. The company plans to issue $350 million in secured term loans due February 2028 in addition to unsecured notes, which Fitch estimates could be around $400 million. Proceeds will be used to repay the company's $250 million in unsecured notes due December 2024 and $500 million of its $1 billion in unsecured notes due July 2025. The proposed term loan would be pari passu to the company's existing $600 million cash flow revolver. Together they comprise Spectrum's secured debt; the company's remaining debt consists of unsecured notes. Fitch considers the transaction positively given the opportunity to extend maturities with some potential benefit to annual cash interest expense, depending on final rates. If Spectrum successfully completes this transaction, its next maturity would be the revolver due June 2025 and the remainder of the current $1 billion of unsecured notes due July 2025. This assumes the maturity of the new notes would be 2026 or later. Diverse Portfolio, Good Brands: Spectrum has a diverse portfolio across product categories, retail channels and geographies, which benefits the company as it navigates global and local economic cycles and retail market share shifts. Following recent asset sales of Spectrum's batteries and auto care businesses, Spectrum's largest division is hardware and home improvement, which contributed approximately one-third of fiscal 2020 (ended September 2020) revenue and approximately 40% of segment EBITDA. The division focuses on residential security (i.e. locks and keys) as well as other hardware and plumbing verticals, with well-known brands including Kwikset, Baldwin and Pfister. Spectrum's home and personal care division contributes approximately 30% of revenue and approximately 15% of segment EBITDA, and includes leading brands such as George Foreman (grilling), Remington (shaving and hair appliances) and Russell Hobbs (small kitchen electrics). Spectrum's pet care business, largely consisting of nutrition brands like Tetra and Dreambone, as well as grooming and odor businesses, contributes approximately one-quarter of sales and segment EBITDA. The company's home and garden business, which largely focuses on insect control and bug repellant through brands like Spectracide and Hot Shot, provides approximately 15% of revenue and nearly 20% of segment EBITDA. Fitch recognizes that Spectrum's 2018/2019 sales of its batteries and auto care businesses to Energizer Holdings, Inc. for approximately $3.25 billion in cash and stock (10.0x EBITDA) somewhat reduce the company's overall product category diversity. However, the portfolio provides reasonable operating diversity if any given product category or brand sustains some weakness. The diversification is supported by lack of significant cyclical volatility, other than some parts of the hardware and home-improvement business, across much, albeit not all, of Spectrum's revenue base. Retail exposure is appropriately diverse, including exposure to key market share leaders in segments such as general merchandise/discount, home improvement and e-commerce. Spectrum should be well positioned to maintain share and consumer connections despite competitive shifts within the retail industry, given its broad exposure and relationships with retailers like Walmart, Inc.; Target Corporation; The Home Depot, Inc.; and Amazon.com, Inc., which are all expected to grow share longer term. From a geographic standpoint, three-quarters of the company's revenue is generated from North America, but Spectrum has some diversity with exposure to EMEA (17% of sales) and Latin America (5% of sales). Spectrum's portfolio also benefits from a number of strong brands and market positions. The company holds leading market shares in U.S. residential security, aquatics, pet chews and grooming, insect control and repellents, and strong positions across a number of kitchen and personal appliance categories. Supply Chain Headwinds Abating: Spectrum appears to have resolved pandemic-related supply chain constraints from temporary closures of manufacturing facilities in countries such as China, the Philippines, Mexico and the U.S. These challenges caused 4% revenue and 7% EBITDA declines in the company's June 2020 quarter. Spectrum's operating trajectory meaningfully improved in the second half of the calendar year, as the company has been able to capitalize on its portfolio's exposure to shelter-in-place consumption activity via product categories such as kitchen electrics and personal grooming. Revenue was up 17% and 31% in the September and December quarters, respectively. EBITDA in the September quarter was essentially flat to the prior year at around $168 million, given accelerated selling, general and administrative investments, and the timing impact of a compensation program change. EBITDA in the December 2020 quarter (Spectrum's first fiscal quarter of 2021) more than doubled to approximately $200 million from $92 million the prior year. Given a strong start to Spectrum's fiscal 2021 (ending September 2021), Fitch projects revenue growth for the full year around 4% to $4.1 billion from $4.0 billion in fiscal 2020, with EBITDA up 6% to around $590 million from $555 million in fiscal 2020. Fitch recognizes that revenue growth could turn somewhat negative by the end of fiscal 2021, given the difficult comparisons and expectations of some unwinding of pandemic-related consumer behavior. Organic revenue and EBITDA growth could be in the 1%-2% range beginning in fiscal 2022, although Spectrum will face difficult comparisons early in fiscal 2022 that could lead to near-flat or modestly negative growth in fiscal 2022. Fitch expects EBITDA margins to trend around 14.3% beginning in fiscal 2021 versus 14.0% in fiscal 2020, which was somewhat pressured by temporary supply chain headwinds. Commitment to Financial Policy: Spectrum's publicly articulated net leverage target is 3.0x-4.0x (updated from 3.5x-4.0x in November 2020) over the long term, which equates to a similar gross debt/EBITDA target, assuming $100 million-$150 million in cash on hand. The company historically executed debt-financed acquisitions and subsequently used internally generated cash flow to reduce debt, in concert with its leverage targets. However, acquisitions have been somewhat limited in recent years, with the most recent material investments including $180 million spent in October 2020 on the acquisition of Europe-focused pet toy and treat company Armitage Pet Care Ltd., operator of brands like Good Boy and Meowee!. This acquisition adds around $80 million, or 2%, to Spectrum's top-line. The company's portfolio activity has been predominantly focused on divestitures, with Spectrum using asset sale proceeds to reduce debt by around $2 billion in fiscal 2019, ending the fiscal year with $2.3 billion in debt and gross debt/EBITDA of 4.1x. Net leverage was 3.0x, well within Spectrum's target, given a strong cash position of over $600 million. In fiscal 2020, gross leverage ticked up modestly to approximately 4.5x from 4.1x in fiscal 2019, largely due to the company's $300 million unsecured notes issuance, as EBITDA was close to fiscal 2019 levels. Given Fitch's projections of good EBITDA growth in fiscal 2021 and assuming flat debt around $2.4 billion (net of capital leases), Fitch expects gross leverage to return to 4.0x. Fitch expects Spectrum could resume debt-funded acquisitions longer term, with leverage temporarily elevated. If debt-funded acquisitions cause leverage to exceed Spectrum's public targets, Fitch expects the company to pay down debt, as it has in the past. DERIVATION SUMMARY Spectrum's 'BB' rating reflects the company's diversified portfolio across products and categories with well-known brands, and commitment to maintaining net leverage between 3.0x and 4.0x, which equates to a similar gross debt/EBITDA target, assuming $100 million-$150 million in cash longer term, compared with approximately $225 million as of Jan. 3, 2021. The rating also reflects expectations for modest organic revenue growth over the long term, reasonable profitability with EBITDA margins near 15%, and positive FCF. These positive factors are offset by recent profit margin pressures across segments and the company's acquisitive posture, which could cause temporary leverage spikes following a transaction. Spectrum is similarly rated to ACCO Brands Corporation (BB/Stable); Central Garden & Pet Company (BB/Stable); Tempur Sealy International, Inc. (BB/Stable); and Levi Strauss & Co. (BB/Negative). ACCO's 'BB' IDR reflects the company's consistent FCF and reasonable gross leverage around 3.0x given ongoing debt repayment after recent acquisitions. The ratings are constrained by secular challenges in the office products industry and channel shifts within the company's customer mix, as evidenced by recent results, along with the risk of further debt-financed acquisitions. Central Garden & Pet Company's 'BB'/Stable rating reflects the company's strong market positions within the pet and lawn and garden segments, ample liquidity supported by robust FCF, and moderate leverage offset by limited scale with EBITDA below $300 million. Fitch expects modest organic revenue growth over the medium term supplemented by acquisitions, with EBITDA margins around 10%. Fitch expects gross leverage to trend in the 3.0x-3.5x range, up from 2.6x in fiscal 2020 (ended September) as the company manages leverage in this range over time. Tempur Sealy's 'BB'/Stable ratings reflects its leading market position as a vertically integrated global bedding company with well-known, established brands across a wide variety of price points offered through broad distribution channels. The ratings are tempered by the single-product focus in a highly competitive, fragmented market exposed to potential pullbacks in discretionary consumer spending during periods of macroeconomic weakness. The mattress industry has also been susceptible to periods of irrational pricing, secular shifts in consumer preferences, and bankruptcies in both the supplier and distribution side. Over time, Fitch expects the company to manage gross leverage within its targeted range of less than 3.0x, diverting FCF toward shareholder returns and opportunistic acquisitions. Levi's 'BB' IDR reflects the significant business interruption resulting from the coronavirus pandemic and changes in consumer behavior, which materially reduced sales of apparel. The Negative Outlook reflects uncertainty regarding the timing and magnitude of a recovery in operating momentum. Adjusted leverage increased to approximately 6.0x in fiscal 2020 from 3.1x in fiscal 2019 as EBITDA declined to approximately $360 million from approximately $750 million in fiscal 2019 on a nearly 23% sales decline to $4.45 billion. Fitch expects adjusted leverage to be in the high-3.0x range in fiscal 2021, assuming sales and EBITDA declines of around 12% from fiscal 2019. Increased confidence in Levi's ability to achieve Fitch's projections and bring adjusted leverage to under 4.0x would lead to a stabilization in Fitch's Rating Outlook. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Revenue is forecast to grow around 4% to $4.1 billion in fiscal 2021 following 31% growth in the company's fiscal first quarter. Revenue growth could remain positive through the first fiscal half on tailwinds from consumer behavior changes resulting from the coronavirus pandemic. However, it could turn negative in the second half of the fiscal year against more challenging top-line comparisons and as behavioral changes are expected to unwind. Organic revenue could be in the 1%-2% range beginning in fiscal 2022, although Spectrum will face difficult comparisons early in fiscal 2022 that could lead to near-flat or modestly negative growth in fiscal 2022. -- Fitch projects fiscal 2021 EBITDA to grow around 6% to around $590 million, with strong EBITDA growth in the fiscal first half and potentially negative in the second half, assuming revenue declines. Fitch expects EBITDA growth beginning in fiscal 2022 to track with revenue growth. -- FCF (after dividends of around $75 million or $1.68 per share) is forecast to be around $150 million in fiscal 2021. Fitch expects the company to generate around $75 million from the sale of its Energizer stock. Cash flow usage in 2021 includes around $180 million for the Armitage acquisition. Stock buybacks, which were $42 million in fiscal 1Q21, could be around $150 million for the full fiscal year. Fitch projects FCF could improve to the $200 million-$250 million range beginning in fiscal 2022 on lower cash restructuring charges. FCF could be used toward tuck-in acquisitions and share repurchases. -- Gross leverage is forecast to trend around 4.0x beginning in fiscal 2021 absent debt-financed acquisitions. Fitch expects Spectrum to generally operate within the context of its public net leverage target of 3.0x-4.0x over time, equating to a similar range on a gross leverage basis, assuming $100 million-$200 million in cash, although Fitch recognizes debt financed transactions could cause leverage to be occasionally elevated on a temporary basis. Fitch would expect Spectrum to use FCF to reduce debt following a debt-financed acquisition, as it has in the past. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action could result if Spectrum sustained positive organic growth and gross debt/EBITDA below 4.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A negative rating action could result from a low single-digit sales decline, yielding EBITDA trending below $550 million and gross debt/EBITDA sustaining above 4.5x. A debt-financed transaction that reduced Fitch's confidence in Spectrum's ability to return gross debt/EBITDA below 4.5x within two years after the transaction would also be a rating concern. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Ample Liquidity: Liquidity was $809 million as of Jan. 3, 2021, consisting of $224.5 million of cash and equivalents and $584.5 million of availability on its $600 million revolving credit facility due June 2025. The company had no outstanding revolver borrowings as of Jan. 3, 2021, although availability was reduced by $15.5 million of outstanding LOC. As of Jan. 3, 2021, Spectrum's capital structure consisted of approximately $1.85 billion of senior unsecured notes maturing between 2024 and 2030, and EUR425 million of unsecured euro notes maturing in October 2026. The company is proposing a refinancing in which proceeds from $350 million in new secured term loans due February 2028 and new unsecured notes, which Fitch estimates could be around $400 million, would be used to repay the company's $250 million in unsecured notes due December 2024 and $500 million of its $1 billion in unsecured notes due July 2025. The proposed term loan would be pari passu to the company's existing revolver. After the transaction, the company's next maturity would be the revolver due June 2025 and remainder of the $1 billion in unsecured notes due July 2025. The company has not indicated an expected maturity for the new proposed notes but Fitch expects they would not be due prior to 2025. Recovery Considerations Fitch has assigned Recovery Ratings (RRs) to the various debt tranches in accordance with Fitch criteria, which allows for the assignment of RRs for issuers with IDRs in the 'BB' category. Given the distance to default, RRs in the 'BB' category are not computed by bespoke analysis. Instead, they serve as a label to reflect an estimate of the risk of these instruments relative to other instruments in the entity's capital structure. Fitch assigned the first-lien secured debt a 'BBB-'/'RR1', notched up two from the IDR and indicating outstanding recovery prospects given default. Unsecured debt will typically achieve average recovery, and was thus assigned a 'BB'/'RR4'. SUMMARY OF FINANCIAL ADJUSTMENTS Material financial adjustments include stock-based compensation, safety recalls, divestitures, legal and environmental remediation reserves, inventory step-up and other non-operating expenses. 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. SPECTRUM BRANDS: S&P Rates New $350MM Senior Sr. Term Loan 'BB-' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level rating and '1' recovery rating to Spectrum Brands Inc.'s proposed $350 million senior secured term loan due 2028. The '1' recovery rating indicates its expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default. S&P said, "We expect the company to use the net proceeds from this issuance to redeem all of its $250 million senior unsecured notes due 2024 and a portion of its senior unsecured notes due 2025. Therefore, we view the transaction as leverage neutral. Our ratings on the term loan assume the transaction closes on substantially the same terms that were provided to us. Spectrum will have about $2.5 billion of debt outstanding pro forma for the proposed transaction. "All of our existing ratings on the company, including our 'B' issuer credit rating and negative outlook, are unchanged. "Our ratings on Spectrum incorporate its good product diversity in the consumer product sector and its participation in low-growth, highly competitive product categories that are susceptible to seasonality and input-cost volatility. The company's Hardware & Home Improvement (HHI) segment has a solid market position in residential locks, builder's hardware, and plumbing. The value-focused Home and Garden (H&G) segment has a defensible market position but is susceptible to extreme weather conditions. The Global Pet Care (GPC) sector has good fundamentals, including relatively stable underlying consumer demand. Nevertheless, it's a highly fragmented and competitive space. Input-cost variability also remains a key risk, especially for Spectrum's HHI and H&G businesses." SUPERIOR PLUS: S&P Affirms 'BB-' ICR, Outlook Stable ---------------------------------------------------- On Feb. 18, 2021, S&P Global Ratings affirmed its 'BB-' issuer credit rating on Superior Plus Corp. At the same time, S&P Global Ratings affirmed its 'BB-' issue-level rating on the company's unsecured notes, and revised its recovery rating on the notes to '4' from '3' to reflect the lower enterprise value. The stable outlook reflects S&P's expectation that adjusted debt to EBITDA will remain in the low-to-mid 4x area over the next 12 months. In S&P's view, the narrow scope of operations and loss of cash flows from the chemicals segment are offset by lower inherent volatility and continued growth in the energy services segment. Superior Plus announced that it has entered into an agreement to sell its chemicals segment for C$725 million in gross proceeds to Birch Hill Equity Partners, a Canada-based private equity firm. Superior expects to receive about C$600 million in cash proceeds at the time of close, while issuing a five and a half-year C$125 million unsecured note to Birch Hill. The cash proceeds are expected to be used toward repaying amounts outstanding on the credit facility (about C$360 million) and to fund future acquisitions. S&P expects the transaction to be completed by the second quarter of 2021. S&P said, "We expect the sale of the chemicals segment to weaken Superior's operating breadth; the segment accounted for 20% of total cash flows in 2020. Despite the business scope narrowing from an operating perspective, our perception of the industry risk has improved as we now view it to be less volatile. The sale also allows management to focus on expanding the company's energy services segment. Superior's growth strategy has been focused on increasing the company's presence in the U.S. propane distribution business. We believe the proceeds from the sale and investment made by Brookfield Asset Management Inc. during 2020 (C$350 million) provide Superior with the balance-sheet flexibility to further penetrate this market. As a result, we expect acquisitions at an aggressive rate over our forecast period and believe the loss of cash flows from the chemicals segment is likely to be replenished by growth in earnings from the energy services segment over the next three-to-four years. "We expect leverage in the low-to-mid 4x area, which is consistent with our current rating threshold. "Based on our forecasts, we estimate adjusted debt to EBITDA to be in the low-to-mid 4x area over the next two years. Our estimates assume the impact from warmer weather conditions will be offset by growth in cash flows from acquisitions. Specifically, we believe EBITDA will increase from current levels by 4%-5% annually. We also expect the company to generate positive free cash flows in the low-to-mid C$200 million area annually over the next two years; but believe these will be largely used toward dividends and acquisitions. Management expects to continue distributing dividends in line with its target payout ratio of 40%-60%. We also expect tuck-in acquisitions of more than C$200 million annually. As a result, we don't estimate any further debt reductions over our forecast period but believe leverage will remain below 5x during that time. "Our ratings reflect our reassessment of the company's business risk, while comparing Superior with peers such as Suburban Propane Partners L.P. "Our business risk assessment on Superior primarily reflects exposure to the propane distribution market, weak pricing power, and limited organic growth prospects due to competition from alternative fuel sources (primarily in its U.S. markets), namely natural gas and electricity. This is partially offset by the company's leading market position in Canada and growing share in the U.S., as well as its ability to sustain stable margins." Superior has an estimated 40% market share in Canada. The company's growth strategy is now focused on increasing its presence in the fragmented U.S. propane distribution business through ongoing tuck-in acquisitions, as demonstrated by the pace of recent acquisitions in this market. Specifically, the acquisition of NGL Energy Partners L.P.'s retail propane distribution business in 2018 provided the company with a strong platform for growth in the eastern U.S. The company has also recently been active in California and has stated its intention to expand its presence in this region, given good growth prospects. S&P said, "Our rating on Superior is comparable to that of peers such as Suburban Propane Partners L.P. (BB-/Stable/--). Similar to Superior, Suburban also operates in propane distribution and has significant coverage in the U.S. Northeast, Midwest, Southeast, and West Coast. While it only has a presence in the U.S., it has higher margins given a higher proportion of residential customers. We expect Superior's profitability to improve as the company continues to invest in improving operational efficiencies (such as its digital platform and installing sensors in tanks), and continues to increase the proportion of retail propane volumes in its sales mix, which has a higher unit margin. At the same time, earnings volatility has declined, in our view, because Superior has diversified across different regions in North America, reducing its sensitivity to volatile weather patterns. "The stable outlook reflects our expectation that the company will maintain an adjusted debt-to-EBITDA ratio in the low-to-mid 4x area in 2021 and 2022. We expect Superior to continue making tuck-in acquisitions but assume leverage will remain below 5x over our forecast period "We could lower the ratings within the next 12 months if we expect Superior's adjusted debt-to-EBITDA ratio to increase above 5x, with limited prospects for improvement shortly thereafter. We believe this could occur if cash flows deteriorate due to lower demand from warm winters or competitive pressures affect gross margins. We could also lower the rating if management pursues more aggressive financial policies or actions, including predominantly leverage-financed acquisitions or shareholder returns. "We could raise the ratings if the company meaningfully increased its size and scale, and reduced its leverage position. This would most likely occur through an acquisition, funded in a balanced manner such that adjusted debt to EBITDA is maintained and sustained below 3.5x." TEEKAY CORP: S&P Alters Outlook to Negative, Affirms 'B+' ICR ------------------------------------------------------------- On Feb. 17, 2021, S&P Global Ratings revised the outlook to negative from stable and affirmed its 'B+' long-term issuer credit and issue-level ratings on Teekay Corp. S&P has revised the recovery rating on the senior secured notes to '4' from '3' to reflect the lower perceived value for the FPSOs. The negative outlook reflects refinancing risk and Teekay's increasing reliance on subsidiaries to meet financial obligations. S&P said, "In our view, the upcoming refinancing, in the absence of tangible collateral, faces a meaningful credit risk. We believe the proceeds from the anticipated sale of the FPSOs (which are the underlying collateral for the notes), given their current market value, will not be sufficient to fully repay the secured debt at Teekay Corp." The company has received US$67 million from the Foinaven contract, but only modest sale proceeds are expected from the Hummingbird and Banff FPSOs. In addition, once the FPSOs are sold, there will no longer be any tangible collateral remaining at the parent, which could necessitate some form of refinancing for the remaining balance. Furthermore, the company will remain increasingly reliant on dividends from TGP to meet financial commitments and without a substantial increase to these dividends (about US$40 million currently), the upstream cash flows will also not be sufficient to fully repay debt at the parent level. The negative outlook reflects the uncertainty around the refinancing, especially given that the parent's debt is structurally subordinated to that of the subsidiaries. In addition, the company has about US$110 million of convertible notes that are due January 2023. Although the parent has an undrawn US$150 million margin revolver and bondholders effectively have a second lien on equity interests in subsidiaries, lack of a clearly defined refinancing plan underpins the outlook revision. In addition, the margin revolver matures in June 2022, before the notes' maturity. S&P said, "The affirmation largely reflects contract stability at TGP, and our expectation that credit measures will remain within our rating threshold. The affirmation largely reflects the contracted revenue base at TGP, which provides earnings stability. We view TGP to be relatively resilient, given its fixed-price term contracts with highly rated oil and gas companies including BP, Royal Dutch Shell PLC, Cheniere, and Naturgy Energy. The company has close to 100% of its liquefied natural gas (LNG) fleet under fixed-rate, take-or-pay contracts for 2021, which in our view provides some degree of earnings stability. "While crude tanker rates spiked in the first half of 2020 from strong demand for floating storage, rates have fallen as expected. Accordingly, we continue to expect Teekay Tankers Ltd.'s (TNK) cash flows will decline meaningfully in 2021, given the company's high spot market exposure (about 75%). However, we believe tanker supply fundamentals remain positive beyond 2021, due to a relatively small order book and an aging fleet (averaging about 11 years), which, among other factors, will limit supply growth and downward pressure on spot rates. "Under our base case scenario, we estimate adjusted debt to EBITDA in the mid 5x area and funds from operations (FFO) to debt of about 12%-15% in 2021 and 2022." The negative outlook reflects increasing refinancing risk associated with the existing debt at Teekay, and increasing reliance on dividends from subsidiaries. In S&P's view, proceeds from asset sales and modest dividends from TGP are insufficient to meet the financing obligations at the parent level. S&P said, "We could lower the rating within the next six-12 months if Teekay is unable to address the evolving refinancing risk we attribute to its senior secured debt, as proceeds from the sale of its FPSOs will likely be insufficient to fully repay the debt. In addition, we could lower the rating if the company disposes its FPSOs, while debt remains outstanding, as this would increase reliance on distributions from subsidiaries to service debt obligations. A downgrade could also result if operating performance deviates from our expectations, with FFO to debt declining to the mid-to-lower half of the 0%-12% range. We believe this could occur if industry conditions lead to unfavorable renegotiations of LNG contracts, resulting in a significant negative variation in revenues and cash flows relative to current forecasts. "We believe maintaining the current 'B+' rating will be difficult, given our view that Teekay will remain reliant on distributions from its subsidiaries to meet financial obligations. Although unlikely, we could revise the outlook to stable if the parent repays all its debt outstanding following the sale of the FPSOs. In this scenario, we would also expect the consolidated entity's operating performance to remain in line with our current expectations, with FFO to debt remaining above 12%." THG PROPERTIES: Owners to Contribute $100,000 to Plan ----------------------------------------------------- THG Properties LLC and Town Hospitality Group, Inc., filed a Second Amended Joint Chapter 11 Plan of Reorganization on Feb. 12, 2021. The Debtors Plan is premised on the purchase and refinancing by Acorn Capital LLC of its senior secured debt currently held by Avidia Bank. The refinancing, along with the Debtors' current cash and future operations, will permit the Debtors to provide a meaningful distribution to creditors. The Second Amended Plan further contemplates: (i)the satisfaction in full of all administrative and priority claims; (ii) the full satisfaction of the secured claims of the Massachusetts Department of Revenue(the "DOR") and the Internal Revenue Service (the "IRS") to the extent that such claims are attributable to unpaid prepetition taxes and interest thereon; (iii) the payment of a 100% dividend, on the Effective Date, to the holders of allowed general unsecured claims in the THG case; (iv) the payment by Town Hospitality of a 25% dividend to the holders of allowed general unsecured claims in the Town Hospitality case, including by agreement certain subordinated claims of the DOR and the IRS attributable to penalties, over a period of 36 months from the Effective Date of the Plan; and (v) a further contribution by the Debtors' equity holders of $100,000, payable in years four and five of the Plan, secured by a junior lien on their equity interests in THG. The prior iteration of the Plan did not provide for the $100,000 contribution by equity holders. Equity holders are unimpaired. The equity interest holders of THG and Town Hospitality are James Derosier, Ryan Campbell, Greg Miscikowski and Todd Tierney, who will receive no distribution under the Plan on account of such interests, but will retain unaltered, the legal, equitable and contractual rights to which such interests were entitled as of the Petition Date, except to the extent that equity is disbursed to holders of Allowed Class 4B Claims. A copy of the Second Amended Plan filed Feb. 12, 2021, is available at https://bit.ly/3u9VuSX About THG Properties THG Properties LLC is a Massachusetts Limited Liability Company that owns and operates the real property located at 386 Commercial Street, Provincetown, Massachusetts. The Property is tenanted by a 15-room guest house known as the Waterford Inn and a restaurant called Spindlers. The Inn and Restaurant are owned by Town Hospitality, a Massachusetts corporation. Both are owned by the same individuals. The Property has an appraised value of $5.94 million. THG Properties sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 20-10644) on March 5, 2020. The petition was signed by James Derosier, manager. At the time of filing, the Debtor had $5,988,300 in assets and $3,571,822 in debts. THG Properties LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Town Hospitality Group filed for Chapter 11 protection (Bankr. D. Mass. Case No. 20-11496) on July 14, 2020, listing under $500,000 in estimated assets and $1 million to $10 million in estimated liabilities. The two cases are jointly administered. Judge Frank J. Bailey oversees the cases. The Debtors are represented by David B. Madoff, Esq., at Madoff & Khoury, LLP. No creditors' committee has been appointed in either case. TIDEWATER ESTATES: Seeks to Hire Re/Max as Real Estate Broker ------------------------------------------------------------- Tidewater Estates, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to employ Re/Max Coast Delta Realty as its real estate broker to facilitate the sale of its real property in Hancock County, Miss. The firm's services include: a. listing for sale of the real property; b. assisting in negotiations with prospective purchasers; and c. assisting in the closing of the sale. Re/Max does not represent any interest adverse to the Debtor and its estate, according to court papers filed by the firm. The firm can be reached through: Jon Ritten Paulette Snyder RE/MAX Coast Delta Realty 5400 Indian Hill Dr. Diamondhead, MS 39525 Phone: +1 228-255-2600 About Tidewater Estates Tidewater Estates, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 20-50955) on June 9, 2020. In the petition signed by Emile A. Bertucci, III, director, secretary and treasurer, the Debtor was estimated to have $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Judge Katharine M. Samson oversees the case. The Debtor tapped Sheehan & Ramsey, PLLC as its legal counsel and L. Kelly Baker, CPA, PA as its accountant. TOPP'S MECHANICAL: Gets OK to Hire Houghton Bradford as Counsel --------------------------------------------------------------- Topp's Mechanical, Inc. received approval from the U.S. Bankruptcy Court for the District of Nebraska to hire Houghton Bradford Whitted PC, LLO as its bankruptcy counsel. The firm will render these services: a. perform all necessary services including, without limitation, legal advice and the preparation of necessary documents in the areas of restructuring and bankruptcy; b. advise the Debtor regarding its powers and duties in the continued management and operation of its businesses and properties; c. attend meetings and negotiate with creditors and other parties; d. take all necessary actions to protect and preserve the Debtor's estate, including prosecuting actions on the Debtor's behalf, defending any action commenced against the Debtor, and representing the Debtor's interests in negotiations concerning all litigation in which the Debtor is involved; e. prepare legal papers; f. take any necessary action to obtain approval of a disclosure statement and confirmation of a plan of reorganization; g. represent the Debtor in connection with any potential post-petition financing; h. appear before the bankruptcy court, any appellate courts, and the U.S. trustee; and i. perform all other necessary legal services for the Debtor in connection with its Chapter 11 case. The firm will be compensated at its standard hourly rate of $275. It received a retainer in the amount of $14,000. Houghton Bradford is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Justin D. Eichmann, Esq. Houghton Bradford Whitted PC, LLO 6457 Frances Street, Suite 100 Omaha, NE 68106 Tel: (402) 344-4000 Email: jeichmann@houghtonbradford.com About Topp's Mechanical Topp's Mechanical Inc., a mechanical contractor in Tecumseh, Neb., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 21-40038) on Jan. 15, 2021. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Thomas L. Saladino oversees the case. Justin D. Eichmann, Esq., at Houghton Bradford Whitted PC, LLO, is the Debtor's legal counsel. TOPPS COMPANY: Moody's Completes Review, Retains B2 CFR ------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of The Topps Company, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations The Topps Company, Inc.'s CFR (B2) reflects its small size annual revenues, niche market focus in mature categories, and its exposure to inherent volatility from the sports and entertainment collectibles industry. Some retail customers of the company's confectionery segment have experienced store closures or reduced operations because of the coronavirus outbreak, which negatively impacted demand. Moody's expects demand for the company's confectionery products will sequentially improve, as retail stores re-open and the company benefits from its e-commerce initiatives but will remain below prior year levels as specialty retail customers continue to have lower traffic. Governance factors primarily consider the company's private equity ownership, and the associated potential for shareholder distributions. The company's credit profile also reflects its solid position in the domestic sports card market, and healthy geographic exposure that reaches the North American, Latin American and EMEA markets. The company has moderate segment diversification, highlighted by a well-established presence in the confectionery business, which has historically helped mitigate volatility in financial performance stemming from the more volatile sports and entertainment segment. However, through most of 2020 the sports and entertainment segment's significant revenue and earnings growth has more than offset weakness in the confectionery business, driven primarily by strong demand in the baseball category across all channels. The company's highly successful Project 2020 (20 artists remaking 20 iconic rookie cards) is contributing to strong performance this year but will create difficult comps for 2021 when Moody's expect earnings to decline and leverage to increase. The rating is also supported by Topps' moderate financial leverage for the rating, and its good liquidity. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. TRANSPINE INC: Has Until Feb. 25 to File Amended Plan & Disclosures ------------------------------------------------------------------- On Feb. 11, 2021, the U.S. Bankruptcy Court for the Central District of California, San Fernando Valley Division, held a chapter 11 status conference for debtor Transpine, Inc. On Feb. 16, 2021, Judge Victoria S. Kaufman ordered that: * The Debtor must file an amended chapter 11 plan and related disclosure statement no later than Feb. 25, 2021. * March 11, 2021, is fixed as the last day to file objections to the approval of the amended disclosure statement. * March 25, 2021, at 1:00 p.m., is the hearing regarding the adequacy of the amended disclosure statement and a continued chapter 11 status conference. * March 15, 2021, is fixed as the last day for the debtor to file a status report, to be served on the Debtor's 20 largest unsecured creditors, all secured creditors, and the United States Trustee. A full-text copy of the order dated Feb. 16, 2021, is available at https://bit.ly/3dqPaAm from PacerMonitor.com at no charge. Attorneys for the Debtor: Leslie A. Cohen, Esq. J'aime Williams, Esq. LESLIE COHEN LAW, PC 506 Santa Monica Blvd., Suite 200 Santa Monica, CA 90401 Telephone: 310.394.5900 Facsimile: 310.394.9280 E-mail: leslie@lesliecohenlaw.com jaime@lesliecohenlaw.com About Transpine Inc. Transpine, Inc., based in Tarzana, CA, is a corporation whose primary asset is its 100% ownership of the real property located at 4256 Tarzana Estates Drive, Tarzana, CA 91356. Transpine filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-11286) on July 22, 2020. In the petition signed by CEO Nisan Tepper, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Honorable Victoria S. Kaufman presides over the case. LESLIE COHEN LAW PC serves as bankruptcy counsel to the Debtor. TRI-STATE PAIN: March 25 Disclosure Statement Hearing Set --------------------------------------------------------- On Feb. 15, 2021, debtor Tri-State Pain Institute, LLC, filed with the U.S. Bankruptcy Court for the Western District of Pennsylvania a Disclosure Statement and Plan. On Feb. 16, 2021, Judge Thomas P. Agresti ordered that: * March 18, 2021, is the last day for filing and serving objections to the Disclosure Statement and to file a Request for Payment of an Administrative Expense. * March 25, 2021, at 10:00 a.m. is the hearing to consider the approval of the Disclosure Statement which shall be held by the Zoom Video Conference Application. A full-text copy of the order dated Feb. 16, 2021, is available at https://bit.ly/3k3H7Lp from PacerMonitor.com at no charge. About Tri-State Pain Institute Tri-State Pain Institute, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Cas No. 20-10049) on Jan. 23, 2020. At the time of the filing, the Debtor had estimated assets of between $500,001 and $1 million and liabilities of between $1,000,001 and $10 million. Judge Thomas P. Agresti oversees the case. The Debtor tapped Marsh, Spaeder, Baur, Spaeder, and Schaaf, LLP, as the legal counsel and Coldwell Banker Select, Realtors as real estate broker. On February 14, 2020, the U.S. Trustee for Regions 3 and 9 appointed a Committee of unsecured creditors in the Debtor's Chapter 11 case. The Committee is represented by Knox, McLaughlin, Gornall & Sennett, P.C. TURNING POINT: Moody's Completes Review, Retains B2 CFR ------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Turning Point Brands, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Turning Point Brands, Inc's (TPB) credit profile (CFR B2) reflects its high financial leverage, modest cash flows and competition against much larger players. The company faces execution risk as it aggressively pursues acquisitions and investment into new generation products to offset an industry-wide decline of traditional combustible cigarettes in the United States. TPB competes against significantly larger, better resourced, and well-known branded tobacco manufacturers. Regulatory risks will remain high over the next year as TPB seeks approval of its vaping products through the pre-market tobacco application process (PMTA). The credit profile also reflects growth in its new generation vaping products (NewGen) and smokeless products. Moody's expect the impact from the coronavirus pandemic and subsequent economic downturn will continue to create opportunities for the company as customers trade down in the smoking and smokeless categories and NewGen products continue to grow. Moody's further expect the company will remain acquisitive as it seeks opportunities for growth. Barring any material debt-financed acquisitions, Moody's expect the company to maintain moderately high debt-to-EBITDA leverage over the next twelve to eighteen months. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. U.S.A. DAWGS: Mojave Substitution as Successor-In-Interest OK ------------------------------------------------------------- The United States Court of Appeals, Federal Circuit granted U.S.A. Dawgs, Inc.'s and Mojave Desert Holdings, LLC's motion to subsitute Mojave as U.S.A. Dawgs' successor-in-interest. Crocs, Inc. is the owner of U.S. Design Patent No. D517,789 ("the '789 patent"), titled "Footwear." The '789 patent discloses what has become Crocs' iconic foam-molded clog design. On August 6, 2012, Crocs sued U.S.A. Dawgs, Inc. for infringement of the '789 patent in the United States District Court for the District of Colorado based on U.S.A. Dawgs's manufacture and sale of its own form of foammolded clog footwear. On August 24, 2012, shortly after Crocs sued for infringement, U.S.A. Dawgs filed a third-party request for inter partes reexamination of the '789 patent at the US Patent and Trademark Office under 35 U.S.C. Section 311. The USPTO ordered the reexamination on November 19, 2012. The district court stayed the proceedings in light of the inter partes reexamination. The examiner rejected the claim as anticipated under 35 U.S.C. Section 102(b). Crocs appealed to the Patent Trial and Appeal Board. On January 31, 2018, while the appeal was pending before the Board, U.S.A. Dawgs filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Nevada. In May, U.S.A. Dawgs moved for the bankruptcy court to approve the sale of all of its assets to a recently formed entity, Dawgs Holdings, LLC, "free and clear of all liens, claims, and encumbrances subject to 11 U.S.C. Section 363(b) and (f)." On July 20, 2018, the bankruptcy court approved the sale of U.S.A. Dawgs's assets to Dawgs Holdings pursuant to the terms and conditions of an Asset Purchase Agreement. The Asset Purchase Agreement assigned Dawgs Holdings all of U.S.A. Dawgs's right, title and interest in, to and under all of the assets, properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including intellectual property and goodwill), wherever located and whether existing or later acquired, owned, leased, licensed or used or held for use in or relating to the operation of its business as of the Closing Date. In its order approving the sale, the bankruptcy court stated that the Sale was not free and clear of any Claims that Crocs, Inc. may hold for patent infringement occurring post-Closing Date by any person including the Prevailing Bidder, or any defenses Crocs may have in respect of any litigation claims that are sold pursuant to the Sale. U.S.A. Dawgs moved to distribute the net proceeds from the sale of its assets and to dismiss its Chapter 11 bankruptcy case. On August 21, 2018, the bankruptcy court granted U.S.A. Dawgs's motion, authorizing the distribution of the net sale proceeds and dismissing U.S.A. Dawgs's Chapter 11 bankruptcy case. On August 15, 2018, Dawgs Holdings assigned all rights, including the claims asserted by U.S.A. Dawgs in the District of Colorado action and the inter partes reexamination, to Mojave. On October 23, 2018, U.S.A. Dawgs dissolved but continued to exist for limited purposes, including "prosecuting and defending suits, actions, proceedings and claims of any kind or character by or against it" and "enabling it . . . to do every other act to wind up and liquidate its business and affairs." On July 18, 2019, Mojave filed a petition with the Board titled, "Request to Change the Real-Partyin-Interest from Third-Party Requestor U.S.A. Dawgs, Inc. to Mojave Desert Holding, LLC in Inter Partes Reexamination/Hearing." The Board expunged and dismissed Mojave's request on August 19, 2019, on various grounds. On September 10, 2019, the Board issued its decision reversing the examiner's rejection of the '789 patent's sole claim. U.S.A. Dawgs appealed to the United States Court of Appeals, Federal Circuit. In its Notice of Appeal, U.S.A. Dawgs stated that Mojave "intend[ed] to file a motion for substitution of parties" with the court "pursuant to Federal Rule of Appellate Procedure 43(b)." On December 13, 2019, U.S.A. Dawgs and Mojave filed the motion to substitute. Crocs asserted that U.S.A. Dawgs and Mojave's motion to subsitute should be denied for the following reasons: (1) that the Board correctly determined that Mojave is not the successor-in-interest to U.S.A. Dawgs with respect to the inter partes reexamination because the bankruptcy sale did not transfer U.S.A. Dawgs's interest as a requester to Dawgs Holdings; (2) that, even if Mojave is a successor-in-interest to U.S.A. Dawgs, Mojave did not seek substitution before the Board for nearly a year after it acquired U.S.A. Dawgs's interest in the inter partes reexamination and that the Board properly denied substitution on this ground under 37 C.F.R. Section 41.8(a); (3) that the interest of a requester cannot be assigned under the statute governing appeals from inter partes reexamination; (4) that, even if Mojave is the successor-ininterest to U.S.A. Dawgs, Mojave lacks standing because it does not face a potential suit for infringement; and (5) that Mojave failed to file a notice of appeal from the Board's decision. The Court disagreed with Crocs' arguments. As to Crocs' first argument, the Court found that "all of U.S.A. Dawgs's interests were included as property of its estate when it filed for bankruptcy. See 5 Collier on Bankruptcy... the first sale from U.S.A. Dawgs to Dawgs Holdings clearly transferred all of U.S.A. Dawgs's assets and claims and did so using broad language. U.S.A. Dawgs did not need to enumerate each of its assets individually to effectuate the broad transfer. U.S.A. Dawgs dissolved and did not continue to participate before the Board. Under the circumstances, the transfer of all assets on its face included the rights in the Board proceeding. The second sale similarly assigned Mojave all of Dawgs Holdings's assets and claims and, for clarity, specifically enumerated its interest as the requester in the inter partes reexamination. The reassignment provided '[t]hat for good and valuable consideration, . . . [Dawgs Holdings], by these presents does hereby sell, grant, and convey unto [Mojave] . . . all of [Dawgs Holdings's] right, title and interest in and to all of the Acquired Assets . . ., which, for the avoidance of doubt, is intended to and does include all rights of [Dawgs Holdings] in any post-grant proceeding before the U.S. Patent and Trademark O!ce concerning any of the patents at issue . . ., including without limitation, inter partes reexamination control no. 95/002"... As these assignments make clear, Mojave is the successor-in-interest of U.S.A. Dawgs." Addressing Crocs' second argument, the Court held that "We do not read 37 C.F.R. Section 41.8(a) as permitting the Board to ignore a transfer of interest in an inter partes reexamination that has been assigned to a successor-in-interest. The purpose of the rule is to detect conflicts of interest and to enable enforcement of inter partes reexamination estoppel provisions. The rule is not directly related to substitution. Notably, in the federal district courts, there is no time limit attached to a party moving for substitution on the basis of a transfer in interest... If the Board were permitted to preclude substitution on the basis of a transfer in interest because of a late filing, this would defeat the important interest in having the proper party before the Board. The Board erred by not substituting Mojave as the third-party requester while the inter partes reexamination was pending before the Board." With regard to Crocs' third argument, the Court said that "here, it may well be that the right of the requester to appeal cannot be separated from the requester's potential liability for infringement. But we are aware of no case that suggests that a federal claim is lost when it is transferred together with the assignor's entire business. Where, as here, the requester's right has been transferred together with all other assets, there is no reason that the requester's right to challenge the Board's decision cannot be effectively transferred. To refuse to recognize such a transfer where the other assets remain subject to infringement liability would create a situation in which the assets remained potentially liable for infringement, but the transferee would have lost the right to challenge patent validity. Crocs points to nothing in the statutory structure or legislative history of the inter partes reexamination statute that suggests that the general rule regarding the assignment of causes of action should not apply to this situation, and we similarly are aware of none. We hold that, under the statute, the requester's right (including its right to appeal) may be transferred at least when it occurs as part of the transfer of the requester's entire business or assets." The Court, disagreeing with Crocs' fourth argument, held that "Mojave has standing as U.S.A. Dawgs's successor-in-interest. The sale agreement approved by the bankruptcy court specifically provided that the transferred assets '[were] not free and clear of any Claims Crocs, Inc. . . . may hold for patent infringement occurring post-Closing Date by any person including the Prevailing Bidder'... The acquired assets thus face potential patent infringement claims. Moreover, Mojave also could face potential patent infringement liability because of activities after the bankruptcy sale relating to the sale of acquired inventory that is alleged to infringe. Mojave also meets the other two requirements of standing. Mojave's injury is traceable to the challenged '789 patent, which has been asserted by Crocs in the District of Colorado litigation, and would be redressed by a favorable ruling in this court that reversed the Board's finding of patentability of the '789 patent." Finally, with regard to Crocs' fifth argument, the Court found that "Mojave could not file a notice of appeal because it had not been added as a party by the Board to the inter partes reexamination proceeding. Under Nevada law, however, U.S.A. Dawgs retained the ability to file a protective notice of appeal, and did so on November 8, 2019. That was sufficient to confer jurisdiction on this court." The Court concluded that Mojave is the successor-in-interest to U.S.A. Dawgs, that it has standing to pursue the challenge to the '798 patent, and that the Board erred in not substituted Mojave for U.S.A Dawgs as the third-party requester during the inter partes reexamination. The case is MOJAVE DESERT HOLDINGS, LLC, Appellant, v. CROCS, INC., Appellee, Case No. 2020-1167 (Fed. Cir.). A full-text copy of the Order, dated February 11, 2021, is available at https://tinyurl.com/131ggij8 from Leagle.com. Mojave Desert Holdings, LLC is represented by: Matt Berkowitz, Esq. SHEARMAN & STERLING LLP 1460 El Camino Real 2nd Floor Menlo Park, CA 94025-4110 Telephone: 6500-838-3600 Email: matt.berkowitz@shearman.com - and - Yue Wang, Esq. Patrick Robert Colsher, Esq. Mark A. Hannemann, Esq. Thomas R. Makin, Esq. 599 Lexington Avenue New York, NY 10022-6069 Telephone: 212-848-4000 Email: liu.wang@shearman.com patrick.colsher@shearman.com mark.hannemann@shearman.com thomas.makin@shearman.com - and - Laura Kieran Kieckhefer, Esq. 535 Mission Street 25th Floor San Francisco, CA 94105-2997 Telephone: 415-616-1100 Email: kieran.kieckhefer@shearman.com Crocs, Inc. is represented by: Michael Berta, Esq. ARNOLD & PORTER KAYE SCHOLER LLP 10th Floor Three Embarcadero Center San Francisco, CA 94111-4024 Telephone: 415-471-3100 Email: michael.berta@arnoldporter.com - and - Sean Michael Callagy, Esq. Mark Christopher Fleming, Esq. WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, Massachusetts 02109 Telephone: 617-526-6000 Email: mark.fleming@wilmerhale.com - and - Benjamin S. Fernandez, Esq. WILMER CUTLER PICKERING HALE AND DORR LLP 1225 17th Street Suite 2600 Denver, CO 80202 Telephone: 720-274-3135 Email: ben.fernandez@wilmerhale.com About U.S.A. Dawgs Inc. U.S.A. Dawgs Inc. -- https://www.usadawgs.com/ -- designs, manufactures, and distributes footwear. The company offers slip resistant, casual working, safety, golf, spirit, and toning shoes; sandals, flip flops, bendables, clogs, and Aussie style and cow suede boots; and socks for men, women, boys, girls, and babies. The company was founded in 2006 and is based in Las Vegas, Nevada. U.S.A. Dawgs, Inc., filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 18-10453) on Jan. 31, 2018. In the petition signed by Steven Mann, president and CEO, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million liabilities. The case is assigned to Judge Laurel E. Davis. The Debtor is represented by Talitha B. Gray Kozlowski, Esq. and Teresa M. Pilatowicz, Esq. of Garman Turner Gordon, LLP. U.S.A. Dawgs filed a disclosure statement to accompany its plan of reorganization dated June 5, 2018. UBER TECHNOLOGIES: S&P Upgrades ICR to 'B', Outlook Stable ---------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Uber Technologies Inc. to 'B' from 'B-'. At the same time, S&P raised its ratings on Uber's secured debt to 'B+' from 'B', and its ratings on its unsecured debt to 'B-' from 'CCC+'. S&P said, "Finally, we are assigning a 'B+' issue-level rating and '2' recovery rating to the company's secured term loan due in 2027. The company will use the proceeds to repay its secured term loan due in 2023. "The stable outlook reflects our expectation for improving EBITDA and cash flow as the company recovers from pandemic restrictions, its strong cash balance, and valuable equity stakes. "The upgrade reflects our expectation for positive EBITDA on a quarterly basis in the second half of 2021 on a rebound in the Mobility segment. The COVID-19 holiday surge has subsided, vaccines are rolling out, and Delivery profitability is improved on higher basket sizes and courier utilization. Mobility has proven resilient as the segment EBITDA remained positive in the second quarter, and the holiday surge merely stalled progress rather than setting it back. We believe Mobility will return to pre-pandemic usage as early as late 2021, as COVID-19 restrictions ease. We believe the pandemic has caused a mostly permanent change in the acceptance of local delivery services. The Delivery segment will sustain most of its gains, allowing EBITDA to be positive as it exits 2021. We also expect the companywide unadjusted free cash flow deficit will narrow to about $2 billion in 2021 from $4 billion in 2020, and reach break-even in 2022. This will be aided by its recent $1 billion cost reduction and the divestiture of its autonomous driving research unit. "In addition, voter approval of California's Proposition 22, which guarantees drivers some benefits while maintaining their status as independent contractors, removes a significant regulatory overhang. We believe Uber will need to raise prices to cover new costs, but that the trend toward increasing adoption of ride-sharing will remain intact, as in New York City after it imposed minimum wages and driver caps. We think the new law will likely serve as a model for other jurisdictions that may consider restrictions on utilizing independent contractors." Finally, the company's strong unrestricted cash balance of $6.8 billion and equity stakes with nearly $10 billion of book value as of Dec. 31, 2020, provide key support for the rating. The raised issue-level ratings reflect the upgrade of Uber. Our recovery rating on the company's secured debt remains '2' and our recovery rating on its unsecured debt remains '5'. The new ratings on Uber's extended term loan are the same as those on its secured debt. S&P said, "The stable outlook reflects our confidence that EBITDA and cash flow will improve upon recovery from COVID-19 restrictions, and that the company's cash and equity stakes provide some cushion within the rating. "We could raise the rating if we believe Uber is on track to achieve our forecast for more than $1 billion of S&P Global Ratings-adjusted EBITDA in 2022 and about break-even unadjusted cash flow. This would likely come from above-trend bookings growth in Mobility of about 50% as the segment continues to recover from COVID-19, and improving Delivery profitability on increasing courier utilization and basket sizes. "We could lower the rating if Uber sustains annual cash flow deficits of multiple billions of dollars with uncertain prospects for improvement due to increasing competition, adverse regulatory actions, or a resurgence in COVID-19 cases that delays the recovery in its Mobility business. The company might avoid a downgrade if it sustains negative cash flow due to growth-related discretionary investments we believe could be cut without hurting the core ride-sharing and restaurant delivery businesses. This is provided liquidity remains sufficient to fund operations and investments necessary to achieve growth plans." US CONSTRUCTION: Case Summary & 5 Unsecured Creditors ----------------------------------------------------- Debtor: US Construction Services, LLC 1601 Dickenson Avenue E c/o Whitney Jones, Managing Member Dickinson, TX 77539 Business Description: US Construction Services, LLC is a privately held company in the residential building construction industry. Chapter 11 Petition Date: February 19, 2021 Court: United States Bankruptcy Court Southern District of Texas Case No.: 21-80029 Debtor's Counsel: Gabe Perez, Esq. ZENDEH DEL & ASSOCIATES, PLLC 1813 61st Street 101 Galveston, TX 77551 Tel: (409) 740-1111 E-mail: gabe@zendehdel.com Total Assets: $2,400,000 Total Debts: $1,262,826 The petition was signed by Whitney Jones, the managing member. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DODAQRY/US_Construction_Services_LLC__txsbke-21-80029__0001.0.pdf?mcid=tGE4TAMA USA COMPRESSION: Moody's Completes Review, Retains B1 CFR --------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of USA Compression Partners, LP and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 17, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations USA Compression Partners, LP's (USAC) B1 Corporate Family Rating reflects the extensive scale of its high-horsepower compression fleet, which ranks the company among the largest third-party providers of domestic natural gas compression services. A fee-based contract structure insulates cash flow from commodity price volatility, although 2020 experienced a modest utilization decline. USAC incurred substantial increased debt levels to fund a 2018 acquisition which effectively doubled its size, although debt leverage remains in a range appropriate for the partnership's ratings. The principal methodology used for this review was Global Oilfield Services Industry Rating Methodology published in May 2017. UTS UNDERGROUND: Has Until March 19 to File Reorganization Plan --------------------------------------------------------------- Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, gave UTS Underground Trenchless Solutions, LLC until March 19, 2021, to file a Plan of Reorganization. The Debtor filed its Ex Parte Motion for Extension of Time to File Plan of Reorganization on February 17, 2021. About UTS Underground Trenchless Solutions, LLC UTS Underground Trenchless Solutions, LLC is alimited liability company operating in the State of Florida and operating out of Miami, Florida since October 2014. UTS Underground Trenchless Solutions, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-22675) on Nov. 19, 2020. At the time of filing, the Debtor had estimated $100,001 to $500,000 in assets and 500,001 to $1 million in liabilities. Christina Vilaboa-Abel, Esq. at Cava Law, LLC serves as the Debtor's counsel. VAMCO SHEET: Case Summary & 2 Unsecured Creditors ------------------------------------------------- Debtor: Vamco Sheet Metals, Inc. 132-11 Bedell Street Jamaica, NY 11434 Chapter 11 Petition Date: February 18, 2021 Court: United States Bankruptcy Court Eastern District of New York Case No.: 21-40385 Judge: Hon. Jil Mazer-Marino Debtor's Counsel: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 3099 Coney Island Avenue 3rd Floor Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-3156 E-mail: alla@kachanlaw.com Total Assets: $1,099,467 Total Liabilities: $3,103,368 The petition was signed by Joyce Vettorino, president. 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/PSUHYCY/Vamco_Sheet_Metals_Inc__nyebke-21-40385__0001.0.pdf?mcid=tGE4TAMA VECTOR GROUP: Moody's Completes Review, Retains B2 CFR ------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Vector Group Ltd. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Vector's credit profile (B2 CFR) reflects its relatively small scale compared to larger U.S. tobacco companies and limited pricing flexibility. The company participates in the deep discount cigarette segment of an industry that is highly regulated. Vector's credit profile also reflects its aggressive financial policy, modest free cash flow and the ongoing threat of adverse tobacco litigation and regulation. Partially offsetting these risks is Vector's good track record of increasing EBITDA and improving share in the US cigarette market. Additionally, the company holds a cost advantage based on the beneficial terms provided under the Master Settlement Agreement ("MSA"). Vector also has very good liquidity with large cash balances and real estate investments that are conservatively managed and a leading residential real estate brokerage business (Douglas Elliman) that provides an additional, albeit volatile, source of earnings diversification. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. VERSANT HEALTH: Moody's Hikes CFR From B3 Amid MetLife Acquisition ------------------------------------------------------------------ Moody's Investors Service has upgraded Superior Vision Insurance, Inc.'s insurance financial strength rating to Aa3 from Ba3 and Versant Health Holdco, Inc.'s corporate family rating to A3 from B3, as the company has been acquired by MetLife, Inc. (A3 stable). The ratings had been on review for upgrade (September 22, 2020) since the deal was announced on September 17, 2020. The outlooks on Versant and Superior are stable. Following the upgrade, Moody's will withdraw Versant's corporate family rating as the associated debt has been repaid in connection with its acquisition by MetLife. RATINGS RATIONALE Moody's upgrade reflects MetLife's ownership of Superior, resulting in an alignment of the two company's ratings. Moody's anticipates Superior will be integrated into MetLife's operations and become an important part of one of MetLife's largest business line, the Group Benefits business. The Group Benefits line offers life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision and accident and health coverage, as well as prepaid legal plans. MetLife has holding company liquidity of approximately $4.5 billion as of December 31, 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade of the ratings on MetLife and its subsidiaries include the following: Upgrade of MetLife's US subsidiaries and/or ALICO's IFS rating; Adjusted financial leverage (excluding AOCI) less than 20% range; Earnings and cash flow coverage (includes both US and international) above 8x and 6x times, respectively. Factors that could lead to a downgrade include the following: Downgrade of MetLife's US subsidiaries or ALICO's IFS rating; Adjusted financial leverage (excluding AOCI) above 30%; Earnings and cash flow coverage (includes both US and international) below 6x and 4x, respectively; Rapid growth of international operations relative to the US with modest diversification benefit. The following ratings were upgraded: Issuer: Versant Health Holdco, Inc. corporate family rating to A3 from B3. Issuer: Superior Vision Insurance, Inc. insurance financial strength rating to Aa3 from Ba3. Outlook actions Issuer: Versant Health Holdco, Inc. Outlook changed to Stable from Rating Under Review Issuer: Superior Vision Insurance, Inc. Outlook changed to Stable from Rating Under Review MetLife, Inc. is headquartered in New York. As of December 31, 2020, MetLife reported total revenues of $67.8 billion and net income available to its common shareholders of $5.2 billion. The company reported total assets of about $795 billion and total stockholders' equity of $75 billion. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. The principal methodology used in these ratings was US Health Insurance Companies Methodology published in November 2019. VICTORY CAPITAL: S&P Affirms 'BB-' ICR, Alters Outlook to Positive ------------------------------------------------------------------ S&P Global Ratings revised its outlook on Victory Capital Holdings Inc. to positive from stable. At the same, time S&P affirmed its 'BB-' issuer credit rating on the company, and 'BB-' debt and '4' recovery ratings on the company's senior secured term loan. The '4' recovery rating indicates its expectation of average recovery (45%) in the event of default. S&P said, "The outlook revision reflects our view that leverage will be lower than we previously forecast as a result of further debt repayments along with higher EBITDA margins. The company repaid $163.8 million in debt in 2020, expanded margins, and boosted EBITDA. Altogether, Victory's credit profile has improved. We forecast debt to EBITDA to trend below 3.0x on a weighted basis (we do not net cash because of financial sponsor ownership). "Absent another market drawdown, which is not our base case, we think Victory will continue to deleverage through debt repayments. We think there's a moderate risk that Victory pursues another debt-funded acquisition due to the acquisitive nature of the multi-boutique business model. "Nevertheless, we believe the company is on a positive trajectory and that its credit profile is improving. It recently announced refinancing, which will lower the existing term loan rate to LIBOR plus 2.25% from LIBOR plus 2.5%, will likely provide an additional modest tailwind. "The positive outlook reflects our expectation that leverage, as measured by debt to EBITDA, will continue to trend lower than 3.0x over the next 12 months through a combination of debt reduction and EBITDA growth. "We could revise the outlook to stable if operating performance deteriorates so that leverage increases, either as a result of net outflows or declines in assets under management (AUM). A debt-funded acquisition or special dividend could also result in a revision to a stable outlook, as could absolute leverage rising above 5.0x." An upgrade is contingent on leverage remaining sustainably below 3.0x, as would solid investment performance with flat net flows. VILLAS OF WINDMILL: Objectors Say Trustee's Disclosures Ambiguous ----------------------------------------------------------------- Merrilee Zawadzki and Joseph Mabe object to the Disclosure Statement filed by Les S. Osborne, the operating trustee, for debtor Villas of Windmill Point II Property Owners Association, Inc. Objectors are unit owners in the residential complex located in Port Saint Lucie, Florida of which Villas of Windmill Point II Property Owners Association, Inc., the Debtor, serves as the property owners association. Should the Plan of Reorganization be confirmed by the Court, it will have an impact on the unit owners in the complex, such as Objectors. Objectors claim that the Disclosure Statement does not comply with Bankruptcy Code Sec. 1125 as it does not contain adequate information. There is information that is missing from the Disclosure, that would be material for the unit owners such as Objectors, and at other times the Disclosure is ambiguous. Objectors point out that the Disclosure should indicate why the Trustee will be controlling the funds which are property of the reorganized Debtor and therefore should be in control of the new Board. Objectors assert that the Disclosure Statement is ambiguous to the extent that it does not make clear whether professional fees incurred by the trustee and his professionals post-confirmation are subject to bankruptcy Court approval. Objectors believe all such fees and expenses should be subject to Bankruptcy Court approval. Objectors further assert that the Disclosure in Article V Description of the Plan indicates that the Class 1 creditors are George Santulli and Carlo Patti, who each hold claims in the amount of $185,703. The Disclosure indicates that the Trustee intends to pay these claims at $160,000. It is unclear if the Trustee intends to pay that amount to each of the Claimants, or is that amount the total to be paid on account of both Claimants. Objectors believe the Plan is not offered in good faith, and therefore is not confirmable, pursuant to Sec. 1129(a)(3). A full-text copy of Objectors' opposition dated Feb. 16, 2021, is available at https://bit.ly/3dxBrYS from PacerMonitor.com at no charge. Attorneys for Objectors: BEHAR, GUTT & GLAZER, P.A. DCOTA, 1855 Griffin Road, Suite A-350 Ft. Lauderdale, Florida 33004 Telephone: (954) 733-7030 Email: bsb@bgglaw.com BRIAN S. BEHAR FBN: 727131 About Villas of Windmill Point II Property Based in Port Saint Lucie, Fla., Villas of Windmill Point II Property Owners Association, Inc., is a non-profit corporation with volunteers that self manages 89 separately deeded, single-family residential villa units that are attached in four and five-unit clusters within a Planned Unit Development (PUD). Villas of Windmill filed a Chapter 11 petition (Bankr. S.D. Fla. 19-20400) on Aug. 2, 2019. At the time of filing, the Debtor was estimated to have $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Debtor is represented by Brian K. McMahon, Esq., in West Palm Beach, Fla. Leslie S. Osborne was appointed as the Debtor's Chapter 11 trustee. The Trustee is represented by Rappaport Osborne Rappaport. VISTA OUTDOOR: Moody's Hikes New 8-Yr. Unsecured Notes to B2 ------------------------------------------------------------ Moody's Investors Service upgraded Vista Outdoor Inc.'s new senior unsecured 8-year notes' rating to B2 from B3. All other ratings for the company including the B1 Corporate Family Rating and the B1-PD Probability of Default rating remain unchanged. Moody's took no action on the B3 rating on the existing $350 million senior unsecured notes due 2023 as these notes will be repaid and Moody's expects to withdraw the rating upon close. The outlook remains positive and the Speculative Grade Liquidity Rating remains SGL-1. The upgrade follows the company's announcement to upsize its new senior notes to $500 million from $350 million and reflects improved recovery for that class of debt given it now comprises a higher share of the overall capital structure while the CFR is unchanged. Net proceeds of the new notes will be used for general corporate purposes and primarily for the refinancing of the existing senior unsecured notes due 2023. The refinancing favorably extends Vista's unsecured debt maturities to 2029 from 2023. Moody's expects Vista will use excess proceeds from the transaction to initially bolster liquidity and ultimately for investment and acquisitions that increase the company's earnings base and potential share repurchases. The CFR and positive outlook are not affected because Vista's leverage remains low and earnings are project to grow in 2021. The following ratings/assessments are affected by the action: Issuer: Vista Outdoor Inc. Senior Unsecured Notes, upgraded to B2 (LGD5) from B3 (LGD5) RATINGS RATIONALE Vista's B1 CFR reflects its leading position as one of the largest ammunition manufacturers in the US, its leading brands in multiple niche outdoor product categories and favorable US outdoor activity participation trends. The rating also reflects its low debt to EBITDA leverage of 2.2x as of December 27, 2020 (pro-forma for the upsizing of notes). Vista's credit profile is constrained by the volatility in non-law-enforcement related ammunition demand, difficulties sustaining organic revenue growth in the competitive outdoor products market, and societal risks of its ammunition products. The ratings also reflect Moody's expectation that the company's operating performance will remain strong over the next 12 to 18 months as ammunition demand remains robust and as the company continues to work through its material backlog. The anxiety caused by the pandemic and high political discord in the US will continue to sustain demand for ammunition at higher levels as new gun owners enter the market and existing owners stockpile ammunition. Additionally, the company's outdoor segment will remain strong as consumers continue to seek outdoor activities due to the coronavirus. Moody's expects Vista's fiscal year ended March 2022 annual sales to reach $2.2 billion and EBITDA to improve to approximately $290 to $300 million with Debt to EBITDA maintained at around 2.0x. The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody's analysis has considered the effect on the performance of Vista 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 our forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The consumer durables industry is one of the sectors most meaningfully affected by the coronavirus because of exposure to discretionary spending. Moody's believes social risk will remain high for Vista due to its participation in the gun ammunition industry, although the risk has decreased after its exit from firearms manufacturing after divesting Savage Arms in July 2019. Governance factors include a favorable financial policy including a net debt-to-EBITDA target that was reduced in February to 1-2x (based on the company's calculation). Vista also does not pay a dividend, but share repurchases and potential debt-funded acquisitions create some event risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The positive outlook reflects Moody's expectation that demand for Vista's products will remain strong as ammunition sales continue to surge to support the large backlog of orders. The outlook also reflects Moody's expectation of a high likelihood that financial leverage will be maintained at lower levels as EBITDA remains robust for the next year and debt continues at the existing level. Ratings could be downgraded if liquidity deteriorates, operating performance declines materially after the ammunition demand tailwind ends, the integration of the Remington assets weakens Vista's earnings, or if management adopts a more aggressive financial policy. Debt/EBITDA sustained above 4.0x, or adverse gun industry regulations could also lead to a downgrade. Ratings could be upgraded if Vista sustains stable ammunition market share, produces organic growth with stable to higher margins in the outdoor products segment, and achieves strong sustained profitability from the ammunition business. Greater clarity regarding the sustainability of higher ammunition demand and earnings and strong free cash flow is necessary for an upgrade. Vista would also need to sustain on average debt to EBITDA below 2.5x after taking into consideration demand volatility from its ammunition business. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Vista Outdoor Inc., based in Anoka, Minnesota, is a manufacturer and marketer of ammunition and outdoor sports and recreation products. The publicly-traded company produces a broad product line for the biking, winter sports, hunting, shooting sports, wildlife watching, archery, and golf markets. Major brands include Bushnell, BLACKHAWK!, CamelBak, Federal, and Camp Chef. Sales were approximately $2.1 billion for the last twelve months ending December 27, 2020. VISTA OUTDOOR: S&P Rates New $350MM Senior Unsecured Notes 'B+' --------------------------------------------------------------- S&P Global Ratings assigned a 'B+' issue-level rating to Vista Outdoor Inc.'s proposed $350 million senior unsecured notes maturing 2029. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. The proceeds will be used to refinance Vista's outstanding $350 million 5.875% senior unsecured notes due in 2023. S&P said, "All our other ratings on the company, including the 'B+' issuer credit rating, are unaffected because the transaction is leverage-neutral. The positive outlook reflects our expectation that we could upgrade Vista over the next year if it sustains improvements and its financial policy remains conservative." Adjusted leverage was about 1.6x for the 12 months ended Dec. 27, 2020. S&P's ratings on Vista reflect its leading market positions in shooting sports and outdoor activities across a broad array of prices and good product diversification. They also capture the volatility of the ammunition category and input costs, and the susceptibility to reduced consumer spending in an economic downturn. ISSUE RATINGS - RECOVERY ANALYSIS Key analytical factors The debt capital structure consists of: -- $450 million asset-based lending (ABL) facility due in 2023 (not rated). -- New $350 million senior unsecured notes due in 2029. S&P said, "Vista is a Delaware corporation, and substantially all assets and operations are in the U.S. In the event of payment default, we believe a bankruptcy protection filing would be in the U.S. under the administration of the U.S. Bankruptcy Court system, while entities abroad, if any, remain out of any insolvency proceedings with respect to local jurisdictions. "We believe creditors would receive maximum recovery in a payment default scenario if Vista reorganized instead of liquidated. This is because of the company's scale and leading market position in its product categories, especially ammunition, and strong brand portfolio. Therefore, in evaluating recovery prospects for debtholders, we assume Vista continues as a going concern and arrive at our emergence enterprise value by applying a multiple to our assumed emergence EBITDA." Simulated default assumptions S&P's simulated default scenario assumes a payment default in 2025 caused by further deterioration in ammunition sales due to heightened regulations or political factors, or a material deterioration in operating performance because of a very weak economy and lower discretionary spending. A combination of these factors could reduce revenue and cash flow. Eventually, liquidity and capital resources become strained to the point it cannot continue to operate without an equity infusion or bankruptcy filing. Calculation of EBITDA at emergence: -- Debt service: $26.2 million (default year interest plus amortization) -- Capital expenditure: $20.4 million -- Default EBITDA proxy: $46.6 million -- Cyclicality adjustment: $2.3 million (5% of default EBITDA proxy for durables) -- Preliminary emergence EBITDA: $48.9 million -- Operational adjustment: $39.1 million (80%) -- Emergence EBITDA: $88 million S&P said, "Our emergence-level EBITDA of $88 million takes into consideration an 80% operational adjustment (to reflect some rebound in the ammunition market and cost-cutting efforts that improve margins) on top of default-level EBITDA. We estimate a gross valuation of $528 million, assuming a 6x EBITDA multiple." Simplified waterfall -- Emergence EBITDA: $88 million -- Multiple: 6x -- Gross recovery value: $528 million -- Net recovery value for waterfall after administrative expenses (5%): $501.6 million -- Obligor/nonobligor valuation split: 100%/0% -- Estimated priority ABL claims: $276.1 million -- Estimated senior unsecured claims: $357 million -- Value available for unsecured claims: $225.5 million --Recovery range: 50%-70% (rounded estimate: 60%) VISTA OUTDOOR: S&P Stays 'B+' Rating on Senior Unsecured Notes -------------------------------------------------------------- S&P Global Ratings said that its 'B+' issue-level rating on Vista Outdoor Inc.'s (B+/Positive/--) senior unsecured notes maturing 2029 is unchanged following an upsize of the amount to $500 million from $350 million. However, S&P is revising the recovery rating to '4' on the proposed upsized $500 million notes, indicating its expectation for average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default, from '3' on the previously proposed $350 million notes. All other terms, including the maturity date, are the same. Vista will use the proceeds to refinance its outstanding $350 million 5.875% senior unsecured notes due in 2023 and will deploy the additional $150 million of proceeds opportunistically. S&P will withdraw its existing issue level rating on the $350 million 5.875% senior unsecured notes due 2023 upon completion of the transaction. All its other ratings on the company, including the issuer credit rating, are unaffected. The upsized transaction will result in a net increase of approximately $150 million in debt and, pro forma for the transaction, leverage will increase to about 2.1x from about 1.6x for the 12 months ended Dec. 27, 2020. ISSUE RATINGS - RECOVERY ANALYSIS Key analytical factors The debt capital structure consists of: -- $450 million asset-based lending (ABL) facility due in 2023 (not rated), and. -- New $500 million senior unsecured notes due in 2029. Vista is a Delaware corporation, and substantially all assets and operations are in the U.S. In the event of payment default, S&P believes a bankruptcy protection filing would be in the U.S. under the administration of the U.S. Bankruptcy Court system, while entities abroad, if any, remain out of any insolvency proceedings with respect to local jurisdictions. S&P said, "We believe creditors would receive maximum recovery in a payment default scenario if Vista reorganized instead of liquidated. This is because of the company's scale and leading market position in its product categories, especially ammunition, and strong brand portfolio. Therefore, in evaluating recovery prospects for debtholders, we assume Vista continues as a going concern and arrive at our emergence enterprise value by applying a multiple to our assumed emergence EBITDA." Simulated default assumptions S&P's simulated default scenario assumes a payment default in 2025 caused by further deterioration in ammunition sales due to heightened regulations or political factors, or a material deterioration in operating performance because of a very weak economy and lower discretionary spending. A combination of these factors could reduce revenue and cash flow. Eventually, liquidity and capital resources become strained to the point it cannot continue to operate without an equity infusion or bankruptcy filing. Calculation of EBITDA at emergence: -- Debt service: $26.2 million (default year interest plus amortization) -- Capital expenditure: $20.4 million -- Default EBITDA proxy: $55.1 million -- Cyclicality adjustment: $2.7 million (5% of default EBITDA proxy for durables) -- Preliminary emergence EBITDA: $57.8 million -- Operational adjustment: $31.8 million (55%) -- Emergence EBITDA: $89.6 million S&P said, "Our emergence-level EBITDA of $89.6 million takes into consideration an 55% operational adjustment (to reflect some rebound in the ammunition market and cost-cutting efforts that improve margins) on top of default-level EBITDA. We estimate a gross valuation of $537.7 million, assuming a 6x EBITDA multiple." Simplified waterfall -- Emergence EBITDA: $89.6 million -- Multiple: 6x -- Gross recovery value: $537.7 million -- Net recovery value for waterfall after administrative expenses (5%): $510.8 million -- Obligor/nonobligor valuation split: 100%/0% -- Estimated priority ABL claims: $276.1 million -- Estimated senior unsecured claims: $511.3 million -- Value available for unsecured claims: $234.7 million --Recovery range: 30%-50% (rounded estimate: 45%) VMWARE INC: Fitch Affirms 'BB+' LT IDR & Alters Outlook to Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings for VMware, Inc., including the 'BB+' Long-Term Issuer Default Rating and 'BBB-'/'RR2' senior unsecured ratings. Fitch also revised the Rating Outlook to Stable from Negative. Fitch's actions affect $6 billion including the undrawn $1 billion revolving credit facility. The ratings and Outlook reflect VMware's solid operating and standalone financial profile, driven by strong adoption of VMware's as-a-service (aaS) solutions. Enterprise spending remained weak in fiscal 2021, but work-from-home (WFH) dynamics stemming from the coronavirus drove significant investments by service providers. VMware continues to outgrow open source providers and Fitch expects intermediate-term growth in the mid-single digits. Meanwhile, the company's acquisitions of Pivotal and Carbon Black added new capabilities in applications development and cloud security. Fitch expects VMware will sustain profitability in the mid-30%, as increasing scale in the VMware's services business will more than offset, normalizing operating expenses after the company took cost saving actions in the face of the coronavirus pandemic. FCF should remain strong at $2.5 billion to $3.0 billion annually, and Fitch believes it will be largely sufficient to fund share repurchases and tuck-in acquisitions, although the company's strong credit protection measures provide some headroom for incremental debt for larger acquisitions. KEY RATING DRIVERS Dell Ownership Risk: Dell Technologies Inc.'s ownership and voting control continues to weigh on VMware's credit profile, even as the companies evaluate a tax-free spinoff. Following the 2018 $11 billion special dividend, $9 billion of which used by Dell to consolidate the then existing VMware tracking stock, a spinoff would potentially include a VMware dividend sufficiently large enough to ensure both companies separate with investment-grade capital structures. The ownership structure supports the equalization of their IDRs despite Fitch's belief VMware otherwise would be rated at least three notches higher than Dell. Strong FCF Profile: High recurring maintenance revenue, strong profitability and low capital intensity should continue to support strong annual FCF with margins in the 20%-25% range. Fitch forecasts $2.5 billion to $3.0 billion of annual FCF, although Fitch anticipates cash from unearned revenue increases to moderate over time as the mix of subscription sales increases. Fitch expects VMware will use FCF for a combination of tuck-in acquisitions and share repurchases, although aggregate share repurchases and consideration for acquisitions could exceed cash flow in fiscal 2022 given subdued fiscal 2021 spending. Favorable Top-Line Drivers: Fitch believes secular demand from customers migrating to the hybrid cloud and VMware and Dell cross-selling a combined suite of offerings across a large and diversified customer base will continue driving solid, long-term revenue growth. Expansion into virtualized networking, software defined storage and management, via acquisitions, provide incremental customer penetration opportunities. The acquisitions of Pivotal and Carbon Black in fiscal 2020 expand and strengthen VMware's cloud business, adding a little over $1 billion of subscription revenue. Meaningful Investment Intensity: Fitch expects investment intensity will remain fixed at roughly 20% of revenue as R&D investment supports continued technology leadership, reflected by VMware's strong market leadership positions. Fitch also believes high R&D spending is required for cloud growth, particularly within the context of a shifting competitive landscape as VMware faces a more diversified set of competitors. These include off-premise compute resources with considerably greater resources and financial flexibility, including public cloud providers, Amazon Web Services and Azure. Solid Recovery: Fitch has notched the rating for the senior unsecured notes offering up one to 'BBB-'/'RR2' from VMware's IDR of 'BB+', given VMware's bondholders are structurally senior to Dell's bondholders with respect to VMware's assets. Fitch believes VMware's bondholders currently are well protected by the company's enterprise value, even assuming a distressed trading multiple. DERIVATION SUMMARY On a standalone basis, VMware's technology leadership, large and diversified installed customer base, and full suite of products and services should drive consistent positive long-term organic revenue growth and strong FCF support a strong investment grade rating. However, as a majority owned subsidiary of comparatively weaker Dell Technologies (BB+/Stable), Fitch derived the rating for VMware within the context of Fitch's parent-subsidiary linkage criteria and believes 'BB+' is appropriate, given the moderate to strong linkage between the two entities. Fitch believes the absence of restrictions on restricted payments and inter-company loans more than offset the lack of upstream guarantees and cross-default provisions or the existence of related party governance structures on the Boards of Directors at VMware. The company's 'BB+' rating mainly reflects Fitch's belief that VMware's linkage with parent, Dell Technologies Inc., is moderate and that governance mechanisms put in place at both VMware's and Dell's Boards of Directors encumber but are insufficient to prevent Dell from ultimately accessing VMware's assets in the absence of restrictions on restricted payments (RP) or inter-company loans. Fitch's Parent-Subsidiary Linkage Criteria govern the derivation of VMware's ratings, given Dell's 80.4 economic and 97.4% voting interests in VMware and consolidation of VMware's financial statements, despite Fitch's belief VMware would be rated three to four notches higher than Dell on a standalone basis. KEY ASSUMPTIONS -- Revenue grows by the mid-single digits, driven by continued momentum and services revenue offsetting declining license growth; -- Revenue slows to low- to mid-single digits by FY23; -- Profitability declines in FY22 from 36% operating EBITDA margins in FY21, driven by the normalization of operating expenses curtailed within the context of the pandemic and shifting mix to services business; -- Unearned Revenue is roughly flat with the growing number of ratable bookings; -- 3% capex to revenue beyond roughly $330 million in the current year; -- $1 billion of acquisitions annually through the forecast period, adding only modest revenue and profitability; -- FCF used for acquisitions and stock buybacks; -- Debt maturities are refinanced and company issues $1 billion of debt in FY22 to support acquisitions or stock buybacks. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Dell's ratings are upgraded, given Fitch's conclusion that Dell's and VMware's parent-subsidiary linkage is moderate; -- VMware explicitly ring fences its cash and cash flows by adding language to its credit agreement and indentures restricting payments and intercompany loans. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Dell's ratings are downgraded due to slower than expected deleveraging or erosion in operating results; -- Incremental permanent debt to fund shareholder returns or pay a dividend outpace profitability growth, resulting in expectations for total leverage sustained above 2.5x at VMware. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: Fitch believes VMware's liquidity remains adequate and, as of Oct. 30, 2020, was supported by $3.9 billion of cash and cash equivalents and an undrawn $1 billion revolving credit facility expiring on Sept. 12, 2022. Fitch's expectation for $2.5 billion to $3.0 billion of annual FCF also supports liquidity. ESG CONSIDERATIONS VMware, Inc. has an ESG Relevance Score of 4 for Governance Structure due to Dell Technologies, Inc.'s ownership concentration, which has a negative impact on VMware's credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. VOYAGER AVIATION: Moody's Cuts CFR to Caa1, Put on Further Review ----------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family and long-term senior unsecured ratings of Voyager Aviation Holdings, LLC, to Caa1 and Caa3, respectively, from B3 and Caa2, respectively. The ratings were also placed on review for further downgrade. These rating actions follow Voyager's announcement that it has reached an agreement in principle with holders of more than a majority of its 8.5% senior notes due August 2021 and holders of 100% of its equity to commence a debt restructuring. Downgrades: Issuer: Voyager Aviation Holdings, LLC Corporate Family Rating, Downgraded to Caa1 from B3; Placed Under Review for further Downgrade Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 from Caa2; Placed Under Review for further Downgrade Outlook Actions: Issuer: Voyager Aviation Holdings, LLC Outlook, Changed To Rating Under Review From Negative RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's downgrade of Voyager's ratings reflects the increased probability that the firm's restructuring of its $415 million senior unsecured notes due August 2021 could be a distressed exchange under Moody's definition, which could result in material losses to existing holders of the notes. The ratings were also placed on review for further downgrade pending disclosure of the terms of the debt restructuring, which Moody's expects will provide additional clarity regarding the specific effects of the restructuring on noteholders. Voyager management has reported since last year that it is pursuing various alternatives to enhance the company's cash position and either repay or refinance the August senior notes maturity. Most of Voyager's funding is provided by amortizing non-recourse secured debt whose debt service is supported by the cash flows generated by pledged aircraft and associated leases. However, the company's small fleet of 18 aircraft, the collateral pledge of all of its aircraft, as well as lenders' shift to more conservative loan underwriting in the current weakened operating environment has limited Voyager's ability to generate sufficient funds to repay the senior notes at maturity. Unlike higher rated aircraft leasing companies, Voyager has no committed back-up line of credit to cover liquidity contingencies. However, apart from the upcoming debt maturity, Moody's estimates that Voyager has sufficient cash liquidity on hand to conduct its business activities. Voyager's ratings reflect the company's small competitive scale compared to rated peers, higher aircraft and airline lessee concentrations, and limited alternate liquidity but also the relatively low average age and long average remaining lease term of the company's aircraft fleet and the stronger average credit quality of the company's airline customers. A high percentage of Voyager's customers are "flag" carriers that have received capital support and should better endure the downturn in air travel compared to weaker competitors. However, the company continues to work with a certain airline customer whose rental payments are in arrears, representing a material proportion of Voyager's revenues. Moody's regards the coronavirus outbreak as a social risk under its environmental, social and governance (ESG) framework, given the substantial implications for public health and safety. The rating action reflect the negative effects on Voyager of the breadth and severity of the shock, and the deterioration in credit quality, profitability, capital and liquidity it has triggered. The ratings could be confirmed upon completion of the review if the company demonstrates that it has sufficient liquidity to repay its August 2021 senior notes, as well as meet other operating and financial liquidity requirements over the outlook horizon, and generates positive operating cash flow. Moody's could further downgrade Voyager's ratings upon completion of the review if the company: 1) is not able to refinance or accumulate sufficient funds to repay its August 2021 $415 million senior notes or imposes losses on noteholders associated with its debt restructuring; 2) significantly increases its debt-to-tangible net worth ratio; or 3) experiences deteriorating operating prospects including from a disruption in air travel and weakening of airline credit quality. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. VOYAGER AVIATION: S&P Cuts ICR to 'CCC-' on Restructuring Plans --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on aircraft operating lessor Voyager Aviation Holdings LLC to 'CCC-' from 'CCC' and its issue-level rating on its senior unsecured notes to 'C' from 'CC'. S&P's recovery rating on the notes remains '6'. At the same time, S&P is placing all its ratings on the company on CreditWatch with negative implications. The CreditWatch placement reflects the likelihood of a further downgrade to 'CC' if, when terms of the restructuring are available, it conclude they will be equivalent to a distressed exchange and tantamount to default when implemented. The downgrade follows Voyager's announcement that it intends to restructure its debt. On Feb. 17, 2021, Voyager announced that it has reached an agreement in principle with a majority of its bondholders and all its equity holders to commence a debt restructuring transaction. The company now has only about six months until its $415 million of senior unsecured notes mature on Aug. 15, 2021. Unlike most other rated aircraft lessors, which have substantial unencumbered assets, access to credit facilities, and have recently raised large amounts of unsecured debt, Voyager does not have unencumbered assets or access to any credit facilities. Therefore, while details of the proposed restructuring are not yet available, S&P believes the nearing maturity and limited access to other refinancing options would incentivize the company's debtholders to accept terms that its would characterize as distressed and tantamount to default. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety S&P Global Ratings believes there remains high, albeit moderating, uncertainty about the evolution of the coronavirus pandemic and its economic effects. Vaccine production is ramping up and rollouts are gathering pace around the world. Widespread immunization, which will help pave the way for a return to more normal levels of social and economic activity, looks to be achievable by most developed economies by the end of the third quarter. However, some emerging markets may only be able to achieve widespread immunization by year-end or later. S&P said, "We use these assumptions about vaccine timing in assessing the economic and credit implications associated with the pandemic. As the situation evolves, we will update our assumptions and estimates accordingly." CreditWatch S&P said, "The negative CreditWatch placement reflects the likelihood of a further downgrade to 'CC' if we characterize the terms of the proposed restructuring as equivalent to a distressed exchange and tantamount to default. In that event, we would then lower the rating to 'SD' (selective default) when the restructuring is completed." WALKER RADIO: Gets OK to Hire Media Services Group as Broker ------------------------------------------------------------ Walker Radio Group, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Media Services Group, Inc. as its broker. The firm will assist the Debtor in selling all of its assets, which comprise the KRBL radio station. The firm will receive a commission equal to 6 percent of total consideration of the sale. Media Services is a "disinterested person" within the meaning of Section 101(14), according to court filings. The firm can be reached through: William L. Whitley Media Services Group, Inc. 1131 Rockingham Drive #209 Richardson, TX 75080 Phone: 972-231-4500 Fax: 972-231-4509 Email: whitley@mediaservicesgroup.com About Walker Radio Group Walker Radio Group, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 20-50234) on Dec. 9, 2020. At the time of the filing, the Debtor had estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. Judge Robert L. Jones oversees the case. The Debtor tapped Mullin Hoard & Brown, LLP as its legal counsel and Howard, Cunningham, Houchin & Turner, LLP as its accountant. WASHINGTON MUTUAL: Griffin Objection Overrule Affirmed by 3rd Cir. ------------------------------------------------------------------ The United States Court of Appeals, Third Circuit, will affirm the ruling of the U.S. District Court for the District of Delaware, which in turn, affirmed the U.S. Bankruptcy Court for the District of Delaware's overruling of an objection filed by Alice Griffin. Alice Griffin was a holder of Washington Mutual, Inc. preferred stock, whose shares were cancelled pursuant to WMI's 2012 plan of reorganization. Under the plan, Griffin and other preferred shareholders became members of "Class 19," the plan's "Preferred Equity Interest" class. In 2019, Griffin objected to a settlement that diluted her interests in Class 19. That settlement, negotiated by the appellee Liquidating Trust in 2013, allowed a disputed $72 million claim brought by certain securities underwriters. The Bankruptcy Court overruled Griffin's objection. On appeal, the District Court affirmed. Griffin now appeals a second time, alleging multiple errors. "The Bankruptcy Court overruled Griffin's objection on two grounds. It stated first: 'I believe that the equitable doctrine of laches precludes this objection from being prosecuted at this time,' i.e., six years after the settlement. Second, it explained that even if laches did not apply, Griffin's objection failed on the merits because 'th[e] settlement was not in bad faith, was not a breach of fiduciary duty, but really was a proper exercise of the liquidating trust[`s] obligation under the trust agreement.' The District Court affirmed on the second ground, noting that 'the Bankruptcy Court's decision adequately rests on its approval of the merits of the settlement'... Griffin contends this was error. In her view, laches was 'the sole basis' for the Bankruptcy Court's decision and 'the District Court was required to review [it].' We disagree. Where 'two independent reasons support a decision, neither can be considered obiter dictum; each represents a valid holding of the court.' Here, the Bankruptcy Court analyzed the merits at length. It considered the four factors this Court has identified as governing the approval of settlements in bankruptcy. It concluded that 'all those factors support approval of the final settlement by a liquidating trustee.' The Bankruptcy Court then stated that if the settlement had been submitted for approval, it 'would have approved it.' Griffin cannot credibly dismiss these conclusions as judicial 'musings.' The record demonstrates that they were rather 'independent reasons support[ing] [the] decision.' Accordingly, it was 'a valid holding' of the Bankruptcy Court that Griffin's objection failed on the merits," said the Court. "'[T]he ultimate issue on appeal is whether the [B]ankruptcy [C]ourt abused its discretion when it []approved the compromise' between the Trust and the underwriters. That compromise did two things. First, it disallowed from Class 18 (ahead of Griffin) a $24 million indemnification claim related to the underwriting of WMI debt securities. Second, it allowed in Class 19 (Griffin's class) a $72 million indemnification claim related to the underwriting of WMI equity securities. In considering whether to approve this settlement, the Bankruptcy Court was required 'to assess and balance the value of the claim[s] . . . being compromised against the value to the estate of the acceptance of the compromise proposal.' Four factors guide this assessment: '(1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (4) the paramount interest of the creditors.' We find no abuse of discretion in the Bankruptcy Court's consideration of these factors, and we agree they favor approval of the settlement," the Court held. The case is In re: WASHINGTON MUTUAL, INC., et al., Debtors. ALICE GRIFFIN, Appellant, Case No. 20-1725 (3rd Cir.). A full-text copy of the Opinion, dated February 11, 2021, is available at https://tinyurl.com/3hf4vg8m from Leagle.com. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owned 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu was represented in the Chapter 11 case by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represented the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represented the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represented JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. As reported in the Troubled Company Reporter on March 21, 2012, the Debtors disclosed that their Seventh Amended Joint Plan of Affiliated Debtors, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the Chapter 11 restructuring process. WASHINGTON PRIME: Fitch Lowers LongTerm IDR to 'C' -------------------------------------------------- Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDRs) of Washington Prime Group, Inc. and Washington Prime Group, L.P. (collectively WPG) to 'C' from 'CC'. Fitch has also downgraded WPG's senior secured revolver and terms loans to 'CCC-'/'RR2' from 'CCC'/'RR2' and the senior unsecured notes to 'C'/'RR4' from 'CC'/'RR4'. The downgrades reflect WPG's announcement of its election to not make the required interest payment on its 6.45% senior unsecured notes due 2024 and the consequent 30-day grace period before nonpayment constitutes an event of default under the indenture governing this instrument. KEY RATING DRIVERS Eroding Cash Flows: Fitch expects WPG's operating performance to deteriorate further in the near term. Operating performance has been diminished by negative retailer trends, specifically department store anchor closures and bankruptcies within the company's mall portfolio that have induced incremental occupancy and rental income losses through co-tenancy clauses. Weak Relative Capital Access: WPG's access to capital has been limited to its revolving bank credit facility, which was effectively fully drawn during 2Q20. Fitch believed the company's open-air unencumbered pool had material value, but the pool remaining after the waiver is unlikely to garner significant interest from third-party capital. Fitch does not expect lenders to have a significant appetite for retail real estate that does not have a significant grocer component or other essential use. Fitch anticipates operating performance deterioration will necessitate a debt exchange or bankruptcy event prior to the maturity of its credit facility in December 2022. Recovery Ratings: Fitch's recovery analysis assumes WPG would be considered a going concern in bankruptcy and the company would be reorganized rather than liquidated. Fitch determines a post-reorganization NOI produced by the following three segments of operating real estate to determine the recoverable value attributable to the associated debt obligations: NOI encumbered by 75% of credit facility; asset-level encumbered NOI (mortgage debt); remaining unencumbered NOI (25% of credit facility, unsecured bond and deficiency claims). Stressed capitalization rates are individually applied to the post-reorganization NOI produced by each assets type (Tier I malls, Tier II/noncore malls, open air) to determine the estimated recoverable value of each segment of the operating real estate portfolio. The capitalization rates are based on views of asset quality and current market conditions plus an additional stress to reflect further downside risk in the real estate portfolio. The stressed cap rates applied to each asset tier are as follows: Tier I malls, 20.0%; Tier II and noncore malls, 30.4%; open-air centers, 11.0%. Restricted cash and mortgage escrows are assigned to mortgaged assets. Discounted book value of equity in UJV interest, construction in progress and tenant receivables are added to the gross recoverable value of unencumbered assets. Administrative costs of 10% are taken from each subset of gross recoverable value before being applied to the outstanding debt balance. Fitch assumes WPG's $650 million revolving credit facility is fully drawn in a bankruptcy scenario, and includes that amount in the claims waterfall. Any amount not recovered by the secured credit facility claim is considered a deficiency claim and added to existing unsecured claims to share in the net recoverable value of the unencumbered portfolio and non-operating assets on a pro rata basis. The distribution of value yields a recovery ranked in the 'RR2' category for the senior secured revolver and term loans based on Fitch's expectation of recovery for the obligations in the 71%-90% range, the 'RR4' category for the senior unsecured bonds based on recovery in the 31%-50% range, and the 'RR6' category for the preferred stock based on recovery in the 0%-10% range. Under Fitch's Recovery Criteria, these recoveries result in notching two levels above the IDR for the secured revolver and term loans to 'CCC-', and notching level with the IDR at 'C' for the unsecured bond and preferred stock. DERIVATION SUMMARY WPG's relative levels of occupancy, SSNOI growth, leasing spreads and tenant sales productivity in its consolidated mall portfolio are considerably weaker than A-mall REIT peers. WPG's open-air retail assets have generally performed well based on reported occupancy levels and SSNOI growth. WPG exhibited some capital access prior to the pandemic, but Fitch believes the company now has limited to no options to access external capital following the collateralization of its credit facility. KEY ASSUMPTIONS -- Further occupancy loss in fiscal 2021 (Tier I and open-air assets) due to ramp up of cotenancy clause activation as closures of department stores continue to accelerate (e.g. Macy's, J.C. Penney); -- Mortgage refinancing requires partial principal reduction or additional contingencies in many cases as lending continues to retreat from the mall property type. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Resolution of the interest nonpayment within the grace period, without the uses of a distressed debt exchange (DDE). Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Commencement of a DDE; -- Announcement that the issuer entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or otherwise ceased business. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Fitch estimates WPG's sources of liquidity are insufficient to cover its uses through fiscal 2021. WPG's credit facility amendment requires a minimum cash balance on hand of $65 million, inclusive of the company's shares of unconsolidated joint venture cash, limiting the flexibility of its cash balance that stood at more than $112 million as of Sept. 30, 2020. Remaining availability under its $650 million revolver is only $3 million. Capex has become nondiscretionary as the company combats the loss of competitive positioning of its asset base, and these costs will demand the vast majority of the company's deteriorating operating cash flow. Fitch believes the maturing mortgage debt for assets that are not returned to lenders will require some form of capital commitment or principal paydown to extend the maturity even in short-term increments, such as 12-month extensions. Fitch defines liquidity coverage as sources of liquidity divided by uses of liquidity. Sources include unrestricted cash, availability under revolving credit facility and retained cash flow from operating activities after dividends. Uses include pro rata debt maturities, expected recurring capex and forecast (re)development costs. 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. WELDED CONSTRUCTION: Court Orders Production of 196 Documents ------------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware denied the Motion for Clarification/Reconsideration of Order Granting Welded's Motion to Compel Production of Audit Documents filed by Defendants The Williams Companies, Inc., Williams Partners Operating LLC, and Transcontinental Gas Pipe Line Company, LLC. In April 2018, Transco retained consultant Oil and Gas Contracts Services ("OGCS") to perform an audit of Welded Construction, L.P.'s invoices to Transco in connection with the Atlantic Sunrise Project. Beginning June 29, 2018, the Audit was directed by in-house and outside counsel for Defendants in anticipation of litigation. Litigation commenced on October 5, 2018, when Defendants filed a complaint in the United States District Court for the Northern District of Oklahoma. Welded's bankruptcy petition was filed shortly thereafter, on October 18, 2018. On January 31, 2019, OGCS issued the Audit Report to Defendants' attorneys, analyzing Welded's invoices through August 2018. As Welded had not yet submitted its invoices for either September or October 2018, the Audit Report provided only estimates for those months. OGCS was provided with Welded's September and October 2018 true-up invoices on March 27, 2019, and the revised versions of those invoices on May 23, 2019. On June 9, 2019, the Audit was complete and the Defendants' attorneys were given an update to the Audit Findings, which included the September and October 2018 true-up invoices. On October 28, 2019, Welded filed its Motion for Partial Summary Judgment. In opposition to the Summary Judgment Motion, Defendants submitted, among other things, the Declaration of Phil Burke of OGCS, where Mr. Burke discussed the Audit at length. On June 8, 2020, the Court issued its Opinion, denying the Summary Judgment Motion. On January 8, 2020, after completion of briefing on the Summary Judgment Motion and submission of the 2019 Burke Declaration, Welded served Defendants with document requests, seeking documents pertaining to the Audit. On March 16, 2020, Welded served OGCS with a subpoena, seeking documents pertaining to the Audit. In response to Welded's discovery requests, and in reliance on Defendants' attorneys' direction of the Audit in anticipation of litigation, Defendants objected to and withheld from production responsive documents that were in the Defendants and OGCS' custody from June 29, 2018 and thereafter. Defendants and OGCS, however, produced the non-privileged documents responsive to Welded's written discovery for the period prior to June 29, 2018. On July 27, 2020, Welded filed Welded's Motion to Compel Production of Audit Documents. Throughout the Motion to Compel, Welded argued its right to discovery in connection with the substance, findings and conclusions of the Audit. Defendants opposed the Motion to Compel on the grounds that, among other things, the materials sought were protected by the attorney-client privilege and work product doctrine, Defendants did not waive those protections, and Welded did not make the showing required by Fed. R. Civ. P. 26(b)(3). On September 9, 2020, the Court granted Welded's Motion to Compel. In so ruling, the Court cited its reliance on the 2019 Burke Declaration, which contained a detailed exhibit identifying the 'true up' amounts owed as concluded by the Audit. The Court identified Defendants' reliance on the "Audit's conclusions" as set forth in the 2019 Burke Declaration as grounds for granting the motion to compel and ordering production of "the underlying documents." In October 2020, Defendants and OGCS produced to Welded 2,534 documents previously retained as protected by the attorney-client privilege and/or the work product doctrine. However, Defendants retained 196 documents on grounds that they constitute "Opinion Work Product," which are afforded almost absolute protection from discovery — even in the context of an implied waiver — and were not, in Defendants' minds, covered by the Order Compelling Production. In the Reconsideration Motion, Defendants are seeking clarification and a ruling from the Court that the 196 documents constitute protected Opinion Work Product. "Here, there is no change in intervening law and no new evidence. Although not explicit (in fact, Defendants never discuss the controlling standard governing their request in the Reconsideration Motion), Defendants allege that there would be manifest injustice if the Opinion Work Product is produced. However, the underlying issue of the work product doctrine is not new. Furthermore, Defendants are raising an argument they could and should have raised in response to the Motion to Compel, in which Welded specifically requested production of documents containing the 'mental impressions, opinions, and theories of counsel.' Moreover, this issue was considered and rejected in the Motion to Compel... the Court found: that 'the Defendants have complete[ly] waived the protection of the attorney client privilege and work product doctrine in connection with the Audit.' The Court then ordered that '[t]he Defendants shall produce and instruct OGCS to produce, without redaction, all documents related to the Audit,'" Judge Sontchi explains. "While the Court believes that its prior ruling clearly included Opinion Work Product and required its production, it will, nonetheless, specifically address the issue here. Rule 26(b)(3) of the Federal Rules of Civil Procedure establishes two tiers of protection: first, work prepared in anticipation of litigation by an attorney or his agent is discoverable only upon a showing of need and hardship; second, 'core' or 'opinion' work product that encompasses the 'mental impressions, conclusions, opinion, or legal theories of an attorney or other representative of a party concerning the litigation' is 'generally a!orded near absolute protection from discovery'... Here, Defendants substantially relied on the Audit in representations to Welded and the Court. Defendants have asserted that the Audit 'revealed wrongdoing' and repeatedly sought specific relief because of the Audit, including through the Oklahoma Complaint, Transco's proof of claim... Transco's counterclaims, the 2019 Burke Declaration, and the Defendant's summary judgment response. Defendants also repeatedly represented to Welded and the Court that the Audit was independent. In other words, Defendants cannot disclose as much as the Audit as it pleases and then claim privilege to the rest," he explains further. "Defendants hired OGCS to audit and to investigate Welded billing practices in anticipation of litigation. OGCS's sole role was to investigate and to perform an audit. Furthermore, Defendants used the Audit to make allegations, claims and defenses (including through the Oklahoma Complaint, the Proof of Claim, Transco's counterclaims, the 2019 Burke Declaration, and the Defendant's summary judgment response)... Defendants cannot use OGCS's report as both a sword and a shield — Defendants cannot place the Audit at issue and claim that the Audit 'revealed wrongdoing' and then not give Welded the requisite information to test the validity of those statements," Judge Sontchi held. He ordered the Defendants to produce the 196 documents that were held back as "Opinion Work Product" within 14 days from the issuance of his Order. The case is IN RE: WELDED CONSTRUCTION, L.P., Chapter 11, et al., Debtors. WELDED CONSTRUCTION, L.P., Plaintiffs, v. THE WILLIAMS COMPANIES, INC., WILLIAMS PARTNERS OPERATING LLC, and TRANSCONTINENTAL GAS PIPE LINE COMPANY, LLC, Defendants, Case No. 18-12378 CSS, Adv. Pro. No. 19-50194 (CSS) (Bankr. D. Del.). A full-text copy of the Memorandum Order, dated February 15, 2021, is available at https://tinyurl.com/2kzmts63 from Leagle.com. About Welded Construction Perrysburg, Ohio-based Welded Construction, L.P., is a mainline pipeline construction contractor capable of executing pipeline construction projects in lengths ranging from a few hundred feet to over 200 miles. Welded Construction, L.P., and Welded Construction Michigan, LLC, sought bankruptcy protection on Oct. 22, 2018 (Bankr. D. Del. Lead Case No. 18-12378). The jointly administered cases are pending before Judge Kevin Gross. The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel; and Kurtzman Carson Consultants LLC as claims and noticing agent and administrative advisor. The Debtors also tapped Zolfo Cooper Management, LLC and the firm's managing director Frank Pometti who will serve as their chief restructuring officer. An official committee of unsecured creditors was appointed on Oct. 30, 2018. The committee tapped Blank Rome LLP as its legal counsel and Teneo Capital LLC as its investment banker and financial advisor. WINDSTREAM HOLDINGS: Too Late to Revisit Vendor Pay, Court Rules ---------------------------------------------------------------- Law360 reports that the Second Circuit has ruled it's too late for a Windstream Holdings creditor to challenge a judge's approval of vendor payments in the cable provider's Chapter 11 case, saying revisiting the decision would put tens of millions of dollars in already-paid claims into question. In an unpublished opinion Thursday, February 18, 2021, the panel found that waste management contractor GLM DFW Inc.'s argument the bankruptcy judge should have taken a much closer look at Windstream's request to make priority payments of more than $184 million in vendor claims was equitably moot, given that the company's bankruptcy plan was approved eight months ago, June 2020. About Windstream Holdings Windstream Holdings, Inc., and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as its financial advisor, and Perella Weinberg Partners LP as investment banker. WOODMONT 2017-2: S&P Assigns Prelim BB(sf) Rating on Cl. E-R Notes ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary ratings to the class A-1-R, A-2-R, B-R, C-R, D-R, and E-R replacement notes from Woodmont 2017-2 Trust, a collateralized loan obligation (CLO) originally issued in 2017 that is managed by MidCap Financial Services Capital Management LLC. The replacement notes will be issued via a proposed supplemental indenture. The preliminary ratings reflect S&P's opinion that the credit support available is commensurate with the associated rating levels. The preliminary ratings are based on information as of Feb. 18, 2020. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. On the March 10, 2021, refinancing date, the proceeds from the issuance of the replacement notes are expected to redeem the original notes. S&P said, "At that time, we anticipate withdrawing the ratings on the original notes and assigning ratings to the replacement notes. However, if the refinancing doesn't occur, we may affirm the ratings on the original notes and withdraw our preliminary ratings on the replacement notes." The replacement notes are being issued via a proposed conforming indenture, which, in addition to outlining the terms of the replacement notes, will also: -- Issue the replacement class A-1-R, A-2-R, B-R, C-R, and D-R notes at a lower spread than the original notes; -- Extend the stated maturity, reinvestment period, and non-call period by about 4.75, 3.75, and 1.75 years; and -- Added workout loan-related concepts in line with recent Woodmont Trust CLOs. S&P said, "Our review of this transaction included a cash flow analysis, based on the portfolio and transaction as reflected in the trustee report, to estimate future performance. In line with our criteria, our cash flow scenarios applied forward-looking assumptions on the expected timing and pattern of defaults, and recoveries upon default, under various interest rate and macroeconomic scenarios. In addition, our analysis considered the transaction's ability to pay timely interest or ultimate principal, or both, to each of the rated tranches. "We will continue to review whether, in our view, the ratings assigned to the notes remain consistent with the credit enhancement available to support them, and we will take further rating actions as we deem necessary." Preliminary Ratings Assigned Woodmont 2017-2 Trust Replacement class A-1-R, $696.00 million: AAA (sf) Replacement class A-2-R, $24.00 million: AAA (sf) Replacement class B-R, $96.50 million: AA (sf) Replacement class C-R (deferrable), $96.00 million: A (sf) Replacement class D-R (deferrable), $72.00 million: BBB (sf) Replacement class E-R (deferrable), $59.00 million: BB (sf) Subordinated notes. $162.20 million: Not rated WORLD ACCEPTANCE: S&P Upgrades ICR to 'B', Outlook Stable --------------------------------------------------------- S&P Global Ratings upgraded World Acceptance Corp.'s issuer credit rating to 'B' from 'B-'. The outlook is stable. World Acceptance's operating performance has benefitted from strong fiscal stimulus and a decline in portfolio mix of newer customers. As of Dec. 31, 2020, the company's year-to-date charge-off rate declined to 14.7% from 17.1% the year prior, and its provision for credit losses as a percentage of revenue declined to 21.3% from 35%. Further, the company was able to amend the covenants on its revolving credit facility, which has substantially improved its covenant cushions, specifically its fixed-charge coverage ratio, which must be at least 275% and is now over 310%. Leverage has increased to 1.7x debt to adjusted total equity as of Dec. 31, 2020, up from 1.3x as of March 31, 2020. The company significantly increased debt in the period, primarily using the proceeds to repurchase equity. In the second quarter of fiscal 2020, the company was able resolve an investigation into a potential violation of the foreign corrupt practices act (FCPA) related to its Mexico operations by paying $21.7 million in disgorgement, prejudgment interest, and civil penalties. The company no longer maintains operations in Mexico. However, it still has significant regulatory risk both from a federal and state level in the U.S. Given new leadership at the Consumer Financial Protection Bureau, new directives could impact some of World Acceptance's installment loans. Further, on a state level, there is a proposal for a 36% interest rate cap in Illinois--the state currently makes up approximately 6% of the company's revenue, and the approximate average interest rate for those loans is 60%. S&P said, "The stable outlook reflects our expectation that over the next 12 months World Acceptance will maintain leverage as measured by debt to adjusted total equity between 1.5x-2.0x. Our base-case expectation is that the company continues to operate with charge-offs well below 18% and that the company maintains adequate covenant cushions. "We could downgrade the company if operating or credit performance deteriorates, if the company' covenant cushions erode, or if leverage increases substantially above our base-case expectations. We could also downgrade the company if regulatory issues materially affect the company's ability to operate. "We believe an upgrade is unlikely at this time. Over the longer term, we could upgrade the company if it is able to materially lessen its regulatory risk, or if the company is able to meaningfully diversify its funding sources." YC ATLANTA: Seeks to Hire GGG Partners as Financial Advisor ----------------------------------------------------------- YC Atlanta Hotel LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to hire GGG Partners, LLC as its financial advisor. The firm's services include: (a) assisting with the preparation of cash flow forecasts and the continuous monitoring of the cash position, cash collateral usage, and projected liquidity of the Debtor's business; (b) assisting the Debtor and its bankruptcy counsel with matters relating to the Debtor's bankruptcy, including, without limitation, attendance at court hearings, assistance with the preparation of the Debtor's plan of reorganization, negotiation of plan provisions with creditors, preparation of detailed projections in support of the plan, and provision of expert testimony; (c) being available to the Debtor to address other matters relating to the operation and reorganization of its business as requested by its counsel or management; and (d) other financial advisory services. GGG Partners will be paid at these rates: Richard Gaudet, Partner $390 per hour Jessica Peterson, Partner $350 per hour The firm will receive a retainer in the amount of $5,000. Richard Gaudet, a partner at GGG Partners, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. GGG Partners can be reached at: Richard Gaudet GGG Partners, LLC 3155 Roswell Rd NE Suite 120 Atlanta, GA 30305 Tel: (404) 256-0003 Mobile: (404) 680-7032 Email: rgaudet@gggmgt.com About YC Atlanta Hotel YC Atlanta Hotel, LLC, a hotel owner and operator in College Park, Ga., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-50964) on Feb. 3, 2021. Baldev Johal, managing member, signed the petition. At the time of the filing, the Debtor had estimated assets of between $1,000,001 and $10,000,000 and liabilities of between $10,000,001 and $50,000,000. David L. Bury, Jr., Esq., at Stone & Baxer, LLP is the Debtor's legal counsel. YC ATLANTA: Seeks to Hire Stone & Baxter as Legal Counsel --------------------------------------------------------- YC Atlanta Hotel LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to hire Stone & Baxter, LLP as its legal counsel. The firm will render these services: a. give the Debtor legal advice with respect to its powers and duties in the continued operation of its business and management of its assets; b. prepare legal papers; c. continue existing litigation, if any, to which the Debtor may be a party and conduct examinations incidental to the administration of the Debtor's estate; d. take necessary actions for the proper preservation and administration of the estate; e. assist the Debtor in the preparation and filing of its statement of financial affairs and schedules; f. take necessary actions with respect to the use by the Debtor of its property pledged as collateral, including cash collateral, if any; g. prosecute all claims the Debtor has against others; h. perform all other legal services for the Debtor in connection with its Chapter 11 case. The firm's standard rates for its attorneys range between $200 and $525 per hour. Paralegals and research assistants charge $135 per hour. David Bury Jr., Esq., a partner at Stone & Baxter, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ward Stone, Jr., Esq. David L. Bury, Jr., Esq. Matthew S. Cathey, Esq. Stone & Baxter, LLP Suite 800, Fickling & Co. Bulding 577 Mulberry Street Macon, GA 31201-8256 Telephone: (478) 750-9898 Facsimile: (478) 750-9899 Email: wstone@stoneandbaxter.com dbury@stoneandbaxter.com mcathey@stoneandbaxter.com About YC Atlanta Hotel YC Atlanta Hotel, LLC, a hotel owner and operator in College Park, Ga., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-50964) on Feb. 3, 2021. Baldev Johal, managing member, signed the petition. At the time of the filing, the Debtor had estimated assets of between $1,000,001 and $10,000,000 and liabilities of between $10,000,001 and $50,000,000. David L. Bury, Jr., Esq., at Stone & Baxer, LLP is the Debtor's legal counsel. YOUFIT HEALTH CLUBS: New CEO Vahaly Takes Helm ---------------------------------------------- YouFit Health Clubs, known nationwide for its affordable memberships and state-of-the-art fitness equipment, has laid the groundwork for a successful 2021, with new leadership and ownership poised to take the company to the next level. The national fitness chain has recently gone through a Chapter 11 financial restructuring and is now owned by a group of investors, including majority shareholders Birch Grove Capital. YouFit also announced a new CEO, Brian Vahaly. Vahaly recently served as the CFO of strength training-focused [solidcore], with a background in private equity and early-stage venture capital. "I could not be more excited and honored to lead YouFit," said new CEO Brian Vahaly. "At its core, this club is about our loyal members, and they are going to see a lot of positive changes at this company. The gym landscape has changed over the last few months, and we look forward to welcoming customers back into the new YouFit." In November, due to the unprecedented challenges of the ongoing pandemic, YouFit Health Clubs made the decision to restructure the company through a bankruptcy filing so it could continue operating and serving its loyal clients. With its new leadership and ownership, the company is on track for a strong future. "This has always been a great gym at a great price. And now, we have plans to improve our service and offerings even more. There are some positive changes coming. We are inspired and committed to helping our members live healthy, active lives," said Vahaly. YouFit has 80 health clubs throughout the country. All locations are enforcing strict health and safety protocols (including those mandated by local and state governments) to protect members during the pandemic. For more information about the measures YouFit is taking to keep members healthy, visit https://www.YouFit.com/blog/YouFit-safety-measures. About YouFit Health Clubs YouFit Health Clubs, LLC, and its affiliates own and operate 85 fitness clubs in the states of Alabama, Arizona, Florida, Georgia, Louisiana, Maryland, Pennsylvania, Rhode Island, Texas, and Virginia. Visit https://www.youfit.com/ for more information. On Nov. 9, 2020, YouFit Health Clubs and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12841). YouFit was estimated to have $50 million to $100 million in assets and $100 million to $500 million in liabilities as of the filing. The Hon. Mary F. Walrath is the case judge. The Debtors tapped Greenberg Traurig LLP as its bankruptcy counsel, FocalPoint Securities LLC as investment banker, Red Banyan Group LLC as communications consultant, and Hilco Real Estate LLC as real estate advisor. Donlin Recano & Company Inc. is the claims agent. On Nov. 18, 2020, the U.S. Trustee for Region 3 appointed a committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Berger Singerman LLP and Pachulski Stang Ziehl & Jones LLP as its legal counsel, and Dundon Advisers LLC as its financial advisor. ZAYO GROUP: S&P Affirms 'B' First-Lien Debt Rating on Loan Add-On ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issue-level rating on Boulder, Colo.-based fiber infrastructure provider Zayo Group Holdings Inc.'s first-lien debt following the company's proposed $205 million add-on to its $4.75 billion term loan B due 2027. The '3' recovery rating is unchanged, indicating S&P's expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. S&P said, "We expect the company to use the $205 million of proceeds from the add-on to redeem $202 million of legacy senior unsecured notes that remain outstanding. Because the company is refinancing its unsecured notes with secured debt, we are revising the rounded recovery estimate on the first-lien debt to 50% from 55%. "In addition, we are lowering our default valuation of Zayo to $4.2 billion from $4.6 billion, primarily due to the sale of its zColo data center collocation business, which was completed in December 2020. Despite the lower valuation, our issue-level and recovery ratings are the same due to $495 million in first-lien debt repayment, which was completed in conjunction with the sale. "Our 'B' issuer credit rating and stable rating outlook on the company are unaffected. We expect adjusted leverage will decrease to the low-6x area from about 6.5x pro forma the sale of the zColo business on modest EBITDA growth, providing some cushion against our 7x downgrade threshold." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated scenario contemplates a default due to speculative capital spending for expansion combined with economic pressure that leads to increased customer churn. S&P believes this decline in operating results would result in a payment default at the point the company's liquidity and cash flow would be insufficient to cover cash interest expenses, mandatory debt amortization, and maintenance-level capital spending requirements. -- S&P has valued the company on a going-concern basis using a 6x multiple of our projected emergence-level EBITDA of $700 million. The 6x multiple (at the high end of the 5x-6x range we ascribe to telecommunication companies) reflects that if Zayo were to default, there would continue to be a viable business model, reflecting its good scale and nationwide network that allow it to compete for multi-region opportunities. The company also benefits from its recurring revenue business model, with high margins in the mid-50% area, multiyear contracts, and sizable contractual revenue backlog, which provide good cash flow visibility. As a result, lenders would achieve the greatest recovery value through reorganization rather than liquidation. -- Other default assumptions include the $750 million revolver being 85% drawn and that all debt includes six months of prepetition interest. Simulated default and valuation assumptions: -- Simulated year of default: 2024 -- EBITDA at emergence: $700 million -- EBITDA multiple: 6x -- Gross enterprise value: $4.2 billion Simplified waterfall: -- Net enterprise value (after 5% administrative costs): $4.0 billion -- Valuation split (obligors/nonobligors): 85%/15% -- Collateral value available to secured creditors: $3.8 billion -- Secured debt: $7.5 billion --Recovery expectations: 50%-70% (rounded estimate: 50%) -- Collateral value available to unsecured claims: $209 million -- Senior unsecured debt and pari passu claims: $4.8 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) ZEST ACQUISITION: S&P Affirms 'B' ICR, Outlook Negative ------------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit rating on Zest Acquisition Corp., and the 'B' and 'CCC+' issue-level ratings on its first-lien secured debt and second-lien secured debt, respectively. S&P removed the ratings from CreditWatch, where it placed them with negative implications on March 30, 2020, due to pandemic-related uncertainties on procedure volumes and potential tightness on liquidity. S&P said, "Our negative outlook reflects credit metrics that are weak for the current rating and risks to our base case for revenues to fully rebound and leverage to decline to below 8x for 2021, given the gradual decline of the coronavirus pandemic. "The rating affirmation reflects our assumption that 2021 operating performance will return to at least pre-COVID-19 levels with revenue growth of at least 25% and adjusted EBITDA margins sustained in the low-50% range. It also takes into account the company's adequate liquidity. Zest's revenues in the second quarter of 2020 were adversely affected by the temporary closure of dental clinics, declining by about 62% compared with same period in 2019. This was only partially mitigated by tight reduction in expenses. As states started to lift the lockdowns and dental procedures resumed in May 2020, the company began to see a gradual recovery in demand, resulting in third-quarter revenue growth of about 6% year over year. We project Zest will achieve 2021 revenues of at least $90 million, resulting from more normalized ordering patterns with continued expansion in the retail and e-commerce sales channel. We expect the company to return to EBITDA margin modestly above 50% in 2021 and onward, similar to pre-COVID-19 levels, as its revenue base recovers. We estimate the company will incur fixed charges (including interest payments and capital expenditure) of about $30 million in 2021. "Our projected adjusted leverage between 7x-8x is somewhat high for the 'B' rating, leaving limited cushion for underperformance at this rating. Moreover, while Zest's revenue improved in the second half of 2020, the sustainability of the improvement in demand is still at risk in 2021 given the residual presence of the pandemic. Despite the continuation of vaccine rollouts, various factors such as testing capacity and patient behaviors can fluctuate as the pandemic evolves. Hence, we believe there is still risk for the company to achieve our projected base case. "Our negative outlook reflects credit metrics that are weak for the current rating compounded by risks to our base case for revenues to fully rebound and leverage to decline to below 8x in 2021, given ongoing coronavirus pandemic. "We could revise the outlook to stable if we believe that company will maintain adjusted leverage below 8x and free operating cash flow to debt ratio that approaches 5%. "We could lower the rating if performance weakens for a prolonged period, leading to sustained leverage of above 8x and free operating cash flow to debt ratio of below 3%." ZOHAR FUNDS: Court OKs $1.1M Sale of Michigan Parcel ---------------------------------------------------- Law360 reports that the sale of the assets of The Zohar Funds, a trio of bankrupt distressed-company investment vehicles, continued Thursday, Feb. 18, 2021, as a Delaware bankruptcy judge approved the short-notice $1.1 million sale of an unused Michigan real estate parcel. Following one day's notice and a brief virtual hearing, U.S. Bankruptcy Judge Karen Owens approved the closure of the sale of a mothballed facility owned by Zohar portfolio company subsidiary Saline Metal Systems, one of a handful of transactions that have come before the court in recent months. Zohar has been working to sell its interests in dozens of portfolio companies since filing for Chapter 11 protection. About the Zohar Funds New York-based Patriarch Partners, LLC, is a private equity firm specializing in acquisition, buyouts, and turnaround investment in distressed American companies and brands. Patriarch Partners was founded by Lynn Tilton in 2000. Lynn Tilton and her affiliates held substantial equity stakes in portfolio companies, which include iconic American manufacturing companies with tens of thousands of employees. The Zohar funds were created to raise money through selling a form of notes called collateralized loan obligations to investors that was then used to extend loans to dozens of distressed mid-size companies, often in connection with the acquisition of those companies out of bankruptcy. Patriarch bought "distressed" companies via funding from a series of collateralized loan obligations (CLOs) marketed through Patriarch via its $2.5 billion "Zohar" funds. Tilton placed the funds into bankruptcy in 2018 in an attempt to keep Patriarch's portfolio from being liquidated by Zohar creditors including bond insurer MBIA, which insured $1 billion worth of Zohar notes. Combined debt of the funds is estimated at $1.7 billion. Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1, Limited, Zohar II 2005-1 Corp., Zohar III, Limited, and Zohar III, Corp. (collectively, the "Zohar Funds"), sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-10512 to 18-10517) on March 11, 2018. In the petition signed by Lynn Tilton, director, the Debtors were estimated to have $1 billion to $10 billion in assets and $500 million to $1 billion in liabilities. Young Conaway Stargatt & Taylor, LLP, is the Debtors' bankruptcy counsel. [^] BOND PRICING: For the Week from February 15 to 19, 2021 ----------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Basic Energy Services Inc BASX 10.750 19.325 10/15/2023 Basic Energy Services Inc BASX 10.750 19.325 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 0.001 6/1/2023 Buffalo Thunder Development Authority BUFLO 11.000 50.000 12/9/2022 CBL & Associates LP CBL 5.250 39.497 12/1/2023 Citigroup Global Markets Holdings Inc/United States C 2.000 99.759 8/25/2023 Citigroup Global Markets Holdings Inc/United States C 2.500 99.761 2/25/2028 Dean Foods Co DF 6.500 1.925 3/15/2023 Dean Foods Co DF 6.500 2.000 3/15/2023 Diamond Offshore Drilling DOFSQ 7.875 17.000 8/15/2025 Diamond Offshore Drilling DOFSQ 3.450 21.500 11/1/2023 ENSCO International Inc VAL 7.200 8.500 11/15/2027 EnLink Midstream Partners ENLK 6.000 58.978 N/A Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 0.975 0.072 1/30/2037 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 32.346 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 32.113 7/15/2023 Federal Home Loan Mortgage Corp FHLMC 0.300 99.743 2/24/2023 Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011 Frontier Communications FTR 10.500 56.250 9/15/2022 Frontier Communications FTR 8.750 54.500 4/15/2022 Frontier Communications FTR 7.125 52.750 1/15/2023 Frontier Communications FTR 6.250 52.750 9/15/2021 Frontier Communications FTR 9.250 51.500 7/1/2021 Frontier Communications FTR 10.500 55.573 9/15/2022 Frontier Communications FTR 10.500 55.573 9/15/2022 GNC Holdings Inc GNC 1.500 1.250 8/15/2020 GTT Communications Inc GTT 7.875 26.082 12/31/2024 GTT Communications Inc GTT 7.875 24.860 12/31/2024 Global Eagle Entertainment Inc GEENQ 2.750 0.010 2/15/2035 Goodman Networks Inc GOODNT 8.000 22.500 5/11/2022 Healthpeak Properties Inc PEAK 3.875 110.642 8/15/2024 Hi-Crush Inc HCR 9.500 0.063 8/1/2026 Hi-Crush Inc HCR 9.500 0.680 8/1/2026 High Ridge Brands Co HIRIDG 8.875 1.135 3/15/2025 High Ridge Brands Co HIRIDG 8.875 1.135 3/15/2025 HighPoint Operating Corp HPR 7.000 51.997 10/15/2022 Hornbeck Offshore Services HOSS 5.875 0.703 4/1/2020 J Crew Brand LLC / J Crew Brand Corp JCREWB 13.000 52.876 9/15/2021 LSC Communications Inc LKSD 8.750 8.250 10/15/2023 LSC Communications Inc LKSD 8.750 12.875 10/15/2023 Liberty Media Corp LMCA 2.250 46.992 9/30/2046 MAI Holdings Inc MAIHLD 9.500 15.875 6/1/2023 MAI Holdings Inc MAIHLD 9.500 15.875 6/1/2023 MAI Holdings Inc MAIHLD 9.500 15.875 6/1/2023 MF Global Holdings Ltd MF 6.750 15.625 8/8/2016 MF Global Holdings Ltd MF 9.000 15.625 6/20/2038 Mashantucket Western Pequot Tribe MASHTU 7.350 15.750 7/1/2026 Men's Wearhouse LLC/The TLRD 7.000 1.750 7/1/2022 Men's Wearhouse LLC/The TLRD 7.000 1.304 7/1/2022 NWH Escrow Corp HARDWD 7.500 32.500 8/1/2021 NWH Escrow Corp HARDWD 7.500 28.350 8/1/2021 Navajo Transitional Energy Co LLC NVJOTE 9.000 62.500 10/24/2024 Neiman Marcus Group LLC/The NMG 7.125 4.345 6/1/2028 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.872 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 8.750 4.872 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 8.000 4.872 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 4.872 10/25/2024 Nine Energy Service Inc NINE 8.750 45.199 11/1/2023 Nine Energy Service Inc NINE 8.750 43.856 11/1/2023 Nine Energy Service Inc NINE 8.750 43.972 11/1/2023 Northwest Hardwoods Inc HARDWD 7.500 30.750 8/1/2021 Northwest Hardwoods Inc HARDWD 7.500 28.139 8/1/2021 OMX Timber Finance Investments II LLC OMX 5.540 0.573 1/29/2020 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 90.000 6/1/2021 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 90.000 6/1/2021 Pitney Bowes Inc PBI 4.625 101.492 10/1/2021 Pride International LLC VAL 6.875 7.250 8/15/2020 Pride International LLC VAL 7.875 10.858 8/15/2040 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products REV 6.250 34.336 8/1/2024 Rolta LLC RLTAIN 10.750 2.000 5/16/2018 Sears Holdings Corp SHLD 8.000 1.310 12/15/2019 Sears Holdings Corp SHLD 6.625 6.110 10/15/2018 Sears Holdings Corp SHLD 6.625 3.521 10/15/2018 Sears Roebuck Acceptance SHLD 7.500 0.906 10/15/2027 Sears Roebuck Acceptance SHLD 6.750 0.841 1/15/2028 Sears Roebuck Acceptance SHLD 6.500 0.706 12/1/2028 Sears Roebuck Acceptance SHLD 7.000 0.662 6/1/2032 Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014 Spirit AeroSystems Inc SPR 1.017 99.803 6/15/2021 Summit Midstream Partners SMLP 9.500 45.000 N/A TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Transworld Systems Inc TSIACQ 9.500 30.000 8/15/2021 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 9.000 60.070 8/15/2021 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 9.000 59.993 8/15/2021 ZF Automotive US Inc TRW 4.500 96.012 3/1/2021 ZF Automotive US Inc TRW 4.500 96.012 3/1/2021 ********* 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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